TaxTMI Updates e-Newsletter
Jul 18,2022

Principle of mootness / no cause of action - blocking and unblocking of Electronic Credit Ledger - action under Rule 86A of CGST/UPGST Rules, 2017 - effect of deposit and stay under Section 107(6)/(7) of CGST/UPGST Act - authority and jurisdiction to exercise powers under departmental circular - allegation of arbitrary exercise of power and abuse of process - request for exemplary costs for harassment

Blocking and unblocking of Electronic Credit Ledger - principle of mootness / no cause of action - Whether the writ petition could be maintained after the respondents unblocked the Electronic Credit Ledger complained of. - HELD THAT: - The petition challenged an order blocking the petitioner's Electronic Credit Ledger. Subsequent to earlier directions to the respondents to file counter-affidavits, the Additional Chief Standing Counsel produced a document dated 12.7.2022 showing that the Electronic Credit Ledger previously blocked had been unblocked. Given that the principal relief sought in the writ petition was restoration of access to the credit ledger, the factual grievance has been redressed. The court accordingly found that no live cause of action survives and that the writ petition is rendered academic.

The writ petition is disposed of as no cause of action now survives in view of unblocking of the Electronic Credit Ledger.

Action under Rule 86A of CGST/UPGST Rules, 2017 - authority and jurisdiction to exercise powers under departmental circular - allegation of arbitrary exercise of power and abuse of process - request for exemplary costs for harassment - Whether the court proceeded to finally adjudicate the legality of the impugned blocking order, the authority of the officer who passed it, or award costs for alleged abuse of process. - HELD THAT: - While earlier observations in the petition noted prima facie concerns about the officer's authority and potential abuse of process, the respondents filed counter-affidavits and produced proof of unblocking the ledger. The court did not pronounce a final adjudication on the merits of the impugned order, the correctness of invoking Rule 86A, or on the question of imposing exemplary costs; rather, having found the primary relief achieved, the court disposed of the petition. Thus, the substantive legality of the impugned order and the request for exemplary costs were not finally decided on merits.

No final adjudication was made on the legality or jurisdictional correctness of the impugned order under Rule 86A, nor on imposition of exemplary costs; those contentions were not decided as the petition was disposed for want of a live cause of action.

Final Conclusion: The respondents produced evidence that the Electronic Credit Ledger was unblocked, which redressed the petitioner's grievance; the writ petition has therefore been disposed of as academic with no final determination on the substantive legality of the impugned blocking order or on costs.

Pre-deposit requirement in appeal under Section 107(6)(a) of the OGST Act - interest on delayed payment under Section 50 of the OGST Act - self-assessment and automatic obligation to compute and pay interest - garnishee/attachment proceedings under Section 79 of the OGST Act - restoration of appeals for adjudication on merits subject to statutory defects

Pre-deposit requirement in appeal under Section 107(6)(a) of the OGST Act - interest on delayed payment under Section 50 of the OGST Act - Validity of summary rejection of first appeals for non-deposit of the admitted interest and related entitlement to adjudication on merits. - HELD THAT: - The Court recorded that the statutory scheme requires pre-deposit of the part of amount 'admitted' by the appellant before the appellate authority can entertain the appeal and that interest on delayed payment is a liability the taxpayer must compute under the self-assessment framework. Notwithstanding the appellate authority's finding that the appeals were defective for non-deposit, the Court, without entering into factual disputes about the quantum, accepted reconciliation between the parties and directed that upon deposit of the reconciled admitted interest amount of Rs.9,25,43,693.52 the appellate orders dated 24th May, 2022 be set aside and the appeals restored to file for adjudication on merits, subject to removal of any other statutory defects. The Court declined to determine contested factual issues concerning computation of interest and left those to the appellate adjudication.

Appellate orders summarily rejecting the appeals were set aside and the appeals restored on condition of deposit of the reconciled admitted interest amount; merits to be adjudicated thereafter.

Garnishee/attachment proceedings under Section 79 of the OGST Act - Relief against attachments to enable compliance with the deposit direction. - HELD THAT: - Having accepted the practical difficulty faced by the petitioner in operating bank accounts due to recovery intimations under Section 79, the Court exercised equitable relief to permit immediate defreezing of the specific bank account identified by the petitioner to enable an initial deposit. The petitioner was permitted to deposit an initial sum of Rs.5,00,00,000 within 48 hours and to pay the balance of the reconciled admitted interest in two equal fortnightly instalments not later than the specified date. Upon such deposit(s), the revenue was directed to withdraw all attachments made pursuant to the original demands.

Specified attachment on the petitioner's bank account to be lifted to enable payment; on deposit as directed, all attachments to be withdrawn.

Restoration of appeals for adjudication on merits subject to statutory defects - Scope of further proceedings after restoration of appeals. - HELD THAT: - The Court restored the appeals to file for adjudication on merits after compliance with the deposit direction, while expressly leaving open any other statutorily mandated preconditions or defects which, if present, must be removed by the petitioner before adjudication. The Court refrained from resolving merits or measuring the correctness of interest computation, relegating such disputes to the appellate process.

Appeals restored to file for adjudication on merits once the deposit condition and any other statutory preconditions are complied with.

Final Conclusion: The High Court set aside the first appellate orders that summarily rejected the appeals for non-deposit of admitted interest, directed the petitioner to deposit the reconciled admitted interest sum with an initial instalment and balance in specified instalments, ordered temporary lifting of a specified bank attachment to enable the initial payment, and restored the appeals for fresh adjudication on merits subject to compliance with statutory preconditions and without deciding the substantive factual disputes on interest computation.

Provisional attachment - lifting of provisional attachment upon deposit - protection of revenue pending adjudication by remittance and investment in interest-bearing fixed deposit - service of show cause notice and opportunity to contest - requirement to pass a speaking adjudicatory order - submission of quarterly bank statements

Provisional attachment - lifting of provisional attachment upon deposit - Provisional attachment over 38 bank accounts ordered to be lifted on remittance of the cumulative credit balance to the respondent. - HELD THAT: - The petitioners confined their prayer to lifting the provisional attachment over 38 bank accounts. The court recorded that the cumulative credit balance in those accounts is Rs.1,67,550.12 and, upon receiving instructions from the respondent, recorded the respondent's willingness to lift the provisional attachment orders in respect of those 38 accounts provided that the cumulative amount is remitted to the respondent. The court accepted the parties' agreement and directed lifting of the provisional attachment on the stated condition, subject to the rights of the parties and final adjudication. [Paras 5, 6, 8, 9, 11]

Provisional attachment in respect of the 38 accounts shall be lifted upon remittance of the cumulative credit balance to the respondent.

Protection of revenue pending adjudication by remittance and investment in interest-bearing fixed deposit - Remitted amounts to be held by the respondent in an interest-bearing fixed deposit pending adjudication. - HELD THAT: - To protect the respondent's interests pending adjudication, the court directed that the amounts remitted by the banks to the respondent be invested in an interest-bearing fixed deposit with a nationalised bank. The principal and accrued interest would abide by the final orders in the adjudicatory process that the respondent intends to commence. This mechanism was accepted by the parties as a safeguard while the provisional attachments are lifted. [Paras 8, 9, 11]

Amounts remitted shall be invested by the respondent in an interest-bearing fixed deposit and will abide by the final adjudicatory orders.

Service of show cause notice and opportunity to contest - requirement to pass a speaking adjudicatory order - Respondent to serve any show cause notice within three weeks, afford the petitioners opportunity to reply and be heard, and thereafter pass a speaking adjudicatory order. - HELD THAT: - The court recorded that a draft show cause notice had been prepared and, by agreement of parties, directed the respondent to serve any such notice on the petitioners within three weeks. The petitioners were to be given an opportunity to file a reply and to be heard, after which the respondent must pass a speaking order and serve a copy on the petitioners. These directions ensure that substantive adjudication proceeds with opportunity for contest and reasoned conclusions. [Paras 10, 11]

Show cause notice, if any, to be served within three weeks; petitioners to be given opportunity to reply and be heard; respondent to pass and serve a speaking order.

Submission of quarterly bank statements - Petitioners directed to file quarterly bank statements for the 38 bank accounts whose provisional attachments are lifted. - HELD THAT: - As a condition of lifting the provisional attachments and to enable the respondent to monitor transactions, the court directed that the petitioners shall file quarterly bank statements concerning the 38 accounts. This requirement was part of the agreed terms recorded by the court to provide the respondent an overview of transactions while the funds remain remitted and invested pending adjudication. [Paras 11]

Petitioners shall file quarterly bank statements in respect of the 38 bank accounts.

Provisional attachment - Provisional attachment orders in respect of an additional 13 bank accounts (relating to entities/persons not under investigation) to be lifted by the respondent. - HELD THAT: - The respondent informed the court that there are 13 bank accounts, against which provisional attachment orders had also been issued, that concern entities and persons not under investigation. The respondent, as recorded and affirmed in court, agreed to lift the provisional attachment orders in respect of those 13 accounts. The court included this undertaking in its directions and disposed of the petitions on that basis. [Paras 7, 11]

Respondent shall lift the provisional attachment orders vis-a -vis the other 13 bank accounts that concern entities/persons not under investigation.

Final Conclusion: By consent and for protection of revenue pending adjudication, the court directed lifting of provisional attachments over specified bank accounts on conditions: remittance of the stated cumulative balance to the respondent, investment of the sum in an interest-bearing fixed deposit, filing of quarterly bank statements by the petitioners, timely service of any show cause notice and opportunity to contest, and issuance of a speaking order; the writ petitions are disposed of in these terms with no order as to costs.

Show-cause notice under Section 73(1) of JGST Act, 2017 - summary of show-cause in Form GST DRC-01 not substituting proper show cause notice - penalty limit under Section 73(9) of JGST Act, 2017 - violation of principles of natural justice - liberty to initiate fresh proceedings after valid notice

Show-cause notice under Section 73(1) of JGST Act, 2017 - violation of principles of natural justice - Validity of the impugned show cause notices (Annexure-2) for the tax period April 2018 to March 2019 - HELD THAT: - The Court held that the notices issued in the standard GSTN format were vague and did not specify the particular contraventions or set out particulars enabling the petitioners to furnish a meaningful defence. Reliance was placed on this Court's earlier decision in M/s NKAS SERVICES PRIVATE LIMITED that a summary cannot cure the absence of particulars in a show cause notice; a notice that fails to lay the foundation of the case results in deprivation of the opportunity to meet specific charges and thus amounts to a breach of principles of natural justice. For these reasons the impugned show cause notices were quashed. [Paras 9, 11]

Impugned show cause notices quashed for being vague and violative of principles of natural justice.

Summary of show-cause in Form GST DRC-01 not substituting proper show cause notice - Whether the Summary of Show Cause Notice in Form GST DRC 01 can substitute a properly particularised notice under Section 73(1) - HELD THAT: - The Court reiterated that the summary in Form GST DRC 01 cannot substitute for a properly particularised show cause notice as required under Section 73(1). The format on the GSTN portal is only a facilitator and cannot be used to avoid setting out the grounds and particulars of the alleged contravention; absent such particulars the Revenue cannot be permitted to raise fresh or different grounds at adjudication. [Paras 9]

Form GST DRC 01 summary cannot substitute for a proper show cause notice; the summaries were inadequate and quashed.

Penalty limit under Section 73(9) of JGST Act, 2017 - Validity of imposition of 100% penalty in the Summary of Order (Form GST DRC 07) - HELD THAT: - The Court found that the Summary of Order in Form GST DRC 07 imposed 100% penalty which is contrary to Section 73(9) that permits levy of penalty only up to 10% of the tax dues in proceedings under Section 73. The imposition of 100% penalty indicated non application of mind by the adjudicating authority and was therefore in excess of statutory power; the summary orders imposing such penalty were quashed. [Paras 10, 11]

Summary orders imposing 100% penalty quashed as contrary to Section 73(9).

Liberty to initiate fresh proceedings after valid notice - Whether the Revenue may initiate fresh proceedings after quashing of the impugned notices and summaries - HELD THAT: - Although the impugned notices and summary orders were quashed for the reasons stated, the Court granted the Deputy Commissioner liberty to initiate fresh proceedings in accordance with law by issuing proper show cause notice. The Court noted the statutory limitation window referred to by the State and permitted re initiation subject to the law of limitation and due compliance with procedural requirements. [Paras 8, 11]

Respondent permitted to initiate fresh proceedings after issuance of proper show cause notice and in accordance with law.

Final Conclusion: Writ petitions allowed: the impugned show cause notices, the summaries in Form GST DRC 01 and the summary orders in Form GST DRC 07 for April 2018 to March 2019 are quashed for being vague, procedurally defective and for unlawfully imposing 100% penalty; Revenue is, however, at liberty to commence fresh proceedings after issuing proper notice and subject to applicable limitation.

Mandatory show cause notice under Section 73(1) of the JGST Act - principles of natural justice - summary notice in Form GST DRC-01 not a substitute for a proper show cause notice - opportunity to furnish reply as envisaged in Sections 70(4) & 70(5) of the JGST Act - invalidity of consequential adjudication, demand notice and garnishee proceedings where foundational procedure is vitiated - remand for fresh proceedings after issuance of proper show cause notice

Mandatory show cause notice under Section 73(1) of the JGST Act - principles of natural justice - Adjudication order passed without issuance of a proper show cause notice under Section 73(1) and in breach of principles of natural justice is vitiated and liable to be quashed. - HELD THAT: - The Court found that after the petitioner filed responses in Form GST ASMT-11 and in DRC-01A, no proper show cause notice under Section 73(1) was served specifying the grounds of contravention and granting the statutory opportunities to reply. In the absence of such a notice the petitioner was prevented from effectively defending its case and the adjudicating authority proceeded to pass an order under Section 73(9) without following the procedure mandated by the Act and the requirement of affording opportunities under Sections 70(4) & (5). These procedural infirmities amounted to violation of principles of natural justice and rendered the adjudication proceeding invalid. Reliance was placed on this Court's earlier decisions which hold that a vague or absent show cause notice deprives the assessee of a fair opportunity and precludes imposition of tax, interest or penalty on grounds not specified in the notice. [Paras 9]

Adjudication order dated 01.11.2021 is quashed for want of a proper show cause notice and breach of natural justice.

Summary notice in Form GST DRC-01 not a substitute for a proper show cause notice - opportunity to furnish reply as envisaged in Sections 70(4) & 70(5) of the JGST Act - Summary communications in Form GST DRC-01/DRC-01A cannot substitute for a detailed show cause notice and summary of proceedings in the portal which fails to specify grounds is insufficient. - HELD THAT: - The Court reiterated that the summary formats on the GST portal (such as Form DRC-01/DRC-01A) are facilitative and cannot replace a show cause notice that specifies the alleged violations and grounds on which adjudication is proposed. Where the summary fails to lay the foundation of the case or specify the contraventions, the assessee is deprived of the ability to meet specific allegations. Consequently, such summary measures cannot validate subsequent adjudication or demands founded on grounds not communicated by a proper notice. [Paras 9]

The summary of show cause notice in Form GST DRC-01 and related summary communications are quashed to the extent they were used as a substitute for a proper show cause notice.

Invalidity of consequential adjudication, demand notice and garnishee proceedings where foundational procedure is vitiated - garnishee proceedings under Sections 78/79 of the JGST Act - The demand notice in Form GST DRC-07 and the Garnishee Notice in Form GST DRC-13 issued pursuant to the impugned adjudication are invalid and liable to be quashed as they flow from a vitiated adjudication. - HELD THAT: - Because the adjudication order was quashed for procedural infirmity, all consequential actions predicated on that order - including the demand notice (DRC-07) and the garnishee notice issued under the recovery provisions - are also without authority. The Court observed that recovery steps taken in reliance upon a determination which itself was passed without following mandatory procedure cannot stand. [Paras 11]

The summary of order and demand notice in GST DRC-07 dated 01.11.2021 and the Garnishee Notice dated 25.02.2022 in Form GST DRC-13 are quashed.

