TaxTMI Updates e-Newsletter
Jun 18,2022

Tax on ocean freight - Integrated Goods and Services Tax - composite supply of goods - constitutionality of notification

Tax on ocean freight - composite supply of goods - Integrated Goods and Services Tax - constitutionality of notification - Levy of tax under the Integrated Goods and Services Tax Act, 2007 on ocean freight for transportation of goods from a place outside India up to the Customs station of clearance - HELD THAT: - The Single Bench had allowed the writ petition by following the Division Bench decision of the Gujarat High Court which held that no tax is leviable under the Integrated Goods and Services Tax Act, 2007 on ocean freight for services provided by a person located in a non taxable territory for carriage of goods from outside India to the Customs station of clearance in India, and had declared the impugned notification unconstitutional. The High Court referred to the subsequent judgment of the Hon'ble Supreme Court in Union of India v. Mohit Minerals Pvt. Ltd., where at paragraph 147 the Supreme Court agreed with the view that a tax on the supply of a service which has already been included by the legislation as a tax on the composite supply of goods cannot be sustained. In view of the Supreme Court's affirmation of the legal principle that such a tax cannot be imposed separately and the declaration regarding the notification, the High Court's order was held to be unassailable and no interference was warranted. [Paras 5, 6]

The levy of tax under the IGST Act, 2007 on ocean freight in the circumstances considered is not permissible; the High Court order allowing the writ petition is upheld and the appeals are dismissed.

Final Conclusion: Having regard to the Supreme Court's affirmation that a tax on a service already subsumed within the composite supply of goods cannot be imposed separately, the High Court order setting aside the levy as applied to ocean freight stands; the appeals are dismissed.

Admission of application for advance ruling where question is pending in proceedings under the Act - Advance ruling sought during pendency of adjudication / show-cause proceedings - Purpose of advance ruling - decision in relation to supplies to be undertaken or proposed to be undertaken by the applicant

Admission of application for advance ruling where question is pending in proceedings under the Act - Advance ruling sought during pendency of adjudication / show-cause proceedings - Whether the Authority and Appellate Authority were justified in refusing to admit the petition for advance ruling on the ground that the question raised was pending in proceedings under the CGST/MPGST Act. - HELD THAT: - Chapter XVII of the CGST Act contemplates advance rulings as decisions given in relation to supplies being undertaken or proposed to be undertaken by the applicant so as to avoid controversy at the time of supply. The first proviso to Section 98(2) precludes admission of an application where the question raised is already pending or has been decided in proceedings under the Act. In the present case the petitioner applied for an advance ruling after a search revealed alleged evasion and after issuance of a show-cause notice calling upon the petitioner to discharge remaining GST liability for the period in question. Because the petitioner was contesting that notice and the matter was therefore pending in proceedings under the Act, the application could not be treated as an advance ruling sought in advance of adjudication. The Authorities accordingly declined to admit the application under the proviso, which the Court found to be correct application of the statutory bar.

Application for advance ruling was rightly refused as the question raised was already pending in proceedings under the Act; petition dismissed.

Final Conclusion: The writ petition is dismissed; the Advance Ruling Authority and the Appellate Authority correctly declined to admit the application for advance ruling because the question raised was pending in adjudicatory proceedings arising from the show-cause notice.

Refund of accumulated credit of compensation cess - non-speaking order - time-bar under Section 54(14)(2) of the Central Goods and Services Tax Act, 2017 - refund of unutilized input tax credit on account of export without payment of tax - alternative statutory remedy of appeal under Section 107 of the Central Goods and Services Tax Act, 2017 - requirement of reasons to satisfy natural justice - availability of ITC in GSTR-3B/credit ledger - para 43 of Circular No.125/44/2019-GST dated 18.11.2019 - misclassification of refund claim category

Non-speaking order - requirement of reasons to satisfy natural justice - Whether the consequential orders refusing refund are non-speaking and liable to be quashed for failure to record reasons. - HELD THAT: - The Court examined the consequential orders refusing refund and the reasons recorded in the remarks column. The orders state refusal on grounds including that the refund claim is time barred, that neither ITC of cess was availed in GSTR-3B nor accumulated in the credit ledger for the relevant period, and that refund is inadmissible under para 43 of Circular No.125/44/2019-GST dated 18.11.2019. Although the reasons are terse, they pinpoint the specific basis for rejection and enable the assessee to know the mind of the adjudicating authority and to file an appeal. The Court held that brevity or lack of elaboration does not automatically render an order non-speaking where the stated reasons are sufficient to satisfy requirements of natural justice. [Paras 5, 6]

The refusal orders are not non-speaking; the stated reasons are sufficient to inform the assessee of the grounds of rejection.

Time-bar under Section 54(14)(2) of the Central Goods and Services Tax Act, 2017 - alternative statutory remedy of appeal under Section 107 of the Central Goods and Services Tax Act, 2017 - refund of unutilized input tax credit on account of export without payment of tax - misclassification of refund claim category - availability of ITC in GSTR-3B/credit ledger - Whether this Court should interfere with the impugned orders denying refund or require the petitioner to avail the statutory appellate remedy. - HELD THAT: - The Revenue advanced several grounds in opposition, including that the refund claims were time barred under the prescribed provision, that ITC of compensation cess was not availed or accumulated in the credit ledger/GSTR-3B for the relevant period, that the petitioner applied under an incorrect refund category instead of the category for unutilized ITC on account of exports without payment of tax, and reliance on para 43 of the cited circular. The Court declined to adjudicate these factual and technical contentions in writ jurisdiction where an efficacious statutory remedy of appeal under Section 107 is available. The Court therefore relegated the petitioner to pursue the alternative remedy, while granting a limited period to file the appeal and directing that such appeal, if filed within the stipulated period, shall be adjudicated on merits without being dismissed on limitation grounds alone. [Paras 4, 7, 8]

Writ interference declined; petitioner directed to avail remedy of appeal under Section 107 within 60 days, and any such appeal shall be decided on merits.

Final Conclusion: Writ petitions dismissed; the Court holds that the refusal orders are not non-speaking and relegates the petitioner to file an appeal under Section 107 of the CGST Act, 2017 within 60 days, directing that any such appeal shall be decided on its merits without being rejected on limitation alone.

Jurisdictional challenge to officer's power - maintainability of writ despite availability of alternative remedy - interpretation of statutory notifications affecting jurisdiction - conditional interim stay subject to deposit

Jurisdictional challenge to officer's power - maintainability of writ despite availability of alternative remedy - interpretation of statutory notifications affecting jurisdiction - Writ petition challenging jurisdiction of the Deputy Commissioner of Revenue (DRI officer) under the State GST Act is maintainable despite availability of an alternative remedy. - HELD THAT: - The Court held that where the vires or jurisdiction of an officer or action is challenged, availability of an alternative statutory remedy does not automatically oust the jurisdiction of the writ court. The petitioner has raised a prima facie case that the impugned adjudication order was passed by an officer who may not have jurisdiction under the State GST Act, and that resolution requires interpretation of conflicting notifications and statutory provisions. Given that the challenge is to the jurisdictional competence of the officer and involves interpretation of provisions and notifications, the writ petition cannot be summarily dismissed at the threshold on the ground of alternative remedy and must be heard on merits.

Writ petition is maintainable and ordered to be heard on merits; respondents to file affidavit-in-opposition and petitioner may file reply.

Conditional interim stay subject to deposit - Interim relief in the form of a conditional stay of coercive action in respect of the adjudication order dated 3rd March, 2022 was granted. - HELD THAT: - The Court, having found a prima facie case in favour of the petitioner on the jurisdictional challenge, exercised its discretion to grant interim relief. The stay of the impugned adjudication order is conditional upon the petitioner making a deposit of 10% of the demand within ten days. Upon such deposit being made within the stipulated period, no coercive recovery action shall be taken against the petitioner pending final adjudication of the writ petition.

Conditional stay granted on payment of 10% of the demand within ten days; no coercive action if deposit is made.

Final Conclusion: The High Court directed the respondents to file affidavit-in-opposition and the petitioner to file reply, listed the matter for final hearing, held the writ maintainable on jurisdictional grounds, and granted a conditional interim stay of the adjudication order dated 3rd March, 2022 subject to deposit of 10% of the demand within ten days.

Condonation of delay - interim relief against recovery pending writ adjudication - pre-deposit requirement in statutory appeal - effect of recovery on efficacy of appellate remedy - jurisdictional objection can be raised at any stage

Condonation of delay - Application for condonation of delay in preferring the appeal was allowed. - HELD THAT: - The Court, having considered submissions for and against condonation, found that sufficient cause was shown for the 37-day delay in filing the appeal. The learned advocates were heard and the exercise of discretion was directed in favour of permitting the belated presentation of the appeal. No adverse consequence or further requirement was imposed upon grant of condonation. [Paras 1, 2, 3]

I.A. for condonation of delay is allowed.

Interim relief against recovery pending writ adjudication - pre-deposit requirement in statutory appeal - effect of recovery on efficacy of appellate remedy - jurisdictional objection can be raised at any stage - Direction that no further recovery shall be made from the appellant till disposal of the writ petition and procedural directions for filing affidavits and replies. - HELD THAT: - The Court observed that the learned Single Bench had not rejected the writ petition but had called for an affidavit-in-opposition, taking a prima facie view that the matter required responses before final adjudication. The bench noted that under the statutory appeal mechanism the appellant would be required to pre-deposit 10% of the disputed tax, whereas recoveries amounting to approximately 20% of the demand had already been effected by debiting the credit ledger; further recoveries made before expiry of the limitation for filing an appeal would, in effect, render the appellate remedy infructuous. The Court accepted the submission that a jurisdictional objection may be raised at any stage and was not precluded by earlier conduct. In consequence, the High Court restrained any further recovery from the appellant until the writ petition is heard and disposed of, directed the respondents to file and share a soft copy of the affidavit-in-opposition by a specified date, allowed the appellant time to file a reply, and granted liberty to make suitable mentions for listing before the Single Bench. [Paras 10, 11, 12, 13, 14]

Till disposal of the writ petition, no further recovery shall be made from the appellant; timelines fixed for filing and sharing the affidavit-in-opposition and for the appellant's reply, and liberty granted to seek listing before the Single Bench.

Final Conclusion: The application for condonation of delay is allowed. On merits of interlocutory relief, the Court restrained any further recovery from the appellant until the pending writ petition is disposed of, while directing timelines for the respondents to file and share their affidavit-in-opposition and for the appellant to file a reply; liberty was granted to seek listing before the Single Bench. No costs.

Principle of natural justice - notice under Section 74(1) of the Goods and Services Tax Act, 2017 - Input Tax Credit - opportunity to be heard / audi alteram partem - reply to show-cause notice - failure to raise grounds in memorandum of appeal - maintainability of writ petition

Principle of natural justice - notice under Section 74(1) of the Goods and Services Tax Act, 2017 - opportunity to be heard / audi alteram partem - reply to show-cause notice - Whether the petitioner was deprived of the right to know the transaction particulars and thereby denied the principles of natural justice when notice was issued. - HELD THAT: - The Court examined the record and found that a communication dated 11.03.2019 (referred to in the show-cause notice) identified the transaction in question and the value and ITC involved. The petitioner did not file any reply to the specific notice dated 13.03.2019, but had submitted a substantive reply on 08.05.2019 (Annexure R/2) disclosing the transaction with M/s V.K. Enterprises, Chhatarpur and enclosing relevant documents (bill, e-Way bill and GSTR). The Court held that the petitioner was therefore aware that the said inward supplies were under scrutiny and had the opportunity to respond; consequently there was no merit in the contention that the notice was so vague as to violate the principles of natural justice. [Paras 9, 10, 11, 12]

The contention that the petitioner was kept in the dark and denied natural justice is rejected; the petitioner had knowledge of the transaction and filed a reply containing the relevant details.

Failure to raise grounds in memorandum of appeal - maintainability of writ petition - Whether the writ petition is maintainable in view of the petitioner's failure to disclose the same facts in the memorandum of appeal. - HELD THAT: - The Court noted that although the petitioner had already submitted a reply to the notice disclosing the transaction, the memorandum of appeal did not mention those transactions. The petitioner later asserted that the original notice lacked details, but the record showed disclosure and awareness prior to the appellate proceedings. On this basis the Court treated the writ petition as misconceived and without substance, observing that the petitioner had not preserved the alleged defect before the appellate authority. [Paras 12, 13, 14]

The writ petition is misconceived and unsustainable because the petitioner was aware of and had disclosed the transactions yet failed to raise the pleaded ground in the memorandum of appeal.

Final Conclusion: Writ petition dismissed as devoid of merit; petition dismissed with costs payable to MPSLSA within the period directed, failing which the matter to be listed for execution of costs.

Appeal within three months under Section 107(1) - appellate authority's power to condone delay under Section 107(4) - communication of order as commencement of limitation - condonation of delay - remand for fresh consideration

Appeal within three months under Section 107(1) - communication of order as commencement of limitation - appellate authority's power to condone delay under Section 107(4) - Validity of dismissal of the appeal as time barred without ascertaining when the impugned order was communicated to the petitioner - HELD THAT: - The court held that the period of limitation for preferring an appeal under Section 107(1) begins from the date on which the decision or order is communicated to the person concerned and not merely from the date of passing of the order. The appellate authority dismissed the appeal as barred by time on the basis that it was filed more than three months after the order was passed, but there is no material on record to show when the order was communicated to the petitioner. Since communication is the critical fact determining the commencement of the limitation period, and the appellate authority did not examine or record that fact, the summary conclusion that the appeal was filed beyond time cannot be sustained. In such circumstances the appropriate course is to set aside the impugned order and remit the matter to the appellate authority to determine, after verifying when the order was communicated, whether the appeal was within time or whether delay merits condonation under Section 107(4), and to decide the appeal afresh in accordance with law. [Paras 4, 5, 6]

Impugned order set aside; matter remanded to the appellate authority for fresh consideration regarding communication of the order, applicability of limitation and, if warranted, condonation of delay, and for decision afresh in accordance with law.

Final Conclusion: Writ petition allowed; impugned order dismissing the appeal as time barred is set aside and the matter is remitted to the appellate authority for fresh adjudication on limitation and condonation issues after ascertaining date of communication of the order.

Search and inspection under GST - Panchanama and presence of independent witnesses - Re-measurement of stock

Search and inspection under GST - Panchanama and presence of independent witnesses - Re-measurement of stock - The challenge to the authorization for search and to the rejection of the request for re-measurement of stock was rejected. - HELD THAT: - The Court held that the Panchnama, produced by the petitioner itself, showed that the search team had conducted the proceedings in the presence of two independent witnesses as well as the petitioner's own representative, whose signatures were obtained without any contemporaneous objection regarding the manner of search. The Panchnama also recorded that discrepancies in stock were found and that tax and penalty were deposited on the date of search itself, which explained why no seizure was made. In that background, the subsequent request for re-measurement of the coal stock was treated as an afterthought, particularly since, after the search team had left, it could not reasonably be assumed that the stock remained untouched during the intervening period. [Paras 7, 8, 9]

No infirmity was found in the authorization for search or in the order declining re-measurement of stock, and the writ petition was dismissed.

Final Conclusion: The Court found that the search proceedings were duly conducted in the presence of independent witnesses and the petitioner's representative, and that the request for re-measurement was an afterthought. The writ petition was therefore dismissed.

Cancellation of GST registration - Revocation of cancellation under Section 29 - Appeals under Section 107 - limitation - Applicability of CBDT circular dated 25/06/2020 to statutory limitation - Extension of limitation measures issued during COVID-19 vis-a -vis pre-pandemic proceedings

Revocation of cancellation under Section 29 - Applicability of CBDT circular dated 25/06/2020 to statutory limitation - Circular dated 25/06/2020 applies only to applications for revocation under Section 29 and does not extend the appellate limitation under Section 107. - HELD THAT: - The court examined Section 29 and Section 107 of the Act of 2017 and the text of the circular dated 25/06/2020. Section 29 governs applications for revocation of cancellation of registration, whereas Section 107 prescribes the three-month period for filing appeals. The circular expressly addresses calculation of the thirty-day period for filing revocation applications under Section 29 (specifying dates relevant for cancellations up to 12/06/2020) and is therefore confined to the scheme of Section 29. The circular is unambiguous and does not purport to modify or extend the time-limit for appeals under Section 107; consequently the circular is not available to a person seeking to cure delay in filing an appeal under Section 107. [Paras 7, 8, 9]

Reliance on the circular dated 25/06/2020 to extend or affect the appellate limitation under Section 107 is not permissible; the circular is inapplicable to appeals under Section 107.

