TaxTMI Updates e-Newsletter
Sep 25,2024

Advance Ruling admissibility under proviso to Section 98(2) - "pure agent" doctrine in reimbursement of electricity charges - application not maintainable where question already decided in earlier proceedings - Audit proceedings under Section 65 treated as proceedings for purposes of proviso to Section 98(2) - false declaration in Form GST ARA-01 and consequence

Advance Ruling admissibility under proviso to Section 98(2) - application not maintainable where question already decided in earlier proceedings - Audit proceedings under Section 65 treated as proceedings for purposes of proviso to Section 98(2) - false declaration in Form GST ARA-01 and consequence - Maintainability of the applicant's advance ruling application where identical question was earlier raised and decided in audit proceedings and accepted by the applicant. - HELD THAT: - The Authority examined admissibility under the first proviso to Section 98(2) and found the question raised in the application identical to matters already raised in the CGST Audit Commissionerate's proceedings. The applicant had earlier sought reconsideration but received a communication from the Deputy Director (Cost), CGST Audit Commissionerate, Dehradun stating that IIT Roorkee did not fall within the scope of "pure agent" for reimbursement of electricity charges and that certain infrastructure services were not exempt. The applicant had accepted the audit observation and voluntarily deposited the GST with interest through DRC-03 prior to filing the advance ruling application. The Authority held that an audit under Section 65 constitutes proceedings for the purpose of the proviso to Section 98(2) and that the legislative intent of the proviso is to bar admission of repeated or already-decided questions. The applicant's declaration in Form GST ARA-01 that the question was not already decided was found to be inaccurate. In view of these findings the Authority declined to admit the application and did not proceed to decide the merits. [Paras 12, 13, 14, 15, 16]

The advance ruling application is not maintainable and is rejected under the proviso to Section 98(2) without adjudicating the merits.

Final Conclusion: The Authority rejected the applicant's advance ruling application as not maintainable under Section 98(2) of the CGST Act/UK GST Act because the question raised had been earlier raised and decided in audit proceedings which the applicant had accepted.

Time-bar for issuance of order under Section 73(10) of the Central and State Goods and Services Tax Acts - jurisdictional effect of issuing assessment order after expiry of limitation - extension of limitation by notification under Section 168A of the Central and State Goods and Services Tax Acts - validity of order passed under Section 73(9) of the Central and State Goods and Services Tax Acts

Time-bar for issuance of order under Section 73(10) of the Central and State Goods and Services Tax Acts - extension of limitation by notification under Section 168A of the Central and State Goods and Services Tax Acts - validity of order passed under Section 73(9) of the Central and State Goods and Services Tax Acts - jurisdictional effect of issuing assessment order after expiry of limitation - Whether the order dated 04.05.2024 passed under Section 73(9) for the financial year 2018-19 was time barred and without jurisdiction in the absence of any notification extending the limitation under Section 168A. - HELD THAT: - The Court noted that Section 73(10) prescribes that the order must be passed within three years from the due date of filing of the annual returns for the relevant year. For the financial year 2018-19, no notification under Section 168A of either the Central Act or the State Act had been issued to extend the period for passing orders beyond 30.04.2024. As the impugned order was dated 04.05.2024, it was passed after the limitation period and in the absence of any statutory extension. The Court held that an assessment order passed beyond the prescribed period, without a valid extension by notification, is beyond jurisdiction and cannot be sustained.

Impugned order dated 04.05.2024 set aside as time barred and without jurisdiction.

Final Conclusion: The petition succeeds; the assessment order dated 04.05.2024 for financial year 2018-19 is quashed for being barred by limitation in the absence of any extension notification under Section 168A, and the writ petition is disposed of.

Input Tax Credit - Cancellation of supplier registration - Adjudication under Section 73 of the CGST Act - Right to be heard - Remand for fresh adjudication - Opportunity to file documents

Input Tax Credit - Cancellation of supplier registration - Adjudication under Section 73 of the CGST Act - Right to be heard - Whether the adjudicating authority examined the petitioner's contention that the suppliers were registered at the material time and that invoices (including tax) had been paid, before denying the claimed ITC - HELD THAT: - The Court found that the impugned order does not reflect any consideration of the petitioner's specific contention that, at the relevant time, the suppliers were registered and that the petitioner had paid the invoice amounts including GST. Because the adjudicating authority omitted to examine this pleaded defence, the impugned order could not stand. The respondents accepted, on instructions, that the order should be set aside and the matter remanded. The petitioner was granted a further opportunity to file all documents and material in support of its claim to ITC within two weeks. The adjudicating authority is directed to afford the petitioner an opportunity of being heard and to decide the matter afresh in accordance with law.

Impugned order set aside and matter remanded to the adjudicating authority for fresh consideration after permitting the petitioner to file documents and be heard.

Final Conclusion: The impugned order under Section 73 is set aside; the petitioner is allowed two weeks to file supporting documents and the matter is remanded to the adjudicating authority to decide afresh after hearing the petitioner.

Extinguishment of statutory liability on approval of resolution plan - resolution plan binding on corporate debtor and all creditors including State - non-obstante clause in insolvency law overriding other statutes - assessment for period subsequent to approval of resolution plan

Extinguishment of statutory liability on approval of resolution plan - resolution plan binding on corporate debtor and all creditors including State - non-obstante clause in insolvency law overriding other statutes - Effect of an NCLT approved resolution plan on statutory demands by the State for periods prior to approval and whether the State remains bound despite absence of specific notice. - HELD THAT: - The court applied the principle, as articulated by the Supreme Court, that upon approval of a resolution plan by the adjudicating authority the claims provided for in the resolution plan stand frozen and binding on the corporate debtor and its creditors, including Central and State Governments, and claims not part of the plan stand extinguished. Consequently, the petitioner's liabilities under the AP VAT/GST regime up to 4 September 2019 were held to be extinguished by the NCLT approved resolution plan. The High Court rejected the contention that absence of notice to the State or lack of publication in State circulating newspapers disentitled the petitioner from invoking the NCLT order; such a challenge is a ground for setting aside the insolvency order but, so long as the NCLT order remains in force, it binds the parties. The court further held that the non obstante provision in the insolvency statute operates to override inconsistent provisions of other laws, and therefore Section 88 of the GST Act or any notice formalities under it did not prevent the extinguishment effected by the approved resolution plan. [Paras 10, 11, 12, 13]

Demand cum Adjudication orders were set aside to the extent they related to liabilities extinguished by the NCLT order; liabilities of the petitioner up to 4 September 2019 stand extinguished and the State is bound by the resolution plan as long as that order subsists.

Assessment for period subsequent to approval of resolution plan - Whether the assessing authorities may proceed to quantify and assess tax liabilities for the period after 4 September 2019. - HELD THAT: - The court observed that the NCLT order did not affect liabilities arising after the date of approval of the resolution plan. The Demand cum Adjudication proceedings had covered the period 05.09.2019 to 31.03.2020, which fall outside the extinguishment effected by the resolution plan. The assessing authorities are therefore entitled to issue fresh notices and proceed to quantify taxes and other dues for the post approval period, subject to applicable law and procedure. [Paras 14]

Assessing authorities may issue fresh notices and quantify liabilities for the period 05.09.2019 to 31.03.2020 in accordance with law.

Final Conclusion: Writ petitions allowed insofar as demands relating to liabilities extinguished by the NCLT approved resolution plan (up to 4 September 2019) are set aside; the State may reassess and quantify liabilities for the subsequent period 05.09.2019 to 31.03.2020 by issuing fresh notices in accordance with law.

Show cause notice under Section 73 of the CGST Act - Consolidation of assessment years in show cause notice - Separate limitation period for each assessment year - Time-limit under Section 73(10) of the CGST Act - Quashing of consolidated notice and liberty to issue separate notices

Show cause notice under Section 73 of the CGST Act - Consolidation of assessment years in show cause notice - Separate limitation period for each assessment year - Time-limit under Section 73(10) of the CGST Act - Validity of a single consolidated show cause notice grouping tax periods 2017-18 to 2020-21 under Section 73 of the CGST Act. - HELD THAT: - The Court held that the practice of issuing one common show cause notice by grouping multiple assessment years is impermissible under Section 73 of the CGST Act. Reliance was placed on the principle that where assessments relate to different assessment years, each assessment must be treated independently; the time-limits and actions mandated by Section 73, read with Section 73(10) which prescribes the time-limit from the due date for furnishing the annual return for the relevant financial year, apply separately to each year. Applying these principles, the Court concluded that consolidating distinct assessment years into a single show cause notice contravenes the statutory scheme and established precedents and therefore rendered the consolidated notice invalid. The Court nonetheless clarified that the respondent is not precluded from issuing separate show cause notices for each assessment year in compliance with Section 73.

The consolidated show cause notice for the tax periods 2017-18 to 2020-21 was quashed; respondent may issue separate notices for each assessment year in accordance with law.

Final Conclusion: Writ petition allowed; the consolidated show cause notice dated 03.05.2024 for 2017-18 to 2020-21 is quashed, subject to the respondent's liberty to issue separate, year-wise show cause notices complying with Section 73 of the CGST Act, 2017.

Levy of compensation cess - calculation of tax under section 129(1)(a) of the KGST and CGST Act, 2017 - consideration of levy of compensation cess under the GST Compensation Act, 2017 - remand for fresh consideration - right to raise a new ground before appellate authority - quashing of appellate order

Levy of compensation cess - calculation of tax under section 129(1)(a) of the KGST and CGST Act, 2017 - consideration of levy of compensation cess under the GST Compensation Act, 2017 - right to raise a new ground before appellate authority - remand for fresh consideration - Petitioner permitted to raise for the first time before the Joint Commissioner (Appeals) the ground that compensation cess should not have been levied in the FORM GST MOV-09 order; appellate order quashed and matter remanded for fresh consideration on that ground. - HELD THAT: - The Court noted that the levy of the cess in the MOV-9 order was challenged before the JCCT (Appeals) but that the specific contention as to levy under the GST Compensation Act, 2017 was not pressed before the appellate authority. Since the ground is being raised for the first time before this Court, the Court considered it appropriate to afford the petitioner an opportunity to place that ground before the JCCT (Appeals). Consequently, the Court set aside the order dated 17.09.2021 and remanded the matter to the JCCT (Appeals) with a direction to permit the petitioner to raise the issue regarding the levy of cess, to consider that ground in accordance with law, and to pass a reasoned order. All other contentions were left open for consideration by the appellate authority. [Paras 4, 5, 6]

Order dated 17.09.2021 quashed; matter remanded to the Joint Commissioner of Commercial Taxes (Appeals) permitting the petitioner to raise and the JCCT to consider the ground regarding the levy of compensation cess and to pass an order following law.

