TaxTMI Updates e-Newsletter
Jul 28,2026

Input tax credit on supplies from a supplier subsequently treated as non-existent - Failure to consider documents supporting genuineness of supplies - Inconsistency between show cause notice and assessment provision - Burden of Proof - Principles of Natural Justice - Reasonable Opportunity - HELD THAT: - Although the burden to establish entitlement to input tax credit rests on the claimant, the petitioner had furnished bank statements, tax invoices, e-way bills, ledgers and GSTR 2A and 2B returns. These materials required due consideration and, if found deficient, the petitioner was required to be afforded an opportunity to furnish further documents. Confirmation of the proposal solely because the supplier was declared non-existent from a later date was unsustainable, particularly when the show cause notice repeatedly referred to assessment under Section 73 whereas the order was made under Section 74. [Paras 6]

The assessment order was set aside and the matter remanded for fresh consideration after reasonable opportunity to the petitioner.

Final Conclusion: The writ petition was disposed of by setting aside the assessment order and remanding the input tax credit claim for reconsideration and a fresh order.

Entitlement to bail -Presumption of innocence and speedy trial - Documentary evidence and pre-trial detention - wrongful availment and passing on of input tax credit through non-existent firms - HELD THAT: - Pre-trial detention is not punitive; its object is to secure the accused's attendance at trial. Though criminal prosecution is independent of assessment proceedings, the absence of proceedings under the assessment provisions may bear upon the prosecution if no contravention is ultimately found. The investigation stood completed and the complaint had been filed; the evidence was documentary, no criminal antecedents or exceptional circumstance was shown, and there was no material indicating a likelihood of absconding, tampering with evidence, intimidating witnesses or subverting justice. Having regard to the limited maximum punishment, trial by a Magistrate, continued custody and the unlikelihood of an early conclusion of trial, continued detention was not justified. [Paras 13, 15, 16, 17, 18]

The applicant was directed to be released on bail, subject to conditions safeguarding the trial and the prosecution evidence.

Final Conclusion: Bail was granted in the GST prosecution, subject to conditions, as continued pre-trial custody was unwarranted on the material before the Court.

Condonation of delay in GST appeal - Non-communication of adjudication order -HELD THAT: - Though the Appellate Authority was bound by the statutory limitation under section 107 of the RGST/CGST Act, non-adjudication on merits, in the circumstances that prevented timely filing of the appeal, would cause grave injury and prejudice. Following the consistent view of the Court in the decisions in M/s M R Traders [2026 (2) TMI 99 - RAJASTHAN HIGH COURT], M/s Molana Construction Company [2024 (8) TMI 384 - RAJASTHAN HIGH COURT], the delay was condoned after allowing the statutory relaxation. [Paras 6, 7, 8]

The delay of 114 days was condoned, and the Appellate Authority was directed to entertain and decide the appeal on merits, subject to its filing within the stipulated period.

Final Conclusion: The writ petition was allowed to the extent of condoning the delay in filing the GST appeal. The Appellate Authority was directed to adjudicate the appeal on merits, subject to the condition stipulated by the Court.

Condonation of delay in statutory GST appeal - Restoration of appellate remedy - HELD THAT: - Having regard to the peculiar facts, the absence of an adjudication on merits before the Appellate Authority, and the respondents' no-objection to remand, the Court held that the ends of justice required restoration of the statutory remedy. The delay of 87 days in filing the appeal was therefore condoned, without entering into the merits of the underlying controversy. [Paras 5]

The order dismissing the appeal as barred by limitation was quashed, and the appeal was remanded to the Appellate Authority for fresh decision in accordance with law.

Final Conclusion: The writ petition was allowed by condoning the delay in filing the statutory appeal and restoring it for fresh adjudication on merits by the Appellate Authority.

Service of show-cause notice for cancellation of GST registration - Principles of natural justice in cancellation of GST registration - notice made available only on the common portal and was not additionally communicated by e-mail, registered post or another prescribed mode drawing the registered person's attention to the proposed adverse action. - HELD THAT: - The co-ordinate Bench of this Court in the case of Shree Ram Sales [2025 (2) TMI 1979 - PATNA HIGH COURT] held that mere uploading of the notice on the GST portal would not be a complete compliance with the requirement of Section 169 of the CGST/BGST Act.

Mere availability of the notice on the GST portal was held insufficient where cancellation would entail civil consequences. A purposive construction of the statutory modes of service requires that, in addition to portal upload, the registered person be personally served through any other prescribed mode so as to afford a real and fair opportunity to respond. The department could not reiterate a stand already rejected in earlier decisions of the Court without showing any basis for a contrary view. [Paras 10, 11]

The cancellation order was set aside and the matter was remitted for issuance and service of a fresh show-cause notice, adequate opportunity of response and personal hearing, followed by a reasoned order in accordance with law.

Final Conclusion: The writ application was allowed to the extent indicated. The cancellation order was set aside, fresh proceedings consistent with natural justice were directed, and the pre-cancellation status quo was ordered to continue meanwhile.

Exhaustion of statutory remedy - Writ jurisdiction and delay and laches - Principles of Natural Justice

Maintainability of a writ petition challenging GST assessment orders where a statutory appeal to the GST Tribunal was available - HELD THAT: - Where the statute creates the right and prescribes a remedy for its enforcement, the statutory remedy must ordinarily be exhausted before invoking writ jurisdiction. Availability of an alternate remedy is not an absolute bar, but writ intervention requires extraordinary or exceptional circumstances; no such circumstance was established despite the plea of breach of natural justice.

The writ petition was not entertained, leaving the petitioner to pursue the statutory remedy available in law.

Delay and laches in writ jurisdiction - HELD THAT: - Writ jurisdiction under Article 226 is discretionary, and a party that does not approach the Court promptly may be denied relief on the ground of laches. The petition, filed after about one and a half years from the impugned orders, contained no explanation for the delay.

The unexplained delay was an additional reason for declining to entertain the petition.

Final Conclusion: The writ petition was dismissed for availability of an efficacious statutory appellate remedy, with liberty to the petitioner to avail the remedy in accordance with law. Unexplained delay in approaching the Court also militated against exercise of writ jurisdiction.

Statutory appeal - Condonation of delay and the prescribed pre-deposit - HELD THAT:- The writ petition was disposed of with liberty to pursue the statutory appeal with an application for condonation of delay and statutory pre-deposit. Coercive action pursuant to the garnishee notice was restrained for the period allowed for filing the appeal.

Adjudication beyond show-cause notice - Jurisdictional limit on confirmation of GST demand and penalty - Principles of Natural Justice - HELD THAT: - Section 75(7) prohibits confirmation of tax and penalty beyond what is proposed in the show-cause notice. Since the adjudication order confirmed enhanced tax and penalty demands, it was without jurisdiction to that extent. [Paras 2]

The adjudication order was set aside, with liberty to the petitioner to submit a final reply and for fresh reasoned adjudication after affording personal hearing.

Final Conclusion: The writ petition was disposed of by setting aside the impugned adjudication order and directing fresh proceedings on the show-cause notice in accordance with law.

Demand exceeding show-cause notice - Statutory limitation on confirmation of GST demand - Validity of a GST demand for tax, interest and penalty exceeding the aggregate amount specified in the show-cause notice - HELD THAT: - Section 75(7) expressly prohibits an order from demanding tax, interest and penalty in excess of the amount specified in the notice, and also prohibits confirmation on grounds other than those in the notice. As the impugned demand exceeded the amount stated in the show-cause notice, it was ex facie contrary to that provision. [Paras 7, 8, 9]

The impugned order was quashed for violation of Section 75(7), and the matter was remanded for a fresh order after permitting a response to the show-cause notice and affording a hearing.

