TMI Tax Updates e-Newsletter
Jun 20,2026

Delay and laches -Writ jurisdiction against GST assessment - Alternative statutory remedy - Electronic communication of assessment order - Suppression of material facts - HELD THAT: - The Court found that the assessment order itself elaborately recorded the factual basis for issuance of the show cause notice. In that situation, the proper course was to challenge the assessment by an appeal under Section 107 of the CGST Act. The explanation that the petitioner was unaware of the order uploaded on the electronic portal was not accepted, as no convincing reason was shown to disregard the electronic communication. The Court also noted the petitioner's own admission that he had become aware of the proceedings earlier but approached the High Court belatedly. On these facts, the writ petition was correctly refused as a surrogate for appellate proceedings not availed within time. The pending matter [2025 (11) TMI 1927 - SC ORDER] was held to arise on a different factual footing and was therefore not applicable. [Paras 3]

Refusal to entertain the writ petition was upheld, and the Special Leave Petition was dismissed.

Final Conclusion: The Court declined to interfere, holding that the petitioner could not invoke writ jurisdiction to bypass the statutory appellate remedy against the GST assessment order after allowing that remedy to become time-barred. The Special Leave Petition was accordingly dismissed.

Condonation of delay in statutory appeal - Sufficient cause - Pendency of rectification application - Additional ground before appellate authority - Appeal barred by limitation - HELD THAT: - The Court found that the delay condonation application, though containing several grounds, omitted the material ground that a rectification application had remained pending. The omission was attributable to the fault of the Chartered Accountant, and the Court considered that such pendency could constitute sufficient cause for seeking condonation of the delay in filing the appeal. In these limited facts, the Court held that the interests of justice would be served by permitting the assessee to raise that additional ground before the appellate authority and by requiring the authority to reconsider condonation of delay afresh, and, if delay is condoned, to decide the appeal on merits. [Paras 7, 8, 9]

The order dismissing the appeal as barred by limitation was set aside, and the matter was remitted to the appellate authority for fresh consideration of condonation of delay with liberty to the assessee to raise the additional ground regarding pendency of the rectification application.

Final Conclusion: The High Court set aside the appellate order rejecting the appeal as time-barred and remitted the matter for fresh consideration on condonation of delay, permitting the assessee to rely on the pendency of the rectification application as an additional ground.

Interest on delayed payment of GST as statutory levy - Operation of law - Filing or revision of returns contrary to statutory scheme - Contractual reimbursement of incremental tax burden - additional GST burden arising from the shift to the GST regime - Contracting parties

Whether the learned Single Judge could have issued directions to the tax authorities to permit filing of returns/revised returns while waiving interest, penalty, and limitation under the GST Acts, and to refrain from precipitative action ? -HELD THAT: - The Court held that liability to pay GST, and the incidents of assessment, recovery and enforcement, must be determined strictly under the governing statute and cannot be altered by judicial directions inconsistent with the statutory scheme. Interest on delayed payment of tax arises by operation of law where the fiscal statute provides for it and, in the absence of any statutory power of waiver, the authorities have no discretion to waive or reduce it. For the same reason, directions permitting filing or amendment of returns in a manner not contemplated by the statute, and blanket waiver of penalty, interest and limitation, were beyond what could be sustained. [Paras 9, 10, 11]

The directions permitting revised returns contrary to statute and waiving interest, penalty and limitation were held unsustainable.

Entitlement to reimbursement of the incremental tax paid or payable by it on account of the levy of GST -HELD THAT: - The Court distinguished between the statutory liability to tax and the contractual arrangement governing reimbursement of that burden. It held that the question whether the sub-contractor was entitled to reimbursement of incremental tax from the employer or main contractor was purely inter se between the contracting parties. Such contractual arrangements could not modify the statutory scheme of GST or furnish a basis for issuing directions to tax authorities in relation to levy, assessment, recovery or enforcement. Consequently, the direction regarding reimbursement had to be read as operating only against the concerned contractual party and not against the tax authorities. [Paras 9, 12, 13]

The reimbursement direction was construed as one only against the contracting party concerned and not against the tax authorities.

Final Conclusion: The appeal was disposed of by setting aside the impugned order insofar as it related to the writ petition in question. The Court held that statutory GST liabilities, including interest, penalty and return-related limitation, could not be diluted by directions founded on a separate contractual reimbursement dispute.

Limitation for statutory appeal after pursuit of rectification remedy - Hyper-technical rejection of appeal on limitation - period of limitation prescribed for filing of application - Rejection of the statutory appeal as time-barred - HELD THAT: - The Court held that, on the admitted dates, the petitioner had been genuinely pursuing the statutory remedies against the original assessment order. The rectification application had been filed within time and remained pending until its rejection, after which the appeal was filed within three months. In that factual setting, the appellate authority ought not to have rejected the appeal by reckoning limitation only from the date of the original order. The Court further held that, if the appellate authority considered absence of a specific challenge to the rectification rejection order to be a technical defect, the petitioner ought to have been permitted to suitably amend the appeal rather than suffer dismissal on that hyper-technical ground. [Paras 6, 7, 8]

The order dismissing the appeal as barred by limitation was set aside, and the matter was remitted to the Appellate Joint Commissioner for decision on merits without any expression of opinion on the merits.

Final Conclusion: The writ petition was allowed. The High Court set aside the appellate order insofar as it rejected the appeal on limitation and remitted the matter for fresh decision on merits in accordance with law.

Competence of adjudicating authority for DGGI-issued GST notices - Proper officer under delegated notification - Lack of jurisdiction - Principles of natural justice - HELD THAT: - The Court examined Notification No. 02/2017-Central Tax and the amendment introduced by Notification No. 02/2022, by which Clause 3A and Table V were inserted. It held that, for notices issued by officers of the Directorate General of Goods and Services Tax Intelligence, the power to pass an order or decision stood specifically vested in the Additional Commissioner or Joint Commissioner of Central Tax. Since the impugned order had been passed by the Assistant Commissioner, it was contrary to the notified allocation of powers and therefore suffered from procedural irregularity. On that ground, the Court did not enter into the merits of the classification dispute or limitation objection. [Paras 11, 12, 13]

The impugned order was quashed and the matter was remitted for fresh adjudication by the competent authority in accordance with the applicable notifications, after affording an opportunity of hearing.

Final Conclusion: The writ petition was disposed of by quashing the adjudication order on the ground that it had been passed by an authority not competent to adjudicate a DGGI-issued notice under the governing notifications. The matter was remitted for fresh decision on merits by the competent authority after granting hearing.

Penalty demand beyond show cause notice - Defective specification in DRC-01 - Initiation of proceedings under superseded statutory provision - Pre-decisional notice - Principles of Natural Justice

Penalty demand beyond show cause notice - Defective specification in DRC-01 - HELD THAT: - The Court noted that, though the revenue referred to the narrative in the show cause notice, it was not disputed that Form DRC-01, through which the demand had to be specified for the purposes of the proceedings, contained no specification of penalty. On that admitted position, confirmation of penalty in the adjudication order suffered from a defect in the notice process and required interference. [Paras 5, 6, 7]

The impugned order was set aside on this ground and the matter was remitted to the show cause stage with liberty to issue an appropriate DRC-01 without raising any new dispute.

Initiation of proceedings under superseded statutory provision - Applicability of Section 74-A - HELD THAT: - The Court found that the objection arising from enforcement of Section 74-A with effect from 1.11.2024, and its bearing on continuation of proceedings under Section 74 for the period November, 2024 to March, 2025, merited serious consideration. Since that defect had not been examined while issuing the notice, the adjudication order could not be sustained and the matter had to return to the show cause stage for reconsideration. [Paras 5, 6, 7]

The impugned order was set aside on this ground as well, with liberty to issue a revised show cause notice confined to the original dispute and, if necessary, to propose a lesser demand.

Final Conclusion: The High Court set aside the adjudication order and remitted the matter to the competent authority at the show cause stage. Fresh proceedings were permitted only by revising the notice within the limits indicated by the Court and without introducing any new dispute.

Challenged the adjudication order and Form DRC-07 - Pre-show cause settlement of GST demand - Statutory scheme under Section 74(5) - HELD THAT:- Petition challenging the adjudication order and Form DRC-07 for F.Y. 2018-2019 was allowed on the same terms as the earlier decision in the petitioner's identical case in M/s World Phone Internet Vs. Superintendent [2026 (6) TMI 249 - ALLAHABAD HIGH COURT].

Delayed or non-deposit of GST/TDS deducted in relation to Gram Sabha works -GST deduction default - Special statute as complete code - Invocation of general penal law despite special statutory mechanism - Abuse of Process - Prospective operation of substantive penal law - General Law versus Special Law -

Whether the State Authorities can legally initiate criminal prosecution by invoking the penal provisions of IPC/B.N.S. without invoking the penal provisions and mandatory statutory procedure prescribed under the U.P. Goods and Services Tax Act, 2017, which is a Special Statute providing a complete mechanism for adjudication, penalty and prosecution? - HELD THAT: - The Court held that the GST enactment is a complete and self-contained special statute governing deduction of tax at source, delayed payment, determination of default, penalty, prosecution and compounding. On the allegations as recorded, the case disclosed only delayed or non-deposit of deducted GST/TDS, and did not disclose any independent ingredients of dishonest misappropriation, forgery, fabrication, cheating, siphoning of funds or wrongful gain. Where the special statute occupies the field and provides an exhaustive mechanism, recourse to general penal law is impermissible unless the allegations independently make out a distinct criminal offence. The prosecution, therefore, ought not to have been launched solely under Section 316(5) B.N.S.; at best, the authorities could proceed under the GST law in accordance with that statute. The Court applied the principle stated in Sharat Babu Digumarti v. Government of NCT of Delhi [2016 (12) TMI 1821 - SUPREME COURT]. [Paras 13, 14, 15, 16, 17]

The prosecution under Section 316(5) B.N.S. based solely on alleged delayed or non-deposit of deducted GST/TDS was held legally unsustainable.

