TaxTMI Updates e-Newsletter
Dec 16,2023

Cancellation of GST registration - show cause notice - non speaking order / lack of reasons - application of mind - restoration of registration / status quo ante - remand for fresh adjudication - principles of natural justice

Show cause notice - non speaking order / lack of reasons - application of mind - Impugned show cause notice dated 14.10.2022 and order of cancellation dated 01.11.2022 were liable to be quashed for being without reasons and without application of mind. - HELD THAT: - The Court found that the show cause notice did not set out any reasons for proposing cancellation and that the cancellation order proceeded without proper application of mind, even referring to a non existent reply. Relying on earlier decisions of this Court dealing with identical circumstances, the Court concluded that such non speaking proceedings cannot be sustained and therefore quashed the impugned show cause notice and the order cancelling registration. The Court restored the legal position ante pending a fresh lawful adjudication while preserving the department's lawful power to suspend registration if validly exercised in future. [Paras 3, 4, 7, 8, 10]

Impugned SCN dated 14.10.2022 and cancellation order dated 01.11.2022 quashed; registration restored subject to department's power to act in accordance with law.

Remand for fresh adjudication - principles of natural justice - restoration of registration / status quo ante - Proceedings were remanded for fresh show cause notice and de novo consideration in accordance with law and principles of natural justice, with interim restoration of registration. - HELD THAT: - The Court directed respondents to issue a fresh show cause notice in accordance with law within three weeks and required the petitioner to file a reply within two weeks of receipt; the designated officer was directed to hear the petitioner and pass appropriate orders in accordance with law. In the interim, status quo ante was to be restored so the petitioner's registration stood restored until the fresh lawful adjudication, subject to lawful suspension by the department if and as permitted by law. All other contentions were kept open. [Paras 8, 9, 10, 11, 12]

Matter remanded for fresh show cause notice and de novo adjudication with specified timelines; interim restoration of registration ordered.

Final Conclusion: Writ petition allowed: impugned SCN and cancellation order quashed; registration restored subject to lawful suspension; respondents directed to issue fresh show cause notice within three weeks, petitioner to reply within two weeks, and designated officer to decide afresh in accordance with law and principles of natural justice; all other contentions left open.

Principles of natural justice - personal hearing under Section 75(4) of the CGST Act - duty to furnish material relied upon in a show cause notice - quashing and remand for fresh consideration

Principles of natural justice - personal hearing under Section 75(4) of the CGST Act - Impugned order under Section 73 was passed in breach of principles of natural justice for failure to grant personal hearing and absence of reasons. - HELD THAT: - The Court found that Section 75(4) mandates a personal hearing where an adverse order is contemplated. The order dated 26th July 2023 was passed without affording the petitioner a personal hearing despite concluding against the petitioner. Further, the order is internally contradictory in stating that no reply was filed while also recording that documents submitted were insufficient, and it does not set out reasons for alleged discrepancies so as to enable meaningful response. These deficiencies cumulatively constitute a breach of natural justice and justify interference under Article 226 despite existence of an alternate remedy. [Paras 6]

Order under Section 73 dated 26th July 2023 quashed for breach of natural justice; matter set aside to enable hearing and reasoned decision.

Duty to furnish material relied upon in a show cause notice - quashing and remand for fresh consideration - Failure to furnish details of parameters relied upon in the show cause notice warranted quashing of the order and remand for fresh consideration after furnishing those details and hearing the petitioner. - HELD THAT: - The petitioner repeatedly requested detailed breakups of parameters Nos. 70 and 73 relied upon in the show cause notice; those particulars were not furnished whereas details of parameter No. 72 were provided. The respondent offered no satisfactory explanation for this selective disclosure, merely stating material was available on the portal. Given the absence of the particulars that formed the basis of the demand, the Court directed that parameters Nos. 70 and 73 be furnished within a week, the petitioner be given time to reply, and a personal hearing be fixed, after which the authority shall pass an appropriate order in accordance with law. This constitutes a remand for fresh consideration limited to furnishing the material, hearing the petitioner and deciding afresh. [Paras 6, 8]

Respondent directed to furnish parameter Nos. 70 and 73; petitioner to be permitted to file submissions and be heard; matter remitted for fresh decision in accordance with law.

Final Conclusion: Impugned order under Section 73 dated 26th July 2023 is quashed for breach of natural justice; respondent directed to furnish parameter Nos. 70 and 73, petitioner granted time to reply and be afforded personal hearing, and the authority to decide afresh in accordance with law.

Cancellation of GST registration - processing of cancellation application - maintenance of GST registration during investigation - statutory consequences of alleged violation

Cancellation of GST registration - processing of cancellation application - maintenance of GST registration during investigation - Direction to respondent to take steps for cancellation of the petitioner's GST registration in terms of its application. - HELD THAT: - The petitioner had applied for cancellation of its GST registration after closing its business. Although the respondent was conducting an investigation and had raised queries and earlier rejected the application, no provision was identified that legally required a taxpayer to retain GST registration merely because an investigation was pending. The respondent represented that steps had been initiated to cancel the registration and that a technical glitch had delayed completion. The petitioner agreed to join the investigation. Having regard to these circumstances, the Court directed the respondent to effect cancellation in terms of the petitioner's application, while recording that this direction does not prevent the respondent from initiating or continuing any statutory action if a statutory violation by the petitioner is established. [Paras 14, 15]

Respondent directed to take steps to cancel the petitioner's GST registration as applied for; respondents remain free to take other statutory steps if violations are found.

Final Conclusion: Writ petition disposed by directing cancellation of the petitioner's GST registration in accordance with its application; liberty reserved to the respondents to take other steps in case of statutory violations.

Natural justice / right to be heard - service of notice by electronic means and portal upload - alternate remedy of appeal - condonation of delay in filing appeal - pre-deposit under Section 107(6) of the CGST Act

Alternate remedy of appeal - condonation of delay in filing appeal - pre-deposit under Section 107(6) of the CGST Act - Whether the writ petition should be entertained or the petitioner should be relegated to the alternate remedy of appeal and, if relegated, on what terms. - HELD THAT: - The Court found that the core disputes involve factual questions (including service of notices and compliance) which require adjudication on record and evidence and therefore are not appropriate for resolution under Article 226. In the exercise of its discretion the Court relegated the petitioner to the statutory appellate remedy and directed that an appeal filed within four weeks be entertained without objection as to limitation, in view of the bona fide pursuit of the present petition. The Court further ordered that the petitioner may apply to de-freeze the bank account after filing the appeal and on deposit of the mandatory pre-deposit required under Section 107(6) of the CGST Act, and directed the respondents to decide such application within two weeks of filing. All contentions of the parties were kept open for adjudication by the Appellate Authority.

Petitioner relegated to alternate remedy of appeal; appeal filed within four weeks to be admitted without objection as to limitation; de-freeze application to be made after filing appeal and on deposit of mandatory pre-deposit under Section 107(6); respondents to decide de-freeze application within two weeks; contentions kept open.

Natural justice / right to be heard - service of notice by electronic means and portal upload - Whether notices and hearing were validly served and whether principles of natural justice were violated. - HELD THAT: - The Court recorded a factual dispute between the parties on service of notices: the petitioner contended non-receipt and lack of hearing, while the respondents relied on service to the e-mail ID provided and portal uploads. The petitioner admitted not intimating change of e-mail after changing consultants and could not satisfactorily explain failure to check the portal. Because these matters turn on factual findings and verification of service, the Court declined to adjudicate them under Article 226 and remitted the controversy to the appellate forum for determination on merits.

Factual disputes on service and alleged breach of natural justice not decided on merits and remitted to the Appellate Authority for adjudication.

Final Conclusion: Writ petition disposed by relegating petitioner to the alternate remedy of appeal (to be filed within four weeks and entertained without objection as to limitation); directives given as to filing of de-freeze application and mandatory pre-deposit and its disposal within two weeks; substantive factual disputes concerning service and natural justice to be adjudicated by the Appellate Authority; all contentions reserved.

Natural justice - Right to personal hearing - Speaking order - Remand for fresh adjudication - Reliance on Rule 89 of the CGST Rules, 2017 without prior notice to the assessee - Nexus between input tax credit and export of services

Natural justice - Right to personal hearing - Speaking order - The validity of the Order in Original dated 30th December 2021 and the Order in Appeal dated 4th May 2022 insofar as they were passed without affording the petitioner adequate opportunity and without reasons. - HELD THAT: - The Court found that the Order in Original was passed before the petitioner uploaded documentary material and did not contain reasons for rejection. The Appellate Authority relied on Rule 89 of the CGST Rules, 2017 despite that not being the basis of the show cause notice or being put to the petitioner, and did not seek necessary explanations before rejecting the appeal. These defects amounted to an apparent violation of the principles of natural justice. In the interests of justice the Court held that the impugned orders could not stand and required fresh adjudication by the original authority with an opportunity of personal hearing and a speaking order.

Order in Original dated 30th December 2021 and Order in Appeal dated 4th May 2022 quashed and set aside for breach of principles of natural justice; matter remitted for fresh adjudication.

Remand for fresh adjudication - Nexus between input tax credit and export of services - Reliance on Rule 89 of the CGST Rules, 2017 without prior notice to the assessee - The course to be followed on remand for deciding the refund application filed on 1st November 2021 (for period August 2021). - HELD THAT: - The Court restored the refund application to the file of the original adjudicating authority and directed that the authority give notice of hearing to the petitioner to obtain explanation on the grounds on which rejection is contemplated, including any contentions relating to nexus or documentary proof. The authority was directed to pass a speaking order after personal hearing and decide the application within four months from the date of that hearing. All substantive contentions were kept open for fresh consideration by the authority.

Refund application restored to respondent no. 3 for fresh adjudication; notice and personal hearing to be given and a speaking order to be passed within four months; substantive contentions left open.

Final Conclusion: The High Court quashed the impugned Order in Original and Order in Appeal for breach of natural justice, restored the refund application for the period August 2021 to the original authority for fresh adjudication after notice and personal hearing, and directed that a speaking order be passed within four months; all contentions remain open.

Refund of input tax credit - zero-rated supply - relevant period - Rule 89(4) of the CGST Rules - provisional refund under Section 54(3) - electronic ledger - interpretation of Circular No.125/44/2019-GST - Circular dated 31 March 2020 (clarification) - obligation to consider subsequent departmental clarification

Rule 89(4) of the CGST Rules - Circular No.125/44/2019-GST - Circular dated 31 March 2020 (clarification) - refund of input tax credit - Validity of the Appellate Authority's application of Circular dated 18 November 2019 in rejecting/recalling the refund without considering Rule 89(4) and the subsequent clarification dated 31 March 2020 - HELD THAT: - The Court found that the petitioner filed a refund claim for the relevant period as defined under Rule 89(4) and that the electronic ledger permissibly reflected ITC including credits carried from the prior period. The Appellate Authority erred in applying Circular dated 18 November 2019 to preclude clubbing of credits across periods without addressing or giving effect to the clarification contained in the Circular dated 31 March 2020 and without reconciling that view with the statutory formula and the concept of 'relevant period' under Rule 89(4). The Appellate Authority ought to have recorded a finding on the effect of the subsequent departmental clarification and on whether the petitioner's refund claim complied with Rule 89(4). In view of these omissions and the evident inconsistency with Rule 89(4) as clarified by the later Circular, the impugned order could not be sustained. [Paras 10, 11]

The impugned order applying the earlier Circular was quashed as the Appellate Authority erred in failing to consider Rule 89(4) and the subsequent clarification dated 31 March 2020.

Appeal remand - interpretation of Circular dated 31 March 2020 (clarification) - Disposition of the departmental appeal and direction for fresh consideration - HELD THAT: - The Court restored the departmental appeal to the file of the Appellate Authority and directed that the appeal be decided afresh in light of the Court's observations, in particular by considering the effect of the Circular dated 31 March 2020. All contentions of the parties in the appeal proceedings were left open for fresh adjudication. The Court imposed a timeline for expeditious disposal. [Paras 12]

Appeal restored for fresh decision by the Appellate Authority within four months, with parties' contentions kept open.