Final Conclusion: The writ petition was allowed. The demand order was set aside and the matter remanded for fresh adjudication in accordance with law.

Penalty for failure to maintain books of account and documents under GST law - Imposition of penalty for non-maintenance of records relating to production, manufacture, supplies, stock, input tax credit and output tax details. - HELD THAT: - The late-fee provision for belated filing of specified returns operates in a field distinct from the penalty provision for failure to keep, maintain or retain books of account and documents. Penalty for non-maintenance of records was independently authorised and was not rendered impermissible by the levy of late fee.

The penalty order disclosed no infirmity warranting interference.

Final Conclusion: The writ petition was dismissed, and the penalty for failure to maintain the prescribed records was sustained.

Input tax credit-statutory time-limit for furnishing return - Entitlement to input tax credit for March, 2020 where the return was filed before 30.11.2021. - HELD THAT: - The return for the relevant month was filed on 04.01.2021, which was within the period contemplated under section 16(5). The rejection of the claimed input tax credit on the basis of the earlier cut-off date could not therefore be sustained. [Paras 2]

The assessment order was quashed and the matter was remitted for reconsideration and grant of the benefit under section 16(5), if the petitioner was otherwise eligible, after hearing the petitioner.

Final Conclusion: The writ petition was disposed of by quashing the order denying input tax credit and directing fresh consideration of the claim in accordance with section 16(5).

Composite show cause notice for multiple financial years - Separate Assessment-Year Notices - HELD THAT: - Following the decisions of M/s. Lakshmi Mobiles Accessories [2025 (2) TMI 666 - KERALA HIGH COURT] and Tharayil Medicals [2025 (4) TMI 1152 - KERALA HIGH COURT]. A composite notice covering more than one assessment year is not legally sustainable, in view of the principles laid down in the earlier decisions of the Court Proceedings, if initiated, must therefore be commenced through separate notices for the respective assessment years. [Paras 2]

The consolidated show cause notice was quashed, with liberty to issue separate notices; the period specified by the Court was directed to be excluded in computing limitation for fresh proceedings.

Final Conclusion: The writ petition was disposed of by quashing the composite show cause notice and preserving the respondents' liberty to initiate fresh proceedings through separate notices, subject to the directed exclusion of time for limitation.

Reimbursement of GST on pre-GST works contract - Tax component payable to contractor on production of statutory returns - Entitlement of a contractor under a works contract awarded before introduction of GST to reimbursement of GST on work executed after GST was introduced. - HELD THAT: - The distinction based on the contract having been awarded before GST was not accepted. The contractor had been liable to compounded tax under the VAT regime and had no service-tax liability before GST, whereas GST became payable on the work executed thereafter. The Government circular recognising reimbursement of service tax paid by a contractor upon proof of payment reflected the governing principle that the tax component borne by the contractor is reimbursable; the same yardstick was held applicable to GST. Production of returns for the invoiced periods was directed as proof of the GST liability. [Paras 5, 6]

The contractor was held entitled to disbursement of the GST component covered by the invoices upon producing the relevant CGST/SGST returns before the awarder.

Final Conclusion: The writ petition was allowed to the extent that, upon production of the statutory returns for the invoiced periods, the concerned respondents shall consider them and disburse the GST component claimed.

Reassessment notice issued to deceased assessee - Legal representative's liability for deceased assessee - Incurable jurisdictional defect in reassessment notice - Limitation for fresh reassessment notice

Reassessment notice issued to deceased assessee - Legal representative's liability for deceased assessee - Incurable jurisdictional defect in reassessment notice - HELD THAT: - A notice u/s 148 is the foundational jurisdictional notice for reopening an assessment and must be issued to a living, correct person. Section 159(2)(a) permits continuation of proceedings validly commenced during the assessee's lifetime; Section 159(2)(b) permits fresh proceedings only by issuing notice directly to the legal representative within the prescribed limitation.

Madras High Court speaking through in Alamelu Veerappan [2018 (6) TMI 760 - MADRAS HIGH COURT] while concluding that the notice issued against a dead person is wholly without jurisdiction that cannot be enforced in law, has observed that proceedings can be continued against the legal heir if the proceedings were initiated during the lifetime of the deceased assessee and permitted for proceeding against the legal heir.

A notice issued to a deceased person is void ab initio, and cannot be validated by substituting the legal representative or by Section 292B, which does not cure a foundational jurisdictional defect. In the absence of a statutory obligation, failure of legal representatives to intimate death does not alter that result. [Paras 48, 49, 50, 51, 52]

The notice issued to the deceased assessee and all proceedings founded upon it were held null and void.

Statutory estoppel on participation in reassessment - Waiver of jurisdictional objection - Effect of the legal representative's filing of return and responses in relation to the deceased assessee upon the jurisdictional objection to the reassessment notice - HELD THAT: - Section 292BB applies where the assessee has appeared or co-operated in the inquiry and addresses defects in service of notice. The assessee having died before issuance of the notice, the statutory condition for its application was absent. The legal representative had objected to jurisdiction from the inception and had not supplied documents in response to the inquiry notice. In any event, participation, waiver or acquiescence cannot confer jurisdiction where the initiating notice itself is void. [Paras 59, 60, 61, 62, 63]

The legal representative was not precluded by Section 292BB from challenging the void reassessment notice.

Strict construction of jurisdictional conditions in taxing statutes - Equity in tax administration - Whether reassessment proceedings void for want of a valid jurisdictional notice could be sustained on equitable considerations arising from the legal representative's conduct? - HELD THAT: - Tax liability and jurisdiction must arise strictly from the statute; equitable doctrines cannot supply a statutory deficiency or validate proceedings initiated contrary to mandatory jurisdictional conditions. Though filing and electronic verification of the return in the deceased assessee's name was contrary to the statutory scheme and could invite action under the Act, such conduct could not confer jurisdiction upon the Revenue to proceed on a notice issued to a dead person. The jurisdictional conditions of Section 148, including the identity of the noticee, require strict compliance. [Paras 73, 74, 81, 82, 83]

Equitable considerations could not sustain the reassessment proceedings.

Finding or direction for reassessment beyond limitation - Statutory bar to fresh reassessment notice - Whether quashing the void notice under Section 148 constituted a finding or direction enabling a fresh notice to the legal representative beyond limitation under Section 150? - HELD THAT: - Section 150(1) relaxes limitation only where reassessment is necessary to give effect to a finding or direction in the specified proceedings, subject to Section 150(2). An order declaring the initiation of reassessment against a deceased person void ab initio is not a finding or direction requiring reassessment. The Revenue was required to initiate proceedings directly against the legal representative within the limitation prescribed under Section 149 and could not use the order quashing the void notice to revive a time-barred proceeding. [Paras 99, 100, 102, 103, 104]

Section 150 could not be invoked to issue a fresh notice to the legal representative after expiry of the limitation period.

Final Conclusion: The writ petition was allowed. The notice issued under Section 148 in the name of the deceased assessee, together with all consequential proceedings, assessment and demand, was quashed.

Reassessment beyond four years - Change of opinion - Failure to disclose fully and truly material facts - Disallowance of expenditure relating to exempt income u/s 14A -HELD THAT: - The original scrutiny had specifically examined the disallowance under Section 14A and the assessee had furnished the relevant particulars. The revenue neither alleged failure to make a full and true disclosure nor identified any tangible material obtained after completion of assessment indicating escapement of income. Reopening founded on a re-examination of the same assessment record was therefore a change of opinion and could not sustain reassessment beyond four years. [Paras 6]

The notice for reassessment and consequential orders were quashed.

