TaxTMI Updates e-Newsletter
Aug 02,2021

Single adjudication order for a tax period - overlapping notices and multiplicity of adjudication proceedings - jurisdiction of assessing authority to adjudicate overlapping periods - ex parte adjudication owing to denial of opportunity to be heard - remand for fresh adjudication after affording hearing - effect of pandemic-related extension on opportunity to reply

Single adjudication order for a tax period - overlapping notices and multiplicity of adjudication proceedings - jurisdiction of assessing authority to adjudicate overlapping periods - Validity of multiple adjudication orders issued for overlapping tax periods and the proper authority to adjudicate the dispute - HELD THAT: - The Court found that three adjudication orders dated 09.06.2021 related to overlapping tax periods and that notice dated 22.12.2020 issued by respondent no.2 covered the entire period in dispute (July 2017 to March 2018), hence proceedings under the other notices were duplicative. On instructions the Revenue conceded that the multiplicity arose from a bona fide mistake and that respondent no.2 had and continues to have jurisdiction to make proper adjudication. The Court therefore held that overlapping adjudications were without jurisdiction to the extent they duplicated the proceedings covered by respondent no.2's notice and that multiple orders for the same tax period could not stand concurrently.

Two of the orders arising from overlapping notices were quashed and the adjudication before respondent no.2 was recognised as the proper proceeding to be adjudicated.

Ex parte adjudication owing to denial of opportunity to be heard - effect of pandemic-related extension on opportunity to reply - Whether the order dated 09.06.2021 passed without participation of the petitioner was vitiated by denial of opportunity to be heard in light of pandemic-related extensions - HELD THAT: - The Court noted that the next date fixed under the notice dated 22.12.2020 was 05.01.2021 which the petitioner could not attend because of the COVID-19 pandemic. The Government had issued orders extending the period to submit replies first up to 30.05.2021 and subsequently up to 30.06.2021. Having regard to these extensions and the petitioner's inability to participate, the impugned order of 09.06.2021 was treated as an ex parte order passed without affording the petitioner due opportunity of hearing, thereby vitiating those adjudications which proceeded without hearing.

The orders passed ex parte on 09.06.2021 (for September-December 2017 and November 2017) were quashed for lack of opportunity to be heard.

Remand for fresh adjudication after affording hearing - Whether the adjudication arising from notice dated 22.12.2020 should be set aside and remitted for fresh adjudication with opportunity to reply and be heard - HELD THAT: - The Court set aside the order dated 09.06.2021 passed by respondent no.2 in proceedings arising from notice dated 22.12.2020 (covering July 2017 to March 2018) and remitted the matter to respondent no.2 for a fresh adjudication after affording the petitioner a reasonable hearing. The Court directed the petitioner to file its reply to the notice dated 22.12.2020 within one month from the order (not later than 31 August 2021) and mandated that further proceedings be conducted and concluded strictly in accordance with law.

The order under notice dated 22.12.2020 was set aside and remitted to respondent no.2 for fresh adjudication after affording the petitioner an opportunity of hearing; the petitioner was given a time-bound direction to file its reply.

Final Conclusion: Writ petition disposed: two adjudication orders of 09.06.2021 relating to overlapping periods quashed; the adjudication arising from notice dated 22.12.2020 (order of 09.06.2021) set aside and remitted to respondent no.2 for de novo adjudication after giving the petitioner a reasonable opportunity to file its reply and be heard, subject to the time direction furnished by the Court.

Cancellation of bail - Tempering of evidence - Influencing witnesses - Stage of investigation - Default bail - Socio-economic offence

Cancellation of bail - Tempering of evidence - Influencing witnesses - Stage of investigation - Default bail - Validity of the order cancelling the bail granted to the petitioner and consequent interim directions. - HELD THAT: - The Court examined the findings of the learned Additional Sessions Judge which relied on alleged admissions, contrary statements before investigating agencies and the contention that the petitioner was likely to temper evidence or influence witnesses. The Court noted that the investigation commenced in 2018 and remains incomplete; no averment was made that further recoveries were to be effected from the petitioner; the learned CMM's finding that investigation qua the petitioner was "almost complete" was contrary to the record; and despite the petitioner having been in custody and granted regular bail, the respondent has not filed a complaint and therefore the petitioner stood to obtain default bail if detained until the expiry of the statutory period. The Court held that other offenders evading arrest or prior non-appearance on summons before lockdown do not, by themselves, justify cancellation of bail granted after custodial detention. Prima facie contradictions in earlier statements were not shown to constitute material establishing continued risk of tampering or influencing witnesses after grant of bail. In view of these considerations, the Court stayed the impugned cancellation order, kept NBWs in abeyance and directed exchange of pleadings within stipulated timelines pending further hearing.

Impugned order cancelling bail stayed; NBWs kept in abeyance; respondent to file reply and matter listed for further hearing.

Final Conclusion: The High Court stayed the order cancelling the petitioner's bail and kept the non-bailable warrants in abeyance, observing that the investigation is incomplete, there is no material demonstrating ongoing risk of tampering or influencing witnesses after grant of regular bail, and that continued custody could have entitled the petitioner to default bail in the absence of a filed complaint.

Interim stay on recovery subject to deposit - deposit of a percentage of tax in dispute under Section 112(8) - conditional suspension of recovery proceedings - judicial direction for electronic authentication and verification of court orders

Interim stay on recovery subject to deposit - deposit of a percentage of tax in dispute under Section 112(8) - conditional suspension of recovery proceedings - Grant of interim relief by directing deposit of 20% of the remaining tax in dispute and suspension of recovery proceedings on such deposit. - HELD THAT: - Relying on the reasoning adopted in an identical writ (Writ Tax No. - 7 of 2020), the Court directed that the petitioner shall, within four weeks, deposit 20% of the remaining amount of tax in dispute in accordance with Section 112(8) of the Act. Upon such deposit, recovery proceedings for the balance amount were ordered to remain stayed until disposal of the instant petition. The order affirms conditional interim relief - not a decision on merits - contingent on the stipulated deposit and compliance with the timeline fixed by the Court.

Petitioner to deposit 20% of the remaining tax in dispute within four weeks; on such deposit, recovery proceedings for the balance shall remain stayed until disposal of the petition.

Judicial direction for electronic authentication and verification of court orders - Procedural directions concerning filing of affidavits and authentication/verification of the Court's order by concerned authorities. - HELD THAT: - The Court granted eight weeks' time to State respondents to file counter affidavits and one week thereafter for any rejoinder. Additionally, the petitioner was directed to furnish a computer-generated copy of the order downloaded from the High Court website, self-attested along with a self-attested identity proof (preferably Aadhar Card) indicating the linked mobile number. The concerned Court/Authority/Official is to verify the authenticity of the computerized copy from the High Court website and record a written declaration of such verification. These directions prescribe the mode and verification procedure for production of the order and regulate interim compliance and participation in the proceedings.

Respondents to file counter affidavit within eight weeks and rejoinder, if any, within one week thereafter; petitioner to file self-attested computerized copy of the order with identity proof; concerned authority to verify and declare authenticity in writing.

Final Conclusion: The petition is admitted for consideration; interim relief granted on conditions - deposit of 20% of the remaining tax within four weeks to stay recovery - with directions for filing of affidavits and electronic authentication of the order; matter listed after compliance.

Eligibility for input tax credit - refund under Section 54 - refund of accumulated ITC due to inverted tax structure - cancellation of registration and its effect on input tax credit - requirement of notice and opportunity to reply under Rule 92(3) - natural justice - opportunity of being heard - remand for fresh examination and speaking order

Eligibility for input tax credit - refund of accumulated ITC due to inverted tax structure - cancellation of registration and its effect on input tax credit - requirement of notice and opportunity to reply under Rule 92(3) - natural justice - opportunity of being heard - Whether the remaining portion of the refund claim (disallowed by the adjudicating authority on account of invoices of M/s. Astha Trading Company) ought to be examined afresh and adjudicated after giving the appellant an opportunity of being heard. - HELD THAT: - The adjudicating authority issued FORM GST RFD-08 enquiring into admissibility of part of the refund claimed on account of ITC relating to invoices of M/s. Astha Trading Company and thereafter sanctioned a part of the claim in FORM RFD-06 while treating the disputed amount as a "Wrong ITC Claim." The appellant contended that supplies were received, requisite documents (tax invoices, e way bills, transport and weighment documents) exist, supplier had filed returns for the relevant month, and that denial on account of later cancellation of the supplier's registration is not a ground to deny bona fide ITC without establishing fraud, collusion or other disqualifying circumstances. Relevant statutory provisions and rules (including the conditions in Section 16 for entitlement to ITC, the power of retrospective cancellation under Section 29, the refund scheme under Section 54, and the procedure and requirement of notice and reply under Rule 92(3)) were considered. In view of these facts and the submissions about lack of personal hearing and the need for detailed examination of eligibility of ITC, the Commissioner (Appeals) concluded that the matter requires fresh consideration by the adjudicating authority so that the disputed eligibility can be examined on merits, the appellant may place relevant documents and averments on record, and a reasoned speaking order be passed after affording opportunity of hearing, consistent with the proviso that no refund shall be rejected without giving the applicant an opportunity of being heard. [Paras 11, 12, 13]

The matter is remanded to the adjudicating authority to examine in detail the eligibility of the contested ITC and the balance refund claim, to afford the appellant an opportunity of being heard, to accept relevant averments and documents, and to pass a reasoned speaking order.

Final Conclusion: The appeal is disposed of by remanding the case to the adjudicating authority for fresh examination of the disputed ITC/refund claim and for passing a reasoned order after giving the appellant an opportunity to be heard; the appellant is directed to furnish relevant averments and documents before the adjudicating authority.

Violation of principles of natural justice - non-speaking order - remand for fresh adjudication - opportunity of hearing and adjournment under Section 75 - requirement of speaking order under Rule 92 - time bar under Section 54

Violation of principles of natural justice - opportunity of hearing and adjournment under Section 75 - non-speaking order - Impugned Orders-in-Original were passed without affording proper opportunity of hearing and amounted to non-speaking orders in breach of principles of natural justice. - HELD THAT: - The appellant submitted written replies to the show cause notices within the prescribed period and sought adjournment of personal hearing in view of COVID 19 restrictions. The adjudicating authority nevertheless rejected the refund claims by brief remarks that the refunds were time barred without considering the appellant's replies, adjournment request or recording reasons. The statutory scheme (Section 75(4)-(6)) and Rule 92(3) proviso require opportunity of hearing, consideration of show cause replies and that no refund application be rejected without hearing; CBEC Circular No.17/17/2017-GST reiterates natural justice. A non speaking order that does not address the appellant's submissions or state reasons for rejecting the claim amounts to denial of natural justice and is unsustainable. [Paras 6, 8, 9, 10, 11]

Findings of breach of natural justice and that the impugned orders are non speaking; matter remanded for fresh adjudication after affording opportunity of hearing and considering the appellant's submissions.

