TaxTMI Updates e-Newsletter
Oct 23,2026

Ex parte GST assessment without notice of adjourned hearing - Personal hearing - Validity of an ex parte GST assessment order where no notice was given of the adjourned hearing date - HELD THAT: - The assessment order was not passed on the date fixed for hearing, and the petitioner was not notified of the subsequent hearing date. Applying the coordinate-Bench decision on comparable facts, the Court held that the failure to communicate the next date deprived the petitioner of an opportunity of personal hearing and resulted in an ex parte order by the authority's own conduct. [Paras 3, 5]

The impugned order was quashed and set aside, with a direction to afford a personal hearing and pass a reasoned order in accordance with law.

Final Conclusion: The writ petition was disposed of by quashing the ex parte GST assessment order and requiring the authority to grant a personal hearing before passing a reasoned order.

General penalty exceeding statutory maximum - Validity of the general penalty imposed after filing of the return and payment of statutory late fee, where the penalty exceeded the maximum permissible limit under the U.P. GST Act - HELD THAT: - The Court noted that the return had been filed and the late fee paid in accordance with law. It held that the penalty imposed exceeded the maximum limit prescribed under the U.P. GST Act; a general penalty cannot be sustained beyond that statutory limit. [Paras 3, 4]

The impugned show cause notice and penalty order were quashed and set aside.

Final Conclusion: The impugned show cause notice and penalty order were quashed, and the writ petition was disposed of.

GST Demand beyond show cause notice - Section 75(7) of the UPGST Act - Confirmation of GST demand on a ground not proposed in the DRC-01 show cause notice - HELD THAT: - The tax demand confirmed in the impugned order had not been proposed at the stage of issuance of DRC-01 and was founded on a ground different from that stated in the show cause notice. This constituted a violation of the mandatory requirement under Section 75(7) of the UPGST Act and an incurable defect in the proceedings. [Paras 5, 6, 7]

The impugned order was quashed, with liberty to the revenue to issue a fresh show cause notice in accordance with law.

Final Conclusion: The writ petition was allowed and the demand order was quashed for confirming a demand beyond the ground proposed in the show cause notice.

Condonation of delay in statutory GST appeal - Fresh appellate consideration on merits - Condonation of delay in filing a statutory GST appeal where the delayed filing was attributed to the proprietor attending to a critically ill spouse - HELD THAT: - Acting upon the parties' concession and having regard to the explanation furnished for the delayed filing, the Court condoned the delay without entering into the merits of the underlying dispute. [Paras 12, 14, 16, 17]

The appellate order dismissing the appeal as time-barred was set aside and the appeal was remitted for fresh decision on merits, subject to deposit of costs within the stipulated time; non-compliance would deprive the petitioner of the benefit of the order.

Final Conclusion: By consent of the parties, the delayed appeal was restored for adjudication on merits subject to the condition of costs. The Court left all merits open for determination by the appellate authority.

Demand exceeding show-cause notice - Jurisdictional limit on GST adjudication - Validity of GST adjudication confirming interest and penalty beyond the demand proposed in the show-cause notice

HELD THAT: - The statutory restriction against confirming a demand exceeding that proposed in the show-cause notice is mandatory. Once the notice had not proposed the interest and penalty subsequently confirmed, the adjudicating authority lacked jurisdiction to confirm a demand in excess of the proposal. [Paras 3, 4]

The adjudication order was set aside and the matter was remitted for a fresh order after affording the petitioner an opportunity of hearing.

Final Conclusion: The writ petition was disposed of by setting aside the impugned adjudication order and remitting the matter for fresh adjudication.

Statutory ceiling on penalty - Penalty exceeding statutory limit

Validity of penalty for delayed or non-filing of the GSTR-3B return after filing of the return and payment of late fee - HELD THAT: - The Court noted that the return had been filed and the late fee paid in accordance with law, and that the penalty imposed exceeded the maximum limit under the U.P. GST Act, 2017. [Paras 3, 4]

The show-cause notice and the penalty order were quashed and set aside.

Final Conclusion: The writ petition was disposed of by quashing the impugned show-cause notice and penalty order.

Service of show-cause notice after cancellation of GST registration - Electronic service through the Common Portal - Ex parte GST adjudication - Validity of ex parte GST adjudication and penalty proceedings where show-cause notices were served only through the Common Portal after cancellation of the taxpayer's registration - HELD THAT: - After cancellation of registration, a person may be unable, and is not obliged, to access the Common Portal using the cancelled registration. Service only through that portal may consequently leave the person unaware of proceedings. The Commissioner's binding instruction requiring physical service in such cases accorded with this position. [Paras 5, 8]

The impugned adjudication and penalty orders were set aside. The petitioner was permitted to submit final replies, seek relied-upon documents or cross-examination where required, and receive adequate advance notice of personal hearing before fresh reasoned orders are passed.

Final Conclusion: The writ petition was disposed of by setting aside the ex parte adjudication and penalty orders and directing fresh adjudication after affording the petitioner a meaningful opportunity to respond and be heard.

Multiple electronic personal-hearing notices - Procedural safeguards in tax appellate proceedings

Issuance through the tax portal of three separately numbered and digitally signed notices on the same date, specifying different dates and times for personal hearing in the same appellate proceedings - HELD THAT: - The Court found it seriously concerning that the portal permitted generation of three notices on the same date, within a short interval, while intimating different hearing dates and times. Such facility was regarded as a serious lacuna requiring an explanation regarding the portal's functioning and the process by which the competent officer could generate such notices. [Paras 3, 4]

The Chief Commissioner of State Tax was directed to file a report, and the appellate authority was directed to pass a fresh appellate order.

Final Conclusion: The Court sought a report on the portal's notice-generation process and directed a fresh appellate order, reserving the question of exemplary costs if the explanation proved unsatisfactory.

