TaxTMI Updates e-Newsletter
Aug 24,2026

Alternative statutory remedy under the CGST Act - Maintainability of the challenge when a statutory appeal under the CGST Act was available - HELD THAT: - The Court declined to interfere because the High Court [2026 (6) TMI 1287 - GUJARAT HIGH COURT] correctly held that the petitioner had an efficacious alternative remedy of statutory appeal under section 107 of the CGST Act. The petitioner was left free to urge all legally available submissions, including deficiencies in the show-cause notice, before the Appellate Authority. [Paras 1, 2]

The petitioner was granted four weeks to prefer the statutory appeal before the Appellate Authority.

Final Conclusion: The Special Leave Petition was disposed of without interference, leaving the petitioner to pursue the statutory appellate remedy.

Limitation for GST appeals - Exclusion of time for bona fide rectification proceedings - Principles underlying Section 14 of the Limitation Act

Limitation for GST appeals - Exclusion of time for rectification proceedings - Limitation for an appeal under Section 107 runs from communication of the particular order challenged, and not from disposal of a rectification petition unless exclusion of time is independently established - HELD THAT: - An appeal against the order-in-original must be filed within the prescribed period reckoned from communication of that order; an appeal against a rectification order is similarly governed by communication of that rectification order. The principles underlying Section 5 of the Limitation Act cannot enlarge the statutory outer limit for condonation under Section 107. The earlier decisions in SPK and Co [2024 (12) TMI 140 - MADRAS HIGH COURT] and Sri Ramajeyam Engineering Industries [2025 (1) TMI 886 - MADRAS HIGH COURT] which treated disposal of the rectification petition as the starting point of limitation without examining Section 107 and Section 14 requirements, were held not to be good law. [Paras 11, 12, 13, 14]

The limitation clock is not automatically suspended or recommenced by filing a rectification petition.

Principles underlying Section 14 of the Limitation Act - Bona fide mistaken remedy - Good faith and due diligence - HELD THAT: - Although the Limitation Act does not per se apply before quasi-judicial authorities, the principles underlying Section 14 apply to proceedings under GST enactments because Section 107 is substantially similar to the appellate provision considered in M.P. Steel Corporation [2015 (4) TMI 849 - SUPREME COURT] The GST enactments neither expressly nor impliedly exclude those principles; their express provisions for exclusion during stays do not indicate that all other exclusions are barred. A rectification petition rejected for want of an apparent error does not decide the larger assessment dispute on merits and may constitute a bona fide mistaken remedy within "other cause of a like nature". However, exclusion is not automatic: the proceedings must concern the same parties and matter, and the rectification petition must have been prosecuted with due diligence and in good faith. Good faith requires a broad examination to ascertain that there was some basis for seeking rectification, so as to prevent abuse through meritless rectification petitions. [Paras 25, 30, 34, 36, 37]

Where entitlement is established, the prescribed appeal period and the time spent from filing to rejection of the rectification petition stand excluded; the appeal may then be filed within the prescribed period from rejection, subject to the statutory power of condonation.

Good faith in rectification proceedings - Exclusion of time for rectification proceedings - Entitlement to exclusion of time was determined according to whether the respective rectification petitions disclosed an arguable basis and were pursued in good faith and with due diligence - HELD THAT: - Exclusion was granted in matters where the rectification petitions disclosed patent or arguable errors, non-consideration of material already placed before the assessing officer, or a plausible basis for rectification. In the remaining matters, where rectification was sought substantially on the basis of material not previously produced or without any discernible error apparent from the original order, exclusion was declined. Those matters were nevertheless remanded on the petitioners' consent to remit the stipulated portion of the disputed tax demand, subject to the conditions imposed by the Court. [Paras 48, 49, 50, 51, 52]

The appellate orders in the cases found entitled to exclusion were set aside and the appeals directed to be decided on merits; in the other identified matters, the original orders were remanded for reconsideration subject to the agreed remittance conditions.

Final Conclusion: The writ petitions in which the rectification proceedings were held to satisfy the requirements of good faith and due diligence were allowed, with directions to entertain the statutory appeals on merits. The remaining identified matters were remanded for fresh consideration subject to the respective consent-based remittance conditions.

Anticipatory bail in cyber-enabled GST registration fraud - Custodial interrogation in financial fraud investigation

Entitlement to anticipatory bail in a case alleging fraudulent creation and use of GST registrations by misuse of PAN cards and other credentials of innocent persons - HELD THAT: - The Court considered the alleged use of technical evidence connecting the accused with mobile numbers and email IDs used for the fraudulent GST activity, the ongoing investigation into the extent of the fraud, and the accused's failure to join investigation. Having regard to the serious economic ramifications of fake GST returns and the stated need for custodial interrogation in the continuing technical investigation, grant of anticipatory bail was held inappropriate. [Paras 7, 8, 9, 10]

The application for anticipatory bail was dismissed.

Final Conclusion: Anticipatory bail was refused in view of the gravity of the alleged cyber-enabled GST fraud, the continuing technical investigation, and the justified requirement of custodial interrogation.

Use of artificial intelligence in quasi-judicial adjudication - Independent application of mind

Use of AI-generated legal material in adjudication orders without independent verification - HELD THAT: - The officer tendered an unconditional apology for relying on AI while drafting the order and citing non-existent and irrelevant judgments. The Court directed that the departmental instructions requiring independent verification of AI-derived legal material, human oversight, and the issuing authority's own application of mind shall be scrupulously followed. [Paras 6]

Violation of the instructions was directed to be treated as contempt of court.

Cancellation of GST registration - Fresh adjudication - Disposal of proceedings arising from cancellation of GST registration and rejection of its revocation - HELD THAT: - In view of the respondents' stated intention to revise the impugned orders and issue a fresh notice, the Court accepted the fair stance. The merits were left open, with a direction that the petitioner's reply and defence be duly considered in a reasoned order passed in accordance with law. [Paras 9]

The show-cause notice, cancellation order, order rejecting revocation, and appellate order were quashed and set aside; the authority was directed to issue a fresh notice.

Final Conclusion: The impugned proceedings were quashed for fresh adjudication after notice and consideration of the petitioner's defence. The Court further mandated scrupulous compliance with departmental safeguards governing the use of AI in adjudicatory orders.

Transitional input tax credit refund - Belated writ petition after expiry of statutory appeal limitation

Transitional input tax credit refund - Proof of opening balance in Electronic Credit Ledger - Refund of transitional SGST input tax credit claimed for November, 2017 in the absence of proof that the credit stood in the Electronic Credit Ledger on the appointed day - HELD THAT: - Transitional credit representing the unutilised balance under the erstwhile regime would be available as opening input tax credit on 01.07.2017. Petitioner neither produced the prescribed TRAN-1 declaration nor satisfactory material establishing that the claimed credit was available in the Electronic Credit Ledger on that date. Refund could be allowed only on such proof. [Paras 10, 11]

No interference with rejection of the refund claim was warranted.

Belated writ petition after expiry of statutory appeal limitation - Exhaustion of statutory remedy - Maintainability of a writ petition filed after expiry of the statutory period for appeal against the assessment order - HELD THAT: - Where a petitioner, through its own default, disables itself from pursuing the statutory remedy within limitation, discretionary writ jurisdiction cannot ordinarily be invoked to revive the unenforceable cause of action. The wide jurisdiction under Article 226 cannot be exercised inconsistently with the legislative scheme prescribing limitation for statutory redressal, particularly where the challenge is inordinately belated. [Paras 12, 13, 14, 15, 16]

The belated writ petition was not entertainable and was dismissed.

Final Conclusion: The writ petition was dismissed, both because the claimed transitional credit was not substantiated as an opening Electronic Credit Ledger balance and because the statutory appellate remedy had been allowed to become time-barred.

Passport renewal during pending criminal proceedings - Travel restrictions as bail safeguards

Renewal of a passport for its regular term where the accused in pending proceedings remains subject to prior court permission for foreign travel - HELD THAT: - The condition requiring prior permission of the Court before leaving the country, reinforced by directions to the investigating and immigration authorities, constituted sufficient safeguards against unauthorised travel irrespective of the passport's renewal term. The absence of plausible reasons, substantive harm or reasonable apprehension, together with the petitioner's stated roots in India, did not justify restricting renewal to three years. [Paras 10, 11, 12, 13]

The passport was directed to be renewed for the regular term of ten years, while all other conditions governing foreign travel remained binding.

Final Conclusion: The petition was allowed and the passport-renewal direction was modified to grant renewal for ten years, subject to the continuing conditions restricting foreign travel without prior court permission.

Cancellation of GST registration - mandatory personal hearing in show-cause notice - Physical verification report - mandatory upload on common portal - Alternative remedy - violation of principles of natural justice

Cancellation of GST registration - mandatory personal hearing in show-cause notice - Validity of cancellation proceedings where the show-cause notice granted time to reply but omitted the date and time of personal hearing - HELD THAT: - Form GST REG-17 requires the proper officer both to allow seven working days for filing a reply and to afford personal hearing by specifying its date and time. The impugned notice omitted the date and time for personal hearing and was consequently issued contrary to the prescribed form and the requirement of natural justice. [Paras 9]

The show-cause notice and the consequential cancellation of registration were quashed, with liberty to initiate fresh proceedings in accordance with Form GST REG-17.

