TaxTMI Updates e-Newsletter
Sep 16,2021

Composite supply - principal supply - naturally bundled - Section 2(30) of the CGST Act, 2017 - substance over form

Composite supply - naturally bundled - principal supply - Section 2(30) of the CGST Act, 2017 - substance over form - Supplies made by Cost Centres C, D, E and G are independent supplies of goods or services and not a composite supply with the supply of intermediate cars as the principal supply. - HELD THAT: - The Authority analysed the statutory test for composite supply under Section 2(30) of the CGST Act, 2017, which requires (i) two or more taxable supplies, (ii) that they be naturally bundled, (iii) supplied in conjunction with each other in the ordinary course of business, and (iv) one of them be a principal supply. While there is no dispute that the contract manifests multiple supplies (goods and services), the determinative element is whether those supplies are "naturally bundled". The contract clearly identifies and segregates the scope of work of Cost Centres C, D, E and G; apportions contract price to discrete milestones; and requires invoicing and payment upon completion of each milestone. The activities of the respective Cost Centres are specific, separable and sequential (with later activities commencing only upon completion of earlier milestones), and each supply is identifiable and chargeable independently. The creation of cost centres and milestone-based pricing was held to reflect the substance of the parties' bargain and not an artificial device to enable cash flows; consequently the elements are not so integrated that removing one would alter the nature of the others. On these facts the constituent supplies are not "naturally bundled" within the meaning of Section 2(30) and therefore do not constitute a composite supply with the supply of intermediate cars as principal supply. The Authority accordingly rejected the AAR's contrary conclusion and held that each Cost Centre's supply must be assessed on its own character and charged at the GST rate applicable to that supply. [Paras 20, 21, 22, 23, 24]

Supplies by Cost Centres C, D, E and G are independent supplies; they shall be taxed according to their nature (goods or services) and at the GST rates applicable to those supplies.

Final Conclusion: Appeal allowed; the AAR ruling in KAR/ADRG 20/2021 dated 6.4.2021 is set aside insofar as it held the supplies from Cost Centres C, D, E and G to be a composite supply. The supplies are independent and taxable at the rates applicable to goods or services respectively, as reflected in the order.

Service of notice or order - natural justice - requirement of service - GST portal electronic service credibility - personal affidavit of assessing authority regarding upload - impleadment of Goods and Services Tax Network

Impleadment of Goods and Services Tax Network - Permission to implead Goods and Services Tax Network as respondent no.4 - HELD THAT: - The Court allowed the petitioner to implead the Goods and Services Tax Network through its competent authority as respondent no.4 during the course of the day. This was recorded as a procedural direction to enable proper parties to be before the Court for subsequent proceedings. [Paras 1]

Permission granted to implead Goods and Services Tax Network as respondent no.4.

Service of notice or order - GST portal electronic service credibility - natural justice - requirement of service - Whether the record shows effective service of Form GST DRC-07 dated 20.07.2021 on the petitioner - HELD THAT: - The Court examined the document annexed to the writ petition and the alternate Form GST DRC-07 produced with the revenue's written instructions. While one copy annexed to the petition lacked reasons, the version produced with the instructions contained reasons. The assessing authority's reliance on the portal upload alone was found insufficient because the written instructions did not disclose date, time, description of document or total pages uploaded. Given that notices and orders are submitted online through the GST portal, the Court emphasised that the credibility and completeness of the electronic service process must be ensured to protect the minimum requirements of the rule of natural justice. There was no material before the Court to accept the revenue's submissions about service. [Paras 4, 5, 7, 8]

The Court did not accept the revenue's claim of service on the existing material; the sufficiency and credibility of portal-based service was questioned.

Personal affidavit of assessing authority regarding upload - Direction for filing a personal affidavit by the assessing authority to establish when the order was uploaded - HELD THAT: - Because the records placed before the Court did not establish the precise particulars of the alleged upload (date, time, document description, number of pages), the Court directed that a personal affidavit be filed by the assessing authority-respondent no.2 within one week to establish when the entire order GST DRC-07 dated 20.07.2021 was uploaded. The Court stayed from issuing any direction to the Goods and Services Tax Network until receipt of that personal affidavit. [Paras 9, 10]

Assessing authority directed to file a personal affidavit within one week to establish upload particulars; no direction issued to GSTN pending that affidavit.

Final Conclusion: The petitioner was permitted to implead the Goods and Services Tax Network as respondent no.4. The Court found the material on record inadequate to accept the revenue's claim of electronic service of Form GST DRC-07 dated 20.07.2021, emphasised the necessity of credible portal-based service to satisfy natural justice, and directed the assessing authority to file a personal affidavit within one week to establish when the order was uploaded; listing was fixed for further hearing on 21.09.2021.

Conditions of use of amount available in electronic credit ledger - restriction on use of Input Tax Credit - expiry of one-year restriction under Rule 86-A(3) - power to allow debit upon satisfaction under Rule 86-A(2) - fraudulently availed or ineligible input tax credit

Expiry of one-year restriction under Rule 86-A(3) - de-blocking of electronic credit ledger - Direction to de-block the Input Tax Credit blocked under Rule 86-A on expiry of the one-year restriction - HELD THAT: - Rule 86-A(3) squarely provides that any restriction imposed on the electronic credit ledger shall cease to have effect after expiry of one year from the date of imposing such restriction. The account in question was blocked on 28.01.2020 and there is no dispute that a period of one year has elapsed. Although respondents relied on the availability of a discretionary remedy under Rule 86-A(2) to permit debit if satisfied that disallowing conditions no longer exist, the statutory provision in sub-rule (3) operates independently to terminate the restriction after one year. Having regard to the clear mandate of Rule 86-A(3) and the undisputed chronology, the Court directed respondents to de-block the electronic credit ledger and permit utilization of the blocked input tax credit within seven days.

Respondents directed to de-block the Input Tax Credit blocked on 28.01.2020 and permit utilization of the blocked credit within seven days.

Final Conclusion: Writ petition succeeds to the extent of directing respondents to de-block and permit utilization of the Input Tax Credit blocked on 28.01.2020, in view of the statutory expiry of the one-year restriction under Rule 86-A(3); matter listed after six weeks.

Anticipatory bail under Section 438 Cr.P.C. - circular trading - failure to cooperate with investigation disentitling grant of anticipatory bail - investigation at a nascent stage - likelihood of absconding as ground for denial of anticipatory bail - custodial interrogation unnecessary where case is documentary

Anticipatory bail under Section 438 Cr.P.C. - failure to cooperate with investigation disentitling grant of anticipatory bail - investigation at a nascent stage - likelihood of absconding as ground for denial of anticipatory bail - circular trading - Anticipatory bail application filed by the director of a company facing investigation under provisions of the CGST Act was rejected. - HELD THAT: - The applicant sought anticipatory bail apprehending arrest in relation to alleged circular trading and wrongful availing of input tax credit. The respondent's case, at the prima facie stage, attributes to the applicant substantial involvement with companies operated by the main accused and availing/utilising ITC to the extent alleged by the department. Although the applicant attended the department once and produced certain documents, the record and respondent's say indicate non-attendance pursuant to subsequent summons and non-adherence to directions of the predecessor court. The court concludes that the applicant's conduct of not appearing for further investigation and not complying with interim directions disentitles him to protection. Given that the investigation is at a nascent stage and the applicant is alleged to possess material information and yet has not been forthcoming, there is a real prospect of hampering the investigation and a likelihood of absconding. On these grounds the court finds it not a fit case to grant anticipatory bail.

Anticipatory Bail Application No.1655/2020 rejected.

Final Conclusion: The application for anticipatory bail was refused because the applicant, though implicated in alleged circular trading and substantial unauthorised ITC utilisation, did not adequately cooperate with an ongoing nascent investigation and failed to comply with directions, creating a real risk of absconding; accordingly the anticipatory bail was denied and the application disposed of.

Reopening of assessment under Section 147 - reason recorded for reopening - omission or failure to disclose income - change of opinion - Explanation (I) to Section 115JB(2) and proviso to Section 147 - binding effect of orders of the CIT(A) and Tribunal on the Assessing Officer under Section 119 - remand for reconsideration and speaking order

Reopening of assessment under Section 147 - reason recorded for reopening - omission or failure to disclose income - change of opinion - Validity of the notice under Section 148/147 in respect of assessment year 2013-14 and the order rejecting the objection to the recorded reason for reopening. - HELD THAT: - The Court examined the recorded reason and the admitted factual position that the assessee had filed copies of accounts and required materials with the return used to complete the original assessment under Section 143(3). The Assessing Officer failed to identify any new material coming to his knowledge after the original assessment which would justify reopening on the ground of omission or failure to disclose income. The Court found that the recorded reasons indicated, at best, a successor officer's disagreement with the earlier conclusion, amounting to a change of opinion, which is not a valid basis for invoking Section 147. Reliance by the Assessing Officer on the Explanations under Section 147 was not shown to displace the admitted fact that the material was already before the assessing authority at the time of the original assessment. Consequently the impugned order rejecting the objection and the subsequent notice under Section 142(1) cannot stand in the present form.

Impugned order rejecting the objection and consequent proceedings under Section 147/148 set aside; matter remanded for limited reconsideration.

Binding effect of orders of the CIT(A) and Tribunal on the Assessing Officer under Section 119 - remand for reconsideration and speaking order - Whether the Assessing Officer ought to have considered and referred to the Tribunal/CIT(A) decision relied upon by the assessee (National Insurance Co. Ltd.) before rejecting the objection to reopening. - HELD THAT: - The petitioner specifically relied upon the Tribunal's judgment in Deputy Commissioner of Income-tax, Circle-6, Kolkata Vs. National Insurance Co. Ltd., and the Court noted that the Assessing Officer's rejection order did not advert to or deal with that precedent, despite the admitted position that relevant materials had been placed before the original assessing authority. Given that orders of the CIT(A) and the Tribunal are binding on subordinate assessing officers under the statutory scheme, the absence of any consideration of that decision in the rejection order rendered the order unsatisfactory. The Court therefore directed that the Assessing Officer shall reconsider the recorded reason and the objection after explicitly considering the cited Tribunal judgment and the contention of change of opinion, and shall pass a fresh speaking order after hearing the assessee or its authorised representative within four weeks from communication of this order.

Issue remanded to the Assessing Officer for limited reconsideration and fresh speaking order after hearing, including consideration of the cited Tribunal judgment.

Final Conclusion: The petition is allowed to the extent that the order rejecting the objection to the recorded reason for reopening and the consequent notices are set aside; the matter is remanded to the Assessing Officer to reconsider the recorded reason and the objection in light of the cited Tribunal decision and the contention of change of opinion, and to pass a fresh speaking order after hearing the assessee within four weeks.

