TaxTMI Updates e-Newsletter
Aug 22,2026

Characterization of telecommunication towers as immovable property falling within the ambit of Section 17 (5) of the CGST Act - illegible for input tax credit - assertion of the writ petitioners is that telecommunication towers are moveable items of essential equipment used in telecommunications which can be dismantled at site and thus capable of being moved - it was held by High Court [2024 (12) TMI 998 - DELHI HIGH COURT] telecommunication towers are movable goods and not immovable property for the purposes of Section 17(5) CGST Act; consequently the impugned Order in Original and its appellate affirmation, and the challenged Show Cause Notices are quashed as confirmed by SC[2025 (8) TMI 707 - SC ORDER]

HELD THAT:- We are of the considered opinion that there is no error apparent on the face of the record, in the order impugned, that would justify its reconsideration.

Consequently, we find no merit in the review petition(s).

Correctness and validity of SCN rendered u/s 74 of the Central Goods & Service Tax Act, 2017 - assignment of lease hold rights by the petitioner - supply of service under Section 7(1)(a) of the Act and classified under Heading 9972 of Tariff Code or not -

HELD THAT:- The Special Leave Petitions were dismissed in view of dismissal of a similar Special Leave Petition [2026 (5) TMI 1509 - SC ORDER]

Entitlement to bail in view of his criminal antecedents - petitioner is habitual offender - absence of a posted Special Judge had delayed framing of charges - HELD THAT:- As keeping in view the criminal antecedents of the petitioner, is of the opinion that, at present, the petitioner is not entitled to grant of bail. So far as framing of charges is concerned, Hon’ble the Chief Justice of the Rajasthan High Court is requested to post a Special Judge as soon as possible so that the trial is expedited and framing of charges takes place.

At this stage, this Court does not find any reason to allow the bail petition. The petitioner, who is on interim bail, is granted two weeks’ time to surrender before the concerned Court.

Denial of a meaningful opportunity of hearing prior to passing of the OIO - Audi alteram partem - breach of natural justice - Writ jurisdiction - Alternative remedy in writ jurisdiction.

HELD THAT:- No grounds to interfere with the impugned judgment(s) and order(s) of the High Court [2026 (4) TMI 421 - DELHI HIGH COURT]. Hence, the present Special Leave Petitions are dismissed.

Anti-profiteering determination in real estate projects - project-specific methodology prescribed for computing profiteering benefit - HELD THAT: - The parties accepted that the determination required reconsideration in light of the Delhi High Court decision holding that the methodology based on the difference between pre- and post-GST input tax credit-to-turnover ratios was flawed for the real estate sector. The Delhi High Court [2019 (7) TMI 1135 - DELHI HIGH COURT] had held that, since construction expenditure, advances and credit accrual are not uniform during a project's life cycle, total GST savings for each project should be determined and apportioned by total area so that buyers of equal area receive equal benefit. [Paras 13]

The impugned orders were quashed and the matters remanded for fresh consideration in accordance with the Delhi High Court decision; all merits contentions were left open.

Final Conclusion: The writ petitions were allowed, the anti-profiteering orders were quashed, and the matters were remanded for fresh determination of the profiteered amount. The constitutional challenge to the anti-profiteering provision and rules was left open.

Anti-profiteering computation for real estate projects - comparison of input-tax-credit-to-turnover ratios for the pre-GST and post-GST periods - HELD THAT: - In view of the accepted position of all parties and the Delhi High Court's [2024 (1) TMI 1248 - DELHI HIGH COURT] determination that the methodology for computing profiteering in the real estate sector required reconsideration, the impugned determination could not be sustained. The Court expressed no view on the merits and left all contentions open. [Paras 11, 13]

The impugned order was quashed and the matter remanded to GSTAT for fresh consideration in accordance with the Delhi High Court decision.

Final Conclusion: The writ petition was allowed to the extent of quashing the anti-profiteering order and remanding the computation issue for fresh consideration. The challenge to the vires of the statutory provision and rules was left open.

Reasoned quasi-judicial orders - Input tax credit mismatch reconciliation - Validity of the adjudication order concerning discrepancies between GSTR-2A, GSTR-3B and GSTR-9, challenged as a non-speaking order - HELD THAT: - Reasons are essential to a quasi-judicial order, though their adequacy depends on the facts, the noticee's response and the manner in which the adjudicator addresses the dispute. The order disclosed application of mind to the show-cause notice, the reply and the hearing. As the assessee bore the burden to explain the identified discrepancies through reconciliation supported by factual clarification and documentary material, the recorded finding that reconciliation had not been made was sufficient to reject the explanation. The noticee, having neither furnished a further explanation nor sought time to do so, could not fault the authority for not granting further time. [Paras 9, 10, 11, 12]

No interference in writ jurisdiction was warranted; the petitioner may pursue its factual objections and further evidence in appeal, which shall be entertained on merits if filed within three weeks without objection as to limitation.

Final Conclusion: The writ petition was disposed of without interference with the adjudication order, leaving the petitioner to pursue the statutory appeal on merits, including factual objections supported by further evidence.

Service of GST adjudication order through common portal - Limitation for statutory appeal against portal-uploaded order

Availability of statutory appeal against an order-in-original uploaded only on the common portal, where the assessee had replied to the show-cause notice - HELD THAT: - Since the petitioner had filed a reply to the show-cause notice, it could not assert lack of knowledge of the notice. The Court held that the case was governed by the principle that, where an order-in-original passed after contest is served only through the common portal, the limitation for appeal is not triggered and the aggrieved assessee may avail the appellate remedy within the prescribed period stated therein. [Paras 7]

The petitioner was permitted to avail the statutory appellate remedy in accordance with Luxmi Traders v. Union Territory of Chandigarh and Others [2026 (7) TMI 1602 - PUNJAB AND HARYANA HIGH COURT]

Final Conclusion: The writ petition was disposed of, leaving the petitioner to pursue the statutory appeal in accordance with the applicable principle governing an order served only through the common portal.

Interest on refund of illegally collected IGST on ocean freight - Entitlement to interest on the refund of IGST collected on ocean freight for the period July, 2017 to March, 2021 - HELD THAT: - The parties accepted that the claim was identical to that decided in Paradeep Phosphates Ltd. [2026 (1) TMI 1393 - ORISSA HIGH COURT]. The Court consequently disposed of the petition in terms of that decision. [Paras 4]

The authorities were directed to grant interest in the manner specified in the said decision within six weeks.

Final Conclusion: The writ petition was disposed of in terms of Paradeep Phosphates Ltd., with a direction to grant interest on the refunded IGST on ocean freight within six weeks.

Procedural review of ex parte adjudication - Rectification of errors apparent on the face of record

Rectification of an ex parte GST adjudication order that had omitted to consider the assessee's replies - HELD THAT: - Though the adjudicating authority could suo motu rectify an apparent error and possessed inherent procedural-review power to correct a proceeding vitiated by denial of hearing, such power did not authorise a merits review through a further ex parte order. Non-consideration of the replies went to the root of the adjudication; upon noticing that defect, the authority was required to recall the original order and afford a fresh personal hearing. The reduced demand did not render the subsequent order non-prejudicial, since demand was sustained contrary to the replies on record. [Paras 7, 9, 10, 11, 12]

The subsequent ex parte rectification order was set aside and the matter was remitted for fresh adjudication after affording opportunity of hearing.

Final Conclusion: The writ petition was allowed. The subsequent ex parte order was set aside, with a direction for fresh adjudication after giving the petitioner an opportunity of hearing.

Service of order-in-appeal and statutory right of appeal - Recovery pending appellate remedy

Availability of the statutory appellate remedy where the order-in-appeal was asserted not to have been served or uploaded on the common portal - HELD THAT: - On the limited grievance concerning non-availability of the order-in-appeal, the Court directed the appellate authority to furnish its copy upon a formal manual application. The petitioner was permitted to approach the GSTAT within the stipulated period with the statutory pre-deposit and an application for condonation of delay. [Paras 7]

A copy of the order-in-appeal was directed to be supplied within one week, and liberty was granted to file the statutory appeal within three weeks with a delay-condonation application.

Recovery pending statutory appeal - Statutory pre-deposit - Operation of the impugned demand pending filing of the statutory appeal against reversal of the refund - HELD THAT: - The Court directed that, if the appeal was filed within the permitted period along with the statutory pre-deposit required under section 112(8) of the Act, the impugned demand would remain in abeyance. [Paras 7]

The demand was to remain in abeyance upon timely filing of the appeal with the statutory pre-deposit.

Final Conclusion: The writ petition was disposed of by facilitating access to the order-in-appeal and preserving the petitioner's statutory appellate remedy. Recovery under the impugned demand was kept in abeyance subject to timely filing of the appeal with the prescribed pre-deposit.

Blocking of input tax credit under Rule 86-A - Audi alteram partem - Reasoned order - Validity of blocking input tax credit under Rule 86-A without recording reasons or affording the taxpayer an opportunity of hearing - HELD THAT: - Though Rule 86-A does not expressly provide for a pre-decisional hearing, the action of blocking input tax credit adversely affects the taxpayer's rights and interests. The rule of audi alteram partem must therefore be read into the provision. An order blocking credit without reasons is arbitrary and cannot be sustained. See K-9-ENTERPRISES [2025 (5) TMI 1613 - SC ORDER] [Paras 4, 5, 8]

The impugned communication was set aside for violation of natural justice; the competent authority may pass an appropriate order under Rule 86-A after affording an adequate opportunity of hearing.

Final Conclusion: The petition was allowed and the communication blocking input tax credit was set aside for want of reasons and breach of natural justice, without precluding fresh action by the competent authority after hearing the petitioner.

Regular bail in alleged tax evasion - Likelihood of influencing evidence during pending investigation

Entitlement to regular bail in an allegation of operating an unregistered filtered tobacco manufacturing unit and evading central excise duty - HELD THAT: - The question whether the applicant or a co-accused owned the manufacturing unit, and whether duty evasion was committed, was held to be a matter of evidence for trial. Having regard to the gravity of the alleged tax-evasion offence, the pending investigation and charge-sheet, and the possibility of the applicant influencing the evidence if released, bail was not considered appropriate at that stage.

