TaxTMI Updates e-Newsletter
Jun 22,2019

Pure services - exempted services under Notification No.12/2017-Central Tax (Rate) dated 28-06-2017 - functions entrusted under Article 243W (Twelfth Schedule) of the Constitution - protection of environment - fire services - composite supply (goods constituting not more than 25% of value)

Pure services - exempted services under Notification No.12/2017-Central Tax (Rate) dated 28-06-2017 - functions entrusted under Article 243W (Twelfth Schedule) of the Constitution - protection of environment - fire services - Whether the applicant's labour services for setting up fire lines, plantation, rill/river maintenance and clearing truck paths in forests are exempt under Notification No.12/2017-Central Tax (Rate) dated 28-06-2017. - HELD THAT: - The Authority found that the services rendered are "pure services" performed directly for the State (Kerala Forest Department) and do not involve supply of goods. Notification No.12/2017 exempts pure services provided to Governmental authorities by way of any activity in relation to functions entrusted to a Municipality under Article 243W (Twelfth Schedule). The Twelfth Schedule expressly includes items such as fire services and urban forestry/protection of the environment, which encompass activities relating to fire prevention, tree plantation and related forest protection and maintenance works. Applying that description, the labour services for setting up fire lines, plantation, river/rill maintenance and clearing truck paths in forests fall within the scope of those functions and thereby attract the exemption under Sl. No. 3 of Notification No.12/2017-Central Tax (Rate).

The described labour services are exempt under Sl. No. 3 of Notification No.12/2017-Central Tax (Rate) dated 28-06-2017.

Final Conclusion: Advance ruling: the applicant's labour services for fire-line creation, plantation, rill/river maintenance and clearing truck paths in forests are pure services falling within the functions listed in the Twelfth Schedule (Article 243W) and are therefore exempt under Sl. No. 3 of Notification No.12/2017-Central Tax (Rate).

Advance ruling jurisdiction under Section 97(2) of the CGST Act - place of supply - export of services - zero-rated supply - statutory limitation of jurisdiction of Advance Ruling Authority

Advance ruling jurisdiction under Section 97(2) of the CGST Act - place of supply - export of services - Authority lacks jurisdiction to determine the place of supply and therefore cannot rule on whether the services supplied by the India branch qualify as export of services. - HELD THAT: - The applicant sought an advance ruling on whether services provided by the India branch to customers located outside India would be liable to GST, i.e., whether such supplies qualify as 'export of services'. Determination of 'export of services' necessarily requires adjudication of the place of supply. The list of questions on which an advance ruling may be given is contained in Section 97(2) of the Central and State GST Acts. The determination of 'place of supply' is not included in that statutory list. The Advance Ruling Authority is a creature of statute and must act within the bounds conferred by the Act. Since the question raised centrally involves determination of the place of supply, which is not a matter enumerated in Section 97(2), the Authority is without jurisdiction to decide the issue and is therefore unable to answer the application on its merits.

Application cannot be adjudicated by this Authority for want of jurisdiction to determine place of supply; the question whether the services constitute export of services is not answerable by the Authority.

Final Conclusion: The application is declined for lack of jurisdiction: the Advance Ruling Authority cannot determine the place of supply and therefore cannot rule on whether the services qualify as export of services or are zero-rated.

Place of supply - imported goods treated as inter-state supply - location of the importer - registration liability under Section 22 - IGST payable at import/clearance - use of head office GSTIN for invoicing and e-way bill

Place of supply - location of the importer - registration liability under Section 22 - imported goods treated as inter-state supply - Whether the applicant is required to obtain separate GST registration in the State of Odisha for goods imported at Paradip Port and sold from the customs warehouse when the applicant has no establishment in Odisha. - HELD THAT: - The Authority found that supplies of goods imported into India are treated as inter-state supplies and that the place of supply for imported goods is the location of the importer. The applicant is registered in Mumbai, will complete import clearance and pay IGST in the name of its Mumbai registration, and has no establishment, place of business or godown in Odisha other than storage in a rented customs warehouse (ex-bond). Applying the principle that registration is required in the State or UT from where a supplier makes taxable supplies, the Authority concluded that the place from which the applicant makes taxable supplies in these transactions is the Mumbai head office. Consequently, separate registration in Odisha is not required for the described transactions.

No separate registration in the State of Odisha is required for the described import and sale transactions; the place of supply is the Mumbai head office and the applicant may clear and invoice using its Mumbai GST registration.

Use of head office GSTIN for invoicing and e-way bill - IGST payable at import/clearance - place of supply - Whether the applicant may raise invoices from the Mumbai GSTIN and mention the Mumbai GSTIN in the e-way bill while showing the dispatch place as Paradip Port, Odisha. - HELD THAT: - Given the Authority's determination that the place of supply is the location of the Mumbai-registered importer and that IGST will be paid at the time of customs clearance in the name of the Mumbai registration, the Authority held that subsequent transactions may be effected using the Mumbai head office GSTIN. As a corollary, it is permissible to mention the Mumbai GSTIN in invoices and e-way bills while recording the dispatch place as the customs warehouse at Paradip Port, Odisha, subject to compliance with applicable tax payment and procedural requirements.

The applicant may transact on the Mumbai head office GSTIN and may mention the Mumbai GSTIN in the e-way bill with dispatch place recorded as Paradip Port (customs warehouse).

Final Conclusion: The Authority answered both questions in the affirmative: no separate Odisha registration is required for the transactions described, and invoicing/e-way bill formalities may be completed using the Mumbai head office GSTIN with the dispatch place shown as Paradip Port, subject to applicable tax payment and compliance.

Place of supply - imported goods treated as inter state supply - location of the importer - liability to register in the State from which taxable supplies are made - IGST on inter state supplies - registration under Chapter VI

Place of supply - location of the importer - liability to register in the State from which taxable supplies are made - imported goods treated as inter state supply - Applicant is required to obtain registration in each State separately or not, having regard to import of goods at various ports and subsequent storage and sale from Head Office in Maharashtra. - HELD THAT: - The Authority examined the facts that the applicant imports coal into India, that the importer is registered and located at the Head Office in Mumbai, and that the commercial documentation (agreements, letters of credit, commercial invoice, bill of lading) point to the Mumbai Registered Office. Applying the statutory scheme, supplies imported into India are to be treated as supplies in the course of inter state trade (IGST Act, Chapter on inter state supplies) and for imports the place of supply is the location of the importer. Registration liability under Chapter VI is determined by the State 'from' which a supplier makes taxable supplies. On the facts presented the place from which the applicant makes taxable supplies is the Mumbai Head Office and the applicant will clear goods by payment of IGST from its Mumbai GSTIN. Consequently, the Authority concluded that, on the basis of the facts before it, separate registrations in other States are not required.

On the facts of the case, separate registration in each State is not required.

IGST on inter state supplies - place of supply - E way bill and dispatch place - Whether the applicant can raise invoices from Mumbai Head Office for imports received at various ports and charge IGST; and whether, after cancellation of other State registrations, E way bills may show Mumbai GSTIN with dispatch place as the port in the respective State. - HELD THAT: - The Authority expressly declined to answer these questions because they were not covered under section 97 (matters on which advance rulings may be sought). No adjudication on the legal merits of raising invoices from Mumbai for imports at various ports, the applicability of IGST in particular transactional configurations, or the correctness of particulars to be shown in E way bills was undertaken. The Authority therefore did not consider or decide the correctness of the invoicing procedure or the E way bill practice in this application.

Not answered by the Authority as the questions do not fall within the scope of section 97.

Final Conclusion: The Authority ruled, on the material facts presented, that the applicant need not obtain separate GST registration in each State and may clear imported goods on payment of IGST from its Mumbai GSTIN; the remaining questions on invoicing from Mumbai and particulars to be shown in E way bills were not answered as they are outside the scope of advance rulings under section 97.

Lease of land as supply of services under Schedule II - Pure services provided to a local authority pursuant to Article 243W - Exemption under Notification No. 12/2017 - Entry No. 3 (pure services to local authority) - Real estate services under Heading 9972 liable to GST

Lease of land as supply of services under Schedule II - Pure services provided to a local authority pursuant to Article 243W - Exemption under Notification No. 12/2017 - Entry No. 3 (pure services to local authority) - Whether long term lease of plots by CIDCO to NMMC for construction of an Indoor Recreation Centre and a Slaughter House, and to PMC for PMC Ward Office(s), qualify as 'pure services' to a local authority in relation to functions entrusted under Article 243W and are exempt under Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate). - HELD THAT: - The Authority held that lease of land is a supply of services because Schedule II classifies any lease, tenancy, easement or licence to occupy land as services. The term 'pure services'-though not defined in statute-was applied to transactions that do not involve supply of goods; the subject leases involve only land and no element of goods, and therefore are 'pure services'. Notification No. 12/2017 (Sr. No. 3) exempts pure services provided to a local authority by way of any activity in relation to functions entrusted to a Municipality under Article 243W. The Indoor Recreation Centre falls within the scope of public amenities envisaged by the Twelfth Schedule (provision of urban amenities and facilities/public amenities) and the Slaughter House is covered by regulation of slaughter houses and tanneries; ward offices are necessary facilities enabling performance of municipal functions. Consequently, these leases are pure services provided to a local authority in relation to functions entrusted under Article 243W and fall within Sr. No. 3 of Notification No. 12/2017 and are exempt from GST.

Affirmative for NMMC: Indoor Recreation Centre and Slaughter House; and for PMC: Ward Office(s) - these leases are exempt as pure services to a local authority under Sr. No. 3 of Notification No. 12/2017.

Real estate services under Heading 9972 liable to GST - Exemption under Notification No. 12/2017 - Entry No. 3 (limitation excluding composite supplies and works contracts) - Whether lease of plots by CIDCO to PMC for construction of PMC Commissioner's and Mayor's residences fall within the exemption at Sr. No. 3 of Notification No. 12/2017 or are taxable as real estate services under Heading 9972. - HELD THAT: - The Authority rejected the applicant's contention that residences for the Commissioner and the Mayor are part of municipal functions under Article 243W. The Commissioner and Mayor operate from their offices; the proposed plots are for residences for personal use of officials and not for execution of municipal functions. Further, the Notifications (including provisions dealing with construction of residential complexes predominantly meant for self use or for use of employees) indicate that construction/lease for such residential use is covered under taxable headings. Clause (vi)(c) of relevant construction notification and Sr. No. 16 of the exemptions schedule demonstrate that lease/construction related to residential complexes for personal use do not fall within the pure services exemption and are liable as real estate services. Therefore, leases for the Commissioner's and Mayor's residences do not qualify for exemption and are taxable under Heading 9972.

Negative for PMC Commissioner's and Mayor's residences - these leases are taxable as real estate services under Heading 9972 (Sr. No. 16, clause (iii)).

Final Conclusion: The Authority ruled that long term leases of plots by CIDCO to NMMC for Indoor Recreation Centre and Slaughter House, and to PMC for Ward Office(s), are 'pure services' to a local authority in relation to functions entrusted under Article 243W and are exempt under Sr. No. 3 of Notification No. 12/2017; leases for PMC Commissioner's and Mayor's residences do not fall within that exemption and are taxable as real estate services under Heading 9972.

Game of skill versus game of chance - gambling/betting/wagering - actionable claim excluded from supply (Schedule III of CGST Act) - scope of supply under the CGST Act - definition of consideration in relation to supply - Rule 31A(3) of the CGST Rules - valuation of actionable claims in betting/gambling - classification under entry 998439 - online content / online games

Game of skill versus game of chance - gambling/betting/wagering - The respondent's online fantasy sports activities do not amount to gambling, betting or wagering and are predominantly games of skill. - HELD THAT: - The court accepted the detailed reasoning of the Punjab and Haryana High Court (upheld by dismissal of SLP) and the principles laid down by the Three-Judge Bench in K. R. Lakshmanan that competitions in which success depends to a substantial degree on skill are not gambling. The features of the respondent's platform - selection of virtual teams using knowledge, judgment and attention, scoring based on real-life player statistics, deadline for team creation, and absence of betting on the outcome of a real match - demonstrate that success depends predominantly on skill and not mere chance. The petitioner's contention that real-world contingencies render results a matter of chance was rejected because the fantasy contest results are not dependent on the winning or losing of a particular real-world team. Given these findings and the precedent cited, the activities cannot be treated as gambling/betting/wagering under the Public Gambling Act or the Finance Act definition relied upon by the petitioner. [Paras 6, 7, 8, 17]

Activities on respondent's platform are games of skill and do not constitute gambling, betting or wagering.

Actionable claim excluded from supply (Schedule III of CGST Act) - scope of supply under the CGST Act - definition of consideration in relation to supply - Rule 31A(3) of the CGST Rules - valuation of actionable claims in betting/gambling - classification under entry 998439 - online content / online games - There is no merit in the allegation of GST evasion or erroneous classification; the pooled amounts are actionable claims excluded from supply under Schedule III and Rule 31A(3) does not apply, while classification under entry 998439 is permissible. - HELD THAT: - The court held that Schedule III of the CGST Act treats actionable claims, other than lottery, betting and gambling, as neither supply of goods nor supply of services. Because the respondent's activities are not gambling, the amounts pooled in escrow qualify as actionable claims under Entry 6 of Schedule III and thus fall outside the scope of 'supply' and 'consideration' for GST purposes. Rule 31A(3), which fixes value of supply for actionable claims in the form of chance to win in lottery, betting, gambling or horse racing, is confined to those activities and cannot override the parent statute; it is therefore inapplicable to the respondent's fantasy-sports actionable claims. Further, the Explanatory Notes to entry 998439 exclude on-line gambling services and expressly cover on-line games played over the internet by subscription, pay-per-play or pay-per-view; since the respondent's services are games of skill and not gambling, classification under 998439 with applicable GST (18%) was held to be correct. Consequently, no basis was made out for criminal prosecution on GST evasion or for reclassification to higher rate entries. [Paras 12, 13, 14, 15, 16]

The pooled escrow amounts are actionable claims excluded from supply; Rule 31A(3) is inapplicable and the classification under entry 998439 for online games is not erroneous.

Final Conclusion: The petition seeking criminal prosecution was dismissed: the court found the respondent's fantasy sports activity to be a game of skill (not gambling) and rejected the allegations of GST evasion or misclassification; no directions were issued and the rule was discharged.

Unexplained cash credits under section 68 - onus on assessee to prove identity, capacity and genuineness of creditor - assessment authority's opinion and its evidentiary value - relevance of prior acceptance of transactions and Settlement Commission finding - Mohanakala principle on rejection of explanation and inference of income

Unexplained cash credits under section 68 - onus on assessee to prove identity, capacity and genuineness of creditor - Assessee's explanation for credits of Rs. 2,67,99,547/- (NRI remittances) satisfies the legal requirement under section 68 and the amount cannot be treated as unexplained income. - HELD THAT: - Section 68 is attracted only where the assessee offers no explanation or the explanation offered is, in the opinion of the Assessing Officer, not satisfactory. The authorities below found that the assessee produced confirmation from the bank and a direct confirmation from the remitter identifying his source of funds and the remittances were routed through banking channels. The First Appellate Authority and the Tribunal recorded that identity of the creditor, source of funds and genuineness of the transactions were established and that similar remittances had been accepted in earlier years. Where the conclusion reached by the appellate authorities is supportable by evidence on record - namely bank certificate, confirmation from the remitter and prior acceptance - the finding that the assessee discharged the burden under section 68 cannot be treated as perverse. The concurrent factual conclusions accordingly justify deletion of the addition.

Addition under section 68 deleted; assessee held to have satisfactorily explained the credits.

Relevance of prior acceptance of transactions and Settlement Commission finding - Previous acceptance of comparable remittances and a Settlement Commission finding that similar receipts were received through proper banking channels were admissible and relevant factors favouring the assessee's explanation. - HELD THAT: - The courts below took into account that the department had accepted similar remittances in an earlier assessment year and that the Settlement Commission had treated earlier credits as genuine. The High Court held that such prior acceptance and the Settlement Commission's finding are relevant circumstances which may legitimately weigh in favour of the assessee when the present explanation is otherwise supported by documentary evidence. Reliance on those prior conclusions was therefore permissible and not a legal error.

Reliance on earlier acceptance and Settlement Commission finding upheld as relevant corroborative material.

Mohanakala principle on rejection of explanation and inference of income - assessment authority's opinion and its evidentiary value - Decision in P. Mohanakala does not compel reversal where, on factual appraisal, the assessee's explanation was accepted by appellate authorities based on bank confirmations, remitter's statements and prior acceptance. - HELD THAT: - Mohanakala explains that if the Assessing Officer, after applying mind to materials, finds the explanation unsatisfactory, section 68 furnishes a prima facie basis to treat the credit as income unless the assessee rebuts that inference. In the present case, however, the appellate authorities concluded on evidence that the explanation was satisfactory. The High Court distinguished the facts here from Mohanakala, noting that the assessing authority's rejection did not survive scrutiny where corroborative evidence and prior acceptance supported the explanation. Consequently, Mohanakala did not mandate interference with the concurrent findings.

Mohanakala principle not applicable to overturn the factual conclusion that the explanation was satisfactory.

Final Conclusion: The High Court dismissed the Revenue's appeal; the Tribunal and CIT(A)'s concurrent findings that the assessee satisfactorily explained the NRI remittances for AY 2004-05 are upheld and the addition under section 68 is not sustained.

Disallowance of expenditure attributable to exempt income under Section 14A and application of Rule 8D - characterisation of loss on sale of government-issued fertilizer bonds as business loss or capital loss - precedential effect of a coordinate bench decision between the same parties

Disallowance of expenditure attributable to exempt income under Section 14A and application of Rule 8D - precedential effect of a coordinate bench decision between the same parties - Whether the disallowance under Section 14A in respect of administrative/interest expenditure could be sustained for the A.Y.2010-11 or had to be restricted/deleted in view of the coordinate bench's earlier decision. - HELD THAT: - The Court recorded that the very question was considered and decided by a Coordinate Bench in Tax Appeal No.900 of 2018, where it was held that, in the assessee's case, since sufficient interest free funds were available, disallowance under Section 14A (read with Rule 8D) was not permissible and that the Division Bench's decision in the earlier assessment year had attained finality between the parties. Relying on those findings, the Court concluded that the Tribunal did not commit error in restricting/deleting the Section 14A disallowance in the present appeal for A.Y.2010-11. [Paras 5]

The Section 14A disallowance was not sustained and the Tribunal's deletion/restriction was upheld.

Characterisation of loss on sale of government-issued fertilizer bonds as business loss or capital loss - precedential effect of a coordinate bench decision between the same parties - Whether the loss on sale of fertilizer bonds for the A.Y.2010-11 was properly treated as business (revenue) loss rather than capital loss. - HELD THAT: - The Court noted that the Coordinate Bench had considered identical controversy and explained that the assessee received fertilizer bonds in lieu of subsidy (credited as subsidy income) which were saleable in the open market; when sold at values lower than their credited amount the resultant loss was held to be revenue in nature. The Coordinate Bench relied on authority treating similar disposals as revenue losses where there was no enduring capital advantage, and applied that reasoning to the assessee's facts. Applying that precedent, the Court found no error in the Tribunal's treatment of the loss as business loss. [Paras 6]

The Tribunal's allowance of the loss on sale of fertilizer bonds as business loss was upheld.

Final Conclusion: Both substantial questions raised by the revenue having been covered by a Coordinate Bench decision between the same parties, the Tribunal's orders for A.Y.2010-11-rejecting the Section 14A disallowance and treating the fertilizer bond loss as business loss-were upheld and the revenue's appeal is dismissed.

