TaxTMI Updates e-Newsletter
Aug 14,2020

Assignment of leasehold rights - supply of services under Schedule II - classification as Other miscellaneous service (SAC 999792 / SAC 999794) - taxable at 18% under Notification No. 11/2017 - CT (Rate) - input tax credit admissibility for GST on transfer fee

Assignment of leasehold rights - supply of services under Schedule II - classification as Other miscellaneous service (SAC 999792) - taxable at 18% under Notification No. 11/2017 - CT (Rate) - Whether consideration received on assignment of the applicant's leasehold rights in the Demised Premises is taxable under the GST Act and, if so, its classification and rate. - HELD THAT: - Paragraphs 4.2 and 4.4 explain that for the purposes of the GST Act benefits arising from land in the forms specified in paragraph 2 of Schedule II (including lease, tenancy, license to occupy and letting out) are treated as supply of services and not as transfer of immovable property. The Deed confers only conditional possession and limited rights of sub-lease; the applicant enjoys no title or ownership which would constitute a sale under Transfer of Property principles. The assignment therefore effects transfer only of the applicant's leasehold rights for the unexpired term and does not create any fresh benefit from the land. Consequently, the activity is a supply of service. The Authority holds that such assignment is in the nature of compensation for agreeing to transfer leasehold rights and is classifiable as an Other miscellaneous service (SAC 999792) and taxable at 18% under Sl. No. 35 of Notification No. 11/2017 - CT (Rate). [Paras 4]

Consideration for assignment of leasehold rights is a taxable supply of service, classifiable under SAC 999792 and taxable at 18% under the Rate Notification.

Transfer fee as consideration for toleration/consent - classification as Other miscellaneous service (SAC 999794) - input tax credit admissibility for GST on transfer fee - Whether the transfer fee charged by the Sub-lessor for permitting assignment is taxable and whether GST paid on such transfer fee is admissible as input tax credit. - HELD THAT: - Paragraph 4.7 finds that the transfer fee charged by the Sub-lessor is consideration for tolerating or consenting to an act (per clause 12.28) which the applicant would otherwise be restrained from doing, and thus constitutes a service provided in the course or furtherance of business. The Authority classifies this service under Other miscellaneous service (SAC 999794) and, being taxable at 18% under Sl. No. 35 of the Rate Notification, the GST paid on the transfer fee is eligible to be claimed as input tax credit, particularly as business includes supply or acquisition of goods or services in connection with closure of business under section 2(17)(d) of the GST Act. [Paras 4]

Transfer fee is a taxable service (SAC 999794) taxed at 18%, and GST paid thereon is admissible as input tax credit.

Final Conclusion: The Authority rules that assignment of the applicant's leasehold rights is a taxable supply of service (SAC 999792) at 18%, and the transfer fee charged by the Sub-lessor is likewise a taxable service (SAC 999794) at 18%; GST paid on the transfer fee is admissible as input tax credit. This Ruling remains valid subject to the provisions of Section 103 unless set aside under Section 104(1) of the GST Act.

Classification of electrically operated three-wheeled motor vehicle under HSN 8703 - essential character of an electrically operated vehicle - battery pack - definition of e-rickshaw under the Motor Vehicles Act - adoption of Customs Tariff headings for GST classification - classification of vehicle chassis fitted with engine under HSN 8706

Classification of electrically operated three-wheeled motor vehicle under HSN 8703 - definition of e-rickshaw under the Motor Vehicles Act - essential character of an electrically operated vehicle - battery pack - Three-wheeled motor vehicles fitted with a battery pack are classifiable as electrically operated vehicles under HSN 8703. - HELD THAT: - The applicant's goods, described as electrically operated three-wheeled vehicles (e-rickshaws), fall within the definition in section 2A(2) of the Motor Vehicles Act as battery-powered three-wheeled special-purpose vehicles of power not exceeding 4000 watts. The Rate Notification's Explanation to Entry No. 242A defines 'electrically operated vehicle' to mean vehicles running solely on electrical energy from an external source or from one or more batteries fitted to such vehicles. A combined reading establishes that the battery pack is the essential character of an e-rickshaw; without the battery the vehicle ceases to be an electrically operated vehicle. Motor vehicles for carrying less than ten passengers are classified under Heading 8703 of the Tariff Act, and electrically operated three-wheeled vehicles are therefore classifiable under the residual sub-heading 8703 90 10. Applying the adopted Tariff headings for GST classification, a three-wheeled vehicle supplied with the battery pack is classifiable under HSN 8703 as an electrically operated vehicle. [Paras 4]

A three-wheeled motor vehicle fitted with the battery pack is classifiable under HSN 8703 as an electrically operated vehicle.

Classification of vehicle chassis fitted with engine under HSN 8706 - essential character of an electrically operated vehicle - battery pack - adoption of Customs Tariff headings for GST classification - A three-wheeled motor vehicle supplied without the battery pack is not an electrically operated vehicle and is classifiable under HSN 8706 as a chassis fitted with an engine. - HELD THAT: - A three-wheeled motor vehicle without the battery pack lacks the essential characteristic of an 'electrically operated vehicle' and is not a vehicle fitted with an internal combustion engine. Unless equipped with another energy source, it cannot be classified under sub-heading 8703. The body/chassis fitted with the motor that converts electrical energy into mechanical energy (to be operative once a battery pack is attached) constitutes the chassis fitted with an engine and falls within Tariff-head 8706 00 31. Consequently, when supplied without the battery pack, the article is classifiable under HSN 8706 rather than HSN 8703. [Paras 4]

A three-wheeled motor vehicle supplied without the battery pack is classifiable under HSN 8706 as the chassis fitted with an engine.

Final Conclusion: The Authority ruled that a three-wheeled vehicle (e-rickshaw) fitted with the battery pack is classifiable under HSN 8703 as an electrically operated vehicle; if supplied without the battery pack it is not an electrically operated vehicle and is classifiable under HSN 8706 as a chassis fitted with an engine.

Composite supply of works contract involving earthwork exceeding 75% of the contract value - works contract within the meaning of section 2(119) of the GST Act - recipient being Central Government, State Government, Union Territory, government authority or government entity - taxability at 5% under Entry No. 3(vii) of the IGST Notification

Composite supply of works contract involving earthwork exceeding 75% of the contract value - recipient being Central Government, State Government, Union Territory, government authority or government entity - taxability at 5% under Entry No. 3(vii) of the IGST Notification - Applicability of Entry No. 3(vii) of Notification No. 8/2017-Integrated Tax (Rate) to the applicant's contract for construction and dredging works at Hokersar Wetland awarded by the Irrigation and Flood Control Department, Govt. of Jammu and Kashmir. - HELD THAT: - The Authority examined the contract documents and scope which expressly describe excavation, dredging and earthwork in various soils by mechanical means, and found the work to be a works contract as defined in section 2(119) of the GST Act. The Executive Engineer's certificate recorded that material involvement was less than 15% of the contract value and that dredging and earthwork constituted the main component of the contract. Given that earthwork exceeds 75% of the contract value and the recipient is a Union Territory authority, the conditions of Entry No. 3(vii) of the IGST Notification are satisfied. On these facts the supply falls within the Entry and is taxable at the concessional rate specified therein. [Paras 4]

The supply is taxable under Entry No. 3(vii) of Notification No. 8/2017 - Integrated Tax (Rate) dated 28/06/2017.

Final Conclusion: The Authority ruled that the applicant's contract for earthwork and dredging awarded by the Irrigation and Flood Control Department, Govt. of Jammu and Kashmir (now a Union Territory authority) qualifies as a works contract where earthwork exceeds 75% of the value and is taxable under Entry No. 3(vii) of Notification No. 8/2017 at the concessional rate specified therein.

Taxability under Sl No. 3(vii) of Notification No. 8/2017 - Integrated Tax (Rate) - composite supply of works contract - works contract involving earthwork exceeding 75% of the contract value - definition of Governmental Authority in para 5(ix) of the IGST Notification - recipient being a Governmental Authority

Composite supply of works contract - works contract involving earthwork exceeding 75% of the contract value - taxability under Sl No. 3(vii) of Notification No. 8/2017 - Integrated Tax (Rate) - Applicant's supply qualifies as a works contract in which earthwork exceeds 75% of the contract value and thereby meets the material-content condition of entry 3(vii). - HELD THAT: - The allotment order and scope of work describe excavation and re excavation of the lakebed by mechanical means, with Annexure A emphasising earthwork. The Superintending Engineer certified that involvement of materials is less than 1% of the total work order. On these facts the supply is a works contract within the meaning of section 2(119) and the earthwork component exceeds 75% of the contract value, satisfying the first two conditions of entry 3(vii) of the Notification. [Paras 4]

The contract satisfies the earthwork (>75%) threshold and is a composite works contract for the purposes of entry 3(vii).

Definition of Governmental Authority in para 5(ix) of the IGST Notification - recipient being a Governmental Authority - The Wular Conservation and Management Authority is a "Governmental Authority" within the meaning of para 5(ix) of the IGST Notification. - HELD THAT: - Notification No. 311 dated 25/09/2012 constitutes the recipient as an authority under the Jammu and Kashmir Development Act, 1970 for preservation and conservation of Wular Lake. The Board constituted by Notification No. 314 ensures 100% control by the State Government (now Union Territory). The powers and functions recorded in the Government Order correspond to functions akin to those entrusted to a municipality under Article 243W. These facts satisfy the definition in para 5(ix), viz., an authority set up by statute or established by government with requisite control and functions. [Paras 4]

The recipient is a Governmental Authority as defined in para 5(ix) of the IGST Notification.

Final Conclusion: The supply by the applicant to the Wular Conservation and Management Authority qualifies under entry 3(vii) of Notification No. 8/2017 - Integrated Tax (Rate) and is taxable accordingly under that entry.

Summary order. Application for advance ruling disposed of as withdrawn.

Classification of goods - parts of railway or tramway locomotives or rolling-stock - identifiable as being suitable for use solely or principally - Notes to Section XVII - exclusion of parts - specific tariff entry overriding general entry - applicable rate of GST and change of rate by notification - no refund of unutilised input tax credit

Classification of goods - parts of railway or tramway locomotives or rolling-stock - identifiable as being suitable for use solely or principally - Notes to Section XVII - exclusion of parts - Impugned castings (couplers, knuckle, locks, toggle, yoke etc.) are classifiable under HSN 8607.30 as parts of coupling devices for railway rolling-stock. - HELD THAT: - The Authority examined the material including specifications, photographs, purchaser's affidavit and manufacturing approvals and applied the two conditions for heading 8607. First, the goods are identifiable as suitable solely or principally for use with railway vehicles because they are manufactured to Indian Railways' drawings and are used to couple railway bogies/wagons; the photographs and the buyer's affidavit support this. Second, the goods are not excluded by the Notes to Section XVII: they are not among articles listed in Note 2, and Note 3's rule to classify a part under the heading corresponding to its principal use supports classification under 8607 where principal use is for railway rolling-stock. On these determinative facts and legal tests the Authority concluded the parts meet both conditions and are therefore classifiable under heading 8607.30. [Paras 8]

Impugned goods are classifiable under HSN 8607.30.

Applicable rate of GST and change of rate by notification - specific tariff entry overriding general entry - no refund of unutilised input tax credit - The applicable GST rate on the impugned goods is 5% until 29.09.2019 and 12% with effect from 30.09.2019; no refund of unutilised input tax credit is allowable as per the relevant notification. - HELD THAT: - Having held the goods to fall under heading 8607, the Authority examined the notifications prescribing rates. Entry No.241 of Schedule I to Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 provided a 5% rate for such parts; that entry remained effective until it was removed and reinserted as entry No.205G of Schedule II by Notification No.14/2019 dated 30.09.2019, which prescribes 12%. The impugned goods are not covered under any other notification entry. The Authority also noted the provision barring refund of unutilised input tax credit where input tax rate exceeds output rate, as set out in the relevant notification, and applied it accordingly. [Paras 8, 9]

GST at 5% up to 29.09.2019 and at 12% from 30.09.2019; no refund of unutilised input tax credit permitted as specified.

Final Conclusion: The Authority ruled that the specified coupler parts are classifiable under HSN 8607.30; the rate of GST applicable was 5% until 29.09.2019 and 12% with effect from 30.09.2019, and no refund of unutilised input tax credit is allowable under the cited notification.

Regular bail - interim bail made absolute - alleged fraudulent availing of Input Tax Credit - vires of the Punjab Goods and Service Tax Act, 2017 - custodial period vis-a -vis maximum sentence - delay in trial as ground for bail

Regular bail - interim bail made absolute - custodial period vis-a -vis maximum sentence - delay in trial as ground for bail - vires of the Punjab Goods and Service Tax Act, 2017 - Grant of regular bail to the petitioner and making absolute the interim bail previously granted. - HELD THAT: - The Court considered the petition for regular bail in a complaint alleging availing of Input Tax Credit on the basis of invoices without actual sale. The vires of the Punjab Goods and Service Tax Act, 2017 is being challenged in ongoing proceedings, a fact not disputed by the State and noted by the Court. The petitioner had undergone approximately ten months' custody, while the maximum sentence for the offence is five years, and the trial proceedings were not likely to be concluded imminently. Balancing these factors - prolonged custody relative to the maximum sentence, the standstill in trial proceedings, and the pending constitutional challenge to the statute - the Court found that continued detention would serve no useful purpose. Having earlier granted interim bail, the Court concluded that those interim directions should be made absolute and the petitioner released on bail on the same terms and conditions. [Paras 9]

Petition allowed; interim bail dated 20.7.2020 made absolute and regular bail granted on the same terms and conditions.

