TaxTMI Updates e-Newsletter
Oct 29,2024

Authorised signatory - dismissal for want of signature - natural justice - remand for de novo consideration - reasoned order - entertainment of writ where alternate remedy is ineffective

Authorised signatory - dismissal for want of signature - natural justice - reasoned order - Validity of dismissal of appeal by Commissioner (Appeals) solely on the ground that the appeal memo was not signed by an authorised signatory without affording opportunity to establish authority or produce requisite documents. - HELD THAT: - The Court found that the impugned order dismissed the petitioner's appeal because the authorised signatory had not signed the appeal and no board resolution or other proof of authority was produced (para 3). The High Court held that where there is material demonstrating the signatory's authority, or where the authority could reasonably be verified (for example, from records on the GST portal), the Appellate Authority is duty bound to afford the appellant an opportunity to establish or verify the signatory's authority rather than adopting a shortcut of dismissal. Denying such an opportunity infringes principles of natural justice and causes avoidable harassment (paras 5-7). Consequently, the impugned order was set aside and the appeal was restored for fresh consideration on merits, with directions that the Commissioner (Appeals) grant a hearing to the parties and pass a reasoned order (paras 8-9). All contentions on merits were kept open (para 8). [Paras 3, 7, 8, 9]

Impugned order quashed and set aside; appeal restored to Commissioner (Appeals) for fresh, de novo consideration with a personal hearing and the passing of a reasoned order, all merits left open.

Entertainment of writ where alternate remedy is ineffective - remand for de novo consideration - Maintainability of the writ petition despite the availability of an alternate remedy before the tribunal. - HELD THAT: - Although the respondents contended that an alternate remedy before the tribunal existed, the Court noted that the tribunal was not functioning at present and therefore there was no just reason to refuse entertainment of the petition (para 4). The Court relied on its own precedents where similar petitions were entertained and remitted for fresh consideration rather than being dismissed on hyper-technical grounds (paras 5-6). In consequence, the writ was entertained and the matter remitted to the Commissioner (Appeals) for reconsideration (paras 4-8). [Paras 4, 5, 6, 8]

Writ petition entertained notwithstanding availability of alternate remedy; matter remitted to Commissioner (Appeals) for de novo consideration.

Final Conclusion: The High Court allowed the petition, quashed the order dismissing the appeal for want of signature, restored the appeal for fresh adjudication on merits with a personal hearing and direction to pass a reasoned order, and directed disposal by 31 January 2025; all parties' substantive contentions remain open.

Principle of natural justice - right to personal hearing - failure to accord opportunity of hearing - non-communication of adjournment request - quashing and remand for fresh hearing - direction to pass reasoned order - alternative remedy not a bar where natural justice violated

Principle of natural justice - right to personal hearing - failure to accord opportunity of hearing - non-communication of adjournment request - Whether the impugned order was passed in violation of the principle of natural justice by failing to grant or communicate a decision on the petitioner's request for a hearing date beyond 10.02.2024 and by passing the order after an unexplained delay. - HELD THAT: - The Court found that on two occasions show cause notices recorded that the petitioner or its representative could appear, but on both occasions the petitioner sought adjournment due to unavailability of its counsel. The second show cause notice fixed the date as 6.2.2024 and the petitioner sought a date after 10.2.2024; that communication was received by respondent no.3. Neither an order granting nor an order declining that request was communicated to the petitioner. The authority passed the impugned order only after a delay of about four and a half months, during which the petitioner awaited further communication and did not receive an opportunity for personal hearing. The impugned order itself records the request for a date after 10.02.2024 but contains no determination or reason for not accepting the prayer, indicating the request was not adverted to. In these circumstances the Court held that the requirement to either grant or refuse and communicate the adjournment request was not complied with, resulting in a breach of the audi alteram partem principle. The Court did not decide the merits of the show cause allegations, confining its conclusion to procedural infirmity arising from denial of effective opportunity to be heard. [Paras 13, 14, 15, 16, 17]

The impugned order was passed in violation of the principle of natural justice for failure to decide and communicate the petitioner's adjournment request and for not affording an effective personal hearing.

Alternative remedy not a bar where natural justice violated - Whether availability of an alternative remedy (appeal) bars issuance of writ relief in view of the procedural violation. - HELD THAT: - The Court held that where there is a violation of the principle of natural justice, the existence of an alternative remedy does not preclude relief by writ. Because the impugned order was quashed on procedural grounds for denial of hearing, the plea that an alternative remedy is available was rejected as inapplicable to this exception. [Paras 19]

The existence of an alternative remedy does not operate as a bar to writ relief in the present case of breach of natural justice.

Quashing and remand for fresh hearing - direction to pass reasoned order - What relief should follow the finding of procedural infirmity? - HELD THAT: - In consequence of the procedural breach, the Court quashed the impugned order and directed the respondent authority to fix a fresh date for hearing, give at least one week's notice to the petitioner and thereafter pass an appropriate reasoned order after hearing the petitioner. The Court expressly limited its intervention to setting aside the order on procedural grounds and remanding the matter for fresh adjudication; it did not adjudicate the substantive merits of the show cause notice. [Paras 20, 21]

Impugned order quashed; matter remitted for fresh hearing after at least one week's notice and for passing of an appropriate reasoned order on hearing the petitioner.

Final Conclusion: Writ petition allowed; the order dated 18.06.2024 is quashed for breach of the audi alteram partem principle. The authority is directed to afford a fresh hearing after at least one week's notice and to pass a reasoned order thereafter; the Court did not adjudicate the merits of the underlying show cause notice.

Summoning public official for evidence - admission in cross-examination - trial court's discretion to permit further evidence - power to issue summons by all permissible modes - opportunity to adduce evidence after close of arguments

Summoning public official for evidence - trial court's discretion to permit further evidence - opportunity to adduce evidence after close of arguments - Petitioner granted one opportunity to summon and examine the concerned GST official and to produce the relevant GST record before the Trial Court; Trial Court directed to record that evidence and hear arguments afresh. - HELD THAT: - The defendant sought to summon an official from the GST Office in Noida to prove that input tax credit in respect of the invoices was not passed to him. DW-2 (a departmental official) deposed that detailed records were not available and only returns could be produced. The plaintiff, in cross-examination, volunteered that the GST input for the invoices had been availed by the defendant and that this could be seen on the GST portal. Notwithstanding that the petitioner ought to have been vigilant earlier in summoning the appropriate official, the Court found that the defendant, despite making efforts, was unable to examine the competent official. In these circumstances the Trial Court should have afforded an opportunity to secure the attendance of the official where the record is stated to be available. Accordingly, the petitioner was permitted one effective opportunity to procure the attendance of the GST official (including by process dasti) so that the witness may be examined, the record produced, and the Trial Court may thereafter hear arguments afresh. The Trial Court was directed to ensure that summons are issued by all possible permissible modes and to fix a date for examination, with parties to appear on the appointed date. [Paras 12, 13, 14, 15, 16]

Petition allowed; petitioner granted one opportunity to summon the GST official, Trial Court to record that evidence and hear arguments afresh, with directions to issue summons by all permissible modes and to proceed on the fixed date.

Final Conclusion: The petition is allowed and disposed of by granting the petitioner one effective opportunity to summon and examine the concerned GST official, produce the record before the Trial Court and re-argue the matter after such evidence is recorded; the Trial Court directed to facilitate issuance of summons by all permissible modes and to proceed on the dates indicated.

Availability of alternative remedy by way of appeal - service of reasoned order and commencement of limitation - delay and laches in availing statutory remedy - entertainment of writ where statutory remedy was earlier extended by court

Availability of alternative remedy by way of appeal - delay and laches in availing statutory remedy - service of reasoned order and commencement of limitation - Whether the writ petition can be entertained after a co-ordinate Bench had granted the petitioner time to file an appeal within limitation and the petitioner failed to avail that remedy. - HELD THAT: - The co-ordinate Bench had recorded that the reasoned order dated 20.10.2021 was not earlier served on the petitioner and, accordingly, directed that the petitioner may avail its remedy of appeal within limitation beginning from 5.4.2024. That specific relief was available to the petitioner but was not availed. More than six months elapsed after the relief was granted before the present petition was filed. The Court found that where a statutory appellate remedy was expressly extended by a co-ordinate Bench on account of non-service and the petitioner thereafter did not pursue that remedy within the period allowed, the petitioner cannot seek to challenge the same order by filing a fresh writ petition on the grounds raised. The petitioner's plea that a large liability prevented filing of the appeal did not justify revival of the writ remedy after the extended period had expired. In these circumstances, the discretionary relief of writ was declined because an alternative statutory remedy had been afforded and was not timely exercised by the petitioner.

The writ petition is not entertainable and is dismissed because the petitioner failed to avail the appellate remedy which had been extended by a co-ordinate Bench.

Final Conclusion: The petition is dismissed: the petitioner was granted by a co-ordinate Bench the remedy of appeal from the order dated 20.10.2021 with limitation beginning 5.4.2024, but having failed to avail that remedy and after considerable delay, the present writ cannot be entertained.

Proceedings under section 130 of the GST Act - proceedings under sections 73/74 of the GST Act - survey/inspection under section 67 of the GST Act - determination of tax under Section 35(6) as deemed supply - penalty under section 130 for contraventions coupled with intent to evade tax

Proceedings under section 130 of the GST Act - proceedings under sections 73/74 of the GST Act - survey/inspection under section 67 of the GST Act - Validity of initiating proceedings under section 130 of the UPGST Act where excess stock is found on survey - HELD THAT: - The Court held that where excess stock is discovered during a survey/inspection, the appropriate statutory mechanism for quantifying and determining tax liability is by invoking the assessment/determination procedures under Sections 73/74 (and the process contemplated by Section 35(6) insofar as it deems goods to be supplied), and not by initiating proceedings under Section 130 read with Section 122. The reasoning follows precedents of this Court, which explain that Section 35(6) contemplates determination of tax as if unaccounted goods had been supplied but requires application of the procedure in Sections 73/74 for quantification; Section 130 is not designed for assessment/determination of tax merely because excess stock is found and, additionally, penalties under Clause (ii) or (iv) of Section 130 can be attracted only in circumstances properly falling within those clauses (for example, contraventions coupled with intent to evade tax), which were not established in the present case. Applying these principles, the impugned orders passed under Section 130 read with Section 122 were found unsustainable. [Paras 8, 10, 11]

Proceedings under Section 130 could not be lawfully initiated on the basis of excess stock found at survey; the orders issued under Section 130 read with Section 122 are quashed.

Final Conclusion: Writ petition allowed; impugned orders passed under section 130 read with section 122 and the appellate order are quashed as Section 130 is not the proper vehicle to determine tax liability arising from excess stock found on survey, which must be addressed under Sections 73/74 (and Section 35(6) insofar as it requires application of those provisions).

