TaxTMI Updates e-Newsletter
Dec 08,2022

Detention and seizure of goods under Section 129 of the U.P.G.S.T. Act, 2017 - Service of FORM GST MOV-06 (detention order) - Liability for penalty under Clause (b) of Sub section (1) of Section 129 - Appeal remedy under Section 107 of the U.P.G.S.T. and C.G.S.T. Act, 2017

Service of FORM GST MOV-06 (detention order) - Validity of challenge to non service of FORM GST MOV 06 - HELD THAT: - The writ court recorded that written instructions from the respondent-department state that a copy of FORM GST MOV 06 was served upon the custodian/driver and that a copy of those written instructions was placed on record and supplied to the petitioner's counsel. The Court also observed that the petitioner claimed ownership of the goods but was not present at the time of interception and therefore could not contend that the detention order was not served on the custodian/driver. The matter of service was therefore not entertained in the writ jurisdiction as a ground to set aside the detention in the present petition.

Petitioner's objection to non service of FORM GST MOV 06 was not accepted in the writ petition; the contention was not allowed to succeed.

Detention and seizure of goods under Section 129 of the U.P.G.S.T. Act, 2017 - Liability for penalty under Clause (b) of Sub section (1) of Section 129 - Challenge to detention of goods and imposition of penalty under Section 129 on basis of alleged discrepancy in signatures and ownership - HELD THAT: - The petition questioned the legality of detention/seizure under Section 129, alleging arbitrary detention based on discrepancies in signatures between registration records and transport documents. The revenue submitted that proceedings under Section 129(3) concluded that the petitioner was not the owner of the goods and that penalty liability was imposed under Section 129(1)(b). The High Court noted that such factual determinations and the correctness of the conclusion on ownership and penalty are matters amenable to the statutory appellate process and did not undertake merit adjudication of those contentions in the writ petition.

Writ challenge to the detention and penalty on merits was not sustained by the High Court; factual disputes concerning ownership and penalty were left to the appellate process.

Appeal remedy under Section 107 of the U.P.G.S.T. and C.G.S.T. Act, 2017 - Availability and adequacy of statutory remedy by way of appeal under Section 107 - HELD THAT: - The Court observed that the proper remedy against an order passed under Section 129 is to prefer an appeal under Section 107 of the U.P.G.S.T. and C.G.S.T. Act, 2017. The Court recorded that all factual issues raised in the petition could be agitated before the appellate authority, indicating that the statutory appellate remedy was efficacious and appropriate for resolving disputes regarding detention, ownership and penalty.

Petitioner must pursue the statutory appeal under Section 107; writ jurisdiction was not exercised to decide the disputed factual and penal aspects.

Final Conclusion: The writ petition was dismissed as the Court declined to interfere with the detention and penalty proceedings under Section 129 on the facts; the petitioner was directed to pursue remedy by way of appeal under Section 107 before the appellate authority where all factual contentions can be agitated.

Condonation of delay - intention to evade payment of duty - bona fide error - e-way bill cancellation and re-generation - remand for fresh consideration

Condonation of delay - Application to condone delay in filing the appeal was allowed. - HELD THAT: - The Court examined the affidavit in support of the application for condonation of delay and found the reasons assigned to be satisfactory. In consequence, the delay of 68 days in filing the appeal was condoned and the application I.A. No.CAN 1 of 2022 was allowed. The Court made no order as to costs in respect of the condonation application. [Paras 3]

Delay in filing the appeal is condoned and I.A. No.CAN 1 of 2022 is allowed; no order as to costs.

Intention to evade payment of duty - bona fide error - e-way bill cancellation and re-generation - remand for fresh consideration - Whether the appellate order imposing 200% penalty should be upheld or the matter remitted for fresh consideration on the question of willful intention to evade payment of duty. - HELD THAT: - The Court identified the narrow determinative question as whether there was any intention on the part of the appellant to evade payment of duty, having regard to facts that part A of the e-way bill was generated on 22nd March, 2022, cancelled, and a fresh part A generated on 24th March, 2022 while part B carried at interception related to the cancelled part A. The Court observed that, on a prima facie view, such conduct does not necessarily indicate an intention to evade duty and could be a bona fide error, particularly where a fresh part B was generated within two hours of detention. The appellate authority's lengthy exercise, including extensive citation of decisions, failed to adequately focus on or assess the appellant's bona fides. Given these peculiar facts and the appellate authority's omission to properly consider whether there was wilful intention to evade duty, the Court set aside the appellate order and remanded the matter for fresh consideration limited to that factual issue. The appellant was permitted to place all materials relevant to establishing bona fides and was directed not to burden the appellate authority with unnecessary citations of other court decisions in the factual inquiry. [Paras 6, 8, 10, 11, 12]

Order dated 5th June, 2022 imposing penalty is set aside and the matter is remanded to the appellate authority for fresh consideration on whether there was any wilful intention to evade payment of duty; appellant may place relevant materials.

Final Conclusion: The application for condonation of delay is allowed. The appellate order imposing penalty is set aside and the matter is remitted to the appellate authority to decide, on fresh consideration of the facts, whether the appellant wilfully intended to evade payment of duty; the appellant may place materials to establish bona fides and there shall be no order as to costs.

Detention, seizure and release under Section 129 - Penalty determination procedure under Section 129(3) and hearing under Section 129(4) - e Way bill expiry during transit - Requirement of fraudulent intent or evasion to justify seizure

E Way bill expiry during transit - Detention, seizure and release under Section 129 - Validity of detention and seizure of goods and conveyance where the e Way bill expired during transit and no evasion or fraudulent intent was established. - HELD THAT: - The Court examined Section 129 and the factual material and found that the e Way bill had expired during transit. The deten tion and seizure in the present case were founded solely on the expiration of the e Way bill. The Court relied on precedents where seizure was held impermissible when expiry of the e Way bill during transit was not accompanied by evidence of fraudulent intent or tax evasion. Applying that principle, and having found no material establishing fraudulent intention or evasion by the petitioner, the Court held that expiry of the e Way bill during transit, without more, did not justify detention and seizure of the goods and vehicle under Section 129. [Paras 7, 8, 9]

Detention and seizure of the goods and conveyance on the sole ground of expiry of the e Way bill during transit was not permissible and therefore unsustainable.

Penalty determination procedure under Section 129(3) and hearing under Section 129(4) - Requirement of fraudulent intent or evasion to justify penalty and continued detention - Validity of the notice and order demanding tax and penalty under Section 129(3) when detention and seizure are unsustainable. - HELD THAT: - Section 129 contemplates issuance of notice specifying penalty within seven days of detention and passing of an order thereafter, subject to opportunity of being heard. Because the underlying detention and seizure were held to be unjustified (being based only on e Way bill expiry without proof of evasion or fraud), the consequential notice and order demanding tax and penalty under Section 129(3) could not stand. The Court therefore quashed the notice and the order demanding tax and penalty. [Paras 6, 10]

The notice under Section 129(3) and the consequential order demanding tax and penalty were quashed as they proceeded from an unsustainable detention and seizure.

Release of goods and conveyance - Appropriate judicial relief by writ of certiorari and mandamus - Appropriate remedy for release of the seized goods and conveyance and final relief by writ. - HELD THAT: - Having quashed the detention, seizure, notice and penalty order, the Court granted relief by allowing the petition and setting aside the impugned orders. The Court ordered release by quashing the detention order dated 19.10.2022, the notice dated 19.10.2022 and the penalty demand order dated 04.11.2022, thereby removing the legal basis for continued retention of the goods and vehicle. [Paras 10]

Petition allowed; impugned detention order, notice and penalty demand order quashed and set aside, entitling the petitioner to release of the goods and conveyance.

Final Conclusion: The writ petition was allowed: the detention and seizure founded solely on expiry of the e Way bill during transit, without evidence of fraud or tax evasion, was held impermissible; the notice under Section 129(3) and the order demanding tax and penalty were quashed; and the orders of detention and demand were set aside, entitling the petitioner to release of the goods and vehicle.

Provisional attachment - continuation of provisional attachment beyond one year - interpretation of Section 83(2) - power to issue fresh provisional attachment after expiry of earlier order - imposition of costs against the department - judicial discretion in awarding costs

Imposition of costs against the department - judicial discretion in awarding costs - Whether the learned Single Bench was justified in imposing costs of Rs.5,00,000 on the Department in favour of each of the three writ petitioners. - HELD THAT: - The Court examined paragraph 11 of the Single Bench order which had reprimanded the Revenue and imposed substantial costs on the basis of the authorities' conduct in maintaining an apparently ineffective provisional attachment for several months. Noting that the Single Bench had concurrently decided a substantial question of law in favour of the Revenue, the Division Bench held that imposition of costs of the magnitude awarded was not called for in the facts and circumstances. The Court observed that while imposition of costs is a matter of judicial discretion and the Court is not ordinarily required to hear the Department before imposing costs, the existence of a fine question of law (then pending in separate appeals) and the mixed outcome meant the strict imposition of the stated costs should be vacated. Consequently the observations underpinning the cost order and the costs themselves were deleted and vacated. [Paras 3, 5, 6]

The portion of the Single Bench order imposing costs of Rs.5,00,000 on the Department in favour of each assessee is deleted and vacated.

Provisional attachment - continuation of provisional attachment beyond one year - interpretation of Section 83(2) - power to issue fresh provisional attachment after expiry of earlier order - Disposition of the question whether the attachment could lawfully continue after expiry of one year and whether a fresh provisional attachment may be issued was not finally decided by this Division Bench and is to be adjudicated in the assessees' separate appeals. - HELD THAT: - The Division Bench recorded the Single Bench's legal conclusion that Section 83(2) permits provisional attachment to continue for one year and that nothing in the provision precludes issuance of a fresh order after expiry if the authority, after complying with formalities, is of the view that further attachment is necessary. However, the Division Bench declined to decide the correctness of that conclusion in these intra Court appeals and directed that the assessees' appeals (filed against the same common order) be heard and decided separately on that point. The Court expressly permitted the assessees to canvass the question whether the attachment could have continued despite the cessation of legal effect after one year. [Paras 2, 6, 7]

The substantive question concerning continuation of provisional attachment after one year and validity of any fresh order is left open for determination in the assessees' separate appeals; it is not finally decided in these appeals.

Final Conclusion: The appeals by the Revenue are allowed insofar as the order of the Single Bench imposing costs of Rs.5,00,000 upon the Department in favour of each assessee is deleted and vacated; the substantive legal questions concerning the effect of Section 83(2) and continuation or re issuance of provisional attachment after one year are reserved for determination in the assessees' separate appeals.