Rectifiable mistake arising from double taxation of turnover - Rectification of double taxation of turnover allegedly assessed in respect of the Tirunelveli and Coimbatore units - HELD THAT: - If the assessee establishes that turnover already brought to tax in one unit has again been assessed in the other unit, the duplication constitutes a rectifiable mistake under Section 161 of the Act. The Department must examine the assessee's records holistically, notwithstanding that the units have separate registrations or are assessed under different charges, to ensure that the turnover suffers tax only once. [Paras 11, 12, 14]

The assessment order was set aside to the limited extent of the alleged overlapping turnover and remitted for fresh examination, reworking of turnover and orders on that aspect alone; the assessee was left to pursue remedies in respect of other issues.

Final Conclusion: The writ appeal was partly allowed, with a fresh determination directed on the alleged double taxation of turnover between the two units.

Duplicate adjudication of GST tax proposals - Input tax credit mismatch - Duplication of the tax proposals concerning reconciliation of GSTR-1 with GSTR-3B returns and excess input tax credit claimed in GSTR-3B as compared with auto-populated GSTR-2A

HELD THAT: - The Court found a complete overlap between the two principal proposals in the impugned order and those already dealt with in the earlier order, against which an appeal was pending. A second adjudication of the same proposals could not be sustained. [Paras 6]

The impugned order was quashed insofar as it related to reconciliation of GSTR-1 with GSTR-3B and excess input tax credit.

Final Conclusion: The writ petition was disposed of by quashing the impugned order to the extent it duplicated the earlier adjudication on the two principal tax proposals.

GST proceedings against deceased sole proprietor - Jurisdiction to initiate proceedings against legal heir

Validity of demand proceedings for alleged wrongful availment of input tax credit initiated against a deceased sole proprietor despite the authority's knowledge of the death and of the legal heir - HELD THAT: - The authority had been informed of the proprietor's death in the cancellation proceedings and was also aware that the legal heir had pursued an appeal in respect of earlier proceedings. Initiating fresh proceedings in the name of the deceased proprietor was therefore uncalled for and suffered from lack of jurisdiction. [Paras 7, 8]

The impugned intimation, show-cause notice and demand order were quashed, with liberty to the authority to initiate proceedings against the legal heir as permissible in law.

Final Conclusion: The writ petition was disposed of by quashing the proceedings initiated against the deceased proprietor. The merits of the alleged input tax credit claim and all contentions regarding proceedings against the legal heir were left open.

Effective service of GST notices - Personal hearing before ex parte GST assessment - Validity of a GST assessment passed without a personal hearing where the taxpayer did not respond to notices uploaded on the GST portal

HELD THAT: - Although uploading notices on the portal is a sufficient mode of service, where repeated portal notices receive no response, the officer must explore other statutorily authorised modes of service under Section 169(1), preferably RPAD, to ensure effective service. Passing an ex parte assessment merely by completing such formalities, without affording a personal hearing, was held to be inadequate. [Paras 7, 9, 10, 11]

The assessment and consequential order were set aside and remanded for fresh consideration without adjudication on merits, subject to payment of 15% of the disputed tax and an opportunity to file objections and receive clear notice of personal hearing.

Final Conclusion: The writ petition was disposed of by setting aside the impugned orders and remitting the matter for fresh decision, subject to the stipulated payment and compliance with the requirements of reply and personal hearing.

Prospective omission of Rule 96(10) of the CGST Rules, 2017 - IGST refund on exports under Advance Authorisations

Entitlement to IGST refund on exports made using Advance Authorisation imports after the prospective omission of Rule 96(10) of the CGST Rules, 2017 - HELD THAT: - The omission of Rule 96(10) was held to operate prospectively, and, there being no saving or sunset clause, the omitted restriction could not sustain rejection of the refund claim. Applying the settled precedent on the effect of the omission, the petitioner was held entitled to have its refund claim processed. Case followed MAC Industry [2026 (9) TMI 799 - GUJARAT HIGH COURT] as well as Maldeep Catalysta Private Limited [2026 (9) TMI 76 - GUJARAT HIGH COURT] [Paras 6, 9]

The rejection order was quashed and the respondents were directed to process the refund claim within 12 weeks.

Final Conclusion: The writ petition was allowed, the impugned rejection of the refund claim was quashed, and the claim was directed to be processed within 12 weeks.

Effective opportunity of personal hearing in GST assessment - Validity of the GST assessment order confirming the show-cause proposals without hearing the petitioner, who could not avail the scheduled hearing owing to ill health and the consultant's failure to appear

HELD THAT: - Although opportunities for personal hearing had been granted, the petitioner could not avail them for the stated reasons. The assessment order was consequently passed without hearing the petitioner and by confirming the proposals in the show-cause notice. [Paras 6, 7]

The assessment order was set aside and remitted for fresh consideration, subject to deposit of a portion of the disputed tax; the petitioner was permitted to file objections with supporting documents, following which a clear 14-day notice of personal hearing must be issued and fresh orders passed on merits in accordance with law.

Final Conclusion: The writ petition was disposed of by setting aside the assessment order and remanding the matter for fresh adjudication subject to the stipulated conditions.

GST adjudication without participation - Input tax credit reconciliation - Restoration of GST adjudication concerning mismatch between input tax credit availed in Form GSTR-3B and that reflected in Form GSTR-2A, to enable submission of reconciliation and supporting documents after non-participation in the proceedings

HELD THAT: - Having regard to the bona fides pleaded for the petitioner's non-participation following the change in its Board, and its assertion that it could produce reconciliation and documents supporting the genuineness of the underlying transactions, the Court considered that an opportunity should be granted for adjudication without protraction. [Paras 4]

The adjudication and demand orders were quashed, subject to the petitioner filing responses with reconciliation and supporting documents within the stipulated period and depositing 10% of the tax covered by the impugned adjudication orders, subject to the outcome of the proceedings.

Final Conclusion: The petition was allowed in part and the impugned orders were quashed to permit fresh adjudication subject to the stipulated conditions.

