TaxTMI Updates e-Newsletter
Aug 21,2026

Service of GST notices and orders through Common Portal - Limitation for appeal against portal-uploaded orders

Availability of relief where show-cause notices or adjudication orders were served only by uploading them on the Common Portal - HELD THAT: - The Court noted that the decision in Luxmi Traders v. Union Territory of Chandigarh & Ors. [2026 (7) TMI 1602 - PUNJAB AND HARYANA HIGH COURT] held that mere portal uploading, absent acknowledgement of receipt or a reply, does not constitute sufficient service of a show-cause notice; further, service of a contested order-in-original solely through the portal does not trigger limitation for appeal. The respondents were unable to distinguish that decision, and the parties consented to disposal on that basis. [Paras 5, 6]

Final Conclusion: The batch of writ petitions was disposed of by extending to the petitioners the remedies recognised in Luxmi Traders v. Union Territory of Chandigarh & Ors. concerning service solely through the Common Portal.

Consideration of reply to GST registration cancellation notice - Failure to decide the taxpayer's reply to the notice proposing cancellation of GST registration - HELD THAT: - The Court confined its consideration to the limited prayer for disposal of the reply and directed the respondent authorities to consider and decide the matter expeditiously. [Paras 3]

The authorities were directed to decide the reply preferably within three weeks.

Final Conclusion: The writ petition was disposed of with a direction for expeditious consideration and decision of the reply to the proposed GST registration cancellation notice.

Restoration of GST appeal dismissed on limitation - Entitlement to restoration of the statutory appeal against cancellation of GST registration after its dismissal on limitation - HELD THAT: - The Court held that the controversy was covered by M/s S. Nabad Ali Mustak Ahmed [2025 (11) TMI 2051 - RAJASTHAN HIGH COURT] and disposed of the writ petition on the same terms. [Paras 3]

The statutory appellate remedy stood reopened in terms of the precedent, with the appeal to be considered on merits without dismissal on limitation.

Final Conclusion: The writ petition was disposed of in the same terms as the earlier decision, reopening the statutory appeal for consideration on merits.

Cancellation of GST registration for non-filing of returns - Retrospective cancellation of GST registration - Statutory limitation for GST appeals - Exercise of writ jurisdiction despite expiry of appellate limitation

Validity of cancellation of GST registration for failure to furnish returns for a continuous period of six months, made effective from a date within the period of default - HELD THAT: - The power to cancel registration may be exercised where returns remain unfurnished for the stipulated continuous period, after affording an opportunity of hearing. Cancellation cannot mechanically be given retrospective operation; where it is made effective from a date anterior to the default, the Proper Officer must record objective and valid reasons. However, cancellation effective from a date falling within the period of default is not retrospective cancellation in the strict sense. The statute does not require a separate show-cause notice concerning the consequential date from which cancellation may operate, provided notice of the non-compliances forming the basis of proposed cancellation was issued. [Paras 16, 17, 18, 19]

The cancellation order was not invalid on the ground of retrospective operation or want of a separate show-cause notice.

Statutory limitation for GST appeals - Extraordinary writ jurisdiction and statutory limitation - Maintainability of a writ petition seeking condonation of delay beyond the maximum statutory period for appealing against cancellation of GST registration - HELD THAT: - Where the statute prescribes a period for appeal together with a limited condonable period, the appellate authority has no jurisdiction to condone delay beyond that limit. Though writ jurisdiction is not absolutely excluded after expiry of appellate limitation, it cannot ordinarily be invoked to circumvent the legislative scheme or to direct condonation and a merits remand. Interference with the original order after expiry of limitation is confined to exceptional circumstances, including patent want of jurisdiction or complete breach of natural justice. No such circumstance was established. The decisions taking a contrary view by routinely condoning delay were held per incuriam. [Paras 26, 27, 28, 29, 30]

The Court declined to condone the delay or remit the appeal for merits adjudication, and upheld dismissal of the statutory appeal as time-barred.

Final Conclusion: The writ petition was dismissed. The cancellation of registration was sustained, and the Court declined to use writ jurisdiction to overcome expiry of the maximum statutory period for filing the appeal.

GST exemption for road-access annuity services - Taxability of deferred annuity payments for road works contracts - Binding effect of advance rulings and clarificatory circulars

GST exemption for road-access annuity services - Works contract services for road construction - Applicability of the exemption under Entry 23A of Notification No. 12/2017 to annuity payments received under a concession agreement for design, construction, operation and maintenance of roads - HELD THAT: - The contractual obligations were not confined to providing access to a road or bridge on payment of annuity. They constituted taxable works-contract services involving construction, design and maintenance of roads, with the project cost partly paid during construction and the balance paid through deferred annuities. Entry 23A, falling under Heading 9967, exempts road-access services and does not extend to road-construction services falling under Heading 9954. An exemption for works-contract services could not be inferred where the notification did not expressly provide it. [Paras 12, 13, 14]

The annuity payments under the concession agreement were taxable as consideration for works-contract services and were not exempt under Entry 23A.

Clarificatory circulars under the CGST Act - Binding effect of advance rulings - Validity of the circular clarifying that deferred annuity payments for road construction are not exempt, and the effect of an earlier advance ruling granting exemption - HELD THAT: - The circular was held to clarify the applicable statutory position and to prevent misinterpretation in implementation of the Act; issuance of such instructions fell within the Board's statutory domain. The notification and the true nature of the services governed taxability. An earlier erroneous understanding by the advance ruling authority could not bind the implementing authorities after the Board clarified the law. [Paras 15, 16]

The challenge to the circular and the reliance on the earlier advance ruling were rejected.

Final Conclusion: The writ petitions were dismissed. The impugned circular was upheld in its application to the petitioner's deferred annuity receipts, which were held taxable as consideration for road works-contract services.

Regular bail in alleged GST evasion - Uncomputed GST liability of transporter - Grant of regular bail to a transporter accused of facilitating clandestine transportation of goods without invoices and e-way bills under the CGST Act. - HELD THAT: - The material recorded showed that the applicant was a transporter and neither the manufacturer nor supplier of the goods. The complainant's prior statement disclosed that no computation or determination of GST liability had been made against the applicant. Having regard to this circumstance, the filing of the charge-sheet, the period of custody and the likely time for trial, the Court considered bail appropriate without commenting on the merits.

The regular bail application was allowed, subject to furnishing the stipulated bond and sureties to the satisfaction of the trial court.

Final Conclusion: The applicant was granted regular bail in the alleged GST evasion case, subject to the conditions imposed by the trial court.

Restoration of time-barred GST appeal for adjudication of exemption claim - Dismissal of the GST appeal as filed beyond the period contemplated under section 107, where the petitioner asserted that its services were exempt and factual questions required appellate adjudication - HELD THAT: - Although the appeal was filed beyond the statutory period, including the further period which the Appellate Authority could allow, the Court considered it expedient to afford the petitioner an opportunity to pursue the appeal because it claimed exemption for the services rendered and factual questions required adjudication. The Court acted in view of Simplex Infrastructures Ltd., and Another [2022 (1) TMI 761 - KARNATAKA HIGH COURT]. [Paras 5]

The appellate order was set aside and the appeal was restored for adjudication in accordance with law, with all merits contentions kept open.

Final Conclusion: The writ petition was partly allowed; the order dismissing the appeal on limitation was set aside and the appeal was restored for decision on merits in accordance with law.

Classification of Psyllium seeds under Heading 1211 - GST exemption for fresh or chilled Psyllium seeds - Fresh and dried agricultural produce

Classification of Psyllium seeds under Heading 1211 - Classification of Psyllium seeds (Isabgol) supplied as raw material to processing units. - HELD THAT: - The tariff entry specifically identifies Psyllium seeds, and the HSN Notes include Plantago psyllium herbs and seeds within Heading 1211. The goods were therefore held classifiable under tariff sub-heading 1211 90 13. [Paras 6]

Psyllium seeds are classifiable under tariff sub-heading 1211 90 13.

GST exemption for fresh or chilled Psyllium seeds - Fresh and dried agricultural produce - Eligibility of Psyllium seeds stored in dry and ventilated godowns for exemption as fresh or chilled goods, or alternatively as goods of seed quality. - HELD THAT: - Eligibility depended upon the condition of the goods at the time of supply by the applicant. Applying the clarification distinguishing fresh goods from goods intentionally dried, the Authority held that storage in dry and ventilated godowns, coupled with the absence of information regarding the storage period, imparted a dried character to the seeds. The seeds could not therefore be treated as fresh or chilled. Since the specific Heading 1211 exemption applies only to fresh or chilled goods, the goods were held covered by the entry for frozen or dried goods; the alternative claim under the general entry for goods of seed quality was also rejected. [Paras 12, 13, 14, 16, 18]

The supplies do not qualify for exemption and are liable to GST at 5% as dried Psyllium seeds; the alternative exemption claim was rejected.