Territorial jurisdiction - cause of action - maintainability of writ petition - forum conveniens - exclusion of period for limitation

Territorial jurisdiction - cause of action - maintainability of writ petition - forum conveniens - exclusion of period for limitation - Maintainability of the writ petition before the Calcutta High Court when part of the cause of action related to a bank recovery in West Bengal but the assessee/party was registered and the project and proceedings were in Bihar. - HELD THAT: - The Court held that although recovery from a cash credit account in a bank located in West Bengal could be a relevant factor in determining whether part of the cause of action arose within this State, it was not decisive in the given facts. The appellants were registered dealers in Bihar, the project was executed in Bihar and the proceedings were instituted by the jurisdictional officer at Patna. In those circumstances the appropriate forum to canvass all issues was in the State of Bihar. Consequently the writ petition was not maintainable before the Calcutta High Court. The Court nevertheless provided procedural relief by granting liberty to approach the appropriate forum in Bihar and directed that the period during which the writ petition was pending until receipt of the server copy of the order shall be excluded for computation of limitation. [Paras 2, 3, 4]

Writ petition dismissed for want of territorial jurisdiction; liberty granted to file before the appropriate forum in Bihar and the pendency period excluded for limitation.

Final Conclusion: The intra-Court appeal is dismissed for lack of territorial jurisdiction; the appellants may approach the competent forum in Bihar and the period during which the Calcutta High Court writ petition remained pending until receipt of the server copy of this order is excluded for limitation.

Refund of unutilised Input Tax Credit - inverted duty structure - opportunity of hearing - procedure under Rule 92 of the Central Goods and Services Tax Rules, 2017 - notice in Form GST RFD-08

Opportunity of hearing - procedure under Rule 92 of the Central Goods and Services Tax Rules, 2017 - Whether the impugned refund rejection order is vitiated for lack of notice and denial of opportunity to the claimants under Rule 92(3) - HELD THAT: - Rule 92(3) requires that where the proper officer is satisfied that refund is not payable either in part or in full, a notice in form GST RFD-08 must be issued and the applicant given an opportunity to reply within 15 days; the proviso bars rejection without giving an opportunity of being heard. The petitioners asserted, and the uncontroverted material shows, that the notice was neither received nor available on the GSTN portal and that they had informed the authorities before the impugned order was passed. Proceeding on the basis that no notice was served or made available, the court found that the statutory opportunity to demonstrate entitlement to refund was impaired and the requirements of Rule 92(3) were not complied with in fact or procedure. [Paras 8]

Impugned order is quashed insofar as it rejects the refund claim without affording the opportunity mandated by Rule 92(3).

Refund of unutilised Input Tax Credit - procedure under Rule 92 of the Central Goods and Services Tax Rules, 2017 - notice in Form GST RFD-08 - Whether the matter should be remitted for fresh consideration and the scope of further proceedings - HELD THAT: - Because the order was set aside for procedural non-compliance and not on the merits, the petitioners' refund application was restored for fresh adjudication. The authority is directed to follow the statutory methodology under Rule 92-include issuing the requisite notice and affording the petitioners the opportunity to reply-before deciding entitlement on merits. The court permitted completion of the further procedure within a specified timeframe in view of the delay attributable to the procedural lapse, while expressly reserving the decision on merits to the authority. [Paras 9, 11, 12]

Proceedings remitted: the application is restored and respondents directed to follow Rule 92 procedure and decide the refund claim on merits within the time fixed by the court.

Final Conclusion: The High Court quashed the order rejecting the refund claim for failure to issue the notice and afford opportunity under Rule 92(3), restored the petitioners' refund application for fresh consideration, and directed the authorities to follow the Rule 92 procedure (including issuance of Form GST RFD-08 and hearing) and decide the claim on merits within the timeframe specified by the court; the quashal was on procedural grounds only.

Reopening of assessment beyond four years-jurisdictional requirement of failure to disclose fully and truly all material facts - reasons recorded under Section 148-must disclose Assessing Officer's opinion and material link to evidence - distinction between non-disclosure of material facts and wrong claim despite full disclosure

Reopening of assessment beyond four years-jurisdictional requirement of failure to disclose fully and truly all material facts - reasons recorded under Section 148-must disclose Assessing Officer's opinion - Whether the notice under Section 148 issued after the expiry of four years is sustainable where the reasons furnished do not allege failure to disclose fully and truly all material facts - HELD THAT: - The Court held that an allegation of failure to disclose fully and truly all material facts necessary for assessment is an essential jurisdictional parameter to sustain a notice issued after the four-year period. Reasons recorded by the Assessing Officer must manifest his mind and disclose, in black and white, the fact or material not disclosed by the assessee and the link between that omission and the proposed reopening. Absent such allegation or a clear statement demonstrating compliance with this jurisdictional requirement, the notice cannot ordinarily be sustained. Reliance was placed on precedents that require reasons to be self-explanatory and not supplemented by later affidavits or submissions. Applying that principle, the reasons furnished in this case did not contain the requisite allegation and thus failed the jurisdictional test. [Paras 7, 9, 11, 12, 25]

The notice under Section 148 issued after four years was quashed because the reasons did not allege any failure to disclose fully and truly all material facts.

Distinction between non-disclosure of material facts and wrong claim despite full disclosure - assessment cannot be reopened beyond jurisdictional period where material facts were fully disclosed - Whether, on the facts, the petitioner had failed to disclose fully and truly all material facts relating to the e-auctioned amount, thereby justifying reopening after four years - HELD THAT: - On the material placed before the Court, the petitioner responded to statutory enquiries and furnished detailed information including the date of e-auction, quantity e-auctioned, that no sale proceeds were received in the relevant year, extracts of the Monitoring Committee's accounts, and the fact that the amount was thereafter offered and taxed in the subsequent year. The Court found these disclosures to be full and true. The Revenue's contention that the amount should have been offered on an accrual basis was a debatable question of correctness of tax treatment, not evidence of concealment. Given the full disclosures, the statutory condition for reopening after four years was not satisfied and the reopening could not be sustained. [Paras 17, 18, 21, 23, 24]

On the facts, the petitioner had fully and truly disclosed all material facts; therefore reopening after four years was not justified.

Final Conclusion: The petition succeeds. The Section 148 notice dated 29.03.2019 and the order rejecting objections dated 07.12.2019, and the reassessment proceedings for AY 2012-13, are quashed as beyond jurisdiction because the reasons do not allege failure to disclose material facts and, on the record, the assessee had fully and truly disclosed the relevant material facts.

Penalty under section 271(1)(c) - inaccurate particulars of income - tonnage tax scheme - disallowance under section 14A - mere erroneous claim not attracting penalty - bonafide error / inadvertent mistake - disclosure in tax audit report

Penalty under section 271(1)(c) - inaccurate particulars of income - disallowance under section 14A - tonnage tax scheme - Whether penalty under section 271(1)(c) is imposable for disallowance under section 14A where the assessee is governed by the Tonnage Tax Scheme - HELD THAT: - The Tribunal held that where the assessee is covered by the Tonnage Tax Scheme any disallowance under section 14A would be rendered tax-neutral because such disallowance would be allowable while computing income under the tonnage regime. Applying the principle in Reliance Petroproducts (that a claim merely being unsustainable does not amount to furnishing inaccurate particulars), and having regard to disclosure of relevant details, absence of any finding of deliberate concealment and earlier judicial treatment of the assessee's tonnage entitlement, the Tribunal concurred with the CIT(A) that penalty under section 271(1)(c) was not attracted on account of the section 14A disallowance. [Paras 4, 6, 8, 9]

Penalty deleted as not imposable in respect of the section 14A disallowance.

Penalty under section 271(1)(c) - bonafide error / inadvertent mistake - mere erroneous claim not attracting penalty - disclosure in tax audit report - Whether penalty under section 271(1)(c) is imposable for (a) provision for gratuity disallowance, (b) difference between interest in books and Form 26AS, and (c) misclassification of capital gain - HELD THAT: - The Tribunal accepted the CIT(A)'s factual findings that (a) the gratuity claim was disclosed in the tax audit report and similar penal charge for the preceding year had been deleted, (b) the difference in interest arose from differing accounting/calculation methods and deposits were reflected in the books, and (c) the long-term/short-term capital gain misclassification was an accountant's error rectified during assessment. Relying on authorities that an erroneous claim simplicitor or a bona fide mistake does not attract section 271(1)(c) unless there is deliberate misrepresentation or suppression, the Tribunal found no material to establish intentional furnishing of inaccurate particulars and upheld deletion of penalty on these counts. [Paras 6, 10, 11, 12]

Penalty deleted as not imposable in respect of gratuity provision, interest difference, and capital gain classification.

Final Conclusion: On the facts and in law the Tribunal upheld the CIT(A)'s deletion of the penalty under section 271(1)(c) for AY 2013-14, holding that the impugned additions/disallowances were either tax-neutral under the Tonnage Tax Scheme, adequately disclosed, or attributable to bona fide errors and therefore did not constitute furnishing of inaccurate particulars.

Unexplained cash credit - onus of proof under section 68 - identity, genuineness and creditworthiness of creditors/partners - disallowance of interest as business expenditure - source of source principle - capital contribution by partners versus firm's own undisclosed income

Unexplained cash credit - onus of proof under section 68 - identity, genuineness and creditworthiness of creditors/partners - capital contribution by partners versus firm's own undisclosed income - source of source principle - Deletion of addition made by AO treating capital introduced by three partners as unexplained cash credit under section 68. - HELD THAT: - The Tribunal found that the assessee furnished before the CIT(A) the ledger accounts of each partner, copies of the partners' income-tax returns, bank statements showing transfers to the firm and confirmations from the partners including PAN details. The CIT(A) examined those records and noted absence of cash deposits prior to the bank transfers and concluded that the assessee had discharged the onus cast under section 68. The Tribunal applied precedents holding that where a partner's books reflect the contribution and the partner confirms the same, the onus is discharged and any further inquiry into the creditworthiness of the partner should be pursued at the partner's end. Having considered the material placed before the CIT(A) and the appellate finding that primary evidences were furnished and examined, the Tribunal found no infirmity in the deletion of the addition. [Paras 6]

The addition of capital introduced by the three partners as unexplained cash credit under section 68 is deleted.

Disallowance of interest as business expenditure - capital contribution by partners versus firm's own undisclosed income - onus of proof under section 68 - Deletion of disallowance of interest expenditure treated as attributable to unexplained cash credit. - HELD THAT: - The Assessing Officer disallowed interest on the ground that the underlying capital was unexplained. Because the Tribunal upheld the CIT(A)'s finding that the capital contributions were adequately evidenced and the onus under section 68 was discharged, the basis for disallowing the interest (i.e., that the funds were unexplained income of the firm) fell away. Consequently, the disallowance under sections 37(1) read with 36(1)(iii) was not sustained. [Paras 6]

The disallowance of interest as business expenditure is deleted.