Deductibility of employer's contribution to Provident Fund and ESIC - Requirement to credit employees' contribution to statutory funds by the due date under the explanation to section 36(1)(va) - Disallowance where employer fails to deposit employees' contribution into the relevant fund by the prescribed due date - Reliance on jurisdictional High Court precedent

Deductibility of employer's contribution to Provident Fund and ESIC - Requirement to credit employees' contribution to statutory funds by the due date under the explanation to section 36(1)(va) - Disallowance where employer fails to deposit employees' contribution into the relevant fund by the prescribed due date - Whether the disallowance of employer's contribution to PF and ESIC was rightly upheld where the employees' portion was not credited to the respective statutory funds by the due date prescribed in the explanation to section 36(1)(va). - HELD THAT: - The Tribunal's conclusion was upheld on the basis that the assessee had not deposited the employees' contribution into the Provident Fund and ESIC within the timelines prescribed under the respective statutes. The appellate authorities applied the legal principle articulated by the jurisdictional High Court in CIT v. Gujarat State Road Transport Corporation that an employer is not entitled to claim deduction where it has failed to credit the employees' contribution to the employees' account in the relevant fund on or before the due date specified in the explanation to section 36(1)(va). The High Court found no reason to diverge from that precedent and observed that the issue is presently pending before the Supreme Court; nevertheless, in view of the binding local precedent the disallowance was sustained for the Assessment Year 2014-15.

The disallowance of the employer's contribution to PF and ESIC was sustained as the employees' contributions were not credited to the respective funds by the prescribed due date, and the appeal was dismissed.

Final Conclusion: Appeal dismissed; the Tribunal's upholding of the disallowance was affirmed in reliance on the jurisdictional High Court precedent that failure to credit employees' contribution to the statutory fund by the due date disentitles the employer to deduction for the relevant assessment year.

Deductibility of interest under Section 36(1)(iii) as business expenditure - Interest on borrowed funds used to acquire control in another company - Control acquisition as legitimate business purpose - Commercial expediency in investments for business advantage - Precedent on allowability of interest for acquiring subsidiary control

Deductibility of interest under Section 36(1)(iii) as business expenditure - Interest on borrowed funds used to acquire control in another company - Control acquisition as legitimate business purpose - Commercial expediency in investments for business advantage - Interest incurred on borrowings used to purchase shares to obtain control of another company is deductible as business expenditure under Section 36(1)(iii) and not a capital expenditure, and the Tribunal was correct in allowing the claim. - HELD THAT: - The Assessing Officer disallowed interest claimed on borrowed funds used to acquire a controlling interest in another company. The Tribunal treated the expenditure as incurred in the course of the assessee's business adventure and allowed the deduction under Section 36(1)(iii). This Court, noting earlier decisions of this Court and other High Courts which have held that interest on borrowings for acquiring control in a subsidiary or associate may be allowable as business expenditure where the investment is for commercial expediency and business advantage, found no substantial question of law to be decided. Having regard to the precedent recognizing acquisition of control as a legitimate business purpose justifying allowability of interest, the Court concluded that the Tribunal's conclusion was sustainable.

Appeal dismissed; no substantial question of law arises and the Tribunal's allowance of the interest as business expenditure is sustained.

Final Conclusion: The Revenue's appeal is dismissed; the Tribunal's decision treating the interest on borrowings used to acquire controlling interest as allowable business expenditure under Section 36(1)(iii) is upheld.

Allowability of discount on issue of ESOP as a deduction under profit and gain of business - comparability in transfer pricing - exclusion of comparable companies from list of comparables - reliance on functional dissimilarity and segmental profile in selecting comparables - binding effect of a taxpayer's selection in Transfer Pricing Study Report - allowability of payments characterised as penalties when attributable to clients

Allowability of discount on issue of ESOP as a deduction under profit and gain of business - Appeal admitted for consideration of whether the discount on issue of ESOP is allowable as a deduction in computing business income. - HELD THAT: - The High Court recorded admission of the appeal limited to the substantial question of law framed at paragraph 1, namely whether the ITAT was correct in holding that the discount on issue of ESOP is allowable as a business deduction. The order confines admission to this sole question and does not decide the merits; the matter is therefore preserved for full consideration. [Paras 1, 13]

Appeal admitted for consideration of the stated substantial question of law; admission confined to that question.

Comparability in transfer pricing - exclusion of comparable companies from list of comparables - reliance on functional dissimilarity and segmental profile in selecting comparables - Tribunal's exclusion of Motilal Oswal Investment Advisory Pvt. Ltd. as a comparable upheld as not raising a question of law for this Court's consideration. - HELD THAT: - The Tribunal excluded Motilal Oswal on the basis that it carried on merchant banking and mergers-and-acquisitions activities and its profit and loss account appeared consolidated; it was also registered as a merchant banker. The Court observed that this view has been applied in prior Tribunal and High Court decisions and therefore did not entertain the revenue's contention that Motilal Oswal earned advisory fees in the year under consideration. [Paras 3, 4]

No question of law is entertained in respect of the exclusion of Motilal Oswal as a comparable.

Comparability in transfer pricing - exclusion of comparable companies from list of comparables - reliance on functional dissimilarity and segmental profile in selecting comparables - Tribunal's exclusion of Brescon Advisors Private Limited as a comparable upheld. - HELD THAT: - The Tribunal relied on the audit report showing Brescon's income from debt realization and syndication and significant proprietary investments, concluding its functional profile differed from the tested party. The Court found the Tribunal cited proper reasons and agreed with the exclusion. [Paras 5]

Brescon Advisors Private Limited properly discarded as a comparable; no question of law arises.

Comparability in transfer pricing - exclusion of comparable companies from list of comparables - reliance on functional dissimilarity and segmental profile in selecting comparables - Tribunal's exclusion of Khandwala Securities Limited as a comparable upheld. - HELD THAT: - The Tribunal observed Khandwala Securities' operations included investment banking, corporate advisory and institutional banking, and that its annual report reflected impacts from market downturns - distinguishing features from the assessee. The Court found no error in the Tribunal's conclusion. [Paras 6]

Khandwala Securities Limited correctly excluded as a comparable; no question of law arises.

Comparability in transfer pricing - exclusion of comparable companies from list of comparables - reliance on functional dissimilarity and segmental profile in selecting comparables - Tribunal's exclusion of Sundaram Finance Distribution Limited as a comparable upheld. - HELD THAT: - The Tribunal noted Sundaram Finance Distribution Limited had no employees and outsourced activities; earlier authority (Aptara Technology) led to rejecting such entities as comparables. The Court, noting prior similar decisions, declined to reconsider the point. [Paras 7]

Sundaram Finance Distribution Limited properly excluded as a comparable; no question of law arises.

Comparability in transfer pricing - binding effect of a taxpayer's selection in Transfer Pricing Study Report - Tribunal's view that inclusion of a company in the assessee's Transfer Pricing Study Report does not bind the Revenue or preclude exclusion upheld. - HELD THAT: - The Tribunal rejected the argument that Integrated Capital Service Limited could not be excluded merely because the assessee had included it in its TPSR, observing the assessee could produce correct facts to seek exclusion. The Court noted consistent prior orders taking the same view and held no question of law arises. [Paras 8, 9]

Inclusion in an assessee's TPSR does not preclude exclusion as a comparable; no question of law arises.

Comparability in transfer pricing - exclusion of comparable companies from list of comparables - Tribunal's exclusion of Axis Private Equity Limited as a comparable upheld. - HELD THAT: - The Tribunal found Axis Private Equity acted as investment manager with significant related-party transactions and engaged in managing investments (mutual funds, venture capital), making it functionally different from the assessee. The Court found this a valid basis for exclusion. [Paras 10]

Axis Private Equity Limited correctly excluded as a comparable; no question of law arises.

Allowability of payments characterised as penalties when attributable to clients - allowability of business expenditure - Tribunal's deletion of a disallowance relating to payments characterised as penalties upheld where such payments were found to be on account of irregularities committed by the assessee's clients. - HELD THAT: - Relying on prior orders, the Court noted the ITAT had found that the payments were due to irregularities by clients and not for infraction of law by the assessee; accordingly the Explanation to section 37 would not apply and the payments were allowable as business expenditure. The High Court declined to entertain the revenue's contention. [Paras 11, 12]

Disallowance deleted by the Tribunal in respect of such payments is sustained; no question of law entertained.

Final Conclusion: The High Court has admitted the appeal limited to the single substantial question of law concerning the allowability of discount on issue of ESOP as a business deduction; the additional transfer-pricing challenges to exclusion of various comparables and the penalty-related disallowance were found not to raise questions of law for this Court and are not entertained. Registry directed to supply Tribunal papers for further proceedings.

Deduction under Section 80-IA(4) as 'infrastructure facility' - Container Freight Station (CFS) qualifying as infrastructure facility - Inland container depot / container freight station vis-a -vis inland ports on rivers or canals - Precedential effect of earlier decisions upholding CFS eligibility for Section 80-IA(4) deduction

Deduction under Section 80-IA(4) as 'infrastructure facility' - Container Freight Station (CFS) qualifying as infrastructure facility - Precedential effect of earlier decisions upholding CFS eligibility for Section 80-IA(4) deduction - Whether the assessee's Container Freight Station is eligible for deduction under Section 80-IA(4) as an infrastructure facility and whether the Tribunal was justified in allowing the deduction. - HELD THAT: - The Court recorded that the Tribunal and the Commissioner of Income-Tax (Appeals) held the Container Freight Station operated by the assessee to be an eligible infrastructure facility for the purpose of deduction under Section 80-IA(4). The High Court noted that identical questions had previously been litigated and that Tribunal decisions treating CFS/ICD operations as eligible had been upheld by this Court in earlier proceedings. Relying on those authoritative precedents, the Court concluded that the issue stands concluded in favour of the assessee and that the Tribunal's allowance of the deduction did not call for interference. [Paras 3]

Tribunal's allowance of the deduction under Section 80-IA(4) in respect of the assessee's CFS is upheld and the Revenue's appeal is dismissed.

Final Conclusion: Revenue's appeal dismissed; judgment of the Tribunal allowing the assessee's claim of deduction under Section 80-IA(4) for the Container Freight Station is affirmed, the matter having been concluded by prior decisions favouring the assessee.

Disallowance under section 40(a)(ia) for failure to deduct tax at source - deduction in respect of bad debts under section 36(1)(vii) - requirement to prove irrecoverability of debt after amendment of section 36(1)(vii) - reliance on precedent in T.R.F. Limited v. Commissioner of Income Tax

Disallowance under section 40(a)(ia) for failure to deduct tax at source - Deletion by the Tribunal of the addition under section 40(a)(ia) in respect of payments to C&F agents towards ocean freight and IHC charges was not adjudicated. - HELD THAT: - The Court declined to answer the substantial question of law relating to the deletion of the disallowance under section 40(a)(ia) because the aggregate tax effect was small (the disallowance amount and approximate tax effect were noted) and, in view of an applicable circular, the Court reserved the question for determination in a fit case. No substantive ruling on the legal merits of the Tribunal's deletion was made. [Paras 3]

Question not answered and reserved for determination in another appropriate case.

Deduction in respect of bad debts under section 36(1)(vii) - requirement to prove irrecoverability of debt after amendment of section 36(1)(vii) - reliance on precedent in T.R.F. Limited v. Commissioner of Income Tax - Validity of the Tribunal's deletion of the addition disallowing the bad debts written off by the assessee. - HELD THAT: - The Revenue challenged the Tribunal's deletion on the ground that the assessee failed to prove that the amounts written off had become irrecoverable. The Court held that, in view of the Supreme Court's decision in T.R.F. Limited v. Commissioner of Income Tax, after the amendment of section 36(1)(vii) with effect from 01.04.1989 it is not necessary to establish that a debt had in fact become irrecoverable. Applying that precedent, the Court found that the substantial question of law raised by the Revenue did not survive. [Paras 4, 5]

Tribunal's deletion of the addition in respect of bad debts upheld; the substantial question of law does not survive.

Final Conclusion: The appeal is dismissed; the question relating to disallowance under section 40(a)(ia) is reserved for another fit case, and the Tribunal's deletion of the addition in respect of bad debts is upheld in view of the Supreme Court's decision in T.R.F. Limited.

Revenue expenditure - capital expenditure - licence to use software - enduring benefit - intellectual property rights - annual renewal/license fee - computer software as capital asset - replacement/upgradation vs new installation

Revenue expenditure - capital expenditure - licence to use software - enduring benefit - intellectual property rights - annual renewal/license fee - Expenditure on purchase of CTCL software - whether revenue in nature or capital in nature - HELD THAT: - The Tribunal and the High Court affirmed the finding of the CIT(A) that the assessee acquired only a licence to use the CTCL software and did not acquire any ownership or intellectual property rights in the software. The CIT(A) examined the licence terms which recorded that the software remained the intellectual property of the vendor, that title to the physical carrier was retained by the vendor, that the assessee obtained a non exclusive, non transferable, limited right to use, and that customisations and modifications remained the vendor's property. The licence operated on an annual/renewal basis according to the number of licences used. On these findings the Court held that the assessee did not obtain an enduring benefit amounting to acquisition of a capital asset; the payment was for a right to use in the course of business and thus revenue in nature. The contention that the software was a new installation enhancing earning capacity and therefore capital was rejected on the factual basis that the licence terms and recurring fee structure negated acquisition of ownership or enduring proprietary benefit. [Paras 8, 9, 10, 13]

The expenditure on the CTCL software was held to be revenue expenditure and not a capital expenditure.

Final Conclusion: The Revenue's appeal is dismissed; no substantial question of law arises and the Tribunal's confirmation of the CIT(A)'s finding that the software licence fee was revenue in nature is upheld.

Reopening of assessment - order of the Settlement Commission conclusive as to matters stated therein - exclusive jurisdiction of the Settlement Commission under Chapter XIXA - reasons to believe under Section 147 - reasons recorded may be explained or elaborated but not supplemented with new grounds

Order of the Settlement Commission conclusive as to matters stated therein - exclusive jurisdiction of the Settlement Commission under Chapter XIXA - Whether the Assessing Officer had jurisdiction under section 147/148 to reopen the assessment for the assessment year in respect of which the Settlement Commission had passed an order under section 245D(4). - HELD THAT: - The court analysed Chapter XIXA and the effect of an order under section 245D(4), observing that an application under section 245C is akin to a return and that the Settlement Commission's order is final and conclusive as to matters stated therein, subject only to recall in cases of fraud or misrepresentation as provided in that Chapter. Relying on the scheme in Brij Lal and allied decisions, the court held that once the Settlement Commission has passed an order under section 245D(4) for an assessment year, the assessment stands concluded and the Assessing Officer lacks jurisdiction to reopen that assessment under section 147; the remedy, if any, lies under the provisions of Chapter XIXA (section 245D(6) and 245D(7)) by the Settlement Commission itself. Applying these principles to the facts, since the Settlement Commission had passed an order under section 245D(4) for the year in question, the notice under section 148 issued by the Assessing Officer was invalid and without authority of law. [Paras 7, 9, 10]

Assessing Officer had no jurisdiction to reopen the concluded assessment; the notice under section 148 is quashed.

Reasons to believe under Section 147 - reasons recorded may be explained or elaborated but not supplemented with new grounds - Whether the reasons recorded by the Assessing Officer were sufficient to form the belief that income chargeable to tax had escaped assessment. - HELD THAT: - The court examined the reasons recorded and the appraisal report relied upon by the Assessing Officer, noting that the recorded reasons referred to evidence seized in searches (including an excel sheet and appraisal material) and identified specific entries and payouts showing alleged accommodation entries in relation to the petitioner. The court reiterated the settled principle that recorded reasons need not set out the entire material but must reflect an application of mind and show a tangible link between the material and the formation of belief. While an AO cannot introduce wholly new grounds by affidavit or subsequent order, he may explain, elaborate or clarify the recorded reasons and place the supporting material on record so long as no new grounds are introduced. Applying these principles, the court found that on the reasons recorded, as read with the appraisal report placed in affidavit, there was sufficient material to form the belief that income chargeable to tax had escaped assessment. [Paras 8]

Reasons recorded were sufficient, and the Assessing Officer could have formed the requisite belief; explanations in affidavit and the appraisal report were permissible to elaborate the recorded reasons (but not to introduce new grounds).

Final Conclusion: The petition is allowed: the notice dated 31.03.2018 under section 148 is quashed as the Settlement Commission had earlier passed an order under section 245D(4) for assessment year 2011-12 and the Assessing Officer lacked jurisdiction to reopen that concluded assessment; the Revenue may instead seek relief before the Settlement Commission under Chapter XIXA if it contends fraud or misrepresentation.

Reopening of assessment - failure to disclose fully and truly all material facts - proviso to section 147 - escapement by omission or failure to disclose - survey under section 133A and impounded documents - change of opinion - GKN Driveshafts principle of adequate consideration of objections before reopening

Reopening of assessment - failure to disclose fully and truly all material facts - survey under section 133A and impounded documents - proviso to section 147 - escapement by omission or failure to disclose - Validity of the notice issued under section 148 read with section 147 of the Income Tax Act for A.Y. 2011-2012 on the ground that income had escaped assessment due to non-disclosure of salary expenses. - HELD THAT: - The court found that the reasons recorded for reopening relied solely on a salary register impounded from the Navsari unit which showed a lower payment figure, without taking into account the Bardoli unit salary particulars. The assessee had supplied a reconciliation in objections explaining that the salary debited in the books was the aggregate of two units and provided supporting material. The Assessing Officer had earlier scrutinised salary claims during the original assessment and had specifically called for and considered explanations and particulars relating to salary payments. Reopening in such circumstances amounted to a reopening based on a mere change of opinion because the asserted escapement was founded on incorrect and incomplete factual premises and the true facts were available or could have been appreciated from material before the AO. Consequently the statutory condition in the proviso to section 147 that escapement must be by reason of omission or failure to disclose fully and truly all material facts was not satisfied. [Paras 7, 8, 11, 13, 14]

Notice under section 148 read with section 147 quashed as based on incorrect facts and amounting to change of opinion; no escapement for the purposes of proviso to section 147.

GKN Driveshafts principle of adequate consideration of objections before reopening - change of opinion - reopening of assessment - Whether the Assessing Officer applied mind to the objections filed by the assessee and complied with the obligation under the GKN line of decisions to consider objections in substance before proceeding with reassessment. - HELD THAT: - The court held that the AO's order rejecting objections was perfunctory and failed to address or appreciate the reconciliation and documentary explanation furnished by the assessee showing the aggregate salary claim across two units. The rejection reproduced the reasons for reopening without dealing with the justification chart and supporting documents, thereby manifesting non-application of mind. The established principle requires that objections must be considered in substance so as to prevent unnecessary reassessment where no bona fide escapement is shown; that safeguard was not observed here. [Paras 5, 8, 10, 14]

Order rejecting objections set aside for non-application of mind; reassessment proceedings could not be permitted to proceed where objections demonstrating absence of escapement were ignored.

Final Conclusion: The writ petition is allowed: the notice under section 148 (reopening for A.Y. 2011-2012) and the order rejecting objections are quashed and set aside because the reopening was founded on incorrect/incomplete facts and the objections were not considered in substance, resulting in a prohibited change of opinion.

Reopening of assessment - Reason to believe - Escape of income - Deduction under section 80IB(10) - Separate assessment for each year - First proviso to section 147 - limitation for reopening

Reopening of assessment - Reason to believe - Escape of income - Deduction under section 80IB(10) - Separate assessment for each year - Validity of the notice under section 148 to reopen the assessment for assessment year 2011-12 on the ground that in the previous year relevant to assessment year 2013-14 certain flats were sold to related parties. - HELD THAT: - The court held that assessments are separate for each year and entitlement to deduction under section 80IB(10) must be determined for the year in question. The Assessing Officer relied upon events in financial year relevant to assessment year 2013-14 (sale of flats to alleged related parties) to disallow a deduction that was validly claimed and allowed in assessment year 2011-12. As the first proviso to section 147 was not attracted, the limited inquiry is whether there were reasonable grounds for forming the belief that income chargeable to tax had escaped assessment for 2011-12. On the reasons recorded - which rest on a subsequent event in a different assessment year - no reasonable person could form such a belief to reopen the earlier year's assessment, because any disentitling event in 2013-14 would pertain to that year alone and not retrospectively affect the validity of the 2011-12 deduction. [Paras 6, 9, 10, 11]

The notice under section 148 seeking reopening of the assessment for 2011-12 was without lawful basis and cannot be sustained.