Final Conclusion: Petition for regular bail allowed and interim bail made absolute in light of custody already undergone, pendency of a vires challenge to the statute, and delay in trial; release directed on the same terms and conditions as the interim order.

Grant of regular bail - offence under the Punjab Goods and Service Tax Act, 2017 - vires challenge to statute - pre-trial custody and proportionality in bail - gravity of alleged tax fraud as bail consideration

Grant of regular bail - pre-trial custody and proportionality in bail - vires challenge to statute - gravity of alleged tax fraud as bail consideration - Application for grant of regular bail in respect of criminal complaint under the Punjab Goods and Service Tax Act, 2017 was allowed and interim bail direction made absolute. - HELD THAT: - The Court accepted the petitions for regular bail after considering that the petitioners had already undergone custody for more than nine months, the maximum sentence for the offence is five years, and the trial proceedings were not likely to conclude immediately. The Court also noted that the vires of the Punjab Goods and Service Tax Act, 2017 had been challenged in separate proceedings and that this position was not disputed by the State. Although the State relied on the large amount involved in the alleged Input Tax Credit fraud, the Court concluded that continued detention would not serve a useful purpose given the custodial period already undergone, the statutory maximum sentence, and the stalled nature of the trial. For these reasons the interim bail granted earlier was made absolute on the same terms and conditions. [Paras 4, 7, 9]

Interim bail orders dated 10.7.2020, 18.5.2020 and 6.7.2020 made absolute and petitions allowed, on the terms directed earlier.

Final Conclusion: The petitions for regular bail were allowed and the interim bail directions were made absolute, the Court relying on the lengthy pre-trial custody, the maximum sentence of five years, the challenged vires of the GST statute and the stalled state of trial despite the gravity of the alleged tax fraud.

Transition of Cenvat credit to GST - revision of TRANS I form - portal failure / electronic filing impediment - manual filing in lieu of electronic filing - verification of genuineness of claims - no denial solely for non filing before cut off date

Transition of Cenvat credit to GST - revision of TRANS I form - Allow petitioner to revise TRANS I form for migration of erstwhile Cenvat credit to GST despite having missed the original cut off. - HELD THAT: - The Court recorded that the controversy regarding grant of Cenvat credit on migration to GST has been settled by earlier decisions of this Court and, applying that dictum, directed that the petitioner be permitted to revise its TRANS I form. The petitioner was to be given an opportunity to seek transition relief notwithstanding earlier non compliance with the cut off where the petitioner attempted to login and claim transition but faced difficulties. [Paras 1, 3]

Petitioner permitted to revise TRANS I form and seek transition of Cenvat credit.

Portal failure / electronic filing impediment - manual filing in lieu of electronic filing - Where electronic filing was impeded, the competent authority must allow manual filing as an alternative and enable revision either electronically or manually within a specified time. - HELD THAT: - The Court accepted the petitioner's contention that attempts were made but problems existed with the web portal. In consequence, the respondents were directed to immediately permit the petitioner to revise TRANS I either electronically or manually without undue delay, preferably within two months from receipt of the judgment, with manual filing to be insisted upon only where electronic filing is not possible. [Paras 2, 3]

Respondents to permit revision of TRANS I electronically or, where impossible, by manual filing within a prescribed period.

Verification of genuineness of claims - no denial solely for non filing before cut off date - Respondents may verify genuineness of claims but shall not deny claims solely on the ground of non filing before the cut off date. - HELD THAT: - While the authority is granted liberty to verify the authenticity of the petitioner's claims, the Court explicitly prohibited denial of the claim merely because it was not filed before the respondents' cut off date. The direction preserves the respondents' power of verification but removes procedural bar of earlier non filing as the sole basis for rejection. [Paras 3]

Claims may be verified but cannot be rejected solely for non filing before the cut off date.

Final Conclusion: Writ petition disposed by directing the competent authority to permit immediate revision of TRANS I (electronically or manually) within a reasonable time, allowing verification of claims but precluding denial solely for failure to file before the prescribed cut off.

Transition of input tax credit - carry forward of unutilised credit in FORM GST TRAN-1 - technical glitches on the GST portal and evidentiary requirement - extension of time under Rule 117(1A) - distinction between transition and utilisation of credit

Carry forward of unutilised credit in FORM GST TRAN-1 - technical glitches on the GST portal and evidentiary requirement - extension of time under Rule 117(1A) - Petitioner entitled to be permitted to upload FORM GST TRAN-1 notwithstanding the original deadline, due to technical difficulties on the portal and subsequent extensions under Rule 117(1A). - HELD THAT: - The Court found that the petitioner, though registered under earlier indirect tax regimes, was prevented from uploading FORM TRAN-1 within the original date because of admitted and widespread technical defects in the Department's portal. The Central Board issued a Circular recognising an IT Grievance Redressal Mechanism and Rule 117 was later amended by insertion of sub-rule (1A) permitting extensions where submission was impeded by technical difficulties and where the Council so recommended. The Court noted that the Circular's imposition of an onus on assessees to establish 'demonstrable glitches' post-dated the original deadline and that assessees could not reasonably have anticipated the need to collect contemporaneous technical evidence such as screenshots. Drawing on precedents cited in the order, the Court held that, in the circumstances, the respondents must permit the petitioner to access the portal and upload the requisite TRAN declaration form, leaving verification and utilisation of any credited amount to the routine assessment process. The Court emphasised the distinction between mere transition of credit (which does not itself create a right to utilise) and subsequent utilisation which remains subject to officer verification. [Paras 4, 5, 6, 7, 8]

Writ petition allowed; respondents directed to enable the petitioner to upload FORM GST TRAN-1 forthwith so that transition can be recorded, with verification and utilisation of credit to follow in due course.

Final Conclusion: The writ petition was allowed: having found that portal technical glitches and subsequent Rule 117(1A) extensions justified permitting late upload of FORM GST TRAN-1, the Court directed respondents to enable immediate uploading of the declaration, reserving all verification of utilisation to the normal assessment process.

Additional court fee - appeals under Section 108 of the GST enactment - Section 76 of the Kerala Court Fees and Suit Valuation Act - reasonable classification / intelligible differentia - Article 14 of the Constitution - compensatory levy versus tax

Appeals under Section 108 of the GST enactment - additional court fee - Levy of additional court fee prescribed by the State notification (Ext.P2) is exigible in appeals filed under Section 108 of the GST enactment. - HELD THAT: - The Court examined the statutory scheme for filing appeals under Section 108 and the State notification extending the operation of Section 76 of the Court Fees Act to appeals under special or local laws. Although FORM GST APL-01 and the related rule provisions do not expressly provide for remittance of an additional court fee, that omission does not render the notification inapplicable or the authorities' demand arbitrary. The notification brought appeals under the GST enactment within the ambit of Section 76 as mis enjoined by the State, and the levy of the additional fee is therefore exigible in appeals arising under the GST laws. The Court found the objection to non-entertainment of appeals for want of payment of the additional fee to be unfounded and arbitrary in the circumstances addressed by the petition. [Paras 1, 2]

The demand for additional court fee in appeals under Section 108 of the GST enactment is not unsustainable for the reason that the appeal provisions do not expressly provide for payment of the additional fee.

Section 76 of the Kerala Court Fees and Suit Valuation Act - reasonable classification / intelligible differentia - Article 14 of the Constitution - compensatory levy versus tax - Validity of the State notification (Ext.P2) imposing an additional court fee at the rate of 1% was upheld and held not to be violative of Article 14 or to partake of the character of an unlawful tax. - HELD THAT: - Applying the established test of classification and intelligible differentia as explained by higher precedents, the Court evaluated whether the notification amounted to impermissible discrimination or an unconstitutional levy. The Court observed that differentiation in fiscal enactments is not ipso facto discriminatory and must be tested for unfavourable bias and reasonable basis. On the materials and submissions, the notification could not be characterised as lacking intelligible differentia or as a confiscatory tax; the rate and scheme did not demonstrate unconstitutional discrimination and fell within the State's competence to prescribe fees under Section 76. Consequently, the challenge under Article 14 and the contention that the levy was essentially a tax were rejected. [Paras 2, 3, 4]

The notification imposing the additional court fee is constitutionally valid and not violative of Article 14; it does not assume the character of an unlawful tax.

Final Conclusion: Writ petition dismissed; the State notification levying a 1% additional court fee under Section 76 as applied to appeals under the GST enactment is sustained and the challenge under Article 14 and related contentions are rejected.

Detention and seizure of goods under the Central Goods and Service Tax framework - interim release of seized consignment on deposit and bank guarantee - statutory appeal under Section 107 of the Central Goods and Service Tax Act, 2017 - condonation of delay in filing statutory appeal - no expression on merits where interim relief granted

Interim release of seized consignment on deposit and bank guarantee - detention and seizure of goods under the Central Goods and Service Tax framework - Release of the seized consignment subject to compliance with the conditions ordered by the Court. - HELD THAT: - The Court recorded that the petitioner offered to comply with an interim arrangement and, accordingly, directed release of the consignment only upon the petitioner depositing fifty percent of the penalty and furnishing a bank guarantee securing the balance. The record showed that the petitioner complied with the direction by depositing fifty percent of the penalty and providing a bank guarantee for the balance, and the seized goods were released. The order left the vehicle itself to remain seized in the custody of the respondents. [Paras 7, 8, 9]

The writ petition's prayer for release stood satisfied as the consignment was released on the petitioner depositing 50% of the penalty and furnishing a bank guarantee for the balance; the vehicle remains seized.

Statutory appeal under Section 107 of the Central Goods and Service Tax Act, 2017 - condonation of delay in filing statutory appeal - no expression on merits where interim relief granted - Appropriate forum and procedure for challenging the legality of the penalty and condonation of delay for filing the statutory appeal. - HELD THAT: - The Court held that the question as to legality of the penalty cannot be adjudicated in the writ jurisdiction as a substitute for the statutory remedy and must be agitated by the petitioner by way of the statutory appeal provided under Section 107 of the Central Goods and Service Tax Act, 2017. The Court granted liberty to the petitioner to invoke that remedy and expressly directed that if the statutory appeal is filed within four weeks, it shall not be rejected as time-barred but shall be considered on merits. The Court emphasised that nothing in its order is an expression of opinion on the merits of the penalty. [Paras 10, 11, 12, 13]

Writ petition disposed of with liberty to file the statutory appeal; if filed within four weeks it will not be rejected on limitation grounds and will be considered on merits; no opinion expressed on substantive merits.

Final Conclusion: The writ petition is disposed of as the consignment has been released on compliance with the interim conditions; the petitioner is granted liberty to challenge the penalty by way of the statutory appeal under Section 107, with any appeal filed within four weeks to be entertained notwithstanding limitation; no opinion was expressed on the merits.

Detention and seizure of goods in transit - confiscation under Section 130 of the GST Act - release of detained goods on payment under Section 129 - opportunity of hearing before determination under Section 129 - requirement of recorded reasons for invoking confiscation at the threshold - judicial scrutiny of materials supporting formation of belief for confiscation

Release of detained goods on payment under Section 129 - detention and seizure of goods in transit - The vehicle and goods were to be released on payment of the tax amount as directed by the Court and the writ applicant availed that interim relief. - HELD THAT: - A Coordinate Bench had directed release of the vehicle and goods on payment of the tax in terms of the impugned notice. Pursuant thereto the writ applicant obtained release of the vehicle and goods by payment of the tax. The proceedings on the show cause notice under Section 130 remain pending and are to proceed in accordance with law. The Court recorded that the interim direction for release had been complied with by the petitioner and that the substantive proceedings would continue. [Paras 4, 5]

Vehicle and goods released on payment of tax in terms of the interim order; proceedings on the show cause notice to proceed.

Confiscation under Section 130 of the GST Act - requirement of recorded reasons for invoking confiscation at the threshold - judicial scrutiny of materials supporting formation of belief for confiscation - The petitioner may rely on the Court's observations in Synergy Fertichem regarding the limited circumstances in which Section 130 may be invoked at the threshold and the need for material and recorded reasons when issuing a confiscation notice. - HELD THAT: - The Court drew attention to its recent decision in Synergy Fertichem Pvt. Ltd., particularly paragraphs 99-104, which explain that not every contravention warrants immediate invocation of Section 130; confiscation is an aggravated, penal consequence requiring a strong case and, if challenged, the authority must disclose the materials on which its belief was formed. The writ applicant was permitted to rely on those observations while contesting the show cause notice issued in FORM GST MOV-10. The Court did not finally adjudicate the merits of the show cause notice but left the substantive challenge open for adjudication in accordance with law. [Paras 6, 7]

Petitioner entitled to invoke and rely upon the Synergy Fertichem observations when contesting the confiscation notice; substantive adjudication of the show cause notice left open.

Opportunity of hearing before determination under Section 129 - confiscation under Section 130 of the GST Act - The writ application is disposed of while permitting the departmental proceedings under Section 130 to continue; Rule made absolute to the limited extent recorded in the order. - HELD THAT: - The Court expressed that it is open to the petitioner to make good his case before the authority and challenge the show cause notice. The writ petition was disposed without quashing the ongoing proceedings; the Rule was made absolute only to the extent indicated (i.e., the interim relief already afforded and the directions recorded), and the department may proceed in accordance with law. [Paras 7, 8]

Writ application disposed; Rule made absolute to the extent recorded; departmental proceedings under Section 130 to continue in accordance with law.

Final Conclusion: The Court disposed the writ petition, recorded that the vehicle and goods had been released on payment of tax pursuant to its interim direction, permitted the petitioner to rely upon this Court's Synergy Fertichem observations when contesting the confiscation notice, and left the substantive show cause proceedings under Section 130 to be adjudicated in accordance with law; the Rule is made absolute to the limited extent indicated.