Physical verification report - mandatory upload on common portal - Validity of cancellation proceedings founded on physical verification of the declared business premises without uploading the verification report and supporting documents on the common portal - HELD THAT: - Rule 25 mandates upload of the physical verification report, supporting documents and photographs in Form GST REG-30 on the common portal within fifteen working days of verification. As those documents had not been uploaded before the final orders were passed, the show-cause notice and cancellation order were contrary to Rule 25. [Paras 10, 11]

The cancellation proceedings were quashed, subject to liberty to commence fresh proceedings strictly in accordance with Rule 25.

Alternative remedy - violation of principles of natural justice - Maintainability of the writ petition despite availability of a remedy for revocation of cancellation of GST registration - HELD THAT: - Availability of an alternative statutory remedy does not bar exercise of writ jurisdiction where there is violation of principles of natural justice or the impugned order is ultra vires. [Paras 12]

The writ petition was entertained and allowed notwithstanding the alternative remedy.

Final Conclusion: The writ petition was allowed and the impugned show-cause notice and cancellation order were quashed for non-compliance with Form GST REG-17 and Rule 25. Fresh proceedings may be initiated strictly in accordance with the prescribed requirements.

Natural justice in GST adjudication - Personal hearing and consideration of show-cause reply

Validity of the GST adjudication order passed without granting the requested personal hearing or considering the reply to the show-cause notice - HELD THAT: - The admitted denial of the requested personal hearing constituted a flagrant breach of natural justice. An adjudicating authority must independently apply its mind to the reply to the show-cause notice and give reasons for rejecting or varying the explanation; the reply cannot be treated as an empty formality. [Paras 6, 7]

The adjudication order was set aside and the matter remitted to the adjudicating authority for fresh adjudication on merits after affording a reasonable opportunity of hearing, with liberty to the petitioner to raise legal and factual issues and adduce evidence.

Final Conclusion: The GST adjudication order was quashed for breach of natural justice and remitted for a fresh decision after granting the petitioner a reasonable opportunity of hearing.

Special procedure for availing input tax credit - challenge to a Notification No. 22/2024-Central Tax dated 8/10/2024, which, according to the petitioner, runs contrary to the spirit of sub-section (5) of Section 16 of the Central Goods and Services Tax Act, 2017

Whether the six-month period prescribed by Notification No. 22/2024-Central Tax for seeking rectification to avail the benefit of retrospective Section 16(5) is valid, particularly in the absence of a provision for extension in extraordinary circumstances? - HELD THAT: - The power under Section 148 authorises the Government, on the recommendations of the Council and subject to prescribed conditions and safeguards, to notify classes of registered persons and special procedures concerning registration, returns, payment of tax and their administration.

A notification prescribing a procedure for implementation of the input tax credit entitlement is therefore permissible under that provision. The further question whether the six-month period for seeking rectification incorporates the requisite safeguards, particularly in the absence of a provision for extension in extraordinary circumstances, was left for further consideration. [Paras 6, 7]

The competence to prescribe the special procedure was upheld at the preliminary stage; consideration of the adequacy of safeguards in the stipulated period was deferred.

Final Conclusion: The writ petitions were kept pending for further consideration on the question whether the notified six-month period satisfies the statutory requirement of safeguards.

Alternative statutory remedy - Maintainability of writ petition against GST adjudication order

Challenge to a fresh GST adjudication order and show-cause notice in writ jurisdiction despite an available statutory appeal - HELD THAT: - The fresh order was passed pursuant to the earlier direction of the Court after affording an opportunity of hearing. Since an appeal against that order was maintainable and the petitioner could raise all objections, including the objection concerning the subsequent show-cause notice, before the appellate authority, writ interference was not warranted. [Paras 9, 10]

The writ petition was disposed of, leaving the petitioner to avail the appellate remedy; any application for exclusion of the period spent in prosecuting the writ petition was directed to be considered pragmatically by the appellate authority.

Final Conclusion: The petitioner was relegated to the statutory appellate remedy against the fresh adjudication order, with liberty to raise all objections before the appellate authority.

Service of show cause notice through common portal - Ex parte GST adjudication for want of effective notice

Validity of an ex parte order under Section 73 of the CGST Act where the show cause notice and order were uploaded on the common portal and no reply was filed - HELD THAT: - The Court accepted the position that mere uploading of a show cause notice on the common portal, without acknowledgement of its receipt or a reply by the assessee, does not constitute sufficient service. Since the impugned order was founded on such notice and the petitioner had not filed a reply, the adjudication could not be sustained. [Paras 6]

The impugned order was set aside; the petitioner was granted liberty to reply to the show cause notice, following which the competent authority was directed to proceed in accordance with law and pass a fresh order.

Final Conclusion: The writ petition was disposed of by setting aside the ex parte adjudication order and restoring the matter for fresh adjudication after affording the petitioner an opportunity to respond to the show cause notice.

Withholding of electronic cash ledger refund pending appeal - Commissioner's order and opportunity of hearing for withholding refund

Whether refund could be withheld during pendency of the Revenue's appeal without a specific order by the Commissioner under Section 54(11) of the Central Goods and Services Tax Act, 2017? - HELD THAT: - The record did not disclose that the Commissioner had undertaken any proceeding or exercise under Section 54(11) warranting withholding of the refund. A specific determination by the Commissioner, after issuance of show cause notice and affording proper opportunity of hearing to the petitioner, was required for deciding payment or withholding of the refund during pendency of the appeal. [Paras 9, 10, 11]

The writ application was disposed of with directions to the Commissioner to issue notice, grant hearing and pass a reasoned order on payment or withholding of the refund in accordance with Section 54(11).

Final Conclusion: The Commissioner was directed to determine, after notice and hearing, whether the claimed refund should be paid or withheld during pendency of the Revenue's appeal.

Natural justice in electronic service of show-cause notice - Limitation for GST appeal

Dismissal of the GST appeal as time-barred where the show-cause notice was uploaded only under the 'Additional Notice and Orders' tab without separate intimation - HELD THAT: - The Court found a prima facie case and held that uploading the show-cause notice only under the specified portal tab, without separate intimation, prevented the petitioners from responding and constituted a violation of natural justice. As the appellate authority had dismissed the appeal solely on limitation without considering its merits, interference was warranted in the peculiar facts. [Paras 5, 6]

The appellate order was quashed and the appellate authority was directed to admit and decide the appeal on merits after affording a hearing and passing a fresh reasoned order.

Final Conclusion: The writ petition was disposed of by setting aside the limitation-based dismissal of the appeal and remitting it for a merits determination in accordance with law.

Revocation of cancelled GST registration - opportunity of personal hearing - Natural justice - effective notice of hearing - Speaking order

Rejection of the application for revocation of cancellation of GST registration without intimating the appointed date and time for personal hearing - HELD THAT: - The statutory requirement of an opportunity of hearing requires a proper and effective opportunity. Although the show-cause notice contemplated an ex parte decision upon non-appearance at the appointed hearing, it did not specify or communicate any date and time for such hearing.

The rejection order, founded solely on non-submission of a reply, was also cryptic and non-speaking. The applicant was consequently denied the mandatory effective hearing before an adverse order was made. [Paras 8, 9]

The rejection order was set aside and quashed, and the Proper Officer was directed to proceed from the show-cause notice stage after issuing notice of personal hearing through the common portal and e-mail, and thereafter decide the revocation application on merits in accordance with law.

Final Conclusion: The writ petition was disposed of by quashing the rejection of the revocation application for denial of an effective opportunity of personal hearing and by directing fresh consideration after due notice.

Availability of efficacious statutory remedy - Exercise of writ jurisdiction - Exercise of writ jurisdiction against cancellation of GST registration when the GST Tribunal has been constituted and provides an efficacious appellate remedy - HELD THAT: - As the GST Tribunal had been constituted during the pendency of the writ petition, an equally efficacious remedy was available. The Court therefore declined to exercise its extraordinary writ jurisdiction, leaving all issues and contentions open for adjudication by the Tribunal. [Paras 4, 5, 6]

The matter was remanded to the GST Tribunal for adjudication on merits; the period spent in pursuing the writ remedy was directed to be excluded for limitation if the petitioner approaches the Tribunal within the stipulated time.

Final Conclusion: The writ petition was disposed of by relegating the petitioner to the GST Tribunal, with all merits left open and protection granted in respect of the time spent before the Court.

Unexplained cash credit - year of taxability of advance received - addition u/s 68 - impermissibility of addition in a year other than year of receipt

HELD THAT: - Even assuming that the assessee had structured the sale transaction to obtain set-off of capital loss against capital gain, recourse to Section 68 was not permissible for that purpose. The amount sought to be added had admittedly been received in FY 2006-07; its addition in the year under consideration could not be sustained. [Paras 16, 17]

The deletion of the Section 68 addition was upheld and the Revenue's appeal was rejected.

Final Conclusion: The appeal was rejected, the Court holding that an advance admittedly received in FY 2006-07 could not be brought to tax as an unexplained cash credit in AY 2016-17.

Validity of penalty notice under section 271(1)(c) for failure to specify the applicable limb - Penalty notice for concealment of income or furnishing inaccurate particulars - Specificity of charge in penalty proceedings

HELD THAT: - The two limbs of section 271(1)(c) are disjunctive and independent. A notice must inform the assessee which limb is invoked, since concealment of income and furnishing inaccurate particulars may require different explanations and treatment. Recording satisfaction for initiation of penalty proceedings without clarity as to the applicable limb does not cure a notice that retains both alternatives.

