TaxTMI Updates e-Newsletter
Oct 19,2020

Classification under Heading 2008 (CTH 2008) - Essential character test - Exclusion from Heading 2106 where Heading 2008 applies - Application of the First Schedule to the Customs Tariff for GST classification - GST rate determination based on tariff classification - Effective date of tax rate from 1st July 2017

Classification under Heading 2008 (CTH 2008) - Essential character test - Exclusion from Heading 2106 where Heading 2008 applies - Whether the pre-mix popcorn maize (corn kernels) packed with edible oil and salt is classifiable under CTH 20081990 rather than under CTH 2106. - HELD THAT: - The Authority examined the First Schedule to the Customs Tariff and the Explanatory Notes to Chapters 20 and 21. Chapter 20 covers preparations of vegetables, fruit, nuts or other edible parts of plants prepared or preserved by processes other than those specified in Chapters 7, 8 or 11. The Explanatory Notes to CTH 2008 state that other substances may be added provided they do not alter the essential character of the edible part of the plant. The product in question comprises corn kernels (seeds of the maize plant) which are cleaned and packed with edible oil, salt and flavouring agents and are specifically intended for use in popcorn vending machines; they do not undergo processes enumerated in Chapters 7, 8 or 11. Because the essential nature of the corn kernels as seeds is retained despite the addition of oil, salt and seasonings, the product falls within CTH 20081990. Heading 2106 expressly excludes preparations made from edible parts of plants of heading 2008 where the essential character is given by such parts; accordingly, the product is not classifiable under CTH 2106 but under CTH 20081990. [Paras 7, 10]

Pre-mix popcorn maize packed with edible oil and salt is classifiable under CTH 20081990.

GST rate determination based on tariff classification - Effective date of tax rate from 1st July 2017 - The rate of Goods and Services Tax applicable to the product classified under CTH 20081990 and its effective date. - HELD THAT: - Having held that the product falls under CTH 20081990, the Authority applied the rates notified for goods under the First Schedule to the Customs Tariff for purposes of GST. The product is covered by Sl. No. 40 of Schedule II of Notification No. 01/2017-C.T. (Rate) dated 28.06.2017 and the corresponding State notification, which prescribe CGST @6% and SGST @6% for the item. The Authority noted that this rate has been in effect from 1st July 2017 and has not changed since. [Paras 8, 10]

The product is leviable to CGST @6% and SGST @6%, the rate being effective from 1st July 2017.

Final Conclusion: The Advance Ruling holds that the applicant's pre-mix popcorn maize (corn kernels with edible oil, salt and seasonings) is classifiable under CTH 20081990 and is taxable at CGST 6% and SGST 6%, the applicable rate being effective from 1st July 2017.

Restriction of E-way bill generation for non-filing of GSTR-3B - application of Rule 138E of the CGST Rules, 2017 - interim injunctive relief against administrative coercive action - pending refund claims as a factor in granting interim relief

Restriction of E-way bill generation for non-filing of GSTR-3B - interim injunctive relief against administrative coercive action - pending refund claims as a factor in granting interim relief - Whether the EWB generation facility of the petitioner could be blocked pursuant to the e-mail dated 08.10.2020 and whether coercive action pursuant thereto should be restrained pending further orders. - HELD THAT: - The petition challenged an e-mail notifying prospective blockage of the petitioner's E-way Bill generation facility where GSTR-3B returns were alleged to be outstanding up to August, 2020. The petitioner contended that substantial refund claims under a Budgetary Support Scheme remain pending with the authorities and that the net position favours the petitioner, rendering the proposed blockage unjust and commercially ruinous. The respondent sought time to obtain instructions. Having heard learned counsel and on the material placed before the Court, the Court granted interim protection: it recorded that no coercive action shall be taken against the petitioner pursuant to the e-mail dated 08.10.2020 and directed that the petitioner's EWB portal shall not be blocked until further orders. The matter was listed for further consideration on 19th October, 2020 to enable the respondents to obtain instructions and for further adjudication on the merits.

Interim restraint granted: no coercive action or EWB blockage pursuant to the e-mail dated 08.10.2020 until further orders; matter listed on 19.10.2020.

Final Conclusion: The Court granted interim protection restraining any coercive action including blocking of the petitioner's EWB generation facility under the impugned e-mail dated 08.10.2020 and listed the matter for further hearing on 19th October, 2020.

Rejection of appeal as barred by limitation - condonation of delay - service of order under Section 73(9) of the CGST Act, 2017 - electronic service via GST portal - duty to verify service before rejecting condonation - remand for fresh consideration

Rejection of appeal as barred by limitation - condonation of delay - duty to verify service before rejecting condonation - Appellate authority erred in rejecting the appeal as time-barred without verifying whether the assessing authority's order was served physically or electronically. - HELD THAT: - The Court found that the petitioner consistently asserted non-receipt of the order dated 27.06.2019 under Section 73(9) and that the appellate authority rejected the appeal on limitation grounds without conducting any independent verification of service or of the petitioner's contention that the order was not uploaded on the GST portal. Given the factual contention regarding non-service and the availability of electronic means of communication, the appellate authority ought to have examined whether service had in fact taken place before refusing condonation of delay. Deciding the application for condonation solely on the basis of pleadings, without such verification, was held to be improper and legally unsustainable. [Paras 6, 7]

Impugned order rejecting the appeal as barred by limitation is set aside for want of proper consideration of service and condonation.

Remand for fresh consideration - electronic service via GST portal - service of order under Section 73(9) of the CGST Act, 2017 - Matter remitted to the appellate authority to verify service and to decide the application for condonation of delay on merits after due verification. - HELD THAT: - The Court directed that the appellate authority (respondent no.1) must verify whether the Section 73(9) order was duly served either physically or electronically (including by upload to the GST portal) and then consider the petitioner's application for condonation and the reply to the show-cause notice dated 04.03.2020 on its own merits. The remand requires factual verification of service and fresh adjudication of the condonation request rather than an adjudication on limitation based solely on the record before the authority. [Paras 8]

Proceedings remitted to the appellate authority for factual verification of service and fresh consideration of the condonation application on merits.

Final Conclusion: Impugned order dated 30.06.2020 rejecting the appeal as barred by limitation is set aside and the matter is remitted to the appellate authority to verify service (physical and electronic) of the Section 73(9) order and to decide the petitioner's application for condonation of delay on its merits.

Refund of accumulated input tax credit on account of inverted tax structure - conditions for concessional-rate supplies to exporters under the notifications - burden of proof for compliance with notification conditions - requirement of intimation/acknowledgement to jurisdictional tax officer - effect of procedural circular on withholding refunds for minor lapses

Refund of accumulated input tax credit on account of inverted tax structure - conditions for concessional-rate supplies to exporters under the notifications - requirement of intimation/acknowledgement to jurisdictional tax officer - Refund claim under Section 54 of the CGST Act for Input Tax Credit accumulated in November-2017 was inadmissible for non-compliance with conditions (v) and (ix) of Notifications No.40/2017 and No.41/2017 dated 23.10.2017. - HELD THAT: - The notifications permit supplies to exporters at concessional rates subject to specified conditions including (v) that the registered recipient shall place an order at concessional rate and provide a copy to the jurisdictional tax officer of the supplier, and (ix) that upon export the registered recipient shall provide the shipping bill/bill of export and proof of export to the supplier and the supplier's jurisdictional tax officer. The adjudicating authority found, and the Commissioner (Appeals) concurred, that these conditions were not complied with in the present case. The appellant's contention that copies of purchase orders, shipping bills or bills of lading had been submitted to the Range Office was not substantiated by dated, stamped acknowledgements from the department. The Court placed the burden of proof on the appellant to demonstrate when and how the documents were furnished to the department; absence of departmental acknowledgement or other substantial corroboration meant the conditions in the notifications remained unfulfilled. Having found non-compliance with the mandatory conditions precedent for concessional treatment and linked refund entitlement, the adjudicating authority's rejection of the refund claim was held to be legally sustainable. [Paras 7]

Refund claim rejected for November-2017 due to non-compliance with conditions (v) and (ix) of Notifications No.40/2017 and No.41/2017.

Burden of proof for compliance with notification conditions - effect of procedural circular on withholding refunds for minor lapses - The appellant's reliance on procedural circulars and assertion of submission by speed post/email did not relieve the statutory requirement of proving compliance; minor procedural lapses could not be invoked to override the need for departmental acknowledgement in this case. - HELD THAT: - The appellant invoked Circular No.37/11/2018-GST which advises not to withhold refunds for minor procedural lapses. The Commissioner (Appeals) noted the circular's clarifications regarding supplies to merchant exporters and optionality of concessional rates, but held that the circular does not absolve a claimant from satisfying the specific documentary and intimation conditions set out in the notifications. The appellant failed to produce stamped, dated acknowledgement or other convincing evidence that the required intimation/documents were actually received by the jurisdictional office within the requisite time; mere assertion of sending documents by speed post or email, without corroborative departmental receipt, was insufficient. Consequently the circular could not be applied to validate the claim where the threshold conditions remained unproven. [Paras 6, 7]

Circular clarifications do not cure absence of required departmental acknowledgement; therefore the procedural argument did not entitle the appellant to refund.

Final Conclusion: The appeal is rejected. The refund claim for November-2017 is not allowable because the appellant failed to prove compliance with the mandatory intimation and export-document conditions in Notifications No.40/2017 and No.41/2017; reliance on procedural circulars and uncorroborated transmission of documents did not suffice to overturn the rejection.

Charitable purpose and advancement of general public utility - proviso to Section 2(15) excluding entities carrying on trade, commerce or business or rendering services for consideration - exemption under Section 11 of the Income tax Act - statutory powers and functions of area/urban development authorities under the Gujarat Town Planning Act - sale of up to 15% of land under town planning schemes to raise funds for infrastructure is not profiteering - regulatory fees/cess incidental to statutory objects do not convert activity into trade or business - principle of mutuality and CBDT guidance on distinguishing commercial activity from public utility

Charitable purpose and advancement of general public utility - proviso to Section 2(15) excluding entities carrying on trade, commerce or business or rendering services for consideration - statutory powers and functions of area/urban development authorities under the Gujarat Town Planning Act - regulatory fees/cess incidental to statutory objects do not convert activity into trade or business - Whether the activities of the assessee, a statutory area/urban development authority, are commercial or are charitable/public utility in nature so as to attract the proviso to Section 2(15) and deny exemption. - HELD THAT: - The Court applied the reasoning of Ahmedabad Urban Development Authority (Division Bench) and examined the statutory scheme under the Gujarat Town Planning Act which constitutes the authority, vests it with powers to plan, execute town planning schemes, levy fees and to sell a limited percentage of land to fund infrastructural works, and keeps the authority under State control with audited accounts. Sale of plots up to the statutory 15% is intended to generate resources for providing public amenities and, read together with the Act, is not an exercise in profiteering. Collection of regulatory fees/cess is incidental to the statutory objects and does not amount to rendering services in the nature of trade, commerce or business. The Court held that mere incidental receipts or surpluses arising from carrying out statutory functions do not convert the authority's activities into commercial activities for the purpose of the proviso; the CBDT guidance and precedent require an inquiry into nature, scope, extent and frequency, and on the facts the activities remain charitable/general public utility.

Activities held to be charitable/for general public utility; proviso to Section 2(15) not attracted.

Exemption under Section 11 of the Income tax Act - sale of up to 15% of land under town planning schemes to raise funds for infrastructure is not profiteering - regulatory fees/cess incidental to statutory objects do not convert activity into trade or business - Whether various receipts of the assessee (capital receipts/grants, development fund receipts, capital expenditure funded by such receipts) are eligible for exemption under Section 11. - HELD THAT: - Relying on the conclusion that the authority's activities are charitable and not commercial, the Court held that receipts received in furtherance of the statutory objects - including government grants, amounts realized from sale of designated plots and development fund receipts - fall within the ambit of income applied for charitable/public utility purposes and are therefore entitled to exemption under Section 11. The Court followed the Division Bench reasoning that the statutory framework prescribes application of such funds for development of the urban area, subjects accounts to audit and state control, and thus the receipts cannot be treated as income from trade or business.

Receipts held eligible for exemption under Section 11; assessee entitled to exemption.

Final Conclusion: The appeal is dismissed. Substantial questions of law are answered in favour of the assessee and against the Revenue; the assessee, being a statutory area/urban development authority whose activities are for public utility and regulated by the Town Planning Act, is not covered by the proviso to Section 2(15) and is entitled to exemption under Section 11 for the receipts in issue.

Penalty under section 271AA - failure to keep and maintain transfer pricing documentation - failure to report international transactions in the return of income - submission of Form 3CEB during assessment proceedings - applicability of amended provisions w.e.f. 1st April 2012

Penalty under section 271AA - failure to keep and maintain transfer pricing documentation - submission of Form 3CEB during assessment proceedings - Validity of levy of penalty under section 271AA for Assessment Year 2011-12 in view of assessee's maintenance of information and submission of transfer pricing documentation - HELD THAT: - CIT(A) found that the assessee had kept and maintained information concerning international transactions in its transfer pricing report and had furnished a Form 3CEB to the Transfer Pricing Officer during assessment proceedings; these facts were held to constitute maintenance and disclosure of the prescribed documents and information. The AO's conclusion that the assessee failed to keep and maintain information (relying on a special auditor's report and the fact that Form 3CEB was not filed by the specified date) was examined but Revenue did not point out any infirmity in the CIT(A)'s findings before the Tribunal. The Tribunal noted that the ratio relied upon by Revenue was not applicable on the facts. Having regard to the totality of the material - including that the transfer pricing report and Form 3CEB were available to the TPO during assessment and that subsequent adjustment was ultimately deleted by the Tribunal - the appellate forum found no reason to interfere with the deletion of penalty by the CIT(A).

The deletion of penalty under section 271AA by the CIT(A) is affirmed and Revenue's appeal is dismissed.

Failure to report international transactions in the return of income - applicability of amended provisions w.e.f. 1st April 2012 - Whether the ground of 'failure to report international transactions' (as introduced by amendment with effect from 1 April 2012) could sustain penalty for Assessment Year 2011-12 - HELD THAT: - The assessee contended that the penal consequence for failure to report international transactions in the return was introduced by amendment effective 1 April 2012 and therefore could not be invoked for AY 2011-12. The Tribunal observed the contention raised by the assessee and recorded that Revenue did not successfully impugn the factual findings of the CIT(A) that the requisite information was maintained and furnished during assessment proceedings. The Tribunal did not find it necessary to apply the amended provision to the facts after accepting the factual conclusion that there was no failure in reporting or maintenance that would attract penalty for the year in question.

The Tribunal did not uphold any charge based on failure to report international transactions for AY 2011-12 and found no basis to disturb the deletion of penalty.

Final Conclusion: The Tribunal upheld the order of the CIT(A) deleting the penalty under section 271AA for Assessment Year 2011-12, concluding that the assessee had maintained and made available the transfer pricing documentation (including Form 3CEB) during assessment proceedings and that there was no reason to interfere with the appellate finding.

Disallowance under section 40(a)(ia) - trade incentives/trade offers to distributors - trade price protection as revenue expenditure under section 37(1) - free of cost supplies - revenue v. capital characterisation - precedent in assessee's own case and coordinate-bench consistency

Disallowance under section 40(a)(ia) - trade incentives/trade offers to distributors - Disallowance under section 40(a)(ia) in respect of trade incentives paid to distributors (including HCL Infosystems Ltd.) for A.Y. 2008-09 was not warranted. - HELD THAT: - The Tribunal examined the nature of the arrangements between the assessee and its distributors and accepted the finding in the co ordinate bench decision in the assessee's own case that the relationship was principal to principal and the discounts were sales promotion incentives and not commission attracting withholding under section 194H or payment for technical services under section 194J. Revenue did not place any material to distinguish or show that the earlier coordinate bench decision has been set aside. Applying that precedent and on the identical facts, the Tribunal held that absence of TDS did not mandate disallowance under section 40(a)(ia) and set aside the AO's addition. [Paras 8, 9]

Addition under section 40(a)(ia) disallowing trade incentives for A.Y. 2008-09 deleted; appeal allowed.

Disallowance under section 40(a)(ia) - trade incentives/trade offers to distributors - precedent in assessee's own case and coordinate-bench consistency - Disallowance under section 40(a)(ia) in respect of trade incentives for A.Y. 2012-13 was not called for. - HELD THAT: - The Tribunal applied the same reasoning adopted for A.Y. 2008-09 - namely that the payments were trade incentives and not payments attracting withholding under sections 194H/194J - and followed the coordinate bench precedents in the assessee's own earlier years. Revenue did not controvert the factual identity or show any contrary judicial pronouncement. For similar reasons as decided for A.Y. 2008-09, the disallowance was held to be unjustified. [Paras 13]

Addition under section 40(a)(ia) disallowing trade incentives for A.Y. 2012-13 deleted; ground allowed.

Trade price protection as revenue expenditure under section 37(1) - trade incentives/trade offers to distributors - precedent in assessee's own case and coordinate-bench consistency - Disallowance of expenditure characterised as 'trade price protection' for A.Y. 2012-13 was not warranted and such expenditure is allowable as revenue expenditure. - HELD THAT: - The Tribunal relied on the coordinate bench decision in the assessee's own case for A.Y. 2010 11 (followed in A.Y. 2011 12), which recognised trade price protection as a market practice and a commercial expedient designed to protect distributors against price declines. The assessee had filed requisite trade scheme details and confirmations; Revenue did not demonstrate distinguishing facts or any adverse higher court ruling. Applying that precedent, the Tribunal concluded the expenditure was incurred wholly and exclusively for business and allowable under section 37(1), and set aside the AO's disallowance. [Paras 15, 17, 18]

Disallowance in respect of trade price protection for A.Y. 2012-13 deleted; ground allowed.

Free of cost supplies - revenue v. capital characterisation - marketing expenditure - precedent in assessee's own case and coordinate-bench consistency - Disallowance of marketing expenditure on handsets given free of cost to employees, dealers and After Market Service Centres for A.Y. 2012-13 was not justified. - HELD THAT: - The Tribunal referred to its coordinate bench decisions in the assessee's own earlier years which held that handsets given free of cost to employees, dealers and others were business expenditure and properly reduced from inventory rather than being capitalised. Those earlier findings (also affirmed in related years and not shown to be disturbed) were held applicable on identical facts. The Tribunal therefore held that the AO's characterisation as capital or otherwise was not sustainable and set aside the disallowance. [Paras 21, 22, 23]

Disallowance relating to free of cost handsets for A.Y. 2012-13 deleted; grounds allowed.

Final Conclusion: The Tribunal followed coordinate bench precedents in the assessee's own case and, finding the facts identical and no contrary authority produced by Revenue, set aside the additions and allowed the appeals for A.Y. 2008 09 and A.Y. 2012 13; both appeals are allowed.