Admissibility of revision under Section 264 against order rejecting application under Section 270AA(4) - Scope of Section 270AA(6) - bar on appeal or revision only where immunity application has been accepted - Requirement of de-novo consideration and personal hearing on revision under Section 264

Admissibility of revision under Section 264 against order rejecting application under Section 270AA(4) - Scope of Section 270AA(6) - bar on appeal or revision only where immunity application has been accepted - Whether Section 270AA(6) precludes an application for revision under Section 264 against an Assessing Officer's order rejecting an application made under Section 270AA(1). - HELD THAT: - The court interpreted Sub Section (6) of Section 270AA as operating only where an assessee's application under Section 270AA(1) has been accepted under Section 270AA(4), in which event no appeal under Section 246A or revision under Section 264 against the underlying assessment or reassessment is admissible. That provision does not create any bar to challenging an order of the Assessing Officer which rejects the assessee's application under Section 270AA(1). Consequently, the Principal Commissioner was not justified in rejecting the revision petition under Section 264 on the ground that Section 270AA(6) forbids such revision. The impugned order was set aside and the matter remanded for fresh consideration of the Section 264 application on merits after affording personal hearing and opportunity to file further documents, in accordance with law. [Paras 6, 7, 8]

Impugned order set aside; matter remanded to Respondent No.1 for de novo consideration of the Section 264 application impugning the Assessing Officer's order under Section 270AA(4), with personal hearing and opportunity to produce documents; order to be decided within six weeks.

Final Conclusion: The Principal Commissioner's rejection of the revision petition on the basis that Section 270AA(6) bars revision was incorrect; the order is set aside and the Section 264 application is remitted for fresh, reasoned consideration with personal hearing and an opportunity to place documents, to be completed within six weeks.

Faceless assessment and right to personal hearing - Interpretation of 'may' in Section 144B(7)(vii) - obligation to consider request for personal hearing - Non est assessment where procedure under the faceless assessment scheme is not followed - Remand for grant of personal hearing by video conferencing and issuance of a reasoned order

Faceless assessment and right to personal hearing - Interpretation of 'may' in Section 144B(7)(vii) - Non est assessment under Section 144B(9) - Impugned assessment order was passed without affording the petitioner the personal hearing available under the faceless assessment scheme, and therefore was vitiated. - HELD THAT: - The Court examined the scheme of faceless assessment, in particular clause (vii) of Section 144B(7) which permits an assessee to request a personal hearing where a variation is proposed. Relying on precedent that construed the word 'may' in clause (vii) as not absolving the revenue from its obligation to consider and deal with requests for personal hearing, the Court held that the petitioner, who had sought a virtual hearing and filed detailed submissions, was entitled to have that request considered. Non-compliance with the procedure under Section 144B renders assessments made thereafter liable to be set aside, and the impugned assessment dated 15th April, 2021 was therefore held to be vitiated for non-observance of the faceless assessment procedure and denial of opportunity of personal hearing. [Paras 6, 7, 8]

Impugned assessment order dated 15th April, 2021 set aside for failure to afford the personal hearing contemplated by the faceless assessment scheme.

Remand for grant of personal hearing by video conferencing - Requirement to pass a reasoned order after hearing - The matter was remanded to the Assessing Officer to grant a video-conferencing personal hearing and thereafter pass a reasoned order in accordance with law. - HELD THAT: - Having found that the petitioner was not afforded the opportunity of a personal hearing despite requesting one under the faceless assessment provisions, the Court directed that the assessment be re-opened to the extent necessary and remitted the matter to the Assessing Officer. The Assessing Officer is to provide the petitioner an opportunity of hearing by video conferencing and thereafter pass a reasoned order applying the relevant provisions of law and considering the petitioner's submissions. [Paras 8]

Matter remanded to the Assessing Officer to grant video-conferencing hearing and thereafter pass a reasoned order.

Final Conclusion: The assessment order dated 15th April, 2021 for Assessment Year 2018-19 is set aside for failure to afford the personal hearing under the faceless assessment scheme; the matter is remitted to the Assessing Officer to grant a video-conferencing hearing and thereafter pass a reasoned order in accordance with law.

Validity of notice issued under Section 148 - Applicability of newly inserted Section 148A - Effect of Ministry of Finance notifications extending time-limits - Delegated power under the Taxation & Other Laws (Relaxation & Amendment of Certain Provisions) Act, 2020 - Conditional legislation and permissible delegation to the executive

Validity of notice issued under Section 148 - Applicability of newly inserted Section 148A - Effect of Ministry of Finance notifications extending time-limits - Notice dated 28.06.2021 issued under Section 148 for Assessment Year 2017-2018 is valid despite insertion of Section 148A. - HELD THAT: - The Finance Act, 2021 inserted Section 148A which imposed pre-conditions before issuing notices under Section 148. However, Parliament by the Taxation & Other Laws (Relaxation & Amendment of Certain Provisions) Act, 2020 empowered the Central Government to extend time-limits affected by the pandemic. The Central Government, through notifications dated 31.03.2021 and 27.04.2021, extended the end date for actions under the Income-tax Act and expressly provided that for issuance of notice under Section 148 the provisions of Sections 148, 149 and 151, as they stood on 31.03.2021, would apply. Those notifications therefore deferred the operation of the newly inserted Section 148A and preserved the pre-amendment regime up to 30.06.2021. The delegation effected by the enabling Act and exercised by the Ministry of Finance was a permissible conditional legislative delegation in the extraordinary circumstances of the pandemic and did not impermissibly infringe legislative domain. Applying those notifications, the reassessment mechanism as it existed prior to the amendment continued to operate for the notified period and the notice dated 28.06.2021 falls within that extended period and is accordingly saved. [Paras 10, 11]

The notice under Section 148 dated 28.06.2021 is valid and the petitions are dismissed.

Final Conclusion: The High Court upheld the notice issued under Section 148 dated 28.06.2021 for Assessment Year 2017-2018, holding that Ministry of Finance notifications lawfully extended the pre-amendment applicability of Section 148 and deferred Section 148A; the petitions are dismissed.

Exclusion of freight, telecommunication and insurance from export turnover and total turnover - computation of deduction under Section 10B - allowance of expenses incurred in foreign exchange for providing technical services outside India - deduction under Section 10A/10B to be given effect in computation of gross total income under Chapter IV and not at stage of computing total income under Chapter VI - application of precedent in Commissioner of Income-tax, Central - III v. HCL Technologies Ltd. and Sak Soft

Exclusion of freight, telecommunication and insurance from export turnover and total turnover - computation of deduction under Section 10B - application of precedent in Commissioner of Income-tax, Central - III v. HCL Technologies Ltd. - Telecommunication charges and expenditure in foreign currency are to be excluded from both the export turnover and the total turnover for the purpose of computing deduction under Section 10B. - HELD THAT: - The Court followed the ratio of the Hon'ble Supreme Court in Commissioner of Income-tax, Central - III v. HCL Technologies Ltd. and subsequent Division Bench decisions of this Court, holding that items excluded from export turnover (such as freight, telecommunication and insurance) must also be excluded from total turnover; otherwise the formula for computing the deduction would be unworkable and lead to absurd results. Applying that principle, the tribunal's conclusion to exclude telecommunication charges and foreign currency expenditure from both export and total turnover was upheld and the questions of law answered against the Revenue. The Court observed that the same principle applies to expenses attributable to delivery of software and to expenses incurred in foreign exchange for rendering technical services outside India, and these must be excluded from total turnover in the same proportion as from export turnover.

Question answered against the Revenue; telecommunication charges and foreign-exchange expenditure are excluded from both export and total turnover for Section 10B computation.

Computation of deduction under Section 10B - exclusion of freight and insurance from export and total turnover - application of Sak Soft precedent - The Tribunal was correct in directing the Assessing Officer to re-compute income by excluding freight and insurance from both export turnover and total turnover while computing deduction under Section 10B. - HELD THAT: - Relying on this Court's unreported decisions in Sak Soft and other Division Bench precedents, and following the Supreme Court's guidance, the Court affirmed that deduction under Section 10B requires exclusion of freight and insurance from export turnover and correspondingly from total turnover to give effect to the statutory scheme and to avoid an illogical computation. The tribunal's direction for recomputation in line with those precedents was accepted and the substantial question answered against the Revenue.

Question answered against the Revenue; direction to recompute income excluding freight and insurance from both export and total turnover is sustained.

Deduction under Section 10A/10B to be given effect in computation of gross total income under Chapter IV and not at stage of computing total income under Chapter VI - applicability of Clauses (ii) and (iii) of Section 10B(2) - Deductions under Section 10A/10B are to be given effect at the stage of computing gross total income (Chapter IV) and not by manipulating the computation of total income under Chapter VI; further, applicability of Clauses (ii) and (iii) of Section 10B(2) does not preclude entitlement where there is merely a relocation of business premises or use of existing plant and machinery. - HELD THAT: - The Court relied on Division Bench and Tribunal authorities which held that the statutory scheme contemplates that deductions under Sections 10A/10B operate when computing gross total income and cannot be nullified by earlier set offs or depreciation adjustments made at the total income stage. The Court also noted precedents that mere transfer of business place or retention of previously charged plant and machinery does not automatically defeat Clauses (ii) and (iii) of Section 10B(2). Applying these settled principles, the Court concluded that the tribunal's approach was correct and that the Revenue's contrary contention failed.

Question answered against the Revenue; deductions under Sections 10A/10B are to be given effect in Chapter IV computation and the tribunal's findings on eligibility stand.

Final Conclusion: Following binding Supreme Court and Division Bench precedents, the Court dismissed the Revenue's appeal for Assessment Year 2009-2010 and answered the framed substantial questions of law against the Revenue, upholding the tribunal's directions to exclude specified expenses from both export and total turnover and to recompute the deduction under Section 10B accordingly; no costs.

Quashing of criminal prosecution - prosecution under Section 276C of the Income Tax Act - penalty proceedings under Section 271(1)(c) - payment of penalty after show cause notice - pendency of appellate proceedings - wilful attempt to evade tax

Quashing of criminal prosecution - payment of penalty after show cause notice - prosecution under Section 276C of the Income Tax Act - pendency of appellate proceedings - wilful attempt to evade tax - Validity of criminal complaints filed after payment of the demanded penalty and during pendency of appeal against the levy of penalty. - HELD THAT: - The Court found that the petitioner, whose assessment and penalty demand were under challenge in pending appellate proceedings (T.C.A.No.876 of 2016), received a show cause notice and responded admitting liability and paid the demanded penalty on 27.07.2017. Despite payment and the pendency of the appeal, criminal complaints for alleged wilful concealment under Section 276C were filed subsequently in October 2017. The Court observed there was no allegation or material demonstrating that the petitioner wilfully evaded payment after receiving the notice, and that prosecution was launched without taking into account the payment and the pending appellate challenge. In those circumstances the continuing criminal proceedings were unsustainable and liable to be quashed. [Paras 6, 7]

Criminal Original Petitions allowed; proceedings in E.O.C.C.Nos.613 and 614 of 2017 quashed.

Final Conclusion: The High Court allowed the petitions and quashed the criminal prosecutions in E.O.C.C.Nos.613 and 614 of 2017, holding that initiation of prosecution after the petitioner had replied to the show cause notice, paid the demanded penalty and while appellate proceedings were pending was not sustainable in the absence of material showing wilful evasion.

