TaxTMI Updates e-Newsletter
Jun 22,2024

Anticipatory bail - Prima facie assessment - Power to arrest and custodial interrogation as last resort - Non-prejudice to ongoing investigation - Cooperation with investigation as bail condition

Anticipatory bail - Cooperation with investigation as bail condition - Grant of anticipatory bail to the petitioners on conditions - HELD THAT: - Having applied the established principles governing anticipatory bail, including consideration of the nature and gravity of allegations, antecedents, likelihood of absconding, and potential interference with investigation, the Court found that custodial interrogation was not warranted. The Court observed that the principal part of the investigation is documentary and largely completed, petitioners have permanent abode, have cooperated and expressed willingness to cooperate, and there is no material suggesting likelihood of tampering with evidence or absconding. Balancing the liberty interest and the need for an unprejudiced investigation, the Court exercised its discretion to grant pre-arrest bail with specified conditions. The conditions require surrender within two weeks, furnishing of personal bond with two sureties, appearance as and when required, cooperation with investigation, and prohibition on inducement or threats to witnesses, with liberty to the prosecution to move for cancellation if cooperation is not forthcoming. [Paras 53, 54, 55, 56, 57]

Anticipatory bail granted to the petitioners subject to the conditions specified by the Court.

Prima facie assessment - Non-prejudice to ongoing investigation - Power to arrest and custodial interrogation as last resort - Whether granting anticipatory bail would prejudice the ongoing investigation or enforcement proceedings under the G.S.T. regime - HELD THAT: - The Court noted that a substantial portion of the investigation, particularly documentary aspects, has been completed by the investigating agencies (including D.G.G.I.), and that the matter is under consideration by the competent authority. Without finally adjudicating competing contentions on the exclusivity of proceedings under the G.S.T. enactment, the Court concluded on the present applications that release of the accused on anticipatory bail is unlikely to prejudice the ongoing investigation. The Court reiterated the principle that arrest must be justified and not routine, and that custodial detention is to be a last resort, especially where there is no material suggesting likelihood of absconding or tampering with evidence. [Paras 50, 51, 54, 55, 56]

Court held that release on anticipatory bail would not prejudice the ongoing investigation and therefore would not be barred on that ground in the present proceedings.

Final Conclusion: The criminal petitions are allowed: anticipatory bail is granted to the petitioners on the conditions specified by the Court; the Investigating Agency remains free to continue the investigation and to seek cancellation of bail if petitioners fail to cooperate.

Principles of natural justice - maintainability of writ petition despite alternative remedy - alternative efficacious remedy - show cause notice and requirement of particulars - revocation of cancellation under the GST Act - appeal under the GST Act - discretion under Article 226 of the Constitution

Principles of natural justice - maintainability of writ petition despite alternative remedy - show cause notice and requirement of particulars - discretion under Article 226 of the Constitution - Whether the writ petition is maintainable on the ground of violation of principles of natural justice despite availability of alternative statutory remedies and whether the show cause notice lacked required particulars. - HELD THAT: - The Court acknowledged the settled principle that High Courts possess discretionary jurisdiction under Article 226 and ordinarily refrain from entertaining writ petitions where an effective alternative remedy exists, but recognised established exceptions including where there is a violation of principles of natural justice. On scrutiny of the show cause notice dated 22.06.2023 the Court found that the notice contained the required particulars of the non-existent dealers alleged to have issued bogus invoices to the petitioner. Consequently, the petitioner's contention that principles of natural justice were violated for want of particulars was repelled. Noting that the petitioner had not availed the alternative remedies available under the GST law (revocation under the GST Act or appeal), the Court held that no relief in writ jurisdiction was warranted. In exercise of its discretion and having regard to the practical hardship caused by cancellation of registration, the Court declined to grant substantive relief but afforded the petitioner a short opportunity to invoke the statutory remedies, directing that if the petitioner files an application for revocation or an appeal within the stipulated period, the concerned authority shall decide it on merits after affording hearing to both parties. [Paras 8, 9]

Writ petition dismissed; the show cause notice was held to contain required particulars and there was no violation of principles of natural justice, but petitioner given 15 days to seek statutory remedies and the authority directed to decide on merits after hearing if invoked.

Final Conclusion: The writ petition is dismissed on merits for non-availing of alternative statutory remedies and because the show cause notice was found to contain requisite particulars; however, the petitioner is granted 15 days to file an application for revocation or an appeal under the GST law, and the concerned authority is directed to decide the same on merits after affording an opportunity of hearing.

Violation of principles of natural justice - Maintainability of writ petition despite availability of alternative efficacious remedy - Alternative remedy by way of revocation of cancellation or statutory appeal - Cancellation of GST registration - Opportunity of hearing and adjudication on merits

Maintainability of writ petition despite availability of alternative efficacious remedy - Violation of principles of natural justice - Whether the writ petition is maintainable notwithstanding the availability of alternative remedies where violation of principles of natural justice is alleged. - HELD THAT: - The Court recalled the settled principle that the High Court's writ jurisdiction under Article 226 is discretionary and ordinarily restrained where an effective and efficacious alternate remedy exists, but recognised established exceptions including cases alleging breach of natural justice. Applying this principle to the facts, the Court examined the show cause notice and the petitioner's contention that incriminating reports relied upon were not furnished and thus natural justice was violated. The Court found that the exception for alleged violation of natural justice would permit maintenance of a writ petition in appropriate cases, but on the material before it the show cause notice did contain the required particulars of the dealers alleged to have supplied bogus invoices. Consequently, the petitioner's reliance on the natural justice exception was without substance on the present record. [Paras 7, 8]

The writ petition is not maintainable on the ground urged because the show cause notice contains required particulars; the exception for breach of natural justice does not assist the petitioner in the facts of this case.

Cancellation of GST registration - Alternative remedy by way of revocation of cancellation or statutory appeal - Whether the petitioner, whose GST registration has been cancelled, must be denied relief because he has not availed alternative statutory remedies. - HELD THAT: - The Court observed that the petitioner admittedly has alternative statutory remedies - filing an application for revocation under the GST law or preferring an appeal to the Appellate Authority - which he had not pursued. Having found no substance in the contention of violation of natural justice, the Court concluded that the availability of alternative remedies weighed against granting relief in the writ. Nevertheless, recognising the practical consequence of cancellation on the petitioner's ability to carry on business, the Court exercised discretion to permit the petitioner a limited opportunity to invoke the statutory remedies within a prescribed short period. [Paras 8, 9]

The writ petition is dismissed for non-availment of alternative remedies, but the petitioner is granted a limited time to invoke the statutory remedies.

Opportunity of hearing and adjudication on merits - Alternative remedy by way of revocation of cancellation or statutory appeal - Whether the authorities should be directed to consider any revocation application or appeal on merits and afford hearing if the petitioner avails the permitted opportunity. - HELD THAT: - In view of the cancellation's impact and in the exercise of its supervisory jurisdiction, the Court directed that if the petitioner files an application for revocation under the GST law or an appeal within the stipulated period, the concerned authority shall decide the same on merits after affording opportunity of hearing to both parties. This direction is procedural and intended to ensure expeditious adjudication of the statutory remedy; it does not adjudicate the merits of the underlying cancellation beyond requiring a hearing and decision on merits. [Paras 9]

If the petitioner files a revocation application or appeal within 15 days of receipt of the order, the concerned authority shall consider and decide it on merits after affording an opportunity of hearing.

Final Conclusion: The writ petition is dismissed. The petitioner is permitted to file either an application for revocation of cancellation under the GST law or an appeal within 15 days from receipt of this order, and the concerned authority is directed to decide the same on merits after giving both parties an opportunity of hearing.

Principles of natural justice - Maintainability of writ petition despite availability of alternative remedy - Availability of alternative remedy by way of revocation under Section 30 and appeal under Section 107 of the APGST/CGST regime - Duty to furnish incriminating material with a show cause notice - Discretion of High Court under Article 226

Principles of natural justice - Duty to furnish incriminating material with show cause notice - Whether the show cause notice and impugned cancellation order violated principles of natural justice by failing to furnish requisite particulars and incriminating material to the petitioner. - HELD THAT: - The Court examined the show cause notice dated 23.06.2023 and the petitioner's contention that reports relied upon by the first respondent were not furnished, thereby impeding effective reply and violating principles of natural justice. The Court held that the show cause notice contained the required particulars of the non existent dealers alleged to have supplied bogus tax invoices to the petitioner and found no substance in the contention that the notice was bereft of particulars or that principles of natural justice were thereby violated. Consequently, the petitioner's grievance on this ground was rejected. [Paras 8]

The contention of violation of principles of natural justice by omission of required particulars in the show cause notice is negatived.

Maintainability of writ petition despite availability of alternative remedy - Availability of alternative remedy by way of revocation under Section 30 and appeal under Section 107 of the APGST/CGST regime - Discretion of High Court under Article 226 - Whether the writ petition is maintainable notwithstanding existence of efficacious alternative statutory remedies, and what relief (if any) should be afforded. - HELD THAT: - Applying settled principle that the High Court ordinarily will not entertain a writ where effective alternative remedy exists, but noting exceptions (including cases alleging violation of natural justice), the Court considered competing contentions. Since the Court found no breach of natural justice on the material before it and the petitioner failed to avail the statutory remedies of seeking revocation under Section 30 or preferring an appeal under Section 107, the writ petition was not entitled to substantive relief. Exercising discretion, however, the Court granted a limited procedural opportunity: the petitioner may either file an application under Section 30 for revocation of cancellation or prefer an appeal under the Act within the time prescribed by this order; on such filing the concerned authority or appellate forum must decide the matter on merits after affording opportunity of hearing to both parties. [Paras 8, 9]

Writ petition dismissed for want of availment of alternative statutory remedies; petitioner granted 15 days from receipt of this order to file either a Section 30 revocation application or an appeal, and the concerned authority/appellate forum to decide on merits after hearing.

Final Conclusion: Writ petition dismissed. No violation of principles of natural justice found in the show cause notice; petitioner given a limited opportunity to file either a Section 30 revocation application or an appeal within 15 days from receipt of this order, and the concerned authority/appellate forum directed to decide on merits after affording hearing to both parties. No costs.

Principles of natural justice - Reasonable opportunity to contest tax demand - Service of notice through electronic portal and its consequences - Confirmation of tax proposal for non-participation - Personal hearing - Remand for fresh consideration - Interim conditional compliance by remittance

Principles of natural justice - Reasonable opportunity to contest tax demand - Service of notice through electronic portal and its consequences - Confirmation of tax proposal for non-participation - Whether the impugned assessment orders could be sustained when the petitioner had not filed objections or attended personal hearing and claimed unawareness of proceedings due to notices being uploaded on the GST portal - HELD THAT: - The court noted that the impugned orders recorded confirmation of the tax proposal because the petitioner did not file written objections or attend the personal hearing. Having accepted the petitioner's assertion that the show cause notice and orders were uploaded under a portal tab and that the petitioner was unaware of the proceedings, the court held that the interests of justice required affording the petitioner an opportunity to contest the demand on merits. The finding is that procedural non-participation coupled with claimed non-communication through other modes justified setting aside the orders to protect principles of natural justice and to ensure a reasonable opportunity to contest the tax demand. [Paras 5]

Impugned orders dated 10.07.2023 set aside and matter remanded for reconsideration to provide petitioner an opportunity to contest the tax demand on merits.

Remand for fresh consideration - Personal hearing - Interim conditional compliance by remittance - Terms on which the matters were to be remanded and the procedural steps to be followed on remand - HELD THAT: - The court directed remand of the matters for fresh consideration subject to the petitioner making an interim conditional compliance by remitting 10% of the disputed tax demand for each assessment period within 15 days of receipt of this order. The petitioner was permitted to submit a reply to the respective show cause notices within the same period. Upon receipt of the petitioner's reply and satisfaction of the remittance condition, the respondent was directed to afford a reasonable opportunity, including a personal hearing, and pass fresh orders within three months from receipt of the reply. These directions balance the need to protect principles of natural justice with the respondent's interest in securing part compliance pending re-adjudication. [Paras 6]

Matters remanded on condition of remittance of 10% of disputed tax demand for each period within 15 days; petitioner to file reply; respondent to provide hearing and pass fresh orders within three months thereafter.

Final Conclusion: Writ petitions allowed by setting aside the impugned orders dated 10.07.2023 and remanding the matters for fresh consideration on the stated conditional remittance and procedural timetable; no order as to costs.

Quashing of assessment order - opportunity of personal hearing - unilateral recovery from electronic credit ledger and limitation of revenue's powers to block ledger - exercise of writ jurisdiction despite limitation under Section 107 of GST Act, 2017 - remand for fresh consideration and fresh representation

Exercise of writ jurisdiction despite limitation under Section 107 of GST Act, 2017 - Maintainability of writ petition filed after the assessment order dated 28.12.2023 in view of limitation and availability of statutory appeal remedy. - HELD THAT: - The Court noted the respondent's reliance on precedents concerning delay and the availability of statutory remedies but, having considered the facts and submissions, declined to dismiss the petition on the ground of limitation. Although the assessment order postdated the notices and the statutory appeal period under Section 107 was pointed out by the respondent, the High Court exercised its writ jurisdiction and proceeded to grant equitable relief by quashing the impugned order and directing a fresh consideration in the limited manner indicated. The Court's exercise of discretion was influenced by the small amount of tax involved and partial recovery already effected. [Paras 9, 11]

Writ petition not dismissed on limitation; Court exercised writ jurisdiction and proceeded to grant relief.

