TaxTMI Updates e-Newsletter
Jul 12,2023

Summary order. Delay condoned; special leave petition dismissed as there is no infirmity in the High Court judgment; pending applications disposed of.

Right to legal representation during recording of statement - Presence of Advocate at a visible but not audible distance during interrogation - Recording of statement/interrogation - Consent-based accommodation of defence counsel during statement recording

Right to legal representation during recording of statement - Presence of Advocate at a visible but not audible distance during interrogation - Recording of statement/interrogation - Petitioner's counsel permitted to be present at a visible but not audible distance during recording of the petitioner's statement. - HELD THAT: - The petition sought, inter alia, that the petitioner's statement be recorded in the presence of his Advocate. At the hearing the petitioner limited the relief sought to permitting the Advocate to remain at a visible but not audible distance during interrogation and declined to press the plea for videography. The State and the contesting respondents raised no objection to the Advocate being present provided he remained visible but not audible. Having regard to the consent of the parties and the authorities placed before the Court, the High Court allowed the limited relief sought and directed that the petitioner's Advocate may remain present at a visible, but not at an audible, distance at the time of recording the petitioner's statement. The Court's order is founded on accommodation of the petitioner's right to legal representation during statement recording while preserving the requirements of an uninterrupted interrogation process as agreed by the parties. [Paras 3, 5, 6, 7]

Petitioner's Advocate permitted to be present at a visible but not audible distance during recording of the petitioner's statement; petition allowed and disposed of.

Final Conclusion: The petition is allowed to the limited extent that the petitioner's Advocate may remain present at a visible, but not audible, distance during the recording of the petitioner's statement; the remainder of the relief (including videography) was not pressed and is not granted.

Reopening of assessment u/s 147 - deduction u/s 80IB(10) denied - As per HC [2019 (7) TMI 748 - GUJARAT HIGH COURT] as during the course of scrutiny assessment AO had examined the claim for deduction u/s 80IB(10) in detail, therefore, merely because he did not examine such claim from the angle of clauses (e) and (f) thereof, would not be a valid ground for reopening the assessment as it would amount to a mere change of opinion.

HELDTHAT:- In terms of Circular No. 17/2019 dated 08.08.2019 issued by Government of India, Ministry of Finance, Department of Revenue, Central Board Direct Taxes, Judicial Section, since the amount of tax involved is low, we are not inclined to interfere with the impugned order.

SLP dismissed.

Characterisation of expenditure as capital or revenue - treatment of security deposit on leased premises as revenue or capital - security deposit paid in lieu of lease agreement - in B/S shown as assets, as “receivables” -security deposit given by original assessee, was given to one entity which subsequently amalgamated with the assessee - concurrent nature of the findings - unforeseen circumstances as sealing of the premises on account of non-conforming user by directions of the Supreme Court through the Monitoring Committee, the premises could not be used - HC [2019 (2) TMI 1541 - DELHI HIGH COURT] was un-persuaded with the argument that the amount could be treated as a revenue expenditure merely because it was paid in the course of a dispute. Clearly, the character of the amount was of a capital nature and remained so; all that the assessee did was to agree that it would not claim a refund out of ₹ 10.58 crores, agreeing to forgo ₹ 5.8 crores - HELD THAT:- No reason to interfere with the order impugned in this petition.

The special leave petition is, accordingly, dismissed.

Settlement Commission - Applications for settlement u/s 245D rejected - Procedure on receipt of application - as decided by HC [2018 (8) TMI 381 - ANDHRA PRADESH HIGH COURT] in the case on hand, the Settlement Commission was not satisfied that there was a true and full disclosure, there is no scope for any interference under Article 226 of the Constitution of India - HELD THAT:- SLP dismissed.

Special audit u/s 142(2A) -scope of satisfaction recorded by the AO - reasonable opportunity provided to assessee or not? - As per HC [2020 (1) TMI 655 - DELHI HIGH COURT] essential mandate of Section 142(2A) requires an opportunity of hearing, which in the present case has been met - HELD THAT:- This Court is of the opinion that the impugned order does not call for interference. The special leave petition is accordingly dismissed.

Validity of faceless assessment - allegation of the petitioner that it did not have the opportunity of being heard by the assessing officer before the impugned assessment order was passed and the statutory procedure as regards making of the assessment order, was not followed - HELD THAT:- The impugned order categorically states that the petitioner herein could avail the statutory remedy of appeal against the order of assessment in accordance with law.

In the circumstances, we are not inclined to interfere in the matter. - In the circumstances, we reserve liberty to the petitioner herein to avail the remedy of filing a statutory appellate remedy. In the event, the petitioner avails such a remedy and is under an obligation to make a pre-deposit before the said authority, an application may be made seeking waiver or reduction in the deposit to be made, as the case may be.

In the circumstances, liberty is reserved to the petitioner to make a representation to the competent authority not to take any coercive action till the statutory appeal is filed.

Benami transaction - Beneficial owner of property - Provisional attachment order -scope of Amendment Act of 2016 -Amendment to Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 - HELD THAT:- The issue raised in these petitions is squarely covered by the judgment of this Court in Union of India & Anr. vs. Ganpati Dealcom Pvt. Ltd. [2022 (8) TMI 1047 - SUPREME COURT] as held Section 2 (9) (A) and Section 2 (9) (C) are substantive provisions creating the offence of benami transaction. These two provisions are significantly and substantially wider than the definition of benami transaction under Section 2 (a) of the unamended 1988 Act. Therefore, Section 2 (9) (A) and Section 2 (9) (C) can only have effect prospectively. Central Government has notified the date of coming into force of the Amendment Act of 2016 as 01.11.2016. Therefore, these two provisions cannot be applied to a transaction which took place prior to 01.11.2016.

As petitioners contends that review of the said judgment is pending.

Since as of now the issue stands covered by the judgment in the case of Ganpati Dealcom Pvt. Ltd.(supra), we dismiss these special leave petitions for the same reasons and ground.

Delay condoned. Liberty to the petitioners to approach this Court again by filing a fresh petition in case the review petition(s) is allowed, is kept reserved.

Refund of interest amount payable u/s 201(1A) - interest u/s 244A - Excessive deduction of TDS on the direction of Department - as aggrieved despite the orders passed by the AO and allowing TDS credit in favour of the petitioner the respondents No.1 and 2 have not refunded the amount of interest - As per HC [2020 (5) TMI 25 - MADHYA PRADESH HIGH COURT] reasons assigned by the Revenue to decline refund of the interest u/s 201(1A) recovered from respondent No.3-NHAI on behalf of the petitioner is untenable, as after detailed scrutiny, the respondent No.2 found that the petitioner was assessed at loss and therefore, allowed the TDS credit in its favour. The TDS was refunded to the petitioner in accordance with law.Respondent Nos.1 and 2 are directed to refund the interest amount collected under Section 201(1A) of the Act from respondent No.3 on behalf of the petitioner together with interest u/s 244A

HELD THAT:- We are not inclined to interfere with the impugned judgment and order of the High Court. The special leave petitions are dismissed.