Requirement to specify limb of penalty in notice - Notice under Section 274 - Penalty under Section 271(1)(c) - Concealment of income vs furnishing inaccurate particulars - Binding effect of SSA's Emerald Meadows and Manjunatha Cotton precedents

Requirement to specify limb of penalty in notice - Notice under Section 274 - Penalty under Section 271(1)(c) - Concealment of income vs furnishing inaccurate particulars - Validity of penalty proceedings where the notice under section 274 did not specify which limb of section 271(1)(c) (concealment of income or furnishing inaccurate particulars) was invoked. - HELD THAT: - The Tribunal examined the notices issued under section 274 read with section 271(1)(c) and found that the inappropriate words were not struck off and the notice did not specify whether penalty proceedings were initiated for concealment of income or for furnishing inaccurate particulars. The Assessing Officer's penalty order proceeded on a limb (furnishing inaccurate particulars) different from the charge expressed in the notice (concealment), and the notice's last line referred only to section 271 without specifying section 271(1)(c). The Tribunal upheld the view taken by the CIT(A) that such lack of clarity offends principles of natural justice and renders the penalty proceedings bad in law. The Tribunal applied the Division Bench decision in CIT v. Manjunatha Cotton & Ginning Factory and the subsequent affirmance by the Supreme Court in CIT v. SSA's Emerald Meadows, holding those authorities binding and squarely covering the present case. Following those precedents, the penalty levied under section 271(1)(c) was liable to be deleted where the notice failed to specify the precise limb under which penalty was proposed.

Penalty under section 271(1)(c) deleted as the notice under section 274 failed to specify the limb of section 271(1)(c) on which proceedings were initiated; CIT(A)'s order deleting the penalty upheld.

Final Conclusion: Revenue's appeals dismissed; orders of the CIT(A) deleting the penalty under section 271(1)(c) for assessment years 2010-11 and 2011-12 are upheld pursuant to the requirement that a notice under section 274 must specify the limb of section 271(1)(c), as recognised in Manjunatha Cotton and affirmed in SSA's Emerald Meadows.

Reopening of assessment - reassessment order invalid for non-disposal of objections to notice under section 148 - change of opinion - nexus between borrowed funds and income - allowability of interest expenditure as business expense where borrowed funds used for business - quashing of reassessment order

Reopening of assessment - reassessment order invalid for non-disposal of objections to notice under section 148 - quashing of reassessment order - Validity of reassessment proceedings where the Assessing Officer passed reassessment order without disposing of the assessee's objections to the reasons recorded for issuance of notice under section 148. - HELD THAT: - The Tribunal examined the assessee's contention that objections filed in response to the reasons for reopening were not disposed of by a speaking order before the AO completed reassessment. Following the binding decision of the Hon'ble Rajasthan High Court and the Tribunal's earlier view in Manoj Dubey, the Court held that reassessment completed without first disposing of the objections to the reopening notice is unsustainable. The Tribunal noted the divergence of views in other High Courts but applied the ratio of the jurisdictional High Court to conclude that non-disposal of the objections before finalizing reassessment vitiates the reassessment proceedings. Consequently the reassessment order passed under section 147 r.w.s. 143(3) was quashed and set aside. [Paras 5]

Reassessment order quashed for want of disposal of objections to the notice under section 148; appeal allowed on this ground.

Nexus between borrowed funds and income - allowability of interest expenditure as business expense where borrowed funds used for business - Whether the disallowance of interest (excess claimed against income from other sources) was justified where part of the borrowed funds was utilized as capital contribution in the assessee's business/partnership from which business profits were earned. - HELD THAT: - The Tribunal found on the material before it that borrowed funds had not been fully utilized to earn the interest income shown under 'income from other sources' and that part of the borrowings was applied as capital contribution in the proprietorship concern and partnership firm which generated business profits. The Tribunal accepted that the assessee had erred in claiming the whole interest expenditure under one head instead of apportioning it, but held that where a nexus between borrowed funds and the relevant income streams is established, the expenditure is allowable against business income to the extent attributable to business use. Following the Coordinate Bench decision (Govind Sharan Gupta) and applicable precedent, the Tribunal deleted the disallowance of interest. [Paras 8]

Disallowance of interest deleted; appeal allowed on merits of allowability of interest as business expenditure to the extent attributable to business use.

Final Conclusion: Following the binding decision of the jurisdictional High Court and Tribunal precedent, reassessment completed without disposing of the assessee's objections to the reopening notice was quashed; on merits the disallowance of interest was deleted as part of the borrowed funds was applied to business, and the interest is allowable to that extent. Appeal allowed.

Deduction under Section 80P(2)(d) - Co-operative Bank as a form of Co-operative Society - Interest income from investments with co-operative societies - Admissibility of public-domain / statutory registration certificate as evidence at appellate stage

Deduction under Section 80P(2)(d) - Co-operative Bank as a form of Co-operative Society - Interest income from investments with co-operative societies - Claim for deduction of interest received from Jaipur Central Cooperative Bank under section 80P(2)(d) was allowable on the facts. - HELD THAT: - The Assessing Officer disallowed the deduction on the ground that the payer, Jaipur Central Cooperative Bank, was not proved to be a co-operative society. The assessee produced a registration certificate issued by the Registrar of Cooperative Societies showing that Jaipur Central Cooperative Bank is registered as a Cooperative Society. The Tribunal accepted that a co-operative bank is a species of co-operative society and, in view of binding decisions of coordinate Benches and the High Courts, interest derived by a co-operative society from investments with another co-operative society is allowable as a deduction under section 80P(2)(d). Consequently, once Jaipur Central Cooperative Bank was established to be a co-operative society, the interest received by the assessee qualified for deduction under section 80P(2)(d), and the disallowance confirmed by the CIT(A) was not sustainable.

Deduction under section 80P(2)(d) allowed in respect of interest received from Jaipur Central Cooperative Bank; disallowance deleted.

Admissibility of public-domain / statutory registration certificate as evidence at appellate stage - The registration certificate issued by the Registrar of Cooperative Societies was admissible at the appellate stage despite not having been produced before the authorities below. - HELD THAT: - The Revenue objected that the certificate was additional evidence not produced earlier. The Tribunal observed that the certificate is an official document issued by the Registrar and is in the public domain; therefore its production at the appellate stage could not be legitimately disputed. The Tribunal found no substance in the objection and proceeded to examine the substantive claim in light of the certificate and relevant precedents.

Objection to the late production of the Registrar's certificate overruled; the certificate was accepted and relied upon.

Final Conclusion: The assessee's appeal is allowed: the interest received from Jaipur Central Cooperative Bank is deductible under section 80P(2)(d) after accepting the Registrar's registration certificate as proof that the bank is a co-operative society; the addition/disallowance made by the AO and confirmed by the CIT(A) is deleted.

Mandatory requirement of issuance of notice under Section 143(2) - Validity of reopening under Section 147 in absence of notice under Section 143(2) - Assumption of jurisdiction for reopening - Use of RTI-disclosed records to establish absence of statutory notice

Mandatory requirement of issuance of notice under Section 143(2) - Validity of reopening under Section 147 in absence of notice under Section 143(2) - Use of RTI-disclosed records to establish absence of statutory notice - Reopening under Section 147 quashed because no notice under Section 143(2) was issued to the assessee - HELD THAT: - The Tribunal examined the records supplied to the assessee under the RTI Act and the letter of the Assessing Officer, none of which showed issuance or service of a notice under Section 143(2). The Commissioner (Appeals)'s suggestion of possible misplacement of pages in transit was rejected as the RTI disclosure consisted of the complete files as applied for, and the AO's own communication listed all notices issued but did not include any notice under Section 143(2). Relying on the ratio of the jurisdictional High Court which, in turn, applied the Apex Court's reasoning that the procedural requirements of Section 142 and Section 143 (including subsection (2)) must be followed and cannot be treated as mere procedural irregularity, the Tribunal held that where the mandatory condition of issuance of notice under Section 143(2) is not satisfied, the assumption of jurisdiction for reopening under Section 147 is not sustainable. For these reasons the reopening proceedings were set aside. [Paras 3, 5]

The reopening under Section 147 was quashed and the assessee's appeal allowed for Assessment Year 2010-11.

Final Conclusion: On the facts and materials placed before it (including RTI-disclosed records and the AO's letter) and following binding precedents on the mandatory nature of notices under Section 143(2), the Tribunal concluded that no such notice was issued and therefore the reopening under Section 147 was invalid; the appeal was allowed.

Exemption under section 11 of the Income-tax Act - Registration under section 12AA - Charging of excess fees and its impact on charitable status - Effect of interim orders of the High Court on assessment proceedings - Principle in TMA Pai regarding institutional fixation of fees

Exemption under section 11 of the Income-tax Act - Charging of excess fees and its impact on charitable status - Whether denial of exemption under section 11 on the sole ground of alleged collection of fees in excess of fees prescribed by the authority is sustainable. - HELD THAT: - The Assessing Officer denied the benefit of section 11 treating the trust as an AOP on the basis that the trust collected fees over prescribed limits and the surplus was used for expansion of infrastructure. The Tribunal notes that the trust is registered under section 12AA and there is no finding that activities are beyond the objects of the trust or that the trust pursued commercial activities for profit. The writ petitions filed by the assessee against the fee fixation are pending before the Hon'ble High Court of Orissa and interim orders allow the trust to retain the extra fees till final disposal, with a direction that if the trust fails in the writs the extra fees shall be adjusted towards the students' fees. Having regard to those interim orders and the absence of any established violation under sections 11 to 13, the Tribunal held that the benefit of section 11 cannot be denied to the assessee solely on the allegation of charging excess fees. The Tribunal expressly refrained from adjudicating the substantive correctness of the allegation of overcharging, leaving that issue to the pending writ proceedings. [Paras 11, 12, 13]

Denial of exemption under section 11 on the ground of alleged excess fee collection is not sustainable; exemption allowed.

Registration under section 12AA - Exemption under section 11 of the Income-tax Act - Whether the Assessing Officer could withdraw exemption benefits despite the trust's valid registration under section 12AA without establishing statutory violations. - HELD THAT: - The Tribunal observed that the assessee's registration under section 12AA was not disputed and there was no finding that activities were outside the objects of the trust. The AO cannot withdraw the benefit of section 11 merely by alleging excess fee collection unless a violation as contemplated by the statute is established. Reliance was placed on the principle that administrative authorities do not have unfettered power to withdraw registration or deny exemption without statutory basis. In these circumstances, and given the pending litigation and interim orders, the Tribunal held that the AO's denial was not justified. [Paras 12, 13]

Benefit of registration under section 12AA and attendant exemption under section 11 cannot be withdrawn absent established statutory violation; exemption retained.

Consequential disallowance of remuneration - Exemption under section 11 of the Income-tax Act - Whether the disallowance of salary paid to the managing trustee as a consequence of denial of exemption is sustainable. - HELD THAT: - The Assessing Officer disallowed salary paid to the managing trustee because he had denied the trust's exemption under section 11. Having held that denial of exemption was not sustainable, the Tribunal found that the consequential disallowance of the salary also could not be sustained. There was no independent finding that the salary itself was payable in violation of the statute or not for charitable purposes. [Paras 16]

Disallowance of salary paid to the managing trustee is not justified; salary to be allowed.

Final Conclusion: The Tribunal allowed the appeal for assessment year 2010- 2011, restoring the benefit of exemption under section 11 to the registered trust in view of pending High Court interim orders and the absence of established statutory violation, and directed deletion of the consequential disallowance of salary paid to the managing trustee.

Condonation of delay in filing appeal - exercise of revisional jurisdiction under section 263 of the Income tax Act - failure of Assessing Officer to make inquiries - order erroneous and prejudicial to the interests of the revenue - computation of long term capital gains - deduction under section 54F of the Income tax Act - deduction under section 54 of the Income tax Act - remand for de novo assessment

Condonation of delay in filing appeal - Delay in filing the appeals was condoned. - HELD THAT: - The Tribunal examined the sequence of events including service of the impugned revisional orders, the subsequent completion of assessments by the Assessing Officer pursuant to those revisional orders, and the assessee's explanation that conflicting advice from successive tax consultants led to the delay in instituting appeals against the Pr.CIT's orders. On the facts and having accepted that the different professional advice caused the delay, the Tribunal exercised its discretion to condone the delay in filing the appeals. [Paras 6]

Delay of 266 and 295 days in filing the appeals is condoned and the appeals admitted.

Exercise of revisional jurisdiction under section 263 of the Income tax Act - failure of Assessing Officer to make inquiries - order erroneous and prejudicial to the interests of the revenue - Pr.CIT was justified in invoking revisional jurisdiction under section 263 on the ground that the Assessing Officer failed to make necessary enquiries rendering the assessment orders erroneous and prejudicial to revenue. - HELD THAT: - The Tribunal reviewed the assessment records and the office note and found that the Assessing Officer had not made clear what enquiries were conducted regarding the claim for deduction. The AO's initiation of rectification proceedings under section 154 to correct computation of long term capital gains reinforced the inference that adequate enquiries had not been made. Applying established precedent that a failure by the AO to inquire into matters which the circumstances call for makes an assessment order susceptible to revision, the Tribunal held that the Pr.CIT rightly concluded the orders were erroneous and prejudicial to the revenue and was therefore justified in exercising revisional jurisdiction. [Paras 18, 19]

Invocation of revisional jurisdiction by the Pr.CIT under section 263 was justified on the record.

Computation of long term capital gains - deduction under section 54F of the Income tax Act - deduction under section 54 of the Income tax Act - remand for de novo assessment - Computation of LTCG and entitlement to exemption under section 54/54F were remanded to the Assessing Officer for de novo consideration; the AO must determine the correct provision (section 54 or section 54F) and recompute gains accordingly without being influenced by Pr.CIT's observations. - HELD THAT: - Having upheld the Pr.CIT's conclusion that the assessments were rendered erroneous by the AO's failure to make necessary enquiries, the Tribunal directed that the assessor complete the assessments afresh. The Tribunal emphasised that if the assessee's claim properly falls under section 54 rather than section 54F, the assessment must be completed under the correct statutory provision, since the tax liability depends on the applicable law and the facts. The Tribunal further held that other observations in the revisional order should not prejudice the AO's fresh consideration; all issues relating to characterization of the asset as a residential house, admissibility of various costs, and entitlement to exemption shall be open for fresh enquiry and decision by the AO. [Paras 20, 21, 22]

Matter remitted to the Assessing Officer for de novo computation of long term capital gains and adjudication of the claim under section 54 or section 54F as may be appropriate.

Final Conclusion: The Tribunal condoned the delay in filing the appeals, upheld the Pr.CIT's exercise of revisional jurisdiction under section 263 due to the AO's failure to make requisite enquiries, and modified the revisional orders by remanding the computation of long term capital gains and the claim for exemption under section 54/54F to the Assessing Officer for fresh consideration; the appeals are partly allowed.

Deduction under section 80IC - profits and gains derived from an industrial undertaking - nexus between service income and manufacture of software - composite/turnkey contracts - supply and services interlinked - classification of service receipts as part of business income eligible for deduction

Deduction under section 80IC - nexus between service income and manufacture of software - composite/turnkey contracts - supply and services interlinked - Whether service fees received by the assessee qualify as profits derived from the industrial undertaking engaged in manufacture of computer software and are eligible for deduction under section 80IC for AY 2013-14. - HELD THAT: - The Tribunal examined the nature of the contracts and the break-up of income and concluded that the service receipts arose from activities (installation, testing, commissioning, validation, training, support and related services) that were integral to the supply of the software under composite/turnkey contracts. The contracts showed payment for supply was linked to issuance of Provisional and Final Acceptance Certificates and validation/acceptance tests, thereby demonstrating that the supply and services were inter linked and that the system would not be operational without the services. The Tribunal placed reliance on its decision in the assessee's own case for AY 2014 15, where identical service receipts were held to have a sufficient nexus with the manufacturing/supply activity and therefore to be profits derived from the industrial undertaking. Applying that reasoning to the facts of AY 2013 14, the Tribunal found that the AO and the CIT(A) erred in treating the service activity as an independent, separate activity not connected to the manufacture/supply of software. Consequently, the service fees were to be regarded as part of the profits and gains derived from the eligible business and eligible for deduction under section 80IC.

Service fees of Rs. 62,13,596 are held to have the requisite nexus with the manufacture/supply of software and qualify for deduction under section 80IC for AY 2013 14; the appeal is allowed.

Final Conclusion: The Tribunal allowed the appeal and held that the service income in question is integrally connected with the supply/manufacture of software under composite contracts and therefore qualifies as profits derived from the industrial undertaking eligible for deduction under section 80IC for Assessment Year 2013 14.

Valuation of shares by Discounted Cash Flow (DCF) method - assessing officer's power to scrutinize valuation report but not to change the method chosen by the assessee - Rule 11UA choice between DCF method and net asset/book value method - onus on assessee to prove correctness of DCF projections, discounting factor and terminal value - reliance on facts and data available on the valuation date; future actuals not to be used to impugn projections - remand to Assessing Officer for fresh adjudication with option to obtain independent valuer's determination - taxability under section 56(2)(viib) where share issue at premium exceeds fair market value

Valuation of shares by Discounted Cash Flow (DCF) method - assessing officer's power to scrutinize valuation report but not to change the method chosen by the assessee - onus on assessee to prove correctness of DCF projections, discounting factor and terminal value - reliance on facts and data available on the valuation date; future actuals not to be used to impugn projections - remand to Assessing Officer for fresh adjudication with option to obtain independent valuer's determination - Whether the Assessing Officer was justified in rejecting the assessee's DCF-based valuation and adopting NAV/Book value method leading to addition under section 56(2)(viib), or whether the matter required fresh examination by the AO following DCF methodology. - HELD THAT: - The Tribunal followed the precedent of the Hon'ble Bombay High Court and coordinate bench decisions holding that where the assessee has opted for the DCF method under Rule 11UA(2), the AO may scrutinize the valuation report and, if dissatisfied, record reasons and either determine a fresh valuation himself or obtain a valuation from an independent valuer to confront the assessee; however the AO cannot change the valuation method selected by the assessee to NAV/Book value. Scrutiny must be confined to facts and data available on the valuation date and actual results from subsequent years cannot be used to impugn the projections made at that date. The primary onus to justify the DCF assumptions (projections, discounting factor, terminal value) lies on the assessee, who must support those inputs by empirical data, industry norms or other objective indicia. Given that the AO in the present case discarded the DCF report and adopted a different method without the mandated scrutiny and without recording reasons for rejecting the DCF basis, the proper course is to set aside the orders below and restore the matter to the AO to re-examine the valuation in accordance with the directions in the cited coordinate-bench and High Court authority, including the power to call an independent valuer but insisting that the basis remain DCF.

Order of ld. CIT(A) set aside; matter remitted to Assessing Officer for fresh decision in accordance with the law that the AO may scrutinize but not change the DCF method chosen by the assessee, with directions to record reasons if rejecting the report and to consider only facts available on the valuation date.

Final Conclusion: Appeal allowed for statistical purposes by setting aside the CIT(A) order and remanding the valuation issue to the Assessing Officer for fresh adjudication in accordance with the Tribunal's directions; the stay application is dismissed.