Interim protection from coercive action - status quo pending fresh adjudication - Whether the department may take coercive steps pending fresh adjudication - HELD THAT: - The Court directed that until the Appellate Authority decides the appeal afresh, the department shall not take any coercive action on the basis of the subsequent order dated 18 October 2022 passed by the Deputy Commissioner, and that the order to be passed by the Appellate Authority shall govern the earlier administrative action. This protective direction preserves the petitioner's position pending fresh adjudication. [Paras 12]

Department restrained from taking coercive action pending the Appellate Authority's fresh decision; the future Appellate Authority order will govern the earlier administrative order.

Final Conclusion: The Court quashed the Appellate Authority's order dated 18 September 2020 for failing to reconcile its approach with Rule 89(4) and the departmental clarification of 31 March 2020, restored the departmental appeal for fresh consideration in light of those observations to be decided within four months, kept all contentions open, and restrained the department from taking coercive action pending the fresh adjudication.

Composite supply - works contract - immovable property - test of permanency - intention and fact of attachment - binding nature of advance ruling under Section 103(1) of the CGST Act, 2017

Works contract - immovable property - test of permanency - composite supply - intention and fact of attachment - Whether supply of a cattle feed plant involving supply of equipment/machinery together with erection, installation and commissioning services (with or without civil work) is a works contract service or a composite supply of goods and services falling outside the definition of works contract. - HELD THAT: - The authority examined the definition of 'works contract' in Section 2(119) of the CGST Act, 2017 which applies only where the supply relates to an immovable property. Applying the General Clauses Act and Transfer of Property Act principles, and following the determinative test of permanency - considered in conjunction with the intention and fact of attachment - the authority found on the material before it (photographs, contract terms and nature of supplies) that the cattle feed plant and its constituent machinery are embedded/fixed so as to constitute immovable property. The authority relied on Supreme Court jurisprudence (including the reasoning in Duncans Industries Ltd. and Municipal Corporation of Greater Bombay) to hold that where plant and machinery are permanently fixed with the intention of running the factory and cannot be used in the same position elsewhere without dismantling and re-erection, their movable character is extinguished. Distinctions were drawn between earlier rulings relied on by the appellant (e.g., Sirpur Paper Mills, Solid & Correct Engineering Works) and the present facts; those precedents were held fact-sensitive and not analogous. The authority also noted the Board clarification that construction, installation and commissioning of a dairy plant on turnkey basis constitutes a works contract and observed that advance rulings are binding only on the applicant and the concerned officer under Section 103(1), limiting the precedential effect of other GAAR orders. On these bases the authority concluded that the appellant's supplies (with or without civil work) result in emergence of an immovable property and therefore fall within the definition of 'works contract' and are to be treated as supply of services. [Paras 21, 22, 23, 28, 29]

Supply of the cattle feed plant together with erection, installation and commissioning (with or without civil work) amounts to a works contract service and not merely a composite supply of goods; the advance ruling of GAAR classifying the supply as works contract is upheld.

Final Conclusion: The appeal is rejected and the Advance Ruling No. GUJ/GAAR/R/2022/14 dated 14.03.2022 is upheld, the supply in question being held to constitute a works contract (supply of services) as determined by the authority.

Exemption for supplies by Unit Run Canteens to authorized customers - scope and applicability of Canteen Stores Department (CSD) notifications - refund entitlement under Notification conferring fifty per cent refund to CSD - advance ruling admissibility under Section 97(2)(b) of the CGST Act

Exemption for supplies by Unit Run Canteens to authorized customers - scope and applicability of Canteen Stores Department (CSD) notifications - Applicant's entitlement to exemption from levy of CGST on goods sold to authorized customers as a 'Unit Run Canteen'. - HELD THAT: - The advance ruling application sought applicability of the exemption in Notification No. 07/2017-exempting supplies by CSD and Unit Run Canteens to authorized customers. The Authority examined the Notification's table and the related Notification No. 06/2017 which identifies the CSD, Unit Run Canteens and authorized customers as entities under the Ministry of Defence. The applicant, however, is a subsidiary canteen under the Central Police Force Canteen System established under the Ministry of Home Affairs and constituted by the letter dated 28.11.2013. The CPFCS instruments do not use or incorporate the terms 'Canteen Stores Department' or 'Unit Run Canteens of the CSD'. The exemption in the Notification is thus confined to the CSD/its Unit Run Canteens and authorized customers under the Ministry of Defence and does not extend to the applicant formed under the Ministry of Home Affairs. Consequently, the applicant is not covered by the Notification and cannot claim the exemption from CGST on supplies to authorized customers. [Paras 12, 13]

Applicant is not a Unit Run Canteen within the meaning of the Notification and is not exempt from levy of CGST on goods sold to authorized customers.

Exemption for supplies by Unit Run Canteens to authorized customers - Entitlement to a similar exemption under State GST law. - HELD THAT: - Having concluded that the applicant is not covered by the central Notification granting exemption to CSD/Unit Run Canteens, the Authority observed that corresponding State GST exemptions are issued on the same subject-matter. Since the applicant does not qualify for the central exemption, it likewise cannot claim analogous exemption under the State GST notifications. [Paras 14]

Applicant is not entitled to any similar exemption under State GST.

Refund entitlement under Notification conferring fifty per cent refund to CSD - scope and applicability of Canteen Stores Department (CSD) notifications - Applicant's eligibility to claim refund of CGST and SGST paid on inward supplies pursuant to the Notification conferring fifty per cent refund to the CSD. - HELD THAT: - The Authority examined Notification No. 06/2017 which specifically specifies the Canteen Stores Department under the Ministry of Defence as entitled to claim fifty per cent refund of central tax on inward supplies intended for subsequent supply to Unit Run Canteens or authorized customers of the CSD. The Notification's entitlement is explicitly confined to the CSD under the Ministry of Defence. As the applicant is constituted under the Ministry of Home Affairs as part of the Central Police Force Canteen System, the notification does not apply to it. Therefore, the applicant cannot claim the refund benefit under that Notification for CGST; similarly, no entitlement under SGST follows. [Paras 15, 16]

Applicant is not eligible to claim refund of CGST and SGST paid on goods purchased under the Notification conferring refund to the CSD.

Final Conclusion: The Authority ruled that the applicant, being a subsidiary canteen of the Central Police Force Canteen System under the Ministry of Home Affairs, is not a 'Unit Run Canteen' covered by the CSD notifications; consequently the applicant is not entitled to exemption from CGST or similar State GST exemptions on supplies to authorized customers, nor to the refund benefit specified for the CSD.

Unrealized gains on revaluation of forward contracts as the bank accounts - depreciation in value of investment in HTM Securities - disallowances made u/s 36(1) (viia) - disallowance made u/s 14A - disallowances on account of AFS and HFT category of investments by relying upon the decisions which has not reached finality and even when the assessing authority rightly disallowed the depreciation on investment of Available for Sale (AFS) and held for trading (HFT) category investment and added to the taxable income - delay of 261 days in filing this special leave petition

HELD THAT:- The explanation offered for condonation of delay is not satisfactory.

Hence, the application seeking condonation of delay in filing this petition is dismissed. Consequently, the special leave petition is dismissed on the ground of delay.

The questions of law, if any, which arise in this special leave petition are kept open.

Scope of of Sections 44BB(1) and 44BB(2) -amount paid or payable for the purpose of computation of the ‘presumptive taxable income’ - whether the service tax collected by the assessees in the course of provision of services and facilities in connection with, or supply of plant and machinery on hire, in the prospecting for, or extraction or production of, mineral oils in India, was liable to be included in the amount paid or payable for the purpose of computation of the ‘presumptive taxable income’ of the assessee? - as decided by HC [2022 (11) TMI 385 - UTTARAKHAND HIGH COURT] amount reimbursed to the assessee (service provider) by the ONGC (service recipient), representing the service tax paid earlier by the assessee to the Government of India, would not form part of the aggregate amount referred to in Clauses (a) and (b) of sub-section (2) of Section 44BB of the Income Tax Act.

HELD THAT:- We are not inclined to interfere in the matter. The special Leave Petition is dismissed

Violation of principles of natural justice - right to opportunity of hearing by video-conference - quashing and remand for fresh adjudication - acceptance of local revenue certificates and requirement of translation - availability of alternative statutory remedy

Violation of principles of natural justice - right to opportunity of hearing by video-conference - quashing and remand for fresh adjudication - Whether the assessment order dated 26.09.2022 is vitiated by denial of opportunity of hearing and therefore liable to be quashed and remitted for fresh consideration. - HELD THAT: - The Court examined the sequence of notices and the petitioner's request for a video-conference hearing, including an e-mail seeking such hearing for a high-pitch assessment. The Court found that the request for personal hearing by video-conference was made and was not considered by the assessing authority. This failure amounted to denial of a vital opportunity of hearing and thereby violated the principles of natural justice. In these circumstances the assessment order could not stand and required quashing with direction for fresh adjudication after granting the hearing sought by the petitioner. [Paras 7, 9]

Impugned assessment order dated 26.09.2022 quashed; matter remitted for fresh assessment after granting video-conference hearing to the petitioner.

Acceptance of local revenue certificates and requirement of translation - Whether the Village Administrative Officer certificates issued in Tamil could be accepted and if the petitioner may be directed to furnish translations. - HELD THAT: - The Court noted the practice in the State that VAO certificates are issued in Tamil and observed that if a translation is required the assessing authority may direct the petitioner to submit translated copies. The Court directed the petitioner to produce the VAO certificates and their translations before the assessing authority during the remand assessment, thereby ensuring the documents are considered rather than rejected on language grounds alone. [Paras 8, 9]

Petitioner permitted to submit VAO certificates in Tamil along with translations; assessing authority to consider them during the remand assessment.

Availability of alternative statutory remedy - Whether existence of an alternative statutory remedy before the Commissioner (Appeals) precluded exercise of writ jurisdiction in the present case. - HELD THAT: - The respondents contended that an effective alternative remedy existed before the Commissioner (Appeals). The Court observed the established principle that writ jurisdiction may nevertheless be exercised where fundamental rights or principles of natural justice are violated. Having found a breach of natural justice (failure to grant the requested hearing), the Court proceeded to quash the assessment despite the availability of the statutory appellate remedy. [Paras 7]

Existence of an alternative statutory remedy did not preclude exercise of writ jurisdiction in view of the found violation of principles of natural justice.

Final Conclusion: Writ petition allowed: the assessment order dated 26.09.2022 for assessment year 2020 to 2021 is quashed; respondents directed to grant video-conference hearing, permit submission of VAO certificates with translations, and complete reassessment within eight weeks from receipt of the order.

Unexplained money addition under Section 69A - Question of law versus question of fact - Appellate interference under Section 260A - Non-resident assessee and maintenance of books - Appreciation of documentary evidence by fact-finding authorities

Unexplained money addition under Section 69A - Question of law versus question of fact - Appreciation of documentary evidence by fact-finding authorities - Appellate interference under Section 260A - Deletion of the addition made under Section 69A was sustainable on facts and did not raise a substantial question of law so as to warrant interference under Section 260A. - HELD THAT: - The Tribunal found that the assessee, a non-resident whose only Indian-source income was bank interest and refund interest, had explained the alleged unexplained credits by documentary material showing transfers from his Dubai account to an NRO account and other specific receipts. The Tribunal also noted the statutory phrase "if any" in Section 69A and took a view on applicability, but went on to examine and accept the factual explanations and records. Absent any allegation of perversity in the Tribunal's factual findings, the High Court under Section 260A will not reappraise or reweigh evidence. The revenue itself requested that the broader question on the applicability of Section 69A to non-residents be left open for another case; the Court acceded to that request and declined to decide that question in the present appeal. Consequently, the deletion of the addition based on the Tribunal's factual appreciation of documentary evidence is upheld and does not present a substantial question of law for this Court to entertain. [Paras 7, 8, 10]

The Tribunal's deletion of the addition under Section 69A is sustained as a factual conclusion not warranting interference under Section 260A; no substantial question of law is made out.

Final Conclusion: The appeal is dismissed. The High Court declines to entertain a substantial question of law; the Tribunal's factual finding and deletion of the addition under Section 69A are upheld, and the broader question of Section 69A's applicability to non-residents is left open for determination in an appropriate case.