Final Conclusion: Writ petition allowed; appellate order quashed and the matter remanded to the JCCT (Appeals) with liberty to the petitioner to raise the ground relating to levy of compensation cess and with directions to the JCCT to consider that ground afresh in accordance with law; other contentions left open.

Input tax credit reversal - rectification of return under Section 39(9) - opportunity of hearing before passing fresh order - remand for fresh consideration - inapplicability of Section 73(10) and time bar notifications to the fresh order

Input tax credit reversal - rectification of return under Section 39(9) - Whether the input tax credit incorrectly claimed in the Form GSTR-3B for 2017-18 was rectified within the time permitted under Section 39(9), and the legal consequence of such rectification for the demand made by the tax officer. - HELD THAT: - The Court found on the material placed before it that the petitioner had not utilized the input tax credit claimed in Ext. P5 and had filed Ext. P6 in August 2018 reversing the said credit before any notice was issued. Section 39(9) permits revision/rectification of a return before 30th November of the year following the financial year concerned; on the facts the petitioner's reversal fell within that permissible period. The factual conclusion that the reversal occurred before any action was taken by the department led the Court to view the petitioner as an honest taxpayer who had taken steps to rectify a bona fide mistake made shortly after introduction of GST. [Paras 4, 5]

The petitioner had reversed the wrongly claimed input tax credit within the time available under Section 39(9); this fact weighs in the petitioner's favour and vitiates the basis for the unchallenged demand as recorded earlier.

Remand for fresh consideration - opportunity of hearing before passing fresh order - Whether the extant assessment/demand (Ext. P1/Ext. P4) should be sustained or set aside and the matter remitted for fresh consideration with an opportunity to the petitioner to be heard. - HELD THAT: - Although the petitioner failed to respond to pre order notices before Ext. P4 was passed, the Court took into account the rectification by the petitioner and the circumstances surrounding the initial erroneous claim shortly after GST's introduction. The Court concluded that justice requires fresh consideration of the matter by the first respondent after affording the petitioner an opportunity of hearing. Directions were given for the petitioner to appear before the first respondent at a specified date and for fresh orders to be passed within three months from that date. [Paras 5, 7]

Ext. P1/Ext. P4 is set aside and the matter is remitted to the first respondent for fresh consideration after affording the petitioner a hearing; the petitioner is directed to appear on the fixed date and fresh orders shall be passed within three months thereafter.

Inapplicability of Section 73(10) and time bar notifications to the fresh order - Whether any fresh order to be passed pursuant to the remand would be invalid or time barred by operation of Section 73(10) or by notifications fixing a cut off for completion of assessment for 2017 18. - HELD THAT: - The Court recorded that because the petitioner failed to respond in time to notices, any fresh order issued pursuant to the directions in this judgment shall not be treated as being hit by Section 73(10) or by any notification prescribing the time for completion of assessment for 2017 18. The Court thereby insulated the departmental proceedings resulting from the remand from challenges based on those particular time bar provisions. [Paras 6]

Any fresh order issued pursuant to the remand shall not be regarded as invalid on the ground that it was not issued on or before 31.12.2023, and shall not be treated as hit by Section 73(10) or by the specified time limit notifications.

Final Conclusion: Writ petition allowed: Ext. P1/Ext. P4 set aside and the matter remitted to the first respondent for fresh consideration after affording the petitioner a hearing; petitioner to appear on the specified date and fresh orders to be passed within three months; fresh order will not be treated as invalid by reason of Section 73(10) or time bar notifications applicable to assessment year 2017 18.

Assessment orders set aside and remitted for fresh disposal - service by uploading on GST portal - remand subject to pre-deposit of tax liability - opportunity of hearing before assessing authority

Assessment orders set aside and remitted for fresh disposal - service by uploading on GST portal - opportunity of hearing before assessing authority - Impugned assessment and summary orders issued in September 2022 for July 2017 and August 2017 set aside and remitted to the jurisdictional assessing authority for fresh disposal after affording hearing to the petitioner. - HELD THAT: - The Court found merit in the petitioner's contention that registration had been cancelled on 12.12.2021 with effect from 30.11.2019 and that the petitioner had ceased business and was not accessing the GST portal; the impugned orders were issued in September 2022 after cancellation of registration. Taking these facts into account, the Court exercised its writ jurisdiction to set aside Exts.P5, P5(a), P6 and P6(a) and remit the matter to the 1st respondent for fresh adjudication. The remand directs the assessing authority to pass fresh orders after affording the petitioner an opportunity of hearing, thereby requiring reconsideration on merits by the competent officer rather than leaving the earlier orders in place. [Paras 3]

Exts.P5, P5(a), P6 and P6(a) set aside and the matter remitted to the 1st respondent to pass fresh orders after hearing the petitioner.

Remand subject to pre-deposit of tax liability - Conditional grant of relief on the petitioner remitting the admitted output tax liability within a stipulated time. - HELD THAT: - The petitioner admitted an outstanding output tax liability for the months in question. The Court conditioned the remand on the petitioner remitting a sum towards the outstanding GST liability within two weeks from receipt of certified copy of the judgment. The Court made clear that failure to remit the said amount within the prescribed period would forfeit the benefit of the order setting aside and remitting the assessment, thereby restoring finality to the impugned orders if the condition is not complied with. [Paras 3, 4]

Remand and setting aside of the orders are conditional on the petitioner remitting the stated GST liability within two weeks; non-compliance will result in loss of the benefit of the judgment.

Final Conclusion: Writ petition allowed in part: impugned assessment and summary orders for July 2017 and August 2017 are set aside and remitted to the jurisdictional assessing authority for fresh disposal after hearing, subject to the petitioner remitting the admitted GST liability within two weeks of receipt of certified copy of the judgment; failure to remit will forfeit the relief.

Non-uploading of order on the common portal - filing appeal manually under the proviso to sub-rule (3) of Rule 108 - treatment of a manually filed appeal as appeal filed in time - exclusion of period for limitation where portal upload is absent

Non-uploading of order on the common portal - filing appeal manually under the proviso to sub-rule (3) of Rule 108 - Petitioner permitted to file manual appeal against Ext.P3 order as contemplated by the proviso to sub-rule (3) of Rule 108 - HELD THAT: - The Court accepted that the grievance arose from the inability to file an online appeal because Ext.P3 was not uploaded on the common portal. Relying on the proviso to sub-rule (3) of Rule 108, and on the approach taken in a recent similar writ (W.P(C) No. 23135 of 2024), the Court directed that the petitioner may file a manual appeal by submitting a certified copy of the order. The Court prescribed a one week period from receipt of a certified copy of this judgment within which the petitioner must file the manual appeal. Upon such filing within the prescribed period the appeal shall be treated as having been filed in time. The Appellate Authority is required to dispose of the appeal in accordance with law after affording the petitioner an opportunity of hearing. [Paras 3]

Petitioner permitted to file manual appeal against Ext.P3 within one week of receipt of certified copy of the judgment; such appeal to be treated as filed in time and to be disposed of by the Appellate Authority after hearing.

Final Conclusion: Writ petition disposed of by permitting a manual appeal against Ext.P3 under the proviso to sub-rule (3) of Rule 108; if filed within one week of receipt of the certified copy of this judgment the appeal shall be treated as timely and adjudicated after hearing by the Appellate Authority.

Input Tax Credit - Provisional Registration - Permanent Registration - denial of credit under Section 16(2)(c) of the CGST/SGST Acts - reconsideration by assessing authority

Input Tax Credit - Provisional Registration - Permanent Registration - denial of credit under Section 16(2)(c) of the CGST/SGST Acts - reconsideration by assessing authority - Whether denial of Input Tax Credit on the ground that payments were not made against the Permanent Registration number is sustainable where payments were made against the Provisional Registration - HELD THAT: - The court found that Ext.P4 did not address the petitioner's contention that the tax payments in question were made by the supplier against the petitioner's Provisional Registration number granted under the CGST/SGST regime and prior to issuance of the Permanent Registration. The impugned order denies credit solely on the basis that no payment was reflected against the Permanent Registration number. The court held that if the payments were in fact made against the Provisional Registration, there is no reason to deny the claimed Input Tax Credit on that sole basis. Consequently, the portion of Ext.P4 which denies credit under the provisions adverted to must be set aside so that the first respondent can examine the factual and legal position afresh in light of these observations. [Paras 3]

Ext.P4 is set aside to the extent it denies Input Tax Credit under the cited provisions; matter is remitted to the first respondent for fresh consideration in accordance with the observations of the court.

Final Conclusion: Writ petition disposed of by setting aside the order insofar as it denies Input Tax Credit under the invoked provision; the assessing authority is directed to reconsider the claim afresh, taking into account payments reflected against the Provisional Registration.

Allowability of expenditure u/s 37(1) - perversity in appellate reversal - application of Supreme Court precedents, including Ramaraju Surgical Cotton Mills [2007 (8) TMI 39 - SUPREME COURT] - scope of Tribunal's duty to appreciate binding higher court decisions - HC [2024 (2) TMI 1434 - CALCUTTA HIGH COURT] decided in favour of revenue

HELD THAT:- Special Leave Petitions are dismissed.

Royalty - tax deduction at source (TDS) under section 195 - income deemed to accrue in India under section 9(1)(vi) - Double Taxation Avoidance Agreement (DTAA) interpretation - Binding effect of Supreme Court precedent - Closure of appeals pending outcome of review petition - Liberty to reopen appeals upon adverse review decision - delay filling SLP

HELD THAT:- Explanation offered for seeking condonation of delay of 384 days in filing is neither satisfactory nor sufficient in law so as to condone the same. Hence, the application seeking condonation is dismissed.

