TaxTMI Updates e-Newsletter
Aug 09,2021

Opportunity of hearing - sub-section (4) of Section 75 of the CGST Act, 2017 - principles of natural justice - remand for fresh consideration - alternative remedy by way of appeal under Section 107 of the CGST Act, 2017

Opportunity of hearing - sub-section (4) of Section 75 of the CGST Act, 2017 - principles of natural justice - remand for fresh consideration - Impugned assessment order set aside for failure to afford opportunity of personal hearing as mandated by sub-section (4) of Section 75 of the CGST Act, 2017. - HELD THAT: - The Assessing Authority issued a notice and received a written reply from the assessee but, according to the impugned order, merely referred to the objections and stated they were not considered before determining liability as proposed in the show cause notice. Sub-section (4) of Section 75 requires that an opportunity of hearing be granted where an adverse decision is contemplated. The failure to afford such hearing constituted a breach of the statutory mandate and a patent violation of principles of natural justice. In view of this breach, the Court set aside the assessment order and remanded the matter to the Assessing Authority to consider the issue afresh after affording the petitioner an opportunity of hearing. [Paras 7, 8]

Assessment order set aside and matter remanded to the Assessing Authority for fresh consideration after affording opportunity of hearing to the petitioner.

Alternative remedy by way of appeal under Section 107 of the CGST Act, 2017 - principles of natural justice - Availability of alternative remedy by appeal under Section 107 does not preclude writ relief where there is a statutory breach of the mandatory hearing requirement. - HELD THAT: - The respondents argued that the petitioner had an alternative remedy by way of appeal under Section 107 of the CGST Act, 2017. The Court rejected this contention because the Assessing Authority's non-compliance with the mandatory hearing provision and the concomitant violation of natural justice warranted exercise of writ jurisdiction. The existence of an appellate remedy did not cure the substantive denial of the statutory opportunity of hearing. [Paras 5, 7]

Contention as to availability of alternative remedy under Section 107 rejected; writ petition allowed on the ground of statutory non-compliance.

Final Conclusion: Writ petition allowed; order of assessment dated 21.09.2020 is set aside and the matter is remanded to the Assessing Authority for fresh adjudication after affording the petitioner an opportunity of hearing; no order as to costs.

Regular bail - presumption of innocence - investigation pending - wrongful availment of input tax credit - issuing invoices without supply - statement recorded under Section 70 of the CGST Act - cognizable offence under the CGST Act - non-interference with investigation - cooperation with investigation

Regular bail - investigation pending - presumption of innocence - wrongful availment of input tax credit - issuing invoices without supply - Grant of regular bail to the petitioner who is the sole accused in the GST offence - HELD THAT: - The Court found that although serious allegations are levelled against the petitioner for issuing invoices/e-way bills without actual supply and allegedly wrongfully availing input tax credit, the investigation remains incomplete and there has been no material progress since the earlier dismissal of bail; the petitioner has been in custody since 02.11.2020. Applying the settled principle that guilt is not presumed and noting the need for the Investigating Officer to collect further evidence and examine the forward chain of recipients, the Court considered the balance of liberty and investigative requirements. In view of the pending investigation, the Court concluded that bail should be granted subject to conditions that protect the integrity of the investigation: execution of personal bond with sureties, weekly reporting to the Investigating Officer, cooperation in furnishing documents and information, and a prohibition against interfering with the investigation. [Paras 11, 12, 13, 14]

Petition allowed; regular bail granted on conditions of personal bond with two sureties, weekly reporting, cooperation with the Investigating Officer, and non-interference with the investigation.

Final Conclusion: The Criminal Petition is allowed and regular bail is granted to the petitioner on specified conditions pending completion of the investigation and filing of the charge sheet.

Validity of invoking repealed provisions of Section 148 of the Income Tax Act - Validity of Explanation A(a) of Notification No. 20/21 under the Taxation And Other Laws (Relaxation And Amendment Of Certain Provisions) Act, 2020 - Interim restraint on action pursuant to notice pending adjudication

Validity of invoking repealed provisions of Section 148 of the Income Tax Act - Validity of Explanation A(a) of Notification No. 20/21 - Petition challenging respondents' reliance on repealed provisions of Section 148 and Explanation A(a) of Notification No. 20/21 was entertained and notice issued; merits not adjudicated. - HELD THAT: - The Court recorded that despite the amended Income Tax Act having come into force from 01.04.2021, the respondents issued a notice dated 07.06.2021 purportedly invoking provisions of Section 148 which the petitioners contend are repealed, and challenged the validity of Explanation A(a) of Notification No. 20/21. Having noted that similar challenge is pending in another petition where notice was issued, the Court issued notice in the present petition to the respondents and the Attorney General of India for consideration on the returnable date. No decision was taken on the substantive validity of the invocation or the notification; only interim protective relief was granted.

Notice issued and the petition admitted for consideration; merits reserved for adjudication on returnable date.

Interim restraint on action pursuant to notice pending adjudication - Whether action could be taken by respondents pursuant to the impugned notice dated 07.06.2021 pending adjudication. - HELD THAT: - The Court directed that until the returnable date, no further action shall be taken based on the impugned notice dated 07.06.2021. This constitutes an interim protective order preserving the petitioners' position until the matter is heard on the returnable date specified by the Court.

Respondents restrained from taking any further action pursuant to the impugned notice until the returnable date.

Final Conclusion: The writ petition was admitted and notice issued; respondents and the Attorney General directed to appear on the returnable date and, meanwhile, the respondents were restrained from taking any further action pursuant to the notice dated 07.06.2021.

Disallowance of depreciation on account of non business/personal use under Section 38(2) - addition on account of differential cost of construction between 80IB and non 80IB projects - deduction for loss on embezzlement where amount is irrecoverable and accounted for in sales - allocation of profits between 80IB eligible and non eligible projects

Disallowance of depreciation on account of non business/personal use under Section 38(2) - Whether depreciation claimed on motor cars used partly for personal purposes should be disallowed and, if so, to what extent. - HELD THAT: - The Tribunal accepted that the partnership firm used the vehicles for personal purposes and had itself disallowed a sum towards personal travel. Applying the principle under Section 38(2) that depreciation attributable to non business use is to be disallowed, the Tribunal held that some disallowance was justified. However, having regard to the facts and circumstances of the case and the voluntary disallowance already made by the assessee, it was reasonable to restrict the additional disallowance to 10% of the depreciation (instead of the 20% applied by the Assessing Officer), to operate in addition to the Rs. 50,000 already offered by the assessee. [Paras 3]

AO's disallowance sustained in principle but reduced to 10% of depreciation in addition to the Rs. 50,000 offered by the assessee.

Addition on account of differential cost of construction between 80IB and non 80IB projects - allocation of profits between 80IB eligible and non eligible projects - Whether an addition could be made to income by computing a differential in cost of construction per sq.ft. between an 80IB project and a non 80IB project and multiplying the difference by the constructed area. - HELD THAT: - The AO accepted the assessee's explanations for higher profit in the 80IB unit relating to land cost and sale rate but made an addition based on a nominal difference of Rs.48 per sq.ft. (3.23%) in construction cost between the projects and multiplied that differential by the area to compute the addition. The Tribunal observed that the difference was small, could be explained by factors such as quality of construction, and that the assessee had furnished detailed construction cost particulars which were not shown to be faulty nor were the books rejected. The Tribunal held that the simplistic plus minus mechanistic computation adopted by the AO/CIT(A) could not be sustained and deleted the addition. [Paras 5]

Addition on account of differential construction cost deleted.

Deduction for loss on embezzlement where amount is irrecoverable and accounted for in sales - Whether the firm was entitled to deduct loss on account of embezzlement where a marketing officer collected cash, admitted non handover, a police complaint was lodged, recoveries were partial and the balance was treated in the books as debited to loss on embezzlement after having been included in sales. - HELD THAT: - The Tribunal examined documentary evidence including signed admissions by the employee of amounts collected but not remitted, entries in party accounts and the police complaint. The Tribunal noted that the amounts embezzled had been included in sales and subsequently debited to a loss on embezzlement account; partial recoveries had been made but the balance remained unrecovered and the whereabouts of the employee were unknown. On these facts the Tribunal concluded the embezzled amount was irrecoverable and therefore allowable as a deduction, subject to the condition that any future recovery would be offered to tax. [Paras 7]

Addition disallowed and deduction for the embezzled amount allowed; any future recovery to be taxed when received.

Final Conclusion: The appeal is partly allowed: the disallowance of depreciation for personal use is reduced (additional disallowance limited to 10% of depreciation over the Rs. 50,000 offered), the addition based on differential construction cost between 80IB and non 80IB projects is deleted, and the loss on account of embezzlement is allowed as a deduction subject to taxation of any future recovery.

Deduction under section 10AA - write back of unclaimed expenses - export turnover - nexus between accrual and export business - brought forward business losses and unabsorbed depreciation - stage of determination of profits of the eligible undertaking prior to Chapter VI adjustments - verification of tax deducted at source credit

Write back of unclaimed expenses - deduction under section 10AA - nexus between accrual and export business - Whether amounts representing write back of unclaimed balances are to be included for computing deduction under section 10AA as export-related income. - HELD THAT: - The Tribunal found that the amounts written back in the year under appeal accrued to the assessee due to its export business and there is a direct nexus between the write back and the export operations. It was an admitted fact that the corresponding expenses in the earlier year related to export business and were reduced while computing deduction under section 10AA for that earlier year. The revenue did not contend that the written back amounts had no relation to export business. Consequently, the write back could not be excluded from the computation of deduction under section 10AA and the authorities below were incorrect in reducing the section 10AA deduction by that amount. [Paras 10]

Write back of unclaimed balances is part of income attributable to export business and must be considered for computing deduction under section 10AA; the deduction cannot be reduced on the ground urged by Revenue.

Brought forward business losses and unabsorbed depreciation - deduction under section 10AA - stage of determination of profits of the eligible undertaking prior to Chapter VI adjustments - Whether brought forward business losses and unabsorbed depreciation of the eligible undertaking must be set off against profits of the undertaking before allowing deduction under section 10AA. - HELD THAT: - Applying the principle in Yokogawa India Ltd., the Tribunal held that the computation of profits eligible for deduction under section 10AA is to be made at the level of the eligible undertaking immediately after determining its profits and gains. The provisions for set off and carry forward contained in Chapters VI (Sections 70, 72 and 74) are not to be applied prematurely at that stage. Since section 10AA/10A treats the deduction as pertaining to the undertaking, brought forward losses and unabsorbed depreciation of the undertaking should not be reduced from the undertaking's profits before granting the section 10AA deduction. The Tribunal therefore accepted the assessee's contention and allowed grounds challenging the adjustment made by the CIT(A). [Paras 11, 12]

Brought forward business losses and unabsorbed depreciation of the eligible undertaking are not to be set off against the undertaking's profits before computing deduction under section 10AA; the assessee's claim on this point is allowed.

Verification of tax deducted at source credit - Whether the claim for credit of tax deducted at source raised by the assessee should be examined and allowed if found correct. - HELD THAT: - Although the CIT(A) had held that the TDS credit issue did not arise from the order under appeal, the Tribunal observed that once the assessee raised the claim the Assessing Officer should verify the factual position. The Revenue's representative conceded that the AO may verify the claim. The Tribunal directed the Assessing Officer to verify the tax credit claimed and, if verified, to allow the credit to the assessee. [Paras 13]

Direct the Assessing Officer to verify the claimed TDS credit and allow it if found correct.

Final Conclusion: The appeal is allowed: the Tribunal held that the write back of unclaimed expenses must be included for computing deduction under section 10AA, that brought forward losses and unabsorbed depreciation of the eligible undertaking cannot be set off before allowing section 10AA deduction, and directed verification and grant of the claimed TDS credit if established by the Assessing Officer.

