TaxTMI Updates e-Newsletter
Sep 18,2026

Seeking a declaration that Sections 69 and 70(1) of the Central Goods and Services Tax Act, 2017, are unconstitutional

HELD THAT:- As decided in Radhika Agarwal [2025 (2) TMI 1162 - SUPREME COURT (LB)] this Court has rejected the challenge to the vires of Sections 69 and 70 of the CGST Act and held that a penalty or prosecution mechanism for the levy and collection of GST, and for checking its evasion, is a permissible exercise of legislative power. The GST Acts, in pith and substance, pertain to Article 246- A of the Constitution and the powers to summon, arrest and prosecute are ancillary and incidental to the power to levy and collect goods and services tax. In view of the aforesaid, the vires challenge to Section 69 and 70 of the CGST Act must fail and is accordingly rejected.

In light of the aforesaid judgment, no further orders are required in the present writ petition.

Writ jurisdiction and alternative statutory remedy - Jurisdiction of intelligence-based GST enforcement against State-assigned taxpayers - Common show-cause notice - allocation of adjudication

Writ jurisdiction and alternative statutory remedy - Input tax credit - factual appraisal of supporting documents - Availability of writ relief against an appealable GST adjudication order where the alleged non-consideration of documents, entitlement to input tax credit and applicability of Circular No. 171/03/2022-GST required factual appraisal. - HELD THAT: - Non-reproduction of the reply did not by itself establish that it had been ignored. The adjudication order disclosed the basis for rejecting the input tax credit claim, namely absence of actual supplies, non-fulfilment of statutory conditions and failure to discharge the burden of proof. Determination of the petitioners' case required correlation of work orders, subcontracts, invoices, payments and evidence of execution. The appellate authority was competent to undertake the necessary inquiry and decide the factual and legal questions, including the applicability of the Circular; their invocation did not render the proceedings jurisdictionally defective. [Paras 14, 15, 22, 23, 24]

No exceptional ground was made out to bypass the statutory appeal; the merits of the input tax credit demands, interest, penalties and the Circular were left open for appellate consideration.

Jurisdiction of intelligence-based GST enforcement against State-assigned taxpayers - Jurisdiction of DGGI to investigate and issue proceedings against taxpayers administratively assigned to State tax authorities. - HELD THAT: - Specified DGGI officers had been appointed as Central tax officers with powers exercisable throughout India. Administrative assignment of registrations to the State tax administration did not exclude intelligence-based enforcement by Central officers, particularly where the investigation concerned an alleged multi-State chain of transactions. [Paras 16]

The State-wise administrative assignment of the petitioners' registrations did not exclude DGGI jurisdiction.

Common show-cause notice - allocation of adjudication - Allocation of adjudication of a common show-cause notice involving noticees in more than one Commissionerate to Delhi North rather than Chennai or Rangareddy. - HELD THAT: - The governing notifications empowered Additional and Joint Commissioners in Delhi North to adjudicate DGGI notices throughout India. Under the applicable allocation circular, a common notice was to be adjudicated with reference to the principal place of business of the noticee having the highest tax demand, which placed the matter in Delhi North. The revised allocation also mapped the concerned Delhi East matter to the common adjudicating authority at Delhi North. [Paras 17, 18, 19, 20]

Delhi North was the designated adjudicating Commissionerate, and no corrigendum or transfer of the common show-cause notice was required.

Final Conclusion: The writ petitions were disposed of by relegating the petitioners to the statutory appellate remedy, while rejecting the jurisdictional objections. The disputed merits of the input tax credit demands, interest and penalties were left open for decision in appeal.

Jurisdiction of Common Adjudicating Authority for composite DGGI show cause notices - Constitutional validity of highest-demand criterion for common adjudication - Alternative statutory remedy in GST adjudication

Jurisdiction of Common Adjudicating Authority for composite DGGI show cause notices - Administrative allocation of adjudicatory functions - Appellate forum for common adjudication orders - Jurisdiction of the Common Adjudicating Authority and the appellate forum for a composite show cause notice issued by the DGGI. - HELD THAT: - The governing notifications had already vested specified Additional and Joint Commissioners with pan-India jurisdiction to adjudicate DGGI notices. While a circular issued to ensure uniformity cannot itself confer, transfer or enlarge jurisdiction, it may operationalise jurisdiction validly conferred by notification. The impugned Circular neither appointed an officer nor enlarged territorial jurisdiction, but uniformly selected one from among officers already competent to adjudicate a composite notice. The notification was not required to identify an officer for every possible combination of noticees; nor did the absence of a recital of authority or approval, without material showing its absence, invalidate the Circular. The appellate forum was already notified for the Commissionerate in which the Common Adjudicating Authority was posted, and the subsequent circular merely clarified that position. [Paras 29, 30, 31, 33, 40]

The Common Adjudicating Authority and the corresponding notified appellate forum were held to have jurisdiction, and the impugned Circular was upheld as a valid administrative allocation-of-business measure.

Constitutional validity of highest-demand criterion for common adjudication - Impermissible sub-delegation of statutory power - Validity under Article 14 of the highest-demand criterion for selecting the Common Adjudicating Authority. - HELD THAT: - The highest-demand criterion was objective, quantifiable and uniformly applicable. It bore a rational nexus with securing a single and consistent adjudication arising from one investigation and preventing conflicting findings on the same facts. Application of that prescribed criterion involved no discretion in the officer issuing the composite notice and did not amount to impermissible sub-delegation of statutory power. [Paras 35, 36]

The highest-demand criterion was held non-arbitrary, and the challenge under Article 14 was rejected.

Alternative statutory remedy and writ jurisdiction - Exercise of writ jurisdiction against the adjudication order when a statutory appellate remedy was available. - HELD THAT: - Although writ jurisdiction may be exercised where the very existence of jurisdiction is challenged, the petitions were entertained only to examine that limited question. Once the jurisdictional challenge failed, no ground remained for writ review of the merits, evidentiary questions or alleged breach of natural justice, all of which could appropriately be raised in the statutory appeal. [Paras 37, 38, 39]

The merits were left open for determination by the statutory Appellate Authority.

Final Conclusion: The petitions challenging the common adjudication arrangement were dismissed. The petitioners were left to pursue the statutory appellate remedy on all merits contentions and could seek exclusion of the pendency period in accordance with law.

Ex parte GST assessment without notice of subsequent hearing - Natural justice denied - HELD THAT: - Where the authority does not pass an order on the date fixed for hearing and fixes a subsequent date without communicating it to the assessee, the resulting ex parte order is contrary to the requirements of natural justice. The Court followed the coordinate Bench decision on materially similar facts in Shubham Steel Traders Vs. State of U.P. and Another [2024 (2) TMI 1180 - ALLAHABAD HIGH COURT] [Paras 5]

The impugned assessment order was quashed, with a direction to afford personal hearing and pass a reasoned order in accordance with law.

Final Conclusion: The writ petition was disposed of by quashing the ex parte assessment order for breach of natural justice and directing fresh consideration after affording personal hearing.

Authentication of electronic GST notices and adjudication orders - Alternative remedy against non est statutory order

Unsigned electronic GST notices and adjudication orders - Mandatory authentication under Rule 26(3) - Legal validity of an electronically issued show cause notice and adjudication order bearing neither a digital nor a physical signature - HELD THAT: - Rule 26(3) mandates not merely electronic issuance but authentication of every notice and order through a digital signature certificate, E-signature, or another mode notified by the Board. Authentication of an officer's portal login cannot substitute authentication of the document's contents: a login authenticates access, whereas a signature attributes and authenticates the contents. In the absence of any signature or notified mode of verification, the documents lacked legal existence; the defect was jurisdictional and not a curable irregularity. [Paras 16, 17, 20, 23]

The unsigned show cause notice and adjudication order were held non est and were quashed, together with the consequential recovery notice and bank-account attachment; liberty was reserved for fresh proceedings in accordance with law.

Alternative remedy against non est statutory order - Availability of statutory appeal where the challenged adjudication order has no legal existence for want of authentication - HELD THAT: - A statutory appeal presupposes the existence of an order. Once the adjudication order was found non est for want of mandatory authentication, the alternative-remedy objection could not bar the writ jurisdiction. [Paras 21]

The objection based on the availability of an appeal was rejected.

Final Conclusion: The writ petition was allowed, the unsigned statutory documents and consequential recovery action were set aside, and the competent authority was left at liberty to initiate fresh proceedings in accordance with law.

Minimum interval for GST show cause notice before statutory adjudication deadline - Computation of statutory period in calendar months - Opportunity to contest show cause notice after ex parte GST adjudication

Minimum interval for GST show cause notice before statutory adjudication deadline - Computation of statutory period in calendar months - Timeliness of a show cause notice issued under the GST determination mechanism where it was required to be issued at least three months before the outer limit for passing the adjudication order - HELD THAT: - The statutory scheme treats issuance of notice and final determination as connected stages of one adjudicatory process. The requirement of a notice at least three months before the terminal date regulates the minimum interval between initiation and culmination; it does not prescribe an independent limitation date obtained by mechanically counting backward from the terminal date. A month is a calendar month and, upon exclusion of the date of issuance of notice, the requisite intervening period was available before expiry of the statutory deadline. [Paras 36, 37, 39, 40, 42]

The show cause notice was held to be within the period prescribed for its issuance, and the challenge to its validity on limitation failed.

