TaxTMI Updates e-Newsletter
Sep 02,2026

Writ jurisdiction after expiry of statutory appellate limitation - Condonation beyond statutorily prescribed period for GST appeal

Writ jurisdiction after expiry of statutory appellate limitation - Maintainability of a writ challenge to a GST demand order where the statutory appeal was rejected as time-barred and the writ petition was filed after unexplained delay - HELD THAT: - The statutory appellate remedy and its prescribed limitation form part of the legislative scheme for expeditious redressal. Though writ jurisdiction may be invoked in exceptional cases involving breach of fundamental rights, violation of natural justice, excess of jurisdiction or challenge to vires, it cannot be used as a matter of course to bypass an expired statutory remedy. The unexplained delay of almost three years in approaching the Court would frustrate the legislative intent and render the limitation scheme otiose. [Paras 9, 12]

The writ petition was held not entertainable and was dismissed.

Condonation beyond statutorily prescribed period for GST appeal - Power of the High Court under Article 226 to condone delay in filing a GST appeal beyond the further period permitted to the appellate authority - HELD THAT: - Provision of Section 162 bars the jurisdiction of civil Court in reference to Section 107 of the BGST Act and legislature in its wisdom has restricted a limit of 30 days to Appellate Authority under Section 107(4), three months to Appellate Tribunal for filing appeal/45 days for filing memorandum of cross-objection under Section 112(6) and the High Court in exercise of its Appellate jurisdiction under Section 117(2) proviso of this BGST Act 2017, for condonation of delay in filing of an application before respective Forum.

Therefore, the condonation of delay by this Court in exercise of power under Article 226 of Constitution of India in filing of appeal under Section 107 of BGST Act 2017 in our opinion, will be against the legislative intent manifested in the provision of BGST Act 2017. It is true that High Court has wide jurisdiction under Article 226 of constitution of India but does not mean that it can disregard the substantive provision of a Statute. Accordingly, we come to the conclusion that this Court can't entertain the present writ application filed after expiry of prescribed time limit. [Paras 10, 12]

The High Court held that it could not condone delay beyond the statutory limit for filing the appeal.

Final Conclusion: The writ petition was dismissed as it sought to bypass the prescribed appellate limitation after gross and unexplained delay.

Opportunity of hearing before cancellation of GST registration - Cancellation of GST registration for non-filing of returns where the personal-hearing date preceded the expiry of the period allowed for filing the show-cause reply

HELD THAT: - Section 75(4) requires a hearing when an adverse decision is contemplated. Where the notice allowed 30 days for submission of a show-cause reply, fixing the hearing before expiry of that period was held to be an empty formality. Since the pending returns had been furnished and the tax, late fee and penalty paid, and permanent cancellation could affect the taxpayer's livelihood, the Court followed M/s Galaxy Heights [2026 (8) TMI 844 - PATNA HIGH COURT] in permitting recourse to revocation. [Paras 12, 14, 15, 16]

The appellate order was set aside; the petitioner was permitted to apply for revocation of cancellation, which the competent authority must decide on merits without rejecting it on limitation alone.

Final Conclusion: The writ application was allowed to the extent that the appellate order was set aside and the petitioner was afforded an opportunity to seek revocation of the cancelled GST registration on merits.

Omission of export-refund restriction without saving clause - Applicability of omitted Rule 96(10) of the CGST Rules to pending proceedings concerning refund of integrated tax paid on exported goods and services

HELD THAT: - Applying the Supreme Court decision in Goodluck India Limited and Anr. vs. Union of India and Ors [2026 (8) TMI 719 - SUPREME COURT] the Court held that omission of Rule 96(10), without a saving or sunset clause, was intended to end the unnecessary complications arising from that restriction and could not keep it alive in pending proceedings. [Paras 5, 6]

The impugned communication founded on Rule 96(10) was quashed and set aside, and the writ petition was allowed.

Final Conclusion: The writ petition was allowed and the impugned communication was quashed, as omitted Rule 96(10) could not govern the pending refund proceedings in the absence of a saving or sunset clause.

Entitlment to regular bail in proceedings alleging fraudulent issuance of invoices, wrongful availment of input tax credit, falsification of records, and operation of shell entities under the Central Goods and Services Tax Act, 2017.

HELD THAT:- From a conjoint reading of sections 69 and 132 of the CGST Act, 2017, it is clear that there must be a reason to believe of tax evasion or the conditions specified in Section 132 for the arrest of such a person under the act and such reason to believe was not mentioned in the authorization of arrest and arrest memo.

The monetary limit which is specified in section 132 regarding period of conviction as per amount of tax evasion but has not been specified in the arrest memo. It means that the arrest of petitioner is merely on the basis of suspicion and there is nothing concrete in this case.

This court is inclined to enlarge the petitioner on bail. The above named petitioner is directed to be released on bail in connection with Complaint Case on furnishing bail bond of Rs.10,000/- (ten thousand) with two sureties of the like amount each to the satisfaction of learned Special Judge, Economic Offence, Patna/ Concern Court, Patna.

Writ jurisdiction - disputed questions of fact - Statutory appellate remedy against consolidated GST order - Exercise of writ jurisdiction against a consolidated GST adjudication order where the petitioners asserted non-consideration of their replies and absence of involvement in the alleged transactions

HELD THAT: - Petitioners, relying upon judgment in M/s. ASP Traders v. State of Uttar Pradesh & Ors. [2025 (7) TMI 1525 - SUPREME COURT] submitted that the principles of natural justice mandate that, where a taxpayer submits a response to an SCN, the Adjudicating Authority is required to consider such response and render a reasoned and speaking order. It is contended that failure to do so renders the statutory right of appeal illusory or nugatory, but said decision is clearly distinguishable on facts, as it concerned an order passed against an individual assessee and did not deal with a common order passed against more than 600 firms and individuals.

Whether the Replies submitted by the present Petitioners were duly considered, as also the precise role attributable to them in the transactions in question, are matters which can appropriately be examined by the Appellate Authority.

In a case of the present nature, where detailed and disputed questions of fact are required to be examined and adjudicated, exercise of writ jurisdiction, thereby permitting the Petitioners to bypass the efficacious statutory remedy of appeal, would not be appropriate.

A perusal of the Impugned Order-in-Original also shows that statements of various persons were recorded and the accounts, invoices and transactions of various firms were examined. The Adjudicating Authority has recorded a finding that Sh. Vikrant Singhal and Sh. Sachin Singhal, along with others, were the masterminds behind the alleged racket involving creation of 107 fake firms for availing ineligible input tax credit.

This Court is not inclined to exercise our writ jurisdiction. The Petitioners are, accordingly, relegated to the statutory remedy of appeal.[Paras 10, 11, 12, 14]

The petitioners were relegated to the statutory remedy of appeal, and the writ petitions were disposed of.

Final Conclusion: Declining to exercise writ jurisdiction in view of the available statutory appeal and the disputed factual questions, the Court disposed of the writ petitions by relegating the petitioners to the appellate remedy.

Blocking of electronic credit ledger under Rule 86A - Mandatory preconditions for restriction of input tax credit - Reasons recorded in writing for restriction of input tax credit

Blocking of input tax credit in the electronic credit ledger without compliance with the mandatory requirements of Rule 86A of the Central Goods and Services Tax Rules, 2017 - HELD THAT: - Rule 86A permits restriction on debit of input tax credit only upon fulfilment of its prescribed conditions, including reasons to believe and reasons recorded in writing. The respondents were unable to establish compliance with those mandatory requirements before blocking the credit ledger. [Paras 8]

Since the ledger had become operational upon expiry of the statutory period, the writ petition was disposed of as an exceptional case on acceptance of the unconditional apology, with a categorical warning that future non-compliant blocking would entail liability to pay appropriate compensation to the aggrieved party.