Writ of certiorari - provisional attachment of bank accounts and property under the PGST/CGST Act - defreezing of bank accounts subject to maintaining pre-attachment balances - maintenance of balances pending adjudication - Order 1 Rule 10 impleading

Order 1 Rule 10 impleading - Application to implead HDFC Bank Ltd. as respondent No.4. - HELD THAT: - The application under Order 1 Rule 10 for impleading HDFC Bank Ltd. was considered on the reasons recorded in the application. The Court allowed the application and ordered that the amended Memo of Parties be taken on record.

HDFC Bank Ltd. was permitted to be impleaded as respondent No.4 and the amended Memo of Parties was accepted.

Writ of certiorari - provisional attachment of bank accounts and property under the PGST/CGST Act - defreezing of bank accounts subject to maintaining pre-attachment balances - maintenance of balances pending adjudication - Whether the petitioner's bank accounts frozen by provisional attachment should be defreezed and on what conditions. - HELD THAT: - The petitioner challenged orders confirming provisional attachment of bank accounts and property under the PGST/CGST Act. The Court noted that the petitioner held multiple accounts and that the petitioner undertook to maintain in each account the balance that was present on the date of provisional attachment; it was also recorded that the petitioner had overdrawn the CC account beyond its limit. The State did not oppose the practicality of the petitioner's request. In light of these facts and the petitioner's undertaking, the Court directed that all the petitioner's accounts be defreezed, subject to the requirement that the petitioner maintain the amounts which were present in those accounts on the date of provisional attachment.

All the petitioner's bank accounts were ordered to be defreezed on the condition that the petitioner maintain in each account the balance that existed on the date of provisional attachment.

Final Conclusion: The application to implead HDFC Bank Ltd. was allowed and the amended Memo of Parties taken on record; additionally, the writ petition was disposed of by directing that all the petitioner's bank accounts be defreezed provided the petitioner maintains the balances that existed on the date of provisional attachment, and any pending applications were disposed of accordingly.

Regular bail under Section 439 Cr.P.C. - offence under the Central Goods and Services Tax Act, 2017 involving fraudulent input tax credit - custodial period vis-a -vis maximum sentence - presentation of challan as a factor in bail - absence of quantifiable revenue loss as relevant to bail

Regular bail under Section 439 Cr.P.C. - custodial period vis-a -vis maximum sentence - presentation of challan as a factor in bail - absence of quantifiable revenue loss as relevant to bail - offence under the Central Goods and Services Tax Act, 2017 involving fraudulent input tax credit - Grant of regular bail to the petitioner in a complaint under the Central Goods and Services Tax Act, 2017 for alleged fraudulent availing of Input Tax Credit. - HELD THAT: - The Court considered that the complaint under the Central Goods and Services Tax Act, 2017 alleged issuance/movement of invoices to claim fraudulent Input Tax Credit. The court noted material facts bearing on bail: the petitioner had been in custody for sixteen months; the maximum sentence for the alleged offence is five years; the challan has been presented; and the prosecution case included findings that the petitioner's entities had, by book entries, shown input tax credit and also paid output tax such that no loss of revenue was pointedly established in the manner contended by the petitioner. The Court observed these circumstances without adjudicating the merits of the allegations and, balancing the custodial period, the statutory maximum sentence, the presentation of challan and the revenue-related facts, concluded that continuation of custody was not justified. The Court accordingly exercised its discretion under Section 439 Cr.P.C. to grant regular bail while leaving substantive issues for trial.

Petitioner granted regular bail to the satisfaction of the Chief Judicial Magistrate/Duty Magistrate, Gurugram, subject to usual conditions; merits not decided.

Final Conclusion: The petition is allowed and regular bail is granted to the petitioner in the complaint registered under the Central Goods and Services Tax Act, 2017, subject to bail conditions to the satisfaction of the Chief Judicial Magistrate/Duty Magistrate, Gurugram; the Court has not decided the merits of the allegations.

Allowable deduction u/s 43B - actual payment - statutory liability - MODVAT/CENVAT credit - treatment of excise duty in valuation of closing stock - rejection of books of account and best judgment assessment - remand to the Assessing Officer for verification - revenue expenditure (software write-off) versus capitalisation

HC [2017 (12) TMI 590 - DELHI HIGH COURT] held PLA balance deposit in PLA allowed under Section 43B for AY 1999-00; unutilized MODVAT credit and sales-tax recoverable generally disallowed for AY 1999-00 except to the extent amounts relate to goods consumed before 31-3-1999 or duties actually paid (subject to AO verification); ITAT erred in remanding and rejecting books on raw-material consumption-those questions decided for the Assessee; software expenditure write-off allowed as revenue expenditure

HELD THAT:- This application has been filed merely on apprehension, we see no reason to entertain this application. The miscellaneous application is accordingly dismissed.

Revision u/s 263 - PCIT requiring AO to revisit the assessment made earlier of the Assessee u/s 147/143 (3) - addition u/s 68 - ITAT setting aside the order passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 - as per HC [2019 (8) TMI 21 - DELHI HIGH COURT] interpretation placed by the ITAT on Section 68 of the Act, its reasoning and conclusions in the impugned order are consistent with the legal position and cannot be said to be suffering from any legal infirmity - HELD THAT:- SLP dismissed.

Interim release of seized cash under Section 451 of the Code of Criminal Procedure - Rights of Income Tax authorities over cash deposited in a criminal court - Power to requisition unexplained assets under Section 132A of the Income Tax Act, 1961 - Remedy by application under Section 226(4) of the Income Tax Act for payment of money lying in court - Prohibition on magistratal apportionment of seized cash where tax liability is to be determined by assessment proceedings

Interim release of seized cash under Section 451 of the Code of Criminal Procedure - Prohibition on magistratal apportionment of seized cash where tax liability is to be determined by assessment proceedings - The learned Magistrate's order permitting release of 60% of the cash on security and retaining 40% was legally incorrect and required modification. - HELD THAT: - The Magistrate allowed the first respondent interim release of a major portion of the cash on the assumption that the tax liability would not exceed the portion retained by court. The High Court held that the quantification and determination of tax, interest and penalty are matters for the authorities under the Income Tax Act after completion of assessment, and the Magistrate cannot undertake such an inquiry or apportion the seized cash between claimants on the basis of assumed liability. Therefore permitting release of 60% to the first respondent on furnishing bank guarantee or security was factually and legally wrong and required modification. [Paras 6, 7, 14]

The part of the impugned order permitting release of 60% of the cash to the first respondent was set aside and modified.

Rights of Income Tax authorities over cash deposited in a criminal court - Power to requisition unexplained assets under Section 132A of the Income Tax Act, 1961 - Remedy by application under Section 226(4) of the Income Tax Act for payment of money lying in court - Income Tax authorities cannot directly command a criminal court to hand over cash deposited by the police; their remedy is to apply to the court under Section 226(4) after completion of assessment proceedings. - HELD THAT: - The Court reviewed precedent and statutory scheme and held that the expressions 'officer or authority' in Section 132A do not extend to a criminal court holding cash seized under the Cr.P.C. Consequently, the Income Tax Department is not entitled to issue a directive to the court for release of seized cash. The appropriate course, once the assessment proceedings are final, is for the Income Tax officer to apply to the court under Section 226(4) for payment of the money towards the tax and other amounts due. This preserves the court's custody while enabling recovery by the department through the statutory process. [Paras 10, 11, 15]

Income Tax authorities must proceed by an application under Section 226(4) to obtain payment from money deposited in court; they cannot directly seize or commandeer the court deposit.

Retention of court deposit pending finality of assessment proceedings - Right to recover amounts following finality or setting aside of assessment - The entire amount deposited in court was to be retained intact by the Magistrate until the assessment proceedings against the first respondent attain finality. - HELD THAT: - Having found that the Magistrate could not apportion and release portions of the deposit in anticipation of tax liability, the High Court directed that the whole sum remain in court custody. The right of the first respondent to recovery of any portion would arise only if the assessment order is set aside in appeal or other appropriate proceedings; otherwise the Income Tax Department may apply to the court for release of the portion necessary to satisfy the assessed liability. [Paras 15]

JFCM-II, Mananthavady was directed to retain the entire cash deposit intact and await finality of the assessment proceedings; the Department may apply for release pursuant to Section 226(4) when entitled.

Final Conclusion: The High Court set aside the portion of the Magistrate's order permitting release of a major part of the seized cash, held that the Income Tax Department cannot directly claim money deposited in a criminal court but must apply under Section 226(4) after assessment finality, and directed that the entire cash deposit remain in court custody until assessment proceedings are finally determined.

Non-speaking order - non-application of mind - reasoning requirement for administrative orders - Section 119(2)(b) - condonation for genuine hardship - power to admit delayed refund claim and subsequent consideration on merits

Non-speaking order - non-application of mind - reasoning requirement for administrative orders - Validity of the first respondent's order dated 17.04.2012 which dismissed the appeal without reasons - HELD THAT: - The order of the first respondent is a brief non-speaking order which merely states that the Board has declined to interfere. The Court held that where an appellate authority dismisses an application under Section 119(2)(b) of the Act, it must state reasons because the absence of reasons indicates non-application of mind. The Court treated the omission to give reasons as a vice rendering the order indefensible and unsustainable, particularly since the order is amenable to further challenge before a higher forum. Consequently, the impugned order was quashed for failure to state reasons and to apply its mind to the petitioner's case. [Paras 10]

Order dated 17.04.2012 set aside for being non-speaking and showing non-application of mind.

Section 119(2)(b) - condonation for genuine hardship - power to admit delayed refund claim and subsequent consideration on merits - need for consideration on merits by Assessing Officer - Whether the delay in filing the return for assessment year 2006-07 should be condoned and the refund claim processed in accordance with law - HELD THAT: - The Court examined the materials and the reasons given to the second respondent, noting the petitioner's explanation (inadvertent omission to collect TDS certificates and personal circumstances) and that the second respondent had rejected the condonation application after taking a strict view. While acknowledging some lapse on the petitioner's part, the Court held that lapse alone is not a decisive factor where the explanation is acceptable and genuine hardship is established. Emphasising that procedures should not defeat legitimate claims by hyper-technicality, the Court exercised supervisory jurisdiction to condone the delay. The Court directed that the return and refund claim be processed on merits and in accordance with law, after affording the petitioner an opportunity of personal hearing, thereby leaving substantive assessment and refund determination to the concerned authority under the statutory scheme. [Paras 11, 14]

Delay in filing the return for assessment year 2006-07 condoned; respondents directed to process the return and refund claim on merits after personal hearing.

Final Conclusion: The Board's appellate order dated 17.04.2012 is quashed for being non speaking; the delay in filing the return for assessment year 2006-07 is condoned and the respondents are directed to process the return and refund claim on merits and in accordance with law after affording personal hearing within four weeks.

Set off of losses across heads of income - set off of unabsorbed depreciation / business loss against income assessed under Section 68 - applicability of amendment to section 115BBE barring set off of losses against income determined under it - effect of administrative guidance in Circular No.11/2019 on interpretation and remand - remand for fresh adjudication in light of binding precedent

Applicability of amendment to section 115BBE barring set off of losses against income determined under it - effect of administrative guidance in Circular No.11/2019 on interpretation - Whether the Tribunal applied a provision (amendment effective 01.04.2017) which was not in force for assessment year 2006-2007 and whether the matter requires reconsideration in the light of the CBDT Circular No.11/2019. - HELD THAT: - The Court noted that the amendment by Finance Act, 2016 to the provision now embodied in section 115BBE (bar on set off of losses against income determined under that provision) took effect from 01.04.2017 and therefore did not apply to assessment year 2006-2007. The Central Board of Direct Taxes by Circular No.11/2019 clarified legislative intent and removal of interpretative ambiguity, recognising entitlement to set off of losses against income determined under the said provision up to AY 2016-17. In view of that circular and the Division Bench decision in 2007 (291) ITR 258, the Court concluded that the question of applicability of the post 2017 amendment to the subject assessment year requires further adjudication by the Tribunal rather than final disposal by this Court. [Paras 10, 11]

Substantial Question of Law No.2 answered affirmatively for the purpose of remand; matter remitted to the Tribunal for fresh consideration in the light of the cited precedent and CBDT Circular No.11/2019.

Set off of unabsorbed depreciation / business loss against income assessed under Section 68 - set off of losses across heads of income - remand for fresh adjudication in light of binding precedent - Whether unabsorbed depreciation or business loss can be set off against sums charged to tax as income under Section 68 for assessment year 2006-2007. - HELD THAT: - The Court referred to the Division Bench precedent in 2007 (291) ITR 258 which explained the principle of set off of losses across heads of income and observed that losses, once determined, are to be set off against income determined under any head unless specifically excluded. Given the CBDT circular and the precedent, the Court held that this legal question is not to be finally answered by this Court but requires reconsideration by the Tribunal in the first instance. Consequently the Court did not decide the substantive question on the merits and directed remand for fresh adjudication by the Tribunal. [Paras 9, 11, 12]

Substantial Question of Law No.1 left undecided and remanded to the Tribunal for fresh adjudication; no determination on the merits by this Court.

Final Conclusion: The Tax Case Appeal is partly allowed; the impugned ITAT order dated 28.07.2017 is set aside and the matter is remanded to the Income Tax Appellate Tribunal for fresh adjudication in accordance with the Division Bench precedent (2007 (291) ITR 258) and Circular No.11/2019 issued by the CBDT. No costs.

