TaxTMI Updates e-Newsletter
Sep 01,2023

Detention and release of goods under Section 129 (non-obstante clause) - confiscation proceedings under Section 130 of the Central Goods and Services Tax Act - interim release on deposit and bank guarantee - prohibition on coercive steps pending adjudication

Detention and release of goods under Section 129 (non-obstante clause) - interim release on deposit and bank guarantee - Release of detained goods and vehicle on specified conditions pending challenge under Section 130 - HELD THAT: - The Court granted interim relief for immediate release of the goods and vehicle subject to compliance with specified conditions: deposit of the demanded penalty amount with the competent authority, furnishing of a bank guarantee towards fine in lieu of confiscation, and filing of an undertaking on oath to pay the fine in the event the Section 130 proceedings conclude against the petitioner. The order conditions the continuation of interim relief on strict compliance and provides that non compliance will result in vacation of the relief. The Court expressly refrained from deciding the merits of the underlying confiscation proceedings while permitting conditional release. [Paras 6]

Goods and vehicle released on deposit, bank guarantee and undertaking; interim relief liable to be vacated on non compliance

Confiscation proceedings under Section 130 of the Central Goods and Services Tax Act - prohibition on coercive steps pending adjudication - Continuation of Section 130 proceedings permitted but coercive measures restrained pending final order - HELD THAT: - The Court allowed the authorities to continue the adjudication under Section 130 but directed that no coercive steps shall be taken against the petitioner pursuant to any final order in those proceedings until further orders of the Court. The Court clarified that it has not examined or decided the merits of the petitioner's case in respect of the adjudication under Section 130. [Paras 7]

Proceedings under Section 130 may continue; no coercive action against the petitioner till further orders

Detention and release of goods under Section 129 (non-obstante clause) - confiscation proceedings under Section 130 of the Central Goods and Services Tax Act - Merits of legality of detention/confiscation left for adjudication by the statutory authority - HELD THAT: - The Court did not adjudicate the question whether the authorities validly exercised powers under Section 129 and thereafter proceeded under Section 130; instead, the substantive controversy regarding legality and merits of detention/confiscation was not decided and remains for determination in the pending Section 130 proceedings. The interim directions are procedural and protective in nature, without expressing any view on merits. [Paras 7]

Merits of detention and confiscation not decided and to be considered in the Section 130 proceedings

Final Conclusion: Interim relief granted: goods and vehicle to be released on deposit of the specified penalty, furnishing of bank guarantee and an undertaking; Section 130 proceedings may continue but no coercive steps to be taken against the petitioner until further orders; merits of detention/confiscation remain undecided and are to be determined in the statutory proceedings.

Disposal of appeal on merits - Duty to pass a speaking order stating points for determination, the decision thereon and reasons - Adjournment powers and refusal of adjournment - Prohibition on mechanical dismissal for non appearance/non prosecution - Extraordinary writ jurisdiction where no efficacious alternative remedy - Restoration of appeal and direction for fresh hearing and disposal within a fixed time

Disposal of appeal on merits - Duty to pass a speaking order stating points for determination, the decision thereon and reasons - Prohibition on mechanical dismissal for non appearance/non prosecution - Appellate Authority cannot dismiss an appeal solely for non appearance or non prosecution when the statute requires disposal on merits and a reasoned written order. - HELD THAT: - The statutory scheme of Section 107(8)-(12) of the BGST Act requires the Appellate Authority to afford an opportunity of hearing, make such further inquiry as may be necessary and pass an order confirming, modifying or annulling the order appealed against; sub section (12) mandates that the order state the points for determination, the decision thereon and the reasons. The Court followed the principle in S. Chenniappa Mudaliar and related authorities that a tribunal/authority must decide appeals on merits and not mechanically dismiss them for absence of the appellant. An appellate order which merely records the departmental representative's submissions and dismisses the appeal for non appearance without conducting the mandated enquiry or giving reasons on the merits amounts to abdication of statutory duty. The impugned order lacked due compliance with Section 107 and did not constitute a speaking disposal on the merits. [Paras 6, 7, 8]

Impugned appellate order set aside to the extent it dismisses appeal for non appearance; Appellate Authority cannot mechanically dismiss without considering grounds on merits and giving a reasoned written order.

Extraordinary writ jurisdiction where no efficacious alternative remedy - Restoration of appeal and direction for fresh hearing and disposal within a fixed time - Extraordinary writ relief was appropriate because no efficacious appellate remedy was available at present; the appeal was restored and directions were given for fresh hearing and disposal on merits. - HELD THAT: - The Court observed that where an Appellate Authority fails to follow the statutory mandate to decide on merits, invocation of Article 226 is permissible particularly when no efficacious alternative remedy exists. As the GST Tribunal was not constituted, leaving the assessee to a future remedy would cause prejudice. Accordingly, the appellate order was set aside; the appeal was ordered restored, the appellant directed to appear on the fixed date, the Appellate Authority directed to fix and acknowledge the hearing date and to dispose of the appeal on merits within two months of the last hearing. The appellant was also directed to cooperate and the Authority was required to pass a speaking order even if the appellant remains absent. [Paras 9, 10]

Writ petition allowed; impugned order set aside, appeal restored and remitted for fresh hearing and speaking disposal within the time directed, with specified procedural directions.

Final Conclusion: The High Court allowed the writ petition, set aside the appellate order that dismissed the appeal for non prosecution, restored the appeal to the file and directed the Appellate Authority to hear and decide the appeal on merits by a reasoned order within the time prescribed, with ancillary procedural directions.

Principles of natural justice - validity of order passed without opportunity to be heard - show cause notice - remand for fresh consideration - treatment of amount paid pending challenge

Principles of natural justice - validity of order passed without opportunity to be heard - show cause notice - Impugned order passed on the same date as issuance of show cause notice without affording the petitioner an opportunity to be heard violated the principles of natural justice. - HELD THAT: - The show cause notice was issued on 18.11.2022 directing the petitioner to appear before the authority on 19.11.2022, but the respondent passed the impugned order dated 18.11.2022 itself without affording any opportunity of hearing. The Court found that passing an adjudicatory order in those circumstances was a clear breach of the audi alteram partem principle and could not be sustained. Consequently the impugned order was set aside and the matter remanded for fresh consideration with an opportunity to the petitioner. [Paras 4, 5]

Impugned order dated 18.11.2022 set aside; matter remanded for fresh consideration after affording opportunity to the petitioner.

Remand for fresh consideration - treatment of amount paid pending challenge - Whether the amount paid by the petitioner must be refunded and the course to be followed on remand. - HELD THAT: - The respondent contended that the petitioner had paid the entire penalty immediately after issuance of the show cause notice and that the petition had become infructuous. The Court, while setting aside the impugned order and remanding the matter for fresh consideration, directed that the respondent need not refund the amount already paid by the petitioner. The respondent is required to consider the matter afresh, after providing opportunity to the petitioner, and to pass appropriate orders within six weeks from receipt of the judgment. [Paras 3, 5]

No refund of the amount paid need be made; respondent to consider the matter afresh after hearing the petitioner and pass appropriate orders within six weeks.

Final Conclusion: Writ petition allowed; impugned order dated 18.11.2022 set aside and matter remanded for fresh consideration after affording the petitioner an opportunity to be heard; respondent need not refund the amount paid and shall pass appropriate orders within six weeks.

Opportunity of hearing - principles of natural justice - advance ruling - rejection without admission - forum for challenging advance ruling - Article 226 jurisdiction - quashing of order - reconsideration - liberty to file additional plea

Opportunity of hearing - principles of natural justice - rejection without admission - Whether the Advance Ruling Authority denied a meaningful opportunity of hearing under Section 98(2) by not informing the petitioner that the application could be rejected on the ground that the corresponding contractual period had expired. - HELD THAT: - The Court found that the petitioner was not put on notice that the application might be rejected without admission on the specific ground now assigned by the Authority. The absence of such prior notice reduced the personal hearing to a mere formality and deprived the petitioner of an effective opportunity to show cause against the stated reason, thereby engaging the principles of natural justice. For these reasons the Court held that the statutory opportunity of hearing contemplated under Section 98(2) could not be treated as empty formality and required that the petitioner be given a real chance to meet the objection. [Paras 5]

Findings on denial of a meaningful hearing upheld; impugned order rejecting the application without admission quashed and the matter remanded for reconsideration with opportunity to the petitioner to file additional pleas.

Forum for challenging advance ruling - Article 226 jurisdiction - Whether challenges to orders of the Advance Ruling Authority under Section 98(2) or Section 98(4) must invariably be placed before a Division Bench of the High Court. - HELD THAT: - Having noted a coordinate Bench's view that appeals from the Appellate Authority under Section 100 may ordinarily be expeditiously heard by a Division Bench, the Court distinguished the present petition which impugns the Advance Ruling Authority's order under Section 98(2) on grounds of denial of statutory opportunity. The Court held that interference limited to vindicating natural justice in the Authority's procedure did not require that every such petition be placed before a Division Bench; a Single Judge could adjudicate such a challenge where the matter relates to denial of opportunity and principles of natural justice. [Paras 8]

A Single Judge may entertain and decide a petition under Article 226 impugning an Advance Ruling Authority order under Section 98 where the challenge concerns denial of opportunity/natural justice; it is not mandatory that every challenge be placed before a Division Bench.

Quashing of order - reconsideration - liberty to file additional plea - What relief should be granted where the Authority has rejected an advance ruling application without affording a meaningful opportunity to meet the specific ground relied upon? - HELD THAT: - The Court directed that the impugned order dated 29.11.2022 rejecting the petitioner's application without admission be quashed and the application restored for fresh consideration. The petitioner, now aware of the Authority's reasoning, must be given notice of further hearing and liberty to file additional plea to show cause against the ground relied upon; the petitioner is to file a certified copy of the Court's order with the Authority to enable the same.

Order quashed; application restored for reconsideration with notice and opportunity to the petitioner to file additional pleas; petitioner to place certified copy of this order before the Authority.

Final Conclusion: The petition is allowed in part: the Advance Ruling Authority's order rejecting the application without admission is quashed; the application is restored for reconsideration with notice and an effective opportunity to the petitioner to file additional pleas; a Single Judge may decide such a petition where the challenge is limited to denial of opportunity/natural justice.

Benefit of input tax credit - commensurate reduction in price - Section 171(1) of the CGST Act, 2017 - absence of pre-GST comparator for determination of profiteering - project launched post-GST

Benefit of input tax credit - project launched post-GST - absence of pre-GST comparator for determination of profiteering - No additional benefit of Input Tax Credit (ITC) accrued to the Respondent that was required to be passed on to buyers - HELD THAT: - The Commission accepted the DGAP's findings that the project 'Godrej Elements' was launched and all material events (RERA registration, first bookings, tax invoices, development permission and commencement certificate) occurred after the implementation of GST. There was no sale, allotment, payment or demand in the pre-GST period which could furnish a base price or pre-GST ITC position for comparison with the post-GST period. In the absence of any pre-GST turnover or ITC availability for the project, no additional ITC benefit could be said to have accrued to the Respondent vis-a -vis the pre-GST period and therefore nothing required passing on to buyers. [Paras 6, 7, 8]

No benefit of additional ITC accrued to the Respondent in respect of the project and hence there was nothing to be passed on.

Section 171(1) of the CGST Act, 2017 - commensurate reduction in price - absence of pre-GST comparator for determination of profiteering - Provisions of Section 171(1) of the CGST Act, 2017 are not attracted and no violation is made out - HELD THAT: - Section 171(1) becomes operative when there is a reduction in tax rate or an increase in benefit of ITC as compared to the pre-GST position, requiring a commensurate reduction in price. The Commission found that the project was conceived and executed after GST implementation and there was no pre-GST tax rate or ITC position available for comparison. Consequently, the statutory trigger for Section 171(1) did not exist in the present case and the allegation of profiteering could not be sustained. [Paras 8, 9]

Section 171(1) is not attracted in respect of the Respondent's project and there is no violation.

Final Conclusion: The Commission concluded that the project commenced post-GST with no pre-GST turnover or ITC comparator; therefore no additional ITC benefit accrued and Section 171(1) of the CGST Act, 2017 is not attracted. Proceedings are dropped.

Writ of mandamus against arrest - Anticipatory relief and Article 226 - Power to arrest under CGST - Statutory safeguards in Section 69 CGST

Writ of mandamus against arrest - Anticipatory relief and Article 226 - Whether petitioner is entitled to a writ of mandamus directing the respondent not to arrest him in relation to summons issued under Section 69 of the CGST Act, 2017 - HELD THAT: - The Court considered the scope of Article 226 remedies in the context of summons and potential arrest under the CGST scheme, having regard to the observations of the Supreme Court in The State of Gujarat v. Choodamani Parmeshwaran Iyer & Anr. The ratio in that decision distinguishes between anticipatory bail under Section 438 Cr.P.C. and a writ under Article 226, and cautions that extraordinary pre-arrest relief by writ should be exercised sparingly and not to prevent a public officer from performing statutory functions. Applying that principle, and noting the factual matrix in this case (the petitioner has been cooperating, appeared before the authority, and no file has been moved for arrest), the Court held that exceptional circumstances necessary to issue mandamus to preclude arrest were not made out. The petition was therefore not a fit case for pre-emptive relief under Article 226. [Paras 6, 13, 14]

No writ of mandamus granted; petition dismissed as pre-mature and not demonstrating exceptional circumstances to restrain statutory arrest powers.

Power to arrest under CGST - Statutory safeguards in Section 69 CGST - Whether the safeguards contained in Section 69 of the CGST Act negate the need for interim judicial protection against arrest in the present case - HELD THAT: - The Court examined Section 69 and observed that the provision itself contains procedural safeguards - requiring the Commissioner to have reasons to believe an offence under Section 132 has been committed, informing the arrested person of grounds of arrest and compliance with procedural safeguards as per the Code of Criminal Procedure. Having regard to these statutory protections and the fact that no action had been initiated to effect arrest, the Court found that statutory safeguards and the absence of any immediate apprehension weighed against grant of pre-emptive relief. The Apex Court's decision cited by parties was treated as limiting intervention except in exceptional cases; on the facts here the statutory scheme and conduct of the investigation did not justify restraining the authority. [Paras 11, 12, 13]

Section 69's inherent safeguards militated against the grant of the prayer; no protective order issued.