Final Conclusion: The Court found the impugned blocking to have been effected without compliance with Rule 86A, but disposed of the petition because the electronic credit ledger stood reactivated, while warning of compensation for any future breach.

Condonation of delay in GST appeal due to accountant's medical incapacity - HELD THAT: - Having regard to the medical records concerning the accountant's serious ailment and surgery, the factual assertions raised against the original order, and the decisions noted by the Court, it was expedient in the peculiar facts to permit the petitioner to pursue the statutory appeal. The merits of the input tax credit dispute were not adjudicated. [Paras 5]

The appellate order dismissing the appeal as time-barred was set aside, the delay was condoned, and the appeal was restored for adjudication in accordance with law, with all merits contentions kept open.

Final Conclusion: The writ petition was partly allowed by setting aside the dismissal of the statutory appeal on limitation and condoning the delay. The appellate authority was directed to decide the appeal on merits in accordance with law.

Cancellation of GST registration - delayed appeal - Restoration of GST registration - Cancellation of GST registration and rejection of the statutory appeal as time-barred, where revival of registration was sought through writ jurisdiction - HELD THAT: - Following the view in a decision on similar facts in Rohit Enterprises [2023 (2) TMI 759 - BOMBAY HIGH COURT], subsequently followed in Shri Ganesh Majoor Sahkari Sanstha Limited [2024 (12) TMI 579 - BOMBAY HIGH COURT] the Court held that the writ petition deserved to be allowed notwithstanding the delay in the statutory appeal. The registration was restored subject to filing up-to-date GST returns and payment of pending dues with applicable interest, penalty and late fees. [Paras 6, 8, 9]

The cancellation order and the appellate order were quashed, and the GST registration was restored subject to the stipulated compliance.

Final Conclusion: The writ petition was allowed, the cancellation and appellate orders were quashed, and the registration was restored subject to statutory compliance.

GST on penalty recovered from employee for stock shortage - Employer-employee relationship constituting supply of service or not?

Whether the provisions of the GST Act authorise the appellants to collect GST on the penalty imposed upon the employee for the shortage of stock? - HELD THAT: - The obligation contemplated by paragraph 5(e) of Schedule II to the Central Goods and Services Tax Act, 2017 concerns an agreement in the context of a supply of services. A penalty imposed upon an employee for alleged stock shortage arises from the employer-employee relationship and cannot, merely on that basis, be treated as consideration for a supply of service. [Paras 7, 8, 9]

The provision could not be invoked to collect GST on the penalty; the order directing a de novo enquiry on such collection was sustained and the intra-court appeal was dismissed.

Final Conclusion: The intra-court appeal was dismissed, the Court holding that GST could not be collected merely because a penalty had been imposed on an employee for stock shortage.

Consolidated show-cause notice covering multiple financial years - Appellate hearing on merits - Principles of natural justice

Maintainability of a common show-cause notice covering multiple financial years under the CGST and SGST enactments - HELD THAT: - The Court held that proceedings under Sections 73 and 74 do not prohibit a common or consolidated show-cause notice covering multiple financial years. The quashing of the notice and consequential orders solely on the ground that tax periods could not be clubbed was therefore unsustainable. [Paras 9]

The common show-cause notice was held maintainable in respect of multiple financial years.

Appellate hearing on merits - Violation of principles of natural justice - Validity of the appellate order where the hearing was confined to condonation of delay and no opportunity was afforded on the merits of the appeal - HELD THAT: - The record of personal hearing established that the respondents sought condonation of delay and admission of the appeal for a hearing on merits, but the appellate authority heard only the delay question and passed the appellate order without hearing the appeal on merits. The order was consequently held to violate the principles of natural justice. [Paras 8, 9]

The appellate order was set aside and the appellate authority was directed to afford a hearing on merits and pass an appropriate order.

Final Conclusion: The revenue appeal was allowed to the extent of holding the consolidated show-cause notice maintainable. The appellate order was set aside for breach of natural justice and the appeal was remitted for a hearing on merits.

Writ jurisdiction where statutory appellate remedy is not availed - Delay beyond statutory period of appeal - Maintainability of a writ petition challenging cancellation of GST registration after expiry of the statutory period for appeal without exceptional circumstances - HELD THAT: - The petitioner had not availed the statutory remedy of appeal and approached the Court after expiry of the prescribed appellate limitation.

Following M K Traders Vrs. State of Bihar & Ors [2026 (9) TMI 78 - PATNA HIGH COURT] the Court held that a writ petition filed beyond the statutory period for appeal, in the absence of exceptional circumstances, ought not to be entertained. [Paras 8]

The Court declined to exercise writ jurisdiction and dismissed the writ petition, while leaving the petitioner at liberty to file the final return and seek fresh registration in accordance with law.

Final Conclusion: The writ petition challenging cancellation of GST registration was dismissed for non-availment of the statutory appeal within time and absence of exceptional circumstances. Liberty was reserved to file the final return and apply for fresh registration in accordance with law.

Service-tax demand order - Fresh adjudication on relevant contractual material - Reconsideration of the service-tax demand after production of the relevant work contracts and agreements - HELD THAT: - As the relevant contracts and agreements had been brought on record and the Department agreed to fresh consideration on the entire material, the impugned adjudication could not stand without reconsideration of those materials. The merits of the claimed exemption were not adjudicated. [Paras 16]

The demand order and consequential penalties were set aside and the matter was remitted for fresh adjudication on the materials on record, with liberty to call for further relevant documents and after affording an opportunity of hearing.

Final Conclusion: The writ application was allowed to the extent of setting aside the impugned service-tax adjudication and remitting the matter for fresh consideration on the relevant materials after hearing the petitioner.

Adjudication beyond show-cause notice - Mandatory limitation on confirmation of demand

Validity of confirmation of tax demand and penalty exceeding those proposed in the show-cause notice - HELD THAT: - Section 75(7) mandatorily prohibits the adjudicating authority from confirming a demand exceeding that proposed in the show-cause notice. The adjudication order, having confirmed penalty far in excess of the proposed penalty, was consequently without jurisdiction. [Paras 2, 3, 4]

The adjudication order was set aside and the matter was remitted for fresh adjudication after affording opportunity of hearing to the petitioner.

Final Conclusion: The writ petition was disposed of by setting aside the adjudication order and remitting the matter for a fresh order in accordance with law.

Parallel GST proceedings on the same issues - Validity of State GST assessment and rectification orders concerning issues already adjudicated by the Central GST authorities for the same assessment period - HELD THAT: - On comparison, the Court found that both sets of orders concerned the same issues and the same assessment period. Since the Central GST authorities had issued the earlier order and the appeal therefrom was pending before the appellate authority, the subsequent State GST proceedings could not be sustained. [Paras 4]

The State GST assessment and rectification orders were quashed.

Final Conclusion: The writ petition was allowed and the impugned assessment and rectification orders were quashed.

Premature assessment before expiry of annual-return due date - Authority of the Proper Officer to determine tax liability before expiry of the due date for filing the annual return for the financial year concerned

HELD THAT: - As the statutory due date for filing the annual return had not expired when the tax-liability order was made, the Proper Officer lacked authority to assess the petitioner under Section 73(9) at that stage. [Paras 5, 6]

The assessment order was set aside and the matter remanded for fresh assessment proceedings after proper notice and opportunity of hearing, to be completed in accordance with law.

Final Conclusion: The writ application was allowed to the extent that the premature assessment order was set aside and fresh assessment proceedings were directed.

