TaxTMI Updates e-Newsletter
Oct 05,2023

Deemed service - communication of order - making available on common portal - mode of service - limitation for filing appeal - interim protection against coercive action - deposit as condition for relief

Deemed service - communication of order - making available on common portal - service by affixation/publication/tendering - Whether making an order available on the common portal under clauses (c) and (d) of sub section (1) of section 169 of the GST Act amounts to communication and is covered by the deeming provision in sub section (2) of section 169. - HELD THAT: - The Court did not decide the legal question on the merits. The petitioner's contention that availability on the common portal does not constitute 'communication' and therefore cannot be equated with the modes of service deemed by sub section (2) of section 169 was identified as a live controversy requiring factual and legal response from the State. The Court directed the State to file a counter affidavit specifically addressing how and in what manner clauses (c) and (d) of sub section (1) may be said to be covered by the deeming provision in sub section (2), thereby leaving the question open for adjudication after the State's response.

Remanded for fresh consideration by the Court after filing of a counter affidavit by the State addressing the legal and factual basis for treating portal availability as deemed service.

Interim protection against coercive action - deposit as condition for relief - Whether coercive action pursuant to the impugned order should be stayed pending adjudication, and on what conditions. - HELD THAT: - The Court granted interim relief restraining coercive action against the petitioner in respect of the impugned order, subject to a condition. The petitioner was directed to deposit fifty per cent of the disputed tax amount in accordance with law within two weeks. Any amount already deposited by the petitioner was ordered to be adjusted against the deposit required under this order. This interim arrangement preserves the petitioner's position pending further hearing.

No coercive action to be taken against the petitioner provided the petitioner deposits 50% of the disputed tax amount within two weeks; prior deposits to be adjusted.

Counter affidavit - listing with similar writ - Procedural directions regarding further steps in the petition. - HELD THAT: - The Court directed the respondents to file a counter affidavit within four weeks, specifically addressing the manner in which clauses (c) and (d) of sub section (1) of section 169 are to be treated as deemed service under sub section (2). The matter was ordered to be listed thereafter along with Writ Tax No. 948 of 2023 so that identical issues may be considered together.

Respondents to file counter affidavit within four weeks; matter to be listed along with Writ Tax No. 948/2023.

Final Conclusion: The Court reserved adjudication on whether portal availability constitutes communication/deemed service under section 169 and directed the State to file a focused counter affidavit; in the interim coercive action is stayed on the petitioner depositing 50% of the disputed tax within two weeks, with prior deposits to be adjusted, and the petition to be listed with Writ Tax No. 948/2023.

Seizure and detention of goods in transit - genuineness of tax invoice and e-way bill - intention to evade tax - power to detain or seize under the UP GST regime - route of transportation not required to be declared under GST - refund of amount deposited under protest and award of costs

Seizure and detention of goods in transit - genuineness of tax invoice and e-way bill - Whether goods and vehicle could be lawfully seized/detained when the consignment was accompanied by genuine tax invoices and e-way bills and the driver's recorded statement did not contradict those documents. - HELD THAT: - The Court found on perusal of the record that the goods were accompanied by genuine tax invoices and e-way bills and that the uploaded GST MOV-01 statement of the truck driver contained no assertion that the goods were to be unloaded at a place not shown on the tax invoices. The power to detain or seize can be exercised only when the goods are not accompanied by genuine documents required under the Act. No cogent material was produced by the authority to support its contention that appropriate documents were absent or false. In those circumstances the impugned seizure/detention and consequent demand under the challenged order could not be sustained. [Paras 9, 11, 12, 15]

Seizure/detention quashed as documents were genuine and no basis was shown for seizure.

Route of transportation not required to be declared under GST - intention to evade tax - Whether deviation from or non-disclosure of the route of transportation can, by itself, justify seizure on the ground of intention to evade tax under the GST regime. - HELD THAT: - The Court noted that unlike the earlier VAT statute, the GST statutory scheme contains no provision obliging a selling dealer to declare the route of transit. The deletion of such a route-disclosure requirement by the legislature indicates that mere movement on a different or operationally convenient route cannot, without more, permit an inference of intention to evade tax. Absent other cogent material showing mala fide transport or fraudulent documents, deviation of route is not a valid ground for seizure. [Paras 10, 15]

Deviation or non-disclosure of route did not justify seizure or an inference of intention to evade tax.

Refund of amount deposited under protest and award of costs - Relief to the petitioner in consequence of quashing the impugned order, including refund of amount deposited under protest and payment of costs. - HELD THAT: - Having quashed the impugned order, the Court directed that the amount deposited by the petitioner under protest be refunded in accordance with law within a specified period. The petition was allowed with a monetary cost to be paid by the State, with liberty granted to the State to recover that cost from the erring officer, reflecting the Court's remedial discretion where seizure/detention is held unlawful. [Paras 15, 16]

Impugned order quashed; deposit to be refunded and costs awarded to the petitioner recoverable from the State and thereafter from the erring officer.

Final Conclusion: Writ petition allowed: impugned detention/seizure order dated 17.8.2021 quashed; amount deposited under protest to be refunded in accordance with law; costs awarded to the petitioner with liberty to recover the same from the erring officer.

Seizure and detention of goods pending verification of buyer's registration - Admissibility of post-detention evidence to prove purchaser's active registration - Levy of penalty and requirement of security under Section 129(3) of the Act - Genuineness of documents accompanying consignment

Seizure and detention of goods pending verification of buyer's registration - Genuineness of documents accompanying consignment - Admissibility of post-detention evidence to prove purchaser's active registration - Whether seizure and detention of the goods was justified despite material showing that the purchaser was a registered and functioning dealer - HELD THAT: - The Court found that the consignment was accompanied by the requisite documents and that subsequent material placed on record - including the purchaser's registration certificate and electronic credit ledger for the period 1.11.2020 to 31.1.2021 - demonstrated that the purchaser was a registered dealer carrying on business. The appellate and assessing authorities proceeded to confirm detention and seizure on the basis that no business activity was found at the disclosed place at the time of inspection, and treated the additional documents as an afterthought. The High Court held that once the material on record established that the purchaser was functional and the documents accompanying the goods were genuine, the authorities were not justified in sustaining seizure of the goods. [Paras 8, 9, 10]

Impugned seizure and detention orders quashed as the materials demonstrated that the purchaser was a registered and functioning dealer and the consignment documents were not shown to be forged or invalid.

Levy of penalty and requirement of security under Section 129(3) of the Act - Admissibility of post-detention evidence to prove purchaser's active registration - Whether demand of security and imposition of penalty under Section 129(3) could be sustained where the purchaser was shown to be a functional registered dealer by documents on record - HELD THAT: - The Court concluded that the appellate authority erred in confirming the demand for security and levy of penalty under Section 129(3) after disregarding documentary evidence - registration certificate and electronic credit ledger - which indicated that the purchaser was carrying on business. The rejection of these documents as an afterthought was not justified where they directly bore upon the legality of the detention and the necessity for security or penalty. Consequently, the requirements of Section 129(3) could not be sustained in the circumstances. [Paras 9, 10]

Demand for security and levy of penalty under Section 129(3) set aside; impugned appellate and assessing orders quashed.

Final Conclusion: Writ petition allowed; the orders dated 11.11.2020 and 21.1.2022 are quashed and the petitioner is entitled to consequential reliefs as recorded in the order.

Detention and seizure of goods during transit - levy of tax and penalty for transporting goods with intention to evade tax - composition scheme - ineligibility for input tax credit - genuineness of e way bill and tax invoice accompanying consignment - cancellation of GST registration and effect on portal access - quashing of adjudicatory order for lack of sustaining material

Composition scheme - ineligibility for input tax credit - levy of tax and penalty for transporting goods with intention to evade tax - genuineness of e way bill and tax invoice accompanying consignment - Validity of the order confirming tax and penalty where the assessee had opted for composition and the e way bill and tax invoice accompanying the goods were not disputed - HELD THAT: - The Court found on the record that the petitioner had opted for the composition scheme, a fact pleaded in the writ petition and not denied by the respondents (paras 11 and 13). Under composition the petitioner could not avail input tax credit; consequently the core rationale for treating the movement as intended to evade tax or to wrongly avail credit did not arise. The genuineness of the e way bill and tax invoice accompanying the consignment was not disputed and the department's finding that the cancelled GSTIN appeared on the portal did not, in the circumstances, furnish a sustainable basis for confirming tax and penalty. Applying these findings, the Court concluded that the impugned adjudicatory order could not be sustained and therefore quashed it (paras 11, 12, 13, 15, 16). [Paras 11, 12, 13, 15, 16]

Order confirming tax and penalty quashed as unsustainable where petitioner was on composition and invoices/e way bill were genuine

Cancellation of GST registration and effect on portal access - detention and seizure of goods during transit - Permissibility of raising for the first time a contention that cancellation of registration was procedurally invalid when no pleading was made to that effect - HELD THAT: - The Court noted that the petitioner did not plead before the writ court that the statutory procedure for cancellation had not been followed and therefore did not raise the contention in the pleadings (para 14). On that basis the Court declined to permit the petitioner to advance the argument for the first time in the writ petition and rejected it as a belated, unpleaded challenge (para 14). [Paras 14]

Argument regarding defective cancellation procedure rejected as not pleaded and raised for the first time

Final Conclusion: Writ petition allowed; impugned order dated 22.11.2019 quashed and petition succeeds with consequential reliefs.

Show-cause notice under Section 74 of the U.P. GST Act - participation in proceedings - filing of objections - personal hearing - pass appropriate orders in accordance with law

Show-cause notice under Section 74 of the U.P. GST Act - filing of objections - personal hearing - pass appropriate orders in accordance with law - Writ petition challenging the show-cause notice disposed directing participation in statutory proceedings and adjudication after objections and hearing. - HELD THAT: - The Court observed that the impugned notice is a show-cause notice issued under Section 74 of the U.P. GST Act and declined to adjudicate the legality of the notice on merits. Instead, the petition is disposed by directing the petitioner to participate in the statutory proceedings and to file objections to the notice within two weeks. Upon receipt of objections, respondent no.2 is directed to afford due opportunity of personal hearing and thereafter proceed to consider the objections and pass appropriate orders in accordance with law. The order leaves determination of the substantive legality or correctness of the notice to the adjudicatory process prescribed under the statute.

Petition disposed; petitioner to file objections within two weeks; respondent no.2 to give personal hearing and pass appropriate orders in accordance with law.

Final Conclusion: The writ petition is disposed by directing the petitioner to file objections to the Section 74 show-cause notice within two weeks and by directing respondent no.2 to consider those objections after affording personal hearing and to pass appropriate orders in accordance with law.

Maintainability of writ petition in presence of alternative statutory remedy - Availability of efficacious alternative remedy of appeal under Section 107 - Bypass of statutory remedy only in exceptional circumstances - Procedural impropriety / compliance with principles of natural justice - Power of Appellate Authority to condone delay and decide appeal on merits

Maintainability of writ petition in presence of alternative statutory remedy - Bypass of statutory remedy only in exceptional circumstances - Procedural impropriety / compliance with principles of natural justice - Writ petitions challenging the assessment and penalty order were not maintainable and were dismissed on the ground of availability of an efficacious alternative remedy by way of appeal. - HELD THAT: - The Court examined the proceedings leading to the impugned order and recorded that the statutory forum of appeal under Section 107 had been provided by the statute for redressal of grievances. The Court found no procedural impropriety or breach of principles of natural justice in the impugned order and observed that none of the recognized exceptions permitting bypass of the statutory remedy were attracted. In these circumstances, the existence of an effective statutory appeal rendered the writ petitions inappropriate for interference under Article 226, and the petitions were dismissed on that ground. [Paras 7, 8]

Writ petitions dismissed for want of maintainability; petitioner directed to avail remedy of appeal under Section 107.

Availability of efficacious alternative remedy of appeal under Section 107 - Power of Appellate Authority to condone delay and decide appeal on merits - The Court granted liberty to the petitioner to file the statutory appeal within a limited time and directed the Appellate Authority to waive limitation and decide the appeal on merits after affording personal hearing. - HELD THAT: - Although the writ petitions were dismissed for want of maintainability, the Court exercised equitable discretion to permit the petitioner a three-week period to file the appeal before the Appellate Authority. The Court directed that if the appeal is filed within the time allowed, the Appellate Authority shall ignore the limitation bar, accord personal hearing to the petitioner, and decide the appeal on merits in accordance with law. [Paras 8, 9]

Petitioner granted three weeks' liberty to file appeal; Appellate Authority directed to condone delay and decide the appeal on merits after personal hearing.

Final Conclusion: The writ petitions were dismissed as not maintainable owing to the availability of an effective statutory appeal under Section 107 for the disputed assessment relating to financial year 2017-18; petitioner granted three weeks to file the appeal and the Appellate Authority directed to condone limitation (if invoked) and adjudicate the appeal on merits after personal hearing.

Input tax credit - difference between GSTR-2A and GSTR-3B - denial of credit solely on GSTR-2A discrepancy - remand for fresh examination of evidence - opportunity of hearing to substantiate claim - bonafide and genuine claim

Input tax credit - difference between GSTR-2A and GSTR-3B - denial of credit solely on GSTR-2A discrepancy - Denial of input tax credit solely on the ground of mismatch between Form GSTR-2A and Form GSTR-3B is not sustainable. - HELD THAT: - The Court, having considered the decisions referred to including the Supreme Court and High Court precedents, held that a mere difference between the entries in Form GSTR-2A and Form GSTR-3B cannot, by itself, justify denial of the assessee's claim for input tax credit. The assessment order which rejected credit on that sole basis was found unsustainable. The Court directed that the assessing authority must not treat absence of corresponding entries in GSTR-2A as an automatic bar to the claim, but must consider the claim on its merits and on the evidence adduced by the assessee. [Paras 2]

The denial of input tax credit only because GSTR-2A did not reflect the tax is set aside.

Remand for fresh examination of evidence - opportunity of hearing to substantiate claim - bonafide and genuine claim - The matter is remanded to the assessing authority to afford opportunity and examine the assessee's evidence and pass fresh orders on the claim for input tax credit. - HELD THAT: - The Court directed that the assessing authority must give the petitioner an opportunity to appear and produce all evidence in support of the claim. If, after examination of the evidence, the assessing authority is satisfied that the claim is bonafide and genuine, input tax credit should be allowed. The remand requires fresh adjudication of the claim on the basis of the material produced by the petitioner, irrespective of the state of entries in Form GSTR-2A, and consequent passing of a fresh order in accordance with law. [Paras 3, 4]

Matter remitted to the Assessing Authority for fresh examination; petitioner directed to appear and produce evidence on the appointed date.

Final Conclusion: Writ petition allowed; impugned assessment order set aside insofar as it denied input tax credit solely on a GSTR-2A/GSTR-3B mismatch. Matter remitted to the assessing authority to afford the petitioner an opportunity, examine the evidence irrespective of GSTR-2A, and pass fresh orders in accordance with law.

Right of an aggrieved person to file an appeal - effect of payment of tax and penalty by a third party on maintainability of appeal - quashing of administrative notation refusing to entertain appeal - no bar in statute to appeal by person against whom order is passed despite payment by another - no objection as to limitation where bona fide proceedings pursued before court

Right of an aggrieved person to file an appeal - effect of payment of tax and penalty by a third party on maintainability of appeal - Petitioner entitled to file an appeal against the Order-in-Original despite tax and penalty being paid by the goods owner on petitioner's behalf. - HELD THAT: - The Order in Original under Section 129(1) was passed against the Petitioner. The fact that M/s. Blue Star Ltd., the owner of the goods, deposited the tax and penalty to secure release of the goods does not alter the identity of the aggrieved person. Payment made by the owner was for and on behalf of the Petitioner and was subsequently deducted from the Petitioner's account; there is no provision in the statute which precludes a person against whom an order is passed from filing an appeal merely because another person effected the payment. Accordingly, the appellate authority was not justified in refusing to take the proposed appeal on record on the ground that the deposit was made by a third party. The Court therefore quashed the notation refusing to admit the appeal and directed that the Petitioner be permitted to file the appeal which must be taken on record and adjudicated on merits. [Paras 11, 12, 13]

Quash notation refusing to admit appeal; Petitioner may file appeal which Respondent No.1 shall admit and decide on merits.

No objection as to limitation where bona fide proceedings pursued before court - Respondent directed not to raise limitation objection to the appeal as the Petitioner was pursuing bona fide remedy before the Court. - HELD THAT: - Given that the Petitioner pursued the present writ petition challenging the refusal to admit the appeal, the Court directed that Respondent No.1 shall take the appeal on record and adjudicate it without raising any objection as to limitation. The appellate authority was required to adjudicate the appeal expeditiously. [Paras 13]

Respondent No.1 to admit and adjudicate the appeal without objection as to limitation and expeditiously.

Final Conclusion: Notation refusing to admit the proposed appeal is quashed; Petitioner permitted to file the appeal which Respondent No.1 shall admit and decide on merits without limitation objection and expeditiously.

Service of notice - intimation of change of address on statutory portal - principles of natural justice - personal hearing - quash and remit - opportunity of hearing before adjudication

Service of notice - intimation of change of address on statutory portal - principles of natural justice - personal hearing - Validity of service of the Show Cause Notice and consequent breach of natural justice resulting in the impugned order - HELD THAT: - The Court found as a fact that the petitioner had shifted his place of business prior to issuance of the Show Cause Notice and had intimated the new address on the GST web portal on 07.04.2022. Notices and personal hearing calls were sent to the earlier address and remained unserved. Because the proceedings continued without proper service and without affording the petitioner the opportunity of personal hearing at the correct address, the impugned Order-in-Original was passed in breach of the principles of natural justice. The absence of effective service and failure to afford the petitioner a hearing vitiated the order under challenge. [Paras 8, 9]

Impugned order quashed for want of proper service and violation of natural justice

Quash and remit - opportunity of hearing before adjudication - Remand for fresh adjudication and procedural directions to be followed on remand - HELD THAT: - Having quashed the impugned order on procedural grounds, the Court directed that the matter be remitted to the respondents for fresh decision on merits and in accordance with law. The respondents were required to pass a fresh order within eight weeks from receipt of the copy of the Court's order, after hearing the petitioner. The impugned order was to be treated as a corrigendum to the original Show Cause Notice dated 28.04.2022, and the petitioner was directed to file a reply to the Show Cause Notice within four weeks. [Paras 9, 10, 11]

Matter remitted for fresh adjudication; petitioner to be heard; timelines fixed for reply and for passing fresh order

Final Conclusion: The writ petition is allowed: the adjudication order is quashed for defective service and breach of natural justice and the case is remitted for fresh adjudication after affording the petitioner an opportunity of hearing, with timelines prescribed for filing reply and disposal.

Summary order. Writ petitions dismissed as infructuous; petitioner at liberty to take action as per law; no costs.