Remand for fresh proceedings after issuance of proper show cause notice - Matter remanded to the State Tax Officer, Dhanbad to initiate fresh proceedings in accordance with law after issuing a proper show cause notice under Section 73(1). - HELD THAT: - The Court did not adjudicate the merits of the tax, interest or penalty demands. It held that since the proceedings were vitiated on procedural grounds, respondents are at liberty to initiate fresh proceedings from the appropriate stage by issuing a proper and specific show cause notice under Section 73(1) and affording all statutory opportunities. The Court noted that limitation for initiating fresh proceedings in respect of the tax period 2018-19 has not expired and thus a fresh adjudication in accordance with law may be undertaken. [Paras 11]

Proceedings are remanded to the State Tax Officer for fresh consideration after issuance of a proper show cause notice; no observation is made on the merits.

Final Conclusion: Impugned adjudication order dated 01.11.2021, the summary of order and demand in GST DRC-07 dated 01.11.2021 and the Garnishee Notice dated 25.02.2022 are quashed for failure to issue a proper show cause notice and for breach of natural justice; matter is remitted to the State Tax Officer, Dhanbad to proceed afresh in accordance with law after issuance of a proper show cause notice under Section 73(1), with no expression on the merits.

Limitation for filing appeal under GST - communication of assessment order by uploading on portal - authentication of assessment order upon demand generation - deemed communication - condonation of delay in appellate proceedings - remand for reconsideration of limitation

Limitation for filing appeal under GST - communication of assessment order by uploading on portal - deemed communication - condonation of delay in appellate proceedings - Whether the appeals filed by the petitioner were liable to be rejected as time barred on the ground that the assessment orders had been uploaded on the portal on 29.08.2019 and therefore deemed communicated earlier than the dates claimed by the petitioner. - HELD THAT: - The Court recorded competing contentions: respondents relied on portal upload dated 29.08.2019 as sufficient communication under the GST scheme and therefore contended the appeals filed on 17.02.2020 were beyond the three month period and beyond the one month condonable period; the petitioner contended that communication occurred on 18.01.2020 and appeals were filed within three months. The Court noted an alternative line of authority of this Court holding that an authenticated copy of the assessment order is recognised by the system only when a demand is raised pursuant to the order, and that the demand in this case was uploaded in Form DRC 07 on 12.12.2019. In view of these competing dates and the authorities mentioned, the Court did not decide the limitation question finally against either date but directed that the appellate authority must reconsider the appeals by treating 12.12.2019 (date of demand upload) as the relevant date for computing limitation if that date makes the appeals within time. Consequently the Court set aside the order rejecting the appeals as time barred and remanded the matter to the first respondent for fresh adjudication on the question of limitation and, if within time, for decision on merits. [Paras 4]

Order rejecting the appeals as time barred is set aside and the matter is remitted to the first respondent to examine limitation afresh, treating 12.12.2019 as the relevant date for computing the period where applicable, and to decide the appeals on merits if found within time.

Final Conclusion: Writ petition disposed by setting aside the appellate authority's rejection of the appeals as time barred and remitting the matter to the first respondent to reassess limitation (including consideration of the demand upload dated 12.12.2019) and, if the appeals are within time, to hear and decide them on merits.

Definition of supply (elements: consideration and furtherance of business) - consideration (including monetary value of act or forbearance) - treatment of free supplies under Schedule I (activities treated as supply between related/distinct persons) - exempt supply / non taxable supply and its effect on input tax credit - eligibility for Input Tax Credit linked to taxability of outward supply

Definition of supply (elements: consideration and furtherance of business) - consideration (including monetary value of act or forbearance) - treatment of free supplies under Schedule I (activities treated as supply between related/distinct persons) - Whether the appellant's distribution of complimentary tickets without any consideration constitutes a 'supply' under the CGST/Punjab GST Act. - HELD THAT: - The definition of 'supply' is inclusive but requires, as core elements, the presence of 'consideration' and that the activity be in the 'course or furtherance of business'. The authority examined the statutory definition of 'consideration', which includes payment in money or otherwise and expressly includes the monetary value of any act or forbearance provided there is a nexus with the supply. Drawing on principles distinguishing non monetary consideration from the absence of consideration, the authority held that gratuitous distribution of tickets, absent any contractual reciprocity or direct link constituting consideration, does not amount to a supply. The decision recognised that Schedule I treats certain activities between related persons (and distinct persons) as supply even without consideration; accordingly, where complimentary tickets are given to a related person or a distinct person as defined in the Act, those transactions will be treated as supply despite lack of consideration. The CBIC clarification that free supplies not falling under Schedule I are not supplies was noted and applied to support the conclusion that free complimentary tickets to unrelated recipients are not supplies. [Paras 3, 20, 21]

Distribution of complimentary tickets free of cost to unrelated persons is not a 'supply' for GST (absent consideration); however, such distribution to related persons or distinct persons falls within the ambit of supply by virtue of Schedule I.

Exempt supply / non taxable supply and its effect on input tax credit - eligibility for Input Tax Credit linked to taxability of outward supply - Whether the appellant is entitled to claim Input Tax Credit in respect of complimentary tickets. - HELD THAT: - The availability of Input Tax Credit is governed by the scheme which ties ITC to taxable outward supplies. Where an outward activity is non taxable or exempt, the Act restricts or disallows ITC for inputs/input services used for such supplies. Having held that free complimentary tickets to unrelated recipients do not constitute a taxable supply (and therefore amount to non taxable/exempt supply), the authority concluded that ITC in respect of such complimentary tickets is not available. An exception was recorded: if the transaction is treated as a supply because it is to a related or distinct person under Schedule I (and thus taxable), the appellant would be entitled to claim ITC in relation to that transaction. [Paras 22, 23]

ITC is not available for complimentary tickets that are not supplies (i.e., free distributions to unrelated persons); where the distribution is treated as a supply because it is to a related or distinct person, ITC would be available.

Final Conclusion: The appeal is disposed by holding that gratuitous distribution of complimentary tickets to unrelated recipients does not constitute a supply under the GST law and consequently does not attract tax nor entitlement to Input Tax Credit; however, identical distributions to related or distinct persons are treated as supply under Schedule I and will be taxable, with corresponding entitlement to ITC.

Taxability of promotional free goods under GST - determination of taxable value for composite supplies / bundled price - scope and competence of Authority for Advance Ruling - application of administrative circular on "buy one get one free" offers - limitation of advance ruling where other statutory levies (Compensation Cess) are concerned - admissibility of advance ruling application despite contemporaneous departmental alerts

Taxability of promotional free goods under GST - determination of taxable value for composite supplies / bundled price - Extra packs supplied under the respondent's promotional scheme are not leviable to GST as separate taxable supplies and the Advance Ruling Authority's negative answer on taxability is upheld. - HELD THAT: - The Appellate Authority reviewed the AAR's finding that the promotional extra packs form part of a single supply where a single price is charged for the entire supply, and are not to be treated as separate taxable supplies attracting fresh GST liability. The authority noted that the advance ruling framework contemplates questions relating to determination of time and value of supply and liability to pay tax, and that the AAR applied the principle that a 'buy one get one free' arrangement may be treated as supplying two goods for the price of one, thereby negating separate levy on the additional packs. Given that the AAR's conclusion followed from that application of law and the Circular's exposition of such schemes, the AAAR found no infirmity in the AAR's negative answer on taxability. [Paras 4, 9, 10]

The AAR's conclusion that the extra packs would not attract an independent levy of GST is sustained.

Limitation of advance ruling where other statutory levies (Compensation Cess) are concerned - The AAR's jurisdiction is confined to matters under the CGST/UPGST Acts; where other statutory levies such as Compensation Cess or Central Excise aspects arise, the advance ruling can only address the GST component and cannot decide issues solely governed by other statutes. - HELD THAT: - The AAAR observed that advance rulings are confined to the questions enumerated in Section 97(2) of the Act and relate to tax levied under the CGST/UPGST Acts. While commodities like cigarettes attract both ad valorem GST and a separate specific Compensation Cess under other statutes, the AAR may rule only on the GST portion. The Appellant's objection that the AAR erred by not addressing the cess or Central Excise/IGST provisions does not invalidate the AAR's ruling on GST; instead, any cess-specific computation or disputes fall outside the advance ruling's adjudicatory scope. [Paras 9]

The AAR rightly limited its ruling to the GST aspects; questions exclusively concerning Compensation Cess or other statutes are beyond the AAR's purview.

Application of administrative circular on "buy one get one free" offers - Circular No. 92/11/2019-GST on 'buy one get one free' schemes is not restricted to select industries and is applicable to the arrangement described by the respondent; the Appellant's contention that the Circular excludes commodities like cigarettes is rejected. - HELD THAT: - The AAAR examined the Circular's explanation that a buy-one-get-one-free offer represents two individual supplies for a single price rather than an isolated supply of free goods. The authority found no language in the Circular that limits its applicability to specific sectors; consequently, the AAR's reliance on the Circular to treat the promotional scheme as a bundled supply was appropriate. The Appellant's argument that the Circular addresses only certain trades and therefore cannot apply to cigarettes was held to be untenable. [Paras 10]

The Circular's treatment of buy-one-get-one offers applies to the scheme in question and supports the AAR's conclusion.

Admissibility of advance ruling application despite contemporaneous departmental alerts - preclusion from admission where the question is already pending or decided - The AAR properly admitted and decided the respondent's application for advance ruling despite the Appellant's assertions of departmental alerts and other proceedings, since the Appellant did not demonstrate that the questions in the application were already pending or decided in proceedings against the applicant under the Act. - HELD THAT: - Section 98(2) permits the AAR to reject applications only where the question raised is already pending or decided in proceedings in the case of the applicant. The AAAR found that although the Appellant alleged departmental alerts and other adverse proceedings against the respondent, it did not show that the precise questions in the advance ruling application were the subject of existing proceedings under the Act. Consequently, the AAR's admission and adjudication of the application complied with the statutory proviso and were not vitiated by the existence of unrelated departmental actions. [Paras 11]

The AAR correctly admitted and decided the advance ruling application; the Appellant's allegations of alerts and separate investigations did not bar admission.

Final Conclusion: The Appellate Authority for Advance Ruling finds no infirmity in Authority for Advance Ruling Order No. UP/ADRG 84/2021 dated 18.10.2021 and affirms that the extra packs under the promotional scheme are not leviable to GST as separate supplies, that the AAR's remit is limited to GST issues (excluding standalone decisions on Compensation Cess or other statutes), that the Circular on 'buy one get one free' is applicable to such schemes, and that the AAR rightly admitted and decided the advance ruling application.

Passing on of benefit of input tax credit (ITC) - commensurate reduction in prices under Section 171(1) - methodology for computation of profiteering - investigation by Director General of Anti-Profiteering (DGAP) under Rule 129 - verification of passing on of benefit to identifiable recipients - obligation to refund profiteered amount with interest under Rule 133(3)(b) - continuing availability of ITC until issuance of completion/occupancy certificate

Passing on of benefit of input tax credit (ITC) - commensurate reduction in prices under Section 171(1) - methodology for computation of profiteering - Whether additional ITC accrued to the Respondent post-GST and the quantum of benefit required to be passed on to recipients for the period 01.07.2017 to 30.09.2019 - HELD THAT: - The Authority accepted DGAP's factual computation comparing pre GST (Apr 2016-Jun 2017) and post GST (Jul 2017-Sep 2019) ratios of CENVAT/ITC to turnover. Pre GST ratio was found to be 1.27% and post GST ratio 6.67%, giving an additional ITC benefit of 5.40% of turnover which, in terms of Section 171(1), had to be passed on by way of commensurate reduction in prices. The Authority held that Section 171(1) prescribes the contours of the procedure and that no single universal mathematical formula can be mandated because project facts differ; however, the comparative ratio method adopted by DGAP was rational and appropriate in this case. On that basis the Authority determined the profiteered amount for Arihant Aanchal Phase I during 01.07.2017-30.09.2019 as Rs. 1,78,32,984 (inclusive of the amount attributable to the Applicant's flat). [Paras 22, 23, 36, 37, 40]

Additional ITC benefit of 5.40% of turnover accrued post GST and the amount profiteered for the period 01.07.2017 to 30.09.2019 is determined as Rs. 1,78,32,984, to be passed on to eligible recipients.

Verification of passing on of benefit to identifiable recipients - obligation to refund profiteered amount with interest under Rule 133(3)(b) - Whether the Respondent had passed on the additional ITC benefit to the recipients and the appropriate remedial orders when benefit was not verifiable - HELD THAT: - DGAP's verification of respondent's claim of passing on benefits through invoices/credit notes revealed discrepancies and inability to verify benefits for a large number of buyers (mismatches in names, differences in amounts, low third party confirmations). The Authority found the Respondent's evidence unverifiable and unsubstantiated. Consequently, the Authority held that the Respondent had denied the benefit in contravention of Section 171(1) and ordered refund/return of the profiteered amount to eligible homebuyers/shop buyers/customers along with interest at 18% from the date of profiteering until payment, and directed reduction of prices commensurate with ITC benefit as per Rule 133(3)(a) and (b). Publication and compliance reporting directions to the jurisdictional Commissioner and DGAP were also issued to ensure distribution to identifiable recipients. [Paras 43, 45, 46, 47, 48]

Respondent has not satisfactorily demonstrated passing on of benefit; ordered to refund/pass on Rs. 1,78,32,984 with interest @18% and to reduce prices commensurate with ITC benefit; compliance, publication and reporting directions issued.

Continuing availability of ITC until issuance of completion/occupancy certificate - periodic/provisional passing on of ITC benefit during project life - Whether profiteering for periods after 30.09.2019 must be examined and how continuing availability of ITC affects obligations to pass on benefit - HELD THAT: - The Authority noted that DGAP's investigation covered only up to 30.09.2019 and that the exact quantum of ITC available thereafter could not be determined at this stage while ITC continued to be availed. The Authority observed that Section 171(1) mandates passing on benefits accrued during the life of the project up to issuance of completion/occupancy certificate and that a supplier availing ITC monthly must make periodical assessments and pass on benefits on each demand; the supplier cannot defer passing on benefits until project completion. Accordingly the Authority directed the jurisdictional Commissioner to ensure the Respondent passes on any further ITC benefits that accrue until the issue of completion certificate, following the methodology applied in this order, and to report compliance through DGAP. [Paras 24, 25, 49]

Investigation in the present order is limited to 01.07.2017-30.09.2019; Respondent remains obliged to pass on further ITC benefits that accrue until issuance of completion/occupancy certificate and jurisdictional Commissioner/DGAP to monitor and report compliance.

Investigation by Director General of Anti-Profiteering (DGAP) under Rule 129 - investigation of other projects attracting Section 171 - Whether DGAP should investigate profiteering in the Respondent's other projects attracting Section 171 - HELD THAT: - Records indicated the Respondent had undertaken other construction projects under the same GSTIN. In terms of Rule 129 and Rule 133(5), the Authority directed DGAP to investigate profiteering in relation to all other projects executed by the Respondent that attract the provisions of Section 171, since benefits accruing from tax concessions are matters DGAP is obliged to examine when they come to its notice during an investigation. [Paras 7, 50]

DGAP is directed to investigate profiteering, if any, in the Respondent's other projects that attract Section 171.

Final Conclusion: The Authority accepts DGAP's computation and holds that the Respondent profiteered by Rs. 1,78,32,984 for Arihant Aanchal Phase I for the period 01.07.2017-30.09.2019 by not passing on additional ITC of 5.40% of turnover; the Respondent is directed to pass/refund that amount to identifiable recipients and to reduce prices commensurately, along with interest at 18% from the date of profiteering until payment, within three months; jurisdictional Commissioner and DGAP are directed to ensure compliance, monitor further ITC benefits until completion certificate and investigate other projects of the Respondent as directed.

