TaxTMI Updates e-Newsletter
Oct 03,2026

Maintainability of Writ jurisdiction under Article 226 - assailing the show cause notice under Section 74 of the Central Goods and Service Tax Act - wrongful utilization of excess ITC from a non-existent firm - efficacious statutory appellate remedy - Error apparent on the face of the record - Clerical or arithmetical error- breach of fundamental rights - violation of natural justice - excess of jurisdiction, or challenge to vires.

HELD THAT:- The special leave petition was disposed of without interference with the High Court's order[2026 (4) TMI 941 - DELHI HIGH COURT], while extending the limitation period until 16th October, 2026 for availing the alternative remedy.

Violation of Natural justice - ex parte GST adjudication without notice of subsequent hearing

HELD THAT: - The Court found the facts to be similar to the coordinate Bench decision M/S SHUBHAM STEEL TRADERS [2024 (2) TMI 1180 - ALLAHABAD HIGH COURT] concerning an ex parte order where the matter was not decided on the date fixed for hearing and the subsequent date was not communicated. It followed that view and found no reason to take a different view. [Paras 5]

The impugned adjudication order was quashed, and the authority was directed to afford a personal hearing and thereafter pass a reasoned order in accordance with law.

Final Conclusion: The ex parte GST adjudication order was quashed, with a direction to grant personal hearing and pass a reasoned order in accordance with law.

Premature writ challenge to GST show cause notice - Consideration of audit objections in statutory adjudication - Interference with a GST demand-cum-show cause notice on the ground that the assessee's reply at the audit stage was inadequately considered

HELD THAT: - A show cause notice merely initiates the statutory adjudicatory process and does not determine liability. Although the statutory requirement to consider the registered person's reply must be complied with, the notice referred to the reply and recorded it as unsatisfactory. The adequacy of that consideration, along with the objections concerning the audit, limitation, computation and treatment of the deposit, was held to be for independent examination by the Adjudicating Authority. [Paras 24, 25, 26, 29, 31]

The Court declined to interdict the show cause notice and permitted the assessee to urge all objections before the Adjudicating Authority.

Final Conclusion: The writ petition was disposed of without interference with the show cause notice, leaving all substantive objections open for statutory adjudication. The related contempt proceedings were closed.

Scope of "any person" for penalty on fraudulent invoice and input tax credit transactions - Prospective operation of penalty for fraudulent invoice and input tax credit transactions - Writ jurisdiction despite statutory appeal against GST penalty orders

Personal penalty on non-taxable beneficiaries of specified transactions - expression "any person" in Section 122(1A) is not confined to a taxable person - HELD THAT: - Section 122(1A) deliberately employs "any person" in contrast with the expressions "taxable person" and "registered person" used elsewhere in Section 122. Liability arises only after a specified contravention under Section 122(1) is established and upon independent proof of both cumulative conditions: that the person retained the benefit of the transaction and that it was conducted at that person's instance. Restricting the provision to the registered taxable entity would defeat its object of reaching persons who orchestrate and benefit from transactions conducted through juridical entities. [Paras 27, 28, 29, 30, 37]

The penalty may extend to a person who is neither registered nor liable to be registered, provided both statutory conditions are proved.

Prospective application of penalty u/s 122(1A) - applicability of Section 122(1A) is governed by the date of the underlying act or transaction and not by the date of the show cause notice - HELD THAT: - The simultaneous amendments to Sections 122 and 132 brought the civil and criminal consequences for substantially corresponding fraudulent transactions into statutory alignment. Though the consequence under Section 122(1A) is monetary, it remains penal in character and must bear a nexus to the date of the underlying contravention. Making its applicability depend on the date of a subsequent show cause notice would permit identical past transactions to attract different consequences solely because of administrative timing and would confer retrospective operation without clear legislative authority. [Paras 47, 48, 49, 50, 51]

Section 122(1A) applies only to acts or transactions occurring on or after 01.01.2021, subject to satisfaction of its twin statutory requirements.

Exercise of writ jurisdiction despite alternative statutory remedy - availability of a statutory appeal did not preclude determination of the recurring legal questions concerning Section 122(1A) - HELD THAT: - The petitions raised substantial, purely legal questions of general application on which divergent High Court views existed. The Court therefore exercised writ jurisdiction to settle those questions, while leaving the fact-specific issues of retention of benefit, conduct of the transaction at the person's instance, and the dates of the alleged transactions for appellate determination. [Paras 53, 54]

The legal questions were determined in writ jurisdiction, with the petitioners left to pursue statutory appeals for adjudication of the individual facts.

Final Conclusion: The petitions were disposed of after declaring that Section 122(1A) can extend beyond taxable persons only upon proof of its two cumulative conditions, and only for underlying acts or transactions occurring from 01.01.2021. The petitioners were left to pursue statutory appeals for fact-specific determination under the declared law.

Hookah service in Designated Smoking Areas

Hookah service in Designated Smoking Areas - Interpretation of prohibition on service - Whether the post-2017 prohibition on service in a restaurant's Designated Smoking Area permits provision of hookah through a self-service or rental model? - HELD THAT: - The exception permitting a smoking area must be construed narrowly in furtherance of the public-health object of the statutory prohibition on smoking in public places. By substituting "no other service" with "no service", the 2017 amendment imposed an absolute prohibition on every service within a Designated Smoking Area, including hookah service.

The preparation, provision, operation and maintenance of hookah for consideration constitute a service; its consumption requires apparatus and technical assistance unlike the smoking of a cigarette. A purported self-service arrangement cannot alter that character, and the patron does not obtain the unrestricted possession and control necessary to characterise the arrangement as a rental. [Paras 53, 54, 55, 56, 58]

Rendering hookah service in a Designated Smoking Area is absolutely prohibited, and operation of hookah bars by restaurants in such areas contravenes Rule 4(3) of the Rules.

Jurisdiction to license hookah bars - Whether food-safety and municipal authorities have jurisdiction to regulate or issue licences for hookah smoking or hookah bars? - HELD THAT: - Food-safety legislation governs food intended for human consumption and does not extend to tobacco products, which are neither primary food nor consumed for nutritional value. The municipal framework contains no provision for issuance of a separate hookah licence. [Paras 34]

The Food Safety Department and Municipal Corporation have no jurisdiction to regulate or issue licences for hookah bars.

Police enforcement of tobacco-control requirements - Whether police authorities may enforce compliance with the statutory restrictions on smoking and sale of tobacco products in restaurants? - HELD THAT: - The statutory scheme confers enforcement powers upon police authorities to secure compliance with the prohibitions governing smoking in public places and sale of tobacco products to minors, including powers of search, seizure, confiscation and imposition of penalty in accordance with law. [Paras 35]

The challenge to the police authorities' power to enforce compliance with the statutory requirements was rejected.

Final Conclusion: The writ petitions were dismissed. Restaurants cannot operate hookah bars or render hookah services in Designated Smoking Areas; food-safety and municipal authorities lack hookah-licensing power, while police authorities may enforce statutory compliance.

Enforcement of judicial undertaking for prior notice of arrest - Prior communication of Commissioner's arrest authorisation under CGST Act

Commencement of arrest by actual restraint - Twenty-four-hour production before Magistrate - Computation of the twenty-four-hour period for producing the petitioner before the Magistrate following the CGST search and inquiry - HELD THAT: - The commencement of arrest must be determined by actual deprivation of liberty and assumption of custody, and not conclusively by the time recorded in the arrest memo. However, custody does not invariably amount to arrest. The material did not disclose physical or coercive restriction of movement, withdrawal of phone access, or prevention of departure before the recorded arrest; the petitioner's contemporaneous bail plea also stated that arrest occurred at 11:30 P.M. Mere presence during search and inquiry, including recording of a statement, therefore did not establish an earlier arrest. [Paras 8, 9]

The twenty-four-hour period ran from the arrest at 11:30 P.M., and production before the Magistrate complied with the constitutional and statutory mandate.

Judicial undertaking of prior notice of arrest - Distinction between summons and arrest notice under CGST Act - Compliance with the recorded undertaking to give seven working days' prior notice before arrest. - HELD THAT: - The assurance recorded in the earlier judicial order was categorical and was not conditional upon the petitioner's cooperation with the inquiry. A summons under the CGST Act requiring attendance, evidence or documents is an investigative measure; it neither conveys that arrest has become necessary nor operates as notice of intended exercise of the distinct power of arrest. Since the summonses did not communicate that arrest was contemplated or would follow after seven working days, the passage of time after their service could not amount to compliance with the undertaking. [Paras 10]

The arrest was effected in breach of the judicially recorded undertaking, as no distinct seven-working-day notice of arrest was given.