Show cause notice - adjudication of demand - preservation of contentions for adjudication - right to file detailed reply - application for refund - direction to decide within time frame

Show cause notice - adjudication of demand - preservation of contentions for adjudication - Whether further adjudication of the writ petition should proceed in view of issuance of the show cause cum demand notice. - HELD THAT: - The Court noted that a show cause cum demand notice dated 16 March 2023 was issued to the petitioners during pendency of the petition and that the petitioners filed only a preliminary reply on 20 June 2023. In view of the pendency of the statutory adjudicatory proceedings, the Court held that further adjudication of the petition was not called for and expressly kept all contentions of the petitioners open to be agitated before the adjudicating authority during disposal of the show cause notice. The Court therefore declined to entertain substantive adjudication in the writ proceedings while leaving legal issues available for the statutory forum. [Paras 2]

Petition not further adjudicated; all contentions kept open for adjudication of the show cause notice.

Right to file detailed reply - show cause notice - Procedure and timeline for the petitioners to file a detailed reply and for the respondents to consider any subsequent application arising from deposits earlier made by the petitioners. - HELD THAT: - The Court recorded the petitioners' intention to file a detailed reply within two weeks and permitted them to do so. The Court also noted that the petitioners seek to apply for refund of an amount deposited in 2020 and directed that such application, if made within two weeks, be considered by the respondents and appropriate orders be passed. The Court refrained from expressing any opinion on the rival contentions and confined itself to procedural directions facilitating adjudication and any refund application. [Paras 1, 3, 4]

Petitioners permitted to file detailed reply within two weeks; respondents to consider any refund application filed within that period and pass appropriate orders.

Direction to decide within time frame - adjudication of demand - Whether the adjudicating authority should be directed to conclude proceedings arising from the show cause notice within a specified time. - HELD THAT: - Having observed the issuance of the show cause notice and the petitioners' preliminary reply, the Court directed that, in view of the peculiar facts and circumstances, the show cause notice be adjudicated to its logical conclusion within six months from the date on which the final reply is filed. This is a supervisory direction to ensure timely disposal of the statutory adjudication without determining merits. [Paras 5]

Show cause notice to be adjudicated within six months from filing of the final reply.

Final Conclusion: Writ petition disposed of without substantive adjudication in view of pending show cause notice; petitioners may file detailed reply within two weeks and may apply for refund (to be considered by respondents), and the show cause notice is directed to be finally adjudicated within six months of the final reply.

Summary order. Petition seeking permission to amend GSTR I under Section 38(5) of the WBGST Act, 2017 not finally adjudicated; affidavit of service kept on record; respondents granted time to obtain instructions; matter listed for further consideration on 31st July, 2023.

Interim stay of administrative orders - continuation of tax payment pending adjudication - application of rates as previously charged or as per GST Council decision - requirement of payment of process fee for issuance of notice - service of additional copy on tax authority

Requirement of payment of process fee for issuance of notice - consequences of non-payment of process fee - Issue of notice to the respondents conditioned on payment of process fee within seven days and dismissal if not complied with - HELD THAT: - The Court directed that notice be issued to the respondents only upon payment of the process fee within seven days. The order expressly records that failure to pay the process fee within the stipulated period will result in dismissal of the writ petition without further reference to the Bench. This is a procedural condition precedent to continuation of the petition and was imposed as part of the Court's interlocutory directions.

Notice to respondents issued on condition that process fee is paid within seven days; non-compliance will lead to dismissal of the petition.

Interim stay of administrative orders - orders passed by Assistant Commissioner, Commercial Tax - Stay of operation and effect of orders dated 05.08.2022 and 26.12.2022 passed by the Assistant Commissioner, Commercial Tax, Bhopal Circle - 5, Bhopal, as an interim measure - HELD THAT: - Relying on the fact that similar questions of law are pending in other writ petitions where interim relief was granted, the Court granted an interim stay of the operation and effect of the specified orders until the next date of hearing. The stay is interlocutory and limited to preserving the status quo pending adjudication of the writ petition.

Effect and operation of the specified orders stayed till the next date of hearing.

Continuation of tax payment pending adjudication - application of rates as previously charged or as per GST Council decision - Direction that the petitioner shall continue to pay tax on ENA at rates previously charged or as fixed by the GST Council notwithstanding the interim stay - HELD THAT: - While staying the operation of the impugned orders, the Court imposed an interim condition requiring the petitioner to continue paying tax on Extra Neutral Alcohol at either the rates historically charged by the authority or at rates determined by the GST Council. This condition aligns the interim relief with protection of revenue and mirrors relief granted in other cognate petitions mentioned by the Court.

Petitioner to continue paying tax on ENA at past rates or as per GST Council decision during the interim period.

Service of additional copy on tax authority - Direction to supply an additional copy of the petition and annexures to the Central GST Advocate - HELD THAT: - The Court directed that an additional copy of the petition with all annexures be supplied to the Advocate for Central GST within a week to ensure proper service and participation of the tax authority in subsequent proceedings. This is an ancillary procedural direction to facilitate adjudication.

Petition and annexures to be supplied to the Central GST Advocate within one week.

Final Conclusion: Notice to respondents ordered subject to payment of process fee within seven days on pain of dismissal; interim stay granted on the operation of the Assistant Commissioner's orders dated 05.08.2022 and 26.12.2022 until the next hearing, subject to the petitioner continuing to pay tax on ENA at previously charged rates or as per the GST Council; additional copy to be supplied to Central GST.

Cancellation of GST registration - show cause notice - principles of natural justice - opportunity of being heard - quasi-judicial function - fairness and reasonableness - fresh show cause with specific period of non-filing

Show cause notice - principles of natural justice - cancellation of GST registration - quasi-judicial function - fairness and reasonableness - Validity of Ext.P2 show cause notice and Ext.P4 order cancelling the petitioner's GST registration - HELD THAT: - The Court found that Ext.P2 was vague and issued without application of mind because it did not specify the particular months of failure to file returns. The petitioner filed the March 2022 GSTR 3B return on 3.11.2022 after issuance of Ext.P2 but before Ext.P4. Neither Ext.P2 nor Ext.P4 adverted to the subsequent filing or specified the periods of non-filing, thereby denying the petitioner a fair opportunity of defence. Quasi judicial authorities must act with fairness, openness and reasonableness; issuance of a non-specific show cause notice and finalisation of cancellation without providing an opportunity to meet the specific allegations amounted to a breach of the principles of natural justice. For these reasons the impugned show cause notice and cancellation order were held to be legally untenable and liable to be quashed. [Paras 6, 7, 9]

Exts.P2 and P4 are quashed for being vague, lacking application of mind and for violating the principles of natural justice; the cancellation of registration is set aside.

Fresh show cause with specific period of non-filing - opportunity of being heard - Procedure to be followed on remand for reconsideration of registration cancellation - HELD THAT: - The Court directed that the respondents are at liberty to issue a fresh show cause notice which must specifically mention the period during which returns were allegedly not filed. If such a fresh notice is issued, the respondents must afford the petitioner a fair and reasonable opportunity to submit his defence and be heard before finalising the proceedings. The direction preserves the respondents' power to proceed but mandates specificity in allegations and compliance with the right to be heard. [Paras 9]

Respondents may issue a fresh show cause notice specifying the months of non-filing and must grant the petitioner a fair and reasonable opportunity of being heard before final disposal.

Final Conclusion: Writ petition allowed; impugned show cause notice and cancellation order quashed. Respondents may, if they choose, initiate fresh proceedings by issuing a specific show cause notice identifying the period(s) of alleged non-filing and by affording the petitioner a fair opportunity to be heard before passing any final order.

Notice under Section 148A(b) - show cause notice - Obligation to supply material relied upon with notice under Section 148A(b) - Enquiry under Section 148A(a) and supply of enquiry report - Order under Section 148A(d) - decision to reopen assessment - Quashing of notice and order for failure to furnish relied documents - Remand for fresh consideration after furnishing relied documents

Notice under Section 148A(b) - show cause notice - Obligation to supply material relied upon with notice under Section 148A(b) - Enquiry under Section 148A(a) and supply of enquiry report - Validity of the show-cause notice issued under Section 148A(b) where the assessing officer did not enclose or supply the material and supporting documents on which the notice relied. - HELD THAT: - The Court held that a notice under Section 148A(b) is in the nature of a show-cause notice and the assessing officer must supply the entire material and information relied upon to the assessee along with the notice so as to enable an effective response. While conducting an enquiry is not a mandatory pre-condition to issue the notice, if an enquiry is in fact conducted the report or the material gathered in that enquiry must be furnished with the notice. In the present case the notice referred to enclosures containing details of information/enquiry but no enclosures were supplied; subsequent enquiries and information that came to light after issuance of the notice were relied upon in the later order without having been furnished to the petitioner. That failure frustrated the statutory purpose of Section 148A(b) and rendered the show-cause notice invalid. [Paras 6, 7, 8, 9, 10]

The show-cause notice under Section 148A(b) for Assessment Year 2019-20 was quashed for non-supply of the material and supporting documents on which it relied.

Order under Section 148A(d) - decision to reopen assessment - Quashing of notice and order for failure to furnish relied documents - Remand for fresh consideration after furnishing relied documents - Validity of the order under Section 148A(d) and the consequential notice under Section 148 where the order relied upon information not furnished to the assessee and where enquiries appear to have been conducted after issuance of the show-cause notice. - HELD THAT: - The Court examined the impugned order under Section 148A(d) and found that it was substantially based on a new piece of information uploaded on the Insight portal and other material which were not furnished to the petitioner at the time the show-cause notice was issued. The respondents' contention that no third-party enquiry was conducted was inconsistent with the impugned order which records enquiries and reliance on RMS/Form 61A material. Given that the order relied upon material not disclosed to the assessee and that some enquiry was conducted after issuance of the notice, the order under Section 148A(d) and the consequential notice under Section 148 were set aside. The Court remitted the matter to the assessing officer to supply all documents and material on which the Section 148A(b) notice was or is to be based and to pass a fresh order strictly in accordance with law and the departmental circular, giving the assessee an opportunity to reply. [Paras 7, 8, 11, 15]

The order under Section 148A(d) and the consequent notice under Section 148 for Assessment Year 2019-20 were quashed; the matter was remitted to the assessing officer to furnish the relied-upon material and to decide afresh in accordance with law.

Final Conclusion: The writ petition is allowed: the notice under Section 148A(b), the order under Section 148A(d), and the consequential notice under Section 148 for Assessment Year 2019-20 are quashed for failure to furnish material relied upon; the matter is remitted to the assessing officer to supply all relied-upon documents and to pass a fresh order strictly in accordance with law.

Penalty under Section 271(1)(c) - Sales tax exemption characterised as capital receipt - Sales tax exemption characterised as revenue receipt - Debatable question of characterization of subsidy/grant - Finality of earlier tribunal order

Penalty under Section 271(1)(c) - Debatable question of characterization of subsidy/grant - Penalty under Section 271(1)(c) could not be sustained for the claim of sales tax exemption treated as a capital receipt where the nature of the receipt was a debatable question of law. - HELD THAT: - The Tribunal and the Commissioner (Appeals) found that the assessee had treated the sales tax exemption as a capital receipt and that the issue whether the exemption/subsidy was capital or revenue was debatable. Reliance was placed on precedents holding that merely making a claim unsustainable in law does not, by itself, constitute furnishing inaccurate particulars of income attracting penalty. The Commissioner (Appeals) had earlier deleted penalty for assessment years 2005-2006 and 2006-2007 on the identical issue, and the Tribunal noted that those decisions were not challenged before the Supreme Court and had attained finality. In this factual and legal context, imposition of penalty under Section 271(1)(c) was held to be impermissible. [Paras 4, 5, 6]

Penalty under Section 271(1)(c) deleted as the characterization of the sales tax exemption was a debatable question and did not amount to furnishing inaccurate particulars of income.

Sales tax exemption characterised as capital receipt - Finality of earlier tribunal order - No substantial question of law arises from the appeal challenging the deletion of penalty, and the appeals are liable to be dismissed. - HELD THAT: - The Court observed that the main controversy concerned the interpretation whether the sales tax exemption constituted a capital or revenue receipt. As that issue involved a contestable legal view and earlier tribunal/orders on identical issues for related assessment years had attained finality (and were not appealed to the Supreme Court), there was no room for interference. Consequently, the Court found no substantial question of law warranting admission of the appeal. [Paras 7, 8]

Appeals dismissed; no substantial question of law arises and impugned orders need no interference.

Final Conclusion: The appeals are dismissed. The deletion of penalty under Section 271(1)(c) was upheld because the classification of the sales tax exemption as capital or revenue was a debatable legal question and earlier orders on the identical issue had attained finality.

Revision under section 263 - erroneous and prejudicial to the interests of revenue - deduction under section 80P(2)(d) - exemption under section 80P(2)(a)(i) - plausible or debatable view - condonation of delay

Condonation of delay - Condonation of 444 days' delay in institution of the appeal. - HELD THAT: - The Tribunal considered the assessee's explanation for delay and, applying settled principles (including Collector Land Acquisition v. MST Katiji and the Bombay High Court in CIT v. Velingkar Brothers as cited by the Tribunal), found the reasons sufficient in the interest of justice. Consequently the objection of the Revenue to the belated filing was dismissed and the delay condoned. [Paras 4]

Delay of 444 days condoned and appeal admitted for hearing.

Revision under section 263 - erroneous and prejudicial to the interests of revenue - deduction under section 80P(2)(d) - exemption under section 80P(2)(a)(i) - plausible or debatable view - Validity of the Pr. CIT's revision under section 263 to set aside the assessment for alleged failure to examine eligibility of interest/dividend on investments with cooperative banks for exemption/deduction under section 80P. - HELD THAT: - The Tribunal held that power under section 263 can be exercised only where the assessment order is both erroneous and prejudicial to the revenue and that the error must be one which is not a debatable or plausible view. The record showed that the interest/dividend was earned from cooperative banks (which are a species of cooperative societies) and that the issue of entitlement to deduction/exemption under sections 80P(2)(d) and 80P(2)(a)(i) had been considered in favour of the assessee by coordinate-bench precedents of the Tribunal. Because a plausible view favourable to the assessee existed and the matter was covered by judicial precedents, the assessment could not be characterised as erroneous and prejudicial to revenue so as to justify revision. Following the coordinate-bench decisions and applying the principle that a revisional order cannot be sustained where the Assessing Officer has adopted a plausible view, the Tribunal quashed the revisionary order. [Paras 5, 6]

Order of revision under section 263 quashed; grounds of appeal on merits allowed.

Final Conclusion: The Tribunal condoned the delay in filing the appeal and, on merits, quashed the Pr. CIT's revision under section 263 - holding that the Assessing Officer's view on entitlement to deduction/exemption under section 80P was a plausible view and the issue was covered by judicial precedents; appeal allowed.

Revisionary power under section 263 of the Income-tax Act - Erroneous order prejudicial to the interests of the revenue - Deduction of tax at source under section 195 of the Income-tax Act - Permanent establishment and tax residency evidence - Assessing Officer's failure to examine material / apply mind

Revisionary power under section 263 of the Income-tax Act - Assessing Officer's failure to examine material / apply mind - Validity of invocation of Commissioner's revisionary jurisdiction under section 263 against the assessment order dated 25.12.2019 - HELD THAT: - On calling and examining the assessment record the Pr. CIT found absence of any discussion by the Assessing Officer on the significant issue of non-deduction of tax at source on foreign brokerage payments and noted the tax audit report recording non-deduction u/s 195. Declarations and tax residency certificates proving non-resident status and absence of permanent establishment were not present in the assessment record and were filed only before the Pr. CIT. Section 263 empowers the Commissioner to call records and, if an order is found to be erroneous and prejudicial to revenue, to make inquiry and pass appropriate orders. Given the AO did not call for or examine details of non-resident brokers or the basis for non-deduction when the reasons for scrutiny explicitly included foreign remittances and disproportionate remittance relative to income, the Pr. CIT was within jurisdiction to invoke section 263 and issue notice and inquiry. The Tribunal accordingly dismissed the assessee's grounds challenging invocation of section 263. [Paras 9]

Invocation of revisionary jurisdiction under section 263 was valid and sustainable.

Erroneous order prejudicial to the interests of the revenue - Deduction of tax at source under section 195 of the Income-tax Act - Permanent establishment and tax residency evidence - Whether the assessment order was erroneous and prejudicial to revenue for failing to examine non-deduction of TDS on brokerage to non-resident brokers and whether the matter required remand for fresh assessment - HELD THAT: - It was an admitted fact that substantial brokerage in foreign currency was paid to alleged non-resident brokers and no TDS was deducted. The assessment order neither records any enquiry into the identity of the non-resident recipients nor contains the declarations or tax residency certificates that would establish absence of a permanent establishment in India. The AO had also not called for the details of parties and the basis for calculation of brokerage despite scrutiny reasons highlighting foreign remittances and the disproportion between such remittances and the assessee's income. By failing to seek or examine these materials, the AO's order amounted to an order passed without application of mind on a revenue-significant issue and therefore was erroneous and prejudicial. The Tribunal held that the Pr. CIT rightly set aside the assessment and directed the AO to examine the issue and frame fresh assessment; the detailed verification of each non-resident party is to be undertaken by the AO. [Paras 10, 11, 12]

Assessment order held erroneous and prejudicial to revenue; matter remanded to the AO for fresh examination and assessment on the specified issue.

Final Conclusion: The Tribunal dismissed the appeal; the Pr. CIT was justified in invoking section 263, the assessment was held erroneous and prejudicial for failure to examine non-deduction of TDS on foreign brokerage payments, and the AO was directed to re-examine and frame fresh assessment.

Condonation of delay in filing appeal - application of Supreme Court suo motu directions on limitation (15/03/2020 to 28/02/2022) - foreign tax credit - prima facie right under DTAA to credit taxes paid abroad - reading down subordinate rules to conform with overriding treaty obligation - directory nature of procedural requirement for claiming foreign tax credit (Rule 128(9) / Form 67)

Condonation of delay in filing appeal - application of Supreme Court suo motu directions on limitation (15/03/2020 to 28/02/2022) - Delay of 710 days in preferring appeal to CIT(A) was condoned. - HELD THAT: - The Tribunal found that the limitation rule laid down by the Hon'ble Supreme Court in its suo motu proceedings (M.A.No.21/2022 in M.A.No.665/2021 in SMW(C) No.3 of 2020), which provided that where limitation expired between 15/03/2020 and 28/02/2022 all persons shall have a limitation period of 90 days from 01/03/2022 (or the longer actual balance period), applied to the present appeal. On that basis, and having regard to the assessee's explanation linked to the pandemic and that a rectification proceeding under section 154 was pursued before CPC, the Tribunal concluded that sufficient cause existed to condone the delay and admitted the appeal for adjudication on merits (paras 9-10). [Paras 9, 10]

Delay condoned and appeal admitted for adjudication on merits.