Final Conclusion: The petition praying for a writ directing non-arrest was dismissed: having regard to the Supreme Court's guidance on pre-arrest relief, the statutory safeguards in Section 69 CGST, the petitioner's cooperation, and absence of any file moved for arrest, the Court declined to grant the extraordinary relief under Article 226.

Validity of pre-deposit through Electronic Credit Ledger - acceptance of Electronic Credit Ledger payment for statutory pre-deposit - setting aside of order for erroneous rejection of appeal on pre-deposit technicality - remand for fresh adjudication of appeal after acceptance of pre-deposit

Validity of pre-deposit through Electronic Credit Ledger - acceptance of Electronic Credit Ledger payment for statutory pre-deposit - Payment of the statutory pre-deposit debited from the Electronic Credit Ledger (ECL) is permissible and must be accepted by the Department. - HELD THAT: - The Court noted the Circular dated 6th July 2022 issued by the GST Policy Wing, CBIC, which clarifies that pre-deposit of tax can be made by utilising the Electronic Credit Ledger. On that foundation the Court concluded that the appellate authority erred in rejecting the appeal solely because the pre-deposit was debited from the ECL instead of the Electronic Cash Ledger. The petitioner's pre-deposit made through the ECL must therefore be treated as valid and accepted by the Department. [Paras 3, 4]

The pre-deposit made through the Electronic Credit Ledger is valid and shall be accepted by the Department.

Setting aside of order for erroneous rejection of appeal on pre-deposit technicality - remand for fresh adjudication of appeal after acceptance of pre-deposit - The impugned order rejecting the appeal on the ground of payment through ECL is set aside and the appeal is remitted for fresh disposal after acceptance of the pre-deposit. - HELD THAT: - Having found that the ECL payment is permissible, the Court set aside the order dated 31.03.2023 which had rejected the appeal. The petitioner was directed to appear before the first appellate authority with a downloaded copy of the Court's order, the Department was to accept the pre-deposit already made through ECL, and the appeal was directed to be listed and disposed of afresh after hearing both parties within a stipulated timeframe. [Paras 4]

Impugned order dated 31.03.2023 is set aside; the appeal is remitted for fresh disposal after acceptance of the ECL pre-deposit.

Final Conclusion: The writ petition is allowed: the appellate order rejecting the appeal for having debited the pre-deposit from the Electronic Credit Ledger is set aside; the Department shall accept the ECL pre-deposit and the appeal shall be listed for fresh hearing and disposed of within the directed timeframe.

Revocation of cancellation of registration - amnesty scheme for restoration of GST registration - extension of time for filing application for revocation - restoration of GST registration upon payment of arrears, interest and statutory levies

Revocation of cancellation of registration - amnesty scheme for restoration of GST registration - extension of time for filing application for revocation - restoration of GST registration upon payment of arrears, interest and statutory levies - Whether petitioner whose GST registration was cancelled after the cut-off date is entitled to avail the benefit of the amnesty scheme and have registration restored on payment of arrears and interest within the extended period. - HELD THAT: - The Court noted that the Government had notified an amnesty scheme (Notification No.03/2023 - Central Tax dated 31.03.2023) allowing persons whose registrations were cancelled before 31.12.2022 to apply for revocation of cancellation upon furnishing returns and payment of tax, interest, penalty and late fee, and that the scheme was extended up to 31.08.2023 by Notification No.23/2023 - Central Tax dated 17.07.2023. Observing the legislative and administrative intent to permit registrants to revive registration to carry on business, the Court held that the petitioner, despite having registration cancelled after the original cut-off date, should be permitted to avail the benefit of the extended scheme. The Court directed that the petitioner remit the arrears of tax together with interest before the extended cut-off date of 31.08.2023 under the extended notification, and upon such payment the respondents were directed to restore the petitioner's registration forthwith and update the portal within one week of payment. The relief was granted as a discretionary direction to implement the scheme's purpose in favour of the petitioner on compliance with the specified conditions.

Petitioner permitted to avail benefit of the extended amnesty scheme by remitting arrears and interest by 31.08.2023; on payment respondents to restore registration and update the portal within one week.

Final Conclusion: Writ petition disposed directing petitioner to pay arrears and interest by 31.08.2023 under the extended amnesty notification; upon payment the respondents shall restore the petitioner's GST registration forthwith and take steps to reflect the same on the portal within one week; no costs.

Classification of supply as sale of goods versus supply of services - contract of sale; transfer of property in goods (Sale of Goods Act, 1930) - de-mineralised water versus ordinary water classification - exemption of treated sewage / recovered water under Notification No. 2/2017 - CT (Rate) - Zero Liquid Discharge (ZLD) and recovery-for-reuse regulatory context

Classification of supply as sale of goods versus supply of services - contract of sale; transfer of property in goods (Sale of Goods Act, 1930) - Classification of the applicant's proposed mode of operation (buying raw effluent, treating it and selling resultant products) as sale of goods. - HELD THAT: - The Authority examined the applicant's present operations and the proposed change to purchase raw effluent and sell resultant products. Applying section 4 of the Sale of Goods Act, 1930 and the ratio in State of Madras v. Gannon Dunkerley & Co., the Authority held that the proposed mode can be treated as a sale only if all elements of a contract of sale are satisfied - a contract to transfer property in goods for a price, with transfer of property actually occurring. The Authority recorded that if the applicant follows the procedures envisaged in the Sale of Goods Act and the rationale of the cited Supreme Court decision (i.e., capacity to contract, money consideration and transfer of title), the activity of purchasing effluent, treating it on own account and supplying outputs can be classified as sale of goods. Accordingly the classification is accepted subject to those conditions. [Paras 4, 5]

Classification of outputs as supply of goods is correct, subject to the applicant complying with the requirements and rationale of the Sale of Goods Act as explained in para 4.9.

De-mineralised water versus ordinary water classification - exemption of treated sewage / recovered water under Notification No. 2/2017 - CT (Rate) - Zero Liquid Discharge (ZLD) and recovery-for-reuse regulatory context - Correct classification and GST treatment of the water recovered from the effluent treatment process sold by the applicant. - HELD THAT: - The Authority analysed the nature of recovered water and applicable tariff headings. It observed that de-mineralised/distilled/conductivity water (chapter 28 heading 28.53) requires specific ion-exchange/distillation treatment, which the applicant's process does not perform; testing reports show presence of chlorides, sulphates and other dissolved salts, so the recovered water is not de-mineralised. The explanatory notes to heading 22.01 cover ordinary waters (clarified or purified) and exclude distilled/conductivity water. The Authority noted statutory and administrative clarifications including Circular No.179/11/2022 and the amendment omitting 'purified' from the exemption entry, and comparable rulings holding treated sewage/recovered water eligible for exemption. Given the ZLD mandate and that the plant's objective is recovery for reuse (not manufacturing of water), the Authority concluded that the recovered treated water qualifies as ordinary water falling within the exemption entry at SI. No. 99 of Notification No. 2/2017 - CT (Rate) (viz. water other than specified special categories) and is nil-rated under GST. [Paras 4, 5]

The water recovered and sold by the applicant is correctly classifiable under heading 2201 and is exempt (nil-rated) under SI. No. 99 of Notification No. 2/2017 - Central Tax (Rate) as amended.

Final Conclusion: The Authority ruled that the applicant's proposed purchase of raw effluent, treatment and sale of resultant products can be classified as sale of goods provided the statutory requirements for transfer of property under the Sale of Goods Act are satisfied; and that the treated/recovered water sold by the applicant is classifiable under heading 2201 and is exempt (nil-rated) under SI. No. 99 of Notification No. 2/2017 - CT (Rate) as amended.

Revision u/s 263 by CIT - deemed dividend addition u/s 2(22) - As decided by HC [2022 (1) TMI 796 - CALCUTTA HIGH COURT] Tribunal correctly noted that AO has taken a conscious decision bearing in mind the legal position that section 2(22)(e) was not applicable to the loan amount received by the assessee and allowed the appeal filed by the assessee and granted relief - HELD THAT:- There is a huge delay of 470 days in filing the special leave petition and the same has not been explained to the satisfaction of this Court.

Hence, the special leave petition is dismissed on the ground of delay as well as on merits.

Compounding of an offence committed u/s 276B, r/w. Section 278B - Period of limitation for filing compounding application - Power of the CBDT (Board) u/s 119 r.w.s. 279(6) to restrict compounding where application is filed beyond stipulated period - Failure to deposit the TDS amount, which was deducted u/s 192 from salary

As per HC [2023 (1) TMI 1018 - BOMBAY HIGH COURT] the guidelines contained in the CBDT Guidelines dated 14th June 2019 could not curtail the power vested in Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General under the provisions of Section 279(2) of the Income Tax Act.

Learned counsel for the petitioner submitted that the order of remand has been implemented.

HELD THAT:- In the circumstances, we decline to interfere in the matter. The Special Leave Petition is dismissed.

The question of law, if any, is kept open, to be raised in an appropriate matter.

Pending application(s) shall stand disposed of.

Adjustment of tax refund against outstanding demand without prior intimation under Section 245 - Refund the amount adjusted in excess of 20% of the disputed demand - action of the respondents and the Revenue Authorities is violative of Article 265 of the Constitution of India - need to pass strictures against the offices - HC [2022 (5) TMI 1289 - RAJASTHAN HIGH COURT] held action of recovery on the part of the respondents was de-hors the statutory provisions specified under Section 220(6), 245 of the IT Act and was without jurisdiction in terms of Sections 222 and 223 of the IT Act and imposed a cost upon the respondents which is quantified to Rs.50,000/- which the respondent-department shall pay - HELD THAT:- There is a delay of 345 days in filing this special leave petition. Delay condoned.

In the circumstances, we are not inclined to interfere in the matter on merits as such, but the cost of Rs. 50,000/- imposed by the High Court is set aside.

Reopening of assessment - change of opinion - doctrine against reopening on change of opinion - eligibility for exemption under Section 10AA - quashing of reassessment notice

Reopening of assessment - change of opinion - eligibility for exemption under Section 10AA - Impugned notice proposing reopening of assessment and the order disposing of objections were quashed as being founded on a change of opinion by the very officer who earlier accepted the assessee's claim. - HELD THAT: - The Court found that the author of the notice dated 20.03.2021 and the order disposing of objections dated 11.11.2021 was the same officer who, after issuing a notice under Section 142 and on the basis of the assessee's explanation dated 01.11.2019, had passed the assessment order under Section 143(3) accepting the claim for exemption under Section 10AA. The subsequent reasons recorded for reopening concluded that the assessee was not eligible for the exemption and that income had escaped assessment. The High Court held that this amounted to a change of opinion by the assessing officer and that reopening on that ground was impermissible. The Court applied the established principle that an assessment cannot be reopened merely because the officer has changed his opinion after having accepted the assessee's explanation, and therefore the reassessment proceedings based on such change of opinion could not be sustained. [Paras 5, 6, 9, 10, 11]

Notice dated 20.03.2021 and order dated 11.11.2021 quashed and set aside as being based on an impermissible change of opinion.

Final Conclusion: Writ petition allowed; reassessment notice and the order disposing objections for Assessment Year 2017-18 quashed on ground that reopening was based on change of opinion by the same officer who had earlier accepted the assessee's claim under Section 10AA.

Reopening of assessment under Section 148 - Requirement of fresh material / live link to form reason to believe - Change of opinion not sufficient ground for reassessment - Treatment of bank investments as stock-in-trade or investment

Reopening of assessment under Section 148 - Requirement of fresh material / live link to form reason to believe - Change of opinion not sufficient ground for reassessment - Validity of the notice under Section 148 for Assessment Year 2017-18 in absence of any new material and where reopening amounts to a mere change of opinion. - HELD THAT: - The reasons recorded for issuance of the notice relied upon the assessment records and a CBDT circular clarifying that the classification of securities as stock-in-trade or investment is a question of fact and to be determined on the basis of RBI guidelines. The Assessing Officer had considered the computation of long-term and short-term capital gains during the regular assessment proceedings and had allowed the gains treating the Government securities as investment. No fresh material or live link to new information was shown by the respondent to justify formation of a reason to believe that income had escaped assessment. Reliance on the assessment record and the Circular, without any new or independent material, showed only a change of opinion. In these circumstances the principle in Kelvinator (that mere change of opinion cannot be a ground for reopening) applies and the Section 148 notice was unsustainable.

The notice dated 20th March, 2021 issued under Section 148 and the order rejecting objections dated 25th October, 2021 are quashed and set aside.

Final Conclusion: Writ petition allowed; reassessment notice and the order rejecting objections quashed as the reopening was founded on no fresh material and amounted to a mere change of opinion.

Applicability of amendment to Section 153C (substitution of "belongs" with "pertains") - jurisdiction to assume proceedings under Section 153C based on materials "pertaining" to the assessee - retrospective application of statutory amendment to pre-amendment searches - assessment proceedings under Sections 153A and 153C

Applicability of amendment to Section 153C (substitution of "belongs" with "pertains") - retrospective application of statutory amendment to pre-amendment searches - jurisdiction to assume proceedings under Section 153C based on materials "pertaining" to the assessee - Amendment to Section 153C by Finance Act, 2015 is applicable to searches conducted before 01.06.2015 and permits assumption of jurisdiction where seized materials "pertain" to the assessee. - HELD THAT: - The Court, following the decision of the Hon'ble Supreme Court in Income Tax Officer v. Vikram Sujitkumar Bhatia, held that the legislative substitution of the words "belongs or belong to" with "pertains or pertain to" in Section 153C was intended to remedy judicial interpretations that unduly restricted the scope of proceedings against persons other than the searched person. Applying that ratio, the amendment is not to be confined temporally so as to prevent the Revenue from proceeding where incriminating materials seized in searches prior to 01.06.2015 "pertain" to a third party. Consequently, the Tribunal's reliance on the pre-amendment restrictive test (requiring documents to "belong" to the assessee) was held unsustainable and the substantial question of law was answered in favour of the Revenue. [Paras 2, 12, 13]

Question of law answered in favour of the Revenue; amendment to Section 153C applies to searches conducted before 01.06.2015 and validates assumption of jurisdiction where seized materials pertain to the assessee; impugned Tribunal order quashed and set aside.