Final Conclusion: Psyllium seeds were held classifiable under tariff sub-heading 1211 90 13 and taxable at 5%, the claimed exemptions being unavailable.

Assessment u/s 153C - Addition u/s 68 - incriminating material found or not? - gross delay of 902 days in filing the special leave petition

HELD THAT:- There is a gross delay of 902 days in filing the special leave petition. The reasons assigned for seeking condonation of delay are neither satisfactory nor sufficient in law to condone the same. Hence, the application seeking condonation of delay is dismissed.

Further, we find that the issues which are raised in the special leave petition are covered by the judgment of this Court in Abhisar Buildwell P. Ltd. [2023 (4) TMI 1056 - SUPREME COURT]In the circumstances, the special leave petition is also dismissed in terms of the said judgment on merits.

We fail to understand as to how the petitioner/Department has filed this special leave petition with 902 days delay when even according to the Department the matter is covered by an earlier judgment of Abhisar Buildwell P. Ltd. (supra). This is an instance of burdening this Court with an unnecessary special leave petition and adding to the pendency.

Fees received for live transmission/live feed of cricket matches - Royalty receipts - service from which income was generated would clearly fall within the ambit of Explanation 2 as placed in Section 9(1)(vi) - distinction between a copyright and broadcast right -HELD THAT:- In view of the order Deputy Director of Income Tax International Taxation vs. Shine Satelite Public Company Ltd [2026 (1) TMI 1666 - SC ORDER] the Special Leave Petition stands dismissed.

Centralisation of assessment proceedings for coordinated investigation - Transfer of the petitioner's assessment case to Nashik for administrative convenience and coordinated investigation after completion of the searched person's assessment

HELD THAT: - The transfer orders were founded on the need for administrative convenience and coordinated investigation in relation to the searched group. Once the searched person's assessment had already been completed, transfer of the petitioner's case to Nashik would serve no purpose. [Paras 7]

The transfer orders were quashed, and the petitioner's assessment was directed to be conducted in Mumbai under the appropriate charge.

Final Conclusion: The writ petition was allowed to the extent of the challenge to the transfer orders. The merits of the proceedings, including all rights and contentions of the parties, were kept open.

Validity of assessment notice under section 153C - Immediate recording of satisfaction note

Whether notices issued u/s 153C after a delay of ten months from completion of the searched person's assessment proceedings were valid? - HELD THAT: - For the Assessment Years 2015-16, 2016-17, 2017-18, 2018-19 and 2021-22, this Court has already taken a view in the Petitioner’s own case that the notice dated 10th August 2023 issued under Section 153C of the IT Act is time barred as the same was not issued “immediately” as laid down by the Hon’ble Supreme Court in the case of Calcutta Knitwears [2014 (4) TMI 33 - SUPREME COURT] since it was issued ten months after the assessment proceedings of the searched person was completed viz. on 27th September 2022. This Court also held that ten months was not a reasonable time by which the Satisfaction Note ought to have been issued by AO of the searched person by relying upon its own decisions in Clear Channel India (P) Ltd. [2026 (2) TMI 1244 - BOMBAY HIGH COURT] and c India Asset Management Ltd. [2026 (4) TMI 1041 - BOMBAY HIGH COURT]

A period of ten months after completion of the searched person's assessment was held not to satisfy the requirement that the satisfaction note and consequential notice be issued immediately; the notices were therefore time-barred. [Paras 5, 6]

The notices issued under section 153C for Assessment Year 2019-20 and Assessment Year 2020-21 were quashed.

Final Conclusion: The writ petitions were allowed and the impugned notices under section 153C for the relevant assessment years were quashed as time-barred.

Condonation of delay in filing income-tax appeal - 156 days' delay - Sufficient cause and governmental procedural delay

Condonation of delay in filing the Revenue's appeal under the Income-tax Act where the delay resulted from departmental scrutiny, approvals, collection of records and settlement of the appeal memorandum - HELD THAT: - The discretion to condone delay upon sufficient cause must be exercised with a liberal and justice-oriented approach. The length of delay is not decisive; the sufficiency and bona fides of the explanation are material. The departmental steps disclosed in the application constituted a bona fide explanation, which was neither specifically denied nor shown to be non-existent. The insertion of dates by hand did not, by itself, render the application cyclostyled or stereotyped, particularly when its contents materially explained the delay. [Paras 14, 15]

The delay was condoned and the interim application was allowed.

Final Conclusion: The Revenue established sufficient cause for the delay arising from bona fide departmental procedure. The delay was condoned, and the appeal was directed to be processed for admission.

Transfer pricing Adjustment - selection of most appropriate method - Comparable Uncontrolled Price method or Transactional Net Margin Method - substantial question of law

HELD THAT: - The questions concerning the transfer-pricing adjustment, adoption of CUP in preference to TNMM, and adjustments for differences between associated-enterprise and non-associated-enterprise transactions were identical to those decided in the assessee's own case for an earlier assessment year [2020 (2) TMI 1389 - GUJARAT HIGH COURT]

The earlier decision held that the Tribunal's fact-based acceptance of TNMM as the most appropriate method was neither perverse nor contrary to the material on record. A difference of opinion regarding the appropriate method does not, by itself, give rise to a substantial question of law under section 260A unless the method adopted is contrary to the prescribed rules. [Paras 6]

No substantial question of law arose from the Tribunal's decision on the transfer-pricing benchmarking issues.

Final Conclusion: The tax appeals were dismissed. The questions relating to the selection and application of the transfer-pricing method disclosed no substantial question of law, and the remaining questions were treated as incidental.

Validity of reopening of assessment - ‘tangible material’ - change of opinion - Notice issued beyond the period of four years on the basis of the objections raised by the audit party - ITAT held case was based on the re-examination of the documents available on record before the Assessing Officer, and there was no new evidence or information which was available for reopening the case.

HELD THAT:- On perusal of the reasons recorded, it is apparent that the Assessing Officer has once again re-examined the documents and materials in the form of the balance-sheet while going through the particulars of the assessee’s income. Upon verification of the records, the Assessing Officer formed a belief that he had reason to believe that the income had escaped assessment, in the absence of any fresh tangible material to form such a reason to believe.

Admittedly, the reopening was made after four years, and therefore, as per the proviso to section 147 AO could not have assumed jurisdiction to reopen the assessment as held in case of Kelvinator of India Limited 2010 (1) TMI 11 - SUPREME COURT] - No question of law, much less any substantial question of law, arises from the impugned order of the Tribunal.

Final Conclusion: The tax appeal was dismissed, no substantial question of law arising from the Tribunal's order quashing the reassessment for want of jurisdiction.

Royalty - receipts from sale of software licences to non-residents - Income deemed to accrue or arise in India - HELD THAT:- The appeal was dismissed as the questions raised were covered by the Supreme Court decision ENGINEERING ANALYSIS CENTRE OF EXCELLENCE PRIVATE LIMITED [2021 (3) TMI 138 - SUPREME COURT] wherein held payment for acquisition of software without transfer of any right or interest in the copyright is not royalty.

Jurisdiction over appeals from Income-tax Appellate Tribunal orders

Maintainability of an appeal from an Income-tax Appellate Tribunal order before a High Court when the assessment order was passed by an Assessing Officer situated outside that High Court's territorial jurisdiction - HELD THAT: - As decided in M/S. ABC PAPERS LIMITED [2022 (8) TMI 863 - SUPREME COURT] appeal against every decision of the ITAT shall lie only before the High Court within whose jurisdiction the Assessing Officer who passed the assessment order is situated.

An appeal against an order of the Income-tax Appellate Tribunal lies only before the High Court within whose jurisdiction the Assessing Officer who passed the assessment order is situated. The subsequent transfer or centralisation of the assessee's case does not alter that appellate jurisdiction. Since the assessment order was passed at Coimbatore, this Court lacked jurisdiction. [Paras 6, 7]

The appeal was dismissed as not maintainable, with liberty to the appellants to file it before the appropriate jurisdictional High Court.

Final Conclusion: The appeal was held not maintainable before the Karnataka High Court because the assessment order had been passed by the Assessing Officer at Coimbatore. Liberty was reserved to pursue the appeal before the competent High Court.