Final Conclusion: The appeal by the Revenue is dismissed; the Tribunal upholds the CIT(A)'s deletion of the additions under section 68 and the consequential disallowance of interest for Assessment Year 2013-14.

Validity of assessment under section 153C - Incriminating document - Part performance and transfer under section 2(47)(v) read with section 53A - Year of chargeability of capital gains - Valuation for full value of consideration - guideline value vs developer's estimated cost - Condonation of delay

Condonation of delay - Delay in filing cross objections - HELD THAT: - The assessee filed cross objections 213 days late and explained that it had bona fide belief that the issues could be raised under Rule 27 before the Tribunal; on being advised during professional consultation the cross objections were filed and an application for condonation of delay was made. Following the principles in Mst. Katiji and considering the explanation, the Tribunal found sufficient and reasonable cause to condone the delay and allowed the belated cross objections. [Paras 7]

Delay of 213 days in filing cross objections condoned.

Validity of assessment under section 153C - Incriminating document - Validity of initiation of proceedings under section 153C and whether the Joint Development Agreement (JDA) seized is an incriminating document - HELD THAT: - The Tribunal upheld the CIT(A)'s conclusion that proceedings under section 153C were valid even though the search warrant was in the name of another entity, because the seized JDA "pertains to" the assessee and therefore falls within the scope of section 153C. The Tribunal observed that section 153C requires the Assessing Officer to be satisfied that seized books or documents have a bearing on determination of the other person's income for the relevant years; the statute does not mandate that seized material be described by the word 'incriminating' and judicial usage of that expression depends on facts. On the facts, the JDA directly bore on the assessment of capital gains for AY 2010-11 and, but for the seizure, the income would not have been taxed in the correct year; accordingly the JDA was held to be material permitting proceedings under section 153C. [Paras 14, 19, 20]

Proceedings under section 153C were valid and the JDA seized was a document having bearing on determination of the assessee's income and hence actionable under section 153C.

Part performance and transfer under section 2(47)(v) read with section 53A - Year of chargeability of capital gains - Whether the date of the JDA (11.12.2009 / F.Y. 2009-10) is the year of transfer for computing capital gains - HELD THAT: - The Tribunal analysed the terms of the JDA and the Power of Attorney and found that the combined effect of relevant clauses (permission to construct, delivery of possession, registered irrevocable power of attorney, entitlement of developer to hold/sell/mortgage the developer's share, handing over original title deeds and entitlement to raise loans) amounted to absolute possession and transfer contemplated by section 2(47)(v) read with section 53A. The developer had performed acts in furtherance of the contract (application for plan sanction) during F.Y.2009-10. Distinguishing agreements where only a license to develop was granted, the Tribunal held that on these facts the conditions for part performance and transfer were satisfied and capital gains arose in F.Y.2009-10 (AY 2010-11). The Tribunal therefore upheld the AO and CIT(A)'s view that the year of entry into the JDA is the year of chargeability. [Paras 21, 23, 25]

Capital gains are taxable in AY 2010-11 being the year in which the JDA was entered into and possession/acts in furtherance were given/performed.

Valuation for full value of consideration - guideline value vs developer's estimated cost - Whether the developer's estimated cost of construction should be taken as full value of consideration or the guideline value should be adopted for computation of capital gains - HELD THAT: - The Tribunal rejected the AO's use of the developer's estimated construction cost as the sale consideration, observing that such an estimate provided by the developer may be inflated and is not a reliable basis. Relying on jurisprudence which recognises the appropriateness of adopting fair market or guideline value where consideration is not ascertainable or determinable, and noting that adoption of guideline value does not cause loss to revenue because actual tax will also be paid on sale with appropriate credit, the Tribunal upheld the CIT(A)'s direction to adopt the guideline value (Rs.520 per sq.ft. as taken by the CIT(A)) and to use the built-up area specified for recomputation. The Tribunal also directed recomputation of capital gains for AY 2013-14 to 2017-18 as ordered by the CIT(A). [Paras 26, 28]

Guideline value upheld as the appropriate basis for recomputing full value of consideration; AO's reliance on developer's estimated construction cost disapproved; recomputation ordered including consequential recalculations for AY 2013-14 to 2017-18.

Final Conclusion: The Tribunal condoned delay in filing cross objections; held that initiation of assessment under section 153C was valid because the seized JDA pertained to the assessee and bore on determination of income; concluded on the merits that the JDA constituted transfer in part performance under section 2(47)(v) read with section 53A and that capital gains arose in AY 2010-11; and upheld the CIT(A)'s direction to adopt guideline value (and specified built-up area) for recomputation of capital gains, dismissing the revenue appeal and the assessee's cross-objection.

Deemed dividend u/s.2(22)(e) - taxability only in hands of registered shareholder - inter-corporate deposit versus loan/advance distinction - current account treatment of inter-company transactions - strict interpretation of deeming fiction

Deemed dividend u/s.2(22)(e) - taxability only in hands of registered shareholder - inter-corporate deposit versus loan/advance distinction - current account treatment of inter-company transactions - strict interpretation of deeming fiction - Whether amounts advanced by Questnet Enterprises Pvt. Ltd. to the assessee can be treated as deemed dividend in the hands of the assessee under Section 2(22)(e) of the Act. - HELD THAT: - The Tribunal found that the assessee was not a shareholder of the payer company (QNEI) and that QNEI held 72.29% in the assessee, making the assessee a subsidiary but not a shareholder of QNEI. The transactions between the assessee and its holding company were held to be in the nature of current account entries and not loans or advances attracting the deeming provision. Applying a strict interpretation of the deeming fiction in Section 2(22)(e), the Tribunal relied on co ordinate and High Court precedents which hold that the provision applies to amounts received by a registered shareholder and cannot be extended to a non shareholder recipient merely because of common shareholdings or director relationships. On these grounds the Tribunal concluded that the addition as deemed dividend was not sustainable. [Paras 7]

Addition under Section 2(22)(e) deleted; reassessment on that basis set aside.

Reopening of assessment u/s.147 r.w.s.148 - Challenge to reopening of assessment under Sections 147 r.w.s.148 of the Act. - HELD THAT: - Having decided the substantive issue of deemed dividend in favour of the assessee, the Tribunal refrained from adjudicating the legality of reopening the assessment, describing the question as academic in the facts of the case and therefore leaving the reopening issue undecided. [Paras 8]

Reopening challenge not adjudicated as it became academic after disposal of the substantive issue.

Final Conclusion: The appeal is allowed in part: the addition made as deemed dividend under Section 2(22)(e) is deleted for Assessment Year 2011 - 2012; the challenge to reopening under Sections 147 r.w.s.148 is not decided as it was rendered academic.

Reopening of assessment - change of opinion not a ground for reassessment - reason to believe - limitation on reopening under section 147 - four year proviso - failure to disclose fully and truly all material facts

Reopening of assessment - change of opinion not a ground for reassessment - reason to believe - Validity of notice under section 148 where the Assessing Officer had previously considered the same issue in the original scrutiny assessment. - HELD THAT: - The Court found on the record that the Assessing Officer had in the course of the original scrutiny proceedings specifically enquired into and recorded the matter now relied upon for reopening (the treatment of share of profit from the partnership firm and related interest/expenses), and the assessment order of 28.11.2016 reflects that the issue was considered and the assessee was heard. There was no material newly discovered after completion of the assessment to furnish a fresh 'reason to believe' that income had escaped assessment. A mere change of opinion by the Assessing Officer does not furnish a valid ground for reopening assessment. Consequently, the invocation of jurisdiction to reopen the assessment on that basis was without factual or legal foundation. [Paras 4, 5]

Notice under section 148 insofar as it sought reopening on the same issue already considered in the original assessment was invalid and unsustainable.

Limitation on reopening under section 147 - four year proviso - failure to disclose fully and truly all material facts - Validity of reopening the assessment after four years in absence of failure by the assessee to disclose fully and truly all material facts. - HELD THAT: - Section 147 (read with its proviso) precludes action to reopen an assessment after the expiry of four years from the end of the relevant assessment year unless the reassessment is justified by the assessee's failure to make a return or to disclose fully and truly all material facts. In the present case the notice under section 148 was issued after more than four years and there is nothing on the record to suggest any failure on the part of the assessee to disclose material facts; on the contrary, the assessee had responded to queries and the assessment order records consideration of the relevant material. Therefore the proviso to section 147 is not attracted and the reopening after four years is barred. [Paras 5, 6]

Reopening of assessment after four years was barred as there was no failure by the assessee to disclose fully and truly all material facts; the notice was therefore invalid.

Final Conclusion: The notice dated 30.3.2021 issued under section 148 seeking reopening of assessment for Assessment Year 2014-2015 is quashed; the petition is allowed and Rule is made absolute.

Disallowance under section 14A read with Rule 8D - expenditure attributable to exempt income - application of Maxopp principle regarding attribution of expenses to exempt income - calculation of average value of investments for Rule 8D - admitted suo-moto disallowance

Disallowance under section 14A read with Rule 8D - expenditure attributable to exempt income - Validity of disallowance under section 14A read with Rule 8D in respect of dividend and other exempt income - HELD THAT: - The Tribunal upheld the conclusion of the Assessing Officer and the CIT(A) that the assessee's bare assertion of not incurring any expenditure in relation to exempt income was not borne out by the accounts. The assessee had earned tax-free dividend income and the authorities, having examined the accounts, were not satisfied with the assessee's claim. Reliance is placed on precedents which permit application of section 14A read with Rule 8D where the AO, on the material on record, is not satisfied with the assessee's contention that no expenditure was incurred for earning exempt income. In these circumstances the Tribunal found that the provisions of section 14A read with Rule 8D were attracted and accordingly rejected the assessee's ground seeking deletion of the disallowance. [Paras 9]

Ground challenging applicability of section 14A/Rule 8D dismissed; disallowance under section 14A/Rule 8D sustained.

Application of Maxopp principle regarding attribution of expenses to exempt income - calculation of average value of investments for Rule 8D - admitted suo-moto disallowance - Quantum of disallowance under Rule 8D to be recomputed in light of Maxopp and treatment of capital/interest-free funds - HELD THAT: - The CIT(A) had directed recomputation of the disallowance by limiting the value of investments to those yielding only non-taxable income, following the Maxopp principle. The Tribunal noted that the CIT(A) remanded the matter to the AO to decide the quantum afresh in accordance with the Supreme Court's decision in Maxopp Investment Ltd. The Tribunal observed that the assessee had not made any suo-moto disallowance, and therefore the CIT(A)'s ancillary direction to treat any recomputed disallowance as not less than an admitted suo-moto disallowance would not apply. The issue of the precise quantum was not finally adjudicated by the Tribunal but remitted to the AO for fresh computation in accordance with Maxopp. [Paras 10]

Matter remanded to the AO for fresh computation of the disallowance under Rule 8D in accordance with the Maxopp principle; CIT(A)'s provision regarding minimum (suo-moto) disallowance held inapplicable.

