TaxTMI Updates e-Newsletter
Aug 01,2024

Mis addressed show cause notice and reliance on records of a different entity - show cause notice under Section 73 of the U.P. Goods and Services Tax Act, 2017 - non consideration of earlier reply - remand for fresh consideration after personal hearing - opportunity of personal hearing and fresh adjudication

Mis addressed show cause notice and reliance on records of a different entity - non consideration of earlier reply - show cause notice under Section 73 of the U.P. Goods and Services Tax Act, 2017 - Whether the proceedings initiated by issuance of notice under Section 73 could be sustained without considering the petitioner's earlier reply which pointed out that the table/figures in the notice related to another entity - HELD THAT: - The Court accepted the petitioner's contention that the show cause notice under Section 73 reproduced a Table and figures that corresponded to another company (M/s Paridhee Creation) and that the petitioner had earlier replied pointing out this mis match. The Court found that the petitioner's grievance centred on apparent non consideration of that earlier reply and on the issuance of a notice containing material relating to a different entity. In the interests of justice the Court directed that the petitioner be given an opportunity to file a detailed reply confined to its own returns and to deny liability insofar as the notice addressed to the other entity is concerned. The respondent was directed to consider the petitioner's earlier and fresh reply, provide personal hearing to the petitioner's representative (including by video conferencing if necessary), and thereafter take an informed decision. Timelines were prescribed for filing the detailed reply and for the respondent to decide the matter, indicating that no final order had been passed as yet and that a fresh adjudicatory exercise was required.

The matter is remitted for fresh consideration: petitioner to file detailed reply within one week; respondent to provide personal hearing and decide the show cause notice after considering the petitioner's replies within four weeks thereafter.

Final Conclusion: Writ petition disposed of by directing the petitioner to submit a detailed reply confined to its own returns within one week and by remanding the matter to the respondent for fresh adjudication after personal hearing, to be completed within four weeks thereafter.

Obligation under Section 75(4) of the U.P. GST Act, 2017 to grant hearing where an adverse decision is contemplated - opportunity of personal hearing - principle of natural justice - setting aside and remand for fresh adjudication

Obligation under Section 75(4) of the U.P. GST Act, 2017 to grant hearing where an adverse decision is contemplated - opportunity of personal hearing - principle of natural justice - Whether the assessment order dated 19.04.2024, raising demand for the tax period 2018-19, is vitiated by denial of opportunity of personal hearing in contravention of Section 75(4) and principles of natural justice. - HELD THAT: - The Court accepted the proposition, adopted from the coordinate bench decision in Bharat Mint & Allied Chemicals, that Section 75(4) imposes a mandatory obligation on the assessing authority to afford an opportunity of personal hearing where an adverse decision is contemplated and an assessee is not required to request such opportunity. In the present case the notice issued to the petitioner recorded "NA" against the columns for date, time and venue of personal hearing and no oral hearing was afforded prior to passing the adverse assessment order. Given that the order created a civil liability against the petitioner, minimal opportunity of hearing was necessary both as a requirement of Section 75(4) and under the principle of natural justice. The Court noted that allowing an opportunity of hearing ensures a reasoned and just order and aids effective appellate scrutiny. Consequently, the impugned order could not stand and the matter required fresh consideration after affording personal hearing.

Impugned order dated 19.04.2024 set aside and the matter remitted to the Assistant Commissioner to issue fresh notice and afford personal hearing before concluding proceedings.

Final Conclusion: Writ petition disposed of by setting aside the assessment order for 2018-19 and remitting the matter for fresh adjudication after issuance of a fresh notice and affording the petitioner a personal hearing within two weeks.

Natural justice - opportunity to be heard - personal hearing - remand for reconsideration - condition of payment as a pre-condition for remand - service/uploading of order on portal - requirement to furnish documents to establish compliance with Section 16

Natural justice - service/uploading of order on portal - opportunity to be heard - Impugned assessment order set aside and remitted on ground that petitioner did not have a reasonable opportunity to contest the tax demand on merits. - HELD THAT: - The Court found that while a show cause notice was issued and a reply in the form of GSTR 3B returns was filed, the petitioner did not annex supporting documents required to establish genuineness of supplies and entitlement under Section 16. Crucially, only a summary of the final order was uploaded on the portal and the petitioner remained unaware of the detailed order until bank attachment was effected. In these circumstances the Court held that reconsideration was necessary to secure natural justice and to ensure the petitioner had a meaningful opportunity to be heard on the merits. [Paras 5, 6]

Impugned order dated 30.12.2023 is set aside and the matter is remanded for reconsideration.

Remand for reconsideration - condition of payment as a pre-condition for remand - personal hearing - requirement to furnish documents to establish compliance with Section 16 - Terms and consequences of remand including conditional payment, filing of documents, entitlement to hearing, timetable for fresh order, and lifting of bank attachment. - HELD THAT: - The Court prescribed specific condign terms to regulate the remand. The petitioner was required to remit an additional 5% of the disputed tax demand within 15 days and was permitted within that period to file an additional reply to the show cause notice with all relevant documents (tax invoices, documents showing movement of goods, bank statements, proof of tax payment by suppliers). Upon receipt and satisfaction that 15% of the disputed demand has been received in aggregate (10% earlier paid on filing appeal plus the additional 5%), the first respondent must afford a reasonable opportunity including a personal hearing and thereafter pass a fresh order within three months from receipt of the petitioner's reply. Because the assessment order has been set aside, the bank attachment is to be lifted. [Paras 6]

Remand is ordered on condition that the petitioner remits an additional 5% within 15 days, files supporting documents within that period, after which the respondent shall provide a hearing and pass a fresh order within three months; the bank attachment is raised.

Final Conclusion: The writ petition is disposed by setting aside the assessment order and remanding the matter for fresh consideration on prescribed conditions (additional 5% payment, submission of supporting documents, entitlement to personal hearing and fresh order within three months); the bank attachment is lifted and there is no order as to costs.

Detention and seizure in transit under Section 129 of the CGST Act - Confiscation for intent to evade tax under Section 130 of the CGST Act - Prima facie satisfaction for invoking confiscation - Principles of natural justice in GST adjudication - Document Identification Number (DIN) requirement for tax communications

Detention and seizure in transit under Section 129 of the CGST Act - Confiscation for intent to evade tax under Section 130 of the CGST Act - Prima facie satisfaction for invoking confiscation - Whether proceedings under Section 130 of the CGST Act can be initiated without prior invocation of Section 129 of the Act - HELD THAT: - The Court held that Sections 129 and 130 operate in distinct fields: Section 129 applies to detention/seizure of goods while in transit, whereas Section 130 applies more broadly where any of the conditions in Section 130(1) (including intent to evade tax) are satisfied. Consequently, invocation of Section 130 directly, without prior proceedings under Section 129, is permissible provided the proper officer forms a prima facie satisfaction supported by material and records that the movement or transaction involves an intent to evade tax. The Court endorsed the caution that a bare or conclusory statement of intent is insufficient; the authority must record reasons and material on the basis of which Section 130 is invoked at the threshold. [Paras 24, 26, 27]

Section 130 may be invoked directly when the officer, on material, forms a prima facie satisfaction of intent to evade tax; such invocation must be supported by recorded reasons and material.

Principles of natural justice in GST adjudication - Confiscation for intent to evade tax under Section 130 of the CGST Act - Validity of the impugned confiscation orders in the present cases and whether the show-cause notices met the requirements of natural justice - HELD THAT: - The Court declined to adjudicate the factual merits but examined procedural compliance. Although initiation under Section 130 on 01.05.2024 could not be faulted in principle, the show-cause notices did not set out the full case or the specific material upon which the officer relied; subsequently, the confiscation orders contained additional details and findings not disclosed in the notices. The petitioners' request for the inquiry report and material was not furnished. The Court reiterated the settled principle that a show-cause notice must set out the case against the noticee so that the noticee has a real opportunity to rebut the material. Failure to disclose reasons and material amounted to a violation of the principles of natural justice. [Paras 28, 29, 30]

Impugned confiscation orders were procedurally defective for failing to disclose the material and reasons in the show-cause notice and thus violated principles of natural justice; the orders are set aside and remanded for fresh adjudication following natural justice.

Document Identification Number (DIN) requirement for tax communications - Principles of natural justice in GST adjudication - Whether non-affixture of a DIN on the confiscation orders renders them invalid - HELD THAT: - The Court examined the CBIC circular requiring every order or communication of the tax authorities to contain a DIN. The circular makes no distinction between orders served directly on dealers and those uploaded on the departmental portal. The absence of a DIN on the confiscation orders of 25.05.2024 undermines the formal validity of the proceedings and was held to be a factor militating against the validity of those orders in the present case. [Paras 31]

Non-mention of a DIN on the impugned orders militates against their validity and contributed to setting aside the orders.

Final Conclusion: The confiscation orders dated 25-05-2024 are set aside and the matters are remanded to the adjudicating authority for fresh adjudication in accordance with law and following the principles of natural justice; no order as to costs.

Violation of principles of natural justice - mandatory duty to consider representation before passing order - statutory right to personal hearing under Section 75(4) of the CGST Act, 2017 - entertainment of writ petition despite alternative efficacious remedy in exceptional circumstances - quashing and remand for fresh consideration after affording hearing

Entertainment of writ petition despite alternative efficacious remedy in exceptional circumstances - violation of principles of natural justice - Whether the writ petition was maintainable notwithstanding the availability of statutory appeal remedies - HELD THAT: - The Court applied the established principle that existence of an alternative efficacious remedy is not an absolute bar to writ jurisdiction but writs are to be entertained only in exceptional circumstances such as breach of fundamental rights or violation of principles of natural justice. On the material on record the Court found that the respondent did not advert to the petitioner's response dated 12.03.2024 and did not afford the personal hearing sought under Section 75(4) before passing the adverse order dated 30.03.2024. These facts, the Court held, amounted to a violation of the mandatory process envisaged by Sections 73(9), 73(10) and 75(4) of the CGST Act and fell within the category of exceptional circumstances permitting exercise of writ jurisdiction under Article 226. Accordingly the petition could be entertained despite availability of the appeal remedy. [Paras 28, 30, 31, 32]

Writ petition maintainable and entertained because the impugned order involved violation of principles of natural justice and mandatory statutory procedure.

Statutory right to personal hearing under Section 75(4) of the CGST Act, 2017 - mandatory duty to consider representation before passing order - quashing and remand for fresh consideration after affording hearing - Whether the order in Form GST DRC-07 dated 30.03.2024 was vitiated for failure to consider the petitioner's representation and for not granting the requested personal hearing, and what relief should follow - HELD THAT: - The Court examined Sections 73(9), 73(10) and 75(4) of the CGST Act and concluded that the statutory language (use of 'shall') imposes a mandatory duty on the proper officer to consider any representation and to grant a personal hearing when requested. The record showed that the petitioner filed a response on 12.03.2024 and requested a personal hearing, but the impugned order did not advert to that response nor record that the personal hearing was indeed granted. Given this failure to apply mind to the representation and to afford the statutory hearing, the impugned order was held to be contrary to the statutory scheme and principles of natural justice. The Court therefore quashed the impugned order and remitted the matter to the Assistant Commissioner for fresh consideration after affording the petitioner a personal hearing and taking into account the response already filed. The Court imposed costs on the petitioner for non utilisation of earlier opportunities and directed appearance before the authority on the next hearing date. [Paras 18, 30, 31, 32, 33]

Impugned order quashed; matter remitted to respondent No.3 to consider the petitioner's response dated 12.03.2024 and decide afresh after granting a personal hearing under Section 75(4), subject to costs.

Final Conclusion: The petition is allowed: the order dated 30.03.2024 in Form GST DRC-07 is quashed and the matter is remitted to the Assistant Commissioner for fresh consideration after affording the petitioner the statutory opportunity of personal hearing and considering the representation dated 12.03.2024; costs imposed on the petitioner.

Article 226 of the Constitution of India - statutory appeal - limitation under Section 107 of the GST enactments - exercise of discretion to permit belated appeal subject to conditions - deposit condition for entertaining appeal

Article 226 of the Constitution of India - statutory appeal - limitation under Section 107 of the GST enactments - exercise of discretion to permit belated appeal subject to conditions - deposit condition for entertaining appeal - Whether the writ court should decide the merits of the assessment or grant liberty to file a belated statutory appeal and on what conditions. - HELD THAT: - The Court declined to adjudicate the merits of the assessment under Article 226, holding that merits are not to be decided in writ proceedings in the present circumstances and that the appropriate remedy is the statutory appeal. Although the statutory limitation for filing appeal under Section 107 of the GST enactments has expired, the Court exercised its discretionary power to afford the petitioner relief in view of the petitioner's financial distress, non-performing bank account and proceedings under the SARFAESI Act. The Court suo motu impleaded the first appellate authority as a party and permitted the petitioner to file the statutory appeal within 30 days from receipt of the order, subject to deposit of 10% of the disputed tax from its electronic cash register. On such compliance, the appellate authority was directed to entertain and dispose of the appeal on merits and in accordance with law without reference to limitation, expeditiously and preferably within three months. [Paras 7, 8, 9, 10]

Writ petition not decided on merits; petitioner granted liberty to file a belated statutory appeal within 30 days, subject to deposit of 10% of disputed tax from electronic cash register; first appellate authority impleaded and directed to admit and decide the appeal on merits without regard to limitation, preferably within three months.

Final Conclusion: Writ petition disposed by refraining from adjudicating merits; petitioner permitted to file a belated statutory appeal for assessment year 2017-18 within 30 days on deposit of 10% of disputed tax from electronic cash register, with the first appellate authority impleaded and directed to decide the appeal on merits without reference to limitation expeditiously.

Breach of principles of natural justice - opportunity of personal hearing - remand for fresh consideration - condition precedent to remand by depositing part of disputed tax - composition scheme - quarterly return in Form GSTR 4 and reconciliation with auto populated GSTR 2A/FORM GST CMP 08

Breach of principles of natural justice - opportunity of personal hearing - Impugned assessment order was vitiated for want of compliance with principles of natural justice. - HELD THAT: - The Court found that the assessment order dated 06.10.2023 was confirmed after issuance of a show cause notice but without affording the petitioner a further opportunity to meet the specific charge relating to mismatch between reported sales turnover and purchases reflected in auto populated GSTR 2A. The petitioner had filed a reply which did not address the issue raised in the show cause notice and, in the absence of any explanation, the tax proposal was confirmed. In these circumstances the interest of justice required setting aside the order and affording the petitioner a chance to contest the demand on merits, including a personal hearing. [Paras 4, 5]

Assessment order set aside for breach of natural justice and matter remanded for fresh consideration after affording opportunity to the petitioner.