TDS credit despite deductor's default - Proof of tax deduction without Form 16 or Form 16A

TDS credit despite deductor's default - Harmonious construction of TDS credit and bar on recovery - Entitlement of a deductee to TDS credit where tax was deducted from the income or payment but was not deposited by the deductor with the Central Government - HELD THAT: - The provisions governing credit of TDS and the statutory bar on recovery from the deductee must be read harmoniously. The bar operates once actual deduction is established and cannot be defeated by the deductor's subsequent failure to remit the amount, an act wholly outside the deductee's control. The deductor's default cannot impose an impossible condition upon the deductee or result in double collection; the Department may verify the fact of deduction and proceed against the deductor under the statutory machinery. [Paras 54, 57, 59, 60, 61]

Upon verification of actual deduction, TDS credit must be granted, with consequential refund where due; a demand arising solely from the deductor's non-payment cannot be recovered, continued, or adjusted against subsequent refunds.

Proof of tax deduction without Form 16 or Form 16A - Verification of TDS credit claims - Proof of deduction of TDS where the amount is absent from Form 26AS and Form 16 or Form 16A is unavailable owing to the deductor's default - HELD THAT: - In the electronic TDS regime, the deductor's payment and statement filing ordinarily precede generation of Form 16 or Form 16A. Their absence, therefore, cannot be treated as conclusive against a deductee alleging non-payment by the deductor. Deduction may be proved by reliable and cogent material appropriate to the payment, including salary slips, bank records, invoices, payment advices, ledgers, correspondence and insolvency claims. On production of prima facie material, the Department must conduct factual verification, including inquiry from the deductor or other relevant person where required, rather than mechanically reject the claim on a mismatch. [Paras 73, 74, 76, 77, 78]

The claims in the batch were remanded for verification by the respective Assessing Officers; pending decision, the corresponding demands are to remain in abeyance without coercive recovery or refund adjustment, and a reasoned order is to be passed, preferably within six months.

Final Conclusion: The petitions were allowed to the extent of TDS claims arising from tax alleged to have been deducted but not remitted by the deductors. The impugned demands were set aside and the matters remanded for verification and consequential grant of credit, refund and rectification in accordance with law.

Depreciation on intangible assets - Business or commercial rights of similar nature - Depreciation on the acquired right to use the brand name "Arvind" and the marketing and distribution network -

HELD THAT: - The acquired brand-name right and marketing and distribution network formed part of the opening written-down value of the relevant block of intangible assets. Section 32(1)(ii) encompasses trade marks, licences, franchises and other business or commercial rights of similar nature; the enumerated categories were wide enough to cover these intangible assets. The interpretation in Smifs Securities Limited [2012 (8) TMI 713 - Supreme Court] treating goodwill as a business or commercial right of similar nature, supported this construction. [Paras 4, 5]

The depreciation claim was allowable; the question of law was answered in favour of the assessee and against the Revenue.

Final Conclusion: The appeal was dismissed, affirming the allowance of depreciation on the acquired brand-name right and marketing and distribution network for Assessment Year 2001-02.

Reassessment based on seized material - Live nexus between seized material and assessee - On-money allegation in land purchase

Validity of reassessment notice alleging undisclosed on-money payment on purchase of land, founded solely on an entry in a seized real-estate broker's inquiry register - HELD THAT: - The inquiry-register entry predated the assessee's purchase by about nine months and, by the broker's own statement, recorded land available for sale and its asking rate, not a concluded transaction. The entry covered additional survey numbers and substantially larger land area than that purchased by the assessee, named an unconnected person, and neither the register nor the broker's statement referred to the assessee or the co-purchasers. The statutory presumption could not convert such an entry into conclusive evidence of an on-money transaction, particularly in view of the broker's admissions regarding the nature of the material.

Reassessment on seized material requires a live and direct nexus with the assessee; vague information and coincidence of some survey numbers do not meet that requirement.

The Court followed Naliniben Jagdishkumar Gandhi [2026 (1) TMI 1326 - GUJARAT HIGH COURT] and found the case indistinguishable from the other decisions arising from the same search.

We find further support in two recent decisions of this Court arising from the very same search. In Trupti Aakash Desai [2026 (4) TMI 921 - GUJARAT HIGH COURT] this Court, dealing with the search at B Safal Group conducted on 28.09.2021 and the very same seized inquiry register, held that the entries therein 'cannot be used in vacuum' and that a live and direct nexus between the seized material and the assessee sought to be reopened is a sine qua non.

In Kantilal Parsotamdas Patel [2026 (4) TMI 1889 - GUJARAT HIGH COURT] this Court, following the aforesaid line of reasoning and dealing with a similar set of facts arising from the same search, quashed the reassessment proceedings.[Paras 9, 10, 11, 12, 13]

The notice under Section 148 was held unsustainable and was quashed.

Final Conclusion: The writ petition was allowed and the reassessment notice for assessment year 2021-22 was quashed. The seized inquiry-register entry, unsupported by a live nexus with the assessee's land transaction, could not validly found reopening.

Reassessment jurisdiction based on objective material - Cash purchases of raw hides and skins - Unverified sundry creditors

Validity of reassessment proceedings concerning sundry creditors for purchases of raw hides and skins, initiated on an audit objection alleging absence of the creditors' PAN and address details - HELD THAT: - Cash purchases of raw hides and skins beyond the prescribed limit were legally permissible, and no statutory requirement mandated maintenance of PAN or address particulars of the sellers. The assessee's books contained the sellers' names and the Mandi from which they operated; their correctness had not been doubted on any objective material or meaningful enquiry. Absence of PAN and addresses could at best create suspicion and could not, without cogent material identifying any non-genuine sundry credit, found reassessment jurisdiction. Permitting reassessment on that basis would amount to a fishing enquiry. [Paras 11, 12, 13, 14, 15]

The satisfaction of escaped income lacked jurisdictional basis; the reassessment proceedings for Assessment Year 2017-18 were quashed.

Final Conclusion: The writ petition was allowed and the reassessment proceedings initiated for Assessment Year 2017-18 were quashed.

Ind AS accounting entries and taxable income under the Act and ICDS - Taxability of EPCG government grants recognised under Ind AS - Capitalisation of borrowing costs under ICDS IX - Cost of acquisition of transferable development rights received in exchange for land - Double disallowance of leave entitlement provision - Business expenditure on gifts-adequate opportunity of hearing - Weighted deduction for approved in-house research and development facility

ICDS adjustments relating to security deposits, royalty income, Government grants and borrowing costs - Ind AS accounting entries and taxable income under the Act and ICDS - Real income - Consistency in tax computation - Taxability of notional income arising from Ind AS recognition of an interest-free security deposit and deferred upfront royalty - HELD THAT: - Book entries under Ind AS are only the starting point for computing taxable income, which must be determined under the Act and applicable ICDS. The security-deposit adjustment merely neutralised notional amortisation and rental-income entries, without any actual accrual of rental income or double deduction. Likewise, royalty recognised in the accounts under Ind AS could not be taxed again when the entire upfront consideration had already been offered to tax in an earlier year. In the absence of any distinguishing facts or statutory change, the Revenue could not depart from the accepted treatment in other assessment years. [Paras 8, 9]

The additions relating to the security-deposit adjustment and royalty income were deleted.

Taxability of EPCG government grants recognised under Ind AS - Actual cost of assets - Consistency in tax computation - Taxability of customs-duty benefits under the EPCG Scheme credited to the accounts pursuant to Ind AS 20 - HELD THAT: - Recognition of the grant in the financial statements under Ind AS 20 does not determine its taxability. Where the Act specifically prescribes the treatment of a subsidy or grant connected with an asset for determination of actual cost, that treatment prevails over accounting presentation. The Revenue neither established independent taxable income nor controverted that the duty benefit was not included in the asset block for depreciation; nor did it show a distinguishing feature warranting departure from the accepted treatment in other years. [Paras 10, 11]

The addition relating to EPCG government-grant benefits was deleted.

Capitalisation of borrowing costs under ICDS IX - Double deduction - Consistency in tax computation - Disallowance of an ICDS IX adjustment arising from the difference between borrowing costs capitalised under Ind AS and those required to be capitalised for tax computation - HELD THAT: - Where ICDS IX prescribes a method of capitalisation different from Ind AS, taxable income must give effect to the ICDS computation. A methodological difference between book capitalisation and tax capitalisation does not by itself establish double deduction, particularly when no material shows that the same borrowing cost was allowed twice. The adjustment was a consequential computation adjustment and not a fresh expenditure claim; the Revenue also showed no basis to depart from the treatment accepted in other years. [Paras 11]

The disallowance of the borrowing-cost adjustment was deleted.

