TaxTMI Updates e-Newsletter
Oct 15,2024

Natural justice - voluntary cancellation of GST registration - revocation of cancellation - right to show cause notice and personal hearing - speaking order requirement / non application of mind - retrospective cancellation - restoration of status quo - restraint on utilisation of Input Tax Credit pending proceedings

Natural justice - revocation of cancellation - right to show cause notice and personal hearing - Revocation of the petitioner's accepted voluntary cancellation of GST registration without prior notice or hearing was contrary to principles of natural justice. - HELD THAT: - The Court confined its scrutiny to the decision making process. The petitioner's voluntary cancellation dated 9 May 2023 had been accepted and made effective from 8 May 2023. Nearly ten months later, the CGST Authority revoked that cancellation by an order dated 20 February 2024 without issuing any show cause notice or affording a hearing to the petitioner and without disclosing the purported orders from the Appellate/Higher Authority which purportedly prompted revival. The absence of any prior opportunity to be heard before restoration of the registration vitiates the process and is contrary to the requirements of natural justice. The Court therefore found the revocation to be procedurally infirm and quashed the impugned revocation and consequent orders. [Paras 12, 13, 16, 17]

Revocation of the voluntary cancellation was set aside as violative of natural justice; consequential proceedings arising therefrom were quashed.

Speaking order requirement / non application of mind - The Form GST REG 05 rejecting the petitioner's application did not contain reasons and therefore lacked requisite speaking reasons and indicated non application of mind. - HELD THAT: - The form rejecting the voluntary cancellation recorded that the reply was not found satisfactory 'for the following reasons' but the space for reasons was left blank. The omission to state reasons in a rejection that affects rights was held to be contrary to principles of natural justice and indicative of non application of mind, rendering the rejection unsustainable. [Paras 14]

The rejection for voluntary cancellation was quashed for want of reasons and non application of mind.

Retrospective cancellation - restoration of status quo - restraint on utilisation of Input Tax Credit pending proceedings - Cancellation of registration with retrospective effect from 27 June 2020 was unexplained and, in consequence of the procedural infirmities, the Court restored the position as of 8 May 2023 and imposed interim restraints while permitting respondents to re proceed. - HELD THAT: - The Court noted the anomaly that registration had been granted on 28 June 2021 whereas the cancellation order purported to operate retrospectively from 27 June 2020, without explanation. Because the revocation and ensuing cancellation were procedurally flawed, the Court set aside the orders dated 20 February 2024, 8 March 2024 and 9 May 2024, and restored the status as of 8 May 2023 (date of acceptance of the petitioner's cancellation). To balance interests, the petitioner was restrained from utilising any Input Tax Credit standing to its credit as of 8 May 2023 until 31 January 2025, and the respondents were granted liberty to take fresh proceedings in accordance with law. [Paras 15, 17, 19, 20]

Orders cancelling/ revoking registration (including retrospective cancellation) were quashed; position as of 8 May 2023 restored; petitioner restrained from utilising ITC as of 8 May 2023 until 31 January 2025; respondents permitted to re proceed lawfully.

Voluntary cancellation of GST registration - right to show cause notice and personal hearing - Respondents are permitted to reconsider and decide the matter afresh by issuing a show cause notice and passing a speaking order within a specified timeframe. - HELD THAT: - Having quashed the impugned orders on grounds of denial of natural justice and absence of reasons, the Court did not adjudicate the merits. Instead, it granted respondents liberty to issue a show cause notice for revocation of the petitioner's cancellation, to pass and communicate a speaking order to the petitioner, and to complete any recovery or related proceedings in accordance with law by 31 January 2025. This constitutes an order remanding the decision making to the respondents for fresh consideration, subject to procedural safeguards. [Paras 12, 20]

Matter remanded for fresh consideration; respondents to issue show cause and pass a speaking order and conclude related proceedings on or before 31 January 2025.

Final Conclusion: The impugned orders of 20 February 2024, 8 March 2024 and 9 May 2024 were quashed for procedural infirmity; the position as of 8 May 2023 is restored. The respondents are permitted to re proceed by issuing a show cause notice and passing a speaking order, and to conclude any consequential proceedings, by 31 January 2025; the petitioner is restrained from utilising ITC as of 8 May 2023 until that date.

Transition of input tax credit - Input Service Distributor - Section 140 of the CGST Act - effect of The Finance (No. 2) Act, 2024 on transitional claims - remand to proper officer for fresh consideration

Transition of input tax credit - Input Service Distributor - Section 140 of the CGST Act - effect of The Finance (No. 2) Act, 2024 on transitional claims - Relief seeking declaration that an Input Service Distributor is entitled to transition past indirect tax credit to the GST regime under Section 140 of the CGST Act - HELD THAT: - The Court recorded that the substantive claim in prayer (a) has been rendered operative by The Finance (No. 2) Act, 2024 coming into force on the date specified in notification No. 17/24 dated 27 September 2024. In consequence, the specific declaration sought in prayer (a) stands worked out by the statutory change referred to by the petitioner, and no further adjudication by this Court on that prayer was required. [Paras 3]

Prayer (a) stands worked out on The Finance (No. 2) Act, 2024 coming into force and is treated as satisfied.

Remand to proper officer for fresh consideration - mechanism to distribute ISD credit - writ relief against communications - Reliefs seeking quashing of communications dated 03.06.2020 and 09.06.2020 and directions to prescribe mechanism for distribution of transitioned ISD credit - HELD THAT: - The Court declined to decide the remaining substantive and declaratory/mandamus reliefs itself. Instead, it directed that the relevant proper officer under the CGST and SGST Acts shall deal with those claims in accordance with law, taking cognisance of The Finance (No. 2) Act, 2024. All contentions and remedies of the parties were left open for consideration by the proper officer in the first instance, thereby remitting the matters for fresh consideration rather than adjudicating them on merits. [Paras 4, 6]

Other reliefs (including challenge to the communications and directions regarding distribution of ISD credit) are remitted to the relevant proper officer to be decided in accordance with law and after taking cognisance of The Finance (No. 2) Act, 2024.

Final Conclusion: The petition is disposed: the declaration sought in prayer (a) is treated as worked out by The Finance (No. 2) Act, 2024; the remaining reliefs are remitted to the appropriate GST authorities for fresh consideration in accordance with law. No costs.

Detention and seizure of goods under the Central Goods and Services Tax regime - zero rated supply by way of export and qualification for exemption from integrated tax - procedural lapse of non-generation or belated generation of e-invoice as rectifiable/documentary error - provisional release of detained goods on production of return evidence - statutory appellate remedy under the CGST appellate framework

Zero rated supply by way of export and qualification for exemption from integrated tax - procedural lapse of non-generation or belated generation of e-invoice as rectifiable/documentary error - provisional release of detained goods on production of return evidence - Entitlement to provisional release of detained goods where the goods are claimed to be export (zero rated) and non-generation of e-invoice is alleged to be a technical or procedural lapse. - HELD THAT: - The Court noted that the goods related to an export transaction treated as zero rated under the IGST scheme and that the petitioner asserted non-generation of the e-invoice was a technical error rectified by subsequent generation and production. In view of these facts, the Court directed that the petitioner submit a copy of the relevant Form GSTR-1 to the appropriate respondent so as to demonstrate that the transaction was disclosed as a zero rate sale. If the petitioner is able to demonstrate inclusion of the transaction in the GSTR-1 return, the detained goods shall be released provisionally. The court observed that disclosure in GSTR-1 would indicate whether integrated tax was required to be paid or whether export formalities such as export under bond/Letter of Undertaking applied, thereby permitting provisional release while preserving the revenue's right to proceed if non-compliance persists. [Paras 8, 9]

Upon production of the relevant GSTR-1 evidencing the transaction as a zero rate export, the goods shall be provisionally released.

Statutory appellate remedy under the CGST appellate framework - time-bound disposal of statutory appeal and provisional release application - Availability and procedural course of remedy by statutory appeal against the impugned detention/penalty proceedings. - HELD THAT: - The Court made clear that the petitioner remains free to challenge the impugned proceedings by filing a statutory appeal before the appropriate appellate authority under the CGST enactment. The Court directed that any such appeal be filed within the prescribed time and, if filed, shall be disposed of on merits and in accordance with law within four weeks from filing. The order also preserved the petitioner's ability to seek provisional release by filing the appropriate application and required the appellate authority to decide such applications expeditiously, subject to conditions including compliance with any pre-deposit requirements. [Paras 9, 10]

Petitioner may file a statutory appeal and the appellate authority shall decide the appeal and any application for provisional release within the time periods directed by the Court.

Final Conclusion: Writ petition disposed: provisional release of detained goods directed upon production of GSTR-1 evidencing the export (zero rated) transaction; petitioner permitted to pursue statutory appeal and any application for provisional release, which the appellate authority is directed to decide within the specified short timelines.

Cancellation of registration - duty to state reasons - reasoned order requirement - show cause notice - opportunity of hearing - quashing for absence of reasons - restoration for fresh consideration

Cancellation of registration - duty to state reasons - reasoned order requirement - quashing for absence of reasons - restoration for fresh consideration - Impugned orders cancelling registration were unsustainable because they did not state any reasons for cancellation and were therefore liable to be set aside - HELD THAT: - The Court held that the cancellation orders (Ext.P2 in both petitions) do not disclose any reason for cancelling the registrations and consist merely of a reproduction of provisions of Sections 29 and 30 of the CGST/SGST Acts. Relying on the principle that every order must stand on its own legs, the Court found that the absence of reasons in the cancellation orders rendered them deficient. The Court therefore quashed the impugned orders and restored the proposals for cancellation to the file of the first respondent for fresh disposal. The petitioners are to be afforded an opportunity to file replies to the show cause notices and an opportunity of hearing before fresh orders are passed. The Court expressly declined to decide the merits of the cancellation or to rule on whether a defective Form used for the show cause notice vitiates proceedings, leaving those matters open for fresh consideration by the first respondent. [Paras 3]

Ext.P2 quashed; proposals restored to file of the 1st respondent who shall pass fresh orders after affording the petitioners an opportunity to file replies to the show cause notices and to be heard; no expression of opinion on merits.

Final Conclusion: Writ petitions allowed to the extent that the cancellation orders are quashed for failure to state reasons; matters remitted for fresh consideration after giving the petitioners an opportunity to reply and to be heard, with no decision on the merits by the Court.

Invocation of Section 74 of the CGST/SGST Acts requiring willful suppression for extended period - scope of writ jurisdiction under Article 226 in relation to disputed questions of fact - rectification under Section 161 of the CGST Act and its limited scope - exclusion of time during pendency of rectification for limitation of appeal

Invocation of Section 74 of the CGST/SGST Acts requiring willful suppression for extended period - Validity of invoking the extended period under Section 74 against the petitioner - HELD THAT: - The Court found that the show cause notice and order identify instances of suppression and discrepancies in stock and records as the basis for invoking Section 74. While the petitioner challenged the invocation as erroneous and relied on alleged drafting errors in the notice, the Court held that these contentions raise disputed questions of fact which require adjudication by the statutory authority. The Court therefore declined to quash the proceedings on the ground that Section 74 was wrongly invoked, leaving the question of whether the suppression was willful and with intent to evade tax to the adjudicatory process under the CGST/SGST scheme. [Paras 4]

Invocation of Section 74 was not set aside; factual disputes on willful suppression must be decided by the statutory authority.

Scope of writ jurisdiction under Article 226 in relation to disputed questions of fact - Whether the High Court should determine disputed factual questions in the writ petition under Article 226 - HELD THAT: - The Court reiterated that writ jurisdiction under Article 226 is not the appropriate forum to adjudicate disputed questions of fact. The petitioner's challenges to factual findings in the show cause notice and adjudication cannot be resolved in the writ petition where an alternative remedy exists. The Court observed that the petitioner has statutory remedies to have the factual disputes and the applicability of the extended period adjudicated by the competent tax authorities and appellate fora. [Paras 4]

Writ petition cannot be used to decide disputed factual issues; petitioner must pursue statutory remedies.

Rectification under Section 161 of the CGST Act and its limited scope - Challenge to rejection of the application for rectification under Section 161 (Ext.P10) - HELD THAT: - The Court noted that the petitioner filed an application for rectification which was considered and rejected. Although the officer sought further particulars while considering the rectification, the petitioner did not furnish the requested details. The Court found that the rejection of the rectification application was based on the petitioner's failure to produce materials necessary for consideration, and that the rectification remedy had been availed of but did not warrant intervention by the writ court. [Paras 4]

Rejection of the rectification application upheld; no interference by the writ court.

Exclusion of time during pendency of rectification for limitation of appeal - Whether the period during which the rectification application was pending should be excluded for computing limitation for appeal - HELD THAT: - Having noted the dates of the order, the rectification application and its rejection, the Court exercised its discretion to exclude the period from the filing of the rectification application to the date of the rejection for the purpose of computing any period of limitation within which the petitioner must file an appeal against the adjudicatory order. The Court also clarified that its observations would not preclude the petitioner from raising before the Appellate Authority the contention that Section 74 should not have been invoked. [Paras 4]

Period during pendency of rectification excluded for limitation for filing appeal; petitioner free to press contentions before appellate authority.

Final Conclusion: Writ petition dismissed; impugned adjudicatory order and rectification rejection not interfered with on merits by this Court; period during pendency of rectification excluded for limitation purposes; petitioner may agitate the factual and legal contentions, including the applicability of Section 74, before the statutory appellate forum.

Transitional input tax credit - Proof of payment of duty as condition for transitional credit - Registration exemption under Rule 9 and centralized registration - Remand for verification of documentary evidence

Transitional input tax credit - Registration exemption under Rule 9 and centralized registration - Whether the Orders-in-Original and Appellate Order rejecting the petitioner's transitional credit claim should be set aside and the matter remanded for verification of registration coverage of branches under the centralized registration - HELD THAT: - The High Court found that the respondent authorities had rejected the petitioner's transitional credit claim inter alia on the basis that the stock transfer vouchers emanated from branches which were not registered under Rule 9 of the Central Excise Rules, 2002. The Court observed that Rule 9 itself contemplates exemption by notification for centralized registration and noted that the petitioner produced a centralized registration certificate and annexure before the Court showing branches covered by that registration. As questions regarding whether the registration certificate actually covered the relevant branches and whether the authorities correctly rejected the documents as not emanating from a registered entity are questions of primary fact for adjudication by the authority, the Court declined to decide those factual contests on writ and considered it appropriate to remit the issue to the Original Authority for fresh examination in accordance with law. The Court therefore set aside the impugned orders and directed remand for verification whether the petitioner's centralized registration covered the said branches. [Paras 22, 23, 26]

Impugned orders set aside and matter remanded to the Original Authority to determine whether the petitioner's centralized registration covered the branches and whether credit was correctly rejected on registration grounds.

Proof of payment of duty as condition for transitional credit - Remand for verification of documentary evidence - Whether the petitioner should be permitted to demonstrate proof of payment of duty and correlation between invoices and the transitional credit claim and the consequences thereof - HELD THAT: - The Court noted that the authorities additionally found a lack of correlation between the invoices produced and the credit claimed and that no documents demonstrating proof of payment of duty had been placed before the authorities. Treating these as factual questions requiring primary adjudication, the Court remanded the matter to the Original Authority and granted the petitioner liberty to produce necessary documents, including documents evidencing transfer from the manufacturing unit and proof of payment of duty, so that the authority may determine whether the credit claimed is in accordance with the statute and rules. [Paras 21, 23, 26]

Petitioner permitted to produce documents and matter remanded to the Original Authority to verify proof of payment and correlation between invoices and the credit claim.

Final Conclusion: The High Court set aside the Orders-in-Original and Appellate Order and remanded the dispute to the Original Authority for verification (i) whether the petitioner's centralized registration covered the relevant branches and (ii) whether the petitioner can demonstrate proof of payment of duty and correlation of invoices with the transitional credit claimed; petitioner granted liberty to produce requisite documents; writ petition disposed without costs.

Negative blocking of electronic credit ledger - availability of input tax credit in the electronic credit ledger as a condition precedent to invoking Rule 86A - Rule 86A of the CGST Rules - power to disallow debit from electronic credit ledger on recording of reasons to believe - reasons to believe to be recorded in writing - distinction between provisional restriction under Rule 86A and recovery under Sections 73/74

Availability of input tax credit in the electronic credit ledger as a condition precedent to invoking Rule 86A - Rule 86A of the CGST Rules - power to disallow debit from electronic credit ledger on recording of reasons to believe - Invocation of Rule 86A is impermissible where no input tax credit is available in the electronic credit ledger and thus negative blocking of future credits cannot be effected. - HELD THAT: - The Court held that the plain language of Rule 86A presupposes existence of input tax credit in the electronic credit ledger as a pre-condition for its invocation. The power under Rule 86A permits the proper officer, on recording reasons to believe in writing, to disallow debit from the electronic credit ledger for an amount equivalent to the credit believed to be fraudulent or ineligible. If no credit exists in the ledger at the time of invocation, the rule cannot be validly exercised and any action inserting a negative balance or blocking future avails is beyond the scope of Rule 86A. The Court followed its earlier decision in Samay Alloys India Pvt. Ltd. and reiterated that Rule 86A is a restrictive, provisional measure and must be strictly construed; it is not a mandate to make debit entries or effect permanent recovery which are governed by Sections 73/74. The concomitant consequence is that invoking Rule 86A without the requisite availability of credit renders the blocking wholly without jurisdiction and illegal. [Paras 38, 40, 41, 44]

Rule 86A cannot be invoked to block or create a negative balance where the electronic credit ledger showed no available input tax credit; the impugned negative blocking is invalid.