Rectification of mistake apparent from the record - time limit under section 254(2) of the Income tax Act - power of the Appellate Tribunal to amend its order - non availability of power to condone delay under section 254(2) - effect of subsequent judicial decision on earlier tribunal orders

Rectification of mistake apparent from the record - time limit under section 254(2) of the Income tax Act - power of the Appellate Tribunal to amend its order - non availability of power to condone delay under section 254(2) - Whether the Tribunal can entertain and rectify its earlier order after the statutory six month period prescribed by section 254(2) has expired. - HELD THAT: - The Tribunal has no inherent power to extend or read into the statutory time limit prescribed by section 254(2); it is a creature of statute and must act within the authority conferred. Section 254(2) permits the Appellate Tribunal to amend an order to rectify any mistake apparent from the record only within six months from the end of the month in which the order was passed. The order in ITA No.409/Coch/2016 was dated 24th October, 2016 and the six month period expired on 30th April, 2017. The miscellaneous application was filed on 30th September, 2019, well beyond the statutory period. Reliance on subsequent High Court decisions which altered the legal position does not empower the Tribunal to extend the statutory limitation; the Tribunal cannot condone delay where the statute prescribes a binding time bar. The conclusion is consistent with the binding character of the time limit and the cited authority of the Bombay High Court on the point. [Paras 5, 6, 7, 8]

The miscellaneous application filed after the expiry of the six month period under section 254(2) cannot be entertained and is dismissed.

Final Conclusion: The Revenue's miscellaneous application under section 254(2) filed beyond the statutory six month period is barred and therefore dismissed; the Tribunal cannot amend its 24th October 2016 order after the prescribed time limit.

Royalty - business income - copyrighted article - transfer of copyright - interpretation of treaty terms - Article 3(2) of the DTAA - retrospective amendment and treaty primacy

Royalty - business income - copyrighted article - transfer of copyright - Characterisation of amounts received for sale of off the shelf software and for maintenance and support (including upgrades) - whether they constitute "royalty" or are business receipts. - HELD THAT: - The Tribunal examined the distribution agreements and found that the distributors were granted only a non exclusive right to market and distribute the software (the copyrighted article) and were not given any rights in the underlying copyright, source code, or any authority to reproduce, modify or commercially exploit the intellectual property. The software and its updates/sub releases were supplied for resale/distribution to end users as copyrighted articles; no right to use the copyright embedded in the software was transferred. On that basis, and following its earlier coordinate bench decisions in the assessee's own cases for other assessment years, the Tribunal concluded that receipts for sale of the software and for maintenance/upgrades are receipts for the sale/distribution of a copyrighted article and for providing related business services, and therefore constitute business income and not "royalty" under Article 12 of the India Finland DTAA (and consequently are not to be treated as royalty under the Act). The Tribunal also noted consistent precedent holding that sale of a copyrighted article without transfer of the copyright does not amount to royalty.

Amounts received for sale of off the shelf software and for maintenance/support (including upgrades) are business income and not "royalty" under the India Finland DTAA (and not royalty for the assessee).

Article 3(2) of the DTAA - interpretation of treaty terms - retrospective amendment and treaty primacy - Whether the statutory Explanations (4, 5 and 6 to section 9(1)(vi)) inserted by amendment to the Income tax Act can be read into the definition of "royalty" in the India Finland tax treaty by operation of Article 3(2). - HELD THAT: - The Tribunal held that Article 3(2) provides that terms not defined in the treaty take their meaning under domestic law for the purposes of the taxes to which the treaty applies; however, where a term is specifically and exhaustively defined in the treaty, subsequent unilateral amendments to domestic law cannot alter the treaty definition. The Tribunal observed that the definition of "royalty" in Article 12(3)(a) of the India Finland DTAA is exhaustive and no corresponding amendment was made to the treaty when Explanations were inserted into the domestic statute. Therefore the retrospective insertion of Explanations to section 9(1)(vi) cannot be read into or applied against the treaty definition; a State cannot unilaterally amend treaty obligations by domestic legislation. The Tribunal relied on coordinate authority to that effect.

Explanation 4, 5 and 6 to section 9(1)(vi) of the Income tax Act cannot be read into the definition of "royalty" in the India Finland DTAA; the treaty definition governs.

Final Conclusion: Following its own coordinate bench decisions for other assessment years and on the facts of the distribution arrangements, the Tribunal allowed the appeal in part by holding that the receipts for sale of off the shelf software and for maintenance/support (including upgrades) are business income and not royalty, and that the post hoc statutory Explanations to section 9(1)(vi) cannot be read into the India Finland tax treaty.

Bogus purchases - genuineness of purchases versus verification of onward sales - payment by cheque not conclusive proof of genuineness - disallowance limited to profit element embedded in suspected purchases - application of judicial precedent (CIT v. Smith P. Sheth) - interpretation of rule 34(5) - pronouncement beyond ninety days in extraordinary circumstances - exclusion of lockdown period for computing pronouncement timeline

Bogus purchases - genuineness of purchases versus verification of onward sales - application of judicial precedent (CIT v. Smith P. Sheth) - disallowance limited to profit element embedded in suspected purchases - Ld. CIT(A)'s partial deletion of the addition made by the AO on account of alleged bogus purchases and restriction of disallowance to 12.5% of such purchases. - HELD THAT: - The Tribunal accepted that purchases from the suspected parties were not genuine but agreed with the CIT(A) that the Assessing Officer had not doubted the assessee's declared onward sales. The Tribunal noted that payment by cheque alone is not conclusive proof of genuineness where surrounding circumstances are suspect. Applying and respectfully following the decision in CIT v. Smith P. Sheth, the Tribunal held that where sales are not discredited and suspicion pertains only to purchases, it was permissible to restrict the addition to the profit element (as done by the CIT(A)) rather than disallowing the entire quantum of purchases. On these findings the grounds of the revenue challenging the reduction were dismissed and the CIT(A)'s order was affirmed. [Paras 4, 6]

The revenue's appeal against the partial deletion of the addition was dismissed and the CIT(A)'s reduction of the disallowance to 12.5% was upheld.

Interpretation of rule 34(5) - pronouncement beyond ninety days in extraordinary circumstances - exclusion of lockdown period for computing pronouncement timeline - Pronouncement of the Tribunal's order after the expiry of ninety days from conclusion of hearing was permissible by excluding the period of lockdown as an extraordinary circumstance. - HELD THAT: - Relying on the coordinate-bench precedent in JSW Ltd and the reasoning set out therein, the Tribunal held that the expression 'ordinarily' in rule 34(5) permits exclusion of an extraordinary period when computing the 90-day timeline. Given the national lockdown and related judicial and administrative extensions and notifications, the period during which lockdown was in force is to be excluded for the purpose of calculating the 90-day limit for pronouncement. Applying that approach, the Tribunal proceeded to pronounce the order beyond ninety days from conclusion of hearing. [Paras 8, 9, 10]

Order pronounced beyond ninety days was held permissible by excluding the lockdown period; the Tribunal proceeded to pronounce the order accordingly.

Final Conclusion: The revenue's appeal for AY 2012-13 is dismissed: the CIT(A)'s restriction of the addition on alleged bogus purchases to the profit element (12.5%) is upheld; and the Tribunal's order was validly pronounced beyond ninety days after excluding the lockdown period for computing the pronouncement timeline.

Addition under section 69/69B for unexplained investment - evidentiary value of unsigned seized documents and MOU acted upon by parties - agreements to sell/ikrarnamas and registered power of attorney as indicia of de facto transfer - short term capital gains on sale of immovable property - application of section 2(47) - transfer/enabling enjoyment as de facto transfer - assessment under section 153A r.w.s. 143(3) and reopening u/s 148

Addition under section 69/69B for unexplained investment - evidentiary value of unsigned seized documents and MOU acted upon by parties - agreements to sell/ikrarnamas and power of attorney as indicia of purchase - Validity of additions treating payments for land-purchases as unexplained investment where unsigned MOUs, seized schedules of payments and ikrarnamas/agreements to sell and POAs were relied upon by AO; whether CIT(A) was justified in deleting those additions. - HELD THAT: - The Tribunal held that the Assessing Officer was entitled to treat the unsigned MOU, the schedule of payments and the documents titled "Accounts of Sh. Surjit Singh" along with the seized ikrarnamas and subsequent registered deeds/POAs as corroborative material. Although the MOUs and some seized papers were unsigned, the AO demonstrated that the parties had acted in accordance with the terms (payments recorded, further deeds executed referring to the MOU and schedules identifying identical khasra numbers). The Tribunal agreed with the AO that surrounding circumstances and subsequent transactions could impart evidentiary weight to such documents and that the assessee's explanation (that agreements were imaginary or that POAs were given without consideration) was not satisfactorily established. The Tribunal therefore found that CIT(A) erred in treating the unsigned documents as having no evidentiary value and in deleting the additions. The Tribunal allowed the Revenue's appeals on this point and restored the additions deleted by CIT(A). [Paras 16, 18, 19, 20]

CIT(A)'s deletion of the additions based on ignoring the probative value of the seized unsigned MOU, related schedules and ikrarnamas was set aside; the AO's additions under sections 69/69B are restored.

Short term capital gains on sale of immovable property - application of section 2(47) - de facto transfer/enabling enjoyment - Whether the CIT(A) was justified in deleting the addition made on account of short term capital gain arising from sale to M/s Horizon Buildcon where the AO treated the assessee as having purchased and sold the land. - HELD THAT: - The Tribunal agreed with the AO that, on the material (agreements/POAs, registration deeds, seized schedules and payments reflected in company records), there was a de facto transfer/enabling enjoyment within the ambit of section 2(47). Given the finding that the assessee had acquired and subsequently divested rights in the land (and received payments not explained by the assessee), the AO's computation of short term capital gain was upheld. The CIT(A)'s conclusion - predicated on acceptance of the assessee's claim that he did not purchase the land in his individual capacity - was held to be contrary to the record. Accordingly the deletion of the short term capital gain was set aside and the AO's addition reinstated for the relevant year. [Paras 3, 19]

The addition on account of short term capital gain is restored; CIT(A)'s deletion on this ground is set aside.

Assessment under section 153A r.w.s. 143(3) and reopening u/s 148 - procedural timeline - Rule 34(5) ITAT Rules and pronouncement delay - Whether the Tribunal's pronouncement beyond 90 days from conclusion of hearing invalidated the order and whether exceptional circumstances justified delay. - HELD THAT: - The Tribunal acknowledged the delay in pronouncement beyond the ordinary 90-day period but applied the exception for extraordinary circumstances. It followed precedent accepting that pandemic-related lockdowns and associated disruptions justify excluding the lockdown period when computing the 90-day limit under Rule 34(5). The Tribunal accordingly treated the delayed pronouncement as permissible in the circumstances and proceeded to pronounce the order. [Paras 21, 22, 23, 24]

Delay in pronouncing the order beyond 90 days was excused on the ground of extraordinary circumstances (lockdown); the order as pronounced is valid.

Final Conclusion: The Tribunal allowed the Revenue's appeals: it set aside the CIT(A)'s deletions and restored the Assessing Officer's additions under sections 69/69B and the short-term capital gains computation for the assessment years in dispute, holding that the seized MOUs, schedules of payments, ikrarnamas and related documents-though unsigned-had evidentiary weight when acted upon by the parties; the Tribunal's delayed pronouncement was held permissible owing to extraordinary lockdown-related circumstances.

Modification of restraint order - limited withdrawal for maintenance and educational expenses - interim relief severable from merits of pending adjudication - production of bank account statements for interim consideration

Limited withdrawal for maintenance and educational expenses - modification of restraint order - Permission to withdraw amounts from the applicant's bank account to meet his son's educational expenses and modification of the earlier restraint order to that extent - HELD THAT: - The Tribunal found that the applicant's son had received an offer/intimation from the Institute of Management to pursue the PGDM eBiz programme and that the fees required could not be met from the existing monthly withdrawal limit. The applicant produced the institute's intimation and a receipt evidencing payment. The Tribunal held that the educational expenses of the son are distinct from the allegations against the applicant and that the restraint order dated 23.02.2018 (as extended) should be modified to permit withdrawals necessary to defray those educational expenses. The Tribunal authorised periodic withdrawals from the HDFC account upon production of the institute's intimation/letter in accordance with the institute's payment schedule and allowed withdrawal of the sum already deposited to meet the fees. The modification was granted without prejudice to the adjudication of the main petition or other applications on their merits.

Application allowed; order dated 31.01.2019 modified to permit withdrawals from the HDFC account as necessary for the son's course fees (on production of the institute's intimation) and to allow withdrawal of the amount already deposited.

Interim relief severable from merits of pending adjudication - production of bank account statements for interim consideration - Whether allegations of involvement and concurrent investigations preclude grant of the limited interim relief sought - HELD THAT: - The Tribunal observed that allegations against the applicant and ongoing investigations by SFIO/CBI relate to the merits of the main petition and are not material to the narrow interim relief sought for the son's educational expenses. The Tribunal recorded that the applicant's involvement, if any, will be considered during the hearing of the main petition and that the present application would be decided independently on its own facts. The Tribunal had earlier directed disclosure of bank account statements, which were furnished and considered for the interim application.

Allegations and investigations do not bar the grant of the limited interim relief; interim permission granted while preserving consideration of merits in the main petition.

Final Conclusion: The Tribunal allowed the application and modified the earlier restraint order to permit necessary withdrawals from the applicant's HDFC account for his son's PGDM eBiz programme on production of the institute's intimation, and allowed withdrawal of the fees already deposited, while expressly preserving all rights in relation to the merits of the main petition and other pending applications.

Restoration of company struck off from register - just and equitable restoration under Section 252(3) - failure to file financial statements and annual returns - strike off action under Section 248(5) - statutory compliance and filing obligations of directors - conditions for restoration including filing, undertaking and costs - preservation of Registrar's power to initiate penalty proceedings

Restoration of company struck off from register - just and equitable restoration under Section 252(3) - Tribunal ordered restoration of the appellant company's name to the Register of Companies under Section 252(3) on satisfaction that restoration was just and equitable despite its name having been struck off under Section 248(5). - HELD THAT: - The Tribunal examined the reasons for strike off, the appellant's explanation for non-filing (departure of an entrusted employee and consequent lapse), and documentary material including the latest balance sheet and Income Tax Return acknowledgment. Noting that the strike off resulted from non-filing of financial statements and annual returns, the Tribunal applied the restoration test in Section 252(3) and concluded that it would be just and equitable to restore the company's name and permit the company to regularize filings. The Tribunal therefore directed restoration of the company's status as if its name had not been struck off. [Paras 7, 9]

Name of the company restored to the Register of Companies and company treated as active for e-filing

Conditions for restoration including filing, undertaking and costs - preservation of Registrar's power to initiate penalty proceedings - statutory compliance and filing obligations of directors - Restoration was made subject to specific conditions: filing of pending statutory documents with prescribed fees/fines, joint undertaking by shareholders regarding non-use of accounts for tainted money during demonetisation, payment of costs, restraint on alienation of assets till compliance, publication of the order, and reservation of ROC's power to proceed for alleged late filings. - HELD THAT: - While granting restoration, the Tribunal imposed conditions deemed necessary to protect public interest and to ensure compliance. The company was directed to file all outstanding statutory documents along with applicable fees/additional fee/fine within thirty days of restoration; the shareholders must jointly submit an undertaking about non-use of accounts during demonetisation; the appellant must pay costs to the Central Government and produce proof within three weeks of receipt of the order; the company is restrained from alienating valuable assets until compliance; and the ROC was directed to publish the order in the Official Gazette. The Tribunal explicitly preserved the Registrar's statutory authority to initiate proceedings against the company and its directors for alleged late filings and other non-compliances under the Companies Act, 2013. [Paras 9]

Restoration subject to filing of documents and fees, submission of undertaking, payment of costs, restraint on alienation until compliance, publication of order, and without prejudice to ROC's powers to proceed against company and directors

Final Conclusion: The Tribunal allowed the appeal and directed restoration of the company's name to the Register of Companies as if it had not been struck off, subject to specified conditions for regularisation, payment of costs and preservation of the Registrar's power to take further proceedings for alleged non-compliance.

Compounding of offences under Section 441 of Companies Act, 2013 - failure to hold Annual General Meeting - officer in default - discretion to impose less than maximum fine in compounding - exemption from penalty for resigned/non executive directors

Failure to hold Annual General Meeting - officer in default - compounding of offences under Section 441 of Companies Act, 2013 - discretion to impose less than maximum fine in compounding - Compounding of offences for delay in holding the AGMs for financial years 2016-17 and 2017-18 against the company and its officers and the quantum of compounding fee to be imposed. - HELD THAT: - The Tribunal accepted the petitioners' explanation that delay in holding AGMs for 2016-17 and 2017-18 arose from disruption of business operations following adverse regulatory action (USFDA inspection) and consequent efforts to finalise standalone and consolidated financial statements, and noted that the petition was filed suo motu after compliance and that no prior similar defaults existed. The Registrar of Companies' report, which supplied the maximum statutory fines, did not oppose compounding. Under Section 441 the Tribunal has discretion to compound offences and to specify a sum not exceeding the maximum statutory fine; there is no minimum prescribed. Taking into account the extenuating circumstances, lack of deliberate misconduct, the pandemic's adverse economic impact, and the petitioners' compliance, the Tribunal opted for a lenient, minimum compounding amount and specified distinct nominal fines for the company and each officer in default for the two financial years and directed payment within six weeks and consequent action by the ROC. [Paras 5, 6, 8]

Offences for delayed AGMs for 2016-17 and 2017-18 are compounded; nominal compounding fines are imposed on the company and the named officers in default as specified in the order, with payment directed within six weeks.

Exemption from penalty for resigned/non executive directors - officer in default - Whether former directors who resigned and were not involved in day-to-day operations should be subjected to compounding fines. - HELD THAT: - The Tribunal found that Mr. Guru Veerappa Betageri (a non-resident, non-executive director) resigned on 13.06.2019 and Mr. Karnanda Nanaiah Bopanna resigned on 12.12.2018 and were not involved in day-to-day operations during the period of non-compliance. Given that the company and current officers had made good the defaults and considering the non-involvement and resignation, the Tribunal exercised its discretion to exempt these former directors from imposition of fines. [Paras 7]

Mr. Guru Veerappa Betageri and Mr. Karnanda Nanaiah Bopanna are exempted from imposition of compounding fines.

Final Conclusion: The Company Petition is allowed: the Tribunal compounded the offences for delayed AGMs for FY 2016-17 and 2017-18 by imposing nominal compounding fines on the company and the present officers in default as specified, directed payment within six weeks and ROC action on proof of payment, and exempted the two former/resigned directors from fines.