Foreign tax credit - prima facie right under DTAA to credit taxes paid abroad - reading down subordinate rules to conform with overriding treaty obligation - directory nature of procedural requirement for claiming foreign tax credit (Rule 128(9) / Form 67) - Foreign Tax Credit claimed by the assessee was allowed; Rule 128(9) of the Rules cannot be applied to deny the credit where DTAA confers the right. - HELD THAT: - The Tribunal examined Article 25(2)(a) of the India-USA DTAA, which requires India to allow as a deduction from Indian tax an amount equal to tax paid in the United States, and observed that this treaty provision overrides inconsistent domestic rules. The Tribunal held that Rule 128(9) and the filing formalities relating to Form 67 are to be read as directory and cannot operate to deny the substantive right granted by the DTAA. Relying on precedent of co-ordinate Benches and reasoning in cases cited by the assessee, the Tribunal read down Rule 128(9) so as to conform with the treaty obligation and allowed the FTC claim (paras 11-13). [Paras 11, 12, 13]

FTC claim allowed; Rule 128(9) read down so as not to defeat DTAA entitlement.

Final Conclusion: The Tribunal condoned the delayed filing of the appeal under the Supreme Court's suo motu directions, proceeded to decide the appeal on merits and allowed the assessee's claim for foreign tax credit, holding that procedural non-compliance under Rule 128(9) / Form 67 cannot defeat the entitlement conferred by the India-USA DTAA.

Section 56(2)(viib) - Rule 11UA - fair market value of unquoted shares - Discounted Cash Flow (DCF) valuation - NAV method as fallback when DCF is unsubstantiated - Assessing Officer's power to reject valuer's report where projections lack verification

Section 56(2)(viib) - Rule 11UA - fair market value of unquoted shares - Discounted Cash Flow (DCF) valuation - Assessing Officer's power to reject valuer's report where projections lack verification - Whether the share premium received on issue of preference shares is exigible to tax under section 56(2)(viib) for A.Y. 2016-17 by treating the premium as in excess of fair market value. - HELD THAT: - The Tribunal upheld the conclusion of the authorities below that the share premium credited by the assessee exceeded the fair market value and was thus taxable under section 56(2)(viib). The assessee relied on a valuation using DCF prepared by a CA, but the AO found the DCF projections to be speculative and unsupported by contemporaneous evidence (for example, variance between projected and actual results and absence of advance tax payments), and therefore not satisfactory proof of FMV. Rule 11UA prescribes methods for determining FMV of unquoted shares, including valuation by a merchant banker/accountant using DCF, but the Court accepted the legal position that such valuation is not sacrosanct and may be rejected where the underlying data and projections cannot be verified. The Tribunal found the facts analogous to precedents where DCF results were rejected for lack of substantiation and the AO was justified in resorting to NAV (or treating face value) when DCF could not be reliably verified. The Tribunal also rejected the assessee's contention that the AO was obliged to refer the matter to the Departmental Valuation Officer where the valuation report itself was not supported by verifiable material, noting that referral would be futile absent verifiable data for scrutiny. Applying these principles to the material on record, the Tribunal agreed that the premium received was in excess of FMV and the addition under section 56(2)(viib) was justified. [Paras 3, 4, 8, 9]

Addition under section 56(2)(viib) confirmed; appeal dismissed.

Final Conclusion: The Tribunal dismissed the assessee's appeal for A.Y. 2016-17, upholding the addition under section 56(2)(viib) on the ground that the DCF-based valuation was unsubstantiated and the AO was justified in treating the share premium as exceeding fair market value.

Ownership of seized cash - unexplained cash under section 69A read with section 115BBE - burden of explanation on person in possession of requisitioned cash - acceptance of past tax filings and claim of past savings as source - principle of human probabilities - reasonable opportunity and natural justice in adducing evidence

Ownership of seized cash - unexplained cash under section 69A read with section 115BBE - burden of explanation on person in possession of requisitioned cash - Whether the addition of the seized cash as unexplained income in the hands of the assessee could be sustained without examining the assessee's alternate explanation that the cash was his past savings - HELD THAT: - The Tribunal accepted that the Assessing Officer recorded a finding that the cash belonged to the assessee and rejected the initial explanation that the cash belonged to third parties. Once the AO so found, the onus shifted to the assessee to explain the source. The assessee submitted an alternate explanation-viz., that the seized cash comprised savings accumulated and reflected in past tax filings accepted by the Revenue. The Tribunal held that this alternate explanation could not be summarily rejected at the appellate stage as being merely contradictory to the earlier statement. The explanation based on accepted past returns and claimed past savings is part of the record and requires verification. The appellate authority's confirmation of the addition without fresh examination of the alternate contention and without affording reasonable opportunity to the assessee to substantiate the claimed source was held to be inappropriate. Accordingly, the matter was set aside for fresh consideration of the alternate contention regarding source of cash, with directions to provide the assessee a reasonable opportunity to produce or verify material relied upon.

Addition not finally adjudicated; matter remanded to the CIT(A) to examine afresh the assessee's alternate contention that the seized cash is explained by past savings reflected in accepted returns, after giving reasonable opportunity.

Reasonable opportunity and natural justice in adducing evidence - acceptance of past tax filings and claim of past savings as source - Whether the assessee was denied sufficient opportunity and whether appellate confirmation could stand where the assessee relied on the availability of past savings verified by accepted returns - HELD THAT: - The Tribunal noted that the assessee contended lack of opportunity because statements of third parties were recorded earlier and certain documents were furnished to him after a gap, and that assessment order was passed shortly after filing the return. The CIT(A) did not record specific findings addressing these contentions and simply confirmed the AO's conclusion. The Tribunal emphasised that when an alternate explanation based on past accepted returns is put forward, the appellate authority must examine it on the material and afford reasonable opportunity to the assessee to substantiate the claim rather than dismissing it as an afterthought without enquiry.

Findings of insufficient opportunity were not dealt with by the CIT(A); remand ordered so the appellate authority may give the assessee reasonable opportunity and examine the contention linked to accepted past returns and claimed savings.

Final Conclusion: The Tribunal set aside the confirmatory order and remanded the matter to the CIT(A) to examine afresh the assessee's alternate explanation that the seized cash represented past savings reflected in accepted returns, after providing a reasonable opportunity to the assessee; the appeal was allowed for statistical purposes.

Admissibility and evidential weight of seized digital records (WhatsApp chats) - presumption of correctness under section 292C in respect of seized documents - onus on the assessee to rebut statutory presumption - treatment of undisputed on-money receipts as taxable

Admissibility and evidential weight of seized digital records (WhatsApp chats) - presumption of correctness under section 292C in respect of seized documents - onus on the assessee to rebut statutory presumption - Addition of alleged on-money receipts of Rs. 3,00,000/- made in the assessment of M/s. Mittal Projects was upheld. - HELD THAT: - The tribunal recorded that WhatsApp chats seized from the assessee's authorised staff were not disputed by the assessee and that authorised persons had confirmed collection of cash payments. The seized digital material falls within the definition of seized 'books' and attracts the statutory presumption of correctness under section 292C. In these circumstances, and in the absence of any successful rebuttal by the assessee or other corroborative evidence negating the chats, the addition based on those seized communications was affirmed. [Paras 6, 7]

Appeal dismissed and the addition of Rs. 3,00,000/- on account of alleged on-money receipts confirmed.

Admissibility and evidential weight of seized digital records (WhatsApp chats) - presumption of correctness under section 292C in respect of seized documents - onus on the assessee to rebut statutory presumption - treatment of undisputed on-money receipts as taxable - Addition of alleged on-money receipts of Rs. 7,53,000/- made in the assessment of M/s. Jindal Mittal Griha Nirman Pvt. Ltd. was upheld (subject to earlier relief of Rs. 5,00,000 granted by CIT(A)). - HELD THAT: - The tribunal noted that the on-money payments emerged from material seized at the assessee's premises and that the assessee could not rebut the statutory presumption under section 292C as to the correctness of the seized documents. Given that the burden to displace the presumption lies on the assessee and no successful rebuttal was shown, the additions sustained by the Assessing Officer and partly confirmed by the CIT(A) were maintained for the remaining amounts. [Paras 8, 9]

Appeal dismissed and the balance additions totalling Rs. 7,53,000/- (after relief granted by CIT(A)) upheld.

Final Conclusion: Both appeals for AY 2019-20 are dismissed; the Tribunal confirmed the additions based on undisputed seized WhatsApp communications, applying the statutory presumption under section 292C and noting the assessee's failure to rebut that presumption.

Arm's length principle - transfer pricing adjustment - associated enterprise - specified domestic transaction - remand to AO/TPO for fresh consideration - restriction of disallowance under section 14A to exempt income - deduction under section 37 - sponsorship/brand promotion as revenue expenditure - reimbursement of seconded employee costs - not FTS where secondment constitutes employment - protective addition - depreciation on goodwill

Arm's length principle - transfer pricing adjustment - remand to AO/TPO for fresh consideration - Whether the management/service fee of Rs.6,00,00,000 paid to Heineken International B.V. is at arm's length - HELD THAT: - The Tribunal observed that on similar facts it had earlier set aside the TPO's conclusion that ALP is nil and directed fresh consideration with reference to established principles for benchmarking intra-group services. The Tribunal found that documentary material filed by the assessee required correlation with the claimed services and that the question whether services were received and the benefit derived must be examined by AO/TPO with opportunity to the assessee. Accordingly the Tribunal remitted the matter to the AO/TPO for fresh consideration in the light of the Tribunal's earlier order and applicable law on determination of ALP for services.

Issue remitted to AO/TPO for fresh consideration and adjudication of ALP.

Associated enterprise - transfer pricing adjustment - remand to AO/TPO for fresh consideration - Whether brand promotion payments to Force India Formula One Team Ltd. are with an Associated Enterprise and, if so, whether ALP was correctly determined as nil - HELD THAT: - The Tribunal noted that the question whether Force India qualifies as an Associated Enterprise requires fresh examination in view of inconsistent treatment in other years and the TPO's later acceptance in respect of a subsequent year. The Tribunal followed its earlier decision directing re-examination of the AE issue and left determination of ALP open pending that preliminary finding. Accordingly the matter was remitted to the AO/TPO to examine whether Force India is an AE and thereafter to determine ALP as required.

Reference remitted to AO/TPO to examine AE relationship and thereafter determine ALP.

Specified domestic transaction - protective addition - remand to AO/TPO for fresh consideration - Whether the sales promotion/sponsorship payment to United East Bengal Football Team Pvt. Ltd. is at arm's length and related protective additions - HELD THAT: - The Tribunal applied its earlier ruling that the reference to the TPO in respect of certain SDTs is invalid following statutory omission and directed that the AO examine the claim of expenditure under section 40A(2). Given the transfer pricing issue has been set aside, the Tribunal remitted the question of the TP adjustment and the protective addition back to the AO for fresh consideration in accordance with the Tribunal's earlier directions.

TP issue and protective addition remitted to AO for fresh consideration and for examination under section 40A(2).

Protective addition - remand to AO/TPO for fresh consideration - Validity of protective additions made by AO in respect of sales and brand promotion expenses - HELD THAT: - The Tribunal held that the protective additions relate to issues remitted to the AO/TPO for determination of ALP or for examination under section 40A(2); accordingly those protective additions require remand and were allowed to be treated as remitted/partly allowed for statistical purposes pending fresh adjudication by AO.

Protective additions remitted to AO for fresh consideration; grounds partly allowed for statistical purposes.

Additional depreciation - plant and machinery - remand to AO/TPO for fresh consideration - Whether plastic crates and wooden pallets (pellets) qualify as plant and machinery for additional depreciation - HELD THAT: - In view of subsequent authoritative decision of the Bombay High Court on similar assets, the Tribunal concluded the lower authorities had not had occasion to consider that judgment and remitted the matter to AO/TPO for fresh consideration; if the assets are similar the additional depreciation is to be allowed.

Issue remitted to AO/TPO for fresh consideration; grounds partly allowed for statistical purposes.

Section 40A(2) - deduction under section 37 - sponsorship/brand promotion as revenue expenditure - Allowability of portion of sales/brand promotion expenses as revenue expenditure - HELD THAT: - The Tribunal followed its earlier consistent findings that sponsorship and brand-promotion expenditures, assessed by reference to commercial expediency and precedents, are ordinarily revenue in nature. In light of precedents and earlier Tribunal decisions (including United Spirits and other benches), the Tribunal directed the AO to allow deduction for business promotion expenses where applicable.

Deduction in respect of business promotion expenses allowed; AO directed to grant accordingly.

Section 40(a)(i) - TDS - reimbursement of seconded employee costs - not FTS where secondment constitutes employment - remand to AO/TPO for fresh consideration - Treatment of reimbursement of expatriate/seconded employee salary costs and whether liable as FTS attracting TDS and disallowance under section 40(a)(i) - HELD THAT: - Having regard to the Karnataka High Court precedent on secondment arrangements, the Tribunal observed that where secondment constitutes employment and the employees function under control of the assessee, the reimbursements are not FTS and are not chargeable to withholding under section 195/40(a)(i). The Tribunal directed remand to AO/TPO to decide the issue afresh in the light of the jurisdictional High Court decision which was not available earlier.

Issue remitted to AO/TPO for fresh consideration in light of Karnataka High Court precedent.

Section 40(a)(i) - TDS - royalty - Whether payment to foreign designer for label design is 'royalty' and liable to disallowance for non-deduction of TDS - HELD THAT: - The Tribunal held that payment for designing labels was a business expense for services rendered, did not involve 'make available' or transfer of intangible property such that it would constitute royalty, and the foreign recipient had no PE or business connection in India. Consequently, the requirement to deduct TDS under section 195/40(a)(i) did not apply and the AO's disallowance was to be deleted.

Addition under section 40(a)(i) deleted; payment treated as business expense.

Section 40A(2) - commission to director - Allowability of commission paid to the Chairman (Mr. Vijay Mallya) as business expenditure - HELD THAT: - The Tribunal found assessee produced no evidence that the Chairman rendered services commensurate with the commission paid. In absence of material demonstrating services rendered, the AO's invocation of section 40A(2) and the addition disallowing the excess commission was sustained.

Addition on account of commission to Mr. Vijay Mallya sustained; grounds dismissed.

Section 14A disallowance - restriction of disallowance under section 14A to exempt income - Quantum of disallowance under section 14A in relation to exempt dividend income - HELD THAT: - Following earlier coordinate-bench authority, the Tribunal held that disallowance under section 14A (and computation under Rule 8D) cannot exceed the exempt income earned in the relevant year. The AO/TPO was directed to restrict the disallowance to the amount of exempt dividend income received in the assessment year.

AO/TPO directed to restrict section 14A disallowance to the amount of exempt income earned in the year.

Advertising - surrogate advertising - admissibility of additional evidence - remand to AO for fresh consideration - Allowability of digital-media and TV advertisement expenses alleged to be in violation of law/public policy - HELD THAT: - The Tribunal admitted additional evidence filed by the assessee (CBFC/ASCI/Cable Rules material) and observed these documents were material and not earlier before lower authorities. In view of the need to examine whether advertisements were direct promotion of liquor or lawful brand extensions (including certification by authorities), the Tribunal remitted the advertisements' allowability to the AO for fresh consideration with directions to verify whether surrogate advertising or contravention of broadcasting rules occurred.

Issue remitted to AO for fresh consideration after admission of additional evidence.

Depreciation on goodwill - Allowability of depreciation claimed on goodwill arising on amalgamation - HELD THAT: - The Tribunal followed coordinate-bench precedent in the assessee's earlier years and held that depreciation on goodwill was not allowable on the facts before the Tribunal. The earlier Tribunal findings against the assessee were applied to the present assessment year.

Claim for depreciation on goodwill disallowed; grounds dismissed.

Final Conclusion: The appeal is partly allowed for statistical purposes. Several transfer pricing and related issues (management fee, brand promotion to Force India, sales promotion to UEBFT, protective additions, depreciation on pellets, expatriate reimbursement, and advertisement allowability) are remitted to the AO/TPO for fresh consideration in light of the Tribunal's reasoning and cited precedents, with the assessee to be afforded opportunity of hearing. The AO is directed to delete the disallowance on label design payment, to allow certain business promotion expenses as revenue expenditure, to restrict section 14A disallowance to the exempt income, to admit the additional advertisement evidence and re examine that issue, and the disallowance of commission to the Chairman and disallowance of depreciation on goodwill are sustained.

Power of appellate authority to adjudicate additional claims not filed in the return - allowability of sales promotion expenses under section 37(1) - capital receipt treatment of surplus on prepayment of deferred sales tax and non-taxability under section 28(iv) - accounting entries not decisive for taxability

Power of appellate authority to adjudicate additional claims not filed in the return - Ld. CIT(A) erred in refusing to entertain and adjudicate on fresh claims raised before the AO and before the CIT(A) on the ground that they were not made in the original return. - HELD THAT: - The Tribunal examined Goetze India Ltd. and National Thermal Power Co. Ltd. and the jurisprudence relied upon. It held that while the assessing officer may not be empowered to grant relief other than by revised return, appellate authorities are entitled to consider additional claims and adjudicate them on merits where the facts necessary for the claim are already on record. The CIT(A)'s dismissal on the technical ground of absence of claim in the original return was therefore perverse and required setting aside so that the claims may be adjudicated on merits. [Paras 4, 5]

Ld. CIT(A)'s order is set aside and ground allowed; claims to be adjudicated on merits by appellate authority.

Allowability of sales promotion expenses under section 37(1) - Deduction claimed for sales promotion expenses incurred on doctors for prescribing the appellant's products is disallowable. - HELD THAT: - The Tribunal considered binding precedent of the Supreme Court on the subject (Apex Laboratories Ltd.) and the coordinate bench's earlier decisions in the assessee's own cases for other years. Applying that authority, the Tribunal found no merit in the appellant's contention and held the sales promotion expenditure is not allowable under section 37(1). [Paras 6]

Ground dismissed; sales promotion expenses disallowed.

Capital receipt treatment of surplus on prepayment of deferred sales tax and non-taxability under section 28(iv) - accounting entries not decisive for taxability - Surplus arising on prepayment of deferred sales tax (difference between deferred liability and its NPV prepayment) is a capital receipt and not chargeable to tax under section 28(iv) or section 41. - HELD THAT: - Having examined the scheme of incentive, certificates of entitlement and the payments made, the Tribunal held the surplus is not a remission or cessation of liability and does not constitute a non-monetary benefit or perquisite within section 28(iv) as then in force. Reliance was placed on Supreme Court authority recognising that bookkeeping entries are not determinative of taxability. The Tribunal directed the AO to reduce the income by the surplus amount. [Paras 8, 9, 10]

Ground allowed; the surplus is a capital receipt and is not taxable under section 28(iv) or section 41; AO directed to give effect.

