TaxTMI Updates e-Newsletter
Sep 07,2026

Alternative efficacious statutory remedy - Maintainability of the writ petition despite the statutory appellate remedy under the Central Goods and Services Tax Act, 2017

HELD THAT: - The High Court's [2026 (7) TMI 1042 - DELHI HIGH COURT] refusal to entertain the writ petition on the ground of an alternative efficacious statutory appeal disclosed no error of law. The petitioner's contentions were left open for consideration by the appellate authority in accordance with law. [Paras 1, 2, 3, 5]

The Special Leave Petition was dismissed; the petitioner was granted four weeks to file a statutory appeal, which shall be decided on merits uninfluenced by the High Court's observations.

Final Conclusion: The Special Leave Petition was dismissed, leaving the petitioner to pursue the statutory appellate remedy.

Writ jurisdiction - Alternate statutory remedy - Section 6(2)(b) bar under GST - Jurisdiction - Proper officer - Petitioner’s challenge to order passed by Respondent No. 4 under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017 for the Financial Year 2018-19, was rejected by the High Court [2026 (5) TMI 1579 - ALLAHABAD HIGH COURT] However, the High Court granted liberty to the petitioner to file the statutory appeal within reasonable time.

HELD THAT:- Having regard to the above, we are not inclined to entertain the Special Leave Petition. We, however, grant further 30 days’ time to the petitioner from today to file the statutory appeal in which event, objection as to limitation shall not be taken. All contentions are kept open, including on the question of pre-deposit, since it is submitted that in parallel proceedings under the Central Act, petitioner had already made the pre-deposit.

Writ petition stands disposed of as withdrawn - HELD THAT:- The Special Leave Petitions were dismissed, while preserving the petitioners' liberty to raise all grounds before the GSTAT and to seek exclusion of time under Section 5 read with Section 14 of the Limitation Act, 1963.

Service of GST show cause notice - Violation of principles of natural justice

Validity of adjudication where the GST show cause notice was uploaded only under the portal tab 'Additional Notice and Orders' without separate intimation to the petitioner - HELD THAT: - The Court found a prima facie case that, owing to the manner in which the show cause notice was uploaded and the absence of separate intimation, the petitioner was unable to submit a reply. This was held to constitute a violation of the principles of natural justice. As the statutory appeal had been dismissed solely on limitation and not on merits, interference was warranted in the peculiar facts of the case. [Paras 5, 6]

The adjudication order and the appellate order were quashed, and the matter was restored for consideration of the petitioner's reply to the show cause notice after affording an opportunity of hearing and by a fresh reasoned and speaking order.

Final Conclusion: The writ petition was disposed of by setting aside the adjudication and appellate orders and directing fresh adjudication after receipt of the petitioner's reply to the show cause notice.

Utilisation of blocked input tax credit towards statutory pre-deposit - Preservation of statutory appeal affected by erroneous FORM GST DRC-07

Blocked input tax credit and statutory pre-deposit - Restriction on debit of electronic credit ledger - Appropriation of input tax credit blocked under Rule 86A of the CGST Rules towards the mandatory pre-deposit for an appeal against the adjudicated demand - HELD THAT: - While credit available in the Electronic Credit Ledger may be utilised subject to prescribed conditions and restrictions, a subsisting restriction under Rule 86A prevents debit of the corresponding credit towards any liability. Mere blocking neither constitutes payment nor appropriation towards the adjudicated demand. The adjudication order contained no direction appropriating the blocked credit; further, the subsisting restrictions were imposed by a State officer who was not before the Court, and the orders and recorded reasons supporting those restrictions were unavailable for examination. [Paras 33, 34, 35, 36, 37]

The blocked credit could not be treated as payment of the statutory pre-deposit or directed to be appropriated. The petitioner was left at liberty to seek removal or modification of the restrictions, or challenge them, before the competent forum.

Availability of the statutory appellate remedy where the summary order contained an error and the petitioner faced difficulty in filing the appeal electronically - HELD THAT: - The error in FORM GST DRC-07 was attributable to the Adjudicating Authority and was subsequently rectified. The petitioner could not be deprived of the appellate remedy for the time spent in obtaining rectification and pursuing the writ petition. The appeal was therefore to be enabled electronically, with manual filing permitted if the portal continued to prevent filing despite correct completion of the prescribed form and compliance with the pre-deposit requirement. [Paras 40, 41, 42]

The petitioner was permitted to file the statutory appeal within four weeks; if so filed, it would not be rejected as time-barred and would be considered on merits, subject to compliance with the statutory pre-deposit.

Final Conclusion: The writ petition was disposed of: the rectification prayer had become infructuous, while appropriation of blocked credit towards pre-deposit was refused. The petitioner was afforded an opportunity to pursue the statutory appeal, subject to the prescribed pre-deposit and portal-filing directions.

Availability of statutory appellate remedy before GST Appellate Tribunal - Limitation protection where writ petition was pursued owing to non-functional appellate forum

Continuation of writ proceedings challenging a penalty order under the GST Act after the GST Appellate Tribunal became functional - HELD THAT: - The writ petition had been entertained because the statutory appellate forum was non-functional. Upon the Tribunal becoming functional, no useful purpose would be served by retaining the writ petition, particularly when the petitioner did not dispute the availability of the appellate remedy. Since the petitioner had approached the Court due to the earlier non-functionality of the Tribunal, the appeal was directed to be entertained without objection as to limitation. [Paras 7]

The writ petition was disposed of with liberty to file an appeal before the GST Appellate Tribunal within the stipulated period; the Tribunal was directed to entertain it without limitation objection and decide it in accordance with law after considering the interim order.

Final Conclusion: The petitioner was relegated to the now-functional GST Appellate Tribunal, with protection against a limitation objection arising from the period during which the writ petition was pursued.

Natural justice in GST adjudication - Service of show cause notice through GST portal

Validity of GST adjudication where the show cause notice was uploaded only under the 'Additional Notice and Orders' tab without separate intimation, preventing the petitioner from replying - HELD THAT: - The Court found that, since the show cause notice was uploaded only under the specified portal tab and no separate intimation was given, the petitioner was unable to respond. This constituted a violation of the principles of natural justice. [Paras 7, 8]

The show cause notice and adjudication order were quashed, and the matter was remitted for issuance of a fresh show cause notice and a reasoned decision after granting personal hearing.

Final Conclusion: The writ petition was disposed of by quashing the impugned notice and adjudication order for breach of natural justice and directing fresh adjudication in accordance with law.

Post-decisional hearing for blocked electronic credit ledger - Audi alteram partem - Opportunity of hearing following blocking of the Electronic Credit Ledger on the basis that the suppliers were non-existent and their registrations had been cancelled

HELD THAT: - The Court found, prima facie, that the statutory power to block the Electronic Credit Ledger was attracted upon reasons to believe that input tax credit had been fraudulently availed or was ineligible, and the record disclosed such reasons. However, the principles of audi alteram partem and the principles applied in K-9 Enterprises required that the petitioner be afforded a post-decisional hearing to substantiate its claim through relevant documents.