Personal hearing - principles of natural justice - opportunity to file fresh reply - quash and set aside - remand powers of appellate authority - Section 74(9) of the Uttar Pradesh Goods and Services Tax Act, 2017

Personal hearing - principles of natural justice - opportunity to file fresh reply - quash and set aside - Section 74(9) of the Uttar Pradesh Goods and Services Tax Act, 2017 - Impugned adjudication order passed without affording personal hearing was in violation of principles of natural justice and liable to be quashed. - HELD THAT: - The Court applied the coordinate-bench decision in Mahaveer Trading Company (supra) and found the factual matrix similar. Relying on the principle that before any adverse order in adjudication proceedings a noticee must be offered personal hearing, the Court held that denial of such opportunity amounts to gross violation of natural justice. The Court noted that if the noticee waives the right or fails to avail the granted opportunity, the authority may proceed ex parte; but a practice of denying personal hearing cannot be permitted. In consequence, the impugned order under Section 74(9) of the Uttar Pradesh Goods and Services Tax Act, 2017 could not be sustained. The Court directed that the officer concerned shall grant the petitioner an opportunity to file a fresh reply, fix a date for hearing, and thereafter pass a reasoned order. The exercise is to be completed within two months from the date of the order.

Impugned order dated June 8, 2023 quashed and set aside; officer directed to permit fresh reply, afford personal hearing and pass a reasoned order within two months.

Final Conclusion: Writ petition allowed; impugned adjudication order set aside for breach of natural justice and matter remitted for fresh reply, hearing and reasoned decision within two months.

Due communication of notice and orders - service via GST portal - benefit of doubt where portal upload is defective - quashing of impugned order for defective notice - remand for fresh notice and hearing

Due communication of notice and orders - service via GST portal - benefit of doubt where portal upload is defective - Impugned order uploaded under 'Additional Notices and Orders' tab did not constitute due communication to the petitioner and entitled him to relief. - HELD THAT: - The Court accepted the petitioner's uncontradicted contention that after filing a response no personal hearing notice or intimation was received and that the reminder and final order were uploaded on the 'Additional Notices and Orders' tab rather than the 'View Notices and Orders' tab on the GST portal. The Department did not dispute these facts and acknowledged the portal-related issue. Relying on the coordinate Bench decision in Ola Fleet Technologies Pvt. Ltd., the Court held that in such circumstances the petitioner is entitled to the benefit of doubt because no material negates the contention that the impugned order did not properly reflect under the tab where notices are expected to appear, and on merits there remained questions whether the assessee's replies and annexures were before the assessing officer. The Court therefore found the communication defective and relief appropriate. [Paras 2, 4, 5]

Impugned order quashed on ground of defective communication through the GST portal; petitioner entitled to benefit of doubt.

Quashing of impugned order for defective notice - remand for fresh notice and hearing - Relief to be granted by setting aside the impugned order and remitting the matter for fresh proceedings with a clear notice and opportunity to be heard. - HELD THAT: - The Court directed that the impugned order be quashed and set aside and ordered the assessing officer to issue a fresh notice in the prescribed manner, with at least fifteen days clear notice, so that the petitioner may submit a written reply and appear on the fixed date. The matter is remitted for further proceedings pursuant to that fresh notice; the Court observed no useful purpose would be served by interim steps and noted the disputed amount is deposited, obviating immediate prejudice from remand. The directions mirror the remedial course adopted in Ola Fleet Technologies Pvt. Ltd. [Paras 6, 7]

Matter remitted: assessing officer to issue fresh notice with at least 15 days' notice and proceed to decide after hearing; impugned order set aside.

Final Conclusion: Writ petition allowed: the order dated 23.04.2024 is quashed for defective communication via the GST portal and the matter is remitted with a direction to issue a fresh notice in the prescribed manner with at least fifteen days' clear notice and thereafter proceed to decide the matter after affording hearing.

Classification of goods as chemicals - scope of G.O.Ms.No.189 dated 07.02.2005 - levy of tax on all chemicals - interaction between Entry-9 of VI Schedule and G.O.Ms.No.189 - effect of usage as raw material on classification

Classification of goods as chemicals - scope of G.O.Ms.No.189 dated 07.02.2005 - effect of usage as raw material on classification - The goods Sodium Bicarbonate (Soda Ash) and Magnesium Sulphate (Epsom Salt) are to be treated as chemicals and taxable at 8% under G.O.Ms.No.189 dated 07.02.2005. - HELD THAT: - G.O.Ms.No.189, dated 07.02.2005 levies tax at 8% on the sale of 'All Chemicals' not covered under Entry-9 of the VI Schedule. The Assessing and Revisional Authorities' contention that these goods cease to be chemicals because they are used as raw materials for manufacture is unsustainable. A Division Bench precedent of the erstwhile High Court in W.P.No.87 of 2007, dealing with an analogous chemical (Sodium Hydro Sulphite), was applied: any chemical not enumerated in Entry-9 falls within the ambit of G.O.Ms.No.189 and is taxable at 8%. The judgment holds that mere usage as a raw material does not alter the inherent character of the goods as chemicals, and therefore the Revisional Authority's conclusion to tax them at a higher rate is set aside. [Paras 10, 11, 12]

Revision Orders directing taxation at 12% are set aside and the goods are held taxable at 8% under G.O.Ms.No.189 dated 07.02.2005.

Final Conclusion: Writ petitions allowed; Revision Orders dated 22.08.2008 set aside and the sales of the specified goods shall be taxed at 8% under G.O.Ms.No.189 dated 07.02.2005; no order as to costs.

Appeal under Section 107 of the Central Goods and Services Tax Act, 2017 - Requirement to submit certified copy within seven days under Rule 108(3) of the CGST Rules, 2017 - Final acknowledgment and date of filing of appeal - Clarificatory amendment to Rule 108(3) (notification dated 26.12.2022) and its retrospective effect - Dismissal of appeal as time barred for delay in submission of certified copy - Remand for fresh consideration by the appellate authority

Requirement to submit certified copy within seven days under Rule 108(3) of the CGST Rules, 2017 - Final acknowledgment and date of filing of appeal - Clarificatory amendment to Rule 108(3) (notification dated 26.12.2022) and its retrospective effect - Dismissal of appeal as time barred for delay in submission of certified copy - Whether the appellate authority was justified in dismissing the appeal as time barred for failing to submit the certified copy of the impugned order within seven days of filing, in light of the amendment to Rule 108(3) notified on 26.12.2022. - HELD THAT: - Rule 108(3) originally required submission of a certified copy of the order appealed against within seven days of filing the appeal, and provided that where the copy was submitted within seven days the date of filing would be the date of provisional acknowledgment, otherwise the date of submission would be the date of filing. An amendment to Rule 108(3), notified on 26.12.2022, substituted that where the decision or order appealed against is uploaded on the common portal a final acknowledgment shall be issued and the date of issue of the provisional acknowledgment shall be considered as the date of filing of the appeal. The Court characterises this amendment as clarificatory and holding retrospective effect. Having regard to the amendment in force on the date of the appellate order, the appellate authority's dismissal of the appeal on the ground of delay in submission of the certified copy was not justified. [Paras 8, 9, 11]

Impugned order dismissing the appeal as time barred on account of delay in submitting the certified copy is quashed and set aside.

Appeal under Section 107 of the Central Goods and Services Tax Act, 2017 - Remand for fresh consideration - The consequence of quashing the appellate order and the forum in which the matter must be reconsidered. - HELD THAT: - Having quashed the appellate authority's order, the Court remitted the matter to the appellate authority for fresh adjudication on merits. The Court expressly refrained from expressing any view on the merits and directed that the appellate authority afford the petitioner a proper opportunity of hearing and decide the appeal in accordance with law within a specified timeframe. [Paras 12, 13]

Matter remitted to the appellate authority to decide the appeal on merits after giving opportunity of hearing to the petitioner; to be decided within three months from receipt of the order.

Final Conclusion: The writ petition is allowed: the appellate authority's order dismissing the appeal as barred by limitation is quashed and set aside; the matter is remitted to the appellate authority to decide the appeal afresh on merits after providing opportunity of hearing, to be completed within three months.

Maintainability of appeal to High Court in matters of taxability - appeal lies only to the Supreme Court under Section 35(G) of the Central Excise Act, 1944 - liberty to revenue to file appeal before the Apex Court

Maintainability of appeal to High Court in matters of taxability - appeal lies only to the Supreme Court under Section 35(G) of the Central Excise Act, 1944 - Appeal to the High Court in a matter concerning taxability is not maintainable and the remedy of appeal lies to the Supreme Court under Section 35(G) of the Central Excise Act, 1944. - HELD THAT: - The Division Bench applied its earlier decisions and consistent precedents which held that questions regarding determination of taxability cannot be entertained by the High Court in appeal. In the light of those authorities, and construing the statutory scheme, the Court concluded that the statutory appellate route under Section 35(G) restricts appellate jurisdiction to the Supreme Court. The Court therefore found no basis to admit or entertain the present appeal and followed the precedent of dismissal while preserving the revenue's procedural right to approach the Apex Court.

Appeal dismissed as not maintainable in the High Court; appeal lies to the Supreme Court under Section 35(G).

Liberty to revenue to file appeal before the Apex Court - Revenue granted liberty to take appropriate steps, including filing an appeal before the Supreme Court. - HELD THAT: - While dismissing the appeal for want of maintainability, the Court expressly granted liberty to the revenue to pursue remedies available in law by instituting an appeal before the Apex Court at the earliest, thereby leaving open the route of substantive challenge to the taxability question before the Supreme Court.

Liberty granted to the revenue to file an appeal before the Supreme Court.

Final Conclusion: The High Court dismissed the appeal as not maintainable in matters of taxability, holding that the statutory appellate remedy lies to the Supreme Court under Section 35(G) of the Central Excise Act, 1944, while granting liberty to the revenue to approach the Apex Court.

Opportunity to submit objections/representations - leave to file reply within four weeks - adjudication kept in abeyance pending decision of the Nine Judge Constitution Bench - no recovery of GST on royalty until Nine Judge Constitution Bench decides

Opportunity to submit objections/representations - leave to file reply within four weeks - Petitioner permitted to submit reply/objections to the intimation within four weeks and petitions disposed on the terms of the Division Bench judgment. - HELD THAT: - The Division Bench directions in A.Venkatachalam v. Assistant Commissioner (ST), Palladam were applied to these writ petitions. In view of that judgment, the petitioner is allowed to submit objections/representations (reply to the intimation) within a period of four weeks from receipt of a copy of this order. The petitions are disposed of on the same terms as the Division Bench judgment, with liberty to the petitioner to pursue further remedies as provided therein. [Paras 4, 5, 6]

Writ petitions disposed of on the terms of the Division Bench judgment; petitioner permitted to file reply/objections within four weeks; connected miscellaneous petitions closed.

Final Conclusion: Writ petitions disposed on the terms of the Division Bench order: petitioner granted four weeks to submit reply/objections; matters to be adjudicated in accordance with the directions in the Division Bench judgment and further proceedings governed by the outcome of the Nine Judge Constitution Bench where applicable; no costs.

Quashing of assessment order - remand for fresh assessment - condition precedent of deposit for remand - opportunity of personal hearing - assessment founded on discrepancies between GSTR-3B and auto-populated GSTR-2A - challenge to confirmation without hearing

Assessment founded on discrepancies between GSTR-3B and auto-populated GSTR-2A - challenge to confirmation without hearing - quashing of assessment order - Validity of the impugned assessment order which confirmed tax demand based on discrepancies between GSTR-3B and GSTR-2A without affording a personal hearing - HELD THAT: - The Court examined the assessment and found that the confirmed tax demand arose entirely from discrepancies between the petitioner's GSTR-3B returns and the auto-populated GSTR-2A. The record showed that the petitioner had not been heard prior to confirmation of the demand, although a show cause notice and intimation had been issued. While the petitioner's explanation of non-receipt was not wholly convincing, the Court was satisfied that an opportunity to contest the demand on merits was required. In view of these circumstances the impugned assessment order was set aside to enable fresh consideration on merits.