Final Conclusion: The appeal is partly allowed: CIT(A)'s technical rejection of fresh claims is set aside for adjudication on merits; the claim for sales promotion expenditure is dismissed; the surplus on prepayment of deferred sales tax is held to be a capital receipt not taxable and AO is directed to reduce the income accordingly; remaining unpressed grounds dismissed.

Amendment of documents under Section 149 of the Customs Act - Effect of documentary evidence existing at time of clearance - Limits of customs officer's jurisdiction vis-a -vis CGST law - Irrelevance of Section 25 of the CGST Act to exercise of power under Section 149 - Duty to follow binding directions of the Division Bench

Amendment of documents under Section 149 of the Customs Act - Effect of documentary evidence existing at time of clearance - Amendment of the Bill of Entry to correct the GSTIN was permissible under Section 149 on the basis of documentary evidence available to the Assistant Commissioner. - HELD THAT: - The Court examined Section 149 and the documentary record before the Assistant Commissioner and concluded that amendment to the Bill of Entry was authorised where documentary evidence supporting the amendment existed at the time of clearance. The bill of lading contained the GSTIN of the Vadodara unit and the record did not disclose any allegation of mala fide or deliberate misstatement by the importer. Consequently, the Assistant Commissioner had the authority to permit a bona fide correction of the inadvertently entered GSTIN and ought to have allowed the amendment in accordance with Section 149. The Court directed that the amendment be carried out within the specified period. [Paras 10, 11, 15, 16]

The petition is allowed insofar as the amendment of the Bill of Entry is directed to be made under Section 149; amendment to be effected within one week of supply of the order copy.

Limits of customs officer's jurisdiction vis-a -vis CGST law - Irrelevance of Section 25 of the CGST Act to exercise of power under Section 149 - Duty to follow binding directions of the Division Bench - The Assistant Commissioner exceeded jurisdiction by refusing amendment on the basis of Section 25 of the CGST Act and by disregarding the Division Bench's directions. - HELD THAT: - The Court found that the Assistant Commissioner relied on considerations under Section 25 of the CGST Act and on revenue/GST policy inputs to deny the amendment, matters extraneous to the statutory power conferred by Section 149 of the Customs Act. Such a reliance was beyond the officer's competence when deciding an amendment application under the Customs Act. Further, the Assistant Commissioner failed to give effect to the Division Bench's clear directions to decide the application in light of the observations interpreting Section 149. The impugned order was therefore held to be perverse and not in accordance with law; the Court also called for the Commissioner of Customs to examine the approach of the officers involved. [Paras 12, 13]

The impugned order is quashed for lack of jurisdiction and for non-compliance with the Division Bench's directions; the Commissioner is to be informed and appropriate steps taken.

Final Conclusion: Writ petition allowed. The Assistant Commissioner's order rejecting amendment of the Bill of Entry is quashed; amendment directed to be carried out promptly under Section 149 of the Customs Act. Costs of the petition awarded to the petitioner, fixed to be paid personally by the Assistant Commissioner to the Maharashtra Legal Services Authority.

Anti-Dumping Duty liability dependent on chemical composition of imported goods - Quash and remand for fresh consideration - Independent laboratory testing of samples - Petitioner to bear cost of retesting engaged by authority - Administrative decision to be taken on fresh laboratory report

Anti-Dumping Duty liability dependent on chemical composition of imported goods - Independent laboratory testing of samples - Quash and remand for fresh consideration - The impugned order rejecting the petitioner's request for re testing was quashed and the matter remanded for fresh testing to determine whether the imported lining materials contain Polyurethane, which alone would attract Anti Dumping Duty. - HELD THAT: - The Court recorded that the parties relied on competing laboratory reports: the petitioner produced a report showing absence of Polyurethane while the respondents' report indicated presence of Polyurethane and formed the basis for levying Anti Dumping Duty. The petitioner offered that an independent laboratory test would resolve the dispute and further undertook to bear the cost. The Court found that no prejudice would be caused by directing a fresh test by a reputed laboratory engaged by the respondents, with the cost to be borne by the petitioner. Accordingly the impugned order dated 1 11 2022 was quashed and the respondents were directed to appoint a reputed laboratory within four weeks, obtain the report and decide liability for Anti Dumping Duty based on that report, communicating the decision within one week of receipt of the report; the respondents were also directed to intimate the testing cost to the petitioner for payment. [Paras 8, 9]

Impugned order quashed; matter remanded for fresh testing by a laboratory to be appointed by the respondents and for decision on Anti Dumping Duty liability in accordance with the fresh laboratory report, with testing cost borne by the petitioner.

Final Conclusion: The writ petition succeeds in part: the order refusing re testing is set aside and the respondents are directed to obtain fresh laboratory testing of the imported lining materials and decide on Anti Dumping Duty liability in accordance with that report; the petitioner shall bear the cost of testing.

Violation of Regulation 10(e) of CBLR, 2018 - violation of Regulation 10(n) of CBLR, 2018 - duty of customs broker to verify IEC/GSTIN and existence of exporter using reliable independent authentic information - due diligence obligations of Custom House Agent/Customs Broker - Board Circular No. 09/2010 - KYC verification by CHA - proportionality of suspension/revocation of customs broker licence - fraud vitiates everything (Section 17, Limitation Act)

Violation of Regulation 10(e) of CBLR, 2018 - due diligence obligations of Custom House Agent/Customs Broker - No violation of Regulation 10(e) of CBLR, 2018 was proved against the customs broker. - HELD THAT: - The Tribunal found no evidence that the customs broker imparted any incorrect information to the exporter, which is the core requirement for establishing a breach of Regulation 10(e). The adjudicating authority had accepted the broker's reply that no false information was given, and the show-cause notice contained no particulars identifying any incorrect information provided by the broker. The respondent also conceded in cross-objections that there was no basis for alleging a breach of Regulation 10(e). On these facts the Tribunal confirmed the order under challenge insofar as it held that Regulation 10(e) was not violated. [Paras 11]

Findings of no violation of Regulation 10(e) are confirmed.

Violation of Regulation 10(n) of CBLR, 2018 - Board Circular No. 09/2010 - KYC verification by CHA - duty of customs broker to verify IEC/GSTIN and existence of exporter using reliable independent authentic information - The customs broker violated Regulation 10(n) of CBLR, 2018 by failing to verify the correctness of IEC/GSTIN and the existence/functioning of the exporter at the declared address using reliable independent authentic documents or information. - HELD THAT: - Regulation 10(n) imposes an affirmative duty on the broker to verify IEC, GSTIN and the existence of the exporter at the declared address using reliable independent and authentic sources; Board Circular No. 09/2010 prescribes documentary KYC supporting this verification. The record shows that the broker never visited the exporter's premises, relied on documents received from an agent who did not appear, and produced only postal/courier receipts and KYC documents without cogent evidence that the exporter actually operated from the declared address or had authorised agents. The Meerut Commissionerate's report that the exporter was not found at the IEC address remained unrebutted. The G-card holder's admissions that documents were received from an agent and that the broker did not visit the premises support the finding of non-verification. Given the absence of proof of a supplier-exporter-broker chain and the failure to produce authoritative evidence of authorization of agents, the Tribunal held that the broker breached Regulation 10(n). The Tribunal relied on precedents addressing CHA verification obligations in support of this conclusion. [Paras 13, 14, 15, 16, 17]

Violation of Regulation 10(n) is established and the adjudicating authority's exoneration on this point is set aside.

Proportionality of suspension/revocation of customs broker licence - due diligence obligations of Custom House Agent/Customs Broker - fraud vitiates everything (Section 17, Limitation Act) - Suspension of the customs broker's licence was a proportionate penalty in the circumstances; revocation of suspension was set aside and the suspension is upheld. - HELD THAT: - The Tribunal examined the role and responsibilities of a CHA, noting established authority that a CHA must not facilitate illegal activities and must exercise prescribed diligence. Given the finding that the exporter was essentially non-existent, the RBI remittance data showing negligible realization against the shipping bills, and admissions by the broker's G-card holder indicative of conscious assistance in fraudulent exports, the Tribunal concluded that the broker's conduct amounted to facilitating fraud. Fraud vitiates transactions and supports strict remedial action. Considering the statutory and regulatory obligations on CHAs and precedent treating such failures as serious, the Tribunal held that suspension of licence was proportionate and justified. Accordingly, the revocation of suspension in the impugned order was set aside to the extent it relieved the broker, and suspension was confirmed. [Paras 18, 19, 20, 21]

Suspension of the customs broker licence is a proportionate and justified penalty and is confirmed; the impugned revocation is set aside to that extent.

Final Conclusion: The Tribunal confirmed that there was no breach of Regulation 10(e) but found a clear breach of Regulation 10(n) by the customs broker for failing to verify IEC/GSTIN and the existence of the exporter with reliable independent evidence; having regard to the broker's conduct and admissions and evidence of fraudulent exports, suspension of the broker's licence was held to be a proportionate penalty and is accordingly upheld.

Classification of goods under the Customs Tariff - Applicability of a specific tariff entry for machinery for preparing animal feeding stuffs - Classification as silos for storing ensilage - Preference of specific tariff entry over residual/general entry - Re classification by appellate authority beyond the scope without notice - principles of natural justice - Requirement of evidence to support tariff classification

Classification of goods under the Customs Tariff - Applicability of a specific tariff entry for machinery for preparing animal feeding stuffs - Preference of specific tariff entry over residual/general entry - Requirement of evidence to support tariff classification - Imported items are classifiable under CTH 8436 10 00 (machinery for preparing animal feeding stuffs). - HELD THAT: - The goods were imported and described in the purchase order, proforma invoice, packing list and Bill of Entry as parts of poultry feed milling machinery. There is no evidence from the Department contradicting that description or showing use for any other purpose. Where a specific tariff entry (CTH 8436 10 00) directly applies to machinery for preparing animal feeding stuffs, that specific entry must be applied rather than a more general residual entry. On the material before the Tribunal the adjudicating classification as silos and the appellate classification under a residual heading are not supported by the record; accordingly the specific entry governs classification. [Paras 8, 9, 10]

Assessee's classification under CTH 8436 10 00 accepted and Appeal of the Assessee allowed.

Classification as silos for storing ensilage - Requirement of evidence to support tariff classification - The Adjudicating Authority's classification of the imported goods under CTH 9406 00 93 (silos for storing ensilage) is not sustained. - HELD THAT: - The Adjudicating Authority concluded the goods were 'silos' without detailed findings explaining how that conclusion was reached despite documentary descriptions to the contrary. CTH 9406 00 93 applies only to silos used for storing ensilage, and there is no evidence that the imported items were silos or used for storing ensilage. Expert material produced by the assessee further indicated ensilage storage is not performed in metal silos. In absence of such evidence, the OIO classification cannot be upheld. [Paras 4, 8]

OIO classification under CTH 9406 00 93 rejected.

Re classification by appellate authority beyond the scope without notice - principles of natural justice - Preference of specific tariff entry over residual/general entry - The Commissioner (Appeals)'s independent re classification of the goods under CTH 8479 90 90 is invalid for having gone beyond the brief without giving notice, thereby violating principles of natural justice, and cannot supplant the specific entry. - HELD THAT: - The Commissioner (Appeals) arrived at a different and independent classification under a residual heading without placing the importer on notice of that re classification proposal. Such action amounted to going beyond the scope of the appeal and denied the importer an opportunity to address the new basis, breaching natural justice. Further, where a specific classification is available (CTH 8436 10 00), the appellate authority should not prefer a general residual heading absent adequate justification and fair opportunity to the importer. [Paras 9]

Commissioner (Appeals)'s classification under CTH 8479 90 90 set aside as invalid.

Final Conclusion: Assessee's appeal allowed and classification under CTH 8436 10 00 accepted; Revenue's appeal dismissed. Commissioner (Appeals)'s re classification set aside for want of notice and natural justice; OIO classification as silos under CTH 9406 00 93 not sustained. Appeals disposed accordingly with consequential relief as per law.

Eligibility for exemption notification in respect of imports - availability of CENVAT credit for imports - strict construction of exemption notifications against the claimant - refund claim filed within statutory limitation and effect of pendency of appeals - limitation under Section 27(1A)(b)

Eligibility for exemption notification in respect of imports - availability of CENVAT credit for imports - strict construction of exemption notifications against the claimant - Appellants entitled to benefit of Exemption Notification No.1/2011-CE (CVD at 1%) for the imported Muriate of Potash. - HELD THAT: - The Tribunal applied and followed the Apex Court's ratio in SRF Ltd. to hold that CENVAT credit cannot be availed outside India and therefore the condition of non-availment of CENVAT credit for imports is satisfied. On that basis the Tribunal concluded that the imports were eligible for the exemption notifications relied upon by the appellant and that the correct CVD rate was 1% and not 5%. The bench treating the question as no longer res integra accepted the prior final order of the Tribunal dated 31.01.2019 which had so held on merits. [Paras 6, 8, 12]

The Tribunal affirmed that the appellant was entitled to the exemption and that CVD was chargeable at 1%.

Refund claim filed within statutory limitation and effect of pendency of appeals - limitation under Section 27(1A)(b) - Original refund claim (filed within time) must be considered on merits and cannot be denied as time-barred merely because the Commissioner (Appeals) had earlier dismissed the appellate claim as premature due to pendency of the merits appeal before the Tribunal. - HELD THAT: - It was admitted that the original refund application was filed within the statutory period. The Commissioner (Appeals) had treated the appeal against the refund rejection as premature because the merits appeal was pending before the Tribunal. After the Tribunal finally decided the merits appeal in favour of the appellant, the Revenue's contention that a fresh refund application should have been filed within one year under Section 27(1A)(b) was rejected. The Tribunal held that denying the refund on limitation grounds where the original claim was timely and was not adjudicated on merits (but the appeal was dismissed as premature because of pendency) would amount to a miscarriage of justice. Accordingly the impugned order was set aside and the matter remanded to the original adjudicating authority to decide the refund claim on merits. [Paras 10, 11, 12, 13, 14]

Set aside the impugned order and remand to the Original Adjudicating Authority to decide the original refund claim on merits; refund not to be denied on limitation in the facts of the case.

Final Conclusion: Appeal allowed in part: prior Tribunal finding that CVD was payable at 1% is accepted; the impugned order is set aside and the matter remanded to the original authority to decide the refund claim on merits (the original claim having been filed within time), with a direction to dispose the matter by a speaking order within one month.

Transaction value - burden of proof in under-valuation allegations - sequential application of Customs Valuation Rules (Rules 4 to 8) - rejection of invoice price - reliance on comparable imports/contemporaneous import evidence - valuation based on domestic market survey/chartered engineer report

Transaction value - rejection of invoice price - burden of proof in under-valuation allegations - reliance on comparable imports/contemporaneous import evidence - sequential application of Customs Valuation Rules (Rules 4 to 8) - Validity of rejection of declared transaction value and adoption of alternative valuation without following the sequential valuation rules and without adducing contemporaneous import evidence. - HELD THAT: - The Tribunal held that the transaction value - the price actually paid or payable - is to be accepted for assessment unless shown to be unacceptable for reasons specified in the Rules. Before rejecting the invoice price the Department must give cogent reasons and produce evidence of comparable contemporaneous imports at higher prices so as to discharge the burden of proving under-valuation. The impugned order rejected the declared transaction value and adopted a valuation based on a chartered engineer's market survey without referring to or relying upon the import prices furnished by the authorised dealer or the Department's data bank, and without adducing contemporaneous import evidence. Further, the Tribunal emphasised that where the transaction value is disputed the Customs authority must proceed sequentially under the Valuation Rules (proceeding through Rules 5, 6 and 7) and cannot directly invoke Rule 8 to substitute valuation; in the present case the sequential procedure was not followed and the report of the chartered engineer, based on domestic market values, was relied upon to reject the invoice price. Applying the legal principles laid down by the Supreme Court (as cited in the impugned order), the Tribunal found such rejection and the method of valuation to be without legal basis and unsustainable for the imported goods in question. [Paras 9, 10, 11]

Rejection of the transaction value and adoption of valuation based on the chartered engineer's market survey was incorrect; the transaction value should not have been rejected without cogent evidence of contemporaneous imports and without sequential compliance with the Valuation Rules.

Final Conclusion: Appeal allowed; valuation based on the chartered engineer's market-survey was held legally unsustainable and the adjudication rejecting the declared transaction value was set aside with consequential relief, if any.

Classification of portable computers - automatic data processing machine - principal function - Note 6(A) to Chapter 84 - Note 3 to Section XVI (composite machines/principal function rule) - Heading 8471 vs Heading 8517 (smartphones/telephone sets) - Circular No. 20/2013-Cus. (classification of tablet computers)

Classification of portable computers - automatic data processing machine - Note 6(A) to Chapter 84 - Note 3 to Section XVI (principal function) - Heading 8517 vs Heading 8471 - Circular No. 20/2013-Cus. - Whether the listed Barcode Mobile Computers, RFID Mobile Computers and Tablet Mobile Computers are classifiable under Customs Tariff Heading 8471 30 90 or otherwise - HELD THAT: - The Authority examined the technical features and functions of the listed devices against the requirements of Note 6(A) to Chapter 84 and the General Rules for Interpretation. The devices are capable of storing programs and data, are freely programmable, perform user-specified computations and execute processing programs requiring logical decisions during runs; accordingly they satisfy the criteria of an "automatic data processing machine" under Note 6(A). Note 6(C)/(D)/(E) do not apply because the goods are not merely units or accessory readers but are ADP machines in themselves. The principal-function rule in Note 3 to Section XVI was applied to composite machines: classification is to be according to the principal function. Although 18 of the 36 models possess cellular capability, that functionality is supplementary; the devices are principally designed and marketed for barcode capture, data processing and enterprise applications, and many models exist without SIM capability, showing cellular connectivity is not integral. The Authority relied on Circular No. 20/2013-Cus. (classification of tablets as ADP machines despite supplementary calling function) and distinguished the Harmonized System Committee opinion on RFID/barcode readers with mobile OS to conclude that the instant devices are not principally telephones/smartphones. On these determinative considerations the devices were held to be ADP machines and not classifiable as telephone sets under Heading 8517. [Paras 5, 6]

The 36 listed portable computer models are classifiable under Customs Tariff Heading 8471 and specifically under sub-heading 8471 30 90.

Final Conclusion: The Authority rules that the listed Barcode Mobile Computers, RFID Mobile Computers and Tablet Mobile Computers are ADP machines and are classifiable under Customs Tariff Heading 8471, specifically sub-heading 8471 30 90.