Unless the AO puts the assessee to notice as to which part of Clause (c) he seeks to invoke against the assessee, the assessee cannot be expected to defend his cause. The issuance of notice cannot be rendered nugatory or an empty formality, because furnishing inaccurate particulars and concealment of income though may lead to one end result, but they have different means. They certainly can have different explanation to be offered by the assessee and may have different treatments by the AO. The first judgment of Karnataka High Court in this regard rendered in case of Manjunatha Cotton & Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] followed by it in the case of CIT v. SSA’s Emerald Meadows [2015 (11) TMI 1620 - KARNATAKA HIGH COURT] has been affirmed by Hon’ble the Supreme Court, as the SLP thereagainst has been rejected.

Similarly, Delhi High Court's judgment in the case of Unitech Reliable Projects (P) Ltd. [2023 (6) TMI 1219 - DELHI HIGH COURT] has also been affirmed by Hon’ble the Supreme Court because SLP preferred there-against too has been rejected, as has been reported in [2024 (9) TMI 36 - SC ORDER]

There are umpteen number of judgments of Delhi High Court, such as Gragarious Projects Pvt. Ltd. [2024 (11) TMI 1108 - DELHI HIGH COURT] etc. We neither wish to multiply the judgments nor do we unnecessarily propose to burden our readers.[Paras 28, 29, 30, 31, 34]

The defective notice was held invalid and the revenue's appeal against deletion of the penalty was rejected.

Final Conclusion: The appeal was dismissed, the Court holding that a penalty notice which does not identify the precise limb of section 271(1)(c) invoked against the assessee cannot sustain the penalty proceedings.

Pre-reassessment inquiry and procedural safeguards - Personal hearing at the pre-reassessment stage - Prima facie formation of opinion on income escaping assessment

Validity of the pre-reassessment order and consequential reassessment notice where an oral hearing was not granted and the alleged escaped income included unsecured loan and cash-deposit information - HELD THAT: - AO had issued a show-cause notice, invited and considered the reply, and passed a reasoned order. Non-grant of an oral hearing at the preliminary stage did not by itself vitiate the proceedings, since a substantive opportunity was available in reassessment. The loan amount and cash-deposit amount were intrinsically connected with the information concerning escaped income and had been considered collectively. At this stage, only a prima facie opinion was required; examination of the loan's genuineness was reserved for reassessment. [Paras 11, 12, 13, 15]

The pre-reassessment order and consequential notice were upheld; the Assessing Officer was directed to afford a meaningful personal hearing and consider further documents and explanations in reassessment, with all merits contentions left open.

Final Conclusion: The writ petition was disposed of by upholding the pre-reassessment order and notice for Assessment year 2019-20, while requiring a proper personal hearing during reassessment and leaving the merits open.

Registration of charitable institution u/s 12AB - opportunity to substantiate lease and rent expenditure

Rejection of the application for registration of an educational society on the ground that legally valid evidence of leased land and rent expenditure was not furnished - HELD THAT: - The Tribunal found that the society had filed the rent agreement on the basis of which rent was paid and had reflected the building in its balance sheet. As a further opportunity to furnish detailed material had not been afforded, the claim required fresh consideration after allowing the society one final opportunity to substantiate it. [Paras 6]

The rejection was restored to the CIT(E) for fresh decision in accordance with law after granting one final opportunity to the society; the society was directed to cooperate in the proceedings.

Final Conclusion: The appeal was allowed for statistical purposes and the registration application was remanded to the CIT(E) for fresh adjudication after affording the society a final opportunity to produce supporting material.

Charitable exemption u/s 11 - belated filing of audit report in Form No. 10B - Procedural requirement for audit report

Entitlement of a charitable trust to exemption under section 11 despite delayed submission of the audit report in Form No. 10B - HELD THAT: - Filing the audit report in the prescribed form was held to be a procedural and directory requirement. Since the audit report was filed along with the return and before issuance of the intimation under section 143(1), exemption could not be denied merely because the report had not been filed within the stipulated time.

We quote the decision of Vardhman Stanakvasi Jain Shravak Trust [2025 (2) TMI 762 - ITAT AHMEDABAD] ITAT held that delay in submission of Form No. 10B is a procedural defect, hence, where assessee had filed Form No. 10B before Commissioner (Appeals) before conclusion of appellate proceedings, exemption under sections 11 and 12 could not be denied to assessee only on account of late filing of Form No. 10B.[Paras 7]

The denial of exemption was reversed and the charitable trust was held entitled to exemption under section 11.

Final Conclusion: The appeal was allowed. The charitable trust could not be denied exemption under section 11 solely due to delayed filing of Form No. 10B.

Levy of penalty @ 200% - Penalty for under-reporting or misreporting of salary income - Consideration of bona fide explanation under the exclusion from under-reported income

Levy of penalty for under-reporting or misreporting of salary income without consideration of the assessee's explanation that return was not filed because tax had been deducted at source from the entire income - HELD THAT: - The Assessing Officer levied penalty at 200 per cent without assigning a specific reason for imposing it beyond the minimum rate. The appellate authority did not examine whether the assessee's explanation was bona fide and whether the statutory exclusion from under-reported income applied. Where the penal provision itself provides for such exclusion, the facts must be tested against it; the lapse is not condoned merely because the explanation warrants examination. [Paras 3]

The impugned order was set aside and the matter was remanded to the appellate authority to examine the case under section 270A(6) and pass a reasoned and speaking order.

Final Conclusion: The appeal was partly allowed for statistical purposes, with a direction for fresh consideration of the assessee's eligibility for exclusion from under-reported income under section 270A(6).

Penalty u/s. 271G - failure to furnish transfer-pricing documentation - Specificity of penalty notice

HELD THAT: - A penalty notice initiating jurisdiction under section 271G must identify the particular information or documents required under section 92D which were not furnished. The notice issued under sections 274 and 271G was ambiguous and did not specify that non-furnishing of the transfer-pricing study report was the alleged default.

Hon’ble Supreme Court in CIT v. Gillette India Ltd. [2018 (10) TMI 443 - SC ORDER] has held that a specific finding should be recorded with respect to the date by which assessee was required to furnish documents and whether said documents were furnished within specified date.

Further, the earlier notices relied upon were issued under section 92CA(2), not under section 92D(3), and the transfer-pricing study report was furnished in response to the specific notice issued under section 92D(3). In the absence of a specified default and non-compliance with the statutory procedure, no penalty could be sustained. [Paras 12, 14, 16, 17]

The penalty was deleted and the impugned penalty order was quashed.

Final Conclusion: The appeal was allowed, as the penalty proceedings were founded on an unspecified notice and the assessee had complied with the specific requisition for the transfer-pricing study report.

TP Adjustment - Arm's length rate for corporate guarantee commission - Arm's length interest rate on loans advanced to associated enterprises - Notional interest on outstanding trade receivables from associated enterprises - Verification of brought forward business losses on remand

Corporate guarantee commission - Arm's length price - rate at which corporate guarantee commission extended by the assessee to its associated enterprise ought to be benchmarked for transfer pricing purposes - HELD THAT: - The TPO benchmarked the corporate guarantee at 2% of the guaranteed amount by applying the Safe Harbour Rule, treating the guarantee as a separate international transaction exposing the assessee to default risk.

CIT(A) reduced the adjustment to 1% following the co-ordinate Bench decision in the assessee's own case for an earlier assessment year, wherein comparable guarantee commission rates upheld in other cases were considered and 1% was found to be a fair and reasonable arm's length rate, particularly since the assessee itself had charged 1% from one associated enterprise. The Tribunal respectfully followed this precedent [2015 (7) TMI 147 - ITAT DELHI] [Paras 8, 9]

The Tribunal upheld benchmarking of the corporate guarantee commission at 1% and dismissed the Revenue's ground on this issue.

Arm's length interest rate - LIBOR-based benchmarking of loans to associated enterprises - arm's length rate of interest chargeable on interest-free loans advanced by the assessee to its associated enterprises - HELD THAT: - The TPO benchmarked the interest at LIBOR plus 400/500 basis points drawing an indirect basis from the RBI Master Circular ceiling applicable to ECBs. The CIT(A) restricted the adjustment to the bare LIBOR rate, following an earlier co-ordinate Bench order for subsequent assessment years. The Tribunal disagreed with confining the benchmark to bare LIBOR, holding that interest rates in the financial market are always quoted as LIBOR plus basis points, and that LIBOR plus 200 basis points represents the normal and reasonable arm's length interest rate. [Paras 19]

The Tribunal modified the direction and directed the Assessing Officer/TPO to charge interest at LIBOR plus 200 basis points on the outstanding loan, partly allowing the Revenue's grounds.

Notional interest on outstanding receivables - Comparability with non-associated enterprise transactions - whether notional interest could be imputed on outstanding trade receivables from associated enterprises? - HELD THAT: - Following the co-ordinate Bench finding [2025 (8) TMI 145 - ITAT DELHI], that the assessee had not charged interest on delayed payments even from non-associated enterprises in respect of substantial comparable sales, the Tribunal held that no notional interest addition could be sustained solely with reference to outstanding receivables from associated enterprises. [Paras 20, 21]

The Tribunal upheld deletion of the adjustment towards notional interest on outstanding receivables and dismissed the Revenue's grounds.