Remand for fresh adjudication - requirement of speaking order under Rule 92 - time bar under Section 54 - Whether the question of admissibility of the refund (including the time bar under Section 54 and related factual contentions) was to be finally decided by the Commissioner (Appeals) or reconsidered by the adjudicating authority. - HELD THAT: - The appellate authority did not decide the merits of the refund claims on law or facts because the original orders rejected the claims summarily as time barred without dealing with the appellant's submissions or documentary evidence. In view of the procedural infirmity and absence of reasoning on the time bar and other contentions, the correct course is to remit the matters to the adjudicating authority to decide afresh. The adjudicating authority is directed to pass a speaking order addressing the appellant's replies, consider requests for adjournment where sufficient cause is shown, and then decide the admissibility of the refund claims (including any question of limitation under Section 54) in accordance with law. [Paras 10, 11]

All appeals disposed by remanding the matters to the adjudicating authority for fresh adjudication in accordance with law after affording proper opportunity of hearing and passing speaking orders.

Final Conclusion: Appeals disposed by remanding the refund claims to the adjudicating authority for fresh decision: the adjudicating authority shall afford the appellant an opportunity of hearing, consider the appellant's written submissions and adjournment requests, and pass a speaking order addressing the time bar and other factual and legal contentions in accordance with Sections 75 and 54 and Rule 92.

Power of withdrawal of approval - surrender of approval by assessee - certainty of exemption under notification - equitable choice between alternative exemption provisions - interpretation of proviso as in addition to and not restrictive

Power of withdrawal of approval - surrender of approval by assessee - interpretation of proviso as in addition to and not restrictive - Whether an assessee granted approval under Section 10(23C)(iv) can seek to surrender that approval and have the prescribed authority withdraw it at the assessee's request. - HELD THAT: - The Court held that nothing in the Act expressly prohibits an assessee from approaching the prescribed authority to surrender an approval granted under Section 10(23C)(iv). The language of the 15th proviso to Section 10(23C)(iv), beginning with the words "Provided also", and the word "withdraw" must be read in a non-restrictive, harmonious manner. The proviso specifies circumstances in which the authority may itself withdraw approval but does not lexically or contextually exclude exercise of withdrawal on the behest of the assessee. Section 293C independently empowers the Central Government, the Board or an income-tax authority to withdraw any approval conferred under the Act, notwithstanding absence of an express provision for withdrawal; this reinforces that withdrawal is within the statutory scheme and can encompass withdrawal upon request. Reading the provisions restrictively to deny an assessee the ability to surrender approval would lead to anomalous results, including compelling an assessee to retain an exemption it no longer wishes to avail and producing perverse incentives. The Court therefore rejected the respondents' contention that withdrawal can only be initiated by the authority and not by the assessee. [Paras 28, 30, 31, 38, 39]

An assessee granted approval under Section 10(23C)(iv) may seek to surrender that approval and the prescribed authority has power to withdraw the approval on the assessee's request.

Certainty of exemption under notification - equitable choice between alternative exemption provisions - Whether petitioners already approved under Section 10(23C)(iv) are disentitled from seeking notification under Section 10(46) and whether their applications for notification must be considered. - HELD THAT: - The Court explained the substantive difference between the two provisions: approval under Section 10(23C)(iv) makes an assessee eligible to claim exemption subject to assessment scrutiny, whereas notification under Section 10(46) by the Central Government removes discretion and confers certainty of exemption for the specified income. Precedents establish that where two exemption notifications/provisions are applicable, an assessee may claim the more beneficial one. Consequently, prior grant of approval under Section 10(23C)(iv) does not legally bar petitioners from seeking notification under Section 10(46). The petitioners had filed applications seeking notification under Section 10(46) (and offered to surrender the earlier approval), but the respondents failed to process or communicate reasons for inaction for nearly three years. The Court found such inaction untenable and directed that the authorities withdraw the earlier approval with effect from the date of the petitioners' applications and process the Section 10(46) applications in accordance with law. [Paras 35, 36, 37, 41, 42]

Prior approval under Section 10(23C)(iv) does not preclude consideration for notification under Section 10(46); the authorities must accept the surrender/withdrawal and process the Section 10(46) applications in accordance with the Act.

Final Conclusion: Writ petitions allowed. The prescribed authority is directed to withdraw the approval granted under Section 10(23C)(iv) with effect from the date of the petitioners' applications and to process the petitioners' applications for notification under Section 10(46) of the Income tax Act, 1961 (filed 07.03.2017 and 08.03.2017) in accordance with law; no order as to costs.

Peak cash deficit - addition based on unexplained cash - assessment under Section 153A - search under Section 132 - reliability of books of account seized in search - perversity of factual findings - no presumption that non-discovery implies non-existence

Peak cash deficit - reliability of books of account seized in search - perversity of factual findings - Addition on account of peak cash deficit was validly made and sustained on facts - HELD THAT: - The authorities found that cash of Rs. 45,40,000/- was seized during search and that the cash book (updated to 30.09.2009) reflected a much larger cash balance on the date of search. The assessee failed to explain the discrepancy of Rs. 1,06,26,309/- and admitted that the seized cash was available at his residence. The Assessing Officer computed the peak cash deficit and made an addition which was affirmed by the Commissioner (Appeals) and the tribunal. These conclusions were treated as findings of fact based on appreciation of evidence and not shown to be perverse; hence the addition was sustained. [Paras 6]

Addition for peak cash deficit upheld as a factual finding and sustained.

Assessment under Section 153A - addition based on unexplained cash - Validity of assessment proceedings under Section 153A where addition was not founded on seized incriminating material - HELD THAT: - Although the assessee contended that no incriminating material seized was relied upon, the authorities proceeded under Section 153A after the search and found unexplained cash discrepancy. The tribunal and appellate authority accepted the Assessing Officer's calculation of peak deficit and the absence of a satisfactory explanation from the assessee. The Court held that the assessment under Section 153A and the resultant addition did not suffer from legal infirmity where the factual basis for the addition (unexplained cash/peak deficit) was established. [Paras 6, 7]

Assessment under Section 153A and addition based on unexplained cash sustained.

No presumption that non-discovery implies non-existence - search under Section 132 - Presumption of absence of cash merely because it was not located during search rejected as a legal bar to addition - HELD THAT: - The assessee argued that there is no legal presumption that what is not found during search does not exist and relied on the books of account. The Court observed that the assessee could not account for the large discrepancy between the cash as per books and the cash seized, and that after seizure the cash balance was treated as nil for computation of peak deficit. On the facts, the tribunal's conclusion that the post-seizure cash balance was nil and that cash payments in excess of receipts after search justified the addition was a permissible factual finding. Consequently, the contention that mere non-discovery of cash during search precludes an addition was rejected. [Paras 6, 7]

No legal presumption in favour of the assessee; non-discovery did not preclude addition where unexplained cash discrepancy existed.

Final Conclusion: The factual findings of the income-tax authorities and the tribunal that the assessee failed to explain the cash discrepancy and that the peak cash deficit was correctly computed are not perverse; the appeal is dismissed and the additions sustained.

Violation of principles of natural justice - show cause notice under Section 144B(1)(xvi) of the Income-tax Act, 1961 - Faceless Assessment First Amendment Scheme, 2021 - assessment under Section 143(3) read with Sections 144B and 144C of the Income-tax Act, 1961 - remand for fresh assessment

Violation of principles of natural justice - show cause notice under Section 144B(1)(xvi) of the Income-tax Act, 1961 - Faceless Assessment First Amendment Scheme, 2021 - assessment under Section 143(3) read with Sections 144B and 144C of the Income-tax Act, 1961 - remand for fresh assessment - Impugned draft assessment order and consequential assessment order were passed without issuance of the mandatory show cause notice and therefore violated principles of natural justice; matter remanded for fresh assessment after issuance of such notice. - HELD THAT: - The Court found that the draft assessment order dated 25 March 2021 was passed without issuance of the show cause notice as mandated by the statutory scheme and that the consequential assessment order dated 24 May 2021 suffered from the same defect. The petitioner contended that the orders violated the principle of audi alteram partem embodied in the Faceless Assessment First Amendment Scheme, 2021 and Section 144B. The respondent's counsel did not oppose the petition and expressly stated he had no objection to setting aside the orders and remanding the matter to the Assessing Officer for a fresh decision. In view of the admitted procedural defect and the acceptance by the respondent, the Court set aside both the draft and final assessment orders and directed that a show cause notice under Section 144B(1)(xvi) of the Act be issued to the petitioner and that a fresh assessment under Section 143(3) read with Sections 144B and 144C be undertaken after compliance with the notice requirement. The Court required the notice to be issued within two weeks and disposed of the petition accordingly. [Paras 3, 4, 5, 7]

Both the draft assessment order dated 25 March 2021 and the assessment order dated 24 May 2021 are set aside and the matter is remanded to the Assessing Officer for fresh assessment under Section 143(3) read with Sections 144B and 144C after issuance of a show cause notice under Section 144B(1)(xvi).

Final Conclusion: Writ petition allowed insofar as the impugned draft and assessment orders are set aside; matter remitted for fresh assessment after issuing the mandatory show cause notice within two weeks, and petition disposed of.

Section 179 of the Income Tax Act - liability of directors of a company - private limited company versus public limited company - piercing the corporate veil - certificate of incorporation, memorandum and articles of association - remand for fresh adjudication

Section 179 of the Income Tax Act - private limited company versus public limited company - liability of directors of a company - Validity of the show cause notice issued under Section 179 when the company in default is alleged to be a public limited company. - HELD THAT: - The Court held that Section 179 of the Income Tax Act is directed to fastening liability on directors of private companies and is not prima facie applicable to public limited companies. In the absence of materials on record to establish that the assessee-in-default was a private limited company, invocation of Section 179 was without proper basis. The Court observed that factual determination of the corporate status must be made on the basis of company records and statutory definitions incorporated from the Companies Act, and noted that the record before the authority and the court did not substantiate that the companies were private limited entities. On that basis the impugned notice was quashed and the matter remitted for fresh adjudication after verification of corporate status. [Paras 6, 7]

Impugned show cause notice under Section 179 is quashed and the matter remitted for fresh consideration because there were no records to establish that the company was a private limited company.