Demand arising from denial of exemption for non-filing of Form 10-B - Pending rectification application - Premature writ adjudication

Adjudication of the challenge to the demand founded on non-filing of Audit Report in Form 10-B while the rectification application remained undisposed of - HELD THAT: - Since the rectification application had admittedly not been disposed of on merits, adjudication of the writ petition at that stage was held to be improper. The competent authority was required to take the application on board and decide it by a written order in accordance with the rectification provisions and on its own merits. [Paras 10]

The writ petition was disposed of by directing submission and acknowledgement of hard copies of the Audit Report and rectification application, followed by their consideration on merits; the demand was made subject to the decision on rectification.

Final Conclusion: The Court left all merits open and directed disposal of the pending rectification application in accordance with law. The impugned demand was directed to abide by that decision.

Revisional jurisdiction to correct an assessee's error in return - charitable trust that inadvertently omitted to claim capital-gains exemption on reinvestment of sale proceeds in fixed deposits

Revisional jurisdiction to correct an assessee's error in return - Whether a charitable trust that inadvertently omitted to claim capital-gains exemption on reinvestment of sale proceeds in fixed deposits could obtain relief in revision u/s 264? - HELD THAT: - The revisional power extends to a claim for relief omitted in the return where the assessee discovers an error resulting in over-assessment after completion of assessment. The fact that the income was voluntarily shown as taxable does not preclude consideration of the claim; the revisional authority must apply its mind to the assessee's entitlement under law. The trust had disclosed the capital gains and supporting particulars and had not suppressed any material. [Paras 12, 13, 16]

The rejection of the revision application was unsustainable and was quashed.

Capital gains exemption on reinvestment by charitable trust - Fixed deposit as acquisition of another capital asset - Entitlement of a charitable trust to exemption of capital gains on sale of trust property where the sale proceeds were invested in a bank fixed deposit - HELD THAT: - Under Instruction No. 883, investment of the net consideration from transfer of a trust-held capital asset in a bank fixed deposit for six months or more is regarded as acquisition of another capital asset for purposes of capital-gains exemption. The statutory provision governing such exemption is standalone and alleged non-compliance with conditions imposed under the public-trust law could not be imported to deny it. Since the sale proceeds were invested in a fixed deposit for two years, the trust satisfied the requirement for exemption. [Paras 14, 16]

The trust was held entitled to the claimed exemption, with consequential refund of excess tax together with applicable interest.

Final Conclusion: The writ petition was allowed, the order rejecting revision was quashed, and the trust was held entitled to capital-gains exemption with consequential refund and applicable interest.

Validity of a transfer-pricing order determining the arm's length price without service of the statutory show-cause notice - denial of Principles of Natural Justice - no Opportunity of Hearing

HELD THAT: - A Transfer Pricing Officer determining the arm's length price under section 92CA(3) is required to follow the procedure prescribed by section 92C(3), including the proviso mandating service of a show-cause notice and an opportunity of hearing. Notices under section 92CA(2) calling for information cannot substitute the statutory show-cause notice contemplated by the proviso to section 92C(3). Since the show-cause notice was admittedly not served, the petitioner had no opportunity to respond before determination of the arm's length price. [Paras 11, 12]

The transfer-pricing order was held bad in law and set aside; the matter was remanded to the Transfer Pricing Officer from the stage of issuance of the statutory show-cause notice, with a direction to afford the petitioner a personal hearing.

Final Conclusion: The writ petition was allowed by setting aside the impugned transfer-pricing order and remanding the matter for fresh determination after service of the statutory show-cause notice and grant of hearing.

Rejection of the revision application for want of proof of the petitioner's status as legal heir - Non considering the documents furnished by legal heir - HELD THAT: - The revision order had been passed without taking into account the documents and details furnished by the petitioner in response to the request for proof of her legal-heir status. The Revenue fairly conceded that the application required reconsideration after the petitioner was brought on record as the legal heir. The Court made no determination on the merits of the assessment or the revision application. [Paras 6, 7, 8, 10, 11]

The revision order was set aside. The Assessing Officer was directed to examine the documents for bringing the petitioner on record as legal heir, following which the revision application shall be decided afresh on merits after personal hearing. Pending that decision and for four weeks thereafter, the ex parte reassessment order and consequential penal actions were stayed.

Final Conclusion: The writ petition was disposed of by setting aside the rejection of the revision application and directing its de novo consideration after verification of the petitioner's legal-heir status. The merits of the reassessment were left open.

Validity of Reassessment - subsistence of reasons to believe - Reassessment founded on subsequent assessment orders

Validity of reassessment initiated on the basis of additions and disallowances made in subsequent assessment years, where the appellate orders for those years had deleted or decided in favour of the assessee the very issues forming the basis of reopening - HELD THAT: - The proposed reassessment rested upon six issues examined in the assessments for subsequent years. The appellate orders for those years had resulted in none of those issues surviving against the assessee. Consequently, even if the subsequent assessment orders initially constituted material for reopening, the foundation of the belief that income had escaped assessment had ceased to exist. The Revenue's non-acceptance of the Tribunal's orders was immaterial while those orders continued to operate. [Paras 16, 17, 18]

The notice for reassessment and the order rejecting objections were quashed; however, the petition would stand revived if the Revenue succeeds in its appeals on any issue forming the basis of the reassessment.

Final Conclusion: The reassessment notice and the order rejecting objections were quashed because the appellate orders for the subsequent years had removed the foundation for reopening. The other challenges to reassessment were left open, subject to revival of the petition if the Revenue succeeds in its pending appeals.

Validity of Reassessment - reason to believe - live nexus with material - Reassessment on account of delayed deposit of employees' PF and ESIC contributions - law prevailing on notice date

Reassessment - reason to believe - live nexus with material - Validity of reassessment founded on the alleged non-genuineness of foreign investment in the assessee's share capital and share premium. - HELD THAT: - Material relied upon for reopening must have a rational connection and live link with the belief of escapement of income; a reason to suspect is insufficient. The statements relied upon did not refer, directly or indirectly, to the assessee or to the investment transaction. The survey report and statements, founded on allegations concerning the investor's representative and unsupported assumptions about the transaction, did not establish any nexus with escapement of the assessee's income. [Paras 21, 26, 27, 28, 32]

The first ground for reopening was held wholly unsustainable.

Validity of reassessment for alleged delayed deposit of employees' contributions to provident fund and employee state insurance fund - HELD THAT: - When the reassessment notice was issued, the prevailing law permitted deduction where the employees' contributions were deposited by the due date for filing the return of income. As the deposits were made within that time, the Assessing Officer could not have formed a reason to believe that income had escaped assessment. A later Supreme Court ruling in Checkmate Services P. Ltd. [2022 (10) TMI 617 - SUPREME COURT (LB)] taking a contrary view could not validate the reason recorded under the law then in force. [Paras 33, 34]

The second ground for reopening was also held unsustainable.

Final Conclusion: The reassessment notice for A. Y. 2016-17 was quashed, as neither recorded ground disclosed a legally sustainable reason to believe that income had escaped assessment.

Draft assessment order - absence of final assessment - Eligible assessee under draft assessment procedure

Validity of the demand and penalty initiation founded on an assessment order expressly issued as a draft order, without final determination of the sum payable - HELD THAT: - The order repeatedly described the proposed disallowance as a proposal, expressly stated that no demand or penalty notice was being issued, and preserved the assessee's right to accept the variations or object to them before a final assessment. A demand can be raised only after a final assessment determines the sum payable. The purported error could not be treated as a mere uploading mistake or cured under Section 292B, particularly when no subsequent order acknowledging and correcting or clarifying the error was passed. [Paras 14, 15, 16, 17, 18]

The demand notice and the notice initiating penalty proceedings, founded on the draft order without a final assessment, were unsustainable and were set aside.