Arm's Length Price (ALP) - comparability in transfer pricing - functional comparability - Transaction Net Margin Method (TNMM) - Knowledge Process Outsourcing (KPO) versus Business Process Outsourcing (BPO) - Rule 10B(2) pre-conditions for comparables - findings of fact and absence of substantial question of law

Arm's Length Price (ALP) - comparability in transfer pricing - Transaction Net Margin Method (TNMM) - findings of fact and absence of substantial question of law - Infosys BPO Ltd. was rightly excluded as a comparable for benchmarking under TNMM. - HELD THAT: - The Tribunal's rejection of Infosys BPO Ltd. as a comparable was upheld on factual grounds. Infosys BPO is a significantly larger and functionally different entity - with vastly higher turnover, net worth, and employee strength, brand value and ownership of intellectual property - whereas the assessee performs limited, system-driven trading support with fresh graduates and without market risk. The court noted that none of the remaining comparables matched Infosys in size and that prior decisions had similarly excluded Infosys for such dissimilarities; consequently the functional and scale differences justified exclusion and no substantial question of law arose from these findings. [Paras 6]

Infosys BPO Ltd. rejected as a comparable; Tribunal's factual finding affirmed.

Functional comparability - comparability in transfer pricing - Rule 10B(2) pre-conditions for comparables - findings of fact and absence of substantial question of law - Acropetal Technologies Ltd. was correctly excluded as a comparable. - HELD THAT: - The Tribunal's exclusion was supported by the record showing that the TPO treated Acropetal's engineering design segment as IT-enabled services without adequate analysis. Acropetal incurred substantial on-site development expenses and performed functions materially different from the assessee's offshore, low-end ITeS trading support activities. The lack of segmental analysis and the functional mismatch between engineering design services and the assessee's operations warranted exclusion on factual grounds. [Paras 7]

Acropetal Technologies Ltd. rejected as a comparable; Tribunal's factual finding affirmed.

Knowledge Process Outsourcing (KPO) versus Business Process Outsourcing (BPO) - functional comparability - comparability in transfer pricing - findings of fact and absence of substantial question of law - e-Clerx Services Ltd. was properly excluded as a comparable. - HELD THAT: - The Tribunal's exclusion of e-Clerx was sustained on the basis that e-Clerx is a high-end KPO engaged in data analytics, automation and process re-engineering, operating at scale with substantial proprietary platforms and higher skilled services. In contrast, the assessee provided low-end, system-driven trading support, employing primarily fresh graduates for data entry. The qualitative differences in nature of services, scale and business model (outsourcing model and platform-driven automation) meant e-Clerx was functionally dissimilar and not an appropriate comparable for determining ALP under TNMM. [Paras 8]

E-Clerx Services Ltd. rejected as a comparable; Tribunal's factual finding affirmed.

Final Conclusion: The High Court found no substantial question of law arising from the Tribunal's factual findings rejecting Infosys BPO Ltd., Acropetal Technologies Ltd. and e-Clerx Services Ltd. as comparables for TNMM benchmarking; the appeal is dismissed.

Extinguishment of pre-CIRP statutory dues upon approval of the resolution plan - Binding effect of an approved resolution plan on the Central Government and tax authorities - Prohibition on initiation or continuation of proceedings in respect of claims not part of the resolution plan - Retrospective and clarificatory effect of the 2019 Amendment to the Insolvency and Bankruptcy Code - Income-tax claims arising prior to approval of resolution plan

Extinguishment of pre-CIRP statutory dues upon approval of the resolution plan - Binding effect of an approved resolution plan on the Central Government and tax authorities - Prohibition on initiation or continuation of proceedings in respect of claims not part of the resolution plan - Income-tax claims arising prior to approval of resolution plan - Whether income-tax demands, assessments and penalties attributable to periods prior to approval of a resolution plan can be claimed or recovered by the Revenue after the adjudicating authority has approved the resolution plan. - HELD THAT: - The Court applied the law laid down in Ghanshyam Mishra & Sons Pvt Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., holding that once a resolution plan is approved under Section 31(1) of the Code the claims as provided in the resolution plan stand frozen and are binding on the corporate debtor and its creditors, including the Central Government and its authorities. The 2019 Amendment to the Code was treated as declaratory and clarificatory, covering tax authorities as "other stakeholders" and operating retrospectively to prevent continuation of proceedings in respect of pre-approval claims not included in the plan. On the facts, the public announcements initiating CIRP called for submission of claims and the Revenue did not file claims within the prescribed period; the impugned assessment orders, demand notices and penalty orders were issued after approval of the respective resolution plans (05.11.2019 in WP(C) 10528/2022 and 21.02.2022 in WP(C) 10628/2022) and after the public announcement dates. Applying the stated principle, the Court held that tax demands and related proceedings in respect of the periods prior to approval of the resolution plans stood extinguished and could not be continued or revived by the Revenue. The contention that the State exchequer is not bound by the resolution process was rejected in view of the binding effect of the approved resolution plan and the declaratory effect of the 2019 Amendment. [Paras 9, 10, 11]

Pre-approval income-tax demands, assessments and penalties in respect of the specified assessment years stood extinguished on approval of the resolution plans; the Revenue cannot claim or recover such amounts after approval.

Final Conclusion: Both writ petitions are allowed; the impugned notices, assessment orders and penalty orders in respect of the stated assessment years are set aside as barred by the binding effect of the approved resolution plans and the declaratory import of the 2019 Amendment to the Code.

Pendency of appeal - admission of appeal - eligibility for settlement under the Direct Tax Vivad Se Vishwas Act, 2020 - CBDT circulars not to be adverse to assessee - Section 10 powers analogous to Section 119

Pendency of appeal - eligibility for settlement under the Direct Tax Vivad Se Vishwas Act, 2020 - Interpretation of the requirement that an appeal be "pending" as on the specified date for purposes of eligibility under the VSV Act, 2020. - HELD THAT: - The Court held that for the purpose of Section 2(1)(a) of the VSV Act the word "pending" means that an appeal which has been filed remains pending until it is adjudicated upon and there is no requirement that the appeal must be valid, competent or admitted on the specified date. The Court relied on established authorities holding that whether an appeal is competent or maintainable is a question for the appellate forum to determine and that an appeal does not cease to be an appeal merely because it may later be found to be incompetent or barred by limitation. Applying that principle, an appeal filed before an appellate forum within the period contemplated by the scheme is to be treated as pending for the purposes of the VSV Act until adjudicated, and thus satisfies the statutory predicate for filing a declaration under the scheme. [Paras 11, 12, 13]

An appeal filed and awaiting adjudication is to be treated as pending on the specified date; no separate requirement of validity, competence or admission on that date is necessary for eligibility under the VSV Act.

Admission of appeal - CBDT circulars not to be adverse to assessee - Section 10 powers analogous to Section 119 - Validity of FAQ No.59 of Circular No.21/2020 to the extent it treats admission of an appeal as a condition precedent to pendency under the VSV Act. - HELD THAT: - The Court held that the CBDT's FAQ which imposed a condition that an appeal must be "admitted" before a declaration could be filed is contrary to the statutory scheme. While recognising that Section 10 confers power on the CBDT to issue directions, the Court observed that such power is analogous to Section 119 of the Income-tax Act and does not permit issuance of circulars adverse to assessees. Relying on precedents that circulars inconsistent with statutory provisions have no legal existence, the Court concluded that FAQ No.59 insofar as it contemplates admission of appeal as a precondition must be ignored. [Paras 15, 16, 17, 18]

FAQ No.59 requiring admission of appeal as a condition precedent is contrary to law and must be ignored; the requirement of admission cannot be read into the VSV Act.

Eligibility for settlement under the Direct Tax Vivad Se Vishwas Act, 2020 - Correctness of the Designated Authority's orders rejecting the petitioner's declaration under the VSV Act. - HELD THAT: - Applying the interpretation that a filed appeal remains pending until adjudicated and that the CBDT circular cannot add the precondition of admission, the Court found the Designated Authority's rejection of the declaration on the ground that the appeal was not pending on the specified date to be legally unsustainable. The Court directed that the declarations rejected by the orders dated 31.03.2021 and 15.04.2021 be set aside and that the authority process the petitioner's claim under the VSV Act in accordance with law. [Paras 19]

The orders rejecting the declaration dated 31.03.2021 and 15.04.2021 are set aside and the Designated Authority is directed to process the petitioner's declaration under the VSV Act.

Final Conclusion: The writ petition is allowed: the Court rules that an appeal filed and awaiting adjudication is "pending" for the specified date under the VSV Act; FAQ No.59 to the extent it requires admission of the appeal is contrary to law and must be ignored; the orders rejecting the declaration are set aside and the Designated Authority is directed to process the petitioner's claim under the scheme.

Tax deduction at source - fee for technical services - Section 40(a)(i) disallowance - Section 195 liability to deduct tax - consequence of appellate deletion on consequential recovery proceedings

Tax deduction at source - fee for technical services - Section 195 liability to deduct tax - Validity of the notice dated 10.10.2017 issued under section 201 and the consequential letter dated 25.03.2021 rejecting objections where the addition for failure to deduct TDS had been deleted on appeal - HELD THAT: - The Court recorded that the addition made by the Assessing Officer under Section 40(a)(i) for alleged failure to deduct tax at source in respect of management fees was deleted by the Commissioner of Income Tax (Appeals) on the ground that the payments did not constitute 'fee for technical services' liable to deduction under Section 195. The Tribunal later sustained the CIT(A)'s order, observing that the AO had not identified the 'highly technical services' or the agreement clause showing that expertise was 'made available', and that earlier favorable decisions for the assessee in related assessment years were not challenged. The revenue did not pursue an appeal against the Tribunal's order (said to be because of low tax effect) and in any event an appeal is now time-barred. In these circumstances the Court concluded that the impugned notice and the impugned letter rejecting objections could not be sustained and must be set aside. [Paras 4, 5, 6, 7]

Both the impugned notice dated 10.10.2017 and the impugned letter dated 25.03.2021 are set aside.

Final Conclusion: The writ petition is disposed of by quashing the impugned notice and the letter rejecting objections, in view of the deletion of the addition by the CIT(A) which was sustained by the Tribunal and the absence of a successful appeal by the revenue.

Section 148A - conduct of enquiry and opportunity before issuing notice under Section 148 - Validity of notice under Section 148 issued after 01.04.2021 without compliance of Section 148A - Violation of principle of natural justice - Maintainability of writ petition despite availability of alternate statutory remedy - Remand for fresh consideration to comply with Section 148A and supply of material relied upon

Maintainability of writ petition despite availability of alternate statutory remedy - Violation of principle of natural justice - Writ petition under Article 226 is maintainable notwithstanding availability of appeal under Section 246A, where proceedings are vitiated for failure to follow mandatory procedure and breach of natural justice. - HELD THAT: - The Court applied settled principles that availability of an alternate statutory remedy is a discretionary, not absolute, bar to writ jurisdiction and may be dispensed with where there is a violation of principles of natural justice or proceedings are wholly without jurisdiction. Observing that the amended scheme under Sections 147-149 and 151 imports mandatory procedural safeguards (notably Section 148A) which were not complied with before issuing the notice under Section 148, the Court found that the omission amounted to a breach of natural justice and justified exercise of writ jurisdiction despite the existence of an appellate remedy under Section 246A. Reliance on authorities recognising exceptions to exclusion of writ jurisdiction was applied to the facts to hold the petition maintainable. [Paras 9, 10, 11, 14]

Writ petition is maintainable; alternate remedy does not bar exercise of writ jurisdiction in these facts.

Validity of notice under Section 148 issued after 01.04.2021 without compliance of Section 148A - Section 148A - conduct of enquiry and opportunity before issuing notice under Section 148 - Violation of principle of natural justice - Notice issued under Section 148 on 09.06.2021 and consequent reassessment are vitiated for non-compliance with Section 148A and resulting breach of natural justice. - HELD THAT: - The Court noted that the Finance Act, 2021 amendments (effective 01.04.2021) make compliance with Section 148A mandatory before issuing a notice under Section 148, requiring enquiry (with prior approval where necessary), a show-cause notice, consideration of the assessee's reply and a recorded order under Section 148A(d). Finding that no Section 148A proceedings were conducted before issuance of the Section 148 notice in this case, and that the petitioner's request for materials relied upon was rejected without regard to the amended scheme and subsequent Supreme Court dictum in Ashish Agrawal, the Court concluded that the assessment proceedings were vitiated by breach of natural justice and failure to follow the statutory procedure. [Paras 6, 7, 8, 12, 13]

Notice and assessment under Sections 147/148 are set aside as vitiated for non-compliance with Section 148A and breach of natural justice.

