TaxTMI Updates e-Newsletter
Sep 21,2026

Search of advocate's office under GST law - Advocate-client privilege and investigation of advocate's conduct - Disclosure of investigative material during pending investigation

Reason to believe for GST search - Search of advocate's office - Validity of the GST search of the legal services firm's premises, including the advocate's cabin and CPU, pursuant to statutory authorisation - HELD THAT: - The recorded reasons disclosed sufficient material for exercise of the search power; the requisite satisfaction was not a determination of guilt. As the cabin formed part of the authorised premises, its use by the advocate did not render its search unauthorised. A prior personal hearing was not required for seizure during a duly authorised search, and administrative instructions or procedural manuals could not override the statutory power or invalidate the search absent a demonstrated breach of a mandatory statutory requirement. [Paras 50, 51, 55, 57, 59]

The search and consequential seizure were held valid and not void ab initio.

Advocate-client privilege - Protection of third-party client data - Scope of advocate-client privilege over electronic material seized from an advocate's office where the advocate's own role is under investigation - HELD THAT: - Professional privilege attaches to the nature and circumstances of a communication and protects the client; it is not a personal immunity of the advocate from investigation into the advocate's own transactions or conduct. The material placed before the Court furnished a basis to investigate whether the advocate had acted beyond a professional role, without establishing guilt. The client's subsequent consent permitted production of its own material but could not retrospectively validate the search or permit access to unrelated clients' data. The safeguards for cloning, identification and restricted use of relevant data were therefore retained to preserve third-party confidentiality. [Paras 57, 58, 62, 63, 64]

Privilege did not bar the investigation, but the respondents were required to use only the cloned data relevant to the MTPL investigation and maintain confidentiality of unrelated client material.

Disclosure of investigative material - Entitlement of the person under investigation to obtain sealed-cover material produced before the Court during an ongoing investigation - HELD THAT: - The sealed-cover material consisted of investigative records and statements produced only to enable examination of the basis for continuing the investigation, not for adjudicating ultimate liability. Disclosure could reveal the course of investigation and statements of persons examined; consequently, the person under investigation had no unrestricted right to obtain it at that stage. The precedent invoked on sealed-cover disclosure arose in a materially different context, while the principles governing protection of case diaries supported non-disclosure. [Paras 42, 43, 44, 45, 46]

Copies of the sealed-cover investigative material were not to be furnished at that stage.

Show cause notice at investigation stage - Effect of the absence of a show cause notice to MTPL on the legality of the search and summons issued during investigation - HELD THAT: - Issuance of a show cause notice is a subsequent stage that may arise after completion of investigation and initiation of adjudicatory proceedings. Its absence during the investigation did not affect the legality of the search or summons. [Paras 47]

The absence of a show cause notice did not invalidate the search or summons.

Evolving scope of GST investigation - Whether subsequent attribution of an active role to the advocate constituted an impermissible change of stand by the investigating authorities? - HELD THAT: - An investigation is not static, and further material may warrant examination of the role of persons who subsequently emerge as connected with the transactions under investigation. The earlier description of another person as handling operations or finances did not exclude the advocate's possible active or consequential role. [Paras 48, 49]

The subsequent attribution of a role to the advocate was not held to be a change of stand.

Final Conclusion: The writ petition was dismissed. The respondents may continue the investigation in accordance with law, subject to the continuing safeguards restricting use of the cloned electronic data to material relevant to the MTPL investigation and preserving confidentiality of unrelated clients.

Refund of tax paid on licence fees and conservancy charges by airport duty-free outlet

Processing of refund claim for tax paid on licence fees and conservancy charges - Processing of the refund claim for tax paid on licence fees and conservancy charges by an airport duty-free outlet. - HELD THAT: - The Division Bench FLEMINGO DUTY FREE SHOP PRIVATE LIMITED [2025 (5) TMI 467 - MADRAS HIGH COURT] had, in substantially similar circumstances, declined to interfere with a direction to process the refund application. Since the respondent concurred that the circumstances were substantially similar, the Court followed that decision. [Paras 4, 5]

The impugned refund-rejection orders were set aside, and the refund claim was directed to be processed with applicable interest within eight weeks.

Final Conclusion: The writ petitions were disposed of by setting aside the impugned orders and directing processing of the refund claim with applicable interest.

Parallel Central and State GST proceedings - identity of subject matter - Writ jurisdiction in GST adjudication disputes involving disputed records and statutory appeal

Bar on proceedings on same subject matter - Fraudulent availment of input tax credit - Bar under Section 6(2)(b) of the CGST Act against Central proceedings for alleged fraudulent availment of input tax credit following earlier State proceedings - HELD THAT: - The expression "same subject matter" requires identity of the liability or contravention sought to be adjudicated; commonality of assessee, tax period, tax liability or factual background is insufficient. Though both sets of proceedings concerned input tax credit claimed from an entity described as M.R. Enterprises, the Central proceedings were founded on allegations of fraudulent credit availed on invoices unaccompanied by actual supply of goods. The petitioner failed to establish that this very contravention had already been adjudicated in the State proceedings.

The judgment of the Supreme Court in Armour Security[2025 (8) TMI 991 - SUPREME COURT] furnishes the controlling principle. The statutory bar operates where the proceedings concern the same subject matter. Where the proceedings arise out of distinct infractions or liabilities, the mere existence of some common factual or transactional background would not attract the bar.[Paras 29, 30, 31, 32, 42]

The statutory bar was not attracted on the material before the Court, and the Central proceedings were not liable to be interdicted in writ jurisdiction.

Exercise of writ jurisdiction - Statutory appellate remedy - Exercise of writ jurisdiction against orders under Section 74 of the CGST Act raising record-based objections despite an available statutory appeal - HELD THAT: - The objections regarding consideration of the reply and supporting documents, supply of relied-upon material, genuineness of transactions, actual receipt of goods, fraud or suppression, and alleged duplication of liability required examination of the show cause notices, documentary material and adjudication record. Availability of an appellate remedy does not by itself bar writ jurisdiction, but the High Court ordinarily does not substitute the statutory appellate mechanism where disputed factual matters require such examination and no exceptional circumstance is established. [Paras 38, 39, 40, 41, 43]

No exceptional circumstance for writ interference was made out; the remaining contentions were left open for determination in statutory appeals.

Final Conclusion: The writ petition was dismissed, as the bar under Section 6(2)(b) was not established and the remaining challenges required statutory appellate examination. All unadjudicated merits and record-based contentions were left open in appeal.

Writ jurisdiction - efficacious statutory appellate remedy - Jurisdictional objection requiring factual examination -

Maintainability of the writ petition challenging an Order-in-Original where a statutory appellate remedy is available, notwithstanding a jurisdictional objection based on alleged parallel GST proceedings - HELD THAT: - Upon passing of the Order-in-Original, the statutory scheme afforded an appellate remedy. The objection that the Central and State proceedings concerned the same subject matter required examination of their respective scope, allegations, transactions, liabilities and factual foundations. Such examination, including the challenge to the demand and evidentiary findings, was held more appropriately examinable by the appellate authority; no opinion was expressed on the merits of the jurisdictional objection. [Paras 23, 24, 25, 32, 34]

The writ petition was not entertained and the petitioner was relegated to the statutory appellate remedy, with all contentions left open.

Final Conclusion: The writ petition was dismissed in view of the available statutory appeal. All objections, including the alleged bar against parallel proceedings and the merits of the demand, were left open for appellate consideration.

Alternative statutory remedy and writ jurisdiction in GST adjudication

Exercise of writ jurisdiction against a GST Order-in-Original where a statutory appeal is available - HELD THAT: - The availability of an efficacious statutory appeal is a material consideration in exercising discretionary jurisdiction under Article 226. Once the pending show-cause proceedings culminated in an Order-in-Original, the challenges concerning alleged overlapping State and Central ITC proceedings, factual and evidentiary material, and the multi-year notice were matters appropriately examinable by the appellate authority. Neither the statutory pre-deposit requirement nor the fact that the writ petition was instituted while the notice was pending justified bypassing that remedy. No patent jurisdictional infirmity was shown, and all permissible grounds were left open for appellate consideration. [Paras 47, 48, 49, 50, 51]

The writ petition was dismissed, with liberty to pursue the statutory appeal against the Order-in-Original.