Final Conclusion: The petition is allowed; the notice dated 26.03.2018 issued under section 148 in respect of assessment year 2011-12 is quashed and set aside, rule made absolute with no order as to costs.

Benefit under section 11(1)(a) - carry forward of unabsorbed losses - application of funds for charitable purposes - claim of depreciation on educational buildings - investment in auxiliary educational activity (acquisition of TV channel) - full and true disclosure in a settlement application - jurisdictional limit of the Settlement Commission under Chapter XIX A - prospective operation of cancellation of registration under section 12AA(3)

Benefit under section 11(1)(a) - carry forward of unabsorbed losses - Entitlement of the petitioner Trust to carry forward and set off unabsorbed losses under the charitable trust provisions - HELD THAT: - The Court held that the Settlement Commission's denial of carry forward of deficits was contrary to its own findings and to settled law that income of a trust is to be computed on commercial principles and that application of income in a subsequent year (by way of set off of earlier year deficits) falls within the beneficent scheme of section 11(1)(a). The Commission erred in refusing carry forward on the basis of a subsequently passed cancellation order which could not be given retrospective effect. In view of these conclusions the petitioner is entitled to carry forward of unabsorbed losses and set off in accordance with section 11(1)(a) as applied to the years under consideration. [Paras 48, 49]

Carry forward of unabsorbed losses allowed; Settlement Commission's order modified to give this benefit and respondent directed to recompute income.

Claim of depreciation on educational buildings - benefit under section 11(1)(a) - Allowability of depreciation/application of amounts spent on construction of new educational buildings to the petitioner Trust under charitable provisions - HELD THAT: - The Court found that the Settlement Commission wrongly applied section 11(6) prospectively to deny depreciation for expenditures incurred in assessment years prior to the effective date of that amendment. Applying precedents which permit computation on commercial principles and allow normal depreciation for trusts, the Court held that the petitioner is entitled to benefit in respect of amounts spent on construction of educational buildings including depreciation as permissible under the law applicable to the years in issue. [Paras 33, 48, 49]

Benefit of amount spent on construction of educational buildings including depreciation allowed; original orders modified and recomputation directed.

Investment in auxiliary educational activity (acquisition of TV channel) - application of funds for charitable purposes - Whether acquisition of a TV channel falls within the objects of the Trust and is eligible for treatment under section 11(1)(a) - HELD THAT: - On the material before the Court the TV channel was acquired to facilitate courses in Mass Communication and Journalism and thus was held to be in consonance with the educational objects of the Trust. The Court treated exclusion of the investment by the Settlement Commission as perverse and, following authority recognising a broad educational purpose, concluded the acquisition qualifies as application of funds for charitable purposes and the Trust is entitled to the benefit. [Paras 39, 40, 48]

Investment in the TV channel held to be within Trust objects and eligible for benefit; Settlement Commission's exclusion set aside and recomputation directed.

Prospective operation of cancellation of registration under section 12AA(3) - jurisdictional limit of the Settlement Commission under Chapter XIX A - Validity of retrospective cancellation/withdrawal of registration under section 12A/12AA(3) by the Commissioner - HELD THAT: - The Court concluded that cancellation of a trust's registration with retrospective effect was arbitrary and not contemplated by section 12AA(3). In the absence of express legislative intent permitting retrospective cancellation and having regard to authorities, the Court held such cancellation can only operate prospectively. Consequently the Settlement Commission ought not to have relied upon the subsequent retrospective cancellation while adjudicating the rectification and original settlement order. [Paras 29, 43, 49]

Cancellation of registration with retrospective effect held invalid; Settlement Commission's reliance on the retrospective cancellation set aside and benefits restored prospectively.

Full and true disclosure in a settlement application - jurisdictional limit of the Settlement Commission under Chapter XIX A - Whether the disclosure made by the petitioner in its settlement application was 'full and true' so as to sustain immunity granted by the Settlement Commission - HELD THAT: - Having examined the scheme of Chapter XIX A and the Commission's own admission of the application as not invalid, the Court held that the petitioner's disclosure before the Settlement Commission amounted to a full and true disclosure for purposes of proceeding with the settlement. The Court distinguished authorities relied upon by the Revenue (where iterative or suo motu revisions rendered applications invalid) and found no basis to treat the petitioner's disclosure as vitiating the Commission's jurisdiction. The Commission's grant of immunity was therefore not impeached on the ground of non disclosure. [Paras 30, 31, 33, 48]

Disclosure held to be full and true for settlement purposes; immunity and settlement not vitiated on that ground.

Final Conclusion: Writ petition of the petitioner Trust allowed: orders of the Settlement Commission dated 30.06.2017 and the rectification order dated 08.02.2018 are modified to grant the petitioner benefits under section 11(1)(a) including carry forward of losses, allowance in respect of construction expenditures and the TV channel acquisition; respondent's writ dismissed; respondents directed to recompute the petitioner's total income in accordance with these directions within two months; no order as to costs.

Re-allocation of common indirect expenses - deduction under section 80-IB/80-IC - application of section 80-IA(10) - depreciation classification of computer peripherals - Annual Information Return reconciliation - aggregation (clubbing) approach for transfer pricing of export sales - arm's length pricing of corporate guarantee commission - benchmarking of intra-group reimbursement for market survey services - Advertising, Marketing and Promotional (AMP) expenditure not constituting international transaction - Bright Line Test for AMP expenditure

Re-allocation of common indirect expenses - deduction under section 80-IB/80-IC - application of section 80-IA(10) - Whether deduction claimed under section 80-IB/80-IC could be restricted by reallocating common indirect expenses and by invocation of section 80-IA(10). - HELD THAT: - The Tribunal upheld the Dispute Resolution Panel's directions refusing reallocation of common indirect expenses and declining to invoke section 80-IA(10) in the impugned year by following earlier Tribunal/DRP decisions in the assessee's own case for prior assessment years (including AYs 2005-06, 2006-07, 2008-09 and 2009-10) which were found applicable and not distinguished on facts. The revenue failed to demonstrate any distinguishing circumstance to displace the consistent precedents; moreover, departmental challenges to those Tribunal decisions did not succeed before the High Court in the relevant instance. Accordingly the AO was directed to follow the DRP and not to deny the claimed deductions by way of reallocation or by applying section 80-IA(10). [Paras 4]

Revenue's challenge dismissed; DRP directions upholding assessee's allocation sustained and denial under section 80-IA(10) overruled.

Depreciation classification of computer peripherals - Whether computer peripherals (e.g., UPS and printers) are entitled to depreciation at 60% as claimed by the assessee or to be restricted to 15% as treated by the AO. - HELD THAT: - The Tribunal found the issue covered in favour of the assessee by earlier Tribunal decisions in the assessee's own case for AYs 2008-09 and 2009-10, orders which the revenue did not challenge. Following the consistent appellate position, the AO was directed to allow depreciation at 60% on computer peripherals. [Paras 7]

Ground allowed; depreciation on computer peripherals to be allowed at 60%.

Annual Information Return reconciliation - Whether addition on account of unreconciled entries in Annual Information Return (AIR) should stand or be re-examined. - HELD THAT: - Noting that the assessee raised the reconciliation issue late and that correspondence from the bank relied upon post-dated the DRP directions, the Tribunal held that mistaken reporting in AIR alone should not automatically lead to addition. The matter was restored to the AO for factual reconciliation; AO was directed to examine latest AIR data, seek information from the bank and allow the assessee opportunity to reconcile the disputed amounts. [Paras 8]

Ground allowed for statistical purposes; matter remitted to AO for reconciliation and verification.

Aggregation (clubbing) approach for transfer pricing of export sales - Whether export sales to associated enterprises could be benchmarked on an aggregate (clubbing) basis as done by the assessee or required product-wise standalone comparison as adopted by the TPO/DRP. - HELD THAT: - The Tribunal followed its earlier orders for AYs 2008-09 and 2009-10 which approved the clubbing/aggregation approach adopted by the assessee and reversed the DRP/TPO position. Revenue was unable to distinguish the facts or show successful challenge to those Tribunal orders; one departmental appeal was dismissed by the High Court. On that basis the Tribunal deleted the TP adjustment made by the TPO/confirmed by the DRP. [Paras 10]

TP adjustment on export sales deleted; aggregation approach accepted.

Arm's length pricing of corporate guarantee commission - Appropriate arm's length rate for commission on corporate guarantees provided to AEs. - HELD THAT: - Having reviewed the history of rates allowed/estimated in earlier years and relevant higher court authority (Glenmark and subsequent Supreme Court confirmation), the Tribunal exercised its discretion to restrict the estimated rate to 2% for the impugned year and directed recomputation of the TP adjustment by the AO/TPO accordingly. [Paras 11]

Ground partly allowed; guarantee commission to be recomputed adopting 2% rate.

Benchmarking of intra-group reimbursement for market survey services - benchmarking of intra-group reimbursement for market survey services - Whether reimbursement paid to AE for market survey/marketing support qualifies as arm's length and whether ALP determination as Nil was justified. - HELD THAT: - The Tribunal noted the TPO/DRP findings that the assessee did not furnish third party invoices, allocation basis or evidence of receipt of services and therefore failed the benefit test under OECD principles. Given the absence of complete TP documentation and evidentiary support, the Tribunal remitted the matter to the TPO for fresh determination of ALP, directing the assessee to produce cost allocation keys, invoices and proof of receipt of services and ensuring opportunity of hearing. [Paras 12]

Ground allowed for statistical purposes; matter remitted to TPO for redetermination on production of requisite documentation.

Advertising, Marketing and Promotional (AMP) expenditure not constituting international transaction - Bright Line Test for AMP expenditure - Whether third party AMP expenditure incurred by the assessee constitutes an international transaction with AEs and whether the Bright Line Test could be applied to determine ALP. - HELD THAT: - Applying the Tribunal's earlier reasoning in Johnson & Johnson (and following the Delhi High Court's decision in Maruti Suzuki), the bench held that absent any arrangement between the assessee and its AEs to incur AMP expenditure, mere incurrence of third party AMP expenditure in India does not convert it into an international transaction under section 92B. The Tribunal further held that the Bright Line Test (or similar methods not provided under the statute) is not available to make TP adjustments for AMP. On the factual matrix, no arrangement or evidence was shown that the expenditure was incurred on behalf of AEs or primarily for their benefit; therefore the TPO/DRP adjustment was deleted and related grounds rendered infructuous. [Paras 13]

TP adjustments in respect of AMP expenditure deleted; Bright Line Test disapproved in the facts and no international transaction established.

Final Conclusion: The revenue appeal is dismissed. The assessee's appeal is partly allowed: depreciation on computer peripherals allowed at 60%; AIR related addition remitted to AO for reconciliation; export sales TP adjustment deleted; corporate guarantee commission recomputed at 2%; reimbursement for market survey remitted to TPO for redetermination on production of documentation; AMP related TP adjustments deleted as not international transactions. Order pronounced on 19 June 2019.

Taxability of income of a non-resident under section 5(2) of the Income tax Act - onus on the Revenue to prove that an asset or credit falls within the taxing provisions - addition not sustainable on presumption, conjecture or suspicion - test of human probabilities in establishing taxability - use of information received under DTAA for reopening and assessment

Onus on the Revenue to prove that an asset or credit falls within the taxing provisions - addition not sustainable on presumption, conjecture or suspicion - Whether the Assessing Officer discharged the onus of proving that the credits reflected in the three HSBC accounts were taxable in the hands of the non-resident assessee. - HELD THAT: - The Tribunal proceeded on the settled premise that for a non resident the scope of taxable income is governed by taxability of income of a non-resident under section 5(2) of the Income tax Act, and that the department bears the burden of proving that a particular asset or credit falls within the taxing provisions. The CIT(A) found absence of evidence connecting the assessee to the three foreign accounts and no material establishing that the deposits were sourced from India; the AO relied on presumption that funds were routed through entities to the accounts and on the assessee's failure to produce foreign bank statements or consent waivers. The Tribunal agreed with the CIT(A) that mere conjecture, suspicion or presumption cannot substitute for evidence and that the AO did not discharge the onus to establish ownership or an Indian source for the credits; reliance on stolen or unauthenticated data without corroboration was insufficient. Having regard to the factual findings reproduced by the CIT(A) and to the coordinate bench decision in the Hemant Mansukhlal Pandya matter, the Tribunal held that the addition could not be sustained. [Paras 6, 13, 14, 15]

Addition deleted as the Revenue failed to prove that the credits in the three HSBC accounts were taxable in the assessee's hands.

Taxability of income of a non-resident under section 5(2) of the Income tax Act - use of information received under DTAA for reopening and assessment - Whether information received from a foreign authority under DTAA (the 'Base Note') alone sufficed to fasten tax liability on the non resident assessee under section 5(2). - HELD THAT: - The Tribunal noted that the assessment was initiated on information received from the French Government under DTAA and that the AO relied on a 'Base Note' showing account details. The assessee challenged the authenticity of that material and denied ownership or connection with the accounts. The Tribunal held that information obtained under DTAA cannot be the sole basis for an addition unless it is reliable, authenticated and corroborated by evidence establishing ownership or an Indian source of funds. In the absence of such corroboration and given that the AO did not produce conclusive material linking the accounts or deposits to the assessee or to India, the Base Note alone could not sustain the addition. [Paras 3, 6, 14]

Information received under DTAA (the Base Note) without corroborative evidence does not suffice to bring the credits within the charge of tax under section 5(2).

Test of human probabilities in establishing taxability - addition not sustainable on presumption, conjecture or suspicion - Whether the application of the test of human probabilities justified the addition in the facts of this case. - HELD THAT: - The Tribunal acknowledged that the test of human probabilities can be applied to assess genuineness of transactions, but emphasised that such a test must be applied after weighing all available evidence. In the present case there was a paucity of corroborative material and the AO's conclusion rested on conjecture and inferences rather than evidentiary proof. Consequently, application of human probabilities could not cure the absence of foundational evidence linking the deposits to the assessee or to India. The Tribunal therefore held that reliance on human probability was misplaced in the factual matrix before it. [Paras 14]

Test of human probabilities could not sustain the addition where there was no corroborative evidence; the addition was unsustainable.

Final Conclusion: The Tribunal affirmed the CIT(A)'s deletion of the addition; the Revenue's appeal is dismissed.

Amortization of premium on purchase of securities - nature and character of securities (stock-in-trade vs investment) - applicability of section 115JB to Banking companies - prospective operation of statutory amendment - disallowance under section 14A - Rule 8D and requirement of satisfaction under section 14A(2) - annual value of house property - municipal valuation as basis for annual value (add 1/9th) - apportionment of operating expenses for deduction under section 36(1)(viii) - rule of consistency in tax treatment

Amortization of premium on purchase of securities - nature and character of securities (stock-in-trade vs investment) - Whether the claim for deduction by way of amortization of premium paid on purchase of securities could be allowed without a determination of the nature and character of the securities held by the bank. - HELD THAT: - The Tribunal held that the question whether amortization of premium is allowable depends on the nature and character of the securities (whether held as stock-in-trade or as investment). Relying on the decision of the Hon'ble Delhi High Court in Punjab & Sind Bank and CBDT Instruction No. 17/2008, the Tribunal observed that no finding on the nature of the securities was recorded by the AO or CIT(A). Because the characterisation is determinative of the claim, the Tribunal set aside the CIT(A) order and restored the matter to the file of the Assessing Officer for fresh determination of the nature and character of the relevant securities and decision thereupon. The assessee's reliance on United Commercial Bank was noted, but the Tribunal followed the reasoning that the factual determination must be made first. [Paras 5]

Impugned order on this issue set aside; matter remanded to the Assessing Officer to determine the nature and character of the securities and decide the claim for amortization afresh.

Applicability of section 115JB to Banking companies - prospective operation of statutory amendment - Whether section 115JB of the Act (and the amendment/read with Explanation 3 by Finance Act, 2012) was applicable to the banking company for the year under consideration. - HELD THAT: - The Tribunal followed the coordinate-bench decision in UCO Bank (156 ITD 146) and other Tribunal precedents holding that section 115JB is not applicable to the banking company for the year in question and that the amendment making section 115JB applicable to banks operates prospectively from assessment year 2013-14. Applying that precedent, the Tribunal upheld the CIT(A)'s order granting relief to the assessee. [Paras 7]

Upheld the CIT(A)'s deletion of additions under section 115JB; section 115JB not applicable to the assessee for the year in question.

Disallowance under section 14A - Rule 8D and requirement of satisfaction under section 14A(2) - Whether the Assessing Officer could invoke Rule 8D to compute disallowance under section 14A where the assessee had itself made a suo motu disallowance and the AO had not recorded the satisfaction required by section 14A(2). - HELD THAT: - The Tribunal accepted the assessee's position (as in the assessee's own earlier years) that Rule 8D cannot be invoked unless the Assessing Officer records the satisfaction mandated by section 14A(2) that the assessee's own computation is incorrect, pointing out specific deficiencies. In the absence of such recorded satisfaction in the assessment order, the application of Rule 8D by the AO was impermissible. The Tribunal therefore followed coordinate-bench decisions and deleted the AO's large Rule 8D-based disallowance, upholding the CIT(A)'s deletion. [Paras 8, 9]

Deletion of disallowance under section 14A (invocation of Rule 8D) upheld; AO's invocation of Rule 8D without recording satisfaction under section 14A(2) not sustained.

Annual value of house property - municipal valuation as basis for annual value (add 1/9th) - The correct basis for determining the annual value of the assessee's properties where municipal valuation is available. - HELD THAT: - Relying on the decision of the Calcutta High Court in CIT v. Satya Company Limited and noting that municipal valuation was available and undisputed, the Tribunal held that the annual value should be determined on the basis of municipal valuation after adding 1/9th. The assessee's counsel accepted this method and the Tribunal modified the CIT(A)'s order to direct the AO to adopt municipal valuation plus 1/9th in computing annual value. [Paras 10, 11]

Impugned order modified; AO directed to determine annual value on the basis of municipal valuation after adding 1/9th.

Apportionment of operating expenses for deduction under section 36(1)(viii) - rule of consistency in tax treatment - Whether the assessee's method of apportioning operating expenses to determine profit of eligible long term finance business (ratio of eligible business to total business measured by advances and deposits, including non performing assets) for computing deduction under section 36(1)(viii) was acceptable. - HELD THAT: - The Tribunal found that operating expenses are incurred for managing the bank's entire business, which includes both performing and non performing assets, and therefore apportionment on the basis adopted by the assessee (eligible business to total business measured by advances and deposits) was fair and reasonable. The authorities below had erred by apportioning expenses solely in the ratio of interest income, thereby ignoring that NPAs form part of the bank's business and attract operating costs. The Tribunal also noted the assessee's consistent past practice accepted by the Revenue till AY 2010 11 and applied the rule of consistency, concluding that the AO and CIT(A) had produced a distorted result by deviating from the longstanding method. Consequently, the disallowance was deleted. [Paras 12, 17]

Disallowance confirmed by AO and CIT(A) set aside; apportionment method adopted by the assessee accepted and disallowance deleted.

Final Conclusion: The assessee's appeal is allowed in part and the Revenue's appeal is partly allowed: the amortization issue is remitted to the Assessing Officer for determination of the nature and character of the securities; additions under section 115JB and under section 14A (Rule 8D invocation) are deleted; annual value of house property to be fixed on municipal valuation plus 1/9th; and the disallowance relating to apportionment under section 36(1)(viii) is deleted in favour of the assessee.