Whether the FIR, charge sheet and cognizance taken under the provisions of the Bharatiya Nyaya Sanhita, 2023 in relation to an alleged occurrence pertaining to the financial year 2017–18 are legally sustainable in the eyes of law? - HELD THAT: - The Court held that the alleged occurrence admittedly related to the financial year 2017-18, whereas the FIR, charge-sheet and cognizance had been taken under the Bharatiya Nyaya Sanhita, 2023. Following the principle noticed in Deepu & Others v. State of U.P [2024 (8) TMI 1535 - ALLAHABAD HIGH COURT] the Court held that substantive penal law applicable to an occurrence is the law in force on the date of occurrence, though subsequent procedural law may govern investigation. Since the penal provision invoked was not in existence when the alleged omission occurred, the prosecution suffered from manifest legal infirmity. [Paras 18, 19, 20, 21, 22]

Invocation of Section 316(5) B.N.S. for an alleged occurrence of the financial year 2017-18 was held impermissible and the prosecution on that basis could not stand.

Final Conclusion: The Court quashed the impugned charge-sheet, cognizance order and consequential proceedings against the applicant. It held that the allegations, being confined to delayed or non-deposit of deducted GST/TDS, were governed by the U.P.G.S.T. Act, 2017, and that prosecution under Section 316(5) B.N.S. for an occurrence of the financial year 2017-18 was legally untenable.

Substantial compliance of notice on GST common portal - Opportunity of hearing in Section 73 adjudication - Alternative remedy where disputed questions of fact arise -Breach of natural justice - Violation of Section 75(7)

Notice uploaded on common portal - Rules of natural justice - Substantial compliance -HELD THAT: - The Court noted from the petitioner's dashboard on the common portal that the original show cause notice, reminder notices and the notice dated 17.12.2025 were all visible. Since service of the original show cause notice and reminders was not disputed, the plea that the last notice was not communicated was not accepted. The Court held that in such matters substantial compliance is to be seen, and mere description of the last notice as an adjournment did not establish concealment of the notice or denial of hearing when the attachment containing the notice was available on the portal. [Paras 8, 9, 10]

The objection founded on violation of natural justice was rejected.

Section 73 adjudication - Supplementary show cause notice - Opportunity of hearing - HELD THAT: - The Court emphasized that the proceedings were under Section 73 and not Section 74 of the Act. It found that the supplementary notice dated 17.12.2025 was not time-barred and that the quantum of tax and penalty in the impugned order corresponded with the demand proposed in that supplementary show cause notice. On that basis, the challenge alleging breach of Section 75(7) was not accepted. [Paras 11]

The plea of violation of Section 75(7) failed.

Alternative efficacious remedy - Disputed questions of fact - Appraisal of evidence in appeal -HELD THAT: - After rejecting the procedural objections, the Court held that the surviving challenge concerned the sustainability of the adjudication order on merits and the correctness of the factual findings recorded therein. As those were issues of fact requiring appraisal of evidence, the proper course was to pursue the statutory appeal rather than seek adjudication in writ proceedings. [Paras 12, 13, 14]

The petitioner was relegated to the appellate remedy, with protection that an appeal filed within the time granted be considered on merits without objection as to limitation.

Final Conclusion: The writ petition was disposed of after the Court rejected the objections based on lack of notice and alleged breach of Section 75(7). Since the remaining challenge turned on factual findings and merits of the adjudication, the petitioner was relegated to the statutory appeal, with limited protection on limitation if the appeal is filed within the time granted.

Pending confiscation proceedings - Premature adjudication of legality of detention - Release of intercepted goods on bond - opportunity of hearing - The learned Single Judge was not justified in directing release of the intercepted goods on furnishing a simple bond and in recording a final finding that detention was illegal while proceedings pursuant to Form MOV-10 had not yet been concluded. -​​​​​​​ HELD THAT: - The Court held that the notice in Form MOV-10 was only a proposal and that the adjudicating authority had yet to finally decide the confiscation proceedings after hearing the respondent and following due procedure. Since the respondent had, without admitting liability, expressed willingness to remit the determined confiscation fine and penalty for obtaining release, the proper course was to leave it to the statutory adjudicating authority to decide, in accordance with law, whether the goods could be released without actual confiscation on acceptance of such amount. In that situation, the question whether the goods could be detained without a formal order of detention was not decided, the Court observing that a pronouncement on that issue at this stage would be inappropriate and all such legal questions were left open for consideration after final adjudication. [Paras 11, 12, 13]

The directions for release on simple bond and the finding that detention was illegal were set aside, and the confiscation proceedings were directed to be completed expeditiously after affording the respondent an opportunity of hearing and of producing documents.

Final Conclusion: The appeal was allowed. The judgment directing release of the goods on bond and declaring the detention illegal was set aside, and the competent adjudicating authority was directed to complete the proceedings arising from Form MOV-10 expeditiously, with all legal issues kept open.

Writ petition seeking a creamy-layer based restriction on tax exemption for scheduled tribes u/s 11 - Judicial restraint in matters of legislative policy - Maintainability of writ petition seeking amendment of tax exemption policy - seeking formulation, revision, and/or amendment of the legislative public policy.

HELD THAT: - The Court held that the reliefs claimed were directed to altering the content of the legislative policy governing tax exemption and, for that reason, the Supreme Court under Article 32 was not an appropriate forum to entertain such a request at that stage.

Instead of adjudicating upon the merits of the policy challenge, the Court left it open to the petitioner to pursue the matter before the Committee on Petitions constituted under the Rules of Procedure and Conduct of Business in Lok Sabha and also to forward the writ petition as a representation to the concerned authorities. [Paras 3, 4, 5, 6]

The writ petition was disposed of with liberty to approach the Committee on Petitions and to submit the petition as a representation to the concerned authorities.

Final Conclusion: The Court declined to entertain the writ petition on the ground that the reliefs sought pertained to legislative public policy. The petition was accordingly disposed of with liberty to the petitioner to pursue the matter before the appropriate petitionary and administrative forums.

Sanction for prosecution - Non-consideration of reply to show-cause notice - Writ jurisdiction despite pendency of prosecution

Sanction for prosecution - Non-consideration of reply to show-cause notice - Reasoned order - validity of the sanction order for initiating prosecution for delayed deposit of TDS, where the assessee's reply to the show-cause notice was not considered - HELD THAT: - The Court held that the sanctioning authority had passed the order in a perfunctory and slip-shod manner, without proper application of mind to the reply submitted by the petitioner and without recording reasons for rejecting the explanation furnished therein. Since the sanction order did not reflect proper consideration or adjudication of the reply, it was unsustainable in law. The matter was therefore directed to be revisited by the competent authority after considering the reply, granting hearing, and passing a reasoned order. [Paras 11, 12, 13]

The sanction order was quashed, and the competent authority was directed to reconsider the petitioner's reply and pass a reasoned order after hearing the petitioner.

Writ jurisdiction despite pendency of prosecution - Exceptional circumstances - maintainability of the writ petition notwithstanding that a complaint had already been lodged and prosecution proceedings had been initiated - HELD THAT: - The Court held that the mere initiation of prosecution did not oust the High Court's jurisdiction under Article 226 of the Constitution. It found that the case fell within exceptional circumstances because the reply to the show-cause notice had apparently not been considered before grant of sanction, warranting interference in writ jurisdiction. [Paras 9, 10, 11]

The writ petition was held maintainable and interference was found justified despite the pendency of prosecution proceedings.

Final Conclusion: The High Court held that the writ petition was maintainable despite initiation of prosecution and set aside the sanction order on the ground that the assessee's reply to the show-cause notice had not been properly considered. The matter was remitted to the competent authority for fresh consideration and a reasoned decision after hearing the petitioner.

Faceless assessment regime - Validity of reassessment - non-compliance with Section 151A - whether Jurisdictional Assessing Officer had no jurisdiction to issue the impugned notice under Section 148 of the IT Act and that it ought to have been issued only by the Faceless Assessing Officer

Co-ordinate bench of this Court, vide an Order [[2024 (8) TMI 1739 - BOMBAY HIGH COURT] heard the matter finally and allowed the Petition solely on the ground of non-compliance with Section 151A of the IT Act by relying on the judgment of Hexaware Technologies Ltd. [2024 (5) TMI 302 - BOMBAY HIGH COURT] and as the matter was challanged in supreme court it passed an order in Tej Partap Singh [2026 (5) TMI 54 - SC ORDER (LB)] and remitted all the matters back to the respective High Courts without expressing any opinion on the merits of the controversy, particularly in light of the retrospective amendment by way of the Finance Act, 2026.

Before filing the present Writ Petition, the Petitioner had also filed an appeal before the learned Commissioner of Income Tax (Appeals) challenging the Assessment Order dated 22nd March 2023. Soon after this Court passed the order dated 26th August 2024 allowing the Writ Petition, Commissioner (Appeals) passed an order dated 11th September 2024 treating the appeal as defunct in light of this Court’s order and noted that none of the other grounds raised therein were being dealt with in view of this Court’s order.

HELD THAT:- Without deciding the merits of the challenge to the notice under Section 148 and the reassessment for A.Y. 2015-16, the Court directed revival of the pending appeal before the Commissioner (Appeals), permitted the petitioner to raise all grounds including limitation, stayed operation of the assessment order during pendency of the appeal, and directed expeditious disposal.

Reassessment notice for Assessment Year 2015-16 - Limitation for notice u/s 148 - Time-bar in light of concession recorded by Supreme Court - scope of amendment introduced by the Legislature, namely the insertion of Section 147-A, w.e.f. 1st April 2026, having retrospective effect. Assessee relied upon the Judgement of this Court in the case of Hexaware Technologies Limited [2024 (5) TMI 302 - BOMBAY HIGH COURT] which is pending before the Hon’ble Supreme Court,

HELD THAT: - The Court held that, in view of the subsequent order of the Supreme Court remitting similar matters to the High Courts, the first and only enquiry required in cases of this class was whether the matter pertained to Assessment Year 2015-16. The present case admittedly related to Assessment Year 2015-16 and the impugned notice had been issued on or after 1st April 2021. On that admitted position, and in light of the concession recorded before the Supreme Court in Union of India and Ors. Vs. Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] that such reassessment notices for Assessment Year 2015-16 would be time-barred, no further adjudication on the earlier jurisdictional ground was required. The objections to revival were therefore treated as irrelevant, the petition was revived, and the notice was declared time-barred. [Paras 6]

The writ petition was revived and the impugned notice u/s 148, along with all consequential action, was quashed as time-barred.