Final Conclusion: The writ petition was dismissed, leaving the petitioner to pursue the statutory appellate remedy. Any appeal is to be decided independently on its merits in accordance with law.

GST reimbursement for post-GST works contracts - Applicability of contractual tax-transition notification

HELD THAT: - As per the notification dated August 16, 2017, the question of revision of any contractual values of the contract due to impact of change of tax rate with regard to VAT/Service Tax to GST does not arise at all.

Paragraph 3(iv) of the notification was confined to pre-GST contracts and could not be invoked to deny reimbursement for contracts executed after July 1, 2017. Paragraph 4 governed post-GST contracts and ongoing projects where estimates had been approved before that date, requiring application of GST rates. The authority had misconstrued the notification; however, the Court did not adjudicate the merits of the reimbursement claim. [Paras 8, 9]

The matter was remitted without adjudicating entitlement, for reconsideration of GST reimbursement in the light of paragraph 4 of the notification, after personal hearing and by a reasoned order.

Final Conclusion: The writ petition was disposed of with a direction to revisit the GST reimbursement claim in accordance with paragraph 4 of the notification and to pass a reasoned order after hearing the petitioner. Coercive action was restrained pending that decision.

GST tax demand order - denial of opportunity of hearing - Audi Alteram Partem

HELD THAT: - The Court held that, absent a constitutional challenge to the statutory minimum penalty, interference could not be founded on the asserted disproportionality of penalty. However, the order had been issued without hearing the petitioner and the alleged breach appeared prima facie to be minor; consequently, reconsideration after a reasonable opportunity was warranted. [Paras 4]

The impugned order was set aside and remanded for fresh consideration on merits, subject to remittance of the tax demand within the stipulated period; the related bank attachment was directed to be raised upon fulfilment of that condition.

Final Conclusion: The writ petition was disposed of by conditional remand for fresh adjudication after affording the petitioner a reasonable opportunity of hearing.

Grant of regular bail to the applicant who has been arrested alleging fraudulent availment and transfer of input tax credit through bogus/non-existent firms

HELD THAT:- Considering the facts and circumstances of the case, nature of the allegations, the fact that the applicant is in jail since 23.06.2026 and that the investigation has culminated in filing of the charge-sheet, coupled with the fact that the Hon’ble Supreme Court has granted bail in similar matters and a co-ordinate Bench of this Court has also granted bail to an accused in [2026 (9) TMI 1275 - CHHATTISGARH HIGH COURT] we are inclined to grant regular bail to the applicant.

Accordingly, the bail application is allowed, subject to furnishing bond and surety.

GST registration cancellation - grounds beyond show-cause notice - repeated show-cause notice and retrospective cancellation of GST registration - Non-application of mind -

Validity of Cancellation of GST registration for alleged fraudulent availment and passing of input tax credit without that ground having been put to the petitioner in the show-cause notice, after earlier cancellation proceedings on identical allegations had been dropped - HELD THAT: - The cancellation order relied upon alleged fraudulent availment and passing of ineligible input tax credit, although the petitioner had never been called upon to explain that allegation. Further, the subsequent notice repeated the same basis on which the earlier cancellation proceedings had been dropped by the same officer. The impugned notice and order therefore suffered from non-application of mind. [Paras 5]

The impugned notice and cancellation order were quashed. The authorities were left at liberty to issue a fresh show-cause notice and proceed in accordance with law after affording an opportunity of hearing; the merits were left open.

Final Conclusion: The writ petition was allowed and the cancellation of GST registration was quashed, without adjudication on merits and subject to liberty to initiate fresh proceedings in accordance with law.

Partial rejection of refund claim - Opportunity of hearing - Reasoned order - validity of partial rejection of the refund claim for accumulated unutilised input tax credit without affording a hearing or assigning reasons

HELD THAT: - The respondent authority neither afforded the petitioner an opportunity of hearing nor assigned reasons for rejecting part of the refund claim. Such rejection could not be sustained for breach of the principles of natural justice and absence of a reasoned decision. [Paras 5]

The impugned refund sanction/rejection orders were quashed to the extent challenged and the matter was remanded for issuance of show-cause notice and a fresh detailed reasoned order after considering the petitioner's reply, within twelve weeks.

Final Conclusion: The writ petition succeeded on the ground that the partial rejection of the refund claim was made without hearing and without reasons. The matter was remanded for fresh adjudication in accordance with the principles of natural justice.

Mandatory authentication of GST adjudication orders - validity of Unsigned GST adjudication order - Electronic signature of statutory orders

Validity of an unsigned detailed GST adjudication order where the accompanying DRC-07 was digitally signed - HELD THAT: - As held by the Rajasthan High Court in Mayur Timber [2026 (9) TMI 156 - RAJASTHAN HIGH COURT] the primary function of the signature is to fix authorship and consequently accountability. Put differently, in the absence of a signature, whether physical or electronic, it becomes possible for the proper officer concerned to disown the order.

Rule 26(3) requires orders to be issued electronically with a digital signature, e-signature or other notified mode of verification. A signature fixes authorship and accountability; consequently, an unsigned detailed order cannot be regarded as being in substance and effect in conformity with the statute so as to attract the curative protection for defects. The digital signature on DRC-07 did not cure the defect in the detailed order. [Paras 6, 7]

The impugned order was set aside, with liberty to issue a fresh order in compliance with the statute after providing reasonable opportunity.

Final Conclusion: The impugned unsigned detailed adjudication order was set aside, subject to liberty to issue a fresh order in accordance with the statute after granting reasonable opportunity.

Reimbursement of differential GST under works contracts - Blanket judicial directions contrary to taxing statutes

Validity of blanket directions requiring employers to bear differential GST liability under works contracts without reference to the individual contractual terms and statutory limitations - HELD THAT: - The Court held that claims arising from works contracts could not be disposed of through blanket directions, since the contracts involved different parties and varying terms and conditions. Tax authorities could not be directed to act contrary to the applicable statutory provisions; the directions issued by following the earlier decision [2023 (6) TMI 93 - KARNATAKA HIGH COURT] disregarded the facts of the present case. [Paras 9, 11]

The appeal was allowed and the impugned order was set aside.

Final Conclusion: The impugned order, founded on blanket directions for reimbursement of differential GST without examining the contractual terms or statutory constraints, was set aside.

Effective opportunity to respond in GST adjudication - Validity of GST adjudication concluded without affording an effective opportunity to respond after cancellation of registration - HELD THAT: - Having regard to the cancellation of the petitioner's GST registration, the communication of the changed address to the authorities, and the assertion of voluntary reversal of the excess input tax credit claim before initiation of proceedings, the Court held that the petitioner must be afforded an opportunity to answer the show cause notice. It left open the merits, including whether the proceedings could continue under section 74 or culminate under section 73 of the Act. [Paras 5]

The Order-in-Original was quashed and the proceedings were restored for reconsideration, with liberty to file a detailed response and raise objections to continuation of the proceedings.

Final Conclusion: The petition was allowed in part by restoring the adjudication proceedings for fresh consideration after affording the petitioner an opportunity to respond; all merits were left open.

GST offences - proceedings under the Bharatiya Nyaya Sanhita, 2023, for alleged GST-related tax fraud - special statute prevails over general criminal law

Maintainability of BNS prosecution for alleged GST defaults already subjected to proceedings under the CGST Act, 2017 - HELD THAT: - The Court found that the allegations arose from non-response and non-payment of Central and State GST, for which proceedings had already been initiated under the special enactment.

Applying the principle under sections 4 and 5 of the BNSS that offences under a special enactment are to be investigated and dealt with in the manner prescribed by that enactment, the Court held that recourse to the general criminal law was impermissible.

It is not disputed by either of the parties that the epigenis of the matter arising out of non-responding and not paying the tax under the Central GST or State GST and as such proceedings have already been initiated against the tax payer/applicant under the Special Act i.e. CGST Act, 2017 in consonance with the sections 4 and 5 of the BNSS which prohibits investigation and recognize that offence under special enactment are to be investigated and dealt with in the manner prescribed by those enactments qua the special statute and the same law has been enunciated in catena of judgments rendered by Hon'ble Apex Court which is squarely covering the field of the case of the applicant specifically discussed in case of Sharat Babu Digumarti [2016 (12) TMI 1821 - SUPREME COURT]. [Paras 18, 19]

The charge-sheet, cognizance order and the BNS proceedings were set aside qua the applicant.