Cognizance under Sections 276B and 278B of the Income Tax Act - reasonable cause defence under Section 278AA - quashing of prosecution - CBDT prosecution guidelines and Manual on Prosecution and Compounding - trust and retention account (TRA) affecting ability to deposit TDS - deposit of TDS with interest before issuance of prosecution notice

Reasonable cause defence under Section 278AA - trust and retention account (TRA) affecting ability to deposit TDS - deposit of TDS with interest before issuance of prosecution notice - Whether the petitioner established sufficient cause under Section 278AA that prevented timely deposit of TDS, thereby justifying quashing of the criminal proceedings and setting aside the cognizance under Sections 276B and 278B in respect of financial year 2014-15 (assessment year 2015-16). - HELD THAT: - The Court found that there was delay in depositing the deducted TDS. The petitioner pleaded that, by reason of debt restructuring and the terms of the TRA agreement with IARC, the company had lost control over funds and payments and was constrained in making prompt deposits; this factual plea was not controverted by the Department in its counter-affidavit. It was also found that the TDS amount along with interest was deposited before issuance of the departmental show-cause/ prosecution notice. Having regard to these uncontroverted facts - namely the TRA-imposed restrictions preventing immediate payment and the subsequent deposit with interest prior to initiation of prosecution - the Court accepted that there was sufficient cause preventing timely deposit. The Court noted the CBDT guidelines and the Manual on Prosecution and Compounding but relied on the material facts showing belated service of notice and the existence of reasonable cause. On that basis the Court concluded that continuation of criminal proceedings was not justified and that cognizance taken in Complaint Case No. C 05 of 2017 should be set aside.

Cognizance order dated 13.11.2017 in Complaint Case No. C 05 of 2017 is set aside and the criminal miscellaneous petition is allowed.

Final Conclusion: On the facts that the petitioner's ability to operate its funds was constrained by a TRA pursuant to debt restructuring, that the departmental material did not controvert this plea, and that the TDS with interest was deposited before issuance of the prosecution notice, the Court found sufficient cause under Section 278AA to quash the cognizance under Sections 276B and 278B relating to financial year 2014-15 (assessment year 2015-16) and allowed the petition.

Exercise of revisional powers under Section 263 of the Income Tax Act, 1961 - erroneous and prejudicial to the interests of revenue - application of mind by Assessing Officer - mere difference of opinion not a ground for revision under Section 263 - conversion of unsecured loan into contribution - denial of exemption under Section 11 on account of alleged violation of section 13(1)(c) read with section 13(3)

Exercise of revisional powers under Section 263 of the Income Tax Act, 1961 - application of mind by Assessing Officer - mere difference of opinion not a ground for revision under Section 263 - conversion of unsecured loan into contribution - erroneous and prejudicial to the interests of revenue - CIT(E)'s invocation of Section 263 to reopen the AO's assessment for AY 2012-13 was not justified. - HELD THAT: - The Tribunal found, and this Court agrees, that the Assessing Officer considered the assessee's replies and the material on record before framing the assessment. For jurisdiction under Section 263 to be validly exercised, the order of the AO must be not only erroneous but also prejudicial to the interests of the revenue. The mere availability of an alternative view or the fact that previous years saw differing characterisations of amounts (conversion of unsecured loans to contribution) does not by itself render the AO's order hurried or lacking application of mind. The Tribunal relied on earlier decisions in the assessee's own case where exemption under Section 11 was allowed, and held that revision is not justified where the AO has examined material and reached a possible view. On these grounds the Tribunal set aside the revisional order of the CIT(E), and this Court finds no substantial question of law warranting interference. [Paras 11, 12, 13, 16, 17]

The revisional action under Section 263 was unjustified; the Tribunal's order setting aside the CIT(E)'s revision is upheld and the revenue appeal is closed.

Final Conclusion: The appeal is closed; no substantial question of law arises. The Tribunal's decision setting aside the CIT(E.)'s order passed under Section 263 in respect of AY 2012-13 stands affirmed.

Retrospective effect of amendment to Section 50C - Deemed full value of consideration under Section 50C - First proviso to Section 50C - value adopted by Stamp Valuation Authority on date of agreement may be taken for computing consideration

Retrospective effect of amendment to Section 50C - Deemed full value of consideration under Section 50C - First proviso to Section 50C - value adopted by Stamp Valuation Authority on date of agreement may be taken for computing consideration - Whether the CIT(A) was justified in deleting the addition made under Section 50C by treating the proviso to Section 50C as applicable retrospectively and by adopting the sale consideration as per the agreement executed prior to change in stamp valuation - HELD THAT: - The Tribunal accepted the factual position recorded in the registered sale deed that the transaction was finalised in December 2014, part payment was made by cheque on 30.10.2014 and stamp papers were purchased prior to 31 March, with the sale deed being executed subsequently in F.Y. 2015-16 after stamp duty values were increased. Applying the reasoning of co ordinate benches, the Tribunal held that the amendment to Section 50C (by Finance Act, 2016) must be given retrospective effect for the purpose of allowing the assessee to rely on the stamp valuation as on the date of agreement (first proviso) so as to avoid penal tax consequences resulting from post agreement increase in stamp duty rates. The Tribunal noted the proviso to Section 50C permits adoption of stamp valuation as on the date of agreement (option available to the assessee in appropriate circumstances) and placed reliance on earlier decisions of co ordinate benches which treated the proviso as retrospective and directed adoption of valuation as on the agreement date or, if disputed, reference to the Valuation Officer for valuation as on that date. In these circumstances the Tribunal declined to disturb the CIT(A)'s deletion of the addition under Section 50C. [Paras 5, 7, 8, 9, 11]

Revenue appeal dismissed; deletion of addition under Section 50C sustained and appeal of the Revenue dismissed.

Final Conclusion: The Tribunal upheld the CIT(A)'s order deleting the addition under Section 50C, holding that the proviso to Section 50C is to be given retrospective effect on the facts of the case (agreement finalized prior to increase in stamp valuation) and therefore dismissed the Revenue's appeal.