Principles of audi alteram partem and the principles observed in the judgment of K-9 Enterprises [2024 (10) TMI 491 - KARNATAKA HIGH COURT] requires a post decisional hearing. [Paras 12, 13]

The petitioner was directed to submit a detailed representation with supporting documents, which the competent authority must decide by a reasoned and speaking order after granting a personal hearing, without being influenced by the Court's observations.

Final Conclusion: The writ petition was disposed of without adjudicating the merits, with directions for a post-decisional hearing and a reasoned determination of the petitioner's representation.

Utilisation of blocked input tax credit for appellate pre-deposit - Rule 86A restriction on electronic credit ledger - Appellate pre-deposit from input tax credit

Whether a taxpayer has an absolute statutory right to use amounts in the electronic credit ledger for the appellate pre-deposit despite a credit-blocking order under Rule 86A? - HELD THAT: - Section 49(4) permits use of the electronic credit ledger towards output-tax payments only subject to prescribed conditions and restrictions. Read with Rule 86A, a person filing an appeal may ordinarily utilise available credit to discharge the pre-deposit requirement, but such utilisation is impermissible while a valid restriction on debit of the ledger operates under Rule 86A. The statutory provision, therefore, does not confer an absolute right to use the credit ledger. Rule 86A is provisional, requires recorded reasons for blocking, and permits an application for unblocking where the conditions for restriction no longer subsist. [Paras 7, 9, 10]

The challenge based on an absolute right to utilise blocked credit for pre-deposit was not accepted. The respondent was directed to expeditiously consider the application for unblocking and, if rejection is proposed, to pass a speaking order after affording reasonable opportunity.

Final Conclusion: The writ petition was disposed of with a direction to consider the request for unblocking of the electronic credit ledger in accordance with Rule 86A.

Negative blocking of electronic credit ledger for recovery of determined GST dues - Effect of interim stay of recovery proceedings on electronic credit ledger blocking

Validity of blocking, including negative blocking, of the electronic credit ledger as a post-determination recovery measure, notwithstanding an interim direction to keep recovery proceedings in abeyance - HELD THAT: - The interim direction merely restrained debiting of amounts lying in the electronic credit ledger towards recovery and did not affect the earlier blocking order. Section 79 confers wide post-determination recovery powers through the specified modes, including recovery from money or goods under the proper officer's control, garnishee proceedings, distraint and sale of assets, and assistance of the Collector or Magistrate. Blocking of the electronic credit ledger, including negative blocking, falls within those recovery powers; Rule 86A, being a provisional pre-determination measure, does not restrict such post-determination action. [Paras 4, 6, 7]

The challenge to the blocking order was rejected and the writ petition was disposed of.

Final Conclusion: The writ petition was disposed of, the blocking of the electronic credit ledger being held permissible as a recovery measure under Section 79, subject to the interim protection against debit of the available credit towards recovery.

Protection against arrest during GST investigation - Interim protection from arrest while appearing pursuant to notices issued for investigation into alleged GST/ITC fraud

HELD THAT: - The respondent stated that, under the notices issued to the petitioner, arrest could not be made and that the petitioner was required only to appear for interrogation. The Court therefore permitted the petitioner to appear before the Investigating Officer for interrogation in terms of those notices. [Paras 9]

The petitioner was directed to appear for interrogation and was protected from arrest in connection with the stated criminal proceedings.

Final Conclusion: The Court granted interim protection from arrest, while requiring the petitioner to appear before the Investigating Officer for interrogation under the notices issued to him.

Revocation of cancelled GST registration - Opportunity to reply to show-cause notice - Rejection of the application for revocation of cancellation of GST registration where the petitioner was unable to reply to the show-cause notice on medical grounds - HELD THAT: - Having regard to the medical grounds stated for the failure to respond to the show-cause notice, the Court considered it appropriate to afford an opportunity to submit a reply, along with an undertaking to pay outstanding tax, interest and penalty in accordance with Rule 23 of the Central Goods and Services Tax Rules, 2017. [Paras 6, 7]

The rejection order was set aside and the competent authority was directed to consider the reply and undertaking and pass an order in accordance with law.

Final Conclusion: The writ petition was disposed of by setting aside the rejection of the revocation application and restoring an opportunity to reply subject to the stipulated undertaking.

Rectification of patent errors in GST proceedings - Rejection of rectification application concerning under-declaration of ineligible input tax credit - HELD THAT: - The scope of rectification under Section 161 of the applicable GST enactments is confined to patent errors. The impugned order found no error apparent in the original determination concerning under-declaration of ineligible input tax credit and also recorded non-submission of supporting documents. [Paras 5]

No infirmity was found in rejection of the rectification application; the petitioner was left free to challenge the original order on this issue in accordance with law.

Final Conclusion: The writ petition was disposed of, without interference with rejection of rectification concerning under-declaration of ineligible input tax credit, while preserving the petitioner's remedy to assail the original order in accordance with law.

Dismissal of a statutory appeal as time-barred without affording a personal hearing - denial of Opportunity of personal hearing in delay-condonation proceedings

HELD THAT: - The appellate authority dismissed the appeal on the ground of delay without affording the petitioner an opportunity of hearing on the application for condonation of delay. This was held to be an infraction of the hearing requirement under section 107(8) of the Telangana Goods and Services Tax Act, 2017. [Paras 4]

The impugned order was set aside and the matter remanded to the appellate authority for a fresh order in accordance with law after granting an opportunity of hearing to the petitioner.

Final Conclusion: The writ petition was disposed of by setting aside the dismissal of the appeal on limitation and remanding the delay-condonation application for fresh consideration after a hearing.

Rectification of mistake relating to apportionment of available Input Tax Credit (ITC) in terms of the Standard of Procedure (SOP), dated 14.10.2025 by invoking Section 161 of the Telangana Goods and Services Tax Act

HELD THAT:- The writ petition was disposed of directing the proper officer to rectify the mistake relating to apportionment of available input tax credit under the applicable SOP by invoking Section 161 of the Telangana Goods and Services Tax Act, 2017, with liberty to pursue an appropriate appeal against the rectification order.

Validity of reopening proceedings - "borrowed satisfaction" or "independent satisfaction" - reasons to believe - disallowances of expenses related to purchases treated as "bogus" in nature - HELD THAT:- The Special Leave Petition was dismissed after condoning delay, as no ground for interference with the impugned judgment [2025 (7) TMI 680 - CALCUTTA HIGH COURT] and order was found.