Final Conclusion: The writ petition was allowed and the reassessment notice, together with consequential orders, was quashed.

Monetary limits for Revenue appeals concerning revision u/s 263 - Quantifiable tax effect in revisionary proceedings -exceptions available for filing an appeal u/s 260A

Maintainability of the Revenue's appeal against an order arising from revisionary proceedings where the tax effect was quantifiable and below the prescribed monetary limit - HELD THAT: - Clause 3.1(f) of Circular No. 5/2024 permits an appeal despite the monetary limit only where the tax effect is not quantifiable or is not involved. The reference to an order u/s 263 is illustrative and does not exempt every such order from the monetary-limit requirement. Since the alleged unexplained investment made the tax effect quantifiable, the exception was inapplicable. [Paras 8, 9, 10]

The appeal was dismissed as not maintainable under Circular Nos. 5/2024 and 09/2024.

Final Conclusion: The Revenue's appeal was dismissed as not maintainable because the tax effect in the revisionary proceedings was quantifiable and did not satisfy the prescribed monetary threshold for an appeal.

Reassessment beyond four years - Failure to disclose fully and truly all material facts - Change of opinion

Validity of reopening a completed scrutiny assessment beyond four years on the basis of the stamp-duty value of immovable property where the sale transaction and the explanation for the additional stamp-duty component had been disclosed in the original assessment HELD THAT: - The first proviso to Section 147 permits reopening after four years of an assessment completed under Section 143(3) only where escapement is attributable to the assessee's failure to disclose fully and truly all material facts. The property transaction had been specifically examined in the original scrutiny, and the assessee had furnished the sale consideration and its explanation concerning the additional value considered for stamp-duty purposes.

The recorded reasons did not identify any material fact withheld by the assessee. A subsequent different view on the same disclosed material, including on the applicability of Section 50C, could not satisfy the jurisdictional condition for reopening beyond four years. [Paras 10, 11, 12, 13, 14]

The reassessment notice and consequential proceedings were held unsustainable and were quashed.

Final Conclusion: The writ petition was allowed. The notice issued for reassessment and the consequential proceedings were quashed as the statutory condition for reopening a completed assessment beyond four years was not met.

Conclusive settlement under the Direct Tax Vivad se Vishwas Scheme, 2024 - Disposal of pending appeal after issuance of settlement certificate

Effect of acceptance of settlement under the VSV Scheme and issuance of Form No.4 on the pending appellate proceedings for Assessment Year 2018-19 - HELD THAT: - Upon acceptance of the application under the VSV Scheme, payment of the determined amount and issuance of Form No.4, adjudication and assessment for the relevant year became conclusive and final. Once the appellate authority had been informed of issuance of Form No.2 and of the pending settlement, it ought not to have decided the appeal by remanding the assessment; it should have awaited the final settlement and disposed of the appeal accordingly. The remand resulted in avoidable multiplicity of proceedings and was contrary to the spirit of the Scheme. [Paras 7, 9, 10, 12]

The appellate remand order, the Tribunal's orders and consequential proceedings were quashed; Form No.4 was held conclusive in terms of the Scheme.

Final Conclusion: The writ petition was allowed. The settlement certificate issued under the VSV Scheme governs the assessee's liability for Assessment Year 2018-19, and the revived assessment proceedings cannot continue.

Registration of charitable trust u/s 12AB - Charitable objects for benefit of public at large - Entitlement to registration u/s 12AB where the trust's incidental objects contemplated benefits for members but its main objects were directed to public welfare - HELD THAT: - The main objects provided for educational, social, medical, developmental and other welfare activities for the public at large, including aid to the poor and needy, without discrimination. The incidental or ancillary objects relied upon by the Revenue did not concern religious activity and did not displace the public character of the main objects.

Tribunal's grant of registration was consequently consistent with CIT Exemption Vs. Bayath Kutchhi Dasha Oswal Jain Mahajan Trust [2016 (9) TMI 8 - GUJARAT HIGH COURT] [Paras 5, 7]

No substantial question of law arose from the Tribunal's order granting registration under section 12AB.

Final Conclusion: The Revenue's appeal was dismissed, as the trust's main objects were for the benefit of the public at large and no substantial question of law arose.

Dismissal of an income-tax appeal - authorised representative was not in prescribed dress during virtual hearing - HELD THAT: - Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963 required the Tribunal to proceed with and decide the appeal notwithstanding the appellant's non-appearance. There was no provision permitting dismissal of the appeal on the ground that the authorised representative was not in proper dress under the SOP for virtual hearing. [Paras 2, 3]

The dismissal order was set aside and the appeal was restored to the Tribunal's file for expeditious disposal.

Final Conclusion: The writ petition was disposed of by setting aside the Tribunal's non-merits dismissal and restoring the appeal for adjudication.

Tax collection at source on beer sales u/s 206C -Indian-made foreign liquor exclusion - Interpretation of undefined commercial expressions - definitions of “liquor”, “foreign liquor”, and “Indian Made Foreign Liquor/IMFL” as defined in the Andhra Pradesh / [Telangana] Excise Act, 1968

Liability to collect tax at source on sales of beer before 01.06.2003 under the entry for alcoholic liquor for human consumption other than IMFL - HELD THAT: - Statutory provisions of Section 206C of the Act of 1061 which itself fastens an obligation to collect tax at source only when the transaction involves goods that fall within the specific descriptions set out in the statutory Table. So, the main question is simply whether the goods sold fit that Table description. For the years in question, the relevant entry was framed as “alcoholic liquor for human consumption (other than IMFL)”. The words in parentheses are not decorative or incidental, but they are part of the definition of the taxable category and operate as an inbuilt limitation. The entry covers only that subset of alcoholic liquor which is not IMFL.

To put in simple language, the Revenue is only partly right where TCS is mandatory only if the sale falls within the table entry and the entry applies only when the goods match the description completely including the words in brackets that exclude IMFL. So unless it is first shown that ‘Beer’ is not IMFL for that period Revenue cannot say TCS was automatic just because ‘Beer’ is alcoholic liquor for human consumption.

Moreover, the term IMFL is not defined anywhere in the Income-tax Act when a tax law uses a common commercial term but does not define it, Courts generally do not invent a new meaning on their own. Instead, they try to understand the term in the way it is normally understood by people who deal with that product in real life, such as traders, sellers and those in the liquor business.

The parenthetical exclusion of IMFL formed an integral limitation upon the relevant Table entry and tax collection at source could arise only if beer was shown not to be IMFL. As IMFL was undefined in the Income-tax Act, its meaning had to be determined in its commercial and statutory context.

The Tribunal's view that beer could fall within IMFL was a reasonable classification view, State excise classifications were only collateral aids and could not control the Income-tax Act. Contemporaneous explanatory material could permissibly assist in understanding the undefined expression.

The subsequent deletion of the words "other than IMFL" with effect from 01.06.2003 was deliberate and broadened the entry prospectively; an interpretation rendering that amendment ineffective was impermissible.

Once the ITAT’s view is accepted as a reasonable view on classification for the pre-amendment period, the Revenue’s further arguments become consequential and cannot independently sustain the appeal. Issues about whether the APBCL is a “seller”, whether the APBCL should be treated as an assessee in default u/s 206C(6) of the Act of 1961, and whether interest u/s 206C(7) of the Act of 1961is payable, all arise only if the goods sold fall within the relevant Table entry in the first place.