Fees for Included Services (FIS) - "make available" doctrine - taxability of subcontracting charges under India-USA DTAA Article 12(4) - benefit of DTAA under section 90(2) of the Income tax Act

Fees for Included Services (FIS) - "make available" doctrine - taxability of subcontracting charges under India-USA DTAA Article 12(4) - Whether the subcontracting charges received by the assessee from SPi India constitute taxable Fees for Included Services (FIS) under Article 12(4) of the India-USA DTAA - HELD THAT: - The Tribunal found that Article 12(4) treats as FIS only those technical or consultancy services which "make available" technical knowledge, experience, skill, know how or processes (or consist of development and transfer of a technical plan or design) such that the recipient is enabled to apply the technology independently in the future without assistance of the service provider. The Memorandum of Understanding to the DTAA and judicial precedents were applied to emphasise that mere provision of technical or specialised services (or deliverables) that are consumed by the recipient, without leaving behind transferrable technical knowledge or capability, does not satisfy the "make available" condition. The assessee produced a Statement of Work effective 1 January 2018 and sample invoices which established the contractual deliverables. The Tribunal accepted that the e publishing/editorial services (page composition, copy editing, proofreading, indexing, etc.) involve technical expertise but held there was no transfer of know how or technical skill to SPi India that would enable SPi India to perform those services independently thereafter. Reliance on authorities holding that the recipient must acquire enduring technical knowledge (and not merely receive a one time deliverable) supports this conclusion. The Tribunal also examined the earlier DRP/tribunal treatment of a related group company and found that the earlier decision did not displace the present conclusion, observing that the earlier allowance concerned marketing fees and not subcontracting charges. Applying these principles to the facts, the Tribunal concluded the "make available" condition was not satisfied and therefore the receipts are not chargeable as FIS under Article 12(4). [Paras 7]

Subcontracting charges received by the assessee do not satisfy the "make available" condition and are not taxable as Fees for Included Services under Article 12(4) of the India-USA DTAA.

Final Conclusion: The Tribunal allowed the assessee's appeal for AY 2019-20, holding that the subcontracting charges received from SPi India do not constitute taxable Fees for Included Services under Article 12(4) of the India-USA DTAA because the "make available" condition is not satisfied.

Application of section 48 to determine allowable deductions for computation of capital gains - deductibility of interest as cost of acquisition, cost of improvement or cost of transfer - treatment of gift transferred property in computation of capital gains - relevance of family settlement/arbitration award to capital gains computation

Deductibility of interest as cost of acquisition, cost of improvement or cost of transfer - application of section 48 to determine allowable deductions for computation of capital gains - relevance of family settlement/arbitration award to capital gains computation - Whether interest paid on loan taken to satisfy obligations under a family arbitration award could be deducted from long term capital gains as part of cost of acquisition or other allowable heads under section 48. - HELD THAT: - The Tribunal accepted the factual position that the assessee held title to the sold land by a registered gift deed and had himself offered long term capital gains in the return. The loan and interest were incurred to satisfy amounts payable under a family arbitration award to siblings and were therefore not connected to acquisition, improvement or transfer of the capital asset. None of the heads of expenditure specified for computation of capital gains under section 48 (cost of acquisition, cost of improvement or cost of transfer) applied to the interest paid. The Tribunal agreed with the findings of the Assessing Officer and the CIT(A) that the arbitration award and payments pursuant thereto were separate from the computation of capital gains and did not render the interest deductible against LTCG. [Paras 6]

Deduction of interest paid in connection with the family arbitration award is not allowable against long term capital gains; ground dismissed.

Treatment of gift transferred property in computation of capital gains - relevance of amendment to definitions for classifying agricultural land - Whether the amended provision regarding classification of agricultural land situate beyond two kilometres from municipal limits could be invoked when the issue was not raised in the assessment. - HELD THAT: - The Tribunal observed that the grievance under the amended definition did not originate in the assessment proceedings and the assessee had, in any event, himself offered the long term capital gains in the return. Because the point did not arise from the assessment order, it was not entertained by the Tribunal and was dismissed as not arising from the assessment. [Paras 7]

Ground challenging classification of the land under the amended definition is dismissed as not emanating from the assessment.

Final Conclusion: The appeal is dismissed; the tribunal upholds the disallowance of interest claimed against capital gains and declines to entertain the challenge to land classification which did not arise from the assessment.

Advancement of general public utility - trade, commerce or business/service for consideration - proviso to section 2(15) regarding quantitative limit for general public utility - charges at cost or nominal markup versus significantly above cost - harmonious interpretation of section 11(4A) with section 2(15) - application of binding precedent and fresh adjudication

Advancement of general public utility - trade, commerce or business/service for consideration - proviso to section 2(15) regarding quantitative limit for general public utility - charges at cost or nominal markup versus significantly above cost - Whether the assessee's fee-based activities disentitle it to deduction under sections 11/12 by attracting the proviso to section 2(15). - HELD THAT: - The Tribunal found the assessee's activities to be fee-based and within the last limb of 'advancement of general public utility'. Rather than finally determining whether the receipts were on cost/nominal mark-up or significantly above cost (and thus commercial), the Tribunal held that the subsequent decision of the Supreme Court in the cited bundle of appeals materially governs the legal test to be applied. Following the Supreme Court's summation - that an entity advancing GPU may carry on commercial activity only if such activity is connected to the GPU object and the receipts do not exceed the prescribed quantitative limit, and that assessing authorities must scrutinise whether charges are at cost/nominal markup or significantly higher - the Tribunal concluded that the matter requires fresh factual and legal scrutiny by the Assessing Officer. Consequently the Tribunal set aside the appellate orders and directed fresh adjudication in the light of the Supreme Court's guidance. [Paras 3]

Impugned orders set aside and assessments restored to the file of the Assessing Officer for de novo adjudication applying the tests laid down by the Supreme Court regarding GPU, commerciality of receipts and the proviso to section 2(15).

Application of binding precedent and fresh adjudication - harmonious interpretation of section 11(4A) with section 2(15) - Extent to which the Supreme Court's interpretation governs future scrutiny and the steps the assessing authority must take on remand. - HELD THAT: - The Tribunal directed that the Assessing Officer shall adjudicate the matters afresh year-wise, applying the Supreme Court's conclusions: (i) determine whether activities are connected to GPU; (ii) examine whether receipts are charged at cost or with only a nominal mark-up or are significantly higher; (iii) verify compliance with the quantitative limit in the proviso to section 2(15); and (iv) maintain and examine separate books of account as envisaged by section 11(4A) where applicable. The Tribunal noted that similar facts exist for AY 2018-19 and ordered an identical course of action mutatis mutandis for that year. [Paras 3, 4]

Assessments remitted for fresh, year-wise adjudication by the Assessing Officer in conformity with the Supreme Court's directions; appeal allowed for statistical purposes.

Final Conclusion: The Tribunal set aside the impugned appellate orders for AY 2016-17 and AY 2018-19 and remitted the assessments to the Assessing Officer for de novo, year-wise adjudication in the light of the Supreme Court's clarified tests on advancement of general public utility, commerciality of receipts, and compliance with the proviso to section 2(15); both appeals disposed of as allowed for statistical purposes.