Taxation of royalty and fees for technical services by reference to date of agreement - mutually exclusive and independent sub-clauses of Section 115A(1)(b) - application of treaty or domestic law whichever is more beneficial under Section 90(2)

Taxation of royalty and fees for technical services by reference to date of agreement - mutually exclusive and independent sub-clauses of Section 115A(1)(b) - application of treaty or domestic law whichever is more beneficial under Section 90(2) - Whether royalty income arising under different agreements executed before and on/after 01.06.2005 can be taxed by applying the rate applicable to each agreement separately (including applying DTAA rates where beneficial) rather than aggregating all such royalty income and applying a single rate. - HELD THAT: - The Court held that the Tribunal was right to treat royalty receipts arising under agreements executed on different dates as separate streams for taxation. The provisions of Section 115A(1)(b) (and its sub-clauses) create distinct charges and operate independently; the sub-clauses are mutually exclusive and permit computation of tax in respect of each category separately. The statutory framework and explanatory notes recognise different rates for royalty/FTS determined with reference to the date of the underlying agreement. Applying Section 90(2), the assessee is entitled to the benefit of the more favourable regime - treaty or domestic provision - to the extent applicable. Consequently, it is permissible to apply DTAA rates to royalties attributable to agreements entered into on or before 01.06.2005 and applicable Section 115A rates (as amended) to royalties under later agreements, rather than aggregating all royalty receipts and applying a single rate. [Paras 5, 6, 7, 8]

Tribunal's approach upheld: royalties are to be taxed with reference to the date of each agreement and the assessee may apply the more beneficial of treaty or domestic rates for each stream.

Final Conclusion: The appeal is dismissed; the substantial question of law is answered in favour of the assessee by upholding the Tribunal's view that royalty income under different agreements is taxable by reference to the date of each agreement and the assessee may avail the beneficial rate (treaty or domestic) applicable to each such stream.

Section 153A - search and seizure - incriminating material - jurisdiction to assess - completed assessment

Section 153A - incriminating material - jurisdiction to assess - completed assessment - Whether the Assessing Officer could validly proceed to frame assessment under Section 153A when no incriminating material relating to the year under assessment was found during the search. - HELD THAT: - The Tribunal upheld the view taken by the Commissioner (Appeals) that initiation and framing of assessment under Section 153A is not sustainable where no incriminating material relating to the assessment year is unearthed during the search. The CIT(A)'s summary reasoning (extracted at paragraph 5) explains that although Section 153A empowers the AO to assess or reassess total income for the specified years, such power to interfere with completed assessments is exercisable only on the basis of incriminating material discovered in the search or requisitioned documents which relate to undisclosed income or property. The Tribunal examined the assessment record and found no incriminating material to support the additions; it relied on the settled legal principle as articulated by the jurisdictional High Court in CIT v. Kabul Chawla that completed assessments can be revisited under Section 153A only if the search produces material not available during the original assessment. In the absence of any such material, the assumption of jurisdiction under Section 153A was held to be bad in law and the additions deleted. The Tribunal further noted that once the assessment was held to be without jurisdiction, the other grounds raised by Revenue became academic and were not adjudicated on merits. [Paras 5, 7, 8, 9, 11]

Assumption of jurisdiction and assessment under Section 153A quashed for the year under consideration for lack of any incriminating material; Revenue's appeal dismissed.

Final Conclusion: The Tribunal dismissed the Revenue's appeal, holding that in absence of any incriminating material unearthed by the search, the AO could not validly proceed to frame assessment under Section 153A for the year under consideration; other grounds raised by Revenue were held academic and not decided.

Maintainability of appeal - limitation and time-barred assessment - quashing of assessment orders as barred by limitation - effect of prior coordinate-bench order on subsequent proceedings - absence of live order rendering appeal non-maintainable

Maintainability of appeal - quashing of assessment orders as barred by limitation - effect of prior coordinate-bench order on subsequent proceedings - absence of live order rendering appeal non-maintainable - Whether the Revenue appeals against the order of the Ld. CIT(A) for the Assessment Years 2011-12, 2012-13 and 2013-14 are maintainable in view of a prior consolidated order of a Co ordinate Bench of ITAT, Delhi which quashed the corresponding assessment orders as barred by limitation and set aside the CIT(A)'s appellate order. - HELD THAT: - The Co-ordinate Bench of the ITAT, Delhi in its consolidated order dated 30.07.2021 held that the Assessing Officer's orders dated 28.10.2016 were barred by limitation and quashed those assessment orders; it also set aside the impugned consolidated appellate order dated 25.01.2018 of the Ld. CIT(A). Those determinations remove any subsisting assessment orders or appellate orders in respect of the Assessment Years in question. Since the corresponding assessment orders and the CIT(A) order no longer have any existence, the present appeals filed by the Revenue against the CIT(A) order lack a live controversy and therefore have no legs to stand. Respectful deference is due to the earlier coordinate-bench ruling; in consequence the Revenue's appeals are not maintainable at present and must be dismissed.

Revenue's appeals are dismissed as not maintainable because the corresponding assessment orders and the impugned CIT(A) order have been quashed/ set aside by a prior Co-ordinate Bench order holding them barred by limitation.

Final Conclusion: All three appeals filed by the Revenue are dismissed as not maintainable since the corresponding assessment orders and the impugned CIT(A) order have been quashed/ set aside by a prior Co ordinate Bench order on the ground of limitation, leaving no subsisting order to sustain these appeals.

Cash credit under section 68 - requirement of creditor confirmation and corroborative ledger/invoice/TDS evidence - foreign exchange fluctuation loss as revenue expenditure - allowability under section 37 - weight to documentary evidence produced before appellate authority and remand report

Cash credit under section 68 - requirement of creditor confirmation and corroborative ledger/invoice/TDS evidence - weight to documentary evidence produced before appellate authority and remand report - Addition made by the Assessing Officer under section 68 in respect of credit balances of two creditors was not sustainable. - HELD THAT: - Assessing Officer disallowed closing balances of two creditors for want of confirmations and treated them as unexplained cash credits. The assessee had placed ledger accounts, invoices, TDS certificates and other documentary evidence before the CIT(A), and the remand report did not impugn the genuineness of those documents. Purchases and corresponding sales were accepted, and the amounts were subsequently written back and offered to tax in a later year. The Tribunal held that the addition rested on assumption and surmises and could not be sustained where corroborative documentary evidence established the trading relationship and genuineness of the creditors' balances; consequently the CIT(A) was incorrect in confirming the addition. [Paras 5, 7]

Addition under section 68 in respect of the two creditors is deleted and Ground No. 1 is allowed.

Foreign exchange fluctuation loss as revenue expenditure - allowability under section 37 - Exchange rate fluctuation loss claimed by the assessee is an allowable revenue expenditure. - HELD THAT: - The loss on exchange fluctuation related to reservation fees, tour and travel/marketing expenses and similar revenue transactions; it was reflected in the profit and loss account and no adjustment under section 43A was reported by the tax auditor. Revenue did not dispute the nature of the transactions. The Tribunal applied settled principle that foreign exchange loss on revenue transactions is allowable under section 37 and therefore reversed the disallowance. [Paras 8, 10]

The exchange fluctuation loss is allowed and Ground No. 2 is allowed.

Final Conclusion: The assessee's appeal is allowed: the addition under section 68 in respect of two creditors is deleted and the claimed foreign exchange loss is allowed as a revenue expenditure; appeal disposed accordingly.

Classification of interest income as business income v. income from other sources - allowability of interest expenditure having nexus with interest income - rule of consistency in assessment - relevance of Memorandum of Association to scope of business activities - precedential value of co-ordinate Tribunal decisions

Classification of interest income as business income v. income from other sources - rule of consistency in assessment - relevance of Memorandum of Association to scope of business activities - precedential value of co-ordinate Tribunal decisions - Interest income received on loans advanced by the assessee for the year 2012-13 is to be treated as business income and not as income from other sources. - HELD THAT: - The Tribunal upheld the CIT(A)'s conclusion that the assessee's activity of advancing funds falls within the scope of its business. The assessee had an established real estate business, had earlier reflected real estate profits, and its Memorandum of Association permitted receipt of deposits and advancement of money; consequently the activity did not violate the company's objects. The Tribunal also applied the rule of consistency, noting that revenue had accepted similar treatment in other relevant assessment years and that co-ordinate Tribunal decisions (including the assessee's own appeals and those of sister concerns) supported treating such interest as business income. On this combined factual and legal matrix the Tribunal found no infirmity in treating the interest as business income. [Paras 9, 10, 11]

Interest on loans advanced for 2012-13 is assessable as business income.

Allowability of interest expenditure having nexus with interest income - classification of interest income as business income v. income from other sources - Interest expenditure corresponding to the interest income earned is allowable where there is a direct nexus between the borrowings and the advances made. - HELD THAT: - The Tribunal found a complete nexus between funds borrowed and amounts advanced by the assessee: the assessee had obtained substantial unsecured loans which were substantially advanced to directors and others and to meet accumulated losses, and it had no other significant source of funds. Given that nexus, the interest expenditure was held to be incurred wholly and exclusively for the purpose of the assessee's business and therefore deductible against the business interest income. The Tribunal further referred to earlier orders where similar interest expenditure had been allowed and relied on those precedents in confirming the allowability. [Paras 8, 11]

Corresponding interest expenditure is allowable to the assessee to the extent specified by the CIT(A).

Final Conclusion: The revenue's appeal is dismissed; the CIT(A)'s order treating the interest income as business income and allowing corresponding interest expenditure for AY 2012-13 is upheld.

Taxability of arbitration award - Income from other sources - classification between section 28(iv) and section 56(1) - condonation of delay

Condonation of delay - Delay in filing the revenue appeal was condoned and the appeal admitted for adjudication on merits. - HELD THAT: - The registry pointed out a delay of 254 days. The revenue filed a detailed explanation attributing delay to oversight and asserted that the CIT(A) erred in law. Having considered the condonation application and parties' submissions, the Tribunal found the cause of delay to be reasonable and exercised its discretion to condone the delay, thereby admitting the appeal for determination on merits. [Paras 3]

Delay of 254 days in filing the appeal is condoned and the appeal is admitted.

Taxability of arbitration award - Income from other sources - classification between section 28(iv) and section 56(1) - The amount received pursuant to the arbitration award is taxable as income under the head 'Income from other sources' under section 56(1) and cannot be treated as income from business under section 28(iv). - HELD THAT: - The Tribunal noted that the arbitration award of Rs. 28 crores was given in consideration of a composite bundle of conditions including relinquishment of rights, withdrawal of suits, and transfer of various assets not connected with any share in partnership assets or a quantified capital account balance. There was no finding in the award or consent terms that the payment represented retirement from the firm, nor were accounts prepared to determine any share in net partnership assets. On these facts, and applying the principle that special income of a wide and inclusive nature falls under section 56(1) when not chargeable under any other head, the Tribunal agreed with the CIT(A)'s conclusion and the earlier coordinate-bench decision upholding taxation under section 56(1) and rejecting invocation of section 28(iv). [Paras 9, 10]

Arbitration award is chargeable to tax as 'Income from other sources' under section 56(1); the ground challenging this classification is dismissed.

Final Conclusion: Delay in filing the revenue appeal was condoned; on the merits the Tribunal upheld the CIT(A)'s classification of the arbitration award as taxable under the head 'Income from other sources' under section 56(1) and dismissed the revenue appeal.