Addition u/s 68 - notice under Section 153C of the Income tax Act - search under Section 132 of the Income tax Act - appellate scrutiny of findings of fact - absence of incriminating material - no substantial question of law - There is a gross delay of 900 days in filing the Special Leave Petition.

HELD THAT:- The reasons assigned seeking condonation of delay are neither satisfactory nor sufficient in law to condone the same.

Hence, the application seeking con donation of delay is dismissed. In passing this order, we also follow the order of this Court [2026 (8) TMI 1198 - SC ORDER]

Writ petition challenging the intimation u/s 143(1) - alternative statutory remedy - inordinate delay and laches filling writ

HELD THAT:- The Special Leave Petition was dismissed, with liberty to avail the alternate remedy and seek condonation of delay before the Income Tax Appellate Tribunal.

Condonation of delay in income-tax appeal - Sufficient cause for delayed appeal - Statutory exclusion of Limitation Act - Consideration of merits at limitation stage

Condonation of delay in filing an income-tax appeal where the delay resulted from departmental processing, obtaining approval, preparation of the appeal and execution of the memorandum of appeal - HELD THAT: - The cumulative explanation disclosed bona fide and diligent pursuit of the appellate remedy and constituted sufficient cause for the short delay. The appellate provision did not expressly exclude the Limitation Act, render the High Court functus officio after expiry of the prescribed period, or employ restrictive language precluding condonation. The merits of the proposed appeal could not be examined at the stage of deciding limitation, since such merit hunting would compromise fairness in the eventual adjudication.

Section 260A(2A) of the Income Tax Act neither expressly provides that the appellate authority (High Court) shall become functus officio after the expiry of 120 days nor does this Section [Section 260A(2A)] expressly provides for “restrictive expressions” [“but not thereafter” or “not exceeding”] in terms of the broad principles mandated by the Hon’ble Supreme Court in the case of Jittu Yadav [2026 (5) TMI 1850 - SUPREME COURT] and therefore, the objection(s) set out by the Non-applicant/Respondent herein are turned down/negated.[Paras 4, 5]

The delay was condoned and the accompanying appeal was directed to be registered and listed for admission.

Final Conclusion: The application for condonation of delay was allowed on the finding that sufficient cause and bona fide diligence had been established. The accompanying appeal was directed to be registered and listed for admission.

Computation of deductions under sections 80-IA and 80-HHC - Reduction of deduction allowed under section 80-IA while computing deduction under section 80-HHC

HELD THAT: - Following the larger Bench decision in Shital Fibers Ltd. [2025 (5) TMI 1599 - SUPREME COURT (LB)] the Court held that section 80-IA(9) distinguishes computation of a deduction from its allowance. Deduction under section 80-HHC must be computed on the gross total income without reducing the deduction allowed under section 80-IA; however, at the stage of allowance, the aggregate deductions cannot exceed the profits and gains of the eligible business. [Paras 5]

The question was answered in the negative and in favour of the assessee.

Final Conclusion: The appeal was disposed of by answering the surviving question of law in favour of the assessee, in accordance with the larger Bench decision of the Supreme Court.

Priority of secured creditor over Income Tax attachment - Proclamation of attachment - Registration of attachment with CERSAI - Priority between the bank's registered security interest in the secured property and the Income Tax Department's attachment -

HELD THAT: - A prior attachment does not take precedence over the secured creditor's dues unless it was made public through a proclamation in the manner required by law. The Income Tax Department neither established compliance with the prescribed steps for proclamation of the attachment nor showed registration of its claim or attachment order with CERSAI. The bank's registered security interest was therefore entitled to priority under section 26E of the Securitisation Act. [Paras 15, 16, 17, 18, 19]

The attachment and consequential encumbrance could not prevail over the bank's secured dues and were directed to be removed, without prejudice to recovery of the Income Tax dues from any surplus sale proceeds or other assets in accordance with law.

Final Conclusion: The writ petition was allowed. The bank's secured dues were held to have priority over the Income Tax Department's attachment, while the Department remained free to pursue recovery in accordance with law.

Recording of satisfaction note under section 153C - Immediate action after completion of searched person's assessment - Validity of proceedings against a person other than the searched person where the satisfaction note was recorded more than four years after completion of the searched person's assessment

HELD THAT: - A satisfaction note is a prerequisite for initiating proceedings against another person and, where recorded after completion of the searched person's assessment, must be prepared immediately thereafter. Adopting the reasoning in the co-owner's case concerning the same search and land transaction [2025 (11) TMI 1318 - GUJARAT HIGH COURT], the Court held that a delay exceeding four years was contrary to the requirement of immediate action and could not sustain the proceedings. [Paras 8]

The notice, consequential order under section 153C and demand notice were quashed, and the writ petition was allowed.

Final Conclusion: The proceedings initiated against the petitioner under section 153C for Assessment year 2017-18 were invalidated because the satisfaction note was recorded after an impermissible delay. The writ petition was allowed and the impugned notice, consequential order and demand notice were quashed.

Reassessment notice issued in the name of a deceased assessee - Proceedings against legal representatives of deceased assessee

HELD THAT: - Section 159 permits proceedings initiated before an assessee's death to be continued against the legal representative and permits proceedings that could have been initiated against the deceased to be taken against the legal representative, who is deemed to be an assessee. As the impugned notice was issued after the death of the assessee in the deceased's name, a fresh notice had to be issued to the legal representatives. [Paras 6, 7, 8, 9]

The impugned notice was remitted for issuance of a fresh notice to the legal representatives. The intervening period specified by the Court was excluded in computing limitation under Section 149, and the legal representatives were directed to participate in the proceedings in accordance with law.

Final Conclusion: The writ petition was disposed of by directing issuance of a fresh notice to the legal representatives of the deceased assessee, with exclusion of the specified period for limitation.

Disallowance of expenditure relating to exempt income - Disallowance for tax deducted under an alternative withholding provision - Book-profit adjustment for expenditure relatable to exempt income

Disallowance of expenditure relating to exempt income - no exempt income was earned during the year - HELD THAT: - The appeal on this question was dismissed by this Court against the Department in the case of CIT vs. Caraf Builders & Constructions Pvt. Ltd. [2018 (12) TMI 410 - DELHI HIGH COURT] and an SLP filed thereagainst also has been rejected by the Hon’ble the Supreme Court [2020 (1) TMI 135 - SC ORDER]. The Court did not record separate reasoning on the issue.

The deletion of the disallowance under section 14A was sustained.

Disallowance for tax deducted under an alternative withholding provision - Disallowance of expenditure for deduction of tax under section 194C instead of section 194I - HELD THAT: - Where appropriate tax had been deducted, deduction under a provision other than that considered applicable by the Assessing Officer could not render the assessee a defaulter or warrant disallowance under section 40(a)(ia). This was reinforced by the setting aside of the order treating the assessee as a defaulter. [Paras 5]

The deletion of the disallowance under section 40(a)(ia) was upheld.