Remand for fresh consideration to comply with Section 148A and supply of material relied upon - Section 148A - conduct of enquiry and opportunity before issuing notice under Section 148 - Matter is remitted to the revenue authorities to treat the issued notice as if under Section 148A and to proceed afresh complying with Section 148A and the guidance in Ashish Agarwal, including consideration of the assessee's replies and supply of material relied upon where applicable. - HELD THAT: - Having set aside the assessment order, the Court directed that the respondents reconsider the matter afresh by treating the earlier notice as a notice under Section 148A and by conducting enquiry, issuing show-cause notice, considering replies and passing a reasoned order under Section 148A(d) with prior approval of the specified authority where required. The Court expressly remitted the case for fresh decision in accordance with Section 148A and the Supreme Court's decision in Ashish Agarwal to ensure compliance with procedural safeguards and fair opportunity to the assessee. [Paras 15]

Assessment order set aside and matter remitted to the authorities for fresh proceedings in accordance with Section 148A and Ashish Agarwal.

Final Conclusion: Writ petition allowed; assessment order dated 30.03.2022 set aside as proceedings under Section 148 were initiated without mandatory compliance with Section 148A, causing breach of natural justice. Matter remitted to the revenue to treat the notice as under Section 148A and to proceed afresh complying with the statutory procedure and the Supreme Court's guidance.

Reopening of assessment - failure to disclose fully and truly all material facts - change of opinion - reasons to believe - reopening under section 147/148 of Income Tax Act

Reopening of assessment - failure to disclose fully and truly all material facts - reasons to believe - change of opinion - reopening under section 147/148 of Income Tax Act - Validity of the notice issued under section 148 and the order disposing objections where the assessment for the year had been completed more than four years earlier. - HELD THAT: - The Court held that where a notice under section 148 is issued after the four-year period, proceedings under section 147 can be valid only if there is failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. The reasons recorded for reopening relied entirely upon material already available in the assessment record and the agreement produced by the petitioner; there is nothing in the reasons that demonstrates non-disclosure of material facts by the petitioner. A specific query on the capital gain in question was raised during assessment and the petitioner furnished a detailed reply with computation and documents on 31.10.2014; the assessment was thereafter completed under section 143(3). The absence of an express reference to that query in the assessment order does not mean the matter was not considered. The Court found that the Assessing Officer's action amounted to a mere change of opinion, and that such change of opinion does not constitute a valid 'reason to believe' that income has escaped assessment sufficient to sustain reopening after four years. Reliance on the assessment records to re-examine matters already placed before the Assessing Officer, without any foundation of non-disclosure or obscured material facts, does not satisfy the statutory test for reopening under section 147/148. [Paras 7, 8, 9, 10]

The notice dated 26.03.2019 under section 148 and the order dated 20.11.2019 disposing of objections are quashed and set aside.

Final Conclusion: The petition is allowed; the High Court set aside the reopening notice and the order disposing of objections, holding that the reopening was based on a change of opinion and that there was no failure by the assessee to disclose material facts necessitating reopening after the four-year period.

Right to be heard under Section 148A - Show cause notice as statutory opportunity to submit reply - Obligation on Assessing Officer to consider reply before passing order under Section 148A(d) - Remand for fresh consideration of reply

Right to be heard under Section 148A - Obligation on Assessing Officer to consider reply before passing order under Section 148A(d) - Remand for fresh consideration of reply - Whether the order passed under Section 148A(d) and the consequent notice under Section 148 could stand without consideration of the assessee's reply to the show cause notice dated 19.05.2022, and what relief should be granted. - HELD THAT: - The Court observed that the amended law w.e.f. 01.04.2021 confers a statutory right of being heard by issuance of a show cause notice under Section 148A and imposes a corresponding obligation on the Assessing Officer to consider any reply before passing an order under Section 148A(d). The factual dispute was confined to whether the Assessing Officer received or considered the petitioner's reply submitted after legible foundational material was supplied. Rather than quashing the impugned order and notice outright (which would prolong proceedings already commenced under Section 148), the Court adopted an expedient middle path. The matter was remitted for the limited purpose of enabling the Assessing Officer to consider the petitioner's reply to the show cause notice dated 19.05.2022; if on such consideration the reply is found satisfactory the Assessing Officer is to drop the proceedings and recall the order under Section 148A(d), and if not, he may proceed under Section 148 of the amended Act. The Court further directed that while complying with this mandate the Assessing Officer shall not be influenced or prejudiced by the earlier impugned order and notice.

Petition disposed directing the Assessing Officer to consider the reply to the show cause notice dated 19.05.2022 and, on such consideration, either recall the order under Section 148A(d) and drop proceedings if the reply is satisfactory or proceed under Section 148 if not; the Assessing Officer shall not be influenced by the impugned order or notice.

Final Conclusion: Writ petition disposed of by directing the Assessing Officer to consider the assessee's reply to the Section 148A show cause notice dated 19.05.2022 and thereafter either recall the Section 148A(d) order and drop proceedings if the reply is satisfactory, or proceed under Section 148 of the amended Act if not; no costs.

Rectification of intimation under Section 154 - mistake apparent from the record - exemption under Section 10 - classification of receipts as interest vis-a -vis dividend - power to amend intimation under section 143(1)

Rectification of intimation under Section 154 - mistake apparent from the record - classification of receipts as interest vis-a -vis dividend - exemption under Section 10 - Whether the assessee's application under Section 154 seeking rectification of the intimation to treat the disputed receipts as exempt interest (instead of dividend) should be allowed or requires fresh verification. - HELD THAT: - The Tribunal observed that the power of rectification under Section 154 extends to amendment of an intimation or deemed intimation under Section 143(1) and may be exercised even at the appellate stage, having regard to precedents recognising the Assessing Officer's competence to rectify mistakes in intimation. The assessee had maintained that the receipts were interest from investments in government entities and therefore exempt under Section 10, though they were inadvertently described as dividend in the return. The CIT(A) rejected the rectification claim on the ground that the contention was not a patent mistake and required examination. In the interest of justice and having regard to authorities cited on the scope of rectification and the obligation of tax authorities to verify entitlement to relief, the Tribunal restored the matter to the file of the Ld. CIT(A) for necessary verification of the nature of receipts and, if the claim is found correct, to grant relief in accordance with law. [Paras 9, 10]

Matter restored to the file of the Ld. CIT(A) for verification and appropriate relief if the assessee's claim of exempt interest under Section 10 is established; appeal allowed for statistical purposes.

Final Conclusion: The Tribunal set aside the impugned conclusion and remanded the matter to the Ld. CIT(A) to verify the nature of the receipts and grant relief if the claim of exempt interest under Section 10 is found correct; appeal allowed for statistical purposes.

Reassessment under Section 147 - change of opinion - Requirement of tangible/new material to reopen assessment beyond four years - Failure to disclose material facts as jurisdictional prerequisite for reassessment - Disallowance under Section 184(5) - reappreciation of law versus new material

Reassessment under Section 147 - change of opinion - Requirement of tangible/new material to reopen assessment beyond four years - Failure to disclose material facts as jurisdictional prerequisite for reassessment - Disallowance under Section 184(5) - reappreciation of law versus new material - Validity of reopening assessment under Section 147 beyond four years where reassessment is based on the same facts and amounts to a change of opinion rather than discovery of new material. - HELD THAT: - The Tribunal applied settled principles that reopening beyond four years is permissible only if the department demonstrates failure by the assessee to truly and fully disclose material facts or if fresh/tangible material emerges. The Assessing Officer reopened the assessment to disallow remuneration and interest paid to partners under Section 184(5), although those amounts had been allowed in the original assessment finalized under Section 144 and the same facts were available to the AO earlier. Reliance was placed on prior decisions referred to in the order - CIT vs. Bhanji Lavji , CIT vs. Kelvinator of India Ltd. , Jindal Photo Films Ltd. vs. DCIT , and CIT vs. Soh Kisan Cold Storage - for the proposition that mere change of opinion does not confer jurisdiction to initiate reassessment. The record showed no new material or allegation of non-disclosure by the assessee; the reopening was therefore a re-appreciation of law on the same set of facts and constituted an impermissible change of opinion. Applying these principles to the facts, the Tribunal held the Section 147 proceedings to be invalid and liable to be set aside. [Paras 10, 11]

Reassessment proceedings under Section 147 set aside as constituting a mere change of opinion; departmental appeal dismissed.

Final Conclusion: Reopening of assessment for Assessment Year 2005-06 was quashed as the reassessment beyond four years rested on a mere change of opinion without any fresh or tangible material or failure by the assessee to disclose material facts; departmental appeal dismissed.

Long Term Capital Gains exemption under section 10(38) - Astronomical increase in share price not by itself sufficient to treat LTCG as accommodation entry/sham - Accommodation entries/sham transactions - Burden of proof on the revenue to dislodge apparent transactions once documentary and demat evidence is produced by the assessee - Section 69A treated as addition for unaccounted income - Section 69C unexplained transaction expenses - Dematerialisation and banking channel payments as corroborative evidence of genuineness of share transactions

Long Term Capital Gains exemption under section 10(38) - Accommodation entries/sham transactions - Astronomical increase in share price not by itself sufficient to treat LTCG as accommodation entry/sham - Dematerialisation and banking channel payments as corroborative evidence of genuineness of share transactions - Whether Long Term Capital Gains claimed on sale of CCL International Ltd. shares could be rejected as accommodation entries and disallowed notwithstanding documentary evidence and demat transfers - HELD THAT: - Tribunal found that the assessee furnished documentary proof of purchase and sale, shares were credited to and transferred from the demat account, and payments were routed through banking channels, establishing prima facie genuineness of the transactions. The Revenue primarily relied on an investigation report describing general modus operandi for rigging penny stocks and on the abnormal rise in share price to treat the gains as accommodation entries. The Tribunal held that an astronomical increase in share price, by itself, is not a sufficient ground to treat LTCG as sham, noting relevant High Court and coordinate-bench decisions to that effect and observing that revenue did not produce evidence to dislodge the apparent reality of the transactions. On the company's financials and other material on record, the Tribunal concluded that the assessee discharged the primary onus and that the AO's conclusion rested on conjecture and surmise rather than material contrary evidence. [Paras 8]

Addition under section 69A treating claimed LTCG as unaccounted accommodation entry is not justified and is deleted.

Section 69C unexplained transaction expenses - Burden of proof on the revenue to justify additions for unexplained transaction expenses - Whether addition made under section 69C towards unexplained transaction expense was sustainable - HELD THAT: - The Tribunal observed that the Assessing Officer did not place any material on record to justify the addition under section 69C. The AO's reliance on the general modus operandi in the investigation report was held to be inadequate to impeach the specific transactions in the assessee's case. Given absence of specific contrary material, the addition under section 69C could not be sustained. [Paras 3, 8]

Addition under section 69C is not justified and is deleted.

Final Conclusion: Appeal allowed; order of the CIT(A) set aside to the extent challenged and the Assessing Officer directed to delete the additions under sections 69A and 69C relating to the claimed LTCG for AY 2015-16.

Deeming provision under Section 56(2)(viib) - fair market value determined by DCF method under Rule 11UA(2) - inter-company allotment between holding and subsidiary - acceptance of valuation report by prescribed valuer and limits on Assessing Officer substituting valuation

Deeming provision under Section 56(2)(viib) - fair market value determined by DCF method under Rule 11UA(2) - inter-company allotment between holding and subsidiary - acceptance of valuation report by prescribed valuer and limits on Assessing Officer substituting valuation - Deletion of addition made under Section 56(2)(viib) in respect of share premium on allotment of equity shares to an existing shareholder - HELD THAT: - The Tribunal considered whether the Assessing Officer could invoke the deeming provision and substitute the assessee's valuation where shares were allotted at a premium to an existing shareholder (holding company). The assessee produced a valuation based on the Discounted Cash Flow method prepared by a qualified valuer as permitted by Rule 11UA(2), and also demonstrated that the allottee was an existing shareholder holding controlling interest. The first appellate authority held that where the assessee has adopted one of the prescribed valuation methods and supported it with an expert report, the AO had neither produced cogent material to reject the DCF valuation nor jurisdiction to compel adoption of a different method; projections underlying DCF are estimations and cannot be discredited merely because NAV at the time was negative. The Tribunal noted coordinate-bench precedents recognising that allotments to existing shareholders (holding/subsidiary inter se transactions) ordinarily do not attract the charging object of Section 56(2)(viib) since no outsider derives benefit and there is no change in ultimate interest or control; having regard to the valuation report and the fact of inter-company allotment, the conclusion of the CIT(A) to delete the addition was affirmed. [Paras 6, 7]

The addition under the deeming provision was not sustainable; the CIT(A)'s deletion of the addition is upheld.