Final Conclusion: The application was allowed and the impugned BNS proceedings, including the charge-sheet and cognizance order, were set aside qua the applicant.

Exhaustion of alternative statutory remedy - Statutory appellate remedy against GST assessment and rectification orders -

Maintainability of the writ petition challenging the GST demand and rejection of rectification application without exhausting the statutory appellate remedy - HELD THAT: - Since an appeal was available under the GST appellate mechanism, the Court declined to directly entertain the writ petition in the absence of exhaustion of that alternative remedy. [Paras 6, 7, 8]

The writ petition was dismissed with liberty to file a statutory appeal within 30 days, which shall be entertained without limitation objection and decided on merits; all contentions were left open.

Final Conclusion: The writ petition was disposed of on the ground of availability of an alternative statutory appeal, with consequential protection regarding limitation if the appeal is filed within the stipulated period.

Exemption u/s 11 - delayed electronic filing of Form 10B - Form 10B was electronically filed after processing of the return under Section 143(1), although it was filed during the appellate proceedings

HELD THAT: - The Tribunal applied the position that delayed electronic filing of Form 10B by a public charitable trust is to be condoned where the audit report is furnished during the pendency of appellate proceedings.

INDIAN MEDICAL ASSOCIATION PUNE BRANCH VERSUS DCIT, EXEMPTION CIRCLE, PUNE [2025 (7) TMI 1965 - ITAT PUNE] where the Tribunal relied on the decision of Laxmanarayan Dev Shrishan Seva Khendra [2024 (10) TMI 99 - GUJARAT HIGH COURT] and allowed the assessee’s claim of exemption u/s. 11. The Hon’ble High Court while holding so, has also distinguished the decision of Wipro Ltd. [2022 (7) TMI 560 - SUPREME COURT] which has been relied by the Ld.ADDL/JCIT(A) in his impugned order to dismiss the appeal of the assessee.

ADDL/JCIT(A) erred in dismissing the assessee’s appeal denying its claim of exemption u/s. 11 of the Act on the ground of delay in filing of Form-10B.[Paras 7]

Final Conclusion: The appeal was partly allowed, with a direction to allow exemption under section 11. The alternate grounds concerning taxation of net income rather than gross receipts were left unadjudicated as academic.

Deductibility of Employee Stock Option Scheme expenditure - Valuation report by Chartered Accountant u/s 56(2)(viib)

Deductibility of expenditure claimed in respect of the Employee Stock Option Scheme - HELD THAT: - Following its earlier decision of LEMON TREE HOTELS LTD [2015 (11) TMI 404 - DELHI HIGH COURT] holding that the cost of an Employee Stock Option Scheme could be debited to the profit and loss account, the Court accepted that the issue stood settled in favour of the assessee. [Paras 4]

The disallowance of the Employee Stock Option Scheme expenditure was not sustained and the question was answered in favour of the assessee.

Valuation report by Chartered Accountant under section 56(2)(viib) - Validity of the valuation report furnished by a Chartered Accountant for the addition under section 56(2)(viib) - HELD THAT: - The restriction confining eligibility to issue a valuation report to a Merchant Banker was introduced only for the subsequent financial year. Since the year in question preceded that change, the Assessing Officer could not discard the valuation undertaken by the Chartered Accountant. [Paras 6, 7, 8]

The deletion of the addition was upheld and the question was answered against the Revenue.

Final Conclusion: The appeal was rejected, the claimed Employee Stock Option Scheme expenditure having been held allowable and the valuation report of the Chartered Accountant having been held valid for the relevant year.

Applicability of specific CBDT circular to co-operative societies claiming deduction u/s 80P - Genuine hardship in condonation of delayed return

Applicability of CBDT Circular No. 13/2023 to a co-operative society's delayed return claiming deduction u/s 80P, in preference to the general Circular No. 09/2015 - HELD THAT: - CBDT Circular No. 13/2023 specifically governs applications by co-operative societies for condonation of delay in furnishing returns claiming deduction under section 80P for the covered assessment years. Circular No. 09/2015, on the other hand, concerns delayed returns claiming refund or carry-forward and set-off of losses. The specific circular therefore excluded the applicability of the general circular. The rejection of the application by relying on Circular No. 09/2015, without even referring to Circular No. 13/2023 on which the application was founded, disclosed non-application of mind. [Paras 10, 11, 12]

The rejection founded on Circular No. 09/2015 without consideration of Circular No. 13/2023 was unsustainable.

Genuine hardship in condonation of delayed return - Condonation of a 34-day delay in a co-operative society's return claiming deduction under section 80P on account of COVID-19-related delay in statutory audit - HELD THAT: - The delay occurred amid COVID-19 restrictions and was attributable to the delayed receipt of audit reports required to be routed through the State Audit Department. These circumstances were beyond the petitioner's control and brought the case within clauses 6(i) and 6(ii) of Circular No. 13/2023, constituting genuine hardship. Authorities applying CBDT circulars issued to alleviate genuine hardship under section 119(2)(b) must adopt a liberal approach and not reject such a claim on a hyper-technical view. [Paras 15, 17]

The delay was condoned and the respondents were directed to consider the petitioner's claim for deduction under section 80P in accordance with law.

Final Conclusion: The petition was allowed; the impugned order was set aside, the 34-day delay in filing the return was condoned, and the claim for deduction under section 80P was directed to be considered in accordance with law.

Validity of order passed u/s 148A(d) and notice u/s 148 - illegal sanction/approval u/s 151

The Hon'ble Supreme Court of India was pleased to dispose of a large batch of reassessment matters in terms of judgment titled as Income Tax Officer Vs. Tej Partap Singh [2026 (5) TMI 54 - SC ORDER (LB)] by setting aside the High Court judgments on a limited ground arising from the subsequent statutory amendment and remitting the matters to the respective High Courts for fresh consideration.

The earlier judgment was recalled and the writ petition was closed with liberty to institute a fresh petition on the same cause of action, including a challenge to Section 147A, while the existing protection was continued for 90 days.

Reassessment proceedings - fresh challenge to amended reassessment provision

HELD THAT: - The Supreme Court in TEJ PARTAP SINGH [2026 (5) TMI 54 - SC ORDER (LB) ]had set aside the High Court judgments on the limited ground that the statutory amendment altered the foundation of the view concerning the competence of jurisdictional assessing officers, and remitted the matters for fresh consideration while permitting assessees to challenge Section 147A. Applying that course, the Court recalled its earlier judgment, revived the writ petition and closed it with liberty to the petitioner to institute fresh proceedings on the same cause of action, including a challenge to Section 147A and consequential reliefs. [Paras 1, 6, 7]

The existing protection was continued for 90 days, subject to its cessation if the petitioner did not approach the Court within that period.

Final Conclusion: The earlier disposal was recalled and the writ petition was closed with liberty to pursue a fresh challenge in light of subsequent developments. The interim protection was retained for the stipulated period.

Reassessment notice - liberty to pursue fresh writ challenge following subsequent legal developments

HELD THAT: - The Court noted that the Supreme Court had set aside High Court judgments in [2026 (5) TMI 54 - SC ORDER (LB)]quashing reassessment notices on the ground of the initiating authority's lack of competence, in view of the altered legislative position, and had remitted the matters for fresh consideration while preserving liberty to challenge the newly introduced provision.

Since the earlier writ petition had been disposed of awaiting that decision, its earlier judgment was recalled and the petitioner was left free to pursue a fresh challenge instead of an adjudication on merits in the present petition. [Paras 6, 7]

The writ petition was closed with liberty to approach the Court afresh on the same cause of action, including a challenge to Section 147-A and consequential reliefs; the earlier protection was continued for 90 days, subject to its lapse if no fresh petition was filed within that period.

Final Conclusion: The earlier judgment was recalled, and the writ petition was closed with liberty to institute a fresh petition in light of the subsequent legal developments. Interim protection was continued for the stipulated period, subject to timely recourse.