Cost of acquisition of transferable development rights received in exchange for land - Set-off of short-term capital loss - Determination of the cost of transferable development rights received on surrender of land and the consequential short-term capital gain or loss on sale of the balance rights - HELD THAT: - The assessee's claim to cost and the Revenue's objection to set-off were inseparable from determination of the correct cost of the transferable development rights. The assessment records for the earlier year required verification regarding taxation of the gain on surrender of land, the basis of cost attributed to the rights, acceptance of the loss on the first tranche, and the proportionate cost claimed for the balance rights. Until those matters were verified, the consequential set-off could not be finally determined. [Paras 14, 15]

The issue was remanded to the Assessing Officer for fresh determination of the cost, resultant capital gain or loss, and consequential set-off after affording opportunity to the assessee.

Double disallowance of leave entitlement provision - Further disallowance of a provision for leave entitlement allegedly already disallowed in computing taxable income - HELD THAT: - The primary verification was whether the provision had already been added back in the computation of income. If so, a further disallowance could not be made; only if that claim was not established would its allowability require examination under the applicable law. [Paras 16]

The matter was remanded to the Assessing Officer for limited verification and fresh decision.

Business expenditure on gifts - adequate opportunity of hearing - Allowability of expenditure on gifts to employees and customers where the claim had not been conclusively adjudicated and adequate opportunity to substantiate it was lacking - HELD THAT: - As the allowability of the gift expenditure required examination of its nature, purpose, and supporting evidence, and had not been conclusively decided on merits, fresh adjudication was necessary after adequate opportunity to the assessee. [Paras 17]

The gift-expenditure issue was remanded to the Assessing Officer for fresh adjudication, and the corresponding Revenue ground was also allowed for statistical purposes.

Weighted deduction for approved in-house research and development facility - Non-furnishing of Form 3CL by prescribed authority - Eligibility for weighted deduction for an approved in-house research and development facility despite non-furnishing of Form 3CL by the prescribed authority - HELD THAT: - The relevant in-house research and development facility stood approved in Form 3CM. Furnishing Form 3CL was an act required of the prescribed authority, and the assessee could not be denied deduction for that authority's failure, particularly when the assessee had pursued issuance of the form. Following Rallis India Ltd. [2024 (12) TMI 904 - ITAT MUMBAI] the absence of Form 3CL was held not to defeat the claim. [Paras 18]

The weighted deduction claimed for the approved in-house research and development facility was allowed.

Final Conclusion: The assessee's claims concerning ICDS adjustments and weighted research-and-development deduction were allowed. The issues concerning transferable development rights, leave-entitlement provision, and gift expenditure were remanded for fresh adjudication; the Revenue's appeal was allowed only to that limited statistical extent.

Capital gains on transferable development rights received for surrendered land - Ascertainable cost of acquisition in exchange transactions - Scope of scrutiny assessment - Consistency and parity in tax assessments

Capital gains on transferable development rights received for surrendered land - Ascertainable cost of acquisition in exchange transactions - Taxability of consideration from sale of transferable development rights received in exchange for surrender of land, where the assessee claimed that the rights had no ascertainable cost of acquisition - HELD THAT: - The transferable development rights were capital assets acquired by surrendering land and building to the municipal authority. The surrender constituted an exchange, and the land given up represented an identifiable and ascertainable cost for acquiring the rights. The principle that capital gains computation fails where no cost can be conceived was inapplicable, since the computation provisions remained operative by attributing to the rights the cost of the land surrendered. Cases concerning self-generated development rights arising from regulatory entitlement, without surrender of an identified asset, were materially distinguishable. The transaction involved two distinct transfers: surrender of land for rights, and subsequent sale of those rights for cash. [Paras 34, 35, 36, 37, 47]

The sale consideration from the transferable development rights was chargeable under the head Capital gains; however, the Assessing Officer was directed to compute the gain after allowing the cost of acquisition attributable to the land exchanged.

Scope of scrutiny assessment - Competence of the AO to examine the taxability of transferable development rights where the scrutiny notice referred to verification of a refund claim - HELD THAT: - The notice did not state that the return had been selected for limited scrutiny; it only identified the refund claim as the initial matter for verification. It therefore did not restrict the assessment to that matter, and the assessment was open to complete scrutiny. [Paras 38]

The Assessing Officer was competent to examine the chargeability of the consideration received on sale of transferable development rights.

Consistency and parity in tax assessments - No estoppel against statute - Whether non-taxation of similar receipts from transferable development rights in the assessment of the assessee's brother required similar treatment for the assessee? - HELD THAT: - An assessment order in another taxpayer's case, without a conscious and binding acceptance of an identical legal position, does not establish parity or confer a right to identical treatment. Each assessee's income is independently assessable, and an erroneous or insufficiently examined assessment in another case cannot preclude correct application of the Act in the present case. [Paras 43, 44, 45, 46]

The claim for parity with the assessment of the assessee's brother was rejected.

Final Conclusion: The appeal was dismissed. The receipt from sale of transferable development rights remained taxable as capital gains, subject to recomputation after allowance of the cost attributable to the surrendered land.

Admissibility of departmental CRCL test reports over private laboratory reports - self-assessment and transaction value in export duty assessment - artificial splitting of consignments and proof of modus operandi - weight of confessional statements in departmental adjudication - relevance of discharge-port test reports in FOB contracts for assessment - refund of deposit where demand is dropped

HELD THAT:- Delay condoned.

However, we do not find any good ground to entertain the Appeal. Accordingly, the Civil Appeal is dismissed.

Inconclusive expert chemical report insufficient to prove misdeclaration - insufficiency of forensic report - reclassification based on one technical parameter or tentative wording in test report - transaction value under customs valuation - benefit of doubt - denial of opportunity to examine or cross examine the chemical examiner - prejudicial to principles of natural justice - Whether the report is complete and sufficient enough to conclude that the goods are ‘base oil’ and not ‘press distillate oil’.

HELD THAT:- Learned counsel for the appellant fairly states that M/S JJR ASSOCIATES [2023 (9) TMI 1398 - SC ORDER] which was preferred against the order relied upon by the Customs, Excise & Service Tax Appellate Tribunal in the impugned order has been dismissed vide order dated 18th September, 2023.

In such view of the matter, the civil appeals are dismissed.

Re-import exemption -petroleum-operation equipment moved through FTWZ - entitlement to exemption under Serial No. 5 of Notification No. 45/2017-Customs dated 30.06.2017 -Scope of statutory fiction - Conditional customs exemption

Eligibility of petroleum-operation equipment, moved from DTA to FTWZ after completion of the original contract and cleared back to DTA against a fresh essentiality certificate, for the residuary re-import exemption under Serial No. 5 of Notification No. 45/2017-Cus - HELD THAT: - The concession under Notification No. 50/2017-Cus. was conditional upon certified use for the specified petroleum operation and did not confer an unrestricted entitlement to retain and successively deploy the equipment for unrelated domestic contracts. Notification No. 50/2017-Cus. itself provided an express mechanism for transfer to another specified person for an eligible operation; the FTWZ route could not be employed to obtain an additional fiscal benefit.

SEZ statutory fiction is confined to its intended purpose and cannot manufacture a re-import exemption under Notification No. 45/2017-Cus. The return from FTWZ was occasioned by a new domestic contract and fresh essentiality certificate, not by reversal or restoration of the original outward movement. Identity of the equipment alone did not establish the continuity necessary for re-import. The same inward movement could not simultaneously be characterised as an import for the petroleum-operation concession and as a re-import for a separate exemption. [Paras 63, 65, 66, 67, 68]

Clearance of the equipment from FTWZ to DTA pursuant to a subsequent essentiality certificate constitutes a fresh import, not a re-import under Serial No. 5 of Notification No. 45/2017-Cus.; the claimed exemption was therefore unavailable.

Final Conclusion: The appeals were dismissed. The proposed FTWZ-to-DTA movement pursuant to a fresh essentiality certificate was held to be a fresh import, and not eligible for the residuary re-import exemption.

Customs Broker licence revocation - Parity with unchallenged co-ordinate Tribunal order

Sustainability of the setting aside of revocation of a Customs Broker licence for alleged contravention of the Customs Broker Licensing Regulations, 2018, where an analogous Tribunal order concerning the same exporter had been accepted by the Department - HELD THAT: - The Tribunal had applied its earlier decision concerning another Customs Broker JOHN K MATHEW BEEJAY CLEARING AND FORWARDING AGENCY [2024 (8) TMI 410 - CESTAT MUMBAI] and the same exporter, holding that the alleged contraventions were not established. The Revenue failed to demonstrate any material factual distinction between the two matters and admitted that it had not challenged, and had accepted, the earlier Tribunal order. Consequently, no substantial question of law arose from the Tribunal's order. [Paras 6]

The Tribunal's order setting aside revocation of the Customs Broker licence was upheld and the Revenue's appeal was dismissed.