Certificate of incorporation, memorandum and articles of association - remand for fresh adjudication - opportunity to produce evidence - Scope and manner of remand: verification of corporate status and procedure to be followed by the tax authority on remand. - HELD THAT: - The Court directed that the authority must examine the certificate of incorporation and the memorandum and articles of association, and other records available from the Registrar of Companies, to determine whether the assessee-in-default was a private limited company. The petitioners were granted liberty to submit documents and evidence within four weeks to establish whether they were directors of a private or public limited company. On receipt of such material, and after examining available records, the authority is to pass appropriate orders on merits, affording the petitioners an opportunity of being heard. The exercise was ordered to be completed by the authority within three months from receipt of the order. The remand was for fresh consideration and verification rather than final adjudication on merits by this Court. [Paras 6, 7]

Proceedings remitted to the respondent for verification of corporate status by examining company incorporation documents and ROC records; petitioners may file evidence within four weeks and the authority to decide afresh within three months.

Final Conclusion: The writ petition is allowed: the show cause notice issued under Section 179 is quashed and the matter is remitted to the tax authority for fresh consideration limited to verification of whether the company in default was a private limited company, with directions permitting the petitioners to file evidence and requiring the authority to decide afresh within the prescribed timeframe.

Jurisdiction to reopen assessment - service of notice under Section 148 - time bar/limitation for reopening - reasons recorded for reopening - requirement of speaking order on appellate review - remand for fresh consideration and remand report

Requirement of speaking order on appellate review - jurisdiction to reopen assessment - Ld. CIT(A) failed to adjudicate the assessee's specific objections regarding legality, service and jurisdiction of the notice under Section 148 and did not render a speaking decision. - HELD THAT: - The Tribunal found that the assessee had raised specific, jurisdictional objections before the CIT(A) relating to issuance and service of the notice under Section 148 at an incorrect address, the competence of the Noida AO to assume jurisdiction, and related time-bar/contentions. The CIT(A)'s brief dismissal of Ground No.1 without addressing the detailed submissions and without a reasoned, speaking order was held to be improper. The Tribunal emphasised that the appellate authority ought to consider the averments and pass a speaking order dealing with the jurisdictional contentions instead of a casual remark that the case was transferred and the hardship 'mitigated'. For these reasons the Tribunal set aside the impugned order of the CIT(A) and restored the issue for fresh decision after obtaining necessary information. [Paras 9]

Impugned order of the CIT(A) set aside insofar as it failed to deal with the aforesaid objections; issue restored to CIT(A) for fresh, speaking decision after remand.

Service of notice under Section 148 - time bar/limitation for reopening - reasons recorded for reopening - remand for fresh consideration and remand report - Referred specific factual and jurisdictional questions to the CIT(A) to decide afresh on remand. - HELD THAT: - The Tribunal directed the CIT(A) to obtain a remand report from the Assessing Officer and determine (a) whether and when a notice under Section 148 was issued to the assessee by the Delhi AO (ITO Ward-63(3), New Delhi), (b) whether reasons for reopening were furnished to the Delhi AO and received by the assessee, (c) the correctness of the address used for service and whether proper service was effected, and (d) whether the notice issued by the Delhi AO was within the period of limitation. The Tribunal recorded that these matters are jurisdictional in character and require specific findings; accordingly the CIT(A) is to give clear findings on the reasons recorded and on receipt/non-receipt of reasons and on limitation for issuance of the Section 148 notice. All other grounds of the assessee's appeal were left open and remitted to the CIT(A) for fresh adjudication in light of the remand findings. [Paras 9]

Directed remand to CIT(A) with instructions to obtain remand report and decide the listed questions of jurisdiction, service, reasons and limitation; all other grounds remitted for fresh decision.

Final Conclusion: The appeal is allowed for statistical purposes only: the Tribunal set aside the CIT(A)'s order for want of a speaking decision on jurisdictional objections and remitted the matter to the CIT(A) with directions to obtain a remand report and decide, with reasons, the issues concerning issuance and service of the Section 148 notice, reasons recorded for reopening, and limitation; other grounds are remitted for fresh consideration.

Genuineness of transactions and identity and creditworthiness of counterparties - admission of additional evidence under Rule 46A(1) of the Income tax Rules, 1962 - onus of proof for business expenditure under section 37(1) of the Income tax Act, 1961 - relevance of non reply to notices issued under section 133(6) in establishing sham purchases - assessment additions in respect of unexplained loans and cash credits

Admission of additional evidence under Rule 46A(1) of the Income tax Rules, 1962 - genuineness of transactions and identity and creditworthiness of counterparties - Whether the CIT(A) rightly admitted and relied upon additional evidence under Rule 46A(1) and, on that basis, rightly deleted the addition of Rs. 4,57,42,900/- relating to purchases from M/s N.K. Gold Medallion Pvt. Ltd. - HELD THAT: - The Tribunal accepted the CIT(A)'s finding that the additional evidence was not available during assessment proceedings and that the Assessing Officer had not afforded ample opportunity to produce it, therefore admission under Rule 46A was proper. On the merits, the assessee produced independent documents - purchase invoices, VAT records, confirmations, entries in the seller's books and turnover evidence - which established identity of the seller, matching transactions and market rate trading in gold bullion. The Assessing Officer's reliance on non reply to notices under section 133(6) was noted but the record showed confirmations and documentary support from the counterparty; no finding was recorded by the AO that the seller did not exist or transactions were fraudulent. The Tribunal found the CIT(A)'s detailed reasoning (quoted at 8.6-8.9) sufficient and declined to interfere with deletion of the addition. [Paras 7, 8]

Addition of Rs. 4,57,42,900/- in respect of purchases from M/s N.K. Gold Medallion Pvt. Ltd. deleted; CIT(A)'s admission of additional evidence and findings on genuineness upheld.

Relevance of non reply to notices issued under section 133(6) in establishing sham purchases - genuineness of transactions and identity and creditworthiness of counterparties - Whether the non reply by the seller to notices under section 133(6) rendered the purchases bogus or justified sustaining the addition. - HELD THAT: - The Tribunal noted that mere non reply to notices u/s 133(6) does not automatically establish that purchases are bogus. The CIT(A) recorded that despite the AO's observation about non reply, the seller had filed confirmations and relevant documents and there was no material to show the party did not exist or that transactions were sham. Reliance was placed on the contemporaneous documentary matrix - VAT payments, mutual entries and substantial turnover of the seller - to conclude transactions were genuine. The Tribunal found no adverse material in the remand report to justify interference. [Paras 7, 8]

Non reply to s.133(6) notices did not render the purchases bogus; CIT(A)'s conclusion that transactions were genuine sustained.

Onus of proof for business expenditure under section 37(1) of the Income tax Act, 1961 - genuineness of transactions and identity and creditworthiness of counterparties - Whether the assessee discharged the primary onus under section 37(1) to prove that the expenditure on purchases was incurred wholly and exclusively for business purposes. - HELD THAT: - The Tribunal observed that the assessee furnished documentary evidence before the CIT(A) demonstrating the commercial nature of the purchases in gold bullion, accounting treatment showing sales and profit/loss, and tax/VAT compliance; these materials satisfied the requirement to prove genuineness and business purpose. The Assessing Officer did not show how the assessee derived any undue benefit or motive from the transactions. On this basis the Tribunal found the CIT(A)'s acceptance of the assessee's discharge of onus (as reflected in paras 8.6-8.9) to be justified. [Paras 7, 8]

Assessee discharged the onus under section 37(1); expenditure allowed and addition deleted.

Assessment additions in respect of unexplained loans and cash credits - genuineness of transactions and identity and creditworthiness of counterparties - Whether additions made in respect of alleged unsecured loans/cash credits were sustainable given the documents and confirmations produced before the CIT(A). - HELD THAT: - The CIT(A) examined confirmations, bank statements, sale deeds of properties sold by the lender companies, memorandum and articles and income tax returns filed by directors, and accepted source explanations for amounts advanced. Specific items (loans from Shri Anil Gupta and Smt. Nupur Gupta) were accepted by the AO in the remand report and deleted; other loans from the named companies and Shri Bharat Bhasin were supported by documentary material and confirmations, which the CIT(A) accepted (paras 14.4-14.6). The Tribunal found these findings supported by record and noted absence of adverse facts in the remand report, and therefore declined to interfere. [Paras 8, 14]

Additions in respect of the unsecured loans/cash credits deleted; CIT(A)'s acceptance of documentary evidence upheld.

Final Conclusion: The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s admission of additional evidence under Rule 46A(1) and its findings that the purchases and claimed loans were genuine; the assessment additions challenged were deleted and the CIT(A)'s orders affirmed.

Penalty under section 271(1)(c) - computation of book profits under section 115JB - year-to-year approach versus aggregation approach - debatable question - full disclosure in return - acceptance of assessment disallowance not automatic ground for penalty - separate and independent penalty proceedings - rectification under section 154 and revisional jurisdiction under section 263

Penalty under section 271(1)(c) - computation of book profits under section 115JB - year-to-year approach versus aggregation approach - debatable question - full disclosure in return - Whether penalty under section 271(1)(c) is sustainable where the disallowance arises from a debatable interpretation of computation of book profits under section 115JB - HELD THAT: - The Tribunal held that the question whether brought forward unabsorbed depreciation/business loss is to be allowed year-by-year or on an aggregated basis under Explanation 1 clause (iii) to section 115JB(1) is debatable. Divergent decisions of different Benches of the Tribunal demonstrate that two views are possible. The assessee claimed set-off of unabsorbed depreciation on a year-to-year basis and made full disclosure of the computation in the return. In these circumstances, and having regard to settled principles that penalty cannot be levied where the issue is arguable and there existed judicial divergence on the point, the levy of penalty under section 271(1)(c) was not justified. The Tribunal therefore set aside the penalty levied for the impugned assessment year. [Paras 5, 6, 7, 9, 10]

Penalty under section 271(1)(c) deleted as the disallowance arose from a debatable issue in computation of book profits under section 115JB and the assessee had made full disclosure.

Acceptance of assessment disallowance not automatic ground for penalty - separate and independent penalty proceedings - Whether acceptance of an addition/disallowance by the assessee, without further contest, automatically attracts penalty under section 271(1)(c) - HELD THAT: - The Tribunal reiterated that assessment proceedings and penalty proceedings are distinct. Mere acceptance of an addition or disallowance by the assessee does not, by itself, justify automatic imposition of penalty. The Assessing Officer must record satisfaction and the penalty proceedings remain subject to independent judicial scrutiny. Relying on this principle and the factual matrix that the assessee had disclosed the claim and the matter was debatable, the Tribunal held that penalty could not be sustained on the ground of mere acceptance of the addition. [Paras 8, 9]

Acceptance of the disallowance by the assessee does not automatically warrant levy of penalty; penalty proceedings must stand on independent satisfaction and legal scrutiny.