Weighted deduction for Research and Development under Section 35(AB)(2) - apportionment of R&D expenditure between eligible (Chapter VI-A / 80IC) and non eligible units - presumption that benefits of centralized R&D are availed by other manufacturing units - concurrent findings of fact by Assessing Officer, CIT(A) and ITAT - existence of substantial question of law in presence of concurrent findings

Weighted deduction for Research and Development under Section 35(AB)(2) - apportionment of R&D expenditure between eligible (Chapter VI-A / 80IC) and non eligible units - presumption that benefits of centralized R&D are availed by other manufacturing units - Validity of apportioning and disallowing part of the claimed R&D deduction on the basis that the benefit of R&D at Hosur accrued to the Himachal Pradesh unit and other units. - HELD THAT: - The Court examined the factual findings of the Assessing Officer, the Commissioner (Appeals) and the ITAT that the assessee operated multiple manufacturing units (Hosur, Pune, Bangalore and Himachal Pradesh) producing similar products and that the Himachal unit did not have its own R&D facility. The authorities found that the benefits of the Hosur R&D were availed across units and therefore the R&D expenditure required apportionment and could not be wholly allowed against the income of the eligible units. The assessee failed to place material before the Assessing Officer to rebut the presumption that the Himachal unit availed the benefit of the Hosur R&D or to show that the Himachal unit had its own R&D. The Court held that the facts and material were examined by the authorities and their concurrent conclusion that apportionment was required could not be interfered with on the record before the Court. [Paras 2, 9, 10, 11]

Apportionment and partial disallowance of the claimed R&D deduction was upheld; the assessee did not establish that the Himachal unit alone did not benefit from the Hosur R&D.

Concurrent findings of fact by Assessing Officer, CIT(A) and ITAT - existence of substantial question of law in presence of concurrent findings - Whether substantial questions of law arise warranting interference with the ITAT's order given concurrent findings of fact. - HELD THAT: - The Court considered the admissions in the record, the asserted lack of separate R&D at Himachal and the Form 3CL material. Having found that the lower authorities had examined the factual matrix and recorded concurrent findings on the availment of R&D benefits and on apportionment, the Court held that no substantial question of law arose for interference. Precedents relied upon by the assessee were considered distinguishable on facts. The Court therefore declined to reopen concurrent factual findings on appeal under Section 260A. [Paras 7, 8, 9, 11]

No substantial question of law exists for interference with the Tribunal's order; the concurrent findings are sustained.

Final Conclusion: The appeal is dismissed; the impugned order of the Income Tax Appellate Tribunal dated 08.12.2017 is confirmed. No costs.

Pass through cost / back-to-back third party charges - Profit Level Indicator (OP/VAE versus OP/TC) - Application of TNMM and cost base under Rule 10B - Comparability and exclusion of non comparable entities - Depreciation on goodwill and other intangible assets - Admissibility and verification of additional evidence before DRP and TPO/AO

Pass through cost / back-to-back third party charges - Application of TNMM and cost base under Rule 10B - Admissibility and verification of additional evidence before DRP and TPO/AO - Treatment of recoveries/third party charges (including inbound freight and back to back third party costs) for exclusion from the assessee's cost base when applying TNMM - HELD THAT: - The Tribunal examined the TPO's refusal to exclude certain third party costs from the assessee's cost base and the DRP's direction to accept exclusion of back to back third party charges subject to verification. Relying on the character of the transactions and Rule 10B(1)(e), the Tribunal accepted that costs incurred by third parties for and on behalf of the associated enterprise are not the assessee's costs and including them in the assessee's total cost base distorts the net margin under TNMM. The Tribunal noted that DRP admitted the assessee's claim of pass through/back to back costs on a sample invoice basis and directed verification by AO/TPO; it found no merit in revenue's challenge to DRP's directions and recorded that no new evidence was placed before DRP. Consequently the Tribunal upheld excluding such pass through costs (subject to the verification mandated by the DRP/AO/TPO).

Revenue's appeal on this issue is dismissed; DRP's direction to exclude back to back third party charges from cost base is sustained subject to verification by AO/TPO.

Profit Level Indicator (OP/VAE versus OP/TC) - Application of TNMM and cost base under Rule 10B - Appropriateness of OP/VAE (Operating Profit / Value Added Expenses) as the Profit Level Indicator instead of OP/TC (Operating Profit / Total Cost) - HELD THAT: - The Tribunal analysed the assessee's business model, contracts with carriers and the nature of inbound/outbound transactions, and concurred with the coordinate bench's earlier decision for the assessee's other year. It found that the assessee acted largely as an agent for carriers, did not assume transport risk or employ assets for third party costs, and therefore its net margin must be computed with reference to costs actually incurred by the assessee (VAE) rather than costs incurred by third parties (TC). The Tribunal held that inclusion of third party freight in the assessee's cost base was impermissible under Rule 10B(1)(e) and that OP/VAE was the appropriate PLI; it directed restoration to AO/TPO for benchmarking using OP/VAE.

Assessee's ground to use OP/VAE as the PLI is allowed and the matter is remitted to AO/TPO to recompute ALP applying OP/VAE.

Comparability and exclusion of non comparable entities - Whether Om Logistics Ltd. is a functionally comparable company to be included in the final comparable set - HELD THAT: - Having regard to the coordinate bench's findings in the assessee's earlier year and to the asset intensive profile and warehousing/vehicle fleet of Om Logistics Ltd., the Tribunal accepted that Om Logistics is functionally different from the assessee (which is not an asset owning entity) and therefore should be excluded from the final comparable set. The Tribunal observed that where facts remain unchanged from an earlier year and a co ordinate bench has held a company non comparable, the same approach applies unless material differences are demonstrated.

AO/TPO is directed to exclude Om Logistics Ltd. from the final list of comparables for benchmarking for the year under consideration.

Depreciation on goodwill and other intangible assets - Allowability of depreciation on goodwill and other intangible assets arising from acquisition - HELD THAT: - The Tribunal followed its earlier co ordinate bench decisions in the assessee's own case for adjacent years, concluding that the assessee is entitled to depreciation on intangible assets (including goodwill and specified intangibles arising on acquisition). The Tribunal found no reason to deviate from the view taken in those earlier decisions and directed that the disallowance of depreciation be deleted and the AO allow depreciation accordingly.

Assessee's appeal on depreciation is allowed and AO is directed to allow depreciation on the intangible assets as per the Tribunal's prior rulings.

Admissibility and verification of additional evidence before DRP and TPO/AO - Validity of DRP's consideration of the assessee's submissions and the TPO/AO's role in verifying sample invoices - HELD THAT: - The Tribunal noted that no new evidence was placed before the DRP and that DRP's acceptance of the assessee's sample based demonstration of pass through costs was made subject to verification by the AO/TPO. The Tribunal held that DRP's procedure and directive for verification did not offend natural justice or the statutory scheme, and found no merit in revenue's contention that TPO was denied opportunity to be heard on additional evidence.

Revenue's ground challenging DRP's treatment on procedural grounds is rejected; DRP's direction for verification by AO/TPO is upheld.

Final Conclusion: The Tribunal dismissed the revenue's appeal and allowed the assessee's appeal: it sustained the exclusion of bona fide pass through/back to back third party costs from the assessee's cost base (subject to AO/TPO verification), held OP/VAE to be the appropriate PLI and remitted benchmarking to AO/TPO accordingly, directed exclusion of Om Logistics Ltd. from comparables, and allowed depreciation on goodwill/intangibles in conformity with co ordinate bench precedent.

Assessment under section 153C - incriminating material - relevance and nexus with seized material - return filed under section 153C treated as return under section 139 - undisclosed income - section 40A(3) disallowance - section 41(1) cessation of liability - jurisdictional fact

Assessment under section 153C - incriminating material - relevance and nexus with seized material - undisclosed income - jurisdictional fact - Validity of the assessment framed under section 153C in absence of alleged incriminating material - HELD THAT: - The Tribunal considered the contention that no incriminating material relating to the assessment year was seized and that therefore the section 153C assessment was without jurisdiction. Relying on the statutory scheme and judicial guidance reproduced from the Delhi High Court, the Tribunal held that completed assessments can be revisited under post search provisions when there is some incriminating material or other material pointing to undisclosed income having nexus with the seized material. On the facts, the Tribunal found the discrepancies between the original return and the return filed pursuant to the section 153C notice (differences in commission and creditors) amounted to undisclosed income noticed by the AO in the assessment proceedings and therefore fell within the permissible scope of interference under section 153C/153A. The Tribunal also noted the assessee's inconsistent stance (accepting CIT(A)'s deletion on one head while challenging jurisdiction on another) and observed that the case law cited for absolute non interference was not applicable on the facts. For these reasons the legal ground seeking quashment of the section 153C assessment was rejected. [Paras 13, 14]

Legal challenge to the jurisdiction/validity of the assessment under section 153C rejected.

Return filed under section 153C treated as return under section 139 - undisclosed income - section 41(1) cessation of liability - Sustenance of additions: (a) commission income added by AO and confirmed by CIT(A); (b) addition of Rs. 4,00,000 as cessation of sundry creditor under section 41(1) - HELD THAT: - On merits the Tribunal upheld the findings of the CIT(A). With respect to the commission income, the assessee failed to furnish books, bank statements or any contemporaneous evidence to substantiate the asserted bona fide mistake or to explain why the figure appearing in the original return was omitted in the return filed pursuant to section 153C; the CIT(A) correctly observed that the assessee could not use the post search proceedings to reduce his income without filing a proper revised return, and accordingly confirmed the addition. As to the reduction in sundry creditors, the CIT(A) examined the material and held that the assessee had earlier booked expenditure giving rise to the liability and subsequently wrote it off in the impugned year; such cessation of liability attracted section 41(1) and the addition was rightly sustained. The Tribunal found the CIT(A)'s reasoning to be sound and declined to interfere. [Paras 15]

Additions in respect of commission income and cessation of sundry creditors upheld.

Final Conclusion: The appellant's challenge to the section 153C assessment was rejected and the additions relating to commission income and the written off sundry creditor were sustained; the appeal is dismissed.

Deduction under section 80IA - infrastructural facility - location within the precincts of the airport - requirement of agreement with a statutory body - allowability of interest under section 36(1)(iii) - interest on hedging/swap transactions - prima facie case for grant of stay - stay of recovery pending disposal of appeal under proviso to section 254(2A)

Deduction under section 80IA - infrastructural facility - location within the precincts of the airport - requirement of agreement with a statutory body - Claim for deduction under section 80IA in respect of the Fuel Farm Facility - HELD THAT: - The Tribunal found that the assessee had a prima facie case on the claim for deduction under section 80IA. The dispute concerned whether the Fuel Farm Facility qualified as an "infrastructural facility" for the purposes of the deduction and whether the requirement of an agreement with the Central/State/local authority or statutory body was met. The Tribunal observed that the issue raised in the present appeal was identical to the issue decided in favour of the assessee in the ITAT Bangalore decision in Menzies Aviation Bobba Pvt. Ltd., where a similar claim was allowed and the revenue's contention regarding location within the main airport terminal was rejected. On that basis the Tribunal was satisfied that the assessee's challenge to the disallowance of the section 80IA claim warranted further adjudication on merits. [Paras 10]

There is a prima facie case in respect of the section 80IA claim; the matter requires disposal on appeal.

Allowability of interest under section 36(1)(iii) - interest on hedging/swap transactions - Disallowance of interest on swap (hedging) transaction debited in AY 2017-18 - HELD THAT: - The Tribunal held that a prima facie case existed for the assessee on the disallowance of interest on the hedging swap. The assessing officer rejected the claim partly on the ground that the asset on which borrowing was made had not been put to use; the assessee contended that the asset had been put to use as early as 24.05.2008 and that interest on the hedging transaction was allowable under section 36(1)(iii). Having regard to the absence of capital expenditure debited to the profit and loss account for AY 2017-18 and the assessee's contention that the asset was already put to use, the Tribunal concluded the issue merited adjudication on merits. [Paras 11]

There is a prima facie case in respect of the disallowance of interest on the hedging swap; the matter requires disposal on appeal.

Prima facie case for grant of stay - stay of recovery pending disposal of appeal under proviso to section 254(2A) - Prayer for stay of recovery of the outstanding demand - HELD THAT: - Having found prima facie merit in the assessee's appeals on both the section 80IA claim and the disallowance of interest on hedging, and taking into account that the assessee had complied with the proviso to section 254(2A) by paying the required initial amount and had demonstrated financial hardship due to the COVID-19 pandemic, the Tribunal exercised its discretion to grant relief. Balancing the payments already made and the potential undue hardship, the Tribunal directed a temporary suspension of recovery for a limited period to preserve the efficacy of the appeal process while protecting the revenue's interest. [Paras 12]

Stay of recovery of the balance outstanding demand granted for six months from the date of the order or until disposal of the appeal, whichever is earlier; stay petition allowed.

Final Conclusion: The stay petition is allowed: the Tribunal found prima facie merit in the assessee's appeals on the section 80IA claim and the disallowance of interest on hedging, and directed a stay of recovery of the balance outstanding demand for six months or until the appeal is disposed of; the appeal was listed for hearing on 01.10.2020.

Penalty under section 271AAB - discretionary levy of penalty under section 271AAB - undisclosed income as defined in explanation to section 271AAB - requirement of specificity in show cause notice and principles of natural justice - valuation at cost versus market value for determination of undisclosed stock - search under section 132 and its relevance to penalty proceedings

Discretionary levy of penalty under section 271AAB - penalty under section 271AAB - Levy of penalty under section 271AAB is not automatic in all cases and is subject to application of mind by the assessing officer. - HELD THAT: - The Tribunal followed earlier coordinate bench decisions holding that although section 271AAB prescribes the quantum of penalty once the statutory conditions are met, the scheme contemplates issuance of show cause notice and an opportunity of hearing (application of sections 274 and 275). Thus the Assessing Officer must satisfy himself on facts and circumstances whether the amount disclosed in the search constitutes "undisclosed income" within the statutory definition before directing payment of penalty; the provision does not render levy mandatory in all cases. The appellate remedy provided in the Act further indicates that levy depends on factual satisfaction and the exercise of discretion is reviewable on appeal.

