TaxTMI Updates e-Newsletter
Jul 13,2026

Cancellation of GST registration on grounds beyond show cause notice - Specific notice of proposed grounds for cancellation - non-furnishing of returns though the show cause notice alleged fraud, wilful misstatement or suppression of facts in obtaining registration - HELD THAT: - The Court found that the impugned cancellation order was founded on a completely different statutory ground from the one stated in the show cause notice. While the notice proposed cancellation on the allegation that registration had been obtained by fraud, wilful misstatement or suppression of facts, the final order cancelled the registration for failure to furnish returns for the prescribed period. Since the petitioner was never put to notice of the ground ultimately used for cancellation, the order was held unsustainable. On that sole ground, the Court also held that the notice and the consequential cancellation could not stand, while leaving it open to the authorities to initiate fresh proceedings on specific grounds with supporting material. [Paras 4, 6]

The show cause notice and the cancellation order were quashed, the GST registration was restored, and liberty was reserved to issue a fresh notice containing specific grounds and supporting documents, if grounds for cancellation exist.

Final Conclusion: The writ petition was allowed on the ground that the GST registration had been cancelled on a basis never disclosed in the show cause notice. The registration was restored, with liberty to the respondents to proceed afresh in accordance with law on a properly framed notice.

Writ jurisdiction despite alternate statutory remedy - Penalty under Section 122 in adjudication under Section 74 - patent lack of jurisdiction - violation of natural justice and jurisdictional error - non-consideration of the reply - non-service of personal hearing notices - complaint regarding coercive statement and denial of cross-examination

Alternate remedy - Natural justice - Disputed questions of fact - non-consideration of reply, absence of notice of personal hearing, reliance on a retracted statement, and denial of cross-examination - HELD THAT: - The Court held that although availability of an alternative remedy is a rule of discretion and not an absolute bar, writ interference is warranted only where a patent jurisdictional defect or manifest breach of natural justice is shown. The complaint under Section 74(9) that the reply was not adequately dealt with was treated as going to the adequacy of reasons and correctness of findings, which are matters for the appellate authority. The plea of violation of Section 75(4) was found to involve disputed questions of fact as to issuance and service of hearing notices. The objections regarding the voluntariness of the statement recorded under Section 70, its retraction, and the refusal of cross-examination were held to concern evidentiary appreciation on merits. Since the grounds urged either required factual examination or related to the legality and correctness of the adjudication on merits, no exceptional case was made out to bypass the statutory remedy. [Paras 20, 22, 24, 29]

The writ petition was not entertained on these grounds, leaving the petitioner to pursue the statutory appeal.

Competence to impose penalty - Consequential penalty in tax adjudication - HELD THAT: - Rejecting the plea of lack of jurisdiction, the Court held that the issue stood concluded against the petitioner. Referring to Patanjali Ayurved Limited [2025 (6) TMI 115 - ALLAHABAD HIGH COURT], the Court accepted that the proper officer adjudicating proceedings under Sections 73 or 74 is competent to determine and impose the consequential penalties contemplated by Section 122, and that the statutory scheme does not require separate penalty proceedings where the liability arises from the same adjudication. Explanation 1(ii) to Section 74 and Rule 142 were also noticed as supporting culmination of the consequential proceedings before the adjudicating authority itself. [Paras 26, 27]

The objection to the authority's competence to impose penalty was rejected.

Final Conclusion: The High Court declined to entertain the writ petition, holding that the grounds urged did not disclose any patent lack of jurisdiction or manifest breach of natural justice so as to displace the statutory appellate remedy. The petition was dismissed with liberty to avail the appeal, and the period of pendency of the writ petition was directed to be excluded for limitation purposes.

Opportunity of Personal Hearing - Principles of natural justice - Final orders passed under the GST proceedings without affording the petitioner an opportunity of personal hearing - HELD THAT: - The Court proceeded on the undisputed position, accepted on behalf of the respondents, that no opportunity of personal hearing had been granted before passing the impugned orders. Since the challenge was confined to that procedural infirmity, the Court treated the defect as a violation of the principles of natural justice and directed fresh consideration in accordance with law after granting such hearing. [Paras 5, 6]

The impugned orders were set aside and the matter was remitted to the competent authority for fresh proceedings after affording an opportunity of personal hearing; no coercive action was to be taken in the meantime and any recovery already made was made subject to the fresh orders.

Final Conclusion: The writ petition was disposed of by setting aside the impugned orders solely on the ground of denial of personal hearing and by remitting the matter for fresh adjudication in accordance with law.

Retrospective cancellation of GST registration - Requirement of reasons for retrospective effect - Remand for fresh determination - Maintainability of writ petition - Availability of statutory appeal under Section 107 - HELD THAT: - The Court noted that the petitioner had neither replied to the show cause notice nor availed the statutory remedy, and that the respondent had placed material to justify cancellation proceedings. However, the determinative defect found by the Court was that no specific reason had been recorded either in the show cause notice or in the final order for giving the cancellation retrospective effect from the date of registration. Since the petitioner confined the writ petition to the limited relief against retrospective cancellation, the Court did not examine the merits of the allegations regarding non-existence of business at the declared place of business. On that limited question, the matter was directed to be reconsidered by the Proper Officer after permitting the petitioner to file a detailed reply and after affording hearing, followed by a fresh reasoned order on whether cancellation should operate from the original registration date or from the date of cancellation order. [Paras 19, 20, 21, 22, 23]

The order was set aside only to the extent it gave retrospective effect to cancellation, and the matter was remitted to the Proper Officer for a fresh reasoned decision confined to the effective date of cancellation.

Final Conclusion: The petition was disposed of by setting aside the retrospective operation of the cancellation order alone and remitting the question of the effective date of cancellation to the Proper Officer for fresh decision after reply and hearing. No opinion was expressed on the merits of the allegation concerning non-existence of the business from the declared premises.

Provisional attachment - Personal hearing on objections to attachment - Reasoned order - No personal hearing - Provisional attachment of the petitioner's bank accounts and flats, made without hearing him despite objections having been filed - HELD THAT: - The Court noted that the petitioner had filed objections against the provisional attachment and that he was willing to appear before the adjudicating authority for a personal hearing. It further recorded that the petitioner had not been heard before the impugned attachment orders were passed, and that the respondents did not oppose grant of such hearing. On that basis, the Court held that the ends of justice would be met by setting aside the attachment orders and directing the adjudicating authority to hear the petitioner and thereafter pass a reasoned order on merits in accordance with law. The Court expressly left open all questions concerning summons and the ongoing investigation, and refrained from expressing any view on the merits of the rival contentions. [Paras 6, 7]

The impugned provisional attachment orders were quashed and set aside, and the matter was directed to be reconsidered after granting the petitioner a personal hearing and by passing a reasoned order on merits.

Final Conclusion: The writ petition was disposed of by setting aside the provisional attachment orders solely to enable reconsideration after personal hearing. The Court left the merits of the dispute, as well as the issue of summons and investigation, open for decision in accordance with law.

Claim of Input Tax Credit - Competent authority - utilization of Input Tax Credit being violative of Articles 14 and 19(1)(g), 265 and 300A of the Constitution of India -HELD THAT:- The petitioner did not press the challenge to section 16(2)(c) and the prayer to restrain further proceedings. The Court disposed of the petition by permitting the petitioner to file objections with documents to the impugned notices, directing the competent authority to consider them and pass a speaking order within the time stipulated, failing which the authority was left free to proceed in accordance with law.

Wrongful invocation of fraud-based assessment provisions - Comparison of ITC claimed in GSTR-3B with available ITC as per GSTR-2A - Eligibility for waiver application consequent on proper statutory classification

Section 73 vis-a-vis Section 74 proceedings - Absence of fraud, wilful misstatement or suppression in input tax credit reversal proceedings - HELD THAT: - The Court found that the show cause notice had been issued under Section 73 and merely compared the input tax credit claimed in GSTR 3B with the credit available in GSTR 2A, while calling upon the taxpayer to explain why excess input tax credit should not be reversed. Neither the notice nor the detailed order disclosed, expressly or by necessary implication, any allegation of fraud, wilful misstatement or suppression of facts with intent to evade tax. The summary order was also described as an order under Section 73. Since the determinative basis of confirmation was only the taxpayer's failure to establish the input tax credit claim, Section 75(2) required that the proceedings be initiated and concluded under Section 73 and not under Section 74. [Paras 4, 5, 6]

The assessment order was set aside and the matter was remanded for issuance of a fresh order under Section 73.

Section 128A application following reclassification of proceedings - HELD THAT: - The Court treated the rejection of the Section 128A application as a direct consequence of the erroneous classification of the assessment under Section 74. Once it was held that the proceedings ought to have been under Section 73, the order rejecting the application under Section 128A also became unsustainable. The Court therefore preserved the petitioner's right to submit a fresh application under Section 128A after a fresh order is issued under Section 73, subject to the prescribed time limit. [Paras 6]

The order rejecting the Section 128A application was set aside, with liberty to file a fresh application after a fresh order under Section 73.

Final Conclusion: The writ petitions were disposed of by holding that the proceedings had been wrongly initiated and concluded under Section 74 despite absence of the statutory ingredients for such invocation. The assessment order and the consequential rejection of the Section 128A application were set aside, and the matter was remanded for a fresh order under Section 73.

Special rectification procedure for input tax credit disallowance- delay under Section 16(4) - Writ jurisdiction where statutory rectification remedy is available - HELD THAT: - The Court noted the petitioner's reliance on the circular clarifying implementation of sub-sections (5) and (6) of section 16 and the State's objection that paragraph 3.5 specifically provides a remedy of rectification where an order under section 73 has been passed and no appeal has been filed. Having regard to the pleadings and submissions, the Court held that the petitioner's claim as to whether the disallowed input tax credit falls within the specified retrospectively extended cases should be examined by the competent authority in rectification proceedings, and not in the writ petition at that stage. [Paras 7, 8]

The petitioner was granted liberty to file a rectification application within the stipulated time, and the competent authority was directed to consider it after hearing the petitioner and pass an order in accordance with law.

Final Conclusion: The writ petition was disposed of without adjudicating the merits of the input tax credit claim. The Court directed the petitioner to pursue the special rectification remedy before the competent authority, which was required to decide the application after affording an opportunity of hearing.

Parallel GST proceedings - Same subject matter - Precedence of show cause notice - Multiple communications issued by different GST authorities on the same alleged fake ITC matter - HELD THAT: - Applying the principles laid down by the Supreme Court in M/s Armour Security (India) Ltd.[2025 (8) TMI 991 - SUPREME COURT], the Court held that mere inquiry communications, summons or intimation do not by themselves amount to initiation of adjudicatory proceedings, whereas issuance of a show cause notice marks the formal commencement of such proceedings. Since, in the present case, the first show cause notice on the subject matter was issued on 11.03.2025, the authority issuing that notice was to continue and complete the proceedings. Other authorities dealing with the same subject matter were not to proceed further separately, but were required to forward relevant material to the adjudicating authority with prior intimation to the petitioner so as to enable an effective response. [Paras 12, 13, 14]

The petitioner was directed to submit its reply to the show cause notice, and all other authorities dealing with the same subject matter were restrained from proceeding independently and required to place their material before the authority issuing that notice.

Final Conclusion: The writ petition was disposed of by directing the petitioner to respond to the show cause notice already issued, which was held to govern the subject matter. All other authorities examining the same matter were required to act in conformity with the Supreme Court guidelines and transmit their material to the adjudicating authority with due intimation to the petitioner.

Deemed withdrawal of best judgment assessment - Belated filing of GST return with payment of tax, interest and late fee - Petitioner failed to file the return within the original statutory period under Section 39, leading to an assessment under Section 62 - HELD THAT: - The Court noted that, though the petitioner had not filed the return within thirty days from the assessment order, it had thereafter filed the return for the relevant month and discharged the entire tax liability along with interest and late fee. Relying on the Division Bench decision in Brothers Engineering and Errectors Ltd.[2025 (8) TMI 1763 - ANDHRA PRADESH HIGH COURT], which had followed Helmet House [2024 (9) TMI 391 - MADRAS HIGH COURT], the Court held that in such circumstances the assessment order is to be treated as deemed withdrawn once the return is filed along with payment of the statutory dues and late fee. [Paras 7, 8, 9, 10]

The assessment order was declared to have been deemed withdrawn and recovery pursuant to that order was held impermissible.

Final Conclusion: The writ petition was allowed. Since the petitioner had subsequently filed the return for January, 2023 and paid the tax, interest and late fee, the assessment made under Section 62 was treated as deemed withdrawn and no recovery could be pursued under that order.

Condonation of delay in filing GST appeal- Writ jurisdiction to preserve statutory right of appeal - Sufficient cause for delayed appeal - HELD THAT: - The Court found that the Appellate Authority had not independently examined whether sufficient cause existed for the delay and had rejected the appeal merely by relying on an earlier decision without appreciating its applicability to the facts of the case. Referring to Mastek Engineering Private Limited [2024 (3) TMI 893 - ANDHRA PRADESH HIGH COURT], the Court held that, although the Appellate Authority cannot condone delay beyond the statutory condonable period, the statutory right of appeal is a valuable right and, where sufficient cause is shown, the High Court may in exercise of writ jurisdiction condone the delay in the interests of justice and direct consideration of the appeal on merits. [Paras 8, 10, 11]

The endorsement rejecting the appeal was set aside, the delay was condoned subject to payment of costs, and the Appellate Authority was directed to decide the appeal on merits in accordance with law.