For the pre 01.06.2003 period, if ‘Beer’ is treated as falling within IMFL, therefore within the excluded class, the statutory trigger for TCS does not operate and the alleged defaults and interest do not survive. Therefore, we are of the considered opinion that the Revenue has not shown that the ITAT’s classification finding is perverse or based on a wrong legal test so as to raise a substantial question of law under Section 260A of the Act of 1961.[Paras 39, 40, 42, 43, 44]

Beer was held to fall within the excluded class of IMFL for the pre-01.06.2003 period; consequently, no obligation to collect tax at source, default liability, or consequential interest arose, and no substantial question of law was made out.

Final Conclusion: The appeals were dismissed. The Tribunal's classification of beer as IMFL for the period before 01.06.2003 was sustained, excluding the sales from the relevant tax-collection-at-source entry.

Reassessment notice beyond surviving limitation period - Validity of deemed notice under reassessment regime - Validity of the reassessment notice for AY 2014-2015 issued after expiry of the surviving time available under the Income-tax Act read with TOLA - HELD THAT: - The original reassessment notice, deemed to be a notice under the new reassessment procedure pursuant to Union of India Vs. Ashish Agarwal, was issued within the TOLA extension. Applying the principle in Union of India Vs. Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] the reassessment notice under the new regime had to be issued within the limitation period surviving after exclusion of the deemed stay and the period allowed for reply. The surviving period expired on 16.06.2022, whereas the order and consequential notice were issued thereafter. [Paras 7, 9]

The order u/s 148A(d), the notice u/s 148 and all consequential reassessment proceedings were quashed as time barred.

Final Conclusion: The writ petition was allowed. The reassessment order and notice, having been issued beyond the surviving limitation period, and all consequential proceedings were quashed.

Unexplained cash credit - real credit requirement - Excessive payment to related persons - fair market value of services - Partners' capital contribution - assessment of source in partners' hands

Unexplained cash credit - real credit requirement - Notional journal entry - Addition for the notional credit to partners' capital accounts arising from transfer of salary and wages liability - HELD THAT: - Section 68 applies where a credit represents a real receipt, money's worth or inflow requiring explanation; it cannot be invoked merely because a book entry exists. The partners confirmed that no capital was actually introduced, and the Revenue produced no material showing receipt of money, asset or equivalent benefit by the firm. Conversion of salary payable into partners' capital was a change in the form of liability, with no corresponding effect on assets; its reversal in the succeeding year was relevant corroborative evidence of the erroneous entry. Defective accounting treatment, without proof of a real unexplained credit, could not give rise to taxable income. [Paras 10, 11, 12, 13, 14]

The addition u/s 68 in respect of the notional capital credit was deleted.

Excessive payment to related persons - fair market value of services - Disallowance of salary paid to relatives of partners as excessive - HELD THAT: - The employees performed managerial, recruitment, administrative and supervisory functions at multiple business locations. AO neither established that the payments exceeded the fair market value of their services nor supplied a basis or comparable instance for the ad hoc disallowance. The salaries could not therefore be regarded as excessive merely because they were paid to related persons. [Paras 16]

The disallowance of salary paid to related employees was deleted.

Partners' capital contribution u/s 40A - assessment of source in partners' hands - addition relating to actual capital contribution by identifiable partners - HELD THAT: - The partners admitted the capital contributions and their identity was not in dispute. Where identifiable partners confirm introduction of capital, any doubt regarding their creditworthiness or source is to be examined in their individual assessments and not by treating the contribution as unexplained income of the firm. The principle stated in PCIT Vs. Vaishnodevi Refoils & Solves [2018 (1) TMI 861 - GUJARAT HIGH COURT] supported the deletion. [Paras 18]

The deletion of the addition relating to the partners' actual capital contribution was upheld and the Revenue's appeal was dismissed.

Final Conclusion: The assessee's appeal was allowed, with deletion of the additions for the notional capital entry and related-party salary payments. The Revenue's appeal against deletion of the addition for actual partners' capital contribution was dismissed.

Validity of reassessment notice - Deduction for political contributions u/s 80GGC - genuineness of donation - Accommodation entries-test of human probabilities

Validity of reassessment notice - Validity of the notice issued under section 148 for reassessment of the assessee's claim of deduction for political donation - HELD THAT: - The reassessment proceedings were found to have been initiated in accordance with the provisions of the Act. The notice u/s 148 could therefore not be regarded as issued without jurisdiction or as invalid. [Paras 6]

The challenge to the reassessment notice was dismissed.

Deduction for political contributions - genuineness of donation - Accommodation entries - test of human probabilities - Allowability of deduction u/s 80GGC for contribution to a political party alleged to be an accommodation entry - HELD THAT: - Documentary evidence of payment through banking channels and donation receipts does not preclude examination of the surrounding circumstances. Applying the test of human probabilities, the investigation material, statements recorded under section 132(4), bank-trail analysis and the established fund-layering arrangement of the recipient political party constituted an overwhelming chain of circumstances showing that the contribution was an accommodation entry rather than a genuine donation. The assessee failed to establish eligibility for the deduction. [Paras 10, 11]

The disallowance of deduction under section 80GGC was upheld and the grounds on merits and natural justice were dismissed.

Final Conclusion: The appeal was dismissed. The reassessment notice was sustained and the claimed deduction for the political contribution was rightly disallowed.

Retrospective application of trust registration - registration granted to the trust u/s 12AB - Appeal as continuation of assessment proceedings - Exemption of charitable trust income

Availability of exemption u/ss 11 to 13 to a trust for assessment years preceding registration u/s 12AB where the appeals against those assessments remained pending and the objects and activities continued unchanged - HELD THAT: - The first proviso to section 12A(2), introduced to alleviate hardship to genuine charitable institutions, applies to prior assessment years where the trust's objects and activities remain the same. Proceedings pending in appeal are a continuation of assessment proceedings and are consequently deemed to be proceedings pending before the Assessing Officer for the purpose of the proviso. Since the trust's objects and activities remained unchanged and its application of income exceeded the prescribed threshold in the years under appeal, its income was held exempt under sections 11 to 13. [Paras 16, 18, 19, 20, 22]

The registration benefit was extended to A.Y. 2016-17 and subsequent assessment years under appeal; the additions were directed to be deleted.

Final Conclusion: The appeals were allowed. The trust was held entitled to exemption under sections 11 to 13 for A.Y. 2016-17 and the substantially similar subsequent assessment years under appeal.

Protective transfer-pricing adjustment for captive power transfers - Market value of electricity for captive consumption - Export commission to non-resident agents-tax withholding

Protective transfer-pricing adjustment for captive power transfers - Market value of electricity for captive consumption - TP adjustment in respect of electricity transferred from captive power units to the paper manufacturing division, where no deduction for eligible power-unit profits was claimed owing to returned losses - HELD THAT: - The Tribunal held that, as no deduction under section 80-IA was claimed and the Transfer Pricing Officer had quantified the adjustment only protectively, no adjustment under the normal provisions was warranted. Independently, it held that the market value of electricity transferred for captive consumption is the rate at which the distribution company supplies electricity to consumers, following the earlier order in the assessee's case [2023 (11) TMI 1361 - ITAT CHENNAI] for AY 2016- 17 and CIT v. Jindal Steel & Power Ltd. [2023 (12) TMI 417 - SUPREME COURT]. [Paras 7]

Deletion of the transfer-pricing adjustment was upheld.