Scheme of Amalgamation - sanction under Sections 230 to 232 of the Companies Act, 2013 - employees to be absorbed on terms not less favourable - Pooling of Interest Method - Accounting Standard 14 - adjustments in accordance with Accounting Standard 5 - appointed date - dissolution without winding up - scheme binding on shareholders, creditors and employees

Scheme of Amalgamation - sanction under Sections 230 to 232 of the Companies Act, 2013 - scheme binding on shareholders, creditors and employees - Sanction of the Scheme of Amalgamation and its binding effect - HELD THAT: - The Tribunal considered the joint company application under the Act, 2013 and the Rules for approval of the Scheme whereby six Transferor Companies would be amalgamated with the Transferee Company. The Tribunal noted statutory compliances, the absence of adverse observations from the Regional Director and the Official Liquidator, and that no objections had been received from interested parties. It held that the Scheme is fair and reasonable, not contrary to public policy and not violative of any law. Consequently the Scheme annexed to the petition was sanctioned and declared binding on the shareholders, creditors and employees of the companies involved. The Appointed Date of the Scheme was recorded as 1st April, 2019. [Paras 10, 13, 14, 19, 20]

The Scheme of Amalgamation is sanctioned and shall be binding on the shareholders, creditors and employees; Appointed Date is 1st April, 2019.

Employees to be absorbed on terms not less favourable - Continuity of employees of Transferor Companies on amalgamation - HELD THAT: - The Tribunal recorded the provision in the Scheme that all permanent employees of the Transferor Companies in employment on the Effective Date shall become permanent employees of the Transferee Company without break and on terms and conditions of employment and remuneration not less favourable than those applicable with the Transferor Companies, together with funds and pensions created by the Transferor Companies. This provision was noted as part of the Scheme and accepted in the sanction order. [Paras 16]

Permanent employees of the Transferor Companies shall be absorbed by the Transferee Company on not less favourable terms and with continuity of service.

Pooling of Interest Method - Accounting Standard 14 - adjustments in accordance with Accounting Standard 5 - Accounting treatment on amalgamation - HELD THAT: - The Tribunal recorded Clause 11 of Part IV of the Scheme which requires that on amalgamation the Transferee Company shall make adjustments in its books using the Pooling of Interest Method specified in Accounting Standard 14. It further recorded Clause 11.3 which mandates that differences in accounting policies between the Transferor Companies and the Transferee Company up to the Appointed Date shall be quantified and adjusted in accordance with Accounting Standard 5 so that the Transferee Company's financial statements reflect consistent accounting policies. The Tribunal accepted these accounting provisions as part of the Scheme. [Paras 17]

Accounting adjustments pursuant to the Scheme shall follow the Pooling of Interest Method under AS 14 and policy differences shall be adjusted under AS 5 up to the Appointed Date.

Dissolution without winding up - Effect of sanction on existence of Transferor Companies and Registrar formalities - HELD THAT: - The Tribunal directed that upon the filing of the certified copy of the sanction order with the Registrar of Companies, the Transferor Companies shall stand dissolved without winding up and shall be succeeded by the Transferee Company. It further directed the ROC to consolidate the records of the Transferor Companies with those of the Transferee Company and to place all documents relating to the Transferor Companies with the Transferee Company's files. The Registry was directed to prepare the order of sanction in the prescribed format and a certified copy of the order was to be filed with the ROC within 30 days. [Paras 18, 23, 24, 25, 26]

On filing the certified copy of this Order with the ROC the Transferor Companies shall be dissolved without winding up and their records shall be consolidated with the Transferee Company.

Sanction under Sections 230 to 232 of the Companies Act, 2013 - Clarification as to taxes, stamp duty and permissions - HELD THAT: - While sanctioning the Scheme, the Tribunal clarified that the order shall not be construed as granting exemption from payment of stamp duty, taxes or other charges, nor from any permissions or compliances required under law. This limitation was recorded to make clear that statutory dues and permissions remain subject to applicable law and separate processes. [Paras 21]

The sanction does not exempt the parties from payment of stamp duty, taxes, other charges, or from obtaining statutory permissions or compliances as required by law.

Final Conclusion: The Tribunal allowed the company petition and sanctioned the Scheme of Amalgamation between the six Transferor Companies and the Transferee Company under Sections 230-232 of the Companies Act, 2013, recording the Appointed Date as 1st April, 2019; employees, accounting treatment, dissolution without winding up, registrar formalities and preservation of tax and statutory obligations were addressed in the sanction order.

Sanction of a Scheme of Amalgamation - Compliance with provisions of sections 230-232 of the Companies Act, 2013 - Protection of revenue and successor liability on amalgamation - Successor liability under Section 170 of the Income Tax Act, 1961 - Preservation of books of account and records post-amalgamation - Directions to pay costs to Official Liquidator and Regional Director

Sanction of a Scheme of Amalgamation - Compliance with provisions of sections 230-232 of the Companies Act, 2013 - The Company Petition for sanctioning the Scheme of Amalgamation of the Petitioner Transferor Company with the Petitioner Transferee Company is allowable and the Scheme is to be sanctioned. - HELD THAT: - On consideration of the affidavits, statutory notices, responses from the Regional Director and Official Liquidator, publication of hearing and absence of objections from stakeholders, the Tribunal found that the requirements of sections 230 to 232 of the Companies Act, 2013 and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 have been satisfied. The Scheme effects transfer of the transferor company's business, assets, liabilities, rights and obligations to the transferee and provides for dissolution of the transferor without winding up. Having regard to the material on record and undertakings given by the petitioners, the Tribunal concluded that sanction is appropriate and allowed the petition, declaring the Scheme binding on shareholders and creditors and dissolving the transferor company without winding up. [Paras 11, 12]

Company Petition CP(CAA) No. 126 of 2018 is allowed; the Scheme of Amalgamation is sanctioned and binding on the parties.

Protection of revenue and successor liability on amalgamation - Successor liability under Section 170 of the Income Tax Act, 1961 - Whether sanctioning the Scheme would prejudice the revenue in view of pending or contemplated income-tax proceedings and demands. - HELD THAT: - The Tribunal examined the representations of the Official Liquidator and the Regional Director regarding pending survey and assessment proceedings and the demand notices for AY 2011-12 and 2012-13 and the position relating to AY 2018-19. It accepted the petitioners' submissions that liabilities (accrued or crystallized) of the transferor company would stand transferred to the transferee company upon sanction and that the transferee would remain responsible to cooperate with tax authorities. The Tribunal recorded that sanctioning the Scheme would not dilute liabilities or prejudice revenue because successor liability principles (including those under Section 170 of the Income Tax Act, 1961) ensure continuation of tax liabilities against the successor entity, and petitioners gave undertakings to preserve records and assist in pending proceedings. The Tribunal therefore rejected the contention that the Scheme should be withheld pending completion of assessments. [Paras 8, 11]

Sanction of the Scheme is not prejudicial to the revenue; pending or contemplated tax proceedings do not preclude approval, subject to the transferee's obligations to cooperate and to preservation of records.

Preservation of books of account and records post-amalgamation - Directions to pay costs to Official Liquidator and Regional Director - Whether any directions should be issued as part of sanction regarding preservation of records, compliance with law and payment of costs. - HELD THAT: - The Tribunal directed that the transferee company shall preserve the books of accounts, papers and records of the transferor company and shall not dispose of them without prior permission of the Central Government under section 239 of the Companies Act, 2013. It also made clear that the transferor company is not absolved of statutory liabilities even after sanction and recorded the petitioner's undertaking to comply with applicable laws. The Tribunal quantified costs payable to the Official Liquidator and towards legal fees/expenses of the Regional Director and directed payment by the transferee company. Further procedural directions were given for issuance of authenticated copies of the order, lodging the order with the Superintendent of Stamps and filing requisite forms with the Registrar of Companies. [Paras 13, 14]

Transferee company ordered to preserve records and not to dispose of them without Central Government permission; transferor not absolved of liabilities; costs quantified and payable by transferee; procedural filings directed.

Final Conclusion: The Tribunal sanctioned the Scheme of Amalgamation, holding that statutory requirements under sections 230-232 were met, that sanction would not prejudice the revenue given successor liability and undertakings, and directed preservation of records, payment of quantified costs and completion of prescribed filings and formalities.

Scheme of Amalgamation (Merger by Absorption) - scheme of compromise or arrangement under section 230(1)(b) of the Companies Act, 2013 - dispensing with meetings of shareholders and creditors - service of notice to Income Tax and regulatory authorities - appointment of advisor to the Official Liquidator for scrutiny of books

Dispensing with meetings of equity shareholders of a wholly owned transferor company - Meeting of equity shareholders of the Transferor Company (First Applicant) was dispensed with. - HELD THAT: - Both equity shareholders of the First Applicant (the Transferee Company and its nominees) gave their consent affidavits. In view of unanimous consent by the equity shareholders of the wholly owned subsidiary, the Tribunal exercised its discretion to dispense with convening a meeting of the equity shareholders of the Transferor Company. [Paras 8]

Meeting of equity shareholders of the First Applicant is dispensed with.

Dispensing with meetings of shareholders and creditors where transferor is wholly owned subsidiary - Meetings of shareholders and creditors of the Transferee Company (Second Applicant) were dispensed with. - HELD THAT: - The Tribunal accepted the Applicants' submission that the Transferor is a wholly owned subsidiary and that the merger would not affect the shareholding or creditor rights of the Transferee Company (no issue of shares or diminution of creditors' rights). Relying on the rationale applied in earlier analogous matters, the Bench held that meetings of shareholders and creditors of the Transferee Company need not be convened. [Paras 11]

Meetings of shareholders and creditors of the Second Applicant are dispensed with.

Intimation to unsecured creditors and non-convenance of creditors' meeting where creditors' rights unaffected - No meeting of unsecured creditors of the First Applicant is required; unsecured creditors to be informed and given 30 days to represent. - HELD THAT: - The Tribunal recorded that there are no secured creditors of the First Applicant and that the scheme does not compromise creditors' rights; unsecured creditors would be paid in the ordinary course. Consequently, a creditors' meeting was not required, but the First Applicant was directed to intimate all unsecured creditors of the scheme by post/courier/email/hand-delivery and allow them thirty days from receipt to submit representations to the Tribunal, failing which it will be presumed they have no representations. [Paras 9]

No meeting of unsecured creditors required; unsecured creditors to be notified and given 30 days to file representations.

Service of notice to Income Tax, Regional Director, Registrar of Companies, SEBI and stock exchanges - Applicant Companies are directed to serve notices with copy of the Scheme on specified Income Tax authorities and specified regulatory authorities within 30 days for representations. - HELD THAT: - The Tribunal directed service of notices with a copy of the Scheme upon the Income Tax authorities under whose jurisdiction assessments are made, the Office of Regional Director (Western Region), Registrar of Companies, SEBI, BSE and NSE, each with a direction to submit any representation within thirty days from receipt to the Tribunal, failing which it will be presumed they have no representations. Specific addressing to the Income Tax officers for the parties was recorded. [Paras 12, 13]

Notices to the Income Tax and specified regulatory authorities are to be served and representations allowed within thirty days.

Notice to Official Liquidator and appointment of adviser to assist in scrutiny of books for five years - Applicant Companies to serve notice on the Official Liquidator and the Tribunal appointed M/s. B.A. Ved & Co. to assist the Official Liquidator to scrutinise the Transferor Company's books for the last five years, with a fee to be paid by the Transferor Company. - HELD THAT: - Pursuant to the statutory requirement, the First Applicant was directed to serve notice upon the Official Liquidator, High Court, Bombay. The Tribunal appointed M/s. B.A. Ved & Co., Chartered Accountants, to assist the Official Liquidator in scrutinising the Transferor Company's books of accounts for the preceding five years and to submit a report to the Tribunal, with the Transferor Company directed to pay the stated fees. If no representation is received from the Official Liquidator within thirty days, it will be presumed there is no objection. [Paras 14]

Notice to Official Liquidator to be served; M/s. B.A. Ved & Co. appointed to assist and to be paid by the Transferor Company; thirty-day period for representations from the Official Liquidator.

Publication/hosting of notices and filing of compliance proofs - Applicant Companies must host notices and the Scheme on their websites (if any) and file proof of compliance electronically within fifteen days after completing the required services. - HELD THAT: - The Tribunal directed that the notices with a copy of the Scheme be hosted on the Applicant Companies' websites, if any. The Applicant Companies were further directed to file proof of compliance electronically within fifteen days from the date on which the last of the mandated compliances were effected, reporting to the Tribunal that directions regarding issue of notices had been complied with. [Paras 15, 16]

Notices to be hosted on company websites and proof of compliance to be filed electronically within fifteen days of completion of compliances.

Final Conclusion: The Tribunal sanctioned procedural reliefs and directions necessary for convening statutory communication and verification steps in respect of the proposed Scheme of Amalgamation of Cheese Land Agro (India) Private Limited with Prabhat Dairy Limited: meetings of the relevant shareholders and creditors were dispensed with as recorded; prescribed notices are to be served on tax and regulatory authorities and the Official Liquidator; an adviser was appointed to assist the Official Liquidator; and the Applicants must host the Scheme and file proof of compliance within the stipulated timeframes.

Restoration of company name under section 252 of the Companies Act, 2013 - Power of Registrar to strike off under section 248 of the Companies Act, 2013 - Requirement to satisfy realization of liabilities before striking off - Conditioned restoration subject to compliance, costs and publication - Principle of ease of doing business and lenient exercise of discretion

Restoration of company name under section 252 of the Companies Act, 2013 - Conditioned restoration subject to compliance, costs and publication - Principle of ease of doing business and lenient exercise of discretion - The petition for restoration of the name of M/s SRK Sugars Private Limited in the Register of Companies was allowed subject to specified conditions. - HELD THAT: - The Tribunal accepted the petitioner's plea that non-filing of financial statements and annual returns was inadvertent and that the petition was filed within the statutory limitation period. Although the Registrar had the power to strike off the company under the statutory scheme, there were no pending investigations or complaints and the ROC did not oppose restoration provided statutory defaults were rectified. Applying a lenient approach in the interest of justice and in furtherance of the principle of ease of doing business, the Tribunal exercised its power under section 252(3) to restore the company's name, while making restoration conditional. The conditions require filing of all outstanding statutory documents with prescribed fees/additional fee/fine within thirty days of restoration, payment of costs to the Central Government within three weeks, delivery of a certified copy of the order to the ROC, and publication of the order in the Official Gazette by the ROC; restoration to include consequential actions such as restoration of directors' DINs. The order is confined to the violations that led to striking off and does not preclude the ROC from taking appropriate action for any other violations or offences.

The company's name is restored on the Register of Companies, subject to filing of outstanding statutory documents and fees, payment of the prescribed cost, delivery of the order to the ROC and publication in the Official Gazette, and compliance with the other stated directions.

Final Conclusion: The Tribunal allowed the company petition and directed restoration of the company's name under section 252(3) on specified conditions (filing of pending documents and fees, payment of costs, delivery of order to ROC and publication), while reserving the ROC's right to take action for any other violations.

Composite Scheme of Amalgamation and Arrangement - sanction under Sections 230 to 232 of the Companies Act, 2013 - appointed date - transfer and vesting of assets and liabilities - compounding of offence under section 441 of the Companies Act, 2013 - non-appointment of whole-time Company Secretary and compliance with section 203/Rule 8A - statutory oversight by Regional Director/Registrar of Companies/Official Liquidator

Composite Scheme of Amalgamation and Arrangement - sanction under Sections 230 to 232 of the Companies Act, 2013 - Sanction of the Composite Scheme of Amalgamation and Arrangement between the Transferor Companies and the Transferee Company. - HELD THAT: - The Tribunal examined the petition, statutory compliances, reports of the Regional Director and Registrar of Companies, the Official Liquidator's scrutiny report and the affidavits filed by the petitioners. The Regional Director concluded that the Scheme is fair, reasonable and not detrimental to members or creditors. The Tribunal found that the procedural requirements of sub sections (1) and (2) of section 232 had been complied with, and that the amalgamation would consolidate operations, promote growth, yield economies of scale, optimize resources and be in the interest of creditors. On this basis the Composite Scheme, as approved by the Boards of the petitioner companies, was sanctioned.

The Composite Scheme is sanctioned.

Compounding of offence under section 441 of the Companies Act, 2013 - non-appointment of whole-time Company Secretary and compliance with section 203/Rule 8A - Compounding of the default for non appointment of a whole time Company Secretary during the period of default and determination of the penalty to be levied. - HELD THAT: - The Tribunal considered the Registrar of Companies' observation about non appointment, the petitioners' explanation that Rule 8A was introduced in 2014 and that the default related to FYs 2013 14 and 2014 15, the fact that the company later appointed a Company Secretary, the absence of deliberate or repeated misconduct, financial difficulties and that no prejudice to public interest was shown. The Official Liquidator's scrutiny did not disclose affairs conducted prejudicially. Prior decisions of the Tribunal indicating token penalties in comparable circumstances were noted. Taking these factors together, the Tribunal exercised its power to compound the offence by fixing a lump sum fee and token penalties on directors, to be paid within a stipulated period, and ordered that upon payment the defaults be treated as compounded under section 441.

Default compounded on payment of a lump sum fee by the Transferor Company and token penalties on its directors; upon payment the offences to be treated as compounded under section 441.

Appointed date - transfer and vesting of assets and liabilities - statutory filings and post sanction compliance - Consequential directions regarding the appointed date, vesting of assets and liabilities, tax implications and compliance obligations following sanction of the Scheme. - HELD THAT: - The Tribunal specified that the Scheme shall take effect from the Appointed Date stated in the Scheme. It ordered that the transferor companies be transferred to and vest in the transferee company and that all liabilities, taxes and duties of the transferors shall become liabilities of the transferee, subject to charges affecting the assets. The Tribunal clarified that sanctioning the Scheme does not exempt payment of stamp duty, taxes or other charges and that tax implications remain subject to final decision of the concerned tax authorities. It directed delivery of certified copies of the order and scheme to the Registrar of Companies within thirty days, submission of compliance affidavits and handover of books and records after completion of amalgamation, and reserved the power of statutory authorities to take action for any other violations.

Appointed Date fixed; assets and liabilities to vest in the transferee; statutory filings and compliance directed; tax and other statutory liabilities to be dealt with by competent authorities.

Final Conclusion: The Tribunal sanctioned the Composite Scheme of Amalgamation and Arrangement with Appointed Date 01.04.2018, directed statutory filings and compliance, ordered compounding of the company's default for non appointment of a whole time Company Secretary on payment of specified lump sum amounts (after which the offences shall stand compounded), and clarified that tax, stamp duty and other statutory liabilities remain subject to competent authorities and existing charges.

Sanction of scheme of amalgamation under Sections 230-232 of the Companies Act, 2013 - Effectiveness from the Appointed Date - Dissolution of transferor company without winding up - Compliance with statutory requirements and undertakings accepted - Consideration of Regional Director's report and Official Liquidator's report - Filing of certified order and scheme with Registrar and stamp authorities

Sanction of scheme of amalgamation under Sections 230-232 of the Companies Act, 2013 - Fairness and legality of the scheme - Sanction of the composite Scheme of Amalgamation of Orbicon Land Developers Pvt. Ltd. with Bramhacorp Limited. - HELD THAT: - The Tribunal found from the material on record that the Scheme is fair and reasonable, not in violation of any law and not contrary to public policy. The Petitioners had complied with the directions of the Tribunal, filed the Joint Company Petition in accordance with earlier orders and furnished undertakings to comply with statutory requirements. No objector opposed the Scheme and no party controverted the averments in the petition. On these findings the joint company petition was made absolute and the Scheme sanctioned. [Paras 17, 18, 19]

The Scheme is sanctioned and the joint company petition is made absolute.