Even otherwise, the special leave petition is covered on merits by virtue of the judgment of this Court in the case of Engineering Analysis Centre of Excellence Private Limited [2021 (3) TMI 138 - SUPREME COURT] which judgment has also been sustained in the review petition filed by the petitioner by a three-Judge Bench of this Court.

Disallowance under Section 40A(2) as to legitimacy of business expenditure - application of Section 40A(2) to related-party service charges - transfer of hospital as going concern versus "slump sale" characterization - capital or revenue nature of project expenditure for hospital establishment - treatment of non-recoverable project costs as capital expenditure - nature of legal and professional charges - capital or revenue

HELD THAT:- On a query made by this Court, the learned counsel appearing for the petitioners, on instructions, states that the judgments referred to in paragraph 3 of the impugned judgment have not been challenged by the petitioners. Hence, no case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India.

The Special Leave Petition is, accordingly, dismissed.

Stay of notice under Section 148 - faceless mechanism and jurisdictional competence under the faceless assessment scheme - interim relief under Article 226 - followed precedent pending authoritative pronouncement by the Supreme Court - avoidance of multiplicity of litigation arising from High Court orders

Stay of notice under Section 148 - interim relief under Article 226 - Grant of interim stay of the notice issued under Section 148 and related proceedings - HELD THAT: - The High Court admitted the petition under Article 226 seeking quashing of the notices and, in view of the pendency before the Supreme Court of challenges to this Court's decision in Hexaware and other connected decisions, granted interim relief. The Court observed that numerous petitions following Hexaware have been disposed by this Court, but the Revenue has filed Special Leave Petitions in the Supreme Court, creating the prospect that such High Court disposals will lead to further litigation at the apex court and impose substantial burden and cost on both Revenue and assessees. In light of this, the Court concluded that a departure from its earlier practice of disposing petitions on the basis of Hexaware is warranted and that interim protection should be afforded to avoid immediate multiplicity of proceedings. Consequently, the notice under Section 148 dated 1 April 2024 and any proceedings arising therefrom were stayed until final disposal of the petition or further orders of the Supreme Court.

Petition admitted; interim stay granted to the notice under Section 148 dated 1 April 2024 and related proceedings pending final disposal or further orders of the Supreme Court

Followed precedent pending authoritative pronouncement by the Supreme Court - avoidance of multiplicity of litigation - Approach to disposal of petitions following Hexaware while the Supreme Court's decision is pending - HELD THAT: - The Court recorded that although earlier petitions were disposed following the Division Bench decision in Hexaware, the pendency of the Revenue's challenge in the Supreme Court alters the prudential approach. The Court emphasised that continued disposal of cases on the same footing would merely shift litigation to the Supreme Court and generate further rounds of contestation, burdening both parties. For this reason the Court signalled a change in practice and granted liberty to the parties to apply after appropriate orders are passed by the Supreme Court or upon final decision in Hexaware, thereby preserving the parties' rights without deciding the substantive legality of the impugned notices on merits.

Court directed a change of approach: parties granted liberty to apply after the Supreme Court's orders or final decision in Hexaware; substantive issues left open

Final Conclusion: The High Court admitted the petition and, without adjudicating the merits, granted interim relief by staying the notice under Section 148 dated 1 April 2024 and any proceedings arising therefrom; the Court also directed that parties have liberty to apply after the Supreme Court disposes or pronounces on the matters arising from Hexaware, signalling a departure from earlier practice of disposing similar petitions while the apex court's authoritative pronouncement is awaited.

Business loss vs capital loss - intention at time of acquisition - stock-in-trade - colorable device - substantial question of law

Business loss vs capital loss - intention at time of acquisition - stock-in-trade - colorable device - substantial question of law - Whether the Tribunal's reversal of the CIT(A)'s disallowance and holding that the loss of Rs.11,27,00,000 is a business loss (stock-in-trade) requires interference by the High Court. - HELD THAT: - The High Court held that the question raised by the Revenue in this appeal is essentially factual and not a substantial question of law. The Tribunal had reversed the CIT(A) on the basis that the shares were acquired pursuant to a Board resolution treating them as stock-in-trade and that the assessee had shown the shares as inventory in the balance sheet, leading to the loss when sold at a lower price. The Court noted that the Revenue had not raised the contention of a colorable device or challenged the genuineness of the transaction before the Tribunal; the Revenue's appeal to the Tribunal related to other disallowances. In these circumstances, and having regard to the Tribunal's factual finding (quoted at paras. 7 and 8 of the Tribunal's order) about the intention at acquisition and the classification as stock-in-trade, the High Court declined to interfere with the Tribunal's conclusion that the loss was a business loss and not a capital loss. [Paras 9, 11, 12]

The Tribunal's order holding the loss to be a business loss is not interfered with; the substantial question of law is answered against the Revenue.

Final Conclusion: The appeal under Section 260-A is dismissed; the High Court affirms the Tribunal's finding that the loss is a business loss (stock-in-trade) and refuses to entertain the Revenue's contention of a colorable device which was not raised before the Tribunal.

Reopening of assessment - reasons to believe - application of mind - borrowed satisfaction - successive notices under Section 148 - Writ of Certiorari

Reopening of assessment - reasons to believe - application of mind - borrowed satisfaction - Validity of the reasons recorded for reopening assessment under Section 147 read with Section 148 of the Act. - HELD THAT: - The Court found that the reasons recorded for reopening were devoid of application of mind and amounted to a borrowed satisfaction. Although the investigation wing intimated an alleged one-time settlement and escapement of income, the department ignored the fact that the assessee had filed and processed returns for the relevant year and had specifically brought that to the officer's attention in its objections. The officer nevertheless concluded there was no return to cross-check and relied on the intimation without independent consideration, which fails the mandatory test of 'reasons to believe' required to invoke Section 147 read with Section 148. For these reasons the recorded reasons were held untenable. [Paras 6]

Reasons recorded for reopening are quashed as lacking application of mind and being based on borrowed satisfaction.

Successive notices under Section 148 - Writ of Certiorari - Validity of issuance of three successive notices under Section 148 and the departmental communication disposing of objections. - HELD THAT: - The Court held that issuance of successive notices under Section 148 in the facts of the case was unsustainable. Having found the reasons for reopening to be untenable, the connected notices and the Communication disposing of objections could not stand. Consequently the notices dated 30.03.2017 and 31.03.2017 (three notices) and the Communication dated 27.11.2017 were quashed by exercise of writ jurisdiction. [Paras 6, 7]

The successive notices under Section 148 and the departmental Communication disposing objections are quashed.

Final Conclusion: The Writ Petition is allowed; the reasons for reopening assessment, the three notices issued under Section 148 and the Communication disposing of objections are quashed, resulting in issuance of a Writ of Certiorari in favour of the petitioner for A.Y 2010-11.

Vires of revision under Section 264 of the Income tax Act - violation of principles of natural justice by non furnishing of material relied upon - relevancy of Income Declaration Scheme (Section 183, Finance Act, 2016) to assessment/revision - remand for fresh consideration limited to specific rejection of claim

Vires of revision under Section 264 of the Income tax Act - Validity of the impugned orders dated 20.11.2023 in so far as they reject the petitioner's claims for AY 2013-14, AY 2014-15 and AY 2015-16. - HELD THAT: - The Court found an apparent discrepancy between the purported date of the impugned orders (20.11.2023) and their dispatch on 29.11.2023, after the petitioner had filed written submissions on 23.11.2023. Given that those written submissions were relevant and material to adjudication, and in view of the ambiguity on the face of record, the impugned orders insofar as they rejected the petitioner's claims were set aside and the matters remitted for fresh consideration. The Court limited the scope of reconsideration to the rejection of the claims and directed respondent No.1 to reconsider afresh in accordance with law, permitting the petitioner to furnish additional pleadings and documents. [Paras 6, 8]

Impugned orders dated 20.11.2023 are set aside insofar as they reject the petitioner's claims and the matters are remitted for fresh consideration.

Violation of principles of natural justice by non furnishing of material relied upon - Whether reliance by respondent No.1 on information said to have been procured from the Stock Exchange and Banks without furnishing that information to the petitioner vitiates the impugned orders. - HELD THAT: - The Court observed that the impugned order relied upon information allegedly procured from the Stock Exchange and Banks, but the record contained no indication that such information had been furnished to the petitioner to enable him to offer explanation. That omission rendered the impugned order violative of principles of natural justice. In consequence, the order was set aside to enable fresh consideration after affording the petitioner an opportunity to respond to such material. [Paras 7]

Impugned order quashed insofar as it relied on material not furnished to the petitioner; the matter remitted for reconsideration after affording opportunity to be heard.

Relevancy of Income Declaration Scheme (Section 183, Finance Act, 2016) to assessment/revision - Whether the respondent failed to consider the petitioner's declaration and investment under the Income Declaration Scheme, 2016, and whether that omission vitiates the impugned order. - HELD THAT: - The Court noted that the petitioner had made investments and availed the benefit of the Income Declaration Scheme under Section 183 of the Finance Act, 2016, which was material to the claims under consideration. The impugned order did not deal with this aspect, and that non consideration constituted a further ground requiring setting aside of the rejection and remand for fresh adjudication in accordance with law. [Paras 8]

Impugned order set aside for failure to consider the Income Declaration Scheme benefit; remitted for reconsideration.

Remand for fresh consideration limited to specific rejection of claim - Relief to be granted and the extent of remand and confirmation/quashing of other portions of the impugned orders. - HELD THAT: - The Court confined its relief to setting aside the portions of the impugned orders that rejected the petitioner's claims while confirming those portions that had upheld the petitioner's claim. Consequentially, the subsequent order dated 28.12.2023 passed by respondent No.2 was quashed. The remand to respondent No.1 was limited to reconsideration of the rejected claims, with liberty to the petitioner to produce additional pleadings and documents, and with directions to proceed in accordance with law. [Paras 8]

Petition allowed in part: rejections set aside and remitted; confirmations upheld; consequential order quashed; liberty to petitioner to place additional material.

Final Conclusion: Writ petition allowed in part. The Court set aside the portions of the revision orders dated 20.11.2023 that rejected the petitioner's claims for AY 2013-14, AY 2014-15 and AY 2015-16, quashed the consequential order dated 28.12.2023, confirmed the portions upholding the petitioner's claim, and remitted the matters to respondent No.1 for fresh consideration limited to the rejected claims, with liberty to the petitioner to furnish additional material.