Reassessment under sections 147/148 based exclusively on search material - Satisfaction note u/s 153C - Reopening of completed assessments of a third person under sections 147/148 solely on incriminating material found during searches of other entities, without a satisfaction note under section 153C

HELD THAT: - Where reassessment of an other person is founded exclusively on incriminating material found during a search of another person, the special mechanism under section 153C must be followed. In the absence of the statutory satisfaction note, the Assessing Officer cannot directly invoke sections 147/148 on such material; those provisions may be invoked only on independent material obtained from another source. As no material apart from the search material was relied upon, the reopening was without jurisdiction. [Paras 7, 8]

The impugned reopening notice and the order rejecting the objections were quashed.

Final Conclusion: The writ petitions were allowed, and the reassessment proceedings founded solely on search material without compliance with the special statutory mechanism were quashed.

Reassessment jurisdiction - alleged sham mutual-fund transactions - Reason to believe v/s reason to suspect - live nexus with assessee-specific material

Jurisdiction to initiate reassessment on survey information alleging artificial inflation of mutual-fund distributable surplus and fictitious short-term capital loss claimed by an investor - HELD THAT: - The material relied upon attributed accounting manipulation to the mutual fund but did not disclose any material showing that the petitioner knowingly participated in a sham transaction to reduce tax liability or book a fictitious loss. A belief of income escaping assessment must have a rational nexus or live link with assessee-specific material; vague allegations concerning the fund, without even a prima facie correlation to the petitioner, could not sustain reassessment. [Paras 9, 10, 11]

The order under section 148A(d) and the consequential notice under section 148 were quashed.

Final Conclusion: The writ petition was allowed and the reassessment initiation for A.Y. 2016-17, founded on uncorrelated allegations concerning the mutual fund, was quashed.

Reassessment proceedings - order beyond scope of show-cause notice - Natural justice - opportunity to answer new grounds

Validity of the reassessment order and consequential notice founded on grounds not contained in the show-cause notice - HELD THAT: - The show-cause notice was confined to alleged unexplained high-value financial transactions. After the assessee explained that the IPO transactions were funded by a non-banking financial company, the Assessing Officer shifted the enquiry to the source of margin money as an unsecured loan and to the proposed disallowance of interest. As these new matters were not put to the assessee for response, the order travelled beyond the scope of the notice and breached the principles of natural justice. [Paras 16]

The reassessment order and consequential notice were quashed, with liberty to the Revenue to issue a fresh show-cause notice on the margin money and proposed interest disallowance, if otherwise permissible in law.

Final Conclusion: The writ petition was allowed and the reassessment order and consequential notice were set aside for having proceeded on grounds beyond the show-cause notice.

Reassessment based on seized third-party material - Reassessment based on broker's inquiry register - Live nexus between seized material and assessee -

Validity of reassessment for alleged on-money in purchase of land based solely on a broker's seized inquiry-register entry - HELD THAT: - A notice under Section 148 must rest on material having a live and direct nexus with the assessee and the alleged escapement of income; it cannot be founded on conjectures. The seized entry materially predated the registered purchase, recorded only an asking rate for land available for sale, covered several survey numbers and a substantially larger area, and did not identify the petitioner or the actual sellers. The broker's statement also did not connect the petitioner with the entry, while no inquiry was shown to have been made from the persons named therein. The entry therefore had no direct or indirect link with the petitioner's transaction. [Paras 13, 14, 16, 17, 18]

The reassessment notices for Assessment Year 2022-23 were held unsustainable and quashed.

Final Conclusion: The reassessment notices issued under Section 148 for Assessment Year 2022-23 were quashed, and the writ petitions were allowed.

Period of Limitation for reassessment based on third-party search material - Ten-year period under search assessment provisions - Pre-amendment limitation safeguard for reassessment notices - Inclusion of search assessment year in ten-year computation

HELD THAT: - The first proviso to Section 149(1) preserves the limitation applicable under the pre-amendment law for an assessment year commencing on or before 1 April 2021; consequently, a post-amendment search does not permit the Revenue to rely solely upon the substituted ten-year reassessment period. The six-year block under Section 153A operates for assessment years immediately preceding the search assessment year, whereas the extended ten-year block under Explanation 1 is reckoned from the end of the search assessment year and includes that year as the first year. Applying this distinct statutory computation, A.Y. 2012-13 fell outside the ten-year block; it was also beyond the former six-year period for reassessment. [Paras 10, 11, 12, 13, 14]

The notice and all consequential proceedings were quashed as barred by limitation.

Final Conclusion: The writ petition was allowed and the reassessment notice for A.Y. 2012-13, together with consequential proceedings, was quashed as barred by limitation.

Reassessment based solely on seized material - Satisfaction note for assessment of other person

Validity of reassessment of an assessee on the sole basis of material seized during a search of group entities, without a satisfaction note recorded by the Assessing Officer of the searched person - HELD THAT: - Where incriminating material found in a search is to be used against another person, the Assessing Officer of the searched person must record and transmit the satisfaction note for proceedings under the special search-assessment scheme. Reassessment under sections 147 and 148 can be founded only on independently obtained material and cannot be invoked on the seized material. Since no satisfaction note was recorded and there was no material other than that obtained in the search, the reopening was impermissible. [Paras 8, 9]

The reassessment notice and the order under section 148A(d) were quashed.

Final Conclusion: The writ petition was allowed, and the reassessment notice and order were quashed.

TP Adjustment - Export incentives as operating income for arm's length price determination - Functional comparability of gherkin exporters in transfer-pricing analysis

Export incentives as operating income for arm's length price determination - Treatment of export incentives earned from gherkin exports to the associated enterprise as operating income for determining the arm's length price - HELD THAT: - Eligibility for the incentives arose solely from the assessee's export activity and bore a direct nexus with its business of growing, processing and exporting gherkins. The incentives could not be excluded from operating income merely because they were granted under Government policy. [Paras 5]

The direction to treat export incentives as operating income was upheld, and the question was answered in favour of the assessee.

Functional comparability of gherkin exporters in transfer-pricing analysis - Validity of the remand for fresh consideration of transfer-pricing comparables in respect of the gherkin export business - HELD THAT: - The comparables selected by the assessee, including the proposed additional comparables, carried on the business of growing, processing and exporting gherkins, whereas the comparables selected by the Transfer Pricing Officer were engaged in food processing and were not functionally similar. No perversity was shown in the Tribunal's finding or its remand for fresh consideration. [Paras 6]

The Tribunal's remand for fresh consideration of the comparables was sustained, and the question was answered against the Revenue.