Deemed dividend under Section 2(22)(e) - beneficial ownership and substantial interest - acceptance of books of account and documentary evidence - burden of proof for bogus purchases - deduction under Section 80IB for sale of scrap

Deemed dividend under Section 2(22)(e) - beneficial ownership and substantial interest - Whether the advance of Rs. 8,32,29,000/- received from M/s Emirates Technologies Pvt. Ltd. is taxable as deemed dividend under Section 2(22)(e). - HELD THAT: - The Tribunal reviewed the Apex Court's observations in National Travel Service v. CIT and noted that the Apex Court had referred the matter for reconsideration, leaving the question open. In absence of an overruling of earlier binding precedent relied upon by the assessee, and having regard to the CIT(A)'s factual findings that the advance related to a business transaction for purchase of property (supported by documents) and that those findings were not rebutted by Revenue, the Tribunal declined to disturb the deletion. The Tribunal held that the Department's reliance on the Apex Court's reservation did not justify reversing the factual and legal conclusion reached by the CIT(A). [Paras 5]

Addition under Section 2(22)(e) deleted; ground of appeal dismissed.

Burden of proof for bogus purchases - acceptance of books of account and documentary evidence - Whether the addition of Rs. 41,97,754/- on account of alleged bogus purchases from M/s New Jain Spares was justified. - HELD THAT: - The Tribunal noted that the Assessing Officer's sole basis for disallowance was the assessee's inability to produce the supplier in person, whereas the assessee had produced purchase invoices, bank payment evidence, VAT reconciliation, quantitative reconciliation and regular trading dealings with the party across assessment years. Where books and documentary evidence establish transactions and are accepted, non-appearance of the supplier cannot alone sustain a finding of bogus purchases. The CIT(A)'s deletion, though relying on earlier years, was supported by the documentary record examined by the Tribunal and therefore upheld. [Paras 5]

Addition on account of bogus purchases deleted; ground of appeal dismissed.

Deduction under Section 80IB for sale of scrap - Whether receipts from sale of scrap qualify for deduction under Section 80IB. - HELD THAT: - The Tribunal observed that receipts from sale of scrap were generated from activities integral to the assessee's manufacturing process and are thus part and parcel of gains of the industrial undertaking. The view is supported by judicial precedent (CIT v. Sadhu Forging Ltd.) and by consistent orders in related group cases. On this basis the CIT(A)'s deletion of disallowance was maintained even though the CIT(A) relied on earlier orders rather than extensive fresh reasoning in the impugned order. [Paras 5]

Disallowance deleted; deduction under Section 80IB upheld and ground of appeal dismissed.

Final Conclusion: The Revenue's appeal is dismissed and the additions/deletions contested in Assessment Year 2013-14 are confirmed as deleted by the appellate authorities.

Rectification of order under section 254(2) - mistake apparent on the record - contingent liability versus allowable expenditure - addition to book profits under section 115JB

Rectification of order under section 254(2) - mistake apparent on the record - contingent liability versus allowable expenditure - addition to book profits under section 115JB - Whether the Tribunal should rectify its earlier order to allow the ground that the provision for sales incentive was not a contingent liability and therefore not to be added to book profits under section 115JB. - HELD THAT: - The Tribunal examined its prior concurrent findings and found that in Para 20 of the common order it had held the provision for sales incentive to be an allowable expenditure and not a contingent liability. That conclusion necessarily precluded treating the same amount as a contingent liability for the purpose of adding it to book profits under section 115JB. The Tribunal recognised that dismissal of the corresponding ground in ITA No.463/Del/2016 (recorded in Para 53) was inconsistent with the holding in Para 20 and constituted a mistake apparent on the record. Applying the corrective power under section 254(2), the Tribunal concluded that the ground should have been allowed and that the order should be rectified to reflect that the provision is not a contingent liability and therefore cannot be added to book profits under section 115JB. [Paras 6]

Rectification under section 254(2) allowed; Para 53 of the order in ITA No.463/Del/2016 is rectified to hold the assessee's grounds allowed, treating the provision as allowable expenditure and not a contingent liability for section 115JB purposes.

Final Conclusion: Miscellaneous Application allowed; the Tribunal rectified its earlier order to permit the ground that the provision for sales incentive is not a contingent liability and therefore is not liable to be added to book profits under section 115JB for Assessment Year 2009-10.

Revision under section 263 - failure to consider the assessee's reply - opportunity of being heard - remand for fresh consideration - substantial justice

Revision under section 263 - failure to consider the assessee's reply - opportunity of being heard - remand for fresh consideration - Whether the order passed by the Principal Commissioner of Income Tax under section 263 is to be sustained where the assessee's detailed reply was not before the Pr. CIT at the time of passing the order. - HELD THAT: - The Tribunal noted that the Pr. CIT's order records that the assessee had not filed any reply to the show cause notice (para 5). The assessee, however, produced a detailed reply which was filed in the office of the Pr. CIT on 30/03/2021 (pages 40-51 of the paper book). The due date for submission was 23/03/2021, and the acknowledgement shows filing on 30/03/2021; consequently the Pr. CIT did not have that reply before passing the order on 30/03/2021 (para 6). Considering the factual position that the specific reply/defence was not available to the Pr. CIT at the time of adjudication, and in the interest of substantial justice, the Tribunal concluded that the matter should be restored to the file of the Pr. CIT for fresh consideration after taking the assessee's reply and any other produced documents into account, and after affording an appropriate opportunity of hearing (para 7). The Tribunal expressly clarified that this restoration does not express any view on the merits of the underlying tax issues (para 8). [Paras 5, 6, 7, 8]

Matter restored to the file of the Principal CIT for fresh consideration of the section 263 proceedings after considering the assessee's reply (filed 30/03/2021) and after affording the assessee an opportunity of being heard; no adjudication on merits by the Tribunal.

Final Conclusion: The appeal is allowed for statistical purposes: the ITAT set aside the Pr. CIT's order under section 263 and remanded the matter to the Pr. CIT to reconsider the issue afresh after taking into account the assessee's reply and granting an appropriate opportunity of hearing; the Tribunal made no comment on the substantive merits.

Anticipatory bail - maintainability of anticipatory bail at stage of notice under Section 108 of the Customs Act - blanket bail - notice under Section 108 of the Customs Act - allegation of conspiracy and loss to the State Exchequer

Anticipatory bail - maintainability of anticipatory bail at stage of notice under Section 108 of the Customs Act - blanket bail - Petition for anticipatory bail at the stage when notice under Section 108 of the Customs Act has been issued is not maintainable. - HELD THAT: - The Court observed that the petitioner had been issued notices under Section 108 on various dates but, instead of appearing before the Customs Authorities, approached the Sessions Court for anticipatory bail which was dismissed. Relying on the Supreme Court decision in Union of India v. Padam Narain Aggarwal, the Court held that granting bail at the notice stage would amount to a blanket bail which is impermissible. In these circumstances the present petition for anticipatory bail was held not maintainable and liable to be dismissed.

Petition for anticipatory bail at the stage of issuance of notice under Section 108 of the Customs Act is not maintainable and is dismissed.

Allegation of conspiracy and loss to the State Exchequer - notice under Section 108 of the Customs Act - Even on merits, anticipatory bail was declined having regard to serious allegations of active involvement in conspiracy causing substantial loss to the State Exchequer. - HELD THAT: - The Court noted the prosecution's contention that others implicated have been arrested and their statements link the petitioner to the conspiracy, and that the alleged evasion resulted in a large loss to the exchequer. Taking these serious allegations into account, the Court found that, notwithstanding procedural objections, the merits did not favour grant of anticipatory bail and therefore the petition must be dismissed on merits as well.

On merits, anticipatory bail is declined in view of serious allegations of conspiracy and substantial loss to the State Exchequer; petition dismissed.

Final Conclusion: The petition for anticipatory bail is dismissed both on the ground of non maintainability at the notice stage (to avoid granting blanket bail) and on merits having regard to the serious allegations of conspiracy and substantial loss to the State Exchequer.

Release of imported goods on execution of bond - bank guarantee as security - waiver of detention charges - application of prior Division Bench direction by parity of reasoning

Release of imported goods on execution of bond - bank guarantee as security - waiver of detention charges - application of prior Division Bench direction by parity of reasoning - Order directing release of imported consignment on specified conditions and waiving detention charges - HELD THAT: - The Court found that the facts and legal controversy in the present matter are identical to those considered by the Division Bench in earlier Writ Appeals and, notwithstanding the Revenue's submission about a differing tariff heading, applied the same remedial approach. The appellants were directed to release the imported goods on condition that the respondent executes a bond for the value of the goods and furnishes a bank guarantee/security to the extent of 10% of the value of the goods. The respondent was given two weeks from receipt of the judgment to fulfil these obligations, and the appellants were directed to release the goods within two weeks thereafter. The Court also ordered that the detention charges shall stand waived. The directives implement the prior Division Bench's practice of conditional release pending adjudication where parity of circumstances exists, while preserving the Revenue's right to proceed with adjudication thereafter. [Paras 7, 8]

The Revenue is directed to release the goods on the respondent executing a bond for the value of the goods and providing a bank guarantee equal to 10% of the value; the respondent shall complete these within two weeks and the Revenue shall release the goods within two weeks thereafter; detention charges are waived.

Final Conclusion: Writ Appeal disposed of by directing conditional release of the imported consignment on execution of a bond and a 10% bank guarantee within the stipulated timelines; detention charges waived; no costs.

Finality of adjudication order in absence of appeal - penalty in personam - deposit of penalty as condition for release of passport - confiscation and redemption fine - recovery under Section 142 of the Customs Act

Finality of adjudication order in absence of appeal - penalty in personam - deposit of penalty as condition for release of passport - recovery under Section 142 of the Customs Act - Whether the petitioner's passport should be released and permission granted to travel abroad without depositing the penalty imposed by the Customs adjudication order which has attained finality. - HELD THAT: - The Court found that no appeal was filed against the order of the Additional Commissioner of Customs so that adjudication has attained finality and the penalty imposed is a personal obligation of the petitioner. Because the penalty is in personam and the petitioner is an Afghan national with no property in India, recovery under Section 142 of the Customs Act would not be feasible. The Court therefore held that there was no justification to release the passport and permit the petitioner to leave the country without depositing the penalty. The Court distinguished earlier decisions relied upon by the petitioner on the basis that in those cases either recovery was practicable or special circumstances justified conditional release; those considerations do not apply here given the finality of the adjudication, the in-personam nature of the penalty and the bleak prospect of the petitioner returning from Afghanistan. [Paras 5, 6, 7, 9, 10]

Petition to release passport and allow travel abroad without depositing the penalty is dismissed; passport not to be released unless the penalty is deposited.

Final Conclusion: The petition is dismissed; in view of the adjudication having attained finality and the penalty being a personal obligation of an Afghan national with no realistic prospect of recovery, the Court refused to release the petitioner's passport or permit travel abroad unless the penalty is deposited.