Penalty under section 271AAB is not mandatorily automatic; the AO must apply mind to facts before levying penalty and the exercise is subject to appellate review.

Requirement of specificity in show cause notice and principles of natural justice - penalty under section 271AAB - A show cause notice under section 271AAB need not enumerate each ancillary clause at the stage of initiation where the primary charge of 'undisclosed income found during search' is made clear; any lack of specification may be cured by a clear finding in the penalty order. - HELD THAT: - The Tribunal endorsed the view that section 271AAB contains a singular primary charge - existence of undisclosed income found during search - with ancillary conditions governing quantum. Where the notice informs the assessee of the primary charge and grants opportunity to rebut, the notice is not vitiated merely because it did not specify which clause (a), (b) or (c) would govern quantification. In any event, an uncertain charge at initiation can be rectified by a clear cut finding in the penalty order itself; failure to state ancillary clause in the notice does not automatically invalidate the proceedings provided the assessee was aware of and able to meet the charge.

The show cause notice which communicated the primary charge of undisclosed income was not invalid for want of specification of ancillary clauses; the penalty order must, however, contain the requisite clear finding.

Undisclosed income as defined in explanation to section 271AAB - valuation at cost versus market value for determination of undisclosed stock - search under section 132 and its relevance to penalty proceedings - Difference in valuation of stock at market value by departmental valuer, without any finding of unrecorded/extra physical stock or determination of cost, does not amount to 'undisclosed income' under explanation to section 271AAB; penalty based solely on such valuation difference is unsustainable. - HELD THAT: - The Tribunal examined the statutory definition of "undisclosed income" and the authorities applying it. For stock, what matters is whether stock was not recorded in the books maintained in the normal course (quantity discrepancy) or whether income is represented by entries/expenses found false. Valuation must focus on the cost/purchase price (including cost of processing), not merely the prevailing market value on date of search. Where departmental valuation applied market rates without showing any excess physical stock or computing unrecorded investment at cost, the Assessing Officer could not treat the valuation difference as undisclosed income. Given that the assessee had disclosed the surrendered amount in return and the AO did not determine excess unrecorded stock or cost based investment, the penalty could not be sustained.

The amount reflected by market valuation differences did not qualify as 'undisclosed income' under section 271AAB; penalty levied on that basis was set aside.

Final Conclusion: The Tribunal allowed the appeal, set aside the penalty under section 271AAB, and held that (i) levy under section 271AAB is not universally mandatory but requires application of mind; (ii) a show cause notice stating the primary charge of undisclosed income is not vitiated by non specification of ancillary clauses if the penalty order contains a clear finding; and (iii) valuation differences based on market value, without any finding of unrecorded physical stock or cost based investment, do not constitute 'undisclosed income' under the explanation to section 271AAB.

Rejection of books of account under Section 145(3) - estimation of income after rejection of books - use of gross profit rate as basis for estimation - reliance on documentary evidence (invoices, bank payments, VAT returns) versus inspector's report - use of past years' gross profit to estimate current year gross profit - remand for computation of addition

Rejection of books of account under Section 145(3) - reliance on documentary evidence (invoices, bank payments, VAT returns) versus inspector's report - use of past years' gross profit to estimate current year gross profit - estimation of income after rejection of books - Whether the addition on account of unverifiable purchases should be sustained and on what basis the income should be estimated after rejection of books of account. - HELD THAT: - The Tribunal found that the Assessing Officer treated purchases amounting to Rs. 5,75,55,703/- as unverifiable and invoked rejection of books under Section 145(3), but did not bring on record any comparable trade standard to justify the high gross profit rate adopted. The assessee had produced invoices, ledger accounts, bank payments, VAT returns and past acceptance of similar purchases; sales for the year were accepted and past years' gross profit rates were on record and not in dispute. The Tribunal held that mere non-response to notices and the Inspector's report-especially when enquiries were conducted after the assessee had closed business-could not, by itself, justify a large speculative addition without considering the documentary evidence and the assessee's past GP history. Relying on the principle that after rejection of books income must be estimated on a reasonable basis, the Tribunal accepted that past years' gross profit results are a proper and reasonable criterion to estimate current year gross profit where past results have attained finality and there is no finding of accommodation entries in those years. Applying these considerations, the Tribunal concluded that the AO's and CIT(A)'s adopted rates were excessive and that a lower, reasonable GP rate should be applied. [Paras 15, 16]

Partly allow the appeal by holding that the addition sustained by the authorities is excessive; the AO's and CIT(A)'s adopted GP rates are not justified in the facts of the case.

Use of gross profit rate as basis for estimation - remand for computation of addition - Appropriate gross profit rate to be adopted for computation of addition and direction to the Assessing Officer for recomputation. - HELD THAT: - Considering the totality of facts, including accepted sales, documentary evidence of purchases and the assessee's past gross profit percentages, the Tribunal determined that a gross profit rate of 4.5% applied to the turnover for the year under consideration would meet the ends of justice. The Tribunal therefore set the GP rate to be applied for estimating the addition and directed the Assessing Officer to recompute the addition accordingly. This constitutes a remand limited to computation in accordance with the Tribunal's specified rate. [Paras 18]

Direct the AO to recompute the addition adopting a gross profit rate of 4.5% on the turnover for the year and give effect to that computation; grounds partly allowed.

Final Conclusion: Appeal partly allowed; Tribunal held that the AO's large addition was not justified on the material on record, applied a gross profit rate of 4.5% for estimating income after rejection of books, and directed the Assessing Officer to recompute the addition accordingly.

Exemption under section 54F - ownership requirement for claiming capital gains exemption - investment in property in name of spouse - conflicting High Court decisions on statutory interpretation - adoption of Supreme Court precedent where High Courts differ

Exemption under section 54F - ownership requirement for claiming capital gains exemption - investment in property in name of spouse - Whether the deduction under section 54F is allowable where the assessee reinvested long term capital gain by purchasing property in the name of his wife - HELD THAT: - The Assessing Officer and the CIT(A) disallowed the claim on the ground that the new residential property was not purchased in the name of the assessee but in the name of his wife, relying on a line of authority that reads the benefit as available only where the assessee himself owns the new asset. The Tribunal noted that there were conflicting High Court decisions on the point. In the absence of guidance from the jurisdictional High Court and faced with divergent non jurisdictional High Court authorities, the Tribunal invoked the principle in the Supreme Court decision in Vegetable Products Ltd. to adopt the view favourable to the assessee. Applying that precedent, the Tribunal held that the assessee's claim should be allowed and directed the Assessing Officer to delete the disallowance.

Assessee's deduction under section 54F allowed; disallowance deleted and appeal allowed.

Final Conclusion: The Tribunal allowed the appeal for Assessment Year 2011-12, holding that, in view of conflicting High Court decisions and by adopting the Supreme Court precedent, the section 54F deduction claimed for investment made in the name of the assessee's wife was to be allowed and the Assessing Officer's disallowance deleted.

Stay of demand - abeyance of demand - extension of limitation during lockdown - interim orders extension - application of High Court extension orders to expired tribunal stay

Stay of demand - extension of limitation during lockdown - interim orders extension - Extension of the Tribunal's earlier stay of demand which had expired during the lockdown period - HELD THAT: - The assessee sought continuation of the Tribunal's earlier order keeping the demand in abeyance for A.Y.2013-14. The Tribunal noted the Hon'ble Bombay High Court's orders extending interim protections and limitations that had expired during the lockdown, most recently by its order dated 15/07/2020 which extended such interim orders and protections till 31/08/2020. Applying that extension to cases where a tribunal stay had expired during the lockdown, the Tribunal concluded it was appropriate to extend the stay of demand in the present case until 31/08/2020. The Tribunal also recorded that the assessee had deposited a portion of the demand prior to filing the stay petition and that an earlier three-month tribunal stay had expired during the lockdown; in view of the High Court's extension, the stay is continued on the same terms until the specified date. [Paras 2, 3, 4]

The stay of demand in respect of A.Y.2013-14 is extended till 31/08/2020 and the stay petition is allowed.

Final Conclusion: The Tribunal allowed the stay petition and extended the earlier abeyance of the demand relating to A.Y.2013-14 until 31/08/2020 in view of the Hon'ble Bombay High Court's extension of interim orders and limitation during the lockdown.

Unexplained cash credit under section 68 of the Income-tax Act - advances received against booking of flats - verification and corroboration - disallowance of interest on loans to related/sister concerns - remand for fresh adjudication and verification by Assessing Officer - obligation to produce bank statements and documentary corroboration - impact of earlier High Court directions on scope of adjudication

Unexplained cash credit under section 68 of the Income-tax Act - advances received against booking of flats - verification and corroboration - obligation to produce bank statements and documentary corroboration - Addition of advances aggregating to Rs. 21,70,34,294/- treated as unexplained cash credit was remitted to the Assessing Officer for fresh verification and adjudication. - HELD THAT: - The Tribunal recorded that material relied upon by the assessee (confirmations and documents relating to all 447 parties) required verification at the hands of the Assessing Officer. Both parties, and the Bench in view of earlier High Court observations, accepted that detailed scrutiny - including cross tallying confirmations with bank statements and other corroborative evidence - must be carried out by the Assessing Officer. The assessee gave an undertaking to cooperate and produce relevant documents. In these circumstances the Tribunal, by consent, remitted the question of whether the advances can be satisfactorily explained under the relevant legal tests to the Assessing Officer for fresh examination after affording the assessee proper opportunity to produce evidence.

Remitted to the Assessing Officer for fresh verification, examination and adjudication with direction to afford opportunity to the assessee and to examine bank statements and other corroborative material.

Disallowance of interest on loans to related/sister concerns - remand for fresh adjudication and verification by Assessing Officer - Deletion of interest disallowance in respect of loans to sister concerns was remitted to the Assessing Officer for fresh scrutiny and adjudication. - HELD THAT: - In light of the High Court's direction to re examine the issue and apply relevant legal ratio, and with the parties agreeing that detailed factual and documentary scrutiny is required, the Tribunal remitted the question of disallowance of interest to the Assessing Officer. The Assessing Officer is to undertake deeper scrutiny, record factual findings and apply the law afresh, with the assessee obliged to cooperate and produce relevant documents.

Remitted to the Assessing Officer for detailed enquiry, factual findings and fresh adjudication after providing the assessee opportunity to present its case.

Final Conclusion: By consent and in compliance with earlier High Court directions, both disputed issues - the treatment of advances as unexplained cash credit and the disallowance of interest on loans to sister concerns - are remitted to the Assessing Officer for fresh verification, examination and adjudication; the Tribunal's order is allowed for statistical purposes.

Custodianship extension pending disposal of representations - consideration and disposal of representations by the appropriate authority - opportunity of hearing before disposal of representation - temporary non-invocation of bank guarantee after rejection pending adjudication

Custodianship extension pending disposal of representations - temporary non-invocation of bank guarantee after rejection pending adjudication - Extension of the petitioner's custodianship and interim protection in relation to the bank guarantee pending disposal of their representations. - HELD THAT: - The court recorded that the petitioner had furnished a bank guarantee equivalent to the demand and had earlier filed representations seeking waiver of the cost recovery charges which remained pending. In view of the pending representations and the bank guarantee having been furnished, the court extended the petitioner's custodianship beyond 30th June, 2020 for a period of three months or until the representations are disposed of by a reasoned order, whichever is earlier. The order also provides that if the representation is rejected, the bank guarantee shall not be invoked until one week after the order of adjudication is communicated to the petitioner. The court imposed these interim protections without determining the substantive merits of the underlying demand, conditioning continued custodianship on non-disposal of the representations.

Custodianship extended for three months or until representations are disposed of; bank guarantee not to be invoked until one week after communication of adjudication if representation is rejected.

Consideration and disposal of representations by the appropriate authority - opportunity of hearing before disposal of representation - Direction to the Assistant Commissioner of Customs to consider and dispose of the petitioner's representations by a reasoned order after hearing. - HELD THAT: - The court directed that the Assistant Commissioner of Customs is the appropriate authority to consider the representations dated 13th June, 2018 and 10th December, 2018. The authority was ordered to give the petitioner and/or their duly authorized representatives an opportunity of hearing and to dispose of the representations in accordance with law by a reasoned order within eight weeks from the date of communication of this order by either party. Further, the order so passed by the Assistant Commissioner must be communicated within two weeks from its date. The court thus remitted the representations to the Assistant Commissioner for fresh consideration and decision on merits, providing a temporal framework for disposal.

Assistant Commissioner of Customs to hear the petitioner and dispose of the specified representations by a reasoned order within eight weeks of communication and to communicate that order within two weeks.

Final Conclusion: Writ petition disposed by extending interim custodianship and directing the Assistant Commissioner of Customs to consider and decide the pending representations after hearing within specified timeframes; bank guarantee protected from invocation for one week following any adverse adjudication communication.

Preventive detention under COFEPOSA - Subjective satisfaction of the detaining authority - Article 22(5) - right to make representation and supply of grounds/documents - Delay in passing detention order / unexplained delay vitiates detention - Retraction of statements as basis for preventive detention - Application of distinct grounds under Section 3(1) of COFEPOSA - Section 5A - severability of multiple grounds of detention - Parity doctrine in preventive detention - Preventive versus punitive detention - Supply of material documents - obligation to furnish relevant material relied upon

Article 22(5) - right to make representation and supply of grounds/documents - Supply of material documents - obligation to furnish relevant material relied upon - Whether the detenu's right to make effective representation and to be supplied with grounds and relevant documents was violated. - HELD THAT: - The Court examined timing and content of service of grounds and the contention that material was not supplied or was illegible. It observed the settled law that only such documents as are material and relied upon by the detaining authority need be supplied; ancillary documents need not be furnished. The record showed that necessary material documents were supplied to the petitioners and that where documents seized from a petitioner existed (eg. pen drives, WeChat messages) those were within the petitioner's knowledge. The Court also took into account that two petitioners had not cooperated with summons and only after directions of the Court appeared for interrogation. On the totality of material the Court found no procedural breach in communication of grounds and no impairment of the right to make representation. [Paras 73, 75, 76]

Detention orders are not vitiated for non supply or illegibility of material; Article 22(5) procedural requirements were satisfied in the facts of these petitions.