Prior communication of Commissioner's arrest authorisation - Reasons to believe for CGST arrest - Validity of arrest under the CGST Act in the absence of prior communication of the Commissioner's reasoned authorisation - HELD THAT: - The statutory order authorising arrest must embody the Commissioner's reasons to believe, disclose the underlying material and evidence, evince application of mind, and be communicated before arrest so that the affected person may seek pre-arrest relief and challenge the stated reasons. An arrest memo merely reciting that the Commissioner had reasons to believe and that an officer was authorised cannot substitute for the statutory order. Neither the actual order nor the recorded reasons and foundational material were produced, and prior communication thereof was not established. [Paras 11]

The arrest was vitiated ab initio; subsequent remand orders could not cure the defect, and the petitioner was directed to be released unless custody was otherwise warranted in accordance with law.

Final Conclusion: While the petitioner's production before the Magistrate was held to be within time, the petition was allowed because the arrest breached the undertaking of prior notice and was effected without prior communication of the Commissioner's reasoned authorisation.

Mandatory personal hearing before adverse GST order

Requirement of granting personal hearing before passing an adverse order under the UKGST Act despite the assessee not opting for such hearing on the online portal - HELD THAT: - Noting that no date for personal hearing had been fixed, the Court held that the Department was obliged to afford an opportunity of hearing before passing an adverse order. The petitioner's non-selection of personal hearing on the portal did not dispense with that obligation. See M/s Mohini Traders vs. State of U.P. and another [2023 (6) TMI 531 - ALLAHABAD HIGH COURT] [Paras 4, 5]

The impugned order was quashed, with liberty to the Department to pass a fresh order after providing an opportunity of hearing.

Final Conclusion: The adverse order for Financial Year 2020-21 was quashed for failure to afford a personal hearing, with liberty to pass a fresh order after granting such opportunity.

Suspension and cancellation of GST registration - exhaustion of statutory remedies

Maintainability of the writ petition against the intimation suspending registration and proposing its cancellation, without filing pending returns or furnishing a reply before the Proper Officer - HELD THAT: - The statutory scheme permits revocation of suspension on completion of cancellation proceedings and requires the Proper Officer to drop such proceedings where the reply is satisfactory; where cancellation is proposed for the specified contraventions, proceedings are also required to be dropped upon furnishing pending returns and making full payment of tax dues, interest and late fee. The petitioner had neither availed the available remedy before the Proper Officer by filing the returns or reply nor pursued an appeal against the intimation. [Paras 11, 12, 13]

The writ petition was not entertained, with liberty to the petitioner to approach the Proper Officer in terms of the impugned intimation.

Final Conclusion: The writ petition challenging the suspension and proposed cancellation of GST registration was not entertained for non-exhaustion of the available remedies before the Proper Officer.

Cross-empowerment under GST - Effect of absence of notification imposing conditions

Cross-empowerment of Central and State GST officers for intelligence-based enforcement action in the absence of a notification imposing conditions under Section 6 of the CGST Act - HELD THAT: - The statutory scheme permits cross-empowerment. A notification contemplated under Section 6(1) is intended to impose conditions upon that power and is not a condition precedent to its exercise; consequently, non-issuance of such notification does not render the provision inoperative or fetter the power of cross-empowerment. The applicability of the protection against duplicate proceedings and the manner in which overlapping inquiries are to be dealt with must be determined in accordance with the binding conclusions and guidelines of the Supreme Court. [Paras 9, 11, 13]

The writ-court orders were set aside and the remaining matters were remanded for disposal in accordance with the Supreme Court's conclusions and guidelines.

Final Conclusion: One appeal was closed as no issue survived. The remaining writ appeals were allowed, the writ-court orders were set aside, and the matters were remanded for fresh disposal in accordance with the applicable Supreme Court conclusions and guidelines.

Demand beyond show-cause notice under GST - scope of Section 75(7) of the Goods and Services Tax Act, 2017 -

HELD THAT: - Section 75(7) prohibits an order from demanding tax, interest and penalty in excess of the amount specified in the notice, and from confirming a demand on grounds other than those specified therein. The impugned demand, being substantially in excess of the composite demand proposed in the show-cause notice, was ex facie contrary to that statutory limitation. [Paras 8, 9, 10]

The impugned order was quashed for violation of Section 75(7), and the matter was remanded for a fresh order after permitting a response to the notice and affording a hearing.

Final Conclusion: The writ petition was allowed. The demand order was set aside and the matter remanded for fresh adjudication in accordance with law.

Opportunity of hearing in GST appellate proceedings - disposal of the GST appeal where no hearing was afforded after issuance of a subsequent hearing notice

HELD THAT: - Following transfer of the appeal, a fresh hearing notice was issued and an adjournment was sought on the scheduled date. As no hearing was held thereafter, while the impugned order was passed pursuant to an earlier hearing, the appeal required reconsideration after affording the petitioner an opportunity of hearing. [Paras 6]

The appeal was remanded to the appellate authority for fresh decision after granting an opportunity of hearing to the petitioner.

Final Conclusion: The writ petition was disposed of by remitting the appeal for fresh decision after affording the petitioner a hearing.

Electronic service after cancellation of GST registration - Opportunity of hearing in GST adjudication - Validity of ex parte GST adjudication where the show-cause notice, issued after cancellation of registration, was served only through the Common Portal

HELD THAT: - After cancellation of registration, the registered person may neither access nor remain obliged to access the Common Portal and may consequently remain unaware of proceedings initiated thereafter. The Commissioner's binding circular required physical service of notice where adjudication proceedings were initiated after cancellation of registration. Service solely through the portal therefore deprived the petitioner of awareness and effective opportunity to contest the proceedings. [Paras 5, 6]

The ex parte adjudication order was set aside, with liberty to file a final reply and seek relied-upon documents or cross-examination; the adjudicating authority was directed to decide such requests, afford adequate prior notice of personal hearing, and pass a reasoned order afresh.

Final Conclusion: The writ petition was disposed of by setting aside the ex parte adjudication and directing fresh adjudication after affording the petitioner an effective opportunity of reply and hearing.

Input tax credit claimed in belated GSTR-3B returns - Reconsideration under inserted Section 65 of the CGST/KGST Act

HELD THAT: - In view of the insertion of Section 65 and the admitted position that the returns had been filed before the cut-off envisaged by that provision, the claim required re-examination under the inserted provision. [Paras 4]

The adjudication order and consequential garnishee notice were quashed, and the proceedings were restored to the stage of response to the show-cause notice for fresh consideration.

Final Conclusion: The petition was allowed in part by quashing the impugned adjudication order and consequential garnishee notice and restoring the proceedings for reconsideration under the inserted provision.

Retention of seized mobile phones and bank debit cards beyond six months - Continued detention of seized mobile phones and bank debit cards in the absence of an order extending the seizure

HELD THAT: - It was conceded that no order extending the seizure had been made. Consequently, under Section 67(7) of the CGST Act, the articles could no longer be retained under seizure. [Paras 3, 4]

The Investigating Officer was directed to forthwith return the seized articles to the petitioner upon production of a certified copy of the order and acknowledgement.

Final Conclusion: The writ petition was disposed of with a direction for immediate release of the seized mobile phones and bank debit cards, as no order extending their seizure existed.

Blocking of input tax credit - Genuineness of supplier transactions - Continuation of blocked input tax credit claimed on invoices of an allegedly fictitious supplier - HELD THAT: - The material on record undermined the contention that no prior opportunity had been given. However, the assertion that the supplier was registered and that the transactions could be supported by valid invoices and banking-channel payments warranted an opportunity for the petitioner to submit a detailed response and supporting documents. The Court did not adjudicate the genuineness of the transactions or direct automatic unblocking of the credit. [Paras 3, 4]

The petitioner was permitted to file its response and documents, and the authority was directed to consider them after affording an opportunity and decide whether the blocking of input tax credit should continue.

Final Conclusion: The petition was allowed in part, with liberty to contest the blocking through a detailed response; the blocked input tax credit was not automatically unblocked.

Validity of reassessment proceedings - period of limitation - HELD THAT: - There is a gross delay of 840 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioner.

Even otherwise, we find no good ground to interfere with the impugned order passed by the High Court [2023 (2) TMI 1469 - GUJARAT HIGH COURT]

Mandatory procedure under Section 144C - Draft assessment order u/s 144C - Dispute Resolution Panel powers and change of forum - Final assessment order passed without draft - nullity - Distinction between Section 144B and Section 144C - Limitation for completion of assessment under Section 153 - Effect of remand on limitation and Courts' power to direct fresh assessment

HELD THAT:- There is an inordinate delay in filing the Special Leave Petition(s) which has not been satisfactorily explained by the petitioner.

Even otherwise, we find no good ground to interfere with the impugned order passed by the High Court.[2024 (9) TMI 157 - DELHI HIGH COURT]

Special Leave Petitions are, therefore, dismissed on the ground of delay as well as merits.