The regular bail application was rejected, without expressing any opinion on the merits of the case.

Final Conclusion: Regular bail was refused in view of the seriousness of the alleged tax evasion, the pending investigation, and the risk of influence over evidence. The prosecution and trial court were requested to proceed expeditiously.

Entitlement to regular bail in a pending prosecution for alleged large-scale GST evasion - HELD THAT:- The department evaluated the goods found in the applicant/accused's possession, and found discrepancies (excessive stock) with the goods shown in the documents. There was a discrepancy between the sales recorded in the documents and the sales recorded in the inventory. It was found that the purchased goods were being recorded without accounting records, and that purchases and storage were being made without invoices. Suspense purchase of taxable goods has been found without recording it in the books of accounts.

The applicant/accused is accused of tax evasion of Rs 55 crore 06 lakh 20 thousand 882 under sections 132(1)(a), 132(5) and 132(1)(h) of the Goods and Services Tax. The investigation against the applicant/accused is still pending, the charge sheet has been reported not to be presented. The offence alleged against the applicant/accused is an economic offence.

Therefore, keeping in view the facts, circumstances of the case and the gravity of the offence alleged against the applicant/accused, it does not appear appropriate to grant the benefit of bail to the applicant/accused at this stage without commenting on the merits and demerits of the case.

Anticipatory bail - reasonable apprehension of arrest

Maintainability of an application for pre-arrest bail where the applicant had been summoned under the CGST Act only for furnishing a statement and documents - HELD THAT: - A reasonable apprehension of arrest is a pre-condition for invoking the pre-arrest bail jurisdiction. A summons issued under section 70 of the CGST Act requiring the applicant to subscribe a statement and tender documents, without a notice under section 35(3) of the BNSS, did not establish such apprehension. [Paras 7, 8]

The application was held not maintainable and dismissed, while leaving it open to the applicant to seek protection if a notice under section 35(3) of the BNSS is issued.

Final Conclusion: The application for pre-arrest bail was dismissed as the summons under the CGST Act did not give rise to a reasonable apprehension of arrest.

Profit on sale of investments by non-life insurance companies - computation of profits of insurance business under Section 44 and Rule 5 of the First Schedule - application of Section 14A to insurance companies - liability to deduct tax at source on payments to non-resident surveyors - liability to deduct tax at source on reinsurance premiums ceded to non-resident reinsurers - disallowance under Section 40(a)(i) for non-deduction of tax - depreciation rate on UPS as integral part of computer - applicability of minimum alternate tax / Section 115JB to insurance companies - rule of consistency in departmental assessments -

All substantial questions of law admitted in the listed appeals are answered largely in favour of the assessee by HC [2025 (6) TMI 1488 - MADRAS HIGH COURT] - delay of 420 days in filing this Special Leave Petition - HELD THAT:- The Special Leave Petition was dismissed on the ground of inordinate delay, no plausible and bona fide explanation for condonation having been shown.

Transfer of income-tax assessment jurisdiction - Challenge to the jurisdiction of the centralised assessing authority on the ground that no transfer order under the Income-tax Act had been passed or served - HELD THAT: - The jurisdictional challenge could not be raised in the intra-Court appeals where the Revenue had specifically asserted that, upon the assessee's no objection, the competent authority passed the transfer order, intimated it to the assessee and uploaded it on the portal, and those assertions were not denied by rejoinder before the writ court. [Paras 7, 8]

The writ court's rejection of the jurisdictional challenge was affirmed; the assessee was granted a further four weeks to pursue the statutory appeals, with all issues left open for adjudication by the appellate authority.

Final Conclusion: The intra-Court appeals were dismissed. The time to file statutory appeals was extended by four weeks, and all issues were left open before the appellate authority.

Condonation of delay in furnishing audit report for charitable exemption - Genuine hardship and substantial justice

Rejection of Condonation of delay in furnishing Form 10B audit report for claiming exemption under Section 12A during the Covid-19 pandemic - HELD THAT: - Exemption could not be denied merely because the audit report was furnished belatedly where it could be produced before the Assessing Officer or appellate authority on sufficient cause. The pandemic-related inability to furnish the report was accepted as genuine, particularly in the absence of objection from the Income Tax Department.

Where technical considerations conflict with substantial justice, substantial justice must prevail; the refusal to condone the delay without properly appreciating genuine hardship was therefore an arbitrary exercise of discretion. [Paras 5]

The rejection of condonation was set aside, and the authority was directed to treat the Form 10B audit report for Assessment Year 2021-22 as filed within the prescribed period and grant consequential relief.

Final Conclusion: The writ petition was disposed of by setting aside the refusal to condone the delay in filing the audit report and directing that it be treated as timely filed for consideration of the claimed exemption and consequential relief.

Taxability of share premium received from non-resident shareholder - Reassessment on erroneous factual premise and uncommunicated ground - Binding nature of CBDT instructions

Share issue to non-resident shareholder - Share premium as capital receipt - Taxability of premium received on fresh issue of equity shares to a non-resident shareholder - HELD THAT: - Share premium received on fresh issue of shares is a capital-account receipt and does not constitute income within the meaning of the Act, except to the limited statutory extent applicable to premium received from a resident in excess of fair market value. As the premium in question was received from a non-resident shareholder and no other charging provision was shown to apply, it could not be brought to tax. See VODAFONE INDIA SERVICES PVT. LTD. [2014 (10) TMI 278 - BOMBAY HIGH COURT] and HENDRA ADVISORY SERVICES P. LTD. [2025 (7) TMI 1126 - SC ORDER] [Paras 14, 17]

The share premium was held not chargeable to tax as income.

Reassessment founded on incorrect factual premise - Natural justice in reassessment proceedings - Binding CBDT instruction - Validity of reassessment action premised on an alleged sale of shares and subsequently sustained on an uncommunicated objection as to genuineness of the fresh share issue - HELD THAT: - The record established a fresh allotment of shares, not their sale or transfer. After the assessee had clarified this position, the authority introduced, in the order under the reassessment procedure, a new ground concerning genuineness without furnishing an opportunity to meet it. This shifting stand, unsupported by fresh tangible material, offended natural justice. The authorities also could not disregard the binding CBDT instruction requiring field officers to follow the principle governing share premium received on capital account. [Paras 15, 16, 17]

The impugned reassessment notices and order were quashed.

Final Conclusion: The writ petition was allowed and the reassessment action for assessment year 2019-20 was quashed, as the receipt was capital in nature and the proceedings were founded on an untenable factual premise and an uncommunicated ground.

Reassessment on same material after lapse of draft assessment proceedings - Reopening to cure failure to complete assessment within limitation

Validity of reopening where the transactions forming the basis of the notice had already undergone detailed scrutiny and culminated in a draft assessment order, but no final assessment order was passed within the prescribed limitation - HELD THAT: - The assessment proceedings had lapsed without a final assessment order, despite the assessee's response to the draft assessment order. No fresh material, apart from that examined during the detailed scrutiny, was shown to have come to the Revenue's notice.

Reassessment under section 148 on the same material would impermissibly enable the Revenue to remedy its failure to conclude the original assessment within time and indirectly extend the limitation for completing it. [Paras 19, 20]

The reopening was held impermissible; the notice under section 148 and the order under section 148A(3) were quashed and set aside.

Final Conclusion: The writ petition was allowed, and the reassessment notice and consequential order were quashed.

Validity of Reassessment - Change of opinion - Deduction for in-house scientific research expenditure - issue examined during the original scrutiny assessment

HELD THAT: - The material forming the basis of the notice under Section 148A(b) and the order under Section 148A(d) had already been considered by the Assessing Officer while completing the original assessment. Reassessment cannot be initiated to review the earlier view or to undertake a fresh examination of documents furnished in the original assessment proceedings; it would constitute a mere change of opinion. This principle stands settled in Commissioner of Income Tax, Delhi v. Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT] [Paras 9, 11]

The order under Section 148A(d) and the consequential notice under Section 148 were quashed.

Final Conclusion: The reassessment proceedings for Assessment Year 2013-14 were held to be founded on a mere change of opinion and were quashed.

Capital gains exemption for investment in residential house - Procedural requirement of deposit under Capital Gains Account Scheme

Eligibility for deduction u/s 54 where the capital gain was invested in a new residential house within the stipulated period but was not deposited in the Capital Gains Account Scheme before the due date for filing the return - HELD THAT: - Section 54 is a beneficial provision and its substantive requirement is investment of the capital gain in acquisition or construction of a residential house within the prescribed period. Where that substantive condition is fulfilled, non-deposit of the unutilised amount in the Capital Gains Account Scheme is a procedural or technical breach and cannot defeat the exemption. The assessee's share in the jointly purchased residential property exceeded the capital gain and the purchase was made before the extended due date for filing the return.

Hon’ble Allahabad High Court in the case of in the case of Principal Commissioner of Income-tax v. Ms. Sarita Gupta [2024 (5) TMI 108 - ALLAHABAD HIGH COURT] has held that where the petitioner did not deposit the amount of capital gain that arose to her in her bank account and that she did not make the investments therefrom in accordance with the Scheme of the Act but made the investment in the new residential property within the stipulated period as laid down u/s 54(2) of the Act the deduction cannot be denied only for any procedural lapse committed by the assessee.[Paras 7]

The assessee was entitled to deduction under section 54 and the disallowance of the claimed capital-gains exemption was deleted.

Final Conclusion: The appeal was allowed and the disallowance of deduction under section 54 was deleted. The remaining grounds were left open as academic.

Disallowance of unsubstantiated purchases - Binding effect of consequential assessment order

Disallowance of the assessee's purchase expenditure previously treated as unsubstantiated or inflated, after remand for verification by the AO - HELD THAT: - The earlier order had remitted the allowability of purchase expenditure for fresh inquiry and verification. In consequential proceedings, the Assessing Officer verified and allowed the entire purchase claim. Since the Department was bound by that favourable consequential assessment and could not remain an aggrieved party, the surviving controversy concerning the purchase disallowance had become infructuous.