Addition based on uncorroborated third-party statements - corroboration requirement for making additions - relinquishment of title by execution of agreement to sell - no addition on assumptions, surmises or conjectures - requirement of evidence to attribute receipt to vendor

Addition based on uncorroborated third-party statements - corroboration requirement for making additions - requirement of evidence to attribute receipt to vendor - no addition on assumptions, surmises or conjectures - relinquishment of title by execution of agreement to sell - Validity of the addition of undisclosed sale consideration of Rs. 5,31,58,400/- in the hands of the assessee - HELD THAT: - The Tribunal examined whether the Assessing Officer and the CIT(A) could sustain an addition of alleged 'on-money' paid at the time of sale to the assessee. The Tribunal found from the sale deed and earlier Development Agreement that the assessee had relinquished rights in the property in favour of Thakkars Developers Ltd., and the agreement/Agreement to Sale showed that consideration was paid to Thakkars Developers Ltd. Consequently there was no prima facie reason to infer that any cash over-and-above the registered consideration was paid to the assessee. The statements of directors of the purchaser (SPPL) did not identify the payee; on cross-examination they stated the broker finalised terms, and did not attribute payment to the assessee. The Tribunal held that additions founded solely on third party statements and notings on impounded loose sheets, without independent corroborative material, are unsustainable. Reliance was placed on settled authorities that additions cannot be made on mere assumptions, suspicion, conjecture or uncorroborated notings. Because the AO's conclusions were based on presumptions and the notings did not conclusively show payment to the assessee, the addition was to be deleted. [Paras 9, 10, 11, 12]

The addition of Rs. 5,31,58,400/- was deleted and the appeal was allowed.

Final Conclusion: The Tribunal set aside the orders of the Assessing Officer and the CIT(A) and deleted the addition of alleged undisclosed consideration of Rs. 5,31,58,400/-, allowing the assessee's appeal for AY 2014-15.

Treatment of government grants in income and expenditure account - requirement of accrual or receipt for recognition of grant income - genuine expenditure and corresponding branch accounts - addition on account of unexplained difference between head office and branch accounts - compliance with conditions of registration under section 12A

Treatment of government grants in income and expenditure account - requirement of accrual or receipt for recognition of grant income - Whether the sums shown as Government grants ought to have been included in the assessee's income and expenditure account for the year. - HELD THAT: - The Tribunal accepted the finding of the CIT(A) that no amount of grant was in fact received by the assessee during the year and that the sanction of the grant was conditional and subject to pending enquiries, including reference to Controller and Auditor General of India. The assessee produced the sanction letters and utilization certification showing that the grants were not released in the relevant year and that expenditure claimed related to anticipated/conditional sanction. In these circumstances the grant income neither accrued nor was received and could not be accounted for in the income and expenditure account for the year; consequently the disallowance based on treating the consolidated government grant account as undisclosed income was unsustainable. [Paras 8]

Addition disallowed as grant was not accrued or received and therefore not includible in the income and expenditure account for the year.

Genuine expenditure and corresponding branch accounts - addition on account of unexplained difference between head office and branch accounts - Whether expenditure shown in the head office account, created by transfer entries without corresponding branch expenditure, was liable to be disallowed. - HELD THAT: - The CIT(A) examined the documents and accepted that the legal income raised by the central office and the branches had been correctly accounted for and that the assessee had incurred only the stated lower amount of expenditure. Given the absence of grant receipt and the documentation placed before the appellate authority, the Tribunal found no infirmity in the conclusion that the purported expenditures created merely by transfer entries could not be treated as unexplained additions when the overall accounting and supporting papers, including utilization certificates and sanction letters, supported the assessee's position. [Paras 8]

Disallowance of expenditure on account of differences between head office and branch accounts was not sustained.

Compliance with conditions of registration under section 12A - requirement of true and correct accounts for registration - Whether the assessee violated the fundamental conditions of registration under section 12A by not submitting true and correct consolidated accounts, thereby justifying addition and proposal for withdrawal of registration. - HELD THAT: - The AO contended that failure to incorporate government grant receipts and omissions in branch accounts amounted to defective accounts violating conditions of registration. The CIT(A) on review of the material recorded that the grants were not received and that enquiries and conditional sanctions explained the accounting position. The Tribunal agreed with the CIT(A) that, on the material before the authority (sanction letters, utilization certificates and the accounting treatment), there was no basis to hold that the assessee had violated the fundamental conditions such as to warrant the additions or proposal for withdrawal of registration. [Paras 8]

AO's contention of violation of section 12A conditions and consequential additions/proposal for withdrawal of registration not sustained.

Final Conclusion: The revenue's appeal is dismissed; the CIT(A)'s deletion of the addition is upheld on the finding that the grants were neither accrued nor received in the year, the expenditure and inter-branch accounting were satisfactorily explained on the material before the appellate authority, and there was no basis to sustain the additions or the proposed withdrawal of registration under section 12A.

Deduction under section 10AA and application of sub section (9) read with section 80 IA(10) - Comparability assessment for restricting deduction - Treatment of unexplained excess profits as income from other sources - Acceptance of consistent profit margins across assessment years as evidentiary support - Disallowance of notional interest on partners' capital - Reliance on partnership deed for entitlement to interest/remuneration

Deduction under section 10AA and application of sub section (9) read with section 80 IA(10) - Comparability assessment for restricting deduction - Acceptance of consistent profit margins across assessment years as evidentiary support - Treatment of unexplained excess profits as income from other sources - Validity of the Assessing Officer's restriction of deduction under section 10AA by comparing the assessee's profits with a selected comparable and treating the excess as income from other sources. - HELD THAT: - The Tribunal affirmed the view of the Commissioner (Appeals) that the Assessing Officer's comparison with Fargo Mantle Products Pvt. Ltd. was inappropriate. The AO had applied a notional profitability of 8% and reclassified the contested amount as income from other sources without invoking the statutory mechanism in sub section (9) of section 10AA read with section 80 IA(10), which is the relevant provision to adjust exempted profits. The Tribunal noted that the assessee operated a 100% export oriented unit manufacturing 'hard' mantles after acquiring a running plant abroad, sold to European/German customers, and enjoyed effectively monopolistic market circumstances distinct from the comparable which manufactured predominantly 'soft' mantles for different end uses. The Tribunal also relied on the uninterrupted acceptance of the assessee's high profit margins in assessment orders for earlier years (accepted under section 143(3)) and the recurrence of similar high margins in subsequent year, and observed that the books of account were audited and not rejected. On these facts, the AO's ad hoc restriction based on the selected comparable and consequent reclassification was held to be without merit and required the statutory route under sub section (9) if any adjustment was to be made. The Commissioner (Appeals) order deleting the addition was affirmed. [Paras 8]

Order of Commissioner (Appeals) deleting the addition and sustaining the assessee's claim under section 10AA is affirmed; Revenue's ground on this point is dismissed.

Disallowance of notional interest on partners' capital - Reliance on partnership deed for entitlement to interest/remuneration - Validity of the Assessing Officer's disallowance of notional interest on partners' capital and treatment of non payment as a device to enhance exempt profit. - HELD THAT: - The Tribunal upheld the Commissioner (Appeals) finding that the Assessing Officer's disallowance was unsustainable where there was no clause in the partnership deed entitling partners to interest or remuneration and no supplementary deed indicating an obligation. The AO had treated non provision/payment as a collusive tax avoidance device and disallowed interest at a notional rate, but the Commissioner (Appeals) relied on binding judicial precedents of the jurisdiction (as invoked by the assessee) holding that mere absence of entries or non payment does not permit mechanical disallowance where the partnership deed does not provide for such payments. On the facts, the Tribunal found no infirmity in the appellate order deleting the disallowance. [Paras 11]

Order of Commissioner (Appeals) deleting the disallowance of notional interest on partners' capital is affirmed; Revenue's ground on this point is dismissed.

Final Conclusion: Both grounds of the Revenue's appeal - (i) restricting the deduction under section 10AA by reference to the chosen comparable and treating excess as income from other sources, and (ii) disallowing notional interest on partners' capital - were considered and the orders of the Commissioner (Appeals) deleting the respective additions/disallowance are affirmed; the Revenue's appeal is dismissed.

Jurisdiction to assess - transfer of jurisdiction under section 127 of the Income Tax Act - centralisation of jurisdiction by CBDT directions - raising a new legal point first before the Tribunal - leave and remand - remand for fresh adjudication - appeal allowed for statistical purposes

Jurisdiction to assess - transfer of jurisdiction under section 127 of the Income Tax Act - centralisation of jurisdiction by CBDT directions - raising a new legal point first before the Tribunal - leave and remand - Validity of assessment completed by Income Tax Officer, Ward-1(2), Allahabad in view of prior transfer of jurisdiction to JCIT and subsequent transfer back without a fresh order under section 127. - HELD THAT: - The jurisdictional objection was not raised before the Assessing Officer or before the CIT(A) and was first urged during Tribunal proceedings. The point is purely legal and goes to the root of the matter; therefore it cannot be rejected on technical grounds merely because it was not earlier agitated. Having regard to the absence of prior adjudication by the first appellate authority, the Tribunal, without expressing any view on the merits, exercised its discretion to permit the assessee to raise the jurisdictional plea before the CIT(A. The matter is set aside to the file of the CIT(A) for adjudication after considering the rival legal submissions and after affording the assessee an opportunity of hearing. As the jurisdictional issue is fundamental, the Tribunal kept the other grounds on merits open for consideration by the CIT(A) and did not decide them. [Paras 7]

Jurisdictional objection is allowed to be raised before the CIT(A); the matter is remanded to the CIT(A) for fresh adjudication after hearing; no view expressed on merits.

Final Conclusion: The appeal is allowed for statistical purposes and the question of jurisdiction of the Assessing Officer is remitted to the CIT(A) for fresh consideration after hearing the parties; other grounds on merits are left open for adjudication by the CIT(A).

Deduction under section 80IA(4) - Work-contract exclusion in explanation to section 80IA - Binding effect of earlier ITAT decisions in subsequent assessments

Deduction under section 80IA(4) - Binding effect of earlier ITAT decisions in subsequent assessments - Work-contract exclusion in explanation to section 80IA - Deletion of addition by disallowance of deduction claimed under section 80IA for AY 2014-15 was correctly upheld by the CIT(A) and the Tribunal. - HELD THAT: - The Assessing Officer disallowed the claim of deduction under section 80IA(4). The CIT(A) allowed the deduction by following a series of earlier ITAT, Ahmedabad decisions in the assessee's own case for assessment years 2003-04 to 2011-12. The Tribunal reviewed the orders of the lower authorities and the consistent line of ITAT decisions relied upon by the CIT(A). The Revenue contended that the assessee was a contractor and that the explanation to section 80IA (introduced by the Finance Act, 2009, with retrospective effect from 01.04.2000) excludes work-contracts from the deduction; however, the Tribunal found that the issue in the present assessment year is squarely covered by earlier ITAT decisions in favour of the assessee and that the CIT(A) acted correctly in following those precedents. Having considered the rival submissions and the consistent decisions of the Tribunal for earlier years, the Tribunal found no merit in the Revenue's grounds and endorsed the view that the deduction should be allowed as per the binding precedents in the assessee's case. [Paras 8, 9]

The addition by disallowance of deduction under section 80IA was deleted; the Revenue's appeal is dismissed.

Final Conclusion: The Tribunal dismissed the Revenue's appeal for AY 2014-15, upholding the CIT(A)'s allowance of the deduction under section 80IA by following consistent earlier ITAT decisions in the assessee's favour.

Application of income - allowability of provisions for gratuity and leave encashment - accrual basis versus receipt basis in trust assessments - matching principle of accounting - true and fair view and necessity of provisions in books of account - carry forward of assessed deficit in charitable trusts - consistency in accounting treatment

Allowability of provisions for gratuity and leave encashment - application of income - accrual basis versus receipt basis in trust assessments - true and fair view and necessity of provisions in books of account - matching principle of accounting - Whether provisions for gratuity and leave encashment made by the assessee-trust are allowable as application of income for the assessment year 2014-15. - HELD THAT: - The Tribunal held that the provisions for gratuity and leave encashment, quantified by actuarial valuation and recorded on an accrual basis in accordance with accounting practice and AS-15, are necessary book entries required to present a true and fair view of the trust's accounts. Drawing an analogy with depreciation, which is a non-cash provision nevertheless allowed to reflect the decrease in asset value and ascertain true profit, the Tribunal concluded that 'applied' in the context of trust assessments under the self-contained code of sections 11-13 need not be confined to amounts actually paid during the year. The Tribunal rejected the revenue's narrow contention that application of income requires actual outflow of money, observing that expenditure must be understood as necessary outgoings and provisions mandated by law or accounting standards may be charged against income as earned. On these grounds the Tribunal directed the Assessing Officer to allow the provision for gratuity and leave encashment as application of income of the trust for the year under consideration. [Paras 12, 13, 14, 15, 16]

Provision for gratuity and leave encashment held allowable as application of income and disallowance set aside.