Violation of principle of natural justice - Ex parte appellate order - Failure to adjudicate on merits under the mandate of section 250(6) of the Act - Remand for de novo adjudication with opportunity to be heard

Violation of principle of natural justice - Ex parte appellate order - Failure to adjudicate on merits under the mandate of section 250(6) of the Act - Remand for de novo adjudication with opportunity to be heard - Whether the order of the Ld. CIT(A) should be set aside and the matter remitted for fresh adjudication after affording the assessee opportunity of being heard. - HELD THAT: - The Tribunal found that during the appellate proceedings the assessee did not have an opportunity to present details and documents because notices of hearing were not served, resulting in an ex parte order by the Ld. CIT(A). The Ld. CIT(A) also failed to decide the matter on merits in accordance with the mandate of section 250(6) of the Act. Principles of natural justice and fair play require that an affected party be granted a sufficient opportunity to be heard. The Revenue raised no objection to remand. In the interest of justice and without adjudicating the merits, the Tribunal concluded that the correct course is to set aside the impugned order and restore the matter to the file of the Ld. CIT(A) for de novo adjudication, directing the Ld. CIT(A) to pass a speaking order after affording the assessee adequate opportunity to contest his stand. [Paras 2, 4]

Order of the Ld. CIT(A) set aside; matter remitted to the Ld. CIT(A) for de novo adjudication after affording the assessee adequate opportunity of being heard.

Final Conclusion: The appeal is treated as allowed for statistical purposes and the matter is remitted to the Ld. CIT(A) for fresh adjudication on merits after affording the assessee sufficient opportunity to be heard.

Deemed income under section 56(2)(x) - stamp duty value as on date of agreement proviso - applicability of proviso requiring payment by banking channels - treatment of allotment letter as agreement for proviso - section 269AB registration requirement

Deemed income under section 56(2)(x) - stamp duty value as on date of agreement proviso - treatment of allotment letter as agreement for proviso - Whether the difference between stamp duty value at registration and the agreed consideration is taxable under the deemed income provision of section 56(2)(x) where the price was fixed by an earlier allotment/agreement and payments were made in terms thereof. - HELD THAT: - The Tribunal upheld the CIT(A)'s finding that the appellant had entered into the contract of purchase by way of allotment letter dated 10.09.2012 fixing the consideration at Rs.1,75,00,000 and had made payments thereafter in accordance with that arrangement. The proviso to section 56(2)(x) permits taking the stamp duty value as on the date of the earlier agreement (instead of registration) where the date of agreement and date of registration differ, provided the consideration or part thereof was paid by account payee cheque/electronic banking on or before the date of the agreement. The facts show payments made through banking channels pursuant to the 2012 allotment/agreement. Applying the proviso, the relevant stamp duty value is that as on the date of the 2012 agreement, and since payments at that time were not less than the stamp duty value then applicable, the excess invoked by the AO under section 56(2)(x) does not arise. The Tribunal accordingly upheld deletion of the addition. [Paras 6, 10, 11]

Addition under section 56(2)(x) deleted as the proviso applies and no deemed income arises.

Section 269AB registration requirement - treatment of allotment letter as agreement for proviso - Whether the AO's reliance on absence of a registered agreement under section 269AB negates the applicability of the proviso or the allotment letter as constituting the agreement. - HELD THAT: - The AO treated the allotment letter as not being a registered agreement and relied upon section 269AB registration contention to treat the transaction as occurring only on registration. The Tribunal rejected that approach, accepting the CIT(A)'s finding that the allotment letter, containing terms, conditions and payment schedule and acted upon by the assessee, constituted a binding agreement for the purposes of the proviso to section 56(2)(x). The mere non-registration of the earlier allotment document with reference to the AO's contention did not preclude application of the proviso where payments were made in banking channels in terms of the agreement. [Paras 4, 6, 10]

Absence of a registered agreement under section 269AB does not defeat the application of the proviso when the allotment letter operates as the agreement and payments were made through banking channels.

Applicability of proviso requiring payment by banking channels - deemed income under section 56(2)(x) - Whether non-deduction/shortfall of TDS or timing of TDS deductions affects applicability of the proviso and the deletion of the addition. - HELD THAT: - The record shows payments were made by banking channels over the period beginning 10.09.2012 and that applicable TDS was deducted on payments made after 01.06.2013. The CIT(A) noted compliance with TDS obligations on payments after that date. The Tribunal accepted that payments were made through banking channels in terms of the 2012 arrangement and that the proviso's requirement of payment by account payee cheque/electronic clearing on or before the date of agreement was thereby satisfied for purposes of taking the stamp duty value as on the date of agreement. The AO's charting of TDS shortfall did not negate the applicability of the proviso or the resultant deletion of the addition under section 56(2)(x). [Paras 6, 7, 10]

TDS timing/shortfall did not preclude application of the proviso; deletion sustained.

Final Conclusion: The Tribunal dismissed the revenue appeal, upholding the CIT(A)'s deletion of the addition under section 56(2)(x) on the ground that the allotment/agreement dated 10.09.2012 and payments made through banking channels brought the case within the proviso permitting stamp duty value as on the agreement date; consequent contentions regarding registration under section 269AB and TDS shortfall did not defeat that conclusion.

Eligibility for exemption under Section 10(23C)(iiiad) for educational institutions - treatment of gross receipts of separate educational institutions versus aggregate receipts - applicability of Rule 2BC to monetary threshold for exemption - assessment of income on net receipts after allowing legitimate and admissible expenditure - remand for fresh adjudication and verification by assessing officer

Treatment of gross receipts of separate educational institutions versus aggregate receipts - eligibility for exemption under Section 10(23C)(iiiad) for educational institutions - applicability of Rule 2BC to monetary threshold for exemption - Whether the monetary limit for claiming exemption under Section 10(23C)(iiiad) read with Rule 2BC is to be applied to the gross receipts of each distinct educational institution operated by the society or to the aggregate receipts of the society. - HELD THAT: - The Tribunal noted that the assessee operates two distinct educational institutions and had specifically contended before the CIT(A) that the Rs.1 crore monetary limit must be applied to the gross receipts of each institution separately. The CIT(A) had denied the claim on the ground that total receipts of the society exceeded the prescribed limit and also on registration/approval aspects, but did not dispute that two separate schools are being run. In view of these facts the Tribunal held that the gross receipts of each educational institution ought to be separately considered for the purpose of ascertaining eligibility under Section 10(23C)(iiiad) read with Rule 2BC, and that this material factual and legal contention was not properly considered by the CIT(A). [Paras 7]

Gross receipts of each educational institution must be separately considered for applying the Rs.1 crore monetary threshold under Section 10(23C)(iiiad) read with Rule 2BC; matter remanded for verification and fresh adjudication.

Assessment of income on net receipts after allowing legitimate and admissible expenditure - remand for fresh adjudication and verification by assessing officer - Whether the department could assess the entire gross receipts to tax without allowing legitimate expenditure incurred in running the educational institutions. - HELD THAT: - The Tribunal observed that the CPC had treated the entire gross receipts as taxable because aggregate receipts exceeded Rs.1 crore and that the CIT(A) upheld that view. The assessee had argued that assessment should follow commercial principles and permit deduction of eligible expenditure incurred for earning the receipts, so that tax liability is determined on net income. The Tribunal found that the claim that eligible expenditures had not been allowed was not properly examined by the CIT(A). Consequently, the Tribunal directed that total income ought to be assessed after allowing admissible expenditure and remanded the matter to the jurisdictional assessing officer for fresh adjudication, verification of facts and giving the assessee an opportunity of hearing. [Paras 7]

Assessment to be made in accordance with commercial principles permitting deduction of legitimate expenditure against gross receipts; matter remanded to AO for fresh adjudication and verification with opportunity of hearing.

Final Conclusion: The impugned order of the CIT(A) is set aside and the matter is remanded to the assessing officer for fresh adjudication and verification of facts on (a) separate treatment of gross receipts of each educational institution for exemption under Section 10(23C)(iiiad) read with Rule 2BC, and (b) determination of taxable income after allowing admissible expenditure; appeal is allowed for statistical purposes.

Condonation of delay - sufficient cause - law of limitation - due diligence and negligence - discretion to condone delay under section 253(5) of the Act - CBDT Circular No.7/2024 - extension of time for registration under section 12A

Condonation of delay - sufficient cause - due diligence and negligence - discretion to condone delay under section 253(5) of the Act - Application for condonation of delay in filing appeals was refused for want of sufficient cause. - HELD THAT: - The Tribunal examined the affidavits and material on record and found that the primary explanation for the delay was that the assessee's Chartered Accountant discovered the rejection of the registration application only while checking the assessment order for AY 2022-23. The Tribunal held that such a reason - reflecting inactivity, negligence and lack of due diligence in pursuing the registration matter - does not constitute an adequate or 'sufficient cause' within the meaning of section 253(5) of the Act. Reliance was placed on the settled principles in Supreme Court authorities that the discretion to condone delay must be exercised judiciously, that limitation law is founded on public policy, and that negligence, inaction or lack of bona fides are not grounds for liberal condonation. The Tribunal observed that permitting condonation in such circumstances would revive stale litigation and that previous decisions allowing condonation for long delays where gross negligence was present were not to be followed. In view of the foregoing, the Tribunal declined to exercise its discretion to condone the inordinate delay. [Paras 5, 6, 18]

Delay not condoned; application for condonation dismissed.

Final Conclusion: All three appeals are dismissed as the Tribunal refused to condone the inordinate delay for want of sufficient cause; the assessees remain at liberty to seek relief under CBDT Circular No.7/2024 before the Ld. CIT(E).