Remand for fresh consideration - condition precedent to remand by depositing part of disputed tax - Terms on which the matter was remanded and directions for further proceedings. - HELD THAT: - The Court directed remand of the matter to the respondent for reconsideration on merits, subject to the petitioner first remitting 10% of the disputed tax demand within two weeks from receipt of the order. The petitioner was permitted to submit a reply to the show cause notice within the same period. Upon receipt of the petitioner's reply and satisfaction that the stipulated 10% has been remitted, the respondent is to provide a reasonable opportunity, including a personal hearing, and thereafter pass a fresh order within three months from receipt of the reply. [Paras 5]

Matter remanded on condition that petitioner remits 10% of disputed tax within two weeks, may file reply in that period, after which respondent shall afford hearing and pass fresh order within three months.

Final Conclusion: Writ petition disposed of by setting aside the assessment order dated 06.10.2023 for breach of natural justice and remanding the matter for fresh adjudication on terms that the petitioner deposit 10% of the disputed tax within two weeks, submit a reply, and be afforded a personal hearing before a fresh order is passed within three months.

Reasoned speaking order - Consideration of reply on merits - Opportunity of personal hearing - Remand for re-adjudication - Duty to seek specific clarification or documents - Fresh adjudication within time prescribed under Section 75(3) CGST Act - Adjudication under Section 73 CGST Act

Consideration of reply on merits - Reasoned speaking order - Adjudication under Section 73 CGST Act - Whether the impugned order can be sustained where the Proper Officer recorded that the taxpayer's detailed reply was 'not satisfactory' without considering it on merits - HELD THAT: - The Court found that the Proper Officer, after recording the taxpayer's detailed reply, merely stated that the reply was not satisfactory and that no substantial documents were submitted, which ex facie indicates absence of application of mind. The officer should have considered the reply on merits and formed an opinion thereon; merely recording dissatisfaction without reasoning or evaluation of the documents is unsustainable. Consequently, the impugned order passed under Section 73 of the Act is set aside for lack of proper consideration and absence of a speaking reasoning on the replies filed by the petitioner. [Paras 5]

Impugned order set aside for failure to consider the taxpayer's reply on merits.

Duty to seek specific clarification or documents - Opportunity of personal hearing - Remand for re-adjudication - Fresh adjudication within time prescribed under Section 75(3) CGST Act - Relief to be granted where the Proper Officer did not seek specific clarifications or call for documents before creating demand and reported non-appearance at personal hearing - HELD THAT: - The Court observed that if the Proper Officer required further details, those should have been specifically sought from the petitioner; the record did not show any such specific intimation. The order's statement that reminders were sent and that the taxpayer did not appear does not cure the failure to indicate what additional information was necessary. In the circumstances the matter is remitted to the Proper Officer to intimate required details/documents, allow the petitioner to furnish explanations and documents, afford personal hearing, and thereafter re-adjudicate the show cause notice by passing a fresh speaking order in accordance with law within the period prescribed under Section 75(3) of the Act. [Paras 6, 7, 8]

Matter remitted for re-adjudication with direction to intimate required documents, provide personal hearing, and pass a fresh speaking order within Section 75(3) timeline.

Reasoned speaking order - Whether the High Court has expressed any view on the merits of the contentions of the parties in setting aside the impugned order - HELD THAT: - The Court expressly clarified that it has neither considered nor commented upon the merits of the parties' contentions and has confined itself to the procedural and adjudicatory defects in the impugned order. All substantive rights and contentions are reserved for the Proper Officer upon re-adjudication. [Paras 9]

No adjudication on merits; merits reserved.

Remand for re-adjudication - Disposition of the challenge to Notification No. 9 of 2023 insofar as initial extension of time is concerned - HELD THAT: - The Court did not decide the challenge to Notification No. 9 of 2023 regarding the initial extension of time and expressly left that challenge open for adjudication at the appropriate stage. [Paras 10]

Challenge to Notification No. 9 of 2023 left open.

Final Conclusion: The impugned order dated 28.12.2023 (passed under Section 73 CGST Act) is set aside for failure to consider the taxpayer's detailed reply and lack of a speaking order; the matter is remitted to the Proper Officer to intimate specific documentary requirements, afford an opportunity of personal hearing, and re-adjudicate by passing a fresh speaking order within the period prescribed under Section 75(3) of the Act; the Court has not decided merits and has left the challenge to Notification No. 9 of 2023 open.

Quashing of administrative order - Remand for fresh adjudication - Conditioning relief on pre-deposit - Right to opportunity of hearing including personal hearing - Service of notice and effect of cancellation of registration on monitoring obligations

Quashing of administrative order - Remand for fresh adjudication - Conditioning relief on pre-deposit - Impugned order dated 22.12.2023 quashed and matter remitted to the respondent on specified conditions. - HELD THAT: - The Court found that, although the show cause notice and reminders were issued, the petitioner had ceased construction business and its GST registration was cancelled effective 01.11.2019, making it plausible that the petitioner did not monitor the portal. Having regard to the petitioner's request for time to reply (reply dated 21.12.2023) and the stage of limitation, the Court held that the impugned order must be quashed but remitted for fresh consideration. The remand was made conditional: the petitioner must remit 10% of the disputed tax demand within three weeks of receipt of this order and is permitted to submit a reply within the same period; on satisfaction of receipt of the pre-deposit, the respondent must provide a reasonable opportunity and thereafter pass a fresh order within two months of receiving the petitioner's reply. These terms strike a balance between the petitioner's right to be heard and the need to put the petitioner on terms given the litigious history and limitation considerations. [Paras 5, 6]

Impugned order quashed and matter remitted for fresh adjudication subject to the petitioner remitting 10% of the disputed tax demand within three weeks and filing a reply; respondent to consider the reply and pass a fresh order within two months upon being satisfied of the remittance.

Right to opportunity of hearing including personal hearing - Service of notice and effect of cancellation of registration on monitoring obligations - Petitioner entitled to an opportunity to contest the demand including a personal hearing once the conditional pre-deposit is made and the reply filed. - HELD THAT: - The Court recognised that cancellation of GST registration may result in a taxpayer not routinely monitoring the portal. Given the petitioner's representation that it became aware of proceedings only through the respondent's official and its request for two weeks to respond, the Court directed that upon receipt of the petitioner's reply and confirmation of the 10% remittance, the respondent must provide a reasonable opportunity to the petitioner, expressly including a personal hearing, before passing a fresh order. This direction was imposed to ensure fair adjudication while preserving the respondent's ability to proceed on merits thereafter. [Paras 5, 6]

Petitioner to be given a reasonable opportunity, including personal hearing, to contest the show cause notice after compliance with the conditional remand terms.

Final Conclusion: Writ petition allowed in part: impugned order quashed and matter remitted to the respondent on terms - petitioner to remit 10% of disputed demand within three weeks and file a reply; respondent to provide a reasonable opportunity including personal hearing and pass a fresh order within two months from receipt of the reply; no costs.

Regular bail under Section 439 Cr.P.C. - Final report presented under Section 173 Cr.P.C. - Offences triable by Magistrate - Pendency of other criminal cases not a ground to deny bail

Regular bail under Section 439 Cr.P.C. - Final report presented under Section 173 Cr.P.C. - Offences triable by Magistrate - Pendency of other criminal cases not a ground to deny bail - Grant of regular bail to the petitioner - HELD THAT: - The Court found that the petitioner has been in custody since 21.01.2021 and that the final report under Section 173 Cr.P.C. has been presented before the trial Court. The offences are triable by the Court of Magistrate and are punishable with a maximum imprisonment of five years. Having regard to the presentation of the final report, the nature of the offences and the prolonged custody, the Court held that no purpose would be served by keeping the petitioner behind bars. The Court further held that pendency of other criminal cases against the petitioner is not a valid ground to refuse bail, relying on precedents of the Supreme Court to that effect. On these facts and circumstances the petitioner was held entitled to bail. [Paras 3, 6, 7]

Petition allowed; petitioner ordered to be released on bail on furnishing bail/surety bonds to the satisfaction of the trial Court/Duty Magistrate/Chief Judicial Magistrate.

Final Conclusion: Bail granted and petitioner directed to be released on furnishing bonds to the satisfaction of the competent Court; pendency of other FIRs held not to preclude grant of bail in the circumstances of the case.

Electronic commerce operator - electronic commerce - supply of services through the electronic commerce operator - deeming provision treating electronic commerce operator as supplier - notification specifying transportation of passengers payable by electronic commerce operator - taxability of optional ride-monitoring service as Other support services (SAC 9985) at 18% GST

Electronic commerce operator - electronic commerce - deeming provision treating electronic commerce operator as supplier - Applicant satisfies the definition of an electronic commerce operator and falls within the scope of Section 9(5) of the CGST Act, 2017 read with the relevant notification. - HELD THAT: - The authority examined the statutory definitions of electronic commerce and electronic commerce operator and noted that an ECO is any person who owns, operates or manages a digital or electronic facility or platform for electronic commerce. The applicant owns and operates the Rapido app which is a digital platform for supply of passenger-transport services. By reason of these facts and the deeming language in Section 9(5) (which makes the provisions of the Act apply to the ECO as if it were the supplier), the applicant squarely falls within the definition of an electronic commerce operator and within the statutory scheme that can fasten tax liability on such operators for notified services supplied through them. [Paras 17, 18, 22]

Applicant is an electronic commerce operator for the purposes of Section 9(5) and the related notification.

Supply of services through the electronic commerce operator - notification specifying transportation of passengers payable by electronic commerce operator - Supply by an independent four-wheeler cab service provider to passengers on the Rapido platform amounts to supply 'through' the applicant under Section 9(5) and the notification. - HELD THAT: - The Authority analysed the factual matrix admitted by the applicant: the app sends ride requests to drivers, enables fare offers and negotiation, forwards passenger location once fare is accepted, notifies start and end of ride, displays route and captures the initially agreed fare. These functionalities demonstrate that the transportation service is initiated, carried on and concluded via the applicant's platform. The word 'through' was interpreted to mean by means of or by agency of/from beginning to end; applying that meaning, the supply of transportation services effected using the app is held to be supplied through the electronic commerce operator within the meaning of Section 9(5) and the Notification which covers transportation of passengers. [Paras 20, 21, 22]

The supply of transport services by four-wheeler drivers on the app is a supply through the applicant under Section 9(5).

Deeming provision treating electronic commerce operator as supplier - supply of services through the electronic commerce operator - Applicant is liable to pay GST on the supply of services provided by independent four-wheeler cab service providers to passengers on the app platform. - HELD THAT: - Given that the applicant qualifies as an ECO and that the intra-State transportation services by motorcab are notified under the impugned notification, Section 9(5)'s deeming provision makes the ECO the person liable for paying tax as if it were the supplier. The Authority rejected the contention that absence of collection of fare by the applicant negates liability, observing that neither the definitions nor Section 9(5) require the ECO to collect consideration; liability is fastened by statute once services are supplied through the ECO and fall in the notified category. [Paras 21, 22]

Applicant is liable to pay GST on supplies by four-wheeler drivers effected through its platform under Section 9(5).

Taxability of optional ride-monitoring service as Other support services (SAC 9985) at 18% GST - The optional pay-per-use ride monitoring service offered by the applicant is taxable under SAC 9985 and attracts 18% GST (9% CGST and 9% SGST). - HELD THAT: - The Authority examined the nature of the proposed optional service (features before, during and after the ride including number-masking, face-recognition, route deviation notification, SOS, IVR follow-ups) and held that it falls within 'Other support services' covered by SAC 9985 (specifically security/consulting support-type services). Consequently, the service is taxable at the rate specified for that entry, namely 18% (9% CGST and 9% SGST). [Paras 23]

Pay-per-use ride monitoring service is taxable under SAC 9985 at 18% GST.

Notification specifying transportation of passengers payable by electronic commerce operator - supply of services through the electronic commerce operator - Applicant is liable to pay GST on supplies of services effected by independent three-wheeler and two-wheeler cab service providers to passengers on the app platform. - HELD THAT: - The Notification under Section 9(5) covers services by way of transportation of passengers by radio-taxi, motorcab, maxicab and motor cycle. The Authority noted that three-wheelers fall within the motorcab definition and two-wheelers within the motor cycle definition under the Motor Vehicles Act. Applying the same reasoning as for four-wheelers - namely that the services are supplied through the applicant's platform - the ECO is liable to discharge GST for such notified intra-State supplies effected through the app. [Paras 24]

Applicant must pay GST on supplies by three-wheeler and two-wheeler drivers effected through its platform.

Final Conclusion: The Authority ruled that the Rapido app operator is an electronic commerce operator within the meaning of the Act; passenger-transport services (four-wheeler, three-wheeler and two-wheeler) supplied via the platform are deemed to be supplied through the operator and, for notified intra State services, the operator is liable to pay GST under Section 9(5). The optional ride monitoring service supplied directly by the operator is taxable under SAC 9985 at 18%.

Exemption for services to educational institutions by way of catering including mid-day meals - distinction between supply of goods and supply of services - taxability of meal and powder products under HSN 1106 - pre-packaged and labeled / pre-packaged commodity (Legal Metrology definition)

Exemption for services to educational institutions by way of catering including mid-day meals - distinction between supply of goods and supply of services - Exemption under Entry 66 clause (b)(ii) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 is not available to the applicant. - HELD THAT: - The Authority examined whether the applicant's supplies fall within the scope of Entry 66(b)(ii) which exempts services provided to educational institutions by way of catering, including mid-day meals. The applicant purchases raw ingredients, prepares and supplies 'Pushti' and other listed items to the CDPO, which in turn distributes them to Anganwadis. These activities are supplies of goods as defined in the CGST Act and not supplies of services. Notification No. 12/2017 deals with exempted services; therefore, its exemption for catering services cannot be invoked for the applicant's supply of goods. The Authority accordingly held that the exemption is not applicable to the applicant's case. [Paras 13, 14]

Exemption under Entry 66(b)(ii) is not available to the applicant.