Effectiveness from the Appointed Date - Appointed date - Fixing the Appointed Date for the Scheme. - HELD THAT: - The Scheme specified an Appointed Date as 1st August 2018. The Regional Director had observed on the requirement that the scheme shall clearly indicate an appointed date and noted the statutory provision; the Petitioners clarified that the Appointed Date is a specific date and not based on a trigger event and contended that the MCA circular referenced was not applicable. Having considered the submissions and the materials, the Tribunal fixed the Appointed Date as 1st August 2018. [Paras 19]

Appointed Date of the Scheme fixed as 1st August 2018.

Dissolution of transferor company without winding up - Order for dissolution of the Transferor Company without winding up consequent to the sanction of the Scheme. - HELD THAT: - Upon sanctioning the Scheme the Tribunal ordered that the Transferor Company be dissolved without winding up in accordance with the terms of the sanctioned Scheme and the Companies Act, 2013. This follows the statutory effect of an approved amalgamation where the transferor is to be dissolved as provided in the Scheme. [Paras 19]

The Transferor Company is ordered to be dissolved without winding up.

Compliance with statutory requirements and undertakings accepted - Filing of certified order and scheme with Registrar and stamp authorities - Acceptance of petitioners' undertakings and directions for statutory compliance and filings post-sanction. - HELD THAT: - The Petitioners undertook to comply with all statutory requirements under the Companies Act, 2013 and applicable rules; the Tribunal accepted these undertakings. The Tribunal directed the Petitioners to lodge a certified copy of the order and the Scheme with the Superintendent of Stamps for adjudication of stamp duty within 60 working days of receipt of the certified order, and to file a certified copy of the order and Scheme with the Registrar of Companies electronically in Form INC-28 within 30 days of receipt of the certified order. All concerned regulatory authorities were directed to act on a certified copy of the order and the Scheme. [Paras 15, 20, 21, 22]

Undertakings accepted; directions issued for stamping, filing with Registrar and for regulatory authorities to act on certified copies.

Consideration of Regional Director's report and Official Liquidator's report - Supplementary report and response - Consideration of observations in the Regional Director's report and report of the Official Liquidator, and satisfaction with petitioners' replies. - HELD THAT: - The Regional Director filed a report raising observations on accounting entries, the Appointed Date, RoC queries and other compliance matters. The Petitioners filed a reply affidavit addressing each observation and gave specific undertakings. The RD thereafter filed a supplementary report stating that the Petitioners' responses were satisfactory. The Official Liquidator reported that the affairs of the Transferor Company had been conducted properly and that the Scheme was not prejudicial to public interest. The Tribunal noted these reports and the explanations and accepted that the concerns were addressed. [Paras 9, 14, 16]

RD's and Official Liquidator's reports were considered; petitioners' replies and undertakings found satisfactory.

Final Conclusion: The National Company Law Tribunal sanctioned the Scheme of Amalgamation between Orbicon Land Developers Pvt. Ltd. and Bramhacorp Limited, fixed the Appointed Date as 1st August 2018, ordered dissolution of the Transferor without winding up, accepted the petitioners' statutory undertakings and directed lodging and filing of certified copies of the order and Scheme with the concerned stamping and Registrar authorities; the RD's and Official Liquidator's reports were considered and found satisfactory.

Sanction of Scheme of Amalgamation under sections 230-232 of the Companies Act, 2013 - Appointed Date and effectiveness of scheme - Transfer of undertaking as a going concern and dissolution without winding up - Compliance with accounting standards and statutory formalities in amalgamation - Notice to affected authorities and regulatory approvals

Sanction of Scheme of Amalgamation under sections 230-232 of the Companies Act, 2013 - Fairness and reasonableness of scheme - Tribunal sanctioned the Scheme of Amalgamation between Deejay Mining & Exports Private Limited and ASI Industries Limited - HELD THAT: - No objector opposed the Scheme and the petitioner companies had complied with the Tribunal's directions including convening and conducting requisite meetings and filing affidavits of compliance. The Regional Director's observations were addressed by the petitioners and accepted following their undertakings. The Official Liquidator reported that the affairs of the Transferor Company had been conducted properly. On the material on record the Tribunal found the Scheme to be fair and reasonable, not violative of law and not contrary to public policy, and accordingly sanctioned the Scheme. [Paras 12, 13, 14, 15, 18]

Scheme sanctioned as fair and reasonable; prayers in the petition made absolute.

Appointed Date and effectiveness of scheme - Record Date for allotment of shares - Appointed Date of the Scheme fixed as 1st April, 2018 and the scheme to take effect from that Appointed Date while becoming operative from the Effective Date - HELD THAT: - The Scheme defined 'Appointed Date', 'Effective Date' and 'Record Date'. The Regional Director noted statutory requirements concerning the Appointed Date; the petitioners undertook that the Appointed Date shall be 1st April 2018 and that the Scheme shall be given effect from that date in compliance with section 232(6). Petitioners also clarified that the Record Date is for ascertaining eligibility for allotment of shares. The Tribunal fixed the Appointed Date as 1st April, 2018. [Paras 12, 16]

Appointed Date fixed as 1st April, 2018; effectiveness tied to that date with operative effect from the Effective Date when filings are completed.

Transfer of undertaking as a going concern and dissolution without winding up - Dissolution of transferor company - Entire undertaking of the Transferor Company to be transferred as a going concern to the Transferee Company and the Transferor Company to be dissolved without winding up - HELD THAT: - The Scheme envisages transfer of the entire undertaking of the Transferor Company as a going concern. The Official Liquidator reported that the Transferor Company's affairs had been conducted properly and that it may be ordered to be dissolved. On that basis and upon sanctioning the Scheme the Tribunal directed that the Transferor Company shall be dissolved without winding up. [Paras 8, 14, 17]

Assets and liabilities to transfer to the Transferee Company and the Transferor Company to be dissolved without winding up.

Compliance with accounting standards and statutory formalities in amalgamation - Notice to affected authorities and regulatory approvals - Filing of certified order and scheme with Registrar and Superintendent of Stamps - Petitioners' undertakings on compliance with accounting standards, statutory requirements and notices to authorities accepted; directions issued for post sanction filings and notice to regulators - HELD THAT: - The Regional Director had recommended that the Transferee Company pass necessary accounting entries to comply with applicable accounting standards and drew attention to statutory and regulatory formalities including service of notices to affected authorities and adherence to circulars. The petitioners filed a joint affidavit giving undertakings to comply with accounting standards (including AS 14/IND AS 103 and other applicable standards), to adhere to circulars and statutory provisions, to confirm the Scheme document is unchanged, and to comply with fee and filing provisions. The Regional Director accepted these clarifications in a supplementary report. The Tribunal accordingly accepted the undertakings and directed the petitioners to lodge certified copies of the order and the Scheme with the Superintendent of Stamps and the Registrar of Companies within specified periods, and held that concerned regulatory authorities may act on certified copies. [Paras 12, 13, 19, 20, 21]

Undertakings accepted; petitioners directed to complete statutory and regulatory filings and formalities and notices as specified.

Final Conclusion: The National Company Law Tribunal sanctioned the Scheme of Amalgamation as fair and reasonable, fixed the Appointed Date as 1st April 2018, ordered transfer of the Transferor Company's undertaking as a going concern with dissolution of the Transferor Company without winding up, accepted the petitioners' undertakings on compliance and accounting standards, and directed specified post sanction filings and notices to authorities.

Investigation in public interest under Companies Act - winding up in public interest - Ponzi/pyramid scheme and direct selling distinction - acceptance of deposits versus membership fee - freezing of bank accounts to prevent dissipation of assets - piercing the corporate veil / lifting corporate veil - misfeasance, fraud and misconduct in management - appointment of Official Liquidator - non-cooperation with inspectors and statutory consequences

Investigation in public interest under Companies Act - non-cooperation with inspectors and statutory consequences - Central Government's power to order an investigation in public interest was validly exercised and the investigation complied with statutory scope and procedure. - HELD THAT: - The Tribunal noted the statutory scheme empowering the Central Government to order investigations in public interest and appoint inspectors to determine persons financially interested or able to control the company. The Government's directive of 15.11.2017 and the Regional Director's appointment of inspectors to examine specified matters fell squarely within the statutory power to define scope and investigate arrangements, ownership and control. The record shows notices and summonses issued to the company and its directors, examination of bank statements and financial records and reporting by inspectors. The Tribunal found that the inspectors' inquiry exposed material indicia (heavy commissions, anomalous accounting of membership fees, auditor resignation, criminal complaints and officers' conduct) justifying the investigation and the statutory processes followed, and recorded that the company and certain directors did not fully cooperate with the inspectors thereby engaging the consequences contemplated by the Act. [Paras 12, 22]

Investigation ordered by the Central Government was validly made and the inspectors' inquiry was properly conducted; non-cooperation by the company and directors was material.

Ponzi/pyramid scheme and direct selling distinction - acceptance of deposits versus membership fee - misfeasance, fraud and misconduct in management - piercing the corporate veil / lifting corporate veil - The Tribunal concluded on the material before it that the company's business model, payments to agents and appropriation of subscription receipts evidenced conduct amounting to a Ponzi/pyramid type scheme and fraudulent or unlawful management warranting winding up. - HELD THAT: - Having considered the inspectors' report and documentary material, the Tribunal highlighted features indicative of an unsustainable scheme: large scale collection of membership fees treated as revenue, very high proportion of collections paid out as commissions and awards to agents, limited funds applied to actual trip services, auditor resignation, criminal complaints and indications of diversion of funds to directors by way of dividends and remuneration. The Tribunal rejected the respondent's contention that the receipts were mere membership fees outside the deposit regime on the foundation that the overall pattern of receipts, payments and conduct demonstrated misuse of investor monies and that the enterprise was run in a manner prejudicial to public interest. On these findings the Tribunal held that the affairs of the company were conducted fraudulently and for unlawful objects, justifying lifting protections afforded by corporate form and winding up to protect investors and public interest. [Paras 18, 19, 23, 24]

Affairs of the company were being conducted fraudulently and prejudicially to public interest; the company is to be wound up.

Freezing of bank accounts to prevent dissipation of assets - appointment of Official Liquidator - It was appropriate to continue interim restraints and to appoint the Official Liquidator to take charge and manage the winding up process, including protection of bank assets. - HELD THAT: - The Tribunal observed that interim orders previously freezing bank accounts were necessary to prevent withdrawal or diversion of funds that would render investigation and remedial action futile. Given the findings on diversion, non-cooperation and the risk of dissipation (including attempt by a director to leave the country and incorporation of a related entity), the Tribunal exercised its powers under the Act to merge interim orders into the final order, appoint the Official Liquidator for Karnataka and direct cooperation with him. The Tribunal declined to modify interim restraints despite the respondents' plea for release of funds to meet statutory dues, noting the Official Liquidator would manage affairs and protect creditors and investors. [Paras 24, 25]

Interim freezing orders are upheld and merged into the final winding up order; Official Liquidator appointed to take immediate charge.

Non-cooperation with inspectors and statutory consequences - opportunity to be heard - The Tribunal found that adequate opportunity was afforded to the company and its directors to respond to show cause notices, and their failure to meaningfully engage was material to the Tribunal's conclusions. - HELD THAT: - The record discloses service of statutory notices and summonses, depositions of directors before inspectors and opportunities to furnish documents. The Tribunal found that answers were incomplete, some directors failed to appear or to produce requested information, and a reply by an administrator rather than directors when statutory notices required director response indicated evasion. On this basis the Tribunal treated the respondents' limited replies and non-cooperation as substantively relevant and not fatal to the petitioner's case, enabling adverse inferences and supporting the winding up order. [Paras 6, 20, 21]

Company and directors were given opportunity; their non-cooperation and inadequate responses were material and weighed against them.

Final Conclusion: The Tribunal upheld the Central Government's investigation, found the company's affairs were conducted fraudulently and prejudicial to public interest, ordered winding up of Super Royal Holidays India Pvt. Ltd., appointed the Official Liquidator for Karnataka to take immediate charge, and merged and continued interim restraints (including frozen bank accounts), without prejudice to other statutory actions.

Paramount lien - lien as right of retention - shares as movable property - unpaid seller's rights under the Sale of Goods Act - right to sell versus right to retain - rectification of the register of members - company's power to transfer shares

Paramount lien - lien as right of retention - right to sell versus right to retain - Company cannot unilaterally sell fully paid shares by exercising its paramount lien; lien permits retention but not sale of shares in the possession of the shareholder. - HELD THAT: - The Tribunal examined the company's Articles and the Model Articles and found that although clause in the Articles purportedly provides for a paramount lien, the Articles do not prescribe any procedure for sale. The Tribunal held that shares are 'movable property' and fall within the definition of 'goods' for the purpose of the Sale of Goods Act, 1930, and that the rights of an unpaid seller under that Act are limited to a lien (a right of retention) and, where applicable, resale as defined by that Act. Relying on established authority and the legal distinction between a lien and a pledge, the Bench concluded that a lien is merely a personal right to retain and does not confer an inherent power to sell shares in the shareholder's possession without consent or a contractual/specified procedure authorising sale. Consequently the company had no lawful power to effectuate a unilateral sale of the petitioner's fully paid shares to recover alleged dues. [Paras 24, 25, 26, 27, 28]

The company's purported sale of the petitioner's shares by exercising paramount lien was unlawful; the company could only retain the shares and had no right to sell them.

Company's power to transfer shares - contractual basis for recovery - rectification of the register of members - There was no contractual agreement or written lease authorising the company to recover rental dues by auctioning the petitioner's shares. - HELD THAT: - The Tribunal found no documentary evidence of any lease or written agreement between the petitioner and the company that would validate the company's claim to recover rent by auctioning shares. The company's own admission that only service charges were collected and that no lease agreement existed undermined its contention. Allegations of benami holding and Income Tax Act violations were not supported by any authority or notice. In the absence of a contractual foundation or statutory procedure permitting such a sale, the company's action lacked basis and was liable to be set aside. [Paras 29, 30]

The action of the company was not backed by any contractual agreement permitting recovery of rental dues by auctioning the petitioner's shares and was without basis.

Company's power to transfer shares - procedural regularity in transfer - right to sell versus right to retain - The company did not follow due process in auctioning and allotting the petitioner's shares to a third party; the auction and transfer were invalid. - HELD THAT: - The Articles of Association were silent as to any procedure for exercising a paramount lien and the company could not invoke Model Articles flowing from a clause expressly excluded by its Articles. The Tribunal analysed authorities distinguishing lien from pledge and sale and noted that the respondents auctioned the shares without possession of original share certificates, without the shareholder's consent, and without following any prescribed transfer procedure. The Bench concluded that the auction and subsequent allotment to a third party were illegal, mala fide and carried out without due process under the Companies Act and the company's own Articles. [Paras 21, 22, 30, 31]

The process of auctioning and allotting the petitioner's shares was not in accordance with any lawful procedure and is invalid.

Final Conclusion: The petition succeeds. The petitioner is declared the legitimate holder of the subject shares; the register of members is to be rectified to restore the petitioner's 50 shares and the company is restrained from transferring those shares until rectification; the company must file the rectified register with the Registrar of Companies within one month and pay costs to the petitioner.

Abatement of company petition for non-compliance with TPP Rules - transfer of pending winding-up proceedings under section 434(1)(c) - requirement to furnish information for admission under the Insolvency and Bankruptcy Code for transferred proceedings - service of petition as required by the Companies (Court) Rules

Abatement of company petition for non-compliance with TPP Rules - requirement to furnish information for admission under the Insolvency and Bankruptcy Code for transferred proceedings - Whether the Company Petition stands abated for failure to comply with the proviso to Rule 5(1) of the Companies (Transfer of Pending Proceedings) Rules, 2016 and related requirements after transfer to the Tribunal. - HELD THAT: - The Tribunal found that the petition, originally pending before the High Court, was required to comply with the first proviso to Rule 5(1) of the TPP Rules by submitting information necessary for admission under the Code within the prescribed time. The petitioner failed to serve the petition on the respondent as required and did not furnish the information mandated by the proviso within the extended timeline (last date recorded as 15.07.2017). After transfer of proceedings, the Registry raised office objections and required compliance which the petitioner did not cure; the petitioner also did not prosecute the petition diligently before the High Court leading to dismissal for non-compliance. Having regard to these failures to comply with the TPP Rules and the Tribunal's procedural directions, the Tribunal concluded that the petition abates and is liable to be rejected, while reserving the petitioner's right to file an appropriate application under the IBC in accordance with extant law and rules. [Paras 8, 9, 10]

The Company Petition is held to have abated for non-compliance with Rule 5(1) of the TPP Rules and related procedural requirements after transfer; the petition is disposed of as abated.

Transfer of pending winding-up proceedings under section 434(1)(c) - service of petition as required by the Companies (Court) Rules - Whether, following transfer under section 434(1)(c), the petitioner was obliged to take steps to effect transfer and comply with procedural formalities and service, and whether failure to do so affects maintainability. - HELD THAT: - The Tribunal noted that section 434(1)(c) and the TPP Rules effect transfer of certain pending winding-up proceedings to the Tribunal and that Rule 5(1) contemplates specific compliance where petitions had not been properly served under the Companies (Court) Rules. The petitioner did not effect service of the petition on the respondent before or after transfer and did not take the necessary steps to provide information required for admission under the Code. The Tribunal treated these omissions as fatal to the continuation of the petition in its transferred form, observing that the procedural scheme envisages either compliance within prescribed timelines or abatement of the proceeding. The Tribunal therefore declined to proceed on the merits in view of the procedural non-compliance. [Paras 4, 8, 9]

Because the petitioner failed to effect service and comply with the procedural requirements attendant on transfer under section 434(1)(c) and the TPP Rules, the petition cannot be maintained in its transferred form and is abated.

Final Conclusion: The Company Petition C.P. No. 294/2015 (TP. No. 03/2017) is disposed of as abated for failure to comply with the TPP Rules and related procedural requirements after transfer; liberty is reserved to the petitioner to file an appropriate application/petition in accordance with the Insolvency and Bankruptcy Code, 2016 and the rules thereunder.

Restoration of company name - strike-off under Section 248 - satisfaction required under Section 248(6) - power under Section 252 - filing of overdue financial statements and annual returns - restoration subject to compliance and costs

Restoration of company name - power under Section 252 - strike-off under Section 248 - satisfaction required under Section 248(6) - Whether the Company's name should be restored to the Register of Companies. - HELD THAT: - The Tribunal found that although the Registrar had power to strike off under Section 248 for non filing, Section 248(6) requires the Registrar to satisfy himself that adequate provision has been made for realization of amounts due to the company and discharge of liabilities before finally striking off. On the facts, the ROC did not appear to have undertaken the exercise mandated by Section 248(6). The petitioner produced reasons for non filing and evidence of changed circumstances (including reversal of earlier legal position affecting the company's prospects) and gave undertakings to file overdue statutory documents. Having found that the company intends to restart business and has undertaken to make the overdue filings, the Tribunal took a lenient view and held restoration warranted under the powers conferred by Section 252, subject to conditions. [Paras 5, 6, 7, 8, 9]

The petition to restore the Company's name is allowed; the Registrar is directed to restore the name as if not struck off, subject to the conditions and directions in the order.

