TaxTMI Updates e-Newsletter
Aug 23,2024

Summary order. Special Leave Petitions dismissed; delay condoned.

Maintainability of Special Leave Petition under administrative threshold prescribed by Circular No.207/1/2024-GST - non-adjudication of merits and reservation of liberty to raise question of law - non-precedential character of High Court order

Maintainability of Special Leave Petition under administrative threshold prescribed by Circular No.207/1/2024-GST - Whether the Special Leave Petitions meet the threshold criterion in Circular No.207/1/2024-GST so as to be entertained by this Court - HELD THAT: - The Court recorded that, in light of Circular No.207/1/2024-GST dated 26.06.2024, the special leave petitions do not satisfy the threshold requirement because the penalty imposed in these matters is only Rs.3.25 lacs. Consequently the petitions were not entertained on merits and were disposed of on that basis. The Court therefore declined to consider or determine the substantive legal questions raised in the petitions in view of the administrative threshold set out in the circular.

Petitions do not meet the circular's threshold and are disposed of without consideration on merits.

Non-adjudication of merits and reservation of liberty to raise question of law - non-precedential character of High Court order - Whether the Court has decided the merits and whether the impugned High Court order is to operate as a precedent - HELD THAT: - The Court expressly refrained from adjudicating the merits or interpreting the departmental contentions, stating that these matters were not considered. The Court further noted the High Court's statement in the impugned order that it would not act as a precedent and reiterated that position. The petitioner was granted liberty to agitate any question of law that may arise in these cases in an appropriate forum despite the present disposal.

Merits not decided; High Court's non-precedential remark reiterated; liberty reserved to petitioner to raise questions of law.

Final Conclusion: Special leave petitions disposed as not meeting the administrative threshold in Circular No.207/1/2024-GST; merits not considered, High Court's non-precedential view reiterated, and liberty reserved to the petitioner to raise any question of law.

Proceedings under section 130 of the GST Act - proceedings under Sections 73/74 of the GST Act - excess stock discovered during survey - determination under Section 35(6) in accordance with Sections 73/74

Proceedings under section 130 of the GST Act - excess stock discovered during survey - Invocation of proceedings under section 130 of the GST Act where excess stock is found during a survey - HELD THAT: - The Court observed that survey was conducted and excess stock was found at the petitioner's premises and relied on earlier precedents of this Court which have consistently held that discovery of excess stock during survey does not justify initiation of proceedings under section 130. The reasoning reflected the distinction between the powers available on survey/inspection and the statutory machinery for determination/quantification of tax, and reaffirmed that section 130 cannot be put to service merely because excess stock is located during a survey. [Paras 7, 9]

Proceedings under section 130 cannot be initiated merely because excess stock is found at the time of survey; such invocation is impermissible.

Determination under Section 35(6) in accordance with Sections 73/74 - proceedings under Sections 73/74 of the GST Act - Mode of determination and quantification of tax where unaccounted goods are found - HELD THAT: - Referring to the scheme of the Act and earlier decisions, the Court noted that Section 35(6) deems unaccounted goods to be supplied but mandates that determination/quantification of tax on such 'deemed supply' must be carried out in accordance with Sections 73 or 74. The Court relied on the interpretation that while unaccounted goods may be deemed supplies, the proper officer is bound to follow the procedure and safeguards provided in Sections 73/74 when fixing tax, interest and penalty. [Paras 7, 10]

Determination and quantification of tax in respect of unaccounted goods under Section 35(6) must be made by following the procedure laid down in Sections 73/74, and not by resort to Section 130.

Proceedings under section 130 of the GST Act - proceedings under Sections 73/74 of the GST Act - Validity of the impugned orders passed by the authorities invoking section 130 - HELD THAT: - Applying the legal principles above and the precedents relied upon, the Court found that the authorities had proceeded under section 130 despite the finding of excess stock and without following the statutory regimen under Sections 73/74. The Court concluded that the orders founded on such exercise under section 130 were legally unsustainable. [Paras 10, 11]

The impugned orders passed by the first appellate authority and the assessing authority invoking section 130 are quashed.

Final Conclusion: The writ petition is allowed; the orders dated 24.01.2023 and 03.04.2024 are quashed on the ground that proceedings under section 130 could not lawfully be invoked where excess stock was found and determination of tax must proceed under Sections 73/74 as required by law.

Levy of GST on Ocean Freight Services - ultra vires - refund of wrongly collected tax - rectification under Section 161 of the CGST Act - non constitution of the Goods and Services Tax Appellate Tribunal

Levy of GST on Ocean Freight Services - ultra vires - refund of wrongly collected tax - Entitlement to refund of GST collected on ocean freight in view of the Supreme Court decision striking down the notifications levying GST on ocean freight services. - HELD THAT: - The Court recorded that the question of levy of GST on ocean freight services has been conclusively decided by the Supreme Court, which confirmed the Gujarat High Court's decision striking down Notification No.8/2017-IT(Rate) and the relevant entry of Notification No.10/2017-IT(Rate) as ultra vires the CGST and IGST legislative scheme. Since those notifications have been held ultra vires, the respondents were without power to collect GST on ocean freight and are accordingly obliged to refund the tax collected. The writ petition was allowed to the extent of directing sanction and grant of the refund claimed for the month in question, subject to appropriate interest as adjudicated between the parties.

Petitioner entitled to refund of GST collected on ocean freight for July 2019; respondents directed to sanction and grant the refund with appropriate interest.

Rectification under Section 161 of the CGST Act - non constitution of the Goods and Services Tax Appellate Tribunal - Validity of respondents' refusal to allow rectification on the ground of alternative remedy before the Appellate Tribunal when the Tribunal is not constituted. - HELD THAT: - The petitioner had filed an application for rectification under Section 161 of the CGST Act which was rejected on the basis that remedy lay before the GST Appellate Tribunal. The Court noted that the Tribunal has not been constituted and therefore is not in existence; in those circumstances the reliance on an unavailable statutory remedy could not prevent judicial relief. Consequently, the writ petition was entertained and disposed of by directing refund rather than requiring forum exhaustion before a non existent tribunal.

Rejection of rectification plea on the ground of availability of remedy before the unconstituted Tribunal did not bar the writ; relief by way of refund was granted.

Final Conclusion: Writ petition allowed: respondents directed to sanction and grant the refund for July 2019 with appropriate interest; connected petitions closed; no costs.

Quashing of order - mechanical decision / non-application of mind - consideration of reply and supporting documents - opportunity of personal hearing - detailed speaking order - remand for fresh consideration

Quashing of order - mechanical decision / non-application of mind - consideration of reply and supporting documents - Impugned order dated 30.04.2024 is liable to be set aside for lack of application of mind where the petitioner had filed detailed replies and supporting documents which were not considered. - HELD THAT: - The Court found that the show cause notice dated 28.12.2023 elicited a substantive reply from the petitioner (dated 11.03.2024) including final reconciliations, reconciliation of E-Way bill turnover with GSTR-1 and seven supporting documents, as well as GSTR-9 and audited balance sheet. The respondent, however, confirmed the allegations by a one line order stating that "documents are incomplete" without addressing or considering the reconciliations and documents placed on record. Given the absence of a reasoned consideration and the mechanical nature of the impugned order, the Court concluded that the order suffers from non-application of mind and must be set aside. [Paras 4]

Impugned order dated 30.04.2024 set aside.

Remand for fresh consideration - opportunity of personal hearing - detailed speaking order - consideration of reply and supporting documents - Matter remitted to the respondent for fresh consideration of the petitioner's reply and supporting documents, with opportunity of personal hearing and requirement to pass a detailed speaking order. - HELD THAT: - Instead of deciding the controversy on the basis of the materials already filed, the respondent had passed a non-speaking, single-line order. The Court therefore remitted the matter back to the respondent with directions to take into account the final reconciliation, reconciliation of E-Way bill turnover with GSTR-1 and the seven enclosures, to afford the petitioner a personal hearing, and thereafter to pass a reasoned and speaking order in accordance with law. [Paras 4]

Matter remitted to respondent to reconsider replies and documents, grant personal hearing, and pass a detailed speaking order.

Final Conclusion: The writ petition is disposed of by setting aside the impugned order dated 30.04.2024 and remitting the matter to the respondent for fresh, reasoned consideration of the petitioner's replies and supporting documents after affording a personal hearing; no order as to costs.

Violation of principles of natural justice - service of notices through electronic portal (Additional Notices and Orders) - setting aside assessment order - conditional quashing subject to deposit - opportunity of personal hearing by physical notice - reconsideration on merits after compliance

Violation of principles of natural justice - service of notices through electronic portal (Additional Notices and Orders) - setting aside assessment order - Impugned Assessment Order dated 06.04.2024 for 2018-2019 set aside for breach of natural justice - HELD THAT: - The Court found that all communications and notices were uploaded under the portal's "Additional Notices and Orders" column, to which the petitioner had no occasion to look; consequently the assessment order was passed without affording the petitioner an opportunity to establish its case before the authorities. This procedural defect amounted to a violation of the principles of natural justice, warranting setting aside of the impugned assessment order. The Court accordingly quashed the assessment order dated 06.04.2024, subject to the conditional directions contained in the order.

Impugned Assessment Order dated 06.04.2024 bearing GSTIN No.33AAACZ4106B1ZZ/2018-2019 is set aside for violation of principles of natural justice.

Conditional quashing subject to deposit - opportunity of personal hearing by physical notice - reconsideration on merits after compliance - Assessment remitted for fresh consideration on merits after compliance with conditions and affording physical hearing - HELD THAT: - The Court imposed a condition of deposit by the petitioner to secure compliance and protect revenue interest. On deposit of the directed sum within four weeks, authorities were directed to lift the attachment against the petitioner's supplier. The petitioner must then file a reply within two weeks, after which the authorities shall fix a date for personal hearing by sending a physical notice providing 14 days' time. Thereafter the authorities are to pass orders on merits and in accordance with law. Thus the matter is remanded for fresh adjudication on merits, with a mandated procedure to cure the procedural deficiency that vitiated the earlier order.

Matter remitted to the authorities for fresh consideration on merits after the petitioner makes the directed deposit, files a reply, and is afforded a physical personal hearing; authorities to then pass orders in accordance with law.

Final Conclusion: The writ petition is disposed of by setting aside the assessment order dated 06.04.2024 for 2018-2019 on grounds of violation of natural justice, subject to the petitioner depositing the directed sum within four weeks; upon compliance the authorities shall lift the attachment, accept the petitioner's reply, afford a physical hearing and thereafter decide the matter on merits. There shall be no order as to costs.

Show cause notice - principles of natural justice - cancellation of GST registration - retrospective cancellation of registration - revocation of cancellation - fraud, wilful misstatement or suppression of facts

Show cause notice - fraud, wilful misstatement or suppression of facts - principles of natural justice - The show cause notice proposing cancellation of the petitioner's GST registration was legally deficient. - HELD THAT: - The SCN merely recited the ground that registration was obtained by means of fraud, wilful misstatement or suppression of facts without specifying any particulars, identifying any alleged misstatement, or describing any suppressed facts. A SCN must furnish intelligible and specific allegations to enable the noticee to make a meaningful response; the cryptic notice in this case was incapable of eliciting such a response and therefore did not meet the standards required of a show cause notice. For these reasons the SCN violated the principles of natural justice and could not be sustained. [Paras 2, 7, 8]

SCN set aside as legally deficient and violative of natural justice.

Cancellation of GST registration - retrospective cancellation of registration - revocation of cancellation - The impugned order cancelling the petitioner's GST registration with retrospective effect is unsustainable. - HELD THAT: - The impugned order made retrospective cancellation effective from 22.04.2018 though the SCN did not propose retrospective cancellation; the order contains no particulars or reasoning justifying retrospective effect. An order of cancellation passed in such circumstances, and without adherence to the requirements of a proper SCN and principles of natural justice, cannot be sustained. Consequently the cancellation order was set aside and the petitioner's GST registration was directed to be restored. The respondents remain free to initiate fresh proceedings in accordance with law. [Paras 9, 10, 11, 12]

Impugned cancellation order set aside; GST registration restored; fresh proceedings may be initiated in accordance with law.

Final Conclusion: The SCN and the order cancelling the petitioner's GST registration with retrospective effect are quashed for want of requisite particulars and for violation of natural justice; the petitioner's registration is restored forthwith while preserving the respondents' right to initiate fresh proceedings in accordance with law.