Final Conclusion: The penalty imposed under section 271(1)(c) for AY 2004-05 is set aside and the assessee's appeal is allowed, the Tribunal finding the disputed computation under section 115JB to be debatable and noting that the assessee had made full disclosure and that acceptance of an addition does not automatically attract penalty.

Time-barred assessment - special audit under section 142(2A) - computation of period of limitation under Explanation (b) to section 153B - assessment under section 153A - exclusion of period where assessment proceeding is stayed by court

Time-barred assessment - special audit under section 142(2A) - computation of period of limitation under Explanation (b) to section 153B - assessment under section 153A - Validity of assessment orders passed under section 153A as barred by limitation where direction for special audit under section 142(2A) fixed the period for furnishing audit report and no stay or order setting aside the direction was obtained or communicated to the Commissioner - HELD THAT: - The Tribunal examined the communications directing the assessee to get its accounts audited under section 142(2A), noting that the Assessing Officer's letter dated 29.03.2016 fixed the period for the audit (90 days with permissible extension) which, as computed, expired on 21.08.2016. The Assessing Officer passed assessment orders on 28.10.2016. The Tribunal found that no order staying the assessment proceedings nor any order setting aside the direction under section 142(2A) was produced or communicated to the Principal Commissioner/Commissioner. The CIT(A)'s reliance on Explanation (b) to section 153B to exclude the period from filing of the writ petition to its disposal was held unsustainable because Explanation (b) permits exclusion only where (i) the assessment proceeding is stayed by an order/injunction of a court or (ii) where an order setting aside the direction is received by the Principal Commissioner/Commissioner; neither circumstance existed on the facts. Consequently the period available for completion of assessment expired prior to the date on which the Assessing Officer passed the orders. Having succeeded on this legal ground, the Tribunal declined to adjudicate the merits of additions as academic. [Paras 5]

Assessment orders dated 28.10.2016 for the A.Ys. 2008-2009 and 2010-2011 to 2013-2014 are quashed as barred by limitation; appeals allowed.

Final Conclusion: The Tribunal set aside the CIT(A)'s conclusion and quashed the assessments passed beyond the period prescribed after the direction for special audit under section 142(2A) expired, holding that Explanation (b) to section 153B did not apply in the absence of a court stay or an order setting aside the direction; accordingly all the assessee's appeals for the A.Ys. 2008-2009 and 2010-2011 to 2013-2014 are allowed.

Initial assessment year - 100% deduction under section 80IC for five years - substantial expansion as re setting the initial assessment year - restarting of 100% deduction upon substantial expansion - disallowance of expenditure under section 14A read with Rule 8D

Initial assessment year - 100% deduction under section 80IC for five years - substantial expansion as re setting the initial assessment year - Entitlement to 100% deduction under section 80IC for the year under consideration on account of substantial expansion which reset the initial assessment year to A.Y.2009-10. - HELD THAT: - The Tribunal found that the Assessing Officer misconstrued the amended scheme of section 80IC by treating the assessee's original commencement year as the sole 'initial assessment year' and thereby restricting the claim to 30% for the year under appeal. Having regard to the notification, the statutory amendment and the assessee's substantial expansion in the relevant previous year, the Tribunal held that the year in which substantial expansion occurred becomes the 'initial assessment year' for the purposes of fresh entitlement to 100% deduction for five assessment years. The Tribunal followed the ratio of the Hon'ble Supreme Court in PCIT v. Aarham Softronics, which expressly recognized that substantial expansion brings a fresh initial assessment year and restarts the period of 100% deduction (subject to the overall ten year limit under the provision). Applying that principle to the facts on record and noting that earlier assessment years were not disturbed by the AO, the Tribunal sustained the CIT(A)'s allowance of 100% deduction for the period commencing A.Y.2009-10 and dismissed the revenue's challenge. [Paras 10, 11, 12, 13]

The CIT(A)'s grant of 100% deduction under section 80IC (commencing A.Y.2009-10 by virtue of substantial expansion) is upheld and the revenue's grounds challenging that allowance are dismissed.

Disallowance of expenditure under section 14A read with Rule 8D - Validity of deletion of disallowance under section 14A where assessee's own funds were sufficient to meet the investment in exempt income. - HELD THAT: - The Tribunal noted the CIT(A)'s finding that the assessee had adequate interest free own funds in excess of the investment in shares/dividend bearing assets, and therefore no portion of interest or other expenditure needed to be disallowed. Relying on the approach in the decisions relied upon (as applied by the CIT(A)), the Tribunal found no infirmity in deleting the section 14A disallowance made by the AO and rejected the Revenue's contention for sustaining the disallowance. [Paras 7, 14]

The deletion of the section 14A disallowance by the CIT(A) is sustained and the revenue's challenge to that deletion is dismissed.

Final Conclusion: The appeal filed by the revenue is dismissed; the order of the CIT(A) allowing 100% deduction under section 80IC (from A.Y.2009-10 by reason of substantial expansion) and deleting the section 14A disallowance is affirmed.

Assessment framed in name of non-existent entity - Assessment on successor under Section 170(2) of the Income-tax Act, 1961 - Quashing of assessment as void ab initio - Effect of amalgamation on continuity of taxable entity - Certainty and consistency in tax litigation

Assessment framed in name of non-existent entity - Assessment on successor under Section 170(2) of the Income-tax Act, 1961 - Quashing of assessment as void ab initio - Assessments framed in the name of the erstwhile Haryana Gramin Bank and Gurgaon Gramin Bank after their amalgamation are void and liable to be quashed; assessment ought to have been made on the successor bank. - HELD THAT: - The Tribunal found on the uncontradicted record that the two regional rural banks ceased to exist w.e.f. 29.11.2013 upon amalgamation with Sarva Haryana Gramin Bank and that the Assessing Officer was informed of the amalgamation during assessment proceedings. Section 170(2) prescribes that where a predecessor cannot be found the assessment shall be made on the successor in like manner. Applying that provision and following the reasoning of the Supreme Court in CIT v. Maruti Suzuki India Ltd. - which held that final assessment passed in the name of a non-existent/merged entity is void and emphasised the need for certainty and consistency - the Tribunal concluded that framing and confirming assessments in the name of the non-existent entities was legally impermissible. Consequently the impugned assessments were held to be nullities and not sustainable. The Tribunal did not proceed to adjudicate the other substantive grounds raised before it because the foundational assessments were quashed. [Paras 11, 12, 14]

Assessments framed in the name of the erstwhile banks are quashed and the appeals are allowed; assessments should have been in the name of the successor bank in terms of Section 170(2).

Final Conclusion: The Tribunal quashed the assessment orders for AYs 2013-14 and 2014-15 as having been framed in the name of non-existent predecessor banks post-amalgamation, holding that assessments ought to have been made on the successor bank under Section 170(2); consequently the appeals were allowed.

Deduction under section 54F - Ownership and possession as basis for tax benefits - Transfer of property and protection under section 53A of the Transfer of Property Act - Preferential interpretation of taxing statute in favour of assessee

Deduction under section 54F - Ownership and possession as basis for tax benefits - Preferential interpretation of taxing statute in favour of assessee - Deduction claimed under section 54F was allowable despite absence of a registered sale deed, where the assessee had paid the consideration, acquired possession and proved dominion over the property. - HELD THAT: - The Tribunal affirmed the Commissioner (Appeals) and held that mere absence of a registered conveyance deed does not preclude allowance of deduction under section 54F where the assessee has established payment of consideration, possession and acts of ownership in respect of the residential property. The factual matrix showed purchase of two-thirds share from parents, one-third already owned since 2008, production of agreement to sell, power of attorney, possession letter, payment details and documentary evidence of possession (photograph, electricity and water bills). Applying the principle in Mysore Minerals Ltd. v. CIT, the Court observed that benefit-conferring provisions must be construed so as to effectuate legislative intent and that 'ownership' for tax purposes may be recognised by dominion and exclusive possession even absent formal registered title. The Tribunal also relied on consistent decisions construing contracts 'of the nature referred to in section 53A' and the purpose of section 2(47)(v) to protect transferee's possession, concluding that non-registration alone cannot defeat the claim where possession and payment are proved. In those circumstances, the Assessing Officer's disallowance solely for want of a registered sale deed was not sustainable. [Paras 6, 10, 11, 13]

The addition made by the Assessing Officer by disallowing deduction under section 54F was deleted and the Revenue's appeal dismissed.

Final Conclusion: Where an assessee proves payment of consideration, possession and exclusive dominion over the residential property, deduction under section 54F cannot be denied merely for non-registration of the conveyance; Revenue's appeal against deletion of the addition is dismissed.

Reopening of assessment and jurisdiction under Section 147 - notice under Section 148 and contemporaneous reasons requirement - reopening beyond four years under first proviso to Section 147 requiring failure to disclose fully and truly all material facts - time barred reopening and void ab initio - change of opinion doctrine - deductibility of provisions for leave encashment and interplay with Section 43B(f)

Reopening of assessment and jurisdiction under Section 147 - notice under Section 148 and contemporaneous reasons requirement - reopening beyond four years under first proviso to Section 147 requiring failure to disclose fully and truly all material facts - time barred reopening and void ab initio - Validity of reassessment proceedings for AY 2006-07 insofar as jurisdiction under Section 147/notice under Section 148 issued after four years from end of year - HELD THAT: - The Assessing Officer issued notice under Section 148 on 01.03.2013 reopening an assessment earlier completed under Section 143(3). Because the notice was issued after the four year period, the reopening was subject to the additional requirement in the first proviso to Section 147 that the income must have escaped assessment by reason of the assessee's failure to disclose fully and truly all material facts. The reasons recorded reproduced the account of provisions for leave encashment and quoted Section 43B(f), but did not contain any allegation or finding specifying which material facts were not fully and truly disclosed at the original assessment or how nondisclosure caused escapement of income. The reasons therefore did not satisfy the statutory pre requisites and failed the contemporaneous recording requirement; on that basis the notice was held time barred and void ab initio. Reliance was placed on established decisions holding that absence of the required allegation/finding in the reasons invalidates reopening beyond four years. Having quashed the notice for want of jurisdiction, the Tribunal did not adjudicate other merits or Revenue grounds which became academic. [Paras 7, 8]

Notice dated 01.03.2013 and reassessment for AY 2006-07 under Section 147/148 quashed; assessment order set aside; assessee's appeal allowed and Revenue's appeal dismissed.