Summary order. Appeal dismissed for delay (731 days not satisfactorily explained) and on merits; pending applications disposed of.

Summary order. Application for early hearing disposed of and appeal listed in March, 2019 before the appropriate Bench.

Jurisdiction under Section 130 of the Customs Act, 1962 - entitlement to benefit of exemption notification - rate of duty issue - interpretation of Section 130 and 130E of the Customs Act, 1962

Jurisdiction under Section 130 of the Customs Act, 1962 - rate of duty issue - interpretation of Section 130 and 130E of the Customs Act, 1962 - Whether this Court has jurisdiction to entertain an appeal under Section 130 of the Customs Act, 1962 against Tribunal orders granting benefit of an exemption notification when the controversy raises the rate of duty. - HELD THAT: - The Court recorded that the Revenue's challenge concerns the respondent's entitlement to benefit of Notification No.64/88-CUS dated 1 March 1988 and observed that such controversy prima facie raises the question of the rate of customs duty, which may fall outside the High Court's jurisdiction under Section 130. The Court noted the Revenue's reliance on prior proceedings (Commissioner of Customs v. Bharat Hospital and Institute of Oncology) and that in that matter the Revenue had withdrawn its appeal to the Supreme Court with liberty to urge issues before the High Court; accordingly the High Court admitted that earlier appeal and was required to hear the Revenue on the merits there. In the present appeal the Court declined to decide the jurisdictional question at once, stating it would finally determine the proper interpretation of Section 130 and Section 130E after hearing both parties on whether the dispute is essentially a rate-of-duty issue and thus barred from the High Court's jurisdiction. [Paras 5, 6, 7, 8]

Jurisdictional question not finally decided; parties to be heard on the interpretation of Sections 130 and 130E and on whether the dispute is a rate-of-duty matter; final decision deferred.

Final Conclusion: The High Court deferred determination of its jurisdiction to entertain the appeal, directed service on the respondent, ordered hearing of both parties on the interpretation of Sections 130 and 130E with regard to whether the dispute is a rate-of-duty issue, and adjourned the appeal to 1 July 2019.

Quashing of show-cause notice in writ jurisdiction - discretionary exercise of writ jurisdiction in fiscal matters - rare and exceptional grounds for interference with show-cause notices - applicability of Circular No.83/2003-Customs post GST era - abeyance of proceedings pending administrative clarification

Quashing of show-cause notice in writ jurisdiction - discretionary exercise of writ jurisdiction in fiscal matters - rare and exceptional grounds for interference with show-cause notices - High Court declined to quash the impugned show-cause notice and refrained from interfering in writ jurisdiction. - HELD THAT: - The Court applied the settled principle that quashing a show-cause notice in exercise of writ jurisdiction is an exceptional and discretionary remedy and ought not to be routinely exercised in fiscal matters. Reliance was placed on the categories of rare and exceptional cases where interference may be warranted (for example, absence of jurisdiction, reopening a well-settled position of law, prejudice or malafides), and as no such exceptional circumstance was shown on the facts before the Court, interference was refused. The Court also noted the relevance of the rule of alternate remedy and the need for restraint in tax-related disputes, treating reliance on those principles as a reason to deny quashing of the notice.

Impugned show-cause notice not quashed; Court refrained from exercising writ jurisdiction to set it aside.

Applicability of Circular No.83/2003-Customs post GST era - abeyance of proceedings pending administrative clarification - Proceedings under the impugned show-cause notice were kept in abeyance for eight weeks and the Board was directed to issue a clarification on whether Circular No.83/2003-Customs applies post-GST era. - HELD THAT: - Although the Court declined to quash the notice, it recognised the existence of a bona fide controversy regarding whether the Board's earlier circular governs drawback claims after the advent of GST. To resolve that controversy and allay the petitioner's anxiety, the Court directed that the show-cause proceedings be kept in abeyance for a fixed period of eight weeks and required the Board to issue a clarification specifically addressing the applicability of Circular No.83/2003-Customs in the post-GST period. The Court recorded that, depending on the clarification issued by the Board, the show-cause proceedings may either be revived and proceeded with or dropped.

Show-cause proceedings kept in abeyance for eight weeks; Board to issue clarification on applicability of the circular post-GST; further action to follow the clarification.

Final Conclusion: Writ petition dismissed insofar as quashing of the show-cause notice was sought; however, the show-cause proceedings are stayed for eight weeks pending a clarification from the Board on the applicability of Circular No.83/2003-Customs after the commencement of GST, after which the show-cause notice may be revived or dropped.

Condonation of delay - sufficient cause - negligence of the Revenue - reliance on subsequent judicial decision - distinguishing precedent

Condonation of delay - sufficient cause - negligence of the Revenue - reliance on subsequent judicial decision - distinguishing precedent - Application for condonation of 484 days' delay in filing appeal was dismissed for want of sufficient cause. - HELD THAT: - The impugned Tribunal order dated 18th April, 2017 was received on 22nd May, 2017. The file was placed before the Principal Commissioner on 8th June, 2017 and on 13th June, 2017 the Principal Commissioner sought information regarding prospects and proposed grounds of appeal, but no further action was taken until the file was again placed before the Principal Commissioner on 5th September, 2018. This prolonged inaction from 13th June, 2017 to 5th September, 2018 demonstrated negligence on the part of the Revenue and was not explained. The subsequent filing followed the decision in Principal Commissioner of Customs v. Unison Clearing Pvt. Ltd., which was rendered on 19th April, 2018; the court held that reliance on a later favourable decision cannot by itself constitute sufficient cause for condoning an earlier, unexplained delay. The decision in Fugro Survey (where a longer delay was condoned) turned on different facts-namely non-receipt of a certified order from the Supreme Court-and was therefore distinguishable. On these findings the applicant failed to establish sufficient cause for condonation of the 484-day delay. [Paras 5, 6, 7, 8]

Notice of Motion seeking condonation of delay dismissed.

Final Conclusion: The application for condonation of 484 days' delay in filing the appeal was dismissed because the Revenue failed to show sufficient cause; the unexplained inaction by officers and mere reliance on a later favourable decision did not justify condonation, and the Fugro precedent was distinguished on its facts.

Parity in grant of bail - right to personal liberty under Article 21 - principle of granting bail in light of Dataram Singh - conditions of bail and cancellation for breach

Parity in grant of bail - right to personal liberty under Article 21 - principle of granting bail in light of Dataram Singh - Applicant entitled to grant of bail on parity with co-accused and having regard to Article 21 and the precedent in Dataram Singh, without expressing any view on merits. - HELD THAT: - The Court noted that a co-accused with a similar role had earlier been granted bail by this Court and that the factual position of the applicant stood on identical footing. The learned A.G.A. did not dispute this parity. Applying the broader mandate of Article 21 and the guiding principles in Dataram Singh v. State of U.P., and without adjudicating the merits of the criminal charge, the Court found that the case warranted release on bail. The Court recorded the applicant's detention period and, balancing liberty against investigational interests, directed judicial release subject to safeguards to ensure attendance and non-tampering with evidence. [Paras 4, 5]

Applicant Ramdhani Maurya released on bail in Case Crime No. Nil of 2018 under Section 135 of the Customs Act, 1962, on furnishing personal bond and two sureties, subject to enumerated conditions ensuring cooperation with trial and non-tampering with prosecution evidence; breach to attract cancellation of bail.

Conditions of bail and cancellation for breach - Specified conditions of bail and mechanism for cancellation in case of breach were imposed and approved. - HELD THAT: - The Court imposed standard conditionalities: cooperation with trial and personal attendance on every date, prohibition against tampering with prosecution evidence, prohibition of unlawful activities, and prohibition on misuse of bail. The Court directed verification of identity, status and residential proof of sureties by the concerned Court and retained liberty for the Court to cancel bail on breach of conditions, thereby safeguarding the integrity of the trial process while securing the applicant's liberty. [Paras 5, 6]

Bail granted subject to specified conditions with verification of sureties by the concerned Court and liberty to cancel bail on breach.

Final Conclusion: Bail granted to the applicant on parity with a co-accused and in view of Article 21 and Dataram Singh, subject to specified conditions and verification of sureties; concerned Court may cancel bail on breach of conditions.

Right to cross-examination in quasi-judicial/adjudication proceedings - Applicability of principles of natural justice to adjudication under the Customs Act, 1962 - Relevancy of statements under Section 138B of the Customs Act, 1962 - Distinction between statements recorded under Section 108 and evidence admissible after cross-examination - Obligation to afford opportunity of hearing under Section 122A of the Customs Act, 1962 - Effect of denial of cross-examination - order vitiated as nullity

Right to cross-examination in quasi-judicial/adjudication proceedings - Applicability of principles of natural justice to adjudication under the Customs Act, 1962 - Obligation to afford opportunity of hearing under Section 122A of the Customs Act, 1962 - Effect of denial of cross-examination - order vitiated as nullity - Denial of the petitioner's request to cross-examine prosecution witnesses in the adjudication proceeding vitiated the order-in-original for breach of principles of natural justice. - HELD THAT: - Section 122A mandates that adjudicating authorities give opportunity of hearing and import the principles of natural justice into adjudication under the Customs Act, 1962. The right to cross-examine a natural person who is produced as a witness by the prosecution is part of those principles and cannot be denied lightly; Supreme Court precedents (including New India Assurance and Lakshman Exports) recognise cross-examination as an indefeasible component of natural justice in quasi judicial proceedings. The adjudicating authority here disallowed cross-examination merely by treating adjudicatory evidence as different from criminal evidence and by relying on circumstantial corroboration, without identifying any statutory or fact specific exception. Where a contesting party adduces evidence through natural persons, the opposite party is entitled to cross-examine; denial of that opportunity, particularly where the adjudicating authority nonetheless relies upon such statements, amounts to a breach of natural justice and renders the order unsustainable. [Paras 18, 21, 28, 29, 30]

Impugned order in original quashed for denial of right to cross examination; adjudicating authority directed to afford reasonable opportunity for cross examination and proceed afresh in accordance with law.

Relevancy of statements under Section 138B of the Customs Act, 1962 - Distinction between statements recorded under Section 108 and evidence admissible after cross-examination - Statements recorded under Section 108 are not automatically admissible as evidence in adjudication proceedings without cross-examination unless conditions in Section 138B(1) are satisfied; the adjudicating authority must record findings if it treats such statements as relevant without cross examination. - HELD THAT: - Section 108 enables recording of statements during enquiries, and Section 138B creates limited exceptions to the general rule that relevance and admissibility require opportunity for cross examination. Section 138B(1) lists specific circumstances (death, inability to be found, incapacity, kept away, unreasonable delay/expense, or examination and judicial admission in interests of justice) where a signed statement may be treated as relevant without cross examination; subsection (2) extends the same to proceedings other than before a court, as far as may be. Thus, while Section 138B preserves relevancy in defined scenarios, it does not displace the general evidentiary norm that statements by natural persons must ordinarily be tested by cross examination. If an adjudicating authority relies on Section 108 statements without permitting cross examination, it must expressly find that one of the Section 138B(1) conditions is satisfied; absence of such a finding means the authority has improperly acted on untested statements. [Paras 14, 15, 16, 27, 28]

Section 138B exceptions are limited and must be expressly found to apply before a statement under Section 108 is treated as admissible without cross examination; lack of such findings rendered the reliance on those statements unsustainable in this case.

Final Conclusion: The writ petition is allowed: the order in original dated September 6, 2018 is quashed for breach of natural justice. The adjudicating authority is permitted to proceed afresh on the show cause notice, affording the petitioner reasonable opportunity to cross examine the prosecution witnesses sought to be examined, subject to the limited exceptions in Section 138B of the Customs Act, 1962, and to conclude the adjudication expeditiously.

Validity of notice under Section 28(1) of the Customs Act - Customs Valuation - inclusion of loading, unloading and handling charges - Reading down of proviso to Rule 9(2)(b) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 - Article 265 - levy of taxes and duties

Validity of notice under Section 28(1) of the Customs Act - Customs Valuation - inclusion of loading, unloading and handling charges - Reading down of proviso to Rule 9(2)(b) of the Customs Valuation Rules - Article 265 - levy of taxes and duties - Validity of the notice issued under Section 28(1) demanding duty on loading, unloading and handling charges and the scope of proviso (ii) to sub-rule (2) of Rule 9 of the Customs Valuation Rules, 1988. - HELD THAT: - The High Court allowed the writ appeal by following the decision of the Supreme Court in Wipro Ltd. v. Assistant Collector of Customs and Others, wherein the Supreme Court held that proviso (ii) to sub-rule (2) of Rule 9, as introduced, is unsustainable in its existing form and must be read down. The proviso applies only where the actual charges referred to in Clause (b) are not ascertainable. On that basis the order of the Learned Single Judge setting aside the notice was set aside and the appeal allowed in terms of the Supreme Court's order. The present Court therefore applied the Supreme Court's authoritative construction of the Rule and upheld that the proviso must be read down to the limited application stated by the Supreme Court rather than striking down or expanding its reach. [Paras 4]

Writ appeal allowed in terms of the Supreme Court's order; order of the Learned Single Judge dated 25-3-1998 is set aside and proviso (ii) to sub-rule (2) of Rule 9 is to be read down to apply only when actual charges are not ascertainable.

Final Conclusion: The High Court allowed the appeal by following the Supreme Court's decision, setting aside the Single Judge's order and holding that proviso (ii) to sub-rule (2) of Rule 9 of the Customs Valuation Rules must be read down to apply only when the actual loading, unloading and handling charges are not ascertainable.

Jurisdiction to invoke Section 18 in provisional assessment cases - provisional assessment - final assessment under Section 18 of the Customs Act, 1962 - reclassification of imported goods - maintainability of writ despite alternative statutory remedy - non-speaking order - rescission of the Customs (Provisional Duty Assessment) Regulations, 2011

Jurisdiction to invoke Section 18 in provisional assessment cases - provisional assessment - reclassification of imported goods - Validity of the adjudicating authority's order invoking Section 18 for recovery of duty where the goods remained provisionally assessed and the authority had reclassified the imports. - HELD THAT: - The Court found that the imported goods were still subject to provisional assessment. The adjudicating authority purporting to finally assess those bills under the Customs Tariff item and to recover differential duty under Section 18 thus acted without jurisdiction. The order rejecting the declared classification and treating provisionally assessed Bills of Entry as finally assessed, and directing recovery under Section 18, could not stand while provisional assessment remained subsisting. The Court observed that the department's earlier direction to reclassify the goods (by writing dated December 16, 2015) and the subsequent reclassification by the petitioner did not justify the impugned invocation of Section 18 in the circumstances. On this basis the show cause notice and the resultant order were held to be without jurisdiction and were quashed. [Paras 4, 8, 9]

Impugned order invoking Section 18 in respect of goods still provisionally assessed is without jurisdiction and is quashed.

Maintainability of writ despite alternative statutory remedy - non-speaking order - Whether the writ petition was maintainable despite the existence of a statutory alternative remedy by appeal. - HELD THAT: - The Court reiterated that availability of a statutory alternative remedy does not bar writ jurisdiction where fundamental rights are infringed or where the impugned order is without jurisdiction or is non-speaking. Applying that principle, and having found the impugned order to be without jurisdiction, the Court entertained and decided the writ petition on merits rather than relegating the petitioner to the appellate remedy. The Court therefore proceeded to quash the show cause notice and the order in original on jurisdictional grounds. [Paras 7, 8]

Writ petition was maintainable despite alternative remedy and was entertained; relief granted on jurisdictional ground.

Final Conclusion: The show cause notice and the order in original were quashed on the ground that the adjudicating authority acted without jurisdiction by invoking Section 18 while the goods remained provisionally assessed; the writ petition was maintainable and is disposed of accordingly.

Jurisdiction to finally assess provisional assessment under Section 18 - provisional assessment - reclassification of imported goods - recovery of differential customs duty and interest - maintainability of writ petition despite existence of alternative statutory remedy - non-speaking order and breach of principles of natural justice

Jurisdiction to finally assess provisional assessment under Section 18 - provisional assessment - recovery of differential customs duty and interest - Impugned order invoking final assessment under Section 18 in respect of goods that remain provisionally assessed was without jurisdiction. - HELD THAT: - The Court found that the goods imported in the present case were yet to be finally assessed and were still subject to provisional assessment. In that factual and legal situation the adjudicating authority's invocation of the procedure under Section 18 for final assessment and consequential determination and recovery of differential duty and interest exceeded jurisdiction. Having regard to the state of provisional assessment and the statutory scheme relied upon by the parties, the order-in-original purporting to finally assess and direct recovery was set aside as beyond the authority's jurisdiction. [Paras 4, 8, 9]

Impugned order-in-original is without jurisdiction and is quashed.

Maintainability of writ petition despite existence of alternative statutory remedy - non-speaking order and breach of principles of natural justice - Writ petition was maintainable notwithstanding existence of statutory appeal where the impugned order is alleged to be without jurisdiction or to have breached principles of natural justice. - HELD THAT: - The Court noted that availability of a statutory remedy by appeal does not oust writ jurisdiction where the petitioner demonstrates that fundamental rights are infringed, the order is without jurisdiction, or the order is non-speaking / passed in breach of principles of natural justice. Applying that principle to the present facts, the Court found jurisdictional defect in the impugned order and therefore entertained and decided the writ petition on merits. [Paras 7, 8]

Writ petition maintainable and accordingly entertained; relief granted on ground of lack of jurisdiction.

Final Conclusion: The show cause notice and the resultant order in original were held to be without jurisdiction; both are quashed and the writ petition is disposed of accordingly.

Penalty under Section 117 of the Customs Act, 1962 - reliance on statement recorded under Section 108 of the Customs Act - retraction of statement and allegation of coercion - failure to supply copies of statements and documents to the accused - absence of mahazar and non-production of alleged seized seal - no police complaint regarding theft of official seal - inconsistency in penalising employees when senior manager and managing director not penalised - insufficiency of evidence to justify imposition of penalty

Reliance on statement recorded under Section 108 of the Customs Act - retraction of statement and allegation of coercion - failure to supply copies of statements and documents to the accused - Validity of penalty imposed under Section 117 when founded solely on Section 108 statements subsequently retracted and alleged to have been recorded under coercion, and when copies of statements/documents were not supplied to the appellants. - HELD THAT: - The Tribunal found that the penalties were imposed solely on the basis of the appellants' statements recorded under Section 108. The appellants had retracted those statements in their replies to the show-cause notice and alleged that the statements were recorded under threat, coercion and undue influence. Copies of the statements and other documents relied upon by the Department were not supplied to the appellants, depriving them of a fair opportunity to defend themselves. In these circumstances, and given the centrality of the Section 108 statements to the impugned order, the material relied upon by the Department lacked the cogency and reliability required to sustain a penalty under Section 117.

Penalty set aside because it rested solely on retracted Section 108 statements alleged to be coerced and on material not supplied to the appellants, rendering the evidence insufficient.

Absence of mahazar and non-production of alleged seized seal - no police complaint regarding theft of official seal - insufficiency of evidence to justify imposition of penalty - Effect of non-preparation of mahazar, non-production/inspection of the alleged seized seal and absence of any police complaint about missing seal on the reliability of the Department's case. - HELD THAT: - The Tribunal noted that no mahazar was prepared at the spot for recovery of the alleged seal, the alleged seal and its rubber portion were not shown to the appellants, and no police report was filed regarding theft or missing seal. Officers of the Department also admitted lack of knowledge of any missing seal. These lacunae and contradictions in the investigation undermined the existence and seizure of the material object relied upon and diminished the probative value of the Department's case for imposing penalties under Section 117.

Deficiencies in seizure formalities, non-production of the alleged seal and absence of a police complaint rendered the Department's evidence unreliable and inadequate to sustain the penalty.