Final Conclusion: The assessee's appeal is dismissed; the applicability of section 14A read with Rule 8D is sustained and the matter is remitted to the Assessing Officer for fresh quantification of the disallowance in accordance with the Maxopp principle, with the observation that no suo-moto disallowance was admitted by the assessee.

Deduction under section 54B for investment in agricultural land - Claim for exemption under section 54F for construction of residential house

Deduction under section 54B for investment in agricultural land - Allowance of deduction under section 54B in respect of investments made in purchase of agricultural land supported by registered sale deed. - HELD THAT: - The Commissioner (Appeals) examined the material on record and directed the Assessing Officer to allow deduction under section 54B to the extent the lands were purchased through registered sale deeds. The Tribunal finds that the Commissioner (Appeals)'s conclusion that investment in agricultural land supported by registered sale deed qualifies for deduction under section 54B is fair and reasonable on the record before it. No interference with that finding is warranted. [Paras 3, 6]

The direction of the Commissioner (Appeals) to allow deduction under section 54B in respect of purchases supported by registered sale deeds is upheld.

Final Conclusion: The appeal filed by the assessee is dismissed and the order of the Commissioner (Appeals) allowing deduction under section 54B in respect of investments in agricultural land supported by registered sale deeds is sustained.

Deduction under section 80IA - profits and gains derived from - direct nexus between income and business - derived from versus attributable to - inseparably connected with the business

Deduction under section 80IA - profits and gains derived from - direct nexus between income and business - inseparably connected with the business - Rental income earned by the assessee is derived from the cargo business and eligible for deduction under section 80IA. - HELD THAT: - The Tribunal applied the settled principle that Section 80IA permits deduction only for profits and gains "derived from" the eligible business, which requires a direct and proximate nexus and not merely an incidental or remote connection. After reviewing Supreme Court authorities distinguishing "derived from" from "attributable to", the Tribunal found that the assessee operated the cargo terminal under a Service Providers Right Holders Agreement with BIAL and that providing space to cargo agents, airlines, banks and the post office formed an integral part of the assessee's service obligations. The license agreements restricted licensees to use the space only for activities supporting cargo services and the presence of such licensees within the terminal was necessary for the assessee to provide uninterrupted 365x7x24 cargo services as contracted with BIAL. On these facts the rental receipts were held to emanate directly from the cargo business and to be inseparably connected with the conduct of that business, thereby satisfying the requirement of "derived from" for section 80IA relief. The alternate contention that past acceptance in earlier years or allowance of related expenses required separate examination was not accepted as determinative of the legal test applied here. [Paras 11, 12, 14, 16]

The addition treating the rental income as not eligible for deduction under section 80IA is deleted and the rental income is held to be derived from the cargo business and eligible for deduction.

Final Conclusion: The appeal is allowed: the Tribunal held that the rental income is directly and inseparably connected with the assessee's cargo business and therefore qualifies as income "derived from" the eligible business for deduction under section 80IA for AY 2017-18.

Treatment of sale proceeds credited to profit and loss account vis-a -vis computation of capital gains - rectification under section 154 for mistake apparent from record - processing of return by CPC and computational adjustment to business income - double taxation resulting from failure to allow cost of acquisition while processing

Treatment of sale proceeds credited to profit and loss account vis-a -vis computation of capital gains - processing of return by CPC and computational adjustment to business income - rectification under section 154 for mistake apparent from record - Whether the adjustment of Rs. 14,10,297/- made by CPC by retaining part of the sale proceeds in business income, despite the assessee having credited the full sale consideration to profit & loss and separately offered capital gains, was a mistake apparent from record requiring deletion without remand. - HELD THAT: - On examination of the return, computation, balance sheet and P&L account the Tribunal noted that the assessee had credited the full sale consideration to the profit/loss account and had separately disclosed the full value of consideration under capital gains, after claiming cost of acquisition, resulting in net long term capital gain offered to tax. The intimation by CPC acknowledged the adjustment carried out by the assessee but, while processing, treated only the net capital gain figure (after cost) as the adjustment and retained the difference as business income. This treatment ignored the cost of acquisition and effectively taxed the same amount twice. The Tribunal found that no contrary material was on record and that the correct treatment - allowing the cost of acquisition in computing capital gains and reducing the sale proceeds from business receipts - follows inevitably from the returned particulars. The error was therefore apparent from the record, no two reasonable views existed on the matter, and remand for fresh consideration would serve no useful purpose. [Paras 8]

The adjustment of Rs. 14,10,297/- made by CPC is a mistake apparent from the record and is to be deleted; the appeal is allowed.

Final Conclusion: The Tribunal allowed the appeal, directed deletion of the incorrect adjustment made by CPC which had resulted in double taxation by failing to allow the cost of acquisition while processing the return, and declined to remand the matter for fresh consideration.

Condonation of delay - de novo reassessment after exercise of revisionary power under section 263 - treatment of unexplained cash deposits as income - opportunity for cross-examination of adverse witness - remand for fresh consideration

Condonation of delay - Admission of the delayed appeal to the Tribunal after condonation of delay. - HELD THAT: - The appeal before the Tribunal was delayed by 639 days. The assessee filed a condonation petition supported by an affidavit attributing the delay to the outbreak of the COVID-19 pandemic. The Revenue did not oppose the condonation. Having considered the explanation, the Tribunal exercised its discretion to condone the delay and admitted the appeal for adjudication. [Paras 2]

Delay condoned and the appeal admitted for adjudication.

De novo reassessment after exercise of revisionary power under section 263 - treatment of unexplained cash deposits as income - opportunity for cross-examination of adverse witness - remand for fresh consideration - Validity of the addition of unexplained cash deposits and requirement of permitting cross-examination before confirming the addition. - HELD THAT: - The Assessing Officer, pursuant to a revision order, completed reassessment and treated cash deposits of Rs. 52 lakhs as unexplained and brought them to tax, on the basis that the purchaser's statement denied payment beyond the sale deed amount while the assessee had admitted a higher sum in his sworn statement. The Tribunal found that the purchaser was summoned and his statement recorded contradicting the assessee's admission, but the assessee was not afforded an opportunity to cross-examine that adverse witness. In view of the absence of an opportunity for cross-examination, the Tribunal concluded that the matter requires fresh consideration. Accordingly the Tribunal set aside the orders below and remitted the issue to the Assessing Officer to be reconsidered afresh in accordance with law after affording the assessee an opportunity to cross-examine the purchaser. [Paras 7, 8]

Orders of the authorities below set aside; matter remitted to the Assessing Officer for fresh consideration with opportunity for cross-examination before deciding the addition.

Final Conclusion: The Tribunal condoned the delay and admitted the appeal; the confirmation of unexplained cash deposits was set aside and the matter remitted to the Assessing Officer for fresh consideration after affording the assessee an opportunity to cross-examine the purchaser; appeal allowed for statistical purposes.

Reopening of assessment - ownership of bank account - onus of proof on assessee to discharge genuineness of transactions - restoration to Assessing Officer for verification and supply of documents - remand for fresh consideration and verification of material in possession of department

Reopening of assessment - Reopening of assessment was not pressed by the assessee and is dismissed as not pressed. - HELD THAT: - The Bench records that the learned Senior Counsel did not make specific submissions on the validity of reopening. Consequently the challenge to reopening was treated as not pressed and dismissed by the Tribunal. No further adjudication on the merits of the formation of belief for reopening is undertaken. [Paras 16]

Ground relating to reopening is treated as not pressed and dismissed.

Ownership of bank account - onus of proof on assessee to discharge genuineness of transactions - restoration to Assessing Officer for verification and supply of documents - remand for fresh consideration and verification of material in possession of department - Addition made on account of credits in an offshore bank account and question of ownership of that account is remanded to the Assessing Officer for fresh consideration after supply of material. - HELD THAT: - The Tribunal accepted the factual position that the Assessing Officer initiated reassessment on information (base sheet) showing an offshore HSBC account allegedly linked to the assessee and that additions under Section 68 were made after the assessee denied ownership and failed to produce documentary evidence. Noting the assessee's categorical disavowal of the account and his willingness to cooperate (including executing declarations and assisting in obtaining bank information), and the departmental reliance on material not supplied to the assessee, the Tribunal considered it appropriate to remit the matter. The Assessing Officer is directed to furnish to the assessee all documents and information in the department's possession or received from other agencies, and to pursue further enquiries (including obtaining foreign bank details) with the assessee's co-operation; the assessee is directed to supply passport, visa and travel records and to give necessary consent/declarations so that the issue of ownership and genuineness of transactions can be examined on merits. The Tribunal thereby did not adjudicate the addition on merits but ordered a fresh adjudication after compliance and exchange of material. [Paras 15, 16, 17, 18]

Addition confirmed by lower authorities is set aside for the purpose of fresh consideration; matter remitted to the Assessing Officer with directions to supply material to the assessee and to verify/account for ownership of the account; appeal allowed for statistical purposes following remand.

Final Conclusion: The Tribunal dismissed as not pressed the challenge to reopening, but directed restoration of the issue of additions (ownership of the offshore HSBC account and related credits) to the Assessing Officer for fresh consideration after the department supplies all material in its possession and the assessee cooperates by producing passport, travel/visa records and signing necessary declarations; both appeals (AY 2006-07 and AY 2007-08) are allowed for statistical purposes and remitted consistent with the directions.

Royalty - broadcast reproduction right - copyright - transfer of right to use copyright - Permanent Establishment (PE) - attribution of income to PE - equipment and process royalty

Royalty - broadcast reproduction right - copyright - transfer of right to use copyright - Distribution/subscription revenue received in India is not in the nature of royalty but arises from broadcasting reproduction/right to distribute and therefore is not taxable as royalty in India in absence of a PE. - HELD THAT: - The Tribunal found on the facts that BBC World News Ltd. retained copyright in the channel content and granted only non exclusive distribution rights to the assessee, who in turn conferred on BWIPL a circumscribed right to broadcast/reproduce the channel. The agreements expressly prohibited alteration or editing of content and did not transfer any ownership or licence in the underlying copyrighted works. Applying the distinction between copyright (section 14) and broadcast reproduction right (section 37) and following precedents treating distribution rights as a commercial/broadcast reproduction right distinct from copyright, the Tribunal held the receipts could not be characterised as royalty under the domestic charging provisions or the India-UK DTAA. Consequently, the addition treating the receipts as royalty was deleted. [Paras 11, 12, 14, 15]

Distribution revenue is not taxable as royalty; the addition is deleted.