Final Conclusion: Since the impugned notice under Section 148 was issued on or after 1st April 2021 and related to Assessment Year 2015-16, it was held to be time-barred in terms of the concession recorded before the Supreme Court. The writ petition was accordingly revived and allowed, and the notice with all consequential action was quashed.

Validity of reassessment proceedings - Provision for warranty on scientific basis - Reopening on change of opinion - Reassessment on fully disclosed material

Provision for warranty on scientific basis - Deduction of warranty liability - Reopening on ignorance of binding law - Reopening based on disallowance of provision for warranty as an unascertained liability where the assessee had explained that the provision was created on a scientific basis and the material already on record attracted the principle governing deductible warranty liability - HELD THAT: - The Court held that the governing principle stated in Rotork Controls India Private Limited [2009 (5) TMI 16 - SUPREME COURT] squarely applied. A warranty provision is deductible where it represents a present obligation arising from past events, is likely to result in outflow of resources, and can be reliably estimated. The assessee had disclosed that the provision was computed on a scientific basis with reference to past experience, expected repairs and related costs, and had also disclosed the treatment in its audited financial statements.

Assessing Officer proceeded on the premise that the provision was merely an unascertained liability without examining this material, the historical basis of estimation, the reversals offered in subsequent years, the mandatory ICDS concepts of liability and obligating event, and the consistent allowance of similar deduction in prior and subsequent years. The reopening was therefore founded on non-consideration of binding law and of material already available on record. [Paras 5, 6]

The ground for reopening relating to provision for warranty was quashed.

Forfeited security deposit against C-Form - Reopening on disclosed facts - Change of opinion - Reopening on the basis that forfeited security deposits taken against C-Forms had not been offered to tax - HELD THAT: - The Court found that the impugned order itself referred to the assessee's earlier detailed submission explaining the forfeited security deposits, the customer-wise particulars, and the use of the amounts towards payment of sales tax liability arising from non-supply of C-Forms. That material was already before the Assessing Officer during the original proceedings. The subsequent attempt to reopen on the same material, without proper appreciation of the explanation and supporting records such as the ledger and challans, amounted only to a change of opinion. Since the basis of reopening was not new material but reconsideration of what had already been disclosed, interference was warranted on this ground as well. [Paras 6]

The ground for reopening relating to forfeited security deposits against C-Forms was also quashed as a mere change of opinion.

Final Conclusion: The writ petition was allowed and the notice and order issued for reopening the assessment were quashed. The Court held that both grounds of reopening were unsustainable, the first being contrary to the law governing scientifically estimated warranty provisions and the second being based only on a change of opinion on material already disclosed.

Assessment order was barred by limitation u/s 153 - Limitation for assessment order under the amended statutory scheme - Fees for technical services under the India-Singapore DTAA - Make available requirement for management and business support services - Treaty override over broader domestic definition

Assessment limitation - Retrospective statutory amendment - Whether the assessment order was barred by limitation under section 153 in view of the retrospective amendments to sections 144C, 153 and 153B? - HELD THAT: - The Tribunal held that, having regard to the recent retrospective amendments to sections 144C, 153 and 153B, the impugned assessment order had been passed within the permissible period. The challenge to validity on limitation therefore failed. [Paras 3]

The ground challenging the assessment as time-barred was dismissed.

Fees for technical services under treaty - Make available test - Management and business support services - Beneficial treaty protection - Management and business support service fees received from the Indian subsidiary taxability in India as fees for technical services under Article 12(4) of the India-Singapore DTAA - HELD THAT: - The Tribunal found that the controversy was identical to that decided in the assessee's own case for earlier years and that the underlying service agreement continued without any factual change. Following the consistent earlier view, it held that the services, though described across functions such as strategy, IT, finance, logistics, branding, tax, treasury, legal, compliance, human resources and allied support, did not satisfy the treaty conditions for taxation as fees for technical services. The determinative principle applied was that Article 12(4) required satisfaction of the treaty conditions, including the make available requirement or development and transfer of a technical plan or design, and these were not met by the services rendered. Since the treaty definition was more beneficial than the broader domestic definition, the assessee was entitled to protection under the treaty and the receipts were not taxable in India on that footing. [Paras 9, 10]

The addition made by treating the receipts as fees for technical services was deleted.

Final Conclusion: The Tribunal upheld the validity of the assessment on limitation but accepted the assessee's treaty claim on merits. It held that the receipts from management and business support services were not taxable in India as fees for technical services under the India-Singapore DTAA, and the appeal was partly allowed.

Tax deduction at source on reinsurance premium paid to non-resident reinsurers - Permanent establishment of foreign reinsurer through Indian subsidiary - Characterisation of reinsurance premium as fees for technical services or royalty

Whether assessee had no obligation to deduct tax at source on remittances made to the overseas reinsurers towards reinsurance premium, and could not be treated as an assessee in default under section 201? - HELD THAT: - The Tribunal held that the controversy stood covered, in relation to the Irish reinsurer, by earlier decisions in Bharti Axa Life Insurance Co. Ltd. [2017 (8) TMI 840 - ITAT MUMBAI] and RGA International Reinsurance company Limited [2022 (11) TMI 31 - ITAT MUMBAI] wherein it was held that the Indian subsidiary could not be treated as the payee's PE in India, since it did not provide reinsurance services to the assessee.

In relation to Munich Re [a company incorporated in Germany], the Tribunal found no material to support the Assessing Officer's allegation that the remittance was taxable in India either on account of PE or as fees for technical services or royalty. The payments were purely towards reinsurance premium, and there was nothing on record to show that any technical, consultancy or similar services were rendered by the foreign entities or the alleged Indian PEs. In the absence of material to dislodge the factual findings of the first appellate authority, the remittances were held not taxable in India in the hands of the recipients, and consequently no withholding obligation arose. [Paras 7, 8]

The order deleting the demand under section 201(1) and interest under section 201(1A) was upheld.

Final Conclusion: The Revenue's appeal was dismissed. The Tribunal affirmed that reinsurance premium remitted to the two overseas entities was not shown to be taxable in India either on the basis of PE or as fees for technical services or royalty, and therefore no liability to deduct tax at source arose.

Doctrine of mutuality - Head office expenditure under section 44C - Disallowance of expenditure relating to exempt income - Broken period interest on securities - Software expenditure as revenue expenditure - Taxation on gross basis under section 115A

Doctrine of mutuality - Interest between permanent establishment and head office - Interest received by the Indian branch from its head office and overseas branches on NOSTRO account taxabilityunder the domestic law. - HELD THAT: - The Tribunal held that the assessee had chosen to be governed by the domestic law and, on that footing, interest received from or paid to the head office and overseas branches was a transaction with self. Applying the principle that no person can make profit out of itself, such receipts and payments could not be brought to tax in the hands of the permanent establishment. Following the binding judicial position noticed in the order, the direction of the first appellate authority to treat the item on a tax-neutral basis was upheld. [Paras 9]

The Revenue's challenge to deletion of the addition on account of interest from head office and overseas branches failed.

Head office expenditure under section 44C - Exclusive and common expenditure - Royalty characterization remand - Direct expenditure incurred outside India on behalf of the Indian branch excluded from section 44C merely because it was exclusive to the branch - HELD THAT: - The Tribunal applied the later Supreme Court ruling in the assessee's own case [2025 (12) TMI 980 - SUPREME COURT], which held that section 44C does not recognize any distinction between common and exclusive head office expenditure. At the same time, the Supreme Court had confined the expression "head office expenditure" to expenditure incurred outside India, in the nature of executive and general administration, and falling within the specific categories enumerated in the Explanation or prescribed thereunder. Since the authorities below had not properly examined the precise nature and character of the disputed items on that tripartite test, and the first appellate authority had also disallowed part of the claim by treating it as royalty without first deciding whether it fell within section 44C, the entire controversy required de novo examination. The royalty question was directed to be examined only if the expenditure was found not to fall within the statutory concept of head office expenditure. [Paras 19, 22, 23, 49]

The issue of deduction for direct head office expenses, including the part treated as global system charges, was restored to the Assessing Officer for fresh adjudication in accordance with the Supreme Court's interpretation of section 44C.

Disallowance of expenditure relating to exempt income - Presumption from interest-free funds - whether disallowance of interest expenditure could be made in relation to tax-free bonds and dividend income where sufficient interest-free funds were available and no nexus with borrowed funds was established? - HELD THAT: - The Tribunal accepted the factual finding that the assessee had surplus interest-free funds far in excess of the investments yielding exempt income. In the absence of any direct nexus established by the Assessing Officer between interest-bearing funds and such investments, the presumption operated that the investments were made from interest-free funds. On that basis, the deletion of the disallowance was sustained. [Paras 28, 29]

The Revenue's ground challenging deletion of the disallowance under section 14A in relation to exempt bond interest and dividend was rejected.

Section 14A and mutuality receipts - Receipts not entering computation of income - HELD THAT: - The Tribunal held that once the receipt from head office and overseas branches was treated as a self-to-self transaction, it did not enter the computation stream as income. Section 14A applies to expenditure incurred in relation to income which does not form part of total income, but a mutuality receipt stands on a different footing because it is not income in the first place. The disallowance directed by the first appellate authority on that premise therefore could not survive. [Paras 38, 39]

The disallowance of interest expenditure and administrative cost by applying section 14A to NOSTRO account receipts was directed to be deleted.

Broken period interest on securities - Revenue deduction for banking securities - Broken period interest paid on purchase of interest-bearing securities allowability as deduction - HELD THAT: - The Tribunal held that the issue stood concluded by the decisions noticed in the order, including the approval of the view that broken period interest paid to the seller is deductible and is not to be added to the cost of securities in the manner suggested by the Assessing Officer. The first appellate authority was therefore right in deleting the addition. [Paras 33]

The Revenue's challenge to allowance of broken period interest was dismissed.