Reopening of assessment and jurisdiction under Section 147 - notice under Section 148 and contemporaneous reasons requirement - reopening beyond four years under first proviso to Section 147 requiring failure to disclose fully and truly all material facts - time barred reopening and void ab initio - Validity of reassessment proceedings for AY 2007-08 insofar as jurisdiction under Section 147/notice under Section 148 issued after four years from end of year - HELD THAT: - The facts and the reasons recorded for AY 2007-08 mirrored those in AY 2006-07: the notice under Section 148 issued after the four year period relied on a contention that provisions for leave encashment were not allowable under Section 43B(f). The recorded reasons again lacked any specific allegation that material facts had not been fully and truly disclosed at the original assessment, a requirement for reopening after four years. Given this absence, the reopening did not meet the statutory threshold and was therefore time barred and void. The reassessment order founded on that notice was set aside, and consequent Revenue grounds were left academic. [Paras 11, 12, 13]

Notice dated 01.03.2013 and reassessment for AY 2007-08 quashed; assessment order set aside; assessee's appeal allowed and Revenue's appeal dismissed.

Final Conclusion: The Tribunal held that notices under Section 148 issued on 01.03.2013 to reopen completed assessments for AY 2006-07 and AY 2007-08 were issued beyond four years and the reasons recorded did not allege failure to disclose fully and truly all material facts as required by the first proviso to Section 147; such reopenings were time barred and void, the reassessment orders were set aside, assessee's appeals allowed and Revenue's appeals dismissed.

Taxability of surplus on sale of mortgaged property - classification of surplus as long-term capital gain - forced sale versus voluntary sale of mortgaged property - allowability of bad debts written off as business loss - collusive transactions and disallowance under section 36(1)(vii) - precedential effect of coordinate Bench decisions

Taxability of surplus on sale of mortgaged property - classification of surplus as long-term capital gain - forced sale versus voluntary sale of mortgaged property - precedential effect of coordinate Bench decisions - Surplus arising on sale of mortgaged plots by the assessee is taxable as long-term capital gain. - HELD THAT: - The Tribunal examined whether the surplus realised on sale deeds executed by the assessee in respect of mortgaged agricultural plots was a forced sale by the lender (not taxable to the assessee) or a voluntary realisation by the assessee (taxable). The facts showed that the assessee executed the sale deeds, received the entire sale consideration into its bank accounts and thereafter the proceeds were used to discharge the lender; the sales were at or near market value. The coordinate Bench decision in the group company's case (WGF Financial Services Pvt. Ltd.) was held to be directly applicable and distinguishable from authorities where the lender alone sold the mortgaged property and retained sale proceeds. Applying those findings, the Tribunal concluded that income accrued to the assessee and the surplus declared as long-term capital gain was correctly subjected to tax. The assessee's concession that the coordinate Bench decision was binding on identical facts was noted. [Paras 11, 12, 13, 14]

Assessee's grounds contesting taxation of the surplus are dismissed; surplus treated as taxable long-term capital gain.

Allowability of bad debts written off as business loss - collusive transactions and disallowance under section 36(1)(vii) - precedential effect of coordinate Bench decisions - Bad debts written off in respect of guarantees given in the ordinary course of financing business are allowable as business loss; addition under s.36(1)(vii) for collusive transaction is not sustainable on these facts. - HELD THAT: - The Assessing Officer had treated the write-offs as not genuine business losses and sought to disallow them under the theory of collusion. The CIT(A) examined the documentary record and whether the write-offs arose from ordinary business exigencies of a guarantor. The Tribunal relied on the coordinate Bench's decision in the group company's case which found that guarantees were given in the ordinary course of business, the borrowers defaulted due to market collapse, repayments were attempted through settlements and the balance written off represented a bona fide business loss rather than a colorable or collusive device. On identical facts, and in absence of any material indicating collusion, the Tribunal found no infirmity in deletion of the addition and upheld allowance of the bad debts written off as business loss. [Paras 15, 16, 17, 18]

Revenue's addition disallowing the bad-debt write-offs is deleted; write-offs allowed as business loss.

Final Conclusion: Applying the Tribunal's reasoning and the coordinate Bench precedent, the appeal of the assessee contesting taxation of surplus is dismissed (surplus taxed as long term capital gain), and the revenue's appeal against deletion of the addition for bad debt write offs is dismissed (write offs upheld as business loss); both appeals are therefore dismissed.

Furnishing inaccurate particulars of income - concealment of particulars of income - penalty under section 271(1)(c) - capital v. revenue nature of expenditure - full and complete disclosure in return - difference of opinion not constituting concealment - claim not sustainable in law not amounting to inaccurate particulars

Furnishing inaccurate particulars of income - penalty under section 271(1)(c) - capital v. revenue nature of expenditure - difference of opinion not constituting concealment - full and complete disclosure in return - Assessee did not conceal particulars nor furnish inaccurate particulars of income in relation to the claim for expenditure on construction of Bus Queue Shelters for Assessment Year 2009-10; penalty under section 271(1)(c) was not leviable. - HELD THAT: - Penalty proceedings were founded on the Assessing Officer's disallowance treating the claimed expenditure as capital, and the AO imposed penalty under section 271(1)(c) for furnishing inaccurate particulars. The Tribunal examined that identical factual and legal controversy had been considered in earlier assessment years where the appellate authority's order in favour of the assessee was confirmed by the Tribunal. Applying the principle enunciated by the Apex Court in Reliance Petro (as cited), merely making a claim which may not ultimately be sustainable in law does not by itself amount to furnishing inaccurate particulars unless the particulars disclosed in the return are shown to be incorrect, erroneous or false. Where the assessee has brought all true and material facts in the return, classification of expenditure as capital or revenue, if it involves a difference of opinion, cannot be equated to concealment or inaccurate particulars attracting penalty. The Tribunal found no illegality or perversity in the appellate authority's conclusion that the facts constituted full disclosure and only a debatable classification, and therefore deletion of the penalty was justified. [Paras 8, 9, 10]

Penalty under section 271(1)(c) deleted; Revenue's appeal dismissed.

Final Conclusion: The Tribunal upheld the Commissioner (Appeals)'s deletion of the penalty under section 271(1)(c) for AY 2009-10, concluding that the assessee had disclosed true and material facts and that the disputed classification of the Bus Queue Shelter expenditure was a difference of opinion and did not amount to concealment or furnishing of inaccurate particulars.

Validity of notice under section 153C of the Income Tax Act - Assessing officer's jurisdiction where additions are deleted by appellate authority - Academic adjudication - Deletion of additions by Commissioner (Appeals) rendering related jurisdictional challenge infructuous - Liberty to seek recall in future proceedings

Validity of notice under section 153C of the Income Tax Act - Academic adjudication - Whether adjudication of the challenge to the notice issued under section 153C should be undertaken after the appellate authority deleted the additions on merit. - HELD THAT: - The Tribunal observed that the additions made by the Assessing Officer, which formed the basis for issuing notices under section 153C, were deleted by the Commissioner (Appeals) on merit and those deletions were not challenged by the Revenue. In those circumstances, the Tribunal treated further adjudication of the legal validity of the section 153C notices as an academic exercise that would not materially affect the assessee. The Tribunal therefore declined to examine the jurisdictional challenge to the notices at that stage, noting that no consequential proceedings were pending and that the assessee would have liberty to seek recall of the order and press the ground if future proceedings warranted it. [Paras 3, 6, 7]

Adjudication of the legality of the section 153C notices was held to be unnecessary and the appeals were dismissed as academic, with liberty to recall the order if future proceedings arise.

Final Conclusion: Appeals dismissed as academic since the additions underpinning the section 153C notices were deleted by the Commissioner (Appeals) and the Revenue has not pursued further appeal; assessee granted liberty to seek recall should future adjudication render the issue live.

Scheme of Amalgamation under Section 230-232 - Dispensing with convening of shareholders' and creditors' meetings on consent - Notice and service on regulators and authorities - Public notice by advertisement - Affidavit of service - Filing of representations and rejoinders

Scheme of Amalgamation under Section 230-232 - Dispensing with convening of shareholders' and creditors' meetings on consent - Notice and service on regulators and authorities - Public notice by advertisement - Affidavit of service - Filing of representations and rejoinders - Directions for publication, service, filing of affidavits and timetable for representations and rejoinders in relation to the petition for sanction of the Scheme of Amalgamation. - HELD THAT: - The Tribunal recorded that meetings of equity shareholders and creditors of the transferor and transferee companies had been dispensed with by its earlier order in C.A. (CAA) No. 728/KB/2020 on the basis of written consents. The petition for sanction of the Scheme under Sections 230-232 was admitted for hearing and the Tribunal fixed the hearing on 13.09.2021. The Petitioners were directed to publish notice of hearing in specified English and Bengali newspapers not less than ten clear days before the hearing, and to serve notice together with accompanying documents on the Central Government through the Regional Director (Eastern Region), Registrar of Companies, Official Liquidator (High Court at Kolkata), the concerned Income Tax Assessing Officer along with the Chief Commissioner of Income Tax, and any other relevant sectoral regulators or authorities by hand, registered/speed post or e-mail within seven days of the order. The notice must state that any representation be filed before the Tribunal within thirty days of receipt, with a copy to the Petitioners, failing which no representation would be presumed. The Petitioners were directed to file an affidavit of service relating to newspaper publication and service on authorities at least fourteen days before the hearing and were permitted to file rejoinder affidavits dealing with objections of the authorities up to two days before the next date of hearing. A certified copy of the order may be issued on compliance with requisite formalities.

Hearing fixed for 13.09.2021 and procedural directions issued regarding publication, service on specified authorities, timelines for filing representations and rejoinders, and filing of affidavit of service.

Final Conclusion: The Tribunal admitted the petition for sanction of the Scheme of Amalgamation for hearing, fixed the hearing date and issued consequential directions for public notice, service on specified authorities, timelines for representations and rejoinders, filing of affidavit of service and issuance of certified copies upon compliance.

