TaxTMI Updates e-Newsletter
Jul 17,2021

E-way bill exemption for movements caused by defence formation under the Ministry of Defence - exemption for services by a goods transport agency in relation to transport of defence or military equipment - Input Tax Credit not available for inputs/input services used for making exempt outward supplies - renting of immovable property supplied by Central Government-outward supply exempt / reverse charge applicability - restriction on Input Tax Credit under amended section 17(5)(b) where supply of food/health services is exempt except when obligatory by law - availability of Input Tax Credit for health services obligatory under law with effect from 01.02.2019 - status of applicant as Central Government for GST purposes

E-way bill exemption for movements caused by defence formation under the Ministry of Defence - status of applicant as Central Government for GST purposes - E-way bill exemption under Rule 138(14)(k) is applicable to the applicant. - HELD THAT: - The Authority found that the applicant is a unit functioning under the Department of Defence Production, Ministry of Defence and satisfies the conditions for being treated as "Central Government". Paragraph 14(k) of Rule 138 exempts generation of e-way bill when movement of goods is caused by a defence formation under the Ministry of Defence as consignor or consignee. Applying the rule to the applicant's status and activities, the Authority held that the applicant is eligible for the exemption and need not issue e-way bills when movement of goods is caused by it as consignor or consignee. [Paras 5]

Answer in affirmative; e-way bill not required for movements caused by the applicant as a defence formation.

Exemption for services by a goods transport agency in relation to transport of defence or military equipment - Exemption under Sr. No. 21 (Heading 9965/9967) for GTA services transporting defence or military equipment applies to applicant's transactions. - HELD THAT: - The Authority reviewed the nature of goods manufactured and transported by the applicant (eg. propellant and explosives used in ammunition) and observed that clause (h) of Sr. No. 21 of Notification No. 12/2017-Central Tax (Rate) exempts GTA services by way of transport in a goods carriage of defence or military equipments. The goods manufactured and transported by the applicant fall within that description. Consequently, the exemption from levy of GST on GTA services is available to the applicant for such transport. [Paras 5]

Answer in affirmative; GTA transport of the applicant's defence/military equipment is exempt from GST.

Renting of immovable property supplied by Central Government-outward supply exempt / reverse charge applicability - Input Tax Credit not available for inputs/input services used for making exempt outward supplies - ITC on inputs and input services relating to manufacturing cannot be availed against GST liability on renting of immovable property by the applicant. - HELD THAT: - The Authority noted that the applicant, being 'Central Government', supplies renting of immovable property to registered persons falls under Notification No. 3/2018, whereby such services supplied by Central Government are not liable to tax in the hands of the supplier (reverse charge on recipient). Since there are no outward tax liabilities on the supply by the applicant, Section 17(2) bars availment of ITC on inputs/input services used for making exempt or non-taxable outward supplies. Therefore ITC cannot be utilised against GST liability on renting of immovable property by the applicant. [Paras 5]

Answer in negative; applicant is not entitled to avail ITC for the renting activity.

Restriction on Input Tax Credit under amended section 17(5)(b) where supply of food/health services is exempt except when obligatory by law - Input Tax Credit not available for inputs/input services used for making exempt outward supplies - ITC is not allowable in respect of food and beverages consumed in the industrial canteen of the applicant. - HELD THAT: - The Authority observed that supply of food and beverages by the applicant's industrial canteen to employees attracts NIL rate under Sr. No. 6 of Notification No. 12/2017-Central Tax (Rate) because the supplier is Central Government and recipients are non business entities. As the outward supply is thus an exempt supply, Section 17(2) applies to deny ITC on inputs/input services used for that supply. The amended Section 17(5)(b) (effective 01.02.2019) does not aid the applicant because the applicant's outward supply remains exempt; accordingly ITC is not available for canteen food and beverages. [Paras 5]

Answer in negative; ITC on food and beverages consumed in the industrial canteen is not available.

Restriction on Input Tax Credit under amended section 17(5)(b) where supply of food/health services is exempt except when obligatory by law - Input Tax Credit not available for inputs/input services used for making exempt outward supplies - ITC is not allowable in respect of manpower services hired for the industrial canteen and refilled LPG cylinders used in the industrial canteen. - HELD THAT: - The Authority treated the canteen's outward supply as exempt (NIL rate) under Sr. No. 6 of Notification No. 12/2017-Central Tax (Rate), because the applicant is Central Government and the recipients are non-business entities. Since the outward supply is exempt, Section 17(2) denies ITC on inputs and input services (including hired manpower and LPG refills) used for providing that exempt supply. The amended Section 17(5)(b) does not permit ITC here because the applicant's outward supply is not a taxable supply. [Paras 5]

Answer in negative; ITC on manpower services and LPG for the industrial canteen is not available.

Availability of Input Tax Credit for health services obligatory under law with effect from 01.02.2019 - Input Tax Credit not available for inputs/input services used for making exempt outward supplies - ITC in respect of medicines and other inputs/input services used in the factory hospital is allowable with effect from 01.02.2019, but not for the prior period. - HELD THAT: - The Authority found that provision of medical services through the factory hospital is mandatory under Ordnance Factory Medical Regulations. Prior to the amendment effective 01.02.2019, Section 17(5)(b) denied ITC for health services; consequently ITC before that date is not allowable. The CGST Amendment Act, 2018 (effective 01.02.2019) inserted an exception permitting ITC where the supply of health services is obligatory for an employer under any law. Applying this, the Authority held that ITC on medicines and inputs/input services used in the factory hospital is available from 01.02.2019 onwards, but not for periods before that date. [Paras 5]

Answer in affirmative only with effect from 01.02.2019; ITC not available for prior periods.

Final Conclusion: The Authority ruled that (i) the applicant qualifies as Central Government and is exempt from generating e-way bills for movements caused by it as a defence formation; (ii) GTA transport of the applicant's defence/military equipment is exempt from GST; (iii) ITC cannot be availed for inputs/input services in respect of renting of immovable property and for supplies made through the industrial canteen (including manpower and LPG), because those outward supplies are effectively exempt; and (iv) ITC for medicines and inputs used in the factory hospital is allowable only from 01.02.2019 onwards, and not for earlier periods.

Supply of Services - Supply of Goods - Online tendering - Offline tendering - classification under services heading 9997 - miscellaneous services including services nowhere else specified - exemption under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 - registration activities

Online tendering - Supply of Services - Online tendering is a supply of services. - HELD THAT: - The Authority examined the nature of e-tendering as an internet based process in which tendering activities (application, fee payment, submission of bids) are mediated by information technology. The definition of goods does not encompass such intangible, IT mediated processes, whereas the legislative scheme (including the IGST definition of online information and database access or retrieval services) treats such automated, internet mediated deliveries as services. Consequently, online tendering does not satisfy the definition of goods and falls within the scope of service. [Paras 5]

Online tendering will be considered as supply of services.

Offline tendering - Supply of Services - Offline tendering in its entirety is a supply of services. - HELD THAT: - The Authority found that offline tendering also involves intangible components (sale of tender form, application, fee payment, submission and processing of bids) and does not amount to a transfer of goods. Given the inclusive and wide definition of service under the GST Act and the inability to characterise the offline tendering process as 'goods' in its entirety, offline tendering is to be treated as the rendering of services. [Paras 5]

Offline tendering will be considered as supply of services.

Classification under services heading 9997 - Online tendering - Online tendering is classifiable under services heading 9997. - HELD THAT: - The GST services tariff (Chapter 99, headings 9954-9999) does not specifically mention online tendering. As online tendering is a service not otherwise specified, the Authority held that it falls under Heading 9997 which covers other miscellaneous services including services nowhere else specified. [Paras 5]

Online tendering should be taxed under services heading 9997.

Classification under services heading 9997 - Offline tendering - Offline tendering is classifiable under services heading 9997. - HELD THAT: - Applying the same approach as for online tendering, and noting that offline tendering is likewise not specifically listed in the services tariff, the Authority concluded that offline tendering qualifies as a miscellaneous service falling under Heading 9997. [Paras 5]

Offline tendering should be taxed under services heading 9997.

Miscellaneous services including services nowhere else specified - Tendering - Tendering (online or offline) is a miscellaneous service and not an administrative or specially listed service for the purposes of the ruling. - HELD THAT: - Although the specific categorisation as 'administrative' versus 'specific' service was not within the provisions enumerated for advance ruling, the Authority has already held that both modes of tendering are services falling under Heading 9997. Therefore, tendering is to be regarded as miscellaneous services (services nowhere else specified) rather than a separately enumerated administrative service for the purpose of classification in this ruling. [Paras 5]

Tendering will be considered as miscellaneous services including services nowhere else specified.

Exemption under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 - registration activities - Activities of the Maharashtra State Dental Council and the registration fees under Rule 73 are not exempt under Notification No. 12/2017. - HELD THAT: - The Authority examined whether the Council's activities fall within the description of services exempted in the cited notification. The services rendered by the applicant were not found to be specifically covered by the entries in the notification's table. Consequently, the receipt of registration fees payable under Rule 73 of the Bombay Dentists Rules, 1951 is not exempt from GST under that notification. [Paras 5]

The activities are not exempt under Notification No. 12/2017 and the registration fees are not exempt from GST.

Final Conclusion: The Authority ruled that both online and offline tendering constitute supplies of services; both are classifiable under services heading 9997 as miscellaneous services (services nowhere else specified); the question of administrative versus specific service is answered by that classification; and the Maharashtra State Dental Council's activities and registration fees under Rule 73 are not exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

Supply - business - doctrine of mutuality - deeming fiction treating a person and its members as distinct persons - related persons - consideration - amendment to Section 7 of the CGST Act - exemption for housing societies by way of reimbursement

Supply - doctrine of mutuality - deeming fiction treating a person and its members as distinct persons - related persons - amendment to Section 7 of the CGST Act - consideration - Whether maintenance charges collected by the Co operative Housing Society from its members are liable to GST - HELD THAT: - The Authority examined the applicant's contention that maintenance charges are outside GST by reason of the doctrine of mutuality and the absence of consideration. It noted the legislative amendment to Section 7 of the CGST Act (as assented to on 28.03.2021) which treats activities or transactions by a person other than an individual to its members or constituents (and vice versa) as supply and clarifies that such person and its members shall be deemed to be two separate persons. In view of this amendment, the Authority held that the society and its members are distinct for GST purposes, and amounts received as maintenance charges constitute consideration for supply of services by the society to its members. Consequently, the principle of mutuality relied upon by the applicant does not operate to exclude GST liability in the post amendment position. Applying these conclusions, the Authority answered that maintenance charges collected from members are taxable under GST subject to the specified monetary threshold set out in the order. [Paras 5, 6]

The applicant is liable to pay GST on maintenance charges collected from its members (by whatever name called) where the monthly subscription or contribution charged from the members exceeds Rs. 7,500 per month.

Final Conclusion: Advance Ruling: maintenance charges collected by the Co operative Housing Society from its members are taxable under GST because the society and its members are deemed distinct persons by the amended Section 7; GST is payable where the monthly subscription/contribution exceeds Rs. 7,500 per member.

Classification of goods under heading 86.07 - parts suitable for use solely or principally with railway locomotives - Section XVII Note 2 exclusion - Section XVII Note 3 principal use rule

Classification of goods under heading 86.07 - parts suitable for use solely or principally with railway locomotives - Section XVII Note 2 exclusion - Section XVII Note 3 principal use rule - Whether Brush Holder Assembly and parts, Lead Wires for locomotives and Insulating Rods manufactured as per Indian Railways' drawings/specifications are classifiable under heading 86.07. - HELD THAT: - The Authority applied the two cumulative conditions for heading 86.07: (1) the parts must be identifiable as suitable for use solely or principally with railway locomotives or rolling stock; and (2) they must not be excluded by the Notes to Section XVII. On the facts as presented by the applicant - that the goods are manufactured to Indian Railways' specifications and drawings, are used in traction motors for locomotives, and would have no practical use outside that application - the Authority found the first condition satisfied. The Authority examined Note 2 to Section XVII and observed that the subject goods are not listed among the articles excluded thereunder, so Note 2 does not disqualify them. Note 3 was held to operate in favour of classification under Chapter 86 where a part is suitable solely or principally for use with the vehicles of that Chapter; accordingly Note 3 supports placing an item answering descriptions in two or more headings under the heading corresponding to its principal use. Applying these principles to the material facts, the Authority concluded that the impugned Brush Holder Assembly and parts, Lead Wires and Insulating Rods manufactured to Indian Railways' drawings/specifications are classifiable under heading 86.07. [Paras 5]

The products are classifiable under heading 86.07 when manufactured to Indian Railways' drawings/specifications and used in traction motors meant for railway locomotives.

Final Conclusion: The Advance Ruling answers that Brush Holder Assembly and parts, Lead Wires and Insulating Rods are classifiable under heading 86.07 where they are manufactured as per Indian Railways' drawings/specifications and used in traction motors for railway locomotives.

Release of detained vehicle and goods against bank guarantee - pre-deposit for filing appeal - stay of recovery pending disposal of statutory appeal - levy of State and Central GST with penalty for e-way bill non-compliance - adjudication under GST for e-way bill violations

Release of detained vehicle and goods against bank guarantee - pre-deposit for filing appeal - stay of recovery pending disposal of statutory appeal - Whether the detained vehicle and goods should be released pending disposal of the appeal and on what terms. - HELD THAT: - The petitioner, a transporter, challenged an assessment order confirming State and Central GST and equal penalties arising from alleged e-way bill non-compliance. The petitioner had filed an appeal after making the statutory pre-deposit of 10% of the disputed tax. The assessing officer demanded full recovery before releasing the vehicle and goods. Having considered the pendency of the appeal and the fact of the pre-deposit, the Court exercised its power to condition the release on an unconditional bank guarantee representing 25% of the disputed tax and penalty inclusive of the amount already deposited. The Court directed immediate release upon fulfilment of this condition and required the bank guarantee to remain valid until the appeal is finally disposed of by the appellate authority. The order balances the department's revenue interest with the assessee's right to contest the demand by imposing a security lesser than full recovery but greater than the statutory pre-deposit.