Exemption for services to educational institutions by way of catering including mid-day meals - circular clarifying scope of Entry 66 - Circular No. 149/05/2021-GST dated 17.06.2021 is not applicable to the applicant. - HELD THAT: - The circular clarifies the applicability of Entry 66(b)(ii) to catering services (including mid-day meals) and confirms that Anganwadis are educational institutions for that purpose. Since the applicant's supplies are goods and not catering services, the circular - which is an interpretative clarification of the entry relating to services - does not apply to the applicant's supply of goods to the CDPO/Anganwadis. [Paras 12, 13, 14]

Circular No. 149/05/2021-GST dated 17.06.2021 is not applicable to the applicant.

Exemption for services to educational institutions by way of catering including mid-day meals - state clarification aligning with central circular - State clarification No. KSA/GST.CR-05/2019-20 dated 23.06.2021 is not applicable to the applicant. - HELD THAT: - The State clarification reproduces and applies the same interpretation as the central circular in respect of Entry 66(b)(ii) (i.e., exemption for catering services to educational institutions). As the applicant's activity is supply of goods and not a catering service, the State's clarification does not extend the exemption to the applicant's supplies. [Paras 12, 13, 14]

Clarification No. KSA/GST.CR-05/2019-20 dated 23.06.2021 is not applicable to the applicant.

Taxability of meal and powder products under HSN 1106 - pre-packaged and labeled / pre-packaged commodity (Legal Metrology definition) - The applicant's product 'Pushti' is not taxable under Entry No. 78 of Notification No. 02/2017 (as amended by Notification No. 07/2022) meant for flour/meal of dried leguminous vegetables 'other than pre-packaged and labelled'. - HELD THAT: - Entry No. 78 covers flour of dried leguminous vegetables (HSN 1106) and, as amended, exempts items other than 'pre-packaged and labelled' variants of such specified legume-based products. The Authority observed that 'Pushti' is a powdered mixture comprising cereals, pulses and sugar (and other ingredients) rather than a product solely of dried leguminous vegetables as described in the entry. Given the compositional difference, the product does not fall within the description of entry No. 78 and therefore is not covered (i.e., not taxed under that entry). The Authority noted the Legal Metrology definitions referenced by the applicant but based its conclusion on the product description and composition vis-a -vis the entry's scope. [Paras 10, 11, 14]

'Pushti' is not taxed under Entry No. 78 of Notification No. 02/2017 as amended.

Taxability of meal and powder products under HSN 1106 - pre-packaged and labeled / pre-packaged commodity (Legal Metrology definition) - The applicant's product 'Pushti' is not taxable under Entry No. 59 of Notification No. 01/2017 (as amended by Notification No. 06/2022) which applies to 'meal and powder of dried leguminous vegetables' that are 'pre-packaged and labeled'. - HELD THAT: - Entry No. 59 targets 'meal and powder of the dried leguminous vegetables' put within the specified description (as amended, 'pre-packaged and labeled'). The Authority found that 'Pushti' is a composite powdered mixture including cereals and sugar in addition to pulses, and thus does not fall within the precise product description in Entry No. 59. Consequently, Entry No. 59 (and its amendment concerning 'pre-packaged and labeled' legume products) does not apply to the applicant's 'Pushti'. [Paras 10, 11, 14]

'Pushti' is not taxed under Entry No. 59 of Notification No. 01/2017 as amended.

Final Conclusion: The Authority ruled that the applicant's supplies are supplies of goods (not services) and therefore the catering-service exemption (Entry 66(b)(ii)) and the circulars/clarifications interpreting that entry do not apply; further, the product 'Pushti', being a composite powdered mixture of cereals, pulses and sugar, does not fall within the specific descriptions of HSN 1106 in Entry Nos. 78 and 59 (as amended) and hence those entries do not tax the applicant's product.

Review petition - Appropriation of profit - deductibility of business expenditure - interpretation of Clause 3 and Clause 5A of the Sugar Cane (Control) Order, 1966 - Section 40A(2) unreasonable payment - remand for quantification of profit component - delay Filing review petitions

HELD THAT:- There is an inordinate delay of 1067 days in filing each of the review petitions for which no satisfactory explanation has been given. Thus, the review petitions are liable to be dismissed on the ground of delay having not been explained satisfactorily.

However, we have considered the review petitions on merits as well. We have perused the Judgment and Order [2019 (3) TMI 321 - SUPREME COURT] which has been sought to be reviewed.

There is no error apparent on the record. Even otherwise, there is no ground for review.

Reopening of assessment - addition u/s 68 of the Income-tax Act - formation of belief for reopening - reasons recorded for reopening - misapplication of facts

As per HC [2018 (3) TMI 2043 - GUJARAT HIGH COURT] Notice reopening the assessment was set aside as the reasons recorded by the AO were vitiated by misapplication of facts and did not justify the formation of belief necessary to reopen the assessment.

HELD THAT:- As in view of Notification dated 08.08.2019, this special leave petition would not survive for further consideration owing to low tax effect.

Special Leave Petition is dismissed owing to low tax effect vide Notification dated 08.08.2019.

Reopening of assessment - assessment under section 143(3) r.w.s. 147 - notice under section 148 - change of opinion - tangible material - full and true disclosure of primary facts - presumption of application of mind in assessment under section 143(3) - quashing of reassessment notice and consequential actions

HELD THAT:- Application or exemption from filing certified copy of the impugned judgment is allowed.

Leave granted.

Power of revision under Section 263 of the Income tax Act - Requirement to record reasons for satisfaction when exercising revisionary power - Duty to consider and deliberate upon the assessee's reply and documents in a Section 263 enquiry - Confirmatory appellate interference where no application of mind is shown - Remand for fresh consideration by the revisional authority

Power of revision under Section 263 of the Income tax Act - Requirement to record reasons for satisfaction when exercising revisionary power - Pr. Commissioner exercised power under Section 263 without recording requisite reasons and without properly conducting the enquiry by deliberating upon the assessee's reply and documents. - HELD THAT: - Section 263 empowers the Principal Commissioner to call for and examine records and, if satisfied that an assessing officer's order is erroneous and prejudicial to revenue, to pass an appropriate order after giving the assessee an opportunity and after making such inquiry as necessary. The Court found that the revisional order (paras reproduced in para 5 of the proceedings) did not record the necessary reasons for such satisfaction and, in substance, did not demonstrate that the enquiry involved deliberation of the reply and documents placed before the authority. The judgment emphasises that an enquiry under Section 263 requires more than a bare statement of dissatisfaction; the reasons for satisfaction or non satisfaction must be recorded and the assessee's response cannot be merely shelved. The absence of such recorded reasons and failure to exhibit application of mind rendered the exercise of power flawed. [Paras 5, 7]

The revisional order is deficient for want of recorded reasons and inadequate enquiry; the exercise of power under Section 263 in the facts of this case is impermissible on that basis.

Confirmatory appellate interference where no application of mind is shown - Duty to consider and deliberate upon the assessee's reply and documents in a Section 263 enquiry - Whether the ITAT was justified in confirming the revisional order without ensuring that the revisional authority had applied its mind to the assessee's defence and documents. - HELD THAT: - The Tribunal confirmed the Principal Commissioner's order principally because certain documents were not produced before the lower authority. The High Court reviewed the record and found that the Tribunal failed to take cognisance of the fact that the revisional authority had not demonstrated proper consideration of the reply and documents furnished by the assessee. Where the revisional order itself lacks reasons and does not disclose deliberation of the defence, appellate confirmation cannot stand. The Court therefore concluded that the ITAT's confirmation was unsustainable in the circumstances. [Paras 3, 5, 7]

The ITAT erred in confirming the revisional order without ensuring that the revisional authority had applied its mind to the assessee's defence and materials.

Remand for fresh consideration by the revisional authority - Remedial direction whether the matter should be remanded to the Principal Commissioner for fresh consideration after affording the assessee an opportunity of hearing. - HELD THAT: - Having found the revisional exercise vitiated by absence of recorded reasons and inadequate enquiry, the Court did not decide the merits of the tax issues but directed that the Principal Commissioner reconsider the assessee's reply and documents. The Court expressly ordered that the revisional authority shall give the assessee an opportunity of hearing, deliberate upon the reply and materials, record reasons for any satisfaction reached, and pass a fresh order in accordance with law and on merits. The remand is therefore for proper application of mind and compliance with the procedural and reason recording requirements inherent to Section 263 proceedings. [Paras 8]

The matter is remanded to the Principal Commissioner to reconsider the reply and documents after affording hearing and to pass a fresh order in accordance with law.

Final Conclusion: Appeal allowed; revisional order under Section 263 and the ITAT's confirmation set aside insofar as they exhibit no application of mind or recorded reasons; matter remitted to the Principal Commissioner for fresh consideration after affording the assessee an opportunity of hearing and recording reasons in accordance with law.

Ex-parte assessment - opportunity of being heard - service of notice under Section 143(2) of the Income Tax Act - invocation of Section 144 - best judgment assessment

Ex-parte assessment - opportunity of being heard - service of notice under Section 143(2) of the Income Tax Act - Validity of ex-parte framing of assessment when assessee alleged not to have been given opportunity of presenting his side - HELD THAT: - The Assessing Officer's record shows issuance of multiple notices including under Section 143(2) and appearance by the assessee's representative who filed a power of attorney and acknowledged service. The assessee admitted service of notices but chose not to appear on the specified dates. The Court held that on these facts the AO was entitled to proceed and that no failure to afford a reasonable opportunity of hearing has been made out. [Paras 5, 6, 7]

Action of the authorities in framing the assessment ex-parte without further adjournment was legally sustainable and is upheld.

Invocation of Section 144 - best judgment assessment - opportunity of being heard - Whether the assessment made by the AO was in violation of the law governing best judgment assessments under Section 144 - HELD THAT: - Section 144 empowers the AO to make a best judgment assessment where the assessee fails to comply with notices or to appear after service; the provision requires that an opportunity to show cause be given unless a prior notice under section 142(1) has been issued. The Court found that the assessee, having failed to pursue the matter after representation and after service of notices, left the AO with no option but to proceed under Section 144. On these facts the AO's course of action did not contravene the statutory mandate. [Paras 9, 10, 11]

Assessment under Section 144 by the AO was not in violation of the statutory provisions and is sustained.

Ex-parte assessment - invocation of Section 144 - best judgment assessment - Sustainability of the impugned orders Annexures A-1 to A-3 in view of findings on opportunity and Section 144 - HELD THAT: - Having answered the questions on absence of prejudice in proceeding ex-parte and the correctness of invoking Section 144 in favour of the revenue, the Court concluded that there was no basis to interfere with the impugned assessment and related orders. The combined findings on service, representation, and statutory power to make a best judgment assessment lead to dismissal of the challenge to those orders. [Paras 12]

Impugned orders A-1 to A-3 are legally sustainable and are upheld.

Final Conclusion: The appeal is dismissed and the assessment orders and impugned orders Annexures A-1 to A-3 are upheld.

Validity of notice under Section 148 of the Income-tax Act - compliance with Section 151A and the Scheme for faceless proceedings - jurisdiction of Jurisdictional Assessing Officer versus Faceless Assessing Officer - mandatory automated allocation for issuance of notice - quashing of action for non-compliance with statutory scheme

Validity of notice under Section 148 of the Income-tax Act - compliance with Section 151A and the Scheme for faceless proceedings - jurisdiction of Jurisdictional Assessing Officer versus Faceless Assessing Officer - quashing of action for non-compliance with statutory scheme - Notice issued under Section 148 and the underlying order under Section 148A(d) were invalid as they were issued by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer in breach of Section 151A and the Scheme. - HELD THAT: - The Court found on the record that the impugned notice dated 31 March 2024 and the order under Section 148A(d) were issued by the Jurisdictional Assessing Officer and not by a Faceless Assessing Officer as mandated by the Scheme framed pursuant to Section 151A(2). Relying on the Division Bench decision in Hexaware Technologies Ltd., the Court accepted that the Scheme requires automated allocation and confers exclusive jurisdiction on the officer so allocated; there is no concurrent jurisdiction between JAO and FAO for issuance of notices under Section 148. The Scheme, having been tabled in Parliament and constituting subordinate legislation governing issuance of notices and related proceedings, must be complied with. Acting contrary to the Scheme renders the action invalid and prejudicial to the assessee without the need for separate proof of prejudice. In view of these principles and earlier authorities including Siemens Financial Services and a recent coordinate order in Nainraj Enterprises, the proceedings initiated by the JAO were held to vitiate the reassessment process. [Paras 4, 5, 6, 9]

Impugned notice dated 31 March 2024 and the underlying order are quashed and set aside; consequential demand and penalty notices also stand quashed.

Final Conclusion: Writ petition allowed on ground of non-compliance with Section 151A and the Scheme; impugned notice, the underlying order and consequential demand/penalty notices quashed; no opinion expressed on other issues.

Charitable purpose - general public utility - interpretation of changed definition of 'charitable purpose' w.e.f. 01.04.2009 - trade, commerce or business incidental to charitable objects - Registration under Section 12-AA - statutory authorities and bodies established by statute - application of Supreme Court larger Bench precedent

Registration under Section 12-AA - charitable purpose - general public utility - statutory authorities and bodies established by statute - application of Supreme Court larger Bench precedent - Whether the Income Tax Appellate Tribunal was justified in setting aside the Commissioner's order cancelling the respondent-Board's registration under Section 12 of the Income Tax Act and holding the Board to be engaged in activities of general public utility - HELD THAT: - The High Court examined whether the ITAT had erred in allowing the respondent-Board's appeal against cancellation of registration. The Court applied the larger Bench conclusions on the changed definition of "charitable purpose" (w.e.f. 01.04.2009) and related propositions concerning bodies established by statute. It noted that statutory bodies carrying out essential public functions may have receipts resembling commercial activity but are prima facie excluded from the mischief of commercial receipts, subject to scrutiny where charges are significantly higher than cost with a nominal mark-up. The Court observed that the ITAT considered the Haryana Rural Development Board's statutory objects under the Haryana Rural Development Act, 1986 - including augmentation of agricultural production, market development, roads, dispensaries, water supply and sanitation, storage facilities and related public facilities - and the prescribed fee structure as a per centum of sale proceeds. On these factual findings the ITAT concluded that the Board's activities constituted general public utility within the scope of the changed definition and therefore the Commissioner was not justified in cancelling registration. Applying the Supreme Court's reasoning, the High Court found no error in the ITAT's conclusion and no substantial question of law raised by the revenue. [Paras 6, 7, 9, 10, 11]

The ITAT's order dated 28.02.2008 setting aside the Commissioner's cancellation of the Board's registration is sustained and the revenue's appeal is dismissed.