Final Conclusion: The appeal was dismissed as the Revenue showed no material distinction from the analogous Tribunal decision which it had accepted, and no substantial question of law arose.

Customs Broker licence proceedings - factual foundation of procedural prejudice - Setting aside of the order in Customs Broker licence proceedings on grounds of delay in inquiry and identity of investigating and inquiry officers - HELD THAT: - The Tribunal's findings of inordinate delay and breach of natural justice rested on factually incorrect premises. The show cause notice was issued on 3rd October 2023 and the inquiry report was submitted on 26th December 2023; further, the investigating officer and the inquiry officer were different officers. The Tribunal had not examined the alleged breaches of the Customs Broker's obligations on merits. [Paras 4, 5, 6]

The Tribunal's order was set aside and the appeal was remanded to the Tribunal for an independent decision on merits regarding the alleged violations of the Customs Brokers Licensing Regulations, 2018. The restored licence may be used for carrying on business pending that decision.

Final Conclusion: The Revenue's appeal was allowed and the matter was remanded for adjudication on merits. No opinion was expressed on the alleged regulatory violations.

Recovery of excess drawback following self-assessment - Reassessment before recovery of drawback

Recovery of drawback paid on self-assessed export shipping bills, where handicrafts/artistic wooden furniture had been wrongly classified under furniture entries instead of the entry for handicrafts/artware of wood, without first reassessing the self-assessment - HELD THAT: - Though the exported goods were misclassified and the self-assessment resulted in payment of excess drawback, the payment continued to be one made pursuant to a subsisting self-assessment. Where misclassification is subsequently detected, the proper officer must have recourse to reassessment u/s 17(4), or to the procedure under Section 18 where applicable, to crystallise the liability. Recovery under Section 75A(2) cannot be directly initiated before such reassessment and determination. [Paras 14, 15, 16, 17]

The recovery proceedings and the consequential revisional and appellate orders were set aside as founded on a misapplication of law; the respondents were left at liberty to proceed under Sections 17 and 18, if permissible in law.

Final Conclusion: The writ petitions were allowed and the impugned orders were set aside. The respondents may pursue reassessment or other action under Sections 17 and 18 of the Customs Act, 1962, if law permits.

Duty-free import under fraudulently obtained DFIA licences - Due diligence by transferee licence holders - Penalty for utilisation of fraudulent export incentive licences

Liability of a transferee importer for customs duty and penalty upon utilisation of DFIA licences procured through fake exports - HELD THAT: - Tribunal held that the said controversy stood concluded by the earlier Larger Bench/Coordinate Bench decision in Mercedes Benz India Pvt. Ltd. [2020 (2) TMI 437 - CESTAT NEW DELHI] which held that the importers purchasing transferable licences cannot escape liability, verification from DGFT website alone is insufficient, importers must verify the TRA and documents, absence of due diligence renders them liable for duty, interest and penalty.

The licences used for duty-free imports had originated from fabricated exports. A transferee importer cannot avoid liability merely by asserting purchase through intermediaries; it must independently verify the authenticity of the licences, underlying export documents and relevant release advice. The appellant made no verification from the licensing or Customs authorities and undertook no enquiry regarding the genuineness of the exports or the issuing exporter. In the identical fraudulent-licence scheme, the prior Tribunal decisions required such due diligence, and their ratio was held applicable. [Paras 6, 8]

The duty demand was sustainable and, consequently, the penalty was also sustainable.

Final Conclusion: The impugned order confirming customs duty and penalty was upheld, and the appeal was dismissed.

Provisional assessment and recovery of short-levied duty - Redemption fine on exported goods unavailable for confiscation

Provisional assessment and recovery of short-levied duty - Recovery proceedings for export duty on rice cleared against bonds pending test reports, initiated before finalisation of provisional assessments - HELD THAT: - The bonds were expressly executed under Section 18 and obliged the exporters to pay duty finally assessed upon an adverse test report. The exports were therefore cleared on provisional assessment, not by provisional release or reassessment. A provisional assessment had to be finalised within the prescribed process before recovery proceedings for non-levy or short levy could be initiated; as no final assessment had been made, the show cause notices were premature and unsustainable. [Paras 7]

The duty-demand proceedings initiated before finalisation of the provisional assessments were set aside.

Redemption fine on exported goods unavailable for confiscation - Imposition of redemption fine and penalties in respect of rice already exported after provisional clearance under bonds - HELD THAT: - The impugned goods were never seized under Section 110 of the Customs Act, 1962, nor were they provisionally released as claimed by the department. Rather, the goods were allowed to be exported upon the execution of bonds under Section 18 of the Act. Since the goods have already been exported and are unavailable for confiscation, a redemption fine under Section 125 of the Customs Act, 1962, cannot be legally sustained. This position is well-supported by the judgment of Punjab & Haryana in the case of CC, Amritsar vs. M/s Raja Impex (P) Ltd [2008 (4) TMI 320 - HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH]. [Paras 9]

The redemption fine and penalties were set aside.

Final Conclusion: The impugned orders were set aside and all the appeals were allowed with consequential relief in accordance with law. The Tribunal left the merits of the rice classification open.

Post-export conversion of shipping bills from Advance Authorisation to duty drawback - Validity of limitation under Circular No. 36/2010-Cus -Prospective application of post-export conversion notification

Conversion of shipping bills for exports initially declared under the Advance Authorisation Scheme to the duty drawback scheme denied solely because the request was made beyond three months from the Let Export Order - HELD THAT: - The three-month limitation prescribed by Circular No. 36/2010-Cus. was ultra vires Section 149 of the Customs Act, 1962, as held in Union of India Vs. Mahalaxmi Rubtech Ltd. [2023 (4) TMI 1272 - SC ORDER] The decisions in M/s Suzlon Energy Limited [2013 (3) TMI 506 - MADRAS HIGH COURT] and Anil Sharma Versus Union of India [2017 (2) TMI 50 - GUJARAT HIGH COURT] relied upon by the Department, no longer represented the governing legal position. Once export had taken place, the consequential export benefit could not be refused merely on the circular-based limitation. [Paras 4]

The appellant was entitled to post-export conversion of the shipping bills and consequential duty drawback benefit.

Prospective application of post-export conversion notification - Notification No. 11/2022-Cus. (N.T.), prescribing a time limit for post-export conversion of shipping bills in specified cases applicable to the exports in question or not? - HELD THAT: - The notification could not be applied retrospectively to exports made between October, 2019 and January, 2022. [Paras 4]

The notification did not govern the appellant's request for conversion.

Final Conclusion: The appeal was allowed. The appellant's shipping bills were held eligible for conversion from the Advance Authorisation Scheme to the duty drawback scheme, without denial based on the circular-prescribed limitation or the subsequent notification.

EPCG duty exemption - fulfilment of export obligation - Confiscation and penalty for non-fulfilment of EPCG export obligation - Strict interpretation of exemption notification -

Recovery of customs duty and interest on imported embroidery machines where the export obligation under the EPCG exemption was not fulfilled - HELD THAT: - The concessional import was expressly conditional upon fulfilment of the stipulated export obligation, and failure attracted payment of the duty saved with interest. Although the machinery was damaged in floods, the appellants produced no waiver of export obligation from the competent Committee or the DGFT authorities. The exemption notification had therefore to be strictly construed, and the appellants had not established compliance with its conditions.

The decision in Rajdarbar Heritage Ventures Limited [2026 (6) TMI 120 - CESTAT NEW DELHI] was distinguishable, since that case involved partial fulfilment of export obligation and interest was not demanded under Section 28AA. [Paras 5]

The demand of duty saved under the EPCG scheme, together with interest, was upheld.

Confiscation of EPCG capital goods - Penalty for non-fulfilment of export obligation - Confiscation, redemption fine and penalty in respect of EPCG-imported embroidery machines damaged in floods and incapable of fulfilling export obligation - HELD THAT: - The imported machinery had been installed, but was submerged and damaged beyond repair in unprecedented floods. In the circumstances recorded, while the statutory liability to pay the duty saved and interest remained enforceable for non-fulfilment of export obligation, confiscation of the machinery and consequential penal consequences were not sustained.