Condonation of delay in re filing - Interlocutory application for condonation - Interim order restraining alienation of shares - Status quo order - Disposal without adjudication on merits - Liberty to seek impleadment and recall of order - Expeditious fresh consideration by the adjudicating authority

Condonation of delay in re filing - Interlocutory application for condonation - Whether the delay of 44 days in re filing the appeal should be condoned. - HELD THAT: - The Tribunal examined the interlocutory application and the explanation placed on record that the delay in re filing was beyond the control of the appellant and not intentional. On that basis and having considered the submissions of the appellant's senior counsel, the Tribunal was satisfied with the reason for delay and condoned the delay of 44 days in re filing.

Delay of 44 days in re filing is condoned.

Interim order restraining alienation of shares - Status quo order - Liberty to seek impleadment and recall of order - Expeditious fresh consideration by the adjudicating authority - Disposal without adjudication on merits - Disposition of the appeal where an interim order was passed by the NCLT restraining further action on transferred shares and the appellant contends it was not impleaded before the NCLT. - HELD THAT: - The Tribunal declined to enter upon the merits of the NCLT order which had directed that transferred shares as on 17.05.2023 should not be further acted upon in the ROC records and should not be alienated. Noting the appellant's contention that it was not impleaded before the NCLT and that an adverse interim direction affects the appellant, the Tribunal held that instead of pursuing the appeal the appellant should seek appropriate relief before the NCLT by filing an application for recall of the order and for impleadment. The Tribunal granted liberty to the appellant to file such an application and directed that, if filed, the NCLT should decide the application in accordance with law, preferably within ten days, after hearing all parties. The Tribunal expressly refrained from expressing any opinion on the merits and observed that the NCLT should not be influenced by the Tribunal's observations and may consider other interlocutory applications as well.

Appeal disposed of by granting liberty to the appellant to move the NCLT for recall/impleadment; NCLT to decide the application expeditiously and on merits after hearing parties; no opinion expressed on merits by this Tribunal.

Final Conclusion: The appeal is disposed of: the re filing delay of 44 days is condoned and the appellant is granted liberty to approach the NCLT for recall of the interim order and for impleadment; the NCLT is directed to consider any such application in accordance with law, preferably within ten days, and the Tribunal has not adjudicated the merits of the dispute.

Promoter ineligibility under Section 29A - MSME exception to promoter ineligibility - maximisation of value of assets under the I&B Code - role of Committee of Creditors in evaluating resolution plans - acceptance of One Time Settlement (OTS) by financial creditors

MSME exception to promoter ineligibility - promoter ineligibility under Section 29A - Whether the observation that promoters of an MSME need not compete with other resolution applicants as a general rule is legally sustainable. - HELD THAT: - The Tribunal's observations in paras 32 and 34 were grounded on the Tribunal's decision in Bafna's case which recognised a limited exception allowing promoters of an MSME, in exceptional circumstances, to regain control without competing with other resolution applicants. A careful reading of Bafna shows the exception is contextual - tied to situations such as settlements prior to constitution of the CoC or offers under Section 12A where feasibility, viability and maximisation of asset value are established. The impugned judgment adopted a broader ipso facto proposition that an MSME promoter need not be required to invite competing proposals, without identifying the exceptional circumstances relied upon in Bafna. That broader reasoning departs from the limited scope of the exception recognised by the Tribunal and is therefore legally incorrect. The Court holds that the impugned order's blanket approach cannot be sustained and clarifies that the Bafna exception is not an automatic or universal dispensation for MSME promoters. [Paras 11, 12, 13]

The broad proposition in the impugned judgment that an MSME promoter need not compete with other resolution applicants as a matter of course is unsustainable and is set aside.

Role of Committee of Creditors in evaluating resolution plans - maximisation of value of assets under the I&B Code - Whether the Resolution Professional was entitled to invite other proposals, place all proposals (including that of the promoter) to the Committee of Creditors and proceed to e-voting. - HELD THAT: - The I&B Code envisages maximisation of value of the corporate debtor's assets and entrusts the CoC with consideration of feasibility, viability and other requirements when evaluating resolution plans. Given that the impugned judgment's special privilege approach for MSME promoters was incorrect, the Resolution Professional was justified in calling for other proposals and placing all valid proposals, including the promoter's, before the CoC for consideration and e voting. That process aligns with the Code's objective of maximisation of value and the CoC's role in assessing and approving a feasible and viable plan. [Paras 14, 15]

The Resolution Professional could lawfully invite other proposals, have proposals considered by the CoC and proceed to e voting; his conduct in doing so cannot be faulted.

Acceptance of One Time Settlement (OTS) by financial creditors - proceedings consequent to interlocutory observations - Relief to be granted and interim accommodation requested by the promoter in relation to an OTS proposal. - HELD THAT: - The Court set aside paras 32 and 34 of the impugned judgment and directed that all proceedings emanating from those observations, including the contempt proceedings, would dissolve. However, in view of the promoter's representation that an OTS has been submitted and that some stakeholders (flat buyers) are inclined, the Court granted a one time two month window for the promoter to secure acceptance of the OTS from financial creditors. The window is conditional: if the OTS is not accepted within two months, the Resolution Professional is free to declare the results of the e voting and proceed with the process without further impediment. The accommodation is limited and aimed at facilitating a quick resolution rather than permitting protraction of proceedings. [Paras 17, 18, 19, 20, 21]

Paragraphs 32 and 34 are set aside; proceedings based on those observations are quashed; a one time two month window is granted for the promoter to procure acceptance of the OTS, failing which the Resolution Professional may proceed to declare e voting results.

Final Conclusion: The appeal is allowed; the impugned observations in paras 32 and 34 are set aside, the Resolution Professional was entitled to invite and put competing proposals (including the promoter's) to the CoC and proceed to e voting, and a one time two month window is granted for the promoter to secure acceptance of an OTS, after which the Resolution Professional may declare results; parties to bear their own costs.

Related party - Committee of Creditors - control of more than twenty per cent. of voting rights - second proviso to Section 21

Related party - control of more than twenty per cent. of voting rights - Committee of Creditors - second proviso to Section 21 - Appellant's status as a related party under Section 5(24) of the Insolvency and Bankruptcy Code, 2016 and consequent entitlement to representation on the Committee of Creditors. - HELD THAT: - The Court examined whether the Stressed Assets Stabilization Fund (a Government Sector Undertaking constituted as an SPV/Trust) fell within the definition of related party so as to be disqualified from membership of the Committee of Creditors. The Tribunal had treated the appellant as a related party. The appellant's voting rights, however, are confined to 20 per cent and do not amount to control of more than twenty per cent. of voting rights, the disqualification contemplated by sub-clause (j) of Section 5(24). Further, the Court accepted that the second proviso to Section 21 applies to the appellant (being a financial creditor regulated by a financial sector regulator and related, if at all, solely by conversion/substitution prior to the insolvency commencement date), thereby precluding the operation of the first proviso to exclude representation, participation or voting. On these bases the Court concluded that the appellant cannot be treated as a related party and is entitled to a place on the Committee of Creditors.

Appellant is not a related party under Section 5(24) and is entitled to representation on the Committee of Creditors.

Committee of Creditors - Adjudication of other issues raised by the appellant which were not considered by the NCLAT. - HELD THAT: - The Court declined to decide other contentions which were not dealt with by the NCLAT, noting the limited controversy before it and the need for NCLAT to consider those aspects in the first instance. Given the appellate limits under Section 62 of the Code (appeal limited to a question of law), the matter is remitted to the NCLAT for consideration of the remaining issues urged by the appellant.

Other issues are remitted to the NCLAT for fresh adjudication.

Final Conclusion: Impugned order set aside insofar as it treated the appellant as a related party; appellant entitled to a place on the Committee of Creditors. Remaining issues not considered by NCLAT are remitted to that Tribunal for fresh decision; appeal allowed on these terms, parties to bear their own costs.

Jurisdiction of National Company Law Appellate Tribunal - effect of Notification No. S.O 1683(E) dated 24.05.2017 - reliance on precedent M/s Spartek Ceramics India Ltd. v. Union of India - availability of writ remedy

Jurisdiction of National Company Law Appellate Tribunal - effect of Notification No. S.O 1683(E) dated 24.05.2017 - reliance on precedent M/s Spartek Ceramics India Ltd. v. Union of India - The National Company Law Appellate Tribunal did not have jurisdiction to decide the issues raised by the appellant under Notification No. S.O 1683(E) dated 24.05.2017. - HELD THAT: - Applying and following the decision in M/s Spartek Ceramics India Ltd. v. Union of India, the Court held that the Notification No. S.O 1683(E) issued by the Ministry of Corporate Affairs does not confer jurisdiction on the Tribunal to adjudicate the disputes raised by the appellant. The High Tribunal's conclusion that it lacked jurisdiction was affirmed by reference to the said precedent. The Court dismissed the appeal on that basis without addressing the merits of the underlying claims.

Appeal dismissed for want of jurisdiction of the Tribunal under the impugned notification.

Availability of writ remedy - reliance on precedent M/s Spartek Ceramics India Ltd. v. Union of India - The party affected by the lack of jurisdiction under the Notification is not left without remedy and may seek relief by filing a writ petition. - HELD THAT: - While agreeing with the Tribunals' lack of jurisdiction as per the Spartek Ceramics precedent, the Court observed that the precedent does not deprive the aggrieved party of all remedies. The appropriate course indicated by the Court is to pursue a writ petition before the competent forum if aggrieved by the enforcement or effects of the impugned action.

Aggrieved party may file a writ petition; remedy by writ is available.

Final Conclusion: Delay condoned; appeal dismissed on the ground that the impugned Notification does not confer jurisdiction on the Tribunal (following M/s Spartek Ceramics India Ltd.), and the aggrieved party may pursue remedy by writ; no decision on merits.

Conclusive nature of foreign judgment - Section 13 CPC exceptions - Execution under Section 44A CPC - Enforceability of guarantees despite alleged FEMA contravention and availability of post-facto RBI permission - Expert evidence and overriding duty to the court (CPR Rule 35) - Interim moratorium under Section 96 IBC - Waiver, approbate and reprobate, and constructive res judicata - Security under Order XXI Rule 40 CPC - Abuse of process

Conclusive nature of foreign judgment - Section 13 CPC exceptions - Execution under Section 44A CPC - Enforceability of guarantees despite alleged FEMA contravention and availability of post-facto RBI permission - Expert evidence and overriding duty to the court (CPR Rule 35) - Abuse of process - Validity and enforceability in India of the English Commercial Court's money decree under the petitioner's personal guarantee and whether it fell within the exceptions of Section 13 CPC. - HELD THAT: - The High Court held that the executing court correctly rejected the petitioner's objections under clauses (a)-(f) of Section 13 CPC and upheld enforcement under Section 44A CPC. The English judgment was found to have been given after due judicial process and on merits: the foreign court construed the guarantee as an on demand obligation and considered evidence (oral witnesses, documentary material and expert evidence on Indian law). Challenges which effectively contested merits (including appropriation of sums paid by the principal debtor and construction of the guarantee) could not be ventilated in execution as that would amount to calling the executing court to sit in appeal over the foreign decree. On the FEMA point, the English court's reasoning - that contravention of FEMA does not automatically void the guarantee and that post facto RBI permission may be available - was accepted; Indian authorities were held to support that a party cannot take advantage of its own failure to obtain prior RBI permission. As to the petitioner's complaint about the decree holder's expert, the court found CPR Rule 35 procedures complied with, the expert had disclosed prior engagement and no contemporaneous objection or cross examination was taken by the petitioner, indicating waiver; expert evidence was treated as assisting the court in a matter outside its expertise. The Court recorded prior findings that the petitioner's repeated late objections amounted to abuse of process. [Paras 11, 12, 13, 16, 17]

The order dated 29.02.2020 rejecting the petitioner's applications (Exh.11 and Exh.45) was upheld; the foreign decree is enforceable in India and does not fall within the exceptions of Section 13 CPC.

Interim moratorium under Section 96 IBC - Waiver, approbate and reprobate, and constructive res judicata - Security under Order XXI Rule 40 CPC - Abuse of process - Whether filing of CP(IB) before NCLT commencing an interim moratorium under Section 96 IBC bars continuation of the execution proceedings and whether the petitioner waived that statutory protection by his conduct. - HELD THAT: - The Court analysed the chronology of proceedings and held that although Section 96(1)(a) and (b) provide an interim moratorium from the date of filing, the petitioner had knowledge of the personal insolvency petition from 20.09.2021 yet repeatedly proceeded in the execution proceedings, failed to invoke Section 96 promptly, and pursued multiple challenges before Trial Court, High Court and Supreme Court. The Trial Court's factual conclusions - that the petitioner delayed invoking Section 96, that he sought reliefs inconsistent with reliance on the moratorium and that his conduct amounted to waiver, approbation and reprobation - were sustained. Principles of waiver and constructive res judicata applied: a litigant who knowingly abandons or proceeds without asserting a statutory bar cannot later take inconsistent positions to the detriment of the respondent and to frustrate execution. The Court also endorsed that execution safeguards (including security under Order XXI Rule 40 CPC) had been appropriately directed in the factual matrix and that the IBC's time bound scheme militates against prolonged invocation of interim moratoria to stall execution. [Paras 18, 20, 24, 28, 34]

The order dated 06.09.2022 (below Exh.147) rejecting the petitioner's application for a formal stay of execution on account of Section 96 IBC was upheld; the petition is dismissed.

Final Conclusion: Both Special Civil Application No. 5509 of 2021 (challenging the rejection of objections to the English decree) and Special Civil Application No. 18901 of 2022 (challenging refusal to stay execution on account of Section 96 IBC) are dismissed; the executing court is directed to conclude the execution proceedings within three months, and interim relief sought after pronouncement is refused.

Objective of the IBC is to revive the Corporate Debtor - liquidation as the last resort - power to set aside liquidation order and restore CIRP - Committee of Creditors' duty to consider resolution plans and revised offers - requirement to seek Adjudicating Authority approval of a resolution plan

Power to set aside liquidation order and restore CIRP - liquidation as the last resort - Order directing liquidation was set aside and CIRP was restored for a limited period. - HELD THAT: - The Tribunal observed that the ends of justice required giving the Committee of Creditors an opportunity to consider the revised offer before completing liquidation. Applying the settled principle that the object of the Insolvency and Bankruptcy Code is to revive the corporate debtor and that liquidation is a last resort, the Tribunal set aside the Adjudicating Authority's order of liquidation and extended the corporate insolvency resolution process for a further period of 60 days to enable completion of the resolution process. [Paras 5, 6]

Order for liquidation set aside and CIRP extended for 60 days from the date of the order.

Committee of Creditors' duty to consider resolution plans and revised offers - requirement to seek Adjudicating Authority approval of a resolution plan - CoC was directed to consider the revised offer submitted by one of the resolution applicants and, if a resolution plan is approved, to seek approval from the Adjudicating Authority; failing which the Resolution Professional must move for liquidation. - HELD THAT: - The CoC informed the Tribunal that a revised offer had been submitted by one appellant and that that offer exceeded the liquidation value. The Tribunal therefore allowed the CoC an opportunity to consider the revised offer but limited consideration to the revised offer actually submitted by that appellant. The Tribunal made clear procedural consequences: if the resolution plan is approved, an application for approval must be filed before the Adjudicating Authority; if not approved, the Resolution Professional must immediately file for liquidation. This directs the CoC to make a fresh decision on the submitted revised offer and prescribes the consequent steps depending on approval or rejection. [Paras 3, 4, 7, 8]

CoC to consider only the revised offer submitted by the specified resolution applicant; if approved, file for Adjudicating Authority approval, and if not approved, RP to apply for liquidation.

Final Conclusion: The Tribunal allowed the appeals by setting aside the liquidation order, restored the CIRP for 60 days to enable the Committee of Creditors to consider the revised offer submitted by one resolution applicant (and limited consideration to that offer), and directed that approval of any resolution plan be sought from the Adjudicating Authority, failing which the Resolution Professional shall apply for liquidation.

Writ jurisdiction under Article 226 - Provisional attachment under Section 5 of the PMLA - Adjudication under Section 8 of the PMLA - Alternative efficacious remedy - Appeal to Appellate Tribunal under Section 26 - Excess of jurisdiction / lack of jurisdiction - Exceptional grounds for exercise of writ jurisdiction (violation of fundamental rights, breach of natural justice, vires)

Provisional attachment under Section 5 of the PMLA - Adjudication under Section 8 of the PMLA - Alternative efficacious remedy - Writ jurisdiction under Article 226 - Whether the High Court ought to entertain a writ petition under Article 226 against a provisional attachment order when a complaint under Section 5(5) has been filed and adjudication under Section 8 is pending. - HELD THAT: - The Court held that although there is no statutory appeal specifically against an order of provisional attachment under Section 5(1), a writ under Article 226 may be maintainable in principle. However, where the Enforcement Directorate has filed the complaint under Section 5(5) and the Adjudicating Authority constituted under Section 6 is seized of the matter and is required to proceed under Section 8 within the statutory framework and time-limits, the High Court will ordinarily decline to entertain the writ petition in deference to the specialised, time-bound adjudicatory process. The adjudicating machinery is expected to carry out detailed, judicial scrutiny (including serving notice, considering replies, hearing parties and taking into account materials) and to render a decision within the prescribed period; that process provides an efficacious alternative remedy. The High Court may still exercise writ jurisdiction in exceptional cases (such as excess of jurisdiction, breach of fundamental rights, denial of natural justice, or challenge to vires), but no such exceptional circumstances were found on the facts before the Court, which justified refusal to interfere in this intra-court appeal. [Paras 13, 38, 42, 43, 44]

Writ petition not to be entertained in view of the pending complaint under Section 5(5) and ongoing adjudication under Section 8; appeal dismissed.

Writ jurisdiction under Article 226 - Excess of jurisdiction / lack of jurisdiction - Exceptional grounds for exercise of writ jurisdiction (violation of fundamental rights, breach of natural justice, vires) - Whether the appellants established any exceptional ground warranting exercise of extraordinary writ jurisdiction despite availability of the adjudicatory remedy. - HELD THAT: - The Court acknowledged settled principles permitting writ relief even where an alternative remedy exists if there is excess of jurisdiction, denial of natural justice, infringement of fundamental rights, or a vires challenge. On the material before it, however, the Court found no demonstrable excess of jurisdiction or lack of jurisdiction in the provisional attachment order dated 09.06.2023 that would justify bypassing the adjudicating authority. The Adjudicating Authority had issued show-cause notices and is required to adjudicate the complaint within the statutory timetable; the present facts did not disclose the kind of exceptional circumstances that would justify interference under Article 226 prior to determination by the specialized forum. [Paras 16, 21, 22, 24, 44]

No exceptional ground established; High Court correctly declined to exercise extraordinary writ jurisdiction in this matter.