Reopening of assessment and scope of reassessment under Section 147/148 - requirement to assess the escaped income mentioned in reasons recorded before assessing other incomes - limits on assumption of jurisdiction where reasons recorded are not acted upon - interaction of Explanation 3 with the substantive part of Section 147

Reopening of assessment and scope of reassessment under Section 147/148 - requirement to assess the escaped income mentioned in reasons recorded before assessing other incomes - limits on assumption of jurisdiction where reasons recorded are not acted upon - Validity of reassessment where notice was issued to assess capital gains on sale of land but the reassessment order did not examine or assess that escaped income and instead made unrelated transfer pricing adjustments. - HELD THAT: - The Tribunal noted the AO issued notice under Section 148/147 alleging escapement of income by reason of sale of land and failure to offer capital gains. The reasons recorded therefore related solely to assessing capital gains arising from the sale of specified properties. In framing the reassessment under Section 143(3) r.w.s.147, the AO did not assess the capital gains which formed the basis of the formation of belief but instead made a downward transfer pricing adjustment to determine ALP. Relying on the principle in Jet Airways and Martech Peripherals, the Tribunal held that while Section 147 permits the AO to bring to tax other income which comes to his notice during reassessment proceedings, that power is contingent on the escaped income specified in the reasons recorded being assessed. If the AO accepts the assessee's contention that the originally alleged escaped income has not escaped assessment, he cannot proceed to independently assess different income on the same notice; a fresh notice would be necessary. Applying this principle, since the AO did not assess the escaped capital gains (the ground for reopening) but proceeded to make an unrelated addition, the reassessment was held to be beyond the jurisdictional scope of the reasons recorded and therefore liable to be quashed. [Paras 3, 5, 6]

Reassessment order quashed for lack of jurisdiction; appeal allowed on the jurisdictional ground and merits left undecided as academic.

Final Conclusion: The Tribunal quashed the reassessment framed for AY 2010-11 because the AO, having reopened the assessment to examine unassessed capital gains on sale of land, did not assess that escaped income but instead made unrelated transfer pricing adjustments; the reassessment was therefore held beyond the scope of the reasons recorded and void.

Disallowance of expenditure in relation to exempt income under Section 14A - Invocation and application of Rule 8D for computing disallowance - Assessing Officer's satisfaction to apply Rule 8D - Allocation of common/Head Office expenses for deduction under Section 80IA - Materiality principle in allocation of expenses

Disallowance of expenditure in relation to exempt income under Section 14A - Invocation and application of Rule 8D for computing disallowance - Assessing Officer's satisfaction to apply Rule 8D - Validity of disallowance under Section 14A read with Rule 8D for expenses in relation to exempt income - HELD THAT: - The Tribunal upheld the CIT(A)'s confirmation of the AO's disallowance under Section 14A, applying amended Rule 8D effective 02.06.2016. The assessee declared NIL expenditure but had substantial investments yielding exempt income (dividend and long term capital gains) and did not satisfactorily explain the absence of any related administrative expenses. The AO was rightly not satisfied with the assessee's claim and therefore was entitled to determine expenditure under Rule 8D(2)(ii). The Tribunal also relied on the assessee's conduct in the preceding year-where the assessee had itself made a suo moto disallowance-to find the NIL claim implausible. On these facts the invocation and computation under Rule 8D were held to be in accordance with law and the disallowance upheld. [Paras 7, 8, 9, 10, 11]

Disallowance of Rs. 23,00,575/- under Section 14A computed under Rule 8D is upheld.

Allocation of common/Head Office expenses for deduction under Section 80IA - Materiality principle in allocation of expenses - Sustainability of reducing deduction under Section 80IA by allocating common/head-office expenses to the eligible unit - HELD THAT: - The Tribunal accepted the assessee's contention that allocation of common expenses (director's remuneration, bank charges, auditor's fees) to the eligible unit was inappropriate. The eligible unit's turnover was minuscule (0.2676%) vis-a -vis the ineligible unit (99.733%), rendering the allocation immaterial. The Tribunal also relied on an earlier ITAT decision in the assessee's own case (AY 2008-09) which had found similar allocations to be without logic or bearing on the eligible unit's income. On the combined grounds of materiality and precedent, the allocation and consequent reduction of the Section 80IA deduction were held not sustainable. [Paras 14, 15, 18, 19, 20]

Addition of Rs. 1,07,897/- by allocating common expenses to the eligible unit is deleted and the ground is allowed.

Final Conclusion: The appeal is partly allowed: the disallowance under Section 14A computed under Rule 8D (Rs. 23,00,575/-) is upheld, whereas the allocation of common/head-office expenses to the eligible unit and the resulting reduction of deduction under Section 80IA (Rs. 1,07,897/-) is deleted.

Penalty for act or omission rendering goods liable to confiscation under section 113 - Abetment as distinct from primary act or omission in penalty provision - KYC obligations of Customs House Agents (CHA) - Liability of intermediaries for failure to verify chain of suppliers - Imposition and judicial moderation of penalty on equitable grounds - Attempted export of prohibited wildlife products via Customs Transit Declaration (CTD)

Penalty for act or omission rendering goods liable to confiscation under section 113 - Abetment as distinct from primary act or omission in penalty provision - Whether penalty under section 114(i) can be imposed on the appellants despite absence of allegation of abetment - HELD THAT: - The Tribunal examined section 114(i) and the factual findings of the adjudicating authority and concluded that penalty under section 114(i) is not confined to cases of abetment. The provision applies to any person who does or omits to do any act which would render goods liable to confiscation under section 113; abetment is a secondary mode of liability. The adjudicating authority's imposition of penalty on the appellants was therefore sustainable in law where their acts or omissions facilitated the attempted export of prohibited goods. The Tribunal rejected the appellants' submission that absence of an abetment allegation precluded penalty, holding that primary omission to perform statutory duties can ground penalty under section 114(i). [Paras 8]

Penalty under section 114(i) can be imposed for primary acts or omissions rendering goods liable to confiscation; absence of abetment allegation does not preclude imposition of penalty.

KYC obligations of Customs House Agents (CHA) - Liability of intermediaries for failure to verify chain of suppliers - Whether the appellants (a CHA firm and an intermediary sourcing business) breached statutory duties by failing to obtain KYC and authorization and thereby attracted penal liability - HELD THAT: - The Tribunal reviewed investigative findings that the CHA firm and the intermediary did not obtain letters of authorization, did not verify the exporter or the intermediary sources, and neglected KYC requirements despite handling consignments. The Tribunal held that it was primarily the duty of the CHA to obtain and fulfil KYC requirements and that merely orally sourcing the business without contemporaneous verification amounted to a gross omission. The intermediary who sourced the job and handed over documents without verifying or ensuring requisite authorization was an important link whose omission contributed to the attempted export. Such failures to perform statutory responsibilities rendered the appellants liable under the penalty provision. [Paras 3, 4, 9]

The appellants breached CHA/KYC obligations and their failure to verify the chain of intermediaries and obtain authorization attracted penal liability.

Imposition and judicial moderation of penalty on equitable grounds - Whether the quantum of penalty imposed by the adjudicating authority warranted reduction - HELD THAT: - While upholding liability, the Tribunal exercised its discretion to moderate the quantum of penalty after considering facts and the totality of actions of the two appellants. The adjudicating authority had imposed a penalty of a significantly higher amount, but the Tribunal found that a reduced penalty would meet the ends of justice in the circumstances of the case. Applying equitable moderation of penalty, the Tribunal fixed the penalty at a lower, specified sum for each appellant. [Paras 10]

Penalty imposed by the adjudicating authority is reduced; a moderated penalty is fixed for each appellant.

Final Conclusion: The Tribunal upheld penal liability of the CHA firm and the intermediary for failure to perform statutory KYC and authorization duties, held that penalty under section 114(i) is attracted by primary acts or omissions (not only by abetment), and, exercising discretion, reduced the quantum of penalty to a moderated sum for each appellant; appeals disposed accordingly.

Customs valuation - transaction value rejection and application of Customs Valuation Rules - contemporaneous transaction value comparison - classification of goods - opportunity for cross-examination of witness - supply of relied upon documents and contemporaneous import data - reopening of assessment and requirement of review - remand for fresh adjudication

Customs valuation - transaction value rejection and application of Customs Valuation Rules - contemporaneous transaction value comparison - Whether the declared transaction value could be rejected and value re-determined under the Customs Valuation Rules by reference to contemporaneous imports - HELD THAT: - The Tribunal observed that valuation requires sequential application of the Customs Valuation Rules and that any reliance on contemporaneous prices must follow the statutory procedure of rejecting unacceptable transaction values and then applying Rules 4 to 9 of the CVR, 2007. The Tribunal found that the department's exercise did not adequately demonstrate that the sequential steps under the CVR were lawfully and transparently followed, and that contemporaneous import data relied upon to fix value had not been supplied to the appellant for testing and reply. Given these procedural deficiencies the Tribunal declined to decide the valuation on merits and directed the adjudicating authority to re-determine valuation after following the CVR sequence and after providing the appellant the necessary data and opportunity to rebut the same. [Paras 7, 8, 9]

Remanded to the adjudicating authority for fresh determination of value in accordance with the Customs Valuation Rules after supplying contemporaneous import data and affording a fair opportunity to the appellant.

Classification of goods - contemporaneous transaction value comparison - Whether the imported nutritional supplements were correctly classified and whether the classification dispute could be finally adjudicated on the record before the Tribunal - HELD THAT: - The Tribunal noted that classification of certain products was disputed (department proposing Tariff Heading 21069099 while the appellant asserted 21061000 for some items) and that some products prima facie did not merit classification under the department's proposed heading. The Tribunal recorded that the lower authority's order did not sufficiently deal with these classification contentions and that the materials and analysis underpinning the department's classification (including contemporaneous import data) must be disclosed to the appellant and the classification issues tested afresh. Accordingly, the Tribunal did not decide classification on merits and required the adjudicating authority to reconsider classification after supplying relevant documents and allowing the appellant to respond. [Paras 7, 8, 9]

Remanded for fresh consideration of classification issues with production of the documents relied upon and after affording the appellant an opportunity to contest the classification.

Opportunity for cross-examination of witness - supply of relied upon documents and contemporaneous import data - reopening of assessment and requirement of review - Whether the departmental proceedings complied with principles of procedural fairness, including cross-examination and disclosure of documents relied upon, and whether the assessment could be reopened without appropriate procedure - HELD THAT: - The Tribunal found that the statement of the Director (Finance) of a third party, relied upon by the department, required testing by cross-examination and that the contemporaneous import data and other documents relied upon by the department had not been supplied to the appellant, preventing an effective defence. The Tribunal also observed that the question whether the assessment could be reopened or the matter properly revived by issue of the show cause notice required examination in the light of these procedural defects. In view of the absence of these fundamental procedural safeguards, the Tribunal held that the adjudicating authority must re-open the matter only after complying with requirements of disclosure and by affording the appellant the chance to cross-examine witnesses relied upon. [Paras 7, 8, 9]

Remanded for adjudication afresh after giving the appellant the documents and data relied upon and an opportunity to cross-examine witnesses; the assessment/review issues to be examined by the adjudicating authority in that exercise.