Appeals under Section 107 - limitation - Extension of limitation measures issued during COVID-19 vis-a -vis pre-pandemic proceedings - The appellant's appeal under Section 107 was time-barred and its dismissal by the Appellate Authority was justified. - HELD THAT: - Section 107 prescribes a three-month limitation for appeals. The petitioner's registration was cancelled on 04/02/2019 and the appeal against that cancellation was filed on 16/09/2019, which is beyond the three-month period. The court noted that the pandemic-era directions and extension-of-limitation measures arose subsequently in 2020 and therefore could not be invoked to validate or revive an appeal filed after the statutory period in 2019. In view of the statutory limitation and the temporal sequence of events, the Appellate Authority correctly treated the appeal as time-barred. [Paras 2, 7, 9]

The Appellate Authority rightly dismissed the appeal as barred by limitation; the writ petition challenging that dismissal is without merit.

Final Conclusion: The writ petition is dismissed. The Appellate Authority's rejection of the appeal as time-barred is affirmed and the CBDT circular of 25/06/2020, being directed to revocation under Section 29, does not assist the petitioner in relation to appeals under Section 107.

Detention and release of goods and vehicle pending adjudication - confiscation under the Central Goods and Services Tax Act, 2017 - revalidation of E-Way bill - interim release on security and bond - adjudication following detention

Adjudication following detention - confiscation under the Central Goods and Services Tax Act, 2017 - Adjudication in respect of detention/confiscation of the goods and vehicle to be completed and legality of detention to be considered afresh by the adjudicating authority. - HELD THAT: - The Court did not decide the merits of whether the goods were liable for confiscation under the Central Goods and Services Tax Act, 2017. Instead, the matter of adjudication arising from the detention recorded in Ext.P4 is remitted to the first respondent for fresh consideration. The Court directed that the adjudication proceedings consequent to the detention shall be completed within one month from receipt of the copy of the judgment. The order therefore constitutes a remand for fresh adjudication rather than a final determination on the legality of detention or confiscation.

Adjudication remitted to the first respondent for completion within one month; merits of detention/confiscation left open for fresh decision.

Detention and release of goods and vehicle pending adjudication - interim release on security and bond - revalidation of E-Way bill - Interim release of the detained goods and vehicle on specified security pending completion of adjudication. - HELD THAT: - Pending the completion of adjudication, the Court directed interim release of the goods covered by Ext.P1 and the vehicle on condition that the petitioner execute a bond in FORM GST INS-04 and furnish a Bank Guarantee equivalent to the amount of applicable tax, interest and penalty payable. This release is conditional and subject to any final orders that the adjudicating authority may pass following the remand. The Court's direction addresses only interim relief and does not resolve the underlying factual or legal contentions (including those relating to revalidation of the E-Way bill or alleged breakdown/network issues).

Goods and vehicle to be released on petitioner executing FORM GST INS-04 bond and furnishing Bank Guarantee for applicable tax, interest and penalty; release subject to final adjudication.

Final Conclusion: Writ petition disposed of by directing the first respondent to complete adjudication arising from the detention within one month and, meanwhile, ordering interim release of the goods and vehicle on execution of a bond in FORM GST INS-04 and provision of a Bank Guarantee equivalent to applicable tax, interest and penalty, all subject to the outcome of the adjudication.

Non-speaking order - Requirement of reasons in administrative orders - Revocation of cancellation of GST registration - Right to be heard - Judicial review of administrative action

Non-speaking order - Requirement of reasons in administrative orders - Judicial review of administrative action - Validity of Ext.P11 one sentence order rejecting the application for revocation of cancellation of GST registration - HELD THAT: - The impugned order (Ext.P11) consists of a one sentence rejection without any stated reasons. The Court held that reasons are the soul of every order and even a brief order must reflect an application of mind by the authority. In the absence of any reasoning in Ext.P11, the order is non speaking and cannot withstand legal scrutiny regardless of the merits of the competing contentions. Consequently, Ext.P11 was set aside and the matter remitted for fresh consideration. [Paras 7]

Ext.P11 is quashed for being non speaking; the matter is remitted for fresh consideration.

Revocation of cancellation of GST registration - Right to be heard - Procedure for fresh decision - Direction for reconsideration of the application for revocation (Ext.P8) with hearing of interested parties and timeline for disposal - HELD THAT: - The Court directed the 1st respondent to pass fresh orders on the petitioner's Ext.P8 application for revocation of cancellation of registration after hearing the petitioner and respondents 2 and 3. The Court observed that respondents 2 and 3 must be heard before final orders are passed, and noted that any separate application by respondents 2 and 3 to transfer registration is a distinct matter. To avoid procedural delay, the Court mandated appearance before the 1st respondent on a specified date and required disposal of the revocation application within the prescribed short timelines. [Paras 7, 9]

The 1st respondent is directed to rehear Ext.P8 with opportunity to parties to be heard and to pass fresh orders within the stipulated timeline.

Final Conclusion: Ext.P11 (one sentence rejection) set aside for want of reasons; the 1st respondent directed to rehear the petitioner's application for revocation of cancellation of GST registration after hearing respondents 2 and 3 and to pass fresh orders within the timelines specified by the Court.

Supply - Input Tax Credit - E-way bill - Registration as additional place of business / single registration within a State - Rule 138 - consignment value for e-way bill - Advance ruling jurisdiction under Section 97(2)

Registration as additional place of business / single registration within a State - Supply - Whether movement of raw material, semi finished, finished or capital goods between two units of the applicant within the State, operating under the same GSTIN, constitutes a 'supply' attracting GST liability. - HELD THAT: - The Authority noted that Section 25 provides for a single registration in a State with additional places of business and that where multiple establishments operate under the same registration they are not distinct persons for the purposes of the Act. The essential elements of 'supply' include involvement of consideration except for activities specified in Schedule I or import of services. Inter unit transfers between establishments covered by the same GSTIN involve no consideration and are not captured by Schedule I or import of services. Consequently such movements do not amount to 'supply' and do not give rise to GST liability. The Authority contrasted this with the position where the receiving/processing unit has a different GSTIN, in which case tax would be attracted. [Paras 4, 5, 11]

Movement of goods between the applicant's two units within the State under the same GSTIN is not a 'supply'; no GST liability arises on such movement.

Rule 138 - consignment value for e-way bill - E-way bill - What value is to be considered for generation of an E way bill, if required, for transfers between the two units. - HELD THAT: - Rule 138(1) requires generation of an E way bill where consignment value exceeds the threshold, and Explanation 2 to the rule defines consignment value as the value determined under section 15 as declared in an invoice, bill of supply or delivery challan, including taxes charged. Although inter unit transfers between units under the same GSTIN are not 'supply' (and do not attract GST), there may be movements 'for reasons other than supply' requiring an E way bill if the consignment value exceeds the prescribed limit. Therefore, where an E way bill is required, the value to be declared is the consignment value as per Explanation 2 to Rule 138(1). [Paras 5, 11]

If an E way bill is required for transfers between the units, the value to be declared is the consignment value as explained in Explanation 2 to Rule 138(1) of the CGST Rules, 2017; an E way bill must be generated if the consignment value exceeds the notified threshold.

Advance ruling jurisdiction under Section 97(2) - Whether the Authority will rule on applicability of job work provisions to movements between the applicant's two units. - HELD THAT: - Section 97(2) circumscribes the topics on which an advance ruling may be sought. The Authority observed that the applicant's question on whether movements should follow the job work procedure does not fall within the categories enumerated in Section 97(2). Consequently the Authority declined to answer the question and refrained from ruling on whether job work provisions apply to such inter unit movements. [Paras 6, 11]

No ruling given on applicability of job work procedure to the described movements because the question does not fall within the ambit of Section 97(2).

Advance ruling jurisdiction under Section 97(2) - E-way bill - Whether the Authority will rule on the separate question of requirement to issue an E way bill for such movements when the value exceeds the threshold (as posed in Question 4). - HELD THAT: - The Authority held that the applicant's Question 4 does not fall within the matters enumerated in Section 97(2) and therefore the Authority refrains from giving a ruling on that specific question. This is distinct from the Authority's ruling on Question 2, which addressed the valuation principle where an E way bill is required under Rule 138. [Paras 7, 11]

No ruling given on Question 4 as it falls outside the jurisdiction conferred by Section 97(2).

Input Tax Credit - Registration as additional place of business / single registration within a State - Whether the applicant can utilise Input Tax Credit (ITC) attributable to supplies received at one unit for discharging GST liability on clearances made from the other unit when both units operate under a single GSTIN. - HELD THAT: - Section 16(1) entitles a registered person to take ITC which is credited to the electronic credit ledger of that registered person. The electronic credit ledger is maintained for the registered person as a whole and the credit available therein can be used for payment of output tax liabilities. Since both units operate under the same GSTIN and therefore constitute a single registered person, there is a single electronic credit ledger for both establishments. The Authority accordingly held that eligible ITC available in that ledger may be used to discharge tax liabilities arising from clearances effected from either unit. [Paras 8, 11]

Yes. Eligible ITC credited to the single electronic credit ledger for the GSTIN may be used to discharge GST liabilities arising from clearances from either unit.

Advance ruling jurisdiction under Section 97(2) - Whether the Authority will rule on (a) whether purchasers' purchase orders must specify separate factory addresses, and (b) whether invoices must mention both addresses or only the address of the unit from which goods are cleared. - HELD THAT: - The Authority examined Section 97(2) and concluded that the applicant's Questions 6 and 7 do not fall within the categories on which advance rulings may be given. Consequently, the Authority refrained from answering these questions in the advance ruling. [Paras 9, 10, 11]

No ruling given on Questions 6 and 7 as they fall outside the scope of matters covered by Section 97(2).

Final Conclusion: The Authority ruled that (i) transfers of raw material, semi finished, finished and capital goods between the applicant's two units within the State operating under the same GSTIN do not constitute 'supply' and do not attract GST; (ii) where an E way bill is required the consignment value is to be declared as per Explanation 2 to Rule 138(1); (iii) eligible ITC in the single electronic credit ledger for the GSTIN may be used to discharge tax liabilities of either unit; and (iv) several operational questions (job work procedure, specific e way bill procedural queries, and address/specification on purchase orders and invoices) were not answered because they fall outside the Advance Ruling jurisdiction under Section 97(2).

Supply - Consideration - Scope of supply - Works contract service - Composite supply - Exemption under Notification No. 12/2017-CT(Rate) - Government Entity

Supply - Consideration - Scope of supply - Government Entity - Activities undertaken by the applicant for Government, for which consideration is received in the form of grants, amount to supply under the CGST Act, 2017. - HELD THAT: - The Authority applied the statutory definition of "supply" and related definitions of "person" and "consideration". The Government and government undertakings qualify as "persons" under the Act and an amount transferred by the Government for execution of a predetermined specific work constitutes "consideration". On the facts before it the applicant received payment for execution of specific works; therefore the activities undertaken for Central/State Government or local authorities, when funded by such payments, fall within the scope of "supply" as defined in the Act. [Paras 8]

The grants received for the specified works are "consideration" and the activities thereby undertaken amount to "supply".

Works contract service - Composite supply - Supply - The construction, repair and renovation works carried out by the applicant for the specified projects are classification-wise supply of services as "works contract". - HELD THAT: - Referring to the Schedule and the definition of "works contract", the Authority held that the described civil construction activities (construction of Shaheed Dwar and creation of barrier-free environment and related tourist rest house works) involve building, construction, repair and related activities and therefore fall within the definition of works contract service. The Authority noted that its conclusion is confined to the specific contracts whose terms were on record and did not purport to generalise to other works not before it. [Paras 8]

The specified works are supply of services falling under the "works contract" category.

Exemption under Notification No. 12/2017-CT(Rate) - Consideration - Government Entity - Supply of services by a Government Entity to Government, where consideration is received in the form of grants, is exempt under Notification No. 12/2017-CT(Rate) provided the consideration qualifies as a grant and is utilised for the intended purpose. - HELD THAT: - The Authority examined the amended exemption notification and concluded that exemption is available only when the character of the consideration is that of a grant and the grant is to be utilised for the intended purpose. Applying that test to the documents on record (government orders and sanction letters describing the purpose and describing the amounts as grants), the Authority held that the consideration in the two specified projects qualifies as grants and therefore exemption under the Notification applies to those projects. [Paras 8]

Exemption under Notification No. 12/2017-CT(Rate) is available where consideration is by way of grants and is so utilised; it applies to the two works before the Authority.

Exemption under Notification No. 12/2017-CT(Rate) - Consideration - The exemption at SI. No. 9C of Notification No. 12/2017-CT(Rate) is available only if the consideration is in the form of grants. - HELD THAT: - The Authority emphasised the condition precedent in the notification - that benefit is confined to supplies where the consideration is in the form of grants. The Authority recorded that the litmus test is the character of the consideration and reiterated that the exemption cannot be availed unless the payment qualifies as a grant. [Paras 11]

Exemption at SI. No. 9C is conditional on the consideration being in the form of grants.

Final Conclusion: The Authority ruled that the applicant's execution of the specified construction and renovation works, funded by amounts characterised as grants, constitutes "supply" and is classifiable as "works contract" service; further, those supplies are exempt from GST under Notification No. 12/2017-CT(Rate) because the consideration in the recorded projects is in the form of grants and is to be utilised for the stated purpose.

Definition of intermediary - import of services - place of supply of intermediary services - inter-state supply in course of import of services - reverse charge mechanism

Definition of intermediary - Overseas commission agent falls within the definition of 'intermediary' under the IGST Act, 2017. - HELD THAT: - The Authority examined the statutory definition of 'intermediary' as a person who arranges or facilitates the supply of goods or services between two or more persons and does not include a person who supplies such goods or services on his own account. On the facts and the MOU dated 05.03.2021, the overseas agent's role was to locate and facilitate purchase orders for the applicant and he received commission for that facilitation. The applicant raised export invoices in its own name and paid commission to the overseas agent; the agent did not supply the goods on his own account. Applying the definition to these contractual and transactional facts, the Authority concluded that the overseas commission agent is an intermediary within section 2(13) of the IGST Act, 2017. [Paras 10, 11]

Mr Bobby Kapoor, the overseas commission agent, is an 'intermediary' under section 2(13) of the IGST Act, 2017.

Import of services - place of supply of intermediary services - Services received by the applicant from the overseas commission agent do not constitute 'import of services' under the IGST Act, 2017. - HELD THAT: - The Authority applied the threefold test for 'import of services': (i) supplier located outside India; (ii) recipient located in India; and (iii) place of supply in India. While the supplier (agent) was located outside India and the recipient (applicant) in India, section 13(8)(b) was applied to determine the place of supply for intermediary services. Section 13 provides that the place of supply of intermediary services is the location of the supplier of such services. Since the intermediary (agent) was located in UAE, the place of supply is outside India; therefore the third condition for 'import of services' is not satisfied and the service does not qualify as import of services. [Paras 10, 11]

The services provided by the overseas commission agent to the applicant do not amount to 'import of services' under section 2(11) read with section 13(8)(b) of the IGST Act, 2017.

Inter-state supply in course of import of services - reverse charge mechanism - Applicant is not liable to pay GST on reverse charge basis under section 5(3) of the IGST Act, 2017 on commission paid to the overseas commission agent. - HELD THAT: - The Authority noted that supplies which qualify as 'import of services' are treated as inter-state supplies and may be made subject to IGST under reverse charge as specified by notification. However, having held that the intermediary services do not amount to 'import of services' because the place of supply is outside India, the fundamental prerequisite for reverse charge levy on import of services is absent. Consequently, the recipient in India is not required to discharge tax under reverse charge on the commission paid to the overseas agent under section 5(3) of the IGST Act, 2017. [Paras 10, 11]

No GST is payable by the applicant on reverse charge basis under section 5(3) of the IGST Act, 2017 on commission paid to the overseas commission agent.

Final Conclusion: The Authority ruled that (i) the overseas commission agent is an 'intermediary'; (ii) the services rendered by him are not 'import of services' because the place of supply is outside India; and (iii) accordingly, the applicant is not liable to pay GST on reverse charge basis on the commission paid to the overseas agent.

Tax Deduction at Source (TDS) on reimbursements to agents - Characterisation of payments as income for TDS liability - Deduction of tax at source under Section 194C - Concurrent findings of fact and appellate restraint under Section 260A - Precedential application of decisions on TDS liability for reimbursements

Tax Deduction at Source (TDS) on reimbursements to agents - Characterisation of payments as income for TDS liability - Deduction of tax at source under Section 194C - Concurrent findings of fact and appellate restraint under Section 260A - Whether the assessee was liable to deduct tax at source on amounts paid to the consignment agent, including claimed reimbursements, and whether a substantial question of law arises permitting interference under Section 260A. - HELD THAT: - The Revenue authorities (Assessing Officer, CIT(A)) and the Tribunal found as a factual matter that the assessee failed to prove that amounts paid to the consignment agent were mere reimbursements rather than income-bearing payments. The Tribunal endorsed the finding that brokerage and freight charged by the consignment agent were not shown to be without profit margin and that the assessee did not produce bills from brokers and transporters to substantiate true reimbursement. Reliance placed on earlier High Court decisions concerning TDS liability on reimbursements was noted, but the Court observed that those precedents do not permit re-appreciation of the factual record where the authorities have concurrently held that no documentary proof was furnished. Exercising jurisdiction under Section 260A, the High Court declined to re-open or reappreciate concurrent findings of fact recorded by the lower authorities; in the absence of any substantial question of law arising from the record, interference was not warranted. Consequently, no error of law was found that would justify reversing the concurrent factual conclusions that gave rise to the TDS liability determination.