Final Conclusion: The writ petition was disposed of by condoning the delay in filing the statutory appeal, subject to payment of costs, and by directing the Appellate Authority to consider the appeal on merits. The Court exercised writ jurisdiction to protect the petitioner's statutory right of appeal despite the appellate forum's limited power of condonation.

Statutory pre-deposit and an application for condonation of delay - HELD THAT:- The writ petition was disposed of by granting liberty to the petitioner to file an appeal against the impugned order-in-original within two weeks with the statutory pre-deposit and an application for condonation of delay, leaving all grounds open and directing the appellate authority to consider the question of delay and, if satisfied, decide the appeal on merits in accordance with law.

Concurrent jurisdiction of Faceless Assessing Officer and Jurisdictional Assessing Officer - Amendment of writ petition after dismissal - Effect of subsequent legislative amendment on reassessment notice challenge

Whether the petitioner's application to amend the writ petition was liable to be allowed in view of the Supreme Court's remand order and the amendment introducing concurrent jurisdiction under Section 147A of the Income-tax Act, 1961? - HELD THAT: - The Court held that the amendment introduced by Act No. 4 of 2026 to Section 147A provided that both the Faceless Assessing Officer and the Jurisdictional Assessing Officer have concurrent jurisdiction, which was also the position earlier taken by this Court in T.K.S. Builder Pvt. Ltd. vs. Income Tax Officer, New Delhi [2024 (10) TMI 1586 - DELHI HIGH COURT]. Reading the Supreme Court order, the Court found that the remand was confined to cases where High Courts had quashed reassessment notices in favour of assessees on the ground that the Jurisdictional Assessing Officer lacked competence. The liberty granted by the Supreme Court to amend writ petitions was therefore referable to such remanded matters. Since the present writ petition had already been dismissed by this Court, and the subsequent amendment had in any event removed the surviving basis of challenge, the application seeking amendment was misconceived. [Paras 6, 8, 10, 11]

The application for amendment was rejected.

Final Conclusion: The Court rejected the petitioner's application to amend the writ petition, holding that the Supreme Court's remand and liberty to amend were confined to matters decided in favour of assessees and did not extend to a writ petition already dismissed by this Court.

Registration of trust u/s 12A - Applicability of section 13(1)(b) at registration stage - benefit of particular religious community - Denial of registration to a trust on the ground that its objects benefit a particular religious community - HELD THAT: - The Court held that the controversy stood concluded by settled law that section 13(1)(b) operates at the stage of granting exemption on assessment and not at the stage of considering registration u/s 12A. Since the Tribunal had proceeded on that basis and restored the matter for fresh consideration with a direction not to deny registration only on that ground, no substantial question of law arose from the Tribunal's order. [Paras 5, 6]

The Revenue's challenge to the Tribunal's view was rejected and the appeal was dismissed.

Final Conclusion: The Court held that section 13(1)(b) cannot be invoked while deciding an application for registration under section 12A, since its operation arises at the stage of assessment while considering exemption. As the Tribunal had applied this settled position, no substantial question of law arose and the tax appeal was dismissed.

Denial of benefit under 115BAA - delay in filing Form 10-IC - Genuine hardship u/s 119(2)(b) - Substantial compliance for section 115BAA option

Whether Delay in filing Form 10-IC for claiming the concessional tax rate u/s 115BAA for the assessment year 2020-21 was liable to be condoned on the facts of the case? - HELD THAT: - The Court held that although filing Form 10-IC is a mandatory requirement for availing the concessional rate under section 115BAA, the rejection of condonation could not be sustained when the petitioner had filed its return within time, had declared the option in the return, had paid tax at the concessional rate, and had later sought condonation after discovering the omission. The CBDT circulars issued to address delayed filing of Form 10-IC, particularly for the period affected by COVID-19 and the initial years of the provision, showed the legislative and administrative intent to grant relief in fit cases of genuine hardship.

In that background, the petitioner's omission was treated as a bona fide lapse, and the authority ought to have adopted a justice-oriented approach instead of rejecting the application on a narrow view that the lapse of the tax manager or consultant could never justify condonation. [Paras 16, 17]

The impugned order rejecting condonation was set aside and the writ petition was allowed.

Final Conclusion: The Court held that, in the facts of the case and in the light of the CBDT circulars and the surrounding circumstances, the petitioner had made out a case of genuine hardship for condonation of delay in filing Form 10-IC for assessment year 2020-21. The rejection of condonation and consequential denial of the benefit under section 115BAA were therefore set aside.

Income-tax assessment after completion of corporate insolvency resolution process - Approved resolution plan and extinguishment of prior claims

Validity of assessment order issued after approval of the corporate insolvency resolution plan where the notice under section 148 was also issued after such approval - HELD THAT: - The Court held that, once the corporate insolvency resolution process had culminated in approval of the resolution plan by the NCLT, a subsequent income-tax demand founded on a notice issued thereafter was impermissible. Applying the principle laid down by the Supreme Court in Ghanashyam Mishra and Sons Private Limited Through the Authorised Signatory Vs. Edelweiss Asset Reconstruction Company Limited Through the Director and Others [2021 (4) TMI 613 - SUPREME COURT] and noting that the same had been followed by the High Court in similar matters, the Court concluded that the impugned assessment order, having been made after approval of the resolution plan, was unsustainable. [Paras 4, 5]

The assessment order for the assessment year in question was set aside as unsustainable.

Final Conclusion: The writ petition was allowed. The assessment order for Assessment year 2021-22 was held unsustainable since it was passed after approval of the resolution plan under the corporate insolvency resolution process, and was accordingly set aside.

Reasonable opportunity of hearing in reassessment proceedings - Service of notice at outdated address/property already sold - validity of assessment order passed u/s 147 read with Section 144 - HELD THAT: - The Court took note of the material showing that the property at which notices were served had been alienated even before issuance of the notice u/s 148A, while also recording the petitioner's admission that the change of address and alienation had not been intimated to the Department.

Even so, having regard to the further assertion that the petitioner was residing in the US and was therefore not available to effectively pursue the proceedings, and considering the limited and bona fide request for an opportunity to contest the case on merits, the Court held that the ends of justice required restoration of such opportunity. The defect found was thus one of lack of fair and reasonable opportunity, warranting setting aside of the assessment order and remand to the Assessing Officer for fresh decision without requiring a fresh show-cause notice. [Paras 8, 9]

The impugned assessment order was set aside and the matter was remanded to the Assessing Officer for fresh adjudication on merits; the earlier show-cause notice and the impugned order were directed to be treated as the show-cause notice, with liberty to the petitioner to file a response within the time granted.

Final Conclusion: The High Court interfered with the reassessment order only on the ground of affording the petitioner a fair opportunity to contest the matter on merits. The matter was remanded to the Assessing Officer for fresh decision in accordance with law, without issuance of a fresh show-cause notice.

Statutory bar on application of the Probation of Offenders Act to convictions under the Income-tax Act - Express exclusion of probationary relief under the Income-tax Act

Release of the convicted accused under the Probation of Offenders Act after conviction under Section 277 of the Income-tax Act - HELD THAT: - The Court held that Section 292A of the Income-tax Act contains an express bar against applying Section 360 Cr.P.C. or the Probation of Offenders Act to a person convicted of an offence under the Act, unless such person is under eighteen years of age. Since the respondent had been convicted under Section 277, the trial court could not lawfully extend probationary relief. On that basis, the order releasing the respondent under the Probation of Offenders Act was set aside, while leaving the conviction undisturbed and directing reconsideration on the point of sentence alone. [Paras 12, 14]

The order granting probation was set aside and the matter was remitted to the trial court for fresh consideration of sentence only after hearing both sides.

Final Conclusion: The High Court held that, in view of the express statutory bar contained in Section 292A, the trial court could not release a person convicted under Section 277 of the Income-tax Act on probation. The appeal was allowed, the probationary relief was set aside, and the matter was remitted for fresh determination of sentence alone.

Unexplained investment u/s 69 - Gift from mother - Source of investment - Donor's creditworthiness and genuineness of gift -

Addition towards unexplained investment in purchase of property where the assessee explained the amount as a gift received from his mother and supported it by donor confirmation and bank statement showing availability of funds immediately before the gift - HELD THAT: - The Tribunal found that the assessee had produced a confirmation from his mother specifically confirming the gift and bank statements showing a non-cash credit in her account followed by withdrawal of sufficient funds immediately prior to the gift. The donor's identity and the mother-son relationship were not in dispute, and the bank statement corroborated availability of funds in the donor's hands. On these facts, the source of the impugned amount stood satisfactorily explained. In the absence of any material brought by the Revenue to dislodge these evidences, the addition made as unexplained investment was held to be unsustainable. [Paras 10]

The addition under section 69 was directed to be deleted.

Final Conclusion: The Tribunal allowed the appeal and deleted the addition made on account of alleged unexplained investment, holding that the assessee had satisfactorily established the gift from his mother through confirmation and supporting bank records.

Cash deposits during demonetisation - Section 68 and recorded cash sales - Stock-backed cash sales - Books of account not rejected - Deduction verification by appellate authority

Cash deposits during demonetisation - Section 68 and recorded cash sales - Stock-backed cash sales - Books of account not rejected - HELD THAT: - Tribunal found that the assessee had produced regular books of account, cash book, stock register, sales records and VAT returns, and no defect in those records was pointed out by either the AO or the first appellate authority. The trading results were accepted and section 145(3) was not invoked.

The recorded sales were also backed by availability of stock, and there was no finding of stock shortage or any contrary material to discredit the cash sales. In such circumstances, once the cash was already reflected in the books as business receipts, the deeming fiction u/s 68 could not be applied merely on suspicion arising from higher cash deposits during the demonetisation period.

Tribunal also noted that the first appellate authority, while confirming the addition and directing reduction of the same from turnover, had done so without rejecting the books or affording opportunity on that course. [Paras 9, 10, 14]

The addition made u/s 68 in respect of the cash deposits during the demonetisation period was deleted.

Deduction for housing loan repayment and donation - Verification of deduction claim - Appellate directions for factual verification - appellate direction to the Assessing Officer to verify the deductions claimed under sections 80C and 80G from the evidences on record and allow them as per law was valid - HELD THAT: - The Tribunal held that the deductions had been disallowed by the Assessing Officer for want of evidence, whereas the evidences had been filed before the first appellate authority. The appellate authority accepted the assessee's eligibility and only directed verification for determining the correct amount admissible. Such a direction was held not to violate section 250(6), and no prejudice was found to have been caused to the assessee because, upon verification, the deductions were required to be allowed in accordance with law. [Paras 15]

The challenge to the verification direction in respect of deductions under sections 80C and 80G was rejected.

Final Conclusion: The Tribunal partly allowed the appeal. It deleted the addition made under section 68 on cash deposits during the demonetisation period, holding that the deposits were sourced from recorded cash sales supported by books and stock records, but upheld the appellate direction for verification of the deductions claimed under sections 80C and 80G.

Assumption of jurisdiction u/s 153C - Relevance of seized material to determination of total income - Use of third-party search or survey material in section 153C assessment - Validity of assessment u/s 143(3) where section 153C applies - Year of search for other person under section 153C

Assumption of jurisdiction u/s 153C - Relevance of seized material to determination of total income - Use of third-party search or survey material - HELD THAT: - The Tribunal held that the very basis for invoking section 153C failed. The first four additions made in the assessee's hands were also made on substantive basis in the hands of the searched person, which showed that the satisfaction recorded for proceeding against the assessee as a separate person was itself faulted. Further, the seized document referred to in the satisfaction note was not even relied upon in the assessment order, demonstrating that it had no bearing on the determination of the assessee's total income. As regards the addition for alleged bogus purchases, the assessment itself showed that it was founded on material seized or impounded in proceedings against another person, and such material could not be used in the assessee's section 153C assessment initiated on the basis of the search in the case of Purushottam Lal Soni. On these findings, the assumption of jurisdiction under section 153C was held to be flawed. [Paras 6, 7, 8, 9]

The assessment framed under section 153C for Assessment Year 2016-17 was quashed, and the remaining legal and factual grounds were left open as academic.

Validity of assessment under section 143(3) where section 153C applies - Year of search for other person under section 153C - HELD THAT: - The Tribunal held that for an assessee proceeded against as an 'other person' under section 153C, the relevant date was the date on which the satisfaction was recorded and the seized material was handed over by the Assessing Officer of the searched person. Since the satisfaction note was recorded on 22-12-2018, the date of search qua the assessee had to be reckoned as falling in Assessment Year 2019-20. The block period for making assessment in the assessee's case therefore had to be counted with reference to that year. Consequently, Assessment Year 2017-18 could, if at all, be assessed only under section 153C, and not by a regular assessment under section 143(3). [Paras 14, 15]

The assessment framed under section 143(3) for Assessment Year 2017-18 was declared illegal and void ab initio, and the other grounds were left open.

Final Conclusion: Both appeals were partly allowed. The assessment for Assessment Year 2016-17 was quashed for want of valid jurisdiction under section 153C, and the assessment for Assessment Year 2017-18 was held void because it ought to have been framed, if at all, under section 153C and not under section 143(3).