Insolvency resolution process costs - essential supplies during moratorium - priority of payments under resolution plan - binding effect of approved resolution plan

Insolvency resolution process costs - essential supplies during moratorium - binding effect of approved resolution plan - priority of payments under resolution plan - Whether lease rent, maintenance and water charges accruing during the CIRP period form part of insolvency resolution process costs and are payable by the Resolution Applicant under the approved resolution plan, and whether interest thereon is payable. - HELD THAT: - The Tribunal found that lease rent, maintenance and water charges for the period after initiation of CIRP are supplies which fall within the concept of insolvency resolution process costs as envisaged by Regulation 31 & 32 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 read with Section 5(13)(e) and Section 14(2) of the Code, and therefore must be addressed in the resolution process. The approved resolution plan (Clause 6.2) expressly provided that if actual CIRP cost exceeds the estimated amount, the Resolution Applicant (SPCFL) will pay the higher amount; that commitment was treated as binding. Although the RP had treated the appellant's claims as statutory dues and not part of CIRP costs and contended that no claim could be entertained after plan approval, the Tribunal noted that the Resolution Applicant itself made provision for operational and statutory claims in the plan and that the Adjudicating Authority approved the plan after receiving the RP's compliance. Applying the Code as a complete code, the Tribunal held that the Resolution Applicant is liable to discharge the principal amounts of the bills relating to the CIRP period in accordance with the plan, but the Tribunal limited the liability to principal amounts and excluded interest components from being treated as part of insolvency resolution process costs. [Paras 8, 9, 10]

The Resolution Applicant is liable to pay the principal amounts of lease rent, maintenance and water charges attributable to the CIRP period; interest components are not part of insolvency resolution process costs and are not ordered to be paid.

Final Conclusion: The appeal is partially allowed: the Resolution Applicant must pay the principal sums of the appellant's bills for the CIRP period as part of CIRP costs under the approved resolution plan; interest is excluded. The impugned order is modified accordingly; pending applications disposed of and interim orders vacated.

Clarification application as a disguised review - limitation of inherent powers under Rule 11 to revisit findings - interlocutory application under Rule 31 limited to pending matters - maintainability of post disposal clarification applications - distinction between approval and implementation of a resolution plan

Clarification application as a disguised review - maintainability of post disposal clarification applications - I.A. No. 915 of 2021 seeking clarification of this Tribunal's judgment is, in substance, a review/rehearing and is not maintainable as a clarification application. - HELD THAT: - The Tribunal, applying the principle in Delhi Administration v. Gurdip Singh Uban and its own precedents, held that an application styled as one for "clarification" which in reality seeks rehearing or review of the final judgment cannot be permitted. Parties cannot bypass review limitations by relabelling review applications as clarification or modification to obtain an oral hearing. The application filed by Vistra sought to revisit findings and conclusions already recorded, and therefore amounted to an impermissible attempt to reopen the disposed matter rather than a genuine request for clarification of an apparent error. Consequently, the I.A. was not maintainable. [Paras 24, 27, 28]

I.A. No. 915 of 2021 dismissed as not maintainable because it amounts to a review/rehearing disguised as a clarification.

Limitation of inherent powers under Rule 11 to revisit findings - interlocutory application under Rule 31 limited to pending matters - Rule 11 and Rule 31 of the NCLAT Rules cannot be invoked to revisit or review final findings of the Tribunal, and Rule 31 is confined to interlocutory applications in pending matters. - HELD THAT: - The Tribunal construed Rule 11 as declaratory of the Appellate Tribunal's inherent powers to meet the ends of justice or prevent abuse of process, but not as empowering the Tribunal to re examine or revisit findings of fact or merits of a disposed case except to correct an obvious error apparent on the face of the record. Similarly, Form NCLAT 2 and Rule 31 govern interlocutory applications in pending proceedings; they do not provide a vehicle for seeking clarification after the judgment has been delivered and the matter disposed. On the facts, the present application was filed after disposal and sought re examination of the merits rather than correction of a patent error, so neither Rule 11 nor Rule 31 afforded a basis for the relief sought. [Paras 23, 24, 26]

Rule 11 cannot be used to reopen or review the merits of the disposed appeal; Rule 31 is inapplicable to matters already disposed of, and neither rule supported the clarification sought.

Final Conclusion: The interlocutory application for clarification was dismissed as impermissibly seeking review/rehearing of the Tribunal's final judgment; Rule 11 and Rule 31 do not permit reopening of disposed matters, and no correction of an apparent facial error was found.

Admission of Section 9 application under Insolvency and Bankruptcy Code, 2016 - commencement of Corporate Insolvency Resolution Process (CIRP) - operational debt and proof of default - absence of dispute / non reply to demand notice - appointment of Interim Resolution Professional - public announcement and claims submission under Section 15 - declaration of moratorium and its prohibitions - supply of essential goods or services during moratorium - advance fee for Interim Resolution Professional

Admission of Section 9 application under Insolvency and Bankruptcy Code, 2016 - commencement of Corporate Insolvency Resolution Process (CIRP) - The Section 9 petition filed by the Operational Creditor is admitted and CIRP is ordered to commence. - HELD THAT: - The Adjudicating Authority, after hearing the applicant and perusing the record, was satisfied that the Operational Creditor had fulfilled the statutory stipulations under the Code and that default had occurred for which the Corporate Debtor was liable to pay. The Authority noted the absence of a reply to the demand notice and no evidence of dispute or payment, and therefore elected to admit the application and direct commencement of CIRP within the timelines prescribed by the Code. [Paras 5, 6]

Application admitted and CIRP ordered to commence.

Operational debt and proof of default - absence of dispute / non reply to demand notice - Operational Creditor proved default and there was no reply or contest to the demand notice indicating a dispute. - HELD THAT: - The record shows service of a demand notice to the Corporate Debtor and no reply or payment was produced during the proceedings. The Authority recorded that no dispute was shown to exist and that the Operational Creditor had discharged the evidentiary burden to demonstrate that default had occurred, thereby satisfying the threshold for admission under Section 9. [Paras 5]

Default established and no pre existing dispute found on the record.

Appointment of Interim Resolution Professional - public announcement and claims submission under Section 15 - An Interim Resolution Professional (IRP) is appointed, and directed to file consent, take charge, and make the statutory public announcement calling for claims. - HELD THAT: - Pursuant to admission, the Authority appointed the named IRP and directed him to submit his written consent and authorization in the prescribed form within three days. The IRP was further directed to take charge of the corporate debtor's management immediately and to cause the public announcement and call for submission of claims as prescribed under the Code so that the CIRP procedures may proceed. [Paras 7, 8]

IRP appointed with directions to file consent, take charge, and make public announcement for claims.

Declaration of moratorium and its prohibitions - supply of essential goods or services during moratorium - A moratorium is declared from the date of the order until completion of CIRP, with the statutory prohibitions and protection for supply of essential goods/services. - HELD THAT: - The Authority declared the moratorium operative from the date of the order till completion of CIRP and listed the statutory prohibitions on institution or continuation of suits, transfer or disposal of assets, enforcement of security, and recovery of property in possession of the corporate debtor. It also recorded that supply of essential goods or services shall not be terminated or suspended during the moratorium, subject to payment of current dues and applicable exceptions notified by the Central Government. [Paras 10, 11]

Moratorium declared with specified prohibitions and protection for essential supplies.

Advance fee for Interim Resolution Professional - The Operational Creditor is directed to pay an advance fee to the IRP, to be ratified later by the Committee of Creditors. - HELD THAT: - In exercise of its powers on admission, the Authority directed the Operational Creditor to deposit an advance fee for the IRP, with the direction that the same shall be subject to subsequent ratification by the Committee of Creditors when constituted during CIRP. [Paras 9]

Operational Creditor directed to pay advance fee to the IRP, subject to CoC ratification.

Final Conclusion: The Company Petition under Section 9 is admitted; CIRP is ordered to commence, an IRP is appointed with specified duties and interim directions (including public announcement and moratorium), and the Operational Creditor is directed to provide an advance fee to the IRP pending ratification by the Committee of Creditors.

Grant of bail under Section 439 CrPC - arrest procedure under Section 19 of the PMLA and corresponding Rules - role of Enforcement Directorate as complainant and investigator - validity of twin-conditions for bail under Section 45(1) of the PMLA after legislative amendment - presumption of constitutionality of amended statutory provision - judicial appraisal of gravity of offence, prima facie case and flight risk in bail adjudication

Arrest procedure under Section 19 of the PMLA and corresponding Rules - Whether arrest of petitioner Bimal Jain was vitiated for non-compliance with Section 19 PMLA and the Rules. - HELD THAT: - The Court held that Section 19 PMLA procedures were not required to be followed as the arrest of Bimal Jain was effected in execution of non-bailable warrants issued by the Special Judge, PMLA after cognizance of the prosecution complaint filed by the Enforcement Directorate. Since the learned Special Judge took cognizance and issued NBWs, there was no occasion to separately comply with the procedure envisaged in Section 19 and the Rules for arrest and forwarding of material to the adjudicating authority in a sealed envelope. The complaint filed by the Enforcement Directorate and subsequent cognizance prima facie indicated reasons to believe the accused guilty of offences under the PMLA framework. [Paras 10]

Arrest not rendered illegal for non-compliance of Section 19 PMLA in the circumstances where arrest followed issuance/execution of NBWs after cognizance.

Role of Enforcement Directorate as complainant and investigator - Whether prosecution is vitiated because the Enforcement Directorate acted as both complainant and investigating agency. - HELD THAT: - Relying on the reasoning in Mukesh Singh (as referred), the Court observed that merely because the informant/complainant is associated with the investigation does not, by itself, vitiate the investigation or entitle the accused to acquittal. The question of bias or prejudice depends on the facts and circumstances of each case. The Court applied this principle to hold that the Enforcement Directorate being the complainant did not automatically render the investigation invalid. [Paras 11]

No automatic vitiation of investigation merely because Enforcement Directorate is complainant; issue of bias is fact-sensitive and not established here.

Validity of twin-conditions for bail under Section 45(1) of the PMLA after legislative amendment - presumption of constitutionality of amended statutory provision - Whether the twin-conditions in Section 45(1) PMLA (as struck down in Nikesh Tarachand Shah) continue to entitle petitioners to bail following the 2018 amendment. - HELD THAT: - The Court noted that the Supreme Court in Nikesh Tarachand Shah had declared the pre-amendment twin-conditions unconstitutional, but Parliament subsequently amended Section 45(1) by the Finance Act, 2018, substituting the earlier text. The Supreme Court in later decisions has taken judicial note of the amendment. The High Court observed that the Legislature has the power to cure defects identified by courts and that once Parliament amends a provision to remove the defect, the presumption of constitutionality applies to the amended provision. Consequently, the earlier infirmity does not automatically revive entitlement to bail under the pre-amendment reasoning. [Paras 12, 13, 19, 20]

The challenge to Section 45(1) based on pre-amendment infirmity does not avail the petitioners in view of the legislative amendment and the presumption of constitutionality of the amended provision.