Remand for fresh consideration - opportunity of personal hearing - difference between Form GSTR 3B and Form 26AS - failure to consider reply - interim relief conditional on deposit of percentage of demand

Failure to consider reply - difference between Form GSTR 3B and Form 26AS - opportunity of personal hearing - remand for fresh consideration - interim relief conditional on deposit of percentage of demand - Impugned order set aside and matter remanded for fresh consideration with conditions - HELD THAT: - The respondent issued a notice based on a discrepancy between turnover reported in Form 26AS and Form GSTR 3B for July 2017 to March 2018. The petitioner had submitted that the discrepancy arose because Form 26AS included turnover for April 2017 to June 2017 (period prior to commencement of GST) whereas Form GSTR 3B did not include that period. The Court found that this aspect was not considered by the respondent when passing the impugned order and that the petitioner had been granted an opportunity of personal hearing which was not availed due to the accountant's resignation. In view of the non-consideration of the petitioner's reply and the existence of a potentially determinative explanation for the turnover difference, the Court set aside the impugned order and remanded the matter for fresh consideration. The remand is subject to a conditional interim direction: the petitioner must deposit 10% of the demand within four weeks, file objections and documents within two weeks thereafter, and the respondent must give 14 days' clear notice fixing a personal hearing and thereafter decide the matter on merits expeditiously and in accordance with law. [Paras 6]

Impugned order dated 12.12.2023 is set aside and the matter is remanded to the respondent for fresh consideration on the stated conditions including deposit of 10% of the demand and a fresh personal hearing.

Final Conclusion: Writ petition disposed by setting aside the impugned order and remanding the matter for fresh adjudication after the petitioner deposits 10% of the demand, files objections and documents, and is afforded a fresh personal hearing; no costs.

Requirement of specificity in a show cause notice - cancellation of GST registration for issuing invoice without supply - suspension of GST registration - Rule 21(b) of the Central Goods and Services Tax Rules, 2017

Requirement of specificity in a show cause notice - cancellation of GST registration for issuing invoice without supply - suspension of GST registration - The impugned show cause notice proposing cancellation of the petitioner's GST registration was quashed for lack of requisite specificity and the petitioner's GST registration was ordered restored. - HELD THAT: - The show cause notice reproduced the language of Rule 21(b) of the CGST Rules without identifying any particular invoice, bill or transaction alleged to have been issued without supply of goods or services. No documents were annexed and no specific allegation was stated to enable the petitioner to meet the case against him. The purpose of a show cause notice is to enable the addressee to respond to the specific allegations on which adverse action is proposed; a notice devoid of such particulars fails to meet the requisite standards. For these reasons the impugned notice was found to be cryptic and meaningless as a basis for cancellation and suspension of registration. The Court set aside the impugned notice and directed restoration of registration, while clarifying that the proper officer remains free to initiate fresh proceedings in accordance with law. [Paras 8, 9, 10, 11]

Impugned show cause notice quashed for lack of specificity; GST registration restored; proper officer permitted to initiate fresh proceedings if warranted.

Final Conclusion: The petition is allowed: the show cause notice dated 02.07.2024 is set aside and the petitioner's GST registration is restored forthwith; the proper officer may, if warranted, initiate fresh proceedings in accordance with law.

Cancellation of GST registration - principles of natural justice - failure to supply inspection report and documentary evidence to the registered person - retrospective cancellation without notice - show cause notice and opportunity to be heard

Cancellation of GST registration - principles of natural justice - failure to supply inspection report and documentary evidence to the registered person - show cause notice and opportunity to be heard - Impugned cancellation order set aside for violation of natural justice where the Proper Officer did not consider the petitioner's reply and did not provide the documents on which cancellation was based. - HELD THAT: - The Court found that although the petitioner had filed a reply to the SCN and had annexed documents asserting existence at the principal place of business, the Proper Officer passed the cancellation order without addressing or recording consideration of that reply. Documents relied upon by the respondent (inspection report, Panchnama, photographs) were stated to be available to the Proper Officer but were not supplied with the SCN or otherwise provided to the petitioner to enable a response. Because the decision to cancel relied, inter alia, on those documents, failure to furnish them and to consider the petitioner's reply resulted in a decision made without affording an effective opportunity to be heard, thereby violating the principles of natural justice. The cancellation order was therefore not an informed decision and had to be set aside.

Cancellation order set aside insofar as it was passed without considering the petitioner's reply and without providing the documents on which cancellation was premised.

Retrospective cancellation without notice - show cause notice and opportunity to be heard - Retrospective cancellation (with effect from an earlier date) was set aside because such adverse effect was not proposed in the SCN and the petitioner had no opportunity to respond to retrospective cancellation. - HELD THAT: - The Court noted that the impugned order cancelled the petitioner's registration retrospectively, but the SCN did not propose retrospective cancellation or give the petitioner an opportunity to address retrospective effect. Absent any proposal in the SCN, the petitioner was deprived of the chance to explain why cancellation should not be made retrospective. The retrospective effect of the cancellation therefore rendered the order unsustainable in the circumstances and required setting aside.

Order of retrospective cancellation set aside for lack of any notice or opportunity to respond to the proposed retrospective effect.

Final Conclusion: The petition is disposed of by setting aside the impugned cancellation order and SCN insofar as they effected cancellation without affording the petitioner an opportunity to respond to the documents relied upon and without proposing retrospective cancellation; the respondent remains free to issue a fresh show cause notice specifying all grounds and furnishing the relevant documents, and to pass an order thereafter in accordance with law.

Rectification application (errors apparent on the face of the record) - remand for fresh consideration subject to conditional deposit - personal hearing - acceptance and rejection of tax proposals - consideration of additional documents on reconsideration

Acceptance and rejection of tax proposals - personal hearing - consideration of additional documents on reconsideration - Impugned order in original confirming tax proposals in respect of defect nos.5 and 6 set aside and remitted for fresh consideration subject to conditions. - HELD THAT: - The court reviewed the order in original and recorded that the taxpayer's reply and annexed documents were considered; five of seven tax proposals were withdrawn while defect nos.5 and 6 were confirmed with stated reasons (failure to produce MEPZ certificate, agreement, LUT, purchase order, BRC statement in respect of defect no.5; lack of proof of reversal of Input Tax Credit in respect of defect no.6). Although the reasons for confirmation were found to be cogent and not vitiated by lack of consideration, the court, in the interest of justice, granted the taxpayer an opportunity to place the additional documents on record and to be heard. The court conditioned the remand on the taxpayer remitting 20% of the disputed tax demand for defects 5 and 6 within fifteen days and re-submitting all relevant documents within that period. Upon receipt of the remittance and documents, the respondent is directed to afford a reasonable opportunity, including a personal hearing, and to pass a fresh order within three months from receipt of the taxpayer's reply.

Order in original dated 29.12.2023 is set aside insofar as defect nos.5 and 6 and those defects are remitted for fresh consideration on the taxpayer's remitting 20% of the disputed demand, resubmitting documents, and being afforded a personal hearing; fresh order to be passed within three months.

Rectification application (errors apparent on the face of the record) - consideration of additional documents on reconsideration - Order rejecting the rectification application was not sustained; petitioner permitted to re-submit documents and obtain reconsideration though rectification per Section 161 is limited to errors apparent on the face of the record. - HELD THAT: - The court observed that rectification under the applicable GST provision is confined to correcting errors apparent on the face of the record and that the order rejecting rectification referred to an annexure which was not annexed, rendering the rectification order unreasoned. While holding that the additional documents filed would not, by themselves, satisfy the narrow scope for rectification, the court nonetheless, to secure effective opportunity and justice, directed reconsideration of defect nos.5 and 6 after the taxpayer's conditional compliance (remittance and re-submission of documents) and ordered that a personal hearing be afforded prior to issuance of a fresh order.

The order rejecting the rectification application dated 27.05.2024 is effectively set aside to the extent necessary to permit re-submission of documents and reconsideration of defect nos.5 and 6, subject to the conditions imposed by the court.

Final Conclusion: Writ petition allowed in part: original order set aside insofar as defect nos.5 and 6 and rectification rejection set aside for limited reconsideration; petitioner to remit 20% of disputed tax for those defects, re-submit documents within fifteen days, and on satisfaction of the condition respondent to grant a personal hearing and pass a fresh order within three months; writ disposed of on these terms.

Colourable device - legitimate tax planning - substance over form - commercial substance - General Anti-Avoidance Rule

Colourable device - legitimate tax planning - substance over form - commercial substance - Loss claimed on 'off market' sale of listed shares to a partnership firm controlled and managed by the assessee is a colourable device and not eligible for set off or carry forward for A.Y. 2017-18. - HELD THAT: - The Tribunal examined whether the off-market sale to the partnership firm (in which the assessee had controlling interest) was bona fide commercial transaction or an artificial arrangement to create long-term capital loss for set off against exempt and taxable capital gains. The Tribunal found that the partnership paid consideration to the assessee while the shares effectively remained under the assessee's control through the related partnership, resulting in no effective loss of control or economic substance. Reliance was placed on the principles in McDowell and Vodafone that tax planning is permissible only within the framework of law and that colourable devices cannot form part of legitimate tax planning. The arrangement lacked commercial substance and created extraordinary rights and obligations inconsistent with fair dealing; consequently the form had to yield to substance. Although Chapter X-A GAAR applied from A.Y. 2018-19, the Tribunal observed that the facts indicated an impermissible avoidance arrangement and drew inference accordingly, concluding that the off-market transactions were engineered to evade tax and therefore the long-term capital loss could not be allowed for set off or carry forward. [Paras 6, 8, 9, 14]

The appeal is allowed; the assessing officer's disallowance of the long-term capital loss arising from the off-market sales is restored.

Final Conclusion: Revenue appeal allowed; order of the assessing officer disallowing the long-term capital loss on off-market transfers to a related partnership (A.Y. 2017-18) restored and the CIT(A) order setting aside that finding is quashed.

Treatment of interest under Article 11(3) of India-China DTAA - definition of "financial institution wholly owned by the Government" in the Protocol - benefit of DTAA vis-a -vis obligation to deduct tax under section 195 - state ownership through government-controlled entities and subsidiaries - retrospective application or temporal scope of treaty amendment

Treatment of interest under Article 11(3) of India-China DTAA - definition of "financial institution wholly owned by the Government" in the Protocol - state ownership through government-controlled entities and subsidiaries - benefit of DTAA vis-a -vis obligation to deduct tax under section 195 - China Development Bank is a financial institution wholly owned by the Government of China and interest paid to it is exempt under Article 11(3) of the India-China DTAA for the relevant period, so the assessee is not an assessee in default under section 195 for non-deduction. - HELD THAT: - The Tribunal examined ownership and statutory control of the entities holding shares in China Development Bank (CDB), noting that the Ministry of Finance is a State Council organ and that Central Huijin Investment, Buttonwood Investment Holding Company and the National Council for Social Security Fund are state-owned or government-controlled entities acting on behalf of the PRC Government. The audited financial statements and the bye-laws showed that Central Huijin and Buttonwood are wholly owned subsidiaries of government-controlled investment vehicles and that NCSSF is a public institution directly under the State Council. Article 11(3) of the India-China DTAA as in force for the relevant year exempted interest derived by a financial institution wholly owned by the other Contracting State from tax in the source State. The Protocol inserted by Notification No. S.O. 2562(E) (17-7-2019) expressly identifies the China Development Bank as a financial institution wholly owned by the Government of China and uses the word "means", which the Tribunal interpreted as confirming that CDB is and has always been a government-owned financial institution for the purposes of Article 11(3). On that basis, the Tribunal held that the interest payments to CDB fell within the DTAA exemption and that amendment of the Article in 2019 did not negate the applicability of the exemption for CDB in respect of the relevant period, so no withholding obligation under section 195 arose for the assessee. [Paras 12, 16, 17, 18]

The order of the CIT(A) holding that CDB is a government wholly owned financial institution eligible for Article 11(3) exemption is affirmed and the Revenue's appeal is dismissed.

Final Conclusion: The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s finding that China Development Bank is a financial institution wholly owned by the Government of China and that interest paid to it during FY 2015-16 is exempt under Article 11(3) of the India-China DTAA, absolving the assessee from liability to deduct tax under section 195 for those payments.

Validity of reopening assessment and requirement of notice under Section 148 versus notice under Section 143(2) - Additions in respect of unexplained cash credits and unsecured loans under Section 68 - Remand for fresh verification of documentary evidence and observance of principles of natural justice

Validity of reopening assessment and requirement of notice under Section 148 versus notice under Section 143(2) - Whether the assessment completed after reopening under Section 147/148 without issuing a fresh notice under Section 143(2) was valid. - HELD THAT: - The Tribunal examined the sequence of notices and filings. The assessee's original return for A.Y. 2018-19 was filed earlier and the case was reopened by issuance of notice under Section 148. Notices under Section 142(1) were thereafter issued and the assessee responded with submissions and documents. The assessee filed a further return on 14.02.2023, after the issuance of the earlier procedural notices; the Tribunal accepted the CIT(A)'s finding that this belated filing could not be treated as a valid response to the Section 148 notice. The Tribunal observed that the existence of the statutory notice under Section 148 and the subsequent Section 142(1) notices - to which the assessee had opportunity to respond - rendered the contention for a separate Section 143(2) notice untenable in the facts of this case. The Tribunal therefore endorsed the view that no infirmity arose from the Assessing Officer completing assessment under Section 147 after issuing the Section 148 notice and the consequential procedural steps taken. [Paras 9, 10]

Ground no.1 dismissed; assessment under Section 147 completed after issuance of Section 148 and Section 142(1) notices is valid in the facts of this case.