Opportunity of personal hearing - quashing of assessment order - unilateral recovery from electronic credit ledger and limitation of revenue's powers to block ledger - remand for fresh consideration and fresh representation - Validity of the impugned assessment order dated 28.12.2023 in light of alleged non-receipt/awareness of portal notices, proprietor's hospitalization, and unilateral recoveries from bank account and electronic credit ledger. - HELD THAT: - The Court found that the impugned order confirmed demand after recording that the petitioner had not availed personal hearing or filed a reply. The petitioner produced evidence of hospitalization of the proprietor and asserted non-awareness of portal notices. The record showed that a sum had already been recovered from the petitioner's account and that amounts had been further debited from the electronic credit ledger, whereas the revenue's power in that regard is restricted to blocking the ledger. In view of these circumstances, the High Court quashed the impugned order but treated it as an addendum to the earlier show cause notice and granted the petitioner liberty to make a fresh representation within 30 days. The respondent was directed to pass a fresh order on merits after hearing the petitioner, preferably within three months, thereby remitting the matter for fresh consideration rather than deciding the substantive tax liability in this writ. [Paras 6, 7, 11, 12, 13]

Impugned order quashed and treated as addendum to the show cause notice; petitioner granted 30 days to make fresh representation; respondent to decide afresh after hearing the petitioner preferably within three months.

Final Conclusion: The High Court quashed the assessment order dated 28.12.2023 for AY 2017-18, treated it as an addendum to the antecedent show cause notice, granted the petitioner 30 days to file a fresh representation, and directed the respondent to pass a fresh, merit-based order after hearing the petitioner preferably within three months; no costs.

Quashing of assessment/order - treatment of order as addendum to show cause notice - deposit as pre-condition for adjudication - opportunity of hearing / filing reply - remand for fresh adjudication on merits - defreeze of bank account subject to recovery

Quashing of assessment/order - treatment of order as addendum to show cause notice - opportunity of hearing / filing reply - deposit as pre-condition for adjudication - Impugned orders dated 31.07.2023 and 16.08.2023 quashed and directed to be treated as an addendum to the show cause notice; petitioner to file reply and deposit 10% of disputed tax from Electronic Cash Ledger as pre-condition for adjudication. - HELD THAT: - The Court accepted the petitioner's plea that notices and orders hosted on the GST common portal went unnoticed and recorded the petitioner's willingness to deposit 10% of the disputed tax. Exercising discretionary writ jurisdiction, the Court set aside the impugned orders and directed that they be treated as an addendum to the existing show cause notice. The petitioner is granted an opportunity to file a reply within 30 days from receipt of this order and is directed to pay the 10% amount from its Electronic Cash Register within that period. The respondent is required to pass final orders on merits and in accordance with law after considering the petitioner's submissions. [Paras 7, 8]

Impugned orders quashed; treated as addendum to show cause notice; petitioner to file reply within 30 days and deposit 10% from Electronic Cash Register as directed.

Remand for fresh adjudication on merits - opportunity of hearing / filing reply - Final adjudication remitted to the respondent for fresh consideration on merits after compliance by the petitioner. - HELD THAT: - The Court remitted the matter to the respondent to decide the disputed demand on merits and in accordance with law, after the petitioner files the reply and makes the 10% deposit. A fixed timeline was imposed to ensure expedition: the respondent shall pass final orders on merits within three months after the petitioner's compliance, thereby requiring fresh determination rather than endorsing the earlier orders. [Paras 8]

Respondent directed to pass final orders on merits within three months after the petitioner files reply and deposits the directed amount.

Defreeze of bank account subject to recovery - deposit as pre-condition for adjudication - Petitioner's frozen bank account ordered to be defrozen to the extent of any available balance for recovery of the directed 10% amount. - HELD THAT: - Noting that the petitioner's bank account had been frozen, the Court ordered the account to be defrozen so that the directed 10% deposit may be recovered if any amount is available in the account. This relief was granted subject to recovery of the mandated deposit, thereby facilitating compliance with the condition imposed for fresh adjudication. [Paras 9]

Bank account to be defrozen after recovering the 10% amount, if any amount is available therein.

Final Conclusion: Writ petitions allowed; impugned orders quashed and treated as addendum to the show cause notice; petitioner to file reply within 30 days and deposit 10% from Electronic Cash Register; respondent to decide on merits within three months thereafter; frozen bank account to be defrozen for recovery of the directed deposit.

Cancellation of GST registration - revival of GST registration on compliance with conditions - filing of returns and payment of tax, interest and fee to regularise default - non-utilisation of Input Tax Credit pending departmental scrutiny and approval - conditional relief by following precedent - directions to GST Network to enable electronic filing and payment

Revival of GST registration on compliance with conditions - filing of returns and payment of tax, interest and fee to regularise default - non-utilisation of Input Tax Credit pending departmental scrutiny and approval - directions to GST Network to enable electronic filing and payment - conditional relief by following precedent - Registration cancelled under the GST regime was ordered to be restored subject to specified conditions and directions following the precedent in Suguna Cutpiece. - HELD THAT: - Relying on the decision in Suguna Cutpiece, the court declined to adjudicate the matter on merits and granted conditional relief. The petitioner was directed to file returns for the period prior to cancellation and to discharge the tax dues together with interest and the fee for belated filing within forty five days of service of the order. The court expressly prohibited adjustment of such payments from any unutilised or unclaimed Input Tax Credit until that credit is scrutinised and approved by a competent departmental officer; only approved Input Tax Credit may thereafter be utilised to discharge future tax liabilities. The petitioner was also required to file returns and pay GST for the period subsequent to cancellation declaring correct values of supplies, and any Input Tax Credit earned for those periods would likewise be utilisable only after departmental scrutiny and approval. Upon payment of tax, penalty and uploading of returns as directed, the registration would stand revived forthwith. The respondents were directed to instruct the GST Network to modify the GST web portal architecture to permit filing of returns and payment, and to complete that exercise within thirty days of service. The restoration was explicitly made conditional upon compliance with these directions.

Writ petition allowed by directing conditional restoration of GST registration on compliance with filing of returns, payment of tax, interest and fees, non-utilisation of ITC until departmental scrutiny and approval, and enabling portal changes by GST Network within specified timelines.

Final Conclusion: The writ petition is disposed of by directing conditional revival of the petitioner's GST registration on compliance with the specified filing, payment and ITC scrutiny conditions and by directing respondents to effect necessary changes in the GST portal; matter disposed of with no costs.

Adjudication to be kept in abeyance pending decision of the Nine Judge Constitution Bench on the nature of royalty - no recovery of GST on royalty until the Nine Judge Constitution Bench decides - opportunity to submit objections/representations and to be heard before adjudication - disposal of writ petitions on terms of a Division Bench judgment

Disposal of writ petitions on terms of a Division Bench judgment - Disposal of the petitioner's writ petitions on the same terms as the Division Bench decision in A. Venkatachalam. - HELD THAT: - The High Court, having placed reliance on the Division Bench judgment (reproduced at paragraph 4), disposed of the present petitions by applying the directions issued in that decision. The Court permitted the petitioner to submit his reply to the intimation within a maximum period of four weeks from the date of receipt of this order and expressly disposed of W.P. Nos. 5624 and 5631 of 2024 on those terms. The order consequentially closed the connected miscellaneous petitions. The disposal is therefore purely by reference to and on the terms of the earlier Division Bench ruling rather than a fresh adjudication on merits by this Court. [Paras 5, 6]

Petitions disposed of on the same terms as the Division Bench judgment; petitioner permitted to submit reply within four weeks; connected W.M.Ps closed.

Opportunity to submit objections/representations and to be heard before adjudication - adjudication to be kept in abeyance pending decision of the Nine Judge Constitution Bench on the nature of royalty - no recovery of GST on royalty until the Nine Judge Constitution Bench decides - Application of the Division Bench directions regarding submission of objections, conduct of adjudication, and interim protection pending the Nine Judge Constitution Bench decision. - HELD THAT: - By adopting the Division Bench directions (recorded at paragraph 4), the Court required that where challenges are to show cause notices, petitioners shall submit objections/representations within four weeks; upon receipt, the authority shall adjudicate on merits after affording a reasonable opportunity of being heard, but orders of adjudication shall be kept in abeyance until the Nine Judge Constitution Bench decides the nature of royalty. It was also recorded that there shall be no recovery of GST on royalty until the Nine Judge Constitution Bench delivers its decision. The present petitions were disposed accordingly, leaving all contentions open to be raised in appropriate proceedings thereafter. [Paras 4, 5]

Division Bench directions govern further proceedings: objections to be filed, adjudication to be stayed/kept in abeyance until the Nine Judge Bench decides, and no recovery of GST on royalty in the interim.

Final Conclusion: Writ petitions disposed of by adopting the Division Bench directions: petitioner may submit objections/representations within four weeks; adjudication to proceed on merits after hearing but kept in abeyance until the Nine Judge Constitution Bench decides the nature of royalty; no recovery of GST on royalty until that decision; connected interim petitions closed; no costs.

Admissibility of application for advance ruling - Advance ruling not admissible where question is pending or decided in applicant's proceedings - Authority's power to reject application under Section 98(2) - Liability to pay tax under reverse charge mechanism on royalty - False declaration in Form GST ARA-01

Admissibility of application for advance ruling - Advance ruling not admissible where question is pending or decided in applicant's proceedings - Authority's power to reject application under Section 98(2) - False declaration in Form GST ARA-01 - Liability to pay tax under reverse charge mechanism on royalty - Application for advance ruling on who is primarily liable to pay GST under RCM on royalty (SJVN Limited or its contractor) is not admitted and is rejected. - HELD THAT: - The Authority examined admissibility without deciding the merits and found that the applicant had been served DRC-01A notices dated 19.02.2022 and Notices under Section 73 in respect of royalty on mining lease for the financial years 2019-20, 2020-21 and 2021-22. The question raised in the application therefore coincides with a question already pending in proceedings against the applicant. Under sub section (2) of Section 98 the Authority shall not admit an application where the question raised is already pending or decided in any proceedings in the applicant's case under the Act. The applicant's declaration in Form GST ARA-01 that the question was not pending or decided was found to be incorrect, and the applicant admitted receipt of the notices during personal hearing. Having given opportunity of hearing, the Authority proceeded to reject the application under the said statutory provision without entering into the merits of the dispute on liability under RCM. [Paras 9, 11, 12, 13, 15]

Application not admitted and rejected under Section 98(2) as the question is already the subject of pending proceedings; merits not examined.

Final Conclusion: The Authority rejected the advance ruling application and did not decide on the substantive question of primary liability to pay GST under RCM on royalty, on the ground that the question was already pending in proceedings initiated against the applicant; the application is therefore not admitted under Section 98(2).

Onus of proof under Section 68 - unexplained cash credit - genuineness of transactions - additions based on conjecture and surmise - concurrent findings of fact - substantial question of law

Onus of proof under Section 68 - genuineness of transactions - unexplained cash credit - additions based on conjecture and surmise - Whether unsecured loans taken by the assessee were to be treated as unexplained and disallowed as cash credits - HELD THAT: - The courts below concurrently found that the assessee discharged the onus of proving the identity, creditworthiness and genuineness of the lenders as required under Section 68. Documentary evidence on the record - loan confirmations from the creditors, bank statements showing transactions through banking channels, tax returns and identities of the lending companies - supported the genuineness of the loans. The assessing officer's addition was founded on a statement recorded during search and seizure which was subsequently retracted; the tribunal and the Commissioner (Appeals) held that, in view of the documentary evidence and corroboration, the addition was made on conjecture and surmise and could not be sustained. The appellate findings upholding the genuineness of the unsecured loans were accordingly affirmed. [Paras 3, 4, 6, 7]

Addition disallowing the unsecured loans as unexplained cash credit is reversed; the assessee discharged the onus under Section 68 and the addition rested on conjecture and surmise.

Concurrent findings of fact - substantial question of law - Whether the appeal raised any substantial question of law warranting interference with concurrent factual findings - HELD THAT: - The High Court reviewed the record of concurrent factual findings in two rounds of appeal, which favoured the assessee on the core factual controversy regarding the loans. The court found no substantial question of law arising from the matter because the dispute turned on evaluation of evidence and concurrent findings of fact. Consequently, there was no basis for interfering with the tribunal's order. [Paras 3, 8]

No substantial question of law arises; appeal dismissed.

Final Conclusion: The High Court upheld the concurrent appellate findings that the unsecured loans were genuine and that the addition as unexplained cash credit could not be sustained, and dismissed the appeal for lack of any substantial question of law.

Violation of principles of natural justice - faceless assessment - assessment under Section 143(3) read with Section 144B of the Income Tax Act, 1961 - service and time for response - consideration of response filed by the assessee - mechanical approach in assessment - remand for fresh decision - opportunity of personal hearing via video conference

Violation of principles of natural justice - service and time for response - consideration of response filed by the assessee - faceless assessment - mechanical approach in assessment - remand for fresh decision - opportunity of personal hearing via video conference - Assessment order dated 31st March 2024 set aside for failure to afford reasonable opportunity and for not considering the response filed by the petitioner; matter remanded with directions to consider the response and grant hearing by online video conference. - HELD THAT: - The show-cause notice was digitally signed on 26th March 2024 at about 18:17:08 hours, leaving the assessee barely 24 hours to respond by 19:00 hours on 27th March 2024, whereas 25th and 26th March 2024 were holidays on account of the Holi festival. The petitioner nevertheless filed a response on 30th March 2024, as evidenced by the online acknowledgment. The faceless assessment unit recorded that no reply had been filed within the stipulated time and did not consider the response on record, which the Court treated as a mechanical approach inconsistent with the obligation to consider submissions once filed. For these reasons the assessment order could not be sustained. The matter is remanded to the faceless assessment unit to take a fresh decision after considering the response already submitted and after affording the petitioner an opportunity of personal hearing by providing an online video conference link, with disposal preferably within six weeks from communication of the order. [Paras 11, 12, 13, 14]

Order dated 31st March 2024 set aside; matter remanded to faceless assessment unit to decide afresh after considering the response and granting an online video-conference hearing within six weeks.

Final Conclusion: Writ petition allowed in part: assessment order of 31st March 2024 quashed for breach of natural justice and failure to consider the response; matter remitted to the faceless assessment unit to decide afresh after considering the response and granting an online personal hearing, to be disposed of preferably within six weeks.