Software expenses incurred for ATM operations - Nature of expenditure - revenue or capital expenditure - HELD THAT: - The Tribunal found that the software was used as an integral part of the assessee's banking business and enabled more efficient conduct of that business. On that functional test, the expenditure was revenue in nature. The Tribunal also observed that, in any event, the dispute would only result in a timing difference because depreciation would otherwise be available, but the primary finding remained that the claim was allowable as revenue expenditure. [Paras 45]

The disallowance of software expenditure was deleted.

Taxation on gross basis under section 115A - Deductibility against other business income - Expenditure relatable to income taxable at the special rate under section 115A disallowed against other business income merely because the relevant interest income was taxable on gross basis- HELD THAT: - The Tribunal followed the earlier order in the assessee's own case [2012 (11) TMI 499 - ITAT MUMBAI], as affirmed by the jurisdictional High Court [2015 (8) TMI 1584 - BOMBAY HIGH COURT] and held that income chargeable at a lower rate is not the same as exempt income. Therefore, the statutory restriction applicable to expenditure relating to exempt income had no application. In a composite business, the expenditure could not be denied deduction against income taxable at normal rates merely because another stream of income was subjected to tax on gross basis under the special provision. [Paras 54, 55]

The disallowance of expenditure relating to interest on foreign currency loan taxable under section 115A was directed to be deleted.

Final Conclusion: The Revenue's appeal was partly allowed for statistical purposes only, the principal interference being a remand on the section 44C controversy for fresh examination of the nature of the disputed head office expenses. The assessee's appeal was partly allowed, with relief granted on the section 14A disallowance relating to mutuality receipts, software expenditure, and expenditure linked to income taxable under section 115A.

Penalty u/s 271AAC(1) - addition u/s 69A - Survival of penalty after deletion of quantum addition

HELD THAT: - The Tribunal held that the penalty order had no legal basis once the addition made in the reassessment order stood deleted by the revisional order under section 264 and such deletion had also been given effect to by the Assessing Officer. Since the very foundation for levy of penalty under section 271AAC ceased to exist, the subsequent penalty could not survive. [Paras 6]

The penalty order and the appellate order confirming it were set aside.

Final Conclusion: The Tribunal allowed the appeal and held that, after deletion of the underlying addition under section 69A in revision, penalty under section 271AAC was illegal and unsustainable.

Taxability of registered society as association of persons - applicability of maximum marginal rate to registered society - whether assessee society, being registered under the Societies Registration Act, 1860, could not be taxed at the maximum marginal rate merely by treating it as an association of persons with indeterminate or unknown member shares? - HELD THAT: - The Tribunal found from the assessment record that the Assessing Officer had subjected the income determined in the hands of the assessee society to tax at the maximum marginal rate by treating it as an association of persons falling within section 167B. On examination, the Tribunal held that while applying that provision, the Assessing Officer had overlooked the statutory exception available where the association is a society registered under the Societies Registration Act, 1860.

Since the assessee placed on record its registration certificate and its status as a registered society stood established, the Tribunal held that the levy at the maximum marginal rate was contrary to law and that the tax liability had to be computed at the rates applicable in the case of an individual. [Paras 11, 12, 13]

The order of the CIT(A) was set aside on this aspect and the Assessing Officer was directed to determine the tax liability at the rates applicable to an individual under the extant law.

Claim for credit of tax deducted at source - HELD THAT: - The Tribunal did not adjudicate the TDS credit claim on merits and held that the matter required verification by the Assessing Officer. It directed that credit be allowed if the claim was found correct and the income corresponding to the TDS had been taken into account in the return of income. [Paras 14]

The issue of TDS credit was restored to the Assessing Officer for factual verification and consequential grant of credit, if found admissible.

Final Conclusion: The Tribunal held that the assessee society, being registered under the Societies Registration Act, 1860, was not liable to tax at the maximum marginal rate and directed recomputation of tax at normal rates applicable to an individual. The claim for TDS credit was remitted to the Assessing Officer for verification.

TP adjustment on royalty and technical fees - Advance Pricing Agreement as guidance for comparability analysis

Royalty and technical fees benchmarking - Guidance value of Advance Pricing Agreement - HELD THAT: - The Tribunal noted that the adjustment had been made by taking the arm's length price of royalty and technical fees at a level resulting in an excessive addition. It accepted the assessee's submission that a unilateral advance pricing agreement entered into with CBDT had fixed a consolidated rate of 1.9% of net sales for royalty and fees for technical services, and relied on RANBAXY LABORATORIES LTD. [2016 (5) TMI 157 - ITAT DELHI] for the principle that a concluded APA, though not applied as such to another year, carries high persuasive value and its methodology can guide comparability analysis where the nature of transactions is similar.

On that basis, the Tribunal held that the impugned adjustment was excessive and directed the AO to follow the rate accepted by CBDT. [Paras 7, 8]

The addition on account of arm's length price for royalty and technical fees was set aside to the extent of excess adjustment, and the Assessing Officer was directed to cap the rate at 1.9% of net sales.

Final Conclusion: The appeal was partly allowed. The transfer pricing adjustment on royalty and technical fees was held to be excessive, and the Assessing Officer was directed to apply the rate of 1.9% of net sales in line with the rate accepted by CBDT under the unilateral advance pricing agreement; the remaining grounds were left open or treated as consequential.

Invalid service of appellate notice - reasonable opportunity of being heard denied - remand for fresh appellate adjudication

Whether appellate order in the quantum appeal could not be sustained where the assessee had opted out of email service in Form No. 35, but the hearing notices were not served in the manner so opted, resulting in denial of sufficient opportunity before the Commissioner (Appeals)? - HELD THAT: - The Tribunal found from the record that the assessee had specifically declined receipt of notices by email and had provided the address for service in Form No. 35. Except for one notice in respect of which adjournment was sought, the notices fixing the appeal on the other dates were not shown to have been served in the mode chosen by the assessee. In these circumstances, the assessee was held to have been deprived of a proper and sufficient opportunity to participate in the appellate proceedings, and the disposal of the appeal shortly after the single noticed hearing did not cure that defect. [Paras 12, 13, 14]

The quantum appellate order was set aside and the matter was remanded to the Commissioner (Appeals) for fresh adjudication after affording a reasonable opportunity of hearing.

Penalty under section 270A - consequential remand - The appeal against penalty under section 270A was required to be restored where the connected quantum appellate order had been set aside for fresh adjudication. - HELD THAT: - The Tribunal treated the penalty appeal as dependent on the outcome of the quantum proceedings. Since the order in the quantum appeal had already been set aside to the file of the Commissioner (Appeals), the penalty appeal arising on the same footing was also restored for disposal after the quantum appeal is decided. [Paras 17]

The penalty appeal was also set aside to the Commissioner (Appeals) for fresh disposal after decision in the quantum appeal.

Final Conclusion: The Tribunal held that the assessee had not been validly served with appellate notices in the manner opted by it and, therefore, had been denied a sufficient opportunity of hearing. The quantum appeal and the connected penalty appeal were accordingly restored to the Commissioner (Appeals) for fresh disposal.

Unexplained investment in immovable property - Dumb document relied upon -On-money payment

Addition for unexplained investment in purchase of immovable property solely on the basis of a seized loose sheet alleging on-money payment - HELD THAT: - The Tribunal found that the Assessing Officer had relied only on the contents of the seized loose sheet and had not brought any independent material on record to establish that the assessee had paid any amount over and above the consideration stated in the registered sale deed. It noted that, on the basis of the same seized document, additions made in the hands of the seller and of the co-purchaser had already been deleted, and those orders had been upheld by the Tribunal.

Tribunal further held that, once the seized paper had been treated as a dumb document in relation to the same transaction, it could not by itself be used to draw an adverse inference against the purchaser without corroborative evidence.

Relying on the principle in Paramjit Singh [2010 (2) TMI 262 - PUNJAB & HARYANA HIGH COURT] that the contents of a registered sale deed cannot be displaced by oral or hearsay material, and on Principal Commissioner of Income Tax (PCIT) vs. Tarun Kumar Goyal [2022 (8) TMI 1626 - TELANGANA HIGH COURT] that an addition based merely on an uncorroborated dumb document is unsustainable, the Tribunal upheld the deletion. [Paras 16, 17, 18, 19, 20]

The deletion of the addition was upheld, and the Revenue's challenge failed.

Final Conclusion: The Tribunal held that the impugned addition for unexplained investment could not rest on an uncorroborated seized loose sheet treated as a dumb document. The Revenue's appeal was dismissed and the assessee's cross-objection, supporting the relief granted by the CIT(A), was allowed.

Reassessment jurisdiction after dropping scrutiny proceedings on invalid return - Deemed service of reassessment notice by participation in proceedings - Unexplained money addition for redeposit of earlier cash withdrawals - Indexed cost of improvement on sale of house property - Penalty consequential to quantum addition u/s 270A and 271AAC(1)

Reassessment jurisdiction after dropping scrutiny proceedings on invalid return - Deemed service of reassessment notice by participation in proceedings - reassessment invalidity either on the ground that notice u/s 148 had been issued during pendency of earlier scrutiny proceedings or on the ground of non-service of such notice - HELD THAT: - The Tribunal held that the earlier proceedings initiated under section 143(2) had already been dropped pursuant to the CBDT communication directing that notices generated in respect of invalid returns for AY 2017-18 be dropped and such cases be reopened under section 148. Once those proceedings stood dropped, the plea of parallel proceedings could not survive. On the objection as to service of notice u/s 148, the Tribunal found that the assessee had participated in the reassessment proceedings without raising any objection, and therefore service stood protected by the deeming fiction u/s 292BB. [Paras 17, 18]

The challenge to the assumption of reassessment jurisdiction was rejected.

Unexplained money addition for redeposit of earlier cash withdrawals - HELD THAT: - The Tribunal treated the earlier cash withdrawals made shortly before the deposit as available to explain the redeposit in the same bank account. It held that the Assessing Officer's inference that a withdrawal of a non-round figure must have been for a specific expenditure or purpose was merely conjectural. In the absence of any material showing that the withdrawn amounts had in fact been used for investment or expenditure elsewhere, those withdrawals could not be disregarded while examining the source of the later deposit. [Paras 19]

The addition under section 69A in respect of the cash deposit of Rs. 10 lakhs was deleted.