Claim for refund under section 27 - self-assessment as an order of assessment - modification/amendment of bill of entry under section 149 - correction of clerical or arithmetical errors under section 154 - unjust enrichment - execution nature of refund proceedings - maintainability of refund post ITC

Claim for refund under section 27 - self-assessment as an order of assessment - execution nature of refund proceedings - maintainability of refund post ITC - Whether the refund applications filed by the respondent could be entertained without modification/amendment of the relevant bills of entry in the light of the Supreme Court's decision in ITC. - HELD THAT: - The Tribunal noted the Supreme Court's holding in ITC that a self-assessment endorsement on a bill of entry amounts to an order of assessment and that refund proceedings under section 27 are executionary in nature; consequently a refund claim cannot be entertained unless the assessment (including self-assessment) is modified in accordance with law. The Tribunal observed that the Supreme Court in ITC indicated that modification may be effected under section 128 or "other relevant provisions" of the Customs Act. Having considered the parties' submissions and later authorities, the Tribunal did not finally decide the maintainability question against the respondent on this ground because the respondent advanced an alternative remedy of amendment/correction under sections 149 and 154. The Tribunal accordingly treated the availability of amendment/correction proceedings as the operative route and did not set aside the Commissioner(Appeals) on the basis of the ITC principle alone. [Paras 22, 23, 24]

The Tribunal refrained from deciding the refund's absolute maintainability under section 27 in isolation and accepted that modification of the bill of entry is required before a refund claim is entertained, while recognizing that such modification can be sought under section 128 or other relevant provisions of the Act.

Modification/amendment of bill of entry under section 149 - correction of clerical or arithmetical errors under section 154 - unjust enrichment - Whether the respondent could invoke sections 149 and 154 to amend or correct the bills of entry so as to enable refund and how such applications should be dealt with. - HELD THAT: - The Tribunal examined decisions of the Bombay High Court (Dimension Data) and the Telangana High Court (Sony India), which construed ITC as permitting amendment or correction of bills of entry under sections 149 and 154 as alternative "other relevant provisions" for modifying an assessment. The Tribunal held that amendment under section 149 is permissible subject to the proviso (amendment post clearance only on documentary evidence existing at the time of clearance) and section 154 permits correction of clerical/arithmetical mistakes at any time. In light of those authorities and the Supreme Court's clarification that modification need not be confined to section 128, the Tribunal concluded that the respondent can seek amendment/correction under sections 149/154 and that such proceedings must be adjudicated on their merits. The question of unjust enrichment, which had led the Deputy Commissioner to direct credit to the Consumer Welfare Fund, was not finally adjudicated by the Tribunal but left open to decision in the amendment/correction and any subsequent refund proceedings. [Paras 24, 25, 26, 28, 29]

Respondent may invoke sections 149 and/or 154 to seek amendment or correction of the bills of entry; the authorities are obliged to adjudicate such applications on merit and in accordance with law, including the proviso to section 149, leaving questions such as unjust enrichment to be determined in the course of those proceedings.

Modification/amendment of bill of entry under section 149 - correction of clerical or arithmetical errors under section 154 - Administrative direction as to disposal of any fresh applications under sections 149/154 and consequential refund applications. - HELD THAT: - Given the age of the refund claims and the Tribunal's view that amendment/correction proceedings are available, the Tribunal directed that if the respondent files applications under sections 149 or 154 these shall be decided expeditiously and preferably within three months from filing. Any refund applications filed thereafter, following the decision on amendment/correction, shall also be decided expeditiously. The Tribunal disposed of the departmental appeals by issuing these directions rather than deciding merits of unjust enrichment or reopening the Commissioner(Appeals)' order. [Paras 29, 30, 31]

If Vivo Mobile files applications under sections 149 or 154, the authorities shall decide them expeditiously (preferably within three months); consequent refund claims shall also be disposed of promptly. The appeals are disposed with these observations.

Final Conclusion: Appeals disposed. Tribunal recorded that amendment or correction of the bills of entry under sections 149/154 is an available remedy (consistent with ITC as permitting modification under "other relevant provisions"), left questions of unjust enrichment to be decided in those proceedings, and directed expedited adjudication (preferably within three months) of any such applications and consequent refund claims.

DRI officer not a "proper officer" within the meaning of Section 28(4) read with Section 2(34) of the Customs Act - show cause notice vitiated for want of jurisdiction - proceedings and penalty founded on a jurisdictionally infirm show cause notice cannot be sustained - competent authority may proceed afresh in accordance with law

DRI officer not a "proper officer" within the meaning of Section 28(4) read with Section 2(34) of the Customs Act - show cause notice vitiated for want of jurisdiction - proceedings and penalty founded on a jurisdictionally infirm show cause notice cannot be sustained - Validity of the show cause notice dated 25.02.2011 issued by Additional Director, DRI and the consequence for the demand and penalty proceedings initiated thereon. - HELD THAT: - The show cause notice impugned in these proceedings was issued by an Additional Director of the Directorate of Revenue Intelligence. The Tribunal applied the decision of the Hon'ble Supreme Court in Canon India Pvt. Ltd. holding that a DRI officer is not a "proper officer" within the meaning of Section 28(4) read with Section 2(34) of the Customs Act, and noted that the Apex Court, in Agarwal Metals and Alloys, followed that precedent and dismissed departmental appeals where SCNs were issued by DRI officers. In view of those authoritative rulings, the show cause notice issued by the DRI prior to the amendment referred to was held to be vitiated for want of jurisdiction. Consequentially, any demand or penalty imposed pursuant to that jurisdictionally infirm show cause notice cannot be sustained. The Tribunal, while setting aside the impugned order, recognised that the competent authority remains free to proceed in accordance with law. [Paras 4, 5]

The show cause notice issued by the DRI is vitiated for want of jurisdiction; the demand and penalty proceedings founded on it cannot be sustained; the impugned order is set aside and the appeal is allowed with consequential relief.

Final Conclusion: Appeal allowed; impugned order set aside because the SCN issued by the DRI was without jurisdiction; the department remains free to initiate proceedings afresh through the competent authority in accordance with law.

Jurisdiction of the National Company Law Tribunal and exclusivity under Section 430 - Maintainability of writ jurisdiction under Article 226 where alternate statutory remedy exists - Power of the Central Government to initiate proceedings under Sections 241 and 242 without awaiting SFIO report - Disgorgement as an equitable civil remedy obtainable under Sections 241/242/246 read with Section 339 - Executive communication directing institution of company petition is not a judicial order

Jurisdiction of the National Company Law Tribunal and exclusivity under Section 430 - Maintainability of writ jurisdiction under Article 226 where alternate statutory remedy exists - Whether the High Court at Delhi can entertain the writ petition challenging the impugned executive letter directing filing of company petition where proceedings are before the NCLT at Allahabad. - HELD THAT: - The Court held that the challenge to the jurisdiction of the NCLT ought to have been raised before the NCLT itself and that where a statute provides an exhaustive mechanism for redressal and manifests an intention to bar other courts, writ jurisdiction should not normally be exercised except in extreme circumstances. Section 430 bars civil courts from entertaining matters which the Tribunal is empowered to determine; the Companies Act provides an alternate remedy (objections before NCLT, appeal to NCLAT and Supreme Court). Territorial jurisdiction is lacking as the company petition is filed before NCLT at Allahabad in respect of companies registered in Uttar Pradesh; mere presence of respondents' headquarters in Delhi does not confer jurisdiction. The Court emphasized lack of supervisory jurisdiction under Article 227 over the NCLT at Allahabad. Consequently the writ was not maintainable in this Court. [Paras 9, 10, 14, 16, 18]

The writ petition in the Delhi High Court is not maintainable and the objection to NCLT's jurisdiction should be raised before the NCLT; alternate statutory remedies are available.

Power of the Central Government to initiate proceedings under Sections 241 and 242 without awaiting SFIO report - Whether the Central Government is obliged to await the SFIO report before forming an opinion and filing a petition under Sections 241/242/246 read with Section 339. - HELD THAT: - The Court held that Sections 241, 242 and related provisions are not dependent on filing of an SFIO report under Section 212(12). The Central Government may, on the basis of any material before it, form the opinion that the affairs of a company are being conducted in a manner prejudicial to public interest and apply to the Tribunal; there is no statutory fetter requiring the Government to await an SFIO report before initiating proceedings under Chapter XVI. [Paras 19, 20, 21]

The Central Government can initiate proceedings under Sections 241/242/246 r/w 339 without awaiting an SFIO report.

Disgorgement as an equitable civil remedy obtainable under Sections 241/242/246 and Section 339 - Executive communication directing institution of company petition is not a judicial order - Whether disgorgement and freezing of assets can be sought under Sections 241/242/246 r/w 339 independently of the amendment introducing Section 212(14A), and whether the impugned letter is a judicial order. - HELD THAT: - The Court observed that disgorgement is a monetary equitable remedy aimed at preventing unjust enrichment and is not purely penal; such reliefs can be sought under Sections 241 and 242(1)(l)(m) read with Section 246 and Section 339, de hors the later insertion of Section 212(14A). The statutory scheme as a whole contemplates freezing, disposal or liquidation of properties/shares for public interest and recovery of undue gains. Further, the impugned letter and corrigendum are executive communications flowing from the statutory scheme and are not judicial orders or statutes; filing of a company petition under Section 241(2) is not contingent upon filing of a chargesheet in a complaint. [Paras 22, 23, 24, 25, 26]

Disgorgement and related equitable reliefs may be sought under Sections 241/242/246 r/w 339 even absent Section 212(14A); the impugned letter is an executive step and not a judicial order.

Final Conclusion: Petitions dismissed. The High Court lacks jurisdiction to entertain the challenge to the executive letter where company petitions are pending before the NCLT at Allahabad; the Central Government may initiate proceedings under Sections 241/242/246 r/w 339 without awaiting an SFIO report, and disgorgement reliefs are available as equitable remedies under those provisions.

Convening and conduct of meetings under Companies Act, 2013 for schemes of amalgamation - Virtual meetings and applicability of MCA Virtual Meeting Circulars - Notice requirements under section 230(3) and section 230(5) of the Companies Act, 2013 - Dispensing with re-issue of voluminous documents previously served - Fixation of cut-off date for determining eligibility and value of votes - Quorum and mode of voting for physical and virtual meetings

Convening and conduct of meetings under Companies Act, 2013 for schemes of amalgamation - Virtual meetings and applicability of MCA Virtual Meeting Circulars - Direction to convene and hold meetings of the equity shareholders of the Applicant Companies on 16th September, 2021 and provision for virtual mode if government restrictions prevent physical meetings - HELD THAT: - The Tribunal allowed the application and ordered that meetings of the equity shareholders of Applicant Nos.1 to 5 be convened and held physically at the specified venue on 16th September, 2021, subject to extant government restrictions due to COVID. In the event physical meetings cannot be held because of such restrictions, the meetings are to be convened and held virtually via video conferencing or other audio-visual means. Where meetings are held virtually, the framework provided in the Ministry of Corporate Affairs General Circular No. 14/2020 dated 8th April, 2020 and subsequent clarifying circulars shall be followed with necessary variations for class meetings. The mode of meeting is to be fixed by the Applicants when issuing the notices and specified in the notices.

Meetings fixed for 16th September, 2021; virtual mode authorised if physical meetings are prevented and MCA Virtual Meeting Circulars to be followed with necessary variations.