Final Conclusion: The High Court, applying the larger Bench's interpretation of "charitable purpose" and the treatment of statutory bodies, found no infirmity in the ITAT's reinstatement of the Haryana Rural Development Fund Board's registration and dismissed the Revenue's appeal.

Adventure in the nature of trade - business income versus capital gains - intention at the time of purchase - burden of proof on the Revenue to establish adventure in the nature of trade - mixed question of fact and law

Adventure in the nature of trade - business income versus capital gains - intention at the time of purchase - burden of proof on the Revenue to establish adventure in the nature of trade - Whether profits from sale of landed property should be taxed as business income (adventure in the nature of trade) or as capital gains - HELD THAT: - The Court applied the well established principle that characterization of a transaction as an adventure in the nature of trade is a mixed question of fact and law and must be determined on the totality of relevant facts and circumstances. Reliance on G. Venkataswami Naidu & Co. was held appropriate for delineating the factors to be considered, including the purchaser's intention at the time of purchase, frequency and scale of transactions, whether purchases were allied to the assessee's ordinary business, subsequent acts (such as plotting, development or other steps to make the property readily resaleable), use of borrowed funds, and conduct both before and after acquisition. The Court reiterated that where property is acquired and held as an investment and sold when market conditions are favourable, the result is capital accretion unless the Revenue adduces positive material proving an intention to trade. Applying these principles to the record, the Tribunal and CIT(A) findings that the assessee was primarily engaged in medical business, that property dealings were infrequent, of limited scale, funded from family resources (no external borrowings), not accompanied by acts of development or conversion to stock in trade, and that the assessee did not treat the properties as stock in trade, were accepted as sufficient factual basis to treat the receipts as capital gains. The Court observed that the burden to prove that the transactions amounted to an adventure in the nature of trade rested on the Revenue and that the Assessing Officer had not produced requisite material to discharge that burden. [Paras 21, 22, 23]

The Tribunal's conclusion that the gains were capital gains and not business income was upheld; the Revenue failed to prove an adventure in the nature of trade.

Final Conclusion: The appeals are dismissed. The ITAT's orders treating the profits from sale of lands as capital gains are sustained and the substantial questions of law are answered against the Revenue and in favour of the assessee.

Extension of stay beyond 365 days - third proviso to Section 254(2A) - limitation on extension of stay - assessee's responsibility for delay in disposal of appeal - binding precedent of Pepsi Foods (confirmation by Supreme Court)

Extension of stay beyond 365 days - third proviso to Section 254(2A) - limitation on extension of stay - assessee's responsibility for delay in disposal of appeal - binding precedent of Pepsi Foods (confirmation by Supreme Court) - Whether the Tribunal was correct in law in extending stay of demand beyond 365 days under the third proviso to Section 254(2A) of the Income Tax Act, 1961 - HELD THAT: - The Court recorded that in several of the appeals before the Tribunal the interim orders extending stay beyond 365 days had been passed, but for some of the present appeals the underlying Tribunal matters had been adjudicated rendering the present appeals infructuous. More broadly, the Court held that the question raised is no longer res integra in view of the Delhi High Court's decision in Pepsi Foods (P) Ltd. striking down the impugned portion of the third proviso to Section 254(2A) as amended by Finance Act, 2008, which had sought to forbid extension of stay where delay was not attributable to the assessee. That decision was subsequently confirmed by the Supreme Court in Deputy Commissioner of Income Tax v. Pepsi Foods Ltd., and therefore the Tribunal's grant of extension of stay beyond 365 days cannot be faulted. Relying on this authoritative pronouncement, the Court declined to entertain the revenue's challenge to the Tribunal's orders and noted earlier similar treatment by this Court in Principal Commissioner of Income-tax-2 v. Fulford (India) Ltd. [Paras 2, 3, 6]

The Tribunal's extension of stay beyond 365 days was sustained in view of the precedent in Pepsi Foods and its Supreme Court confirmation; the appeals are dismissed.

Final Conclusion: Appeals dismissed; the Tribunal's orders extending stay beyond 365 days are upheld in light of the Delhi High Court decision in Pepsi Foods and its confirmation by the Supreme Court; no costs.

Validity of notice under Section 148 - limitations under Section 149 - first proviso - faceless assessment scheme and jurisdiction under Section 151A - prospective application of Finance Act, 2021 amendments

Limitations under Section 149 - first proviso - prospective application of Finance Act, 2021 amendments - validity of notice under Section 148 - Notice under Section 148 dated 29 July, 2022 is barred by limitation for Assessment Year 2015-16. - HELD THAT: - The Court applied the first proviso to Section 149 and the settled construction that where, on the date a notice is sought to be issued, issuance would have been beyond the erstwhile six-year period, the notice cannot be validly issued under the amended regime. For Assessment Year 2015-16, the sixth year expired on 31 March, 2022; the impugned notice dated 29 July, 2022 therefore fell beyond the limitation period applicable under the first proviso. The Division Bench authority in Hexaware and the reasoning in New India Assurance (as noted in the judgment) were held to cover the present facts and lead to the conclusion that the notice is time-barred despite the amendments brought by the Finance Act, 2021. [Paras 6, 7, 8]

The notice under Section 148 dated 29 July, 2022 is quashed as barred by limitation under Section 149 read with the first proviso.

Faceless assessment scheme and jurisdiction under Section 151A - validity of notice under Section 148 - Notice under Section 148 issued by the Jurisdictional Assessing Officer (JAO) was contrary to the Scheme framed under Section 151A and therefore without jurisdiction. - HELD THAT: - The Court followed the Division Bench reasoning that Section 151A contemplates a CBDT scheme covering issuance of notice under Section 148 and related proceedings, and that the Scheme provides for issuance of such notices in a faceless manner through automated allocation to a Faceless Assessing Officer (FAO). Where the Scheme assigns the power to issue notices under Section 148 to the FAO, the JAO cannot concurrently exercise that jurisdiction. The impugned notice having been issued by the JAO was held to be inconsistent with the Scheme under Section 151A and therefore invalid for want of jurisdiction. [Paras 9, 10, 11, 12]

The notice under Section 148 dated 29 July, 2022 is quashed as having been issued by the JAO contrary to the Scheme under Section 151A (faceless assessment) and therefore without jurisdiction.

Final Conclusion: Writ petition allowed; the impugned notice dated 29 July, 2022 under Section 148 is quashed and set aside as both time barred under Section 149 (first proviso) for AY 2015 16 and invalid for being issued by the JAO contrary to the Scheme under Section 151A. Rule made absolute; no costs.

Reopening of assessment - procedure under Section 148A - revenue audit objections as ground for reopening - reasonable opportunity of hearing - supply of relevant documents on request

Revenue audit objections as ground for reopening - reopening of assessment - Revenue audit objections constitute a valid statutory ground to reopen a completed assessment. - HELD THAT: - The Court recognised that the amended Explanation 1 to Section 148 (with effect from 01.04.2022) permits reliance on revenue audit objections as a reason to reopen an assessment. The judgment records that there is no dispute with the settled law that sets out what information may be relied upon for reopening and expressly notes that revenue audit objections fall within those permissible grounds. The Court did not decide the merits of the audit objections or the correctness of reopening on those facts, but accepted their sufficiency as a statutory basis for initiating reassessment proceedings. [Paras 15]

Revenue audit objections can be considered a valid ground for reopening the assessment.

Procedure under Section 148A - reasonable opportunity of hearing - supply of relevant documents on request - Failure to furnish requested audit objections/documents and to grant personal hearing prior to passing order under Section 148A(d) vitiated the proceedings and required setting aside of the order and remand for fresh consideration after compliance. - HELD THAT: - The Court emphasised adherence to procedural fairness under the statutory regime and the departmental circulars concerning opportunity of hearing and supply of materials. The petitioner had specifically requested copies of the audit objections and the entire assessment/reassessment record and sought personal hearing; those requests were not complied with before the Assessing Officer passed the order under Section 148A(d) and issued notice under Section 148. The Court found the Assessing Officer acted in undue haste by rejecting the petitioner's reply without providing the requested documents or personal hearing. For these procedural defects, the Court set aside the orders dated 24.02.2024 and directed that the department supply the requested documents upon payment of requisite fees, allow the petitioner time to reply, grant a personal hearing, and thereafter pass a fresh order under Section 148A(d) within the specified timeframe. [Paras 14, 16, 17]

Impugned orders under Section 148A(d) and Section 148 dated 24.02.2024 are set aside; matter remitted for compliance with document supply and personal hearing and fresh decision.

Final Conclusion: Writ petition allowed in part: while revenue audit objections are a permissible ground to reopen assessment, the orders under Section 148A(d) and Section 148 dated 24.02.2024 were set aside for failure to furnish requested documents and to give personal hearing; respondents directed to provide records, permit a reply and personal hearing, and pass a fresh order within the timelines specified by the Court.

Repatriation of royalty and dividend - search assessment proceedings - interim repatriation subject to tax deduction - security by way of fixed deposit receipt and lien - completion of assessment expeditiously

Interim repatriation subject to tax deduction - contractual obligation to repatriate royalty - Permission to repatriate amounts payable as royalty subject to deduction of tax in the interim. - HELD THAT: - The Court modified the earlier restraint in Clause 7(iv) by permitting the petitioner to repatriate monies payable towards royalty, less TDS, in the interim. The Court recorded that the search assessment has remained pending for over two years, substantial deposits have already been furnished by the petitioner, and no crystallised demand has been framed; therefore, continuing the blanket bar would compel the assessee to default on contractual obligations. The petitioner is directed to furnish full and complete details of the proposed royalty repatriation to the respondents. The permission is granted as an interim measure and is subject to future review when the matter is listed again. [Paras 6, 7]

Petitioner permitted to repatriate Rs. 97 crores representing royalty less TDS in the interim, subject to providing full details to the respondents; permission is temporary and subject to review.

Declaration and pay-out of dividend deferred - Treatment of declaration and pay-out of dividend during pendency of search assessment. - HELD THAT: - The Court expressly deferred consideration of the issue relating to declaration of dividend and its pay-out at this stage, leaving the matter open for future consideration when the case is next placed before the Court. [Paras 9]

Decision on declaration and pay-out of dividend deferred.

Completion of assessment expeditiously - review of progress - Direction to the respondents to conclude the search assessment with expedition and timeline for review. - HELD THAT: - Noting the respondents' explanation for delay and the complexity of the matters under scrutiny, the Court urged the respondents to make all endeavours to complete the search assessment expeditiously and preferably by 31 December 2024. The petitioner was directed to render full cooperation. The Court fixed a date to review progress of the proceedings to ensure oversight of the timelines given. [Paras 8, 10]

Respondents directed to endeavour to conclude the search assessment preferably by 31 December 2024; matter to be called for review on 14 February 2025.

Final Conclusion: Clause 7(iv) of the earlier order is modified to permit interim repatriation of specified royalty moneys less TDS (subject to provision of details), the question of dividend repatriation is deferred, and the respondents are directed to conclude the search assessment expeditiously, preferably by 31 December 2024, with a review listed on 14 February 2025.

Deductibility of cess payments - Swachh Bharat Cess - write off of sundry balances - application of section 43B(a) regarding deductions only upon actual payment - remand to the Assessing Officer for fresh consideration

Swachh Bharat Cess - write off of sundry balances - application of section 43B(a) regarding deductions only upon actual payment - remand to the Assessing Officer for fresh consideration - Whether the disallowance recorded by the ITAT in respect of amounts shown as 'write off of sundry balances' labelled as Swachh Bharat Cess should be sustained or remitted for fresh consideration by the Assessing Officer. - HELD THAT: - The ITAT upheld a disallowance on the basis that the assessee failed to demonstrate payment in the year in question under section 43B(a), treating the amounts as written off sundry balances. The High Court observed that the ITAT, for the first time, proceeded to advert to section 43B(a) and reached a final disallowance without directing consideration by the Assessing Officer on whether the impugned amounts were in fact paid and deductible. In view of this procedural and adjudicatory lacuna, the Court found it appropriate to set aside the ITAT's finding on this aspect and remit the matter to the Assessing Officer so that the claim of the assessee regarding payment of the Swachh Bharat Cess and consequent deductibility can be examined afresh. All other rights and contentions of the parties have been kept open. [Paras 4, 5]

ITAT's disallowance set aside insofar as it relates to the Swachh Bharat Cess; matter remitted to the Assessing Officer for fresh consideration of whether the amounts were paid and deductible.

Final Conclusion: Appeal allowed in part; ITAT's finding on disallowance is set aside and the issue is remitted to the Assessing Officer for fresh consideration of the assessee's claim regarding payment and deductibility of the Swachh Bharat Cess; parties' rights and contentions remain open.

Bogus purchases - accommodation entries - addition limited to percentage of disputed purchases - estimation of income component of tainted transactions - precedent value of coordinate bench decision - no substantial question of law where issue already answered

Bogus purchases - addition limited to percentage of disputed purchases - estimation of income component of tainted transactions - The Tribunal's reduction of the disallowance in respect of disputed/bogus purchases to 6% of the amount of such purchases is justified and is not interfered with. - HELD THAT: - The Tribunal examined the material on record including the assessee's gross profit and net profit figures and the evidence filed by the assessee. Applying the principle that tax authorities ought to tax the income component of a disputed transaction to prevent revenue leakage, and having regard to the low gross profit reported by the assessee, the Tribunal concluded that a 6% disallowance on the disputed purchases was sufficient. The High Court found that the Tribunal's conclusion was based on the material before it, followed coordinate-bench reasoning, and reduced the disallowance from the assessment order's 100% (and earlier appellate figures) to 6% after analysis of facts and figures; no interference was warranted. [Paras 6]

Tribunal's restriction of disallowance to 6% of the disputed purchases is upheld.