Carry forward of assessed deficit in charitable trusts - application of income - consistency in accounting treatment - Whether the assessee's excess of expenditure (assessed deficit) for 2014-15 is to be carried forward to subsequent assessment years. - HELD THAT: - Relying on the decision of the jurisdictional High Court in CIT v. Institute of Banking Personnel Section and subsequent treatment affirmed by higher authority, the Tribunal accepted that where commercial or accounting principles are applied to compute a trust's income, an excess of expenditure in an earlier year adjusted against income in a subsequent year constitutes application of income of that subsequent year and is excludable under the provisions governing charitable trusts. Having allowed the provision disallowance, the Tribunal observed that the assessed deficit increases accordingly and directed the Assessing Officer to allow carry forward of the resultant deficit amount to subsequent years. [Paras 18, 19, 20]

Assessed deficit for 2014-15 to be carried forward; additional ground allowed and carry forward directed.

Final Conclusion: Appeal allowed: disallowance of provisions for gratuity and leave encashment deleted as they qualify as application of income when correctly recorded on accrual and actuarial basis; consequent assessed deficit for 2014-15 to be carried forward to subsequent assessment years.

Depreciation on goodwill arising from amalgamation - Application of Explanation 7 to section 43(1) - actual cost of transferred capital asset in amalgamation - Fifth proviso to section 32(1) - limitation on depreciation post amalgamation - Validity of discounted cash flow valuation vis a vis net asset value method for share valuation - Section 56(2)(viib) - taxability of excess issue price of shares and exception for a company in which public are substantially interested - Estoppel / acquiescence and binding effect of a High Court sanctioned scheme of amalgamation

Depreciation on goodwill arising from amalgamation - Application of Explanation 7 to section 43(1) - actual cost of transferred capital asset in amalgamation - Fifth proviso to section 32(1) - limitation on depreciation post amalgamation - Allowability of depreciation claimed by the assessee on goodwill arising from the amalgamation - HELD THAT: - The Tribunal held that the assessee was entitled to depreciation on goodwill recorded in its books pursuant to purchase method accounting of a court sanctioned amalgamation. The Tribunal examined the statutory fabric concerning amalgamation (including the objective of tax neutrality reflected in various provisions) and concluded that where goodwill did not exist as a recorded asset in the hands of the amalgamating company, Explanation 7 to section 43(1) and related provisions require that the actual cost of such transferred capital asset in the hands of the amalgamated company be the same as it would have been had the amalgamating company continued to hold it - in the case of self generated goodwill, cost would be nil. Notwithstanding arguments based on the fifth proviso to section 32(1), the Tribunal found the proviso inapplicable on the facts because the predecessor had not claimed depreciation on the goodwill; further, the Tribunal followed binding and persuasive authorities (including the Supreme Court in Smifs Securities Ltd. and several coordinate bench decisions) holding that goodwill arising on amalgamation is an intangible asset eligible for depreciation. Consequently, the Tribunal set aside the CIT(A)'s confirmation of disallowance and directed the AO to allow depreciation on the goodwill. [Paras 8, 11]

Depreciation on goodwill arising from the amalgamation is allowable; the order of the CIT(A) is set aside and the AO is directed to allow the depreciation.

Validity of discounted cash flow valuation vis a vis net asset value method for share valuation - Section 56(2)(viib) - taxability of excess issue price of shares and exception for a company in which public are substantially interested - Deletion of addition under section 56(2)(viib) in respect of excess issue price of shares arising on consideration paid for the amalgamation - HELD THAT: - The Tribunal upheld the CIT(A)'s deletion of the addition under section 56(2)(viib). It accepted the appellate finding that the assessee was a subsidiary of a listed holding company and therefore qualified as a 'company in which public are substantially interested' within the statutory definition; consequently, the provisions of section 56(2)(viib) did not apply. Although the AO had rejected the assessee's DCF valuation and computed NAV, the determinative conclusion on the section 56(2)(viib) issue turned on the statutory exception for companies in which the public are substantially interested, a factual legal classification accepted by the Tribunal. [Paras 16]

The addition under section 56(2)(viib) is deleted because the assessee is a company in which the public are substantially interested; the CIT(A)'s order is upheld and the Revenue's grounds in this regard are dismissed.

Estoppel / acquiescence and binding effect of a High Court sanctioned scheme of amalgamation - Section 72A - carry forward and set off of accumulated loss and unabsorbed depreciation in amalgamation - Availability of brought forward losses and unabsorbed depreciation to the amalgamated company post amalgamation - HELD THAT: - The Tribunal agreed with the CIT(A) that the scheme of amalgamation was sanctioned by the High Court after notice to stakeholders, including Revenue, and that Revenue did not challenge the scheme before the Court. Relying on the binding effect of a court sanctioned scheme and the doctrines of estoppel and acquiescence, the Tribunal held that the Revenue was precluded from upsetting the scheme at the assessment stage. On the substantive statutory point, the Tribunal observed that section 72A permits carry forward and set off of accumulated losses and unabsorbed depreciation in the context of amalgamation; accordingly, the CIT(A) was correct in allowing the brought forward losses and unabsorbed depreciation to the assessee. [Paras 21]

Brought forward losses and unabsorbed depreciation of the amalgamating companies are available to the amalgamated company; the CIT(A)'s allowance is upheld.

Final Conclusion: The Tribunal allowed the assessee's appeal: depreciation on goodwill arising from the amalgamation was held allowable and the AO was directed to permit the claim; the addition under section 56(2)(viib) was deleted as the assessee qualified as a company in which the public are substantially interested; and the brought forward losses and unabsorbed depreciation were allowed to be carried forward and set off by the amalgamated company. The Revenue's cross appeal was dismissed.

Rectification under Section 154 for mistake apparent from record - obvious mistake of law v. mistake of fact - finality of tribunal order - exemption under Section 11 and 12 for charitable institutions - violation of Section 13(1) affecting charitable exemption - characterisation of development receipts as capital or revenue and set off of carry forward losses

Rectification under Section 154 for mistake apparent from record - obvious mistake of law v. mistake of fact - finality of tribunal order - exemption under Section 11 and 12 for charitable institutions - violation of Section 13(1) affecting charitable exemption - Whether the Commissioner (Appeals) could invoke Section 154 to rectify his earlier order and deny exemption under Sections 11 and 12 when the matter had been previously allowed by the Tribunal and no mistake of fact apparent from the record was pointed out - HELD THAT: - The Tribunal noted that the Assessing Officer had made additions for the year under consideration but the Commissioner (Appeals), in an earlier order for the assessee and as sustained by a Coordinate Bench of the Tribunal, had held there was no violation of Section 13(1) and allowed exemption under Sections 11 and 12. A rectification under Section 154 is available only to correct a mistake apparent from the record; it cannot be used to reverse an order by re examining legal conclusions or to negate the effect of an earlier appellate decision which has attained finality. Reliance on the distinction between mistake of law and mistake of fact was applied: the Revenue failed to point out any mistake of fact apparent on the record which would justify invocation of Section 154. In these circumstances the Commissioner (Appeals) erred in passing a rectification order to deny a benefit already held allowable by appellate orders. [Paras 10, 12]

The rectification under Section 154 was not sustainable and the order passed by the Commissioner (Appeals) was set aside.

Characterisation of development receipts as capital or revenue and set off of carry forward losses - exemption under Section 11 and 12 for charitable institutions - Whether the development receipts were adjudicated afresh in the rectification proceedings and whether set off of carry forward losses against the development receipts precluded reconsideration in the rectification order - HELD THAT: - The Tribunal observed that the Commissioner (Appeals) had not decided the characterisation of the development receipts on merits in the rectification order but had allowed set off of carry forward losses against those receipts, resulting in no taxable surplus for the year. The assessee placed on record subsequent appellate orders in which the development receipts were held to be capital in nature. Given that there was no apparent factual mistake pointed out in the record that required rectification and that the same issue had been decided in favour of the assessee in later proceedings, the Tribunal found no warrant for reopening the question by way of Section 154. [Paras 11]

The rectification did not validly re open the development receipts issue and there was no basis in the impugned Section 154 order to disturb the earlier treatment.

Final Conclusion: The Tribunal allowed the assessee's appeal, set aside the rectification order passed by the Commissioner (Appeals) under Section 154, and upheld the treatment allowing exemption under Sections 11 and 12 (and the consequential treatment of development receipts by set off of carry forward losses) for the assessment year before it.

Admission of appeal where return not filed - requirement to deposit amount equal to advance tax - power of CIT(A) to exempt from deposit for good and sufficient reason - directory versus mandatory nature of pre-filing deposit - defect cured by subsequent payment - admission of additional evidence of tax payment - remand to first appellate authority for verification and decision on merits

Admission of appeal where return not filed - requirement to deposit amount equal to advance tax - directory versus mandatory nature of pre-filing deposit - defect cured by subsequent payment - power of CIT(A) to exempt from deposit for good and sufficient reason - Whether the appeals were rightly dismissed by the CIT(A) as unadmitted for non-deposit of an amount equal to advance tax where no return was filed, and whether subsequent deposit of tax cures that defect. - HELD THAT: - The Tribunal examined section 249(4) which requires that where no return has been filed the appellant must pay an amount equal to the advance tax payable before admission of appeal, but notes the proviso empowering the CIT(A) to exempt an appellant for good and sufficient reason. The Tribunal accepted the proposition, supported by coordinate-bench authority, that while payment of the tax is mandatory, the requirement that it be paid before filing the appeal is directory; if the defect (non-payment at time of filing) is subsequently cured by payment, the earlier defective appeal becomes valid. Applying this principle to the facts, the Tribunal found tax payments were made in parts (some before filing before CIT(A), some after filing, and some after the CIT(A) order) and that the assessee's explanation (financial hardship and pandemic-related difficulties) reasonably explained the delay. Consequently the Tribunal admitted the additional evidence in the form of tax challans and held that the appeals should not have been dismissed at the threshold merely for earlier non-payment. The Tribunal therefore set aside the orders of the CIT(A) and remanded the matters to the CIT(A) to verify and consider the payments in accordance with section 249(4)(b) and to decide the appeals on merits after affording reasonable opportunity to the assessee. [Paras 12, 13, 14, 15, 17]

Additional evidence of tax payment admitted; impugned orders set aside and appeals remitted to the CIT(A) to verify the payments under section 249(4)(b) and decide the appeals on merits after giving the assessee reasonable opportunity.

Admission of additional evidence of tax payment - remand to first appellate authority for verification and decision on merits - Whether the tax challans produced before the Tribunal should be admitted and whether the appeals should be restored for adjudication by the CIT(A). - HELD THAT: - The Tribunal admitted the additional evidence consisting of tax challans showing payment of taxes (partly before and partly after the CIT(A) order). Finding that the payments, together with the assessee's explanation of financial hardship and post-order compliance efforts, sufficiently remedied the defect relied upon by the CIT(A), the Tribunal held the appeals ought to be admitted. The Tribunal therefore allowed admission of the evidence and remitted the matters to the CIT(A) with directions to verify the payments against the assessee's liability under section 249(4)(b) and to decide the appeals on merits after giving the assessee an opportunity of being heard. [Paras 12, 13, 14, 15, 17]

Tax challans admitted as additional evidence; appeals restored and remitted to the CIT(A) for verification of payments and disposal on merits.

Condonation of delay - exercise of discretion in favour of substantial justice - Whether the delay in filing the appeals before the Tribunal should be condoned. - HELD THAT: - The Tribunal considered the application for condonation of delay, the long pendency and multiple adjournments, the affidavit explaining extreme financial hardship and Covid-19 pandemic difficulties, and the lack of reasonable explanation for repeated adjournments before the Tribunal. Balancing these factors and invoking the principle that substantial justice should prevail over technicalities, the Tribunal found the assessee's reasons sufficient and condoned the delay, admitting the appeals for adjudication. [Paras 2, 3, 5]

Delay in filing the appeals is condoned and the appeals are admitted for adjudication.

Final Conclusion: The Tribunal condoned the delay in filing the appeals, admitted additional evidence of tax payments, held that subsequent payment cures the directory defect of non-payment at the time of filing under section 249(4)(b), set aside the orders of the CIT(A) which had dismissed the appeals as unadmitted, and remitted both matters to the CIT(A) to verify the payments and decide the appeals on merits after affording the assessee a reasonable opportunity of being heard.