Final Conclusion: The intra-court appeal is dismissed; the Court declined to interfere with the provisional attachment order challenged by the appellants because the complaint under Section 5(5) is pending before the Adjudicating Authority and an efficacious, time bound adjudicatory process (with appellate remedies) is available; no exceptional circumstance was shown to warrant exercise of writ jurisdiction.

Maintainability of writ petition vis-a -vis alternative statutory remedy under PMLA - provisional attachment under PMLA - scope of judicial review under Article 226 where a statutory remedy exists - joint and several liability of partners in respect of firm liabilities

Maintainability of writ petition vis-a -vis alternative statutory remedy under PMLA - scope of judicial review under Article 226 where a statutory remedy exists - provisional attachment under PMLA - Writ petition challenging provisional attachment orders is not maintainable insofar as alternative, efficacious remedies under the PMLA are available. - HELD THAT: - The PMLA provides a self-contained remedial scheme including provisional attachment under section 5, adjudication by the Adjudicating Authority under section 8, an appeal to the Appellate Tribunal and a further appeal to the High Court under section 42. Given these time-bound, multi-tiered and fact-capable remedies, the High Court should not ordinarily exercise extraordinary jurisdiction under Article 226 to short-circuit the statutory machinery. The Court held that the alternative remedies are not ill-suited to the exigency alleged and therefore the writ petition seeking to bypass that scheme is not maintainable. The petitioner may invoke the statutory forum to ventilate objections to provisional attachment and seek appropriate reliefs thereunder. [Paras 19, 21, 23]

Objection to maintainability upheld; writ petition dismissed for being not maintainable in view of alternative remedies under the PMLA.

Provisional attachment under PMLA - joint and several liability of partners in respect of firm liabilities - Claim that attachment beyond the first petitioner's alleged 51% share is ex facie non est was not accepted as an exceptional ground for habeas relief and the question of liability and extent of attachment is left for the statutory adjudicatory process. - HELD THAT: - The petitioners contended that the ED could only attach the first petitioner's share proportionate to his alleged 51% interest in the partnership. The Court observed that where proceeds are alleged to have arisen from the firm, section 25 of the Indian Partnership Act creates joint and several liability of partners for acts of the firm, and therefore prima facie an attachment of the whole amount cannot be pronounced ex facie invalid without detailed factual and legal consideration. The Court declined to entertain this contention as an exceptional reason to bypass the statutory remedy and left the question of the first petitioner's liability for the entire quantified proceeds and the correctness or excess of attachments to the Adjudicating Authority to be examined on merits. [Paras 22, 23]

Contention that attachments must be confined to 51% rejected as a ground for bypassing statutory remedy; issue left open and to be considered by the Adjudicating Authority.

Final Conclusion: The writ petition challenging multiple provisional attachment orders is dismissed as not maintainable because efficacious remedies under the PMLA exist; the Adjudicating Authority is directed to consider the petitioners' objections on merits without being influenced by this judgment, including the question of extent of liability and appropriateness of attachment.

Summary order. Delay condoned; notice issued returnable in six weeks; operation of the High Court judgment stayed subject to deposit of the sum quantified by the High Court (entire service tax Rs. 27,87,374) and furnishing of a bank guarantee as directed; interim relief granted pending disposal of the petition.

Determination of any question having a relation to the rate of duty or to the value of goods for purposes of assessment - direct and proximate relation test - coverage under an exemption notification - classification of services - negative list of services - maintainability under Section 35G of the Central Excise Act, 1944 - appeal to the Supreme Court under Section 35L of the Central Excise Act, 1944 - exemption for repair and maintenance services under Notification No. 25/2012 ST

Determination of any question having a relation to the rate of duty or to the value of goods for purposes of assessment - coverage under an exemption notification - classification of services - negative list of services - maintainability under Section 35G of the Central Excise Act, 1944 - Whether the Tax Appeal under Section 35G is maintainable where the Tribunal's order concerns applicability of an exemption notification and classification of services. - HELD THAT: - The Court held that the dispute concerns whether the assessee was eligible for exemption under Notification No. 25/2012 ST and related classification of services, which directly and proximately affects the rate/levy of tax (including nil rate) and the value for assessment. Reliance was placed on the established principle that questions as to classification and whether services are covered by an exemption notification fall within the expression relating to determination of rate of duty or value for purposes of assessment. Earlier decisions of this Court and other High Courts and the Supreme Court were examined and applied to conclude that such controversies are excluded from the High Court's jurisdiction under Section 35G and are within the appellate forum of the Supreme Court under Section 35L. The appellant's submission about the post 2012 negative list and uniform rate was considered but the Court held that the statutory test of direct and proximate relation to rate/value remains applicable; therefore the preliminary objection to maintainability succeeds. [Paras 13, 15]

The Tax Appeal under Section 35G is not maintainable and is dismissed.

Final Conclusion: The appeal is dismissed as not maintainable under Section 35G because the questions raised (classification and applicability of exemption) relate directly and proximately to determination of rate/value for assessment and therefore fall to be ventilated before the Supreme Court under Section 35L.

Limitation period for recovery of service tax where fraud, willful mis-statement or suppression - effect of declaration of a rule being ultra vires on validity of a demand-cum-show cause notice - pure agent deduction and reimbursable expenses as part of taxable value - saving of proceedings and continuation of jurisdiction after commencement of CGST Act - maintainability of writ against a demand-cum-show cause notice

Limitation period for recovery of service tax where fraud, willful mis-statement or suppression - The demand-cum-show cause notice is within the period of limitation under the proviso to Section 73 for allegations of willful mis-statement and suppression of facts. - HELD THAT: - Section 73(1) substitutes the normal eighteen-month limitation with five years where there is allegation of fraud, collusion, willful mis-statement or suppression of facts. The relevant date for computing limitation is the date on which the periodical return is filed under Section 73(6)(i)(a). The earliest relevant date in the record is 25.07.2016 (ST-3 for April-September 2015 filed on that date). The demand-cum-show cause notice dated 20.07.2021 therefore falls within five years from the relevant date when the allegations include willful mis-statement and suppression. [Paras 6, 7, 12, 13]

Limitation objection is rejected and the notice is held to be within time.

Effect of declaration of a rule being ultra vires on validity of a demand-cum-show cause notice - pure agent deduction and reimbursable expenses as part of taxable value - Although Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006 has been declared ultra vires, the demand-cum-show cause notice is not vitiated; the assessee must still prove that deductions claimed are genuine reimbursable expenses (pure agent) before the adjudicating authority. - HELD THAT: - Rule 5(1) - which treated expenditure incurred by service provider as part of consideration - has been held ultra vires by higher courts because it could lead to double taxation of reimbursements. However, the show cause notice here is founded on alleged mismatch between values declared in ST-3 returns and ITR/TDS records, and on large deductions claimed as 'pure agent' without supporting documents. The notice does not prima facie include reimbursed expenses as taxable value; rather, it raises tentative findings of misrepresentation and suppression and requires the assessee to establish that deductions are bona fide reimbursable expenses satisfying conditions of a pure agent. The presence of TDS on amounts claimed as reimbursable also gives reason to scrutinise the claim. [Paras 14, 15, 16, 17, 19]

The challenge based on Rule 5(1) being ultra vires does not invalidate the notice; the claim of pure-agent reimbursement must be proved before the adjudicating authority.

Saving of proceedings and continuation of jurisdiction after commencement of CGST Act - Proceedings under Chapter V of the Finance Act, 1994 remain valid and the issuing officer's jurisdiction was not extinguished by the CGST Act due to the saving clause. - HELD THAT: - The CGST Act omitted Chapter V of the Finance Act by its Section 173, but Section 174(2) of the CGST Act (repeal and saving) preserves operation of amended and repealed Acts and actions done thereunder. Consequently, proceedings initiated under Chapter V prior to or concurrent with transitional events are saved and validated; the jurisdiction of the authority to issue the demand-cum-show cause notice is not denuded merely because the CGST Act had been enacted. [Paras 20]

The challenge to jurisdiction on account of enactment of the CGST Act is rejected; proceedings under Chapter V are saved.

Maintainability of writ against a demand-cum-show cause notice - The writ petition against the demand-cum-show cause notice is not maintainable as a matter of course, but the court considered limited contentions of limitation and jurisdiction and found no infirmity warranting interference. - HELD THAT: - The High Court observed that ordinarily a writ against a demand-cum-show cause notice is not maintainable; however, in the exercise of its discretion it considered the specific contentions that the notice was time-barred and that the issuing authority lacked jurisdiction. On those limited pleas the court examined the record and legal position and declined to interfere with the show cause notice. [Paras 5, 22, 23]

Writ petition dismissed; no interference with the show cause notices while leaving the assessee to available remedies.

Final Conclusion: The writ petition is dismissed. The challenge to the demand-cum-show cause notice on limitation, on account of Rule 5(1) being declared ultra vires, and for want of jurisdiction after the CGST Act failed; the notices remain valid and the assessee must meet its defence before the adjudicating authority, with ordinary appellate or other remedies preserved.

Determination of value under Rule 2A of the Service Tax (Determination of Value) Rules, 2006 - Extended period of limitation under proviso to Section 73(1) of the Finance Act - Exclusion of value of transfer of property in goods and amount of VAT/sales tax in valuation of works contract service - Availability of CENVAT credit after determination of service element under Rule 2A - Duty of excise paid on goods transferred in execution of works contract not admissible as CENVAT credit

Extended period of limitation under proviso to Section 73(1) of the Finance Act - Suppression of facts, wilful mis-statement and intent to evade - Invocation of the extended period of limitation could not be sustained for the period January 2007 to September 2010 in respect of the first show cause notice. - HELD THAT: - The Tribunal found that the department had conducted regular audits of the appellant's records (audit reports dated 27.09.2010 and 25.05.2012) and the appellant had been filing ST-3 returns disclosing CENVAT credit availed. In these circumstances the department had knowledge of the relevant facts and cannot invoke the proviso to Section 73(1) which applies where there is fraud, collusion, wilful mis-statement, suppression of facts or contravention with intent to evade tax. The existence of ambiguity in law following introduction of works contract service w.e.f. 01.06.2007 (clarified later by Supreme Court decisions) and departmental acceptance of the appellant's filings and audits support the view that there was no proven deliberate concealment or intent to evade for the period in question. Accordingly the extended limitation period was not invokable for January 2007 to September 2010. [Paras 25, 26, 27, 31, 41]

The invocation of the extended period of limitation under the proviso to Section 73(1) is not sustainable for January 2007 to September 2010 and that portion of the demand is time-barred.

Determination of value under Rule 2A of the Service Tax (Determination of Value) Rules, 2006 - Exclusion of value of transfer of property in goods and VAT/sales tax in valuation - Availability of CENVAT credit after service element is determined under Rule 2A - Service tax for the relevant period is to be recomputed in accordance with Rule 2A of the 2006 Rules and CENVAT credit is to be adjusted thereafter; application of Rule 2A yields an entitlement to refund as calculated by the appellant which it has stated it will not claim. - HELD THAT: - The Tribunal applied Rule 2A as interpreted in the Supreme Court's directions: the taxable value of works contract service must be determined by excluding the value of transfer of property in goods involved in the execution of the works contract and excluding VAT/sales tax. The Tribunal noted that excise duty paid on goods transferred in execution of the works contract is not admissible as CENVAT credit (Explanation 2). On recomputation under Rule 2A for the period October 2010 to March 2014, the appellant submitted calculations certified by a Chartered Accountant indicating a net refund position. That certificate was accepted as forming part of the record. The Tribunal consequently ordered recomputation under Rule 2A and observed the appellant would be entitled to a refund of the calculated amount though the appellant has stated it will not claim such refund. [Paras 35, 36, 38, 39, 41]

Demands are to be recomputed in terms of Rule 2A for October 2010 to March 2014; recomputation as per the appellant's certified calculation shows an entitlement to refund which the appellant has elected not to claim.

Final Conclusion: The Commissioner's order dated 31.03.2017 is set aside: the extended limitation period under Section 73(1) proviso cannot be invoked for January 2007 to September 2010; demands are to be recomputed under Rule 2A for the remaining period (October 2010 to March 2014) with consequent adjustment of CENVAT credit and the appellant's certified computation shows a refundable balance which the appellant has declined to claim.

Exemption notifications for services relating to transmission and distribution of electricity - negative list exclusion of transmission or distribution of electricity services - essential activity having direct and close nexus with transmission and distribution - interpretation of the words "for" and "relating to" in exemption notifications - classification of taxable services rendered to a distribution/transmission utility - invocation of extended period and consequential penalties/interest

Exemption notifications for services relating to transmission and distribution of electricity - interpretation of the words "for" and "relating to" in exemption notifications - essential activity having direct and close nexus with transmission and distribution - classification of taxable services rendered to a distribution/transmission utility - Whether the services rendered by the appellant (registration/name-transfer/processing fees, consultancy/feasibility reports, training for non-employees, and leasing of land for power plant) are covered by the exemption for services "for" or "in relation to" transmission and distribution of electricity and therefore not leviable to service tax for the impugned periods. - HELD THAT: - The Tribunal analysed the exemption notifications operative prior to the negative-list regime and the negative-list exclusion effective from 1.7.2012. Applying settled principles, the words "for" and "relating to" in the exemption notifications are to be given a wide meaning so as to cover activities that are rendered in connection with the main activity of transmission and distribution. The determinative test is whether the questioned services are essential activities having a direct and close nexus with transmission and distribution of electricity, i.e., whether without such services the transmission/distribution function would be impaired. The Tribunal relied on decisions of this and other Benches which have held that erection, commissioning, installation, testing, manpower supply, maintenance, and other proximate activities provided to transmission/distribution utilities fall within the ambit of the exemption. The appellant's activities were considered in that factual and legal matrix: (a) registration/application/name-transfer and related statutory fees are part of the statutory scheme for grid connectivity and therefore relate to permitting electricity to enter the grid; (b) preparation of field feasibility and grid-tie documents are mandatory preconditions for allowing generated power into the grid and thus have a direct nexus with transmission/distribution; (c) training provided to non-employees is undertaken for skill upgradation necessary for proper transmission and distribution and is not an independent commercial activity; and (d) leasing of land to a generating plant was held to be for optimising generation and facilitating transmission/distribution. On these assessments the Tribunal concluded that these services are covered by the exemption notifications prior to the negative-list date and by the negative-list exclusion thereafter, and hence are not chargeable to service tax for the impugned periods.

Services in question were held to be services "for" or "in relation to" transmission and distribution of electricity and therefore exempt / outside levy for the relevant periods.

Invocation of extended period and consequential penalties/interest - Whether, having decided the matter on merits in favour of the appellant, the department's demands for duty, interest and penalties and the invocation of the extended period could survive. - HELD THAT: - The Tribunal recorded that because the substantive question of liability was decided in favour of the appellant on merits, there was no occasion to uphold any demand for service tax, and consequently questions of payment of duty, interest, penalties or the legitimacy of invoking the extended period do not arise. The Tribunal therefore set aside the impugned orders which had confirmed demands, interest and penalties.

Demands, interest, penalties and invocation of extended period were held inapplicable in view of the finding that the services were not leviable; impugned orders set aside.

Final Conclusion: Appeals allowed. The Tribunal set aside the impugned orders for the stated periods, holding that the challenged services fall within the exemption for transmission and distribution of electricity (and within the negative-list exclusion thereafter), and accordingly directed relief with consequential orders as per law.

Inclusion of free-supplied materials in gross value - valuation of taxable service - abatement under Notification No. 1/2006-ST - extended period of limitation - precedential effect of Larger Bench decision in Bhayana Builders and its affirmation by the Supreme Court

Inclusion of free-supplied materials in gross value - abatement under Notification No. 1/2006-ST - precedential effect of Larger Bench decision in Bhayana Builders and its affirmation by the Supreme Court - Whether value of materials supplied free by the service recipient must be included in the gross amount for computation of taxable turnover for service tax and denial of abatement. - HELD THAT: - The Tribunal found as a fact that reinforcement and structural steel were supplied free by the principal and were not part of the contract price as agreed between the parties. Applying the legal principle laid down by the Larger Bench in Bhayana Builders - subsequently affirmed by the Supreme Court - the value of materials supplied free by the service recipient cannot be added to the gross amount charged by the service provider for the purpose of computing taxable value and abatement under Notification No. 1/2006-ST. Reliance on the contrary bench ruling in Jai Hind Projects was displaced by the Larger Bench and the Apex Court's affirmation. In these circumstances, the demand framed for non-inclusion of the free-supplied materials, and consequent denial of abatement, was not sustainable. [Paras 9, 10]

Appeal allowed; demand set aside and appellant entitled to consequential benefits.

Final Conclusion: The Tribunal allowed the appeal, holding that the value of reinforcement and structural steel supplied free by the principal, being excluded from the contract price, cannot be added to the gross amount for service-tax computation and abatement; the impugned demand is set aside with consequential relief.

Eligibility of CENVAT credit and adjudicatory scrutiny of payments - protection under Section 73(3) for payment of tax with interest before issuance of show cause notice - exclusion of Section 73(3) where Section 73(4) (fraud, collusion, wilful mis statement, suppression of facts) applies - reasonable cause under Section 80 as ground to relieve from penalty - mandatory nature of penalty where no reasonable cause is established - quasi judicial discretion to disallow ineligible CENVAT credits

Eligibility of CENVAT credit and adjudicatory scrutiny of payments - quasi judicial discretion to disallow ineligible CENVAT credits - Whether the adjudicating authority could disallow the CENVAT credit of Rs. 4,05,781/- and adjust the payments after scrutinising the amounts claimed as used to discharge the alleged liability. - HELD THAT: - The Tribunal held that scrutiny of payments and CENVAT credit entries is an integral part of the quasi judicial adjudicatory process. The show cause notice framed allegations of non payment for the stated period and the demand had not crystallised at the SCN stage; adjudicatory examination of whether claimed credits were legally available was therefore appropriate. The adjudicating authority found the service in respect of which Rs. 4,05,781/- credit was availed was not received by the appellant and also noted discrepancies between amounts claimed to be debited and amounts actually debited, as recorded in the impugned order. Those factual findings were not disputed before the Tribunal. In these circumstances it was within the authority's discretion to refuse appropriation of the ineligible credit and to confirm the demand accordingly. [Paras 6]

The disallowance of the CENVAT credit and the consequent adjustment of payments is upheld.