Final Conclusion: The Tribunal dismissed the Revenue's appeal and upheld the deletion of the addition made under Section 56(2)(viib) in respect of the share premium on allotment to an existing shareholder for AY 2016-17.

Benami transaction - benami property - provisional attachment under Section 24(3)/(4) - prima facie satisfaction / recording of reasons to believe - exception for person standing in a fiduciary capacity - principles of natural justice / opportunity of personal hearing - limitation for passing order under Section 24(4)

Provisional attachment under Section 24(3)/(4) - principles of natural justice / opportunity of personal hearing - Validity of provisional attachment insofar as it was passed before the expiry of time given to file reply and whether petitioners were denied material or personal hearing - HELD THAT: - The Division Bench held that Section 24 does not require the Initiating Officer to await or consider a reply to a show cause notice before passing a provisional attachment under Section 24(3); the only condition is prior approval of the Approving Authority, which was obtained. The court further found that the relevant material relied upon was indicated in the show cause notice and that opportunities for personal hearing were communicated (with dates 11.07.2023 and 19.07.2023) but not availed by the petitioner. Accordingly, allegations of breach of natural justice or non-supply of material do not warrant interference at this stage. [Paras 17, 20, 21]

Provisional attachment and the procedural steps taken by the Initiating Officer do not suffer from violation of natural justice and are not interfered with at this stage.

Prima facie satisfaction / recording of reasons to believe - Whether the Initiating Officer recorded reasons to believe as mandated by Section 24(1) - HELD THAT: - The Court examined the show cause notice and observed that the Initiating Officer specifically recorded reasons to believe in paragraph 13.3 of the notice, setting out factual bases and the opinion that the transactions and properties constituted benami transactions and benami properties. On that basis the petitioners' contention that no reasons were recorded was rejected. [Paras 18]

The Initiating Officer recorded prima facie reasons to believe as required by Section 24(1).

Limitation for passing order under Section 24(4) - Whether the order under Section 24(4) was barred by limitation because two documents were uploaded on consecutive days - HELD THAT: - The Bench held that the two documents dated 28.07.2023 bore the same Document Identification Number and are one and the same document; the objection was therefore regarded as technical. The court declined to entertain the limitation challenge at the writ stage. [Paras 19]

The contention of limitation in respect of the Section 24(4) order is rejected as technical and not a ground for interference at this stage.

Benami transaction - benami property - exception for person standing in a fiduciary capacity - Whether properties purchased in the company's name fall within the fiduciary-capacity exception (and thus are not benami) where shareholders/directors provided funds - HELD THAT: - The Court recognised that funds provided by shareholders ordinarily form part of a company's capital and purchases from company funds would not be benami. However, it accepted the Initiating Officer's prima facie finding that the properties were not acquired from the company's funds but from funds provided by the director/beneficial owner routed through third parties. The Initiating Officer applied the statutory tests under Section 2(9)(A) and the six circumstances derived from precedent to conclude prima facie that the company was a shell and the properties were held for the benefit of the director. The petitioners' reliance on the fiduciary-capacity exception was held to be without basis on the record before the Initiating Officer. [Paras 22, 23, 24, 25, 26]

On the material before the Initiating Officer, the fiduciary-capacity exception did not apply and the properties were prima facie held benami; this finding is not disturbed in writ jurisdiction.

Provisional attachment under Section 24(3)/(4) - adjudicating authority is appropriate forum for final decision - Whether the High Court should interfere with the provisional/tentative attachment at the interlocutory writ stage - HELD THAT: - Relying on precedent and the statutory scheme of Sections 24 and 26, the Bench emphasised that proceedings under Section 24 require only a recording of prima facie opinion and that the Adjudicating Authority under Section 26 is statutorily obliged to conduct adjudication, consider replies, call evidence and provide hearing. The court noted that provisional orders are tentative and that the petitioners have adequate remedy before the Adjudicating Authority (and thereafter by appeal), so interference with the provisional attachment was not warranted. [Paras 28, 29]

No interference with the provisional attachment at this stage; petitioners are relegated to the adjudicating authority for final adjudication.

Final Conclusion: Writ petitions dismissed. The court declined to interfere with the provisional attachment orders or the Initiating Officer's prima facie findings; the question of benami nature and any consequent relief is to be adjudicated by the Adjudicating Authority under the PBPT Act.

Prospective application of penal and in rem forfeiture provisions - retrospective application of amendment enlarging substantive liability - reliance on binding precedent of the Supreme Court - pendency of review petition not staying operation of binding precedent

Retrospective application of amendment enlarging substantive liability - prospective application of penal and in rem forfeiture provisions - Whether the provisions of Section 5 of the Benami Transactions (Prohibition) Amendment Act, 2016 can be applied to transactions entered into prior to the Amendment coming into force. - HELD THAT: - The Court considered the decision of the Honourable Supreme Court in Union of India v. Ganpati Dealcom Pvt Ltd., which held that the in rem forfeiture provision under Section 5 of the 2016 Amendment, being punitive in nature and prescribing substantive changes, can only be applied prospectively and not retrospectively, and that prosecutions or confiscation proceedings for transactions entered into prior to 25.10.2016 must be quashed. The Appellate Tribunal had allowed the statutory appeals by applying that principle to transactions predating the Amendment. The High Court found that the Supreme Court's decision currently governs the legal position and that the appellants' contention that Section 5 has retrospective effect cannot be accepted. The Court also noted that the Department's review petition against the Ganpati Dealcom judgment was pending, but that pendency does not displace the binding character of the Supreme Court's decision or warrant interference with the Tribunal's order.

The Tribunal's allowance of the appeals in respect of transactions prior to the Amendment Act is upheld; Section 5 of the 2016 Amendment cannot be applied retrospectively to transactions prior to 25.10.2016.

Reliance on binding precedent of the Supreme Court - pendency of review petition not staying operation of binding precedent - Whether the pendency of a review petition against the Supreme Court's decision relied upon by the Tribunal justified interference with the Tribunal's order. - HELD THAT: - The Court observed that High Courts must decide matters on the law as it stands and cannot decline to follow a binding Supreme Court decision merely because a review petition is pending. The judgment of the Supreme Court in Ganpati Dealcom thus remains binding until altered by that Court, and mere pendency of a review petition is not a ground to assail or set aside the Tribunal's order which followed that decision. The Court referred to authority holding that awaiting the outcome of a review petition is not permissible unless this Court itself so directs.

Pendency of the Department's review petition does not justify disturbing the Tribunal's order which correctly followed the existing Supreme Court precedent.

Final Conclusion: The common order of the Appellate Tribunal dated 15.12.2022 is upheld: transactions predating 25.10.2016 cannot be subjected to confiscation or prosecution under the in rem forfeiture provision of the 2016 Amendment, and the pendency of a review petition against the Supreme Court's governing decision does not afford a basis to interfere; appeals dismissed with liberty to prosecute matters arising after the Amendment's commencement depending on the outcome of any review.

Summary order. Special Leave Petition dismissed as withdrawn; pending applications, if any, disposed of.

Condonation of delay - dismissal for delay - requirement of explanation for delay

Condonation of delay - dismissal for delay - requirement of explanation for delay - Whether the civil appeal should be entertained despite a delay of 526 days in filing where no explanation is furnished for the period of delay. - HELD THAT: - The respondent/caveator pointed out a delay of 526 days in filing the appeal and relied on the application for condonation of delay. The application did not explain the interval between 25.08.2022 and 18.07.2023. The appellant's counsel conceded that there was no averment explaining what transpired during that period. In the absence of any explanation or material justifying the prolonged delay, the Court declined to exercise discretion to condone the delay and considered dismissal on that basis appropriate. The Court expressly left open the substantive questions of law for consideration in an appropriate case.

Civil appeal dismissed on the ground of delay for failure to furnish any explanation for the 526-day delay; questions of law left open.

Final Conclusion: The appeal is dismissed solely on the ground of unexplained delay; the Court has not decided the substantive legal questions, which remain open for adjudication in an appropriate proceeding.

Bail under Section 439 Cr.P.C. - Nature of accusation and nature of evidence - Severity of punishment and role of accused - Reasonable apprehension of tampering with witnesses - Compoundable offence under Section 137 of the Customs Act, 1962 - Totality of facts

Bail under Section 439 Cr.P.C. - Nature of accusation and nature of evidence - Severity of punishment and role of accused - Reasonable apprehension of tampering with witnesses - Totality of facts - Grant of bail to the applicant in the criminal case registered under the Customs Act, 1962. - HELD THAT: - The court considered the settled legal tests for grant of bail, including the nature of the accusation, the nature of the evidence in support, the severity of punishment, the accused's character and role, and the possibility of tampering with witnesses. Having regard to the totality of facts - including the absence of incriminating material recovered from the applicant, his asserted bona fide ownership, his lack of criminal antecedents, the applicant's custodial period, the triability by Magistrate and maximum sentence, and the public interest factors - and without expressing any opinion on merits, the court found it a fit case for bail. Reliance was placed on established precedents concerning the grant of bail and assessment of relevant factors. The court imposed specific conditions to guard against tampering, intimidation of witnesses and misuse of liberty and directed personal bond and sureties, presence at key trial stages, an undertaking on adjournments for evidence, and verification procedure for the copy of this order. The court made clear that its observations are confined to the bail application and do not prejudice the trial court's independent evaluation of evidence.

Bail allowed subject to furnishing of personal bond and sureties and compliance with specified conditions; breach of conditions to invite cancellation of bail; observations confined to bail proceedings and trial court free to decide on merits.

Final Conclusion: Bail application allowed; applicant released on furnishing bond and sureties subject to enumerated conditions, with liberty for the trial court to proceed independently on the merits and to cancel bail for breach of conditions.

Ultra vires - curtailment of adjudicating authority's discretion - provisional release of seized goods - reliance on administrative circular - setting aside administrative order passed on invalid circular - remand for fresh decision - speaking order - perishable goods - expedited disposal

Ultra vires - curtailment of adjudicating authority's discretion - reliance on administrative circular - Validity of paragraph 2 of Circular No. 35/2017-Cus to the extent it curtails the discretion of the adjudicating authority - HELD THAT: - The Court held that paragraph 2 of the impugned Circular, insofar as it curtails the discretion of the adjudicating authority to grant provisional release of goods, had been declared void by a Coordinate Bench and, following the decision in the connected petition, that portion is set aside. Consequently, the petitioner's challenge to the impugned Circular does not survive and the Circular cannot be the basis for restricting the adjudicating authority's discretion in provisional release matters. [Paras 3, 5]

Paragraph 2 of the impugned Circular to the extent it curtails the adjudicating authority's discretion is void/has been set aside.

Provisional release of seized goods - setting aside administrative order passed on invalid circular - remand for fresh decision - speaking order - perishable goods - expedited disposal - Validity of the impugned provisional-release order and appropriate remedy - HELD THAT: - The impugned order granting provisional release subject to specified bonds and security was passed on the basis of paragraph 2 of the impugned Circular. Because that paragraph has been set aside as curtailing adjudicatory discretion, the impugned order is liable to be set aside. The matter is remitted to the adjudicating officer for fresh consideration of the petitioner's application for provisional release. The Court directed that a fresh, speaking order be passed within an expedited timeframe because the goods are perishable, and restored the petitioner's application before the adjudicating authority for rehearing. [Paras 6, 8, 9]

Impugned order set aside; matter remanded to respondent no.6 for fresh, speaking decision within four working days (expedited due to perishability); petitioner's application restored.

Final Conclusion: The petition is allowed: the portion of the Circular curtailing adjudicatory discretion is set aside; the impugned provisional-release order, being founded on that Circular, is set aside; the matter is remanded for fresh, expedited decision with the petitioner's application restored.