Additions in respect of unexplained cash credits and unsecured loans under Section 68 - Remand for fresh verification of documentary evidence and observance of principles of natural justice - Whether the addition made under Section 68 in respect of unsecured loans was sustainable on the record before the authorities. - HELD THAT: - On examination of the materials, the Tribunal found that certain documentary evidence produced by the assessee before the Assessing Officer and the CIT(A) had not been considered. Given this omission, the Tribunal considered it appropriate to remit the matter to the file of the Assessing Officer for fresh adjudication and verification of the documents and evidences filed by the assessee. The Tribunal directed that the Assessing Officer should adjudicate the issue in accordance with the Income Tax statute and afford the assessee an opportunity of hearing while observing the principles of natural justice. The remand was for verification and proper adjudication rather than a final decision on the merits. [Paras 11]

Ground no.2 partly allowed for statistical purposes and remitted to the Assessing Officer for fresh adjudication and verification after giving the assessee opportunity of hearing.

Final Conclusion: Appeal partly allowed for statistical purposes: the challenge to the validity of the reassessment (ground no.1) is dismissed; the disputed addition under Section 68 (ground no.2) is remitted to the Assessing Officer for fresh verification and adjudication with opportunity to the assessee.

Substantial question of law - admission of appeal under Section 249(4)(a) - payment of admitted tax as condition precedent to admission - remand for adjudication on merits - appeal dismissed in limine - right of appeal not an absolute right

Substantial question of law - admission of appeal under Section 249(4)(a) - payment of admitted tax as condition precedent to admission - Whether the appeal to this Court involved any substantial question of law requiring admission under Section 249(4)(a) of the Income tax Act, 1961. - HELD THAT: - The Court examined the ITAT's order which interpreted Section 249(4)(a) regarding the effect of payment of admitted tax before or after filing an appeal and noted that the ITAT did not decide the matter on merits but followed precedents and remanded for fresh adjudication. The High Court found that the ITAT's approach - treating non payment as a curable defect and directing adjudication after verification of payment/adjustment - involved interpretation of Section 249(4)(a) but did not raise any substantial question of law warranting this Court's intervention. The Court observed that the ITAT relied upon established authorities (including principles that the right of appeal is not absolute) and that the matter was fit for determination by the CIT(A) on merits after verification of compliance with the precondition, rather than immediate admission by this Court.

No substantial question of law is made out; petition for admission is dismissed.

Remand for adjudication on merits - appeal dismissed in limine - Whether the ITAT's remand of the appeals to the CIT(A) for adjudication on merits (after verification of payment/adjustment) was erroneous or prejudicial to revenue. - HELD THAT: - The Court noted that the ITAT did not decide the appeals on merits but set aside the orders of the AO and CIT(A) and remanded the matters to the CIT(A) for adjudication on merits after appropriate verification (including verification of refund/adjustment on the CPC portal). Having regard to the ITAT's reliance on judicial precedents and the limited nature of its order, the High Court held that the remand was not erroneous or prejudicial to the revenue. The High Court concluded that remand for fresh adjudication on merits was an appropriate course where factual verification (payment/adjustment of admitted tax) remained to be undertaken and where the ITAT declined to decide the substantive controversy itself.

The ITAT's remand to the CIT(A) for adjudication on merits is upheld as not erroneous.

Final Conclusion: The petition is without merit and is dismissed in limine; the ITAT's order interpreting Section 249(4)(a) and remanding the matter to the CIT(A) for adjudication on merits is not interfered with.

Stay of recovery pending disposal of appeal - interim relief against enforcement measures (bank attachments) - direction for expeditious disposal of remanded appeal - effect of ex parte appellate order and ITAT remand - application of CBDT Office Memorandum concerning deposit for stay

Direction for expeditious disposal of remanded appeal - effect of ex parte appellate order and ITAT remand - Second respondent directed to dispose of the appeal within six weeks from receipt of certified copy of this order. - HELD THAT: - The High Court observed that the appeal preferred by the petitioner against the assessment order was effectively revived by the ITAT when it set aside the ex parte order and remanded the matter to the second respondent. In view of that remand and the petitioner's undertaking to prosecute the appeal, the Court considered it appropriate in the interest of justice to mandate an expeditious hearing and disposal of the appeal. The Court therefore directed the second respondent to decide the appeal within six weeks from receipt of a certified copy of the Court's order, thereby ensuring timely adjudication of the remanded proceedings. [Paras 8, 9]

Direction given to the second respondent to dispose of the petitioner's appeal within six weeks from receipt of certified order copy.

Stay of recovery pending disposal of appeal - interim relief against enforcement measures (bank attachments) - application of CBDT Office Memorandum concerning deposit for stay - Until the appeal is disposed of, the petitioner shall not be subjected to harassment by the first respondent pursuant to the impugned order; enforcement (including bank attachments) is to remain restrained during that period. - HELD THAT: - The Court took into account that the recovery proceedings arose from an order which had been the subject of an ex parte appellate dismissal later set aside by the ITAT. Considering the pendency of the revitalised appeal and the petitioner's request for protection, the Court granted interim relief restraining the first respondent from taking coercive steps in pursuance of the impugned order until the appeal is decided. The Court thus stayed enforcement pending the second respondent's disposal of the appeal rather than directing compliance with the deposit requirement in the impugned order while the appeal remains pending. [Paras 8, 9]

Interim restraint placed on recovery/enforcement by the first respondent until disposal of the appeal.

Final Conclusion: Writ petition allowed; court directed the appellate authority to dispose of the remanded appeal within six weeks and granted interim protection restraining the first respondent from executing recovery or imposing harassment (including enforcement of bank attachments) until the appeal is disposed of; no costs.

Maintainability of settlement application under Chapter XIX-A - eligibility to file a settlement application as on the statutory cut-off date - quashing of administrative condition as ultra vires - scope of CBDT directions issued under Section 119(2)(b) - role and jurisdiction of the Interim Board for Settlement

Maintainability of settlement application under Chapter XIX-A - eligibility to file a settlement application as on the statutory cut-off date - quashing of administrative condition as ultra vires - Impugned orders of the Interim Board for Settlement rejecting the Petitioner's settlement applications for the stated assessment years as not maintainable were quashed and set aside. - HELD THAT: - The Court examined the legality of the Interim Board's decision to reject the Petitioner's settlement application on the ground that no proceedings were pending as on the specified cut-off date. Relying on this Court's earlier decision in Sar Senapati Santaji Ghorpade Sugar Factory Ltd. (which held that certain additional conditions introduced by a CBDT notification exceeded the Board's powers and were liable to be struck down) and the follow-on decision in Vishwakarma Developers, the Court found that the Interim Board could not sustain rejection of the application on the eligibility ground relied upon. The Revenue conceded applicability of those decisions to the facts of the present case. In consequence, the Court concluded that the Interim Board's refusal to entertain the settlement application was legally impermissible and required setting aside so that the application may be considered on merits in accordance with law. [Paras 11, 12, 13, 14]

Impugned Interim Board orders set aside; Petitioner's settlement application to be proceeded with and adjudicated on merits in accordance with law.

Final Conclusion: Writ petition allowed; orders of the Interim Board for Settlement rejecting the Petitioner's settlement applications for A.Y. 2015-16, 2016-17, 2017-18 and 2020-21 quashed and set aside, and the Interim Board directed to consider and adjudicate the applications on merits in accordance with law.

Deduction under Section 10B - Set-off of unabsorbed depreciation before computing exemption under Section 10B/10A - Computation sequence: adjustment of brought forward losses and depreciation vis-a -vis statutory exemption - Precedential effect of High Court decisions - Impact of pending Supreme Court batch appeals on finality

Deduction under Section 10B - Set-off of unabsorbed depreciation before computing exemption under Section 10B/10A - Precedential effect of High Court decisions - Entitlement to deduction under Section 10B for the assessment year 2008-09 and the sequence for setting off unabsorbed depreciation and brought forward losses in computing that deduction. - HELD THAT: - The Court examined whether the assessee could claim deduction under Section 10B for AY 2008-09 without first having set off unabsorbed depreciation and brought forward losses. Relying on earlier decisions of this Court, including M/s.Comstar Automative Techonologies Pvt. Ltd. and Commissioner of Income Tax v. S.R.A. Systems Ltd., the High Court concluded that the issue is covered in favour of the assessee. The Court noted that those precedents hold that the deduction under Section 10B/10A is to be allowed at the stage indicated by those decisions and that the Assessing Officer's method of first setting off carry forward/unabsorbed depreciation so as to eliminate the possibility of claiming the exemption is contrary to the law as declared by the High Court in the cited cases. Although the respondent pointed to pending batch appeals before the Supreme Court, the Court held that, in view of binding High Court precedents favourable to the assessee and the Tribunal order in the assessee's related year, the appeal should be decided for the assessee. No issue was remanded for fresh consideration.

Appeal allowed in favour of the assessee; deduction under Section 10B for AY 2008-09 to be recognised in accordance with the relevant High Court and Tribunal precedents.

Final Conclusion: Tax Case Appeal allowed in favour of the assessee for AY 2008-09; the computation must follow the controlling High Court and Tribunal decisions permitting the Section 10B deduction as applied in the case.

Depreciation claim on leased assets where the assessee is the owner but the lessee uses the asset - ownership and use for purposes of business under Section 32 - application of Supreme Court decision in I.C.D.S. Ltd. [2013 (1) TMI 344 - SUPREME COURT] to leasing business - interest under Section 220(2) chargeable only up to the original assessment order passed under Section 143(3)

Depreciation claim on leased assets where the assessee is the owner but the lessee uses the asset - ownership and use for purposes of business under Section 32 - application of Supreme Court decision in I.C.D.S. Ltd. to leasing business - Assessee entitled to claim depreciation on leased assets where it is owner and leasing is its business, notwithstanding that lessee is the actual user of the assets. - HELD THAT: - The Court applied the Supreme Court's reasoning in I.C.D.S. Ltd., holding that Section 32 requires ownership and that the asset be used for the purposes of the assessee's business, but does not mandate personal use by the assessee. Where leasing constitutes the assessee's business and the income from leasing is assessed as business income, the leased assets are used for the purposes of the assessee's business. The Tribunal's findings as to existence of assets, discharge of purchase consideration, lease agreements, confirmation by lessees and assessment of lease rentals as business income were accepted. The assessing officer's characterisation of the transactions as mere finance arrangements devoid of genuine ownership/use was rejected in light of the statutory test and the binding precedent. [Paras 11, 12]

Ground of revenue's appeal on disallowance of depreciation is negatived and the Tribunal's deletion of the disallowance is upheld.

Interest under Section 220(2) chargeable only up to the original assessment order passed under Section 143(3) - consequential nature of interest upon deletion of disallowance - Interest under Section 220(2) held not chargeable beyond the original assessment order passed under Section 143(3) where the disallowance giving rise to interest is set aside. - HELD THAT: - The Court agreed with the Tribunal that the interest charged under Section 220(2) was consequential to the disallowance of depreciation. Once the Tribunal allowed the depreciation claim and set aside the disallowance, the further interest charged beyond the original assessment order was not payable. Accordingly, the deletion of the interest by the Tribunal was sustained. [Paras 13]

Tribunal's deletion of the interest under Section 220(2) is upheld and revenue's challenge on this point fails.

Final Conclusion: Revenue's appeals are dismissed: the Tribunal's allowance of depreciation on leased assets (for the stated assessment years) applying I.C.D.S. Ltd. is upheld, and the consequential deletion of interest under Section 220(2) is sustained.