Impugned assessment order quashed to permit fresh adjudication

Remand for fresh assessment - condition precedent of deposit for remand - opportunity of personal hearing - Terms and directions for remand including deposit, opportunity to reply, and time limits for fresh assessment - HELD THAT: - The Court framed the terms for remand: the petitioner agreed to remit 10% of the disputed tax demand and the Court required that payment as a condition for interference. The petitioner was permitted to submit a reply to the show cause notice within two weeks of receipt of the order. Upon receipt of the reply and verification of the deposit, the assessing officer must afford the petitioner a reasonable opportunity, including a personal hearing, and thereafter pass a fresh assessment order within two months from receipt of the petitioner's reply. These procedural directions were imposed to ensure adjudication on merits while balancing finality and statutory process.

Remand ordered on condition that petitioner remit 10% of disputed demand within two weeks, permitted to file reply within same period, and assessing officer to hold hearing and pass fresh assessment within two months

Final Conclusion: Writ petition allowed by quashing the impugned assessment order; matter remitted for fresh assessment on terms requiring the petitioner to deposit 10% of the disputed demand within two weeks, to file a reply within that period, and for the assessing officer to afford a personal hearing and pass a fresh order within two months. No order as to costs.

GST liability on seigniorage/royalty - adjudication subject to Nine Judge Constitution Bench decision on nature of royalty - stay of recovery of tax - opportunity to file objections/representations and hearing - preservation of contentions and right of appeal

GST liability on seigniorage/royalty - opportunity to file objections/representations and hearing - adjudication subject to Nine Judge Constitution Bench decision on nature of royalty - stay of recovery of tax - Petitioner permitted to file reply/representations and adjudication to proceed but adjudicatory orders to be held in abeyance and no recovery of GST on royalty until the Nine Judge Constitution Bench decides the nature of royalty. - HELD THAT: - Following the Division Bench directions in A. Venkatachalam (lead) the petitioner was allowed a period of four weeks to submit objections/representations to the intimation concerning GST liability on seigniorage fee. The authority is directed to proceed with adjudication on merits after affording a reasonable opportunity of being heard; however, any orders of adjudication are to be kept in abeyance and there shall be no recovery of GST on royalty until the Nine Judge Constitution Bench determines the legal character of royalty. The court also preserved the petitioners' right to raise all contentions and to seek redressal, including appeals, after the constitutional decision.

Reply permitted within four weeks; authority to adjudicate on merits after hearing but orders to remain in abeyance; no recovery of GST on royalty until the Nine Judge Constitution Bench decides.

Preservation of contentions and right of appeal - challenge to notification and circular deferred - Challenges to the notification and the circular are left open for the petitioners to pursue after the outcome of the Nine Judge Constitution Bench, and all contentions are preserved for appropriate proceedings thereafter. - HELD THAT: - The court recorded that issues concerning the validity or effect of the notification and circular need not be finally determined at present. Petitioners are permitted to act upon those challenges after the Nine Judge Constitution Bench gives its decision, and are free to raise all contentions in appropriate forums, including by filing appeals, once the constitutional issue is resolved.

Challenge to notification and circular deferred; contentions preserved for future proceedings post the Nine Judge Constitution Bench decision.

Final Conclusion: Writ petition disposed on terms of the Division Bench directions: petitioner allowed four weeks to submit representations; adjudication to proceed with hearing but adjudicatory orders kept in abeyance and no recovery of GST on royalty until the Nine Judge Constitution Bench decides; challenges to notification/circular and other contentions are preserved for appropriate proceedings thereafter.

Contradictory show cause notice - failure to consider reply to show cause notice - breach of principles of natural justice - quashment of assessment order - remand for fresh proceedings by issuance of fresh show cause notice

Contradictory show cause notice - failure to consider reply to show cause notice - Validity of the assessment order in view of contradictions in the show cause notice and non-consideration of the petitioner's reply - HELD THAT: - The show cause notice contained two inconsistent tables specifying different GSTR-3B amounts (one table stating Rs. 3,33,787/- and a second table stating Rs. 5,19,362/- which corresponded with the ITC availed). The petitioner replied pointing out the contradiction and sought time to file supporting certificate under the relevant circular. The assessing officer's order does not address the petitioner's reply nor record reasons for rejecting it; the operative portion of the assessment merely restates a mismatch without dealing with the reply. In these circumstances the assessment cannot stand because the contradictory notice and the omission to consider the explanation undermine the fairness and adequacy of the reasoning in the order. [Paras 4, 5]

Impugned assessment order quashed for being founded on a contradictory show cause notice and for failure to consider the petitioner's reply.

Quashment of assessment order - remand for fresh proceedings by issuance of fresh show cause notice - Whether the matter should be finally disposed or remitted for fresh proceedings - HELD THAT: - Given the quashment of the impugned assessment order on the ground of a defective show cause notice and non-consideration of the reply, the court left the matter open to the revenue to initiate fresh proceedings. The court expressly permitted the respondent to issue a fresh show cause notice and proceed in accordance with law, thereby remitting the matter for fresh adjudication after permitting the assessee to be heard on a coherent and non-contradictory notice. [Paras 6]

Assessment quashed and respondent permitted to initiate fresh proceedings by issuing a fresh show cause notice.

Final Conclusion: The assessment order dated 27.12.2023 is quashed for being founded on a contradictory show cause notice and for failure to consider the petitioner's reply; the respondent is permitted to issue a fresh show cause notice and proceed afresh in accordance with law (matter disposed, no costs).

GST liability on seigniorage fee and mining lease - services supplied by Central/State Government or local authority by way of renting of immovable property excluded from GST - adjudication and recovery of GST on royalty and mining lease to be kept in abeyance pending decision of the Nine Judge Constitution Bench on the nature of royalty - interim stay by the Supreme Court in the batch of cases concerning royalty and mining lease

GST liability on seigniorage fee and mining lease - services supplied by Central/State Government or local authority by way of renting of immovable property excluded from GST - petition challenging intimation of GST liability in respect of seigniorage fee and mining lease disposed of on same terms as earlier Division Bench directions - HELD THAT: - The Court considered the petitioner's challenge to the intimation asserting GST liability on seigniorage fee and mining lease and the submission that services by government by way of renting of immovable property are excluded from GST. Having regard to the Division Bench decision in the batch (lead case A. Venkatachalam v. Assistant Commissioner (ST), Palladam) which directed petitioners to file objections and mandated that adjudication and recovery be kept in abeyance until the Nine Judge Constitution Bench decides the nature of royalty, the High Court disposed of this petition on identical terms. The petitioner is permitted to submit his reply to the intimation within four weeks from receipt of a copy of this order, and all contentions remain open to be raised in appropriate proceedings after the Constitution Bench's decision. [Paras 2, 4, 5]

Petition disposed on the same terms as the Division Bench order: petitioner to file reply within four weeks; adjudication/recovery in respect of the subject matter to remain in abeyance pending the decision of the Nine Judge Constitution Bench; contentions preserved.

Final Conclusion: Writ petition dismissed on terms of the Division Bench judgment: petitioner allowed four weeks to submit reply to the intimation; adjudication and any recovery in respect of GST on seigniorage fee and mining lease to remain in abeyance until the Nine Judge Constitution Bench decides the issue; rights to challenge the matter after that decision preserved; no costs.

Unexplained investments/ amounts deposited in the foreign bank account - Explanation about the nature and source of deposits - onus of proof in respect of unexplained investments and cash credits - ownership of foreign bank account and evidentiary burden - verification by foreign revenue authority and effect on assessment - delay of 233 days in filing this Special Leave Petition

HELD THAT:- The reasons assigned for seeking condonation of delay are neither satisfactory nor sufficient in law to be condoned.

Hence, the application seeking condonation of delay is dismissed. Consequently, the Special Leave Petition also stands dismissed.

Even otherwise, we find that the High Court [2023 (11) TMI 759 - PUNJAB AND HARYANA HIGH COURT] has noted that no substantial question of law arose in the case as accepted the explanation that the nephew was the true owner, relied on the bank profile showing the assessee's name removed prior to the relevant period, and noted the absence of material proving the deposits belonged to the assessee.

In passing the aforesaid order, we have followed the earlier order of this Court in Joginder Singh Chatha [2024 (10) TMI 874 - SC ORDER].

Liability to pay interest under Section 234B - computation of advance tax and credit for tax deductible at source under Section 209(1) - effect of non deduction by the payer on the non resident's advance tax liability - proviso to Section 209(1) (Finance Act, 2012) and its prospective operation - inapplicability of PALAM GAS SERVICE to the facts concerning Section 209(1)

HC held [2020 (9) TMI 873 - KARNATAKA HIGH COURT] Interest under Section 234B could not be levied on the non resident assessee for the assessment years 2005 06 and 2006 07; the Tribunal's view in favour of the assessee is upheld.

HELD THAT:- The special leave is disposed of owing to low tax effect.

Question of law, if any, is kept open.

Revision of orders prejudicial to revenue - Order erroneous and prejudicial to the interest of revenue - Failure to make inquiries or verification - Principles of natural justice - Scheme for disposal of appeals under Section 255 - Adjournment pendente lite for issuance of notification

High Court [2023 (12) TMI 1364 - ORISSA HIGH COURT] dismissed the ITA; the revisional order under Section 263 was sustained and the plea to adjourn proceedings pending any scheme or notification under Section 255 was rejected as a dilatory device.

HELD THAT:- Delay condoned. No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special Leave Petition is accordingly dismissed.

Stay of recovery pending disposal of appeal - refund of amounts recovered where assessment is set aside - entitlement to interest on refund or relief from interest on recovered amounts - attachment of cash credit account - compliance with appellate directions for fresh inquiry and verification

Stay of recovery pending disposal of appeal - attachment of cash credit account - Whether further recovery pursuant to the impugned assessment should be carried out pending disposal of the appeal filed before the National Faceless Appeal Centre. - HELD THAT: - The court observed that an appeal has been filed before the National Faceless Appeal Centre and that the appellate procedure entails obtaining a report from the Assessing Officer in accordance with earlier directions, supplying that report to the assessee and allowing objections before final adjudication. Given that the assessment order impugned predates the Tribunal's directions for further inquiry and verification, and considering that 20% of the disputed tax has already been deposited/recovered, the court directed that no further recovery shall be made pursuant to the impugned assessment until the appeal is disposed of. The order does not decide the merits of the assessment but preserves the appellate process and prevents execution while that process runs its course. [Paras 5, 6, 9, 10]

No further recovery shall be effected under the impugned assessment until the appeal is finally disposed of.