Deeming fiction - Ex post facto law - Article 20 right against retrospective criminal liability - Section 72(c) deeming provision - Criminal liability under Sections 50 and 52 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 - One-time declaration regime under Section 59

Article 20 right against retrospective criminal liability - Ex post facto law - Criminal proceedings under the Act against the petitioners for acts preceding the Act's commencement are constitutionally untenable under Article 20 - HELD THAT: - The Court held that criminal liability cannot be imposed by subsequent legislation for acts which were not criminal when committed. Applying the constitutional prohibition against ex post facto criminal laws, the Court found that the offences alleged (non disclosure and false statements under Sections 50 and 52) arose from facts occurring between 2008 and 2010, long before the Act came into force. Reliance on a deeming provision to treat pre enactment acquisitions as occurring later, so as to attract penal consequences, would have the effect of creating retrospective criminal liability and thus fall foul of Article 20. The Court considered authoritative precedents on the limits of legal fictions and the principle that a deeming fiction must not be extended beyond its purpose, and concluded that the prosecution could not be sustained consistent with the fundamental right against ex post facto criminalisation. [Paras 12, 13, 15]

Proceedings against the petitioners under the Act are barred by Article 20 and are quashed.

Section 72(c) deeming provision - Deeming fiction - Criminal liability under Sections 50 and 52 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 - Section 72(c) cannot be invoked to create retrospective criminal liability in respect of assets/acquisitions prior to the Act's commencement so as to sustain prosecution under Sections 50 and 52 - HELD THAT: - The Court examined Section 72(c), which deems an asset acquired before commencement to be 'deemed to have been acquired' in the year a notice under Section 10 is issued, and assessed whether that deeming could be used to fasten criminal liability for pre Act conduct. Noting that a deeming fiction must be confined to the purpose and language of the provision creating it, and considering jurisprudence restricting extension of such fictions where they would result in retrospective penalisation, the Court held that applying Section 72(c) to convert pre enactment acts into offences under Chapters V would impermissibly extend the fiction to create ex post facto criminal liability. The court therefore rejected the prosecution's reliance on Section 72(c) to sustain criminal complaints based on events of 2008-2010. [Paras 11, 12, 14, 15]

Section 72(c) cannot be employed to render pre Act events criminal under Sections 50 and 52; the complaints founded on such application are invalid.

Final Conclusion: The petitions are allowed and criminal proceedings registered under Sections 50 and 52 of the Black Money Act, arising from events in 2008-2010 and premised on Section 72(c) deeming, are quashed.

Rectification under section 154 to correct apparent mistakes - deduction under section 80P - netting of disallowance against proportionate expenses - limits of rectification powers - no roving enquiries

Rectification under section 154 to correct apparent mistakes - deduction under section 80P - limits of rectification powers - no roving enquiries - Validity and maintainability of the Assessing Officer's rectification under section 154 insofar as it recomputed and reduced the disallowance of the claimed section 80P deduction - HELD THAT: - The Tribunal considered whether the section 154 proceedings before the Assessing Officer, which recomputed the earlier disallowance on a netting basis and reduced the disallowance after proportionate expenses, were permissible. Applying the settled principle that rectification under section 154 is confined to correction of apparent mistakes and does not permit carrying out roving enquiries, the Tribunal found no basis to interfere with the lower authorities. The Assessing Officer's rectification, and the National Faceless Appeal Centre's confirmation of the recomputed disallowance, were treated as within the scope of section 154 correction rather than as an impermissible re-opening of assessment. Reliance was placed on the principle in T S Balram ITO vs. Volkart Bros. that section 154 cannot be used for extensive re-examination of issues. In view of this, the assessee's challenge to the rectification was rejected and the related stay applications were dismissed. [Paras 3, 5]

Assessee's appeals against the section 154 rectification (for AYs 2020-2021 and 2021-2022) and the corresponding stay applications are dismissed; the recomputed disallowance confirmed by the lower authority is sustained.

Final Conclusion: Appeals dismissed: the rectification under section 154 which recomputed and reduced the disallowance of the claimed section 80P deduction was held to be within the limited scope of correction of apparent mistakes and not amenable to interference.

Deduction under section 80P(2)(d) - income by way of interest or dividends from investments with any other co-operative society - co-operative society - co-operative bank - interpretation of exclusion under section 80P(4)

Deduction under section 80P(2)(d) - co-operative bank - co-operative society - interpretation of exclusion under section 80P(4) - Whether interest earned by a co operative housing society from deposits/investments with co operative banks is eligible for deduction under section 80P(2)(d) of the Act. - HELD THAT: - The Tribunal held that section 80P(2)(d) requires (i) income by way of interest or dividend earned by a co operative society and (ii) that such income arise from investments with any other co operative society. A co operative bank qualifies as a co operative society for the purposes of section 80P unless it is the limited category excluded by the proviso (i.e. co operative banks functioning at par with commercial banks and licensed by the RBI). Section 80P(4) is a proviso directed to excluding only those co operative banks which operate like commercial banks; it does not generally exclude all co operative banks from being treated as co operative societies under section 80P(2)(d). The AO's reliance on authorities concerning different sub provisions or different factual matrices was misplaced. The Tribunal followed coordinate bench decisions and Supreme Court guidance emphasising that, where two constructions are possible, the one favourable to the assessee should be adopted, and read the exclusion in section 80P(4) narrowly. Applying these principles, the Tribunal upheld the CIT(A)'s allowance of the deduction in respect of the interest earned from deposits with co operative banks. [Paras 11, 12, 13, 14, 15]

Deduction under section 80P(2)(d) allowed in respect of interest earned by the co operative housing society from investments/deposits with co operative banks; Revenue's grounds dismissed.

Deduction under section 80P(2)(d) - income credited to specific funds - appellate authority entertaining fresh claim - Whether interest income credited to Repair and Maintenance Fund and Sinking Fund, which was not offered in the profit and loss account or claimed in the original return, is eligible for deduction under section 80P(2)(d) and whether the appellate authority can entertain the claim. - HELD THAT: - The Tribunal noted that the relevant interest income had been earned from deposits in co operative banks but was credited in the balance sheet to designated funds and had not been offered as income in the return. Relying on Supreme Court and High Court authority that an appellate authority may entertain a fresh claim even if not made in the original return or by way of a revised return, and in view of the finding that interest from co operative banks is deductible under section 80P(2)(d), the Tribunal concluded that the assessee was entitled to the deduction notwithstanding that the claim had not been regularised by a revised return within the statutory time. Consequently, the assessee's grounds were allowed and the addition made by the AO was set aside. [Paras 16, 17, 18, 19]

Appellate authority may entertain the fresh claim; interest credited to Repair and Maintenance Fund and Sinking Fund is eligible for deduction under section 80P(2)(d).

Final Conclusion: The Tribunal allowed the assessee's appeal and dismissed the Revenue's appeal: interest earned on deposits with co operative banks qualifies for deduction under section 80P(2)(d), and the appellate authority could entertain and allow the claim in respect of interest credited to designated funds even though not claimed in the original return.

Penalty for failure to comply with notice under section 142(1) - penalty under section 272A(1)(d) - reasonable cause / good and sufficient reasons - faceless assessment regime and electronic mode of communication - ex parte appellate order and opportunity of being heard

Penalty for failure to comply with notice under section 142(1) - penalty under section 272A(1)(d) - reasonable cause / good and sufficient reasons - Whether penalty under section 272A(1)(d) for alleged non-compliance with notices issued under section 142(1) is sustainable - HELD THAT: - The Tribunal found that although statutory notices under section 142(1) were issued and initial responses were not filed, the assessee ultimately furnished responses and documents in relation to the assessment proceedings prior to framing of the assessment under section 143(3) r.w.s. 144B. The assessee attributed initial non-compliance to the prolonged illness of its accountant (post Covid) and the subsequent engagement of a new accountant who faced difficulties in collecting records; while medical records were not placed on file, the assessing officer nevertheless considered the assessee's submissions and documents when completing the assessment. The Tribunal held that where the assessee ultimately complied and the Assessing Officer examined the material before framing assessment, the delay amounted to a bonafide explanation and constituted a reasonable cause/good and sufficient reason, not deliberate non compliance warranting penalty. The Tribunal also noted the transitional context of faceless assessment and electronic communication as a factor relevant to bona fides of the delay. Applying these considerations, the Tribunal concluded that the imposition of penalty under section 272A(1)(d) was not justified and warranted deletions. [Paras 9]

Penalty under section 272A(1)(d) deleted

Ex parte appellate order and opportunity of being heard - faceless assessment regime and electronic mode of communication - Whether the ex parte order of the Commissioner (Appeals) confirming the penalty required quashing on account of lack of opportunity to be heard - HELD THAT: - The Tribunal recorded that the appeal before the Commissioner (Appeals) was dismissed for non prosecution after the assessee failed to appear despite service of hearing notices. Notwithstanding the ex parte dismissal, the Tribunal proceeded to examine the merits of the penalty, finding that the assessee had reasonable cause for delayed compliance and that the Assessing Officer had considered the eventual replies before framing assessment. In that factual matrix the Tribunal effectively set aside the confirmation of penalty by the Commissioner (Appeals) by allowing the appeal and deleting the penalty, without remanding the matter for fresh hearing before the Commissioner (Appeals). The Tribunal also observed that difficulties arising from change to digital/faceless proceedings are a relevant context in assessing bona fides. [Paras 5, 9, 10]

Confirmation of penalty by the Commissioner (Appeals) set aside insofar as it sustained the penalty; appeal allowed

Final Conclusion: The Tribunal allowed the appeal, deleted the penalty levied under section 272A(1)(d) for AY 2020-21 on the ground of reasonable cause and bonafide delayed compliance (considering the faceless assessment context), and set aside the confirmation of the penalty by the Commissioner (Appeals).

Deduction under section 80P(2)(d) - Investment income from co-operative banks - Co-operative society - Appellate authority may entertain a fresh claim not made in the return - Distinction between co-operative bank and co-operative credit society

Deduction under section 80P(2)(d) - Investment income from co-operative banks - Co-operative society - Distinction between co-operative bank and co-operative credit society - Appellate authority may entertain a fresh claim not made in the return - Deduction under section 80P(2)(d) was allowable in respect of interest income earned by the assessee from deposits placed with co operative banks - HELD THAT: - The Tribunal found that the two cumulative conditions for section 80P(2)(d) - (i) income by way of interest or dividend from investments, and (ii) such investments being with any other co operative society - were satisfied as the assessee is a registered co operative credit society and had placed fixed deposits in District Central Co operative Banks which qualify as co operative societies. The Tribunal relied on the legal distinction that not all co operative societies are co operative banks and that a co operative credit society providing credit to members is not to be equated with a bank licensed under the Banking Regulation Act. The Court noted precedents supporting allowance of deduction for interest earned from co operative banks and that section 80P(4) operates only to exclude co operative banks which function as commercial banks; it is therefore inapplicable to the assessee. The Tribunal observed that coordinate Benches have consistently allowed similar claims and that the appellate forum can entertain a fresh claim even if not made in the original return. On that basis the denial by the AO (as sustained by the CIT(A)) was found to be without basis and the Tribunal directed the AO to grant the deduction under section 80P(2)(d). [Paras 9, 11]

Deduction under section 80P(2)(d) is allowed in respect of interest earned from investments with co operative banks and the AO is directed to grant the same.

Final Conclusion: The appeal is allowed: the Tribunal set aside the CIT(A)'s order and directed the assessing officer to allow the deduction under section 80P(2)(d) in respect of interest income from investments with co operative banks for AY 2021 22.

Delayed filing of Form No. 10B - entitlement to exemption under sections 11 and 12 - Form No. 10B substantive but filing procedural - condonation of delay under section 119(2) - CBDT circulars permitting condonation of belated Form No. 10B - rectification of mistake apparent from record

Delayed filing of Form No. 10B - Form No. 10B substantive but filing procedural - CBDT circulars permitting condonation of belated Form No. 10B - entitlement to exemption under sections 11 and 12 - rectification of mistake apparent from record - Late electronic filing of audit report in Form No. 10B does not automatically disentitle a registered charitable trust from exemption under sections 11 and 12 where the report is uploaded before processing/assessment and condonation is permissible under CBDT instructions. - HELD THAT: - The Tribunal held that Form No. 10B, though substantive in content, is a procedural filing requirement and filing it before finalisation of assessment serves the legislative purpose. The specified date for furnishing the audit report for the assessment year had been prescribed, and Rule 12(2) requires electronic furnishing; failure to file with the return can result in disentitlement. However, CBDT circulars and instructions (including authority to condone delay under section 119(2)) enable condonation of belated filing in specified circumstances. Where the return was filed within statutory time and the audit report was electronically uploaded prior to processing under section 143(1) and before completion of assessment under section 143(3), the denial of exemption by the CPC/AO was incorrect. The Tribunal further observed that the rectification request was wrongly rejected since the audit report had been uploaded before processing and the intimation contained a mistake apparent from the record. Reliance was placed on CBDT circulars and coordinate decisions endorsing that delay in filing Form No. 10B need not be fatal if condonation is available and the document is made available before assessment finalisation. On these grounds the addition was deleted and exemption under sections 11 and 12 was allowed. [Paras 4, 5, 6, 7, 8]

Addition set aside; exemption under sections 11 and 12 allowed and AO directed to delete the addition.

Final Conclusion: The appeal is allowed: the Tribunal directed deletion of the addition and held that belated electronic filing of Form No. 10B-uploaded before processing/assessment and within circumstances covered by CBDT circulars-does not bar the assessee from claiming exemption under sections 11 and 12 for A.Y. 2018-19.