Concurrent factual findings that the payments were not proved to be mere reimbursements were upheld; no substantial question of law was shown and the appeal under Section 260A was dismissed.

Final Conclusion: The appeal under Section 260A is dismissed: the High Court upheld the concurrent factual findings that the assessee did not establish that payments to the consignment agent were reimbursements free of profit, declined to reappreciate the evidence, and found no substantial question of law warranting interference.

Estimation of income by proportionate addition - bogus purchases - treatment of purchases where corresponding sales are admitted - reassessment under Section 148

Estimation of income by proportionate addition - bogus purchases - treatment of purchases where corresponding sales are admitted - Whether the addition should be restricted to an estimated profit of 15% of the alleged bogus purchases or the entire alleged purchases should be added back to income. - HELD THAT: - The Assessing Officer, on reopening the assessment, added the entire alleged bogus purchases to income. The Commissioner (Appeals) held that, although circumstantial evidence established the bogus nature of the transactions, the Assessing Officer had not controverted the sales; consequently the entire purchases could not be rejected and an estimate of profit at 15% of the alleged bogus purchases would meet the ends of justice. The Tribunal affirmed that reasoning, observing that where sales are admittedly on record and there is no evidence of actual purchase, purchases cannot be disbelieved without disturbing the sales in the case of a trader and the proportional estimation adopted by the Commissioner (Appeals) was justified. The High Court, applying a Division Bench decision in an identical factual situation, accepted that purchases could not be rejected without affecting admitted sales and held that no substantial question of law arose, thereby upholding the Tribunal's confirmation of the 15% estimation. [Paras 6, 7, 8]

Tribunal's confirmation of the Commissioner (Appeals)'s restriction of the addition to 15% of the alleged bogus purchases is upheld and the Revenue's appeal is dismissed.

Final Conclusion: Appeal dismissed; the ITAT's order confirming the CIT(A)'s estimate of 15% of the alleged bogus purchases for AY 2011-2012 is affirmed and no substantial question of law arises.

Reassessment under Section 148 - Requirement of prior inquiry and opportunity under Section 148A - Deeming of notices issued under unamended Section 148 as show-cause notices under Section 148A - One-time dispensation of prior approval of specified authority under Section 148A(a) - Binding effect of orders passed under Article 142 of the Constitution

Reassessment under Section 148 - Requirement of prior inquiry and opportunity under Section 148A - Validity of notices issued after 01.04.2021 under unamended Section 148 where Section 148A procedures were not followed. - HELD THAT: - The writ petitions challenging notices issued post 01.04.2021 under the unamended provision of Section 148 were disposed of by the High Court in light of the Supreme Court's decision in Ashish Agarwal (dated 04.05.2022). The Supreme Court held that the substituted provisions introduced by the Finance Act, 2021, including the procedural safeguards in Section 148A, apply to notices issued on or after 01.04.2021. Rather than quashing such notices, the Supreme Court directed that notices issued under unamended Section 148 from 01.04.2021 be construed as deemed show-cause notices under Section 148A(b), and that the assessing officers supply the information and material relied upon to the assessee and follow the procedural steps prescribed by Section 148A (including allowing the assessee to reply and passing orders under Section 148A(d)) before issuing any notice under the substituted Section 148. The High Court applied this ratio and disposed of the petitions accordingly.

The challenge to the impugned notices is disposed of in terms of the Supreme Court's modification: impugned notices are to be treated as deemed show-cause notices under Section 148A and the assessing officers shall follow the procedure under Section 148A before proceeding further.

Deeming of notices issued under unamended Section 148 as show-cause notices under Section 148A - One-time dispensation of prior approval of specified authority under Section 148A(a) - Binding effect of orders passed under Article 142 of the Constitution - Extent to which the procedure under Section 148A must be enforced in respect of notices issued under unamended Section 148 after 01.04.2021, and whether prior approval of the specified authority is mandatory for such notices. - HELD THAT: - Relying on the Supreme Court's order, the High Court recorded that (i) the impugned Section 148 notices issued under the unamended provision shall be deemed to have been issued under Section 148A and treated as show-cause notices under Section 148A(b); (ii) as a one-time measure, the Supreme Court dispensed with the requirement of conducting any enquiry with prior approval of the specified authority under Section 148A(a) in respect of those notices issued under unamended Section 148 from 01.04.2021 until the date of the judgment (including those quashed by High Courts); and (iii) assessing officers must thereafter pass orders in terms of Section 148A(d) after following the procedure and then may issue notice under substituted Section 148. The High Court noted the Supreme Court's declaration that the order was passed under Article 142 and is applicable pan-India to similar cases, and implemented that direction in disposing of the batch of petitions.

The one-time dispensation of prior approval under Section 148A(a) is accepted for notices issued under unamended Section 148 from 01.04.2021; assessing officers must nevertheless follow the remaining Section 148A procedure and pass orders under Section 148A(d) before proceeding.

Final Conclusion: The batch of writ petitions is disposed of in terms of the Supreme Court's order in Ashish Agarwal (04.05.2022): impugned notices issued under unamended Section 148 on or after 01.04.2021 are to be treated as deemed show-cause notices under Section 148A, the prior-approval requirement is dispensed with as a one-time measure for such notices, and assessing officers must follow the Section 148A procedure (including furnishing material and passing orders under Section 148A(d)) before further action; no order as to costs.

Reopening assessment - notice under Section 148A(b) and order under Section 148A(d) - premature judicial intervention - adequacy of alternative remedies under the Income tax Act - jurisdictional error versus error within jurisdiction - exercise of writ jurisdiction under Article 226/227

Reopening assessment - notice under Section 148A(b) and order under Section 148A(d) - premature judicial intervention - adequacy of alternative remedies under the Income tax Act - jurisdictional error versus error within jurisdiction - Whether the High Court should interfere by writ at the stage when notice under Section 148 has been issued and the assessing officer has yet to frame reassessment under Section 147 - HELD THAT: - The Court held that interlocutory challenge to issuance of notice/order under the reassessment provisions is premature where the statutory reassessment machinery has not run its course. Reliance was placed on consistent precedents which recognise that the Income tax Act provides a complete remedial scheme and that factual sufficiency of material for reopening cannot be examined at the threshold by a writ court. The judgment differentiates between jurisdictional errors (which may attract judicial intervention) and errors of fact or law within jurisdiction, for which statutory remedies are available. Absent any clear, palpable usurpation of jurisdiction from the face of the notice, the writ court should not substitute its fact finding for the assessing authority and must refrain from interfering at this intermediate stage; the assessee remains entitled to raise all contentions before the assessing authority and in the appellate fora under the Act. [Paras 10, 11]

Writ petition dismissed; no interference with the notice and the order at this premature stage while reassessment proceedings remain pending.

Final Conclusion: The High Court dismissed the petition and declined to quash the notice/order under Section 148A at the interim stage, holding that the statutory reassessment process and available remedies under the Income tax Act must first be pursued and that premature interference is not warranted.

Characterisation of foreign exchange loss as capital or revenue expenditure - treatment of forex loss on foreign currency term loan obtained for purchase of capital asset - capitalisation of exchange difference into cost of asset and allowance of depreciation - conversion of rupee term loan to foreign currency term loan

Characterisation of foreign exchange loss as capital or revenue expenditure - treatment of forex loss on foreign currency term loan obtained for purchase of capital asset - Forex loss arising on conversion of a rupee term loan into a foreign currency term loan, taken for purchase of machinery, is to be treated as capital loss and not as revenue expenditure. - HELD THAT: - The Tribunal noted that the foreign currency term loan was sanctioned by way of conversion of an existing rupee term loan and that the FCTL carried a concessional rate. The assessee did not place on record any contemporaneous representation or submission before the AO or the CIT(A) explaining treatment of the forex loss or its treatment in subsequent years. In the absence of such material and having regard to the fact that the loan was taken for acquisition of machinery (a capital asset), the Tribunal affirmed the findings of the AO and the CIT(A) that the exchange difference on the long term loan is capital in nature and could not be allowed as a revenue deduction in the year under consideration. [Paras 5]

Findings of AO and CIT(A) treating the forex loss as capital loss are affirmed.

Capitalisation of exchange difference into cost of asset and allowance of depreciation - Alternate claim that, if the forex loss is treated as capital in nature, it should be added to the cost of the machinery and depreciation allowed accordingly is accepted. - HELD THAT: - The Tribunal accepted the assessee's alternative submission that where exchange difference on a long term loan used to acquire a capital asset is regarded as capital expenditure, the same ought to be incorporated in the cost of the asset. Consequentially, depreciation should be allowed on the enhanced cost at the appropriate rate. The Tribunal directed the AO to grant depreciation on the forex loss amount by including it in the asset's cost and computing depreciation at the appropriate rate. [Paras 6]

Assessee's alternate claim allowed; AO directed to capitalise the exchange difference into asset cost and allow depreciation at the appropriate rate.

Final Conclusion: The appeal is partly allowed: the Tribunal upholds the AO's and CIT(A)'s conclusion treating the forex loss on the converted term loan as capital in nature, but allows the assessee's alternative claim that the exchange difference be added to the cost of the machinery and depreciation be granted thereon; the AO is directed to give effect accordingly.

Tax deduction at source (TDS) liability - exemption of recipient's income under section 80P - certificate under section 197 for nil or lower deduction - reliance on proof of tax paid by payee (Hindustan Coca Cola principle) - interest liability for delayed payment of tax

Tax deduction at source (TDS) liability - exemption of recipient's income under section 80P - certificate under section 197 for nil or lower deduction - reliance on proof of tax paid by payee (Hindustan Coca Cola principle) - interest liability for delayed payment of tax - Liability of the assessee to deduct tax at source on payments to farmer societies and whether the appellants could avoid TDS by relying on exemption or proof of tax having been paid by the payees. - HELD THAT: - The Tribunal held that the assessee's liability to deduct TDS on the various payments to societies was admitted and patent. There was no evidence before the authorities or on record that the payee-societies' income was unconditionally exempt under section 80P or that the societies had obtained certificates under section 197 entitling the assessee to refrain from or reduce TDS. The decision in Hindustan Coca Cola, permitting a payer to refrain from deducting tax where the payee proves tax already deposited, applies only where such proof or an unqualified exemption is established. Absent such proof or a valid section 197 certificate, the payer's obligation to deduct TDS remains. The Tribunal agreed with the CIT(A)'s reasoning that the procedural remedy under section 197 must be availed of and, in the facts of the case, the AO and CIT(A) correctly fastened TDS liability; the payer remains liable for interest for delayed payment and other consequences where applicable.

Assessee's appeals dismissed; TDS liability upheld for the years in question.

Final Conclusion: Appeals dismissed. The admitted failure to deduct TDS on payments to the farmer societies for AYs 2010-11 to 2012-13 was correctly sustained by the authorities in the absence of evidence of unconditional exemption or of a certificate under section 197 or proof that the payees had already paid the tax.

Exemption under section 10(10)(i) of Income-tax Act - holder of a civil post under a State - distinction between clause (i) and clause (iii) of section 10(10) - state university employees treated as State employees

Exemption under section 10(10)(i) of Income-tax Act - holder of a civil post under a State - distinction between clause (i) and clause (iii) of section 10(10) - Whether the gratuity amount received by the assessee is exempt under section 10(10)(i) as an employee holding a civil post under the State, rather than being limited under section 10(10)(iii). - HELD THAT: - The Tribunal held that the assessee, an employee of Chaudhary Charan Singh Haryana Agricultural University (CCS HAU), is an employee holding a civil post under the State. The Tribunal relied on material showing CCS HAU was established by the Haryana and Punjab Agricultural Universities Act, 1970, functions as a State University, is funded by the State, and that the assessee's pension was computed under Civil Services Rules, indicating applicability of State service rules. Following coordinate-bench decisions, the Tribunal reasoned that where an employee holds a civil post under a State, clause (i) of section 10(10) applies entitling the employee to full exemption of death-cum-retirement gratuity; such a case cannot be treated under clause (iii) which provides a limited exemption. Applying that principle to the facts, the Tribunal concluded the disputed gratuity received during the year falls within section 10(10)(i) and is therefore exempt. [Paras 7, 8]

The appeal is allowed; the impugned order is set aside and the Assessing Officer is directed to allow exemption under section 10(10) in respect of the disputed gratuity amount received by the assessee during the year.

Final Conclusion: Following coordinate-bench authorities and on the facts that CCS HAU is a State University and the assessee held a civil post under the State with pension computed under Civil Services Rules, the Tribunal allowed the appeal and directed exemption of the gratuity under section 10(10)(i).

Interest on refund under section 244A - rectification under section 154 - time for computing interest up to actual date of payment - liability for delay by refund banker - application of Board instructions and departmental circulars - precedential effect of Supreme Court decisions on interest on refunds

Interest on refund under section 244A - time for computing interest up to actual date of payment - precedential effect of Supreme Court decisions on interest on refunds - application of Board instructions and departmental circulars - Assessee entitled to interest under section 244A on the refund amount up to the date of actual grant of refund (11.11.2014) notwithstanding that the AO's computation recorded interest only up to 06.01.2014. - HELD THAT: - The Tribunal accepted the view recorded by the CIT(A) that interest under section 244A is payable up to the date the refund is actually granted. The CIT(A) relied on Board Instruction No.7 (01.08.2002), subsequent departmental instructions and circulars, and relevant Supreme Court precedent applied to refunds and interest computation. The assessee received the refund cheque on 11.01.2014 (actual payment recorded as 11.11.2014 in the order) but the tax computation sheet issued by the AO showed interest computed only to 06.01.2014. The AO's position was contrary to the settled departmental instructions and judicial authority which require computation of interest till the actual date of payment. The Tribunal found no valid basis to restrict interest to the earlier date and upheld the CIT(A)'s direction to compute interest up to 11.11.2014. [Paras 3, 4]

Allow interest under section 244A on the refund up to the date of actual grant of refund, i.e., 11.11.2014.

Rectification under section 154 - liability for delay by refund banker - application of Board instructions and departmental circulars - AO was not justified in rejecting the assessee's rectification claim under section 154 to seek additional interest for the intervening period attributable to delay in actual payment; the CIT(A)'s direction to the AO to grant the additional interest was upheld. - HELD THAT: - The AO refused rectification relying on a High Court decision; however, the CIT(A) examined the departmental instructions and controlling Supreme Court decisions and directed that the AO grant interest up to the actual date of refund. The Tribunal found the CIT(A)'s reasoning in conformity with Board instructions and binding precedents, and observed that delay caused in service of refund by the Refund Banker does not absolve the department from liability to pay interest up to the date the refund is actually made. Consequently, the AO's refusal to rectify the computation under section 154 was set aside to the extent of directing payment of additional interest. [Paras 3, 4]

Rectification claim under section 154 to grant additional interest was to be allowed; AO directed to grant interest up to the actual date of refund.

Final Conclusion: The appeal by the Revenue is dismissed; the CIT(A)'s order directing grant of interest under section 244A up to the date of actual refund (11.11.2014) and setting aside the AO's refusal to rectify the interest computation is affirmed.

Penalty under section 271(1)(c) of the Income Tax Act, 1961 - Notice issued under section 274 - Validity of penalty notice - requirement to specify the limb: concealment of income or furnishing of inaccurate particulars - Defective notice vitiating penalty proceedings - Bona fide claim/difference of opinion and levy of penalty

Notice issued under section 274 - Defective notice vitiating penalty proceedings - Penalty under section 271(1)(c) of the Income Tax Act, 1961 - Notice dated 25.02.2013 was invalid for not specifying whether penalty was for concealment of income or for furnishing inaccurate particulars, and consequently the penalty order dated 09.02.2015 was set aside. - HELD THAT: - The Tribunal found material ambiguity between the assessment order and the penalty proceedings. The assessment order recorded only that "Penalty proceedings under section 271(1)(C) ... are hereby initiated" without a specific conclusion whether the case involved concealment of income or furnishing of inaccurate particulars, while the penalty order similarly failed to indicate which limb of section 271(1)(c) was relied upon. The Tribunal noted that in the body of the assessment order the AO used the term "inaccurate particulars" but the assessment's concluding paragraph (para no. 9 of the assessment order) and the notice under section 274 did not categorically state the specific charge. The Tribunal held that a notice must give a clear, categorical indication of the specific violation for which penalty is invoked; absence of such specificity renders the notice defective and the consequent penalty order unsustainable. Reliance on precedents dealing with the necessity of a clear charge in the penalty notice supported the conclusion. Because the notice was held invalid, the Tribunal did not proceed to examine the merits of the penalty on facts or on issues such as onus under Explanation 1 to section 271(1)(c) or bona fide claims; those grounds therefore became moot. [Paras 11]

Notice dated 25.02.2013 is invalid for failure to specify the limb of section 271(1)(c); penalty order dated 09.02.2015 is set aside and revenue appeal dismissed.