Fair market value of unquoted equity shares - Section 56(2)(viib) - taxation of excess consideration for issue of shares - Rule 11UA - valuation methods (Discounted Cash Flow method and Net Asset Value method) and assessee's option - Assessing Officer's power to change valuation method - Reliance on valuation report certified by merchant banker / chartered accountant - Deductibility of interest on delayed payment of TDS under general head of expenditure

Rule 11UA - valuation methods (Discounted Cash Flow method and Net Asset Value method) and assessee's option - Assessing Officer's power to change valuation method - Reliance on valuation report certified by merchant banker / chartered accountant - Section 56(2)(viib) - taxation of excess consideration for issue of shares - Validity of AO's rejection of the assessee's DCF valuation and replacement with NAV for determining fair market value under section 56(2)(viib). - HELD THAT: - The Tribunal held that Rule 11UA(2) expressly permits the assessee to choose between the NAV method and the DCF method (certified by a merchant banker or accountant) for determining FMV for the purposes of section 56(2)(viib). The assessee had adopted the DCF method and produced a valuation report certified by a chartered accountant. The Assessing Officer substituted the NAV method on the basis of alleged mismatch between projected EBITDA used in the DCF and actuals, but did not record any lacunae in the DCF report nor obtain technical/valuation assistance or demonstrate that the DCF was not a recognised method under the Rule. The Tribunal observed that an AO is not empowered to change the valuation method chosen by the assessee merely because he prefers a different computation; challenge to a chosen method requires demonstrable non-recognition of the method or verifiable defect in the valuation basis. The Tribunal distinguished the facts from authorities where DCF was rejected because the data supplied to the valuer was unverifiable, noting that no such factual matrix was established here. Accordingly the CIT(A)'s deletion of the addition made on account of difference between issue price and FMV was upheld and the addition was set aside. [Paras 8]

Addition made by AO under section 56(2)(viib) by replacing the assessee's DCF valuation with NAV is not justified and is deleted; grounds (i) to (iii) of the revenue appeal are dismissed.

Deductibility of interest on delayed payment of TDS under general head of expenditure - Section 37(1) - allowability of business expenditure - Allowability of deduction for interest on delayed payment of TDS/TCS claimed by the assessee. - HELD THAT: - The assessee did not contest this ground before the Tribunal and the assessee's representative accepted the revenue's contention in respect of disallowance of interest on delayed payment of TDS. The Tribunal therefore allowed the revenue's ground on this issue without independent adjudication of detailed legal arguments. [Paras 8]

Ground (iv) of the revenue appeal is allowed and the deduction for interest on delayed payment of TDS/TCS is not permitted as claimed.

Final Conclusion: The revenue's appeal is partly allowed: the addition under section 56(2)(viib) arising from replacement of the assessee's DCF valuation by NAV is set aside and grounds (i)-(iii) are dismissed, while the revenue's challenge to the deduction for interest on delayed TDS is allowed.

Unexplained cash credits under Section 68 - Explanation of source for bank deposits and time deposits - Duplication of additions - Taxation of source versus application of funds - Admission of additional evidence for sufficient cause (medical grounds)

Unexplained cash credits under Section 68 - Duplication of additions - Deletion of addition of Rs. 10,00,000 as unexplained cash deposit in HDFC Bank - HELD THAT: - The Tribunal affirmed the CIT(A)'s finding that the Assessing Officer had made a duplicate addition by separately treating a Rs. 10,00,000 deposit which was covered by an addition of Rs. 11,29,000 already made as unexplained cash credits. The CIT(A) examined the facts and evidence and concluded that no contrary material was placed before the Tribunal to show that the Rs. 10,00,000 was distinct from the Rs. 11,29,000 addition; accordingly the deletion was upheld. [Paras 21]

Addition of Rs. 10,00,000 deleted; Revenue's ground dismissed.

Explanation of source for bank deposits and time deposits - Duplication of additions - Deletion of additions of Rs. 2,73,91,415 and Rs. 1,49,80,000 on account of time deposits - HELD THAT: - The Tribunal upheld the CIT(A)'s appreciation that the assessee furnished charted bank transactions and FDR details showing that the sums originated from sale proceeds of land and that certain FDR amounts were rotated, leading the Assessing Officer to mistakenly treat original investments and their successive maturities as separate undisclosed investments. The CIT(A) found the original investment to be of lesser amounts (notably Rs. 90 lakhs) which were reinvested, and that the assessee explained transfers between banks; on that basis the CIT(A) deleted both additions and the Tribunal found no infirmity in that conclusion. [Paras 22]

Additions of Rs. 2,73,91,415 and Rs. 1,49,80,000 deleted; Revenue's grounds dismissed.

Taxation of source versus application of funds - Explanation of source for bank deposits and time deposits - Deletion of addition of Rs. 55,00,000 out of Rs. 65,00,000 treated as unexplained advances - HELD THAT: - The Tribunal agreed with the CIT(A)'s finding that advances of Rs. 55,00,000 to a firm (Samuria Textile) were evidenced by account payee cheques and that the recipient's identity and genuineness were established (the assessee's son being a partner). The CIT(A) also relied on the fact that the source of these advances were proceeds of sale of land which had been admitted and taxed as capital gains, applying the principle that either source or application may be taxed but double taxation must be avoided. The remaining Rs. 10,00,000 advances which were not satisfactorily explained were sustained. [Paras 23]

Rs. 55,00,000 deleted and Rs. 10,00,000 confirmed; Revenue's ground in part dismissed.

Final Conclusion: The Tribunal dismissed the Revenue's appeal against the CIT(A)'s deletions and affirmed the deletion of the contested additions (subject to confirmation of Rs. 10,00,000 of unexplained advances), thereby upholding the CIT(A)'s allowance of the assessee's explanations and admission of additional evidence on medical grounds.

Remand - binding nature of tribunal order - implementation of higher court judgment - jurisdictional error - requirement of speaking order and opportunity of hearing - relief under Notification No.62/2007-Cus

Remand - binding nature of tribunal order - implementation of higher court judgment - Whether the adjudicating authority, on remand, acted in accordance with the Tribunal's directions and whether the impugned order-in-original dated 5th January, 2023 is sustainable. - HELD THAT: - The Court examined the Tribunal's remand order (noting the Tribunal's directions in paragraphs 6, 7 and 8) and the fresh order-in-original passed by the adjudicating authority on remand. The Division Bench had earlier declined to disturb the Tribunal's remand order, which thereby attained finality. The adjudicating authority was therefore bound to implement the Tribunal's findings and directions in letter and spirit. On review, the impugned order-in-original did not follow the determinative guidance provided by the Tribunal; instead it advanced independent reasoning and failed to give effect to the Tribunal's directions. Such departure was characterised as not merely a factual error but a jurisdictional error and an error of law because it contradicted the binding precedent and the Tribunal's final directions. Given the finality of the Tribunal's remand order and the adjudicating authority's duty to comply with it, interference by the writ court was warranted despite availability of appellate remedy.

Impugned order-in-original dated 5th January, 2023 set aside as not sustainable; adjudicating authority failed to implement the Tribunal's remand directions.

