TaxTMI Updates e-Newsletter
Nov 30,2021

Application of GST on contracts estimated under VAT - restitution of GST benefit - challenge to Office Memorandum dated 10.12.2018 - consistency between State and Central GST notifications - treatment of embedded taxes in taxable value - precedential effect of earlier High Court judgment

Application of GST on contracts estimated under VAT - restitution of GST benefit - challenge to Office Memorandum dated 10.12.2018 - consistency between State and Central GST notifications - treatment of embedded taxes in taxable value - precedential effect of earlier High Court judgment - Whether the petitioner was entitled to declaration/relief challenging the impugned Office Memorandum and seeking restitution or reassessment of GST in respect of works for which estimates were prepared under the VAT regime, including contention as to inconsistency with Central notification and exclusion of embedded taxes from taxable value. - HELD THAT: - The Court observed that the contentions raised in the petition substantially mirror grounds already considered and decided against the petitioner in this Court's judgment in W.P.(C) No.14924 of 2020 (Harish Chandra Majhi and State of Orissa and others). The petitioner sought to distinguish that precedent by pointing to differences between the Central Government notification and the impugned State notification and by arguing that embedded taxes subsumed in value should be excluded when computing the taxable base for GST. The Court examined the earlier decision and was not persuaded that any new or distinct legal point was made out warranting reconsideration. Since the matters raised had been dealt with in the prior judgment, and no fresh legal principle or factual distinction was shown to justify departure from that precedent, the petition was dismissed for the reasons recorded in Harish Chandra Majhi (supra).

Petition dismissed insofar as it challenges the Office Memorandum and seeks restitution, reassessment or fresh schedule of rates; prior decision in Harish Chandra Majhi (supra) is followed.

Final Conclusion: The petition seeking declaration of illegality of the impugned administrative action, restitution of GST benefit, and related reliefs was dismissed for lack of any fresh ground distinguishable from the earlier decision of this Court; no costs were ordered.

Writ of mandamus - recognition as informant - illegal importation - leakage of revenue - jurisdiction of SGST authority - affidavits from respondents - restoration of writ petition

Writ of mandamus - restoration of writ petition - Whether the writ petition dismissed at the admission stage as frivolous should be restored for decision on merits. - HELD THAT: - The High Court held that the writ petition could not be treated as frivolous on the materials before the learned Single Bench. Given the allegations of large-scale movement of betel nuts susceptible to customs regulation and a prima facie case of possible revenue leakage, summary dismissal at admission was not justified. The court exercised its supervisory jurisdiction to set aside the dismissal order and restore the writ petition to be heard on merits by the Single Bench so that the factual and legal controversies may be examined after filings by the concerned authorities.

The order dismissing the writ petition as frivolous is set aside and the writ petition is restored for hearing and decision on merits.

Illegal importation - leakage of revenue - recognition as informant - Whether allegations of illegal importation and revenue leakage, and the question of recognition of the appellant as an informant under relevant circulars, require adjudication on merits. - HELD THAT: - The Court identified the core controversies-whether smuggled betel nuts were illegally imported; whether revenue loss occurred; and whether the appellant qualifies as an informant under applicable CBEC circulars. The High Court declined to probe the genuineness or motives of the appellant at this stage, but directed that these matters be considered on merits by the Single Bench with appropriate affidavits and evidence from the respondent authorities. The determination of these issues is remitted for substantive adjudication rather than summary rejection.

Allegations of illegal importation, possible revenue leakage and recognition of the appellant as informant are to be examined and decided on merits by the Single Bench.

Jurisdiction of SGST authority - affidavits from respondents - Whether the role and jurisdiction of the SGST authority and the State Government in dealing with the consignments require impleadment and affidavit evidence from respondents. - HELD THAT: - On a cursory review the Court observed communications indicating the SGST authority at Siliguri had dealt with the trucks and collected tax and penalty, raising a question whether SGST authorities could lawfully tax, penalise and release goods when the allegation is of illegal importation falling within customs domain. The High Court directed that the Customs Authorities file affidavits addressing their actions and that the appellant be permitted to implead the SGST authority and the State Government as respondents so that jurisdictional and domain issues can be properly examined.

Respondent Customs Authorities to file affidavits; appellant granted liberty to implead SGST authority and State Government so jurisdictional questions may be considered.

Final Conclusion: The appeal is allowed. The order dismissing the writ petition as frivolous is set aside and the writ petition is restored to the file of the Single Bench for hearing on merits; respondents are directed to file affidavits and the appellant is granted liberty to implead the SGST authority and the State Government and to place supplementary material before the Single Bench.

Right to reasonable notice and opportunity to be heard - requirement of passing a speaking order - judicial supervision of administrative summons for fair hearing

Right to reasonable notice and opportunity to be heard - requirement of passing a speaking order - Validity of summons challenged on ground of denial of adequate time to respond and entitlement to a hearing and reasoned decision. - HELD THAT: - The petition challenged successive summons issued despite the petitioner having requested two weeks' time to appear with material. The respondents-CBIC accepted notice and offered that if the petitioner appears before the concerned officer on 29.11.2021, the petitioner may file a reply and make submissions on law and merits. The Court directed that upon such appearance and submissions the officer shall consider the material and decide the matter by passing a speaking order in accordance with law. The order thereby ensures the petitioner is afforded a reasonable opportunity to be heard and that the administrative action is concluded by a reasoned determination.

Petition disposed with direction that if the petitioner appears before the officer on 29.11.2021, it may file reply and make submissions and the officer shall decide by passing a speaking order in accordance with law.

Final Conclusion: The writ petition is disposed of by directing that the petitioner, if appearing before the concerned officer on 29.11.2021, shall be permitted to file a reply and make submissions and the officer shall decide the matter by a speaking order; connected applications stand disposed.

Impleading complainant as party - anticipatory bail - cooperation with investigation - release of deposited amount to revenue authorities - payment to authorities without prejudice - quashing of FIR on basis of compromise

Impleading complainant as party - Application under Section 482 Cr.P.C. for impleading the applicant/complainant as respondent No.2 in the petition. - HELD THAT: - The Court considered the application seeking impleadment of the complainant as a party. For the reasons stated in the application, the Court allowed the prayer and ordered that the applicant/complainant be impleaded as respondent No.2. The amended memo of parties was taken on record.

Application allowed and the complainant is impleaded as respondent No.2; amended memo of parties taken on record.

Anticipatory bail - cooperation with investigation - release of deposited amount to revenue authorities - payment to authorities without prejudice - quashing of FIR on basis of compromise - Petition for grant of anticipatory bail filed by the petitioner in respect of FIR No.21 dated 04.02.2021. - HELD THAT: - Having noted the factual matrix recorded by a Co-ordinate Bench and that primary allegations of fraud relate to the chartered accountant who handled GST returns, the Court examined the petitioner's role limited to receipt of certain transfers and her conduct in the investigation. The petitioner had joined the investigation on multiple occasions, deposited the sum ordered by the Court with the trial court and undertook cooperation with the investigating agency. The State relied on some pending recovery and alleged links to assets, while the complainant sought return of a portion of the amount. Balancing these factors, and in view of the petitioner's cooperation and payment, the Court concluded that the interim anticipatory bail earlier granted should be made absolute. The Court expressly permitted the already deposited amount to be handed over to the GST authorities, subject to there being no objection, and clarified that such payment is without prejudice to the rights of either party. It further recorded that the payment does not amount to an admission of guilt by the petitioner nor a final settlement enabling quashing of the FIR on the basis of compromise, and that the trial will proceed independently of observations made in the bail proceedings.

Interim anticipatory bail made absolute; petitioner to cooperate with investigation; deposit permitted to be released to GST authorities; payment to be without prejudice and not to be treated as admission or final compromise; trial to proceed independently.

Final Conclusion: The application for impleadment of the complainant as respondent No.2 is allowed and the petition for anticipatory bail is allowed by making the interim order absolute, subject to cooperation with investigation and the Court's clarifications that the deposit is without prejudice and does not constitute an admission or bar prosecution.

Enhancement of penalty in final order beyond penalty proposed in show-cause notice - opportunity of personal hearing before an adverse assessment decision - power of Appellate Authority under Section 107(11) to confirm, modify or annul the order appealed against - liberty to prefer statutory appeal and extension of time for filing appeal - stay of deposit of disputed tax pending filing of appeal

Enhancement of penalty in final order beyond penalty proposed in show-cause notice - opportunity of personal hearing before an adverse assessment decision - power of Appellate Authority under Section 107(11) to confirm, modify or annul the order appealed against - Whether the petitioner must seek remedy before the Appellate Authority and whether that Authority can rectify or annul the assessment insofar as the penalty imposed deviates from the penalty indicated in the notice and adjudicate after providing opportunity of hearing. - HELD THAT: - The Court noted that the petitioner objected to enhancement in the final order of penalty from 25% (as shown in the notice) to 100% and contended that an opportunity of personal hearing under the Act ought to have been provided after the petitioner filed documents. The Court observed that the Appellate Authority is empowered under Section 107(11) of the Act to pass such orders as it deems just, including confirming, modifying or annulling the order appealed against. If discrepancies exist between the show-cause notice and the final order, or if documents submitted to the assessing authority merit a different conclusion, the Appellate Authority can deal with those matters on appeal and, where appropriate, annul or modify the assessing authority's decision after affording hearing. Accordingly, the Court relegated the petitioner to the statutory appellate forum rather than adjudicating the merits itself. [Paras 7, 9]

The petitioner's grievance regarding enhancement of penalty and alleged lack of adequate hearing is to be addressed by the Appellate Authority under Section 107(11); the petitioner is granted liberty to prefer an appeal which the Appellate Authority shall decide on merits after giving opportunity of hearing.

Liberty to prefer statutory appeal and extension of time for filing appeal - stay of deposit of disputed tax pending filing of appeal - Whether the petitioner should be permitted additional time to file the statutory appeal and whether deposit of the disputed tax should be stayed until the appeal is filed. - HELD THAT: - In view of the petitioner's bona fide recourse to the Court and the imminent expiry of the statutory period for filing the appeal, the Court exercised its supervisory jurisdiction to grant limited relief. The petitioner was permitted to file the appeal under Section 107 within the extended period stipulated by the Court, and the Appellate Authority was directed to consider the matter on merits after giving hearing. Concurrently, the Court directed that the petitioner shall not be compelled to deposit the disputed tax until the appeal is filed in accordance with the Court's liberty. [Paras 9, 10]

Liberty granted to file the appeal by 10.12.2021; petitioner shall not be required to deposit the disputed tax pending filing of the appeal.

Final Conclusion: Writ petition disposed of by granting the petitioner liberty to prefer an appeal under Section 107 within the extended time; the Appellate Authority to consider the appeal on merits after affording hearing and to exercise its power to confirm, modify or annul the assessing authority's order; petitioner not required to deposit the disputed tax until the appeal is filed.

Mandatory requirement of furnishing GST registration - exemption from GST registration - separate registration for multiple places of business under CGST Rules - binding effect of letter of undertaking to tender terms - acceptance of tenderer for technical compliance - non-mandatory nature of experience requirement in tender - preference versus mandatory qualification in tender conditions

Mandatory requirement of furnishing GST registration - exemption from GST registration - binding effect of letter of undertaking to tender terms - Whether the petitioner's technical bid was rightly rejected for failure to furnish the GST number - HELD THAT: - The tender document required uploading scanned copies of PAN and GST number duly signed and stamped. The petitioner did not furnish the GST number in her technical bid and had executed a letter of undertaking accepting all terms and conditions of the tender. The petitioner's contention that she was exempt from obtaining a GST number was examined and rejected on the materials: the exemption relied upon did not apply to her business of supply of ice-cream as indicated in the notification relied upon by the Court, and the petitioner had herself stated her supply of ice-cream in the tender form. The argument based on separate registration under the CGST Rules was considered but not entertained because the petitioner had not challenged the tender condition requiring GST registration and had accepted that condition in her undertaking. In these circumstances the authorities were justified in rejecting the technical bid for non-compliance with the mandatory requirement.

Petitioner's technical bid was rightly rejected for non-furnishing of GST number and the plea of exemption was not sustainable.

Acceptance of tenderer for technical compliance - non-mandatory nature of experience requirement in tender - preference versus mandatory qualification in tender conditions - Whether respondent No.2's bid could be validly accepted despite the petitioner's allegations regarding his GST, projected accounts and non-submission of experience certificate - HELD THAT: - Record shows respondent No.2 furnished a GST number and other necessary documents. The tender conditions indicate that possession of experience was a criterion for preference and not a mandatory qualification. Therefore non-submission of an experience certificate did not disentitle respondent No.2 where he met the mandatory requirements. Allegations that respondent No.2's profit and loss statement was projected and that experience was not furnished did not vitiate his technical compliance under the tender. The Court also noted that certain alleged inconsistencies in treating other bids would be revisited by the authorities where applicable, but such instances related to different categories of shops and did not affect the validity of respondent No.2's acceptance for the grocery shop allotment.

Respondent No.2 was rightly declared technically compliant as he fulfilled mandatory tender requirements; experience was not a mandatory disqualification.

Acceptance of tenderer for technical compliance - Whether the petitioner's offer of a higher rent could override her technical non-compliance - HELD THAT: - The tender framework permits consideration of comparative financial offers only from those tenderers who are eligible and declared technically compliant. Since the petitioner was found technically non-compliant for not furnishing the GST number, her higher offered rent could not be considered and did not affect the allotment decision.

Petitioner's higher rent offer was immaterial because she was technically non-compliant.

Final Conclusion: The writ petition is dismissed: the petitioner's technical bid was validly rejected for non-furnishing of GST registration, respondent No.2 was properly declared technically compliant having met mandatory tender requirements, and the petitioner's higher rent offer was irrelevant in view of her disqualification.

Revision filing of TRAN-1 under Section 140 read with Rule 117 - transitional provisions and beneficial construction - right to carry forward input tax credit - power under Section 172 for removal of difficulty - reopening of grievance ticket and portal to enable filing - verification of uploaded TRAN-1 and disciplinary consequences for false information

Revision filing of TRAN-1 under Section 140 read with Rule 117 - transitional provisions and beneficial construction - right to carry forward input tax credit - Closure of the petitioner's grievance ticket and refusal to permit filing/revision of TRAN-1 for transactions prior to 27.12.2017 was illegal and required remedial relief. - HELD THAT: - Relying on the Court's earlier decisions in Asiad Paints Limited (and its appellate confirmation), the Court held that transitional provisions must be given a beneficial construction so that legitimate rights to carry forward unutilised input tax credit are not defeated on technical grounds. In light of Section 140 read with Section 142 and 172 and Rule 117(1A), the absence of an explicit statutory bar to revision filing and the remedial power under Section 172 justify permitting the petitioner an opportunity to file or revise TRAN-1 despite the temporal cutoff. The Court declined to engage with contested factual allegations about technical difficulties in uploading, observing that the subject matter of TRAN-1 concerns transactions occurring before 27.12.2017 and that procedural formalities should not operate to deprive an assessee of transitional credit to which it may be entitled. The Court also noted that allowing filing is without prejudice to the respondents' statutory power to verify the details and to act if false information is furnished. [Paras 12, 13, 14]

Certiorari allowed to quash the closure of the grievance ticket; mandamus issued directing authorities to open the portal to enable upload of TRAN-1 or, if not feasible, to permit filing of hard copies and to act on the same while retaining powers to verify and deal with incorrect information.

Final Conclusion: Writ petition partially allowed: the closure of the grievance ticket is quashed and respondents are directed to permit the petitioner to file/revise TRAN-1 for transactions prior to 27.12.2017 by reopening the portal or accepting hard copies, subject to verification and action by the authorities.