Summary order. No interim relief granted; respondents directed to file affidavits in opposition within four weeks, petitioner permitted to file reply within two weeks thereafter; matter listed for final hearing seven weeks hence with parties to be ready with short written notes of argument.

Breach of principles of natural justice - service of notice and notice validity - substantive illegality of service in the name of a non existent entity - alternate and efficacious remedy of appeal - extraordinary jurisdiction under Article 226 - prima facie observations

Breach of principles of natural justice - extraordinary jurisdiction under Article 226 - alternate and efficacious remedy of appeal - Entertainability of the writ petition challenging reopening and assessment where an assessment order has been passed and an alternate remedy of appeal exists, and whether a prima facie breach of natural justice was made out. - HELD THAT: - The Court considered whether to exercise its extraordinary jurisdiction under Article 226 after an assessment order dated 30.03.2022 was passed pursuant to the impugned notices. The petitioner's grievance of service against a surrendered PAN and against the name of a non-existent entity was examined against the respondents' material showing service on the petitioner's Chartered Accountant at an email Id registered with the Income Tax Department and documentary material indicating transactions under the impugned PAN. The Court held that mere technical errors in the manner of addressing notices do not automatically establish a breach of natural justice; some prejudice must be demonstrated. In the absence of a prima facie case of violation of principles of natural justice or fair play and given that an assessment order has been passed, the existence of an alternate and efficacious remedy of appeal weighed against entertaining the writ petition at this stage. [Paras 11, 12, 13, 16]

Writ petition dismissed as not a fit case for exercise of extraordinary jurisdiction; petitioner relegated to challenge the assessment order by appeal.

Service of notice and notice validity - substantive illegality of service in the name of a non existent entity - prima facie observations - Effect of service of notices against a surrendered PAN and uploaded assessment against an incorrect PAN - remedial direction and its character. - HELD THAT: - The Court noted the petitioner's contention that the assessment was uploaded against a surrendered PAN belonging to a non existent entity and that this would impede an effective appeal. The respondents produced material suggesting continued use of the PAN in transactions and asserted service via the registered email of the petitioner's Chartered Accountant. Without adjudicating the substantive legality of service, and while recording only prima facie observations, the Court accepted respondents' undertaking to upload the assessment order against the correct PAN (as indicated by respondents' counsel) to enable the petitioner to prefer an appeal. The Court clarified that its observations were prima facie and that any appeal must be decided on merits. [Paras 12, 13, 15, 17]

Directed respondents (by respondents' undertaking) to upload the assessment order against the correct PAN to enable the petitioner to appeal within seven days; observations recorded are prima facie only and the appeal must be decided on merits.

Final Conclusion: The petition is dismissed; liberty granted to the petitioner to appeal the assessment order dated 30.03.2022 on all grounds (including those raised in the petition), the respondents undertaking to upload the assessment against the correct PAN to enable filing of the appeal, and the Court's observations being prima facie and not binding on the appellate adjudication.

Validity of reassessment under Section 147 read with Section 144 and Section 144B - Effect of non-compliance with notices and failure to file return or reply - Opportunity of being heard / compliance with procedural requirements - Rectification of orders under Section 154 - Mandamus to dispose rectification applications within a fixed time

Validity of reassessment under Section 147 read with Section 144 and Section 144B - Effect of non-compliance with notices and failure to file return or reply - Opportunity of being heard / compliance with procedural requirements - Impugned assessment orders for assessment years 2015-16, 2016-17 and 2017-18 passed under Section 147 read with Sections 144 and 144B were challenged and the petitions were dismissed. - HELD THAT: - The Assessing Officer issued notices under Section 148 on 26.03.2021 to which the petitioners did not respond, no return was filed and no explanation was furnished. A questionnaire under Section 142(1) issued on 15.11.2021 elicited a reply on 07.12.2021 stating that the firm had been succeeded by a company; that reply was by a partner of the erstwhile firm and the address of the firm and the company is the same. A further notice under Section 142(1) dated 09.03.2022 called for response by 11.03.2022, to which the petitioners again did not respond. The Court found that sufficient opportunity had been afforded to the assessees and that the Assessing Authority's procedure in proceeding with assessment was not infirm. The mere filing of the earlier letter did not excuse non-compliance with earlier and subsequent notices. On these findings the challenge to the reassessments was rejected and no interference was warranted under Article 226. [Paras 4, 5, 6, 7, 8]

Writ petitions challenging the assessment orders for AYs 2015-16, 2016-17 and 2017-18 dismissed; impugned assessments upheld.

Rectification of orders under Section 154 - Mandamus to dispose rectification applications within a fixed time - Writ petitions seeking direction to consider rectification applications under Section 154 were disposed by directing the respondents to decide the applications within a specified time. - HELD THAT: - Petitions seeking mandamus for disposal of rectification applications dated 05.05.2022 were considered. Learned Standing Counsel for respondents accepted that a time frame for disposal may be fixed. The Court directed the respondents to hear the petitioners and dispose of the rectification applications within sixteen weeks from receipt of a copy of the order, thereby securing judicially supervised expeditious disposal without adjudicating the merits of the rectification claims. [Paras 9, 10, 11]

Rectification applications dated 05.05.2022 to be disposed of by the respondents within sixteen weeks from receipt of a copy of this order; writ petitions seeking such mandamus disposed accordingly.

Final Conclusion: The challenges to the reassessment orders for AYs 2015-16, 2016-17 and 2017-18 were dismissed for lack of infirmity in the procedure and for non-compliance with notices; separate petitions seeking disposal of rectification applications dated 05.05.2022 were allowed in part by directing the respondents to decide them within sixteen weeks.

Assessment of bank deposits as unexplained credit - operation of bank account by joint signatory - clubbing of income under section 64(1A)

Assessment of bank deposits as unexplained credit - operation of bank account by joint signatory - clubbing of income under section 64(1A) - Whether the cash deposits in the bank account standing in the name of the assessee's son could be assessed as unexplained credit in the hands of the assessee. - HELD THAT: - The Tribunal found that the bank account in question belonged to the assessee's son, who was a minor when the account was opened but became a major on 23.05.2011 and was assessable in his independent capacity. Although the assessee's PAN had been furnished at account opening and the account was operated by both father and son, the statutory clubbing provision relied upon by the Revenue, viz. clubbing of income under section 64(1A), applies only in respect of income of a minor child. The lower authorities had treated the unaccounted portion of cash deposits as the assessee's income on the basis that the account was operated jointly and because the assessee's PAN was recorded; but the Tribunal concluded that, on the material before it, the son was independently assessable and the clubbing provision was not applicable. In these circumstances the Tribunal held that the addition of the impugned deposits to the assessee's income was not sustainable and therefore deleted the addition.

Addition of the impugned cash deposits in the hands of the assessee is deleted; the assessee's appeal is allowed.

Final Conclusion: The appeal is allowed: the addition of the impugned cash deposits of Rs.13.73 lacs in the assessee's hands is overturned and deleted, since the account belonged to the son who was a major and the clubbing provision for a minor was inapplicable.

Filing of Form-10CCB - deduction under section 80-IB - directory versus mandatory compliance - disallowance for non-compliance

Filing of Form-10CCB - deduction under section 80-IB - directory versus mandatory compliance - disallowance for non-compliance - Whether the deduction claimed under section 80-IB could be allowed where Form-10CCB was not filed along with the return of income. - HELD THAT: - The Tribunal examined the claim that a technical error in the online portal prevented filing/uploading of Form-10CCB with the original return and noted that the assessee (through its representative) failed to produce any contemporaneously prepared Form-10CCB for the date of filing the return. The CIT(A) had accepted the assessee's plea without calling for verification of the claimed contemporaneous Form-10CCB. The Tribunal found that the only documentary proof produced showed online submission of Form-10CCB on 19/03/2018, which did not establish that the form was prepared and filed with the return filed earlier. In the absence of the requisite form filed along with the return, the Assessing Officer's rejection of the claim for deduction under section 80-IB was held to be in accordance with law. The Tribunal therefore set aside the CIT(A)'s deletion of the addition and upheld the AO's disallowance. [Paras 6]

The disallowance of the deduction under section 80-IB for non-filing of Form-10CCB with the return is upheld and the order of the CIT(A) is quashed.

Final Conclusion: Revenue's appeal is allowed; the addition made by the Assessing Officer for failure to file Form-10CCB with the return (thereby disallowing the section 80-IB deduction) is sustained and the CIT(A)'s order deleting the addition is set aside.

Reasonable limitation period for initiating proceedings under 201/201(1A) (four years) - Non applicability of the extended time limit provision in 201(3) to non residents - Bar on re recovery where tax has been determined and discharged by the non resident payee - Inapplicability of deeming under section 50C to extend TDS liability under section 195 (as argued)

Reasonable limitation period for initiating proceedings under 201/201(1A) (four years) - Whether the proceedings under sections 201/201(1A) against the assessee were time barred - HELD THAT: - The Tribunal followed authoritative decisions holding that proceedings under sections 201/201(1A) must be initiated within a reasonable period, which the Tribunal adopts as four years. Applying that principle to the admitted facts - payment/transaction in FY 2010 11 (relevant to AY 2011 12) and initiation of the notice/order after a lapse of more than four years - the notice and consequent order passed beyond the four year period are barred by limitation. The Tribunal relied on earlier High Court and Tribunal precedent and the Supreme Court guidance that proceedings under section 201 cannot be allowed to continue without temporal limitation, and therefore the departmental action initiated after the four year period cannot be sustained. [Paras 7, 8]

Proceedings under sections 201/201(1A) initiated beyond four years are barred by limitation; the order is unsustainable on that ground.

Non applicability of the extended time limit provision in 201(3) to non residents - Whether the extension of time under section 201(3) can be invoked to validate the delayed proceedings in respect of payments to a non resident - HELD THAT: - The Tribunal observed that section 201(3) (as amended and interpreted in some authorities) applies to residents and does not extend the limitation for initiating proceedings against payers in respect of payments to non residents. Consequently, the departmental reliance on any extended time limit under section 201(3) is inapplicable to the facts where the payment was made to an NRI, and such reliance cannot cure the delay beyond the four year period established for sections 201/201(1A). [Paras 7, 9]

Section 201(3) cannot be invoked to extend limitation for proceedings in respect of payments to non residents; extension relied on by Revenue is not applicable.

Bar on re recovery where tax has been determined and discharged by the non resident payee - Whether the assessee (payer) can be held as an assessee in default under section 201 after the non resident payee has been assessed and discharged the tax on the capital gains - HELD THAT: - The Tribunal noted that the non resident seller filed returns, admitted capital gains, and an assessment under section 143(3) r.w.s. 147 was completed accepting the return. Having regard to those facts and established principle against double recovery, once the payee's tax liability for the transaction has been determined and discharged by the non resident, the payer cannot be subjected to a fresh tax demand for the same tax under section 201/195. The Tribunal also observed that the AO in the non resident's assessment ought to have applied the SRO value under section 50C, but that factual determination did not permit re taxation of the assessee who had been treated as payer of the consideration. [Paras 9]

Where the non resident payee's tax on the same transaction has been determined and accepted, the payer cannot be made to suffer a separate tax demand under section 201 for the same liability; departmental action is barred.

Final Conclusion: The Tribunal allowed the appeal, quashed the order treating the assessee as an assessee in default under sections 201/201(1A) for AY 2011 12 - holding the proceedings to be time barred (four year rule), rejecting reliance on section 201(3) to extend limitation for non residents, and noting that the payee's assessment and discharge of tax preclude re recovery from the payer.

Characterisation of expenditure as capital or revenue - allowability of public issue/IPO expenses as revenue expenditure under section 37(1) - deduction of public issue expenses under section 35D - binding precedent of the Supreme Court in Brooke Bond India Ltd on capital character of expenses incurred for enhancement of capital base - nexus between expenditure and purpose of business

Characterisation of expenditure as capital or revenue - allowability of public issue/IPO expenses as revenue expenditure under section 37(1) - deduction of public issue expenses under section 35D - binding precedent of the Supreme Court in Brooke Bond India Ltd on capital character of expenses incurred for enhancement of capital base - Whether the entire public issue expenses of the assessee are allowable as revenue expenditure under section 37(1) or are governed by section 35D permitting deduction of one-fifth thereof for AY.2009-10. - HELD THAT: - The Tribunal examined the assessee's claim to treat the full issue expenses as revenue expenditure under section 37(1) after the Assessing Officer had allowed one-fifth under section 35D. The CIT(A) had allowed the entire amount relying on a broad nexus approach and authorities including SA Builders Ltd. The Tribunal applied the binding ratio of the Supreme Court in Brooke Bond India Ltd, which holds that expenses incurred in connection with enhancement of the capital base retain the character of capital expenditure even if the enlarged capital incidentally aids the business or working capital. The Tribunal concluded that this precedent governs the present facts and that expenditure directly related to raising capital cannot be recharacterised as revenue expenditure under section 37(1). Consequently, the Assessing Officer's treatment-allowing one-fifth of the public issue expenses under section 35D-was correct, and the CIT(A)'s allowance of the full amount under section 37(1) was in error. [Paras 9, 10]

The claim for the entire public issue expenses under section 37(1) was rejected; the Assessing Officer's allowance of one-fifth under section 35D is restored.

Final Conclusion: Revenue's appeal is allowed; the CIT(A)'s order permitting full deduction under section 37(1) is set aside and the Assessing Officer's order allowing one-fifth of the public issue expenses under section 35D is restored.

Assessment under section 153A - search and seizure - incriminating material - unabated assessment - bogus/accommodation entries - peak credit/peak investment method - burden to prove genuineness of transactions - corroboration by contemporaneous business records and banking channels - genuineness of payments to labour contractors - retainership fees - disallowance not justified where agreement and invoices exist

Assessment under section 153A - incriminating material - bogus/accommodation entries - peak credit/peak investment method - corroboration by contemporaneous business records and banking channels - Addition on account of alleged bogus/accommodation purchases (including purchases from Vitrag/Vitraag Jewels and other named parties) in assessments completed under section 153A. - HELD THAT: - The Tribunal found that the assessments for the relevant years had attained finality before the search and therefore additions under section 153A could be sustained only if based on incriminating material seized during the search. For the purchases in dispute (notably the purchases from Vitrag/Vitraag Jewels), the AO's prima facie premise relied on information received later in respect of other groups and on non-response to notices issued in unrelated inquiries; the AO had not issued a notice under section 133(6) to Vitrag and became aware of the third party information only shortly before passing the order. The assessee had filed purchase invoices, corresponding sales, stock records and bank evidence showing payments through banking channels; there was no discrepancy in quantities and no seized document from the assessee's search that incriminated these purchases. The peak investment/peak credit methodology applied by the AO was therefore speculative and not anchored to incriminating material found in the assessee's search. Consequently the additions were not sustainable either on the ground of lack of incriminating material within the scope of section 153A or on merits where contemporaneous records and banking evidence corroborated the transactions. [Paras 25, 26, 38]

Additions in respect of alleged bogus/accommodation purchases for AYs 2006-07, 2007-08, 2008-09 and 2009-10 deleted.

Genuineness of payments to labour contractors - corroboration by contemporaneous business records and banking channels - burden to prove genuineness of transactions - Disallowance of labour charges paid to three labour contractors for AY 2006-07. - HELD THAT: - Although the AO relied on search-recorded material (blank signed cheques, letterheads and statements) to suspect that certain contractors were sham, the assessee produced detailed supporting material - invoices, debit notes, its own bank statements showing payments, the contractors' bank statements showing receipt, ledger accounts, confirmations and contractors' income tax returns - and evidence of statutory compliances (payroll registers, PF/ESIC/other intimations and challans) corroborating that the contractors provided labour and statutory dues were complied with. Statements relied upon by revenue showed the mechanism of routing payments through contractors' bank accounts to employees and did not contradict that services were rendered or that payments reached employees. Once these contemporaneous records were produced and not satisfactorily rebutted, no adverse inference could sustain the disallowance. [Paras 27, 29, 30]

Disallowance of labour charges aggregating to the stated amount for AY 2006-07 deleted.