Failure to fulfil specified export obligation would require payment of duty so saved along with interest. We rely on the decision of Dilip Kumar & Co [2018 (7) TMI 1826 - SUPREME COURT (LB)] wherein held that exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. Similar findings was given in the case of Favourite Industries [2012 (4) TMI 65 - SUPREME COURT] Therefore, we uphold duty demand and the interest liability on the appellants and set aside confiscation of imported machinery under Section 111(o), redemption fine and the penalty imposed on the appellant(s) under Section 112(a) of the Customs Act, 1962. The impugned orders are modified to the above extent.[Paras 5]

Confiscation under Section 111(o), redemption fine and penalties under Section 112(a) were set aside.

Final Conclusion: The appeals were partly allowed. The duty demand and interest liability were sustained, while confiscation of the imported machinery, redemption fine and penalties were set aside.

Provisional release of seized imported goods - Reasonableness of bank guarantee condition

Conditions for provisional release of imported printing machinery pending investigation into liability to anti-dumping duty - HELD THAT: - The purpose of provisional release is to safeguard revenue pending adjudication while enabling the importer to deal with the goods rather than leaving them under seizure. A bank guarantee equivalent to approximately 80% of the value of the goods was held onerous in the circumstances. [Paras 4]

The goods were directed to be released upon execution of a bond for their full value and furnishing of a bank guarantee for 30% of the differential duty, in a time-bound manner.

Final Conclusion: The provisional-release condition was modified as excessive. Release was ordered against a full-value bond and bank guarantee for 30% of the differential duty.

Customs Broker authorisation from importers - Customs Broker's duty to advise clients - KYC verification by Customs Broker - First Check Bills of Entry and Customs Broker liability

Customs Broker authorisation from importers - Violation of the requirement to obtain authorisation from importers for acting as Customs Broker - HELD THAT: - Regulation 10(a) requires the Customs Broker to obtain proper authorisation from its clients, but does not mandate that the authorisation must be received directly from the importer in every case. As authorisation letters from the concerned importers were available on record, the alleged violation was not established. [Paras 6]

The charge of violation of Regulation 10(a) was held unsustainable.

Customs Broker's duty to advise clients - First Check Bills of Entry and Customs Broker liability - Violation of the duty to advise importers to comply with customs law in respect of imports cleared after First Check assessment and examination - HELD THAT: - There was no evidence that the Customs Broker had failed to advise its clients to comply with the applicable law. The goods were examined under First Check Bills of Entry, including physical examination and valuation by government-approved valuers. Tribunal held that, in those circumstances, the Customs Broker could not be faulted for failure to advise the importers or for the subsequently detected inferior quality or overvaluation of the imported stones. [Paras 6, 8]

The charge of violation of Regulation 10(d) was not proved.

KYC verification by Customs Broker - Verification of importer's declared business address - Violation of KYC verification obligations on the ground that certain importers were subsequently found non-existent at their declared addresses - HELD THAT: - Having obtained IEC, GSTIN, PAN and other KYC documents issued by competent authorities, the Customs Broker had complied with Regulation 10(n). The Regulation did not require it to independently verify every document or physically verify the importers' existence and functioning at the registered premises. Subsequent field verification showing that certain importers were unavailable at their declared addresses could not, without more, establish breach by the Customs Broker. [Paras 6]

The charge of violation of Regulation 10(n) was held not established.

Final Conclusion: The alleged breaches of Regulations 10(a), 10(d) and 10(n) of the Customs Broker Licensing Regulations, 2018 were not established. The revocation of the Customs Broker licence and forfeiture of the security deposit were set aside, and the appeal was allowed with consequential relief in accordance with law.

Forfeiture of earnest money in e-auction - Failure to consider statutory requirements for contractual forfeiture

Whether the forfeiture of 25% of the successful bid amount, including the claim for refund, required fresh determination under Section 74 of the Indian Contract Act, 1872? - HELD THAT: - The question whether the conditions for forfeiture under Section 74 of the Indian Contract Act, 1872, including the necessity and quantum of loss, had not been canvassed before the Company Judge and was consequently not considered. Further, the e-auction provisions concerning whether the forfeitable amount was to be reckoned as 25% or 10% also required examination. The Court therefore declined to record findings on the merits. [Paras 19, 20, 21, 22, 24]

The impugned order was set aside to the extent of the claim for refund, and that issue was remitted to the Company Judge for fresh decision after permitting completion of pleadings; merits were left open.

Final Conclusion: The appeal was partly allowed by setting aside the order only insofar as it rejected the claim for refund. The matter was remitted for fresh consideration without any expression on the merits of the forfeiture.

Right to information - information held by or under control of public authority - Information relating to private bodies under regulatory powers - statutory access and preconditions

Whether a public authority is obliged under the Right to Information Act, 2005 to obtain information from a private body and furnish it to an applicant? - HELD THAT: - The right to information extends to information held by or under the control of the public authority when the request is made. Although information concerning a private body may fall within the definition of information where it can be accessed under another law, the conditions and restrictions governing such access continue to apply. The Act does not require a public authority to collect or collate information not available in its records merely because it possesses regulatory power to call for such information from a private body.

Although the applicants under the RTI Act, who are respondents in these petitions, despite service of notice, have not appeared to contest these petitions, we find that since the position of law is clarified by the Constitution Bench of the Supreme Court in the aforementioned judgement in the case of CPIO vs. Subhash Chandra Agarwal [2019 (11) TMI 895 - SUPREME COURT] the writ petitions deserve to be allowed and the orders impugned in these writ petitions deserve to be quashed and set aside.[Paras 14, 16, 21, 23]

The directions requiring SEBI to obtain information from BSE and supply it to RTI applicants were unsustainable and were quashed.

Final Conclusion: All the writ petitions were allowed and the impugned CIC orders were quashed and set aside.

Interim suspension of securities-market debarment - Preferential issue of fully convertible warrants - Shareholder-approved capital infusion

Interim suspension of securities-market debarment - Whether interim relief should be granted against the securities-market debarment to enable completion of the approved preferential issue of fully convertible warrants and limited mutual-fund transactions? -HELD THAT: - The Tribunal noted that the proposed investment had been approved by the non-promoter public shareholders, who constituted the predominant shareholding, and that no legal bar to the investment, apart from the impugned debarment direction, was identified. As SEBI accepted that the investment could be made after expiry of the debarment period, the Tribunal held that postponing the shareholder-approved capital infusion lacked logic and that the warrant issue would benefit the public shareholders. The merits of the remaining challenges were kept open for final hearing. [Paras 13, 14]

The debarment direction was stayed to the limited extent necessary to permit completion of the preferential warrant issue, subject to both appellants depositing the full penalty within one week; the debarment otherwise continued, and the time for issuance was extended by one week.

Use of mutual funds for ordinary-course business requirements - Interim access by the company to mutual funds during securities-market debarment - HELD THAT: - The Tribunal permitted mutual-fund transactions only for the company's day-to-day requirements in the ordinary course of business, while excluding their use for any other purpose, including payment of the proposed dividend.

The company was permitted to undertake mutual-fund transactions solely for ordinary-course business requirements and not for payment of the proposed dividend or any other purpose.

Final Conclusion: The interim applications were partly allowed. The appellants were permitted, subject to deposit of the full penalty, to complete the preferential warrant issue and the company could use mutual funds only for ordinary-course business requirements; the debarment otherwise remained in force pending further orders.

Alternative remedy under the Insolvency and Bankruptcy Code - Appellate remedy against orders of the Adjudicating Authority

Maintainability of a writ petition challenging an order passed by the National Company Law Tribunal during liquidation proceedings under the Insolvency and Bankruptcy Code, 2016, despite the statutory appellate remedy - HELD THAT: - Though the constitutional powers under Articles 226 and 227 cannot be curtailed by statute, judicial discipline requires that an order passed under a statutory regime be challenged through the remedy provided by that regime.

Section 61 confers, in broad terms, a right of appeal upon any person aggrieved by an order of the Adjudicating Authority under Part II of the Code, without limiting the nature of the order appealable. The High Court ought therefore to have refrained from entertaining the writ petition when the aggrieved persons could pursue that appellate remedy.

Orders passed in proceedings under the Insolvency and Bankruptcy Code, 2016 (‘Code’) must be challenged within the framework of the Code and not through a writ petition as has been held by this Court in Committee of Creditors of KSK Mahanadi Power Company Ltd. v. Uttar Pradesh Power Corporation Ltd. [2024 (10) TMI 1624 - SUPREME COURT] and Mohammed Enterprises (Tanzania) Ltd. v. Farooq Ali Khan [2025 (1) TMI 354 - SUPREME COURT]. [Paras 6, 7]

The High Court's order was set aside and the writ petition was dismissed on the ground of alternative remedy, with liberty to the writ petitioners to pursue the appropriate remedy under the Code. If an appeal is filed before the National Company Law Appellate Tribunal within the stipulated period with an application under Section 14 of the Limitation Act, 1963, exclusion of the period spent before the High Court and this Court shall be considered in accordance with law.