Precedent value of coordinate bench decision - no substantial question of law where issue already answered - The appeal is liable to be dismissed as the substantial questions of law raised by the Revenue were already answered by coordinate-bench decisions addressing identical or substantially similar facts. - HELD THAT: - The High Court observed that the Tribunal relied upon and followed the view taken by a coordinate Bench in earlier decisions dealing with accommodation-entry allegations and disallowance percentages in cases involving the same group. The Court recorded that identical questions had been considered and answered in those prior decisions and that no new substantial question of law arose on the facts of the present case. Accordingly, the appeal was held to be meritless and summarily dismissed. [Paras 5, 7]

Appeal dismissed as the substantial questions of law are already answered by earlier coordinate-bench decisions.

Final Conclusion: The High Court dismissed the Revenue's Tax Appeal, upholding the Tribunal's reduction of the disallowance to 6% of the disputed/bogus purchases for Assessment Year 2008-2009 and holding that no substantial question of law arises as the matter is covered by prior coordinate-bench decisions.

Initiation of reassessment proceedings under Section 148 - recorded reasons / reasons to believe - material nexus between information and formation of belief - judicial review for jurisdictional error - arbitrariness and irrationality - test of reasonableness in review of reasons to believe

Initiation of reassessment proceedings under Section 148 - recorded reasons / reasons to believe - material nexus between information and formation of belief - Validity of initiation of proceedings under Section 148 based on the Assessing Officer's recorded reasons. - HELD THAT: - The petition challenging initiation of reassessment proceedings was considered on the basis of the Assessing Officer's order under Section 148A(d), which recorded that GSTR-1 entries connected the petitioner with alleged bogus purchases and that the petitioner had not given plausible explanations supported by documentary evidence. The Court applied settled principles that the test at the initiation stage is whether there are "reasons to believe" - a cause or justification based on material having a rational nexus with the belief that income has escaped assessment - and that judicial review is confined to examining whether the recorded reasons are arbitrary or irrational. The Court found that the Assessing Officer had considered cogent material (including the GSTR-1 reporting of purchases from the petitioner and discrepancies in the petitioner's balance-sheet notes and supporting documents) which were germane to forming a belief of escapement of income. The petitioner's contentions that entries were made unilaterally and that no ITC was availed, or that entries could be reversed, amounted to factual disputes which did not raise a substantial jurisdictional question to invalidate the initiation. Applying the reasonableness standard articulated in the cited precedents, the Court concluded that the recorded reasons disclosed a rational basis for issuance of notice under Section 148 and were not vitiated by arbitrariness or irrationality. [Paras 4, 5, 7]

Writ petition dismissed; initiation of reassessment proceedings under Section 148 upheld as supported by recorded reasons.

Final Conclusion: The High Court dismissed the petition, holding that the Assessing Officer's recorded reasons furnished a rational and non-arbitrary basis to issue notice under Section 148 for AY 2019-20 and that the challenge amounted to factual disputes not amounting to a jurisdictional error.

Non-interference with private contracts - contractual autonomy of commercial parties - quashing of administrative communications - scope and validity of executive public notices

Non-interference with private contracts - contractual autonomy of commercial parties - scope and validity of executive public notices - Impugned Public Notices No.14 of 2020 dated 28th January 2020 and No.11 of 2020 dated 17th January 2020 do not override or interfere with private contracts between shipping lines and exporters/importers. - HELD THAT: - The Court accepted the averment in the affidavit in reply (paragraph No.24) that the public notices do not interfere with private contracts and recorded the petitioners' agreement to read the impugned notices as subject to existing contracts between shipping lines and importers/exporters. The Court emphasised that shipping lines remain free to enter into commercial contracts on terms they deem fit and that the public notices shall not be construed as abrogating or impinging upon contractual rights. [Paras 8]

Public notices held not to interfere with or override private contracts; contractual autonomy preserved.

Quashing of administrative communications - scope and validity of executive public notices - Communications of the Special Secretary Logistics dated 15th February 2020, 27th February 2020 and 28th February 2020 declaring the impugned public notices to be mandatory and not concerned with contracts are contrary to the stand in the affidavit and are set aside. - HELD THAT: - The Court found the post-notice communications asserting the mandatory, contract-independent character of the public notices to be inconsistent with the position taken by the notice-issuing authority in its affidavit that the notices do not interfere with private contracts. On that basis the Court declared those communications to be contrary and liable to be set aside, and accordingly set them aside. [Paras 8]

Communications dated 15th, 27th and 28th February 2020 are set aside as contrary to the position that the public notices do not affect private contracts.

Final Conclusion: Writ petitions disposed with clarification that the impugned public notices do not impinge upon private contracts between shipping lines and importers/exporters; specified post-notice communications asserting mandatory effect and non-application to contracts are quashed, while the petitioners' right to challenge the authority to issue such public notices in other proceedings is kept open.

Mis-classification - interpretation of Tariff entries - HSN Explanatory Notes - extended period of limitation under section 28(4) of the Customs Act - willful suppression of facts - confiscation under section 111(m) - penalty under section 114A / section 112

Mis-classification - extended period of limitation under section 28(4) of the Customs Act - willful suppression of facts - HSN Explanatory Notes - Applicability of extended limitation under section 28(4) in respect of the alleged mis-classification of imported jackets - HELD THAT: - The Tribunal held that the case concerned interpretation of Tariff entries and amounted to mis-classification of the goods rather than any willful suppression of facts. The goods were declared, physically examined and, on departmental intimation of re-classification based on HSN Explanatory Notes, the appellant accepted the revised classification and paid the differential duty. There was nothing on record to show deliberate non-disclosure of the presence of zipper or intention to evade duty; selected consignments had been physically examined earlier and the nature of the jackets would have been ascertainable. In these circumstances the condition necessary to invoke the extended period under section 28(4) was not made out and that provision could not be applied. [Paras 10, 11, 13, 14]

Extended period under section 28(4) is not invocable as the matter is a simple mis-classification without willful suppression.

Confiscation under section 111(m) - penalty under section 114A / section 112 - mis-classification - Liability of the imported goods to confiscation and imposition of penalty arising from the mis-classification - HELD THAT: - Relying on the finding that there was no willful suppression and that the appellant accepted the correct classification and discharged differential liabilities promptly, the Tribunal endorsed the reasoning that confiscation under section 111(m) was not permissible for past clearances which were not available for seizure. Consequentially, penalties under section 114A (if section 28(4) had been invoked) or under section 112 could not be imposed in a simple mis-classification case. [Paras 13, 14]

The goods are not liable to confiscation under section 111(m) and no penalty under section 114A or section 112 can be imposed for the mis-classification found.

Interpretation of Tariff entries - HSN Explanatory Notes - mis-classification - Sustainability of the Commissioner (Appeals) order dated 21.06.2021 upholding the demand and penalties - HELD THAT: - Having regard to the Commissioner's subsequent detailed order which held that the matter was one of mis-classification and that extended period, confiscation and penalties were not invocable, the Tribunal found the Commissioner (Appeals) order unsustainable. The appellant had accepted re-classification and discharged differential duties; the factual and legal conclusions in the later order apply to the present case, leading the Tribunal to set aside the impugned appellate order. [Paras 15]

The Commissioner (Appeals) order dated 21.06.2021 is set aside and the appeal is allowed.

Final Conclusion: The appeal is allowed: the demand and punitive consequences sustained by the Commissioner (Appeals) are set aside on the finding that the matter was a case of mis-classification without willful suppression, hence the extended limitation, confiscation and penalties are not invocable; the appellant had accepted re-classification and paid the differential duty.

Prohibition on sale or transfer of customs broker licence - duty of customs broker to advise client - limits of customs broker's responsibility for transaction value and assessable value - obligation to verify client identity and credentials by reliable independent documents - requirement of fair and proper enquiry before adverse regulatory action - proportionality of disciplinary action (revocation, forfeiture and penalty)

Prohibition on sale or transfer of customs broker licence - requirement of fair and proper enquiry before adverse regulatory action - Allegation that the appellant sublet its customs broker licence to another broker (Regulation 1(4)) - HELD THAT: - The Tribunal found that the Commissioner's conclusion of subletting was based solely on statements attributed to persons associated with the other broker and on presumption, while no statement of the appellant was recorded and no summons was issued during investigation. The appellant's account that it received clients from the other broker and that the G Card holder was its own employee was not countered by independent evidence. In these circumstances the finding of subletting lacks basis and proper enquiry, and cannot be sustained. [Paras 6, 13]

No violation of Regulation 1(4); finding of licence subletting set aside for want of adequate enquiry and evidence.

Duty of customs broker to advise client - limits of customs broker's responsibility for transaction value and assessable value - Whether the appellant failed to advise the exporter in breach of Regulation 10(d) - HELD THAT: - The Tribunal held that Regulation 10(d) cannot be invoked to impute responsibility on a customs broker for the exporter's choice of transaction value. Determination of transaction value is a commercial negotiation between buyer and seller and assessable value is determined by the exporter or by the proper officer. Absent specific evidence that the broker failed to advise or actively induced mis valuation, no presumption of breach of Regulation 10(d) is warranted. [Paras 7]

Regulation 10(d) not violated; no basis to infer failure to advise on the facts of this case.

Obligation to ascertain correctness of information imparted by broker - limits of liability where no evidence of incorrect information provided by broker - Whether the appellant violated Regulation 10(e) by failing to ascertain correctness of information leading to overvaluation - HELD THAT: - The revenue's case was that the exporter overvalued exports to claim excess drawback, but there is no charge or evidence that the customs broker supplied the value or any incorrect information to the exporter. Regulation 10(e) requires verification of information imparted by the broker; it does not render the broker liable for the exporter's unilateral overvaluation absent proof that the broker provided or certified the incorrect information. [Paras 8]

Regulation 10(e) not violated; no evidence that the broker imparted incorrect information causing overvaluation.

Obligation to verify client identity and credentials by reliable independent documents - scope of verification - documentary verification acceptable - Whether the appellant breached Regulation 10(n) by failing to verify the exporter and its functioning at declared address - HELD THAT: - Regulation 10(n) requires verification by using reliable, independent, authentic documents, data or information; it does not mandate physical on site verification. Where IEC and GSTIN issued by competent authorities indicate an address and status, a broker acting on those authentic documents cannot be faulted if those governmental records were themselves benami or incorrect. The proper responsibility for issuance of false IEC/GSTIN lies with the issuing authorities, not with a broker who relies on those documents. [Paras 9, 11]

Regulation 10(n) not violated; documentary verification pursuant to authentic government records suffices and no failure established.

Requirement of fair and proper enquiry before adverse regulatory action - proportionality of disciplinary action (revocation, forfeiture and penalty) - Whether revocation of licence, forfeiture of security deposit and penalty were sustainable and proportionate - HELD THAT: - The Tribunal observed internal inconsistency in the Commissioner's findings: the Commissioner simultaneously presumed that the other broker acted using the appellant's licence (subletting) and that the appellant itself acted as broker and breached duties under Regulations 10(d), (e) and (n). Further, the investigative process did not record the appellant's statement nor issue summons to ascertain who filed the shipping bill or what advice/verification the appellant undertook. Given absence of adequate enquiry and evidence on which serious disciplinary measures were based, the punitive actions could not be sustained. [Paras 12, 13, 14]

Revocation, forfeiture and penalty set aside as unsustainable for want of proper enquiry and evidence; appeal allowed.

Final Conclusion: The appeal is allowed. The Tribunal set aside the impugned order of revocation of licence, forfeiture of security deposit and imposition of penalty for lack of substantiated findings and defective enquiry; consequential relief granted to the appellant.

Doctrine of Forum Conveniens - Territorial Jurisdiction - Discretionary Jurisdiction of High Court in Writ Jurisdiction - Seat of Registered Office and Jurisdiction - Execution of Agreements and Seat of Cause of Action - Investigation under Section 213(b) of the Companies Act, 2013

Doctrine of Forum Conveniens - Territorial Jurisdiction - Seat of Registered Office and Jurisdiction - Execution of Agreements and Seat of Cause of Action - Whether the Delhi High Court had territorial jurisdiction to entertain the writ seeking directions to the Ministry of Corporate Affairs to investigate M/s Vikram Structures Pvt. Ltd. pursuant to the NCLT, Bengaluru order dated 07th December, 2023. - HELD THAT: - The Court held that the entire cause of action in respect of the alleged cheating, misappropriation, defrauding of investors and siphoning of funds by VSPL and its directors arose in the State of Karnataka. The subject land is situated in Bengaluru and all material agreements (including the Joint Development Agreement, Supplementary Agreement and Lease Deed) were executed and stamped in Karnataka. Ongoing litigation concerning the subject property is pending before courts in Karnataka, and the appellant failed to place any material to establish that VSPL's principal place of business or seat was in Delhi. The Court noted that the appellant's recourse to the Ministry of Corporate Affairs is founded on the NCLT, Bengaluru order and that VSPL's registered office being in Karnataka points to the Karnataka High Court as the appropriate forum. Applying the doctrine of forum conveniens and exercising its discretionary jurisdiction in writ matters, the Single Judge correctly declined to assume territorial jurisdiction and directed the appellant to approach the Karnataka High Court. [Paras 5, 6, 7, 8, 9]

The Delhi High Court declined to exercise territorial jurisdiction and directed the appellant to approach the Karnataka High Court.

Final Conclusion: The appeal is dismissed; the Delhi High Court affirmed the refusal to exercise jurisdiction under the doctrine of forum conveniens and directed the appellant to seek appropriate relief before the Karnataka High Court.

Dissolution of company - Winding up cannot proceed for want of funds or assets - Section 481 of the Companies Act, 1956 - Application of Meghal Homes precedent - Discharge of Official Liquidator

Dissolution of company - Winding up cannot proceed for want of funds or assets - Section 481 of the Companies Act, 1956 - Application of Meghal Homes precedent - The company in liquidation, M/s. ARC Cement Ltd., is liable to be dissolved under Section 481(1) of the Companies Act, 1956 as the Official Liquidator cannot proceed further with the winding up. - HELD THAT: - The Court found that the Official Liquidator had taken possession of available factory assets, realised and disbursed proceeds to creditors and workers, and as of 29.04.2024 only a small balance remained while estimated liquidation expenses exceeded available funds. No assets remain from which further sums can be realised and no fruitful purpose would be served by keeping the winding up pending. Applying the principle in Meghal Homes (that where the affairs have been completely wound up or the liquidator cannot proceed for want of funds the Court may order dissolution), and having regard to the import of Section 481(1), it was just and reasonable to dissolve the company and bring the winding up to an end. [Paras 9, 10, 11, 12, 13]

M/s. ARC Cement Ltd. stands dissolved under Section 481(1) of the Companies Act, 1956.