Unexplained investments u/s 69 - investments, loans and advances disclosed in books - Substantial question of law - interference with factual findings

Applicability of the deeming provision for unexplained investments to investments, loans and advances disclosed in the books and carried forward from an earlier assessment year - ITAT deleted addition - HELD THAT: - Section 69 applies only where the assessee offers no explanation of the nature and source of investments or the explanation is unsatisfactory. The Tribunal, upon examination of the bank accounts and audited balance-sheets, found that the investments, loans and advances were explained, disclosed in the books and brought forward from the preceding assessment year. As the Tribunal's factual findings, made as the final fact-finding authority, disclosed no perversity or illegality, the provisions governing taxation of unexplained investments were inapplicable. [Paras 12, 13]

The Tribunal's deletion of the additions was sustained, as no substantial question of law arose.

Final Conclusion: The Revenue's appeal was dismissed for want of any substantial question of law, the Tribunal's factual findings being free from perversity or illegality.

Reassessment after scrutiny of permanent establishment - Extended reassessment limitation - failure to disclose material facts

Reopening of assessment on the existence of a permanent establishment after scrutiny inquiry into the same issue - HELD THAT: - The advance ruling [2020 (2) TMI 1482 - AUTHORITY FOR ADVANCE RULINGS—MUMBAI (INCOME-TAX)] had treated the subscription receipts as business income and required inquiry into the existence of a permanent establishment. During the original scrutiny, pointed queries on that question were raised and answered. The Court held that the inquiry showed that the issue had been examined and that, even if the assessment order did not expressly record a finding, reassessment could not be invoked to cure the Assessing Officer's own failure to record it, as that would undermine certainty and finality in assessment. [Paras 16, 18, 19, 20]

The reassessment notice was beyond the scope of reassessment jurisdiction; the question of existence of a permanent establishment was left open for any subsequent year.

Extended limitation for reassessment - Failure to disclose material facts - Invocation of extended reassessment limitation despite disclosure of the subscription arrangement and the agent relationship during scrutiny assessment - HELD THAT: - Reopening beyond four years following a scrutiny assessment required failure by the assessee to make a full and true disclosure of material facts. The nature of the subscriptions and the existence of the agent had been disclosed and considered in the original assessment; hence the jurisdictional fact necessary for invocation of the extended period was absent. The notice was also issued after expiry of the statutory six-year period. [Paras 21, 22, 23]

The extended period was unavailable, and the notice was independently barred by limitation.

Final Conclusion: The writ petition was allowed and the reassessment notice was quashed on jurisdictional grounds, without any determination on the existence of the petitioner's permanent establishment in India.

Reassessment proceedings - Non consideration of assessee's reply - Principles of natural justice denied

Validity of reassessment initiation where the AO curtailed the time available for filing a reply and failed to consider the reply uploaded before passing the order - HELD THAT: - Although the statute allowed the assessee 30 days to respond, the AO restricted the effective period to a substantially shorter duration despite the request for further time. As the reply had been uploaded before the order was passed and there was sufficient time available to consider it, its non-consideration caused serious prejudice and violated the principles of natural justice. [Paras 9, 10, 11, 12, 13]

The order u/s 148A(d) and the consequential notice were set aside, and the Assessing Officer was directed to pass a fresh order after considering the reply, without being influenced by the earlier order; the merits and jurisdiction to initiate proceedings were left open.

Final Conclusion: The writ petition was allowed and the reassessment initiation was remitted for fresh consideration in accordance with law.

Income-tax addition based on uncorroborated seized loose sheets - Evidentiary value of seized loose sheets

Addition based on figures scribbled in seized loose sheets relating to property acquisition, without corroborative evidence of unrecorded consideration or cash payment - HELD THAT: - The seized loose sheets did not constitute books of account, and the scribbled figures were uncorroborated by material establishing that they represented the actual consideration for purchase of the property or that any cash payment had been made.

Applying the settled legal position as per VC. SHUKLA & ORS. [1998 (3) TMI 675 - SUPREME COURT] and SUNIL KUMAR SHARMA [2024 (2) TMI 116 - KARNATAKA HIGH COURT] the Court held that such entries alone could not sustain the addition. [Paras 13, 14]

No substantial question of law arose, and the Revenue's appeal was dismissed.

Final Conclusion: The Revenue's appeal for AY 2016-17 was dismissed, as no substantial question of law arose from the Tribunal's decision rejecting an addition founded solely on uncorroborated loose sheets.

Succession of firm by company - conditions under section 47(xiii) - Assessment under section 153A - incriminating material

Succession of firm by company - conditions under section 47(xiii) - Applicability of section 47(xiii) to the succession of the firm by the assessee-company after pre-succession withdrawal of capital and alteration of partners' shares - HELD THAT: - The assets and liabilities of the firm immediately before succession became those of the assessee-company, and the partners received no consideration or benefit other than allotment of shares. There was no restriction on partners withdrawing funds before succession; consequently, transactions undertaken before succession, including sale of assets and alteration of partners' shares, did not affect the applicability of section 47(xiii). [Paras 10, 12, 13, 16]

The succession was covered by section 47(xiii) and could not be treated as a transfer so as to deny the claimed deduction.

Assessment under section 153A - incriminating material - Maintainability of assessment proceedings under section 153A where the search yielded documents concerning conversion of the firm into a company and its ordinary business activities - HELD THAT: - The Board resolutions, no-objection certificates, legal notes, valuation reports and documents concerning the firm's constitution were documents arising in the natural course of the assessee's activities and were not incriminating material. Following Principal Commissioner of Income Tax V. Abhisar Buildwell Pvt. Ltd [2023 (4) TMI 1056 - SUPREME COURT] the absence of incriminating material rendered the proceedings under section 153A not maintainable. [Paras 14, 15, 16]

The assessment proceedings under section 153A were not maintainable for want of incriminating material.

Final Conclusion: No substantial question of law arose. The departmental appeal was dismissed.

Exemption u/s 10(23FB) - registration of venture capital fund and constituent schemes - Associated company restriction - trustee's personal and fiduciary shareholding - SEBI registration - Income-tax Department's inquiry into regulatory compliance

Exemption u/s 10(23FB) - registration of venture capital fund and constituent schemes - Entitlement of a SEBI-registered venture capital fund to exemption u/s 10(23FB) where it operates separately auditable contributory schemes - HELD THAT: - The VCF Regulations require registration of the trust proposing to carry on activity as a venture capital fund, and not separate registration of every scheme operated by that trust. For each scheme, the Fund is required only to submit its private placement memorandum to SEBI. Registration of the trust consequently entitled it to operate separate schemes. [Paras 12]

Separate SEBI registration for each contributory scheme was not required, and the first reframed question did not give rise to a substantial question of law.

Associated company restriction - trustee's personal and fiduciary shareholding - Whether shares held by trustees on behalf of the venture capital fund are includible in determining whether a venture capital undertaking is an associated company? - HELD THAT: - The associated-company definition requires examination of shares held by the trustees or settlor, individually or collectively, in their personal capacity. Shares held by a trustee in a fiduciary capacity on behalf of the Fund, pursuant to the Fund's investment in the undertaking, cannot be counted towards the prescribed 15% threshold. [Paras 13]

The investments were not rendered ineligible on the basis of the trustees' fiduciary holdings, and the second reframed question did not give rise to a substantial question of law.

SEBI registration - Income-tax Department's inquiry into regulatory compliance - Denial of exemption under section 10(23FB) on alleged breach of VCF Regulations despite a valid and uncancelled SEBI registration. - HELD THAT: - A fund operating under a registered trust deed, holding the requisite SEBI registration as a venture capital fund, satisfies the statutory definition so long as that registration has not been cancelled or withdrawn. In the absence of any allegation or action by SEBI concerning breach of the VCF Regulations, the Income-tax Department could not itself allege such breach to deny the exemption. [Paras 14]

The valid SEBI registration supported the claim for exemption, furnishing an additional basis for declining to entertain the reframed questions.

Final Conclusion: The Revenue's appeal was dismissed, as no substantial question of law arose and the assessee's claim for exemption under section 10(23FB) was sustained.