Opportunity to contest show cause notice after ex parte GST adjudication - Entitlement to an opportunity to reply to the show cause notice where an ex parte adjudication order was passed during pendency of the writ proceedings - HELD THAT: - Taking note of the interim protection granted during the writ proceedings and the culmination of the proceedings by an ex parte order meanwhile, the Court considered it appropriate in the interests of justice to enable the appellant to contest the notice. It expressly left the merits of the proposed demand and the defence open. [Paras 44, 45, 46]

The adjudication order was interfered with to permit a reply to the notice within the stipulated time and completion of fresh proceedings thereafter; failing such reply, that order would revive.

Final Conclusion: The writ appeal was dismissed insofar as the show cause notice was held timely. However, the appellant was afforded a conditional opportunity to contest the notice, with the ex parte adjudication order to revive if no reply is filed within the prescribed time.

Adjustment of recovered electronic credit towards appellate pre-deposit - Adjustment of credit already recovered from the electronic credit ledger towards the mandatory pre-deposit for maintaining the GST appeal

HELD THAT: - Having regard to the earlier ruling permitting utilisation of electronic credit ledger balance for payment of the statutory pre-deposit, the Court noted that the credit already recovered exceeded the pre-deposit requirement. As the petitioner confined its claim to adjustment and did not press for refund of the excess credit, adjustment was permitted in the peculiar facts of the case.

This Court in the case of M/s. Shiv Crakers [2024 (3) TMI 832 - GUJARAT HIGH COURT] while examining an issue of adjustment of credit towards pre-deposit has held that the taxpayer may utilize the amount available in the electronic credit ledger to pay 10% of tax in dispute as prescribed under Section 107(6) of the CGST Act and accordingly, the Court had set aside the appeal and directed the appeal to be restored to its original file. This Court had also placed reliance on the decision of the Bombay High Court in case of Oasis Realty Vs. The Union of India and ors [2022 (10) TMI 42 - BOMBAY HIGH COURT] [Paras 6, 7]

The dismissal of the appeal for non-payment of pre-deposit was quashed, and the appeal was restored for decision on merits after adjustment of the statutory pre-deposit from the recovered electronic credit; all merits contentions were left open, and the order was not to be treated as a precedent.

Final Conclusion: The writ petition was disposed of by restoring the GST appeal and directing adjustment of the mandatory pre-deposit from the electronic credit already recovered.

Mandatory statutory timeline for notice following detention of goods under GST

Validity of detention and penalty proceedings where the notice under section 129(3) was not issued within seven days of detention of the goods and conveyance - HELD THAT: - The statutory timeline regulates coercive powers of detention and seizure and safeguards against arbitrary or prolonged detention. The use of "shall", the legislative object, and the rights affected require strict compliance; consequently, even a one-day delay in issuance of the notice vitiated the proceedings. [Paras 5, 6, 7, 8]

The orders imposing and affirming the penalty were set aside for breach of the mandatory timeline under section 129(3), without precluding proceedings otherwise permissible under the Act.

Final Conclusion: The writ petition was allowed and the impugned detention and penalty orders were set aside for non-compliance with the mandatory statutory timeline. The deposited penalty was directed to be released after due verification.

Show-cause notices and Orders-in-original issued u/s 74 of the Central Goods and Services Tax (CGST) Act, 2017 - interim protection continuation pending consideration of challenges to orders raising GST demands

HELD THAT:- Prima facie, we are of the opinion that the impugned Orders-in-original depict the inability of the adjudicating authority in closely analyzing the details of delivery channels, corresponding e-way bills, invoices, etc., as he himself has expressed his inability to undertake such exercise, as there is no mechanism to understand this.

The petitioner was never called upon to supply any additional material by the adjudicating authority, and as informed to us, there are almost 4.5 lakhs e-way bills and 2.5 lakhs invoices, which would suggest that there was no intention of the petitioner to suppress or evade the liability of payment of the GST.

Issue RULE. Learned Senior Standing Counsel Ms. Sancheti waives service of notice of rule for and on behalf of the respondent.

Condonation of delay in GST appeal - Condonation of delay in filing an appeal against a GST demand where the appeal could not be filed within the statutory period for reasons beyond the assessee's control.

HELD THAT: - Though the Appellate Authority was bound by the statutory limitation prescribed for appeals, the Court held that non-adjudication on merits, in the circumstances preventing timely filing, would cause grave injury and prejudice.

Following the consistent approach adopted in the earlier decision LUXMI TRADERS [2026 (7) TMI 1602 - PUNJAB AND HARYANA HIGH COURT] and agreeing with the view concerning portal-based service, the Court found that the appeal deserved consideration on merits. [Paras 6, 7, 9, 10, 11]

The delay was condoned and the Appellate Authority was directed to entertain and decide the appeal on merits, subject to its filing within the stipulated period.

Final Conclusion: The writ petition was allowed to the extent of condoning the delay, and the statutory appeal was directed to be entertained and adjudicated on merits.

Simultaneous GST adjudication proceedings under Sections 73 and 74 - Ex parte GST adjudication - reconsideration on production of exemption documents

Simultaneous GST adjudication proceedings under Sections 73 and 74 - Sustainability of proceedings under Section 74 after adjudication of proceedings under Section 73 for the same financial period - HELD THAT: - The Court held that culmination of the proceedings under Section 74 after an adjudication order had already been passed under Section 73 was incongruous. [Paras 5]

The show cause notice, adjudication order and summary order in the Section 74 proceedings were quashed.

Ex parte GST adjudication - reconsideration on production of exemption documents - Restoration of ex parte proceedings under Section 73 for consideration of the claimed exemption and supporting documents - HELD THAT: - As the Section 73 proceedings had concluded ex parte and the petitioner asserted that documents could be produced to substantiate the claimed exemption, the Court considered reconsideration necessary for a complete adjudication of the alleged mismatch or erroneous declaration. The merits of the exemption claim were left for fresh consideration. [Paras 6]

The Section 73 adjudication order, its summary and the consequential garnishee notice were quashed, and the proceedings were restored for reconsideration after receipt of the petitioner's reply and documents.

Final Conclusion: The Section 74 proceedings were quashed as incongruous with the prior adjudication under Section 73. The ex parte Section 73 adjudication was restored for fresh consideration after affording the petitioner an opportunity to file its reply and supporting documents.

Bar on parallel proceedings on same subject matter under GST laws - Opportunity to respond to show-cause notice before adjudication

Bar on parallel proceedings on same subject matter under GST laws - Initiation of Central GST proceedings on the same subject matter after prior initiation of State GST adjudication proceedings. - HELD THAT: - The plain language of section 6(2)(b) of the CGST Act precludes initiation of proceedings by a Central Tax proper officer on a subject matter on which proceedings have already been initiated by a State GST proper officer. As the State Authorities had first commenced adjudication proceedings, the subsequent Central Tax proceedings could not continue. [Paras 5]

The Central Tax show-cause notice and consequential adjudication order were quashed.

Opportunity to respond to show-cause notice before adjudication - Works-contract exemption for predominant service supply - Opportunity to furnish documents and responses in respect of the claimed exemption for street-light works contracts where the value of goods supplied is stated to be below the prescribed proportion of the contract value - HELD THAT: - The Court noted that, if the petitioner demonstrated that the value of goods supplied under the works contracts did not constitute 25% of their value, it could be entitled to the claimed exemption. Since this aspect was also recorded in one of the adjudication orders, the petitioner was required to be afforded an opportunity to place the relevant material and respond to the show-cause notices; the merits of the exemption claim were left open. [Paras 7]

The State Tax adjudication orders and consequential garnishee notices were quashed, with liberty to file responses to the respective show-cause notices subject to deposit of 10% of the tax demand; all questions were left open for consideration.

Final Conclusion: The subsequent Central Tax proceedings were quashed as barred by prior State GST proceedings on the same subject matter. The State Tax adjudication orders were also quashed to enable the petitioner to respond to the show-cause notices subject to the stipulated deposit, with the merits kept open.

Anticipatory bail in alleged fraudulent input tax credit cases - Purchaser's input tax credit and supplier default - Arrest based on reasons to believe under the CGST Act Custodial interrogation of registered purchaser

HELD THAT: - A purchaser holding valid registration, invoices, and proof of payment of invoice value and tax through banking channels, and having filed returns, cannot ordinarily be denied input tax credit or held liable for the supplier's default unless fraud or collusion is established. Subsequent cancellation or non-existence of the supplier, by itself, does not justify denial of credit to the purchaser; recovery would ordinarily lie against the defaulting supplier.

Where actual receipt of goods can be established through documentary material and there is no prima facie material of collusion, custodial interrogation merely to verify such receipt is ordinarily unnecessary. Arrest for the cognizable offences must rest on the Commissioner's recorded reasons to believe, founded on material demonstrating satisfaction of the statutory requirements, and not on suspicion alone. [Paras 17, 18, 19, 21, 27]

Anticipatory bail was granted, subject to conditions requiring cooperation with the investigation, production of necessary documents, and compliance with the stipulated safeguards.

Final Conclusion: The petitions were allowed and the petitioners were granted anticipatory bail in relation to the alleged wrongful availment of input tax credit, subject to the conditions imposed.

GST rate on the un-fried or un-cooked snack pellets manufactured through the process of extrusion - issue of the past period upto 27.07.2023 was regularized on an “as is” basis - Counsel submits that the present dispute pertains to the GST rate on the admitted product of the petitioner for the period from 01.07.2017 to 31.07.2019.

HELD THAT:- Paragraph 2.2 of the Circular dated 01.08.2023, regularising the GST-rate issue concerning un-fried or un-cooked snack pellets manufactured through extrusion for the past period up to 27.07.2023 on an "as is" basis, was prima facie found directly applicable. No satisfactory basis to distinguish its applicability was shown. No final adjudication on the validity of the demands was made.