Unexplained cash-deposit addition based on subsequent-financial-year transactions - Non-consideration of material revisional ground

Validity of the unexplained cash-deposit addition for Assessment Year 2022-23 where cash and transfer entries from a subsequent financial year were considered without proper consideration of the assessee's challenge in revision - HELD THAT: - The assessment for Assessment Year 2022-23, relating to Financial Year 2021-22, included cash and transfer entries pertaining to a period subsequent to that financial year. The Court held that the specific challenge raised in revision concerning consideration of those entries went to the root of the matter and had not been dealt with in proper perspective, thereby vitiating the assessment and revisional orders. [Paras 16, 18, 19]

The assessment and revisional orders were set aside and the matter remitted to the assessing authority for a fresh order within two months, with the merits left open.

Final Conclusion: The writ petition was disposed of by setting aside the assessment and revisional orders for Assessment Year 2022-23 and remitting the matter for fresh determination in accordance with law, without treating the Court's observations as an expression on the merits.

Condonation of delay - sufficient cause - delay of 2628 days in preferring the appeal - Dismissal of defective appeal as time-barred - Condonation of inordinate delay in filing the appeal before the Tribunal where no condonation application was filed and the appeal defects remained unrectified - HELD THAT: - The appellant failed to furnish any satisfactory explanation or establish sufficient cause for the delay. Its plea of absence of knowledge of the Tribunal proceedings was belied by adjournment applications filed on its behalf. The continued failure to cure the appeal defects and the conduct in not pursuing the appeal justified the Tribunal's conclusion that the appeal could not be entertained. [Paras 14, 16, 17, 18, 19]

The Tribunal's dismissal of the appeal as time-barred was upheld.

Final Conclusion: The appeal was dismissed, the Court finding no reason to interfere with the Tribunal's dismissal of the defective and time-barred appeal.

Government securities held to maturity as bank stock-in-trade - Bad-debt write-off for non-rural bank advances

Government securities held to maturity as bank stock-in-trade - Revaluation loss on bank investment securities - Deductibility of revaluation loss on Government securities held by a bank to maturity - HELD THAT: - The Court treated the issue as governed by the settled position in KARUR VYSYA BANK LTD. [2004 (7) TMI 52 - MADRAS HIGH COURT] that Government securities held by a bank constitute stock-in-trade. Consequently, their valuation at market value or cost, whichever is lower, warranted allowance of the revaluation loss. [Paras 4, 5]

The question was answered in favour of the assessee and the revaluation loss was allowable.

Bad-debt write-off for non-rural bank advances - Proviso to section 36(1)(vii) and rural advances - Allowance of bad debts actually written off in respect of non-rural advances despite the provision for bad and doubtful debts relating to rural advances - HELD THAT: - Applying the governing decisions Karur Vysya Bank Ltd. [2026 (6) TMI 611 - MADRAS HIGH COURT] applying the judgement in Catholic Syrian Bank Ltd. [2012 (2) TMI 262 - SUPREME COURT] the Court accepted that the proviso to section 36(1)(vii), intended to prevent double deduction in respect of rural advances covered by the provision for bad and doubtful debts, does not restrict deduction for debts actually written off from non-rural advances. [Paras 6]

The questions concerning bad-debt deduction were answered in favour of the assessee.

Final Conclusion: The Tax Case (Appeal) was dismissed, with all the questions of law answered in favour of the assessee.

Tax appeals maintainability - non-adjudication of substantial questions pending Supreme Court insolvency proceedings

Adjudication of the admitted substantial questions in the tax appeals in view of the pending Supreme Court proceedings concerning the settlement plan and the Department's claim - HELD THAT: - The Court noted that the Department's claim had neither been extinguished, compromised nor adjudicated in the settlement proceedings and that its interests stood protected through attachment of assets and deposit of the sale proceeds under the Supreme Court's orders. As the Department was required to establish its claim in those pending proceedings, no occasion arose to decide the substantial questions raised in the appeals. [Paras 6, 7]

The substantial questions were returned unanswered and the appeals were disposed of, with liberty to the parties to seek revival if necessary.

Final Conclusion: The appeals were disposed of without answering the admitted substantial questions of law, since the Department's claim was to be established in the pending Supreme Court proceedings and its interests stood protected.

Reassessment based on erroneous PAN mapping - Colourable exercise of reassessment power

Validity of reassessment proceedings founded on an alleged share transaction erroneously mapped to the petitioner's PAN - HELD THAT: - The Revenue categorically admitted that the information forming the foundation of the reassessment related to another person and had been inadvertently mapped to the petitioner's PAN. The Assessing Officer had nevertheless initiated proceedings without receiving verification, merely to avoid limitation. Reassessment power cannot be invoked to overcome limitation where the foundational information is unrelated to the assessee; such action was held to be a colourable exercise of power and wholly unsustainable in law. [Paras 9, 11]

The impugned reassessment order and consequential notice were quashed, with costs.

Final Conclusion: The writ petition was allowed and the reassessment proceedings founded on the erroneous PAN mapping were quashed, with costs.

Transfer pricing comparables - exclusion as a factual determination - Appellate interference with factual findings

Exclusion of Persistent Systems Ltd. and Larson & Tourbo Infotech Ltd. as transfer-pricing comparables - HELD THAT: - Selection or exclusion of comparables is a factual and data-driven exercise required to conform to Rule 10B. The Revenue failed to place material showing that the Tribunal's exclusion of the two companies was contrary to the settled legal position or vitiated by perversity.

Tribunal placing reliance on the decision of Evolving Systems Network (I) P. Ltd. [2019 (2) TMI 1380 - ITAT BANGALORE] excluded Persistent Systems Ltd and Larson & Tourbo Infotech Ltd., from 10 comparable companies. The appellant-revenue has failed to place material on record to establish how the Tribunal could not have excluded those two comparables and the appellant-revenue has also failed to point out the perversity in the order of the Tribunal. [Paras 3, 4]

The exclusion of the two comparables was sustained and the substantial questions of law were answered in favour of the assessee.

Final Conclusion: The appeal was disposed of by answering the substantial questions of law in favour of the assessee and against the Revenue.

Commission payments - disallowance for non-deduction of tax - Incidental income of export undertakings

Tax deduction at source on commission payments - Disallowance of commission payments for alleged failure to deduct tax at source under sections 195 and 40(a)(ia) - HELD THAT: - The Court found that the questions concerning the commission payments stood answered by a co-ordinate Bench decision in M/s.Puma Sports India P., Ltd. [2021 (4) TMI 93 - KARNATAKA HIGH COURT] as confirmed by SC [2021 (10) TMI 1384 - SC ORDER] and followed that view without undertaking an independent examination of the nature of the payments. [Paras 5]

The disallowance was not restored, and the first two substantial questions were answered in favour of the assessee and against the Revenue.

Incidental receipts of export undertakings - Treatment of employee recoveries and written-back liabilities of an export undertaking as business income rather than income from other sources. - HELD THAT: - Following the Full Bench ruling in M/S. HEWLETT PACKARD GLOBAL SOFT LTD. [2017 (11) TMI 205 - KARNATAKA HIGH COURT], the Court accepted that income incidental to the export business forms part of the profits and gains of the undertaking and cannot be separately assessed as income from other sources. [Paras 7]

The third and fourth substantial questions were answered in favour of the assessee and against the Revenue.

Final Conclusion: The appeal was disposed of, with all four substantial questions answered in favour of the assessee and against the Revenue.

Statutory deeming fiction for pre-commencement undeclared foreign assets - Assessment in the assessment year succeeding the deemed acquisition

Deemed acquisition of undeclared pre-commencement foreign assets - Assessment year u/s 72(c) of the Black Money Act - Assessment year for foreign assets acquired before commencement of the Black Money Act where no declaration was made under the declaration scheme - HELD THAT: - Section 72(c) creates a self-executing and conclusive fiction that an asset acquired before commencement of the Act, in respect of which no declaration was made, is deemed to have been acquired in the year in which notice under Section 10 is issued.

The deemed year is the previous year; assessment must therefore be made in the immediately succeeding assessment year. As no declaration had been made, Section 72(b) was inapplicable. The first Section 10 notice having been issued in FY/PY 2018-19, the assets could be assessed only in AY 2019-20 and not in AY 2018-19. [Paras 18, 19, 20, 21, 22]

The assessment order and consequential proceedings initiated for AY 2018-19 were without jurisdiction and were quashed.

Final Conclusion: The petition was allowed and the impugned assessment order, together with all consequential proceedings, was quashed.