Remand for adjudication on other grounds - opportunity of hearing on remaining issues - Matter remanded to CIT(A) for fresh adjudication on grounds other than the applicability of the Section 153C amendment. - HELD THAT: - Having resolved the limited legal question in favour of the Revenue, the Court directed that the assessment be reconsidered by the CIT(A) on merits in respect of any other grounds which the assessee may prefer. The assessee is to be given opportunity of hearing and liberty was reserved to pursue other grounds before the appellate authority within the timeframe specified by the Court. [Paras 13]

Assessment remitted to CIT(A) for fresh consideration of all other grounds (except the issue concluded by the Supreme Court), with opportunity of hearing to the assessee.

Final Conclusion: Appeal allowed; Tribunal order dated 23.11.2022 quashed and set aside. The amendment to Section 153C (Finance Act, 2015) applies to searches conducted before 01.06.2015 where seized materials pertain to the assessee; matter remitted to CIT(A) for reconsideration of other grounds with opportunity to the assessee.

Vivad se Vishwas Scheme - attachment of bank account - appropriation of recovery - refund of excess recovery - liability to pay interest on unpaid amount

Vivad se Vishwas Scheme - attachment of bank account - appropriation of recovery - refund of excess recovery - Whether the excess amount recovered from the petitioner under the Vivad se Vishwas Scheme by appropriation from the petitioner's attached bank account must be refunded. - HELD THAT: - The petitioner filed Form 1 under the Vivad se Vishwas Scheme and was directed to pay a specified sum. Part recovery was effected by appropriation from the petitioner's bank account which had been attached on 02.08.2021. The Court found that, given the attachment of the account, there was no justification for recovering amounts in excess of the liability payable by the due date under the Scheme. The Court recorded that although recoveries were made in stages, the net effect was an excess appropriation beyond the amount properly payable by the petitioner under the settlement and that such excess must be returned. The Court therefore directed refund of the excess amount to the petitioner as expeditiously as possible. [Paras 13, 14, 15, 17]

Respondents directed to refund the excess amount of Rs. 9,32,536/- to the petitioner within six weeks.

Liability to pay interest on unpaid amount - rate of interest - Whether the petitioner is liable to pay interest on the shortfall that remained unpaid by the due date under the Scheme and, if so, at what rate. - HELD THAT: - The Court examined the quantum of the amount that was actually payable by the petitioner by the due date and noted that a sum of Rs. 7,15,678/- was the payable balance. Applying the principle that interest is payable on the unpaid liability, the Court held that interest at 10% is payable on that balance and quantified the interest accordingly. The Court directed that the interest so payable be appropriated and the remaining balance after such appropriation be refunded to the petitioner. [Paras 16]

Petitioner liable to pay interest at 10% on Rs. 7,15,678/-, and balance after appropriation to be refunded.

Final Conclusion: Writ petition allowed; respondents directed to refund the excess amount to the petitioner within six weeks, after appropriating interest at 10% on the payable balance as held by the Court.

Liability under Section 201 for failure to deduct TDS - Consideration of documents furnished after survey - Right to be heard and fresh enquiry before adjudication

Liability under Section 201 for failure to deduct TDS - Consideration of documents furnished after survey - Right to be heard and fresh enquiry before adjudication - Impugned orders passed under Section 201 were set aside and the matter remanded for fresh enquiry allowing the petitioner an opportunity to furnish and have considered the details submitted on 16.03.2023. - HELD THAT: - The Court found that the petitioner, a cooperative society, had submitted interest payment details and other particulars by email dated 16.03.2023 following a survey under Section 133A (2A). Although the Department recorded that the petitioner admitted incompleteness of particulars at the time of survey and contended that the subsequent particulars were still inadequate, the Court observed that the impugned orders were passed without full consideration of the material furnished on 16.03.2023. In view of the limited scope of the writ petitions and to protect the parties' interests, the Court exercised supervisory jurisdiction to set aside the orders and direct the Department to reconsider the material already furnished and, if necessary, to call for full and complete particulars before finally adjudicating liability under Section 201. The Court imposed a timeline for that exercise and required the petitioner to cooperate with the Department. [Paras 5, 6]

Impugned orders set aside; respondent directed to consider the details furnished on 16.03.2023 and, if required, call for complete particulars and conduct a fresh enquiry within six weeks.

Final Conclusion: Writ petitions allowed in part; orders under Section 201 quashed and matter remanded for fresh adjudication after giving the petitioner an opportunity to furnish and have considered the documents dated 16.03.2023, to be completed within six weeks; no costs.

Treatment of sale proceeds as capital gains versus income from other sources - allowability of indexed cost of acquisition and cost of improvement - burden on Revenue to rebut AO's verification of documentary evidence - requirement of independent inquiry before treating agreement amount as unexplained investment - tax consequence of memorandum of understanding not resulting in execution of sale deed

Treatment of sale proceeds as capital gains versus income from other sources - allowability of indexed cost of acquisition and cost of improvement - burden on Revenue to rebut AO's verification of documentary evidence - Deletion of addition of Rs. 73,32,026 made by AO by treating sale proceeds as income from other sources and disallowing indexed cost of acquisition/improvement. - HELD THAT: - Ld.CIT(A) recorded that the assessee produced purchase deeds and bills for cost of acquisition and improvement which the AO had verified in the remand report as to amounts and indexation. The CIT(A) held that where the asset is shown as a capital asset and the AO has verified sale consideration and indexed cost components, treatment as income from other sources by disallowing those expenses is not sustainable. The Revenue did not place any contrary material to rebut the AO's verification recorded in the remand report. On these facts the Tribunal affirmed the CIT(A)'s conclusion that the transactions are taxable under the head capital gains and that the indexed cost of acquisition/improvement claimed is allowable, thereby justifying deletion of the addition. [Paras 9, 12]

Addition of Rs. 73,32,026 deleted and the income rightly taxed as capital gains; Revenue's ground dismissed.

Tax consequence of memorandum of understanding not resulting in execution of sale deed - requirement of independent inquiry before treating agreement amount as unexplained investment - burden on Revenue to rebut AO's verification of documentary evidence - Deletion of addition of Rs. 1,15,70,000 made by AO treating the entire MoU amount as unexplained investment where only a part-payment was shown and no sale deed was executed. - HELD THAT: - CIT(A) found on facts that only a payment of Rs. 5,00,000 was made in respect of the MoU and this payment was verified by the AO from records. The Tribunal observed that the transaction did not culminate in a sale deed and that the AO, without making independent inquiries (for example from the builder), was not justified in treating the entire sale consideration as unexplained investment. The Revenue failed to produce contrary material to rebut the finding that only the part-payment existed. On this basis the Tribunal affirmed the CIT(A)'s deletion of the addition. [Paras 13, 14]

Addition of Rs. 1,15,70,000 deleted; only the verified part-payment was recognized and Revenue's ground dismissed.

Final Conclusion: Both impugned additions-relating to disallowance of indexed cost leading to treatment of sale proceeds as income from other sources, and relating to treatment of the entire MoU consideration as unexplained investment-were deleted by the CIT(A) and those findings are affirmed by the Tribunal; the Revenue's appeal is dismissed.

Validity of assessment under section 153C - requirement of incriminating material to have bearing on determination of total income - scope of section 153C post amendment - explanatory guidance of CBDT Circular No. 1/2015

Validity of assessment under section 153C - requirement of incriminating material to have bearing on determination of total income - scope of section 153C post amendment - explanatory guidance of CBDT Circular No. 1/2015 - Whether assessments framed under section 153C could be sustained in absence of seized documents or other incriminating material showing a nexus with determination of the assessees' total income for the assessment years in question. - HELD THAT: - The Assessing Officer initiated and completed assessments under section 153C on the basis of a satisfaction note drawn after search; however, the satisfaction note did not establish any document wise correlation between the seized material and the additions/disallowances made in the assessment orders. The Court relied on the Supreme Court's decision in Singhad Technical Education Society that where seized documents do not establish a bearing on the relevant assessment years, assessments framed under the provision are legally unsustainable. The amendment to section 153C and the CBDT's Circular No. 1/2015 restrict the exercise under section 153C to cases where books or documents seized have a bearing on determination of the other person's total income for the relevant assessment years. On the facts, the impugned additions and adhoc disallowances were devoid of any incriminating material linking the seized documents to the assessees' income; therefore the assessments under section 153C could not be sustained. Because the assessments were quashed on this foundational legal ground, the Tribunal did not adjudicate the substantive merits of the adhoc disallowances. [Paras 16, 19, 20, 24, 26]

Assessments framed under section 153C are quashed for lack of incriminating material showing bearing on determination of the assessees' total income; appeals allowed on this ground.

Final Conclusion: For A.Ys 2012-13 to 2016-17 the Tribunal quashed the assessments framed under section 153C and allowed the assessees' appeals, holding that the seized documents did not have the requisite bearing on determination of the assessees' total income as required by the amended scope of section 153C and the CBDT circular.

Addition under section 68 - acceptance of books of account - reliance on suspicion without tangible evidence - rejection of books of account under section 145(3) - non-mandatory nature of customer PAN/address for transactions below prescribed threshold

Addition under section 68 - acceptance of books of account - reliance on suspicion without tangible evidence - rejection of books of account under section 145(3) - non-mandatory nature of customer PAN/address for transactions below prescribed threshold - Validity of the addition of Rs. 3,89,52,097 made by the Assessing Officer under section 68 on account of alleged bogus cash sales - HELD THAT: - The Tribunal affirmed the CIT(A)'s deletion of the addition. The Assessing Officer relied on a perceived sudden increase in cash sales around the demonetisation period and on the absence of full customer details to treat deposits as unexplained income; however, no defect was found in the assessee's stock/inventory records, and the AO did not challenge or reject the books of account under section 145(3). The Tribunal held that suspicion, however strong, cannot substitute for tangible evidence and that once entries in the books of account are accepted and matched, there is no basis to classify such sales as bogus for the purpose of making an addition under section 68. Further, the failure to record full customer address/PAN during a period of rush-where such particulars are not mandatory for transactions below the statutory threshold-cannot by itself justify drawing an adverse inference when other corroborative parameters (purchases, stock registers and sufficiency of stock) are accepted. Applying these principles, the Tribunal found no infirmity in the CIT(A)'s conclusion and dismissed the Revenue's appeal. [Paras 7, 8]

The addition under section 68 was rightly deleted; Revenue's appeal is dismissed.

Final Conclusion: The Tribunal upheld the order of the CIT(A) deleting the addition made under section 68 for AY 2017-18, concluding that acceptance of the assessee's books and absence of tangible contrary evidence precluded treating the cash deposits as unexplained income; Revenue's appeal is dismissed and the assessee's cross-objection is rendered infructuous.

Revisionary jurisdiction under section 263 of the Income tax Act - Erroneous assessment prejudicial to the interests of revenue - Allowability of registration expenses under section 37(1) of the Income tax Act - Scope of enquiry and lack of enquiry - Faceless assessment (NFAC) and application of mind - Judicial view of Assessing Officer versus revisional interference

Revisionary jurisdiction under section 263 of the Income tax Act - Erroneous assessment prejudicial to the interests of revenue - Scope of enquiry and lack of enquiry - Faceless assessment (NFAC) and application of mind - Judicial view of Assessing Officer versus revisional interference - Whether the Principal Commissioner of Income Tax rightly invoked section 263 to revise the assessment order dated 04.03.2021. - HELD THAT: - The Tribunal held that revisionary jurisdiction under section 263 is limited and cannot be exercised merely because the revisional authority prefers a different view from that taken by the Assessing Officer. The AO had examined the assessee's submissions and financial statements, issued questionnaires in scrutiny, and on appreciation of facts allowed the claim by treating the registration expense as chargeable under section 37(1). The AO's conclusion was supported by judicial precedent relied upon by the assessee and was not shown to be wholly unsustainable in law. In a faceless assessment regime (NFAC) multiple units apply mind during assessment, and the existence of enquiry by the AO/units negates the contention of lack of enquiry. The Tribunal therefore found that the case did not fall within clauses (a) or (b) of Explanation 2 to section 263 and that the PCIT erred in assuming jurisdiction to revise the assessment.

The invocation of section 263 was quashed and the revisionary order set aside; the appeal is allowed on this ground.

Allowability of registration expenses under section 37(1) of the Income tax Act - Judicial view of Assessing Officer versus revisional interference - Whether the expenditure incurred towards registration of the lease deed is revenue in nature and rightly allowable under section 37(1). - HELD THAT: - The Tribunal accepted the AO's conclusion that the registration expense borne by the assessee was incurred to draw up and register an effective lease deed and did not involve an element of premium or an enduring asset. That conclusion was supported by precedent cited by the assessee and was one of the permissible views in law. Since the AO had applied his judicial mind and reached a tenable conclusion, the revisional authority could not substitute its opinion merely because it disagreed with that view.

The allowance of the registration expense under section 37(1) by the AO is sustainable and is not open to being set aside under section 263.

Final Conclusion: The Tribunal held that the Principal Commissioner wrongly assumed jurisdiction under section 263; the AO's allowance of the registration expense under section 37(1) was a tenable judicial view reached after enquiry (including in the faceless assessment process) and the revisionary order is quashed, allowing the assessee's appeal.