Refund of amounts recovered where assessment is set aside - entitlement to interest on refund or relief from interest on recovered amounts - Whether the petitioner is entitled to immediate refund of amounts already attached and recovered, and what relief would follow if the assessment is ultimately set aside. - HELD THAT: - The court declined to order an immediate refund of the amounts already recovered (including the 20% deposited), noting relevant factual distinctions with earlier decisions relied upon by the petitioner and that the disputed demand here has been at least partly met. However, the court recorded that if the assessment is ultimately set aside, the assessee shall be entitled to a refund together with interest payable under the statute or the interest effectively borne by the assessee on the cash credit account, whichever is higher; alternatively the assessee shall be relieved from interest on the recovered amount for the intervening period. This preserves the assessee's substantive restitutionary rights on successful challenge while refusing interim restitution in the present posture. [Paras 7, 8, 9]

No direction for immediate refund of amounts already recovered; if the assessment is set aside, refund with interest or other relief as specified will follow.

Compliance with appellate directions for fresh inquiry and verification - Whether compliance with the Tribunal's and Commissioner's directions for further inquiry and, if necessary, an independent expert report, is to be effected in the appellate process. - HELD THAT: - The court recorded that the Tribunal had directed fresh inquiries and verification regarding the valuation of shares and, insofar as an appeal is pending, the appellate procedure contemplates transmitting the Tribunal order to the Assessing Officer and obtaining a report in accordance with those directions. The assessee will have an opportunity to file objections to the Assessing Officer's report before final adjudication by the appellate authority. The court limited its order to staying further recovery and did not adjudicate the substantive compliance or merits of the inquiries themselves. [Paras 1, 2, 5]

The appellate authority shall follow the Tribunal's directions by obtaining the Assessing Officer's report and supplying it to the assessee for objections; the court did not adjudicate substantive compliance but stayed further recovery pending appeal.

Final Conclusion: Writ petition disposed of by directing that no further recovery shall be made pursuant to the impugned assessment until the appeal before the National Faceless Appeal Centre is disposed of; no immediate refund of amounts already recovered is ordered, but if the assessment is set aside the assessee shall be entitled to refund with interest or other relief as stated; nothing is decided on the merits of the assessment.

Confiscation for non-compliance with Gas Cylinder Rules - PESO certification compliance for import of gas cylinders - show cause notice adjudication and interim relief - provisional release subject to security and pre-deposit

Confiscation for non-compliance with Gas Cylinder Rules - PESO certification compliance for import of gas cylinders - Whether the impugned show cause notices seeking confiscation should be quashed. - HELD THAT: - The Court recorded competing contentions: the Petitioner relied on an application for PESO certification made before import and a corrected certificate issued subsequently, asserting no fault on its part; the Respondents contended that the goods arrived before a valid certificate was in place, indicating prima facie breach of Rules 31 and 32 of the Gas Cylinder Rules, 2016. Having found both sides raised arguable issues, the Court declined to quash the impugned communications and preserved the Respondents' right to adjudicate the show cause notices on merits. The Court therefore declined to interfere at the pre-adjudicatory stage. [Paras 7]

Impugned communications including the show cause notices are not quashed; parties' contentions on the merits are left open.

Show cause notice adjudication and interim relief - provisional release subject to security and pre-deposit - Whether interim relief in the form of provisional release of the cylinders should be granted and on what conditions, and the timetable for adjudication of the show cause notices. - HELD THAT: - Balancing the prima facie dispute and the Petitioner's plea of no fault attributable to it, the Court exercised discretion to grant interim relief to avoid disproportionate prejudice. The Court directed provisional release of the cylinders on the Petitioner furnishing the usual bonds and making a pre-deposit of Rs. 2,00,000, while expressly preserving the Petitioner's contentions that no penalty or redemption fine is payable. The Court granted the Petitioner liberty to file a reply to the show cause notice by 30 October 2024 and directed the concerned authorities to dispose of the show cause notice within two weeks of receipt of such reply after hearing the Petitioner. The payment was ordered to abide by the final adjudication. [Paras 9, 11, 12]

Cylinders to be provisionally released on furnishing bonds and payment of Rs. 2,00,000 (without prejudice); Petitioner may file reply by 30 October 2024; Respondents to decide show cause notice within two weeks of receipt of reply; the deposit will abide the adjudication.

Final Conclusion: Writ petition disposed of: show cause notices not quashed; interim relief granted by provisional release of cylinders subject to bonds and a Rs. 2,00,000 pre-deposit without prejudice to the Petitioner's contentions; liberty to reply by 30 October 2024 and directed adjudication within two weeks thereafter.

Quashing of show cause notice for inordinate and unexplained delay - breach of duty to intimate transfer to the call book under Section 28(9) of the Customs Act - prejudice arising from prolonged delay in adjudication - limited applicability of Supreme Court order in Swati Menthol where delay is unexplained

Quashing of show cause notice for inordinate and unexplained delay - prejudice arising from prolonged delay in adjudication - Impugned show cause notice dated 16 May 2008 quashed on account of inordinate and unexplained delay in adjudication - HELD THAT: - The Court found that the show cause notice issued on 16 May 2008 remained pending without effective adjudication for an inordinate period (2008-2021) and that the respondents have not offered any adequate explanation for this prolonged inaction. The lack of progress after initial hearings, long gaps with no effective hearings, and the absence of documentary evidence explaining transfer to the call book led the Court to adopt the reasoning of earlier Division Bench decisions which hold that gross, unjustifiable and unexplained delay warrants quashing of the show cause notice. The Court further held that prejudice to the petitioner is inherent where an adjudication is left pending for such prolonged periods, and that permitting continuation would impair the petitioner's ability to contest charges effectively. Applying these principles to the material on record, the Court concluded that quashing was warranted. [Paras 11, 12, 16, 20, 21]

Show cause notice dated 16 May 2008 quashed and respondents restrained from proceeding further thereon.

Breach of duty to intimate transfer to the call book under Section 28(9) of the Customs Act - Failure to establish transfer to the call book and non-intimation to the petitioner amounted to breach of duty - HELD THAT: - The affidavit filed by the respondents merely asserts that the matter was transferred to the call book pursuant to departmental instructions, but no supporting file documents or proof of intimation to the petitioner were produced. The Court observed that even absent reliance on the formal requirements of Section 28(9), the department was duty bound to inform the petitioner about such transfer; the absence of any intimation and documentary evidence of transfer reinforced the conclusion that procedural obligations were not complied with, militating against the respondents' case to proceed. [Paras 9, 10, 17]

Respondents failed to demonstrate lawful transfer to the call book or that intimation was given to the petitioner; procedural duty in this regard breached.

Limited applicability of Supreme Court order in Swati Menthol where delay is unexplained - Supreme Court order in Swati Menthol does not mandate continued adjudication where there is inordinate and unexplained delay - HELD THAT: - The respondents relied on the Supreme Court's order in Commissioner, GST & Central Excise v. M/s Swati Menthol, but the Court found that the Supreme Court's directions are fact specific and rested on explanations accepted there (including departmental reasons and commitments). The Division Bench decisions relied upon in this case have considered Swati Menthol and concluded that no general proposition emerges permitting adjudication despite gross unexplained delay. Given the absence of any comparable explanation here, the Swati Menthol order did not compel a different result. [Paras 13, 14, 15, 16, 19]

Swati Menthol does not justify permitting adjudication where delay is inordinate and unexplained in the present facts.

Final Conclusion: The writ petition is allowed: the show cause notice dated 16 May 2008 is quashed for inordinate and unexplained delay and for failure to comply with duties relating to transfer/intimation, and the respondents are restrained from proceeding further on the basis of that notice.

Retrospective operation of clarificatory circular - Duty drawback eligibility - Classification of goods for drawback - Power of revision under Section 129DD of the Customs Act, 1962

Retrospective operation of clarificatory circular - Duty drawback eligibility - Classification of goods for drawback - Whether the Revisional Authority was justified in setting aside the Appellate Authority's order and restoring the original order denying duty drawback on the ground that CBEC Circular No.55/99 dated 25.08.1999 is clarificatory and operates retrospectively, thereby disqualifying the exported woven woollen ladies vests from All-Industry Drawback rates under the Drawback Table 1999-2000. - HELD THAT: - The Revisional Authority examined the matter in light of the CBEC Circular No.55/99 dated 25.08.1999 which clarified that sub-serial No.62.01 of the Drawback Table is not applicable to woollen readymade garments and that S.S. No.62.09 applies only to woollen suits/trousers/blazers/jackets, leaving other woollen garments to claim only Brand Rate. The Revisional Authority relied on the Karnataka High Court decision in CCE Bangalore vs. Central Manufacturing Technology Institute (2002 (142) ELT 336 (Kar)) which held that clarificatory notifications are retrospective in nature. Applying that principle, the Revisional Authority concluded that the circular removes any prior confusion and applies retrospectively, so the exported woven woollen ladies vests did not fall within the All-Industry Drawback rates of the 1999-2000 Drawback Table. The High Court, on review, found no reason to interfere with this conclusion and accepted that the petitioner was not entitled to the drawback claim for the goods in question. [Paras 13, 14]

The Revisional Authority's setting aside of the Appellate Authority's order and restoration of the original order denying the All-Industry Drawback was upheld; the petitioner was not entitled to the claimed drawback.

Final Conclusion: Writ petition dismissed; the Revisional Authority correctly applied the clarificatory circular retrospectively to deny All-Industry Drawback for the exported woven woollen garments under the Drawback Table 1999-2000.

Provisional assessment vs provisional release - Deemed closure under Section 28(5) and 28(6) - Demand under Section 28(4) - Adjudication under Section 125 consequent to Section 124 - Redemption fine in lieu of confiscation - Mere mis-quotation of statutory provision not vitiating proceedings - Remand for factual determination

Provisional assessment vs provisional release - Deemed closure under Section 28(5) and 28(6) - Demand under Section 28(4) - Remand for factual determination - Whether the proceedings should be concluded by applying the amnesty under Section 28(5) & (6) or whether finalization / demand under Section 28(4) and related adjudication under Section 125 is appropriate - HELD THAT: - The Tribunal found that the record does not clearly establish whether only provisional release had been granted or whether assessment itself remained provisional. Because that factual and legal determination is central to whether Section 28(4) (demand of duty) and the deemed closure/amnesty under Section 28(5) & (6) are available, the Tribunal remanded the matter to the adjudicating authority. The adjudicating authority is directed first to determine the nature of the proceedings by ascertaining whether the Bills of Entry were provisionally assessed. If assessment was not provisional, the authority must consider and, upon fulfilment of conditions, allow the benefit of Section 28(5) & (6). Alternatively, if assessment was provisional, the authority must finalise the assessment and then determine demand under Section 28(4) and decide on availability of amnesty under Sections 28(5) & (6) if conditions are met. The Tribunal emphasised that where the record is ambiguous on provisional assessment, remand for factual and legal clarification is appropriate to determine entitlement to amnesty or to proceed under confiscation/adjudication provisions.

Remanded to the adjudicating authority to determine whether assessment was provisional; if not, allow Section 28(5) & (6) amnesty on fulfilment of conditions, or else finalise assessment and proceed under Section 28(4) and then consider amnesty.