Penalty u/s 270A for under-reporting and misreporting of income - Advance Pricing Agreement - modified return - Penalty on CSR and education cess deduction claims supported by precedent

Penalty on CSR expenditure deduction u/s 80G - Binding decisions of the Tribunal - HELD THAT: - The addition on this count had been deleted by the Tribunal. Independently, initiation or levy of penalty contrary to binding decisions of the Tribunal was held to be without jurisdiction. [Paras 15]

The penalty referable to the CSR deduction was held unsustainable.

Penalty on education cess deduction claim - Retrospective amendment and penalty - HELD THAT: - Disallowance of Education Cess is concerned, the aforesaid claim was made in the Return of Income filed on 13th February 2021 based on the decision of this Court in Sesa Goa Ltd. [2020 (3) TMI 347 - BOMBAY HIGH COURT] which is dated 28th February 2020. Merely because the claim was given up on account of the subsequent retrospective amendment would not attract penal consequences. Both, the retrospective amendment, as well as the reversal of this Court’s decision based on the retrospective amendment, were subsequent to the furnishing of the Return of Income by the Petitioner. The action of the Assessing Officer in levying a penalty on this ground is contrary to the decision of this Court in the case of GM Modular (P.) Ltd. [2026 (4) TMI 275 - BOMBAY HIGH COURT] and, therefore, cannot be sustained. [Paras 16]

The penalty on the education cess disallowance was held unsustainable.

Penalty on Advance Pricing Agreement and modified return - Penalty for misreporting of income - Penalty for transfer pricing adjustment to royalty paid to an associated enterprise after settlement of the arm's length rate under an Advance Pricing Agreement and filing of a modified return - HELD THAT: - A modified return filed in accordance with the Advance Pricing Agreement required modification of total income in accordance with that agreement. The consequential treatment of the royalty claim eliminated under-reported income. Further, full disclosure of the royalty transaction excluded misrepresentation or suppression of facts; a reduction in the royalty rate settled under the agreement could not be treated as under-reporting or misreporting, since such a view would defeat the statutory scheme of reducing transfer-pricing litigation through an Advance Pricing Agreement. [Paras 17, 19, 21, 22, 23]

The penalty based on the transfer pricing adjustment was held unsustainable, notwithstanding the time available for passing the consequential order on the modified return.

Final Conclusion: The penalty order under section 270A, together with the consequential rectification order, was quashed.

Transfer pricing comparability - consistent-loss filter - Inclusion of Neeman Medical International (Asia) Limited as a comparable for the assessee's pharmaceutical research and development services despite its alleged consistent losses

HELD THAT: - The Tribunal had found that the company was functionally comparable and was not consistently loss-making; its exclusion had rested only on the asserted consistent losses.

Department could not demonstrate any error in that factual finding, and its contention of functional dissimilarity was not a ground on which exclusion had been sought before the Tribunal. [Paras 7, 8]

No question of law arose from the Tribunal's inclusion of the company as a comparable.

Final Conclusion: The departmental appeal was dismissed as the challenge to the inclusion of the comparable disclosed no question of law.

TP Adjustment - most appropriate method for spare replacement services - Functional analysis - captive service provider versus trader - TNMM versus resale price method

HELD THAT: - The Tribunal's finding that the assessee functioned as a service provider and custodian of spares, rather than as a trader, was based on its lack of control over resale price and customers and its limited role in supplying spares under the associated enterprise's directions. As the Revenue did not contend that this functional finding was perverse, the Court found no fault in the Tribunal's direction to determine the arm's length price under TNMM using appropriate comparables. [Paras 25, 26, 27]

No substantial question of law arose from the Tribunal's adoption of TNMM in place of RPM and its consequential remand for recomputation of the arm's length price.

Final Conclusion: Finding no perversity in the Tribunal's characterisation of the assessee as a service provider, the Court held that no substantial question of law arose and dismissed the Revenue's appeal.

Prospective operation of statutory notifications - Provisional release of imported goods

Prospective operation of statutory notifications - Provisional release of imported goods - Consideration of provisional release of imported second-hand highly specialised equipment in the light of an exemption notification amended after issuance of the Bills of Lading. - HELD THAT: - The Bills of Lading preceded the commencement of the amendment. In the absence of express retrospective operation, a statutory notification operates prospectively and could not govern imports covered by Bills of Lading issued before its commencement. The respondents could therefore not decline to consider provisional release by relying on that amendment. No distinguishing feature from the earlier common order concerning provisional release of similar goods was shown. [Paras 6, 7]

The respondents were directed to consider the request for provisional release under Section 110A of the Customs Act in accordance with law and, upon compliance with the conditions imposed, release the goods provisionally, subject to the outcome of independent adjudication proceedings.

Final Conclusion: The writ petition was disposed of with directions to consider and, subject to lawful conditions, grant provisional release of the imported goods. The adjudication proceedings were directed to be decided independently on their merits.

Petitioner has received in-principal approval and has obtained license - The writ petition was disposed of as withdrawn on the petitioner's unconditional request, having become infructuous owing to subsequent developments.

Duty drawback classification of nuts, bolts, washers, hand tools and allied goods - Finality of settled tariff classification - Chapter Headings 7318, 8205 and 3926 v/s under Chapter Heading 7308

HELD THAT: - The Court proceeded on the undisputed position that earlier decisions M/S. JBS EXPORTS & ANR. [2025 (4) TMI 382 - GUJARAT HIGH COURT], M/S. JBS EXPORTS & ANR. [2025 (9) TMI 1357 - SC ORDER] and Gargip International v/s. Union of India & Ors. [2017 (6) TMI 1414 - GUJARAT HIGH COURT ] had conclusively settled the classification controversy concerning such goods and had quashed similar show cause notices. The issue was, therefore, no longer res integra. [Paras 8]

The impugned show cause notice alleging misclassification was quashed.

Final Conclusion: The writ petition was allowed on the ground that the classification controversy stood concluded by earlier decisions, and the impugned show cause notice was quashed.

Consideration of pending Shipping Bills amendment application - Disposal of the pending application seeking amendment of Shipping Bills under the Customs Act - HELD THAT: - Without examining the maintainability or merits of the amendment application, the Court held that its continued pendency warranted a direction for consideration in accordance with law. [Paras 9]

The competent authority was directed to decide the amendment application expeditiously, preferably within four weeks.

Final Conclusion: The writ petition was disposed of with a direction to consider and decide the pending amendment application in accordance with law, without any expression on its merits.

Classification of vitamin and enzyme premixes for animal Customs Tariff Heading 2309 v/s headings 2936 and 3507

HELD THAT: - The lower authorities had not comprehensively examined the competing tariff entries and the relevant HSN Explanatory Notes.

Larger Bench of the Tribunal in the case of Tetragon Chemie (P) Ltd. [1998 (9) TMI 390 - CEGAT, NEW DELHI] have held that pre-mixes including those containing mineral substances and vitamins or pro-vitamins, trace elements, appetisers, soya flour or meal, Yeast etc. is classifiable under heading of 2309 of HSN which corresponds to heading 23.02 of CETA. The aforesaid decision of the Larger Bench of the Tribunal has also been upheld by the Hon’ble Supreme Court in its judgement in Civil Appeal filed by the department TETRAGON CHEMIE P. LTD. [2001 (7) TMI 127 - SUPREME COURT] against the decision of the Larger Bench.

We further find that in the case of Indian Trading Bureau Private Limited [2024 (2) TMI 1030 - CESTAT KOLKATA], the Co-ordinate Bench of the Tribunal have held the classification of vitamins and enzymes used as animal feed additives under CTH 2309 and not under CTH 2923.

Thus we are of the considered view that the impugned goods are classifiable under CTH 2309 of the First Schedule to the Customs Tariff Act, 1975. The impugned order in upholding the classification of imported goods under headings 29.36 and 3507 does not stand the scrutiny of law and therefore is not legally sustainable.[Paras 7, 8, 9, 10]

The impugned classification under headings 2936 and 3507 was set aside, and the imported goods were held classifiable under CTH 2309 with consequential relief.