Petitioner to furnish an unconditional bank guarantee for 25% of the disputed tax and penalty (inclusive of the pre-deposit); upon such compliance the vehicle and goods to be released immediately; the bank guarantee to remain in force until disposal of the appeal.

Final Conclusion: Writ petition disposed of directing conditional release of the detained vehicle and goods upon furnishing an unconditional bank guarantee for 25% of the disputed tax and penalty (inclusive of the pre-deposit); the bank guarantee to remain effective until the appellate authority disposes of the appeal.

Blocking of electronic credit ledger - use of input tax credit - restriction under Rule 86A of the CGST Rules, 2017 - cessation of restriction after one year under sub rule (3) of Rule 86A

Restriction under Rule 86A of the CGST Rules, 2017 - cessation of restriction after one year under sub rule (3) of Rule 86A - blocking of electronic credit ledger - use of input tax credit - Whether the blockage of the petitioner's electronic credit ledger continues to operate after the expiry of one year from the date of imposition - HELD THAT: - The Court recorded that the petitioner's electronic credit ledger was blocked on January 28, 2020. Sub rule (3) of Rule 86A of the CGST Rules, 2017 provides that a restriction imposed under that Rule shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction. Applying that statutory provision, and having regard to the lapse of more than one year since the impugned blockage, the Court held that the restriction has ceased to have effect and, consequently, the petitioner's inability to avail input credit by reason of the blockage has been redressed by operation of law. The Court expressly left open all other contentions of the parties without adjudication. [Paras 2, 4, 5]

The restriction on use of the petitioner's electronic credit ledger imposed on January 28, 2020 has ceased to have effect after the expiry of one year in terms of sub rule (3) of Rule 86A; petition disposed while leaving other contentions open.

Final Conclusion: Petition disposed on the sole basis that the blockage of the electronic credit ledger ceased to operate after one year under sub rule (3) of Rule 86A of the CGST Rules, 2017; other contentions not decided.

Summary order. Notice issued; respondent No.1 accepted notice and notice directed to respondent Nos.2-4 through Standing Counsel; matter listed on 07th October, 2021; order to be uploaded and copied to counsel by e mail.

Seal of factory premises - access to and use of factory premises - seal on production machinery - right to obtain copies of seized records under section 67(5) of the Central Goods and Services Tax Act, 2017

Seal of factory premises - access to and use of factory premises - seal on production machinery - Existence and effect of any seal on the factory premises and the petitioner's entitlement to enter and use the factory. - HELD THAT: - The respondents conceded that the seal is confined to the cigarette manufacturing machines and that no seal has been placed on the factory premises as such. The respondents expressly stated they have no objection to the petitioner using the factory since the seal is limited to the machines. In view of these admissions and the parties' stand, the Court found there is no seal on the factory premises and that the petitioner may enter and use the factory. The Court left open the separate grievance concerning the seal on the cigarette manufacturing machines for the petitioner to pursue by appropriate legal remedies. [Paras 2, 3, 8]

There is no seal on the factory premises; the petitioner is permitted to enter and use the factory premises, while the seal on the cigarette manufacturing machine remains subject to separate legal recourse.

Right to obtain copies of seized records under section 67(5) of the Central Goods and Services Tax Act, 2017 - Procedure for obtaining seized books and records necessary for running the factory. - HELD THAT: - The Court recorded the respondents' statement that if the petitioner files an appropriate application under section 67(5) of the Act of 2017, copies of the necessary records and books would be provided in accordance with law. The petitioner raised no objection to this procedure. The Court therefore directed that the petitioner may obtain the documents by preferring an application under section 67(5), leaving the provision and compliance with law to the respondents' statutory obligations. [Paras 5, 9]

The petitioner may obtain the seized books and records by preferring an application under section 67(5) of the Central Goods and Services Tax Act, 2017; respondents to provide same in accordance with law.

Final Conclusion: Petition disposed: court records that no seal exists on the factory premises and permits the petitioner to enter and use the factory; petitioner may obtain seized records by application under section 67(5) of the CGST Act, 2017; the seal on the cigarette manufacturing machines remains a separate grievance for the petitioner to pursue by appropriate legal remedy.

Treatment of reversal of provisions in book profits for MAT computation - deemed disallowance under MAT - contingent liability versus ascertained liability - rectification under section 154

Treatment of reversal of provisions in book profits for MAT computation - deemed disallowance under MAT - contingent liability versus ascertained liability - Whether the write-back of provision for outstanding derivatives in assessment year 2009-10 could be treated as reduction of book profits by treating it as a deemed disallowance under MAT for assessment year 2008-09. - HELD THAT: - The Tribunal noted that the provision for outstanding derivative contracts had been disallowed in assessment year 2008-09 under the normal provisions of the Act as a contingent liability and that MAT provisions were not applicable to the assessee for that year. The write-back in the subsequent year (AY 2009-10) resulted from that prior disallowance under regular provisions. The assessee's contention that such write-back should be treated as a deemed disallowance under MAT for AY 2008-09 and thus adjusted in book profits for AY 2009-10 was rejected. The Tribunal held that a reversal of a provision in a later year, which had earlier been dealt with under the normal provisions (and in a year when MAT did not apply), cannot be recharacterised retrospectively as a MAT disallowance for the earlier year so as to affect MAT computation in the subsequent year. [Paras 3]

The claim to treat the write-back as a deemed MAT disallowance for AY 2008-09 and to reduce book profits for AY 2009-10 was not accepted.

Rectification under section 154 - Whether the reversal of the provision and its non-inclusion in MAT computation could be corrected by the Assessing Officer by invoking rectification under section 154. - HELD THAT: - The Tribunal agreed with the Commissioner (Appeals) that the reversal of the provision in a subsequent year represented ordinary tax treatment and did not amount to the Assessing Officer's overlooking of statutory provisions that would justify rectification under section 154. The matter arose from substantive assessment treatment in the earlier year rather than from a clerical error or omission susceptible to correction under section 154. Consequently, the AO could not be said to have failed in compliance of statutory provisions in a manner warranting rectification under section 154. [Paras 3]

The rectification under section 154 could not be invoked to recharacterise the reversal for MAT purposes; the AO's action did not constitute an overlook of statutory provisions permitting rectification.

Final Conclusion: The appeal is dismissed: the write-back of the provision could not be treated as a deemed MAT disallowance for the earlier year nor rectified under section 154 to affect MAT computation, and the Commissioner (Appeals) and AO's treatment is sustained.

Thrusting mutuality status by revenue - matching principle in computing taxable income - deduction under section 37(1) as expenditure for the purpose of business - deduction under section 57(iii) against interest income - capital versus revenue expenditure

Thrusting mutuality status by revenue - Validity of treating the assessee as a mutual benefit society when the assessee did not claim the benefit of mutuality. - HELD THAT: - The Tribunal held that the Assessing Officer or the Commissioner (Appeals) cannot force upon the assessee the status of a mutual society when the assessee has not claimed that status, particularly where the society's bylaws and activities bear a taint of commerciality. The Tribunal examined the factual matrix, including the continuance of membership entitlement to profit and provision for dividend in bylaws, and concluded that the activities demonstrated commercial character. Consequently, the action of the Assessing Officer in imposing mutuality was set aside. [Paras 12]

The finding that the assessee is to be treated as a mutual society is set aside; the assessee cannot be thrust into mutuality where it has not claimed that status and commerciality exists.

Matching principle in computing taxable income - deduction under section 37(1) as expenditure for the purpose of business - Allowability of interest/compensatory payments made to members as a deduction under section 37(1) (or as business expenditure) against interest earned on fixed deposits. - HELD THAT: - The Tribunal accepted that the payments to members were compensatory for delay in allotment and directly connected to funds contributed by members which were invested to earn interest. Applying the matching principle, the Tribunal held that such expenditure is incurred for the purpose of the assessee's business and must be allowed as deduction. Reliance was placed on appellate authorities establishing that profits must be computed after deducting expenses necessary to ascertain true profits and that business-purpose expenditure is allowable unless expressly disallowed. [Paras 12]

The interest/compensatory payments to members are allowable as deduction under section 37(1) (business purpose) and the grounds on the merits are allowed.

Deduction under section 57(iii) against interest income - If interest income is assessed as "income from other sources", whether the interest/compensatory payments to members are allowable under section 57(iii). - HELD THAT: - The Tribunal held that the interest paid to members is inextricably linked to the interest earned from fixed deposits created out of members' advances; had there been no advances there would be no interest income. Given this direct nexus and commonality of purpose, the payments qualify as expenditure wholly and exclusively laid out for earning the interest income and are allowable under section 57(iii), citing precedents where interest on borrowed funds applied to fixed deposits was allowed against interest income. [Paras 12]

Even if interest income is assessed under "income from other sources", the interest/compensatory payments to members are allowable under section 57(iii).

Capital versus revenue expenditure - Whether the expenditure of Rs. 37,00,941 is capital or revenue in nature. - HELD THAT: - The assessee's representative conceded that the expenditure in question is capital in nature. In view of that concession, the Tribunal treated the expenditure as capital and against the assessee. [Paras 11]

The expenditure of Rs. 37,00,941 is held to be capital in nature and disallowed.

Final Conclusion: The appeal is partly allowed: the Tribunal set aside the imposition of mutuality, allowed the deduction of interest/compensatory payments to members (either under section 37(1) or, if taxed as other sources, under section 57(iii)), and disallowed the claimed expenditure of Rs. 37,00,941 as capital in nature.

Deduction under section 80P(2)(a)(i) - liberal construction of benevolent tax provision - scope of 'members' under Cooperative Societies Act - remand for fresh consideration

Deduction under section 80P(2)(a)(i) - liberal construction of benevolent tax provision - scope of 'members' under Cooperative Societies Act - remand for fresh consideration - Whether the matter should be remitted to the Assessing Officer for fresh examination of the claim of deduction under section 80P(2)(a)(i) in the light of the decision of the Hon'ble Apex Court in Mavilayi Service Co-operative Bank Ltd. v. CIT. - HELD THAT: - The Tribunal noted that the Hon'ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. CIT held that section 80P is a benevolent provision to be read liberally and that, where a society is registered under the State Cooperative Societies Act, interest income arising from credit facilities to members falls within the scope of deduction under section 80P(2)(a)(i), subject to profits attributable to loans to non-members being excluded. Applying that dictum, the Tribunal found it appropriate to remit the matter to the Assessing Officer for examination of the appellant's claim of deduction under section 80P(2)(a)(i) in light of the Apex Court's reasoning regarding the construction of section 80P and the meaning of 'members' under the relevant State Act. The Tribunal did not decide the substantive claim on merits but directed the AO to reconsider the deduction claim consistent with the Supreme Court's decision. [Paras 7, 8]

The issue is remitted to the Assessing Officer for fresh consideration of the deduction under section 80P(2)(a)(i) in accordance with the dictum of the Hon'ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. CIT; the appeal is allowed for statistical purposes.

Final Conclusion: In view of the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. CIT, the Tribunal remitted the claim for deduction under section 80P(2)(a)(i) to the Assessing Officer for fresh examination; the appeal is allowed for statistical purposes.

Approval under section 80G(5) - genuineness of activities and objects - requirement of verification under Rule 11AA - effect of expired registration under Societies Registration Act on registration under section 12AA - appellate powers of Tribunal under section 254(1) to grant registration or remand - fresh evidence filed before the Tribunal requiring remand

Approval under section 80G(5) - appellate powers of Tribunal under section 254(1) to grant registration or remand - fresh evidence filed before the Tribunal requiring remand - Whether the Tribunal should itself grant approval under section 80G or remit the application to the Commissioner (CIT(Exemption)) for fresh consideration. - HELD THAT: - The Tribunal examined its powers under section 254(1) and the principles laid down by the Larger Bench of the Allahabad High Court in Reham Foundation. While the Tribunal has co extensive and wide appellate powers and may record satisfaction and grant registration/approval where it reaches its own conclusion on the basis of material that was before the Commissioner, it should not exercise that power where the Tribunal's view would rest on material or documentary evidence that was not available to the Commissioner. In the present case the assessee filed a renewal certificate of registration under the Societies Registration Act dated 11.06.2021 with retrospective effect for the first time before the Tribunal; that document was not before the CIT(Exemption) when he passed the order dated 22.12.2020. Further, the CIT(Exemption) had recorded that the assessee failed to furnish original bills, vouchers, donation details and confirmations necessary for verification. Because fresh evidence was placed before the Tribunal and the department sought verification, and material necessary to satisfy the statutory inquiries under section 80G(5) and Rule 11AA was not furnished before the CIT(Exemption), the Tribunal concluded that remand for fresh consideration by the CIT(Exemption) was appropriate rather than the Tribunal itself granting approval.

Application is remitted to the file of the CIT(Exemption) for fresh consideration on merits; the Tribunal did not itself grant approval.