Delay in passing detention order / unexplained delay vitiates detention - Whether inordinate or unexplained delay in passing the detention orders invalidated the detentions. - HELD THAT: - The Court accepted that unexplained delay can vitiate preventive detention, and noted precedents relied upon by petitioners. It distinguished earlier decisions (where there were gaps of several years and no proximate link) from the present facts. For Lokesh Sharma the delay between arrest (4.6.2019) and the detention order (2.8.2019) amounted to 59 days but the record showed ongoing investigation, voluminous materials and that advisory board timelines and confirmation fell within statutory periods. Two other petitioners had evaded summons and were arrested later, so the contention of delay was not applicable to them. Considering the investigative exigencies and statutory timelines, the Court found the delay in this case not fatal to the detention orders. [Paras 72, 73, 74]

Delay did not vitiate the detention orders on the facts; the detention confirmations occurred within statutory/advisory board timelines and did not demonstrate unexplained delay sufficient to set aside the orders.

Retraction of statements as basis for preventive detention - Subjective satisfaction of the detaining authority - Whether retracted statements of co detenu rendered the detaining authority's satisfaction unsustainable and the detention orders invalid. - HELD THAT: - Petitioners argued that the order was founded on retracted statements and therefore defective. The Court noted that the detaining authority explicitly considered the retractions and concluded they appeared to be false, frivolous and an afterthought. The authority also relied on independent materials - panchnama, contemporaneous seizure, statements of other witnesses (including an employee whose statement was not retracted), electronic records, diaries and accounting material - to form subjective satisfaction. As judicial review of subjective satisfaction is limited, and the authority had applied its mind to the retractions and other materials, the Court found no ground to overturn that satisfaction. [Paras 63, 74, 77]

Retractions did not render the detention orders invalid; the detaining authority lawfully considered retractions and other corroborative material when forming subjective satisfaction.

Application of distinct grounds under Section 3(1) of COFEPOSA - Section 5A - severability of multiple grounds of detention - Whether the detention orders were vitiated for failing to specify the precise clause of Section 3(1) or for relying on multiple grounds. - HELD THAT: - The Court reviewed Section 3(1) and Section 5A and noted that grounds under subsections are disjunctive and that Section 5A makes multiple grounds severable. The petitioners' objection that the detaining authority did not clearly state which sub clause applied was considered in light of the order and material. The Court held that even where multiple grounds are invoked, invalidity of one ground does not necessarily invalidate the order if remaining ground(s) sustain the detention and the detaining authority applied its mind to them. [Paras 57, 58, 59]

The invocation of multiple grounds and the form of the grounds did not vitiate the orders; severability under Section 5A and the authority's application of mind sustain the detention in this case.

Parity doctrine in preventive detention - Whether petitioners were entitled to release by parity with other co detenu who had their detention orders set aside. - HELD THAT: - The Court considered the petitioners' reliance on orders in respect of other co detenu (including Supreme Court and other High Court decisions). It held that parity applies only where facts and roles are substantially similar. Here the Court found factual distinctions: past seizures and roles attributed to other released persons differed from the roles and immediate seizure linked to these petitioners (eg. carrier, alleged mastermind, associate keeping records). Given the differing factual matrices, the doctrine of parity was not applicable. [Paras 71, 72]

Parity with other releases was not available on these facts; the earlier orders did not establish a right to release for these petitioners.

Preventive versus punitive detention - Whether the impugned orders were punitive in character rather than preventive. - HELD THAT: - Petitioners alleged the detention was punitive. The Court reiterated settled principle that COFEPOSA detention is preventive, justified by a reasonable prognosis of future behaviour based on past acts and surrounding circumstances. It inspected the material relied upon by the detaining authority and concluded the orders were enacted as preventive measures to prevent further smuggling activity, not as punishment. [Paras 53, 56, 79]

Orders are preventive in nature, not punitive, and lawful under COFEPOSA as constituted by the material and the authority's subjective satisfaction.

Final Conclusion: After reviewing the materials, procedural compliance and the detaining authority's reasons, the Court concluded that the detention orders against the three petitioners satisfy statutory and constitutional safeguards; the petitions are dismissed and the detention orders are upheld.

Validity of administrative guidelines for interim bail - Discretion of High Powered Committee under Supreme Court directions - Classification of accused and intelligible differentia - Non-supplanting of statutory bail provisions - Power to grant interim and regular bail under Sections 437/439 of the Cr.P.C. - Article 21 right to life and liberty

Validity of administrative guidelines for interim bail - Discretion of High Powered Committee under Supreme Court directions - Classification of accused and intelligible differentia - Article 21 right to life and liberty - Non-supplanting of statutory bail provisions - Quashing of the minutes of the High Powered Committee dated 28.03.2020 and its reiterated minutes was not warranted. - HELD THAT: - The High Powered Committee was constituted pursuant to the Hon'ble Supreme Court's orders in Suo Moto Writ Petition (C) No.1/2020 to determine categories of prisoners who could be considered for interim bail/parole in view of the COVID-19 pandemic, and was expressly left a discretion to adopt criteria having regard to nature and severity of offences and other relevant factors. The Committee's minutes (including those dated 28.03.2020 and reiterated thereafter) represent an exercise of that discretion after considering prison capacity, nature of offences and objective satisfaction; they do not operate as a bar preventing any under-trial prisoner from invoking the jurisdiction of the concerned courts to seek regular or interim bail under the Code of Criminal Procedure. The Committee clarified that its criteria would not affect the rights of UTPs to move the courts and that each bail application must be considered on its merits. Consequently, the Committee's exclusion of certain categories (including cases investigated by CBI/ED/NIA/Special Cell, cases under PMLA, etc.) cannot be characterised as supplanting or negating the statutory bail regime or as an arbitrary negation of Article 21; rather, it is a class-based administrative criterion adopted within the discretionary mandate conferred by the Supreme Court's directions. The court therefore declined to quash the impugned minutes, while noting that release on bail remains a discretionary judicial remedy to be sought under Sections 437/439 Cr.P.C. and decided on merits by the concerned courts. [Paras 43, 45, 48, 50, 51]

Prayer to quash the High Powered Committee minutes dated 28.03.2020 (and reiterated minutes) is declined; the Committee's criteria stand and do not preclude the petitioner from filing a bail application which must be considered on its merits in accordance with law.

Final Conclusion: The petition seeking quashing of the High Powered Committee's minutes is dismissed; the Committee's classification was an exercise of the discretion entrusted to it by the Supreme Court and does not supplant statutory bail provisions - the petitioner remains free to seek bail under Chapter XXXIII of the Cr.P.C., to be considered on merits.

Interim stay of recovery - substantial question of law - jurisdictional issue - postponement of proceedings during pandemic - listing for fresh hearing after exchange of affidavits

Interim stay of recovery - substantial question of law - jurisdictional issue - Respondent authorities shall not give effect to the demand letter dated 22nd June, 2020 as an interim measure. - HELD THAT: - The Court, having been addressed on a substantial question of law and a jurisdictional issue which require adjudication, and noting that related matters are under consideration in other High Courts and before a larger Bench of the Supreme Court, granted interim relief by restraining the respondent authorities from implementing the impugned demand letter dated 22nd June, 2020. The order of restraint is premised on the need to preserve the parties' positions pending full hearing and in light of difficulties occasioned by the pandemic which may impede effective participation in adjudicatory proceedings.

The respondent authorities are restrained from giving effect to the impugned letter dated 22nd June, 2020.

Postponement of proceedings during pandemic - listing for fresh hearing after exchange of affidavits - Hearing of the writ petition is deferred and the matter is to be listed in the first available working day of September, 2020 after exchange of affidavits. - HELD THAT: - Noting that affidavits have been exchanged between the parties and considering prevailing pandemic-related difficulties, the Court directed that the hearing be deferred until normal functioning is restored and specifically fixed the matter to be listed on the first available working day in September, 2020. The adjournment is an administrative-directional measure to enable effective adjudication when circumstances permit.

The matter is deferred and to be listed for hearing on the first available working day in September, 2020.

Final Conclusion: Application CAN 3795 of 2020 is disposed of by granting interim restraint on implementation of the demand letter dated 22nd June, 2020 and by deferring the hearing to the first available working day in September, 2020.

Refund of service tax - bar of unjust enrichment - contract price inclusive of tax (cum duty price) - entitlement to refund where service is exempt - application of precedent

Refund of service tax - bar of unjust enrichment - contract price inclusive of tax (cum duty price) - Whether the appellant is entitled to refund of service tax paid where the contracted price with the Government was cum-duty and the service was exempt, and whether the bar of unjust enrichment applies. - HELD THAT: - The Tribunal examined the agreement between the appellant and the Rajasthan Housing Board and found that the contract provided an agreed price which was cum-service-tax and also that the construction activity was covered by an exemption. Because no service tax was payable by the appellant in law, there was no question of recovery of service tax from the service recipient. Relying on the Tribunal's earlier decision in Jagran Prakashan Ltd. (recorded in the order), the Court held that where the contractual price is inclusive and the service is not taxable, the doctrine of unjust enrichment does not bar refund. Applying that reasoning to the present facts, the Tribunal concluded that unjust enrichment is not attracted and the appellant is therefore entitled to the refund claimed. [Paras 6, 7, 8]

The bar of unjust enrichment does not apply; the appellant's refund claim is allowed.

Final Conclusion: The impugned order rejecting the refund claim on the ground of unjust enrichment is set aside; the appeal is allowed and the appellant is entitled to refund with consequential relief.

Extended period of limitation - normal period of limitation - Cum-duty benefit - remand to Original Authority - penalty under Section 78

Extended period of limitation - normal period of limitation - Availability of extended period of limitation to demand service tax in view of the departmental knowledge date. - HELD THAT: - The Tribunal held that because the Revenue came to know of the appellant's receipt of security services on 16.11.2012, the extended period of limitation could not be invoked as on the date of issuance of the show cause notice (31.12.2015). Consequently, Revenue's demand is limited to the normal period of limitation only. [Paras 2]

Extended period of limitation not invocable; Revenue may demand service tax only for the normal period of limitation.

Cum-duty benefit - remand to Original Authority - Whether Cum-duty benefit is to be allowed while computing service tax liability and the appropriate course for computation. - HELD THAT: - The Tribunal directed that while computing the service tax payable for the normal period of limitation, the appellant is entitled to be given the benefit of cum-duty. As the computation was not carried out with this direction, the matter was remanded to the Original Authority for recomputation of the tax liability for the normal period of limitation, applying the Cum-duty benefit. [Paras 2]

Matter remanded to Original Authority with direction to compute service tax for the normal period of limitation, extending Cum-duty benefit.

Penalty under Section 78 - Whether penalty under Section 78 is imposable when extended period of limitation is not available. - HELD THAT: - The Tribunal found that since the extended period of limitation is not available to the Revenue, the imposition of penalty under Section 78 is not permissible. This follows from the limitation finding which restricts the period for which tax can be demanded. [Paras 2]

Penalty under Section 78 shall not be imposed.

Final Conclusion: Appeal allowed in part by way of remand: extended period of limitation held not invocable; Original Authority directed to recompute service tax for the normal period of limitation allowing Cum-duty benefit; penalty under Section 78 held not imposable.

Transaction value - assessable value - Fixed Facility Charges (FFC) - Minimum Take or Pay Charges (MTOP) - CENVAT credit admissibility - binding nature of Board clarification - mandamus to enforce administrative clarification

Transaction value - Fixed Facility Charges (FFC) - Minimum Take or Pay Charges (MTOP) - assessable value - CENVAT credit admissibility - binding nature of Board clarification - The respondents are bound to give effect to the CBEC clarification dated 10.11.2014 that FFC and MTOP charges form part of the transaction value/assessable value for excise duty and, where duty is accordingly paid and reflected in the invoice, CENVAT credit is to be allowed in accordance with the CENVAT Credit Rules, 2004. - HELD THAT: - The Court held that the Central Board of Excise and Customs' clarification (F.No.6/03/2013/CX.1 dated 10.11.2014) - issued pursuant to directions of the Bombay High Court - is binding on the departmental officers (1st, 2nd and 4th respondents). The clarification specifies that elements of consideration including the designated unit price, FFC and MTOP (as applicable) are to be included in determining the assessable value of gas supplies; further guidance is given for months with no supply and for raising supplementary invoices. The Court reasoned that where such charges are built into the transaction value and excise duty has been paid and shown on the invoice, admissibility of CENVAT credit must be determined under the statutory scheme of the CENVAT Credit Rules, 2004 and the department cannot act contrary to the Board's clarification. Consequently, departmental orders denying credit or seeking recovery contrary to that clarification cannot be sustained without applying the CENVAT Credit Rules as required by the Board's guidance. [Paras 14, 15]

Respondents must follow the CBEC clarification and, where duty on FFC/MTOP is part of transaction value and reflected in invoices, allow CENVAT credit in terms of the CENVAT Credit Rules, 2004.