Protection under Section 73(3) for payment of tax with interest before issuance of show cause notice - exclusion of Section 73(3) where Section 73(4) (fraud, collusion, wilful mis statement, suppression of facts) applies - Whether the appellants could claim immunity from issuance of a show cause notice under Section 73(3) by paying tax and interest before issuance of the SCN. - HELD THAT: - The Tribunal examined Section 73(3) and the proviso and concluded that the protection afforded by Section 73(3) is inapplicable where the circumstances fall within Section 73(4) (fraud, collusion, wilful mis statement, suppression of facts or contravention with intent to evade payment). The adjudicating authority invoked the extended limitation under the proviso to Section 73(1) on the basis of suppression of facts with intent to evade payment; the appellant conceded liability and significant payment but the extended period was invoked for suppression. Consequently the statutory bar under Section 73(3) could not be invoked by the appellant. The Board letter relied on by the appellant clarifying conclusion of proceedings under sub sections (1A) and (3) does not aid the appellant because Section 73(4) operates to exclude the protection in this case. [Paras 7]

The claim of protection under Section 73(3) is rejected on the ground that Section 73(4) applies to the facts of this case.

Reasonable cause under Section 80 as ground to relieve from penalty - mandatory nature of penalty where no reasonable cause is established - Whether the penalties imposed under the relevant penal provisions could be waived by applying Section 80 on the basis of the appellant's asserted financial constraints. - HELD THAT: - The Tribunal held that the burden to establish 'reasonable cause' rests on the appellant and must be proved on the material; a mere assertion of financial difficulty is insufficient. The adjudicating authority recorded reasons why the appellant's case did not disclose reasonable cause: absence of any dispute on taxability, the tax collected from clients not deposited (public money), late filing of ST 3 returns only after investigation, existence of CENVAT balance not applied earlier, and immediate payment once officers visited. These factual findings satisfy the requisite subjective satisfaction of the authority and are not demonstrably perverse. In view of statutory provisions and settled precedent on mandatory penalty where no reasonable cause is shown, the Tribunal declined to interfere with the imposition of penalty. [Paras 8]

The plea of reasonable cause under Section 80 is rejected and the penalties confirmed.

Final Conclusion: The Tribunal dismissed the appeal. The adjudicating authority's disallowance of the impugned CENVAT credit, the finding that Section 73(3) protection is unavailable because Section 73(4) applies, and the rejection of the appellants' plea of reasonable cause under Section 80 (with confirmation of mandatory penalties) were upheld.

Taxability of free warranty or policy services rendered by authorised dealers - Reimbursement by manufacturer and its characterisation as taxable consideration - Authorised service station service definition and liability to service tax - Mutual exclusivity of sales tax on dealers' margin and service tax on incidental services

Taxability of free warranty or policy services rendered by authorised dealers - Authorised service station service definition and liability to service tax - Free services provided by an authorised dealer to car purchasers during the warranty/policy period are not liable to service tax where no consideration is charged to the customer. - HELD THAT: - The Tribunal held that the statutory liability to service tax under the category of authorised service station is attracted only when a service is rendered to a customer for consideration. Free services rendered to car buyers involve no charge to the customer and are therefore not taxable as authorised service station services. The impugned demand, premised on Clause 4.4 of the dealership agreement, was found to be misplaced because warranty/free services are provided under a different clause of the agreement (clause 7.3) which does not contemplate reimbursement in the sense relied upon by the Revenue. The Tribunal applied its earlier reasoning in Jabalpur Motors Ltd. and other precedents which treated free servicing as not constituting a taxable service to the manufacturer and held the demand unsustainable.

Demand for service tax on free warranty/policy services provided by the dealer to car purchasers is set aside.

Reimbursement by manufacturer and its characterisation as taxable consideration - Mutual exclusivity of sales tax on dealers' margin and service tax on incidental services - Amounts forming part of the dealers' margin or recovered as part of the sale price of cars, including where the dealer meets free servicing from such margin, cannot be taxed again as service tax when that margin has already been subjected to sales tax. - HELD THAT: - Following precedent, the Tribunal reasoned that where the dealers' margin is recovered as part of the sale price of the motor car and subjected to sales tax, the provision of free after-sales servicing is merely incidental to the sale and intended to promote the sale of goods. In that constitutional and fiscal scheme, the levy of sales tax on the value of goods and an attempt to levy service tax on an element of the same transaction would be inconsistent. The Tribunal relied on authorities which held that reimbursement by the manufacturer, if any, and the character of the amount must be examined, and that free servicing normally funded from dealers' margin does not attract separate service tax if that margin has already borne sales tax.

No service tax can be levied on amounts representing the dealers' margin or part thereof already subjected to sales tax; the Commissioner's order imposing tax and penalties is set aside.

Final Conclusion: The Tribunal allowed the appeal, set aside the Commissioner's order confirming service-tax demand and penalties for the period April 2006 to March 2007, and granted consequential relief as per law, following prior Tribunal decisions that free warranty/policy services by authorised dealers are not chargeable to service tax.

Limitation under Section 11B of the Central Excise Act, 1944 - time-barred refund claims - refund of undue service tax paid - point of taxation - remand for verification and fresh adjudication - principles of natural justice

Limitation under Section 11B of the Central Excise Act, 1944 - time-barred refund claims - Application of limitation to the refund claims filed for service tax paid for the period October 2015 to June 2017 - HELD THAT: - The Tribunal held that, on application of Section 11B of the Central Excise Act, 1944, a portion of the appellant's refund claims is barred by limitation. Specifically, the claims relating to periods prior to the payment made on 29.06.2017 are time barred. However, the Tribunal found that the refund claim insofar as it relates to the tax amount paid on 29.06.2017 may not be hit by the limitation provision and thus survives the limitation objection. [Paras 7, 8]

Refund claims for periods prior to 29.06.2017 are time barred; the claim relating to payment on 29.06.2017 is not barred by limitation.

Point of taxation - refund of undue service tax paid - remand for verification and fresh adjudication - principles of natural justice - Whether the surviving refund claim (relating to payment on 29.06.2017) is admissible on merits and requires fresh consideration under the Point of Taxation Rules - HELD THAT: - The Tribunal noted that there is a substantive contest on the merits, including the applicability of the Point of Taxation Rules where the appellant contends that services were not rendered during the service tax regime and became taxable only under GST. Both parties conceded that the matter requires further scrutiny. Accordingly, the Tribunal set aside the impugned order to the extent of the claim pertaining to payment on 29.06.2017 and remanded that claim to the adjudicating authority for verification and fresh adjudication on merits, directing that the authority observe the principles of natural justice while deciding the claim. [Paras 4, 5, 7, 8]

Claim relating to payment on 29.06.2017 is remanded for verification and fresh adjudication on merits (including Point of Taxation issues), with observance of natural justice.

Final Conclusion: The impugned order is set aside; appeal allowed by way of remand limited to the refund claim relating to the payment on 29.06.2017 which is not barred by limitation and is to be decided afresh on merits by the adjudicating authority observing principles of natural justice, while claims for earlier periods are time barred.

Business support service under Section 65(104c) of the Finance Act, 1994 - sale of goods versus provision of service - service tax liability - binding effect of Tribunal precedents (CESTAT Chennai)

Business support service under Section 65(104c) of the Finance Act, 1994 - sale of goods versus provision of service - binding effect of Tribunal precedents (CESTAT Chennai) - Whether the appellant rendered business support service so as to attract service tax for the period complained of - HELD THAT: - The Tribunal examined the identical controversy previously decided by the Chennai Bench in the Mettur Thermal Power Station matters and applied that ratio. The earlier decisions held that collection of amounts for removal/supply of fly ash pursuant to Government orders and notifications amounted to sale of fly ash and not provision of a service to the recipients; there was no contractual foundation showing that the appellant provided facilities or services to the cement/asbestos companies. In light of those findings, the present Bench concluded that the appellant's activities could not be categorised as business support service under the cited provision and that the demand of service tax was unsustainable. Having followed the prior CESTAT Chennai precedent, there was no need to remit the matter for fresh inquiry. [Paras 9, 10]

The activities do not constitute business support service and the service tax demand does not survive; impugned orders are set aside and the appeals are allowed.

Final Conclusion: Following the Tribunal's earlier decisions in the appellant's sister cases, the demand of service tax treating supply/collection for fly ash as business support service was held unsustainable; the impugned orders were set aside and the appeals allowed with consequential relief.

Refund claim limitation under Section 11B of Central Excise Act, 1944 - applicability of Central Excise limitation to service tax refunds - relevant date for refund - date of payment - lapse of one-year limitation precluding refund

Refund claim limitation under Section 11B of Central Excise Act, 1944 - applicability of Central Excise limitation to service tax refunds - relevant date for refund - date of payment - lapse of one-year limitation precluding refund - Claim for refund of service tax was time-barred under Section 11B of the Central Excise Act, 1944 as applied to service tax; the relevant date is the date of payment of tax and the refund claim filed beyond one year was liable to be rejected. - HELD THAT: - The authorities below rejected the refund on the ground that the claim was not filed within the one-year period specified by Section 11B of the Central Excise Act, 1944. The Tribunal notes that the Commissioner (Appeals) followed the Supreme Court precedent holding that the limitation provisions of the Central Excise statute apply to departmental refund claims in the relevant class of cases, and that under Section 11B the relevant date for computing the one-year period is the date of payment of tax. The appellant's material shows payment within the calendar year 2012 while the refund claim was filed on 25.03.2019, which is beyond one year from the relevant date. In view of the settled application of Section 11B and the record showing delayed filing, no infirmity is found in the impugned order rejecting the refund.

Impugned order upholding rejection of refund claim as time-barred is affirmed; appeal dismissed.

Final Conclusion: The Tribunal affirms that Section 11B's one-year limitation (with the relevant date being the date of payment) applies to the service tax refund claimed; because the claim was filed beyond one year from payment, the appeal is dismissed and the impugned order is upheld.

Inter-unit transfer valuation - Cost of production versus notional loading - Application of a Larger Bench precedent - Remand for fresh consideration - Keeping parties' contentions open on remand

Application of a Larger Bench precedent - Remand for fresh consideration - Inter-unit transfer valuation - Impugned Tribunal order dated 22nd March 2013 set aside and matter remitted to the Tribunal for reconsideration in light of the Larger Bench decision in ITC Ltd. Vs. CCE. - HELD THAT: - The Tribunal's earlier view that valuation for inter-unit transfers should incorporate notional loading (i.e., 110%/115% of cost) was subsequently reversed by the Larger Bench in ITC Ltd. Vs. CCE. Having considered the Larger Bench decision and the competing positions taken before the Tribunal, the High Court concluded that the appropriate course is to set aside the Tribunal's impugned order and remit the matter to the Tribunal so that it may reconsider and decide the valuation issue afresh in the light of the Larger Bench ruling. The order expressly preserves all contentions of the parties for determination by the Tribunal on remand and directs the Tribunal to hear the matter expeditiously. [Paras 12, 13, 15, 16]

Impugned order set aside; appeal remitted to the Tribunal for reconsideration in light of the Larger Bench decision, with all contentions kept open and a direction for expeditious disposal.

Final Conclusion: The appeal is disposed of by setting aside the Tribunal's order dated 22nd March 2013 and remitting the matter to the Tribunal for fresh consideration in the light of the Larger Bench decision in ITC Ltd. Vs. CCE; all contentions are kept open and the Tribunal is requested to decide the matter expeditiously.

Limitation for filing appeals under Section 35 of the Central Excise Act - power to condone delay in filing appeals under the Central Excise regime - overriding effect of statutory limitation vis-a -vis the Limitation Act - medical incapacity as a ground for condoning delay

Limitation for filing appeals under Section 35 of the Central Excise Act - power to condone delay in filing appeals under the Central Excise regime - medical incapacity as a ground for condoning delay - overriding effect of statutory limitation vis-a -vis the Limitation Act - Whether the appeal to the Commissioner (Appeals) and the subsequent appeal to the CESTAT were rightly held time barred and whether delay could be condoned in view of the appellant's claimed medical incapacity. - HELD THAT: - The Court found the plea of illness untenable on the material on record: the impugned demand order was dated 01.05.2019, the statutory limitation for first appeal is 60 days extendable by 30 days under the Central Excise regime, and the medical records relied upon showed hospitalization for cardiac treatment in July 2018, long before the demand order. The appeal before the Commissioner (Appeals) was filed on 03.10.2019, well beyond the statutory period plus the 30 day extension. The Court applied binding Supreme Court precedents which hold that the statutory limitation under Section 35 of the Central Excise Act overrides Section 5 of the Limitation Act and that neither the Commissioner (Appeals) nor the CESTAT have power to extend the limitation beyond the prescribed period. The judgments relied upon by the appellant (concerning inherent jurisdiction of High Courts or extension of a benefit under a scheme) were held distinguishable and inapplicable to the mandatory limitation under the Central Excise Act. On these grounds the CESTAT's refusal to entertain the delayed appeal was upheld. [Paras 5, 6, 7, 8, 9]

The CESTAT was justified in dismissing the appeal as time barred; the claimed medical incapacity did not furnish a plausible ground for condonation of delay and the appeal dismissed by the CESTAT stands affirmed.

Final Conclusion: The writ petition/appeal is dismissed: the appellant's appeal was time barred under the statutory limitation governing appeals in the Central Excise regime, the claimed medical grounds did not justify condonation of delay, and the CESTAT correctly refused to entertain the delayed appeal.

CENVAT credit on Input Services - definition of Input Service under Rule 2(l) of the CENVAT Credit Rules, 2004 - admissibility of Commercial Construction Services availed prior to December 2008 - admissibility of Canteen/Outdoor Catering Services prior to 1st April 2011 - travel agency services as business expenditure not personal use - AMC for office equipment and broadband services as Input Services - penalty for erroneous CENVAT credit where credit is admissible

Admissibility of Commercial Construction Services availed prior to December 2008 - definition of Input Service under Rule 2(l) of the CENVAT Credit Rules, 2004 - CENVAT credit on Commercial Construction Services availed prior to December 2008 is admissible as Input Service. - HELD THAT: - The Tribunal accepted that construction-related services availed by the appellant prior to December 2008 for creating, extending or modifying production-related facilities fall within the scope of "Input Service" as defined under Rule 2(l) of the CENVAT Credit Rules, 2004. The Adjudicating Authority's reliance on Circular No.98/1/2008 was held to be misplaced in denying credit for services antecedent to the change, and the prior treatment in Rico Auto Industries Limited was followed in favour of the appellant. [Paras 6]

CENVAT credit for the Construction Services so availed is allowable and the denial was set aside.

Admissibility of Canteen/Outdoor Catering Services prior to 1st April 2011 - CENVAT credit on compulsory employee welfare services - CENVAT credit on Outdoor Catering/Canteen Services availed prior to 1st April 2011 is admissible. - HELD THAT: - The Tribunal found the denial rested on an allegation of recovery from employees shown by a sample salary slip, which was not part of the show-cause notice and therefore the Order-in-Original travelled beyond the allegations. Further, precedent of the High Court of Karnataka in Toyota Kirloskar Motor Private Limited, affirmed by the Supreme Court, recognises entitlement to CENVAT credit in respect of canteen services prior to 1st April 2011. On these bases the Tribunal held the credit to be rightly availed. [Paras 6]

CENVAT credit for the Outdoor Catering/Canteen Services is allowable and the denial was set aside.

Travel agency services as business expenditure not personal use - CENVAT credit on Travel Agency Services used to arrange business travel for employees is admissible. - HELD THAT: - The Tribunal accepted the appellant's submission that travel agency services were engaged to arrange visits to customers, suppliers and statutory authorities and therefore served the business purpose. The Adjudicating Authority's presumption that such services were for personal use lacked supporting evidence. The Tribunal followed the reasoning in Ramco Cements Ltd. to hold the services as input services for business. [Paras 6]

CENVAT credit for Travel Agency Services is allowable and the denial was set aside.

AMC for office equipment and broadband services as Input Services - CENVAT credit on AMC of photocopy machines and broadband (internet) services is admissible as Input Services. - HELD THAT: - The Tribunal found that AMC of photocopy machines and broadband services were required for the appellant's business operations and could not be characterised as personal use. The Adjudicating Authority's contrary presumption was unsupported by cogent evidence. The services squarely fall within the definition of Input Service and relevant precedents on necessity of such services for business were accepted. [Paras 6]

CENVAT credit for AMC of photocopy machines and broadband services is allowable and the denial was set aside.

Penalty for erroneous CENVAT credit where credit is admissible - Penalty could not be sustained where the appellants were found entitled to take the CENVAT credit. - HELD THAT: - Insofar as penalty was imposed on the premise that CENVAT credit was wrongly taken, the Tribunal observed that because the credit was held admissible on the merits for the services in dispute, imposition of penalty could not be maintained. [Paras 6, 7]

Any penalty premised on denial of the contested CENVAT credits cannot be sustained.

Final Conclusion: All five appeals are allowed: the impugned Order-in-Original is set aside and CENVAT credit in respect of the Construction Services, Outdoor Catering/Canteen Services, Travel Agency Services, AMC of photocopy machines and broadband services is held admissible for the periods in question; consequential penalty findings are not sustained.

Re-determination of annual production capacity without issuance of show cause notice - right to challenge re-determination during adjudication on demand - finality of earlier determination and preclusion of revenue from taking inconsistent stand

Re-determination of annual production capacity without issuance of show cause notice - Validity of re-determination of annual capacity of production effected without issuing a show cause notice. - HELD THAT: - The Tribunal held that the re-determination of the appellant's annual production capacity effected by the Joint Commissioner on subsequent dates was not sustainable because it was made without issuance of a show cause notice. The appellate order and the adjudicating authority gave effect to that re-determination by issuing a show cause notice for differential duty, but the Tribunal followed the view in the High Court's decision in Bengal Hammer Industries Pvt. Ltd. that an assessee has the right to challenge such unilateral re-determination when duty is demanded. Applying that principle, the Tribunal concluded that the re-determination carried out without following the requisite procedural step of issuing a show cause notice was impermissible and liable to be set aside. [Paras 3, 4]

Re-determination without issuance of a show cause notice is not sustainable; impugned orders re-fixing annual capacity are set aside.

Right to challenge re-determination during adjudication on demand - finality of earlier determination and preclusion of revenue from taking inconsistent stand - Whether the appellant could challenge the re-determination of annual capacity despite not having earlier contested the re-determination itself. - HELD THAT: - Relying on the High Court's reasoning reproduced in the order, the Tribunal accepted that an assessee who faces a demand based on a later re-determination may challenge the re-determination in proceedings on the demand. The Tribunal noted the principle that where the department has accepted or not appealed earlier determinations in identical cases, it is precluded from taking a contrary stand; similarly, absence of prior challenge to a re-determination does not extinguish the assessee's right to contest that re-determination when a demand is raised. Consequently, the Tribunal entertained the appellant's challenge to the re-determination made without following proper procedure. [Paras 3]

Assessee may challenge the re-determination of annual capacity when confronted with a demand; prior non-challenge does not bar such contest where procedural infirmity is shown.

Final Conclusion: The appeals are allowed; the impugned orders re-determining annual production capacity and the consequent demand are set aside and the appellants are entitled to consequential relief.