Retrospective application of statutory amendment - Curative amendment vs substantive amendment - Section 40(a)(ia) disallowance for failure to deduct or deposit TDS - Benefit of amendment not available to a defaulting assessee

Section 40(a)(ia) disallowance for failure to deduct or deposit TDS - Retrospective application of statutory amendment - Curative amendment vs substantive amendment - The Tribunal erred in holding that the amendment to Section 40(a)(ia) by the Finance Act, 2014 applies retrospectively to assessment year 2006-07 and thereby restricting the disallowance to 30% of the expenditure. - HELD THAT: - The Court applied the law as expounded by the Supreme Court in Shree Choudhary Transport Co., which held that the amendment effected by the Finance Act, 2014 was substantive and not a curative or procedural amendment; consequently it cannot be given retrospective effect so as to avail benefit for earlier assessment years. The Tribunal's approach to grant retrospective operation of the substantive amendment and reduce the disallowance to 30% was therefore contrary to the binding precedent. The Revenue's contention that the Finance Act, 2014 amendment could not be invoked to ameliorate defaults in earlier years was upheld, and the Tribunal's reliance on decisions treating the amendment as retrospective was held to be misplaced. [Paras 9, 10]

Impugned order of the Tribunal quashed and set aside; question of law answered in favour of the Revenue and against the assessee.

Final Conclusion: The appeal is allowed; the Tribunal was incorrect in applying the Finance Act, 2014 amendment to Section 40(a)(ia) retrospectively for assessment year 2006-07, and its order restricting the disallowance to 30% is quashed.

Provision for expenses - allowability of provision - scientific basis for provision - accrual basis - Dispute Resolution Panel direction - provision not allowable unless on scientific basis

Provision for expenses - freight and material handling charges - scientific basis for provision - accrual basis - Allowability of the provision of Rs. 16,27,824/- for freight and material handling charges - HELD THAT: - The assessee made a month-end provision of Rs. 16,27,824/- though total freight and handling debited during the year was larger. The DRP directed the AO to examine on what basis the provision was created and to allow the amount if it was created on a scientific or other concrete basis. The assessee replied that the provision was made on an accrual basis and invoices were received in the subsequent year and adjusted against the provision. However, no documentary evidence was furnished either before the AO or the Tribunal to demonstrate that the expenditure had accrued during the year or that the provision was calculated on a scientific basis. A list of entities paid in subsequent years did not establish receipt of services in the relevant year. Since the proviso was treated as a mere estimate without supporting material showing a scientific basis, the Tribunal concurs with the AO that the provision is not an allowable deduction. [Paras 3]

Provision of Rs. 16,27,824/- for freight and material handling charges is disallowed.

Provision for expenses - IT support expenses - scientific basis for provision - provision not allowable unless on scientific basis - Allowability of the provision of Rs. 48,08,167/- included in IT support expenses - HELD THAT: - The assessee debited IT support expenses and admitted that the provision of Rs. 48,08,167/- was made on an estimated basis with invoices received in the subsequent year. The DRP had directed verification whether the provision was made on a scientific basis. The assessee did not produce any documentary evidence before the AO or the Tribunal to demonstrate that the provision was computed on a scientific or concrete basis; the assessee itself characterized the provision as estimated. Applying the established principle that provisions are not allowable unless shown to have been made on a scientific basis, the Tribunal finds the provision unsupported and not deductible. [Paras 4]

Provision of Rs. 48,08,167/- forming part of IT support expenses is disallowed.

Final Conclusion: Both heads of provision challenged in Ground No. 9 - the freight and material handling provision and the IT support provision - were held to be ineligible as deductions for A.Y.2009-10 because the assessee failed to demonstrate that either provision was made on a scientific or concrete basis; Ground No. 9 is dismissed.

Hardship allowance - capital receipt - not taxable as income - income from other sources - reassessment under section 143(3) r.w.s. 147 of the Act - following decision of Hon'ble Bombay High Court

Hardship allowance - capital receipt - not taxable as income - following decision of Hon'ble Bombay High Court - Hardship allowance of Rs. 25,21,508 received from developer is not taxable as income but is a capital receipt and the addition made in reassessment is to be deleted. - HELD THAT: - The Tribunal considered that the assessee received a payment described as hardship allowance/compensation from the developer in consequence of redevelopment of the co-operative housing society. The claim that this payment is a capital receipt was examined in light of the decision of the Hon'ble Bombay High Court in Writ Petition No. 4958 of 2024 (Sarfaraz S. Furniturewalla) dated 15.04.2024, which held that hardship and rehabilitation allowances paid by a developer to dispossessed members are not revenue receipts and are not liable to tax. The fact that the assessee undisputedly received such hardship allowance was noted. Applying the High Court precedent, the Tribunal held that the amount is not assessable as income and directed deletion of the addition made by the Assessing Officer in the reassessment proceedings under section 143(3) r.w.s. 147. [Paras 10, 11]

Deletion of the addition of Rs. 25,21,508/-; appeal allowed.

Final Conclusion: Appeal allowed; the hardship allowance of Rs. 25,21,508/- received by the assessee is held to be a non-taxable capital receipt and the addition made in reassessment is deleted.

Exemption under section 10(23C)(iiiab) - treatment of government grants to non-profit educational/skill development institutions - effect of incorrect/erroneous filling of return columns on substantive tax entitlement - classification of unspent government grants as liability and not income

Exemption under section 10(23C)(iiiab) - treatment of government grants to non-profit educational/skill development institutions - Whether the grant of Rs. 1,50,00,000 received from the State Government is eligible for exemption under section 10(23C)(iiiab) and whether such grant constitutes the income of the assessee - HELD THAT: - The Tribunal recorded that the society was constituted by the State Government to impart technical education and skill development, is wholly government funded, senior state officers are on its governing body, and grants are sanctioned and disbursed for specified heads of expenditure. The audited balance sheet showed grant receipts and an unspent closing balance under a Grant Account presented as a liability; unspent amounts are either carried forward or refunded to the Government. On this factual matrix the Tribunal treated the grant as not constituting the society's income. The disallowance by CPC, affirmed by the CIT(A), arose from processing the return and was founded on a supposed mis entry in the return rather than on the substantive character of the receipts. Having regard to the statutory entitlement to exemption under section 10(23C)(iiiab) for an institution engaged in education/skill development and the accounting treatment showing the grant as a liability for specified purposes, the Tribunal held that the grant was eligible for exemption and could not be treated as the assessee's income.

The grant is not the assessee's income and is eligible for exemption under section 10(23C)(iiiab).

Effect of incorrect/erroneous filling of return columns on substantive tax entitlement - Whether incorrect filling of a column in the Income Tax Return can deprive the assessee of the statutory exemption claimed - HELD THAT: - The Tribunal noted that the disallowance was made by CPC and confirmed by the CIT(A) owing to wrong filling of the relevant column in the return. The Tribunal observed that in a previous assessment year the exemption had been allowed by the CIT(A), and that the mere fact of an incorrect entry in the return cannot defeat a statutory exemption to which the assessee is otherwise entitled. The Tribunal therefore concluded that a technical defect in return filling is not a ground to deny a substantive exemption and directed the assessing officer to rectify the CPC order and nullify the demand raised.

Wrong filling of a return column does not extinguish the statutory right to exemption; the CPC order is to be rectified and the demand nullified.

Final Conclusion: The appeal is allowed: the Tribunal held that the government grant was not the society's income and was eligible for exemption under section 10(23C)(iiiab), and that denial of the exemption on account of an erroneous return entry was impermissible; the assessing officer was directed to rectify the CPC order and nullify the demand.

Disallowance under section 40A(3) - Rule 6DD exception for cash payments due to absence of banking facilities - business expediency/proviso to section 40A(3) - requirement of payment through banking channel to prevent tax evasion - treatment of land as stock-in-trade and revenue expenditure - disallowance of development expenses for lack of vouchers

Disallowance under section 40A(3) - Rule 6DD exception for cash payments due to absence of banking facilities - business expediency/proviso to section 40A(3) - requirement of payment through banking channel to prevent tax evasion - Whether cash payments made by the assessee for purchase of land were liable to be disallowed under section 40A(3) or were covered by the exceptions in Rule 6DD/proviso to section 40A(3). - HELD THAT: - The Tribunal examined evidence including admission by one vendor (Sh. Arun Mourya), an affidavit from the son of another vendor, registration of transactions with the Sub-Registrar and prior orders in closely placed cases where similar payments in the same village were held to fall within the rule-based exceptions. The Tribunal noted that Rule 6DD and the proviso to section 40A(3) are to be read with the section and accommodate genuine transactions where banking facilities are unavailable or business expediency compels cash payment. Reliance was placed on the Tribunal decision in Saraswati Housing & Developers and Supreme Court dicta (Attar Singh Gurmukh Singh) to emphasise that Rule 6DD must be interpreted liberally so as not to frustrate bona fide business dealings, and that consideration of local banking facilities and business exigencies is permissible. Having regard to vendor confirmations, registration of sale deeds and the comparative treatment of similarly placed taxpayers in the same locality, the Tribunal held that the CIT(A) erred in rejecting the assessee's justification and that the impugned cash payments were covered by the exception in Rule 6DD/proviso to section 40A(3). Consequently the disallowance under section 40A(3) was deleted in respect of those payments. [Paras 19, 20, 21, 22, 23]

Assessee's appeal allowed on this ground; disallowance under section 40A(3) deleted as payments fall within the exceptions in Rule 6DD/proviso to section 40A(3).

Disallowance of development expenses for lack of vouchers - treatment of land as stock-in-trade and revenue expenditure - Whether the disallowance of development expenses debited by the assessee was excessive and required interference. - HELD THAT: - The Assessing Officer disallowed 10% of development expenses for lack of vouchers; the CIT(A) reduced that disallowance to 5%. The Tribunal examined the material on record and found that no further evidence had been produced by the assessee to justify complete deletion or further reduction of the disallowance. In absence of additional supporting documents, the Tribunal declined to interfere with the reduction made by the CIT(A). [Paras 24]

Assessee's appeal on this ground dismissed; order of the CIT(A) confirming a 5% disallowance of development expenses upheld.

Final Conclusion: The Tribunal partly allowed the appeal: the disallowance under section 40A(3) in respect of cash payments for land purchase was deleted as covered by Rule 6DD/proviso to section 40A(3), while the CIT(A)'s reduction of the disallowance of development expenses to 5% was sustained.

Revision under section 263 - initiation of penalty proceedings - penalty under section 271(1)(c) - penalty under section 271AAC - satisfaction for levy of penalty - assessment under section 153C - application of mind under section 153D - non-initiation of penalty

Revision under section 263 - initiation of penalty proceedings - penalty under section 271(1)(c) - Whether the Principal Commissioner (PCIT) validly exercised jurisdiction under section 263 to set aside the assessment and direct initiation of penalty proceedings under section 271(1)(c). - HELD THAT: - The Tribunal held that exercise of power under section 263 to set aside an assessment and direct initiation of penalty under section 271(1)(c) is not sustainable where the assessment order does not record any satisfaction that the assessee concealed income or furnished inaccurate particulars. Reliance was placed on precedents which treat penalty proceedings as separate and independent from assessment proceedings, and on decisions of the Madras High Court that omission to record satisfaction to initiate penalty does not render the assessment order erroneous or prejudicial to revenue. Applying these principles, the Tribunal found no finding of satisfaction in the assessment order and therefore concluded that the PCIT erred in revising the assessment to direct initiation of penalty under section 271(1)(c). [Paras 15, 16]

The revision order passed by the PCIT under section 263 directing initiation of penalty under section 271(1)(c) is set aside.

Penalty under section 271AAC - assessment under section 153C - application of mind under section 153D - satisfaction for levy of penalty - Whether initiation of penalty under non-existent provision section 271AAC (with effect from 01.04.2017) in an assessment framed under section 153C, and its approval under section 153D, justified revision by the PCIT. - HELD THAT: - The Tribunal noted that the AO initiated penalty proceedings in the assessment order under section 271AAC, a provision that came into force from 01.04.2017 and therefore did not apply to the assessment year in question, and that the assessment order had prior approval under section 153D (indicating application of mind). However, the Tribunal found that neither the AO nor the approving authority recorded the requisite satisfaction that would support levy of penalty. The Tribunal emphasised that mere initiation or notation of penalty in the assessment order, or initiation under an incorrect statutory label, does not substitute for the statutory satisfaction required before penalty proceedings under section 271(1) can be validly invoked. In absence of such satisfaction, the PCIT could not validly regard the assessment as erroneous and prejudicial only on the ground that an incorrect penalty section had been mentioned. [Paras 7, 13]

The PCIT's direction premised on the AO's initiation under section 271AAC (and its approval under section 153D) does not validate revision under section 263 where no satisfaction to levy penalty was recorded; the revision is therefore set aside.

Final Conclusion: The Tribunal allowed the appeal, setting aside the PCIT's revision order under section 263 which had directed initiation of penalty under section 271(1)(c); there was no recorded satisfaction in the assessment to justify exercise of revisionary power, and initiation of penalty under the incorrectly cited section 271AAC did not render the assessment order amenable to revision.

