TaxTMI Updates e-Newsletter
Aug 09,2024

Seizure and detention of goods for non-production of statutory documents under the GST regime - seizure and penalty procedure under section 129(3) of the UPGST Act - burden to produce invoices, waybills and other accompanying documents at the time of detention and in appellate proceedings - scope of judicial interference in departmental detention and appeal orders

Seizure and detention of goods for non-production of statutory documents under the GST regime - burden to produce invoices, waybills and other accompanying documents at the time of detention and in appellate proceedings - scope of judicial interference in departmental detention and appeal orders - Impugned appellate order rejecting the petitioners' appeal under section 129(3) of the UPGST Act was not liable to interference for failure to produce requisite documents. - HELD THAT: - The Court noted that on physical verification the detained consignment was not accompanied by proper statutory documents (invoices, bility, e-way bill etc.). The petitioners did not produce the requisite documents at the time of detention, nor did they place any pleading or material before the authorities or before this Court to show that the goods were accompanied by the relevant documents. In those circumstances, and having perused the record, the Court found no basis to disturb the order passed in appeal under section 129(3) of the UPGST Act. Absence of any supporting material or argument by the petitioners meant there was no ground for judicial interference with the departmental decision to reject the appeal against seizure.

Writ petition dismissed; impugned order upheld.

Final Conclusion: The petition challenging the appellate rejection of the claim for release of detained goods was dismissed for failure to produce statutory documents or any material justifying interference with the departmental order.

Cancellation of registration - non-filing of returns - restoration of registration on compliance - determination of tax liability upon filing returns - pragmatic approach to protect revenue and business continuity

Cancellation of registration - non-filing of returns - restoration of registration on compliance - Validity of the order cancelling the petitioner's registration under the Central/West Bengal Goods and Services Tax Act, 2017 and the appropriate remedial direction. - HELD THAT: - The Court found that the registration was cancelled solely on the ground of non-filing of returns and there was no averment that the petitioner had adopted any dubious process to evade tax. Observing that suspension or revocation of registration could be counterproductive to the revenue because it prevents the assessee from issuing invoices and impedes tax recovery, the Court took a pragmatic view and, having regard to a Division Bench direction in Subhankar Golder (supra), set aside the cancellation order dated 15th December, 2022. Restoration was made conditional: the petitioner must file returns for the entire period of default and pay the requisite tax, interest, fine and penalty so that the respondents can determine final liability. The Court imposed a timeline of four weeks from receipt of the server copy for compliance and directed the respondents to activate the portal within one week to enable filing and payment. Failure to comply will render the benefit of the order inapplicable and result in automatic dismissal of the writ petition. [Paras 8, 9, 10, 11, 12]

Order cancelling registration set aside subject to the petitioner filing returns for the period of default and paying requisite tax, interest, fine and penalty within four weeks; respondents to activate portal within one week; registration to be restored on compliance, otherwise writ petition to stand dismissed.

Final Conclusion: The Court allowed the writ petition insofar as the cancellation of registration is set aside on conditions: file returns for the entire default period and pay tax, interest, fine and penalty within four weeks, and the respondents must activate the portal within one week; non-compliance will forfeit the relief and result in dismissal of the petition.

Challenge to detention and penalty under Section 129(3) of the CGST/WBGST Act, 2017 - alternative remedy by statutory appeal under Section 107 - proviso to Section 107(6) regarding pre-deposit and appellate pre-deposit requirement - bonds and bank guarantee furnished as security for penalty - interim non-insistence of pre-deposit while valid security subsists

Alternative remedy by statutory appeal under Section 107 - Maintainability of writ petition in presence of an alternative statutory remedy by appeal - HELD THAT: - The Court noted that the petitioners were aggrieved by an order passed under Section 129(3) and that an appeal remedy under Section 107 of the Act was available. In view of the availability of the statutory appeal, the Court held that it ordinarily ought not to entertain the writ petition and directed the petitioners to approach the appellate authority as the appropriate forum for adjudication. The writ petition was accordingly disposed of at this stage to enable the petitioners to pursue the appellate remedy. [Paras 5, 6, 8]

Petitioners directed to file appeal under Section 107; writ petition disposed to permit adjudication by the appellate authority.

Proviso to Section 107(6) regarding pre-deposit and appellate pre-deposit requirement - bonds and bank guarantee furnished as security for penalty - interim non-insistence of pre-deposit while valid security subsists - Whether appellate authority may insist on pre-deposit despite bonds and bank guarantee and directions for expeditious disposal - HELD THAT: - The Court addressed the petitioners' apprehension that the appellate authority might require further payment under the proviso to Section 107(6). Observing that the entire penalty had already been secured by bonds and a bank guarantee submitted to the Assistant Commissioner, the Court held that so long as those securities remain valid the appellate authority should not call for a fresh pre-deposit. The Court further directed that if the petitioners approach the appellate authority within 15 days, the appellate authority shall, having regard to the pendency of the writ petition, hear and dispose of the appeal on merits within eight weeks from communication of this order without insisting on pre-deposit. [Paras 7, 8]

Appellate authority directed not to insist on pre-deposit while valid bonds/bank guarantee subsist and to decide the appeal on merits within eight weeks.

Final Conclusion: Writ petition disposed to enable petitioners to pursue the statutory appeal under Section 107; appellate authority directed to hear and dispose the appeal on merits within eight weeks and not to insist on pre-deposit while the bonds and bank guarantee furnishing security for the penalty remain valid.

Use of Hindi and English for official purposes - continued use of English for Central Government communications in region "C" - requirement to furnish translations or English copies of orders to persons in non Hindi speaking regions - service of adjudicatory orders in a language intelligible to the recipient - effectiveness of orders contingent on service of English copy and commencement of limitation

Use of Hindi and English for official purposes - continued use of English for Central Government communications in region "C" - service of adjudicatory orders in a language intelligible to the recipient - effectiveness of orders contingent on service of English copy and commencement of limitation - Whether the Commissioner (Appeals) could pass and supply appellate orders in Hindi only in the State of Andhra Pradesh (region "C") without furnishing English copies to the parties - HELD THAT: - The court examined the mandate of continued use of English for certain Central Government communications and the Rules made thereunder which require that documents referred to in the Official Language Act relevantly be in both Hindi and English and that communications from a Central Government office to persons in region "C" shall be in English. Having regard to Section 3(3) of the Official Language Act and Rules including the obligation in Rule 6 and the prescription in Rule 3(3) that communications to region "C" be in English, the Court held that service of appellate orders by a Central Government authority in Andhra Pradesh only in Hindi is not permissible. The Court directed that English copies of the impugned appeal orders must be furnished to the petitioners and further provided that the Commissioner (Appeals)'s orders will not take effect until English copies are served, and the limitation for taking steps against such orders will commence only upon such service. The court therefore required the Commissioner (Appeals) to supply English copies within a stipulated time and preserved the petitioners' right to pursue remedies thereafter. [Paras 3, 14, 15]

Orders passed by the Commissioner (Appeals) only in Hindi are not permissible in region "C" (Andhra Pradesh); English copies must be furnished, the orders will not take effect until English copies are served, and limitation for challenge commences on such service.

Final Conclusion: Writ petitions disposed: Commissioner (Appeals) directed to furnish English copies of the appeal orders within three weeks; the impugned orders shall not operate until English copies are served and limitation to challenge those orders begins upon such service; no order as to costs.

Computation of period of limitation for refund applications - Exclusion of pandemic period from limitation - Quashing and remanding of administrative rejection - Interest on delayed refund - Right to personal hearing before denial of refund

Computation of period of limitation for refund applications - Exclusion of pandemic period from limitation - Quashing and remanding of administrative rejection - Rejection orders for nine refund applications were set aside and the matters remanded for fresh consideration in light of the CBIC exclusion of 1 March 2020 to 28 February 2022 from limitation computation. - HELD THAT: - The Court noted the CBIC Circular of 5 July 2022 which, on the council's recommendation, excluded the period 1 March 2020 to 28 February 2022 for computing the limitation for filing refund applications under the CGST Act and deemed the notification operative w.e.f. 1 March 2020. Applying that exclusion to the refund claims listed for periods May 2018 to January 2019, the Court observed that the applications filed on 27-29 March 2021 fall within the excluded period and therefore prima facie appear to be within time. In consequence, the Court quashed and set aside the orders rejecting the refund applications as time-barred and remanded the matters to the appropriate authority for fresh consideration in the light of the Circular/notification. [Paras 2, 3]

Rejection orders quashed and matter remanded for fresh consideration applying the exclusion of 1 March 2020 to 28 February 2022.

Interest on delayed refund - Interest claim on the refunds is to be restricted by excluding the period from 1 August 2022 to 1 March 2024. - HELD THAT: - The Court observed that the petitioner delayed seeking reconsideration after the CBIC Circular of 5 July 2022 and that the petition itself was filed on 1 March 2024. The Court therefore excluded the period from 1 August 2022 (allowing a reasonable time after the Circular) up to 1 March 2024 from any entitlement to interest on the refunds. This is a directed limitation on interest, not a determination on entitlement to refund itself. [Paras 3]

If entitled in law to interest on any refund, interest shall exclude the period 1 August 2022 to 1 March 2024.

Right to personal hearing before denial of refund - Authority directed to reconsider refund applications and to afford a personal hearing with at least five working days' notice if it intends to refuse the refund. - HELD THAT: - The Court gave specific procedural directions to ensure fair adjudication on remand. The refund applications are to be reconsidered and disposed of by 30 September 2024. If the authority proposes not to grant the refund for any reason, the petitioner must be granted a personal hearing, with notice of that hearing communicated at least five working days in advance. [Paras 4]

Reconsideration to be completed by 30 September 2024 and, if refusal is contemplated, petitioner to be given a personal hearing with at least five working days' notice.

Final Conclusion: The High Court set aside the time-bar rejections of nine refund applications and remanded them for fresh consideration in light of the CBIC exclusion of 1 March 2020 to 28 February 2022; interest, if any, is to exclude 1 August 2022-1 March 2024; reconsideration to be completed by 30 September 2024 and a personal hearing with five working days' notice must be given before any refusal.

Mandatory versus directory character of statutory time limits - construction of 'shall' in statutory provisions - refund of unutilised input tax credit - section 54(7) - time limit for passing refund order - section 56 - interest on delayed refunds as remedy for delay - Rule 92 - procedure for rejection and opportunity to be heard - exclusion of limitation period by notification and judicial order

Mandatory versus directory character of statutory time limits - construction of 'shall' in statutory provisions - section 54(7) - time limit for passing refund order - section 56 - interest on delayed refunds as remedy for delay - Whether the sixty day period in section 54(7) is mandatory so as to invalidate an order passed after the period, or directory in character - HELD THAT: - The court examined the intent of the legislature and the statutory scheme to determine whether the use of the word 'shall' makes the sixty day period mandatory. While 'shall' ordinarily raises a presumption of mandatoriness, that presumption is rebuttable by context, object and consequences. Section 56 provides a statutory remedy of interest where refund is not made within sixty days, indicating that delay is dealt with by compensation rather than by nullification of subsequent orders. The court observed that rigidly treating the period as mandatory would not further the object of the statute and could produce undue injustice or inconvenience. Consequently, having regard to the scheme of sections 54 and 56 and the remedial consequences provided for delayed refunds, the sixty day period in section 54(7) is directory in nature rather than mandatory. [Paras 8, 9, 11]

The sixty day time limit in section 54(7) is directory and not mandatory; delay in passing an order does not per se invalidate the order where the statutory scheme provides remedial consequences for delay.

Refund of unutilised input tax credit - Rule 92 - procedure for rejection and opportunity to be heard - exclusion of limitation period by notification and judicial order - Whether the petitioner's refund claim was rightly rejected in view of procedural non-compliance, and whether the brief delay in acknowledgement affected the validity of the rejection - HELD THAT: - The petitioner's refund application for exports during February 2021 to August 2021 was acknowledged after a two day delay and a show cause notice was issued. The petitioner failed to reply to the notice within the prescribed time and sought an extension on the last day, but did not provide the required response; Rule 92 mandates opportunity to be heard and allows the proper officer to issue a notice in FORM RFD-08 and thereafter pass an order. The court found that the authority acted within the procedure prescribed by Rule 92 in passing an ex parte rejection after the applicant failed to comply with the time given to reply. Further, the short delay in acknowledgement and in passing the order was subject to exclusion by relevant executive notifications and a Supreme Court order excluding the period affected by the pandemic, so the two day delay did not render the order invalid. On merits, the Appellate Authority's additional factual findings concerning verification of premises, e-way bill discrepancies and mismatch in goods/value were considered and the court found no procedural infirmity or erroneous exercise of jurisdiction warranting interference. [Paras 3, 4, 12, 13, 14]

The rejection of the refund claim was valid: the petitioner failed to comply with the prescribed opportunity to reply; the short delay was excused by exclusionary orders; and the impugned orders disclose no procedural infirmity or error warranting interference.

Final Conclusion: Writ petition dismissed; the court held that section 54(7)'s sixty day period is directory not mandatory, the limited delay was excused by exclusionary orders, and the rejection of the refund claim and its appellate dismissal were legally sustainable.

Ultra vires - recommendation of the GST Council - Section 168A of the CGST Act, 2017 - force majeure - adoption of Central notifications under State GST law - interim protection from coercive action

Ultra vires - recommendation of the GST Council - Section 168A of the CGST Act, 2017 - Validity of Notification No.56/2023 dated 28.12.2023 insofar as it purportedly extends time limits under Section 73(9) by invoking Section 168A without a GST Council recommendation - HELD THAT: - The Court recorded that there is no GST Council recommendation for issuance of Notification No.56/2023 and observed prima facie that the notification is not in consonance with Section 168A of the CGST Act, 2017. The Court noted the contention that issuance of such an extension by the Central Board without the mandatory recommendation would render the notification ultra vires the statutory scheme. Having considered the parties' submissions, the Court concluded at the prima facie stage that if the notification cannot withstand legal scrutiny, consequential actions founded upon it would also be vulnerable, and therefore directed the Respondents to place on record their stand and supporting materials before adjudication on merits. [Paras 4, 5, 6, 13, 14]

Prima facie found not in consonance with Section 168A; Respondents directed to file affidavits and materials to justify the notification for further adjudication.

Force majeure - Whether the grounds relied upon for extending limitation (as reflected in the Minutes of the 49th GST Council meeting) amount to force majeure permitting invocation of Section 168A - HELD THAT: - The petitioners challenged the extension on the basis that lack of manpower and completion difficulties referred to in the GST Council minutes do not constitute force majeure. The Court observed that the applicability of force majeure to justify Notification No.56/2023 requires examination and directed the Respondents to place on record the materials on which they rely so that the Court may determine whether the statutory threshold for invoking force majeure is satisfied. The Court did not decide the question on merits but ordered a factual and legal inquiry. [Paras 6, 7, 14]

Issue remanded for fresh consideration; Respondents to file evidence and materials supporting applicability of force majeure.

Adoption of Central notifications under State GST law - Whether the Assam GST authorities could apply/adhere to Notification No.56/2023 in the absence of a corresponding extension under the Assam GST Act, 2017 - HELD THAT: - The Court noted the petitioners' submission that Section 11(4) of the Assam GST Act, 2017 permits adoption of certain Central notifications only in relation to specified matters and does not contemplate adoption of a notification granting extension of limitation. The Assam GST counsel stated that State authorities have been following Central notifications. The Court observed that if Notification No.56/2023 is ultra vires the CGST Act, its consequential application under the State law would also be questionable, and directed the State respondents to clarify their legal basis and place materials on record. [Paras 8, 11, 12, 13]

State respondents directed to file their stand and materials; validity and applicability under the Assam GST Act to be examined.

Interim protection from coercive action - Relief in the form of interim protection against coercive action based on the impugned assessment order dated 26.04.2024 - HELD THAT: - Having noted the prima facie doubts about the legality of Notification No.56/2023 and the need for respondents to place material on record regarding the recommendation and force majeure, the Court held that the petitioners are entitled to interim protection pending adjudication. The order restrained coercive action founded on the impugned assessment order until the next date of hearing, while directing respondents to file affidavits by a specified date to enable further consideration. [Paras 14, 15, 16]

Interim protection granted; no coercive action shall be taken on the basis of the impugned assessment order dated 26.04.2024 until the next listed date; respondents to file affidavits by 19.08.2024.

Final Conclusion: Notice issued and returnable; prima facie doubt recorded on the validity of Notification No.56/2023 under Section 168A of the CGST Act, 2017 and on the claimed applicability of force majeure; respondents directed to file affidavits and supporting materials by 19.08.2024; interim protection granted against coercive measures arising from the impugned assessment order dated 26.04.2024.

Provisional attachment to protect revenue - Power of Commissioner under Section 83(1) of the CGST Act - Delegation/vesting of Commissioner's powers in Principal Director General/Principal Additional Director General - Objection under Rule 159(5) of the CGST Rules

Power of Commissioner under Section 83(1) of the CGST Act - Delegation/vesting of Commissioner's powers in Principal Director General/Principal Additional Director General - Provisional attachment to protect revenue - Validity of the provisional attachment order under Section 83(1) of the CGST Act when signed by the Principal Additional Director General of GST Intelligence instead of a Commissioner - HELD THAT: - Section 83(1) confers power to provisionally attach property, including bank accounts, on the Commissioner where he is of the opinion that such attachment is necessary to protect the Government revenue. The term "Commissioner" is defined in Section 2(24) to include the Commissioner of central tax and the Principal Commissioner appointed under Section 3. Section 3 and the administrative notification relied upon by the respondents indicate that the functional exercise of the Principal Chief Commissioner's powers can be effected by the Principal Director General, and by extension officers such as the Principal Additional Director General performing empowered functions under the notified delegation. The Court therefore held that the impugned order, having been passed by the Principal Additional Director General of GST Intelligence pursuant to the delegation/vesting of powers, was not rendered without jurisdiction merely because it was not signed by an officer titled "Commissioner". The petitioner's contention that only an officer bearing the strict designation "Commissioner" could sign an order under Section 83(1) was rejected on this basis. [Paras 6, 7, 8, 9, 10]

Impugned provisional attachment order was not invalid for want of jurisdiction because the Principal Additional Director General acted pursuant to delegated/vested powers of the Commissioner.

Objection under Rule 159(5) of the CGST Rules - Provisional attachment to protect revenue - Requirement that the Commissioner decide the petitioner's pending objections under Rule 159(5) in relation to the provisional attachment and blocked Electronic Credit Ledger - HELD THAT: - The petitioner had filed objections under Rule 159(5) which remained undecided on the record. While the respondents stated that reasons to believe and the file material exist, the Court found it appropriate to secure an expeditious administrative decision on those objections. In view of the pendency and the statutory scheme that gives the affected person a right to have objections considered, the Court directed that the Commissioner (being the authority competent to adjudicate) shall decide the objections forthwith and in any event within a limited timeframe. [Paras 11, 12, 13]

The Commissioner is directed to decide the petitioner's objections under Rule 159(5) expeditiously and, in any event, within three weeks from the date of the order.