Permanent Establishment (PE) - attribution of income to PE - equipment and process royalty - No part of distribution revenue can be notionally attributed and taxed at the hands of the non resident assessee where the entire revenue was received, accounted for and offered to tax in India by the Indian distributor; the question of PE is therefore academic on the facts. - HELD THAT: - For assessment years 2007 08 and 2008 09 the Tribunal recorded that BWIPL received and accounted for the entire distribution revenues in India and offered the profits to tax. Given that the receipts were not received by the non resident assessee, and having held that such receipts are not in the nature of royalty, the Tribunal held it was impermissible to notionally attribute the same income to the assessee for taxation. The Revenue's contention, raised belatedly, that such receipts were equipment/process royalty was rejected because it was not the case made by the departmental authorities in the assessments. Accordingly, the PE contention becomes academic since no income remained to be attributed to the non resident. [Paras 16, 17, 18, 19]

No notional attribution or taxation of income at the hands of the non resident; PE issue is academic and additions are deleted.

Final Conclusion: All appeals allowed; additions treating distribution receipts as royalty and taxing them at the hands of the non resident assessee are deleted for the assessment years 2006 07, 2007 08 and 2008 09.

Deduction under Section 36(1)(va) - employees' contribution to Provident Fund and ESI - condition precedent of deposit on or before statutory due date - non-obstante clause in Section 43B not applicable to employees' contributions - deemed income by virtue of Section 2(24)(x) - retrospective amendment to section 40(a) disallowing education cess deduction

Deduction under Section 36(1)(va) - employees' contribution to Provident Fund and ESI - condition precedent of deposit on or before statutory due date - non-obstante clause in Section 43B not applicable to employees' contributions - deemed income by virtue of Section 2(24)(x) - Whether employees' contribution to EPF and ESI paid after the statutory due date but before the due date of filing the return is allowable as a deduction under Section 36(1)(va) read with Section 43B. - HELD THAT: - The Tribunal followed the decision of the Hon'ble Supreme Court which analysed welfare statutes and held that employees' contributions are monies held in trust for employees and are treated as deemed income of the employer under Section 2(24)(x) unless deposited on or before the due date prescribed by the respective enactments. The Court accepted the Supreme Court's reasoning that the non-obstante clause in Section 43B cannot dilute the statutory requirement that employees' contributions must be deposited by the employer within the due date specified under the relevant welfare legislation as a condition precedent to allow deduction under Section 36(1)(va). In the present case payments were made after the statutory due dates though before filing of the return; therefore the condition precedent for deduction was not satisfied and the amounts rightly stand added back as deemed income. [Paras 6]

Assessee not entitled to deduction for employees' contribution where deposit was made after the statutory due date; additions sustained.

Retrospective amendment to section 40(a) disallowing education cess deduction - Whether education cess (including secondary and higher education cess) paid by the assessee is allowable as a deduction. - HELD THAT: - The Tribunal noted the retrospective amendment to Section 40(a) and followed earlier Tribunal and Supreme Court precedents holding that education cess is in substance an additional surcharge on income-tax and partakes the character of income-tax; accordingly it is not an allowable deduction. The assessee's concession that this ground must be decided against it was recorded and the Tribunal dismissed the claim for deduction of education cess. [Paras 8]

Payment of education cess (including secondary and higher education cess) is not allowable as a deduction; claim rejected.

Final Conclusion: Following the binding Supreme Court analysis, the Tribunal dismissed the appeal: additions for employees' contributions to EPF/ESI sustained as deemed income where deposit was after the statutory due date, and deduction for education cess disallowed in view of the retrospective amendment and relevant precedents.

Error apparent and prejudicial to the interest of revenue under section 263 - application of Explanation 2 to section 263 regarding absence of enquiry - distinction between agricultural income and business income in respect of nursery/saplings - classification of income from saplings/seedlings as agricultural income - relevance of subsequent assessment-year findings on classification

Error apparent and prejudicial to the interest of revenue under section 263 - application of Explanation 2 to section 263 regarding absence of enquiry - Validity of the Principal Commissioner's invocation of proceedings under section 263 to set aside the assessment order. - HELD THAT: - The Tribunal found that the Assessing Officer, despite selection of the case for scrutiny under CASS, made no enquiry, did not call for information, nor put any questions to verify the nature of the income claimed as agricultural. Explanation 2 to section 263 was held to be instructive: an assessment order is open to being treated as erroneous and prejudicial where no enquiry has been made. In these circumstances the Principal Commissioner's conclusion that the assessment order was erroneous and prejudicial to the revenue was sustainable. The Tribunal additionally noted that assessments in subsequent years (2016-17 and 2017-18) treated similar receipts as business income, which reinforced the correctness of the Principal Commissioner's intervention under section 263. On these grounds the Tribunal found no error in the exercise of power under section 263. [Paras 4, 9, 10]

Order passed by the Principal Commissioner under section 263 was justified and is upheld; the appeal is dismissed on this ground.

Distinction between agricultural income and business income in respect of nursery/saplings - classification of income from saplings/seedlings as agricultural income - relevance of subsequent assessment-year findings on classification - Whether the income from cultivation and sale of banana saplings qualified as agricultural income or was business income. - HELD THAT: - While the assessee contended that the stages of selection, chemical treatment, bottle propagation and subsequent hardening amounted to agricultural operations yielding agricultural income (relying on decisions treating nursery products as agricultural), the Tribunal observed that the Principal Commissioner found the activities to be commercial in nature and treated the receipts as business income. Crucially, the Assessing Officer had not made enquiries during the scrutiny assessment to justify treating the receipts as agricultural income. The Tribunal also observed that for subsequent assessment years the Assessing Officer, after consideration, treated similar receipts as business income. On the record before it the Tribunal accepted the Principal Commissioner's conclusion that the activities did not fall within agriculture for exemption purposes and were properly characterised as business income. [Paras 4, 9, 10]

Income from the activity in question is to be treated as business income and not agricultural income; the assessee's claim of exemption is rejected.

Final Conclusion: The Principal Commissioner's order under section 263 was upheld: the assessment for A.Y. 2015-16 was correctly set aside as erroneous and prejudicial because no enquiry was made by the Assessing Officer, and the receipts from sale of banana saplings were held to be business income rather than agricultural income; the assessee's appeal is dismissed.

Ultra vires - delegated legislation must conform to parent statute - Importer-Exporter Code requirement for services benefits under FTP - service exports eligibility under SEIS - remand for fresh consideration

Ultra vires - delegated legislation must conform to parent statute - Importer-Exporter Code requirement for services benefits under FTP - service exports eligibility under SEIS - Whether Clause 3.08(f) of the FTP 2015-20, requiring an active IEC at the time of rendering services to claim SEIS benefits, exceeded the scope of the parent FTDR Act and imposed an additional obligation. - HELD THAT: - The Court noted the proviso to Section 7 of the FTDR Act makes IEC necessary for services only when the service provider is availing benefits under the Foreign Trade Policy, and does not stipulate that IEC must exist at the time of rendering the service. The Court agreed with the reasoning of the Bombay High Court in Smarte Solutions that Clause 3.08(f) imposed an additional restriction - requiring IEC at the time of rendering services - which went beyond the mandate of the principal statute and the rule making power. However, the Court refrained from embarking on fresh adjudication of the constitutional and vires contentions because the Central Government amended the FTP (para 2.05) so that for services exports IEC is necessary only when the service provider seeks benefits under Chapter 3. In light of that amendment the specific grievance concerning insistence on IEC at the time of export stood satisfied and further judicial determination of individual claims was not undertaken. [Paras 26, 27, 28]

Clause 3.08(f) was identified as imposing a restriction inconsistent with the parent Act, but the Court did not adjudicate further on the vires as the Government amendment rendered the specific grievance satisfied.

Remand for fresh consideration - service exports eligibility under SEIS - Whether the petitioners' individual claims should be finally disposed of by this Court or reconsidered by the administrative authorities in view of the amendment to the FTP. - HELD THAT: - The Court held that because the Government has amended the FTP to address the principal grievance (clarifying that IEC is necessary for services only when benefits under Chapter 3 are sought), it would not adjudicate the individual factual claims. Petitioners were permitted to press their remaining grievances before the statutory authorities and the authorities were directed to consider and adjudicate those grievances afresh and in accordance with law. [Paras 29]

Petitions disposed; petitioners may pursue remaining reliefs before the authorities, which are directed to consider and decide afresh in accordance with law.

Final Conclusion: The Central Government's amendment to the FTP (para 2.05) removed the insistence on an IEC at the time of rendering services for claiming SEIS benefits, addressing the core grievance; the Court accepted the Bombay High Court's reasoning that the earlier Clause 3.08(f) had imposed an additional restriction but did not decide the vires on merits, and directed the administrative authorities to reconsider the petitioners' outstanding claims afresh in accordance with law, disposing of the petitions.

Application under Section 241 for relief in cases of oppression and mismanagement - refusal of registration and appeal to the Tribunal under Section 58 - rectification of register of members - beneficial ownership and entitlement to seek relief prior to registration - powers of the Tribunal under Section 242 to mould relief including costs - investigation into company's affairs under Section 213 - power to refer matters to Central Government for appointment of inspectors - limitation on Tribunal recommending disciplinary action to autonomous professional bodies

Application under Section 241 for relief in cases of oppression and mismanagement - beneficial ownership and entitlement to seek relief prior to registration - refusal of registration and appeal to the Tribunal under Section 58 - powers of the Tribunal under Section 242 to mould relief including costs - Maintainability of petition under Sections 241/242 read with Sections 58/59 and the availability of Tribunal relief including direction for registration/rectification and award of costs. - HELD THAT: - The Tribunal correctly recognised that the respondents, by virtue of payments made and board-approved agreements and minutes of reconciliation, enjoyed beneficial interest in the shares and, but for withholding of transfer documents, would have exceeded the 10% threshold; that fact is a relevant consideration under Section 241. The Tribunal may, in appropriate cases, waive or take into account threshold requirements in the exercise of its powers under Section 242 to enable a member to apply under Section 241. Non transfer of shares despite board approval and delivery of completed transfer documents was treated as conduct amounting to oppression and mismanagement and justified relief under Sections 58/59 read with Chapter XVI. The Tribunal is empowered to mould relief under Section 242(2), including directing rectification/registration and imposing costs; the appellate forum declined to interfere with the Tribunal's exercise of its power to award costs in the facts of this case. [Paras 30, 32]

The petition was maintainable; the Tribunal's findings that the respondents had beneficial entitlement and that non transfer amounted to oppression were upheld, and the Tribunal's power to award costs was not interfered with.