First proviso to section 143(1)(a) - obligation to intimate proposed adjustments before processing return - treatment of return and audit report timing for claiming exemption under section 11 - extension/exclusion of limitation period by the Hon'ble Supreme Court on account of COVID-19 for judicial and quasi judicial proceedings - appellate authority's plenary powers to entertain and decide additional grounds of appeal - remedy of condonation of delay under executive fiat via exercise of power under section 119(2)(b)

First proviso to section 143(1)(a) - obligation to intimate proposed adjustments before processing return - invalidity of assessment proceedings where intimation not given - Validity of the CPC order passed under section 143(1) where adjustments were made without giving intimation to the assessee as mandated by the first proviso to section 143(1)(a). - HELD THAT: - The Tribunal found that the Assessing Officer, CPC, made adjustments to the returned income without issuing any intimation in writing or electronic mode as required by the first proviso to section 143(1)(a). The Tribunal examined the e portal records and observed absence of any such intimation. Relying on the principle that the proviso must be complied with and consistent Tribunal authority, the Tribunal held that processing the return and making disallowances without giving the statutorily mandated opportunity rendered the section 143(1) order non compliant with the statute. The Tribunal further noted that an appellate authority has power to consider such legal issues and to admit additional grounds where facts are on record and no further verification is required. [Paras 8, 9, 10]

Order passed by CPC under section 143(1) is quashed for failure to comply with the first proviso to section 143(1)(a); the additional ground is allowed.

Treatment of return and audit report timing for claiming exemption under section 11 - extension/exclusion of limitation period by the Hon'ble Supreme Court on account of COVID-19 for judicial and quasi judicial proceedings - remedy of condonation of delay under executive fiat via exercise of power under section 119(2)(b) - Whether the return of income and Form 10B filed on 31.03.2021 and 30.03.2021 respectively were to be treated as filed within time for availing exemption under section 11 for A.Y. 2020-21. - HELD THAT: - The Tribunal recorded that the assessee filed the return in ITR 7 on 31.03.2021 and Form 10B on 30/31.03.2021 whereas the extended due date for filing was 15.02.2021. Having regard to the Hon'ble Supreme Court's order which restored earlier orders and directed exclusion of the period 15.03.2020 to 28.02.2022 for purposes of limitation, the Tribunal held that the filings fell within the extended/adjusted limitation framework and there was no delay. The Tribunal rejected the CIT(A)'s approach that the Supreme Court order did not apply, and concluded that in view of that order the assessee's return and audit report must be treated as timely for the purpose of entitlement to exemption under section 11. The Tribunal therefore set aside the CIT(A) order which had upheld disallowance on account of alleged belated filing. The Tribunal also noted the administrative route of condonation under the delegated power for cases of delay in filing Form 10B, but its decision on timeliness made such route unnecessary in this case. [Paras 11, 12, 16]

CIT(A)'s order upholding denial of exemption under section 11 is set aside; the exemption claimed is to be allowed and Grounds Nos. 1 to 5 are allowed.

Appellate authority's plenary powers to entertain and decide additional grounds of appeal - Admissibility of the additional ground raising non compliance with the first proviso to section 143(1)(a). - HELD THAT: - The Tribunal considered whether the additional ground could be admitted although not raised before the CIT(A). Observing that all relevant facts were on record and no further factual verification was necessary, and relying on Apex Court authority that an appellate authority can exercise all powers of the subordinate authority subject to statutory limits, the Tribunal exercised its discretion to admit the additional ground for adjudication. [Paras 4, 8]

Additional ground admitted and adjudicated.

Final Conclusion: The Tribunal admitted the additional ground, quashed the CPC order under section 143(1) for failure to comply with the first proviso to section 143(1)(a), and held that the assessee's return and Form 10B filings fall within the limitation framework as adjusted by the Hon'ble Supreme Court for COVID 19; the appeal is allowed and the exemption under section 11 for A.Y. 2020 21 is directed to be allowed.

Deeming provision under section 56(2)(vii)(b) and rebuttal by evidence - Obligation to refer to Valuation Officer / DVO on objection to stamp valuation - Admissibility and primacy of stamp valuation versus fair market value in property transactions - Remand or restoration to Assessing Officer for fresh reference to DVO

Deeming provision under section 56(2)(vii)(b) and rebuttal by evidence - Obligation to refer to Valuation Officer / DVO on objection to stamp valuation - Validity of making addition under section 56(2)(vii)(b) by adopting stamp valuation without referring the question of valuation to the Valuation Officer where the assessee objected and produced a registered valuer's report. - HELD THAT: - The Tribunal held that in the facts of the case the Assessing Officer acted improperly in applying the deeming provision of section 56(2)(vii)(b) solely on the basis of the stamp valuation authority's figure without referring the matter to the Valuation Officer (DVO) after the assessee had objected and filed a registered valuer's report. The assessee's valuer estimated the fair market value to be close to the agreement consideration (difference not exceeding 5%). The Tribunal relied on precedents recorded in the impugned order, including a decision of the Delhi Tribunal in ITO Vs. Aastha Goel , and High Court authorities (Sunil Kumar Agarwal Vs. CIT and CIT Vs. Chandra Narain Chaudhary ) which establish that a deeming provision based on stamp valuation is rebuttable and that where an objection is raised the AO must consider the objection, apply his mind to the approved valuer's report, and, if necessary, refer the valuation question to the DVO. Applying that principle, the Tribunal found that the AO failed to follow the course of law in not making the reference and that the addition was therefore unsustainable. [Paras 5, 6, 7]

Addition of Rs. 21,84,330/- under section 56(2)(vii)(b) deleted for want of reference to the Valuation Officer in the face of the assessee's objection and valuation evidence.

Remand or restoration to Assessing Officer for fresh reference to DVO - Whether the matter should be restored to the Assessing Officer for a fresh reference to the Valuation Officer despite the AO's earlier failure to make the reference. - HELD THAT: - The Tribunal declined the Department's request to remit the matter to the file of the Assessing Officer for referring valuation to the DVO. It reasoned that such a remand would effectively condone the AO's earlier erroneous and arbitrary action and would grant the revenue a second opportunity to rectify deficiencies for which the assessee was not at fault. The Tribunal treated the AO's failure to follow the prescribed procedure as rendering the addition unsustainable and refused to permit a 'second inning' for the Assessing Officer. [Paras 7]

Request to restore the matter for fresh reference to the AO/DVO refused; appeal allowed and addition deleted.

Final Conclusion: The Tribunal allowed the assessee's appeal for AY. 2018-19, deleted the addition made under section 56(2)(vii)(b) because the Assessing Officer failed to refer valuation to the Valuation Officer after the assessee objected and produced a registered valuer's report, and refused to remit the matter for fresh reference to the AO/DVO.

Taxability under section 56(2)(vii)(b) of the Income tax Act on receipt of immovable property - date of allotment/letter of allotment as date of agreement/acquisition for fiscal consequences - applicability of provisos to section 56(2)(vii)(b) where part consideration is paid by non cash before agreement date - remand to Assessing Officer for computing stamp duty value as on agreement date and obtaining DVO report

Taxability under section 56(2)(vii)(b) of the Income tax Act on receipt of immovable property - date of receipt/registration versus date of allotment as triggering event - Whether section 56(2)(vii)(b) is attracted in AY. 2016-17 in respect of the impugned flat and which date governs the chargeability. - HELD THAT: - The Tribunal held that the tax incident under section 56(2)(vii)(b) is triggered when an individual "receives" immovable property and therefore the provision is attracted in the year in which the property was registered/received. However, having regard to the facts that the allotment letter of the flat dated 25.11.2011 spelled out the details of the flat, sale consideration and payment terms and part payment was made prior to that date, the Tribunal applied the legal principle that the date of agreement fixing the amount of consideration may be the relevant date for computing the stamp duty value for the purposes of section 56(2)(vii)(b). The decision relied on precedents and CBDT circulars recognizing allotment letters (with corresponding payment terms) as creating a proprietary right for tax purposes. [Paras 6, 9]

Section 56(2)(vii)(b) is attracted but the date of agreement/allotment (25.11.2011) is determinative for valuation purposes rather than the later registration date relied upon by the AO.

Applicability of provisos to section 56(2)(vii)(b) where part consideration is paid by non cash before agreement date - use of stamp duty value as on the date of agreement where provisos apply - Whether the first and second provisos to section 56(2)(vii)(b) apply on the facts, requiring the stamp duty value as on the date of agreement to be taken into account. - HELD THAT: - On the facts the Tribunal found that the allotment letter dated 25.11.2011 fixed the consideration and that part consideration of Rs. 3,00,000 was paid by cheque on 15.11.2011. In view of these facts and in light of authorities and CBDT circulars, the Tribunal concluded that the provisos to section 56(2)(vii)(b) are attracted. Consequently, the stamp duty value as on the date of the agreement/allotment (25.11.2011) must be taken for determining any tax chargeability under the provision. [Paras 9, 10]

The first and second provisos to section 56(2)(vii)(b) apply; the stamp duty value as on 25.11.2011 is to be used for taxation under that clause.

Remand to Assessing Officer for computing stamp duty value as on agreement date and obtaining DVO report - opportunity to assessee to produce evidence for valuation - Whether the matter should be restored to the Assessing Officer for computation of tax (if any) under section 56(2)(vii)(b) taking stamp duty value as on 25.11.2011 and for any further fact finding including DVO reference. - HELD THAT: - The Tribunal observed that neither the AO nor the CIT(A) had computed the stamp duty value as on the agreement date (25.11.2011) as required by the provisos. The Tribunal therefore set aside the CIT(A)'s order insofar as it upheld the addition and restored the issue to the AO for fresh computation of tax chargeable, if any, by taking the stamp duty value on 25.11.2011; it directed the AO to obtain a DVO report if the assessee contests the valuation and to afford the assessee adequate opportunity to produce documents. [Paras 10]

Issue remanded to the AO for computation of tax, taking stamp duty value as on 25.11.2011 and for valuation verification (including DVO) with opportunity to the assessee to produce evidence.

Final Conclusion: The Tribunal allowed the appeal for statistical purposes, held that section 56(2)(vii)(b) is attracted but the provisos apply so that the stamp duty value on the agreement/allotment date (25.11.2011) governs valuation, and restored the matter to the Assessing Officer to compute tax (if any) accordingly and to undertake necessary valuation enquiries with opportunity to the assessee.

Raising new grounds beyond the show cause notice - violation of principles of natural justice - provisional assessment and requirement of final assessment for verification - remand for de-novo adjudication

Raising new grounds beyond the show cause notice - violation of principles of natural justice - Appellate authority erred in rejecting the refund claim by introducing a ground not indicated in the show cause notice and Order in Original. - HELD THAT: - The Tribunal held that the Commissioner (Appeals) introduced a new ground - namely non-finalisation of provisionally assessed Bills of Entry - which was not raised in the show cause notice. The original adjudicating authority had rejected the refund on specific grounds (lack of original documents and proof of payment), and the appellate authority was obliged to confine its examination to grounds pleaded and the scope of the show cause notice. Introducing an undisclosed verification basis or a fresh ground amounts to travelling beyond the show cause notice and results in violation of principles of natural justice. Reliance was placed on precedents that disallow raising of fresh grounds at appellate or later stages when those grounds were not the subject matter of the show cause notice or earlier proceedings. The Tribunal therefore found the appellate rejection unsustainable for being beyond the scope of the notice and for denying the appellant an opportunity to meet that basis of rejection. [Paras 6]

Impugned order set aside insofar as it rejects the refund claim on a ground not specified in the show cause notice.

Provisional assessment and requirement of final assessment for verification - remand for de-novo adjudication - Whether the matter should be remitted for fresh consideration by the original authority to examine the refund claim on merits and in light of original documents filed. - HELD THAT: - Having set aside the impugned appellate order for raising an extraneous ground, the Tribunal remitted the matter to the original adjudicating authority for de novo consideration. The Tribunal directed that the original authority examine the refund claim in light of the appellant's contention that the claim with all relevant original documents had been filed on 23.08.2004, and that mere observation that payments cannot be verified cannot, by itself, justify denial of the claim. The remand is for fresh adjudication on merits and verification of documents, not for the appellate authority to sustain a new, undisclosed ground. [Paras 8]

Matter remanded to the original authority for de novo adjudication of the refund claim; mere observation of unverifiability is not a permissible ground to deny the claim without proper adjudication.

Final Conclusion: The appellate order rejecting the refund claim is set aside for having introduced a ground not raised in the show cause notice; the matter is remitted to the original adjudicating authority for de novo consideration of the refund claim relating to the import period 20.09.2000 to 29.12.2001, with direction that denial cannot rest on mere observation of unverifiable payments without proper adjudication.

Customs valuation - sequential application of valuation rules - rejection of declared value - deductive value - residual method - re-determination of assessable value - market survey evidence - remand for fresh adjudication

Sequential application of valuation rules - rejection of declared value - residual method - deductive value - Whether the adjudicating authority correctly rejected the declared value and applied the Customs Valuation Rules sequentially before resorting to the residual method - HELD THAT: - The Tribunal found that the adjudicating authority proceeded to invoke the residual method and relied on rule 7 and rule 9 of the Customs Valuation Rules without applying the alternative valuation methods in sequence and without assigning cogent reasons for disallowance of the declared value. The adjudicating authority relied on market information but did not record necessary findings or explore available alternatives such as ascertainment of retail/distribution channels and deduction-based valuation (deductive value) despite the goods being branded and saleable in the market. Reliance on residual method in those circumstances was held to be inconsistent with the requirement to apply the valuation rules sequentially and with Tribunal precedents; consequently, the impugned computation lacked documentary basis and the authority should have afforded opportunity and directed verification of prices of earlier consignments before finalising assessable value. For these reasons the impugned order was set aside and the matter remitted for fresh adjudication on the factual aspects relating to earlier imports and price verification. [Paras 5, 6, 7, 8]

Impugned order set aside and matter remanded to original authority for re-determination after furnishing and verification of facts and prices of earlier imports, applying the valuation rules sequentially.

Final Conclusion: The Tribunal set aside the adjudicating authority's valuation and ancillary orders and remanded the matter for fresh adjudication to enable the appellant to furnish details of earlier imports and for the authority to verify prices and apply the Customs Valuation Rules in the prescribed sequence.