It would indeed be appropriate for us to refer to CIT Vs. D.M. Prunesh [2020 (9) TMI 731 - KARNATAKA HIGH COURT] and Smt. B. Jayalakshmi [2018 (8) TMI 208 - MADRAS HIGH COURT] that even a favourable remand report much less an assessment order, is very much binding on the department wherein it could not be held to be an aggrieved party.[Paras 6, 7]

The disallowance partly sustained by the first appellate authority was deleted in full; the assessee's appeals were allowed on this issue and the corresponding Revenue grounds were rejected.

Final Conclusion: The purchase disallowances for the relevant assessment years were deleted because the consequential assessment orders, following verification, had allowed the claims in full. The assessee's appeals were allowed and the Revenue's cross appeals were dismissed.

Prima facie adjustment of debatable claims - Disallowance of expenditure relating to exempt income

Challenge to adjustment retained in scrutiny assessment - Prima facie adjustment of debatable claims - Employees' PF/ESI contributions - Validity of adjustment disallowing employees' PF/ESI contributions, made in an intimation and retained without independent examination in the subsequent scrutiny assessment - HELD THAT: - An adjustment retained as part of the total income adopted in the scrutiny assessment remains amenable to challenge in an appeal against that assessment; absence of a separate appeal against the intimation does not defeat that right. The adjustment continued to originate in the intimation, since the AO neither independently examined nor adjudicated the disallowance. At the time of the intimation, allowability of employees' contributions deposited after the welfare-law due date but before the return-filing due date was a contentious issue, with a favourable jurisdictional High Court view. A debatable claim cannot be disallowed through the summary adjustment jurisdiction, and the subsequent declaration of law in Checkmate Services (P.) Ltd. v. CIT [2022 (10) TMI 617 - SUPREME COURT (LB)] did not alter the debatable character of the issue on the date of intimation. [Paras 27, 28, 31, 33, 34]

The disallowance of employees' PF/ESI contributions for AY 2018-19 was deleted.

Disallowance of expenditure relating to exempt income - Investments yielding exempt income - Book-profit adjustment for exempt-income expenditure - Additional disallowance under section 14A read with Rule 8D, over and above the assessee's voluntary disallowance, in respect of investments yielding exempt dividend income - HELD THAT: - For computing the disallowance, only investments which actually yielded exempt income during the relevant previous year could be considered. On that basis, the disallowance computable for each year was below the voluntary disallowance already made by the assessee; consequently, no further disallowance survived. For AY 2018-19, such disallowance was also not sustainable in computing book profits, as it did not fall within the prescribed adjustments. [Paras 43, 44, 45, 51, 52]

The additional disallowances under section 14A for AY 2018-19 and AY 2020-21 were deleted, including the corresponding book-profit adjustment for AY 2018-19.

Deduction for charitable contributions - Claim for deduction in respect of contributions to the Armed Forces Fund and the CRPF Fund - HELD THAT: - The claim required factual verification of the payment evidence and genuineness of the contributions from the supporting donation receipts. [Paras 54]

The matter was restored to the jurisdictional Assessing Officer for limited verification of the payment receipts, without adjudication on the merits of the deduction claim.

Final Conclusion: The appeal for AY 2018-19 was allowed. The appeal for AY 2020-21 was partly allowed for statistical purposes, with the deduction claim remanded for limited verification.

Unexplained cash credit - property sale deposit - Consequential commission expenditure for accommodation entries

Unexplained cash credit - property sale deposit - Addition as unexplained cash credit in respect of the amount received from an alleged entry-provider company under an agreement concerning sale of immovable property - HELD THAT: - The assessee produced the executed agreement, bank statements, income-tax return acknowledgement of the payer, ledger confirmation, and documents showing that a buyer was arranged and the deposit was refunded in accordance with the agreement. The addition rested on general third-party material and the alleged status of the payer as a paper company, without concrete material directly linking the assessee's receipt to an accommodation entry. Such presumption could not displace the documentary evidence establishing the commercial reality of the transaction. [Paras 7]

Deletion of the addition under section 68 was affirmed.

Consequential commission expenditure for accommodation entries - HELD THAT: - Since the underlying receipt was not held to be an accommodation entry, the assumed payment of commission for obtaining such entry had no factual basis. [Paras 8]

Deletion of the consequential addition under section 69C was affirmed.

Final Conclusion: The Revenue's appeal was dismissed, affirming deletion of the unexplained-credit addition and the consequential estimated commission addition for AY 2018-19.

Rejection of audited books of account for non-response to third-party notices - Estimation of income from gross receipts including pass-through reimbursements

Validity of rejection of the audited books and estimation of business income at a fixed percentage of gross receipts in the case of an HR outsourcing service provider - HELD THAT: - Rejection of books under section 145(3) requires specific defects in the accounts; it cannot rest merely on non-compliance with sample third-party notices under section 133(6). The particulars supplied by the assessee had been verified by the Assessing Officer, and the business receipts substantially represented salary and statutory reimbursements constituting pass-through costs. In the absence of a rational basis for treating the entire gross receipts as income or applying a fixed rate, the estimated addition was arbitrary. [Paras 8, 9]

The deletion of the addition by the Commissioner (Appeals) was upheld and the Revenue's appeal was dismissed.

Final Conclusion: The Revenue's appeal was dismissed, the Tribunal affirming deletion of the estimated addition.

Interest on refund of transferred TDS credit following amalgamation - Attribution of delay for exclusion of refund interest

Entitlement to interest on refund arising from TDS deducted in the name of the amalgamating company, where the corresponding income was assessed in the hands of the amalgamated company - HELD THAT: - Where income on which TDS was deducted was assessed substantively in the hands of the assessee and the amalgamating company had not claimed the corresponding credit, section 199 read with Rule 37BA required the TDS credit to be given to the assessee notwithstanding that it appeared under the other entity's PAN. The assessee had claimed the credit through its original and revised returns, and, once such credit was allowed, interest on the resulting refund could not be denied by attributing the delay to the assessee. The exclusion of a period from interest under section 244A(2) could not be founded on the Assessing Officer's erroneous attribution of default.

As assessee had claimed TDS by filing original return as well as revised return therefore, the interest u/s 244A(1) of the Act should be allowed from the end of the relevant AY till the date of issue of refund of the TDS amount claimed as refund. Accordingly the AO is directed to compute the interest from 01.04.2015 till the issue of refund to the assessee. [Paras 12, 13]

Interest under section 244A(1) was directed to be computed from 01.04.2015 until the date of issue of refund.

Final Conclusion: The assessee's appeal was allowed, and interest on the refund attributable to the transferred TDS credit was directed to be granted for the full applicable period.

Assessment u/s 153A - period of limitation - Validity of the assessment for Assessment Year 2010-11 u/s 153A where the search conducted in the previous year relevant to AY 2020-21 placed that year outside the permissible ten-year block

HELD THAT: - Applying the jurisdictional High Court decision in Ojjus Medicare Pvt. ltd. and others [2024 (4) TMI 268 - DELHI HIGH COURT] the Tribunal held that the assessment year relevant to the year of search is the first year for computing the ten-year block. Assessment Year 2010-11 consequently fell in the eleventh year and was beyond the statutory period. [Paras 7]

The assessment under section 153A read with section 144C(13) and section 144 was quashed; the remaining grounds were left open as academic.

Final Conclusion: The assessee's appeal was allowed and the assessment for Assessment Year 2010-11 was quashed as being beyond the permissible ten-year period for assessment under section 153A.

Unexplained money found during search - Explanation of seized jewellery within CBDT instructional limits

Unexplained money found during search - Untested affidavit - Addition for cash found in a jointly held locker, claimed partly as the mother's past savings and partly as the assessee's disclosed cash balance - HELD THAT: - The mother's affidavit owning part of the cash and explaining it as past savings was not examined or tested by the Assessing Officer and, therefore, its contents had to be accepted, following Mehta Parikh [1956 (5) TMI 4 - SUPREME COURT]. The cash account, supported by opening balance, withdrawals, cash receipts and disclosed income, also showed sufficient availability of cash. In the absence of contrary evidence, the explanation of the entire cash was held plausible. [Paras 5, 6]

The addition as unexplained money was deleted.

Unexplained money found during search - Plausible explanation of household cash - Addition for cash found during search, claimed as temple earmarked funds, customary gift envelopes belonging to the spouse, and unspent funds received from the mother for death rituals - HELD THAT: - The Tribunal found the explanation plausible because the cash was found from the stated locations, including the house temple and gift envelopes, and the retained amount from funds provided for death rituals was consistent with prevailing family practice. Having regard to the assessee's social standing and disclosed income, the Revenue had no basis to sustain the addition. [Paras 11, 12]

The addition as unexplained money was deleted.

Explanation of seized jewellery within CBDT instructional limits - Search valuation report - Addition for jewellery found during search in a joint-family residence, despite the departmental valuer's report and the permissible quantity under the CBDT instruction on non-seizure of jewellery - HELD THAT: - The Assessing Officer could not disregard the valuation report prepared by the Department's approved valuer and make an estimated addition. The jewellery disclosed in that report, when considered with the joint-family composition, fell within the limits stipulated in the CBDT instruction. Following CIT vs Satya Narain Patni [2014 (5) TMI 1002 - RAJASTHAN HIGH COURT] jewellery within those limits was to be treated as explained. [Paras 18, 19]

The jewellery was held explained and the addition was deleted.

Final Conclusion: The additions for cash and jewellery found during search were deleted after the explanations were held acceptable. The assessee appeals were partly allowed, the challenge concerning approval under section 153D having been dismissed as not pressed.