Notice requirements under section 230(3) and section 230(5) of the Companies Act, 2013 - Dispensing with re-issue of voluminous documents previously served - Extent of notices and documents to be sent for the fresh meeting and treatment of previously served scheme documents - HELD THAT: - The Tribunal directed that individual notices intimating the fresh date for convening the meetings be sent to shareholders at least thirty clear days before the meetings in accordance with Rule 6 of the Companies (Compromise, Arrangements and Amalgamations) Rules, 2016, by permitted modes of service. It was held that the copy of the scheme, explanatory statement and other documents already sent on 5th April, 2021 shall be treated as part of the fresh notice and therefore re-issuing the voluminous documents is dispensed with. The Applicants are, however, required to issue notices under section 230(5) to the statutory authorities and, in respect of Applicant Company No.5, notices under section 230(3) to unsecured creditors above the prescribed threshold as directed.

Applicants to send fresh notices at least 30 clear days before the meetings; previously dispatched scheme documents treated as part of the fresh notice; statutory and creditor notices to be issued as directed.

Fixation of cut-off date for determining eligibility and value of votes - Quorum and mode of voting for physical and virtual meetings - Fixation of cut-off date, quorum rules and voting procedure for the meetings - HELD THAT: - The Tribunal fixed 9th September, 2021 as the cut-off date for determining eligibility and value of votes for the equity shareholders' meetings. Quorum for the meetings is to be determined in accordance with section 103 of the Companies Act, 2013; for physical meetings only physical attendance counts for quorum, while for virtual meetings attendance in the virtual mode shall be counted for quorum and recorded in minutes in place of physical attendance slips. Voting at physical meetings may be by polling paper or e-voting; if meetings are held virtually, the voting procedure prescribed by the Virtual Meeting Circulars and the Companies (Management and Administration) Rules, 2014, shall be followed with necessary variations. Remote e-voting facility was directed to be provided for the period specified in the order.

Cut-off date fixed as 9th September, 2021; quorum, attendance recording and voting modalities prescribed for both physical and virtual meetings.

Notice requirements under section 230(3) and section 230(5) of the Companies Act, 2013 - Requirement for meetings of secured creditors, unsecured creditors and sole preference shareholder - HELD THAT: - On the material before it, the Tribunal recorded that Applicant Companies Nos.1 to 4 have no secured or unsecured creditors and Applicant Company No.5 has no secured creditors; accordingly meetings of secured creditors were not required. The Tribunal noted that the earlier order had dispensed with convening the meeting of unsecured creditors of Applicant Company No.5 except that notices to unsecured creditors having debt above the specified threshold were to be issued. The sole preference shareholder of Applicant Company No.5 had already given consent and the requirement to convene its meeting was dispensed with. Pursuant to the present directions, notices are to be sent to unsecured creditors of Applicant Company No.5 above the threshold under section 230(3).

Requirement to convene meetings of secured creditors of Applicants Nos.1-5 dispensed with; meeting of unsecured creditors of Applicant No.5 dispensed with except that notices to unsecured creditors above the prescribed threshold to be issued; meeting of sole preference shareholder dispensed with.

Convening and conduct of meetings under Companies Act, 2013 for schemes of amalgamation - Notice requirements under section 230(5) of the Companies Act, 2013 - Requirement to serve statutory authorities and filing of proof of service - HELD THAT: - The Tribunal directed that notices under section 230(5) along with accompanying documents, including the scheme and statement, be sent to the Regional Director (Eastern Region), Registrar of Companies, Official Liquidator, SEBI, relevant stock exchanges, Income Tax Department (with PAN) and Reserve Bank of India (for Applicant No.4). The Applicants were directed to file an affidavit proving service of notices and publication of advertisement and compliance with the Tribunal's directions at least one week before the meetings.

Statutory authorities to be served as directed and Applicants to file affidavit proving service and compliance one week prior to meetings.

Final Conclusion: The application is allowed; meetings of the equity shareholders are directed to be convened on 16th September, 2021 (physically or, if prevented by COVID restrictions, virtually) with the previously served scheme documents treated as part of the fresh notice, cut-off date fixed as 9th September, 2021, prescribed notices to creditors and statutory authorities to be issued, and compliance affidavit to be filed one week before the meetings.

Withdrawal of a Resolution Plan - modification of a Resolution Plan - binding effect of CoC approved Resolution Plan - jurisdiction of the Adjudicating Authority under Section 60(5)(c) - res judicata - time bound CIRP and 330 day outer limit - approval under Section 31 and effectiveness of a Resolution Plan - duty of the Resolution Professional to furnish information under Section 29 - Article 142 one time relief

Withdrawal of a Resolution Plan - modification of a Resolution Plan - binding effect of CoC approved Resolution Plan - approval under Section 31 and effectiveness of a Resolution Plan - Whether a successful Resolution Applicant can withdraw or modify a Resolution Plan after it has been approved by the Committee of Creditors and submitted to the Adjudicating Authority but before approval under Section 31. - HELD THAT: - The Code and the CIRP regulations create a creditor driven, time bound process in which the CoC approved plan, once placed before the Adjudicating Authority, must reach a degree of finality; there is no legislative provision or regulatory mechanism permitting unilateral withdrawal or re negotiation by a successful Resolution Applicant at that stage. The statutory scheme (Sections 29, 30, 31, 12 and related regulations) contemplates: (a) a firm role for the CoC in approving a feasible and viable plan; (b) a limited supervisory role for the Adjudicating Authority to ensure compliance with Section 30(2) and effective implementability under the proviso to Section 31(1); and (c) penal and remedial consequences post approval (Section 74) and performance security mechanisms (Regulation 36B). Permitting post submission withdrawals or modifications by a successful Resolution Applicant would undermine the time bound scheme (including the 330 day outer limit) and introduce unregulated, open ended renegotiation inconsistent with the IBC's objectives. The Court therefore rejected the appellants' submissions that contractual terms or Form H entries could supply a statutory hook to permit such withdrawals/modifications, held that CoC approved plans are creatures of the IBC (not ordinary private contracts for this interim stage), and concluded that the Adjudicating Authority has no jurisdiction to permit the relief sought by a successful Resolution Applicant in this context. [Paras 149, 152, 157, 204, 205]

Withdrawal or modification of a CoC approved Resolution Plan at the instance of the successful Resolution Applicant, after submission to the Adjudicating Authority and before approval under Section 31, is not permissible under the IBC and CIRP Regulations; the Adjudicating Authority has no power to grant such a withdrawal/modification.

Res judicata - Whether Ebix's Third Withdrawal Application was barred by res judicata because of its earlier First Withdrawal Application. - HELD THAT: - The Court examined whether the earlier adjudication had 'heard and finally decided' the relief claimed. The First Withdrawal Application was dismissed summarily and the order did not demonstrate a conscious decision on the separate prayer to withdraw the Resolution Plan; a summary dismissal without a speaking order, or where the court did not adjudicate the specific relief on merits, does not attract res judicata. The Court applied authorities holding that res judicata requires a conscious adjudication on the merits of the identical issue. On that basis the NCLAT's conclusion that the Third Withdrawal Application was barred by res judicata was reversed. [Paras 162, 163, 171, 174]

Ebix's Third Withdrawal Application was not barred by res judicata; the earlier order did not constitute a conscious adjudication on the specific relief to withdraw the plan.

Jurisdiction of the Adjudicating Authority under Section 60(5)(c) - time bound CIRP and 330 day outer limit - Whether the NCLT (Adjudicating Authority) could exercise its residuary powers to permit withdrawal/modification by a successful Resolution Applicant notwithstanding the statutory scheme. - HELD THAT: - The Court held that the Adjudicating Authority's residuary jurisdiction under Section 60(5)(c) is defined and constrained by the IBC. It cannot be used to create remedies or procedural devices that the statute deliberately omits, especially where such devices would subvert the IBC's objectives of timeliness and predictability. Granting judicially created rights to withdraw or reopen commercial bargains after CoC approval and submission to the Adjudicating Authority would upset statutory timelines (including the 330 day limit) and enable unregulated renegotiation; therefore residuary powers cannot be used to permit withdrawals/modifications sought by successful Resolution Applicants. [Paras 144, 146, 157, 159]

The Adjudicating Authority cannot invoke residuary or inherent powers to permit withdrawal or modification of a CoC approved Resolution Plan at the behest of a successful Resolution Applicant.

Duty of the Resolution Professional to furnish information under Section 29 - Whether the Resolution Professional failed in his duties under Section 29 by not informing Ebix of investigations into Educomp's affairs. - HELD THAT: - The statutory duty on the RP to prepare and furnish an information memorandum and to give access to relevant information is a best effort obligation; the RP must disclose to the extent possible, and indicate limitations where relevant. In this case the material events and investigatory steps relied upon by Ebix occurred after filing of the Approval Application or were otherwise disclosed in regulatory filings and proceedings; there was no material showing that the RP possessed and withheld information of which Ebix was deprived in breach of Section 29. The Court found no failure of the RP's obligations that would justify withdrawal. [Paras 186, 188, 190, 191]

No breach of the RP's duties under Section 29 was established; Ebix was not entitled to withdraw on that ground.

Article 142 one time relief - Whether a one time remedial direction under Article 142 should be granted to Kundan Care enabling the CoC to consider a negotiated revision and, if agreed, to file a revised plan for prompt adjudication. - HELD THAT: - Although the Court held as a matter of law that withdrawals/modifications at the instance of a successful Resolution Applicant are not generally permissible under the IBC, the parties in the Kundan Care proceedings (Kundan Care and the A CoC represented by lenders holding the substantial voting share) jointly sought a negotiated, specific, time bound process to revisit the plan in light of the exceptional factual matrix (dispute over the sole PPA and subsequent judicial progression). The Court exercised its extraordinary Article 142 power to grant a limited, one time direction: the CoC to deliberate the pending proposal and, if it agrees to a revised plan, the RP will submit it to the NCLT within the prescribed short timeframe and the NCLT will adjudicate expeditiously. The relief was tailored and expressly limited to the facts and consented participants, not a precedent for general withdrawals or modifications. [Paras 196, 204, 206]

A one time Article 142 direction was granted in respect of Kundan Care: the CoC shall consider the proposed revision; if accepted, a revised plan shall be filed and the NCLT shall dispose of it expeditiously; otherwise the original plan stands. This is an exceptional, case specific order.

Final Conclusion: The Court held that the IBC and CIRP Regulations do not permit a successful Resolution Applicant to withdraw or unilaterally modify a CoC approved Resolution Plan after it has been submitted to the Adjudicating Authority and before approval under Section 31; the Adjudicating Authority lacks power to sanction such withdrawals or modifications. Ebix's res judicata plea was rejected and its appeal dismissed on merits; Seroco's appeal was dismissed. In the Kundan Care matter the Court granted a narrowly framed, one time direction under Article 142 to permit the CoC to consider a negotiated revision and, if agreed, to file a revised plan for expedited adjudication, subject to the conditions specified by the Court.

Admission of petition under Section 9 of Insolvency and Bankruptcy Code, 2016 - Operational debt and default - Declaration of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - Appointment of Interim Resolution Professional - Public announcement of initiation of Corporate Insolvency Resolution Process

Operational debt and default - Existence of operational debt and date of default in respect of invoices raised by the petitioner - HELD THAT: - The Tribunal found that the petitioner supplied goods to the corporate debtor and raised invoices aggregating to the stated amounts which were received by the corporate debtor. Payments were made in part and the corporate debtor admitted the outstanding balance. The invoices contained an interest clause and the debt was held to have become due on the date specified in the pleadings. On these facts the operational debt and default are established for the purposes of initiating insolvency proceedings. [Paras 16, 17, 18]

Operational debt and default are proved and the debt is held to have become due on 09.01.2018.