Eligible assessee for draft assessment procedure - No transfer-pricing variation - Competence to issue a draft assessment order where the Transfer Pricing Officer made no variation in the assessee's returned income from international transactions - HELD THAT: - As no variation was made by the Transfer Pricing Officer in respect of the international transactions, the assessee was not an eligible assessee for the draft-assessment procedure. Consequently, there was no occasion to issue a draft order under Section 144C. [Paras 19, 20, 21, 22]

The draft assessment order was independently invalid and was set aside.

Final Conclusion: The petition was allowed, and the draft assessment order together with the consequential demand notice and penalty-initiation notice was set aside.

Unsigned statutory sanction for reassessment - Jurisdictional requirement of signed approval - Authentication of electronic approval

Validity of reassessment initiated on the basis of an unsigned approval under the statutory sanction requirement - HELD THAT: - Sanction of the prescribed authority is a jurisdictional pre-condition for issuance of a reassessment notice and is a statutory safeguard against arbitrary reopening. An approval constitutes an "other document" requiring signature under the authentication provision; the approving authority must record its satisfaction after considering the recorded reasons and material under its signature. A DIN, electronic transmission, or printing of the officer's name and designation may establish authenticity but cannot dispense with the mandatory requirement of a manual or digital signature. The curative provision invoked by the Department was inapplicable, having come into force after the approval in question. [Paras 18, 19, 20, 22, 23]

The unsigned approval was invalid and did not confer jurisdiction to issue the reassessment notice; the notice, the order disposing of objections, and consequential reassessment notices were quashed.

Final Conclusion: The writ petition was allowed. The unsigned statutory approval invalidated the assumption of reassessment jurisdiction, and the impugned reassessment proceedings and consequential notices were quashed.

Reassessment notice issued to deceased assessee - Participation in assessment proceedings by legal representative -

HELD THAT: - A reassessment notice issued to a deceased person is invalid unless the legal representative submits to the Assessing Officer's jurisdiction without objection. The legal representative's communications informing the authority of the assessee's death and disputing the validity of the notice did not amount to participation in the assessment proceedings. The contention that proceedings could be sustained under the provisions governing assessment of a deceased person was therefore not accepted. [Paras 5, 7]

The reassessment notice, consequential order rejecting objections, assessment order and demand notice were quashed; liberty was reserved to re-initiate proceedings against the legal representative if permissible in accordance with law.

Final Conclusion: The petition was allowed and the reassessment proceedings initiated against the deceased assessee were quashed, subject to the respondent's liberty to proceed against the legal representative in accordance with law.

Income-tax exemption on land acquisition compensation - Capital gains erroneously disclosed in return - Income-tax liability on capital gains disclosed from compensation received under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 - HELD THAT: - Section 96 exempts from income tax an award or agreement made under the land acquisition statute, except as specified therein. As the capital gain represented compensation received pursuant to acquisition proceedings under that statute, its disclosure in the return and the finalisation of processing under the Income-tax Act did not preclude consideration of the statutory exemption. [Paras 8, 9]

The intimation was set aside, and the jurisdictional assessing authority was directed to reconsider the matter in accordance with Section 96 and the applicable principles after affording an opportunity of hearing.

Final Conclusion: The writ petition was disposed of by setting aside the intimation and directing fresh consideration of the claimed statutory exemption.

TP adjustment for payments towards intra-group management, sales and support services - determining their arm's length price at nil - HELD THAT: - Having regard to the material facts and the co-ordinate Bench judgment [2024 (12) TMI 1566 - ITAT DELHI] placed before it, the Tribunal held that the entire transfer-pricing adjustment made in respect of the intra-group services merited deletion. [Paras 11]

The transfer-pricing adjustment was deleted and the corresponding grounds were allowed.

Final Conclusion: The appeal was allowed by deleting the transfer-pricing adjustment for intra-group services. The remaining grounds were left open.

Transfer pricing adjustment - consideration of segmental analysis - Determination of arm's length price without separate consideration of the assessee's segmental break-up of income and expenses

HELD THAT: - The Tribunal found that the segmental analysis was specifically in issue and that the DRP had failed to consider the segmental break-up of income and expenses while disposing of the objections. A fresh segmental analysis was therefore required in accordance with law after granting the assessee an opportunity of hearing. [Paras 6, 7]

The final assessment order was set aside and the matter was restored to the TPO for redoing the segmental analysis separately after affording fresh opportunity of hearing.

Final Conclusion: The appeal was allowed for statistical purposes by setting aside the assessment and remanding the transfer-pricing issue for fresh segmental analysis.

COVID-19 adjustment in transfer-pricing benchmarking - Consistent treatment of operating items under TNMM - Internal CUP for software support services - Limitation for final assessment following DRP directions

COVID-19 adjustment in transfer-pricing benchmarking - Consistent treatment of operating items under TNMM - Transfer-pricing adjustment for preparation of US tax returns and secondment services based on COVID-19-related costs and inconsistent treatment of operating items - HELD THAT: - A pandemic-related adjustment cannot be allowed merely because the relevant period fell during COVID-19. The assessee must identify exceptional expenditure actually incurred on account of the pandemic, establish that it was not a normal operating cost, and show that the corresponding cost or economic impact was absent from or materially different in the comparables. Further, a reliable TNMM comparison requires uniform classification of operating and non-operating items for the tested party and comparables. Foreign-exchange fluctuation arising from revenue transactions ordinarily has nexus with operating activity, and depreciation is operating cost where related to assets used in that activity; in either event, parity of treatment is essential. [Paras 8, 9, 10, 11]

The adjustment was restored to the Assessing Officer/TPO for verification of the COVID-19 claim, foreign-exchange items and depreciation, followed by recomputation on a consistent basis or reconsideration of affected comparables where reliable data or adjustment is unavailable.

Selection of MAM - Internal CUP for software support services - Selection of the most appropriate transfer-pricing method - Transfer-pricing adjustment for software support services after rejection of the internal CUP and adoption of TNMM - HELD THAT: - An internal CUP is a direct benchmark where controlled and uncontrolled transactions are sufficiently comparable and reasonably accurate adjustments can be made for material differences. General similarity in services is insufficient: contractual scope, functions, assets, risks, employee skill and deployment, volume, duration, market and business circumstances require examination. A difference in employee cost is relevant but does not, by itself, establish price incomparability. Rejection of CUP requires examination of the agreements, invoices and actual services; if CUP is unreliable, adoption of TNMM must be supported by a reasoned determination of the most appropriate method and comparison of like profit level indicators. [Paras 12, 13, 14]

The adjustment was set aside and remanded to the Assessing Officer/TPO for transaction-wise examination and fresh benchmarking, with internal CUP to be applied if comparability and reliable adjustments are established.

Limitation for final assessment following DRP directions - Limitation for passing the final assessment order where the draft assessment order was forwarded within the general assessment period - HELD THAT: - Where a draft assessment order is forwarded within the period prescribed for assessment, the time for passing the final order upon receipt of DRP directions is governed by the time limits applicable to the DRP procedure, notwithstanding expiry of the general assessment period. Since the draft order was forwarded within the prescribed period and the final order was passed within one month from the end of the month in which the DRP directions were received, the final order was timely. [Paras 17]

The challenge to the final assessment order as barred by limitation was rejected.

Final Conclusion: The transfer-pricing adjustments were remanded for fresh examination and benchmarking. The limitation challenge failed, and the appeal was partly allowed for statistical purposes.

Limitation for final assessment pursuant to DRP directions - Operating margin computation for ITeS services - Functional comparability of ITeS service providers - Outstanding trade receivables under TNMM benchmarking

Limitation for final assessment pursuant to DRP directions - Validity of the final assessment order on the ground of limitation. - HELD THAT: - The retrospective insertion of sub-section (13A) in section 144C by the Finance Act, 2026 rendered the final assessment order within the limitation period prescribed under the Act. [Paras 6]

The challenge to the final assessment order as time-barred was rejected.