Enhancement of income by Commissioner (Appeals) - New source of income - Commission on alleged accommodation entries -

Enhancement by the Commissioner (Appeals) by adding alleged commission income on the footing that the assessee had facilitated accommodation entries was beyond jurisdiction where that source of income had not been considered by the AO - HELD THAT: - The Tribunal held that, although the Commissioner (Appeals) has power to enhance an assessment, that power is confined to matters or sources of income which were expressly or by clear implication considered by the Assessing Officer from the standpoint of taxability. In the present case, the assessment had made a protective addition on account of the alleged accommodation entry itself; it had not examined or assessed any separate commission income alleged to have been earned for facilitating such entry. The enhancement therefore proceeded on a new source of income which did not emerge from the assessment order or the return. Such a matter could not be introduced in appellate enhancement and, if at all permissible in law, had to be dealt with through the separate statutory routes available for escaped or erroneous assessment. [Paras 7, 12]

The enhancement adding 1% alleged commission was deleted and the assessee's appeal was allowed.

Final Conclusion: The Tribunal held that the Commissioner (Appeals) could not enhance the assessment by introducing alleged commission income as a new source not examined by the Assessing Officer. The enhancement was deleted and the appeal was allowed.

Final assessment order contrary to DRP directions - Failure to give effect to transfer pricing order passed pursuant to DRP directions - HELD THAT: - The Tribunal found that, after the draft assessment order, the DRP had issued directions requiring suitable modification of the transfer pricing adjustments, and the TPO had thereafter passed the order giving effect to those directions. The Assessing Officer nevertheless passed the final assessment order without giving effect to the DRP directions, stating that the TPO's order had not been received till then, and failed to pass a proper final order even after receipt of the consequential order within the permissible period.

Tribunal held that such non-compliance with the mandatory DRP-direction procedure vitiated the final assessment order, and, following Comparex India P. Ltd. [2024 (9) TMI 641 - ITAT DELHI] the order was liable to be quashed. [Paras 4, 5]

The impugned final assessment order was quashed, and the remaining grounds were left open.

Final Conclusion: The Tribunal allowed the appeal on the legal ground that the final assessment order had been passed without giving effect to the DRP directions and the consequential TPO order. The assessment order was accordingly quashed, leaving the other grounds open.

Unexplained cash credit - Unsecured loans from disclosed lenders [assessee's wife and from Umkal Healthcare Pvt. Ltd.]-Identity, creditworthiness and genuineness of lender - Statement of Affairs vis-a-vis professional balance sheet -

HELD THAT: - The Tribunal held that the AO had proceeded on an incorrect premise in treating the loan from the assessee's wife as not reflected in the accounts, because the transaction was a personal account transaction and stood reflected in the assessee's Statement of Affairs as on 31.03.2022, though not in the professional balance sheet relied on by the Assessing Officer.

As regards both lenders, the Tribunal found that they were assessed to tax by the same Assessing Officer, had given confirmations, the loans had moved through disclosed bank accounts, and the lenders had sufficient bank balances and disclosed sources. The assessee had thus established the three requirements of section 68, namely identity of the lenders, their creditworthiness, and the genuineness of the transactions. The repayment of the loan from Umkal Healthcare Pvt. Ltd. during the year out of disclosed bank account also stood borne out from the material noted by the appellate authority. [Paras 8]

The deletion of both additions was upheld and the Revenue's challenge failed on merits.

Final Conclusion: The Tribunal affirmed the order of the Commissioner (Appeals) deleting the additions made under section 68 in respect of the two unsecured loans. The Revenue's appeal was dismissed.

Transfer pricing adjustment without reference to TPO - Non-issuance of draft assessment order - Computation of ALP of specified domestic transactions - Reference to TPO under the transfer pricing regime -

HELD THAT: - The Tribunal held that, once the Assessing Officer proceeded to compute the arm's length price of the specified domestic transactions and make a transfer pricing adjustment, the matter ought to have been referred to the Transfer Pricing Officer instead of the Assessing Officer determining the arm's length price on the basis of the preceding year's transfer pricing order. On a combined reading of clauses 3.3 and 3.7 of the CBDT Instruction dated 10.03.2016, the Tribunal found that the position was capable of different interpretation; hence the lapse in not making a reference to the Transfer Pricing Officer was a procedural irregularity and not an incurable illegality warranting quashing of the assessment.

Following PCIT v. S G Asia Holdings India Private Limited [2019 (8) TMI 661 - Supreme Court] and treating that decision as binding, the Tribunal held that the proper course was to restore the matter to the Assessing Officer for making an appropriate reference under section 92CA(1). The Tribunal further held that the earlier view in Control Risk India Private Limited [2017 (7) TMI 1077 - DELHI HIGH COURT] could not govern the matter in preference to the later Supreme Court ruling [2019 (8) TMI 661 - SUPREME COURT], and that dismissal of the special leave petition in limine did not result in merger, in view of Kunhayammed v. State of Kerala [2000 (7) TMI 67 - SUPREME COURT (LB)]. Since the assessment itself was restored for de novo consideration, the other additions deleted by the Commissioner (Appeals) were left open and remitted for fresh adjudication on merits.

The order of the Commissioner (Appeals) quashing the assessment was set aside, the assessment order was also set aside, and the matter was remanded to the Assessing Officer for de novo assessment after making an appropriate reference to the Transfer Pricing Officer; the remaining additions were also restored for fresh consideration on merits.

Final Conclusion: The Tribunal held that the failure to refer the specified domestic transactions to the Transfer Pricing Officer, coupled with the consequential omission to issue a draft assessment order, was a procedural irregularity and not a defect nullifying the assessment. The assessment and the appellate order were set aside, and the entire matter, including the other additions, was restored to the Assessing Officer for de novo adjudication in accordance with law.

Penalty u/s 272A(1)(d) - non-compliance with notice u/s142(1) - Reasonable cause for failure to comply

HELD THAT: - The Tribunal found that the assessee's later appearance before the Assessing Officer and request for adjournment showed that the assessment proceedings had not been wholly abandoned and supported the existence of a bona fide and reasonable cause for the initial failure to comply with the first notice. On that basis, the penalty for the first default could not be mechanically sustained.

In contrast, for the second notice, no material or satisfactory explanation was placed on record to establish reasonable cause, and mere subsequent appearance seeking adjournment was held insufficient to excuse that continued default. The penalty was therefore sustained only for the unexplained second default. [Paras 7, 8]

The penalty relating to the first notice was deleted, but the penalty for the second notice was upheld, and the total penalty was restricted accordingly.

Final Conclusion: The appeal was partly allowed. The Tribunal held that reasonable cause existed for the first instance of non-compliance, but not for the second, and therefore sustained the penalty only in part.

Addition made u/s 50C - Unregistered agreement to sell - Stamp duty value on agreement date - Retrospective operation of curative proviso

Provisos to section 50C - Unregistered agreement to sell - Receipt through banking channels - Stamp duty value on agreement date - whether assessee was entitled to adoption of the stamp duty value as on the date of the earlier agreement to sell, and not the date of registration, where the sale consideration had been fixed earlier and received through RTGS before execution of the registered sale deed? - HELD THAT: - The Tribunal held that the first proviso to section 50C applies where the date of the agreement fixing consideration and the date of registration differ, and the second proviso requires that whole or part of the consideration be received through prescribed banking modes on or before the agreement date. Those statutory conditions stood satisfied because the consideration had been fixed under the earlier agreement and the payments were received through RTGS, which was also reflected in the registered sale deed.

Revenue's objection that the agreement to sell was unregistered was rejected, since the proviso to section 50C does not require such agreement to be registered, and no such condition can be read into the provision. Mere earlier accounting description of the amounts as unsecured loan could not displace the contemporaneous documentary evidence showing that the amounts formed part of the agreed sale consideration. [Paras 9, 10, 11, 12, 16]

The adoption of stamp duty value as on the date of registration under section 50C was held unsustainable, and the addition made on that basis was deleted.

Retrospective operation of curative proviso - Beneficial amendment - Provisos to section 50C - HELD THAT: - The Tribunal held that the provisos inserted by the Finance Act, 2016 were curative and beneficial, introduced to remove hardship arising from escalation in guideline value between the agreement date and registration date. Following the binding jurisdictional High Court ruling in Vummudi Amarendran [2020 (10) TMI 517 - MADRAS HIGH COURT], the provisos were treated as retrospective in operation. Consequently, the assessee could invoke the benefit of the provisos notwithstanding that the agreement to sell had been executed before their insertion. [Paras 14, 15, 16]

The provisos to section 50C were applied retrospectively, and the assessee was held entitled to their benefit.

Final Conclusion: The Tribunal allowed the appeal and deleted the addition made under section 50C. It held that the assessee satisfied the conditions of the provisos to section 50C, that an unregistered agreement to sell did not disentitle that benefit, and that the provisos operated retrospectively.

Scope of provisional attachment and its confirmation - Benami transaction through routing of demonetised cash by RTGS - Denial of Cross-examination of the persons whose statements were relied upon - Audi alteram partem - Prejudice test - breach of natural justice

Benami transaction through banking channel - Unexplained RTGS credits against alleged gold sales - Admissibility of statement recorded under Section 131 - The transfer of funds received by the appellant through RTGS from entities controlled by Shri Asit B. Doshi - treated as part of a benami transaction - appellant's explained that the receipts represented genuine sale proceeds of gold - HELD THAT: - The Tribunal found it undisputed that demonetised cash had been deposited with Shri Asit B. Doshi, that RTGS transfers were made from entities linked to him to the appellant, and that the appellant had no past business relationship with those entities. The proximity of the transactions to demonetisation, the intelligence received by the Investigation Wing, and the statement of Shri Asit B. Doshi recorded on oath under Section 131 were treated as admissible and relevant material. The challenge to that statement on the ground that it was not recorded in the office of the Income Tax Department was rejected as frivolous. The bills, ledger, purchase documents and stock records relied upon by the appellant were held not to constitute independent evidence sufficient to substantiate the plea of genuine bullion sales, while the bank statements in fact corroborated receipt of RTGS from unknown firms. [Paras 13, 14, 15, 16]

The appellant failed to displace the case that the impugned credits were routed benami funds, and the attachment confirmed by the adjudicating authority was sustained on merits.

Denial of cross-examination - Prejudice test in natural justice - HELD THAT: - The Tribunal held that no question of cross-examining Shri Mangilal arose because no statement of his was on record. As regards Shri Asit B. Doshi, the appellant had been supplied a copy of his statement and he had been summoned for cross-examination but did not appear. Relying on Kanungo & Company [1972 (2) TMI 35 - SUPREME COURT], Dharampal Satyapal Ltd.[2015 (5) TMI 500 - SUPREME COURT], M/s Telestar Travels Pvt. Ltd. [2013 (2) TMI 396 - SUPREME COURT] and Sudhir Kumar Singh [2020 (10) TMI 746 - SUPREME COURT], the Tribunal applied the principle that cross-examination is not an inflexible requirement in every quasi-judicial proceeding and that breach of natural justice warrants interference only where actual prejudice is shown. On the facts, the Tribunal concluded that refusal of cross-examination had neither caused prejudice nor resulted in violation of natural justice. [Paras 18, 19, 20, 21, 22]

The plea of violation of natural justice was rejected.

Final Conclusion: The Tribunal upheld the finding that the impugned RTGS credits represented a benami arrangement involving routing of demonetised cash through entities controlled by Shri Asit B. Doshi. The appeal was dismissed, and the confirmation of provisional attachment was sustained.

Provisional attachment - Benami transaction - Benami adjudication - Non-consideration of material evidence - Inconsistent findings on beneficial owner - Benami property determination - Conflicting statements - HELD THAT: - The Tribunal found the reasoning in the impugned order internally inconsistent. The case of benami acquisition rested on the agreement to sell recovered during search, the statements of the appellant and another employee, the surrounding circumstances regarding possession of the document, the employment relationship with the alleged beneficial owner, and the material showing generation of substantial unaccounted cash. Despite this material, the adjudicating authority held that the role of the alleged beneficial owner in providing funds was not established beyond doubt, yet still declared the property benami and the appellant a benamidar. The Tribunal further noted that the appellant's later claim of ownership in appeal was contrary to his earlier statements and affidavit and could not be accepted at face value. Since all facts, statements, affidavits and investigative material had not been taken into account while reaching the conclusion, the impugned order was set aside and the matter was remanded for reconsideration on the full evidence, with status quo regarding the property to continue. [Paras 8, 9, 10]

The impugned order was set aside for reconsideration of the entire material and the matter was remanded to the adjudicating authority, while maintaining status quo in respect of the property.

Final Conclusion: The Tribunal held that the impugned benami determination suffered from inconsistent findings and failure to consider the full evidentiary record. The order was therefore set aside and the matter remanded to the adjudicating authority for fresh consideration, with status quo over the property to continue.

Refund on finalisation of provisional assessment - Unjust enrichment in customs refund - Excess duty paid on reassessment of provisionally assessed imports - HELD THAT: - The Court held that the controversy stood governed by the principle that amounts adjusted on finalisation of a provisional assessment do not attract the doctrine of unjust enrichment. It accepted the Tribunal's factual finding that the differential duty, having been paid much later, could not have been passed on to customers. The Court further treated the governing law as settled by the later Supreme Court in case of Hindustan Zinc Ltd.[2023 (9) TMI 1302 - SUPREME COURT], which resolved the conflict of authority by holding that the doctrine of unjust enrichment is not applicable to provisional assessment even after finalisation of the proceedings. On that basis, the refund arising from the reassessment of the provisionally assessed bills of entry was held admissible to the assessee. [Paras 5, 6]

The substantial questions were answered in favour of the assessee and against the Revenue.

Final Conclusion: The High Court dismissed the Revenue's appeal and upheld the Tribunal's view that the assessee was entitled to refund of the excess duty arising on reassessment of the provisionally assessed imports, without the bar of unjust enrichment.