Admission of petition under Section 9 of Insolvency and Bankruptcy Code, 2016 - Admissibility of the application under Section 9 of the Code and completeness of Form 5 - HELD THAT: - The Tribunal recorded that the application was filed in the prescribed Form 5, was complete, and met the statutory threshold of operational debt exceeding the monetary limit. Having found existence of default and compliance with the procedural requirements under the Adjudicating Authority Rules, the petition was held to be liable for admission under Section 9. [Paras 19, 21, 22]

The application under Section 9 is admitted and CIRP is initiated against the corporate debtor.

Declaration of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - Operation of moratorium consequent to admission of the Section 9 petition - HELD THAT: - Upon admission, the Tribunal declared the moratorium operative with immediate effect, listing the prohibitions on institution or continuation of suits, transfer or disposal of assets, enforcement of security, and recovery of property occupied by the corporate debtor. The Tribunal also clarified that supply of essential goods or services shall not be terminated during the moratorium and that exceptions notified by the Central Government would apply. [Paras 22]

Moratorium under Section 14 is declared operative from the date of the order until completion of CIRP or further orders under the Code.

Appointment of Interim Resolution Professional - Public announcement of initiation of Corporate Insolvency Resolution Process - Appointment of the Interim Resolution Professional and consequential directions including public announcement and IRP obligations - HELD THAT: - The Tribunal appointed the proposed registered insolvency professional as Interim Resolution Professional and directed immediate public announcement of the initiation of CIRP as prescribed under the Code. The IRP was directed to comply with other statutory duties under the Code, follow applicable IBBI regulations regarding fee, and inform the Tribunal of progress by filing a compliance report within 30 days (with liberty to file earlier). [Paras 20, 22]

Mr. Vithal M. Dahake is appointed as IRP; public announcement and compliance by the IRP are directed.

Final Conclusion: The petition under Section 9 is admitted, CIRP against the corporate debtor is commenced from the date of the order; moratorium is declared, the proposed IRP is appointed and directed to make the public announcement and comply with statutory duties.

Liquidation under section 33(2) of the Insolvency and Bankruptcy Code, 2016 - Committee of Creditors decision by requisite voting share - Appointment of Liquidator in terms of section 34(1) of the Insolvency and Bankruptcy Code, 2016 - Commencement of liquidation process under Chapter III and the Liquidation Process Regulations - Cessation of powers of board and vesting of powers in the Liquidator - Prohibition on suits after initiation of liquidation subject to statutory exceptions - Notice of discharge to employees on liquidation - Filing of liquidation order with the Registrar of Companies

Liquidation under section 33(2) of the Insolvency and Bankruptcy Code, 2016 - Committee of Creditors decision by requisite voting share - Corporate Debtor ordered to be liquidated pursuant to the CoC's resolution and absence of any approved resolution plan. - HELD THAT: - The Adjudicating Authority applied section 33(2) of the Code which requires liquidation where the Resolution Professional informs the Authority of a decision of the CoC, approved by not less than sixty-six percent of voting share, to liquidate the Corporate Debtor. The record shows that after invitation for EOIs and extensions no resolution plan bearing requisite EMD was received and the CoC resolved by 100% voting share to liquidate. In light of the CoC's decision and non-availability of a resolution plan, the Bench ordered liquidation of the Corporate Debtor. [Paras 11, 12]

Application under section 33(1) allowed and Corporate Debtor ordered to be liquidated under section 33(2).

Appointment of Liquidator in terms of section 34(1) of the Insolvency and Bankruptcy Code, 2016 - Mr. Jitendra Lohia appointed as Liquidator subject to possession of a valid Authorisation for Assignment (AFA). - HELD THAT: - The Resolution Professional, who had been earlier appointed during CIRP, consented to act as Liquidator. The Bench appointed him as Liquidator under section 34(1) but made the appointment subject to the statutory requirement that he possess a valid Authorisation for Assignment issued by his Insolvency Professional Agency in terms of regulation 7A of the IBBI (Insolvency Professionals) Regulations, 2019. [Paras 9, 12]

Mr. Jitendra Lohia appointed as Liquidator, subject to possession of a valid AFA from the IPA.

Commencement of liquidation process under Chapter III and the Liquidation Process Regulations - Cessation of powers of board and vesting of powers in the Liquidator - Public notice of liquidation - Prohibition on suits after initiation of liquidation subject to statutory exceptions - Notice of discharge to employees on liquidation - Filing of liquidation order with the Registrar of Companies - Directions for conduct of the liquidation process, including public notice, vesting of powers in the Liquidator, assistance by personnel, restriction on suits, deemed discharge of employees and filing with the Registrar of Companies. - HELD THAT: - On ordering liquidation, the Bench directed the Liquidator to carry out the liquidation process in accordance with Chapter III of the Code and the IBBI (Liquidation Process) Regulations, 2016, and to issue public notice in the same newspapers where previous advertisements had appeared. The order records that all powers of the Board and key managerial personnel cease and vest in the Liquidator, that personnel of the Corporate Debtor must cooperate with the Liquidator, and that no suit or other proceeding shall be instituted by or against the Corporate Debtor except as permitted under section 33(5) read with its proviso and subject to section 52 of the Code. The order further deems the liquidation order to be notice of discharge to officers, employees and workmen except where the business continues under the Liquidator, and directs filing a copy of the order with the Registrar of Companies in whose jurisdiction the Corporate Debtor is registered. [Paras 12]

Liquidator to initiate liquidation process and to comply with directions regarding public notice, vesting of powers, cooperation by personnel, restrictions on suits, deemed discharge, and filing with the Registrar of Companies.

Final Conclusion: The Tribunal allowed the application for liquidation, ordered Madhusala Drinks Private Limited to be liquidated under section 33(2) of the Code having regard to the CoC's unanimous resolution and absence of any resolution plan, appointed the consenting Resolution Professional as Liquidator subject to statutory authorisation, and gave consequential directions for conducting the liquidation process, public notice, vesting of powers, cooperation by personnel, limitation on litigation, employee discharge and filing with the Registrar of Companies.

Functus officio - Section 362 Cr.P.C. - bar on altering or reviewing a judgment or final order - inherent powers under Section 482 Cr.P.C. - exceptions to the operation of Section 362 - judgment without jurisdiction, violation of natural justice, or abuse of process - finality of bail orders

Section 362 Cr.P.C. - bar on altering or reviewing a judgment or final order - functus officio - Whether the Court could recall or clarify observations in paras 19 and 20 of its bail order after signing the judgment in light of Section 362 Cr.P.C. - HELD THAT: - The Court held that once a judgment or final order disposing of a matter has been signed, Section 362 Cr.P.C. operates to preclude alteration or review except as otherwise provided by law. The bail order in question was treated as having finally disposed of the bail applications such that the Court is functus officio. Consequently, the bar in Section 362 applies to the present attempt to re-open or recall the observations made in paras 19 and 20 of the earlier order. [Paras 4, 11, 12]

The applications to recall or clarify the observations are barred by Section 362 Cr.P.C. and thus not maintainable.

Inherent powers under Section 482 Cr.P.C. - exceptions to the operation of Section 362 - judgment without jurisdiction, violation of natural justice, or abuse of process - finality of bail orders - Whether the High Court's inherent powers under Section 482 Cr.P.C. could be invoked to recall or clarify its signed bail order despite Section 362 Cr.P.C. - HELD THAT: - The Court considered the established exceptions where inherent power may be exercised notwithstanding Section 362 - namely, where a judgment is pronounced without jurisdiction, in violation of principles of natural justice, or obtained by abuse of the process of court (as recognised in authoritative decisions). It found that none of those exceptions applied to the present facts: the order was not shown to be without jurisdiction, violative of audi alteram partem, or a product of abuse of process. The petitioner's reliance on precedents emphasizing the survival of inherent power where such defects exist was therefore inapposite. Further, precedents were noted which treat grants of bail as finally disposing of the bail issue and thereby attracting the functus officio principle. [Paras 5, 6, 10, 11]

Section 482 Cr.P.C. could not be invoked to recall or clarify the signed bail order in the absence of any jurisdictional defect, breach of natural justice, or abuse of process.

Final Conclusion: Both applications seeking recall/clarification of observations in paras 19 and 20 of the bail order are dismissed as barred by Section 362 Cr.P.C.; the inherent power under Section 482 Cr.P.C. is not available in the absence of the recognised exceptions, and the High Court is functus officio in respect of the signed bail order.

Bail - Interim bail - Health grounds for bail - Flight risk - Proceeds of crime - Economic offences

Interim bail - Health grounds for bail - Flight risk - Proceeds of crime - Grant of interim bail to the petitioner in ECIR/VSKZO/03/2017 under PMLA. - HELD THAT: - The High Court, without addressing the merits of the prosecution case, granted interim bail for a limited period after weighing relevant factors: the petitioner had been in custody for about 360 days; he had voluntarily surrendered earlier; co-accused had been granted bail; and the petitioner's advanced age and multiple serious health conditions were relevant in favour of temporary release. The Court noted the prosecution's contentions regarding alleged layering and parking of proceeds of crime abroad and the risk of absconding, but considered the cumulative facts fit for a short-term interim release. The grant was confined to a one-month period and made subject to protective conditions to allay risks identified by the respondent, including bond and sureties, prohibition on leaving the country, prohibition on tampering with evidence or influencing witnesses, and requirement of daily appearance before the Enforcement Directorate during the interim bail period.

Interim bail granted for one month (08.09.2021 to 07.10.2021) on execution of bond and two sureties, with conditions of non-departure, non-tampering, no influencing of witnesses and daily appearance before the Assistant Director, ED.

Final Conclusion: The petition for regular bail resulted in grant of interim bail for one month on specified terms and conditions; the Court did not adjudicate the merits of the PMLA prosecution and confined relief to a time-bound, conditional release.

Fixation of special rate representing actual value addition - Notification No.20/2007-CE - option to apply for special rate in lieu of special rates in notification - pass a reasoned order

Fixation of special rate representing actual value addition - Notification No.20/2007-CE - option to apply for special rate in lieu of special rates in notification - pass a reasoned order - The Principal Commissioner, GST, Guwahati was directed to consider and decide the petitioner's application dated 13.06.2021 seeking fixation of a special rate under Notification No.20/2007-CE by passing a reasoned order. - HELD THAT: - The writ petition confined itself to the limited grievance that the petitioner's application for fixation of a special rate (filed 13.06.2021) under the notification providing for fixation of special rates representing actual value addition had not been finally considered. The Court did not adjudicate the merits of entitlement to any particular rate or the underlying claim to exemption; instead it required the competent authority to perform the statutory/administrative function of deciding the pending application. The Principal Commissioner is permitted to accept or reject the request but must record reasons for the decision and may pass any order as permissible under law. [Paras 9, 10, 11]

Principal Commissioner, GST, Guwahati to pass a reasoned order on the application dated 13.06.2021 (either accepting or rejecting it) within one month from receipt of a certified copy of the order.