Final Conclusion: For lack of a legally valid notice specifying the precise charge under section 271(1)(c), the penalty proceedings were vitiated; the penalty order is set aside and the revenue's appeal is dismissed.

Reopening of assessment under Sec.147 - escapement of income requires fresh tangible material - change of opinion as impermissible basis for reassessment - reopening based on return and enclosures already on record - computation of deduction under section 80M rendered infructuous by quashing of reassessment

Reopening of assessment under Sec.147 - escapement of income requires fresh tangible material - change of opinion as impermissible basis for reassessment - reopening based on return and enclosures already on record - Reopening of assessment for AY 1992-93 and AY 1993-94 was invalid and reassessment proceedings were quashed. - HELD THAT: - The Tribunal found that the assessing officer's reasons for reopening did not rely on any tangible material coming into possession after the original assessment but rested on the assessee's own computation and explanatory note filed with the return concerning accounting of interest on securities. Reopening the assessment on the basis of material already on record amounted to a mere change of opinion and review of the original assessment, which is impermissible. The Tribunal applied the settled principle that formation of belief under Sec.147 must be founded on new information or tangible material beyond what was available at the time of the original assessment, and therefore held reassessment unsustainable and liable to be quashed. [Paras 7, 8, 9, 10, 11]

Reassessment proceedings for the stated years quashed; legal grounds raised by the assessee on reopening allowed and appeals on this ground allowed.

Computation of deduction under section 80M rendered infructuous by quashing of reassessment - The challenge to the reduction in deduction under section 80M was held to be infructuous in view of the quashing of reassessment. - HELD THAT: - Having quashed the reassessment on legal grounds, the Tribunal observed that the question of computation of deduction under section 80M did not survive and therefore need not be adjudicated. The contention that no expenditure was incurred and hence no apportionment should be made was not considered on merits because the foundational reassessment itself was set aside. [Paras 10]

Ground relating to computation of deduction under section 80M dismissed as infructuous.

Final Conclusion: The Tribunal allowed the appeals for AY 1992-93 and AY 1993-94 by quashing the reassessment proceedings as founded on material already on record (mere change of opinion), and consequently held the challenge to the computation under section 80M to be infructuous.

Genuineness of long-term capital gains from penny stocks - treatment of sale proceeds as unexplained cash credit under section 68 - onus of proof on assessee to substantiate share transactions - requirement of opportunity for cross examination of investigation witnesses - reliance on documentary evidence (bank statements, demat entries, contract notes) to rebut allegation of bogus transactions

Genuineness of long-term capital gains from penny stocks - treatment of sale proceeds as unexplained cash credit under section 68 - onus of proof on assessee to substantiate share transactions - requirement of opportunity for cross examination of investigation witnesses - reliance on documentary evidence (bank statements, demat entries, contract notes) to rebut allegation of bogus transactions - Whether the assessing officer was justified in treating the sale proceeds as unexplained cash credit under section 68 and disallowing the claimed exemption on long term capital gains arising from sale of shares of Sunrise Asian Ltd. - HELD THAT: - The Tribunal held that the assessing officer had not produced material to establish that the assessee had introduced unaccounted money for acquisition of shares or that there was collusion/connivance with entry providers or brokers. The assessee's purchases and sales were through banking channels, the shares were held for over three years, and documentary evidence such as payment by demand draft, demat entries and sale through stock exchange with STT paid were on record. The AO principally relied on the investigation wing's report and on variations in share price but did not provide the assessee an opportunity to cross examine the persons whose statements formed the basis of the adverse finding. In these circumstances, and having regard to consistent Tribunal decisions cited which emphasize that suspicion, price movements or findings of an investigation wing standing alone cannot supplant documentary proof, the Tribunal found that the AO failed to discharge the burden of proving that the transactions were bogus. Consequently, invocation of section 68 was not justified and the addition was unsustainable. [Paras 7, 8]

Addition treating sale proceeds as unexplained cash credit under section 68 deleted and exemption on long term capital gains upheld; Revenue's appeal dismissed.

Final Conclusion: The Tribunal upheld the Commissioner (Appeals) and dismissed the Revenue's appeal for AY 2015-16, holding that the assessing officer failed to produce cogent material to prove the transactions were bogus and that the assessee's documentary evidence and lack of opportunity to cross examine investigation witnesses rendered the addition under section 68 unsustainable.

Revision of assessment under section 263 - Depreciation - admissibility for assets of an undertaking engaged in generation of power under Section 32(1) - Block of assets concept - Interplay of amendments to depreciation rates in Appendix I to the Income tax Rules - Every year as an independent unit

Revision of assessment under section 263 - Depreciation - admissibility for assets of an undertaking engaged in generation of power under Section 32(1) - Interplay of amendments to depreciation rates in Appendix I to the Income tax Rules - Block of assets concept - Whether the Pr. CIT was justified in invoking section 263 to revise the assessment on the ground that higher depreciation at 80% on windmills was not allowable for the year under consideration. - HELD THAT: - A careful comparison of the entries in Appendix I shows that the benefit of higher depreciation at 80% was initially available to windmills installed on or before 31 March 2012, while the subsequent amendment made windmills installed on or after 1 April 2014 eligible for 80% again. Consequently, windmills installed in the intervening period 01/04/2012 to 31/03/2014 were not entitled to 80%, but there is no indication that the amendment withdrew the 80% benefit for windmills already installed on or before 31/03/2012. The Assessing Officer had allowed 80% depreciation in respect of windmills which were undisputedly installed on or before 31/03/2012. The Tribunal held that, on the proper construction of the Appendix entries and having regard to the fact that those windmills had been shown in the relevant block, the Assessing Officer's allowance was correct for the year under consideration. In those circumstances the Pr. CIT's conclusion that the assessment order was erroneous and prejudicial lacked merit and the exercise of powers under section 263 was not justified. The Tribunal therefore set aside the order passed by the Pr. CIT and restored the assessment order passed under section 143(3). [Paras 7, 8]

The Pr. CIT's order under section 263 is set aside; the Assessing Officer's order allowing 80% depreciation on windmills installed on or before 31/03/2012 is restored.

Final Conclusion: Appeal allowed; the Tribunal found no error in the assessment in relation to the depreciation claimed on windmills installed on or before 31/03/2012 for AY 2015-16 and set aside the revisional order passed by the Pr. CIT under section 263, restoring the assessment order passed under section 143(3).

Presumptive taxation under section 44AD - unexplained cash credits - section 68 - books of account as condition precedent for invocation of section 68 - principle of consistency in tax proceedings - set off of loss from derivative transactions - remand for verification

Presumptive taxation under section 44AD - section 68 - unexplained cash credits - books of account as condition precedent for invocation of section 68 - principle of consistency in tax proceedings - Validity of additions made under section 68 in respect of cash deposits where assessee has filed return under section 44AD on presumptive basis and AO accepted total receipts. - HELD THAT: - The Tribunal held that where an assessee has filed return under the presumptive scheme of section 44AD and the Assessing Officer has accepted the gross receipts declared in that return, the AO cannot independently invoke section 68 to make additions by treating bank deposits as unexplained cash credits without disturbing the accepted returned figure. The decision applied precedents holding that maintenance of books of account is a condition precedent for invoking section 68 and that bank passbooks or bank statements cannot be equated with books of account. The Tribunal noted that the AO did not dispute the total receipts figure for job work in assessment, yet sought to treat cash deposits as unexplained; following consistent judicial authority the Tribunal concluded that separate additions under section 68 were not sustainable. The Tribunal also examined the evidence for unsecured loans (each below Rs.20,000) and found confirmations and identity proofs sufficient to substantiate the source of those deposits. On these bases the additions under section 68 were deleted. [Paras 7, 8]

Grounds 1 to 3 allowed; additions under section 68 deleted and deposits from identified small lenders accepted.

Set off of loss from derivative transactions - remand for verification - Claim for set off of loss from derivative transactions raised before the Tribunal for the first time and whether it can be entertained. - HELD THAT: - The Tribunal accepted that a legally valid claim can be raised before appellate authorities even if not made earlier, but observed that the revenue had no prior opportunity to verify the quantification and genuineness of the claimed derivative loss. In the interests of justice, the Tribunal did not decide the claim on merits but restored the matter to the Assessing Officer for verification and adjudication of the set off claim, directing the AO to examine the claim since it was not considered at earlier stages. [Paras 10]

Additional ground allowed for statistical purposes and remitted to the Assessing Officer for verification of the claimed set off.

Final Conclusion: The appeal is allowed: additions made under section 68 were deleted as unsustainable where receipts were accepted under the presumptive scheme of section 44AD and identified small loans were substantiated; the late-raised claim for set off of derivative loss is permitted to be examined and is remanded to the Assessing Officer for verification.

Condonation of delay - Section 263 jurisdictional power of Commissioner - Audit objection as basis for exercise of revisionary power - Erroneous and prejudicial to the interests of Revenue - Application of mind by Assessing Officer - Deduction under section 80P

Condonation of delay - Principle of sufficient cause - Delay in filing the appeal was condoned. - HELD THAT: - The assessee's appeal was 243 days time-barred. The assessee explained delay by reliance on advice from tax consultants that led to confusion about the appropriate forum and timing for filing the appeal, supported by an affidavit. The Tribunal applied the pragmatic approach to 'sufficient cause', accepting that advancing substantial justice justified liberal construction of the delay explanation and thereby condoned the delay. [Paras 3]

Delay in filing the appeal is condoned and the appeal is admitted for consideration on merits.

Section 263 jurisdictional power of Commissioner - Audit objection as basis for exercise of revisionary power - Application of mind by Commissioner - Validity of initiation and exercise of jurisdiction under section 263 was upheld. - HELD THAT: - Although the initiation of revisionary proceedings followed an audit objection communicated by the Assessing Officer, the Principal Commissioner applied his own mind to the assessment order, analysed the facts and law, afforded opportunity of hearing to the assessee, and recorded specific observations that the AO had allowed claims without proper examination. Reliance on precedent that permits exercise of section 263 jurisdiction on the basis of audit objections provided the Commissioner himself applies his mind. On this basis the Tribunal found no infirmity in the Pr. CIT's initiation and exercise of jurisdiction under section 263. [Paras 5]

The section 263 order is validly initiated and within the Commissioner's jurisdiction.

Erroneous and prejudicial to the interests of Revenue - Application of mind by Assessing Officer - Deduction under section 80P - The Tribunal upheld the view that the original assessment order was erroneous and prejudicial to the interests of the Revenue for lack of proper enquiry and incorrect application of law, and therefore the section 263 order setting aside the assessment was justified. - HELD THAT: - On review of the assessment record and the Pr. CIT's order, the Tribunal observed that the Assessing Officer did not make requisite enquiries or apply his mind regarding key issues identified by the Commissioner - notably the allowability of section 80P deductions on interest earned from deposits with entities other than cooperative societies/cooperative banks, the extent of exemption in relation to rental/annual crop charges, treatment of short-term capital gains on sale of depreciable assets, and the claim for set-off of brought forward losses. The assessee failed to point to any specific instances of detailed enquiry by the AO in the original assessment. Given this evident lack of enquiry and incorrect application of law, the Pr. CIT correctly concluded that the assessment was erroneous and prejudicial and directed fresh examination by the AO after affording opportunity to the assessee. [Paras 4, 6]

The section 263 direction to the Assessing Officer to re-examine and verify the matters after giving the assessee opportunity is justified and upheld.

Final Conclusion: Delay in filing the appeal is condoned; the Commissioner's exercise of revisionary jurisdiction under section 263 is valid; the original assessment was held to be erroneous and prejudicial for lack of proper enquiry and incorrect application of law, and the order under section 263 directing the Assessing Officer to re-examine the issues after affording opportunity is upheld; the appeal is dismissed.

Carry forward of short-term capital loss - Requirement of filing return by the due date for claiming and carrying forward losses - Effect of a return filed in response to a notice under section 153A on entitlement to carry forward losses - Prohibition on carrying forward losses not determined in pursuance of a return filed under section 139(3) (section 80)

Carry forward of short-term capital loss - Effect of a return filed in response to a notice under section 153A on entitlement to carry forward losses - Requirement of filing return by the due date for claiming and carrying forward losses - Prohibition on carrying forward losses not determined in pursuance of a return filed under section 139(3) (section 80) - Whether a short-term capital loss claimed for the assessment year 2016-17 in a return filed in response to a notice under section 153A can be carried forward for set-off in subsequent years. - HELD THAT: - The Tribunal examined whether the short-term capital loss, not included in the original return filed under section 139(1) within the due date but claimed in the return filed pursuant to notice under section 153A, could be carried forward. The Court applied the statutory scheme that requires a loss under the head "capital gains" to be determined in pursuance of a return filed within the due date prescribed under section 139(1)/139(3) to qualify for carry forward. The CIT(A) and the Tribunal noted that section 80 prohibits carrying forward any loss not determined in pursuance of a return filed in accordance with subsection (3) of section 139. The decision in BE Billimoria & Co. Ltd. was considered distinguishable because that case dealt with a voluntarily revised return curing a defect in the original timely return (where the defect had been removed and no section 153A trigger was involved). In the present case there was no defect in the original return; the loss was first claimed only in the return filed in response to section 153A proceedings. The Tribunal held that a return filed pursuant to section 153A does not satisfy the statutory requirement for carry forward under section 80 and therefore the short-term capital loss claimed in the 153A return could not be carried forward. [Paras 6]

The claim to carry forward the short-term capital loss for AY 2016-17, having been made first in the return filed in response to section 153A, is not allowable; the CIT(A) order denying carry forward is upheld.

Final Conclusion: The Tribunal dismissed the assessee's appeal and upheld the CIT(A)'s denial of carry forward of the short-term capital loss claimed in the return filed pursuant to section 153A for assessment year 2016-17.

Service of show cause notice and entitlement to personal hearing - personal liability of company directors for penalties imposed on the company - quashing of adjudication order for want of basis to fasten personal liability - recovery of penalty under the Foreign Trade (Development & Regulation) Act, 1992

Service of show cause notice and entitlement to personal hearing - Adjudication order set aside on ground of non-service of statutory notices and absence of personal hearing to the petitioner - HELD THAT: - Petitioner pleaded that he was not served with the show cause notice dated 26th April, 2002, nor given notice of personal hearing, and that demand and refusal notices referred to in the adjudication order were not served on him. The respondent did not deny these averments in reply. The court found that the absence of denial in the affidavit in reply and the adjudication order's silence about service on the petitioner established a procedural defect. On this basis the adjudication order could not be sustained insofar as it affected the petitioner. [Paras 7]

Adjudication order quashed insofar as it affects the petitioner for want of service of notices and absence of personal hearing.

Personal liability of company directors for penalties imposed on the company - quashing of adjudication order for want of basis to fasten personal liability - recovery of penalty under the Foreign Trade (Development & Regulation) Act, 1992 - Order directing recovery of penalty from the petitioner as a director was quashed for lack of statutory basis and absence of reasoning in the adjudication order - HELD THAT: - The adjudication order imposed penalty on the company for default in export obligation but then directed that the noticee firm and its directors (including the petitioner) pay the penalty. The order contains no discussion or legal basis explaining how directors became personally liable. Counsel for respondents conceded there is no provision in the Act permitting recovery of a company-imposed penalty from directors personally. The appellate authority's order failed to address the petitioner's submissions on absence of a statutory basis. In these circumstances the court found the attempt to recover the company's penalty from the director was without basis and the direction against the petitioner could not stand. [Paras 8, 9, 11]

Directions in the adjudication order and the appellate order to recover the penalty from the petitioner as a director are quashed and set aside for lack of basis to fasten personal liability.

Final Conclusion: The appeal order dated 13th April, 2010 is set aside; the adjudication order dated 5th February, 2008 is quashed and set aside insofar as it directs recovery of the penalty from the petitioner; petition disposed of with no order as to costs.