Return of surety after acquittal - Pendency of appeal and release of surety - Personal bond under Section 437A Cr.P.C. - HELD THAT: - The Court found that the petitioner was not an accused but only a surety holder who had furnished the surety at the time of grant of bail. The trial court had acquitted the accused after trial, directed that the bail bonds would stand cancelled after the appeal period, and also required execution of a personal bond under Section 437A Cr.P.C. In these circumstances, the High Court held that mere pendency of the appeal against acquittal did not by itself prevent the surety from seeking return of the amount furnished, particularly when the accused had already executed the required personal bond under Section 437A Cr.P.C. [Paras 8, 10, 11]

The order refusing return of the surety solely on the ground of pendency of appeal was set aside, and the trial court was directed to return the surety to the petitioner after obtaining necessary authorisation.

Final Conclusion: The High Court held that pendency of the prosecution appeal against acquittal was not a valid ground to withhold return of the surety furnished by the petitioner. The impugned order was set aside and return of the surety was directed.

Customs penalty without show cause notice - No proper opportunity of hearing -Breach of natural justice -Penalty for alleged diversion of warehoused imported goods - Personal liability of Director under penalty provisions - Burden of proof - Strict construction of penalty provisions

Customs penalty without show cause notice - HELD THAT: - The Tribunal found from the record that no copy of the show cause notice was directed to be issued to the appellant and his name did not appear as a noticee in the notice. It held that, under the Customs Act, there was no departmental portal-based mode of service at the relevant time that could substitute issuance of notice. The penalty order was therefore passed contrary to the provisions of the Customs Act and in breach of natural justice, since the appellant was penalised without issuance of show cause notice and without proper hearing. [Paras 6]

The penalty order against the appellant was unsustainable for want of show cause notice and proper opportunity of hearing.

Maintainability of penalties under Sections 112(a), 112(b) and 114AA - diversion of warehoused imported goods - Personal liability of Director under penalty provisions - absence of credible evidence showing the appellant's active role or knowledge in the alleged diversion of goods - HELD THAT: - The Tribunal held that the department failed to produce any credible documentary evidence linking the appellant with the alleged diversion of goods, such as transport documents, invoices, bank transactions, delivery instructions or correspondence. It further noted that none of the statements relied upon attributed any active role to the appellant and mens rea was not established. Applying the statutory requirements, the Tribunal held that Section 112(a) was not attracted because no specific act or omission rendering the goods liable to confiscation was assigned to the appellant; Section 112(b) was not attracted because there was no evidence that he knowingly possessed, transported, removed, concealed, sold or otherwise dealt with the goods; and Section 114AA was not attracted because no false declaration or document made, signed, used or caused to be made by the appellant was identified. Mere association with the company or status as its Director was held insufficient to impose personal penalty unless the ingredients of those provisions were proved. [Paras 6]

The penalties under Sections 112(a), 112(b) and 114AA were not maintainable against the appellant.

Final Conclusion: The Tribunal set aside the penalty imposed on the appellant and allowed the appeal. It held both that the penalty proceedings were vitiated by non-issuance of show cause notice and denial of hearing, and that the statutory requirements for penalty were not established on the evidence.

Customs Broker obligations - Independent adjudication in licensing proceedings - Overvaluation of export goods - Non-participation in inquiry proceedings - lack of due diligence - Natural Justice - Proportionality of Penalty - Locus Standi - Whether the appellant Customs Broker has fulfilled all his obligations as required under CBLR, 2018 or not?

Independent adjudication in licensing proceedings - Non-application of mind - HELD THAT: - The Tribunal held that Regulation 17 required the licensing authority to consider the inquiry report, the Customs Broker's representation and the material on record before deciding the proceedings. The impugned order recorded receipt of the defence submission, but did not discuss it with reference to any fact or documentary evidence and simply adopted the inquiry officer's conclusions. The order also lacked specific findings linking the exports handled by the appellant with the alleged fake-export modus operandi said to have emerged from investigation in another matter. On that basis, the adjudication was found not to withstand legal scrutiny. [Paras 7]

The revocation, forfeiture and penalty order was held unsustainable for want of independent examination by the licensing authority.

Overvaluation of export goods - Due diligence by Customs Broker - Authorisation and client verification - HELD THAT: - The Co-ordinate Bench of the Tribunal in the case of Trinity International Forwarders [2023 (8) TMI 133 - CESTAT NEW DELHI] have held customs broker has no locus standi in respect of value of export goods, which is being negotiated by overseas buyer and Indian exporter. Therefore, it was held that the CB in that case is not violated the provisions of CBLR.

In the case of Kunal Travels (Cargo) [2017 (3) TMI 1494 - DELHI HIGH COURT], have held that the appellants CB is not an officer of Customs who would have an expertise to identify mis-declaration of goods.

The Tribunal held that the findings under Regulations 10(d), 10(e), 10(f), 10(k) and 10(n) did not sustain. The charges were not supported by concrete findings as to any advice not given, any incorrect information furnished, any material withheld, any record-keeping default established in accordance with the regulation, or any proven failure of antecedent verification. As regards Regulation 10(a), the record showed that the appellant had stated that KYC documents and authority letters had been obtained and there was no material proving absence of authorisation. The Tribunal further observed that a Customs Broker has no locus to determine or re-determine export value negotiated between exporter and overseas buyer, and cannot be fastened with liability for overvaluation merely because shipping bills were filed on the basis of the exporter's documents. [Paras 8, 9, 10, 11]

No violation of Regulations 10(a), 10(d), 10(e), 10(f), 10(k) and 10(n) was made out, and the order to that extent was set aside.

Non-participation in inquiry proceedings - Penalty for failure to cooperate - HELD THAT: - The Tribunal noted that the appellant's partner had given statements during investigation, and the impugned order itself recorded absence of visible evidence of non-cooperation with Customs generally. However, the record showed that the appellant did not respond to hearing intimations and did not participate before the inquiry officer. The contravention of Regulation 10(q) was therefore confined to non-participation in the inquiry proceedings, and not treated as a ground for revocation of licence. [Paras 9, 11]

Only a reduced penalty was warranted for violation of Regulation 10(q), and the Tribunal sustained penalty to that limited extent.

Final Conclusion: The Tribunal partly allowed the appeal, holding that revocation of the Customs Broker licence, forfeiture of security deposit and penalty founded on alleged violations of Regulations 10(a), 10(d), 10(e), 10(f), 10(k) and 10(n) could not be sustained. The impugned order was set aside, but a reduced penalty was upheld only for violation of Regulation 10(q) on account of non-participation in the inquiry proceedings.

Limitation for refund of special additional duty - Unjust Enrichment - Refund of SAD paid on imported capital goods and spares - claim made after expiry of the period prescribed under section 27 of the Customs Act - HELD THAT: - The Tribunal found that the refund application had admittedly been filed beyond the statutory period. It also noted that no formal refund claim with the required annexures had been filed, though it treated that aspect as procedural. The determinative ground was that, in view of the Larger Bench decision in Oil & Natural Gas Corporation Ltd. [2024 (6) TMI 1417 - CESTAT CHENNAI (LB)] and Hon’ble Apex Court in the case of Mafatlal Industries Ltd. [1996 (12) TMI 50 - SUPREME COURT], all refund claims of duty under the Customs Act, except in cases of unconstitutional levy, must be made and adjudicated within the statutory refund mechanism and subject to the limitation prescribed therein. On that principle, the belated claim for refund of SAD could not be entertained. [Paras 6, 7]

The refund claim was held to be barred by limitation and the appeal was dismissed.

Final Conclusion: The Tribunal held that the claim for refund of SAD, having been filed beyond the period prescribed under the Customs Act, was not maintainable. The appeal was therefore dismissed.

Amendment of shipping bills for MEIS claim - Procedural lapse vis-a -vis substantive export incentive entitlement - Board circular cannot prescribe limitation where statute is silent -HELD THAT: - The Tribunal held that the controversy was no longer res integra. It accepted the settled position that, where the law does not prescribe a time limit for amendment of shipping bills, such limitation cannot be introduced through a Board Circular. It further held that an inadvertent failure to click the relevant option in the shipping bill was a procedural error and, once correction was permitted, such lapse could not defeat the exporter's substantive entitlement under the beneficial export incentive scheme. [Paras 4, 6]

The Commissioner's order allowing amendment of the shipping bills was upheld and the Revenue's challenge was rejected.

Final Conclusion: The Tribunal upheld the order permitting amendment of the shipping bills for claiming MEIS benefit. It dismissed the Revenue's appeal on the ground that a procedural error, once corrected, could not defeat substantive entitlement and that a Board Circular could not impose a time limit where the law was silent.

Maintainability of advance ruling application - barred under Section 28I - Pendency before customs authorities - Benefit of NIL Agriculture Infrastructure and Development Cess under Serial No. 19 of Notification No. 11/2021-Customs​​​​​​ -Exemption from AIDC on FTA imports - Partial exemption as exemption from basic customs duty - Contemporaneous exposition

Maintainability of advance ruling application - Pendency before customs authorities - HELD THAT: - The Authority held that the statutory bar operates only where there is a formally instituted proceeding in which the same question stands raised for determination. Query letters, audit verification, representations, and investigation by DRI were treated as preliminary fact-finding steps and not as proceedings in which the question was pending. The consultative letter relied upon by the Department related to a different serial-number issue in a particular transaction and was found to be factually distinct from the broader legal question raised in the application. Applying the principle stated in DRI vs. M/s Spray-Tec India Ltd. [2023 (1) TMI 751 - DELHI HIGH COURT] and Re: HQ Lamps Manufacturing Co. Pvt. Ltd. [2023 (2) TMI 618 - CUSTOMS AUTHORITY FOR ADVANCE RULINGS, NEW DELHI] the Authority held that, in the absence of a show cause notice, consultative notice on the same issue, provisional assessment, or similar formal adjudicatory step, the bar under Section 28I was not attracted. [Paras 10]

The objection based on ongoing investigation was rejected and the application was held admissible.

Exemption from AIDC on FTA imports - Partial exemption as exemption from basic customs duty - HELD THAT: - The Authority construed Serial No. 19 in the light of Section 25(1) of the Customs Act, which empowers exemption from the whole or any part of duty. On that basis, the expression 'exemption from basic customs duty is claimed and allowed' was held to include both full and partial relief, since the notification itself contains no words restricting the benefit to cases where BCD becomes nil. Footwear imported under the AIFTA and SAFTA notifications named in the Annexure to Notification No. 11/2021-Customs was therefore held capable of attracting NIL AIDC once the importer claims and is allowed the applicable BCD concession under those notifications. The Authority also noted that the notification contains no restrictive provision barring concurrent availment of FTA-based BCD concession and AIDC exemption, and found support for this construction in Annexure C to the Union Budget, 2021, which indicates that imports under FTA-based customs duty exemptions were intended to remain outside the burden of AIDC. The benefit, however, remains subject to satisfaction of the conditions of the relevant FTA notifications, including production of a valid Certificate of Origin and compliance with CAROTAR, to the satisfaction of the proper officer at the time of import. [Paras 14, 15, 16, 17, 18]

The applicant was held entitled to NIL AIDC under Serial No. 19 on eligible imports under Notification No. 46/2011-Customs and Notification No. 99/2011-Customs, even where the BCD relief under those notifications is concessional or partial.

Final Conclusion: The application was held maintainable, as investigation and departmental correspondence did not amount to pendency of the question under Section 28I. On merits, the Authority ruled that Serial No. 19 of Notification No. 11/2021-Customs grants NIL AIDC on eligible FTA imports where exemption from BCD is claimed and allowed, and that such exemption includes both full and partial BCD relief, subject to satisfaction of the prescribed import conditions.

Extinguishment of claims outside approved resolution plan - Effect of approved resolution plan on pending arbitral claims - Arbitral jurisdiction after approval of resolution plan - HELD THAT: - The Court held that once a resolution plan is approved under Section 31 of the IBC, only those claims which form part of the approved plan survive, and all other claims stand extinguished by operation of law. This principle applies not merely to crystallised debts but to claims existing against the corporate debtor prior to commencement of CIRP. Since the respondent's contractual claims had arisen before initiation of CIRP, it was required to lodge them in the insolvency process. The learned Arbitrator's view that arbitration could continue because the claims had not yet crystallised into a debt was held to be contrary to the law declared by the Supreme Court in Ghanashyam Mishra & Sons Private Limited [2021 (4) TMI 613 - SUPREME COURT] and Electrosteel Steel Limited (Now ESL Steel Limited) [2025 (4) TMI 1246 - SUPREME COURT] Accordingly, after approval of the resolution plan, the arbitral tribunal lacked jurisdiction to adjudicate such extinguished claims, and the award rendered thereon was unsustainable. [Paras 9, 10, 11, 12, 13]

The award was set aside as having been rendered on claims that stood extinguished upon approval of the resolution plan.

Final Conclusion: The Court held that the respondent's pre-CIRP arbitral claims, not shown to be part of the approved resolution plan, stood extinguished on approval of that plan. The arbitral award was therefore without jurisdiction and was set aside.

Condonation of delay on sufficient cause - Closure of right to file reply in Section 9 insolvency proceedings - Natural justice in insolvency adjudication - Delay of seven days in filing the appeal beyond the prescribed period - Audi Alteram Partem - Opportunity to be Heard - Procedural Discretion

Sufficient cause - Condonation of delay - Counsel's lapse - HELD THAT: - The expression "sufficient cause" occurring in limitation statutes has repeatedly received liberal interpretation from the Hon'ble Supreme Court where refusal to condone delay would result in denial of adjudication on merits. The Hon'ble Supreme Court In Ramchandra Dallaram Choudhary [2025 (5) TMI 1844 - SC ORDER], reiterated that the expression "sufficient cause" should receive a justice-oriented interpretation and courts must examine whether refusal to condone delay would defeat substantial justice, particularly where the delay is attributable to lapses on the part of legal representatives and not deliberate conduct of the litigant.