Re-determination of value - Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - adoption of expert/trade advisory panel valuation - confiscation under section 111 of Customs Act, 1962 - penalty under section 112 of Customs Act, 1962 - rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - transaction value - section 14 of Customs Act, 1962

Re-determination of value - adoption of expert/trade advisory panel valuation - rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - section 14 of Customs Act, 1962 - Validity of re-determination of assessable value by relying on trade advisory panel reports without adopting valuation in accordance with the Rules - HELD THAT: - The adjudicating authority relied on two trade advisory panel reports to discard the declared transaction value and re-determine assessable value. The Tribunal found that the process adopted failed to comply with the scheme and rigour of the Customs Valuation Rules, 2007. There is no recorded finding that the declared value was inconsistent with the requirements of section 14 or that the grounds in rule 3(4) and the procedural steps culminating in rule 12 were followed to justify resort to subsequent valuation methods. The reasons that prompted the trade panel to arrive at the disputed values are not on record and the assessing authority effectively outsourced valuation to an outside agency without adopting such valuation as its own or providing reasoned justification. Although the panel reports showed only limited variation between them and a modest difference from the declared value, that does not cure the procedural and substantive defects in the re-determination. For these reasons the re-determination is not in accordance with law. [Paras 6, 7, 8]

Re-determination of value by reference to the trade advisory panel reports without adherence to the statutory valuation process is unlawful and set aside.

Confiscation under section 111 of Customs Act, 1962 - penalty under section 112 of Customs Act, 1962 - Validity of confiscation and consequential penalties founded on the impugned re-determination of value - HELD THAT: - Confiscation and penalties were imposed consequentially upon the re-determined value. Since the Tribunal has held that the re-determination lacks lawful foundation, the penal consequences flowing from that foundational error likewise lack authority. The Tribunal noted that the penal detriments to the appellants arise from an illusory foundation and that the adjudicatory conclusions on value did not meet the statutory prescriptions required to sustain confiscation and penalties. [Paras 9]

Confiscation and the penalties imposed consequentially thereon are quashed and set aside.

Final Conclusion: Appeals allowed. The re-determination of assessable value, and consequential confiscation and penalties, are set aside for failure to follow the statutory valuation procedure; impugned order quashed.

Revocation of licence or imposition of penalty - Misconduct - Moral Turpitude - Disobedience to summons under Section 108 of the Customs Act - Conviction for offence involving moral turpitude - Restoration of Customs Broker licence - Imposition of token penalty

Misconduct - Disobedience to summons under Section 108 of the Customs Act - Whether the appellant's non-appearance before DRI and related conduct constituted misconduct warranting imposition of penalty under regulation 18(c). - HELD THAT: - The Tribunal examined the material showing that the appellant sought exemption and asked for fresh dates in response to two summons, subsequently appeared before DRI on later dates and furnished documents. The adjudicating authority characterised non-appearance as deliberate disregard and misconduct. The Tribunal found that, although the appellant did not actively cooperate at the initial stage and should have exercised greater diligence as a licensed customs broker, the non-attendance was sufficiently explained by justiciable reasons (including requests for prior intimation and being an outstation broker) and was not shown to be an act of deliberate defiance amounting to misconduct attracting the maximum penal consequences. The Tribunal therefore rejected the characterization of the conduct as mandating the maximum sanction under regulation 18(c) and held that the factual circumstances did not support treating the non-appearance as culpable misconduct warranting the harshest penalty. [Paras 3, 4, 5]

The non-appearance did not amount to misconduct justifying maximum penalty under regulation 18(c); the explanation furnished by the appellant was accepted as sufficient to negativate the harshest sanction.

Moral Turpitude - Conviction for offence involving moral turpitude - Imposition of token penalty - Whether the appellant's conviction by the magistrate for non-attendance and omission to produce documents constituted an offence involving moral turpitude justifying penalty under regulation 18(f), and the appropriate quantum of penalty. - HELD THAT: - The adjudicating authority relied on convictions under provisions of the Penal Code for non-attendance and omission to produce documents. The Tribunal observed that the appellant had already been subjected to penal consequences by the Additional Chief Metropolitan Magistrate and paid the fine. The Tribunal concluded that the magistrate's conviction for non-attendance and related omission did not, in the circumstances, demonstrate an act of moral turpitude - it was not linked to an immoral act - and therefore did not justify invocation of regulation 18(f) to impose the maximum regulatory penalty. Having regard to the appellant's partial cooperation, outstation status, need for prior notice, and the fact of earlier criminal penalty, the Tribunal found that the ends of justice would be met by reducing the regulatory sanction and imposing a token penalty under the applicable regulations. [Paras 3, 5]

Conviction for non-attendance and omission to produce documents did not constitute moral turpitude for purposes of regulation 18(f) in the present facts; the maximum penalty was not justified and a reduced token penalty was directed.

Restoration of Customs Broker licence - Imposition of token penalty - Whether the regulatory penalty imposed should be moderated and what consequential order should follow in relation to the Customs Broker licence. - HELD THAT: - The Tribunal noted that the appellant's Customs Broker licence had been restored and the appellant was permitted to transact business. In exercise of its supervisory jurisdiction and having found the charges did not warrant the maximum sanction, the Tribunal exercised discretion under the Regulations to moderate the penalty. Considering the earlier criminal proceedings and the appellant's explanations, the Tribunal held that a token regulatory penalty would suffice and directed imposition of that reduced penalty under the relevant regulatory provision. [Paras 5, 6]

Penalty reduced to a token penalty and appeal disposed accordingly; licence remains restored and the appellant permitted to transact business.

Final Conclusion: The appeal was disposed of by holding that the facts did not justify imposition of the maximum regulatory penalty for misconduct or moral turpitude; the Tribunal reduced the regulatory sanction to a token penalty of Rs. 10,000/- and confirmed that the Customs Broker licence is restored and the appellant may transact business.

Confiscation for import without licence under Customs law - redemption fine in lieu of confiscation - monetary penalty for import of restricted goods - classification of old and used clothing as restricted import - market survey and ascertainment of margin of profit for fixation of fine - remand for disclosure of margin of profit

Confiscation for import without licence under Customs law - classification of old and used clothing as restricted import - Confiscation of the imported old and used clothing was upheld. - HELD THAT: - The Tribunal found that the imported goods were classifiable as old and used garments which are restricted and require a specific import licence under the applicable Foreign Trade Policy/ITC(HS) classification, and the importers did not have the required licence. In these circumstances confiscation under the Customs provision dealing with import without licence was sustained. Although the Tribunal referenced earlier authority dealing with procedural aspects of invoking confiscation provisions and the role of declaration/inspection, the admitted failure to comply with licensing requirements formed the basis for upholding confiscation in the present appeals. [Paras 7]

Confiscation of the goods is upheld.

Redemption fine in lieu of confiscation - monetary penalty for import of restricted goods - market survey and ascertainment of margin of profit for fixation of fine - remand for disclosure of margin of profit - The redemption fine and the penalty imposed by the adjudicating authority were held to be sufficient and were upheld; the appeals against them were dismissed. - HELD THAT: - Applying the Tribunal's earlier reasoning, the Bench considered the adequacy of the redemption fine and penalty imposed for import of restricted goods without licence. While noting issues that arise where margin of profit and value ascertainment were not disclosed as directed in earlier remand orders, the Tribunal declined further remand in the present cases because of paucity of evidence and negligible scope for fresh ascertainment. In view of the admitted non-compliance with licensing requirements and the factual matrix, the Tribunal concluded that the redemption fine and penalty already imposed meet the ends of justice and need no enhancement or interference. [Paras 4, 6]

Redemption fine and penalty confirmed by the adjudicating authority are upheld and appeals against them are dismissed.

Final Conclusion: Following the Tribunal's reasoning and precedent, the confiscation, redemption fine and penalty imposed by the adjudicating authority are upheld; the Revenue's appeals are dismissed.

Condonation of delay - proviso to Section 128(1) of the Customs Act - sufficient cause - application of Section 5 of the Limitation Act unnecessary where statutory extended period applies - remand for fresh adjudication on merits

Condonation of delay - proviso to Section 128(1) of the Customs Act - sufficient cause - Whether the delay of 27 days in filing the appeal could be condoned under the proviso to Section 128(1) of the Customs Act, 1962. - HELD THAT: - The Tribunal examined the appellant's explanation and materials and found that the delay of 27 days fell within the statutory extended period of 30 days under the proviso to Section 128(1). The appellant, a sole proprietorship whose proprietor was aged about 70 years, furnished a medical certificate showing the proprietor suffered coronary artery disease and underwent angiography; the Tribunal treated these circumstances as adequate to establish sufficient cause for the short delay. The Tribunal distinguished precedents relied upon by the respondent which prohibit condonation beyond the 30 day extended period, noting those cases concerned delays exceeding the statutory extension or involved reliance on Section 5 of the Limitation Act where the statutory extended period was not available. As the present delay falls within the statutory extended period, recourse to the Limitation Act was unnecessary. [Paras 5, 6]

Delay of 27 days condoned and appeal remitted to the Commissioner (Appeals) for fresh decision on merits.

Remand for fresh adjudication on merits - Whether the matter should be remanded to the Commissioner (Appeals) for fresh consideration on merits after condoning the delay. - HELD THAT: - Having concluded that the delay was lawfully condoned within the proviso to Section 128(1), the Tribunal did not express any view on the substantive merits of the original order. Instead, it set aside the impugned order rejecting the appeal as time barred and remanded the matter so that the Commissioner (Appeals) may decide the appeal afresh on merits. [Paras 6]

Matter remanded to the Commissioner (Appeals) for fresh adjudication on merits; impugned order set aside.

Final Conclusion: The Tribunal condoned the 27 day delay (within the 30 day statutory extension under the proviso to Section 128(1)), set aside the order rejecting the appeal as time barred and remitted the appeal to the Commissioner (Appeals) for fresh decision on merits.

Dispositions of company property after commencement of winding up - Effect of interim injunction on subsequent conveyances - General Power of Attorney transactions and agent's fraud - bona fide purchaser and reasonable due diligence - Section 23, Indian Contract Act - agreements with unlawful object - Section 536(2), Companies Act, 1956 - voidness of post-commencement transfers

Effect of interim injunction on subsequent conveyances - Section 23, Indian Contract Act - agreements with unlawful object - Validity of sale deeds executed by the GPA holder in favour of predecessors-in-interest of the applicants where such conveyances were made after the interim injunction restraining GPA holders. - HELD THAT: - The Court found that the GPA holder, D. Sankaran, was subject to an injunction restraining alienation of lands purchased by the Company (orders of 24.04.2003 and extended thereafter). Sale deeds executed by the GPA holder in 2005 in favour of third parties, and antecedent transactions relied on by the applicants, were effected in the teeth of that order. Such conveyances, being contrary to the injunction and therefore involving an unlawful object, fall within Section 23 of the Contract Act and are void. Precedents cited by the applicants addressing discharge of interim orders or agency principles did not advance their case where the agent acted in contravention of a court order; accordingly the sale deeds executed by the GPA holder are void. [Paras 17, 18, 19]

Sale deeds executed by the GPA holder in contravention of the injunction are unlawful and void.

General Power of Attorney transactions and agent's fraud - bona fide purchaser and reasonable due diligence - Whether the applicants acquired title as bona fide purchasers for value after exercising reasonable due diligence. - HELD THAT: - The material on record (MOU, GPAs, receipts, encumbrance certificates and the table of 107 customers) establishes that the Company acquired and plotted the lands, and that about 58 acres were conveyed by the GPA holder to the Company's customers. The encumbrance entries from 1995-2003 and other documents available publicly would have revealed these prior conveyances had reasonable due diligence been exercised. Given the prior entries and the fact that the transactions in favour of applicants occurred in 2013 (after possession by the Official Liquidator), the Court held the applicants were not bona fide purchasers and their purchases were not made after reasonable due diligence. [Paras 12, 13, 20]

Applicants were not bona fide purchasers; the sales in their favour do not benefit from protection of bona fide purchase after reasonable diligence.

Dispositions of company property after commencement of winding up - Section 536(2), Companies Act, 1956 - voidness of post-commencement transfers - Effect of the commencement of winding up on dispositions of the Company's property and whether the sale deeds to the applicants are void under Section 536(2) CA 1956. - HELD THAT: - The Court took judicial notice of the legal fiction that winding up commenced on or about 24.02.1998 (appointment of provisional liquidator and prior orders). Section 536(2) provides that dispositions of company property after commencement of winding up are void unless the Court otherwise orders. The MOU, GPAs and receipts (dating from 1995) and the admitted sequence of conveyances demonstrate that the disputed land is an asset of the Company and that the sale deeds in 2013 were dispositions effected after the commencement of winding up. Such dispositions were, therefore, void under Section 536(2) and could not be validated. [Paras 21, 22]

Sales effected after the commencement of winding up are void under Section 536(2); the sale deeds relied upon by the applicants are void.

Relief and consequential orders - Final relief to be granted and consequential directions regarding title mutation and auction sale. - HELD THAT: - In view of the findings that the impugned sale deeds are void both for contravention of the injunction and by reason of Section 536(2), the Court dismissed the applicants' Company Applications seeking to set aside the Sale Notice and for interim stay. The Official Liquidator was directed to take necessary action to reflect the Company's ownership in revenue records and to conclude the auction sale. The order preserved the applicants' right to pursue claims against their vendors. [Paras 22, 23]

Applications dismissed; Official Liquidator to mutate title and proceed with auction; applicants may have recourse against their vendors.

Final Conclusion: The Court held that the sale deeds relied upon by the applicants are void: (i) those executed by the GPA holder in breach of the interim injunction are unlawful under Section 23 of the Contract Act and void; (ii) dispositions effected after the commencement of winding up are void under Section 536(2) CA 1956; the applicants were not bona fide purchasers having exercised reasonable diligence. Company Applications Nos.359 & 360 of 2021 are dismissed and the Official Liquidator is directed to mutate revenue records to reflect the Company's ownership and to conclude the auction sale, without prejudice to applicants' claims against their vendors.

Admission of application under Section 9 - subsequent events affecting insolvency proceedings - stepped into the shoes of promoter - maintainability of CIRP in presence of statutory transfer under RERA - right to be heard and impleadment - remand for fresh adjudication - discharge of resolution professional and claim for expenses

Admission of application under Section 9 - subsequent events affecting insolvency proceedings - maintainability of CIRP in presence of statutory transfer under RERA - Whether the Adjudicating Authority could validly admit the Section 9 application without taking into account the subsequent RERA order by which certain towers were handed over to associations who stepped into the shoes of the promoter. - HELD THAT: - The Tribunal found that the Section 9 application filed in 2021 was admitted by the Adjudicating Authority without awareness of later material events, namely the HRERA order dated 15.03.2022 which handed over specific towers to the associations and declared that those associations had "stepped into the shoes of promoters" and had taken over the towers free from prior liabilities. Those subsequent events bore directly on the question of maintainability and the CIRP process. Because neither the Corporate Debtor nor the Operational Creditor placed these developments before the Adjudicating Authority, the admission proceeded without consideration of facts that could affect the propriety of initiating CIRP. For these reasons the impugned admission could not be sustained. [Paras 9]

Impugned order admitting the Section 9 application is set aside.