Withdrawal of writ petition - dismissal as withdrawn - binding statement by counsel - investigation and liberty to take action - no liberty to reopen

Withdrawal of writ petition - dismissal as withdrawn - binding statement by counsel - no liberty to reopen - Petition withdrawn unconditionally and dismissed as withdrawn; petitioner held bound by counsel's statement and no liberty granted. - HELD THAT: - Learned counsel for the petitioner stated on instructions that the writ petition is withdrawn unconditionally and that the petitioner will not press for refund or reversal of input tax credit until completion of the investigation. The Court accepted this statement, held the petitioner bound by it and dismissed the petition as withdrawn. The Court expressly clarified that no liberty was granted to the petitioner to revive the matter. The acceptance of counsel's statement operated as the basis for dismissal and the petitioner is estopped from seeking the reliefs foregone in this proceeding.

Petition dismissed as withdrawn on the basis of an unconditional withdrawal and binding statement by counsel; no liberty granted.

Investigation and liberty to take action - Respondents entitled to proceed if the petitioner's director has not joined the investigation as earlier directed. - HELD THAT: - The Court noted that directions had been issued on 24th September, 2021 for the petitioner's director to join the investigation and that the petitioner had not complied with those directions. The Court held that, in the event the director has not joined the investigation, the respondents remain at liberty to take action in accordance with law. This observation leaves operational authority with the respondents to proceed under the applicable investigatory provisions.

Respondents are at liberty to take action in accordance with law if the director has not joined the investigation as directed.

Final Conclusion: The writ petition was unconditionally withdrawn and dismissed as withdrawn on acceptance of counsel's binding statement; the petitioner waived pursuit of refund claims pending investigation and no liberty to revive the petition was granted, while respondents remain free to act if investigatory directions are not complied with.

Refund under Section 54 of the Central Goods and Services Tax Act - requirement to record reasons in writing under Rule 92(3) of the Central Goods and Services Tax Rules - extension of limitation by suo motu order of the Supreme Court in view of COVID-19 - exclusion/computation of limitation period on account of COVID 19 orders - quasi judicial powers of tax authorities to hear and dispose proceedings - de novo consideration on remand

Extension of limitation by suo motu order of the Supreme Court in view of COVID-19 - exclusion/computation of limitation period on account of COVID 19 orders - quasi judicial powers of tax authorities to hear and dispose proceedings - Application of the Supreme Court's suo motu extension of limitation to the refund applications under the CGST Act - HELD THAT: - The Court held that the Supreme Court's suo motu orders extending and excluding limitation periods on account of COVID 19 apply to the refund applications in the present proceedings. The Central Board of Indirect Taxes' Circular No.157/13/2021-GST (paragraph 4(b)) confirms that quasi judicial proceedings by tax authorities, including disposal of refund applications, may continue and will be governed by the extensions. Consequently, the observations in the impugned orders that the refund applications were time barred under the two year limitation are set aside to the extent they proceeded without applying the benefit of the COVID 19 limitation orders. [Paras 9, 10]

Benefit of the Supreme Court's extension/exclusion of limitation on account of COVID 19 applies to the refund applications; the impugned orders' conclusion of time bar is set aside insofar as it failed to apply that extension.

Requirement to record reasons in writing under Rule 92(3) of the Central Goods and Services Tax Rules - refund under Section 54 of the Central Goods and Services Tax Act - Whether the impugned orders complied with Rule 92(3) by recording reasons in writing when rejecting the refund claims - HELD THAT: - The Court found that the impugned orders stated that the refund applications were 'examined' and concluded they were beyond two years, but did not record reasons in writing as mandated by Rule 92(3). Because the statutory requirement to record reasons is integral to the validity of an order rejecting refund, the Court refrained from expressing any view on entitlement under Section 54(8)(b) and held that absence of written reasons rendered the impugned orders unsustainable. [Paras 7, 11, 13]

Impugned orders are set aside solely because they do not contain reasons in writing as required by Rule 92(3).

De novo consideration on remand - refund under Section 54 of the Central Goods and Services Tax Act - requirement to record reasons in writing under Rule 92(3) of the Central Goods and Services Tax Rules - Remedy and directions to the tax authority following the defects in the impugned orders - HELD THAT: - In view of the application of the Supreme Court's limitation orders and the failure to record reasons, the Court directed that the impugned orders be set aside and the respondent shall examine the refund applications afresh. The fresh exercise must be undertaken in accordance with Section 54 of the CGST Act and Rule 92 of the Rules, with reasons recorded in writing where a refund (in whole or in part) is found inadmissible. The respondent was directed to complete the de novo consideration expeditiously, within a specified period. [Paras 15]

Matter remitted for de novo consideration under Section 54 and Rule 92; respondent to decide afresh and record reasons in writing, within six weeks.

Final Conclusion: The impugned refund orders are set aside: the Court applied the Supreme Court's COVID 19 limitation extension to these refund claims and found the impugned orders deficient for want of reasons under Rule 92(3); the matters are remitted for fresh adjudication in accordance with Section 54 of the CGST Act and Rule 92 of the Rules, to be completed within six weeks, and the writ petitions are disposed of with no order as to costs.

Appeal under Section 107 of the Central Goods and Services Tax Act, 2017 - Condonation of delay - limited to one month beyond prescribed period - Computation of limitation in light of Supreme Court orders in Suo Motu Writ Petition (Civil) No.3 of 2020 - Exclusion of extended period of limitation (15.03.2020 to 02.10.2021) - effect on filing timelines - No power to condone delay beyond statutory one-month extension

Appeal under Section 107 of the Central Goods and Services Tax Act, 2017 - Condonation of delay - limited to one month beyond prescribed period - Computation of limitation in light of Supreme Court orders in Suo Motu Writ Petition (Civil) No.3 of 2020 - Whether the appeal was filed within the prescribed period or the delay was condonable - HELD THAT: - The appellate authority examined the filing date of the appeal vis-a -vis the three months limitation prescribed by Section 107(1) and the further one-month condonable period under Section 107(4). The authority considered the Supreme Court's orders excluding the period from 15.03.2020 to 02.10.2021 from computation of limitation and the CBIC clarification applying those orders to appeals under GST. Noting that the appeal was filed on 28.09.2021 against an order dated 14.11.2019, the authority found the appeal to be beyond the prescribed three-month period and also beyond the additional one-month condonable period. Reliance was placed on precedent holding that the appellate authority has no power to condone delay beyond the statutory one-month extension. As no sufficient cause was shown to justify condonation beyond that period, the delay was held not condonable. [Paras 7, 10, 11]

Delay in filing the appeal is not condonable and the appeal is barred by limitation.

Rejection of appeal on grounds of limitation without adjudication on merits - No power to condone delay beyond statutory period - Whether the appeal should be decided on merits despite the delay - HELD THAT: - Having concluded that the appeal was barred by limitation and that the appellate authority lacked power to condone the excess delay, the authority declined to examine the substantive merits of the challenge to the cancellation order. The authority applied the principle that where limitation bars the appeal and condonation beyond the permitted period is unavailable, the appeal must be rejected without going into merits. [Paras 12]

The appeal is rejected on the ground of limitation without adjudication on the merits.

Final Conclusion: The appeal against cancellation of GST registration is rejected as time-barred; the delay beyond the statutory three months and the one-month condonable period was not condoned and the appeal was not adjudicated on merits.

Scope of jurisdiction under Section 263 of the Income Tax Act - allowability of deduction for provision for arrears of wages consequent to wage revision - assessment completed after due enquiries - appellate interference with concurrent findings of fact

Scope of jurisdiction under Section 263 of the Income Tax Act - allowability of deduction for provision for arrears of wages consequent to wage revision - assessment completed after due enquiries - Validity of the Commissioner's exercise of revisionary jurisdiction under Section 263 in setting aside the assessment which allowed deduction for a provision for arrears of wages. - HELD THAT: - The Tribunal examined the record and found that the Assessing Officer had made due enquiries before allowing the assessee's claim for deduction by way of provision for arrears of wages arising from wage revision. The Tribunal took into account relevant judicial precedents relied upon by the parties and recorded a factual finding that the assessment was completed after making necessary enquiries. In those circumstances the exercise of power under Section 263 by the Commissioner, which was premised on the view that the assessment was erroneous and prejudicial to the revenue, was held to be unjustified. The court applied the principle that mere disagreement by the Commissioner with a possible view taken by the Assessing Officer does not warrant exercise of revisionary jurisdiction, and that where the Tribunal records that no defect in the enquiry or assessment procedure was established, the revision cannot be sustained. The decision in Padmavathi, relied on by the respondent, was held applicable in that the Commissioner had not established any specific inadequacy in the enquiries conducted by the Assessing Officer.

The Tribunal's conclusion that the Commissioner's exercise of jurisdiction under Section 263 was not justified is upheld; the revisional action is set aside.

Final Conclusion: The appeal is dismissed; the substantial question of law is answered against the Revenue and the Tribunal's order sustaining the assessment (allowing the deduction for wage-arrears provision) is maintained.

Deduction under Section 43B - Agricultural income exempt under Section 10(1) - Apportionment of agricultural and business income - Non-allowability of tax paid on exempt income as deduction - Preclusion by prior departmental acceptance

Deduction under Section 43B - Agricultural income exempt under Section 10(1) - Non-allowability of tax paid on exempt income as deduction - Whether agricultural income tax paid under the Kerala Agricultural Income Tax Act, 1991 is allowable as a deduction under Section 43B of the Income Tax Act in computing business income. - HELD THAT: - The Court held that agricultural income is exempt from Central income-tax by operation of Section 10(1) and therefore does not form part of the income computed under the Central Act. Section 43B permits deduction only of amounts which are "otherwise allowable under this Act". Tax paid under the State Agricultural Income Tax Act relates to income that is excluded from computation under the Central Act and cannot be treated as a tax "payable by the assessee for earning" the business income subject to the Central Act. Allowing the agricultural income tax paid to be deducted while the underlying agricultural income remains outside the Central Act would be inconsistent with the scheme of Sections 10, 14 and 43B. The Court found no authority to treat the State agricultural tax as a deductible tax under Section 43B and rejected the assessee's contention accordingly. [Paras 11]

Deduction under Section 43B of tax paid under the Kerala Agricultural Income Tax Act, 1991 is not allowable for computation of business income under the Central Act.

Apportionment of agricultural and business income - Agricultural income exempt under Section 10(1) - Whether the assessee is under an obligation to file separate returns and apportion income between agriculture and business activities. - HELD THAT: - The Court applied its earlier decision in ITA No.382/2010 and Writ Petition (c) No.36862 of 2004 to hold that where activities are composite, the apportionment principle applies and the assessee is obliged to file returns under both enactments. Agricultural income being excluded from the Central Act must be apportioned and reflected accordingly; this separation reinforces that tax on agricultural income cannot be shifted into computation of business income under the Central Act. [Paras 11]

Assessee must apportion agricultural and business income and file separate returns; agricultural income is excluded from computation under the Central Act.

Preclusion by prior departmental acceptance - Whether prior departmental acceptance of the assessee's returns and past non-prosecution or non-appeal by the revenue precludes the department from taking a different view in the subject assessment years. - HELD THAT: - Relying on the principle in C.K. Gangadharan (as cited in the judgment), the Court observed that mere past acceptance or non-preference of appeal by the revenue in earlier years does not operate as a bar on the department enforcing the law in subsequent years. Policy considerations (such as thresholds for appeals or revenue-neutral effects) may explain departures; absent established mala fides, prior departmental conduct does not estop the revenue from taking a contrary position where there is just cause. [Paras 9, 12]

Prior acceptance of returns or past non-preference of appeal does not preclude the revenue from taking a different lawful view in subsequent assessment years.

Final Conclusion: The appeals are dismissed. The Court affirmed that tax paid under the Kerala Agricultural Income Tax Act, 1991 is not deductible under Section 43B of the Central Income-tax Act for the computation of business income; the assessee must apportion agricultural and business income and prior departmental acceptance does not estop the revenue from enforcing the correct legal position.

Initiation of assessment under Section 153A in absence of incriminating material - Validity of additions based on extrapolation from sectoral power consumption norms - Admissibility and evidentiary value of search statements and confessional admissions - Disallowance under Section 40A(3) not sustainable on search statement alone - Treatment of commission receipts as unexplained cash credits under Section 68 despite banking channels, TDS and payer's confirmation

Initiation of assessment under Section 153A in absence of incriminating material - Framing of assessments under Section 153A where no incriminating material was found or seized during search. - HELD THAT: - The Tribunal held that framing of Section 153A assessments is not sustainable in the absence of any incriminating material recovered during the search. Reliance was placed on binding and persuasive precedents holding that where search yields no incriminating material the special assessment cannot be sustained. The departmental reliance on authorities permitting broader inquiry where incriminating material exists was distinguished on the ground that those decisions do not validate initiation of 153A assessments in cases with no seized incriminating material. The power bill recovered was held not to constitute incriminating material and the lower authorities erred in treating it as such. [Paras 3, 4]

Assessments framed under Section 153A were set aside for being initiated in absence of incriminating material; impugned assessments deleted on this ground.

Validity of additions based on extrapolation from sectoral power consumption norms - Sustainability of addition for alleged suppressed turnover made by extrapolating turnover from power consumption sectoral norms. - HELD THAT: - The Tribunal found no material linking power consumption data to actual concealment of turnover. It held that additions based merely on extrapolation using sectoral power-consumption trends without specific adverse findings as to raw-material consumption, fixed assets, abnormal repairs or other corroborative evidence are unsustainable. Reliance was placed on precedents rejecting additions founded solely on sectoral power-consumption norms and on the absence of any contemporaneous corroborative material discovered in search. [Paras 5, 6]

Addition by extrapolation from power-consumption norms was deleted.

Admissibility and evidentiary value of search statements and confessional admissions - Disallowance under Section 40A(3) not sustainable on search statement alone - Sustainability of Section 40A(3) disallowance and reliance on statements made during search without contemporaneous supporting evidence. - HELD THAT: - The Tribunal observed that admissions or statements recorded during search/survey have no independent evidentiary value unless supported by contemporaneous material. The 40A(3) disallowance was founded on the assessee's authorised person's search statement and on an inference of deliberate structuring of payments; however, the record did not show that payments exceeded the statutory limit nor was there corroboration. Consequently, the disallowance based on the search statement contrary to the record was held to be unsustainable. [Paras 7, 8]

Section 40A(3) disallowance deleted.

Treatment of commission receipts as unexplained cash credits under Section 68 despite banking channels, TDS and payer's confirmation - Whether commission receipts could be treated as unexplained cash credits under Section 68 when payments were routed through banking channels, subjected to TDS and the payer confirmed the commercial arrangement. - HELD THAT: - The Tribunal noted that the impugned commission receipts were received through banking channels and subjected to TDS by the payer. The payer, M/s. Benzo Chem Industries Pvt. Ltd., had confirmed the sales and marketing arrangement in writing to the Assessing Officer. The Assessing Officer did not undertake independent verification from the payer and treated the receipts as accommodation entries. In view of bank routing, TDS and payer's confirmation, the Tribunal held that the Section 68 addition was not sustainable. [Paras 9]

Section 68 addition treating commission receipts as unexplained cash credits deleted.

Final Conclusion: All appeals allowed; impugned assessments, the addition based on power-consumption extrapolation, the Section 40A(3) disallowance and the Section 68 unexplained cash credits addition were deleted for the reasons stated.