Invalidity of notice under Section 148 where issued in the name of a deceased person - notice to the correct person as condition precedent for reopening assessment - affixation/substituted service insufficient where notice could not have reached a living assessee - defect in foundational jurisdiction not cured by provisions validating defective service

Invalidity of notice under Section 148 where issued in the name of a deceased person - notice to the correct person as condition precedent for reopening assessment - affixation/substituted service insufficient where notice could not have reached a living assessee - defect in foundational jurisdiction not cured by provisions validating defective service - Validity of reassessment proceedings where the notice under Section 148 was issued in the name of a person who had died before issuance and no fresh Section 148 notice was issued to the legal heirs. - HELD THAT: - The Tribunal found it to be an admitted and recorded fact that the original assessee had died prior to issuance of the notice dated 26.03.2015 which was served by affixture. Because the notice under Section 148 was issued in the name of a person who was not in existence when the notice was issued, it did not meet the foundational requirement for reopening assessment. The Revenue failed to demonstrate that a fresh notice under Section 148 was served upon the legal heirs or that the material on record showed such service. Affixture as a substituted mode of service, without proper witnessing and where the officials could reasonably have ascertained the death, was held insufficient to cure the defect. Reliance on coordinate and High Court decisions led to the conclusion that issuing a notice to a deceased person is not a mere procedural irregularity but a jurisdictional defect which cannot be cured by provisions intended to validate defective service. Consequently the notice and the consequent reassessment were held invalid and the assessment order was quashed.

The notice issued under Section 148 in the name of the deceased was invalid; the reassessment proceedings and consequent assessment are quashed.

Final Conclusion: Grounds challenging issuance of notice under Section 148 to a deceased person are allowed; reassessment and assessment founded on that notice are quashed and the appeal is partly allowed, other grounds dismissed as not pressed.

Validity of penalty under section 271(1)(c) - Concealment of income vs furnishing inaccurate particulars - Requirement to specify limb in penalty notice - Discretion in imposition of penalty for technical or venial breaches - Distinction between accumulation under section 11(1)(a) and accumulation under section 11(2)

Validity of penalty under section 271(1)(c) - Requirement to specify limb in penalty notice - Concealment of income vs furnishing inaccurate particulars - Discretion in imposition of penalty for technical or venial breaches - Distinction between accumulation under section 11(1)(a) and accumulation under section 11(2) - Whether the penalty under section 271(1)(c) was validly imposed on the assessee - HELD THAT: - The Tribunal found that the penalty notice did not specify which limb of section 271(1)(c) was invoked-whether for concealment of income or for furnishing inaccurate particulars-as the assessing officer had left the relevant options unticked. The Tribunal noted that these two limbs carry different connotations and that the Assessing Officer is required to fix the charge when initiating penalty proceedings (relying on the legal position stated in T. Ashok Pai). Further, the record showed internal inconsistency: the assessment proceedings referred to an alleged violation under one provision of section 11(3) while the penalty order referenced a different provision, indicating uncertainty in the basis for penalty. The Tribunal also observed that the addition and the penalty related to an amount representing statutory 15% accumulation under section 11(1)(a), which was not demonstrably linked to an accumulation under section 11(2) that would justify the penalty. Finally, applying established principles that penal provisions are discretionary and should not be imposed for mere technical or venial breaches or where bona fides are not in question, the Tribunal concluded that imposition of penalty was not justified on the facts. For these reasons the penalty was held bad in law and deleted. [Paras 7, 8, 9, 10, 11]

Penalty imposed under section 271(1)(c) is invalid and is deleted; appeal allowed.

Final Conclusion: The Tribunal set aside the penalty imposed under section 271(1)(c) for Assessment Year 2011-12, holding the penalty notice defective for not specifying the limb invoked and, on the facts, concluding that imposition of penalty was not warranted; the appeal is allowed.

Reopening of assessment after completion under section 143(3) - reasons recorded must be self-explanatory and examined on a standalone basis - failure to disclose fully and truly all material facts - proviso to section 147

Reopening of assessment after completion under section 143(3) - reasons recorded must be self-explanatory and examined on a standalone basis - failure to disclose fully and truly all material facts - proviso to section 147 - Validity of reassessment proceedings initiated by notice under section 148/147 where original assessment for AY 2007-08 was completed under section 143(3) and reopening was after the four-year period - HELD THAT: - The Tribunal examined the reasons recorded for reopening and held that, where an assessment completed under section 143(3) is sought to be reopened after the four-year period, the proviso to section 147 required the reasons to record an allegation of failure by the assessee ''to disclose fully and truly all material facts necessary for reassessment''. The reasons must be read standalone and cannot be supplemented by affidavit, material or oral submissions. A plain reading of the reasons recorded in this case does not disclose any allegation of such failure by the assessee. Reliance was placed on the guidance of the Hon'ble Bombay High Court that reasons must be clear, unambiguous and disclose the Assessing Officer's mind as to which material fact was not disclosed. Because the recorded reasons lacked any statement of failure to disclose material facts, the jurisdictional precondition in the proviso to section 147 was not satisfied and the reassessment proceedings could not be lawfully assumed. In view of this dispositive defect the Tribunal did not consider other merits-based contentions and declined to rely on non-jurisdictional High Court authority conflicting with the jurisdictional position laid down by the jurisdictional High Court. [Paras 14, 15, 16, 18]

Reassessment proceedings under section 147/148 quashed for failure to record the requisite allegation of failure to disclose fully and truly all material facts; reopening held invalid.

Final Conclusion: The appeal is allowed: the reassessment proceedings for AY 2007-08 initiated by notice dated 29.03.2014 are quashed because the reasons recorded do not satisfy the proviso to section 147 (no recorded allegation of failure to disclose fully and truly all material facts), and other grounds were rendered academic.

Classification of goods under Customs Tariff headings - Classification as aircraft versus classification as toys or cameras - Application of the General Rules for the Interpretation (GIRs) of the Harmonized System - Persuasive value of Explanatory Notes to the Harmonized System - WCO classification decisions versus chapter/heading notes - Binding effect of an advance ruling on customs authorities - Prospective effect of tariff amendments

Classification as toys or recreational models - Explanatory Notes to the Harmonized System - Application of GIR 1 - Tello drones with or without camera are classifiable under heading 9503 of the First Schedule to the Customs Tariff Act, 1975. - HELD THAT: - The Tello drone is a lightweight machine intended primarily for amusement and educational use and is aimed at amateurs (children and adults). The Explanatory Notes to the Harmonized Commodity Description and Coding System show that heading 95.03 covers toys intended essentially for amusement, including toy aircraft and similar recreational models. Under General Rule 1, classification is determined by the terms of the headings and relative section or chapter notes. The product's description, specifications and intended use align it with heading 9503; the applicant conceded that Tello drones fall under heading 9503 and the forthcoming chapter note for unmanned aircraft does not alter that conclusion for flying toys designed solely for amusement. Accordingly, Tello drones are classifiable under heading 9503.

Tello drones with or without camera are classifiable under heading 9503.

Classification as helicopters/aircraft - Explanatory Notes regarding aircraft used for agricultural work - Application of GIR 1 - AGRAS T16 agricultural drones are classifiable under heading 8802 (specifically sub-heading 88021100) of the First Schedule to the Customs Tariff Act, 1975. - HELD THAT: - AGRAS T16 drones are heavier-than-air machines used for agricultural spraying, equipped with spray nozzles and mapping systems, and have an unladen weight consistent with non-toy utilitarian aircraft. The Explanatory Notes to the Harmonized System expressly include mechanically propelled aircraft used for agricultural work within heading 88.02, which encompasses helicopters and similar rotorcraft used for such purposes. Applying Rule 1, the terms of the heading and the Explanatory Notes determine classification; the AGRAS T16's primary function and characteristics bring it within sub-heading 88021100.

AGRAS T16 drones are classifiable under heading 8802 (sub-heading 88021100).

Classification of camera-equipped drones: aerial photography versus camera apparatus - Explanatory Notes and GIR hierarchy over WCO committee advice - Application of GIR 1 and limited resort to GIR 3(b) - Mavic 2 drones, although equipped with integrated cameras and used for aerial photography/video, are classifiable under heading 8802 (specifically sub-heading 88021100) of the First Schedule to the Customs Tariff Act, 1975. - HELD THAT: - Mavic 2 drones have powerful integrated cameras and their main function includes aerial photography, but heading 88.02 and its Explanatory Notes expressly contemplate helicopters and similar aircraft being used for aerial photography. The applicant relied on a WCO Harmonized System Committee classification advising classification under the camera heading (8525) by applying GIR 3(b) (essential character test). The Authority held that Rule 1 (classification by reference to the terms of the heading and chapter/section notes) is applicable and that Explanatory Notes carry considerable persuasive value; therefore resort to GIR 3(b) was unnecessary. Given that heading 8802 covers rotorcraft used for aerial photography and the new chapter note (to take effect prospectively) recognises unmanned aircraft equipped with permanently integrated digital cameras, Mavic 2 drones are properly classifiable under sub-heading 88021100.

Mavic 2 drones are classifiable under heading 8802 (sub-heading 88021100) despite being equipped with integrated cameras.

Advance ruling binding effect and limits - Rulings to be given on law in force at the time - Prospective application of tariff amendments - The Authority declined to grant a ruling based on tariff changes that would come into force in the future and limited the ruling to law in force at the time of decision. - HELD THAT: - The applicant requested rulings taking into account tariff amendments scheduled to take effect on 01.01.2022. The Authority noted that advance rulings can be given only in respect of law which is in force at the time and therefore rejected any ruling premised solely on future provisions, although it considered the forthcoming changes insofar as they provided interpretative support. The binding effect of advance rulings on customs authorities does not extend to prospective law not yet in force for purposes of issuing a ruling.

Ruling will apply only to law in force at the time; requests to rule on future tariff amendments were rejected.

Applicable customs duties and charges on imports - Classification-driven duty incidence - The rates of duty applicable to the classified drones were determined in accordance with their classification under the Customs Tariff Act. - HELD THAT: - Following classification, the Authority specified the customs duty incidence applicable to each category under the law in force: Tello drones under heading 9503 attract the duty and levy applicable to that heading; AGRAS T16 and Mavic 2 drones under heading 8802 attract the duty and levy applicable to that heading. The Authority also noted a different IGST treatment if imports are for personal use. These duty determinations flow directly from the classification conclusions reached.

Duties were specified corresponding to the classifications: Tello under 9503; AGRAS T16 and Mavic 2 under 8802, with IGST treatment differing for personal use.

Final Conclusion: The Authority held that (i) Tello drones (with or without camera) are classifiable as toys under heading 9503; (ii) AGRAS T16 agricultural drones and Mavic 2 camera-equipped drones are classifiable as aircraft/rotorcraft under heading 8802 (sub-heading 88021100); duty incidence was directed accordingly under the law in force, and the request to rule on tariff amendments effective in the future was rejected.

Continuation of pending advance ruling application - requirement to specify a single port/Principal Commissioner in an advance ruling application - permissibility of grouping only similar goods in one advance ruling application - classification under heading 23.09 as animal feed supplements - time limit for rendering advance rulings and consultation with jurisdictional/customs authority - binding effect of an advance ruling on the specified Principal Commissioner of Customs and subordinate authorities

Continuation of pending advance ruling application - time limit for rendering advance rulings and consultation with jurisdictional/customs authority - The application transferred from the erstwhile AAR is to be treated as a continuation of the earlier proceedings and the original date of filing is to be honoured for the purposes of eligibility for advance ruling. - HELD THAT: - The application filed on 03.06.2019 under the proviso to section 28EA(1) had not been decided by the erstwhile AAR and was transferred to CAAR, Mumbai under section 28F(3). Given that delay in disposal was not attributable to the applicant, a restrictive approach treating the transferred application as lapsed was rejected. The definition of "advance ruling" contemplates a decision on questions raised prior to importation; hence imports effected after filing the earlier application do not extinguish the applicant's right to a ruling on those goods. Accordingly, the proceedings are deemed a continuation of the earlier application rather than a fresh filing for the limited purpose of preserving eligibility to receive a ruling in respect of goods imported after 03.06.2019 (paragraph 5). [Paras 5]

Original date of filing (03.06.2019) is to be recognised and the transferred application is treated as a continuation so far as eligibility to receive an advance ruling for imports after that date.

Requirement to specify a single port/Principal Commissioner in an advance ruling application - binding effect of an advance ruling on the specified Principal Commissioner of Customs and subordinate authorities - An advance ruling application must specify a single Principal Commissioner/Commissioner (port/point of entry); listing multiple Principal Commissioners/Commissioners in one application is not permissible. - HELD THAT: - Sections governing transmission of the application to the Principal Commissioner/Commissioner, the binding effect of a ruling on that specified authority and its subordinates, and the appellate right vested in that single Principal Commissioner/Commissioner, read together, indicate legislative intention that a specific individual authority be identified. Use of the definite article and the procedural requirement to obtain comments and return records within the statutory timeline support a single notified port. Allowing multiple ports would complicate consultations, replies and compliance with the three-month statutory timeline and could be used to cause delay. The applicant's reliance on the General Clauses Act to read singular as plural was rejected as inconsistent with the statutory scheme and practical exigencies (paragraph 6). [Paras 6]

The application cannot validly list multiple Principal Commissioners/Commissioners; one port/Principal Commissioner must be indicated.