Filing of overdue financial statements and annual returns - restoration subject to compliance and costs - Terms and conditions upon which restoration is to be granted. - HELD THAT: - The Tribunal conditioned restoration on the company filing all overdue Balance Sheets and Annual Returns for the periods of default within 30 days of restoration and on payment of a cost, and it directed the company's representative to ensure personal compliance. The Registrar was directed to publish the order in the Official Gazette after compliance; the order expressly preserved the ROC's power to take action for any other violations/offences not the subject of the restoration order. [Paras 8, 9]

Restoration is subject to filing all statutory documents for the default period within 30 days, payment of the specified cost, delivery of a certified copy of the order to the ROC, and publication in the Official Gazette; the ROC remains free to act on other violations.

Final Conclusion: The Tribunal allowed the company petition under Section 252, directing the Registrar to restore the company's name as if not struck off, while requiring prompt filing of overdue financial statements and annual returns and payment of costs, and preserving the ROC's power to take action in respect of other violations.

Scheme of Amalgamation sanction - Compliance with provisions of section 232 of the Companies Act, 2013 - Appointed Date and Effective Date of scheme - Transfer and vesting of assets and liabilities on amalgamation - Tax implications subject to decision of Income Tax Authorities - Obligation to file certified copy of order with Registrar of Companies - Compliance with CSR obligations under Section 135 - Competition Commission notice requirement and undertaking as to thresholds

Scheme of Amalgamation sanction - Compliance with provisions of section 232 of the Companies Act, 2013 - Sanction of the Scheme of Amalgamation between Sumangal Dealers Private Limited and Balaji Malts Private Limited - HELD THAT: - The Tribunal examined the petition, statutory records, reports of the Registrar of Companies and Regional Director and the para-wise replies of the petitioner. Having considered the materials and the Regional Director's conclusion that the Scheme appears fair and reasonable and not contrary to public policy, the Tribunal held that the procedure specified in sub-sections (1) and (2) of section 232 had been complied with and consequently sanctioned the Scheme as prayed. [Paras 12, 13]

Scheme sanctioned

Appointed Date and Effective Date of scheme - Determination of the Appointed Date and Effective Date for the sanctioned Scheme - HELD THAT: - The Tribunal fixed the Appointed Date as 01st April, 2013 as specified in the Scheme and declared that the Effective Date of the Scheme shall be the date of the Tribunal's order. [Paras 13]

Appointed Date fixed as 01.04.2013 and Effective Date is date of this order

Transfer and vesting of assets and liabilities on amalgamation - Continuation of pending proceedings against transferee - Effect of sanction on transfer/vesting of Transferor Company, its assets, liabilities and pending proceedings - HELD THAT: - Pursuant to sanction under section 232, the Tribunal directed that the Transferor Company be transferred to and vest in the Transferee Company and that all liabilities, taxes and duties of the Transferor shall stand transferred to and become liabilities of the Transferee. The Tribunal further directed that any proceedings pending by or against the Transferor shall be continued by or against the Transferee. [Paras 13]

Assets, liabilities and pending proceedings stand transferred to Transferee Company

Tax implications subject to decision of Income Tax Authorities - Allocation of decision-making on tax consequences arising from the Scheme - HELD THAT: - While the Tribunal sanctioned the Scheme, it expressly reserved and left the tax consequences to the final decision of the concerned Income Tax Authorities. The Tribunal declared that any tax implications arising out of the Scheme are subject to the final decision of those authorities and that such decisions shall be binding on the Transferee Company. [Paras 13]

Tax implications left to concerned Income Tax Authorities for final decision

Obligation to file certified copy of order with Registrar of Companies - Compliance with CSR obligations under Section 135 - Directions as to post-sanction compliance including filing with ROC, CSR and statutory returns - HELD THAT: - The Tribunal directed the Petitioner to file a certified copy of the order and Scheme with the Registrar of Companies within thirty days. The Transferee Company was directed to file all due statutory returns, ensure spending of any unspent CSR amounts and comply with Section 135. The Tribunal further required the Transferee to submit periodic affidavits confirming compliance until matters are regularised and directed handover of books and documents of the Transferor after completion of amalgamation. [Paras 13]

Transferee directed to file order with ROC, comply with CSR and statutory filing requirements and to submit compliance affidavits

Competition Commission notice requirement and undertaking as to thresholds - Treatment of Competition Commission of India requirement for combination notice - HELD THAT: - The CCI advised that combination notice is mandatory where thresholds are met. The Transferee filed an affidavit undertaking that, as per its latest audited financials, its assets or turnover are below the prescribed thresholds and that CCI approval is not required. The Tribunal accepted the materials on record addressing the CCI point and proceeded to sanction the Scheme subject to the usual statutory and regulatory compliances. [Paras 7, 8, 12]

CCI threshold issue addressed by undertaking; no prior CCI approval required on the materials filed

Final Conclusion: The Tribunal sanctioned the Scheme of Amalgamation between Sumangal Dealers Private Limited and Balaji Malts Private Limited, fixed the Appointed Date as 01.04.2013 and the Effective Date as the date of the order, directed transfer of assets, liabilities and pending proceedings to the Transferee, reserved tax consequences to the concerned Income Tax Authorities, and gave ancillary directions for filing with the Registrar of Companies, CSR compliance, statutory returns and other post-sanction formalities.

Personal hearing - Regulation 29 - power to relax - principles of natural justice - quasi judicial power - written submissions as adequate opportunity - discretionary power and appellate challenge - code based regulatory scheme

Personal hearing - Regulation 29 - power to relax - principles of natural justice - written submissions as adequate opportunity - No duty on SEBI to grant a personal hearing while considering an exemption application under Regulation 29 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. - HELD THAT: - The Court examined the nature and scheme of the Regulations of 2014 and Regulation 29 which vests SEBI with a discretionary power to relax strict compliance subject to conditions in the interest of investors. The court held that the mere consequence of refusal of exemption does not convert the power into one mandating a personal hearing; grant of exemption is an exception to the regulatory code and refusal does not originate liability. The Regulations constitute a self-contained code permitting applicants to place reasons and additional material in writing; SEBI may require further written material and give reasoned orders which are amenable to appellate review. The Court relied on the flexibility of the audi alteram partem principle and on precedents recognizing that personal hearing is not an invariable requirement where written submissions suffice to secure a just result. Administrative practicability and potential adverse ramifications of importing a mandatory personal hearing requirement across SEBI's regulatory scheme were also considered. On these grounds, the Court concluded there is no statutory duty to afford a personal hearing under Regulation 29. [Paras 21, 24, 25, 26, 27]

No obligation on SEBI to grant a personal hearing in respect of an exemption application under Regulation 29; written submissions constitute an adequate opportunity.

Quasi judicial power - Regulation 29 - power to relax - The Appellate Tribunal did not record a specific binding finding that the power under Regulation 29 is quasi judicial such that SEBI is bound to provide a personal hearing. - HELD THAT: - The Court analysed the Appellate Tribunal's order and found that, apart from a general observation about transparency and quasi judicial authorities, there was no explicit determination by the Tribunal that Regulation 29 is a quasi judicial provision imposing a duty of personal hearing. The petitioner's reliance on the Tribunal's general comments was rejected as insufficient to establish a binding finding altering SEBI's obligations under the Regulations. [Paras 16, 17]

Petitioner's contention that the Tribunal held Regulation 29 to be quasi judicial, thereby mandating personal hearing, is not accepted.

Discretionary power and appellate challenge - written submissions as adequate opportunity - No special or extraordinary circumstances existed in this case to direct SEBI to afford a personal hearing despite absence of a statutory requirement. - HELD THAT: - The Court considered the factual matrix: petitioner had submitted relevant material, responded to SEBI's queries and was afforded an opportunity to file additional written submissions. There was no established formation of opinion by SEBI or arbitrariness shown that would justify judicial intervention to direct a personal hearing. The Court observed that where Regulation 29 does not mandate personal hearing, mere assertion of consequences from refusal does not suffice to invoke equitable or extraordinary relief. The ordinary remedies of reasoned orders and appellate review were deemed adequate. [Paras 28, 29]

No direction to grant a personal hearing in the facts of this case; writ petition dismissed.

Final Conclusion: Writ petition dismissed. The Court held that Regulation 29 does not impose a duty on SEBI to grant a personal hearing for exemption applications under the Share Based Employee Benefits Regulations, 2014; written submissions and reasoned orders with appellate remedies suffice, and no exceptional circumstances warranted directing a personal hearing in this case.

Existence of dispute prior to notice under Section 8 of Insolvency and Bankruptcy Code, 2016 - operational creditor's application under Section 9 of Insolvency and Bankruptcy Code, 2016 - maintainability of Section 9 application - Mobilox principle: real and genuine dispute

Existence of dispute prior to notice under Section 8 of Insolvency and Bankruptcy Code, 2016 - Mobilox principle: real and genuine dispute - maintainability of Section 9 application - Whether the application filed by the operational creditor under Section 9 of IBC, 2016 was maintainable in view of a pre existing dispute raised by the corporate debtor. - HELD THAT: - The Tribunal examined the pleadings and documents and applied the test laid down in Mobilox to determine whether the dispute between the parties was real and genuine prior to the delivery of the Section 8 notice. The corporate debtor had raised specific counter claims, relied on the work order and defect liability obligations, and asserted excess payments recoverable from the operational creditor. The corporate debtor's letter dated 26.07.2017 setting out defects and claimed recoveries was on record and the operational creditor did not bring material to refute those claims or show that the alleged dispute was feeble or a colourable device to avoid payment. The facts therefore prima facie established the existence of a dispute before the Section 8 notice was issued, defeating the admissibility of the Section 9 application. [Paras 5, 6]

The Section 9 application was not maintainable and was dismissed.

Final Conclusion: The Tribunal dismissed the application under Section 9 of the IBC, 2016 filed by the operational creditor against the corporate debtor on the ground that a real and genuine dispute existed prior to the Section 8 notice, and accordingly the petition was disposed of.

Article 137 of the Limitation Act - Section 7 of the Insolvency and Bankruptcy Code, 2016 - date of default - date of NPA as date of default - application under the IBC barred by limitation - condonation under Section 5 of the Limitation Act - right to sue accrues on default

Article 137 of the Limitation Act - Section 7 of the Insolvency and Bankruptcy Code, 2016 - date of NPA as date of default - right to sue accrues on default - application under the IBC barred by limitation - Whether the Section 7 application for initiation of CIRP filed by the Financial Creditor is time barred under the Limitation Act and thus liable to be dismissed. - HELD THAT: - The Tribunal applied the ratio of the Supreme Court in B K Educational Services and Sagar Sharma to hold that Article 137 of the Limitation Act governs applications under Sections 7 and 9 of the IBC and that the right to sue arises when default occurs. The date of default is to be taken as the date of NPA where the date of default is not otherwise stated. On the facts the account had been declared NPA (and the NPA date ultimately treated as 31st January 2010), so the cause of action accrued on or before that date and the three year limitation under Article 137 expired long before the Section 7 application was filed. The Financial Creditor did not invoke any applicable grounds to bring the application within Section 5 of the Limitation Act, and the contention that the right accrued only on the IBC's commencement was rejected as inconsistent with the cited Supreme Court precedents. Consequently the Section 7 petition sought to revive a time barred debt and was held barred by limitation. [Paras 16, 21, 22, 23, 24]

The Section 7 application was dismissed as barred by limitation; the Adjudicating Authority's order admitting the petition dated 14th December 2018 was set aside, the corporate debtor released from moratorium and possession and records to be handed back to its board.

Final Conclusion: Applying Article 137 of the Limitation Act and the Supreme Court precedents cited, the Tribunal held that the Financial Creditor's Section 7 petition was time barred (the date of NPA treated as date of default) and therefore set aside the admission order, dismissed the Section 7 application and restored control of the corporate debtor to its Board.

Operational Debt under the Insolvency and Bankruptcy Code - Existence of pre-existing dispute - Scope of adjudicating authority in Section 9 petitions - Requirement of a plausible contention - Mobilox principle - Effect of demand notice

Existence of pre-existing dispute - Requirement of a plausible contention - Mobilox principle - Scope of adjudicating authority in Section 9 petitions - Admission of the Section 9 petition for initiation of corporate insolvency resolution process - HELD THAT: - The Tribunal examined the materials on record - purchase order, tax invoice, tripartite enrolment, correspondence between the parties and the demand notice - and applied the principle that the adjudicating authority need only be satisfied that a plausible dispute exists prior to the filing of the Section 9 application. The record discloses repeated communications from the Respondent raising performance defects, requests to cancel the purchase order and evidence of part payment and adjustment. Clause 7 of the purchase order provided for payment of the balance only upon implementation/ successful installation. There are competing contentions (non-functioning of the supplied system versus absence of essential system requirements at the Respondent) and multiple communications before the demand notice. Applying the Mobilox standard, the Tribunal found that the dispute was not a feeble or spurious defence but a real controversy existing prior to issuance of the demand notice. Consequently the adjudicating authority concluded that the Section 9 petition was not maintainable and could not be admitted for initiation of CIRP. [Paras 17, 18, 19]

Section 9 petition rejected for want of admission as a pre-existing dispute existed prior to the demand notice.

Final Conclusion: The petition under Section 9 is dismissed and the corporate insolvency resolution process is not initiated; observations are confined to the admissibility issue and do not prejudice the parties' rights before any other forum.

Article 137 of the Limitation Act applies to applications under Section 9 of the Insolvency and Bankruptcy Code - Decree in a money suit does not shift or extend the date of default for insolvency proceedings and is not an acknowledgement under Section 18 of the Limitation Act - Proceedings under the Insolvency and Bankruptcy Code are for corporate resolution and are not recovery or execution proceedings - Effective delivery of the demand notice under Section 8 is mandatory; refusal of delivery is not deemed delivery under IBBI Rules - Rule 5(2) of the IBBI (Application to Adjudicating Authority) Rules, 2016 requires proof of effective delivery of demand notice - Photocopy of an envelope is insufficient evidence of service/delivery for the purpose of Section 8

Article 137 of the Limitation Act applies to applications under Section 9 of the Insolvency and Bankruptcy Code - Decree in a money suit does not shift or extend the date of default for insolvency proceedings and is not an acknowledgement under Section 18 of the Limitation Act - Proceedings under the Insolvency and Bankruptcy Code are for corporate resolution and are not recovery or execution proceedings - Application under Section 9 is barred by limitation and cannot be saved by reliance solely on an ex-parte decree in a civil money suit. - HELD THAT: - The Bench held that Article 137 of the Limitation Act governs Section 9 applications and the right to sue accrues on the date of default. Here the admitted date of default was 31.01.2015 and the petition was filed on 16.07.2019, well beyond the limitation period. A decree pronounced on 18.09.2018, rendered after the limitation period had already expired, does not shift the date of default nor constitute an acknowledgment under Section 18 of the Limitation Act. The Tribunal relied on precedents and observed that insolvency proceedings are for resolution of the corporate debtor and not a substitute for execution or recovery of decretal amounts; a decree may be evidence of default but cannot be the sole basis to initiate Section 9 proceedings where limitation has already run out. Consequently, the application is time barred. [Paras 9, 10, 11]

The Section 9 application is barred by limitation and the ex-parte decree does not save the claim.

Effective delivery of the demand notice under Section 8 is mandatory; refusal of delivery is not deemed delivery under IBBI Rules - Rule 5(2) of the IBBI (Application to Adjudicating Authority) Rules, 2016 requires proof of effective delivery of demand notice - Refusal to accept the demand notice by the corporate debtor cannot be treated as deemed delivery for the purposes of Section 8 of the Code. - HELD THAT: - The Tribunal observed that Rule 5(2) of the IBBI Rules mandates effective delivery of the demand notice under Section 8 and, given the Code's self-contained scheme and overriding effect, there can be no presumption of delivery akin to other statutes. The Operational Creditor's contention that refusal equates to deemed delivery was rejected because the Code requires proof of actual delivery and the Operational Creditor did not produce satisfactory original evidence showing effective service. [Paras 12, 13]

Refusal of delivery is not to be accepted as deemed delivery for the purpose of Section 8; the demand notice was not proved to be effectively delivered.

Photocopy of an envelope is insufficient evidence of service/delivery for the purpose of Section 8 - Rule 5(2) of the IBBI (Application to Adjudicating Authority) Rules, 2016 requires proof of effective delivery of demand notice - A photocopy of the envelope in which the demand notice was purportedly sent is not admissible or sufficient proof of effective service under the Code. - HELD THAT: - The Tribunal noted the absence of the original envelope and found no adequate explanation for its non-production. In view of Rule 5(2) and the requirement of effective delivery under the Code, mere reliance on a photocopy of the envelope marked 'refused' does not establish that the statutory demand notice was delivered to the corporate debtor as required for a Section 9 filing. [Paras 12, 13]

Photocopy of the envelope cannot be admitted as valid evidence of delivery; proof of service of the demand notice is lacking.

Final Conclusion: The petition under Section 9 is dismissed: the application is time-barred and the Operational Creditor failed to prove effective service of the Section 8 demand notice; no costs awarded.

Operational debt - Default under the Insolvency and Bankruptcy Code - Existence of debt and acknowledgment by corporate debtor - Pre-existing dispute - Limitation for initiation of CIRP under Section 9 - Service of demand notice - Admission of petition under Section 9 - Moratorium under Sections 13 and 14 of the IB Code - Appointment of Interim Resolution Professional

Operational debt - Existence of debt and acknowledgment by corporate debtor - The Operational Creditor proved the existence of an operational debt due from the Corporate Debtor and that the Corporate Debtor had acknowledged the creditor relationship. - HELD THAT: - The Adjudicating Authority examined invoices, debit notes, payments credited and the cheque issued by the Corporate Debtor and found the claim of the Operational Creditor to be supported by documentary material. The Authority noted that the Corporate Debtor had invited the Petitioner as a creditor to the amalgamation meeting and that the Petitioner had objected thereto, which was treated as evidence of acknowledgment of creditor status. On the totality of documents and conduct, the Authority concluded that the debt is due and payable to the Operational Creditor. [Paras 4, 5, 6, 20, 21]

Existence of an operational debt due to the Operational Creditor is established and the Corporate Debtor had acknowledged the creditor relationship.

Default under the Insolvency and Bankruptcy Code - Default occurred and is established for the purposes of Section 3(12) of the IB Code. - HELD THAT: - The Authority recorded that the cheque given in discharge of liability was dishonoured and that despite demand notices and communications the Corporate Debtor did not satisfy the claim. Having regard to the undisputed outstanding amount and the dishonour of cheque, the Authority held that default, as defined in the IB Code, has occurred and identified the date of default. [Paras 7, 8, 16, 20, 21]

Default is held to have occurred, with the date of default recorded as 16.03.2018.