Final Conclusion: The appeal was allowed. The writ petition challenging the NCLT order was dismissed for availability of the statutory appellate remedy under the Code, subject to the stated liberty concerning exclusion of time under the Limitation Act.

Admission of corporate insolvency resolution process on proof of default - Record of default from information utility

Admission of the corporate insolvency resolution process on the basis of the information utility record and other material, despite objection to reliance on photocopies of loan documents - HELD THAT: - For admission of an application by a financial creditor, the adjudicating authority is required to ascertain the existence of default from information utility records or other evidence furnished. The undisputed record of default filed with NeSL, together with the material showing that the corporate debtor had availed the loans and had not challenged the pleaded default date, established default. The objection concerning photocopies of documents therefore did not vitiate the admission order. [Paras 4, 5, 6, 8]

The challenge to the admission of the corporate insolvency resolution process was rejected and the writ petition was dismissed.

Final Conclusion: The High Court found no infirmity in the order admitting the financial creditor's application for corporate insolvency resolution process and dismissed the writ petition without costs.

Alternative statutory remedy against disciplinary committee order - Maintainability of writ petition

Maintainability of the writ petition challenging the disciplinary committee's disposal of a show-cause notice under the Insolvency and Bankruptcy Code - HELD THAT: - Though the impugned order did not finally determine the consequences of the alleged misconduct, it was passed by the disciplinary committee upon the show-cause notice and expressly in exercise of its jurisdiction under Section 220(2) of the Code. It consequently fell within the appellate remedy newly provided by Section 220(7), which permits an appeal to the National Company Law Appellate Tribunal against orders under Section 220(2) to (5). An efficacious statutory remedy being available, writ jurisdiction ought not to be invoked in the first instance. [Paras 9, 10, 11, 12]

The writ petition was dismissed without examination of the merits, leaving the petitioner to pursue the statutory appeal; the appellate tribunal may consider the pendency of the writ petition while examining delay, if any.

Final Conclusion: The petition was dismissed on the ground of the available statutory appellate remedy before the National Company Law Appellate Tribunal, without any opinion on the merits of the disciplinary controversy.

Restoration of petition dismissed for default - Inherent powers to condone delay - Litigant not to suffer for counsel's default

Restoration of a company petition dismissed for want of prosecution where the restoration application was filed beyond thirty days and the counsel's non-appearance resulted from a bona fide misunderstanding regarding the sitting time - HELD THAT: - Rule 48(2) prescribes thirty days for seeking restoration but does not impose an absolute bar against an application made thereafter. The delay provision must be read rationally and harmoniously with the Tribunal's inherent power under Rule 11 to secure the ends of justice.

The unrebutted explanation that counsel could not appear because of a misunderstanding caused by preponement of the sitting constituted a bona fide contingency; the litigant could not be prejudiced for counsel's default. Further, where a supporting delay-condonation application had been filed but was not placed before the Tribunal, limitation alone could not justify rejection of restoration. [Paras 6, 7, 8, 9]

The impugned order was quashed; the restoration application was allowed and the company petition was restored to its original number for decision on merits.

Final Conclusion: The appeal was disposed of by allowing restoration of the company petition dismissed for want of prosecution, subject to its determination on merits.

Business Auxiliary Service - referral charges for motor vehicle loans and insurance - Pre-notice payment of service tax - penalty

Business Auxiliary Service - referral charges for motor vehicle loans and insurance - Taxability of referral charges received by an automobile dealer from banks and an insurer for customers availing vehicle loans and insurance policies. - HELD THAT: - The agreements disclosed that the appellant promoted the banking and insurance business by informing dealers, service centres and vehicle purchasers about available financial facilities and lending arrangements. The referral charges were therefore consideration for promoting and marketing the services of banks and the insurance company, and constituted Business Auxiliary Service. [Paras 4, 5]

The referral charges were held taxable as Business Auxiliary Service.

Pre-notice payment of service tax - penalty - Liability to penalty where service tax on referral charges had been paid before issuance of the show-cause notice. - HELD THAT: - Section 73(3) requires the Department to refrain from issuing notice where a short levy or short payment is made good before notice. In view of the uncertainty regarding taxability and the payment of the entire liability before notice, penalty was not warranted, irrespective of whether notice could have been issued within the extended period. [Paras 6]

The penalty under Section 78 was set aside; the Tribunal's deletion of penalty under Section 76 remained undisturbed.

Final Conclusion: The appeal was partly allowed. While the referral charges were held taxable as Business Auxiliary Service, the penalty under Section 78 was set aside because the tax liability had been discharged before issuance of notice.

Liability to pay service tax on fees charged under "Standard & Labelling" and "Processing Fee" as falling within “Technical Inspection and Certification Service” under Section 65(108) read with Section 65(105)(zzi) of the Finance Act, 1994 - appellant fairly states that the decision which has been relied upon by Custom Excise Service Tax Appellate Tribunal [2025 (9) TMI 1752 - CESTAT NEW DELHI] while passing the impugned order has not been subjected to challenge and therefore, the same has attained finality.

HELD THAT:- In such view of the matter, the appeal is dismissed.

Service tax as ‘intermediary services’ - Service between branch office and head office - Place of provision of services

Taxability of loan origination, credit assessment, structuring, disbursement and loan-management activities performed by the Indian bank office for its Singapore head office as intermediary services - HELD THAT: - The Indian office and the Singapore head office were held to be the same legal person; consequently, activities between them could not be treated as services rendered by one person to another. Independently, the activities did not satisfy the requirements of intermediary services: there was no arrangement involving three distinct parties, no identifiable main and ancillary supplies, and the remuneration was independently determined rather than linked to the lending service supplied by the Singapore office to borrowers. The Indian office performed the principal functions on its own account, while the Singapore head office alone entered into and finally decided the external commercial borrowing arrangements. See M/S CHEVRON PHILLIPS CHEMICALS INDIA PVT. LTD. [2024 (2) TMI 21 - SC ORDER][Paras 8, 9, 10]

The activities were not intermediary services and were not liable to service tax; the consequential demand and penalties were unsustainable.

Final Conclusion: The impugned order was set aside and the appeal was allowed. The service tax demand and penalties on the disputed activities were held unsustainable.

Classification of excavation and site-preparation contracts - Service tax liability of sub-contractors - Extended limitation for interpretational service-tax disputes

Classification of excavation and site-preparation contracts - Site Formation and Clearance Service - Works Contract Service - The excavation, loading, transportation, filling, dozing, compaction and allied site-preparation activities executed at the integrated steel plant were classifiable as Site Formation and Clearance Service and not as Works Contract Service - HELD THAT: - The adjudicating authority had examined the contractual documents and found excavation in soil and rock filling to be the dominant element of the composite contract. The Tribunal found no merit in the claim that the activities constituted Works Contract Service. [Paras 8]

The classification under Site Formation and Clearance Service was sustained.

Service tax liability of sub-contractors - sub-contractor providing taxable services to a main contractor remained liable to service tax notwithstanding payment of tax by the main contractor on the contract value - HELD THAT: - The Tribunal held that the question stood settled by the Larger Bench decision in CST, New Delhi Vs Melange Developers Pvt Ltd [2019 (6) TMI 518 - CESTAT NEW DELHI-LB] Payment of service tax by the main contractor did not extinguish the sub-contractor's independent liability, though the main contractor could avail credit of the tax paid by the sub-contractor. [Paras 9]

The plea that the appellant, as sub-contractor, was not liable to tax was rejected.

Extended limitation for interpretational service-tax disputes - Wilful suppression - Whether extended period could not be invoked for the service-tax demand against the sub-contractor where the liability arose from the Board's 2007 circular and the dispute was interpretational? - HELD THAT: - The Tribunal applied its earlier decisions holding that uncertainty regarding a sub-contractor's liability before and around the clarification issued in 2007 made the matter one of interpretation. In the absence of cogent evidence of wilful suppression or deliberate misstatement, the extended period was unavailable. [Paras 10, 11]

Although the demand was sustainable on merits, it was set aside in its entirety as time-barred.

Final Conclusion: The appeal was allowed. While the service classification and the appellant's liability as a sub-contractor were upheld on merits, the demand was set aside as barred by limitation.