Limitation for assessment giving effect to appellate directions - Unexplained expenditure on purchases

Limitation for assessment giving effect to appellate directions - Validity of the assessment made pursuant to the Tribunal's remand direction, on the ground that it was barred by the limitation prescribed for giving effect to an appellate order - HELD THAT: - The statutory period was to run from receipt or passing of the appellate order by the specified senior income-tax authorities, and not from its delivery to the Departmental Representative. Delivery to the Departmental Representative, particularly along with a large batch of orders, was only a mode of internal transmission and did not establish when the order reached the prescribed authority. In the absence of a recorded date of such receipt, the Department was entitled to the benefit of doubt that the order was transmitted after the relevant month-end. [Paras 21]

The assessment was held to have been completed within limitation.

Unexplained expenditure on purchases - no response to the summons issued to them - HELD THAT: - The Assessing Officer treated the entire purchases as unsubstantiated merely because summons remained unanswered, without considering the earlier findings and verification reports. One supplier had appeared before the Assessing Officer, while purchases from the other suppliers had been reflected in VAT verification reports. The assessee had also established the purchases and corresponding sales through stock records. As the suppliers existed during the relevant year and the transactions stood supported by the material on record, the addition could not be sustained. [Paras 22, 23, 24]

The deletion of the addition by the Commissioner (Appeals) was upheld and the Revenue's challenge was dismissed.

Final Conclusion: The Revenue's appeal and the assessee's cross-objections were dismissed. The assessment was held timely, while the deletion of the addition for the impugned purchases was sustained.

Provisional release of imported roasted areca nuts - imported goods are lying in the Customs bonded warehouse - 'roasted' areca nuts or 'dried' areca nuts -Laboratory classification based solely on physical appearance

Seeking Release of imported roasted areca nuts pending adjudication of their classification and consequential customs duty - HELD THAT: - The classification dispute was left for determination in the pending show-cause proceedings. However, the Central Revenue Control Laboratory's conclusion that the goods were dried areca nuts rested only on their physical appearance and not on other scientific parameters; the moisture content was within the prescribed limit, and comparable consignments had previously been released on personal bond. Continued withholding of the goods or insistence on a bank guarantee was therefore unwarranted. [Paras 8, 9, 10, 11]

The imported consignments were directed to be released forthwith on furnishing a personal bond, subject to adjudication of the applicable customs duty in accordance with law; physically deliverable consignments declared fit for consumption were to be delivered within a fortnight.

Final Conclusion: The petitions were allowed by directing provisional release of the imported goods on personal bond. The classification of the goods and the customs duty payable remain to be determined in the pending proceedings.

Agency liability of importer for acts of authorised customs clearance agent - Bona fide purchaser of transferable duty credit scrips - Caveat emptor and due diligence in utilisation of duty credit scrips - Natural justice - prejudice from non-production of documents and denial of cross-examination - Penalty for fraudulent utilisation of manipulated duty credit scrips

Agency liability of importer for acts of authorised customs clearance agent - Bona fide purchaser of transferable duty credit scrips - Caveat emptor and due diligence in utilisation of duty credit scrips - Liability of importers using manipulated transferable duty credit scrips through their authorised customs clearance agent, and their claim to protection as bona fide purchasers - HELD THAT: - An importer which authorises an agent to process Bills of Entry, arrange utilisation of scrips and undertake customs clearance cannot disown acts done within that authority while retaining the resulting duty benefit. The enhanced credits reflected in the manipulated EDI records were never lawfully granted and could not confer a better entitlement upon the importer than that held by the transferor. Protection claimed as a bona fide purchaser required good faith and reasonable care; the importers neither verified the genuineness, validity or available credit of the scrips nor made enquiries despite material irregularities in the clearance arrangements. Their incorrect declarations in the Bills of Entry also disentitled them from equitable protection. The principle of caveat emptor placed the burden on them to undertake requisite verification before using the scrips to discharge customs duty. [Paras 50, 51, 52, 53, 54]

The importers were liable for the acts of their authorised agent and could not claim protection as bona fide purchasers or invoke caveat emptor to avoid the consequences of using manipulated scrips.

Natural justice - prejudice from non-production of documents and denial of cross-examination - Adverse inference from non-production of original documents - Whether non-production of original scrips and allied documents, and denial of cross-examination of Customs officers, vitiated the proceedings? - HELD THAT: - Natural justice requires actual prejudice, not a merely asserted procedural lapse. The case was independently established through DGFT entitlement records, Customs and EDI transaction data, investigation material and statements recorded under the Customs Act. An adverse inference from non-production of original scrips was not automatic, particularly when the relevant facts stood established by independent evidence. As the importers had admittedly never possessed or verified the disputed originals, their absence did not impair their defence. Nor was any material fact or resulting prejudice identified that cross-examination of Customs officers could have established. [Paras 62, 63, 64, 70, 71]

The proceedings were not vitiated by non-production of the original scrips or denial of cross-examination, as no demonstrable prejudice was established and the evidentiary foundation remained intact.

Penalty for fraudulent utilisation of manipulated duty credit scrips - Mutual exclusivity of penalties for short-levy by fraud - Sustainability of penalties for duty short-payment through manipulated duty credit scrips where the importers denied actual knowledge of the EDI manipulation - HELD THAT: - Penalty for short-levy arising from fraud or wilful misstatement did not require proof that the importer personally executed the manipulation. The importers filed Bills of Entry declaring use of scrips without verifying their existence, validity or available credit, and obtained the direct benefit of the manipulated credits. Their conduct was therefore not innocent reliance on an external fraud. As penalty under Section 114A applied, a separate penalty under Section 112(b) did not survive. [Paras 73, 74, 75, 76, 77]

Penalty under Section 114A was upheld, while the separate penalty under Section 112(b) was set aside.

Final Conclusion: The appeals and writ petitions were disposed of on the finding that the importers could not avoid liability for manipulated duty credit scrips used through their authorised agent, and no breach of natural justice was established. Penalties under Section 114A were sustained, while separate penalties under Section 112(b) were set aside; the findings were applied mutatis mutandis to the writ petitions.

Common adjudication of connected show cause notices - Alternative statutory remedy in customs adjudication

Common adjudication of connected show cause notices - Appointment of a Common Adjudicating Authority for three show cause notices arising from a single investigation into imports of networking equipment - HELD THAT: - Although the notices arose from the same investigation and substantially overlapped in evidentiary material, they concerned distinct subject matters, transactions at different stages, and differing proposed consequences. Since two notices had already been adjudicated, a direction to place all three before a Common Adjudicating Authority would require displacement of that adjudication, whose validity was separately under challenge. [Paras 31, 32, 33, 36, 37]

The prayer for appointment of a Common Adjudicating Authority for all three show cause notices was declined.

Effect of interlocutory order on pending customs adjudication - Validity of adjudication of two show cause notices during pendency of the writ petition seeking common adjudication - HELD THAT: - The interlocutory order merely directed adjournment of a hearing before the Commissioner of Customs, Mumbai, and contained only prima facie observations. It neither expressly stayed nor restrained adjudication of the two notices before the competent authority at New Delhi; a request for deferment could not operate as a judicial restraint on that authority. [Paras 34, 35]

The pendency of the writ petition and the interlocutory order did not render the subsequent adjudication without jurisdiction.

Alternative statutory remedy in customs adjudication - Natural justice objections involving disputed facts - Maintainability of writ challenges to a consolidated customs adjudication based on alleged non-consideration of reply, deficient service of hearing notices, denial of effective hearing, and limitation - HELD THAT: - Availability of an appellate remedy is not an absolute bar to writ jurisdiction; however, the objections raised required examination of the complete adjudication record, including receipt and consideration of a co-noticee's reply, service and effect of hearing notices, prejudice, the underlying transactions, and limitation. No inherent lack of jurisdiction or pure question of law incapable of examination by the appellate forum was established. The consolidated nature of the order also made it inappropriate to set it aside selectively on disputed factual questions. [Paras 46, 47, 48, 49, 50]

The writ petitions challenging the adjudication order were not entertained; the petitioners were relegated to the statutory appellate remedy, with all substantive and procedural objections left open.

Final Conclusion: The writ petition seeking common adjudication was dismissed, and the challenges to the consolidated customs adjudication order were relegated to the statutory appellate forum. All merits, limitation and individual procedural objections were left open.

Provisional release of goods seized under the Customs Act - Jurisdiction of criminal court in absence of cognizance under the Customs Act

Jurisdiction of a regular criminal court to release on zimma areca nuts seized under the Customs Act when no cognizance of a Customs offence has been taken - HELD THAT: - Previous sanction of the competent Customs authority is required before cognizance of the offence under the Customs Act can be taken. In the absence of such sanction and cognizance, the seizure remained subject to confiscation and penalty adjudication under the Customs Act. The special statutory mechanism for provisional release pending adjudication, exercisable by the proper officer, could not be overridden by recourse to the general criminal-law provision. [Paras 25, 26, 27, 28]

The Sessions Court lacked jurisdiction to direct release of the seized areca nuts on zimma; its order was set aside.

Final Conclusion: The criminal petition was allowed and the order directing release of the seized areca nuts on zimma was set aside.

Classification of commercial kitchen exhaust hoods incorporating a fan

Whether the imported hoods contain fans so as to require examination for classification under the heading for ventilating or recycling hoods incorporating a fan? - HELD THAT: - The classification turns on the factual determination whether the imported kitchen exhaust hoods contain fans. Since the additional material asserted by the assessee had not been considered after having been sent to an incorrect email address, a fresh examination of that material was necessary before determining the classification. [Paras 6, 7]

The advance ruling was set aside and the matter remitted for consideration of the additional material to be furnished by the assessee and for a fresh order in accordance with law.

Final Conclusion: The appeal was disposed of by setting aside the advance ruling and remitting the classification matter for fresh consideration after allowing the assessee to furnish additional material.

Classification of separately presented laptop LCD panels as flat panel display modules - Specific tariff description prevailing over end-use as computer parts

Whether the goods imported by the appellants i.e. Laptop, LCD panels (two models, both of INNOLUX brand) are classifiable under CTH 84733099 as is declared by the appellants which attracts nil BCD or the goods are classifiable under tariff item 85241100 as alleged by the department which attracts 15% BCD ad volerum? - HELD THAT: - The goods retained their independent identity as flat panel display modules and were not integrated into a computer. The specific description in heading 8524 prevailed over the general heading for computer parts and accessories; their intended use in laptop repair could not alter that classification. Chapter Note 7 to Chapter 85 expressly accorded precedence to heading 8524 for flat panel display modules, and the imported goods admittedly lacked video-signal-converting components that could exclude them from that heading.