Inconsistency in penalising employees when senior manager and managing director not penalised - penalty under Section 117 of the Customs Act, 1962 - Whether penalties could be sustained on the appellants when the Senior Manager and Managing Director of the firm were not penalised in related proceedings. - HELD THAT: - The Tribunal observed that the Commissioner (Appeals) had not imposed penalty on the Senior Manager and Managing Director of the main firm, while penalties were imposed on the appellants. The Tribunal treated this inconsistency as material; having exempted senior personnel and set aside cancellation of the firm's licence in related proceedings, there was no reasoned basis shown to single out the appellants for penalty under Section 117. This disparity, together with other contradictions in the investigation, weighed against sustaining the penalties.

Penalties could not be sustained in view of the inconsistent treatment of senior firm officials and the appellants, contributing to the finding of insufficiency of proof.

Final Conclusion: The appeals are allowed; the penalties imposed on the appellants under Section 117 of the Customs Act, 1962 are set aside because the impugned order rested on retracted and allegedly coerced Section 108 statements, documentary and seizure formalities were deficient and the Department's evidence was not cogent or convincing.

Waiver of late presentation charges of Bill of Entry - application of Section 46 of the Customs Act, 1962 - scope of waiver under administrative instructions and standing orders - evidentiary value of inter se communications

Waiver of late presentation charges of Bill of Entry - application of Section 46 of the Customs Act, 1962 - scope of waiver under administrative instructions and standing orders - Appellant's entitlement to waiver of late filing charges for delayed presentation/amendment of Bill of Entry - HELD THAT: - The Tribunal confined the controversy to whether the appellant had established grounds for waiver of late filing charges under Section 46 of the Customs Act, 1962. The authorities below applied the Board's instructions and the Chief Commissioner's Standing Order which limit waiver to specific instances such as technical failures, system non generation of BE number, natural calamities or other bona fide causes accepted by the proper officer. The record showed that the Bill of Lading dated 29/30.05.2017 already carried the appellant's name as consignee and that substantial correspondence and e mail exchanges occurred after that date. The Tribunal accepted the Revenue's contention that those inter se communications lacked independent evidentiary value binding on the Revenue. A material contradiction in the dates between the original Bill of Lading and the later document incorporating the appellant as consignee was not satisfactorily explained. In light of these facts and the limited scope for waiver under the applicable instructions, the appellant's explanation was held insufficient to attract exercise of discretion in its favour. [Paras 4]

Appellant has not made out a case for waiver of late filing charges; the lower authorities' refusal to waive the charges is upheld.

Final Conclusion: The appeal is dismissed; the adjudication refusing waiver of late presentation charges is affirmed.

Suspension of CHA licence - CBLR compliance and KYC obligations of customs broker - Prima facie satisfaction for suspension - Requirement of mens rea/connivance for penal action - Delay in submission of offence report and effect on action

Suspension of CHA licence - CBLR compliance and KYC obligations of customs broker - Prima facie satisfaction for suspension - Requirement of mens rea/connivance for penal action - Delay in submission of offence report and effect on action - Validity of the suspension of the appellant's CHA licence on the basis of the offence report and related findings - HELD THAT: - The Tribunal found the allegations against the appellant to be prima facie vague and insufficient to sustain the suspension. The offence report relied upon a show cause notice issued in respect of other parties, in which the appellant was not made a co-noticee and there was no specific allegation of connivance or abetment by the appellant. The appellant had produced authorisation and KYC documents, and there was no finding of illegal gain or mens rea against the CHA. A statement of the CHA's F-card holder which initially implicated the appellant was subsequently retracted, and the Tribunal accepted the retraction. The Tribunal also observed that non-availability of the exporter at a later address does not establish that the exporter was fictitious, and that physical verification of premises is not mandated by the CBLR regulations as a general requirement. The offence report was submitted after a substantial delay from detection, which was noted but not treated as the sole basis; overall the material did not show any irregularity in handling the export consignments by the appellant sufficient to justify suspension. Applying these conclusions, the Tribunal held that the requisite prima facie case for continuing suspension under the CHA regulations was not made out and set aside the suspension order. [Paras 11, 12]

The order suspending the appellant's CHA licence is set aside and the licence shall be restored.

Final Conclusion: The Tribunal set aside the confirmation of suspension of the appellant's CHA licence, finding no prima facie case of regulatory breach or connivance, and directed restoration of the licence within three weeks.

Confiscation under Section 111(d) of the Customs Act, 1962 - distinction between restriction and prohibition in import policy - assessment of duty on the basis of tariff value - redemption fine under Section 125 and penalty under Section 112(a) of the Customs Act, 1962

Confiscation under Section 111(d) of the Customs Act, 1962 - distinction between restriction and prohibition in import policy - Whether imported Betal Nuts whose declared CIF value was below the threshold specified in the DGFT notification were liable to confiscation under Section 111(d) as prohibited goods. - HELD THAT: - The Tribunal examined whether the DGFT Notification that permitted free import only above a specified CIF value operated as a prohibition on importation of Betal Nuts below that value. Relying on precedent of a coordinate Bench, the Tribunal held that the DGFT condition constituted a restriction in the import policy and not an absolute prohibition on importation. Since no prohibition on import existed, invocation of confiscation under Section 111(d) was not sustainable. The Tribunal therefore found the Adjudicating Authority's reliance on Section 111(d) misplaced and set aside the confiscation order.

Order of confiscation under Section 111(d) set aside.

Redemption fine under Section 125 and penalty under Section 112(a) of the Customs Act, 1962 - confiscation under Section 111(d) of the Customs Act, 1962 - Whether the redemption fine and penalty imposed in consequence of the confiscation could be sustained. - HELD THAT: - Because the basis for confiscation under Section 111(d) was held to be unsustainable, the ancillary imposition of redemption fine and penalty under Sections 125 and 112(a) respectively could not stand. The Tribunal therefore set aside the redemption fine and the penalty which were predicated on the invalid confiscation order.

Redemption fine and penalty set aside.

Assessment of duty on the basis of tariff value - Whether duty could be collected on the basis of the tariff value fixed by CBEC despite setting aside confiscation and ancillary penalties. - HELD THAT: - The Tribunal noted that the goods had been cleared after collection of customs duty determined on the tariff value fixed by CBEC. The order directing payment of duty at the prescribed tariff value was not disputed by the appellant and was upheld. Thus, assessment and duty collection on tariff value remained unaffected by the setting aside of confiscation and related penalties.

Duty assessed and upheld at the tariff value fixed by CBEC.

Final Conclusion: The Tribunal set aside the confiscation, redemption fine and penalty imposed on the imported Betal Nuts, holding that the DGFT condition amounted to a restriction and not a prohibition so as to attract confiscation under Section 111(d); however, the demand for customs duty assessed on the tariff value fixed by CBEC was upheld.

Interim stay - restraint from accessing securities market - restriction on holding directorship or key managerial personnel positions - prima facie satisfaction - remand for fresh consideration of sham transaction and control issue - onus/duty to supply certified copy of impugned order - freeze on existing shareholding and prohibition on alienation

Interim stay - freeze on existing shareholding and prohibition on alienation - onus/duty to supply certified copy of impugned order - Interim relief, procedural directions and timetable pending final disposal of the appeals - HELD THAT: - The Tribunal, having taken the appeals on admission, stayed the operation of the WTM order dated June 14, 2019 until the next date of hearing and imposed a prohibition on the appellants alienating or creating any encumbrance on their shareholding in NDTV pending further orders. The Tribunal directed the appellants to clear registry defects within six weeks, allowed the respondent six weeks to file a reply and afforded the appellants three weeks thereafter to file a rejoinder, fixing the matter for final disposal on September 16, 2019. The Tribunal further directed that upon application by the appellants SEBI must supply a certified copy of the impugned order within five working days, observing that SEBI's duty to furnish the aggrieved parties with a copy of the order is distinct from merely uploading it on its website. [Paras 2, 9, 10, 11]

Operation of the impugned WTM order is stayed till the next date of hearing; appellants shall not alienate or encumber their NDTV shareholding; registry defects and filing schedule fixed; SEBI directed to supply certified copy within five working days on application.

Prima facie satisfaction - remand for fresh consideration of sham transaction and control issue - restraint from accessing securities market - restriction on holding directorship or key managerial personnel positions - Merits of whether the loan and related agreements were sham, whether they conferred control over the listed company, and whether statutory/sebi regulatory violations occurred require detailed adjudication - HELD THAT: - The Tribunal observed that questions concerning the true character of the loan agreements (whether sham), whether the agreements in substance vested control of NDTV in the lenders without exercise of the call option, and whether there were breaches of SEBI laws including the PFUTP Regulations and disclosure obligations are matters requiring detailed consideration. The Tribunal refrained from resolving these substantive contentions at the admission stage, noting that the loan agreements have subsisted for about ten years and that prima facie restraints on directors of a listed company may not serve shareholders' interests without a full adjudication. Those matters therefore remain to be examined on merits by the adjudicating authority and through the appellate process. [Paras 8]

Substantive issues regarding the nature of the loan arrangements, alleged transfer of control and alleged regulatory violations are not finally decided and require detailed consideration.

Final Conclusion: The Tribunal granted interim relief by staying the SEBI WTM order dated June 14, 2019 and prohibiting alienation of the appellants' NDTV shares, fixed a timetable for defect rectification and pleadings and directed SEBI to supply a certified copy of the impugned order; the substantive questions whether the loan and related agreements were sham and whether they effected control and regulatory breaches were left for detailed adjudication.

Entitlement to interest in commercial sale transactions in absence of contractual provision (Section 61, Sale of Goods Act) - court's power to determine a reasonable rate of interest where parties have not agreed - claim for operational debt under Section 9 of the Insolvency & Bankruptcy Code including interest on unpaid price - declaration of moratorium and appointment of Interim Resolution Professional under the IBC

Entitlement to interest in commercial sale transactions in absence of contractual provision (Section 61, Sale of Goods Act) - Whether the operational creditor is entitled to claim interest on unpaid price where no contractual interest clause exists - HELD THAT: - The Bench held that Section 61(2) of the Sale of Goods Act permits a court to award interest on the price where parties have not agreed otherwise. Applying that provision to the admitted unpaid supply made in 2011 and repeated acknowledgements of the balance by the corporate debtor, the Bench found that the creditor had proved existence of debt and default and that entitlement to interest arises even in the absence of an express contractual clause. The Bench distinguished the NCLAT decision noted by the parties on the basis that facts there (principal already paid and no contractual interest) differed and that Section 61 was not pressed before that forum in the same context. The Bench further explained that nothing in the Code prohibits an operational creditor from claiming interest where such claim is supported by law and facts of the commercial transaction, and that awarding reasonable interest prevents multiplicity of proceedings and accords commercial justice. [Paras 11, 12, 13, 16, 20]

Entitlement to interest upheld; the operational creditor proved debt and default and is entitled to interest under Section 61 of the Sale of Goods Act.

Court's power to determine a reasonable rate of interest where parties have not agreed - Rate of interest to be applied where claimant sought 24% per annum but no contractual rate existed - HELD THAT: - Noting that the claimed rate of 24% lacked contractual support and that Section 61 confers discretion upon the court to fix an appropriate rate in absence of agreement, the Bench exercised that discretion and directed the Interim Resolution Professional to verify the claim after computing interest at 12% per annum on the invoice amount. The direction to calculate interest at 12% was applied for the purpose of claim verification and quantification. [Paras 6]

Interest rate fixed at 12% per annum for verification of the operational creditor's claim.

Claim for operational debt under Section 9 of the Insolvency & Bankruptcy Code including interest on unpaid price - declaration of moratorium and appointment of Interim Resolution Professional under the IBC - Admissibility of the Section 9 petition, appointment of Interim Resolution Professional and declaration of moratorium - HELD THAT: - On the material placed-purchase orders, invoices and acknowledgements-and on finding existence of debt and default, the Bench recorded admission of the company petition and recorded directions including declaration of moratorium, public announcement, and appointment of Mr. Karuppiah Muruganandan as Interim Resolution Professional to carry out functions under the Code. Those directions were issued to give effect to the admitted claim and to commence the corporate insolvency resolution process. [Paras 20, 21]

Company petition admitted; moratorium declared and Interim Resolution Professional appointed to initiate CIRP.

Final Conclusion: The Bench held that an operational creditor may claim interest on unpaid price under Section 61 of the Sale of Goods Act where no contractual bar exists; fixed a reasonable rate of 12% per annum for verification of the claim; and admitted the Section 9 petition with declaration of moratorium and appointment of an Interim Resolution Professional (with the order recorded for onward communication).

Existence of dispute under Section 9(5)(ii)(d) of the Insolvency and Bankruptcy Code, 2016 - maintainability of an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 - effect of a reply to a demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 - existence of a plausible contention requiring further investigation (Mobilox test) - concurrent criminal proceedings / FIR as indicia of a bona fide dispute

Existence of dispute under Section 9(5)(ii)(d) of the Insolvency and Bankruptcy Code, 2016 - existence of a plausible contention requiring further investigation (Mobilox test) - concurrent criminal proceedings / FIR as indicia of a bona fide dispute - There exists a serious dispute between the parties about the amount claimed by the Operational Creditor which renders the Section 9 application not maintainable. - HELD THAT: - The Tribunal examined the pleadings and documents and found that the Operational Creditor had earlier filed an FIR alleging cheating by the directors of the Corporate Debtor in respect of the same invoices and the same period. The FIR and the pending High Court proceeding challenging that FIR were not disclosed in the Section 9 application. Applying the test in Mobilox - whether a plausible contention exists which requires further investigation and is not a spurious or illusory defence - the Tribunal held that the existence of the FIR and the overlapping allegations demonstrate a genuine dispute about the quantum and nature of the claimed debt (including charges described as "holding" or "rental" and the question of tax invoices). On this basis the Tribunal concluded that a bona fide dispute exists and the Section 9 petition is barred by Section 9(5)(ii)(d) of the Code. [Paras 8, 9, 10, 12]

The petition under Section 9 is not maintainable and is rejected for there being a serious dispute about the claimed amount which requires adjudication.

Effect of a reply to a demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 - existence of a plausible contention requiring further investigation (Mobilox test) - The Corporate Debtor brought the dispute to the notice of the Operational Creditor by way of a reply to the Section 8 demand notice, and that fact vitiates the maintainability of the Section 9 application. - HELD THAT: - Although the Corporate Debtor did not file a copy of its reply to the Section 8 notice in its affidavit, the Operational Creditor admitted receipt of a reply dated 13.04.2018 in its Section 9 application (point 8, Part V). The Tribunal treated this admission as establishing that the Corporate Debtor had put the Operational Creditor on notice of the dispute. On that foundation, and in light of the Mobilox guidance that a dispute communicated to the creditor which is a plausible contention must defeat a summary insolvency petition, the Tribunal held that the Section 9 application could not be maintained. [Paras 6, 11]

The Tribunal finds that the Corporate Debtor communicated a dispute in response to the Section 8 notice and that admission by the Operational Creditor defeats the maintainability of the Section 9 petition.

Final Conclusion: The Section 9 petition filed by the Operational Creditor is rejected because a bona fide dispute about the claimed debt exists (demonstrated by overlapping FIR/criminal proceedings and issues as to charges and tax invoices) and the Corporate Debtor had placed that dispute on record in response to the Section 8 demand notice.

Limitation period - date of default - acknowledgment of liability for extension of limitation - effect of company winding up notice on limitation - maintainability of a petition under section 9 of the Insolvency and Bankruptcy Code when claim is time barred

Limitation period - date of default - effect of company winding up notice on limitation - acknowledgment of liability for extension of limitation - Whether the company petition under section 9 of the I&B Code is maintainable when the claim is time barred - HELD THAT: - The Tribunal found the admitted date of default to be 31.07.2009, and applied a three year limitation period, which expired on 30.07.2012. Although a notice under the Companies Act (dated 26.07.2012) was issued within the limitation period, the winding up petition was filed on or after 24.06.2013, i.e., after the limitation period had expired. Reliance was placed on the principle that issuing a company winding up notice within limitation does not cure the filing of a winding up petition after limitation for the purpose of invoking any exclusion under the Limitation Act. The balance sheet entries showing sundry creditors for the relevant years did not amount to a written acknowledgment of liability signed by the Corporate Debtor for the specific claim, and therefore could not extend the period of limitation under the Limitation Act. As the petition before the High Court (transferred and treated as a section 9 petition) was itself founded on a time barred debt, the Tribunal declined to examine the merits of the claim and rejected the petition on the ground of limitation. [Paras 11, 13, 14, 16]

The petition under section 9 of the I&B Code is rejected as barred by limitation.

Final Conclusion: The Tribunal dismissed the section 9 petition as time barred, holding that the winding up petition filed after expiry of the limitation period and the balance sheet entries did not revive or extend the limitation; no opinion was expressed on the merits and the petitioner remains free to pursue its claim before a competent authority.

Power to dismiss for non-prosecution - appellate tribunal to decide on merits and not dismiss for default - Rule 11(4) - failure to appear permits decision on merits, not rejection for non-prosecution - pre-deposit and stay conditions on penalty appeals - financial hardship and prima facie case for relaxation of pre-deposit - restoration of appeals and direction for deposit with bond pending disposal on merits

Power to dismiss for non-prosecution - appellate tribunal to decide on merits and not dismiss for default - Rule 11(4) - failure to appear permits decision on merits, not rejection for non-prosecution - restoration of appeals and direction for deposit with bond pending disposal on merits - Whether the Appellate Tribunal was justified in dismissing the appeals for non-prosecution and the appropriate remedy. - HELD THAT: - The Court held that Rule 11(4) provides that where the applicant or presenting officer fails to appear, the Tribunal may decide the appeal on its merits and does not contemplate dismissal of the appeal for non-prosecution. Prior decisions of higher courts dealing with analogous procedural rules were noted to support the proposition that an appellate tribunal should not short-circuit adjudication by dismissing appeals for default of appearance but may proceed ex parte or restore the matter to meet ends of justice. Having regard to those authorities and the scheme of appellate procedure, the Tribunal erred in dismissing the appeals for non-prosecution despite prolonged non-appearance. While the appellants' conduct in missing hearings was not approved, interference was required. The common order dismissing the appeals was set aside and the appeals were restored to the file of the Tribunal, subject to directions for interim deposit and further hearing on merits. [Paras 11, 15, 18]

The Tribunal's order dismissing the appeals for non-prosecution is set aside; the appeals are restored and the appellants are directed to comply with interim deposit directions to enable hearing on merits.

Pre-deposit and stay conditions on penalty appeals - financial hardship and prima facie case for relaxation of pre-deposit - restoration of appeals and direction for deposit with bond pending disposal on merits - Whether the Tribunal's conditional order requiring pre-deposit should be modified in view of the appellants' pleaded financial hardship and the existence of a prima facie case. - HELD THAT: - The Court accepted that the appellants had pleaded financial hardship and, on the material placed, were able to make out a prima facie case. That observation was made for the limited purpose of framing an intermediary condition so the appeals can be heard on merits. In exercise of its supervisory jurisdiction, the Court modified the Tribunal's earlier condition by directing each appellant to deposit 50% of the penalty amount with the Special Director, Enforcement Directorate and to furnish a bond for the remaining 50%, to be kept alive until the appeals are finally disposed of. This balance between securing the revenue and permitting adjudication on merits was imposed to enable restoration and hearing of the appeals. [Paras 16, 17]

The Tribunal's conditional order is modified: appellants to deposit 50% of the penalty each and furnish bonds for the remaining 50% pending disposal of the appeals on merits.

Final Conclusion: The appeals challenging the Tribunal's conditional order are disposed of by modifying the pre-deposit condition (50% deposit and 50% bond), and the appeals dismissed for non-prosecution are set aside and restored; appellants granted eight weeks to make the deposits so the Tribunal may hear and decide the appeals on merits.