Investigation into company's affairs under Section 213 - power to refer matters to Central Government for appointment of inspectors - limitation on Tribunal recommending disciplinary action to autonomous professional bodies - Competence of the Tribunal to order a private investigation into the company's affairs and to direct an autonomous professional body to take disciplinary action against a firm of chartered accountants. - HELD THAT: - The Tribunal has no power to direct an investigation to be carried out directly by an independent private person or firm; where grounds for investigation exist the Tribunal must follow the procedure prescribed in Section 213 and may, after hearing and on making out a prima facie case, refer the matter to the Central Government for appointment of inspectors. Similarly, the Tribunal lacks power to command an autonomous professional body to initiate disciplinary proceedings; such steps fall outside the Tribunal's direct powers and must be pursued through the process in the Companies Act and the Central Government where applicable. Consequently the impugned directions ordering a private firm to investigate and asking the Institute of Chartered Accountants of India to take disciplinary action were set aside. [Paras 31, 33]

The Tribunal erred in directing a private investigation and in asking the professional body to take disciplinary action; those directions are set aside, and the correct course is referral under Section 213 to the Central Government for further action if warranted.

Final Conclusion: The appeal is disposed of: the Appellate Tribunal affirms the Tribunal's conclusion on maintainability, beneficial entitlement, oppression and the grant of costs, but sets aside the Tribunal's orders directing a private investigation and directing an autonomous professional body to take disciplinary action; no costs.

Approval of resolution plan under Section 31 of the I&B Code - compliance with Section 30(2) of the I&B Code - limited judicial review of commercial wisdom of Committee of Creditors - validity of valuation - Fair Value and Liquidation Value as estimates - status of a Trust as a permissible resolution applicant - treatment of operational creditors in a resolution plan - material irregularity in exercise of powers by the resolution professional

Approval of resolution plan under Section 31 of the I&B Code - compliance with Section 30(2) of the I&B Code - Validity of the Adjudicating Authority's approval of the Resolution Plan - HELD THAT: - The Tribunal examined whether the Resolution Plan, as approved by the Committee of Creditors, met the requirements of Section 30(2) and Regulations 38, 38(1A) and 39(4) of the CIRP Regulations. Having regard to the CoC's unanimous approval and the Adjudicating Authority's satisfaction on the listed requirements, the Tribunal found that the Resolution Plan met the statutory requirements and was not in contravention of Section 29A. The Tribunal applied the settled principle that the Adjudicating Authority's role in approving a plan is confined to the limited scrutiny under Section 30(2)/31 and must not usurp the commercial wisdom of the CoC. [Paras 16, 70, 73]

The approval of the Resolution Plan was held valid and the appeal on this ground failed.

Limited judicial review of commercial wisdom of Committee of Creditors - material irregularity in exercise of powers by the resolution professional - Whether the Tribunal may interfere with the CoC's commercial decision or on alleged irregularities by the Resolution Professional - HELD THAT: - Relying on authoritative precedents, the Tribunal reiterated that the commercial wisdom of the CoC is not open to judicial re-appraisal except within the narrow grounds specified in Sections 30(2), 31 and, on appeal, Section 61(3). The Appellant failed to establish any of the statutory grounds, including material irregularity by the Resolution Professional, that would permit interference with the CoC's unanimous commercial decision. [Paras 61, 63, 73]

No interference with the CoC's commercial decision; allegations of material irregularity were not made out and the appeal fails on this basis.

Validity of valuation - Fair Value and Liquidation Value as estimates - compliance with Regulation 35 of the CIRP Regulations - Allegation that valuations were deficient or undisclosed and whether that vitiates approval - HELD THAT: - The Tribunal accepted that Fair Value and Liquidation Value furnished by registered valuers are estimates intended to assist the CoC. The RP had invited expressions of interest from registered valuers, two independent valuers produced broadly concordant figures and the values were provided to CoC members with confidentiality undertakings under the Regulations. The Tribunal held that differing or estimated values do not, by themselves, invalidate the process where CoC has satisfied itself. [Paras 26, 27, 57, 58]

Valuation process and estimates were adequate for the purposes of CoC decision-making and do not vitiate the approval.

Treatment of operational creditors in a resolution plan - compliance with Section 30(2)(b) regarding operational creditors - Whether the Resolution Plan failed to provide for operational creditors in the prescribed manner - HELD THAT: - The Tribunal noted provisions in the Resolution Plan and the impugned order that specifically addressed payment to operational creditors, including clause 5.1.18.3 providing for an escrow distribution and the distribution schedule approved by CoC. Applying the statutory scheme and precedents, the Tribunal found that operational creditors' dues had been provided for in the manner contemplated by the Code and Regulations, and the Appellant did not demonstrate non-compliance under Section 30(2)(b). [Paras 23, 24, 25, 62, 73]

The Resolution Plan was found to provide for operational creditors as required; the complaint on this ground was rejected.

Status of a Trust as a permissible resolution applicant - Person under Section 3(23) of the I&B Code - Whether a registered charitable Trust can be a Resolution Applicant - HELD THAT: - The Tribunal held that the term 'person' under the Code includes a Trust and there is no statutory bar to a Trust being a Resolution Applicant. The Tribunal observed that a charitable entity may carry on activities that yield profit provided the object and use of benefit is charitable; on the facts the successful applicant being a registered charitable trust did not disqualify it from submitting or implementing a Resolution Plan. [Paras 41, 66, 67]

A Trust was held to be a permissible Resolution Applicant; the objection based on charitable status was rejected.

Maintainability of appeal by an operational creditor as an aggrieved person - Whether the Appellant (operational creditor) is an aggrieved person entitled to prefer the appeal - HELD THAT: - The Tribunal examined Section 61(1) and concluded that the words used are 'person aggrieved' and an affected operational creditor who alleges a legal grievance may be maintainable as an appellant. On the facts the Appellant's locus to file the appeal was accepted as maintainable, though the substantive grounds ultimately failed. [Paras 71, 72, 73]

The appeal was held maintainable, but it failed on merits.

Final Conclusion: The Company Appeal (AT) (CH) (INS.) No.179 of 2021 is dismissed on merits. The Tribunal found the Resolution Plan to satisfy the statutory requirements; allegations of valuation deficiency, improper treatment of operational creditors, disqualification of a Trust as Resolution Applicant, or material irregularity by the Resolution Professional were not established. No order as to costs.

Dispensing with personal attendance of accused under Section 205 of the Cr.P.C - holding inquiry or trial in absence of accused under Section 317 of the Cr.P.C - exercise of judicial discretion in granting exemption from personal appearance - liberal construction of Section 205 of the Cr.P.C - requirement of personal attendance for identification and progress of trial

Dispensing with personal attendance of accused under Section 205 of the Cr.P.C - exercise of judicial discretion in granting exemption from personal appearance - requirement of personal attendance for identification and progress of trial - liberal construction of Section 205 of the Cr.P.C - holding inquiry or trial in absence of accused under Section 317 of the Cr.P.C - Whether the trial court erred in rejecting the petitioner's application under Section 205 Cr.P.C. and whether the petitioner should be exempted from personal attendance during trial subject to conditions. - HELD THAT: - The Court held that Section 205 vests a discretion in the trial court to exempt personal attendance where the court considers the accused's presence unnecessary for progress of trial; that in exercising this discretion the court must weigh the nature of the case and the conduct of the accused and consider whether any useful purpose would be served by personal attendance. The offences charged under the IBC (including misconduct in CIR and failure to assist the official liquidator) were not of such nature that personal presence and identification of the petitioner were indispensable. The petitioner undertook not to dispute identity, to be represented by counsel on every date, not to challenge evidence recorded in his absence, and to attend whenever required. The trial court failed to give adequate weight to the petitioner's professional commitments and international travel obligations and to the fact that the complainant did not dispute those facts; it also misapplied the relevance of the petitioner's attendance at some virtual meetings. The Court distinguished Section 317 as operating in different circumstances (permitting trial in absence where attendance is unnecessary in the interests of justice or where the accused persistently disrupts proceedings) and held that rejection of a Section 205 application cannot be premised on availability of Section 317. Section 205 is to be liberally construed in appropriate cases. For these reasons the High Court set aside the trial court's order, allowed the Section 205 application and imposed specified conditions while reserving the trial court's power to require personal attendance if necessary. [Paras 24, 25, 26, 27, 28]

The revision is allowed; the order dated 19th May, 2022 is set aside and the petitioner's application under Section 205 Cr.P.C. is allowed; the petitioner's personal appearance is exempted subject to conditions including representation by counsel on every date, no challenge to identity, not disputing complainant's evidence recorded in presence of his counsel, and not leaving the country without court permission; the trial court may still direct personal attendance if required.

Final Conclusion: The High Court allowed the revision, set aside the trial court's refusal, and exempted the petitioner from personal attendance under Section 205 Cr.P.C. subject to specified conditions while preserving the trial court's authority to order personal attendance if occasion arises.

Moratorium under section 14 of the Insolvency and Bankruptcy Code, 2016 - jurisdiction of National Company Law Tribunal under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - requirement of hearing before taking coercive action on show cause notices - interim protection to enable filing of remedies before NCLT - distinction between PPAs and Coal Supply Agreements in Ministry of Power minutes

Requirement of hearing before taking coercive action on show cause notices - interim protection to enable filing of remedies before NCLT - Whether the writ petition seeking quashing of the show cause notices should be proceeded with immediately or the SECL should be directed to hear the petitioner and pass a reasoned order, with interim protection to enable further remedies. - HELD THAT: - The Court declined to go into the merits of the challenge to the show cause notices or to adjudicate whether there was justifiable cause for non-commissioning. Noting that the SECL had issued show cause notices and that replies have been filed, the Court directed SECL to grant a hearing to the petitioner and to pass an order in accordance with law. The Court granted limited interim protection by providing a two weeks' period in which the petitioner may avail remedies before the NCLT and directed that any order passed by SECL in that interval shall not be given effect to. The direction preserves the administrative process of hearing by SECL while protecting the petitioner's ability to approach the NCLT without immediate enforcement of any adverse order. [Paras 12, 13]

SECL to hear the petitioner and pass a reasoned order; petitioner granted two weeks to pursue remedies before the NCLT and any order passed in that period shall not be given effect to.