Final Conclusion: The appeal is allowed by way of remand. The matter is remitted to the adjudicating authority for fresh consideration of valuation and classification and for examination of procedural issues (including production of relied-upon import data and opportunity for cross-examination), after which the authority shall decide the claims in accordance with law.

Liability of customs broker for misclassification - classification as matter of belief - role of Customs Authorities in classification - penalty under the Customs Act - proof of collusion or wilful dishonesty - Customs Brokers Licensing Regulations, 2018

Liability of customs broker for misclassification - classification as matter of belief - proof of collusion or wilful dishonesty - penalty under the Customs Act - Imposability of penalty on the Customs Broker under the Customs Act for alleged misclassification of safety matches and claim of higher MEIS benefit. - HELD THAT: - The Tribunal found that the practice of classifying safety matches under the contested CTH was long followed at the Custom House for the relevant period, and that classification disputes are complex and fall within the domain of belief of the exporter/assessee rather than automatically constituting misdeclaration. The adjudicating authority did not establish any blameworthy, wilful or dishonest conduct by the broker or any proof of collusion with the exporter; mere assumptions or bald statements in the show cause notice and order cannot substitute for proof. The statutory responsibility for correct classification and assessment rests with Customs officers and cannot be shifted onto the CHA absent evidence of deliberate wrongdoing by the broker. Applying these principles, the Tribunal concluded that the facts did not support imposition of penalty under the Customs Act.

Penalty imposed on the Customs Broker under the Customs Act set aside for lack of evidence of wilful misclassification or collusion.

Customs Brokers Licensing Regulations, 2018 - liability of customs broker for misclassification - Appropriate forum and regulatory framework for addressing lapses in duties performed by a Customs Broker. - HELD THAT: - The Tribunal observed that where action is proposed specifically for lapses in duties of a Customs Broker (as opposed to blameworthy acts attracting penal consequences under the Customs Act), such matters are more properly examined under the Customs Brokers Licensing Regulations, 2018, which regulate the working of CHAs and provide for disciplinary or regulatory action. The order therefore indicates that regulatory scrutiny under CBLR, 2018 would be the proper mechanism for addressing broker lapses, rather than imposing penal liability under the Customs Act without requisite proof.

Matters attributable to lapses of the broker should be considered under the Customs Brokers Licensing Regulations, 2018; penal action under the Customs Act was not justified in the present case.

Final Conclusion: The penalty imposed on the appellant Customs Broker for alleged misclassification and facilitating undue MEIS benefit is set aside for lack of evidence of wilful or dishonest conduct; regulatory remedies under the Customs Brokers Licensing Regulations, 2018 remain available for any proven lapses.

Moratorium under section 14 of the IBC, 2016 - prohibition on institution or continuation of proceedings against the corporate debtor - distinction between a direction not to take further steps and a judicial stay - maintainability of counterclaims by the corporate debtor during moratorium - effect of interim directions of appellate forum on moratorium

Effect of interim directions of appellate forum on moratorium - distinction between a direction not to take further steps and a judicial stay - Whether the NCLAT's direction that "no further steps shall be taken in pursuance of the order dated 16.10.2023" operated as a stay of the moratorium imposed by the NCLT - HELD THAT: - The court held that the language of the NCLAT order - directing that no further steps be taken in pursuance of the NCLT order - is not equivalent to a stay of the moratorium itself. If the NCLAT had intended to stay the moratorium it could and would have done so expressly. The appellate direction that no further steps be taken is procedural and does not modify or suspend the moratorium declared by the adjudicating authority under the IBC. Therefore the moratorium continues to operate unless and until it is expressly stayed or modified by a competent authority.

NCLAT's direction that no further steps be taken does not amount to a stay of the moratorium; the moratorium remains in force.

Prohibition on institution or continuation of proceedings against the corporate debtor - moratorium under section 14 of the IBC, 2016 - Whether the petitioner could be permitted to institute arbitral proceedings against the corporate debtor while the moratorium under section 14 is in force - HELD THAT: - The court observed that the moratorium imposed by the NCLT expressly prohibits the institution or continuation of suits or proceedings, including arbitral proceedings, against the corporate debtor. The petition seeks leave to institute arbitral proceedings against the respondent; permitting such institution would directly contravene the moratorium. The status of the insolvency proceedings and the specific terms of the moratorium preclude granting the relief sought until the moratorium is lifted or modified by the competent forum.

Petition for institution of arbitral proceedings cannot be granted while the NCLT-imposed moratorium remains in force.

Maintainability of counterclaims by the corporate debtor during moratorium - prohibition on institution or continuation of proceedings against the corporate debtor - Whether the decision in SSMP Industries Ltd v Perkan Food Processors Pvt Ltd permits institution or continuation of proceedings against the corporate debtor during the moratorium - HELD THAT: - The court distinguished SSMP Industries on its facts: that decision holds that counterclaims by a corporate debtor may be adjudicated during the moratorium because the moratorium restrains actions against the corporate debtor, whereas a counterclaim is a claim by the corporate debtor. That principle does not assist a party seeking to initiate proceedings against the corporate debtor. The present petition seeks to institute arbitral proceedings against the corporate debtor, which is squarely prohibited by the moratorium; therefore SSMP Industries is inapplicable to permit institution of proceedings here.

The SSMP Industries precedent is distinguishable and does not allow institution of proceedings against the corporate debtor during the moratorium.

Final Conclusion: The petition for leave to institute arbitral proceedings is adjourned sine die because the NCLT-imposed moratorium, which prohibits institution or continuation of proceedings against the corporate debtor, remains in force; the NCLAT's interim direction that no further steps be taken does not operate as a stay of that moratorium, and the petitioner may seek revival if the moratorium is lifted or modified.

Moratorium under Section 14 of the Insolvency and Bankruptcy Code - Explanation to Section 14(1) - continuation of licences/benefits subject to no default in current dues - Section 14(2-A) - essential supply may be terminated where dues arising from such supply during moratorium are unpaid - Payment of current dues arising during Corporate Insolvency Resolution Process - Essential goods or services and CIRP Regulations 31-32 (treatment of shortfall as CIRP costs)

Moratorium under Section 14 of the Insolvency and Bankruptcy Code - Explanation to Section 14(1) - continuation of licences/benefits subject to no default in current dues - Section 14(2-A) - essential supply may be terminated where dues arising from such supply during moratorium are unpaid - Payment of current dues arising during Corporate Insolvency Resolution Process - Whether the electricity supplier was entitled to demand payment of current electricity dues arising during the moratorium and to disconnect supply for non-payment. - HELD THAT: - The Tribunal held that the Explanation to Section 14(1) and Section 14(2 A) (as inserted by Act 1 of 2020) must be read to qualify the protection of the moratorium: continuation of benefits, licences or supplies is subject to no default in payment of current dues, and supplies considered critical by the RP may be terminated, suspended or interrupted if dues arising from such supply during the moratorium are not paid. The Appellate Tribunal found the Adjudicating Authority erred in treating the disconnection notice as a prohibited "institution of suits or continuation of pending proceedings" under Section 14. Reliance on this Tribunal's precedents (including Shailesh Verma) supports the proposition that electricity supplied for managing operations/critical to preserve value is subject to the exception in Section 14(2 A) and that non payment of current dues disentitles the Corporate Debtor to the protective embargo. Applying that scheme to the admitted facts (outstanding post CIRP electricity dues and paucity of funds pleaded by the RP), the Tribunal concluded the supplier was entitled to require payment of current dues and to proceed by invoking the applicable law if dues remained unpaid. [Paras 16, 17, 18]

The impugned order holding that the supplier could not proceed was set aside; the supplier is entitled to payment of current electricity dues incurred during CIRP and may take coercive steps if those dues are not paid.

Payment of current dues arising during Corporate Insolvency Resolution Process - Essential goods or services and CIRP Regulations 31-32 (treatment of shortfall as CIRP costs) - Relief and timeline for payment of outstanding electricity dues and opportunity to propose phased payment. - HELD THAT: - Having set aside the Adjudicating Authority's orders, the Tribunal directed the Respondent (RP) to clear outstanding electricity dues within 90 days from the date of the Tribunal's order. Recognising practical considerations, the Tribunal allowed the RP 30 days to submit a phased payment proposal to the supplier; the supplier must communicate acceptance, rejection or modification within 15 days of receipt. If the supplier rejects the phased proposal, the 90 day timeline for full payment remains operative. These directions balance the statutory entitlement of the supplier to recover current dues with an opportunity for structured repayment. [Paras 19]

Both impugned orders were set aside; the Respondent to clear outstanding dues within 90 days, subject to the limited opportunity to present a phased payment plan and the supplier's considered response.

Final Conclusion: The Tribunal set aside the Adjudicating Authority's orders which had permanently stayed disconnection, holding that the Explanation to Section 14(1) and Section 14(2 A) of the IBC permit termination/suspension of critical supplies where current dues during moratorium remain unpaid; the Respondent was directed to discharge outstanding electricity dues within 90 days, with a limited opportunity to propose a phased payment plan.