Finally keeping in view that the display module/LCD Laptop display retains the independent identity as that of flat panel display module it’s end use in the Laptop cannot be criteria. Support is drawn from Welkin Foods[2026 (1) TMI 348 - SUPREME COURT] case. Any classification based on the technical distinction between LCD or LED panels is also of no relevance at the point of import. [Paras 13, 15, 16, 17, 18]

The imported laptop LCD panels were held classifiable under heading 8524, attracting basic customs duty at 15%; the differential duty demand and the impugned order were upheld.

Final Conclusion: The appeal was dismissed and the order confirming differential customs duty on the imported flat panel display modules was upheld.

Customs valuation based on contemporary imports of similar goods - Confiscation for excess quantity and minor misdeclaration - Proportionality of redemption fine and penalty

Customs valuation based on contemporary imports of similar goods - Re-determination of the assessable value of polyurethane-coated polyester water-resistant fabrics imported for making bags - HELD THAT: - The reclassification of the tested goods as polyurethane-coated fabric and the consequential anti-dumping duty were accepted by the importer. However, valuation could not be enhanced merely on the basis of an internal departmental instruction. Re-determination under the Customs Valuation Rules, 2007 had to be based on contemporary imports of similar goods; the lower authorities had wrongly ignored the Bills of Entry produced by the importer and adopted the highest available value instead of the lowest value of comparable contemporary imports. [Paras 6]

The valuation method adopted by the lower authorities was set aside and the matter was remanded to the Assessing Officer for redetermination on the basis of the lowest value of similar goods in contemporary imports.

Confiscation for excess quantity and minor misdeclaration - Proportionality of redemption fine and penalty - Liability of the imported polyurethane-coated fabrics to confiscation, redemption fine and penalty for excess quantity and variations in declared thickness - HELD THAT: - The variations in thickness were minor and fell within the declared GSM range, and no mala fide intention to evade duty was established. Nevertheless, excess quantity was found on examination and there were minor declaration variations, rendering the goods liable to confiscation. Applying the principle that penalty is not ordinarily warranted for a merely technical or venial breach absent deliberate defiance of law, the Tribunal held that redemption fine and penalty must be commensurate with the importer's involvement and be founded on the redetermined value. [Paras 6]

The importer was entitled to redeem the confiscable goods on payment of redemption fine, but the redemption fine and penalty were directed to be redetermined proportionately and with reference to the redetermined value.

Final Conclusion: The appeal was disposed of by remand for lawful redetermination of the value of the imported goods and consequential redetermination of redemption fine and penalty on a proportionate basis.

Maintainability of appeal challenging disposal of the SCORES complaint and seeking monetary compensation and regulatory action - review petition - Tribunal dismissed the appeal, holding that the monetary relief claimed was in the nature of a civil dispute beyond its jurisdiction and that the appellant, after availing the SCORES mechanism, ought to have pursued the remedies available thereunder if still aggrieved -Court [2026 (5) TMI 1036 - SC ORDER] found no ground to interfere with the impugned judgment of the Securities Appellate Tribunal, and the appeal was dismissed while leaving it open to the appellant to avail such other remedies as may be available in law.

HELD THAT:- The review petition was dismissed as no grounds for review were made out.

Alternative statutory appellate remedy against NCLT orders - Writ jurisdiction against NCLT orders

Maintainability of writ applications challenging the order approving the revised resolution plan under the insolvency process - HELD THAT: - An aggrieved party against an order of the NCLT is required to pursue the statutory appellate remedy before the National Company Law Appellate Tribunal, Principal Bench, Delhi. The High Court had no good reason to entertain writ applications against the NCLT order. [Paras 7, 8]

The interim orders entertaining the writ applications were set aside, leaving the respondents free to pursue an appropriate remedy before the appropriate forum; the merits of their grievances were left open.

Final Conclusion: The appeals were disposed of by setting aside the High Court's interim orders for having entertained writ applications despite the available statutory appellate remedy.

Regulatory fee under insolvency resolution process - Insolvency and Bankruptcy Board's regulation-making power - Regulatory fee distinguished from tax - Prospective operation of regulatory fee

Insolvency and Bankruptcy Board's regulatory role in CIRP - Power to levy regulatory fee - Board's authority to levy regulatory fee on resolution plans and its regulatory role in the corporate insolvency resolution process - HELD THAT: - The statutory scheme confers on the Board executive, quasi-judicial and quasi-legislative functions extending throughout the corporate insolvency resolution process; its role is not confined to insolvency professionals, insolvency professional agencies and information utilities. The power to levy fees for carrying out the purposes of the Code cannot be restricted to registration and renewal fees for service providers, since such construction would render the wider statutory language otiose. Read conjointly, the provisions concerning other insolvency resolution process costs, levy of fees and regulation-making empowered the Board to prescribe the regulatory fee and include it in such costs. [Paras 28, 37, 40, 41]

Regulation 31A was within the Board's statutory and quasi-legislative powers and was not imposed without authority of law.

Residuary insolvency resolution process costs - Ejusdem generis - Inclusion of regulatory fee as an insolvency resolution process cost under the residuary provision - HELD THAT: - The enumerated categories of insolvency resolution process costs concern distinct kinds of expenses and do not constitute a common genus. The residuary expression permitting costs specified by the Board therefore cannot be cut down by ejusdem generis or noscitur a sociis. The regulatory fee could consequently be included as an insolvency resolution process cost under the statutory and regulatory framework. [Paras 54, 55, 56, 58, 59]

Regulation 31A is not ultra vires the Code.

Regulatory fee and quid pro quo - Regulatory fee distinguished from tax - Character of the regulatory fee payable upon approval of a resolution plan as a fee rather than a tax - HELD THAT: - For a regulatory fee, direct and mathematically exact quid pro quo is unnecessary; a broad and general correlation between the levy and regulatory services is sufficient. The Board regulates material aspects of the corporate insolvency resolution process, including its stakeholders, voting, committee functioning, information memoranda, process costs and resolution plans. These wide-ranging services establish the requisite general nexus, and the levy cannot be treated as a tax masquerading as a fee. [Paras 84, 85, 86, 87, 88]

The regulatory fee is a valid regulatory fee and not a tax.

Excessiveness of regulatory fee - Financial independence of regulator - Whether the regulatory fee was excessive, disproportionate or arbitrary? - HELD THAT: - The audited accounts did not demonstrate collection so excessive or disproportionate as to alter the character of the levy. The fact that the Board generated a surplus after previously operating with a deficit did not establish excessiveness. Financial independence is integral to the Board's effective functioning as a regulator, and the levy served that objective without being shown to be confiscatory or unreasonable. [Paras 91, 93, 94, 95, 96]

The levy was not excessive or disproportionate and did not infringe Article 14.

Prospective operation of regulatory fee - Adjudicatory authority's role in resolution plan approval - Applicability of regulatory fee to resolution plans pending approval before the adjudicatory authority after the regulation came into force - HELD THAT: - A resolution plan approved by the committee of creditors is binding between the committee and the resolution applicant, but does not reduce the adjudicatory authority to a ministerial body. The adjudicatory authority must ensure compliance with statutory requirements, including priority payment of insolvency resolution process costs, and may in limited circumstances require reconsideration or rectification. The proviso operates from its stipulated effective date and does not disturb a vested right or impose liability retrospectively where the resolution plan was pending consideration when the regulation came into force. [Paras 106, 107, 108, 109, 110]

The proviso to Regulation 31A is prospective and validly applies to the petitioners' pending resolution plans.

Colourable exercise of power - Excessive delegation - Challenge to inclusion of regulatory fee in insolvency resolution process costs as a colourable exercise of power or excessive delegation - HELD THAT: - As the levy was neither excessive nor disproportionate and the governing statutory provisions and the regulation including the fee within insolvency resolution process costs were not challenged, no colourable exercise was established. The delegation was guided by the purpose of carrying out the Code and subject to parliamentary laying, and was neither unguided nor excessive. [Paras 111, 112, 113]

The challenges based on colourable exercise of power and excessive delegation were rejected.

Final Conclusion: The challenge to Regulation 31A of the IBBI Regulations was rejected. The regulatory fee was held to be statutorily authorised, validly included in insolvency resolution process costs, non-retrospective, and neither a tax nor an arbitrary or excessive levy; all petitions were dismissed.

Priority of depositor - protection proceedings over corporate insolvency - Liquidator's recovery of chit receivables - Access to investigation records for statutory recovery

Priority of depositor - protection proceedings over corporate insolvency - Continuation of proceedings under the Tamil Nadu Protection of Interests of Depositors Act notwithstanding corporate insolvency proceedings against the financial establishment - HELD THAT: - The inter-parties Division Bench judgment [2024 (10) TMI 62 - MADRAS HIGH COURT] had already held that the depositor-protection enactment, being a special law for protecting depositors and prosecuting connected offences, prevailed over the Insolvency and Bankruptcy Code. That determination bound all concerned, and the Economic Offences Wing was consequently entitled to proceed under the Act. [Paras 16]

The Economic Offences Wing may continue its statutory proceedings in accordance with the Tamil Nadu Protection of Interests of Depositors Act.

Liquidator's recovery of chit receivables - Access to investigation records for statutory recovery - Liquidator's entitlement to recover receivables due from chit subscribers and to obtain copies of seized company materials for that purpose - HELD THAT: - The Liquidator, having stepped into the position of the company's management, had an available statutory remedy under the Chit Funds Act to recover amounts due to the company and was under a duty to take such recovery steps. This exercise would not interfere with the investigation, subject to the Economic Offences Wing retaining its entitlement to act in accordance with law if recovered amounts constituted proceeds of crime or belonged to the accused company or its directors. Since the investigation agency held the company's seized materials, a complete copy set was required to enable the Liquidator to pursue recovery. [Paras 17, 18]

The Economic Offences Wing was directed to furnish a complete set of the relevant materials to the Liquidator, who may pursue recovery under the Chit Funds Act or other permissible law; requests for originals may be made before the Special Court or other appropriate forum.