Retainership fees - disallowance not justified where agreement and invoices exist - corroboration by contemporaneous business records and banking channels - Disallowance of legal and professional fees paid to two advocates (retainership payments) for AYs 2007-08, 2008-09 and 2009-10. - HELD THAT: - The assessee had entered into retainership agreements with the professionals, received invoices and effected payments through banking channels with TDS compliance; details and supporting documents were placed before the tax authorities. The fact that services rendered did not yield substantial or visible results does not vitiate the claim where a bona fide agreement, invoices and bank payments exist and parties are unrelated. The Tribunal held that mere absence of demonstrable outcome or an earlier statement by a director cannot, in the face of agreements and documentary evidence, justify disallowance. [Paras 46]

Disallowances of professional fees for the stated years deleted.

Final Conclusion: For AYs 2006-07, 2007-08, 2008-09 and 2009-10 the Tribunal deleted the additions and disallowances challenged by the assessee: additions in respect of alleged bogus/accommodation purchases were struck down for lack of incriminating material within the scope of section 153A and on the merits given corroborative contemporaneous records; disallowances of labour contractor payments and retainership professional fees were deleted where agreements, invoices, bank payments and statutory compliance documents sufficiently established genuineness. All appeals allowed.

Moratorium under section 14 of the Insolvency and Bankruptcy Code, 2016 - prohibition on institution or continuation of suits or proceedings against the corporate debtor during CIRP - overriding effect of the Insolvency and Bankruptcy Code - Corporate Insolvency Resolution Process (CIRP) - requirement to have the Interim Resolution Professional / Resolution Professional impleaded to prosecute or defend proceedings

Moratorium under section 14 of the Insolvency and Bankruptcy Code, 2016 - prohibition on institution or continuation of suits or proceedings against the corporate debtor during CIRP - overriding effect of the Insolvency and Bankruptcy Code - Continuation of the cross appeals during the moratorium imposed by CIRP is barred and not permissible. - HELD THAT: - The Tribunal held that once the National Company Law Tribunal admitted the insolvency petition and ordered commencement of the CIRP, the moratorium declared under the Code prohibits institution or continuation of suits or proceedings against the corporate debtor, including appeals, until completion of CIRP or until the NCLT approves a resolution plan or orders liquidation. The Tribunal relied on the Supreme Court's ruling that proceedings instituted or continued in breach of the moratorium are non est in law, and on the decisions in Monnet Ispat & Energy Ltd. (affirmed by the Supreme Court) to conclude that the Code has overriding effect over inconsistent statutory provisions. Applying these principles, the Tribunal found the present cross appeals to be a continuation of pending proceedings against the corporate debtor and therefore barred during the subsistence of the moratorium. [Paras 4, 7, 8]

The appeals constitute continuation of proceedings prohibited by the moratorium and cannot be proceeded with while CIRP/moratorium continues.

Corporate Insolvency Resolution Process (CIRP) - requirement to have the Interim Resolution Professional / Resolution Professional impleaded to prosecute or defend proceedings - Whether the appeals in their present form are maintainable when filed by the company's directors after initiation of CIRP without impleading the Interim Resolution Professional/Resolution Professional. - HELD THAT: - The Tribunal observed that after initiation of CIRP the management and conduct of litigation vests with the Interim Resolution Professional/Resolution Professional appointed under the Code, and that filings made by the company's directors post-initiation are functus officio. The appeals before the Tribunal were filed by the director of the assessee and the Interim Resolution Professional/Resolution Professional was not impleaded by filing revised Form No.36 by either party. For these reasons the appeals in their present form were held not maintainable. [Paras 9, 10]

The appeals are not maintainable in the present form because they were filed/continued by persons who no longer have authority after commencement of CIRP and the IRP/ RP was not impleaded.

Final Conclusion: Following the supremacy and moratorium effects of the Insolvency and Bankruptcy Code, 2016, the Tribunal dismissed the cross appeals as not maintainable while CIRP/moratorium continues and because the Interim Resolution Professional/Resolution Professional was not impleaded; liberty was granted to recall the order and revive proceedings after the moratorium by impleading the proper representative of the corporate debtor.

Jurisdiction under section 263 - claim of deduction under section 80P(2)(a)(i) - regular assessment under section 143(3) - assessment vitiated by lack of enquiry - precedential value of coordinate bench decision

Jurisdiction under section 263 - claim of deduction under section 80P(2)(a)(i) - assessment vitiated by lack of enquiry - precedential value of coordinate bench decision - Validity of the Commissioner's revision under section 263 seeking re-opening of the assessment for disallowance of deduction claimed under section 80P(2)(a)(i) in respect of interest earned on bank deposits. - HELD THAT: - The PCIT held the AO's order under section 143(3) to be erroneous and prejudicial because the AO allegedly failed to make enquiries prima facie warranted before allowing the section 80P(2) deduction for interest on deposits with banks. The Tribunal examined precedents and identified that a coordinate bench in an identical factual matrix had held such interest on surplus funds deposited with banks to be eligible for exemption under section 80P(2)(a)(i), noting a division of judicial opinion across High Courts but following the coordinate bench view favourable to the assessee. In view of the coordinate bench decision and the discussion in the order, the Tribunal concluded that the PCIT erred in invoking revisionary power under section 263 in the present case and that the revision directions were not sustainable in law. [Paras 2, 3, 4]

The PCIT's revision under section 263 is reversed and the assessment order dated 14.06.2016 is held not to be erroneous insofar as it allowed the section 80P(2) deduction on interest earned on bank deposits.

Final Conclusion: The appeal is allowed: the Commissioner's revision under section 263 is set aside and the assessment framed under section 143(3) is sustained to the extent it allowed deduction under section 80P(2)(a)(i) for interest on bank deposits, following the coordinate bench view.

Unexplained cash deposits under section 69A of the Income-tax Act - Deposits made during demonetisation - Past withdrawals as source of deposited cash - Acceptance of creditor confirmations as proof of source - Application of CBDT instruction No. 3 of 2017 - Allowing plausible explanation in favour of an elderly taxpayer

Unexplained cash deposits under section 69A of the Income-tax Act - Deposits made during demonetisation - Past withdrawals as source of deposited cash - Acceptance of creditor confirmations as proof of source - Application of CBDT instruction No. 3 of 2017 - Allowing plausible explanation in favour of an elderly taxpayer - Deletion of the addition of Rs.4,72,523/- treated as unexplained money u/s 69A and allowance of the assessee's appeal. - HELD THAT: - The Assessing Officer treated part of the cash deposits made during the demonetisation period as unexplained and added Rs.4,72,523/- to income under section 69A after accepting creditor confirmations amounting to Rs.3,54,477/- and allowing only Rs.2,50,000/- from the assessee's asserted past withdrawals. The AO rejected the claim that earlier small withdrawals aggregating Rs.9,94,862/- during 2013-14 to 2016-17 were available for deposit, reasoning that periodic small withdrawals were for day-to-day expenses. The CIT(A)-NFAC upheld that view, relying also on the CBDT instruction and the AO's examination of confirmations. The Tribunal, however, found merit in the assessee's explanation that, being an elderly pensioner, she could plausibly have retained part of prior withdrawals as cash for emergencies and that there was no evidence of expenditure of such magnitude (for acquisitions or family events) inconsistent with the deposits. Having considered the totality of facts and the absence of contrary material showing consumption of the earlier withdrawals, the Tribunal concluded that the Assessing Officer and the CIT(A)-NFAC were not justified in confining the available cash to Rs.2,50,000/-, and therefore set aside the addition and directed deletion by the Assessing Officer. [Paras 9, 10, 11]

The addition of Rs.4,72,523/- as unexplained cash under section 69A is deleted and the assessee's appeal is allowed.

Final Conclusion: The Tribunal allowed the appeal for A.Y. 2017-18, set aside the orders of the Assessing Officer and the CIT(A)-NFAC sustaining the addition under section 69A, and directed deletion of the addition after accepting the assessee's explanation that prior withdrawals and confirmed loans/advances accounted for the deposits.

Unexplained credit - burden of proof on assessee to substantiate source of credit - evidentiary value of self-serving document - timing of receipt and its relevance to assessment year - treatment as income from other sources - addition under section 115 BBC

Unexplained credit - burden of proof on assessee to substantiate source of credit - evidentiary value of self-serving document - timing of receipt and its relevance to assessment year - addition under section 115 BBC - Whether the sum of Rs.43 lakhs shown in the personal account was satisfactorily explained as sale consideration of agricultural land and therefore not exigible to be added to the assessee's income for AY.2016-17 - HELD THAT: - The Tribunal found that the only documentary foundation for the claim was an agreement dated 06/11/2015 which recorded receipt of Rs.1 lakh and provided for future payments on specified dates. There was no evidence on record to show that the balance payments stipulated in the agreement were actually made on those dates. The authorities below recorded that four registered sale deeds executed on 22/06/2016 evidenced aggregate consideration of Rs.23.77 lakhs, which in any event fell in the financial year relevant to AY.2017-18 and therefore could not explain the credit disclosed for AY.2016-17. The agreement was held to be self-serving and of no evidentiary value to establish receipt of Rs.43 lakhs in the relevant previous year. Further, an unchallenged factual finding was that the assessee had acquired properties valued earlier (on 30/06/2015) and that amounts declared during survey were available for telescoping against the credit issue. On these grounds the Tribunal concluded that the assessee failed to discharge the onus of proof to substantiate the claimed sale proceeds and that the addition made by the assessing officer and confirmed by the CIT(A) was justified and correctly treated under the relevant provision. [Paras 8, 9, 10, 11]

The addition of Rs.43 lakhs as unexplained credit was sustained; the assessee failed to prove receipt of the said consideration in the relevant year and the findings of the authorities below were not interfered with.

Final Conclusion: Appeal dismissed; addition of the disputed amount in respect of AY.2016-17 upheld as the assessee did not satisfactorily substantiate the source and timing of the alleged sale proceeds.

Unexplained investment in jewellery - search and seizure - valuation of seized jewellery by registered valuer - set off of declared wealth against assets found on search - reconstruction of sources by reference to bank withdrawals - market value on date of search/valuation - remand for quantification and verification

Unexplained investment in jewellery - set off of declared wealth against assets found on search - reconstruction of sources by reference to bank withdrawals - market value on date of search/valuation - remand for quantification and verification - Whether the addition on account of jewellery found on search is sustainable or requires fresh quantification by comparing declared jewellery (by weight/value) and available withdrawals, and whether the matter should be remanded to the Assessing Officer for that exercise. - HELD THAT: - The Tribunal found that neither the Assessing Officer nor the Commissioner (Appeals) had undertaken the determinative exercise of comparing the physical quantity (weight) of gold and diamonds seized on the date of search with the quantity/value disclosed in the assessee's wealth tax returns, nor had they properly adjusted for subsequent acquisitions by reference to available cash withdrawals. The appellate authority applied a lump-sum market valuation without reconciling weights and purchases, and credited certain declared values and partial withdrawals without the granular quantification required. The Tribunal directed that the Assessing Officer should, on remand, quantify the weight of gold and diamonds found on search and ascertain the quantity/value declared in earlier wealth tax returns; where past returns show consolidated values without quantities, the AO is to translate declared value into physical quantity by adopting market value as on the date of valuation/search. Thereafter the AO must allow credit for legitimate new purchases to the extent supported by available cash withdrawals (with market-value reconciliation), decide the balance as per law after giving the assessee an opportunity of being heard, and complete the exercise of computation and verification afresh.

Issue is remitted to the Assessing Officer with directions to quantify seized jewellery by weight/value against declared wealth, convert consolidated declared values into quantities using market value on the date of valuation where necessary, and to allow credit for purchases supported by withdrawals before determining any unexplained investment.

Final Conclusion: The Tribunal set aside the additions sustained by the CIT(A) and remanded the matter to the Assessing Officer for the specified quantification and verification exercise; the appeal is allowed for statistical purposes.

Validity of reopening under section 147 - Sanction for issuance of notice under section 148 - Authority to grant sanction under section 151(2) - Invalidity of proceedings for lack of prescribed sanction - Statutory requirement that an act be performed by the authority prescribed by law

Validity of reopening under section 147 - Sanction for issuance of notice under section 148 - Authority to grant sanction under section 151(2) - Invalidity of proceedings for lack of prescribed sanction - Reopening of assessment under section 147 and notice under section 148 held invalid for lack of sanction by the authority prescribed in section 151(2), rendering the consequent assessment order liable to be quashed. - HELD THAT: - The return for AY 2004-05 was processed under section 143(1) and no scrutiny assessment under section 143(3) had been made. Section 151(2) therefore required that sanction for issuance of notice under section 148 be granted by an officer of the rank of Joint Commissioner (JCIT). The reasons-recorded form produced on record showed that approval was in fact granted by the Commissioner of Income Tax, not the JCIT. The Tribunal applied the settled principle that when a statute prescribes a particular authority to perform an act, that act must be performed by the prescribed authority and cannot be validated by the action of a superior officer. Reliance was placed on the jurisdictional High Court decisions which hold that sanction given by a superior officer does not cure the absence of sanction by the officer specifically designated by section 151(2). Accordingly, since the mandatory requirement of section 151(2) was not complied with, the notice under section 148 was invalid and the assessment completed pursuant thereto under section 143(3) read with section 147 was unsustainable and quashed. In view of this conclusion, other contentions on merits became academic and were not decided on the merits. [Paras 9, 10, 11, 12]

Notice under section 148 invalid for want of sanction by the JCIT as required by section 151(2); assessment under section 143(3) read with section 147 quashed.

Final Conclusion: The appeal is allowed: the reopening notice under section 148 was invalid for absence of sanction by the authority prescribed in section 151(2), and the assessment order passed pursuant thereto is quashed; other issues became academic.

Best judgment assessment under section 144 - Service of notices under sections 142(1) and 143(2) as foundation for assessment - Application of estimated profit rate to unexplained bank deposits - Disallowance of undisclosed interest income reflected in Form 26AS - Condonation of delay in filing appeal on medical grounds

Condonation of delay in filing appeal on medical grounds - Delay in filing the appeal was condoned and the appeal admitted for adjudication. - HELD THAT: - The assessee's appeal was time-barred by 354 days. The reasons on record, namely the illness of the assessee which prevented timely filing, were examined. The Tribunal found the cause reasonable and, in the larger interest of justice, exercised its discretion to condone the delay and admit the appeal. [Paras 2]

Delay condoned and appeal admitted.

Best judgment assessment under section 144 - Service of notices under sections 142(1) and 143(2) as foundation for assessment - Validity of framing assessment under section 144 was upheld. - HELD THAT: - The Assessing Officer had issued and served notices under sections 142(1) and 143(2) to the assessee, who failed to appear or comply. Given the service of those notices and the assessee's non-response, the AO was justified in proceeding to make a best judgment assessment under section 144. The Tribunal found no controversion of service or opportunity and therefore dismissed the challenge to the validity of the assessment. [Paras 9]

Assessment under section 144 sustained.

Application of estimated profit rate to unexplained bank deposits - Addition made by applying net profit rate of 8% on total bank deposits, after giving credit for declared income, was confirmed. - HELD THAT: - The AO found total bank deposits substantially exceeded the turnover declared in the return. Treating total deposits as turnover, the AO applied a net profit rate of 8% on the deposits to compute presumed net profit and then allowed benefit of the net profit declared by the assessee on his declared turnover. The resulting addition represented the difference between the computed net profit on deposits and the net profit declared. The Tribunal agreed with the AO's approach and with the CIT(A)'s confirmation, observing that the AO's method of estimating income from unexplained deposits was reasonable on the facts. [Paras 10]

Addition of undisclosed profit on unexplained bank deposits confirmed.