Validity of Show Cause Notices issued by officers of the Directorate of Revenue Intelligence (DRI) as "proper officer" under the Customs Act - Validation of past proceedings by Section 97 of the Finance Act, 2022 - Amendment to Section 17-introduction of self-assessment of Bills of Entry and Shipping Bills w.e.f. 08.04.2011 - Appointment of DRI officers as Officers of Customs by notifications under Section 4 of the Customs Act - Board's power to assign functions and the amended concept of "proper officer" (Sections 2(34), 4, 5 and post 2022 amendments) - Remand where adjudication relied on third party statements not tested by cross examination - Scope of judicial review under Article 226 in matters of rate of duty and valuation

Validity of Show Cause Notices issued by officers of the Directorate of Revenue Intelligence (DRI) as "proper officer" under the Customs Act - Validation of past proceedings by Section 97 of the Finance Act, 2022 - Appointment of DRI officers as Officers of Customs by notifications under Section 4 of the Customs Act - Board's power to assign functions and the amended concept of "proper officer" (Sections 2(34), 4, 5 and post 2022 amendments) - Whether show cause notices and adjudication proceedings initiated by officers of the Directorate of Revenue Intelligence were without jurisdiction and therefore liable to be quashed. - HELD THAT: - The Court examined the statutory scheme (Sections 2(34), 4 and 5 of the Customs Act), the Notifications appointing DRI officers as officers of Customs, the 2011 amendment to Section 17 (self assessment) and the subsequent 2022 legislative changes. It held that officers of the DRI had been appointed as "Officers of Customs" by notifications issued under Section 4 and that the Finance Act, 2022 (notably Section 97) validates actions taken by officers of Customs (as specified) and provides that pending proceedings be disposed of under the Act as amended. The Court therefore concluded that the challenge to the impugned show cause notices and orders premised on the contention that DRI officers were not "proper officers" fails in view of (i) prior notifications under Section 4 appointing DRI officers as officers of Customs, (ii) the scheme whereby the Board and Commissioners assign functions to officers, and (iii) the validation and clarificatory amendments effected by the Finance Act, 2022. Consequently, most writ petitions attacking jurisdiction on the ground of Canon India were dismissed with liberty to pursue statutory appellate remedies, and pending proceedings are to be decided in accordance with the amended law and Section 97's validation. [Paras 246, 260, 290, 299, 312]

Challenges to show cause notices and Orders in Original premised on incompetence of DRI officers were rejected; proceedings validated by Section 97, Finance Act, 2022 and petitioners given liberty to pursue statutory appeals.

Remand where adjudication relied on third party statements not tested by cross examination - Principles of natural justice and right to cross examine adverse witnesses - Whether Orders in Original based substantially on statements of third parties who were not produced for cross examination should be quashed and remitted for fresh adjudication. - HELD THAT: - The Court declined to enter into merit determinations on valuation or classification but observed that adjudication founded materially on statements of third parties that were not made available for the accused party's cross examination raised a procedural infirmity. Where the impugned orders relied on such third party statements and the affected petitioner had requested cross examination, the Court quashed the Orders in Original and remitted the matters for de novo adjudication. The adjudicating authority was directed that, if it wishes to rely on such statements, the persons giving them must be produced for cross examination; if they are unavailable, the authority must decide on the preponderance of probabilities after hearing the petitioner. [Paras 14, 284, 288, 303, 305]

Impugned Orders in Original that depended on untested third party statements were quashed and remitted for fresh adjudication with directions to permit cross examination or otherwise decide on preponderance of probability.

Scope of judicial review under Article 226 in matters of rate of duty and valuation - Whether the High Court should decide issues of rate of duty and valuation under Article 226 in the present petitions. - HELD THAT: - The Court reiterated that it will not decide technical issues of rate of duty or valuation in writ jurisdiction under Article 226. Such matters are to be determined by the competent adjudicating authority and, if necessary, before the statutory appellate fora and ultimately the Supreme Court in its appellate jurisdiction. The High Court confined itself to the jurisdictional and procedural questions (e.g., competence to issue notices, natural justice issues) and refrained from entering upon valuation or classification merits. [Paras 148, 149, 151]

The High Court will not adjudicate rate and valuation issues in writ proceedings and confined its decision to jurisdictional and procedural questions.

Final Conclusion: The writ petitions challenging show cause notices and Orders in Original on the sole ground that DRI officers were not "proper officers" fail in view of notifications under Section 4 and the validating amendments and provisions in the Finance Act, 2022; most petitions were dismissed with liberty to prefer statutory appeals and pending proceedings are to be disposed in accordance with Section 97 of the Finance Act, 2022. Selected adjudication orders that relied on untested third party statements were quashed and remitted for fresh adjudication with directions to permit cross examination or decide on preponderance of probability; the Court declined to decide rate/valuation merits in writ jurisdiction.

Dissolution of company - liquidation - deposit in the Public Account of India under Section 555 - destruction of physical records under rules made under Section 550 - Official Liquidator discharged - invitation of claims from contributories - distribution to creditors (dividend paid)

Dissolution of company - liquidation - Main Company Petition has outlived its utility and the company is ordered to be dissolved. - HELD THAT: - The Court, on the materials placed by the Official Liquidator and the report of the Official Liquidator, held that just and reasonable circumstances exist for acceding to the prayer for dissolution. The liquidation process initiated by the order dated 23.01.2004 has run its course, claims by creditors have been addressed and no contributory claims remain, supporting the conclusion that the main Company Petition has served its purpose and the company should be dissolved. [Paras 7, 11]

The company stands dissolved.

Deposit in the Public Account of India under Section 555 - Balance funds in the hands of the Official Liquidator may be deposited in the Public Account of India after permissible deductions and expenses. - HELD THAT: - The Court permitted the Official Liquidator to deposit the remaining balance in the Public Account of India in the Reserve Bank of India after making statutory deductions and meeting permissible expenses under the Act and Rules. The order implements the multi limbed prayer and provides for final disposition of surplus funds in accordance with the statutory scheme. [Paras 9]

Official Liquidator permitted to deposit balance in the Public Account of India subject to permissible statutory deductions and expenses.

Destruction of physical records under rules made under Section 550 - digitization of court records - Physical records in the office of the Official Liquidator and those in the Company Court may be destroyed in accordance with the rules framed under the Act and the Court's digitization process. - HELD THAT: - The Court noted that the Central Government has framed rules under the relevant provisions for destruction of physical records and directed that destruction of physical records in the Official Liquidator's office be carried out in accordance with such rules. Further, physical records pertaining to the main CP and related applications in the Company Court will be governed by the ongoing digitization process of the Court, which provides for destruction of physical records. [Paras 10]

Physical records to be destroyed in accordance with statutory rules and the Court's digitization process.

Invitation of claims from contributories - distribution to creditors (dividend paid) - Claims from contributories were invited and none received; dividend to entitled creditors has been disbursed. - HELD THAT: - The Official Liquidator published notices inviting claims from contributories as directed by the Court but no contributory claims were received. Earlier, pursuant to the Court's order, the dividend at 100 paise in a rupee plus interest was disbursed to entitled creditors and sufficient funds remained to permit inviting contributory claims and to proceed towards dissolution. [Paras 4, 8, 9]

No contributory claims received; dividend already disbursed to entitled creditors.

Official Liquidator discharged - Upon dissolution, the Official Liquidator is discharged. - HELD THAT: - Having ordered dissolution of the company and provided for disposition of remaining funds and records, the Court recorded that the Official Liquidator stands discharged consequent to the company's dissolution. [Paras 11]

Official Liquidator stands discharged.

Final Conclusion: The Company Petition and the captioned application are disposed of: the company is dissolved; creditors' dividend has been paid; no contributory claims were received; remaining funds may be deposited in the Public Account of India after permissible deductions; physical records may be destroyed in accordance with statutory rules and the Court's digitization; the Official Liquidator is discharged; no order as to costs.

Contempt of court - status quo order - wilful disobedience - ownership and possession transfer upon issuance of sale certificate - effect of status quo on third party purchaser not impleaded

Contempt of court - wilful disobedience - Whether the Liquidator violated the Tribunal's order dated 20.07.2021 and committed contempt. - HELD THAT: - The Tribunal found that the sale certificate for the plant and machinery was issued and physical possession was handed over to the auction purchaser on 03.06.2021, predating the status quo order of 20.07.2021. The Liquidator averred that he ceased further liquidation steps after receiving the status quo order and that he did not have possession or control over the disposed assets after issuance of the sale certificate. The Court reiterated that to constitute civil contempt there must be wilful and intentional disobedience of a court order. Applying these facts, the Tribunal concluded there was no disobedience of its order by the Liquidator, and in any event no wilful or intentional breach was shown. [Paras 21, 22, 23, 25]

Contempt application dismissed; no contempt committed by the Liquidator.

Status quo order - ownership and possession transfer upon issuance of sale certificate - effect of status quo on third party purchaser not impleaded - Whether the status quo order passed on 20.07.2021 was enforceable against the auction purchaser who had been handed possession and was not impleaded in the appeal. - HELD THAT: - The Tribunal observed that the status quo order was passed after the sale certificate had been issued and physical possession transferred to the auction purchaser. The Applicant had not impleaded the auction purchaser in the proceedings before the Tribunal. Given the prior transfer of possession and ownership to the purchaser, the Tribunal held that the status quo order could not be operated to restrain the purchaser who lawfully held possession and had become owner upon completion of the sale process. Consequently, the Liquidator could not be required to restrain the purchaser from exercising rights over property already transferred. [Paras 21, 22, 23]

Status quo order did not apply to the auction purchaser who had received sale certificate and possession and who was not a party to the proceedings.

Final Conclusion: The contempt petition was dismissed: the Tribunal found no wilful disobedience by the Liquidator and held that the status quo order could not be enforced against an auction purchaser who had been issued the sale certificate and delivered possession prior to the order and who was not impleaded; the Applicant was directed to pay costs to the Prime Minister's Relief Fund.

Corporate Insolvency Resolution Process - Reverse Corporate Insolvency Resolution Process - project-wise CIRP - control and management of IRP over assets and bank accounts - constitution of Committee of Creditors limited to a project - continuation of ongoing projects under IRP supervision - segregation of receivables as per RERA and utilization of 70% for construction

Corporate Insolvency Resolution Process - project-wise CIRP - continuation of ongoing projects under IRP supervision - Scope of CIRP on a real estate corporate debtor and whether all projects fall within CIRP or may be treated project-wise - HELD THAT: - The Tribunal held that admission of a Section 7 application commences CIRP against the corporate debtor and, accordingly, CIRP encompasses the corporate debtor's assets including all projects and bank accounts. Notwithstanding this, recognising the commercial realities of real-estate development and relying on precedent concerning project-specific relief, the Tribunal directed that a test of project-wise resolution be adopted: the CoC is to be constituted for the Eco Village II Project only, while the other projects shall continue as ongoing projects under the overall supervision and control of the IRP with assistance from the ex-management. The IRP is empowered to operate accounts (with counter-signature) and to carry on construction activities for all projects as a going concern, while project-specific procedures (separation of claims, information memorandum, CoC for Eco Village II) are to be followed for resolution of Eco Village II. [Paras 11, 21, 23]

CIRP commenced over the corporate debtor but the Tribunal directed project-wise processing: CoC to be constituted only for Eco Village II; other projects to continue as ongoing projects under IRP supervision.

Constitution of Committee of Creditors limited to a project - control and management of IRP over assets and bank accounts - Reverse Corporate Insolvency Resolution Process - Powers and duties of the IRP and the delimitations on resolution proceedings for Eco Village II - HELD THAT: - The Tribunal modified its earlier interim stay so that the IRP may constitute the CoC in respect of Eco Village II only. The IRP is directed to segregate claims pertaining to Eco Village II, prepare an information memorandum and proceed with CoC processes for that project. The IRP shall continue the project and complete construction with assistance from ex-management, employees and workmen; all corporate debtor accounts shall not be operated without the IRP's counter-signature and the IRP shall maintain separate, earmarked accounts and detailed inflow/outflow records for Eco Village II. The Tribunal also noted and adopted the concept of a tailored or 'reverse' mechanism for real-estate projects insofar as promoters may assist in completion under IRP supervision, but restricted any Resolution Plan from being put to vote without leave of the Tribunal. [Paras 22, 23, 25]

IRP authorized to constitute CoC for Eco Village II, manage accounts and continue/complete construction under supervision; no resolution plan for voting without court leave.

Segregation of receivables as per RERA and utilization of 70% for construction - continuation of ongoing projects under IRP supervision - Interim treatment of project receivables and the question of distribution of inflows pending further directions - HELD THAT: - The Tribunal directed that receivables relating to Eco Village II be kept in a separate earmarked account and that detailed accounts of inflows and outflows be maintained in accordance with RERA guidelines. It directed that 70% of amounts received for a project shall be utilized for construction purposes. The Tribunal deferred and reserved directions on disbursement of the remaining 30% pending further status report and hearing, thereby requiring the IRP to furnish additional information before any determination on distribution is made. [Paras 23, 24, 25]

Receivables to be segregated and 70% used for construction; disposal of the remaining 30% deferred for further status report and directions.

Final Conclusion: The admission of CIRP stands and the Tribunal, while recognising the IRP's control over the corporate debtor's assets and accounts, directed a project-wise approach: the CoC is to be constituted solely for Eco Village II (with the IRP to separate claims and proceed under the Code), other projects shall continue as ongoing projects under IRP supervision with assistance from the ex-management, receivables must be segregated as per RERA with 70% utilized for construction, and further directions on distribution of the balance amounts are reserved pending a status report.

Liquidation under the Insolvency and Bankruptcy Code - no resolution plan received before expiry of the corporate insolvency resolution process (CIRP) - committee of creditors' decision to liquidate approved by requisite voting share - appointment of liquidator and transfer of management to the liquidator - liquidator's initiation of liquidation process under Chapter III and the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016 - obligation of the outgoing resolution professional to hand over records to the liquidator - liquidation order as notice of discharge to officers, employees and workmen

Liquidation under the Insolvency and Bankruptcy Code - no resolution plan received before expiry of the corporate insolvency resolution process (CIRP) - committee of creditors' decision to liquidate approved by requisite voting share - Whether the Corporate Debtor is to be liquidated because no resolution plan was received before expiry of CIRP and the CoC resolved to liquidate. - HELD THAT: - The Tribunal recorded that Form G was published but no Expression of Interest was received within the prescribed period and that the Committee of Creditors, with the requisite voting share, recommended liquidation. The Tribunal construed the statutory mandate that where no resolution plan is received before expiry of the CIRP and the CoC has approved liquidation, the Adjudicating Authority is obliged to pass a liquidation order. In view of these findings and the statutory scheme, the Tribunal held that it was left with no option but to order liquidation of the Corporate Debtor. [Paras 12, 13, 14]

Application by the Resolution Professional allowed and the Corporate Debtor ordered to be liquidated.

Appointment of liquidator and transfer of management to the liquidator - liquidator's possession of valid Authorisation for Assignment (AFA) - Appointment of a liquidator and conditions attached to the appointment. - HELD THAT: - Having ordered liquidation, the Tribunal appointed a named Insolvency Professional as Liquidator subject to his possessing a valid Authorisation for Assignment issued by his Insolvency Professional Agency in terms of the applicable regulations, and directed the Liquidator to submit his consent within seven days. The appointment was made under the power conferred by the Code to ensure an authorised professional takes charge of the liquidation process. [Paras 14]

Mr. Ashok Kumar Agarwal appointed as Liquidator subject to valid AFA and submission of consent within seven days.

Obligation of the outgoing resolution professional to hand over records to the liquidator - liquidator's initiation of liquidation process under Chapter III and the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016 - public notice of liquidation - cessation of powers of directors and vesting of powers in the liquidator - liquidation order as notice of discharge to officers, employees and workmen - filing of liquidation order with the Registrar of Companies - Operational directions consequential to the liquidation order. - HELD THAT: - The Tribunal directed the outgoing Resolution Professional to hand over all papers and documents to the Liquidator within one week. It directed the Liquidator to commence the liquidation process in accordance with Chapter III of the Code and the IBBI Liquidation Process Regulations, to publish a public notice in the same newspapers previously used, and confirmed that all powers of the Board of Directors and key managerial personnel cease and vest in the Liquidator. The Tribunal further recorded that the liquidation order shall be deemed a notice of discharge to officers, employees and workmen in accordance with the Code, and directed filing of the order with the Registrar of Companies within whose jurisdiction the Corporate Debtor is registered. [Paras 14]

Specified directions issued to effectuate the liquidation, including handover of records, commencement of liquidation, publication of notice, vesting of management in the Liquidator, discharge notice to staff, and filing with the Registrar of Companies.

Disposition of pending interlocutory applications rendered infructuous by liquidation - Effect of the liquidation order on other pending IAs. - HELD THAT: - The Tribunal recorded that several pending applications concerning replacement of the Resolution Professional and extension or exclusion of CIRP time had become infructuous consequent to the passing of the liquidation order and accordingly disposed of those applications as infructuous. [Paras 17, 19, 21, 22]

Pending applications relating to replacement of RP and extension/exclusion of CIRP period disposed of as infructuous.

Final Conclusion: The Tribunal allowed the application filed by the Resolution Professional and ordered liquidation of the Corporate Debtor under the Code, appointed an authorised Liquidator subject to formal conditions, issued directions to effectuate the liquidation (including handover of records, initiation of the liquidation process, publication of notice, cessation of board powers, and filing with the Registrar of Companies), and disposed of related interlocutory applications as infructuous; a copy of the order is to be sent to the IBBI and the Registry to circulate the order to parties.