Remand for fresh adjudication - right to be heard and impleadment - What is the appropriate procedural consequence of setting aside the admission in view of the subsequent RERA order? - HELD THAT: - The Tribunal held that the Section 9 application (IB-625(ND) of 2021) must be revived and proceeded with afresh by the Adjudicating Authority in accordance with law so that the subsequent events and statutory order are considered. The appellants (associations) are to be impleaded in the Section 9 proceedings and are permitted to file their reply and make submissions before the Adjudicating Authority. This remand requires fresh adjudication rather than a final finding on merits by the Tribunal. [Paras 11, 12]

The Section 9 application is revived for fresh consideration; appellants are impleaded and allowed to file reply.

Discharge of resolution professional and claim for expenses - Status of the Resolution Professional and entitlement to claim fees/expenses incurred during the interim CIRP steps following setting aside of the admission. - HELD THAT: - Having set aside the admission, the Tribunal directed that the Resolution Professional stands discharged. At the same time it recognised that the Resolution Professional may have incurred expenses while carrying out CIRP activities during the period the admission stood. The Tribunal observed that it remains open to the Resolution Professional to approach the Adjudicating Authority by filing an appropriate application for recovery of fees and expenses incurred in the course of the proceedings. [Paras 13, 14]

Resolution Professional discharged; may apply to the Adjudicating Authority for fees and expenses.

Final Conclusion: The appeal is allowed to the extent that the order admitting the Section 9 application is set aside and the application is revived for fresh adjudication before the Adjudicating Authority; the associations are impleaded and permitted to file replies; the Resolution Professional is discharged but may seek an adjudication of fees and expenses before the Adjudicating Authority.

Obligation of personnel to extend assistance and cooperation to the liquidator/ interim resolution professional - direction to produce original documents in support of acquisition of assets - restraint from trespassing and maintenance of status quo over corporate debtor's property during liquidation - no adjudication on ownership in proceedings under Section 19

Obligation of personnel to extend assistance and cooperation to the liquidator/ interim resolution professional - direction to produce original documents in support of acquisition of assets - Validity and effect of the Adjudicating Authority's direction to the appellant to furnish original documents in support of acquisition of land under the mandate to cooperate with the liquidator. - HELD THAT: - The Tribunal held that the Adjudicating Authority's order directing the appellant to provide original documents in his possession in support of acquisition of the land merely implements the statutory obligation on personnel/promoters to assist the resolution professional/liquidator and does not amount to a prejudicial finding against the appellant. The order is procedural and aimed at enabling the liquidator to complete liquidation; if originals are not in the appellant's possession he can explain and supply copies. The direction therefore falls within the authority granted by the provisions making Section 19 applicable to the liquidation process and does not, by itself, constitute an adverse adjudication on ownership or non-cooperation. [Paras 7, 9]

The direction to furnish original documents was appropriate, not prejudicial, and does not amount to a finding of non-cooperation or affect ownership rights.

Restraint from trespassing and maintenance of status quo over corporate debtor's property during liquidation - no adjudication on ownership in proceedings under Section 19 - Validity of the restraint against trespass/maintenance of status quo imposed by the Adjudicating Authority and whether the order implied a determination of title in favour of the corporate debtor. - HELD THAT: - The Tribunal noted that the Adjudicating Authority, on service and ex parte appearance of the respondent, restrained the appellant from trespassing on or dealing with properties shown in the corporate debtor's audited books and directed maintenance of status quo pending disposal of the liquidation proceedings. The order was prophylactic to prevent hindrance to the liquidation process and did not adjudicate or determine ownership; the question of title is not the subject of the Section 19 application filed by the liquidator. Consequently, the status-quo/trespass restraint does not cause prejudice to the appellant and is within the authority of the Adjudicating Authority to preserve assets during liquidation. [Paras 11, 12]

The restraint and direction to maintain status quo were justified to protect the liquidation process and did not constitute a finding on ownership.

Final Conclusion: Both appeals are devoid of merit and are dismissed at the stage of admission; no order as to costs.

Date of default - Record of Default (RoD) issued by an Information Utility (NeSL) - amendment to IBBI (Information Utilities) Regulations - Regulation 20(1A) - Section 7 insolvency petition - admissibility where default date falls within suspension under Section 10A - authentication / deemed authentication of default information by an Information Utility

Date of default - Record of Default (RoD) issued by an Information Utility (NeSL) - Section 7 insolvency petition - admissibility where default date falls within suspension under Section 10A - Whether the date of default once stated in Part IV of Form I can be altered by a subsequent Record of Default issued by an Information Utility and, if so, whether such alteration takes the loan tranche out of the purview of Section 10A of the Code. - HELD THAT: - The Tribunal found that the question whether a creditor may change the date of default recorded in its original Section 7 pleadings by relying upon a subsequently issued RoD from NeSL, and whether such a changed date excludes the petition from the ambit of Section 10A, raises arguable points requiring adjudication. The Bench noted that Regulation 20(1A) (IBBI (IU) Regulations) and the subsequent direction of the NCLT to produce RoD bear upon the process by which RoDs are generated and authenticated, and that NeSL's procedures provide for authentication or deemed authentication after opportunity to the debtor. Given conflicting material in the record (original Part IV/Firm-1 date(s) and later RoD dates) and reliance on NeSL authentication procedures, the Tribunal did not decide the legal question on merits. Instead, having regard to the existence of substantial questions of law and fact, the Tribunal issued notice to the respondent to file replies and allowed rejoinder, thereby directing further adjudicatory proceedings on the admissibility and effect of the subsequently issued RoD. [Paras 25, 26, 27]

Notice issued; parties directed to file pleadings within stipulated time and the matter listed for further hearing; operation of the impugned Adjudicating Authority order stayed until the next date.

Final Conclusion: The Tribunal did not decide the substantive question whether a subsequently issued NeSL Record of Default can alter the date of default in Part IV and thereby evade Section 10A; instead, finding arguable points, it issued notice to the respondent, directed pleadings on a fixed timetable, listed the matter for hearing and stayed the operation of the impugned admission order in the meantime.

Input service - Cenvat credit - inclusive clause of definition of input service - nexus between input services and exported service - application of Maruti Suzuki Ltd to input services - quarterly refund claims

Input service - inclusive clause of definition of input service - nexus between input services and exported service - application of Maruti Suzuki Ltd to input services - Whether the definition of 'input service' under CCR, 2004 (as it stood prior to 01.04.2011) covers the disputed services and whether the ratio in Maruti Suzuki Ltd applies to input services. - HELD THAT: - The Tribunal held that the definition of input service expressly covers services used by a provider of output service for providing the output service and services used 'in relation to' activities relating to business. The inclusive illustrations (accounting, auditing, financing, computer networking, security, etc.) evidence that the definition was intended to extend to services related to the business and not be confined narrowly. Consequently, the nexus requirement relied upon by the authorities below was satisfied in the present facts where the appellant explained how the services were used in relation to its business. The Tribunal further concluded that the ratio of Maruti Suzuki Ltd, which concerned 'inputs' (goods), is not apt for determining admissibility of credit on input services, and its application to input services was incorrect in the circumstances. Reliance on earlier Tribunal decisions and the Bench's own earlier order in the appellant's contemporaneous matter supported allowing credit for the disputed services.

Disputed services (including Courier service, Chartered Accountant service, Management/Business Consulting service, Manpower supply, Renting of Immovable Property, Rent-a-Cab, Business Auxiliary and allied services) are held to be eligible input service for taking Cenvat credit; Maruti Suzuki Ltd not applicable to input services in this context.

Cenvat credit - quarterly refund claims - Whether credit attributable to an earlier quarter may be claimed for refund in a subsequent quarter. - HELD THAT: - The Tribunal, applying the Board clarification dated 19.01.2010, observed that the notification contains no bar on claiming refund of credit availed in an earlier quarter in a subsequent quarter. The Circular expressly permits carrying forward input credit to later quarters and claiming refund in those quarters (particularly where exporters may have had no exports in the quarter in which credit was taken). For service providers exporting 100% services, refund should be granted irrespective of when credit was taken, subject to declarations and subsequent verification. Therefore, the invoice dated 18.07.2010 or other credits pertaining to an earlier quarter could be considered for refund in the quarter under dispute, provided the lower authority ascertains that the credit was not previously claimed or refunded in another proceeding.

Claim for refund in the quarter October-December 2010 may include credit taken in earlier quarters; lower authority to verify that the same credit has not been claimed or refunded earlier before allowing refund.

Cenvat credit - input service - Remand for verification of certain invoices and amounts before allowing refund. - HELD THAT: - A portion of the refund claim (amount availed on the basis of invoices in respect of import of services, including Invoice No. 100040328 dated 25.10.2010) was not accompanied by the supporting invoice and therefore could not be accepted at the Tribunal stage without verification. The Tribunal directed the Original Authority to verify facts in light of the Board clarification and allow the claim if found in order. The Tribunal also directed that where credit claimed in the subject quarter pertains to an earlier quarter, the lower authority should verify whether the credit was not already availed or refunded in other proceedings before admitting refund.

Rs.5,77,851/- (amount claimed on certain import-of-services invoices) is remanded to the Original Authority for verification and allowance if found in order; lower authority to verify earlier-claim status for other questioned invoices.

Final Conclusion: The appeal is allowed: the Tribunal modified the order of the Commissioner (Appeals) by holding the contested services to be eligible input service for Cenvat credit and permitting consideration of credits taken in earlier quarters for refund subject to verification; a portion of the refund claim is remanded to the Original Authority for factual verification and consequential relief is granted.

Works Contract Services - Valuation under Rule 2A of the Service Tax (Determination of Value) Rules, 2006 - Point of Taxation Rules, 2011 - Exemption under notification 25/2012-ST and restoration by notification 9/2016 ST - Extended period under the proviso to Section 73(1) - Remand for de novo adjudication

Valuation under Rule 2A of the Service Tax (Determination of Value) Rules, 2006 - Works Contract Services - Whether the adjudicating authority correctly determined the taxable value without applying Rule 2A and without giving the assessee an opportunity to rely on P&L particulars to segregate value of goods from service value. - HELD THAT: - Tribunal observed that the adjudicating authority quantified service tax liability by adopting total receipts and did not apply Rule 2A to determine the value of taxable service net of material value, despite the appellants having relied on profit & loss statements and other records showing purchase of goods. The appellants explained inability to earlier produce some documents due to COVID-19 and have since filed additional material that may assist in applying Rule 2A. The Tribunal noted that where documents are available or can be produced which enable segregation of goods and service components, benefit of abatement under valuation rules must be considered. In view of the incomplete consideration of Rule 2A and the newly produced documents, the Tribunal directed de novo adjudication so that valuation may be recomputed after affording the appellant an opportunity to place the material before the authority and for the authority to apply Rule 2A correctly. [Paras 9, 11]

Impugned order set aside and matter remanded for de novo adjudication to determine taxable value applying Rule 2A after permitting production and consideration of relevant documents.

Point of Taxation Rules, 2011 - Works Contract Services - Whether tax liability ought to be computed by reference to date wise receipts and point of taxation rules rather than by applying an undifferentiated rate to aggregate profit & loss figures. - HELD THAT: - The Tribunal recorded that the appellants furnished Form 26AS and date wise contract receipts and later produced bank statements showing date wise receipts, which are material for fixing point of taxation under Rules 3-5 of the Point of Taxation Rules, 2011. The adjudicating authority had applied uniform rates to aggregate receipts on the ground that date wise receipts were not available. Given the subsequently produced documents and the centrality of point of taxation to rate application, the Tribunal held that the adjudicating authority should reassess liability taking into account the date of receipt as per the Point of Taxation Rules and the documentary evidence tendered by the appellant. [Paras 4, 9, 11]

Remanded for fresh adjudication to determine liability in accordance with the Point of Taxation Rules after considering date wise receipts and the documents produced by the appellant.

Exemption under notification 25/2012-ST and restoration by notification 9/2016 ST - Whether the appellants are entitled to the exemption claimed under notification 25/2012 ST (as restored by notification 9/2016 ST and by retrospective provision) for contracts entered prior to 1.3.2015 and, if so, whether the condition relating to stamp duty applies to all sub clauses or only to a particular clause. - HELD THAT: - The appellants contended that certain contracts pre dated 1.3.2015 and hence fall within the exemption; they also advanced a textual contention about the applicability of the contractual/stamp duty condition to only a specified sub clause. The Tribunal noted that the adjudicating authority did not fully consider the authorities relied upon and that relevant work orders and records supporting the appellants' claim were not earlier available due to the pandemic. Because these contentions and supporting documents bear directly on entitlement to exemption, the Tribunal left the question open for fresh consideration in the remanded proceedings. [Paras 4, 11]

Issue left open and remanded for de novo adjudication so that entitlement to the claimed exemption may be examined on the available documents and legal submissions.

Extended period under the proviso to Section 73(1) - Whether the extended period of limitation under the proviso to Section 73(1) can be invoked on the ground that the assessee collected service tax from customers. - HELD THAT: - The adjudicating authority invoked the extended period on the basis of departmental reports alleging that the appellant had collected service tax. The appellants produced departmental letters clarifying that earlier entries had erroneously recorded amounts as 'Service Tax' when they were TDS on Sales Tax (VAT) and have now produced those clarificatory communications. The Tribunal held that where third party material is relied upon to invoke extended limitation, the assessee must be given an opportunity to explain or to produce evidence rebutting that material. Given the newly produced clarifications from government departments and the need to examine collection of tax evidence, the Tribunal directed fresh adjudication rather than upholding invocation of extended limitation at this stage. [Paras 4, 10, 11]

Remanded for de novo adjudication with direction to consider the departmental clarifications and to afford the appellant opportunity to rebut or explain third party material before deciding applicability of the extended period.