Pre-existing dispute - There was no pre-existing dispute that would bar admission of the Section 9 petition. - HELD THAT: - The Corporate Debtor alleged disputes including that the cheque was a blank security cheque issued earlier, forgery of documents and a criminal complaint. The Authority examined those contentions against the documentary record, including the cheque issuance, statement of accounts, communications and conduct of parties, and observed no credible material showing a genuine pre-existing dispute prior to the demand notice. The Authority therefore found that the defence raised was not bona fide and not sufficient to deny admission under the IB Code. [Paras 15, 18, 19, 20, 21]

No pre-existing dispute existed which would preclude initiation of CIRP under Section 9.

Limitation for initiation of CIRP under Section 9 - Service of demand notice - The petition was filed within the prescribed limitation period and the demand notice was duly served such that the petition was complete for initiation of CIRP. - HELD THAT: - The Authority noted that the invoices related to 2017 whereas the Section 9 petition was filed on 11.10.2018, which was within three years of the dates of invoices; accordingly the petition was within limitation. The Authority also recorded that the demand notice had been dispatched to the registered office and treated service as sufficient for the purpose of proceeding. On these bases the petition was found to be complete. [Paras 14, 20, 21, 24]

The petition is within limitation and the demand notice/service requirements are satisfied, rendering the application complete for admission.

Admission of petition under Section 9 - Moratorium under Sections 13 and 14 of the IB Code - Appointment of Interim Resolution Professional - The Section 9 petition was admitted; moratorium was declared and an Interim Resolution Professional was appointed. - HELD THAT: - Upon finding existence of debt, default, absence of pre-existing dispute, compliance with limitation and sufficiency of service, the Adjudicating Authority exercised its power to admit the petition under Section 9. Consequent to admission, the Authority declared the moratorium under Sections 13 and 14 of the IB Code with the statutory prohibitions and directed publication of the moratorium. The Authority also appointed an Interim Resolution Professional and directed him to act in accordance with the IB Code. [Paras 21, 22, 23]

The petition is admitted; moratorium is declared and an Interim Resolution Professional is appointed.

Final Conclusion: The Adjudicating Authority admitted the Section 9 petition filed by the Operational Creditor, having found existence of an operational debt, occurrence of default (dated 16.03.2018), absence of any pre-existing dispute, compliance with limitation and service requirements; it declared the moratorium under Sections 13 and 14 and appointed an Interim Resolution Professional to initiate the CIRP.

Reimbursement of CIRP costs - ratification by Committee of Creditors - liability of CoC members to bear CIRP expenses - estoppel by consent of CoC member - equal apportionment of CIRP costs among CoC members

Reimbursement of CIRP costs - ratification by Committee of Creditors - liability of CoC members to bear CIRP expenses - estoppel by consent of CoC member - equal apportionment of CIRP costs among CoC members - Committee of Creditors consisting of Kotak Resources and ARCIL held liable to reimburse the CIRP cost of Rs. 12,12,831.00 to the Resolution Professional in equal proportions. - HELD THAT: - The Resolution Professional, initially appointed following admission of the section 7 petition, incurred CIRP expenses which were subsequently ratified and approved by the Committee of Creditors in its meeting dated 07.08.2018. ARCIL, though later contesting the legality of the CIRP initiation before appellate fora, was a consenting member of the CoC, participated in meetings and expressly ratified the aggregate resolution costs. Having given its consent and having been included in the CoC on its own consent, ARCIL cannot retract that admission; the ratification in the CoC resolution constitutes an affirmation of liability to bear the approved expenses. In view of the CoC's resolution, both CoC members are responsible to reimburse the CIRP cost to the Resolution Professional and such liability is to be shared equally as reflected in the CoC resolution. [Paras 6, 7, 8, 9]

Both members of the Committee of Creditors are directed to reimburse the CIRP cost to the Resolution Professional in equal proportion.

Final Conclusion: The IA is disposed of; both CoC members are ordered to reimburse the approved CIRP cost to the Resolution Professional in equal shares within 15 days of receipt of the order.

Corporate insolvency resolution process - default and undisputed debt - pre-existing dispute - admission of petition under Section 9 - limitation for filing - moratorium - appointment of interim resolution professional

Default and undisputed debt - Existence of an admitted undisputed debt and occurrence of default by the corporate debtor. - HELD THAT: - The Tribunal found that the corporate debtor acknowledged liability and proposed a repayment schedule admitting outstanding dues of Rs. 21.00 Lakhs to be paid by March 2019, and that no settlement materialised. On that basis the Tribunal held that a debt of Rs. 21.00 Lakhs stood admitted and that default had occurred, establishing the debt for the purposes of initiating CIRP. [Paras 22]

An admitted undisputed debt of Rs. 21.00 Lakhs exists and default is established.

Pre-existing dispute - admission of petition under Section 9 - Allegation of a pre-existing dispute was rejected as a bar to the Section 9 petition. - HELD THAT: - Although the corporate debtor alleged quality-related complaints and relied on earlier communications to show a pre-existing dispute, the Tribunal observed that the debtor did not produce records of pending litigation or arbitration predating the demand notice, and further noted the debtor's subsequent settlement proposal which acknowledged liability. Consequently the attempt to raise a pre-existing dispute was held to be insufficient to defeat the petition under Section 9. [Paras 14, 17, 22]

The plea of a pre-existing dispute was rejected and held not to preclude admission of the Section 9 petition.

Limitation for filing - admission of petition under Section 9 - The Section 9 petition was filed within limitation and was complete for admission. - HELD THAT: - After perusal of the record and hearing the parties, the Tribunal found that the petition was presented by an authorised signatory and filed within the prescribed limitation period. The petition met the requirements for initiation of the corporate insolvency resolution process and therefore merited admission. [Paras 23]

The petition under Section 9 was held to be within limitation and admitted for initiation of CIRP.

Moratorium - Declaration and scope of moratorium upon admission of the petition. - HELD THAT: - The Tribunal declared a moratorium as per the applicable provisions, prohibiting institution or continuation of suits or proceedings against the corporate debtor, transfer or disposal of its assets, enforcement of security interests, and recovery of property occupied by the corporate debtor; it also directed that supply of essential goods or services shall not be terminated during the moratorium and noted that the moratorium operates from the date of the order until completion of CIRP. [Paras 25]

A moratorium was declared from the date of the order until completion of the CIRP, with the specified prohibitions and exceptions.

Appointment of interim resolution professional - Appointment of an Interim Resolution Professional (IRP). - HELD THAT: - The petitioner proposed an insolvency professional who confirmed willingness and absence of disqualifications. Taking that into account, the Tribunal appointed Mr. Kailash T. Shah as Interim Resolution Professional and directed him to make the public announcement of moratorium and to act in accordance with the Code and the Tribunal's directions. [Paras 26, 27]

Mr. Kailash T. Shah was appointed as Interim Resolution Professional and directed to act in accordance with the order and the Code.

Final Conclusion: The Section 9 petition by the operational creditor was admitted after finding an admitted undisputed debt and default; the plea of a pre-existing dispute was rejected; moratorium was declared; and an Interim Resolution Professional was appointed to commence the CIRP.

Approval of resolution plan under Section 31 - Compliance with requirements of Section 30(2) - Moratorium under Section 14 - Overriding effect of the Insolvency and Bankruptcy Code (Section 238) - Commercial wisdom of the Committee of Creditors not amenable to judicial review - Eligibility and disqualification under Section 29A - Compliance certificate in Form H and Regulation 39 - Performance security under Regulation 36B(4A) - Implementation and supervision by Monitoring Committee

Approval of resolution plan under Section 31 - Compliance with requirements of Section 30(2) - Whether the resolution plan submitted by M/s. Shiva Ferric Private Limited should be approved by the Adjudicating Authority under Section 31 of the Code - HELD THAT: - The Tribunal examined whether the resolution plan as approved by the Committee of Creditors met the requirements of Section 30(2) and whether it contained provisions for effective implementation. The Resolution Professional filed Form H certifying compliance. The Bench found that the plan provides for payment of CIRP costs in priority (Section 30(2)(a)), provides for payment to operational creditors no less than liquidation entitlements and makes specific provision for classes such as operational creditors, employees and workmen (Section 30(2)(b)), provides for post-approval management and control (Section 30(2)(c)), and contains clauses for implementation and supervision (Section 30(2)(d)). The Tribunal directed formation of a Monitoring Committee to supervise implementation. It noted that clauses (e) and (f) requiring conformity with other laws are satisfied subject to the Resolution Applicant's compliance with applicable laws. The Bench reiterated that it will not substitute its view for the commercial wisdom of the CoC except where a plan contravenes express law. Having satisfied itself that Section 30(2) requirements were met and no law was contravened, the Tribunal approved the plan under Section 31(1). [Paras 37, 38, 39, 56, 65]

Resolution Plan submitted by M/s. Shiva Ferric Private Limited is approved under sub-section (1) of Section 31 of the Code; the approved plan becomes effective from the date of the order and the moratorium ceases to have effect.

Moratorium under Section 14 - Overriding effect of the Insolvency and Bankruptcy Code (Section 238) - Whether rights claimed by the dissenting secured creditor (APSFC) arising from prior lawful possession and mortgage prevent the corporate debtor's assets being dealt with under the resolution plan - HELD THAT: - APSFC contended that it had taken lawful possession earlier and that the property vested in it under the State Financial Corporation Act so Section 14 moratorium and the Code could not apply to its assets. The Tribunal observed that the Code is a later, exhaustive central enactment on insolvency, and Section 238 gives the Code overriding effect over inconsistent laws. Once CIRP commenced and moratorium declared, recovery actions that would diminish corporate debtor's assets are prohibited and assets of the corporate debtor (whether mortgaged or not) are to be dealt with under the resolution plan. Consequently, secured creditors are bound by an approved resolution plan under Section 31. The Tribunal found that both secured creditors were treated equitably and that the CoC's commercial decision was within its domain. [Paras 45, 46, 48, 49, 50]

Objections of APSFC regarding prior possession and exclusive rights over assets do not prevail; secured creditors are bound by the approved resolution plan and the objections cannot sustain.

Commercial wisdom of the Committee of Creditors not amenable to judicial review - Extent of the Adjudicating Authority's jurisdiction to re-examine the commercial decision of the Committee of Creditors in approving a resolution plan - HELD THAT: - The Tribunal reaffirmed that the Adjudicating Authority is not to substitute its view for the commercial wisdom of the CoC and cannot re-appraise business or commercial decisions, which are not amenable to judicial review. The authority's scrutiny is circumscribed by Section 30(2); it may reject a plan only if it fails to meet those statutory requirements or contravenes law. The Tribunal applied this principle in upholding the CoC's approval, noting the plan was neither discriminatory nor perverse and met Section 30(2) requirements. [Paras 36, 37, 39, 54, 55]

Adjudicating Authority will not substitute its view for CoC's commercial decision; the plan is to be examined only for conformity with Section 30(2) and applicable law.

Eligibility and disqualification under Section 29A - Compliance certificate in Form H and Regulation 39 - Whether the Resolution Applicant is eligible under Section 29A to submit the resolution plan - HELD THAT: - The Resolution Applicant submitted an affidavit of eligibility and the Resolution Professional certified in Form H that the applicant does not fall within the ineligible categories under Section 29A. The Tribunal recorded the RP's certification and the applicant's declaration, and accepted that the Resolution Applicant is eligible to submit the plan. [Paras 9, 20, 32]

The Resolution Applicant is eligible under Section 29A; RP's Form H certifies compliance.

Performance security under Regulation 36B(4A) - Whether the Resolution Applicant must furnish the performance security required by Regulation 36B(4A) - HELD THAT: - Regulation 36B(4A) requires a Resolution Applicant to provide performance security. The RP certified that the Resolution Applicant undertook to submit the performance guarantee once the plan is approved. The Tribunal directed the Resolution Applicant to submit the performance guarantee within one week from receipt of the order in the specified amount in compliance with the Regulation. [Paras 33, 57]

Resolution Applicant directed to submit the performance guarantee in compliance with Regulation 36B(4A) within one week of receipt of the order.

Implementation and supervision by Monitoring Committee - What supervisory mechanism should be provided for implementation of the approved resolution plan - HELD THAT: - Although the Resolution Professional certified that clauses for implementation and supervision were present, the Tribunal, in the interest of effective implementation, directed constitution of a Monitoring Committee comprising three members: the Resolution Professional (as insolvency professional) and two representatives of the Resolution Applicant, chaired by the IP. The RP shall be a member for at least three months and the Committee is granted liberty to seek further directions from the Tribunal if necessary. The Tribunal also granted liberty to the Monitoring Committee to pursue reliefs beyond the Tribunal's jurisdiction before relevant authorities. [Paras 29, 58, 59]

Monitoring Committee of three members (RP and two representatives of the Resolution Applicant), chaired by the IP, is directed to supervise implementation; RP to remain a member for at least three months and may approach the Tribunal for further directions.

Final Conclusion: The Tribunal, having satisfied itself that the Resolution Plan meets the requirements of Section 30(2) and does not contravene law, approves the Resolution Plan submitted by M/s. Shiva Ferric Private Limited under Section 31(1); the plan is effective from the date of the order, the moratorium ceases to have effect, the Resolution Applicant must furnish the directed performance security, and a Monitoring Committee is constituted to supervise implementation.

Admission of Section 9 petition under Insolvency and Bankruptcy Code - Existence of dispute under Section 8(2) of the Code - Operational debt and default - Threshold limit for operational creditor - Limitation and cause of action - Imposition of moratorium under Section 14 of the Code - Appointment of Interim Resolution Professional - Operational creditor to furnish interim costs for IRP

Existence of dispute under Section 8(2) of the Code - Operational debt and default - No pre-existing dispute was brought to the notice of the Operational Creditor within ten days of receipt of the demand notice; the Corporate Debtor had defaulted on payment. - HELD THAT: - The Tribunal examined the compliance requirements of Section 8(2) and found that the corporate debtor did not, within ten days of receipt of the demand notice or invoice, bring to the operational creditor's notice any pre-existing dispute or record of pendency of suit/arbitration. The documentary record and pleadings show no reply to the demand notice and the operational creditor's claim that the last invoice was raised on 20.09.2016 remained unchallenged by any statutory notice under Section 8(2). Applying the principles in Mobilox Innovations Pvt. Ltd. v. Kirusa Software (P) Ltd., the absence of a pre-existing dispute meant the adjudicating authority could not treat an asserted later contentions as a bar to the Section 9 petition. [Paras 9, 11]

The contention of existence of a dispute was rejected and the corporate debtor was held to be in default.

Admission of Section 9 petition under Insolvency and Bankruptcy Code - Threshold limit for operational creditor - Limitation and cause of action - The Section 9 petition was admitted on the basis that the operational debt exceeded the statutory threshold and the petition was filed within limitation. - HELD THAT: - The Tribunal evaluated the three-fold enquiry prescribed for admission under Section 9: existence of an operational debt exceeding the minimum threshold, documentary evidence showing the debt is due and payable, and absence of a pre-existing dispute. It found the claimed amount exceeded the statutory minimum (greater than Rs. 1 lakh), the application was complete, and the petition filed on 02.08.2019 was within the limitation period from the date of cause of action (last invoice dated 20.09.2016). In view of these findings and in absence of a valid dispute raised under Section 8(2), the Tribunal concluded that the conditions for admission were satisfied. [Paras 11, 12]

The Section 9 petition was admitted and Corporate Insolvency Resolution Process (CIRP) of the corporate debtor was initiated.

Imposition of moratorium under Section 14 of the Code - A moratorium was imposed from the date of the order in accordance with the Code. - HELD THAT: - Upon admission of the petition and initiation of CIRP, the Tribunal applied the statutory consequence of admission by imposing the moratorium contemplated by Section 14. The moratorium bars institution or continuation of suits or proceedings against the corporate debtor, transfer or disposal of its assets, actions to enforce security interests and recovery of property occupied by the corporate debtor, subject to the exceptions and qualifications provided in the statute. [Paras 12]

Moratorium under Section 14 was imposed with immediate effect.

Appointment of Interim Resolution Professional - The proposed Interim Resolution Professional was confirmed and appointed. - HELD THAT: - The operational creditor proposed Mr. Manohar Lal Vij as the IRP and placed on record his consent, certificate and the absence of any pending disciplinary proceedings. The Tribunal, satisfied with the material on record and compliance with statutory requirements, confirmed and appointed the proposed IRP to perform duties under Sections 15, 17 and 18 of the Code and to file the requisite report. [Paras 13]

Mr. Manohar Lal Vij was appointed as Interim Resolution Professional.

Operational creditor to furnish interim costs for IRP - The operational creditor was directed to deposit interim funds to meet IRP's immediate expenses. - HELD THAT: - Recognising the need to meet the IRP's immediate costs upon commencement of CIRP, the Tribunal directed the operational creditor to deposit a specified sum to enable the IRP to discharge initial functions. The Tribunal recorded that such amount would be accountable and reimbursable by the Committee of Creditors as CIRP costs in due course. [Paras 14]

The operational creditor was ordered to deposit the prescribed interim amount to meet IRP's immediate expenses; the amount to be accountable and recoverable as CIRP costs.

Final Conclusion: The Section 9 petition was admitted: the Tribunal found no pre-existing dispute under Section 8(2), held that the operational debt and default met the statutory threshold and limitation requirements, imposed the moratorium, appointed the proposed IRP, and directed the operational creditor to deposit interim funds for the IRP's expenses.

Corporate Insolvency Resolution Process - Application under Section 10 of the Insolvency and Bankruptcy Code, 2016 - Adjudicating Authority's duty to verify documents filed in Form 6 - ulterior motive to defeat the object of the I&B Code - SARFAESI measures and invocation of security - veracity of financial statements and annexures - moratorium and appointment of Interim Resolution Professional - ineligibility and disqualification under Section 11

Application under Section 10 of the Insolvency and Bankruptcy Code, 2016 - Corporate Insolvency Resolution Process - ulterior motive to defeat the object of the I&B Code - Admissibility of the Section 10 petition filed by the corporate guarantor for initiation of CIRP - HELD THAT: - The Tribunal examined whether the corporate guarantor's petition satisfied the conditions for initiation of CIRP under Section 10. Although the applicant asserted existence of debt and default (as guarantor for the principal borrower) and sought moratorium and appointment of an Interim Resolution Professional, the Authority found material discrepancies in the records and considered the purpose of the filing. The applicant could not satisfactorily explain the substantial depletion in reserves shown between the balance sheets and discrepancies in authorised and paid-up capital and related annexures. The Tribunal emphasised that the I&B Code is for resolution and must not be used to protect assets given as security for another entity's borrowal. On the record, the Tribunal concluded that the petition was filed with the objective of protecting secured assets from SARFAESI enforcement and thereby defeating the primary object of the Code. In view of these findings the application was not admitted.

The Section 10 application filed by the corporate guarantor is dismissed on the grounds of veracity defects in the documents and an apparent ulterior motive to defeat the object of the I&B Code.