Mandamus to enforce administrative clarification - effect of statutory substitution - Although the writ petition was filed before substitution of the Central Excise Act, 1944 by the Central Goods and Services Tax Act, 2017 and has become largely infructuous, the Court may nonetheless direct administrative compliance with the earlier Board clarification in pending matters. - HELD THAT: - The Court observed that the petition was instituted prior to the enactment substituting the Central Excise Act with the GST regime and therefore became in part infructuous. Notwithstanding that, because the issue raised remained pending before the departmental formation (the 4th respondent) and because the Board's clarification had been issued and is binding on departmental officers, the Court exercised its discretionary writ power to direct the 4th respondent to comply with the CBEC clarification dated 10.11.2014 without demur. The direction is prospective/administrative to ensure uniform application of the Board's clarification in matters still pending before the department. [Paras 16]

Writ petition allowed to the extent of directing the 4th respondent to comply with the CBEC clarification dated 10.11.2014 despite the substitution of statutory regime; petition otherwise rendered infructuous by the legislative change.

Final Conclusion: Writ petition allowed: the departmental officers are directed to comply with the CBEC clarification dated 10.11.2014 (F.No.6/03/2013/CX.1) and, where FFC/MTOP form part of the transaction value and duty is paid and invoiced, the CENVAT credit is to be allowed in accordance with the CENVAT Credit Rules, 2004; the petition is otherwise rendered infructuous by subsequent statutory substitution.

Withdrawal of appeal under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - effect of withdrawal under Section 127(6) of the Finance (No.2) Act, 2019

Withdrawal of appeal under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - effect of withdrawal under Section 127(6) of the Finance (No.2) Act, 2019 - Prayer for withdrawal of the appeal under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was allowed and the appeal was dismissed as withdrawn in terms of Section 127(6) of the Finance (No.2) Act, 2019. - HELD THAT: - The appellant submitted a prayer for withdrawal of the appeal under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The Appellate Tribunal, on that submission, allowed the prayer for withdrawal and recorded the consequential order. The Tribunal expressly dismissed the appeal as withdrawn under the Scheme, applying the consequences mandated by Section 127(6) of the Finance (No.2) Act, 2019. [Paras 2]

Prayer for withdrawal allowed; appeal dismissed as withdrawn under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 in terms of Section 127(6) of the Finance (No.2) Act, 2019.

Final Conclusion: The appeal was allowed to be withdrawn at the appellant's instance and is dismissed as withdrawn under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, with effect as provided by Section 127(6) of the Finance (No.2) Act, 2019.

Assessment to the best of judgment - requirement of proposal in show cause notice - reversal of input tax credit - treatment of export and pre export sales for tax levy - return for rectification of defective Form H - remand for fresh consideration after opportunity to assessee

Assessment to the best of judgment - requirement of proposal in show cause notice - reversal of input tax credit - treatment of export and pre export sales for tax levy - Validity of the impugned assessment and reversals made without specific proposals in the antecedent show cause notices - HELD THAT: - The Court found that when the assessing authority proceeded under the provision empowering assessment to the best of its judgment, it was under a duty to indicate the specific proposals in the earlier show cause notices. The impugned order imposed a tax levy and reversed input tax credit on items which had not been the subject of proposals in the prior notices. In the absence of such prior proposal, the assessment and reversals cannot be sustained. Consequently the impugned order was quashed and the matter remanded for fresh consideration after due opportunity to the assessee. [Paras 3, 5]

Impugned assessment and reversals set aside for want of prior proposal in show cause notices; matter remanded for fresh adjudication after giving the assessee opportunity to be heard.

Return for rectification of defective Form H - remand for fresh consideration after opportunity to assessee - Whether the assessing authority could reject the Form H as incomplete instead of returning it for rectification and representation - HELD THAT: - The Court held that if the authority considered the Form H incomplete or defective, fairness required that the form be returned to the assessee for rectification rather than merely rejecting it and subjecting the turnover to assessment. The Court directed that the Form H be returned to the petitioner for rectification and representation and that the assessing authority extend opportunity for hearing (including by video conferencing if necessary) before completing fresh proceedings within the stipulated period. [Paras 6, 7]

Form H to be returned for rectification and representation; fresh proceedings to be completed after affording opportunity to the assessee, with timeline directions.

Final Conclusion: The impugned order dated 14.03.2017 is quashed; the matter is remanded to the assessing authority to return the Form H for rectification, afford the assessee an opportunity of representation/hearing and to complete fresh proceedings within the directed timeframes.

Refund to ultimate bearer of tax - Unjust enrichment - Entitlement to refund where C forms subsequently issued - Processing of refund claims independent of seller's assessment - Compliance with directions of a coordinate High Court

Refund to ultimate bearer of tax - Unjust enrichment - Entitlement to refund where C forms subsequently issued - Whether the writ applicant, who bore the incidence of tax because C forms were not issued earlier, is entitled to refund of excess CST collected and deposited by the seller after C forms were subsequently issued. - HELD THAT: - The Court held that the petitioner's case is squarely covered by the decision of a Coordinate Bench in J.K. Cement Ltd. The determinative principle is that only the person on whom the ultimate burden of tax lay is entitled to refund; a refund to the seller who merely deposited tax but passed on the burden would amount to unjust enrichment. The Rajasthan High Court had directed issuance of C forms and entitlement to refund where excess tax was paid owing to wrongful refusal to issue C forms. Reliance Industries Ltd. having collected the tax from the petitioners, a claim by Reliance would be barred by the principle of unjust enrichment; conversely, the petitioners, who bore the burden and are ultimate consumers for mining use, are entitled to claim and receive refund upon production of requisite documents/forms. [Paras 5]

The writ applicant, having borne the ultimate burden of the tax, is entitled to refund of the excess CST collected and deposited by the seller once C forms and requisite documents are produced.

Processing of refund claims independent of seller's assessment - Compliance with directions of a coordinate High Court - Whether the respondent authorities can decline to process and grant refund to the purchaser on the ground that the seller's assessment for the period is pending and that refund must be made only to the seller. - HELD THAT: - The Court rejected the respondents' hyper technical stand that refund could be granted only to the seller after completion of its assessment. That approach ignored the Rajasthan High Court's direction that refund claims made by buyers on production of C forms and requisite documents be processed within twelve weeks. The court observed that insisting on refund to the seller would be legally untenable (because of unjust enrichment) and practically unworkable (delay, possible adjustment against seller's dues). Accordingly, upon the petitioner making an application with required documents, the respondent authorities are duty bound to process the claim and grant refund within the stipulated period. [Paras 6]

Respondents must process the writ applicant's refund claim and grant refund in accordance with law within twelve weeks of receipt of a copy of this judgment; they cannot defer or insist that only the seller may claim refund pending its assessment.

Final Conclusion: Writ allowed; respondents directed to process and grant refund of the excess CST collected from the writ applicant (and deposited by the seller) in accordance with law within twelve weeks of receipt of this judgment.

Failure to consider documentary evidence - denial/misrecording of personal hearing - assessment vitiated for non-consideration of material - remand for fresh consideration with directions - requirement to pass a reasoned order - Central Sales Tax - export sales in the course of import (High-Sea Sales)

Failure to consider documentary evidence - assessment vitiated for non-consideration of material - Impugned assessment order set aside as vitiated for not considering the documentary material produced by the petitioner. - HELD THAT: - The Court found that the assessing authority failed to refer to or consider the documents submitted by the petitioner on 06.07.2019 and 09.07.2019 (acknowledged as Exs.P.2 and P.3) before passing the assessment order. The impugned order also proceeded as if no material had been filed. The learned Special Counsel for respondents could not justify this omission. The failure to notice and deal with the material placed on record by the assessee amounted to a failure of adjudicatory duty and vitiates the assessment order, warranting its quashing. [Paras 6, 10, 11, 12, 13]

Assessment Order No.18295 dt.29.02.2020 is set aside insofar as it pertains to the period April, 2015 to March, 2016.

Denial/misrecording of personal hearing - remand for fresh consideration with directions - requirement to pass a reasoned order - Matter remitted to the assessing authority for fresh consideration after affording personal hearing and by taking into account the documentary material already filed. - HELD THAT: - The Court recorded that the petitioner did in fact attend the personal hearing and submitted the outstanding documentation then, contrary to the assessment order's recital. Given the assessing authority's failure both to acknowledge the hearing and to consider the documents already on record, the appropriate remedy is remand. The Court directed the authority to refer to Exs.P.2 and P.3 (which were acknowledged by the authority's office), provide a personal hearing to the petitioner, and thereafter pass a reasoned order in accordance with law and communicate it to the petitioner. [Paras 9, 10, 11, 14]

The matter is remitted to the 1st respondent for fresh consideration, with directions to consider the petitioner's documentary evidence, afford personal hearing, and pass a reasoned order.

Final Conclusion: Writ petition allowed: the assessment order for April, 2015 to March, 2016 is quashed and the matter is remitted to the assessing authority for fresh consideration after taking into account the documentary evidence filed by the petitioner and after affording a personal hearing; the authority is directed to pass and communicate a reasoned order in accordance with law.

Lack of reasons in administrative revisional order - denial of personal hearing during statutory proceedings - remand for fresh consideration and passing of a reasoned order - obligation to consider binding and persuasive precedents including an advance ruling - exercise of revisional power under Section 32(2) of the Telangana VAT Act read with Section 9(2) of the Central Sales Tax Act

Denial of personal hearing during statutory proceedings - lack of reasons in administrative revisional order - Impugned revisional order passed without affording personal hearing and without recording reasons was unsustainable. - HELD THAT: - The revisional authority passed the impugned order without adverting to the petitioner's request (by email dated 29.03.2020) for adjournment in view of the lockdown and without affording a personal hearing. The order contains no reasons and merely confirms the show-cause notice. Given that the petitioner was prevented by the COVID-19 lockdown from attending the hearing and had sought time, the revisional authority ought to have adjourned the matter or recorded reasons for proceeding. The absence of reasons and denial of opportunity of hearing vitiates the revisional exercise and calls for re-examination. [Paras 17, 19, 20, 21]

The revisional order is set aside on grounds of non-provision of personal hearing and absence of reasons; matter requires re-examination.

Remand for fresh consideration and passing of a reasoned order - obligation to consider binding and persuasive precedents including an advance ruling - Matter remanded to the revisional authority to afford hearing, consider the petitioner's submissions and authorities relied upon, and pass a reasoned revisional order. - HELD THAT: - The Court directed the revisional authority to re-open the matter and afford the petitioner an opportunity to file objections with supporting material within four weeks, to provide a personal hearing, and to consider the decisions relied upon by the petitioner (including Reliance Trading Company and the earlier order in T.R.C.No.186/1998) as well as the advance ruling and other cited authorities before passing a reasoned order in accordance with law. The remand is for fresh consideration and adjudication on merits by the revisional authority, taking into account the materials and precedents relied upon by the petitioner. [Paras 21, 22, 23]

Impugned revisional order and consequential order set aside; matter remanded for fresh revisional proceedings with directions to afford hearing, consider cited decisions and advance ruling, and pass a reasoned order.

Final Conclusion: Writ petition allowed; revisional order dated 30.03.2020 and consequential order set aside and remitted to the revisional authority for fresh disposal after affording the petitioner four weeks to file objections, granting a personal hearing and considering the authorities relied upon; no order as to costs.

Best judgment assessment - rejection of books of accounts - estimation of turnover by adoption of gross profit - requirement of a rational basis and nexus with material - surmises and conjectures - presumption versus evidential material

Best judgment assessment - estimation of turnover by adoption of gross profit - requirement of a rational basis and nexus with material - rejection of books of accounts - surmises and conjectures - Validity of the Assessing Officer's estimation of gross profit and consequent rejection of the assessee's books of accounts for the listed assessment years. - HELD THAT: - The Court examined whether the assessment by adopting a gross profit (GP) percentage-arrived at by selecting the highest GP entries from invoices of two licensed premises (AC and Non-AC) and averaging them-constituted a valid best judgment assessment. Applying the principle that a best judgment assessment must be based on some material having a reasonable nexus to the estimate and not be arbitrary, the Court found no material before the Assessing Officer to show that any brand was sold at rates higher than invoiced. The Assessing Officer picked isolated highest GP figures from different premises (160.41% and 237.26%), averaged them to 198% and rounded to 190% without accounting for differences in brands, purchase values, or the legitimate business practice of differential pricing between premises providing different facilities. Reliance on purchase value as a yardstick for prescribing resale price was held to be inappropriate where the assessee lawfully offered differing amenities and fixed sale prices accordingly. In these circumstances the estimate was held to be founded on mere assumptions, surmises and conjectures, lacking a rational basis or nexus with the business realities revealed by the invoices and books. Consequently, the rejection of the books of accounts and the GP-based estimation were set aside. [Paras 6, 7, 8, 9, 10]

The Assessing Officer's estimation of gross profit and the rejection of the books of accounts were unsustainable and set aside.

Final Conclusion: Revisions allowed; orders of the authorities below set aside for assessment years 2007-08, 2009-10, 2010-11, 2011-12 and 2013-14, the Court answering the question of law in favour of the assessee and against the Revenue.

Value Added Tax - interest under Section 42(3) - transitional credit - technical difficulty in online portal as ground for delay - remittance of tax and belated payment liability

Interest under Section 42(3) - remittance of tax and belated payment liability - Computation and communication of interest payable under Section 42(3) for the delayed remittance relating to April 2017 - HELD THAT: - The Court directed that a computation of interest under Section 42(3) of the Tamil Value Added Tax Act, 2006 be furnished to the petitioner forthwith. The direction requires the tax authority to quantify the interest liability arising from belated payment for April 2017 and communicate that computation to the petitioner. The petitioner is given an opportunity, upon receipt of the computation, either to remit the computed interest if it is found to be in order or to raise objections to the computation. [Paras 4]

Computation of interest under Section 42(3) to be furnished to the petitioner forthwith and communicated to it.