Deeming provisions under sections 68 to 69B - Requirement of maintenance of books under section 44AA for applicability of sections 68 to 69B - Application of provisions analogous to section 50C/43CA in valuation of transfer of immovable property - Chargeability under section 56(2)(vii) for difference between stamp duty value and declared consideration - Threshold for invocation of deeming provisions requiring independent incriminating evidence (e.g., search or survey material)

Deeming provisions under sections 68 to 69B - Requirement of maintenance of books under section 44AA for applicability of sections 68 to 69B - Threshold for invocation of deeming provisions requiring independent incriminating evidence (e.g., search or survey material) - Deletion of addition of Rs. 8.14 Lacs (6 Lacs for alleged undisclosed payment and 2.14 Lacs for stamp duty) made by AO under sections 68/69/69A. - HELD THAT: - The Tribunal found that the Assessing Officer wrongly invoked the deeming provisions of sections 68 (and related provisions up to 69B) without satisfying the preconditions for their application. The assessee, a salaried employee not required to maintain books under section 44AA, had furnished explanations and documents including the registered purchase deed showing value at Rs. 30 Lacs accepted by stamp authorities. The Tribunal emphasised that deeming provisions of sections 68-69B are to be applied with caution and ordinarily in cases where there is independent incriminating material (for example, material recovered in search under section 132 or in survey under section 133A) which the assessee cannot satisfactorily explain. On the facts, there was no finding of contravention of section 43CA by the seller nor any adverse material showing undisclosed income of the assessee; the authorities below therefore applied incorrect provisions of law and the assessee's explanations were held to be bona fide. Consequently the additions were unsustainable and directed to be deleted. [Paras 4, 5, 6]

Addition of Rs. 8.14 Lacs deleted; appeal allowed.

Application of provisions analogous to section 50C/43CA in valuation of transfer of immovable property - Chargeability under section 56(2)(vii) for difference between stamp duty value and declared consideration - Treatment of undervaluation allegation vis-a -vis applicability of section 43CA/50C and section 56(2)(vii). - HELD THAT: - The Tribunal observed that transactions of the nature in question fall within the ambit of provisions like section 50C (or section 43CA equivalent where seller is a builder) and section 56(2)(vii). However, on the material before it there was no finding that the transaction violated section 43CA at the seller's end or that section 56(2)(vii) applied against the assessee as buyer. The purchase deed registered at Rs. 30 Lacs was accepted by the stamp authority and no anomaly was found in the registry document. In absence of any adverse finding or action against the seller and without independent evidence to displace the registered valuation, the revenue could not sustain the additions on these grounds. [Paras 3, 4]

No adverse inference under section 43CA/50C or section 56(2)(vii); no addition on this basis upheld.

Final Conclusion: The Tribunal held that the assessing authorities erred in law by invoking deeming provisions without requisite material and by misapplying relevant provisions concerning valuation of immovable property; the additions aggregating Rs. 8.14 Lacs were deleted and the appeal was allowed for A.Y. 2016-17.

Fees for Technical Services - make available - Taxability under Article 12(4)(b) of the India-US DTAA - managerial services - treaty override of domestic tax law - overruling of precedent

Fees for Technical Services - make available - Taxability under Article 12(4)(b) of the India-US DTAA - Whether payments made by the assessee to its associated enterprise for administrative/management services are taxable in India as Fees for Technical Services under domestic law or Article 12(4)(b) of the India-US DTAA. - HELD THAT: - The Tribunal applied the treaty provision in Article 12(4)(b) and the line of authorities interpreting the phrase 'make available', including Raymond (Tribunal), De Beers (Karnataka High Court) and the coordinate bench decision in Tyco, to hold that mere rendering of services or managerial assistance does not satisfy the additional requirement that the services 'make available' technical knowledge, experience, skill, know how or processes. The Tribunal observed that Article 12(4)(b) requires transmission or transfer of technical knowledge/skill such that the recipient can utilise it independently and receive an enduring benefit. The AO and CIT(A) failed to place material showing that the AE had made available such technical knowledge or processes to the assessee. Applying these principles, the Tribunal concluded that the payments in question were not FTS/FIS taxable in India and there was no obligation on the assessee to deduct tax at source. [Paras 15, 16, 17, 18]

Payments were not taxable as Fees for Technical Services under Article 12(4)(b) and the appeal is allowed on this ground.

Managerial services - overruling of precedent - Whether the AO's reliance on the Shell India Markets authority to characterise the services as 'managerial' and thereby taxable survived subsequent appellate developments. - HELD THAT: - The Tribunal noted that the AO had relied on the Shell India Markets decision, but that decision has since been reversed by the Hon'ble Bombay High Court. Having regard to the reversal, the Tribunal held that the foundation of the AO's characterization of the services as taxable managerial services was undermined. The Tribunal also observed that other authorities relied upon by the AO were either inapposite (e.g., on commission payments) or did not establish that technical knowledge was made available to the assessee. [Paras 7, 19]

The AO's reliance on the earlier Shell authority could not sustain the additions after that decision was overruled; the additions therefore fail.

Treaty override of domestic tax law - Whether, in the event of conflict, the provisions of the India-US DTAA override domestic provisions of the Income tax Act. - HELD THAT: - The Tribunal reiterated the settled legal position that treaty provisions override domestic law where there is a conflict, referring to CBDT guidance and the statutory framework under section 90. The Court treated the DTAA standard (including the 'make available' requirement) as determinative for the taxability question in dispute. [Paras 12]

DTAA provisions prevail over domestic law in case of inconsistency and govern the taxability analysis in this appeal.

Final Conclusion: The Tribunal allowed the assessee's appeal for AY 2013-14, holding that the payments to the associated enterprise did not constitute taxable Fees for Technical Services under Article 12(4)(b) of the India-US DTAA (and that treaty provisions override conflicting domestic provisions); the additions and consequential obligations to deduct tax were deleted.

Taxability as Fees for Technical Services under section 9(1)(vii) of the Income-tax Act, 1961 - Reimbursement of connectivity charges - Characterisation of services as managerial, consultancy or technical - Ancillary/processing activities versus provision of technical services - Application of domestic provisions and DTAA for taxation of mark up on reimbursements

Taxability as Fees for Technical Services under section 9(1)(vii) of the Income-tax Act, 1961 - Reimbursement of connectivity charges - Characterisation of services as managerial, consultancy or technical - Charges received as reimbursement of connectivity services are not taxable as Fees for Technical Services under section 9(1)(vii) of the Income-tax Act, 1961. - HELD THAT: - The Tribunal examined the purchase/service agreement and the invoices for connectivity reimbursements and found that the activities described - negotiating with independent vendors, entering into purchase contracts, inspecting products for quality control, arranging transport/insurance and other processing steps - are steps involved in processing the purchased product and ancillary to enabling inter connect services rather than standalone technical, managerial or consultancy services. The assessee received reimbursement of connectivity charges with a nominal mark up (1%), and there was no basis to treat the amounts as consideration for technical services requiring human intervention or falling within the ambit of FTS. Reliance was placed on the principle in precedents (including the cited Apex Court authority) that connectivity charges, being ancillary reimbursements, do not amount to FTS. On this basis the additions made by the AO treating the receipts as FTS were held not sustainable.

Addition treating reimbursement of connectivity charges as Fees for Technical Services deleted; appeals partly allowed on this ground.

Application of domestic provisions and DTAA for taxation of mark up on reimbursements - Whether the nominal mark up on reimbursement could be subjected to tax under applicable domestic provisions or under any Double Taxation Avoidance Agreement. - HELD THAT: - While rejecting the characterization of the entire reimbursement as FTS, the Tribunal noted that the assessee earned a 1% mark up on the reimbursement. The Tribunal observed that the Assessing Officer remains entitled to invoke relevant provisions of the Income tax Act and the DTAA, as applicable, to examine and, if sustainable on merits, tax the income represented by the mark up. The order does not decide the taxability of that mark up on merits but leaves the matter open for the AO to consider under appropriate provisions.

Matter left open for fresh consideration by the Assessing Officer under the relevant domestic provisions and/or DTAA; appeals disposed partly in favour of the assessee and returned to AO for appropriate action on the mark up, if any.

Final Conclusion: Appeals for AY 2018 19 and 2019 20 partly allowed: receipts characterised as reimbursement of connectivity charges are not taxable as Fees for Technical Services; the Assessing Officer may, however, examine and tax the nominal mark up, if applicable, under the relevant domestic provisions or DTAA.

Condonation of delay - disallowance under section 14A read with Rule 8D - restriction of disallowance to exempt income - proportionate disallowance of interest - disallowance under section 36(1)(iii) - preference for substantial justice over technicality

Condonation of delay - preference for substantial justice over technicality - Whether the Tribunal should condone the delay in filing the Revenue's appeals - HELD THAT: - The Revenue's appeals were time-barred for the three assessment years. The Assessing Officer filed condonation applications explaining that a technical glitch in the ITBA portal delayed availability of the CIT(A)'s orders and that the orders were re-uploaded only after raising a helpdesk ticket. Applying the principle that procedural rules are subservient to substantial justice and following the standards for 'sufficient cause', the Tribunal found that the reasons furnished fall within parameters for condonation and that no benefit would accrue to the Revenue by the delay. Accordingly, the Tribunal exercised its discretion to condone the delay and proceeded to decide the appeals on merits. [Paras 2, 3]

Delay in filing the Revenue's appeals is condoned and appeals are decided on merits.

Disallowance under section 14A read with Rule 8D - proportionate disallowance of interest - restriction of disallowance to exempt income - Validity of the AO's disallowance under section 14A read with Rule 8D(2)(ii) and Rule 8D(2)(iii) - HELD THAT: - The assessee declared exempt dividend income and produced consolidated balance sheet and capital account showing that own funds and interest-free funds exceeded investments and interest-free advances given. Applying precedent of the jurisdictional High Court and the Supreme Court, the Tribunal held that where own and non-interest-bearing funds exceed investments, proportionate disallowance of interest under section 14A is not warranted; therefore the disallowance computed under Rule 8D(2)(ii) was without merit and was deleted. As to the disallowance under Rule 8D(2)(iii), given that total exempt dividend income was limited, the Tribunal noted authority that disallowance under section 14A cannot exceed the exempt income and that only investments yielding exempt income should be considered for average investment computation. The Tribunal directed the AO to recompute the disallowance under Rule 8D(2)(iii) applying these principles and to restrict any disallowance to the lower amount, if so resulting. [Paras 8, 9, 10, 11, 12]

Deletion of disallowance under Rule 8D(2)(ii) is upheld; disallowance under Rule 8D(2)(iii) is to be recomputed by the AO in accordance with the Tribunal's directions and limited to the amount of exempt income where applicable.

Disallowance under section 36(1)(iii) - Whether proportionate disallowance under section 36(1)(iii) for diversion of borrowed funds to interest-free advances was sustainable - HELD THAT: - The assessee produced financials showing own funds and interest-free funds exceeded the investments and interest-free advances given. The Tribunal applied the jurisdictional High Court's principle that where funds available with the assessee are sufficient to meet investments, a presumption arises that investments were made from such funds and no disallowance under section 36(1)(iii) is warranted. In view of the assessee's balance-sheet position and relevant precedents, the Tribunal found no infirmity in the CIT(A)'s deletion of the disallowance. [Paras 13, 15, 16]

Deletion of the disallowance made under section 36(1)(iii) is upheld and the Revenue's grounds on this point are dismissed.

Disallowance under section 14A read with Rule 8D - Remand for recomputation of disallowance under Rule 8D(2)(iii) - HELD THAT: - While deletion of the Rule 8D(2)(ii) disallowance was upheld, the Tribunal did not finally quantify the Rule 8D(2)(iii) disallowance. Instead, it directed the Assessing Officer to recompute the disallowance applying the principle that only investments yielding exempt income are to be considered and that the disallowance cannot exceed the exempt income, leaving the final computation to the AO. [Paras 11, 12]

Matter remitted to the AO for recomputation of disallowance under Rule 8D(2)(iii) in accordance with the Tribunal's directions.

Final Conclusion: The Tribunal condoned the delay and, on merits, upheld deletion of the AO's disallowance under Rule 8D(2)(ii) and under section 36(1)(iii); it directed recomputation of any Rule 8D(2)(iii) disallowance by the AO limited by the exempt income and applicable principles. The appeals for AYs 2012-13, 2013-14 and 2014-15 are partly allowed for statistical purposes.

Genuineness of transactions - long term capital gains exemption under Section 10(38) - addition under Section 68 - preponderance of human probability - surrounding circumstances - substance over form / sham transaction - right of cross-examination and natural justice - working backwards investigation

Genuineness of transactions - long term capital gains exemption under Section 10(38) - addition under Section 68 - Whether the claim of exempt LTCG made by the assessee was genuine and whether addition of Rs. 73,29,100/- under Section 68 was justified - HELD THAT: - The Tribunal examined the purchase and sale chain as a whole and concluded that the genuineness of both acquisition and sale had to be tested, not the sale in isolation. Material adverse facts included off-market purchases despite the assessee maintaining a demat account, staggered cash payments, long delay in dematerialisation with dematerialisation occurring only days before sale, lack of independent corroboration for allotment/sub-division entries, and highly volatile, thinly traded price movement of the scrips. These surrounding circumstances, when assessed on the test of preponderance of human probability, led to the conclusion that the LTCG claim was a fac ade to conceal unexplained credit. On this factual matrix the assessee failed to discharge the onus cast by the Revenue under Section 68 and the Tribunal confirmed the addition made by the AO, as upheld by the CIT(A). [Paras 16, 18, 19, 28, 30]

Addition under Section 68 confirmed and claim of exempt LTCG rejected as not genuine

Right of cross-examination and natural justice - working backwards investigation - Whether non-supply of investigation material and non-production of third parties for cross-examination vitiated the proceedings - HELD THAT: - The Tribunal recorded that the statements and investigation material did not specifically name the assessee; the departmental probe had commenced with entities dealing in penny stocks and then worked backwards to identify beneficiaries. In that factual context the assessee failed to show how non-production of persons for cross-examination or non-furnishing of the entire investigation report caused prejudice. Reliance on authority establishes that right to cross-examine is not absolute and depends on circumstances and the statute. Consequently, absence of cross-examination did not invalidate the use of the materials or the conclusion drawn therefrom. [Paras 22, 23, 24, 26]

Non-furnishing of investigation material and non-production for cross-examination did not vitiate the assessment as no prejudice to the assessee was shown

Preponderance of human probability - surrounding circumstances - substance over form / sham transaction - Proper standard of proof and methodology to test genuineness of alleged penny-stock based LTCG claims - HELD THAT: - The Tribunal applied the principle of preponderance of probabilities and looked behind documentary evidence to surrounding circumstances and human probabilities, following precedent that authorities may pierce fac ade where necessary. Documentary records alone (contract notes, broker letters, ledger entries) were held to be self-serving and insufficient where independent corroboration and plausible commercial explanation were lacking. Given the evidence of price manipulation, thin volumes, SEBI suspension of scrips and departmental investigation into organized bogus LTCG generation, the holistic/working-backwards approach adopted by Revenue was held to be appropriate. [Paras 17, 18, 21, 25, 26]

Genuineness to be tested on preponderance of probabilities and surrounding circumstances; such test applied and found against the assessee

Final Conclusion: On the facts and surrounding circumstances the Tribunal upheld the AO's addition under Section 68 and dismissed the appeal, confirming that the claimed exempt LTCG was not genuine and the assessee failed to discharge the onus of proof.