Indexed cost of improvement on sale of house property - purchase deed showed a mud house and the sale deed showed an RCC house with larger covered area - HELD THAT: - The Tribunal found prima facie substance in the assessee's claim because the property purchased was described as a mud house with smaller built-up area, whereas the property sold was described as an RCC house with larger covered area, which supported the case that construction had been carried out in the intervening period. However, since only vernacular copies of the registered deeds had been placed on record, the matter required verification by the AO. The Tribunal therefore directed reconsideration of the claim, with a direction that if the claim of construction was found correct, the AO should determine the investment made towards such construction and allow indexed cost of improvement to that extent. [Paras 20]

The issue was set aside to the Assessing Officer for fresh verification and redetermination.

Penalty u/s 270A and 271AAC(1) consequential to quantum addition - HELD THAT: - The Tribunal noted that no independent submissions were made against the penalties and treated them as consequential to the quantum appeal. Since the addition relating to the demonetization-period cash deposit was deleted, the corresponding penalty u/s 271AAC(1) was vacated. Since the other unexplained money addition was upheld and no separate contention was raised, the corresponding penalty under section 271AAC(1) was sustained. As the long-term capital gains issue concerning cost of improvement had been set aside to the Assessing Officer, the penalty under section 270A founded on that determination was vacated, while leaving liberty to the Assessing Officer to initiate penalty proceedings afresh in the set-aside proceedings in accordance with law. [Paras 24, 25, 26, 27]

The penalty consequences were modified in line with the quantum order: one penalty under section 271AAC(1) was vacated, the other sustained, and the penalty under section 270A was vacated subject to liberty in the set-aside proceedings.

Final Conclusion: The Tribunal upheld the validity of the reassessment, deleted the addition relating to redeposit of earlier cash withdrawals, and remanded the claim for indexed cost of improvement for fresh verification. The penalty appeals were disposed of consequentially to the quantum findings, with corresponding relief granted in part.

Addition u/s 56(2)(x) on purchase of immovable property - Prior agreement and pre-registration payment through banking channel - Stamp duty value on date of agreement versus date of registration - purchase arrangement and payments were shown to relate to an earlier agreement and payments through cheques prior to registration - HELD THAT: - The Tribunal found that the property transaction had its origin in earlier arrangements, that possession had been taken earlier, that the sale consideration had been revised in 2009, and that the later registered deed covered the remaining consideration. It accepted the assessee's reliance on documents showing payments through cheques prior to 2019 and held that, although stamp duty was paid at the value prevailing on registration in accordance with revenue requirements, the actual purchase consideration was governed by the earlier agreement.

On that basis, the AO and the DRP had failed to take cognizance of the material showing the earlier agreement and prior payments, and were therefore not justified in invoking section 56(2)(x)(b)(B) by adopting the stamp duty value for making the addition. [Paras 7]

The addition under section 56(2)(x)(b)(B) was held unjustified and deleted.

Final Conclusion: The Tribunal allowed the assessee's appeal and held that the addition based on stamp duty value under section 56(2)(x)(b)(B) could not be sustained in view of the earlier agreement and the prior cheque payments reflected in the record.

Retrospective application of interim orders - Import clearance under BIS-free regime - Bills of lading issued prior to stay order - fair opportunity of verification - HELD THAT: - The Court found it undisputed that the rescission notification had created a lawful BIS-free regime, during which the petitioner had entered into concluded commercial transactions and, in respect of 53 containers, bills of lading had been issued before the interim order staying the rescission notification. The respondents were unable to controvert either those foundational facts or that the controversy stood covered by earlier decisions of this Court and the Supreme Court. In these circumstances, the customs authorities acted arbitrarily in giving retrospective effect to the interim order and in placing the cargo on hold by demanding BIS certification for consignments covered by bills of lading issued during the subsistence of the BIS-free regime. [Paras 13, 14, 15]

The withholding of clearance and insistence on BIS certification for such consignments was held unsustainable, and the writ petition was allowed in terms of the principal prayer.

Final Conclusion: The Court held that the respondents could not retrospectively apply the interim stay of the rescission notification to consignments whose commercial transactions had concluded during the BIS-free regime and, in the relevant cases, whose bills of lading had been issued before the stay order. The petition was accordingly allowed in terms of the substantive relief sought.

Burden of proof under Section 123 in town seizure of gold - Confiscation of gold alleged to be of foreign origin - Penalty consequential to confiscation of gold - Rebuttal of presumption - Smuggled goods - HELD THAT: - The Tribunal held that, although the carrier was not carrying documents at the time of interception, the ownership claim was subsequently supported by purchase register entries, purchase invoices, GST returns and job work challans produced in adjudication. Those materials showed that the impugned gold was in the appellants' stock and had been procured on payment of tax. The adjudicating authority had discarded those records, but the Tribunal found that they were required to be considered. In a town seizure case, where the gold had no foreign origin marking and documentary evidence of licit procurement was brought on record, the appellants had discharged their onus under Section 123. On that basis, the allegation that the gold was of foreign origin and smuggled was not sustainable. [Paras 10, 11, 12, 13]

The gold was held not liable to confiscation and was directed to be released to the appellants.

Penalty consequential to confiscation of gold - HELD THAT: - The Tribunal treated the penalties as consequential to the allegation of smuggled gold. Since the appellants had established licit procurement and the confiscation itself failed, no basis remained for sustaining penalties on any of the appellants. [Paras 14]

All penalties imposed on the appellants were set aside.

Final Conclusion: The Tribunal held that the appellants had discharged the burden cast upon them by producing records showing lawful procurement and movement of the gold, and that, in the absence of foreign markings in a town seizure case, confiscation was not justified. The confiscation and all penalties were therefore set aside, and release of the seized gold was directed.

Extended period of limitation - Finality of self-assessed Bills of Entry - Redemption fine when goods not available for confiscation - Penalty for short-levy based on suppression or wilful misstatement - Demand of differential customs duty - denial of concessional rate for battery haulers imported in CKD condition -

Extended period of limitation - Claim of notification benefit - Absence of suppression - HELD THAT: - The Tribunal held that the Show Cause Notice was issued beyond the normal period from the out-of-charge order and that the dispute related to availment of benefit under Notification No. 50/2017-Cus., which was a technical issue. Mere claiming of a notification benefit or alleged misclassification in the Bills of Entry did not, by itself, amount to wilful misstatement or suppression of facts. Since the Bills of Entry and invoices disclosed the imports as being in CKD condition and the relevant facts were within the Department's knowledge at the time of clearance, the conditions necessary for invoking the extended period were not established. [Paras 11]

The demand confirmed by invoking the extended period of limitation was held unsustainable and was set aside.

Finality of self-assessed Bills of Entry - Differential duty without appeal against assessment - HELD THAT: - The Tribunal held that self-assessment of a Bill of Entry is nonetheless an assessment order under the Customs Act and, if the Revenue is aggrieved by it, the proper course is to challenge that assessment before the competent appellate authority. In the present case, the goods were cleared for home consumption on self-assessment and the Department did not appeal against the assessed Bills of Entry. In the absence of such challenge, the Department could not reopen the assessment and sustain a demand for differential duty by issuing a Show Cause Notice. [Paras 12]

The impugned demand was also held unsustainable on the ground that the assessed Bills of Entry had not been challenged by the Revenue.

Redemption fine when goods not available for confiscation - HELD THAT: - The Tribunal held that redemption fine under Section 125 could not be sustained where the goods were not available for confiscation. Since the imported goods had already been cleared for home consumption, the foundational requirement for levy of redemption fine was absent. [Paras 13]

The redemption fine imposed in the impugned order was set aside.

Interest consequential to duty demand - Penalty for short-levy based on suppression or wilful misstatement - HELD THAT: - The Tribunal held that, with the principal customs duty demand having failed, no interest could be charged. It further held that penalty under Section 114A is attracted only where non-levy or short-levy is by reason of collusion, wilful misstatement or suppression of facts. In view of the findings that those ingredients were absent, the equivalent penalty could not be sustained. [Paras 14, 15]

The demands of interest and penalty were set aside.

Final Conclusion: The Tribunal set aside the impugned order in entirety. It held that the extended period was not invocable, the differential duty demand could not be sustained without challenging the assessed Bills of Entry, and the consequential redemption fine, interest and penalty were also unsustainable.

RSP-based countervailing duty - Transaction value for goods not intended for retail sale - Freight and insurance valuation on actual cost - Amendment of Bills of Entry - contemporaneous documents - Right to Use

Whether the authorities below have erroneously considered the RSP / MRP value for determination of the assessable value to demand Countervailing Duty (CVD) from the appellant, or not ? - Countervailing duty on imported digital projectors leased to cinema halls on Right to Use basis - HELD THAT: - The Tribunal found that the imported projectors were not intended for retail sale but were to be given on Right to Use basis under agreements with cinema hall owners. Since the basic condition for RSP-based assessment, namely the requirement to declare retail sale price on the package, was not satisfied, the goods could not be treated as goods meant for retail sale. Following UFO Moviez India Ltd. Vs. Commissioner of Customs (ACC & Imports), MumbaiI [2018 (4) TMI 923 - CESTAT MUMBAI], the Tribunal held that goods not intended for retail sale are liable to duty on transaction value and not on RSP. [Paras 12]

The enhancement of assessable value on RSP/MRP basis was held to be unsustainable and was set aside.

Freight valuation on actual cost - Notional freight at 20% of FOB - HELD THAT: - The Tribunal held that under Rule 10 of the Customs Valuation Rules, notional freight at 20% of FOB can be adopted only where actual freight is not available. As the appellant had paid freight on actual basis and the actual freight value was available, adoption of 20% of FOB for freight was contrary to the rule. [Paras 13]

The enhancement of freight by adopting 20% of FOB value was held unjustified and was set aside.