Classification of land as agricultural land or capital asset under section 2(14) - taxability of capital gain on joint development agreement under section 45(5A) - taxability of forfeited/retained advance under section 56(2)(ix) - taxation of excess of stamp duty value over consideration under section 56(2)(x) - treatment of unexplained cash deposits/credits and cash found on search under section 69A - treatment of unexplained investments / differential consideration under section 69 - addition on unexplained credits in books / unsecured loans under section 68 - taxation of excess of guideline value over consideration in purchases under section 56(2)(vii)(b) - telescoping/acceptance of declared income to explain bank credits - remand for verification of documentary evidence and factual re-examination

Classification of land as agricultural land or capital asset under section 2(14) - Impugned lands sold to Incredible India Projects (P) Ltd and similarly situated sales are agricultural land and not chargeable to capital gains as capital asset. - HELD THAT: - Tribunal examined revenue records, distance from municipal limits, Tehsildar certificate and municipal notifications and applied the test in section 2(14). It held that where land is situated beyond 2 kms from the local municipality (with population context) and revenue records classify it as agricultural land, mere non cultivation does not convert it into a capital asset. The Tribunal followed the co ordinate bench finding in related appeals and the CIT(A)'s verification directions to the AO and directed deletion of additions made as capital gains in respect of those lands.

Additions for capital gain on sale of the specified agricultural lands set aside and deleted.

Treatment of unexplained investments / differential consideration under section 69 - Additions made as unexplained investment in respect of several purchases (notably Road No.40 and Road No.41, Jubilee Hills and Edupally) were examined and, where payments were demonstrated to have been made by banking channels or where co owner/payment evidence existed, the Tribunal deleted the additions; where excess consideration was evidenced by signed receipts or no explanation existed, additions were sustained. - HELD THAT: - For each property the Tribunal tested the evidentiary value of seized documents, sale deeds and bank records. If the assessee proved payment through banking channel or produced ledger/ society records explaining the source, AO additions under section 69 were deleted. Where seized cash receipts supporting higher consideration were signed and corroborated by registers, or where no documentary proof of source was furnished, the Tribunal upheld the unexplained investment additions.

Additions under section 69 deleted in several matters where bank/payment records or society ledgers explained source; sustained where evidence of excess payment remained unsubstantiated.

Taxability of forfeited/retained advance under section 56(2)(ix) - classification of land as agricultural land or capital asset under section 2(14) - Advance amounts retained by the assessee from Aishwarya Infra Developers were not taxable under section 56(2)(ix) where advance was subsumed into a subsequent development agreement (JDA/GPA) and the land was held to be agricultural. - HELD THAT: - Tribunal found on record that the sale agreement advances were not forfeited but were carried forward/treated as advances under a tripartite development agreement which included the original developer; further, since the land was held to be agricultural (not a capital asset) section 56(2)(ix) (relating to forfeiture on failed negotiations of capital assets) was inapplicable. Consequently, additions under section 56(2)(ix) were set aside.

Additions under section 56(2)(ix) in respect of advances from Aishwarya Infra Developers deleted.

Taxability of capital gain on joint development agreement under section 45(5A) - Capital gain in relation to transfers under the JDA with JVG Structures (P) Ltd is not taxable in the year of the JDA where completion certificate was not issued; therefore additions made by AO/CIT(A) were set aside. - HELD THAT: - Tribunal construed section 45(5A) and held that where specified agreements (JDA) apply, capital gain becomes chargeable in the previous year in which the completion certificate is issued by competent authority. As the developer had not obtained completion certificate and the project was incomplete, the AO erred in taxing capital gains in the assessment year of the JDA; CIT(A)'s confirmation and enhancement were accordingly reversed and deletions directed.

Additions for capital gain on account of JDA entries deleted; assessment enhanced on that ground set aside.

Taxation of excess of stamp duty value over consideration under section 56(2)(x) - Where stamp duty (guideline) value exceeded sale consideration and statutory provisos were not met (consideration not paid by account payee cheque on or before agreement date), the difference was taxable under section 56(2)(x); such additions were upheld. - HELD THAT: - Tribunal applied the statutory test: if stamp duty value exceeds consideration by specified thresholds and the proviso conditions (payment by account payee cheque before agreement) are not satisfied, the excess is to be treated as income under section 56(2)(x). Where the assessee's claim of earlier agreement/payment in cash failed evidential scrutiny, CIT(A)'s sustention of additions was affirmed.

Additions under section 56(2)(x) in respect of difference between stamp duty value and consideration upheld.

Taxation of excess of guideline value over consideration in purchases under section 56(2)(vii)(b) - Difference between guideline value and registered consideration in certain property purchases was taxable under section 56(2)(vii)(b); such additions were sustained. - HELD THAT: - Where the guideline value exceeded the registered consideration and no acceptable explanation or cogent evidence displaced the difference, the Tribunal held the excess to fall within section 56(2)(vii)(b) and upheld the CIT(A)'s confirmation of additions.

Additions under section 56(2)(vii)(b) upheld where differential remained unexplained.

Treatment of unexplained cash deposits/credits and cash found on search under section 69A - telescoping/acceptance of declared income to explain bank credits - Cash found on search and certain bank cash deposits/credits were accepted in part by the Tribunal where assessee produced credible cash/bank balance evidence or declared incomes sufficient to explain them; partial deletions were directed and residual additions confirmed. - HELD THAT: - Tribunal balanced contradictory explanations given at search and assessment stages against revised balance sheets, cash flow statements and declared incomes. Where reliable evidence showed sufficient opening cash/bank balances or declared income in excess of questioned credits, a reasonable portion of seized cash/credits was accepted and deletions granted; unexplained portions were sustained.

Partial relief granted on cash seized and certain bank credits/deposits; residual additions confirmed to the extent unexplained.

Addition on unexplained credits in books / unsecured loans under section 68 - Additions on alleged unsecured loans or unexplained credits were deleted where the assessee filed revised statements, ledger confirmations or credible evidence showing clerical error or proven liabilities; where no evidence existed, additions were sustained. - HELD THAT: - Tribunal scrutinised original and revised statement of affairs, bank and ledger entries and confirmations from counterparties. Where the revised accounts removed the unsecured loan entry or where society confirmations/ledgers explained credits, the CIT(A)'s deletions were upheld. Where the assessee produced no corroboration, AO additions were sustained.

Additions under sections 68/related unexplained credits deleted where revised accounts/evidence explained the entries; sustained where no explanation was furnished.

Remand for verification of documentary evidence and factual re-examination - Where material factual disputes (e.g., payment of alleged differential consideration blocked by pending litigation) required fresh factual inquiry, the Tribunal remanded issues to the Assessing Officer for verification and fresh consideration. - HELD THAT: - In specific instances (notably the Road No.12/Banjara Hills purchase where title litigation was pending and the assessee alleged non payment of balance consideration), Tribunal found that the matter required further documentary examination and directed the AO to re consider after receiving/verifying evidence, with consequential taxation consequences to follow.

Matters remanded to AO for verification and fresh decision where factual proof on payment/title was contested.

Treatment of sale by trustees/educational societies and attribution of capital gains - Where documentary record (agreements, mutation, society ledgers and receipts) established that the society, not individual trustees, was the owner and recipient of sale proceeds, the Tribunal held that capital gain could not be fastened on the individual signatory and deleted additions. - HELD THAT: - Tribunal evaluated title transfer documents, mutation orders and accounting entries in society books. It held that where evidence showed the society acquired title earlier and received consideration (even if individual signed deeds as trustee), capital gain liability rests with the society; AO/CIT(A) additions against individuals were set aside.

Additions for capital gains in trustees' hands deleted where ownership and receipt of consideration were established in society records.

Final Conclusion: The Tribunal consolidated common findings across the grouped appeals: deletions were directed in multiple matters where land was held to be agricultural under section 2(14), where advances were absorbed into subsequent development arrangements (not forfeited) and where revised accounts, bank and society records explained alleged unexplained credits or unsecured loans; capital gains charged in the JDA year were set aside under section 45(5A) where completion certificates were not obtained; additions under section 56(2)(x) and section 56(2)(vii)(b) were upheld where guideline/stamp duty values exceeded consideration and the provisos were not satisfied; partial relief was granted on cash seized and certain bank credits after assessing declared incomes and cash/bank balances; and specific factual issues requiring further verification were remitted to the Assessing Officer. Appeals were allowed, partly allowed or dismissed as set out in the order.

Summary order. Appeal dismissed; pending application(s), if any, disposed of.

Reason to believe - seizure vitiated for lack of valid reasons - jurisdictional defect where seizure grounds differ from adjudication grounds - violation of principles of natural justice - denial of cross-examination - extraordinary writ jurisdiction under Article 226

Reason to believe - seizure vitiated for lack of valid reasons - jurisdictional defect where seizure grounds differ from adjudication grounds - Seizure and consequent adjudication are vitiated where the recorded 'reason to believe' for seizure is not the same as the basis on which adjudication proceeded, amounting to lack of jurisdiction. - HELD THAT: - The Court held that 'reason to believe' is foundational to valid seizure and must be an honest belief based on reasonable grounds. The seizure receipt recorded a belief of illegal import under a notification permitting import into India of goods previously imported into Nepal, whereas the show-cause notice and final adjudication proceeded on a finding of illegal export. This contradiction between the grounds for seizure and the basis of adjudication removes the foundational basis for the seizure. As the Court noted, if the foundational 'reason to believe' is absent or materially different from the basis of subsequent proceedings, the seizure and any adjudication predicated on it suffer from lack of jurisdiction and are liable to be set aside. The Court found that this foundational defect justified exercise of extraordinary jurisdiction under Article 226. [Paras 5, 6, 8, 11]

Seizure and adjudication set aside for lack of valid 'reason to believe' and consequent jurisdictional defect.

Violation of principles of natural justice - denial of cross-examination - extraordinary writ jurisdiction under Article 226 - Denial of the petitioners' request to cross-examine the seizing officer amounted to breach of principles of natural justice and warranted interference by the High Court. - HELD THAT: - The petitioners had specifically sought cross-examination of the Inspector of Customs who made the seizure; that request was recorded in the adjudication order but not permitted. The Court relied on authority recognising the right to cross-examine as fundamental to natural justice. Given the contradiction between the seizure memorandum and the show-cause notice (import versus export), the opportunity to test the seizing officer's reasons was material to the fairness of the proceeding. The denial to summon and permit cross-examination was held to be a violation of natural justice, and in conjunction with the foundational defect in the seizure, justified the exercise of writ jurisdiction under Article 226. [Paras 10, 11]

Adjudication set aside for breach of natural justice by refusing cross-examination of the seizing officer.

Final Conclusion: Writ petition allowed; impugned adjudication order set aside for (a) foundational defect in the recorded 'reason to believe' which vitiated the seizure and deprived the adjudicating authority of jurisdiction, and (b) breach of principles of natural justice by denying cross-examination of the seizing officer; directions made for release of goods/security or refund as applicable.

Classification of parts and accessories - Interpretation of Note 2(b) of Chapter 90 - "suitable for use solely or principally" - Interpretation of Note 2(c) of Chapter 90 - residual classification in heading 9033 - End use/suitability test versus capability for use - Multi compatible accessory and risk of inconsistent classification

End use/suitability test versus capability for use - Interpretation of Note 2(b) of Chapter 90 - "suitable for use solely or principally" - Whether the Laser Imager is "suitable for use solely or principally" with MRI machines (CTH 9018) or is equally suitable for use with multiple medical imaging machines. - HELD THAT: - The Tribunal accepted the parties' common facts that the Laser Imager is a photothermographic film printer (not itself a diagnostic instrument) and that it interfaces with a variety of digital modalities including MRI, CT, FFDM and DR (para 5). The manufacturer's user guide describes the imager as intended to provide hard copy images from multiple digital imaging sources and explicitly lists several modalities (para 11). The Tribunal explained the ordinary meanings of "solely" and "principally" and noted that the product's market positioning and technical description demonstrate multi compatibility rather than primary suitability for a single class of machines (para 12). Consequently, the word "suitable" does not support the appellant's contention that the accessory is principally for MRI alone; allowing such a pairing would permit the same model to be classified under different headings depending on an importer's declaration, which is impermissible (para 12). [Paras 5, 11, 12]

The Laser Imager is not suitable solely or principally for MRI equipment; it is a multi compatible accessory usable with machines across different headings.

Classification of parts and accessories - Interpretation of Note 2(b) of Chapter 90 - "suitable for use solely or principally" - Whether the impugned goods can be classified with MRI apparatus under Note 2(b) of Chapter 90 or under CTH 9018 1300 (alternate plea). - HELD THAT: - Applying Note 2(b) requires an accessory to be suitable for use solely or principally with machines of the same heading. The Tribunal found no serious evidence to establish that the Laser Imager is principally for MRI use; its core function is printing and it is marketed and known as a medical image printer that interfaces with multiple modalities (paras 11, 14). Given its multi modality suitability and market identity as a printer whose imaging function is carried out by the host machine, classification with MRI apparatus under Note 2(b) and as CTH 9018 1300 is not appropriate (para 14). The appellant's reliance on earlier decisions was distinguished on facts (para 15). [Paras 11, 14, 15]

Classification under Note 2(b) with CTH 9018 (including the alternate plea to treat it as MRI apparatus) is not sustainable.