Deduction for industrial undertakings u/s 80IB - rubber contraceptives manufactured by assessee is an item covered by Entry Nos.27 and 28 of Eleventh Schedule of the Act being a rubber fitting - Consistency in grant of statutory deduction -

HELD THAT: - Following MRF Limited [2025 (4) TMI 329 - MADRAS HIGH COURT] the Court held that the embargo under Entries 27 and 28 applies only to the products specifically described therein and not to every product made of rubber. Rubber contraceptives could not therefore be treated as barred merely because rubber was used in their manufacture. Independently, the Department having accepted the identical claim on the same facts and legal position for nine of the ten eligible years, there was no justification for adopting a contrary view in the year in question. [Paras 9, 10]

The deduction under Section 80IB was held allowable and the substantial questions were answered in favour of the assessee.

Final Conclusion: The appeal was allowed, applying the interpretation of the XI Schedule exclusion and the requirement of consistency in the application of law.

Registration of charitable and religious trusts - Entitlement of a trust having both charitable and religious objects to registration under Section 12AA

HELD THAT: - The statutory scheme does not differentiate between trusts established for charitable purposes and those established for religious purposes for registration. Income from property held under trust wholly for charitable or religious purposes is covered by the exemption provision; consequently, the presence of both charitable and religious objects does not disqualify a trust from seeking registration. Case followed SRI KAMATCHI AMMAN TRUST [2012 (2) TMI 159 - MADRAS HIGH COURT] [Paras 5]

The question was answered in favour of the assessee, and its entitlement to registration under Section 12AA was upheld.

Final Conclusion: The Tax Case Appeal was dismissed, affirming that the assessee trust was entitled to registration under Section 12AA despite having both charitable and religious objects.

Notice u/s 148 issued to deceased assessee - Submission to jurisdiction by legal representative

HELD THAT: - A notice issued under section 148 to a deceased assessee is invalid unless the legal representative submits to the jurisdiction of the Assessing Officer without objection. Subsequent acceptance of the petitioner as legal heir did not cure the defect, since no notice was issued to the petitioner in that capacity and the petitioner had not submitted to jurisdiction. [Paras 6, 8, 9]

The impugned notice was quashed, with liberty to the respondent authority to reopen or re-initiate proceedings against the petitioner, if permissible under section 159 of the Act.

Final Conclusion: The reassessment notice issued to the deceased assessee was quashed. The respondent authority was left at liberty to proceed against the legal heir in accordance with section 159 of the Act.

Unexplained money - cheque advance in proposed property transfer - alleged cash consideration in proposed property transfer

Unexplained money - identified cheque advance - Addition as unexplained money of the cheque advance received during negotiations for transfer of the Noida property - HELD THAT: - For invoking section 69A, the assessee must be found to be owner of money whose nature and source remain unexplained. The payer, banking source and nature of the cheque credit as an advance towards the proposed purchase stood established through the departmental inquiry and the proposed purchasers' statements. The differing accounts as to whether the advance was subsequently returned or retained did not render the original receipt unexplained; its later treatment, if any, was to be considered under the applicable provisions in the relevant year. [Paras 11, 12, 17]

The addition for A.Y. 2019-20 was deleted.

Unexplained money - proof of alleged cash consideration - Addition as unexplained money of alleged cash consideration received in FY 2019-20 under the proposed transfer of the Noida property - HELD THAT: - The WhatsApp message acknowledged by the proposed purchaser established its authorship, but did not by itself establish actual payment of cash to the assessee in the previous year under appeal. The principal electronic communications relied upon were from the following previous year, while the contemporaneous communication was described as an estimate and did not establish a cash delivery. The broker's inconsistent accounts, unsupported by particulars tracing the alleged cash to the assessee, could not reliably prove the precise receipt assessed. Non-attendance for cross-examination was relevant but could not, by itself, establish the amount, recipient or year of payment. [Paras 13, 14, 15, 16, 17]

The addition for A.Y. 2020-21 was deleted, as receipt or ownership of the alleged cash during FY 2019-20 was not established.

Final Conclusion: Both additions under section 69A were deleted and the assessee's appeals were allowed.

Exemption for BSNL retrenchment compensation - New exemption claim before appellate authority

Exemption of BSNL retrenchment compensation under section 10(10B) - Eligibility of retrenchment compensation received under BSNL Voluntary Retirement Scheme, 2019 for exemption under section 10(10B) - HELD THAT: - The Tribunal noted that several Benches had treated compensation received by BSNL employees under the Scheme as retrenchment compensation eligible for exemption under section 10(10B). Since the claim was denied only on technical grounds and the earlier orders had attained finality, the benefit could not be denied to the assessee. [Paras 12, 14, 16, 17]

The claimed exemption under section 10(10B) was allowed.

New exemption claim before appellate authority - Maintainability before the appellate authority of an exemption claim under the correct provision where the original return claimed exemption under a different provision and no revised return was filed - HELD THAT: - The restriction on entertaining a claim not made in the return otherwise than through a revised return was held to apply to the Assessing Officer and not to the appellate authority. The assessee's mistaken claim under section 10(10C) did not bar consideration of the exemption claim under section 10(10B). [Paras 14, 15]

The technical rejection of the claim by the appellate authority was held unsustainable.

Final Conclusion: The appeal was allowed and the assessee was held entitled to exemption under section 10(10B) for the retrenchment compensation received under the BSNL Voluntary Retirement Scheme, 2019.

Binding nature of Board instructions on filing of appeals - Monetary threshold for filing appeals before CESTAT - Section 131BA - power to issue instructions regulating filing of appeals - Withdrawal of pending appeals below prescribed limit - Low tax effect as ground for non-maintainability of departmental appeal

HELD THAT:- The learned counsel for the appellant fairly states that this Court has considered and dismissed a similar matter [2026 (8) TMI 664 - SC ORDER]

In view of the above, the civil appeal is dismissed.

Prospective operation of exemption notifications - Provisional release of imported used digital multifunction print, copying and scanning machines

Consideration of provisional release of imported used digital multifunction print, copying and scanning machines in the light of an amended exemption notification brought into force after the Bill of Lading - HELD THAT: - An exemption notification, unless expressly made retrospective, operates prospectively. Since the Bill of Lading preceded the commencement of the amendment relied upon by the respondents, that amendment could not govern the import or be invoked to decline consideration of provisional release. The earlier common order concerning provisional release of similar goods also applied, no distinguishing feature having been shown. [Paras 6, 7]

The respondents were directed to consider the request for provisional release in accordance with law, impose appropriate conditions and release the goods upon compliance, subject to the outcome of independent adjudication proceedings.

Final Conclusion: The writ petition was disposed of by directing consideration and, upon compliance with lawful conditions, provisional release of the imported goods. Such release was made subject to the outcome of adjudication under the Customs Act.

Prospective operation of exemption notification - Provisional release of imported goods under the Customs Act

Consideration of provisional release of imported second-hand digital multifunction print and copying machines-applicability of a subsequently effective exemption amendment - HELD THAT: - A statutory notification, unless it expressly provides otherwise, operates prospectively. As the bills of lading pre-dated the commencement of the amendment relied upon by the respondents, that amendment could not govern the imports or justify refusal to consider provisional release. The issue concerning provisional release of similar goods had also been considered in an earlier common order, and no distinguishing feature was shown. [Paras 6, 7, 8]

The respondents were directed to consider the request for provisional release in accordance with law, impose appropriate conditions, and release the goods upon compliance, subject to the outcome of adjudication proceedings.

Final Conclusion: The writ petition was disposed of with directions to consider and, upon compliance with lawful conditions, provisionally release the imported goods without applying the subsequent amendment retrospectively.

Conditional re-export of seized imported goods - Permission to re-export seized imported fabrics pending adjudication of the alleged tariff misclassification - HELD THAT: - Applying the Division Bench approach in an identical matter in Mahadev Enterprises [2022 (6) TMI 1189 - MADRAS HIGH COURT] the Court held that re-export could be permitted pending adjudication where the revenue interest was secured by a bond for the differential duty and a bank guarantee. The alleged misclassification was not adjudicated in the writ petition. [Paras 6, 7]

The respondents were directed to permit re-export upon compliance with the stipulated bond and bank guarantee conditions.

Final Conclusion: The writ petition was disposed of by directing conditional re-export of the seized goods upon execution of the stipulated bond and furnishing of the bank guarantee.