Insurance valuation on actual cost - Notional insurance at 1.125% of FOB - HELD THAT: - The Tribunal held that where the actual insurance cost is available on record, Rule 10 requires adoption of the actual amount paid. In such a situation, enhancement by applying 1.125% of FOB value is not permissible. [Paras 14]

The enhancement of insurance value by adopting 1.125% of FOB value was held incorrect and was set aside; consequentially, amendment of the Bills of Entry under Section 149 was allowed.

Final Conclusion: The Tribunal held that the imported projectors, being intended for lease and not for retail sale, were assessable to duty on transaction value and not on RSP basis. It further held that actual freight and insurance costs had to be adopted where available on record, and consequently allowed amendment of the Bills of Entry with consequential relief.

Principles of natural justice - Ex parte adjudication without proper service - Service of notice at incorrect address- opportunity of hearing -HELD THAT: - The Court found it undisputed that the impugned order had been passed ex parte and that the petitioner was unrepresented on the date of hearing. Since the petitioner asserted that the change of address had been intimated in its reply and the question whether notice had been served at the correct address went to the root of the matter, the Court held that fairness required a fresh opportunity of hearing. On that basis, the order was treated as vitiated by want of proper service and non-observance of natural justice. [Paras 12, 13, 14, 15]

The impugned order was quashed, and the authority was directed to reconsider the petitioner's reply afresh by passing a reasoned order after granting an opportunity of hearing.

Final Conclusion: The writ petition was disposed of by setting aside the ex parte adjudication order on the ground that the issue of proper service at the correct address went to the root of the matter. The competent authority was directed to undertake fresh adjudication after giving the petitioner an opportunity of hearing.

CENVAT credit on tippers as capital goods - Eligibility of credit on goods received before statutory inclusion but put to use thereafter - Extended period of limitation for disclosed credit - Suppression of facts - Substantive benefit - Procedural infractions - Penalty under Section 78 of the Finance Act, 1994 - Benefit ofNotification No. 25/2010-C.E.(N.T.) - Statutory ST-3 returns

CENVAT credit on tippers - Capital goods used for output service - Credit eligibility on post-inclusion use - HELD THAT: - Eligibility towards CENVAT Credit in respect of Tippers/Dumpers purchased prior to the inclusion of the same in the definition of “capital goods’ w.e.f. 22.06.2010 has already been decided by the CESTAT at Hyderabad in the case of M/s. Vijay Mining & Infra Corp Pvt. Ltd. v. Commissioner of Central Tax, Hyderabad [2024 (3) TMI 642 - CESTAT HYDERABAD] and thus, the issue is no longer res integra.

The Tribunal found that though the tippers were received in February and March 2010 and credit was entered in the books at that stage, the vehicles could not be put to use without registration and were in fact registered only after 22.06.2010. It was also admitted that the disputed credit was not utilized prior to that date and that only 50% of the credit was utilized during the financial year of receipt in terms of the CENVAT Credit Rules. On these facts, the Tribunal held that eligibility had to be considered when the vehicles were put to use for rendering the output service, and since such use commenced only after tippers became eligible capital goods, denial of credit on the sole ground of prior receipt was not justified. The Tribunal also noted that CENVAT credit, being a substantial benefit, could not be denied on technical or procedural grounds when duty-paid tippers were admittedly used for the taxable output service. [Paras 9, 10]

The disallowance of CENVAT credit on the tippers was unsustainable.

Extended limitation - Disclosure in ST-3 returns - Absence of suppression of facts - HELD THAT: - The Tribunal held that the availment of credit stood disclosed in the statutory ST-3 returns and was therefore within the Department's knowledge. It further found that the very issue had been examined during departmental audit, summons had been issued, statements were recorded, and the show cause notice itself arose from audit scrutiny of the appellant's regular books and invoices. In such circumstances, the essential ingredients of fraud, collusion, wilful misstatement or suppression with intent to evade duty were absent. The Tribunal therefore held that the extended period could not be invoked and, since the entire demand had been raised by resort to that extended period, the demand was liable to be set aside on limitation as well. [Paras 11]

Invocation of the extended period was invalid, and the entire demand was barred by limitation.

Final Conclusion: The Tribunal held that CENVAT credit on the tippers was rightly availed and could not be denied merely because the vehicles had been received before their express inclusion as capital goods, since they were registered, put to use and the credit was utilized only thereafter. It further held that the extended period was not invocable in view of full disclosure and prior departmental audit, and consequently set aside the demand, interest and penalty under Section 78.

Transfer of right to use goods - Deemed sale of hired equipment - Supply of tangible goods service - Mutual exclusivity of VAT and service tax - Effective control and possession - Liability to pay Sales Tax/VAT by the appellant for the activity to provide different categories of motor vehicles, such as, trucks, trailers, tankers, buses, scrapping winch chassis and cranes to ONGC - HELD THAT: - The Tribunal held that the Revenue's reliance on K.P. Mozika v. Oil and Natural Gas Corporation Ltd.[2024 (1) TMI 443 - SUPREME COURT] was misplaced because, in that case, the contractor retained full control over the vehicles, whereas in the present case the agreements showed transfer of both possession and effective control to the customers. Following its earlier decision in Gainwell Commosales [2025 (8) TMI 931 - CESTAT KOLKATA], the Tribunal treated the determinative test as whether there was transfer of right of possession and transfer of effective control. On the admitted facts, the equipment was placed under the customers' possession and control and VAT had been paid on the transactions. The transaction, therefore, answered the description of a deemed sale and fell outside the scope of service tax on supply of tangible goods. [Paras 6, 7, 8, 9]

The appellant was held not liable to service tax, and the service tax demand was set aside.

Final Conclusion: The Tribunal held that the equipment hire transactions involved transfer of possession and effective control to the customers and therefore amounted to deemed sale on which VAT had been paid. The demand of service tax and the consequential penalty were accordingly set aside and the appeal was allowed.

Principal-to-principal freight forwarding transactions- Pure Agent - Export of service -Taxability of ocean freight and air freight under business support service - HELD THAT: - The Tribunal held that the controversy stood covered by the Board Circular clarifying that where a freight forwarder acts on its own account, negotiates freight with carriers and customers, and bears the legal responsibility and attendant risks of transportation, it is providing transportation on a principal basis and is not merely rendering an intermediary or support service. Relying on the decision in the appellant's own case and on Geodis Overseas Pvt. Ltd.[2022 (6) TMI 1085 - CESTAT CHENNAI], the Tribunal accepted that procurement of cargo space from shipping lines or airlines and allotment of such space to customers at negotiated rates constitute independent principal-to-principal transactions. The amount recovered from customers towards ocean freight or air freight, therefore, could not be included in the assessable value as consideration for business support service. [Paras 9, 10, 11]

The demand of Service Tax on ocean freight and air freight under business support service was unsustainable and the impugned order was set aside.

Final Conclusion: The Tribunal held that the freight amounts collected by the appellant from customers in principal-to-principal freight forwarding transactions were not taxable as business support service. The impugned order confirming tax, interest and penalties was therefore set aside and the appeal was allowed.

Freight share -Revenue sharing under participative railway infrastructure model - Business support service - Joint venture and absence of service provider-service recipient relationship - Extended limitation and suppression

Revenue sharing arrangement - Participative railway infrastructure model - Absence of quid pro quo - Joint venture - Receipts described as user fee under the arrangement for construction and maintenance of the railway line between Bhadrak and Dhamra Port - HELD THAT: - The Tribunal held that, on a harmonious reading of the agreement, the appellant stepped into the shoes of the Railways for execution of the project and the arrangement was one of revenue sharing, under which freight was realized by the Railways and 95% thereof was allocated to the appellant. That allocation represented return of the appellant's capital investment with profit and not consideration for infrastructural support service. The Tribunal further found no service provider-service recipient relationship between the appellant and the Railways, but an arrangement akin to partnership or joint venture, where one party created the infrastructure and the other operated it and shared the revenue. In the absence of a direct quid pro quo for any identified service, the activity could not be taxed as business support service. The Tribunal applied the reasoning in Mormugao Port Trust [2016 (11) TMI 520 - CESTAT MUMBAI], Bharuch Dahej Railway Company Ltd. [2019 (4) TMI 26 - CESTAT NEW DELHI], Konkan Railway Corporation Ltd. [2023 (6) TMI 1001 - CESTAT MUMBAI], Mundra Port & Special Economic Zone Ltd. [2011 (9) TMI 93 - CESTAT, AHMEDABAD] and INOX Leisure Ltd.[2021 (10) TMI 893 - CESTAT HYDERABAD]. [Paras 12, 13, 14, 15, 16]

The demand on the footing that the appellant provided business support service to the Railways was not sustainable on merits.

Extended limitation - Suppression of facts - Bona fide belief -HELD THAT: - The Tribunal found that the appellant entertained a bona fide belief that no service tax was payable under the joint venture arrangement, and that such belief stood fortified by Tribunal decisions on similar transactions. On that basis, it held that no case of suppression had been made out against the appellant. Consequently, the proviso enabling the larger period could not be invoked. [Paras 16, 17]

The confirmed demand for the extended period was barred by limitation.

Final Conclusion: The Tribunal held that the appellant's share of freight received as user fee under the participative railway infrastructure arrangement was a revenue-sharing return on investment under a joint venture-like arrangement, and not consideration for business support service. The appeal was accordingly allowed on merits, and the extended period demand was also held unsustainable for want of suppression.

Manufacture vis-a-vis business support service - Service taxability of processing activity undertaken on piece-rate basis - Exclusion of manufacture from service tax - Activity of packing, re-packing, labelling and allied processing undertaken for GCPL on a piece-rate basis - Whether the activity undertaken by the appellant amounts to manufacture or can be said to be a “service” as per Finance Act, 1994 ? - HELD THAT: - The Tribunal treated the controversy as confined to the character of the activity undertaken by the appellant. Relying on its earlier decision in M/s. Winsor Fashion Private Limited and M/s. Neo Plast Private Limited v. CCE & ST, Guwahati [2024 (3) TMI 238 - CESTAT KOLKATA], it held that where the processor undertakes the manufacturing activity by employing its own labour and raises charges on a per-piece basis, the activity is one of manufacture and not merely support service. The fact that the principal supplied raw materials and machinery, and that excise duty stood discharged on the cleared goods, did not convert the appellant's role into one of providing business support service. Since the activity itself amounted to manufacture, no service tax could be demanded under the Finance Act, 1994. [Paras 5, 6, 7, 8]

The demand of service tax, interest and penalties was unsustainable and was set aside.