Disallowance of brought forward losses by considering it as no loss but profits after the assessment done for the previous years - CIT (A) observed that the same is deleted on the basis of directions of ITAT in the earlier year - HELD THAT: - CIT(A) had deleted the disallowance solely on the premise that the Tribunal had given a specific direction on the issue in an earlier assessment year. The Tribunal, on verification, found that no such finding existed in the earlier years' orders and, in the interest of justice, remitted the matter to the Assessing Officer for fresh verification of the claim after affording the assessee an opportunity of hearing. [Paras 23]

The issue was remanded to the Assessing Officer for verification of the claim regarding brought forward losses, without adjudication on merits, and the ground was allowed for statistical purposes.

Final Conclusion: The Revenue's appeal was partly allowed: the corporate guarantee commission benchmark of 1% was upheld, the interest benchmark on outstanding loans to associated enterprises was modified to LIBOR plus 200 basis points, deletion of notional interest on outstanding receivables was affirmed, and the issue of brought forward losses was remanded to the Assessing Officer for verification.

Computation of income from house property - Deductibility of subletting charges - computing taxable rental income

Whether subletting charges paid to MIDC as a condition for subletting leasehold property are deductible in computing taxable rental income, notwithstanding the statutory deduction under Section 24(a)? - HELD THAT: - We find that the identical issue has already been considered in the case of Western Industrial Cooperative Estate Ltd [2021 (7) TMI 1494 - ITAT MUMBAI] wherein it was held that the subletting charges paid to MIDC constitute an integral cost for earning the rental income and that only the net rental income, after reducing such charges, can be regarded as the income of the assessee. The said view has again been reiterated in Western Industrial Cooperative Estate Ltd. [2025 (12) TMI 1894 - ITAT MUMBAI]

Thus, payment of subletting charges was a precondition under the lease arrangement for commercially exploiting the leasehold property by subletting it. Such charges constituted an integral cost of earning the rental income; consequently, only the rental income net of those charges could be brought to tax. The statutory deduction under section 24(a) did not preclude this computation, and the principle concerning strict interpretation of exemption provisions was inapplicable. [Paras 7]

The disallowance of subletting charges was deleted and the Assessing Officer was directed to allow the claim.

Final Conclusion: The assessee's appeal was allowed and the disallowance of subletting charges in computing rental income from the leasehold property was deleted.

Cash receipts relating to transfer of immovable property - Penalty u/s 271D for acceptance of specified sum in cash - Penalty levied for an incorrect assessment year

Cash receipts relating to transfer of immovable property - Specified sum u/s 269SS - whether Cash consideration received in relation to transfer of immovable property was governed by section 269SS and not by section 269ST? - HELD THAT: - The Tribunal held that the definition of "specified sum" covers money receivable, whether as advance or otherwise, in relation to transfer of immovable property. Consequently, the assessee's contention that such receipt was governed exclusively by section 269ST was rejected. [Paras 9, 10]

The additional ground asserting applicability of section 269ST instead of section 269SS was decided against the assessee.

Penalty for acceptance of specified sum in cash - Penalty levied for an incorrect assessment year - HELD THAT: - The Tribunal found that the cash receipts were made between 11-03-2015 and 11-08-2015, whereas no cash consideration was received during the financial year relevant to A.Y. 2017-18. Since the penalty had been levied for A.Y. 2017-18, it was held to be bad in law. The Tribunal also noted that the lower appellate authority had not considered that part of the cash receipt preceded the amendment extending section 269SS to specified sums relating to immovable property. [Paras 11]

The penalty levied under section 271D for A.Y. 2017-18 was deleted and the impugned appellate order was set aside.

Final Conclusion: The appeal was allowed. While section 269SS was held applicable to cash receipts connected with transfer of immovable property, the penalty levied for A.Y. 2017-18 was deleted because no cash consideration had been received in the relevant financial year.

Rebate u/s 87A on short-term capital gains - Concessional tax regime u/s 115BAC - Allowability of rebate u/s 87A against tax payable on short-term capital gains chargeable u/s 111A where the assessee opted for the concessional tax regime under section 115BAC

HELD THAT: - The issue was covered in favour of the assessee decision [2026 (7) TMI 286 - ITAT JAIPUR] this Bench, and Jayshreeben Jayantibhai Palsana [2025 (8) TMI 842 - ITAT AHMEDABAD]. The Revenue neither cited a contrary jurisdictional High Court or Supreme Court decision nor distinguished the precedent relied upon. Following the settled view, the Tribunal held that the rebate granted was in accordance with law. [Paras 9]

The Revenue's challenge to grant of the rebate under section 87A was rejected.

Final Conclusion: The Revenue's appeal was dismissed, and the grant of rebate under section 87A on tax computed on the short-term capital gains was sustained for Assessment Year 2024-25.

Agricultural income from sale of dates - Estimated agricultural expenditure without evidentiary basis

Agricultural income from sale of dates - Treatment of the differential amount between disclosed and estimated receipts from sale of dates as income from other sources - HELD THAT: - The agricultural operations, date plantation and source of the produce were accepted, and no material disproved the quantity actually sold or the sale proceeds recorded. A mathematical estimate of probable yield, founded on an earlier field report concerning dead or damaged plants, could not, without material contradicting the disclosed sales, render the difference non-agricultural income. [Paras 6]

The addition made by treating part of the disclosed date-sale receipts as income from other sources was deleted.

Estimated agricultural expenditure without evidentiary basis - Addition arising from enhancement of agricultural expenditure to a fixed percentage of gross agricultural receipts - HELD THAT: - No particular expenditure was found false or inadmissible, nor was there comparable material, agricultural data, expert evidence or other cogent basis for adopting the estimated expenditure percentage. An assessee cannot be subjected to an addition merely because the Assessing Officer considers that higher expenditure ought to have been incurred, absent material showing suppression of expenditure from unexplained sources or falsity of the agricultural accounts. [Paras 7]

The ad hoc addition based on estimated agricultural expenditure was deleted.

Final Conclusion: The appeal was allowed and both additions relating to the assessee's agricultural income were deleted. Consequential interest was directed to be recomputed accordingly.

Income surrendered during survey and included in the return - Special-rate taxation of surrendered income under section 115BBE - Requirement of characterisation under deeming provisions for invoking section 115BBE

HELD THAT: - Section 115BBE prescribes a special rate only for income brought within sections 68 to 69D; it does not create an independent class of taxable income described as surrendered or undisclosed income. Each deeming provision operates within a distinct statutory field and requires satisfaction of its own foundational conditions. As the assessment neither identified nor applied any such provision, and no material or finding established that the disclosed income represented income covered by sections 68 to 69D, its mere surrender during survey could not attract section 115BBE. [Paras 5, 6, 7, 8, 9]

The special rate under section 115BBE was held inapplicable, and the surrendered income was directed to be taxed at the normal rate applicable to the assessee.

Final Conclusion: The appeal was allowed and the finding sustaining taxation at the special rate under section 115BBE was set aside.

Corpus contributions to an approved educational institution - Character of receipts under exemption provisions - claim of exemption was u/s 10(23C)(vi) and not u/s 11

Taxability of donor-directed corpus contributions received by an educational institution claiming exemption under section 10(23C)(vi), rather than u/s 11 - HELD THAT: - The undisputed character of a receipt as a corpus contribution, established by the donors' specific directions, cannot be altered merely because the institution claimed exemption under section 10(23C)(vi). A corpus contribution is materially distinct from an ordinary voluntary contribution available for application towards the institution's objects; its tax treatment must follow its real character and purpose. The absence, during the relevant year, of an identically worded provision in section 10(23C)(vi) did not convert such receipts into ordinary revenue receipts, particularly where there was no material that the corpus character was a facade. [Paras 7, 8, 9, 10, 11]

The corpus contributions could not be brought to tax solely because exemption had been claimed under section 10(23C)(vi); the addition was directed to be deleted.

Final Conclusion: The appeal was allowed and the addition in respect of the donor-directed corpus contributions was deleted.

Adequate opportunity of hearing before assessment - Adequacy of opportunity before completion of assessment following rejection of the books of account and estimation of income - HELD THAT: - Though no fault was found with the rejection of the books of account, the assessee had not replied to the show-cause notice and the assessment was completed shortly thereafter without any further opportunity. This did not constitute adequate opportunity before completion of the assessment. The Tribunal expressly left the merits, including the estimation of income, open for independent determination. [Paras 7]

The appellate order was set aside and the matter remanded to the Assessing Officer for a fresh assessment after verification and after granting adequate and reasonable opportunity of hearing.

Final Conclusion: The assessee's appeal was allowed for statistical purposes, with the assessment remanded for fresh adjudication in accordance with law.

Benami transaction - owner's knowledge of ownership - Provisional attachment of alleged benami property

Whether allotment and subsequent buy-back of shares in the names of job workers constituted a benami transaction where the alleged benamidars acknowledged knowledge of those transactions and receipt of buy-back consideration? - HELD THAT: - For a transaction to fall within Section 2(9)(C) of the Prohibition of Benami Property Transactions Act, 1988, the owner must be unaware of, or deny knowledge of, ownership. The statements made by the alleged benamidars in cross-examination during proceedings under that Act, acknowledging knowledge of the share allotment, buy-back and credit of consideration in their bank accounts, prevailed over conflicting statements recorded in income-tax proceedings. Even if the underlying trade-payable entries disclosed possible tax evasion, that by itself could not satisfy the statutory ingredients of a benami transaction. [Paras 15, 16, 19, 20, 21]

The denial of confirmation of provisional attachment was upheld, as the alleged benamidars' knowledge of the transactions excluded the application of Section 2(9)(C).