Pass a reasoned order - remand for fresh consideration - The pending application was remitted to the Principal Commissioner for fresh consideration and decision on its merits by way of a reasoned order. - HELD THAT: - By issuing the direction, the Court remitted the matter to the administrative authority for fresh consideration; the Court did not itself determine entitlement to exemption or fixation of any particular special rate. The scope of the remand is to enable the Commissioner to examine the application and decide it in accordance with law, recording reasons for the conclusion reached. [Paras 10, 11]

Application remitted for fresh consideration; decision to be taken with reasons within the stipulated one month period.

Final Conclusion: Writ petition disposed by directing the Principal Commissioner, GST, Guwahati to pass a reasoned order on the petitioner's application dated 13.06.2021 for fixation of a special rate under the notification, within one month from receipt of a certified copy of this order.

Rebate of duty on excisable goods used in manufacture/processing of export goods - Applicability of paragraph 4(c) of Notification No.21/2004-CE(NT) - Removal of materials or partially processed material outside the factory as pre-requisite - Liability for duty on waste/scrap arising from processing

Applicability of paragraph 4(c) of Notification No.21/2004-CE(NT) - Removal of materials or partially processed material outside the factory as pre-requisite - Liability for duty on waste/scrap arising from processing - Paragraph 4(c) of Notification No.21/2004-CE(NT) is inapplicable where raw materials or partially processed materials have not been moved outside the factory during manufacture or processing, and therefore duty could not be imposed on the scrap on that footing. - HELD THAT: - Paragraph 4 of the notification governs removal of materials or partially processed material to a place outside the factory and contains three contingencies in sub-paragraphs (a), (b) and (c). The determinative pre requisite for the operation of paragraph 4 (including clause (c)) is an actual movement of materials or partially processed materials outside the factory in the course of manufacture or processing. Clause (c) applies only to waste arising from such processing when such movement has occurred, permitting removal on payment of duty as if the waste were manufactured in the factory. There is no finding in the order in original, the appellate order or the revisional order that the materials or partially processed materials were ever removed outside the factory in the course of manufacture. In the absence of that material fact, paragraph 4(c) cannot be invoked and the rejection of the rebate claims solely on the ground of non fulfillment of condition 4(c) is unsustainable. The petitioner's earlier departmental clarification that scrap was not leviable on excise duty further underlines that paragraph 4(c) was wrongly applied; nevertheless the Court confines its conclusion to the legal inapplicability of paragraph 4(c) on the recorded facts and leaves open the Department's right to initiate independent proceedings if permissible by law. [Paras 8, 9, 14]

The application of paragraph 4(c) was incorrect in the absence of any finding of removal of materials outside the factory; the impugned orders rejecting rebate claims on that ground are vitiated.

Final Conclusion: Writ petitions allowed; impugned orders set aside and petitioners entitled to the rebate claims. Consequences to follow; Department permitted to initiate independent proceedings if permissible under law.

Anticipatory bail - delay in registration of FIR - custodial interrogation not necessary - undertaking re non-disposal of goods - sale of detained goods - cooperation with investigation - documents in custody of Investigating Officer - police remand

Anticipatory bail - delay in registration of FIR - custodial interrogation not necessary - cooperation with investigation - documents in custody of Investigating Officer - Applicant granted anticipatory bail on conditions - HELD THAT: - The Court found that the core allegation relates to breach of an undertaking given on 10.11.2016 not to dispose of detained goods and that the alleged sale of goods is the gravamen of the offence. Considering the role attributed to the applicant, pending civil proceedings, the applicant's cooperation with the investigation, the fact that all relevant documents and material are in the custody of the Investigating Officer, and the belated registration of the FIR (filed after more than four years despite earlier awareness), custodial interrogation is not necessary at this stage. Applying the principles in Sushila Aggarwal and Siddharam Mhetre, and without adjudicating evidence in detail, the Court was inclined to grant anticipatory bail subject to specified conditions including personal bond, cooperation with investigation, presence for interrogation and at the police station on a stated date, non-interference with witnesses or evidence, furnishing and maintaining address, and not leaving the country without trial court permission (with passport deposit if applicable). [Paras 6, 7, 9]

Application under Section 438 CrPC allowed and applicant ordered to be released on bail on furnishing personal bond with one surety and subject to enumerated conditions.

Police remand - custodial interrogation not necessary - Investigating agency may still apply for police remand; Magistrate to decide on merits - HELD THAT: - The Court clarified that the anticipatory bail order does not preclude the investigating agency from applying to the Magistrate for police remand if considered proper; the Magistrate will decide such an application on merits. The applicant is required to remain present before the Magistrate on the first and subsequent dates of such application. If police remand is granted and served, upon completion of the remand period the applicant shall be set free immediately subject to the conditions of this bail order. The order preserves the accused's right to challenge any remand and the Magistrate's authority to consider such challenges. [Paras 10]

Right of investigating agency to seek police remand preserved; Magistrate to decide on merits and remand, if any, is subject to usual safeguards and the anticipatory bail conditions.

Final Conclusion: Anticipatory bail granted to the applicant in respect of FIR C.R. No.I-11209016210368 of 2021 on furnishing bond and surety and subject to specified conditions; the investigating agency remains free to seek police remand which the Magistrate will determine on merits.

Refund of unutilised cenvat credit - lapse of refund claim under the first proviso to Section 142(3) of the CGST Act, 2017 - re-credit of rejected refund amount under Notification No.27/2012-CE - application of repealed Central Excise law to pending claims - subordinate legislation effective only until repeal of parent Act - res judicata

Lapse of refund claim under the first proviso to Section 142(3) of the CGST Act, 2017 - application of repealed Central Excise law to pending claims - Whether the refund claims for unutilised cenvat credit, earlier rejected under the repealed law, lapsed on account of the proviso to Section 142(3) of the CGST Act, 2017 and could not be revived by refiling after taking re-credit. - HELD THAT: - The Tribunal applied Section 142(3) first proviso read with Section 142(6)(a) and held that existing pending claims under the repealed Central Excise Act were to be decided in accordance with the erstwhile law but that a claim which had been rejected thereunder would lapse by operation of the proviso. The court recorded that the parent enactment was repealed with effect from 1.7.2017 when the CGST provisions came into force, so subordinate notifications under the repealed regime ceased to have effect thereafter. On these legal foundations the Tribunal concluded that a refund claim already rejected could not be revived by subsequent refiling once it had lapsed under the statutory proviso. [Paras 4]

The refund claims had lapsed under the first proviso to Section 142(3) and could not be sustained when refiled after the repeal; refiling was not maintainable.

Re-credit of rejected refund amount under Notification No.27/2012-CE - subordinate legislation effective only until repeal of parent Act - res judicata - Whether the appellant was entitled to take re-credit of the rejected refund amounts and thereafter reinitiate refund claims, having previously exhausted remedies up to the Commissioner (Appeals). - HELD THAT: - The Tribunal found that the appellants, after their refund claims were rejected and appeals before the Commissioner (Appeals) were decided in 2018, erred in taking re-credit of the rejected amounts and then filing fresh refund claims. The Tribunal held that subordinate provisions are effective only until the parent Act is in force; once the Central Excise Act was repealed, the re-credit and subsequent refiling could not revive a lapsed claim. Further, the Tribunal recorded that the matter had attained finality on the Commissioner (Appeals) orders of 2018 and was barred by principles of res judicata because the appellants chose not to pursue further statutory remedies. [Paras 4]

Taking re-credit and refiling was erroneous; the issue was finalised by earlier appellate orders and barred by res judicata, so the subsequent claims were not maintainable.

Final Conclusion: The appeals were dismissed: the Tribunal held that the earlier rejected refund claims had lapsed under the proviso to Section 142(3) of the CGST Act, 2017; subordinate notifications could not revive claims after repeal of the parent Act; and the appellant's re-credit and refiling were legally impermissible and barred by res judicata.

Attachment of property under Tripura Protection of Interests of Depositors (In Financial Establishments) Act, 2000 - requirement to record reasons in writing for exercise of power of attachment - vesting of attached properties in the competent authority pending orders of the Designated Court - duty of the State to protect properties vested under statutory attachment - jurisdiction and powers of the Designated Court under the Act of 2000

Attachment of property under Tripura Protection of Interests of Depositors (In Financial Establishments) Act, 2000 - requirement to record reasons in writing for exercise of power of attachment - Validity of the impugned notification of attachment issued by the State under Section 4(1)(ii) of the Act of 2000. - HELD THAT: - The Court examined the material placed before the Finance Secretary and the original government file, including complaints, District Collector reports, a SEBI prohibitory order and an FIR. Although the impugned notification did not itself narrate reasons in detail, the affidavit-in-reply together with the documents in the original file demonstrated that voluminous material was considered by the competent authority. The Court held that the requirement of recording reasons in writing cannot be read as automatically vitiating the attachment where there exists overwhelming material leading to the subjective satisfaction of the authority. Striking down the notification on the basis of an absence of express recital of reasons would be an artificial technicality in the circumstances of this case. Accordingly the challenge to the validity of the order of attachment was rejected. [Paras 16, 17, 18, 19]

The attachment notification is not liable to be set aside for want of recorded reasons or for lack of material; the first prayer fails.

Vesting of attached properties in the competent authority pending orders of the Designated Court - duty of the State to protect properties vested under statutory attachment - jurisdiction and powers of the Designated Court under the Act of 2000 - Whether the State has a duty to protect the attached properties and what forum should determine protective measures. - HELD THAT: - The Court found that after attachment (which vests property in the competent authority under Section 4(2)), the State machinery has the duty to ensure that the property is not allowed to deteriorate, be encroached or be stolen. The record, however, showed instances of delay and inadequate protection (noted correspondence of District and Sub Divisional Magistrates seeking police protection), indicating some lapse in protecting attached assets. Despite that finding, the Court observed that questions of protective measures and interim arrangements fall within the remit of the Designated Courts, which are empowered to administer attached property and to pass appropriate interim or final orders under the Act. The Court therefore refrained from passing specific protective directions itself and left these issues to the concerned Designated Courts to examine and decide after considering full facts. [Paras 20, 21, 22]

State has a duty to protect vested properties; lapses were noted, but determination of protective measures is remitted to the Designated Courts.

Jurisdiction and powers of the Designated Court under the Act of 2000 - Entitlement to carry out valuation of the attached properties in aid of proceedings. - HELD THAT: - The petitioner sought direction for valuation of attached properties. The Court held that valuation claims and related reliefs are matters for the Designated Courts which have been entrusted with administration and adjudication of issues arising from attachment. The Court therefore did not direct valuation itself and indicated that the petitioner may press for valuation before the Designated Courts, which can take an appropriate view in accordance with law and the facts. [Paras 23]

Request for valuation is to be pursued before the Designated Courts; the writ court declined to order valuation.

Final Conclusion: The petition challenging the attachment was dismissed: the attachment notification was upheld on the material before the competent authority; the Court observed lapses in protection of vested properties but left issues of protection and valuation to the Designated Courts to examine and decide; the petition is disposed of and pending applications stand disposed.