Final Conclusion: The Revenue's appeal was dismissed.

TP Adjustment - functional comparability of comparables - Selection and exclusion of comparables under Rule 10B - Exclusion of M/s. Larsen and Tourbo Infotech Ltd. as a comparable for the assessee's software development services -

HELD THAT: - Selection or exclusion of comparables is a factual and data-driven exercise which must conform to Rule 10B. The company proposed as comparable operated across diverse business segments, including services, industrials and telecom product engineering, and in domains distinct from the assessee's software development services. The Tribunal's finding of functional dissimilarity was not shown to be perverse. Case followed SAP LABS INDIA PRIVATE LIMITED [2026 (9) TMI 711 - KARNATAKA HIGH COURT] [Paras 4, 5]

The exclusion of M/s. Larsen and Tourbo Infotech Ltd. was sustained; the substantial questions were answered in favour of the assessee and against the Revenue.

Final Conclusion: The Revenue's appeal was dismissed, sustaining the exclusion of the functionally dissimilar company from the comparable set.

Faceless assessment - consideration of timely filed response - Principles of natural justice

Validity of the faceless assessment making an addition in respect of share allotment money without considering the assessee's response filed within the time allowed - HELD THAT: - The response had been uploaded on the e-filing portal within the stipulated time, with an e-proceedings acknowledgement and departmental email confirming its filing. The final assessment nevertheless recorded that no reply had been furnished and did not consider or refer to the response. This was contrary to the record and constituted a gross violation of the principles of natural justice. [Paras 11, 12]

The assessment order was quashed and set aside.

Final Conclusion: The petition was allowed and the impugned assessment order for Assessment Year 2018-19 was quashed for failure to consider the timely filed response.

Reassessment notice - disclosure of material and opportunity to respond

Reassessment proceedings founded on alleged undisclosed business turnover and further adverse propositions concerning partner-firms, expenses and unsecured loans without disclosure of the underlying material or a prior opportunity to respond - HELD THAT: - The assessee had specifically disputed the treatment of bank credits as turnover and offered to furnish further particulars upon being informed of the computation. The computation and material forming its basis were not supplied, while the order introduced propositions outside the show-cause notice. An adjudication on the fitness for reassessment must be preceded by notice of the definite allegations and the material relied upon; otherwise, the reassessment would assume the character of a roving enquiry. [Paras 8, 9, 10, 11]

The order under section 148A(3), the prior approval and the notice under section 148 were quashed, and the proceedings were restored for fresh consideration after furnishing the computation and underlying information, affording reasonable opportunity to respond, and examining all materials before grant of prior approval.

Final Conclusion: The petition was partly allowed and the reassessment proceedings were restored for reconsideration in accordance with the requirements of notice, disclosure of material and opportunity to respond. All contentions were left open.

Reassessment proceedings - disclosure of material and allegations - Section 148A inquiry - definite basis for reassessment

Validity of the order initiating reassessment where the computation of alleged undisclosed turnover and the material supporting adverse propositions were not furnished to the petitioner - HELD THAT: - The notice was confined to alleged non-disclosure of business turnover based on a difference between bank credits and reported turnover. Though the petitioner disputed that all bank credits constituted turnover and offered to furnish further details, the computation was not supplied and further particulars were not sought. The order, however, proceeded on additional propositions concerning use of firms for parking and rotation of funds, claimed expenses and unsecured loans, which were outside the notice. An adjudication under Section 148A(3) leading to reassessment must be preceded by notice of the relevant propositions and supporting material; otherwise, the reassessment would assume the character of a roving inquiry rather than an inquiry on definite aspects. [Paras 8, 9, 10, 11]

The order under Section 148A(3), the prior approval and the notice under Section 148 were quashed and the proceedings restored for fresh consideration after furnishing the computation and underlying information and allowing a reasonable opportunity to respond; the specified authority was directed to examine all material before granting prior approval.

Final Conclusion: The petition was partly allowed. The reassessment initiation was quashed and remitted for fresh consideration with disclosure of the material relied upon and due opportunity to the petitioner; all contentions were left open.

Reassessment beyond three years for escaped income below statutory threshold - Validity of reassessment proceedings initiated beyond three years where the alleged escaped income from the sale of jointly owned immovable property was below the prescribed threshold

HELD THAT: - After accepting the assessee's explanation regarding her fractional share in the sale consideration and computing the resultant capital gain, the Assessing Officer had determined that the alleged escaped income was below the threshold prescribed for reopening beyond three years. Section 149(1)(b) consequently barred issuance of the reassessment notice. The assessee's failure to respond to the initial notices did not absolve the Assessing Officer of the statutory duty to apply the available material and discontinue proceedings once the bar became evident. [Paras 8, 9, 10, 11, 12]

The reassessment notice and the order passed for its issuance were set aside.

Final Conclusion: The writ petition was allowed, and the reassessment notice and the order authorising its issuance were quashed as barred by the limitation applicable to escaped income below the statutory threshold.

Reassessment order u/s 148A(3) - non consideration of explanation and supporting documents - Validity of the order treating the case as fit for reassessment and the consequential notice where the assessee's explanation and balance-sheet disclosure of loan transactions were not examined

HELD THAT: - Before concluding that a case is fit for issuance of notice under section 148, the assessing officer must examine the documents furnished in response and record cogent reasons justifying such conclusion. The specific explanation that the relevant bank credits represented disclosed capital transactions and other non-turnover receipts was not considered; clarification ought to have been sought on the stated absence of an increase in capital or unsecured loans before forming the requisite opinion. [Paras 6, 7, 8]

The order under section 148A(3) and the consequential notice under section 148 were quashed, the prior approval stood dissolved, and the matter was restored for consideration of the explanation and any further clarification.

Final Conclusion: The petition was partly allowed by quashing the reassessment order and notice, with a direction to reconsider the assessee's explanation in accordance with the observations made.