The writ petition was admitted and the effect and operation of the impugned demands were stayed upon furnishing an auto-renewable fixed deposit for 10% of the demand. The matter was listed for further hearing.

Anticipatory bail in GST evasion offences - Concurrent jurisdiction for anticipatory bail

High Court and Court of Session jurisdiction for anticipatory bail - Maintainability of anticipatory-bail petitions before the High Court where transit bail required the petitioners to approach the jurisdictional court - HELD THAT: - The expression "jurisdictional Court" for an application for anticipatory bail includes both the High Court and the Court of Session. The petitioners therefore had the discretion to approach either forum, and were not confined to the Principal Sessions Court. [Paras 6]

The anticipatory-bail petitions before the High Court were held maintainable.

Anticipatory bail in alleged GST evasion - Necessity of custodial interrogation - Grant of anticipatory bail for the alleged GST evasion offence and the necessity of custodial interrogation - HELD THAT: - While the allegation concerned an economic offence, the prescribed maximum punishment was five years and the offences were compoundable. The relevant documentary and digital records had substantially been seized and were in the authorities' custody; the petitioners had established business roots and undertook to cooperate with the investigation. Custodial interrogation was consequently not required. [Paras 7, 8, 9, 10]

Anticipatory bail was granted subject to conditions concerning deposit, surrender of passports, reporting to the authorities, execution of bonds and cooperation with the investigation. On breach of any of the aforesaid conditions, the learned Magistrate/Trial Court is entitled to take appropriate actions against the petitioners in accordance with law as if the conditions have been imposed and the petitioners released on anticipatory bail by the learned Magistrate/Trial Court himself as laid down by the Hon’ble Supreme Court in P.K. Shaji v. State of Kerala [2005 (10) TMI 599 - SUPREME COURT].

Final Conclusion: The petitions were held maintainable, and anticipatory bail was granted subject to the stipulated conditions.

Assessment u/s 153C - Whether documents seized related to undisclosed income “relating to” or “pertaining to” the petitioners? - HELD THAT:- No good ground to interfere with the impugned judgment of the High Court [2025 (12) TMI 297 - GUJARAT HIGH COURT]

Accordingly, the Special Leave Petition is dismissed.

Prosecution of a person wrongly treated as Principal Officer - Vicarious liability for non-deposit of tax deducted at source - offences u/s 276B r/w Sections 278B and 278E alleging that the accused persons had not deposited the requisite TDS (Tax Deducted at Source) within the stipulated time

HELD THAT: - The show-cause notice, the order treating the petitioner as Principal Officer, the sanction order and the complaint all proceeded on the basis that she was a Director of the company. The Department admitted that she had never been a Director. Her prosecution on that erroneous premise was therefore fallacious and unsustainable. [Paras 5, 6, 7]

The prosecution, insofar as it concerned the petitioner, was quashed.

Final Conclusion: The petition was allowed and the prosecution against the petitioner was quashed on the peculiar facts of the case. The order was directed not to be treated as a precedent.

Double taxation of identical income after amalgamation

Parallel reassessment proceedings against amalgamating and amalgamated companies - Assessment of income in hands of the right person - Survival of reassessment proceedings against the amalgamating company after the identical share application money had been assessed in the hands of its amalgamated successor for the same assessment year - HELD THAT: - The Revenue consciously assessed the income pertaining to the amalgamating company in the hands of the petitioner as its successor. Since the same income had thereby been brought to tax in the hands of the person identified by the Revenue as liable to assessment, the impugned proceedings could not simultaneously be kept alive against the amalgamating company.

The fundamental prohibition against double taxation, unless expressly authorised, and the obligation to assess income in the hands of the right person precluded parallel reassessment proceedings for the identical income. [Paras 7, 8, 9]

The reassessment notice issued to the amalgamating company and all consequential proceedings were quashed; the separate challenge to a notice issued in the name of a non-existent company was left open.

Final Conclusion: The writ petition was allowed and the reassessment notice issued to the amalgamating company, along with consequential proceedings, was quashed because the identical income had already been assessed in the hands of the amalgamated successor.

Exchange of Information - Advantage of extension of limitation period by a year, as provided in clause (ix) of the explanation to Section 153(B) - Limitation and time-barred assessments - Scope of treaty between India and Swiss Confederation - reference to the Foreign Tax and Tax Research Division (FT&TR) relying on Article 26 of the India Hong Kong treaty, so as to enable assessment for AY 2017-18 - information relatable to the fiscal year

HELD THAT:- Having heard learned counsel for the parties, we are of the considered opinion that the appeal is liable to be dismissed in light of the judgment of this Court in the case of Sneh Lata Sawhney [2025 (5) TMI 1338 - DELHI HIGH COURT] which has further been followed and elaborated by this Court in the case of Sanjay Jain [2026 (1) TMI 1418 - DELHI HIGH COURT]

Reassessment notice - revenue's proposal to drop proceedings

Validity of reassessment proceedings against the purchasing company where the Revenue proposed to drop them while reserving its right to proceed against the seller company - HELD THAT: - Upon the Revenue's statement that it proposed to drop the proceedings against the petitioner, the reassessment notice and all consequential proceedings could not survive. [Paras 3, 4]

The reassessment notice for Assessment Year 2014-15 and proceedings pursuant to it were quashed and set aside; the writ petition was allowed.

Final Conclusion: The reassessment notice and consequential proceedings against the petitioner for Assessment Year 2014-15 were quashed after the Revenue stated that it proposed to drop those proceedings.

Reasoned appellate orders - Non-application of mind - Validity of the Tribunal's common order disposing of seven appeals without dealing with the contentions or issues involved, while recording inconsistent hearing and pronouncement dates for the respective sets of appeals

HELD THAT: - The Tribunal's order was bereft of logic, reasoning and rationale. Its disposal of appeals heard on different dates through a common order, coupled with failure to address the parties' contentions and the issues arising, disclosed undue haste and non-application of mind. Such negligence in appellate fact-finding adjudication could not be countenanced. [Paras 6, 7, 9]

The impugned Tribunal orders were quashed and the seven appeals were restored to their original numbers for fresh decision by a different Bench, without any expression on the merits.

Final Conclusion: The appeals were disposed of by setting aside the Tribunal's orders and restoring the matters for fresh adjudication by another Bench. The merits were expressly left open.

Clean slate principle in sale of corporate debtor as a going concern - Reopening of assessment on surmises and conjectures - Repeated taxation of the same income in different assessment years

Clean slate principle in sale of corporate debtor as a going concern - Extinguishment of past liabilities upon liquidation sale - Reopening based on a past interest liability after sale of the corporate debtor as a going concern under the liquidation process - HELD THAT: - The purchaser of a corporate debtor sold as a going concern under the liquidation process is entitled to a clean slate, under which past liabilities and investigations stand extinguished. The alleged cessation of the past interest liability could not therefore be foisted upon the purchaser. [Paras 8, 10]

The reopening founded on the alleged past liability was unsustainable.

Reopening of assessment on surmises and conjectures - Repeated taxation of the same income in different assessment years - Failure to consider material reassessment reply - Reopening on the assumed claim of deduction of unpaid interest and on the same alleged cessation of liability already made subject to reopening for earlier assessment years - HELD THAT: - The reopening proceeded merely on the presumption that the petitioner might have claimed deduction of unpaid interest, despite its clarification that no such deduction was claimed and the availability of the profit and loss account for verification. The same alleged cessation of interest arising from the self-same transaction could not be repeatedly brought to tax in different assessment years. The order under section 148A(3) also failed to address the clean-slate defence and binding precedents raised in the reply, while improperly placing the burden on the petitioner. [Paras 11, 12, 13, 14]

The reassessment notice and the order under section 148A(3) for Assessment Year 2021-22 were quashed.

Final Conclusion: The writ petition was allowed, and the reassessment notice and order for Assessment Year 2021-22 were quashed.

Violation of principles of natural justice - Non-consideration of reply pursuant to judicial direction - Validity of the assessment order passed without considering the assessee's reply despite a prior direction to do so

HELD THAT: - The assessment order was passed without considering the reply which the Assessing Officer had been specifically directed to consider. Passing the order to meet the limitation for completion of assessment could not justify disregard of that reply; the order consequently suffered from a breach of the principles of natural justice. [Paras 4, 5]

The assessment order was quashed without examination on merits and the matter was remanded for fresh assessment after considering the reply, with all rights and contentions kept open.

Final Conclusion: The writ petitions were disposed of by quashing the assessment order for breach of natural justice and remanding the assessment for fresh consideration of the assessee's reply.

Deduction u/s 80-IB(10) - Housing-project deduction - minimum plot area - Diversion of project land to personal residential use

Whether the assessee remained eligible for deduction under Section 80-IB(10) after excluding part of the land initially earmarked for the housing project and constructing a personal residential house thereon? - HELD THAT: - Though the project as initially proposed covered the entire extent of land and phases could ordinarily be considered as part of the project as a whole, the assessee subsequently excluded a substantial portion for constructing a personal residence.

That construction was neither part of the housing project nor an affordable residential unit within the prescribed built-up-area limit. Consequently, the land available for the housing project stood reduced below the minimum statutory extent, disentitling the assessee from the claimed deduction. The challenge to the earlier revisional intervention was rendered inconsequential because the fresh assessment was made after the personal residential construction had commenced. [Paras 18, 19, 20, 22, 23]

The disallowance of the claimed deduction for both assessment years was upheld.

Final Conclusion: No substantial question of law arose for consideration. The appeals were dismissed.