Judicial review under Article 226 - Writ against order-in-original where appeal was time-barred - Writ lies when adjudicating authority acts without or in excess of jurisdiction or in flagrant disregard of law or principles of natural justice - Burden of proof to establish entitlement under an exemption notification - Delay and laches in instituting writ petition as a ground for refusal of relief

Writ against order-in-original where appeal was time-barred - Writ lies when adjudicating authority acts without or in excess of jurisdiction or in flagrant disregard of law or principles of natural justice - Burden of proof to establish entitlement under an exemption notification - Validity of invoking Article 226 to challenge the order in original dated 31st January 2017 rejecting claim of exemption where the statutory appeal was time barred - HELD THAT: - The Court applied the principle that a writ petition under Article 226 may be entertained against an order in original despite a time barred appeal only in limited circumstances - namely where the authority acted without jurisdiction, in excess of jurisdiction, or in flagrant disregard of law or principles of natural justice resulting in failure of justice. The petitioner's contention that the Adjudicating Authority denied benefit of an exemption notification was vague and unspecified: the petitioner failed to state which notification was relied upon or to demonstrate satisfaction of the conditions necessary to attract the exemption. On perusal of the order in original, the Court was not persuaded that the benefit was denied solely for non production of a notification nor that the Adjudicating Authority had acted in flagrant disregard of law or breached natural justice as contemplated by the exception. Merely asserting entitlement to an exemption, without identifying the notification and establishing compliance with its conditions, does not convert an ordinary appellate grievance into one attracting extraordinary writ jurisdiction. [Paras 10, 11]

Petitioner's challenge did not fall within the narrow exceptional categories permitting writ relief against an otherwise time barred appeal; the Court refused to entertain the substantive challenge on that basis.

Delay and laches in instituting writ petition as a ground for refusal of relief - Effect of unexplained and inordinate delay in filing the writ petition after dismissal of the time barred appeal - HELD THAT: - Continuing delay between the dismissal of the belated appeal and institution of the writ petition was noted. Even allowing time for the (time barred) appeal process, the petition was filed months later without any explanation for the interval between 3rd January 2018 and August 2018. Such unexplained and inordinate delay is a valid ground for refusing to exercise discretionary remedial writ jurisdiction and contributed to the Court's decision not to entertain the petition. [Paras 12]

The unexplained inordinate delay in instituting the petition warranted refusal of discretionary writ relief.

Final Conclusion: The petition is dismissed for lack of entitlement to extraordinary writ relief on the merits and for unexplained delay; no order as to costs.

Payment of service tax with interest before issuance of show-cause notice and benefit under Section 73(3) of the Finance Act, 1994 - penalty under Section 78 - penalty under Rule 7C of the Service Tax Rules read with Section 70 - penalty for failure to register under Section 77(1)(a)

Payment of service tax with interest before issuance of show-cause notice and benefit under Section 73(3) of the Finance Act, 1994 - penalty under Section 78 - Whether penalty under Section 78 is leviable where the assessee paid service tax with interest before issuance of the show-cause notice - HELD THAT: - The Tribunal held that settled law and the statutory scheme embodied in Section 73(3) lead to the conclusion that when an assessee pays the tax along with interest before issuance of the show-cause notice and informs the authorities, proceedings for penalty under Section 78 are not maintainable. The appellate authority's imposition of penalty under Section 78 was therefore unsustainable. The Tribunal followed prior decisions on identical facts and set aside the penalty under Section 78. [Paras 6]

Penalty under Section 78 set aside as tax and interest were paid prior to issuance of show-cause notice.

Penalty under Rule 7C of the Service Tax Rules read with Section 70 - Whether penalty under Rule 7C read with Section 70 is applicable where the assessee was not registered and had not filed returns - HELD THAT: - The Tribunal found that Rule 7C pertains to delayed filing of returns and is not attracted where the assessee had not obtained registration and consequently had not filed returns. On the facts, Rule 7C was inapplicable and the penalty imposed thereunder could not be sustained. Accordingly the penalty under Rule 7C read with Section 70 was set aside. [Paras 6]

Penalty under Rule 7C read with Section 70 is set aside as the rule is not applicable to an unregistered person who had not filed returns.

Penalty for failure to register under Section 77(1)(a) - Whether penalty under Section 77(1)(a) for failure to register is sustainable - HELD THAT: - The Tribunal upheld the imposition of penalty under Section 77(1)(a) because the appellant failed to obtain registration within the prescribed time. The appellant did not contest this penalty before the Tribunal and the factual premise of non-registration supported the levy of the penalty under Section 77(1)(a). [Paras 7]

Penalty under Section 77(1)(a) upheld.

Final Conclusion: The appeal is allowed in part: penalties under Section 78 and Rule 7C read with Section 70 are set aside in view of payment of tax with interest before issuance of show-cause notice; penalty under Section 77(1)(a) for failure to register is maintained.

Admissibility of cenvat credit for input services in relation to exempted goods - applicability of Rule 6(5) of the Cenvat Credit Rules, 2004 to an Input Service Distributor - interaction between Rule 6 and Rule 7 of the Cenvat Credit Rules, 2004 - distribution of cenvat credit by an Input Service Distributor - re-quantification of duty liability and effect of contradictory calculation sheets - sustainability of penalty where assessment varies on statutory interpretation

Applicability of Rule 6(5) of the Cenvat Credit Rules, 2004 to an Input Service Distributor - interaction between Rule 6 and Rule 7 of the Cenvat Credit Rules, 2004 - Rule 6(5) of the Cenvat Credit Rules, 2004 applies to cenvat credit distributed by an Input Service Distributor and is not excluded by the existence of Rule 7. - HELD THAT: - The Tribunal held that Rule 6 deals with admissibility and non-admissibility of cenvat credit on inputs and input services "in or in relation to" the manufacture of exempted goods or provision of exempted services, a phrase which is broad enough to encompass credit arising from input services distributed by an ISD. Rule 7, which governs distribution by an ISD, does not operate to exclude the ISD from the substantive test of admissibility under Rule 6(5). Therefore the benefit conferred by the non-obstante opening of erstwhile Rule 6(5) (allowing full credit for specified services unless used exclusively for exempted goods/services) was available to the appellant, and the lower authorities erred in treating Rule 6(5) as inapplicable to an ISD. [Paras 5]

Rule 6(5) as existing for the relevant period applies to the appellant (an ISD) and the benefit of that provision was not extended to the appellant.

Re-quantification of duty liability and effect of contradictory calculation sheets - sustainability of penalty where assessment varies on statutory interpretation - Contradictory calculation sheets and divergent assessments require remand for re-quantification of duty liability; penalty confirmed by lower authorities cannot be sustained in view of conflicting assessments and erroneous statutory interpretation. - HELD THAT: - The Tribunal noted the existence of three inconsistent calculation sheets produced at different stages (audit, adjudication, appeal) and divergent conclusions on applicability of Rule 6(5). Because the duty quantification differs across records and authorities, the matter must be re-adjudicated on the basis of available records to determine correct duty reversal. In light of such contradictions and the incorrect interpretation by the lower authorities, any penalty premised upon that erroneous assessment reasoning would not survive. [Paras 5, 6]

Appeal allowed by way of remand to the Commissioner (Appeals) for re-assessment/re-quantification of duty liability; penalties based on the contested interpretation are not sustained.

Final Conclusion: The appeal is allowed in part: the Tribunal finds Rule 6(5) applicable to the appellant (ISD) and remands the matter to the Commissioner (Appeals) for re-quantification of the duty liability in accordance with the observations; the appellant must participate in the re-quantification process and penalties founded on the earlier contradictory assessments do not survive.

Refund of excess tax - time-bar - unjust enrichment - subjudice / pending demand - independence of proceedings

Refund of excess tax - subjudice / pending demand - independence of proceedings - unjust enrichment - Whether rejection of the refund claim solely on the ground that a separate demand for service tax (on notional interest on security deposit) was confirmed and is pending is sustainable in law. - HELD THAT: - The appellant had paid excess service tax for the financial year 2012-13 and filed a refund claim. The Commissioner (Appeals) earlier set aside the initial time-bar rejection and remanded the matter for fresh decision. On remand the adjudicating authority acknowledged that the refund claim was not time-barred, that no unjust enrichment arose, and that excess tax had been paid, but rejected the refund solely because a separate demand for service tax on notional interest had been confirmed in another order and was the subject of ongoing litigation. The Tribunal held that the refund claim and the separate demand constitute independent proceedings; the pendency or confirmation of the distinct demand being subjudice before the High Court does not, by itself, justify denial of a refund. It is settled that refund cannot be refused merely because another demand is pending in a different proceeding. Applying these principles to the admitted facts, rejection of the refund only on account of the pending/confirmed demand was not tenable and required setting aside.

Impugned order rejecting the refund solely because a separate demand was confirmed/pending is set aside and the appeal is allowed.

Final Conclusion: The appeal is allowed; the impugned order dated 22.10.2018 rejecting the refund solely on the ground of a confirmed/pending demand in a separate proceeding is set aside, since the refund claim and the demand are independent and the pendency of the latter does not justify denial of the former.

Admissibility of CENVAT credit on input services - admissibility of CENVAT credit on group insurance policy - restriction of credit where differential premium is charged for family members - admission of additional evidence under CESTAT Procedure Rules

Admissibility of CENVAT credit on group insurance policy - restriction of credit where differential premium is charged for family members - admission of additional evidence under CESTAT Procedure Rules - Whether CENVAT credit on Service Tax paid for a Group Accident Insurance policy covering employees and their family members is admissible in full or must be restricted when family members are covered - HELD THAT: - The Tribunal accepted that CENVAT credit on insurance services is generally admissible and that where differential premiums are actually charged for inclusion of family members, credit should be restricted to the portion attributable to the employee alone. The key factual question was whether any additional premium was charged for extending cover to dependent family members. The appellant produced a Declaration Certificate from the insurer stating that no additional premium was collected for family members; the Bench had permitted this document to be produced under the CESTAT Procedure Rules. On the admitted facts and the insurer's certification, the Tribunal found no basis for apportioning the premium and held that the entire credit availed on the group accident insurance premium was admissible. The Tribunal noted precedent decisions recognizing both the principle of admissibility and the corollary restriction where differential premium exists, but applied the factual certification to allow full credit in this case. [Paras 3]

Entire CENVAT credit availed on the Group Accident Insurance policy was held admissible because the insurer certified that no additional premium was charged for family members.

Final Conclusion: The appeal is allowed; the appellate order restricting credit was set aside and the CENVAT credit claimed for the periods 2009-10 and 2010-11 in respect of the Group Accident Insurance policy was held fully admissible on the factual finding that no additional premium was charged for family members.

Extended period of limitation - service tax liability of a government company - malafide intention to evade duty - commercial training or coaching service - identity of service provider and recipient - consulting engineering services provided to government agencies - taxability - confirmation of service tax in respect of business auxiliary and legal services

Extended period of limitation - service tax liability of a government company - malafide intention to evade duty - Extended period of limitation under which demand was raised could not be invoked against the appellant company which is a company established by the State Government. - HELD THAT: - The Tribunal accepted the appellant's status as a government-established company on the basis of the appellant's letter seeking release of funds to deposit service tax to the Government Exchequer and the admitted public character of the company. In view of that public character and the absence of findings of deliberate malafide intent to evade payment of service tax by the Government company, the special requisites for invoking the extended period of limitation were not satisfied. Consequently, the demand confirmed under the extended period and the equal/parallel penalties predicated solely on such extended-period invocation could not be sustained. [Paras 4]

Demand and penalties confirmed by invoking extended period of limitation set aside.

Commercial training or coaching service - identity of service provider and recipient - Service tax is not payable by the appellant in respect of computer and non-computer training as the appellant did not provide the training itself but arranged for training through franchisee institutes, the trainees being the service recipients. - HELD THAT: - On record, the appellant did not operate its own training institute and delivered training through identified franchisee training institutes, paying a portion of the consideration to those franchisees. The Tribunal applied the provider-recipient test for 'Commercial Training or Coaching Service' and concluded that the franchisee institutes, not the appellant, were the actual service providers and the trainees were the service recipients. Therefore the appellant cannot be held liable to service tax for those training activities for the normal period. [Paras 4]

Demand in respect of Commercial Training or Coaching Service disallowed.

Consulting engineering services provided to government agencies - taxability - Consultancy/consulting engineering services provided by the government company to government agencies are not liable to service tax. - HELD THAT: - The Tribunal noted that the consultancy engineering services in question arose from survey work allotted to government agencies and were rendered to government agencies by a company established by the State Government. Given the public character of the company and the provision of such services to government agencies, the Tribunal held that those activities did not attract service tax liability in the circumstances of the case. [Paras 4]

Demand in respect of Consulting Engineering Services disallowed.

Confirmation of service tax in respect of business auxiliary and legal services - The impugned order was upheld insofar as it confirmed service tax for Business Auxiliary Service and Legal Service as admitted or not disputed by the appellant. - HELD THAT: - The Tribunal noted the appellant's acceptance (or non-dispute) of liability in respect of Business Auxiliary Service and Legal Service and, accordingly, sustained the adjudication to that limited extent while setting aside the remainder of the confirmed demand and related penalties. [Paras 4]

Confirmation of service tax in respect of Business Auxiliary Service and Legal Service upheld; remaining demands and penalties set aside.

Final Conclusion: Both appeals allowed in part: extended-period demand and related penalties set aside; demands in respect of Commercial Training or Coaching Service and Consulting Engineering Service disallowed; confirmation of service tax in respect of Business Auxiliary Service and Legal Service sustained.

Penalty under Section 78 - show cause notice under Section 73(3) - tax liability on remittance (cash basis) - reverse charge mechanism

Penalty under Section 78 - show cause notice under Section 73(3) - tax liability on remittance (cash basis) - Whether penalty under Section 78 is imposable where the differential service tax and applicable interest were paid before issuance of the Show Cause Notice issued under Section 73(3). - HELD THAT: - The Tribunal found that the appellant received taxable services from outside India liable under the Reverse Charge Mechanism and that service tax rate reduced from 12% to 10% before the date of foreign remittance, which was the point of liability on a cash/remittance basis applicable in the period. The appellant paid service tax at 10% and, when pointed out, immediately paid the differential service tax with interest and informed the Department prior to issuance of the SCN. In these circumstances the Tribunal held that issuance of the SCN in terms of Section 73(3) was not appropriate and, consequently, imposition of an equivalent penalty under Section 78 was unwarranted. The Tribunal also noted that earlier appellate orders in the appellant's own case had granted relief from penalty in similar facts, and that there was no dispute by the appellant regarding liability to pay the differential tax, only a request for waiver of penalty. [Paras 7, 8]

Penalty imposed under Section 78 is set aside as the differential tax and interest were discharged before issuance of the SCN.

Final Conclusion: The appeal is allowed: the penalty under Section 78 is quashed as the differential service tax and interest were paid prior to issuance of the Show Cause Notice under Section 73(3), and consequential relief is granted to the appellant.

Exemption under Notification No.19/2015-ST - scope of show cause notice and adjudication - export of service by agent/sub agent - treatment under Export of Services Rules, 2005 - unjust enrichment and refund under Section 11B - remand for quantification and verification of payment

Scope of show cause notice and adjudication - Whether the Commissioner(Appeals) exceeded the scope of the show cause notice and Order in Original by denying eligibility under the exemption notification. - HELD THAT: - The Tribunal found that the show cause notice and the Order in Original did not challenge the appellant's eligibility for the benefit of Notification No.19/2015 ST and that the original order denied refund solely for lack of evidence of payment of service tax. The impugned appellate order went beyond the case made out in the show cause notice and the adjudication and thus exceeded the scope of the proceedings. Reliance was placed on settled authorities that an adjudicatory order cannot traverse beyond the case set out in the show cause notice. The appellate conclusion denying eligibility was therefore held unsustainable. [Paras 6]

Impugned order set aside insofar as it goes beyond the scope of the show cause notice and adjudication.

Exemption under Notification No.19/2015-ST - export of service by agent/sub agent - treatment under Export of Services Rules, 2005 - unjust enrichment and refund under Section 11B - remand for quantification and verification of payment - Whether the appellant is entitled to exemption under Notification No.19/2015 ST for inward remittance services rendered to MTSOs and, if so, whether the claim for refund requires further verification including consideration of unjust enrichment. - HELD THAT: - On the merits the Tribunal held that the question is not res integra in light of the Larger Bench decision in Paul Merchants Ltd. and the Division Bench decision in Rambel Consumer Services, which treat services by principal agents and sub agents to foreign MTSOs as export of service (and thus not leviable) under the Export of Services Rules, 2005. Applying that precedent, the Tribunal concluded that the appellant is entitled to the benefit of Notification No.19/2015 ST for the relevant period. However, the Tribunal noted that the original authorities had not considered the evidence adduced by the appellant regarding payment of service tax and had not examined the question of unjust enrichment. Consequently, the Tribunal remanded the matter to the original authority for quantification/verification of proof of payment and for examination of unjust enrichment before final refund is determined. [Paras 6, 7]

Appellant entitled to benefit of the exemption notification; matter remanded to original authority for verification of payment evidence and determination of unjust enrichment.

Final Conclusion: The appeal is allowed in part: the Commissioner(Appeals) erred in going beyond the show cause notice; the appellant is held entitled to the exemption under Notification No.19/2015 ST for the stated period, but the claim for refund is remanded to the original authority for verification of payment evidence and determination of unjust enrichment.

Summary order. Notice issued on the applications for condonation of delay and on the appeals; matters are returnable in four weeks and dasti service is permitted.

Prospective operation of penal provision - penal provision cannot be applied retroactively - imposition of penalty under Section 11AC of the Central Excise Act, 1944 - extended period of limitation for concealment

Imposition of penalty under Section 11AC of the Central Excise Act, 1944 - extended period of limitation for concealment - Validity of initiation and imposition of penalty proceedings against the appellant under Section 11AC. - HELD THAT: - The Court held that initiation of penalty proceedings and imposition of penalty under Section 11AC, on the basis of a show cause notice invoking the extended period of limitation for alleged withholding of vital information, was not faulted. The revenue's action in issuing the notice dated 10-2-1999 and pursuing penalty for the relevant span was upheld in principle by the Court, subject to the temporal limitation discussed separately. [Paras 4]

Penalty proceedings under Section 11AC were validly initiated and imposed insofar as they relate to the period when the provision was in force.

Prospective operation of penal provision - penal provision cannot be applied retroactively - Whether Section 11AC, being introduced w.e.f. 28-9-1996, could be applied to impose penalty for periods prior to its commencement. - HELD THAT: - The Court recognised Section 11AC as a penal provision and accepted the High Court's view that it is prospective in nature. Applying the settled principle that penal statutes operate only from their date of commencement unless expressly made retrospective, the Court held that Section 11AC could not be invoked to impose penalty for periods before 28-9-1996. Consequently, penalties charged for the period prior to the provision's commencement must be quashed, while the provision remains applicable from its effective date onward. [Paras 4, 5]

Penalty under Section 11AC cannot be imposed for the period prior to 28-9-1996; penalty from 28-9-1996 onwards is maintainable.

Final Conclusion: Appeal allowed in part: penalty for the period 1-4-1994 to 27-9-1996 quashed; penalty upheld for the period from 28-9-1996 onwards.

Summary order. Civil appeal dismissed; delay condoned; pending applications, if any, disposed of.

Judicial review under Article 226 - condonation of delay in filing appeal beyond statutory period - scope of writ jurisdiction to challenge order-in-original where appeal is time-barred - excess of jurisdiction / acting without jurisdiction - violation of principles of natural justice

Condonation of delay in filing appeal beyond statutory period - Appellate Authority's power to condone delay - Validity of dismissal of the appeal as time barred by the Appellate Authority and its affirmation by the Tribunal. - HELD THAT: - The Court refused to interfere with the orders dated 25th May 2017 and 21st November 2017 which dismissed the appeal as time barred. The court relied on settled precedent that the Appellate Authority has no power to condone delay beyond the maximum statutory limit of 90 days and noted similar conclusions reached by Full Benches of other High Courts. In view of that law, the dismissal for delay was not susceptible to interference in writ jurisdiction. [Paras 4, 5]

The orders dismissing the appeal as time barred were upheld and not interfered with.