Final Conclusion: The petition was allowed by directing supply of the seized company materials to the Liquidator for lawful recovery of receivables, while preserving the Economic Offences Wing's authority under the depositor-protection law.

Financial creditor status of real estate allottees - Continuing financial debt - Election of refund remedy by allottee

Entitlement of flat purchasers to be treated as financial creditors after seeking refund of the sale consideration through arbitration and pursuing dishonoured refund cheques - HELD THAT: - The status of a financial creditor requires a financial debt owed by the corporate debtor, involving a subsisting liability or obligation. By invoking arbitration for refund of the consideration, accepting and presenting refund cheques, and pursuing remedies upon their dishonour, the appellants had elected refund rather than continued allotment. Their claim did not disclose a continuing debt owed by the corporate debtor so as to retain the character of allottees whose amounts are deemed to have the commercial effect of borrowing.

Vishal Chelani & Ors. Vs. Debashis Nanda [2023 (10) TMI 949 - SUPREME COURT] was distinguished, since it concerned differential treatment of an existing allottee holding a RERA decree, whereas the appellants had, by their own conduct, sought refund and could not simultaneously assert continuing allottee status. [Paras 16, 20, 21, 22]

The appellants were not entitled to recognition as financial creditors, and the rejection of that relief was upheld.

Final Conclusion: The company appeals were dismissed, as the appellants' pursuit of refund remedies precluded their claim to continuing allottee status and recognition as financial creditors.

Regular bail in money-laundering offence - Mandatory twin conditions for bail - Parity in bail orders - HELD THAT:- The Special Leave Petition was dismissed and not to interfere with the impugned order of the High Court [2026 (8) TMI 1222 - TELANGANA HIGH COURT] - four weeks' time was granted to surrender, with a direction that any bail application thereafter be considered on its own merits in accordance with law.

Maintainability of the civil writ petitions challenging the ECIR and consequential measures under the PMLA - Scheduled offence as jurisdictional foundation for money-laundering proceedings - Alternative remedy and writ jurisdiction - Addendum to ECIR and colourable exercise of power

Civil writ jurisdiction over PMLA search and seizure - Maintainability of civil writ petitions challenging the ECIR and the pre-prosecution search, seizure and freezing actions under the PMLA - HELD THAT: - The PMLA creates distinct civil and criminal streams. Before a prosecution complaint is filed before the Special Court, action relating to inquiry, attachment, freezing, search and seizure remains within the civil or executive stream. An ECIR is an internal administrative document and is not equivalent to an FIR or the commencement of criminal proceedings. The challenge to its continuation and to the consequential executive measures was therefore amenable to civil writ jurisdiction. The civil writ petitions were held maintainable.

Alternative remedy and writ jurisdiction - Jurisdictional challenge to ECIR - Availability of the remedy before the Adjudicating Authority against the challenge to the continued subsistence of the ECIR and its addendum - HELD THAT: - The Adjudicating Authority's remit concerns consequential attachment, retention, search and seizure proceedings; it does not extend to adjudicating the foundational jurisdiction to continue an ECIR after the predicate offence has ceased or to test the validity of an addendum. The availability of a statutory remedy does not oust writ jurisdiction, particularly where the challenge concerns the jurisdictional basis of the executive action.

The petitioners were not relegated to the remedy before the Adjudicating Authority.

Scheduled offence as jurisdictional foundation for money-laundering proceedings - Acceptance of cancellation report in predicate offence - Revival of PMLA proceedings - Continuation of the ECIR founded exclusively on alleged fraudulent share transfers and bank transactions after acceptance of the cancellation report in the predicate FIR - HELD THAT: - The existence of a scheduled offence and proceeds of crime derived from criminal activity relating to it are conditions precedent to proceedings under the PMLA. Acceptance of the cancellation report and dismissal of the protest petition brought the predicate FIR to an end; the pendency of a challenge without any stay did not preserve a subsisting scheduled offence. The ECIR and coercive action founded on that FIR consequently lacked jurisdiction, though revival may be sought if a superior court revives the predicate investigation.

The ECIR proceedings and consequential coercive action, insofar as founded on the second FIR, were quashed, subject to liberty to seek revival upon revival of the predicate investigation; status quo ante was directed to be restored.

Addendum to ECIR and colourable exercise of power - Judicial review of administrative action - Prior FIR as additional scheduled offence - Validity of the addendum incorporating an earlier FIR concerning alleged confinement, jewellery and passport-related allegations into an ECIR whose original predicate FIR had been cancelled - HELD THAT: - Though an addendum to an ECIR is not inherently impermissible, it is subject to judicial review on grounds of illegality, irrationality, procedural impropriety and colourable exercise of power. The earlier FIR had been in existence before registration of the ECIR, and the Directorate was aware of it at least from its own counter-affidavit, yet invoked it only after the original predicate FIR was brought to an end. An addendum could not revive an ECIR that had lost its foundational predicate offence; the materially distinct allegations, persons accused and property involved also substantially weakened the asserted nexus between the two FIRs.

The addendum and all coercive action taken pursuant to it were quashed, with restoration of status quo ante; the Directorate was left free to proceed independently in accordance with law on the first FIR if the statutory requirements were satisfied.

Final Conclusion: The writ petitions were allowed to the extent that the ECIR, its addendum, and all consequential coercive proceedings were quashed, subject to the Directorate's liberty to seek revival if the predicate investigation is revived by a competent superior court. Status quo ante was directed to be restored in favour of the petitioners.

Anticipatory bail in money-laundering investigation - Prima facie case and non-cooperation with investigation - Custodial interrogation

Grant of anticipatory bail to a person alleged to have controlled illegal call-centre operations and layered proceeds of crime through shell entities and hawala channels - HELD THAT: - At the anticipatory-bail stage, the Court is not required to undertake a meticulous evaluation of evidence, but must ascertain whether the allegations prima facie disclose a serious offence. The material collected indicated the petitioner's alleged control over the call-centre operations, receipt and layering of proceeds of crime, and unsatisfactory explanation for substantial bank credits. His repeated failure to join investigation, incomplete statement, unanswered questions concerning the financial trail, and declaration as a proclaimed person showed non-cooperation and justified the need for an effective investigation.

The absence of a requirement for custodial interrogation, by itself, cannot warrant anticipatory bail where a prima facie case and the gravity of allegations militate against discretionary protection. [Paras 6, 7, 8, 9, 10]

Anticipatory bail was declined and the petition was dismissed, without expressing any opinion on the merits of the investigation.

Final Conclusion: The petition for anticipatory bail was dismissed in view of the prima facie material, the seriousness of the alleged money-laundering offence, and the petitioner's failure to cooperate with the investigation.

Complaint concerning alleged money laundering - The writ petition was disposed of upon the respondent's assurance that the complaint would be taken up and dealt with in accordance with law; no time limit was prescribed.

Regular bail in money-laundering offence - Mandatory twin conditions for bail - Parity in bail orders - Validity of regular bail granted for an offence of money laundering on parity with anticipatory bail granted to another accused in respect of offences not under the Prevention of Money-Laundering Act, 2002 - HELD THAT: - The anticipatory bail relied upon for parity concerned offences under the BNS and the TSPDFE Act, and not an offence under the Prevention of Money-Laundering Act, 2002. Since the respondent was charged with money laundering, the stringent requirements of Section 45 applied. Cooperation with the investigation could not, by itself, justify bail where the trial Court had neither adverted to nor recorded satisfaction regarding the mandatory twin conditions. [Paras 6]

The bail order was set aside and the bail granted to the respondent was cancelled; the respondent was directed to surrender before the trial Court within the stipulated period.

Final Conclusion: The Criminal Petition was allowed. Bail granted without satisfaction of the mandatory conditions governing bail for a money-laundering offence was cancelled.

Quashing of money-laundering proceedings for want of prima facie material - Corroboration of co-accused statements recorded u/s 50 of the PMLA

Prima facie ingredients of money laundering - Uncorroborated co-accused statements under Section 50 of the PMLA - Mere facilitation and professional association - Whether proceedings for money laundering could continue against the petitioners solely on uncorroborated statements alleging peripheral facilitation, without material establishing knowing participation, control, possession, use, projection or enjoyment of proceeds of crime? - HELD THAT: - Liability for money laundering requires material showing knowing participation, control, possession, projection or actual enjoyment of proceeds of crime. Mere facilitation, intermediary coordination or professional association, without cogent material establishing culpable intent and direct involvement, does not fulfil those ingredients. The material did not show that the petitioners executed the transactions, controlled or operated accounts, participated in the predicate offence, derived benefit from the alleged proceeds, or had a prior meeting of minds. Their implication rested exclusively on uncorroborated statements recorded under Section 50 of the PMLA, unsupported by independent documentary, electronic or other corroborative evidence. Such statements could not by themselves sustain the prosecution; continuation of proceedings would therefore be oppressive and an abuse of process. [Paras 8]

The proceedings against accused Nos. 9 and 16 were quashed and they were discharged of the allegations under the PMLA.

Final Conclusion: The criminal petitions were allowed. The money-laundering proceedings against accused Nos. 9 and 16 were quashed for absence of credible and corroborative material establishing their knowing involvement in the alleged offence.

Bail under the Prevention of Money-laundering Act - Twin conditions for bail

Entitlement to bail of an accused alleged to have participated in misappropriation of homebuyers' funds and money laundering - HELD THAT: - The material, including the FIR registered by the principal accused and the statement recorded under the Act, disclosed the petitioner's alleged involvement in misappropriation of victims' funds. The Court held that the petitioner could not, at this stage, be treated as unconnected with the alleged offence. Bail under the Act is subject to the twin conditions: the prosecution must have an opportunity to oppose bail and, where it does so, the Court must be satisfied that there are reasonable grounds to believe that the accused is not guilty and unlikely to commit an offence while on bail. [Paras 8]

As the statutory conditions for grant of bail were not satisfied, bail was declined.