Final Conclusion: The challenge to the provisional attachment order was dismissed on the ground that the Principal Additional Director General validly acted under delegated/vested powers of the Commissioner; however, the petition was disposed of by directing the Commissioner to decide the petitioner's pending objections under Rule 159(5) within three weeks.

Seizure and detention of goods for incomplete E-way bill Part B - technical defect in E-way bill not indicating intention to evade tax - mens rea for tax evasion - penalty under Section 129(3) of the UPGST Act - production of E-way bill and accompanying documents as justification for release - refund/return of security deposited pursuant to seizure

Seizure and detention of goods for incomplete E-way bill Part B - technical defect in E-way bill not indicating intention to evade tax - mens rea for tax evasion - penalty under Section 129(3) of the UPGST Act - production of E-way bill and accompanying documents as justification for release - Validity of seizure, detention and penalty where Part B of the E-way bill was not filled initially but was subsequently filled and there was no discrepancy between goods and accompanying documents. - HELD THAT: - The Court found as a matter of fact that there was no variation between the goods and the accompanying documents and that Part B of the E-way bill had been duly filled even before issuance of notice and the seizure order; the revenue did not record any finding of mens rea to evade tax. Relying on earlier decisions dealing with similar factual matrices, the Court treated the omission in Part B as a technical error which, without a finding of intention to evade tax or discrepancy in the consignment, does not sustain detention or attract the penalty imposed under Section 129(3) of the UPGST Act. For these reasons the impugned orders of seizure, detention and penalty were held unsustainable and were quashed. [Paras 8, 11]

Impugned orders of detention/seizure and penalty quashed for lack of any finding of intention to evade tax and because the defect in the E-way bill was technical while documents matched the goods.

Refund/return of security deposited pursuant to seizure - production of E-way bill and accompanying documents as justification for release - Entitlement to return of security and refund of amounts deposited pursuant to the impugned orders. - HELD THAT: - Consequent upon quashing the seizure and penalty orders, the Court directed that any amount deposited by the petitioner pursuant to the impugned orders shall be refunded. The Court ordered return of security and refund within the time periods specified in the order, treating such relief as consequential to the primary determination that the orders were unsustainable in law. [Paras 12, 13]

Petition allowed; amounts/security deposited pursuant to the impugned orders to be refunded within the period directed by the Court.

Final Conclusion: The writ petition was allowed: the orders of detention, seizure and penalty were quashed as the omission in Part B of the E-way bill was a technical defect without any finding of intention to evade tax, and any amounts or security deposited pursuant to the impugned orders were directed to be refunded within the time prescribed by the Court.

Detention and seizure under Section 129 of the CGST Act - confiscation and penalty proceedings under Section 130 of the CGST Act - intent to evade payment of tax as a mandatory prerequisite for proceedings under Sections 129 and 130 - production of amended E-way bill during detention proceedings

Detention and seizure under Section 129 of the CGST Act - intent to evade payment of tax as a mandatory prerequisite for proceedings under Sections 129 and 130 - production of amended E-way bill during detention proceedings - Legality of detention, seizure of goods and levy of penalty where an amended E-way bill was produced and no finding of intention to evade tax was recorded - HELD THAT: - The Court found that the goods were detained on the ground that the E-way bill had expired but it was not disputed that an amended E-way bill had been produced before the seizure order. The revenue did not record any finding of mens rea or intention to evade tax. Relying on the reasoning in Shyam Sel (paras 10, 11 & 13), the Court held that proceedings under Section 129 (and Section 130) require intent to evade payment of tax as a sine qua non; absent any recorded intent, detention, seizure and levy of penalty under Section 129 are not sustainable and, on the facts, the authority ought to have considered alternative proceedings (for example under Section 122) rather than invoking Section 129. Applying that legal principle to the present facts, the impugned order could not be sustained. [Paras 7, 8, 9]

Impugned order of detention, seizure and levy of penalty quashed for want of requisite finding of intent to evade tax; writ allowed.

Final Conclusion: The writ petition is allowed; the order detaining and seizing the goods and imposing penalty is quashed for lack of any finding of intent to evade tax, and any amount deposited during the writ proceedings shall be refunded within one month on production of certified copy of this order.

Cancellation of GST registration - retrospective cancellation of registration - natural justice and notice requirements - power to cancel registration including retrospective effect under Section 29(2) of the CGST Act - failure to furnish returns for a continuous period - sufficiency and intelligibility of reasons for administrative action - suspension of registration under Rule 21A - notice procedure under Rule 22(1) and FORM GST REG-17

Retrospective cancellation of registration - power to cancel registration including retrospective effect under Section 29(2) of the CGST Act - sufficiency and intelligibility of reasons for administrative action - Validity of cancelling the petitioner's GST registration with retrospective effect - HELD THAT: - The Court examined the Proper Officer's exercise of power under Section 29(2) of the CGST Act to cancel registration retrospectively and held that such cancellation cannot be whimsical or arbitrary and must be informed by reason. The impugned showcause notice and the order relied only on non-filing of returns for a continuous period of six months and did not propose retrospective cancellation. The notice did not contain intelligible or adequate reasons to support cancellation with retrospective effect, nor did the order independently furnish reasons justifying backdating. In those circumstances, retrospective cancellation was unsustainable. The Court therefore modified the impugned order so that cancellation operates prospectively from the date of the showcause notice, 13.11.2023. [Paras 5, 11, 12, 13]

Cancellation upheld only prospectively; retrospective cancellation set aside and order modified to operate from 13.11.2023.

Natural justice and notice requirements - notice procedure under Rule 22(1) and FORM GST REG-17 - suspension of registration under Rule 21A - failure to furnish returns for a continuous period - Whether principles of natural justice were violated by cancelling registration ab initio without a proposal in the showcause notice and whether the reasons given were intelligible - HELD THAT: - The Court found that the impugned showcause notice suspended registration and invited a reply, but did not propose cancellation ab initio. The only ground stated was non-filing of returns for six continuous months; references in the order to Rule 22(1) and Rule 21A(2A) were inapposite or did not convey intelligible reasons for backdating cancellation. Because retrospective cancellation was not proposed in the notice, adopting such a measure in the final order breached the principles of natural justice. The lack of coherent reasoning in the order compounded the defect. [Paras 5, 6, 7, 8, 12]

Retrospective cancellation set aside for violation of natural justice and for absence of intelligible reasons; prospective suspension/cancellation from 13.11.2023 permitted.

Final Conclusion: The petition is disposed of by modifying the impugned order: the petitioner's GST registration stands cancelled only with effect from 13.11.2023 (date of the showcause notice); retrospective cancellation from the date of registration is set aside. The respondent remains free to initiate or pursue any statutory action in accordance with law.

Availability of statutory appellate remedy under Section 107 - time limit for issuance of show cause notice under Section 54(7) of the Central Goods and Services Tax Act, 2017 - remedy of approaching the appellate authority

Availability of statutory appellate remedy under Section 107 - remedy of approaching the appellate authority - Maintainability of the writ petition in view of the availability of an alternative statutory remedy before the appellate authority. - HELD THAT: - The Court considered the preliminary objection that an appeal under the statutory appellate mechanism is available against the impugned order. Although the petitioner had an earlier special appeal pending in respect of a different claim, the Court found that the cause of action in the earlier proceedings was not the same as in the present petition. Notwithstanding that distinction, the Court concluded that the proper course is for the petitioner to approach the appellate authority against the orders impugned in the present petition. The Court observed that the petitioner had expended time in pursuing the writ mistakenly and therefore directed that the appellate authority should consider the appeal on its merits when filed.

Writ petition disposed directing the petitioner to file an appeal before the appellate authority, which shall decide the appeal on merits.

Time limit for issuance of show cause notice under Section 54(7) of the Central Goods and Services Tax Act, 2017 - Validity of the show cause notice issued after the period prescribed under Section 54(7) as contended by the petitioner. - HELD THAT: - The petitioner contended that the show cause notice impugned was issued in violation of the time limit prescribed for initiating proceedings in relation to a refund claim. The Court recorded the petitioner's grievance about the delayed issuance of the notice but did not decide the substantive validity of the notice on merits. Instead, having found an alternate remedy, the Court left the contention open for determination by the appellate authority when the petitioner pursues the statutory appeal.

Contention regarding delay in issuance of the show cause notice was not adjudicated on merits and is left open for consideration by the appellate authority in the appeal.

Final Conclusion: The writ petition is disposed of. The petitioner is directed to seek remedy before the appellate authority against the impugned orders; the appellate authority is directed to consider the petitioner's appeal on merits. The Court has not adjudicated the substantive challenge to the delayed show cause notice, leaving that issue to the appellate proceedings.

Reasonable opportunity of hearing - quantification of tax demand in show cause notice - verification of financial statements prepared on All India basis - remand for fresh consideration and verification - conditional setting aside of assessment order upon deposit - personal hearing requirement

Reasonable opportunity of hearing - personal hearing requirement - Impugned assessment order set aside for non-provision of a reasonable opportunity and failure to consider the petitioner's replies, requiring de novo consideration after affording opportunity. - HELD THAT: - The Court found that although statutory communications (ASMT 10, audit report, show cause notice and reminders) had been issued, the petitioner did not participate. However, the show cause notice quantified only two discrepancies while the final order confirmed multiple tax proposals. In view of this and the petitioner's pleaded inability to monitor the portal, the Court concluded that the petitioner was entitled to an opportunity to reply and to be heard before confirmation of the full demand. Consequently the impugned order was set aside and the assessing officer directed to afford a reasonable opportunity, including a personal hearing, before passing a fresh order.

Impugned order dated 16.04.2024 set aside and remitted for fresh consideration after affording the petitioner a reasonable opportunity, including personal hearing.

Quantification of tax demand in show cause notice - conditional setting aside of assessment order upon deposit - Requirement for quantification and conditional remand upon deposit of part of disputed demand. - HELD THAT: - The show cause notice quantified only discrepancy nos. 1 and 2, whereas the final order confirmed many more heads. The Court observed that Sectional principles oblige indication of proposed liability for each head and that confirming multiple unquantified claims without adequate opportunity was unsustainable. As a condition for remand the Court directed the petitioner to remit 10% of the disputed tax demand in respect of discrepancy nos. 1, 2, 6, 7 and 11 within three weeks; upon receipt of the petitioner's reply and proof of deposit, the assessing officer was to reconsider quantification and pass a fresh order within three months.

Petition allowed on condition that petitioner deposits 10% of disputed demand for specified discrepancies; on compliance the assessing officer to reconsider and quantify afresh and pass a fresh order within three months.

Verification of financial statements prepared on All India basis - remand for fresh consideration and verification - Prima facie unsustainability of taxing entire differential turnover where financial statements appear prepared on an All India basis; matter remanded for verification by assessing officer. - HELD THAT: - Discrepancy no.3 involved a comparison between turnover reported in GSTR returns for Tamil Nadu and turnover in the profit and loss account. The profit and loss account appeared to be on an All India basis. The petitioner subsequently produced an auditor's certificate certifying Tamil Nadu turnover equal to the GSTR figure. The Court observed that imposing GST on the entire differential turnover prima facie appears untenable and that the assessing officer must verify trial balances, auditor's certificates and state-wise breakup before confirming any demand arising from all-India financial statements. Hence the issue was left for fresh verification rather than decided on merits.

Discrepancy based on All India financial statements remanded to the assessing officer for verification and fresh determination after examination of state-wise records and auditor's certificates.

Final Conclusion: Writ petition allowed by setting aside the impugned order dated 16.04.2024; petitioner to remit 10% of disputed demand in respect of specified discrepancies within three weeks, permitted to submit reply, and on compliance the assessing officer to afford hearing and pass a fresh order within three months.

Refund under Section 54 of the CGST Act - maintainability of writ where alternative statutory remedy exists - competent authority's jurisdiction to examine refund claims - Dispute Resolution System under GST and appellate forum of Madhya Pradesh Madhyastham Adhikaran - Chapter XI of the CGST Act and Chapter X of the CGST Rules - refund mechanism

Refund under Section 54 of the CGST Act - maintainability of writ where alternative statutory remedy exists - competent authority's jurisdiction to examine refund claims - Writ petition seeking direction to consider representation for refund of GST is not maintainable because an efficacious alternative remedy exists under the GST enactment and rules. - HELD THAT: - The Court observed that Chapter XI of the CGST Act deals with refunds and that the petitioner, having carried out work and availed input credit during the period after commencement of GST, may submit a claim under Section 54 of the CGST Act. The competent authority is empowered to examine entitlement to refund in accordance with Section 54 and the procedure set out in Chapter X of the CGST Rules, 2017. Further, the petitioner has the statutory Dispute Resolution System available and appellate recourse to the Madhya Pradesh Madhyastham Adhikaran. In view of these specific statutory remedies, the writ petition in this Court seeking direction to consider the representation is not maintainable; the petitioner must pursue the prescribed statutory and administrative remedies before invoking writ jurisdiction. [Paras 4]

Writ petition dismissed as not maintainable and petitioner granted liberty to seek refund under Section 54 and the prescribed dispute resolution and appellate mechanisms.

Final Conclusion: Petition disposed of: petitioner to pursue refund claim before the competent authority under Section 54 of the CGST Act and the CGST Rules, and resort to the Dispute Resolution System and Madhya Pradesh Madhyastham Adhikaran as available; writ petition not maintainable.

Penalty for tax evasion requiring mens rea - Seizure and detention of vehicle and goods under seizure provisions - Quashing of order under Section 129 of the Uttar Pradesh Goods and Service Tax/Central Goods and Service Tax Act, 2017 read with Section 20 of the IGST Act - Release of seized vehicle and goods

Penalty for tax evasion requiring mens rea - Seizure and detention of vehicle and goods under seizure provisions - Release of seized vehicle and goods - Validity of the penalty and detention in absence of any finding of intention to evade tax and consequent relief for release of vehicle and goods. - HELD THAT: - The Court found that the factual matrix did not support any finding of intention to evade tax. The petitioner had produced physical invoices which tallied with the e-invoice, and the e-invoice was generated and downloaded on the same day; the alleged discrepancy was characterised as a bona fide mistake duly explained to the seizing authority. In the absence of mens rea for evasion, imposition of penalty by the revenue authorities was held to lack legal foundation. Applying these conclusions, the Court quashed the impugned order dated July 20, 2024 and directed the concerned authority to release the vehicle and goods within two weeks from the date of the order. [Paras 3, 4, 5, 6]

Impugned order dated July 20, 2024 quashed; authority directed to release the vehicle and goods within two weeks.

Final Conclusion: Writ petition allowed; penalty and seizure order quashed for lack of any finding of intention to evade tax and the vehicle with goods directed to be released within two weeks.

Accrual versus receipt - deferred or contingent consideration - long term capital gains - full value of consideration received or accruing - right to receive (debitum in presenti, solvendum in futuro) - construction of agreement - obligations postponing right to receive - taxability in subsequent assessment year

Accrual versus receipt - deferred or contingent consideration - long term capital gains - full value of consideration received or accruing - construction of agreement - obligations postponing right to receive - taxability in subsequent assessment year - Deletion of addition of long term capital gain on account of part consideration not received and whether entire agreement consideration was taxable in the assessment year in question - HELD THAT: - The Court agreed with the Tribunal and the coordinate Bench that where the agreement conditions postpone or make the balance consideration contingent on fulfillment of obligations, no vested right to receive that amount accrues in the assessment year. The determinative test is whether the assessee had a right to receive the amount (accrual) rather than mere notional or hypothetical entitlement. The balance consideration not received was contingent and its receipt was deferred; the assessee had offered the balance for tax in a subsequent year (A.Y. 2014-15), and the Revenue could not rewrite the agreement to treat the entire contractual sum as having accrued earlier. Pursuant to the precedents and the Tribunal's reasoning, only the amount actually received or which had legally accrued was taxable in the assessment year under challenge.

Revenue's appeal dismissed; Tribunal's deletion of the addition upheld and the balance consideration to be taxed when received/accrued (as addressed in A.Y. 2014-15).

Final Conclusion: The Revenue appeal is dismissed. The Court upheld the Tribunal's conclusion that only the amount received or which had legally accrued is taxable and that the balance, being contingent/deferred under the agreement, could not be taxed in the assessment year before it accrued and was correctly offered/taxed in A.Y. 2014-15.

Revisionary jurisdiction under Section 263 - Best judgment assessment under Section 144 - Erroneous and prejudicial to the interests of revenue - Inadequate inquiry - Impounded documents and inference drawn therefrom - Requirement of contemporaneous documentary evidence and opportunity to rebut

Revisionary jurisdiction under Section 263 - Erroneous and prejudicial to the interests of revenue - Inadequate inquiry - Validity of the Principal Commissioner of Income Tax's assumption of jurisdiction under Section 263. - HELD THAT: - The Tribunal held that Section 263 may be invoked where an assessing officer's order is erroneous and prejudicial to the revenue, which includes orders passed without proper verification or inquiry. On the facts, the assessing officer had issued notices under Sections 143(2) and 142(1), repeatedly sought documentary evidence, and ultimately passed the assessment under Section 147 read with Section 144 after the assessee repeatedly responded and the AO was unable to produce documentary evidence forming the basis for reopening. The Tribunal found that the impugned circumstances amounted to an inadequate inquiry by the AO, and that the availability of impounded material with the Principal CIT giving rise to suspicion justified assumption of jurisdiction to examine the matter afresh. For these reasons the Tribunal concluded that the PCIT was not wrong in assuming jurisdiction under Section 263. [Paras 6]

The PCIT's assumption of jurisdiction under Section 263 was valid; the first ground of appeal is dismissed.

Impounded documents and inference drawn therefrom - Requirement of contemporaneous documentary evidence and opportunity to rebut - Erroneous and prejudicial to the interests of revenue - Validity of the PCIT's exercise of revisionary power in setting aside the AO's order and directing fresh assessment on the basis of impounded documents. - HELD THAT: - Although the PCIT could assume jurisdiction to examine the assessment, the Tribunal found that the PCIT relied upon impounded documents which did not expressly identify the assessee or the plot and from which the PCIT only drew an inference that the assessee had paid cash. The AO had not produced those documents during reassessment proceedings and the assessee had denied any cash payment and sought documentary proof. The Tribunal applied the principle that additions or revisionary action cannot rest on mere suspicion or inferential use of evidence not placed before the assessee for rebuttal. Given the absence of conclusive proof linking the impounded material to the assessee and the AO's inability to demonstrate the basis for addition during reassessment, the Tribunal concluded that setting aside the AO's order and directing a fresh assessment was unwarranted and not supported by the material on record. [Paras 6]

The PCIT's order setting aside the assessment and directing a fresh assessment is set aside; the second ground of appeal is allowed.

Final Conclusion: The appeal is partly allowed: the Tribunal upheld the PCIT's jurisdiction to examine the assessment under Section 263 but set aside the PCIT's order directing fresh assessment because the revision relied on impounded documents that did not conclusively link the alleged cash payment to the assessee and amounted to action based on conjecture rather than satisfactory evidence.