Final Conclusion: Following its earlier decision on identical arrangements, the Tribunal held that the appellant's activity was manufacture and not business support service. The impugned demand of service tax with interest and penalties was therefore set aside and the appeal was allowed.

Service of adjudication order on authorised representative - Limitation for appeal before Commissioner (Appeals) - Deemed service under section 37C - Condonation of marginal delay - Opportunity of hearing - Principles of natural justice - HELD THAT: - The Tribunal found that, although the department relied on acknowledgment by Advocate Kuldeep Jalan, there was nothing on record to establish that he had been authorised by the appellant to receive the adjudication order. The record instead showed appearance before the original authority by another authorised representative. The adjudication order sent by post had been returned undelivered, and the statutory requirements of deemed service under section 37C, read with section 83 of the Finance Act, 1994, were not complied with, since affixation in the manner required by the statute was not shown. The Tribunal therefore held that the order had not been validly served earlier, accepted the appellant's stated date of receipt through its C.A. as the relevant date for limitation, and found that the appeal before the Commissioner (Appeals) was delayed only by two days. In the circumstances, and in the interest of natural justice, that marginal delay was treated as condonable and the matter was remanded for decision on merits. [Paras 9, 10, 11, 12]

The order dismissing the appeal as time-barred was set aside; the two-day delay was treated as condoned and the matter was remanded to the Commissioner (Appeals) for fresh decision on merits after giving reasonable opportunity of hearing.

Final Conclusion: The Tribunal held that there was no valid prior service of the adjudication order on the appellant through the advocate relied upon by the department, and that the statutory requirements for deemed service had not been met. Treating the appeal before the Commissioner (Appeals) as delayed only by two days from the actual date of receipt, it condoned that delay and remanded the matter for decision on merits.

Refund of unutilized Cenvat creditfor exported output services - Export of marketing support services - Scope of show-cause notice - Recovery of irregular Cenvat credit - accumulated Cenvat credit - Refund of unutilized Cenvat credit on marketing support services exported to the parent company - Bnefit of Notification No. 5/2006-C.E. (N.T.) - HELD THAT: - The Tribunal held that the dispute regarding export of the appellant's services was no longer res integra and stood covered by earlier decisions, including Qualcomm India Pvt. Ltd. Versus Commr. of Cus., C. EX. & S.T., Hyderabad-IV [2019 (8) TMI 1645 - CESTAT HYDERABAD]. This decision was upheld by the Hon’ble Telangana High Court [2021 (11) TMI 72 - TELANGANA HIGH COURT], wherein Revenue appeals were dismissed.. It further held that the department had never issued any notice under Rule 14 of the Cenvat Credit Rules, 2004 to deny or recover the Cenvat credit availed. In the absence of such proceedings, rejection of the refund claim by questioning the admissibility of the credit or the export character of the output service was beyond the scope of the show-cause notice and could not be sustained in refund proceedings under Rule 5. [Paras 5, 6]

The rejection of refund was unsustainable and the appellant was held entitled to the refund claimed, subject to consequential relief in accordance with law.

Final Conclusion: The Tribunal held that the appellant's refund claim under Rule 5 could not be rejected by disputing the export character of the services or the admissibility of credit in the absence of proceedings to deny such credit. The impugned order was set aside and the appeals were allowed with consequential relief according to law.

Effect of omission as repeal - Survival of proceedings in absence of saving clause - Jurisdiction to continue recovery under omitted excise provisions -Proceedings and recovery initiated under Section 3A read with Rule 96ZQ - Recovery under omitted compounded levy provisions - Principles of Statutory Interpretation - Expressions “delete”, “omit”, and “repeal” - HELD THAT: - The Court held that the controversy stood concluded by Krishna Processors Vs. Union of India [2012 (11) TMI 954 - GUJARAT HIGH COURT], as affirmed in Shree Bhagwati Steel Rolling Mills Vs. Commissioner of Central Excise [2015 (11) TMI 1172 - SUPREME COURT]. It accepted that after omission of Rule 96ZQ with effect from 01.03.2001 and omission of Section 3A with effect from 11.05.2001, no proceedings could be initiated thereunder and no pending proceedings not already concluded could be continued in the absence of a saving clause.

The Hon’ble Apex Court after considering the effect of the decision in case of M/s. Fibre Boards (P) Ltd. Bangalore Vs. Commissioner of Income Tax, Bangalore [2015 (8) TMI 482 - SUPREME COURT],wherein, it is held that, an “omission” would amount to a “repeal” after referring to several authorities of the Hon’ble Apex Court and G.P. Singh’s Principles of Statutory Interpretation, Section 6A of the General Clauses Act, 1897 and a passage in Halsbury’s Laws of England, arrived at the conclusion that “omission” would amount to a “repeal” for the purpose of Section 24 of the General Clauses Act and since the same expression namely “repeal” is used both in Section 6 and Section 24 of the General Clauses of the Act, the construction of the said expression in both the sections would therefore include within it “omissions” made by the legislature.

The Court further accepted the principle stated by the Supreme Court that an omission amounts to a form of repeal. Since neither Section 3A nor the relevant rule remained on the statute book when the appellate and recovery orders were passed, the authorities lacked jurisdiction to continue the demand and recovery under those omitted provisions. [Paras 8, 12, 14]

The impugned show cause notice, appellate orders and recovery action founded on Section 3A read with Rule 96ZQ were quashed as being without jurisdiction.

Final Conclusion: The petition was allowed. The Court held that, after omission of Rule 96ZQ and Section 3A without any saving clause, the authorities had no jurisdiction to initiate or continue proceedings or recovery thereunder, and the impugned notice and consequential orders were therefore quashed.

Unjust enrichment in refund of excess duty on inter-governmental captive supplies - Refund limitation in absence of provisional assessment - Valuation on cost of production under CAS-4 - Correlation of refund claims with batch-costing records - Refund claims barred by limitation under Section 11B - effect of non-adoption of provisional assessment under Rule 7

Unjust enrichment - Rebuttal of statutory presumption - Excess duty arising from post-clearance cost finalization - Refund of excess duty paid on railway coaches cleared on estimated cost - HELD THAT: - The Tribunal held that the excess duty arose solely because duty had initially been paid on estimated cost and the actual batch cost, on finalization, turned out to be lower. The coaches were supplied by the appellant, a production unit under the Ministry of Railways, to Indian Railways for use as rolling stock and not sold as marketable goods to independent buyers. In the absence of any material from the Revenue showing that the excess duty incidence had been passed on or that any commercial gain had been derived, the appellant was held to have rebutted the presumption under Section 12B. The Tribunal followed the decision in the appellant's own case [2019 (12) TMI 279 - CESTAT CHENNAI] and the Madras High Court decision in Sescot Sheet Metal Works Ltd. [2015 (4) TMI 386 - MADRAS HIGH COURT]. [Paras 8, 9, 10, 11]

Rejection of refund on the ground of unjust enrichment was set aside.

Final assessment in absence of provisional assessment - Refund under Section 11B subject to limitation - Relevant date for refund of excess duty - HELD THAT: - The Tribunal held that, since the appellant had not invoked the statutory mechanism of provisional assessment, the assessments made at the time of removal had to be treated as final. In such a case, no legal basis existed to treat the later date of finalization of actual cost as the relevant date for refund. The substantive entitlement to seek refund was not extinguished by failure to adopt provisional assessment, but the consequence was that the claim could be pursued only under Section 11B, with the prescribed one-year limitation. Acceptance by the Department of differential duty when actual cost exceeded estimated cost did not convert the assessments into provisional assessments in law. [Paras 15, 16, 17, 18, 19]

Refund claims filed within the statutory period were held admissible subject to verification, while claims filed beyond that period were held time-barred.

Correlation of invoices with batch-cost records - Verification of refund quantification - Batch-costing methodology - HELD THAT: - The Tribunal held that the Department could not reject the refund methodology outright after having accepted the same batch-costing system for determination and recovery of differential duty when actual cost was higher. At the same time, the appellant remained bound to establish the nexus between the clearances, the relevant batch-cost records and the excess duty claimed by producing cost sheets, production records, batch-wise or coach-wise statements, dispatch particulars and other contemporaneous material. The absence of batch numbers on invoices could justify detailed scrutiny, but not denial of refund where correlation could otherwise be established from reliable records. [Paras 20, 21]

Refund was directed not to be denied merely for want of batch numbers on invoices, and the matter was remanded for verification of correlation and quantification.

Cost of production under Rule 8 - CAS-4 valuation standard - Internal departmental code versus statutory valuation rules - HELD THAT: - The Tribunal held that valuation under Rule 8 is governed by the statutory requirement of determination on the basis of cost of production, for which CAS-4 is the accepted costing standard in excise valuation. Internal costing, budgeting or accounting procedures under the Indian Railway Code could not override the valuation framework prescribed under the Central Excise law. Since excise duty is a fiscal levy, assessable value had necessarily to be determined in accordance with the statutory valuation rules. [Paras 23, 24, 25]

Valuation under Rule 8 was held to be determinable on CAS-4 basis and not on the basis of Chapter 13 of the Indian Railway Code.

Final Conclusion: The Tribunal held that the refund claims were not hit by unjust enrichment, but in the absence of provisional assessment they were maintainable only under Section 11B and subject to its limitation. The impugned order was modified, valuation was directed to be governed by CAS-4, denial of refund solely for absence of batch numbers on invoices was disapproved, and the matter was remanded for limited verification of limitation, correlation, quantification and consequential admissible refund; the denial relating to spares was left undisturbed.