Genuineness of activities and objects - requirement of verification under Rule 11AA - Whether the inquiry into genuineness of activities and affairs of the institution under section 80G(5) read with Rule 11AA is a mere formality or a substantive requirement. - HELD THAT: - The Tribunal held that the inquiry contemplated by section 80G(5) and Rule 11AA is not an empty formality. The Principal Commissioner or Commissioner must make inquiries and satisfy themselves as to the genuineness of the institution's activities and fulfillment of the conditions in clauses (i) to (v) before granting approval. Given the time lag between grant of registration under section 12AA and the application under section 80G, it is incumbent on the CIT to verify that affairs are conducted for charitable purposes. In the case before the Tribunal, the CIT(Exemption) recorded non cooperation by the assessee and absence of original bills, vouchers, donation details and confirmations, and therefore rejection on verification grounds was sustainable pending fresh consideration if the assessee furnishes requisite material.

The statutory verification under section 80G(5) and Rule 11AA is substantive and must be carried out by the CIT; absence of required documents justifies further scrutiny.

Effect of expired registration under Societies Registration Act on registration under section 12AA - fresh evidence filed before the Tribunal requiring remand - Impact of expiry (and subsequent retrospective renewal) of Societies Registration Act certificate on the concurrent validity of registration under section 12AA and on the 80G application. - HELD THAT: - The Tribunal found that the assessee's registration under the Societies Registration Act had expired on 23/24 April 2020 and, as a corollary, the registration under section 12AA would run concurrently and thus stand expired while the Societies registration was not in force. The retrospective renewal dated 11.06.2021 was filed before the Tribunal for the first time and therefore constituted additional evidence which the department sought to verify. Because the renewed certificate was not available to the CIT(Exemption) at the time of his order dated 22.12.2020, and because the CIT had recorded deficiencies in documentary proof of activities and receipts, the Tribunal treated the renewal certificate as fresh evidence necessitating remand for departmental verification and fresh consideration of the 80G application.

The expired Societies registration resulted in concurrent lapse of 12AA registration; the retrospective renewal filed first before the Tribunal is fresh evidence and requires verification by the department on remand.

Final Conclusion: The appeal is allowed for statistical purposes by setting aside the CIT(Exemption)'s order refusing approval under section 80G and remitting the assessee's application to the file of the CIT(Exemption) for fresh consideration on merits. The CIT(Exemption) shall afford the assessee a proper opportunity of hearing and the assessee must produce all relevant documents and evidence; all contentions are kept open.

Long-term capital gains - cost of improvement - allowability under section 48 - expenditure incurred in connection with transfer of a capital asset - burden of proof for claimed expenditure - deduction at source under section 195 - interest under section 234A, 234B and 234C

Long-term capital gains - cost of improvement - allowability under section 48 - burden of proof for claimed expenditure - Confirmation of disallowance of claimed cost of improvement while computing LTCG - HELD THAT: - The Tribunal upheld the disallowance of Rs. 23,52,960 claimed as cost of improvement. The assessee failed to produce cogent evidence to substantiate payments for the construction of watchman quarters and stone-cutting charges, relying only on affidavits and photographs. The Tribunal accepted the Revenue's view that expenses such as power, security, telephone and travelling related to maintenance and guarding of the property do not qualify as cost of improvement deductible under the mode of computation for capital gains. The limited nature of the evidence and the character of the expenditures led to the conclusion that they did not add to the value of the asset for the purposes of section 48 and therefore rightly disallowed. [Paras 6, 7, 8, 9]

The disallowance of Rs. 23,52,960 towards cost of improvement while computing long-term capital gains is confirmed.

Expenditure incurred in connection with transfer of a capital asset - burden of proof for claimed expenditure - Confirmation of disallowance of claimed expenditure incurred for transfer of the capital asset - HELD THAT: - The Tribunal sustained the disallowance of Rs. 11,61,843 claimed as brokerage and other transfer-related expenses because the assessee did not produce adequate documentary proof of payment. The Revenue accepted a limited deduction based on available flight tickets and allowed 50% of travelling expenses; the balance was disallowed. The Tribunal noted that, as an NRI, payments would ordinarily be evidenced by bank transfers or cheque and that mere receipts or affidavits without corroborative proof were insufficient to discharge the burden of proof. [Paras 11, 12]

The disallowance of Rs. 11,61,843 towards expenditure for transfer of the capital asset is confirmed, except for the limited travelling deduction already allowed by the Revenue.

Deduction at source under section 195 - interest under section 234A, 234B and 234C - Validity of levy of interest under sections 234A, 234B and 234C despite alleged TDS under section 195 - HELD THAT: - The Tribunal rejected the contention that obligation on the payer to deduct tax at source under section 195 absolves the non-resident assessee from liability to pay tax or interest. Interest under sections 234A, 234B and 234C arises from default by the assessee and are consequential in nature; section 195 does not negate the assessee's responsibility to remit tax if the payer fails to deduct or pay TDS. Consequently, the Tribunal found no reason to interfere with the levy of interest by the Revenue. [Paras 14, 15]

The levy of interest under sections 234A, 234B and 234C is sustained; the exemption from interest on the basis of alleged TDS under section 195 is not accepted.

Final Conclusion: All appeals by the assessee are dismissed: disallowances of claimed cost of improvement and transfer-related expenditures are confirmed, and the levy of interest under sections 234A, 234B and 234C is upheld.

Taxation of capital gains - HUF versus individual status - evidentiary weight of statutory authority/Urban Land Ceiling (ULC) order in determining ownership - validity of reassessment where notice issued without specifying status - assessment void ab initio where assessee was not a party to the transaction - reassessment on the ground of escapement of income

Taxation of capital gains - HUF versus individual status - evidentiary weight of statutory authority/Urban Land Ceiling (ULC) order in determining ownership - Capital gains arising on sale of the impugned property are taxable in the hands of the HUF and not in the individual capacity of the vendors. - HELD THAT: - The Agreement of sale-cum-GPA and the order of the Special Officer and Competent Authority, ULC, Hyderabad recorded that the schedule property was part of joint family (HUF) property. The Assessing Officer assessed the capital gains in the individual hands of the vendors notwithstanding the statutory ULC order and the recitals in the sale agreement. On the material before the Tribunal, the finding of the ULC authority and the recital in the registered agreement establish that the property belonged to the HUF; therefore assessment of capital gains in the individuals was not proper. The Tribunal set aside the order of the CIT(A) and allowed the appeals insofar as they sought taxation in HUF status. [Paras 7]

Appeals allowed: capital gains to be regarded as arising to the HUF; assessment in individual capacity set aside.

Assessment void ab initio where assessee was not a party to the transaction - validity of reassessment where notice issued without specifying status - Assessments framed against persons whose names do not appear in the sale agreement are void ab initio and are to be quashed. - HELD THAT: - The three appellants in these appeals were not parties to the registered agreement of sale-cum-GPA. There was no material to show they were vendors or had transferred the impugned property. The Revenue did not controvert that their names were absent from the sale document. On that basis the Tribunal held that assessments made in their names were null and void, and accordingly allowed their appeals. [Paras 8, 9, 10]

Assessments in the names of appellants not party to the sale deed are void ab initio; appeals allowed.

Final Conclusion: For AY 2006-07 the Tribunal reversed the revenue's treatment: capital gains on the sale were held to belong to the HUF (appeals allowed and CIT(A)'s orders set aside) and, separately, assessments made against persons not parties to the sale deed were quashed as void ab initio.

Business loss under section 37(1) - characterisation of foreign exchange/forward contract losses - application of Accounting Standard AS-11 to foreign exchange transactions - speculative transaction versus hedging in export/import activities - scope of assessment under section 153A in absence of incriminating material - reiteration of completed assessments versus abated assessments under section 153A

Business loss under section 37(1) - characterisation of foreign exchange/forward contract losses - application of Accounting Standard AS-11 to foreign exchange transactions - speculative transaction versus hedging in export/import activities - Whether the forex loss claimed by the assessee is allowable as business loss and not a speculative loss. - HELD THAT: - The Tribunal accepted the assessee's case that the forex/forward contract transactions were entered into as hedging arrangements incidental to its export/import business, were accounted for in compliance with AS-11 and debited to profit and loss account. Applying the tests in Sutlej Cotton Mills and following judicial precedents (including Emmsons International Ltd. and decisions of High Courts and Tribunals cited), the Tribunal held there was a direct and proximate nexus between the assessee's business and the loss, the loss was real, on revenue account and incidental to carrying on business. The transactions were not in the nature of speculative transactions as defined for disallowance; consequently the forex loss is allowable as a business expenditure under section 37(1). [Paras 7]

Forex loss allowed as business loss under section 37(1); addition disallowed.

Scope of assessment under section 153A in absence of incriminating material - reiteration of completed assessments versus abated assessments under section 153A - Whether the Assessing Officer could make additions in proceedings under section 153A where no incriminating material was found during search. - HELD THAT: - The Tribunal examined the assessment record and the search/panchanama and found no reference by the AO to any incriminating documents seized in relation to the impugned additions. Relying on judicial authority (including the reasoning in Kabul Chawla and coordinate decisions) the Tribunal held that for assessment years already completed on the date of search the AO's power to alter completed assessments under section 153A is confined to additions that can be linked to incriminating material unearthed during the search. In the absence of such seized material or any nexus identified by the AO, the additions/disallowance made in the reopened assessments could not be sustained for AY 2009-10. For AY 2010-11 (an abated year) the AO had jurisdiction to proceed under section 153A and the cross-objection on that point was dismissed accordingly. [Paras 7]

Where no incriminating material was found, additions in assessment framed under section 153A cannot be made; thus the additions for AY 2009-10 set aside, while for the abated AY 2010-11 the AO's jurisdiction to proceed under section 153A remains.

Final Conclusion: Both appeals filed by the Revenue are dismissed: the Tribunal upheld the CIT(A)'s deletion of the forex loss disallowance by treating the loss as an allowable business expenditure under section 37(1) (applying AS-11 and relevant precedents), and held that in the absence of incriminating material seized during search additions could not be sustained in the completed assessment year (2009-10); the cross-objections are disposed of accordingly (partly allowed for AY 2009-10 and dismissed for AY 2010-11).

Jurisdiction under section 153C of the Income-tax Act - Seized documents 'belonging to' versus 'pertaining to' (pre amendment vs post amendment scope of section 153C) - Requirement of recording satisfaction and handing over of seized material as condition precedent to invoke section 153C - Computation of relevant assessment years under section 153C first proviso - date of receipt/handing over of documents - Validity of assessment framed under section 144 where section 153C/153A procedures are applicable - Mandatory nature of notice under section 142(1) and requirement of notice under section 143(2) for scrutiny assessment - Prospective application of amendment to section 153C

Jurisdiction under section 153C of the Income-tax Act - Seized documents 'belonging to' versus 'pertaining to' (pre amendment scope) - Requirement of recording satisfaction and handing over of seized material as condition precedent to invoke section 153C - Validity of AO's assumption of jurisdiction under section 153C for A.Y. 2012-13 and 2013-14 - HELD THAT: - Search was conducted on 24.03.2014, prior to the amendment to section 153C; therefore the pre amendment test (seized money/assets/documents must 'belong' to the other person) applies. The seized pages (Annexure A/1 page 5 and A/2 page 3) did not bear the assessee's name nor otherwise prima facie constitute documents "belonging to" the assessee. The satisfaction relied upon by the AO impermissibly drew upon a post search statement under section 131(1A) recorded after conclusion of search; such post search information cannot substitute for documents seized during search that belong to the other person under the pre amendment provision. The statements recorded under section 132(4) did not establish that the physical papers themselves belonged to the assessee. On detailed analysis the Tribunal found no material to form the requisite belief for invoking section 153C in relation to A.Ys. 2012-13 and 2013-14 and accordingly quashed the assessments on this preliminary jurisdictional ground. [Paras 12, 13]

Assumption of jurisdiction under section 153C in A.Y. 2012-13 and 2013-14 was not justified; assessment orders for those years quashed.

Computation of relevant assessment years under section 153C first proviso - date of receipt/handing over of documents - Validity of assessment framed under section 144 when section 153C/153A procedures apply - Mandatory nature of notice under section 142(1) and requirement of notice under section 143(2) for scrutiny assessment - Validity of assessment for A.Y. 2014-15 (procedural compliance and jurisdictional prerequisites) - HELD THAT: - The AO's satisfaction note did not record satisfaction for A.Y. 2014-15 and the assessment order proceeded as if the year were a 'search year' without framing proceedings under section 153C. Where seized material is transmitted, the first proviso to section 153C requires reckoning of the relevant six assessment years with reference to the date of receipt/handing over; the AO ought to have considered the appropriate block of years and issued notices under section 153C. Further, the notice dated 03.11.2014 under section 142(1) did not properly require submission of a return within a specified time and appears to have been treated as mere collection of information; the assessee later filed a belated return under section 139(4). For a scrutiny assessment, notice under section 143(2) is mandatory where a return exists; the AO did not issue section 143(2) notice and instead completed an ex parte assessment under section 144. In view of the defective procedural steps (absence of proper section 153C satisfaction/notice procedure for the year and failure to follow mandatory notice procedure under sections 142/143 before making a best judgment assessment), the Tribunal held the A.Y. 2014-15 assessment unsustainable and quashed it. [Paras 17, 22, 31, 32]

Assessment for A.Y. 2014-15 is vitiated by failure to follow mandatory section 153C/153A procedure and by procedural defects under sections 142/143/144; the assessment order is quashed.

Final Conclusion: The Tribunal allowed the appeals of the assessee and quashed the assessment orders for A.Y. 2012-13, 2013-14 and 2014-15 on jurisdictional and procedural grounds (absence of material showing seized documents 'belonging to' the assessee for pre amendment section 153C years; and failure to follow section 153C/153A notice/handing over requirements and mandatory section 142/143 procedure for A.Y. 2014-15). The Revenue's appeal is dismissed.