Final Conclusion: The appeals were dismissed and the order refusing confirmation of provisional attachment was sustained.

Retrospective amendment of Foreign Trade Policy - Accrued SEIS benefits - Retrospective denial of Service Exports from India Scheme benefits for services rendered during FY 2019-20 by amendments introducing Appendix 3X and excluding specified services under Appendix 3E

HELD THAT: - The power under section 5 to formulate or amend the Foreign Trade Policy does not authorise retrospective amendments that deprive exporters or service providers of rights accrued under an operative scheme. Since the petitioners had rendered eligible services and earned foreign exchange while the scheme was in force, the subsequent notifications could not retrospectively deny their accrued SEIS benefits. [Paras 9, 10]

The retrospective operation of the notifications was quashed; they were held effective only from their respective dates of issue, and the respondents were directed to process and extend the consequential SEIS benefits, including claims that could not earlier be filed.

Final Conclusion: The writ petitions were allowed to the extent that the impugned notifications could operate only prospectively. The petitioners' accrued SEIS claims were directed to be processed with consequential benefits.

Redemption of confiscated prohibited foreign currency - Judicial exercise of discretion under redemption-fine provision - Release of confiscated foreign currency on payment of redemption fine where its export was attempted without declaration or requisite permission. - HELD THAT: - Section 125 of the Customs Act provides for an option to pay redemption fine in lieu of confiscation. In the case of prohibited goods, the adjudicating authority may grant such an option, whereas in the case of other goods, it shall grant such an option. Thus, the power to permit redemption in the case of prohibited goods is discretionary.

Though redemption of prohibited goods is discretionary, the discretion cannot be exercised mechanically merely because the goods are prohibited; it must be exercised judiciously on the facts of each case. In the absence of any material showing a previous violation and where the penalty imposed had already been paid, refusal of redemption required reconsideration. The redemption fine must conform to the statutory ceiling and the principles applied in decisions concerning release of confiscated foreign currency. [Paras 9, 10, 11, 12, 13]

The rejection of release of the confiscated foreign currency was set aside, and the adjudicating authority was directed to determine the redemption fine in accordance with law and release the currency upon its payment.

Final Conclusion: The writ petition was disposed of by setting aside the refusal of redemption and directing determination of redemption fine and consequential release of the confiscated foreign currency.

Classification of aluminium hollow profiles - Specific tariff entry versus residuary heading - End-use exemption for manufacture of Solar PV Modules

Classification of aluminium hollow profiles - Specific tariff entry versus residuary heading - Classification in condition as imported - Classification of aluminium hollow profiles cut to shorter lengths and intended for use in Solar PV Modules under CTI 76042100 or the residuary heading for other articles of aluminium under CTH 76169990 - HELD THAT: - Classification must be determined from the objective characteristics, nature and physical attributes of goods as presented for assessment, and not from the commercial description or their subsequent intended use unless the tariff entry makes use relevant. The profiles retained uniform cross-section and had not assumed the character of finished articles; cutting to size did not deprive them of their character as profiles. In the absence of evidence that the imported goods were complete frames or articles of aluminium, the specific heading for aluminium profiles prevailed over the residuary heading for other articles of aluminium. [Paras 32, 33, 34, 36, 37]

The imported goods were classifiable under CTI 76042100 as aluminium hollow profiles.

End-use exemption for manufacture of Solar PV Modules - Concessional import procedure and end-use certificates - Availability of the concessional customs exemption for aluminium profiles imported for manufacture of Solar PV Modules during the currency of Notification No. 24/2005-Cus - HELD THAT: - The exemption depended upon intended use in manufacture of the notified goods, and could not be denied on a hypothetical possibility of other uses. The imports had followed the concessional-rate procedure and were supported by end-use certificates issued by the jurisdictional authorities, whose validity was neither disputed nor shown to have been procured improperly. The exemption was available irrespective of classification within Chapter 76 for bills of entry filed before the amendment became effective. [Paras 40, 41, 42]

The appellant was entitled to the exemption under Notification No. 24/2005-Cus for bills of entry filed on or before 31.03.2022.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief. The aluminium hollow profiles were held classifiable under CTI 76042100, and the claimed exemption was held available for imports made before the amendment took effect.

Classification of keyboard imported for personal use - Scope of Customs Tariff Heading 9804 limited to dutiable goods - Meaning of 'dutiable goods' under Section 2(14) of the Customs ActClassification under CTH 8471 6040 versus CTH 9804 9000 - 'All dutiable articles intended for personal use' under IGST Notification Schedule IV - Free rate of duty precluding classification as dutiable goods -

HELD THAT: - The Tribunal examined the Chapter Notes to Chapter 98, and found that CTH 9804 applies only to goods that are otherwise 'dutiable' and imported for personal use, and further excludes goods requiring an import licence or Customs Clearance Permit. Since the keyboard finds a specific entry under CTH 8471 6040 with the tariff rate shown as 'Free', it is not a 'dutiable' article within the meaning of Section 2(14) of the Customs Act, which defines 'dutiable goods' as goods chargeable to duty on which duty has not been paid.

Relying on the Supreme Court's ruling in Associated Cement Companies Ltd [2001 (1) TMI 248 - SUPREME COURT (LB)] where drawings classifiable under a 'free' tariff entry were held not to be 'dutiable articles' merely because carried as passenger baggage, the Tribunal held that mere importation for personal use cannot convert an item that is freely importable under its specific tariff entry into a 'dutiable' article so as to attract CTH 9804. The same reasoning was applied to Sl. No. 227 of Schedule IV to the IGST Rate Notification, which likewise covers only 'dutiable articles' intended for personal use. [Paras 5, 6, 7]

The keyboard, being freely importable under CTH 8471 6040, cannot be classified under CTH 9804 9000 merely because it was imported for personal use, and no Basic Customs Duty or IGST under Sl. No. 227 of Schedule IV was leviable on it

Final Conclusion: The Tribunal held that the keyboard, being classifiable under CTH 8471 6040 with a 'Free' rate of duty, is not a dutiable article and therefore cannot be classified under CTH 9804 9000 merely because it was imported for personal use; the appeal was allowed with consequential relief.

Preferential tariff treatment on Certificate of Origin - Verification of Certificate of Origin - Reliance on retracted statements

Denial of preferential duty exemption on Cold Rolled Stainless-Steel Coils of Grade-J3 imported from Malaysia on the allegation that the Certificates of Origin were unauthentic and the goods were of Chinese origin - HELD THAT: - The Certificates of Origin produced by the appellant were not among the certificates specifically found non-authentic by the Malaysian issuing authority. The departmental case rested on a verification concerning another certificate and on a general e-mail regarding the supplier, without undertaking the prescribed, time-bound verification of the specific certificates produced by the appellant or communicating grounds of doubt.

Documentary Certificates of Origin could not be displaced by assumptions drawn from verification of other certificates, the supplier's website, or contradictory testimonial material. The retracted statement was also not independently corroborated through the available communications or subjected to the requisite examination and cross-examination process before being relied upon.

We also find that the proposition made by the AR that “what is admitted need not be proved", is not an absolute proposition. Laid down in the context of knowledge and admission by a party about contents of a product dealt with and to be classified in C.C.E-Mundra Vs. Systems and Components (P) Ltd [2004 (2) TMI 65 - SUPREME COURT] same was also distinguished by Hon’ble Gujarat High Court in Nissan Thermoware P. Ltd. [2010 (12) TMI 487 - GUJARAT HIGH COURT] as not covering every admission by a director in every circumstances. Also in this case, we have already analysed above in Para 5.3 and Para 5.4, the purported statement and its corroboration as not free from various doubts.

We also find relying on decisions of Vikash Kumar [2026 (2) TMI 344 - CESTAT KOLKATA] which in fact relies on Jeen Bhavani International and Mahesh Chandra Sharma Karta [2022 (8) TMI 237 - CESTAT MUMBAI] that when statements in summon proceedings are not provided and are given as part of show cause notice only, then retraction within reasonable time of communication can be held valid.[Paras 5]

The denial of the notification benefit, consequential duty demand, confiscation, redemption fine and penalties could not be sustained; the appeal was allowed with consequential relief.

Final Conclusion: The appeal was allowed with consequential relief, as the department failed to obtain statutory verification of the specific Certificates of Origin and did not establish its allegations through reliable corroborative evidence.

Penalty for improper storage of imported goods u/s 112(b) - breach of customs storage intimation requirement - Penalty for storing Release Paper at premises other than the designated place without informing Customs authorities, in the absence of established knowledge that the goods were offending goods

HELD THAT: - The uncorroborated statement of the Customs House Agent did not establish the appellant's knowledge of the offending nature of the goods; nor was the appellant's statement inculpatory or the statement of the person said to have requested storage on record. The ingredients for penalty under Section 112(b) were therefore not established.

The failure to intimate Customs authorities of storage at a place other than the designated place constituted a breach appropriately punishable under Section 117; the appellant did not object to imposition of a fair penalty under that provision. Quoting wrong provision cannot come to the rescue of violato [Paras 2, 3, 4]

The penalty under Section 112(b) was set aside and penalty under Section 117 was imposed for failure to intimate the Customs authorities.

Final Conclusion: The appeal was allowed by setting aside the penalty under Section 112(b) and imposing penalty under Section 117 for the failure to intimate Customs authorities regarding storage of the goods.