Initiation of Insolvency Resolution Process against Personal Guarantor - Admission under Section 100 of the Insolvency and Bankruptcy Code, 2016 - Moratorium under Section 101 of the Insolvency and Bankruptcy Code, 2016 - Liability of guarantor not extinguished by approval of corporate resolution plan - Co extensive liability of surety with principal debtor - Discharge of surety by release of principal debtor and subrogation rights

Initiation of Insolvency Resolution Process against Personal Guarantor - Admission under Section 100 of the Insolvency and Bankruptcy Code, 2016 - Application under Section 95(1) for initiation of Insolvency Resolution Process against the personal guarantor was admitted and IRP initiated. - HELD THAT: - The Tribunal considered the application filed by the financial creditor, the Resolution Professional's report dated 17.12.2021 recommending admission, and the submissions of the parties. The report recorded that the personal guarantor had committed default and did not qualify for a "fresh start" under Chapter II. The Tribunal found force in the petitioner's submissions and the authorities relied upon, and accepted the RP's recommendation for admission. Consequential directions were issued for publication of notice, claim submission, preparation of list of creditors, formulation and submission of a repayment plan, and conduct of creditor meeting and RP's duties under the Code. [Paras 17, 18, 24]

CP(IB) No. 06/BB/2021 filed under Section 95(1) was admitted under Section 100 of the IBC, 2016 and the Insolvency Resolution Process was initiated against the respondent/personal guarantor.

Liability of guarantor not extinguished by approval of corporate resolution plan - Co extensive liability of surety with principal debtor - Discharge of surety by release of principal debtor and subrogation rights - The respondent's contention that approval of the corporate debtor's resolution plan or liquidation/discharge of the corporate debtor extinguishes the guarantor's liability was rejected. - HELD THAT: - The Tribunal evaluated the respondent's submissions that the approved resolution plan had extinguished pre existing debts and thereby discharged guarantors or impaired their subrogation rights, citing Contract Act provisions. The Tribunal relied on precedents and statutory scheme under the IBC to hold that approval of a resolution plan does not absolve guarantors of their liability and that a guarantor's liability remains co extensive with that of the principal borrower unless specifically discharged by operation of law or by contractually agreed variation prejudicing the guarantor. The Tribunal accepted the petitioner's reliance on binding authorities to the effect that insolvency processes or liquidation of the principal debtor do not automatically discharge the surety or extinguish the creditor's right to proceed against guarantors. [Paras 11, 12, 13, 15, 17]

The plea that the guarantor was discharged by the approved resolution plan or related proceedings was negatived and did not preclude admission of the application against the personal guarantor.

Moratorium under Section 101 of the Insolvency and Bankruptcy Code, 2016 - Moratorium was declared on admission and directions were given regarding its scope and the Resolution Professional's duties during the moratorium. - HELD THAT: - On admission under Section 100, the Tribunal declared the moratorium in place of interim moratorium, effective from the date of admission for the period specified under Section 101. The order set out the stayed actions during the moratorium, clarified exceptions notified by the Central Government, and directed the RP to publish public notice, invite and collate claims, prepare list of creditors, assist in preparation of repayment plan, and conduct proceedings in accordance with the Code and applicable sections governing meetings and reports. [Paras 20, 21, 22, 23, 25]

Moratorium declared in terms of Section 101, IBC; RP directed to take steps for claim invitation, creditors' list, repayment plan and to perform statutory duties.

Final Conclusion: The Tribunal admitted the financial creditor's application under Section 100 of the IBC, 2016 and initiated Insolvency Resolution Process against the personal guarantor; the contention that approval of the corporate resolution plan extinguished the guarantor's liability was rejected; moratorium was declared and the Resolution Professional was directed to carry out statutory functions and invite and process claims as provided under the Code.

Corporate Insolvency Resolution Process - moratorium - Doctrine of Merger - appointment of Interim Resolution Professional - compliance with appellate directions

Corporate Insolvency Resolution Process - compliance with appellate directions - Application filed by the Financial Creditor is to be admitted and the Corporate Insolvency Resolution Process of the Corporate Debtor is to be commenced in compliance with the appellate orders. - HELD THAT: - The Tribunal examined the orders of the NCLAT allowing the Financial Creditor's appeal and directing the Adjudicating Authority to admit the Section 7 application and pass consequential orders, and noted that the Supreme Court declined to interfere with the NCLAT order. In view of those appellate decisions which have attained finality, the Tribunal held that it was bound to comply with the directions and admitted the application, passing consequential orders in terms of the appellate pronouncements. The admission was recorded and the matter disposed of accordingly. [Paras 11, 16]

Application admitted and the Corporate Insolvency Resolution Process is commenced in terms of the appellate orders.

Doctrine of Merger - compliance with appellate directions - The one month period granted by the NCLAT to endeavour settlement merges into the Supreme Court order and is to be reckoned from the date the NCLT received the Supreme Court order. - HELD THAT: - Relying on the Doctrine of Merger as expounded in earlier decisions, the Tribunal held that the NCLAT order merged into the Supreme Court order when the latter declined to interfere. Consequently, the one month period stated in the NCLAT order for parties to attempt settlement is to be computed from the date the NCLT received the Supreme Court order (the date of receipt of the Supreme Court order as produced before the Tribunal). The Tribunal therefore treated the one month window as commencing from that date and permitted parties to file appropriate proceedings if settlement was reached. [Paras 15]

Doctrine of Merger applied; the one month settlement period is to be counted from receipt by NCLT of the Supreme Court order.

Appointment of Interim Resolution Professional - moratorium - Interim Resolution Professional appointed, moratorium triggered, and directions issued regarding interim funding, communications and statutory compliances. - HELD THAT: - On admission of the application, the Tribunal appointed the proposed Interim Resolution Professional whose consent is on record and directed invocation of the moratorium under the Code. The Tribunal directed the Financial Creditor to deposit an initial sum with the IRP to meet the expenses of the IRP, subject to later adjustment by the Committee of Creditors, and required the Applicant to provide the IRP with the complete paper book. The order of moratorium and the consequential obligations under the Code and regulations were specified, and directions were given for communication of the order to the Applicant, Corporate Debtor, IRP, IBBI and RoC. [Paras 11, 12, 13, 14]

IRP appointed; moratorium under the Code triggered; Financial Creditor to deposit initial funds with IRP and comply with directions for communication and statutory reporting.

Final Conclusion: The Tribunal, following the NCLAT order which was left undisturbed by the Supreme Court, admitted the Financial Creditor's application, commenced the CIRP, applied the Doctrine of Merger to fix the one month settlement period from receipt of the Supreme Court order, appointed the IRP, triggered the moratorium and issued ancillary directions including interim funding and communications.

Extinguishment of claims under approved resolution plan - statutory dues versus defects in title - Section 31 approval binding on creditors and local authorities - public authority control over public property and requirement of prior consent - doctrine that a vendor cannot pass a better title than he has (nemo dat) - Section 32A liability for prior offences ceasing on approval of resolution plan

Statutory dues versus defects in title - Section 31 approval binding on creditors and local authorities - public authority control over public property and requirement of prior consent - doctrine that a vendor cannot pass a better title than he has (nemo dat) - Whether the demand for enhanced land compensation issued by PSIEC after approval of the resolution plan is barred by the approved resolution plan under Section 31 or is enforceable as a remedy to cure a defect in title. - HELD THAT: - The Tribunal held that the liability to pay enhanced land compensation arose from the terms of the original allotment letter and crystallised prior to the commencement of CIRP. The additional payment sought by PSIEC was characterised as a payment to remove a defect in the title to the land and not as a "statutory due" within the scope of Section 31 of the Code. Reliance on the principle in Municipal Corporation of Greater Mumbai v. Abhilash Lal was applied to the facts: where a public authority retains statutory control over its property and its consent is required for dealing with that property, an approved resolution plan cannot override the authority's power to protect its proprietary rights. The Tribunal also observed that a transferee cannot obtain a better title than that possessed by the transferor; the existence of a subsisting liability affecting title meant the resolution plan could not confer a clear title free of that defect. On these bases the demand notice was held sustainable and the application to set it aside was rejected. [Paras 8, 9]

Application to set aside the demand notice dismissed; enhanced land compensation is not extinguished by approval of the resolution plan and is enforceable to remedy the defect in title.

Section 32A liability for prior offences ceasing on approval of resolution plan - extinguishment of claims under approved resolution plan - Whether Section 32A operates to extinguish prosecution and bar action against property (including release of goods detained) in respect of offences committed prior to CIRP once a resolution plan effecting change of management is approved. - HELD THAT: - The Tribunal found that the alleged offences and the related liabilities (including interest confirmed by appellate orders) arose prior to initiation of CIRP. Section 32A was held applicable because the resolution plan approved by the Adjudicating Authority resulted in change of management and therefore, by its terms, liability for prior offences ceases and no action shall be taken against property covered under the approved plan. The Commissionerate had not lodged a claim during the CIRP in accordance with the applicable regulations. Goods detained to secure recovery of pre-CIRP dues were held to be subject to Section 32A protection once the plan was approved, and the provision therefore required release of the attached and detained goods and extinguishment of the respondent's claim on the issues covered by Section 32A. [Paras 6, 7]

Application granted; attachment and detention orders set aside, detained goods to be released and the respondent's claim on those issues extinguished under Section 32A.

Final Conclusion: IA No.598/2021 dismissed: enhanced land compensation demanded by PSIEC is a remedy to cure a pre CIRP defect in title and is not extinguished by the approved resolution plan. IA No.599/2021 allowed: Section 32A applies to pre CIRP offences where the approved plan effects change of management; the attachment and detention orders are set aside, detained goods are to be released and the respondent's claims in respect thereof are extinguished.

Private sale under Regulation 33 of the IBBI (Liquidation Process) Regulations, 2016 - sale as a going concern - eligibility and rights of erstwhile promoters under the Code - application of amended Regulation 31A (Stakeholders Consultation Committee) and retrospectivity - prospective application of substantive procedural amendments

Private sale under Regulation 33 of the IBBI (Liquidation Process) Regulations, 2016 - sale as a going concern - eligibility and rights of erstwhile promoters under the Code - Validity of the private sale(s) effected by the liquidator and the entitlement of ex-promoters to participate or claim preference in the bidding process. - HELD THAT: - The Tribunal found that the liquidator had made repeated attempts to sell the corporate debtor as a going concern through public auctions and that the ex-promoters had not participated in earlier auctions nor complied with the Tribunal's direction dated 25.01.2021 to submit a bid for the auction dated 27.01.2021. The ex-promoters' later offer was materially below the reserve price of the last failed auction. The Tribunal held that ex-promoters possess no vested right to preference in the bidding process and that the liquidator prima facie followed the procedure prescribed by Regulation 33 and Schedule I for private sale. No infringement of the Code or the Regulations was made out by the applicants; consequently their challenge to the private sale and request for direction to sell as a going concern failed. The Tribunal therefore dismissed the applications seeking setting aside of the private sale or directions in favour of the ex-promoters and dismissed the related challenge for a special approach for MSMEs where the applicants were hit by Section 29A. [Paras 17]

IA No.227/2021 dismissed (private sale held to be in compliance with Regulation 33); IA No.228/2021 dismissed (no vested right for ex-promoters; no breach of Code); IA No.536/2021 dismissed (no shortcoming by liquidator in attempts to sell as going concern).

Application of amended Regulation 31A (Stakeholders Consultation Committee) and retrospectivity - prospective application of substantive procedural amendments - Whether Regulation 31A (Stakeholders Consultation Committee) introduced by notification dated 25.07.2019 applies to liquidation processes which commenced prior to that date (liquidation commencement date 08.08.2018). - HELD THAT: - The Tribunal observed that the notification introducing Regulation 31A does not expressly provide retrospective operation. It applied the presumption that laws are prospective unless retrospective operation is unequivocally expressed. Finding that Regulation 31A creates substantive procedural duties, rights and obligations which did not exist earlier, the Tribunal held it to be a substantive change requiring prospective application tied to the liquidation commencement date. Although a new liquidator was appointed after the amendment, applicability depends on the liquidation commencement date and not on the appointment date of the liquidator. The Tribunal also noted that retrospective application would introduce delay in a time-bound liquidation process and be contrary to the Code's objectives of maximizing realizations. Consequently, Regulation 31A was held not to have retrospective effect. [Paras 8, 9, 10]

IA No.285/2021 dismissed; IA Nos.286/2022, 287/2022 & 288/2022 dismissed (Regulation 31A held not retrospective; Stakeholder Consultation Committee need not be constituted for liquidation that commenced on 08.08.2018).

Final Conclusion: All applications before the Tribunal were dismissed: challenges to the private sale(s) were rejected as the liquidator acted in accordance with Regulation 33 and Schedule I and ex-promoters have no special right to preference; and Regulation 31A (Stakeholders Consultation Committee) was held not to apply retrospectively to liquidation processes commencing before 25.07.2019, leading to dismissal of the related applications.

Eligibility under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - tax dues as defined in Section 123 - exception under Section 125(1)(e) for enquiry, investigation or audit where amount not quantified on or before 30.06.2019 - ineligibility resulting from pending investigation and subsequent show cause notice

Eligibility under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - exception under Section 125(1)(e) for enquiry, investigation or audit where amount not quantified on or before 30.06.2019 - tax dues as defined in Section 123 - Whether the petitioner was eligible to have its Form SVLDRS-1 declaration accepted under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, despite being subject to an investigation whose duty amount was not quantified on or before 30.06.2019. - HELD THAT: - The Court examined the Scheme provisions, in particular the definition of "tax dues" in Section 123 and the exclusions to eligibility in Section 125. Section 123 prescribes what constitutes tax dues for various categories, while Section 125(1)(e) excludes from the Scheme persons "who have been subjected to an enquiry or investigation or audit and the amount of duty involved... has not been quantified on or before the 30th day of June, 2019." The petitioner filed declarations on 22.10.2019 and 21.12.2019 but the record shows an ongoing investigation which culminated in a show cause notice dated 29.09.2020 quantifying alleged evasion. Because the enquiry/investigation in the petitioner's case existed and the amount of duty had not been quantified by 30.06.2019, the petitioner fell squarely within the exclusion in Section 125(1)(e) and was therefore not eligible to have its SVLDRS-1 declaration accepted. The Designated Committee's rejection on that ground was consistent with the Scheme and required no interference. [Paras 22, 23, 24, 25, 26]

The impugned communication rejecting the petitioner's SVLDRS-1 declaration was upheld and the writ petition dismissed.

Final Conclusion: The High Court held that the petitioner was ineligible for settlement under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 because its matter was subject to an enquiry/investigation and the amount of duty involved had not been quantified on or before 30.06.2019; the rejection of the declaration was therefore sustained and the writ petition dismissed.

Requirement of show cause notice under Section 73 of the Finance Act, 1994 - recovery of admitted tax under Section 73(1B) read with Section 87 - time-limit for filing revised return under Rule 7B of the Service Tax Rules, 1994 and effect of Rule 7C - stay of recovery proceedings - interim relief pending adjudication

Stay of recovery proceedings - interim relief pending adjudication - Grant of interim stay on operation of the impugned recovery notices. - HELD THAT: - The Court after hearing briefly and noting the parties' filings granted an interim stay on the operation of the impugned recovery notices issued to the petitioner. The order preserves the petitioner's position pending further hearing and the filing of written submissions by the parties, and restrains the respondents from giving effect to the recovery steps challenged in the writ petition. [Paras 9]

Operation of the impugned notices stood stayed until further orders of the Court.

Issue of notice - listing for hearing - Issuance of notice to complete the record and listing of the matter for further hearing. - HELD THAT: - Although no formal notice had earlier been issued, the respondents had filed a counter-affidavit and rejoinder. For completion of the record the Court directed that notice be issued to the respondents, directed the parties to file written submissions not exceeding three pages each at least three days before the next date, and listed the matter for further hearing. These procedural directions were given to enable adjudication on the merits at the next hearing. [Paras 2, 7, 8]

Notice to respondents issued for completion of record; parties to file written submissions; matter listed for further hearing.

Final Conclusion: The High Court issued notice for completion of the record, directed parties to file short written submissions, listed the matter for further hearing and granted an interim stay on the operation of the impugned recovery notices relating to FY 2014-2015 and FY 2016-2017 pending further orders.

Online Information and Data Base Access or Retrieval Service (OLIDAR) - revenue neutrality - extended period of limitation - Section 73(2A) of the Finance Act - Cenvat credit availability - reverse charge / recipient liability

Online Information and Data Base Access or Retrieval Service (OLIDAR) - reverse charge / recipient liability - Liability to pay service tax for services received from CRS/GDS companies - HELD THAT: - The Tribunal held that the services received by the appellant from CRS/GDS companies fall within the tax entry for 'Online Information and Data Base Access or Retrieval Service' (OLIDAR) and, accordingly, the appellant as recipient is liable to pay service tax under the reverse charge mechanism. This finding affirms that the nature of the service received attracted OLIDAR classification and resultant recipient-side tax liability as recorded by the Tribunal in its earlier order. [Paras 3]

Appellant is liable to pay service tax on receipt of OLIDAR services from CRS/GDS companies.