Disallowance under Section 14A - apportionment under Rule 8D - shares held as stock-in-trade versus investment - computation of book profits under section 115JB - depreciation on securities - allowability of contribution to employees' pension fund - credit for tax deducted at source

Disallowance under Section 14A - apportionment under Rule 8D - shares held as stock-in-trade versus investment - Deletion of disallowance under Section 14A read with Rule 8D in respect of exempt dividend income. - HELD THAT: - The Tribunal, following its coordinate bench decision in the assessee's own earlier years and the Supreme Court's reasoning in Maxopp Investment Ltd., held that where securities are held as stock-in-trade the incidental receipt of dividend does not automatically sustain a full disallowance under section 14A. The correct approach is an apportionment of expenditure depending on facts of each case, and where the AO had applied Rule 8D and the facts showed trading character of investments, the CIT(A)'s deletion of the disallowance was not erroneous. No distinguishing decision was shown by the Revenue; accordingly the AO was directed to delete the disallowance made under Section 14A read with Rule 8D. [Paras 9]

Disallowance under Section 14A r.w. Rule 8D deleted; assessee's grounds allowed.

Computation of book profits under section 115JB - disallowance under Section 14A - Deletion of addition to book profit under section 115JB consequent to disallowance under Section 14A. - HELD THAT: - Since the disallowance under Section 14A read with Rule 8D was directed to be deleted, the related addition made to book profits for MAT computation was also not sustainable. The Tribunal therefore allowed the assessee's challenge to the inclusion of that disallowance in computing book profits under section 115JB. [Paras 9]

Addition to book profit under section 115JB deleted; assessee's ground allowed.

Credit for tax deducted at source - Direction to grant TDS credit claimed by the assessee after verification. - HELD THAT: - The Tribunal observed that the CIT(A) had issued directions regarding the TDS credit and directed the AO to allow the credit in accordance with law after verification. The matter was remitted for verification and compliance with legal provisions governing TDS credit. [Paras 10, 11]

TDS credit to be allowed by the AO after verification; ground allowed for statistical purposes.

Depreciation on securities - shares held as stock-in-trade versus investment - Deletion of addition made by AO in respect of depreciation on securities upheld. - HELD THAT: - Relying on the coordinate bench's earlier decisions in the assessee's own case and authority such as UCO Bank, the Tribunal held that the assessee's accounting treatment (consistent with RBI guidelines and mercantile system) and factual matrix did not support the AO's theoretical suspicion that depreciation earlier claimed led to understatement of profit on subsequent sale. The Tribunal found no merit in the Revenue's contention and upheld deletion of the addition. [Paras 14]

Addition in respect of depreciation on securities deleted; Revenue's ground dismissed.

Allowability of contribution to employees' pension fund - section 43B - Deletion of disallowance of contribution to Punjab and Sind Bank Employees Pension Fund Trust upheld. - HELD THAT: - The Tribunal followed its earlier findings in the assessee's own cases where similar contributions were held allowable, noting consistency of facts and precedent (including decisions of the Tribunal and authority relied upon by the CIT(A)). In absence of any change in facts, the deletion of the disallowance was sustained. [Paras 17]

Disallowance of contribution to the pension fund deleted; Revenue's ground dismissed.

Computation of book profits under section 115JB - Grounds raising additions to book profits that depended on the deleted additions were treated as otiose and dismissed. - HELD THAT: - Because the primary additions (depreciation on securities, contribution to pension fund and disallowance under section 14A) were deleted, the related grounds seeking their inclusion in computation of book profits under section 115JB no longer survived and were dismissed as moot. [Paras 18, 19]

Related grounds considered otiose and dismissed.

Final Conclusion: Appeal of the assessee allowed in part and that of the Revenue dismissed: disallowances under Section 14A r.w. Rule 8D, the addition for depreciation on securities and the disallowance of contribution to the employees' pension fund were deleted; TDS credit directed to be granted after verification; consequential grounds relating to computation of book profits under section 115JB were rendered otiose.

Protective assessment - substantive assessment - service and validity of notice under section 148 - no double assessment for the same transaction - land revenue record as evidence of ownership - quashing of re-assessment for defective reasons

Protective assessment - substantive assessment - no double assessment for the same transaction - land revenue record as evidence of ownership - Whether the addition of long-term capital gain in the hands of Mool Chand HUF could be sustained when the same transaction had been assessed on substantive basis in the hands of the five individual co-owners and Revenue had not appealed against those substantive assessments. - HELD THAT: - The Tribunal accepted the CIT(A)'s conclusion that the income on transfer of the land had been assessed on substantive basis in the hands of the five individuals and that the Assessing Officer had made protective assessments in the hands of the HUF. The Revenue did not produce any record of having preferred appeals against the CIT(A)'s orders in the individual assessments and the learned DR failed to show such appeals despite opportunities. The Tribunal also relied on land revenue records dated 28/03/2006 showing the five individuals as owners of the respective shares, and noted absence of any evidential material establishing ownership in the hands of the HUF. Earlier Tribunal orders in appeals by individual assessee(s) had quashed reassessment proceedings for defective reasons and invalid issuance/service of notice under section 148, further demonstrating that substantive assessment had stood in favour of the individuals. In these circumstances the Tribunal held that the same income could not be relitigated and assessed on substantive basis in the hands of the HUF, and found no error in the CIT(A)'s deletion of the addition. [Paras 2]

The addition of long-term capital gain in the hands of Mool Chand HUF was deleted and the Revenue's ground challenging that deletion was dismissed.

Final Conclusion: The Revenue's appeal is dismissed; the Tribunal upholds the CIT(A)'s deletion of the addition in the hands of Mool Chand HUF because the same income had been assessed substantively in the hands of the individual co-owners and there was no successful challenge by Revenue to those assessments.

Allowability of cost of improvement for freehold conversion under Section 48 - characterisation of payment for freehold conversion as part of sale consideration (improvement of title/removing impediment to transfer) - binding effect of co owner Tribunal decision on identical facts - remand for fresh adjudication of taxability on receipt v. accrual basis - consequential nature of interest under sections 234A, 234B and 234C

Allowability of cost of improvement for freehold conversion under Section 48 - characterisation of payment for freehold conversion as part of sale consideration (improvement of title/removing impediment to transfer) - binding effect of co owner Tribunal decision on identical facts - Deduction for the assessee's share of freehold conversion charges is allowable as cost of improvement (to be considered under Section 48) when capital gain is computed for A.Y. 2012-13. - HELD THAT: - The Tribunal followed its earlier Division Bench decision in ITA No. 68/Alld/2018 (concerning a co owner of the same property) and held that the freehold conversion charges were included in the agreed sale consideration and were incurred to remove an impediment to sale and to improve the title of the Nazul (leasehold) land. The registered agreement to sell expressly included an element for freehold premium/conversion and contemplated conversion as a pre condition for registration; the freehold deed was ultimately executed in favour of the existing leaseholders (sellers), confirming that the conversion improved the sellers' title. On these facts the Tribunal concluded that the conversion charges constituted cost of improvement (or otherwise deductible in computing capital gains under Section 48) and that the CIT(A)'s direction to disallow such amount departed from the law as applied in the co owner's case. The Tribunal therefore directed that the assessee be allowed his share of the conversion charges while computing capital gains for A.Y. 2012-13 and applied its earlier reasoning to the present case as the facts and property are identical. The Tribunal also observed and directed correction of indexation base errors in computing indexed cost where applicable, following the reasoning in the co owner's appeal. [Paras 6]

Allow deduction of the assessee's share of freehold conversion charges as cost of improvement for computation of long term capital gains for A.Y. 2012-13; follow Tribunal's order in ITA No. 68/Alld/2018.

Remand for fresh adjudication of taxability on receipt v. accrual basis - Taxability of interest on NHAI bonds (claimed to be included on receipt basis in A.Y. 2014-15) is not adjudicated by the Tribunal and is restored to the CIT(A) for fresh consideration. - HELD THAT: - The assessee had contended that interest income on NHAI bonds was offered on receipt basis in A.Y. 2014-15, whereas the AO had brought the interest to tax on accrual basis in the year under consideration. The CIT(A) did not decide this point. In the interest of justice the Tribunal restored this issue to the file of the CIT(A) for fresh adjudication on merits in accordance with law, directing the CIT(A) to afford the assessee proper opportunity of being heard. [Paras 7]

Issue restored to the CIT(A) for fresh adjudication on merits (allowed for statistical purposes).

Consequential nature of interest under sections 234A, 234B and 234C - Interest under sections 234A, 234B and 234C is consequential and not required to be separately adjudicated by the Tribunal. - HELD THAT: - The Tribunal observed that the challenge to levy of interest under sections 234A/B/C was consequential upon the tax assessment and did not require separate consideration. Accordingly, no independent relief on these counts was granted and the ground was dismissed. [Paras 8]

Ground challenging interest under sections 234A, 234B and 234C dismissed as consequential.

Final Conclusion: Appeal partly allowed: the Tribunal held that the assessee's share of freehold conversion charges is allowable as cost of improvement for computation of long term capital gains in A.Y. 2012-13 (following the Tribunal's decision in the co owner's case); the issue of taxability of interest on NHAI bonds is restored to the CIT(A) for fresh adjudication; claims against interest under sections 234A/B/C and a general ground were dismissed.

Unexplained cash credit - onus of proof under section 68 - corroborative evidence and creditworthiness of creditors - remand to Assessing Officer for fresh examination

Unexplained cash credit - onus of proof under section 68 - corroborative evidence and creditworthiness of creditors - remand to Assessing Officer for fresh examination - Whether the cash deposits of Rs. 55,00,000 in the assessee's bank account are to be treated as unexplained cash credit requiring addition under section 68, or are satisfactorily explained by production of sources/creditors. - HELD THAT: - The Assessing Officer recorded statements from the assessee and Mr. S. Prasanth that the impugned cash belonged to four named persons and that Mr. Prasanth had facilitated deposit and issuance of demand drafts. The Assessing Officer issued summons to the four persons who did not appear, and the AO therefore treated the deposits as unexplained cash credit. Subsequent proceedings in relation to Mr. Prasanth produced different explanations and inconsistent versions about the source of funds; the material before the Tribunal showed lack of satisfactory, corroborative evidence establishing the trail of cash, the creditworthiness of the purported creditors or their production before the AO in the assessee's proceedings. Given these contradictions and lacunae, the Tribunal did not decide the merits of the addition on the existing record but considered that the matter requires fresh and comprehensive examination by the Assessing Officer. The assessee and Mr. Prasanth were directed to place all material they rely upon before the AO, who shall afford adequate opportunity and pass an order in accordance with law. [Paras 5]

The issue is remitted to the Assessing Officer for fresh examination and adjudication after affording opportunity to the assessee and Mr. Prasanth to produce all supporting material and to comply with the AO's requirements.

Final Conclusion: The appeal is treated as partly allowed for statistical purposes and the question whether the impugned cash deposits are liable to be treated as unexplained cash credit under section 68 is remitted to the Assessing Officer for fresh consideration and decision in accordance with law.

Royalty - use of or right to use any copyright - software supplied under EULA/distribution agreements is sale of goods and not transfer of copyright - application of DTAA where its definition of royalty is more beneficial - obligation to deduct tax at source under section 195

Royalty - use of or right to use any copyright - software supplied under EULA/distribution agreements is sale of goods and not transfer of copyright - application of DTAA where its definition of royalty is more beneficial - obligation to deduct tax at source under section 195 - Payments received for supply of software under distribution/reseller/end user licence arrangements are not taxable as 'royalty' under Article 12 of the DTAA or as royalty under the Act for AY 2016-17. - HELD THAT: - The Tribunal applied the law declared by the Hon'ble Supreme Court in Engineering Analysis Centre for Excellence (and the consequent Karnataka High Court treatment) that licences granted by EULAs/distribution agreements in the facts before it do not confer any interest or right to reproduce the computer programme and therefore do not amount to transfer of copyright or a right to use the copyright within the meaning of Article 12 of the DTAA. Such transactions amount, in substance, to sale of copies/physical objects containing embedded software and not to a licence that creates an interest in the copyright. Consequently, the restricted definition of 'royalty' in the DTAA governs and, on that basis, the payments in question do not constitute royalty chargeable in India; accordingly the obligations and consequences flowing from chargeability (including deduction under section 195) do not arise. The Tribunal followed the Supreme Court precedent to decide the issue in favour of the assessee for the assessment year before it. [Paras 6]

Payments for sale/supply of software under the contractual schemes in issue are not 'royalty' and are not taxable as such for AY 2016-17; no TDS obligation arises on that basis.

Software supplied under EULA/distribution agreements is sale of goods and not transfer of copyright - ancillary support services relating to software - Ancillary support services provided in connection with the software supply are to be treated as relating to software services and not as separate taxable royalty/FTS. - HELD THAT: - The Tribunal held that the ancillary support services connected with the software supply fall within the ambit of software related services and are to be considered as part of the overall software transaction context. Having concluded that the principal supplies do not give rise to royalty, the ancillary services are likewise to be treated as relating to software and do not independently constitute royalty or attract the DTAA/royalty charge. [Paras 7]

Ancillary support services are to be regarded as software related and do not attract classification as royalty/FTS separate from the software transaction.

Final Conclusion: The appeal is allowed for AY 2016-17: payments for supply of software under the contracts before the Tribunal are not taxable as 'royalty' under the DTAA or the Act and the related ancillary support services are treated as software related; accordingly the consequences of taxability as royalty (including TDS under section 195) do not follow.