Penalty imposition and omission - Effect of amnesty on penalties of co-noticees - Whether penalties proposed or omitted against the importer and co-noticees should be imposed in view of the adjudication on amnesty and the alleged omissions in the Order-in-Original - HELD THAT: - The Tribunal noted that the adjudicating authority recorded findings proposing penalties under various provisions but imposed only some of them and omitted others without deciding them. The department is not pursuing a separate appeal at this stage to press for additional penalties. Consequently, the Tribunal held that the question of imposing penalties on the importer and co-noticees is to be considered by the adjudicating authority in the light of its determination on amnesty. Penalties on other parties will therefore be subject to whether amnesty under Section 28(5) & (6) is available to the importer; the adjudicating authority is to determine and, if necessary, impose penalties (or decide omission) consistent with its findings after resolving the primary question remanded above.

Remanded to the adjudicating authority to examine and decide on imposition or omission of penalties, with penalties on co-noticees to be considered in light of the adjudication on amnesty for the importer.

Final Conclusion: Appeals allowed by way of remand: the matter is remitted to the adjudicating authority to determine whether assessment was provisional and to decide entitlement to amnesty under Sections 28(5) & (6) or to finalise assessment and proceed under Section 28(4); consequential determination on redemption fine, confiscation and penalties (including omissions) is to be taken in accordance with that determination.

Intervention and impleadment - status quo on assets - disclosure of corporate debtor status on MCA website - powers and duties of Interim Resolution Professional - safeguarding assets during CIRP - sealed cover filing of status report

Intervention and impleadment - Application of Greenopolis Welfare Confederation (GWC) to intervene and be impleaded as respondent no.4 - HELD THAT: - The Court considered the application for intervention by GWC and noted service upon the petitioner and the petitioner's counsel's lack of objection. The Supreme Court's order directing maintenance of status quo over assets was noted in the record. In view of these circumstances and the absence of objection from the petitioner, the Court allowed the application for impleadment and directed filing of an amended memo of parties within four weeks. The application is disposed of and will not be listed further. [Paras 2, 3, 4, 5, 6]

GWC permitted to intervene and impleaded as respondent no.4; amended memo to be filed within four weeks; application disposed of.

Disclosure of corporate debtor status on MCA website - status quo on assets - Direction to the Ministry of Corporate Affairs to modify the company status of Three C Shelters Pvt. Ltd. on its website to 'under CIRP' - HELD THAT: - The Court examined competing contentions: homebuyers and IRP urging correction of the MCA website status, and intervenors/IBBI cautioning against alteration in light of the Supreme Court order maintaining status quo. The Court rejected MCA's technical-excuse contention, held that maintaining status quo over assets is consistent with safeguarding stakeholders, and concluded that displaying 'Active' is misleading. To protect stakeholders' interests and align public information with the factual position of CIRP, the Court directed the MCA to disclose the company's status as 'under CIRP' within two weeks, with personal appearance of the Registrar of Companies ordered on default. [Paras 12, 15, 19, 20, 21]

MCA directed to display company status as 'under CIRP' within two weeks; Registrar of Companies to appear in person on next hearing if non-compliant.

Sealed cover filing of status report - powers and duties of Interim Resolution Professional - Permission to the IRP to file an updated status report in sealed cover and to take specified interim measures to safeguard assets - HELD THAT: - The IRP sought leave to file an updated status report in sealed cover and proposed specific measures to protect assets from waste, dispossession, or creation of third-party rights. The Court allowed the sealed cover filing and retained it sealed pending further order. After considering the proposals and the need to safeguard assets and stakeholders' interests during CIRP, the Court authorised the IRP to undertake certain identified steps (as reflected in the order at serial nos. 1, 2, 3, 5, 6 and 12 of the proposal) which include increasing security, dispossessing trespassers, mutation of identified assets in the name of the corporate debtor, publicising laundering of assets, identifying additional assets, and conducting meetings of financial claimants. The Court required a compliance cum updated status report to be filed by the IRP by the next hearing. [Paras 25, 26, 27, 28, 29]

IRP permitted to file sealed updated status report and authorised to take the specified interim measures to safeguard assets; directed to file compliance cum updated status report by next hearing.

Procedural disposition and listing - Disposition or adjournment of miscellaneous interlocutory applications and directions for filing or listing where necessary - HELD THAT: - Several interlocutory applications were considered: an IRP application already disposed; applications for impleadment where documents or replies were directed to be filed within specified time periods; and applications for directions against IBBI with an order for service and reply. The Court disposed of certain applications, directed filing of outstanding documents or replies, and renotified matters for further hearing on specified dates. Registries were directed not to list disposed applications in future. [Paras 36, 37, 38, 39, 40]

Various interlocutory applications disposed of or adjourned with directions for filing of documents/replies and listing on the next indicated date; disposed applications not to be listed further.

Final Conclusion: The Court allowed intervention by GWC and impleaded it as respondent no.4; directed the Ministry of Corporate Affairs to display the company as 'under CIRP' within two weeks; permitted the IRP to file an updated status report in sealed cover and authorised specified interim measures to safeguard the corporate debtor's assets, with a compliance report directed to be filed by the next hearing; miscellaneous interlocutory applications were disposed of or adjourned with appropriate filing and listing directions.

Inclusion of lease rentals and lease premium as insolvency resolution process costs - effect of moratorium under Section 14(1)(d) - application of the Explanation to Section 14(1)(d) - power of the Adjudicating Authority under Section 31 regarding approval of resolution plan - finality of the committee of creditors' commercial wisdom in approving a resolution plan

Inclusion of lease rentals and lease premium as insolvency resolution process costs - effect of moratorium under Section 14(1)(d) - application of the Explanation to Section 14(1)(d) - Whether lease rentals and lease premium falling due during the CIRP period are includible in insolvency resolution process costs and whether the Explanation to Section 14(1)(d) applies to direct such payment. - HELD THAT: - The Tribunal had held that lease rentals and lease premium accruing from the insolvency commencement date till approval of the resolution plan form part of insolvency resolution process costs and directed the authorities to submit details for inclusion. This Court examined the applicability of the Explanation to Section 14(1)(d) and the scope of Section 5(13) read with Regulation 31. Having considered the earlier decision in Sunil Kumar Agrawal, the Court concluded that the Explanation to Section 14(1)(d) (which protects license/permit/registration-type grants from suspension/termination subject to payment of current dues) does not extend to make premium amount or lease rent per se same as those grants for the purpose of compelling payment as CIRP costs. In view of the unsettled correctness of that earlier decision pending before the Supreme Court, this Court held that the same view must be maintained for the present matter until the higher court decides the challenge. Consequently, the Tribunal's order directing inclusion of the lease rentals and premium as CIRP costs was inappropriate on the stated legal basis. [Paras 16, 21, 22]

The order treating lease rentals and lease premium as CIRP costs under the Explanation to Section 14(1)(d) is not sustained and cannot be upheld in view of the precedent in Sunil Kumar Agrawal, which is to be followed until finally decided by the Supreme Court.

Power of the Adjudicating Authority under Section 31 regarding approval of resolution plan - finality of the committee of creditors' commercial wisdom in approving a resolution plan - Whether the Adjudicating Authority can alter or modify terms of a resolution plan approved by the committee of creditors on grounds of approval under Section 31. - HELD THAT: - The Court reviewed Section 31 and the consistent principle that the Adjudicating Authority's role on approval is confined to being satisfied that the plan meets statutory requirements and contains provisions for effective implementation. There is no statutory power to alter or modify an approved resolution plan; the authority may either approve or reject the plan. Reliance on Mathuraprasad C. Pandey established that the Adjudicating Authority exceeded jurisdiction where it modified conditions of an approved plan. Applying that reasoning, the Court observed that the Tribunal's direction (which had the effect of varying the financial consequences considered by the CoC) amounted to impermissible tinkering with the CoC-approved plan. [Paras 19, 22]

The Adjudicating Authority must not modify or alter the terms of a resolution plan approved by the committee of creditors; intervention that effectively changes approved plan terms is beyond its jurisdiction.

Final Conclusion: The appeal is allowed. The impugned order directing inclusion of lease rentals and lease premium as CIRP costs and the attendant directions are set aside. No costs.

Ineligibility under Section 29A(c) - application of Section 240A to micro, small and medium enterprises (MSMEs) - relevant date for eligibility - time of submission of the resolution plan - persons acting in concert / management and control - curative proviso for NPA accounts (payment of overdue amounts before submission) - commercial wisdom of the Committee of Creditors and limited judicial review under Section 31

Application of Section 240A to micro, small and medium enterprises (MSMEs) - relevant date for eligibility - time of submission of the resolution plan - ineligibility under Section 29A(c) - Whether the Successful Resolution Applicant was ineligible under Section 29A(c) where the Corporate Debtor obtained MSME registration during CIRP but prior to submission of the resolution plan - HELD THAT: - The Tribunal held that Section 240A, introduced to exempt MSMEs from clauses (c) and (h) of Section 29A, operates notwithstanding other provisions and therefore precludes application of Section 29A(c) to a resolution applicant in respect of an MSME. The determinative date for assessing disqualification under Section 29A(c) is the date of submission of the resolution plan. The Tribunal relied on the Supreme Court's decision in Hari Babu Thota which clarified that the cut-off for applicability of Section 29A(c) is the date of submission of the plan and that an MSME registration obtained prior to submission of the plan attracts the benefit of Section 240A. Applying these principles to the facts, since the Corporate Debtor obtained MSME registration before the plan was submitted, the SRA could not be disqualified under Section 29A(c); the Adjudicating Authority therefore erred in declaring the SRA ineligible on that ground. [Paras 16, 21, 31, 39, 48]

The SRA was not ineligible under Section 29A(c) because the Corporate Debtor had obtained MSME registration prior to submission of the resolution plan; the Adjudicating Authority's finding of ineligibility was set aside.

Persons acting in concert / management and control - curative proviso for NPA accounts (payment of overdue amounts before submission) - commercial wisdom of the Committee of Creditors and limited judicial review under Section 31 - Whether the Adjudicating Authority properly rejected the resolution plan for reasons relating to alleged control/management links, set-off adjustments, or other commercial considerations outside the statutory criteria in Section 30(2) - HELD THAT: - The Tribunal noted that the Adjudicating Authority's rejection was founded on the application of Section 29A(c) and related findings of management/control; having held that Section 29A(c) did not apply by reason of Section 240A, those grounds fell away. On the contention regarding set-off and commercial terms (including the alleged adjustment), the Tribunal observed that no challenge was raised that the plan failed to conform to the statutory requirements of Section 30(2). The Tribunal reiterated the settled principle that the Adjudicating Authority's scrutiny under Section 31 is limited to matters specified in Section 30(2) and that the commercial wisdom of the Committee of Creditors is not subject to re appraisal beyond those statutory parameters. Consequently, the Adjudicating Authority erred in rejecting the plan on the impugned commercial grounds. [Paras 26, 27, 29, 30, 31]

The Adjudicating Authority erred in rejecting the resolution plan on the impugned grounds; the resolution plan is to be approved and the direction to initiate liquidation is set aside.

Final Conclusion: All appeals are allowed. The NCLT order dated 24.01.2024 is set aside; IA No.4173 of 2023 is dismissed and IA No.5458 of 2022 is allowed by approving the Resolution Plan; consequential steps to be taken by the Adjudicating Authority within 60 days.