Book-profit adjustment for expenditure relatable to exempt income under Explanation 1(f) to section 115JB - HELD THAT: - The question was decided against the Revenue in light of the judgment in Pr. CIT v. Bhushan Steel Ltd.[2015 (9) TMI 1424 - DELHI HIGH COURT] [Paras 9]

The Revenue's challenge to deletion of the book-profit adjustment was rejected.

Final Conclusion: The Revenue's appeal was dismissed. The deletions of the disallowances under sections 14A and 40(a)(ia), and of the adjustment to book profit under section 115JB, were sustained.

Condonation of delay in refund claims on genuine hardship - Statutory power to condone delay vis-a -vis CBDT time-limit circular

Rejection of applications seeking condonation of delay in claiming refunds solely on the basis of the six-year limit under CBDT Circular No. 9/2015 - HELD THAT: - Section 119(2)(b) confers discretion to admit delayed claims for refund to avoid genuine hardship and does not prescribe a specific period for condonation. The discretion must be exercised with due regard to the difficulties of the assessee. Though CBDT circulars bind the departmental authorities, they do not bind the Court; a circular-imposed time limit that is contrary to the statutory power cannot sustain rejection of the applications. [Paras 9, 10, 12]

The rejection of the condonation applications as barred by the six-year limit was held unsustainable; the impugned orders were set aside and the refund claims were directed to be considered afresh.

Final Conclusion: The writ petitions were allowed. The authorities were directed to consider the refund claims in accordance with law.

Penalty levied u/s. 271B - not getting the books of account audited - Tax audit requirement for commission-based distributor

HELD THAT: - The assessee operated on commission basis, as confirmed by tax deduction on commission payments. Amounts routed through the bank account towards obtaining recharge vouchers and supplying them to customers were not purchases and sales of the assessee; only commission was accounted for. The turnover was therefore confined to the commission income, which did not exceed the prescribed threshold for tax audit. [Paras 4]

The assessee was not required to obtain a tax audit, and the penalty for failure to do so was deleted.

Final Conclusion: The appeal was allowed and the penalty for non-obtaining of tax audit was deleted.

Appellate power to set aside assessment - Appealability of jurisdiction-transfer order

Appellate power to set aside assessment - Best judgment assessment - first appellate authority's power to set aside and remand an assessment framed under reassessment provisions without deciding the appeal on merits - HELD THAT: - An assessment may be set aside by the first appellate authority only where it is a best judgment assessment under section 144. As the assessment in question was not such an assessment, the first appellate authority could not merely remand the matter to the Assessing Officer without adjudicating the grounds raised in appeal. [Paras 7]

The impugned appellate order was set aside and the appeal was restored to the first appellate authority for disposal on merits by a speaking order after affording reasonable opportunity to the assessee and the Assessing Officer.

Appealability of jurisdiction-transfer order - challenge to transfer of jurisdiction under section 127 before the Tribunal - HELD THAT: - An order under section 127 was not stated to be an appealable order before the Tribunal under section 253. [Paras 7]

The ground challenging the jurisdiction-transfer order was dismissed.

Final Conclusion: The assessee's appeal was partly allowed for statistical purposes, with the first appellate authority directed to adjudicate the appeal on merits.

Penalty u/s 270A for misreporting of capital gains - non identification of statutory ingredients for misreporting -

HELD THAT: - The penalty order was founded solely on the capital-gains addition and contained no reasons demonstrating how the addition amounted to misreporting. It neither identified any applicable clause of section 270A(9) nor recorded satisfaction of the ingredients required to characterise the income as misreported. Mere invocation of section 270A(8), without such particulars, rendered the penalty arbitrary and unsustainable. Case followed SCHNEIDER ELECTRIC SOUTH EAST ASIA (HQ) PTE LTD. [2022 (3) TMI 1295 - DELHI HIGH COURT] [Paras 8, 9]

The penalty imposed under section 270A(8) was deleted.

Final Conclusion: The appeal was allowed and the penalty for alleged misreporting of income was deleted.

Taxability of net winnings from online games under section 115BB - Taxability under section 115BB of receipts from an online gaming portal where the aggregate buy-in exceeded the gross winnings

HELD THAT: - The winnings from online games were required to be determined after adjusting the total buy-in against gross winnings. Since the portal's data showed that the assessee had incurred an overall loss, the Assessing Officer could not bring to tax the gross winning figure without accounting for the amounts paid for participation.

The Tribunal followed the Coordinate Bench decision [2026 (7) TMI 285 - ITAT HYDERABAD] on similar facts and relied on the Supreme Court's [2026 (5) TMI 1822 - SUPREME COURT] observation that netting of expenses and payouts against receipts may be relevant for income-tax purposes. [Paras 8]

The addition made as income from online games under section 115BB was deleted; the remaining grounds were left open as academic.

Final Conclusion: The assessee's appeal was allowed and the addition based on gross online-game winnings was deleted, as the gaming transactions resulted in a net loss.

Limitation for reassessment notice - Service of reassessment notice - Deemed service of notice

Validity of reassessment proceedings where the notice was not dispatched or served within the statutory time limit - HELD THAT: - Mere digital signing of a reassessment notice does not constitute its valid issuance. The notice must be transmitted beyond the control of the originating authority within the prescribed period. The postal records established that the notice was booked after the limitation date, and the Department's assertion of an earlier dispatch was unsupported by contemporaneous evidence. Further, as the assessee had objected to non-service during the assessment proceedings, the Department could not invoke deemed service under section 292BB. [Paras 10, 11, 12]

The reassessment notice was barred by limitation; it and the consequential assessment order were quashed.

Final Conclusion: The reassessment notice and consequential assessment order were quashed as time-barred. The challenge to the addition on merits was rendered infructuous, and the appeal was allowed.

Alternative statutory remedy - Exercise of writ jurisdiction - Maintainability of the writ petition against an order directing provisional release of imported goods upon furnishing a bank guarantee despite an available statutory appeal

HELD THAT:- The special leave petition was dismissed without interference with the impugned order/judgment [2026 (9) TMI 359 - DELHI HIGH COURT]

Reliance on unverified artificial intelligence-generated precedents - Sanctity of adjudication Penalty for misdeclaration of natural diamonds

Sustainability of the penalty order founded on non-existent, falsely cited, or hallucinated artificial intelligence-generated legal material - HELD THAT: - Verification established that the adjudicating authority had relied on case laws which were non-existent, carried fake citations, or did not lay down the propositions attributed to them. The use of such dubious material in the adjudicatory process vitiated the decision-making process: artificial intelligence may be used only as an assistive tool and cannot substitute adjudication.