Requirement of speaking order and opportunity of hearing - relief under Notification No.62/2007-Cus - What remedial directions should be given to ensure compliance with the Tribunal's remand order. - HELD THAT: - The Court directed that the matter be remanded to the adjudicating authority with a mandate to implement the Tribunal's order dated 28th July, 2022 strictly in accordance with its findings and directions, including conferring relief under Notification No.62/2007-Cus as indicated by the Tribunal. The adjudicating authority is required to pass a reasoned and speaking order after affording the petitioner an opportunity of hearing or to its authorised representative. The Court imposed a timeline of eight weeks from communication of the judgment for completing this exercise and providing consequential benefits, if any, in accordance with law.

Matter remanded to the adjudicating authority to implement the Tribunal's directions, pass a speaking order after hearing, and grant relief as per Notification No.62/2007-Cus within eight weeks.

Final Conclusion: The writ petition is allowed: the impugned order-in-original dated 5th January, 2023 is quashed and the matter is remitted to the adjudicating authority to implement the Tribunal's remand order dated 28th July, 2022 strictly as directed (including relief under Notification No.62/2007-Cus), by a reasoned speaking order after hearing the petitioner, within eight weeks.

Computation of limitation period for refund of duty paid provisionally - Harmonious construction of Notification No.102/2007-Cus. with Section 27(1B)(C) of the Customs Act, 1962 - Binding effect of Board circular vis-a -vis statutory provision and notification - Remand for fresh adjudication on admissibility of refund claims

Computation of limitation period for refund of duty paid provisionally - Harmonious construction of Notification No.102/2007-Cus. with Section 27(1B)(C) of the Customs Act, 1962 - Whether the one-year limitation for filing refund of SAD under Notification No.102/2007-Cus. is to be reckoned from the date of provisional payment or from the date of adjustment of duty after final assessment where provisional assessment was made. - HELD THAT: - The Tribunal examined the Notification as amended and the statutory provision in Section 27(1B)(C) which deals with provisional assessments. It observed that where duty has been paid provisionally and assessment is subsequently finalized, the limitation period must be computed from the date of adjustment of duty after final assessment rather than from the initial provisional payment date. The Tribunal followed the reasoning in SUZUKI MOTORCYCLE INDIA P. LTD. v. C.C. (Import & General), where refund claims filed before finalisation were held not to be time-barred in similar circumstances. The Court rejected the narrower departmental interpretation that reckoned limitation from the date of provisional payment, holding that the Notification must be read harmoniously with the statutory provision governing provisional assessments. [Paras 2, 4]

The one-year period for filing refund claims in cases of provisional assessment is to be computed from the date of adjustment of duty after final assessment and not from the date of provisional payment.

Binding effect of Board circular vis-a -vis statutory provision and notification - Whether the Board Circular that sought to construe the notification as requiring reckoning from the date of provisional payment can override the statutory interpretation under Section 27(1B)(C). - HELD THAT: - The Tribunal held that the Board Circular cannot be read to override or alter the clear statutory prescription in Section 27(1B)(C) and the Notification must be interpreted consistently with the statute. In the factual matrix before it, there was no ambiguity in the notification once read with the statutory provision, and the Circular's narrower construction was therefore not followed. The Tribunal relied on earlier decisions which treated the statutory provision as determinative in such cases. [Paras 4]

The Board Circular cannot be used to construe the limitation period contrary to the statutory scheme; the statute and Notification read together govern the reckoning of limitation.

Remand for fresh adjudication on admissibility of refund claims - What further direction should be given in respect of the refund claims filed by the appellants? - HELD THAT: - Having held that the claims could not be rejected as time-barred on the departmental reading, the Tribunal directed remand to the original adjudicating authority to decide the refund claims expeditiously on merits. The authority was to consider admissibility strictly in accordance with law and was not to reopen or rely on new facts or issues at this belated stage. [Paras 5]

The appeals are allowed and the matters are remanded to the original authority to examine and decide the refund claims expeditiously on legal admissibility, without taking up new facts or issues.

Final Conclusion: The Tribunal allowed the appeals, holding that where duty was paid provisionally the one-year limitation for claiming refund is to be computed from the date of adjustment after final assessment in terms of Section 27(1B)(C); the Board circular's contrary construction was not followed; matters remitted to the original authority for expeditious adjudication of admissibility.

Penalty under Section 112(a) of the Customs Act, 1962 - obligations of Customs House Agent under Regulation 13 of the CHALR, 2004 - liability of a Customs House Agent for abetment/collusion in mis-declaration - principle that partners cannot be separately penalised where the firm is penalised

Penalty under Section 112(a) of the Customs Act, 1962 - obligations of Customs House Agent under Regulation 13 of the CHALR, 2004 - liability of a Customs House Agent for abetment/collusion in mis-declaration - Sustainability of penalty imposed on the Customs House Agent firm (M/s Krishna Shipping Agency) under Section 112(a) in view of the Tribunal's finding on Regulation 13 of CHALR, 2004. - HELD THAT: - The Tribunal, by its order dated 15.09.2016, set aside the revocation of the CHA's licence and held that the CHA had not violated Regulations 13(a), (d) and (o) of CHALR, 2004, finding no evidence that the CHA knew of any irregularity before detection by the department and noting that reasonable steps had been taken to comply with Regulation 13. Those findings directly undercut the adjudicating authority's conclusion that the CHA submitted fraudulent documents, failed to advise the importer, or abetted mis-declaration. In view of the Tribunal's categorical exoneration on the core obligations under Regulation 13, the appellate tribunal held that the penalty under Section 112(a) could not be sustained against the CHA firm. The determinative reasoning is that the penalty rested on findings of violation of Regulation 13, which the Tribunal has negatived; accordingly the statutory basis for imposing the penalty on the firm no longer subsists. [Paras 9]

Penalty imposed on the CHA firm under Section 112(a) is not sustainable and is set aside in view of the Tribunal's finding that there was no violation of Regulation 13 of CHALR, 2004.

Principle that partners cannot be separately penalised where the firm is penalised - penalty under Section 112(a) of the Customs Act, 1962 - Sustainability of separate penalty imposed on the partner (Mr. Vivek Banka) in addition to penalty on the partnership firm. - HELD THAT: - The Tribunal noted the settled legal proposition, as applied by the Gujarat High Court in the cited authority, that a partnership firm is not a separate legal entity and, where a firm has been penalised for an offence, separate penalty cannot be imposed on a partner for the same offence unless a distinct role or separate liability is established. Applying that principle, the appellate tribunal held that the separate penalty on the partner was not sustainable where the impugned order had already imposed penalty on the partnership firm and no independent adjudication sustaining penalty on the firm survived (and, in any event, the firm was exonerated by the Tribunal). Consequently, the penalty on the partner had to be set aside. [Paras 10, 13]

Penalty imposed on the partner is not sustainable and is set aside; a partner cannot be separately penalised for the same offence for which the firm has been penalised.