Negative blocking of electronic credit ledger - no power to debit electronic credit ledger / make negative balance - distinction between provisional restriction under Rule 86A and recovery under Sections 73/74 - Proper officer has no power under Rule 86A to make debit entries in the electronic credit ledger or to effect permanent recovery; the rule permits only provisional restriction of debit for an equivalent amount where conditions are met. - HELD THAT: - The Court explained that Rule 86A authorises disallowance of debit (i.e., restriction on utilisation) of an amount equivalent to the alleged fraudulent or ineligible credit and not the making of debit entries in the registered person's ledger. Making debit entries would amount to permanent recovery, a power which the statute confines to the procedures under Sections 73 and 74. Consequently, Rule 86A must be used sparingly, on weighty subjective grounds supported by cogent materials and recorded reasons, and not as a tool to permanently appropriate or extinguish the ledger balance. The Court therefore treated unilateral insertion of a negative balance by administrative action as impermissible in the absence of express statutory authority. [Paras 35, 40, 43]

An officer cannot effect debit entries or permanent deductions from the electronic credit ledger under Rule 86A; the rule only permits a provisional restriction on utilisation of an amount equivalent to the alleged ineligible credit.

Reasons to believe to be recorded in writing - negative blocking of electronic credit ledger - Blocking of ITC must be based on some cogent material with reasons to believe recorded in writing and used sparingly so as not to irreparably harm the business; any residual balance after removal of an unlawful negative block must remain non utilisable until show cause proceedings under Sections 73/74, if issued. - HELD THAT: - The Court reiterated that the subjective satisfaction under Rule 86A must rest on credible materials and be recorded in writing; vague or remote materials do not suffice. The power is drastic and ought not be exercised to harass or irreversibly damage the assessee's business. While Rule 86A provides for provisional restriction, final determination and recovery lie under Sections 73/74. Accordingly, the Court directed withdrawal of the negative block and ordered that whatever balance remains after adjustment of the negative figure shall not be utilised by the petitioner until any show cause notice under Sections 73 or 74 is issued and determined in accordance with law. [Paras 38, 43, 46]

Blocking must be founded on recorded reasons and cogent material; the negative block is to be withdrawn and any remaining balance shall not be utilised until formal proceedings under Sections 73/74, if initiated.

Final Conclusion: The petition is allowed: the respondents are directed to withdraw the negative block on the petitioner's electronic credit ledger to the extent of the challenged amount; the withdrawal is without prejudice to initiation of show cause proceedings under Sections 73/74, and any balance remaining after removal of the negative figure shall not be utilised until such proceedings, if any, are validly commenced and concluded.

Order under Section 73 of the GST Act - input tax credit mismatch - non-receipt of notice and right to be heard - opportunity of personal hearing - remand for fresh consideration on conditions - payment of portion of disputed tax as pre-condition for continued adjudication - conditional revival of order

Input tax credit mismatch - non-receipt of notice and right to be heard - opportunity of personal hearing - Validity of the impugned order demanding tax, interest and penalty where the petitioner did not receive the notice and asserted availability of documents to rebut the alleged GSTR-2A/GSTR-3B mismatch. - HELD THAT: - The Court accepted the petitioner's representation that the petitioner did not receive the departmental notice and that there exist materials to substantiate the defence that there was no mismatch between GSTR-2A and GSTR-3B. In view of the petitioner's asserted entitlement to be heard and to place documents in defence, the impugned order of assessment under the GST scheme could not be allowed to stand without affording an opportunity of hearing and consideration of the available records. The Court noted the departmental scrutiny had resulted in a demand and penalty, but emphasised the need for fresh adjudication after giving the petitioner an opportunity to contest the claim and produce relevant documents. [Paras 7]

Impugned order set aside for being assailable on the stated grounds and remitted for fresh consideration after affording the petitioner an opportunity of hearing.

Remand for fresh consideration on conditions - payment of portion of disputed tax as pre-condition for continued adjudication - conditional revival of order - Procedure and conditions for remand: the terms on which the matter is to be reconsidered and the consequences of non-compliance. - HELD THAT: - The Court directed that the matter be remanded to the assessing authority for fresh consideration on specified conditions. The petitioner is required to pay 10% of the disputed tax amount within four weeks; failure to comply will result in automatic revival of the impugned order. On compliance, the petitioner must file reply/objection with all relevant documents within two weeks, after which the authority shall issue fresh notice, afford personal hearing and pass final orders within three months. These conditions balance the petitioner's right to be heard with the public interest in tax recovery and provide a time-bound mechanism for final adjudication. [Paras 8]

Matter remanded to the respondent with the stated conditional timetable and consequences; directions issued for filing of reply, personal hearing and disposal within prescribed time limits.

Final Conclusion: Writ petition allowed: the assessment order under Section 73 is set aside and the matter is remitted for fresh consideration on the specified conditional terms (payment of 10% of disputed tax within four weeks, filing of reply within two weeks thereafter, issuance of fresh notice, personal hearing and final order within three months); non-compliance will revive the impugned order.

Bail under Section 439 Cr.P.C. - Conditions for grant of bail - Verification of sureties - Non-tampering with witnesses and evidence - Surrender of passport and travel restriction - Cooperation with investigation and trial - Judicial reliance on earlier decision for identical allegations - Scope of judicial observations - not determinative of merits

Bail under Section 439 Cr.P.C. - Conditions for grant of bail - Verification of sureties - Non-tampering with witnesses and evidence - Surrender of passport and travel restriction - Cooperation with investigation and trial - Grant of bail to the petitioner subject to conditions as articulated in paragraph-15 of the earlier judgment dated 23.11.2023. - HELD THAT: - The petitioner, who is alleged to be similarly placed as a co-accused dealt with in BLAPL No. 9999 of 2023, sought bail in respect of the same FIR and prosecution report. The Court accepted that the contentions and allegations are identical to those considered in the earlier order dated 23.11.2023 and, applying the principles noted in the earlier judgment (including reliance on Satender Kumar Antil v. CBI and Ratnambar Kaushik v. Union of India as referred to in that order), held that bail should be granted. The grant is made expressly subject to the stringent conditions set out in paragraph 15 of the earlier judgment, which include: furnishing two sureties (one a family member and one a local person) with court verified credentials; prohibition on inducement, threat or tampering with witnesses or evidence; prohibition on engaging in similar criminal activity; surrender of passport and prohibition on leaving the country without court permission (or affidavit if no passport); requirement to cooperate with investigation and trial, remain contactable by mobile, and to appear as required; and the provision that any breach or subsequent involvement in crime will entitle the investigating agency to seek cancellation of bail. The Court directed that the learned court in seisin shall hear the parties and impose and verify any additional terms and record its satisfaction as required. The order implements the earlier considered test rather than re adjudicating merits of the allegations. [Paras 7, 8]

Bail granted to the petitioner in terms of paragraph-15 of the judgment dated 23.11.2023, subject to the specified conditions and verification of sureties; petition disposed of.

Scope of judicial observations - not determinative of merits - Clarification that observations in the order do not indicate the Court's opinion on the merits of the pending trial. - HELD THAT: - The Court expressly recorded that any observations made in this bail order shall not be construed as expressing an opinion on the merits of contentions that will be raised during the pending trial before the learned court in seisin. This preserves the trial court's adjudicatory role on merits and confines the present order to bail considerations. [Paras 9]

Observations in this order do not decide or comment upon the merits of the pending trial.

Final Conclusion: The petitioner is granted bail on the terms and conditions set out in paragraph-15 of the earlier judgment dated 23.11.2023; the learned court in seisin is to hear parties, verify sureties and impose/record appropriate conditions, and the order's observations do not adjudicate the merits of the case.

TDS u/s 195 - Royalty or FTS or business profits - payment made to NTOs is towards interconnectivity charges - Assessee is an ILD license holder and responsible for providing connectivity to calls originating/terminating outside India - as decided by HC [2023 (7) TMI 1164 - KARNATAKA HIGH COURT] an assessee is entitled to take the benefit under a DTAA between two countries. Hence, the ITAT’s view that DTAA cannot be considered in proceedings under Section 201 of the Act is tenable. Assessee is not obliged to do the impossible. As facilities are situated outside India and the agreement is with a Belgium entity which does not have any presence in India. Therefore, the Tax authorities in India shall have no jurisdiction to bring to tax the income arising from extra-territorial source.

HELD THAT:- During the course of submissions, we realised that this petition is covered by the judgment of this Court in Engineering Analysis Centre of Excellence Private Limited [2021 (3) TMI 138 - SUPREME COURT] which has been followed in other cases also.

When this fact was brought to the notice of petitioners, it was pointed out that in similar matters, this Court has issued notice.

The submission of that there is a Review Petition pending before this Court and notice issued was in order. That is no reason for entertaining any subsequent matter having regard to the Explanation of Order XLVII Rule 1 of the Code of Civil Procedure, 1908.

Respondent has brought to our notice order passed inGE India Technology Private Limited Etc. [2024 (4) TMI 1168 - SC ORDER]whereby a three-Judge Bench of this Court had dismissed the said Review Petitions both on the ground of delay as well as on merits.

Special Leave Petition is dismissed on merits following the aforesaid judgment/order.

Levy of penalty under Section 271D - Requirement of recorded satisfaction for imposing penalty - Violation of Section 269SS - Presumption of acceptance of assessee's explanation - Referral to superior officer for initiation of penalty

Levy of penalty under Section 271D - Requirement of recorded satisfaction for imposing penalty - Violation of Section 269SS - Presumption of acceptance of assessee's explanation - Referral to superior officer for initiation of penalty - Whether the penalty under Section 271D could be validly levied where the Assessing Officer did not record any satisfaction that provisions of Section 269SS were violated and referred the file to the Joint Commissioner for initiating penalty proceedings. - HELD THAT: - The Court found that the Assessing Officer, while making additions in assessment, did not record any finding that the assessee violated Section 269SS nor any satisfaction that would attract penal consequences under Section 271D. The material placed on record showed that the assessee had denied receiving or repaying cash loans and had given explanations; absent an express finding rejecting that explanation, a presumption arises that the department accepted the explanation. The Court held that it is incumbent on the Assessing Officer-the primary authority conducting assessment-to record satisfaction on the violation before referring the file to the superior officer for imposition of penalty. In the absence of such recorded satisfaction in the assessment order, the Joint Commissioner could not validly exercise jurisdiction to levy penalty under Section 271D. The Court applied the principle in Jai Laxmi Rice Mills and concluded that levy of penalty without the requisite satisfaction is unsustainable. [Paras 8, 9]

Penalty imposed under Section 271D is set aside for want of recorded satisfaction by the Assessing Officer that Section 269SS was violated; the penalty cannot be sustained.

Final Conclusion: Writ petition allowed; order imposing penalty under Section 271D set aside for failure of the Assessing Officer to record requisite satisfaction regarding contravention of Section 269SS, and there shall be no order as to costs.

Notice under Section 143(2) of the Income-tax Act, 1961 - prescribed income-tax authority - authorisation under Rule 12E of the Income-tax Rules, 1962 - jurisdiction of Assessing Officer - service versus issue of notice - validity of notices under Section 142(1) of the Income-tax Act, 1961 - role of National Faceless Assessment Centre (NaFAC) - limitation for notices under Section 143(2)

Notice under Section 143(2) of the Income-tax Act, 1961 - prescribed income-tax authority - authorisation under Rule 12E of the Income-tax Rules, 1962 - service versus issue of notice - Validity of the notice dated 23.06.2024 under Section 143(2) issued by the Assistant Commissioner of Income Tax/Deputy Commissioner of Income Tax (International Taxation), Circle-1(1)(1), Delhi. - HELD THAT: - The Court held that Section 143(2) permits either the Assessing Officer or the prescribed income-tax authority to issue a notice; the expression 'as the case may be' contemplates either authority issuing the notice. Rule 12E authorises the CBDT to designate an income-tax officer not below the rank of Income-tax Officer as a 'prescribed income-tax authority' for purposes of Section 143(2). The CBDT notifications dated 12.05.2022 and 28.05.2022 validly authorised the Assistant Commissioner/Deputy Commissioner (International Taxation), Circle-1(1)(1), Delhi to act as the prescribed income-tax authority. Accordingly, the contention that only the Assessing Officer can issue the notice, or that the prescribed authority can only 'serve' but not 'issue' a notice, is unsustainable. The Court also rejected the narrower submission that only NaFAC officers may be so authorised, observing that neither Section 143(2) nor Rule 12E confines authorisation to NaFAC officers. [Paras 8, 9, 10, 11, 12]

Notice dated 23.06.2024 issued under Section 143(2) is valid and within the issuing authority's jurisdiction.

Validity of notices under Section 142(1) of the Income-tax Act, 1961 - limitation for notices under Section 143(2) - jurisdiction of Assessing Officer - Challenge to the notices dated 10.07.2024, 06.09.2024 and 17.09.2024 issued under Section 142(1) on the ground that they are beyond the period of limitation because the Section 143(2) notice was allegedly invalid. - HELD THAT: - The Court found that because the Section 143(2) notice was validly issued by the authorised Assistant Commissioner (as above), the contention that the subsequent Section 142(1) notices were time-barred for being predicated on an invalid notice fails. Acceptance that the Assessing Officer had jurisdiction to issue the Section 143(2) notice necessarily meant the Assessing Officer could proceed with the assessment process; therefore the impugned Section 142(1) notices are not invalid or beyond limitation on the basis urged. [Paras 3, 13, 14]

Notices dated 10.07.2024, 06.09.2024 and 17.09.2024 issued under Section 142(1) are not rendered time-barred by reason of any invalidity in the Section 143(2) notice.

Role of National Faceless Assessment Centre (NaFAC) - jurisdiction of Assessing Officer under Section 144B - Question whether, in terms of Section 144B, assessments are required to be completed only by NaFAC was not addressed by the Court. - HELD THAT: - The Court recorded that the petitioner raised a contention regarding the jurisdiction of the Assessing Officer in view of Section 144B and the requirement that assessments be completed by NaFAC, but the petitioner conceded that this ground was not urged in the petition. Consequently the Court did not consider or decide the point. The matter was left open for adjudication in appropriate proceedings where the contention is properly urged. [Paras 15]

Point not decided by the Court; left open for consideration in proceedings where the ground is properly urged.

Final Conclusion: The petition challenging the impugned notices is dismissed: the Section 143(2) notice dated 23.06.2024 was validly issued by an authorised prescribed income-tax authority under Rule 12E and the consequent Section 142(1) notices are not time-barred on the basis contended; a separate contention concerning Section 144B/NaFAC was not argued and remains undecided.

Addition to income under Section 68 for unexplained cash credits - treatment of unexplained deposits under Section 69A - ex-parte assessment under Section 144 - onus on assessee to rebut presumption arising from credited sums - concurrent factual findings and absence of substantial question of law

Addition to income under Section 68 for unexplained cash credits - treatment of unexplained deposits under Section 69A - ex-parte assessment under Section 144 - onus on assessee to rebut presumption arising from credited sums - concurrent factual findings and absence of substantial question of law - Whether any substantial question of law arises from the ITAT's affirmation of addition under Section 68 read with Section 69A in respect of cash deposits in the assessee's bank account for Assessment Year 2012-13. - HELD THAT: - The Court recorded that the Assessing Officer issued multiple notices and, on the assessee's non-appearance, completed an ex-parte assessment under Section 144 treating deposits of Rs. 11,44,070 as unexplained income and making additions under Section 68 read with Section 69A. The appellate authority (CIT(A), NFAC) similarly recorded absence of documentary explanation despite repeated notices, and the ITAT-after admitting additional documents-found those documents not to inspire confidence. Applying established principles in P. Mohanakala, Chuharmal, K. Chinnathamban and the test in Vijay Kumar Talwar, the Court held that once a sum is found credited/held by the assessee and no satisfactory explanation is furnished, the burden lies on the assessee to rebut the presumption; factual findings by the Tribunal that the assessee failed to discharge that burden are final unless shown to be perverse or based on no evidence. The present record showed non-participation before AO and appellate authority, and the additional evidence before the ITAT did not persuade the Tribunal; there was no demonstrated perversity or failure to apply legal principles warranting interference. Consequently, no substantial question of law arises from the ITAT's concurrent factual conclusion upholding the addition under Section 68 read with Section 69A. [Paras 7, 8, 14, 15, 16]

No substantial question of law arises; the ITAT's factual finding that the assessee failed to satisfactorily explain the cash deposits and the consequent addition under Section 68 read with Section 69A is upheld.

Final Conclusion: The appeal is dismissed at the admission stage as no substantial question of law is shown to arise from the ITAT's concurrent factual findings upholding the addition under Section 68 read with Section 69A for Assessment Year 2012-13.