Adjudicating Authority's duty to verify documents filed in Form 6 - veracity of financial statements and annexures - Application under Section 10 of the Insolvency and Bankruptcy Code, 2016 - Extent of the Adjudicating Authority's scrutiny of documents filed under Rule 7/Form 6 when considering a Section 10 application - HELD THAT: - The Tribunal addressed the scope of its scrutiny under Rule 7 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 and observed that the Authority is not a mere stamping office. It must apply its mind to the veracity and completeness of the documents and annexures required by Form 6. While noting precedent that the Authority should ordinarily restrict itself to records prescribed under Section 10 and Form 6, the Tribunal applied Rule 7 to probe inconsistencies in the applicant's financial statements and related annexures. The inability of the applicant to explain those inconsistencies justified refusal to admit the petition.

The Adjudicating Authority may scrutinise and require verifiable compliance with Form 6/Rule 7 filings; on the facts, the Authority declined admission because the documents filed were not satisfactorily explained or corroborated.

Final Conclusion: The Tribunal dismissed the Section 10 petition filed by the corporate guarantor without costs, holding that the application was impermissibly motivated to protect secured assets from SARFAESI enforcement and that material discrepancies in the Form 6 filings justified refusal to admit the CIRP petition.

Operational debt and default - absence of a pre existing dispute - admission of application under Section 9 of the Insolvency and Bankruptcy Code, 2016 - declaration of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - public announcement and call for claims under Section 13(1)(b) and Section 15 - appointment of Interim Resolution Professional - duty of Registrar of Companies to refrain from striking off during CIRP

Operational debt and default - absence of a pre existing dispute - admission of application under Section 9 of the Insolvency and Bankruptcy Code, 2016 - The application under Section 9 was maintainable because an operational debt existed, default had occurred, and no dispute was shown to exist prior to the demand notice. - HELD THAT: - The Authority examined the documentary material filed by the operational creditor and found that invoices, delivery challans and related correspondence established a debt and that the corporate debtor had defaulted in payment. The record shows no dispute raised by the corporate debtor prior to or in response to the notice under Section 8, and the corporate debtor did not appear to controvert the claim. Applying the tests outlined in Mobilox Innovative (as cited), the adjudicating authority was satisfied that the requirements for admission under Section 9 - existence of an operational debt, documentary proof that it is due and payable, and absence of a pre existing dispute or pending suit/arbitration - were fulfilled, and therefore the application merited admission. [Paras 17, 18, 19, 21, 23]

Application under Section 9 admitted as the operational debt and default were established and no dispute existed.

Declaration of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - A moratorium was to be declared on initiation of the corporate insolvency resolution process, and its scope was specified. - HELD THAT: - Having admitted the petition, the Authority exercised its discretion to declare the moratorium contemplated by Section 14. The order prohibited institution or continuation of suits or proceedings against the corporate debtor, transfer or disposal of its assets, enforcement of security interests, and recovery of property in possession of the corporate debtor, while protecting ongoing supply of goods and essential services as permitted. The moratorium was directed to operate from receipt of the authenticated order until completion of the CIRP or until approval of a resolution plan or liquidation, as applicable. [Paras 22, 24, 25, 26]

Moratorium declared with the statutory prohibitions and temporal effect specified.

Public announcement and call for claims under Section 13(1)(b) and Section 15 - appointment of Interim Resolution Professional - An Interim Resolution Professional was appointed and directed to make the statutory public announcement and call for claims. - HELD THAT: - The applicant nominated an Interim Resolution Professional, and the Authority appointed the nominated person to act as IRP under Section 13(1)(c). The Authority further directed the IRP to make the public announcement of initiation of CIRP and to call for submission of claims as required under Section 13(1)(b) read with Section 15, and noted that public notice procedures (including paper publication) had been completed in accordance with directions. [Paras 14, 22, 27]

Ms. Anjali Choksi appointed as Interim Resolution Professional and directed to make the public announcement and call for claims.

Duty of Registrar of Companies to refrain from striking off during CIRP - Registrar of Companies was directed not to initiate or continue strike off proceedings against the corporate debtor while CIRP is pending. - HELD THAT: - The Authority directed registry to inform the Registrar of Companies that the respondent company was under corporate insolvency resolution process and that no proceedings for striking off its name (arising from non compliances) should be initiated or continued, since such action would be detrimental to liquidation and asset realisation for stakeholders. [Paras 29, 30]

Registrar of Companies to be informed and to refrain from striking off the corporate debtor during CIRP.

Final Conclusion: The Section 9 petition was admitted: the Authority found an established operational debt and default with no pre existing dispute, declared the moratorium, appointed the nominated Interim Resolution Professional who was directed to make the statutory public announcement and call for claims, and directed the Registrar of Companies to refrain from striking off the corporate debtor while the CIRP proceeds.

Operational debt - demand notice under Section 8 of the IBC - pre-existing dispute - admission of application under Section 9 of the IBC - limitation under Article 137 of the Limitation Act - moratorium under Section 14 of the IBC - appointment of interim resolution professional

Limitation under Article 137 of the Limitation Act - Whether the claim was barred by limitation - HELD THAT: - The Tribunal examined invoices and the dates of default as pleaded in Part IV of the application and supporting supplementary documents. The last tax invoice in respect of 30 GPS vehicle trackers was held to have been raised on 14th December, 2015 (typographical reference to 12th December treated as error). The petition filed on 11th December, 2018 was therefore within three years from the date of the last invoice. Reliance was placed on Article 137 of the Limitation Act and the Tribunal concluded that the application was within time insofar as the admitted claim arising from the invoice of December 2015 is concerned. The Corporate Debtor's plea of time-bar was accordingly rejected. [Paras 13, 15, 18, 19]

Claim not barred by limitation; application held to be within the period prescribed by Article 137 for the invoice dated 14th December, 2015.

Demand notice under Section 8 of the IBC - Whether the demand notice complied with Section 8 requirements - HELD THAT: - The Tribunal scrutinised the demand notice and the annexures and found that the unpaid operational debt and the invoices on which the claim rested were referred to and the invoice for 30 Hippo vehicle trackers was enclosed with the demand notice. The Tribunal held that Section 8 requires either delivery of a demand notice or a copy of the invoice and that it is not necessary to deliver both separately in all cases. Merely mentioning the unpaid operational debt in the demand notice on the basis of invoices was held sufficient to satisfy Section 8. [Paras 22, 23, 24, 26, 27]

Demand notice held to be valid and in compliance with Section 8 of the IBC.

Pre-existing dispute - operational debt - Whether a pre-existing dispute prevented admission under Section 9 - HELD THAT: - The Tribunal reviewed the Corporate Debtor's reply to the demand notice and found that it did not, within the ten-day period under Section 8(2), point to the existence of a pre-existing dispute or pending suit/arbitration prior to receipt of the demand notice. The Corporate Debtor's contentions related to quantity (asserting only 30 devices were supplied) and other factual counter-claims, but no pre-existing suit or arbitration or a clear pre-demand dispute was shown in the reply. Applying the principles in Mobilox and subsequent authority, the Tribunal held that a mere dispute as to quantum, unsupported by pre-existing proceedings or clear documentary evidence of a bona fide dispute, does not take the matter out of the Code. [Paras 30, 31, 33, 35, 36]

No pre-existing dispute established in the statutory sense; contention of pre-existing dispute rejected.

Admission of application under Section 9 of the IBC - moratorium under Section 14 of the IBC - Whether the petition under Section 9 should be admitted and CIRP initiated - HELD THAT: - Having found that there was an operational debt exceeding the statutory threshold, that the invoices and documentary evidence established default in respect of at least the admitted invoice (Rs. 3,67,200) and that no valid pre-existing dispute or defect in the demand notice barred the claim, the Tribunal held that the conditions for admission under Section 9 were satisfied. The Tribunal applied the statutory scheme and relevant precedents to conclude that it had no option but to admit the application. Consequently, CIRP was ordered and the moratorium under Section 14 was applied with the statutory consequences set out in the Code. [Paras 37, 38]

Section 9 petition admitted; CIRP of the Corporate Debtor initiated and moratorium imposed under Section 14.

Appointment of interim resolution professional - Appointment of Interim Resolution Professional and interim funding direction - HELD THAT: - The Operational Creditor had not proposed an IRP. The Tribunal appointed an Insolvency Professional empanelled with the IBBI as Interim Resolution Professional and directed him to perform the statutory functions under the Code. The Operational Creditor was directed to deposit an amount to meet the immediate expenses of the IRP, with the IRP to account for the expenditure and the amount to be recoverable as CIR costs from the Committee of Creditors. [Paras 39, 40]

IRP appointed and Operational Creditor directed to deposit funds for immediate IRP expenses; IRP to take statutory steps and file report.

Operational debt - Determination of exact amount/quantum of debt (remand for verification) - HELD THAT: - While the Tribunal admitted the Section 9 petition on the basis that default in relation to the invoice for 30 trackers was established and no pre-existing dispute barred the claim, it noted that disputes as to quantity and total quantum remain and are factual matters for the Interim Resolution Professional to examine. The Tribunal expressly recorded that the dispute regarding quantity/amount is for the IRP to decide the exact amount to which the Operational Creditor is entitled. [Paras 33]

Quantification and determination of the exact amount payable remitted to the IRP for verification and decision.

Final Conclusion: The Tribunal admitted the application under Section 9, holding the demand notice and proof of default in respect of the admitted invoice to be sufficient, rejected the plea of limitation and the contention of a pre-existing dispute in the statutory sense, imposed the moratorium under Section 14, appointed an IRP and directed interim funding; the exact quantum/quantity dispute is remitted to the IRP for verification and determination.

Cenvat credit of input services - allowability of input service credit when input services are used directly or indirectly in relation to providing output services - service tax liability on renting of immovable property - verification of payment challans and computation on remand

Cenvat credit of input services - allowability of input service credit when input services are used directly or indirectly in relation to providing output services - Entitlement to cenvat credit of Rs. 49,91,539/- - HELD THAT: - The Tribunal found that all the services in question constitute eligible input services for rendering the appellant's output services and that receipt of those input services was not in dispute. The adjudicating authority's disallowance proceeded on an incorrect factual premise that the mall was still under construction; however, the mall had been in operation since December 2005. Earlier disallowance relating to the construction stage was subsequently set aside by this Tribunal in a separate appeal. On the material placed before the Tribunal, including returns, input-service break-ups and supporting vouchers, the appellant was held entitled to the disputed cenvat credit.

Cenvat credit of Rs. 49,91,539/- is allowable and the disallowance in the impugned order is set aside.

Service tax liability on renting of immovable property - verification of payment challans and computation on remand - Validity of demand of service tax of Rs. 66,48,166/- and consequent directions for verification of payments - HELD THAT: - The Tribunal held that the demand was prima facie raised on the basis that the appellant was not entitled to the cenvat credit now found allowable. The appellant produced a computation chart and payment challans and had filed a declaration under VCES, 2013 for the relevant period; Revenue has not shown that the VCES declaration was rejected. On the record before it the Tribunal found that the appellant had deposited taxes as shown by the documents placed on record. While the demand was set aside, the Tribunal directed the adjudicating authority to verify the challans and the appellant's calculation chart and evidence of payment; the adjudicating authority is to point out any short payment, which shall then be deposited, and any excess paid shall be adjusted as per law.

Demand of Rs. 66,48,166/- is not tenable and the impugned demand is set aside; matter remitted to the adjudicating authority for verification of challans, computation and quantification with directions to the appellant to furnish calculation chart and payment evidence and for appropriate deposit or adjustment thereafter.

Final Conclusion: The appeal is allowed; the impugned order is set aside insofar as it disallowed the disputed cenvat credit and sustained the related service-tax demand. The adjudicating authority is directed to verify the appellant's payment challans and computation; any shortfall shall be deposited and any excess shall be adjusted in accordance with law.

Cenvat credit admissibility - Requirement of documents for issuance of show cause notice - subsequent notice under Section 73(1A) of the Finance Act - Renting of immovable property service - Imposition of penalty and recovery of interest consequent to disallowance of credit - CBEC circulars on credit in relation to construction of immovable property

Requirement of documents for issuance of show cause notice - subsequent notice under Section 73(1A) of the Finance Act - Validity of confirmation of disallowance of cenvat credit on the ground that original documents/evidence were not produced when such lack of production was not set out in the subsequent show cause notice. - HELD THAT: - The adjudicating authority confirmed the demand inter alia on the ground that the appellant had not produced documents/evidence for cenvat credit. The Commissioner (Appeals) found that the allegation of non-submission of documents was not part of the subsequent show cause notice dated 14.10.2014 and there is no material to show that documents for the subsequent period were called for and not produced. The Commissioner (Appeals) held that reliance on non-submission was an afterthought and beyond the charges framed in the impugned notice. The Tribunal recorded that these issues have been decided in favour of the appellant by the Commissioner (Appeals) and accepted by the Department, and therefore allowed the appeal and set aside the impugned order. The Tribunal did not remit the matter for fresh verification on this ground.

Confirmation of disallowance on the ground of non production of documents was unsustainable and set aside.

Cenvat credit admissibility - Renting of immovable property service - CBEC circulars on credit in relation to construction of immovable property - Whether cenvat credit taken during the disputed period was inadmissible because the appellant allegedly neither showed receipt/billed amounts for output taxable service nor was in a position to provide output service. - HELD THAT: - The Commissioner (Appeals) examined the ST-3 returns for the period July 2012 to March 2014 and found that the appellant had disclosed substantial receipts and had paid service tax on "Renting of Immovable Property Service." The Commissioner (Appeals) also noted that construction of the mall was completed in financial year 2009-2010 (completion certificate and departmental admission) and therefore the assumption in the show cause notice that the mall was under construction was factually incorrect. The Commissioner (Appeals) further observed that the law requires only that input services be used in providing a taxable output service, and the adjudicating authority had cited no specific legal provision to deny credit on the asserted factual premise. The Tribunal accepted the Commissioner (Appeals) findings and allowed the appeal. The Tribunal expressly refrained from adjudicating the merits of the CBEC circulars issue where the adjudicating authority had not given any finding.

Allegation that no billed/receipt amounts were shown and that credit was inadmissible on that basis was factually incorrect and the disallowance on this ground could not be sustained.

Imposition of penalty and recovery of interest consequent to disallowance of credit - Cenvat credit admissibility - Lawfulness of penalty and interest imposed following the disallowance of cenvat credit. - HELD THAT: - The Commissioner (Appeals) held that since the appellant was entitled to the cenvat credit in dispute, the imposition of penalty and recovery of interest consequent to the disallowance was not lawful. The Tribunal noted that the Commissioner (Appeals)'s order in this regard has been accepted by the Department and, on that basis, allowed the appeal and set aside the impugned adjudication order including penalties and interest.

Penalty and interest imposed consequential to the disallowance were held not sustainable and set aside.

Final Conclusion: The Tribunal, noting that the Commissioner (Appeals) had decided the relevant issues in favour of the appellant (and that the Department accepted that appellate order), allowed the appeal, set aside the impugned adjudication order and directed that the appellant be given consequential benefits in accordance with law.

Refund of CENVAT credit - debit from CENVAT credit account at the time of making the claim - limitation on refund amount - balance at end of quarter or at time of filing - Notification No.27/2012-CE(NT) paragraph 2(g) - Notification No.27/2012-CE(NT) paragraph 2(h) - export of services with receipt of foreign exchange - interest on delayed refund under Section 11BB of the Central Excise Act, 1944

Refund of CENVAT credit - debit from CENVAT credit account at the time of making the claim - limitation on refund amount - balance at end of quarter or at time of filing - Notification No.27/2012-CE(NT) paragraph 2(g) - Notification No.27/2012-CE(NT) paragraph 2(h) - export of services with receipt of foreign exchange - Whether the refund claims of CENVAT credit were rightly rejected on the ground that the ST-3 showed nil closing balance and that the appellant had not debited the CENVAT credit account prior to filing the claim - HELD THAT: - The Tribunal found no dispute as to export of services and receipt of foreign exchange. Examination of the ST-3 returns and the CENVAT credit account showed that the appellant had in fact debited the CENVAT credit account prior to filing the refund claims, and the ST-3 returns reflected the reversals. The Commissioner had interpreted paragraph 2(g) and 2(h) of Notification No.27/2012-CE(NT) incorrectly by treating the nil closing balance in ST-3 as incompatible with a valid claim, whereas the Notification requires only that the refund claimed not exceed the balance lying in the CENVAT account at the end of the quarter or at the time of filing and that the amount claimed be debited at the time of making the claim. The Tribunal held that the facts demonstrate compliance with these conditions and that the Revenue's reliance on decisions where debit was not effected was inapplicable. For these reasons the impugned rejection was set aside and the appeals allowed on merits. [Paras 6]

The rejection of the refund claims was unsustainable; the appellant had debited the CENVAT account as required and the appeals allowing the refund claims were allowed.

Interest on delayed refund under Section 11BB of the Central Excise Act, 1944 - Whether the appellant is entitled to interest on delayed refund - HELD THAT: - Following the ratio of the Supreme Court in Ranbaxy Laboratories Ltd. (and subsequent authorities cited), the Tribunal held that interest on delayed refund is payable under Section 11BB of the Central Excise Act, 1944 from the expiry of three months from the date of receipt of the refund application under Section 11B(1), and not from the date of the refund order or appellate order. Applying that principle, the appellant is entitled to interest on the delayed refund. [Paras 7]

The appellant is entitled to interest on delayed refund as per the authority cited, and interest shall be paid in accordance with the Ranbaxy ratio.

Final Conclusion: Both appeals are allowed: the impugned orders rejecting the refund claims are set aside and refunds are to be granted; the appellant is also entitled to interest on delayed refunds in accordance with the Supreme Court's decision in Ranbaxy Laboratories Ltd., as applied by the Tribunal.

Includibility of transportation charges in assessable value - place of removal under Central Excise law - transfer of property under the Sale of Goods Act - interpretation of place of removal in light of judicial precedent

Includibility of transportation charges in assessable value - place of removal under Central Excise law - transfer of property under the Sale of Goods Act - Whether freight/transportation charges from seller's premises to buyer's premises are includable in the assessable value when contracts provide delivery at buyer's premises. - HELD THAT: - The Tribunal followed the binding reasoning of the Hon'ble Supreme Court as applied in earlier Bench decisions and concluded that the buyer's premises can never be the place of removal for the purposes of Central Excise valuation. The Court's analysis, relying on the precedent, distinguishes the place where goods are sold from the place of removal and observes that the statutory descriptions of place of removal refer to seller-related locations (factory gate, depot, consignment agent) and not to the buyer's premises. Consequently, where goods are removed from the seller's premises, freight incurred up to the buyer's premises cannot be included in the assessable value even if the contract provides delivery at the buyer's premises and property is said to pass there under the Sale of Goods Act. Applying this settled principle to the facts for the period under audit, the Tribunal found no reason to deviate from its earlier decisions and set aside the demand made on account of inclusion of such transportation charges.

Freight from seller's premises to buyer's premises is not includable in assessable value; the impugned demand is set aside and the appeal allowed.

Final Conclusion: The Tribunal allowed the appeal, holding that transportation charges up to the buyer's premises are not includable in the assessable value for the audit period 2012-13 to 2014-15; the impugned demand was set aside with consequential relief as per law.