TDS u/s 195 - Export commission to non-resident agents - tax withholding - Disallowance of export commission paid to non-resident agents for procuring export orders outside India, without deduction of tax at source - HELD THAT: - The Tribunal found that the agents had no permanent establishment in India and rendered no services in India. The commission was therefore not chargeable to tax in India and did not attract tax deduction at source, the issue being covered by the jurisdictional High Court's judgment in the assessee's own case.[Paras 8]

Deletion of the disallowance under section 40(a)(i) was upheld.

Final Conclusion: The Revenue's appeal was dismissed. The deletion of the protective transfer-pricing adjustment and of the disallowance of export commission was sustained; the book-profit grounds did not survive after rectification.

Deduction for investment in residential house u/s 54F - Genuine tax planning and colourable device - Purchase of residential property from spouse - HELD THAT: - The deduction was denied solely because the spouse set off a part of the short-term capital gain arising on the sale against business losses. The business loss arose after the purchase and sale of the property and, therefore, could neither have accrued nor been anticipated when the transaction was undertaken.

A transaction between spouses, made within the legal framework, cannot be treated as a colourable device merely because it results in a tax benefit; nor can the deduction be denied on suspicion or surmise in the absence of any legal flaw or material dislodging the transaction.

We observed that identical issue has been addressed in the case of Nidhi siddharth Kejriwal [2026 (5) TMI 447 - ITAT MUMBAI] wherein held 'Deduction could not be denied merely because the purchase was from relatives or because the Revenue suspected that the arrangement resulted in tax advantage'.

Also held in Kavita Manoj Damani [2025 (7) TMI 117 - ITAT MUMBAI] considering the ratio of the decisions of McDowell & Co. Ltd. [1985 (4) TMI 64 - SUPREME COURT] and various other decisions like Kalawati Vijaykumar Agarwal [2024 (9) TMI 1957 - ITAT PUNE], ITO v. Rajesh Sharma [2016 (4) TMI 342 - ITAT JAIPUR] Surjeet Singh [2022 (9) TMI 454 - ITAT CHANDIGARH] exemption u/s 54/54F is to be granted with respect to the residential property purchased by the assessee from his relative/family member, held that the assessee was entitled to exemption u/s 54 of the Act.[Paras 12, 14, 13, 15]

The assessee was held entitled to deduction under section 54F, and the disallowance was directed to be deleted.

Final Conclusion: The appeal was allowed. The disallowance of deduction under section 54F was deleted.

Suppression of professional receipts - Uncorroborated third-party statementrelied upon - Burden of proof - Addition for alleged suppression of a consultant doctor's professional receipts based solely on estimated consultation charges derived from hospital out-patient data and a third-party statement - HELD THAT: - The third-party statement did not establish the consultation fees actually charged or received by the assessee and was founded on estimated data. The hospital out-patient database included non-billed and non-charged patients, while the assessee's books and bank accounts had neither been rejected nor shown to contain any discrepancy. In the absence of independent corroborative material or incriminating material establishing receipts beyond those disclosed, an addition based merely on estimated consultation charges was unsustainable. See Dr. Sreenivasalu Reddy Ponnaluru [2022 (9) TMI 1441 - ITAT CHENNAI] and G. Ananthasubramaniam [2025 (1) TMI 1846 - ITAT CHENNAI] [Paras 7]

The addition towards alleged suppression of professional receipts was deleted.

Final Conclusion: The appeal was allowed and the addition for alleged suppression of professional receipts was deleted. The grounds challenging reopening and assumption of jurisdiction were left open.

Reduction of Government Litigation and Monetary Threshold for Filing Appeals before Tribunals -Appeals reported to be beyond time by 611 day - HELD THAT:- Appeals dismissed as barred by limitation for want of satisfactory explanation for delay.

Liability for cost recovery charges at an inland container depot - Benchmark Volume of Trade - Waiver of Charges - Judicially Facilitated Mediation - HELD THAT:- Considering the nature of the dispute and the status of the parties, this Court deemed it appropriate to encourage an amicable resolution of the controversy, which pertains to the levy of cost recovery charges. It was noticed that exemption/waiver from such charges was dependent upon fulfillment of the prescribed benchmark volume of trade and, in the event the benchmark was not achieved, the liability to pay such charges would fall upon CONCOR.

The batch of matters was disposed of on the partie's consensus: cost recovery charges for 2009-10 shall be borne by CONCOR, while liability for subsequent periods shall be determined after verification of the prescribed benchmark, with applicable waiver considered in accordance with law.

Customs jurisdiction to investigate breach of EPCG licence conditions - Interference with show-cause notice in writ jurisdiction - Jurisdiction of Customs Authorities - Violation of Duty Exemption Conditions - Fraud and Misdeclaration

Jurisdiction of the customs authorities to proceed on allegations that the EPCG licence holder used unconnected third-party shipping bills and made false declarations to obtain export-obligation discharge - HELD THAT: - The allegation concerned breach of the conditions subject to which duty-exempt capital goods were imported, resulting in alleged revenue loss, and not misrepresentation to the licensing authority at the stage of obtaining the EPCG licence. The issuance of an export-obligation discharge certificate did not preclude customs authorities from investigating an alleged fraud, concealment, misrepresentation or mis-declaration in relation to compliance with import conditions. No statutory bar against such proceedings was shown. [Paras 10, 11, 16]

The objection to customs jurisdiction was rejected; the petitioners were relegated to the customs adjudicatory proceedings from the show-cause-notice stage.

Interference with show-cause notice in writ jurisdiction - HELD THAT: - As the jurisdictional challenge was not established and the allegations required adjudication, the Court declined to quash the show-cause notice. The petitioners were permitted to submit an additional response and documents before the adjudicating authority, which was directed to afford a personal hearing and decide the matter in accordance with law. [Paras 16, 17]

The writ petition was disposed of without interfering with the show-cause notice, subject to protection against coercive action until adjudication.

Final Conclusion: The writ petition was disposed of by relegating the petitioners to customs adjudication on the show-cause notice. The Commissioner of Customs was directed to decide the matter after granting opportunity of response and personal hearing, and no coercive action was to be taken until such decision.

Entitlement to interest on the refunded pre-deposit from the date of deposit until its realisation - HELD THAT: - Following its earlier decision in the case of Kumavat Contractors [2024 (3) TMI 1230 - CESTAT NEW DELHI], on refund of a pre-deposit, the Tribunal held that interest was payable from the date of deposit until realisation at 12% per annum. [Paras 8]

The appellant was held entitled to interest at 12% per annum from the date of deposit till realisation.

Final Conclusion: The impugned order was modified and the appeal was allowed with consequential relief.

Alternative statutory remedy for client-stock broker disputes - Arbitration under stock exchange bye-laws - Maintainability of writ petition in contractual shareholding dispute -HELD THAT: - The dispute arose from the contractual relationship between the petitioner and the stock broker and concerned the petitioner's shareholding and Demat-account transactions. The contract note subjected disputes to the Rules, Bye-laws and Regulations of the Bombay Stock Exchange, Mumbai jurisdiction and arbitration in Mumbai. As the petitioner had not invoked the contractual or established regulatory grievance-redressal remedies, merely marking an email to SEBI did not render the writ petition maintainable. The Court did not examine the merits of the allegations concerning the shares. [Paras 11, 12, 13, 14, 15]

The writ petition was dismissed as not maintainable, with liberty to pursue the remedies available in law before the competent forum.

Final Conclusion: The writ petition was dismissed for availability of efficacious alternative remedies under the applicable stock-exchange framework and grievance-redressal mechanisms. The merits of the dispute were left open.