Scope of review under Order XLVII Rule 1 CPC / Rule 203 of the Jharkhand High Court Rules - error apparent on the face of the record - review is not an appeal in disguise - interest liability under 10.7.4 of the Jharkhand State Electricity Regulatory Commission (Electricity Supply Code) Regulation, 2015 - imposition of costs and personal liability of public functionaries

Interest liability under 10.7.4 of the Jharkhand State Electricity Regulatory Commission (Electricity Supply Code) Regulation, 2015 - error apparent on the face of the record - Whether the direction to pay interest on the withheld amount under clause 10.7.4 of the Regulation, 2015 is ambiguous or liable to be set aside in review - HELD THAT: - The Court examined paragraph-18 of the earlier order and the text of clause 10.7.4. Clause 10.7.4 mandates refund of any excess amount within 15 days (or adjustment in subsequent bills) and prescribes interest at the rate equivalent to the delay payment surcharge from the date of payment until refund or adjustment. The coordinate Bench applied that provision to hold the writ-petitioner entitled to interest on the withheld amount. The review contention that the order is vague because it does not specify the date from which interest accrues was rejected: the provision itself specifies the period (from date of payment till refund/adjustment) and therefore there is no error apparent on the face of the record which would justify review. A challenge to the correctness of the application of the provision is a matter of appeal and cannot be entertained in review. [Paras 22, 23, 24, 25, 26]

The direction to pay interest under paragraph-18, founded on clause 10.7.4 of the Regulation, is not ambiguous and is not susceptible to review; any grievance as to correctness lies in appeal.

Imposition of costs and personal liability of public functionaries - natural justice / impleading of a party - review is not an appeal in disguise - Whether the imposition of costs of Rs.5 lakhs on the Managing Director without his being a party was vitiating or a ground for review - HELD THAT: - The Court noted that paragraph-22 imposed costs personally on the Managing Director because the litigation and decision at the highest level were shown on the record. The Court held that even if the consideration leading to imposition of costs is said to be wrong, that would not amount to an error apparent on the face of the record warranting review; such a grievance is amenable to appeal. As to non-impleading, the Court observed that where personal liability is imposed on a non-party, that individual has the remedy of directly approaching the Court to challenge the liability. Consequently, absence of prior impleading of the Managing Director does not convert the order into one vulnerable to review under the narrow grounds permitted. [Paras 27, 28, 29, 30]

Imposition of costs on the Managing Director does not disclose an error apparent on the face of the record for purposes of review; the Managing Director may individually challenge the order, and the matter is not maintainable as a review.

Final Conclusion: The civil review is dismissed. The earlier directions - awarding interest under clause 10.7.4 of the Regulation, 2015 and imposing costs on the Managing Director - do not disclose error apparent on the face of the record warranting review; correctness of those orders is open to challenge by appeal or by the person personally aggrieved.

Unexplained money under Section 69A - presumption as to availability of demonstrated cash withdrawals shifting burden to the Revenue - conversion of foreign currency and requirement of forex receipts - penalty under Section 271AAC consequential to assessed income - recalculation of interest under Sections 234A, 234B and 234C consequential to assessment

Unexplained money under Section 69A - presumption as to availability of demonstrated cash withdrawals shifting burden to the Revenue - conversion of foreign currency and requirement of forex receipts - Addition of Rs. 12,00,000 made under Section 69A reduced to Rs. 3,70,000; Rs. 8,30,000 treated as satisfactorily explained by documented cash withdrawals. - HELD THAT: - The Tribunal accepted the assessee's bank statements demonstrating cash withdrawals from ICICI Bank and SBI aggregating to Rs. 8,30,000 and found no evidence on record that those withdrawn sums were applied for other purposes. In view of demonstrated withdrawals, the evidentiary burden shifted to the Department to disprove availability of the cash for later deposit; no contrary evidence was produced. Consequently, Rs. 8,30,000 of the deposits made during demonetization were held to be explained. By contrast, the claim that Rs. 3,70,000 arose from conversion of withdrawn USD was not supported by forex conversion receipts from authorized dealers. Given the regulatory and documentary requirements for foreign currency conversion, absence of such receipts created an evidentiary deficiency that militated against acceptance of the USD-conversion explanation. Applying these conclusions, the addition under Section 69A was sustained only to the extent of the undocumented sum of Rs. 3,70,000 and reduced accordingly. [Paras 6]

Addition under Section 69A reduced from Rs. 12,00,000 to Rs. 3,70,000; Rs. 8,30,000 accepted as explained by documented cash withdrawals.

Penalty under Section 271AAC consequential to assessed income - recalculation of interest under Sections 234A, 234B and 234C consequential to assessment - Penalty under Section 271AAC and interest under Sections 234A, 234B and 234C to be recomputed in accordance with the reduced addition. - HELD THAT: - The imposition and quantum of penalty and interest are consequential on the revised assessment. Having reduced the addition to Rs. 3,70,000, the Tribunal directed the Assessing Officer to recompute the penalty under Section 271AAC and interest under Sections 234A, 234B and 234C in conformity with the reduced assessed income and the principles governing recalculation of consequential liabilities. [Paras 7]

Penalty and interest to be recalculated by the Assessing Officer on the basis of the reduced addition of Rs. 3,70,000.

Final Conclusion: The appeal is partly allowed: the addition under Section 69A is reduced to Rs. 3,70,000 (Rs. 8,30,000 accepted as explained by documented cash withdrawals); penalty under Section 271AAC and interest under Sections 234A, 234B and 234C shall be recomputed accordingly.

Protective addition - non-survival of protective addition when substantive addition is deleted - proof of identity, genuineness and creditworthiness in relation to unexplained cash/receipt (section 68 jurisprudence) - reassessment under section 147/148

Protective addition - non-survival of protective addition when substantive addition is deleted - Deletion of protective addition of Rs. 2,44,68,000/- made in assessment year 2012-13 - HELD THAT: - The Tribunal held that the Assessing Officer made the impugned addition on a protective basis, indicating that he was of the view that a substantive addition should be made in the hands of other persons. The record showed that no substantive addition in respect of the same receipts survived; additions made in subsequent years in the hands of the alleged recipients (Rajyog Buildtech Pvt. Ltd.) were themselves deleted by appellate fora. Applying the settled legal principle that a protective addition cannot survive if the corresponding substantive addition does not survive, the Tribunal affirmed the CIT(A)'s deletion of the protective addition. Reliance on precedents of the jurisdictional High Court and the proposition that protective assessments require existence of a subsisting substantive assessment was noted and followed. [Paras 7]

Protective addition deleted; CIT(A)'s order deleting the protective addition is affirmed.

Proof of identity, genuineness and creditworthiness in relation to unexplained cash/receipt (section 68 jurisprudence) - reassessment under section 147/148 - Confirmation of substantive addition of Rs. 1,21,323/- in respect of loss on sale of shares - HELD THAT: - The Tribunal recorded that, apart from the protective addition, the Assessing Officer made a separate substantive addition in respect of loss on sale of shares. The CIT(A) had confirmed that substantive addition of Rs. 1,21,323/-, and the Tribunal did not disturb that finding. The Tribunal's affirmance proceeded on the basis that the CIT(A) had rightly dealt with the specific substantive addition while deleting the protective addition which lacked surviving substantive counterparts. [Paras 3, 8]

Substantive addition of Rs. 1,21,323/- confirmed.

Final Conclusion: The appeal by the Revenue is dismissed: the Tribunal affirms the deletion of the protective addition for AY 2012-13 while upholding the confirmed substantive addition of Rs. 1,21,323/-, thereby dismissing the Revenue's grounds of appeal.

Allocation of research and development expenditure between eligible and non eligible units - Nexus between R&D expenditure and products manufactured in eligible units - Deduction under section 80 IE - Apportionment based on percentage of sales - Application of precedents in the assessee's own case

Allocation of research and development expenditure between eligible and non eligible units - Nexus between R&D expenditure and products manufactured in eligible units - Deduction under section 80 IE - Apportionment based on percentage of sales - Application of precedents in the assessee's own case - Whether the Assessing Officer could allocate R&D expenditure to the units claiming deduction under section 80-IE by apportioning expenditure on the basis of percentage of sales, notwithstanding the assessee's contention that R&D activities related to future products and were unconnected with products manufactured in the eligible unit. - HELD THAT: - The Tribunal examined the factual material and prior decisions in the assessee's own case. The assessee's R&D centres are standalone, separately accounted units engaged in long term development of formulations which ordinarily undergo several years of testing before manufacture. The assessee placed on record an affidavit and contemporaneous lists distinguishing products under development at the R&D centres from products manufactured by the Sikkim unit (the 80 IE eligible unit). The Assessing Officer's blanket apportionment on the basis of proportion of sales was found to be a general assumption unsupported by specific evidence linking the year's R&D expenditure to products actually manufactured in the eligible unit during the year. The Tribunal also relied on coordinate bench precedents in the assessee's own case where similar apportionments were discarded after verification of product lists and the long gestation of pharmaceutical R&D. Applying these considerations, the Tribunal held that while R&D may have a remote or eventual linkage with manufacturing, that does not justify allocating the year's R&D expenditure to compute the 80 IE deduction absent specific nexus or proof that the particular R&D output was manufactured in the eligible unit in the relevant year. Accordingly, the deletion of the allocation made by the CIT(A) was upheld. [Paras 9, 10, 11]

The deletion of the Assessing Officer's allocation of R&D expenditure to the 80 IE eligible unit is upheld and the disallowance is deleted; the Revenue's appeal is dismissed on this issue.

Final Conclusion: The Tribunal dismissed the Revenue's appeals for AY 2018 19 and AY 2021 22, upholding the CIT(A)'s deletion of the allocation of R&D expenditure to units claiming deduction under section 80 IE on the ground that the AO's sales based apportionment lacked specific evidence of nexus.

Addition under section 69 for unexplained investment - survey admission under section 133A is rebuttable - cash flow statements and loan sanction letters as evidentiary material - joint ownership and proportionate allocation of investment

Addition under section 69 for unexplained investment - survey admission under section 133A is rebuttable - cash flow statements and loan sanction letters as evidentiary material - joint ownership and proportionate allocation of investment - Whether the addition of Rs. 67 Lacs as unexplained investment in the assessee's hands is justified. - HELD THAT: - The assessee undertook construction on land jointly owned by him, his wife and two sons and offered rental income proportionately in their respective hands. During survey the assessee made statements admitting certain investments, but those survey statements are rebuttable and do not bind the assessee. The assessee furnished cash flow statements and bank sanction letters showing loans and contributions by the four co-owners which materially support the claim that the investment was not solely from the assessee. There is no independent material to establish that the entire alleged investment belonged exclusively to the assessee. In view of joint ownership and the documentary material produced, the Tribunal found the AO's estimate of the entire amount attributable to the assessee unsustainable and, to conclude the litigation, restricted the impugned addition to Rs. 10 Lacs while deleting the balance. [Paras 5, 6]

Impugned addition partly deleted; restricted to Rs. 10 Lacs and the balance of the addition deleted.

Final Conclusion: Appeal partly allowed: addition of Rs. 67 Lacs under section 69 reduced to Rs. 10 Lacs in view of joint ownership and supporting cash flow and loan documents; survey admissions held rebuttable.

Presumptive taxation under section 44AD - addition under section 69A - reassessment under section 147/148 - onus on Assessing Officer to establish non business nature of deposits - acceptance of presumptive income in absence of contrary evidence

Presumptive taxation under section 44AD - addition under section 69A - onus on Assessing Officer to establish non business nature of deposits - acceptance of presumptive income in absence of contrary evidence - Whether the cash deposits found in the assessee's bank accounts qualify as business receipts attractable to presumptive taxation under section 44AD and whether the addition made under section 69A was justified. - HELD THAT: - The Tribunal found on the material placed before it that the assessee was a tiles laying contractor prior to his government appointment and that he filed a return declaring business income and adopting a 10% presumptive profit under section 44AD. The Assessing Officer, on remand, could produce labour bills only for part of the receipts and did not place any evidence on record to show that the remaining bank deposits did not arise from the assessee's business activity. In these circumstances the Tribunal applied the principle that where an eligible business falls within the ambit of section 44AD and the Revenue fails to produce evidence contradicting the assessee's claim, the presumptive basis adopted by the assessee must be accepted. Consequently the addition confirmed under section 69A was held unjustified to the extent it was contrary to the presumptive computation accepted by the assessee, and the Commissioner (Appeals) order confirming that addition was set aside. [Paras 8, 9]

The assessee's adoption of 10% presumptive profit under section 44AD is accepted and the addition under section 69A confirmed by the CIT(A) is set aside; appeal allowed.

Final Conclusion: The Tribunal allowed the appeal, holding that the cash deposits are business receipts of an eligible business and that, in the absence of contrary evidence from the Assessing Officer, the assessee's presumptive income computed at 10% under section 44AD is to be accepted and the addition under section 69A is not sustainable.

Levy of fee under section 234E for late filing of TDS returns - Section 234E as a substantive provision - Section 234E(3) self-assessment/payment mechanism - Section 200A(1)(c) as a recovery mechanism - Effective date of section 234E from 01-07-2012

Levy of fee under section 234E for late filing of TDS returns - Section 234E as a substantive provision - Section 200A(1)(c) as a recovery mechanism - Section 234E(3) self-assessment/payment mechanism - Effective date of section 234E from 01-07-2012 - Validity of levy of fees under section 234E for AYs 2013-14 and 2014-15 despite absence of section 200A(1)(c) during those years - HELD THAT: - The Tribunal considered conflicting High Court decisions and followed the subsequent, elaborate decision in Conceria International (P.) Ltd., which held that section 234E itself creates the substantive liability to pay a fee when a person fails to deliver the statement within the time prescribed; section 234E(3) provides for self-assessment/payment at the time of delivery of the statement; and section 234E(4) makes the provision effective from 01-07-2012. Consequently, the levy under section 234E does not await the introduction of section 200A(1)(c), which the Court characterised as prescribing only a recovery mechanism. The Tribunal found the contrary decision relied on by the assessee to be distinguishable and not to have dealt with the line of authorities considered in Conceria. Applying this reasoning, the Tribunal concluded that the levy of fees under section 234E for AYs 2013-14 and 2014-15 was sustainable.

Levy of fees under section 234E for AYs 2013-14 and 2014-15 upheld.

Final Conclusion: Appeals dismissed; levy of fees under section 234E for the stated assessment years sustained following the view that section 234E is substantive, operative from 01-07-2012, and independent of section 200A(1)(c).

Binding effect of tribunal findings across distinct statutory regimes - scope of undisclosed foreign income and asset under the BMA - non-obstante and statute-specific scope of income - declaration of undisclosed foreign asset under Section 59 of the BMA - doctrine of approbate and reprobate

Binding effect of tribunal findings across distinct statutory regimes - scope of undisclosed foreign income and asset under the BMA - non-obstante and statute-specific scope of income - Findings recorded by the ITAT in Income Tax proceedings are binding on the Tribunal in BMA proceedings - HELD THAT: - The Tribunal held that findings in Income Tax proceedings may have persuasive or guiding force but are not binding in proceedings under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BMA). The BMA has a distinct object and a different statutory scope-it targets undisclosed foreign income and assets and contains its own definitions and machinery. Section 4(3) of the BMA expressly provides that income included under the BMA shall not form part of total income under the Income-tax Act, and there is no reciprocal provision in the Income-tax Act making Income-tax additions binding under the BMA. Neither Act contains a non-obstante clause making one code prevail over the other; both begin with "subject to the provisions of this Act," indicating statute-specific application. Moreover, the legal tests and statutory ingredients differ: additions under the Income-tax Act relied upon deeming and evidentiary provisions (e.g., sections dealing with unexplained credits or investments) whereas the BMA defines "undisclosed asset located outside India" and "undisclosed foreign income and asset" with different consequences and standards. By reason of these material differences in scope, definitions and remedial scheme, the Coordinated Bench's decision in Income-tax proceedings cannot be treated as binding precedent that forecloses fresh adjudication under the BMA; the Accountant Member erred in applying the Income-tax decision as binding in BMA proceedings. The Judicial Member's view therefore prevails on this question. [Paras 14, 15, 16, 20, 23]

No - ITAT findings in Income Tax proceedings are not binding on the Tribunal in BMA proceedings; they may be persuasive but BMA requires independent adjudication.

Declaration of undisclosed foreign asset under Section 59 of the BMA - scope of undisclosed foreign income and asset under the BMA - Obligation to disclose assets/income held overseas for Assessment Years 2008-09 to 2012-13 in Income-tax Return Forms where no specific ITR column existed - HELD THAT: - The Tribunal held that the mechanism for disclosure of undisclosed foreign assets is provided by Section 59 of the BMA, which permits declaration of undisclosed assets acquired from income chargeable to tax under the Income-tax Act for assessment years prior to 1 April 2016, on or after the commencement of the BMA and within the period notified by the Central Government. The declaration is to be made under the BMA post-commencement and need not (and could not) have been made in earlier Income-tax return forms merely because those ITRs lacked a specific column. Therefore, where undisclosed foreign assets exist for the relevant assessment years, the scheme of the BMA required declaration under Section 59 in the window provided by the statute rather than via a pre-existing ITR column. [Paras 17, 21, 22, 23]

Yes - the assessee was obliged to make disclosure under the declaration mechanism of Section 59 of the BMA (post-commencement), and absence of a specific column in earlier ITRs did not negate that obligation.

Final Conclusion: The Third Member answered the referred questions: (i) the ITAT's findings in Income-tax proceedings are not binding on adjudication under the BMA and only carry persuasive value; and (ii) disclosure of undisclosed foreign assets for AYs 2008-09 to 2012-13 was to be made through the declaration window provided by Section 59 of the BMA, so the absence of a specific ITR column for those years did not absolve the duty to declare under the BMA.