Final Conclusion: Both appeals are allowed: penalties imposed under Section 112(a) on the CHA firm and on its partner are set aside - the CHA was exonerated of breaches of Regulation 13 by the Tribunal, and a partner cannot be separately penalised for the same offence where the firm has been penalised.

Summary order. Matter posted for further hearing on 27.06.2023; Court records that it is considering the question of exclusion of days in the initial 15-day period in relation to claims for police custody.

Maintainability of habeas corpus after judicial remand - power of Enforcement Directorate to seek police custody under the Prevention of Money Laundering Act - application of Section 19 PMLA as self-contained arrest regime with Article 22 safeguards - exclusion of hospitalization period from computation of initial 15 days of custody under Section 167 CrPC

Maintainability of habeas corpus after judicial remand - Whether the writ of habeas corpus is maintainable despite a judicial remand having been passed - HELD THAT: - The Court held that a habeas corpus petition is ordinarily not maintainable once a competent court has passed a remand order, because remand is a judicial act; however, an exception exists where the remand/order is shown to be vitiated by absolute illegality, lack of jurisdiction or total non-application of mind. Applying those principles to the facts, the majority concluded that the petition fell within the exceptional category and that the High Court could examine legality of detention despite the remand. The Court therefore entertained and allowed the habeas corpus petition on the grounds indicated elsewhere in the order. The analysis relied on and distinguished precedents which establish the general rule and the narrow exception for patent illegality or mechanical remand.

Habeas corpus petition is maintainable in the facts and circumstances of this case and is allowed.

Power of Enforcement Directorate to seek police custody under the Prevention of Money Laundering Act - application of Section 19 PMLA as self-contained arrest regime with Article 22 safeguards - Whether the Enforcement Directorate is entitled to seek police custody (custody for custodial interrogation) under the PMLA or otherwise under Section 167 CrPC - HELD THAT: - The majority held that officers empowered to arrest under Section 19 PMLA are not entrusted by the statute with the powers of an Officer-in-Charge of a police station necessary to seek and hold police custody under Section 167 CrPC. While Section 19 provides for arrest and contains safeguards (including informing grounds and forwarding material to the adjudicating authority), Parliament did not confer on ED officers the statutory status of Station House Officer as is done under some other special enactments. Accordingly, custody other than judicial custody could not be lawfully conferred on ED beyond the statutory framework; as a consequence the remand-cum-order placing the detenue in ED/police custody was regarded as without authority. (The Court observed the special PMLA arrest regime and Article 22 safeguards but determined parliamentary omission to confer station-house functions to ED officers precludes police custody being granted to ED.)

Enforcement Directorate is not entrusted with powers to seek police custody under the Prevention of Money Laundering Act, 2002; the custody order in that form was without authority.

Exclusion of hospitalization period from computation of initial 15 days of custody under Section 167 CrPC - Whether the period during which the detenue underwent hospital treatment should be excluded from computation of the initial 15-day period for custodial interrogation/custody - HELD THAT: - The majority treated this contention as unnecessary to decide finally for the disposal of the habeas corpus petition because ED was held not entitled to police custody; accordingly the miscellaneous petition seeking exclusion of the hospitalisation period was dismissed. The Court noted the jurisprudence on the 15 day rule and on exceptional circumstances (including the Supreme Court's recent decisions), and recorded that exclusion was not required to be granted in the circumstances of this case once ED custody was held impermissible; therefore the separate prayer for exclusion was refused.

Miscellaneous petition seeking exclusion of the hospitalization period is dismissed.

Final Conclusion: The writ of habeas corpus was allowed: the High Court held that, on the facts before it, habeas corpus was maintainable and directed that the detenue be set at liberty forthwith; the Court further held that the Enforcement Directorate is not empowered under the PMLA to seek police custody and dismissed the petition seeking exclusion of the period of hospitalisation from the initial custody computation.

Split verdict - reference to a third Judge - direction for early adjudication - expedited listing of special leave petitions - pendency of appellate proceedings having no bearing on subordinate proceedings

Split verdict - reference to a third Judge - direction for early adjudication - Direction to the Chief Justice of the High Court to place the matter before a third Judge and for the assigned Bench to decide the issues mentioned in the Court's earlier order of 21.06.2023 at the earliest. - HELD THAT: - The Supreme Court recorded that the Division Bench of the High Court has delivered a split verdict and accordingly requested the Chief Justice to refer the matter to a third Judge for resolution. The request expressly requires the newly constituted Bench to determine the issues highlighted in the Supreme Court's prior order dated 21.06.2023 without delay. The direction is administrative and procedural, aimed at securing prompt final adjudication of the contested points identified earlier.

The Chief Justice of the High Court is requested to place the matter before a third Judge at the earliest, with a further request that the assigned Bench decide the issues noticed in the order dated 21.06.2023 as soon as possible.

Expedited listing of special leave petitions - pendency of appellate proceedings having no bearing on subordinate proceedings - Expedited listing of the special leave petitions and clarification that their pendency shall not affect proceedings before the High Court. - HELD THAT: - The Supreme Court fixed the special leave petitions for hearing on 24.07.2023, directing expedited adjudication at the Supreme Court level. Simultaneously, the Court clarified that the mere pendency of these special leave petitions will not operate to stay, suspend, or otherwise affect the ongoing proceedings before the High Court. This operates as a procedural clarification to prevent interlocutory stalling of High Court proceedings by the pendency of the petitions.

The special leave petitions are posted for hearing on 24.07.2023; their pendency shall have no bearing on the proceedings pending before the High Court.

Final Conclusion: On receipt of a split verdict by the High Court, the Supreme Court has requested reference to a third Judge for early resolution of the issues noted in its order dated 21.06.2023, has listed the special leave petitions for hearing on 24.07.2023, and has clarified that the pendency of the SLPs will not affect the High Court proceedings.

Maintainability of habeas corpus petition - exclusion of period of medical treatment from period of custodial interrogation - interim observations not to prejudice merits - adjournment notwithstanding pendency of Special Leave Petitions

Maintainability of habeas corpus petition - Final determination on the maintainability of the Habeas Corpus petition is pending before the High Court and has not been decided by this Court. - HELD THAT: - The High Court has yet to render its final opinion on whether the Habeas Corpus petition is maintainable. The Supreme Court recorded that this question is likely to be examined by the High Court on the listed date and therefore has not adjudicated the issue on merits. The matter has been posted for further hearing before this Court after the High Court's consideration.

Issue remanded to the High Court for final consideration; no decision on maintainability by this Court.