Holding period for capital asset - date of allotment versus date of registration - long term capital asset and entitlement to indexation benefit - application of cost inflation index to instalment payments - repairs and renovation expenditure - revenue expenditure versus capital expenditure - allowability of foreign travel expenses of managing director as business expenditure

Holding period for capital asset - date of allotment versus date of registration - long term capital asset and entitlement to indexation benefit - Whether the flat sold by the assessee is a long term capital asset and whether indexation benefit is allowable. - HELD THAT: - The Tribunal found that the allotment letter dated 14/06/2005 and subsequent payments pursuant to the booking established the assessee's acquisition for holding-period purposes, notwithstanding registration occurring on 30/05/2012. Following the decision of the Hon'ble Jurisdictional High Court in PCIT vs. Vembu Vaidyanathan , the date of allotment was held to be the relevant date of acquisition for computing holding period and capital-gains treatment. Applying that principle, the Tribunal held the asset was held for more than three years and therefore the transfer gave rise to long term capital gains. The Tribunal also accepted the assessee's method of claiming indexation by applying the cost inflation index in the years of payment of instalments, and directed the assessing officer to accept the long term capital gains returned and delete the addition made by the AO. [Paras 3]

Asset is a long term capital asset from date of allotment; indexation benefit allowed and addition deleted.

Repairs and renovation expenditure - revenue expenditure versus capital expenditure - Whether renovation and civil/carpentry expenditure of Rs. 26,50,292 paid to Ahmed Interiors is capital or revenue in nature. - HELD THAT: - The Tribunal examined the detailed bills and the assessee's classification in books, noting items providing enduring benefit were capitalised and others charged off as revenue. The CIT(A) had found no structural change, extension or improvement to the building, a finding not controverted by the Departmental Representative. Applying the principle that cost of repairs/reconstruction of tenanted premises is revenue in nature as held in CIT vs. Talathi and Panthaky Associated (P) Ltd. , the Tribunal concluded there was no infirmity in the assessee treating the expenditure as revenue. Accordingly the amount treated as capital by the AO was held to be allowable as revenue expenditure. [Paras 4]

Expenditure of Rs. 26,50,292 is revenue in nature and allowable as deduction.

Allowability of foreign travel expenses of managing director as business expenditure - Whether the adhoc disallowance of 20% of foreign travel expenses claimed in respect of the Managing Director is sustainable. - HELD THAT: - The Tribunal noted that the AO disallowed 20% on an adhoc basis because requisite details were not produced earlier. On appeal, the assessee furnished detailed travel particulars and supporting bills showing business purpose and reimbursements, and the AO had allowed foreign travel expenses of other employees in full. The Tribunal held that the Managing Director, being an employee, could not be treated differently and that the detailed evidence warranted full allowance. The AO was directed to delete the adhoc disallowance. [Paras 5]

Adhoc disallowance of foreign travel expenditure deleted; entire foreign travel expenses to be allowed.

Final Conclusion: The appeal is allowed: the sale of the flat is held to attract long term capital gains with indexation, the contested renovation expenditure is allowable as revenue expenditure, and the adhoc disallowance of foreign travel expenses is deleted; accordingly the additions and disallowances challenged are set aside.

Transfer pricing - markup on intra group services - arm's length pricing and benchmarking - provision for warranty - deductibility on commercial substance and past practice - provision for liquidated damages - contractual obligation and matching principle - provision for anticipated losses - distinction between accounting provision and tax deduction - interest chargeability - verification of date of filing of return

Transfer pricing - markup on intra group services - arm's length pricing and benchmarking - Disallowance of mark up charged by associated enterprise on supervision and central services - HELD THAT: - The Tribunal examined the TPO/DRP adjustment which disallowed the mark ups of 4% and 5% charged by the AE and treated intra group services as not attracting any markup on the ground of incidental group benefit. The Tribunal noted that the assessee both avails and provides similar supervision services, applied a consistent pricing basis accepted by the TPO for services rendered by the assessee, and that no comparable disallowance had been made in several other assessment years. On that basis and on the facts and circumstances recorded, the contention that any incidental group benefit precludes charging a mark up was rejected and the disallowance of the mark up sustained by the Revenue was not accepted. [Paras 6, 7, 8]

The disallowance of the mark up on intra group supervision and central services is not sustained; the assessee's mark up is accepted.

Provision for warranty - deductibility on commercial substance and past practice - matching principle in revenue accounting - Deductibility of provision for warranty created on a recurring, estimate based basis - HELD THAT: - The Tribunal examined the contractual warranty obligations, the method of provisioning (3% of contract value based on historical trend), the reconciliation of opening balances, additions, reversals and utilizations, and consistent prior appellate decisions in the assessee's earlier assessment years. Reliance was placed on those coordinate bench decisions which had allowed similar provisions where the estimate was based on past experience and actual utilization and where unutilized provisions had been written back and offered to tax. In the absence of any distinguishing factual change or defect in the basis of estimation, the Tribunal held that the provision for warranty was made on a reasonable and scientific basis and was allowable. [Paras 13, 15, 16, 17, 18]

The provision for warranty is allowed (as made during the relevant assessment year on the same basis as in earlier years).

Provision for liquidated damages - contractual obligation and matching principle - Deductibility of provision for liquidated damages created and reversed in the normal course - HELD THAT: - The Tribunal reviewed the contractual basis for the provision, the assessee's method of estimation based on period of delay and percentage of contract value, the practice of reversing provisions when waived and offering the write back to tax, and prior appellate rulings of the ITAT upholding similar provisions for earlier assessment years. In light of the consistent historical practice, contractual obligation and matching of actual utilization and write backs, the Tribunal found no reason to sustain the AO's addition. [Paras 20, 23, 24]

The provision for liquidated damages is allowed.

Provision for anticipated losses - distinction between accounting provision and tax deduction - Allowance of provision for anticipated losses claimed by the assessee (Shri Cements Ltd.) - HELD THAT: - The Tribunal observed that determination of trading profit or loss is a question of fact to be decided on relevant evidence and noted the conceptual distinction between commercial accounting provisions and tax treatment. The Tribunal emphasised that accounting standards and commercial estimates do not automatically translate into tax deductions and that the assessee had not furnished cogent evidence to demonstrate that the liability had crystallised or that the estimate was appropriate for taxation purposes. Applying these principles, the Tribunal declined to interfere with the DRP/AO conclusion. [Paras 19, 26, 32, 33]

The claim for provision for anticipated losses is disallowed.

Interest chargeability - verification of date of filing of return - Computation/charging of interest under section 234A - HELD THAT: - The Tribunal did not determine the quantum of interest but directed the Assessing Officer to verify the date of filing of the return in light of any timeline extensions for the year and to charge interest accordingly, thereby leaving the factual verification and calculation to the AO. [Paras 34]

Matter remitted to the AO to verify filing date and compute/charge interest under section 234A accordingly.

Final Conclusion: The assessee's appeal is allowed in part: the transfer pricing disallowance of mark up on intra group services is rejected and the provisions for warranty and for liquidated damages for the relevant year(s) are allowed; the claim for anticipated losses is disallowed; and the question of interest under section 234A is remitted to the Assessing Officer for verification of the filing date and computation.

Deduction under Section 80-IA(4)(iii) of the Income-tax Act - CBDT notification requirement under the Industrial Parks scheme - nexus between income and operation and maintenance of industrial parks - treatment of lease rent/kiosk income as business income for industrial parks - reconciliation of Form 26AS data and inadmissibility of addition based solely on 26AS - write-off of sundry balances and distinction between bad debts and loans/advances - Rule of consistency in assessment practice

Deduction under Section 80-IA(4)(iii) of the Income-tax Act - CBDT notification requirement under the Industrial Parks scheme - Rule of consistency in assessment practice - Allowance of deduction under Section 80-IA(4)(iii) in respect of the Salarpuria Softzone project where CBDT notification was issued belatedly. - HELD THAT: - The Tribunal noted that the industrial park had been approved by the Ministry of Commerce & Industry and that the CBDT subsequently issued the requisite notification in favour of the project. Following earlier Tribunal and High Court reasoning that a delay by the CBDT in issuing notification does not defeat an assessee's entitlement where the qualifying approvals are in place, the CIT(A)'s grant of deduction for the Salarpuria Softzone project was held to be correct. The Tribunal observed that the CIT(A) relied on precedents and the subsequent issuance of the CBDT notification and found no infirmity in allowing the claim under Section 80-IA(4)(iii). [Paras 2]

Relief granted by CIT(A) in respect of Salarpuria Softzone confirmed; revenue's ground dismissed.

Nexus between income and operation and maintenance of industrial parks - Rule of consistency in assessment practice - Whether miscellaneous receipts (sale of waste/scrap and interest on deposits) form part of profit from operation and maintenance of eligible industrial parks for deduction under Section 80-IA(4)(iii). - HELD THAT: - The AO disallowed the miscellaneous receipts for lack of nexus with the operation and maintenance activity. The CIT(A) found as a factual matter that the receipts arose from disposal of waste left by occupants (necessary to maintain park cleanliness) and interest relating to deposits required for uninterrupted electricity supply - activities integral to operation and maintenance. The Tribunal upheld the factual finding of nexus, noting consistency in treatment in earlier and later years and observing that the receipts are business income connected to the maintenance activity; therefore no interference was warranted. [Paras 3]

CIT(A)'s deletion of the AO's addition relating to miscellaneous receipts upheld; revenue's ground dismissed.

Treatment of lease rent/kiosk income as business income for industrial parks - nexus between income and operation and maintenance of industrial parks - Rule of consistency in assessment practice - Whether lease/rental receipts from kiosks/stalls within industrial parks qualify as business income eligible for deduction under Section 80-IA(4)(iii). - HELD THAT: - The AO treated lease/rental receipts from kiosks as not part of operating and maintenance activity. The CIT(A) examined the factual nature of the kiosks/stalls and concluded that letting them was an extended service for occupants (provision of refreshments/amenities) and thus integrally connected to the operation and maintenance business. The CIT(A) also relied on administrative clarification treating lease rent from developed space with amenities as business income and on consistent treatment in other years. The Tribunal found this to be a plausible factual and legal view and declined to interfere. [Paras 4]

CIT(A)'s allowance of deduction in respect of rental income from kiosks/stalls confirmed; revenue's ground dismissed.

Reconciliation of Form 26AS data and inadmissibility of addition based solely on 26AS - Rule of consistency in assessment practice - Validity of addition made on account of alleged undisclosed receipts based on mismatch between Form 26AS and accounts. - HELD THAT: - The AO added amounts alleged to be undisclosed because 26AS showed higher receipts than the assessee's accounts. The assessee produced a detailed reconciliation before the CIT(A), showing that the difference arose from TDS deducted by customers on reimbursements, service tax/TDS items and rental receipts reflected in accounts, and that net receipts (after matching reimbursements and expenses) were offered to tax. The CIT(A) observed that an addition cannot be sustained merely on 26AS data where the assessee has satisfactorily explained and reconciled differences. The Tribunal concurred that the AO had not challenged the reconciliation and that deletion of the addition was justified. [Paras 5]

CIT(A)'s deletion of the addition based on 26AS mismatch upheld; revenue's ground dismissed.

Write-off of sundry balances and distinction between bad debts and loans/advances - write-off of sundry balances and requirement to examine loans/advances - Allowability of sum written off as sundry balances in profit and loss account where break-up between sundry debtors and loans/advances is not furnished. - HELD THAT: - The CIT(A) had deleted the AO's addition by applying principles governing write-off of bad debts and relevant precedent that writing off in books can substantiate a claim. The Tribunal noted, however, that the amount written off comprises both sundry debtors and loans/advances and that loans/advances may not be allowable under the specific statutory provision for bad debts. Because the assessment record lacked a clear break-up and the AO must examine whether amounts written off as advances/loans qualify as business loss or are governed by other provisions, the Tribunal remitted the matter to the AO for fresh consideration after affording the assessee an opportunity of hearing and applying law. [Paras 6]

CIT(A)'s deletion set aside in part; issue remitted to AO for examination of allowability of written-off loans/advances in accordance with law after affording hearing.

Final Conclusion: The Tribunal partly allowed the revenue's appeal insofar as the issue of sundry balances written off is remitted to the AO for fresh examination; on all other grounds (deduction for Salarpuria Softzone, miscellaneous receipts, rental/kiosk income, and deletion of the Form 26AS-based addition) the CIT(A)'s relief in favour of the assessee is confirmed and the revenue's grounds are dismissed.

Penalty under section 271(1)(c) of the Income tax Act - concealment of particulars or furnishing inaccurate particulars - statutory notice under section 274 read with section 271(1)(c) - requirement to specify and strike off the inapplicable limb - omnibus/printed show cause notice without striking off inapplicable portions vitiates penalty proceedings - strict construction of penal provisions and prejudice from non application of mind

Penalty under section 271(1)(c) of the Income tax Act - concealment of particulars or furnishing inaccurate particulars - statutory notice under section 274 read with section 271(1)(c) - requirement to specify and strike off the inapplicable limb - omnibus/printed show cause notice without striking off inapplicable portions vitiates penalty proceedings - strict construction of penal provisions and prejudice from non application of mind - Penalty order under section 271(1)(c) quashed because the statutory notice did not specify which limb (concealment or furnishing inaccurate particulars) was alleged and the inapplicable portion was not struck off. - HELD THAT: - The Tribunal found that the notice issued under section 274 read with section 271(1)(c) was in a printed omnibus form and failed to strike off the irrelevant limb, thus not informing the assessee of the specific charge. Relying on the ratio of the Hon'ble Bombay High Court (Full Bench at Goa) in Mr. Mohd. Farhan A. Shaikh v. ACIT , the Tribunal held that penalty proceedings must stand on the statutory notice and that an omnibus notice betrays non application of mind and suffers from vagueness. The Tribunal emphasised that section 271(1)(c) is a penal provision to be construed strictly and that ambiguity must be resolved in the assessee's favour; consequently, a defect in the notice that leaves the charge unspecified vitiates the penalty order. Having decided the preliminary question in favour of the assessee, the Tribunal did not adjudicate the merits of the other grounds as they became academic. [Paras 5, 7]

Penalty order under section 271(1)(c) quashed; appeal allowed.

Final Conclusion: The Tribunal, following the jurisdictional High Court's Full Bench ratio that omnibus printed notices without striking off inapplicable limbs vitiate penalty proceedings under section 271(1)(c), quashed the penalty order for A.Y. 2012 13 and allowed the assessee's appeal.

Applicability of Section 144C (Dispute Resolution Panel) - Substantive versus procedural effect of legislative amendment - Time limit for completion of assessment under Section 153B - Assessment passed beyond limitation void ab initio

Applicability of Section 144C (Dispute Resolution Panel) - Substantive versus procedural effect of legislative amendment - Time limit for completion of assessment under Section 153B - Assessment passed beyond limitation void ab initio - Validity of assessment orders framed under section 153A read with section 143(3) and section 144C(13) - whether assessments for the stated years were time barred and void ab initio. - HELD THAT: - The Tribunal held that Section 144C, inserted by Finance (No.2) Act 2009, effects a substantive change by providing a distinct scheme of assessment for cases involving transfer pricing and eligible assessees and therefore is not merely procedural. Relying on the reasoning in the judgment of M/s. Vedanta Ltd. (as applied by the Mumbai Tribunal in Truetzsshler India Ltd. ), the Tribunal concluded that Section 144C applies prospectively from assessment year 2011-12 and therefore cannot be invoked for AY 2008-09, AY 2009-10 and AY 2010-11. For those years the time limits under Section 153B (applicable to assessments initiated under search/seizure provisions) govern completion of assessment. As the AO completed the assessments after the statutory period (the AO framed final orders on 29-11-2017 whereas the relevant limitation under Section 153B had expired), the assessments were held to be time barred and thus void ab initio. Having found the assessments invalid on this ground, the Tribunal declined to adjudicate the merits of the other grounds raised by the assessee. [Paras 5, 7]

Assessment orders for AY 2008-09, AY 2009-10 and AY 2010-11 are time barred and void ab initio; appeals are partly allowed.