Approval u/s 80G for trusts with mixed charitable and religious objects - Applicability of section 13(1)(b) at the registration stage

Entitlement of a trust having objects charitable for the public at large, including an object concerning service to pilgrims and religious places, to consideration for approval under section 80G(5) - HELD THAT: - The Court accepted the Tribunal's factual finding that the Trust's objects were not wholly for the benefit of a particular religious community but were largely charitable in character for the public at large. The restriction in section 13(1)(b) operates while considering exemption under section 11 and not while granting registration under section 12A. The Tribunal had restored the matter for fresh consideration of approval under section 80G after necessary verification and opportunity of hearing; the Court found that this course disclosed no substantial question of law. [Paras 5, 6]

The Revenue's appeal was dismissed, leaving the Tribunal's direction for fresh consideration of approval under section 80G in accordance with law undisturbed.

Final Conclusion: No substantial question of law arose from the Tribunal's order. The Revenue's appeal was dismissed.

Excess of stamp duty value over consideration under section 56(2)(x) - Stamp duty valuation for immovable property under section 56(2)(x) - Date of agreement and banking-channel payment

Addition of deemed income on purchase of immovable property by adopting stamp duty value as on registration, despite prior allotment and payment through banking channel - HELD THAT: - The trust's existence before the date stated in its PAN was established by the resolution constituting it, the unrebutted affidavit and the bank account opened in its name. Its advance payment to the developer through banking channel was undisputed.

The first and second provisos to section 56(2)(x) consequently required adoption of the stamp duty value prevailing on the date of the agreement/allotment, rather than that prevailing on registration. As the stamp duty value for FY 2001-02 was lower than the purchase consideration, no positive difference survived for addition. [Paras 17, 18, 19, 21, 22]

The addition under section 56(2)(x), founded on the stamp duty value in the registered sale deed, was directed to be deleted.

Final Conclusion: The appeal was allowed and the addition under section 56(2)(x) was deleted. The remaining grounds were left open as academic.

Levy of Late Fee u/sec 234E - delay in filling the quarterly TDS Statement - Prospective operation of power to compute TDS late fee pertaining to financial year 2012-13

HELD THAT: - The power under section 200A to compute and demand late fee under section 234E, being substantive in nature, operates prospectively from 1.06.2015. Consequently, no late fee could be charged through an intimation under section 200A for TDS statements relating to the financial year 2012-13. See SRI. FATHERAJ SINGHVI AND OTHERS [2016 (9) TMI 964 - KARNATAKA HIGH COURT] [Paras 5, 6]

The levy of late fee was deleted and the appeals were allowed.

Final Conclusion: The orders sustaining late fee under section 234E for the delayed TDS statements of the relevant period were set aside, and the appeals were allowed.

Transfer Pricing Officer's jurisdiction over permanent establishment - Transaction-specific reference for arm's length price determination - Scope of remand directions

Validity of the reference to the Transfer Pricing Officer for determination of the assessee's permanent establishment and taxability of profits during remand proceedings - HELD THAT: - The jurisdiction under section 92CA is confined to computation of the arm's length price of a specific international transaction referred by the Assessing Officer; it does not extend to deciding the existence of a permanent establishment under the India-Singapore DTAA or the consequent taxability and attribution of business profits. The reference neither identified any international transaction nor conformed to the remand directions, which required the Assessing Officer to conduct a fresh examination of the permanent establishment issue. The Assessing Officer could not transfer that responsibility to the Transfer Pricing Officer, and could not found the assessment solely on the latter's conclusions without independent examination.

As in Sava Healthcare Ltd. [2019 (7) TMI 173 - ITAT PUNE] principle emerging therefrom is that, the Ld.TPO cannot assume functions which are statutorily entrusted to the Ld.AO. The mere fact that an appeal against the said decision is stated to be pending would not, by itself, render the decision inapplicable, in the absence of any contrary decision of the Hon’ble Bombay High Court. [Paras 6, 7]

The Transfer Pricing Officer's findings on the existence of a permanent establishment and taxability of profits were unsustainable; the additional legal ground was allowed and the assessment founded solely on those findings could not survive.

Final Conclusion: The assessee's appeal was allowed on the jurisdictional ground, and the revenue's cross-objection was dismissed.

TP Adjustment - functional comparability under TNMM - Other Method - ad hoc revenue split

Determination of the arm's length price of licence fees paid for distribution of licensed Hollywood television and film content, by TNMM using software and hardware distribution comparables or by a revenue split under the Other Method - HELD THAT: - The assessee's contractual entitlement to an assured distribution margin, coupled with the AE's ownership or acquisition of content and responsibility for intellectual-property risks, supported its characterisation as a limited-risk distributor. Under TNMM, product differences do not by themselves disqualify comparables; the material inquiry is into comparable functions, assets, risks, contractual arrangements and reliable financial data.

The software and hardware distribution comparables could not be rejected merely because they did not distribute film or entertainment content. Conversely, the revenue split adopted by the TPO rested upon assigned weightages for functions, assets and risks without identified comparable uncontrolled transactions, reliable market evidence, or an objective economic basis for quantifying the respective contributions. Identification of functions and risks could not, by itself, establish the economic value attributable to them or the arm's length price. [Paras 9]

The rejection of TNMM and the arm's length price determined through the ad hoc revenue split were unsustainable; the transfer-pricing adjustment was deleted, and the Assessing Officer was directed to determine the arm's length price under TNMM using the examined software distribution comparables and recompute the total income in accordance with law.

Final Conclusion: The appeal was allowed on the transfer-pricing issue. The adjustment based on the ad hoc revenue split was deleted and the arm's length price was directed to be recomputed under TNMM.

Taxability of interest forming part of a judgment debt - Enforcement of foreign arbitral award as decree

Taxability in India of interest included in a foreign arbitral award that was enforced as a decree of the Delhi High Court - HELD THAT: - The Tribunal held that, upon enforcement, the foreign arbitral award, including the amount described as interest, became a decree of the Court.

We next find the mandate of the Hon'ble Supreme Court of India in Islamic Investment Company [2002 (3) TMI 3 - BOMBAY HIGH COURT] wherein, they have stated that where the amount paid is interest, it becomes ‘judgement debt’

We are further inclined to agree with the assessee that though the nomenclature of "interest" has been used in the Arbitral Award, the same does not attract the definition of "interest" under section 2(28A) of IT Act. To our mind therefore, the damages, including the interest has assumed the character of a “judgement debt” and is beyond the purview of Indian Income Tax Act.

Thus, amount of Interest received, as part of the decree of the court, is not exigible to tax and accordingly the same is deleted. The grounds are disposed off in the aforesaid terms. [Paras 17, 18]

The interest received as part of the decretal amount was held not exigible to tax and the addition was deleted.

Final Conclusion: The appeal was allowed, and the interest component included in the decretal award was deleted from taxation.

Provisional attachment of alleged benami property - mandatory statutory sequence - Prior approval for provisional attachment -notice to benamidar as condition precedent

Validity of provisional attachment of jewellery alleged to be benami where approval of the Approving Authority preceded the notice to the alleged benamidar - HELD THAT: - The statutory sequence under Section 24 requires issuance of notice to the alleged benamidar, disclosing the reasons to believe that the property is benami, before the Initiating Officer seeks prior approval for provisional attachment. The Approving Authority can consider approval only on the basis of that notice and other material; approval obtained before issuance of notice is therefore mechanical and contrary to the statutory scheme. [Paras 7, 8]

The confirmed provisional attachment was set aside and the appeals were allowed, with liberty to the respondent to initiate fresh action in accordance with law and to the appellants to raise all available grounds in such proceedings.

Final Conclusion: The order confirming the provisional attachment was set aside because the statutory requirement of issuing notice before obtaining approval for attachment was not followed. Fresh action in accordance with law was left open.

Writ jurisdiction despite alternative statutory remedy - Customs treatment of goods as prohibited goods

Maintainability of the writ petition challenging the customs treatment of adult sex toys as prohibited goods, despite the statutory appellate remedy - HELD THAT: - Availability of an alternative statutory remedy is ordinarily a ground for restraint in exercise of writ jurisdiction, but is not an absolute bar. The challenge raised a specific question whether the description of the goods as obscene adult sex toys and invocation of the penal provision, without identifying a statutory or notification-based prohibition, could render them prohibited goods. Where a statutory authority is alleged to have acted outside objective law on considerations of subjective morality, seriously affecting the right to trade, the writ jurisdiction need not be declined. [Paras 8, 9, 10, 11]

The preliminary objection was rejected and the writ petition was held maintainable; no opinion was expressed on the merits.

Final Conclusion: The writ petition was held maintainable notwithstanding the alternative appellate remedy, with the merits kept open for consideration.

Provisional attachment of bank account - statutory time-limit - Continuation of provisional freezing of a bank account after the maximum period under section 110(5) of the Customs Act, 1962 -

HELD THAT: - Section 110(5) permits provisional attachment for no more than six months, extendable by a further period not exceeding six months upon written reasons and communication before expiry of the original period. A show-cause notice and pendency of adjudication proceedings cannot, by themselves, extend an attachment beyond that express statutory maximum. The attachment consequently ceased to operate by efflux of time.

Hon’ble Supreme Court in Kesari Nandan Mobile [2025 (8) TMI 992 - Supreme Court] while considering the statutory scheme governing provisional attachment under Section 83 of the CGST Act, the Hon’ble Supreme Court emphasised that an attachment which has ceased to operate by efflux of the statutory period cannot be continued by administrative action. [Paras 7, 9, 10, 12, 13]

The continued freezing was held without authority of law, and the bank account was directed to be defrozen, without precluding action otherwise permissible in law.