Judicial review under Article 226 - scope of writ jurisdiction to challenge order-in-original where appeal is time-barred - excess of jurisdiction / acting without jurisdiction - violation of principles of natural justice - Whether the petitioner could invoke writ jurisdiction to impugn the order-in-original on merits where the appeal was time-barred. - HELD THAT: - Relying on Full Bench decisions, the Court explained that a writ petition under Article 226 can lie against an order-in-original (notwithstanding a time-barred appeal) only in limited circumstances: where the adjudicating authority acted without jurisdiction, exceeded its jurisdictional limits, or flagrantly violated law, rules, procedure or principles of natural justice resulting in failure of justice or gross injustice. The Court held that the petitioner's contention of alleged double taxation did not impinge on the jurisdictional foundation of the order, nor did it allege a breach of natural justice; at best it raised a grievance requiring reappreciation of facts and exercise of appellate jurisdiction, which cannot be undertaken in the limited domain of judicial review. [Paras 7, 8, 11]

Writ jurisdiction could not be invoked for the petitioner's grievance; the challenge to the order-in-original on those factual/contention grounds was rejected.

Delay and laches in filing writ petition - exercise of discretionary relief in writ jurisdiction - Effect of inordinate delay in instituting the writ petition and adequacy of explanation for such delay. - HELD THAT: - The Court recorded that the impugned order was dated 10th March 2016 and the Tribunal's final order was dated 21st November 2017, but the petition was instituted only on 29th September 2018 without any explanation for the inordinate delay. The petitioner's averment denied any delay or laches, and no justification was furnished. The absence of explanation for delay was treated as an additional and independent ground for refusing relief in writ jurisdiction. [Paras 12]

The petition was dismissed for inordinate delay and absence of any explanation for the delay.

Final Conclusion: The petition is dismissed: the orders upholding dismissal of the appeal as time barred are sustained; the writ challenge to the order-in-original is rejected as not falling within the narrow grounds for judicial review and, independently, the petition is barred by inordinate unexplained delay.

Principles of natural justice - right to cross-examination - insufficient compliance with natural justice - alternate and efficacious remedy - prejudice requirement for relief - judicial review under Article 226/227

Alternate and efficacious remedy - judicial review under Article 226/227 - principles of natural justice - Maintainability of writ petition bypassing statutory appellate remedy on ground of alleged breach of natural justice by denial of cross-examination - HELD THAT: - The Court held that an alternate and efficacious remedy of appeal to the Appellate Authority (CESTAT) exists and, in the facts of this case, the petitioner has not established total noncompliance with the principles of natural justice. The show cause notice, the material to be relied upon, and an opportunity of hearing were furnished and availed; the petitioner filed written submissions and produced documents. The complaint is one of inadequate rather than non-existent opportunity. The impugned order contains reasons for not permitting cross-examination. Where only inadequate opportunity is alleged, the petitioner must additionally demonstrate consequent prejudice. Such factual questions of adequacy of opportunity and prejudice are amenable to fuller adjudication in the statutory appeal and do not justify bypassing the alternate remedy by invoking extraordinary writ jurisdiction under Article 226/227. [Paras 3, 7, 8, 9, 10]

Writ petition dismissed for lack of justification to bypass the alternate appellate remedy; petitioner granted liberty to file appeal.

Right to cross-examination - insufficient compliance with natural justice - prejudice requirement for relief - Whether denial of cross-examination in the circumstances required quashing of the impugned order - HELD THAT: - The Court observed that the right to cross-examination is not absolute and arises only where facts and circumstances necessitate it. The Adjudicating Authority did not base its decision solely on the statements for which cross-examination was sought but also relied on other materials and documents. Prejudice flowing from denial of cross-examination must be demonstrated; absence of such showing, and availability of an appellate forum to examine these factual contentions, precludes grant of writ relief. The precedents relied upon by the petitioner were distinguishable on their facts where either no opportunity at all was afforded or documents were not supplied. [Paras 11, 13, 14]

Denial of cross-examination in the present circumstances did not warrant quashing of the impugned order; factual evaluation on this aspect is left to the appellate forum.

Final Conclusion: The petition is dismissed; liberty granted to the petitioner to prefer an appeal against the impugned orders within two weeks from upload of this order, and the Appellate Authority is requested to entertain the appeal on merits in the peculiar circumstances of the case.

Maintainability of writ petition challenging consequential proceedings - challenge to detention notice impermissible without challenging original order - right to statutory appeal - withdrawal of writ petition with liberty to file appeal - consideration of delay condonation by appellate authority

Maintainability of writ petition challenging consequential proceedings - challenge to detention notice impermissible without challenging original order - The writ petition challenging only the consequential detention notice was not maintainable where the underlying order in Original remained unchallenged. - HELD THAT: - The High Court observed that the main writ petition attacked only the consequential detention notice issued pursuant to an order in Original which had been passed against the petitioner. When an aggrieved party seeks to assail consequential proceedings arising from an order in Original, the proper course is to challenge the foundational order itself; absent such challenge the writ petition against consequential proceedings is not maintainable. The Court therefore held that the petitioner was not entitled to sustain the writ petition which attacked only the detention notice without challenging the order in Original, and recorded that it would not express any view on the merits of the underlying order.

Writ petition dismissed as not maintainable and disposed of by permitting withdrawal.

Right to statutory appeal - withdrawal of writ petition with liberty to file appeal - consideration of delay condonation by appellate authority - Petitioner permitted to withdraw the writ petition and granted liberty to file the statutory appeal against the order in Original; the question of condonation of delay is left to the appellate authority for consideration on merits. - HELD THAT: - Although finding the writ petition not maintainable, the Court accepted the petitioner's expressed intention to pursue the statutory remedy. The Court allowed withdrawal of the writ petition and expressly granted liberty to the petitioner to file an appeal before the appellate authority challenging the order in Original, with direction that any delay in filing be explained. The appellate authority was directed to consider the explanation for delay and decide the delay application and appeal on merits and in accordance with law based on the parties' submissions. The Court did not adjudicate the merits of the original order or the propriety of condoning any delay.

Writ petition dismissed as withdrawn; liberty granted to file appeal and appellate authority directed to adjudicate delay and the appeal on merits.

Final Conclusion: The writ petition attacking only the detention notice was held not maintainable; the petitioner was permitted to withdraw the writ and given liberty to file the statutory appeal against the order in Original, with the appellate authority directed to consider any delay explanation and to decide the delay application and the appeal on merits.

Alternate remedy - availability of statutory appeal to CESTAT under Section 35-B - jurisdiction of the Appellate Tribunal to decide plea of absence of transition notification - exceptions to exercise of writ jurisdiction in fiscal matters - condonation of delay in filing statutory appeal - writ jurisdiction in tax and fiscal statutes

Alternate remedy - writ jurisdiction in tax and fiscal statutes - exceptions to exercise of writ jurisdiction in fiscal matters - Whether the writ petition should be entertained notwithstanding the availability of a statutory appeal to the Tribunal - HELD THAT: - The Court examined Section 35-B and the settled law on exercise of writ jurisdiction where an alternate statutory remedy exists. Observing that the rule of alternate remedy is discretionary and that exceptional circumstances must be shown before entertaining writ relief in fiscal matters, the Court found that the petitioner has not demonstrated any of the recognized exceptions (lack of jurisdiction, breach of natural justice, reopening of settled matter, or ineffectiveness of alternate remedy). In view of the factual matrix, the Court concluded that it is appropriate to leave the petitioner to pursue the statutory appeal to CESTAT under Section 35-B rather than exercise writ jurisdiction in this proceeding. [Paras 14, 15, 20, 21]

Writ petition not entertained on merits; petitioner directed to avail the statutory appeal to CESTAT under Section 35-B.

Availability of statutory appeal to CESTAT under Section 35-B - jurisdiction of the Appellate Tribunal to decide plea of absence of transition notification - Whether the Tribunal (CESTAT) is precluded from adjudicating the contention that no notification governed the transition to GST - HELD THAT: - The Court construed the scope of Section 35-B and found nothing which circumscribes the Tribunal's power to entertain and decide a plea contesting the absence of a notification governing the transition period. Consequently, the Court held that the question of there being no notification for the transition period is within the competence of CESTAT and is to be decided by that forum on merits. [Paras 14, 23]

CESTAT has jurisdiction to decide the contention regarding absence of transition notification; that issue is left open for determination by the Tribunal.

Condonation of delay in filing statutory appeal - alternate remedy - How the pendency or delay in preferring the statutory appeal should be dealt with - HELD THAT: - The Court noted that there is delay in instituting the statutory appeal before CESTAT. It declined to decide the question of condonation of delay and directed that if the petitioner institutes the appeal, an application for condonation of delay may be filed; CESTAT shall consider such application on its own merits and thereafter proceed to deal with the appeal subject to the outcome of that application. The Court expressly preserved the petitioner's right to raise all available grounds before the Tribunal. [Paras 22, 23]

Application for condonation of delay, if filed, to be decided by CESTAT on merits; appeal to be heard thereafter.

Final Conclusion: The writ petition is disposed of by leaving the petitioner to pursue the statutory appeal to CESTAT under Section 35-B; the Tribunal is competent to consider the plea regarding absence of any transition notification and any application for condonation of delay shall be decided by CESTAT on merits; no order as to costs.

Insufficiency of reasons / non speaking order - substantial question of law - remand for fresh consideration - entitlement to rebate on export - double benefit under Section 2(k) of the Cenvat Credit Rules, 2004

Insufficiency of reasons / non speaking order - substantial question of law - remand for fresh consideration - Whether the Tribunal's order contains adequate reasons and whether the matter should be remanded for fresh consideration. - HELD THAT: - The High Court found that the Tribunal's reasoning is deficient: the Tribunal recorded the basic facts (export of gift boxes containing two manufactured and two purchased items) but proceeded to deny the claim by stating that a rebate had been claimed and that the appellant was seeking a 'double benefit' under Section 2(k) of the Cenvat Credit Rules, 2004, without explaining what rebate was claimed, what the alleged double benefit consisted of, or why the claim was not maintainable. The Court held that there are no reasons supporting the Tribunal's finding and that such lack of sufficient reasons renders the order unsustainable. Considering that a substantial question of law arises and that certain factual issues also require determination, the Court admitted the appeal, set aside the impugned order dated 20th March, 2018, and remanded the matter to the Tribunal for re-hearing and fresh adjudication within a specified time frame. [Paras 5, 6, 7]

Impugned Tribunal order set aside for being non speaking; appeal admitted on substantial question of law; matter remanded to the Tribunal for re hearing and fresh determination within three months of communication of the order.

Final Conclusion: The High Court admitted the appeal, set aside the Tribunal's non speaking order dated 20th March, 2018, and remanded the matter to the Tribunal for re hearing and fresh determination within three months; ancillary stay application disposed accordingly.

Delay in adjudication vitiates proceedings - adjudication within reasonable time - transfer to Call Book and unexplained dormancy - breach of principles of natural justice - alternative remedy not to be enforced where proceedings are vitiated

Delay in adjudication vitiates proceedings - adjudication within reasonable time - transfer to Call Book and unexplained dormancy - Whether the prolonged delay in adjudication of the show cause notice renders the adjudication and the Order in Original void and liable to be quashed. - HELD THAT: - The Court found that the show cause notice dated 14-8-2006 remained dormant for many years and that, even after retrieval from the Call Book on 28-9-2009, no adequate explanation was offered for the protracted inaction leading up to the Order in Original dated 25-5-2018. The petitioner was not responsible for the delay and had not requested the matter be kept in abeyance. Applying the principle that adjudicatory proceedings must be concluded within a reasonable time and that unexplained delay vitiates the proceedings (as followed in Siddhi Vinayak Syntex Pvt. Ltd. and subsequent decisions), the Court held the show cause notice and the order passed thereon to be unlawful and arbitrary for want of timely adjudication. [Paras 6, 7]

The show cause notice dated 14-8-2006 and the Order in Original No. 03/AC/CGST/2018-19 dated 25-5-2018 (issued 29-5-2018) are quashed and set aside for delay in adjudication.

Breach of principles of natural justice - alternative remedy not to be enforced where proceedings are vitiated - Whether the petition should be dismissed on account of alleged availability of alternative remedy or on the ground that proper service of hearing notices was made. - HELD THAT: - Although the Department contested non service and asserted that notices for personal hearings were issued and acknowledged, the Court declined to probe disputed service facts because it had already concluded that the entire adjudicatory exercise was vitiated by unexplained delay. In consequence, the argument that the petitioner should be relegated to alternative remedies was rejected since the underlying proceedings themselves were held to be void for delay. [Paras 4, 6]

The plea of alternative remedy and the Department's contention regarding service are rejected as academic in view of the quashing of the proceedings for delay.

Final Conclusion: The petition is allowed; the show cause notice dated 14-8-2006 and the consequent Order in Original dated 25-5-2018 (issued 29-5-2018) are quashed and set aside on the ground of unexplained and inordinate delay in adjudication, with no order as to costs.

Pre-deposit - characterisation of pre-deposit as not being tax - interest on refund of pre-deposit - prospective operation of statutory amendment - interpretation to avoid constitutional invalidity

Pre-deposit - characterisation of pre-deposit as not being tax - interest on refund of pre-deposit - Petitioners entitled to interest on amounts deposited as pre-deposit from the date when the appeals were allowed by this Court (10-12-2015). - HELD THAT: - The Court held that amounts paid as pre-deposit to pursue appellate remedies do not bear the character of tax but are a condition for prosecution of the appeal; consequently, when such deposits are refunded after successful appeal, interest must be paid from the date of the deposit being ordered to be returned. The Court relied on the consistent line of authority treating pre-deposits as not constituting tax - Suvidhe Ltd. v. UOI , affirmed by the Supreme Court in Union of India v. Suvidhe Ltd. , and followed in Nestle India Ltd. v. Assistant Commissioner of Central Excise . The Court also noted later High Court decisions and the Division Bench's view in MRF Ltd. v. The Commissioner of Trade and Taxes and W.S. Retail Services v. State of Karnataka , applying the same principle. Applying this settled principle, the Court held the petitioners are entitled to interest from 10-12-2015, the date when this Court allowed the appeals. [Paras 4, 5, 7]

Respondents directed to calculate and pay interest on the refunded pre-deposits from 10-12-2015.

Prospective operation of statutory amendment - interpretation to avoid constitutional invalidity - Challenge to the validity of the amended Section 35FF on the ground that it operates prospectively and thereby denies interest was rejected. - HELD THAT: - The Court observed that statutes should, where possible, be given an interpretation that avoids rendering them unconstitutional. In light of the Court's interpretation - and the settled position that pre-deposits are not taxes entitled to interest when refunded - the alleged unconstitutionality arising from purported prospective operation of Section 35FF does not subsist. Accordingly, no invalidation of the provision was warranted and the petitioners' contention on that ground was rejected. [Paras 6]

The prospective-operation challenge to Section 35FF held to be without substance and not a bar to awarding interest.

Final Conclusion: Writ petition allowed; the impugned order is quashed and respondents directed to compute and pay interest on the refunded pre-deposits from 10-12-2015. The review petition dismissed as not pressed.

Penalty under Rule 25/Rule 26 of the Central Excise Rules read with Rule 15A of the Cenvat Credit Rules - bogus cenvat credit / availment of cenvat without receipt of goods - admissibility of statements and effect of non-production for cross-examination (Section 9D implications) - reliance on transporters' / drivers' statements and requirement of primary evidence of movement - confiscation / clandestine removal as necessary foundation for civil penalties

Penalty under Rule 25/Rule 26 of the Central Excise Rules read with Rule 15A of the Cenvat Credit Rules - bogus cenvat credit / availment of cenvat without receipt of goods - confiscation / clandestine removal as necessary foundation for civil penalties - Validity of penalties imposed on the firm and its partners for alleged passing of bogus cenvat credit for supplies dated 21-31 July 2014 - HELD THAT: - The Tribunal found that the foundational transactions up the chain (manufacturer to first stage dealer to the appellant) were not doubted and that no evidence established clandestine removal or confiscation of goods. Revenue's case rested on non finding of goods at the recipient's premises during inspection, but the recipient had given a cogent explanation that the goods were with job workers and later reversed credit by reselling the goods back to the appellant. Critical oral evidence relied upon by Revenue (transporters, drivers, personnel of intermediaries) was recorded without producing those persons for adjudication and cross examination; consequently such evidence is hit by the prohibition in Section 9D and cannot be relied upon. No mismatch was found in the appellants' own stock or records at their premises during the officers' visit. Revenue also failed to investigate alternative despatch destinations when alleging non receipt by the recipient. In the absence of proof of clandestine removal or reliable primary evidence of non delivery, the essential factual foundation for invoking penalties under the rules read with Rule 15A was not established. The Tribunal therefore concluded that the penalties were imposed without requisite material and were not imposable. [Paras 14]

Penalties under Rule 25 (on the firm) and Rule 26 (on the partners) read with Rule 15A are set aside for lack of evidence of clandestine removal and for inadmissible/unproved testimonial reliance.

Admissibility of statements and effect of non-production for cross-examination (Section 9D implications) - reliance on transporters' / drivers' statements and requirement of primary evidence of movement - Reliability of investigative statements relied upon by Revenue and their effect on adjudication - HELD THAT: - The Tribunal held that statements of transporters and other persons recorded during investigation were relied upon by Revenue but those persons were not produced in adjudication for examination and cross examination. Consequently, such statements cannot be treated as reliable evidence against the appellants. The Tribunal also emphasised that first hand evidence of drivers/transporters regarding movement of goods was not recorded, and that absence of such primary evidence undermines Revenue's case that goods were not delivered to the recipient. [Paras 14]

Investigative statements not produced for cross examination are not admissible to sustain the penalty; Revenue's reliance on such material is unsustainable.

Consequential relief upon setting aside of penalty - Entitlement to consequential benefits upon successful challenge to the penalty order - HELD THAT: - Having set aside the penalty orders for want of evidence and inadmissible reliance on investigative statements, the Tribunal observed that the appellants are entitled to consequential reliefs as per law. No separate quantification or remand was directed; the impugned order was set aside in entirety. [Paras 15]

Appeals allowed and impugned order set aside; appellants entitled to consequential benefits in accordance with law.

Final Conclusion: Appeals allowed. The penalties imposed on the firm and its partners under Rule 25/26 read with Rule 15A, based on alleged bogus cenvat credit for transactions in July-August 2014, are set aside for want of reliable evidence of clandestine removal and because crucial investigative statements relied upon by Revenue were not produced for cross examination; consequential benefits granted in accordance with law.

Suppression of fact with intent to evade duty by collecting duty from customers and not depositing it - duty demand under Section 11A(4) of the Central Excise Act, 1944 - penalty under Section 11AC of the Central Excise Act, 1944 for evasion - personal penalty under Rule 26 of Central Excise Rules, 2002 - penalty for non-filing of ER-8 returns under Rule 12(6) of Central Excise Rules, 2002 - appropriation of amounts paid during investigation

Suppression of fact with intent to evade duty by collecting duty from customers and not depositing it - duty demand under Section 11A(4) of the Central Excise Act, 1944 - appropriation of amounts paid during investigation - Validity of the demand of Central Excise duty for the period October 2013 to September 2015 and appropriation of amounts paid during investigation. - HELD THAT: - The Tribunal found on the material that the appellant collected duty from customers and failed to deposit it with the Government, which amounts to suppression with intent to evade duty. The original authority's demand for duty for the period October 2013 to September 2015 under the statutory provisions was examined and no infirmity was found. The amount of Rs. 8,43,829/- deposited by the appellant during investigation was held to have been appropriately appropriated in the impugned order. Having regard to these findings, the demand and appropriation as recorded in the Order-in-Original were upheld. [Paras 6]

Demand of Central Excise duty for October 2013 to September 2015 and appropriation of amounts paid during investigation are upheld.