Bank-account withholding for income-tax recovery - Due process - Validity of withholding the assessee's bank accounts solely on an intimation from the Income-tax Department, without due proceeding or demonstrated authority under law

HELD THAT: - The Court held that initiation of proceedings under the Income-tax Act does not automatically warrant withholding of an assessee's bank accounts. The bank's decision was based solely on the departmental intimation, without shown due proceeding or exercise of any statutory provision or rule. [Paras 11]

The bank's communication withholding the accounts was set aside and the bank was directed to restore them as operational; the income-tax proceedings against the assessee were left open.

Final Conclusion: The writ petition was disposed of by setting aside the withholding of the assessee's bank accounts and directing their restoration. The merits of the income-tax proceedings were not examined.

Limitation for reassessment notices under the transitional regime

Validity of reassessment proceedings for Assessment Year 2016-17 initiated after expiry of the six-year limitation applicable to pre-1 April 2021 assessment years - HELD THAT: - The transitional proviso preserves the earlier six-year limitation for assessment years up to 2021-22; consequently, a notice under the new reassessment regime cannot be issued where it was already time-barred under the former regime. Since the six-year period for the relevant assessment year expired on 31.03.2023, the subsequent reassessment notice was barred by limitation. [Paras 3, 5]

The order under Section 148A(d) and the consequential reassessment notice were quashed as time-barred.

Final Conclusion: The writ petition was allowed and the reassessment proceedings for Assessment Year 2016-17 were quashed as time-barred.

Prospective export restrictions and vested rights - Legitimate expectation and promissory estoppel against change in foreign trade policy - Reasonableness of strategic-mineral export licensing restrictions - ICLC-based transitional protection under foreign trade policy - Duty to determine restricted-export authorisation applications

Prospective export restrictions and vested rights - Prospective application of the restriction on export of Grade A and Grade B Baryte and the existence of a vested right in stock acquired before the notification - HELD THAT: - The notification governed exports made on and after its effective date and neither altered completed exports nor disturbed ownership of the stock. Procurement and storage at the port, without shipping bills, loading or completion of mandatory export formalities, did not create an accrued right to export under the earlier free regime; export remained governed by the policy prevailing on the date of export. [Paras 6]

The restriction was held prospective, and no vested or indefeasible right to export the stock without authorisation had accrued.

Legitimate expectation and promissory estoppel against change in foreign trade policy - Availability of legitimate expectation and promissory estoppel to prevent the change in the export policy for Baryte - HELD THAT: - A policy may be changed in public interest unless the change is arbitrary, mala fide or contrary to statute. The existing free classification was not a clear promise that exports would remain unrestricted or that a further grace period would be granted, and export tenders issued by a State undertaking could not amount to an assurance by the Union regarding continuation of the export policy. [Paras 7]

The pleas of legitimate expectation and promissory estoppel were rejected.

Reasonableness of strategic-mineral export licensing restrictions - Proportionality of export controls - Constitutional validity of moving Grade A and Grade B Baryte from the free export category to a restricted licensing category without a special grace period - HELD THAT: - Reasons were not required to be stated in the notification itself; the relevant consideration was the existence of a rational basis. The restriction was supported by concerns regarding depletion of strategic mineral reserves, national security and resource planning. The policy already contained transitional provisions, and the measure did not prohibit exports but regulated them through licensing, which was a less restrictive means of pursuing the legitimate public-interest objective. [Paras 8]

The notification was upheld as non-arbitrary and as a reasonable restriction in the general public interest.

ICLC-based transitional protection under foreign trade policy - Reasonable classification for transitional export protection - Validity of restricting transitional export protection to exporters holding an Irrevocable Commercial Letter of Credit and the eligibility of an exporter without such instrument - HELD THAT: - Transitional protection was a limited concession to the ordinary rule that the policy prevailing on the date of export applies. An ICLC constitutes a bank-backed, irrevocable and independently verifiable commitment, whereas private purchase orders, advance payments and open-account arrangements do not provide the same assurance. This distinction supplied an intelligible differentia rationally connected with identifying irreversible export commitments. An exporter was not required to anticipate a policy change, but eligibility depended upon holding a valid ICLC when the restriction took effect. [Paras 9]

The ICLC condition was upheld, and the exporter, not holding an ICLC on the effective date, was held ineligible for transitional protection.

Duty to determine restricted-export authorisation applications - Restriction not to operate as de facto prohibition - Whether the pending application for restricted export authorisation could be kept undecided indefinitely pending review of the Baryte export policy? - HELD THAT: - A restricted export regime remains lawful only if applications for authorisation are decided within a reasonable time. Freezing all applications for an open-ended period would convert a restriction into a prohibition in practice, although the Government had elected to regulate rather than prohibit exports. The licensing authority was required to exercise its discretion urgently and fairly, having regard to the stated transaction-specific hardship and national-security considerations. [Paras 10]

The licensing authority was directed to decide the application within four weeks after a personal hearing and by a reasoned order; pendency of the policy review could not by itself justify leaving it undecided.

Final Conclusion: The challenges to the notification and the ICLC-based transitional provision were rejected. The writ petition was disposed of by requiring a time-bound decision on the restricted-export authorisation application, while refusing licence-free clearance of shipping bills.

Date of import under the Foreign Trade Policy - Prospective application of import restrictions - Executive clarification overriding the Foreign Trade Policy

Date of import under the Foreign Trade Policy - Prospective application of import restrictions - Applicability of the notification restricting import of studded platinum jewellery to goods dispatched and arriving in India before its publication, although the bills of entry were filed thereafter - HELD THAT: - For the purposes of the Foreign Trade Policy and the Handbook of Procedures, the date of import is the date of shipment or dispatch from the supplying country; in the case of air imports, it is the date of the relevant airway bill. The notification acquired force only upon publication and could not operate retrospectively. The filing or clearance of bills of entry is relevant to the rate of customs duty, but cannot displace the separately defined date of import for applying a policy restriction under the Foreign Trade Policy. The notification's exclusion of transitional arrangements was held inapplicable to goods whose import had already occurred under that policy framework before publication.