Completed/unabated assessment - Incriminating material unearthed during search - Search under section 132 and proceedings under section 153A - Re-opening under sections 147/148 - Re-characterisation of agricultural land and short term capital gain - Deemed dividend under section 2(22)(e)

Completed/unabated assessment - Incriminating material unearthed during search - Search under section 132 and proceedings under section 153A - Re-opening under sections 147/148 - Addition in a completed/unabated assessment pursuant to proceedings under section 153A in absence of any incriminating material unearthed during the search - HELD THAT: - The Tribunal applied the legal principle stated by the Hon'ble Supreme Court in PCIT v. Abhisar Buildwell Pvt. Ltd. that where a search under section 132 (or requisition under section 132A) leads to assumption of jurisdiction under section 153A, all pending assessments stand abated, and in respect of completed/unabated assessments no addition can be made in the absence of incriminating material seized during the search. The record shows that assessment year 2010-11 was a completed/unabated assessment at the time of search, the statement under section 132(4) and the assessment order contain no reference to any incriminating documents seized from the assessee, and the documents relied upon were recorded in the company's regular books of account. The Tribunal rejected the Revenue's submission that documents appearing in regular books could be treated as incriminating merely because of alleged incorrect computation, noting that additions in completed assessments without incriminating material can only be sustained by reopening under sections 147/148 subject to statutory conditions. Having found no material to qualify as incriminating, the Tribunal held the foundation for assuming jurisdiction under section 153A to be absent. [Paras 7, 9]

No addition can be made in the completed/unabated assessment under section 153A in the absence of incriminating material; assessment can only be reopened under sections 147/148 subject to conditions.

Deemed dividend under section 2(22)(e) - Re-characterisation of agricultural land and short term capital gain - Sustainability of additions made by the Assessing Officer and upheld by the CIT(A) - addition on account of deemed dividend and addition on account of short term capital gain on recharacterisation of agricultural land - HELD THAT: - The Assessing Officer made additions for deemed dividend and for short term capital gain by treating the land as non agricultural. The Tribunal, applying the conclusion that no incriminating material was unearthed and that the assessment year in question was unabated, held that the assumption of jurisdiction under section 153A lacked valid foundation. Reliance was also placed on precedents where courts deleted additions made under section 153A in respect of completed assessments when no incriminating material was found. In view of the absence of any incriminating material or any allegation of concealed receipt outside banking channels, the Tribunal found no basis to sustain either addition and treated the other grounds as academic. [Paras 4, 8, 9]

Both additions - the addition on account of deemed dividend and the addition treating the land-sale as short term capital gain - are unsustainable and are deleted.

Final Conclusion: The appeal is allowed: both additions sustained by the Assessing Officer and confirmed by the CIT(A) are deleted because the assessment year 2010-11 was a completed/unabated assessment and no incriminating material was unearthed during the search; other grounds are rendered academic.

Unexplained cash deposits - source of cash during demonetisation - presumptive taxation under Section 44AD - reliance on cash sales and bank withdrawals as source - benefit of doubt in assessment of cash holdings - evaluation based on probabilities and evidentiary appreciation

Unexplained cash deposits - source of cash during demonetisation - reliance on cash sales and bank withdrawals as source - benefit of doubt in assessment of cash holdings - Whether the assessee satisfactorily explained the source of bank deposits of specified bank notes amounting to Rs. 65,00,000/- during demonetisation and whether the additions sustained by the authorities require modification. - HELD THAT: - The Tribunal examined the factual matrix underlying the AO's addition and the CIT(A)'s partial relief. The assessee, a dealer in jewellery and bullion covered by the presumptive taxation scheme under Section 44AD, claimed that the deposits arose from opening cash in hand, cash sales and bank withdrawals. The AO disbelieved these explanations in the absence of supporting documentary evidence and noted improbabilities such as retention of large cash balances despite bank borrowings and inconsistencies in claimed cash sales and supplier confirmations. The CIT(A) conducted a nuanced appraisal, accepting part of the asserted opening cash and certain late withdrawals while rejecting inflated cash-sale claims as contrived; he granted relief aggregating Rs. 5,81,187/-. The Tribunal recognized that, in cases of cash transactions, definitive proof of precise holdings may be unattainable and that assessment of source often requires evaluation of probabilities. While finding many of the assessee's explanations implausible on the record, the Tribunal considered that some portion of the deposits could reasonably have originated from asserted sources. Accordingly, the Tribunal exercised its evaluative discretion to grant further relief of Rs. 25,00,000/- in addition to the relief allowed by the CIT(A), modifying the first appellate order. [Paras 8, 9, 10, 11, 12]

The additions were not upheld in full; the First Appellate Order is modified to grant additional relief of Rs. 25,00,000/- over and above the relief allowed by the CIT(A), and the appeal is partly allowed.

Final Conclusion: The Tribunal upheld the basic approach of the authorities in treating substantial deposits as unexplained on the material before them but, applying evaluative judgment and granting the assessee the benefit of doubt, allowed additional relief of Rs. 25,00,000/-, resulting in the appeal being partly allowed.

Mandatory versus directory nature of procedural filing of Form No.67 for claiming Foreign Tax Credit - Foreign Tax Credit - DTAA prevailing over domestic law - application of CBDT notification extending time for filing Form No.67 - remand for verification and consequential allowance of Foreign Tax Credit

Mandatory versus directory nature of procedural filing of Form No.67 for claiming Foreign Tax Credit - Foreign Tax Credit - DTAA prevailing over domestic law - application of CBDT notification extending time for filing Form No.67 - Whether delay in filing Form No.67 disentitles the assessee from claiming Foreign Tax Credit for AY 2021-22 - HELD THAT: - The Tribunal found that the sole ground for denial was delay in filing Form No.67 and noted that the assessee filed Form No.67 on 08.01.2022, i.e., before the end of the relevant assessment year and before processing of the return under section 143(1). The Tribunal observed that Rule 128(9) does not provide for automatic disallowance of FTC where Form No.67 is filed belatedly and that various coordinate Benches have held filing of Form No.67 to be procedural and directory in nature. The Tribunal distinguished decisions relied upon by the CIT(A) (including Supreme Court decisions cited in context of other provisions) as being rendered in relation to different statutory provisions and not determinative of the claim for FTC under section 90 read with applicable DTAAs. The Tribunal also noted the CBDT Notification No.100/2022 which extended the time for filing Form No.67 to the end of the assessment year and observed that the assessee had filed the form within that period. Considering the totality of decisions of coordinate Benches and the facts that Form No.67 was filed before the end of the assessment year and before processing of the return, the Tribunal held that the delay in filing Form No.67 was not a ground to deny the substantive right to claim FTC and directed that the claim be considered on merits. [Paras 9, 10, 11, 13]

Delay in filing Form No.67 did not disentitle the assessee to Foreign Tax Credit; filing is procedural/directory and the claim must be examined on merits.

Remand for verification and consequential allowance of Foreign Tax Credit - Foreign Tax Credit - Whether the matter should be restored to the assessing officer for verification and consequential allowance of the claimed Foreign Tax Credit - HELD THAT: - The Tribunal observed that the assessing officer had not examined the Form No.67 and the supporting documents. In the interest of justice and having held that the procedural delay was not fatal, the Tribunal directed restoration of the issue to the file of the assessing officer with a specific direction to verify Form No.67 and the supporting evidence and to allow the consequential FTC in accordance with law after due verification. The Tribunal recorded that grounds raised by the assessee are allowed for statistical purposes and remitted the claim for factual verification. [Paras 14, 15]

Issue remanded to the assessing officer for verification of Form No.67 and supporting documents and for consequential allowance of the Foreign Tax Credit.

Final Conclusion: The Tribunal held that belated filing of Form No.67 (filed before the end of AY 2021-22 and before processing under section 143(1)) is a procedural/directory defect and does not disentitle the assessee from claiming Foreign Tax Credit; the matter is remanded to the assessing officer to verify the Form No.67 and supporting documents and to allow the consequential FTC in accordance with law. The appeal is disposed of as allowed for statistical purposes.

Taxability of subscription receipts from Cloud Services/SaaS as royalty - application of Article 12 of the India-Ireland Double Taxation Avoidance Agreement - non exclusive licence/right to use computer software with retention of copyright - use of copyrighted article/computer program and transfer of right to use copyright - precedential effect of jurisdictional decisions in identical factual matrix

Taxability of subscription receipts from Cloud Services/SaaS as royalty - application of Article 12 of the India-Ireland Double Taxation Avoidance Agreement - non exclusive licence/right to use computer software with retention of copyright - Subscription receipts from Cloud Services (SaaS) are not taxable as royalty under the Act or Article 12 of the India-Ireland DTAA. - HELD THAT: - The Tribunal held that the question whether subscription receipts from cloud services constitute royalty had already been considered in earlier decisions by the jurisdictional High Court and a coordinate Bench of the Tribunal in materially identical cases. Applying those authorities to the present factual matrix, where the assessee provides access to standard software via cloud while retaining copyrights and grants non exclusive rights to use the application, the receipts cannot be treated as payment for transfer of a right to use copyright. Consequently, the additions treating such subscription receipts as royalty were directed to be deleted. The Tribunal recorded that there was no change in facts or legal proposition warranting a different view. [Paras 6, 7]

Appeal allowed; income from Cloud Services not taxable as royalty and additions deleted.

TDS credit reconciliation and grant after verification - Shortfall in grant of TDS credit to the assessee was to be rectified by the Assessing Officer after due verification. - HELD THAT: - The Tribunal observed that the Assessing Officer should grant credit for taxes actually paid as reflected in the records, subject to verification. The AO was directed to grant the additional TDS credit after completing the necessary verification for the subject year. [Paras 5]

AO directed to grant TDS credit for taxes paid after due verification.

Final Conclusion: The appeal is allowed: subscription receipts from Cloud Services/SaaS are not taxable as royalty for AY 2021-22 and the Assessing Officer is directed to delete the additions; the AO is further directed to grant the verified TDS credit for the subject year.

Low tax effect - tax effect threshold for appellate admittance - Deduction under Section 80IB - deduction under Section 80HHC - adjustment of one deduction against another - recomputation by the Tribunal in light of precedent

HELD THAT: - The Court recorded that the tax effect in the suits before it is below Rupees Two Crores and applied Circular No.F.No.279/Misc.142/2007-ITJ(Pt.), dated 8th August, 2019, issued by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes. In consequence of that administrative instruction, the Court declined to entertain the appeals and dismissed them accordingly. The Court's order follows the policy enunciated in the circular as the determinative ground for non-entertainment of these appeals and disposes of any pending interlocutory applications. [Paras 2]

Appeals dismissed for non-entertainment under the cited Government Circular because the tax effect in each appeal is below Rupees Two Crores.

Final Conclusion: The Supreme Court declined to entertain and dismissed the listed appeals under the Ministry of Finance Circular dated 8th August, 2019, on the ground that the tax effect in each appeal is below Rupees Two Crores; pending interlocutory applications are disposed of.

Finality of litigation - review jurisdiction and limitation on re filing - abuse of process and vexatious litigation - need for liberty to revive proceedings - judicial discipline against re litigation after dismissal of SLP - principle nemo debet bis vexari pro una et eadem causa - interest reipublicae ut sit finis litium - res judicata pro veritate occipitur

Finality of litigation - need for liberty to revive proceedings - review jurisdiction and limitation on re filing - Whether the Special Leave Petition ought to be entertained where the petitioner earlier withdrew a Review Petition without seeking liberty to file another, subsequently prosecuted SLPs before this Court which were dismissed, and thereafter filed another Review Petition before the High Court. - HELD THAT: - The Court held that the petition could not be entertained because when the earlier Review Petition was withdrawn before the High Court no liberty was sought to file another review. The petitioner thereafter prosecuted Special Leave Petitions before this Court instead of preserving the review remedy, and did not seek at any stage a withdrawal of the SLPs with liberty to revive or refile a review. Having taken the chance before this Court and having the SLPs dismissed on merits, the subsequent filing of another Review Petition in the High Court without prior liberty was inconsistent with the policy of attaining finality in litigation and amounted to vacillation that is fatal to the petitioner's case. Reliance on earlier authority with different facts was distinguished, and the Court referred to precedent condemning High Courts entertaining review petitions after SLP dismissal as subversive of judicial discipline. The Court invoked the maxims against re litigation-nemo debet bis vexari, interest reipublicae ut sit finis litium, and res judicata-to emphasise that there must be an end to litigation and that parties cannot be permitted to repeatedly seek fresh review after an opportunity to litigate on merits has been pursued and concluded before this Court. [Paras 7, 8, 9, 12, 13]

The Special Leave Petition is dismissed as not entertainable on the ground of lack of liberty to refile review and the requirement of finality in litigation; pending applications, if any, are disposed of.

Final Conclusion: The Special Leave Petition is dismissed on the ground that the petitioner, having withdrawn an earlier Review Petition without obtaining liberty to file another and having prosecuted SLPs before this Court which were dismissed, cannot thereafter maintain a fresh review in the High Court; the order emphasises finality of litigation and rejects re litigation as an abuse of process.

Writ of Mandamus - Article 226 - mandamus to appellate authority - opportunity of hearing - judicial direction for expeditious disposal of appeals - no further extension

Writ of Mandamus - opportunity of hearing - judicial direction for expeditious disposal of appeals - no further extension - Direction to the appellate authority to grant hearing and decide the pending appeals for the Assessment Years 2016-17 and 2017-18 within a specified time-frame. - HELD THAT: - The petitioner sought a writ directing Respondent No.1 to take up the appeals relating to Assessment Years 2016-17 and 2017-18, grant personal hearing and dispose of the appeals within a short stipulated period. The Court noted earlier supervisory directions issued by it in proceedings concerning the AY 2016-17 and observed that the appeals have remained undecided despite hearings and written submissions. Having perused the record and considered the previous order dated 2 May 2023, the Court found that the interests of justice require that the pending appeals be taken to a logical conclusion. In view of similar issues arising in both appeals and the delay in final adjudication, the Court directed the Commissioner of Income Tax (Appeals) to grant an opportunity of hearing to the petitioner and decide both appeals in accordance with law within four months from the date of this order. The Court expressly kept all substantive contentions in the pending proceedings open and clarified that no further extension shall be granted for adjudicating the appeals. [Paras 5, 6, 7]

The CIT(A) is directed to grant hearing and decide the appeals for AY 2016-17 and AY 2017-18 in accordance with law within four months from the date of the order; all contentions kept open; no further extension.

Final Conclusion: Writ relief in the form of mandamus was effectively granted in part by directing the CIT(A) to grant hearing and decide the petitioner's appeals for Assessment Years 2016-17 and 2017-18 within four months, with substantive contentions left open and no further extension permitted.

Violation of principles of natural justice - opportunity to show cause under faceless assessment - compliance with Standard Operating Procedure of Faceless Assessment (response time) - interpretation and application of Section 144B(6)(vii) of the Income-tax Act, 1961

Interpretation and application of Section 144B(6)(vii) of the Income-tax Act, 1961 - opportunity to show cause under faceless assessment - Validity of the show cause notice dated 13th February, 2024 in respect of assessment year 2019-20 - HELD THAT: - The Court found that the show cause notice, though stating a response deadline of 17:34 hours on 20th February, 2024, had been digitally signed at about 18:37 hours on 13th February, 2024 and therefore did not afford the petitioner 7 clear days to respond. The notice was issued under the faceless assessment framework and Section 144B(6)(vii) contemplates serving a notice calling upon the assessee to show cause where variation in income/loss is proposed. The Court held that the timing of issuance deprived the petitioner of the minimum opportunity contemplated for responding to the show cause and thus implicated the requirement of an effective opportunity under the statutory scheme. [Paras 7, 8]

The show cause notice dated 13th February, 2024 was held not to have afforded the petitioner the requisite opportunity to respond.

Compliance with Standard Operating Procedure of Faceless Assessment (response time) - violation of principles of natural justice - Whether the show cause procedure complied with the SOP requirement of response time and whether any intervening public holiday affected the availability of a reasonable opportunity - HELD THAT: - The Court examined clause N.1.3 (and N.1.3.1) of the SOP circulated on 3rd August, 2022, which identifies a 7-day response time as the norm (subject to curtailment only where limitation necessitates). There was no limitation constraint here. The Court noted that Saraswati Puja fell on 14th February, 2024 and, when coupled with the curtailed effective response period, it was likely to have made it unviable for the petitioner to furnish a response within the specified time. On these facts the procedure followed was concluded to be inconsistent with the SOP and to amount to a breach of principles of natural justice. [Paras 9]

The procedure did not comply with the SOP's response-time norm and thereby violated principles of natural justice.

Opportunity to show cause under faceless assessment - Relief to be granted and ancillary procedural directions after finding of breach - HELD THAT: - Because the assessment order of 7th March, 2024 was passed without considering the petitioner's response, the Court set aside that assessment order and remanded the matter to the Faceless Assessment Unit for fresh consideration. The Court directed reactivation of the portal 'submit response' button within one week and allowed the petitioner 15 days from the date of reactivation to file her response. If a response is filed, the Faceless Assessment Unit must consider it and, if requested, afford a hearing by video conferencing and pass a fresh assessment order within eight weeks of communication of the Court's order. The Court also clarified that it has not considered merits and that the assessing officer must decide the matter on merits uninfluenced by the Court's observations; tax paid, if any, shall be adjusted by the assessing officer. [Paras 10, 11, 12, 14, 15]

Assessment order dated 7th March, 2024 and consequential notices set aside; matter remanded with specific directions to enable filing of response and fresh adjudication.

Opportunity to show cause under faceless assessment - Effect of petitioner having waived other challenges - HELD THAT: - The Court recorded that the petitioner had expressly given up the right to challenge the notice under Section 148A(b), the order under Section 148A(d), and the notice issued under Section 148 by the jurisdictional assessing officer, confining the petition to the challenge to the show cause and the assessment order. Accordingly, those other challenges were not entertained. [Paras 6, 13]

Petitioner waived challenge to earlier notices and orders; writ petition confined to the show cause notice and the assessment order dated 7th March, 2024.

Final Conclusion: The Court held that the show cause notice did not afford the petitioner the requisite opportunity in conformity with the SOP and principles of natural justice; set aside the assessment order dated 7th March, 2024 (AY 2019-20) and remanded the matter to the Faceless Assessment Unit with directions to reactivate the portal, permit filing of response within a specified period, provide hearing if requested, and pass a fresh assessment order on merits within the stipulated time.

Deferred revenue expenditure - revenue expenditure - workmen and staff welfare expenditure - section 40A(9) of the Income-tax Act - binding effect of earlier order in assessee's own case

Deferred revenue expenditure - revenue expenditure - binding effect of earlier order in assessee's own case - Allowability of advertisement expenditure treated as deferred revenue expenditure and claimed as revenue expenditure - HELD THAT: - The Court declined to re-examine the Tribunal's allowance of advertisement expenditure as revenue expenditure because the same contention had been considered and decided in the assessee's own case for an earlier assessment year by reference to the Tribunal's order. The revenue had pursued identical questions in a separate appeal (Income Tax Appeal No.1696 of 2018) wherein this Court, by its order dated 25 June 2024, declined to entertain similar questions on the ground that the revenue had accepted previous orders in the assessee's own case. Applying that conclusion, the present issue does not give rise to a fresh question of law warranting reconsideration. [Paras 2, 3]

Not re-examined in this appeal on account of being covered by the earlier order; no question of law arises.