Customs valuation - rejection of declared transaction value - Under-valuation - burden of proof and contemporaneous imports - Unauthenticated export documents-evidentiary value

Customs valuation - rejection of declared transaction value - Under-valuation - burden of proof and contemporaneous imports - Unauthenticated export documents-evidentiary value - Enhancement of the assessable value of imported cigarettes by rejecting the declared transaction value on the basis of certificates of origin and purported export shipping bills - HELD THAT: - The declared value was supported by the contract with the overseas seller, and there was no allegation or evidence of payment over and above the declared price. The certificates of origin were neither relied upon for a preferential claim nor officially obtained from the issuing authority, while the purported export shipping bills had been procured from a third party without establishing their authenticity or circumstances of issuance. A statement acknowledging the existence of such documents could not, without corroborative admissible evidence, establish their correctness. Department also failed to produce evidence of contemporaneous imports of identical or similar goods at a higher price. The declared transaction value could not therefore be discarded merely on the basis of unverified export documents.

As decided in the case of Truwoods Pvt Ltd.[2016 (2) TMI 819 - SUPREME COURT] the Hon’ble Supreme Court in circumstances where the department had produced certain documents purported to have been issued by Customs Authority in support of their case, upheld the order of the Tribunal which had, interalia, held that the documents procured did not bear any signature and were photocopies which were not even attested, and accordingly the assessable value could not be enhanced on the basis of such documents. [Paras 5]

The finding of under-valuation and consequential enhancement of value against the importing appellant were set aside, and its appeal was allowed with consequential relief.

Abatement of appeal on death of appellant - Continuation of the appeal against the penalty imposed on the individual appellant after his death - HELD THAT: - On production of the death certificate, the Tribunal held that no further proceedings against the deceased individual appellant were warranted. [Paras 2]

The individual appellant's appeal was disposed of as abated.

Final Conclusion: The importing appellant succeeded because the Department failed to establish under-valuation by cogent evidence or contemporaneous higher import values, and the enhanced assessment was set aside. The appeal concerning the deceased individual appellant was disposed of as abated.

Bar on advance ruling on an issue already decided by High Court - Classification of roasted walnuts as other roasted nuts and seeds - Preferential customs duty exemption subject to proof of origin

Bar on advance ruling on an issue already decided by High Court - Classification of roasted areca nuts - Maintainability of the application for an advance ruling on classification of roasted areca nuts. - HELD THAT: - The classification of roasted areca nuts had already been upheld by the High Court in rulings of this Authority [2023 (8) TMI 492 - MADRAS HIGH COURT]. As the applicant placed no new facts requiring determination, the bar under the proviso to section 28-I(2) applied. [Paras 6, 15]

The application for an advance ruling on classification of roasted areca nuts was disallowed without a fresh ruling on merits.

Classification of roasted walnuts as other roasted nuts and seeds - Classification of roasted walnuts produced through the stated roasting process - HELD THAT: - Roasting is distinct from drying: it involves severe heat treatment producing material changes in moisture, colour, appearance and flavour. Since roasting is not among the processes contemplated under Chapter 8, roasted walnuts, being otherwise prepared edible plant products, fall within Heading 2008; the specific tariff item for other roasted nuts and seeds governs their classification. [Paras 7, 11, 12, 14]

Roasted walnuts were classified under CTI 2008 19 91 as other roasted nuts and seeds.

Preferential customs duty exemption subject to proof of origin - Eligibility of the imported roasted nuts for the concessional customs duty benefit under the notified preferential tariff arrangement - HELD THAT: - The preferential basic customs duty benefit is conditional upon the importer establishing, to the satisfaction of the competent customs officer, that the goods originate in the specified country in accordance with the applicable rules of origin and the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020. [Paras 13, 16]

The concessional duty benefit is available only on fulfilment of the prescribed origin requirements.

Final Conclusion: The application for a ruling on roasted areca nuts was disallowed as the issue stood decided by the High Court. Roasted walnuts were classified under CTI 2008 19 91, with preferential duty benefit remaining conditional upon proof of origin.

Veterinary active pharmaceutical ingredients as drugs - Specific description-based IGST entry prevailing over general chemical entry -

Whether veterinary-grade active pharmaceutical ingredients, Clopidol (VET) and Amprolium 100% (VET), qualify as drugs and medicines eligible for 5% IGST under Serial No. 226 of Schedule I to Notification No. 09/2025-Integrated Tax (Rate) dated 17.09.2025? - HELD THAT: - The Authority held that the inclusive statutory definition of "drug" encompasses substances used as components of drugs, and that bulk drugs/APIs used as such or in formulations consequently retain the character of drugs. The subject goods had established veterinary therapeutic use, regulatory recognition and import licensing as drugs, and were not covered by the nil-rate list. The rate entry is description-based and extends to drugs and medicines falling under any Chapter; therefore, the specific entry for drugs and medicines prevails over the general Chapter 29 entry for organic chemicals. As the IGST notification is a rate notification and not an exemption notification, any ambiguity was required to be resolved in favour of the applicant. [Paras 13, 14, 15, 16]

Clopidol (VET) and Amprolium 100% (VET) qualify as drugs and medicines under Serial No. 226 of Schedule I and are chargeable to IGST at 5%, provided they are not specified under the nil-rate entry.

Final Conclusion: The advance ruling held that the veterinary APIs, being drugs and medicines with established therapeutic and regulatory character, fall under the specific 5% IGST rate entry rather than the general entry for organic chemicals, subject to their not being covered by the nil-rate list.

Advance ruling barred by prior judicial determination - Classification of roasted walnuts as other roasted nuts and seeds - Concessional customs duty subject to proof of origin

Advance ruling barred by prior judicial determination - Classification of roasted areca nuts - Maintainability of the application for an advance ruling on classification of roasted areca nuts where the identical classification issue had already been decided by the High Court - HELD THAT: - The classification question concerning roasted areca nuts was held to be identical to that previously adjudicated, and the applicant disclosed no material distinguishing feature or new factual circumstance. The bar under Section 28-I(2)(b) was therefore held applicable. [Paras 6, 8]

The application for advance ruling on classification of roasted areca nuts was disallowed without a fresh determination on merits.

Classification of roasted walnuts as other roasted nuts and seeds - Classification of oven-roasted walnuts under the Customs Tariff - HELD THAT: - Roasting at high temperature changes the flavour, colour and texture of walnuts and makes them fit for immediate consumption; it is not a treatment confined to preservation of fresh or dried nuts under Chapter 8. As Heading 2008 specifically covers dry-roasted or fat-roasted nuts, roasted walnuts fall within Chapter 20. [Paras 7, 10]

Roasted walnuts were ruled classifiable under Customs Tariff Item 2008 19 91.

Concessional customs duty subject to proof of origin - Strict interpretation of exemption notifications - Eligibility of roasted nuts for concessional duty under the applicable exemption notification - HELD THAT: - Eligibility for the exemption must be established strictly under the notification, applicable tariff entry and prescribed conditions. The claimant bears the burden of proving eligibility, and the applicable conditions are those prevailing on the date of import. [Paras 9, 11]

The concessional benefit is available only upon proof, to the satisfaction of the competent customs officer, that the goods satisfy the applicable origin requirements and rules of origin.

Final Conclusion: The application concerning roasted areca nuts was disallowed as the issue stood previously decided. Roasted walnuts were classified under Customs Tariff Item 2008 19 91, subject to fulfilment of origin conditions for any claimed concessional duty benefit.

Condonation of delay in company appeal - delay of 42 days - Rejection of the application for condonation of delay in filing an appeal under the Companies Act, 1956 - HELD THAT: - Upon considering the submissions and the material on record, the Court held that the delay ought to have been condoned and the appeal heard on merits. [Paras 4]

The order rejecting condonation was set aside, the delay was condoned, and the company appeal was restored to the High Court for decision in accordance with law.

Final Conclusion: The appeal was allowed; the delay in filing the company appeal was condoned and the appeal was restored to the High Court for adjudication on merits.

Retroactive operation of statutory amendments - Interim moratorium for personal guarantors to corporate debtors - Applicability of the exclusion of interim moratorium under Section 96(4) of the Insolvency and Bankruptcy Code to a pending insolvency application concerning a personal guarantor to a corporate debtor

HELD THAT: - An amendment intended to remedy misuse of an existing statutory protection may operate retroactively upon pending transactions without operating retrospectively upon completed transactions. The insertion of Section 96(4) was directed at removing the pre-admission interim-moratorium protection which enabled personal guarantors to corporate debtors to obstruct or delay recovery proceedings. The expression "is filed" encompasses applications filed before the amendment but remaining pending when it came into force. Consequently, the amendment applied to the pending creditor's application and the interim moratorium previously available to the personal guarantor stood vacated. [Paras 19, 20, 22, 24, 25]

The suit was not barred by the interim moratorium, and the application for rejection of the plaint on that ground was rejected.

Final Conclusion: Section 96(4) was held retroactive in its application to pending insolvency applications relating to personal guarantors to corporate debtors. The interim moratorium did not bar the suit, and the application for rejection of the plaint was dismissed.