Cenvat credit on input-service invoices issued to head office - Input Service Distributor registration as procedural irregularity

Availability of Cenvat credit to a unit on input-service invoices issued in the name of its head office where the head office was not registered as an Input Service Distributor - HELD THAT: - Following Samita Conductors Ltd. [2012 (11) TMI 432 - CESTAT, AHMEDABAD] and Doshion Ltd. [2012 (10) TMI 952 - CESTAT AHMEDABAD] the Tribunal held that absence of Input Service Distributor registration could not, in the circumstances, defeat credit on services received. The omission to obtain such registration was treated as a procedural irregularity. [Paras 9]

The demand based on denial of Cenvat credit was set aside and the appeal was allowed with consequential relief in accordance with law.

Final Conclusion: The impugned order denying Cenvat credit was set aside, and the appeal was allowed with consequential relief in accordance with law.

CENVAT credit on fly ash transportation services - Input service nexus with manufacture of dutiable final products

Admissibility of CENVAT credit of service tax paid on transportation of fly ash generated in the captive thermal power plant to the ash pond - HELD THAT: - We find that the issue is squarely covered M/s. Shyam Metalics & Energy Limited [2023 (1) TMI 737 - CESTAT KOLKATA] wherein it has been held that the appellant would eligible for the Cenvat Credit for the Service Tax paid by them on account of Fly Ash movement.

On an identical issue, the Banglore Bench in the case of ACC Ltd [2026 (8) TMI 94 - CESTAT BANGALORE] wherein held 'Just extraction of the fly ash generated In the Thermal Power Plant cannot be said to be "manufacture of fly ash" by the appellant. Fly ash has been manufactured by the Thermal Power Plant not by the appellant. The Department's stand is absurd, therefore, Rule 6(1) of the Cenvat Credit Rules, 2004 is not applicable at all. Since the services, in question, have been availed for erection, installation & commissioning, repairing and maintenance and insurance of the fly ash extraction plant installed by the appellant at the Thermal Power Plant, these services have to be treated as the services in or in relation to the manufacture of the cement by the appellant and would be eligible for Cenvat credit. In view of this, the impugned order is not sustainable' [Paras 4, 5, 6]

The impugned order was set aside and the appeal was allowed with consequential relief in accordance with law.

Final Conclusion: The appeal was allowed, the impugned order was set aside, and consequential relief was granted in accordance with law.

CENVAT credit on duty-paid inputs - Recipient's obligation to verify supplier's duty assessment - Extended limitation-suppression of facts

CENVAT credit on duty-paid Fuel Oil - Recipient's obligation to verify supplier's duty assessment - Eligibility to CENVAT credit on Fuel Oil received and used in manufacture where the Department disputed whether the supplier's activity amounted to manufacture. - HELD THAT: - The receipt and use of the Fuel Oil in the appellant's manufacturing activity were undisputed. A recipient availing credit is required to ensure that duty has been paid and that the inputs have been received, accounted for and properly used; it is not required to undertake the supplier's assessment or determine whether duty was payable on the supplier's activity. The duty paid by the supplier could not therefore be questioned at the recipient's end. [Paras 6, 7]

The denial of CENVAT credit and the consequential demand were set aside.

Extended limitation-suppression of facts - Disclosure in ER-1 returns - Invocation of the extended period for recovery of CENVAT credit disclosed in ER-1 returns. - HELD THAT: - Since the CENVAT credit had been taken and disclosed in the ER-1 returns, no suppression of facts by the appellant was established. [Paras 8]

The confirmed demand was independently set aside as time-barred.

Final Conclusion: The appeal was allowed, the impugned order and confirmed demand were set aside, and consequential relief was held admissible in accordance with law.

Statutory interest on delayed tax refund - Entitlement to statutory interest on refund under the Telangana Value Added Tax Rules, 2005 after release of the principal refund amount - HELD THAT: - As the principal refund had been cleared, the date of its release enabled the Department to quantify the statutory interest payable on account of delay. [Paras 4, 5]

The Commercial Tax Department was directed to quantify and release the statutory interest on the delayed refund within two months; the petitioner was permitted to submit a separate application or representation for that claim.

Final Conclusion: The writ petition was disposed of after redressal of the claim for principal refund, with a direction for quantification and release of statutory interest on the delayed refund.

Personal insolvency moratorium and cheque dishonour prosecution - Vicarious criminal liability of company directors - Precedential effect of a reference to a larger Bench

Applicability of the interim moratorium under Section 96 of the IBC to prosecution of directors and persons in charge under Sections 138 and 141 of the Negotiable Instruments Act for dishonour of cheques issued by the company towards its own debt - HELD THAT: - The debt underlying the dishonoured cheques remained the debt of the corporate entity, which has an independent juristic existence; the directors were arraigned by virtue of the statutory vicarious liability under Section 141 and not as primary personal debtors.

The interim moratorium under Section 96 operates in respect of debts of the person by or against whom the personal insolvency process is initiated and is intended to postpone civil debt-recovery actions, not criminal prosecution. The criminal aspect of a cheque-dishonour prosecution, including the directors' personal criminal liability, is consequently not interdicted by the moratorium. Any question concerning recovery of compensation, if ordered, arises only at the appropriate subsequent stage and affords no basis to stay the trial. [Paras 90, 91, 92, 93, 94]

The applications seeking stay of the cheque-dishonour prosecutions were rejected; the trials against the directors and responsible persons may continue notwithstanding the interim moratorium.

Precedential effect of a reference to a larger Bench - Whether the trials should be deferred pending the larger Bench's determination of questions referred concerning the compensatory aspect of cheque-dishonour proceedings? - HELD THAT: - A reference to a larger Bench does not dilute the binding force of existing decisions unless they are modified or altered, and a High Court cannot decline to apply the law as it stands merely because a reference is pending. The referred decision itself maintained that the criminal aspect of proceedings under Section 138 is unaffected by the personal insolvency moratorium. In view of the advanced stage and prolonged pendency of the complaints, no case for staying the trials pending the reference was made out. [Paras 85, 86, 88, 93, 94]

The request to defer or stay the trials until disposal of the larger Bench reference was rejected.

Final Conclusion: The applications and writ petitions were dismissed. The interim orders were vacated, and the request to continue the stay of the cheque-dishonour trials was rejected.

Inherent jurisdiction to quash cheque dishonour proceedings - Consolidated complaint for dishonour of multiple cheques - Statutory presumption of legally enforceable debt

Inherent jurisdiction to quash cheque dishonour proceedings - Disputed questions of fact at advanced stage of trial - Quashing of cheque dishonour complaints at the stage when the complainant's evidence was complete and defence evidence had substantially commenced - HELD THAT: - Once the complaints prima facie disclosed the ingredients of the offence, the questions whether the cheques were security cheques, whether a legally enforceable debt existed, whether notice was actually served, and the effect of a settlement were disputed factual matters for determination by the trial court. The inherent power cannot be employed to conduct a mini-trial or to short-circuit proceedings at such an advanced stage, particularly when the statutory presumption under section 139 remains to be tested on evidence. [Paras 17, 18, 23, 25, 26]

The cognizance orders and the complaints were not liable to be quashed; the trial court was directed to conclude the trials expeditiously.

Consolidated complaint for dishonour of multiple cheques - Consolidated demand notice - Maintainability of two complaints arising from ten dishonoured cheques issued in one transaction, where two demand notices were issued - HELD THAT: - Separate complaints founded on the two demand notices were maintainable. A single complaint concerning dishonour of more than three cheques is maintainable where a consolidated demand notice is served upon the accused; the fact that all the cheques arose from the same transaction did not preclude the two complaints. [Paras 20]

The objection to the maintainability of the complaints was rejected.

Income-tax compliance and legally enforceable debt - Presumption under section 139 of the Negotiable Instruments Act - Effect of alleged non-reflection of the underlying transaction in the complainant's income-tax returns on the statutory presumption and enforceability of the debt in cheque dishonour proceedings - HELD THAT: - Mere non-reflection of the transaction in income-tax returns does not, by itself, displace the presumption under section 139 of the Negotiable Instruments Act. A breach of the provision governing acceptance of specified sums under the Income-tax Act attracts the prescribed penalty but does not render the transaction unenforceable under section 138 or rebut the presumptions under sections 118 and 139; the provision concerning appointment of a competent authority for acquisition of undervalued immovable property was irrelevant. [Paras 21, 22]

The challenge founded on the alleged income-tax violation was rejected.

Final Conclusion: The petitions seeking quashing of the cheque dishonour complaints were dismissed. The trial court was directed to complete the remaining evidence through day-to-day proceedings and dispose of both complaints expeditiously.