Transitional credit - technical difficulty in online portal as ground for delay - Adjudication of the petitioner's objections, including its claim for interest on entry-tax credit rendered inaccessible due to technical difficulties during September 2016 to August 2017 - HELD THAT: - The Court recognised the petitioner's contention that entry-tax credit available on amalgamation remained inaccessible owing to technical problems with the Commercial Taxes Department's website, and that the petitioner has sought transition of such credit by filing a TRAN-1 declaration. Rather than decide the substantive entitlement on the writ, the Court authorised the assessing authority to consider and decide the petitioner's objections to the interest computation, which may include the claim for credit and consequential adjustment of interest. The authority is to hear the petitioner and pass necessary orders on those objections within four weeks from receipt of the objections. [Paras 4]

Petitioner's objections, including the claim for interest on the inaccessible entry-tax credit, to be considered and decided by the authority after hearing within four weeks of receipt of objections.

Final Conclusion: Writ petition disposed directing (i) immediate furnishing of the computation of interest under Section 42(3) for April 2017, and (ii) that the petitioner may pay the computed interest or file objections (including its claim regarding transitional entry-tax credit affected by technical difficulties), which objections shall be heard and decided by the tax authority within four weeks.

Locus standi to maintain a derivative or representative writ petition - statutory protection of institutional name and prevention of deceptively similar use - exclusive remedy of trade mark proprietor for infringement and remedy of passing off - availability of alternative efficacious remedy

Locus standi to maintain a derivative or representative writ petition - The appellant, a member of the Institute of Chartered Accountants of India, did not have locus standi to maintain the writ petition on behalf of the Institute. - HELD THAT: - The third Respondent is a statutory body corporate established under the Chartered Accountants Act with the capacity to sue and be sued in its own name. The petition filed by the appellant was in substance an action on behalf of the Institute (a derivative action). Under private law principles derivative actions may be entertained only where the entity on whose behalf the action is brought is unable for justifiable reasons to prosecute proceedings itself. Neither the appellant nor the Institute pleaded or proved that the Institute was disabled from initiating proceedings. In the absence of any such justification, a discretionary public law writ could not be maintained by the appellant in place of the statutory body. The impugned order correctly held that the appellant was not the person aggrieved and therefore lacked standing to institute the writ petition. [Paras 11]

The appellant lacked locus standi and the writ petition was not maintainable at his instance.

Statutory protection of institutional name and prevention of deceptively similar use - Allegations of violation of the CA Act (Sections 15-A and 24-A) by the first Respondent's use of the acronym ICAI did not warrant exercise of this Court's discretionary writ jurisdiction by the appellant. - HELD THAT: - Sections relied upon protect the name and nomenclature of the statutory Institute; however, the statutory name of the third Respondent and the statutory name of the first Respondent are not identical. Further, prosecution under the CA Act for such offences is enabled only on complaint by the Council of the Institute or the Central Government. Given these statutory contours, the question of infringement of the CA Act is for appropriate proceedings by the competent complainant bodies, and the present writ by the appellant could not be entertained as a surrogate enforcement action. [Paras 12]

No case was made out for exercise of discretionary jurisdiction under the CA Act by the appellant; such matters must be pursued by the Council or the Central Government.

Exclusive remedy of trade mark proprietor for infringement and remedy of passing off - availability of alternative efficacious remedy - Claims based on registered trade mark rights in the acronym ICAI and passing off cannot be pursued by the appellant; the registered proprietor or proprietor alone may sue for infringement or passing off. - HELD THAT: - The Trade Marks Act vests the right to sue for infringement in the registered proprietor; common law passing off is similarly enforceable by the proprietor of the mark. The appellant, not being the registered proprietor or proprietor, lacked locus to initiate infringement or passing-off proceedings. The existence of these specific statutory and common law remedies was determinative of the availability of an efficacious alternative remedy, and the appellant could not substitute himself for the proprietor in invoking them. Correspondence from the Ministry of Corporate Affairs did not alter these legal positions, particularly as an earlier communication was subsequently modified. [Paras 13]

Actions for trade mark infringement or passing off must be initiated by the registered proprietor/proprietor; the appellant had no standing to pursue such remedies in this writ.

Final Conclusion: The impugned order dismissing the writ petition is affirmed: the appellant lacks locus to prosecute the petition on behalf of the Institute, and the statutory and proprietary remedies for alleged misuse of the acronym are to be pursued by the appropriate entitled parties; appeal dismissed, no costs.

Offence under Section 138 of the Negotiable Instruments Act - Presumption under Sections 138 and 139 of the Negotiable Instruments Act - Blank signed cheque issued as security - Burden of proof and rebuttal of statutory presumption

Offence under Section 138 of the Negotiable Instruments Act - Blank signed cheque issued as security - Presumption under Sections 138 and 139 of the Negotiable Instruments Act - Burden of proof and rebuttal of statutory presumption - Accused did not commit the offence under Section 138 of the Negotiable Instruments Act. - HELD THAT: - The trial court found that the accused had established that two blank signed cheque leaves, including the cheque numbered as Ext.P1, were in the custody of the complainant prior to the date on which the complainant alleged the cheque was issued. The accused's reply (Ext.D3) specifically stated the cheque numbers and was supported by postal acknowledgement; the complainant did not dispute those documents. Those facts created a reasonable doubt about the complainant's case that Ext.P1 was issued on demand as a cheque for discharge of a debt. On that basis the presumption arising under Sections 138 and 139 was rebutted. The trial court applied these findings to acquit the accused, and the High Court, upon reviewing the evidence and documents relied on by both sides, found no reason to disturb the factual conclusion and legal outcome reached below.

Acquittal under Section 255(1) Cr.P.C. confirming that the accused is not guilty of the offence under Section 138; appeal dismissed.

Final Conclusion: The appellate court upheld the trial court's finding that the statutory presumption was rebutted by evidence that the cheque leaf was in the complainant's custody before the alleged issuance, and accordingly dismissed the appeal and confirmed the acquittal under Section 138 of the Negotiable Instruments Act.

Offence under Section 138 of the Negotiable Instruments Act - Liability of a Managing Partner/partner as signatory under Section 141 - Requirement of specific averments in complaint under Section 141 - Explanation treating a firm as a 'company' and a partner as a 'director' for Section 141 - Effect of final conviction of the firm on defence of the individual partner

Liability of a Managing Partner/partner as signatory under Section 141 - Requirement of specific averments in complaint under Section 141 - Explanation treating a firm as a 'company' and a partner as a 'director' for Section 141 - Whether the acquittal of the 2nd accused (Managing Partner and signatory) could be sustained in absence of specific averments that he was "in charge of and responsible for" the firm's business, in light of the larger Bench decision in S.M.S. Pharmaceuticals Ltd. and the statutory explanations to Section 141. - HELD THAT: - The Court accepted the ratio of the larger Bench in S.M.S. Pharmaceuticals Ltd., as applicable to the facts of this case. The larger Bench held that while specific averments are generally necessary to bring a person within Section 141, holders of positions by virtue of which they are admittedly in charge of and responsible for the conduct of the business (such as Managing Director) are covered even without express averments; and the signatory of a dishonoured cheque is clearly covered. The Court further relied on the statutory explanations to Section 141 which extend the definition of "company" to include a firm and equate a "director" in relation to a firm with a partner. Applying these principles, the Court found that the 2nd accused was the Managing Partner and the signatory of the cheque; consequently he could not escape liability merely because the complaint did not contain specific averments that he was in charge and responsible. The Court rejected the submission that the Partnership Act prevented application of S.M.S. Pharmaceuticals Ltd., holding that the explanations to Section 141 bring firms and partners within the same scheme. [Paras 6, 7, 8]

The acquittal of the 2nd accused was set aside and he was held liable under Section 138 of the Negotiable Instruments Act on the grounds that, as Managing Partner and signatory, he fell within Section 141 and could not avoid liability for lack of specific averments.

Offence under Section 138 of the Negotiable Instruments Act - Effect of final conviction of the firm on defence of the individual partner - Whether the 2nd accused could be convicted under Section 138 given that the firm (1st accused) had already been convicted and that execution of the cheque was said to be unproved. - HELD THAT: - The Court noted that the conviction and sentence of the firm (1st accused) had become final and that the 2nd accused had represented the firm. In that factual matrix the 2nd accused could not, in an appeal against his acquittal, successfully contend that execution of the cheque was not proved when the firm had already been convicted under Section 138. Taking into account the admitted status of the 2nd accused as Managing Partner and signatory, and the final conviction of the firm, the Court concluded that the 2nd accused committed the offence under Section 138. Considering the circumstances and the nature of the transaction, the Court preferred payment of compensation to imprisonment. [Paras 9, 10, 11, 12]

The 2nd accused was convicted under Section 138; he was sentenced to pay compensation to the complainant and, in default, to undergo simple imprisonment as ordered.

Final Conclusion: Appeal allowed. The trial Court's acquittal of the 2nd accused (Managing Partner and signatory) is set aside; he is convicted under Section 138 of the Negotiable Instruments Act and ordered to pay compensation with the prescribed default imprisonment; the award of compensation, if paid, to be disbursed to the complainant.

Section 148 Negotiable Instruments Act - deposit as condition for hearing of appeal - appellate court's discretion to impose deposit - consequences of non-compliance with deposit condition

Section 148 Negotiable Instruments Act - deposit as condition for hearing of appeal - consequences of non-compliance with deposit condition - Whether the revisionist must deposit a portion of the fine as a condition for the appeal to be heard and what consequence follows for non-deposit. - HELD THAT: - The Court noted that Section 148 of the Negotiable Instruments Act empowers an appellate court, in an appeal by the drawer against conviction under Section 138, to require the appellant to deposit a sum, at least twenty per cent of the fine or compensation awarded by the trial court. The revisionist had been repeatedly directed by the trial and appellate courts and by this Court to deposit forty per cent of the fine but failed to comply despite multiple opportunities and specific time-limits. In view of the continued non-compliance and the statutory scheme permitting a deposit as a condition for entertaining the appeal, the Court exercised its supervisory power to require compliance before the appeal is finally heard on merits. Rather than render the appeal infructuous by inaction, the Court increased the deposit requirement to fifty per cent of the fine, fixed a timeline for payment, and directed that upon deposit the appeal be heard and decided on merits by the appellate court by a reasoned and speaking order within two months from first hearing.

Revisionist directed to deposit fifty per cent of the fine preferably within 30 days; upon deposit the lower appellate court shall hear the appeal on merits and decide it by a reasoned and speaking order within two months from first hearing.

Final Conclusion: The criminal revision is disposed of by directing the revisionist to deposit 50% of the fine within 30 days, failing which the previously operative recovery order stands; upon deposit the appellate court shall hear and decide the appeal on merits within two months of first hearing.

Interpretation of proviso (b) to Section 138 of the Negotiable Instruments Act - interpretation of proviso (c) to Section 138 of the Negotiable Instruments Act - requirement of notice for initiation of proceedings under Section 138 - sufficiency of complaint for omission of specific amount in notice - maintainability of complaint where complaint filed within 30 days of bank intimation

Interpretation of proviso (b) to Section 138 of the Negotiable Instruments Act - interpretation of proviso (c) to Section 138 of the Negotiable Instruments Act - requirement of notice for initiation of proceedings under Section 138 - maintainability of complaint where complaint filed within 30 days of bank intimation - Whether the notice period and filing timeline required by provisos (b) and (c) to Section 138 were complied with and whether non mention of a 30 day period in the notice vitiates the proceedings. - HELD THAT: - The Court held that proviso (b) (as substituted by Act No. 55 of 2002) prescribes a 30 day period running against the payee/holder for filing the complaint from the date of receipt of information from the bank about dishonour; it is a limitation on the complainant and is not a mandate that the notice itself must specify a 30 day period for payment by the drawer. Proviso (c) provides a 15 day breathing period to the drawer from receipt of the notice to make payment, but that period operates independently of proviso (b). The fact that the complaint was filed on 03.04.2015 (after the 15 days in proviso (c) but within 30 days from bank intimation) means the legislative purpose of proviso (c) was not frustrated; the initiation of proceedings much after expiry of 15 days evidenced that the condition in proviso (c) had effectively been met in substance. Consequently, the contention that the notice was defective for not specifying a longer period was rejected and the timelines for maintainability under Section 138 were held to have been satisfied. [Paras 8, 9, 10, 11, 12]

Proviso (b) regulates the time for filing the complaint and need not be mirrored as a 30 day period in the notice; proviso (c)'s 15 day period to the drawer is independent and, on the facts, non specification of a longer period in the notice does not render the proceedings invalid.

Sufficiency of complaint for omission of specific amount in notice - requirement of notice for initiation of proceedings under Section 138 - Whether the complaint was defective for not mentioning the total amount claimed in the notice. - HELD THAT: - On scrutiny of the complaint as a whole, particularly paragraph 6 and the relief clause of the complaint dated 03.04.2015, the Court found that the amount sought to be claimed (the amounts for which the cheques were issued) was specifically mentioned in the complaint itself. The omission complained of by the revisionist-that the notice did not mention the amount claimed-was contrary to the documents on record and did not render the complaint defective. No other grounds were pressed by the revisionist. [Paras 13, 14]

The complaint cannot be held defective for omission of the claimed amount in the notice because the complaint itself, in paragraph 6 and the relief clause, specifies the amount claimed.

Final Conclusion: Both grounds advanced in revision were rejected; concurrent findings of conviction under Section 138 of the Negotiable Instruments Act by the trial court and the appellate court are upheld, the criminal revision is dismissed and the impugned sentence ordered to be executed as the interim deposit condition was not complied with.