Identical question of law pending before High Court - declaration under Section 158A(1) - application of ratio of higher court decision - dismissal of appeal pending determination of identical question

Identical question of law pending before High Court - declaration under Section 158A(1) - Appeals dismissed where assessee filed Form 8 under Section 158A(1) alleging an identical substantial question of law was admitted by the High Court. - HELD THAT: - The Tribunal recorded that the assessee filed Form No.8 invoking Section 158A(1) stating that an identical substantial question of law had been admitted by the Hon'ble Gujarat High Court in Tax Appeal No.193 of 2024. The Assessing Officer was directed to verify the claim and reported that the substantial question of law admitted by the High Court was identical to the grounds raised before the Tribunal for AYs 2018-19 and 2019-20. On this basis the Tribunal concluded that the provisions of Section 158A(1) were squarely applicable and, accordingly, dismissed the appeals while recording the statements and the AO's verification report. [Paras 3, 4, 5]

Appeals dismissed in view of the declared identical question of law pending before the High Court and the AO's verification that Section 158A(1) applies.

Application of ratio of higher court decision - dismissal of appeal pending determination of identical question - Matter remitted for application of the High Court's eventual ratio to the assessment years in question. - HELD THAT: - The Tribunal granted liberty to the Assessing Officer to apply the ratio of the judgment to be rendered by the Hon'ble Gujarat High Court in Tax Appeal No.193 of 2024 to the present assessment years 2018-19 and 2019-20 under the scheme of Section 158A(1). The Tribunal therefore did not decide the substantive controversy on merits but directed that the outcome of the High Court's decision be applied by the AO in the pending assessments. [Paras 4]

Liberty given to the Assessing Officer to apply the High Court's ratio to the respective assessment years as per Section 158A(1).

Final Conclusion: The Tribunal dismissed the appeals after recording that an identical substantial question of law is pending before the Gujarat High Court and, while not deciding the substantive issue, permitted the Assessing Officer to apply the High Court's eventual ratio to AYs 2018-19 and 2019-20 under Section 158A(1).

Condonation of delay - Intimation under Section 143(1) - Scrutiny assessment and notice under Section 143(2) - Assessment under Section 143(3) - Substantial justice over technical considerations - Processing error leading to double taxation of capital gains

Condonation of delay - Substantial justice over technical considerations - Effect of COVID 19 limitation relief - Delay in filing appeal before the CIT(A) against intimation under Section 143(1) was to be condoned. - HELD THAT: - The Tribunal accepted that the appellant filed the appeal before the CIT(A) after a delay exceeding two years but found the delay excusable in the circumstances. The intimation under Section 143(1) was issued during pendency of scrutiny proceedings (notice under Section 143(2)), creating a bona fide expectation that the matter would be considered in the assessment. Part of the delay coincided with the COVID 19 specified period for which the Supreme Court provided additional time; excluding that period reduced the delay. Applying the principle that substantial justice should prevail over pedantic technicality, and noting that the appellant did not stand to gain by filing late, the Tribunal held that the CIT(A) ought to have condoned the delay. [Paras 7, 8]

Delay in instituting the appeal before the CIT(A) is condoned and the CIT(A)'s refusal to condone delay is set aside.

Intimation under Section 143(1) - Processing error leading to double taxation of capital gains - Assessment under Section 143(3) - Addition of INR 70,34,565 made in the intimation under Section 143(1) on account of incorrect reduction of business income was unsustainable and deleted. - HELD THAT: - On examination of the return and processing, the Tribunal found that profits from sale of investments aggregating to the capital gains figure had been credited to the profit & loss account and correctly reflected in the return: part exempt under Section 10(38) and part offered as short term capital gains. While processing, instead of reducing the aggregate capital gains amount from business income, the processing reduced only the sale consideration relating to short term capital gains, producing an erroneous increase in business income of INR 70,34,565 and converting a declared loss into a profit. These facts were apparent on the return and demonstrated a processing error resulting in double taxation of the same income. Considering the substance and that deciding on merits would not be a mere formality, the Tribunal deleted the addition. [Paras 7, 8]

The addition of INR 70,34,565 made by the intimation under Section 143(1) is deleted.

Final Conclusion: The appeal is allowed: the delay in filing the appeal before the CIT(A) is condoned and the addition made in the intimation under Section 143(1) is deleted; the CIT(A) order dated 21/02/2024 is set aside.

Condonation of delay - principles of natural justice - tax deduction at source (TDS) - classification of payments as salary v. professional/technical fees - disallowance under 40(a)(ia) for non-deduction of tax at source - applicability of section 192 v. section 194J

Condonation of delay - interest of justice - Whether the delay in filing the appeal should be condoned and the appeal admitted for adjudication. - HELD THAT: - The assessee's application for condonation of 46 days' delay was considered on the factual explanation that the assessee was not aware of electronic notices and only came to know of the dismissal when asked to deposit remaining tax. The Tribunal observed that the delay did not result in any gain to the assessee and, in the interest of justice, condoned the delay and admitted the appeal for adjudication. [Paras 2]

Delay of 46 days condoned and appeal admitted.

Tax deduction at source (TDS) - classification of payments as salary v. professional/technical fees - applicability of section 192 v. section 194J - disallowance under 40(a)(ia) for non-deduction of tax at source - principles of classification of remuneration - Whether the sum of Rs.1,44,000 debited as 'accountancy charges' was properly disallowed under 40(a)(ia) for non-deduction of TDS under section 194J, or whether it was salary liable under section 192 and not subject to that disallowance. - HELD THAT: - The Tribunal examined material on record and noted that the payments were monthly remuneration to the assessee's accountant at a fixed monthly rate, constituting salary for services rendered under an employment-like arrangement. The Assessing Officer's treatment of the payments as professional/technical fees liable to deduction under section 194J was not found to be tenable. Because the payments were salary and in any event the aggregate did not create liability to deduct tax under section 192, the statutory disallowance under 40(a)(ia) for non-deduction under section 194J was unwarranted. On this basis the Tribunal set aside the concurrent finding of the CIT(A) and deleted the disallowance. [Paras 7]

The impugned disallowance under 40(a)(ia) is deleted; the sum is held to be salary and not liable to disallowance for non-deduction under section 194J.

Final Conclusion: Appeal allowed: delay condoned and substantive ground allowed by deleting the disallowance under 40(a)(ia) as the payment was held to be salary (not professional/technical fees) and therefore not exigible to TDS under section 194J.

Determination of Fe content on WMT basis - conversion of dry metric tonne basis to wet metric tonne basis - export duty applicability based on Fe percentage - remand for application of formula in V. M. Salgaocar

Determination of Fe content on WMT basis - conversion of dry metric tonne basis to wet metric tonne basis - remand for application of formula in V. M. Salgaocar - Remand to the Adjudicating Authority to compute moisture and convert the reported DMT Fe content to WMT Fe content using the recognised formula and to finalize assessment accordingly. - HELD THAT: - The Tribunal found that the Shipping Bills were provisionally assessed on the basis of a test report expressed on dry metric tonne (DMT) basis, resulting in an Fe content taken as above the 62% threshold and consequent demand of export duty. The appellants urged that the Fe content for final assessment must be determined on wet metric tonne (WMT) basis and that WMT values can be derived by applying the established conversion formula (as applied in V. M. Salgaocar and followed by this Bench in Final Order No. 76372/2024). Observing that the issue in these appeals is identical to that considered in Final Order No. 76372/2024, the Tribunal remanded the matters to the Adjudicating Authority with directions to apply the formula to arrive at the moisture content and the corresponding Fe content on WMT and to finalize the assessment in accordance with that computation. [Paras 4, 5]

Matters remanded to the Adjudicating Authority to apply the prescribed formula to compute moisture and convert DMT Fe to WMT Fe, and to finalize the assessment.

Final Conclusion: Appeals disposed by remanding the matters to the Adjudicating Authority for recomputation of moisture and Fe content on WMT basis using the established formula and for finalization of the export duty assessment.

Contempt of court - statutory entitlement to interest on delayed refund - principles of natural justice - remand to adjudicating officer - alternative remedy by way of appeal under Section 128(1) of the Customs Act, 1962 - requirement of wilful or deliberate disobedience for contempt

Contempt of court - requirement of wilful or deliberate disobedience for contempt - Whether the Court should exercise its contempt jurisdiction against the Respondent for allegedly ignoring observations made in the earlier order dated 19 March 2024. - HELD THAT: - The Court considered the contention that observations in its order dated 19 March 2024-to the effect that Section 27A of the Customs Act, 1962 would provide for payment of interest on delayed refund amounts-were ignored by the adjudicating officer when disposing of the matter on remand by order dated 15 May 2024. The Court held that contempt jurisdiction is not attracted merely because an order of the Court is alleged to have been incorrectly applied or a wrong order has been passed on remand. There must be disobedience that is wilful or deliberate to justify contempt proceedings, and a mere incorrect decision does not ordinarily import such wilfulness. Having considered the material, the Court found that this was not a case calling for exercise of contempt jurisdiction and refused to initiate contempt action. [Paras 5, 6]

Contempt Petition not entertained; contempt jurisdiction declined.

Principles of natural justice - remand to adjudicating officer - Whether the adjudicating officer complied with the Court's direction to decide the interest claim after due compliance with principles of natural justice. - HELD THAT: - The Court's earlier order of 19 March 2024 directed the adjudicating officer to decide the interest claim after complying with principles of natural justice. The adjudicating officer passed the impugned order dated 15 May 2024 after proceedings in which principles of natural justice were observed. The Court recorded that the correctness of that order can be examined in appropriate proceedings, but the fact that an order was made after affording natural justice negates a basis for contempt on the ground of non-compliance with the earlier direction. [Paras 6]

Adjudicating officer found to have decided the matter after complying with principles of natural justice; non-compliance not established for contempt.

Alternative remedy by way of appeal under Section 128(1) of the Customs Act, 1962 - substantive relief not ordinarily sought in contempt proceedings - Whether the Petitioner can seek substantive relief against the adjudicating officer's order in contempt proceedings, and what alternative remedies are available. - HELD THAT: - The Court emphasised that seeking substantive relief against an adjudicatory order is ordinarily not within the scope of contempt proceedings. The impugned order expressly provides that it is appealable under Section 128(1) of the Customs Act, 1962, and the Petitioner remains free to pursue appropriate proceedings or remedies before the competent forum. The Court thereby declined to entertain substantive challenges in the contempt petitions while preserving the Petitioner's right to prosecute alternate remedies. [Paras 7, 8, 9]

Contempt petitions not the proper forum for substantive relief; Petitioner free to pursue appeal or other appropriate proceedings.

Final Conclusion: Contempt petitions dismissed as not maintainable: the adjudicating officer acted after affording natural justice and, absent wilful disobedience, contempt jurisdiction is inappropriate; petitioner permitted to challenge the impugned order by invoking available remedies, including appeal under Section 128(1) of the Customs Act, 1962. No order as to costs.

Classification under Customs Tariff Item - General Rules for Interpretation - residuary category - benefit of exemption Notification No. 50/2017-CUS - confiscation under section 111(m) - penalty under section 112 - penalty under section 114AA - differential duty under section 28(1) - finalisation of assessment under section 17(4)

Classification under Customs Tariff Item - General Rules for Interpretation - residuary category - finalisation of assessment under section 17(4) - Appropriate Customs Tariff classification of the imported parts of shock absorbers - HELD THAT: - The Tribunal applied the General Rules for Interpretation and observed that the imported goods are undisputedly parts of motorcycles and therefore fall within the 4-digit heading 8714. That heading contains three six-digit sub-headings: 8714 10 (of motorcycles), 8714 20 (of carriages for disabled persons) and a residual "other" category. Goods which fall under the first two six-digit sub-headings cannot simultaneously fall under the residual category. Since the imported items are parts of motorcycles and not saddles, they properly classify under the six-digit 8714 10 and, within that, under the 8-digit CTI 8714 10 90 (other). The Tribunal rejected the Commissioner (Appeals)'s contrary approach that the parts must assume the essential character of a shock absorber before being treated as parts of motorcycles, and distinguished the relied-upon authorities as inapposite. The Tribunal therefore upheld the impugned order's classification under 8714 10 90 and sustained finalisation of assessment for the current Bill of Entry accordingly. [Paras 14, 15]

Classification of the imported parts upheld under CTI 8714 10 90 and assessment under section 17(4) sustained.

Benefit of exemption Notification No. 50/2017-CUS - Entitlement to exemption under Notification No. 50/2017-CUS (Sl. No. 532) if classified under 8714 10 90 - HELD THAT: - The Tribunal examined the notification entry which grants exemption only to goods falling under the specific CTIs listed in Column 2 (for example 8714 9100, 8714 92, 8714 93, etc.) other than bicycle parts and components. CTI 8714 10 90 is not among the CTIs enumerated in Column 2. Consequently the notification does not extend to goods falling under 8714 10 90, and the appellant's contention that it would nonetheless be entitled to the exemption was rejected. [Paras 17, 18]

No entitlement to the exemption under Notification No. 50/2017-CUS for goods classified under 8714 10 90.

Confiscation under section 111(m) - Whether the goods can be confiscated under section 111(m) for claiming a wrong classification - HELD THAT: - Section 111(m) subjects to confiscation goods which do not correspond with the entry made under the Act in respect of value or other particulars; it presupposes mismatch with declarations. The Tribunal held that a difference of opinion between the importer's self-assessed classification and the officer's classification does not render the goods liable to confiscation under section 111(m). Nothing in that provision contemplates confiscation simply because the importer claimed a different tariff classification. Accordingly, the confiscation order and the consequent redemption fine were set aside. [Paras 19, 20]

Confiscation under section 111(m) and the redemption fine set aside.

Penalty under section 112 - Sustainability of penalty under section 112 imposed on the appellant - HELD THAT: - Section 112 imposes penalty where goods are rendered liable for confiscation under section 111. Having held that the goods are not liable to confiscation under section 111(m), the Tribunal concluded that the foundational premise for imposing penalty under section 112 is absent. Therefore the penalty imposed on the appellant under section 112 was set aside. [Paras 21, 22]

Penalty under section 112 on the appellant set aside.

Penalty under section 114AA - Sustainability of penalty under section 114AA imposed on Shri Manoj Negi - HELD THAT: - Section 114AA penalises knowingly or intentionally making or using declarations or documents false or incorrect in any material particular. The Tribunal found no record that Shri Negi made any false or incorrect declaration in the Bill of Entry; the only act was self-assessment under a different tariff classification. Absent evidence of knowingly using false material particulars, the penalty under section 114AA could not be sustained and was therefore set aside. [Paras 23]

Penalty under section 114AA on Shri Manoj Negi set aside.

Differential duty under section 28(1) - finalisation of assessment under section 17(4) - Validity of demand of differential duty for the current and past Bills of Entry - HELD THAT: - The Tribunal upheld the re-classification of the current consignment under 8714 10 90 and sustained the demand of duty for the current Bill of Entry finalised under section 17(4). The Tribunal noted that the demand in respect of past Bills of Entry was made under section 28(1) within the normal period of limitation and that no extended period was invoked. Accordingly, the demand for differential duty and interest as determined stands confirmed to the extent they pertain to classification upheld by the Tribunal. [Paras 16, 24]

Demand of differential duty and interest confirmed for the consignment classified under 8714 10 90; past-BE demands under section 28(1) maintained within normal limitation.

Final Conclusion: The appeals were partly allowed: classification of the imported parts was upheld under CTI 8714 10 90 and the consequential demand of differential duty and interest confirmed; entitlement to the exemption under Notification No. 50/2017-CUS was denied; orders of confiscation, redemption fine and penalty under section 112 on the importer were set aside; and the penalty under section 114AA on Shri Manoj Negi was set aside.

Maintainability of appeal by licensing authority against its own order - appeal under Customs Brokers/Haus Agents Licensing Regulations as exclusive appellate remedy to the aggrieved licensee - harmonious construction of Section 129A and Section 146 of the Customs Act - regulatory scheme as a self-contained code governing disciplinary control and remedies - absence of inherent right of appeal and limits of subordinate legislation

Maintainability of appeal by licensing authority against its own order - appeal under Customs Brokers/Haus Agents Licensing Regulations as exclusive appellate remedy to the aggrieved licensee - harmonious construction of Section 129A and Section 146 of the Customs Act - Appeal filed by the Committee of Chief Commissioners/licensing authority against an order of the licensing authority exonerating a customs broker is not maintainable. - HELD THAT: - The Tribunal held that the Regulations governing licensing and disciplinary control of customs brokers constitute a self-contained code which contemplates the appellate remedy, if any, to be provided therein and, by design, permits appeal only to an aggrieved licensee. Section 146(2)(f) expressly contemplates that the Regulations may govern remedies against disciplinary orders, and therefore Section 129A (general appellate provision) must be harmoniously construed with Section 146. Where the subordinate legislation (the Regulations) deliberately excludes an appellate remedy for the licensing authority against its own order (or provides appellate recourse only to the licensee), the general provision cannot be invoked to permit an appeal by the licensing authority. The Tribunal relied on binding authority of the jurisdictional High Court and earlier Tribunal decisions applying the same principle and concluded that permitting an authority to appeal against its own decision would be contrary to the regulatory scheme and legislative intent. Consequently, an appeal instituted by the licensing authority or Committee of Chief Commissioners without statutory authority is without maintainability.

Appeal dismissed for want of authority; appeals by the licensing authority/Committee of Chief Commissioners against its own order under the Regulations are not maintainable.

Final Conclusion: The appeal by the Commissioner of Customs, Pune (at the instance of the Committee of Chief Commissioners) against the licensing authority's order exonerating the customs broker is dismissed as not maintainable because the Regulations provide the exclusive appellate mechanism in disciplinary matters and do not permit the licensing authority to appeal against its own order.