Classification based on condition at the time of import - end use not determinative of classification - post import mutilation/denaturing subject to administrative permission - mutilation or denaturing under section 24 of the Customs Act, 1962

Classification based on condition at the time of import - end use not determinative of classification - Whether the imported goods (books) are classifiable as waste paper or as printed books for customs purposes - HELD THAT: - The Tribunal agreed with the Revenue that the condition of the goods at the time of import, which constitutes the taxable event, is the material factor for classification. End use to which the goods are subsequently put cannot, by itself, determine the classification. The Tribunal therefore upheld the legal principle that classification must be determined by the state and nature of the goods on import and not by a purported post import intended use. [Paras 4]

Classification is to be determined by the condition of goods at import and not by their subsequent end use; therefore the principle relied upon by the department is correct.

Post import mutilation/denaturing subject to administrative permission - mutilation or denaturing under section 24 of the Customs Act, 1962 - Whether the adjudicating authority should be directed to consider permitting mutilation/denaturing and release of the imported goods on terms - HELD THAT: - The Tribunal noted that administrative practice has permitted post import procedures in certain cases and relied on a contemporaneous order of the High Court directing consideration of a request to denature/mutilate seized imported goods in the presence of Customs officials and to release them thereafter on adoption of usual procedure. Exercising appellate jurisdiction, the Tribunal set aside the impugned order and remitted the matter to the adjudicating authority to examine the appellant's request for mutilation/denaturing and consequent release, subject to due formalities and adoption of regular procedures for imposing applicable customs duty and charges. The Tribunal directed that the lower authority decide afresh within a specified timeframe and directed cooperation by the appellant in the process. [Paras 4]

Impugned order set aside; matter remitted to the adjudicating authority to consider permitting mutilation/denaturing and, if permitted, to release the goods after due formalities and imposition of applicable duties, to be decided afresh within 90 days.

Final Conclusion: The Tribunal affirmed the legal principle that classification depends on the condition of goods at import and not on intended end use, set aside the adjudication order, and remitted the matter to the lower authority to consider the appellant's request for mutilation/denaturing and release under the prescribed formalities, to be decided within 90 days.

Classification of goods - remand to the adjudicating authority - awaiting decision of the Hon'ble Apex Court - de novo consideration - all contentions left open

Classification of goods - remand to the adjudicating authority - awaiting decision of the Hon'ble Apex Court - Appeals remanded to the adjudicating authority for de novo consideration pending the decision of the Hon'ble Apex Court on the classification of coal. - HELD THAT: - The Bench observed that the core controversy relates to classification of coal which is pending before the Hon'ble Apex Court. In view of a prior Larger Bench decision in M/s. Tamil Nadu Generation & Distribution Corpn. Ltd. v. Commissioner of Customs, Tuticorin and subsequent orders of this Bench following that Larger Bench, identical matters were remanded to the adjudicating authority to await the Apex Court's decision. Given that most related appeals have been remanded and identical issues are sub judice before the Apex Court, the Bench concluded that no purpose would be served by adjudicating these appeals at this stage. Consequently the matters are remitted to the original authority for de novo consideration after the outcome of the Apex Court proceedings; all contentions were accordingly left open for fresh consideration. [Paras 2, 3, 4, 5]

Appeals disposed of by remand to the adjudicating authority to await the decision of the Hon'ble Apex Court; all contentions left open.

Final Conclusion: The appeals are disposed of by remand to the adjudicating authority for de novo consideration, pending the decision of the Hon'ble Apex Court on the classification of coal; all parties' contentions remain open.

Penalty under Section 114A for wilful misstatement and suppression - enhancement of assessable value under proviso to Section 28 - personal penalty under Section 112(b) - confiscation in terms of Section 111(m) - payment of differential duty before show-cause and applicability of penalty

Penalty under Section 114A for wilful misstatement and suppression - enhancement of assessable value under proviso to Section 28 - payment of differential duty before show-cause and applicability of penalty - Penalty equal to the duty short-paid under Section 114A on the appellant-company was rightly imposed. - HELD THAT: - The Commissioner found that the appellant imported fourteen consignments, declared values approximately 40% below the actual price, and later paid the suppressed amount to suppliers through non-banking channels. Statements of the Managing Director and others admitted the undervaluation and the mode of payment. The Commissioner held that the undervaluation amounted to wilful misstatement and suppression attracting revaluation under the proviso to Section 28 and liability under Section 14, rendering the goods liable to confiscation under Section 111(m). Because the short levy arose from wilful misstatement and suppression, penalty equal to the duty and interest under Section 114A was warranted. The Tribunal, on review of the record and the admissions, found no error in the Commissioner's application of law or facts and upheld the penalty under Section 114A on the appellant-company. [Paras 7, 23, 24, 31]

Penalty under Section 114A equivalent to the differential duty upheld against the appellant-company.

Personal penalty under Section 112(b) - confiscation in terms of Section 111(m) - Personal penalties under Section 112(b) on the directors were justified but were reduced in quantum by the Tribunal. - HELD THAT: - The Commissioner concluded that, given the finding of wilful misstatement and suppression and liability to confiscation, persons actively involved were liable to personal penalty under Section 112(b). The Tribunal agreed with the conclusion that personal penalties could be imposed on the directors who were found to have participated in the undervaluation scheme. Exercising its disciplinary discretion having regard to the gravity of the offence and the facts, the Tribunal reduced the amount of penalty imposed on the Managing Director and the Marketing Director to meet the ends of justice while otherwise upholding the imposition of personal penalties. [Paras 7, 24]

Personal penalties under Section 112(b) on the directors sustained but reduced to the quantum specified by the Tribunal.

Final Conclusion: The appeal of the appellant-company is dismissed insofar as the penalty under Section 114A is concerned; appeals by the individual appellants are partially allowed only to the extent the Tribunal reduced the personal penalties, and all other findings of the Commissioner are affirmed.

Refund of customs duty paid by mistake - limitation under Section 27 of the Customs Act, 1962 - limitation under Section 27 read with Section 128 of the Customs Act, 1962 - reasonable time for claiming refund - bonafide mistake and due diligence - technical glitch in customs payment system

Refund of customs duty paid by mistake - limitation under Section 27 of the Customs Act, 1962 - reasonable time for claiming refund - bonafide mistake and due diligence - technical glitch in customs payment system - Whether refund of customs duty paid twice due to a technical glitch could be allowed though the refund application was filed beyond the period prescribed under Section 27 of the Customs Act, 1962. - HELD THAT: - The Tribunal found that the double payment arose from a technical glitch in the Customs payment system on 12.10.2012 and that the appellants repeatedly pursued the bank for confirmation and obtained a Chartered Accountant's certificate before filing the refund application on 02.05.2014. The Tribunal distinguished the decision relied upon by the Revenue where lack of bonafide and absence of due diligence, together with expiry of the statutory period for preferring an appeal, led to refusal of relief. By contrast, the Tribunal followed precedents treating refund of amounts paid without authority of law as subject to the limitation period but governed by the doctrine of a reasonable time where the payment was a bonafide mistake. On the facts, the appellants' actions demonstrated diligence and the mistake was bonafide; consequently the delay in filing the refund claim did not bar relief under the circumstances. The Tribunal therefore granted the refund with consequential relief.

Appeal allowed; refund claim permitted as the double payment was a bonafide mistake caused by a technical glitch and the appellants exercised due diligence, making the delayed refund claim allowable.

Final Conclusion: The Tribunal allowed the appeal, holding that a bonafide double payment caused by a technical glitch and followed by prompt pursuit of bank confirmation and certification entitled the assessee to refund despite the application being filed after the statutory period, and distinguished authorities denying relief for lack of due diligence.

Amendment of shipping bill under section 149 of the Customs Act, 1962 - conversion of free shipping bill to DEPB/advance license shipping bill - reasonableness and limitation for seeking amendment - departmental obligation to examine and retain records before conversion - statute prevailing over an inconsistent Board circular fixing time-limits

Amendment of shipping bill under section 149 of the Customs Act, 1962 - conversion of free shipping bill to DEPB/advance license shipping bill - reasonableness and limitation for seeking amendment - departmental obligation to examine and retain records before conversion - applicability of Board circular fixing three months - Whether the appellant's belated request (made about six years after export) to amend shipping bills to convert free shipping bills to DEPB shipping bills could be allowed - HELD THAT: - The Tribunal accepted that Section 149 permits amendment of a shipping bill and that no specific time-limit is prescribed therein, but held that the absence of a statutory time-limit does not authorise applications after an unreasonable lapse of time. Though Board circulars prescribing a three-month limit are not to be pressed into service where the statute governs, the Department must be able to examine and be possessed of records when an application for conversion is made. The appellant exported goods in 2005, obtained a DGFT amendment in 2006, yet sought conversion only in 2011. The Tribunal, applying the principle that a request for conversion requires contemporaneous record examination and cannot be entertained after an excessively long delay, found no reasonable ground shown for the five-to-six year delay and upheld the adjudicating authority's rejection. The Tribunal considered and distinguished precedents relied upon by the parties, noting that a conflict between statute and circular is resolved in favour of the statute but that reasonableness of delay remains a determinative factor.

Request to amend shipping bills and convert free shipping bills to DEPB shipping bills after the prolonged delay was rightly rejected; appeal dismissed.

Final Conclusion: Though Section 149 permits amendment of shipping bills, an application for conversion from free shipping bill to DEPB/advance license shipping bill made after a prolonged lapse (several years) may be refused where no reasonable ground is shown and the Department cannot be expected to examine records after such delay; appeal rejected.

Provisional release under Section 110A - Discretion of adjudicating authority to impose conditions and security - Circular No.35/2017-Cus paragraph 2 ultra vires - Set-aside and remand for fresh adjudication - Expedited decision for perishable goods

Provisional release under Section 110A - Discretion of adjudicating authority to impose conditions and security - Circular No.35/2017-Cus paragraph 2 ultra vires - Paragraph 2 of Circular No.35/2017-Cus to the extent it prescribes categories ineligible for provisional release and mandates specific securities is contrary to Section 110A and is liable to be set aside. - HELD THAT: - Section 110A confers discretion on the adjudicating authority to release seized goods on a bond with such security and conditions as the adjudicating authority may require. Paragraph 2 of the impugned Circular attempts to exclude certain categories of goods from provisional release and prescribes fixed requirements for bond and security, thereby curtailing the statutory discretion. A coordinate Bench has held that para 2 is contrary to Section 110A and void to the extent it supplants the statutory provision; that decision has been followed and the petitioner's challenge to para 2 is prima facie meritorious. Consequently, para 2 is set aside insofar as it limits the discretion conferred by Section 110A. [Paras 6, 7]

Paragraph 2 of the impugned Circular is set aside to the extent it curtails the discretion of the adjudicating authority under Section 110A.

Set-aside and remand for fresh adjudication - Expedited decision for perishable goods - The impugned order fixing bond and security in reliance on paragraph 2 of the Circular is set aside and the matter is remitted to the adjudicating authority for fresh decision. - HELD THAT: - The impugned order fixed the value of the bond and the quantum of security by applying paragraphs 2.1 and 2.2 of the impugned Circular. Because paragraph 2 has been held to impermissibly curtail statutory discretion, the order that relied upon those prescriptions cannot stand. The matter is remanded to respondent no. 6 to decide the petitioner's application for provisional release afresh, with opportunity to be heard. Given that the goods are perishable, the Court directs a speaking order to be passed within four working days from the date and gives a specific date for the petitioner's appearance before the adjudicating authority. [Paras 8, 9, 10]

The impugned order is set aside and the application for provisional release is restored for fresh consideration by respondent no. 6, who shall decide and pass a speaking order within four working days after hearing the petitioner.

Final Conclusion: The petition is allowed: paragraph 2 of Circular No.35/2017-Cus is set aside insofar as it curtails the adjudicating authority's discretion under Section 110A; the impugned provisional-release order is set aside and remitted for fresh, expedited consideration with a four-working-day direction due to the perishable nature of the goods.

Determination of rent as per agreement - Market rent versus contractual rent - Admission and modification of claims in Form B - Resolution Professional's duty to admit claims as per Adjudicating Authority's order - Claims not to be reduced solely for absence of invoices

Determination of rent as per agreement - Market rent versus contractual rent - The Adjudicating Authority correctly fixed the rent payable by the Corporate Debtor at the agreed contractual rate and not at the market rate claimed by the landlord. - HELD THAT: - The Adjudicating Authority accepted the monthly rent at the rate agreed in the lease agreement (Rs.1,09,448/- with 5% increase). The Appellant's contention that the market rate (higher) ought to have been adopted was rejected because the Corporate Debtor was in occupation during the CIRP and the contractual terms govern fixation of rent. The Tribunal found no ground to interfere with the Adjudicating Authority's determination and affirmed that the direction to determine rent as per the agreement was not susceptible to challenge on the basis of a higher market valuation.