Suppression of material facts and abuse of process - Striking off unnecessary party - Continuation of the commercial suit against the Chapter 11 Trustee despite prior participation of the plaintiffs in the United States bankruptcy proceedings and sale of the subject matter pursuant to orders of that Court. - HELD THAT: - The plaintiffs had participated in the foreign bankruptcy proceedings, in which the subject matter of the declaratory relief had already been sold. Proceeding with the suit for declaration thereafter would be a farcical exercise and an abuse of process. The application was not one for stay under Section 10 of the Code of Civil Procedure, but invoked inherent power to strike off the suit against the Trustee for suppression of material facts. As no substantive relief was claimed against the Trustee and the plaint was a camouflage to create a cause of action within the territorial jurisdiction of the Commercial Court, it disclosed no cause of action against her. [Paras 9, 10, 11, 13, 14]

The order rejecting the application was set aside, and the Chapter 11 Trustee was directed to be struck off from the party array.

Final Conclusion: The original petition was allowed in part and the Chapter 11 Trustee was struck off from the suit. Liberty was reserved to the resolution professional to seek appropriate relief regarding the suit's maintainability under Order VII Rule 11 of the Code of Civil Procedure.

Extended period of limitation for service tax demand based on third-party income-tax data - Wilful suppression and intent to evade tax - HELD THAT: - Following the law laid down by the Tribunal in the case M/s Antares Services (P.) Ltd. [2024 (1) TMI 1120 - CESTAT CHANDIGARH]and the Hon’ble Apex Court in the case of M/s Uniworth Textiles Ltd.[2013 (1) TMI 616 - SUPREME COURT], wherein, the Hon’ble Apex Court has examined the statutory pre-requisites for invoking the extended period of limitation and dealt with the issue of whether every nonpayment can be termed as a willful default.

This Court held that, a demand founded solely on third-party income-tax data cannot sustain invocation of the extended limitation period in the absence of evidence of suppression, misstatement, fraud or other positive conduct establishing a deliberate intent to evade tax. Mere non-payment of tax does not by itself constitute wilful suppression; the Department bears the burden of proving mala fides. The appellant's bona fide belief that the services were exempt negatived any intent to evade payment of service tax. [Paras 6, 7, 8]

The demand was held barred by limitation and the impugned order was set aside without examination of the merits.

Final Conclusion: The appeal was allowed on limitation, the service tax demand having been raised beyond the permissible period without proof of wilful suppression or intent to evade tax.

Extended limitation based on third-party income-tax data - Wilful suppression with intent to evade tax - HELD THAT: - The law laid down by the various Benches of the Tribunal and the Hon’ble Apex Court in the case of M/s Uniworth Textiles Ltd. [2013 (1) TMI 616 - SUPREME COURT], wherein, the Hon’ble Apex Court has examined the statutory pre-requisites for invoking the extended period of limitation and dealt with the issue of whether every nonpayment can be termed as a willful default.

Third-party information showing a discrepancy between income-tax data and service-tax disclosures, without evidence establishing fraud, collusion, wilful misstatement or deliberate suppression with intent to evade tax, could not sustain invocation of the extended period. Mere non-payment does not by itself constitute wilful default; the burden lay on the Department to establish the requisite mala fides. [Paras 6, 7, 8]

The demand was held barred by limitation and the impugned order was set aside without examination of the merits.

Final Conclusion: The appeal was allowed, the service-tax demand having been set aside as time-barred.

Declared service of agreeing to tolerate an act-consideration and contractual obligation - Construction services to governmental authority-exemption for industrial-estate infrastructure works - Road construction works-exclusion from service tax - Extended period of limitation-suppression and interpretational dispute

Declared service of agreeing to tolerate an act-consideration and contractual obligation - Taxability of advances written off or amounts recovered from subcontractors for non-performance or deficient work as consideration for agreeing to tolerate an act. - HELD THAT: - Section 66E(e) requires an agreement or contractual understanding creating an obligation to tolerate an act, with consideration specifically flowing for such tolerance.

Mere recovery of damages, compensation, forfeiture or adjustment due to breach does not automatically become taxable consideration. The Hon’ble Supreme Court in the Intercontinental Consultants and Technocrats Pvt Ltd.[2018 (3) TMI 357 - SUPREME COURT] held that service tax can be levied only on consideration for a service i.e., quid pro quo. Amounts without service nexus cannot be taxed. Hon’ble Supreme Court in the M/s Bhayana Builders [2018 (2) TMI 1325 - SUPREME COURT], it was held that “any amount charged which has no nexus with the taxable service and is not consideration for the service provided does not become part of the value which is taxable under the Finance Act”. This Bench in the case of M/s Sembcorp Energy India Ltd. [2023 (4) TMI 919 - CESTAT HYDERABAD] held that “Tax liability – Amounts recovered as charges for breach or non-compliance of contractual terms and conditions could not be construed as ‘consideration’ for ‘refraining or tolerating an act’ and, thus, was not leviable to Service Tax in terms of Section 66E(e) of Finance Act, 1994. The jurisprudence after GST-era interpretation of “tolerating an act” also consistently recognizes that compensation for breach is not consideration unless there is a pre-agreed contractual obligation to tolerate such breach.

In the absence of a contractual clause permitting deliberate default for charges or any agreement to tolerate deficient performance for consideration, the amounts were compensatory and had no nexus with a declared service. [Paras 9, 10, 11]

The demand on miscellaneous income under Section 66E(e) was held unsustainable.

Construction services to governmental authority-exemption for industrial-estate infrastructure works - Eligibility of construction and infrastructure-development services rendered to HSIIDC for exemption available to services provided to a governmental authority. - HELD THAT: - HSIIDC was under the full control and governmental participation of the State Government and performed functions substantially overlapping municipal functions under Article 243W, including development of industrial areas, roads, bridges, water management and civic infrastructure. The contracted works, comprising industrial-estate infrastructure and public-utility facilities, were not shown to be predominantly for commercial exploitation. The exemption was to be determined by the substance of the activity rather than the recipient's nomenclature. [Paras 14, 15]

The services rendered to HSIIDC were held exempt under Notification No. 25/2012-ST.

Road construction works-exclusion from service tax - HELD THAT: - Composite contracts may contain discernible taxable and non-taxable components whose classification depends upon the nature of each activity. Road construction enjoyed exclusion or exemption during the relevant period, and no infirmity was found in the appellate relief granted in respect of the road-work component. [Paras 16]

The relief in respect of road works was upheld.

Extended period of limitation-suppression and interpretational dispute - HELD THAT: - The appellant was registered, regularly filed returns and was subject to audit; the dispute emerged from scrutiny of disclosed books and records. Suppression requires deliberate intent to evade duty and cannot be inferred merely because the Department subsequently adopts a different interpretation of law. As the controversy concerned exemption and taxability, it was interpretational and did not justify invocation of the extended period. [Paras 17, 18]

The extended period was held inapplicable; interest and penalty, including penalty under Section 78, were set aside.

Final Conclusion: The appeal was allowed with consequential relief. The demand on miscellaneous income was set aside, the HSIIDC services were held exempt, relief for road works was sustained, and the extended period, interest and penalty were held unsustainable.

SVLDRS settlement-penalty on co-noticee - Waiver of penalty for co-noticees - Precedential hierarchy of coordinate benches - HELD THAT: - Once the main noticee had settled the dispute under the Scheme, the benefit of that settlement was available to the co-noticee who had pursued the appeal. Following the Tribunal's earlier view in the case of Baba Alloys Pvt Ltd.[2026 (7) TMI 1605 - CESTAT MUMBAI], no proceedings survived for imposition of penalty on the co-noticee after settlement of the demand by the main noticee under SVLDRS, 2019. [Paras 4]

The penalty imposed on the co-noticee was unsustainable; the impugned order was set aside and the appeal was allowed.