The Appellate Tribunal held that the delay was within the condonable period under the proviso to Section 61(2) of the Code and that the explanation furnished by the appellant disclosed sufficient cause. Relying on the justice-oriented approach to the expression sufficient cause, it found that refusal to condone the short delay would defeat adjudication on merits, particularly when the delay was attributed to non-communication by the earlier counsel and prompt steps were taken after the appellant came to know of the order. [Paras 38, 39]

The delay of seven days in filing the appeal was condoned.

Procedural discretion - Fair opportunity of hearing - Reply in Section 9 proceedings - HELD THAT: - In Rafiq & Anr. v. Munshilal [1981 (4) TMI 255 - SUPREME COURT], the Hon'ble Supreme Court observed that a litigant who has done everything expected of him should not be penalized for the default of his advocate. The Court famously observed that the judicial system should not permit a party to suffer merely because of the mistake of his counsel. The same principle was reiterated recently in Dwarika Prasad (Dead) through LRs [2024 (12) TMI 1777 - SC ORDER], wherein the Hon'ble Supreme Court emphasized that adjudication on merits should ordinarily prevail over technicalities and procedural defaults, unless mala fides or deliberate negligence are established.

The Appellate Tribunal held that though regulation of proceedings and case management ordinarily lie within the procedural discretion of the Adjudicating Authority, such discretion must remain consistent with natural justice and a fair opportunity to present a defence. It further held that, in an appeal against closure of the right to file reply, the merits of the underlying contractual dispute were not to be adjudicated; however, it was permissible to examine whether the proposed defence was prima facie substantial so as to assess prejudice. Since admission of a Section 9 application carries serious civil consequences, and the appellant's defence regarding termination of the licence arrangement and dispute as to the claim could not prima facie be treated as sham or frivolous, denial of an opportunity to place that defence on record would not advance justice. The Tribunal balanced procedural discipline against substantive fairness, found no deliberate negligence or abandonment of proceedings by the appellant, and held that any inconvenience to the operational creditor could be compensated by granting only one final opportunity within a time-bound schedule. The impugned procedural order was therefore unsustainable. [Paras 57, 58, 59, 60, 61]

The order closing the appellant's right to file reply was set aside, and one final opportunity was granted to file the reply before the Adjudicating Authority, with all merits left open.

Final Conclusion: The Appellate Tribunal condoned the delay in filing the appeal and held that closure of the corporate debtor's right to file reply in the pending Section 9 proceedings was inconsistent with the requirement of a fair opportunity of hearing. The impugned order was set aside and one final opportunity was granted to file the reply, with all merits left open for adjudication by the Adjudicating Authority.

Interpretation of prior appellate order - Scope of liberty granted to seek disposal of interlocutory applications before plan approval - HELD THAT: - From the sequence of the facts, it is clear that after the order [2026 (4) TMI 1885 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI], adjudicating authority heard the application filed by the appellant and reserved the orders on [2026 (7) TMI 465 - NATIONAL COMPANY LAW TRIBUNAL CHANDIGARH], and on subsequent [2026 (7) TMI 245 - NATIONAL COMPANY LAW TRIBUNAL CHANDIGARH] heard and reserved the order on the plan approval application.

On construing paragraph 6 of the earlier order [2026 (4) TMI 1885 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI], the Tribunal held that it had granted only a liberty to the appellant to bring the matter to the notice of the adjudicating authority and seek prior consideration of the two interlocutory applications. No binding direction had been issued requiring the adjudicating authority to decide those applications in a particular sequence or manner before hearing the plan approval application. Since the adjudicating authority had heard the interlocutory applications and reserved orders on them, and thereafter heard and reserved orders on the plan approval application, reserving the latter did not amount to breach of the earlier order. The appellant's challenge proceeded on a misinterpretation of that order. [Paras 8, 9]

No error was found in the adjudicating authority reserving orders on the plan approval application, and the appeal challenging that course was dismissed.

Final Conclusion: The appeal was dismissed on the ground that the earlier order contained no mandatory direction requiring prior decision of the appellant's interlocutory applications before the plan approval application could be heard or reserved. Liberty was reserved to the parties to pursue such remedies as may be available in law after the adjudicating authority delivers its order.

Statutory pre-deposit for appeal - Restoration of appeals dismissed for non-compliance - advanced age and critical medical condition, including dementia - non-compliance with the pre-deposit requirement under Section 19 - HELD THAT: - The Court found that the petitioner's advanced age and critical medical condition, including dementia, stood supported by medical records and were not controverted. It further noted that the appeals before the Tribunal had been closed solely for non-payment of the statutory pre-deposit and had not been considered on merits. Since the petitioner was now ready and willing to make the required pre-deposit, and the respondent had no objection to the appeals being heard on merits upon such compliance, the Court held that this furnished a valid ground to interfere with the impugned order and direct restoration of the appeals subject to deposit within the time granted. [Paras 8, 9, 10]

The order dismissing the appeals for non-payment of pre-deposit was set aside, and the appeals were directed to be restored subject to payment of the required pre-deposit within four weeks, with merits kept open for decision by the Tribunal.

Final Conclusion: The petition was disposed of by setting aside the Tribunal's order dismissing the appeals for non-payment of pre-deposit and directing restoration of the appeals on the petitioner's making the pre-deposit within the time granted. The Tribunal was requested to hear the restored appeals on priority, and all merits were left open.

Continuation of parallel proceedings on the same cause of action during subsisting status quo - Effect of subsisting status quo order -Legality of the proceedings under Section 37A - HELD THAT: - The Court found that the legality of the proceedings under Section 37A of FEMA had already been put in issue in the earlier writ petition and that a status quo order passed therein was still operating. On examining the impugned show cause notice and complaint, the Court held that they arose from the very same cause of action and were only a continuation of that controversy through fresh proceedings. In that situation, continuation of the later proceedings could not be permitted during the subsistence of the status quo order. [Paras 7, 8, 9]

The impugned show cause notice and complaint were quashed, with liberty to the authorities to initiate or revive them subject to the outcome of the earlier writ petition.

Final Conclusion: The petition was allowed on the ground that the impugned show cause notice and complaint were founded on the same cause of action as the earlier pending writ petition in which a status quo order was operating. Those proceedings were therefore quashed, subject to liberty to revive them depending on the result of the earlier writ petition.

Delayed import payments as trade credit - Borrowing in foreign exchange - RBI permission and condonation of contravention - Liability of Directors for company contravention - Mens rea for civil penalty under FEMA - Delayed remittances for imported services and goods became trade credit or external commercial borrowing - Deferred Payment Arrangement - Post Facto Approval - Civil Penalty - Vicarious Liability - Substance Over Form

Delayed import payments as trade credit - Borrowing in foreign exchange - Current account transaction and capital account consequence - HELD THAT: - The Tribunal held that although the underlying transactions for import of services and goods were current account transactions, the prolonged non-payment had to be tested against the extant RBI circulars and the Borrowing or Lending in Foreign Exchange Regulations. The applicable circular at the time of contravention was A.P. (DIR Series) Circular No. 106 dated 19.06.2003, which expressly treated deferred payment arrangements, including payments beyond six months from shipment, as External Commercial Borrowings and required compliance with the regulatory framework governing such credit. On that basis, the absence of a formal loan agreement, drawdown schedule or interest clause did not alter the legal character created by the governing circular and regulations. The Tribunal further found, on reading the distribution agreement, that the contractual clauses requiring compliance with law did not absolve the company when it in fact failed to ensure payment within the permissible period. The finding of contravention of Section 6(3)(d) read with Regulations 3, 5(3), 6(3) and Schedule III was therefore sustained. [Paras 24, 25, 26, 32]

The company was rightly held to have contravened FEMA by allowing import dues to remain unpaid for years, thereby attracting the regulatory treatment of trade credit/borrowing in foreign exchange.

RBI permission and condonation of contravention - Genuineness of delayed remittance reasons - Authorised Dealer Bank permission - HELD THAT: - The Tribunal examined the RBI letters permitting remittance and held that they were confined to permitting the transactions from the foreign exchange angle and expressly stated that they should not be construed as regularising or validating irregularities, contraventions or other lapses. The Tribunal also affirmed the adjudicating authority's finding that the material placed by the company did not establish delay caused by financial difficulties or disputes with the foreign counterparties. The correspondence showed reasons such as inter-company reconciliation and pending tax assessments, but not a case satisfying the delayed-settlement exception in the RBI circular. The reference made by the authorised dealer bank to RBI itself indicated that the matter was not one covered by the ordinary enabling clause for delayed import dues. Consequently, the post facto remittance permission could not be treated as condonation of the contravention. [Paras 27]

The RBI letters were only permissions to remit and did not wipe out the contravention; the plea based on financial difficulties or dispute-related delay was rejected.

Delay in passing adjudication order - Speaking order - Prejudice from procedural delay - HELD THAT: - The Tribunal found no merit in the contention that the time taken in passing the adjudication order had caused prejudice or resulted in non-consideration of material submissions. On perusal of the order, it held that the adjudicating authority had dealt with the points urged by the appellants and that the order was sufficiently meticulous in disposing of them. In the absence of demonstrated prejudice, the delay in passing the order did not furnish a ground to set it aside. [Paras 28]

The impugned order was not vitiated either as a non-speaking order or on account of delay in its pronouncement.

Liability of Directors for company contravention - Contravention by company under Section 42 - HELD THAT: - The Tribunal held that directors of a company incorporated in India remain answerable under Indian law for contraventions by the company. It relied on the record showing that two of the directors held office during the relevant years and had signed the statutory financial statements, while the third continued as director during the period when the unpaid remittances persisted. The plea that operational responsibility lay with subordinate personnel was rejected, the Tribunal holding that decisions concerning non-remittance of substantial dues to group entities abroad related to the conduct of the affairs of the company itself. Since no material was shown to establish lack of knowledge or due diligence to prevent the contravention, the individual appellants were held liable along with the company. [Paras 29, 32]

The liability of the three directors under Section 42 was upheld.

Mens rea for civil penalty under FEMA - Quantum of penalty - HELD THAT: - The Tribunal held that Section 13(1) of FEMA creates a civil liability and does not contain language making intention, wilfulness or deliberate conduct a condition for levy of penalty. Relying on the principle stated in The Chairman, SEBI v. Shriram Mutual Fund [2006 (5) TMI 191 - SUPREME COURT], and the line of authority noticed therein, it held that once the contravention is established, penalty follows irrespective of guilty intention. At the same time, considering that the delayed remittances were ultimately made with RBI permission, the Tribunal found that the ends of justice would be met by reducing the penalties imposed on the company and the directors. [Paras 30, 31, 32]

The plea that absence of mens rea barred penalty was rejected, but the penalties were substantially reduced.

Final Conclusion: The Tribunal upheld the finding that the company had contravened FEMA by keeping import-related dues unpaid for years, and further upheld the liability of the three directors under Section 42. The challenge based on delay in the adjudication order and on post facto RBI permission was rejected, but the penalties imposed on the company and the individual appellants were reduced.

Delayed reporting of foreign direct investment remittances - Delayed allotment of shares against foreign investment - Non-filing of FC-GPR - Civil liability under FEMA - Penalty on directors in charge of company affairs - Prospective operation of late submission fee circular

Delayed reporting of foreign direct investment remittances - Delayed allotment of shares against foreign investment - Non-filing of FC-GPR - HELD THAT: - The Tribunal recorded that the receipt of foreign direct investment in multiple tranches, non-reporting of the initial remittances, delayed reporting of the remaining remittances, allotment of shares far beyond the prescribed period, and failure to file FC-GPR for any tranche were not disputed by the appellants. On those admitted facts, the Tribunal held that the company had acted in breach of the prescribed reporting and allotment requirements under FEMA and the applicable Regulations, and that the contraventions were therefore made out. [Paras 9]

The findings of contravention against the company were upheld.

Prospective operation of late submission fee circular - HELD THAT: - The Tribunal examined the circular relied upon by the appellants and noted that it expressly stated that it would take effect immediately for delayed filings made on or after the date of the circular. Since the remittances in question were made much earlier, the Tribunal held that the circular had no application to the facts of the case. [Paras 10]

The plea for applying the later RBI circular to determine the penalty was rejected.

Penalty on directors in charge of company affairs - HELD THAT: - The Tribunal relied on the statements recorded under FEMA and found that the contention that the individual appellants were not in charge of the business affairs during the period of contravention was not acceptable. It noted the statement of the executive director that the promoter directors were responsible for share allotment formalities and related regulatory requirements, and also the statement of one of the individual appellants admitting directorship from the inception of the company. On that material, the Tribunal held that the challenge to their liability could not be accepted in appeal. [Paras 11]

The penalties on the individual directors were sustained in principle.

Civil liability under FEMA - HELD THAT: - The Tribunal agreed that proceedings for contraventions under FEMA are civil in nature and that the absence of mens rea did not preclude imposition of penalty. It accepted the reasoning based on Chairman, Sebi vs. Shriram Mutual Fund & Anr. and declined to treat FEMA as criminal or quasi-criminal for the purpose of penalty. At the same time, considering the plea for proportionality and the facts and circumstances, the Tribunal reduced the penalties imposed on the company and the individual directors. [Paras 12, 13]

The penalties were upheld as legally imposable but reduced to lower amounts.