Final Conclusion: The Tribunal held that Section 144C is substantive and not applicable to the cited assessment years; consequently the assessments completed beyond the limitation prescribed under Section 153B are unsustainable and were set aside, and the appeals were partly allowed.

Penalty for attempted export and confiscation where contraband is found - presumption of knowledge of exporter for contraband in a sealed container - responsibility of multimodal transport operator for cargo from place of acceptance - onus on multimodal transport operator to prove absence of fault or neglect - finality of concurrent factual findings of the Tribunal and absence of substantial question of law

Penalty for attempted export and confiscation where contraband is found - presumption of knowledge of exporter for contraband in a sealed container - Whether the respondent/exporter could be penalised under the Customs regime for the contraband found in the sealed container. - HELD THAT: - The Tribunal examined the record including the Panchanama and found the container seal, as recorded on the export documents, to be intact and untampered at the point of interception. Documentary evidence and the statement recorded under Section 108 established that the authorised Central Excise officer was present at the factory premises when the declared goods were stuffed and the container was sealed. The adjudicating authority fixed responsibility on the respondent by presumption and assumption without producing material connecting the respondent to the contraband. The High Court agreed with the Tribunal's factual conclusion that no evidence was produced by the department to connect the respondent with the presence of the prohibited item and therefore the imposition of penalty on the exporter was not justified.

Penalty and confiscation could not be sustained against the respondent/exporter in the absence of evidence connecting it with the contraband; the Tribunal's factual finding was upheld.

Responsibility of multimodal transport operator for cargo from place of acceptance - onus on multimodal transport operator to prove absence of fault or neglect - Whether the responsibility for the cargo lay on the multimodal transport operator and whether that attribution absolved the respondent/exporter of liability. - HELD THAT: - The Tribunal referred to the definitions and scheme of the Multimodal Transportation of Goods Act which fix responsibility on the multimodal transport operator from the place of acceptance (here, the exporter's factory premises). The statutory regime requires the multimodal transport operator, if disputing liability, to prove absence of fault or neglect by himself or his servants/agents. The Tribunal applied these statutory principles in assessing responsibility and found the available material consistent with the position that the transporter, not the exporter, bore responsibility for the consignment once sealed at the factory premises, and that the department failed to show the respondent's culpability.

The Tribunal's application of the multimodal transport statutory framework to allocate responsibility was upheld and did not support fixing liability on the respondent/exporter.

Finality of concurrent factual findings of the Tribunal and absence of substantial question of law - Whether the Tribunal's factual conclusions gave rise to a substantial question of law warranting interference by the High Court. - HELD THAT: - The Court reviewed the Tribunal's re-examination of facts and documentary evidence and concluded that the dispute was essentially factual. The Tribunal's findings - that the seal was intact, that the authorised officer had attested the stuffing and sealing, and that there was no material connecting the exporter with the contraband - were concurrently recorded. Having found no error of law in the Tribunal's approach and no substantial legal question arising from the material, the High Court held that appellate interference was not warranted.

No substantial question of law arose; the appeal was dismissed and the Tribunal's factual findings were affirmed.

Final Conclusion: The High Court dismissed the Revenue's appeal, holding that the Tribunal's concurrent factual findings-particularly that the container seal was intact, the stuffing and sealing were attested by the authorised officer, and there was no evidence connecting the exporter with the contraband-negated the basis for imposing penalty on the respondent; the matter was factual and did not raise any substantial question of law.

Penalty under Section 112 of the Customs Act, 1962 - mis-declaration and concealment in courier consignments - onus of proof and requirement of specific averment under Section 112 - connivance and circumstantial evidence requirement - liability of courier and consignor for correct declaration

Penalty under Section 112 of the Customs Act, 1962 - connivance and circumstantial evidence requirement - Validity of the penalty imposed on the appellants under Section 112 in the absence of direct or circumstantial evidence linking them to smuggling - HELD THAT: - The Tribunal found that the Revenue failed to produce any direct or circumstantial evidence to connect the appellants with the concealment and importation of gold. The adjudicating authorities relied on the recovery from the consignment and the allegation that the appellants knew an individual named Salman, but there was no evidence of participation, agreement, prior arrangement or overt act by the appellants to bring the gold into the country. Penalty under Section 112 attaches only where a person does or omits to do an act rendering goods liable for confiscation or abets such act; mere suspicion, surmise or unestablished association is insufficient. In these circumstances imposition of penalty was held to be arbitrary and unsupported by the material on record. [Paras 6, 7, 8]

Penalty under Section 112 set aside for want of evidence linking the appellants to the smuggling activity.

Onus of proof and requirement of specific averment under Section 112 - Whether the Revenue specified the precise legal basis under the two limbs of Section 112 when alleging liability - HELD THAT: - The Tribunal observed that Section 112 contains two distinct limbs and the show cause notice and orders did not specify under which limb the appellants were being proceeded against. The authorities must specifically aver and establish the nature of the culpable act or omission that attracts each limb; absence of such specific pleading and proof undermines the charge and precludes imposition of penalty. [Paras 6, 8]

Proceedings failed to specify the applicable limb of Section 112; such deficiency contributed to invalidating the penalty.

Liability of courier and consignor for correct declaration - mis-declaration and concealment in courier consignments - Whether the Revenue conducted adequate investigation of the consignor and courier agency before fastening penalty on the appellants - HELD THAT: - The Tribunal noted that the courier (FedEx) had informed authorities that the consignment might contain undeclared commodities, yet the Revenue did not sufficiently investigate the consignor abroad or elicit details from the courier to establish the chain of custody or the role of third parties. Lack of inquiry into the consignor and the courier's role, and absence of efforts to link the alleged mastermind to the appellants, left vital doubts unanswered. Penalty cannot rest on these unaddressed lacunae in the investigation. [Paras 6, 7]

Failure to investigate consignor and courier materially undermined the case for imposing penalty; the investigation was inadequate.

Connivance and circumstantial evidence requirement - Whether mere acquaintance or limited involvement (such as providing a phone number) suffices to attract penal liability under Section 112 - HELD THAT: - The Tribunal held that the only allegation against the appellants was acquaintance with the alleged mastermind and that one appellant had provided a phone number. The record contained no material showing active participation, agreement, prior arrangement or assistance in the importation. The Court emphasised that mere knowledge of or association with an accused person, without further incriminating facts, does not meet the threshold for penalty under Section 112. [Paras 6, 7]

Mere acquaintance or provision of a phone number does not establish the requisite connivance to impose penalty under Section 112.

Final Conclusion: The impugned appellate order and the penalty imposed under Section 112 of the Customs Act, 1962 are set aside for lack of specific averments, inadequate investigation and absence of evidence connecting the appellants to the smuggling; the appeals are allowed.

Suspension of customs broker license - violation of Regulation 10(d) and 10(e) of CBLR, 2018 - limitation for issuance of show-cause notice under CBLR, 2018 (Regulation 17) - disciplinary action pending completion of departmental enquiry - standard of proof for broker's complicity in smuggling

Suspension of customs broker license - standard of proof for broker's complicity - Validity of the order suspending the appellant's customs broker licence - HELD THAT: - The Tribunal found that the appellant's licence was suspended following recovery of gold from baggage and statements implicating the appellant's G-Card holder. However, the role of the appellants themselves was not clearly established on the record so as to warrant the extreme measure of suspending the licence. Having considered the material and the fact that departmental enquiries were still in progress, the Tribunal held that suspension of the licence was not justified at that stage. The Tribunal therefore set aside the suspension, while making clear that this order does not preclude the Department from taking appropriate action upon completion of its proceedings. [Paras 4, 5]

Suspension of the appellant's licence set aside; licence restored pending completion of departmental proceedings.

Limitation for issuance of show-cause notice under CBLR, 2018 (Regulation 17) - disciplinary action pending completion of departmental enquiry - Status of departmental proceedings and time-bar objection under CBLR 2018 - HELD THAT: - The appellants contended that the show-cause notice was time-barred under Regulation 17 of CBLR, 2018. The Tribunal noted that an SCN has in fact been issued and that departmental examination and enquiry were ongoing. The Tribunal did not decide the limitation point on the merits; instead, it left the question of appropriate departmental action open for determination after completion of enquiries and examination, thereby permitting the Department to take suitable action in accordance with law. [Paras 4]

SCN and related proceedings left for completion and fresh consideration; limitation objection not finally adjudicated by this order.

Final Conclusion: The suspension of the customs broker licence is set aside and the licence is restored; the Department remains free to complete its enquiries and take appropriate action, including addressing any limitation objection, in accordance with law.

Classification under Customs Tariff headings - Rules of Interpretation (Rule 1 and Rule 2(a)) - Chapter/Section Notes (exclusion by Chapter note 1(f)) - Exemption under Notification No. 24/2005-Cus (S.No. 23) - Confiscation under Section 111(d) - Confiscation under Section 111(m) - Distinction between declaration under Section 46 and self-assessment under Section 17 - Penalty under Section 112

Classification under Customs Tariff headings - Rules of Interpretation (Rule 1 and Rule 2(a)) - Chapter/Section Notes (exclusion by Chapter note 1(f)) - Classification of the imported goods as falling under heading 94053000 rather than under heading 85411000 - HELD THAT: - The Tribunal analysed competing headings 8541 (diodes and related semiconductor devices) and 9405 (lamps and lighting fittings, including lighting sets of a kind used for Christmas trees). The adjudicating authority had applied Rule 2(a) of the Rules of Interpretation to treat incomplete strands (strings of 50 LEDs without adapters) as complete lighting sets. The Commissioner (Appeals) relied on Rule 1 and Chapter note 1(f) to exclude Chapter 85 lighting fittings from Chapter 94, but also found there was no specific heading for LED lighting fittings in Chapter 85, a contradiction which undermined reliance on the exclusion note. The Tribunal held that photosensitive diodes and LEDs are excluded from the specific sub-heading relied upon by the Commissioner (Appeals) and that the original authority correctly applied Rule 2(a) to classify the incomplete LED strands as lighting sets of a kind used for Christmas trees. Accordingly, the classification under 94053000 is restored and the Commissioner (Appeals) order on classification is set aside. [Paras 6, 8, 9, 10, 11]

The imported goods are correctly classifiable under 94053000.

Exemption under Notification No. 24/2005-Cus (S.No. 23) - Availability of benefit under Notification No. 24/2005-Cus (S.No. 23) to the imported goods - HELD THAT: - S.No. 23 of Notification No. 24/2005-Cus exempts goods falling under heading 8541. Having held that the goods are classifiable under 94053000 and not under heading 8541, the Tribunal concluded that the exemption is not available to the importer. The exemption is confined to goods within heading 8541 and does not extend to goods classifiable under Chapter 94. [Paras 12]

The benefit of Notification No. 24/2005-Cus (S.No. 23) is not available to the respondent.

Confiscation under Section 111(d) - Confiscation under Section 111(m) - Distinction between declaration under Section 46 and self-assessment under Section 17 - Whether the imported goods are liable to confiscation under Sections 111(d) or 111(m) of the Customs Act - HELD THAT: - As to Section 111(d), although the CRO (Compulsory Registration Order) lists LED lighting chains in its schedule, the Tribunal observed that the Rules of Interpretation applied to tariff classification do not extend to imposing import prohibitions under the BIS framework and noted doubts about whether the CRO validly imposes import prohibitions under the BIS Act; however, that point was not decided as it was not argued. On the facts, the goods were incomplete strands without adapters; in absence of an explicit prohibition on import of such incomplete strands, import was not found to be prohibited and confiscation under Section 111(d) could not be sustained. Concerning Section 111(m), the Tribunal explained the legal distinction between factual declarations in the Bill of Entry (Section 46) and self-assessment of classification/duty (Section 17). Mis-classification or incorrect claim to an exemption in self-assessment does not amount to goods not corresponding to the entry made under Section 46. Here the description in the Bill of Entry described LEDs (albeit in strands) and was at best incomplete or vague, not a wrong declaration; accordingly confiscation under Section 111(m) was not sustainable. [Paras 17, 18, 19, 20, 21]

The goods are not liable to confiscation under Section 111(d) or Section 111(m).

Penalty under Section 112 - Validity of imposition of penalty under Section 112(a)(ii) - HELD THAT: - Penalty under Section 112 flows from acts rendering goods liable for confiscation. Having found that confiscation under Sections 111(d) and 111(m) is not sustainable on the facts, the Tribunal held that no penalty under Section 112 can be imposed in the present case. The Tribunal therefore upheld the setting aside of the penalty by the Commissioner (Appeals). [Paras 21, 22]

No penalty can be imposed under Section 112 in respect of the impugned goods.

Final Conclusion: The appeal is partly allowed: the Tribunal restores classification of the imported LED strands under 94053000 and denies the benefit of Notification No. 24/2005 (S.No. 23); however, it finds that the goods are not liable to confiscation under Sections 111(d) or 111(m) and that no penalty under Section 112 can be sustained.

Redemption fine - provisional release on bond - availability of goods for confiscation - Advance License Scheme bond obligations - distinguishing precedent

Redemption fine - provisional release on bond - availability of goods for confiscation - Whether redemption fine could be imposed where the goods were not seized nor provisionally released against a bond but a bond was executed only for compliance with an exemption notification - HELD THAT: - The adjudicating authority declined to impose redemption fine because the goods were not available for confiscation and had neither been seized nor provisionally released on executing a provisional-release bond. The record shows the bond in question was executed exclusively to comply with Exemption Notification No. 149/95-Cus under the Advance License Scheme and was not a bond for provisional release of seized goods. The Supreme Court decision in Weston Components Ltd. was inapplicable because in that case the goods had been seized and subsequently released provisionally on execution of a bond, which preserved the power to levy redemption fine. Since the factual foundation (seizure and provisional release on bond) underpinning Weston Components is absent here, its ratio does not apply. For these reasons the Tribunal agreed with the adjudicating authority's conscious decision not to impose redemption fine. [Paras 5, 6, 7]

Redemption fine not imposed where goods were neither seized nor provisionally released on a provisional-release bond; the bond executed solely for compliance with the exemption notification does not justify imposing redemption fine.

Final Conclusion: The appeal by Revenue is dismissed and the impugned order upholding non-imposition of redemption fine is affirmed.

Classification of goods as imported, not by end-use - Specific heading prevails over general heading - Liquid crystal devices as articles falling in Chapter 90 - Parts and accessories classification under Section XVI/Chapter notes - Application of Supreme Court precedent in Secure Meters to LCD modules

Liquid crystal devices as articles falling in Chapter 90 - Specific heading prevails over general heading - Classification of goods as imported, not by end-use - Imported LCD modules (LCD with inseparable PCB) are classifiable under Customs Tariff Heading 90138010 (Chapter 90) and not under Heading 85229000 (parts of sound recording/reproducing apparatus). - HELD THAT: - The Tribunal applied the principle that goods must be classified according to their nature as imported and not by their end-use. Chapter notes and explanatory notes show that where an item constitutes an article expressly covered by a Chapter heading (here liquid crystal devices under Heading 90.13 / 9013.80/9013.8010), it must be classified in that heading unless the article is more specifically provided for elsewhere. The Supreme Court's decision in Secure Meters establishes that parts or accessories which in themselves constitute articles falling in a particular heading of Chapter 90 are to be classified in that heading, and that Section/Chapter Note 2(b) (classification with machines under Section XVI) applies only if the items are not specifically classifiable under their respective headings. The Tribunal found that the imported items are LCD modules that, by description and character, fall within the scope of liquid crystal devices covered by Heading 90.13 and its explanatory notes. Consequently, the classification under Heading 90138010 is correct despite the presence of an inseparable PCB and the importer's use in car-audio assemblies. The lower authorities' reliance on Section XVI notes to classify the items as parts of Chapter 85/8522 was held to be inconsistent with the rule that a specific chapter heading for an article (Chapter 90) prevails over a general parts classification under Section XVI.