Revisionary jurisdiction under section 263 - Erroneous and prejudicial to the interest of Revenue - Explanation 2 to section 263 - Inquiry and verification in assessment proceedings - Show-cause notice under section 263

Inquiry and verification in assessment proceedings - Assessment record and order-sheet entries - Whether the Assessing Officer conducted necessary inquiries and verifications in the course of assessment proceedings relating to cash deposits (including during demonetisation period) and disclosure of scrap sales. - HELD THAT: - The Tribunal examined the notices under sections 142(1) and 143(2), the questionnaires, the assessee's replies, documentary evidence, order-sheet entries and third party inquiries conducted by the Assessing Officer. The record shows specific calls for bank statements, cash deposit details, month wise sales/purchases, VAT returns and audited financial statements, repeated notices, responses from banks and other third parties, and order sheet entries recording the inquiries and results. These materials establish that the Assessing Officer conducted detailed, threadbare inquiries into cash deposits (including the demonetisation period) and the issue of scrap sales, and recorded the results in the assessment file. The contrary observations in the revisionary authority's show cause notice are therefore not borne out by the materials on record. [Paras 12, 13, 14, 15, 16]

The Assessing Officer did conduct the necessary inquiries and verifications on the issues of cash deposits and scrap sales during the assessment proceedings.

Revisionary jurisdiction under section 263 - Erroneous and prejudicial to the interest of Revenue - Explanation 2 to section 263 - Whether the Principal CIT validly exercised jurisdiction under section 263 to revise the assessment order on the ground that the assessment was erroneous and prejudicial to the interest of Revenue. - HELD THAT: - Section 263 can be invoked only if the order sought to be revised is shown to be both erroneous and prejudicial to the Revenue. Explanation 2 does not permit the revisionary authority to act on mere ipse dixit that inquiries were not made; lack of inquiry must be substantiated from the record. Here, the materials demonstrate that the Assessing Officer had made the requisite inquiries and reached conclusions after verification. The revisionary authority initiated proceedings under section 263 without properly examining the assessment records and on conclusions contrary to materials on file. In absence of any record based proof of failure to make inquiries, the exercise of jurisdiction was unjustified. [Paras 11, 17, 18, 19]

The exercise of jurisdiction under section 263 by the Principal CIT is invalid and unsustainable; the section 263 order is quashed and the assessment order is restored.

Final Conclusion: The Tribunal quashed the revision order passed under section 263 as the Assessing Officer had made the requisite inquiries and verifications; the exercise of revisionary jurisdiction was without proper basis and the assessment order for AY 2017-18 is restored. Appeal allowed.

Final registration under section 80G(5) - maintainability of belated application in Form No.10AB - extension of time by CBDT under section 119 of the Act - effect of CBDT Circular No.6 of 2023 (paragraph 7) on pending or rejected Form No.10AB applications - power to condone delay

Final registration under section 80G(5) - maintainability of belated application in Form No.10AB - effect of CBDT Circular No.6 of 2023 (paragraph 7) on pending or rejected Form No.10AB applications - Whether the rejection of the assessee's application in Form No.10AB for final registration under section 80G(5) as non maintainable solely on the ground of belated filing was correct in view of CBDT Circular No.6 of 2023 and Tribunal precedent. - HELD THAT: - The Tribunal noted that the application for final registration in Form No.10AB was filed after the original statutory time-limit and was rejected by the CIT(E) as non maintainable. However, CBDT Circular No.6 of 2023 (para 7) extended the time for filing and expressly provided that where an application in Form No.10AB was rejected on or before issuance of that circular solely for late filing, the trust may furnish a fresh application within the extended period. The Coordinate Bench decision in Best Buds Pet Care was followed, which held that a rejection without reference to the Circular's clause extending time and permitting fresh filings was contrary to the Circular and warranted reconsideration. The Tribunal held that the CIT(E) failed to consider the said circularal provision and therefore the rejection could not be sustained; in consequence the matter was set aside and the Form No.10AB was directed to be reconsidered after giving the assessee an opportunity of hearing and requiring cooperation in furnishing mandated details for final registration. [Paras 4, 5, 6]

Impugned rejection set aside and matter remitted to the CIT(E) to reconsider the Form No.10AB application for final registration under section 80G(5) in light of CBDT Circular No.6 of 2023, giving the assessee an opportunity of hearing.

Final Conclusion: Appeal allowed for statistical purposes; rejection of the Form No.10AB application as non maintainable set aside and remitted for reconsideration in accordance with CBDT Circular No.6 of 2023, after affording the assessee opportunity to produce records and comply with statutory requirements.

Rejection of declared value under rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - transaction value - sequential application of valuation rules under rule 3(4) - computed value under rule 8 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - Interpretative Notes to the Customs Valuation Rules - remand for fresh disposal to comply with valuation framework

Rejection of declared value under rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - transaction value - Validity of rejection of the declared transaction value of imported brass valves under rule 12. - HELD THAT: - The Tribunal held that given the substantial disparity between the notified tariff value of brass scrap and the declared value of the finished imported goods, the proper officers were entitled to doubt the accuracy of the declared transaction value and to invoke rule 12. The finding that the declared value may not represent the transaction value was not unreasonable, particularly where the appellants failed to avail themselves of opportunities to rebut that presumption. Although the tariff value of brass scrap was not used as a substitute for valuation, its existence and the gap it exposed legitimately triggered scrutiny under rule 12 and justified rejection of the declared value in the circumstances recorded by the adjudicating authorities (see para 6). [Paras 6]

Rejection of the declared transaction value under rule 12 was not vitiated and cannot be set aside.

Sequential application of valuation rules under rule 3(4) - computed value under rule 8 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - Interpretative Notes to the Customs Valuation Rules - remand for fresh disposal to comply with valuation framework - Legality and correctness of the re-determination of assessable value by resort to rule 8 without properly applying the sequential mandate of rule 3(4) and without conforming to the requirements of rule 8 and its Interpretative Notes. - HELD THAT: - The Tribunal found that after rejection of transaction value, the proper officer was obliged to proceed sequentially under rule 3(4) through rules 4 to 9 and to invoke a particular rule only when the immediately preceding rule failed to apply. The adjudicating authorities discarded the applicability of rule 4 and rule 5 without proper scrutiny of available information and, for reasons of practical convenience, proceeded to compute a substituted value under rule 8. The substituted value under rule 8 was arrived at without obtaining or examining the producer's costings, profit and expense data or other information envisaged by rule 8 and its Interpretative Notes, and without ensuring consistency with the conceptual framework of transaction value under section 14. Consequently, the computed value lacked the required evidentiary foundation and confidence. Given these procedural and substantive defects, the Tribunal concluded that re-determination was in breach of the Customs Valuation Rules and remitted the matters for proper disposal in accordance with the statutory framework (see paras 7-9). [Paras 7, 8, 9]

Re-determination of assessable value under rule 8 was unlawful for failure to follow the sequential procedure of rule 3(4) and for non-compliance with rule 8 and its Interpretative Notes; the matter is remitted for fresh adjudication in accordance with the valuation rules.

Final Conclusion: Appeals allowed in part by setting aside the impugned orders insofar as substituted valuation and consequential recoveries/penalties were confirmed; the matters are remitted to the original authorities for fresh disposal strictly in accordance with the sequential framework and requirements of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.

Confiscation under section 111 - Penalty under section 112 - Distinction between section 112(a) and section 112(b) - Finality of confiscation - Remand for fresh determination of liability to penalty

Penalty under section 112 - Distinction between section 112(a) and section 112(b) - Remand for fresh determination of liability to penalty - Whether the adjudicating authority validly imposed penalty on the appellant and whether the matter should be remanded for determination of applicability of section 112(a) or 112(b) to the appellant - HELD THAT: - The Tribunal recorded that confiscation of the goods under section 111 had attained finality, so the finding of misdeclaration and undervaluation is not open to challenge. However, the impugned penalty order did not contain the detailed findings required to distinguish which limb of section 112 - (a) or (b) - applied to the appellant. The Court emphasised that the stipulations for imposing penalty under section 112(a) and 112(b) are mutually exclusive and require specific findings on the role of the person sought to be penalised. Given that the adjudicating authority's findings against the appellant were summary in nature and did not adequately delineate the appellant's role (beyond grouping several persons as conspirators or concerned parties), it was not appropriate for the Tribunal to determine validity of the penalty without further enquiry. Therefore the Tribunal set aside the impugned order insofar as it relates to imposition of penalty on the appellant and remanded the matter to the original authority for a limited enquiry to determine whether the conditions of section 112(a) or section 112(b) apply to the appellant. [Paras 3, 7, 8]

Impugned order set aside and matter remanded to the original authority for fresh determination, limited to whether the conditions of section 112(a) or 112(b) apply to the appellant.

Final Conclusion: The Tribunal upheld the finality of confiscation but found the penalty findings against the appellant legally inadequate; the penalty order is set aside and the matter is remanded to the original authority for a limited reconsideration confined to whether section 112(a) or section 112(b) is attracted in respect of the appellant.

Classification of goods by principal function - classification of solar lanterns - General Rules for the Interpretation of Import Tariff - composite machines principal-function rule - precedential value of earlier appellate orders - relevance of presence or absence of in built solar panel

Classification of solar lanterns - relevance of presence or absence of in built solar panel - classification of goods by principal function - precedential value of earlier appellate orders - Whether the imported rechargeable lanterns are classifiable as solar lanterns under CTH 94055040 despite not having an in built solar panel, and whether earlier appellate orders in identical matters bind the adjudicating authority. - HELD THAT: - The Tribunal accepted the Commissioner (Appeals) finding that the imported items, though some lacked an in built photovoltaic panel, were solar lanterns because their primary and principal function is to draw energy from sunlight and they are capable of being charged by solar panels (including via USB ports marked for solar charging). The Tribunal rejected the lower authority's contention that classification depends on model numbers, holding instead that features and principal function govern classification. Applying the General Rules for the Interpretation of the Import Tariff, the Tribunal endorsed the prior appellate decisions which had classified similar goods under CTH 94055040 even where no in built panel existed, observing that such earlier findings on identical facts are instructive unless the Department demonstrates distinguishing circumstances. The Tribunal also relied on the composite machines/principal function rule (Note 3 to Section XVI) to conclude that where drawing solar energy is the principal function, classification under the heading for solar lanterns is appropriate. The Revenue's test report did not establish inability to charge by solar panels through the provided USB ports, and the Tribunal found persuasive the Mumbai Bench decision addressing the same issue. Having decided classification in favour of CTH 94055040, the Tribunal held that any enhancement of value predicated on classification under Chapter 85 was moot. [Paras 6, 8, 37]

The goods are classifiable under CTH 94055040 as solar lanterns notwithstanding absence of an in built solar panel; earlier appellate orders on identical issues are applicable; the Commissioner (Appeals) order is upheld.

Final Conclusion: Appeal dismissed. The Tribunal upholds the Commissioner (Appeals) classification of the imported lanterns under CTH 94055040 (solar lanterns); consequential contest on value enhancement based on classification under Chapter 85 was rendered infructuous.

Tariff classification - CTH 2510 vs CTH 2835 - Classification of natural mineral versus chemically precipitated/ calcined products - Evidentiary value of chemical test report and retest - Consistency of classification and binding effect of contemporaneous/importers' classifications - Personal penalty under Customs Act

Tariff classification - CTH 2510 vs CTH 2835 - Classification of natural mineral versus chemically precipitated/ calcined products - Consistency of classification and binding effect of contemporaneous/importers' classifications - Evidentiary value of chemical test report and retest - Imported Apatite (Ground) Calcium Phosphate is classifiable under CTH 2510 and not under CTH 2835 for the period in dispute. - HELD THAT: - The Tribunal applied its decision in the closely identical earlier matter of M/s. Mudraka Ceramics (reported at 2024(16) CENTAX432 (Tri-Ahmd)) where, after examination of tariff entries, HSN Explanatory Notes and technical evidence, the product was held to be a natural mineral (Apatite Calcium Phosphate) and not a chemically precipitated or calcined product. The present imports involved the same overseas supplier and materially identical product literature, MSDS and test reports; imports before and after the disputed period were provisionally assessed and finally classified under Chapter 25 after testing. The Tribunal found no material to justify a different classification for the intervening period and accepted that the re-test did not demonstrate characteristics of a chemically precipitated product as contemplated for CTH 2835. On these grounds the goods were held to be properly classifiable under CTH 2510 as claimed by the appellants, and the demand founded on reclassification to CTH 2835 could not be sustained. [Paras 4]

Demand for differential duty based on classification under CTH 2835 is set aside and the product is held classifiable under CTH 2510 for the period in dispute.