Discharge of Official Liquidator - Transfer of residual funds to Common Pool Fund - Closure of books of account and communication to Registrar - The Official Liquidator is discharged as liquidator of the company and authorised to transfer any available balance to the Common Pool Fund, close the company's books and communicate the dissolution to the Registrar of Companies. - HELD THAT: - Consequent to the dissolution, the Court discharged the Official Liquidator from his office as liquidator. The Official Liquidator was permitted to transfer any remaining balance to the Common Pool Fund and thereafter to close the books of account of the company. The Official Liquidator was directed to communicate a copy of the judgment to the Registrar of Companies within 30 days. The company petition and any pending applications were disposed of and further hearings cancelled. [Paras 13, 14, 15, 16, 17]

The Official Liquidator is discharged; permitted to transfer any residual funds to the Common Pool Fund, close the books of account, and to communicate the order to the Registrar of Companies; the petition and pending applications are disposed of.

Final Conclusion: The High Court allowed the Official Liquidator's application and ordered dissolution of M/s. ARC Cement Ltd. under Section 481(1) of the Companies Act, 1956, discharging the Official Liquidator and permitting transfer of any remaining balance to the Common Pool Fund, with directions to close the company's accounts and notify the Registrar of Companies.

Valuation-based compensation in company liquidation - release of property upon payment to Official Liquidator - role of Company Court as custodian of company and creditors' interests - reconstitution and mandate of Disbursement Committee for creditor claims - disbursement of small depositors' claims (principal only) - treatment of claimed prior payments/credits in liquidation settlements

Valuation-based compensation in company liquidation - role of Company Court as custodian of company and creditors' interests - Determination of amount payable to the Official Liquidator for the company's share in three specified lands (Tala, R.S.E.B., Gulab Bagh) and the method of compensating the company for its contributed interest in the lands. - HELD THAT: - The Court noted that the lands had been locked in litigation for decades and that contribution by the ex-promoter/company (approx. Rs. 3.32 crores of an agreed Rs. 8.90 crores) entitled the company to a proportionate share. Having considered valuation material placed by the ex management and the Official Liquidator, and applying a valuation-based approach to quantify the company's entitlement in the respective percentage shares, the Court exercised its duty as custodian of company and creditors' interests to fix a compensatory sum. The Court weighed the parties' contentions on valuations and the OL's opportunity to conduct independent valuation, but having granted a final opportunity and received ITCOT figures, the Court adopted an adjusted, pragmatic figure to resolve long standing stalemate and to allow utilisation of the properties. [Paras 15, 16]

A sum of Rs. 25 crores is directed to be paid to the Official Liquidator by the applicant-companies in four equal instalments within four months as compensation for the company's share in the three lands.

Release of property upon payment to Official Liquidator - Consequences of payment: release of the specified lands to applicant-companies and custodial allocation of the paid sum. - HELD THAT: - The Court ordered that upon payment of the entire Rs. 25 crores the lands (R.S.E.B., Gulab Bagh and Tala) shall stand released in favour of the respective applicant-companies. The amount so paid is to be credited to CRB Corporation and CRB Capital Markets in the ratio of their contributions and maintained by the Official Liquidator, thereby providing a clear mechanism for vesting and post-payment disposition. [Paras 17, 18]

Upon payment of Rs. 25 crores as directed, the three specified lands shall be released in favour of the applicant-companies and the amount shall be credited and maintained by the Official Liquidator in the ratio of contributions.

Treatment of claimed prior payments/credits in liquidation settlements - Whether the Applicants are entitled to adjustment/credit of Rs. 47 lakhs claimed earlier against the amount directed to be paid to the Official Liquidator. - HELD THAT: - The Court examined the prior record that included a contention for credit of certain payments (Rs. 47 lakhs) and observed that the sum claimed was not an admitted amount. Having regard to the valuations and the final sum fixed, and the absence of an admitted credit, the Court declined to direct adjustment of that claimed amount against the Rs. 25 crores ordered to be paid. [Paras 19, 20]

No adjustment or credit of the claimed Rs. 47 lakhs is directed against the Rs. 25 crores payable to the Official Liquidator.

Official liquidator's statutory powers and remedies in respect of encroached/acquired lands - Direction regarding the remaining two projects (Nawab Kallan and Beed Papad) which face encroachment or acquisition issues. - HELD THAT: - The Court recorded that those two project lands involve encroachments and potential acquisition by third parties (Waqf Board, Forest Department). It declined to adjudicate title issues in the present exercise of compensating for company's share, and left the Official Liquidator free to take appropriate steps in accordance with law to protect or pursue the company's rights in respect of those lands. [Paras 10, 21]

The Official Liquidator is at liberty to take steps in accordance with law in respect of Nawab Kallan and Beed Papad projects.

Reconstitution and mandate of Disbursement Committee for creditor claims - disbursement of small depositors' claims (principal only) - Continuation of disbursements to depositors and reconstitution of the Disbursement Committee, including the scope and procedure for disbursements of pending claims. - HELD THAT: - The Court reviewed the status report showing substantial numbers of claims already paid and many rejected or pending due to lack of particulars. Noting available funds in the Disbursement Account and the Supreme Court's direction that earlier interim directions remain operative subject to the Company Judge's orders, the Court directed that the Disbursement Committee continue disbursement of the remaining 1,719 claims. It reconstituted the Committee, fixed its mandate and fees, prescribed publicity and procedural safeguards (publication of notices, RTGS payments, maintenance of accounts), and confined immediate payments to full principal for claims up to Rs. 50,000 while requiring a chart and further directions for larger claims. [Paras 35, 41, 42, 46, 47]

The Disbursement Committee is reconstituted and directed to recommence and complete disbursements (full principal without interest for claims up to Rs. 50,000; larger claims to be presented in a chart and await further directions), with periodic reporting and specified administrative procedures.

Judicial supervision in long-drawn liquidation proceedings - Disposition of pending company petition applications and administrative directions incidental to effective administration of the liquidation and disbursement process. - HELD THAT: - The Court took OLR 11/2024 on record, disposed of the applications in Co. Pet. 280/1997 in the terms recorded, listed matters for further hearing as directed, and issued ancillary directions (e.g., Registrar to report on handling of earlier deposited sums). These measures reflect the Court's supervisory function to effect finality and to operationalise payments and releases after long-pending proceedings. [Paras 17, 22, 23]

Applications in Co. Pet. 280/1997 disposed of in terms recorded; OLR 11/2024 taken on record; further listing and administrative directions issued.

Final Conclusion: The Court resolved the long-standing dispute over three Rajasthan properties by quantifying a valuation based compensation of Rs. 25 crores payable to the Official Liquidator in four instalments, ordered release of those lands upon payment, refused adjustment of an unadmitted prior claim of Rs. 47 lakhs, left the OL to pursue remedies in respect of two encumbered properties, and reconstituted and directed the Disbursement Committee to continue distribution of pending depositor claims with specified procedural safeguards.

Assignment of debt and effect of cut-off date - estoppel and due diligence in assignment transactions - limitation for contractual claims - maintainability of arbitration during corporate insolvency proceedings under the Insolvency and Bankruptcy Code - scope of challenge under Section 34 of the Arbitration and Conciliation Act, 1996 - public policy of India and patent illegality - pre-award interest and application of contractual interest clause

Assignment of debt and effect of cut-off date - scope of challenge under Section 34 of the Arbitration and Conciliation Act, 1996 - Entitlement to the ECGC monies credited to the borrower's account after the cut-off date pursuant to the Assignment Agreement. - HELD THAT: - The arbitrator examined the Assignment Agreement and communications with ECGC and concluded that, as a matter of contract, the ECGC monies credited by the bank to the borrower's account on 30.09.2014 (after the cut off date) belong to the claimant who paid consideration for the ADIL loan account. Although the tribunal noted the commercial incongruity that the claimant paid a small consideration and would thereby recover a sum almost equal to that consideration, the arbitrator was bound to give effect to the contractual allocation of rights. The High Court, applying the limited scope of interference under Section 34, held that the arbitrator acted in accordance with the contract and applicable law and there was no ground to set aside the award on this issue. [Paras 24, 28, 29]

Award upheld: the claimant is entitled to recover the ECGC monies credited after the cut-off date in accordance with the Assignment Agreement.

Estoppel and due diligence in assignment transactions - limitation for contractual claims - Whether the respondent was estopped from claiming the ECGC monies on account of alleged negligence/due diligence failures and whether the claim was time barred. - HELD THAT: - The arbitrator found that for negligence to found an estoppel there must be a duty owed and proximate causation; save for a contractual due diligence provision, no other duty was pleaded or shown. The respondent had not handed over certain documents, and the tribunal concluded that the respondent had contributed to the default it alleged against the claimant; thus estoppel could not be made out. On limitation, the tribunal held that the cause of action accrued when the claimant learned of the credit during the CoC meeting and the bank denied payment, and counted from that date the claim was within time. The High Court, exercising the narrow review permitted under Section 34, found no patent illegality or conflict with public policy in these findings and declined to interfere. [Paras 25, 29]

Estoppel rejected and claim held within time; arbitral findings sustained.

Maintainability of arbitration during corporate insolvency proceedings under the Insolvency and Bankruptcy Code - scope of challenge under Section 34 of the Arbitration and Conciliation Act, 1996 - Effect of parallel proceedings before the NCLT (IBC, Section 60(5)) on maintainability of the arbitration between the parties. - HELD THAT: - The arbitrator considered the submission that the IBC/NCLT had jurisdiction over the ECGC monies and concluded that no provision of the IBC gave the NCLT jurisdiction to adjudicate the inter se dispute between the bank and the claimant concerning the ECGC amount, and therefore there was no basis to keep the arbitration in abeyance. The tribunal further recorded that any third party not participating in arbitration would remain free to pursue its remedies and would not be bound by the award between the two parties. The High Court accepted the tribunal's reasoning as a permissible contractual and jurisdictional interpretation, observing that such matters do not invite reappreciation on merits under Section 34 and that no patent illegality was shown. [Paras 13, 26, 28]

Arbitration was maintainable despite parallel IBC proceedings; arbitral conclusion sustained.

Pre-award interest and application of contractual interest clause - scope of challenge under Section 34 of the Arbitration and Conciliation Act, 1996 - Whether the claimant was entitled to interest prior to the date of the award. - HELD THAT: - The Assignment Agreement's interest clause provided for simple interest on defaulted amounts where there was delay in making payments as contemplated by the contract. The arbitrator found that the claimant had agreed to receive economic benefits including realizations after the cut off date and there was no delay on the petitioner's part in passing on monies such that clause 2.2.6 would be attracted. The refusal to pay was held bona fide. The High Court, confined to a prima facie review under Section 34, found the arbitrator's interpretation of the contractual clauses and factual conclusion reasonable and not a ground for setting aside the award under the limited statutory tests, including patent illegality or conflict with public policy. [Paras 33, 36, 38, 39]

No pre-award interest granted; arbitral conclusion upheld.

Final Conclusion: The petitions under Section 34 are dismissed. The High Court found that the arbitrator's conclusions on entitlement to the ECGC monies, estoppel and limitation, maintainability of arbitration during parallel IBC proceedings, and denial of pre award interest were based on contractual interpretation and factual findings within the narrow scope of judicial review under Section 34, and that no patent illegality or conflict with Indian public policy was shown sufficient to set aside the award.

Extraordinary writ jurisdiction under Article 226 read with Article 227 - inspection, inquiry and investigation under Chapter XIV of the Companies Act, 2013 - power to call for, seize and preserve books and papers and to freeze assets in the course of inspection - action against diversion and siphoning of funds and related persons - interim directions in public interest to protect investors/home buyers - effect of moratorium/status quo under the Insolvency and Bankruptcy Code on ongoing inquiries

Exemption from filing certified copies - Permission to file uncertified and dim/untyped but legible annexures was granted temporarily with a direction to place certified copies on record at the earliest. - HELD THAT: - The Court allowed the petitioner exemption from filing certified copies of annexures for the present hearing, noting the annexures were legible. The petitioner was directed to place certified copies on the record preferably by the next date of hearing. The application for exemption was disposed accordingly. [Paras 2, 3]

Exemption granted from filing certified annexures for now; certified copies to be filed on or before the next date of hearing.

Inspection, inquiry and investigation under Chapter XIV of the Companies Act, 2013 - power to call for, seize and preserve books and papers and to freeze assets in the course of inspection - action against diversion and siphoning of funds and related persons - interim directions in public interest to protect investors/home buyers - effect of moratorium/status quo under the Insolvency and Bankruptcy Code on ongoing inquiries - Respondent Nos. 1 and 2 (Registrar of Companies and Union of India through MCA) were directed to undertake inspection and statutory action under Chapter XIV of the Companies Act, 2013, and to take immediate protective measures regarding Three C Shelters Private Limited and related entities. - HELD THAT: - Having considered the IRP's status reports and the material alleging diversion/siphoning of funds, the Court found prima facie compelling grounds to invoke Chapter XIV powers to protect the interests of the petitioner and similarly placed home buyers. The Court observed that Chapter XIV empowers the Registrar/inspector to inspect, call for books and records, seize documents where there is reason to believe documents may be destroyed or altered, and to seek freezing of assets through the Special Court. In light of alleged connections between the corporate debtor and various sister/shell companies, and the impact of the CIRP moratorium which has impeded certain actions, the Court directed Respondent Nos. 1 and 2 to act conjointly and stepwise to: (i) inspect affairs of Three C Shelters and related companies in terms of the IRP reports and file an inspection report within four weeks; (ii) initiate appropriate legal action calling upon specified persons to explain diversion of funds; (iii) call for and/or seize books of accounts of related companies for inspection and to arrest further dissipation of funds; (iv) trace recipient companies and, if warranted, take steps under provisions including those enabling freezing of assets; and (v) take all necessary measures to preserve assets of the company in liquidation and sister concerns to safeguard home buyers and creditors. The Court emphasised the public interest dimension and ordered service and compliance directions. [Paras 19, 20, 21, 22, 23]

Respondent Nos. 1 and 2 directed to initiate and complete inspection and statutory action under Chapter XIV (including calling for/seizing books and pursuing asset freezing measures) and to submit an inspection/status report within four weeks; notice to be issued and matter re listed.