Final Conclusion: The criminal petition was dismissed and bail was refused.

Service tax on assignment of right to use natural resources - Taxable event for Government services - Reverse charge on royalty and production level payment

Liability to service tax under reverse charge on royalty and production level payment for extraction of coal bed methane under a mining agreement executed before 1 April 2016 - HELD THAT: - For service tax, the taxable event is the provision of service or the agreement to provide it. The right to explore and extract the natural resource was granted under the agreement before Government services to business entities became taxable from 1 April 2016.

Subsequent periodic payments of royalty and production level payment did not alter the point at which the service was agreed to be provided. The Point of Taxation Rules govern the time for payment of tax and do not determine whether the underlying service is taxable. See M/S. SR TRADERS [2023 (5) TMI 766 - CESTAT NEW DELHI] [Paras 7]

No service tax was payable under reverse charge on the royalty and production level payment for the relevant period.

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

Refund of service tax paid on contractual advance where no service was rendered - Inapplicability of limitation for refund of payment not constituting service tax

Refund of service tax paid on a contractual advance which was recovered upon termination of the contract before any service was rendered - HELD THAT: - The contractual advance was recovered through encashment of the bank guarantee after termination of the contract, and no service had been provided to the customer. The appellant had borne the incidence of the amount paid. Consequently, the payment did not retain the character of service tax legally payable, and the limitation prescribed for refund of duty under Section 11B could not be invoked. The cause for refund arose when the advance was recovered upon termination of the contract. [Paras 6, 11, 12, 13]

The refund claim was held not time-barred and was allowed with consequential relief, with a direction to sanction it within 30 days.

Final Conclusion: The appeal was allowed. Service tax paid on the advance, where the contract was terminated and no service was rendered, was directed to be refunded with consequential relief.

Packaging of Third Schedule biscuits as manufacture - Reverse-charge liability for security services on nil expenditure - Reverse-charge liability on non-GTA freight expenses - Reverse-charge liability for payments to consultants - Extended limitation in interpretational service-tax disputes

Packaging of Third Schedule biscuits as manufacture - Manpower supply versus conversion contract - Service-tax liability under reverse charge on conversion and packing of biscuits, alleged to constitute supply of manpower - HELD THAT: - The conversion agreements provided for payment based on the quantity of goods packed and not on the number of persons deployed. Packing and repacking of biscuits, being Third Schedule goods, to render them marketable constituted manufacture under the Central Excise law and was covered by the negative-list entry and the applicable exemption. The Tribunal's earlier decision on identical agreements was held directly applicable; its disregard by the adjudicating authority without reasons was untenable. [Paras 14]

The demand relating to manpower supply, with interest, was set aside.

Reverse-charge liability for security services on nil expenditure - Service-tax liability under reverse charge on security services for a year in which no security expenditure was incurred - HELD THAT: - The figures adopted by the department related to a different financial year, whereas there was admittedly nil security expenditure in the relevant year. Further, the service provider was a body corporate that had charged service tax on its invoices, rendering reverse charge inapplicable. A demand could not be sustained on admitted nil expenditure. [Paras 15, 16]

The demand relating to security services was held unsustainable.

Reverse-charge liability on non-GTA freight expenses - Service-tax liability under reverse charge on amounts recorded in the secondary-freight ledger as alleged GTA services - HELD THAT: - The balance amount in the secondary-freight ledger was established by the ledgers on record to represent non-GTA expenses; the amount paid during audit had already been adjusted. The confirmed GTA demand was therefore not sustainable. [Paras 16]

The GTA-service demand was set aside.

Reverse-charge liability for payments to consultants - Service-tax liability under reverse charge on payments alleged to have been made for legal services - HELD THAT: - On examination of the invoices, the Tribunal found that payments were made to consultants and not to advocates. Consequently, reverse-charge liability for legal services did not arise. [Paras 17]

The demand under the category of legal services was set aside.

Extended limitation in interpretational service-tax disputes - Penalty for suppression with intent to evade - Invocation of the extended limitation period and imposition of penalties for reverse-charge service-tax demands founded on audited statutory records - HELD THAT: - The dispute was purely interpretational and the demands were based solely on the appellant's books and statutory records scrutinised in audit. No positive act of fraud, collusion, wilful misstatement, or suppression with intent to evade was established. The extended period was consequently unavailable, and penalties could not survive when the tax demands were not sustained. [Paras 18]

The demands raised by invoking the extended period and all penalties were set aside.

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

Classification of cleaning and sanitation services vis-a -vis manpower supply service - Service tax demand based solely on mismatch between income-tax and service-tax returns

Classification of cleaning and sanitation services vis-a -vis manpower supply service - Classification of sanitation, housekeeping and cleaning services rendered to Government medical colleges, hospitals and educational institutions as cleaning services or manpower recruitment or supply agency service - HELD THAT: - Manpower supply requires that personnel be supplied to work under the recipient's superintendence or control, with the supplier's accountability confined to the manpower and consideration bearing a direct correlation to personnel deployed. The work orders showed that the appellant undertook cleaning, sanitation and housekeeping work under its own responsibility; they neither required recruitment or supply of manpower nor provided for a separate price for deployment of personnel. The contractual scope, rather than the use of manpower in performing the work, determined the nature of the service.

As decided in Mankeshwar Enterprises [2020 (1) TMI 586 - CESTAT MUMBAI] Appellant was providing ‘Cleaning Service’ through manpower engaged under its control and supervision. They were not supplying manpower to the service receiver to undertake cleaning service under the control and supervision of the service receiver and the same cannot be treated as Manpower, recruitment or Supply Services. [Paras 6]

The services were held classifiable as cleaning services and not as manpower recruitment or supply agency service; the related service-tax demand, interest and penalties were set aside.

Service tax demand based solely on mismatch between income-tax and service-tax returns - Sustainability of the service-tax demand founded only on differences between the income-tax returns and ST-3 returns - HELD THAT: - A difference between income-tax and service-tax returns does not by itself establish suppression or taxable liability, since the two enactments operate on different bases and the variance may arise from revenue-recognition norms, valuation principles, abatements or exemption. In the absence of further corroboration regarding taxability of the services, information drawn from those returns could not sustain the demand. [Paras 7]

The demand under manpower recruitment or supply agency service was independently held unsustainable on this ground.

Service-tax liability on receipt of legal services - HELD THAT: - The appellant did not contest this demand and accepted that the liability had escaped attention. [Paras 8]

The demand with interest was upheld, but no penalty was held imposable in respect of it.

Final Conclusion: The demand under manpower recruitment or supply agency service, with consequential interest and penalties, was set aside. The unchallenged demand on receipt of legal services with interest was upheld, without penalty.

Intermediary services - overseas university admission facilitation - Small service provider exemption - commission from domestic educational institutions

Intermediary services - overseas university admission facilitation - Export of services - Whether services of facilitating Indian students' admissions to foreign universities, for which commission was received from those universities, constituted intermediary services? - HELD THAT: - An intermediary arrangement requires at least three parties and two distinct supplies, namely the main supply and an ancillary facilitation supply. The respondent rendered only one service to the foreign universities and there was neither a tripartite agreement nor involvement in more than one service. The description of the respondent as an agent and receipt of commission did not, by themselves, establish intermediary status, particularly where the respondent supplied the main service on its own account. See Oceanic Consultants Ltd. [2025 (4) TMI 1647 - SC ORDER] [Paras 7, 8]

The services were not intermediary services and the Department's challenge to their treatment as export of services was rejected.

Leviability of service tax on the commission earned from domestic institutions -Small service provider exemption -Whether service tax was payable on commission received from domestic educational institutions when the value of taxable services was within the exemption threshold? - HELD THAT: - For computing the threshold exemption, the value of exported services could not be included. As the commission received from domestic institutions remained within the prescribed aggregate-value limit, the respondent was entitled to the exemption. [Paras 9]

No service tax was chargeable on the commission received from domestic institutions.

Final Conclusion: The Revenue's appeal was dismissed. The respondent's overseas university admission-facilitation services were held not to be intermediary services, and its domestic-institution commission was held exempt within the prescribed threshold.

Classification of foreign satellite transponder bandwidth services - Business Support Service - Telecommunication service provided by non-telegraph authority - Reverse Charge Mechanism - Specific Over General Classification

Whether the services availed by the respondent in the nature of capacity of the transponder on a lease basis in the form of frequency bandwidth provided by the Foreign Satellite Service Providers (‘FSSPs’), is liable to service tax in terms of the Finance Act, 1994 or otherwise? - HELD THAT: - The service received was essentially telecommunication between points on earth through satellite relays, and not infrastructural or other support falling within Business Support Service. The Board's corrected clarification recognised that a service otherwise constituting telecommunication service cannot be classified as Business Support Service merely because the foreign provider is not a telegraph authority.

Since the foreign providers were not telegraph authorities, the telecommunication service was outside the taxable category; the contrary view in Ushodaya Enterprises Private Limited [2020 (3) TMI 457 - CESTAT HYDERABAD] was inapplicable, having been decided on limitation without examining such taxability. [Paras 8, 9]

The alleged liability under Business Support Service was held unsustainable, and the order dropping the show-cause proceedings was upheld.

Final Conclusion: The Revenue's appeal was dismissed. The order dropping the service tax demands on transponder bandwidth services received from foreign satellite service providers was sustained.

Service tax on credit-card interchange fee - Double taxation of merchant discount rate - Separate levy of service tax on interchange fee retained by an issuing bank from the merchant discount rate in credit-card transactions - HELD THAT: - The Supreme Court's decision in Citi Bank N.A. [2024 (10) TMI 1549 - SUPREME COURT] established that merchant discount rate is a composite charge, encompassing the acquiring bank fee, the issuing bank's interchange fee and the platform fee. There is one unified credit-card service to the cardholder and merchant, and where service tax has been discharged on the entire merchant discount rate, the subsequent bifurcation of interchange fee does not attract a separate levy.