The fixation of rent by the Adjudicating Authority at the contractual rate is upheld; the challenge based on market rent is dismissed.

Admission and modification of claims in Form B - Resolution Professional's duty to admit claims as per Adjudicating Authority's order - Claims not to be reduced solely for absence of invoices - The claim filed by the Appellant in Form B must be admitted and modified by the Resolution Professional in accordance with the Adjudicating Authority's order; the absence of invoices after April 2018 was not a basis to wholly disallow the claim for occupation/damages. - HELD THAT: - Although the Resolution Professional admitted the claim only to the extent of invoices produced, the Adjudicating Authority had determined the monthly rent amount. The Tribunal held that the mere absence of invoices after April 2018 could not justify reducing the Appellant's claim where the Adjudicating Authority had fixed the payable amount. Consequently, the Resolution Professional is directed to admit and modify the Form B claim consistent with the Adjudicating Authority's findings (as recorded in the impugned order) and effect payment as per that determination or treat the claim accordingly.

The Form B claim shall be modified and admitted by the Resolution Professional in accordance with the Adjudicating Authority's order; the plea to disallow portions for lack of invoices is not sustained.

Final Conclusion: Appeal partly allowed: the Adjudicating Authority's fixation of rent as per the lease agreement is affirmed; the Form B claim of the Appellant is to be modified and admitted by the Resolution Professional in conformity with the Adjudicating Authority's directions; otherwise the impugned order is affirmed.

Pre-existing dispute - Section 9 application under the Insolvency and Bankruptcy Code, 2016 - reply to statutory demand notice / notice of dispute - plausible contention requiring further investigation (Mobilox principle) - preponderance of probabilities

Pre-existing dispute - reply to statutory demand notice / notice of dispute - plausible contention requiring further investigation (Mobilox principle) - Existence of a pre-existing dispute which disentitles the operational creditor to proceed under Section 9 of the IBC. - HELD THAT: - The Adjudicating Authority applied the principle in Mobilox that the adjudicating authority must reject a Section 9 application if a notice of dispute or a record of dispute exists and the dispute is a plausible contention requiring further investigation. The AA examined the parties' oral commercial dealings, the respondent's reply to the statutory demand notice dated 03.03.2022, and surrounding circumstantial facts, and concluded that the dispute raised was not a patently feeble or spurious defence but a plausible contention necessitating witness examination and further inquiry into matters such as the alleged oral agreement, mediation and settlement, forfeiture of security deposit, and genuineness of invoices and sale orders. On that basis the AA found a pre-existing dispute and dismissed the Section 9 petition. [Paras 11, 12, 13]

The Adjudicating Authority's conclusion that a pre-existing dispute exists is upheld and the Section 9 petition was rightly dismissed.

Final Conclusion: The appeal is dismissed; the Tribunal finds no error in the Adjudicating Authority's reliance on the existence of a plausible pre-existing dispute (applying Mobilox) to refuse admission of the Section 9 application.

Contract of guarantee under Section 126 of the Indian Contract Act - Financial debt by virtue of guarantee under Section 5(8)(i) of the I&B Code - Additional security - Interpretation by substance not nomenclature - Reading document as a whole - Enforcement of security interest

Additional security - Contract of guarantee under Section 126 of the Indian Contract Act - Interpretation by substance not nomenclature - Reading document as a whole - Enforcement of security interest - Financial debt by virtue of guarantee under Section 5(8)(i) of the I&B Code - Nature of the Agreement dated 29.03.2019 - whether it operates as a Deed of Guarantee or only as an agreement for additional security - HELD THAT: - The Agreement dated 29.03.2019 must be read in light of and together with the Debenture Trust Deed (DTD). The DTD expressly contemplates creation of Additional security under Clause 7.5(b) and defines 'Corporate Guarantee', 'Security Documents' and 'Security Provider' in a manner that includes corporate guarantee as a distinct form of security but also permits other documents creating security as required by the Debenture Trustee. The Agreement itself repeatedly describes the instrument as being executed "as part of the Additional Security" (Clauses F, G, I and Clause 2). Clause 2 sets out the specific security mechanism (deposit into an escrow account and future mortgage/charge to be created upon release of prior lender's charge) and Clause 6 provides for enforcement of the RIHPL security by the Debenture Trustee upon occurrence of an Event of Default. Clause 4, relied upon by the appellant, does not, when read holistically with the other clauses, manifest an undertaking by RIHPL to stand as guarantor for the principal obligor's liabilities; there is no provision making RIHPL the principal debtor nor any contemporaneous indication that RIHPL assumed the borrower's obligations as a guarantee. Established principles that a document is to be interpreted by its substance and read as a whole (and not by nomenclature or by isolating clauses) apply. Accordingly, the Agreement operates as an arrangement to provide additional security which is enforceable as security under its terms, and not as a guarantee within the meaning of Section 126 of the Contract Act that would give rise to a financial debt under Section 5(8)(i) of the I&B Code. [Paras 22, 23, 24, 26, 31]

Agreement dated 29.03.2019 is a document creating additional security and not a Deed of Guarantee; therefore the Resolution Professional did not err in rejecting the appellant's claim as a secured financial creditor.

Final Conclusion: The NCLT's order dismissing IA No.580/2023 is upheld: the Agreement of 29.03.2019 creates additional security and does not amount to a guarantee giving rise to a financial debt; the appeal is dismissed.

Irregular availment of Cenvat credit - time limit for taking credit under Rule 4(1) of CCR - escaped service tax and extended period of limitation under proviso to Section 73(1) - classification of services - OLIDAR (Online Information and Database Access or Retrieval) - reverse charge mechanism (RCM) liability - double taxation - penalty for suppression or delay in filing returns

Irregular availment of Cenvat credit - time limit for taking credit under Rule 4(1) of CCR - Whether Cenvat credit availed by the Appellant after more than one year from invoice date was irregular and liable to be disallowed - HELD THAT: - The Tribunal found that the Appellant maintained proper Cenvat registers/accounts and regularly took credit on receipt of input services and invoices. The Revenue's presumption that credit was taken only on the date of filing ST3 returns was unsupported. Having examined the Cenvat account extracts and records, the Tribunal concluded there was no case of taking credit after the one-year period as alleged and held the credits to be legal and proper.

Ground allowed; demand on account of alleged irregular Cenvat credit set aside.

Escaped service tax and extended period of limitation under proviso to Section 73(1) - Whether the Appellant suppressed OLIDAR turnover for the period April 2011 to March 2016 thereby invoking the extended period of limitation and resulting in a demand - HELD THAT: - Revenue relied on financial statements and delayed returns filed during investigation to allege suppression. The Tribunal observed that the Appellant did not dispute the turnover as calculated and that service tax paid in cash and by utilising Cenvat credit (which was held proper) discharged the tax liability. Given the finding that Cenvat credit utilisation was lawful and there was no suppression of taxable turnover, the Tribunal held there was no case of escaped service tax on OLIDAR for the stated period.

Ground allowed; demand for alleged escaped service tax set aside.

Classification of services - OLIDAR (Online Information and Database Access or Retrieval) - Whether amounts shown in Profit & Loss Account for Financial Years 2011-12 and 2012-13 represented taxable services or sale of goods attracting service tax demand - HELD THAT: - Revenue compared P&L figures with ST3 returns and treated differences as suppression of service turnover. The Appellant demonstrated that the amounts related to sale of goods (including trading in tyres and sale of electronic goods and brochures) and produced VAT assessment records showing matching turnover and VAT payment. The Tribunal accepted that the relevant receipts were for sales of goods not exigible to service tax under the pre-negative list regime and thus the demand founded on that comparison was unsustainable.

Ground allowed; demand based on alleged suppressed turnover for 2011-12 and 2012-13 set aside.

Classification of services - OLIDAR (Online Information and Database Access or Retrieval) - Whether receipts for multimedia presentation, website hosting and domain registration for 2010-11 were taxable as OLIDAR and whether exemption/deduction was irregularly availed - HELD THAT: - The Tribunal examined the nature of services and found that the Appellant did not maintain a database made available for public/subscribers; the activities were limited to multimedia presentations, website hosting and domain registration. On facts, such services did not fall within OLIDAR. The Tribunal relied on the principle that classification must be established and, in the circumstances, held that the impugned classification in the SCN was not sustained.

Ground allowed; demand for alleged irregular availing of exemption for 2010-11 set aside.

Reverse charge mechanism (RCM) liability - double taxation - Whether the Appellant was liable under RCM for security and consultancy services and whether such tax demand resulted in double taxation - HELD THAT: - For security services, invoices showed the service provider charged and discharged service tax which the Appellant reimbursed; the Tribunal concluded that to demand tax again under RCM would amount to double taxation. For consultancy charges, the Tribunal held that these were not services received from an individual advocate or an advocate firm and thus did not attract RCM under the relevant notification; moreover, the Appellant, as a provider of output services, could avail Cenvat credit making the position revenue neutral. On these bases the Tribunal found no RCM liability.

Ground allowed; RCM demands set aside.

Escaped service tax and extended period of limitation under proviso to Section 73(1) - penalty for suppression or delay in filing returns - Whether extended period of limitation was rightly invoked and whether penalties for suppression were sustainable - HELD THAT: - The Tribunal acknowledged that the Appellant's returns were in arrears and were filed during the course of investigation, making the extended period of limitation invokable as a statutory matter. However, on the merits the Tribunal found no suppression of facts; the primary fault was delay in filing returns. Since the substantive demands were set aside on merits, the Tribunal concluded that penalties premised on suppression were not attracted.

Extended period of limitation: held invokable; Penalties: set aside as no suppression proved and substantive demands failed.

Final Conclusion: The Tribunal allowed the appeals on merits by setting aside demands for alleged irregular Cenvat credit, escaped service tax, misclassification as OLIDAR and RCM liabilities, and it quashed penalties (while holding that the extended period of limitation was legally invokable due to delayed filing of returns). Consequential benefits to the Appellant were directed to follow in law.

Service of notice - service under section 37C of Central Excise Act, 1944 - calculation of limitation under section 85 of Finance Act, 1994 - proof of dispatch versus proof of receipt - remand for fresh decision on merits after defective service

Limitation for filing appeal - calculation of limitation under section 85 of Finance Act, 1994 - Whether the appeal before the Commissioner (Appeals) was barred by limitation. - HELD THAT: - The Tribunal examined when the period for filing the appeal would begin to run and held that the limitation under the Finance Act is to be reckoned from the date of receipt of the Order in Original by the assessee and not from the date of dispatch. There was credible evidence that the assessee did not receive the Order in Original and only became aware of it upon receipt of a recovery notice on 23.02.2023; the assessee promptly sought a copy and filed the appeal within the statutory period counted from knowledge of the order. In these circumstances, the Tribunal concluded that the appeal should not be rejected merely on the ground of limitation and that it ought to be adjudicated on merits. [Paras 8, 9]

The appeal was not held to be time barred and should be decided on merits.

Service of notice - service under section 37C of Central Excise Act, 1944 - proof of dispatch versus proof of receipt - Whether service of the Order in Original on the appellant was validly established. - HELD THAT: - The Tribunal analysed the modes of service relied upon by the Department. It observed that proof of dispatch by speed post, without proof of receipt by the assessee, does not establish service; mere posting is insufficient. Further, although an employee of the appellant admitted receiving the order, affidavits produced by the appellant showed that the employee failed to bring the order to the attention of the management and the Order in Original was never brought to the appellant's notice. In view of these findings, the Tribunal found the asserted modes of service to be inadequate to justify treating the appeal as belated, and considered that the matter could not appropriately be finally decided without fresh adjudication on merits after giving the appellant an opportunity of hearing. [Paras 8, 9]

Service was not shown to be validly established; the matter is fit for fresh decision after granting hearing.