Workmen and staff welfare expenditure - section 40A(9) of the Income-tax Act - binding effect of earlier order in assessee's own case - Allowability of expenses towards workmen and staff welfare notwithstanding the provisions of section 40A(9) - HELD THAT: - The Court held that the Tribunal's decision allowing the welfare-related expenses was taken after relying on the assessee's own earlier case (Assessment Year 1997-98) and on principles applied by this Court in its prior order dated 25 June 2024. Given that the matter had been considered and not found fault with earlier, the revenue was not permitted to re-open the issue in the present appeal. Consequently the question framed under section 40A(9) was not re-adjudicated on merits in this proceeding. [Paras 2, 3]

Not re-examined in this appeal as covered by the earlier order; no question of law arises.

Final Conclusion: The appeal is dismissed for the reasons given in the Court's earlier order dated 25 June 2024 in Income Tax Appeal No.1696 of 2018; the questions raised are covered by that order and do not give rise to fresh questions of law. No costs.

Allowability of revenue expenditure under Section 37(1) - disallowance under Section 40A(9) - payments required by or under any law (including Industrial Disputes Act) - payments made by the assessee in the capacity of an employer - nexus between social welfare/community expenditure and the assessee's business - exception for contributions falling within clauses (iv), (iva) and (v) of Section 36(1)

Allowability of revenue expenditure under Section 37(1) - disallowance under Section 40A(9) - payments made by the assessee in the capacity of an employer - nexus between social welfare/community expenditure and the assessee's business - Deletion of disallowance made under Section 40A(9) and allowance of the disputed community/social welfare payments as business expenditure under Section 37(1). - HELD THAT: - The Court held that Section 40A(9) proscribes deduction only where sums are paid by the assessee in his capacity as an employer towards or as contribution to certain funds or institutions; therefore the core ingredient to attract Section 40A(9) is that the payment must be made by the assessee "as an employer". The payments in dispute related to continuing community services and social welfare in the area of the assessee's operations, were made as part of wider local welfare measures existing prior to the Memorandum of Settlement, and yielded commercial benefits (goodwill and local harmony) connected with the carrying on of the assessee's business. The Memorandum of Settlement merely recorded the ongoing nature of such expenditure and did not convert the payments into employer-specific statutory obligations. Applying the precedent that contributions to public welfare funds connected with business are allowable under Section 37(1), the Court found the concurrent conclusions of the CIT(A) and the Tribunal-that the payments were business-linked and not hit by Section 40A(9)-to be a plausible view which ought not to be disturbed on appeal. [Paras 13, 14, 15, 16, 17]

The Tribunal was justified in deleting the disallowance under Section 40A(9); the disputed payments are allowable as business expenditure under Section 37(1).

Payments required by or under any law (including Industrial Disputes Act) - disallowance under Section 40A(9) - payments made by the assessee in the capacity of an employer - Whether the payments made under the Memorandum of Settlement were payments required by or under any law (including the Industrial Disputes Act). - HELD THAT: - The Court held that the payments in the facts of this case were not payments required to be made under the Industrial Disputes Act or any other law. More importantly, because Section 40A(9) did not apply on the factual matrix (payments were not made in the capacity of an employer under a statutory obligation), there was no need to invoke the exception relating to payments required by or under any law. Consequently, the contention that the Memorandum of Settlement transformed the payments into legally mandated employer payments was rejected. [Paras 7, 8, 12, 16, 17]

The payments were not required to be made by or under any law (including the Industrial Disputes Act), and that argument does not assist the Revenue given Section 40A(9) was not attracted.

Final Conclusion: Appeals dismissed: concurrent findings of the CIT(A) and the Tribunal sustaining allowance of the community and social welfare payments as business expenditure are upheld; questions answered against the Revenue and in favour of the assessee for AY 1987-88 and AY 1988-89. No costs.

Royalty under Section 9(1)(vi) of the Income-tax Act - retrospective operation of an Explanation to a taxing provision - tax deduction at source obligation under section 195/section 194J/section 40(a)(i) - Explanation widening scope vs. clarificatory explanation - lex non cogit ad impossibilia

Royalty under Section 9(1)(vi) of the Income-tax Act - tax deduction at source obligation under section 195/section 40(a)(i) - Payments made by the assessee to foreign suppliers for procurement/use of computer software are not taxable as royalty for the assessment years in question and hence did not attract a TDS obligation under the law as then existing. - HELD THAT: - The Tribunal and CIT(A) returned concurrent findings that the transactions amounted to a licence to use software for the assessee's internal business purposes and did not transfer title or constitute a payment of royalty. The Court accepted these concurrent findings and observed that, having regard to the nature of the agreements and the placement of parties, the payments were not in the nature of royalty and therefore did not mandate deduction of tax at source under section 40(a)(i) read with section 195/194J as applicable at the relevant time. The Court noted that the Assessing Officer's contrary view rested on relying upon an Explanation inserted later by Finance Act, 2012; absent that amendment at the relevant time, the law in force did not characterise the payments as royalty. [Paras 7, 9, 13]

Payments for procurement/use of the software for the stated assessment years were not royalty and no TDS was required to be deducted under the law as it stood then.

Retrospective operation of an Explanation to a taxing provision - Explanation widening scope vs. clarificatory explanation - lex non cogit ad impossibilia - Explanation 4 inserted to Section 9(1)(vi) by the Finance Act, 2012 cannot be applied retrospectively to tax payments made in the assessment years before that amendment. - HELD THAT: - The Court followed settled principles that the law to be applied for assessment is the law in force at the relevant time and that an Explanation which changes or widens the scope of a charging provision is not to be construed as having retrospective effect merely because it uses language such as 'it is declared' or 'for the removal of doubts'. Relying on the Tribunal's approach and on precedents including the Supreme Court's decision in Sedco Forex and the subsequent affirmation of the High Court's reasoning by the Supreme Court in Engineering Analysis Centre of Excellence (P.) Ltd., the Court held that an assessee cannot be compelled to comply with an obligation which did not exist at the time of payment (applying the maxim lex non cogit ad impossibilia). Consequently the Finance Act, 2012 amendment (Explanation 4) could not be invoked to impose retrospective TDS obligations for the assessment years before the amendment. [Paras 11, 12, 13]

Explanation 4 to Section 9(1)(vi) is not retrospectively applicable to the disputed assessment years and cannot be relied upon to tax the impugned payments or to fasten past TDS obligations.

Final Conclusion: The appeals are dismissed. The Court upheld the concurrent findings that the payments for procurement/use of software were not royalty for AY 2003-04, 2004-05 and 2007-08 and held that Explanation 4 to Section 9(1)(vi) (Finance Act, 2012) cannot be applied retrospectively to impose TDS obligations for those years.

Natural justice - opportunity of being heard under section 148A(b) - consideration of reply under section 148A(c) - decision whether to issue notice under section 148A(d) - information suggesting escapement of income - prior approval for issuance of notice under section 148 - reopening of assessment on receipt of information - doctrine of agency in relation to power of attorney

Opportunity of being heard under section 148A(b) - consideration of reply under section 148A(c) - decision whether to issue notice under section 148A(d) - information suggesting escapement of income - Validity of the order under section 148A - whether the assessee was denied effective opportunity and whether the Assessing Officer was required to adjudicate the defence conclusively at the stage of section 148A(d). - HELD THAT: - The Court held that the requirement of natural justice under section 148A does not mandate a personal hearing and is satisfied by service of a show cause notice and furnishing of materials relied upon by the Revenue; the assessee filed a reply and the inquiry report/materials were supplied with the notice. At the stage of passing an order under section 148A(d) a detailed adjudication on the merits of the information and the assessee's defence is not contemplated; the Assessing Officer must narrate facts and consider the reply but need not record a point-by-point conclusive finding which would prejudice further proceedings. The Assessing Officer here conducted an inquiry, supplied materials, considered the assessee's reply and recorded reasons why the reply was not acceptable, concluding that information on record suggested escapement of income and that the case was fit for issuance of notice under section 148 with prior specified authority approval. The Court found no failure of natural justice or illegality in the order impugned. [Paras 4, 5, 6, 9, 10]

The order under section 148A(d) is valid; no breach of natural justice is made out and the Assessing Officer was not required to undertake final adjudication of the defence at that interlocutory stage.

Doctrine of agency in relation to power of attorney - reopening of assessment on receipt of information - Whether the petitioner-company can avoid proceedings on the ground that the alleged sales were effected by the power of attorney holder and not by the company. - HELD THAT: - The Court applied settled principles that an agent acting under a power of attorney acts in the name of and on behalf of the principal, and acts done by the agent within the authority bind the principal. A power of attorney is generally revocable and is an agency; acts of an agent are treated as acts of the principal and remedies for breach of fiduciary duty lie between donor and donee. Consequently, lack of knowledge of the company about transactions entered into by its power of attorney holder is not a ground to preclude the Revenue from proceeding against the company. Any dispute as to the agent acting beyond authority or fraud by the agent is a matter between the company and the agent and does not invalidate the Revenue's action at the stage of section 148A/148. [Paras 11, 12, 13]

The plea that the sales were effected by the power of attorney holder does not preclude reassessment proceedings against the petitioner-company; the company is bound by acts of its agent under the power of attorney.

Final Conclusion: Writ petition dismissed; the order passed under section 148A(d) stands affirmed and reassessment proceedings for the assessment year 2020-21 may proceed, the petitioner-company being bound by transactions effected by its power of attorney holder.

Disallowance on estimate basis - Rate of disallowance of business expenses - Allowability of opening stock and work-in-progress - Assessment completed to the best of judgement

Allowability of opening stock and work-in-progress - Disallowance on estimate basis - Deletion of disallowance made out of opening stock and work-in-progress upheld. - HELD THAT: - The Tribunal noted that the Assessing Officer made disallowances on an estimated basis in the absence of the assessee's cooperation. The Commissioner (Appeals) had deleted the disallowance in respect of opening stock and work-in-progress after adjudication. The Tribunal observed that the assessee had furnished evidence before the Commissioner (Appeals), which was forwarded to the Assessing Officer for verification, and that the Commissioner (Appeals) declined to admit those documents only on the ground of prior non-furnishing before the AO. The Tribunal found no basis for sustaining the disallowance in respect of opening stock and WIP and, therefore, left the deletion intact. [Paras 5]

Disallowance of opening stock and work-in-progress deleted.

Rate of disallowance of business expenses - Disallowance on estimate basis - Assessment completed to the best of judgement - Quantum of disallowance on purchases and administrative expenses reduced to 5%. - HELD THAT: - Both the Assessing Officer and the Commissioner (Appeals) made estimate-based disallowances (50% by the AO; 20% by the CIT(A)). The Tribunal found no principled basis on the record for either the 50% or the 20% rate. Considering the nature of the assessee's business (construction) and that the disallowance was purely estimate-driven, the Tribunal concluded that a 5% disallowance of purchases and administrative expenses would be appropriate to meet the ends of justice and directed the Assessing Officer to apply that rate. [Paras 5]

Disallowance in respect of purchases and administrative expenses restricted to 5%.

Final Conclusion: Appeal partly allowed: disallowance of opening stock and WIP deleted; disallowance in respect of purchases and administrative expenses reduced and directed to be restricted to 5%.

Non-accountal of duty-free goods - unauthorised removal from bonded premises - transfer of duty-free capital goods to another EOU - non-installation and non-use of imported capital goods and consumables - fulfilment of conditions of exemption notifications - positive Net Foreign Exchange (NFE) - liability for duty on breach of bond - remand for fresh consideration

Non-accountal of duty-free goods - unauthorised removal from bonded premises - transfer of duty-free capital goods to another EOU - non-installation and non-use of imported capital goods and consumables - liability for duty on breach of bond - Whether the Commissioner (Appeals) had failed to examine allegations of non-accountal, removal and non-installation/non-use of duty-free imported and indigenously procured goods and whether those matters require fresh adjudication - HELD THAT: - The Tribunal found that the main controversy concerns absence of adequate accountal and the apparent non-availability in the respondent's premises of imported capital goods and indigenously procured consumables obtained against CT3s. Although transfer to another EOU is permissible under the Policy, there is no record that the Commissioner (Appeals) verified whether the goods were actually held at the transferee unit or when the transfers occurred, and there is no clear documentary explanation for absence of intimation and for the Department's directive not to remove goods. The notifications invoked are self-contained exemption notifications conditioned upon proper accounts, storage, utilization, and compliance with bond obligations; breach attracts liability to pay duty on demand. Given these factual and legal gaps, the Tribunal concluded that the Commissioner (Appeals) did not examine all conditions and evidence independently and that the questions of unauthorised removal, non-accountal and non-installation/non-use require fresh consideration on the record by the Commissioner (Appeals). [Paras 9, 10, 11, 12]

Matter remanded to the Commissioner (Appeals) for independent examination of the alleged violations of Notifications 22/2003-CE and 52/2003-CUS and related bond/warehousing conditions, and to determine whether duty recovery and penalty are warranted

Positive Net Foreign Exchange (NFE) - fulfilment of conditions of exemption notifications - Whether non-achievement of positive NFE for the period alleged by the Department remains a live breach requiring demand - HELD THAT: - The Tribunal noted that the Development Commissioner had regularised the non-achievement of positive NFE by imposing a penalty and granting extension subject to conditions, and that the respondent has fulfilled those conditions as documented. Consequently, the alleged shortfall in NFE for the period cited by the Department has been remedied by the competent authority and does not, by itself, constitute an outstanding breach for the purposes of this appeal. However, this conclusion does not preclude separate inquiry into other conditions of the exemption notifications. [Paras 4, 11]

Non-achievement of positive NFE for the stipulated period has been regularized by the competent authority and is not treated as a continuing breach in this proceeding

Final Conclusion: The appeal is allowed to the extent of setting aside the order of the Commissioner (Appeals) and remanding the matter to him for a full and independent examination of compliance with all conditions of Notifications 22/2003-CE and 52/2003-CUS (including accountal, transfer, installation and use of duty-free goods) and for a determination whether duty recovery and penalties are warranted; the NFE shortfall for the earlier period has been regularized by the Development Commissioner and is not pursued here.

Classification as part of assessment - confiscation under section 111(m) - role of expert opinion vis-a -vis tariff classification (Textile Committee). - self-assessment and first check - assessment under section 17 - clearance for home consumption under section 47 - demand and recovery under section 28(4) - penalty under section 114A

Classification as part of assessment - confiscation under section 111(m) - role of expert opinion vis-a -vis tariff classification (Textile Committee). - self-assessment and first check - Validity of confiscation (and consequent redemption fine) under section 111(m) where re classification of imported goods was founded on Textile Committee opinion and the importer had sought first check. - HELD THAT: - The Tribunal held that classification is an element of assessment and must be determined by the importer (self assessment), the proper officer on re assessment, or by an appellate authority - not by an expert body lacking statutory assessment authority. While the Textile Committee can give expert evidence on the nature, composition or properties of textile goods, it has no locus under Section 17 to pronounce tariff classification. Section 111(m) permits confiscation where goods do not correspond with the Bill of Entry in value or in any other particular; however, divergence in classification, which is a matter of opinion between importer and officer, does not by itself render goods liable to confiscation. The Joint Commissioner's reliance on the Textile Committee's "classification" and treating the importer's divergent self classification as mis declaration misconstrued the scope of section 111(m). The Commissioner (Appeals) was therefore correct in setting aside confiscation and the consequential redemption fine. [Paras 23, 24, 25, 26, 27]

Confiscation under section 111(m) and the redemption fine set aside; Commissioner (Appeals) rightly reversed the confiscation based on the improper basis for classification.

Assessment under section 17 - clearance for home consumption under section 47 - demand and recovery under section 28(4) - penalty under section 114A - Whether demand under section 28(4) and penalty under section 114A were sustainable when the goods had not been cleared for home consumption and assessment process was not complete. - HELD THAT: - The Tribunal explained that Section 28 applies to cases where duty was not levied, not paid, short levied or short paid after assessment has been completed and the goods cleared for home consumption. The statutory scheme contemplates self assessment and re assessment under Section 17, and a Section 28 notice presupposes completion of assessment and clearance under Section 47. In the present case the importer had filed the Bill of Entry and sought first check; before the proper officer could complete re assessment and clearance, Customs (Preventive) intervened and the Joint Commissioner completed the assessment. Because events occurred prior to clearance for home consumption and within the assessment process, the matter fell within Section 17 procedures and not within Section 28(4). Consequently Section 114A (a penalty predicated on a Section 28 demand) was not attracted. The Commissioner (Appeals) correctly set aside the demand/penalty insofar as they were founded on Section 28(4) and Section 114A. [Paras 29, 30, 31, 32, 33]

Demand under section 28(4) and penalty under section 114A held not to apply; Commissioner (Appeals) correctly set aside the penalty and related demand insofar as based on those provisions.

Final Conclusion: Revenue's appeal dismissed; impugned order of the Commissioner (Appeals) upholding classification but setting aside confiscation, redemption fine and penalty is upheld.

Appeal not maintainable by licensing authority against its own order - exclusive appellate remedy to aggrieved licensee - Regulations constitute a self-contained code governing Customs House Agents - harmonious construction of Section 129A and Section 146 of the Customs Act, 1962 - Regulation 22(8) CHALR limits appeal to the CHA - no inherent right of appeal; appeal is statutory creation

Appeal not maintainable by licensing authority against its own order - Regulation 22(8) CHALR limits appeal to the CHA - exclusive appellate remedy to aggrieved licensee - Maintainability of an appeal filed by the licensing authority (Commissioner of Customs) against its own order under the Customs House Agents' Licensing Regulations. - HELD THAT: - The Tribunal held that the Regulations framed under Section 146 of the Customs Act, 1962 constitute a self-contained code for licensing, disciplinary control and appellate remedy in respect of Customs House Agents (CHAs). Regulation 22(8) expressly provides for an appeal to the Tribunal by a Customs House Agent aggrieved by an order of revocation or suspension, thereby vesting the appellate remedy in the licensee alone. Section 146(2)(f) contemplates that the Regulations may govern appeals in disciplinary matters and, read harmoniously with Section 129A, supports the view that the special regulatory scheme limits appellate recourse as provided therein. The Tribunal relied on its prior reasoning that the licensing authority is not envisaged as an appellant under the Regulations and that there is no inherent statutory right to appeal apart from that created by statute or subordinate legislation. Decisions of the Hon'ble High Court of Bombay construing the Regulations as a deliberate restriction on the scope of appeals are binding on the Tribunal and support dismissal of an appeal prosecuted by the licensing authority against its own order. Consequently, the challenge to the quantum or commensurateness of penalty imposed in the impugned order was not open to the licensing authority by way of appeal under the Regulations. [Paras 7, 8]

Appeal dismissed as not maintainable; the Regulations confer appellate remedy only to the aggrieved licensee and do not permit the licensing authority to appeal against its own order.