Disallowance of undisclosed interest income reflected in Form 26AS - Addition of interest income shown in Form 26AS but not declared in return was sustained. - HELD THAT: - Interest income of the assessee appearing in the Form 26AS was not offered to tax in the return. The fact of its appearance in Form 26AS and the corresponding tax deposited were not controverted by the assessee. On this basis the CIT(A) rightly confirmed the AO's addition of that interest income to the assessed income. [Paras 11]

Addition of interest income as per Form 26AS confirmed.

Final Conclusion: The Tribunal condoned the delay, admitted the appeal, and after hearing the Departmental Representative dismissed the appeal on merits by upholding the best judgment assessment under section 144, confirming the addition computed by applying an estimated net profit rate to unexplained bank deposits, and confirming the addition of undisclosed interest income reflected in Form 26AS.

Time limit for assessment under section 153 - service versus passing of assessment order - deduction under section 80IB(10) - competent local authority approval for housing project - meaning of allotment for housing units - burden of proof for claim of exemption/deduction - remand to assessing officer for verification of material facts - treatment of unrecorded/on money receipts by estimating net profit - application of coordinate bench precedent for estimating taxable net profit

Time limit for assessment under section 153 - service versus passing of assessment order - Validity of assessment order dated 31.03.2013 challenged as being beyond the statutory time limit where service occurred on 03.04.2013. - HELD THAT: - The Tribunal found that for AY 2010-11 the assessing officer was required to frame the assessment within two years from the end of the assessment year, which ends on 31.03.2013. The assessment order bears date 31.03.2013 and therefore was within the statutory time limit. Service of the order on the assessee on 03.04.2013 does not mean the order was passed on that date. The assessee failed to produce cogent documentary proof that the order was passed after the statutory period; mere assertion of delayed service is insufficient to annul the assessment. [Paras 4, 6]

Ground challenging limitation is dismissed; assessment dated 31.03.2013 held to be within time.

Deduction under section 80IB(10) - competent local authority approval for housing project - meaning of allotment for housing units - burden of proof for claim of exemption/deduction - remand to assessing officer for verification of material facts - Allowability of deduction under section 80IB(10) remitted to assessing officer for fresh adjudication after verification of approvals and documentary evidence. - HELD THAT: - The Tribunal observed that the Assessing Officer and the CIT(A) found that basic conditions of section 80IB(10) were not met (project approval date, nature of agreements, and whether assessee was effectively a developer or merely a contractor selling plots). Relevant documents (letters of Bardoli Nagarpalika and Nagar Niyojan, town planner) were placed before the Tribunal but were not examined below. Given the assessee's onus to satisfy the conditions for the deduction and the Revenue's contention regarding competence of the authority issuing approval, the Tribunal remitted the matter to the Assessing Officer to examine whether the project was sanctioned by a competent authority and to permit the assessee to produce relevant evidence. The Tribunal also noted the principle that exemption/deduction claims must be strictly proved by the claimant. [Paras 15, 18]

Issue remitted to the file of the Assessing Officer for fresh adjudication and verification of documents; ground allowed for statistical purposes.

Treatment of unrecorded/on money receipts by estimating net profit - application of coordinate bench precedent for estimating taxable net profit - Addition of alleged unrecorded/development receipts directed to be taxed by estimating net profit at 6% as per coordinate bench precedent. - HELD THAT: - The Tribunal followed a prior coordinate bench decision in the assessee's own case which estimated taxable net profit at 6% on on money/unrecorded receipts. Since the present addition treated development/construction receipts as unrecorded/on money, the AO was directed to compute tax by assessing net profit at 6% on the disputed receipts rather than adding the entire receipts as income. [Paras 21, 22]

Ground partly allowed; AO directed to tax net profit at 6% on the alleged unrecorded receipts.

Final Conclusion: The Tribunal dismissed the limitation challenge to the assessment dated 31.03.2013; remitted the claim for deduction under section 80IB(10) to the Assessing Officer for fresh examination of project approvals and supporting documents; and partly allowed the challenge to addition of unrecorded receipts by directing the AO to tax net profit at 6% on such receipts in accordance with the coordinate bench precedent.

Discharge under Section 245(2) Cr.P.C. - cognizance - "check and call on" stage - prematurity of discharge application - leave to file discharge after cognizance

Discharge under Section 245(2) Cr.P.C. - cognizance - "check and call on" stage - prematurity of discharge application - Whether an application to drop or discharge proceedings under Section 245(2) Cr.P.C. is maintainable at the "check and call on" stage before the complaint is taken on file or cognizance is taken by the Magistrate. - HELD THAT: - The Court held that Section 245(2) Cr.P.C. empowers a Magistrate to discharge an accused at any previous stage of the case, but the phrase "previous stage" contemplates stages from taking cognizance under Section 200 Cr.P.C. onwards (including stages up to completion of prosecution evidence under Section 244). Mere presentation of a complaint adjourned as "check and call on", where the complaint is not numbered, the sworn statement not recorded and no authoritative notice or application of mind by the Magistrate has occurred, does not amount to cognizance. Consequently, an application couched as one for dropping proceedings at that pre-cognizance stage is premature and not maintainable. The court distinguished the procedural threshold for discharge and confined the ambit of "any previous stage" to stages where the Magistrate has taken authoritative notice of allegations (i.e., the Section 200 onwards stages). [Paras 18, 19, 20, 21, 22]

Application for dropping proceedings filed at the "check and call on" stage is premature and not maintainable; the Magistrate erred in entertaining it at that stage.

Leave to file discharge after cognizance - finality of quasi-judicial penalty order - departmental sanction and circulars - retracted/confession and duress - Whether the other grounds raised for discharge (reliance on appellate/quasi judicial penalty findings, departmental sanction circulars, and alleged retracted confession obtained under duress) were to be adjudicated at this stage. - HELD THAT: - The Court declined to examine the merits of the other grounds urged by the accused for discharge. Having sustained the preliminary objection of prematurity, the Court left those contentions open for consideration by the Magistrate at the appropriate stage after cognizance. Thus, issues regarding the binding effect of the Appellate Authority's penalty findings, applicability or breach of departmental circulars relating to sanction, and the evidentiary value of a retracted confession (including allegations of duress) were not decided on merits and remain for adjudication by the trial court. [Paras 23, 24]

Other grounds for discharge are left open for consideration by the Magistrate after cognizance; accused permitted to move Section 245(2) Cr.P.C. post cognizance.

Final Conclusion: The High Court set aside the Magistrate's order dropping proceedings as premature, held that discharge applications under Section 245(2) Cr.P.C. cannot be entertained at the "check and call on" pre cognizance stage, directed the Magistrate to proceed with the complaint in accordance with law, and left all other grounds for discharge to be raised and decided after cognizance (with liberty to the accused to apply under Section 245(2) Cr.P.C. thereafter).

Principles of natural justice - vicarious liability of directors - requirement of specific allegations in show cause notice against directors under the Foreign Trade (Development and Regulation) regime - duty of licensing/inspecting authority to verify public records (Registrar of Companies) and to issue individual notices identifying role of directors

Principles of natural justice - requirement of specific allegations in show cause notice against directors under the Foreign Trade (Development and Regulation) regime - vicarious liability of directors - Validity of adjudication orders imposing penalty on late Mr. Anand S. Bhatt (ex director) where notices were addressed to the company and his name appeared on records despite his earlier resignation - HELD THAT: - The Court found that the impugned orders were directed at TPI for failing to discharge export obligations and that the show cause process and consequential orders contained no specific allegations or findings identifying any act or omission attributable to Mr. Bhatt. The petitioner had produced a resignation letter dated 10.03.1999 and Form 32 filed with the Registrar of Companies, which were not disputed. Notices were issued to the company and, in some instances, forwarded to an incorrect residential address on the premise that Mr. Bhatt continued as a director; no notice was served on him in his individual capacity or inviting him to explain any specific conduct. The Court emphasised that corporate liability cannot be imputed to a director without evidence of that director's personal role or control: vicarious liability requires particularisation of acts attributable to the director. In addition, a licensing or investigative authority like respondent No.2 was expected to verify public records (e.g., ROC filings) and to address communications to identified directors with particulars of alleged misconduct so that each director may have an opportunity to be heard. Because these prerequisites of fair adjudication were not met, prejudice to Mr. Bhatt was held to have occurred and the proceedings against him were void ab initio. [Paras 8, 10, 11, 12, 13]

Impugned adjudication orders insofar as they impose penalty upon Shri Anand S. Bhatt are quashed for failure to comply with principles of natural justice and for lack of specific allegations or evidence attributing personal liability to him; rule made absolute and petition allowed as prayed.

Final Conclusion: The writ petition is allowed; the impugned orders dated 25.07.2008, 12.08.2008, 02.09.2008, 05.09.2008, 15.09.2008, 23.09.2008 and 15/30.09.2008 are quashed insofar as they impose penalty on Shri Anand S. Bhatt for the reasons stated.

Classification of goods under the Customs Tariff - application for settlement before the Settlement Commission - validity of show cause notice (oral notice and subsequent written notice) - jurisdiction of the Settlement Commission to interpret classification

Classification of goods under the Customs Tariff - interpretation of tariff headings 87.02 and 87.03 - effect of admitted facts on classification - Impugned settlement order correctly held the imported vehicle classifiable under CTH 87.02 and not under CTH 87.03. - HELD THAT: - The Settlement Commission's conclusion that the vehicle fell under heading 87.02 follows from the admitted factual finding in the show cause notice that the seating arrangement was for ten persons including the driver. Heading 87.02 covers motor vehicles designed for the transport of ten persons or more (including the driver) and heading 87.03 expressly excludes vehicles classifiable under 87.02. The express reference to "motor homes" in 87.03 relates to vehicles specially equipped for habitation but does not include vehicles designed for ten or more persons which fall within 87.02. The Commission's finding, based on the admission regarding seating capacity and the language of the tariff headings, was therefore correct and there was no reason for interference with the settlement order. [Paras 10, 11, 13, 14, 15]

The classification of the vehicle as falling under CTH 87.02 was upheld and the settlement order on this point is not interfered with.

Validity of show cause notice - admissibility of settlement application - The challenge that no show cause notice was issued was not pressed as a grievance and, in any event, an oral show cause notice is permissible and a written show cause notice was issued on the directions of the Settlement Commission. - HELD THAT: - The petition did not raise non issuance of show cause notice as a substantive grievance; the record shows an oral show cause notice had been given which is permissible under the statute (notice at the request of the person concerned may be oral), and subsequently a written show cause notice was issued on the Settlement Commission's directions. The High Court therefore treated the point as a non issue and confined adjudication to the classification dispute. [Paras 3, 5]

The objection regarding absence of show cause notice was not sustained and the Court restricted its consideration to the classification issue.

Final Conclusion: The petition is dismissed; the Settlement Commission's order upholding classification under CTH 87.02 is maintained. The bank guarantee furnished by respondent No. 2 shall be released and returned to the petitioner within two weeks of a request.

Removal of administrative alert / "Risky Exporter" tag from Indian Customs EDI System - Interim relief cannot be used to grant main relief - Requirement of notice and opportunity before continuing adverse administrative classification - Entitlement and processing of duty drawback and refund of IGST subject to departmental verification - Compliance by assessee (reversal of ITC and payment of penalty) as relevant to continuing adverse action

Removal of administrative alert / "Risky Exporter" tag from Indian Customs EDI System - Requirement of notice and opportunity before continuing adverse administrative classification - Compliance by assessee (reversal of ITC and payment of penalty) as relevant to continuing adverse action - Direction to remove the "Risky Exporter" tag affixed to the petitioner in the Indian Customs EDI System. - HELD THAT: - The court found that the tag against the petitioner was based on the conclusion that certain suppliers were suspected/non existent and that the department had directed reversal of ITC which the petitioner complied with by reversing the credit and paying penalty. The tag had been affixed without notice to the petitioner and, in the absence of any fresh material on record against the petitioner, it was not appropriate to continue branding the petitioner as a "Risky Exporter." The court observed that if the department possesses other material, it remains open to the respondents to put the petitioner on notice and proceed in accordance with law. Balancing protection of revenue and the petitioner's interest, the court directed the competent authority to remove the tag within three weeks from receipt of the order. [Paras 9, 11, 12]

The 2nd respondent is directed to lift/remove the "Risky Exporter" tag relating to the petitioner in the Indian Customs EDI System within three weeks from receipt of the server copy of the order.

Entitlement and processing of duty drawback and refund of IGST subject to departmental verification - Interim relief cannot be used to grant main relief - Requirement of notice and opportunity before adverse departmental action - Direction to process the petitioner's pending duty drawback and IGST refund claims subject to departmental verification and, if required, after issuing notice. - HELD THAT: - The court declined to grant a substantive interim order directing payment of duty drawback or IGST refund but held that the authorities are bound to act in accordance with law. If the department has doubts as to entitlement, it must issue notice to the petitioner and afford an opportunity before denying relief. To ensure expeditious resolution, the court directed the appropriate respondents to process the duty drawback and IGST refund claims within three weeks from receipt of the server copy of the order, after issuing notice if the department considers it necessary. [Paras 10, 12]

The respondents shall process the petitioner's duty drawback and IGST refund claims within three weeks from receipt of the server copy of the order, issuing notice to the petitioner where the department, in its opinion, has doubts as to entitlement.

Final Conclusion: The appeal and writ petition are disposed of: the Customs authority must remove the "Risky Exporter" tag as directed and the department must process the pending duty drawback and IGST refund claims within three weeks, subject to issuance of notice where entitlement is in doubt; no order as to costs.

Extended period of limitation - mis-declaration - transaction value versus MRP/RSP valuation for customs duty - penalty under Section 114A - normal period of limitation

Extended period of limitation - mis-declaration - transaction value versus MRP/RSP valuation for customs duty - Whether the extended period of limitation is invocable for demand of differential customs duty on the basis that duty should have been paid on MRP/RSP instead of the transaction value. - HELD THAT: - The show cause notice alleged that the appellant had failed to declare RSP/MRP at the time of import and only began declaring MRP/RSP suo moto in bills of entry dated 06/10/2009 and 05/01/2010, whereupon the Department initiated investigation. The proprietor's statement recorded on 08/12/2009 disclosed that the appellants had imported since 2004 but had not earlier declared RSP/MRP and that they began declaring MRP/RSP only after becoming aware of the notifications in late 2008/2009. The adjudicating authorities treated non-declaration as intentional concealment amounting to mis-declaration attracting the extended period. The Tribunal, after considering the material, found no affirmative case by Revenue that the appellants had knowledge of the requirement and yet deliberately withheld declaration with intent to evade duty. In the absence of evidence of deliberate concealment or fraud prior to the departmental action, the facts do not satisfy the threshold for invoking the extended period of limitation; therefore the demand must be confined to the normal limitation period applicable to customs demands. [Paras 12, 13]

Extended period of limitation is not invocable; demand limited to the normal period of limitation.

Penalty under Section 114A - normal period of limitation - Whether the penalty imposed under Section 114A can be sustained in view of the Tribunal's finding on limitation and intent. - HELD THAT: - Penalty equal to the duty was imposed by the adjudicating authority on the premise of deliberate mis-declaration. Having held that Revenue did not establish deliberate concealment or intent to evade duty prior to the Department's inquiry and that the extended period of limitation could not be invoked, the rationale supporting imposition of penalty under Section 114A no longer stands. The Tribunal therefore set aside the penalty as consequential to its finding that the extended period was inapplicable and that the requisite mens rea for sustaining the penalty was not made out on the material. [Paras 13]

Penalty under Section 114A set aside.