As the tax on the entire merchant discount rate had been paid and there was no revenue loss, separate taxation of the interchange fee would result in double taxation. [Paras 9]

The demands of service tax on interchange fee, with consequential interest and penalties, were held unsustainable and were set aside.

Final Conclusion: The impugned orders confirming service-tax demands on interchange fee, together with interest and penalties, were set aside. The appeals were allowed with consequential relief in accordance with law.

CENVAT credit on employee and vehicle insurance services - Input service definition prior to 1 April 2011 - Activities relating to business

Availability of CENVAT credit on service tax paid on insurance for vehicles belonging to the assessee and medical and accidental insurance policies for its employees during the period preceding 1 April 2011 - HELD THAT: - The unamended definition of input service was of wide import and its inclusive limb covered services used for activities relating to business, even where they were not directly used for provision of output services. Applying the Larger Bench decision in Tata Teleservices (Maharashtra) Ltd. [2024 (3) TMI 1407 - CESTAT MUMBAI [LB]] insurance services obtained for employees and their family members constituted input services, and no integral connection with the business of manufacture was required for the pre-1 April 2011 period. [Paras 3, 4]

The denial of CENVAT credit, with consequential interest and penalty, was unsustainable; the impugned order was set aside and the appeal was allowed.

Final Conclusion: For the disputed period, the insurance services qualified as input services under the unamended definition. The impugned denial of CENVAT credit and consequential liabilities was set aside.

CENVAT credit on documented receipt of inputs - Extended period of limitation - absence of suppression

CENVAT credit on documented receipt of inputs - Entitlement to CENVAT credit on iron and steel scrap covered by supplier invoices alleged to be paper invoices - HELD THAT: - The appellant established receipt and accounting of the inputs through proper invoices, stock records, vendor ledger and bank statements evidencing payment. Revenue's case rested solely on material purportedly recovered from the supplier, without corroboration in the appellant's proceedings; further, the supplier was not made a co-noticee. The allegation concerning the supplier could not, therefore, justify denial of credit to the appellant. See M/S. JUHI ALLOYS LTD. [2013 (7) TMI 561 - CESTAT NEW DELHI] [Paras 9, 11]

The demand denying CENVAT credit was set aside on merits.

Extended period of limitation - absence of suppression - Invocation of the extended period for recovery of CENVAT credit on inputs purchased during November 2010 to December 2010 - HELD THAT: - The transactions and availment of credit had been recorded in the RG 23A Part I records and formed part of the ER-1 returns. In the absence of proof of suppression by the appellant, the extended period could not be invoked for the credit demand. [Paras 12]

The credit demand was independently held barred by limitation.

Duty on shortage of finished goods - Penalty for unaccounted shortage of finished goods - Duty, interest and penalty arising from the physical shortage of MS ingots and steel ingots - HELD THAT: - The appellant had not substantively contested the shortage at any stage and had paid the duty immediately upon its detection. The demand and penalty had consequently attained finality; however, immediate payment excluded liability to interest. [Paras 7]

The duty demand and corresponding penalty were sustained, while interest was held not payable.

Penalty on Director for unaccounted shortage of finished goods - Penalty imposed on the Director in connection with the unaccounted shortage of finished goods - HELD THAT: - The penalty was not contested before the appellate authority and remained unchallenged in the proceedings. [Paras 13]

The penalty on the Director was held recoverable.

Final Conclusion: The denial of CENVAT credit was set aside both on merits and as time-barred. The duty and penalty relating to the uncontested shortage, and the uncontested penalty on the Director, were sustained, subject to exclusion of interest on the shortage demand.

CENVAT credit on services used for setting up of factory - Main clause and exclusion clause of input service definition - Eligibility of CENVAT credit on services availed for setting up the manufacturing plant after omission of the expression "setting up" from the inclusive part of the definition of input service

HELD THAT: - The main part of the definition covers services used directly or indirectly in or in relation to manufacture. Setting up a factory is an activity directly in relation to manufacture, since manufacture cannot commence without it. Deletion of "setting up" from the inclusive clause does not by itself render such services ineligible; credit remains available where the service falls within the main clause and is not specifically barred by the exclusion clause. [Paras 5]

The matter was remanded to the Adjudicating Authority for limited re-examination of each service with the appellant's documentary evidence to determine whether it falls within an exclusion clause; the appeals were partially allowed by remand.

Final Conclusion: The denial of credit solely because the services were used for setting up the plant was not sustainable. The service-wise admissibility of credit was remanded for verification against the exclusion clause and supporting documents.

Penalty for issuing or abetting improper excise documents - Abetment of ineligible CENVAT credit

Penalty on the proprietor for the purchaser's alleged availment of ineligible CENVAT credit, where the proprietor neither issued an excise invoice nor abetted preparation of any document enabling such credit. - HELD THAT: - Penalty under Rule 26(2) is attracted only where a person issues an excise-duty invoice without delivery of goods, abets its making, or abets preparation of a document on the basis of which ineligible benefit is likely to be or has been taken. The Department failed to establish that the appellant issued or abetted any such invoice or document. The appellant, having received the goods from a broker, could not be held liable for the purchaser's alleged illegal availment of credit. [Paras 8, 9]

The penalty imposed under Rule 26(2) was unsustainable and was set aside.

Final Conclusion: The appeal was allowed and the penalty under Rule 26(2) of the Central Excise Rules, 2002 was set aside.

CENVAT credit on scrap received under dealer invoices - Mismatch in description of inputs - Reliance on uncorroborated statements

Denial of CENVAT credit on scrap used for melting, on the ground that the description in the dealer's invoices did not correspond with the description in the assessee's goods receipt notes - HELD THAT: - The documentary record established that the purchase order, dealer invoices, transport documents and goods receipt notes corresponded as to invoice particulars, purchase order, quantity and vehicle number. The goods were recorded as MS scrap because they were used as scrap in the melting process. The differing description alone did not establish non-receipt of goods. Further, the identical statements attributed to two executives, recorded separately, could not, without documentary corroboration, be the sole basis for concluding that only invoices and not goods had been received.

Under Rule 3 of the CENVAT Credit Rules, credit on duty-paid goods received and used in manufacture cannot be denied solely on such mismatch in description. The assessee correctly availed CENVAT credit; its denial was unsustainable.[Paras 6]

The denial of CENVAT credit was unsustainable; the impugned appellate order was set aside and the appeal was allowed.

Final Conclusion: The Tribunal restored the position that CENVAT credit was admissible on the documented receipt and use of scrap. A mere discrepancy in description, supported only by uncorroborated identical statements, did not justify denial of credit.

Cheating by dishonest inducement - Criminal conspiracy - proof of agreement - Proof beyond reasonable doubt

Cheating by dishonest inducement - Conviction for cheating in relation to the issuance of a certificate permitting transfer of attached properties - HELD THAT: - Cheating requires proof of a false representation made fraudulently or dishonestly with intent to deceive, and of the complainant acting on it by delivering property or suffering the requisite harm. The record did not establish that the Income Tax Department acted upon any false representation or alleged collateral security, that the appellants made a dishonest representation while seeking the certificate, or that dishonest inducement resulted in delivery of property. [Paras 34, 36]

The essential ingredients of cheating were not proved against the appellants.

Criminal conspiracy - proof of agreement - Conviction for criminal conspiracy to procure issuance of the certificate through alleged collateral security - HELD THAT: - Criminal conspiracy cannot rest on suspicion, association or relationship; the prosecution must prove an agreement or prior meeting of minds to commit an illegal act or a lawful act by illegal means. No direct or substantive evidence established such agreement, the alleged furnishing of the other company's properties as security was unsupported by material, and the acquittal of the public servant alleged to be the principal beneficiary left no independent evidence of conspiracy among the remaining accused. [Paras 31, 37, 38, 39]

The charge of criminal conspiracy was not established.

Selective prosecution of company directors - Proof beyond reasonable doubt - Sustainability of the appellants' convictions where no specific dishonest act was proved and other directors allegedly involved in the company's acts were not arraigned - HELD THAT: - The prosecution did not prove any overt act showing dishonest intent, participation in creation of a mortgage, or benefit derived from the transaction. Having alleged that the company acted through its directors, it could not selectively implicate only certain directors without cogent evidence distinguishing their roles from those omitted. [Paras 40, 41, 42]

The charges against the appellants were not proved beyond reasonable doubt; their convictions and sentences were set aside.

Final Conclusion: The criminal appeals were allowed. The convictions and sentences for cheating and criminal conspiracy were set aside, with consequential refund of any fine paid and cancellation of bail bonds.

Alternative remedy under the SARFAESI Act - Judicial enforcement of disputed one-time settlement

Alternative remedy under the SARFAESI Act - Writ jurisdiction in bank recovery proceedings - Maintainability of the writ petition challenging measures taken under the SARFAESI Act despite the statutory remedy before the Debts Recovery Tribunal - HELD THAT: - Where an effective remedy under the SARFAESI Act is available against action taken under Sections 13(4) and 14, the High Court ordinarily must refrain from exercising writ jurisdiction. The challenge did not fall within any recognised exception to the rule requiring exhaustion of the statutory remedy. [Paras 18, 20, 24]

The writ petition ought not to have been entertained, and the impugned order was liable to be set aside on this ground alone.

Judicial enforcement of disputed one-time settlement - Disputed contractual terms - Validity of the direction requiring the Bank to accept payments under an alleged one-time settlement - HELD THAT: - The existence and terms of the alleged one-time settlement involved material factual disputes, including the authority of the Bank official who signed the notation on the offer letter, the completeness and acceptability of that offer, and the applicable payment conditions. Such disputed questions could not be summarily determined in the writ petition. Even assuming an agreed settlement amount and delayed payment, no principle compelled the Bank to accept belated instalments with interest; the direction effectively imposed a contract upon the Bank and travelled beyond the relief sought. [Paras 29, 30, 31]

The direction enforcing the alleged one-time settlement was unsustainable.

Final Conclusion: The appeal was allowed and the impugned order was set aside. The parties were left free to avail their remedies, including in respect of the one-time settlement proposal, with all rights and contentions reserved.