Exclusion of period of medical treatment from period of custodial interrogation - Whether the period of medical treatment undergone by the detenu is to be excluded from the period of custodial interrogation is pending before the High Court and has not been decided by this Court. - HELD THAT: - The Court noted that the High Court is yet to give its final opinion on whether the detention period should exclude the time the detenu spent undergoing medical treatment. As this question remains to be examined by the High Court on the scheduled date, the Supreme Court abstained from pronouncing on the merits and has listed the petitions for further hearing after the High Court's consideration.

Issue remanded to the High Court for final consideration; no decision by this Court on exclusion of treatment period.

Interim observations not to prejudice merits - adjournment notwithstanding pendency of Special Leave Petitions - Interim directions concerning procedural aspects of the proceedings and the effect of observations were decided by this Court. - HELD THAT: - The Supreme Court directed that (a) the pendency of these Special Leave Petitions shall not be used as a ground to seek an adjournment of the High Court hearing, and (b) the observations made by the High Court in its interim order dated 15-06-2023 or any oral observations by this Court during the hearing shall have no bearing on the merits of the case. These are procedural clarifications intended to preserve the High Court's and this Court's impartial consideration of the substantive issues.

Pendency of SLPs will not allow adjournment; interim or oral observations are declared to have no bearing on merits.

Final Conclusion: The Supreme Court has not decided the substantive questions concerning maintainability of the Habeas Corpus petition and the exclusion of the period of medical treatment from custodial interrogation; both issues remain for final determination by the High Court and the SLPs are posted for further hearing. Procedural directions were given that pendency of the SLPs shall not be a ground for adjournment and that interim/oral observations shall not affect the merits.

Habeas Corpus - maintainability of Habeas Corpus against an order of remand - judicial remand - Article 22 rights - arrest under P.M.L.A. and safeguards under Section 19 - absolute illegality of remand - medical transfer of a detenue while in judicial custody - constitution of expert medical panel to assess emergent treatment

Habeas Corpus - maintainability of Habeas Corpus against an order of remand - judicial remand - absolute illegality of remand - Article 22 rights - arrest under P.M.L.A. and safeguards under Section 19 - Entitlement to maintain Habeas Corpus after filing of remand order and whether alleged non compliance with procedural safeguards amounted to absolute illegality warranting release. - HELD THAT: - The Court analysed the settled law that a writ of Habeas Corpus against an order of remand is maintainable only where the remand is absolutely illegal, afflicted by want of jurisdiction, or mechanically passed. Applying that principle (as summarised from Gautam Navlakha), the Court confined its examination to the limited questions whether the factual allegations of non compliance with procedural safeguards were correct and, if so, whether they rose to the level of absolute illegality. On that limited basis the petition was entertained despite the existence of a subsequent judicial remand; the respondents were directed to file counter affidavit and produce the remand order and other material for adjudication on the limited questions framed by the Court. The Court observed that arrests under P.M.L.A. are governed by Section 19 which incorporates safeguards akin to Article 22, and that non compliance with provisions of the Cr.P.C. such as Sections 40 or 41 A would not automatically arise where P.M.L.A. procedures have been followed; these contentions were left for adjudication on the returnable date. [Paras 13, 14, 15]

Habeas Corpus petition entertained on limited questions (factual correctness of alleged non compliance and whether it amounted to absolute illegality); notice issued to respondents and counter affidavit and remand order directed to be placed on record by 22.06.2023.

Medical transfer of a detenue while in judicial custody - emergent medical treatment - constitution of expert medical panel to assess emergent treatment - Whether the detenu, while in judicial custody pursuant to remand, may be transferred from the Government hospital to the private hospital of his choice for emergent treatment and under what conditions. - HELD THAT: - On the material before the Court, including the medical bulletin reporting significant coronary disease and recommending coronary bypass, the Court declined to lightly reject the treating doctors' opinion about emergent treatment. While noting that the detenu would remain in judicial custody and that enlargement on bail was not appropriate, the Court accepted that, in matters concerning life saving treatment, the detenue's choice of hospital can be respected. The Court authorised transfer to the private hospital proposed by the family (at the detenu's cost) but preserved the respondents' ability to constitute and deploy a specialist panel to examine the detenu, verify records and monitor treatment. The respondents were permitted to determine the specialist panel that may visit and examine the detenu at the private hospital. [Paras 16, 21, 22]

Detenu ordered to be shifted to the Cauvery Hospital, Chennai for the emergency treatment indicated in the Government hospital medical bulletin; detenu to remain in judicial custody and respondents entitled to constitute an expert panel to examine and monitor treatment.

Final Conclusion: Petition entertained limitedly to determine whether procedural non compliance in the arrest/remand amounted to absolute illegality; notice issued returnable 22.06.2023 with directions to place remand order and file counter affidavit. Interim relief granted permitting transfer of the detenu to the private hospital of choice for emergent treatment while remaining in judicial custody, subject to examination and monitoring by an expert panel to be nominated by the respondents.

CENVAT credit - capital goods - components, spare parts and accessories - used for producing or processing of any goods - liberal interpretation of "in the manufacture of goods"

CENVAT credit - capital goods - components, spare parts and accessories - Oxygen gas and acetylene gas used for repairs and maintenance of plant and machinery are eligible to be treated as components/spares and/or accessories of welding machines and qualify for CENVAT credit as capital goods. - HELD THAT: - The Court applied the Division Bench decision in Hindustan Zinc Ltd., which held that items which are machines, tools or their components, spare parts and accessories, and which are used for producing or processing goods or for activities integrally connected with manufacture, qualify as capital goods for credit. Reliance was placed on the Supreme Court's reasoning in Jawahar Mills and JK Cottons to adopt a liberal construction of the expression "in the manufacture of goods", recognising that equipment not directly forming part of the final product but integrally connected with the manufacturing process (including items used for repair and maintenance) fall within the scope of capital goods. The Court observed that the facts (use of gases as accessories to welding machines for repair/maintenance) are not disputed and, following the precedent, concluded that the gases qualify as accessories/capital goods and are eligible for CENVAT credit. The appeal was therefore allowed in terms of the cited Division Bench judgment. [Paras 10, 11]

Appeal allowed; oxygen and acetylene gases held to be accessories of welding machines and eligible for CENVAT credit as capital goods, allowance made in terms of Hindustan Zinc Ltd.'s judgment.

Final Conclusion: The appeal is allowed in terms of the Division Bench judgment in Hindustan Zinc Ltd.; the gases used for repair and maintenance are held to be accessories/capital goods and eligible for CENVAT credit.