Final Conclusion: The Tribunal upheld the findings that the company had contravened FEMA by delayed reporting of foreign investment remittances, delayed allotment of shares and non-filing of FC-GPR, and also upheld the liability of the individual directors concerned. The plea based on the later RBI circular and the absence of mens rea was rejected, but the penalties were reduced on proportionality considerations, and the appeals were partly allowed to that extent.

Entitlement to bail -Money laundering bail - Scheduled offence as foundation of proceeds of crime - Identification of proceeds of crime - Section 45 rigours and prolonged incarceration - Speedy trial under Article 21 - complaints and intelligence inputs alleging illegal sand mining operations on riverbed - illegal mining was on government land -vehicles were involved in illegally extracting of minerals and consequently unlawfully transporting the minerals to stone crushers by overloaded vehicles

Scheduled offence as foundation of proceeds of crime - Identification of proceeds of crime - Proceeds of crime from illegal mining allegations - HELD THAT: - Money laundering is the process of hiding the illegal origin of money so it looks like it came from a legitimate source. Such illegal origin of money is described as proceeds of crime under PMLA Act, 2002. The “proceeds of crime” are assets derived from criminal activity relating to schedule offence.

As per prosecution, in the present case one of the illegal activity is alleged as sale and purchase of illegal mined minerals by Garhwal Stone Crusher. The assets derived from such criminal activity have not been identified.

The Court held that, for an offence under Section 3 of the PMLA, the prosecution must show a process or activity connected with proceeds of crime, and such proceeds must arise from criminal activity relating to a scheduled offence. In the present case, the allegation that funds generated by Jai Maa Jwala Stone Crusher in Himachal Pradesh were used to acquire Garhwal Stone Crusher in Uttar Pradesh lost its prima facie foundation because the six FIRs relied upon as scheduled offences had culminated in cancellation reports, four of which had already been accepted, and no independent material was shown before the Court to sustain the existence of a scheduled offence there. The Court further found that, even regarding the Uttar Pradesh allegations of illegal purchase, sale or excess storage of minerals by Garhwal Stone Crusher, the complaint did not identify any specific property or asset of the applicant as proceeds of crime derived from the alleged scheduled offence. It therefore held that unaccounted or illegally generated income could not, merely for that reason, be presumed to be proceeds of crime under the PMLA, and that no prima facie basis had been shown to treat Garhwal Stone Crusher or any property of the applicant as such. [Paras 34, 35, 36, 37, 38]

On the material noticed by the Court, the prosecution failed to show a prima facie subsisting scheduled-offence foundation for the Himachal Pradesh allegations or identification of proceeds of crime qua the applicant, which weighed in favour of grant of bail.

Section 45 rigours and prolonged incarceration - Speedy trial under Article 21 - Parity in bail - HELD THAT: - The Court relied on the principle that statutory restrictions on bail do not operate as an absolute bar where continued incarceration would offend Article 21. It noted that the applicant had been in custody since 18.11.2024, investigation under the PMLA had been completed, the complaint had been filed, the trial would take time, and the maximum punishment under Section 4 was limited. The Court also considered that the co-accused, who was alleged to have paid the larger cash component towards acquisition of Garhwal Stone Crusher, had already been granted bail. In the absence of material showing likelihood of absconding, tampering with evidence, intimidating witnesses, or otherwise thwarting the course of justice, continued detention was treated as unjustified pre-trial punishment. Applying the principles stated in Ramkripal Meena [2024 (8) TMI 649 - SC ORDER], K.A. Najeeb [2021 (2) TMI 1212 - SUPREME COURT], Javed Gulam Nabi Shaikh [2024 (8) TMI 650 - SUPREME COURT], Manish Sisodia [2024 (8) TMI 614 - SUPREME COURT], the Court held that conditional bail was warranted. [Paras 45, 46, 47, 48, 49]

Having regard to prolonged incarceration, completion of investigation, likely delay in trial, absence of shown risk to the process of justice, and parity with the co-accused, the applicant was held entitled to bail subject to conditions.

Final Conclusion: The bail application was allowed. The Court held that, on the material placed before it, the prosecution had not shown a prima facie scheduled-offence foundation for the alleged proceeds of crime against the applicant, and, coupled with completed investigation, prolonged custody and likely delay in trial, continued detention was not justified.

Provisional attachment and its confirmation - Attachment of equivalent value property as proceeds of crime - Attachment of property after death of the accused - Recourse under Section 8(7) on abatement of trial by death - Legal Heir Liability

Equivalent value attachment - Deemed tainted property - Proceeds of crime - HELD THAT: - The Tribunal held that the material on record prima facie showed that the amount alleged to have arisen from the scheduled offence had reached the accounts of the school managed by the deceased and had thereafter been withdrawn by him in cash. Since the attached property was proceeded against only to the extent of the alleged proceeds of crime, the attachment was treated as falling within the statutory definition of proceeds of crime, which includes not only property directly derived from criminal activity but also the value of such property. The Tribunal accepted the wider construction of Section 2(1)(u) permitting attachment of equivalent value property and did not accept the contention that such power is confined only to cases where the original property is held outside India. [Paras 6, 7, 8, 9]

The challenge to the attachment on the ground of lack of nexus with the alleged proceeds of crime was rejected.

Posthumous attachment - Notice to legal heir in adjudication - Section 8(7) remedy - HELD THAT: - The Tribunal distinguished the decision in U. Subhadramma [2016 (7) TMI 1514 - SUPREME COURT] on the ground that it arose under a different statutory scheme. It found that under Section 5(1) of the PMLA no prior notice is required before provisional attachment, and therefore attachment of the property after the death of the alleged offender was not contrary to law. It further held that the requirement of notice at the adjudication stage under Section 8(1) stood satisfied because notice had been issued to the legal heir, who appeared before the Adjudicating Authority. Reading Sections 8(5), 8(6) and 8(7) together, the Tribunal held that the statute expressly contemplates cases where the trial cannot proceed by reason of death of the accused, and in such a situation the proper course is for the Director or the person claiming entitlement to the property to move the Special Court for orders of confiscation or release. [Paras 10, 11, 12, 13]

The attachment was upheld, and the appellant was left at liberty to apply to the Special Court under Section 8(7) for appropriate orders regarding the property.

Final Conclusion: The Tribunal upheld the provisional attachment and its confirmation, holding that attachment of property equivalent in value to the alleged proceeds of crime was permissible and was not invalid merely because it was effected after the death of the person against whom the allegations stood. The appeal was disposed of with liberty to the appellant, as legal heir, to move the Special Court under Section 8(7) for appropriate orders regarding confiscation or release of the property.

Personal use exclusion in construction of residential complex - Works contract for non-commercial Government structures - Taxability of construction services to Agricultural Produce Market Committee - Extended period of limitation for non-registration and non-payment of service tax - Construction works for APMC - Cum-tax benefit

Personal use exclusion - Construction of residential staff quarters - Residential complex service - Construction of residential staff quarters for Government departments and agencies, intended for occupation by their staff - HELD THAT: - The Tribunal accepted the adjudicating authority's contract-wise findings that the residential quarters were constructed for use by staff of Government departments and agencies and therefore fell within the exclusion for complexes intended for personal use. The Revenue's general objection on classification was not accepted, and the Tribunal found no infirmity in the treatment of such contracts as non-taxable where the end use was staff residence and not commercial exploitation. [Paras 4]

The dropping of demand in relation to residential staff quarters constructed for personal use of Government personnel was sustained.

Non-commercial Government use - Transmission and distribution of electricity - Works contract exemption - HELD THAT: - The Tribunal upheld the finding that, except for APMC, the contracts were for Governmental or public utility structures not shown to be primarily for commerce or industry. As regards GETCO, the Tribunal specifically held that the services were in relation to transmission and distribution of electricity and were exempt, following Vraj Construction [2024 (9) TMI 406 - CESTAT AHMEDABAD]. The Revenue's broad plea that the break-up was insufficient or that classification was incorrect was rejected in view of the contract-wise examination already undertaken in the impugned order. [Paras 4]

The demand remained dropped in respect of GETCO and other non-commercial Government contracts, save to the extent separately held taxable in relation to APMC.

Agricultural Produce Market Committee - Commercial use test - Extended period of limitation - Composition scheme benefit - Cum-tax benefit - Construction services provided to APMC prior to 01.07.2012 were taxable, the extended period was invocable, and recomputation had to allow composition scheme and cum-tax benefit. - HELD THAT: - The Tribunal held that the controversy regarding APMC stood concluded by Krishi Upaj Mandi Samiti [2022 (2) TMI 1113 - SUPREME COURT], as reaffirmed in later Supreme Court decisions, that activities of APMC of renting or allotting shop, land, platform or space are not mandatory sovereign functions and are commercial in nature for the pre-negative list period. On that basis, construction services provided by the respondent for such facilities were taxable under the appropriate service category. The challenge on limitation was rejected because the show cause notice specifically alleged non-registration, non-filing of returns, non-payment of tax and suppression of taxable activity, which furnished a clear basis for invoking the extended period. At the same time, the Tribunal held that while quantifying the liability, the respondent would be entitled to the benefit of the works contract composition scheme and cum-tax benefit, and that penalty under Section 78 would arise correspondingly on the recomputed demand. [Paras 4]

The demand relating to APMC was restored on merits and limitation, with remand limited to recomputation of tax and penalty after granting composition scheme and cum-tax benefit.

Final Conclusion: The Revenue's appeal was partly allowed. The Tribunal sustained the dropping of demand for residential staff quarters, GETCO-related services and other non-commercial Government contracts, but restored service tax liability in respect of services rendered to APMC for the period in dispute, upheld invocation of the extended period, and remanded the matter only for recomputation of tax and penalty after allowing composition scheme and cum-tax benefit.

Refund of blocked cenvat credit of cesses - Transitional credit of Education Cess, SHE Cess and Krishi Kalyan Cess - Time-barred claim - HELD THAT: - The Tribunal followed the Larger Bench decision in Kei Industries Ltd [2025 (11) TMI 1641 - CESTAT NEW DELHI- (LB)], which held that there was no provision under the earlier Cenvat Credit Rules either to merge such blocked cesses with excise duty or service tax, or to claim them as refund, and that there was no statutory provision for their transition under the GST regime. On that reasoning, when the credit itself was not refundable or transitionable ab initio, refund under the CGST Act could not be claimed. The Bench also noted that its earlier decision in Laurus Labs Ltd. [2024 (10) TMI 53 - CESTAT HYDERABAD] had taken the same view. [Paras 5, 6, 7]

The refund claim was held not maintainable and the appeal was dismissed.

Final Conclusion: Following the Larger Bench decision in Kei Industries Ltd, the Tribunal held that unutilized credit of Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess could not be transitioned or refunded under the CGST regime. The appeal was accordingly dismissed.

Export of service - Investment advisory services to overseas recipient - Refund of unutilised CENVAT credit - Investment advisory and research services provided to an overseas entity, for consideration received in convertible foreign exchange - HELD THAT: - The Tribunal held that the determinative test was the identity of the service recipient and the nature of the contractual arrangement. The appellant rendered advisory and research services to the overseas entity on a principal-to-principal basis; there was no agreement with, or service provided to, any Indian client or customer of that foreign entity. The invoices were raised on the overseas entity and consideration was received in foreign currency. In these circumstances, the mere fact that the subject matter of the advice concerned investment opportunities or business activities in India did not mean that the service was used by Indian companies. Following Goldman Sachs (India) Securities Pvt. Ltd. [2024 (1) TMI 1438 - CESTAT MUMBAI], Sundaram Asset Management Co. Ltd. [2023 (11) TMI 471 - CESTAT CHENNAI] and M/s Q-India Investment Advisory Pvt. Ltd [2017 (10) TMI 754 - BOMBAY HIGH COURT]., the Tribunal held that the services were used outside India by the foreign recipient and therefore constituted export of service. Consequently, refund of the accumulated unutilised CENVAT credit was admissible. [Paras 5, 6, 7]

The services were held to be export of service, and the appellant was entitled to refund of the accumulated unutilised CENVAT credit.

Final Conclusion: The Tribunal held that the appellant's investment advisory services rendered to the Mauritius-based entity constituted export of service, since the service recipient was abroad, the services were not rendered to Indian clients, and the consideration was received in convertible foreign exchange. The order denying refund was set aside and the refund of unutilised CENVAT credit was restored.

Extended period of limitation in repeated demand on same issue - Entitlement to exemption from service tax as a vocational training institute or approved training partner without proof of the prescribed affiliation or approval - Burden of proof - Benefit of Notification No. 09/2003 dated 20.06.2003 and 24/2024

Extended period of limitation - Repeated notice on same issue - HELD THAT: - The Tribunal recorded the departmental representative's fair concession that, since an earlier show cause notice had already been issued for the previous period on the same issue, the extended period could not be invoked again in the impugned demands. Accepting that position, the Tribunal held that the demand relatable to the extended period was barred by limitation. [Paras 6, 11]

The demand for the extended period was set aside as barred by limitation.

Vocational training institute exemption - Commercial training or coaching services - Proof of approval or affiliation for exemption - HELD THAT: - The Tribunal examined the exemption notifications relied upon for vocational training institutes and noted that exemption was available only where the training satisfied the conditions specified in those notifications. For the later exemption entry, the appellant could be covered only as a training partner approved by the National Skill Development Corporation or the Sector Skill Council. Since no documentary evidence of such approval or of the requisite eligibility was produced before the authorities or the Tribunal despite opportunities, the claim for exemption failed. On that basis, the findings of the Commissioner (Appeals) were affirmed for the normal period demand. [Paras 7, 8, 9, 10, 11]

The demand for the normal period was upheld and the exemption claim was rejected.