Penalty under Section 11AC of the Central Excise Act, 1944 for evasion - Sustainability of penalty imposed on the firm under Section 11AC of the Central Excise Act, 1944. - HELD THAT: - The Tribunal recorded that duty had been collected from buyers and was not paid to the Government, demonstrating intent to evade payment; on this basis the imposition of penalty under Section 11AC (read with the relevant rules) by the original authority was examined. The Tribunal found no infirmity in the imposition of penalty on the firm for evasion and non-deposit, and therefore dismissed the firm's appeal against that penalty. [Paras 6]

Penalty imposed on the firm under Section 11AC is affirmed and the appeal in that regard is dismissed.

Personal penalty under Rule 26 of Central Excise Rules, 2002 - Extent and quantum of personal penalty imposed on Shri M. A. Mathew, Partner, under Rule 26 of Central Excise Rules, 2002. - HELD THAT: - Although the original authority imposed an equal penalty on the partner as on the firm, the Tribunal considered this excessive given the simultaneous imposition on the firm. Exercising its power to moderate penalty, the Tribunal held that imposition of the full equal penalty on the partner was not justified and reduced the personal penalty to a moderative amount after noting the facts and appropriations recorded by the authorities. [Paras 6]

Personal penalty on Shri M. A. Mathew under Rule 26 is reduced to Rs. 1,00,000; otherwise the equal-quantum penalty is set aside to that extent.

Penalty for non-filing of ER-8 returns under Rule 12(6) of Central Excise Rules, 2002 - Liability for penalty under Rule 12(6) for delayed filing of ER-8 returns. - HELD THAT: - The appellant admitted the lapse in timely filing ER-8 returns. The Tribunal recorded this admission and accepted the original authority's imposition of penalty for non-filing/delay under the Rules. No interference with that imposition was found necessary. [Paras 6]

Penalty for non-filing of ER-8 returns under Rule 12(6) is sustained.

Final Conclusion: The appeal of the partnership firm is dismissed: the demand of duty for October 2013 to September 2015, appropriation of amounts paid during investigation, the penalty on the firm under Section 11AC and the penalty for delayed ER-8 filing are upheld; the personal penalty on the partner under Rule 26 is reduced to a moderative amount.

CENVAT credit on photocopies of Bills of Entry - procedural lapses not to deny CENVAT credit - validity of documents under Rule 9 of the CENVAT Credit Rules, 2004 - manufacture by simple operations under Section 2(f)(iii) of the Central Excise Act, 1944 - remand for verification of receipt and usage of inputs

CENVAT credit on photocopies of Bills of Entry - procedural lapses not to deny CENVAT credit - validity of documents under Rule 9 of the CENVAT Credit Rules, 2004 - Entitlement to CENVAT credit where credit was availed on photocopies of Bills of Entry - HELD THAT: - The Tribunal held that denial of CENVAT credit solely because the assessee relied on photocopies of Bills of Entry is not sustainable where receipt of inputs in the factory, duty paid character of the inputs and their use in manufacture are not in dispute. The decision relied upon earlier Tribunal precedents to the effect that the documents prescribed under the Rules are for verification and that procedural non compliance cannot operate to deny the substantive benefit of CENVAT credit. In the present case the Tribunal found no dispute as to receipt, duty payment and use of the inputs and concluded that the appellant was entitled to CENVAT credit on the basis of photocopies of the Bills of Entry. [Paras 6]

Appellant entitled to CENVAT credit on the basis of photocopies of the Bills of Entry; impugned denial set aside.

Remand for verification of receipt and usage of inputs - Scope and purpose of remand to the original authority - HELD THAT: - While allowing the appeal on the legal question of entitlement, the Tribunal directed a limited remand to the original authority for verification of documents relating to receipt and actual usage of the inputs. The remand was confined to verification of the material facts (receipt and use) which the Department could verify from its records; the Tribunal did not reopen the substantive entitlement once those factual prerequisites are satisfied. [Paras 6]

Matter remanded to the original authority for verification of documents relating to receipt and usage of the inputs; otherwise appeal allowed.

Final Conclusion: The appeal is allowed: the impugned order denying CENVAT credit solely on the ground that photocopies of Bills of Entry were produced is set aside; the appellant is entitled to CENVAT credit on that basis and the matter is remanded to the original authority for limited verification of receipt and usage of the inputs.

Cenvat credit on input services - place of removal - sale at factory gate - ownership and risk transfer until delivery - CBCE Circular No. 10654/4/2018 dt. 08.06.2018

Cenvat credit on input services - place of removal - sale at factory gate - CBCE Circular No. 10654/4/2018 dt. 08.06.2018 - Entitlement to avail Cenvat credit on courier service used for dispatching goods sold by the appellant through courier - HELD THAT: - The Tribunal examined whether denial of Cenvat credit on courier service was justified on the ground that the appellant sold goods at their factory gate. The Tribunal held that charging C.S.T. on an interstate sale does not ipso facto establish that the sale was effected at the factory gate. Applying CBCE Circular No. 10654/4/2018 dt. 08.06.2018 and the factual position that the appellant remained owner of the goods until delivery to the buyer (as evidenced by the courier's obligation to return goods when delivery is refused), the place of removal in the facts of this case is the buyer's place. Since the service (courier) was in relation to moving goods to the buyer and the place of removal is the buyer's place, the courier service qualifies as an input service for the appellant and Cenvat credit on such service is allowable. [Paras 5]

Cenvat credit on courier service is allowable; impugned orders denying credit are set aside.

Final Conclusion: The appeal is allowed and the orders denying Cenvat credit on courier service are set aside, with consequential relief, if any.

Input tax credit - input tax restrictions - burden of proof under Section 70 - bona fide purchasing dealer - re-assessment and demand notices - writ jurisdiction to challenge re-assessment

Input tax credit - input tax restrictions - bona fide purchasing dealer - burden of proof under Section 70 - Whether remittance of tax by the registered selling dealer is a condition precedent for the purchasing dealer to claim input tax credit against a valid invoice with tax component paid - HELD THAT: - The Court held that a bona fide purchasing dealer who demonstrates that he paid the tax component to a registered selling dealer is entitled to claim input tax credit and his entitlement cannot be made conditional upon the selling dealer having deposited that collected tax with the Government. The statutory scheme distinguishes between input tax and specified input tax restrictions; Section 11(a)(9) restricts credit where goods are purchased from a person required to be registered but who failed to register, but there is no provision making allowance of input credit contingent on the subsequent remittance by the selling dealer. Reliance was placed on earlier decisions of this Court and the Delhi High Court (confirmed by the Apex Court) which establish that once the purchaser satisfactorily proves payment to the selling dealer, loss to the revenue from the selling dealer's default is a matter for the Revenue to pursue against that selling dealer and cannot automatically defeat the purchaser's entitlement. The Court further observed that input credit may be disallowed where invoices are shown to be bogus, procured through collusion, or where the purchaser fails to discharge the burden of proof under Section 70 by producing genuine invoices and corroborative material; however, mere subsequent deregistration of the selling dealer or non-remittance by the selling dealer does not, by itself, disentitle a bona fide purchaser to credit. [Paras 6, 12, 17, 20]

Remittance of tax by the selling dealer is not a condition precedent to allow input tax credit to a bona fide purchasing dealer who has discharged the evidentiary burden; denial is only permissible where invoices are fraudulent, collusive, or the purchaser fails to prove the claim.

Re-assessment and demand notices - writ jurisdiction to challenge re-assessment - Validity of the impugned re-assessment orders and demand notices and appropriate remedy - HELD THAT: - The Court found that the prescribed authority disallowed input credit principally on the ground that the selling dealers had not remitted tax, a conclusion which cannot automatically defeat a bona fide purchaser's claim. The Court also noted factual issues regarding dates of deregistration and the genuineness/timing of transactions that require re-examination by the assessing authority. While there is no absolute bar to exercise writ jurisdiction, the Court set aside the re-assessment orders and demand notices and restored the proceedings to the prescribed authority for reconsideration in accordance with law. The assessing authority is directed to re-consider in light of the observations made, afford the petitioner an opportunity of hearing, and conclude reassessments expeditiously; if purchases relate to periods after de-registration of selling dealers, credit cannot be allowed. [Paras 21, 22]

Impugned re-assessment orders and demand notices set aside; proceedings remitted to the prescribed authority for fresh consideration and hearing in accordance with law.

Final Conclusion: Writ petitions allowed in part: the Court held that a bona fide purchasing dealer who proves payment to a registered selling dealer is not to be denied input tax credit merely because the selling dealer did not remit the tax; the re-assessment orders and demand notices for 2011-12 and 2012-13 are set aside and the matter is remitted to the prescribed authority for reconsideration after affording opportunity of hearing and in accordance with the observations made.

Independent application of mind by assessing officer - Assessing officer cannot be guided solely by the proposal of the enforcement/inspecting officer - Quasi-judicial duty of the assessing officer - Personal hearing and opportunity to produce documents before assessment - Remand for fresh assessment in accordance with Narasu's principle

Independent application of mind by assessing officer - Assessing officer cannot be guided solely by the proposal of the enforcement/inspecting officer - Quasi-judicial duty of the assessing officer - Whether the seven impugned assessment orders are vitiated by the assessing officer's failure to record reasons or independently apply mind and merely accepting the enforcement wing's proposal. - HELD THAT: - The Court examined the seven assessment orders and found them cryptic and devoid of any discussion explaining why the assessing authority accepted the enforcement wing's proposal. There is nothing in the orders to demonstrate what weighed with the assessing officer or that an independent application of mind occurred. Reliance on Narasu's principle and the Division Bench authority indicates that an assessing officer exercising quasi judicial functions must not mechanistically adopt an inspecting/enforcement proposal without reasons and independent evaluation. In the absence of recorded reasons showing independent consideration, the assessments cannot stand. [Paras 15, 17]

The seven impugned orders are set aside on the sole ground that the assessments were not made independently of the enforcement wing's proposal and do not record reasons for accepting that proposal.

Personal hearing and opportunity to produce documents before assessment - Remand for fresh assessment in accordance with Narasu's principle - Remedial course to be followed consequent to setting aside the impugned orders. - HELD THAT: - The Court directed procedural steps to cure the defect: the assessing authority must issue fresh notices, afford due acknowledgement, call for objections with supporting documents, and grant personal hearing. Thereafter the assessments for the seven years must be redone in accordance with law and the Narasu principle, ensuring independent application of mind. A timeline was fixed for issuance of notice (within a fortnight), for completion of the exercise (within eight weeks from the date of personal hearing), and for service of the redone orders under due acknowledgement. The Court clarified that if the assessee again does not avail the opportunity, the authority may proceed to redo the assessments without objections but still must comply with the principle of independent consideration. [Paras 17]

The matters are remitted to the first respondent to reissue notices, permit submission of objections and personal hearing, and to redo the assessments for 2008-09 to 2014-15 in accordance with Narasu's principle within the prescribed timelines.

Assessing officer cannot be guided solely by the proposal of the enforcement/inspecting officer - Whether an assessee who did not file objections or avail the earlier opportunity can, nonetheless, rely on Narasu's principle to challenge the assessment orders. - HELD THAT: - The Court acknowledged the Revenue's contention that Narasu arose where objections were filed, and highlighted that in the present case the assessee did not avail the earlier opportunity to produce documents or seek personal hearing. However, the Court did not adjudicate this question finally because the dispositive defect was the absence of recorded independent reasons in the impugned orders. Given the cryptic nature of the orders, the Court left open the broader question of entitlement to Narasu's protection where no objections were filed. [Paras 16]

Left open; the Court did not decide whether failure to file objections precludes reliance on Narasu's principle.

Final Conclusion: The seven assessment orders for 2008-09 to 2014-15 are set aside because they contain no recorded reasons showing independent application of mind and merely reflect the enforcement wing's proposals. The matters are remitted to the assessing authority to issue fresh notices, permit objections and personal hearing, and redo the assessments in accordance with law and the Narasu principle within the timelines fixed; the wider question whether an assessee who abstained from filing objections can invoke Narasu is left open.

Assessment based on web portal/website data - Procedural safeguard in comparative web data driven reassessment - Setting aside assessment for defective procedure - Remand for fresh assessment after adoption of centralized methodology/module - Continuation of attachment pending fresh adjudication

Assessment based on web portal/website data - Procedural safeguard in comparative web data driven reassessment - Setting aside assessment for defective procedure - Validity of the impugned reassessment made by relying on comparison with data available on other entities' websites/web portals - HELD THAT: - The Court applied and followed the reasoning in the earlier decision in M/s. JKM Graphics Solutions Private Limited, holding that making an assessment by relying on details from suppliers' or other entities' websites without an adequate departmental procedure is unsafe. In view of the Department's concession that no intra court challenge has been preferred against JKM and that a new procedure/module will be submitted, the Court concluded that the impugned assessment is vitiated by the procedure adopted and must be set aside. The Court therefore allowed the writ petition insofar as the assessment order dated 30.12.2016 is concerned. [Paras 10, 11]

Impugned assessment order dated 30.12.2016 is set aside.

Remand for fresh assessment after adoption of centralized methodology/module - Direction to the Department to frame/submit a new methodology/module and to recommence assessment proceedings - HELD THAT: - The Court directed that the respondent shall submit the new methodology/module (as informed would be done pursuant to JKM) and thereafter make a fresh assessment. The fresh assessment is to be undertaken after final orders are passed by the learned single Judge in the JKM matter and, from the date the new module becomes operative, the reassessment is to be completed within three months. This constitutes a remand for fresh consideration in accordance with the newly framed procedure. [Paras 11]

Respondent to submit new methodology/module and make fresh assessment; reassessment to be completed within three months from the module becoming operative.

Continuation of attachment pending fresh adjudication - Whether attachment of the assessee's immovable property should stand pending fresh assessment - HELD THAT: - Although the impugned assessment was set aside, the Court ordered that the prior attachment of the small piece of immovable property shall continue to remain in force until adjudication and completion of the fresh assessment. The Court also provided that if the fresh assessment is in favour of the assessee, the attachment will automatically stand vacated. [Paras 11]

Attachment shall continue until adjudication of fresh assessment; if reassessment is in favour of the assessee, attachment will be raised automatically.

Final Conclusion: The assessment dated 30.12.2016 is set aside as being procedurally unsafe for having been founded on website/web portal comparisons without an approved departmental mechanism; the Department is directed to submit a new methodology/module and to complete a fresh assessment within three months of that module becoming operative, while the existing attachment on the assessee's immovable property shall continue until the fresh adjudication, and will be lifted automatically if the reassessment is in the assessee's favour.

Rectification of mistakes - mistake apparent from the record - sales in the course of import - re-assessment proceedings - functus officio - prohibition on review by the assessing authority

Rectification of mistakes - mistake apparent from the record - prohibition on review by the assessing authority - Whether a rectification application under Section 69 of the KVAT Act may be allowed to re-examine individual transactions or re-open concluded factual findings made in the assessment for April 2012 to March 2013. - HELD THAT: - Section 69 permits amendment only to rectify a "mistake apparent from the record" and its scope is limited. The phrase cannot be stretched to permit re examination, re analysis or revisiting of concluded factual issues or documents which were before the authority when the order was passed. Permitting the Assessing Officer to re examine individual transactions as sought by the petitioner would amount to review of the decision by the same authority, which is impermissible. Ordinarily the Assessing Officer becomes functus officio after passing the assessment order; only mistakes apparent on the face of the record fall within the narrow remedial power under Section 69. The petitioner's apprehension and request for re examination of individual transactions therefore does not fall within the statutory rectification jurisdiction. [Paras 8]

Rectification under Section 69 cannot be used to re open or re analyse concluded factual findings or individual transactions; the rectification application was rightly rejected.

Sales in the course of import - re-assessment proceedings - functus officio - Whether the tribunal's direction in respect of assessment year 2006 07 operates to compel re assessment or repeated findings in the reassessment for April 2012 to March 2013, or requires the Assessing Officer to reconsider documents afresh. - HELD THAT: - A decision or remand pertaining to assessment year 2006 07 stands on its own facts and cannot be mechanically applied to a different and distinct assessment year. Each assessment year is separate; an earlier order relating to 2006 07 does not automatically bind or determine the consequences for 2012 13. The First Appellate Authority exercises jurisdiction co extensive with the Assessing Authority in examining documents; re examination by the Assessing Officer of matters already concluded would be improper. The Court found no ground to interfere with the assessment order or the endorsement declining rectification on the basis that the KAT's direction for 2006 07 would be repeated for 2012 13. [Paras 8, 9]

The KAT order in respect of 2006 07 does not mandate re assessment for April 2012 to March 2013; no interference with the assessment order or endorsement is warranted.

Final Conclusion: Writ petition dismissed. Liberty granted to the petitioner to file a statutory appeal in accordance with law; if filed within two weeks from receipt of certified copy, the First Appellate Authority shall consider it on merits without raising limitation objections.

Revisional powers under Section 25 of The Wealth Tax Act, 1957 - agricultural land versus urban land classification - remand for fresh consideration - opportunity of personal hearing

Revisional powers under Section 25 of The Wealth Tax Act, 1957 - remand for fresh consideration - Validity of the impugned revisional order dated 23.03.2018 and whether it should be set aside to permit fresh adjudication. - HELD THAT: - The High Court set aside the impugned order passed by the first respondent under Section 25 of the Wealth Tax Act, 1957, not on the merits of the agricultural-land plea but to enable the revisional authority to re-hear the matter afresh in the light of the new plea raised by the writ petitioner. The Court observed that the controversy turns on factual disputes concerning classification of the land and therefore refrained from expressing any opinion on the merits. The setting aside is expressly limited to facilitating a fresh exercise of revisional jurisdiction and does not constitute a decision on the substantive claim.

Impugned order dated 23.03.2018 is set aside to permit fresh consideration by the revisional authority.

Agricultural land versus urban land classification - remand for fresh consideration - Whether the revisional authority must re-examine the writ petitioner's new plea that the lands are agricultural land and decide all related contentions afresh. - HELD THAT: - The Court directed that the revisional authority shall hear the revision afresh in light of the additional/new plea that the lands are agricultural, leaving all pleas, arguments and questions pertaining to that plea open for adjudication. The Court noted the Revenue's contested position that lands declared as 'vacant sites' and not cultivated cannot be treated as agricultural despite revenue records, and concluded that the factual nature of the dispute necessitates fresh consideration by the revisional authority rather than appellate determination by the High Court.

Revisional authority to re-hear and decide the agricultural-land plea and all attendant contentions in accordance with law.

Opportunity of personal hearing - remand for fresh consideration - Procedural directions governing the fresh hearing - requirement of personal hearing, time-frame for re-adjudication and service of the fresh order. - HELD THAT: - The Court mandated that the revisional authority shall afford the writ petitioner an opportunity of personal hearing before passing orders afresh, complete the re-hearing and decide the matter within three months from receipt of the High Court's order, and serve a copy of the fresh decision on the petitioner with due acknowledgement within seven working days of that decision. These directions are procedural and intended to ensure expeditious and fair reconsideration of the factual and legal issues raised by the new plea.

Revisional authority to provide personal hearing, decide the matter within three months, and serve the fresh order within seven working days.

Final Conclusion: The High Court set aside the revisional order dated 23.03.2018 solely to enable the revisional authority to re-hear the assessment year 2008-09 case afresh on the writ petitioner's new plea that the lands are agricultural; all related contentions are left open for reconsideration, with directions for personal hearing, completion within three months and service of the fresh order within seven working days.