The classification under Heading 90138010 is upheld; the orders treating the imports as classifiable under 85229000 are set aside and the appeal is allowed.

Final Conclusion: The Tribunal allowed the appeal, holding that the imported LCD modules are classifiable as liquid crystal devices under Heading 90138010 (Chapter 90) in accordance with the Supreme Court's precedent and Chapter/Section notes, and set aside the impugned orders classifying them under Heading 85229000.

Forfeiture of shares/debentures - jurisdiction of civil courts v. Company Law Board - limited scope of Section 111A of the Companies Act, 1956 to transfer/transmission - right to seek specific performance for subscription to debentures under Section 122 of the Companies Act, 1956 - Order IX Rule 7 CPC - setting aside ex parte proceedings - Order VI Rule 17 CPC - amendment of party name / plaint

Forfeiture of shares/debentures - jurisdiction of civil courts v. Company Law Board - limited scope of Section 111A of the Companies Act, 1956 to transfer/transmission - Whether the Company Law Board under Section 111A had jurisdiction to entertain a challenge to forfeiture of debentures or whether civil courts have jurisdiction. - HELD THAT: - The Court held that Section 111A deals with refusal to register transfer or transmission of shares or debentures and remedies in that context, and does not address forfeiture of shares or debentures. Authorities cited (including decisions of the Bombay High Court and the Company Law Board) support the limited scope of Section 111A to transfer/transmission matters. Since forfeiture is not covered by Section 111A, the remedy lies before civil courts, and the civil court therefore had jurisdiction to entertain the suits challenging forfeiture of rights under the Fully Convertible Debentures.

Challenge to forfeiture cannot be entertained by the Company Law Board under Section 111A; civil courts have jurisdiction to decide forfeiture disputes.

Order VI Rule 17 CPC - amendment of party name / plaint - entitlement to fresh notice after amendment - Whether the Company (which had been substituted/renamed during proceedings) was entitled to a fresh notice upon amendment of the cause title under Order VI Rule 17 CPC. - HELD THAT: - The Court observed that the applications to alter the cause title were under Order VI Rule 17 CPC to reflect the company's changed status and not applications to implead a new party under Order I Rule 10 CPC. The appellant-company had participated in the proceedings and had itself filed applications under Order IX Rule 7 CPC; consequently, merely amending the party name in the pending suits did not entitle it to a fresh notice. The pleadings and conduct showed the company had notice of the suits, and no fresh notice was warranted.

Amendment of the defendant's name under Order VI Rule 17 CPC did not entitle the defendant to a fresh notice.

Order IX Rule 7 CPC - setting aside ex parte proceedings - Whether the orders rejecting the applications under Order IX Rule 7 CPC could be challenged in the present second appeals. - HELD THAT: - The Court noted that the appellant could and ought to have challenged the trial court's rejection of its Order IX Rule 7 CPC applications during the first appeals by filing cross-objections or raising the point in those appeals. No cross-objections or challenges were taken during the pendency of the appeals, and the orders rejecting the applications have therefore attained finality. Consequently, the appellant cannot now re-open those orders in the second appeals.

The validity of the orders rejecting applications under Order IX Rule 7 CPC having not been challenged earlier has attained finality and cannot be raised in these second appeals.

Final Conclusion: The appeals were dismissed: forfeiture of debentures falls within civil court jurisdiction (Section 111A does not apply), amendment of the defendant's name under Order VI Rule 17 CPC did not require fresh notice, and the Order IX Rule 7 CPC orders stood final as they were not earlier challenged.

Dispensation of shareholders' meetings on consent affidavits - service of statutory notices under Section 230(5) read with Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - presumption of no objection on non-response within thirty days - appointment of adviser to assist the Official Liquidator for scrutiny of accounts - appointed date for scheme

Dispensation of shareholders' meetings on consent affidavits - Convening and holding of meetings of equity shareholders of the three Applicant Companies dispensed with on account of 100% consent affidavits. - HELD THAT: - The Tribunal accepted the representation that each Applicant Company has 100% of its equity shareholders providing consent affidavits to the Composite Scheme. On that basis the requirement to convene and hold meetings of the equity shareholders for approval of the Scheme was dispensed with for Applicant Company No.1, Applicant Company No.2 and Applicant Company No.3, subject to the record of those consent affidavits being in the Company Scheme Application. [Paras 9, 10, 11]

Meetings of equity shareholders of Applicant Companies 1, 2 and 3 are dispensed with in view of the filed 100% consent affidavits.

Service of statutory notices under Section 230(5) read with Rule 8 of Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - presumption of no objection on non-response within thirty days - Directions for service of notices on statutory authorities and the consequence of no response within thirty days. - HELD THAT: - The Tribunal directed that notices of the proposed Scheme be served on the Regional Director (Western Region), Registrar of Companies Mumbai, the concerned Income Tax Authorities and the Goods and Services Tax authority by Registered Post-AD/Speed Post and hand delivery in accordance with the statutory scheme under Section 230(5) and Rule 8. The Tribunal recorded that if no response is received from these authorities within thirty days of receipt of the notice, it will be presumed that they have no objection to the Scheme, and the Applicant Companies must file an affidavit of service and compliance within ten working days after serving the notices. [Paras 13, 14, 15, 16, 18]

Applicant Companies must serve statutory notices as directed; non-response within thirty days will be treated as no objection, and an affidavit of service must be filed within ten working days.

Appointment of adviser to assist the Official Liquidator for scrutiny of accounts - Appointment of a chartered accountant to assist the Official Liquidator and requirement to serve intimation on the Official Liquidator with fees payable. - HELD THAT: - The Tribunal directed service of intimation of the Scheme on the Official Liquidator and appointed a named chartered accountant to assist the Official Liquidator in scrutinising the Transferor Company's books for the last five years and to submit a report. The Transferor Company is directed to pay the prescribed fees to the appointed chartered accountant. The Tribunal further provided that if no representation or response is received from the Official Liquidator within thirty days of receipt of notice, it will be presumed that the Official Liquidator has no representation or objection to the Scheme. [Paras 17]

Official Liquidator to be served; the appointed chartered accountant shall assist the Official Liquidator; Transferor Company to pay the specified fees; non-response within thirty days will be treated as no objection.

Appointed date for scheme - The Appointed Date under the Scheme is fixed. - HELD THAT: - The Tribunal recorded and accepted the Appointed Date as fixed in the Scheme documents. That date will be the operative date for the purposes of the Composite Scheme of Amalgamation and Arrangement as presented to the Tribunal. [Paras 4, 19]

Appointed Date for the Scheme is 1 April 2020.

Final Conclusion: The Tribunal dispensed with shareholder meetings for all three Applicant Companies on the basis of filed 100% consent affidavits, directed statutory service of notices to specified authorities with a thirty-day presumption of no objection on non-response and required filing of an affidavit of service, appointed a chartered accountant to assist the Official Liquidator with fees payable by the Transferor Company, and recorded the Appointed Date as 1 April 2020.

Sanction of Scheme of Amalgamation - Appointed Date - transfer of assets and liabilities without any act, deed or thing - dissolution without winding up - compliance with Sections 230 to 232 of the Companies Act, 2013 - fairness and reasonableness of the scheme - requisite majority approval in meetings of shareholders and creditors - filing and registration with the Registrar of Companies

Sanction of Scheme of Amalgamation - fairness and reasonableness of the scheme - Sanction of the Scheme of Amalgamation between the transferor companies and the transferee company - HELD THAT: - The Tribunal considered the petition, annexed Scheme, statutory auditor's certificate on accounting treatment, the valuation report on share exchange ratio, the Official Liquidator's report and the absence of any objector or adverse representation. The Regional Director's observations were addressed by the petitioners and the petitioners undertook compliance where required. On the material on record the Tribunal found the Scheme to be fair and reasonable and not violative of law or contrary to public interest and therefore sanctioned the Scheme. [Paras 16, 17]

Scheme of Amalgamation sanctioned by the Tribunal.

Appointed Date - transfer of assets and liabilities without any act, deed or thing - compliance with Sections 230 to 232 of the Companies Act, 2013 - Legal effect of the Scheme with effect from the Appointed Date and transfer of properties, assets and liabilities - HELD THAT: - The Tribunal gave effect to the Scheme from the Appointed Date stated therein. Consequent to sanction, all properties, rights, powers, interests, assets and undertakings of the transferor companies as on the Appointed Date shall stand transferred to the transferee company, and all liabilities and duties as on that date shall similarly stand transferred, without any further act, deed or thing. These directions were made pursuant to the statutory scheme under Sections 230-232. [Paras 17]

Scheme to operate with effect from 1st April, 2020 and assets and liabilities to stand transferred to the transferee company without any further act.

Requisite majority approval in meetings of shareholders and creditors - filing and registration with the Registrar of Companies - Compliance with convening/dispensing of meetings, requisite approvals and post-sanction filing obligations - HELD THAT: - The Tribunal recorded that meetings of equity shareholders and secured creditors of the transferee company and unsecured creditors of the transferor companies were held as directed; meetings of equity shareholders of the transferor companies were dispensed with on account of filed consent affidavits. The Regional Director's queries about meeting approvals and identity of the enclosed Scheme were met by the petitioners. Post-sanction, the transferee company is directed to deliver certified copy of the order to the Registrar of Companies for registration and the Registrar is directed to consolidate records in accordance with the Scheme. [Paras 11, 12, 13, 15, 17]

Requisite meeting approvals treated as complied with; transferee to file certified copy with ROC for registration and consolidation of records to follow.

Dissolution without winding up - filing and registration with the Registrar of Companies - Dissolution of the transferor companies and related consequential directions - HELD THAT: - The Tribunal ordered that upon filing of the certified copy of this order with the Registrar of Companies, the transferor companies shall be dissolved without winding up. The Tribunal also permitted the transferee company to file the Schedule of Assets within four weeks and left liberty to any interested person to seek further directions, thereby providing for necessary post-sanction compliance and record consolidation. [Paras 17, 18]

Transferor companies to be dissolved without winding up on filing of certified copy with ROC; schedule of assets to be filed and liberty preserved for further applications.

Sanction of Scheme of Amalgamation - compliance with Sections 230 to 232 of the Companies Act, 2013 - Disposal of company petition and costs - HELD THAT: - Having sanctioned the Scheme and recorded fulfillment of requisite compliances and undertakings, the Tribunal disposed of the connected company petition. The Tribunal expressly directed that there shall be no order as to costs and authorised issuance of certified copy upon completion of formalities. [Paras 17, 18, 19, 20]

Company Petition disposed of; no orders as to costs; certified copy to be issued on compliance of formalities.

Final Conclusion: The Tribunal sanctioned the Scheme of Amalgamation between the two transferor companies and the transferee company as fair and reasonable, to operate with effect from 1st April, 2020; directed transfer of assets and liabilities to the transferee without further act, dissolution of the transferors without winding up on filing of the certified order, required post-sanction filings with the Registrar of Companies and disposed of the petition with no order as to costs.

Restoration of name in register - "just" ground for restoration under section 252(3) of the Companies Act, 2013 - strike off for non-filing under section 560(5) of the Companies Act, 1956 - conditions for revival: statutory filings, fees, costs and prohibition on alienation - disqualification of directors under section 164 not automatically removed by restoration

Restoration of name in register - "just" ground for restoration under section 252(3) of the Companies Act, 2013 - conditions for revival: statutory filings, fees, costs and prohibition on alienation - disqualification of directors under section 164 not automatically removed by restoration - Restoration of the company's name in the register on the "just" ground under section 252(3) of the Companies Act, 2013, and the terms on which restoration is allowed. - HELD THAT: - The Tribunal examined the petitioner's plea for restoration of M/s. Fragrant Farms and Exports P. Ltd. relying on the equitable concept of "just"ness under section 252(3) of the Companies Act, 2013 and noted authorities interpreting "just" as fairness and reasonableness in the totality of facts. Although the Registrar of Companies had struck off the company's name under section 560(5) of the Companies Act, 1956 for failure to file statutory returns and maintained that procedural steps were followed, the Tribunal found sufficient grounds to restore the company's name. Restoration was ordered subject to specific conditions: filing of all outstanding annual returns and balance-sheets for the default period with requisite fees and late charges; payment of a specified cost for revival by online payment; an affidavit of compliance within the stipulated time; a shareholders' undertaking regarding non-use of accounts for tainted money during demonetization; and a prohibition on alienation or disposal of company assets until compliance is complete. The Tribunal also clarified that restoration of the company's name does not automatically lift any disqualification of directors under section 164, which can be addressed only in accordance with law, and that the Registrar remains competent to take action for any alleged late filings or other defaults as permitted by the Companies Act. [Paras 9, 10, 11, 12]

Application allowed; Registrar of Companies directed to restore the company as active and the restoration is subject to specified compliance, payment and preservation conditions; directors' disqualification not automatically removed.

Final Conclusion: The Tribunal allowed the application and directed restoration of the company's name in the Registrar's records on equitable "just" grounds under section 252(3), subject to prescribed filings, payments, compliance affidavit, prohibition on alienation of assets and without any automatic removal of director disqualifications.

Entitlement to fees of Interim Resolution Professional - effect of committee of creditors' resolution to replace interim resolution professional - construction of Section 22(3)(b) and Section 22(5) of the Insolvency and Bankruptcy Code, 2016 - interpretation of Regulation 17(3) of the CIRP Regulations, 2016 - subordination of regulations to the Code

Entitlement to fees of Interim Resolution Professional - effect of committee of creditors' resolution to replace interim resolution professional - construction of Section 22(3)(b) and Section 22(5) of the Insolvency and Bankruptcy Code, 2016 - interpretation of Regulation 17(3) of the CIRP Regulations, 2016 - Whether the Interim Resolution Professional was entitled to claim fees beyond the date on which the committee of creditors resolved to replace him and after the statutory ten day period under Section 22(5) lapsed without an order of the Adjudicating Authority directing him to continue. - HELD THAT: - The committee of creditors in its first meeting on 16.07.2018 resolved to replace the Interim Resolution Professional and filed an application on 31.07.2018 for appointment of a proposed resolution professional under Section 22(3)(b). Section 22(4) requires the Adjudicating Authority to forward the proposed name to the Board and Section 22(5) expressly empowers the Adjudicating Authority to direct the interim resolution professional to continue only where the Board does not confirm the proposed name within ten days. Regulation 17(3) provides for the interim resolution professional to perform the functions of the resolution professional when appointment is delayed, but it cannot be interpreted so as to negate the specific statutory mechanism in Section 22(3)(b) and (5). Reading Regulation 17(3) to permit continuity despite a Committee resolution to replace the interim resolution professional would render Section 22(5) otiose. In the present facts, after the CoC resolved to replace the interim resolution professional and the application was filed, no order under Section 22(5) was passed directing the interim resolution professional to continue; substantially no work was conducted by him after 16.07.2018 and the second meeting on 10.08.2018 transacted no business. Consequently the interim resolution professional had no legal right to continue and to claim fees beyond the period permitted by the statutory scheme absent an order of the Adjudicating Authority under Section 22(5). The Adjudicating Authority's direction to pay fees up to 09.10.2018 failed to consider the effect of the CoC resolution and filing of the application and therefore was incorrect. The interim payment of Rs. 10 lakhs made pursuant to this Tribunal's interim order was held sufficient to cover the fees and CIRP costs. [Paras 12, 13, 14, 15, 16]

The interim resolution professional was not entitled to continue as resolution professional or claim fees beyond the date when the CoC resolved to replace him and, in the absence of an Adjudicating Authority order under Section 22(5), had no right to fees up to 09.10.2018; the Adjudicating Authority's order directing payment until 09.10.2018 was set aside and the interim payment of Rs. 10 lakhs was held sufficient.