Final Conclusion: The Tribunal held that the extended period was wrongly invoked where an earlier notice on the same issue already existed, and set aside that part of the demand. However, as the appellant failed to establish the approval or affiliation required for exemption as a vocational training institute, the demand for the normal period was sustained; one appeal was partly allowed and the other was dismissed.

Valuation of taxable services under the category of Manpower Recruitment or Supply Agency Service - Inclusion of reimbursable expenses in taxable value - Prospective operation of amendment to Section 67 - Reimbursable amounts representing workers' wages and other benefits received in the course of manpower supply service - HELD THAT: - The Tribunal held that the Commissioner (Appeals) had sustained the demand solely on the footing that there was no statutory provision for excluding reimbursable amounts from the gross value. That view could not survive in light of Intercontinental Consultants and Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT], wherein the Supreme Court categorically held that reimbursable expenditure did not form part of taxable value prior to the amendment brought into Section 67 with effect from May 14, 2015, and that the amendment was substantive and therefore prospective. Since the disputed period fell wholly before that amendment, the ratio of the Supreme Court directly governed the case; the Tribunal also noted that in the appellant's own earlier case [2024 (10) TMI 1818 - CESTAT BANGALORE] the same view had already been taken for an earlier period. [Paras 5, 6]

The service tax demand founded on inclusion of reimbursable amounts in the gross taxable value was unsustainable, and the impugned orders were set aside.

Final Conclusion: The Tribunal held that, for the period in dispute preceding the 2015 amendment to Section 67, reimbursable amounts could not be added to the taxable value of the manpower supply service. The impugned appellate orders were therefore set aside and the appeals were allowed with consequential relief.

Taxability of drilling services in mines - Classification under Mining Services - SSI Notification benefit - Penalty for non-payment of service tax

Drilling holes in mines - Mining Services - Pre-introduction taxability - HELD THAT: - The Tribunal found from the record that the appellant was rendering Mining Services. On that basis, it held that the services rendered before 01.06.2007 could not be subjected to service tax. For the period from 01.06.2007 to 13.03.2009, the demand was sustainable under the category of Mining Services, as there was nothing on record to establish that the appellant was merely supplying drilling machinery. [Paras 4]

The demand was held unsustainable for the period prior to 01.06.2007, but was upheld under Mining Services for the period from 01.06.2007 to 13.03.2009.

SSI Notification benefit - Remand for quantification - Penalty for non-payment of service tax - HELD THAT: - The Tribunal noted that the appellant had specifically sought the benefit of SSI Notification, but that request had not been examined by the authorities below. The matter was therefore remanded to the original authority only for determining the duty liability after considering that claim. The Tribunal also set aside all penalties. [Paras 4]

The matter was remanded limited to consideration of SSI Notification benefit for determination of duty, and all penalties were set aside.

Final Conclusion: The Tribunal held that the appellant's drilling activity in mines was not taxable prior to 01.06.2007, but was taxable thereafter under Mining Services up to 13.03.2009. The matter was remanded only for examining the claim to SSI Notification benefit for re-determination of duty, and all penalties were set aside.

Service taxability of supply of mineral water in trains - Sale of goods versus catering service - Supply of mineral water in Shatabdi and Rajdhani Express trains under the contractual arrangement with the railways - HELD THAT: - The Tribunal held that the controversy stood covered by Indian Railways Catering & Tourism Corporation Ltd. [2010 (7) TMI 174 - HIGH COURT OF DELHI], which had already determined that, under the contractual arrangement with the railways, such supply amounted to sale of goods. Once the transaction was characterised as sale of goods, the Revenue's contention that the value of packaged drinking mineral water formed part of taxable catering value under Rule 2C could not be accepted, and no service tax was payable on that activity. [Paras 7, 8]

The demand was not sustainable, and the order dropping the demand was upheld.

Final Conclusion: The Tribunal dismissed the Revenue's appeal and upheld the order dropping the demand, holding that supply of mineral water in the specified trains was a sale of goods and not liable to service tax as catering service.

Taxability of CAMPA fund payments- Declared service of tolerating an act - Consideration under service tax law - Payment made to the CAMPA fund as a condition for diversion of forest land for non-forest purposes - declared service under section 66E(e) of the Finance Act, 1994 - HELD THAT: - The Tribunal held that the payment into the CAMPA fund was made by operation of law and as a condition attached to environmental and forest clearance, and not pursuant to any agreement under which the Government agreed to refrain from an act, tolerate an act or a situation, or do an act for consideration. A statutory payment of this nature could not be treated as consideration for any taxable service. Following the earlier decisions noticed in the order in the case of Central Coalfields Limited [2024 (9) TMI 774 - CESTAT KOLKATA], the clearance for use of forest land for non-forest purposes and the consequential CAMPA payment could not be brought within the scope of declared service under section 66E(e). [Paras 6, 7, 8]

No service tax was payable on the CAMPA fund payment, and the demand with consequential penalty was unsustainable.

Final Conclusion: The Tribunal held that payment made to the CAMPA fund for diversion of forest land was a statutory payment and not consideration for any declared service of tolerating an act. The service tax demand for the period in dispute was therefore set aside, and no penalty survived.

Service tax on ocean freight under reverse charge - Importer liability for transportation of goods by vessel in CIF imports - Judicial discipline in following binding precedent - Destination-Based Consumption Tax - HELD THAT: - The Tribunal noted that the amendments made through the notifications had treated the importer as the person liable to pay service tax on ocean freight in cases of imports through vessel, including CIF transactions, even though the transportation service was rendered by the foreign vessel owner or operator to the overseas seller or supplier. It further noted that the Commissioner (Appeals) had relied on the Gujarat High Court decisions in Mohit Mineral Pvt. Ltd. [2020 (1) TMI 974 - GUJARAT HIGH COURT] has been affirmed by Hon’ble Supreme Court [2021 (1) TMI 647 - SC ORDER] and M/s SAL Steel Ltd. [2019 (9) TMI 1315 - GUJARAT HIGH COURT], which had struck down the relevant notifications and held that such levy on the importer was not permissible. Since those decisions continued to hold the field, one having been affirmed by the Hon'ble Supreme Court and the other not having been stayed, the Tribunal held that, on principles of judicial protocol, they had to be followed and there was no error in dropping the demand. [Paras 5, 6]

The order dropping the demand was upheld and the department's appeal was dismissed.

Final Conclusion: Following the High Court rulings relied upon in the impugned order, one of which stood affirmed by the Hon'ble Supreme Court and the other remaining unstayed, the Tribunal found no infirmity in the dropping of service tax demand on ocean freight under reverse charge against the importer. The departmental appeal was accordingly dismissed.

Service tax on construction of residential complexes prior to 01.07.2010 - Works Contract Service - flats meant for personal use of the allottees under the JNNURM scheme - Entitlement to exemption under Notification No. 28/2010-ST - HELD THAT: - It is not in dispute that the demand for the period prior to 01.07.2010 cannot sustain in view of the decision by the Tribunal in Aditya Homes Pvt Ltd. [2019 (9) TMI 793 - CESTAT HYDERABAD]; Ashok Developers Builders Ltd. [2019 (5) TMI 76 - CESTAT HYDERABAD].

Since these residential complexes were meant for personal use and therefore, on this ground also beyond 01.07.2010, the demand would not sustain as held by the Coordinate Benches of the Tribunal in theModi Ventures [2020 (3) TMI 1481 - CESTAT HYDERABAD]; Krishna Homes [2014 (3) TMI 694 - CESTAT AHMEDABAD].

Therefore, it would not be covered within the ambit of the definition of WCS and on this count, the demand would not sustain. Further, even since it is a construction of residential complex under JNNURM Scheme, which is not in dispute as per the documents submitted by the appellant, they would also be entitled for exemption under Notification No.28/2010-ST, supra. Accordingly, the demand would not sustain on merit itself and therefore, we are not examining the issue from the angle of limitation.

Final Conclusion: The Tribunal held that the entire demand for February, 2009 to September, 2010 was unsustainable. The impugned order was set aside, as no liability survived either for the period prior to 01.07.2010 or for the subsequent period in view of the personal-use exclusion and the JNNURM exemption.

Maintainability of appeal against non-appealable departmental communication - Failure to challenge rebate sanction orders within limitation - Functus officio of adjudicating authority - Non-filing of appeals - HELD THAT: - The Tribunal held that the original rebate sanction orders were appealable orders and any grievance against the mode in which rebate was granted had to be raised by filing appeals against those orders before the Commissioner (Appeals) within limitation. Since no such appeals were filed, the adjudicating authority, after passing the orders, became functus officio and had no authority to revisit, modify or rectify them on the basis of a subsequent request letter. The later letter issued by the Assistant Commissioner declining the request could not be used to circumvent the appellant's failure to challenge the original orders in time. [Paras 13, 14, 15]

The challenge was rejected, and the dismissal of the appeal by the Commissioner (Appeals) was upheld.

Final Conclusion: The Tribunal dismissed the appeal, holding that the appellant's remedy, if any, lay in challenging the original rebate sanction orders within the statutory appellate period. The subsequent request for cash refund before the Assistant Commissioner was not maintainable.

Retrospective operation of interest liability under luxury tax law - Interest on escaped luxury tax assessment - HELD THAT: - The Court held that the determinative question was whether the interest provision introduced with effect from 01.04.2009 operated retrospectively. It accepted that the provision had come into force only from that date and held that interest thereunder could not be levied for an earlier assessment year. The Court further noted that this position already stood concluded by an earlier judgment of the High Court in Casino Hotel [2006 (8) TMI 562 - KERALA HIGH COURT], which had attained finality, and therefore there was no warrant to take a different view. [Paras 5, 6, 7]

The demand of interest for the assessment year 1999-2000 under Section 10(2) was unsustainable, and the Revenue's appeal was dismissed.

Final Conclusion: The Court affirmed that Section 10(2) of the Kerala Tax on Luxuries Act, 1976 operates prospectively and cannot be used to levy interest for a period prior to its commencement. The appeal was therefore dismissed.

Transfer of right to use goods - Deemed sale of lease amenities - Composite lease and service arrangement - effective control and possession - Rentals received under lease deeds for furniture, fixtures, equipment, kitchen and cafeteria amenities provided along with leased immovable property - liable to tax as transfer of the right to use goods under the APVAT Act or Section 5E of the APGST Act. - HELD THAT: - A reading of Article 366(29A) of the Constitution clearly reveals that tax can be levied only on the sale or purchase of goods, which includes any transfer of the right to use goods for cash, deferred payment, or other valuable consideration. It is also well settled that unless there is a transfer of the right to use goods from one person to another, the essential ingredients of a sale or purchase are not satisfied and, consequently, the transaction would not be liable to tax.

From reading of the definition of “tax” under Section 2(q) of the APGST Act. The provision reiterates the same principle embodied in Article 366(29A). The definition contemplates the levy of tax only where there is a transfer of the right to use goods pursuant to a contract. Such transfer necessarily requires that the transferee be vested with the right to use the goods, implying effective possession and control over them. Where the transfer does not involve parting with possession or exclusive control over the goods, the transaction would not attract tax.

The authorities, particularly the STAT as well as the appellate authorities, failed to consider that the transfer of right to use goods is complete only when the assessee obtains effective control or exclusive domain over the goods that are the subject matter of the lease transaction.

A reading of the judgment in Bharat Sanchar Nigam Limited [2006 (3) TMI 1 - SUPREME COURT] shows that paragraph 97 lays down five essential ingredients for constituting a transfer of the right to use goods. When these five ingredients are examined in the light of the clauses contained in the lease deeds relating to the furniture and fixtures, it becomes evident that the lease deeds executed between the petitioners and their respective tenants do not satisfy these essential requirements. Accordingly, the transactions cannot be construed as constituting a transfer of the right to use goods so as to attract tax under Section 5E of the APGST Act.

The Court held that levy under the State enactments could arise only where the transaction involved a transfer of the right to use goods, which necessarily required vesting of effective possession and exclusive control in the transferee. On a reading of the lease deeds as a whole, the landlords had not parted with such possession or control; the tenants were only permitted to use facilities and amenities provided as part of the leasing arrangement. Several of the items sought to be taxed, including lifts, sewage system, bathrooms and cafeteria facilities, were common facilities shared by more than one tenant and were therefore incapable of exclusive delivery or exclusive enjoyment by any one tenant. The Court further held that the authorities were not justified in bifurcating composite lease rentals on a presumptive basis into taxable movable and non-taxable immovable components. Applying the tests governing deemed transfer of the right to use goods, the Court found that the agreements did not identify specific goods for delivery, did not establish consensus ad idem as to the identity of goods, did not confer a legal right to use the goods on the tenants with attendant legal consequences, did not exclude the landlords from use during the relevant period, and did not prevent the same facilities from being used by multiple tenants. The transaction was therefore one arising out of a service-oriented lease arrangement and not a deemed sale. [Paras 48, 49, 50, 51, 52]

The impugned levy on rentals attributable to furniture, fixtures, equipment and kitchen and cafeteria amenities was unsustainable and was set aside, the transaction being held not to involve any transfer of the right to use goods.

Final Conclusion: The Court held that the lease arrangement, including furniture, fixtures, equipment and kitchen and cafeteria amenities, did not involve any transfer of the right to use goods but only permitted use of common and controlled facilities as part of a composite service-oriented lease. The impugned orders were therefore set aside and the writ petitions and tax revision case were allowed.