Residuary jurisdiction under Section 60(5)(c) of the IBC - jurisdiction of the Adjudicating Authority/NCLT to adjudicate matters dehors the insolvency process - challenge to pre CIRP industrial closure/lockout - verification and admission of claims in liquidation - public law decisions by statutory authorities lying outside insolvency proceedings

Residuary jurisdiction under Section 60(5)(c) of the IBC - challenge to pre CIRP industrial closure/lockout - jurisdiction of the Adjudicating Authority/NCLT to adjudicate matters dehors the insolvency process - Adjudicating Authority had no jurisdiction under Section 60(5)(c) to adjudicate the legality of the closure/lockout dated 31.07.2017 which was effected prior to commencement of CIRP. - HELD THAT: - The Tribunal found the closure/lockout dated 31.07.2017 to be a matter antecedent to the CIRP and arising under the Uttar Pradesh Industrial Disputes Act, 1947, hence not within the ambit of matters 'arising out of or in relation to' the insolvency process so as to attract residuary jurisdiction under Section 60(5)(c). The judgment relied on the principle that Section 60(5)(c) cannot be expanded to cover matters dehors insolvency proceedings and would produce absurd results if read to embrace all public law or statutory decisions unrelated to the insolvency nexus. Reference to precedents (including Gujarat Urja, Embassy, and TCS as discussed in the judgment) supports the limited scope of residuary jurisdiction: where the dispute has no sufficient nexus to the insolvency of the corporate debtor, NCLT/NCLAT lack competence to adjudicate it. The High Court and Supreme Court orders granting liberty to raise contentions in NCLT proceedings did not amount to directions that NCLT must adjudicate the legality of the pre CIRP closure; they merely permitted claim filing and raising of contentions in the CIRP/liquidation process. On these grounds the Adjudicating Authority's conclusion that it lacked jurisdiction to decide the legality of the 31.07.2017 notice was upheld. [Paras 18, 19, 29]

The challenge to the closure/lockout dated 31.07.2017 is not maintainable before the Adjudicating Authority; the Adjudicating Authority did not err in declining to adjudicate the legality of that notice.

Verification and admission of claims in liquidation - no new reasons by statutory authority - The liquidator's partial admission of the Appellant's claim and the non verification of claims for the period after 31.07.2017 were not interfered with by the Tribunal. - HELD THAT: - The Tribunal noted that the Appellant had filed claims in the liquidation process and the liquidator admitted a portion of those claims. As the Pant Nagar unit remained closed after 31.07.2017, the Adjudicating Authority rightly accepted that claims for salary/bonus subsequent to the closure could not be verified. The Appellant's reliance on prior communications allegedly admitting claims on a contingent basis did not oblige the Adjudicating Authority to ignore the factual consequence of closure during liquidation. The Court observed that the Adjudicating Authority was entitled to give reasons for non acceptance of claims in the liquidation context and that the precedents invoked by the Appellant (e.g., on the principle against adducing new reasons) did not warrant setting aside the impugned conclusion. [Paras 20, 29]

The liquidator's admission of part of the claim stands and the non verification/refusal to admit claims for the period after the closure is justified and not interfered with.

Final Conclusion: The Appeal is dismissed: the Adjudicating Authority correctly held that it had no jurisdiction to adjudicate the legality of the pre CIRP closure/lockout dated 31.07.2017, and the Tribunal will not disturb the liquidator's partial admission of claims or the non verification of claims arising after the closure.

Clean slate principle - extinguishment of liabilities in liquidation - cut-off date / liquidation commencement date - e-auction of corporate debtor as going concern on "as is where is" basis - statutory scheme of IBBI (Liquidation Process) Regulations, 2016 - claims to be proved as on liquidation commencement date - scope of reliefs and concessions granted by adjudicating authority

Clean slate principle - extinguishment of liabilities in liquidation - cut-off date / liquidation commencement date - e-auction of corporate debtor as going concern on "as is where is" basis - Whether extinguishment of liabilities under the 'clean slate' principle extends only up to the liquidation commencement date or also up to the date of sale by e-auction when assets are sold as a going concern. - HELD THAT: - The e-auction terms and the sale schedule expressly provided that known or unknown, disclosed or undisclosed liabilities/obligations as on the cut-off date (i.e. date of commencement of liquidation) shall be dealt with under Section 53 of the IBC. Regulations 12 and 16 of the IBBI (Liquidation Process) Regulations, 2016 require stakeholders to submit or update claims as on the liquidation commencement date and to prove claims as on that date. The adjudicating authority therefore correctly granted reliefs confined to liabilities prior to the insolvency commencement/liquidation commencement date. The appellant's contention that the 'clean slate' principle should extend to the date of actual e-auction sale is contrary to the e-auction conditions and the statutory scheme which fixes the relevant cut-off as the liquidation commencement date, and cannot be accepted. [Paras 11, 12, 13, 14, 15]

Extinguishment of claims and liabilities is confined to the liquidation commencement (cut-off) date; reliefs cannot be extended to the date of e-auction sale.

Scope of reliefs and concessions granted by adjudicating authority - statutory scheme of IBBI (Liquidation Process) Regulations, 2016 - Whether the Adjudicating Authority erred in refusing to grant certain claimed reliefs and concessions without consideration or reasons and whether paragraph 14 of the order (deeming unspecified reliefs as not granted) was impermissible. - HELD THAT: - The adjudicating authority considered the reliefs and concessions contained in the application and dealt with the relevant requests in the table in paragraph 13; paragraph 14 was a clarificatory provision stating that any reliefs not mentioned in the table were deemed not granted while preserving the applicant's right to approach appropriate authorities. For specific prayers relating to waiver of statutory dues (water/electricity), the order correctly directed the applicant to seek relief from respective authorities since such waivers cannot be granted contrary to the e-auction note and statutory scheme. Thus the adjudicating authority did not decline reliefs without consideration or reasons, and paragraph 14 is not liable to be set aside. [Paras 16, 17, 18]

No error in the adjudicating authority's treatment of claimed reliefs; paragraph 14 is clarificatory and the refusal of certain concessions conforms to the statutory and contractual framework.

Final Conclusion: The appeal is dismissed: the adjudicating authority correctly confined extinguishment of liabilities to the liquidation commencement (cut-off) date in accordance with the e-auction terms and the IBBI (Liquidation Process) Regulations, 2016, and correctly dealt with the claimed reliefs and concessions; paragraph 14 is a valid clarificatory provision and no interference is warranted.

Approval of Resolution Plan - Vesting of assets free and clear of encumbrances - Enforcement of approved resolution plan by application to the Adjudicating Authority - Assistance of local district administration for implementation of resolution plan - Liberty to invoke statutory remedy

Vesting of assets free and clear of encumbrances - Approval of Resolution Plan - Effect of the Adjudicating Authority's approval order on encumbrances and impediments to enforcement of the resolution plan - HELD THAT: - The Tribunal noted that the Adjudicating Authority's impugned order expressly provides that from the Plan Approval Date all assets of the corporate debtor shall vest in the successful resolution applicant "free and clear of all Encumbrances, other than Encumbrances required to be assigned." The Tribunal treated that provision as directly addressing the relief sought by the appellant to lift attachments and remove embargoes affecting enforcement. In light of this operative direction in the impugned order, the Tribunal concluded that the Adjudicating Authority has already provided the statutory protection envisaged upon approval of the resolution plan and that the appellant's grievance about attachments impeding enforcement is to be addressed in that statutory framework.

The approval order vests assets in the resolution applicant free of encumbrances to the extent stated, and the impugned order materially addresses the enforcement obstacles relied upon by the appellant.

Enforcement of approved resolution plan by application to the Adjudicating Authority - Assistance of local district administration for implementation of resolution plan - Liberty to invoke statutory remedy - Appropriate remedy and forum for the appellant to seek removal of attachments or other impediments to implementation of the resolution plan - HELD THAT: - The Tribunal relied on sub regulation (8) of Regulation 39 of the Insolvency Board's Regulations, 2016, which contemplates that a person in charge of management or control after plan approval may apply to the Adjudicating Authority for assistance in implementing the terms of a resolution plan. The Tribunal held that the appellant seeking enforcement or lifting of attachments must invoke that statutory route before the Adjudicating Authority. Accordingly, rather than granting the relief directly in the appeal, the Tribunal granted the appellant liberty to file an appropriate application under sub regulation (8) read with the operative clause (i) of the impugned judgment, and directed that any such application shall be adjudicated by the Adjudicating Authority in accordance with law.

The appellant is required to seek enforcement relief by filing an application under Regulation 39(8) (read with the impugned order), and the Adjudicating Authority shall decide such application in accordance with law; the appeal is disposed subject to that liberty.

Final Conclusion: The Company Appeal is disposed of by granting the appellant liberty to file an appropriate application under sub regulation (8) of Regulation 39 of the IBBI Regulations, 2016 read with the operative clause of the impugned order for removal of attachments/impediments to enforcement; any such application shall be decided by the Adjudicating Authority in accordance with law.

Summary order. Ex-parte stay not granted; application disposed of. Appellant granted three months' time to deposit the demand for the normal period.

Summary order. Special Leave Petition disposed of as the tax effect in the matter is below the monetary threshold prescribed by the Revenue Division Circular dated 6 August 2024; questions of law are left open. Permission granted to withdraw the impleadment application to enable the respondent to pursue available remedies in law. Pending applications, if any, stand disposed of.

Renting of immovable property as a taxable service - Cenvat credit - input service - use of rented premises for furtherance of business or commerce - distinction between rent paid and job-work services

Renting of immovable property as a taxable service - Cenvat credit - use of rented premises for furtherance of business or commerce - distinction between rent paid and job-work services - Entitlement to Cenvat credit for rent paid on premises used by job workers where machinery and raw material belonged to the manufacturer and the premises were used for manufacture and handover to the manufacturer. - HELD THAT: - The Court examined the statutory definition of taxable service under the category of renting of immovable property and the definition of "input service". It held that Cenvat credit for rent paid is available only where the service is in relation to renting of immovable property and the rented property is used for the furtherance of business or commerce. On the admitted facts the manufacturer had shifted his machinery to the rented premises, supplied raw material and contracted with job workers to perform manufacturing there and hand over finished goods to the manufacturer. The premises were thus made available to the job workers for performance of work and were used for the furtherance of the manufacturer's business. The appellate authorities below failed to consider this aspect and instead confined their examination to the definition of job workers, thereby overlooking that the claim was for rent paid for the premises and not for job-work services. For these reasons the Court found the impugned orders perverse and unsustainable. [Paras 6, 8, 9, 10]

The appeal is allowed; the order of the CESTAT dated 28.04.2014 is set aside insofar as it denied Cenvat credit for the rent and the appellant is held entitled to the claimed Cenvat credit; remaining parts of the CESTAT order to remain intact.

Final Conclusion: The High Court allowed the appeal, set aside the CESTAT order insofar as it denied Cenvat credit on rent of premises utilised by job workers for manufacture using the appellant's machines and raw material, and directed that the appellant is entitled to the claimed Cenvat credit; other aspects of the CESTAT order remain unchanged.