Final Conclusion: The High Court granted interim relief in public interest: (i) temporary exemption for filing certified annexures subject to later compliance, and (ii) directed the Registrar of Companies and the Ministry of Corporate Affairs to conjointly initiate and complete inspection and statutory action under Chapter XIV of the Companies Act, 2013 (including calling for/seizing records and pursuing asset freezing measures and actions against identified persons), with directions for service and a timeline for reporting back to the Court.

Correction of judgment - clarification of judgment - rectification of error in judgment - construction of 'secured creditor' and 'unsecured creditor'

Correction of judgment - construction of 'secured creditor' and 'unsecured creditor' - Paragraph 20 of the judgment dated 12.09.2023 is to be read as referring to a 'secured creditor' instead of an 'unsecured creditor'. - HELD THAT: - The Supreme Court, on the application for clarification, accepted the appellant's submission that the word "unsecured creditor" as used in paragraph 20 of the earlier judgment was incorrect. The Court ordered a correction so that the phrase in paragraph 20 shall read "secured creditor". The correction is limited to this substitution and does not otherwise disturb or modify the remainder of the judgment dated 12.09.2023. The Court recorded that delay in filing the application was condoned and disposed of the miscellaneous application accordingly. [Paras 20]

Paragraph 20 of the judgment dated 12.09.2023 shall be read as referring to a "secured creditor" in place of "unsecured creditor"; correction confined to this substitution.

Final Conclusion: The application for clarification is allowed in part: the word "unsecured creditor" in paragraph 20 of the judgment dated 12.09.2023 is corrected to "secured creditor"; delay is condoned and the miscellaneous application is disposed of accordingly.

Priority to secured creditors over government dues - Overriding effect of a subsequent special enactment - Prospective operation of newly inserted seizure provision - Jurisdictional invalidity of seizure in presence of prior security interest - Availability of alternative remedy not a bar where impugned order is without jurisdiction

Priority to secured creditors over government dues - Overriding effect of a subsequent special enactment - Debt of secured creditor under SARFAESI/RDBI has priority over dues claimed under FEMA and the SARFAESI/RDBI provisions prevail. - HELD THAT: - The Court held that Section 26E of the SARFAESI Act and Section 31B of the RDBI Act (both containing notwithstanding clauses) give secured creditors priority over all other debts, including government dues. Where two special enactments conflict, the later enactment prevails; since the SARFAESI/RDBI provisions are subsequent and contain overriding language, they prevail over FEMA. Consequently, dues claimed under FEMA payable to the Central Government cannot override earlier security interests of the secured creditor and the seizure under FEMA insofar as it affects the mortgaged property is without authority. [Paras 11, 12, 16, 18]

The claim of the petitioner as secured creditor prevails and the SARFAESI/RDBI priority overrides the FEMA claim.

Prospective operation of newly inserted seizure provision - Jurisdictional invalidity of seizure in presence of prior security interest - Section 37A of FEMA (inserted w.e.f. 09.09.2015) is prospective and could not be invoked in respect of property mortgaged to the bank prior to its commencement. - HELD THAT: - The Court found that Section 37A, being substantive, cannot be construed as retrospective. The schedule property was mortgaged in favour of the petitioner on 20.02.2015, prior to insertion and commencement of Section 37A on 09.09.2015. As Section 37A is prospective, the enforcement authority lacked jurisdiction to seize or attach the property under that provision which had already stood mortgaged to the bank. [Paras 15]

Section 37A could not be invoked against the property mortgaged prior to its commencement; the seizure under that provision is without jurisdiction.

Jurisdictional invalidity of seizure in presence of prior security interest - The impugned seizure/attachment order insofar as it affects the mortgaged schedule property is illegal, arbitrary and without jurisdiction and is liable to be quashed. - HELD THAT: - Applying the overriding effect of SARFAESI/RDBI and the prospective nature of Section 37A of FEMA, the Court concluded that the enforcement order purporting to seize the schedule property (which had been mortgaged in favour of the petitioner prior to the order) was without jurisdiction and thus illegal and arbitrary. On these grounds the impugned order was set aside and the authority directed to release the property. [Paras 14, 18, 21]

Impugned order quashed insofar as it relates to the mortgaged schedule property; release directed.

Availability of alternative remedy not a bar where impugned order is without jurisdiction - Existence of an appeal under Section 37A(5) FEMA does not preclude this Court from exercising writ jurisdiction where the impugned order is without jurisdiction or contrary to overriding statutory provisions. - HELD THAT: - The respondents' contention that an alternative equally efficacious remedy (appeal under Section 37A(5)) renders the petition not maintainable was rejected. Because the Court found the impugned order to be without jurisdiction and contrary to the SARFAESI/RDBI provisions, availability of a statutory appeal did not oust the High Court's jurisdiction under Article 226 to quash the order. [Paras 7, 20]

Writ jurisdiction is available notwithstanding the existence of an appeal where the impugned order is without jurisdiction.

Final Conclusion: Writ petition allowed; impugned order dated 31.03.2022 quashed insofar as it relates to the property mortgaged to the bank on 20.02.2015, and the enforcement authority is directed to release the mortgaged property within four weeks.

Call option as a transaction in securities - call option as an actionable claim - securities as goods - support service of business or commerce - definition of service versus goods under the Finance Act - extended period of limitation for demand - penalty requires deliberate deception or intent to evade tax - noscitur a sociis in construing inclusive lists

Call option as a transaction in securities - call option as an actionable claim - securities as goods - definition of service versus goods under the Finance Act - Levy of service tax on amounts received as 'call option fee' by the appellant during the relevant period - HELD THAT: - The Tribunal held that a 'call option' is a derivative or a right in securities and, therefore, falls within the definition of 'securities' under the SCRA. Rights in securities and derivatives are included in the statutory definition of 'securities' and, by virtue of the Finance Act's definitions, securities are included within 'goods'. Consequently the grant of a call option is a transaction in goods and not a provision of service. Reading the two parts of the statutory definition of 'support services of business or commerce' together and applying the principle of noscitur a sociis, the Tribunal concluded that only activities akin to those specifically listed therein fall within that category; the grant of call options does not. The Tribunal relied on the reasoning in the Vodafone decision that the framework agreement created an incorporeal right (actionable claim) and that the consideration was for the option, not for any ancillary obligation to hold shares; thus the consideration could not be treated as consideration for a taxable service. For these reasons the Tribunal held the impugned demand under the Finance Act to be without jurisdiction. [Paras 32, 33, 34, 35, 36]

Call option fees are transactions in securities/goods and not taxable as 'support service of business or commerce'; service tax demand is without jurisdiction and set aside.

Extended period of limitation for demand - penalty requires deliberate deception or intent to evade tax - Validity of invocation of the extended period of limitation and imposition of penalty - HELD THAT: - The Tribunal found no discussion or evidence in the impugned order of any positive act by the appellant indicating an intent to evade tax or any of the circumstances in the proviso to section 73(1) that would justify invocation of the extended limitation period. The appellant had bonafidely treated the amounts as not taxable, the dispute being essentially one of statutory interpretation. Drawing on precedent that extended limitation should not be invoked where non-payment arises from bona fide interpretation of law, the Tribunal held the show cause notices to be time-barred. For similar reasons, and following authorities that require evidence of deliberate deception for levy of penalty, the Tribunal held the imposition of penalty to be unsustainable. [Paras 37, 38]

Extended period of limitation was wrongly invoked; show cause notices are time barred and the penalty imposed is unwarranted.

Support service of business or commerce - definition of service versus goods under the Finance Act - noscitur a sociis in construing inclusive lists - Whether the framework agreement transactions constituted 'support service of business or commerce' attracting service tax - HELD THAT: - Examining the statutory definition, the Tribunal treated the enumerated examples in the definition as limiting the scope of the general phrase by application of noscitur a sociis and relevant authorities. The Tribunal concluded that the grant of a call option is not similar in nature to the specific services listed and therefore does not fall within 'support services of business or commerce'. Given that call options are transactions in securities (goods), the Finance Act could not be properly invoked to tax these receipts as service. Consequently, the departmental characterization of the transaction as a taxable support service was rejected. [Paras 30, 31, 32]

Framework agreement call option fees are not 'support service of business or commerce' and are not taxable under the Finance Act.

Final Conclusion: The Tribunal allowed the appeal, set aside the impugned order, held that call option fees are transactions in securities/goods not taxable as services for the periods in question, ruled the extended limitation period wrongly invoked and penalties improperly imposed, and directed that the demands be quashed.

Benefit under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - declarant and discharge certificate conclusive for matter and time period - waiver of penalty available only to the declarant - co-noticee eligibility contingent on application and settlement of duty by main noticee - company as separate legal entity from its directors

Benefit under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - declarant and discharge certificate conclusive for matter and time period - waiver of penalty available only to the declarant - company as separate legal entity from its directors - Whether the appellant, a director of the company which obtained a discharge certificate under SVLDRS, is entitled to the benefits of the scheme (including waiver of penalty) without being the declarant under the scheme - HELD THAT: - The Tribunal examined Sections 124 and 129 of the SVLDRS and Circular No. 1071/4/2019. Section 124 provides relief to a declarant calculated as per the scheme and Section 129 makes the discharge certificate conclusive as to the matter and time period for the declarant, relieving the declarant from further liability for duty, interest or penalty and from prosecution for the covered matter and period. The Circular clarifies that co-noticees may not avail benefits until duty demands by the main noticee are settled and that co-noticees must apply under the scheme to obtain relief. The scheme and circular thus make the relief contingent upon being the declarant and obtaining a discharge certificate; merely being a director of a company which has obtained a certificate does not, by itself, make the director a declarant or entitled to the scheme's benefits. The established principle that a company is a separate legal entity from its directors was applied to conclude that the company's discharge does not automatically extend relief to its directors. Decisions relied upon by the appellant were considered distinguishable on facts where co-noticees had independent factual bases for relief. In these circumstances, the Tribunal found no infirmity in the orders below denying benefit to the appellant who did not himself apply as a declarant under SVLDRS. [Paras 8, 9, 10, 11, 12]

Appellant is not entitled to benefits under SVLDRS because he did not apply as a declarant; the company's discharge certificate does not operate to relieve the director and the order under challenge is upheld.

Final Conclusion: Appeal dismissed; benefits under SVLDRS accrue only to the declarant who applies under the scheme and obtains a discharge certificate, and a company's discharge does not automatically confer relief on its director.

General insurance business - Insurance premium - Service as any activity carried out by a person for another for consideration - Stage carriage transport (transport of passengers) - Bundled services and essential character (single composite service) - Exemption under negative list / Mega exemption for transport of passengers - Requirement of IRDA licensing for carrying on insurance business

General insurance business - Insurance premium - Requirement of IRDA licensing for carrying on insurance business - Stage carriage transport (transport of passengers) - Whether the " 2000" is an insurance scheme and the surcharge charged by the appellant amounts to premium - HELD THAT: - For the period prior to 01.07.2012 the term "general insurance business" must be read with the Insurance Act framework and, to fall within taxable "general insurance", the provider must be an insurer/re-insurer and there must be an identifiable insurance contract entitling a predetermined assured sum on occurrence of insured contingencies. The Corporation was not licensed with IRDA and did not issue an insurance policy specifying conditions, assured sums or a fixed contracted obligation when collecting the surcharge. The liability to pay compensation varied case to case under the Corporation's internal policy or by court order and extended to third parties who may not have paid the surcharge. Consequently, the accidental compensation surcharge is not insurance premium nor is the activity covered by "general insurance" for the pre-1.7.2012 period. For the post-1.7.2012 period, although the statutory definition treats any activity for consideration as a "service", the transportation service of stage carriage enjoyed exemption under the Mega Exemption Notification applicable to passenger transport; there being no separate insurance service actually provided, the surcharge did not convert the essential character of the transaction into a taxable insurance service. The Tribunal therefore held that the surcharge is integrated with and incidental to the stage carriage service and does not constitute a separate general insurance service liable to service tax. [Paras 5]

The accident compensation surcharge is not an insurance premium and the Corporation was not providing taxable "general insurance"; the surcharge is incidental to the stage carriage service and not separately taxable for the periods in dispute.

Bundled services and essential character (single composite service) - Exemption under negative list / Mega exemption for transport of passengers - Whether interest and penalty are leviable on the demand raised for the said surcharge - HELD THAT: - Having held that the accident compensation surcharge does not amount to a separate taxable insurance service and that the essential character of the transaction is transportation of passengers (a service exempt under the negative list / Mega Exemption), there is no service tax liability. In consequence, interest under section 75 and penalty under section 78 cannot be sustained. The Tribunal also relied on the statutory principle that naturally bundled elements are to be treated by reference to the single service which gives the bundle its essential character, and applied that principle to treat the surcharge as part of the exempt transport service. As the demand does not survive on merits, ancillary interest and penalty fall away. [Paras 5]

No interest or penalty is leviable because the underlying demand for service tax does not survive.

Final Conclusion: The impugned Order-in-Original is set aside, the appeal is allowed and the Miscellaneous Application is disposed of.

Commercial Training or Coaching Centre Service - Negative list exemption for education as a part of curriculum - Mega exemption for Indian Institutes of Management - Retrospective amendment to commercial training clause - Extended period of limitation and suppression of facts

Commercial Training or Coaching Centre Service - Negative list exemption for education as a part of curriculum - Mega exemption for Indian Institutes of Management - Retrospective amendment to commercial training clause - Whether fees received by the appellant for long-duration post graduate and integrated courses are liable to service tax as commercial training or are exempt as educational services - HELD THAT: - The Tribunal held that the demand was unsustainable. It accepted the reasoning of the Ahmedabad Bench that non-recognition by AICTE is not equivalent to non-recognition 'by law' and therefore is not a valid basis to deny the exemption. The decision traces the statutory timeline: an expanded taxable net for commercial training was introduced retrospectively, but with the advent of the negative list (Finance Act, 2012) services by way of education as part of a curriculum for obtaining a qualification recognized by law were excluded from service tax w.e.f. 01.07.2012. In addition, Mega Exemption Notification No.25/2012 specifically exempted services provided by Indian Institutes of Management for post graduate programmes (as later amended). Applying those principles to the appellant's long term PG and IPM courses, the Tribunal found no basis for the demand and set aside the adjudicating authority's confirmation of tax liability. [Paras 7]

Demand confirmed by the adjudicating authority in respect of the appellant's long duration PG/IPM courses set aside; appellant held to have no tax liability for the impugned periods.