Final Conclusion: The appeal by the Commissioner of Customs was dismissed on the ground of non-maintainability: the CHALR and Section 146 constitute a self-contained regulatory code granting appellate remedy to an aggrieved licensee only, and the licensing authority cannot prosecute an appeal against its own order.

Revocation of customs broker licence - forfeiture of security deposit - misconduct under Customs Broker Licencing Regulations, 2018 - obligations of customs brokers - principles of natural justice - scope of regulation 10(a), regulation 10(d), regulation 10(e), regulation 10(m) and regulation 10(n) - prohibition on multiple sanctions for same licence/deposit - remand for fresh consideration

Prohibition on multiple sanctions for same licence/deposit - revocation of customs broker licence - forfeiture of security deposit - Validity of imposing multiple revocations and multiple forfeitures in separate concurrent proceedings affecting the same licence and the same security deposit - HELD THAT: - The Tribunal held that the licencing authority cannot validly revoke the same licence or forfeit the same security deposit repeatedly by issuing multiple orders in separate proceedings which cumulatively seek to affect a single licence and a single deposit. The authority has no power to "resuscitate" a revoked licence or to "unforfeit" a forfeited deposit so as to permit serial revocations or forfeitures; treating three separate proceedings as producing multiple final consequences on the same licence/deposit is legally impermissible. Proceeding simultaneously to obtain multiple outcomes that operate on the same licence and deposit is equivalent to combining the outcomes of the proceedings and is improper. Consequently, the three impugned orders are flawed on this ground and require fresh adjudication. [Paras 1, 9]

Orders effecting multiple revocations and multiple forfeitures of the same licence/deposit are set aside and cannot stand; the matters must be reconsidered afresh.

Misconduct under Customs Broker Licencing Regulations, 2018 - scope of regulation 10(a), regulation 10(d), regulation 10(e), regulation 10(m) and regulation 10(n) - obligations of customs brokers - Whether the impugned orders adequately connected specific acts or omissions of the customs broker to the several obligations in regulation 10 of the Customs Broker Licencing Regulations, 2018 - HELD THAT: - The Tribunal found that the licencing authority failed to make the necessary factual and legal connections between the charged misconduct and each distinct obligation under regulation 10. While regulation 10 sets out multiple, stakeholder-specific duties, the impugned orders do not delineate the precise "to do" or "not to do" acts contrary to each obligation and therefore are incomplete. Except in relation to regulation 10(n), the inquiry and orders did not sufficiently specify how the acts alleged constituted breaches of regulation 10(a), 10(d), 10(e) or 10(m). The Tribunal emphasised that obligations must be linked to appropriate imputations of misconduct on the basis of a proper inquiry and that mere recording of statements or confessions without adherence to principles of natural justice and without specific findings is inadequate. [Paras 3, 4, 8]

Impugned orders are deficient for failure to connect specific findings of misconduct to the separate obligations under regulation 10 (other than 10(n)), and accordingly cannot be sustained.

Principles of natural justice - obligations of customs brokers - scope of regulation 10(a), regulation 10(d), regulation 10(e), regulation 10(m) - Interpretation of the obligations in regulation 10 and the limits on the licencing authority's insertion of additional unstated stipulations - HELD THAT: - The Tribunal explained that regulation 10(a) (authorisations), 10(d) (advice to clients), 10(e) (due diligence), and 10(m) (speed and efficiency) must be understood in light of their purpose and stakeholder focus. The obligation of authorisation is to establish contractual agency for each transaction and is not to be expanded by implying additional methods of obtaining authorization beyond the Regulation. Advice to a client does not mean explaining every provision of the Customs Act; obligations such as due diligence, advice, speed and efficiency are primarily in relation to clients and should be invoked only when facts show the client was misled or disadvantaged. The Tribunal further observed that it is impermissible for the licencing authority to assume these obligations exist solely as a basis for automatic revocation without a focused inquiry and adherence to principles of natural justice analogous to detriment-imposing processes in service jurisprudence. [Paras 5, 6, 7]

Obligations under regulation 10 must be applied purposively and not by unwarranted extension; the licencing authority erred in treating them as automatic grounds for revocation without specified findings.

Remand for fresh consideration - Appropriate remedy where the impugned orders are flawed for the reasons stated - HELD THAT: - Given the procedural and substantive deficiencies-failure to connect specific misconduct to distinct regulatory obligations, improper multiplicity of sanctions affecting the same licence/deposit, and inadequate adherence to principles of natural justice-the Tribunal concluded that the correct course is to set aside the impugned orders and remit the matters to the licencing authority. The remand is for fresh proceedings and determinations in accordance with the framework and reasons articulated by the Tribunal, not for mere clerical rectification. The Tribunal expressly allowed the appeals by way of remand. [Paras 9, 10]

Impugned orders are set aside and remitted to the licencing authority for fresh decisions in accordance with the framework indicated; appeals are allowed by way of remand.

Final Conclusion: The appeals are allowed by setting aside the three impugned orders and remanding the matters to the licencing authority for fresh, separate adjudications conducted in accordance with the Tribunal's articulated framework; the authority must make specific findings linking alleged acts to each charged obligation, observe principles of natural justice, and not impose multiple revocations/forfeitures on the same licence/deposit.

Misconduct and breach of obligations of customs broker - Imputation of misconduct and requirement of clear charge - Duty of proof in quasi disciplinary proceedings - Interpretation of Drawback Rules and eligibility for drawback - Proportionality in revocation of licence and imposition of penalty

Misconduct and breach of obligations of customs broker - Imputation of misconduct and requirement of clear charge - Duty of proof in quasi disciplinary proceedings - Whether the charges of breach of regulation 10(d), 10(e), 10(f), 10(k) and 10(n) of the Customs Broker Licencing Regulations, 2018 against the appellant were proved and warranted revocation of licence and imposition of penalties. - HELD THAT: - The Tribunal found that the show cause notice and inquiry put together unrelated facts, made unsustained inferences and failed to furnish clear, particularised imputations of misconduct requisite in quasi disciplinary proceedings that threaten continued practice. The impugned findings rested largely on presumptions of collusion and overvaluation without any direct evidence tying the appellant to the alleged overvaluation or to nondisclosure of specific information. Regulation 10(d) was held to be grounded on an unsupported supposition that the broker colluded in overvaluation; the finding therefore is illogical and unsustainable. Regulation 10(e) was misapplied by treating a generalized failure to verify third party information as equivalent to dissemination of incorrect information or failing to ascertain correctness when there is no allegation of any specific information furnished by the broker that was not checked. Regulation 10(f) was upheld by reference to a circular not mentioned in the notice or inquiry report, amounting to introduction of material after conclusion of proceedings. Regulation 10(k) was treated as breached on the basis that records were not produced, but there is no record of any summons in the inquiry file nor any requirement shown for preservation beyond a reasonable period; the obligation was misconceived. Regulation 10(n) was affirmed on the exporter's belated and unverifiable statement of lack of antecedent verification; the investigation did not confront the appellant with this accusation and the evidentiary foundation is fragile. Separately, the Tribunal noted that there was no finding that the goods were not exported or manufactured from duty paid inputs, and that the limited quantum of alleged undue benefit did not justify terminating the licence. Applying these principles, the charges under regulation 10(d), 10(e), 10(f), 10(k) and 10(n) do not sustain. [Paras 7, 8, 9, 10, 11]

Charges of breach of regulation 10(d), 10(e), 10(f), 10(k) and 10(n) are not proved and do not sustain.

Final Conclusion: Impugned order revoking licence/forfeiting security and imposing penalty under the Customs Broker Licencing Regulations, 2018 is set aside; appeal allowed.

Classification of unassembled or incomplete machines - incomplete machine as an assembly having the main essential features of the complete machine - unassembled machines treated as complete machines for classification - application of Rule 2(a) requiring assembly by simple fixing, riveting or welding - relevance of user manuals and technical drawings in classification - imposition of anti-dumping duty contingent on classification - concurrent imposition of penalties under Sections 112(a) and 114A - prohibition on double penalisation

Classification of unassembled or incomplete machines - incomplete machine as an assembly having the main essential features of the complete machine - application of Rule 2(a) requiring assembly by simple fixing, riveting or welding - relevance of user manuals and technical drawings in classification - imposition of anti-dumping duty contingent on classification - Whether the goods imported by the appellant were classifiable as complete/ incomplete Horizontal Injection Moulding Machines (heading 84771000) attracting anti dumping duty or as parts/spare parts (heading 84779000). - HELD THAT: - The Tribunal found that the record did not establish that the consignments were in a partly assembled condition or that they possessed the main essential features of the finished machines. The Chartered Engineer's report did not state that the imported items were partially assembled or that they could be put together by simple fixing operations; it only certified that the lots were new and intended for assembly and did not compare the manuals' parts lists with the actual imports. The settled interpretative position that Rule 2(a) applies only where parts can be assembled by simple fixing, riveting or welding was applied; here the appellants asserted, uncontested by the adjudicating authority, that additional processes (polishing, grinding, drilling, tapping, slotting, wiring, painting etc.) and parts procured separately were necessary for manufacture, and there was no evidence to the contrary. The presence of user manuals and drawings in the consignments was held not to be decisive of classification, since manuals may accompany parts intended for later assembly with other sourced components. Separately, the show cause notice did not charge a change of classification to the heading attracting anti dumping duty, and the Tribunal held that classification could not be altered in the absence of such a charge in the notice. On these bases the order changing classification and imposing anti dumping duty was set aside. [Paras 13, 14, 15, 16, 17]

Order changing classification to complete machines and demanding anti dumping duty is set aside; appeals of the importers are allowed.

Concurrent imposition of penalties under Sections 112(a) and 114A - prohibition on double penalisation - Whether penalty under Section 114A of the Customs Act could be sustained where penalty under Section 112(a) had already been imposed. - HELD THAT: - Revenue contended that penalty under Section 114A should have been imposed notwithstanding Section 112(a). The Tribunal considered the submissions and the precedents relied upon by Revenue, but concluded that in the facts of the case and on the reasoning adopted in the impugned order (where penalty under Section 112(a) had been imposed and Section 114A was not separately sustained), the Revenue's appeal seeking imposition of penalty under Section 114A failed. The Tribunal dismissed the Revenue's contention and refused to impose Section 114A penalty. [Paras 10, 17]

Revenue's appeal for imposition of penalty under Section 114A is dismissed.

Final Conclusion: The Tribunal set aside the impugned order insofar as it changed classification and levied anti dumping duty and allowed the appeals of M/s Huarong Plastic Machinery India Pvt. Ltd. and its directors; the Revenue's appeal to impose penalty under Section 114A was dismissed.

Scheme of amalgamation under Section 233 - Declaration of solvency - Registrar and Official Liquidator objections procedure - Central Government to file application before the Tribunal - Mandatory construction of 'may' in subsection (5)

Central Government to file application before the Tribunal - Mandatory construction of 'may' in subsection (5) - Regional Director/Central Government had no jurisdiction to reject the scheme under Section 233 and was obliged to file an application before the Tribunal if of the opinion that the scheme was not in public interest or in the interest of creditors. - HELD THAT: - On a conjoint reading of sub-sections (2), (3), (4) and (5) of Section 233 the Court held that where the Central Government, having received the scheme, forms an opinion that the scheme is not in the public interest or in the interest of creditors, the statutory course is to file an application before the Tribunal within sixty days of receipt of the scheme seeking consideration of the scheme under Section 232. The word "may" in sub-section (5) must be construed as mandatory so as to secure adjudication by the Tribunal rather than permitting an executive rejection that would leave companies at the mercy of the Central Government. Accordingly, even if respondent no.2 formed an adverse opinion (including on solvency), it was obliged to make the application to the Tribunal within the prescribed period instead of rejecting the application administratively. [Paras 13, 15, 16, 17, 18]

Impugned order of rejection was without jurisdiction and unlawful; respondent no.2 should have filed an application before the Tribunal under Section 233(5) and the impugned order is quashed and set aside.

Scheme of amalgamation under Section 233 - Declaration of solvency - Registrar and Official Liquidator objections procedure - The pre conditions under Section 233(1) and the filing requirement under Section 233(2) were complied with and respondent no.2 could not reject the scheme on the sole ground of alleged insolvency without resorting to the Tribunal process. - HELD THAT: - The petitioners issued notices and invited objections as required; shareholder and creditor approvals and the declaration(s) of solvency were filed and the transferee company filed the approved scheme with the Central Government, Registrar and Official Liquidator as prescribed. There were no objections/suggestions from the Registrar or Official Liquidator such that subsection (4) was inapplicable. Given compliance with the statutory pre conditions, respondent no.2 was not empowered to summarily reject the application on the basis of the balance sheet observation; the proper statutory remedy was to file the application before the Tribunal for adjudication under Section 232. [Paras 6, 7, 13, 17, 18]

Declaration of solvency filed and procedural pre conditions satisfied; rejection on the stated ground was improper and the impugned order is quashed and set aside.

Final Conclusion: The impugned order dated 12th November 2018 rejecting the application under Section 233 is quashed and set aside; the Central Government/Regional Director, if of the opinion that the scheme is not in public interest or interest of creditors, must file an application to the Tribunal under Section 233(5) within the prescribed period and the statutory consequences under Section 233 shall follow.

Operational debt - default - pre-existing dispute - summary jurisdiction of the Adjudicating Authority - admission under Section 9 - set off/counter-claim cannot be adjudicated in Section 9 - balance sheet admission and advances - use of IBC as recovery mechanism

Operational debt - default - balance sheet admission and advances - Whether an operational debt stood crystallised and a default existed such as to justify admission under Section 9 - HELD THAT: - The Tribunal examined the Adjudicating Authority's reliance on admitted entries in the audited financial statements (salary payable and PF dues) and the broader accounting entries indicating advances and amounts recoverable from the Operational Creditor. It found that the Adjudicating Authority made a one sided, perfunctory assessment of the balance sheets by treating certain entries as admissions without considering corresponding entries showing advances and recoverables (including a salary advance and amounts reflected as recoverable). The Tribunal concluded that the Adjudicating Authority erred in treating the existence of debt and default as established on that basis, because the Corporate Debtor had placed material financial entries on record that raised a genuine dispute as to the quantum and existence of any net liability. The Tribunal emphasised that IBC is not to be used as a recovery mechanism and that contractual claims which are disputed on the basis of accounting entries and counter contentions require adjudication in appropriate fora rather than summary determination under Section 9. [Paras 29, 30, 31, 33, 43]

The Adjudicating Authority's finding that an operational debt and default existed was set aside; the balance sheet admissions did not conclusively establish an undisputed debt for summary admission under Section 9.

Pre-existing dispute - notice of dispute - summary jurisdiction of the Adjudicating Authority - Whether there was a pre-existing dispute prior to the Section 8 demand notice which disentitled the Operational Creditor to invoke Section 9 - HELD THAT: - The Tribunal reviewed pre demand correspondence and the notice of dispute and concluded that the Corporate Debtor had, before receipt of the statutory demand, raised multiple germane disputes - including allegations of mismanagement, siphoning of funds, contesting computation of dues arising from a handwritten agreement, and revision of roles and compensation - which were material to the question of liability. These communications, together with the detailed notice of dispute, constituted plausible pre existing disputes that the Adjudicating Authority failed to appreciate; the Adjudicating Authority had instead focused on criminal complaints and investigations that arose post demand. Applying the Mobilox test, the Tribunal held that the disputes were not patently feeble or spurious and therefore required adjudication in an appropriate forum rather than summary disposal under Section 9. [Paras 38, 40, 41, 42, 43]

There existed genuine pre existing disputes prior to the demand notice; the Adjudicating Authority erred in holding otherwise and in admitting the Section 9 application.

Final Conclusion: The admission of the Section 9 application and initiation of CIRP was set aside because the Adjudicating Authority erred in treating certain balance sheet entries as conclusive admissions of debt and in overlooking genuine pre existing disputes; the Corporate Debtor is released from CIRP and the appeal is allowed with directions as to payment of the Resolution Professional's fees and refund of the deposited FDR, without any expression on the merits of the underlying disputes.

Threshold amount under Section 4 of the Insolvency and Bankruptcy Code - operational debt excluding interest under Section 5(21) of the Code - pre-existing dispute / notice of dispute under Section 9 - adjustment / set-off as a defence to a Section 9 petition - Mobilox test for plausible pre-existing dispute

Threshold amount under Section 4 of the Insolvency and Bankruptcy Code - operational debt excluding interest under Section 5(21) of the Code - Whether the claimed operational debt meets the minimum default threshold of Rs.1,00,00,000/- under Section 4 after excluding payments, debit notes and interest. - HELD THAT: - The Appellant's claimed principal amount of Rs.1,82,54,891/- was examined after accounting for a payment of Rs.20,71,000/- and a debit note of Rs.72,25,140/- asserted by the Respondent, and after disallowing interest as not constituting operational debt under Section 5(21). Applying binding precedents that interest claimed unilaterally or without agreement cannot be treated as operational debt, the deduction of the aforesaid items reduces the claim below the statutory threshold. The Tribunal accepted that interest is not part of operational debt as defined in the Code and that unilateral invoiced interest is not recoverable under Section 9, and therefore the admitted operational debt falls short of the Rs.1,00,00,000/- threshold required for initiating CIRP. [Paras 27, 30, 31, 32, 33]

The operational debt is below the threshold of Rs.1,00,00,000/- and the Adjudicating Authority's finding on threshold amount is upheld.

Pre-existing dispute / notice of dispute under Section 9 - adjustment / set-off as a defence to a Section 9 petition - Mobilox test for plausible pre-existing dispute - Whether there existed a pre existing dispute between the parties which warranted rejection of the Section 9 petition. - HELD THAT: - The Tribunal considered contemporaneous communications, emails concerning non-liftment of ordered goods, the credit note communications, the parties' correspondence about lifting the balance IPA, disputed accounting adjustments, and cheques and related criminal complaints. These materials, viewed together, disclose a plausible pre-existing dispute that is not patently feeble. The Tribunal applied the Mobilox principle that the Adjudicating Authority need only be satisfied that a bona fide or plausible dispute exists at the threshold and is not required to adjudicate its merits. The claim of the Appellant that set-off/adjustment is impermissible at admission was held inapplicable to the facts, since the Respondent's reliance was on commercial adjustments and communications predating the demand notice which could constitute a dispute for the purposes of Section 9. [Paras 34, 35, 36, 37, 38]

There existed a pre-existing dispute between the parties sufficient to reject the Section 9 petition and the Adjudicating Authority's finding on this ground is sustained.

Final Conclusion: The Adjudicating Authority's order dated 17th January 2024 is upheld: the claimed operational debt is below the statutory threshold after disallowing specified payments, debit note and interest, and there existed a plausible pre-existing dispute; the appeal is dismissed with parties bearing their own costs.