Liability of directors of a private company on winding up - recovery of tax dues as arrears of land revenue - issuance of recovery certificate against director without statutory basis - statutory appeal as alternative remedy versus writ jurisdiction

Liability of directors of a private company on winding up - issuance of recovery certificate against director without statutory basis - Validity of recovery proceedings and recovery notice issued against a director where assessment and demand related to the company and no winding up order existed - HELD THAT: - The Court examined sub Section (1) of Section 12 of the Uttarakhand Value Added Tax Act, 2005 and held that the statutory liability of directors of a private company to meet company dues arises only where the private company is wound up after commencement of the Act. No order of winding up was produced in the record. The recovery certificate and demand notice treating the company's tax dues as arrears of land revenue and directed against the appellant (a director) therefore had no statutory foundation. In these circumstances, issuance of the recovery certificate and notice by the third respondent against the appellant was unjustified and unlawful. [Paras 7, 8]

Recovery certificate and demand notice issued against the director quashed as there was no winding up and hence no statutory basis to fasten liability on the director.

Statutory appeal as alternative remedy versus writ jurisdiction - recovery of tax dues as arrears of land revenue - Whether the High Court correctly dismissed writ petition at admission for want of alternate statutory remedy and failed to appreciate illegality of recovery proceedings against the director - HELD THAT: - The High Court had held that the appellant had an alternative remedy under the appeal provisions and under the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 to challenge the recovery certificate. The Supreme Court found that the High Court ignored the crucial lack of statutory basis for recovery from the director and the absence of a winding up order; an attempt from the inception to recover the company's tax from the appellant was illegal. Consequently, directing the appellant to invoke the statutory remedy without addressing the unlawfulness of the recovery notice was erroneous. The Court therefore set aside the orders of the Single Judge and Division Bench and quashed the recovery notice. [Paras 4, 8, 9]

High Court orders set aside; writ succeeds because the recovery notice against the director was illegal and could not be sustained merely by pointing to alternate statutory remedies.

Final Conclusion: The appeal is allowed. The recovery notice dated 6th June, 2019 issued against the appellant is quashed and set aside, as liability of directors of a private company under the Act arises only on winding up and no winding up order existed; the High Court's reliance on alternate remedies without addressing this illegality was erroneous.

Waiver of tax under executive memorandum - concessional rate under Central Sales Tax (CST) scheme subject to production of C Forms - re assessment limitation under Rule 14(A) sub rules (8), (9) & (15) of the CST (Andhra Pradesh) Rules, 1957 - production of documentary proof of inter state movement (lorry/rail receipts, CST waybills, proof of exit) - requirement of completion of assessment and payment before cutoff date - administrative discretion to implement waiver without reopening assessments - factual enquiry by assessing authority into documentary compliance

Waiver of tax under executive memorandum - administrative discretion to implement waiver without reopening assessments - Whether the waiver ordered by the Government under the memos can be given without any re assessment or appellate order. - HELD THAT: - The Court observed that the memos envisaged waiver of tax already assessed by permitting dealers who can produce required documents of movement to be relieved of the tax over and above 2%. The memos expressly conditioned waiver on completion of assessment and payment but contemplated giving effect to waiver where assessments had already levied tax at higher rates. Consequently, the waiver can be implemented by the taxing authorities without initiating re assessment or requiring appellate modification of earlier assessment orders. The Court held that no re assessment or appellate order is necessary to give effect to the executive waiver. [Paras 22, 23]

The waiver may be granted and given effect to by the taxing authorities without any re assessment or appellate order.

Production of documentary proof of inter state movement (lorry/rail receipts, CST waybills, proof of exit) - requirement of completion of assessment and payment before cutoff date - Whether the cutoff date prescribed in the memos applied to the production of documentary evidence required for grant of waiver. - HELD THAT: - A plain reading of the terms and conditions in the memo dated 27.09.2016 shows that the cutoff date is specified in relation to remittance of tax and completion of assessment for the period 01.06.2014 to 31.12.2015. The memos do not prescribe any cutoff date for production of lorry receipts, railway receipts, CST waybills or proof of exit. Therefore the taxing authorities' contention that such documents must have been produced before the cutoff date was rejected by the Court. [Paras 19, 20]

The cutoff date in the memos does not bar production of the documentary evidence required for waiver after that date.

Factual enquiry by assessing authority into documentary compliance - re assessment limitation under Rule 14(A) sub rules (8), (9) & (15) of the CST (Andhra Pradesh) Rules, 1957 - Whether non production of documents is a matter of fact to be determined by the assessing authorities and whether applications filed after the limitation for re assessment can be considered. - HELD THAT: - The Court held that the question of whether the petitioners have produced the documents contemplated by the memos is a question of fact for the assessing authorities to examine. While the taxing authorities relied on the limitation for re assessment under Rule 14(A) sub rules (8), (9) & (15), the Court found that the exercise before the authorities is to ascertain eligibility for executive waiver, not to reopen assessments necessarily. Accordingly, the Court directed fresh consideration of the applications by the authorities to verify documentary compliance and determine entitlement to waiver. The Court also addressed the equitable dimension of delay, noting that some applications were filed earlier and that similar treatment should be accorded in remand proceedings. [Paras 23, 26]

Non production is a factual matter for the assessing authorities to decide on fresh consideration; applications shall be reconsidered notwithstanding expiry of re assessment period insofar as the waiver can be given without re assessment.

Final Conclusion: Endorsements rejecting waiver applications were set aside; the assessing authorities are directed to reconsider the petitioners' applications afresh and grant waiver to those who comply with the memos' documentary requirements, to complete the exercise within two months, and to refrain from coercive action based on earlier assessments until decision on waiver is rendered.

Scheme of Arrangement and allocation of liabilities (Clause 7.1) - Contingent liabilities and litigations arising before the Effective Date - Return of unutilised land under Section 101 of the 2013 Act - Requirement of payment prior to taking possession under Section 38 of the 2013 Act - Agreement with appropriate Government under Section 41 of the 1894 Act - Duty of State under Article 300-A to ensure payment of compensation

Scheme of Arrangement and allocation of liabilities (Clause 7.1) - Contingent liabilities and litigations arising before the Effective Date - Liabilities in respect of acquisition proceedings and related claims that arose before the Effective Date of the Scheme remain with JAL and were not transferred to the Appellant. - HELD THAT: - Clause 7.1 of the Scheme unambiguously provides that all legal or other proceedings by or against JAL relating to the JAL Business, initiated on or arising and pending before the Effective Date (29.06.2017), shall remain with JAL. The acquisition of the subject land commenced in 2008 and the compensation remained undetermined as on the Effective Date. The acquisition proceedings thus fall within the ambit of 'other proceedings' retained by JAL. JAL also paid the Award of 2018 post-Effective Date without protest, and cannot now contend that such liabilities were transferred to the Appellant. The Court rejected the contention that the subject land, though acquired for the cement project, resulted in fastening the Supplementary Award liability on the Appellant where the Scheme did not effect such transfer of liability. [Paras 26, 27, 28, 29, 31]

The liability for proceedings and claims arising before the Effective Date remains with JAL and was not transferred to the Appellant under the Scheme.

Requirement of payment prior to taking possession under Section 38 of the 2013 Act - Agreement with appropriate Government under Section 41 of the 1894 Act - The Appellant cannot be directed to pay the Supplementary Award; the State must ensure payment to landowners and may recover the amount from JAL as the ultimate obligor. - HELD THAT: - Section 38 of the 2013 Act contemplates payment of full compensation as a precursor to taking possession; Section 41 of the 1894 Act envisages that companies for whose benefit land is acquired must enter agreements to pay acquisition costs. The High Court's direction to make the Appellant pay in the first instance was unsustainable: the Scheme did not transfer these liabilities to the Appellant, and ownership of the subject land remained with JAL. Given the State's statutory and constitutional obligations, the Court directed the State and the Land Acquisition Collector to pay the Supplementary Award to the landowners expeditiously and to recover the amount from JAL, who bears the ultimate liability. [Paras 41, 42, 56, 58]

The Appellant is not liable to make the payment; the State (Respondent Nos. 7 and 10) shall pay the Supplementary Award to the landowners and recover the amount from JAL.

Return of unutilised land under Section 101 of the 2013 Act - Section 101 does not permit return of the subject land to original owners because the land has not remained unutilised for the statutory period; it continues to serve as a safety zone. - HELD THAT: - Section 101 applies where land acquired remains unutilised for five years from taking possession. Although more than five years elapsed since possession, the condition of being 'unutilised' is not satisfied here: the subject land was acquired and retained as a safety zone connected to the cement/mining activities and hence has been in use to serve that purpose. Consequently, JAL's plea for return of land and refund of compensation fails; moreover, allowing return would imperil safety objectives for which acquisition was made. [Paras 34, 36, 38, 39]

The land cannot be returned under Section 101 because it has not remained unutilised; the plea for return and refund is rejected.

Duty of State under Article 300-A to ensure payment of compensation - Requirement of payment prior to taking possession under Section 38 of the 2013 Act - The State, as a welfare State, has a duty under Article 300-A and the statutory scheme to ensure expeditious payment of compensation and must not abdicate responsibility; it should make payment and recover from the company ultimately liable. - HELD THAT: - The Court reiterated that the right to property entails corresponding duties on the State to inform, hear, and ensure fair compensation expeditiously. Invocation of emergency powers under Section 17(4) imposes further duty to protect landowners' rights. The State failed to ensure completion of the statutorily mandated sequence (payment before possession) and did not proactively secure payment of the Supplementary Award. In these circumstances, the State must discharge the payment obligation to the landowners forthwith and may pursue recovery from JAL; otherwise landowners would be impermissibly deprived of their rights. [Paras 43, 48, 50, 56]

The State is directed to pay the compensation to the landowners forthwith and is entitled to recover the amount from JAL.

Final Conclusion: The appeal is allowed; the High Court order directing the Appellant to pay the Supplementary Award is set aside. The State of Himachal Pradesh and the Land Acquisition Collector are directed to pay the Supplementary Award amount with interest to the landowners within the prescribed time, and the State may recover the total from JAL, which remains ultimately liable; the Appellant is not made liable to pay the amount.