Personal penalty under Customs Act - Consistency of classification and binding effect of contemporaneous/importers' classifications - Personal penalties and penalties on CHA/partners imposed in the impugned order are unjustified and are set aside. - HELD THAT: - Having concluded that the imported goods were rightly classifiable under CTH 2510, the Tribunal found no basis to sustain personal penalties on the directors of the importer or on the CHA and its partners. The Tribunal observed that the communications with the overseas supplier and the classification adopted were in line with the nature of the goods as natural mineral product and that there was no material warranting penal consequences. Accordingly, penalties and consequential orders imposing personal liability were quashed. [Paras 4, 5]

Penalties imposed on the main appellant and on the directors/CHA/partners are quashed and set aside.

Final Conclusion: Impugned orders are quashed and set aside; appeals are allowed with consequential relief, holding the imported Apatite (Ground) Calcium Phosphate classifiable under CTH 2510 for the period April'17 to Feb'20 and cancelling the duty demand and personal penalties.

Refund of special additional duty (SAD) - discharge of customs liability by debit of scrips under Foreign Trade Policy (FTP) - debit of scrips not constituting payment of duty - restoration of scrip credit - monetization of scrips - relevance of DGFT public notice to entitlement

Refund of special additional duty (SAD) - discharge of customs liability by debit of scrips under Foreign Trade Policy (FTP) - debit of scrips not constituting payment of duty - Whether duty discharged by debiting scrips under FTP qualifies as payment of SAD entitling the importer to refund - HELD THAT: - The Tribunal held that debiting of scrips under an FTP pass book scheme, which operates by institutionalised debit to grant exemption, cannot be treated as payment of duty for purposes of refund. Debit in a pass book under an FTP scheme is not equivalent to discharge of liability by cash; therefore eligibility for refund arises only insofar as the duty was validly paid (in cash) after sale of the imported goods. The Tribunal applied the reasoning in M/s Jindal Export Limited v. Commissioner of Customs (EP), Nhava Sheva, to conclude that a setting aside of the earlier order does not render the appellant entitled to a monetary refund in respect of amounts discharged through scrips, as such debits do not amount to payment of duty. [Paras 4]

Debiting of scrips does not constitute payment of SAD; refund is limited to duty validly paid in cash after sale of the goods.

Restoration of scrip credit - monetization of scrips - relevance of DGFT public notice to entitlement - Whether the appellant was entitled to monetization of the value of scrips or could seek restoration of scrip credit, and whether reliance on Allen Diesels (Delhi High Court) assisted the appellant - HELD THAT: - The Tribunal observed that the proper remedy in respect of scrips is restoration of the credit, not monetary refund; restoration was not the subject matter of the present appeal. The appellant's plea for monetization of scrips debited at import was rejected. Further, the appellant's reliance on the Delhi High Court decision in Allen Diesels India Pvt Ltd did not assist because the DGFT public notice (No. 06/RE/2013/2009 14 dated 18 April 2013) disallowing use of scrips for discharge of duties in the particular import was factually distinguishable from the matter decided in Allen Diesels. [Paras 4, 5]

Monetization claim denied; only restoration of scrip credit (not monetary refund) could have been pursued, and the cited High Court decision was not applicable on the facts.

Final Conclusion: Appeal dismissed insofar as it sought monetization/monetary refund in respect of duties discharged by debiting FTP scrips; refund is confined to amounts validly paid in cash after sale of the imported goods, while restoration of scrip credit (not adjudicated here) remains the appropriate remedy for scrip based debits.

Determination of Fe content on Wet Metric Ton basis - inapplicability of Dry Metric Ton basis for levy of export duty - application of Board Circular No. 04/2012-Cus - assessment according to condition of goods at time of export - reliance on authoritative laboratory test reports

Determination of Fe content on Wet Metric Ton basis - inapplicability of Dry Metric Ton basis for levy of export duty - application of Board Circular No. 04/2012-Cus - Fe content for charging export duty is to be determined on Wet Metric Ton (WMT) basis and not on Dry Metric Ton (DMT) basis; therefore the CRCL DMT report cannot be the basis for levy of export duty. - HELD THAT: - The Tribunal accepted the adjudicating authority's finding that Board Circular No. 04/2012-Cus clarifies that assessment of iron ore for determination of Fe content for export duty shall be made on WMT basis, i.e., deducting impurities (inclusive of moisture) from gross weight to arrive at net Fe content. The Tribunal relied on the Supreme Court decision in Union of India v. Gangadhar Narsingdas Aggarwal which recognizes that goods must be assessed in the condition in which they were exported and that a mathematical formula exists to convert dry-basis test results into the moist/as exported basis. Given the Board Circular and the authorities applying it, a laboratory result expressed on DMT (dry basis) cannot be accepted for levy of export duty unless converted to WMT using the standard industry formula. The department did not provide any reason to displace the Circular or the formula applied by the adjudicating authority. Consequently, the CRCL report showing Fe on DMT (58.89%) is not determinative for imposing export duty absent conversion to WMT. [Paras 7, 16, 17, 18, 19]

Fe content must be determined on WMT basis; the CRCL DMT report cannot be relied upon for levy of export duty.

Reliance on authoritative laboratory test reports - assessment according to condition of goods at time of export - On applying the standard industry formula to convert the CRCL DMT result using the measured moisture, the Fe content on WMT basis falls below 58%, and therefore export duty is not leviable; the adjudicating authority correctly dropped the proceedings. - HELD THAT: - The Tribunal examined the array of test reports (pre-shipment TCRC reports, transit/Deputy Director of Mines figures, discharge port report) which predominantly recorded Fe content below 58%. The adjudicating authority applied the standard industry conversion to the CRCL dry-basis result using CRCL's measured moisture and found the converted Fe on WMT to be below 58%. In light of the Board Circular, the Supreme Court precedent, and the consistent independent test reports indicating Fe <58% on the as-exported basis, the Tribunal found no infirmity in the adjudicating authority's application of the formula or in its conclusion to drop proceedings and reject the demand for export duty and penalties. [Paras 15, 16, 19, 20]

The converted Fe content on WMT basis is below 58%; adjudicating authority rightly dropped the proceedings and the demand is unsustainable.

Final Conclusion: The Tribunal upheld the Adjudicating Authority's order dropping the show cause proceedings: Fe content for export duty must be determined on Wet Metric Ton basis in accordance with Board Circular No. 04/2012-Cus and relevant case law, and on conversion the Fe content was below 58% so no export duty, appropriation or penalties could be sustained; the department's appeal is rejected.

Refund of customs duty - self-assessment under Risk Management System - non-applicability of pre-self-assessment precedents to post-08.04.2011 imports - Certificate of Origin requirement under preferential tariff - compliance with conditions of Notification No.53/2011-Cus

Self-assessment under Risk Management System - non-applicability of pre-self-assessment precedents to post-08.04.2011 imports - refund of customs duty - Maintainability of refund claim where Bills of Entry were self-assessed under EDI/Risk Management System and assessment was not challenged - HELD THAT: - The Tribunal held that the bar on refund claims derived from decisions concerning assessments completed under the pre-self-assessment regime (as in Priya Blue and ITC Limited) does not apply to Bills of Entry filed and approved under the EDI self-assessment framework w.e.f. 08.04.2011. Because the impugned imports were cleared following self-assessment under the Risk Management System, the contention that refund claims are inadmissible for failure to challenge an assessment order was unsustainable. The Tribunal therefore rejected the Revenue's reliance on those pre self assessment precedents and concluded that non-challenge of an assessment under the RMS does not by itself bar the refund claim in the facts of this case. [Paras 7]

The ground that the appellant did not challenge assessment of the Bill of Entry is not sustainable; pre-self-assessment precedents are inapplicable.

Certificate of Origin requirement under preferential tariff - compliance with conditions of Notification No.53/2011-Cus - refund of customs duty - Sufficiency of the Certificate of Origin produced by the importer (manufacturer-issued certificate) where subsequently a Chamber of Commerce certificate for identical supplier was produced for later imports - HELD THAT: - The Tribunal noted that the Revenue's objection related to the format and issuing authority of the Certificate of Origin. The appellant had produced a manufacturer issued Certificate of Origin during adjudication, and for subsequent imports from the same supplier produced the Certificate issued by the Malaysia Chamber of Commerce. Taking into account that the later imports from the same supplier carried the Chamber of Commerce certificate, the Tribunal found that the appellant had ultimately complied with the conditions of Notification No.53/2011-Cus. On that basis, the benefit conferred by the notification could not be denied and the refund claim merited allowance. [Paras 8, 9]

The appellant is taken to have complied with the Notification's conditions and is entitled to the benefit; refund claim is allowable.

Final Conclusion: Impugned orders rejecting the refund claims are set aside; the appeals are allowed and the appellant is entitled to the refund claimed under Notification No.53/2011-Cus.

Statutory interest under Rule 156 - pari passu treatment under Section 529/529A - proof of debt and claim procedure under Companies (Court) Rules - vested/accrued rights - appellate power under Section 483

Statutory interest under Rule 156 - proof of debt and claim procedure under Companies (Court) Rules - Entitlement of the workmen to statutory interest on the sale proceeds of unsecured assets under Rule 156 when no claim for interest was made at the proof stage - HELD THAT: - The Court held that Rule 156, which permits proof for interest (subject to its conditions), is embedded in the chapter dealing with debts and claims and presupposes that interest is claimed and proved in the prescribed manner during the proof process. The workmen did not claim interest at the time their proofs were admitted and the distribution order dated 12.08.2016, which effected payment of their proved debts, attained finality and was not challenged. In these circumstances the Company Court rightly refused the belated interlocutory application (I.A. No. 7469/2016) for statutory interest. The Court further observed that Rule 156 cannot be invoked afresh to grant interest where the requirement of making and adjudicating the claim under the rules was not complied with, and that the scheme of Rules 147-169 contemplates examination and communication of acceptance/rejection of proofs before any entitlement to interest can be recognised. [Paras 40, 41, 42, 43, 67]

Prayer for statutory interest under Rule 156 was correctly rejected and cannot be allowed as the claim was not made or adjudicated at the proof stage; interlocutory application dismissed.

Pari passu treatment under Section 529/529A - vested/accrued rights - Whether pari passu status under Section 529/529A entitles the workmen to interest in parity with secured creditors - HELD THAT: - The Court accepted that Section 529/529A renders workmen's dues pari passu with secured creditors for purposes of apportionment and priority in distribution of assets. However, the Court distinguished parity of principal entitlement from entitlement to contractual interest payable to secured creditors: interest paid to secured creditors stemmed from contractual loan obligations and cannot be equated to statutory claims for wages. The workmen's claim to interest was not an accrued vested right established by contract or adjudication; vested rights arise only where created by statute, contract or operation of law and cannot be presumed. Reliance on Vijay Industries was examined and held inapplicable because that case involved an express contractual term for payment of interest; no such contractual or adjudicated entitlement to interest existed for the workmen here. [Paras 51, 52, 53, 64, 65]

Parity under Section 529/529A does not automatically confer entitlement to interest payable to secured creditors; absent a contractual or adjudicated right to interest, workmen are not entitled to such interest.

Appellate power under Section 483 - Scope of appellate review under Section 483 in the context of the appeals filed against rejection of the interlocutory application - HELD THAT: - The Court reiterated that Section 483 confers a right of appeal to the Division Bench from orders in winding up matters and that appellate jurisdiction is to be exercised as in ordinary civil appeals. The appellate court has power to examine whether the lower court erred in its factual or legal conclusions. Applying that standard, the Division Bench found no error in the Company Court's refusal to grant interest, having regard to finality of the distribution order and absence of a prior claim for interest. [Paras 25, 26, 69, 70, 71]

No interference was warranted under Section 483; the impugned order declining statutory interest is not shown to be erroneous and appeals are dismissed.

Final Conclusion: The Division Bench dismissed the appeals: the Company Court correctly rejected the belated claim for statutory interest-Rule 156 could not be invoked after final distribution when no interest had been claimed or adjudicated earlier, and pari passu status under Section 529/529A does not, by itself, entitle workmen to contractual interest payable to secured creditors.

Composite service - goods transport agency service - cargo handling service - business auxiliary service - principle of essential character for classification - method of invoicing not determinative of classification - abatement applicable to GTA service - service receiver liability under Service Tax Rules - suppression and extended period of limitation

Composite service - goods transport agency service - method of invoicing not determinative of classification - principle of essential character for classification - abatement applicable to GTA service - Whether the appellant's contract is to be treated as a single composite GTA service or may be vivisected into separate cargo handling and business auxiliary services - HELD THAT: - The Tribunal held that the essential feature of the contract was transportation of chrome ore/concentrate from the mines to the railway siding, and that activities such as unloading, guarding, yard management, inventory management and loading were incidental to that principal service. The fragmentation of cost into separate heads in the work order was for administrative convenience and did not convert the composite contract into multiple independent taxable services. Reliance was placed on Board clarifications (including Circulars dated 28.02.2006, 20.02.2008 and 06.08.2008 and TRU Circular dated 05.10.2015) establishing that a composite service should be classified based on its main or principal service, that the method of invoicing or separate rate indications is not determinative, and that ancillary activities included in the GTA invoice form part of the GTA service and are eligible for the abatement applicable to GTA services. The factual matrix (work order, invoices, consignment notes and the predominance of transportation charges) supported treating the contract as GTA service rather than separate cargo handling or business auxiliary services. [Paras 8, 10, 12, 14, 15]

The contract is a single composite GTA service; the impugned classification as separate cargo handling and business auxiliary services is incorrect and the order is set aside on this ground.