Final Conclusion: The writ petition was allowed and the provisional freezing of the bank account was treated as having ceased by efflux of the statutory period.

Transitional arrangements for restricted gold imports - Advance payment vis-a -vis irrevocable commercial letter of credit

Entitlement of bona fide importers of gold jewellery to transitional protection where substantial advance payments were made under pre-notification contracts, but no irrevocable commercial letter of credit was established - HELD THAT: - The exception for irrevocable commercial letters of credit was intended to protect bona fide transactions entered into before the import restriction. An irrevocable commercial letter of credit secures payment through an independent banking mechanism upon production of shipping documents; however, advance payment exceeding 90% of the invoice value afforded the foreign seller higher security.

Having found the petitioners to be regular and bona fide traders in precious metals and the transactions to be genuine, the Court held that a mechanical application of the policy would defeat the object of the transitional arrangement. Notifications constituting delegated legislation ordinarily operate prospectively unless the statute authorises retrospective operation. [Paras 23, 25, 26, 27, 28]

The benefit of the transitional arrangement was directed to be extended to the petitioners' specified import transactions.

Final Conclusion: The writ petitions were disposed of with a direction to extend the benefit of the Foreign Trade Policy transitional arrangement to the petitioners' specified transactions.

Provisional release of seized betel nuts - Exercise of writ jurisdiction despite statutory alternative remedy - Conflicting country-of-origin test reports - Unsafe food goods -

Whether seized betel nuts were entitled to provisional release despite conflicting test reports concerning their country of origin and findings of mould infestation and unsafe quality? - HELD THAT: - The seizure was founded on the goods being of foreign origin. While re-sampling later indicated that the representative samples mostly resembled Indian areca nuts, the earlier report indicated Indonesian origin and mould infestation; the subsequent report did not address mould infestation. The food laboratory report also found the nuts damaged by mould and insects, beyond the prescribed limit, and unsafe for consumption.

Thus, this was not a clear case of goods being of Indian origin, and the coordinate-bench decision relied Kumar Enterprise [2026 (7) TMI 2025 - CALCUTTA HIGH COURT] upon was distinguishable. The petitioner had also bypassed the statutory remedy. [Paras 4, 5]

The Court declined to interfere with the seizure list or the rejection of provisional release and dismissed the writ petition, leaving the petitioner free to pursue the statutory remedy.

Final Conclusion: The writ petition was dismissed, with liberty to the petitioner to avail the statutory remedy.

Advance Authorisation - export obligation and packaging materials - DRI officers - jurisdiction to issue customs duty demand notices

Advance Authorisation - export obligation and packaging materials - Whether export of IMFL packed in bottles, caps and labels procured domestically under Annexure-45 could be treated as breach of the export-obligation condition attached to the Advance Authorisation for imported Vetted Malt Scotch? - HELD THAT: - The notification distinguishes raw materials and components required for manufacture of the resultant product from packaging materials required for packing it.

The difference between " inputs' under Duty Free Import Authorization in Para 4.2.1 and Advance Authorization in Para 4.1.3 has been explained in the case of R.P INTERNATIONAL Versus UNION OF INDIA [2017 (5) TMI 1008 - PUNJAB AND HARYANA HIGH COURT] held that 'the difference is that whereas the DFIA Scheme permits duty free import of 'inputs' which are "required for production of export product", the "Advance Authorization' allows duty free import of 'inputs', which are "physically incorporated in the export product"'

Under the Advance Authorisation scheme, only inputs physically incorporated in the export product are relevant. Vetted Malt Scotch was the imported input incorporated in IMFL, whereas the bottles, caps and labels were domestically procured packing materials and were not physically incorporated in IMFL. Their procurement under Annexure-45 could not therefore be equated with the imported input or render the exports violative of the Advance Authorisation condition. [Paras 18, 20, 22]

The alleged breach of the Advance Authorisation condition was not established; the impugned order was set aside on merits.

DRI officers - jurisdiction to issue customs duty demand notices - Whether officers of the Directorate of Revenue Intelligence lacked jurisdiction to issue the show-cause notice for recovery of customs duty? - HELD THAT: - The Supreme Court's later review decision [2024 (11) TMI 391 - SUPREME COURT (LB)] held that Directorate of Revenue Intelligence officers appointed as customs officers and assigned the functions of a proper officer are competent to issue notices for recovery of customs duty. Assessment and recovery of short-paid duty are distinct statutory functions; the earlier view to the contrary had been reversed. [Paras 21, 22]

The challenge to the jurisdiction of the Directorate of Revenue Intelligence officers was rejected.

Final Conclusion: The impugned order was set aside and the appeal was allowed, since the alleged violation of the Advance Authorisation condition was not made out. The jurisdictional objection to the show-cause notice was, however, rejected.

Seizure of the gold at first point - Reasonable belief and statutory burden in seizure of gold - Penalty for dealing with alleged smuggled gold

Validity of adjudication u/s 138-B - Failure to permit cross-examination of witnesses whose statements were relied upon - HELD THAT: - On de novo consideration pursuant to the High Court's direction, the Tribunal recorded the appellants' submission that no specific request for cross-examination had been made before the adjudicating authority. It consequently held that the earlier finding that the procedure under Section 138B had been violated could not be sustained as a ground to set aside the adjudication order. [Paras 2]

The appeals were considered afresh on merits, without treating non-compliance with Section 138B as a ground for setting aside the adjudication order.

Reasonable belief for seizure of gold - Burden of proving smuggled nature of gold - Confiscability of gold seized outside a Customs station in the absence of established reasonable belief that it was smuggled - HELD THAT: - A reasonable belief, founded on definite material and existing at the time of seizure, is a condition precedent to seizure and to shifting the statutory burden upon the person from whom the gold is seized. The absence of foreign markings, the purity of the gold, and the lack of evidence regarding its foreign origin, illicit importation or the manner of smuggling showed that the asserted belief was founded on presumption rather than corroborative material. The statutory burden therefore did not arise; in any event, the appellants' documentary claim of domestic procurement was not disproved by a completed investigation. [Paras 15, 18, 19, 20, 25]

The gold was held not liable to confiscation, and the confiscation was set aside.

Penalty for dealing with alleged smuggled gold - Penalties imposed for alleged involvement in dealing with smuggled gold - HELD THAT: - As the Department failed to establish that the gold was smuggled and the confiscation was not upheld, the foundational allegation for penal liability did not survive. [Paras 26]

All penalties imposed on the appellants were set aside.

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

Customs exemption for Train Protection and Warning System - Limitation for customs duty demand under normal period

Classification of Disc Brake Units and Pole Wheels as Train Protection and Warning System - Strict interpretation of customs exemption notification - Eligibility of Disc Brake Units and Pole Wheels, imported as components of an axle-mounted disc brake system, for concessional duty as a Train Protection and Warning System - HELD THAT: - In the absence of a statutory definition, the expression Train Protection and Warning System was required to be understood in its recognised railway-engineering context. The Indian Railways specification treated the interface to the existing brake-control system separately from TPWS components; the imported goods formed part of the mechanical or pneumatic braking system and were neither specified as TPWS equipment nor shown to perform its signal-based functions. The official railway material prevailed over the technical opinions produced by the appellant. Applying the principle of strict construction of an exemption notification, the appellant failed to establish that the goods fell within the exemption entry.

We draw support from the Supreme Court's ruling in Dilip Kumar and Company [2018 (7) TMI 1826 - SUPREME COURT (LB)] which has held that exemption notifications are to be interpreted strictly. Any ambiguity in an exemption notification is to be resolved against the assessee and in favour of the Revenue. [Paras 12, 13, 14, 15, 16]

The imported Disc Brake Units and Pole Wheels were held not to be parts or components of TPWS and were consequently denied the concessional rate of duty.

Limitation for differential customs duty under normal period - Demand beyond scope of show cause notice - Validity of the differential-duty demand for Bills of Entry falling outside the normal limitation period invoked in the show cause notice - HELD THAT: - Since the show cause notice invoked the normal period under section 28(1), a demand beyond that period could not be sustained by effectively invoking the extended-period provision under section 28(4), which was beyond the scope of the notice. [Paras 17]

The differential-duty demand was restricted to Bills of Entry falling within the normal period of limitation.

Final Conclusion: The appeal was allowed in part. The exemption claim was rejected, while the differential-duty demand was confined to the normal limitation period.

Enforceability of the direction requiring the accused to surrender possession of employer-allotted residential quarters notwithstanding the pendency of a review petition before the Supreme Court - Binding force of Supreme Court directions -

HELD THAT: - A court exercising inherent jurisdiction cannot sit in appeal over, interpret or dilute an unambiguous direction of the Supreme Court. The Supreme Court's finding that the undertaking operated for all the accused, and its consequential direction for immediate surrender of possession, remained binding under Article 141. Mere pendency of a review petition does not suspend the operation of that judgment unless the Supreme Court itself stays, modifies or suspends it. [Paras 9, 10, 11, 12, 13]

The Trial Court was bound to implement the Supreme Court's operative direction and rightly directed the petitioner to vacate the quarters; no interference was warranted.

Final Conclusion: The Criminal Miscellaneous Case was dismissed, as the impugned order merely implemented the binding direction of the Supreme Court and suffered from no illegality, impropriety or irrationality.