Fraud vitiates everything - validity of DEPB at time of import - DEPB scrip transferable and negotiable - extended period of limitation under proviso to Section 28 of the Customs Act - purchaser steps into the shoes of the seller - penalty under Section 114A of the Customs Act - bona fide purchaser

Fraud vitiates everything - validity of DEPB at time of import - extended period of limitation under proviso to Section 28 of the Customs Act - purchaser steps into the shoes of the seller - Whether duty and interest could be demanded from the appellant for imports cleared by debiting DEPB scrips that were later found to have been fraudulently obtained by the original licence holder - HELD THAT: - The Tribunal held that where DEPB scrips are shown to have been obtained by fraud by the original holder, the transferee who utilised those scrips for availing customs benefit cannot retain that benefit. The principle that fraud vitiates everything applies: a DEPB obtained by mis-declaration or fraud is void for the purpose of granting duty exemption, and the extended period under the proviso to Section 28 may be invoked to recover duty even from transferees. The decision observed that the scrips in question were subsequently declared fraudulent by the licensing authority, and therefore the benefit availed on the basis of those scrips is liable to be set aside and duty with interest confirmed against the appellant, notwithstanding that the scrips were transferable and were registered at the port at the time of importation. The Tribunal relied on consistent authority and reasoning that a purchaser does not acquire a better title than the seller and that the State cannot be deprived of revenue where exemption was claimed by fraudulent acts of the exporter. [Paras 6]

Demand of customs duty with interest confirmed against the appellant for the imports effected by utilising the fraudulently obtained DEPB scrips.

Penalty under Section 114A of the Customs Act - bona fide purchaser - DEPB scrip transferable and negotiable - Whether penalty under Section 114A was imposable on the appellant who purchased and used the DEPB scrips in good faith - HELD THAT: - Although duty and interest were held recoverable because the underlying scrips were obtained by fraud, the Tribunal found that the appellants were bona fide purchasers who had taken precautions and had no knowledge of the exporter's mis-declaration. Applying the distinction between liability for recovery of duty (which follows from the voidness of a fraudulently obtained instrument) and the imposition of punitive measures, the Tribunal concluded that penalty under Section 114A should not be imposed on transferee purchasers lacking knowledge of the fraud. Consequently, while the revenue demand stands, the punitive sanction was set aside as not justified against the bona fide transferee. [Paras 7]

Penalty under Section 114A set aside insofar as it was imposed on the appellant.

Final Conclusion: Partly allowed: the appeals are dismissed insofar as they seek to set aside the demand of customs duty with interest (demand confirmed), but allowed insofar as the penalty under Section 114A imposed on the bona fide transferee is set aside.

Authorization requirement for Customs Broker - Duty to advise client and notify authorities on non-compliance - Due diligence in information provided by Customs Broker - Obligation to disclose statutory orders, instructions and public notices to clients - Maintenance of proper records by Customs Broker - Liability for filing under another broker's credentials and attribution of acts of directors/employees - Proportionality of disciplinary sanctions including revocation of licence, forfeiture of security and penalty

Authorization requirement for Customs Broker - Appellant violated the obligation to obtain and produce authorization before acting as Customs Broker for the importer. - HELD THAT: - Regulation 10(a) requires a Customs Broker to obtain authorization from the employing party and produce it when required. The record and the appellant's own admission establish that the appellant filed the bill of entry without obtaining any authorization in its own name and instead filed using another broker's credentials. Given this admitted fact, the Tribunal upheld the finding that the appellant breached the authorization requirement. [Paras 21]

Violation of the authorization requirement is sustained.

Duty to advise client and notify authorities on non-compliance - Appellant failed to advise the importer about prohibition and did not inform the Deputy/Assistant Commissioner as required, thereby violating the duty to advise and notify. - HELD THAT: - Regulation 10(d) obliges the Customs Broker to advise clients to comply with customs and allied laws and to notify authorities on non-compliance. The imported goods were prohibited; instead of advising the importer or informing the relevant customs officer, the appellant proceeded to file the bill of entry (using another's credentials) in an attempt to clear the goods. The Tribunal found this conduct contrary to Regulation 10(d). [Paras 22]

Violation of the duty to advise and notify is sustained.

Due diligence in information provided by Customs Broker - Appellant failed to exercise due diligence to ensure correctness of information imparted to the client and thus violated the due diligence obligation. - HELD THAT: - Regulation 10(e) mandates that a Customs Broker exercise due diligence regarding correctness of information given to clients. The appellant did not disclose its own identity as broker and did not impart correct information about the import restrictions; consequently, the Tribunal upheld the finding of breach of the due diligence obligation. [Paras 23]

Violation of the due diligence obligation is sustained.

Obligation to disclose statutory orders, instructions and public notices to clients - Appellant did not inform the importer of applicable prohibitions and thus breached the obligation not to withhold information contained in orders or public notices. - HELD THAT: - Regulation 10(f) requires that a Customs Broker not withhold information contained in orders, instructions or public notices relating to clearance. There is no record that the appellant informed the importer of Plant Quarantine prohibitions; the Tribunal therefore sustained the allegation of breach of Regulation 10(f). [Paras 24]

Violation of the obligation to disclose statutory orders and notices is sustained.

Maintenance of proper records by Customs Broker - Appellant failed to maintain timely and orderly records and did not produce original documents when required, amounting to breach of record-keeping obligations. - HELD THAT: - Regulation 10(k) requires retention and orderly maintenance of bills of entry, shipping bills, correspondence and accounts. The importer stated documents were sent to the appellant's email and originals collected by the appellant's director were not produced when asked. The Tribunal found this conduct to constitute a violation of the record-keeping requirement under Regulation 10(k). [Paras 25]

Violation of the record-keeping obligation is sustained.

Liability for filing under another broker's credentials and attribution of acts of directors/employees - Appellant's use of another broker's credentials to file the bill of entry and the actions of its directors/employees render the appellant liable as the acting Customs Broker. - HELD THAT: - The Tribunal noted the admitted fact that the appellant's director filed the bill of entry using the credentials of M/s Prakhar Gupta and that all documents and communications were handled by the appellant's personnel. Filing through another broker's online credentials necessarily required lending of credentials; the appellant cannot evade responsibility by relying on the broker on record. Further, a Customs Broker is responsible for acts of its directors and employees. On these bases the Tribunal held that the appellant in fact acted as the Customs Broker and is liable for the violations. [Paras 11, 17, 18, 20]

Acts done by filing under another's credentials and by directors/employees are attributed to the appellant, establishing its liability.

Proportionality of disciplinary sanctions including revocation of licence, forfeiture of security and penalty - Revocation of licence, forfeiture of security deposit and imposition of penalty were held to be proportionate in the facts of this case. - HELD THAT: - The Tribunal examined proportionality and found the misconduct was not a minor or innocent lapse but an intentional scheme to facilitate import of prohibited goods by using another broker's identity. Given the admitted deliberate conduct, concealment and facilitation of prohibited import, the regulations provide for severe disciplinary measures. The Tribunal found no reason for leniency and declined to interfere with revocation, forfeiture and penalty imposed by the Commissioner. [Paras 26, 27]

The disciplinary sanctions are proportionate and the impugned penalties are upheld.

Final Conclusion: Impugned order upheld; appeal dismissed - findings of violations of regulatory duties, attribution of liability for filing under another broker's credentials, and the proportionality of revocation, forfeiture and penalty sustained.

Right of Revenue to appeal under Customs Brokers' Licensing Regulations is not maintainable - Customs Brokers' Licensing Regulations as a complete code - Appeal under section 129A/129D of the Customs Act against orders under Regulations 21/23 available only to a Custom Broker

Right of Revenue to appeal under Customs Brokers' Licensing Regulations is not maintainable - Customs Brokers' Licensing Regulations as a complete code - Maintainability of Revenue's appeal against an order of the Commissioner under the Customs Brokers' Licensing Regulations - HELD THAT: - The Tribunal, following the decision of the Delhi High Court in Commissioner of Customs (Airport & General) v. Transworld Cargo & Travels, held that the right to prefer an appeal against orders passed by the Commissioner under the Customs Brokers' Licensing Regulations (CBLR) is not available to the Revenue. The Court accepted the view that the CBLR constitutes a complete code governing adjudication and appeals in respect of customs brokers, and that the expression "any person aggrieved" insofar as an order under the CBLR is concerned does not encompass the Revenue. The departmental contention was noted, including that an appeal from the Delhi High Court decision has been filed in the Supreme Court without any stay, but the Tribunal declined to disregard the binding effect of the High Court's decision and, therefore, dismissed the Revenue's appeal as not maintainable. [Paras 4]

The appeal filed by the Revenue is dismissed as not maintainable; cross-objections disposed of.

Final Conclusion: The Tribunal dismissed the Revenue's appeal against the Commissioner's order under the Customs Brokers' Licensing Regulations as not maintainable, following the Delhi High Court's ruling that the CBLR provides the exclusive appeal remedy and excludes the Revenue from being an "aggrieved person" in that context.

Binding nature of an approved resolution plan - extinguishment of claims arising prior to the Plan Effective Date - protection of successful resolution applicant from surprise claims - scope and operation of Section 31 of the I & B Code (including effect of 2019 amendment) - submission and verification of claims under the CIRP Regulations

Binding nature of an approved resolution plan - extinguishment of claims arising prior to the Plan Effective Date - scope and operation of Section 31 of the I & B Code (including effect of 2019 amendment) - Whether demands made by State authorities in respect of periods prior to 22.06.2018 (Plan Effective Date) survive the approval of the Resolution Plan or stand extinguished. - HELD THAT: - The Court applied the settled principles that an approved resolution plan, once sanctioned by the Adjudicating Authority and finally upheld, is binding on the corporate debtor and all stakeholders so that the successful resolution applicant takes over the business on a 'fresh slate'. Relying on the reasoning in Committee of Creditors of Essar Steel and the decision in Ghanashyam Mishra & Sons, the Court held that claims not part of the approved plan and relating to periods prior to the Plan Effective Date stand extinguished. The 2019 amendment to Section 31 was held to be clarificatory and retrospective, reinforcing that statutory claims owed to Central/State/local authorities which are not included in the approved plan are extinguished as at the date of approval. Applying these principles to the facts, the Court concluded that demands covering the period up to 22.06.2018 cannot be maintained and are automatically extinguished in terms of the Approved Resolution Plan which has attained finality. [Paras 15, 17, 18, 23]

Demands in respect of the period prior to 22.06.2018 are extinguished and unsustainable in law.

Protection of successful resolution applicant from surprise claims - submission and verification of claims under the CIRP Regulations - Whether the State and its officials had preserved their rights by submitting claims during the CIRP and whether any non-submission affects enforceability of later demands. - HELD THAT: - The Court examined the CIRP Regulations (notably Regulations 6, 7, 10, 12 and 13) and the statutory scheme that required public announcement and submission/verification of claims to the resolution professional. It found that the Opposite Parties did not demonstrate that they had advanced or submitted the impugned demands during the CIRP or sought admission of such claims before the RP, NCLT or NCLAT. In that factual matrix, and given the binding effect of the approved Resolution Plan, the Court held that the State authorities could not now revive pre-Plan claims which were not pursued in the CIRP and which are covered by the extinguishment principle. [Paras 11, 12, 14]

Opposite Parties failed to show they pursued the claims in the CIRP; non-submitted pre-Plan claims cannot be enforced now.

Binding nature of an approved resolution plan - extinguishment of claims arising prior to the Plan Effective Date - Whether demands arising from or traced to the Supreme Court's direction in Common Cause could be enforced against the petitioner for periods prior to the Plan Effective Date. - HELD THAT: - The Court distinguished the decision relied upon by the State (Lalit Kumar Jain) on its facts and observed that that authority concerned personal guarantors and different issues of vires and delegation. By contrast, the present case involved statutory claims asserted against the corporate debtor for periods before the Plan Effective Date. Applying the principles from Ghanashyam Mishra & Sons and Essar Steel, the Court held that even demands flowing from Common Cause, insofar as they relate to periods before 22.06.2018, are covered by the extinguishment rule and cannot be enforced against the petitioner. [Paras 20, 21, 22]

Demands springing from Common Cause, to the extent they relate to pre-22.06.2018 periods, are extinguished and not enforceable against the petitioner.

Binding nature of an approved resolution plan - Remedial direction as to claims relating to periods after 22.06.2018. - HELD THAT: - While setting aside the impugned demand letters insofar as they cover pre-Plan periods, the Court directed the Opposite Parties to revise their demands limited to the period from 22.06.2018 onwards and to raise such claims afresh in accordance with law so as to be satisfactorily discharged. The order recognises that liabilities accruing after the Plan Effective Date remain open for lawful enforcement subject to proper claim procedure. [Paras 24]

Opposite Parties directed to reframe demands limited to post-22.06.2018 period and proceed in accordance with law.

Final Conclusion: Writ petitions allowed. Letters of demand impugned in the petitions are set aside to the extent they relate to periods prior to the Plan Effective Date (22.06.2018) because such pre-Plan claims stand extinguished by the approved Resolution Plan; the State may reissue demands only in respect of liabilities from 22.06.2018 onwards after following applicable legal procedure.

Corporate Insolvency Resolution Process (CIRP) - default and date of default - limitation and acknowledgment of debt - restructuring of debt and revocation under sanctioned restructuring plan - power to admit petition under Section 7 of the IBC - effect of part payments on acknowledgment and limitation - exclusion of limitation period under Supreme Court order of March 2020-February 2022 - compliance by Asset Reconstruction Company with RBI Master Circular - interpretation and application of Clause 7 of the restructuring plan - precedential position of Vidharbha Industries and M. Suresh Kumar Reddy on Section 7 discretion

Default and date of default - limitation and acknowledgment of debt - effect of part payments on acknowledgment and limitation - exclusion of limitation period under Supreme Court order of March 2020-February 2022 - Whether the petition under Section 7 was barred by limitation or was timely filed in view of restructuring and subsequent acknowledgment by the corporate debtor. - HELD THAT: - The Tribunal accepted the Adjudicating Authority's finding that existence of debt and default was established by the record and that the Corporate Debtor did not dispute key facts including NPA classification and restructuring. Although the Petition pleaded a date of default of 30.04.2018, the debt was restructured and the Corporate Debtor acknowledged liability by communications dated 27.03.2021 (and modification on 30/31.03.2021). That acknowledgment, made prior to the expiry of the three-year limitation reckoned from 30.04.2018, extended the limitation period and rendered the Petition filed on 15.12.2022 within time. The Tribunal also noted that the Supreme Court order excluding the period 15.03.2020 to 28.02.2022 for limitation purposes further supported the timeliness of the Petition. The Tribunal held that part payments made after cancellation of the restructuring do not negate the earlier acknowledgment that extended limitation. [Paras 18, 19, 21, 28, 29]

The Petition under Section 7 was not barred by limitation; the restructuring and acknowledgment extended limitation and the filing was timely.

Restructuring of debt and revocation under sanctioned restructuring plan - interpretation and application of Clause 7 of the restructuring plan - power to admit petition under Section 7 of the IBC - Whether Respondent No.1 was entitled to revoke the sanctioned restructuring under Clause 7 and reinstate the original liability, thereby grounding the Section 7 petition. - HELD THAT: - The Tribunal upheld the Adjudicating Authority's conclusion that Clause 7 of the Sanctioned Restructuring Plan expressly authorised the Financial Creditor to revoke the restructuring upon default and reinstate the original liability as on the cutoff date with accrued interest. The Corporate Debtor's failure to comply with the restructuring terms justified revocation and reinstatement. The Tribunal found no infirmity in proceeding under Section 7 on that revived liability and accepted that non-payment of amounts due under the loan/restructured terms amounts to default warranting initiation of CIRP. [Paras 19, 23, 30, 32]

Respondent No.1 validly revoked the restructuring under Clause 7, reinstated the original liability, and was entitled to seek initiation of CIRP under Section 7.

Compliance by Asset Reconstruction Company with RBI Master Circular - precedential position of Vidharbha Industries and M. Suresh Kumar Reddy on Section 7 discretion - Whether the Appellant's contentions regarding non-compliance with the RBI Master Circular, malicious filing, or reliance on Vidharbha Industries to resist admission warranted upsetting the Impugned Order. - HELD THAT: - The Tribunal found that the Appellant failed to demonstrate non-compliance by the Asset Reconstruction Company with the Master Circular dated 10.02.2022; no concrete evidence was placed to substantiate that ground. Allegations of malicious intent and lack of evidence were rejected in view of documentary material before the Adjudicating Authority. Regarding precedent, the Tribunal analysed Vidharbha Industries and the subsequent clarification in M. Suresh Kumar Reddy, observing that the latter clarified the scope of discretion under Section 7 and reaffirmed that non-payment of amounts when due constitutes default. The cited authorities did not support the Appellant's challenge to admission. [Paras 30, 31, 33, 34]

The contentions on non-compliance, malice, and reliance on Vidharbha Industries did not warrant interference; the authorities relied upon do not support reversal of admission.

Final Conclusion: The appeal is dismissed. The Impugned Order admitting Company Petition No. 9 of 2023 and initiating CIRP against Vilson Roofing Product Pvt. Ltd. is upheld; the IRP shall proceed with the CIRP in accordance with the IBC and applicable directions.

Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - encashment/invocation of Performance Bank Guarantee during moratorium - independent contract character of bank guarantee and exceptions (fraud, irretrievable injustice) - amendment to Section 14 clarifying scope vis-a -vis surety/guarantee - performance guarantee excluded from "security interest" under the IBC - appropriation order by Nominated Authority and its pre moratorium effect

Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - encashment/invocation of Performance Bank Guarantee during moratorium - amendment to Section 14 clarifying scope vis-a -vis surety/guarantee - performance guarantee excluded from "security interest" under the IBC - Whether the moratorium under Section 14 bars invocation/encashment of the Performance Bank Guarantee in the CIRP of the Corporate Debtor. - HELD THAT: - The Tribunal held that the moratorium under Section 14 does not operate to bar invocation or encashment of an unconditional, irrevocable performance bank guarantee. The judgment applies the legislative amendment to Section 14(3) (w.e.f. 06.06.2018) which expressly excludes a surety in a contract of guarantee from the moratorium, and relies on the Insolvency Law Committee's reasoning that guarantees preserve separate remedies for creditors. The court further noted that the definition of "security interest" in the IBC specifically excludes a performance guarantee, reinforcing that a PBG is not an asset of the corporate debtor subject to moratorium. Precedents of this Tribunal and the Supreme Court recognising the independent contractual character of bank guarantees and permitting invocation except in cases of fraud or irretrievable injustice were applied to uphold the Adjudicating Authority's conclusion that encashment is not barred by moratorium. [Paras 18, 19, 21, 22, 23]

Moratorium under Section 14 does not bar encashment/invocation of the Performance Bank Guarantee; the Adjudicating Authority correctly held that the letters calling upon the bank to appropriate the PBG are valid.

Appropriation order by Nominated Authority and its pre moratorium effect - independent contract character of bank guarantee and exceptions (fraud, irretrievable injustice) - Whether the Appropriation Order dated 27.10.2023 by the Nominated Authority was valid and whether the Delhi High Court order dated 03.11.2023 or the subsequent Nominated Authority letter of 28.03.2024 prevented invocation or altered the effect of the earlier appropriation. - HELD THAT: - The Tribunal found that the Nominated Authority had already passed the Appropriation Order on 27.10.2023 directing appropriation from the specified PBG, and that this order was on record before initiation of CIRP. The writ before the Delhi High Court challenged the Scrutiny Committee minutes and was withdrawn with liberty, and the High Court order did not impugn or overturn the Appropriation Order; moreover the petitioner had not placed the Appropriation Order before the High Court. The subsequent communications of 28.03.2024 and the invocation letters of April 2024 were follow up actions consequent to the earlier appropriation decision. Given the prior valid decision and the principles permitting invocation of an independent bank guarantee (subject to narrow exceptions), there was no ground to restrain the invocation. [Paras 11, 12, 13, 14, 23]

The Appropriation Order dated 27.10.2023 was valid and predated the moratorium; the Delhi High Court order did not negate that appropriation and the Adjudicating Authority rightly refused to restrain the follow up invocation communications.

Final Conclusion: The appeal is dismissed. The adjudicating authority correctly held that the moratorium under Section 14 does not bar invocation/encashment of the performance bank guarantee and that the Nominated Authority's pre moratorium appropriation order stood valid; no relief to restrain the bank from encashing the PBG was warranted.

Abuse of process - change of stance between operational creditor and financial creditor - maintainability of Section 7 application - summary nature of insolvency proceedings - pleadings on oath and estoppel by prior affidavit

Change of stance between operational creditor and financial creditor - pleadings on oath and estoppel by prior affidavit - Whether the appellant could convert its claim from an operational creditor (Section 9) to a financial creditor (Section 7) after withdrawing the Section 9 application - HELD THAT: - The Court observed that insolvency proceedings under the Code are summary in nature and rest upon the pleadings and documentary evidence submitted on oath. The appellant had earlier filed a Section 9 application and repeatedly averred, including in the supporting affidavit, that the amount was an investment (operational debt). That application was withdrawn only because another Section 7 application against the corporate debtor had been admitted; there was no record that the earlier pleadings were erroneous or that the appellant sought to correct a bona fide mistake at that stage. By subsequently filing a Section 7 petition asserting the same amount as a loan (financial debt), the appellant materially altered its earlier sworn pleadings. The Tribunal found that the appellant made no effort in the Section 9 proceedings to disclose any claimed bona fide mistake and only in later proceedings sought to change its stance, which the Court held to be an impermissible volte-face and an abuse of process. [Paras 16, 17, 18]

The change of stance from operational creditor to financial creditor after having made sworn averments to the contrary is an abuse of process and disentitles the appellant to maintain the Section 7 petition.

Maintainability of Section 7 application - summary nature of insolvency proceedings - Whether the Section 7 application could be maintained insofar as it sought interest after payment of the principal amount - HELD THAT: - The Adjudicating Authority had held the Section 7 petition not maintainable with regard to claim for interest as it was not established to be a financial debt. The Appellate Tribunal noted that the principal amount had already been paid back by the respondent and that the appellant's primary change of characterisation of the claim came after earlier sworn pleadings treating it as an investment. The Court found that pursuing the Section 7 petition solely for recovery of interest after such conduct amounted to an abuse and could not be permitted. The appellant's reliance on a prior decision concerning interest on debentures was held inapplicable on facts, since that case involved a different contractual and factual matrix (debenture interest payable at stated intervals). [Paras 11, 12, 13, 18]

The Section 7 petition is not maintainable insofar as it seeks interest under the present facts; the claim for interest cannot be pursued by converting the earlier operational-claim pleadings into a financial-debt case.

Abuse of process - costs for frivolous litigation - Whether costs should be imposed for initiating frivolous litigation - HELD THAT: - Having concluded that the appellant's conduct in changing its pleaded characterisation of the claim and pursuing a Section 7 petition after withdrawal of Section 9 was deplorable and an abuse of process, the Court considered appropriate penal consequences. The Tribunal emphasised that such practice is unacceptable and that deterrence is warranted to prevent unnecessary litigation and misuse of insolvency jurisdiction. [Paras 19]

The appeal is dismissed and the appellant is directed to pay costs of Rs. 1,00,000 to the respondent within 30 days; failure to pay authorises the respondent to approach the Court for appropriate contempt proceedings.

Final Conclusion: The appeal is dismissed. The Tribunal held that the appellant's reversal of its earlier sworn position (from operational creditor to financial creditor) constituted an abuse of process and rendered the Section 7 petition insofar as it sought interest not maintainable; costs of Rs. 1,00,000 are imposed on the appellant to be paid to the respondent within 30 days.

Locus to challenge admission under Section 7 - existence of debt and default - effect of pendency of Section 66 proceedings on Section 7 admission - enforceability of settlement award and right to claim in CIRP - sham or collusive transaction

Locus to challenge admission under Section 7 - Appellants had no locus to challenge the Adjudicating Authority's order admitting the Section 7 application. - HELD THAT: - The Appellants were parties to a Share Purchase Agreement with two shareholders of the Corporate Debtor but did not acquire shareholding as the SPA could not be given effect to. The Appellants themselves accepted, by the SPA and the Settlement Award, the existence of the loan liability which they undertook to pay. They are not shareholders of the Corporate Debtor and their Intervention Application filed after the Section 7 matter was reserved was a belated attempt to participate. Given these facts, the Appellants lacked a valid basis to challenge the admission order and could not prevent the Adjudicating Authority from proceeding to admit the Section 7 petition where debt and default were established. [Paras 5, 6, 11, 13]

Appellants lacked locus to impugn the admission order and the appeal on that ground fails.

Existence of debt and default - The Adjudicating Authority rightly found existence of debt and default and correctly admitted the Section 7 application. - HELD THAT: - The Adjudicating Authority's findings (reproduced at paras 17, 18 and 21 of its order) demonstrated that the loan facility was payable by October 31, 2021, the CIBIL report and MCA master data evidenced the Rs.300 crore facility and registered charge, and the debt remained unpaid. The Appellants did not dispute disbursement or deny the debt; on the contrary they acknowledged the liability in the SPA and Settlement Award and undertook to pay. On these materials, the statutory tests for admission under Section 7 were satisfied and the initiation of CIRP was correctly directed. [Paras 6, 11, 13]

Existence of debt and default was established and furnished a valid basis for admission under Section 7.

Effect of pendency of Section 66 proceedings on Section 7 admission - sham or collusive transaction - Pendency of a Section 66 application does not preclude admission of a Section 7 petition where debt and default are established; allegations of a sham transaction did not impede admission. - HELD THAT: - The Appellants relied on an outstanding Section 66 application seeking avoidance of the loan transaction and on the doctrine in Phoenix ARC regarding sham transactions. The Tribunal held that Section 66 proceedings serve a different purpose and their pendency is not an impediment to a Section 7 admission premised on proved debt and default. Moreover, the present case did not involve a dispute about disbursal of funds; the Statement of Account filed in the Section 7 application indicated disbursement. The question whether the loan was avoidable under Section 66 is for separate adjudication and does not disable the Adjudicating Authority from admitting a Section 7 petition. [Paras 7, 8, 13]

Pendency of Section 66 proceedings and allegations of sham transaction do not preclude admission under Section 7 when debt and default are established.

Enforceability of settlement award and right to claim in CIRP - Appellants retain the right to enforce the Settlement Award and to file claims in the CIRP; those remedies do not negate the correctness of admission. - HELD THAT: - The Settlement Award acknowledged the loan liability and recorded the Appellants' undertaking to pay the debt. The Tribunal observed that the Appellants are free to pursue execution of the award before the appropriate court and to submit any claim in the CIRP, which will be considered according to law. Such remedies are alternative fora for redress and do not invalidate the Adjudicating Authority's admission of the Section 7 petition. [Paras 9, 12, 13]

Appellants may enforce the Settlement Award and file claims in the CIRP; these rights do not vitiate the admission under Section 7.

Final Conclusion: The appeal is dismissed. The Adjudicating Authority correctly admitted the Section 7 petition on the basis of established debt and default; the pendency of a Section 66 challenge and the Appellants' Settlement Award do not preclude admission, and the Appellants remain free to execute the award and file claims in the CIRP for adjudication according to law.

Prima facie case - discharge petition - proceeds of crime - offence of money laundering under Section 3 of PMLA - presumption under Section 24 of PMLA - trust as a juristic person liable under PMLA - definition of person under PMLA - scope of Section 3 - knowingly assists/party/possession and projection

Prima facie case - discharge petition - offence of money laundering under Section 3 of PMLA - presumption under Section 24 of PMLA - trust as a juristic person liable under PMLA - Whether the Special Court rightly refused to discharge the petitioner (Accused No.2) in the prosecution under PMLA on the basis of the complaint and materials produced - HELD THAT: - The High Court examined the complaint and annexures to ascertain whether prima facie materials existed against the petitioner. The complaint alleged that the petitioner was a trustee of the AIOBEU Trust, participated in decisions to transfer and administer Union property to the Trust, and that Trust funds were used to create fixed deposits and acquire movable and immovable assets allegedly derived from scheduled offences (see extracted paragraphs of the complaint). The Court noted the petitioner's asserted resignation after FIR registration but observed absence of documentary proof of acceptance and reliance on trust law principles (Sections 46 and 72, Indian Trusts Act) that a trustee who has accepted trust cannot unilaterally renounce office. The Court treated the Trust as an artificial/juristic person within the definition of "person" under PMLA and the IPC, rendering the Trust and its trustees amenable to PMLA provisions. On legal construction, the Court held that Section 3 of PMLA covers a wide range of activities (possession, acquisition, use, projection of proceeds of crime) and that mere possession or use of proceeds of crime is sufficient to attract the offence. In view of Section 24, the Court emphasised the statutory presumption in proceedings relating to proceeds of crime, placing onus on the accused to displace the presumption. Applying these principles to the complaint material - allegations of control over Trust affairs, transactions, acquisition of property and deposits, and the role of trustees - the Court found no perversity in the Special Court's conclusion that prima facie case existed against the petitioner and that the discharge petition was rightly rejected. The Court further observed that detailed adjudication of evidentiary materials is unnecessary at the discharge stage and is for trial. [Paras 30, 31, 33, 34, 35]

The refusal to discharge the petitioner is confirmed and the Criminal Revision is dismissed

Final Conclusion: The High Court confirmed the Special Court's order refusing discharge of the petitioner, holding that prima facie material existed to proceed under PMLA against the petitioner and dismissing the criminal revision.

Commercial Training or Coaching Centre - Support Services of Business and Commerce - exclusion of educational services from taxable business activity - reclassification prohibition where a service is specifically excluded - service tax liability of institutions providing university-approved distance education

Commercial Training or Coaching Centre - Support Services of Business and Commerce - service tax liability of institutions providing university-approved distance education - exclusion of educational services from taxable business activity - Liability of the appellant to service tax under the category 'Commercial Training or Coaching Centre' / support services for the period April, 2009 to October, 2013. - HELD THAT: - The Tribunal held that Sikkim Manipal University is a recognised university under UGC and is engaged in providing education services and not a business activity. The appellant, operating as a learning centre imparting identical services to the University under a UGCapproved distance education programme, cannot be classified as providing 'Support Services of Business and Commerce' merely to attract the taxable category of 'Commercial Training or Coaching Centre'. Applying the established principle that a service specifically excluded from a taxing entry cannot be reclassified under another taxable entry, the impugned demand of service tax was found unsustainable. Consequentially, imposition of penalty was also held not permissible. [Paras 6, 7, 8, 9]

Impugned demand of service tax under 'Commercial Training or Coaching Centre' set aside; appellant held not liable and no penalty imposable.

Final Conclusion: Appeal allowed; the demand of service tax for April, 2009 to October, 2013 confirmed by the adjudicating authority is set aside as the services rendered by the appellant (learning centre for a UGCrecognised university) are not taxable under 'Commercial Training or Coaching Centre' or as support services, and no penalty is imposable.

Implied authority of agent - discharge of service tax by agent as discharge of principal's liability - service tax on interchange fee - notional consideration for free intra-group ATM services - valuation - consideration must flow to service provider - extended period of limitation under proviso to section 73(1) of the Finance Act for suppression/ wilful misstatement - burden on Revenue to prove deliberate suppression with intent to evade tax - bona fide belief by assessee and its effect on invocation of extended limitation

Implied authority of agent - discharge of service tax by agent as discharge of principal's liability - service tax on interchange fee - Sustainability of confirmed demand of service tax on ATM interchange fee received by Associate Banks from SBI where SBI had been discharging service tax on behalf of Associate Banks. - HELD THAT: - The Tribunal found on the facts that SBI and the Associate Banks had long practised settlement through the co-owned SBG Switch with SBI discharging aggregated service tax liability, and that conduct and lack of dispute evidenced an implied authority for SBI to discharge the Associate Banks' service tax liability. Once SBI had discharged service tax as agent of the Associate Banks, the same tax could not be demanded again from the Associate Banks. The Tribunal applied the principle that an "assessee" includes his agent and relied on authoritative precedent that if the acquirer bank discharges service tax on the entire amount including the share of another bank, a fresh demand cannot be raised on that share. The adjudicating authority's contrary finding that interchange fee was consideration for deployment of ATM was also not upheld; interchange fee was held to be consideration for services to non-SBG banks and, in any event, the payment by SBI as agent extinguished liability. Consequently the confirmed demand on interchange fee could not be sustained. [Paras 22, 23, 25, 26, 28]

Demand confirmed on interchange fee could not be sustained; appeals on this issue allowed.

Notional consideration for free intra-group ATM services - valuation - consideration must flow to service provider - extended period of limitation under proviso to section 73(1) of the Finance Act for suppression/ wilful misstatement - burden on Revenue to prove deliberate suppression with intent to evade tax - bona fide belief by assessee and its effect on invocation of extended limitation - Chargeability of service tax on notional consideration for free ATM services provided among SBG Banks; and correctness of rejection of invocation of the extended limitation period for the earlier period. - HELD THAT: - On the question of notional consideration, the Tribunal held that service tax attaches only where there is a consideration which flows from recipient to provider and accrues to the provider's benefit. The co ownership of SBG Switch and the pre existing understanding that constituents would not charge each other were treated as contractual conditions, not as consideration; the arrangement predated levy of service tax and continued without change, and no monetary or non monetary consideration flowed to the provider that would form assessable value. Thus, notional consideration could not be invoked to levy service tax on intra SBG transactions. With respect to limitation, the Tribunal accepted the adjudicating authority's finding that the Revenue failed to prove any deliberate suppression or wilful misstatement by the Associate Banks; returns were filed and audits conducted without objection, and the Associate Banks acted under a bona fide belief that SBI was discharging tax as their agent. The proviso to section 73(1) requires proof of deliberate suppression with intent to evade tax and the burden lies on Revenue; that burden was not discharged, so extended period could not be invoked. Consequently department's appeals against dropping of extended period demand were dismissed. [Paras 34, 35, 36, 40, 53]

Service tax on notional consideration for free intra SBG ATM services not leviable; invocation of extended period under proviso to section 73(1) held incorrect as Department failed to prove deliberate suppression - department appeals dismissed.

Final Conclusion: The five appeals filed by State Bank of India are allowed; cross objection of the Department in one appeal is dismissed; the five appeals filed by the Department are dismissed and the cross objections filed by the appellant in those appeals are disposed of.