Audi alteram partem - maintainability of application under Section 65 - initiation of CIRP versus admission - collusion plea to be adjudicated by the Adjudicating Authority - remand for fresh consideration - requirement of a speaking order

Audi alteram partem - requirement of a speaking order - remand for fresh consideration - Whether the impugned order dismissing the Section 7 application without hearing was sustainable. - HELD THAT: - The Tribunal dismissed the Section 7 application without addressing arguments or hearing the parties. Counsel for the respondent did not dispute this factual position. The appellate bench applied the settled principle that no person should be condemned without being heard and found the impugned order unsustainable for want of hearing and absence of a speaking order. Consequently, the matter was set aside and remanded to the Tribunal with directions to hear both parties and decide the application in accordance with law after passing a speaking order. The Court made no observation on the merits of the underlying dispute. [Paras 3, 4]

Appeal allowed; impugned order set aside; CP (IB) No. 267 of 2021 restored and remanded to the Tribunal to hear the parties and decide the application with a speaking order.

Maintainability of application under Section 65 - initiation of CIRP versus admission - collusion plea to be adjudicated by the Adjudicating Authority - remand for fresh consideration - Whether an application under Section 65 is maintainable when filed before admission of a Section 7 application. - HELD THAT: - Relying on precedents including Beacon Trusteeship Limited, Ashmeet Singh Bhatia and Shree Ambica Rice Mill, the Court held that an application under Section 65 is not required to await admission of a Section 7 petition; it is maintainable after the application under Section 7, 9 or 10 has been filed (initiation of CIRP being the date of filing). Dismissal of the Section 65 application solely because it was filed before admission of the Section 7 application was held to be legally unsustainable. The Court restored the application dismissed by the Adjudicating Authority and remanded the matter to the Tribunal to decide the Section 65 application on merits, leaving open any objections as to locus to be decided by the Tribunal after hearing the parties. The appellate court did not decide the merits of the allegations of collusion or other substantive contentions. [Paras 8, 11, 12, 13]

Appeal allowed; impugned order set aside; application No. 1120 of 2022 restored and remanded to the Tribunal to decide the Section 65 application in accordance with law, with locus objections to be kept open.

Final Conclusion: Both appeals are allowed. The impugned orders are set aside and the matters are remanded to the Tribunal for fresh hearing and decision in accordance with law; no adjudication on merits has been made by the Appellate Tribunal.

Release of frozen bank deposits - writ of mandamus for release of property - Foreign Exchange Management Act adjudication and consequences of dropping charges - confiscation not ordered - freezing of bank accounts during investigation

Release of frozen bank deposits - Foreign Exchange Management Act adjudication and consequences of dropping charges - confiscation not ordered - Direction to respondents to release fixed deposits frozen and transferred to the Enforcement Directorate where adjudication proceedings against the petitioners have been dropped and confiscation was not ordered. - HELD THAT: - The Adjudicating Authority in Adjudication Order-in-Original No.DD/CEZOII/03/2024 (RV), dated 08.04.2024, recorded that the charges against the petitioners under Section 3(a) of FEMA read with regulation 5 of the Deposit Regulations to specified extents were dropped and that confiscation of the cash balances in the identified deposit accounts was not proposed. In view of the dropping of charges and the absence of an order for confiscation, the High Court found no impediment to the release of the fixed deposit amounts which had earlier been frozen and transferred to the Enforcement Directorate. The court therefore issued a writ of mandamus directing the respondents to take steps to release the amounts in the fixed deposits to the petitioners in accordance with the Adjudication Order and to do so as expeditiously as possible.` [Paras 4, 5]

Writ petition allowed; respondents directed to release the fixed deposit amounts to the petitioners in accordance with the Adjudication Order; no costs.

Final Conclusion: The High Court allowed the writ petition and directed the respondents to release the fixed deposit amounts to the petitioners forthwith in accordance with the Adjudication Order which dropped the charges and did not order confiscation.

Seizure of proceeds of crime under Section 17(1) of the Prevention of Money Laundering Act, 2002 - possession of proceeds of crime need not be with accused named in FIR/ECIR - evidentiary significance of statement recorded under Section 50 of the Act - obligation of a money changer to account for cash withdrawals in the course of authorised foreign exchange business - interim seizure during continuing investigation

Seizure of proceeds of crime under Section 17(1) of the Prevention of Money Laundering Act, 2002 - possession of proceeds of crime need not be with accused named in FIR/ECIR - evidentiary significance of statement recorded under Section 50 of the Act - Validity of seizure under Section 17 of the Act despite the appellant not being named as an accused in the FIR or ECIR - HELD THAT: - The Tribunal held that Section 17(1) permits seizure of proceeds of crime or records relating to money laundering from any person who is in possession of such property and it is not confined to a person named as an accused in the FIR or ECIR. The recorded reason to believe, based on information and material, justified search and seizure. The statement of Arun Muthu under Section 50, coupled with the statement of the appellant's employee and incriminating material (including mobile conversations), constituted sufficient material to show involvement of the appellant in facilitating Hawala transactions. Consequently the ground that seizure was impermissible because the appellant was not an accused was rejected. [Paras 17]

Seizure under Section 17 was valid and the appellant's contention based on not being named in the FIR/ECIR is not sustainable.

Obligation of a money changer to account for cash withdrawals in the course of authorised foreign exchange business - interim seizure during continuing investigation - Sufficiency of the appellant's explanation and documents regarding cash withdrawals and use of funds for authorized foreign exchange business - HELD THAT: - The Tribunal examined the bank statements and the appellant's claim that cash recovered represented authorised withdrawals used in its foreign exchange business. It found the appellant failed to demonstrate how the withdrawn cash was utilised for lawful foreign exchange transactions and did not produce documents showing such utilisation. Given the material indicating large scale Hawala related transactions and the absence of satisfactory explanation or records to rebut those material, the Tribunal declined to accept the appellant's explanation. The Tribunal also noted that investigation into the appellant's role was continuing, and interim measures of seizure could be maintained in that context. [Paras 18]

The appellant's explanation and documents were inadequate to discharge the burden of proof, and the challenge on these factual grounds fails.

Final Conclusion: The appeal is dismissed; the Adjudicating Authority's order confirming seizure is upheld, the appellant having failed to rebut material indicating possession of proceeds of crime and having not satisfactorily accounted for the cash withdrawals. Investigation into the appellant's involvement remains ongoing.

Rejection of declarations under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Quantification of demand based on bank guarantee - Coverage of redemption fine under SVLDR Scheme - Reason for rejection cannot be improvised in affidavit-in-reply - Duplicity due to filing with wrong Commissionerate and subsequent withdrawal - Entitlement of co-noticee where main noticee accepted under the Scheme

Rejection of declarations under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Coverage of redemption fine under SVLDR Scheme - Quantification of demand based on bank guarantee - Reason for rejection cannot be improvised in affidavit-in-reply - Declaration in Form SVLDRS-1 No. LD2712190000801 dated 27th December 2019 was wrongly rejected and must be accepted. - HELD THAT: - The respondents conceded that the stated ground of non-quantification in the rejection order was erroneous. The court observed that the question whether a redemption fine is covered by the SVLDR Scheme is conclusively answered by this Court's decision in Messrs. Esbee Electrotech LLP & Ors. (supra), which supports the petitioners' position. The court further held that a rejection order cannot be sustained where the reason recorded is incorrect and cannot be retroactively amended by a fresh ground in the affidavit-in-reply. It was also noted that bank guarantees are provided for quantified amounts, negating the stated ground of non-quantification as a basis for rejection. For these reasons the declaration had to be accepted and procedures for communication and payment directed. [Paras 3]

Respondents directed to accept Form SVLDRS-1 No. LD2712190000801 and proceed with payment communication and issuance of Form SVLDRS-4 as ordered.

Rejection of declarations under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Quantification of demand based on bank guarantee - Six declarations in Form SVLDRS-1 (Nos. LD2712190004458, LD2712190003439, LD2712190003717, LD2712190003221, LD2712190003805 and LD2712190004288) dated 27th December 2019 were wrongly rejected and must be accepted. - HELD THAT: - Petitioners relied on the Court's earlier finding in Messrs. Esbee Electrotech LLP & Ors. (supra) that a formula for quantification of demand had been arrived at in Writ Petition No. 394 of 2007, enabling submission of bank guarantees based on that formula. The respondents and petitioners agreed the basis for rejection-non-quantification despite a bank guarantee-does not survive in light of that precedent. Consequently, the rejection on that ground was unsustainable and the declarations are to be accepted, with directions for intimation of any payment and subsequent issuance of Form SVLDRS-4. [Paras 4]

Respondents directed to accept the six specified declarations and follow the payment and certification process ordered.

Rejection of declarations under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Duplicity due to filing with wrong Commissionerate and subsequent withdrawal - Declaration in Form SVLDRS-1 No. LD2712190003630 dated 27th December 2019 filed by Petitioner No. 2 was wrongly rejected as duplicative and must be accepted. - HELD THAT: - Petitioner No. 2 had initially filed with the wrong Commissionerate, withdrew that application upon realizing the error, and then filed a fresh application with the correct Commissionerate. The respondents did not dispute these facts in their affidavit. The court held that rejection on the ground of duplicity was incorrect where the earlier application had been withdrawn and the re-filing with the correct jurisdiction was not disputed. Therefore the rejection could not be sustained and the declaration should be accepted with directions for payment communication and certification. [Paras 5]

Respondents directed to accept Form SVLDRS-1 No. LD2712190003630 and proceed with payment intimation and issuance of Form SVLDRS-4 as directed.

Rejection of declarations under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Entitlement of co-noticee where main noticee accepted under the Scheme - Declaration in Form SVLDRS-1 No. LD2712190004904 dated 27th December 2019 filed by Petitioner No. 3 (co-noticee) was wrongly rejected and must be accepted consequent to acceptance of the main noticee's declaration. - HELD THAT: - Respondents had rejected the co-noticee's declaration on the basis that the amount was not quantified before 30th June 2019 and that an investigation was in progress. The court accepted the parties' agreement that, since the main noticee (Petitioner No. 1) has been directed to be accepted under the Scheme on the ground of quantification prior to 30th June 2019, the co-noticee is accordingly entitled to the benefit. Consequently, the co-noticee's declaration must be accepted and the usual timetable for payment intimation, payment and issuance of Form SVLDRS-4 was directed. [Paras 6]

Respondents directed to accept Form SVLDRS-1 No. LD2712190004904 and follow the payment and certification timetable as ordered.

Final Conclusion: The writ petition is allowed. The High Court directed respondents to accept the seven specified declarations of the petitioners (including the co-noticee), to intimate any payment due within four weeks, to permit payment by petitioners within two weeks of such intimation, and to issue Form SVLDRS-4 within four weeks of receiving the petitioners' communication of payment.

CENVAT Credit - Input Service Distributor - extended period of limitation - Rule 9(2) of the CENVAT Credit Rules, 2004 - Rule 4A(1) of the Service Tax Rules, 1994 - Notification No. 10/2008-C.E.(N.T.) - interest and penalty

CENVAT Credit - Input Service Distributor - Notification No. 10/2008-C.E.(N.T.) - extended period of limitation - Validity of denial of CENVAT Credit amounting to Rs.28,00,459/- - HELD THAT: - The adjudicating authority disallowed various components of the claimed CENVAT credit. The Tribunal found that Notification No.10/2008-C.E.(N.T.) permits an ISD to distribute credit on inputs and capital goods with effect from 01.04.2008, and there was no finding of suppression with intent to evade duty. Accordingly, denial of credit of Rs.16,19,472/- for alleged improper ISD distribution was unsustainable. Amounts disallowed on account of calculation errors or alleged absence of supporting documents pertaining to earlier years fell beyond the normal period of limitation and, in the absence of established intent to evade duty, could not be sustained by invoking the extended period; consequently the disallowance of Rs.7,18,797/-, Rs.4,45,016/- and Rs.17,174/- was set aside. The Tribunal therefore held the entire Rs.28,00,459/- to be eligible as CENVAT credit. [Paras 9]

The disallowance of CENVAT Credit of Rs.28,00,459/- is unsustainable and is set aside.

CENVAT Credit - Rule 9(2) of the CENVAT Credit Rules, 2004 - Rule 4A(1) of the Service Tax Rules, 1994 - Validity of denial of CENVAT Credit amounting to Rs.21,68,423/- on account of alleged defective invoices for 'Rent-a-cab' services - HELD THAT: - The Revenue challenged the claimed credit on the ground that bills did not contain particulars mandated by Rule 9(2) of the CENVAT Credit Rules, 2004 read with Rule 4A(1) of the Service Tax Rules, 1994. The Tribunal examined the documents and found that the invoices and bills contained the requisite particulars. There was no dispute regarding receipt and utilization of the services. In consequence, the denial of credit on procedural grounds was not sustainable and the disallowance was set aside. [Paras 10]

The disallowance of CENVAT Credit of Rs.21,68,423/- is unsustainable and is set aside.

CENVAT Credit - interest and penalty - Whether interest and penalty could be demanded and imposed after finding the credit to be eligible - HELD THAT: - The Tribunal held that since the entire credit availed by the appellant was held to be eligible on the merits, there remained no basis for demanding interest or imposing penalty for irregular availment of credit. Consequently, the questions of interest and penalty did not survive. [Paras 11]

Demand for interest and imposition of penalty do not arise and are set aside.

Final Conclusion: The impugned order is set aside in full; the appeal is allowed and the CENVAT credit denied by the adjudicating authority is restored, with no interest or penalty payable.

Refundable security deposit - Residential Complex Service - Interest Free Maintenance Security - Preferential Location Charges - Management, Maintenance and Repair Services - Bundled services - essential character test - Section 66F(3)(a) - determination of taxability of bundled services - Valuation and abatement under Notification No. 26/2012-ST - Prohibition on hypothetical valuation where no actual consideration received

Refundable security deposit - Interest Free Maintenance Security - Management, Maintenance and Repair Services - Taxability of amounts collected as Interest Free Maintenance Security (IFMS) by the builder - HELD THAT: - The Tribunal held that amounts collected as IFMS, being refundable under the buyer agreement on termination and held as security for eventual defaults, are refundable security deposits and not consideration for any separate service. The Adjudicating Authority's conclusion that the IFMS was not genuine because no refunds had yet been made was rejected: absence of any termination or refund event does not convert a contractually refundable security into consideration for services. The Tribunal also noted existing precedents of the Tribunal to the same effect and applied them to hold that IFMS does not fall within taxable "Management, Maintenance and Repair Services."

Demand of service tax and penalty insofar as based on IFMS is set aside.

Preferential Location Charges - Bundled services - essential character test - Section 66F(3)(a) - determination of taxability of bundled services - Valuation and abatement under Notification No. 26/2012-ST - Prohibition on hypothetical valuation where no actual consideration received - Taxability and valuation of Preferential Location Charges (PLC) collected by the builder - HELD THAT: - The Tribunal found that PLC arise in the context of the contract for sale of the constructed unit and are naturally bundled with the main construction service; there is no separate individual taxable service rendered in return for PLC. Applying the essential-character test under Section 66F, the bundle is construction services and PLC form part of that bundle. Consequently, abatement under Notification No. 26/2012 ST for construction-related supplies was held applicable where appropriate. Separately, the Tribunal held that Revenue's exercise of levying service tax on hypothetical calculations from a price list - when the buyer agreements and the books did not show actual receipts under those heads - was impermissible; service tax cannot be levied on such notional entries in the absence of actual consideration. On these bases the demand recalculated on PLC and associated penalty were not sustainable.

Demand of service tax and penalty insofar as based on PLC and on hypothetical valuation is set aside; abatement claim held correctly applied where applicable.

Final Conclusion: The appeal is allowed; service tax demands and the penalty confirmed in the impugned order in respect of IFMS and PLC (for the period 2010-11 to 2014-15) are set aside, and consequential relief, if any, shall follow as per law.

Export of service - Used outside India / accrual of benefit - Rule 3(2)(a) of Export of Service Rules, 2005 - Amendment to Export of Service Rules (w.e.f. 27.02.2010) - Intermediary service - Place of Provision of Services Rules, 2012 - Sub-contracting / sub-agent versus intermediary - Business Auxiliary Service

Export of service - Used outside India / accrual of benefit - Rule 3(2)(a) of Export of Service Rules, 2005 - Whether services rendered by the appellants during 01.04.2009 to 26.02.2010 qualify as export of service under the Export of Service Rules, 2005. - HELD THAT: - The Tribunal held that the appellants contracted only with the overseas principal (M/s OCA) and there was no contract between the appellants and foreign universities or the Indian students; the appellants performed services for and on account of M/s OCA and the benefit of those services accrued to M/s OCA abroad. Applying the ratio of the Larger Bench in Arcelor Mittal (observed in the impugned reasoning), the service delivered from India to a recipient located outside India and paid in convertible foreign exchange satisfies the requirement that the service be delivered and used outside India. Consequently, the condition in Rule 3(2)(a) is satisfied for the period 01.04.2009 to 26.02.2010 and the services qualify as export of service. [Paras 10]

Services for 01.04.2009 to 26.02.2010 are export of service under Rule 3(2)(a) of the Export of Service Rules, 2005.

Export of service - Amendment to Export of Service Rules (w.e.f. 27.02.2010) - Whether services rendered by the appellants during 27.02.2010 to 30.06.2012 qualify as export of service in view of the amendment to the Export of Service Rules. - HELD THAT: - The Tribunal observed that the amendment to the Export of Service Rules removed the requirement that services be both provided from India and used outside India, leaving the determinative conditions as (i) the recipient is located outside India and (ii) consideration is received in convertible foreign exchange. As there was no dispute that both conditions were met in the appellant's case, the Tribunal held that the services rendered in the period 27.02.2010 to 30.06.2012 qualify as export of service, applying earlier authorities which interpret accrual of benefit and place of provision harmoniously. [Paras 11]

Services for 27.02.2010 to 30.06.2012 are export of service in view of the amendment to the Export of Service Rules.

Intermediary service - Place of Provision of Services Rules, 2012 - Sub-contracting / sub-agent versus intermediary - Business Auxiliary Service - Whether services rendered by the appellants during the post 01.07.2012 period (up to 31.03.2015) constitute 'Intermediary Services' or are exportable services (being sub contracted facilitation) not classifiable as intermediary. - HELD THAT: - The Tribunal examined the statutory definition of 'Intermediary' in the Place of Provision of Services Rules, 2012 and the factual scheme of arrangements. It found the contractual chain involved M/s OCA and the Australian universities as principal service provider and recipient, with the appellants having a contract only with M/s OCA and no direct contract with universities or students. There was no evidence of three party arrangements where the appellant arranged or facilitated a main service between two distinct other parties; rather the appellants carried out work subcontracted by M/s OCA. The Tribunal relied on precedents (including IDP Education) and CBIC guidance that sub contracting/sub agency where the sub contractor performs the main service on behalf of the principal does not transform the sub contractor into an intermediary. Consequently, the Tribunal concluded that the appellants were not providing 'Intermediary Services' and were eligible for export treatment for the post 01.07.2012 period. [Paras 12, 13, 14, 15, 16]

Services for the post 01.07.2012 period do not qualify as Intermediary Services; appellants are sub contractor/sub agent and eligible for export of services treatment.