Locus standi of a third party affected by way leave permission - Renewal of expired Way Leave Permission - Natural justice and safety audit in grant of Way Leave Permission - Proof of fraud and collusion

Locus standi of a third party affected by way leave permission - Maintainability of the writ petition by the holder of railway underpass rights challenging revival of a water-pipeline Way Leave Permission - HELD THAT: - The respondent had constructed and operated two railway underpasses pursuant to agreements with the Railway Authorities. Its apprehension that the revived pipeline and consequential construction could adversely affect those underpasses and its adjoining infrastructure was neither fanciful nor baseless. A person likely to suffer adverse civil consequences from an authority's act has standing to challenge it; the Railway Authorities were correspondingly obliged to ensure that a subsequent permission did not adversely affect the underpasses. [Paras 20, 21]

The respondent had locus standi to maintain the writ petition.

Natural justice and safety audit in grant of Way Leave Permission - Overhead construction on railway land under Way Leave Permission - Validity of the revived Way Leave Permission granted without considering the safety implications for existing railway underpasses or hearing their holder - HELD THAT: - Despite the respondent's objections identifying possible safety consequences, the Railway Authorities neither responded to those objections nor afforded it an opportunity of hearing. No due safety audit addressing the effect of the proposed pipeline works on the underpasses and the surrounding industrial area was shown to have preceded the grant. The permitted overhead structure also appeared contrary to Clause 1033(12) of the Railway Engineering Code. [Paras 24, 25, 33]

The grant of permission without a due safety audit and opportunity of hearing was held irregular and illegal.

Renewal of expired Way Leave Permission - Jurisdiction of NCLT over rights dehors insolvency resolution - Whether an expired Way Leave Permission could be retrospectively renewed or preserved through the corporate insolvency resolution process and approval of a resolution plan? - HELD THAT: - The earlier Way Leave Permission had expired before the appellant was admitted to the corporate insolvency resolution process. Consequently, there was no subsisting permission capable of continuing by operation of law. Renewal or revival of a railway land permission was a dispute dehors the insolvency resolution process and lay outside the jurisdiction of the NCLT; approval of a resolution plan could neither renew the expired permission nor create a fresh right. An expired permission could only be replaced by a fresh permission from the competent authority. [Paras 26, 27, 28, 29, 33]

The purported retrospective renewal of the expired Way Leave Permission was invalid.

Proof of fraud and collusion - Sustainability of the findings that the appellant and Railway Authorities acted fraudulently and in collusion - HELD THAT: - A finding of fraud or fraudulent collusion cannot be lightly returned. Since fraud is a criminal charge, it must be established on proper material beyond reasonable doubt, rather than on the civil standard of balance of probabilities. [Paras 32]

The observations attributing fraud and collusion to the appellant and the Railway Authorities were expunged.

Final Conclusion: The invalidation of the retrospective Way Leave Permission and consequential reliefs was affirmed. The findings alleging fraud and collusion against the appellant and the Railway Authorities were expunged.

Interim moratorium under the Insolvency and Bankruptcy Code -criminal prosecution for dishonour of cheque

Whether the Trial Court was justified in staying the proceedings under Section 138 of the Negotiable Instruments Act, 1881 by invoking the interim moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016? - HELD THAT: - The interim moratorium postpones civil actions for recovery of debt and does not extend to criminal prosecution for dishonour of cheque. Such prosecution serves to preserve the credibility of negotiable instruments and commercial discipline; consequently, initiation of insolvency proceedings against the accused was no ground to stay the complaint. [Paras 20, 22]

The stay of the complaint proceedings was set aside and the complaint was restored for further proceedings in accordance with law.

Final Conclusion: The petition was allowed. The complaint proceedings were restored to the Trial Court for continuation in accordance with law.

Limitation for appeal under the Insolvency and Bankruptcy Code - Exclusion of time for obtaining certified copy

Maintainability of an appeal filed beyond the maximum condonable period prescribed for an appeal against an order reviving the corporate insolvency resolution process - HELD THAT: - The impugned order was pronounced and made available in the public domain on the same day, and the appellant's assertion of later upload was found factually incorrect. Knowledge of the order was held not to be a ground under the insolvency regime. The explanation concerning delayed receipt of a certified copy was unsupported by the material on record and did not establish sufficient cause. An appeal must be filed within the prescribed period of 30 days, with condonation permissible only for a further period not exceeding 15 days; the appellate forum has no jurisdiction beyond that limit. [Paras 23, 25]

The appeal, having been filed beyond the maximum condonable period and without sufficient cause, was held not maintainable and dismissed.

Final Conclusion: The appeal against revival of the corporate insolvency resolution process was dismissed as barred by the statutory limitation governing appeals under the Code.

Rejection of discharge and the subsequent framing of charge for the offence under Sections 3 and 4 - definition of “proceeds of crime” as provided under Section 2(1)(u) - Offence of money-laundering as an independent offence - Admissibility of statements under Section 50 of the PMLA - Requirement of Previous Sanction for prosecution of public servant - lack of evidence demonstrating any link or association between the petitioner and the proceeds of crime and no money trail.

HELD THAT:- We are not inclined to interfere with the impugned judgment(s) and order(s) of the High Court [2026 (5) TMI 648 - JHARKHAND HIGH COURT] hence, the special leave petitions are dismissed.

Discharge at the stage of framing charge - Money-laundering by knowingly assisting transfer of proceeds of crime

Discharge of the accused charged with money-laundering for allegedly facilitating transfer and delivery of proceeds of crime - HELD THAT: - At the stage of discharge, the Court is required to ascertain whether the material raises a strong suspicion and reasonably connects the accused with the offence; it cannot conduct a roving enquiry or weigh the evidence as at trial.

The petitioners' statement indicated that the funds were arranged and delivered at the request of the co-accused rather than in the ordinary course of business, and no contemporaneous material substantiating the claimed supply of goods was produced.

The bank records and the statements of persons who arranged and delivered the cash constituted corroborative prima facie material showing that the petitioners knowingly assisted the process connected with proceeds of crime. [Paras 25, 26, 27, 28, 29]

The material raised a strong prima facie suspicion of the petitioners' involvement in the alleged money-laundering offence; dismissal of the discharge petition was upheld.

Final Conclusion: The Criminal Revision Case was dismissed, the Court finding no illegality in refusal to discharge the petitioners.

Rectification application - HELD THAT:- An application is filed by Directorate of Enforcement, Jaipur Zone for rectification of clerical mistake bonafidely crept in judgment dated 21.2.2019. No one is present on behalf of Directorate of Enforcement, to argue the matter.

Learned public prosecutor of State is directed to intimate office of the ED, Jaipur. List this case on 25.08.2026.

Declaration under Sabka Vishwas (Legacy Dispute Resolution) Scheme - Determination of tax dues on documentary evidence - Determination of the amount payable under the Sabka Vishwas (Legacy Dispute Resolution) Scheme without verification of the declarant's disclosure and supporting documentary evidence

HELD THAT: - The Designated Committee issued two Forms SVLDRS-3 determining different amounts and had not verified the departmental records, the complete disclosure or the documents produced by the declarant. Under the Scheme and the prescribed Rules, the Committee was required to undertake such verification before determining the amount payable; that statutory exercise was absent. [Paras 11, 12, 13, 14]

The Forms SVLDRS-3 were set aside and the Designated Committee was directed to verify the complete disclosure and supporting material and pass a fresh order in accordance with the Rules.

Final Conclusion: The writ petition was partly allowed by setting aside the impugned Forms SVLDRS-3 and remitting the determination to the Designated Committee for fresh verification and decision.

Trading receipts outside scope of taxable service - Renting of residential dwelling for hostel use - Extended limitation for suppression of facts - Service tax demand based solely on Form 26AS

Trading receipts outside scope of taxable service - Taxability of trading and sale receipts attributed to the appellant as consideration for services - HELD THAT: - No material connected the appellant with the concern in whose name the trading records were produced. Independently, trading or sale involving transfer of title in goods is expressly excluded from the definition of service and could not be treated as a taxable service. [Paras 10]

The service tax demand on receipts from trading or sale was held unsustainable.

Renting of residential dwelling for hostel use - Taxability of rent received from property let for use as a hostel - HELD THAT: - A hostel, being residential accommodation for students for a comparatively longer stay, was held to qualify as a residential dwelling. Renting of such dwelling for use as residence was outside the scope of taxable service during the post-negative-list period. [Paras 11, 12]

The rent received from the property let for hostel use was held not taxable.

Extended limitation for suppression of facts - Invocation of the extended period for non-payment of service tax and non-registration in respect of activities believed to be non-taxable - HELD THAT: - The appellant's belief that the activities were outside the ambit of taxable service was held bona fide. Mere non-payment of tax or failure to obtain registration did not establish intentional suppression; the department had not produced evidence of a positive act to evade tax. [Paras 13]

The extended period invoked for issuance of the show-cause notice was held to be unavailable.

Service tax demand based solely on Form 26AS - Confirmation of service tax demand solely on Form 26AS and income-tax-return information - HELD THAT: - Form 26AS or income-tax-return particulars alone could not establish service tax liability. The department was required to identify the service provider, recipient and consideration constituting quid pro quo for a taxable service, and no such evidence was established. [Paras 14]

The demand could not be confirmed merely on the basis of Form 26AS or income-tax-return information.

Final Conclusion: The impugned order confirming service tax demand, interest and penalties was set aside, and the appeal was allowed.

Discrepancy between Form 26AS receipts and ST-3 returns - Clerical error in challan particulars - Verification of the claimed service-tax payment and reconciliation of receipts reflected in Form 26AS and ST-3 returns - HELD THAT: - The appeal had been dismissed solely because the challan particulars did not tally with the payment claimed. In view of the assertion that the correct challan was available on record and that the differential receipts required reconciliation, verification by the original adjudicating authority was considered necessary. [Paras 6, 7]

The impugned order was set aside and the matter was remanded to the original adjudicating authority to verify the challan, payment and relevant reconciliation documents after granting opportunity of hearing, without adjudication on merits.