Treatment of the cost-to-cost recovery from associated enterprises of withholding tax paid in respect of restricted stock units while computing the assessee's operating margin - HELD THAT: - The recovery represented withholding tax payable by the associated enterprises, which the assessee paid and recovered on a cost-to-cost basis. Since it had no connection with the ITeS rendered by the assessee, it was non-operating in nature and had to be excluded in computing the assessee's profit level indicator. [Paras 17]

The recovery was directed to be excluded from the computation of the assessee's operating margin.

Functional comparability of ITeS service providers - Functional comparability of selected companies for benchmarking the assessee's technical ITeS transaction with associated enterprises - HELD THAT: - The assessee rendered diverse technical services, including documentation support, medical writing, statistical analysis, data processing, commercial analytics, regulatory support, and finance and supply-chain reporting. Companies engaged in voice-based call-centre services, information technology services, BPO services including voice support and technical helpdesk, and intellectual-property consultancy were not functionally comparable to those activities. However, a company providing knowledge-processing services such as patent analysis, technical editing and deep indexing of scientific and technical research papers performed functions similar to those of the assessee and remained comparable. [Paras 26, 29, 32, 35, 36]

Tech Mahindra Business Services Ltd., Sutherland Global Services Pvt. Ltd., TTEC India Customer Solutions Pvt. Ltd. and Sagacious Research Pvt. Ltd. were directed to be excluded, while Domex E-Data Pvt. Ltd. was retained as a comparable.

Outstanding trade receivables under TNMM benchmarking - Working capital adjustment - Whether notional interest on delayed trade receivables from associated enterprises warranted a separate transfer-pricing adjustment? - HELD THAT: - Deferred payment or receivables fall within the definition of an international transaction. However, the receivables arose only from the ITeS transaction and were closely linked to that principal transaction, requiring a combined-transaction approach. Under TNMM, the effect of receivables is reflected in working capital and profitability; therefore, after granting a working capital adjustment, no separate notional-interest adjustment on delayed receivables survives. [Paras 39, 40, 41]

The Assessing Officer and Transfer Pricing Officer were directed to grant working capital adjustment for the ITeS transaction, and the separate adjustment for notional interest on delayed receivables was held unwarranted.

Final Conclusion: The appeal was partly allowed. The limitation challenge was rejected, while relief was granted in relation to operating-margin computation, certain ITeS comparables, and the separate adjustment for delayed receivables.

Determining the arm's length margin of the assessee under the TNMM - adjustment in respect of abnormal idle costs arising on account of COVID-19- induced underutilisation of the assessee's manpower and infrastructure - Reasonably accurate comparability adjustments under Rule 10B(3)

Whether abnormal idle costs arising from COVID-19-induced underutilisation of a captive service provider's manpower and infrastructure required a capacity-utilisation adjustment while determining its arm's length margin under TNMM? - HELD THAT: - Rule 10B(3) requires reasonably accurate adjustments to neutralise material differences affecting profitability; it does not require mathematically exact adjustment or public availability of identical capacity-utilisation data of comparable companies. Extraordinary underutilisation, causing fixed employee and infrastructure costs to be spread over reduced activity, was a material economic difference. As the abnormal idle costs and their basis were furnished and were not found to be non-genuine, non-business-related, or incorrectly computed, their adjustment could not be rejected merely because comparable-company data was unavailable. [Paras 13, 14, 15, 16, 17]

The abnormal idle costs attributable to extraordinary COVID-19-induced underutilisation were required to be neutralised; the adjusted margin exceeded the comparable median margin, the international transaction was at arm's length, and the transfer-pricing adjustment was deleted.

Final Conclusion: The appeal was allowed. The transfer-pricing adjustment arising from denial of the capacity-utilisation adjustment was deleted.

Penalty for import undervaluation - Penalty for false import declarations

Penalty for improper importation - Undervaluation of imported goods - Penalty on the proprietor for improper importation arising from admitted undervaluation of imported goods - HELD THAT: - The admitted undervaluation rendered the imported goods liable to confiscation, thereby establishing the basis for penalty for improper importation. [Paras 4]

The penalty for improper importation was upheld.

Penalty for false import declarations - Concurrent customs penalties - Penalty for use of false or incorrect material in import transactions and its imposition in addition to penalty for improper importation - HELD THAT: - The penalty provision for knowingly or intentionally using a materially false or incorrect declaration or document applies to transactions under the Customs Act and is not confined to exports. The false invoices reflecting undervalued import declarations justified its invocation. However, the fact that the proprietor had already suffered penalty for improper importation warranted reduction of the additional penalty. [Paras 4]

The penalty for false import declarations was sustained but reduced.

Final Conclusion: The appeal was partially allowed only to the extent of reducing the penalty for false import declarations; the remaining impugned order was upheld.

Transaction value of related-party imported parts for distribution - Inclusion of royalty, technical fees and management fees in customs value

Transaction value of related-party imported parts for distribution - Residual valuation and exporter's domestic-market price - Acceptance of the declared transaction value of imported parts meant for distribution and validity of reassessment based on the exporter's Suggested List Price - HELD THAT: - Rejection of declared value requires reasonable doubt, founded on objective reasons, as to its truth or accuracy. Mere non-disclosure of the Suggested List Price did not establish that the declared transaction value or the discount was abnormal, artificial or relationship-influenced; nor did the Revenue rebut the material showing that comparable discounts were allowed in the country of export and that the discount allowed in India was commercially normal. Further, upon rejection of transaction value, valuation must proceed sequentially under the prescribed methods. The residual method cannot adopt the price of goods in the domestic market of the country of exportation, which is expressly prohibited. [Paras 28, 29, 30, 31]

The rejection of the declared transaction value and its redetermination by adopting the Suggested List Price under the residual method were held unsustainable.

Inclusion of royalty, technical fees and management fees in customs value - Condition of sale of imported goods - Inclusion of royalty, technical fees and notional management fees in the value of imported parts and components used to manufacture products in India - HELD THAT: - For loading royalty or licence fees, the payment must both relate to the imported goods and be payable as a condition of their sale. The Addendum was required to be read with the Master Agreement, its existence having been reflected in earlier proceedings, and it merely clarified the earlier arrangement. The agreements permitted procurement of parts from third parties, subject to prescribed specifications and quality standards. Royalty and technical fees were paid for technology, technical know-how and manufacture of products in India, not as a condition for sale of the imported parts. The adjudicating authority had not examined the pricing arrangement to establish an adjustment of import price through such payments. Notional management fees, discontinued during the disputed period, could not be added on assumptions. [Paras 36, 37, 38, 39, 40]

Royalty, technical assistance or know-how fees and notional management fees were not includible in the transaction value of the imported goods.

Final Conclusion: The impugned order was set aside and the appeal was allowed. The remaining questions concerning limitation, penalty, confiscation and interest were not examined as academic.

IGST rate on imported bulk drugs and active pharmaceutical ingredients - correct rate of IGST leviable for the import of bulk drugs falling under chapter 28 or 29 of the Schedule of Customs Tariff Act, 1975 - Specific description-based rate entry prevailing over general chemical entries

Whether Integrated Goods and Services Tax is leviable @5% for the import of bulk drugs in terms of SI. No. 226 of Schedule I of Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025 (hereinafter referred to as the 'IGST Rate Notification')? - HELD THAT: - The definition of "drug" under Section 3(b) of the Drugs and Cosmetics Act, 1940 is wide and inclusive in nature, and expressly covers substances intended for use as components of a drug. Active Pharmaceutical Ingredients (APIs) / bulk drugs, being pharmaceutical substances used as such or as ingredients in formulations, squarely fall within the ambit of the said definition subject to. their intended use and compliance with the applicable statutory requirements.