Rejection of books of account under section 145(3) - reliance on variation in electricity consumption for estimating unaccounted production - industrial norm of 15% variation in electricity consumption - consistency principle where subsequent assessment years decide the same issue - right to confront and cross-examine sources of information relied upon by Revenue - estimation of income under section 144

Rejection of books of account under section 145(3) - reliance on variation in electricity consumption for estimating unaccounted production - industrial norm of 15% variation in electricity consumption - right to confront and cross-examine sources of information relied upon by Revenue - consistency principle where subsequent assessment years decide the same issue - Assessee's books of account could not be rejected and additions based on alleged unaccounted production and investment computed from variation in electricity consumption were unsustainable. - HELD THAT: - The Tribunal held that the Assessing Officer's rejection of books and consequent estimation of unaccounted production and investment based solely on variations in electricity consumption was not sustainable. The decision relied on a coordinate-bench ruling and a multi-member committee report which established that up to 15% variation in electricity units per metric ton (worked out on a yearly average) is an acceptable industrial norm and does not warrant rejection of books. The Tribunal applied the principle of consistency where the same issue had been decided for a subsequent year in favour of the assessee and therefore it would be inappropriate to take a contrary technical view for the year under consideration. Further, the Tribunal noted precedents and authority rejecting a universal standard of electricity consumption for imputing production and also underlined the legal infirmity in relying on information without affording the assessee an opportunity to confront and cross-examine the persons or material relied upon. For these reasons the additions computed by reference to electricity-consumption-based estimates were deleted and the books accepted. [Paras 8, 9, 10, 11]

Assessee's appeal allowed; books of account accepted and additions on account of alleged unaccounted production and investment deleted.

Final Conclusion: Following coordinate-bench precedents and a committee finding that a 15% variation in electricity consumption per metric ton is an industrial norm, and noting the absence of opportunity to confront sources relied upon by the Revenue, the Tribunal accepted the assessee's books for AY 2011-12 and deleted the additions made on the basis of electricity-consumption-driven estimates.

Notice under section 148 for reopening of assessment - Reassessment under section 147 - Change of opinion - Reason to believe - First proviso to section 147 - disclosure of material facts - Tangible material / live link requirement for reopening - Quashing of reopening notice

Notice under section 148 for reopening of assessment - Reassessment under section 147 - Change of opinion - Tangible material / live link requirement for reopening - First proviso to section 147 - disclosure of material facts - Validity of issuance of notice under section 148 and reopening of assessment under section 147 for assessment year 2009-2010. - HELD THAT: - The Tribunal examined the reasons recorded by the Assessing Officer for reopening and found that the particulars relied upon were available and placed before the AO during the original assessment completed under section 143(3). The Assessing Officer did not demonstrate any failure by the assessee to fully and truly disclose material facts as required by the first proviso to section 147. Relying on the established principle that a reassessment must be founded on tangible material having a live link with the formation of the AO's belief (as articulated in the decision referred to in the judgment), the Tribunal held that mere change of opinion by the AO, without any fresh material coming into possession, does not confer jurisdiction to reopen the assessment. In the absence of new material or any non-disclosure of facts, the reassessment proceedings were held to be bad in law.

Notice under section 148 and reopening of assessment under section 147 quashed as being founded on mere change of opinion; reassessment held invalid.

Final Conclusion: Appeal allowed; the notice under section 148 and consequent reassessment under section 147 for assessment year 2009-2010 are quashed for lack of jurisdiction as the reopening was based on a mere change of opinion without fresh material or non-disclosure of material facts.

Right to cross-examination - principles of natural justice - opportunity to be heard - quashing of appellate order - remand for fresh consideration

Right to cross-examination - principles of natural justice - quashing of appellate order - Denial of the petitioner's request to cross-examine six witnesses was contrary to the principles of natural justice and the impugned appellate order upholding that denial was liable to be set aside. - HELD THAT: - The petitioner sought permission to cross-examine six witnesses whose statements were relied upon in the showcause proceedings. The Adjudicating Authority declined the request and the Appellate Authority upheld that denial. The Court accepted the contention that denial of an opportunity to cross-examine witnesses relied upon in support of the case against the petitioner offended the principles of natural justice. Having found that the petitioner was denied a fair opportunity to test the evidence against him, the Court concluded that the impugned appellate order could not stand and was liable to be quashed. [Paras 5, 7]

Writ petition allowed; impugned order dated 30.09.2020 quashed and set aside for having upheld the denial of the petitioner's right to cross-examination.

Opportunity to be heard - remand for fresh consideration - The matter was remitted to the Adjudicating Authority with a direction to permit the petitioner to cross-examine the six witnesses whose cross-examination had earlier been denied. - HELD THAT: - Respondents, through their counsel, stated their readiness to permit the petitioner to cross-examine the six witnesses. In the exercise of supervisory jurisdiction, the Court directed that the Adjudicating Authority grant the opportunity for cross-examination which had been refused during the original proceedings culminating in the order dated 22.04.2020. The Court recorded an expectation of cooperation and avoidance of unnecessary adjournments by the petitioner during the proceedings before the Adjudicating Authority. [Paras 5]

Proceedings remitted to the Adjudicating Authority with directions to afford the petitioner the opportunity to cross-examine the six witnesses; petitioner to cooperate and not seek unnecessary adjournments.

Final Conclusion: The writ petition is allowed: the impugned appellate order is quashed and the matter is remanded to the Adjudicating Authority with directions to allow the petitioner to cross-examine the six witnesses whose examination was earlier denied, subject to the petitioner's cooperation and avoidance of frivolous adjournments.

Power to issue show cause notice - jurisdiction - preliminary issue - opportunity of hearing - challenge to adjudicatory decision

Power to issue show cause notice - jurisdiction - preliminary issue - Adjudicating authority to determine, as a preliminary issue, whether it has jurisdiction to adjudicate the Show Cause Notice dated 11th December, 2020. - HELD THAT: - The petition challenging the Show Cause Notice raised the contention that the Principal Additional Director General of the Directorate of Revenue Intelligence lacked power to issue the Show Cause Notice and to adjudicate and recover penalties/duties. The respondents have undertaken that the adjudicating authority will decide the question of its own jurisdiction as a preliminary issue after affording the petitioner an opportunity of hearing. In view of the respondents' undertaking and the petitioner's election not to press the writ, the court directed that the issue of jurisdiction be decided by the adjudicating authority at the outset, preserving the petitioner's right to challenge that decision thereafter.

Writ petition disposed with direction that the adjudicating authority shall decide the jurisdictional objection as a preliminary issue after hearing the petitioner; the petitioner may thereafter challenge that decision along with the Show Cause Notice in accordance with law.

Final Conclusion: The writ petition is disposed of by directing the adjudicating authority to decide the jurisdictional objection as a preliminary issue after giving the petitioner an opportunity of hearing; the petitioner remains entitled to challenge the adjudicating authority's decision together with the Show Cause Notice in accordance with law.

Infructuous writ petition - efflux of time - perishable goods - no adjudication of grounds - right to pursue statutory remedies - procedural compliance

Infructuous writ petition - perishable goods - efflux of time - Writ petition disposed of as infructuous because the subject goods were highly perishable and, by efflux of time, the disputes raised no longer subsist. - HELD THAT: - The Court accepted the petitioner's submission that following earlier orders dated 28.02.2014, an order had been passed on 11.04.2014 and that, in the intervening period, the imported goods - being highly perishable - and the lapse of time rendered the grievances raised in the petition moot. Having found that the substantive disputes no longer exist due to the perishable nature of the goods and efflux of time, the Court concluded that no further adjudication of the grounds raised in the writ petition was necessary and accordingly disposed of the petition as infructuous. [Paras 1, 2]

Petition disposed of as infructuous; no adjudication on the merits as the disputes no longer subsist.

Right to pursue statutory remedies - procedural compliance - Petitioner retains the right to initiate or pursue any proceedings in accordance with law and to submit objections and defend its case if disputes are raised. - HELD THAT: - While disposing the writ petition as infructuous, the Court clarified that any further proceedings must follow the procedures prescribed by law. The petitioner is entitled to raise objections and defend its case in the appropriate statutory forum, thereby preserving procedural remedies despite dismissal of the writ on grounds of mootness. [Paras 2]

Petitioner may pursue appropriate statutory remedies and submit objections in accordance with law; no order as to costs.

Final Conclusion: Writ petition dismissed as infructuous on the ground that the subject import was highly perishable and the dispute ceased to subsist by efflux of time; petitioner remains free to pursue lawful remedies and to file objections and defend any future proceedings.

Validity of show cause notice issued by the Directorate of Revenue Intelligence - Imposition of penalty under Section 114 of the Customs Act - Proceedings void ab initio for lack of jurisdiction - Doctrine of precedent and binding effect of a three-Judge Bench - Board Instruction cannot override Supreme Court decision

Validity of show cause notice issued by the Directorate of Revenue Intelligence - Proceedings void ab initio for lack of jurisdiction - Imposition of penalty under Section 114 of the Customs Act - The show cause notice issued by the DRI was without jurisdiction and the penalty levied pursuant thereto was invalid. - HELD THAT: - The Tribunal applied the binding decision of the Hon'ble Supreme Court in M/s. Canon India Private Limited v. Commissioner of Customs, wherein it was held that proceedings initiated by the DRI by issuing show cause notices in the matters before that Court were invalid for want of authority. Relying on that precedent, and rejecting the contrary force of a subsequent Board Instruction, the Tribunal held that an Instruction cannot override the decision of a three-Judge Bench of the Apex Court. Because the Show Cause Notice impugned in this appeal was issued by the DRI without jurisdiction, the consequent adjudication and the penalty proposed/levied cannot be sustained and are void ab initio. [Paras 4, 5]

The penalty and the proceedings founded on the DRI Show Cause Notice are invalid; no demand or penalty can be sustained.

Doctrine of precedent and binding effect of a three-Judge Bench - Board Instruction cannot override Supreme Court decision - A subsequent Board Instruction cannot supplant or override a binding three Judge Bench decision of the Supreme Court. - HELD THAT: - The Tribunal noted that the Board's Instruction No. 04/2021-Customs was issued in respect of separate show cause notices but in any event cannot negate or override the legal effect of the three Judge Bench decision of the Supreme Court declaring the DRI-initiated proceedings invalid. Consequently, administrative instructions could not confer jurisdiction or cure the legal invalidity identified by the Apex Court. [Paras 4]

The Board Instruction does not validate the otherwise invalid DRI proceedings and is ineffective to sustain the demand or penalty.

Proceedings void ab initio for lack of jurisdiction - The impugned remand order of the First Appellate Authority was set aside and the appeal allowed. - HELD THAT: - Having concluded that the foundational Show Cause Notice was without jurisdiction and that the penalty could not stand, the Tribunal found no basis to remit the matter for de novo adjudication. The First Appellate Authority's order allowing the Revenue's appeal by remand was therefore set aside as it sought to continue proceedings which are void ab initio. [Paras 6]

Impugned order set aside; appeal allowed with consequential benefits as per law.

Final Conclusion: The appeal is allowed: the DRI-issued Show Cause Notice and consequent penalty are invalid in view of the Supreme Court's binding decision; the Board Instruction cannot cure that invalidity; the First Appellate Authority's remand is set aside and the appellant is entitled to consequential relief.

Smuggled goods - burden of proof under Section 123 of the Customs Act, 1962 - defacement/tampering of serial number as inference of smuggling - mis-declaration of goods - seizure and confiscation of imported goods - redemption/claim of ownership of seized goods

Mis-declaration of goods - defacement/tampering of serial number as inference of smuggling - smuggled goods - seizure and confiscation of imported goods - Whether the gold bar was smuggled goods and liable to seizure and confiscation - HELD THAT: - The Tribunal found undisputed mis declaration of the parcel as "docs and samples" despite it containing a foreign marked gold bar and that no supporting documents were furnished at booking. The gold bar bore foreign hallmarks and its serial number was hammered/defaced; the court held that such defacement materially impedes tracing whether customs duty had been paid and therefore raises a strong inference of smuggling. Documentary and testimonial verifications revealed inconsistencies and doubts regarding the invoices presented; combined with concealment at booking and tampering of the serial number, the materials satisfied the department's case that the goods were smuggled and liable to seizure and confiscation. [Paras 5]

The gold bar was held to be smuggled goods and liable to seizure and confiscation; the department's allegations in the show cause notice were sustained.

Burden of proof under Section 123 of the Customs Act, 1962 - redemption/claim of ownership of seized goods - Whether the appellants discharged the burden of proving that the seized gold was not smuggled goods under Section 123 and were entitled to redemption - HELD THAT: - Section 123 places the burden on the claimant to prove that goods seized in reasonable belief of being smuggled are not smuggled goods. The Tribunal examined the invoices, ledger entries, bank transactions and statements of sellers and found the invoices and accounts to be doubtful and inconsistent: the supplier's sales book did not support the asserted invoice serial, the seller could not identify the specific bar or explain the tampered serial number, VAT/CST treatment and missing mandatory particulars raised further doubts, and bank movements indicated post detention payments. Given these infirmities and the appellants' failure to produce contemporaneous, reliable documents evidencing duty payment and lawful possession at the time of transport, the appellants failed to discharge the statutory burden and therefore were not entitled to redemption. [Paras 5]

The appellants did not discharge the burden under Section 123 and their claim for redemption/ownership was rejected.

Final Conclusion: The Tribunal upheld the findings of the authority below that the gold bar was smuggled, the appellants failed to discharge the burden under Section 123 of the Customs Act, 1962, and consequently the order of seizure and confiscation was sustained; both appeals were dismissed.