Final Conclusion: Impugned order set aside and the matter remanded for de novo adjudication on all issues, permitting the appellant to produce and rely on additional documents; all substantive questions (valuation under Rule 2A, point of taxation, entitlement to exemption and applicability of extended limitation) were left open for reconsideration by the adjudicating authority.

Intellectual Property Rights services - Technical know-how versus Intellectual Property Right - Reverse charge mechanism - Point of Taxation Rules, 2011 - Export of services / services used outside India - Technical Inspection and Certification Service

Intellectual Property Rights services - Technical know-how versus Intellectual Property Right - Whether royalty paid for transfer/use of technical know-how from the overseas licensor is taxable as 'Intellectual Property Rights' service under reverse charge. - HELD THAT: - The Tribunal examined the licence agreements and found the contract conferred a non exclusive, non transferable right to utilise know how (data, documentation, drawings, specifications, processes) but did not show registration or recognition of any constituent as an IPR under Indian law. Consistent with earlier Tribunal decisions and Board Circular F. No. 80/10/2004 S.T., only rights that are IPRs under laws in force in India fall within the taxable definition; undisclosed information/trade secrets not covered by Indian IPR statutes are excluded. The Department produced no evidence that the subject know how or any part thereof was registered or covered as an IPR in India. Applying these principles, the Tribunal held the Department failed to establish that the royalty related to an IPR service chargeable to service tax. [Paras 14, 15, 16, 17]

Demand of service tax on royalty as IPR service (reverse charge) is not sustainable and is set aside.

Point of Taxation Rules, 2011 - Intellectual Property Rights services - Whether the taxable event occurred after levy so as to attract service tax (i.e., whether periodic royalty payments for an agreement entered into before levy are taxable). - HELD THAT: - The appellants relied on precedent holding that where the substantive service was rendered before the levy, subsequent periodic payments do not import a new taxable service. The Tribunal referred to Modi Mundipharma and similar decisions which held that where know how was permanently transferred or rendered earlier, later instalment payments do not amount to services rendered during the disputed period. Having found that the Department did not prove continuous provision of new know how during the taxed period, and in view of the authorities, the Tribunal accepted that no fresh taxable service was made out for the disputed period. [Paras 18]

Tax cannot be levied on royalty purportedly on account of periodic payments where the service event occurred prior to levy; demand on this ground is set aside.

Export of services / services used outside India - Business Auxiliary Service - Whether commission received from Greg Norman Division for identifying and negotiating with Indian exporters is taxable as 'Business Auxiliary Service' or is an export (services used outside India) and hence not taxable. - HELD THAT: - The appellants contended the service benefit accrued outside India and payment was in convertible foreign exchange; reliance was placed on Circular No. 111/05/2009 ST and Tribunal precedents recognizing the destination based nature of service tax so that services consumed/used outside India qualify as exports and are not taxable. Applying the destination based principle and earlier authoritative decisions, the Tribunal held that the services to Greg Norman were used outside India and therefore could not be taxed by the Revenue. [Paras 19]

Demand of service tax on commission from Greg Norman Division is unsustainable and is set aside.

Technical Inspection and Certification Service - Whether amounts received for inspecting exporters' goods and issuing certificates qualify as 'Technical Inspection and Certification Service' provided by a 'technical inspection and certification agency'. - HELD THAT: - The Tribunal examined the nature of services rendered to companies such as Matrix, Super Fashion and Paragon Apparel. Although the appellants inspected merchandise against Reebok's standards and issued statements that goods conformed to Reebok standards, the Tribunal found they were not an agency engaged in independent testing/certification as envisaged by the definition of technical inspection and certification services. Reliance was placed on earlier Tribunal rulings distinguishing routine checks/maintenance or activity based services from inspection/certification by an agency that tests and issues standards compliance certificates. On that basis the conditions for classification as technical inspection and certification services were not satisfied. [Paras 20, 21]

Demand of service tax under 'Technical Inspection and Certification Service' is untenable and is set aside.

Final Conclusion: The Tribunal found that Revenue failed to establish liability for service tax on (a) royalty for technical know how under IPR services, (b) periodic royalty payments where the taxable event preceded the levy, (c) commission from Greg Norman which were services used outside India, and (d) amounts for inspectors/certification which did not qualify as technical inspection and certification by an agency; the impugned orders are set aside and both appeals are allowed.

Definition of "cab" in rent-a-cab service - exclusion for motor vehicle rented for use by an educational body imparting skill or knowledge - service tax liability on rent-a-cab service - use of vehicle for educational transportation versus commercial use of recipient

Definition of "cab" in rent-a-cab service - exclusion for motor vehicle rented for use by an educational body imparting skill or knowledge - service tax liability on rent-a-cab service - Whether the bus transportation service provided by the appellant for conveyance of school children to and from the school run by J.K. Paper Limited falls within the exclusion from the definition of "cab" and is therefore not liable to service tax as rent-a-cab service. - HELD THAT: - The Tribunal found as an admitted fact that the motor vehicles were used to transport school children attending the school run by J.K. Paper Limited. The definition of "cab" for rent-a-cab service excludes a motor vehicle rented for use by an educational body imparting skill or knowledge. The Tribunal rejected the Revenue's contention that J.K. Paper Limited's commercial character precluded it from being treated as an educational body for this purpose, observing that the service was exclusively for transporting schoolchildren and not for the commercial business of the company. Reliance placed on earlier tribunal decisions was noted as supporting the exclusion. Applying the exclusion in the definition, the Tribunal held that the service did not fall within rent-a-cab and thus was not liable to service tax. [Paras 4, 5]

The exclusion in the definition of "cab" applies; the rent-a-cab demand is unsustainable and the appeal is allowed.

Final Conclusion: The impugned order is set aside: the transportation of school children by the appellant is excluded from the definition of "cab" and not liable to service tax; the appeal is allowed with consequential relief and the stay application is disposed of.

Exemption on intermediary products captively consumed - interpretation and applicability of Notification No.67/95-CE - excisability of ethyl alcohol / rectified spirit - treatment of molasses as input for notified final products - consequential relief on denial of notification benefit

Interpretation and applicability of Notification No.67/95-CE - exemption on intermediary products captively consumed - Benefit of Notification No.67/95-CE was rightly available in respect of molasses captively consumed for manufacture of ethyl alcohol / rectified spirit and denial of the notification was unsustainable. - HELD THAT: - The Tribunal examined whether molasses used captively to produce ethyl alcohol / rectified spirit could attract the exemption under Notification No.67/95-CE which exempts intermediary products captively consumed in the manufacture of excisable goods. Having considered the factual position of captive consumption, compliance with reversal under Rule 6 of the CENVAT Credit Rules and relevant authorities, the Tribunal held that the denial of the notification benefit by the Adjudicating Authority was not justified. The decision relied upon earlier Tribunal pronouncements which treated rectified spirit/ethyl alcohol produced in the distillery as falling within the scope of the tariff classification and therefore within the ambit of the Notification for inputs used in manufacture of such final products. On that basis, the impugned orders denying the Notification benefit were set aside and the appeals allowed with consequential relief as per law.

Notification No.67/95-CE benefit in respect of molasses captively consumed to manufacture ethyl alcohol / rectified spirit was restored and the impugned orders denying the benefit were set aside.

Excisability of ethyl alcohol / rectified spirit - treatment of molasses as input for notified final products - Rectified spirit / ethyl alcohol (when not intended for human consumption) are to be treated as excisable goods for the purposes of Notification No.67/95-CE and are not to be regarded as non-excisable or exempt goods so as to exclude the benefit of the Notification. - HELD THAT: - The Tribunal considered the contention that ethyl alcohol / rectified spirit were non-excisable or exempt (and therefore would disqualify intermediary inputs from Notification No.67/95-CE). Applying authoritative precedents, the Tribunal accepted the view that rectified spirit (not intended for human consumption) is the same as ethyl alcohol and falls within the relevant tariff entry (as amended) and is therefore excisable for the purpose of determining entitlement under the Notification. The adjudicatory conclusion that such final products were non-excisable was rejected and earlier findings in favour of excisability were followed, leading to acceptance of the appellants' entitlement to the Notification.

The classification and excisability of rectified spirit / ethyl alcohol for the purpose of Notification No.67/95-CE was affirmed in favour of the appellants, negating the Adjudicating Authority's view that they were non-excisable exempt goods.

Final Conclusion: Appeals allowed; impugned orders denying the benefit of Notification No.67/95-CE in respect of molasses captively consumed for manufacture of ethyl alcohol / rectified spirit were set aside and consequential relief granted in accordance with law.

Eligibility of Cenvat/service tax credit on construction and erection services used in modernization, renovation or repair of factory - Interpretation of 'input service' inclusive clause vis-a -vis exclusion for construction services - Harmonious reading of inclusive and exclusion clauses of 'input service' - Applicability of Board Circular No. 943/4/2011-CX dated 29-04-2011

Eligibility of Cenvat/service tax credit on construction and erection services used in modernization, renovation or repair of factory - Interpretation of 'input service' inclusive clause vis-a -vis exclusion for construction services - Applicability of Board Circular No. 943/4/2011-CX dated 29-04-2011 - Credit of service tax paid on construction and erection services used for modernization, renovation or repair of the factory is admissible as input service. - HELD THAT: - The Court examined the definition of "input service" prior to and after the amendment effective 1-4-2011 and concluded that services "used in relation to modernization, renovation or repairs of a factory" are expressly included within the inclusive limb of the definition. Although the amended definition contains an exclusion for construction services and specified works contract service-portion, a harmonious reading of the inclusive portion and the exclusion shows that construction services which are in substance for modernization, renovation or repair remain within the scope of input service. The Board's clarification in Circular No. 943/4/2011-CX dated 29-04-2011 confirms that service tax paid on construction services used in modernization, renovation or repair is eligible for credit. The appellant's utilization of construction, fabrication and erection services for setting up and installing the SMS plant falls within the meaning of modernization/renovation/repair and therefore qualifies as input service. The Tribunal's consistent view on availability of credit in such cases was noted and applied to allow the claim.

The denial of Cenvat/service tax credit in respect of construction, fabrication and erection services used for modernization, renovation or repair of the factory is set aside and the credit is held admissible.

Final Conclusion: Appeal allowed; the impugned order is set aside and service tax/Cenvat credit for construction, fabrication and erection services used in modernization, renovation or repair of the factory for the periods 2015-16 and 2016-17 is held admissible in accordance with the inclusive scope of "input service" and Board Circular No. 943/4/2011-CX dated 29-04-2011.

Admissibility of CENVAT credit on the basis of supplementary invoices issued by service providers - documents prescribed under Rule 9(1) of the CENVAT Credit Rules, 2004 - prospective effect of insertion of Rule 9(1)(bb) w.e.f. 01.04.2011 - alignment of Service Tax payment on accrual basis with CENVAT Credit Rules - burden of proof under Rule 9(5) of the CENVAT Credit Rules, 2004 - imposition of penalty under Rule 15 of the CENVAT Credit Rules, 2004 - invocation of extended period of limitation under proviso to Section 11A(1)

Admissibility of CENVAT credit on the basis of supplementary invoices issued by service providers - documents prescribed under Rule 9(1) of the CENVAT Credit Rules, 2004 - Cenvat credit availed on the strength of supplementary invoices issued by service providers for the period prior to 01.04.2011 is admissible. - HELD THAT: - The Tribunal examined Rule 9(1) of the CENVAT Credit Rules, 2004 and observed that while sub clauses (a) and (b) distinguish between original and supplementary invoices in the context of goods, clauses (e), (f) and (g) prescribe documents for service tax credit without any express exclusion of supplementary invoices issued by service providers for the period in dispute. Earlier jurisprudence and coordinate Bench decisions treat 'invoice' for services as including supplementary invoices where Rule 9(1) made no distinction. The Tribunal further noted the consequential amendments effected in 2011-Rule 6 of the Service Tax Rules was amended to make service tax payable on accrual and Rule 9(1)(bb) was inserted w.e.f. 01.04.2011 to expressly deal with supplementary invoices by service providers; that insertion is prospective. Applying these legal and factual matrices, and having regard to authorities allowing credit where supplementary invoices are relatable to original supply and tax has been paid, the Tribunal held that denial of credit for periods prior to 01.04.2011 was unsustainable and that the impugned demand based on exclusion in Rule 9(1)(b) was contrary to the scheme of Rule 9(1). [Paras 4]

Demand for disallowance of Cenvat credit on supplementary invoices (for period prior to 01.04.2011) set aside and appellant's appeal allowed.

Prospective effect of insertion of Rule 9(1)(bb) w.e.f. 01.04.2011 - imposition of penalty under Rule 15 of the CENVAT Credit Rules, 2004 - invocation of extended period of limitation under proviso to Section 11A(1) - burden of proof under Rule 9(5) of the CENVAT Credit Rules, 2004 - Penalty, interest and invocation of extended limitation cannot be sustained once the primary demand for disallowed credit is set aside; Rule 9(1)(bb) could not be applied retrospectively. - HELD THAT: - The Tribunal held that the Commissioner's reliance on Rule 9(1)(bb) (inserted w.e.f. 01.04.2011) to deny credit for pre amendment periods was impermissible because the provision was prospective and introduced after service tax payment regime moved to accrual. Having decided the admissibility issue on merits in favour of the appellant, the Tribunal did not adjudicate the extended limitation contention but observed that since the substantive demand, interest and penalty were set aside, the consequential penalty and interest ordered in the impugned order also fall. The Tribunal therefore set aside the demand, interest and penalty and dismissed the revenue's appeal against the adequacy of penalty imposed below. [Paras 4]

Interest and penalty orders set aside; revenue's appeal dismissed.

Final Conclusion: Cenvat credit claimed on supplementary invoices raised by service providers for the period prior to 01.04.2011 is allowable where tax has been paid and the supplementary invoices are relatable to the original supplies; the 2011 amendment (Rule 9(1)(bb)) is prospective and cannot be applied retrospectively, and consequential demands for interest and penalty are set aside. Appeals: appellant's allowed; revenue's dismissed.