The use of AI in this case, resulting in reliance placed by the second respondent on material which is dubious, proves fatal to the sustainability of the order imposing penalty on the appellant. Reliance on even an iota of fake or hallucinated precedent violates the sanctity of adjudication and renders the resulting decision unsustainable. [Paras 4, 7, 8]

The order confirming the penalty and the Order-in-Original were set aside, and the proceedings were revived for fresh decision by another officer of the same rank.

Final Conclusion: The civil appeal was allowed and the penalty proceedings were remanded for fresh adjudication by a different officer of the same rank.

Unconditional release of detained baggage jewellery - Discretionary writ jurisdiction - delay, suppression and disputed facts

Entitlement to an unconditional writ for return of a detained yellow metal chain claimed to be used personal jewellery - HELD THAT: - The extraordinary writ jurisdiction is discretionary and equitable, requiring prompt approach and complete disclosure of material facts. The prolonged, insufficiently explained delay, omission of the contemporaneous statement under the Customs Act, and disputed questions concerning the article's nature, value, status as a personal effect and compliance with baggage requirements precluded a conclusive determination on the petitioner's unilateral assertions. The statutory safeguards and the consequences of their non-compliance were not decided in the abstract, since the complete factual and procedural record required examination by the competent authority. [Paras 42, 44, 45, 46, 48]

Unconditional release and setting aside of the detention were declined. The competent authority was directed to complete appraisement and further proceedings in accordance with law expeditiously, preferably within three months subject to the petitioner's cooperation; waiver of warehouse and handling charges was left open for the adjudicating authority.

Final Conclusion: The writ petition was dismissed, without any opinion on confiscation, duty, fine, penalty or other merits falling within the statutory process.

Writ jurisdiction despite alternative statutory remedy - Delay in invoking writ jurisdiction - Alleged violation of natural justice in customs adjudication

Whether writ jurisdiction should be exercised against a customs adjudication order despite the statutory appellate remedy and substantial delay? - HELD THAT: - Although the existence of an alternative remedy is not an absolute bar to writ jurisdiction, it should not be exercised so as to defeat the statutory appellate scheme and its limitation provisions. The contemporaneous record showed the petitioner's participation in the proceedings, including acknowledgment of an oral show cause notice and waiver of written notice and personal hearing. The allegations concerning coercion, the statements, service of the adjudication order, and compliance with the statutory procedure involved disputed questions capable of determination in the statutory appeal; they did not disclose a patent jurisdictional defect or such violation of natural justice as justified bypassing that remedy after substantial delay.

The decision in Glaxo Smith Kline [2020 (5) TMI 149 - SUPREME COURT] reinforces the principle that the High Court should not permit the writ jurisdiction to become a means of circumventing the statutory period prescribed for pursuing the appellate remedy. The Supreme Court has specifically cautioned that the width of Article 226 cannot be employed in a manner which renders the statutory scheme concerning remedies and limitation otiose.[Paras 42, 43, 44, 45, 46]

The writ petition was dismissed, leaving the petitioner to pursue the statutory appellate remedy; the merits of confiscation, penalty, and the evidentiary value or legal effect of the relevant documents were left open.

Final Conclusion: The writ petition was dismissed for failure to avail the efficacious statutory appeal and for substantial delay, no exceptional circumstance warranting exercise of writ jurisdiction having been established. The merits were left for consideration by the competent appellate forum, if approached.

Release of detained gold where show cause notice is issued within extended statutory period

Whether release of the detained gold was warranted under Section 110(2) upon expiry of the initial six-month period for issuance of a show-cause notice? - HELD THAT: - The statutory consequence under Section 110(2) arises only where the notice contemplated by Section 124 is not issued within the prescribed period, including a period validly extended under the proviso. The written show cause notice was issued before expiry of the extended period, and the petition had itself been instituted while that period was subsisting. The Court therefore held that expiry of the original period alone could not found a claim for release. The disputed validity and communication of the extension, the alleged waiver of notice or hearing, and the evidentiary value of the statement were not adjudicated and were left open for appropriate proceedings. [Paras 21, 23, 27, 28, 29]

No direction for release of the detained gold was warranted; the petitioner may raise all permissible objections in the ensuing adjudicatory proceedings.

Final Conclusion: The petition was dismissed as the show cause notice had been issued before expiry of the extended period. All objections on the merits of the notice and the detention were left open for adjudication in accordance with law.

Alternative statutory remedy - Exercise of writ jurisdiction - Maintainability of the writ petition against an order directing provisional release of imported goods upon furnishing a bank guarantee despite an available statutory appeal

HELD THAT: - The impugned order was independently appealable under the statute. As no exceptional circumstance was shown for bypassing that remedy, writ jurisdiction was not liable to be invoked. [Paras 4]

The writ petition challenging the condition of provisional release and seeking return of the bank guarantee was not entertained and was dismissed.

Final Conclusion: The writ petition and pending applications were dismissed, leaving the petitioner to pursue the available statutory appellate remedy.

Permanent stay of winding up for corporate revival - Commercial morality and public interest in revival scheme - Redevelopment of company-owned land on change of objects

Whether the winding-up of the company should be permanently stayed under Section 466 of the Companies Act, 1956 on the basis of the proposed revival and redevelopment scheme? - HELD THAT: - The Court held that revival was not conditional upon resuming the company's erstwhile textile business, there being no legal prohibition against a change of objects for revival. Redevelopment by the company of its own land did not constitute its transfer or divestment. The settlement of creditor and workmen claims, including the benefits secured for workmen, materially supported public interest and commercial morality.

Objections concerning the quantum and treatment of the majority shareholders' creditor claims, receipt of dividend, security and long-term loans were matters for adjudication of claims and did not warrant refusal of revival. Earlier adverse observations did not preclude a fresh application in the changed circumstances, particularly when the requirements concerning payment or agreed payment of creditors and workmen stood fulfilled. [Paras 32, 33, 35, 38, 39]

The revival proposal was accepted, the impugned refusal was set aside, and the appeal seeking permanent stay of winding up was allowed.

Final Conclusion: The appeals were allowed and the impugned refusal to permit revival and permanent stay of winding up was set aside. The connected appeals and interim applications were disposed of accordingly.

NOIDA's time-extension charges for delay in completing the housing projects under corporate insolvency resolution - Corporate insolvency resolution process costs

Inclusion of NOIDA's time extension charges for delay in completion of the housing projects as CIRP costs and their recovery from the successful resolution applicant and homebuyers - HELD THAT: - The default charges, as imposed in the lease deed as also now introduced as per the new policy, specifies a percentage of the lease premium to penalise a defaulting developer. The intention is also to motivate completion within time lines and to act as a deterrent to avoid time lags. In the present case, the defaulting developer is out of the picture and the half baked project can be completed only if the Resolution Plan is put into operation and completed.