Permissibility of grouping only similar goods in one advance ruling application - classification under heading 23.09 as animal feed supplements - Advance rulings should ordinarily relate to a single good; grouping of goods in one application is permissible only where the items are sufficiently similar such that a single determination can be made; the present application seeking classification for 16 distinct items grouped under four categories did not satisfy that test and could not be decided as presented. - HELD THAT: - The statutory scheme contemplates advance rulings on clearly defined questions (classification, notifications, valuation, origin) within a limited time and after consultation with the jurisdictional authority. International guidance cited (WCO Technical Guidance) supports the principle that an advance ruling application should relate to one good. While similar items that share the same raw material and processes may be combined (example of various forms of supari), the present application contains 16 products for which nothing in the record demonstrates compliance with the chapter note to heading 23.09 (which requires products to be obtained by processing to the extent of losing essential characteristics of the original material). The descriptions provided were insufficient to justify treating these diverse items as a single good or to establish entitlement to classification under heading 23.09. Therefore, the application is procedurally and substantively defective and cannot be adjudicated in its current form (paragraphs 7-8). [Paras 7, 8]

The application is defective for seeking advance rulings on multiple distinct products in a single filing; the applicant must file fresh, separate applications with sufficient particulars for each product to justify classification (including compliance with the chapter note to heading 23.09 where claimed).

Continuation of pending advance ruling application - permissibility of grouping only similar goods in one advance ruling application - Final disposition of the present filing: the application is rejected as defective but the applicant may reapply in accordance with law. - HELD THAT: - Having held that the transferred application is to be treated as a continuation for the purpose of preserving filing date, yet also finding that multiple ports cannot be listed and that multiple distinct products cannot be adjudicated together without sufficient particulars, the Authority concluded that the present composite application is defective. The applicant is not precluded from filing fresh, properly particularised applications for any of the products in conformance with statutory requirements and timeframes (paragraph 8). [Paras 5, 6, 7, 8]

The present application is rejected as defective; the applicant may file fresh applications for individual products in accordance with law.

Final Conclusion: The CAAR holds the transferred application shall be treated as a continuation of the application filed on 03.06.2019 for purposes of eligibility, but the filing is defective because multiple Principal Commissioners were indicated and multiple distinct products were sought to be decided in one application; the application is rejected and the applicant may file separate, properly particularised advance ruling applications for each product as permissible under law.

Refund of excess customs duty paid by mistake - limitation under section 27 of the Customs Act - mistake of law or fact and applicability of the Limitation Act - retention of tax without authority of law (Article 265) - interest on delayed refunds under section 27A of the Customs Act

Refund of excess customs duty paid by mistake - limitation under section 27 of the Customs Act - mistake of law or fact and applicability of the Limitation Act - retention of tax without authority of law (Article 265) - Excess amount paid by the petitioner on account of a bonafide mistake is refundable and the claim cannot be defeated merely by applying the one year limitation under section 27 of the Customs Act where the payment was not a duty payable in law. - HELD THAT: - The Court accepted that the sum paid on the second occasion was a repeat payment of an earlier deposit and was not a duty properly due in respect of the later import. Retention of such amount by the Department would be without authority of law. Reliance was placed on this Court's reasoning in Swastik Sanitarywares Ltd. and the Division Bench decision in M/s. Comsol Energy Pvt. Ltd., which apply the principle that where money is paid by mistake (including mistake of law), the limitation for refund is governed by the general law on mistakes and not automatically by the statutory one year bar. The Limitation Act principles (period beginning when the mistake was discovered or could with reasonable diligence have been discovered) therefore govern the timeliness of the refund claim. Having found that the petitioner applied within a reasonable time, and that the amount retained was not a legally recoverable duty, the claim was held maintainable and refundable.

Claim for refund of the excess payment allowed and the amount directed to be refunded.

Interest on delayed refunds under section 27A of the Customs Act - Entitlement to interest on the refunded amount and the rate applicable if refund is delayed. - HELD THAT: - The Court observed that where a refund is due, interest provisions apply. Having considered prior decisions (including treatment of interest in comparable cases), the Court awarded interest on the refundable amount from a specified date. The Court fixed a concessional rate of interest at 6% per annum from 01/05/2018 until payment, provided payment is made within three months; if payment is not made within that period, a higher rate of 12% per annum will apply thereafter.

Interest awarded at 6% per annum from 01/05/2018 until payment if paid within three months; if not paid within three months, interest at 12% per annum thereafter.

Final Conclusion: The writ petition is allowed: the petitioner is entitled to refund of the excess customs payment made by mistake and to interest thereon - interest to run at 6% per annum from 01/05/2018 until payment if paid within three months, and at 12% per annum thereafter.

Interim stay of recovery - prima facie case - balance of convenience - irreparable loss - applicability of DGFT amendment to prior imports

Interim stay of recovery - prima facie case - balance of convenience - irreparable loss - applicability of DGFT amendment to prior imports - Interim injunction staying operation and execution of the impugned orders dated 04.09.2020 and 07.09.2020 and the Recovery Notice dated 15.07.2021. - HELD THAT: - The High Court examined the petitioner's contention that the import in question occurred prior to the DGFT Notification dated 25.08.2017 which placed imports of gold from South Korea under restriction, and noted the petitioner's reliance on earlier judicial decisions. The Court found that, on the materials before it, the petitioner had established a prima facie case and that the balance of convenience favoured preservation of the status quo. The Court also accepted that, absent interim relief, the petitioner would suffer irreparable loss. In light of these considerations the Court stayed operation, implementation and execution of the impugned orders and the recovery notice for the duration of the writ petition. The Court's order is interlocutory and does not decide the substantive question of the amendment's applicability on merits.

Operation, implementation and execution of impugned orders dated 04.09.2020 and 07.09.2020 and Recovery Notice dated 15.07.2021 are stayed during the pendency of the writ petition.

Final Conclusion: Interim ex parte stay granted of the impugned orders and the recovery notice on finding of prima facie case, balance of convenience and risk of irreparable harm; matter to proceed on merits before the Court.

Application of a coordinate bench's judgment as binding precedent for similarly placed litigants - effect of a pending review petition before the Supreme Court where no stay has been granted - disposal of a writ petition by adopting earlier decision in identical proceedings

Disposal of a writ petition by adopting earlier decision in identical proceedings - Writ petition disposed of in terms of the Coordinate Bench's decision in CWP-19871-2020. - HELD THAT: - The Court recorded that the legal issue raised in the present petition had already been concluded by the Coordinate Bench in CWP-19871-2020. On the petitioner's application and on appearance of the respondent with advance notice, the Court accepted that the Coordinate Bench had decided the same issue and accordingly disposed of the present writ petition by adopting the relief and terms granted in the earlier coordinate-bench order.

Petition disposed of in the same terms as CWP-19871-2020.

Effect of a pending review petition before the Supreme Court where no stay has been granted - Pending review of the Supreme Court decision does not impede application of the coordinate bench's ruling where no stay has been granted. - HELD THAT: - The respondent-Union candidly informed the Court that a review application had been filed in the Supreme Court against the decision relied upon, but conceded that no stay had been granted. The Court treated the absence of any stay as permitting application of the coordinate-bench ruling to the present petition and proceeded to dispose of the matter accordingly.

Pending review before the Supreme Court, without a stay, does not prevent the Court from following the coordinate bench's decision and disposing of the petition on that basis.

Final Conclusion: The application for early listing was allowed and the writ petition was disposed of by following the Coordinate Bench's decision in CWP-19871-2020; the existence of a review petition in the Supreme Court where no stay is in place did not prevent such disposal and any ancillary applications stand disposed of.

Time-limit for issuance of notice - mandatory nature of statutory period - Regulation 17 of Customs Broker Licensing Regulations, 2018 - invalidity of proceedings for delay in issuance of show cause notice - penalty under Regulation 18 of CBLR, 2018

Regulation 17 of Customs Broker Licensing Regulations, 2018 - time-limit for issuance of notice - mandatory nature of statutory period - invalidity of proceedings for delay in issuance of show cause notice - penalty under Regulation 18 of CBLR, 2018 - SCN issued beyond the 90 days period prescribed by Regulation 17 rendered the adjudication and penalty unsustainable. - HELD THAT: - The Tribunal recorded that the offence report was received on 12.06.2019 and therefore the 90-day period under Regulation 17 commenced from that date. The show cause notice was issued on 15.10.2019, which is beyond the prescribed 90 days. The Tribunal relied on the consistent line of judicial decisions, including the jurisdictional High Court decision cited, holding that where a regulation prescribes a specific period of limitation, that period is mandatory unless an exception is expressly provided. The adjudicating authority's reasons for delay (translation of documents etc.) did not amount to a permissible exclusion under the regulation. Because the statutory time-limit was not observed and no exception applies, issuance of the notice was irregular and the consequent penalty could not be sustained. [Paras 5, 7]

The show cause notice issued after the 90-day period under Regulation 17 is irregular; the penalty imposed under Regulation 18 is set aside.

Final Conclusion: Appeal allowed; impugned order set aside and the penalty imposed under Regulation 18 quashed as the show cause notice was issued beyond the mandatory 90-day period under Regulation 17.

Confiscation for undeclared baggage - concealment to evade customs duty - entitlement under Notification No.12/2012-Cus - liability under Section 77 read with Baggage Rules, 1998 - penalty under Section 112(a) and (b) of the Customs Act, 1962

Confiscation for undeclared baggage - concealment to evade customs duty - entitlement under Notification No.12/2012-Cus - liability under Section 77 read with Baggage Rules, 1998 - Validity of confiscation of the seized gold biscuits - HELD THAT: - The Tribunal found that the appellant carried two gold biscuits concealed inside his inner garments and passed through the green channel without declaration, thereby indicating an attempt to avoid payment of customs duty. The appellant's stay abroad (35 days) rendered him ineligible to bring the gold in terms of Notification No.12/2012-Cus dated 17/03/2012. Non-declaration of the gold attracted liability under the Customs provisions and the Baggage Rules. Although the appellant produced the original invoice before the Tribunal establishing ownership and that the purchase was recent, eligibility under the Notification and the concealment/undeclared nature of the goods supported absolute confiscation. On these grounds the confiscation order was upheld. [Paras 6]

Confiscation of the seized gold biscuits upheld.

Penalty under Section 112(a) and (b) of the Customs Act, 1962 - Validity of the penalty of Rs. 10,000 imposed under Section 112(a) and (b) - HELD THAT: - While the Tribunal sustained confiscation on the ground of ineligibility under the Notification and non-declaration, it observed that the appellant produced the original invoice before the Tribunal proving ownership and explaining the purchase. Considering the facts and circumstances, including the appellant's proof of ownership, the Tribunal found that imposition of the penalty was not justified and exercised discretion to set aside the penalty imposed by the original authority. [Paras 6]

Penalty imposed under Section 112(a) and (b) set aside.

Final Conclusion: Appeal partly allowed: confiscation of the seized gold biscuits upheld; penalty of Rs. 10,000 under Section 112(a) and (b) set aside.

Winding up for inability to pay debts - Admission of debt by balance confirmation - Statutory demand and notice - Undertaking to settle dues remaining unfulfilled - Striking off from register not a bar to winding up - Power to wind up struck-off company - Just and equitable ground for winding up

Winding up for inability to pay debts - Admission of debt by balance confirmation - Statutory demand and notice - Undertaking to settle dues remaining unfulfilled - Respondent-company is liable to be wound up under section 433(e) and (f) read with section 439 of the Companies Act, 1956 on the ground of inability to pay its debts. - HELD THAT: - The court found the claim of the petitioner established by an uncontroverted balance confirmation (annexure "G") dated July 15, 2009, and by statutory demand and subsequent notices which elicited only a bald denial without substantive objection. No statement of objections has been filed opposing the petition and an undertaking recorded on March 28, 2014 to settle the petitioners' dues remained unfulfilled. In these circumstances the company is unable to pay its debts, and the facts satisfy the statutory test for winding up. The respondent's contention that the company's name has been struck off the register and that assets have been dealt with in a settlement before the Debts Recovery Tribunal does not prevent the court from ordering winding up. The court relied on the power exercisable under section 248(8) of the Companies Act, 2013 and analogous provisions under the Companies Act, 1956 (including section 560(5) and (6)), and precedent which holds that striking off does not oust the court's power to wind up. The company's assertion that there is no substratum and that assets were utilised in settlement was noted as additionally supporting a finding of just and equitable winding up. [Paras 8, 9, 10, 11]

Company Petition No. 195 of 2010 is allowed and the respondent-company is ordered to be wound up; the winding up order is to be advertised in specified newspapers and the official liquidator is appointed to take charge and proceed in accordance with the Act and Rules.