Extended period of limitation and suppression of facts - Whether invocation of the extended period of limitation was justified by alleged suppression of facts by the appellant - HELD THAT: - The Tribunal found that extended limitation was wrongly invoked. It noted that similar show cause notices had been issued earlier for other branches and that the facts alleged were not concealed from the department. Relying on the principle that suppression requires deliberate nondisclosure to evade tax, the Tribunal concluded there was no positive act of suppression or mala fide intention by the appellant and therefore no justification for invoking extended limitation. [Paras 8]

Invocation of extended period of limitation set aside; extended period wrongly invoked by the department.

Final Conclusion: Both appeals allowed; the orders confirming the demands and invocation of the extended period are set aside and the appellant held to have no service tax liability for the impugned periods.

Clandestine removal - seizure of cash and documents - corroboration of statement evidence - retraction of statements - proof required for levy of penalties and interest

Clandestine removal - seizure of cash and documents - corroboration of statement evidence - retraction of statements - Whether the Department established that the cash seized from the first appellant represented sale proceeds of clandestinely removed goods - HELD THAT: - The Tribunal found that the cash seized from the first appellant was satisfactorily explained as an advance received from a named party and that this explanation was supported by statements of the employees and by the proprietor of that party. The addition was made solely on earlier statements of employees which were subsequently retracted. No incriminating documentary evidence was found during search or in the course of investigation to link the seized cash to clandestine sales. In those circumstances a reasonable belief that the seized amount represented sale proceeds of clandestinely removed goods could not be drawn, and the Department failed to prove clandestine removal as to the seized cash. The Tribunal therefore concluded that the addition and any consequential penalties and interest premised on clandestine sale in respect of that cash were unsustainable. [Paras 6, 8]

Seizure of cash did not establish clandestine sale; addition, penalties and interest in respect thereof set aside.

Clandestine removal - corroboration of statement evidence - seizure of cash and documents - retraction of statements - Whether the Department established that Raasi Traders received goods in excess of invoices from the first appellant constituting clandestine supply - HELD THAT: - The Tribunal observed that the document seized from Raasi Traders did not reflect the name of the first appellant, and Raasi Traders in a subsequent letter retracted the earlier version and explained that the seized book reflected the correct position denying purchases without invoice. The Department did not controvert that the seized document did not show the first appellant's name and produced no corroborative evidence linking any alleged excess stock to clandestine purchases from the first appellant. The alleged payments by cheque as per bank records further supported the second appellant's explanation. Absent independent corroboration of the partner's earlier statement and lacking incriminating documents, the Department failed to prove clandestine supply to Raasi Traders. [Paras 7, 8]

Allegation of excess supply to Raasi Traders constituting clandestine sale not established; additions, penalties and interest premised thereon set aside.

Final Conclusion: Impugned orders holding the appellants liable for clandestine removal/sale, and imposing consequential interest and penalties, are set aside; appeals allowed with consequential benefits as per law.

Cenvat credit of service tax on outward transportation - place of removal - inclusion of freight in assessable value for excise duty - remand to adjudicating authority for ascertainment of place of removal - application of precedent in assessee's own case

Cenvat credit of service tax on outward transportation - application of precedent in assessee's own case - Credit of service tax paid on freight for transportation of goods from appellant's factory to its own units at Jamshedpur and Uttarakhand is allowable. - HELD THAT: - The Tribunal followed the judgment of the Madras High Court in the assessee's own case which analysed and distinguished the Supreme Court precedents and held that transport of goods between the appellant's units qualified for credit. Applying that decision, the Tribunal concluded that the appellant is eligible to retain Cenvat credit of service tax on freight paid for movement to its own units and set aside the disallowance, demand, interest and penalties imposed by the adjudicating authority. [Paras 7, 8]

Impugned disallowance, demand, interest and penalties in respect of freight to appellant's own units are set aside and credit is allowed.

Place of removal - inclusion of freight in assessable value for excise duty - remand to adjudicating authority for ascertainment of place of removal - Admissibility of Cenvat credit of service tax on freight for outward transportation up to buyer's premises is remanded for fresh adjudication to ascertain place of removal and whether freight was included in assessable value. - HELD THAT: - The Tribunal observed that admissibility depends on the factual determination of the place of removal and whether freight charges were included in the assessable value for central excise duty. Reliance was placed on the Larger Bench guidance that place of removal must be ascertained in light of apex court decisions and relevant Board circular. The appellant was granted an opportunity of personal hearing and to produce purchase orders, invoices and other documents; if freight was included in assessable value, credit would be permissible. Consequently the matter is directed back to the adjudicating authority for fresh consideration and verification of these facts. [Paras 9, 10, 11]

Issue remanded to the adjudicating authority for ascertainment of place of removal and verification of inclusion of freight in assessable value; appeal partly remanded.

Final Conclusion: The appeal is partly allowed: credit of service tax on freight to the appellant's own units at Jamshedpur and Uttarakhand is allowed and related demand, interest and penalties are set aside; the question of credit for transportation up to buyers' premises is remanded to the adjudicating authority for fresh fact-finding and consequential relief, if any.

Transaction value - additional consideration - assessable value - subsidy under promotion policy not includible in transaction value - VAT paid through 37B challans constitutes actual payment of VAT - selling price not reduced by government subsidy

Transaction value - additional consideration - subsidy under promotion policy not includible in transaction value - VAT paid through 37B challans constitutes actual payment of VAT - Whether the subsidy received under the Rajasthan Investment Promotion Scheme, 2010 is includible in the assessable value of goods for the period 1.4.2016 to 31.03.2017 in terms of transaction value as defined in Section 4(3)(d) of the Act. - HELD THAT: - The Tribunal held that the subsidy granted under the promotion policy (RIPS 2010) does not reduce the selling price and is not an additional consideration for the purposes of transaction value. Reliance was placed on the decision in Harit Polytech (reference decision of the Principal Bench) and a series of earlier Tribunal decisions which concluded that where the assessee collects sales tax from customers and pays the entire amount to the State (using VAT 37B challans), the subsidy does not operate to diminish the sales tax liability or constitute additional consideration. Consequently, the subsidy cannot be included in the transaction value under Section 4(3)(d). As the matter was squarely covered on merits by binding Tribunal precedent, the impugned order holding the subsidy to be includible was set aside. The Tribunal declined to adjudicate afresh on extended period, interest or penalty, observing those aspects did not survive once the substantive issue was decided in favour of the appellant.

Impugned order set aside; appeal allowed and subsidy held not includible in assessable value for the stated period.

Final Conclusion: The Tribunal allowed the appeal, set aside the adjudicating authority's order and held that the RIPS 2010 subsidy (received and utilised via VAT 37B challans) is not includible in the transaction value or assessable value of goods for the period 1.4.2016 to 31.03.2017.

Eligible input service - place of removal - Cenvat credit - clearing and forwarding agency service - services received till the place of removal - Rule 2(qa) of Cenvat Credit Rules, 2004

Place of removal - eligible input service - clearing and forwarding agency service - Cenvat credit - Rule 2(qa) of Cenvat Credit Rules, 2004 - services received till the place of removal - C&F agency services used for transit from factory to warehouses/depots are input services eligible for Cenvat credit because warehouses/depots constitute the place of removal under Rule 2(qa) CCR, 2004. - HELD THAT: - The definition of "place of removal" in Rule 2(qa) of the Cenvat Credit Rules, 2004 expressly includes (ii) warehouses where excisable goods are permitted to be deposited without payment of duty and (iii) depots from where excisable goods are to be sold after clearance from the factory. It is admitted that the cement manufactured by the appellant was transferred to such warehouses/depots and that the clearing and forwarding agency service was engaged for transit from the factory to those locations. Applying the settled ratio that input services received up to the place of removal are eligible for Cenvat credit, and having regard to precedent upheld by the Supreme Court in Ultratech, the C&F agency service in question was received till the place of removal and therefore qualifies as an eligible input service. The denial of Cenvat credit by the lower authorities is consequently unsustainable. The Commissioner (Appeals) failed to follow the correct legal position and the impugned order is set aside.

Appellant entitled to Cenvat credit for C&F agency services used for transit to warehouses/depots; impugned order set aside and appeal allowed.

Final Conclusion: The Tribunal allowed the appeal, set aside the impugned order and held that clearing and forwarding agency services used for transit to warehouses/depots are eligible input services under Rule 2(qa) CCR, 2004; Cenvat credit is therefore allowable for the period October 2016 to June, 2017.

Entitlement to proceed under the SARFAESI Act - notice under Section 13(4) of the SARFAESI Act - liability of guarantor is joint and several

Entitlement to proceed under the SARFAESI Act - notice under Section 13(4) of the SARFAESI Act - State Bank of India is entitled to proceed under the SARFAESI Act and the impugned quashing of the notice under Section 13(4) is set aside. - HELD THAT: - The Court examined the challenge to proceedings initiated by the Bank under the SARFAESI Act by issuance of a notice under Section 13(4). Having regard to the existence of a mortgage and loan amounts recoverable, the Bank was held entitled to invoke the remedial machinery of the SARFAESI Act. The impugned judgment which had quashed the Section 13(4) notice was held to be unsustainable in law and accordingly set aside. The Court however recorded that aggrieved parties remain free to take steps available to them under the SARFAESI Act.

Impugned judgment quashing the Section 13(4) notice set aside; Bank entitled to proceed under the SARFAESI Act.

Liability of guarantor is joint and several - Liability of the guarantor is joint and several with the principal debtor. - HELD THAT: - The Court affirmed the legal principle that a guarantor's liability in the present transactions is joint and several with that of the principal borrower. That position supports the Bank's entitlement to proceed under the SARFAESI Act against the security and parties liable for the debt. The Court noted the fact of a prior one-time settlement application approved but with some payments not made, without making any adjudicative comment on that arrangement.

Guarantor held jointly and severally liable with the principal debtor.

Final Conclusion: Leave granted; the appeal is allowed by setting aside the impugned judgment and confirming the Bank's entitlement to proceed under the SARFAESI Act (including the Section 13(4) notice); respondents remain free to pursue available remedies under the Act; appeal disposed of.

Pre-deposit requirement under the proviso to Section 43(5) of the RERA - the total amount to be paid to the allottee including interest and compensation as subject-matter of pre-deposit - deferred payment / moratorium does not negate promoter's liability for pre-deposit - pre-deposit as demonstration of promoter's bona fides and deterrent against frivolous litigation - deduction of moratorium period while computing pre-deposit

Pre-deposit requirement under the proviso to Section 43(5) of the RERA - deferred payment / moratorium does not negate promoter's liability for pre-deposit - pre-deposit as demonstration of promoter's bona fides and deterrent against frivolous litigation - Promoter must make the pre-deposit of the amount of interest directed by MahaRERA as a condition precedent to entertainment of appeals under the proviso to Section 43(5), even though the liability to pay such interest is deferred to a future date. - HELD THAT: - The proviso to Section 43(5) applies to appeals filed by a promoter and requires deposition of the amount determined by the Regulatory Authority. The Court held that deferment of the time for payment (granted by MahaRERA to avoid jeopardising the project) postpones only the time for payment and does not extinguish or prevent fixation of liability; once MahaRERA has determined the amount payable, the promoter's liability is crystallized for the purpose of the proviso. The provision serves a statutory objective of ensuring promoters show bonafides and to deter frivolous or dilatory litigation by promoters. Consequently the Appellate Tribunal was justified in insisting on pre-deposit of the amount of interest quantified by MahaRERA as a condition for entertaining the appeals. [Paras 19, 21, 23, 30]

Appellant must deposit the interest amount determined by MahaRERA as a pre-condition to the Appellate Tribunal hearing the appeals.

The total amount to be paid to the allottee including interest and compensation as subject-matter of pre-deposit - pre-deposit as demonstration of promoter's bona fides and deterrent against frivolous litigation - Where the Regulatory Authority has awarded interest (and not penalty), the proviso contemplates deposit of the entire amount awarded to the allottee (subject to any permissible deductions), and the proviso is not limited to a 30% deposit only in cases of penalty. - HELD THAT: - The Court accepted the concession that MahaRERA awarded interest and not penalty; the phrase in the proviso that permits deposit of 'the total amount to be paid to the allottee including interest and compensation' therefore applies. Reliance on appellate precedents upholding statutory pre-deposit conditions was noted; the Court held that the deposit of the full amount awarded by MahaRERA (with the limited adjustment directed) is required and the question of a 30% cap on deposit (applicable to penalty) does not arise on these facts. [Paras 21, 22, 31]

The entire amount awarded by MahaRERA (subject to the limited deduction for moratorium period) must be deposited; the issue of depositing 30% penalty is not attracted in this case.

Deduction of moratorium period while computing pre-deposit - deferred payment / moratorium does not negate promoter's liability for pre-deposit - The Appellate Tribunal's computation of the pre-deposit must exclude interest attributable to the moratorium period referred to in MahaRERA's order; the matter was remitted for fresh quantification accordingly. - HELD THAT: - MahaRERA expressly granted the promoter the benefit of moratorium Notifications/Orders Nos. 13 and 14 dated 2 April 2020 and 18 May 2020 when computing interest. The Appellate Tribunal had computed pre-deposit from 1 April 2019 without excluding the moratorium period, thereby directing deposit of an amount that is not payable at any time. The Court found that while deferment does not avoid pre-deposit, interest which is expressly not payable for the moratorium period must be deducted. Accordingly the Appellate Tribunal was directed to pass a fresh order determining the exact amount to be pre-deposited after deducting interest for the moratorium period and to do so expeditiously. [Paras 29, 32]

Remit for fresh computation: Appellate Tribunal to determine the exact pre-deposit after deducting interest for the moratorium period and pass fresh order; appeals to be restored only upon deposit as so determined.

Final Conclusion: Appeals partly allowed: promoter required to pre-deposit the amount of interest quantified under MahaRERA's order as condition for entertaining the appeals, subject to deduction of interest for the COVID-19 moratorium period; matter remitted to the Appellate Tribunal for fresh computation and quantification of the pre-deposit, with directions for restoration of appeals only upon deposit within the stipulated time.