Final Conclusion: Appeal allowed; demand restricted to the normal period of limitation and the penalty under Section 114A is set aside, with consequential relief to the appellant.

Impleadment of third party purchasers in oppression and mismanagement proceedings - Necessary and proper party test in company petitions under section 397 398 (now 241 242) - Tribunal's limited jurisdiction vis a vis civil rights and pending civil proceedings - Effect of status quo orders passed after transfer of assets

Impleadment of third party purchasers in oppression and mismanagement proceedings - Necessary and proper party test in company petitions under section 397 398 (now 241 242) - Whether the proposed purchasers (respondent no.5 and respondent no.6), being strangers to the company, are necessary parties and liable to be impleaded in the company petition alleging oppression and mismanagement. - HELD THAT: - The Tribunal held that proposed respondent no.5 and proposed respondent no.6 are strangers to respondent no.1 company and are not concerned with the company's internal affairs. Proceedings under section 397 398 (now 241 242) ordinarily concern disputes between shareholders and management; third party purchasers who are bona fide and unconnected with internal management disputes are generally not necessary parties. The petitioner sought to implead the purchasers to challenge the sale deed, but the record shows that proposed respondent no.5 purchased the assets prior to institution of the main company petition and had been made a party to a separate civil suit in which the petitioner's interim application was rejected. Having regard to these factors the Tribunal concluded that the purchasers cannot be dragged into the company petition as necessary parties at this stage and the impleadment prayer is not maintainable. [Paras 8, 9, 10, 11, 14]

Application to implead proposed respondent no.5 and proposed respondent no.6 as parties in the company petition is not maintainable and is rejected.

Tribunal's limited jurisdiction vis a vis civil rights and pending civil proceedings - Effect of status quo orders passed after transfer of assets - Whether this Tribunal can adjudicate the civil right to set aside the sale deed or grant interim relief against purchasers when the same issue is pending in civil courts and whether a status quo order passed after the sale affects purchasers who acquired the assets before that order. - HELD THAT: - The Tribunal observed that the question whether proposed respondent no.5 is a bona fide purchaser and whether the sale deed is void are civil rights that are already the subject of proceedings in the Civil Court (Special Civil Suit No.47 of 2016) and an appeal pending in the High Court. The Tribunal, exercising limited jurisdiction in company petitions under the Companies Act, cannot determine such civil rights which are the subject matter of separate civil litigation. Further, the status quo order passed by the Company Law Board on 16.07.2015 came after the sale deed dated 22.05.2015; therefore, on the date of the status quo the assets had already been transferred to proposed respondent no.5 and allegations against proposed respondent no.6 based on that status quo were unsustainable. The Tribunal also noted that the maintainability of the main company petition itself was pending consideration; an adverse finding on maintainability would render the present application infructuous. For these reasons the Tribunal declined to entertain the application to implead and to decide the validity of the sale deed in the company petition. [Paras 11, 12, 13, 14]

Tribunal will not decide the civil right to set aside the sale deed or disturb purchasers while those issues are pending before civil courts; status quo passed after the sale did not affect purchasers who acquired assets prior to that order, and the application is rejected.

Final Conclusion: The application to implead M/s. Happy Home Corporation (proposed respondent no.5) and M/s. Avadh Projects (proposed respondent no.6) in the main company petition is dismissed as not maintainable: the purchasers are strangers to the company's internal dispute, civil remedies on the sale deed are pending before civil courts which the Tribunal will not adjudicate in these company proceedings, and the status quo order was passed after the sale had taken place.

Existence of undisputed operational debt - Acknowledgement of debt by the corporate debtor - Section 9 IBC admission test - plausibility of dispute - Pre existing dispute requirement - Adjudicating Authority's limited role at the admission stage - Emails and ledger statements as evidence of admission - Input Tax Credit as indicia of receipt and benefit

Existence of undisputed operational debt - Section 9 IBC admission test - plausibility of dispute - Adjudicating Authority's limited role at the admission stage - The Adjudicating Authority rightly admitted the Section 9 application upon finding existence of operational debt and default, and no pre existing plausible dispute. - HELD THAT: - The Tribunal applied the settled principle that at the admission stage under Section 9 of the IBC the Adjudicating Authority need not decide merits but must assess whether a plausible pre existing dispute exists. The application disclosed invoices and ledger entries showing supplies and an admitted balance, the Operational Creditor had issued a demand notice, and no substantive reply disputing the debt was received prior to the demand. The Adjudicating Authority's function is limited to determining whether a bona fide dispute exists; a dispute that is spurious, hypothetical or raised for the first time after the petition will not stave off admission. Applying these parameters, the Tribunal found the dispute raised by the corporate debtor (clubbed accounting, later audit rectification, asserted payments) was not a pre existing, plausible defence sufficient to defeat the Section 9 application, and therefore admission was proper. [Paras 43, 51, 52, 55, 60]

Admit the Section 9 petition; the Adjudicating Authority did not commit material irregularity in admitting the application.

Acknowledgement of debt by the corporate debtor - Emails and ledger statements as evidence of admission - The ledger statements and the email acknowledgement constituted an admission of liability by the corporate debtor sufficient to support the claim of default. - HELD THAT: - The Tribunal relied on the law that an unqualified acknowledgement pointing to an existing liability is an admission and may be relied upon. The corporate debtor, by sending the account copies and the ledger statements (attached to the email dated 21.03.2019) and by not disputing the materials before the demand notice, effectuated an acknowledgement of debt. The Tribunal treated the ledger and email exchange as tangible evidence of acceptance of liabilities and as a basis for concluding that default had occurred in respect of the claimed amount. [Paras 48, 49, 59, 60]

Ledger statements and the corporate debtor's email acknowledgement amount to admission of debt and support admission of the application.

Pre existing dispute requirement - Input Tax Credit as indicia of receipt and benefit - The contentions of clubbed accounting, subsequent auditor's rectification and asserted payments did not constitute a pre existing dispute on the day of demand; moreover, the corporate debtor's availment of Input Tax Credit indicated receipt and benefit of supplies. - HELD THAT: - The Tribunal examined the corporate debtor's factual contentions that purchases of two entities were clubbed and later separated by audit, and that payments shown in bank statements satisfied the claim. It observed that these defences were raised for the first time after the petition and that no reply to the demand notice was filed. The Tribunal also noted the corporate debtor had availed Input Tax Credit, which in substance indicated receipt and benefit of the goods and weakened the plea of non receipt or non entitlement. Therefore, the pleaded accounting corrections and asserted payments did not qualify as a plausible pre existing dispute to defeat admission under Section 9. [Paras 14, 15, 35, 56, 60]

The alleged accounting error, later audit rectification and payment contentions do not amount to a pre existing plausible dispute; admission stands.

Final Conclusion: The appeal is dismissed. The Tribunal upheld the Adjudicating Authority's admission of the Section 9 petition, concluding that the Operational Creditor proved existence of debt and default, the corporate debtor's ledger and email amounted to admission, and the defences raised were not a pre existing plausible dispute capable of defeating admission.

Financial Creditor - Related Party - Corporate Guarantee and maturity of claim / invocation - Right to Payment - Moratorium under Section 14 of the IBC - Control - de jure and de facto; positive control - Locus of a Financial Creditor / Homebuyer to challenge admission of claims

Financial Creditor - Corporate Guarantee and maturity of claim / invocation - Applicability of the ratio in Anuj Jain (IRP of Jaypee Infratech Ltd.) to deny Financial Creditor status where there was no direct disbursal to the corporate guarantor - HELD THAT: - The Tribunal held that Anuj Jain is not applicable to the facts of this case. A guarantee given by a corporate guarantor is an illustration of "financial debt" and amounts disbursed to the principal borrower can constitute financial debt vis-a -vis the corporate guarantor. The determinative question is whether there was a default and whether amounts were due and payable on the date of the claim. Accordingly, non-disbursal directly to the guarantor does not preclude classification as financial debt; the critical inquiry remains default and maturity of the claim. [Paras 11, 12]

The ratio in Anuj Jain is not applicable; disbursement to the principal borrower can constitute financial debt of the corporate guarantor for purposes of Section 5(8) if default and due-ness are established.

Locus of a Financial Creditor / Homebuyer to challenge admission of claims - Authorized Representative - Whether an individual homebuyer (holding a small voting share and not represented through the Authorized Representative) has locus to challenge admission of another creditor's claim and the constitution of the CoC - HELD THAT: - Relying on this Tribunal's earlier observations in Aashray Social Welfare Society and the Supreme Court's direction in Phoenix ARC v. Spade, the Tribunal held that a Financial Creditor who is part of the CoC (even with a small voting share) has the right to be heard in proceedings determining the status of other Financial Creditors. The clarification in Regulation 16A(5) that an Authorized Representative has no role in receipt or verification of claims does not strip individual creditors of the right to challenge verification or admission of claims. Consequently, the first respondent/homebuyer had locus to file the challenge despite not being represented by an AR. [Paras 14, 15]

A single homebuyer who is a Financial Creditor has locus to challenge admission of another creditor's claim and to be heard; filing through the Authorized Representative is not a precondition to challenge verification/admission.

Corporate Guarantee and maturity of claim / invocation - Moratorium under Section 14 of the IBC - Right to Payment - Whether a claim by guarantee-holders can be admitted in the CIRP of a corporate guarantor where the corporate guarantee was not invoked (and was invoked only after commencement of CIRP) - HELD THAT: - The Tribunal applied the settled principle in Ghanshyam Mishra (and related authorities) that an uninvoked corporate guarantee as on the date of filing a claim cannot be treated as a matured claim; once moratorium under Section 14 applies, invocation of a corporate guarantee post-commencement is impermissible and the guarantor's liability does not crystallise. The record showed the guarantee was invoked after CIRP commencement and no notice under the guarantee clause was issued prior to CIRP; the RP of the principal borrower had also rejected the lender's claim. Thus, the Appellants failed to establish that the 'right to payment' had accrued as on claim filing. [Paras 27, 29, 30]

Claims based on a corporate guarantee not invoked prior to commencement of CIRP (and invoked only thereafter) do not constitute matured claims against the corporate guarantor and cannot be admitted in the guarantor's CIRP.

Related Party - Control - de jure and de facto; positive control - Whether the Appellants (IDBI Trusteeship and ECL) are 'Related Parties' of the corporate debtor by virtue of their contractual rights and arrangements and therefore excluded from CoC participation - HELD THAT: - Examining the sanction letter, facility agreement, amended debenture trust deed, articles of association and the irrevocable power of attorney, the Tribunal concluded that the Appellants had the ability and position to exercise positive control over the corporate debtor's management and policy decisions (including revenue escrow control, rights to appoint nominee/observer, approval of business plans, power to appoint agents and broad PoA powers). Relying on the Supreme Court's exposition of 'control' (ArcelorMittal), the Tribunal held that the statutory test under Section 5(24) is satisfied by being 'in a position to control' and that actual exercise of control is not a prerequisite. Given the relationship and participatory powers, the Appellants fall within the definition of 'related party' and accordingly are not entitled to representation, participation or voting in the CoC under Section 21(2). [Paras 42, 56, 62]

The Appellants are related parties of the corporate debtor (within Section 5(24)) because they were in a position to exercise positive control; inclusion in the CoC was therefore impermissible and the Adjudicating Authority's order to exclude them is upheld.

Final Conclusion: The Tribunal dismissed the appeals. While holding that Anuj Jain does not apply to the present facts (disbursement to principal borrower can constitute financial debt of a corporate guarantor), the Tribunal upheld the Adjudicating Authority's determinations that (i) the individual homebuyer had locus to challenge admission of the Appellants' claims, (ii) claims based on a corporate guarantee not invoked prior to CIRP commencement are not matured and could not be admitted in the guarantor's CIRP, and (iii) the Appellants qualify as related parties under Section 5(24) and therefore must be excluded from participation in the CoC.

Admission of application under Section 9 of the Insolvency and Bankruptcy Code, 2016 - existence of a pre existing dispute or defence to operational debt - declaration of moratorium under the Insolvency and Bankruptcy Code - appointment of Interim Resolution Professional and constitution of Committee of Creditors

Admission of application under Section 9 of the Insolvency and Bankruptcy Code, 2016 - existence of a pre existing dispute or defence to operational debt - Whether the petition under Section 9 was to be admitted in the face of the Corporate Debtor's claim of inferior quality of goods and offer to pay a lesser sum. - HELD THAT: - The Tribunal found that the Corporate Debtor acknowledged liability while contending that only a lesser amount was payable on account of alleged inferior quality of goods. The Court accepted the Operational Creditor's contention that the complaint about quality was raised after the goods had been consumed and that no pre existing dispute or pending suit/arbitration had been brought to the Operational Creditor's notice prior to receipt of the demand notice. Having regard to the admission of liability and the nature and timing of the defence raised, the Tribunal concluded that the assertion of a dispute did not preclude admission of the Section 9 application. [Paras 25, 26]

The petition under Section 9 was admitted; the Tribunal held that the defence of disputed quality did not amount to a pre existing dispute sufficient to reject the application.

Declaration of moratorium under the Insolvency and Bankruptcy Code - appointment of Interim Resolution Professional and constitution of Committee of Creditors - Whether consequential orders-moratorium, public announcement, and appointment of an Interim Resolution Professional-should be issued on admission of the Section 9 petition. - HELD THAT: - On admitting the application, the Tribunal proceeded to declare the moratorium and direct public announcement and claims submission in accordance with the Code. The Tribunal noted that the Operational Creditor had not proposed an IRP and therefore appointed an Interim Resolution Professional, directing her to perform statutory functions including filing Form 2, convening the Committee of Creditors and identifying prospective resolution applicants within the prescribed time. The Tribunal also directed deposit of an initial sum with the IRP for preliminary expenses. [Paras 28]

Moratorium declared; public announcement and claims procedure ordered; Ms. Rashmi Agarwalla appointed as Interim Resolution Professional with directions to convene the Committee of Creditors and proceed with the CIRP.

Final Conclusion: The Section 9 petition filed by the Operational Creditor was admitted; moratorium was declared, a public announcement and claims procedure were ordered, and an Interim Resolution Professional was appointed to conduct the corporate insolvency resolution process.

Consent order - deposit to establish bona fides - powers of Adjudicating Authority under the Code - RBI approval for delayed foreign remittance - corporate insolvency resolution process - modification of earlier order

Deposit to establish bona fides - RBI approval for delayed foreign remittance - consent order - modification of earlier order - corporate insolvency resolution process - powers of Adjudicating Authority under the Code - Validity and recall of the order of 30th August, 2021 directing the Corporate Debtor to deposit Indian rupee equivalent of the admitted foreign-currency liability in a fixed deposit with the Tribunal registry and related consequence for initiation of CIRP. - HELD THAT: - The Adjudicating Authority recorded that the 30th August, 2021 direction to the Corporate Debtor to place the Indian-rupee equivalent of the admitted USD liability in a fixed deposit was made on the joint submissions of the parties as a temporary arrangement until the Reserve Bank of India granted permission for delayed foreign remittance. The Tribunal recognised that the Corporate Debtor consistently admitted liability and had pursued requisite RBI approvals through its banker; the failure to remit in foreign currency was attributable to the absence of RBI clearance and not to any wilful default by the Corporate Debtor. In view of these facts, the Adjudicating Authority held that the consent arrangement and the FDR direction served the interests of justice because, once RBI permission is obtained, the deposited funds can immediately liquidate the admitted liability. Having considered the circumstances and the peculiar difficulty arising from the need for RBI approval, the Tribunal declined to recall the order of 30th August, 2021; instead it modified and affirmed the deposit direction, directed the Corporate Debtor to make the interest-bearing FDR within a specified period, and recorded that initiation of the corporate insolvency resolution process would be inappropriate where default occurred due to factors beyond the Corporate Debtor's control and where the debtor remains ready and willing to pay subject to regulatory clearance. [Paras 21, 22, 23, 24]

The application to recall the order dated 30th August, 2021 is rejected; the earlier order is modified and the Corporate Debtor is directed to deposit the Indian-rupee equivalent in an interest-bearing FDR with the Registry within the time stipulated, and initiation of CIRP is avoided given the admitted liability and inability to remit caused by pending RBI approval.