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

Abetment of smuggling of gold and cigarettes concealed in imported heavy metal scrap - Admissibility and corroboration of statements recorded under section 108 of the Customs Act - Quantum of penalty for abetment of smuggling

Abetment of smuggling of gold and cigarettes concealed in imported heavy metal scrap - Admissibility and corroboration of statements recorded under section 108 of the Customs Act - Liability to penalty for involvement in smuggling of gold bars and cigarettes concealed in imported heavy metal scrap, based on statements, cross-examination and corroborative material - HELD THAT: - Statements recorded under section 108 of the Customs Act are admissible evidence, subject to the statutory and natural-justice requirement of affording cross-examination where such statements are proposed to be relied on. The asserted retraction was not accepted, since supporting affidavits or documents were not produced despite opportunity. The case was not founded merely on an uncorroborated co-noticee statement: consistent statements of persons involved in the import clearance, corroborated by financial transactions and an email concerning shifting of the containers, established that both appellants controlled the affairs of the importing concern. The witnesses whose cross-examination was sought reaffirmed that role. [Paras 6, 7, 8]

The finding that both appellants were involved in the smuggling operation and were liable to penalty was sustained.

Quantum of penalty for abetment of smuggling of gold and cigarettes concealed in imported heavy metal scrap - Appropriateness of the individual penalties imposed for involvement in smuggling of gold and cigarettes concealed in imported heavy metal scrap - HELD THAT: - While concurring with the finding of involvement, the Tribunal considered the penalties imposed to be excessive and held that a lenient view was warranted in the overall facts and circumstances. [Paras 8]

The penalties were reduced to Rs. 15 lakh each, and the impugned order was otherwise upheld.

Final Conclusion: The appeals were partly allowed only by reducing the penalty on each appellant; the findings establishing their involvement and penalty liability were otherwise upheld.

Tariff classification of Indian Refractory Mortar - CTH 3816 0000 as refractory mortar or under CTH 2610 as chromium ores and concentrates

HELD THAT: - The Tribunal held that the identical classification controversy stood settled by its earlier decision of Alliance International [2025 (2) TMI 1214 - CESTAT KOLKATA]. The product, being a mixture used as refractory mortar and not a mineral used in the metallurgical extraction of chromium, did not satisfy Chapter Note 2 to Chapter 26; it was consequently outside CTH 2610 and classifiable under CTH 3816 0000. [Paras 8, 9, 10]

The goods were held classifiable under CTH 3816 0000; export duty and consequential penalties were not sustainable.

Final Conclusion: The appeals were allowed and the impugned orders confirming export duty and penalties were set aside with consequential relief, if any.

Smuggling of gold as well as cigarettes - As pleaded entire case of the department is based on the statements without any corroborative evidence or any documentary proof - also statements recorded by the department of their client have been retracted

HELD THAT:- While going through various statements, we find that there is mention of certain WhatsApp massages and emails exchanged between the person who has tendered the statement and the other party who appears to be concerned in this particular case.

AR mentioned that he will procure those documents and submit before the Bench. During hearing, AR was asked whether Mr. Deepak Thakor was arrested and if any prosecution has been launched and its current status may be intimated to the bench. Both sides are given liberty to make further submissions within a period of 2 weeks from today. The order is reserved.

Oppression of a substantial shareholder in a quasi-partnership company - Pre-emptive rights under articles of association - Swiss Challenge Method for inter se share buyout

Oppression in a quasi-partnership company - Vacation of office for non-attendance at board meetings - Oppression of a substantial shareholder in a closely held family company by exclusion from management and denial of remuneration, founded on alleged competing business and non-attendance at board meetings - HELD THAT: - The settlement confined the contemplated exit to the company and expressly permitted the outgoing shareholder to carry on a competing business, subject to non-use of company data. There was no evidence of misuse of data or direct solicitation of employees. Nor was there evidence that notices of board meetings or minutes were served upon the shareholder; consequently, vacation of office for non-attendance could not be inferred. Exclusion of a founder and substantial shareholder from management and the benefits of the company's profits, without due process or justification, confirmed oppression in a family company operating as a quasi-partnership. [Paras 14, 15, 16, 17]

The finding of oppression was sustained, and the shareholder could not be treated as having vacated the office of director for non-attendance at board meetings.

Pre-emptive rights under articles of association - Swiss Challenge Method for inter se share buyout - Inter se bidding for the shareholding of the two shareholder groups through the Swiss Challenge Method despite articles providing pre-emptive rights on transfer of shares - HELD THAT: - The agreed exit and the reciprocal offer to purchase the other group's shares substantially fulfilled the object of the pre-emptive provisions. The bidding direction did not compulsorily require the majority group to sell to the minority group, but enabled either group to bid for the other. In the irretrievable breakdown of trust between equally competent family factions, statutory power to order purchase of shares in oppression proceedings permitted an independently supervised Swiss Challenge process, which was fair, transparent and reasonable. [Paras 19, 20, 21, 22, 23]

The direction for inter se bidding under the Swiss Challenge Method was upheld.

Final Conclusion: The appeal was dismissed, and the inter se share-bidding process directed for the exit of one shareholder group from the company was maintained.

Interim injunction - keeping issues open for contested hearing -Continuance of the ex parte injunction and the direction for SFIO investigation pending a contested hearing of the injunction petition

HELD THAT: - The injunction petition had not been finally heard, and the parties had been directed to exchange affidavits. Since some of the points raised by the defendants had nevertheless been decided, their continuance could cause prejudice. All contentions were therefore required to remain open for determination by the Trial Judge at the contested hearing, without appellate adjudication on their merits. [Paras 16, 17, 18]

The direction for SFIO investigation was stayed, all points were left open for the Trial Judge, and the impugned order was confined to a limited interim duration.

Final Conclusion: The appeals were disposed of by preserving all contentions for adjudication in the pending injunction petition and staying the SFIO investigation direction in the meantime.

Forfeiture of right to file reply - Opportunity to contest on merits - Restoration of an opportunity to file a reply in an insolvency petition after forfeiture of that right

HELD THAT: - The Tribunal held that, unless grave prejudice is caused to the opposing party, a party should be afforded an opportunity to contest the lis on merits. The appellant's error was confined to not filing its reply in the main petition along with its reply to the application for interim moratorium. [Paras 19, 20, 22]

The appellant was permitted one opportunity to file its reply, subject to costs and consequential directions for rejoinder and expeditious disposal of the petition.

Final Conclusion: The appeal was disposed of by granting the appellant a conditional opportunity to file its reply and directing the parties to cooperate in the early disposal of the insolvency petition.

Service of demand notice through private courier - Foreign-currency conversion for operational-debt threshold - Operational debt arising from advance payments for goods not supplied - Genuine pre-existing dispute

Service of demand notice through private courier - Procedural requirements as handmaid of justice - Validity of service of the insolvency demand notice sent by private courier to the corporate debtor's registered office - HELD THAT: - Proof of dispatch and delivery at the undisputed registered office established effective service and knowledge of the claim. The prescribed mode of service is intended to afford the corporate debtor an opportunity to pay or raise a genuine dispute; where that object is achieved, use of a private courier by a foreign operational creditor cannot defeat the proceedings on a technical ground. [Paras 35, 36, 38]

The demand notice was duly served, and the objection founded on the mode of courier service was rejected.

Foreign-currency conversion for operational-debt threshold - Statutory threshold for operational debt - Determination of the statutory threshold for a Section 9 application where advance payments were made in foreign currency and a damages component was disputed - HELD THAT: - For determining the amount claimed in Indian currency, the exchange rate prevailing on the date of the demand notice was held relevant. The disputed damages claim was not required to be treated as a crystallised operational debt, since the foreign-currency advances due, even after excluding that component, exceeded the prescribed threshold. [Paras 40, 43, 44]

The operational debt satisfied the prescribed statutory threshold notwithstanding exclusion of the disputed damages component.