Adjudication under Section 8 of the Prevention of Money Laundering Act, 2002 - definition of "property" under Section 2(1)(v) of the Prevention of Money Laundering Act, 2002 - restoration of property/consideration of claimant's claim during pendency of trial - role of the Special Court in determining release or restoration of property

Adjudication under Section 8 of the Prevention of Money Laundering Act, 2002 - restoration of property/consideration of claimant's claim during pendency of trial - definition of "property" under Section 2(1)(v) of the Prevention of Money Laundering Act, 2002 - Liberty granted to petitioner to file claim under Section 8 PMLA before the court concerned and direction for that court to consider the claim in accordance with law; merits were not adjudicated by this Court. - HELD THAT: - The Court noted that amounts sought to be refunded fall within the statutory definition of "property" under Section 2(1)(v) and that Section 8 provides the statutory regime for adjudication of claims and, optionally, consideration of restoration during the pendency of trial. In view of these provisions and the petitioner's statement of investment with the company, the petitioner was permitted to place the claim before the competent court by filing a certified copy of this order. The High Court expressly refrained from examining the merits of the claim and directed that the court concerned shall decide the claim on the basis of material brought before it and in accordance with law, uninfluenced by observations in this order. Administrative directions were given for filing the certified copy and claim within ten days so that the court concerned may proceed to consider the claim under the statutory framework provided by Section 8. [Paras 6, 7, 8, 9]

Petitioner granted liberty to file claim under Section 8 PMLA before the court concerned; merits to be considered by that court in accordance with law; certified copy and claim to be filed within ten days.

Final Conclusion: Writ petition disposed of by granting petitioner liberty to file and prosecute a claim under Section 8 of the Prevention of Money Laundering Act, 2002 before the appropriate court, which shall decide the claim on merits and in accordance with law; High Court did not adjudicate the merits.

Grant of bail under PMLA - prima facie satisfaction under Section 45 of PMLA - consideration of statements recorded under Section 50 at bail stage - mens rea requirement for money laundering - proceeds of crime as defined under Section 2(1)(u) PMLA - approach to economic offences and seriousness in bail matters

Grant of bail under PMLA - approach to economic offences and seriousness in bail matters - Whether the applicant should be released on regular bail in proceedings under the PMLA - HELD THAT: - The Court applied the settled principle that at the bail stage under the PMLA it need not delve into merits but must form a view on the basis of prima facie material. Having considered the material collected during investigation - including bank statements of M/s Techpro IT Solutions LLC., digital records, statements of associates, and links to illegal betting apps (Mahadev Online Book and Sky Exchange) - the Court found sufficient material to prima facie connect the applicant with proceeds of crime and with activities indicative of money-laundering. The Court also took into account the statutory scheme and the seriousness of economic offences, noting the need for a stringent approach where organized and deep-rooted conspiracies are alleged. In light of the nature of allegations, documentary and digital material and the risk factors identified, the Court was not inclined to enlarge the applicant on bail. [Paras 11, 12, 17, 18]

Bail application rejected

Consideration of statements recorded under Section 50 at bail stage - mens rea requirement for money laundering - Whether statements recorded under Section 50 of the PMLA can be considered at the stage of bail and whether denial of mens rea by the applicant precludes prima facie finding - HELD THAT: - The Court held that while the evidentiary value of statements recorded under Section 50 is to be tested at trial, such statements can be considered for the limited purpose of forming a prima facie view at the bail stage. The applicant's denials did not disentitle the prosecution material from being considered; mere denial by the accused did not dispel the prima facie inference of mens rea when documentary and digital material pointed otherwise. Thus the Court treated the Section 50 statements and associated digital and bank records as relevant material for determining whether reasonable grounds exist to believe involvement in money-laundering. [Paras 6, 16]

Section 50 statements may be considered for prima facie assessment at bail stage; denials do not automatically negate mens rea for that limited purpose

Prima facie satisfaction under Section 45 of PMLA - proceeds of crime as defined under Section 2(1)(u) PMLA - Whether there exist reasonable grounds under Section 45 of the PMLA to believe the applicant was involved in the offence of money-laundering - HELD THAT: - Applying Section 45's test of 'reasonable grounds for believing' and guided by precedents on the limited scope of bail adjudication, the Court found that the investigation had produced material showing transfer and receipt of funds, alleged transfers into and out of entities and properties linked to the applicant, and digital corroboration connecting him to illegal betting operations. The Court accepted the prosecution view that proceeds transferred through bogus/benami accounts and invested through identifiable routes constitute 'proceeds of crime' within Section 2(1)(u) and concluded there were reasonable grounds to believe the applicant's involvement in laundering such proceeds. [Paras 12, 17]

Court satisfied that reasonable grounds under Section 45 exist to proceed; prima facie involvement established

Final Conclusion: On consideration of the prima facie material - including bank records, digital evidence and statements of associates - and applying the limited scope of bail adjudication under the PMLA, the Court found reasonable grounds to believe the applicant was involved in money-laundering and, having regard to the seriousness and organized nature of the alleged offences, refused to grant bail.

Entitlement to Cenvat credit on input services at time of receipt - non-recovery of Cenvat credit availed prior to issuance of Occupancy/Completion Certificate - application of Rule 6, Cenvat Credit Rules - operation of Rule 11(4) limiting recovery to inputs in stock or contained in taxable service - effect of Occupancy/Completion Certificate on taxability of output service

Entitlement to Cenvat credit on input services at time of receipt - application of Rule 6, Cenvat Credit Rules - operation of Rule 11(4) limiting recovery to inputs in stock or contained in taxable service - non-recovery of Cenvat credit availed prior to issuance of Occupancy/Completion Certificate - Whether cenvat credit availed and utilized by the appellant prior to receipt of Occupancy Certificate is liable to be recovered attributable to unsold carpet area on obtaining the Occupancy Certificate. - HELD THAT: - The Tribunal found that the appellant legitimately availed Cenvat credit of service tax on input services at the time the output service was taxable and that the entire credit had been utilized before receipt of the Occupancy Certificate. On a harmonious reading of the Rules, the entitlement to credit is examined at the time of receipt of input services and, if availed when the output service was wholly taxable, such credit cannot be denied or recovered merely because a portion of the service later becomes non-taxable on issuance of a Completion/Occupancy Certificate. Rule 6 applies to the period after obtaining the Completion/Occupancy Certificate; it does not operate retrospectively to deny credit lawfully availed earlier. Further, sub-rule (4) of Rule 11 provides for payment only in respect of inputs lying in stock or contained in the taxable service when exemption is opted for, and does not require repayment of credit already availed for input services used when the output was taxable. Applying these principles, and following the reasoning in the cited Gujarat High Court decision, the Tribunal held that the demand for recovery of the cenvat credit attributable to the unsold carpet area could not be sustained. [Paras 4, 5]

The demand for recovery of the cenvat credit availed prior to receipt of the Occupancy Certificate is set aside and the appeal is allowed with consequential relief.

Final Conclusion: The Tribunal allowed the appeal, set aside the demand for recovery of cenvat credit attributable to the unsold carpet area which was availed and utilized before receipt of the Occupancy Certificate, and granted consequential relief to the appellant.

Confirmation of service tax demand and interest - Imposition of penalty under Section 77 - Imposition of penalty under Section 78 - Benefit and waiver of penalty under Section 80 - Revenue neutrality plea and Cenvat credit - Extended period of limitation and quantification

Confirmation of service tax demand and interest - Revenue neutrality plea and Cenvat credit - Extended period of limitation and quantification - Confirmation of the demand for service tax and interest against the appellant - HELD THAT: - The appellate tribunal reviewed the findings of the adjudicating and first appellate authorities that the appellant provided taxable services during the period 2005-06 to 2009-10 without timely registration or payment of service tax. The plea of revenue neutrality based on alleged availability of Cenvat credit to the service recipient was rejected as having no statutory basis and inconsistent with the Cenvat scheme. The authorities also noted that the appellant admitted non-payment of tax and had not made efforts to ascertain taxability, and that the department's detection of payments by the service recipient supported the demand. Having considered these aspects, the tribunal did not interfere with the confirmation of service tax and interest as recorded by the lower authorities. [Paras 4]

Demand of service tax and interest confirmed; plea of revenue neutrality rejected.

Imposition of penalty under Section 77 - Imposition of penalty under Section 78 - Benefit and waiver of penalty under Section 80 - Validity of penalties imposed under Sections 77 and 78 and applicability of Section 80 for waiver - HELD THAT: - Although both lower authorities imposed penalties under Sections 77 and 78, the tribunal found that the appellant had not contested the show cause notice on merits, had himself computed and paid the tax claimed, and had represented that he was a petty contractor lacking expertise in complex service tax provisions. The tribunal held that, in view of the admitted facts and the appellant's conduct (including payment of the tax demanded), the case was fit for the exercise of discretion under Section 80 to grant relief from penalties. Consequently the tribunal concluded that penalties under Sections 77 and 78 should be set aside. [Paras 4, 5]

Penalties imposed under Sections 77 and 78 set aside and waived by applying Section 80.

Final Conclusion: Appeal partly allowed: the confirmed demand of service tax and interest for the period 2005-06 to 2009-10 is sustained, but penalties under Sections 77 and 78 are set aside and waived under Section 80.

Confirmation of service tax demand - deduction for services rendered prior to 16.06.2005 - classification of provident fund as part of taxable consideration - extended period of limitation invoked for suppression of facts - imposition of penalty under Section 77 - imposition of penalty under Section 78 - non-imposition of penalty under Section 76 due to amended Section 78

Confirmation of service tax demand - deduction for services rendered prior to 16.06.2005 - Demand of service tax confirmed subject to allowed deductions for services rendered prior to 16.06.2005 and service tax components included in gross receipts - HELD THAT: - The adjudicating authority allowed the appellant's claim to exclude receipts attributable to services provided prior to 16.06.2005 and to exclude amounts representing service tax collected by the recipient from the gross turnover. After making these deductions the Original Authority computed the net liability and confirmed a balance demand of Rs. 6,69,879/-. The Tribunal has considered the orders of the lower authorities and found no infirmity in allowing deductions for services prior to 16.06.2005 and for service tax already included in the gross receipts, and in confirming the remaining demand accordingly. [Paras 4]

Demand confirmed after allowing deductions for pre-16.06.2005 services and for service tax already included in receipts; balance demand upheld.

Classification of provident fund as part of taxable consideration - Amount claimed as provident fund cannot be deducted and forms part of taxable value - HELD THAT: - On examination of invoices there was no indication that a portion represented provident fund. Applying the definition of value of taxable services and relevant CBEC guidance, the authorities held that recovery of staff costs, including contributions, form part of the consideration for manpower supply and are includible in taxable value. The Tribunal agreed with the factual and legal finding that the amount claimed as provident fund is part of the gross consideration and is not excludible. [Paras 4]

Deduction for provident fund disallowed; such amount included in taxable value.

Extended period of limitation invoked for suppression of facts - Extended period of limitation under the proviso to Section 73(1) was rightly invoked on facts of suppression - HELD THAT: - The Original Authority found that the appellant failed to disclose receipt of taxable consideration and did not file proper returns, despite being aware that services were taxable and having collected service tax. The deliberate nondisclosure and suppression of material facts justified invocation of the proviso to Section 73(1) for extended period. The Tribunal found these findings unchallenged and supported by record, and therefore held that the demand was not barred by limitation. [Paras 4]

Invocation of extended limitation period upheld; demand not time-barred.