Payment under protest - reversal of Cenvat credit as deemed payment - refund limitation under the deemed-date rule in appellate orders - relevant date for refund - appellate order as triggering event - adjustment of penalty against sanctioned refund

Payment under protest - reversal of Cenvat credit as deemed payment - Payment effected by reversal of cenvat credit before issuance of show cause notice, followed by contest on limitation, does not constitute payment under protest. - HELD THAT: - The appellant reversed cenvat credit after an audit observation and subsequently contested the demand on limitation grounds once a show cause notice was issued. The Tribunal found that a reversal made pursuant to audit observations, followed by contestation in adjudication, cannot be equated to payment under protest. The fact that the appellant disputed the demand later does not convert the earlier voluntary reversal into a protest payment for purposes of claiming an exception to refund limitation rules. [Paras 14]

The reversal of cenvat credit and later contesting the demand does not amount to payment under protest.

Refund limitation under the deemed-date rule in appellate orders - relevant date for refund - appellate order as triggering event - Refund claim filed after one year from the date of the Tribunal's order is time barred where the relevant date for refund is the date of the appellate order. - HELD THAT: - Sectional explanation identifying the appellate order as the relevant triggering date for refund claims was applied to the facts. The appellant filed the refund application more than one year after the Hon'ble CESTAT's final order. Consequently, the adjudicating authority's rejection of the refund as time barred was held legally tenable because the refund claim was not filed within the statutory one year period counted from the Tribunal's order. [Paras 15]

The refund claim is time barred as it was filed after one year from the Tribunal's order.

Adjustment of penalty against sanctioned refund - Adjustment of proportionate penalty from the sanctioned refund is maintainable where the Tribunal did not set aside the imposition of penalty and there was wrongful availment of credit. - HELD THAT: - The Tribunal had waived interest but did not set aside penalty in respect of the ineligible cenvat credit. Given the finding of wrongful availment of credit, the adjudicating authority adjusted a proportionate amount of penalty against the sanctioned refund. The appellate authority upheld that position, noting that penalty remained payable and therefore its adjustment from refund proceeds was lawful and maintainable. [Paras 16]

The adjudicating authority's adjustment of the penalty from the sanctioned refund is legally tenable.

Final Conclusion: The appeal is dismissed.

Applicability of Rule 6 of the Cenvat Credit Rules, 2004 - Whether waste/residual material generated during screening/sorting amounts to manufacture/excisable goods - Deeming provision for manufacture under Section 2(f) in absence of specified process - Recovery of cenvat credit availed on common input services used for non-excisable/exempted goods

Applicability of Rule 6 of the Cenvat Credit Rules, 2004 - Whether waste/residual material generated during screening/sorting amounts to manufacture/excisable goods - Recovery of cenvat credit availed on common input services used for non-excisable/exempted goods - Waste Met Coke generated during screening/sorting of Met Coke used in steel manufacture is not subject to Rule 6 of the Cenvat Credit Rules, 2004 and demand for recovery of cenvat credit on common input services for that waste is not sustainable. - HELD THAT: - The Tribunal applied the reasoning of the Supreme Court in Union of India v. DSCL Sugar Ltd., which held that where a residue (bagasse) is not the result of any specified process and is essentially agricultural waste/residue, it does not amount to a manufacture under the deeming provision and therefore Rule 6 has no application. The Tribunal noted that this principle has been followed in subsequent decisions, including the Tribunal's own decision in Jayaswal Neco Industries Ltd., which held that waste Met Coke generated during sieving/sorting is not exigible to Rule 6. Applying those precedents to the facts, the waste Met Coke here is a residual material generated in screening/sorting and not the product of a process amounting to manufacture; consequently the demand for recovery of cenvat credit availed on common input services used in generating that waste was without merit. [Paras 4, 5]

Impugned demand confirmed by the Commissioner under Rule 6 is set aside and the appeal is allowed.

Final Conclusion: The Tribunal allowed the appeal, set aside the adjudication demanding recovery of cenvat credit in respect of waste Met Coke generated during screening/sorting for the period August 2008 to February 2011, and granted consequential relief as per law.

Right of redemption - Section 13(8) of the SARFAESI Act - Section 60 of the Transfer of Property Act, 1882 - sanctity of public auction - Article 226 writ jurisdiction and alternative remedy - Rule 9(2) and Rule 9(6) of the Security Interest (Enforcement) Rules, 2002 - overriding effect of a special statute (Section 35 of the SARFAESI Act) - equity cannot override clear statutory provision

Article 226 writ jurisdiction and alternative remedy - Maintainability of writ petition under Article 226 where statutory remedy under Section 17 of the SARFAESI Act has been or can be availed. - HELD THAT: - The High Court ought not to have entertained the writ petition when the borrowers had an available and effective statutory remedy under Section 17 of the SARFAESI Act and had already invoked it. The exercise of extraordinary writ jurisdiction in SARFAESI matters must be undertaken with restraint; courts should ordinarily insist on exhaustion of the statutory remedy unless exceptional circumstances (such as total violation of procedure or breach of natural justice) exist. The Bombay High Court accepted the petition on 'peculiar facts' and by reference to an agreed arrangement between the bank and the borrowers; that was improper because it bypassed the statutory machinery and undermined predictable operation of the SARFAESI regime. The Court therefore found the High Court's exercise of Article 226 jurisdiction in this case unjustified. [Paras 26, 91, 92, 105]

Writ petition was not maintainable; High Court erred in exercising Article 226 in the facts of this case.

Rule 9(2) and Rule 9(6) of the Security Interest (Enforcement) Rules, 2002 - sanctity of public auction - Whether confirmation of sale under Rule 9(2) confers a vested right on the successful auction purchaser and the bank's obligations thereafter. - HELD THAT: - Confirmation of sale under Rule 9(2) vests in the successful auction purchaser a vested right to obtain the sale certificate and, on compliance with the payment terms, to have the sale certificate issued under Rule 9(6). Courts must jealously protect the sanctity of public auctions; interference post-confirmation is permissible only on limited grounds (fraud, collusion, material irregularity). Once the purchaser has complied with payment obligations, the authorised officer/bank is under a mandatory duty to issue the sale certificate and deliver possession unless there is a lawful stay or annulment of the auction process. [Paras 26, 83, 98, 105]

Confirmation under Rule 9(2) gives the auction purchaser a vested right and the bank was obliged to issue the sale certificate under Rule 9(6) once payment was received.

Section 13(8) of the SARFAESI Act - Section 60 of the Transfer of Property Act, 1882 - overriding effect of a special statute (Section 35 of the SARFAESI Act) - Impact of the 2016 amendment to Section 13(8) of the SARFAESI Act on the mortgagor's right of redemption under Section 60 of the Transfer of Property Act. - HELD THAT: - The 2016 amendment to Section 13(8) replaced the cut-off from 'any time before the date fixed for sale or transfer' to 'at any time before the date of publication of notice for public auction or inviting quotations or tender...'. That amendment effects a deliberate, material departure from the general law under Section 60 TP Act. In light of the SARFAESI Act's special character and its overriding provision (Section 35), the amended Section 13(8) curtails the borrower's statutory right of redemption such that, under the SARFAESI regime, the right to redeem subsists only up to the date of publication of the auction notice. Consequently the general rule in Section 60 TP Act (extinction on execution/registration of conveyance) cannot be allowed to override the amended special provision. [Paras 50, 64, 68, 105]

Amended Section 13(8) restricts the right of redemption to the period before publication of the auction notice; Section 35 enables the special SARFAESI provision to override the general law.

Right of redemption - Section 13(8) of the SARFAESI Act - Point of time until which the borrower can exercise the right of redemption under the post amendment SARFAESI Act. - HELD THAT: - Where the borrower fails to tender the entire dues, costs and charges before publication of the auction notice, the borrower's right of redemption stands extinguished/waived on the date of publication of that notice. The Court reasoned that permitting redemption after publication (and in particular after auction confirmation and full payment by an auction purchaser) would destroy the sanctity of auctions and frustrate the statutory purpose of expeditious recovery; therefore a bright-line rule at the date of publication is necessary under the amended statute. [Paras 60, 68, 88, 105]

Right of redemption under the SARFAESI Act is available only until publication of the auction notice; it is extinguished thereafter.

Equity cannot override clear statutory provision - sanctity of public auction - Whether the High Court could apply equitable considerations to override the statutory auction process and favour the borrower after auction confirmation. - HELD THAT: - Equitable considerations cannot be allowed to supplant clear statutory provisions. The High Court applied equitable reasoning (consensus between bank and borrowers) to permit redemption after auction confirmation and full payment by the auction purchaser; this was contrary to the statutory scheme and the need to protect auction sanctity. The Court held that equity must follow the law and that allowing such interference would encourage disruptive last minute redemption offers and erode public confidence in auctions. [Paras 91, 101, 105]

High Court erred in applying equity to override the statutory auction process; equity cannot supplant clear statutory provisions.

Rule 9(6) of the Security Interest (Enforcement) Rules, 2002 - conduct of secured creditor - Whether the bank could withhold issuance of the sale certificate after confirming sale and receiving full payment and enter into a private arrangement with the borrower. - HELD THAT: - Once the authorised officer/bank confirmed the auction and the auction purchaser paid the entire bid amount in accordance with the Rules, the bank had a mandatory duty to issue the sale certificate under Rule 9(6). The Bank's withholding of the sale certificate and its subsequent private arrangement with the borrower (accepting the borrower's later payment) was inconsistent with the statutory obligations; such conduct undermined the auction purchaser's vested rights and contravened the SARFAESI scheme. The Court criticised the bank's inconsistent stance before tribunals and the High Court. [Paras 98, 99, 105]

The bank could not withhold the sale certificate after confirmation and full payment or enter into a private arrangement with the borrower; its conduct was unlawful.

Right of redemption - Section 13(8) of the SARFAESI Act - judicial precedents on redemption - Whether earlier High Court decisions holding that Section 60 TP Act continues to apply post amendment represent the correct position of law. - HELD THAT: - The Court analysed competing High Court decisions and earlier Supreme Court precedents. It concluded that decisions which treated the amended Section 13(8) as not affecting the Act 1882's right of redemption (e.g., Concern Readymix, Amme Srisailam, and Pal Alloys) are incorrect because they failed to give effect to the deliberate legislative change effected in 2016 and to the SARFAESI Act's special and overriding character. Conversely, decisions (Sri Sai Annadhatha Polymers, K.V.V. Prasad Rao Gupta) that interpreted the amendment as curtailing the mortgagor's timeline were correctly reasoned. The Court observed that certain Supreme Court precedents decided before or without addressing the 2016 amendment cannot be read as governing the post amendment position. [Paras 56, 73, 76, 105]

Decisions holding that Section 60 TP Act governs redemption notwithstanding the 2016 amendment are incorrect; post amendment the SARFAESI provision controls and those High Court decisions are not good law.

Final Conclusion: The appeals are allowed. The Bombay High Court's order directing redemption after auction confirmation was set aside. The Bank must refund the amount paid by the borrowers; the auction purchaser must deposit the additional sum directed by this Court, and upon such deposit the Bank shall issue the sale certificate in accordance with Rule 9(6) of the Rules of 2002. The Court held that, post amendment, a borrower's right of redemption under the SARFAESI Act subsists only until publication of the auction notice and that courts must not allow equitable considerations to displace clear statutory mandates protecting the sanctity of auctions.

Presumption under Section 139 of the Negotiable Instruments Act - Offence under Section 138 of the Negotiable Instruments Act - Rebuttal of statutory presumption - Mental illness defence in cheque dishonour prosecutions - Scope of High Court's revisional jurisdiction

Offence under Section 138 of the Negotiable Instruments Act - Presumption under Section 139 of the Negotiable Instruments Act - Validity of conviction under Section 138 of the Negotiable Instruments Act in view of the statutory presumption under Section 139. - HELD THAT: - The complainant proved issuance, presentation and dishonour of the cheque and service of legal notice. The accused did not deny his signature on the cheque and admitted the bank account; accordingly the statutory presumption under Section 139 applies and was not successfully rebutted. Reliance on precedents establishes that a voluntarily signed cheque attracts the presumption that it was issued for discharge of a debt unless contrary evidence is produced. The trial and appellate courts appreciated the oral and documentary evidence and found no cogent evidence to displace the presumption, justifying conviction under Section 138. [Paras 8, 9, 11, 12]

Conviction under Section 138 upheld as the presumption under Section 139 remained unrebutted and the essential ingredients of the offence were established.

Mental illness defence in cheque dishonour prosecutions - Rebuttal of statutory presumption - Sufficiency of evidence to establish that accused was suffering from mental disease at time of signing the cheque so as to rebut the presumption under Section 139. - HELD THAT: - Defence witness stated the accused was unwell and that a blank signed cheque was taken when he was not well. However, the accused himself did not adduce cogent evidence to prove mental illness at the time of signing or to rebut the statutory presumption. The trial and appellate courts considered this defence evidence but found it insufficient to negate the presumption of consideration; an assertion in 313 CrPC alone does not constitute substantive evidence to displace the presumption. [Paras 8, 12]

Claim of mental disease failed to rebut the presumption; defence evidence was insufficient and did not vitiate the conviction.

Scope of High Court's revisional jurisdiction - Whether interference by the High Court in revisional jurisdiction was warranted in the present matter. - HELD THAT: - The High Court's revisional power is limited to correcting material irregularity, illegality, arbitrariness or perversity in the impugned order. Having examined the record, the Court found no such material irregularity or illegality in the concurrent findings of the trial and appellate courts regarding issuance, dishonour and failure to rebut the statutory presumption. Consequently, there was no ground for interference in revision. [Paras 12, 13]

Revision dismissed; no interference called for in exercise of revisional jurisdiction.

Final Conclusion: Criminal revision dismissed; the conviction and sentence under Section 138 of the Negotiable Instruments Act were affirmed as the statutory presumption under Section 139 stood unrebutted, the mental illness defence was inadequately proved, and no ground existed for interference in revisional jurisdiction.

Presumption under Section 139 of Negotiable Instruments Act - Offence under Section 138 of the Negotiable Instruments Act - Burden to rebut presumption - Proof of issuance, presentation, dishonour and service of statutory notice - Setting aside acquittal for misapplication of law

Presumption under Section 139 of Negotiable Instruments Act - Burden to rebut presumption - Whether the trial court erred in acquitting the accused despite admission of signature on the cheques and absence of evidence rebutting the statutory presumption under Section 139. - HELD THAT: - The trial court's acquittal was found to be legally unsustainable because the respondent admitted his signatures on the cheques and did not dispute that the cheques and account belonged to him (recorded in his 313 statement). The complainant proved the cheques, bank memos of dishonour and service of notice through oral and documentary evidence (PW-1, PW-2 and exhibits). In such circumstances the statutory presumption under Section 139 operates in favour of the holder and it was for the accused to produce evidence to rebut that presumption. The respondent failed to lead such rebuttal evidence and the trial court erred in dismissing the complaint on technical grounds relating to proprietorship documentation instead of applying the presumption and the settled law cited from the Apex Court decision. Consequently, the acquittal was set aside and guilt under Section 138 was recorded. [Paras 9, 12, 13]

The trial court erred in law; the presumption under Section 139 applies and was not rebutted, warranting conviction under Section 138.

Proof of issuance, presentation, dishonour and service of statutory notice - Offence under Section 138 of the Negotiable Instruments Act - Whether the complainant proved issuance of cheques, their presentation and dishonour, and service of statutory notice sufficient to sustain conviction under Section 138. - HELD THAT: - The complainant exhibited the cheques and bank memos showing dishonour and produced the registered notice; PW-1 and PW-2 supported these facts and the accused did not contest the provenance of the cheques except by a statement that they were taken from his office, while admitting signatures. The court applied the legal principle that once issuance, presentation, dishonour and notice are proved and the presumption under Section 139 remains unrebutted, the offence under Section 138 stands established. On that basis the appellate court found the evidence sufficient to convict the accused under Section 138 and to impose sentence. [Paras 8, 9, 12, 14]

The complainant proved issuance, presentation, dishonour and service of notice; conviction under Section 138 is warranted.

Final Conclusion: Acquittal of the respondent by the trial court was set aside; respondent held guilty of the offence under Section 138 of the Negotiable Instruments Act, convicted and sentenced to pay a fine to the complainant (with default imprisonment as ordered).

Leave to appeal under Section 378(4) CrPC - liability under Section 138 of the Negotiable Instruments Act - drawer must draw cheque on account maintained by him - authorized signatory and capacity of director versus personal capacity - existence of legally enforceable debt

Leave to appeal under Section 378(4) CrPC - Grant of leave to appeal against the order of acquittal passed under Section 138 of the Negotiable Instruments Act. - HELD THAT: - The High Court after hearing parties found that the case raises a question requiring appellate consideration, particularly in light of the material placed on record (two cheques at Exhibits 22 and 23) and the legal principle in Mainuddin Abdul Sattar Shaikh regarding drawer liability. The Court observed that those materials prima facie indicate involvement of the respondent as an authorized signatory of the company and that the interplay between company cheques and the disputed cheque signed in personal capacity merits scrutiny. On this basis the Court made the Rule absolute and granted leave to appeal under Section 378(4) CrPC and admitted the criminal appeal.

Leave to appeal granted; criminal appeal admitted.

Liability under Section 138 of the Negotiable Instruments Act - drawer must draw cheque on account maintained by him - authorized signatory and capacity of director versus personal capacity - existence of legally enforceable debt - Whether the respondent, who signed earlier company cheques as an authorized signatory but executed the disputed cheque in his individual name, can be held liable under Section 138 NI Act for a legally enforceable debt in his personal capacity. - HELD THAT: - The Court referred to the principle in Mainuddin Abdul Sattar Shaikh that liability under Section 138 attaches to the person who draws a cheque on an account maintained by him for discharge of a debt or liability. The impugned magistrate acquitted the respondent on the ground that the complainant failed to establish a legally enforceable debt against the respondent individually. The High Court observed that Exhibits 22 and 23 show the respondent as an authorized signatory for the company for earlier cheques dated 15.04.2015 and 02.05.2015, whereas the disputed cheque dated 25.03.2016 bears his signature in individual capacity. Given these factual and legal overlaps, the High Court found that the question of whether the drawer liability attaches to the respondent in his personal capacity, despite earlier signatory role for the company, requires fresh consideration on merits and evidence. The Court therefore directed that the matter be considered in appeal rather than deciding the substantive question at the leave stage.

Substantive question of individual liability under Section 138 NI Act remitted for appellate adjudication; to be examined on merits in the admitted appeal.

Final Conclusion: The High Court made the Rule absolute and granted leave to appeal under Section 378(4) CrPC, admitted the criminal appeal for adjudication; the core substantive question-whether the respondent is liable under Section 138 NI Act in his personal capacity despite earlier cheques showing him as an authorized signatory of the company-is left for fresh consideration in the appeal.