Assessment of annual income from income tax returns for motor accident compensation - Self-employed deceased - averaging of income tax returns - Just and fair compensation

Determination of annual income of a deceased claimant under the Motor Vehicles Act, 1988 - Assessment of annual income from income tax returns - Salaried and self-employed claimants - Surrounding business circumstances - determined by a rigid formula - HELD THAT: - The Court held that income tax returns, being statutory documents, are an important reference point for assessing income, but no hard and fast rule can govern every case. For salaried individuals, the return of the immediately preceding year would ordinarily suffice, since promotions and changed salary structures may be reflected only in that year, with recourse in appropriate cases to promotion letters and corroborative financial material. For self-employed persons or those carrying on business, the proper reference point is the average of the income disclosed in the returns of up to the previous three years, subject to the available returns and the surrounding circumstances. In such cases, the Court must also consider the nature of the business, its growth pattern, its future potential, the effect of initial losses or negative income, and other relevant business factors. The timing of filing of the returns is also relevant, particularly where income shown after death or injury may require closer scrutiny unless supported by financial statements. [Paras 17, 18, 19, 20]

The Court laid down that the preceding year's return is ordinarily sufficient for salaried persons, whereas for self-employed persons the average of up to the previous three years' returns, read with surrounding business circumstances, is the appropriate basis.

Construction business income assessment - Self-employed deceased - Just and fair compensation - Compensation for the deceased carrying on construction business - HELD THAT: - Applying the above principle, the Court noted that two returns for AY 2017-18 and AY 2018-19 were on record. The High Court had taken the average of the two figures but had made no reference to factors bearing on the nature of the business. Since the deceased was running his own construction business, the Court held that a just and fair assessment required fixation of annual income at a figure higher than the mechanical average adopted by the High Court. On that basis, the compensation was recomputed and the amount enhanced from what had been awarded by the High Court, while maintaining interest on the enhanced amount as awarded by the Tribunal. [Paras 21, 22, 23]

The annual income was fixed at Rs. 14,00,000 and the compensation was recomputed accordingly, modifying the High Court's reduction and granting the enhanced amount with interest as awarded by the Tribunal.

Final Conclusion: The appeal was allowed in part. The Court clarified the principles for using income tax returns to assess annual income in motor accident compensation cases, fixed the deceased's income on a just assessment having regard to his construction business, and enhanced the compensation beyond the amount awarded by the High Court.

Dishonour of the Cheque - Vicarious criminal liability of Directors under Section 141 - Specific averments as to being in charge of and responsible for conduct of company business - General averments against Directors - Disclosure of signatory to dishonoured cheque -HELD THAT: - It is trite law that in a petition of complaint, the complainant is required to aver as to how and in what manner a director was in charge of the business of the accused company and was responsible for the conduct of the accused company’s business. Every Director need not be and is not in fact, in charge of the business of the accused company. In absence of the specific role qua the participation of a director in the alleged transaction with the complainant, no director can be implicated by virtue of Section 141 of the NI Act.

It is clear from the materials on record, that the statements in the petition of complaint are only general in nature. It has also not been stated as who/which of the accuseds signed the cheque in this case. Disclosure of the name of the person drawing the cheque is one of the factual allegations which a complaint is required to contain (N. Harihara Krishnan vs. J. Thomas [2017 (9) TMI 1 - SUPREME COURT].

The Court held that Section 141, being a provision creating vicarious liability, requires strict compliance with its statutory conditions. The expressions that the accused was "in charge of" and "responsible to the company for the conduct of its business" are cumulative, and mere designation as a Director or a general statement that the Directors were managing day-to-day affairs is insufficient. On examining the complaint, the Court found no specific allegation as to the petitioner's role in the transaction, participation in issuance of the cheque, responsibility for its dishonour, or even which of the accused had signed the cheque.

From the petition of complaint it is clear that the requirements under Section 141 of the Negotiable Instruments Act as laid down by the Supreme Court in Pawan Kumar Goel [2022 (11) TMI 855 - SUPREME COURT] in (para 31) are totally absent in this case and allowing the proceedings to continue in respect of the petitioner in such circumstances, would clearly amount to abuse of the process of law. [Paras 17, 18, 20, 21, 22]

The complaint was held insufficient to fasten vicarious criminal liability on the petitioner and the proceeding was quashed as against him.

Final Conclusion: The Court held that the complaint lacked the mandatory, specific averments required to invoke Section 141 of the Negotiable Instruments Act against the petitioner as a Director. The criminal proceeding was therefore quashed against him as its continuation would amount to abuse of process.

Dishonour ofCheque - Commencement of limitation for complaint - Prosecution under Section 138 - Deemed service of demand notice on refusal or unclaimed return - Limitation for complaint under cheque dishonour law - Sentencing and compensatory fine in cheque dishonour prosecution - Presumption of service - Presumption of liability - Rebuttable presumption

Deemed service of notice - Commencement of limitation for complaint - Refused or unclaimed postal cover - HELD THAT: - The ratio laid down by the Apex Court in K. Bhaskaran's case [1999 (9) TMI 941 - SUPREME COURT] and by this Court in Kailasanathan's case [2012 (3) TMI 682 - KERALA HIGH COURT] and K. Cherian Kurian's [2018 (3) TMI 2072 - KERALA HIGH COURT] case (supra) will hold the field insofar as the computation of the period of limitation is concerned, as the cause of action arises only on the expiry of 15 days from the date of receipt of the demand notice issued under clause (b) of the proviso to Section 138 of the NI Act. Thus, it is held that the presumption of 'deemed service' should be drawn reckoning the date on which the sender of the notice was notified that the notice has not been served and hence the limitation for filing complaint should commence from the date of deemed service; namely, the date when the complainant received the returned postal cover or was so informed by the postal authority in case the postal cover was lost.

The Court held that, for purposes of clause (c) of the proviso to Section 138 and Section 142, the relevant date is the date of deemed service as notified to the sender. Reckoning limitation from the postman's earlier endorsement of refusal or unclaimed return would create avoidable hardship to the complainant and may defeat the statutory remedy, whereas treating the date of return of the postal article to the complainant as the operative date causes no prejudice to the drawer, who in any event gets further time to make payment. On the record, the returned notice was received by the complainant on 19.11.2005, and the complaint filed thereafter was within time. The appellate court therefore erred in treating the earlier date spoken to in cross-examination as the date from which limitation had to run. [Paras 12, 13]

The finding that the complaint was barred by limitation was held unsustainable, and the appellate reversal on that basis was set aside.

Presumption as to cheque and consideration - Sentence and compensatory fine - HELD THAT: - The Court noted that the complainant had proved the transaction and execution of the cheque through the evidence adduced, entitling it to rely on the statutory presumptions, and there was no sustainable basis to displace the trial court's conclusion on guilt. On sentence, considering the age of the transaction, the Court held that compensation in a cheque dishonour prosecution should sufficiently reimburse the loss suffered by the complainant, and accordingly reduced the substantive imprisonment while imposing a higher fine with the major portion directed as compensation. [Paras 14, 16]

The trial court's conviction was restored, and the sentence was modified to imprisonment till rising of the court with fine, substantially payable to the complainant as compensation.

Final Conclusion: The High Court held that, in cases where the statutory notice is returned refused or unclaimed, limitation for filing the complaint runs from the date on which the complainant receives the returned cover or is informed by the postal authority. On that basis, the acquittal on limitation was set aside, the conviction under Section 138 was restored, and the sentence was modified by substituting nominal imprisonment with fine and compensatory payment to the complainant.

Exercise of High Court's jurisdiction under Article 226 of the Constitution -Writ maintainability against private cryptocurrency exchange - Article 12 status of private entities - Regulatory mandamus and court-directed investigation - Disputed monetary claims in writ jurisdiction - prayers for release of funds and compensation - Private law dispute - public law rights - Writ jurisdiction -

Writ maintainability against private cryptocurrency exchange - Article 12 status of private entities - Regulatory mandamus and court-directed investigation - HELD THAT: - The Court held that the controversy was essentially between individual customers and a private cryptocurrency exchange and was therefore a private commercial dispute. The fact that a large number of investors were allegedly affected did not convert the matter into one of public law. Respondent Nos. 11 to 13 were found to be private entities, neither created, financed nor controlled by the State, and hence not amenable as State under Article 12. The statutory taxation of virtual digital assets under the Finance Act was held insufficient, by itself, either to confer Article 12 status on such entities or to subject the dispute to public law scrutiny. On that basis, and in agreement with the view taken in Rana Handa [2026 (2) TMI 1443 - DELHI HIGH COURT] the Court found no ground for issuance of a regulatory mandamus or for directing investigation by the CBI or an SIT. [Paras 8, 9, 10, 14]

The challenge to the refusal of writ relief, including the prayer for regulatory directions and investigation by a specialised agency, was rejected.

Disputed monetary claims in writ jurisdiction - Alternative civil and consumer remedies - HELD THAT: - The Court held that grant of relief for release of funds would require factual determination of the amount, if any, standing to the credit of each investor and examination of whether the post-incident restrictions were protective measures or amounted to mismanagement. Likewise, the compensation claim would require proof of the cause of loss, determination of culpability and quantification of liability. Since these were disputed questions requiring evidence and trial, they could not be decided summarily under Article 226. The Court further held that such monetary claims must be pursued before the Civil Court or other competent forum, and noted that the pending criminal complaint and the availability of civil and consumer remedies meant that the appellants were not remediless. [Paras 10, 11, 12, 13, 14]

The claims for release of funds and compensation were left to be pursued before the appropriate civil, consumer or other competent forum.

Final Conclusion: The Court dismissed the appeal and upheld the view that the controversy with the private cryptocurrency exchange was not amenable to writ jurisdiction. Reliefs for investigation, release of funds and compensation were declined, with liberty to pursue criminal, civil or consumer remedies before the appropriate forum.

Validity of Suspension of mining operations without hearing - Compensatory addition of lost mining lease period - Leasehold rights as property under Article 300A - Entitlement to compensatory addition of the suspended period to the lease term - delay, laches, or Section 8A - Principles of natural justice - Restitutionary relief

Natural justice in suspension of mining operations - Jurisdictional facts for exercise of statutory power - Validity of statutory order on reasons contained in the order - HELD THAT: - No dispute at the Bar as to there being a Mining Lease for a period of 20 years with clause for extension of another period of 10 years and that the 20 years period shall be reckoned from 14.08.2001 and the same would expire on 13.08.2021. Leases of the kind have statutory character, the same being governed by the provisions of 1957 Act and 1960 Rules promulgated thereunder. It hardly needs to be stated that statutory lease of the kind would create vested interest in the leasehold area and therefore, that would constitute property to which constitutional guarantee avails under Article 300-A.

The word 'Property' employed under Article 300A of the Constitution of India apparently includes the leasehold rights, there being nothing to derogate from this view and therefore, even in respect of Statutory Mining Lease of the kind, Constitutional protection avails, subject to all just exceptions.

The Court held that the mining lease created a protected leasehold interest and that interference with mining operations could be justified only by authority of law. The suspension order was made without giving the lessee any hearing, despite the serious civil and commercial consequences of halting mining operations. It also proceeded on an erroneous premise that there was no valid environmental clearance, whereas the existing clearance for the permitted production level continued co-terminus with the lease. Further, the State failed to show either that the author of the order had authority under the 2007 Rules for such action or that the jurisdictional facts required for exercise of such power existed. Since the order itself disclosed no sustainable reason, its validity could not be supplemented by later explanations, and it was therefore treated as non est. [Paras 6]

The suspension order was held unsustainable and incapable of depriving the petitioners of their leasehold enjoyment.

Compensatory addition of lost lease period - Quiet enjoyment of mining lease - Force majeure and unlawful interruption by the State - HELD THAT: - The Court held that the claim was not for a fresh grant or renewal of lease, but for restoration of the period of enjoyment lost because of the State's unlawful interruption. Section 8A was therefore held not to bar such compensatory addition. Once resumption of mining operations had been permitted after verification of the subsisting environmental clearance, there was no legal basis to deny the period during which operations had been wrongly stopped. The Court also held that, on the text of the lease, the force majeure clause was wide enough to include a happening which the lessee could not reasonably prevent or control, and the wrongful suspension by a State functionary broadly answered that description. Independently of that clause, the covenant of quiet enjoyment stood breached by substantial interference with the lessee's mining operations. On that reasoning, the lost period had to be added back to the lease term. [Paras 6]

The petitioners were held entitled to operate the mining lease for the added period of 5 years and 10 months from the resumption order, subject to usual compliances.

Delay and laches in writ jurisdiction - Res judicata and distinct cause of action - Distinguishing earlier lease extension decisions - HELD THAT: - The Court held that the earlier decisions relied on by the State turned on supplementary lease deeds and waiver, features absent in the present case, and were therefore distinguishable. The earlier writ petition seeking extension of lease did not operate as res judicata because the foundational facts and cause of action in the present case, namely compensatory restoration of time lost due to wrongful suspension, were different. As to laches, the petitioners had been pursuing representations and proceedings for resumption, the illegality complained of was manifest, and no third-party rights had been shown to have intervened. In those circumstances, technical delay could not defeat substantive relief. [Paras 6]

The Court rejected the objections of res judicata and laches and entertained the petition on merits.

Final Conclusion: The Court held that the suspension of mining operations was void ab initio, having been made without hearing, without demonstrated jurisdictional basis, and on an erroneous assumption regarding environmental clearance. Treating the lost period as one wrongfully denied to the lessee, it directed compensatory addition of 5 years and 10 months from the resumption order, subject to usual compliances.