Final Conclusion: Appeal allowed. The Adjudicating Authority's order insofar as it directed payment of fees to the Interim Resolution Professional until 09.10.2018 is set aside; in the circumstances the interim payment already made covers the fee and insolvency resolution process costs and no further payment is required.

Power of the Committee of Creditors to resolve liquidation before confirmation of a resolution plan - duty of the Resolution Professional to conduct due diligence and present resolution plans - provisional list of eligible prospective resolution applicants under Regulation 36-A - expression of interest ineligibility and requirement of completeness - no vested right of a resolution applicant to have its plan considered

Power of the Committee of Creditors to resolve liquidation before confirmation of a resolution plan - expression of interest ineligibility and requirement of completeness - The Committee of Creditors was empowered to decide to liquidate the corporate debtor at any time after its constitution and before confirmation of a resolution plan, and its decision to reject the appellants' EOI as ineligible was within its authority. - HELD THAT: - The Tribunal held that the explanation to Section 33(2) of the Code authorises the Committee of Creditors to take the decision to liquidate the corporate debtor any time after its constitution and before confirmation of a resolution plan, including before preparation of the information memorandum. Applying that provision to the facts, the CoC discussed the RP's evaluation of the EOIs, noted that the appellants and related entities had failed to submit requisite or supporting documents, that group entities owed amounts to the corporate debtor, and that the RP had repeatedly reminded them without complete compliance. On that basis the CoC, exercising its commercial wisdom and within the statutory power conferred by Section 33(2) (and its explanation), declared the appellants ineligible and resolved to liquidate. The Tribunal therefore concluded that the CoC's decision was not premature or peremptory and could not be faulted. [Paras 8]

CoC validly resolved to liquidate and legitimately rejected the appellants' EOI as ineligible.

Duty of the Resolution Professional to conduct due diligence and present resolution plans - provisional list of eligible prospective resolution applicants under Regulation 36-A - no vested right of a resolution applicant to have its plan considered - The Resolution Professional's role is to examine and confirm completeness and prima facie compliance of resolution plans/EOIs, issue provisional lists under Regulation 36-A, and a resolution applicant has no vested right to have its plan considered. - HELD THAT: - Relying on the statutory scheme in Sections 25 and 30 and Regulation 36-A (and the Supreme Court's exposition in ArcelorMittal), the Tribunal reiterated that the RP must conduct due diligence on EOIs and resolution plans to ensure they are complete and prima facie not in contravention of law before placing them before the CoC. The RP is not to decide merits of a plan but to ensure conformity and to issue the provisional list of eligible applicants within the timelines prescribed. The Tribunal emphasised that a resolution applicant does not acquire a vested right that its plan will be considered, and therefore no challenge to the Adjudicating Authority is maintainable at the stage where completeness/eligibility was not established. [Paras 8]

RP correctly acted within statutory duties; appellants had no vested right to insist their plan be placed before the CoC absent compliance and eligibility.

Expression of interest ineligibility and requirement of completeness - power of the Committee of Creditors to resolve liquidation before confirmation of a resolution plan - The application under Section 60(5) seeking direction to the Resolution Professional to receive and place the appellants' resolution plan was not maintainable in the circumstances and the appeals were dismissed. - HELD THAT: - Given the CoC's lawful decision (taken within the authority of Section 33(2) and after considering the RP's evaluation that the appellants did not meet the eligibility criteria and had outstanding dues to the corporate debtor), the Tribunal found no basis to direct the RP to accept and place the appellants' proposed plan. The statutory scheme requires EOIs and plans to be complete and eligible; where those preconditions are not satisfied and the CoC resolves to liquidate, a direction under Section 60(5) to compel the RP would be inappropriate. On that reasoning the Tribunal dismissed the appeals. [Paras 8]

The Section 60(5) application seeking mandatory direction to the RP was not sustainable; appeals dismissed.

Final Conclusion: The appeals are dismissed: the CoC lawfully resolved to liquidate prior to confirmation of any resolution plan; the RP acted within its duty to assess completeness and eligibility under the Code and Regulations; and the appellants had no enforceable right to have their plan received and placed before the CoC.

Relief for statutory dues to be decided by respective government departments - Effect of approved resolution plan on post-approval tax demands - Inapplicability of subsequently cited precedent where resolution plan was not challenged - Frivolous application and abuse of judicial process

Effect of approved resolution plan on post-approval tax demands - Relief for statutory dues to be decided by respective government departments - Whether the Adjudicating Authority was right in dismissing the application seeking declarations to restrain the Income Tax Department from raising demands and seeking re-adjudication of reliefs claimed under the approved resolution plan. - HELD THAT: - The Tribunal noted that the resolution plan had been approved by the Adjudicating Authority on 21.05.2019 and that the approval record expressly observed that reliefs and concessions in respect of statutory dues (including instalment payments, protection from coercive action, waiver of pre-deposit, waiver of interest or penal interest) are matters to be decided by the respective government departments. The demands for A.Y. 2012-13 and A.Y. 2013-14 crystallised after the moratorium was lifted; the resolution plan itself provided for payment of tax dues on crystallisation. In these circumstances the Appellate Tribunal held that the Adjudicating Authority did not err in declining to grant the broad declarations and restraints sought against the tax department and in leaving disputes over statutory reliefs to the appropriate statutory fora. [Paras 14, 16]

The Adjudicating Authority correctly refused the declarations and restraint sought and was right in observing that applications for statutory relief must be made to the respective government departments.

Inapplicability of subsequently cited precedent where resolution plan was not challenged - Frivolous application and abuse of judicial process - Whether the reliance on the Supreme Court decision in Ghanashyam Mishra (as urged before this Tribunal) entitled the Applicants to the reliefs sought, and whether the IA amounted to abuse of process. - HELD THAT: - The Tribunal recorded that the judgment in Ghanashyam Mishra was not relied upon before the Adjudicating Authority and that the resolution plan had not been challenged before that Authority. Given the absence of a challenge to the approved plan, the Tribunal could not entertain applying the later-cited precedent to overturn or vary the approval. Further, the Tribunal agreed with the Adjudicating Authority's observation that the application filed by the Monitoring Professional was an attempt to waste judicial time and delay implementation of the approved plan, justifying dismissal as a frivolous/abusive proceeding. [Paras 15, 17]

The subsequent precedent could not be invoked to upset an unchallenged approved resolution plan and the IA was properly dismissed as frivolous/amounting to abuse of process.

Final Conclusion: The impugned order of the Adjudicating Authority dated 17.09.2020 dismissing IA No. 3412/ND/2020 in (IB)-447/ND/2018 is affirmed. The Tribunal found no illegality in the Adjudicating Authority's refusal to grant the blanket declarations sought against the tax department, and agreed that the application was an abuse of process; appeal dismissed.

CIRP revival on breach of settlement/default of post dated cheques - terms of settlement treated as order and direction of the Appellate Tribunal - restoration/revival of admission order - interim resolution professional to resume duties

CIRP revival on breach of settlement/default of post dated cheques - terms of settlement treated as order and direction of the Appellate Tribunal - interim resolution professional to resume duties - Revival/restoration of the Corporate Insolvency Resolution Process admitted on 03.09.2019 against the Corporate Debtor due to breach of the settlement terms recorded by the Appellate Tribunal and default of post dated cheques, and direction for the Interim Resolution Professional to resume duties. - HELD THAT: - The Adjudicating Authority examined the terms recorded by the Appellate Tribunal in its order dated 06.12.2019 (para 11) which treated the mediated settlement terms as an order and direction of the Appellate Tribunal and expressly provided that the CIRP could be revived by the financial creditor in the event of breach of the settlement or default of any post dated cheque. The applicant asserted that the post dated cheques given pursuant to the settlement bounced and no further payments were received despite the last opportunity afforded by the Appellate Tribunal in its order dated 15.03.2021. The Corporate Debtor did not file a reply to the present application despite opportunities and the right to file a reply was closed. Concluding that there was a breach of the settlement terms and default in payment, the Adjudicating Authority applied the Appellate Tribunal's recorded direction and revived and restored the admission order dated 03.09.2019. The Interim Resolution Professional was directed to resume his duties as per the directions contained in the original admission order. [Paras 4, 5]

Application IA 2096/2021 in IB 619(ND)/2019 allowed to the extent that the admission order dated 03.09.2019 is revived/restored and the Interim Resolution Professional is directed to resume his duties; financial creditor to communicate the order and Registrar of Companies to be notified for MCA 21 update.

Final Conclusion: The Tribunal concluded that the settlement recorded by the Appellate Tribunal was breached and, applying the Appellate Tribunal's directions, revived the CIRP initiated on 03.09.2019; the Interim Resolution Professional is to resume functions and the financial creditor and Registrar of Companies are to be notified.

Approval of resolution plan under section 31 - compliance with section 30(2) of the IBC - priority payment of insolvency resolution process costs - protection of operational creditors not less than liquidation value or distribution under section 53 - limited judicial review of the Adjudicating Authority under section 31 - non-contravention of section 29A - valuation - fair value and liquidation value - committee of creditors' commercial wisdom and voting approval

Compliance with section 30(2) of the IBC - priority payment of insolvency resolution process costs - protection of operational creditors not less than liquidation value or distribution under section 53 - The Resolution Plan meets the requirements of section 30(2) of the IBC and relevant Regulations. - HELD THAT: - The Tribunal examined the Resolution Plan and related documents and was satisfied that the plan provides for payment of CIRP costs in priority as required by section 30(2)(a), provides for payment to operational creditors not less than the amounts required by section 30(2)(b) (either liquidation value or amounts under section 53 distribution, whichever is higher), and addresses management, implementation and legality as required by section 30(2)(c)-(e). The plan includes statements and certifications (including Form H and regulation 38(1A) disclosures) and the RP has certified non contravention of law. On this basis the Tribunal found the statutory tests in section 30(2) and the applicable Regulations satisfied and accepted the plan. [Paras 30, 31, 32, 34, 35]

The Tribunal holds that the Resolution Plan conforms to section 30(2) and the applicable Regulations and is acceptable.

Committee of creditors' commercial wisdom and voting approval - limited judicial review of the Adjudicating Authority under section 31 - The Resolution Plan approved by the CoC with requisite voting share (100%) must be submitted to and is susceptible only to the limited scrutiny specified in section 31. - HELD THAT: - The Tribunal noted the CoC approved the plan with 100% voting share in accordance with section 30(4). Following precedents cited by the Bench, the role of the Adjudicating Authority is confined to satisfying itself whether the plan meets the requirements of section 30(2) and not to re weigh the commercial decision of the CoC. The plan was therefore considered in that limited jurisdictional frame and not modified by the Tribunal. [Paras 35, 36, 37]

The Tribunal accepted the CoC approval and applied only the limited review envisaged under section 31.

Valuation - fair value and liquidation value - resolution plan being higher than liquidation value - The Resolution Plan's financial proposal exceeds the liquidation value ascertained by registered valuers, which supports approval. - HELD THAT: - Valuation reports from two registered valuers produced aggregate average fair value and liquidation value figures. The Tribunal recorded that one justification for approving the plan was that the amount proposed under the plan is higher than the liquidation value of the corporate debtor. This comparison informed the Tribunal's satisfaction under the statutory scheme. [Paras 14, 31, 32]

The Tribunal accepted that the plan offers a value higher than liquidation value and treated this as a supporting factor for approval.

Non-contravention of section 29A - compliance certifications by the resolution professional - The Resolution Plan does not contravene section 29A and is in accordance with law. - HELD THAT: - On perusal of the plan and accompanying certifications, including the RP's affidavit and compliance certificate (Form H), the Tribunal found no contravention of section 29A. The Tribunal specifically recorded that the plan is not in contravention of section 29A and complies with statutory requirements. [Paras 31, 33, 38]

The Tribunal concluded that the Resolution Plan is not barred by section 29A and is legally permissible.

Procedural compliance by the resolution professional - requirement to submit plan under section 30(6) - The Resolution Professional complied with procedural requirements in submitting the approved plan and furnished the necessary compliance certificates. - HELD THAT: - The record shows publication of Form A and Form G, constitution and reconstitution of the CoC, issuance of RFRP, receipt and evaluation of EOIs and resolution plans, valuation and transaction audit reports, issuance of LoI, and submission of Form H compliance certificate. The RP certified compliance with statutory and regulatory requirements and filed the plan as mandated under section 30(6). The Tribunal found these procedural steps and certifications to be in order. [Paras 7, 10, 22, 31, 34]

The Tribunal found that the Resolution Professional fulfilled the procedural and documentary requirements for submission of the plan.

Final Conclusion: IA No.1696 of 2021 in CP 3927 of 2019 is allowed; the Resolution Plan annexed to the application is approved, shall be binding on the corporate debtor and stakeholders, the moratorium ceases, and the RP shall supervise implementation and file periodic status reports.

Liquidation under Section 33(1) of the Insolvency and Bankruptcy Code, 2016 - Non-cooperation of corporate debtor and its directors - Failure to hand over books of account and control over assets - Committee of Creditors' resolution proposing liquidation - Appointment of liquidator with written consent - Cessation of moratorium and commencement of moratorium under Section 33(5) - Public announcement of liquidation and statutory intimation to Registrar and regulatory authorities - Liquidator's duty to proceed under Chapter III and file Preliminary Report within 75 days

Liquidation under Section 33(1) of the Insolvency and Bankruptcy Code, 2016 - Non-cooperation of corporate debtor and its directors - Committee of Creditors' resolution proposing liquidation - Order for liquidation of the corporate debtor in terms of Section 33 of the IBC was to be passed. - HELD THAT: - The Tribunal recorded that the Corporate Insolvency Resolution Process had exceeded statutory timeframes with extensions, no resolution plan having been received, and persistent non-cooperation by the corporate debtor and its directors including failure to hand over books, assets and documentation. The Committee of Creditors, composed solely of operational creditors, unanimously resolved to propose liquidation under Section 33(2) of the Code. Taking into account the facts on record, the lack of material cooperation necessary to conduct CIRP and the CoC's decision, the Tribunal concluded that the circumstances mandated liquidation in accordance with Section 33 and the relevant liquidation regulations.

Corporate debtor is ordered to be liquidated and the liquidation process to follow from the date of the order under Chapter III of the IBC and applicable liquidation regulations.

Appointment of liquidator with written consent - Liquidator's remuneration and inclusion in liquidation cost - Appointment of the Resolution Professional as Liquidator and acceptance of his consent. - HELD THAT: - The Tribunal recorded that the Resolution Professional had consented in writing to act as liquidator and that remuneration arrangements and estimated liquidation costs had been considered by the CoC. On the basis of the written consent and the CoC's decisions regarding liquidation costs and remuneration, the Tribunal appointed the Resolution Professional as the liquidator to conduct the liquidation in terms of the Code and the Liquidation Process Regulations.

Mr. Ashok Kumar, the Resolution Professional, appointed as liquidator with his written consent.

Public announcement of liquidation - Statutory intimation to Registrar of Companies and regulatory authorities - Cessation of earlier moratorium and commencement of moratorium under Section 33(5) - Notice of discharge to officers, employees and workmen under Section 33(7) - Liquidator's duty to proceed under Chapter III and file Preliminary Report within 75 days - Directions ancillary to liquidation: public announcement, statutory communications, moratorium change, deemed discharge notice, and procedural steps for the liquidator. - HELD THAT: - The Tribunal directed issuance of the public announcement of liquidation in terms of the Liquidation Process Regulations and directed registry to communicate the order to the Registrar of Companies and the Insolvency and Bankruptcy Board of India. The Tribunal held that the prior moratorium under Section 14 ceases and a fresh moratorium under Section 33(5) commences; the order also operates as a notice of discharge to officers, employees and workmen under Section 33(7). The liquidator was directed to proceed with liquidation under Chapter III and to submit a Preliminary Report to the Adjudicating Authority within seventy-five days from the liquidation commencement date, in accordance with the Regulations.