Final Conclusion: The appeal was allowed and the penalty on the co-noticee was set aside, as the main noticee had settled the underlying dispute under SVLDRS, 2019.

Employee-employer exclusion from taxable service - Service tax on meeting fees paid to whole-time directors - Leviability of service tax under reverse charge on meeting fees paid to whole-time directors in the course of their employment. - HELD THAT: - Following the case of Rent Works India Pvt. Ltd.[2016 (5) TMI 786 - CESTAT MUMBAI], which has been followed subsequently in the case of PCM Cement Concrete Pvt. Ltd.[2017 (9) TMI 1382 - CESTAT KOLKATA] and Maithan Alloys Ltd [2019 (4) TMI 1595 - CESTAT KOLKATA] This Court held that, a whole-time director is in the full-time employment of the company and remuneration paid in that capacity arises from the employer-employee relationship. Meeting fees paid to such directors consequently fall within the exclusion for services provided by an employee to an employer in the course of employment and do not constitute taxable service. The departmental clarification also recognises that amounts paid for duties performed within the framework of employment are not liable to service tax. [Paras 6, 8, 9, 10]

No service tax was leviable on the meeting fees paid to the whole-time directors; the impugned order was held unsustainable and the appeal was allowed.

Final Conclusion: The demand of service tax under reverse charge on meeting fees paid to whole-time directors was set aside, and the appeal was allowed.

Supply of water as sale of goods - Assignment of right to use natural resources - Service tax under reverse charge -HELD THAT: - Relying on the Principal Bench in the case of Sasan Power Limited [2024 (5) TMI 326 - CESTAT NEW DELHI] and Radius Water Limited [2017 (9) TMI 83 - CESTAT NEW DELHI], where the assessee was engaged in supply of water to Chhattisgarh State Industrial Development Corporation and the Tribunal held that the arrangement for supply of water for fixed tariff and which cannot be termed as service. The said decision has been affirmed by the Apex Court [2018 (7) TMI 1657 - SC ORDER] We also find that the Commissioner, Central Excise, Bharuch on identical facts set aside the demand from NTPC Ltd. and the department has not challenged the same, thereby the decision of the Commissioner has attained finality which is binding on the department.

The agreement, read with the statutory arrangement for industrial supply of water, showed that the appellant paid water charges based on the volume drawn and made its own arrangements for drawal. Its substance was thus supply of water, and not mere access to, or assignment of a right to use, a Government water resource. Supply of water constituted sale of goods and involved no service liable to service tax under reverse charge. [Paras 7, 9]

The service-tax demand on water charges was unsustainable; the impugned order was set aside and the appeal was allowed.

Final Conclusion: The appeal was allowed, the Tribunal holding that the agreement concerned sale and supply of water rather than a taxable service involving assignment of a right to use natural resources.

Separate classification of clearing and forwarding agency service and goods transport agency service - Reverse-charge liability for goods transport agency service received by body corporates - HELD THAT: - The goods transport agency service cannot be combined with the clearing and forwarding agency services even though the two services were provided under the same agreements. The amounts paid for the two services were given separately in the agreements.

A common agreement did not render the two services a single composite service where it separately stipulated rates and remuneration for clearing and forwarding operations and goods transportation. The transportation activity, supported by serially numbered goods receipts or consignment notes, was classifiable as goods transport agency service. As the service recipients were body corporates, liability for service tax on that service rested upon them under the reverse-charge mechanism and not upon the appellants. [Paras 4, 5, 6]

Amounts collected for goods transport agency service could not be added to the consideration for clearing and forwarding agency service; the impugned order was set aside and the appeals were allowed with consequential relief.

Final Conclusion: The demands treating goods transport agency receipts as consideration for clearing and forwarding agency service were unsustainable. All three appeals were allowed with consequential relief.

Forfeiture of refundable die-development deposits - Liquidated damages and transaction value - Additional consideration under Central Excise valuation - Extended limitation for suppression of facts - Penalty for suppression with intent to evade duty

Forfeiture of refundable die-development deposits - Liquidated damages and transaction value - Additional consideration under Central Excise valuation - HELD THAT: - An amount is includible under the transaction-value definition only where it has a direct and proximate nexus with the sale and represents consideration for the excisable goods. The deposits were refundable on contractual performance and were retained only upon the customer's breach; their retention therefore constituted contractual compensation for loss incurred on specialized dies, not price or consideration for Aluminium Profiles. Rule 6 is only a valuation mechanism and cannot enlarge transaction value by converting compensation into consideration. The Tribunal followed Caparo Engineering India (P) Ltd.[2017 (5) TMI 448 - CESTAT NEW DELHI]; Jindal Praxair Oxygen Co Ltd.[2006 (8) TMI 461 - CESTAT, BANGALORE] and Praxair India Ltd.[2007 (11) TMI 106 - CESTAT, CHENNAI] and distinguished Prayag Castings Ltd.[2005 (1) TMI 585 - CESTAT, MUMBAI], where pattern-development charges were directly relatable to manufacture and supply. [Paras 32, 34, 35, 36, 37]

The forfeited deposits were held to be liquidated damages and not additional consideration; their inclusion in assessable value and the resulting duty demand failed on merits.

Extended limitation for suppression of facts - HELD THAT: - The dispute turned on the legal character of the forfeited deposits under the valuation provisions. The contractual terms, deposits and accounting treatment were reflected in the appellant's records, and Revenue produced no evidence of deliberate concealment, fraud, wilful misstatement or intent to evade duty. A mere interpretational difference or short-payment does not establish the conditions for extended limitation. Applying Continental Foundation Jt Venture [2007 (8) TMI 11 - SUPREME COURT] and Padmini Products [1989 (8) TMI 80 - SUPREME COURT], the Tribunal held that suppression with intent to evade was not made out. [Paras 40, 41, 42, 43]

The demand was also held barred insofar as it rested on invocation of the extended period.

Penalty for suppression with intent to evade duty - HELD THAT: - As the duty demand failed on merits, the penalty could not survive. Independently, the requisite elements of fraud, collusion, wilful misstatement, suppression of facts or contravention with intent to evade duty were not established. [Paras 44]

The penalty was set aside.

Final Conclusion: The impugned order was set aside. The duty demand, interest and penalty founded on inclusion of forfeited die-development deposits in the assessable value were held unsustainable, and the appeal was allowed with consequential relief.

Finality of concluded refund proceedings-Unjust enrichment-credit notes and Chartered Accountant's certificate - Entitlement to refund, including the absence of unjust enrichment

Finality of concluded refund proceedings - Recovery of sanctioned refund - HELD THAT: - The refund entitlement had been upheld in the earlier appellate proceedings, and the Revenue's appeal against the Tribunal's order was dismissed by the Supreme Court. The Tribunal held that the sanctioned refunds had consequently attained finality and could not be disturbed through protective recovery proceedings merely by taking a subsequent contrary view. [Paras 14, 16]

The recovery proceedings founded on the alleged erroneous sanction of refund were unsustainable.

Unjust enrichment-credit notes and Chartered Accountant's certificate - Refund claims relating to excess duty adjusted through credit notes were not barred by unjust enrichment where the duty incidence had not ultimately been passed on to customers. - HELD THAT: - The earlier final order had found that, owing to fluctuating prices and running accounts, the assessee had credited buyers' accounts with the disputed duty and had neither collected nor retained any extra amount. The Chartered Accountant's certificate supported the position that the duty burden was not passed on. Applying the principle that return of the amount initially charged through credit notes negates unjust enrichment, the Tribunal held that the sole basis for rejecting the refund claims and raising recovery demands failed. [Paras 14, 15, 16, 17]

There being no unjust enrichment, the impugned order was set aside.