Service receiver liability under Service Tax Rules - suppression and extended period of limitation - Whether the appellant is liable to penalties and extended period of limitation for alleged non-payment or nondisclosure - HELD THAT: - The Tribunal found that the appellant had been providing the GTA service to the same principal since 2004 and had obtained Service Tax registration in June 2007, with ST-3 returns filed periodically. It was recorded that the factual premise was in the knowledge of the department from at least June 2007 and that under the Service Tax Rules the tax liability in relation to GTA services is capable of being that of the service receiver (TISCO). Given the continuity of the contractual arrangement, the absence of change in billing methodology or nature of work, and the appellant's subsequent collection and deposit of the tax after issuance of the show cause notice, there was no material to sustain a finding of suppression warranting invocation of extended limitation or penal consequences. [Paras 4, 16]

No penal consequences or extended period of limitation can be imposed on the appellant; the appellant is not liable to the penalties sustained in the impugned order.

Final Conclusion: The appeal is allowed: the services rendered by the appellant are to be classified as a single composite GTA service (including ancillary activities) and not as separate cargo handling or business auxiliary services; consequently, the order confirming service tax and imposing penalties is set aside and no penal liability or extended limitation is sustained against the appellant.

Includibility of non-monetary consideration in taxable value - valuation under Section 67 by reference to reimbursement or notional benefits - reverse charge service tax on security services - precedent binding on tribunal - penalty not leviable where tax demand is unsustainable

Includibility of non-monetary consideration in taxable value - valuation under Section 67 by reference to reimbursement or notional benefits - reverse charge service tax on security services - precedent binding on tribunal - Value of non-monetary facilities provided by the service recipient to CISF for the period 01.04.2009 to 30.06.2012 is not includible in the taxable value for service tax under the Finance Act, 1994. - HELD THAT: - The Tribunal applied its earlier decision in Final Order No. 10799/2024 dated 08.04.2024 and other precedents which held that expenses reimbursed on actual basis and certain non-monetary benefits (medical services, vehicles, dog squad expenses, stationery, telephone charges, rent-free accommodation) are not includible in assessable value for the security service provided by CISF. The adjudicating authority's invocation of valuation under best judgment and inclusion of notional value was displaced by the binding view of the Tribunal that such free/non-monetary supplies are not taxable in the facts of CISF deployments where reimbursements are made on actuals and covered by an MOU; hence the confirmed demand based on inclusion of those facilities could not be sustained. [Paras 3]

Impugned demand for service tax by including non-monetary facilities is set aside; appeal of the assessee allowed.

Penalty not leviable where tax demand is unsustainable - Imposition of penalties under the Finance Act, 1994 (Sections 76, 77 and 78) was not sustained once the tax demand itself was held unsustainable. - HELD THAT: - The Tribunal observed that because the primary demand for service tax based on inclusion of non-monetary benefits was not sustainable, the question of imposing penal provisions did not arise. The Adjudicating Authority had already dropped penal provisions under immunity provisions in any event; the Tribunal found no legal infirmity in not imposing penalties when the demand was set aside. [Paras 4]

Department's appeal on penalties dismissed; penalties not imposed.

Final Conclusion: The appeal filed by CISF succeeds and the impugned order-in-original confirming service tax on non-monetary facilities for 01.04.2009 to 30.06.2012 is set aside; the department's appeal is dismissed and the question of penalties does not arise.

Consulting Engineer Service - Operation and Maintenance Agreement - operator v. consultant distinction - refund of tax paid under mistake - Section 11B limitation not applicable where tax paid mistakenly - unjust enrichment not applicable where tax was not payable

Consulting Engineer Service - Operation and Maintenance Agreement - operator v. consultant distinction - Services rendered by the appellant during the operations period do not fall within Consulting Engineer Service. - HELD THAT: - The Tribunal examined the scope of Consulting Engineer Service which, under the statutory definition, denotes a service in the nature of advice, consultancy or technical assistance in any discipline of engineering. A perusal of the O & M Agreement shows that the appellant was contractually obligated to operate, maintain and run the power plant on its own account, with responsibility for achieving specified efficiency levels and exposure to bonus or liquidated damages. The agreement did not envisage the appellant providing advice, consultancy or technical assistance to the owner; rather the appellant acted as an autonomous operator responsible for performance. The Tribunal further followed the decision in Rolls Royce Indus Power (I) Ltd, holding that where an operator assumes complete freedom and responsibility for operation and maintenance and is not rendering advice to the owner, the activity is not consultancy and does not attract service tax under Consulting Engineer Service. On these considerations the Tribunal concluded that the activities in question do not constitute Consulting Engineer Service. [Paras 8, 11]

The services rendered during the operations period are not taxable as Consulting Engineer Service.

Refund of tax paid under mistake - Section 11B limitation not applicable where tax paid mistakenly - unjust enrichment not applicable where tax was not payable - Appellant is entitled to refund of the service tax paid along with interest because the tax was paid under a mistake and limitations and unjust enrichment do not apply. - HELD THAT: - The Tribunal held that the tax had been paid under a mistaken belief that the services attracted Consulting Engineer Service. Reliance was placed on authoritative decisions which hold that where tax is paid under a mistake and was not payable in law, the limitation provision under Section 11B of the Central Excise Act does not apply and the payment cannot be treated as duty; consequently the department has no authority to retain such amount. Coordinate tribunal and judicial decisions were cited to support that refund claims for service tax paid mistakenly are not time-barred, and that the doctrine of unjust enrichment is inapplicable where tax was not payable. The adjudicating authority's observation that time-bar was not raised in the notice was noted and the department did not appeal that finding, so time-bar was not in issue before the Tribunal. Applying these principles, the Tribunal concluded that the appellant is entitled to refund with interest. [Paras 14, 18]

Refund of service tax paid along with interest is allowed as the tax was paid under mistake; Section 11B limitation and unjust enrichment do not bar the claim.

Final Conclusion: The impugned order rejecting the refund is set aside. The appeal is allowed and the appellant is entitled to refund of the service tax paid for the periods referenced above, together with interest and consequential relief as per law.

Cenvat credit eligibility - legitimacy of tripartite settlement - requirement of specific allegation in show cause notice - evidentiary value of recorded statements - parity of action against co contracting parties - appellate interference with findings of fact

Cenvat credit eligibility - legitimacy of tripartite settlement - requirement of specific allegation in show cause notice - Whether the Tribunal was correct in allowing the assessee's appeal by treating the invoices, returns and tripartite agreements as authentic and permitting cenvat credit where the Department relied on recorded statements alleging the transactions were sham. - HELD THAT: - The Tribunal found that tripartite agreements between the respondent, car dealers and the insurance company were executed prior to investigations and that invoices and returns were filed and accounted for with service tax paid by the dealers; no show cause notice alleged that the services did not fall within the definition of input service under Rule 2(l) of the CENVAT Credit Rules, 2004. The Department relied primarily on two recorded statements out of over 100 dealers, but those witnesses altered their stance on cross examination. The Tribunal therefore placed no evidentiary value on those statements and accepted the documentary records and payments through banking channels as probative. The High Court held that the Tribunal's factual conclusion was plausible and did not call for interference, noting that in the absence of specific allegations in the show cause notice the Department could not be permitted to advance a new case in the final order. [Paras 8, 10]

Tribunal's finding that the invoices, returns and tripartite agreements supported the assessee's entitlement to credit is sustained; no interference with the factual conclusion.

Parity of action against co contracting parties - appellate interference with findings of fact - Whether denial of credit is permissible when no parallel action has been taken against the other party to the tripartite settlement. - HELD THAT: - The Court observed that certain High Courts, including Madras, have taken the view that where no action is taken against one party to a tripartite arrangement, unilateral action against the other party is impermissible. Those decisions remain undisturbed by the Supreme Court. Having regard to that precedentary position and the Tribunal's plausible factual findings, the High Court found no substantial question of law warranting interference with the Tribunal's order. [Paras 11]

Tribunal's view stands in view of existing High Court precedents and no substantial question of law is made out.

Final Conclusion: The High Court dismissed the appeal, upholding the Tribunal's factual findings that the tripartite agreements, invoices and returns supported the assessee's claim to cenvat credit and that the Department could not rely on the limited recorded statements to overturn those documentary records; no substantial question of law warranted interference.

Common input services - CENVAT credit - Rule 6(3)(i) of CCR, 2004 - Exempted service - Burden of proof on noticee - Quantification of attributable credit - Penalty not attracted for interpretational issue

Exempted service - Common input services - Rule 6(3)(i) of CCR, 2004 - Whether the appellant's investments in shares constituted a trading activity (an exempted service) and whether Rule 6(3)(i) could be invoked to disallow CENVAT credit attributable to such activity. - HELD THAT: - The Tribunal found on the material before it that the appellant had invested in shares and securities, which amounted to a trading activity and therefore fell within the ambit of an exempted service. In consequence, the original authority was entitled to invoke Rule 6(3)(i) of the Central Excise (Credit) Rules, 2004 to determine the quantum of credit attributable to the exempted activity. The first appellate authority applied the amended legal position and directed quantification at the rate consistent with the amendment. [Paras 5]

Investments in shares were held to be trading activity (exempted service) and Rule 6(3)(i) was appropriately invoked to disallow attributable CENVAT credit.

Burden of proof on noticee - Whether the initial burden of proof on allegations in the show-cause notice lay on the taxpayer to rebut the allegation of using common input services for the exempted activity. - HELD THAT: - The Tribunal reiterated that when a statutory notice is issued on specified grounds, the primary burden lies on the noticee to answer and discharge that burden by producing evidence. The appellant accepted that it carried on trading activity but denied usage of the alleged common input services; it was therefore incumbent upon the appellant to disprove the department's allegations with supporting documents. The Tribunal did not accept the appellant's contention that the Revenue had failed to discharge its burden merely because the appellant did not successfully rebut the allegations. [Paras 3, 6]

The appellant bears the initial burden to rebut the allegation of use of common input services for the exempted activity; mere assertion of non-usage without supporting evidence is insufficient.

Quantification of attributable credit - Whether the first appellate authority's direction to quantify the attributable credit in accordance with the amended Rule 6 (adopting a reduced rate) was permissible and what further action should follow. - HELD THAT: - The Tribunal observed that the first appellate authority had applied the amended statutory position that was in force at the time of finalising the order in original and had therefore correctly remitted the file to the original authority for quantification of the consequential demand at the revised rate. The Tribunal directed that the Adjudicating Authority carry out the quantification and implement the first appellate authority's directions insofar as the differential demand and consequential interest are concerned, noting that the appellant had already paid part of the differential duty. [Paras 5, 8]

The first appellate authority's remand for quantification in line with the amended Rule 6 was upheld and the Adjudicating Authority was directed to carry out the quantification and give effect to the first appellate authority's directions.

Penalty not attracted for interpretational issue - Whether penalty should be imposed for the disallowance of credit where the issue is interpretational. - HELD THAT: - The Tribunal agreed with the first appellate authority that the question of applicability and quantification under Rule 6 involved an interpretational issue. Since the matter was interpretational, imposition of penalty was not warranted. Consequently, the Tribunal set aside the first appellate authority's direction insofar as it imposed or maintained penalty. [Paras 7, 8]

Direction to impose penalty was set aside because the controversy was an interpretational issue and therefore did not attract penalty.

Final Conclusion: The appeal is allowed in part: the Tribunal upheld that the investments constituted exempted trading activity and that Rule 6(3)(i) could be invoked; it affirmed the first appellate authority's application of the amended rule and remitted quantification to the Adjudicating Authority for implementation of the differential demand and interest, but set aside the direction to impose penalty since the issue was interpretational.

Transitional carry forward of CENVAT credit - Refund in cash under section 142(3) of the CGST Act, 2017 - Inclusion of post-appointed-day duty in ER-1/ST-3 closing balance - Bar of unjust enrichment and section 11B of the Central Excise Act, 1944 - Jurisdiction of the Customs, Excise & Service Tax Appellate Tribunal to hear appeals against orders under section 142 of the CGST Act, 2017

Inclusion of post-appointed-day duty in ER-1/ST-3 closing balance - Transitional carry forward of CENVAT credit - Whether duties (CVD and SAD) paid on or after 01.07.2017 could be included as carried forward CENVAT credit in the ER 1/ST 3 return as at 30.06.2017. - HELD THAT: - The Tribunal held that under the transitional provisions a registered person was entitled to take in the electronic credit ledger the amount of CENVAT credit carried forward in the return relating to the period ending with the day immediately preceding the appointed day. There is no provision permitting inclusion of duties paid on or after 01.07.2017 in the ER 1/ST 3 closing balance as on 30.06.2017; hence differential duty paid after the appointed day could not be shown as credit carried forward for the period ending 30.06.2017 even if the return was filed later. The lower authority's finding to the contrary was found unsustainable. [Paras 10, 11]

Duties paid on or after 01.07.2017 cannot be included in the ER 1/ST 3 closing balance as at 30.06.2017 and the contrary finding is set aside.

Refund in cash under section 142(3) of the CGST Act, 2017 - Whether CVD and SAD paid after 01.07.2017 on goods imported prior to 01.07.2017 are eligible for refund in cash under section 142(3) of the CGST Act, 2017. - HELD THAT: - Section 142(3) provides that every claim for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law shall be disposed of in accordance with the provisions of the existing law and any amount eventually accruing to the person shall be paid in cash. Applying that provision, the Tribunal held that CVD and SAD paid after the appointed day on imports made prior to 01.07.2017, where otherwise eligible as input credit, could not be carried forward to GST but are eligible for refund in cash under section 142(3). The Tribunal relied on the ratio of the authorities cited to support this position and allowed the appellant's claim accordingly. [Paras 10, 12]

CVD and SAD paid after 01.07.2017 on imports prior to that date, if otherwise eligible as input, are refundable in cash under section 142(3).

Bar of unjust enrichment and section 11B of the Central Excise Act, 1944 - Whether the refund of CENVAT credit under the transitional provisions attracts the bar of unjust enrichment under subsection 2(c) of section 11B of the Central Excise Act, 1944. - HELD THAT: - The Tribunal noted that subsection (2)(c) of section 11B of the Central Excise Act provides that refund of credit of duty paid on inputs used in manufacture in accordance with the rules or notifications is not subject to the bar of unjust enrichment. The input use for manufacture of final products in accordance with CENVAT Credit Rules, 2004 was accepted on the facts; consequently the refund claim under section 142(3) does not attract the unjust enrichment bar. [Paras 5]

The bar of unjust enrichment under section 11B(2)(c) does not apply to the refund of the CENVAT credit claimed under the transitional provision.