Specified directions issued to effect and implement the liquidation, including public announcement, statutory intimation, moratorium adjustment, deemed discharge, and liquidator's procedural obligations.

Final Conclusion: The Tribunal ordered the corporate debtor to be liquidated under Section 33 of the IBC for want of a viable resolution and due to non-cooperation of the management; appointed the consenting Resolution Professional as liquidator; and issued consequential directions for public announcement, statutory communications, moratorium transition, deemed discharge of employees, and for the liquidator to carry out the liquidation and file a Preliminary Report within seventy five days.

Minimum threshold for initiation of CIRP - retrospective application of statutory amendment - Notification dated 24.03.2020 - Section 4 of Insolvency and Bankruptcy Code, 2016 - applicability of NCLAT decision in Jumbo Paper Products Vs. Hansraj Agrofresh Pvt. Ltd.

Minimum threshold for initiation of CIRP - Notification dated 24.03.2020 - Section 4 of Insolvency and Bankruptcy Code, 2016 - retrospective application of statutory amendment - Maintainability of Section 9 application in view of enhancement of minimum threshold by Notification dated 24.03.2020 - HELD THAT: - The Tribunal followed the ruling of the Hon'ble NCLAT reproduced from Company Appeal (AT) (Insolvency) No. 813 of 2021 which held that the threshold of Rs. 1 crore prescribed by the Notification dated 24.03.2020 applies to applications filed under Section 7 or Section 9 on or after 24.03.2020 even if the debt arose prior to that date. Applying that principle, the Tribunal noted that the present Section 9 application was filed on 11.09.2021, i.e., after issuance of the Notification, whereas the default amount pleaded in Part IV is Rs. 3,00,438/-, which is below the enhanced threshold. Consequently the application fails to meet the statutory minimum threshold in Section 4 of the IBC and is not maintainable. Because maintainability was negatived on threshold grounds, the Tribunal did not proceed to decide the contention on limitation. [Paras 6, 8, 9, 11, 12]

Section 9 application dismissed as not maintainable for failure to meet the minimum threshold prescribed by Notification dated 24.03.2020; issue of limitation left open.

Final Conclusion: The application under Section 9 is dismissed for non fulfilment of the enhanced minimum threshold (Notification dated 24.03.2020) and therefore held not maintainable; the question of limitation was not adjudicated.

Adjustment of pre-deposit under Sabka Vishwas (Legacy Dispute Resolution) Scheme - reconsideration of application in Form SVLDRS-1 on production of supporting challan - obligation of Designated Committee to deduct pre-deposits while issuing statement of amount payable - Circulars as guidance for implementation of SVLDRS and limits on judicial directions

Adjustment of pre-deposit under Sabka Vishwas (Legacy Dispute Resolution) Scheme - obligation of Designated Committee to deduct pre-deposits while issuing statement of amount payable - Whether the Designated Committee erred in rejecting the SVLDRS-1 declaration by failing to take into account the claimed pre-deposit supported by challan and whether the application requires reconsideration. - HELD THAT: - The Court noted that Section 124(2) of the Finance Act mandates that any amount paid as pre-deposit during appellate proceedings shall be deducted when issuing the statement indicating the amount payable by the declarant. The petitioner had claimed a pre-deposit and produced the Challan (Annexure-D) at the personal hearing; yet the Designated Committee's estimate omitted that pre-deposit and the rejection letter recorded absence of supporting documents. Given the material on record showing production of the Challan at the hearing, the rejection was found to be cryptic and inappropriate. The Court directed that the petitioner's application in Form SVLDRS-1 be reconsidered by the Designated Committee and disposed of in accordance with the SVLDR Scheme, with specific instruction that the petitioner shall appear before the Committee and satisfy it that the produced Challan relates to the appeal in question. The Committee is to re-examine whether the pre-deposit evidenced by the Challan relates to the dispute and, if so, adjust it in accordance with the statutory scheme. [Paras 14, 15, 16, 17, 18]

The rejection dated 18.05.2020 is set aside and the Designated Committee is directed to reconsider the petitioner's Form SVLDRS-1 application and, on production and satisfaction as to the Challan's relevance, adjust the pre-deposit in accordance with the SVLDR Scheme.

Circulars as guidance for implementation of SVLDRS and limits on judicial directions - reconsideration of application in Form SVLDRS-1 on production of supporting challan - Whether the Board's Circular dated 01.05.2020 (requiring disposal of pending applications by 31.05.2020) precludes the Court from directing reconsideration of an application where the original decision involved error. - HELD THAT: - The respondents relied on the Board's Circular to contend that the Scheme had effectively concluded and that further judicial directions would lead to practical difficulty. The Court held that administrative timelines in the Circular do not bar judicial review where the Court finds an error in the Authority's consideration that results in denial of a party's statutory right. Consequently, the Circular cannot prevent the Court from directing the Authority to reconsider the application when the rejection is found to be improper and prejudicial to the petitioner. [Paras 10, 19]

The Circular dated 01.05.2020 does not preclude the Court from directing reconsideration of the petitioner's application where the Authority's decision is found to be erroneous and prejudicial; the Court may order reconsideration despite the administrative timeline.

Final Conclusion: The letter rejecting the petitioner's SVLDRS-1 application dated 18.05.2020 is set aside; the Designated Committee is directed to reconsider the application in accordance with the SVLDR Scheme, allowing the petitioner to produce and satisfy the Committee regarding the relevant Challan so that any eligible pre-deposit is adjusted when determining the amount payable.

Cenvat credit admissibility on duties paid after conversion from DTA to EOU - Transfer of Cenvat credit between units under same legal entity - Documentary requirement for Cenvat credit - challan as supplementary invoice - Delay in availing Cenvat credit and interpretation of 'immediate' - Applicability of Rule 10 transfer conditions on merger/conversion

Cenvat credit admissibility on duties paid after conversion from DTA to EOU - Cenvat credit was admissible on duties paid in respect of inputs received on conversion of a DTA unit into an EOU despite the duties having been paid due to failure to fulfill export obligation. - HELD THAT: - The Tribunal held that the reason for payment of duties (i.e., recovery consequent to non fulfillment of export obligation) was irrelevant to the question of admissibility of Cenvat credit. The determinative test is whether duty has been paid and whether the inputs are admissible and received within the appellant's limits. Since duties were paid and the inputs were used as inputs, credit was allowable. [Paras 4]

Credit allowed; payment due to failure to fulfill export obligation does not preclude Cenvat credit where duties are paid and inputs are admissible and received.

Transfer of Cenvat credit between units under same legal entity - Transfer/availment of Cenvat credit by the EOU from inputs of the erstwhile DTA unit was permissible because both units formed part of the same legal entity and merger permission was granted. - HELD THAT: - The Tribunal rejected the Commissioner's proposition that the erstwhile DTA unit and the EOU were different legal entities. The merger permission demonstrated common ownership and identity of the legal entity; the Cenvat Credit Rules permit transfer of credit in such circumstances. Accordingly, the objection based on separate legal entity was not sustainable. [Paras 4]

No bar to transfer/availment of credit between merged units forming the same legal entity.

Documentary requirement for Cenvat credit - challan as supplementary invoice - Challans evidencing payment of additional duty can serve as supporting documents for Cenvat credit when they constitute supplementary invoices to the original bill of entry. - HELD THAT: - The Tribunal noted Rule 9(1)(b) which clarifies that 'supplementary invoice' includes a challan evidencing payment of additional duty. In the case, the bill of entry was the original duty paying document and the challans recorded additional duty paid. Therefore, even on the Commissioner's own logic that challans permit credit only when they are supplementary to the original invoice, the facts demonstrated that the challans were valid supporting documents for credit. [Paras 4]

Credit permissible on the basis of challans which operate as supplementary invoices to the original duty document.

Delay in availing Cenvat credit and interpretation of 'immediate' - The short gap between payment of duty in 2008/2009 and availment of credit on 30.11.2009 did not constitute impermissible delay; no time limit then barred the credit. - HELD THAT: - The Tribunal rejected reliance on precedents interpreting 'immediate' where significant delay was involved. At the material time there was no statutory time limit for taking credit; subsequently prescribed time limits (introduced in 2014) do not apply retrospectively. Given the duties were paid in 2008/2009 and credit was taken on 30.11.2009, the Tribunal found no substantial delay to deny credit. [Paras 4]

Availment of credit on 30.11.2009 was not belated and did not disentitle the appellant to credit.

Applicability of Rule 10 transfer conditions on merger/conversion - Rule 10(3) conditions regarding transfer of stock and accounting to the satisfaction of the Deputy/Assistant Commissioner were not applicable to deny credit in the present case where duties were paid by the merged unit after merger and the facts did not fall within the mischief of Rule 10. - HELD THAT: - Rule 10 governs transfer of Cenvat credit upon shifting/transfer of factory or business on account of change in ownership, sale, merger, etc., and requires that stock/capital goods be transferred and accounted for to the satisfaction of the relevant officer. The Tribunal observed that in the present case merger occurred in 2007 but the duty in question was paid subsequently by the merged unit in 2008/2009; consequently the situation did not fall within the ambit of Rule 10 and the rule could not be invoked to deny credit. [Paras 4]

Rule 10 did not apply to deny the credit in the circumstances of merger followed by subsequent payment of duty by the merged unit.

Final Conclusion: The impugned order denying Cenvat credit, interest and imposing penalty was set aside; the appeal allowed on the grounds stated, and Cenvat credit was held admissible under the facts and law examined.

Reasonable opportunity to show cause - revisional power under Section 27 of the Tamil Nadu Value Added Tax Act, 2006 - requirement to consider replies to pre-revision notices before passing revisional orders - reassessment of escaped turnover and reversal of wrongly availed input tax credit

Reasonable opportunity to show cause - requirement to consider replies to pre-revision notices before passing revisional orders - revisional power under Section 27 of the Tamil Nadu Value Added Tax Act, 2006 - Whether the revisional orders under Section 27 could be sustained when the orders do not record consideration of the dealer's objections/replies to pre-revision notices. - HELD THAT: - The Court held that the proviso to Sub-sections (1) and (2) of Section 27 mandates that no order under those subsections shall be passed without giving the dealer a reasonable opportunity to show cause. A reasonable opportunity entails that the dealer's responses to pre-revision notices must be before the authority and must be considered and dealt with in the revisional order. An impugned order cannot be supplemented or 'improved' by a counter-affidavit; where the revisional orders are silent and do not demonstrate that the replies were considered, the statutory requirement is not satisfied. On that short but determinative point the Court intervened, leaving all merits open for fresh consideration by the revisional authority. [Paras 8, 11]

All eight revisional orders set aside for failure to show consideration of the dealer's objections/replies to pre-revision notices; matters remitted to the first respondent to rehear and pass fresh revisional orders de novo after considering the objections, to be completed within four weeks.

Final Conclusion: The eight impugned revisional orders dated 20.03.2017 are set aside on the ground that the dealer's replies to pre-revision notices were not shown to have been considered; the matters are remitted to the revisional authority for de novo exercise of power under Section 27 after considering the objections, to be concluded within four weeks, with no expression of opinion on merits and no order as to costs.

Locus standi - cause of action - Section 25 notice as demand prior to attachment under the Andhra Pradesh Revenue Recovery Act - attachment under revenue recovery proceedings - bona fide purchaser - exercise of writ jurisdiction under Article 226 only in appropriate cases

Locus standi - cause of action - bona fide purchaser - Petitioner's locus to challenge the notice and existence of any cause of action - HELD THAT: - The petitioner claimed ownership of the house by purchase and by earlier power of attorney and mutation, but the registered title was perfected in 2006. The impugned demand notice was issued on 30.01.2006 and the petitioner's own representation records registration of the property on 15.02.2006. Thus, as on the date of the demand notice no cause of action accrued to the petitioner to challenge the notice. The General Power of Attorney and mutation did not conclusively establish title prior to registration, and the petitioner did not specify the exact date in 2006 when title was perfected; the material on record (including counter-affidavit averments and the petitioner's representation) supports the conclusion that title was perfected after issuance of the Form-4 notice. On these facts the writ petition was filed without any cause of action. [Paras 11]

No locus or cause of action existed as on the date of the demand notice; the writ petition was filed without cause of action.

Section 25 notice as demand prior to attachment under the Andhra Pradesh Revenue Recovery Act - attachment under revenue recovery proceedings - exercise of writ jurisdiction under Article 226 only in appropriate cases - Maintainability of the writ petition under Article 226 challenging the Form-4 demand notice issued prior to attachment - HELD THAT: - Section 25 issues a written demand upon the defaulter specifying amount and estate; Section 26 permits attachment only after non-payment. The impugned Form-4 is a demand prior to any attachment and did not itself effect any attachment of the petitioner's property. The High Court's supervisory jurisdiction is not to restrain a competent statutory authority from performing duties imposed by law merely because a demand has been made to the defaulter. Further, writ jurisdiction under Article 226 is to be exercised in appropriate cases such as enforcement of fundamental rights, violation of natural justice, or where proceedings are wholly without jurisdiction; none of those exceptional grounds were made out here. Consequently, the petition seeking to set aside the demand prior to attachment was not maintainable. [Paras 16, 19]

Writ petition challenging the Form-4 demand notice is not maintainable; Article 226 relief is refused.

Final Conclusion: The writ petition is dismissed: the petitioner had no cause of action as on the date of the demand notice and the challenge to the pre-attachment demand was not a maintainable basis for exercise of writ jurisdiction under Article 226; interim stay is vacated and no costs.

Bar of limitation in assessment proceedings - deemed assessment - scope of 'determination' for limitation purposes - reasonable opportunity to show cause / personal hearing - setting aside for non-consideration of objections and remand for de novo assessment

Bar of limitation in assessment proceedings - deemed assessment - scope of 'determination' for limitation purposes - Whether the writ petitioner could again raise the plea of limitation when the identical contention had been finally decided in earlier proceedings. - HELD THAT: - The Court recorded that an earlier common order of a Single Judge had considered and rejected the limitation plea and that that order has attained finality with no intra-court appeal. The petitioner had acted upon the earlier order (attending the directed personal hearing) and therefore could not be permitted to re-agitate the limitation defence in the present round. Consequently the earlier conclusion on limitation governs the present petitions and the petitioner cannot be heard anew on that point. [Paras 6]

Limitation plea cannot be re-opened in these petitions; the earlier final order on limitation governs the matter.

Reasonable opportunity to show cause / personal hearing - setting aside for non-consideration of objections and remand for de novo assessment - Whether the impugned assessment orders dated 12.03.2021 were vitiated by failure to record the personal hearing directed earlier and by non-consideration of objections received on 10.03.2021. - HELD THAT: - Although the Court observed that personal hearing is not statutorily mandated for assessments under the TNVAT Act, the Single Judge had expressly directed a personal hearing in the earlier order and the respondent was bound to comply with that directive. The impugned orders do not mention what transpired on the date fixed for personal hearing nor do they record that a personal hearing took place; further, the objections submitted by the petitioner and shown to have been received on 10.03.2021 were not considered in the orders dated 12.03.2021. For these procedural lacunae the assessments were held to be unsustainable. The Court therefore set aside the impugned orders solely on this procedural ground, refrained from expressing any view on the merits, and directed a personal hearing by consent followed by de novo exercise and passing of fresh orders within a stipulated period. [Paras 12, 13]

Impugned orders set aside for failure to record/hold the directed personal hearing and for non-consideration of objections; matter remitted for personal hearing and de novo exercise with fresh orders within stipulated time.