As decided in M. D. Overseas Ltd. [2019 (11) TMI 130 - DELHI HIGH COURT] upheld by the Supreme Court in G. S. Chatha Rice Mills [2020 (9) TMI 903 - SUPREME COURT] the date of import is the date of shipment/dispatch from the exporting country, ordinarily evidenced by the airway bill issued at the last port of departure to India. [Paras 23, 26, 27, 29, 32]

The notification was held inapplicable to the goods, and their release for home consumption was directed without insisting on import authorisation.

Executive clarification overriding the Foreign Trade Policy - Effect of the DGFT Office Memorandum treating uncleared consignments as subject to the revised restricted policy irrespective of their date of arrival - HELD THAT: - The Office Memorandum had no statutory force and could neither override the Foreign Trade Policy and the Handbook of Procedures nor rewrite their definition of the date of import. Treating it as controlling would give retrospective effect to the notification and amount to an amendment of the policy by an authority lacking power to do so. The import authorisation issued subject to conditions was consequently not treated as redressal of the grievance in view of the decisions in Enero Jewels Pvt. Ltd. & Anr. [2026 (4) TMI 1607 - GUJARAT HIGH COURT] and M/s. Bright Metal Refiners [2026 (6) TMI 325 - DELHI HIGH COURT]. The said authorisation-imposed conditions, which were beyond the jurisdiction and authority of the DGFT. [Paras 33, 34]

The Office Memorandum could not subject the petitioner's goods to the revised restricted policy, and the import authorisation did not cure the grievance.

Final Conclusion: The writ petition was allowed. Goods imported before publication of the restrictive notification were held outside its operation, and their clearance was directed without insistence on import authorisation.

Extended period of limitation for customs duty recovery - proof of suppression

Invocation of the extended limitation period for recovery of customs duty on imported refined palm olein based on alleged defects in the SAFTA certificate of origin - HELD THAT: - The importer had furnished the certificate of origin and other documents at clearance. Recovery proceedings initiated nearly five years later required evidence of suppression, wilful misstatement or other grounds attracting the extended period. The concurrent findings that the show cause notice contained no such material remained unrebutted in the Revenue's appeal. [Paras 10, 11]

Invocation of Section 28(4) was unsustainable for want of evidence of suppression, and the Revenue's appeal was dismissed.

Final Conclusion: The Revenue's appeal was dismissed, there being no basis to interfere with the concurrent conclusion that the extended period for recovery could not be invoked.

Title to paintings as liquidation assets - Consent terms inter se family members-effect on company assets - Preponderance of probabilities in civil title determination - Company Court jurisdiction to adjudicate title to company property

Company Court jurisdiction to adjudicate title to company property - Jurisdiction of the Company Court to determine competing title claims to paintings claimed as property of a company in liquidation. - HELD THAT: - The statutory powers to take custody of property to which the company appears entitled and to adjudicate questions of title enabled the Company Court to determine the competing claims. The jurisdictional objection had already been concluded by the prior order and was not disturbed in appeal. [Paras 66, 93]

The jurisdictional objection was rejected.

Consent terms-effect on title to company assets - Adverse inference from failure to lead title evidence - Claim to all the subject paintings founded on family Consent Terms and possession. - HELD THAT: - The Consent Terms settled inter se family disputes concerning the art that was the subject of the criminal complaint, and did not confer title or bind the Company or the Official Liquidator. The claimant produced no instrument establishing title, repeatedly declined to lead evidence, withdrew the only affidavit filed, and refused to submit to cross-examination. An adverse inference was therefore warranted. [Paras 48, 80, 82, 85, 93]

The claim to the subject paintings and the applications opposing the Official Liquidator's reports were rejected.

Title to paintings as liquidation assets - Preponderance of probabilities in civil title determination - Whether the five paintings identified through the Company's Asset Register, purchase vouchers and seizure list formed part of the liquidation estate. - HELD THAT: - The Asset Register contained detailed entries corresponding with the identified works, and the purchase vouchers and seizure list supplied an exact and unambiguous correlation. The identification was supported by the police affidavits and gallery confirmation. The contrary material did not displace this record; on the civil standard of preponderance of probabilities, the evidence established the Company's title to the five identified paintings. [Paras 83, 84, 86, 87, 93]

The five identified paintings were held to belong to the liquidation estate, and their disposal through an art-auction process was approved.

Final Conclusion: The jurisdictional challenge and the private claim of title failed. The five identified paintings were held to form part of the liquidation estate and were directed to be sold through an art-auction process; title to the remaining paintings was left open, subject to preservation measures.

Offence u/s 217(4) of the Companies Act, 2013 - Trial court Taking cognizance on complaint and supporting documents - No mini-trial at cognizance stage

Validity of cognizance for alleged non-cooperation by company directors with an investigation under the Companies Act - HELD THAT: - At the stage of cognizance, the Special Court is confined to the complaint and the documents produced with it, to ascertain whether they disclose a prima facie case. The complaint and supporting material disclosed the alleged offence and the cognizance order reflected application of mind. The explanations and documents relied upon by the petitioners constitute matters of defence to be urged at trial; their consideration at this stage would amount to a mini-trial. [Paras 10, 11]

The cognizance and issuance of process were upheld; the petition was dismissed.

Final Conclusion: The challenge to the cognizance order was rejected, leaving the petitioners to advance their defence during trial.

Interim possession of secured asset - SARFAESI sale purchaser's rights pending bankruptcy proceedings

Interim entitlement of the purchaser in a SARFAESI sale to possession of the secured asset while the questions concerning the bankruptcy process and the validity of payment of the sale consideration remain pending - HELD THAT: - The Court left open the questions concerning the effect of the bankruptcy process, the Trustee's powers, and the purchaser's entitlement to exclusion of time under the Security Interest (Enforcement) Rules. However, the sequence in which the Bankruptcy Trustee took possession immediately after withdrawal of the appeal against the bankruptcy order, coupled with the purchaser's payment of the entire sale consideration pursuant to the Court's order and the issuance and registration of the sale certificate, justified interim restoration of possession to the purchaser. The interests of all parties could be protected by suitable restrictions pending adjudication of the writ petition. [Paras 20, 22, 23, 24, 25]

The Bankruptcy Trustee was directed to hand over physical possession to the purchaser, subject to the final result of the writ petition; the purchaser was restrained from creating third-party rights or making structural modifications, and the Trustee was required to obtain leave before taking further steps concerning the property.