Customs exemption for apparatus drawing circuit patterns on sensitised semiconductor materials - Customs exemption for multilayered photovoltaic backsheets with PVF base - Confiscation and redemption fine for finally cleared imported goods - Penalty contingent upon confiscability of goods

Apparatus for drawing circuit patterns on sensitised semiconductor materials - Interpretation of customs exemption notifications - Eligibility of MBB-PV Cell Soldering Stringer, Auto-Layup, Auto-Bussing and Laminator Machines for exemption as apparatus for drawing circuit patterns on sensitised semiconductor materials - HELD THAT: - The exemption entry disjunctively covers apparatus for projection or drawing of circuit patterns and does not confine drawing to photolithographic exposure or microscopic circuitry. Considered as an integrated process, the machinery electrically strings, arranges, interconnects and permanently protects photovoltaic semiconductor cells in a predetermined electrical configuration. The technical material supported the conclusion that the machinery establishes the circuit pattern of the photovoltaic module; the contrary construction introduced restrictions not found in the notification. [Paras 29, 30]

The machinery was held eligible for the exemption, and the related differential duty demand and consequential interest were set aside.

Multilayered sheets with tedlar base - Trade parlance in customs exemption - Eligibility of PVF-layered Solar PV Backsheets for exemption as multilayered sheets with tedlar base - HELD THAT: - The notification did not stipulate that the tedlar base must be manufactured by, sourced from, or authorised by a particular proprietor. The Government's own legislative usage, the specialised solar-industry context, and trade material showed that tedlar was used as a description associated with PVF material. Since the goods were multilayered photovoltaic backsheets containing the requisite PVF layer and used for manufacturing solar modules, absence of authorisation from the proprietor of the Tedlar trademark could not defeat the exemption. [Paras 31, 32]

The Solar PV Backsheets were held eligible for the exemption, and the related differential duty demand and consequential interest were set aside.

Confiscation of finally cleared imported goods - Redemption fine - Liability of fully declared imported machinery, goods attracting differential IGST, and Solar PV Backsheets, finally assessed and cleared before notice, to confiscation and redemption fine - HELD THAT: - Acceptance of a higher IGST rate on fully declared goods did not, without findings of concealment, suppression, fictitious documentation, or import of goods different from those declared, convert the rate claim into misdeclaration. The basis for confiscation of the machinery and Solar PV Backsheets was also removed by the allowance of their exemption claims. Further, all goods had been finally cleared, were neither seized nor provisionally released against a bond securing their production, and were unavailable for confiscation. [Paras 33]

The confiscation order and the composite redemption fine were set aside.

Penalty contingent upon confiscability of goods - Penalty on the importer for alleged misdeclaration of imported goods after the finding of confiscability failed - HELD THAT: - Penal liability depended upon an act or omission rendering the goods liable to confiscation. As the goods were held not liable to confiscation, the penalty lost its foundation. [Paras 34]

The penalty was set aside.

Final Conclusion: The impugned order was modified by allowing both exemption claims and setting aside the consequential confiscation, redemption fine and penalty. The admitted differential IGST liability and consequential interest remained payable.

DGFT regularisation of EPCG imports - Confiscation and penalty for non-fulfilment of EPCG export obligation

Validity of confiscation and penalty for failure to fulfil export obligation under an EPCG licence after the DGFT regularised the imports on payment of duty and interest - HELD THAT: - The Tribunal noted that the DGFT had regularised the imports made under the EPCG licence after payment of duty and interest. In the light of the decisions of the Delhi and Chennai Benches, the impugned order could not be sustained insofar as it upheld confiscation of the imported goods and penalty despite such regularisation. [Paras 4]

The confiscation and penalty under section 112(a) were not sustained and the appeal was allowed.

Computation of duty foregone on EPCG imports - Basis for computing duty foregone on capital goods imported under an EPCG licence-assessable value determined in the Bill of Entry rather than licence value - HELD THAT: - The Tribunal recorded that the appellant had not challenged the confirmation of duty and interest. It held that duty foregone was to be determined with reference to the assessable value of the imported goods as reflected in the Bill of Entry, and not the licence value. [Paras 4]

The unchallenged duty and interest demand remained unaffected, subject to computation on the Bill of Entry assessable value.

Final Conclusion: The appeal was allowed as the DGFT regularisation rendered the impugned confiscation and penalty unsustainable. The unchallenged duty and interest demand remained subject to computation on the assessable value reflected in the Bill of Entry.

Classification of LCD devices used in electricity meters - Extended limitation and penal consequences for disputed classification

Classification of LCD devices used in electricity meters - Specific tariff entry vis-a -vis classification as meter parts - Classification of LCD devices imported for use in manufacturing electricity meters under CTI 90138010 OR as indicator panels under CTH 85312000 or as meter parts under CTI 90309010 - HELD THAT: - The goods were LCD devices specifically covered by CTI 90138010. The HSN notes to CTH 85312000 did not cover the imported goods; and, following Secure Meters Ltd. Vs. CC, New Delhi, their use in electricity meters did not warrant classification under CTH 90309010 as meter parts, since LCD devices specifically enumerated in the tariff remained classifiable under their own heading. [Paras 25]

The LCD devices were held classifiable under CTI 90138010, and the reclassification under CTI 90309010, with the consequential differential duty and interest, could not survive.

Extended limitation and penalties for disputed classification of LCD devices - Invocation of the extended period and imposition of redemption fine and penalties on the importer and Customs Broker for classification of the LCD devices - HELD THAT: - Classification of LCD devices had remained disputed over time and attained finality through the Supreme Court ruling in M/S. SECURE METERS LTD. [2015 (5) TMI 241 - SUPREME COURT]. In those circumstances, invocation of the extended period and the consequential redemption fine and penalties were unsustainable. [Paras 26]

The extended-period demand, redemption fine and penalties imposed on the importer and Customs Broker were set aside.

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

Classification of kitchen exhaust hoods incorporating a fan - Essential character of ventilating or recycling hoods - Kitchen exhaust hoods exceeding 120 cm

Classification of kitchen exhaust hoods exceeding 120 cm in width and incorporating a factory-fitted Capture Jet fan, as fans under CTH 8414 59 90 or as residual goods under CTH 8414 80 90 - HELD THAT: - Heading 8414 separately recognises fans and ventilating or recycling hoods incorporating a fan. The incorporation of a fan does not convert a structurally complex hood assembly into a fan, particularly where its components and marketed identity establish its essential character as a hood. The specific entry for hoods under CTH 8414 60 00 is confined to hoods having a maximum horizontal side not exceeding 120 cm; exceeding that dimension does not render the goods classifiable as other fans. As no other specific entry applied, the goods fell under the residual entry. [Paras 3]

The kitchen exhaust hoods, though incorporating an integral fan, were held classifiable under CTH 8414 80 90 as "Other", and not under CTH 8414 59 90 as fans.

Final Conclusion: The advance ruling classified the proposed kitchen exhaust hoods exceeding 120 cm in width under CTH 8414 80 90, notwithstanding their integral fan component.

Defence end-use customs exemption for aircraft sub-assemblies - Mandatory certification under conditional customs exemption - MILDS F SUOF Lens, Front End (M2FE), and MILDS F SUII Coupled units eligibility for exemption under Sl. No. 60 of Table II to Notification No. 45/2025-Customs dated 24.10.2025.

Eligibility of MILDS Block 2 missile-warning-system components for the defence end-use exemption as sub-assemblies or accessories for military aircraft - HELD THAT: - The exemption entry is functional and end-use based: the expression "Any Chapter" renders the tariff heading of an imported component non-determinative, but requires a substantive and demonstrable nexus with a specified qualifying end-product. The imaging lens, sensor front-end and coupling unit were separately manufactured units engineered to form the missile-warning system, which was intended for fitment in the electronic-warfare suite of military helicopters. They therefore answered the description of sub-assemblies for aircraft. Alternatively, their exclusive use in the missile-warning system fitted to aircraft, and their contribution to the aircraft's defensive effectiveness, brought them within the description of accessories. The exclusions relating to specified weapons had no application. [Paras 7, 9]

The components were held eligible in principle for the exemption as sub-assemblies, and alternatively accessories, for military aircraft.

Mandatory certification under conditional customs exemption - Defence end-use certification - Applicability of Condition 17 to a private defence supplier and sufficiency of the Indian Air Force End-Use Certificate for the claimed exemption - HELD THAT: - Condition 17 extends to imports by any other entity for the Defence Forces and therefore does not exclude a private importer. However, actual availment requires production at the time of import of the prescribed certificate from an officer not below the rank of Joint Secretary in the Ministry of Defence, certifying the goods' quantity, description and technical specifications, exclusive defence use, and recommending exemption. The Indian Air Force End-Use Certificate established the defence nexus and intended use, but could not substitute the certificate expressly mandated by Condition 17. [Paras 7, 9]

The exemption for each consignment remains subject to production of the prescribed Condition 17 certificate and verification by the jurisdictional Customs authorities at import.

Final Conclusion: The specified missile-warning-system components were held eligible in principle for the defence end-use customs exemption as aircraft sub-assemblies or accessories. Actual availment remains conditional upon compliance with Condition 17 and customs verification at import.