Jurisdiction of the Customs, Excise & Service Tax Appellate Tribunal to hear appeals under section 142 - Whether this Tribunal has jurisdiction to hear an appeal against an order passed under section 142 of the CGST Act, 2017. - HELD THAT: - The Tribunal referred to the larger bench decision in Bosch Electrical Drive India Pvt. Ltd. which held that an appeal would lie to the Customs, Excise & Service Tax Appellate Tribunal against an order passed under section 142 of the CGST Act, 2017. Applying that precedent, the Tribunal proceeded to entertain and decide the present appeal. [Paras 2]

The Tribunal has jurisdiction to hear appeals against orders passed under section 142 of the CGST Act, 2017.

Final Conclusion: The appeal is allowed: duties (CVD and SAD) paid on or after 01.07.2017 cannot be included as carried forward CENVAT credit for the period ending 30.06.2017, but such amounts, if otherwise eligible as input credit, are refundable in cash under section 142(3) of the CGST Act, 2017; the unjust enrichment bar under section 11B(2)(c) does not apply, and the Tribunal has jurisdiction to decide appeals under section 142.

Abatement of appeal upon initiation of CIRP - continuance of proceedings after adjudication as an insolvent under Rule 22 of CESTAT (Procedure) Rules, 1982 - functus officio of the Tribunal upon approval of NCLT resolution plan - binding effect of NCLT approved resolution plan on creditors and authorities

Abatement of appeal upon initiation of CIRP - continuance of proceedings after adjudication as an insolvent under Rule 22 of CESTAT (Procedure) Rules, 1982 - functus officio of the Tribunal upon approval of NCLT resolution plan - binding effect of NCLT approved resolution plan on creditors and authorities - Appeals abate and the Tribunal becomes functus officio upon initiation of CIRP and approval of the resolution plan by the NCLT. - HELD THAT: - The Tribunal held that Rule 22 of the CESTAT (Procedure) Rules, 1982 operates when a party is adjudicated insolvent or where a successor in interest is appointed, and that once the CIRP was initiated, an IRP/RP was appointed and the NCLT approved the resolution plan, the proceedings before the Tribunal stand abated. The decision follows earlier Bench rulings which apply Rule 22 from the moment the successor interest with sufficient representational rights is appointed by the NCLT and places the onus on that successor to apply for continuance. The Tribunal further observed that an NCLT approved resolution plan is binding on creditors and relevant authorities and, accordingly, the Tribunal becomes functus officio and cannot reopen or sit in judgment over the NCLT's approval. Applying these principles to the facts - initiation of CIRP, appointment of IRP/RP and approval of the resolution plan - the appeals (filed by both the appellant and the Revenue) abate with effect from the date of approval of the resolution plan by the NCLT. [Paras 9, 12]

The appeals abate as per Rule 22 of the CESTAT (Procedure) Rules, 1982, and the Tribunal is functus officio from the date of approval of the resolution plan by the NCLT.

Final Conclusion: In the facts and circumstances, and following Rule 22 and binding precedents, the Tribunal held that the appeals filed by the appellant and the Revenue abate upon initiation of CIRP and approval of the resolution plan by the NCLT, with effect from the date of such approval.

Revenue neutrality - stock transfer to sister unit and availment of Cenvat credit - valuation under Rule 4 of the Central Excise Valuation Rules - extended period of limitation - penalty for suppression or mis-declaration - reliance on binding precedent

Revenue neutrality - stock transfer to sister unit and availment of Cenvat credit - reliance on binding precedent - Whether the demands confirmed for differential duty on stock transfers can be sustained where the duty paid would be available as Cenvat credit to the recipient sister units, rendering the exercise revenue neutral. - HELD THAT: - The Tribunal found that the appellants cleared goods by stock transfer to their sister units and that any duty paid by the transferor would be admissible to the recipient unit as Cenvat credit. Applying the principle that a demand is unsustainable where the exercise is wholly revenue neutral, the Tribunal relied on the decision in Anglo French Textiles (as affirmed by the Supreme Court) and similar precedents to hold that the confirmed demands cannot be sustained. The Tribunal considered those authorities dispositive and applied them to set aside the demands on the ground of revenue neutrality. [Paras 10, 11]

Demands set aside on the ground of revenue neutrality.

Extended period of limitation - penalty for suppression or mis-declaration - valuation under Rule 4 of the Central Excise Valuation Rules - Whether extended period of limitation and penalties are invocable where the appellants had earlier complied with departmental direction to pay differential duty under CAS-4 (Rule 8) and later faced reassessment under Rule 4 after a change in law following a Larger Bench decision. - HELD THAT: - The Tribunal observed that the appellants had initially complied with the department's direction and paid differential duty computed under CAS-4 in accordance with Rule 8. Thereafter, following the Larger Bench decision on valuation, the department sought differential duty under Rule 4. On these facts the Tribunal concluded that there was no deliberate suppression or mis-declaration with intent to evade duty. Consequently, invocation of the extended period of limitation was held to be unsustainable and the penalties imposed for suppression/mis-declaration were set aside. [Paras 12]

Extended period of limitation not invokable and penalties set aside.

Final Conclusion: The impugned orders confirming demands and imposing penalties are set aside: demands vacated on the ground of revenue neutrality and extended-period demands and penalties rejected because there was no intentional suppression or mis-declaration.

Penalty under Section 11AC for short-levy based on fraud, collusion, willful misstatement or suppression - Condition precedent of determination of duty under Section 11A(2) for imposition of Section 11AC penalty - Voluntary payment of duty and interest prior to issuance of show-cause notice - Waiver of issuance of show-cause notice under Section 11A(2B) and its exceptions

Condition precedent of determination of duty under Section 11A(2) for imposition of Section 11AC penalty - Voluntary payment of duty and interest prior to issuance of show-cause notice - Legality of imposing penalty under Section 11AC where duty was neither determined under Section 11A(2) nor proposed in the notice and where the differential duty and interest were paid on audit observation prior to issuance of the show-cause notice. - HELD THAT: - The Tribunal examined Section 11AC which makes liability to pay penalty co-extensive with the duty determined under sub-section (2) of Section 11A. The determinative finding is that the statutory scheme requires a determination of duty under Section 11A(2) as a condition precedent to invoking Section 11AC. The factual matrix shows that on audit objection the assessee paid the differential duty and interest and sought waiver of a show-cause notice, but the department issued a notice and ultimately imposed penalty under Section 11AC without any allegation or formal determination of duty under Section 11A(2). Applying the statutory requirement and following precedents where similar payments made prior to show-cause notice led to rejection of penalty, the Tribunal held that in absence of any determination of duty under Section 11A(2) and in view of voluntary payment before issuance of show-cause notice, imposition of penalty under Section 11AC is unsustainable. The Tribunal referred to decisions in which Courts and Tribunals reached the same conclusion (Commissioner of Central Excise, Mangalore vs. Shree Krishna Pipe Industries ; Commissioner vs. Geneva Fine Punch Enclosures Ltd. ) and adopted their ratio that determination of duty liability is a condition precedent and that voluntary deposit prior to show-cause ordinarily negates the case for penalty. [Paras 4, 5, 6, 7]

Penalty under Section 11AC set aside because duty was not determined under Section 11A(2) and the differential duty and interest were paid prior to issuance of the show-cause notice.

Final Conclusion: The appeal is allowed; the penalty imposed under Section 11AC is set aside as unsustainable where the duty was paid on audit observation before issuance of the show-cause notice and there was no determination of duty under Section 11A(2).

Abuse of process - remedy by statutory appeal under Section 107 of the TNGST Act, 2017 - pre-deposit requirement - adequate opportunity to produce evidence - remittal for passing speaking order

Abuse of process - remedy by statutory appeal under Section 107 of the TNGST Act, 2017 - pre-deposit requirement - adequate opportunity to produce evidence - Disposition of writ petitions challenging assessment and consequential orders and appropriate forum for redress - HELD THAT: - The Court held that the present writ petitions, filed shortly after the assessment orders impugned in these proceedings, amounted to an abuse of court process. Although earlier orders had remitted the matter to the respondent for passing speaking orders and had directed production of the TAMIN communication and permitted the petitioner to produce collateral evidence, the petitioner was afforded two personal hearings after remand. The petitioner's grievance that inadequate time was given to produce documents did not justify continuation of writ jurisdiction where a statutory appellate remedy exists. In the circumstances, the Court declined to entertain the petitions on merits and directed the petitioner to pursue the statutory remedy by filing an appeal before the Appellate Authority under Section 107 of the TNGST Act, 2017 within 30 days from receipt of the copy of the order. The Court further required the petitioner to comply with the pre-deposit obligation as contemplated under the relevant enactments. The Court dismissed the writ petitions and imposed no costs. [Paras 5, 6, 7]

Writ petitions dismissed as abuse of process; petitioner directed to file statutory appeals under Section 107 of the TNGST Act, 2017 within 30 days and to make the requisite pre-deposit; no costs.

Final Conclusion: The writ petitions are dismissed as an abuse of process; the petitioner is directed to file statutory appeals under Section 107 of the TNGST Act, 2017 within 30 days from receipt of the order and to make the prescribed pre-deposit; no costs.

Limitation for assessment under Section 21(3) and (4) of TSVAT Act - exclusion of period under Section 21(7) for proceedings pending on account of stay or appeal - assessment beyond limitation is void for want of jurisdiction - deferment power must be expressly conferred; exclusion cannot revive time-barred assessments - violation of principles of natural justice vitiates assessment

Limitation for assessment under Section 21(3) and (4) of TSVAT Act - assessment beyond limitation is void for want of jurisdiction - Validity of show-cause notices and assessment orders issued beyond the four-year limitation prescribed by Section 21(3) and (4) of the TSVAT Act. - HELD THAT: - The Court held that Section 6 of the Entry Tax Act imports the provisions of the TSVAT Act for assessment purposes and, on a plain reading, assessments must be completed within the four-year periods specified in Section 21(3) and (4). Where show-cause notices or assessment orders are issued beyond those periods, the statutory limitation has expired and the authority's power to assess is extinguished; such proceedings are therefore without jurisdiction and liable to be set aside. The petitions in the batch showed, on the face of the record, that in most matters the notices or orders were issued after the four-year period had lapsed, rendering them unsustainable on the ground of limitation. [Paras 3, 8, 30]

Show-cause notices and assessment orders issued beyond the four-year period under Section 21(3) and (4) are time-barred and are set aside.

Exclusion of period under Section 21(7) for proceedings pending on account of stay or appeal - deferment power must be expressly conferred; exclusion cannot revive time-barred assessments - Whether the period of limitation is extended by operation of Section 21(7) of the TSVAT Act by reason of pendency of Supreme Court decisions in other cases (e.g., Jindal Stainless and Sree Rayalseema) so as to render the assessments within time. - HELD THAT: - The Court examined Section 21(7) and the authorities relied upon by the respondents. It held that Section 21(7) operates to exclude from computation those periods during which assessment was expressly deferred on account of stays or when an appeal or proceeding involving a directly bearing question of law was actually pending in respect of the same assessment. The provision does not confer a general power to defer assessments nor permit exclusion of time merely because similar questions were pending in other proceedings; the exclusion cannot be used to revive assessments already time barred. Reliance on pendency of connected Supreme Court litigation in other matters was not sufficient to extend limitation where the statutory period had already expired or where no deferment in respect of the particular assessment was shown to have been ordered. [Paras 16, 20, 21]

Section 21(7) does not operate to extend limitation in the present cases merely because similar questions were under adjudication elsewhere; the respondents' reliance on that provision is rejected.

Limitation for assessment under Section 21(3) and (4) of TSVAT Act - Whether the Assessment Orders in Writ Petition Nos. 26152 of 2023 and 26297 of 2023 are time barred. - HELD THAT: - For WP No. 26152 of 2023 (Assessment Year 2016-17) the four year period expired on 31.03.2021 but the assessment order was dated 30.09.2021, hence beyond the limitation. For WP No. 26297 of 2023 (April 2017 to June 2017) the four year period ran up to June 2021 but the assessment order was dated 13.09.2021, also beyond the four year period. The Court applied the statutory limitation rule and found both assessment orders to be time barred. [Paras 27, 28]

Writ Petitions No. 26152 of 2023 and No. 26297 of 2023 are allowed; the impugned assessment orders are set aside as time barred.

Limitation for assessment under Section 21(3) and (4) of TSVAT Act - violation of principles of natural justice vitiates assessment - Sustainability of the Assessment Order in Writ Petition No. 7562 of 2021 for the year 2014-15 which partly falls within the four year period. - HELD THAT: - The assessment for 2014-15 had a four year limitation window up to 30.01.2019; the show cause notice was issued on 30.01.2019 and assessment passed on 09.02.2019. The Court found that the assessment insofar as it related to February and March 2015 fell within limitation. However, the proceedings were concluded in an unduly hasty manner (show cause to final order in about ten days), with defects in service and denial of effective hearing. Those breaches of principles of natural justice and statutory procedure rendered the assessment unsustainable. Accordingly, even the portion within limitation was set aside on grounds of procedural unfairness. [Paras 29]

Writ Petition No. 7562 of 2021 is allowed; the assessment is set aside insofar as it is time barred and also on account of violation of principles of natural justice in respect of the period sought to be assessed within limitation.

Final Conclusion: The batch of writ petitions are allowed. Show cause notices and assessment orders issued after the four year limitation prescribed by Section 21(3) and (4) of the TSVAT Act are time barred and set aside; the respondents' reliance on Section 21(7) and on pendency of other litigation is rejected; in one petition the assessment portion within limitation was nevertheless set aside for breach of natural justice. No costs.