Admission of corporate insolvency resolution process on established financial debt and default - Maintainability of Section 7 application -Continuing default beyond the statutory suspension period

Financial debt and default under a settlement arrangement - Scope of inquiry at admission of insolvency application - Admission of the corporate debtor to the corporate insolvency resolution process where the assigned loan debt and continuing default under the subsequent one-time settlement were established - HELD THAT: - The corporate debtor had repeatedly failed to fulfil repayment commitments, including the one-time settlement accepted after assignment of the debt. In an application by a financial creditor, the Adjudicating Authority is not required to determine the exact amount payable; it is sufficient that debt and default are established and the default exceeds the applicable threshold. The challenge concerned principally the quantum of interest, while the existence of debt and default was not disputed. The exception in Vidarbha Industries Power Ltd. v. Axis Bank Ltd. [2022 (7) TMI 581 - SUPREME COURT] was neither pleaded nor attracted. [Paras 6]

The admission of the corporate debtor to the corporate insolvency resolution process was justified.

Statutory bar under section 10A of the Insolvency and Bankruptcy Code - Continuing default - Availability of immunity under section 10A where repayment default continued beyond the statutory suspension period - HELD THAT: - The one-time settlement had been revoked before the Covid exclusion period, and the corporate debtor was called upon to pay the outstanding amount. The default continued thereafter, further extensions were sought, and the date of default stated in the section 7 application fell beyond the exclusion period. Section 10A therefore did not protect the corporate debtor from initiation of insolvency proceedings. [Paras 6]

The plea of exclusion under section 10A was rejected.

Final Conclusion: The appeal was dismissed, and the admission of the corporate debtor to the corporate insolvency resolution process was affirmed. All interim orders were vacated.

Possession of disproportionate assets as scheduled offence - Money-laundering u/s 3 of PMLA - Provisional attachment limited to value of disproportionate assets

Predicate offence under Section 13(1)(e) of the Prevention of Corruption Act - Scheduled offence attracting Section 3 PMLA - Possession of assets disproportionate to known sources of income under Section 13(1)(e) of the Prevention of Corruption Act constitutes a scheduled/predicate offence attracting money-laundering under Section 3 of the Prevention of Money Laundering Act, without any independent allegation of acceptance of bribe or undue benefit - HELD THAT: - The Tribunal held that Section 13(1)(e) of the PC Act is a scheduled offence distinct from offences under Sections 7, 8 and other provisions of the PC Act which require proof of bribe. Possession of assets disproportionate to known sources of income, by itself, involves concealment, possession, acquisition and projection of tainted property as untainted, thereby satisfying the ingredients of money-laundering under Section 3 of the Act of 2002. An allegation of bribe is not a pre-requisite for such an offence. The dismissal of the discharge application filed by the appellant before the competent Court was also held to indicate, prima facie, a case against him for the predicate offence, without recording any definite finding that could prejudice the pending trial. [Paras 17, 18, 19, 20]

The contention that no predicate offence was made out in the absence of an allegation of bribe was rejected, and the finding of money-laundering was upheld

Provisional attachment under Section 5(1) of PMLA - Reasons to believe for attachment - Attachment confined to disproportionate value - HELD THAT: - The Tribunal found that the provisional attachment had been caused only to the extent of the value of disproportionate assets computed after taking into account the appellant's legitimate income and expenses, and not in respect of properties proportionate to his known income. The requirement of reasons to believe under Section 5(1) of the Act stood satisfied on the finding of a predicate offence coupled with apprehension of alienation of the properties; the appellant failed to produce any order demonstrating prior attachment of the same properties by the CBI. The allegation regarding cash deposit could not be examined in the absence of the bank statement, which the appellant admittedly failed to produce. The challenge to attachment of the spouse's property was found without substance in view of the disproportionate assets found jointly in the hands of the appellant and his wife and the dismissal of the discharge application. [Paras 21, 22, 23, 24]

None of the grounds urged against the confirmation of the Provisional Attachment Order were found sustainable, and the attachment as confirmed by the Adjudicating Authority was upheld

Final Conclusion: Finding the predicate offence under Section 13(1)(e) of the Prevention of Corruption Act to be made out and the provisional attachment validly confined to the value of disproportionate assets, the Tribunal found no ground for interference and dismissed the appeal, thereby upholding the confirmation of the Provisional Attachment Order.

Collective investment scheme and service tax liability - Service tax liability of persons availing PCL membership where the underlying scheme was held by SEBI to be a collective investment scheme

Whether the appellants were liable to pay Service Tax on the services availed by them as member-ship of PCL or not? - HELD THAT: - The Tribunal accepted the consequence of SEBI's finding that PCL's scheme was a collective investment scheme for which registration had not been obtained. On that basis, the amounts involved were treated as investment under the scheme, and the appellants were held not liable to service tax on services availed from PCL. [Paras 8]

The service tax demands and penalties were set aside, and the appellants were held entitled to refund of amounts already paid, in accordance with law.

Final Conclusion: The appeals were allowed with consequential relief. The demands of service tax and penalties were set aside.

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 -manual processing of declaration - Issuance of discharge certificate upon payment of determined tax

Manual processing of an SVLDRS declaration for issuance of a discharge certificate where payment of the tax determined in Form SVLDRS-3 stood remitted - HELD THAT: - As the remittance of the differential tax was evidenced by the declaration forms and bank statement and was not disputed by the Revenue, the matter was procedural.

Following Aurofood Pvt. Ltd. Vs CGST [2024 (5) TMI 66 - CESTAT CHENNAI] which directed manual processing under the Scheme, the request was required to be examined and processed manually. [Paras 4, 6]

The Commissioner was directed to examine the matter manually and process the request for issuance of the discharge certificate within four weeks from receipt of the order.

Final Conclusion: The appeal was disposed of with a direction for manual examination and processing of the SVLDRS request for issuance of the discharge certificate within four weeks.

CENVAT credit on telecast fees - Input service nexus with sale of advertising time - Consistency in assessee's own case

Eligibility to CENVAT credit of service tax paid on telecast fees incurred for obtaining Free Commercial Time used for the taxable service of sale of space or time for advertisement - HELD THAT: - Telecast fees enabled the appellant to obtain Free Commercial Time from television channels, which was used to provide the taxable output service of sale of space or time for advertisement. Coordinate Benches had consistently held, in the appellant's own case on identical facts, that such fees constituted eligible input services. See M/S. RADAAN MEDIA WORKS (I) LTD. [2018 (6) TMI 201 - CESTAT CHENNAI] and [2024 (2) TMI 88 - CESTAT CHENNAI]

As no contrary decision of the Supreme Court, a High Court or a Larger Bench was shown, the settled position was followed; the subsequent demands founded on the same allegations had no independent basis. [Paras 8, 9, 10]

The denial of CENVAT credit under the three Statements of Demand was held unsustainable.

Sustainability of interest demands and penalties consequential to the denial of CENVAT credit on telecast fees - HELD THAT: - The interest demands and penalties rested entirely on the disallowance of CENVAT credit. With the credit denial held unsustainable, those consequential liabilities could not survive. [Paras 11]

The demands of interest and the penalties imposed were set aside.

Final Conclusion: The impugned order was set aside and all three appeals were allowed with consequential relief in accordance with law.

Works contract composition scheme - applicability of revised service tax rate - Point of taxation on change in effective rate of service tax

Rate applicable to an ongoing works contract where the provider had opted for the Works Contract Composition Scheme before revision of the composition rate - HELD THAT: - The option under the Composition Scheme is irrevocable for the duration of the works contract only in respect of the method of discharging tax liability; Rule 3 does not preserve the rate prevailing when that option was exercised. Before the Point of Taxation Rules, 2011, the rate was governed by the rendition of the taxable service.

After those Rules came into force, the point of taxation is determined under Rules 3 and 4, and the rate prevailing at that point applies notwithstanding the continuing composition option. The contrary view in the Calcutta High Court decision [2016 (7) TMI 1271 - CALCUTTA HIGH COURT] had been rendered without the Point of Taxation Rules being brought to its notice. [Paras 5, 6]

The revised composition rate applies according to the point of taxation; the rate prevailing on the date of exercising the composition option does not continue unchanged until completion of the contract. The appeals were directed to be placed before the Division Bench.

Final Conclusion: The reference was answered by holding that continuance under the Works Contract Composition Scheme does not freeze the composition rate at the rate existing when the option was exercised. Liability is payable at the rate determined by the applicable point of taxation.

Service tax on royalty paid for mining rights - Taxability determined by date of grant of mining lease - Grant of mining rights prior to taxable event - liability to pay service tax on royalty paid to the State Government during the period April 2016 to June 2017, where the mining lease itself had been granted by the State Government prior to 01.04.2016, the date from which government services became exigible to service tax

HELD THAT: - The Tribunal noted that the sole question was whether service tax is payable on royalty paid to the State Government for the period after 01.04.2016, where the underlying mining lease was awarded before that date.

Following its own coordinate Bench decisions [2023 (5) TMI 766 - CESTAT NEW DELHI] answering this question in favour of the assessee, and noting that the Supreme Court in S.R. Traders [2023 (9) TMI 81 - SC ORDER] had declined to interfere with one such decision on appeal by the Revenue, the Tribunal held that the taxability of royalty payments is governed by the date on which the mining rights were granted and not by the date of actual payment of royalty. Since the lease in the present case was granted before 01.04.2016, the subsequent royalty payments made during the disputed period could not be subjected to service tax. [Paras 4, 6]

The appellant was held not liable to pay service tax on the royalty paid to the State Government for the period in dispute, since the mining lease had been granted before 01.04.2016, and the appeal was allowed with consequential relief

Final Conclusion: The appeal was allowed with consequential relief, the Tribunal holding that no service tax was payable on royalty paid for a mining lease granted prior to 01.04.2016, in line with its earlier decisions on the point as affirmed by the Supreme Court.