Operational debt arising from advance payments for goods not supplied - Genuine pre-existing dispute - Solvency of corporate debtor - Maintainability of the Section 9 application based on advance payments for contracted chemicals not supplied, despite a dispute concerning transit damage and the corporate debtor's asserted solvency - HELD THAT: - The corporate debtor admitted receipt of the advances, non-supply of the contracted goods, and its undertaking to repay the advances, but neither furnished a repayment schedule nor made payment. Correspondence concerning transit damage and negotiations for reduced future prices did not constitute a genuine pre-existing dispute regarding the admitted liability to refund the advances; the asserted dispute was spurious and an afterthought. The Code is not a recovery mechanism for genuinely disputed debt, but the corporate debtor's asserted solvency could not independently defeat an application where the operational debt, default and absence of a genuine pre-existing dispute were established. [Paras 49, 50, 51, 52, 53]

The statutory requirements for initiation of proceedings under Section 9 were held satisfied.

Final Conclusion: The appeal was allowed and the dismissal of the Section 9 application was set aside. The Adjudicating Authority was directed to initiate the corporate insolvency resolution process, subject to the corporate debtor's liberty to pay the amount due before issuance of the initiation order.

PMLA attachment proceedings and resolution applicant eligibility - Truthfulness of resolution-plan disclosures under Regulation 39(1)(c) - Commercial wisdom of the Committee of Creditors - Treatment of a disputed secured financial creditor under a resolution plan

Resolution applicant eligibility in the face of pending PMLA proceedings - Disclosure obligations under Regulation 39(1)(c) - Effect of the successful resolution applicant's non-disclosure of pending PMLA attachment proceedings on its eligibility and on approval of the resolution plan - HELD THAT: - The Tribunal held that, although attachment of property under the PMLA is a civil action, it relates to property prima facie considered proceeds of crime and cannot be regarded as an action having merely civil consequences. Disqualification under Section 29A is attracted on the prescribed conviction, and the pendency of an inquiry, investigation or criminal proceeding does not by itself debar a prospective resolution applicant. Regulation 39(1)(c) was required to be construed harmoniously with Section 29A. In any event, the CoC was apprised of the pending proceedings, deliberated upon them, obtained an independent assessment of eligibility and thereafter approved the plan. [Paras 78, 81, 82, 95, 96]

The alleged non-disclosure did not render the successful resolution applicant ineligible or invalidate the resolution process.

Judicial review of the Committee of Creditors' commercial wisdom - Feasibility and viability of resolution plan - Scope of appellate interference with the CoC's approval of the resolution plan after deliberation on the resolution applicant's credentials and the plan's feasibility and viability - HELD THAT: - The Tribunal held that judicial review of an approved resolution plan is confined to the statutory parameters governing plan approval and appeal. Neither the Adjudicating Authority nor the Appellate Tribunal can sit in appeal over the CoC's commercial assessment or substitute its own view on the plan's feasibility, viability or implementation once the prescribed statutory requirements are satisfied. [Paras 109, 119]

No ground falling within the limited statutory scope of review was made out to interfere with the CoC's approval of the plan.

Disputed status as secured financial creditor - Conditional modification of distribution under resolution plan - Treatment of the appellant's disputed claim as a secured financial creditor under the resolution plan - HELD THAT: - The question whether the appellant was a secured financial creditor was already pending in a separate appeal and had not attained finality. The resolution plan expressly provided that, if the appellant were ultimately recognised as a secured financial creditor, the distribution would automatically be modified and the appellant would rank at par with the other secured financial creditors. [Paras 57, 116, 117]

The appellant's apprehension regarding its treatment under the plan was held to have been adequately addressed, without deciding its pending secured-creditor status.

Final Conclusion: The appeal against approval of the resolution plan was dismissed. The Tribunal found no statutory infirmity in the plan approval or in the treatment accorded to the appellant pending determination of its secured-creditor status.

Novation of personal guarantee by consent arbitral award - Financial creditor's locus after consortium debt assignment - Discharge of surety by variation of contract - Discharge of personal guarantor by third-party assumption of debt - Limitation for personal guarantor insolvency application - Extent of liability under personal guarantee

Novation of personal guarantee by consent arbitral award - Continuing guarantee - Effect of the consent arbitral award on the appellant's status as personal guarantor - HELD THAT: - The consent award merely prescribed a revised mode and schedule for payment of the existing liability. The expression "jointly and severally" did not, without cancellation of the guarantee or fresh borrowing documentation, establish that the appellant had become a co-borrower. The award preserved liability upon default, while the guarantee remained continuing and irrevocable until full repayment; no release or substituted contract by the financial creditor was proved. [Paras 28, 29, 30, 32, 33]

The arbitral award did not novate or extinguish the guarantee, and the appellant continued as personal guarantor.

Financial creditor's locus after partial debt assignment - Co-extensive liability of guarantor - Financial creditor's locus to maintain a personal-guarantor insolvency application after assignment of other consortium members' debts and sale of secured property by the assignee - HELD THAT: - The appellant failed to produce any assignment executed by the respondent financial creditor. Assignment by other consortium lenders, or sale of the appellant's secured property by their assignee, did not establish assignment of the respondent's independent debt or rights under the guarantee. Enforcement of security by another creditor does not extinguish the guarantor's co-extensive liability to a creditor whose debt remains unassigned and unpaid. [Paras 37, 38, 41, 43, 44]

The respondent retained locus to invoke the guarantee and file the application.

Discharge of surety by variation of contract - Discharge of the personal guarantor on the ground of alleged restructuring of debt by the assignee - HELD THAT: - Discharge for variation requires a variation between the principal debtor and the creditor without the surety's consent. No material established that the respondent financial creditor participated in the alleged restructuring by the assignee or altered the terms of its own contract. The guarantee also provided that variations or release of security would not affect the guarantor's liability. [Paras 46, 47, 48]

The alleged restructuring did not discharge the appellant from the guarantee.

Limitation for personal guarantor insolvency application - On-demand guarantee - Limitation for the insolvency application founded on a subsequent default under the on-demand guarantee - HELD THAT: - The subsequent default following the demand under the on-demand guarantee furnished the basis for limitation, and the application was filed within three years thereof. It was therefore unnecessary to determine limitation solely by reference to repayments made under the arbitral award or their alleged character as acknowledgment. [Paras 51, 52, 54]

The application was not barred by limitation.

Extent of liability under personal guarantee - Accounting for recoveries - Effect of the alleged contractual cap and computation dispute on admission of the personal-guarantor insolvency application - HELD THAT: - The extent of liability must be determined from the guarantee terms, which included consequential liabilities in addition to the principal loan amount. At the admission stage, a computation dispute does not invalidate the proceedings where debt and default are otherwise established. Recoveries from the corporate debtor, co-sureties, securities or other sources must, however, be given due credit in determining the amount ultimately payable. [Paras 56, 57, 58, 59]

The alleged contractual cap and unjust-enrichment objection did not warrant setting aside admission of the application.

Discharge of personal guarantor by third-party assumption of debt - Discharge of the personal guarantor on the basis of the corporate guarantor's assumption of the corporate debtor's liabilities under the MOU - HELD THAT: - Assumption of liability by a third party does not extinguish a continuing guarantee without a binding release or novation by the financial creditor. Neither an express release of the appellant nor full satisfaction of the respondent's secured debt was established. [Paras 61, 62, 63]

The MOU and payments under it did not discharge the appellant's guarantee.

Final Conclusion: The appeal was dismissed and the admission of the personal-guarantor insolvency application was upheld. The insolvency resolution process was directed to continue in accordance with law.

Security interest under the Insolvency and Bankruptcy Code - Contractual charge under lease deed - Statutory charge created by operation of law - Retrospective operation of clarificatory amendment - Secured-creditor status of development authorities

Whether the GNIDA and NOIDA Lease Deeds create, or evidence, a "security interest" within the meaning of Section 3(31) of the Code in favour of the Appellants, such that their claims fall to be classified as secured debt under Section 53(1)(b), rather than as unsecured statutory/operational dues under Section 53(1)(e)/(f) of the Code? -HELD THAT: - The mortgage clause created no present and general charge securing all dues of the lessor; its priority was confined to the lessor's share in unearned increase and was contingent upon sale or foreclosure of a mortgage, neither of which was shown. The clause permitting recovery of arrears as land revenue was only a statutory mode of recovery and not a consensual charge.