Assessable value declaration - production and perusal of relied upon documents - violation of principles of natural justice - burden of proof on the department for quantification of duty - appropriation of amounts paid - penalties for non compliance

Production and perusal of relied upon documents - violation of principles of natural justice - burden of proof on the department for quantification of duty - appropriation of amounts paid - assessable value declaration - penalties for non compliance - Whether the demand for differential duty and penalties could be sustained where the department had taken original records, failed to supply or permit full perusal of relied upon documents despite tribunal directions, and where the appellant admitted and had paid a portion of the liability prior to issuance of the show cause notice. - HELD THAT: - The show cause notice itself recorded that original documents relied upon had been taken by the department and offered the appellant an opportunity to peruse them. During earlier proceedings before the Tribunal only partial documents were made available to the appellant and subsequent directions to the department to supply the relied upon records were not complied with. The adjudicating authority passed a de novo order without demonstrating proper perusal or supply of the relied upon records to the appellant, notwithstanding the department's contemporaneous statements that the records were not readily available. The Tribunal found that because the department had not clearly established the basis for quantification of the full demand and the appellant had been deprived of adequate opportunity to inspect and rely upon the documents, there was a violation of natural justice. In that factual matrix the burden rested on the department to prove and elucidate the detailed quantification for upholding the full demand. The appellant had admitted and proved payment of a specified amount before issuance of the show cause notice and the earlier Commissioner (Appeals) had, in the first adjudication, accepted appropriation of that amount. Given the confusion in quantification and the department's failure to supply relied upon documents, remand was considered unnecessary and the Tribunal proceeded to dispose the appeal on available records by upholding the duty to the extent admitted and paid by the appellant and setting aside the balance demand and the penalties. [Paras 12, 13, 16, 17, 18]

Demand reduced to the amount the appellant admitted and paid (Rs.18,81,515/-) and the balance set aside; all penalties imposed are set aside.

Final Conclusion: On the facts the Tribunal upheld only the duty amount admitted and paid by the appellant for the period 01.07.1997 to 31.03.2001, set aside the remainder of the demand and quashed the penalties, concluding that the department failed to prove the full quantification and violated principles of natural justice by not supplying the relied upon documents.

Input service - Cenvat credit upto the place of removal - place of removal - eligibility of Cenvat credit - penalty under Section 11AC

Input service - place of removal - Cenvat credit upto the place of removal - Cenvat credit for Belt Jointing Services used at buyer's premises - HELD THAT: - The Tribunal applied the definition of input service and the rule that Cenvat credit is available only for services used "up to the place of removal." The appellant's goods were cleared in CKD condition and jointing services were rendered at the buyer's premises after removal. Reliance on the Supreme Court decision in CCE Nagpur v. Ispat Industries was held to support the proposition that the "place of removal" cannot be the buyer's premises where invoices and sales tax remain under factory jurisdiction. Accordingly, belt jointing services performed at the buyer's site after removal are not eligible for Cenvat credit for services received after 01.04.2011. The amendment making the "up to the place of removal" restriction effective from 01.04.2011 was noted; therefore services rendered prior to that date may remain eligible and require verification by the adjudicating authority. [Paras 6, 7, 10]

Cenvat credit for Belt Jointing Services rendered after 01.04.2011 at the buyer's premises is disallowed; services rendered prior to 01.04.2011 may be allowed subject to verification.

Input service - eligibility of Cenvat credit - Cenvat credit for Way Bill Generation, H.O. Rent, H.O. Car Parking and H.O. other Services - HELD THAT: - The Tribunal found that the services for Way Bill Generation, Head Office rent, Head Office car parking and other head office services (water supply, lift, generator, security, garbage etc.) were used in relation to the appellant's business activities and amount to input service within the Rule. These services were held to be essential for carrying out the appellant's business and therefore eligible for Cenvat credit, the appeal being allowed to that extent. [Paras 8, 10]

Cenvat credit allowed for Way Bill Generation, H.O. Rent, H.O. Car Parking and H.O. other Services; appeal allowed on these counts.

Penalty under Section 11AC - eligibility of Cenvat credit - Validity of penalty under Section 11AC and allegation of suppression - HELD THAT: - The Tribunal observed that the appellant had regularly filed service-tax returns disclosing the Cenvat credit claimed and that, on merits, credit was allowed for four of the five contested services. Given the absence of suppression and the partial allowance of disputed credit (and the transitional effect for belt jointing services), the imposition of penalty under Section 11AC was held not to be justified. Consequently the penalty was set aside. [Paras 9, 10]

Penalty imposed under Section 11AC is set aside for lack of suppression and having regard to the disposals on merits.

Final Conclusion: Appeal allowed in part: Cenvat credit sustained for Way Bill Generation, H.O. Rent, H.O. Car Parking and H.O. other Services; credit for Belt Jointing Services disallowed for services rendered after 01.04.2011 but to be verified/allowed if rendered prior to 01.04.2011; penalty under Section 11AC set aside.

Adjustment of tax payments against interest liability - Remission of interest and penalty under an amnesty scheme - Interpretation of 'tax payable' for imposition of interest - Application of Sec. 30(5) and Sec. 30(6) of the GVAT Act - Object and purpose of amnesty schemes and duty to respect scheme benefits

Adjustment of tax payments against interest liability - Demand notice quashing - Validity of assessment adjustment which applied tax paid with returns against interest computed on additional tax declared under the amnesty scheme and consequent demand notice of 30.10.2021. - HELD THAT: - The Court found that the assessment, intimation under the amnesty application and the amount declared by the petitioners were identical, and that the authorities nevertheless adjusted taxes paid with returns against interest on the amnesty-declared tax, thereby manufacturing an artificial shortfall. That adjustment was contrary to the terms and object of the amnesty scheme and to the factual matrix where the petitioners had paid the declared outstanding tax within the scheme timeline. The action of modifying the assessment to appropriate earlier payments against interest and thereafter issuing the demand notice was held to be impermissible and resulted in the creation of an illegitimate liability. [Paras 6, 8]

Demand Notice dated 30.10.2021 is quashed and set aside and the adjustment of tax paid by the petitioners against interest liability is set aside; such tax must be treated as adjusted against principal tax liability.

Remission of interest and penalty under an amnesty scheme - Object and purpose of amnesty schemes and duty to respect scheme benefits - Whether the petitioners were entitled to remission of interest and penalty under the Vera Samadhan Yojana, 2019 in respect of the tax they declared and paid under the scheme. - HELD THAT: - Having examined the scheme clauses and earlier decisions of this Court, the Court held that the amnesty was intended to secure quick resolution of old disputes and to provide substantial relief to dealers. The relevant clauses indicate that on payment of outstanding tax dues as declared under the scheme there would be remission of interest and penalty; part payments made earlier and the subsequent payment of remaining dues under the scheme were to be treated so as to avail the remission. Denying remission on the ground that part of the tax had been paid earlier would frustrate the scheme's object and could lead to unconstitutional discrimination. Accordingly, where the declared outstanding tax was paid in accordance with the scheme, interest and penalty remission must follow. [Paras 6]

Petitioners are entitled to remission of interest and penalty in respect of the tax declared and paid under the amnesty scheme; the scheme must be construed to effectuate its object and afford the declared benefits.

Interpretation of 'tax payable' for imposition of interest - Application of Sec. 30(5) and Sec. 30(6) of the GVAT Act - Whether interest under Sec. 30(5) and the appropriation rule in Sec. 30(6) could be lawfully invoked in respect of purchase tax which was not shown as due in the returns actually filed by the dealer. - HELD THAT: - Relying on precedents and a contextual reading of the provisions, the Court held that interest under Sec. 30(5) and the application rule in Sec. 30(6) operate with reference to the tax 'due' as per the return actually filed by the dealer. The expression 'tax payable' must be understood in that context; it does not mean the tax that ought to have been shown in a correct return later determined on assessment. In the petitioners' case the purchase tax had been erroneously claimed as input credit and was not shown as due in the filed return; consequently, the statutory machinery for charging interest on tax 'not paid' could not be invoked in respect of that amount. Therefore the respondents' reliance on Sec. 30 to justify appropriation against interest was misplaced. [Paras 6]

Interest under Sec. 30(5) and appropriation under Sec. 30(6) cannot be applied to amounts that were not 'tax due' according to the return actually filed; the purchase tax in question was not so due and interest could not lawfully be levied or recovered by appropriation.

Final Conclusion: The writ petition is allowed: the demand notice dated 30.10.2021 and the modification of the assessment by adjusting tax paid with returns against interest are set aside; the tax paid by the petitioners is to be treated as adjusted against principal tax liability and the remission provided by the amnesty scheme is to be given effect in accordance with the Court's reasoning.

Prejudicial to the interests of revenue - revision under Section 32(2) of the Telangana Value Added Tax Act, 2005 - revisional jurisdiction - input tax credit (ITC) eligibility - stock transfer - alternative remedy and maintainability of writ under Article 226

Revision under Section 32(2) of the Telangana Value Added Tax Act, 2005 - prejudicial to the interests of revenue - input tax credit (ITC) eligibility - stock transfer - Impugned revisional order withdrawing ITC was set aside and remanded for fresh decision - HELD THAT: - The revisional authority reached a definitive conclusion that the dealer transferred locally purchased gold bullion to its manufacturing unit in Kolkata and exported the finished jewellery from Kolkata, treating such local purchases as stock transfers and disallowing ITC. The High Court found no material on record to support that definite conclusion and observed that the revisional finding went beyond the vague letter dated 03.04.2017 and contrary to contemporaneous assessment records. The Court reiterated that revision under Section 32(2) must not be used to initiate a fishing or roving enquiry and that an assessing authority's view cannot be treated as prejudicial to revenue merely because the revisional authority prefers another inference; however, since the revisional authority had specifically relied on absence of manufacturing details and quantities, the appropriate course was remand for fresh consideration. The matter was therefore remitted to the revisional authority with liberty to the petitioner to produce evidence and for the authority to pass a fresh order after hearing. [Paras 16, 17, 18]

Impugned revisional order dated 07.12.2020 and consequential order dated 29.12.2020 set aside; matter remanded to revisional authority for fresh decision after affording opportunity to produce evidence.

Alternative remedy and maintainability of writ under Article 226 - revisional jurisdiction - Writ petition not dismissed on account of availability of statutory appeal; petition entertained - HELD THAT: - Although the revisional order is appealable under Section 33(1), the High Court, having admitted the writ petition and passed interim orders, declined to non-suit the petitioner at the hearing stage on the ground of alternative remedy. The Court noted established principles permitting exercise of writ jurisdiction notwithstanding alternative remedies where there is challenge to procedure, violation of natural justice, absence of jurisdiction, or other exceptional circumstances. On the facts, the Court considered it inappropriate to relegate the petitioner to the appellate remedy at this stage and therefore proceeded to decide the challenge to the revisional order. [Paras 12]

Petition not dismissed for non-availability of alternative remedy; writ petition entertained and adjudicated to the extent indicated.

Final Conclusion: Writ petition allowed in part: revisional order dated 07.12.2020 and consequential order dated 29.12.2020 set aside and the matter remanded to the revisional authority to decide afresh after giving the petitioner an opportunity to produce evidence; no order as to costs.

Dishonour of cheque liability under Section 138 of the Negotiable Instruments Act - Vicarious liability of directors under Section 141 of the Negotiable Instruments Act - Requirement of specific averments to fasten liability on directors - Resignation and its effect on criminal liability of a director - Power to quash criminal process under inherent jurisdiction of the High Court - Quashing to be exercised sparingly

Vicarious liability of directors under Section 141 of the Negotiable Instruments Act - Requirement of specific averments to fasten liability on directors - Quashing to be exercised sparingly - Summoning orders and dismissal of petitioner's applications for discharge in the five complaints under Sections 138 and 141 of the Negotiable Instruments Act shall not be quashed at this stage. - HELD THAT: - The Court examined the complaint and the material on record and concluded that, given specific averments that the petitioner was involved in obtaining loans and issuing the cheques and having regard to contemporaneous material relied upon by the complainant (including emails and other allegations), it cannot be determined with certainty at the threshold that the petitioner was not in charge of, or responsible for, the conduct of the company's business at the relevant time. Considering the proximity of dates of appointment, purported resignation and dishonour of the cheques, absence of incontrovertible evidence of resignation acceptance (such as board resolution or other corroborative material), and the settled law that quashing should be sparingly exercised where the complaint, read as a whole, lays a factual foundation under Section 141, the petitioner's material does not meet the threshold of sterling or unimpeachable evidence required to quash the process. Reliance on precedents distinguishing cases where resignation and its communication were clearly established was considered but found factually different. On these grounds the High Court declined to quash the summoning orders or set aside the Magistrate's orders rejecting discharge. [Paras 16, 18, 19]

Petitions seeking quashing of the summoning orders and setting aside discharge orders are dismissed.

Resignation and its effect on criminal liability of a director - Dishonour of cheque liability under Section 138 of the Negotiable Instruments Act - Power to quash criminal process under inherent jurisdiction of the High Court - Contentions regarding the date/effectiveness of petitioner's resignation and his alleged role in commission of the offence are to be decided by the trial court and not finally adjudicated at this stage. - HELD THAT: - The High Court observed that, because of the closeness in time between the alleged resignation, the issuance and presentation of cheques and their dishonour, and the absence of undisputed documentary proof demonstrating the effective acceptance and communication of resignation to the company and registrar, it cannot conclusively determine the factual question of when the petitioner ceased to be in charge or whether he was involved in the offence. Therefore, the Court left these disputed factual/contentious legal questions open for adjudication by the learned Trial Court at the appropriate stage and directed that such contentions be raised and decided as per law. [Paras 16, 20, 21]

Matters concerning resignation date/effect and petitioner's role remitted to the trial court for determination in accordance with law.

Final Conclusion: The petitions under Sections 482/483 Cr.P.C. seeking quashing of summoning orders and discharge orders are dismissed; disputed factual questions concerning the petitioner's resignation and role in the alleged offence are left open and directed to be raised and decided by the trial court in accordance with law.