Power of the High Court under Article 226 to extend or modify a statutory scheme - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - obligation to pay settlement amount within stipulated period - failure to establish technical impediment to payment - consequence of non-compliance with scheme timelines - delay and laches in seeking equitable relief - exceptional relief where inability to comply is beyond applicant's control

Power of the High Court under Article 226 to extend or modify a statutory scheme - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - obligation to pay settlement amount within stipulated period - Whether this Court can extend the time-limit fixed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 by exercising powers under Article 226. - HELD THAT: - The Court held that it cannot, in exercise of powers under Article 226, extend or modify the Scheme so as to alter its stipulated time-limits. Reliance was placed on the Hon'ble Supreme Court's decisions which recognise that a person seeking benefit under a scheme must strictly abide by its terms and that extension of time not provided by the Scheme would amount to judicially modifying the Scheme, which is the prerogative of the Government. The Court further noted that exceptional or extraordinary cases may warrant remedial measures, but such relief depends on specific facts showing inability to comply was beyond the applicant's control; no such legal impediment was shown by the petitioner in the present case. [Paras 18, 19, 20, 25]

The High Court will not extend or modify the time-limit under the Scheme; the petitioner is not entitled to extension under Article 226.

Failure to establish technical impediment to payment - consequence of non-compliance with scheme timelines - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - electronic payment requirement under Section 127(5) - Whether the petitioner has established a technical glitch or other impediment that excused non-payment within the thirty-day period specified in SVLDRS-3. - HELD THAT: - The Court found that SVLDRS-3 issued on 28th January, 2020 required electronic payment within thirty days, i.e., on or before 27th February, 2020. The petitioner's first communication about the alleged technical error was an e-mail dated 28th February, 2020 at 5:48 p.m., which was after the statutory period had expired. The respondents placed on record that other applicants used the same portal without difficulty and produced echallans of declarants who obtained benefits under the Scheme. Given these facts, the petitioner failed to demonstrate a bona fide technical impediment that prevented payment within the prescribed time and therefore cannot claim relief based on the alleged glitch. [Paras 16, 17, 21, 22, 23]

The plea of technical glitch is not established; non-payment within the stipulated period cannot be excused on that ground.

Delay and laches in seeking equitable relief - exceptional relief where inability to comply is beyond applicant's control - Whether the petition is maintainable notwithstanding the delay and laches pleaded by the respondents and the petitioner's invocation of COVID-19 related extensions or relief. - HELD THAT: - The Court observed that the petitioner communicated the alleged problem only after expiry of the statutory period and further delayed in approaching the Court (writ filed on 21st July, 2022). The asserted hardship arising from COVID-19 did not amount to a legal impediment preventing compliance within the Scheme's time-lines. While courts may grant relief in extraordinary cases where compliance was impossible, the facts here did not demonstrate such an extraordinary inability. Consequently the petition was found to be barred by delay and laches and unsuitable for equitable relief. [Paras 6, 24, 25]

The writ petition is barred by delay and laches and the petitioner is not entitled to equitable relief based on the circumstances asserted.

Final Conclusion: The writ petition is dismissed. The petitioner failed to pay the settlement amount within the Scheme's stipulated period, did not establish a valid technical or legal impediment to payment, and filed the petition after inordinate delay; consequently, no relief can be granted under Article 226 to extend or modify the Scheme's time-limits.

Refund of unutilized CENVAT credit on closure and surrender of registration - refund entitlement arising from export under bond/LUT - remand for fresh adjudication and verification

Refund of unutilized CENVAT credit on closure and surrender of registration - refund entitlement arising from export under bond/LUT - remand for fresh adjudication and verification - Whether the appellant's refund claim for accumulated CENVAT credit, claimed on account of closure of factory and exports under bond/LUT, should be remanded for fresh consideration by the original authority - HELD THAT: - The Tribunal noted that the appellant contends that accumulated CENVAT credit could not be utilized due to factory closure and surrender of registration, and that accumulation arose from exports under bond/LUT and differential duty rates on inputs and final products. The adjudicating authority had rejected the refund claim on the ground that neither the Central Excise Act nor the Cenvat Credit Rules expressly provide for cash refund of unutilized CENVAT credit on surrender. The Tribunal observed that, while it expressed no view on the merits, in cases of export under bond/LUT without payment of duty a manufacturer may be entitled to claim refund of accumulated unutilized CENVAT credit, and that the factual contentions and entitlement require verification. Accordingly, the Tribunal did not decide the substantive claim but remanded the matter to the original authority for fresh adjudication after granting opportunity of personal hearing, leaving all issues open for consideration. [Paras 5, 6]

Appeal allowed by way of remand to the original adjudicating authority to decide the refund claim afresh after affording personal hearing; no opinion expressed on the merits.

Final Conclusion: The Tribunal remanded the refund claim for accumulated CENVAT credit to the original authority for fresh adjudication and verification, granting the appellant a personal hearing, and expressly declined to adjudicate the merits of the refund claim in this order.

Classification of malt, maize flakes and hops pellets as taxable goods under Karnataka Tax on Entry of Goods Act - non-retrospective application of judicial clarifications to periods prior to the decision in United Breweries - imposition of interest under Section 7(2) requires default in payment for the period in question - levy of penalty under Section 7(3) for periods preceding judicial clarification

Classification of malt, maize flakes and hops pellets as taxable goods under Karnataka Tax on Entry of Goods Act - Malted barley (malt), maize flakes, malt conversion and malt extract are taxable under the KTEG Act as held in United Breweries. - HELD THAT: - The Court noted that United Breweries answered the question whether malted barley/barley malt is an agricultural produce and exempt under the Second Schedule in the negative, thereby treating such goods as taxable under the KTEG Act. The assessee's contention that the facts in United Breweries were not similar or that the aspect of 'fit for consumption' was not considered was rejected, the Court observing that 'fit for consumption' was addressed in United Breweries (paras. 25-29 of that decision). Consequently, the legal position established by United Breweries applies to the goods purchased and used by the assessee.

Goods in question are taxable under the KTEG Act in accordance with the decision in United Breweries.

Non-retrospective application of judicial clarifications to periods prior to the decision in United Breweries - imposition of interest under Section 7(2) requires default in payment for the period in question - levy of penalty under Section 7(3) for periods preceding judicial clarification - Tax, interest and penalty under Sections 7(1), 7(2) and 7(3) of the KTEG Act cannot be imposed for periods prior to 14.09.2015 when the decision in United Breweries was rendered. - HELD THAT: - The Court held that although United Breweries declared the goods taxable as of 14.09.2015, imposing tax, interest and penalty for periods antecedent to that decision is not sustainable. Reliance was placed on Jayce Trading Corporation where this Court disallowed invocation of Section 7(2) for periods before the date on which the tax liability was clarified. Applying that principle, the court concluded that demands for tax, interest and penalty for periods prior to the judicial clarification (14.09.2015) must be set aside because the legal position became fixed only upon the later decision.

The KAT order confirming demand of tax, interest and penalty is set aside insofar as it relates to periods prior to 14.09.2015.

Final Conclusion: Revision petitions allowed; the Tribunal's confirmation of demands for tax, interest and penalty under Sections 7(1), 7(2) and 7(3) of the KTEG Act is set aside in respect of the period prior to 14.09.2015, while the goods are held taxable pursuant to the decision in United Breweries.