Fit and proper criterion for insolvency professional registration - effect of stayed disciplinary punishment

Rejection of enrolment-cum-registration as an insolvency professional on the ground of pending disciplinary proceedings are pending against him before the ICAI, despite abeyance of the punishment removing the applicant's name from the register of members - HELD THAT: - As the punishment order had been kept in abeyance in the pending appeal, the applicant's name continued on the register of members and he remained entitled to perform his professional duties. The mere pendency of disciplinary proceedings could therefore not render him unfit and improper for registration; the contrary view of the authorities was without merit. [Paras 5, 6, 7, 8, 9]

The rejection was set aside, with a direction to pass a fresh order uninfluenced by the pendency of the appeal, subject to its final outcome.

Final Conclusion: The petition was disposed of by setting aside the rejection and directing fresh consideration subject to the final decision in the disciplinary appeal.

Date of default after failure of one-time settlement - Section 10A bar to corporate insolvency resolution process - Curable procedural defects in corporate insolvency applications - Corporate debtor's viability at admission stage - Reasoned order admitting corporate insolvency resolution process

Date of default after failure of one-time settlement - Section 10A bar to corporate insolvency resolution process - Determination of the date of default after the corporate debtor failed to comply with a one-time settlement - HELD THAT: - Failure to pay the amount under a one-time settlement did not create a fresh default, since an OTS is a consensual compromise for closure of the loan account and, upon its failure, restores the original position rather than rescheduling the loan. The date stated in Form I was a rectifiable error; the date of the recovery certificate was the applicable date of default. The statutory bar under Section 10A was consequently inapplicable, and the debt acknowledgments kept the application within limitation. [Paras 19, 20]

The corrected date of default was accepted, and the financial creditor's application was neither barred by Section 10A nor time-barred.

Curable procedural defects in corporate insolvency applications - Rectification of procedural defects and filing of additional documents in the financial creditor's application for corporate insolvency resolution process - HELD THAT: - Curable procedural defects do not entail automatic rejection unless the governing statute or rule mandates that consequence. As the defects did not affect jurisdiction or merits and were permitted to be rectified, procedural requirements could not be used to defeat substantive rights. [Paras 18]

The Adjudicating Authority rightly allowed rectification of the defects and submission of additional documents.

Corporate debtor's viability at admission stage - Admission of the financial creditor's insolvency application despite the corporate debtor's assertion that it was a viable going concern - HELD THAT: - The corporate debtor produced no credible material establishing solvency or viability. The circumstances invoked to seek refusal of admission were materially different from a case involving substantial unrealised receivables, while the existence of financial debt and default above the statutory threshold was undisputed. [Paras 21, 22]

The asserted viability of the corporate debtor did not warrant rejection of the application for corporate insolvency resolution process.

Reasoned order admitting corporate insolvency resolution process - Challenge to the admission order as non-reasoned - HELD THAT: - The admission order recorded the material documents, facts and contentions and gave reasons for concluding that the financial creditor's application deserved admission. It could not therefore be characterised as a non-reasoned order. [Paras 22, 23]

The challenge to the order as non-speaking was rejected.

Final Conclusion: The appeal was dismissed, and the order admitting the corporate debtor to corporate insolvency resolution process was sustained.

Recall of ex parte order - delay in recall application

Whether the application filed pursuant to liberty granted by the Adjudicating Authority could be rejected on the ground of considerable delay? - HELD THAT: - The earlier recall application had, under a misconception, challenged the subsequent continuation of the ex parte proceedings rather than the original ex parte order. Since that subsequent order had already been set aside, the reply had been taken on record, and liberty was thereafter granted to seek recall of the original order, the subsequent application could not be treated as delayed. Its rejection on a hyper-technical view was unsustainable. [Paras 14]

The rejection order was set aside; the ex parte order was recalled insofar as it concerned the appellant, whose reply was directed to be taken on record and who was permitted to participate in the pending proceedings.

Final Conclusion: The appeal was allowed and the appellant was restored to participation in the pending proceedings, with its reply taken on record.

Medical bail for sick and infirm accused under the Prevention of Money Laundering Act - Prolonged pre-trial custody and personal liberty

Entitlement of an elderly accused to interim bail on medical grounds and prolonged pre-trial custody despite the rigours of section 45 of the Prevention of Money Laundering Act - HELD THAT: - The earlier rejection of bail on merits did not govern a request confined to medical grounds and prolonged custody. The petitioner's serious spinal ailments and continuing need for treatment were not specifically denied.

The rigours of section 45 cannot prevent bail where treatment within prison becomes a mere formality and continued detention would offend the right to life under Article 21. Advanced age, medical requirements, custody exceeding five years, and the non-conclusion of trial justified interim bail without examining the merits of the prosecution case. [Paras 17, 21, 22, 23, 24]

Interim bail was granted for the stipulated period, with liberty to seek extension if the health condition did not improve, subject to the prescribed conditions and surrender on expiry.

Final Conclusion: The petition was allowed and interim bail granted on account of the petitioner's advanced age, medical condition and prolonged custody, without any expression on the merits. The grant remained subject to the stipulated conditions and surrender requirement.

Proceeds of crime - attachment of property of equivalent value

Provisional attachment of properties acquired before the alleged criminal activity as property of equivalent value where the direct proceeds of crime were unavailable - HELD THAT: - The expression "or the value of any such property" constitutes an independent limb of the definition of proceeds of crime. Where the property directly or indirectly derived from criminal activity is unavailable, having been vanished or laundered, attachment may extend to other property of equivalent value, notwithstanding that it was acquired before the crime and bears no direct nexus with it. A contrary construction would render that limb redundant and defeat the object of the enactment. [Paras 15, 16]

The provisional attachment and its confirmation were upheld, and the appeals were dismissed.

Final Conclusion: The properties could be attached as equivalent-value property upon the non-availability of the proceeds of crime. The impugned order was confirmed and the appeals were dismissed.

Sabka Vishwas discharge certificate - Withdrawal of appeal under Sabka Vishwas Scheme - Actus curiae neminem gravabit

Entitlement to a discharge certificate under the Sabka Vishwas Scheme where payment was made within time but proof of withdrawal of the pending appeal was furnished after closure of the Scheme owing to delayed listing during the COVID-19 period - HELD THAT: - Payment and withdrawal of litigation were held to be substantive conditions, whereas intimation to the designated committee regarding withdrawal was procedural. The Scheme prescribed no time limit for withdrawal of the appeal, though it prescribed a time limit for payment. The petitioner had made payment within time and sought withdrawal while the Scheme was operative; the delayed listing was attributable to circumstances within the Court's control during the pandemic and could not prejudice the petitioner. Closure of the electronic portal or delayed procedural intimation could not defeat the relief, and the request was required to be processed manually.

As rightly contended by petitioner, placing reliance upon the judgment of this Court in M/s. Sir Gujan Builder [2022 (5) TMI 432 - MADRAS HIGH COURT] once the requisite conditions have been duly complied with within the prescribed time, including settlement of the account and withdrawal of the case, the Designated Committee is bound to process the request, either manually or otherwise. [Paras 22, 24, 25, 26, 27]

The refusal to issue the discharge certificate and the consequential revival of the demand were set aside, and the designated committee was directed to process the request manually and issue the certificate.

Final Conclusion: The writ petition was allowed, the refusal of the discharge certificate and consequential revival of the demand were set aside, and manual processing of the declaration was directed.

Demand of service tax from an Indian Exporter on reverse charge basis in respect of certain services received by him for overseas, through his bank - extended period of limitation and equal penalty

Reverse-charge service tax on foreign bank charges in export transactions - Service recipient and privity of contract - Reverse-charge service tax demand on foreign-bank charges and overseas commissions recorded without bifurcation - HELD THAT: - The notice and the lower orders did not segregate expenses towards banking and financial services from commissions paid to overseas entities, but proceeded on the premise that all payments concerned foreign banking services. The exporter had no privity of contract with the foreign bank, and the Indian bank, through which export proceeds were routed, was the recipient of the service.

The Single Judge decision of BGR Energy Systems Ltd. [2019 (11) TMI 1130 - MADRAS HIGH COURT] relied on in the impugned order could not govern the matter, as the Division Bench [2020 (12) TMI 151 - MADRAS HIGH COURT] had directed the statutory appeal to be decided uninfluenced by those observations and the ultimate outcome of the underlying proceedings had not been ascertained. The coordinate-bench decisions on foreign-bank collection charges were therefore applicable.