Jurisdiction of National Company Law Tribunal under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - moratorium under section 14 of the Insolvency and Bankruptcy Code, 2016 - Appropriate forum for adjudication of disputes arising in relation to the corporate debtor undergoing CIRP and the effect of the insolvency proceedings on the present challenge. - HELD THAT: - The Court recorded that the corporate insolvency resolution process had been instituted and that a moratorium under section 14 of the IBC had been placed on the corporate debtor. The Court observed that, in view of the insolvency proceedings, the NCLT is the appropriate forum under Section 60(5) of the IBC to entertain applications, proceedings or claims by or against the corporate debtor. Consequently, the Court provided a limited period for the petitioner to approach the NCLT and instructed that SECL be made a party to any such filings and served with the papers. The Court did not decide the substantive effect of the moratorium or of insolvency on the CSA or the alleged breaches, leaving those questions to the NCLT or to be considered upon SECL's reasoned order. [Paras 6, 13]

NCLT is the appropriate forum under Section 60(5) IBC for remedies; petitioner given two weeks to approach NCLT and SECL to be made party to such proceedings.

Final Conclusion: The writ petition is disposed of by directing SECL to hear the petitioner and pass a reasoned order; the petitioner is granted two weeks' time to pursue remedies before the NCLT (the appropriate forum under Section 60(5) IBC) and any order passed by SECL in that two-week period shall not be given effect to; all pending applications are disposed of.

Forfeiture of right to file reply - admission of Section 7 petition - financial debt under Section 5(8) of the Code - stamping of promissory notes and enforceability where not pressed for enforcement - adequacy of opportunity / adjournments to file reply - limitation for debt

Forfeiture of right to file reply - adequacy of opportunity / adjournments to file reply - Whether the Adjudicating Authority legitimately forfeited the Corporate Debtor's right to file a reply and whether the Corporate Debtor was denied a proper opportunity to contest the Section 7 petition. - HELD THAT: - The Appellate Tribunal examined the hearing chronology and observed that notices were issued and the Corporate Debtor's counsel repeatedly sought and obtained adjournments but ultimately did not file the reply despite specific directions to do so. The Adjudicating Authority recorded that the Corporate Debtor did not comply with the conditional order dated 16.03.2021 and therefore its right to file a reply was forfeited. The Tribunal found that the corporate debtor's counsel had been present at stages and had opportunities to file the reply; consequently there was no illegality in the Adjudicating Authority's decision to forfeit the right to file a reply and proceed to adjudication on the material on record. [Paras 6, 7]

The forfeiture of the Corporate Debtor's right to file a reply was lawful and the Adjudicating Authority did not deprive the Corporate Debtor of a proper opportunity to be heard.

Financial debt under Section 5(8) of the Code - stamping of promissory notes and enforceability where not pressed for enforcement - limitation for debt - Whether the amount advanced to the Corporate Debtor constituted a 'financial debt' and whether defects in stamping of promissory notes precluded admission of the Section 7 petition. - HELD THAT: - The Tribunal found on the material that the sum was disbursed and acknowledged by the Corporate Debtor on specified dates and that a cheque issued in repayment was dishonoured. The transaction carried interest and thus had consideration for time value of money. The Promissory Notes evidenced acknowledgement of debt repayable with interest. The Tribunal noted that the Financial Creditor had not sought enforcement of the promissory notes; therefore issues of stamping and proceedings under the Stamp Acts were not material to the admission of the petition. On these facts the Tribunal concluded that the essential ingredients of a 'financial debt' as defined under the Code were present and that the debt was within limitation. [Paras 8, 9, 10]

The amount advanced is a 'financial debt' within the meaning of the Code and absence of stamping on the promissory notes was not a bar to admission where enforcement of the instruments was not pressed; the debt was within limitation.

Final Conclusion: The Appeal is dismissed; no grounds were found to set aside the Adjudicating Authority's admission of the Section 7 petition and no order as to costs.

Pre-existing dispute - maintainability of Section 9 application under the Insolvency and Bankruptcy Code, 2016 - validity of demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 - authorization of signatory to issue demand notice - compliance with Section 8 as pre-condition to initiate corporate insolvency resolution process

Authorization of signatory to issue demand notice - validity of demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 - compliance with Section 8 as pre-condition to initiate corporate insolvency resolution process - Demand notices issued in the name of the operational creditor were invalid for want of record evidence of authorization to the signatory and, therefore, the Section 9 application was not maintainable on that ground. - HELD THAT: - The Tribunal examined the record and noted that both demand notices (dated 29.11.2018 and 10.10.2019) were signed by Mr. Surendra Prasad Shukla purportedly as whole time director and authorized signatory. The Adjudicating Authority had recorded absence of any authorization on the file at the relevant time. The Tribunal held that valid and legal demand notice under Section 8 is a pre requisite for admission of a Section 9 application; in the absence of satisfactory proof of authorization for issuance of the demand notice, the application under Section 9 could not be entertained. Consequently, if the operational creditor failed to satisfy the Adjudicating Authority as to the validity of the demand notice, the Section 9 application was rightly rejected for non compliance with Section 8 requirements. [Paras 25, 26]

Demand notices were not shown to be issued by an authorized person on the record; absence of valid Section 8 compliance rendered the Section 9 application not maintainable on this ground.

Pre-existing dispute - maintainability of Section 9 application under the Insolvency and Bankruptcy Code, 2016 - A pre-existing dispute between the parties regarding quality of supplied goods existed and therefore the Section 9 application was not maintainable on that ground. - HELD THAT: - On consideration of the contract documents, communications between the parties and inspection reports placed on record, the Tribunal found material showing that the corporate debtor had raised quality issues prior to initiation of insolvency proceedings. The Tribunal did not decide the substantive merits of the dispute or the validity of the inspection certificates, but held that those materials sufficed to infer the existence of a pre existing dispute. Because a bona fide pre existing dispute existed, the Adjudicating Authority correctly concluded that the Section 9 application was barred by the existence of that dispute. [Paras 27]

There was a pre-existing dispute as to quality between the parties; the Section 9 application was not maintainable for that reason.

Final Conclusion: The impugned order of the Adjudicating Authority dismissing the Section 9 application is upheld; the appeal is dismissed.

Interim custody under Section 451 Cr.P.C. - provisional attachment and confirmation under the Prevention of Money Laundering Act (PMLA) - custodia legis and transfer of seized property to enforcement agency - confiscation under the Tamil Nadu Prohibition Act versus attachment under PMLA - remedies before the Adjudicating Authority and appellate remedy to the Tribunal and High Court under the PMLA

Interim custody under Section 451 Cr.P.C. - provisional attachment and confirmation under the Prevention of Money Laundering Act (PMLA) - custodia legis and transfer of seized property to enforcement agency - Whether the order of the District Munsif-cum-Judicial Magistrate directing return of seized ornaments to the accused could be sustained in view of the provisional attachment under the PMLA which has been confirmed by the Adjudicating Authority, and whether the ornaments should remain in the Magistrate's custody or be handed over to the Enforcement Directorate. - HELD THAT: - The Court noted that the Deputy Director of Enforcement had issued a provisional attachment order in respect of the cash and ornaments and that the provisional attachment had been confirmed by the Adjudicating Authority under the PMLA. In view of the confirmation under the PMLA, the statutory remedy available to the affected person lies before the Adjudicating Authority/Tribunal and by appeal under the PMLA; consequently the Magistrate's earlier order returning the ornaments cannot be allowed to operate in contradiction to the confirmed attachment. The Court also observed that the ornaments are not liable to confiscation under the Tamil Nadu Prohibition Act nor are they necessary as material evidence to connect the accused with the prohibition offence, and therefore retaining them in the custody of the District Munsif-cum-Judicial Magistrate would impose an unnecessary burden on that Court. Balancing these considerations, the Court directed procedural safeguards for transfer: photographing the ornaments with attestation by the Magistrate and the Deputy Director, drawing and signing a handing-over proceeding, and permitting markings of photographs and proceedings in the sessions trial to prove seizure if required. The Deputy Director was directed to collect the ornaments within three months and to keep them in safe custody until further orders or final determination in the PMLA proceedings. [Paras 5, 6, 7]

The order of the Magistrate directing return of the ornaments is set aside; the Magistrate is directed to hand over the ornaments to the Deputy Director, Enforcement Directorate, after prescribed photographic and procedural formalities, and the ED shall keep the ornaments in safe custody pending further orders or adjudication under the PMLA.

Final Conclusion: Criminal Original Petition allowed: the District Munsif-cum-Judicial Magistrate's order returning the ornaments is set aside and the ornaments are to be transferred to the Deputy Director, Enforcement Directorate, with specified procedural safeguards; the confirmed provisional attachment under the PMLA governs custody and the aggrieved person may pursue remedies under the PMLA.

Quashing of prosecution under Section 3 and 4 of the PMLA - Proceeds of crime - Bonafide purchaser / innocent purchaser - Section 8(7) PMLA - release or confiscation of property during pendency of trial - Abuse of process of law - Reverse burden under Section 24 PMLA - Registered sale deed of unimpeachable character in proceedings under Section 482 Cr.P.C.

Quashing of prosecution under Section 3 and 4 of the PMLA - Bonafide purchaser / innocent purchaser - Proceeds of crime - Reverse burden under Section 24 PMLA - Registered sale deed of unimpeachable character in proceedings under Section 482 Cr.P.C. - Prosecution of the petitioner under Sections 3 and 4 of the PMLA is an abuse of process and is quashed. - HELD THAT: - The Court applied the test in Nikesh Tarachand Shah that criminal liability under Section 3 requires that the person be knowingly or actually involved in activities connected with "proceeds of crime" and must project or claim the property as untainted. The material relied on by the prosecution (including the registered sale deed) shows the Pothys paid the stated sale consideration by RTGS transfers to the vendor's mother and deducted TDS, and there is no material that the petitioner projected the property as untainted or abetted such projection. The reverse burden in Section 24 PMLA operates at trial and cannot, in the facts of this case, justify quashing only on that basis. The Court held that documents of unimpeachable character (the registered sale deed) may be looked into under Section 482 Cr.P.C. and, on that record, the prosecution against the petitioner is mala fide/an abuse of process. Consequently, prosecution in S.C.No.74 of 2017 qua the petitioner is quashed, subject to the limited undertaking regarding confiscation proceedings noted in earlier orders. [Paras 12, 13, 14, 16, 17]

Prosecution under Sections 3 and 4 of the PMLA against the petitioner quashed as an abuse of process.

Section 8(7) PMLA - release or confiscation of property during pendency of trial - Abuse of process of law - Bonafide purchaser / innocent purchaser - Whether the trial Court erred in refusing to release the impugned property and refund the deposit under Section 8(7) PMLA. - HELD THAT: - Section 8(7) empowers the Special Court to pass appropriate orders regarding confiscation or release where trial cannot be conducted or has not progressed. This Court treated Section 8(7) as a standalone provision that can be invoked during pendency where the trial is not progressing. The record shows the trial had not progressed materially for years and the Enforcement Directorate had not traced or attached the sale consideration received by the vendors; instead, the property held by bonafide purchasers was targeted. Given that the Pothys were not benamies and had disclosed payments, and that the appellate and high court orders had directed conditional deposits (which remain subject to adjudication), the trial Court's refusal was set aside. The Court directed release of the subject property and refund of the deposit of Rs.10,00,000/- deposited pursuant to earlier orders. [Paras 14, 15, 16, 18, 20]

The trial Court's order refusing release is set aside; the Special Court is directed to release the property and refund the deposited sum.