Final Conclusion: The appeal succeeds on merits: services rendered to the overseas principal constitute export of service for the periods under challenge and do not fall within the definition of Intermediary Services; consequential demands, interest and penalties confirmed in the adjudicating order are set aside and relief granted as per law.

Classification of services - indivisible works contract - works contract service - commercial or industrial construction service - taxability of construction services - application of precedent in Larsen & Toubro

Indivisible works contract - works contract service - commercial or industrial construction service - application of precedent in Larsen & Toubro - Works executed by the appellant are indivisible works contracts and cannot be classified as commercial or industrial construction services - HELD THAT: - The Tribunal found on the record that the works carried out by the appellant are in the nature of indivisible works contracts. Consequently, any demand arising therefrom ought to have been framed under the head of works contract service and not under commercial or industrial construction service. The issue is no longer res integra and has been authoritatively considered in the decision of the Apex Court in CCE, Kerala vs. Larsen & Toubro Ltd; the Tribunal has adopted the same approach as taken in H P Singh Chadha v. CGST, Ludhiana, holding that indivisible works contracts are not classifiable as commercial or industrial construction services. Applying that precedent to the facts of the present appeals, the demands confirmed by the impugned orders could not be sustained. [Paras 6, 7, 8]

Set aside the impugned orders and allow the appellant's appeals as the demands cannot be sustained under commercial or industrial construction service for indivisible works contracts.

Final Conclusion: The Tribunal allowed the appeals, holding that the appellant's indivisible works contracts are not taxable as commercial or industrial construction services and that the demands confirmed by the impugned orders must be set aside.

Service - Negative List - Mega Exemption Notification - Health care services by a clinical establishment - Retrospective versus prospective operation of an amendatory notification - Extended period of limitation under the proviso to Section 73(1) - Suppression of facts and penalty under Section 78 - Interest on delayed payment under Section 75 - Obligation to obtain service tax registration, self-assess and file ST-3 returns

Service - Health care services by a clinical establishment - Mega Exemption Notification - Negative List - Whether the activities of enrolment, collection, processing and storage of Umbilical Cord Blood Stem Cells carried out by M/s StemCyte were exempt as "Health care services by a clinical establishment" for the period 01.07.2012 to 16.02.2014 - HELD THAT: - The Tribunal accepted the adjudicating authority's conclusion that the cord blood banking activities-collection, processing and cryo storage of umbilical cord blood-do not fall within the definition of "Health care services" under the Mega Exemption Notification as these activities are not services by way of diagnosis, treatment or care in any "recognised system of medicines in India" and are not within the examples contemplated by the notification. Although the services are connected to health, they are distinct processes of banking and preservation and therefore were taxable under the negative list/chargeable regime from 01.07.2012 until the amendment. The appellate forum found no merit in the assessee's contention that the activity was inherently covered by the exemption prior to amendment of the notification.

The activities were taxable from 01.07.2012 to 16.02.2014 and not covered by the Mega Exemption Notification prior to the amendment.

Retrospective versus prospective operation of an amendatory notification - Mega Exemption Notification - Whether Notification No. 04/2014 (inserting Entry 2A) operates retrospectively so as to exempt services provided prior to 17.02.2014 - HELD THAT: - Relying on established principles distinguishing remedial/clarificatory provisions from substantive amendments, the Tribunal endorsed the adjudicating authority's view that the amendment inserting Entry 2A is not expressed to have retrospective effect and, absent clear legislative intent, amendatory notifications operate prospectively. The Tribunal noted precedent and statutory construction principles that an amendatory provision affecting substantive rights is prima facie prospective and that a Board circular cannot expand the notification's effect to the past. Accordingly, the insertion of Entry 2A granting exemption to preservation of stem cells took effect prospectively from 17.02.2014.

Notification No. 04/2014 is prospective in operation and does not exempt services rendered before 17.02.2014.

Extended period of limitation under the proviso to Section 73(1) - Suppression of facts and penalty under Section 78 - Obligation to obtain service tax registration, self-assess and file ST-3 returns - Whether the extended five year period under the proviso to Section 73(1) is invocable on facts of deliberate non disclosure/suppression by M/s StemCyte - HELD THAT: - The Tribunal upheld the finding that the assessee had deliberately withheld information and failed to disclose taxable receipts, obtain timely registration, assess tax and file ST 3 returns. The adjudicating authority's conclusion-that entries of taxable value existed in the assessee's own books but were not declared to authorities, and that the short payment would have remained undetected but for departmental search-was accepted as establishing suppression. On this basis the extended limitation under the proviso to Section 73(1) was properly invoked.

Extended period of limitation was correctly applied because suppression of facts was established.

Interest on delayed payment under Section 75 - Failure to pay service tax within prescribed time - Whether interest is payable for delayed payment of service tax on the amounts found taxable for the period 01.07.2012 to 16.02.2014 - HELD THAT: - The Tribunal affirmed the adjudicating authority's reliance on the statutory scheme that tax not paid within the prescribed period attracts interest under Section 75. Given that the assessee did not discharge the tax to Government account within the stipulated timeframes, interest on the determined liability was held to be payable at the applicable rate.

Interest under Section 75 is payable on the determined service tax liability.

Suppression of facts and penalty under Section 78 - Penalty provisions for failure to register, assess and file returns - Whether penalties under the Finance Act (Sections 77 and 78 as applicable) are leviable and whether reduced penalty relief under proviso to amended Section 78 applies - HELD THAT: - The Tribunal sustained the finding that the assessee had committed suppression and contraventions-failure to obtain timely registration, to assess and file returns and to pay tax electronically-warranting imposition of penalties under the relevant provisions. It further accepted the adjudicating authority's conclusion that details of the transactions were recorded in the assessee's books for the relevant period, thereby qualifying the case for the reduced penalty (50% of the tax determined) under the proviso to the substituted Section 78 for the period prior to the Finance Bill, 2015 receiving assent.

Penalties under Sections 77/78 are sustainable, with the benefit of reduced penalty (50%) applicable for the specified period where records existed.

Final Conclusion: The appeal is dismissed. The tribunal upholds the adjudicating authority's findings that the cord blood banking activities were taxable from 01.07.2012 to 16.02.2014, that the amendment inserting Entry 2A in the exemption notification is prospective (effective 17.02.2014), that the extended limitation period was rightly invoked on account of suppression, and that interest and penalties (with the limited benefit of reduced penalty where records existed) are leviable; the impugned order is sustained.

Security deposit not taxable as consideration - interest-bearing refundable deposit not includible in taxable value - penalty/minimum demand charge not a taxable service - statutory charges collectible under PNGRB Act not part of consideration - reconnection/disconnection charges constitute taxable service - Cenvat credit admissible despite clerical misclassification - extended period/time-bar where no suppression of facts

Security deposit not taxable as consideration - interest-bearing refundable deposit not includible in taxable value - Advance/security deposits received against transmission charges are not includible in taxable value for Service Tax. - HELD THAT: - The amounts held as three months' deposit under the contract, being refundable and carrying interest at 3%, are records of security deposits and not consideration for any taxable service. The Tribunal relied on established precedent that interest-bearing refundable deposits, having no nexus to the nature or value of the service rendered, cannot be treated as part of the consideration and hence are not leviable to Service Tax. The department failed to demonstrate any nexus between the deposits and the value of the taxable service. Demand in respect of such advances is therefore set aside. [Paras 2, 3]

Demand on advances received against transmission charges from tea estates and other consumers set aside.

Penalty/minimum demand charge not a taxable service - Minimum Demand Charge (penalty for shortfall) is not chargeable to Service Tax. - HELD THAT: - The Minimum Demand Charge arises as a contractual penalty where the consumer fails to take contractual quantity and is therefore compensatory/penal in nature rather than payment for provision of a service. Following the Tribunal's precedent in the appellant's earlier order and the GAIL decision, such penalty cannot be characterised as consideration for a taxable service and Service Tax is not leviable on this count. [Paras 5]

Service Tax demand on Minimum Demand Charge disallowed.

Statutory charges collectible under PNGRB Act not part of consideration - Amounts collected as security in terms of section 14 of the PNGRB Act (meter/installation charges from domestic consumers) are not includible in taxable value. - HELD THAT: - The sums collected from domestic consumers were required to be collected under the PNGRB Act and are refundable on surrender of connection. Being statutory refundable deposits, they lack nexus with the consideration for provision of taxable service and therefore cannot be included in the taxable value. The adjudicated Service Tax on these amounts is set aside. [Paras 8]

Service Tax demand on meter/installation charges collected from domestic consumers set aside.

Reconnection/disconnection charges constitute taxable service - Charges for reconnection/resumption of supply constitute consideration for provision of service and are taxable. - HELD THAT: - Amounts received for disconnection and subsequent reconnection/resumption of gas supply accrue on account of services rendered (initial connection, re-connection or similar). The Tribunal rejected the appellant's contention that these are merely penal and held that such charges represent provision of service and are accordingly exigible to Service Tax. Accordingly the demand in respect of reconnection charges is confirmed. [Paras 9]

Service Tax demand on reconnection charges confirmed.

Cenvat credit admissible despite clerical misclassification - Cenvat credit taken on erection, commissioning and installation service is admissible despite erroneous classification as input or capital goods, as the defect is curable. - HELD THAT: - The appellant had availed Cenvat credit for erection, commissioning and installation services but mistakenly indicated the same under input and capital goods. The Tribunal treated this as a curable clerical error and held that the credit is otherwise eligible; the disallowance is therefore set aside and credit allowed. [Paras 10]

Disallowance of Cenvat credit set aside and credit allowed.

Extended period/time-bar where no suppression of facts - Demand for extended period is time-barred in absence of suppression or intent to evade tax. - HELD THAT: - Although limitation was pleaded, the Tribunal, having decided the substantive issues, found no material to substantiate the department's allegation of suppression of facts or misstatement with intent to evade tax. Records showed that DGCEI had sourced business profile and records from the appellant in 2004. Consequently, invocation of the extended period was unwarranted and the confirmed demand for the extended period is held time-barred. [Paras 11]

Extended period demand held time-barred; extended period invocation set aside.

Treatment of previously adjudicated/appropriated payments - Amounts already paid, appropriated or not contested before the lower authority are treated as settled. - HELD THAT: - For various categories (fuel surcharge, amounts on cost of gas meter and installation already paid and appropriated), the Tribunal recorded that these were not contested or had been correctly paid and/or appropriated. Those heads therefore required no further adjudication and are treated as settled in favour of the appellant. [Paras 4, 7]

Demands in respect of fuel surcharge and amount on cost of gas meter and installation that were paid/appropriated are treated as settled.

Final Conclusion: The appeals are allowed in part: demands on security/advance deposits, minimum demand charge, and statutory refundable meter/installation deposits are set aside; Cenvat credit disallowance is vacated and credit allowed; reconnection charges demands are confirmed; demands already paid or appropriated are treated as settled; extended period invocation is held time-barred and penal liabilities are set aside. The appellant shall pay the amounts held payable with applicable interest.

CENVAT Credit on capital goods - works contract service - ownership and property transfer - installation and commissioning by contractor - capital goods as part of factory used in manufacture - penalty for wrongful availment of credit

CENVAT Credit on capital goods - ownership and property transfer - installation and commissioning by contractor - capital goods as part of factory used in manufacture - Appellant-Tata entitled to avail CENVAT Credit on capital goods procured and supplied to contractor for erection and commissioning - HELD THAT: - The capital goods were procured by the appellant under a separate contract on payment and became the property of the appellant. Those goods, though handed over to the contractor for erection and commissioning, remained the appellant's property and were subsequently used in the appellant's manufacturing process. Reliance on earlier decisions treating parts/sets of plant as part of the factory and permitting credit where the goods are received in the assessee's factory and used in manufacture supports the conclusion. The fact that the contractor paid service tax under works contract service and did not avail credit on inputs does not convert the capital goods into the contractor's inputs or defeat the appellant's right to credit where the goods were procured on sale basis and retained as the appellant's property.

CENVAT Credit on the capital goods is allowable to the appellant-Tata.

Penalty for wrongful availment of credit - CENVAT Credit on capital goods - Penalty imposed on the appellants for availment of CENVAT Credit is not sustainable - HELD THAT: - Since the appellant-Tata was correctly entitled to take CENVAT Credit on the capital goods as held, the foundational basis for imposing penalties on the appellants collapses. There being no wrongful availment where credit was legitimately taken, the imposition of penalty cannot be sustained and is set aside.

Penalties imposed on the appellants are revoked.

Final Conclusion: Impugned order set aside; appeals allowed and CENVAT Credit granted to the appellant-Tata with penalties withdrawn, with consequential relief if any.

Summary order. Special Leave Petitions dismissed; delay condoned; pending application disposed of.

Refund of Cenvat credit under Section 142(3) of the CGST Act, 2017 - distinction between Cenvat credit and input tax credit - bar on input tax credit under Section 142(8)(a) of the CGST Act, 2017 - relevance of Clause (a) to (f) of Section 11B(2) of the Central Excise Act, 1944 - remand for verification of admissibility, unjust enrichment and documentary proof

Refund of Cenvat credit under Section 142(3) of the CGST Act, 2017 - relevance of Clause (a) to (f) of Section 11B(2) of the Central Excise Act, 1944 - Refund of Cenvat credit of CVD and SAD claimed under Section 142(3) was wrongly rejected on the ground that it did not fall within Clause (a) to (f) of Section 11B(2) of the Central Excise Act, 1944. - HELD THAT: - The Tribunal found that Section 142(3) expressly provides for cash refund of Cenvat credit and therefore the legislative scheme under Section 11B(2)(a)-(f) of the Central Excise Act is not material to entitlement under Section 142(3). The lower authorities erred in treating absence of coverage under Section 11B(2)(a)-(f) as a ground to deny refund when the statutory provision specifically permitting refund of Cenvat credit under Section 142(3) applied. Consequently, the rejection of the refund claim on this ground was held to be incorrect. [Paras 4]

Refund claim could not be rejected on the ground that it was not covered by Clause (a) to (f) of Section 11B(2); the refund was wrongly refused on this basis.

Distinction between Cenvat credit and input tax credit - bar on input tax credit under Section 142(8)(a) of the CGST Act, 2017 - Section 142(8)(a) does not operate to bar refund of Cenvat credit in this case because that provision relates to inadmissibility of input tax credit recovered as arrears under the CGST Act, not to refund of Cenvat credit under Section 142(3). - HELD THAT: - The Tribunal examined Section 142(8)(a) and concluded it prevents admission of amounts recovered as arrears as input tax credit under the CGST framework; it does not convert Cenvat credit into input tax credit or bar refund of Cenvat credit which was admissible under the pre existing law and claimable under Section 142(3). The lower authorities misconstrued Section 142(8)(a) and treated Cenvat credit as though it were input tax credit, which the Tribunal found to be a grave error and an illegal basis for rejection. [Paras 4]

Section 142(8)(a) does not preclude refund of the Cenvat credit claimed; rejection on this ground was unsustainable.

Remand for verification of admissibility, unjust enrichment and documentary proof - Limited remand ordered to the adjudicating authority for verification of admissibility of the claimed input service for Cenvat credit, consideration of unjust enrichment and examination of relevant documents. - HELD THAT: - Although the primary legal grounds for rejection were set aside, the Tribunal noted that the sanctioning authority had not addressed several factual and legal aspects such as admissibility of the input service for Cenvat credit, the question of unjust enrichment and verification of supporting documents. These matters were not decided on their merits by the lower authorities. Therefore, the Tribunal allowed the appeal by way of remand to enable the adjudicating authority to examine these issues afresh and decide them in accordance with law, limited to the aspects identified. [Paras 4, 5]

Matter remanded for limited purpose of determining admissibility of the input service for Cenvat credit, unjust enrichment and verification of documents; impugned order set aside and appeal allowed to that extent.

Final Conclusion: The Tribunal set aside the impugned rejection of the refund claim, held that neither Clause (a)-(f) of Section 11B(2) nor Section 142(8)(a) of the CGST Act justified denial of the Cenvat refund under Section 142(3), and remanded the matter to the adjudicating authority for limited verification of admissibility, unjust enrichment and documentary evidence.

Classification of goods - medicated ointment - interpretation of taxing entry - exclusion clause and specific inclusion - noscitur a sociis - ejusdem generis - generalia specialibus non derogant - burden of proof in classification/chargeability - rule of strict interpretation of charging provisions favouring the assessee - limited revisional jurisdiction of High Court

Medicated ointment - classification of goods - Boroplus Antiseptic Cream (BPAC) is classifiable as a medicated ointment within Entry 41 of Schedule II Part (A) and liable to tax at the rate thereunder. - HELD THAT: - The Tribunal's factual finding, based on expert opinion, product labelling and authoritative pharmaceutical sources, established that BPAC has the composition and properties of an ointment (high oil content, low water content, occlusive nature) and possesses therapeutic/medicinal properties attributable to its ingredients. The High Court, on review, upheld these findings as supported by evidence on record and not vitiated by perversity, observing that the Revenue produced no contrary material to displace the Tribunal's conclusion. Where classification turns on the tribunal's appreciation of technical and documentary evidence, the High Court will not reappraise facts in revision unless the finding is perverse or unsupported by any evidence. [Paras 16, 18, 21, 22, 45]

The finding that BPAC is a medicated ointment is sustained and it falls within Entry 41.

Interpretation of taxing entry - exclusion clause and specific inclusion - noscitur a sociis - generalia specialibus non derogant - Entry 41 must be read as a whole: the exclusion of certain items (including 'antiseptic cream') does not negate the specific inclusion of medicated ointments, and the conjunctive 'but' indicates an intentional exception in favour of medicated ointments. - HELD THAT: - The Court applied established rules of statutory construction (interpret the provision as a whole, give effect to inclusive and exclusive clauses, and apply noscitur a sociis/ejusdem generis principles). The conjunction 'but' was held to introduce a deliberate exception so that, notwithstanding the list of excluded items, medicated ointments remain within the scope of Entry 41. The Court rejected an interpretation that would render the specific term 'antiseptic cream' otiose where the legislative scheme expressly includes medicated ointments as an exception to the exclusions. [Paras 9, 11, 13, 15, 28]

Entry 41, contemporaneously read, includes medicated ointments despite the exclusion of certain items; the exclusion does not automatically exclude all products with antiseptic properties if they qualify as medicated ointments.

Burden of proof in classification/chargeability - rule of strict interpretation of charging provisions favouring the assessee - On the issue of reclassification, the Revenue bore the onus to prove that BPAC did not fall within Entry 41; having failed to produce contrary evidence, the Tribunal's classification in favour of the assessee stood. - HELD THAT: - The Court distinguished chargeability from exemption law: where a charging provision is invoked and two views are possible, the interpretation favourable to the assessee is to be adopted. Precedents require the Revenue to adduce material if it seeks to classify goods differently from the assessee's contention. Here the Revenue produced no evidence to contradict the respondent's technical and documentary proof; accordingly, the burden was not discharged and the Tribunal's finding could not be faulted. [Paras 24, 25, 26, 28, 29]

The Revenue failed to discharge its burden to show BPAC was not a medicated ointment; therefore the Tribunal's favourable classification for the assessee is maintained.