Real Estate Agent service - Definition of "service" excluding transfer of title/immovable property - Principal-to-principal transaction (risk and reward borne by purchaser) - Demand survey amount adjustable/refundable - not consideration for service - Cancellation charges as penalty - not a service consideration - Miscellaneous income (discounts) not constituting taxable service

Real Estate Agent service - Definition of "service" excluding transfer of title/immovable property - Principal-to-principal transaction (risk and reward borne by purchaser) - Income from purchase and resale of allotment rights/bulk-booked flats is not exigible to service tax as "Real Estate Agent" services. - HELD THAT: - The Tribunal upheld the conclusion that the respondent acted as a purchaser and reseller of allotment rights rather than as an agent representing builder or buyer. The MOU and conduct (exclusive obligation to sell booked flats, forfeiture of earnest money on non-sale, advertising and allotment in respondent's name, and retention of margin/profit or bearing loss) demonstrate a principal-to-principal transaction where risks and rewards of ownership lay with the respondent. Such transactions involve transfer of rights in immovable property and, on a plain reading of the statutory definition of "service", fall outside the scope of "service" because they constitute transfer of title/interest in immovable property. Reliance on precedents that treat executory or development/trading-in-land arrangements as non-taxable (where consideration is margin/profit and not a defined commission for services) supported the conclusion. Consequently, the adjudicating authority correctly dropped the demand on this head. [Paras 14, 16, 17, 26, 27]

Demand on income from sale of allotment rights/bulk-booked flats is not exigible to service tax under the "Real Estate Agent" category.

Demand survey amount adjustable/refundable - not consideration for service - Amount charged as 'Demand Survey' is not taxable as service tax. - HELD THAT: - The Tribunal accepted the Adjudicating Authority's finding that the small refundable amount collected as a "Demand Survey" was either adjusted against the purchase price when the deal proceeded or refunded if no sale took place. As the amount does not operate as a definite consideration for a distinct service to an identified recipient (it is refundable or adjustable), it does not constitute consideration for a taxable service and the demand on this head was rightly dropped. [Paras 24]

Demand survey amount is not exigible to service tax and the demand was correctly dropped.

Cancellation charges as penalty - not a service consideration - Cancellation charges collected from buyers are not exigible to service tax. - HELD THAT: - The Tribunal agreed with the Adjudicating Authority that cancellation charges are penal in nature-levied for breach of commitment by buyers-and do not represent consideration for any real estate agent service provided by the respondent. As no separate taxable service was rendered in respect of such charges, the demand for service tax on cancellation charges was properly rejected. [Paras 25]

Cancellation charges are not taxable as service and the demand on this head is dismissed.

Miscellaneous income (discounts) not constituting taxable service - Miscellaneous income recorded as discounts on advertising is not exigible to service tax. - HELD THAT: - The Tribunal accepted verification of ledger entries showing that the miscellaneous income arose from discounts received from advertising agencies and did not reflect compensation for a distinct service to buyers or builders. There is no element of a taxable service in such receipts, and therefore no service tax liability arises on the miscellaneous income. [Paras 25]

Miscellaneous income from advertising discounts is not taxable as service.

Extended period of limitation and penalty - Applicability of extended period of limitation, penalty and interest not decided and left open for consideration. - HELD THAT: - Because the Tribunal decided the substantive merits in favour of the respondent (that the activities were not exigible to service tax), it expressly declined to consider the Revenue's contentions on invocation of the extended period of limitation or imposition of penalty and interest. Those questions were not adjudicated on merits by the Tribunal in this order. [Paras 26]

Question of extended limitation period, penalty and interest is not decided and remains open for consideration.

Final Conclusion: The adjudicating authority's order dropping the service-tax demand was affirmed: the respondent's purchase-and-resale transactions in allotment rights and attendant receipts (demand survey, cancellation charges, miscellaneous income) do not attract service tax under the "Real Estate Agent" or post-negative provisions; questions of extended limitation, penalty and interest were not examined.

Rent-a-cab service - taxable service - exemption under Notification No. 25/2012-ST (contract carriage) - abatement under Notification No. 1/2006 - cum-duty value - extended period invoked for suppression/evasion - interest as compensatory under Section 75 of the Finance Act, 1994 - penalty under Section 77 of the Finance Act, 1994 - penalty under Section 78 of the Finance Act, 1994

Rent-a-cab service - taxable service - Services rendered by the appellant are taxable as rent-a-cab services. - HELD THAT: - The Tribunal examined the agreements, the nature and duration of hiring, and the invoicing. The appellant rented vehicles (Tavera, Indica etc.) to clients for prolonged periods (monthly hires) with consideration on a kilometre basis and charges inclusive of taxes and insurance. The vehicle supply on long-term hire, stationing at the hirer's premises and exclusive use for client-specified pickup/drop activities fall within the scope of a person engaged in the business of renting of cabs. Reliance on earlier authorities was considered and distinguished by the adjudicating authority, and the Tribunal found no reason to depart from the conclusion that the activity constitutes a rent-a-cab operator service attracting service tax. [Paras 7]

Liability to service tax under the category of rent-a-cab services is upheld.

Exemption under Notification No. 25/2012-ST (contract carriage) - contract carriage - The appellant is not eligible for exemption under Notification No. 25/2012 ST on the ground of contract carriage. - HELD THAT: - Eligibility for the exemption requires vehicles to operate under a contract carriage permit issued by the Regional Transport Authority and compliance with conditions such as specified routes, fare tables, taximeter requirements and other permit conditions under the Motor Vehicles Act. The appellant did not demonstrate compliance with those contract carriage requirements; hence the claimed exemption cannot be allowed. The Tribunal applied the principle of strict interpretation of exemption notifications and the burden on the assessee to prove applicability. [Paras 10]

Claim of exemption under Notification No. 25/2012 ST is rejected.

Abatement under Notification No. 1/2006 - The appellant's claim for abatement under Notification No. 1/2006 is not accepted on the record before the adjudicating authority. - HELD THAT: - The adjudicating authority found no evidence that the appellant had not availed CENVAT credit or that the abatement conditions were met; the appellant failed to place requisite proof before the authority. In absence of supporting material, the benefit of abatement could not be extended. [Paras 9]

Claim for abatement under Notification No. 1/2006 is disallowed.

Cum-duty value - The appellant is entitled to the benefit of cum-duty value. - HELD THAT: - Invoices and agreements showed that the rates charged were gross and inclusive of taxes; accordingly, the Tribunal applied the principle that where the price charged is inclusive of tax and the tax component cannot be recovered separately from customers, the value should be treated as cum duty. Following that principle, the demand is to be recalculated after extending cum duty benefit to the appellant. [Paras 11]

Benefit of cum-duty value is allowed and the demand must be recalculated accordingly.

Extended period invoked for suppression/evasion - Extended period of limitation was rightly invoked by the Department. - HELD THAT: - Information revealed that the appellant had collected service tax from its client invoices but failed to deposit the amount or file periodical returns, which the Tribunal held to be evidence of intent to evade. On these facts, invocation of the extended period for adjudication was sustained in line with precedent recognising collection without remittance and non-filing of returns as constituting suppression/evasion. [Paras 12]

Invocation of the extended period is upheld.

Interest as compensatory under Section 75 of the Finance Act, 1994 - penalty under Section 77 of the Finance Act, 1994 - penalty under Section 78 of the Finance Act, 1994 - Interest and penalties were correctly imposed, subject to modification of penalty under Section 78 consequent to recalculation of demand. - HELD THAT: - Interest was held to be compensatory for withholding tax and therefore properly leviable. Penalty under Section 77(2) was sustained. The Tribunal upheld imposition of penalty under Section 78 but directed that the Section 78 penalty be modified proportionately to the revised demand after granting cum duty benefit; consequently, recalculation of demand will reduce the Section 78 penalty accordingly. [Paras 13, 14, 15]

Interest and penalty under Section 77 are upheld; Section 78 penalty is sustained but to be modified in accordance with the revised demand.

Final Conclusion: The appeal is partly allowed: the finding that the appellant's services are taxable as rent a cab services and invocation of extended limitation, interest and penalties are upheld; the claim of exemption under Notification No. 25/2012 ST and abatement under Notification No. 1/2006 are rejected; the appellant is entitled to cum duty value and the demand is to be recalculated accordingly, with the Section 78 penalty correspondingly modified.

Business Auxiliary Service - commission agent - Commissioning and installation service - Management, maintenance or repair - export of services - used outside India - extended period of limitation - suppression or wilful mis-statement - penalty - interest on delayed payment

Business Auxiliary Service - commission agent - Commissioning and installation service - Management, maintenance or repair - export of services - used outside India - Services rendered by the appellant are not Business Auxiliary Services/commission agent activities and do not qualify as export of services under the Export of Service Rules, 2005. - HELD THAT: - The distributor agreement with the foreign principal obliges the appellant to provide installation, repair, maintenance and user training and specifies that invoices for the goods are issued directly by the foreign company; the appellant did not undertake marketing or sales promotion or procure sales orders on behalf of the foreign company. The essential character of the contract is provision of after sales and service support within India. Consequently the services fall within commissioning and installation, repairing and maintenance, commercial training and related services rather than marketing or commission agent activities covered under Business Auxiliary Service. Because the services were provided in India and used in India (the products and beneficiaries being in India), the conditions for export under the Rules are not satisfied and the exemption is not available. The Circular relied upon by the appellant applies to marketing activities where benefit accrues outside India and is therefore inapplicable where marketing is absent. [Paras 10, 11, 13, 16]

The services are classifiable as commissioning/installation, repair and maintenance and related services provided and used in India; they are not Business Auxiliary Service or exported services and no exemption under the Export of Service Rules applies.

Extended period of limitation - suppression or wilful mis-statement - Invocation of the extended period of limitation under Section 73(1) was justified. - HELD THAT: - An audit revealed that the appellant had wrongly availed export of service exemption though the contract and nature of services showed otherwise; this constituted suppression of correct tax liability and a deliberate attempt to mislead the Department. The facts differ from precedents relied upon by the appellant where the Department had prior knowledge; here the Department discovered the true nature of services only on audit, justifying invocation of the extended period. [Paras 14]

Extended period of limitation was rightly invoked on the facts; the demand for the tax period 2008-09 to 2009-10 is not time-barred.

Penalty - interest on delayed payment - Penalty under Section 78 and interest on delayed payment were rightly imposed and are upheld. - HELD THAT: - Having concluded that the services were not export services and that the appellant concealed the correct tax liability, the imposition of penalty for contravention and interest for delayed payment follows from the confirmed demand. The Tribunal finds no basis to interfere with the authorities' exercise of discretion to impose penalty and interest in these circumstances. [Paras 15]

Penalty under Section 78 and interest on delayed payment are sustained.

Final Conclusion: The Tribunal affirms the impugned order: the appellant's activities are service support/after sales services provided and used in India (not exportable Business Auxiliary Service), the extended limitation period was correctly invoked, and the demand including interest and penalty is upheld; the appeal is dismissed.

Limitation and condonation of delay in appeals - service of show-cause notice and order-in-original - requirement of sufficient cause under the proviso to section 85(3A) of the Finance Act - presumption of delivery of postal dispatch

Service of show-cause notice and order-in-original - presumption of delivery of postal dispatch - Proof of service of the Show-Cause Notice and Order-in-Original upon the appellant - HELD THAT: - The Tribunal found on the record that no proof of service of the Order-in-Original dated 11.09.2019 or of the Show-Cause Notice was placed before the adjudicating authorities and the appellant averred non-receipt; the appellant's absence before the Original Adjudicating Authority was treated as corroborative of non-receipt. Although the Department placed on record a communication stating the processes were sent by speed post and not returned undelivered, actual proof of delivery from the postal records was not available due to the lapse of time. The Tribunal therefore recorded that there was no proof of service on the appellant. [Paras 7]

No proof of service of the Show-Cause Notice or Order-in-Original is found on the record.

Limitation and condonation of delay in appeals - requirement of sufficient cause under the proviso to section 85(3A) of the Finance Act - Whether the appeal before the Commissioner (Appeals) was filed within the prescribed period or whether delay was satisfactorily explained to avail condonation - HELD THAT: - The Tribunal accepted that the appellant received a copy of the Order-in-Original on 06.04.2022 (obtained under RTI) and that, therefore, the statutory period for preferring an appeal commenced from that date. Under section 85(3A) the normal period is two months from receipt, with a discretionary further extension of one month upon satisfaction of sufficient cause. The appeal filed on 05.07.2022 exceeded the two-month period and fell beyond the one-month extension which the Commissioner (Appeals) declined to grant. The appellant's explanation-delay due to a part-time accountant-was held to be inadequate and amounted to negligence; the Tribunal applied the established proposition that the explanation must cover the entire period of delay and that the discretion under the proviso is confined to one month. Relying on the cited authorities, the Tribunal concluded that no sufficient cause was shown to warrant condonation. [Paras 8, 9, 10, 11]

Delay in filing the appeal was not sufficiently explained and condonation under the proviso to section 85(3A) could not be granted; the appeal is time-barred.

Final Conclusion: Although there was no proof on record of service of the Show-Cause Notice or the Order-in-Original upon the appellant, the appellant received a copy of the Order on 06.04.2022, failed to prefer the appeal within the statutory two months and did not demonstrate sufficient cause for the one-month extension; the Commissioner (Appeals)' order rejecting the appeal as time-barred is upheld and the appeal is dismissed.

Pre-deposit requirement - waiver of pre-deposit - non-compliance and dismissal of appeal - reinstatement of appeal subject to compliance - jurisdictional challenge to show cause notice

Pre-deposit requirement - non-compliance and dismissal of appeal - waiver of pre-deposit - Validity of Commissioner (Appeals) dismissal of the appeal for failure to deposit 7.5% as pre-deposit - HELD THAT: - The Court recorded that the requirement of a pre-deposit of 7.5% of the demanded tax amount is a mandatory condition for entertaining the appeal and observed no infirmity in the Commissioner (Appeals) dismissing the appeal for non-compliance with that condition. The Court referred to the coordinate decision in Manjeet Singh and held that the petition does not persuade the Court to treat the show cause notice as a jurisdictional nullity at this stage so as to displace the pre-deposit requirement. Consequently, the Commissioner (Appeals)'s order of dismissal on the ground of non-compliance with the pre-deposit condition stands legally sustainable in principle. [Paras 10]

No error in dismissal for non-compliance with the pre-deposit requirement; waiver is not generally available.

Reinstatement of appeal subject to compliance - waiver of pre-deposit - Whether indulgence should be granted in the peculiar facts to permit restoration of the appeal on condition of making the pre-deposit within a limited time - HELD THAT: - Although the pre-deposit requirement is mandatory in principle, the Court exercised discretion in the peculiar facts of the petitioner's financial hardship and family circumstances to grant limited indulgence. The impugned order of 30 April 2024 was set aside and the appeal restored to the file of the Commissioner (Appeals) for reconsideration, but the appeal is not to be decided on merits until the petitioner makes the stipulated pre-deposit. The Court fixed a time-limit of three months for payment of 7.5% of the demanded tax amount and authorised the Commissioner (Appeals) to dismiss the appeal if the petitioner fails to comply within that period. [Paras 13, 14, 15]

Appeal restored for reconsideration conditional on the petitioner depositing 7.5% of the demanded tax within three months; failure to deposit permits dismissal for non-compliance.

Final Conclusion: The Court upheld the legal validity of the mandatory pre-deposit requirement and, while refusing a general waiver, granted a one-time indulgence in the peculiar facts by restoring the appeal subject to the petitioner making the 7.5% pre-deposit within three months; the order is not to be treated as a precedent.

Cenvat credit on packaging material - Classification as inputs versus capital goods - Entitlement to credit where initially availed under wrong head - Principles of natural justice in adjudication - De-novo adjudication / remand for fresh decision

Cenvat credit on packaging material - Classification as inputs versus capital goods - Entitlement to credit where initially availed under wrong head - Principles of natural justice in adjudication - Entitlement of the appellant to Cenvat credit on ISO tank used for packing and transportation of final product (DMS) and whether the adjudicating authority failed to examine the claim that the ISO tank is an input despite initial credit having been taken under capital goods account. - HELD THAT: - The Tribunal noted that the adjudicating authority denied Cenvat credit on the ground that the ISO tank was not a capital good and because the appellant had initially taken credit under the capital goods account. The appellant, during adjudication, had contended that the ISO tank should be treated as durable packaging material qualifying as an input and relied on Board circulars and judicial decisions. The Tribunal held that the mere fact that credit was initially availed under the capital goods account does not disentitle the appellant to credit if the ISO tank otherwise qualifies as an input. The adjudicating authority ought to have examined whether the ISO tank falls within the category of inputs and decided the claim on that basis; failure to do so amounted to a breach of principles of natural justice. Applying these conclusions, the Tribunal set aside the impugned order and directed de-novo consideration of the matter by the adjudicating authority, with specific instruction to consider the relevant circulars and judicial precedents relied upon by the appellant and to grant the appellant adequate opportunity of hearing before passing a fresh order.

Impugned order set aside; matter remanded to the adjudicating authority for de-novo adjudication on whether the ISO tank qualifies as an input entitling the appellant to Cenvat credit, with directions to consider relevant circulars and judgments and to afford opportunity of hearing.

Final Conclusion: Appeal allowed by way of remand: the Tribunal set aside the impugned order and directed the adjudicating authority to decide afresh whether the ISO tank used for packing/transportation qualifies as an input for Cenvat credit, considering the appellant's submissions, relevant circulars and case law, and after affording the appellant an opportunity of hearing.