Final Conclusion: The High Court quashed the prosecution of the petitioner under Sections 3 and 4 of the PMLA as an abuse of process on the materials (including the registered sale deed) and, invoking Section 8(7) PMLA and the prolonged lack of trial progress, allowed the revision, directing release of the subject property and refund of the deposit made pursuant to earlier orders.

Monetary limit for filing Special Leave Petition - direction of the Central Board of Indirect Taxes and Customs on filing SLP - keeping question of law open under Section 35R of the Central Excise Act, 1944 - closure of appeal where tax impact is below prescribed monetary threshold

Monetary limit for filing Special Leave Petition - direction of the Central Board of Indirect Taxes and Customs on filing SLP - keeping question of law open under Section 35R of the Central Excise Act, 1944 - Appeal was closed because the tax impact was below the monetary limit and the Board advised against filing an SLP, while leaving the question of law open under Section 35R. - HELD THAT: - The learned counsel for the appellant did not dispute that the tax impact falls below the monetary threshold prescribed by the Board's circular dated 22.08.2019. In a related matter the revenue proposed filing a Special Leave Petition, but the Board, by communication dated 19.10.2022, directed that an SLP should not be preferred in view of the monetary limit; however, the Board permitted the question of law to be kept open pursuant to Section 35R of the Central Excise Act, 1944. Applying the same position, the Court closed the appeal on the basis that the tax effect is below the prescribed monetary limit while expressly leaving the legal question undecided for consideration under Section 35R. [Paras 1, 3, 4]

Appeal closed on account of tax impact being below the monetary limit; question of law left open under Section 35R for future consideration.

Final Conclusion: The appeal is closed because the tax impact is below the monetary threshold and, following the Board's advice, no SLP is to be filed; the question of law remains open under Section 35R of the Central Excise Act, 1944.

Reassessment - limitation - principles of natural justice - service by registered post and deemed service - genuineness of H Forms - extension of limitation due to COVID-19 (Suo Motu Writ Petition)

Limitation - extension of limitation due to COVID-19 (Suo Motu Writ Petition) - Whether the reassessment proceedings dated 24.02.2022 were barred by limitation. - HELD THAT: - The Court examined the plea that reassessment beyond four years was time-barred. Having considered the Suo Motu orders of the Hon'ble Supreme Court extending limitation from 15.03.2020 and subsequent extensions, and applying the reasoning in the Division Bench decision in V-Guard Industries, the Court held that the period of limitation for statutory proceedings could be extended in view of the pandemic orders. The Court accepted that the pandemic-related extensions and attendant orders permitting additional time for filing and for proceedings by authorities meant that the limitation objection could not sustain annulment of the reassessment on that ground alone. [Paras 7, 15, 16, 17]

Limitation objection to the reassessment was negatived; the pandemic-related extension of limitation applies.

Principles of natural justice - service by registered post and deemed service - genuineness of H Forms - Whether the reassessment order validly withdrew exemption without affording the petitioner an opportunity to be heard on the alleged bogus H Forms and whether the service was adequate. - HELD THAT: - The Court found that the assessing authority relied upon a verification report from the Assistant Commissioner (Pallavaram) doubting the genuineness of three H Forms and withdrew exemption five years after the assessment. The Court noted returned registered-post notices and differing modes of service, observed that the disputed forms were issued at Tambaram whereas the verification came from Pallavaram, and recorded that no opportunity was given to the petitioner to explain the genuineness of the forms. In light of the long lapse of time and the procedural facts, the Court held that the petitioner ought to have been heard before withdrawal of exemption and that the matter required fresh consideration by the assessing authority after giving the petitioner an opportunity to be heard. [Paras 5, 6, 18]

Reassessment order set aside and matter remitted to the assessing authority to pass orders afresh after hearing the petitioner.

Final Conclusion: The reassessment order dated 24.02.2022 for Assessment Year 2013-2014 is not quashed on limitation grounds (pandemic-related extension applied), but is set aside on procedural grounds for failure to afford an opportunity to be heard; the matter is remitted to the assessing authority for fresh adjudication after hearing the petitioner.

Writ jurisdiction under Article 226 - availability of alternative statutory remedy - not to bypass statutory remedies - entertainment of writ against assessment order - exhaustion of alternative remedy

Writ jurisdiction under Article 226 - availability of alternative statutory remedy - entertainment of writ against assessment order - Writ petition challenging the assessment order and seeking relief against consequential freezing of the petitioner's bank account was not maintainable in view of the availability of an alternate statutory remedy of appeal. - HELD THAT: - The Court applied the settled principle that Article 226 is not to be used to short-circuit or bypass statutory remedies, particularly in revenue matters where an effective alternate remedy exists. Reliance was placed on a series of precedents establishing that a writ court must ordinarily refuse to entertain challenges to assessment orders when a statutory appellate forum is available and no exceptional circumstance is shown. The recent authoritative review in State of Maharashtra v. Greatship (Civil Appeal No. 4956 of 2022) was followed, wherein the Supreme Court held that High Courts ought not to entertain writ petitions against assessment orders where the statute provides an appeal and no cogent reason to bypass that remedy is shown. Applying these principles, and noting that the petitioner had the remedy of appeal, the Court found no ground to exercise writ jurisdiction to grant relief against the assessment or the consequential freezing of the bank account and thus disposed of the petition.

Writ petition dismissed on the ground of availability of alternate statutory remedy; petitioner to pursue appeal.

Final Conclusion: The writ petition was dismissed because the petitioner has an effective statutory remedy of appeal against the assessment order; there was no sufficient reason to exercise jurisdiction under Article 226 to grant relief against the assessment or the freezing of the bank account.

Input Tax Credit - arising in the tax period - turnover of purchases under a works contract - consideration received or receivable as the time when turnover arises - entitlement to input tax credit linked to the tax period of turnover

Input Tax Credit - arising in the tax period - turnover of purchases under a works contract - consideration received or receivable as the time when turnover arises - A dealer can claim input tax credit only for the tax period in which the input tax "arises", measured by when the turnover of purchases under a works contract is treated as arising (i.e., the consideration received or receivable in the relevant tax period), and not in a later period merely because reimbursement of the tax component was paid to the selling dealer later. - HELD THAT: - The Court construed Section 9(3) of the Delhi Value Added Tax Act, 2004 to mean that entitlement to input tax credit is limited to input tax "arising in the tax period". The statutory phrase "arising in the tax period" is to be read with Section 12(4) and Rule 4(c) of the Delhi Value Added Tax Rules, 2005, which prescribe that for works contracts the turnover or turnover of purchases arising in a tax period is the consideration received or receivable by the dealer for transfer of property in goods during that tax period. Applying that rule, the Court held that the time when the purchasing dealer's entitlement to claim credit arose was when the consideration became receivable on transfer of property in the goods (as reflected by the tax invoices), and could not be deferred merely because the purchasing dealer withheld and paid the tax component to the seller at a later date pursuant to a mutual arrangement. The Tribunal's conclusion rejecting the belated credit claim for earlier tax periods was therefore upheld as consistent with the statutory scheme and Rules which determine the tax period for claiming credit. [Paras 12, 13, 14, 16, 17]

The question of law is answered for the respondents: input tax credit is claimable only in the tax period in which the input tax "arises" as determined by the consideration received or receivable under Rule 4(c) for works contracts; belated reimbursement to the seller does not shift the tax period for claiming credit.

Final Conclusion: The appeal is dismissed; the Tribunal's rejection of the appellant's claim for input tax credit for the earlier tax periods is upheld and the question of law is decided in favour of the revenue.

Assessment/reassessment under Section 22(1) of the VAT Act - deemed assessment under Section 21(2) of the VAT Act - date of order of assessment as triggering the limitation for reassessment - jurisdiction to reassess - penalty under Section 22(2) of the VAT Act

Assessment/reassessment under Section 22(1) of the VAT Act - deemed assessment under Section 21(2) of the VAT Act - date of order of assessment as triggering the limitation for reassessment - jurisdiction to reassess - Invocation of Section 22(1) is permissible only where there exists an order of assessment and not where assessment is merely deemed under Section 21(2). - HELD THAT: - The Court examined the scheme of Chapter VI and the language of Sections 21 and 22. Section 21(2) creates a deemed assessment where statutory returns, payments and statements are furnished, and Section 21(3) permits selection for reassessment within one calendar year. Section 22(1) permits reassessment "where an assessment or reassessment of a dealer has been made" and prescribes a five year period "from the date of order of assessment." The word "order" was held to connote a formal adjudication by the assessing officer, distinct from the statutory fiction of deemed assessment. Accordingly, the conditions precedent listed in Section 22(1) (under assessment, escape, wrong deduction, incorrect rebate, or effect of a final judicial order) presuppose an existing assessment order in writing; only from that order can the five year limitation be reckoned. In the present cases there was no assessment order passed under Section 21(7) - only deemed assessments under Section 21(2) - and therefore Section 22(1) could not be validly invoked for reassessment of those years. [Paras 24, 25, 28]

Reassessment under Section 22(1) could not be resorted to in respect of the years where only deemed assessment under Section 21(2) existed; the reassessment orders were without jurisdiction and liable to be quashed.

Penalty under Section 22(2) of the VAT Act - assessment/reassessment under Section 22(1) of the VAT Act - jurisdiction to reassess - Penalty imposed under Section 22(2) cannot be sustained where the reassessment under Section 22(1) is held to be without jurisdiction. - HELD THAT: - Section 22(2) contemplates imposition of penalty where the omission leading to assessment or reassessment under Section 22(1) is attributable to the dealer. Because the Court held that the reassessment orders themselves were void for want of an antecedent assessment order (and hence jurisdictionally invalid), the consequential penalty founded upon such reassessment cannot stand. The invalidity of the reassessment removes the statutory foundation required for levy of penalty under Section 22(2). [Paras 26, 27, 28]

The penalty imposed pursuant to the impugned reassessment orders is quashed as it was predicated on jurisdictionally invalid reassessment.

Final Conclusion: Writ appeals dismissed; the High Court's order quashing the reassessment orders and the penalties in respect of Assessment Years 2010-11, 2011-12 and 2012-13 is upheld on the ground that Section 22(1) cannot be invoked where only deemed assessment under Section 21(2) exists and no formal assessment order was passed.