Consequential claims to be lodged with official liquidator - Tag-along petitions disposed as not requiring separate order - Other connected winding up petitions by similarly placed petitioners do not require separate orders and claimants may lodge claims with the official liquidator for adjudication. - HELD THAT: - Petitions filed by other petitioners, which were tagged with Company Petition No. 195 of 2010 and were similarly placed, are disposed of in consequence of the allowance of the principal petition. The court directed that those petitioners are entitled to present their claims before the official liquidator and have them adjudicated according to law; no separate winding up orders were required for each tagged petition. [Paras 12]

The connected petitions are disposed of as not requiring separate orders in view of the allowance of Company Petition No. 195 of 2010, with liberty to lodge claims before the official liquidator.

Final Conclusion: The High Court allowed the primary winding up petition and ordered the respondent company to be wound up on grounds of inability to pay admitted debts; the order includes advertisement of the winding up and appointment of the official liquidator, and connected petitions by similarly placed creditors were disposed of as consequentially covered with directions to present claims to the liquidator.

Restoration of name in register of companies - striking off of company name - company carrying on business or in operation - proof of operation at time of striking off - Section 252(3) of the Companies Act, 2013

Company carrying on business or in operation - proof of operation at time of striking off - restoration of name in register of companies - Section 252(3) of the Companies Act, 2013 - Whether the company's name should be restored to the register of companies under Section 252(3) of the Act on the ground that it was carrying on business or in operation at the time its name was struck off. - HELD THAT: - The Tribunal examined the documentary material and submissions and concluded that the company was not in operation prior to the date on which its name was struck off. Documents and records filed by the petitioner that relate to the period after the striking off cannot be relied upon to satisfy the condition in Section 252(3) that the company was carrying on business or in operation at the relevant time. The second director (who is also a 50% shareholder and respondent) specifically stated that the company was not in operation before striking off. The ROC's action in striking off the name was taken on account of non-filing of financial statements and annual returns, and the Tribunal was not satisfied that the statutory condition for restoration under Section 252(3) was met. [Paras 13, 14]

The petition for restoration of the company's name is dismissed as the Tribunal is not satisfied that the company was carrying on business or in operation at the time its name was struck off.

Final Conclusion: The company's application for restoration under Section 252(3) fails because the Tribunal found no satisfactory proof that the company was carrying on business or in operation at the time of striking off; the petition is dismissed.

Applicability of the Limitation Act to proceedings under the IBC - acknowledgement under Section 18 of the Limitation Act - fresh cause of action arising from a decree or Recovery Certificate - directory nature of time-limits in Section 7(4) of the IBC - amendment of pleadings and filing of additional documents in Section 7 proceedings

Applicability of the Limitation Act to proceedings under the IBC - acknowledgement under Section 18 of the Limitation Act - Whether an application under Section 7 of the IBC is barred by limitation where the corporate debtor acknowledged the debt within three years, thereby extending limitation under Section 18 of the Limitation Act. - HELD THAT: - The Court held that the Limitation Act applies to proceedings under the IBC 'as far as may be' and, in particular, Sections 14 and 18 are applicable. An acknowledgement in writing of a present subsisting liability under Section 18 restarts limitation from the date of such acknowledgement; it need not be a promise to pay and may be inferred from entries in balance-sheets or financial statements. The Court observed that the documents relied upon (payments of interest, One Time Settlement proposal and balance-sheets for 2016-17 and 2017-18) constituted material capable of amounting to an acknowledgement within the meaning of Section 18, thereby extending the period of limitation by three years. The Court emphasised that Section 18 should not be applied with pedantic rigidity in the IBC context and that an OTS proposal or balance-sheet entries can, depending on their content and timing, attract Section 18 and renew limitation. [Paras 118, 120, 126, 141, 142]

An application under Section 7 is not barred by limitation if the corporate debtor acknowledged the debt within three years; such acknowledgement restarts limitation under Section 18.

Fresh cause of action arising from a decree or Recovery Certificate - Whether a final decree of the DRT or issuance of a Recovery Certificate gives rise to a fresh cause of action enabling initiation of proceedings under Section 7 within three years of the decree or certificate. - HELD THAT: - The Court held that a final judgment or decree for payment, and the issuance of a Recovery Certificate, create a fresh right to recover the decretal/ certified amount. Once a claim crystallises into a final adjudication and a Recovery Certificate is issued, the creditor obtains a fresh cause of action to initiate proceedings under Section 7 of the IBC, and limitation runs from the date of such judgment/decree or issuance of the certificate if the decretal/certified dues remain unpaid. Applying this, the Recovery Certificate dated 25.05.2017 afforded the Bank a fresh three-year period within which to file the Section 7 petition. [Paras 132, 138, 139]

A final decree or a Recovery Certificate generates a fresh cause of action; Section 7 proceedings may be initiated within three years from the date of such decree or certificate if dues remain unpaid.

Directory nature of time-limits in Section 7(4) of the IBC - amendment of pleadings and filing of additional documents in Section 7 proceedings - Whether the Adjudicating Authority was precluded from permitting amendments and filing of additional documents after the initial Section 7 filing and whether the 14-day timeline in Section 7(4) prevents consideration of such documents. - HELD THAT: - The Court held there is no absolute bar to filing additional documents or amending pleadings until a final order admitting or rejecting the application is passed. The 14-day timeline in Section 7(4) for ascertaining default is directory rather than mandatory; if the Adjudicating Authority does not complete the process within fourteen days it must record reasons but the application does not lapse. The proviso to Section 7(5)(b) allowing rectification within seven days also indicates remedial flexibility. Consequently, the NCLT did not err in permitting the Bank to place additional documents on record prior to admission, and the Adjudicating Authority may, depending on circumstances, in its discretion refuse belated documents if inordinate delay or prejudice is shown. [Paras 71, 91, 92, 93, 144]

There is no legal bar to amendment or filing additional documents in Section 7 proceedings prior to final adjudication; timelines in Section 7(4) are directory and do not preclude consideration of such documents.

Final Conclusion: The appeal is allowed. The NCLAT's order setting aside the NCLT admission is set aside; the NCLT's admission of the Section 7 petition is upheld on the grounds that (i) acknowledgements and the DRT decree/Recovery Certificate renewed limitation, and (ii) the Adjudicating Authority was entitled to receive and consider additional documents prior to final adjudication.

Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - essential supplies / essential goods or services - Section 14(2-A) exception for supplies critical to preserve value and manage operations as a going concern - Regulation 32 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - definition and limitation of essential supplies - direct input to the output produced by the corporate debtor

Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - essential supplies / essential goods or services - Regulation 32 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - definition and limitation of essential supplies - direct input to the output produced by the corporate debtor - Whether electricity supply disconnected during the moratorium could not be terminated, suspended or interrupted and whether the supply in this case attracted protection under Section 14(2) and (2-A). - HELD THAT: - The Tribunal examined Section 14(2) and (2-A) together with Regulation 32 which narrows the phrase 'essential goods or services' to items such as electricity only to the extent they are not a direct input to the output produced by the corporate debtor. The Regulation's illustration (water for drinking/sanitation is essential, but water used to generate hydro-electricity is not) was held to be apposite. Where electricity is used as a direct input to produce the corporate debtor's output (here, running printing machinery), such use does not attract the moratorium protection. Section 14(2-A) preserves supply only if the interim or resolution professional considers the supply critical to preserve value and manage operations and the dues arising during the moratorium are paid; non-payment of dues arising during the moratorium removes that protection. Applying these principles, the Tribunal concluded that electricity consumed for running the printing business of the corporate debtor is a direct input and therefore not covered by the moratorium protection relied upon by the appellant, and the Adjudicating Authority was justified in directing payment to secure reconnection. [Paras 6, 7, 8, 9]

Electricity used as a direct input to the corporate debtor's production (printing) does not receive protection under Section 14(2)/(2-A) read with Regulation 32; non-payment of dues arising during the moratorium disentitles the corporate debtor to the protection, and the impugned order directing payment for restoration is not interfered with.

Section 14(2-A) exception for supplies critical to preserve value and manage operations as a going concern - direct input to the output produced by the corporate debtor - Whether the Resolution Professional may seek modification of the Adjudicating Authority's order by identifying electricity consumption that is not a direct input to the corporate debtor's output and obtain restoration on that basis. - HELD THAT: - The Tribunal granted liberty to the Resolution Professional to place on record specific particulars of the electricity supply that, in his view, are not direct inputs to the output produced by the corporate debtor (for example, uses necessary for preservation, sanitation, demonstration of machines etc.). On receipt of such particulars the Adjudicating Authority may reassess and modify the quantum to be paid for resumption so as to permit supply to the limited extent that is not a direct input. This leaves the factual determination and any adjustment of the payment amount to the Adjudicating Authority on fresh consideration of the particulars filed by the appellant. [Paras 11]

Liberty granted to the Resolution Professional to file particulars of electricity use that are not direct inputs; the Adjudicating Authority may on that basis modify the amount required for reconnection - issue remanded for fresh consideration limited to these particulars and modification of the payment direction.

Final Conclusion: The appeal is dismissed insofar as it challenges the Adjudicating Authority's direction to pay for restoration of electricity consumed as a direct input to the corporate debtor's printing operations; liberty is given to the Resolution Professional to seek modification by filing particulars of electricity use that are not direct inputs, on which the Adjudicating Authority may reassess the required payment.

Liquidation under section 33(2) of the Insolvency and Bankruptcy Code, 2016 - committee of creditors' rejection of resolution plan and deemed vote for liquidation - appointment of liquidator and duties under the Insolvency and Bankruptcy (Liquidation Process) Regulations, 2017 - cessation of moratorium under section 14 and commencement of fresh moratorium under section 33(5) - investigation of preferential, undervalued and fraudulent transactions under section 35(1) - obligation to notify Registrar of Companies, Insolvency and Bankruptcy Board of India and Income tax Department - reliance on K. Sashidhar v. Indian Overseas Bank

Liquidation under section 33(2) of the Insolvency and Bankruptcy Code, 2016 - committee of creditors' rejection of resolution plan and deemed vote for liquidation - reliance on K. Sashidhar v. Indian Overseas Bank - Liquidation of the corporate debtor ordered by the Tribunal. - HELD THAT: - The Tribunal found that CIRP was initiated and the resolution professional was appointed; expression of interest and information memorandum were circulated and resolution plans were considered by the CoC. The resolution applicant's plan was rejected by 76.02% of the financial creditors in voting held after the CoC process, and no viable resolution plan was approved within the extended CIRP period. Guided by the principle in K. Sashidhar v. Indian Overseas Bank and having regard to section 33 of the IBC, the Tribunal concluded that, in the absence of an approved plan and with the CoC having voted against the plan (thereby producing a deemed vote for liquidation), it was obliged to order liquidation of the corporate debtor. [Paras 7]

Application for liquidation is allowed and the corporate debtor is ordered to be liquidated.

Appointment of liquidator and duties under the Insolvency and Bankruptcy (Liquidation Process) Regulations, 2017 - cessation of moratorium under section 14 and commencement of fresh moratorium under section 33(5) - investigation of preferential, undervalued and fraudulent transactions under section 35(1) - obligation to notify Registrar of Companies, Insolvency and Bankruptcy Board of India and Income tax Department - Appointment of a liquidator and directions governing the liquidation process. - HELD THAT: - The Tribunal accepted the written consent for appointment and appointed Mr. Ramakrishnan Sadasivan as liquidator. The liquidator was directed to act in accordance with the IBC and relevant rules and regulations, to issue the public announcement of liquidation, and for the order to stand as notice of discharge to officers, employees and workers under the statutory provision cited. The liquidator is directed to investigate the corporate debtor's financial affairs, particularly preferential, undervalued and fraudulent transactions, and to file suitable applications before the Adjudicating Authority as required. The registry was directed to communicate the order to the Registrar of Companies and the IBBI, and the liquidator was required to intimate the Income tax Department and other fiscal and regulatory authorities. The moratorium under section 14 is to cease and a fresh moratorium under section 33(5) is to commence. The liquidator must submit a preliminary report within 75 days from the liquidation commencement date and comply with reporting obligations under the Regulations. [Paras 8, 9]

Mr. Ramakrishnan Sadasivan is appointed as liquidator with specified statutory duties and reporting obligations; directions issued for conduct of the liquidation process and notifications to regulatory and fiscal authorities.