The expression "drugs" being undefined in the rate notification, its meaning was ascertained from the regulatory framework governing the goods. The inclusive definition under the Drugs and Cosmetics Act covers substances intended for use as components of a drug, while the Drugs (Price Control) Order treats APIs/bulk drugs as pharmaceutical substances used as such or as ingredients in formulations. The intended use of APIs for testing, clinical research or bioavailability and bioequivalence studies did not exclude them from the ambit of drugs. Sl. No. 226 is description-based, applies to goods under Chapter 30 or any Chapter, and its semicolon separates drugs and medicines from formulations manufactured from bulk drugs. It therefore covers APIs notwithstanding their chemical classification under Chapters 28 or 29. The specific entry for drugs and medicines prevails over the general entries for inorganic and organic chemicals; further, as the notification is a taxing rate notification rather than an exemption notification, ambiguity is to be resolved in favour of the taxpayer. [Paras 7]

The subject bulk drugs/APIs are eligible for IGST at 5% under Sl. No. 226 of Schedule I, provided that the particular bulk drug/API is not covered by the stated exclusions, including the goods specified at Sl. No. 113 of the nil-rate notification.

Final Conclusion: The application was answered in the affirmative. Bulk drugs/APIs satisfying the stated description are chargeable to IGST at 5%, subject to the exclusions in the applicable notifications; the alternative question did not arise.

Bulk drugs and active pharmaceutical ingredients as drugs - Specific description-based IGST rate entry prevailing over general chemical entries - IGST rate on imported bulk drugs/Active Pharmaceutical Ingredients classifiable under Chapters 28 or 29-coverage by the specific entry for "All Drugs and medicines"

Correct rate of IGST leviable for the import of bulk drugs falling under chapter 28 or 29 of the Schedule of Customs Tariff Act, 1975 - Whether Integrated Goods and Services Tax/IGST is leviable @5% for the import of bulk drugs in terms of SI. No. 226 of Schedule I of Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025 (hereinafter referred to as the 'IGST Rate Notification')?

HELD THAT: - The definition of "drug" under Section 3(b) of the Drugs and Cosmetics Act, 1940 is wide and inclusive in nature, and expressly covers substances intended for use as components of a drug. Active Pharmaceutical Ingredients (APIs) / bulk drugs, being pharmaceutical substances used as such or as ingredients in formulations, squarely fall within the ambit of the said definition subject to their intended use and compliance with the applicable statutory requirements. Bulk Drugs/APIs having the character and intended use of drugs and medicines may accordingly fall within the scope of the said entry, notwithstanding their classification under Chapter 28 or Chapter 29 of the Customs Tariff.

As neither the rate notification nor the Customs Act defines "drugs", the expression was construed with reference to the Drugs and Cosmetics Act and the Drugs (Price Control) Order. APIs, being pharmaceutical substances used as components of drugs or formulations, fall within the inclusive meaning of drugs; their import for testing, clinical research, bioavailability or bioequivalence studies does not alter that character. The entry covering "All Drugs and medicines" under Chapter 30 or any Chapter is description-based and extends beyond finished formulations under Chapter 30. The specific entry for drugs and medicines therefore prevails over the general Chapter 28 and 29 entries for inorganic and organic chemicals. The notification being a rate notification and not an exemption notification, any ambiguity was also held to be resolvable in favour of the applicant. [Paras 7]

Bulk drugs/APIs qualify as "All Drugs and medicines" under SI. No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025 and are eligible for the concessional IGST rate of 5%, provided that the particular Bulk Drug/API is not covered under the exclusion specified in the said entry, including the goods specified at SI. No. 113 of Notification No. 10/2025-Integrated Tax (Rate) dated 17.09.2025.

Final Conclusion: The application was allowed. The proposed imports of bulk drugs/APIs are eligible for IGST at 5% under the specified entry, subject to verification that the particular goods do not fall within the nil-rate exclusion.

IGST rate on imported bulk drugs and active pharmaceutical ingredients - Specific description-based rate entry prevailing over general Chapter-based entries

Whether bulk drugs or active pharmaceutical ingredients, including those imported for manufacture, testing, clinical trials, bioavailability studies or bioequivalence studies, qualify as "All Drugs and medicines" under Sl. No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate) dated 17.09.2025 and attract IGST at 5%? - HELD THAT: - The definition of "drug" under Section 3(b) of the Drugs and Cosmetics Act, 1940 is wide and inclusive in nature, and expressly covers substances intended for use as components of a drug. Active Pharmaceutical Ingredients (APIs) / bulk drugs, being pharmaceutical substances used as such or as ingredients in formulations, squarely fall within the ambit of the said definition.

The inclusive definition of "drug" under the Drugs and Cosmetics Act extends to substances intended for use as components of a drug, while the definition of bulk drug or API confirms that such substances are used as such or as ingredients in formulations. Their statutory licensing as drugs and their use for testing or clinical studies do not alter that character. The semicolon in the rate entry separates "all drugs and medicines" from formulations manufactured from bulk drugs, and the expression "Chapter 30 or any Chapter" extends coverage to APIs under Chapters 28 and 29. As the description-based entry for drugs is specific, it prevails over the general Chapter-based entries for organic and inorganic chemicals. The notification is a rate notification rather than an exemption notification. [Paras 4]

Integrated Goods and Services Tax [IGST] is leviable @5% for the import of Bulk drugs or Active Pharmaceutical ingredients (APIs) in terms of SI. No. 226 of Schedule I of Notification No. 9/2025- Integrated Tax (Rate) dated 17.09.2025, provided they are not covered under SI. No. 113 of Notification No. I 0/2025-Integrated Tax (Rate).

Final Conclusion: The application was allowed. Bulk drugs or APIs imported as drugs, including for manufacture or specified testing and clinical purposes, attract IGST at 5% under the applicable rate entry, subject to exclusion of nil-rated goods.

Summary resumption of lands claimed as assigned lands - Bona fide dispute as to Government title - Company liquidation sale of disputed land -

Whether the appellate order setting aside the Company Court's confirmation of the auction sale could be sustained on the State's unsubstantiated assertion that the auctioned lands were assigned lands liable to resume on alleged unauthorised transfers? - HELD THAT: - Applying Government of Andhra Pradesh v. Thummala Krishna Rao and Another [1982 (3) TMI 285 - SUPREME COURT] the Court held that the Government cannot unilaterally determine its title and resort to summary eviction where the person in possession asserts a bona fide claim of title. The alleged assignment was not unequivocally established; the lands were claimed under registered title deeds and revenue mutations, had remained in private and thereafter company possession for a long period, and had been taken into custody and sold under orders of the Company Court. The State neither substantiated its claim before the Company Court nor could the disputed title and alleged reversion be adjudicated in proceedings concerning liquidation and auction. The appellate court, therefore, ought not to have summarily interfered with the confirmed sale. [Paras 13, 17, 18, 19, 20]

The appellate order setting aside the auction confirmation was set aside and the Company Court's order was restored; possession was directed to be delivered to, or protected with, the auction purchaser. The writ petition and pending proceedings concerning the asserted summary resumption were left for fresh consideration on merits, with all contentions open.

Final Conclusion: The civil appeals were allowed to the extent of restoring the confirmed liquidation sale and protecting the auction purchaser's possession. The parties were left to pursue their respective claims regarding the alleged assigned lands in the proceedings pending or restored before the High Court.

Annual accounts of companies in liquidation - Exemption from filing annual or final accounts for companies in liquidation on the ground that audited half-yearly accounts had been filed - HELD THAT: - The Court held that the annual accounts could not be dispensed with merely because the accounts for both half-years had been filed. The concerned Chartered Accountant was required to merge the half-yearly accounts, since only the annual accounts would correctly disclose the financial status of the companies in liquidation. [Paras 3]

The request for exemption from filing annual or final accounts for the financial year 2024-25 was rejected.