Revenue neutrality - Cenvat credit availability - extended period of limitation - Effect of revenue neutrality and applicability of extended period of limitation; consequence under Section 73(2A) - HELD THAT: - The Tribunal recorded that the service tax, if paid on the input OLIDAR service under recipient liability, was available as Cenvat credit and, since the appellant discharged output service tax, the position was revenue neutral; on that basis the appeal was allowed on the grounds of revenue neutrality and non-applicability of the extended period of limitation. However, having regard to the statutory mandate in Section 73(2A) of the Finance Act (inserted by Finance Act, 2013), the Tribunal in the review/rectification proceeding confirmed the demand for the normal period of limitation (i.e., 18 months from the show cause notice dated 23.10.2013 or for the period Feb., 2012 to till 23.10.2013) despite its finding of revenue neutrality. Thus, while the factual/legal finding of revenue neutrality and availability of Cenvat credit was maintained, the consequence of confirming demand for the normal period was given effect to in view of Section 73(2A). [Paras 4, 8, 9]

Tribunal upheld revenue-neutral finding and non-applicability of extended period, but, on account of Section 73(2A), confirmed the demand for the normal period (Feb., 2012 to till 23.10.2013 or 18 months from SCN dated 23.10.2013).

Penalty and interest - revenue neutrality - Liability to pay penalty and interest - HELD THAT: - The Tribunal had earlier held that penalty and interest were not payable, reasoning that the situation was revenue neutral because the input tax (if any) was available as Cenvat credit and the appellant had discharged output service tax. The ROM proceeding did not disturb that conclusion and the Tribunal recorded that penalty and interest are not payable. [Paras 4]

Penalty and interest stood held not payable in respect of the assessed period.

Final Conclusion: ROM application by Revenue allowed in part: Tribunal's findings that (i) the services from CRS/GDS attract OLIDAR and the appellant is liable as recipient; (ii) the situation is revenue neutral and penalty/interest are not payable, are maintained, but in view of Section 73(2A) the demand is confirmed for the normal period (Feb., 2012 to till 23.10.2013 or 18 months from the show cause notice dated 23.10.2013).

Entitlement to refund of additional CENVAT credit on filing of a revised return - transitional provision under Section 142(9)(b) of the CGST Act - revised return filed within time under existing law - no further inquiry required upon statutory finding of refundable amount - remand power of Commissioner (Appeals) - grant of interest under Section 11BB of the Central Excise Act

Transitional provision under Section 142(9)(b) of the CGST Act - entitlement to refund of additional CENVAT credit on filing of a revised return - revised return filed within time under existing law - no further inquiry required upon statutory finding of refundable amount - Whether the assessee was entitled to refund of the balance CENVAT credit pursuant to a revised return filed within the time permitted under the existing law under Section 142(9)(b) of the CGST Act. - HELD THAT: - The Tribunal examined Section 142(9)(b) and the factual finding of the Commissioner (Appeals) that the revised ST-3 and TRAN-1 showed additional credit carried forward leaving a balance refundable. The provision mandates that where a return furnished under the existing law is revised after the appointed day but within the time limit specified under the existing law, and pursuant to such revision any amount is found refundable, that amount shall be refunded under the existing law notwithstanding contrary provisions, subject only to the exception relating to sub-section (2) of section 11B of the Central Excise Act (unjust enrichment). The Tribunal found that no further statutory compliance or inquiry was required once the revised return established the availability of additional credit and a refundable amount. Having recorded the Commissioner (Appeals)'s categorical conclusion on eligibility, the Tribunal held that the legal effect of Section 142(9)(b) is to give an immediate entitlement to refund where the conditions of the provision are met. [Paras 3, 6, 7]

The assessee is entitled to refund of the balance CENVAT credit pursuant to the timely revised return under Section 142(9)(b); no further inquiry was necessary.

Remand power of Commissioner (Appeals) - no further inquiry required upon statutory finding of refundable amount - grant of interest under Section 11BB of the Central Excise Act - Whether the Commissioner (Appeals) was justified in remanding the matter to the Adjudicating Authority instead of deciding the refund claim on merits, and what relief should follow. - HELD THAT: - Revenue contended that the Commissioner (Appeals) lacked power to remand and should have decided the claim. The Tribunal reviewed the Commissioner (Appeals)'s order which had recorded that the assessee was eligible for refund but then remanded the matter 'subject to merits and compliance' under Section 142(9)(b). Given the statutory language of Section 142(9)(b) and the Commissioner (Appeals)'s own categorical finding of eligibility, the Tribunal concluded that there remained no substantive issue requiring fresh adjudication. Remand in these circumstances was unnecessary and ineffective. Accordingly, the Tribunal modified the appellate order: instead of remand, it allowed the appeal on merits and directed the Adjudicating Authority to grant the refund forthwith, with interest as provided under Section 11BB of the Central Excise Act. [Paras 4, 5, 6, 8]

The remand was improper; the appeal is allowed on merits and the Adjudicating Authority is directed to grant the refund with interest under Section 11BB within sixty days.

Final Conclusion: Appeal allowed: the Tribunal held that where a timely revised return shows an additional refundable CENVAT credit under Section 142(9)(b), no further inquiry is required and the refund must be granted; the Commissioner (Appeals)'s remand was set aside and the adjudicating authority directed to sanction the refund with interest under Section 11BB within sixty days.

Rectification of mistake - appellate review - impermissibility of re-opening a final order - negative list exemption - digging of borewell for agricultural operations - evidentiary sufficiency - affidavits, land records, panchayat certificates and bank certificates - executive clarification as interpretative aid

Rectification of mistake - appellate review - impermissibility of re-opening a final order - Maintainability and merit of the Revenue's application for rectification of mistake in the Tribunal's final order - HELD THAT: - The application filed by the Revenue sought rectification of an alleged mistake in the Tribunal's Final Order dated 07.03.2022. The Tribunal-recorded final order had examined the question whether digging of borewell for a farmer/agriculturist for irrigation fell within the negative list exemption and had allowed the assessee's appeal after considering evidentiary material and a Government clarification. The present application amounted to an attempt to reopen and seek a different view on the merits of that final order rather than to correct a clerical or apparent error. Having heard parties and perused the record, the Tribunal found no ground to treat the application as a permissible rectification; it was held to be without merit and impermissible as an attempt to revisit the adjudicated view. [Paras 6]

Rectification application dismissed as an impermissible attempt to re-open the Tribunal's final order; no mistake requiring rectification established.

Final Conclusion: The Revenue's application for rectification of mistake in the Tribunal's final order is dismissed as without merit and as an attempt to obtain a different appellate view rather than to correct any clerical or demonstrable mistake.

Excisability of waste and scrap arising in manufacture - permission for removal of inputs/partially processed goods under Rule 57F(2) - process loss arising during reprocessing - extended period of limitation under Section 11A requires willful mis-statement or suppression

Permission for removal of inputs/partially processed goods under Rule 57F(2) - Validity of removals of scrap/waste and inputs to job-workers under permission granted under Rule 57F(2) and whether such removals were unauthorized - HELD THAT: - The Tribunal found and this Court agreed that the assessee had applied for and obtained permission under Rule 57F(2) to remove inputs/partially processed goods for reprocessing/job work and that conditions were imposed by the Assistant Collector. The records and purchase orders showed that names and quantities of recoverable items and process loss percentages were specified and that the assessee received recoverable items back from processors. On these facts the Tribunal correctly concluded that removals effected under the granted permission could not be treated as unauthorized removals giving rise to duty. The adjudicating authority's contrary view, treating the removals as unauthorized despite the permissions and incumbent conditions, was not sustainable. [Paras 8, 12]

Removals under Rule 57F(2) were valid as permission had been granted and the removals were not unauthorized.

Excisability of waste and scrap arising in manufacture - process loss arising during reprocessing - Whether waste, scrap and the short-receipt attributed to process loss arising during reprocessing are excisable and liable to duty - HELD THAT: - The Court applied the reasoning in Finolex Cables Ltd., following the principle that waste and scrap arising as a necessary incident of manufacturing are not goods of manufacture and are not dutiable unless specifically covered by the tariff. The Tribunal held, and this Court agreed, that scrap which does not possess the essential character of the finished telecommunication cable (i.e., the capability to conduct electricity) qualifies as scrap and is not excisable. Invisible or melting losses characterized as bona fide process loss, ascertainable by engineering standards, do not attract excise duty. The adjudicating authority's contrary conclusion that duty was leviable on the short-received quantities failed in view of these principles. [Paras 11, 12]

Waste, scrap and bona fide process loss in the facts of this case are not excisable and not liable to duty.

Extended period of limitation under Section 11A requires willful mis-statement or suppression - Whether the department was entitled to invoke the extended period of limitation under Section 11A of the Central Excise Act in the absence of a finding of willful mis-statement or suppression - HELD THAT: - The Court held that invocation of the extended period under Section 11A can be justified only where there is a clear finding of willful mis-statement or suppression with intent to evade duty. The show-cause notice in this case proceeded on the basis of alleged irregularities in maintenance of registers and information gathered from the assessee's own registers and challans; there was no allegation of suppression or discovery of new facts. Consequently the adjudicating authority erred in applying Section 11A to extend limitation. [Paras 10]

Extended limitation under Section 11A could not be invoked as there was no finding of willful mis-statement or suppression.

Final Conclusion: The Tribunal's order setting aside the adjudicating authority's demand was upheld: removals under Rule 57F(2) were valid, waste/scrap and bona fide process loss were not excisable in the facts of the case, and the extended limitation under Section 11A was wrongly invoked; the appeal is dismissed.

Interest on delayed refunds under Section 11BB of the Central Excise Act - Deeming extension of statutory time limits by Section 6 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 - Overriding effect of temporary extension of time on entitlement to interest - Strict interpretation of tax statutes - Remedy of appeal against implied denial of refund claim

Interest on delayed refunds under Section 11BB of the Central Excise Act - Deeming extension of statutory time limits by Section 6 of the 2020 Act - Overriding effect of temporary extension of time on entitlement to interest - Claim for interest under Section 11BB on a refund granted after three months but within the period extended by Section 6 of the 2020 Act was not maintainable. - HELD THAT: - Section 6 of the 2020 Act deems the time limits prescribed under the Central Excise Act which fell between 20 March 2020 and 29 September 2020 to be extended to 30 September 2020. The three month period for payment of refunds under Section 11BB is a time limit so extended by Section 6. The refund in the present case was sanctioned on 30 September 2020, i.e., within the period extended by the 2020 Act. Consequently, by virtue of the deeming/overriding operation of Section 6, the grant of refund falls within the extended time and the condition for payment of interest under Section 11BB (refund not made within three months) is not attracted. The Court applied the principle that tax statutes are to be interpreted strictly and declined to read in an entitlement to interest where the statutory time limit has been validly extended. [Paras 5, 7]

Claim for interest under Section 11BB is rejected because the refund was made within the period extended by Section 6 of the 2020 Act.

Remedy of appeal against implied denial of refund claim - The alternate claim set out in Annexure P/3, which was impliedly denied by the respondents, was not adjudicated and the petitioner was granted liberty to pursue an appeal. - HELD THAT: - The Court observed that the petitioner's separate claim contained in Annexure P/3 (reflected in Annexure P/4) was impliedly denied and respondents advised the petitioner to avail the remedy of appeal. Rather than deciding that claim on merits, the Court declined to adjudicate it and expressly extended liberty to the petitioner to pursue the statutory appellate remedy as per law. [Paras 8]

Petitioner granted liberty to avail remedy of appeal in respect of the claim recorded in Annexure P/3; that claim was not decided on merits by this Court.

Final Conclusion: Petition dismissed; claim for interest under Section 11BB rejected as refund was made within the period extended by Section 6 of the 2020 Act, while the petitioner is permitted to pursue appeal in respect of the separate claim reflected in Annexure P/3.

Interpretation of warehousing periods for goods intended for use in a 100% EOU under Section 61 - Liability to pay interest on warehoused goods only after expiry of the prescribed interest-free warehousing period - Intention to use in 100% EOU as determinative for classification under Section 61(1)(aa) - Application of Section 61(2)(i) to goods intended for use in 100% EOU - Administrative guidance in Circular No. 15/2009 on interest-free warehousing period

Interpretation of warehousing periods for goods intended for use in a 100% EOU under Section 61 - Liability to pay interest on warehoused goods only after expiry of the prescribed interest-free warehousing period - Intention to use in 100% EOU as determinative for classification under Section 61(1)(aa) - Whether the goods imported and warehoused by the appellant, being intended for use in a 100% EOU, fall under the three-year warehousing category and attract interest only after expiry of that three-year period, so that the additional demand of interest is unsustainable. - HELD THAT: - The appellant is a 100% EOU and imported goods under an exemption notification for use in manufacture by the EOU; the intention that the goods were intended for use in the unit is not disputed. Section 61(1)(aa) distinguishes goods intended for use in a 100% EOU and permits warehousing for three years; Section 61(2)(i) prescribes that interest is payable only where such specified goods remain beyond the permitted warehousing period, and then interest runs from expiry of that period until payment. Section 61 does not require actual use in manufacture to attract the three-year category; the importer's declared intention suffices. The appellant cleared the warehoused goods after the three-year period and paid duty together with interest applicable for the period beyond three years; therefore, a further demand for interest under the shorter ninety-day rule applicable to other goods is not sustainable. The Tribunal's reasoning is supported by the authority of Sun Pharmaceuticals Industries Limited and the administrative position reflected in Circular No. 15/2009 that interest is not chargeable within the statutorily prescribed warehousing period.

The demand of interest in excess of the interest discharged by the appellant is set aside; the appeal is allowed.

Final Conclusion: Where warehoused goods are imported for use in a 100% EOU and the intention to so use is not disputed, they fall under the three-year warehousing category and interest is leviable only after expiry of that period; the additional interest demand was therefore quashed and the appeal allowed.

Extended period of limitation - proviso to section 11A of the Central Excise Act, 1944 - suppression of facts - wilful mis-declaration - bona fide belief - exemption under Notification No. 06/2002-CE / Notification No. 06/2006-CE - departmental verification / Range Superintendent report

Extended period of limitation - proviso to section 11A of the Central Excise Act, 1944 - suppression of facts - bona fide belief - exemption under Notification No. 06/2002-CE / Notification No. 06/2006-CE - departmental verification / Range Superintendent report - Whether invocation of the extended period under the proviso to section 11A was justified where there was no wilful mis-declaration or suppression of facts and a departmental verification report recorded the appellant's claim to exemption. - HELD THAT: - The Tribunal confined the controversy to limitation as the substantive merit had been previously addressed. The Range Superintendent's verification report dated 30.08.2007 recorded that the goods manufactured were claimed to be eligible for exemption under Notification No. 06/2006-CE and that the product was inspected physically. That report, together with ER-1 returns filed claiming the exemption, placed the nature of the claim within the department's knowledge. In these circumstances the Court held there was no suppression of facts or wilful mis-declaration warranting invocation of the extended period; an assessee's bona fide belief (even if ultimately incorrect) and disclosure in returns and to verifying officers preclude treatment as deliberate suppression. The Tribunal also relied on earlier decisions holding that in absence of evidence of intentional concealment the extended period cannot be invoked. Applying those principles to the SCN dated 06.04.2009, which raised demand for the period 15.04.2004 to February 2008, the Tribunal found the demand to be within the normal limitation bar and therefore not sustainable. [Paras 4, 5]

Invocation of the extended period under the proviso to section 11A was not justified; the demand for the period 15.04.2004 to February 2008 is time-barred and the impugned order is set aside.

Final Conclusion: The appeal is allowed; the demand confirmed by the adjudicating authority for the period 15.04.2004 to February 2008 is held to be time-barred in the absence of any finding of wilful mis-declaration or suppression of facts, and the impugned order is set aside with consequential reliefs as per law.

Tax Collected at Source (TCS) - Assessable value for Central Excise - Additional consideration flowing from the buyer - Central Excise Valuation Rules - Rule 6 - Income-tax Act, Section 206C - Exclusion of tax from assessable value

Tax Collected at Source (TCS) - Additional consideration flowing from the buyer - Central Excise Valuation Rules - Rule 6 - Exclusion of tax from assessable value - Income-tax Act, Section 206C - Whether the amount collected as TCS on sale of scrap is includable in the assessable value for charging Central Excise duty. - HELD THAT: - The Tribunal held that the sum collected as TCS under Section 206C of the Income-tax Act is a statutory tax collected from the buyer and deposited with the Income Tax Department and is not part of the price of the goods. Rule 6 of the Central Excise Valuation Rules applies to amounts of additional consideration that flow directly or indirectly from the buyer to the assessee and are retained by the assessee. Since TCS is collected as a tax and is not retained by the appellant but passed on to the Income Tax Department, it does not constitute additional consideration flowing to the assessee. Consequently, such tax is not includable in the assessable value for excise duty; the tax nature of TCS places it outside the scope of amounts to be aggregated under Rule 6 and within the exclusion contemplated by the principle that taxes are not includable in assessable value. [Paras 4]

Amount collected as TCS is not includable in the assessable value for excise duty; impugned order is set aside and appeal allowed.