Grant of bail under Section 439 CrPC - judicial appraisal of gravity of offence, prima facie case and flight risk in bail adjudication - Whether petitioners should be granted bail having regard to the investigation, magnitude of alleged money laundering, prima facie involvement and apprehension of flight risk. - HELD THAT: - The Court examined the investigation material: alleged large-scale conspiracy involving forged/fabricated documents, incorporation and operation of numerous paper entities, rotation of funds through shell companies, international Hawala transactions and accommodation entries, extensive bank-account and company examinations, foreign enforcement actions, and Red Corner Notices against a petitioner. The Court noted allegations of evasion of summons, non cooperation, and steps taken to conceal identity and operations. Considering these factors and applying the parameters under Section 439 CrPC, the Court found strong prima facie evidence, gravity of offences, continuing criminal conduct allegations and real risk of flight abroad if released. On this assessment, the Court was not inclined to enlarge the petitioners on bail. [Paras 24, 26, 27, 28, 29]

Bail applications dismissed; petitioners not entitled to be enlarged on bail in view of prima facie case, gravity of alleged offences and apprehension of flight risk.

Final Conclusion: Bail petitions of both applicants dismissed: arrest in execution of NBWs was not vitiated by non-compliance with Section 19 PMLA; Enforcement Directorate acting as complainant does not automatically vitiate investigation; the 2018 amendment cures defects in Section 45(1) and attracts presumption of constitutionality; on application of Section 439 CrPC parameters the petitioners are not entitled to bail given the gravity of alleged offences, prima facie evidence and flight risk.

Medical ground for grant of bail - bail in economic offences - money laundering as proceeds of crime - scheduled offence under the PMLA - custodial medical treatment - cooperation with court-appointed administrator / competent authority - conditions of bail (personal bond, sureties, surrender of passport, non-alienation of property) - non-tampering with evidence and witnesses

Medical ground for grant of bail - bail in economic offences - custodial medical treatment - Whether the petitioner, though accused in serious economic offences including scheduled offence under the PMLA, is entitled to bail on medical grounds. - HELD THAT: - The High Court found on the record that the petitioner, a founder/director of a cooperative society alleged to have collected large deposits and reinvested funds (thereby attracting money laundering allegations), suffers from multiple significant medical conditions supported by prison medical reports and hospital records. While noting that ordinarily bail in economic offences involving large public funds is disfavoured, the Court held that the medical condition of the accused is a distinct and compelling ground for temporary release where provision of adequate treatment in custody is not feasible and no prejudice would be caused to the prosecution. The Court also observed that the matter is under active monitoring by the Division Bench, administrators and a competent authority have been appointed, and properties have been seized, reducing the risk of prejudice to the prosecution. Applying these considerations, the Court allowed bail on medical grounds without adjudicating merits of the economic allegations. [Paras 11, 12, 13, 14]

Petitioner is entitled to bail on medical grounds despite the seriousness of the economic offences; release ordered subject to conditions.

Conditions of bail (personal bond, sureties, surrender of passport, non-alienation of property) - non-tampering with evidence and witnesses - cooperation with court-appointed administrator / competent authority - The terms and conditions upon which bail is to be granted to the petitioner. - HELD THAT: - The Court imposed specific conditions tailored to mitigate risk to the prosecution and ensure the petitioner's attendance and cooperation. Conditions include execution of personal bonds with specified sureties to the satisfaction of the trial courts, regular appearance, prohibition on tampering with evidence or threatening witnesses, surrender of passport, restriction on leaving the jurisdiction without prior permission, prohibition on alienation of properties without court permission, and mandatory cooperation with the Administrator and Competent Authority appointed under the KPID Act. The trial courts are directed to verify sureties' whereabouts before accepting bonds.

Bail granted subject to the enumerated conditions; trial courts to ensure compliance.

Final Conclusion: Criminal petitions allowed; petitioner directed to be released on bail in the two criminal matters on medical grounds, subject to specified conditions safeguarding prosecutorial interests and requiring cooperation with appointed administrators and authorities.

Summary order. Civil appeal dismissed; the view of the first authority was affirmed by the Customs, Excise and Service Tax Appellate Tribunal and the High Court.

Summary order. Civil Appeal dismissed; delay condoned; impugned order dated 14 January 2020 of the Customs, Excise & Service Tax Appellate Tribunal, Allahabad upheld.

Special Leave Petition under Article 136 - discretionary jurisdiction of the Supreme Court - dismissal of petition

Special Leave Petition under Article 136 - discretionary jurisdiction of the Supreme Court - Supreme Court declined to entertain the Special Leave Petition under Article 136 and dismissed the petition. - HELD THAT: - The Bench recorded that it was not inclined to entertain the Special Leave Petition filed under Article 136 of the Constitution. No reasons or legal analysis are articulated in the order; the Court's exercise of discretionary jurisdiction resulted in refusal to admit the petition for consideration on merits. The order also disposed of any pending applications.

Special Leave Petition dismissed; petition not entertained under Article 136 and pending applications disposed of.

Final Conclusion: The Special Leave Petition under Article 136 was refused entertainment and dismissed; all pending applications stand disposed of.

Extension of benefit of precedent - limitations of writ jurisdiction in adjudicating disputed facts - adjudication of disputed facts by Original/Appellate Authority - entertainment of appeal and condonation of delay by Appellate Authority

Extension of benefit of precedent - Margadarshi Chit Funds - Benefit conferred by the Supreme Court in Margadarshi Chit Funds is to be extended to the petitioner. - HELD THAT: - The Court held that the benefits which the Supreme Court recognized in Margadarshi Chit Funds are applicable to the writ petitioner. The learned Senior Standing Counsel informed the Court that such benefits have already been extended in favour of the petitioner and the Court observed that those benefits are to be extended. The decision on entitlement to the precedent-based benefit was treated as a matter capable of being applied in the petitioner's favour.

The benefits conferred by the Supreme Court in Margadarshi Chit Funds are to be extended to the petitioner.

Limitations of writ jurisdiction in adjudicating disputed facts - adjudication of disputed facts by Original/Appellate Authority - Disputed factual allegations in the impugned original order and show cause notices cannot be resolved in writ proceedings and require adjudication through appeal proceedings. - HELD THAT: - The Court held that matters involving disputed facts, documents and evidence cannot be adjudicated in writ jurisdiction. Those issues must be considered by the Original Authority or the Appellate Authority through the statutory appellate process. The petitioner was directed that if it wishes to challenge the original order or the show cause notices, it must prefer an appeal and obtain adjudication on merits by the appropriate authority.

Disputed factual issues to be adjudicated by the Original/Appellate Authority through appeal, not in writ proceedings.

Entertainment of appeal and condonation of delay by Appellate Authority - Appellate Authority shall condone any delay and entertain the petitioner's appeal filed within a specified period and decide the issues on merits. - HELD THAT: - The Court granted the petitioner liberty to file an appeal within four weeks in the prescribed format and complying with the statute and rules. The Appellate Authority was directed that upon receipt of such appeal it shall condone delay, if any, entertain the appeal and adjudicate the issues on merits in accordance with law after affording opportunity to the petitioner, and pass final orders expeditiously.

Petitioner permitted to file appeal within four weeks; Appellate Authority to condone delay, entertain the appeal and decide issues on merits.

Final Conclusion: Writ petitions disposed: the Supreme Court precedent (Margadarshi Chit Funds) is to be extended to the petitioner; disputed factual issues cannot be decided in writ proceedings and must be ventilated by appeal; petitioner permitted four weeks to file appeal and Appellate Authority directed to condone delay, entertain and decide the appeal on merits.

Requirement to consider grounds of appeal - Remand for fresh consideration - Judicial review of appellate tribunal orders - State not to be enriched at the expense of citizen - Appeal under Section 35G(2) of the Central Excise Act, 1944

Requirement to consider grounds of appeal - Remand for fresh consideration - Judicial review of appellate tribunal orders - Impugned common order of the CESTAT set aside and matter remanded for fresh consideration because the Tribunal did not address the grounds raised by the Revenue. - HELD THAT: - The Tribunal allowed the refund appeals by referring to the general principle that the State must not be enriched at the expense of a citizen, but it failed to examine or adjudicate the specific grounds of appeal advanced by the Revenue against the Commissioner (Appeals)'s order. The absence of any discussion on those grounds meant the Tribunal did not perform the adjudicative task required of it on the admitted substantial questions of law. In such circumstances the High Court interfered with the Tribunal's order, set it aside and remanded the matters to the Tribunal for fresh consideration in accordance with law, directing that notice be issued to the first respondent and that the Tribunal deal with all grounds canvassed by the Revenue. The substantial questions of law framed at admission were left open for determination by the Tribunal on reconsideration. [Paras 5, 6, 7]

Appeals allowed; the common impugned order of the Tribunal is set aside and the matters are remanded to the Tribunal for fresh consideration after issuing notice to the first respondent; substantial questions of law left open.

Final Conclusion: The High Court allowed the Revenue's appeals, set aside the CESTAT's common order for failure to consider the Revenue's grounds, and remanded the matters to the Tribunal for fresh adjudication after issuing notice to the respondent; the substantial questions of law remain open.

Interest on delayed refund - consequential relief flowing from allowance of refund - premature appeal for non-implementation of appellate order - implementation of appellate order by the department

Interest on delayed refund - consequential relief flowing from allowance of refund - Whether sanction of interest on delayed refund arises automatically as consequential relief when a refund claim is allowed on appeal and whether absence of an express mention of interest in the appellate order precludes its grant. - HELD THAT: - The Tribunal observed that the Commissioner (Appeals) had allowed the refund claim and granted consequential relief, although the appellate order did not expressly record a finding on interest. The court noted that the original adjudication recorded certain deficiencies which were thereafter addressed by the appellant and that the only substantive ground for rejection related to non-compliance with the notification, a matter dealt with and overcome on appeal. Given that the appellate authority allowed the refund with consequential relief, the legal position is that interest on delayed payment is a statutory consequence of sanctioning the refund and falls within those consequential reliefs even if not separately articulated in the appellate order. Therefore, the silence of the appellate order regarding interest does not negate the entitlement to interest where refund has been allowed.

Sanction of interest on the delayed refund is a statutory consequence of allowance of the refund and is covered by the consequential relief granted by the Commissioner (Appeals), notwithstanding the appellate order's silence on interest.

Premature appeal for non-implementation of appellate order - implementation of appellate order by the department - Whether the present appeal is maintainable where the refund has been allowed on appeal but not yet implemented by the department, and what remedy is appropriate. - HELD THAT: - The Tribunal held that because the Commissioner (Appeals) has allowed the refund with consequential relief, the proper course is to seek implementation of that appellate order from the department rather than to pursue the present appeal. The appellant had an available and appropriate remedy by filing an application for implementation of the appellate order, which the counsel conceded had been filed. In these circumstances the Tribunal found no cause of action to entertain the appeal and treated the appeal as premature. The decision instructs the appellant to pursue the departmental implementation route and grants liberty to do so.