Final Conclusion: Interim possession of the secured asset was directed to be delivered to the purchaser on protective conditions, while all questions concerning the bankruptcy process and the sale remained open for final consideration.

Maintainability of appeal by removed Resolution Professional - Locus standi of removed Resolution Professional

Maintainability of appeals by an erstwhile Resolution Professional concerning the conduct of the personal insolvency process after his removal and replacement - HELD THAT: - The appeals had been instituted by the appellant in his capacity as Resolution Professional. Upon his removal and appointment of a new Resolution Professional, he no longer had an interest or authority to pursue appeals concerning the process to be adopted. The validity of his removal could be examined only in the separate appeal challenging that order; moreover, a Resolution Professional has no vested right to continue in office. [Paras 32, 33]

The appeals were dismissed as not maintainable at the instance of the removed Resolution Professional, and the interim order was vacated.

Final Conclusion: The appeals concerning the personal insolvency process were dismissed because the appellant, having been removed and replaced as Resolution Professional, lacked standing to maintain them. The interim order was vacated.

Proceeds of crime - nexus with criminal activity relating to a scheduled offence - Attachment of property - absence of link to proceeds of crime - Continuation of attachment of properties on the basis that receipts under debenture subscription agreements, consultancy agreements and a dairy-business sale transaction constituted proceeds of crime

HELD THAT: - Property can qualify as proceeds of crime only where it is derived or obtained, directly or indirectly, from criminal activity relating to a scheduled offence. The repayments under the debenture subscription agreements and payments under the consultancy agreements, to the extent received before the relevant bank disbursal, could not be linked to the alleged proceeds of crime. The balance consideration under the pre-existing dairy-business sale agreement was likewise an independent lawful transaction. Official banking transactions and subsequent disbursals to legal entities, absent cogent material establishing the requisite nexus, could not be treated as proceeds of crime. [Paras 20, 21, 22, 23, 24]

There was no basis to continue attachment of the properties; the appeal challenging the attachment was allowed and the enforcement agency's cross-appeal was dismissed.

Final Conclusion: The attached properties were released as the alleged transactions were held to be lawful and unconnected with proceeds of crime.

Transfer of provisionally attached foreign bank funds - Permission to transfer foreign bank funds subject to provisional attachment and confirmation to another overseas bank pending challenge to those orders

HELD THAT: - The funds in question were admittedly covered by the provisional attachment and its confirmation, the validity of which remained for adjudication. As no details of the overseas entity's business operations were placed on record, permission for the proposed transfer before determination of the challenge would dilute the effect of the attachment and confirmation. [Paras 24, 25]

The application was dismissed; however, the petitioner was permitted to seek transfer in the manner proposed by the respondent authorities, who were directed to facilitate it subject to the attachment, confirmation proceedings and outcome of the writ petition.

Final Conclusion: The request to transfer the attached funds to another overseas bank was rejected, while preserving the petitioner's liberty to seek the alternative transfer proposed by the respondent authorities subject to the continuing attachment.

Service-tax exemption for legal services by individual advocates and firms of advocates - Service-tax liability on legal services provided by individual advocates and firms of advocates under Notifications Nos. 25/2012-ST and 30/2012-ST -

HELD THAT: - The Court accepted the settled legal position under the notifications, which exempt legal services provided by individual advocates and firms of advocates from service tax. The departmental action imposing service tax contrary to those notifications could not be sustained. See Mr. Prashanth Sreedhar Shinoi [2024 (5) TMI 466 - KARNATAKA HIGH COURT], Adv. Pooja Patil [2024 (2) TMI 355 - BOMBAY HIGH COURT] and Shivananda Ray [2025 (5) TMI 74 - ORISSA HIGH COURT] [Paras 8]

The impugned service-tax actions and orders were quashed, and the writ petitions were allowed.

Final Conclusion: The service-tax demands and consequential orders against advocates were quashed as being contrary to the applicable exemption notifications.

Retrospective amendment of Rule 6 of the CENVAT Credit Rules, 2004 - CENVAT credit on inputs used for manufacture of exempted goods

Effect of the retrospective amendment to Rule 6 on CENVAT credit attributable to inputs used in the manufacture of exempted goods and on the remand ordered for verification of duty payment - HELD THAT: - The Finance Act, 2010 retrospectively amended Rule 6 from 10th September, 2004 and removed the requirement of maintaining separate accounts. In consequence, the admitted questions became academic, and the assessee was entitled to CENVAT credit under the amended Rule 6 on the basis of the amount bifurcated in relation to inputs used for exempted goods. [Paras 13, 14]

The questions of law were not answered; the remand order did not survive and both appeals were dismissed.

Final Conclusion: Owing to the retrospective amendment of Rule 6, the questions admitted in the appeals were rendered academic. The remand for verification under the unamended provision was held unsustainable, and both appeals were dismissed.

VAT reimbursement for expansion of existing industrial units - Downstream Thrust Sector classification of cement manufacturing activity

Classification of cement manufacturing activity for Downstream Thrust Sector status - Applicability of the earlier ruling on classification of a cement manufacturing unit to the claim for downstream Thrust Sector recognition - HELD THAT: - The earlier ruling in Ultratech [2022 (1) TMI 309 - ORISSA HIGH COURT] established that a cement unit cannot be classified solely by characterising one of its processes as grinding or mixing; its actual industrial activity and value addition must be examined. However, the earlier case involved a unit whose eligibility certificate had been issued and whose reimbursement had been sanctioned, whereas no final sanction had been made in the present case. It therefore did not establish an automatic entitlement to reimbursement. [Paras 22, 23, 30]

The claim for downstream Thrust Sector recognition must be assessed on the unit's actual operations and the applicable policy criteria; the earlier ruling does not by itself confer VAT reimbursement.