Interpretation of Note 2(c) of Chapter 90 - residual classification in heading 9033 - Multi compatible accessory and risk of inconsistent classification - Whether, having found the accessory not to be covered by Note 2(a) or Note 2(b), the Laser Imager is classifiable under Note 2(c) in heading 9033. - HELD THAT: - Both parties agreed that Note 2(a) is inapplicable (para 13). The Tribunal held that where an accessory is not included in the specific headings and is not suitable solely or principally for machines of a single heading, it falls within the residual provision of Note 2(c) which directs classification in heading 9033. The multi compatibility of the Laser Imager and the impracticality of permitting importer driven pairing to alter classification support application of the residual rule (paras 12-13). The Tribunal found the lower authority's classification under heading 9033 to be reasonable and proper and upheld it (para 16). [Paras 12, 13, 16]

The Laser Imager is classifiable under Note 2(c) of Chapter 90 and thus in heading 9033.

Final Conclusion: The tribunal upheld the reclassification of the imported Laser Imager as an accessory classifiable under Note 2(c) of Chapter 90 in heading 9033, rejecting the appellant's contention that it is suitable solely or principally for MRI and that it should be classified with MRI apparatus under Note 2(b). The appeal is dismissed.

Anti-Dumping Duty - determination of thickness for ADD applicability - exercise of powers under Section 28(4) of the Customs Act - competence to issue show cause notice - jurisdictional defect vitiating proceedings - re-test and judicially directed laboratory testing - Indian Standard tolerance in product specification - principles of natural justice in appellate adjudication - remand for de novo decision

Competence to issue show cause notice - jurisdictional defect vitiating proceedings - exercise of powers under Section 28(4) of the Customs Act - Validity and competence of the authority that issued the show cause notice - HELD THAT: - The Tribunal held that the question whether the author of the SCN was competent strikes at the authority of the Proper Officer and, if found defective, renders subsequent orders void. The impugned order's treatment of this jurisdictional challenge was cryptic and insufficient. Given the pendency of proceedings in the Hon'ble Supreme Court in Canon India (Civil Appeal No. 1827 of 2018) bearing upon the competence to issue SCNs, the matter requires detailed consideration in light of that final decision. Accordingly the Tribunal directed that the Appellate Authority first decide the challenge to jurisdiction after awaiting the Supreme Court outcome, and if necessary, give a reasoned decision following principles of law and natural justice. [Paras 7, 9]

Jurisdictional challenge not finally decided; remanded to Commissioner (Appeals) to first determine competence to issue the SCN in light of the Supreme Court proceedings and to render a speaking decision.

Determination of thickness for ADD applicability - re-test and judicially directed laboratory testing - Anti-Dumping Duty - Indian Standard tolerance in product specification - Whether the imported aluminium foil falls within the thickness range attracting Anti-Dumping Duty and the evidentiary weight of successive laboratory tests and IS specifications - HELD THAT: - The Tribunal recorded that the question of fact as to whether the imported goods fall within the 5.5 to 80 microns range for applicability of ADD arises from competing laboratory reports. The consignment was tested multiple times, including tests carried out pursuant to High Court directions; the impugned order treated the CRCL report as adverse to the appellant and declined to accept the appellant's reliance on a BIS tolerance (IS 15392:2003) for exemption, noting that the ADD notification contains no tolerance clause. The Tribunal did not decide the factual controversy on merits but observed that the merits must be considered only after the jurisdictional issue is resolved and directed that, if the SCN is held valid, the Appellate Authority shall decide the appeal afresh after following principles of natural justice and affording the appellant an opportunity to rely on standards (including any relevant IS specification) and to be heard. [Paras 4, 5, 9]

Merits as to thickness and applicability of ADD not finally adjudicated; remanded for de novo consideration by the Appellate Authority after jurisdiction is determined and after affording the appellant a time bound opportunity to be heard.

Principles of natural justice in appellate adjudication - remand for de novo decision - Requirement to afford adequate opportunity and to pass a speaking order on remand - HELD THAT: - The Tribunal directed that on remand the Commissioner (Appeals) must proceed to decide the appeal de novo if the SCN is found to have been validly issued. The Appellate Authority is required to follow the principles of natural justice, provide a reasonable and time bound opportunity to the appellant to present its case both orally and in writing, and thereafter issue a speaking order. The appellant was also directed to cooperate so the process may be completed expeditiously. [Paras 9, 10]

Proceedings remitted with direction to afford full opportunity of hearing and to pass a reasoned de novo order in a time bound manner.

Final Conclusion: The appeal is disposed of by remitting the matter to the Commissioner of Customs (Appeals) for de novo adjudication: first to determine the competence to issue the SCN in light of the pending Supreme Court considerations, and, if the SCN is found valid, to decide the merits afresh after affording the appellant a reasonable and time bound opportunity of hearing and issuing a speaking order.

Classification of adjuvants and distinction between adjuvant and vaccine - Application of General Rules of Interpretation - Rule 3(b) - Predominant use/end use not decisive for tariff classification - Burden of proof on the Revenue in classification disputes - Penalty for misdeclaration under Section 114A of the Customs Act, 1962

Classification of adjuvants and distinction between adjuvant and vaccine - Application of General Rules of Interpretation - Rule 3(b) - Predominant use/end use not decisive for tariff classification - Burden of proof on the Revenue in classification disputes - Whether the imported "Montanide ISA 206 (VG)", an immunological adjuvant, is classifiable as a "vaccine for veterinary medicine" under CTH 30023000 or as a residuary chemical product under CTH 38249090. - HELD THAT: - The Tribunal examined the nature and function of the imported item and the general principles of tariff classification. The product is an immunological adjuvant - an agent that modifies or enhances the immune response to antigens and which, by itself, does not confer immunity and cannot be administered as a vaccine without formulation with antigenic material. Adjuvants vary by material composition and are to be classified according to their composition; they are raw materials/ingredients used in the preparation of vaccines rather than finished vaccines. The Department's classification of the adjuvant as a vaccine treated the raw material as possessing the final product's characteristic on the basis that it is formulated with vaccine and used in vaccines. The Tribunal held that such reliance on end use or the fact that the product is used in vaccine formulations is not a proper basis for classification where the tariff entries do not refer to end use, and that rule 3(b) was inapplicable because the imported item is not a mixture or composite containing a vaccine. The Tribunal also noted the settled principle that the burden lies on the Revenue to prove classification different from that declared by the importer and found that the Department did not produce documentary evidence to show the product itself qualifies as a vaccine at the time of importation. Applying these principles, the Tribunal concluded that classifying the adjuvant as a vaccine under CTH 30023000 is legally unsustainable and that the declaration under CTH 38249090 was correct. [Paras 11, 12]

The classification of the imported adjuvant as a vaccine under CTH 30023000 is incorrect; the demand based on that classification is set aside and the goods are liable to be treated as declared under CTH 38249090.

Penalty for misdeclaration under Section 114A of the Customs Act, 1962 - Burden of proof on the Revenue in classification disputes - Whether imposition of penalty under Section 114A for alleged misdeclaration or suppression is sustainable in the circumstances of a classification dispute concerning an adjuvant. - HELD THAT: - The Tribunal found that all material details regarding the nature of the imported product were furnished at the time of filing the bills of entry and that the Department itself treated the goods as adjuvants rather than vaccines. Given that classification was genuinely disputed and the Revenue failed to discharge the burden to prove wilful misdeclaration or suppression, the imposition of penalty under Section 114A was not warranted. The finding emphasises that equal penalty for suppression is inappropriate where the controversy is over tariff classification and the importer has declared the nature of the goods. [Paras 12, 13]

The penalty under Section 114A is unsustainable and is set aside.

Final Conclusion: The appeal is allowed: the Department's classification of the imported immunological adjuvant as a vaccine is set aside, the demand based on that classification is quashed, and the penalty under Section 114A is deleted.

Concessional IGST conditioned on indelible retail sale price marking - confiscation of goods for non compliance with statutory condition for concessional duty - redemption fine and penalty as proportionate response to duty evasion

Concessional IGST conditioned on indelible retail sale price marking - Applicability of concessional 5% IGST to imported footwear where retail sale price (MRP/RSP) was not indelibly marked on the articles. - HELD THAT: - The Tribunal accepted the factual concession that the imported footwear did not bear the indelible retail sale price and that the importer was aware of the requirement from past clearances. The relevant Notification grants the lower rate of IGST only where the retail sale price does not exceed the prescribed threshold and is indelibly marked on the footwear. In the absence of such marking the concessional rate cannot be claimed and the higher IGST rate applies. The Tribunal therefore upheld the view that the statutory condition for the concessional rate was not satisfied.

Concessional 5% IGST cannot be claimed where the mandatory indelible marking of retail sale price on footwear is absent; higher rate applies.

Confiscation of goods for non compliance with statutory condition for concessional duty - Validity of confiscation of the imported goods for deliberate attempt to evade duty by claiming the lower IGST without required MRP/RSP marking. - HELD THAT: - The Tribunal noted the finding of the Commissioner (Appeals) that the importer attempted to evade duty by claiming the lower rate despite not complying with the mandatory marking requirement. Given the admitted absence of MRP/RSP on the goods and the statutory nexus between the marking requirement and entitlement to the concessional rate, the Tribunal found the confiscation to be justified. The factual admission by the appellant that MRP was not mentioned and knowledge of the requirement reinforced the conclusion that confiscation was validly imposed.

Confiscation of the goods was validly imposed for non compliance with the condition precedent to claim the concessional IGST rate.

Redemption fine and penalty as proportionate response to duty evasion - Reasonableness of the redemption fine and penalty imposed on release of confiscated goods. - HELD THAT: - The Tribunal considered the differential duty consequent on denial of the concessional rate and observed that, in relation to the duty shortfall, the redemption fine and penalty imposed were modest. No ground was made out to interfere with the quantification of the fine and penalty imposed by the adjudicating authorities. The appellate forum therefore found the monetary sanctions not excessive so as to warrant interference.

The redemption fine and penalty imposed on release of the goods were held to be reasonable and not liable to be set aside.

Final Conclusion: The appeal is dismissed: the concessional IGST could not be claimed in the absence of indelible retail sale price marking, confiscation of the goods was valid, and the redemption fine and penalty were reasonable and therefore upheld.

Scheme of arrangement - prior No-objection letter / NoC from stock exchanges - applicability of Regulation 37(1) and 37(2) of the LODR to schemes filed by a liquidator - exemption under Regulation 37(7) of the LODR for restructuring proposals approved under section 31 of the IBC - scheme for revival under Section 230 of the Companies Act read with Regulation 2-B of the Liquidation Process Regulations - harmonious construction of IBC and Companies Act in liquidation - priority of the Insolvency and Bankruptcy Code by virtue of Section 238

Applicability of Regulation 37(1) and 37(2) of the LODR to schemes filed by a liquidator - prior No-objection letter / NoC from stock exchanges - scheme of arrangement - Regulation 37(1) and 37(2) of the LODR do not mandate a prior NoC from stock exchanges for a scheme of arrangement filed by a liquidator under Section 230 read with Regulation 2 B. - HELD THAT: - Regulation 37(1) and (2) impose the obligation in terms of a 'listed entity' and prohibit a listed entity from filing a scheme without obtaining a No objection letter. Section 230(1) expressly contemplates that, in the case of a company being wound up, the liquidator may apply to the Tribunal, and treats the liquidator as a distinct category from the company. Therefore the procedural rigours cast upon the 'listed entity' under Regulation 37(1) and (2) cannot be read to automatically bind a liquidator who files a scheme in liquidation. Further, Section 230(5) requires notice to stock exchanges after filing with the Tribunal and does not prescribe a prior NoC. The Liquidator in the present case complied with the notice requirement. Reading Regulation 37(1)/(2) to require a prior NoC in liquidation would import an obligation not found in Section 230 and would be inconsistent with the distinct role of the liquidator under the Companies Act and the Code. [Paras 13, 14, 15, 16, 40]

Prior NoC under Regulation 37(1) and (2) of the LODR is not required for schemes for revival of companies undergoing liquidation under the Code.