The appeal is premature and not maintainable at this stage; the appellant must pursue implementation of the Commissioner (Appeals) order with the department, and liberty to do so is granted.

Final Conclusion: The appeal was disposed of as premature since the refund was allowed by the Commissioner (Appeals) with consequential relief; interest on the delayed refund is a statutory consequence covered by that relief despite the appellate order being silent on interest, and the appellant is directed to seek implementation of the appellate order from the department (liberty granted).

Claim for refund or rebate of duty on export - Limitation period under Section 11B - Rule 18 of the Central Excise Rules, 2002 - Notification No.19/2004-C.E.(N.T.) and its amendment by Notification No.18/2016-C.E.(N.T.) - Substantive statutory provision prevailing over rules or notifications - Application of the law as declared in Uttam Steel

Limitation period under Section 11B - Rule 18 of the Central Excise Rules, 2002 - Notification No.19/2004-C.E.(N.T.) and its amendment by Notification No.18/2016-C.E.(N.T.) - Substantive statutory provision prevailing over rules or notifications - Application of the law as declared in Uttam Steel - Claims for rebate in respect of exports made during August 2015 to March 2016 filed beyond one year from the relevant date are time-barred under Section 11B and liable to be rejected. - HELD THAT: - Section 11B expressly requires an application for refund of excise duty to be made before the expiry of one year from the relevant date. Rule 18 and Notification No.19/2004 did not prescribe any separate time-limit for presenting rebate claims; therefore the limitation in Section 11B governs. The 2016 amendment to Notification No.19/2004 merely inserted an express reference to the period prescribed by Section 11B and was a reiteration of the statutory requirement rather than creating a new obligation. The Court applied the principle that a substantive statutory provision (Section 11B) cannot yield to secondary subordinate instruments and followed the legal position declared by the Supreme Court in Uttam Steel. On the facts, the rebate applications were filed beyond the one-year period and were correctly held to be time-barred by the Single Judge. [Paras 12, 13, 19]

Appeals dismissed; rebate claims filed beyond one year are barred by Section 11B and rejection upheld.

Final Conclusion: The High Court dismissed the appeals, holding that rebate applications in respect of exports during August 2015 to March 2016, filed after the one year period prescribed by Section 11B, were time barred; Rule 18 and Notification No.19/2004 do not override the statutory limitation and the 2016 amendment merely reiterated the statutory position.

Cenvat credit on the basis of Bill of Entry in name of supplier - availability of credit to job worker - importer's declaration for delivery to job worker - endorsement of Bill of Entry dispensed by Public Notice - acceptability of importer's endorsement in lieu of customs officer's endorsement

Cenvat credit on the basis of Bill of Entry in name of supplier - availability of credit to job worker - importer's declaration for delivery to job worker - Appellant entitled to Cenvat credit on the strength of Bill of Entry issued in the name of the principal supplier where that Bill of Entry was accompanied by a declaration by the importer authorizing delivery to the appellant for job work. - HELD THAT: - The Tribunal found that the department's case was confined to the question whether credit could be denied solely because the Bill of Entry bore the name of the principal importer (M/s Marico Limited), notwithstanding an accompanying declaration authorizing delivery to the appellant for job work. There was no dispute as to receipt or use of the imported inputs by the appellant for job work. The Tribunal relied on its earlier decision in Trichem Lab (Bombay) Pvt. Ltd., where it was held that an importer's declaration endorsing delivery to a job worker sufficed to permit availment of credit by the job worker. The Circular permitting availment of credit on endorsed Bills of Entry and the subsequent Public Notice dispensing with the requirement of customs officer endorsement were held to demonstrate that the importer's declaration/endorsement is adequate. Applying that principle, the Tribunal concluded that merely because the Bill of Entry was in the name of the principal importer, credit could not be denied when the Bill was supported by a declaration authorizing delivery to the job worker.

Impugned order set aside; appellant entitled to Cenvat credit on the basis of the Bill of Entry accompanied by the importer's declaration and appeal allowed.

Final Conclusion: The appeal is allowed: the appellant may avail Cenvat credit on the basis of a Bill of Entry in the principal importer's name where that Bill of Entry is supported by the importer's declaration authorizing delivery to the job worker, and denial of credit solely for the Bill of Entry bearing the importer's name was unwarranted.

Limitation for refund claims where deposit made under protest - Applicability of proviso excluding one-year limitation where duty deposited under protest - Pre-deposit made during investigation treated as deposit under protest - Relevant date for reckoning limitation - date of final adjudication - Proof of filing date and effect of departmental acknowledgement

Pre-deposit made during investigation treated as deposit under protest - Applicability of proviso excluding one-year limitation where duty deposited under protest - Whether Section 11B one-year limitation is attracted to the refund claim where the amount was deposited during investigation and under protest. - HELD THAT: - The Tribunal accepted that the amount was deposited at the stage of investigation. Reliance was placed on precedent treating deposits made during investigation as pre-deposits under protest. The second proviso to the statutory limitation (as quoted in the judgment) exempts claims where duty (and interest, if any) is deposited under protest from the one-year limitation. Applying that provision, the adjudicating authority erred in invoking Section 11B to hold the refund time-barred. The Court therefore held that Section 11B's one-year bar did not apply to the present refund claim. [Paras 7, 8]

Section 11B one-year limitation does not apply because the deposit was made under protest at the stage of investigation; the adjudicating authority wrongly invoked Section 11B.

Relevant date for reckoning limitation - date of final adjudication - Limitation for refund claims where deposit made under protest - Whether, if limitation were applicable, the period must be reckoned from the date of deposit or from the date of the final order of the Tribunal. - HELD THAT: - The Tribunal observed that the appellant's entitlement to refund was finally determined by the Tribunal's order dated 10.11.2017. Even on the Department's chronology, the relevant date for computing the one-year period (if it were applicable) is the date of the final order which fixed the entitlement, not the earlier date of deposit. Consequently, limitation (where it might apply) must be reckoned from the date of the final adjudication. [Paras 9]

The relevant date for reckoning any limitation is the date of the final order (10.11.2017), not the date of deposit.

Proof of filing date and effect of departmental acknowledgement - Limitation for refund claims where deposit made under protest - Whether the refund application was filed within the permissible period and which filing date is to be accepted. - HELD THAT: - The appellant produced a document, acknowledged by the Department, showing the refund application was filed on 9.7.2018. The Department relied on a later date (10.7.2019) but did not produce any supporting document on record. The Tribunal accepted the appellant's acknowledged filing as the operative date. Calculated from the Tribunal's final order date of 10.11.2017, the acknowledged filing of 9.7.2018 fell within one year. On that basis the refund application cannot be treated as time-barred. [Paras 9, 10]

The acknowledged filing dated 9.7.2018 is accepted as the date of application; the refund application is within one year from the Tribunal's final order and is not time-barred.

Final Conclusion: The adjudicating authority erred in treating the refund claim as time-barred under Section 11B. The deposit was made under protest during investigation and the proviso excludes the one-year limitation; alternatively, the relevant date for limitation is the Tribunal's final order dated 10.11.2017, and the refund application (acknowledged on 9.7.2018) was filed within one year. The impugned order is set aside and the appeal is allowed.

Exemption from tax - general exemption - conditional exemption - aids for physically disadvantaged persons as notified by the Government - interpretation of exemption clause under Section 8 of the TNGST Act - Third Schedule to the TNGST Act - application of State exemption to inter State sales under Section 8 of the CST Act

Interpretation of exemption clause under Section 8 of the TNGST Act - Third Schedule to the TNGST Act - aids for physically disadvantaged persons as notified by the Government - general exemption - Whether Intra ocular lenses are exempted from tax under Item No.2 of Part B of the Third Schedule to the TNGST Act and whether that exemption is a general exemption or a conditional one. - HELD THAT: - The Court examined Section 8 of the TNGST Act read with the Third Schedule and the notifying G.O. which included Intra ocular lenses in the list of aids for physically disadvantaged persons. Item No.2 of Part B does not itself prescribe conditions or restrict the exemption to particular modes of sale; it refers to aids for physically disadvantaged persons as notified by the Government. The Third Schedule commences as goods exempted by Section 8 and, in absence of any express restriction or condition in the item or notification, the exemption must be treated as a general exemption. Technical considerations about implantation or whether the goods can be sold directly to a person do not import implied conditions into the statutory exemption. Consequently, the respondents' contention that the exemption operates only when the intra ocular lens is sold directly to a physically disadvantaged person was rejected as not traceable to the statute or notification. [Paras 18, 19, 20, 21, 23]

Intra ocular lenses notified under Item No.2 of Part B of the Third Schedule are exempt from tax under the TNGST Act and the exemption is a general one not limited by an implied requirement of direct sale to the physically disadvantaged person.

Application of State exemption to inter State sales under Section 8 of the CST Act - general exemption - exemption from tax - Whether the general exemption granted under the TNGST Act in respect of Intra ocular lenses extends to inter State sales so as to preclude levy of tax under the CST Act. - HELD THAT: - The Court considered the scheme of the CST Act, noting that the State law exemption, if it is a general exemption, is to be applied to sales in the course of inter State trade under the Central Act. Having held that the TNGST exemption in Item No.2 Part B is general and not conditional, the Court concluded that the exemption must also operate for inter State sales pursuant to the CST Act's compatibly worded provision. Therefore, tax cannot be levied on inter State sales of intra ocular lenses which are covered by the State notification. [Paras 8, 9, 23]

The State exemption for intra ocular lenses extends to inter State sales under the CST Act and such sales are not liable to central sales tax where the goods are generally exempt under the State law.

Exemption from tax - general exemption - Whether the exemption recognized under the TNGST Act is to be given effect under the TNVAT Act where relevant. - HELD THAT: - The Court observed that the exemption denied under the TNVAT Act must be extended to the extent that the TNGST Act grants exemption. Having construed the TNGST exemption as general, the Court held that the same principle applies for the purposes of VAT law as dealt with in these petitions. [Paras 25]

The exemption determined under the TNGST Act in respect of intra ocular lenses is to be extended for the purposes of the TNVAT Act as dealt with in this judgment.

Final Conclusion: All impugned orders demanding tax on sales of intra ocular lenses were quashed; intra ocular lenses notified under Item No.2 Part B of the Third Schedule to the TNGST Act are generally exempt from tax and that exemption applies to inter State sales under the CST Act and to the extent indicated under the TNVAT Act. The writ petitions are allowed; no costs.