Imposition of penalty under Section 77 - imposition of penalty under Section 78 - non-imposition of penalty under Section 76 due to amended Section 78 - Penalties under Section 77 and Section 78 sustained; penalty under Section 76 not imposed in view of amendment to Section 78 - HELD THAT: - The Original Authority imposed penalty under Section 77 for failure to comply with statutory provisions and under Section 78 for conscious suppression and non-deposit of collected service tax. The authority refrained from imposing penalty under Section 76 because amendment and proviso to Section 78 excluded Section 76 in applicable circumstances. The Tribunal found the conclusion-based on conscious suppression, collection and non-deposit of tax, and established precedents-warranted, and did not interfere with the imposition of penalties under Sections 77 and 78 while noting the non-application of Section 76. [Paras 4]

Penalties under Section 77 and Section 78 upheld; penalty under Section 76 not imposed.

Final Conclusion: The appeal is dismissed. The confirmed service tax demand after allowed deductions, the inclusion of the claimed provident fund in taxable value, the invocation of the extended period for suppression, and the penalties under Sections 77 and 78 (with Section 76 not imposed) are sustained.

Construction of residential complex services (CRCS) - Service tax liability - Service simpliciter and composite works contract distinction - Taxability prior to 01.07.2010 - Penalties under Sections 77 & 78 of the Finance Act, 1994

Construction of residential complex services (CRCS) - Taxability prior to 01.07.2010 - Service simpliciter and composite works contract distinction - Penalties under Sections 77 & 78 of the Finance Act, 1994 - Whether the Revenue was justified in fastening service tax liability on the appellant under CRCS for the disputed period - HELD THAT: - The Tribunal accepted that the factual matrix was not in dispute and applied the legal position established by earlier Benches and ultimately by the Apex Court as followed in the co-ordinate decisions relied upon by the appellant. It relied on the view that construction of residential complexes is not amenable to service tax prior to 01.07.2010 whether characterised as service simpliciter or as a composite works contract, as reflected in the cited decisions. Applying that settled legal position to the disputed period, the Tribunal held that the demand of service tax could not be sustained. Consequentially, since the primary demand could not be upheld, there was no scope to impose penalties under Sections 77 and 78 of the Finance Act, 1994. [Paras 7, 8, 9]

Demand of service tax under CRCS for the disputed period set aside and penalties under Sections 77 & 78 cannot be imposed.

Final Conclusion: The appeal is allowed; the impugned order confirming service tax demand under CRCS and imposing penalties is set aside for the disputed period, with consequential benefits as per law.

Exemption under Notification No. 25/2012 ST - governmental authority - original works - use predominantly other than for commerce, industry or any other business or profession - strict interpretation of exemption notifications - cum tax benefit (treating gross receipts as inclusive of service tax) - penalty under section 78 of the Finance Act, 1994 - non recovery of service tax (Section 73)

Exemption under Notification No. 25/2012 ST - governmental authority - original works - use predominantly other than for commerce, industry or any other business or profession - strict interpretation of exemption notifications - Applicability of exemption under Sl. No. 12 to Notification No. 25/2012 ST to services rendered by the appellant in laying cables under the NOFN/BharatNet project for BSNL/BBNL - HELD THAT: - The Tribunal examined whether the threefold conditions of Sl. No. 12 - (i) services provided to Government/local authority/governmental authority, (ii) by way of construction/installation/commissioning of a civil structure or other original works, and (iii) the works being meant predominantly for use other than for commerce, industry or any business - were satisfied. Though BSNL is wholly government owned, the Tribunal found from BSNL's stated objectives and functions that its primary activities include commercial expansion, subscriber acquisition and revenue generation. Activities performed for BSNL therefore serve commercial purposes. The notification requires strict fulfilment of its conditions and exemptions are to be construed narrowly. Applying that principle and the ordinary meaning of 'commerce', the Tribunal held that the works in question were not predominantly for non commercial use and, consequently, the appellant did not fall within the exemption. The impugned order denying exemption was upheld. [Paras 6]

Exemption under Notification No. 25/2012 ST is not available to the appellant for the services rendered under the NOFN/BharatNet project.

Cum tax benefit (treating gross receipts as inclusive of service tax) - non recovery of service tax (Section 73) - penalty under section 78 of the Finance Act, 1994 - Whether the demand should be recomputed treating gross receipts as inclusive of service tax and consequential recalculation of penalty - HELD THAT: - The Tribunal noted established precedents that where service providers have not separately collected service tax or shown it in invoices/returns, relief by treating receipts as inclusive of service tax (cum tax) is appropriate for computation of tax liability. Having held that tax was payable, the Tribunal remanded the matter to the original authority to recompute the tax demand treating the total receipts as inclusive of service tax and directed that the penalty under section 78 be recalculated on the basis of the revised demand. The remand follows authority recognising cum duty treatment and the principle that valuation must be recomputed where tax was not shown separately. [Paras 7, 8]

Matter remanded to the original authority for recomputation of demand treating gross receipts as inclusive of service tax and for appropriate recalculation of penalty under section 78.

Final Conclusion: The impugned adjudication is upheld insofar as the appellant is not entitled to exemption under Notification No. 25/2012 ST for the NOFN/BharatNet works; however, the matter is remanded to the original authority for recomputation of tax treating receipts as cum tax and for recalculation of the penalty, and the appeal is allowed to that limited extent.

CENVAT credit on tower materials - availability of credit as inputs or as capital goods - extended period of limitation under the proviso to section 73(i) of the Finance Act, 1994 - suppression of facts with intent to evade payment of duty

CENVAT credit on tower materials - availability of credit as inputs or as capital goods - Whether BSNL was entitled to avail CENVAT credit in respect of duty paid on tower materials - HELD THAT: - The show cause notice contained a bald allegation that CENVAT credit was availed on tower materials, but AnnexureA annexed to the notice did not specifically demonstrate that credit had in fact been availed on duty paid for tower materials. The Commissioner on remand examined the legal question and, relying on Tribunal precedent in M/s GMTD Bharat Sanchar Nigam Limited vs. Commissioner (Service Tax Appeal No. 54034 of 2018 decided on August 08, 2024), recorded that tower materials fall within the ambit of admissible CENVAT credit, either as inputs or as capital goods. Having regard to that authoritative Tribunal decision and the legal position, there was no error in the Commissioner's conclusion on the admissibility of credit on tower materials. [Paras 12, 14]

BSNL was entitled to avail CENVAT credit on duty paid for tower materials; the Commissioner's finding to that effect is upheld.

Extended period of limitation under the proviso to section 73(i) of the Finance Act, 1994 - suppression of facts with intent to evade payment of duty - Whether the extended period of limitation under the proviso to section 73(i) of the Finance Act, 1994 could be invoked against BSNL - HELD THAT: - The show cause notice alleged suppression of facts but did not specifically allege that facts were suppressed with the intent to evade payment of service tax. Jurisprudence of this Tribunal, affirmed by the Supreme Court's dismissal of departmental challenge, requires a positive finding of deliberate suppression with intent to evade duty for the proviso to operate. Mere allegation of suppression or nonpayment without an averment or proof of deliberate intent to evade is insufficient to invoke the extended period. Applying that principle to the present facts, the Commissioner rightly concluded that BSNL, being a Central Government company and in the absence of any specific allegation or material proving deliberate suppression to evade duty, could not be made subject to the extended period of limitation. [Paras 18]

The extended period of limitation under the proviso to section 73(i) could not be invoked; the Commissioner's conclusion disallowing invocation of the extended period is upheld.

Final Conclusion: The appeal is dismissed; the Commissioner's order dropping the proceedings is upheld.

Refund of un-utilised Cenvat credit - refund in cash or credit to other units - transitional provision carrying forward Cenvat credit - refund permissible only for exports under bond or letter of undertaking - precedential effect of Full Bench decision - overruling of Slovak India decision

Refund of un-utilised Cenvat credit - refund in cash or credit to other units - refund permissible only for exports under bond or letter of undertaking - transitional provision carrying forward Cenvat credit - Whether refund (in cash or by credit) of un-utilised Cenvat credit was permissible in the appellant's case - HELD THAT: - The Tribunal applied the Full Bench decision in Gauri Plasticulture and held that refund of un-utilised Cenvat credit cannot be granted in cash or otherwise except in the circumstances expressly permitted by the scheme of the rules. The Full Bench interpreted the transitional provision as enabling carry forward of un-utilised credit but not as authorising cash refund. It held that refund under the rules is confined to cases of clearance for export under bond or letter of undertaking (as permitted by Rule 5 in its substituted form) and does not permit refund merely because inputs were un-utilised or manufacturing ceased. The High Court found no error in the CESTAT's reliance on that Full Bench ratio, observed that conflicting decisions (such as Lav Kush Textile relying on Slovak India) are implicitly overruled by the Full Bench, and concluded that the ratio is applicable to the facts of the present case even if there are slight factual differences. [Paras 9, 11, 14]

Appeal dismissed; no refund in cash or by credit was warranted and the CESTAT orders are not error-prone.

Final Conclusion: The High Court dismissed the appeal, upholding the CESTAT's orders which followed the Full Bench in Gauri Plasticulture holding that un-utilised Cenvat credit is not refundable in cash or by credit to other units except as expressly permitted by the statutory scheme (notably refunds for exports under bond/LOU); conflicting precedents were treated as implicitly overruled.

Statutory cap on condonation of delay in appeals under Central Excise/Finance Act - Exclusion of general Limitation Act by a special statute - Limits of extraordinary writ jurisdiction where efficacious alternative statutory remedy exists

Statutory cap on condonation of delay in appeals under Central Excise/Finance Act - Exclusion of general Limitation Act by a special statute - Whether the appeal against the impugned order could be entertained despite being filed beyond the maximum statutory period and whether the authority could condone the delay beyond the period prescribed by the statute. - HELD THAT: - The Court held that the appeal was filed well beyond the permissible period (appeal preferred after 1,325 days) and that under the statutory scheme the power to condone delay is limited to the period expressly provided by the special statute. Relying on precedents cited in the judgment, the Court observed that where a special statute prescribes a maximum period for filing an appeal and specifies any limited extension, the general provision of Section 5 of the Limitation Act cannot be invoked to extend that period. The Court noted the binding exposition in Singh Enterprises and subsequent authorities that the appellate authority and courts cannot condone delay beyond the statutory ceiling without doing violence to the legislative intent. Applying that principle, the Court found no jurisdiction to condone the delay in the present case and therefore could not entertain the challenge to the impugned orders on the ground of delay. [Paras 15, 16, 17, 18, 19]

The appeal was time-barred and the delay could not be condoned beyond the statutory period; challenge to the impugned orders cannot succeed on the ground of delay.

Limits of extraordinary writ jurisdiction where efficacious alternative statutory remedy exists - Whether the writ petition before the Single Judge was maintainable despite the availability of an efficacious alternative remedy in the statutory appeal route. - HELD THAT: - The Court held that the petitioner had an equally efficacious alternative remedy of filing an appeal under the statutory provision before the Division Bench (section 35-G/section 35J avenues as noted in the record) and therefore the writ petition was not ordinarily maintainable. Citing the principle that the High Court should exercise restraint under Article 226 when a special statute provides an adequate remedy, the Court declined to bypass the statutory machinery. In view of the availability of the statutory appellate mechanism, the Court found the writ petition inappropriate for interference with the impugned orders. [Paras 20, 21]

The writ petition is not maintainable because an efficacious alternative statutory remedy is available; interference is declined.