Final Conclusion: The Tribunal, applying established precedent and the provisions of the IBC, ordered liquidation of the corporate debtor for want of an approved resolution plan and appointed a liquidator with directions to carry out the liquidation in accordance with statutory rules, investigate antecedent transactions and notify relevant authorities.

Financial debt - financial creditor - consideration for the time value of money - interest-free loan - commercial effect of borrowing - initiation of Corporate Insolvency Resolution Process under Section 7 of the IBC - default - assignee of debt

Financial debt - interest-free loan - consideration for the time value of money - commercial effect of borrowing - Whether a term loan advanced to a corporate debtor interest-free for working capital can constitute a "financial debt" and thereby render the lender (or assignee) a "financial creditor" capable of invoking Section 7 of the IBC. - HELD THAT: - The Court held that the definition of "financial debt" in Section 5(8) must be read in context with other definitions in the Code and the scheme and purpose of the IBC. The words "if any" in the principal clause (debt alongwith interest, if any) are not otiose; a financial debt may consist solely of principal where no interest is payable. The sub-clauses (a)-(i) are illustrative; transactions falling within them must still be traced to the core requirement that the debt originate as a disbursal having the commercial effect of borrowing. Applying these principles, the Court concluded that an interest-free term loan advanced to meet the operational working capital needs of a corporate debtor-which has the commercial effect of borrowing-cannot be excluded from the meaning of "financial debt" merely because it bears NIL interest. Consequently, such a debt can make the lender (or its assignee) a "financial creditor" for the purposes of initiating the corporate insolvency resolution process under Section 7, subject to proof of default and other statutory conditions. [Paras 22, 24, 29, 31]

An interest-free term loan advanced for the corporate debtor's working capital can qualify as a "financial debt"; the definition must be read in context and include loans having the commercial effect of borrowing.

Initiation of Corporate Insolvency Resolution Process under Section 7 of the IBC - assignee of debt - default - Relief to be granted in light of the conclusion that the loan can be a financial debt and consequences for the pending Section 7 petition. - HELD THAT: - Given the legal conclusion that an interest-free loan may constitute a financial debt, the Court found the impugned orders of the NCLT and NCLAT dismissing the Section 7 petition to be unsustainable. The Court set aside the judgments of the NCLAT and the NCLT and held that the petition under Section 7 stands revived. The matter is remitted for fresh decision in accordance with law and the principles articulated in this judgment, including appropriate consideration of default and evidentiary requirements. The revival contemplates adjudication afresh on the merits and proof of default by the financial creditor (including an assignee), consistent with the Code's procedures. [Paras 32]

The impugned orders are set aside; the Section 7 petition is revived and remitted for fresh consideration in accordance with law.

Final Conclusion: The appeal is allowed: the Supreme Court held that an interest-free term loan advanced to meet a corporate debtor's working capital can qualify as a "financial debt" and thus the lender/assignee can be a "financial creditor" under the IBC; the NCLT and NCLAT orders dismissing the Section 7 petition are set aside and the petition is revived for fresh adjudication in accordance with the Court's findings.

Refund under section 11B of Central Excise Act, 1944 - interest on delayed refund - completion of application for refund - deficiency memo and curing - commencement of interest from date of complete application

Refund under section 11B of Central Excise Act, 1944 - interest on delayed refund - deficiency memo and curing - commencement of interest from date of complete application - Whether interest on the refunded amount is payable from the date of initial filing of the refund claim or from the date on which the deficiency in the application was cured making the application complete. - HELD THAT: - The Tribunal found undisputed facts that the appellant's refund application filed on 10.11.2017 was returned as incomplete with a deficiency memo and that the deficiency was removed only on 14.07.2018. Consequently the application could be treated as a proper application under section 11B only from 14.07.2018. Applying this factual conclusion, and following the reasoning of the Tribunal, Mumbai in State Bank of India v. Commissioner of Service Tax, the interest on delayed refund was correctly sanctioned from the date the application became complete and not from the earlier date when the incomplete application was first submitted. There was therefore no infirmity in treating 14.07.2018 as the effective date for sanctioning interest.

Interest on the refund was correctly sanctioned with effect from 14.07.2018, the date on which the refund application became complete.

Final Conclusion: The appeal is dismissed and the order under challenge is upheld; interest on the refund was correctly sanctioned from the date the refund application was rendered complete (14.07.2018).

Refund of tax collected without authority of law - Binding effect of Supreme Court judgment - Limitation for refund claims - Interest on delayed refund - Restoration for quantification of refund

Binding effect of Supreme Court judgment - Refund of tax collected without authority of law - Refund of service tax collected on foreman charges held to be payable where Supreme Court has declared no liability. - HELD THAT: - The Tribunal applied the settled principle that a decision of the Hon'ble Supreme Court declaring absence of liability renders any tax collected in respect of that liability to be collected without authority of law and therefore refundable. Relying on the Supreme Court's dismissal of the Revenue's SLP in the decision upholding that service tax was not chargeable on foreman services in chit-fund activity, the Tribunal found that the amounts collected compulsorily must be refunded to the appellant. The Tribunal set aside the orders of the lower authorities which had rejected the refund claim on merits. [Paras 5]

Refund claim allowed and impugned orders set aside.

Limitation for refund claims - Interest on delayed refund - Refund claim filed after delay; interest on delayed refund disallowed. - HELD THAT: - The Tribunal noted that Section 11B prescribes the period of limitation for filing refund claims and observed that the appellant filed the refund application on 19.01.2018 whereas the Supreme Court judgment was dated 07.01.2014, producing a four-year delay. While the principal amount was held refundable because collection was without authority of law, the Tribunal held that the appellant was not entitled to interest for the period of delay, reasoning that the appellant cannot take advantage of its own delay in prosecuting the claim. [Paras 6]

Interest for the delayed period is not allowed; only principal refundable.

Restoration for quantification of refund - Matter remitted to Original Authority for computation of refund and consequential benefits. - HELD THAT: - Having allowed the refund of amounts collected without authority of law but disallowed interest for the delayed period, the Tribunal restored the matter to the Original Authority to work out the refund payable and consequential benefits in accordance with the Tribunal's observations. [Paras 7]

File restored to the Original Authority for computation of refund and consequential benefits.

Final Conclusion: The appeal is allowed: the refund of service tax collected on foreman charges for the period 01.07.2012 to 31.05.2013 is directed to be granted as collection was without authority of law in view of the Supreme Court ruling; interest for the delayed refund claim is disallowed; matter remitted to the Original Authority for computation of the refund and consequential benefits.

Refund of unutilised CENVAT credit - procedural delay in debiting CENVAT account not defeating substantive right - compliance with condition 2(h) of Notification No.27/2012 - refund claim under Rule 5 of the CENVAT Credit Rules, 2004 - Event Management Service as input service

Refund of unutilised CENVAT credit - procedural delay in debiting CENVAT account not defeating substantive right - compliance with condition 2(h) of Notification No.27/2012 - refund claim under Rule 5 of the CENVAT Credit Rules, 2004 - Whether delay in debiting the CENVAT account at the time of filing the refund claim disentitles the appellant from refund of unutilised CENVAT credit claimed for exported services for April 2017 to June 2017. - HELD THAT: - The Tribunal found that the appellant had satisfied the substantive condition set out in para 2(h) of Notification No.27/2012 and, although the CENVAT account was debited on 31.3.2018 after the refund filing date of 20.2.2018, that delay was procedural and not deliberate. The Tribunal noted that the refund was claimed under Rule 5 of the CENVAT Credit Rules, 2004, and that by the time of filing the refund the Service Tax regime had been subsumed by GST, so there was no occasion to reflect the debit in ST-3 returns; the appellant had also not transitioned the credit to the GST regime and produced evidence to that effect. Relying on earlier decisions of this Tribunal and the Division Bench of CESTAT Mumbai treating similar delays as procedural, the Tribunal held that such procedural delay does not defeat the substantive right to refund and set aside the orders denying refund. [Paras 6]

Delay in debiting the CENVAT account was procedural and did not disentitle the appellant from claiming the refund; the impugned orders were set aside and the refund allowed subject to consequential relief.

Event Management Service as input service - definition of input service under CENVAT Credit Rules, 2004 - Whether the Event Management Service (provision of projector on rent for business meetings) qualifies as an input service eligible for CENVAT refund. - HELD THAT: - The Tribunal held that the Event Management Service in question falls within the definition of input service under the relevant rules and is eligible for refund. Applying the definition in the CENVAT Credit Rules, the Tribunal followed precedent where such services used in the course of business were held to be input services and allowed the refund of the amount earlier denied. [Paras 6]

Event Management Service is an input service for purposes of CENVAT refund and the denial of refund on this ground was set aside.

Final Conclusion: The appeal is allowed; the impugned orders rejecting the refund claim are set aside. The appellant is entitled to the refund of unutilised CENVAT credit for the period April 2017 to June 2017, including the amount relating to Event Management Service, subject to consequential relief.

Exemption for construction services under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) - exemption for construction services provided to statutory Agricultural Produce Marketing Committee / Mandi Parishad - works contract services and taxable liability under service tax regime - extended period of limitation in adjudication for alleged suppression - inadmissibility of Form 26AS as a substitute for books of account/returns for ascertaining gross turnover - assessment on the basis of books, invoices and prescribed documents

Exemption for construction services under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) - works contract services and taxable liability under service tax regime - Whether construction of houses under JNNURM attracts service tax for the period including 2009-10 to 2010-11 - HELD THAT: - Having considered the statutory notifications, earlier Tribunal precedents relied upon by the appellant and the nature of the works, the Tribunal found that the construction works carried out under JNNURM and similar schemes for provision of shelter to the poor do not attract service tax in the facts of this case. The Tribunal accepted that the works in question fall within the non-taxable ambit as interpreted in the cited decisions and concluded there is no tax liability on the appellant in respect of those construction works. [Paras 15, 18]

No service tax liability on construction works under JNNURM in the facts of this case; impugned findings to the contrary set aside.

Exemption for construction services provided to statutory Agricultural Produce Marketing Committee / Mandi Parishad - Education Guide and Mega Exemption Notification - Whether construction works executed for the Mandi Parishad are exempt from service tax under the applicable exemptions - HELD THAT: - The Tribunal examined the statutory character of the Mandi Parishad, relevant Board guidance and the Mega Exemption Notification. It held that the works executed for the Mandi Parishad are excluded from service tax in view of the Education Guide dated 20 June, 2012, Circular No.89/7/2006 and Notification No.25/2012-ST, finding that such construction works are not taxable services in the circumstances of this case. [Paras 14]

Construction works for the Mandi Parishad are exempt from service tax; the Commissioner's contrary conclusion is reversed.

Works contract services and taxable liability under service tax regime - voluntary discharge of tax prior to adjudication - Taxability of services provided to M/s Uncle Builders for 2009-10 and 2010-11 - HELD THAT: - The Tribunal noted that tax in respect of the work done for M/s Uncle Builders had been paid by the appellant prior to issuance of the show-cause notice. Coupled with the broader interpretational findings that similar construction works for government/statutory authorities were not taxable, the Tribunal found no further tax liability in respect of these works. [Paras 15]

No further service tax liability in respect of works for M/s Uncle Builders; prior payment noted and no additional demand sustained.

Extended period of limitation in adjudication for alleged suppression - inadmissibility of Form 26AS as a substitute for books of account/returns for ascertaining gross turnover - assessment on the basis of books, invoices and prescribed documents - Validity of invoking extended period of limitation and correctness of adopting Form 26AS to compute taxable turnover - HELD THAT: - The Tribunal held that extended period of limitation could not be invoked on the facts because the appellant maintained books of account and filed regular returns and there was no rejection of those records. The Revenue's adoption of Form 26AS to determine gross receipts was held to be improper, since Form 26AS is not a prescribed document under service tax rules for ascertaining gross turnover. The Tribunal reiterated that tax liability must be assessed on materials on record and prescribed documents such as bills, invoices and bank statements. [Paras 16, 17]

Extended limitation not available; adoption of Form 26AS to compute turnover is incorrect; assessment must proceed on books and prescribed documents.

Final Conclusion: The impugned order is set aside; the appeal is allowed. The Tribunal found no service tax liability on the appellant in respect of the JNNURM works and the works for the Mandi Parishad, rejected Revenue's use of Form 26AS to compute turnover, held extended limitation inapplicable on these facts, and directed that tax assessment, if any, be made only on the basis of books and prescribed documents with consequential relief to the appellant.