Limited revisional jurisdiction of High Court - The High Court will not re-appreciate or substitute its view on factual findings recorded by the Tribunal in a revision under Section 58 unless those findings are perverse, based on no evidence, or involve a question of law. - HELD THAT: - The Court reiterated the restrained scope of revisional jurisdiction: it is confined to questions of law and to correcting findings that are illegal, perverse, or unsupported by any evidence. The Tribunal is the primary fact-finding authority; absent a demonstration that its findings suffered from perversity or legal error, the High Court should not remit or re-evaluate the factual matrix. The Court also rejected the Revenue's request for remand in view of the substantial evidence already considered by the Tribunal. [Paras 40, 41, 42, 43, 44]

No interference with the Tribunal's factual findings; revision dismissed insofar as it sought reappraisal of facts or remand.

Final Conclusion: The revision petitions are dismissed. The questions of law raised in revision are answered in favour of the assessee: BPAC is classifiable as a medicated ointment under Entry 41 of Schedule II Part (A) for the assessment year 2012-13; the Revenue failed to discharge the burden to reclassify the product; and there is no ground for revisional interference with the Tribunal's fact-based findings. No order as to costs.

Payment for admission - sponsorship receipts - clarificatory amendment - retrospective taxation - charging provision - assessment and collection mechanism - inclusive definition - noscitur a sociis

Payment for admission - sponsorship receipts - inclusive definition - Whether sponsorship receipts constitute payment for admission to entertainment under the unamended Section 2(m) of the Entertainment Tax Act - HELD THAT: - The Court held that although Section 2(m) is an inclusive definition with wide reach, it cannot be read to include every type of payment. Sub clauses (i) and (iv) must be read in their context; the term "other accommodation" is to be understood cognately with "seats" (noscitur a sociis). Sponsorship amounts are paid principally to further commercial/advertising objectives and are not payments made as a condition of attending or continuing to attend an entertainment. Consequently, sponsorship receipts did not fall within the scope of "payment for admission" under the unamended Section 2(m). [Paras 45, 49, 50, 62]

Sponsorship receipts do not constitute "payment for admission" under the unamended Section 2(m).

Clarificatory amendment - retrospective taxation - sponsorship receipts - Whether Explanation 2 inserted in 2012 is a clarificatory amendment and thus validly applicable retrospectively - HELD THAT: - The Court found that Explanation 2 introduced a new element into the definition of "payment for admission" by deeming sponsorship amounts (including goods or services provided in lieu of advertising) to be such payments. Because that element was not implicitly embedded in the unamended provision, the amendment was not merely clarificatory. The retrospective operation of Explanation 2 (back to 01.04.1998) was held to be arbitrary, harsh and unreasonable in the circumstances and violative of Article 14 to the extent it sought to impose obligations for periods when no such levy existed. [Paras 50, 51, 56, 57, 62]

Explanation 2 is not clarificatory; its retrospective operation is arbitrary and invalid.

Charging provision - payment for admission - measure of tax - Whether imposition of tax on sponsorship receipts can stand in the absence of a specific charging provision or amendment to the charging section - HELD THAT: - The Court emphasised that a valid tax requires an identifiable taxable event, person liable, rate and measure. While Section 6 is the charging section for "payments for admission", the Legislature, when bringing new categories (e.g., DTH/cable) into charge, amended the charging machinery accordingly. No corresponding amendment to Section 6 or creation of a separate charging provision was made to effectuate taxation of sponsorship receipts. Explanation 2 at best supplies a measure but cannot substitute for the requisite charging provision; absent such legislative provision the levy on sponsorships fails. [Paras 52, 53, 54, 55, 62]

Levy of Entertainment Tax on sponsorship receipts fails for want of a specific charging provision or corresponding amendment to the charging section.

Assessment and collection mechanism - Form 5 - Form 6 - Whether the Entertainment Tax Act contains a mechanism for assessment and collection of tax on sponsorships - HELD THAT: - The Court analysed Rule 11 and Forms 5 and 6. Form 5 (ticketed events) contains no disclosure mechanism for sponsors, whereas Form 6 (non ticketed/invitation events) seeks sponsor details largely for administrative disclosure and to address mixed situations where organisers hold both ticketed and non ticketed events. The existence of disclosure fields in Form 6 does not demonstrate an established assessment and collection machinery for taxing sponsorship receipts. Given the lack of tailored procedural machinery to assess and collect tax specifically on sponsorships, the attempt to levy such tax is unsustainable. [Paras 61, 62]

The Act does not contain an effective mechanism for assessment and collection of tax on sponsorship receipts; accordingly, taxation on that basis cannot be sustained.

Final Conclusion: The writ petitions are allowed. Explanation 2 (inserted by notification dated 01.10.2012 and made retrospective to 01.04.1998) is not a clarificatory provision and, being arbitrary in its retrospective operation, cannot sustain a tax on sponsorship receipts; moreover, the Entertainment Tax Act lacks the requisite charging amendment and a specific assessment/collection mechanism for sponsorships. There shall be no order as to costs.

Award of interest only on the principal sum adjudged - prohibition on awarding interest upon interest unless expressly provided - distinction between 'sum directed to be paid' (including pre-award interest) and 'principal sum adjudged' - court's power in decree to order interest - arbitrator's power to grant interest

Award of interest only on the principal sum adjudged - prohibition on awarding interest upon interest unless expressly provided - arbitrator's power to grant interest - 15% post-award interest was not payable on the principal amount together with the pre-award 12% interest (i.e., interest on interest was not allowable). - HELD THAT: - The Court held that both the Act and the Code of Civil Procedure permit ordering interest on the principal sum adjudged by an award but do not, in ordinary circumstances, permit interest upon interest unless expressly provided by statute or contract. The Interest Act, 1978 expressly bars awarding interest upon interest in the absence of specific provision. Prior decisions were applied: the Court noted that while arbitrators have power to grant interest, interest upon interest is permissible only where the interest awarded has become part of the compensation (as in limited precedents) or where the statutory or contractual language clearly contemplates aggregation. A distinction was drawn between provisions (such as Section 31(7) of the Arbitration and Conciliation Act, 1996) that refer to the 'sum directed to be paid' (which may include pre-award interest) and provisions that refer to the 'principal sum adjudged' (which do not). Applying these principles to the award and decree in the present case, the Court observed that the arbitrator had separately awarded simple interest for the pre-award period on the 'amount awarded' and simple interest for the post-award period likewise referring to the 'amount awarded', meaning the principal sum alone. There was no indication in the award or contract that the 15% post-award interest was to be computed on the principal plus the pre-award interest; consequently interest-on-interest was not awarded and could not be directed by the courts in execution. [Paras 15, 18, 21, 23, 27]

Petition dismissed; post-award interest at 15% payable only on the principal amount adjudged and not on the pre-award 12% interest.

Final Conclusion: The Special Leave Petition is dismissed; the award and decree confer simple interest for pre-award and post-award periods only on the principal sum adjudged and do not permit computation of post-award interest on the earlier interest component.

Quashing of criminal complaint under Section 138 of the Negotiable Instruments Act - prima facie case - presumption under Section 139 of the Negotiable Instruments Act - rebuttable presumption of existence of debt or liability - powers of High Court under Section 482 CrPC - civil dispute cloaked as criminal - summoning and framing of notice

Quashing of criminal complaint under Section 138 of the Negotiable Instruments Act - prima facie case - presumption under Section 139 of the Negotiable Instruments Act - rebuttable presumption of existence of debt or liability - powers of High Court under Section 482 CrPC - Criminal complaint under Section 138 of the Negotiable Instruments Act is not liable to be quashed - HELD THAT: - The court found that the petitioner admitted issuance of the cheques and the filling in of dates, which gives rise to the statutory presumption under Section 139 of the Negotiable Instruments Act in favour of the complainant. Although the accused may raise defences disputing existence of a legally enforceable debt or asserting that the cheques were security, such contentions relate to the merits and are rebuttable at trial. The documents placed on record by the petitioner, including an Agreement to Sell and a disputed Sale Deed, contain contradictions and are denied by the complainant, necessitating evidence and cross-examination. Pre-trial scuttling of the criminal process would be grave and may afford the accused undue advantage; therefore, in the circumstances and having regard to settled precedents, the High Court will not quash the complaint at this stage and the trial must proceed so that the accused can prove his defence during evidence. [Paras 37, 38, 40, 42, 43]

Petition under Section 482 CrPC seeking quashing of CC 6905/2023 (Section 138 NI Act) is dismissed; the criminal proceedings shall continue.

Civil dispute cloaked as criminal - powers of High Court under Section 482 CrPC - Allegation that dispute is purely civil and proceedings are abuse of process is rejected at interlocutory stage - HELD THAT: - The petitioner contended that the dispute was civil in nature and the criminal complaint was filed to harass. The court observed that mere existence of civil elements or inter se disputes does not warrant quashing when the statutory presumption arises and there are disputed factual questions to be adjudicated. The defence that the matter is civil and should not invoke criminal law must be examined on evidence at trial rather than by pre-trial quashing, particularly where documents and assertions are contested and require proof. [Paras 19, 21, 37, 43]

The contention that the proceedings are a civil dispute cloaked as criminal is not accepted at this stage; no quashing on that ground.

Summoning and framing of notice - prima facie case - Failure to challenge summoning or framing of notice and pendency of cross-examination weigh against quashing - HELD THAT: - The court noted that the petitioner did not challenge the order summoning him or the framing of notice, and that cross-examination of the complainant was pending for production of the original Sale Deed relied upon by the petitioner. Given these procedural facts and the presence of disputed documentary evidence, the court held that it is premature to quash the proceedings and that the trial process should be allowed to run its course so that evidence can be tested. [Paras 14, 15, 42, 43]

Absence of a challenge to summoning/framing and the ongoing evidentiary stage preclude quashing; proceedings to continue.

Final Conclusion: The application for exemption is allowed; the petition under Section 482 CrPC seeking quashing of the criminal complaint under Section 138 NI Act (CC 6905/2023) is dismissed, the Complaint discloses a prima facie case and the criminal proceedings shall continue for trial.

Priority of a mortgagee over a licensee - treatment of an unsecured creditor as a secured creditor - reserve price as a core condition of auction in enforcement proceedings - unenforceability of post mortgage leases/licences inconsistent with mortgagee's rights - operation of Section 65 A of the Transfer of Property Act - operation of Section 52 of the Transfer of Property Act - limits of equitable considerations vis a vis statutory priority of security interests

Treatment of an unsecured creditor as a secured creditor - priority of a mortgagee over a licensee - limits of equitable considerations vis a vis statutory priority of security interests - The DRT and DRAT erred in treating SCB (an unsecured creditor/licensee) as holding a 'charge' with priority over the mortgagee and in permitting recovery to be effected from sale proceeds in preference to the mortgagee. - HELD THAT: - The court found that SCB was an unsecured creditor of the mortgagors and merely a bare licensee under the LLA executed after creation of the mortgage and after institution of the Original Application. The mortgagee (now the Petitioner) has the foremost and highest priority over proceeds of sale of the Secured Asset. Treating SCB as a holder of a charge and giving it priority over the mortgagee was contrary to principles governing priority of security interests and impermissibly allowed an unsecured claim to be satisfied from sale proceeds ahead of the mortgagee. Equity cannot be used to supplant the statutory priority accorded to a mortgagee, and any claim of SCB against the mortgagors must be pursued in separate proceedings (the SCB Recovery Suit) and, if successful, executed against the mortgagors and not by displacing the mortgagee's rights in the secured asset. [Paras 15, 16, 17, 24, 28]

DRT and DRAT orders treating SCB as a secured creditor with priority over the mortgagee are quashed.

Unenforceability of post mortgage leases/licences inconsistent with mortgagee's rights - operation of Section 65 A of the Transfer of Property Act - operation of Section 52 of the Transfer of Property Act - The LLA executed after creation of the mortgage and after institution of enforcement proceedings could not, so as between the licensee and the mortgagee, confer rights that defeat or have priority over the mortgagee's rights; Section 65 A and Section 52 principles preclude such result. - HELD THAT: - The court observed the LLA was a bare licence executed well after the mortgage and after the Original Application. Clause provisions of the LLA confirmed absence of legal possession or exclusive title for SCB. Section 65 A prevents leases of mortgaged property exceeding the statutory limits and Section 52 bars dealing with the property so as to affect rights of other parties to the suit without court authority. Consequently, the LLA could not be allowed to operate so as to rank SCB's claim over the mortgagee, and SCB's remedy lies in pursuing recovery against the Karias rather than by asserting a charge on the Secured Asset or its sale proceeds. [Paras 21, 22, 23, 27, 29]

The LLA does not confer on SCB any enforceable right that can override the mortgagee's priority; the DRT/DRAT erred in treating it as such.

Reserve price as a core condition of auction in enforcement proceedings - auction failure for bid below reserve price - The auction ought to have been declared a failure because the highest bid (Rs.33 lakhs) was substantially below the DRT fixed reserve price (Rs.1.17 crores); the DRT and DRAT erred in approving sale below the reserve price by effectively adding assumed liabilities to the bid. - HELD THAT: - The court emphasised that the reserve price fixed by the DRT was a core term of the auction and that when bids fall short of that reserve the auction is to be treated as failed. The Receiver had rightly reported failure. The only basis on which the tribunals justified approval was by treating the bid as effectively higher when combined with amounts asserted to be payable to SCB; that approach was impermissible because it subordinated the reserve condition and relied on treating an unsecured claim as a charge. Established authority and auction principles require adherence to the reserve price as a determinative benchmark in enforcement auctions. [Paras 12, 30, 31]

The finding of a successful auction and approval of sale at the below reserve bid is set aside; the auction should have been declared a failure.

Priority of a mortgagee over a licensee - treatment of an unsecured creditor as a secured creditor - Remedial directions: the DRT order and DRAT confirmation are quashed and the matter is remitted for a fresh auction treating the mortgagee as the secured creditor; amounts deposited by the Purported Acquirers to be refunded with interest; SCB remains free to pursue its suit against the mortgagors. - HELD THAT: - Given the legal errors identified-mischaracterising SCB's rights and validating a below reserve sale-the court set aside the Impugned Orders, directed the DRT to conduct a fresh auction in accordance with law treating the mortgagee as the secured creditor, asked that the Receiver and DRT complete the auction expeditiously (requested within six months), and ordered refund to the Purported Acquirers of any deposits with interest within four weeks. The court permitted SCB to continue its separate recovery suit against the Karias and made no order as to costs. [Paras 34, 35]

DRT and DRAT orders quashed; matter remitted for fresh auction and consequential directions issued for refund and prosecution of SCB's separate suit.

Final Conclusion: Writ petition allowed: the DRT and DRAT orders approving sale below the reserve price by treating SCB as a secured creditor are quashed; the matter is remitted to the DRT to conduct a fresh auction in accordance with law treating the mortgagee as the secured creditor; SCB may pursue its recovery suit against the mortgagors; deposits paid by the Purported Acquirers to be refunded with interest.

Liability to pay interest under Section 18 of the Real Estate (Regulation and Development) Act, 2016 - effect of registration declaration under Section 4(2)(l)(C) of RERA and Rule 4(2) of Maharashtra Regulations on contractual completion date - promoter's obligation to hand over possession as per agreement for sale - moratorium/relief during COVID 19 pandemic and applicability of RERA circulars - finality and effect of earlier adjudicatory statements regarding waiver of interest

Liability to pay interest under Section 18 of the Real Estate (Regulation and Development) Act, 2016 - effect of registration declaration under Section 4(2)(l)(C) of RERA and Rule 4(2) of Maharashtra Regulations on contractual completion date - finality and effect of earlier adjudicatory statements regarding waiver of interest - promoter's obligation to hand over possession as per agreement for sale - Whether the promoter is liable to pay interest from 1 July 2016 (the date following the contractual extended possession date) notwithstanding the date of completion declared at the time of RERA registration and earlier MahaRERA order of 4 July 2018, and whether interest liability can be frozen after issuance of Occupancy Certificate on 27 April 2022. - HELD THAT: - The Court held that the promoter cannot invoke the date declared at registration under Section 4(2)(l)(C) of RERA or Rule 4(2) of the Maharashtra Regulations to alter obligations arising from the agreement for sale. The Division Bench authority in Neelkamal Realtors and the reasoning reproduced from Ketkar J.'s opinion establish that Section 4(2)(l)(C) permits the promoter to prescribe a fresh timeline for regulatory purposes but does not rewrite or extinguish contractual liabilities; Section 18 liability arises from the agreement's stipulated completion date. The earlier MahaRERA order of 4 July 2018, in which the purchasers expressed willingness to defer insistence on interest subject to completion by 31 December 2019, becomes irrelevant once possession was not handed over by that date; therefore the promoter could not rely on that order to escape interest for the prior period. Separately, the Court examined post Occupancy Certificate correspondence and found the promoter's conduct (not adjusting awarded interest, making additional conditional demands and refusing unconditional handover) demonstrated continuing responsibility for non handing over possession. Consequently the promoter remained liable for interest after issuance of the Occupancy Certificate until actual delivery of possession; the interest liability could not be frozen as of 29 April 2022 given the promoter's unreasonable and obstructive conduct. [Paras 19, 27, 29, 31]

The Tribunal correctly directed payment of interest from 1 July 2016; the promoter remains liable to pay interest until possession is handed over and cannot freeze liability as on 29 April 2022.

Moratorium/relief during COVID 19 pandemic and applicability of RERA circulars - promoter's obligation to hand over possession as per agreement for sale - Whether the promoter is entitled to exclusion of the COVID 19 lockdown period (moratorium) from its interest liability. - HELD THAT: - The Court rejected the promoter's plea for exclusion of the COVID 19 period pursuant to MahaRERA circulars and Order No.21 of 2022. The promoter's primary obligation to deliver possession arose originally on 30 June 2016 and, by its undertaking to the Authority, by 31 December 2019; the subsequent declaration of pandemic lockdowns does not excuse or reduce the promoter's interest liability where the promoter had already defaulted in handing over possession. The Appellate Tribunal's reasoning in para 28, which the Court endorsed, correctly declined to grant pandemic moratorium relief to a promoter who had violated prior completion commitments. [Paras 30]

The request to exclude the COVID 19 period from interest computation was rightly rejected; no moratorium relief was available to the promoter in the circumstances.

Final Conclusion: Second Appeals dismissed; no substantial question of law arises; the promoter must pay interest as directed (from 1 July 2016 until actual delivery of possession) and the promoter's challenge to COVID 19 moratorium exclusion fails; respondents may withdraw amounts deposited in the Appellate Tribunal and the promoter is urged to hand over possession forthwith.