Final Conclusion: The writ petition is dismissed: the appeal was time barred and beyond the scope of condonation under the special statutory scheme, and the petitioner had an efficacious alternative statutory remedy, hence no interference with the impugned orders is warranted.

Admissibility of input service credit - interpretation of definition of input service - exclusion clause for construction and works contracts - use in or in relation to manufacture - deletion of 'setting up of factory' from inclusion clause

Admissibility of input service credit - deletion of 'setting up of factory' from inclusion clause - exclusion clause for construction and works contracts - use in or in relation to manufacture - Whether cenvat credit of services used for setting up and commissioning of the speciality chemical plant is admissible after the amendment deleting 'setting up of factory' from the inclusion clause of the definition of "input service", and whether any of the impugned services fall within the exclusion clause. - HELD THAT: - The Tribunal examined the post-amendment definition of "input service" and its exclusion clause as in force after 01.04.2011 and as amended with effect from 01.07.2012. It noted that, other than services specifically falling within the exclusion for construction, works contracts and related specified services, services which are used in or in relation to manufacture and clearance of final products up to the place of removal remain admissible as input services. The Tribunal found no dispute that the appellant's impugned services (consultancy, erection, commissioning, insurance, scientific and technical consultancy, manpower supply and supply of tangible goods for use) were used in or in relation to manufacture. The deletion of the phrase "setting up of factory" from the inclusion clause was held to be clarificatory and not intended to exclude services which otherwise satisfy the test of being used in or in relation to manufacture. On perusal of the exclusion clause the Tribunal found that none of the impugned services fell within the excluded categories (construction/works contract/service portion listed under the exclusion). Reliance placed on earlier decisions by the appellant was noted to be supportive. Having decided the matter on merits on this basis, the Tribunal did not address other issues raised below. [Paras 4, 5]

Cenvat credit on the impugned services is admissible; the impugned orders denying credit and imposing equivalent penalty are set aside and the appeal is allowed.

Final Conclusion: Appeal allowed; the Tribunal set aside the orders denying cenvat credit and imposed penalty, holding that the deletion of "setting up of factory" from the inclusion clause does not exclude services which are used in or in relation to manufacture and that the impugned services do not fall within the exclusion for construction/works contract.

Refund of duty paid by mistake - mistaken payment due to ERP/system error - refund admissibility where duty liability belongs to another unit - computation of limitation for refund under Section 11B - date of first filing - date of initial presentation of refund claim to department - power of Commissioner (Appeals) to remand

Refund of duty paid by mistake - mistaken payment due to ERP/system error - refund admissibility where duty liability belongs to another unit - Duty paid by the appellant's Daman unit on account of liability of its Halol unit (due to ERP error) is refundable in principle. - HELD THAT: - The Tribunal found no dispute that the Daman unit paid duties which were liability of the Halol unit because of an ERP error. Applying the reasoning of the jurisdictional High Court in Auro Pumps and Devang Paper Mills, where mistaken payments credited to Government account were held to be refundable rather than treated as non-payment, the Tribunal held that such mistaken payment cannot give rise to a coerced liability and is refundable. The Tribunal therefore treated the payment made by the appellant in excess as legally refundable on the facts of this case. [Paras 4]

Payment made by the appellant's Daman unit on account of Halol unit's liability, made by mistake, is refundable.

Computation of limitation for refund under Section 11B - date of first filing - date of initial presentation of refund claim to department - For reckoning the one-year period under Section 11B the date of the first filing/presentation of the refund claim is to be treated as the date of filing even if the department returned the application and it was re-filed later. - HELD THAT: - The Tribunal found that the appellant initially filed the refund claim within one year from the relevant date but the department returned the claim and the appellant re-filed later. Relying on precedents including Nokia India Sales and Bhandiguri Tea Estate, the Tribunal held that the date of the first submission (even if the application was returned for defects and re-filed) is to be reckoned for limitation purposes. Applying that principle to the facts, the Tribunal concluded the appellant's refund claim is within time and not barred under Section 11B. [Paras 4]

The initial filing date is to be reckoned for limitation under Section 11B; the appellant's refund claim is not time-barred.

Power of Commissioner (Appeals) to remand - Commissioner (Appeals) has the power to remand matters to the adjudicating authority. - HELD THAT: - The appellant challenged an order of the Commissioner (Appeals) remanding the matter. The Tribunal referred to its consistent jurisprudence, recognising that, post-amendments to the statute, the Commissioner (Appeals) possesses the power to remand. On the merits, having found the same principles applicable as in the companion appeal, the Tribunal allowed the appeal on merits as well to the extent indicated. [Paras 5]

Order of Commissioner (Appeals) remanding the matter does not exceed his powers; remand power is recognized and the appeal is allowed on the merits as indicated.

Final Conclusion: Impugned orders are set aside; appeals are allowed and the appellant is entitled to consequential relief, including grant of refund (not time-barred) and remittance consistent with the Tribunal's findings.

Medical negligence - actionable negligence - duty to exercise due care - breach of duty - consequential damage - Bolam test - Res ipsa loquitur - standard of care of medical professional

Medical negligence - duty to exercise due care - breach of duty - consequential damage - Whether the NCDRC was justified in holding the doctor and PGI liable for medical negligence and awarding compensation. - HELD THAT: - The Court examined the material on record and found that the complainants adduced no evidence to establish that the doctor failed to exercise the requisite skill or care in performing the PTOSIS surgery. Deterioration of the patient's condition post-surgery, by itself, is not necessarily indicative of negligence; complications or unfavorable outcomes may occur without any unacceptable medical practice. The State Commission had concluded, on the available records, that the doctor possessed requisite qualifications and had not adopted unacceptable practice. The NCDRC reversed that finding solely on the basis that the post-operative condition worsened; but there was no evidence of any overt act or omission by the doctor proving breach of duty. In absence of proof that the doctor did not exercise reasonable competence or that accepted medical practice was departed from, the finding of liability and the award of compensation were unsustainable. The Court therefore set aside the NCDRC order and restored the State Commission's dismissal of the complaint. [Paras 13, 14, 15, 19, 20]

The finding of negligence and the award by the NCDRC were set aside; the State Commission's order dismissing the complaint is restored and no compensation is payable.

Bolam test - Res ipsa loquitur - standard of care of medical professional - actionable negligence - The legal standard applicable to alleged medical negligence and whether Res Ipsa Loquitur applies from an unfavorable surgical outcome. - HELD THAT: - The Court reiterated that actionable negligence in the medical context requires proof of duty, breach and consequential damage, and that mere error of judgment, accident or an unfavorable outcome does not establish negligence if the practitioner followed acceptable medical practice. The Bolam test governs: a doctor is not negligent if acting in accordance with a responsible body of medical opinion unless it is shown that accepted principles were not followed. Accordingly, Res Ipsa Loquitur cannot be invoked to fix liability simply because the surgery failed or the patient did not respond favorably; expert evidence is required to show that the requisite skill was not exercised. As the complainants produced no expert material to rebut that the accepted practice was followed, liability could not be founded on the doctrine of Res Ipsa Loquitur. [Paras 14, 16, 17, 18]

Bolam test applies; absence of expert evidence prevents application of Res Ipsa Loquitur and precludes a finding of actionable negligence.

Final Conclusion: The appeal by the doctor and PGI is allowed; the NCDRC's order finding negligence and awarding compensation is set aside and the State Commission's dismissal of the complaint is restored; the complainants' appeal is dismissed.

Extension of time under Section 29A of the Arbitration and Conciliation Act, 1996 - Applications for extension of time can be filed after expiry of the tenure of the Arbitral Tribunal - Remand for appointment of a new arbitrator - Exclusion of period of stay from computation under Section 29A - Vacating of interim orders

Extension of time under Section 29A of the Arbitration and Conciliation Act, 1996 - Applications for extension of time can be filed after expiry of the tenure of the Arbitral Tribunal - Power to grant extension of time for making and publishing an arbitral award and the temporal scope of Section 29A applications - HELD THAT: - The Court confirmed the legal position stated in the judgment dated 12.09.2024 that applications for extension of time under Section 29A may be entertained even after the expiry of the tenure of the Arbitral Tribunal. Applying that principle to the appeals before it, the Court in several matters set aside impugned judgments which had denied such relief and extended the time for making, passing and publishing the Award (in specified matters) to specified future dates. The Court left all pleas and contentions open where it granted extensions, indicating that the grant was procedural relief in view of the settled principle and the facts of each case.

Applications under Section 29A can be filed after expiry of the tribunal's tenure; in multiple appeals time for making/publishing the Award was extended in accordance with that principle.

Remand for appointment of a new arbitrator - Whether the matter should be remitted to the High Court for appointment of a new arbitrator where extension of time is not justified - HELD THAT: - In cases where the Court found insufficient or no good justification for extending time (notably where the Award had been reserved for pronouncement long before expiry and no sufficient cause was shown for delay), the Court set aside the impugned judgments only insofar as they required reconsideration and remitted those matters to the High Court for appointment of a new Arbitrator. The Court ordered that court notice be issued to respondents before appointment and directed parties to appear on a specified date to fix the hearing, thereby directing a fresh process rather than granting further extension.

Matters where no sufficient cause for extension was shown were remitted to the High Court for appointment of a new arbitrator; directions given for hearing and notice to respondents.

Exclusion of period of stay from computation under Section 29A - Vacating of interim orders - Treatment of periods during which stays or interim orders operated for computation of time under Section 29A - HELD THAT: - The Court held that the period during which a stay granted by this Court (or interim orders) was in operation shall be excluded from the period computed for making and pronouncing/publishing the Award under Section 29A. In several appeals the interim orders were vacated and the excluded period was explicitly directed to be disregarded in computing time, thereby affecting entitlement to extension or remand in the particular matters.

Periods of stay/interim orders are to be excluded from the computation of time under Section 29A; where applicable interim orders were vacated.

Revival and remittance of related proceedings to High Court - Revival of a previously stayed High Court proceeding and its further adjudication in accordance with law - HELD THAT: - The Court set aside an impugned judgment which had held that extension under Section 29A cannot be granted if the petition was not filed before expiry of the tribunal's term, and directed that a revived petition (A.P. No. 448/2023, Vrindavan Advisory Services LLP vs. Deep Shambhulal Bhanushali) shall stand revived and be decided by the High Court at Calcutta in accordance with law. The Court also observed that where interim reliefs had been granted under Section 9 and disposed of, appellants remained free to seek extension of interim relief before the High Court.

The specified High Court petition is revived and remitted to the High Court to be decided in accordance with law; appellants may seek extension of interim relief before the High Court.

Final Conclusion: The Court applied the principle (as stated in its 12.09.2024 judgment) that Section 29A applications may be filed after expiry of the Arbitral Tribunal's tenure, granting extensions of time for making/publishing awards in several appeals, remitting certain matters to High Courts for appointment of new arbitrators where extension was not justified, directing exclusion of periods of stay from computation under Section 29A, vacating interim orders where indicated, and reviving/remitting specified High Court proceedings for fresh adjudication.