The Tribunal held that the 2026 Explanation excluding interests created merely by operation of law from the definition of security interest was clarificatory and retrospective. The coordinate-Bench decision Assets Care [2026 (7) TMI 375 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI] founded upon an express, unconditional first charge in a tripartite sub-lease deed was materially distinguishable. [Paras 61, 63, 64, 65, 66]

The authorities were not secured creditors, and the classification of their claims as unsecured statutory/operational dues under the Revised Resolution Plan was upheld; both appeals were dismissed.

Final Conclusion: The lease deeds did not secure the authorities' outstanding dues, and the statutory recovery mechanism could not confer secured-creditor status after the clarificatory amendment. The classification under the Resolution Plan was sustained and the appeals were dismissed.

Regular bail under the Prevention of Money Laundering Act - prolonged pre-trial incarceration and right to speedy trial - Parity with co-accused in grant of bail

Regular bail to accused in a money-laundering prosecution where the trial was unlikely to commence and conclude soon owing to the voluminous charge-sheet and proposed witnesses, and a co-accused had already been enlarged on bail - HELD THAT: - Having regard to the maximum sentence, the voluminous charge-sheet and the number of prosecution witnesses, the Court found that the trial would necessarily take considerable time to commence and conclude. Prolonged incarceration and the Article 21 right to a speedy trial, coupled with parity with the co-accused already granted bail, warranted release; the apprehension of absconding or re-offending was addressed by stringent conditions, including deposit of passports. [Paras 10, 11]

All the applicants were granted regular bail subject to the stipulated stringent conditions.

Final Conclusion: The bail applications were allowed. Release was made subject to conditions securing attendance at trial, non-interference with evidence and witnesses, and restrictions on travel.

Bona fide purchaser of provisionally attached property - Substitution of attached property with sale consideration

Release of the provisionally attached biomass energy power plant conveyed to the appellant pursuant to an arbitral award and court-directed execution of the sale deed, against substitution by the unpaid sale consideration held by the Court Receiver - HELD THAT: - The seller had suppressed the provisional attachment despite the public notice preceding the agreement for sale and throughout the arbitral and court proceedings. The property was ultimately conveyed through a Court Receiver after deposit of the balance consideration. In these peculiar circumstances, the appellant was held to be a bona fide purchaser, while the consideration retained by the Court Receiver remained available for attachment in substitution of the property. [Paras 11, 12, 13]

The attached property was directed to be released to the appellant, with liberty to the Enforcement Directorate to take appropriate measures to secure the sale consideration lying with the Court Receiver as substitute property.

Final Conclusion: The appeal was disposed of by releasing the property to the bona fide purchaser while preserving the Enforcement Directorate's right to attach the sale consideration retained by the Court Receiver.

Valuation of original works contracts - Service tax demand based on income-tax return mismatch - Extended period of limitation

Valuation of original works contracts - Reverse charge liability for works contract service - Taxable value of original works contract services executed under the work order - HELD THAT: - The work executed was held to be execution of original works, for which service tax was payable on 40 per cent of the total amount charged. Application of the 70 per cent valuation applicable to another category of works contract was therefore erroneous. The service provider's liability was also confined to its stipulated share under the reverse-charge arrangement. [Paras 10, 11]

The services were held taxable as execution of original works at 40 per cent of the contract value and not at 70 per cent.

Service tax demand based on income-tax return mismatch - Examination of books of account - Sustainability of the show-cause notice for alleged short-payment of works contract service tax founded solely on mismatch between the income-tax return and the ST-3 return - HELD THAT: - The show-cause notice was founded solely on information from the income-tax return, without examination of the assessee's books of account or other admissible evidence. Since the books and records maintained by the assessee had not been examined while framing the charge, the notice was held unsustainable.

Similar case laws relevant to the case are Pravesh Kumar Maurya [2024 (4) TMI 1013 - CESTAT ALLAHABAD] AND M/s D.K. Construction [2025 (5) TMI 2325 - CESTAT ALLAHABAD] [Paras 13, 16]

The show-cause notice and the demand founded upon it were held unsustainable.

Extended period of limitation - Invocation of the extended period for the alleged short-payment of works contract service tax - HELD THAT: - The Tribunal held that the extended period was not invocable and that the notice had been issued beyond the normal period of thirty months. [Paras 14]

The demand was held barred by limitation.

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

Job-work valuation of metallurgical coke - Captive consumption by principal manufacturer - Inapplicability of Rule 8 to job-worker's clearances - Valuation of BF-grade metallurgical coke manufactured on job work from coking coal supplied by the principal manufacturer and returned for its further manufacture - HELD THAT: - We find that the issue involved in this appeal has already been examined by this Tribunal in the appellant's own case for an for an earlier period, vide Final Order [2026 (8) TMI 234 - CESTAT KOLKATA] and therefore, the said issue is no longer res integra. Also see INDIAN EXTRUSIONS [2012 (5) TMI 271 - CESTAT, MUMBAI] and ROLASTAR PVT. LTD. & ANR. AND ADVANCE SURFACTANTS INDIA LTD. [2013 (1) TMI 723 - SC ORDER]

Thus, Rule 8 applies only where excisable goods are consumed by the assessee or on its behalf; consumption after return by the principal manufacturer does not meet that condition. As the job-worked coke was not covered by the sale situations under Rule 10A(i) or (ii), Rule 10A(iii) could not attract Rule 8.

The assessable value was consequently to be determined on the cost of raw materials plus conversion charges, including the job-worker's profit, in accordance with the ratio already applied in the appellant's identical earlier case. [Paras 9, 10, 14]

The differential demand under Rule 10A(iii) read with Rule 8 was unsustainable; the duty had been correctly discharged, and the impugned order was set aside.

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

Classification of synthetic SBR Latex as rubber - Specific entry and residuary classification

Synthetic rubber in latex form - Residuary entry-burden of proof - Classification of Dr. Fixit Pidicrete URP and Dr. Fixit Super Latex, being SBR Latex, as "rubber" under Entry No. 96 of Schedule II-B rather than as residuary unclassified goods. - HELD THAT: - The expression "rubber" in Entry No. 96 is unqualified and cannot be restricted to natural rubber by importing a limitation not enacted by the legislature. SBR Latex, being styrene butadiene synthetic rubber in latex form, has a direct claim to the specific entry by virtue of its nature and composition. The absence of an express exclusion of synthetic rubber, particularly when other entries use exclusionary language, was material. Resort to the residuary entry is permissible only after the Revenue establishes that the goods cannot reasonably fall within a specific entry; end use as a waterproofing, bonding or concrete additive does not alter the goods' character as synthetic rubber. [Paras 16, 17, 18, 19, 20]

SBR Latex was held covered by Entry No. 96; the Tribunal's judgment was set aside and the order of the First Appellate Authority was restored.

Final Conclusion: The revisions were allowed. The products, being synthetic styrene butadiene rubber in latex form, were held taxable under Entry No. 96 of Schedule II-B.

Revisional jurisdiction over assessments accepting Form-F declarations u/s 6A(2)

HELD THAT: - The Tribunal had, for subsequent assessment years involving the same controversy, held in the assessee's favour that the revisionary authority lacked power to revise such assessment, in light of Ashok Leyland vs. Union of India and Others [1997 (2) TMI 451 - SUPREME COURT]. As that decision had been accepted by the State and attained finality, the Court applied it to the assessment year in question. [Paras 6, 7]

The impugned revisional order was set aside.

Final Conclusion: The writ petition was allowed and the impugned revisional order for the assessment year 2001-2002 was set aside.

Dishonour of a cheque drawn on a bank that had merged with another bank - Section 138 liability where a cheque drawn on Syndicate Bank was presented after expiry of the prescribed post-merger validity period

HELD THAT: - The merger terms rendered cheques drawn on Syndicate Bank invalid after 30 June 2021. Since the cheque was presented nearly four years after that date, it was not a valid instrument when presented. Presentation within the cheque's validity period is a mandatory condition for liability under Section 138; dishonour of an invalid cheque cannot found such prosecution. [Paras 11, 12]

The proceedings under Section 138 founded on the invalid cheque were quashed, while reserving the complainant's liberty to pursue other remedies in law.

Final Conclusion: The criminal petition was allowed and the proceedings under Section 138 were quashed, with liberty to the complainant to avail of other remedies in law.