Final Conclusion: The impugned order was set aside and the appeal was allowed by way of remand for verification of the claimed payment and reconciliation of the differential receipts.

Service taxability of vehicle - dealer incentives and trade discounts - Declared service - agreement to do or tolerate an act

Vehicle-dealer incentives as trade discounts - Consideration for service - Taxability of incentives, discounts and support received by an authorised vehicle dealer from the manufacturer under target-based and non-target-based dealership schemes - HELD THAT: - A service requires an activity carried out by one person for another for consideration. The dealer purchased vehicles and spare parts on its own account and resold them for its own profit; any benefit accruing to the manufacturer from increased sales was merely incidental to trade and did not constitute a service rendered to it. Achievement targets were conditions for grant of discounts and not enforceable obligations constituting consideration for an identified service. Amounts representing price adjustments or discounts retained their character as trade discounts notwithstanding that their quantification or payment occurred after the sale, where known to the buyer at or before the sale.

The issue is otherwise no more res integra as stands decided by this Tribunal in the case of M/s Roshan Motors Pvt Ltd [2022 (8) TMI 1254 - CESTAT NEW DELHI] held that no service tax can be demanded or incentive which was in the form of trade discount extended to the party in terms of a declared policy for achieving sales target. [Paras 10, 11, 12, 14, 15]

The receipts were not consideration for taxable services, and the service-tax demand and consequential penalties on the dealer and its Director could not be sustained.

Declared service-agreement to do or tolerate an act - Applicability of declared-service provisions to target-linked incentives and discounts under the vehicle dealership agreement - HELD THAT: - The declared-service provision applies only where the agreement specifies an obligation to refrain from an act, tolerate an act or situation, or do an act, with consideration specifically flowing for that obligation. The dealership agreement contained no such obligation; its relevant clauses only provided discount schemes uniformly available to dealers. A penal consequence for non-fulfilment of targets was not consideration for tolerating an act or situation. [Paras 13, 15]

The receipts were not taxable as consideration for a declared service.

Final Conclusion: The impugned order dropping the service-tax demand and consequential penalties was upheld. The departmental appeals were dismissed.

Service of adjudication order - Limitation for statutory appeal - Ex parte adjudication and natural justice

Service of adjudication order - Limitation for statutory appeal - Computation of limitation for appeal against an adjudication order where the department proved only dispatch and not service of the order - HELD THAT: - The statutory period for filing an appeal runs from the date of receipt of the adjudication order. Mere dispatch does not establish service in accordance with the prescribed mode. As the department produced no evidence of service before the appellant received the certified copy, the dispatch date could not be treated as the date of communication.

Mere proof of dispatch cannot be the proof of service thereof, as has been observed by this Tribunal in the case of Dinesh Kumar Choudhary [2026 (7) TMI 369 - CESTAT NEW DELHI]. We also observe that the service has to be ascertain in terms of section 35 of the Central Excise Act which is applicable to service tax matter also by virtue of section 83 of the Finance Act, [Paras 9, 10, 11, 12]

The appeal before the Commissioner (Appeals) was within limitation; the order rejecting it as time-barred was set aside and the matter was remanded for decision on merits.

Ex parte adjudication and natural justice - Validity of the ex parte adjudication where the appellant had no knowledge of the proceedings and no opportunity to present its case - HELD THAT: - The appellant had neither responded to the show-cause notice nor participated in the original proceedings, which were decided ex parte. The Tribunal found that the appellant lacked knowledge of the proceedings and that its absence resulted in violation of the principles of natural justice, a circumstance not considered by the Commissioner (Appeals). [Paras 13, 14]

The matter was remanded to the Commissioner (Appeals) for fresh adjudication on merits after affording the appellant a reasonable opportunity of representation.

Final Conclusion: The limitation dismissal was set aside because service of the adjudication order was not established and the appeal was filed within time from receipt of its certified copy. The matter was remanded to the Commissioner (Appeals) for fresh decision on merits after granting a reasonable opportunity of hearing.

Service tax on ocean freight under reverse charge in CIF contracts - Judicial discipline and binding precedent

Sustainability of service-tax demand on ocean freight from an importer under reverse charge in CIF contracts when the notifications imposing such liability had been struck down and no stay was operating - HELD THAT: - In the absence of a stay by the Supreme Court on the Gujarat High Court ruling, the appellate order [2019 (9) TMI 1315 - GUJARAT HIGH COURT] could not be faulted merely because the Revenue had disagreed with that ruling and filed a special leave petition. Judicial discipline required adherence to the ruling, and the subsequent decisions noted by the Tribunal supported the conclusion that the demand could not be sustained.

We also note that similar appeal filed by Revenue in case of Kiri Dyes and Chemical Ltd [2023 (3) TMI 1400 - CESTAT AHMEDABAD] was dismissed by the Ahmedabad bench observing "that the issue whether ocean freight/sea transportation service is liable to service tax or otherwise has been decided by jurisdictional High Court of Gujarat in the case of SAL Steel Limited and there is no stay against the said High Court judgment. No infirmity in the impugned order which was passed relying on the jurisdictional High Court judgment in the case of SAL Steel Limited - revenue's appeal is dismissed. Cross objection is also disposed of.” This order of Ahmedabad Bench has been upheld Hon'ble Supreme Court as reported as [2023 (9) TMI 305 - SC ORDER], after condoning the delay.[Paras 4]

The order setting aside the demand was upheld and the Revenue's appeal was dismissed.

Final Conclusion: The Revenue's appeal and stay application were dismissed, and the order setting aside the service-tax demand on ocean freight was sustained.

Valuation of renting of immovable property service - Additional consideration - nexus with taxable service - Penalty for failure to self-assess service tax

Valuation of renting of immovable property service - Additional consideration - nexus with taxable service - Inclusion of expenditure incurred by the service recipient for renovation and development of a rented stadium in the taxable value of renting of immovable property service - HELD THAT: - Service tax valuation is confined to the gross amount charged by the service provider as consideration for the taxable service. The recipient's expenditure on renovation was incurred on its own account, was not routed through or controlled by the appellant, and lacked the requisite nexus with the renting service. Such expenditure could not therefore be treated as additional consideration for renting the stadium. [Paras 4]

The expenditure incurred by the service recipient was excluded from taxable value, and the demand was confined to service tax on the actual rental consideration received and already paid with interest.

Penalty for failure to self-assess service tax - Penalties imposed after payment of service tax on the actual rental consideration before issuance of the show-cause notice - HELD THAT: - As the service tax on the actual consideration received had been deposited with interest before issuance of the show-cause notice, no basis remained to sustain the penalty under section 78. The penalty imposed for failure to self-assess was also not sustained. [Paras 4]

The penalties imposed under sections 77(2) and 78 of the Finance Act, 1994 were set aside.

Final Conclusion: The appeal was allowed to the extent that the recipient's renovation expenditure was excluded from taxable value. Service tax on the actual rental consideration already paid with interest was sustained, while the penalties were set aside.

Period of Limitation for service tax appeal - date of receipt of order - Condonation of delay within statutory period

HELD THAT: - Section 85(3A) makes the date of receipt of the adjudication order the starting point for limitation. As the receipt date was undisputed, the appeal dispatched six days after expiry of the normal period was within the further period which the Commissioner (Appeals) could condone. The date of dispatch was held relevant to filing; the prompt dispatch upon resetting the service tax password established bona fides and due diligence. [Paras 7, 9, 10]

The time-bar rejection was set aside and the matter was remanded to the Commissioner (Appeals) for fresh decision on merits after granting reasonable opportunity of hearing.

Final Conclusion: The appeal was allowed by way of remand, as the delay in filing the first appeal was within the condonable period and ought to have been condoned.

Goods Transport Agency service - hiring of lorries - service-tax demand under Goods Transport Agency service on receipts from hiring of lorries

HELD THAT: - The Tribunal found that the controversy was squarely covered by its earlier decision M/s. Sivasakthi Engineering & Fabricators [2024 (5) TMI 995 - CESTAT BANGALORE] and in appellant's own case [2024 (12) TMI 671 - CESTAT BANGLORE] and held that there was no justification to depart from those decisions. [Paras 16, 17]

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

Final Conclusion: Following its earlier decisions, including the appellant's own case, the Tribunal set aside the impugned order and allowed the appeal with consequential relief.

Reimbursable registration charges in service-tax valuation - Inclusion of registration charges collected from students and deposited with IATA in the gross taxable value of commercial training and coaching services

HELD THAT: - The Supreme Court had held that reimbursable expenditure was not included in the valuation provision before its amendment, which brought about a substantive and prospective change. Applying that ruling of M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT] the registration charges collected and deposited with IATA could not be included in the taxable value under Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006 read with Section 67 of the Finance Act, 1994. [Paras 6, 7]

The service-tax demand on the registration charges was unsustainable; the impugned order was set aside and the appeal allowed with consequential relief.

Final Conclusion: The demand on registration charges remitted to IATA was held unsustainable. The impugned order was set aside and the appeal was allowed with consequential relief.

Judicial discipline in implementation of remand directions - Non-application of mind in appellate adjudication

Compliance with the Tribunal's remand directions concerning classification, valuation and demand of duty on the disputed central excise products - HELD THAT: - The Tribunal had required fresh consideration of the technical material and other specified aspects before determining classification and consequential valuation. The Adjudicating Authority, while professing to examine the matter afresh, recorded observations contrary to the Tribunal's directions and proceeded to determine duty and impose penalty on other evidence. Such comments were unwarranted and reflected disregard of the binding remand directions. The appellate order, having incorporated the adjudication order in its entirety, equally suffered from non-application of mind. [Paras 4, 7, 8]

The adjudication and appellate orders were quashed, and the matter was remanded for fresh decision in conformity with the Tribunal's observations after affording the petitioner an opportunity of hearing.