In the peculiar circumstances of this case, we are of the opinion that it is only proper that NOIDA waives the penalty charges since it is neither the default of the homebuyers nor the default of the SRA, which led to the delay. The homebuyers and the SRA are sought to be penalised for past sins of the Corporate Debtor, which cannot be allowed, especially in the context of the authority imposing penalty, ie: the local authority being concerned essentially with the development of the area under its control.

We hence, order that in the peculiar facts and circumstances of the case, the penalty as imposed by the NOIDA on delay, now mulcted on the SRA and the homebuyers, cannot be so validly imposed. We set aside the directions to consider the time extension charges as CIRP costs and modify the impugned order to that extent. NOIDA’s appeal praying for time extension charges even beyond the three years upto the 10th year also stands rejected.[Paras 12, 14, 15, 16]

The time extension charges could not validly be imposed on the successful resolution applicant and homebuyers or treated as CIRP costs; the direction to include them as CIRP costs was set aside, and NOIDA's claim for charges beyond three years was rejected.

Final Conclusion: The homebuyers' appeal was allowed and NOIDA's appeal was dismissed. The impugned order was modified to exclude the time extension charges from CIRP costs.

Abuse of insolvency process - Malicious continuation of CIRP - Settlement by sole creditor in one-member CoC - Termination of the Corporate Insolvency Resolution Process

HELD THAT:- We fail to understand as to how the impugned order passed by the National Company Law Appellate Tribunal (NCLAT) [2026 (7) TMI 103 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI (LB)] could be questioned before this Court.

Termination of legal proceedings cannot be a ground for assailing the same particularly when the relief has also granted by such termination of legal proceedings viz., Corporate Insolvency Resolution Process (CIRP) in the instant case.

Hence, the appeal is dismissed. Amount deposited by the respondent herein could be withdrawn by the appellant herein by filing an application before the NCLAT. If such an application is filed, the same shall be considered in accordance with law and the appellant herein is permitted to withdraw the said amount as per his entitlement.

Insolvency and Bankruptcy Code prevailing over the Electricity Act, 2003 - pre-CIRP parallel operation charge demands extinguishment under the approved resolution plan.

Whether the Insolvency and Bankruptcy Code, 2016 prevails over the Electricity Act, 2003, so that pre-CIRP parallel operation charge demands stood extinguished under the approved resolution plan? - HELD THAT: - Section 238 of the Insolvency and Bankruptcy Code, 2016 overrides the Electricity Act, 2003 notwithstanding the non-obstante clauses in the latter enactment. Since the approved resolution plan extinguished the corporate debtor's liabilities and pending proceedings relating to debts before commencement of the corporate insolvency resolution process, the outstanding Parallel Operation Charges forming the subject of the appeal stood extinguished. [Paras 10, 11]

The appellate determination extinguishing the outstanding Parallel Operation Charges was upheld.

Final Conclusion: The writ petition was dismissed, and the appellate determination that the outstanding Parallel Operation Charges stood extinguished under the approved resolution plan was sustained.

Anticipatory bail under the Prevention of Money Laundering Act - Twin conditions for bail in money-laundering offences - Independence of money-laundering proceedings from predicate offences

HELD THAT:- The Special Leave Petition was dismissed and the pending applications were disposed of. No reason to interfere with the impugned order passed by the High Court. [2026 (9) TMI 286 - DELHI HIGH COURT]

Restrictive bail regime under the Prevention of Money Laundering Act, 2002 - Prolonged pre-trial incarceration - Constitutional bail under Article 21 despite PMLA rigours

Grant of bail in a money-laundering prosecution on account of prolonged incarceration and the unlikely early conclusion of trial - HELD THAT: - The Hon’ble Supreme Court has time and again held that prolonged incarceration before being pronounced guilty of an offence cannot turn into punitive detention and in such cases Article 21 applies irrespective of the seriousness of the crime. A constitutional Court cannot be restrained from granting bail to an accused on account of restrictive statutory provisions in a penal statute if it finds that the right of the accused under Article 21 of the Constitution has been infringed. However stringent a statute may be, a constitutional Court should lean in favour of constitutionalism and the rule of law of which liberty is an intrinsic part. In the authority in Arvind Dham [2026 (1) TMI 266 - SC ORDER] the Hon’ble Supreme Court has observed that prolonged incarceration of an undertrial, without commencement or reasonable progress of trial cannot be countenanced, as it has the effect of converting pretrial detention into form of punishment. On the same issue, the Hon’ble Court has observed in the authority in Ram Kripal Meena [2024 (8) TMI 649 - SC ORDER] that the rigours of Section 45 of the PMLA can be suitably relaxed to afford conditional liberty to the petitioner. Also see MANISH SISODIA VERSUS DIRECTORATE OF ENFORCEMENT [2024 (8) TMI 614 - SUPREME COURT]

Prolonged detention of an undertrial without commencement or reasonable progress of trial cannot become punitive detention. The rigours of the PMLA bail provision may be relaxed where continued custody infringes Article 21. The prosecution rested on documentary evidence in the custody of the investigating agency, leaving little scope for its tampering; and, as the matter remained at the pre-cognizance stage, early completion of trial was unlikely. [Paras 10, 11]

Bail was granted subject to stringent conditions, without examining the merits of the prosecution case.

Final Conclusion: The bail application was allowed on the touchstone of Article 21, subject to stringent conditions. The observations were confined to bail and did not express any view on the merits.

Statutory composition of the Adjudicating Authority - Mandatory finding that property is involved in money-laundering - Appellate supplementation of omitted statutory findings - Communication of reasons to believe for freezing and retention

Statutory composition of the Adjudicating Authority - Coram non judice adjudication - Validity of the order of an Adjudicating Authority whose Bench was constituted solely of the Chairperson - HELD THAT: - The statutory objection to the composition of the Bench was disregarded by the Appellate Tribunal. In the absence of an appropriate finding, supported by evidence, that a Bench consisting solely of the Chairperson was constituted in accordance with law, the Adjudicating Authority had failed to observe the statutory mandate and rendered itself coram non judice. [Paras 16, 18, 19]

The order of the Adjudicating Authority was held to be a nullity on account of the defect in its composition.

Mandatory finding on property involved in money-laundering - Appellate supplementation of statutory findings - Nexus between frozen property and proceeds of crime - Validity of continued freezing of bank and payment-aggregator accounts without a specific finding that identified property was involved in money-laundering - HELD THAT: - The statutory exercise requires the Adjudicating Authority, after considering the reply and material, to identify the property and record a prima facie finding that it is involved in money-laundering. A conclusion that retention or freezing is required for adjudication is not a substitute for that mandatory determination.