Final Conclusion: The writ petitions are disposed: the earlier final order on limitation governs and the impugned orders of 12.03.2021 are set aside solely for procedural defects (absence of recorded personal hearing as earlier directed and non-consideration of objections), with direction for personal hearing by consent and de novo reassessment within the time fixed.

Bar on civil courts' jurisdiction under Section 34 of the SARFAESI Act - particulars of fraud in pleading under Order VI Rule 4 CPC - maintainability of suit challenging assignment amid SARFAESI/SARFAESI proceedings - jurisdiction of the Debt Recovery Tribunal to adjudicate disputes under the SARFAESI Act - challenge to assignment on the ground of discharge of debt under the IBC resolution plan - abuse of process by clever drafting to circumvent statutory bar

Bar on civil courts' jurisdiction under Section 34 of the SARFAESI Act - maintainability of suit challenging assignment amid SARFAESI/SARFAESI proceedings - Whether the civil suit challenging the assignment and possession notice was maintainable in view of the statutory bar under Section 34 of the SARFAESI Act. - HELD THAT: - The Court held that the suit was barred by the statutory exclusion of civil courts under Section 34 of the SARFAESI Act and therefore not maintainable. The plaintiff sought to bring the suit despite existing SARFAESI proceedings initiated by the assignee under Section 13; such disputes fall within the jurisdictional scheme of the SARFAESI Act and the DRT. The Court observed that allowing a civil suit in the face of the statutory bar would circumvent the legislatively prescribed forum and constitute an abuse of process. Consequently, the courts below were correct in rejecting the plaint and dismissing the suit as not maintainable. [Paras 8, 9]

Suit dismissed as not maintainable due to the bar under Section 34 of the SARFAESI Act.

Particulars of fraud in pleading under Order VI Rule 4 CPC - abuse of process by clever drafting to circumvent statutory bar - Whether the plaint's allegation of 'fraud' was pleaded with requisite particulars so as to take the case out of the statutory bar. - HELD THAT: - The Court analysed the plaint and found that allegations of 'fraud' were made only by using the words 'fraud'/'fraudulent' without setting out specific material particulars as required by settled law and Order VI Rule 4 CPC. Reliance was placed on established precedents that general or conclusory assertions of fraud are insufficient; particulars must be stated and evidence confined to those particulars. The use of the term 'fraud' here appeared to be a device to evade the statutory bar, which the Court condemned as an abuse of process. Accordingly, the alleged fraud did not remove the suit from the statutory exclusion of civil courts. [Paras 7, 8]

Allegations of fraud in the plaint are insufficiently particularized and do not render the suit maintainable.

Jurisdiction of the Debt Recovery Tribunal to adjudicate disputes under the SARFAESI Act - challenge to assignment on the ground of discharge of debt under the IBC resolution plan - Whether the questions concerning (a) whether the assignee is a secured creditor as regards the guarantor and (b) whether any amount is due from the guarantor after the IBC resolution and discharge, were to be decided by the civil court or left open for the DRT. - HELD THAT: - The Court declined to decide these factual and legal questions on merits. It held that such disputes fall within the adjudicatory domain of the DRT under the SARFAESI Act and may be raised by the plaintiff by making an application under Section 17 of the SARFAESI Act. The Court expressly left undecided (a) whether the assignee is a secured creditor vis-a -vis the appellant and (b) whether any enforceable debt remains against the appellant after the approved IBC resolution plan, directing that these matters be considered by the DRT on merits if raised within the time permitted. The Court made no expression of opinion on the merits of these contentions. [Paras 8, 9]

These issues were not adjudicated on merits and are to be considered afresh by the DRT in proceedings under the SARFAESI Act if the plaintiff files an application within the time directed.

Final Conclusion: The appeal is dismissed. The civil suit was rightly held not maintainable because the plaint's conclusory allegations of fraud lacked requisite particulars and did not overcome the statutory bar on civil courts under Section 34 of the SARFAESI Act. The appellant remains at liberty to raise the substantive defenses (including whether the assignee is a secured creditor and whether any debt remains post-IBC resolution) before the DRT by filing appropriate proceedings within the time directed; the Court has not expressed any view on the merits of those defenses.

Compromise/settlement in criminal proceedings - Compounding of offence under Section 147 of the Negotiable Instruments Act, 1881 read with Section 320(6) Cr.P.C. - Revisional jurisdiction of the High Court under Section 401 Cr.P.C. - Dishonour of cheque as a compensatory offence under Section 138 Negotiable Instruments Act - Damodar S. Prabhu principle - deposit to State/UT Legal Services Authority (15%) as condition for setting aside conviction

Compromise/settlement in criminal proceedings - Dishonour of cheque as a compensatory offence under Section 138 Negotiable Instruments Act - Revisional jurisdiction of the High Court under Section 401 Cr.P.C. - Validity and effect of the settlement arrived at before the Mediation and Conciliation Centre and whether the convictions under Section 138 can be set aside in view of the compromise. - HELD THAT: - The Court found that the parties voluntarily and bona fide arrived at a settlement through the Mediation Centre, payment of the amounts due in respect of the dishonoured cheques was made and an additional composite payment was accepted by the complainant. The compromise was recorded as having been arrived at without pressure, undue influence or misrepresentation and the complainant confirmed receipt and no objection to setting aside the convictions. Given the compensatory character of the offence under Section 138 and the Court's revisional power under Section 401 Cr.P.C., the Court held that a genuine and valid compromise serves as a proper basis for quashing convictions and sentences in the interest of maintaining peace between parties.

The convictions and sentences dated 21.07.2017 and the appellate orders dated 08.01.2019 (and 18.01.2019 where applicable) in the three connected matters are set aside and the petitioners are acquitted on the basis of the valid compromise.

Damodar S. Prabhu principle - deposit to State/UT Legal Services Authority (15%) as condition for setting aside conviction - Compounding of offence under Section 147 of the Negotiable Instruments Act, 1881 read with Section 320(6) Cr.P.C. - Whether the acquittal should be subject to the condition of depositing the prescribed percentage to the State/UT Legal Services Authority and the consequences of non-compliance. - HELD THAT: - Relying on the principle in Damodar S. Prabhu, the Court directed that the petitioners deposit 15% of the total cheque amounts with the U.T. Legal Services Authority as a condition precedent to the acquittal being effective. The Court recorded that the State has no role in the compromise and that compounding under the Negotiable Instruments Act and the settled law permits conditioning the quashing of conviction on such deposit. The Court further specified temporal compliance - deposit within two weeks from receipt of certified copy - and made clear that failure to comply would render the revision petitions ineffective (deemed dismissed).

Acquittal granted subject to deposit of the directed amount (15% of the aggregate cheque amount) with the U.T. Legal Services Authority within two weeks; failure to deposit will render the order ineffective and the petitions deemed dismissed.

Final Conclusion: The High Court allowed the three connected criminal revision petitions, set aside the convictions and sentences under Section 138 of the Negotiable Instruments Act in view of a genuine mediated settlement, and ordered acquittal subject to deposit of 15% of the aggregate cheque amount with the U.T. Legal Services Authority within two weeks, failing which the orders would stand ineffective.

Rebuttable presumption under Sections 118 and 139 of the Negotiable Instruments Act - Liability for dishonour of a security cheque under Section 138 of the Negotiable Instruments Act - Burden of proof to rebut statutory presumption - Assessment of credibility of defence evidence

Rebuttable presumption under Sections 118 and 139 of the Negotiable Instruments Act - Burden of proof to rebut statutory presumption - Assessment of credibility of defence evidence - Liability for dishonour of a security cheque under Section 138 of the Negotiable Instruments Act - Whether the conviction under Section 138 was sustainable where the drawer alleged the cheque was a security cheque and was misused by a third party, and whether the statutory presumption was rebutted. - HELD THAT: - The Court held that the admitted signature on the cheque attracts the statutory presumption under Sections 118 and 139 that the cheque was issued in discharge of a debt or liability. The presumption is rebuttable, but the petitioner failed to produce any documentary proof of the alleged loan from the third party (Babla) or of its repayment, and did not establish that the cheque had been returned. The defence evidence (DW1) was inconsistent with the petitioner's statement under Section 313 Cr.P.C. (discrepancy as to number of blank cheques) and was therefore found not to inspire confidence. Both lower courts had recorded that the defence appeared to be an afterthought and noted absence of any complaint regarding misuse of the cheque. The Court further applied the coordinate-bench authority cited (Shalini Enterprises v. Indiabulls Financial Services Limited) holding that even a security cheque can form the basis of liability under Section 138, since a security cheque is part of the commercial process and may be used to discharge the drawer's liability. No contrary precedent was shown. In consequence, the petitioner did not discharge the burden to rebut the statutory presumption and the conviction and sentence were upheld.

The defence failed to rebut the statutory presumption; conviction under Section 138 and the sentence recorded by the courts below are affirmed.

Final Conclusion: Criminal revision dismissed; conviction under Section 138 of the Negotiable Instruments Act and the sentence confirmed by the courts below are maintained.

Order VII Rule 11 CPC - rejection of plaint - cause of action - benami transaction - summary proceedings versus trial on merits - locus standi - injunctive relief

Order VII Rule 11 CPC - rejection of plaint - cause of action - benami transaction - summary proceedings versus trial on merits - Whether the application under Order VII Rule 11 CPC to reject the plaint was rightly dismissed and whether the plaint discloses a cause of action notwithstanding the defendant's claim of title and alleged benami transaction. - HELD THAT: - The Court examined only the averments in the plaint and the documents filed therewith and applied the settled principle that an application under Order VII Rule 11 CPC is a summary proceeding limited to the plaint-record. The 1st respondent pleaded that he purchased the suit property out of his own funds and that the property stood in the petitioner's name as a benami transaction for the benefit of their children; he also alleged attempts by the petitioner to alienate the property and that he had issued a stop-notice to the Sub-Registrar. Those averments, read together, disclose a triable cause of action for a mandatory injunction and for restraint on registration. The factual question whether the transaction is benami and who furnished the purchase consideration involves appreciation of oral and documentary evidence and cannot be finally adjudicated in a Rule 11 summary inquiry. The trial court therefore correctly declined to reject the plaint, having regard to the limited scope of Order VII Rule 11 and the need to decide contested title/benami contentions on evidence at trial. [Paras 4, 10, 12, 13, 14]

The dismissal of I.A. No. 846 of 2015 under Order VII Rule 11 CPC is upheld; the plaint discloses a cause of action and the benami issue is to be decided at trial.

Final Conclusion: Civil Revision Petition dismissed; the trial court's order refusing to reject the plaint is affirmed and the plaint shall proceed to trial.

Presumption under Section 139 of the Negotiable Instruments Act - offence under Section 138 of the Negotiable Instruments Act - rebuttal of statutory presumption and burden of proof - admissibility of cheque despite use of different languages - failure to avail opportunity to lead defence - refusal to remand

Offence under Section 138 of the Negotiable Instruments Act - admissibility of cheque despite use of different languages - Whether the conviction under Section 138 NI Act was sustainable having regard to the cheque, its signature and alleged material alterations - HELD THAT: - The Court found that the cheque belonged to the accused and bore his signature, a fact which was undisputed. The endorsement by the banker about alleged material alterations was not substantiated: the record showed that the name was written in English while other figures were in Kannada, and there is no legal bar to cheques being written in different languages. The Court relied on admissibility under the provisions permitting such writing and therefore treated the cheque and its signature as properly proved. On this basis the trial and appellate courts' findings convicting the accused under Section 138 NI Act were held to be supportable by the evidence. [Paras 10]

Conviction under Section 138 NI Act upheld as the cheque and signature were proved and alleged alterations were not substantiated.

Presumption under Section 139 of the Negotiable Instruments Act - rebuttal of statutory presumption and burden of proof - Whether the statutory presumption in favour of the complainant under Section 139 NI Act was attracted and whether it was successfully rebutted by the accused - HELD THAT: - The Court observed that the accused, in insolvency proceedings (Ex. P15), had admitted issuance of the cheque. Given proof of the cheque and the admitted signature, the mandatory presumption under Section 139 arose in favour of the complainant. The accused did not enter the witness box, did not present documentary evidence, did not reply to the legal notice and did not raise the present defence at trial or on appeal; his belated contention that the cheque was for a lesser amount was not put to evidence. Consequently the accused failed to discharge the burden to rebut the statutory presumption, and both lower courts rightly drew the presumption in favour of the complainant. [Paras 11, 13]

Presumption under Section 139 NI Act attracted and not rebutted; finding for complainant affirmed.

Failure to avail opportunity to lead defence - refusal to remand - Whether the matter should be remanded to the trial court to permit the accused to lead defence evidence raised for the first time in revision - HELD THAT: - The Court noted that the accused had ample opportunity before the trial court but did not lead evidence or raise the present defence in his Section 313 statement or before the appellate court. A new defence raised for the first time in revision did not warrant remand. There were no fresh grounds justifying remand, and the accused's conduct - including failure to reply to the legal notice and failure to lead evidence - militated against granting further opportunity. Accordingly the Court refused to remand the matter for production of defence evidence. [Paras 12]

Request for remand to enable accused to lead defence rejected.

Final Conclusion: Concurrent findings of the trial and appellate courts convicting the accused under Section 138 NI Act were affirmed: the cheque and signature were proved, the statutory presumption under Section 139 applied and was not rebutted, and the revision petition was accordingly rejected; remand to permit fresh defence evidence was refused.

Setting aside judgments and remand - remand for verification of signature under Section 45 of the Indian Evidence Act - failure to prosecute expert/commission application - opportunity to deposit commissioner's fee and name expert - direction for expeditious disposal

Setting aside judgments and remand - failure to prosecute expert/commission application - The judgments of the appellate court and the trial court were set aside and the matters remanded for further proceedings. - HELD THAT: - The High Court found that both the trial court and the appellate court had erred in the manner the applications relating to proof of signature under the Indian Evidence Act were handled. Although applications under Section 45 (and as recorded, Section 43) had been filed, the complainant thereafter did not complete the necessary steps by naming an expert or depositing the commissioner's fee. The appellate court reversed the trial court's conviction on the ground that execution of the cheques was not proved, but the High Court held that instead of final acquittal the proper course was to direct completion of the expert/commission process so that the question of signature could be verified. For these reasons the High Court set aside both the conviction and the appellate acquittal and remanded the matters to the trial court for the limited purpose of permitting the complainant to complete the expert/commission procedure. [Paras 13, 14]

Both the appellate and trial court orders are set aside and the matters are remanded to the trial court for completion of the signature verification process.

Opportunity to deposit commissioner's fee and name expert - remand for verification of signature under Section 45 of the Indian Evidence Act - direction for expeditious disposal - Complainant to be given opportunity to name the expert and deposit commissioner's fee within a limited time and trial court to proceed expeditiously. - HELD THAT: - The High Court directed that the complainant shall, within seven days from the first hearing date before the trial court, name the expert/Commissioner for signature verification and deposit the required commissioner's fee and incidental expenses. The parties were directed to appear voluntarily before the trial court on the specified date, and the trial court was directed to dispose of the matters as expeditiously as possible. This remedial direction was given in lieu of permitting the appellate court's acquittal to stand, so that the essential evidentiary step concerning signatures may be undertaken and the criminal complaints adjudicated on proper evidence. [Paras 14]

Complainant shall name the expert and deposit commissioner's fee within seven days from the first hearing date; parties to appear on 10 November 2021 and trial court to dispose of the matters expeditiously.

Final Conclusion: Both the conviction and the appellate acquittal are set aside and the matters are remanded to the trial court with directions to permit the complainant to complete the expert/commission procedure (by naming the expert and depositing the commissioner's fee within the stipulated time), to proceed with verification of signatures under the Indian Evidence Act and to dispose of the matters expeditiously; parties to appear on the date indicated by the High Court.