Final Conclusion: The half-yearly accounts were taken on record and payment of the auditors' fee from the companies' available funds, or the Estate and Establishment Fund subject to reimbursement, was permitted. The applications were partly allowed, while exemption from filing annual or final accounts was refused.

Suppression of material facts in public interest litigation - Forum shopping in writ jurisdiction - Maintainability of a public interest litigation where the petitioner suppressed a prior pending writ petition seeking substantially overlapping reliefs concerning NSE shareholding

HELD THAT: - A litigant invoking the equitable and extraordinary PIL jurisdiction must approach the Court with clean hands and make complete disclosure of material facts. The mandatory disclosure of earlier PILs safeguards against parallel proceedings and conflicting adjudication.

The petitioner neither disclosed the prior Bombay writ petition nor made a truthful averment regarding earlier similar proceedings; the reliefs in both matters substantially concerned the same shareholding and beneficial ownership disclosures. Such suppression and pursuit of overlapping reliefs before different Courts constituted abuse of process and forum shopping, disentitling the petitioner to relief irrespective of the merits of the underlying allegations. [Paras 19, 20, 21, 25, 26]

The PIL was dismissed at the threshold without examination of the divestment allegations, with exemplary costs imposed to deter abuse of PIL jurisdiction.

Final Conclusion: The writ petition was dismissed for suppression of the prior substantially overlapping proceeding and forum shopping, with exemplary costs.

Intervention by homebuyers in ongoing liquidation proceedings - Stakeholders' supervision of liquidation process

Entitlement of homebuyers, represented through their association, to intervene in an ongoing corporate liquidation concerning sale of the corporate debtor's property - HELD THAT: - An association of homebuyers is not entitled to intervene before the adjudicatory authority merely in that representative capacity. The amended insolvency provisions apply to an ongoing liquidation process and confer supervisory participation in the conduct of liquidation upon stakeholders through the committee of creditors.

The members of the association, being stakeholders, may therefore seek intervention individually by a fresh application before the adjudicatory authority. [Paras 8, 9]

The writ petition was dismissed, while leaving open the members' right to file a fresh application before the National Company Law Tribunal under the amended provisions.

Final Conclusion: The association could not maintain intervention in its representative capacity, but its stakeholder-members were left free to seek intervention afresh in the ongoing liquidation under the amended insolvency framework.

Forfeiture of e-auction deposit before expiry of extended payment period - Extension of time for payment of auction consideration

Validity of forfeiture of the successful bidder's part payment before expiry of the extended period for payment of the balance auction consideration - HELD THAT: - The communication issued by the Resolution Professional permitted payment beyond the original deadline, with interest, up to 60 days thereafter; the expression "post which" made forfeiture operative only upon a continuing default after that extended period. Note 2 of the payment schedule also vested discretion to extend the payment timeline. The process memorandum could not be read to authorise forfeiture before expiry of the extension actually granted, and the regulatory scheme similarly contemplated delayed payment with interest before cancellation. Since the forfeiture was effected before the extended period expired, it was arbitrary. The subsequent sale having realised consideration for the asset, retention of the part payment would not be justified. [Paras 16, 22, 23, 24, 25]

The forfeiture was set aside to the extent of directing refund of the part payment to the successful bidder; the refund was directed without interest.

Final Conclusion: The appeal was partly allowed only in respect of refund of the forfeited part payment. The Resolution Professional was directed to refund the amount within the stipulated period, without interest.

Attachment of proceeds of crime - Effect of prior sale and mortgage on provisional attachment

Provisional attachment of properties alleged to have been acquired from proceeds of crime, notwithstanding asserted prior sales, partial sales or mortgages - HELD THAT: - The appellants admitted receipt of funds from the accused entity but produced no evidence of their business activities or of an independent source for acquisition of the attached properties. The properties were found to have been acquired out of tainted money through entities controlled by the accused. In respect of properties asserted to have been sold, the appellants had no subsisting interest and any purchaser could pursue its own remedy. The asserted mortgages did not warrant interference with attachment, while leaving any claim of the concerned financial institution open. [Paras 9, 10, 11, 12, 13]

The confirmation of the provisional attachment was sustained, including in respect of mortgaged properties, without prejudice to any subsisting right of a third party.

Final Conclusion: The appeals were disposed of without interference with the confirmed provisional attachment. Any independent right of a purchaser or financial institution, if existing, was kept open.

Declared service of tolerating an act - amounts written off as unclaimed vendor balances and other outstanding credits - Extended period of limitation - absence of positive act to evade tax

Declared service - Consideration for taxable service - Taxability of amounts written off from unclaimed vendor balances and invalid unpresented cheques as consideration for tolerating an act - HELD THAT: - A declared service requires an activity carried out by one person for another for consideration. An obligation to refrain from an act, tolerate an act or situation, or do an act must arise under an independent express or implied agreement or contract, with consideration flowing from the other contracting party for performance of that obligation. Mere accounting recognition of income upon lapse or write-back of outstanding balances, without evidence that the amounts represented consideration for a taxable service rendered by the appellant, cannot attract service tax. [Paras 5]

The written-off amounts were wrongly treated as consideration for a declared service and the service-tax demand was unsustainable.

Invocation of the extended period for demand on written-off balances - HELD THAT: - The department produced no evidence of any positive act by the appellant to evade tax; nor had the appellant reduced any taxable activity. [Paras 5]

The extended period was wrongly invoked.

Final Conclusion: The impugned order was set aside and the appeal was allowed, as the written-off balances were not consideration for any declared service and the extended period was not invocable.

Service tax under reverse charge - Consideration of material mining lease agreements - Service-tax demand on royalty paid to the Government under reverse charge where the mining lease agreements were not produced before the authorities

HELD THAT: - Determination of the taxability of the grant of mining rights required examination of the mining lease agreements, including whether the service was agreed to be provided before 01.04.2016. As those agreements had not been placed before either authority, the issue required fresh consideration in accordance with the law laid down by the Tribunal. [Paras 1, 3]

The impugned order was set aside and the matter remanded to the adjudicating authority for examination of the lease agreements and fresh decision; the merits were not adjudicated.

Final Conclusion: The appeal was allowed by way of remand for fresh determination of the service-tax liability after considering the mining lease agreements.

Excise duty and National Calamity Contingent Duty on Tobacco and Tobacco products - Finality of prior adjudication after the commencement of the GST regime - Statutory appellate remedy

Whether excise duty and National Calamity Contingent Duty continued to apply to tobacco and tobacco products after the commencement of the GST regime, and whether the saving provision preserving the Central Excise Act, 1944 was unconstitutional or the NCCD levy was impliedly repealed? - HELD THAT: - The constitutional reliefs concerning levy of excise duty on tobacco products, the saving of the Central Excise Act, 1944, and the asserted implied repeal of the NCCD levy were held to be covered by earlier proceedings that had attained finality. [Paras 7, 8]

No interference was warranted with the dismissal of the writ petition insofar as those questions were concerned.

Availability of statutory appeal against the order in original on grounds not covered by the final prior adjudication - HELD THAT: - As the writ petition had been instituted shortly after the order in original and remained pending before the Court, the appellant was permitted to pursue the statutory appellate remedy on the remaining grounds. The direction concerning limitation was confined to the peculiar facts of the case. [Paras 8, 9, 10]

If filed within four weeks of receipt of the order, the statutory appeal was directed to be taken on record without objection as to limitation; all other contentions were kept open.

Final Conclusion: The writ appeal was disposed of without interfering with the dismissal of the writ petition on questions already concluded by final prior proceedings. The appellant was relegated to the statutory appellate remedy for the remaining grounds, subject to the direction on limitation.