Oppression and mismanagement - interim stay of rights issue - balance of convenience - prima facie case - fiduciary duty of directors - proper purpose doctrine

Interim stay of rights issue - balance of convenience - prima facie case - Whether the interim relief by way of stay of the rights issue should be granted to the petitioners in a petition under Section 241-242. - HELD THAT: - The Tribunal applied the established interim-relief test requiring consideration of prima facie case, absence of frivolity, and the balance of convenience. The Company, a private limited concern, had historically raised loans from acquaintances and relatives and the genuineness of those loans was not disputed. The Company had provided corporate guarantee and pledged company property in relation to loans obtained for the petitioner in his personal capacity; bank action under SARFAESI had been initiated and repayment defaults existed. Funds were held to be necessary to protect the Company from legal action and to meet business exigencies, and the rights issue was offered to all shareholders on the same terms. Having weighed the parties' submissions (including reliance on precedents concerning improper purpose and fiduciary duty), the Tribunal found that, at the interim stage, the balance of convenience lay with the Company and that there was no justification to keep the rights issue in abeyance. The Tribunal clarified that this interim rejection does not express any opinion on the merits of the substantive claims under Sections 241-242. [Paras 7, 8, 9, 10]

Interim prayer for stay of the rights issue rejected; interim relief at prayers 24(i)(a) and 24(i)(b) refused and interim order vacated.

Final Conclusion: The petitioners' application for interim relief to stay the rights issue is dismissed; the Tribunal refused to keep the rights issue in abeyance while reserving adjudication on merits of the Section 241-242 petition.

Scheme of Amalgamation - Dispensation of meetings of shareholders and creditors - Consent affidavits - Unanimous shareholder consent - Majority by value of creditors - Valuation and share exchange ratio - Service of notices to statutory authorities under Section 230(5) and Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016

Scheme of Amalgamation - Dispensation of meetings of shareholders and creditors - Unanimous shareholder consent - Dispensation of the meeting of equity shareholders of both applicant companies - HELD THAT: - The Tribunal examined the affidavits of consent filed by all equity shareholders of the Applicant-Transferor Company and the Applicant-Transferee Company and, on that basis, dispensed with holding the meetings of equity shareholders of both companies in relation to the proposed Scheme of Amalgamation. The decision rests on the presence of consent affidavits from all respective equity shareholders recorded on the application materials and placed before the Tribunal. [Paras 14]

Meeting of equity shareholders of both Applicant-Transferor and Applicant-Transferee Companies dispensed with.

Dispensation of meetings of shareholders and creditors - No secured creditors - Non-convening of meetings of secured creditors of the Applicant Companies - HELD THAT: - The Tribunal recorded that the Applicant Companies have no secured creditors as certified by the Chartered Accountants and therefore meetings of secured creditors are not required to be convened in connection with the proposed Scheme of Amalgamation. [Paras 14]

Meetings of secured creditors of the Applicant Companies are not required to be convened.

Dispensation of meetings of shareholders and creditors - No unsecured creditors - Non-convening of meeting of unsecured creditors of the Applicant-Transferor Company - HELD THAT: - The Tribunal accepted the certified statement that the Applicant-Transferor Company has no unsecured creditors and accordingly held that no meeting of unsecured creditors of the Applicant-Transferor Company need be held for the Scheme of Amalgamation. [Paras 14]

Meeting of unsecured creditors of the Applicant-Transferor Company is not required to be convened.

Majority by value of creditors - Dispensation of meetings of shareholders and creditors - Dispensation of the meeting of unsecured creditors of the Applicant-Transferee Company - HELD THAT: - The Tribunal noted that more than 90% (by value) of the unsecured creditors of the Applicant-Transferee Company have filed affidavits consenting to the Scheme. On the basis of those consents and the certified list of unsecured creditors, the Tribunal dispensed with holding the meeting of unsecured creditors of the Applicant-Transferee Company. [Paras 14]

Meeting of unsecured creditors of the Applicant-Transferee Company dispensed with.

Service of notices to statutory authorities under Section 230(5) and Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - Procedural compliance - Directions regarding notice to statutory authorities and filing of affidavit of service - HELD THAT: - The Tribunal directed compliance with the procedural requirement to serve notices in Form CAA.3 with the disclosures under Rule 6 to specified statutory authorities (Regional Director, Registrar of Companies, Income Tax authorities, Official Liquidator, Reserve Bank of India), allowing a 30-day period for representations. The notices are to be sent forthwith by registered post, speed post, courier, or by hand at the offices of those authorities as mandated by sub-rule (2) of Rule 8, and the Applicant Companies must file an affidavit confirming service within 30 days of service. [Paras 14]

Applicants directed to serve statutory notices in Form CAA.3 with required disclosures and to file affidavit confirming service within 30 days.

Final Conclusion: The Company Application is allowed: meetings of equity shareholders and the specified creditor meetings are dispensed with as directed; statutory notices in Form CAA.3 with disclosures shall be served on the listed authorities with a 30 day period for representations and an affidavit of service filed; the application is disposed of accordingly.

Sale of corporate debtor as a going concern - mode of sale under the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (Schedule I) - obligation of successful bidder to pay balance sale consideration within stipulated period - liquidator's duty to execute certificate of sale and deliver assets on receipt of full consideration - direction to provide audited financial statements and project documents (tribunal compliance direction)

Sale of corporate debtor as a going concern - mode of sale under the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (Schedule I) - obligation of successful bidder to pay balance sale consideration within stipulated period - liquidator's duty to execute certificate of sale and deliver assets on receipt of full consideration - Completion of the sale of intangible assets of the corporate debtor as a going concern and the obligations of the parties for effecting transfer. - HELD THAT: - The Tribunal found no dispute about the conduct of the e-auction, the Special Terms & Conditions in the tender documents or that the impleading respondents were declared successful bidders. The Liquidation Regulations (Schedule I) require the highest bidder to pay the balance sale consideration within the period prescribed after being invited to do so; upon payment in full the sale stands completed, the liquidator must execute the Certificate of Sale or sale deed and deliver the assets in the manner specified in the terms of sale. The auction in this case concluded on 09.03.2020, the successful bidders have paid 25% but have not paid the balance; accordingly it is incumbent on the successful bidders to make the balance payment and on completion the liquidator is to execute the necessary sale documentation and deliver assets as per the advertised terms. [Paras 6, 9, 10, 11]

Both parties are directed to take necessary steps for completion of the sale in terms of the Liquidation Regulations and the advertised terms; on payment of the full amount the sale shall stand completed and the liquidator shall execute the Certificate of Sale and deliver the assets.

Direction to provide audited financial statements and project documents (tribunal compliance direction) - adjustment of amounts received from arbitration receivables and works-in-progress against bid consideration - Whether the liquidator must first comply with the Tribunal's earlier direction to furnish audited financials and project documents and whether amounts recovered after declaration of successful bidder must be adjusted against bid consideration before confirmation of sale. - HELD THAT: - The Tribunal recorded that it had earlier directed the liquidator to provide audited financial statements up to 30.09.2020 and copies of agreements and details of receivables until that date. The successful bidders had sought adjustment of amounts received from arbitration receivables and works-in-progress towards the balance consideration; that prayer had been dismissed in IA No. 843/2020. The present application was disposed by directing completion of the sale in accordance with the Liquidation Regulations and the tender terms on payment of the balance; the Tribunal did not accede to withholding confirmation of sale pending further compliance by the liquidator but noted the prior direction. [Paras 7, 8, 10]

The Tribunal reiterated the prior direction as a matter of record but disposed of the present application by directing completion of the sale on payment of the balance; it did not order that confirmation be withheld pending further compliance beyond the directions already issued in IA No. 843/2020.

Final Conclusion: IA No. 754/2020 is disposed of by directing both parties to complete the sale in accordance with the Liquidation Process Regulations and the terms of sale; upon payment of the full sale consideration the liquidator shall execute the Certificate of Sale and deliver the assets to the successful bidder, with the Tribunal's earlier direction regarding provision of financial statements and project documents recorded but not made a precondition to completing the sale in this order.

Locus standi of homebuyers association to challenge admission of claim - definition of "claim" under the Insolvency and Bankruptcy Code - effect of an arbitral award's payment mechanism on the quantum and admission of a claim in insolvency - limited role of the Resolution Professional in verification and collation of claims

Locus standi of homebuyers association to challenge admission of claim - The Applicant association of homebuyers has locus to file and maintain the application contesting admission of the 1st Respondent's claim. - HELD THAT: - The Tribunal held that the association of homebuyers is a proper party since its voting rights in the Committee of Creditors are alleged to be adversely affected by the admitted claim which reduces their voting share. A dispute regarding voting rights arising from admission of a creditor's claim suffices to confer locus for seeking relief under Section 60(5) of the IBC, 2016. [Paras 28]

Application is maintainable as the Applicants have locus to challenge the admission of the 1st Respondent's claim.

Effect of an arbitral award's payment mechanism on the quantum and admission of a claim in insolvency - definition of "claim" under the Insolvency and Bankruptcy Code - The 1st Respondent's claim, crystallised by the arbitral award, is a claim under the IBC and is not limited or nullified by the Award's provision as to payment from the "Remainder Amount"; admission of the claim by the Resolution Professional is legal and tenable. - HELD THAT: - The Tribunal examined the arbitral award and observed that the Award (paras 9.64-9.66) crystallised the amount payable by the Corporate Debtor to the 1st Respondent and set out the manner of payment. Reading the Award together with the statutory definition of "claim" in Section 3(6) IBC, 2016, (which includes rights to payment whether disputed or secured or unsecured), the Tribunal held that a provision in the SSA/Award describing the source or mechanism of payment (the "Remainder Amount") does not alter or dilute the right to payment established by the Award. To treat the Award's payment-mechanism clause as limiting the admitted quantum would amount to materially changing the Award. Consequently, the Resolution Professional's admission of the 1st Respondent's claim for the crystallised amount is lawful and tenable. [Paras 38, 39, 40, 41]

The 1st Respondent's claim, as crystallised by the arbitral award, is a valid "claim" under the IBC and its admission for the stated quantum is legal; the contention that entitlement is limited to the "Remainder Amount" is rejected.

Limited role of the Resolution Professional in verification and collation of claims - The Resolution Professional's powers are confined to verifying and collating claims and do not extend to adjudicating the merits of a claim. - HELD THAT: - Relying on the principles reiterated from higher authority and the scheme of the Code, the Tribunal noted that the Resolution Professional acts within the limited remit of verification and collation of claims and is not vested with adjudicatory powers to determine disputed legal entitlement beyond such verification. This principle informs the Tribunal's approach to the actions taken by the 2nd and 3rd Respondents in admitting and handling the 1st Respondent's claim. [Paras 25, 26, 40]

The Resolution Professional acted within the limited statutory role of verifying and collating claims; the RP is not an adjudicatory authority to decide the substantive correctness of the claim beyond verification.

Related party status - The question whether the 1st Respondent is a Related Party to the Corporate Debtor is not decided by this Bench in the present order and remains subject to appellate adjudication. - HELD THAT: - The Tribunal recorded that it had earlier held the 1st Respondent was not a Related Party (Order dated 03.01.2020) but observed that the matter is currently sub judice before the Hon'ble NCLAT in an appeal filed by the Applicant. Given the pending appeal, this Tribunal expressly refrained from expressing any fresh opinion on the related party issue in the present proceeding. [Paras 13, 29]

The related party issue is left to be decided by the appellate forum and is not addressed substantively in this order.

Final Conclusion: The Tribunal dismissed the Application: the homebuyers' association has locus to challenge admission of the creditor's claim, but the contention that the arbitral award limits the admitted quantum to the "Remainder Amount" was rejected - the arbitral award crystallises a valid claim under the IBC and the Resolution Professional's admission of that claim was held to be legal and tenable; the related party issue remains for the appellate forum.

Binding effect of a final tribunal decision - doctrine of finality of judicial decisions - limited remand for fresh consideration - administrative appellate remedy

Binding effect of a final tribunal decision - limited remand for fresh consideration - Appellate authority to reconsider its order in the light of a tribunal decision that has attained finality and whether a limited remand is appropriate instead of relegating the petitioner to an alternative appellate remedy at this stage. - HELD THAT: - The writ petition challenged the Commissioner (Appeals-III)'s refusal to treat the Regional BENCH CESTAT, Allahabad decision in ICS Foods Pvt. Ltd. as binding on the ground that the department had filed an appeal to the Supreme Court. The petitioner later placed on record the Supreme Court order dismissing that appeal, establishing that the CESTAT decision had attained finality. The Court found it unnecessary to insist that the petitioner first pursue the statutory appellate remedy before the Additional Secretary. In the interest of justice the Court directed a limited remand to the Commissioner (Appeals-III) to revisit his earlier order in the light of the now-final CESTAT decision; if the CESTAT decision applies and benefits the petitioner, the Commissioner may reverse his earlier order, otherwise he may pass a fresh order upon reasons, after which the petitioner may pursue the statutory appeal. The remand is confined to reconsideration in light of the finality of the CESTAT decision, with other contentions on merits kept open for determination on remand. The Commissioner (Appeals-III) was asked to make an honest endeavour to decide the matter preferably within one month. [Paras 2, 4, 6, 7]

Writ petition disposed by directing a limited remand to the Commissioner (Appeals-III) to reconsider his order in the light of the CESTAT decision now held to be final; contentions on merits limited to the remand kept open; timeline prescribed.

Final Conclusion: The High Court disposed of the writ petition by ordering a limited remand to the Commissioner (Appeals-III) to revisit his decision in view of the CESTAT decision which has attained finality; if that decision benefits the petitioner the Commissioner may reverse his earlier order, otherwise a fresh order may be passed and the petitioner may then pursue the statutory appeal.