A bank account or gross business turnover does not, by itself, constitute proceeds of crime; the property must have the requisite nexus with criminal activity relating to a scheduled offence. Having noticed the omission, the Appellate Tribunal could not cure it by supplying the foundational finding which the original authority was statutorily required to record. [Paras 39, 41, 46, 51, 53]

The continued freezing and retention were held unsustainable, as neither the mandatory finding nor a reasoned nexus between the frozen property and proceeds of crime had been established.

Communication of reasons to believe for freezing and retention - Validity of freezing and retention proceedings where the reasons to believe were not supplied to the affected person - HELD THAT: - The failure to communicate the reasons to believe at the statutory stages of freezing and retention was held to violate the applicable statutory safeguards and to vitiate the proceedings. [Paras 52]

The freezing proceedings were held vitiated by non-supply of the reasons to believe.

Final Conclusion: The appeal was allowed and the impugned order was quashed and set aside, without expressing any opinion on the commission of the scheduled offence or the offence of money-laundering.

Priority of prior attachment over subsequent compromise decree - Single-member PMLA adjudication - Attachment of property acquired before scheduled offence - Recorded reasons to believe for PMLA attachment

Priority of prior attachment over subsequent compromise decree - Effect of a compromise decree agreed after attachment of the land under the PMLA proceedings - HELD THAT: - The attachment preceded the compromise decree and was disclosed in the encumbrance certificate. As the ownership had not been transferred in execution of the compromise terms, the agreement and decree did not confer any right, title or interest in the attached land upon the petitioner. [Paras 4]

The petitioner could not challenge the attachment on the strength of the subsequent compromise decree.

Single-member PMLA adjudication - Constitutional validity of non-judicial member - Validity of the confirmation order rendered by a single Member (Finance) of the Adjudicating Authority - HELD THAT: - The conferment of powers akin to those of a civil court upon an authority does not require the participation of a judicial member in every decision. The PMLA scheme permits a single-member bench and provides appellate scrutiny before the Appellate Tribunal and thereafter before the High Court on facts and law; the constitutional principles governing transfer of High Court functions to tribunals were therefore inapplicable. [Paras 8, 9, 13]

The constitutional challenge to the order of the single Member (Finance) was rejected.

Attachment of property acquired before scheduled offence - Proceeds of crime under PMLA - Attachment under the PMLA of property acquired before registration of the predicate offence - HELD THAT: - The Supreme Court's exposition of proceeds of crime Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)] recognises property directly or indirectly derived from criminal activity relating to a scheduled offence, while treating the later Explanation as clarificatory. Applying that law, the Court held that the fact that the property was acquired before commission or registration of the scheduled offence did not, by itself, preclude attachment. [Paras 14, 15]

The challenge to attachment on the ground of prior acquisition of the property was rejected.

Reasons to believe for provisional attachment - Sufficiency of the recorded reasons to believe in the provisional attachment order - HELD THAT: - The provisional attachment order expressly recorded the authorised officer's belief that immediate attachment was necessary to prevent frustration of proceedings under the PMLA. A challenge to the factual basis of that satisfaction could not be examined in writ jurisdiction and was required to be pursued through the statutory appellate remedy. [Paras 16]

The challenge to the provisional attachment for want of recorded reasons to believe was rejected.

Independent reasons to believe by Adjudicating Authority - Whether the Adjudicating Authority independently recorded reasons to believe that the persons concerned possessed proceeds of crime? - HELD THAT: - The confirmation order contained detailed consideration of the facts and showed that the notice was issued after the Adjudicating Authority independently assessed the material and formed the requisite belief. The recorded reasons could not be characterised as a mere repetition of the Enforcement Directorate's findings. [Paras 17]

The challenge to the confirmation order for absence of independent reasons to believe was rejected.

Final Conclusion: The writ petition was dismissed. The observations were confined to the exercise of writ jurisdiction and were not to constrain the competent authorities in their further decisions.

Appeals dismissed for non-compliance with the statutory pre-deposit requirement - HELD THAT:- The writ petitions were disposed of with liberty to make the prescribed pre-deposit through the ICEGATE Portal and seek restoration of the appeals; liberty was also granted to apply for refund of the amount deposited through DRC-03, in accordance with law.

Appellate jurisdiction in taxability and classification disputes - Statutory appeal to Supreme Court from Tribunal orders

Maintainability before the High Court of an appeal against a Tribunal order determining service-tax taxability and classification of royalty and services - HELD THAT: - The dispute essentially concerned taxability and classification. In view of the statutory appellate scheme under Section 35L of the Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994, an appeal from the Tribunal on such questions lies to the Supreme Court and cannot be maintained before the High Court. The Court followed Commissioner of Income Tax Vs. DLF Golf Resorts Ltd. [2017 (5) TMI 402 - PUNJAB AND HARYANA HIGH COURT] [Paras 5, 6, 7]

The appeal was held not maintainable and dismissed, leaving the Department free to pursue the appropriate remedy in accordance with law.

Final Conclusion: The High Court dismissed the appeal as not maintainable, holding that the challenge to the Tribunal's determination on taxability and classification lay before the Supreme Court.

Successive service tax adjudication for the same tax period - Recovery pursuant to an unsustainable service tax demand - Validity of an independent service tax demand and consequential garnishee recovery for a period in respect of which the assessee had already succeeded in appellate proceedings - HELD THAT: - The Department could not justify initiation and adjudication of independent proceedings alleging suppression of taxable receipts for the same period after the earlier demand for that period had been set aside in appeal and refund had been granted. The impugned order nevertheless confirmed the demand on similar grounds, notwithstanding the appellate finding that the works were exempt and that no taxable service had been rendered. [Paras 5, 7, 8]

The order-in-original was set aside as legally unsustainable, and the consequential garnishee notice was also set aside.

Final Conclusion: The writ petition was allowed, setting aside the impugned service tax adjudication and the consequential recovery notice.

Statutory appellate remedy under the Central Goods and Services Tax Act - Challenge to the ex parte tax order and rejection of the first appeal as time-barred, when an appeal before the constituted Goods and Services Tax Appellate Tribunal was available

HELD THAT: - The Court held that the petitioner should pursue the statutory remedy under Section 112 before the constituted Tribunal. The Tribunal's order provides window periods for appeals against orders passed in different periods; the petitioner was therefore permitted to file an appeal within the applicable window period on payment of the statutory pre-deposit. The Court expressly left open the grounds concerning invocation of Section 74 for determination by the Tribunal in accordance with law. [Paras 4]

The writ petition was disposed of, granting liberty to file an appeal before the Tribunal within the applicable window period with statutory pre-deposit; the merits of invocation of Section 74 were left open.

Final Conclusion: The petitioner was relegated to the statutory appellate remedy before the Goods and Services Tax Appellate Tribunal. No opinion was expressed on the merits of the challenge to the proceedings under Section 74.