Final Conclusion: The writ petition was allowed and the impugned orders were quashed for failure to adhere to the Tribunal's remand directions. The matter was remanded for fresh adjudication in accordance with law.

Ex parte adjudication - proof of service of hearing notice - Natural justice - opportunity of personal hearing

Validity of the ex parte appellate adjudication where service of notices of personal hearing upon the appellant was not established - HELD THAT: - The respondents failed to produce any acknowledgement or other material establishing service of the hearing notices. The appellant's appearance through counsel in another matter between the same parties before the same appellate authority on the same day fortified its case that it had not deliberately abstained from the hearing. Tribunal was required to address this specific plea but instead decided the interest claim on merits, resulting in a further denial of opportunity. [Paras 27, 28, 29, 30, 31]

The notices of personal hearing were held not to have been served, and the Commissioner (Appeals) was directed to reconsider the appellant's claim afresh.

Final Conclusion: The appeal was partly allowed. The matter was remitted to the Commissioner (Appeals) for fresh consideration after affording the appellant an opportunity of hearing.

Processed milk, captively consumed or sent to job workers in the continuous manufacture of sugar-boiled confectionery - exempted final product for invoking Rule 6 of the CENVAT Credit Rules, 2004 - Determination of Intermediate product not constituting exempted final product

HELD THAT: - Rule 6 applies where common inputs or input services are used for manufacture of dutiable and exempted final products. An intermediate product forming an integral part of the continuous manufacture of a dutiable final product cannot be treated as an exempted final product merely because it is captively consumed or sent to job workers for further manufacture.

Processed milk was not manufactured or cleared as an independent final product; its use in the integrated manufacture of sugar-boiled confectionery retained its character as an intermediate product.

In Collector of Central Excise Vs Eastend Paper Industries Ltd. [1989 (8) TMI 81 - SUPREME COURT] the Hon’ble Supreme Court held that where a process is so integrally connected with the ultimate production of goods that, but for such process, manufacture would be commercially inexpedient, articles required in that process fall within the expression “in the manufacture of goods”. The ratio supports consideration of the manufacturing operation as an integrated whole.[Paras 7, 9, 10, 11]

Processed milk could not be regarded as an exempted final product for invoking Rule 6; the demand founded on the contrary premise was unsustainable.

Final Conclusion: The impugned order was set aside with consequential relief, since processed milk used in the integrated manufacture of sugar-boiled confectionery was not an exempted final product attracting Rule 6 of the CENVAT Credit Rules, 2004.

Clandestine manufacture and removal of Pan Masala and Scented Chewing Tobacco - burden of proof - Third-party private records - corroborative evidentiary value - Presumptive demand based on market practice Estimated laminate consumption and presumed tobacco production

Sustainability of the excise-duty and NCCD demand for alleged clandestine manufacture and clearance of Pan Masala and Scented Chewing Tobacco, founded on a third-party transport file, estimated laminate consumption and an assumed market practice of equal sale of tobacco pouches - HELD THAT: - Clandestine manufacture and removal must be established by cogent, positive and corroborative evidence proving the connected links of procurement, manufacture, receipt and consumption of inputs, clearance, buyers and consideration; suspicion, private third-party records and successive presumptions cannot substitute proof. File No.17 was neither recovered from nor maintained by the respondent, and its authorship, authenticity, lawful custody and connection with the respondent were not established. The Department also failed to prove delivery and receipt of the alleged laminates, their consumption in manufacture, or clandestine clearance of finished goods. The averaging method used to derive laminate weight from boxes was unsupported by proof that the sampled consignments were comparable.

Further, manufacture and clearance of Scented Chewing Tobacco could not be presumed merely from an alleged market practice of its sale with Pan Masala, absent independent evidence of its inputs, manufacture or clearance. [Paras 19, 20, 21, 23, 24]

The Department failed to discharge its burden of proving clandestine manufacture and removal; the demand relating to both Pan Masala and Scented Chewing Tobacco could not be sustained.

Final Conclusion: The Revenue's appeal was dismissed, and the orders dropping the proceedings were upheld.

Interest on refund of investigation deposits - Inapplicability of statutory delayed-refund interest to investigation deposits

Entitlement to interest on amounts deposited during investigation after the MODVAT credit demand - HELD THAT: - Once the demand was set aside and the appellant's entitlement to MODVAT credit stood accepted, the amounts collected during investigation ceased to bear the character of excise duty and remained deposits over which the Revenue had no legal claim.

The filing of a refund application could not alter that character so as to attract the three-month limitation for interest under Section 11BB. The absence of a specific statutory provision governing interest on such deposits could not justify denial of interest; the authorities cited were held applicable. [Paras 13, 14, 15]

The denial of interest was set aside, and interest at 12% per annum was directed to be paid from the respective dates of deposit until the date of refund, within eight weeks.

Final Conclusion: The appeal was allowed and the impugned order was set aside. Interest at 12% per annum was directed on the investigation deposits from the dates of deposit until refund.

Period of limitation for CENVAT credit recovery - Recovery of CENVAT credit availed on returned bulk cement - invocation of the extended period in the absence of fraud, collusion, wilful misstatement or suppression with intent to evade duty

HELD THAT: - The appellant's removal of cement in bulkers and receipt of left-over cement in the factory were within the department's knowledge, and permission had been issued for availment of credit on the quantity so received. No evidence established fraud or other statutory ingredients warranting the extended limitation period. The demand, raised beyond the normal period of one year, was therefore time-barred. [Paras 5]

The confirmed CENVAT credit demand, interest and penalty were unsustainable on limitation; the impugned order was set aside and the appeal allowed.

Final Conclusion: The appeal was allowed solely on limitation, as the extended period for recovery of CENVAT credit could not be invoked.

Transaction value - sales tax subsidy under Rajasthan Investment Promotion Scheme, 2010 - Excise valuation of sales tax subsidy - Additional consideration

Whether the demand of excise duty on the amount of sales tax subsidy received from the State Government of Rajasthan under Rajasthan Industrial Promotion Scheme, 2010 is includible in the assessable value of the goods cleared during the relevant period or not? - HELD THAT: - We find that the issue has been dealt with by this Tribunal in the case of Harit Polytech Pvt. Ltd. [2023 (7) TMI 1547 - CESTAT, DELHI] wherein this Tribunal has held that the amount of subsidy under the promotion policy is not an additional consideration.

The entire VAT/CST collected from customers was paid to the State exchequer, while the subsidy was granted through VAT challans for discharge of subsequent tax liability. Such subsidy neither reduced the selling price nor constituted additional consideration; payment through the challans was actual payment of VAT/CST and could not be included in transaction value. [Paras 6, 7]

The sales tax subsidy was held not includible in assessable value; consequently, no excise duty or penalty was payable.

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

CENVAT credit on concessional countervailing duty - Equivalence of exempted additional customs duty to excise duty

Entitlement to CENVAT credit of concessional countervailing duty paid on imported coal under Notification No. 12/2012-Cus - HELD THAT: - The reduced CVD rate prescribed under the Customs notification issued in exercise of the exemption power was required to be treated as equivalent to the excise duty payable for purposes of the additional-duty levy. Consequently, CVD paid at the concessional rate remained additional duty covered by Rule 3(1)(vii) of the Cenvat Credit Rules. The restriction attached to Notification No. 12/2012-C.E. had no application to credit of CVD paid under the distinct Customs notification. [Paras 8, 9]

The assessee was entitled to CENVAT credit of the concessional CVD paid on imported coal.

Final Conclusion: The substantial questions were answered in favour of the assessee and against the Revenue. The appeal was dismissed.

Inter-State sale occasioning movement under section 3(a) of the CST Act - branch transfer (stock transfer) as not amounting to inter-State sale - burden of proof under section 6A of the CST Act - Time Bound Supply Scheme (TBS) as scheme/framework vis-a-vis offer/contract - inextricable link between contract of sale and movement of goods - binding effect of findings of the Central Sales Tax Appellate Authority on remand

HELD THAT:- We are not inclined to interfere with the impugned judgment and order passed by the Custom Excise Service Tax Appellate Tribunal [2025 (9) TMI 1600 - CESTAT NEW DELHI]

The Special Leave Petitions are dismissed

Composition scheme eligibility based on determined turnover - Procedural delay and substantive statutory benefit - Belated revised returns and compounding benefit

Entitlement of a dealer to the concessional composition rate where the turnover finally determined by the Assessing Authority was below the statutory eligibility limit, notwithstanding belated revised returns - HELD THAT: - Having redetermined the total and taxable turnover below the prescribed limit, the Assessing Authority could not simultaneously deny composition and levy tax at the rate applicable to non-composition dealers. The premise for disqualification, namely turnover exceeding the eligibility limit, ceased upon the Authority's own final determination.

Procedural delay in revising returns under Rule 7(9) could not override the substantive statutory benefit when the department-determined turnover remained within the composition limit and the differential tax with interest had been paid. [Paras 6, 7, 8, 9]

The dealer was entitled to tax under the 0.5% composition-rate framework; the Revenue could not seek remand to reopen its concluded turnover determination.

Final Conclusion: The writ appeal was dismissed and the order granting the benefit of composition taxation was affirmed. The department was left at liberty to recover any legitimate outstanding balance or statutory interest in accordance with law under the composition-rate framework.