Time bar for remittance under Form SVLDRS 3 - condonation of delay - extension of time on account of COVID 19 - judicial discretion to permit late payment subject to conditions

Time bar for remittance under Form SVLDRS 3 - condonation of delay - extension of time on account of COVID 19 - Petitions for a direction to respondents to accept remittance under Form SVLDRS 3 were dismissed for unexplained and prolonged delay in payment. - HELD THAT: - The petitioners sought directions to permit remittance of amounts quantified in Form SVLDRS 3 issued on specified dates. The statutory/operative period for remittance was 30 days from receipt of Form 3, which had been extended by the Board only up to 30.06.2021. The present writ petitions were filed long after the expiry of the extended period (a delay of approximately ten months). The affidavits did not furnish any plausible, case specific explanation for the delay beyond a general statement of hardship due to the COVID 19 pandemic. The court observed earlier orders in other petitions where late remittance was permitted subject to payment of interest and application to the Board for condonation; however, in the present matters the unexplained and lengthy delay disentitled the petitioners to equitable relief. In consequence, the court declined to exercise its discretion to condone the delay or direct acceptance of the late payments.

Writ petitions dismissed for want of merit on account of long unexplained delay; connected miscellaneous petitions dismissed; no costs.

Final Conclusion: The High Court dismissed the batch of writ petitions seeking directions to accept late remittances under Form SVLDRS 3, holding that the prolonged unexplained delay (despite a Board extension to 30.06.2021) precluded equitable relief; petitions and connected misc. matters dismissed with no costs.

Refund claim under Section 104 of the Finance Act, 2017 - timeliness of refund claim - requirement of documentary proof of payment for refund - effect of production of additional evidence during appellate proceedings - exemption by Notification No.41/2016 for long term lease services

Refund claim under Section 104 of the Finance Act, 2017 - timeliness of refund claim - Whether the refund claim was filed within the period prescribed under Section 104 and thus maintainable - HELD THAT: - The Tribunal noted that Section 104 provided for exemption and prescribed that refund claims were to be filed within six months from the date on which the Finance Act, 2017 came into force. The appellant filed the refund claim on 26.09.2017, which the Tribunal found to be within the prescribed time. The Court recorded that the refund arose consequent to the introduction of Section 104 and that the claim was submitted within the statutory period prescribed for such refunds. [Paras 6]

The refund claim was filed within time and is maintainable under Section 104.

Requirement of documentary proof of payment for refund - effect of production of additional evidence during appellate proceedings - exemption by Notification No.41/2016 for long term lease services - Whether rejection of the refund on the ground of non production of invoices/bills was justified where the appellant produced challans initially and subsequently produced invoices and a certificate from KINFRA during the appeal - HELD THAT: - The Tribunal examined the material on record and found that although the Original Authority rejected the refund for alleged non submission of requisite invoices, the appellant had originally produced challans and worksheets showing payment. During the pendency of the appeal, the appellant furnished the invoices/bills issued by KINFRA evidencing payment of service tax and a certificate from KINFRA certifying non availing of CENVAT credit and that KINFRA had paid the service tax to the Government. The Tribunal held that these documents established payment of service tax and that there was no justification for rejecting the refund claim on the ground relied upon by the lower authorities. The Tribunal accordingly set aside the impugned order and allowed the appeal. [Paras 6, 7]

Rejection of the refund claim for non production of invoices was unjustified; production of invoices, challans and KINFRA's certificate during the appeal established the entitlement to refund and the appeal is allowed.

Final Conclusion: The impugned order rejecting the refund claim is set aside: the refund claim was filed within the statutory period under Section 104 and, on the material now on record (challans, invoices and KINFRA's certificate), the appellant has established payment of service tax and entitlement to the refund; the appeal is allowed.

Mandatory pre-deposit under Section 35F of the Central Excise Act - treatment of deposit towards confirmed demand as compliance of pre-deposit - effect of payment made under Sabka Vishwas (Legacy Dispute Resolution) Scheme on pre-deposit requirement - debit to CENVAT account as compliance with pre-deposit - remand for adjudication on merits without insisting further pre-deposit

Mandatory pre-deposit under Section 35F of the Central Excise Act - treatment of deposit towards confirmed demand as compliance of pre-deposit - debit to CENVAT account as compliance with pre-deposit - Deposit of Rs. 5,74,103 made by the appellant towards the service tax demand should have been treated as compliance of the mandatory pre-deposit required for entertaining the appeal. - HELD THAT: - The Tribunal examined the Commissioner (Appeals)'s finding that the appellant had not complied with the mandatory pre-deposit because the payment was made after applying under the Sabka Vishwas Scheme and after the scheme deadline. The Tribunal held that the payment was made towards the service tax confirmed by the Order in Original dated 24.06.2019 and therefore ought to have been treated as satisfying the pre deposit requirement. The Commissioner (Appeals) had issued reminders for online pre deposit despite the appellant having paid an amount in excess of the 7.5% threshold of the total tax demand prescribed by Section 35F. The Tribunal also observed that even if the payment resulted from a debit to the CENVAT account, such debit can constitute sufficient compliance with the pre deposit obligation. Consequently, the view that the mandatory pre deposit was not complied with was unsustainable. [Paras 4]

The finding that mandatory pre deposit was not complied with is set aside and the payment of Rs. 5,74,103 is to be treated as compliance with the pre deposit requirement.

Effect of payment made under Sabka Vishwas (Legacy Dispute Resolution) Scheme on pre-deposit requirement - remand for adjudication on merits without insisting further pre-deposit - Whether the appeal should be decided on merits without insisting on any further pre deposit. - HELD THAT: - Having held that the amount already paid by the appellant satisfied the pre deposit requirement, the Tribunal directed that the Commissioner (Appeals) should not insist on any additional pre deposit. The matter was remanded to the Commissioner (Appeals) with a direction to decide the appeal on its merits without calling for further pre deposit, notwithstanding the appellant's failed attempt to avail benefits under the Sabka Vishwas Scheme due to delayed payment. [Paras 4]

The matter is remanded to the Commissioner (Appeals) for decision on merits without insisting on any further pre deposit.

Final Conclusion: Impugned order set aside to the extent it dismissed the appeal for non compliance of pre deposit; appeal allowed by way of remand with direction that the Commissioner (Appeals) decide the case on merits without insisting on further pre deposit.

Refund of unutilised cenvat credit on exported services - condition that recipient of service be located outside India under Rule 6A(1)(b) of Service Tax Rules, 1994 - place of provision of services determined by location of service recipient under Rule 3 of Place of Provision Rules - receipt of payment in convertible foreign exchange including remittance routed through a third party - eligibility of input service: works contract/renovation as input service - interest on delayed sanction of refund where refund not granted within three months

Refund of unutilised cenvat credit on exported services - condition that recipient of service be located outside India under Rule 6A(1)(b) of Service Tax Rules, 1994 - place of provision of services determined by location of service recipient under Rule 3 of Place of Provision Rules - receipt of payment in convertible foreign exchange including remittance routed through a third party - Entitlement to refund of cenvat credit on services claimed as exported during the relevant periods - HELD THAT: - The appellant provided sourcing/support services under agreements with entities located outside India and, pursuant to a joint-venture agreement, raised invoices on the JV entity. The Tribunal found on the contractual record that the services were rendered to the foreign contracting parties as per the sourcing agreements and that the place of provision falls at the location of the service recipient under Rule 3. The appellant also received foreign inward remittances in convertible foreign exchange through a designated bank account pursuant to the JV arrangement and the FIRCs described the remittance as payment for the sourcing services. Routing of payment through a third party outside India did not disentitle the appellant from export benefit. Applying these findings, the Tribunal held that the conditions in Rule 6A(1)(b) and the place-of-provision requirement were satisfied and that the refund of unutilised cenvat credit on the exported services was allowable for the periods in dispute. [Paras 6]

Refund of unutilised cenvat credit on the exported services is allowed.

Eligibility of input service: works contract/renovation as input service - Whether works contract services and insurance auxiliary services used by the appellant qualify as eligible input services for claiming cenvat credit - HELD THAT: - On examination of invoices and the purpose of the works contract services, the Tribunal concluded that the services were used for renovation/modernisation of premises occupied by the appellant and that those premises were employed in providing the output services. Reliance was placed on departmental guidance that inputs used in modernisation, renovation or repair are credit-eligible and on relevant authority reaching a similar conclusion. Accordingly, the works contract service was held to be an eligible input for cenvat credit. The claim relating to Insurance Auxiliary Service was not pressed by the appellant due to small amount and absence of invoice, and therefore not granted. [Paras 6]

Works contract service accepted as eligible input service; refund claim for Insurance Auxiliary Service not pressed and not allowed.

Interest on delayed sanction of refund where refund not granted within three months - Entitlement to interest on delayed refund - HELD THAT: - Applying the principle in Ranbaxy and subsequent authorities, the Tribunal held that interest becomes payable where a refund is not sanctioned within the statutory three-month period from receipt of the refund application. The Tribunal observed that delay beyond that period attracts interest and followed apex court and High Court precedents recognizing entitlement to interest on delayed refunds. Consequently, the appellant was held entitled to interest on the delayed sanction of the refund amounts allowed. [Paras 6]

Appellant entitled to interest on delayed sanction of the refund.

Final Conclusion: The impugned orders rejecting the refund claims are set aside and the appeals are allowed insofar as refund of cenvat credit on exported services and credit for works contract services are concerned; the claim for Insurance Auxiliary Service was not pressed and remains excluded; appellant is also entitled to interest for the delayed grant of refund.

Time bar / limitation of appeal - Section 85(3) of the Finance Act, 1944 - limitation for filing appeal before Commissioner (Appeals) - exclusion of time consumed in High Court proceedings from limitation - delay in obtaining certified copy and its effect on limitation

Time bar / limitation of appeal - Section 85(3) of the Finance Act, 1944 - limitation for filing appeal before Commissioner (Appeals) - exclusion of time consumed in High Court proceedings from limitation - delay in obtaining certified copy and its effect on limitation - Whether the appeals filed on 14.08.2018 against the adjudication order dated 27.01.2017 were barred by limitation under Section 85(3) of the Finance Act, 1944. - HELD THAT: - The Tribunal applied Section 85(3) of the Finance Act, 1944 which prescribes filing before the Commissioner (Appeals) within 60 days of receipt of the adjudication order, with a possible extension of 30 days on showing sufficient cause. The adjudication order was dated 27.01.2017. Although the appellants challenged that order before the High Court, the High Court disposed of the writ on 28.03.2018 and the appeals before the Commissioner (Appeals) were filed on 14.08.2018. The Tribunal, following its earlier decision in M/s Deep Communication &Ors vs. CCE & ST-Ludhiana , noted that the appellants did not place on record the date of filing of the writ petitions and that there was an unexplained gap of about four months before seeking the certified copy of the High Court order; further, after receipt of the certified copy the appeals were filed beyond the statutory period and beyond the permissible extension. On these facts, even if time spent before the High Court were to be excluded, the period within which the appeals ought to have been filed had expired. The Tribunal therefore held that the Commissioner (Appeals) was bound by the statutory limitation and correctly dismissed the appeals as time barred.

Appeals dismissed as time barred under Section 85(3) of the Finance Act, 1944.

Final Conclusion: The Tribunal dismissed the appeals for want of limitation, concluding that the statutory period under Section 85(3) was exceeded and that neither the pendency before the High Court nor the delay in obtaining certified copies sufficed to bring the appeals within time.

Cenvat credit on tax paid under Reverse Charge Mechanism - import of transport services by vessel - exemption from levy of Service Tax - payment under misconception and entitlement to credit - penalty under section 11AC of the Act

Cenvat credit on tax paid under Reverse Charge Mechanism - import of transport services by vessel - exemption from levy of Service Tax - payment under misconception and entitlement to credit - Entitlement to avail Cenvat credit of Service Tax paid on freight for import of goods by vessel when the service was exempt from Service Tax at the relevant time. - HELD THAT: - The Tribunal noted that it is an admitted fact that the transport services from non-taxable territory to India were exempt from Service Tax during the period when the appellant availed those services, yet the appellant paid tax under reverse charge and claimed Cenvat credit. Relying on and following the reasoning of the Hon'ble Madras High Court in COMMR. OF C.EX. & S.T., LTU, CHENNAI v. TAMILNADU PETROPRODUCTS LTD., the Tribunal held that where an assessee, under a misconception of law, pays tax which it was not liable to pay and then claims credit of the tax actually paid, such availment of Cenvat credit cannot be regarded as illegal merely because the payment was in excess or unnecessary; the appropriate remedy for the Department would be refund proceedings but not denial of legitimate credit of tax paid. Applying that principle to the facts, the Tribunal held that reversal of Cenvat credit could not be directed when the payment under reverse charge was not disputed by Revenue and was for business use. [Paras 9, 10]

Cenvat credit availed on the Service Tax paid under reverse charge for the freight component of imported goods is allowable and the demand insofar as it seeks reversal of such credit is set aside.

Penalty under section 11AC of the Act - fraud, collusion, willful misstatement or suppression of facts - Whether penalty under section 11AC is warranted on account of fraud, collusion, willful misstatement or suppression by the appellant. - HELD THAT: - The Tribunal observed that the Revenue failed to establish beyond reasonable doubt any element of fraud, collusion, willful misstatement or suppression of facts by the appellant in relation to the availment of the Cenvat credit. In the absence of such culpable conduct being proved, imposition of penalty under section 11AC could not be sustained. Accordingly, the penalty confirmed by the lower authorities was held to be unwarranted. [Paras 10]

Penalty under section 11AC set aside for want of proof of fraud, collusion, willful misstatement or suppression.

Final Conclusion: The appeal is allowed: the demand for reversal of Cenvat credit on Service Tax paid under reverse charge for import freight (2016-17) is set aside, and the penalty under section 11AC is quashed; consequential relief, if any, to the appellant is granted.