As no evidence whatsoever has been placed on record to suggest that the Appellant did not pay tax with malafide intentions. The basis of issue of SCN is audit of Appellant's own records. Appellant has no privity of contract with foreign bank- therefore the Indian bank is the recipient of service liable to pay tax under RCM and not the exporter. In any event the whole exercise was revenue neutral as the Appellant was eligible for the ITC of such tax, if paid. The demand of tax is revenue neutral hence the allegation of fraud suppression etc are not sustainable as held in Appellant's own cases [2022 (10) TMI 195 - CESTAT NEW DELHI] and [2026 (9) TMI 1999 - CESTAT NEW DELHI] [Paras 4, 5]

The service-tax demand was held unsustainable on merits and was set aside.

Invocation of the extended limitation period and penalty for alleged non-payment of reverse-charge service tax on foreign-bank charges - HELD THAT: - No evidence established mala fide non-payment. The proceedings arose from audit of the appellant's own records, and the tax, if paid, would have been available as input tax credit, rendering the exercise revenue-neutral. The allegations of fraud or suppression were consequently unsustainable. [Paras 5]

The extended period was held unavailable and the penalty imposed was set aside.

Final Conclusion: The appeal was allowed, with the service-tax demand and penalties set aside on merits and limitation.

Procedural conditions for export-service exemption - Shipping-bill endorsement of foreign-agent commission

Procedural conditions for export-service exemption - Effect of non-submission of Form EXP2 on exemption from service tax for commission paid to foreign agents for export sales - HELD THAT: - The requirement to furnish Form EXP2 was held to be procedural, particularly as the information required by the authorities was available on record. A procedural lapse in filing that form could not defeat the exemption intended to promote exports. [Paras 8, 9]

The refund claims were directed to be considered without treating non-submission of Form EXP2 as a bar.

Shipping-bill endorsement of foreign-agent commission - Entitlement to refund where the shipping bills did not record the commission payable to foreign agents - HELD THAT: - Endorsement of the commission payable to foreign agents in the shipping bill was held to be a mandatory condition of the exemption. Nevertheless, where the appellant could establish the reasons for non-endorsement through contracts or other documents and correlate remittances with particular shipping bills, the adjudicating authority could consider extending the notification benefit. [Paras 8, 9]

Refund relating to shipping bills carrying the required endorsement was allowed, while claims concerning the remaining shipping bills were remanded for de novo adjudication.

Final Conclusion: The impugned orders were set aside. Refund claims pertaining to shipping bills bearing the requisite commission endorsement were allowed, and the balance claims were remanded for fresh adjudication.

Appellate jurisdiction over Goods Transport Agency service classification

Maintainability before the High Court of an appeal challenging the determination that the respondent's services were not classifiable as Goods Transport Agency service - HELD THAT: - The appellate scheme under the Act was held to be mutually exclusive: questions relating to rate of duty or value for purposes of assessment, including taxability or excisability, are excluded from the High Court's jurisdiction and lie before the Supreme Court. The Tribunal's determination whether the services constituted Goods Transport Agency service, based on the requirements of transportation of goods by road and issuance of consignment notes, was held to involve classification and excisability or taxability in relation to assessment. [Paras 7, 8, 9, 13]

The appeal was not maintainable before the High Court; the appellant was left at liberty to approach the Supreme Court under Section 35L of the Act.

Final Conclusion: The appeal was dismissed as not maintainable before the High Court, with liberty to invoke the appellate jurisdiction of the Supreme Court in accordance with law.

Service of first appellate order for limitation - Limitation expiring on a non-working day

Service of first appellate order under the Customs Act - Limitation for second appeal - Computation of limitation for the second appeals where the first appellate orders were not served in the prescribed manner - HELD THAT: - A Document Identification Number merely authenticates an order and does not establish its service. The Revenue produced no evidence of electronic uploading or service, and the information furnished under the Right to Information Act showed only dispatch by speed post without acknowledgment due, contrary to the mode stipulated by Section 37C. The date on which copies of the first appellate orders were furnished to the appellant was consequently to be treated as the date of service. [Paras 10, 11, 12]

The second appeals were within limitation; the orders of the CESTAT dismissing them as barred by limitation were quashed.

Limitation expiring on Sunday-filing on next working day - Maintainability of the first appeals instituted on the next working day after the limitation period ended on Sunday - HELD THAT: - Applying Section 4 of the Limitation Act, the Court held that appeals filed on the first working day after the limitation period expired on a Sunday were to be treated as filed within time.

We have noted that 29.05.2022 fell on a Sunday. Hence, by application of the provisions of Section 4 of the Limitation Act, and drawing support from the decision of Sai Auto Industries [2026 (3) TMI 1631 - UTTARAKHAND HIGH COURT] we are of the considered view that the appeals, instituted on the first working day thereafter, being 30.03.2022, are to be taken as maintainable.[Paras 13, 14]

The first appeals were held maintainable, and the matters were remanded to the first appellate authority for adjudication on merits.

Final Conclusion: The CESTAT orders dismissing the second appeals as time-barred were quashed. The first appeals were held maintainable and remanded for adjudication on merits.

CENVAT credit on capital goods used in manufacture of plant and machinery embedded to earth - claim denied solely because the resultant plant and machinery is immovable property

HELD THAT: - Applying the coordinate-bench ruling in a materially similar factual situation in ICL SUGARS LTD. [2011 (4) TMI 1065 - KARNATAKA HIGH COURT], the Court held that CENVAT credit cannot be denied merely because the plant or machinery manufactured using the capital goods is embedded to earth and is immovable property. [Paras 6]

CENVAT credit could not be denied on that ground, and no substantial question of law arose.

Final Conclusion: The Revenue's appeal was rejected as no substantial question of law arose.

Movability of mobile towers and prefabricated shelters - CENVAT capital-goods credit for telecom BTS accessories - Input-service credit for erection and commissioning of telecom towers and shelters - Personal-use restriction on CENVAT input-service credit - SEZ exemption for mobile telecommunication services

Movability of mobile towers and prefabricated shelters - Capital goods as accessories of telecom BTS and antenna - Entitlement to CENVAT credit on mobile towers and prefabricated shelters used with BTS and antenna for providing mobile telecommunication services as capital goods - HELD THAT: - Applying the binding Supreme Court ruling M/S BHARTI AIRTEL LTD. [2024 (11) TMI 1042 - SUPREME COURT] the Court held that towers and prefabricated shelters, though fixed by nuts and bolts for stability, could be dismantled, relocated and sold without change in character. Their attachment was for effective functioning of the antenna and not for permanent beneficial enjoyment of land or building. Though not independently specified capital goods, they supported and enhanced the efficiency of BTS and antenna, and consequently qualified as accessories of capital goods used for providing output service. [Paras 3, 4, 6]

Mobile towers and prefabricated shelters were held to be movable goods qualifying as capital goods, and CENVAT credit was allowed.

Input credit for mobile towers and prefabricated shelters - Entitlement to CENVAT credit on mobile towers and prefabricated shelters as inputs used for providing mobile telecommunication services - HELD THAT: - Having held that towers and prefabricated shelters were movable goods used in the provision of mobile telecommunication services, the Court accepted the alternate claim that they also fell within the definition of inputs under the CENVAT Credit Rules. [Paras 5, 6]

CENVAT credit on the towers and prefabricated shelters was also allowable as input credit.

Input-service credit for erection and commissioning of telecom towers and shelters - Entitlement to CENVAT credit on erection and commissioning services used in relation to telecom towers and prefabricated shelters - HELD THAT: - Since towers and prefabricated shelters were held not to be immovable property, services rendered for their erection and commissioning were eligible for credit. Independently, the inclusive definition of input service was held wide enough to encompass erection and commissioning activities used in relation to setting up operations for providing output service. [Paras 13, 14, 16, 18]

CENVAT credit on the relevant erection and commissioning services was upheld.

Personal-use exclusion for outdoor catering input-service credit - CENVAT credit on rent-a-cab, authorised service station and tour-operator services - Applicability of the personal-use restriction to CENVAT credit on rent-a-cab, outdoor catering, authorised service station and tour-operator services - HELD THAT: - The notification imposing the requirement to establish absence of personal use or consumption applied only to outdoor catering services and did not extend to rent-a-cab, authorised service station or tour-operator services. Further, having been issued in 2011, it could not govern the period between 2004 and 2008. The Court also noted the wide ambit of input services in allowing credit on the services in question. [Paras 20, 21, 29]

The CENVAT credits claimed on the specified services were upheld.

SEZ exemption for telecom services supplied to SEZ units - Availability of exemption for mobile telecommunication services supplied to SEZ units where the mobile facility could also be used outside the SEZ - HELD THAT: - The Court concurred that the relevant subscribers were SEZ units and that use of a mobile facility outside the SEZ did not, by itself, establish that the telecom service was not supplied to or consumed by the SEZ unit. The statutory exemptions and overriding effect available under the SEZ regime supported the claimed exemption. [Paras 23]

Denial of the exemption for telecom services supplied to SEZ units was held unjustified.