Exemption under Regulation 37(7) of the LODR for restructuring proposals approved under section 31 of the IBC - scheme for revival under Section 230 of the Companies Act read with Regulation 2-B of the Liquidation Process Regulations - harmonious construction of IBC and Companies Act in liquidation - purposive interpretation - The clarification in Regulation 37(7) exempting restructuring proposals approved as part of a resolution plan under section 31 of the IBC equally applies, alternatively, to a scheme of arrangement for revival filed by a liquidator under Section 230 read with Regulation 2 B. - HELD THAT: - A scheme for revival in liquidation and a resolution plan under section 31 both operate in the same continuum of reviving the corporate debtor. The Supreme Court and this Tribunal have recognised Section 230 as a permissible mode of revival in liquidation, and legislative/regulatory amendments (including Regulation 2 B and SEBI's 2018 amendments) post date and must be read in that context. Regulation 37(7) was introduced to facilitate time bound CIRP processes by exempting resolution plans from prior NOC requirements; a strict literal construction excluding schemes in liquidation would frustrate the objective of the Code and lead to an anomalous result where substantially identical modes of revival are treated differently. Accordingly, a purposive and harmonious construction supports extending the benefit of Regulation 37(7) to schemes in liquidation. [Paras 33, 34, 35, 36, 40]

The exemption in Regulation 37(7) applies to schemes submitted by a liquidator under Section 230 read with Regulation 2 B, alternatively reinforcing that prior NOC is not required.

Scheme of arrangement - prior No-objection letter / NoC from stock exchanges - procedural finality of earlier NCLT directions - The impugned order directing the Liquidator to obtain prior NOC from the stock exchange effectively re-opened an earlier NCLT direction and was set aside; the NCLT is directed to proceed to hear the scheme on merits without insisting on prior NOC. - HELD THAT: - The NCLT had earlier directed that the scheme proceed (order dated 02.05.2023) and no appeal was filed against that order by the stock exchange despite receiving notice. The subsequent order dated 04.04.2024 which stayed proceedings by mandating prior NOC amounted in effect to a review of the earlier direction and was not justified at that stage. Absent any merits objections from the stock exchange to date, and having regard to the statutory scheme that contemplates notice to regulators after filing, the appellate tribunal set aside the impugned order and directed the NCLT to proceed expeditiously with hearing the scheme without insisting on a prior NoC. [Paras 37, 38, 39, 40]

Impugned order dated 04.04.2024 is set aside; NCLT directed to hear and decide the scheme on merits without requiring prior NOC, expeditiously.

Final Conclusion: The appeal is allowed: the NCLT order requiring prior NoC from the stock exchange is set aside; prior NoC under Regulation 37(1)/(2) of the LODR is not required for schemes for revival in liquidation and, alternatively, the exemption in Regulation 37(7) applies to such schemes; the matter is remitted to the NCLT to proceed on merits without insisting on prior NOC and to dispose of the scheme expeditiously.

Summary order. Delay condoned; no interference with the National Company Law Appellate Tribunal order dated 13 December 2023 in Company Appeal (AT) (Insolvency) No 1058 of 2023; appeal dismissed and pending application disposed of.

Permission to file appeal - interference with appellate tribunal order - dismissal of civil appeal

Permission to file appeal - Grant of permission to file the appeal in Civil Appeal Diary No 27720 of 2024. - HELD THAT: - The Court granted leave to file the appeal by order, thereby permitting the appellant to prosecute the appeal before this Court. The order recording grant of permission is self-contained and no further reasons were provided in the text for this administrative indulgence. [Paras 1]

Permission to file the appeal in Civil Appeal Diary No 27720 of 2024 is granted.

Interference with appellate tribunal order - dismissal of civil appeal - Whether this Court should interfere with the National Company Law Appellate Tribunal's order dated 13 May 2024 in Company Appeal (AT) (Insolvency) No 911 of 2023. - HELD THAT: - After consideration, the Court found no reason to interfere with the impugned NCLAT order dated 13 May 2024. The Court therefore dismissed the Civil Appeals challenging that order. No separate substantive reasoning is recorded in the order disposing of the appeals beyond the conclusion that interference is not warranted. [Paras 2, 3]

The impugned order dated 13 May 2024 passed by the National Company Law Appellate Tribunal is not interfered with and the Civil Appeals are dismissed.

Final Conclusion: Leave to file the appeal was granted; on merits the Supreme Court declined to interfere with the NCLAT order dated 13 May 2024 and dismissed the Civil Appeals, with pending applications disposed of.

Proportionate reversal of CENVAT credit under Rule 6(3A) of the Cenvat Credit Rules, 2004 - ineligibility of input service credit for trading activities - formula-based determination of CENVAT attributable to exempted or non-service activities - relevance of accounting segregation (Orion Appliances principle) vis-a -vis statutory formula - liability for interest and penalty where show-cause notice is within normal period

Proportionate reversal of CENVAT credit under Rule 6(3A) of the Cenvat Credit Rules, 2004 - formula-based determination of CENVAT attributable to exempted or non-service activities - Amount of Cenvat credit to be reversed for the period 01.04.2011 to 31.03.2012 was to be determined by applying the formula in Rule 6(3A) and the adjudicated figure of reversal (Rs. 2,70,184/-) is correct. - HELD THAT: - The Tribunal examined Rule 6(3A) as inserted and applied to the facts of the period in question. After detailing the statutory procedure for provisional and final determination of Cenvat attributable to exempted or non-service activities, the Tribunal found that the adjudicating authority correctly applied the formula prescribed in Rule 6(3A) to compute the proportionate credit to be reversed. The Tribunal did not find any infirmity in the calculation carried out by the lower authorities and accepted the departmental computation as conforming to the statutory methodology set out in Rule 6(3A). [Paras 7, 9]

The demand for reversal of Cenvat credit as determined under Rule 6(3A) is upheld.

Relevance of accounting segregation (Orion Appliances principle) vis-a -vis statutory formula - ineligibility of input service credit for trading activities - Certificate of Chartered Accountant asserting a different proportion for reversal could not displace the statutory formula; the Orion Appliances principle does not circumvent Rule 6(3A) in the facts of this case. - HELD THAT: - The Tribunal considered the appellant's reliance on the CESTAT decision in Orion Appliances which recognised that input service credit attributable to trading activities should be segregated according to standard accounting principles. However, for the relevant tax period Rule 6(3A) prescribes a specific statutory mechanism and formula for determining and paying the amount attributable to exempted or non-service activities. The Tribunal held that the adjudicating authority correctly concluded that the CA certificate could not override the statutory procedure and that the computation must follow Rule 6(3A). The Orion Appliances observation regarding periodic segregation was noted but held not to invalidate application of the statutory formula in the present circumstances. [Paras 6, 8, 9]

The CA certificate based segregation cannot be accepted in place of the statutory computation under Rule 6(3A); Orion Appliances does not displace the statutory formula here.

Liability for interest and penalty where show-cause notice is within normal period - Interest and penalty confirmed by the adjudicating authority were not interfered with by the Tribunal. - HELD THAT: - The Tribunal noted that the show-cause notice was issued within the normal period of limitation and that the adjudicating authority had accordingly imposed interest and penalty in accordance with the Act and the Cenvat Credit Rules. Having upheld the correctness of the demand computed under Rule 6(3A), the Tribunal found no reason to disturb the imposition of interest and penalty as confirmed below. [Paras 5, 9]

Interest and penalty as imposed by the lower authorities are upheld.

Final Conclusion: The appeal is dismissed; the Tribunal upholds the adjudicated reversal of Cenvat credit for 01.04.2011 to 31.03.2012 calculated under Rule 6(3A), and sustains the attendant interest and penalty, rejecting the appellant's reliance on an alternative CA certificate and limiting effect of Orion Appliances to not displace the statutory formula.

Manufacture - Rule 2(a) of the General Rules of Interpretation - Note 6 to Section XVII of the Central Excise Tariff - burden of proof to establish SKD condition and assembly - assessment of imported goods in the form imported - CENVAT credit reversal where inputs/capital goods removed as such

Manufacture - Rule 2(a) of the General Rules of Interpretation - Note 6 to Section XVII of the Central Excise Tariff - burden of proof to establish SKD condition and assembly - Department was justified in not accepting the appellant's claim of 'manufacture' in respect of the imported dump truck. - HELD THAT: - The Tribunal held that Rule 2(a) GRI and Note 6 to Section XVII can render conversion/assembly of an incomplete article into a finished article as 'manufacture' but only where the factual matrix establishes that the imported article was incomplete/unfinished yet possessed the essential character of the finished article and that conversion/assembly occurred. The appellant was specifically asked in the show cause notice to produce evidence of the condition of import (SKD) and of the processes undertaken to assemble the truck. The sole invoice on record did not indicate SKD/CKD status and no documentary or process evidence was furnished to demonstrate assembly or indigenously procured components. The Tribunal observed that a mere price difference between import and sale cannot, by itself, displace the statutory requirement to prove the factual basis for applying Rule 2(a)/Note 6. In the absence of required evidence despite a specific opportunity to produce it, the finding of the lower authorities that the goods should be assessed in the form imported and that CENVAT credit reversal (as applicable) could not be avoided was upheld. [Paras 3, 6, 8, 9, 10]

Appellant failed to establish that the imported dump truck was in SKD condition and that assembly/conversion constituting 'manufacture' took place; lower authorities' findings are upheld and the appeal is dismissed.

Final Conclusion: The Tribunal dismissed the appeal, upholding the orders below because the appellant did not produce evidence to establish that the imported dump truck was in SKD condition and was assembled into a finished product amounting to 'manufacture' under Rule 2(a) GRI and Note 6.

CENVAT credit not admissible on input services attributable to trading activity - Activity which is neither a service nor excisable goods falls outside the scope of Cenvat Credit Rules - Prospective effect of amendment to definition of exempted services/'trading' irrelevant where output is not a service - Refund of CENVAT credit on input services used for provision of taxable output service prior to amendment - Interest payable only on credit utilised and reversed attributable to trading activity

CENVAT credit not admissible on input services attributable to trading activity - Activity which is neither a service nor excisable goods falls outside the scope of Cenvat Credit Rules - Refund claim in respect of proportionate CENVAT credit taken on trading activity is not admissible - HELD THAT: - The Tribunal held that where the output for which input credit is taken is neither a service nor excisable goods, such activity lies outside the ambit of the Cenvat Credit Rules and input-service credit attributable to that activity is not admissible. Reliance was placed on the reasoning in the extracted decision (including the affirmation of Lally Automobiles by the Apex Court) to conclude that trading cannot be treated as a taxable service for the purposes of the credit scheme prior to the explanatory amendment. Consequently the Commissioner (Appeals) was justified in rejecting the refund claim in respect of the proportional CENVAT credit attributable to trading. [Paras 5, 7, 10]

Refund claim for the CENVAT credit linked to trading activity disallowed; reversal and rejection of that portion upheld

Prospective effect of amendment to definition of exempted services/'trading' irrelevant where output is not a service - Prospective effect of Notification No. 3/2011-CE (NT) not a defence to avoid reversal of credit - The appellant's contention that the explanatory amendment (treating trading as an exempted service) being prospective precludes reversal of credit for the disputed period was rejected - HELD THAT: - The Tribunal found that the question is not one of retrospectivity of the 2011 amendment but of whether trading was within the scope of the Cenvat scheme at all for the period in issue. Prior to the explanatory insertion trading was not within the credit scheme and therefore prospective effect of the Notification does not shelter credits already taken for activities that are not services or excisable goods. The explanatory amendment only formalised a fiction; it does not alter the legal position that inputs used for an activity outside the scheme could not give rise to credit. [Paras 5, 7]

Contention based on non-retrospectivity of the Notification is not tenable; it does not entitle the appellant to the refund of credit attributable to trading

Refund of CENVAT credit on input services used for provision of taxable output service prior to amendment - Interest payable only on credit utilised and reversed attributable to trading activity - Refund claim in respect of certain input services (housekeeping, courier, hospitality, car hiring) for the impugned period was allowed and interest on such amount was ordered to be refunded; statutory interest is payable only on credits utilised and reversed towards trading activity - HELD THAT: - For the period December 2010 to January 2011 the Tribunal observed that the then definition of 'input services' had a wide ambit including 'activities relating to business' and that there was nothing on record to show these specific services were not used for provision of the output service. Considering the modest tax amount involved and the prima facie entitlement to refund, the Tribunal allowed the refund of the claimed amount for those input services along with the interest paid on that amount. Separately, statutory interest liability was confined to the credit that was actually utilised and subsequently reversed on account of trading activity. [Paras 8, 9, 10]

Refund allowed for specified input services with interest; statutory interest payable only on the credit reversed in respect of trading activity

Final Conclusion: The appeal is partly allowed: refund of CENVAT credit on specified input services for the impugned period is granted with interest; the rejection of refund and reversal of proportionate credit attributable to trading activity is upheld, and statutory interest is confined to the credit utilized and reversed on account of trading.