Final Conclusion: The Tribunal allowed the appeal, holding that TCS collected under Section 206C is a tax deposited with the income tax authorities and not additional consideration flowing to the assessee; therefore it cannot be included in the assessable value for charging Central Excise duty.

Interest on delayed refund - Section 35FF of the Central Excise Act - deposit under protest - date of deposit or encashment as commencement of interest - rate of interest at 12% per annum - precedent of Sandvik Asia Ltd. - pre deposit treated as admission for hearing

Interest on delayed refund - Section 35FF of the Central Excise Act - date of deposit or encashment as commencement of interest - deposit under protest - Appellant's entitlement to interest on amounts paid under protest during investigation and the period from which such interest is payable. - HELD THAT: - The Tribunal found that amounts deposited during investigation at the insistence of officers, though paid under protest, attract interest under the admitted statutory scheme. Interest is payable from the date of deposit or, alternatively, from the date of encashment of the cheque, and continues until the date of actual refund. The tribunal noted that the deposit had been treated as the pre deposit for admission purposes in earlier proceedings and thus constituted the operative date for commencement of interest. The Adjudicating Authority's truncated period for calculation was rejected and the appellant held entitled to interest for the full period from deposit/encashment to refund. [Paras 9]

Appellant entitled to interest on the refunded amount from the date of deposit or encashment of the cheque until the date of refund.

Rate of interest at 12% per annum - precedent of Sandvik Asia Ltd. - Rate at which interest on the delayed refund is to be calculated. - HELD THAT: - Relying on the Tribunal's decision in Parle Agro (as followed) and the Apex Court's ruling in Sandvik Asia Ltd., the Tribunal held that interest on delayed refunds in the circumstances of this case is payable at 12% per annum. The Commissioner (Appeals)'s grant of interest at a lower notified rate was set aside for the purpose of this appeal, and the matter was remitted to the Adjudicating Authority only for computation and payment in accordance with this rate. [Paras 9]

Interest on the refund to be calculated and paid at 12% per annum; adjudicating authority directed to grant the balance interest accordingly.

Final Conclusion: Appeal allowed; appellant granted interest from date of deposit/encashment until refund at 12% p.a.; adjudicating authority directed to compute and pay the balance interest within 45 days of receipt of the order.

Place of removal - CENVAT credit of input services - sale on FOR basis - transfer of property in goods - intention of the parties under the Sale of Goods Act, 1930

CENVAT credit of input services - sale on FOR basis - place of removal - Whether the appellant is entitled to CENVAT credit of goods transport agency services where the goods are supplied on FOR basis - HELD THAT: - The Tribunal noted Board's Circular directing that the availability of credit of input services is governed by the definition of place of removal in the CENVAT Credit Rules and that the place where sale takes place is the place of removal. The Tribunal reiterated that the determination of the place of removal must be made by ascertaining when and where the transfer of property in goods takes place, having regard to the intention of the parties under the Sale of Goods Act, 1930, and not by reference to who pays freight, insurance, or whether transport charges form part of the price. As the contention that sales were on FOR basis was raised for the first time before the Tribunal, the Tribunal held that the matter required fresh examination by the original adjudicating authority in light of the Board's Circular and the legal tests governing the place of removal. The Tribunal therefore set aside the impugned order and remanded the matter for the authority to determine whether the sales were on FOR basis and, if so, to allow the credit.

Impugned order set aside and matter remanded to the original adjudicating authority to examine whether sales were on FOR basis and to grant CENVAT credit of the GTA services if so found.

Final Conclusion: Appeal allowed by way of remand: original authority to determine if sales were on FOR basis; if the place of removal is at buyer's premises (sale on FOR basis), CENVAT credit of the GTA services shall be allowed.

Cenvat credit on outward transportation - FOR sale inclusive of freight - payment of duty on FOR price inclusive of freight - application of subsequent tribunal decisions and Board Circular

Cenvat credit on outward transportation - FOR sale inclusive of freight - payment of duty on FOR price inclusive of freight - application of subsequent tribunal decisions and Board Circular - Whether the claim of cenvat credit in respect of outward transportation should be adjudicated afresh in light of subsequent decisions of the Tribunal and a Board Circular where the assessee's sales were on FOR basis and excise duty was charged on the FOR price. - HELD THAT: - The lower authorities denied cenvat credit solely relying on the earlier Hon'ble Supreme Court decision in Ultratech Cement. Subsequent developments - Tribunal decisions in Ultratech Cement and Sanghi Industries and a Board Circular issued thereafter, which have been upheld by the Jurisdictional High Court of Gujarat - recognise entitlement to cenvat credit where goods are sold on FOR basis and the price charged (being inclusive of freight, insurance etc.) on which excise duty was paid. The lower authorities did not consider these subsequent developments nor have they properly verified the factual matrix whether the appellant's invoices/purchase orders and Chartered Accountant certificate establish that the sale was on FOR basis and excise duty was paid on the FOR-inclusive price. Because the factual findings on FOR pricing and duty payment are material to the applicability of the subsequent decisions and Board Circular, the matter requires fresh examination by the original authority in the light of those precedents and the relevant documents. [Paras 5]

Impugned order set aside; appeal allowed by way of remand to the original authority for fresh verification and adjudication of the claim of cenvat credit in light of the Tribunal decisions and Board Circular, and after proper factual verification of FOR pricing and duty payment.

Final Conclusion: The appeal is allowed by setting aside the impugned order and remanding the matter to the original authority for fresh consideration of the appellant's claim for cenvat credit on outward transportation, having regard to subsequent Tribunal and High Court rulings and the Board Circular, and after verification whether the sales were on FOR basis with excise duty charged on the FOR-inclusive price.

Alternative efficacious remedy - writ jurisdiction under Article 226 - maintainability - appeal under section 26 of the Maharashtra Value Added Tax Act, 2002 - disputed questions of fact - extraordinary jurisdiction

Alternative efficacious remedy - writ jurisdiction under Article 226 - appeal under section 26 of the Maharashtra Value Added Tax Act, 2002 - maintainability - Whether the writ petition challenging the assessment order is maintainable when an alternative efficacious remedy by way of appeal under section 26 of the MVAT Act is available - HELD THAT: - The Court held that an adequate and efficacious alternative remedy in the form of an appeal under section 26 of the MVAT Act was available against the assessment order passed under section 23(4). Relying on settled principles that exercise of writ jurisdiction under Article 226 is discretionary and ordinarily declined where an alternative statutory remedy exists, the Court found no exceptional circumstances warranting invocation of extraordinary jurisdiction. The petition also raised disputed questions of fact and relied upon factual material and submissions not placed before the Assessing Officer; such factual controversies are for determination by the appellate authority in the statutory forum. The Court therefore declined to entertain merits of the assessment in a writ petition and emphasised that the Appellate Authority can consider procedural infirmities and grant further opportunity if necessary. [Paras 72, 74, 76, 79, 80]

Writ petition dismissed as not maintainable for failure to avail the alternative efficacious remedy of appeal under section 26 of the MVAT Act.

Disputed questions of fact - extraordinary jurisdiction - appellate consideration of factual disputes - Whether the High Court should decide disputed factual issues and fresh submissions raised across the bar in exercise of writ jurisdiction - HELD THAT: - The Court concluded that numerous disputed factual issues central to the assessment (including contract terms, point of appropriation/delivery and classification of contracts) were before it, many of which had not been canvassed before the Assessing Officer. The High Court refrained from admitting or adjudicating such fresh factual contentions in writ jurisdiction, noting that the statutory appellate forum is the appropriate forum to examine and decide those matters. The Appellate Authority was held competent to consider any failure of opportunity or other procedural issues and to grant relief if warranted. [Paras 77, 78, 79]

Court refused to adjudicate disputed factual issues in the writ petition and directed that such matters be raised and decided before the Appellate Authority.

Final Conclusion: The writ petition was dismissed as not maintainable because the petitioner did not avail the alternative efficacious remedy of appeal under section 26 of the MVAT Act; interim relief previously granted continues for four weeks from the date of the order.

Levy of interest under Section 42(3) of the TNVAT Act - automatic interest liability on belated payment of admitted tax - requirement of bifurcation between admitted tax and additions in assessment for interest computation - personal hearing before Assessing Authority on interest demand and rate applicability - challenge to notice dated 05.02.2019

Levy of interest under Section 42(3) of the TNVAT Act - automatic interest liability on belated payment of admitted tax - challenge to notice dated 05.02.2019 - Validity of the notice dated 05.02.2019 levying interest on belated payment of taxes under the TNVAT Act - HELD THAT: - The Court rejected the petitioner's challenge to the notice dated 05.02.2019 but found the notice deficient in failing to distinguish between (a) interest on belated payment of admitted tax (which arises automatically under the Act) and (b) interest relating to tax levied on additions made in assessment. The assessing computations in the 2016 assessments indicated that admitted taxes had not been settled; in that situation interest for admitted tax would be automatically leviable. However, because the impugned notice did not bifurcate the tax components and the interest attributable to each component, there was no clarity for the assessee to make targeted submissions. The Court therefore directed that the petitioner be given a personal hearing and that the Assessing Officer furnish a clear bifurcation of amounts of tax paid and the consequent interest levied thereon before proceeding to raise a fresh demand.

Challenge to the notice dated 05.02.2019 rejected; directed Assessing Officer to provide a bifurcation of tax and interest components and afford hearing to the petitioner on 17.06.2022.

Requirement of bifurcation between admitted tax and additions in assessment for interest computation - personal hearing before Assessing Authority on interest demand and rate applicability - Procedure to be followed by the Assessing Authority in relation to interest demand and rate disputes - HELD THAT: - The Court recorded that the petitioner may challenge the rate of interest (which was enhanced from 1.5% to 2% with effect from 28.05.2013) and directed that the petitioner be permitted to make submissions before the Assessing Authority. The Assessing Authority was directed to consider these submissions and to raise demands afresh, clearly categorising interest payable on admitted tax and on amounts arising from additions, and to state the applicable rate for each component. The Court emphasised that if admitted tax had been paid in time, interest levied in 2019 after a lapse of years would be inappropriate because interest demands are expected to accompany the tax demand or be raised within a reasonable period thereafter; nevertheless all contentions were left open for the authority to decide at the personal hearing.

Petitioner permitted to make submissions on interest rate; Assessing Authority to consider them, bifurcate demands and apply the appropriate rate when raising fresh demands after personal hearing.

TNGST and CST demands - absence of assessment orders for adjudication - remand for deliberation and personal hearing - Adjudication of parallel claims under the TNGST Act and the CST Act in the absence of assessment orders - HELD THAT: - The Court observed that the same issues of clarity regarding bifurcation and interest appear to obtain under the TNGST and CST regimes, but noted that there was no clarity because assessment orders under those Acts were not placed before the Court. Consequently, the parties were directed to deliberate on these aspects at the personal hearing scheduled on 17.06.2022 so that the assessing authorities may deal with the matters after providing the requisite information and hearing. The Court left the petitioner's contentions in relation to TNGST and CST open for consideration during that process.

Matters under TNGST and CST not finally decided; parties to deliberate and the Assessing Authorities to consider these aspects at the personal hearing on 17.06.2022.

Final Conclusion: Writ petitions disposed by refusing to set aside the impugned notice but directing the Assessing Authority to furnish a clear bifurcation of tax and interest components, afford a personal hearing on 17.06.2022, consider the petitioner's submissions including on the applicable interest rate, raise fresh demands with categorisation of interest, and to address corresponding issues under TNGST and CST following deliberation; all contentions left open for the authority's consideration.

Legally enforceable debt - possession as condition for payment / novation - concurrent findings of fact - equitable directions to end litigation

Legally enforceable debt - possession as condition for payment / novation - concurrent findings of fact - Whether the charge under Section 138 of the Negotiable Instruments Act was established and the concurrent acquittal by the trial and appellate courts should be interfered with. - HELD THAT: - The High Court examined the evidence and concurrent findings of the trial Court and the Sessions Judge and found a disputed factual matrix as to delivery of possession and the true terms of payment. The affidavits and the complainant's own deposition disclosed that the parties had altered the original bargain owing to non-registration of sale deeds, with an undertaking that possession would be delivered and the cheque deposited thereafter. The Court observed that such change in terms amounted to a novation of the original arrangement (permitted under the contract law principle of novation) and that the complainant had not proved that possession was handed over and that the cheque was deposited in accordance with the revised terms. Given the disputed facts and the acceptance by the courts below that a legally enforceable debt had not been established, the High Court declined to interfere with the concurrent findings of fact. [Paras 23, 26]

Concurrent acquittal on the ground that a legally enforceable debt was not proved is upheld; revision petition on merits is rejected.

Equitable directions to end litigation - payment of amount with interest - forbearance from claiming title - Whether, notwithstanding the rejection of the revision on merits, the Court should issue directions to amicably settle and finalise the dispute between the parties. - HELD THAT: - Although the petition challenging the concurrent findings was dismissed, the High Court, in exercise of its discretionary equitable powers to put a quietus to protracted litigation and in view of the parties' fair contentions, directed a practical settlement. The Court required the owner/complainant to return the partial amount received (Rs.1,00,000) with simple interest at 6% per annum from February 2012 until realisation, within a stipulated period, and directed that upon receipt the purchaser/respondent shall forbear from claiming any right, title or interest in respect of the property under the executed sale deeds. The Court further granted the owner liberty to regain possession and, if advised, to institute an appropriate civil suit for cancellation of the sale deeds, to which the purchaser shall not object. These directions were framed to end the dispute while leaving civil remedies open. [Paras 27, 28, 29]

The petition is disposed of with directions: return of the received amount with interest within the prescribed time, purchaser to forbear from asserting title on receipt, and liberty to the owner to take possession and pursue civil remedies.

Final Conclusion: The Criminal Revision Petition is dismissed; the High Court declined to interfere with the concurrent acquittal for want of a legally enforceable debt, and, to terminate the dispute between the parties, directed repayment of the partial amount with interest and stipulated mutual forbearance and liberty to pursue civil remedies.

Liability of companies and persons in charge for cheque bounce offences - Offences by companies - liability arising from being in charge of and responsible for conduct of business - Application of the standard in S.M.S. Pharmaceuticals regarding conduct, act or omission - Summoning order in prosecution under the Negotiable Instruments Act where pleadings allege responsibility - Burden to prove lack of knowledge or exercise of due diligence by persons sought to be prosecuted

Liability of companies and persons in charge for cheque bounce offences - Summoning order in prosecution under the Negotiable Instruments Act where pleadings allege responsibility - Application of the standard in S.M.S. Pharmaceuticals regarding conduct, act or omission - Validity of summons issued under Section 141 of the Negotiable Instruments Act against the company and its directors where the complaint pleads they were in charge of and responsible for the conduct of the company's business and the applicants have not denied those pleadings. - HELD THAT: - The Court examined the complaint which pleads that the accused were responsible for conduct of the business of the company at the relevant time and noted that this allegation has not been denied in the petition. Section 141 (offences by companies) treats as guilty the company and every person who, at the time the offence was committed, was in charge of and responsible to the company for the conduct of its business, subject to proof that the offence was committed without the person's knowledge or that due diligence was exercised. The Supreme Court's decision in S.M.S. Pharmaceuticals was held to require that liability under Section 141 arises from the person's role, conduct, act or omission and that the complaint must disclose facts making a person liable; however, where the complaint does so and the accused do not place material before the Court to show they were not in charge or responsible (or that the offence occurred without their knowledge/exercise of due diligence), the issuance of summons is sustainable. Here, the applicants asserted that an individual who signed the cheque was not an authorized signatory but furnished no supporting material identifying the authorized signatory or explaining why the applicants were not responsible for the company's business, and applicant no.1 is the company while applicants no.2-4 are its directors. On this record the Court found the challenge to the summoning order unsustainable. [Paras 5, 6, 7, 8, 9]

Summons issued against the company and the directors under Section 141 are valid; the petition under Section 482 Cr.P.C. is dismissed.

Final Conclusion: The petition under Section 482 Cr.P.C. challenging the summoning order in the cheque-bounce complaint is dismissed as the complaint pleads responsibility of the directors and company under Section 141, the applicants have not negated those pleadings or furnished material to show lack of responsibility or due diligence, and the summons were therefore rightly issued.