Final Conclusion: The assessee appeals were allowed and the Revenue appeals were dismissed to the extent of the respective issues decided. CENVAT credits and the claimed SEZ exemption were sustained in accordance with the findings above.

Limitation for refund of unutilized Cenvat credit after closure of business - Maintainability of Form-R refund claim for unutilized Cenvat credit

Limitation for refund of unutilized Cenvat credit after closure of business - Applicability of the statutory refund limitation to a claim for accumulated unutilized Cenvat credit filed after closure of the manufacturing business - HELD THAT: - Cenvat credit is consequential to duty paid and its refund is governed by the limitation prescribed for duty refunds. On closure of the factory, the relevant limitation is to be reckoned from surrender of the registration; the claim filed more than six years thereafter was beyond time.

We support from the decision of Larger Bench of this Tribunal in the case of M/s. Veer Overseas Ltd. [2018 (4) TMI 910 - CESTAT CHANDIGARH]. Hon’ble Supreme Court in the case of Mafatlal Industries Ltd. [1996 (12) TMI 50 - SUPREME COURT] has held that Central Excise Act and the Rules made thereunder including Section 11B too constitute ‘law’ within the meaning of Article 265, thus no claim for refund is maintainable except and in accordance therewith. Any collection or retention of tax in accordance or pursuant to the said provisions is collection or retention under “the authority of law” within the meaning of said Article 265. Hon’ble court after examining various decided cases has held that the claim for refund is governed by the provisions of Section 11B for the period of limitation. [Paras 5]

The refund claim was held time-barred and its rejection on limitation was upheld.

Maintainability of Form-R refund claim for unutilized Cenvat credit - Maintainability of a Form-R refund claim for accumulated unutilized Cenvat credit - HELD THAT: - Form-R under Section 35F concerns refund of a pre-deposit, whereas the amount claimed was accumulated unutilized Cenvat credit and not a pre-deposit. [Paras 5]

The refund claim filed in Form-R was held not maintainable.

Final Conclusion: The impugned order was upheld and the appeal was dismissed, the refund claim being time-barred and, independently, not maintainable in Form-R.

Classification of imported precision measuring instruments under Entry 9 of the Eleventh Schedule - Concessional rate for precision testing equipment used in manufacture under Section 3(3)

Classification of imported precision measuring instruments falling under Entry 41 of Part D of the First Schedule, as to whether they were covered by Entry 9 of the Eleventh Schedule notwithstanding that they were not specifically named therein - HELD THAT: - Entry 9 comprehensively covered imported cigarettes, medium density fibre boards, textiles and other imported items falling under Parts D and E of the First Schedule. The use of the conjunction "and" required a uniform tax treatment for all goods covered by the entry; hence, the Commissioner's construction restricting the rate to specifically enumerated imported goods had no justification. [Paras 9, 10, 11, 12]

The imported instruments were taxable under Entry 9 at 20 per cent, and the departmental appeal concerning goods not supported by Form XVII was allowed.

Concessional rate for precision testing equipment used in manufacture - Eligibility of sales of precision testing equipment, covered by Form XVII and used by purchasers in manufacture, for the concessional rate under Section 3(3) - HELD THAT: - Section 3(3) extends the concessional rate to "any goods" used in manufacture within the State, while excluding plant and machinery. The precision testing equipment, though not consumables, was admittedly used in manufacture and was held to fall within the expression "any goods", since it was neither plant and machinery nor excluded by the provision. [Paras 16, 17, 18, 20]

Sales covered by Form XVII were held entitled to the concessional rate of 3 per cent.

Final Conclusion: The appeal concerning imported goods unsupported by Form XVII was allowed in favour of the Revenue. Sales of the precision testing equipment supported by Form XVII were held eligible for the concessional rate.

Input tax credit - proof of genuine transactions - Input tax credit -selling dealer's failure to pay tax

Entitlement to input tax credit where the selling dealer had not paid tax, despite documentary proof and e-sugams establishing genuine purchase transactions and movement of goods - HELD THAT: - The assessee had produced sufficient material, including e-sugams, to establish the genuineness of the transactions and movement of goods and had consequently discharged the burden under section 70. Input tax credit could not be refused solely because the selling dealer failed to pay tax to the Department. [Paras 7]

The Tribunal was justified in allowing the claim for input tax credit; the Revenue's revision petition was dismissed.

Final Conclusion: The revision petition was dismissed, sustaining the Tribunal's conclusion that the claimed input tax credit could not be denied in the circumstances.

Classification of recorded and pre-recorded audio/video CDs and DVDs as information technology products - taxable at 5% under Entry 68(5)(d) or at 14.5% as DVDs and CDs under Entry 68(30) of the First Schedule - principle of noscitur a sociis

HELD THAT: - Entry 68(5) comprehensively covers software and the media on which it is embedded. Applying noscitur a sociis, recorded and pre-recorded CDs and DVDs take their colour from the other software media specified in that entry. The separate entry for DVDs and CDs concerns blank media and is inapplicable to goods embedded with software. The absence of factual dispute and the consistent clarifications supported adjudication in writ jurisdiction without relegating the assessee to the statutory appeal. [Paras 12, 13, 14, 17]

The subject goods were held classifiable under Entry 68(5)(d)/Part B of the First Schedule; the assessments based on their classification as blank media were quashed.

Final Conclusion: The writ appeals were allowed, the assessment orders were quashed, and refund of the conditional deposit was directed.

Interpretation to urban land under sec.2(ea) of the Wealth Tax Act - Agricultural land - exclusion from wealth-tax assets - Retrospective amendment to definition of asset

Liability of land classified in revenue records as agricultural land and used for agricultural purposes to wealth tax - HELD THAT: - The retrospective amendment to the definition of "asset" extended the exclusion to land classified in revenue records as agricultural land and utilised for agricultural purposes. As agricultural activity on the subject lands was undisputed, the amended provision governed the assessment year in question. [Paras 5]

The lands were excluded from wealth-tax assets and the appeals were allowed in favour of the assessees; any recovered demand could be claimed by refund.

Final Conclusion: The appeals for AY 2008-09 were allowed, as the subject lands satisfied the retrospectively amended exclusion for agricultural land.

Inherent jurisdiction to quash criminal proceedings - Mandatory pre-process inquiry for accused outside territorial jurisdiction

Quashing of cheating proceedings - Prima facie allegation of alteration of cheque date - Quashing of a cheating complaint arising from the alleged alteration of the date on dishonoured cheques - HELD THAT: - The inherent power to quash is to be exercised sparingly upon consideration of the attendant circumstances emerging from the record. The forensic opinion prima facie supported the allegation that the date on the cheque had been altered, and the petitioners had not disclosed the subsequent developments in the connected cheque-dishonour proceeding. The precedents concerning purely contractual disputes were distinguishable, as they did not involve such forensic material. The complaint also contained allegations of conspiracy and forged alteration against the company and its Directors, and could not be treated as devoid of allegations against them. [Paras 21, 22, 26, 31, 32]

The complaint could not be quashed at the threshold.

Mandatory inquiry before issue of process - Accused residing beyond territorial jurisdiction - Validity of the summoning order issued without the mandatory inquiry where the accused resided beyond the Magistrate's territorial jurisdiction - HELD THAT: - An inquiry or investigation before issuance of process is mandatory where the accused resides beyond the Magistrate's territorial jurisdiction, its object being to ascertain whether sufficient ground exists to proceed. Since no such inquiry had been conducted, the process could not stand. As the complaint could not presently be held to disclose no case at all, the appropriate course was remand for compliance with the mandatory requirement rather than quashing of the proceeding. [Paras 28, 32, 33, 34]

The summoning order was set aside and the matter was remitted to the Magistrate for compliance with the mandatory pre-process inquiry.

Final Conclusion: The complaint was not quashed; nevertheless, the summoning order was set aside and the matter was remitted for the mandatory pre-process inquiry.

Statutory assistance for possession of secured assets - Police assistance charges under Section 14 of the SARFAESI Act -

Whether Authority of the District Magistrate under Section 14 of the SARFAESI Act to require a secured creditor to deposit expenses for police assistance in taking possession of the secured asset? - HELD THAT: - Section 14 authorises the Magistrate to take necessary steps and use such force as may be necessary to secure possession of the secured asset. Police assistance, where considered necessary, is therefore part of the statutory process. In the absence of an express statutory provision permitting recovery of police-assistance expenses from the secured creditor, no such financial condition can be imposed. [Paras 10, 11, 12, 13, 14]

The condition requiring deposit of police-assistance expenses was set aside, and the police authorities were directed to extend necessary assistance for implementation of the possession order in accordance with law.

Final Conclusion: The petition was allowed. The unauthorised condition requiring the secured creditor to bear police-assistance charges for taking possession of the secured asset was quashed.