Service-tax demand under the reverse charge mechanism -classification of received services - Extended period of limitation - revenue neutrality and absence of intent to evade

Reverse-charge service-tax demand on business promotion, conveyance, legal and freight expenses on the basis of their classification and reconciliation of ST-3 returns with the appellant's accounts - HELD THAT: - The services had been identified and classified in the appellate order, with the tax payable under each head computed. The department was entitled to verify the correctness of service-tax payment by comparing the returns with the appellant's balance sheets and Form 26AS. Where the returns did not reconcile with the appellant's own accounts and requisite particulars were not furnished despite communications, the department could determine the liability from the available records. [Paras 15, 17]

The service-tax demand confirmed on merits was upheld, subject to its confinement to the normal period of limitation.

Extended period of limitation - revenue neutrality - Penalty for suppression - absence of intent to evade service tax - Invocation of the extended period and imposition of penalty under section 78 for non-payment of service tax under reverse charge - HELD THAT: - Service tax paid under reverse charge would have been available to the appellant as Cenvat credit, increasing its reverse-charge liability while correspondingly reducing its cash liability under forward charge. The transaction was therefore revenue-neutral and did not establish an intent to evade payment of service tax. Since the ingredients for penalty under section 78 were the same as those for the extended period, that penalty could not be sustained. [Paras 18, 19, 20]

The demand for the extended period and the penalty under section 78 were set aside; the remaining penalty was upheld.

Final Conclusion: The impugned order was modified by sustaining the reverse-charge service-tax demand only for the normal period, with consequential interest, and deleting the penalty under section 78. The matter was remanded solely for calculation of the demand and interest for that period.

Extended period of limitation for service tax demand - Wilful suppression with intent to evade tax - service tax demand based on differences in statutory financial records and Form 26AS data

Extended period of limitation for the service-tax demand invoked on the basis of discrepancies in statutory financial records and Form 26AS - HELD THAT: - The extended period cannot be invoked merely from differences reflected in the balance sheet, profit and loss account and Form 26AS, when the statutory records were available to the Department for scrutiny. Suppression for this purpose must be established by corroborative material showing a deliberate non-disclosure with intent to evade service tax; no such material was produced. See M/s Firm Foundation and Housing Pvt. Ltd. [2018 (4) TMI 613 - MADRAS HIGH COURT] and M/s Sigma Trade Wings [2019 (3) TMI 36 - CESTAT ALLAHABAD] wherein held that the revenue’s reliance upon the Profit and Loss account are irrelevant for the purpose of confirmation of tax. [Paras 12, 13, 18]

The demand was held barred by limitation, and the impugned order was set aside.

Determination of taxable value from reconciled records - Service tax demand computed by adopting turnover from the balance sheet for one period and Form 26AS for other periods without reconciliation - HELD THAT: - Taxable value for the entire period must be determined from a consistent source. The use of the balance sheet for one financial year and Form 26AS for other periods, without reconciling the two sets of figures, rendered the demand unsustainable. [Paras 15]

The demand computed on unreconciled and inconsistent turnover figures was held bad in law.

Taxability of remuneration paid as salary to the company's Directors - HELD THAT: - The remuneration was accounted for and disclosed by the Directors as salary in their individual income-tax returns. Such salary remuneration paid by the company to its Directors could not be treated as consideration for a taxable service. [Paras 16]

The remuneration paid as salary to the Directors was held not liable to service tax.

Final Conclusion: The appeal was allowed with consequential relief, as the service tax demand was unsustainable on limitation.

Statutory limitation for appeal to Commissioner (Appeals) - Condonation of delay beyond statutory maximum - Condonation of delay in filing a service-tax appeal before the Commissioner (Appeals) beyond the period statutorily extendable on sufficient cause.

HELD THAT: - This issue is squarely covered by the decision of M/s Singh Enterprises [2007 (12) TMI 11 - SUPREME COURT] wherein it has been held that Commissioner (Appeals) could not condone the delay beyond the 30 days in filing the appeal before him

Section 85(3A) prescribes two months for filing an appeal and permits condonation, on sufficient cause, only for a further month. The Commissioner (Appeals), being a creature of statute, has no power to entertain an appeal beyond that outer limit; merits of the underlying dispute cannot justify departure from the statutory limitation. [Paras 3]

The dismissal of the appeal as time-barred was upheld and the appeal was dismissed.

Final Conclusion: The appeal was dismissed, the Commissioner (Appeals) having correctly declined to condone delay beyond the statutorily prescribed outer limit.

Extended period of limitation for CENVAT credit on common inputs and input services - Appellate interference with factual findings on limitation

Invocation of the extended period of limitation for alleged availment of CENVAT credit on inputs and input services used for both dutiable and exempted goods - HELD THAT: - Limitation being a mixed question of law and fact, the Tribunal's finding that the assessee had already disclosed the relevant facts concerning common input and input-service credit, and that no fresh information justified invocation of the extended period, rested on appreciation of the evidence. Such factual appreciation, including the treatment of the letters relied on by the Department, warranted no interference in the limited appellate jurisdiction. [Paras 5, 6, 7]

The Tribunal's refusal to permit invocation of the extended period of limitation was sustained.

Final Conclusion: The revenue's appeal was dismissed, as no ground existed to interfere with the Tribunal's factual findings on limitation.

Input credit on steel items used in factory construction and fabrication - Eligibility to input credit on steel items [steel rods, TMT bars, plates, sheets, pipes, beams and structural steel] used for construction and fabrication of structures and equipment within the factory - HELD THAT: - The Tribunal held that the dispute could be decided by applying the ratio in Bharti Airtel Ltd. [2024 (11) TMI 1042 - SUPREME COURT]. Since the Adjudicating Authority had no opportunity to examine the disputed items under that ruling, their eligibility as inputs or capital goods required reconsideration. [Paras 6, 7]

The contested demand was remanded to the Adjudicating Authority for item-wise examination and application of the Supreme Court ratio; the appellant may adduce relevant judgments.

Final Conclusion: The appeal, insofar as contested, was allowed by way of remand. The portion covered by the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was disposed of as withdrawn.

Sale of materials supplied to works contractor - sale liable to tax - Whether supply of cement and max fault to a road-construction contractor, with their value deducted from the final bill, constituted a sale liable to tax? - HELD THAT: - The supply of cement and max fault by the respondent to the contractor and deduction of their value from the final bill were admitted. The Court held that the controversy was squarely covered by the Supreme Court decision in Karya Palak Engineer, CPWD, Bikaner Vs. Rajasthan Taxation Board, Ajmer & Others [2004 (8) TMI 114 - SUPREME COURT]. [Paras 9, 10]

The Tribunal's order holding that no sale had taken place was set aside, and the revision was allowed.

Final Conclusion: The revision was allowed and the question of law was answered in favour of treating the materials supplied to the contractor, whose value was deducted from the final bill, as a sale liable to tax.