Final Conclusion: The Tribunal refused to recall the 30th August, 2021 order; it modified and affirmed the direction for the Corporate Debtor to deposit the Indian-rupee equivalent of the admitted USD liability in an interest-bearing fixed deposit with the Registry pending RBI approval, and declined to commence CIRP where default arose from the absence of regulatory permission and the debtor remained willing and able to pay.

Maintainability of petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 - sham and collusive transactions under the Insolvency and Bankruptcy Code - claims barred by limitation / time barred claims - bona fide creditor requirement - threshold requirement for initiation of CIRP

Maintainability of petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 - bona fide creditor requirement - The Section 7 petition filed by the Society is not maintainable on the facts before the Tribunal. - HELD THAT: - The Tribunal found that the application lacked bona fides and was the result of a collusive effort between one of the directors of the Corporate Debtor and the applicants. Although precedents permitting initiation of CIRP against a struck off company were noted, the Tribunal dismissed the petition because the applicants had joined hands, many claims were time barred, and material facts suggested the petition had been filed at the behest of a director for vested interests rather than by bona fide financial creditors. The Tribunal applied the principle that a Section 7 application must be a genuine enforcement by a creditor and rejected the petition on that ground. [Paras 65, 66, 68]

Petition dismissed as not maintainable for want of bona fides and being a collusive proceeding.

Claims barred by limitation / time barred claims - acknowledgement and limitation - Many individual claims relied upon by the applicants were time barred and could not be revived for the purpose of initiating CIRP. - HELD THAT: - The Tribunal examined the payment chronology and agreements and observed that numerous applicants had not complied with payment terms and that several claims arose long before the notices relied upon. Reference was made to relevant authorities on acknowledgement and limitation; the Tribunal concluded that several individual claims were barred by limitation and that attempts to revive those claims appeared designed to bring the petition within limitation artificially. This deficiency contributed to the conclusion that the petition was not bona fide. [Paras 61, 65, 66]

Time barred nature of several claims rendered them unavailable to sustain the Section 7 petition.

Sham and collusive transactions under the Insolvency and Bankruptcy Code - real nature of transaction vs apparent arrangement - The transactions and the manner of filing indicated a collusive or sham character and did not establish the applicants as genuine financial creditors entitled to initiate CIRP. - HELD THAT: - The Tribunal accepted the Corporate Debtor's contention that there was nexus between the director and several applicants and that certain documents and common correspondence suggested orchestrated conduct. In view of the evidence that payments and documentation were irregular, and that the scheme appeared to be one to usurp control of the project and defeat repayment obligations between directors, the Tribunal treated the transactions as collusive and not constituting bona fide financial debt for CIRP purposes. [Paras 62, 64, 66]

Transactions characterised as collusive/sham; they do not constitute a legitimate basis for initiation of CIRP.

Threshold requirement for initiation of CIRP - Even if some applicants qualified numerically, after excluding time barred and collusive claims the petition failed to meet the requisite threshold to initiate CIRP. - HELD THAT: - The Tribunal observed that although the petition was filed by a body purporting to represent more than 10% of allottees, exclusion of time barred claims and those tainted by collusion reduced the effective quantum of legitimate claims below the statutory threshold. The Tribunal therefore held that, on the valid claims, the petition would not satisfy the eligibility criterion for initiation of CIRP. [Paras 65, 66]

Threshold not satisfied once barred and collusive claims are excluded; petition unsustainable on this ground.

Final Conclusion: The Tribunal dismissed the Section 7 petition. It found the application to be collusive and lacking bona fides, held that multiple individual claims were time barred, characterised the transactions as sham/collusive rather than genuine financial debt, and concluded that the petition did not meet the eligibility threshold required to initiate the Corporate Insolvency Resolution Process.

Reason to believe - provisional attachment under Section 5 of the PMLA - proceeds of crime - scheduled offence - summons under Section 50 of the PMLA - burden of proof under Section 24 of the PMLA - non-application of mind

Summons under Section 50 of the PMLA - non-application of mind - Validity of the summons dated 11.11.2021 issued under Section 50 of the PMLA to the petitioner - HELD THAT: - The Court found that the summons were issued in respect of an ECIR and charge-sheeted allegations which had already been quashed by this Court against the petitioner in two separate proceedings. The petitioner had replied to the summons drawing attention to those quashal orders. The impugned summons therefore amounted to an overreach and an abuse of process because they were directed at a person in respect of proceedings which this Court had held lacked material to proceed. Having examined the materials and the course of proceedings, the Court held that the issuing authority had not lawfully sustained jurisdiction to issue the summons in face of the quashal orders and that the summons were therefore without jurisdiction and liable to be set aside. [Paras 56, 57, 58, 80, 81]

Summons dated 11.11.2021 set aside as being without jurisdiction.

Provisional attachment under Section 5 of the PMLA - reason to believe - proceeds of crime - scheduled offence - non-application of mind - Validity of Provisional Attachment Order No.11/2021 dated 25.11.2021 under Section 5 of the PMLA attaching the petitioner's four insurance policies - HELD THAT: - Section 5(1) permits provisional attachment only when the authorised officer has a 'reason to believe' (to be recorded in writing) on the basis of material in his possession that (a) the person is in possession of proceeds of crime and (b) such proceeds are likely to be concealed, transferred or dealt with so as to frustrate confiscation proceedings. The Court analysed the statutory meaning of 'reason to believe' and the settled authorities that it cannot rest on mere suspicion, gossip or conjecture but must have a rational connection and live link with material in possession. The provisional attachment order was founded, according to the respondents' own material, on suspicion of intermingling and on assignments occurring after quashal of proceedings against the petitioner; the affidavit explanations advanced after the order were held incompetent to validate it. The Court concluded that the attaching authority had acted on suspicion and without adequate material establishing the necessary nexus; the order therefore exceeded jurisdiction and was unsustainable. Because the attachment was held void for want of jurisdiction, invocation of presumptions under Section 24 was inapplicable. [Paras 66, 74, 76, 80, 81]

Provisional Attachment Order No.11/2021 dated 25.11.2021 quashed for want of jurisdiction as formed on suspicion and without requisite 'reason to believe' based on material.

Burden of proof under Section 24 of the PMLA - scheduled offence - Whether the petitioner should be relegated to the adjudicating authority and whether Section 24 presumptions apply - HELD THAT: - The Court observed that since there is no live scheduled offence or pending prosecution against the petitioner (the CBI and ED proceedings had been quashed by this Court and no stay by the Supreme Court was in place), the foundational predicate for proceeding under PMLA against the petitioner was absent. Further, because the provisional attachment itself was void for want of jurisdiction, the presumptions under Section 24 could not be invoked. The Court rejected the contention that the petitioner should be relegated to the adjudicating authority when the impugned orders were themselves without jurisdiction. [Paras 63, 73, 80, 81]

No relegation to the adjudicating authority; Section 24 presumptions do not arise where attachment is without jurisdiction and no scheduled offence exists against the petitioner.

Final Conclusion: Writ petition allowed: the summons dated 11.11.2021 and Provisional Attachment Order No.11/2021 dated 25.11.2021 are set aside as without jurisdiction; no order as to costs.

Burden of proof on Revenue where documents are not seized from assessee - presumption under Section 36A of the Central Excise Act - admissibility of statements recorded during investigation and requirement of Section 9D - liability under reverse charge for Goods Transport Agency (GTA) services - 26AS/TDS statement not a basis for determining value of taxable services - admission of fresh grounds/evidence before the Tribunal - entitlement to CENVAT credit upon production of input service invoices and records

Admission of fresh grounds/evidence before the Tribunal - Whether CESTAT could consider new grounds and fresh evidence filed before it although not placed before the adjudicating authority - HELD THAT: - The Tribunal examined Supreme Court and High Court precedents recognising wide powers of the appellate tribunal to admit and decide new grounds or evidence, subject to fair opportunity to the other side. In view of these authorities, the Tribunal held that the law and rules do not preclude the CESTAT from considering new grounds and evidence and accordingly found no merit in the revenue's objection to admission of fresh documents and grounds before the Tribunal. [Paras 5]

Fresh grounds and evidence filed before the Tribunal could be considered; the Tribunal declined to exclude the new material.

Presumption under Section 36A of the Central Excise Act - burden of proof on Revenue where documents are not seized from assessee - Whether the department could rely on documents produced by customers (not seized from or produced by the appellant) and treat them as establishing that appellant rendered taxable services or collected service tax - HELD THAT: - Section 36A presumption applies only when a document is produced by, or seized from, the custody or control of the person against whom it is tendered. In the present case the alleged invoices/debit notes were neither produced by nor seized from the appellant. Consequently the presumption under Section 36A did not arise and the burden lay on the department to independently prove that the source documents related to the appellant and that taxable services were actually provided by it. The Tribunal found that the department failed to discharge this burden and could not accept the customers' documents at face value without strict corroboration such as bank records or documents seized from the appellant. [Paras 5]

Demand based on documents produced by customers (not seized from or produced by the appellant) is unsustainable for want of requisite proof and presumption under Section 36A.

Admissibility of statements recorded during investigation and requirement of Section 9D - Whether reliance could be placed on statements recorded during investigation without complying with Section 9D procedure - HELD THAT: - The Tribunal observed that admissions/statements recorded during investigation are important but not conclusive. Section 9D prescribes a mandatory procedure (including summoning and examining the maker of the statement in adjudication proceedings) before such statements can be admitted as evidence unless specific exceptions apply. The adjudicating authority failed to follow Section 9D safeguards (examination in chief and admission in evidence), and none of the witnesses whose statements were relied upon were cross-examined. Therefore the statements could not sustain the demand. [Paras 5]

Reliance on investigation statements without complying with Section 9D is impermissible and cannot sustain the demand.

Liability under reverse charge for Goods Transport Agency (GTA) services - Whether the appellant was liable to pay service tax for GTA services provided to its customers or whether liability was on the service recipient under reverse charge - HELD THAT: - On the materials produced (debit notes/consignment notes, invoices of transporters, and affidavit of the director), the Tribunal found that the services provided to several customers were in the nature of Goods Transport Agency services. Notification No. 30/2012-ST provides that service tax on GTA is to be paid by the recipient under reverse charge. The department failed to produce corroborative evidence (such as bank records or documents recovered from the appellant) to prove that the appellant collected and retained service tax from its customers. Consequently, for GTA services the appellant was not liable to pay service tax. [Paras 5]

Demand for service tax in respect of GTA services is unsustainable as liability rested on recipients and department failed to prove collection by appellant.

26AS/TDS statement not a basis for determining value of taxable services - Whether TDS/26AS statements of recipients can be relied upon to determine value of taxable services and sustain a service tax demand - HELD THAT: - The Tribunal reiterated that 26AS/TDS statements are annual consolidated tax statements under the Income Tax Act and cannot be treated as determinative of service tax liability. Income-tax and service tax operate under separate statutory regimes. Reliance on 26AS/TDS or income-tax returns as the basis for fixing taxable value is impermissible; precedents confirm that amounts shown in income-tax returns or Form 26AS cannot substitute for evidence of taxable service value. The department's reliance on such statements therefore did not sustain the demand. [Paras 5]

Demand cannot be sustained merely on the basis of 26AS/TDS statements or income-tax records.

Entitlement to CENVAT credit upon production of input service invoices and records - Whether the appellant was entitled to CENVAT credit claimed in ST-3 returns where input service invoices and cenvat account were produced before the Tribunal - HELD THAT: - The adjudicating authority had observed that the appellant did not produce input service documents. However, the appellant furnished the CENVAT account, copies of input service invoices and an affidavit evidencing receipt of the input services. Having regard to these records and the appellant's maintenance of CENVAT entries, the Tribunal found no reason to deny the claimed CENVAT credit. [Paras 5]

CENVAT credit claimed by the appellant is allowable; denial by the adjudicating authority is set aside.

Issues kept open for fresh consideration - Whether questions regarding limitation, applicability of Section 73 or 73A, and omission of Chapter V by Section 173 of CGST Act were finally decided - HELD THAT: - The Tribunal explicitly recorded that the matter was decided on the facts and law discussed and that it would not adjudicate ancillary contentions relating to limitation, whether demand should have been framed under Section 73 or 73A, or constitutional/legislative issues arising from omission of Chapter V by Section 173 of the CGST Act. Those matters were expressly left open for determination elsewhere or at a later stage. [Paras 5, 6]

Questions on limitation, choice of Section 73 or 73A, and omission of Chapter V are not adjudicated and are left open for fresh consideration.

Final Conclusion: The Tribunal allowed the appeal. Except for amounts admitted by the appellant and already deposited, the service tax demand (with interest and penalty) was set aside: fresh evidence was admissible before the Tribunal; the department failed to prove taxable service or collection where source documents were not seized from the appellant; statements recorded during investigation were inadmissible for want of Section 9D compliance; GTA liabilities were on recipients under reverse charge and demands thereon were unsustainable; 26AS/TDS could not be used to determine service tax liability; and the appellant's CENVAT credit was held allowable. Questions of limitation, invocation of Section 73/73A and omission of Chapter V were left open.

Condonation of delay - limitation period for filing appeal - deemed service by post - remand for adjudication on merits - reliance on certified copy as triggering limitation - payment of tax demand as relevant consideration in condonation

Condonation of delay - limitation period for filing appeal - deemed service by post - reliance on certified copy as triggering limitation - remand for adjudication on merits - payment of tax demand as relevant consideration in condonation - Appeal remitted to the First Appellate Authority for fresh decision on merits without adjudicating the question of limitation or condoning delay. - HELD THAT: - The Tribunal examined the appellant's contention that the Order-in-Original dated 10.08.2016 was not received by them and noted that the certified copy was supplied to the appellant only on 27.04.2017 by the Superintendent (Adjudication). The Commissioner(Appeals) had relied on Postal communication asserting delivery on 30.08.2016 and had therefore held the appeal time-barred and refused condonation of 220 days' delay. Subsequent RTI response from the Agartala Postal Division did not confirm delivery and indicated non-availability of delivery records beyond the preservation period. Observing that the appellant had paid a substantial portion of the adjudicated demand and relying on the approach in OSA Shipping Pvt. Ltd. (Madras High Court), the Tribunal concluded that the appropriate course was to remit the matter to the Commissioner(Appeals) to decide the appeal on merits without going into limitation. The Tribunal directed that the appellant be given a reasonable opportunity of hearing and left all issues open for fresh consideration, permitting both parties to place relevant evidence. [Paras 5, 7]

Appeal allowed by way of remand to the Commissioner(Appeals) with direction to decide the appeal on merits without considering limitation; reasonable opportunity of hearing to be afforded and all issues kept open.

Final Conclusion: The Tribunal set aside the First Appellate Authority's rejection on limitation grounds and remitted the appeal to the Commissioner(Appeals) for fresh adjudication on merits, directing that the appellant be heard and all issues be reconsidered without treating the appeal as time-barred.