Treatment of by-product/raw oil as waste - EOU scheme - by-product not covered - treating clearance as if by DTA unit - eligibility for exemption under notification applicable to DTA units - binding effect of Supreme Court precedent - limitation bar on demand for extended period

EOU scheme - by-product not covered - treatment of by-product/raw oil as waste - treating clearance as if by DTA unit - eligibility for exemption under notification applicable to DTA units - binding effect of Supreme Court precedent - Whether raw grade oil obtained in the respondents' manufacturing process is to be treated as a product of the 100% EOU (attributable to the EOU scheme) or as if cleared by a DTA unit and thereby eligible for exemption under the notifications applicable to DTA units. - HELD THAT: - The Tribunal examined the factual record showing that the respondents were not permitted to export edible oil and had been authorized to export only de-oiled cake; by-product edible oil was to be sold in the domestic market. Applying the remand direction given earlier, the adjudicating authority was required to treat clearance of raw oil as if by a DTA unit and determine duty liability accordingly. The Tribunal followed the decision of the Mumbai Bench (affirmed by the Supreme Court) which held that soybean solvent extraction raw oil as a by-product was not covered under the 100% EOU scheme and should be treated at par with oil produced by any DTA unit. On that basis, the raw oil falling under the relevant tariff chapter attracted nil rate of duty under the notifications in force for DTA units. The Tribunal accordingly found no infirmity in the Commissioner's order which dropped the demand on merits, concluding that the vegetable raw oil could not be treated as a product of the 100% EOU and was eligible for the DTA notification exemption. [Paras 4]

Clearance of raw grade oil is to be treated as if by a DTA unit; the raw oil is not covered by the 100% EOU scheme and is eligible for exemption under the notifications applicable to DTA units, hence no excise duty is payable.

Limitation bar on demand for extended period - Whether the demand in respect of the extended period (beyond one year) was rightly dropped on limitation and whether that aspect remains open to challenge. - HELD THAT: - The Tribunal observed that the Commissioner's impugned order had dropped the demand for the extended period on limitation. The revenue's appeal record did not contain any ground challenging the dropping of demand for the extended period. In the absence of any challenge to that finding, the dropping of the extended period demand attained finality. [Paras 5]

The demand for the extended period was rightly dropped on limitation and that finding has attained finality.

Final Conclusion: The appeals filed by the Revenue are dismissed: the adjudicating authority correctly treated the raw oil as if cleared by a DTA unit and applied the notifications granting nil duty, and the dropping of the extended period demand on limitation has attained finality.

Excess payment of excise duty - refund claim of excess duty - failure to consider documentary evidence and CA certificates - remand for fresh adjudication and verification - requirement of a reasoned order and compliance with principle of natural justice

Excess payment of excise duty - refund claim of excess duty - Appellant paid excise duty on a higher basic price instead of the price in the purchase order, resulting in excess duty payment, and claimed refund. - HELD THAT: - The Tribunal found that as per the Purchase Order dated 21.04.2016 the basic price was Rs. 24,052/- per MT whereas the appellant had paid excise duty calculated on a basic price of Rs. 26,234.62/-, producing an excess duty payment quantified in the record as Rs. 18,08,271/-. The appellant placed on record invoice-wise computations, letters from the buyer confirming non-claim of CENVAT credit on the excess duty, and Chartered Accountant certificates corroborating that the excess basic price and corresponding duty were not received by the appellant and not taken as credit by the buyer. The Tribunal recorded that these materials were neither examined nor considered by the lower authorities before rejecting the refund claim.

Findings recorded that excess excise duty was paid on account of adoption of a higher basic price contrary to the Purchase Order; supporting documentary evidence was on record but not considered by the authorities below.

Failure to consider documentary evidence and CA certificates - remand for fresh adjudication and verification - requirement of a reasoned order and compliance with principle of natural justice - Whether the matter should be remanded for fresh consideration in view of non-examination of evidence by the adjudicating authorities. - HELD THAT: - The Tribunal concluded that the adjudicating authority and the Commissioner (Appeals) did not examine or record reasons for rejecting the documentary evidence and Chartered Accountant certificates produced by the appellant, including the buyer's letter confirming non-utilisation of the alleged excess duty as CENVAT credit. Given the omission to verify and consider these documents and sample invoices, the Tribunal directed that the matter be remanded to the original authority for fresh adjudication. The authority was instructed to examine the documents placed on record or which may be submitted by the appellant, allow the appellant opportunity to be heard, and pass a reasoned order in accordance with law within a fixed time frame.

Matter remanded to the original authority with direction to re-examine the evidence, follow the principle of natural justice and pass a reasoned fresh order within two months.

Final Conclusion: Appeal allowed by way of remand; case is directed to the original authority to examine the documentary evidence and CA certificates, afford opportunity of hearing, and pass a reasoned order in accordance with law within two months of receipt of the certified copy, after complying with the principles of natural justice.

Violation of principles of natural justice - opportunity of hearing - statutory appellate remedy to be exhausted - judicial review under Article 226 of the Constitution of India - final fact-finding role of appellate authorities - maintainability of writ petition where alternative remedy exists

Violation of principles of natural justice - opportunity of hearing - Validity of the Original Assessment Order dated 29.06.2015 insofar as it was challenged on the ground that the writ petitioner was denied opportunity to be heard and to cross-examine witnesses. - HELD THAT: - The High Court examined the assessment order and the contemporaneous recital of proceedings and found that personal hearings and adjournments were granted to the dealer, who sought extensions and was afforded time to file objections and documentary evidence but thereafter did not file objections or seek further extensions. The Court emphasised that the assessing authority recorded that reasonable opportunities were furnished and issues were framed only after opportunity and non cooperation by the dealer. On the material before it the Court concluded that the contention of denial of hearing or breach of natural justice was contrary to the findings recorded in the impugned order and therefore not made out.

The challenge to the assessment order on the ground of denial of opportunity to be heard is rejected; the assessment order is not set aside on that ground.

Statutory appellate remedy to be exhausted - maintainability of writ petition where alternative remedy exists - judicial review under Article 226 of the Constitution of India - final fact-finding role of appellate authorities - Whether the writ petitions are maintainable despite non exhaustion of statutory appellate remedies under the TNVAT Act. - HELD THAT: - The Court reiterated the statutory scheme providing appeals and revisions to appellate authorities and observed that such forums are the final fact finding authorities with expertise to examine documents and evidence. While acknowledging that writ jurisdiction is an extraordinary remedy, the Court held that mere allegation of violation of natural justice does not automatically justify bypassing the statutory appellate route; writ relief should be granted cautiously and only where there is imminent threat or gross injustice warranting urgent intervention. The Court stressed that its role under Article 226 is supervisory and concerned with the legality and the process followed rather than conducting a roving re appraisal of evidence which is primarily for the appellate authorities.

Writ petitions dismissed on maintainability grounds; petitioner directed to exhaust the prescribed statutory appellate remedies.

Final Conclusion: Writ petitions disposed of with liberty to the petitioner to pursue the statutory appellate remedies; no costs.

Sufficient cause - proviso to Rule 12(7) of the Central Sales Tax (Registration & Turnover) Rules, 1957 - submission of Form F - enlargement of time - truncated time-frame for submission of declaration/certificate - reopening of assessment - best judgment assessment

Sufficient cause - proviso to Rule 12(7) of the Central Sales Tax (Registration & Turnover) Rules, 1957 - submission of Form F - enlargement of time - reopening of assessment - truncated time-frame for submission of declaration/certificate - Whether the assessing authority erred in refusing permission to file belated Form F declarations and in declining to reopen the assessment. - HELD THAT: - The amended Rule 12(7) required the declaration in Form F to be furnished within three months after the end of the period to which the declaration relates; the proviso permits condonation of delay only where the authority is satisfied that the person was prevented by sufficient cause. The amendment truncated the earlier time-frame (which allowed filing up to the time of assessment) so that any explanation must account for delay from the expiry of the three month period. The dealer was obliged to file the Form F for assessment year 2012-13 by June 2013 but failed to do so and did not participate in assessment proceedings which culminated in a best judgment order on 31.10.2015. The petitioner only sought enlargement of time after recovery proceedings commenced and offered closure of business as the reason for delay. The court held that closure of business did not satisfactorily explain failure to obtain declarations from the dealer's own branch for interstate transfers between its head office and branch; the explanation must justify the entire period of non-filing (2013-2019). While the proviso is to be liberally construed, it cannot be invoked to enable an indolent or indifferent dealer to reopen a concluded assessment without a justifiable cause. On the facts the assessing authority was justified in finding no sufficient cause and in rejecting the belated submission and request to reopen assessment.

The impugned order refusing permission to file belated Form F declarations and declining to reopen the assessment is affirmed; the writ petition is dismissed.

Final Conclusion: The High Court dismissed the petition, holding that under amended Rule 12(7) the dealer failed to show sufficient cause for belated filing of Form F (due by June 2013) and there was no illegality in the assessing authority's refusal to permit late submission or to reopen the best judgment assessment.

Condition precedent of wilful evasion for invoking extended limitation - extended limitation for assessment in cases of wilful evasion - assessment beyond four years and invocation of extended period under Section 21 - jurisdictional fact vitiating assessment where not pleaded or found - setting aside assessment order for lack of jurisdictional finding of wilful evasion

Condition precedent of wilful evasion for invoking extended limitation - assessment beyond four years and invocation of extended period under Section 21 - Validity of invoking the extended six year limitation for assessment by Section 21(5) in absence of any averment or finding of wilful evasion of tax. - HELD THAT: - Section 21(4) prescribes a four year limitation for assessment; Section 21(5) enlarges that period to six years only where there is a wilful evasion of tax. A finding or at least an averment of wilful evasion is therefore a condition precedent to the exercise of extended limitation. In the present case the assessing authority issued an initial show cause proposing tax at 1% and later, beyond the four year period, issued a revised show cause invoking the extended period to raise tax at 14.5%. The revised notice and the impugned order contain no factual averments or finding that the assessee wilfully evaded tax; the order is silent on wilful evasion and merely records non compliance with statutory provisions for concessional rate. Incorrect application of a lower rate without factual allegations of deliberate evasion does not amount to wilful evasion. Since the jurisdiction to proceed beyond four years depends on that jurisdictional fact, absence of such pleading or finding renders the invocation of Section 21(5) impermissible. [Paras 6, 8, 9, 10]

Invocation of the extended six year limitation under Section 21(5) was invalid in absence of any averment or finding of wilful evasion; the assessment made beyond four years is without jurisdiction.

Jurisdictional fact vitiating assessment where not pleaded or found - setting aside assessment order for lack of jurisdictional finding of wilful evasion - Consequences of absence of a finding of wilful evasion in the show cause notice and assessment order - whether impugned proceedings and consequential demands can be sustained. - HELD THAT: - Because the assessing authority did not allege wilful evasion in the revised show cause notice and the impugned order contains no finding to that effect, the proceedings undertaken by invoking the extended limitation are without jurisdiction. The representation made on behalf of the assessee (claiming payment at the lower rate as per directions) was not contradicted by material in the order. Mere non compliance with procedural or statutory prerequisites for concessional treatment does not substitute for an allegation of deliberate evasion necessary to extend limitation. Consequently, the impugned assessment, penalty and urgent notices were unsustainable and liable to be set aside. The court observed that a fresh notice may be issued if materials disclosing wilful evasion are available, but made no comment on merits of any fresh action except to require strict compliance with law and its observations. [Paras 10, 11, 12]

Impugned assessment order dated 16.11.2020 and consequent penalty and urgent notices are set aside as without jurisdiction for want of any allegation or finding of wilful evasion; liberty to issue fresh notice subject to law and court's observations.

Final Conclusion: Writ petition allowed; assessment order dated 16.11.2020 and consequential penalty and urgent notices dated 16.11.2020 and 16.03.2021 set aside for lack of any averment or finding of wilful evasion required to invoke the extended limitation under Section 21(5); no order as to costs; liberty to issue a fresh notice only if material disclosing wilful evasion is available and strictly in accordance with law.

Cause of action under Section 138 of the Negotiable Instruments Act - deemed service of notice sent by registered cover - 15 days period for compliance under the proviso to Section 138 - prematurity of complaint filed before expiry of 15 days - presumption under Section 139 of the Negotiable Instruments Act

Cause of action under Section 138 of the Negotiable Instruments Act - deemed service of notice sent by registered cover - 15 days period for compliance under the proviso to Section 138 - prematurity of complaint filed before expiry of 15 days - Complaint under Section 138 NI Act filed on 10.04.2008 was premature and not maintainable because the statutory 15 day period after service of the demand notice had not expired. - HELD THAT: - The court found no material on record recording actual service of the legal notice dated 03.03.2008 dispatched by registered post on 04.03.2008, and the lower courts did not determine the date of service. Applying the settled law that deemed service of a notice sent by registered/speed post can be presumed only after 30 days from dispatch, the notice in the present case would be deemed served on 03.04.2008. The statutory proviso to Section 138 requires that 15 days be afforded to the drawer to make payment after receipt of notice, so the earliest date on which the cause of action could mature was 18.04.2008. Since the complaint was filed on 10.04.2008, the court held the complaint was filed before the cause of action had crystallised and therefore the court lacked competence to take cognizance; reliance on the presumption under Section 139 could not assist where the foundational condition precedent for filing was not satisfied. The court applied precedents which hold that a complaint filed before expiry of the 15 day period is premature and must be quashed. [Paras 21, 22, 23, 24, 25]

The complaint was premature and not maintainable; the conviction and sentence imposed by the courts below were set aside and the petitioner discharged from bail bonds.

Final Conclusion: The revision petition is allowed: the complaint under Section 138 NI Act filed on 10.04.2008 was held premature (the 15 day period post deemed service had not expired), the convictions and sentences of the petitioner are set aside, and the petitioner is discharged from liability of bail bonds; parties are free to proceed as per law.