Rent-a-cab scheme operator service - Contract of hire distinguished from renting of cab - possession and control of vehicle - payment on kilometre basis

Whether buses operated by their owners for PRTC under a per-kilometre arrangement, with drivers and cleaners and without transfer of possession or control, constituted taxable rent-a-cab service? - HELD THAT: - The buses were operated by the appellants' own drivers and staff on routes covered by PRTC's stage carriage permits, with remuneration paid on the basis of kilometres run rather than on a rental basis, and possession and control of the vehicles remained with the appellants throughout.

Following the co-ordinate Bench decision M/s Gurjant Singh Beant Singh [2023 (9) TMI 1254 - CESTAT CHANDIGARH] holding that there is no renting where the arrangement is one of hire and remuneration is per kilometre, and the ratio that a contract of hire, absent renting of the cab, does not attract classification as rent-a-cab service, the Tribunal held that the essential ingredient of 'renting' was absent and the arrangement amounted to a contract of hire, not a rent-a-cab service. [Paras 6, 7]

The demand of service tax and penalties raised on the premise of 'rent-a-cab scheme operator' service was held unsustainable, and the impugned order was set aside with consequential relief

Final Conclusion: The Tribunal held that the appellants' arrangement with PRTC constituted a contract of hire and not renting of cabs, and was therefore not exigible to service tax under 'rent-a-cab scheme operator' service. Both appeals were allowed and the impugned order set aside with consequential relief.

Small Service Provider threshold exemption - Notification No. 6/2005-ST - entitlement of the Municipal Council to the small service provider threshold exemption under Notification No. 6/2005-ST in respect of service tax demanded on advertisement tax collections and renting of immovable property - HELD THAT: - The Tribunal examined the statutory data on record and found that the Appellant's gross taxable turnover, comprising receipts from advertisement tax and renting of immovable property, remained below the prescribed threshold limits of Rs. 4 Lakhs Rs. 8 Lakhs and Rs. 10 Lakhs for the respective financial years under Notification No. 6/2005-ST.

Since the taxable value in each disputed year fell within the exemption limits, the Appellant was held entitled to the benefit of the small service provider exemption, taking the entire taxable value outside the ambit of service tax.

Having allowed the appeals on this threshold ground, the Tribunal did not consider it necessary to adjudicate the alternative contentions regarding taxability of renting of municipal property or the statutory levy of advertisement tax. [Paras 6]

The Appellant was held entitled to the small service provider threshold exemption for the entire disputed period, rendering the service tax demand unsustainable, and consequently no interest or penalty was leviable.

Final Conclusion: Holding that the Appellant Municipal Council's gross taxable turnover fell within the prescribed threshold limits under Notification No. 6/2005-ST for the entire disputed period, the Tribunal allowed both appeals, set aside the impugned orders, and quashed the tax demands along with interest and penalties, without adjudicating the alternative issues raised.

Classification of the product steel tubular transmission poles (Hamilton poles or tubes) - classifiable under heading 7308.90 (structures / parts of structures, eligible for exemption) OR under heading 7306.90 (tubes and pipes)

HELD THAT:- A perusal of the show cause notice would clearly indicate that it is issued subsequent to the circular dated 06.09.2000, and even in the said circular, what has been stated is reiteration of the law laid down by this Court, namely, the goods in question is classifiable under the sub-heading 7306.90 and not under 7308.90. As such, the question of the levy being retrospectively being applied does not arise.

This Court in judgment India Metals and Ferro Alloys Ltd. [1990 (11) TMI 143 - SUPREME COURT] has clearly held that the goods in question is classifiable under the sub-heading 7306.90, which judgment came to be rendered on 22.11.1990 and as such, the show cause notice issued on 25.07.2001 relating to levy for the period of July and August, 2000 cannot be construed or held as being retrospectively. In that view of the matter also, we are of the considered view that there is no merit in this appeal. Accordingly, it stands dismissed.

Final Conclusion: The appeal was dismissed, the Court holding that the steel tubular transmission poles were classifiable under heading 7306.90 as tubes and pipes, following settled precedent, and that the levy for July and August 2000 did not amount to retrospective application of law since the circular merely reiterated an existing judicial classification predating the disputed period.

Refund of excess excise duty on pre-agreed turnover and cash discounts - Unjust enrichment

Refund of excess excise duty arising from turnover and cash discounts, known before clearance but quantified subsequently through cum-duty credit notes, where the refund was denied on unjust enrichment - HELD THAT: - The Tribunal followed its earlier decision in the appellant's own case [2025 (12) TMI 1002 - CESTAT KOLKATA], which recognised that the promotional discount schemes were known before clearance and that excess duty had arisen because provisional assessment was not granted. The credit notes issued to dealers established return of the excess duty component, while the Chartered Accountant's and dealers' certificates established that the incidence of duty had not been passed on to the buyers and was borne by the appellant. [Paras 8, 9, 10]

The bar of unjust enrichment was held inapplicable and the appellant was held entitled to the claimed refund.

Final Conclusion: The impugned orders were set aside and the appeals were allowed with consequential relief in accordance with law.

CENVAT credit on duty-paid inputs from area-based exemption units - Harmonious construction of CENVAT Credit Rules

Admissibility of CENVAT credit on inputs procured before the amendment to Rule 12 from units availing area-based exemption - HELD THAT: - The CENVAT credit scheme was required to be read harmoniously and not by isolating a particular rule. Where the inputs had suffered duty, were used in manufacture, and were received under prescribed invoices, credit could not be denied. The subsequent express provision allowing such credit did not imply that credit was prohibited earlier, in the absence of an express bar under the CENVAT Credit Rules. See M/S RECKITT BENCKISER INDIA LTD [2026 (8) TMI 153 - CESTAT CHANDIGARH] [Paras 5]

CENVAT credit was admissible and the appeal was allowed.

Final Conclusion: The disallowance of CENVAT credit on duty-paid inputs procured from area-based exemption units was unsustainable. The appeal was allowed.

CENVAT credit on fish oil procured by downstream manufacturer - Restriction under concessional-duty exemption notification

Eligibility of the buyer of fish oil for CENVAT credit where the supplier cleared fish oil at the concessional rate under Notification No. 01/2011-CE - HELD THAT: - The condition attached to the concessional-duty notification, disentitling credit of duty on inputs and tax on input services, was imposed upon the manufacturer claiming the concessional rate. It could not be extended to a subsequent buyer who had paid excise duty on procurement of fish oil and used it as raw material for manufacture of final products. [Paras 9]

The appellant was entitled to the CENVAT credit claimed; the remand order was set aside and the appeal was allowed with consequential relief.

Final Conclusion: The restriction on input credit prescribed for a manufacturer availing concessional duty under the notification did not disqualify the downstream buyer from taking CENVAT credit of duty paid on fish oil.

Additional court fee towards Legal Benefit Fund on fresh appellate proceedings - Liability to pay additional court fee towards the Legal Benefit Fund on appeals filed against a fresh assessment made after remand - HELD THAT: - Applying Hamaza Haji v. Thykkandiyil Ibrahim, the Court held that the subsequent appeals, though arising after remand of the original assessment, were founded on a fresh cause of action and constituted a fresh round of litigation. The earlier payment of additional court fee did not dispense with the statutory requirement for the fresh appeals; the failure to seek refund of the fee paid in the initial appeals could not alter that position. [Paras 9, 10, 11, 12, 13]

The appellate proceedings against the fresh assessment attracted additional court fee towards the Legal Benefit Fund; the Tribunal's contrary orders were set aside, subject to liberty to seek refund of the fee paid in the initial appeals in accordance with law.

Final Conclusion: The revisions were allowed and the Tribunal's orders were set aside. The respondent was permitted to remit the requisite additional court fee for the pending appeals, which were directed to be considered on merits thereafter.

Suppression of purchases and sales - Revised return after inspection - Equal addition for probable suppression - Penalty for wilful suppression

Assessment of suppressed purchases and consequential suppressed sales of gold and silver jewellery despite disclosure through a revised return filed after Income Tax inspection - HELD THAT: - A revised return filed after inspection does not, by itself, establish that the earlier non-disclosure was bona fide. The trader must show that failure to maintain true and complete purchase and sales accounts was neither wilful nor intentional. Here, the suppression was founded on material gathered during inspection, and the excess stock remained unreconciled even after the revised return. The Tribunal had independently reconsidered the facts and reduced the equal addition to 10 per cent; the subsequent payment of tax could at most constitute a mitigating circumstance for reducing, rather than eliminating, an addition. [Paras 17, 18, 19, 20]

The assessment of suppressed purchases and resultant sales, and the reduced equal addition fixed by the Tribunal, were sustained.

Penalty for wilful suppression - Penalty for suppression of turnover under the best judgment assessment - HELD THAT: - The trader failed to justify the suppression disclosed by the inspection material. The statutory explanation prescribed penalty with reference to the quantum of suppressed turnover, and no breach of the Act was established in the imposition of penalty on the best judgment assessment. [Paras 19, 20]

The penalty for suppressed turnover was upheld.

Final Conclusion: The revision was dismissed. The assessment of suppressed turnover, the reduced equal addition, and the penalty were sustained.