Penalty imposed on the assessee as majority shareholder of the holding company - HELD THAT:- On the parties' consensus, the CESTAT order was modified to remand the penalty imposed on the respondent in the capacity of majority shareholder for de novo consideration along with the remanded matters.

Refund of CENVAT credit on exported software services - Entitlement to refund of CENVAT credit in respect of exported software services which were not taxable services

Whether the respondent-assessee would be entitled for refund of CENVAT Credit though the respondent is in export of software which is not taxable service? - HELD THAT: - Following the earlier decisions of this Court [2011 (9) TMI 450 - KARNATAKA HIGH COURT], it was held that the non-taxability of exported software services did not disentitle the assessee from claiming refund of CENVAT credit. [Paras 5, 6, 7]

All the substantial questions of law were answered in favour of the assessee and against the Revenue, and the appeal was disposed of accordingly.

Final Conclusion: The Revenue's appeal was disposed of by following the earlier decisions of this Court, with all substantial questions answered in favour of the assessee.

Belated compliance with pre-deposit requirement - Restoration of appeal dismissed for non-compliance

Restoration of appeals dismissed for non-compliance with the pre-deposit condition after the entire service tax liability was recovered by the Department - HELD THAT: - Recovery of the entire service tax liability by the Department constituted sufficient compliance with the pre-deposit direction. A pre-deposit condition, though necessary for hearing an appeal on merits, cannot be used to deny the statutory right of appeal once compliance is subsequently shown. The Tribunal was required to exercise its power to secure the ends of justice and restore the appeals for adjudication on merits. [Paras 7, 8, 10]

The Tribunal's refusal to restore the appeals was held untenable; its order was quashed and the appeals were restored for decision on merits after affording hearing to the assessee.

Final Conclusion: The appeals were allowed, the Tribunal's order was quashed, and the appeals were restored to the Tribunal for disposal on merits in accordance with law.

CENVAT credit on sales commission for warranty services - Extended limitation for CENVAT credit demand

CENVAT credit on commission paid to the sole selling agent for sales promotion and warranty-related installation, commissioning and after-sales services - Input service credit for warranty obligations - Sales commission as Business Auxiliary Service - HELD THAT: - The monthly invoices classified the consideration as commission for sale of machines and spares and discharged service tax under Business Auxiliary Service. Free warranty repair and maintenance enriched the value of the goods and the service received from the selling agent was therefore an input service used in or in relation to manufacture. In the absence of evidence that the agency agreement was not transparent, the credit could not be denied even for the normal period.

As regards the issue on merit also we find that the issue was considered by the Tribunal in the matter of M/s. Radhe Renewable Energy Development Pvt. Ltd [2014 (11) TMI 578 - CESTAT AHMEDABAD] the service received by the appellant from their dealers is 'Business Auxiliary Service' which has to be treated as an input service for the appellant used in or in relation to manufacture of their final products, as free warranty repair and maintenance during warranty period, has enriched the value of the goods. [Paras 11]

The denial of CENVAT credit on the selling commission was held unsustainable.

Extended limitation for CENVAT credit demand - Absence of suppression of facts - HELD THAT: - The allegations rested on records maintained in the ordinary course of business, with no evidence of suppression from the Department. Since the appellant entertained a bona fide belief regarding credit eligibility and the dispute involved interpretation of law, invocation of the extended period was impermissible. [Paras 11]

The demand raised by invoking the extended period of limitation was held unsustainable.

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

Manufacture and deemed manufacture of unmanufactured tobacco - Marketability under Chapter Note 3 of Chapter 24 - Bulk-to-bulk packing -

Whether threshing, cleaning, sieving and sizing dried broken raw tobacco leaves, followed by bulk packing, amounts to manufacture or deemed manufacture attracting Central Excise duty? - HELD THAT: - The mechanical processes merely removed extraneous matter and segregated or standardised the size of tobacco leaves; no ingredient was added and the goods retained their essential identity as tobacco. The tobacco was already capable of being bought and sold before processing, and there was no material to show that the operations conferred marketability upon an otherwise non-marketable product. Further, there was neither labelling or relabelling nor repacking from bulk packs to retail packs; bulk-to-bulk packing did not attract the specific deeming provision. The processes consequently neither yielded a new commodity with a distinct name, character and use nor constituted treatment to render the product marketable to the consumer. [Paras 6]

The activities did not amount to manufacture or deemed manufacture under Section 2(f), and no Central Excise duty was payable merely on account of undertaking them.

Final Conclusion: The advance ruling held that the applicant's mechanical processing of dried broken tobacco leaves and their packing in bulk bags did not attract Central Excise duty.

Issuance of C-Forms for interstate purchase of Extra Neutral Alcohol - Status quo on GST treatment of Extra Neutral Alcohol - HELD THAT:- We are not inclined to interfere with the impugned judgment and order of the High Court [2026 (3) TMI 1752 - MADRAS HIGH COURT] hence, the special leave petition is dismissed.

Conditional statutory pre-deposit - further extension for making the statutory pre-deposit after expiry of the period fixed by an earlier coordinate-bench order.

HELD THAT: - The Coordinate Bench had set aside the earlier dismissal only upon the condition that the statutory pre-deposit be made within the stipulated period, and had expressly provided that the set-aside order would revive upon non-compliance.

As the deposit was made after that period, the petitioner failed to avail of the liberty granted. A separate writ petition could not be used to extend the period or require acceptance of the delayed deposit, as that would nullify the Coordinate Bench's directions [2025 (5) TMI 1812 - GAUHATI HIGH COURT]. [Paras 6, 7]

The writ petition was dismissed, without prejudice to the petitioner's right to seek review of the Coordinate Bench's order.

Final Conclusion: The challenge to dismissal of the appeal for delayed statutory pre-deposit was rejected because the conditional direction of the Coordinate Bench could not be varied in a separate writ proceeding.

Vicarious criminal liability of non-signatory Director for cheque dishonour - Specific averments under section 141 of the Negotiable Instruments Act - Responsibility for Conduct of Business

HELD THAT: - For fastening vicarious liability under section 141, the complaint must specifically aver that the person sought to be prosecuted was, at the relevant time, both in charge of and responsible to the company for the conduct of its business; such liability cannot be inferred merely from directorship. The complaint contained only general allegations against the accused and disclosed neither the petitioner's role in the day-to-day affairs or financial transactions of the company nor consent, connivance or neglect in relation to the dishonoured cheques.

In case of K. S. Mehta [2025 (3) TMI 255 - SUPREME COURT] Supreme Court reiterated principles laid down in case of Hitesh Verma [2025 (3) TMI 254 - SC ORDER] and observed that complaints lacking specific averments, that establish direct nexus between financial transactions in question on involvement of accused in company’s financial affairs, accused cannot be held vicariously liable under Section 141 of NI Act.

Director in Company cannot be deemed to be in-charge and responsible for Company for conduct of its business, unless requirement of Section 141 of NI Act is complied with and factual backdrop to make such requirement is specifically averred in complaint. In present case, averments in complaint are absolutely silent so far as role of petitioner to make out requirement under Section 141 of NI Act. In wake of fact that petitioner was neither party to agreement nor he is signatory to cheque, merely because he was appointed as additional Director at the time of presentation / dishonored of cheque, in absence of specification as to his role in Company, he cannot be prosecuted for offence under Section 138 of NI Act. Pertinently, complaint is absolutely silent as to when petitioner become Director of Company or as to what role he had in day to day business of Company. [Paras 13, 14, 15]

The issuance of process against the petitioner was unsustainable, and the criminal complaints and consequential process were quashed as against the petitioner.

Final Conclusion: The writ petitions were allowed and the prosecution under section 138 read with section 141 of the Negotiable Instruments Act was quashed as against the petitioner.