Monetary threshold for maintainability of departmental appeals before CESTAT - withdrawal of departmental appeal where subject matter is below prescribed pecuniary limit - appellate power under Section 35A of the Central Excise Act, 1944 - power of remand - error apparent on the face of the order

Monetary threshold for maintainability of departmental appeals before CESTAT - withdrawal of departmental appeal where subject matter is below prescribed pecuniary limit - Departmental appeal filed before the Tribunal was withdrawn by the Department for being below the prescribed monetary limit and the Tribunal accepted the withdrawal. - HELD THAT: - The Tribunal considered the Instruction dated 22.08.2019 which prescribes a pecuniary limit of Rs.50.00 Lakhs for appeals to be maintainable before this Tribunal in Central Excise and Service Tax matters. Paragraph 3 of the Instruction requires that matters below the revised limit be withdrawn in accordance with existing withdrawal practice. Given that the appeal was filed by the Department (the master of its litigation) and in view of the Instruction and the Tribunal's concern for proper jurisdiction in absence of the monetary threshold being met, the request for withdrawal of the departmental appeal was accepted and the appeal dismissed as withdrawn. [Paras 3, 6]

The departmental appeal is allowed to be withdrawn and stands dismissed as withdrawn.

Appellate power under Section 35A of the Central Excise Act, 1944 - power of remand - error apparent on the face of the order - The Commissioner (Appeals) did not possess power to remand the matter under Section 35A and the remand in the impugned order amounted to an apparent error on the face of the record; hence the assessee is permitted to seek appropriate remedy before the Commissioner (Appeals) without being barred by limitation. - HELD THAT: - On perusal of Sub section (3) of Section 35A, the Tribunal observed that the Commissioner (Appeals) is empowered to confirm, modify or annul the order appealed against after such further inquiry as may be necessary, but the provision does not confer a power to remand the matter back to the original authority as an independent third mode of disposal. The Commissioner (Appeals) had, while acknowledging the assessee's entitlement to the refund, remanded the matter for verifications, which the Tribunal treated as non compliance with the statutory modes of disposal and hence an apparent error on the face of the order. Recognising that the assessee's time to challenge the remand before the Tribunal has lapsed, the Tribunal granted liberty to the assessee to approach the Commissioner (Appeals) and directed the Commissioner (Appeals) to consider such prayer without applying the bar of limitation. [Paras 4, 5]

The remand by the Commissioner (Appeals) amounted to an error apparent on the face of the order; the assessee is granted liberty to seek appropriate remedy before the Commissioner (Appeals) and the Commissioner (Appeals) shall consider it without applying limitation.

Final Conclusion: The departmental appeal is accepted for withdrawal and dismissed as withdrawn pursuant to the prescribed pecuniary limits; concurrently the Tribunal found the Commissioner (Appeals) lacked power to remand under Section 35A and, treating the remand as an apparent error, granted the assessee liberty to seek remedy before the Commissioner (Appeals) without being barred by limitation.

Reversal of credit under Rule 3(5) of the CENVAT Credit Rules, 2004 - capital goods removed "as such" - used capital goods - revenue neutrality - invocation of extended period under section 11A of the Central Excise Act, 1944 for suppression

Reversal of credit under Rule 3(5) of the CENVAT Credit Rules, 2004 - capital goods removed "as such" - used capital goods - Whether Rule 3(5) of the CENVAT Credit Rules, 2004 required reversal of entire Cenvat credit on capital goods removed by the assessee where the goods had been put to use and were cleared on depreciated/book value. - HELD THAT: - The Tribunal held that Rule 3(5) does not automatically mandate reversal of the original credit where capital goods have been used and subsequently removed as used goods. Revenue bore the burden of proving that (a) Cenvat/Modvat credit had in fact been availed on the specific capital goods and (b) the goods were removed "as such" without having been put to use. The adjudicating authority did not point to any entry in the appellant's credit accounts or other positive evidence establishing that credit had been taken on those machines or that they were cleared without use. Having regard to precedents cited and the legislative history, the Tribunal accepted that clearance of capital goods after being put to use may legitimately be on depreciated/book value and that, on the material before the adjudicating authority, the demand computed on original purchase value could not be sustained. The Tribunal therefore set aside the adjudicating authority's conclusion on merits; it further observed that the transaction was revenue neutral since any reversal/ duty would be available as credit to the recipient unit, but declined to decide limitation/extended period issues because the demand itself was unsustainable on merits. [Paras 4]

Impugned order confirmed demand set aside on merits; appellant's method of discharging duty on depreciated/book value upheld and appeal allowed.

Revenue neutrality - invocation of extended period under section 11A of the Central Excise Act, 1944 for suppression - Whether the demand should be sustained on the basis of invocation of extended period and whether revenue neutrality defeats the demand. - HELD THAT: - The Tribunal noted the adjudicating authority invoked extended period on a finding of suppression and fraud, and rejected the appellant's plea of revenue neutrality. However, because the Tribunal found the substantive demand unsustainable for lack of evidence that credit had been availed on the specific capital goods or that they were removed "as such", it did not examine or decide the extended period/limitation contention or fully adjudicate the invocation of section 11A. The Tribunal observed that revenue neutrality would operate in practice but held it unnecessary to address limitation once the impugned order was set aside on merits. [Paras 4]

Extended period and revenue-neutrality issues left undecided as the demand was set aside on merits; appeal allowed.

Final Conclusion: The Tribunal allowed the appeal, set aside the impugned order confirming demand, interest and penalty, and held that on the material before the adjudicating authority the demand based on original purchase value could not be sustained because revenue failed to establish that Cenvat credit had been availed on the specific capital goods or that they were removed "as such"; consequential relief granted to the appellant.

Refund of unutilised Personal Ledger Account balance - limitation under section 11B of Central Excise Act, 1944 - PLA balance not duty but advance deposit - refund in cash of amounts other than duty under section 142(3) CGST Act, 2017

Refund of unutilised Personal Ledger Account balance - limitation under section 11B of Central Excise Act, 1944 - PLA balance not duty but advance deposit - refund in cash of amounts other than duty under section 142(3) CGST Act, 2017 - Whether the refund claim of unutilised PLA balance as on 30/06/2017 filed in 2021 is barred by limitation under section 11B of the Central Excise Act, 1944. - HELD THAT: - The Tribunal held that unutilised balances in Personal Ledger Accounts are advance deposits and do not constitute duty. Consequently, the one year limitation prescribed by section 11B for recovery or refund of duty is not attracted to claims for refund of such unspent PLA amounts. The reasoning observes that where the depositor remains the owner of the unspent amount, the State cannot appropriate such funds merely by invoking the limitation applicable to duty refunds. The decision relies on co ordinate Tribunal precedents (including Fluid Controls, Josts Engineering and WMW Metal Fabrics) and the jurisdictional High Court authority (Indian Oil Co operative Ltd.) which distinguish refunds of duty from refunds of unutilised PLA balances and hold that limitation under section 11B does not apply to the latter. The Tribunal also notes the statutory context permitting cash refunds of amounts other than duty under section 142(3) of the CGST Act, 2017, supporting the view that PLA balances are refundable notwithstanding the one year period in section 11B.

The refund claim of the appellant in respect of the unutilised PLA balance as on 30/06/2017 is not time barred under section 11B and the appeal is allowed; the appellant is eligible for refund with consequential relief as per law.

Final Conclusion: The Tribunal allowed the appeal and directed grant of refund of the unutilised PLA balance held as on 30/06/2017, holding that such unspent PLA amounts are advance deposits (not duty) and therefore not subject to the one year limitation under section 11B of the Central Excise Act, 1944.

Stay pending appeal - discretion to grant stay on furnishing security - vacation of stay after 180 days - exception where delay not attributable to appellant - extension of interim stay - duty to dispose of appeals expeditiously

Vacation of stay after 180 days - exception where delay not attributable to appellant - discretion to grant stay on furnishing security - extension of interim stay - Whether the second proviso to Section 51(4) (which vacates directions given under the first proviso if no order is passed within 180 days) mandates automatic vacatur of a stay where the delay in disposal is not caused by the appellant and the appellant has cooperated in the appeal proceedings. - HELD THAT: - The Court examined the scheme of Section 51(4) which requires payment of tax in accordance with the assessment notwithstanding an appeal, but permits the appellate authority, by the first proviso, to direct payment subject to sufficient security. The second proviso provides that such directions shall stand vacated if no order is passed under sub section (3) within 180 days. The proviso was intended to prevent abuse by appellants who obtain interim protection and then protract proceedings, thereby prejudicing revenue. However, where the appellant has fully cooperated and there is no delay attributable to it - for example, where appeals are part heard and imminent disposal is prevented by factors beyond the appellant's control - the strict rigour of automatic vacatur would produce hardship and is not called for. The Court relied on the principle applied by the Supreme Court in the context of a similar provision under the Central Excise Act, which recognised a limited exception allowing extension of stay on good cause shown and where delay is not the appellant's fault. Applying that reasoning, and noting that the petitioner complied with the conditions of the original stay and actively prosecuted the appeals, the Court held that the appellate authority's conclusion that no extension is possible under the TNVAT Act was contrary to these principles. The Court therefore exercised its supervisory jurisdiction to extend the stay and directed expeditious disposal of the appeals, conditioned on extension of the bank guarantee. [Paras 9, 10, 11, 13, 15]

The stay originally granted is extended and the appellate authority (R2) is directed to dispose of the appeals within three months, subject to the petitioner extending the bank guarantee for a further three months.

Final Conclusion: Writ petitions allowed: the court held that the automatic vacatur provision does not apply rigidly where delay in disposal is not attributable to the appellant and the appellant has cooperated; stay extended and appeals directed to be disposed within three months on condition of extending security.

Refund of accumulated Input Tax Credit - delay in filing refund claim not fatal where entitlement is undisputed - distinction between claim for refund of ITC and claim for utilisation/set off of ITC - mandatory statutory timeline for claim/utilisation of ITC (as held in ALD Automotive and Jayam) - entitlement under zero rated sales

Refund of accumulated Input Tax Credit - delay in filing refund claim not fatal where entitlement is undisputed - entitlement under zero rated sales - Petitioner entitled to refund of accumulated Input Tax Credit despite belated filing of Form W beyond 180 days where entitlement to ITC and zero rated status were undisputed. - HELD THAT: - The court accepted that the petitioner, an exporter, had zero rated sales and its entitlement to ITC was not disputed. Although Form W was filed after the 180 day period prescribed by the Rules, the delay (being less than a month) was held not to be fatal to the claim for refund. The court relied on the precedent of R.K.Knits, where a similar belated filing did not preclude refund, and noted that the filing requirement is procedural and should not defeat a substantive right to refund when entitlement is established. The court recorded that monthly returns were timely filed, the returns disclosed turnover and carry forward of ITC, and assessments were deemed completed accepting the returns, including the refund component, which supported allowing the refund claim notwithstanding the delay. [Paras 3, 4, 5, 13, 15]

Refund claim under Form W allowed despite belated filing; writ petition allowed and refund to be paid expeditiously within four weeks.

Distinction between claim for refund of ITC and claim for utilisation/set off of ITC - mandatory statutory timeline for claim/utilisation of ITC (as held in ALD Automotive and Jayam) - Decisions in ALD Automotive and Jayam concerning mandatory timelines for utilisation/set off of ITC do not govern a refund claim for accumulated ITC where entitlement to refund is undisputed. - HELD THAT: - The court examined the Supreme Court decisions which treated statutory timelines for claiming/utilising ITC as mandatory, observing that those cases related to the exercise of a right to set off ITC against output tax (including the extended time under the statute). The court distinguished those precedents on the ground that the present case concerns a refund of accumulated ITC, not an exercise of set off which would affect turnover quantification. Consequently, the strict timelines applied to utilisation claims were inapplicable to an undisputed refund claim, and reliance on ALD Automotive did not advance the revenue's case. [Paras 8, 9, 10, 11, 12]

Precedents on mandatory timelines for ITC utilisation distinguished; they do not preclude the petitioner's refund claim.

Final Conclusion: Writ petition allowed; refund of accumulated ITC claimed in Form W to be paid to the petitioner expeditiously and in any event within four weeks; no costs.

Legislative competence - transitional provision - deletion of Entry 52 of List II - Section 19 of the 101st Constitution Amendment Act - ultra vires - retrospective validation of a statute - continuity of pre-Amendment laws during transition

Ultra vires - retrospective validation of a statute - legislative competence - Validity of retrospective amendment/validation of the Entry Tax Act by West Bengal Finance Act, 2017 while the original Entry Tax Act stood declared unconstitutional and the appeal was pending - HELD THAT: - The Tribunal held that the State Legislature ought not to have amended and retrospectively validated the Entry Tax Act 2012 by sections 5 and 6 of the West Bengal Finance Act, 2017 while the Single Bench judgment of 24.06.2013 declaring the Act unconstitutional remained unreversed on appeal. The Division Bench interim order of 31.07.2013 permitting assessment proceedings to continue and directing no refunds does not equate to wiping out or reviving the original judgment. A stay does not erase the effect of the original adjudication; a provision declared ultra vires cannot be lawfully revived by an impugned amendment during the pendency of appeal. The Tribunal therefore found the State's exercise to amend/validate in that period to be premature and not tenable. [Paras 15]

Amendment/validation of the Entry Tax Act while the Single Bench judgment remained unreversed is premature and cannot sustain.

Deletion of Entry 52 of List II - legislative competence - transitional provision - Whether deletion of Entry 52 from the State List by the 101st Constitution Amendment permanently removed the State Legislature's competence to legislate on entry tax matters - HELD THAT: - The Tribunal held that Entry 52 of List II was omitted with effect from 16.09.2016 as part of the realignment to implement GST, thereby removing the State's legislative source for taxes on entry of goods into a local area. That deletion is final and extinguishes the State's plenary competence in that field; nothing remains in the State List that the State may legitimately amend in respect of Entry Tax. The Tribunal emphasised that Article 245/246 and the Seventh Schedule continue to be the source of legislative power and that omission of an entry results in the State being denuded of legislative power on that subject. [Paras 16, 17]

Deletion of Entry 52 with effect from 16.09.2016 permanently removed the State Legislature's competence to legislate on entry tax matters.

Section 19 of the 101st Constitution Amendment Act - transitional provision - continuity of pre-Amendment laws during transition - Whether Section 19 of the 101st Constitution Amendment Act conferred power on the State Legislature to amend or validate the Entry Tax Act after deletion of Entry 52 - HELD THAT: - The Tribunal examined Section 19 and concluded that it is a limited transitional provision meant to cover provisions inconsistent with the amended Constitution where an antecedent entry continues in a truncated or substituted form. Section 19 does not confer new substantive legislative power where the entry has been entirely omitted. The term 'inconsistent' contemplates the existence of a provision capable of amendment; an omitted entry (Entry 52) leaves no locus to amend. Consequently Section 19 is not a source of competence to revive or revalidate Entry Tax legislation that the State no longer had power to enact, and the principle that 'power to repeal is co-extensive with power to enact' (relied upon by the State) was held inapplicable in the present constitutional context. [Paras 17, 24]

Section 19 does not confer competence on the State Legislature to amend or validate Entry Tax legislation once Entry 52 has been omitted; it cannot be relied upon to sustain sections 5 and 6 of the Finance Act, 2017.

Article 304(a) - Article 14 - Article 19(1)(g) - Constitutional challenges under Article 304(a), Article 14 and Article 19(1)(g), and questions on retrospective imposition of entry tax - HELD THAT: - The Tribunal expressly refrained from deciding issues whether sections 5 and 6 of the Amending Act satisfy Article 304(a), whether retrospective imposition from 01.04.2012 is permissible, or whether the Amending Act violates Articles 14 and 19(1)(g). Those matters are pending before the Calcutta High Court and the Tribunal declined to enter into their adjudication in this proceeding. [Paras 26]

Left open for determination by the High Court; the Tribunal did not decide these constitutional questions.

Final Conclusion: The Tribunal holds that the State of West Bengal lacked legislative competence to introduce sections 5 and 6 of the West Bengal Finance Act, 2017 insofar as they sought to amend and validate the Entry Tax Act; those provisions are declared ultra vires and unconstitutional. Separate constitutional challenges under Article 304(a), Article 14, Article 19(1)(g) and the permissibility of retrospective imposition were not decided and await determination by the High Court.