Clandestine removal - undervaluation of assessable value - reliance on precedent and common investigation - bank statements not sole basis for establishing undervaluation - recourse to Valuation Rules and depot price analysis

Reliance on precedent and common investigation - clandestine removal - undervaluation of assessable value - Validity of dropping proceedings by the Adjudicating Authority by relying on earlier Tribunal and Supreme Court decisions in identical investigations - HELD THAT: - The Tribunal found that the present show cause notices, the evidence gathered and the charge framed were identical to those considered in earlier matters culminating in the decisions in Commissioner of Central Excise, Vapi v. Synfab Sales and Suresh Synthetics (and connected Tribunal orders). The adjudicating authority dropped proceedings after placing reliance on those precedents. The Tribunal examined the investigative material and noted the commonality of evidence and allegations. Earlier pronouncements had held that allegations of clandestine removal and undervaluation could not be sustained where the Revenue's case rested on the statement of the authorised officer, bank stock/statements or similar materials without independent corroboration showing flow back of additional consideration or differential quantity. The Tribunal accepted the reasoning in those precedents that bank statements furnished for credit facilities cannot, by themselves, establish undervaluation or clandestine removal and that the Revenue must produce cogent evidence (including technical verification or independent evidence of differential quantity or flow back) before rejecting invoice value. Given the identical factual and evidentiary matrix, the Adjudicating Authority was justified in following those precedents and in dropping the proceedings.

Impugned orders dropping the proceedings are upheld; Revenue's appeals dismissed.

Final Conclusion: The appeals by Revenue are dismissed and the adjudication orders which dropped the proceedings are upheld as correctly following earlier Tribunal and Supreme Court decisions where identical investigations and evidence failed to establish clandestine removal or undervaluation.

Cenvat credit of countervailing duty and special additional duty - refund under Section 142(3) and Section 142(6) of the CGST Act, 2017 - transitional entitlement for credit in respect of inputs imported prior to the commencement of GST - date of payment not altering the character of pre-GST credit entitlement - remand for adjudication and processing of refund claims

Cenvat credit of countervailing duty and special additional duty - refund under Section 142(3) and Section 142(6) of the CGST Act, 2017 - date of payment not altering the character of pre-GST credit entitlement - Entitlement to refund of CVD and SAD paid after commencement of GST in respect of imports made prior to commencement of GST - HELD THAT: - The Tribunal found that the CVD and SAD in question were attributable to imports made prior to the GST regime and therefore, in substance, constituted Cenvat credit available under the pre-GST law. The mere fact that the payment of those duties occurred after 01.07.2017 does not strip the amounts of their character as pre-GST Cenvat credit. Sections 142(3) and 142(6) of the CGST Act, 2017 were enacted to address transitional situations of this nature; accordingly, the appellants were prima facie entitled to claim refund of such amounts being in the nature of Cenvat credit which could not be availed post-GST.

Appellants prima facie entitled to refund of CVD and SAD paid after commencement of GST in respect of imports made prior to commencement of GST; Sections 142(3) and/or 142(6) applicable.

Remand for adjudication and processing of refund claims - Direction to set aside impugned orders and remit the matter for fresh adjudication and processing of the refund claim - HELD THAT: - The Tribunal observed that, apart from the limited point decided in its favour, other aspects of the refund claim were not examined by the authorities below. In view of that incomplete examination, the Tribunal set aside the impugned orders and remanded the matter to the adjudicating authority for processing the refund claim in accordance with law and after due consideration of all relevant issues.

Impugned orders set aside; appeals allowed to the extent of remanding the refund claim to the adjudicating authority for fresh processing in accordance with law.

Final Conclusion: The Tribunal held that amounts of CVD and SAD paid after 01.07.2017 in respect of imports effected prior to the GST commencement retain the character of pre-GST Cenvat credit and are prima facie refundable under the transitional provisions; the impugned orders are set aside and the matter is remanded to the adjudicating authority for fresh processing of the refund claim in accordance with law.

Works contract - concession agreement - transfer of property in goods - deferred payment by recovery of toll - dealer - incidence of commercial tax and entry tax

Works contract - concession agreement - deferred payment by recovery of toll - incidence of commercial tax and entry tax - Whether the BOT/concession agreement for construction, maintenance and operation of Dewas by-pass road constitutes a works contract and attracts liability under the Commercial Tax Act and the Entry Tax Act for the assessment periods in question. - HELD THAT: - The Court held that the agreement satisfies the primary description of a 'works contract' - it is an agreement in writing for execution of work relating to construction, repair and maintenance of infrastructure and includes ancillary activities essential to construction. The nomenclature of the agreement as a 'concession' or additional features (such as financing arrangements, escrow/accounting mechanisms, or method of recovery) do not alter its character if the essential ingredients of a works contract are present. The mode of recovery of the contract value by authorising the petitioner to collect tolls for a fixed concession period amounts to deferred payment and does not negate the transfer/consumption of goods in execution of the contract. As the petitioner is a registered dealer, the turnover arising from the execution of the works contract is taxable under the Commercial Tax Act and entry tax is attracted under the Entry Tax Act. The Court noted and applied the reasoning of the Full Bench in Viva Highways and rejected the narrower approach in earlier decisions that sought to exclude concession agreements from the definition of works contract. The Court further observed that ancillary obligations or the label 'concession' are immaterial where the contract falls within the statutory definition of works contract. [Paras 18, 23, 26, 27]

The BOT/concession agreement is a works contract; the petitioner is liable to pay commercial tax and entry tax for the periods under adjudication and the writ petitions are dismissed.

Final Conclusion: Writ Petitions dismissed. The BOT/concession agreements were held to be works contracts attracting commercial tax and entry tax for the assessment periods indicated; taxes not recovered on account of pendency of these petitions shall be recovered with interest.

Entry tax on entry of goods into a local area for consumption, use or sale therein - Meaning of "use or consumption" under Entry 52, List II of the Seventh Schedule - Whether refining of crude soyabean oil constitutes "manufacture" - Emergence of a new and distinct commercial commodity as test of manufacture - Proviso (ii) to Section 3(1) - exemption where goods after entry are sold outside the State or in course of inter state trade or export

Whether refining of crude soyabean oil constitutes "manufacture" - Emergence of a new and distinct commercial commodity as test of manufacture - Refining crude soyabean oil amounts to a manufacturing process resulting in a new and distinct commercial commodity (refined soyabean oil). - HELD THAT: - The court applied the established test that manufacture occurs when processes transform a raw material into a commercially new and distinct article with different name, character or use. It examined the stages of refining (degumming, deacidification, decolourisation, deodorization and addition of permitted additives) and observed that the resultant refined soyabean oil is a saleable consumable product distinct in use from crude oil. Reliance was placed on precedents construing 'manufacture' (including comparisons with surgical cotton and other authorities) and the commercial reality that refined oil is marketable for cooking whereas crude oil is not. On that basis the transformation effected by refining was held to satisfy the test of manufacture notwithstanding submissions about notifications purporting to exclude refining from the statutory definition. [Paras 30, 31, 32, 34]

The process of refining crude soyabean oil is manufacturing and produces a new commercial commodity (refined soyabean oil).

Entry tax on entry of goods into a local area for consumption, use or sale therein - Meaning of "use or consumption" under Entry 52, List II of the Seventh Schedule - Proviso (ii) to Section 3(1) - exemption where goods after entry are sold outside the State or in course of inter state trade or export - Entry tax is leviable on crude soyabean oil brought into the State and refined locally even though the refined oil is subsequently sold outside the State or in the course of inter state trade, because there is consumption/use in the local area by virtue of the manufacturing process. - HELD THAT: - Section 3(1) levies entry tax on goods entering a local area for consumption, use or sale therein, with proviso (ii) exempting goods which after entry are sold outside the State or in the course of inter state trade. The court held that where the goods are used or consumed in the local area to produce a new saleable commodity, the levy is within Entry 52 and proviso (ii) does not apply. As refining was found to amount to manufacture and the crude oil was used/consumed in making refined oil (a distinct consumable product), entry tax on the entry of crude oil was rightly imposed. The authorities' findings that refined oil emerges and is marketed after local processing supported upholding the levy. [Paras 20, 33, 34, 35]

Levy of entry tax on the crude soyabean oil brought into Madhya Pradesh and refined locally (even if sold outside the State thereafter) is upheld; writ petitions dismissed.

Final Conclusion: The High Court upheld the assessing and revisional authorities: refining crude soyabean oil constitutes manufacture producing a new commercial commodity (refined oil), and entry tax on the crude oil brought into Madhya Pradesh and used in that process is leviable despite subsequent sale outside the State; all writ petitions dismissed.

Refund as a result of appellate order - statutory obligation to refund without claim - interest on delayed refund - calculation of simple interest from expiry of six months

Refund as a result of appellate order - statutory obligation to refund without claim - interest on delayed refund - calculation of simple interest from expiry of six months - entitlement to interest on refund where refund became due pursuant to a Supreme Court order and was paid after delay - HELD THAT: - The Court held that Section 33-B imposes a duty on the assessing authority to refund amounts that become due by reason of an appellate or other proceeding without any claim by the assessee. Section 33-F provides that where such a refund is not granted within six months from the date of the appellate order, the State Government shall pay simple interest at twelve percent per annum on the refund amount from the date immediately following the expiry of the six month period until the date of actual payment. The Supreme Court's order dated 02.03.2006 made the refund due; no claim was required under Section 33-B. As the refund was not paid within six months and was only refunded on 24.04.2012, the statutory requirements for payment of interest under Section 33-F were met. The respondents were therefore directed to calculate and pay the specified interest, and to complete the calculation and payment within 90 days of communication of the order. [Paras 11, 12, 13]

Petitioner is entitled to simple interest at 12% per annum under Section 33-F from the day following the expiry of six months from the appellate order (02.03.2006) up to the date of refund (24.04.2012); respondents directed to calculate and pay the interest within 90 days.

Final Conclusion: Writ petition allowed: respondents directed to calculate and pay statutory interest under the Act on the refunded amount for the period from expiry of six months after the Supreme Court order until actual refund, with payment to be completed within 90 days; no costs.

Reassessment barred by limitation - limitation under Section 40(4) read with Section 42(3) of the JVAT Act - reassessment initiated pursuant to audit objection - nullity for lack of jurisdiction - alternative remedy not a bar where order is wholly without jurisdiction - violation of principles of natural justice for non-supply of audit objection

Reassessment barred by limitation - limitation under Section 40(4) read with Section 42(3) of the JVAT Act - Validity of the reassessment order dated 07.09.2021 in view of the statutory limitation period - HELD THAT: - The Court held that Section 40(4) prescribes a five-year limitation from the end of the year in respect of which tax is assessable and that reassessment proceedings under Section 42(3), being one category of reassessment, are subject to that same five-year limitation. The assessment year in question is 2015-16 and the five-year period expired on 31.03.2021; the impugned reassessment order was passed on 07.09.2021, after the limitation period, and is therefore without jurisdiction and barred by limitation. The Court relied on the legislative scheme and the prior decision in M/s. Rungta Mines Ltd. to conclude that the non-insertion of an overriding clause in Section 42(3) means the limitation of Section 40(4) applies to reassessments founded on audit objections. [Paras 8, 13]

Reassessment order dated 07.09.2021 is barred by limitation and void.

Nullity for lack of jurisdiction - alternative remedy not a bar where order is wholly without jurisdiction - Whether the invalidity of a time-barred reassessment can be set up at any time and whether existence of an alternate remedy bars relief - HELD THAT: - The Court held that an order passed without jurisdiction is a nullity and its invalidity can be raised at any time. Consequently, the availability of an alternate remedy does not preclude exercise of writ jurisdiction where the impugned order is wholly without jurisdiction; the Court referred to authoritative precedents to underscore that writ relief may be granted notwithstanding alternate remedies in such situations. The departmental contention as to alternate remedy was therefore rejected insofar as the order lacked jurisdiction due to being time-barred. [Paras 9, 10, 13]

The reassessment being a nullity for want of jurisdiction may be impugned at any time and the existence of alternate remedy does not bar the writ.

Violation of principles of natural justice for non-supply of audit objection - Validity of proceedings in light of non-supply of the audit objection and adequacy of show-cause notice - HELD THAT: - The Court observed that the department was duty bound to supply a copy of the audit objection along with show-cause notices because without the audit objection an effective reply could not be furnished. A vague show-cause notice lacking necessary details violates principles of natural justice. This deficiency in procedure reinforced the view that the reassessment proceedings were flawed. [Paras 12, 13]

Proceedings were vitiated by failure to supply the audit objection, amounting to violation of natural justice.

Final Conclusion: The reassessment order dated 07.09.2021 and the consequential demand notice of the same date in respect of Assessment Year 2015-16 are quashed and set aside as barred by limitation, void for want of jurisdiction and procedurally vitiated for failure to supply the audit objection; the writ petition is allowed.

Presumption under Section 118(a) of the Negotiable Instruments Act - proof of due execution of cheque - burden of proof to rebut statutory presumption - appellate reappreciation of evidence

Proof of due execution of cheque - presumption under Section 118(a) of the Negotiable Instruments Act - Trial court's finding that Ext.A1 cheque was duly executed and that the plaintiff is entitled to the presumption of consideration under Section 118(a) of the N.I. Act - HELD THAT: - The plaintiff (PW1) gave direct evidence of the execution and issuance of Ext.A1 cheque, asserting that the defendant signed the cheque in his presence. The defendant denied signature and issuance in pleadings but did not take steps to prove forgery, loss, theft, or obtain expert opinion on the signature; no suggestion was put to PW1 during cross-examination that the signature was not of the defendant. Having proved execution, the plaintiff was entitled to the statutory presumption under Section 118(a) that the instrument is supported by consideration, shifting the burden to the defendant to rebut that presumption. The trial court's approach in drawing the presumption and treating the burden as on the defendant is in accordance with the statutory scheme and warranted no interference. [Paras 8, 9]

Finding that the cheque was duly executed is affirmed and the plaintiff is entitled to the presumption of consideration under Section 118(a).

Burden of proof to rebut statutory presumption - appellate reappreciation of evidence - Whether the defendant successfully rebutted the presumption of consideration on the evidence - HELD THAT: - The defendant relied on an earlier agreement (Ext.B2) and asserted that the liability was discharged and the original agreement returned. The trial court found, and this Court agrees, that there is no evidence to prove discharge of the liability or to explain how the defendant's cheque came into the plaintiff's possession; there was no evidence of theft, loss, countermanding of payment, or production of expert opinion to challenge the signature. PW1 gave a specific explanation for the amount leading to issuance of Ext.A1. On reappreciation, the appellate court applied the well settled principle that, while it may reappraise evidence, deference is due to trial court findings on oral testimony; the trial court's conclusion that the defendant failed to rebut the presumption is plausible on the record and therefore not liable to be disturbed. [Paras 11, 12, 13, 14]

Defendant failed to rebut the presumption of consideration; the trial court's finding is sustained.

Final Conclusion: The trial court's decree in favour of the plaintiff is affirmed; the findings on execution of the cheque and on failure to rebut the presumption under Section 118(a) are sustained and the appellate court dismisses the appeal, upholding the awarded interest rate.

Conviction under Section 138 of the Negotiable Instruments Act - Presumption under Section 139 of the Negotiable Instruments Act - Rebuttal by raising a probable defence - Dishonour of cheque issued as security - Revisional jurisdiction under Section 397 Cr.P.C. - Limited scope of re-appreciation of evidence in revision

Conviction under Section 138 of the Negotiable Instruments Act - Presumption under Section 139 of the Negotiable Instruments Act - Rebuttal by raising a probable defence - Dishonour of cheque issued as security - Validity of conviction under Section 138 NI Act on the basis of the evidence and statutory presumption - HELD THAT: - Both trial Court and appellate Court found that the complainant proved issuance of the cheques, signatures thereon and their dishonour. The accused did not dispute issuance or signatures, and her defence that only a smaller sum was borrowed (and returned) or that the cheques were security was not probabilized by cogent evidence. In view of Sections 118 and 139 (statutory presumption in favour of holder), and the settled principle that the accused must raise a probable defence on preponderance of probabilities to rebut the presumption, the Courts below rightly held the ingredients of Section 138 to be established. The judgment relied upon in the impugned order (M/s Laxmi Dyechem and authorities) was applied to hold that absence of a probable defence results in the statutory presumption operating in favour of the complainant. Consequently, the conviction under Section 138 was upheld. [Paras 7, 8, 13]

Conviction under Section 138 NI Act affirmed as the accused failed to rebut the presumption under Section 139 or probabilize the defence of exclusive repayment/security.

Revisional jurisdiction under Section 397 Cr.P.C. - Limited scope of re-appreciation of evidence in revision - Whether the High Court should exercise revisional jurisdiction to re-appreciate concurrent findings of fact and law recorded by the Courts below - HELD THAT: - The High Court observed that its revisional jurisdiction is supervisory and not equivalent to an appellate re-appreciation of evidence; interference is warranted only where there is a glaring error, miscarriage of justice or material irregularity. No such material irregularity, misappreciation or failure of justice was pointed out by the petitioner; the lower Courts had dealt with evidence and legal issues meticulously. Thus, in the absence of any demonstrable perversity or miscarriage, the High Court declined to re-appreciate the evidence and refused to interfere with concurrent findings. [Paras 14, 15, 16]

Revision petition dismissed; limited revisional jurisdiction precluded re-appreciation of concurrent findings absent a glaring illegality or miscarriage of justice.

Final Conclusion: Criminal revision petition dismissed; judgments of conviction and sentence under Section 138 NI Act affirmed. Petitioner directed to surrender to serve sentence; interim directions vacated and bail bonds cancelled.