Taxability of receipts from insurance companies operating at motor vehicle dealers - distinction between provision of table space and rendering of service - discharge of tax liability under section 73(3) and denial under section 73(4) of the Finance Act, 1994 - penalty exemption under Explanation 2 to section 73 of the Finance Act, 1994 - business auxiliary service

Taxability of receipts from insurance companies operating at motor vehicle dealers - business auxiliary service - Receipts from insurance companies soliciting customers on the premises of the motor vehicle dealer are taxable as consideration for provision of business auxiliary service. - HELD THAT: - The Tribunal applied the reasoning of the Larger Bench in Pagariaya Auto Centre and subsequent Tribunal decisions which have determined, as a general rule, that monies received from insurance companies for operating at dealers' premises constitute taxable consideration for business auxiliary services. The appellant did not furnish any justification or evidence to distinguish its facts from those decisions or to establish that its activity fell outside this rule. Consequently, the receipts were held taxable in the hands of the appellant for the period in question.

Taxability of the receipts was upheld.

Distinction between provision of table space and rendering of service - The exclusion from tax available where only 'table space' is provided was not established by the appellant. - HELD THAT: - The Larger Bench's decision recognises a possible exclusion if an assessee can demonstrate that only mere provision of 'table space' (and no service) occurred. The appellant relied on that distinction in its grounds, but failed to produce facts or evidence to show that its activity was limited to provision of table space. The Tribunal therefore found no basis to apply the exclusion to the appellant's receipts.

The table-space exclusion does not apply on the facts before the Tribunal.

Discharge of tax liability under section 73(3) and denial under section 73(4) of the Finance Act, 1994 - penalty exemption under Explanation 2 to section 73 of the Finance Act, 1994 - Penalties imposed under the Finance Act were set aside because the appellant had discharged the tax and interest before issuance of the show cause notice, attracting the protection of section 73(3) and Explanation 2. - HELD THAT: - Following the approach in Addis Marketing and other similar decisions, the Tribunal noted that the appellant paid the tax liability and interest on 14 March 2012, before the show cause notice was issued. That payment is in the manner contemplated by section 73(3), and section 73(4) - which could deny recourse to section 73(3) - was not applicable on the facts (no presumption of fraud, collusion, willful mis-statement or suppression was made out). By operation of Explanation 2 to section 73, no penalty was leviable. Accordingly, penalties imposed by the original authority and upheld in the impugned order were set aside.

Penalties imposed under the Finance Act were vacated; tax and interest liability remained.

Final Conclusion: The appeal was disposed of by affirming the taxability of receipts from insurance companies as business auxiliary services for the period between April 2007 and January 2012, rejecting the claimed table-space exclusion on the facts, but allowing the appeal insofar as all penalties were set aside because the assessee had paid the tax and interest prior to issuance of the show cause notice and thus fell within the protection of section 73(3) and Explanation 2.

Relevancy of statements under Section 9D - Right to cross-examination in departmental adjudication - Admissibility of third party evidence for proving clandestine transactions - Burden on the Revenue to prove paper transactions and clandestine removal - Compliance with Rule 9 of the Cenvat Credit Rules - Violation of principles of natural justice

Relevancy of statements under Section 9D - Right to cross-examination in departmental adjudication - Violation of principles of natural justice - Reliance on statements of third parties recorded during investigation without permitting the assessee to cross examine those witnesses and without satisfying conditions of Section 9D is impermissible and vitiates the order. - HELD THAT: - The Tribunal held that statements relied upon by the Department were third party evidence recorded during investigation and that the appellant's request to cross examine those persons was denied without adequate justification. Cross examination is a material procedural safeguard and, insofar as Section 9D governs relevancy of departmental statements, the affected party must be given an opportunity to test such statements. Reliance solely on voluntary third party statements, when the assessee's request for cross examination is rejected and the rejection was not properly communicated or justified, results in a breach of principles of natural justice. Decisions of the High Courts and this Tribunal establish that third party statements cannot be treated as conclusive evidence against an assessee unless the statutory conditions for their admissibility are met and the assessee is afforded the chance to cross examine. [Paras 6, 7, 9]

Findings based solely on third party statements without allowing cross examination and without meeting the conditions of Section 9D are unsustainable; the order is set aside on this ground.

Admissibility of third party evidence for proving clandestine transactions - Burden on the Revenue to prove paper transactions and clandestine removal - Compliance with Rule 9 of the Cenvat Credit Rules - Cenvat credit cannot be disallowed merely because suppliers were subsequently found non existent where the recipient has maintained invoice records complying with Rule 9 and there is no independent, corroborative evidence proving paper transactions or clandestine removals. - HELD THAT: - The Tribunal noted authorities holding that allegations of clandestine manufacture or paper transactions require corroborative and clinching evidence (such as excess production, unexplained power consumption, flow of funds, dispatch particulars, or absence of physical receipt of inputs). In the present case the appellant maintained records of invoices, RG 23A entries and particulars required under Rule 9 and had cleared final products on payment of duty. Mere discovery that supplier entities were non existent does not automatically negate the recipient's entitlement to credit unless Revenue discharges the burden of proving that the transactions were only on paper. Precedents were applied to hold that in absence of such corroboration, the disallowance cannot be sustained. [Paras 7, 8, 9]

Disallowance of Cenvat credit on the basis that supplier firms were non existent, without independent corroborative evidence and despite compliance with Rule 9 by the assessee, is unjustified; the impugned demand is set aside.

Final Conclusion: The appellate order is set aside. The Tribunal held that denial of opportunity to cross examine third party witnesses and exclusive reliance on their statements violated principles of natural justice and statutory safeguards; further, in absence of corroborative evidence proving paper transactions and given the appellant's compliance with Rule 9, the disallowance of Cenvat credit for the tax period 2013 14 could not be sustained. The appeal is allowed.

Ex-parte assessment vitiated for failure to afford reasonable opportunity - reasonable opportunity and personal hearing under Section 27(4) of the Tamil Nadu Value Added Tax Act, 2006 - remand for fresh consideration after complying with mandatory hearing requirement

Ex-parte assessment vitiated for failure to afford reasonable opportunity - reasonable opportunity and personal hearing under Section 27(4) of the Tamil Nadu Value Added Tax Act, 2006 - Impugned assessment order passed without affording the petitioner a personal hearing and whether such non-compliance vitiates the assessment. - HELD THAT: - The Court found that the respondent issued a notice and proceeded to pass an ex-parte assessment order without obtaining any reply or affording the petitioner the mandatory personal hearing contemplated by Section 27(4) of the TNVAT Act. Although the petitioner did not reply to the notice purportedly due to the pandemic-related closure of the restaurant, Section 27 requires that a reasonable opportunity, including personal hearing, be given before concluding assessment. Non-compliance with that mandatory requirement rendered the impugned order unsustainable in law. [Paras 6]

The impugned assessment dated 11.11.2020 is set aside for failure to afford the mandatory personal hearing.

Remand for fresh consideration after complying with mandatory hearing requirement - Whether the matter should be remanded for fresh consideration and the scope and timeline of such remand. - HELD THAT: - Having set aside the ex-parte order for procedural infirmity, the Court directed that the matter be remitted to the assessing authority for fresh adjudication on merits after giving reasonable opportunity, including personal hearing as required by Section 27(4). The petitioner was directed to produce available records at the personal hearing. The assessing authority was required to complete the exercise and pass appropriate orders in accordance with law within three months from receipt of the copy of this order. [Paras 7]

The matter is remanded to the respondent for fresh consideration after affording reasonable opportunity including personal hearing; to be completed within three months.

Final Conclusion: Writ petition allowed; ex-parte assessment set aside and remitted for fresh consideration after granting the mandatory personal hearing under Section 27(4) of the TNVAT Act, 2006, to be completed within three months.

Writ against show-cause notice - Jurisdictional competence to issue notice - Allegation of malafides requires impleading responsible authority - Obligation to file objections and produce evidence before adjudicating - Administrative fact-finding and expertise of assessing authorities - Right to statutory appeal after administrative decision

Writ against show-cause notice - Jurisdictional competence to issue notice - Allegation of malafides requires impleading responsible authority - Administrative fact-finding and expertise of assessing authorities - Permissibility of entertaining a writ petition challenging show-cause notices issued for proposed revision of assessment. - HELD THAT: - The High Court held that writ relief against a show-cause notice is appropriate only if the notice was issued by an authority lacking jurisdiction or if malafides are specifically alleged; even where malafides are averred, the individuals against whom such allegations are made must be impleaded in their personal capacity. The Court emphasised that disputed factual questions arising out of assessment of turnover or document verification involve administrative expertise and cannot be finally resolved by the High Court at the interlocutory stage. The prescribed course is for the noticee to file objections and produce relevant documents and evidence before the competent authorities, who must be permitted to conduct inquiry, verify records and decide the matter on merits in accordance with law. [Paras 2]

Writ petition challenging show-cause notice dismissed insofar as seeking immediate adjudication; noticee must file objections and allow competent authority to proceed.

Obligation to file objections and produce evidence before adjudicating - Right to statutory appeal after administrative decision - Administrative fact-finding and expertise of assessing authorities - Direction to the assessing authority and the petitioner regarding further proceedings in respect of the proposed revision for Assessment Years 2007-08 and 2008-09. - HELD THAT: - The Court directed that the petitioner may submit its objections, documents and evidence within three weeks from receipt of the order. On receipt, the respondent-authority is to consider those objections on merits and in accordance with law, affording the petitioner opportunity as contemplated under the statute. The Court observed that if the petitioner remains aggrieved by the final administrative order, it may pursue the statutory appellate remedies provided by law. The decision leaves the substantive assessment and factual inquiries to the competent authorities for determination. [Paras 3]

Petitioner permitted to file objections within three weeks; respondent directed to consider and decide on merits; petitioner retains right to statutory appeal thereafter.

Final Conclusion: Writ petitions disposed of by directing the petitioner to submit objections and evidence within three weeks and by directing the assessing authority to consider and decide the proposed revisions for Assessment Years 2007-08 and 2008-09 on merits; no costs.

Bail under Section 439 Cr.P.C. - Commercial quantity and embargo on bail under Section 37 of the NDPS Act - Admissibility of confessional statements under Section 67 of the NDPS Act - Reliance on recovery, panch witnesses and documents in bail adjudication - Framing of charges as a factor in bail consideration

Bail under Section 439 Cr.P.C. - Commercial quantity and embargo on bail under Section 37 of the NDPS Act - Reliance on recovery, panch witnesses and documents in bail adjudication - Framing of charges as a factor in bail consideration - Application for bail by the petitioner was considered and refused. - HELD THAT: - The Court examined the material relied upon by the NCB, notably the recovery of contraband of a commercial quantity (2.7 Kg. of charas) from checked-in baggage, the presence of two panch witnesses, and documents linking the petitioner to the recovered baggage. The Court noted that charges have been framed (and not challenged) and that the veracity of public witnesses and other evidence cannot be tested at the bail stage. Given the commercial quantity recovered and the attendant embargo under Section 37 of the NDPS Act, coupled with the recovery and ancillary material, the Court found no ground to enlarge the petitioner on bail. The submissions as to alleged non-recovery from the petitioner, absence of CCTV or fingerprints, retraction of statement and possibility of false implication were considered but found insufficient to outweigh the material on record for the purpose of bail. [Paras 7, 8, 9]

Bail application dismissed; no ground for bail made out in view of the commercial quantity recovery, supporting panch evidence and framed charges.

Admissibility of confessional statements under Section 67 of the NDPS Act - Statements recorded under Section 67 of the NDPS Act by the co-accused and the petitioner were treated as admissible material at the bail stage. - HELD THAT: - The Court observed that the petitioner and the co-accused had made disclosures in statements under Section 67 NDPS Act admitting complicity and conspiracy, and treated those statements as admissible for consideration at this stage. While noting the petitioner's contention of retraction and threat, the Court held that such contentions go to the weight and credibility of the statements, matters to be tested during trial rather than at the bail stage. [Paras 3, 6, 9]

Section 67 statements were regarded as admissible material for the limited purpose of deciding the bail application; their ultimate credibility to be tested at trial.

Final Conclusion: The bail petition under Section 439 Cr.P.C. is dismissed: having regard to recovery of a commercial quantity of narcotic, supporting panch evidence and documents, framed charges and admissible confessional disclosures under Section 67 NDPS Act, the court found no ground for bail; no opinion expressed on merits.

Summary order. Petition disposed of as withdrawn with liberty to pursue contentions in the pending bail application; observations in the order dated 03.06.2021 and remand orders are confined to custody and shall not determine the merits of the bail application.