Final Conclusion: The appeals were allowed with consequential relief. The sanctioned refunds, having attained finality, could not be recovered, and the allegation of unjust enrichment was not established.

CENVAT credit on surplus electricity generated from bagasse - Rule 6(3) payment on electricity wheeled to the grid - Liability to pay an amount equal to 6% of the value of surplus electricity generated from bagasse and sold to MSEDCL under Rule 6(3) of the CENVAT Credit Rules, 2004. - HELD THAT: - The Tribunal held that the controversy was covered by its earlier decision in M/s Olam Agro India Pvt Ltd & others [2026 (4) TMI 860 - CESTAT MUMBAI]. That decision had recognised that electricity produced from bagasse and wheeled to MSEDCL did not attract payment under Rule 6(3), consistently with the decisions referred to therein and the accepted adjudication order in the case of M/s Vaidyanath SSK Ltd. & others. As there was no change in the governing statutory provisions during the relevant period, a contrary view could not be taken. [Paras 4, 5]

The demand calculated at 6% of the value of electricity sold to MSEDCL was unsustainable; the impugned orders were set aside and the appeals were allowed.

Final Conclusion: The impugned orders confirming Rule 6(3) demands in respect of surplus electricity sold to MSEDCL were set aside, and the appeals were allowed.

Recovery of costs from pensionary benefits without hearing affected officers - Direction permitting recovery of costs from the pensionary benefits of officers responsible for seizure of mentha oil, though they were not parties to the writ petition. - HELD THAT: - The officers whose pensionary benefits were directed to be subjected to recovery were neither parties to the writ petition nor afforded an opportunity of hearing. Such a direction was, therefore, neither warranted nor correct. [Paras 4, 5]

The direction enabling the State Government to recover the costs from the pensionary benefits of the concerned officers was set aside; the order on the merits of the seizure was left undisturbed.

Final Conclusion: The civil appeal was allowed solely to the extent of deleting the direction for recovery of costs from the pensionary benefits of the concerned officers.

Entry tax reassessment on invoices arising from alleged meter tampering - Pending entry-tax reassessment founded on invoices raised from consumers for alleged meter tampering, where subsequent arbitration proceedings affected the status of those invoices. - HELD THAT: - In view of subsequent arbitration proceedings initiated by consumers and awards in favour of consumers in some cases, the Court considered it appropriate that the exact status of every invoice forming the basis of the reassessment notices be placed before the Assessing Officer. The reassessment is to be determined in accordance with law on the basis of amounts, if any, actually received against those invoices. [Paras 4, 5]

The appellant was relegated to the Assessing Officer to file an affidavit on the status of the relevant invoices, following which the pending reassessment proceedings shall be decided in accordance with law.

Final Conclusion: The civil appeals were disposed of by directing consideration of the pending reassessment proceedings after disclosure of the status of the invoices and receipt, if any, of amounts thereunder.

Parity among similarly placed co-accused - Quashing of criminal proceedings - Continuation of forgery-related criminal proceedings against a co-accused after quashing of proceedings against a similarly placed accused on the basis that the underlying allegation of non-payment of KVAT had attained finality. - HELD THAT: - The co-ordinate Bench [2025 (6) TMI 2147 - KARNATAKA HIGH COURT] had quashed proceedings against another accused because the sole allegation concerned non-payment of KVAT and the tax liability had attained finality through the appellate and consequential proceedings. The petitioner, being similarly placed as that co-accused, was held entitled to the benefit of that order. [Paras 5]

The proceedings against the petitioner were quashed.

Final Conclusion: Applying parity with the order quashing proceedings against the similarly placed co-accused, the criminal proceedings against the petitioner were quashed.

Statutory interest on sales tax refund - Entitlement to interest on the sales tax amount refunded following withdrawal of the Department's revision under the State litigation policy. - HELD THAT: - Section 56 of the Rajasthan Sales Tax Act, 1994 mandates that an amount refundable to a dealer carries interest at the prescribed rate from the date of its deposit. Once the refund was granted, the respondents could not avoid this statutory obligation merely because the underlying revision had been withdrawn pursuant to the litigation policy. [Paras 8]

The respondents were directed to pay statutory interest on the refunded amount in accordance with Section 56 within three months.

Final Conclusion: The writ petition was allowed, and the respondents were directed to pay statutory interest on the refunded sales tax amount in accordance with Section 56 of the Rajasthan Sales Tax Act, 1994.

Best judgment assessment - Enhancement of disclosed turnover - Rejection of Books of Account - Enhancement of the disclosed turnover of a tyre and tube dealer towards alleged undisclosed purchases and sales solely because books of account were not produced at survey, without adverse material or discrepancy supporting the estimation. - HELD THAT: - It is settled law that if the books of account is not found, the same can be rejected but the same will not entitle the assessing authority for enhancing the turnover without there being any cogent material.

The issue in hand is squarely covered by the judgement of this Court in the case of M/s Kamla Trading Company [2026 (7) TMI 1604 - ALLAHABAD HIGH COURT], which has not been disputed by the learned ACSC.

Non-production of books of account at survey may justify their rejection and a best judgment assessment, but does not by itself authorise enhancement of disclosed turnover. In the absence of any other discrepancy at the survey or cogent material supporting undisclosed purchases and sales, the estimated turnover could not be sustained. [Paras 8, 9, 10, 11, 12]

The disclosed turnover was directed to be accepted; the Tribunal's order restoring the estimated turnover was set aside.

Final Conclusion: The revision was allowed and the questions of law were answered in favour of the revisionist. The disclosed turnover was accepted.

Interference under Section 482 - scope of revisional jurisdiction under Section 397 - recovery of its service charges - HELD THAT:- It is equally well settled that at the stage of considering a complaint under Sections 200 and 203 Cr.P.C., the Magistrate is not required to undertake a meticulous appreciation of the evidence. The Court is only required to ascertain whether the material placed before it discloses sufficient grounds for proceeding against the proposed accused. The Magistrate is not expected to undertake a meticulous appreciation of the evidence. Conversely, where the material placed on record does not prima facie disclose the commission of the alleged offences, the complaint is liable to be dismissed under Section 203 Cr.P.C.

The principal submissions of the petitioner pertain to the genuineness of the communication, the alleged forgery of signatures, the valuation of the shipment and the petitioner's entitlement to additional commission. These were the very issues examined by the learned MM while considering the pre-summoning evidence. Upon appreciation of the material placed on record, the learned MM concluded that no prima facie case was made out and that the dispute was essentially civil in nature. The learned ASJ found no infirmity in the said view. The decisions relied upon by the petitioner lay down settled principles of lawof the Supreme Court in S.W. Palanitkar [2001 (10) TMI 1150 - SUPREME COURT], Nirmaljit Singh Hoon [1972 (9) TMI 147 - SUPREME COURT], Vadilal Panchal v. Dattatraya Dulaji Ghadigaonka etc,. to submit that the learned MM and learned ASJ failed to appreciate the essence of Sections 200 and 202 of the Cr.P.C.

This Court also finds no patent illegality, perversity or jurisdictional error in the impugned orders warranting interference under Section 482 Cr.P.C.

The petition under Section 482 Cr.P.C. was dismissed, the Court finding no patent illegality, perversity or jurisdictional error in the concurrent orders dismissing the complaint.