Departmental exoneration and criminal prosecution - Discharge at charge stage - Distinct scope of adjudication and criminal trial - Abuse of process of law - Prima facie case - Entitlement to discharge on the ground that they had been exonerated in departmental proceedings concerning excise duty and VAT evasion - HELD THAT: - The Court held that the departmental proceedings were confined to the validity of the notices alleging evasion of excise duty and VAT, whereas the criminal case was founded on investigation into conspiracy with excise officials, forgery of transport and trading documents, and cheating. The adjudicating authority had not found the allegations to be false on merits, but had dropped the notices for want of legal, tangible and concrete evidence produced before it.

It is contention of learned SPP that the respondent CBI was not a party before the adjudicating authority or appellate authority. Whereas, it is contention of learned senior counsel for the applicants that in the notices, the allegations against the applicants were about evasion of excise duty and VAT and they have been exonerated from the said allegations. Hence, the prosecution cannot subject them to trial for the same allegations.

The evidence collected by the CBI during investigation, including bogus bills, forged transport bills and witness statements, was not before the adjudicating authority, and the CBI was not a party to those proceedings. Since the scope, authorities and evidentiary framework in adjudication and criminal prosecution were materially different, the departmental exoneration did not bar continuation of the prosecution. On the material in the charge-sheet, a prima facie case was disclosed and it could not be said at the threshold that the charges were groundless. [Paras 7, 9]

The rejection of the discharge application was upheld and the criminal revision was dismissed.

Final Conclusion: The Court held that the departmental exoneration in excise and VAT proceedings did not preclude the criminal prosecution, since the adjudication and the criminal case operated in different fields and the criminal charge-sheet was supported by separate investigative material disclosing a prima facie case of conspiracy, cheating and forgery. The revision against rejection of discharge was therefore dismissed.

Quashing of criminal proceedings - Prima facie disclosure of cognizable offence - Special fiscal statute and parallel penal prosecution - Bogus bills - Abuse of Process - Sufficiency, admissibility and evidentiary value - Inherent Jurisdiction - non-payment or short payment of tax - Challenged to the FIR, charge-sheet, cognizance order and charge-framing order on the ground that the matter was essentially a VAT dispute - Violations under the provisions of the Chhattisgarh Value Added Tax Act, 2005 - Applicability of the Chhattisgarh Value Added Tax Act - HELD THAT: - The legal position on the issue of quashing of criminal proceedings is well-settled that the jurisdiction to quash a complaint, FIR or a charge-sheet should be exercised sparingly and only in exceptional cases and Courts should not ordinarily interfere with the investigations of cognizable offences. However, where the allegations made in the FIR or the complaint even if taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused, the FIR or the charge-sheet may be quashed in exercise of powers under Article 226 Or inherent powers under Section 482 of the Cr.P.C. (now 528 of the B.N.S.S.).

The Court held that in proceedings under Section 528 of the BNSS it is only required to see whether the allegations in the FIR and the material collected during investigation, taken at face value, disclose commission of cognizable offences. On that test, the prosecution material, including departmental records, returns, software-generated data, bank account details and witness statements, furnished a prima facie basis for proceeding against the petitioner. The contention that the dispute was governed exclusively by the Chhattisgarh Value Added Tax Act was not accepted, since the existence of remedies under a special fiscal statute does not by itself bar prosecution under the penal law where the allegations extend beyond mere tax deficiency and disclose elements of deception and fraudulent conduct. The Court further held that the absence of reassessment proceedings, the plea regarding sanction, the reliance on witness statements said to exonerate the petitioner, the allegation that another person was the main offender, and the assertion that the tax liability had been discharged, all involved disputed questions of fact or mixed questions of law and fact which could not be examined in quashing jurisdiction. The plea of delay in filing the charge-sheet was also held insufficient for quashing, particularly when the prosecution explanation was recorded and the materials collected still disclosed a prima facie case. [Paras 28, 29, 30, 31, 32]

No case for exercise of inherent jurisdiction was made out, and the criminal prosecution was permitted to proceed to trial.

Final Conclusion: The petition for quashing was dismissed. The Court held that the FIR, charge-sheet and material collected during investigation disclosed a prima facie case, and the petitioner's objections founded on the VAT enactment, alleged procedural lapses, delay and defence material were matters for trial and not for determination in inherent jurisdiction.

Territorial jurisdiction under Article 226(1) - Forum non conveniens in writ jurisdiction - Challenged to dismissal from BSF service -Maintainability of appeal against dismissal of review petition -Cause of action - Situs of office - Access to justice

Whether the Delhi High Court was right in refusing to entertain, try and adjudicate the writ petition of the appellant on the ground of forum non conveniens ? - HELD THAT: - The Court held that, for a challenge to an administrative order of termination issued to a member of the CAPF, the Delhi High Court would have territorial jurisdiction under Article 226(1) because the offices of the Union of India and the Director General, BSF, who are necessary parties in such proceedings, are situated in Delhi. Reading Abrar Ali with Shri Ranjeet Mal and the statutory scheme of the BSF Act and Rules, the Court found no difficulty in holding that the Delhi High Court was competent to entertain and try the writ petition. It further held that the doctrine of forum non conveniens, though available where multiple fora exist, was misapplied in the present writ proceeding. Where invocation of writ jurisdiction is traceable to Article 226(1), particularly in a certiorari challenge, records would ordinarily be available with or obtainable through the respondents' offices, and a litigant having chosen a forum convenient to the respondents ought not ordinarily to be denied access to that constitutional remedy on that ground. [Paras 35, 36, 37, 38, 40]

The impugned order declining to entertain the writ petition on the ground of forum non conveniens was set aside, and the writ petition was restored to the file of the Delhi High Court for decision on merits.

Maintainability of appeal against dismissal of review petition - HELD THAT: - The Court expressly held that no appeal lies against dismissal of a review petition and, on that ground alone, declined to entertain the appeal insofar as it questioned the order rejecting review. [Paras 39]

The appeal against the order dismissing the review petition was dismissed as not maintainable.

Final Conclusion: The Supreme Court held that the Delhi High Court was competent under Article 226(1) to entertain the appellant's writ petition and that the doctrine of forum non conveniens had been wrongly invoked to decline such jurisdiction. The appeal against the impugned order was allowed and the writ petition restored for decision on merits, while the challenge to dismissal of the review petition was rejected as not maintainable.

Dishonour of Cheque - Revisional jurisdiction against concurrent conviction - Rebuttable presumption under Sections 118(a) and 139 - Security cheque defence - Legally enforceable debt - cash loan and non-disclosure in income tax return - principles governing compensation - Presumption of consideration - Compensatory and restitutive object - No interference in concurrent findings

Revisional jurisdiction against concurrent conviction - Reappreciation of evidence in revision - HELD THAT: - Relying on the settled limits of revisional power from the judgment of Kishan Rao v. Shankargouda [2018 (7) TMI 101 - SUPREME COURT] reiterated in Bir Singh v. Mukesh Kumar [2019 (2) TMI 547 - SUPREME COURT], the Court held that a criminal revision is not a second appeal and interference is confined to correcting patent defects, jurisdictional error, perversity, or findings based on no evidence. Since the challenge was directed mainly to appreciation of evidence by the Trial Court and the Appellate Court, and no such infirmity was shown, the matter had to be examined within that narrow revisional framework. [Paras 17]

The concurrent findings were not open to interference merely because the accused sought a different appreciation of the evidence.

Presumption under Sections 118(a) and 139 of the Negotiable Instruments Act - Security cheque defence - Legally enforceable debt notwithstanding cash loan and non-disclosure in income tax return - HELD THAT: - In Sumeti Vij v. Paramount Tech Fab Industries [2021 (3) TMI 383 - SUPREME COURT], that the accused has to lead defence evidence to rebut the presumption and mere denial in his statement under section 313 is not sufficient to rebut the presumption.

The Hon’ble Supreme Court in Mandvi Cooperative Bank Ltd. v. Nimesh B. Thakore, [2010 (1) TMI 570 - SUPREME COURT]that the memo issued by the Bank is presumed to be correct, and the burden is upon the accused to rebut the presumption.

The Court found that the accused had admitted issuance of the cheque and did not dispute dishonour for insufficient funds or receipt of the demand notice. Once execution of the cheque stood admitted, presumptions under Sections 118(a) and 139 arose that the cheque had been issued for consideration and in discharge of a legally enforceable liability, and the burden shifted to the accused. The plea that the cheque was only a security cheque for a smaller loan was unsupported, as the accused led no defence evidence and mere denial in the statement under Section 313 CrPC was held insufficient to rebut the statutory presumption. The Court further held that non-production of the complainant's income tax return did not by itself discredit the transaction, and alleged contravention of Section 269SS of the Income-tax Act would at the highest attract statutory penalty and would not render the loan transaction void or unenforceable. It also held that absence of independent documentation or witnesses to the loan did not defeat the complaint once the statutory presumptions operated and remained unrebutted. On the admitted dishonour and admitted receipt of notice, coupled with non-payment thereafter, the ingredients of the offence under Section 138 stood proved. [Paras 32, 33, 34, 35, 36]

The defence of security cheque and the objections founded on cash payment, non-disclosure in income tax return, and absence of supporting documents were rejected, and the conviction was affirmed.

Compensation in cheque dishonour cases - Sentencing under Section 138 of the Negotiable Instruments Act -HELD THAT: - Hon’ble Supreme Court in Kalamani Tex v. P. Balasubramanian [2021 (2) TMI 505 - SUPREME COURT], that the Courts should uniformly levy a fine up to twice the cheque amount along with simple interest at the rate of 9% per annum.

The Court held that the sentence of six months' simple imprisonment was not excessive, having regard to the deterrent object of Section 138. As regards compensation, it held that the complainant had been kept out of the cheque amount for a long period and was entitled to restitution. Referring to the principles governing compensation in cheque dishonour matters and the power under Section 357(3) CrPC, the Court held that the Trial Court was competent to award compensation even where fine was not imposed, and the amount awarded could not be termed excessive in the circumstances. [Paras 38, 39, 40, 41, 42]

No interference was warranted either with the sentence of imprisonment or with the compensation awarded.

Final Conclusion: The revision was dismissed. The High Court held that no ground for interference with the concurrent conviction under Section 138 of the Negotiable Instruments Act, the sentence of imprisonment, or the compensation awarded had been made out.