Exemption under Notification No.67/1995-CE for intermediary inputs captively consumed - obligation under Rule 6 of the CENVAT Credit Rules, 2004 - reversal of CENVAT attributable to inputs used in or in relation to manufacture of exempted final products - intermediate/by-product molasses used captively for manufacture of dutiable and exempted products - reversal of credit attributable to inputs used in the manufacture of molasses as compliance with Rule 6 - entitlement to refund of duty paid on captively consumed molasses - raising new grounds not pleaded in the show-cause notice/preclusion of belated/contentious pleas

Exemption under Notification No.67/1995-CE for intermediary inputs captively consumed - obligation under Rule 6 of the CENVAT Credit Rules, 2004 - reversal of CENVAT attributable to inputs used in or in relation to manufacture of exempted final products - reversal of credit attributable to inputs used in the manufacture of molasses as compliance with Rule 6 - Whether reversal of CENVAT credit attributable to inputs used in the manufacture of molasses satisfies the obligation under Rule 6(3)(a)(i) so as to permit exemption under Notification No.67/1995-CE and entitlement to refund of duty paid on molasses captively consumed for manufacture of Rectified Spirit and Extra Neutral Alcohol - HELD THAT: - The Tribunal framed the narrow question whether, having discharged the obligation under Clause (vi) of Notification No.67/1995-CE by reversing CENVAT credit, the appellants could claim exemption on molasses used captively even where final products include exempted goods. The Tribunal examined Rule 6(3)(a)(i), which mandates payment of an amount equivalent to CENVAT credit attributable to inputs and input services used in, or in relation to, the manufacture of exempted goods falling under Heading 22.04. Applying earlier decisions, notably Godavari Sugar Mills Ltd. and Shri Chamundeswari Sugar Mills Ltd., the Tribunal held that where the manufacturer has reversed the CENVAT credit attributable to inputs used in the manufacture of molasses (an intermediate input), such reversal is a compliance with the obligation under Rule 6 and thus satisfies Clause (vi) of Notification No.67/1995-CE. The Tribunal further observed that the Revenue's contention - that the appellants should have reversed credit specifically attributable to molasses when used in the later stage manufacture of exempted final products rather than credit attributable to manufacture of molasses itself - was not specifically raised in the show-cause notice, and on merit the Tribunal found the view in the cited precedents persuasive that reversal at the molasses (intermediate) stage suffices. Accordingly, the appellants were held entitled to the notification benefit and the refund claim was to be allowed, following the reasoning and precedents relied upon. [Paras 6, 7, 10, 11, 12]

Reversal of CENVAT credit attributable to inputs used in manufacture of molasses satisfies the obligation under Rule 6(3)(a)(i) and Clause (vi) of Notification No.67/1995-CE; appellants entitled to the exemption/refund for the period September 2007 to April 2008.

Final Conclusion: Impugned order set aside; appeal allowed and refund claim in respect of duty paid on captively consumed molasses for September 2007 to April 2008 granted, with consequential relief as per law.

Dissolution of partnership on the death of a partner - clubbing of clearances - SSI exemption - use of another's brand name as disentitling factor for SSI exemption - clandestine removal and evidentiary proof by invoices - finality of adjudication where no appeal is filed

Dissolution of partnership on the death of a partner - Validity of show cause notices issued to the original partnership firm after the death of a partner - HELD THAT: - The Tribunal held that the partnership firm founded by the deceased father (original Vadivel Fireworks) stood dissolved on the death of Shri. Vadivel in 1993 unless there was evidence of a fresh or continuing agreement among the surviving partners to continue the partnership. The show cause notices issued to the 'original Vadivel Fireworks' treating the two brothers as continuing partners were therefore issued without examining whether the partnership in law continued; that allegation was erroneous and vitiated the proceedings insofar as it led to clubbing of clearances and demands based on continued existence of the original firm. [Paras 21]

Show cause notices framed on the premise that the original partnership continued after the death of a partner cannot sustain; clubbing and demands premised on that error are invalid.

Use of another's brand name as disentitling factor for SSI exemption - SSI exemption - Whether use of the brand name 'Parrot' (allegedly belonging to a defunct concern) disentitles the appellant to SSI exemption - HELD THAT: - The Tribunal accepted the adjudicating authority's earlier finding that the brand name 'Parrot' had not been bequeathed or shown to be owned by any person after the demise of Shri. Vadivel and was effectively in the public domain. Reliance on prior tribunal authorities as recorded in the original order supported the proposition that where a brand name is not shown to be owned or registered by anyone, its use does not disentitle a manufacturer from SSI exemption. Consequently, the seizure and denial of exemption solely on the ground of use of the 'Parrot' brand was not sustainable. [Paras 12, 17, 21]

Use of the brand name 'Parrot' did not disentitle the appellant to SSI exemption where ownership was not established; seizure and denial of exemption on that ground cannot be sustained.

Clandestine removal and evidentiary proof by invoices - Sufficiency of the seized 711 invoices and related material to establish clandestine manufacture and clandestine clearance beyond SSI limits - HELD THAT: - The Tribunal agreed with the original authority that the department failed to prove the genuineness and authenticity of the large number of seized invoices: the preparer/signatory of the invoices was not examined, buyers did not corroborate all transactions on cross-examination, and there was no documentary evidence of corresponding unaccounted raw material purchases, extra labour, dispatch or receipt of unaccounted sale proceeds. The quantification was therefore confined to transactions conclusively proved by buyers' admissions and sales tax records. The Commissioner (Appeals) had not sufficiently justified confirmation of duty on the basis of the 711 invoices, and the reliance on those invoices without adequate proof could not sustain demands. [Paras 18, 21]

The 711 seized invoices and related material were insufficient to establish clandestine removal beyond proved transactions; quantification must be limited to transactions supported by admissible evidence.

Clubbing of clearances - SSI exemption - finality of adjudication where no appeal is filed - Whether clearances of the two brothers could be clubbed and whether the smaller demand confirmed earlier remains effective - HELD THAT: - The Tribunal held that clubbing of clearances of the two independent manufacturers occupying separate sheds could not be sustained in the absence of evidence that the original partnership continued. Re quantification based on proved evidence showed that overall clearances did not exceed the SSI exemption limits except for a limited amount for 1997 98, for which the adjudicating authority had already confirmed a duty demand and equal penalty of Rs.5,828/-. The appellant had not appealed against Order in Original dated 13.03.2002 which confirmed that small demand; that order has attained finality and therefore must be restored. Consequently, the impugned Commissioner (Appeals) order was set aside and the earlier O in O orders restored. [Paras 21, 22]

Clubbing of clearances and related demands in the impugned order set aside; earlier Orders in Original confirming duty of Rs.5,828 and penalty are restored as final.

Final Conclusion: The Tribunal set aside the impugned Commissioner (Appeals) order, held that the department's clubbing of clearances and denial of SSI exemption (including denial based on use of the 'Parrot' brand) were unsustainable for want of legal and evidentiary foundation, found the seized invoices inadequate to prove clandestine removals beyond proved transactions, and restored the earlier Orders in Original dated 13.03.2002 and 26.03.2002 (including the confirmed duty and penalty of Rs.5,828 which had attained finality). Appeals are partly allowed accordingly.

Eligibility of CENVAT credit on input services used in manufacture of exported exempted goods - operation of Rule 6(6)(v) of the CENVAT Credit Rules - export under bond/LUT removes reversal obligation under Rule 6(1) - procedural lapse of non-execution of bond/LUT not to deny substantive entitlement to credit - requirement to include value of export clearances for calculating reversal under Rule 6(3)/(3A)

Eligibility of CENVAT credit on input services used in manufacture of exported exempted goods - operation of Rule 6(6)(v) of the CENVAT Credit Rules - export under bond/LUT removes reversal obligation under Rule 6(1) - procedural lapse of non-execution of bond/LUT not to deny substantive entitlement to credit - Whether demand for reversal of input-service credit by including value of export clearances is sustainable where exempted goods were exported and credit was availed on input services - HELD THAT: - The Tribunal examined whether the department could demand additional reversal on the ground that the appellant exported exempted goods without executing a bond/LUT and therefore should have included the value of such exports while computing reversal under Rule 6(3)/(3A). Relying on the detailed reasoning in the decision rendered for the appellant's sister concern, the Tribunal held that Rule 6(6)(v) exempts exports under bond (and, as interpreted by higher authorities, exports effected notwithstanding technical non-execution of bond/LUT) from the bar in Rule 6(1) so as to permit CENVAT credit on inputs and input services used in manufacture of exported goods that are otherwise exempt. The Tribunal noted precedent in favour of the assessee including the decisions in the cases of M/s. Drish Shoes Ltd. , Repro India Ltd. , Jolly Board Ltd. , M/s. Lavino Kapur Cottons Pvt. Ltd. and M/s. GPI Textiles Ltd. , which establish that execution of bond/LUT is a procedural requirement and non-execution is a technical lapse that cannot defeat the substantive entitlement to credit. Applying these principles, the Tribunal found no merit in the demand seeking reversal by including the value of export clearances and set aside the impugned order. The decision rests on the legal proposition that exports (and procedural defects in bond/LUT execution) do not disentitle the appellant from claiming CENVAT credit on input services used in manufacture of exported exempted goods, and therefore the demand could not be sustained. [Paras 8, 9]

Demand for additional reversal by including value of export clearances set aside; appeal allowed

Final Conclusion: The impugned demand, interest and penalties confirmed by the lower authorities are set aside; the appeal is allowed and the demand cannot be sustained in respect of the specified periods, with consequential reliefs, if any.

Concessional inter State tax liability under Section 8(1) read with Section 8(3) of the Central Sales Tax Act - meaning of 'goods' in Section 2(d) of the Central Sales Tax Act after the 2017 amendment - issuance of Form C for inter State purchase of natural gas used in manufacture or in generation of electricity - effect of Trade Circulars / Office Memoranda on MVAT/CST registrations and availability of Form C - precedential effect of The Ramco Cements Ltd. decision (Supreme Court) on High Court rulings

Concessional inter State tax liability under Section 8(1) read with Section 8(3) of the Central Sales Tax Act - meaning of 'goods' in Section 2(d) of the Central Sales Tax Act after the 2017 amendment - issuance of Form C for inter State purchase of natural gas used in manufacture or in generation of electricity - precedential effect of The Ramco Cements Ltd. decision (Supreme Court) on High Court rulings - Petitioner entitled to issue Form C and obtain issuance of C Forms from respondents in respect of inter State purchase of natural gas used in manufacture and in generation of electricity. - HELD THAT: - The Court held that the petitioner is entitled to the benefit of issuance of Form C for inter State purchases of natural gas used in its manufacturing activities and for generation of electricity at its captive power plant. The conclusion follows the consistent view taken by several High Courts and the Supreme Court's treatment in The Ramco Cements Ltd., which affirmed the approach that the restriction in the post 2017 definition of 'goods' in Section 2(d) does not defeat the availability of Section 8(1)/8(3) concessions for inter State purchases of inputs like natural gas when used for manufacture or generation of electricity. The Court noted that earlier contrary administrative circulars and memoranda had been withdrawn and, having regard to the judicial precedents, declined to depart from the settled view that C Forms must be issued where the statutory tests for concessional inter State tax treatment are met. Consequently, the petitioner is entitled to have C Forms issued and, where excess tax has been collected due to wrongful refusal, to appropriate relief as governed by the precedents. [Paras 16, 18, 19]

Writ allowed directing issuance of C Forms for natural gas purchased inter State and used in manufacture and in generation of electricity; petition allowed in terms of amended prayers (cc1) and (cc2).

Issuance of Form C for inter State purchase of natural gas used in manufacture or in generation of electricity - precedential effect of The Ramco Cements Ltd. decision (Supreme Court) on High Court rulings - Second petition (Writ Petition No. 2923 of 2019) is covered by the same legal position and is allowed. - HELD THAT: - The Court recorded that the issues in the second petition are identical to those decided in Writ Petition No. 932 of 2018 and are governed by the same precedents, including the Supreme Court's dismissal/affirmation in The Ramco Cements Ltd. Accordingly, for the reasons recorded in the earlier order, the second petition is allowed in terms of its prayer seeking declaration of entitlement to issue C Forms and direction for respondents to issue C Forms. [Paras 21, 22, 23]

Writ allowed in terms of prayer clause (a); rule made absolute. No costs.

Final Conclusion: Both petitions were allowed: the Court directed that C Forms be issued in respect of inter State purchases of natural gas used in manufacture and for generation of electricity, the orders following the consistent view of several High Courts and the Supreme Court in The Ramco Cements Ltd.; the second petition was disposed of on the same basis.