Retrospective deletion of "new" industrial unit condition - VAT reimbursement for post-policy expansion - Validity of declining consideration of VAT reimbursement for expansion solely because the original cement unit pre-dated IPR 2007 - HELD THAT: - The retrospective deletion of the word "new" from the relevant policy entries removed the sole ground on which consideration of the claim had been declined. The inspection and verification materials provided substantial support for the claim to downstream Thrust Sector status, but did not amount to a final sanction or obviate examination of all applicable eligibility requirements. The competent authority was required to consider that material, identify any unmet criterion with specific reasons, and then determine the reimbursement, if any, admissible for increased commercial production. [Paras 29, 31, 32, 33, 34]

The impugned refusal was set aside insofar as it rested on the unit not being new, and the claim was remitted for a reasoned determination of downstream Thrust Sector status and consequential processing of any admissible VAT reimbursement.

Final Conclusion: The writ petition was allowed. The refusal to consider the claim on the ground that the original unit was not new was set aside, and the competent authority was directed to determine downstream Thrust Sector status and thereafter process any admissible VAT reimbursement.

Additional levy under VAT composition scheme - Constitutional validity - Constitutional validity of the additional levy u/s 15(5)(e) of the Karnataka Value Added Tax Act, 2003 applicable to dealers under the composition scheme -

HELD THAT: - Following the Division Bench decision [2024 (1) TMI 441 - KARNATAKA HIGH COURT] referred to by the parties, the Court held the provision to be ultra vires to the Constitution of India. The petitioners were consequently entitled to opt out of the composition scheme. [Paras 3]

Section 15(5)(e) was declared ultra vires, and the writ petition was allowed with permission to the petitioners to opt out of the composition scheme.

Final Conclusion: The writ petition was allowed, section 15(5)(e) of the Karnataka Value Added Tax Act, 2003 was declared ultra vires, and the petitioners were permitted to opt out of the composition scheme.

Restitution of failed iron-ore auction payments - Interest on retention of refundable auction proceeds

Restitution of failed iron-ore auction payments - Refund of the full amount deposited pursuant to an iron-ore auction that did not fructify, including the amounts remitted towards income tax and VAT - HELD THAT: - The auction purchaser neither received the auctioned iron ore nor any corresponding consideration, and the State had accepted entitlement to refund of the entire deposit. Amounts remitted to tax departments formed part of the demand raised under the auction transaction; consequently, their inter-departmental remittance or adjustment could not prejudice the payer's right to refund. Retention of those amounts without consideration attracted the principles of restitution and unjust enrichment. [Paras 14, 30]

The withholding of the income-tax and VAT components was set aside, and the respondents were directed to refund the balance amount, without prejudice to their right to seek reimbursement or adjustment from the respective tax departments in accordance with law.

Interest on retention of refundable auction proceeds - Interest on the refundable deposit retained after the failed iron-ore auction - HELD THAT: - Interest is compensatory, being the normal accretion on money of which a person has been deprived, and is not dependent on an express contractual or statutory stipulation. Since the consideration for the deposit was never received and the entitlement to refund stood accepted, continued retention without compensation was impermissible under the doctrine of restitution. [Paras 27, 30]

Interest at 8% per annum was directed on the entire refundable deposit from 31.07.2023 to 31.03.2025, with credit only for the amount actually paid on that date; thereafter, interest at the same rate was made payable on the unpaid balance, including the withheld tax components, until actual payment.

Final Conclusion: The petition was partly allowed. The withheld tax components were ordered to be refunded, and interest at 8% per annum was directed on the refundable amounts for the periods specified.

Amendment of plaint introducing a new cause of action - Civil recovery of criminal compensation

Recovery of criminal compensation through civil suit - Amendment of plaint - Amendment of a cheque-based recovery suit to claim compensation awarded in cheque-dishonour criminal proceedings - HELD THAT: - The compensation had already been determined in the criminal proceedings and was recoverable through the statutory procedure under the BNSS/Cr.P.C., not by instituting or enlarging a civil recovery suit. The proposed claim was founded on the criminal appellate order and not on the cause of action underlying the suit. [Paras 11, 12, 16, 17]

The amendment seeking inclusion of the criminal compensation was rightly refused.

Legal expenses incurred in criminal proceedings - New cause of action - Amendment of the recovery suit to claim legal expenses incurred in prosecuting the cheque-dishonour criminal proceedings - HELD THAT: - The claimed legal expenses arose from prosecution of criminal proceedings before different courts and had no direct bearing on the cause of action in the cheque-based recovery suit. Their inclusion would introduce a distinct cause of action and an entirely new case. [Paras 13, 17]

The claim for legal expenses could not be introduced by amendment and was required to be pursued in a separate suit.

Final Conclusion: The petition was dismissed. The refusal to amend the recovery suit to include criminal compensation and legal expenses arising from separate criminal proceedings was upheld.

Ex parte disposal of criminal appeal against conviction without legal representation - Right to legal representation in criminal appeal

HELD THAT: - An appellate court deciding an appeal against conviction cannot proceed on the record without securing a fair opportunity of representation for the convict. Where the engaged advocate is absent, the court must either issue administrative notice to the convict for personal appearance or appoint a legal-aid advocate or amicus curiae. The appellate court decided the appeal on merits without adopting either safeguard, thereby violating the requirements of Section 386 of the Code and the guarantee of a fair hearing under Article 21. [Paras 12, 13, 23]

The ex parte appellate judgment was set aside and the appeal was remanded for a fresh decision on merits after ensuring representation for the appellant; if the appellant or counsel remains absent, legal-aid counsel or an amicus curiae must be appointed.

Final Conclusion: The revision was allowed, the ex parte appellate judgment was set aside, and the appeal was remanded for fresh adjudication on merits with assured legal representation. Execution of the sentence was stayed pending final disposal of the remanded appeal.