Remand for fresh decision on merits after defective service - What relief should follow from the defective/uncertain service and the limitation findings. - HELD THAT: - Having found that service was not satisfactorily established and that the appeal should not be summarily dismissed as time barred, the Tribunal directed that the appeal be remanded to the Commissioner (Appeals) for adjudication on merits. The Commissioner (Appeals) was directed to afford the appellant a reasonable opportunity of personal hearing and to decide the appeal de novo within a specified timeframe. [Paras 10]

The appeal is remanded to the Commissioner (Appeals) to decide on merits after giving reasonable opportunity of hearing within four months.

Final Conclusion: The appeal is allowed by way of remand: the order under challenge is set aside insofar as it rejects the appeal as barred by limitation, and the matter is remitted to the Commissioner (Appeals) to decide the appeal on merits after granting the appellant a reasonable opportunity of hearing, to be completed within four months.

Inclusive valuation of taxable service - clearing and forwarding agent - gross amount charged as taxable value - transportation as part of forwarding operations - extended period of limitation - suppression with intent to evade - penalty relief under Section 80 of the Finance Act, 1994

Inclusive valuation of taxable service - gross amount charged as taxable value - transportation as part of forwarding operations - Appellant was required to include freight charges in the taxable value of Clearing and Forwarding (C & F) services. - HELD THAT: - The Tribunal held that the activities of clearance from wagons, loading into trucks, transportation to destination and unloading together fall within C & F services and, therefore, the freight component formed part of the gross amount chargeable to service tax. Although the appellant had executed separate agreements and raised separate invoices for freight for M/s Ultra Tech, those facts did not, as a matter of principle, permit exclusion of freight from the taxable value when the appellant performed forwarding/transportation as part of its C & F operations. However, because the record showed instances of the appellant using its own trucks and collecting mark-up on freight, the Tribunal remanded the matter for verification and quantification of the precise short payment attributable to the freight component so as to determine the exact demand. [Paras 6]

Issue on merits answered against the appellant; freight charges are includible in taxable value, but quantification of demand remanded for verification.

Extended period of limitation - suppression with intent to evade - penalty relief under Section 80 of the Finance Act, 1994 - Demand raised invoking the extended period and penalties was not sustainable and was set aside. - HELD THAT: - The Tribunal found no positive act of suppression with intent to evade by the appellant. The appellant had bifurcated contracts at the customer's insistence, had accounted for the freight by separate invoices, and produced a letter showing that M/s Ultra Tech had discharged service tax as recipient under GTA. The question whether transportation performed as part of C & F services was open to debate with differing precedents, and the appellant had a bonafide belief. On these facts the extended period invocation failed and penalties were set aside by applying Section 80 of the Finance Act, 1994 as applicable for the disputed period. Accordingly, demand and interest for the extended period and all penalties were vacated; demand and interest (if any) for the normal period were sustained. [Paras 6, 7]

Extended-period demand and penalties set aside; only demand and interest for the normal period (if any) sustained.

Final Conclusion: Appeal partly allowed: on merits freight is includible in the taxable value of C & F services and the question of quantification is remanded for verification; invocation of the extended period and all penalties are set aside, while any demand and interest for the normal period remain sustained.

Summary order. Civil appeals dismissed in view of the order dated 27th November, 2019 in Civil Appeal No. 6983 of 2009 and connected matters titled Commissioner of Central Excise Vs. M/s. Madras Cements Ltd.; pending applications, if any, disposed of.

Admissibility of CENVAT credit on HR/CR sheets/rounds used as inputs - classification of material as inputs versus final products - onus of proof on Revenue to establish receipt of goods and absence of physical movement - penalty under Rule 26 of the Central Excise Rules, 2002 - relevance of departmental investigation (weighment slips, transporter statements, banking verification) - CBEC Circular recognising "formers" as consumed inputs

Admissibility of CENVAT credit on HR/CR sheets/rounds used as inputs - classification of material as inputs versus final products - CBEC Circular recognising "formers" as consumed inputs - relevance of cost data certified by Cost Accountant - Disputed CENVAT credit on HR/CR coils/sheets/rounds held admissible to the appellants - HELD THAT: - The Tribunal accepted the appellants' case that the disputed material was used in a small proportion (as formers or for blending) in the manufacture of ingots/billets and therefore constituted inputs rather than final products. The Adjudicating Authority's conclusion based on a comparison of the price of the impugned raw material with the price of final products was legally untenable, particularly given the negligible proportion in which the material was used and the failure to consider holistic costing (all raw materials, labour and other expenses) and the cost data certified by a Cost Accountant. The CBEC Circular No.690/6/2003-CX dated 21.02.2003, which treats a "former" (consumed in the induction furnace and contained in the finished ingot/billet) as an input, supports the appellants' position. The Tribunal further noted the absence of evidence contradicting the appellants' explanation that formers were used or that cutting equipment was borrowed, and consequently found no legal basis to disallow the contested credit. [Paras 10, 11, 13]

CENVAT credit on the disputed HR/CR sheets/rounds is admissible.

Onus of proof on Revenue to establish receipt of goods and absence of physical movement - relevance of departmental investigation (weighment slips, transporter statements, banking verification) - penalty under Rule 26 of the Central Excise Rules, 2002 - Allegation of mere invoice procurement (bogus invoices) not established and consequential penalties cannot be sustained - HELD THAT: - The Tribunal held that Revenue failed to undertake basic investigative steps to substantiate the allegation that appellants only obtained Cenvatable invoices without actual receipt of goods. No statements of transporters/drivers were recorded, no bank verifications were undertaken to detect flow-back of money, and weighment/freight evidence was not probed. In the absence of any such corroborative evidence, mere departmental allegation is insufficient. Since the contested CENVAT credit was held to be admissible, the penalties imposed on both appellants under Rule 26 also do not survive. The Tribunal therefore did not find it necessary to examine other ancillary questions such as limitation. [Paras 12, 13]

Department's allegation of bogus invoices not proved; penalties imposed under Rule 26 are quashed.

Final Conclusion: Both appeals are allowed: the disputed CENVAT credit on HR/CR sheets/rounds is held admissible and the penalties imposed under Rule 26 are set aside, the Revenue having failed to prove non-receipt of goods or to undertake basic investigatory steps.

Input service - CENVAT credit - repair and maintenance during the warranty period - used directly or indirectly in or in relation to the manufacture of final products - clearance of final products upto the place of removal - precedential effect of Tribunal decisions where appeals are admitted but not stayed

Input service - CENVAT credit - repair and maintenance during the warranty period - used directly or indirectly in or in relation to the manufacture of final products - precedential effect of Tribunal decisions where appeals are admitted but not stayed - entitlement to CENVAT credit of service tax paid for repair and maintenance services provided by authorised dealers to customers during the warranty period - HELD THAT: - The Tribunal applied its earlier decisions (including the appellant's own earlier order and the decision in JCB India Ltd.) and other consistent Tribunal precedents to hold that repair and maintenance services rendered by dealers during the warranty period are linked to sale and are used indirectly in or in relation to the manufacture and clearance of final products. The Bench examined the definition of "input service" in rule 2(l) of the CENVAT Credit Rules (both prior to and w.e.f. 01.04.2011) and accepted that such after-sales warranty services fall within the ambit of input services. The Tribunal noted that several of the Revenue's challenges before High Courts amounted to admitted appeals without stays, and that where Tribunal decisions in favour of the assessee have not been stayed, their ratio is binding on lower authorities. Applying these precedents and reasoning, the impugned finding denying credit was held unsustainable. [Paras 6, 7]

Impugned order set aside; appeal allowed and CENVAT credit of service tax paid on warranty repair and maintenance services granted with consequential relief, if any.

Final Conclusion: The Tribunal allowed the appeal, setting aside the Commissioner(A)'s order and holding that service tax paid to dealers for warranty repair and maintenance services constitutes input service and is eligible for CENVAT credit; earlier Tribunal precedents favouring credit were followed and applied.

Levy of oil cess on condensate emerging from natural gas processing - interpretation of Section 15(1) of the Oil Industry (Development) Act, 1974 - distinction between crude oil and condensate for cess liability - precedential effect of Tribunal decisions relied upon by appellate authority

Levy of oil cess on condensate emerging from natural gas processing - distinction between crude oil and condensate for cess liability - interpretation of Section 15(1) of the Oil Industry (Development) Act, 1974 - precedential effect of Tribunal decisions relied upon by appellate authority - Whether condensate arising from processing of natural gas is leviable to oil cess under Section 15(1) of the Oil Industry (Development) Act, 1974 for the period March 2016 to September 2016. - HELD THAT: - The Tribunal and the Commissioner (Appeals) applied the ordinary meaning of the statutory scheme and prior Tribunal decisions holding that Section 15 of OIDA imposes oil cess only on crude oil and natural gas as specified in the Schedule, and does not extend to condensate which arises as a by product of natural gas processing. The reasoning recognised the definitional distinction between "condensate" (low vapour pressure hydrocarbons in liquid form obtained from natural gas) and "crude oil," and observed that if the Legislature had intended to tax condensate it would have been specifically mentioned. The Commissioner (Appeals) followed earlier Tribunal decisions in which demands for cess on condensate were set aside; those Tribunal decisions for adjacent periods were not set aside and were relied upon in the impugned order. The Supreme Court had declined special leave in a related appeal for reasons of low tax effect, leaving the Tribunal precedent intact. In view of these consistent decisions, the Department's appeal against the Commissioner (Appeals) order was found to be without merit.

Condensate arising from natural gas processing is not leviable to oil cess under Section 15(1) of the Oil Industry (Development) Act, 1974 for the period March 2016 to September 2016; the Department's appeal is dismissed.

Final Conclusion: The appeal by the Department challenging the Commissioner (Appeals)'s setting aside of the cess demand was dismissed; the impugned order upholding that condensate is not chargeable to oil cess for March 2016 to September 2016 is sustained, having regard to unvacated Tribunal decisions and the Supreme Court's refusal of special leave in a related matter.

Penalty for false, misleading or deceptive return - mens rea in penalty provisions - statutory/mandatory penalty versus discretionary penalty - proportionality of penalty - scope of remand - extended limitation for concealment, omission or failure to disclose material particulars

Scope of remand - proportionality of penalty - Whether the earlier remand directed by the High Court confined the Tribunal's reconsideration solely to the proportionality/quantification of the penalty. - HELD THAT: - The Court held that the Tribunal erred in construing the order of 26 September 2016 as restricting the remit to the question of proportionality alone. The Division Bench's order had not merely observed that a 200% penalty was facially disproportionate, but had accepted that the levy of penalty was unjustified insofar as the question of taxability was contentious; on that overall conspectus the matter was remitted. The Tribunal therefore misconceived the scope of remit by treating the earlier directions as limiting reconsideration to quantum alone, an approach inconsistent with the High Court's directions and reasoning. [Paras 19, 20, 21]

The Tribunal's reading of the remand as confined to proportionality was incorrect; the remand did not preclude reconsideration of the foundational basis for levying penalty.

Penalty for false, misleading or deceptive return - mens rea in penalty provisions - statutory/mandatory penalty versus discretionary penalty - extended limitation for concealment, omission or failure to disclose material particulars - Whether penalties under Section 86(10), (14) and (15) of the Delhi VAT Act, 2004 were rightly imposed on the assessee. - HELD THAT: - The Court concluded that Sections 86(10), (14) and (15) are predicated on conduct which is "false, misleading or deceptive" and thus incorporate the principle reflected in mens rea/culpable conduct; they are not statutory/automatic penalties of the kind that operate irrespective of intent. The Tribunal's reliance on authorities addressing statutory/mandatory penalties (for example provisions construed in Saw Pipes Ltd.) was inapt because those decisions concerned provisions that created automatic liability. On the facts the appellant had acted on a bona fide and debatable legal position as to taxability of sale of repossessed vehicles (a question that remained subject to Supreme Court proceedings), and the Department did not establish concealment, omission or failure to disclose material particulars such as would engage the proviso to Section 34(1). Consequently the imposition of penalties under the cited sub-sections of Section 86 was unsustainable and was set aside in respect of the tax periods in dispute. [Paras 22, 28, 30, 32]

Penalties under Section 86(10), (14) and (15) were not justified on the record and are set aside for FY 2005-06 and FY 2008-09.

Final Conclusion: Appeal allowed; Tribunal's order upholding penalties under Section 86(10), (14) and (15) set aside - penalties unsustainable where not founded on "false, misleading or deceptive" disclosures and where the taxability was a bonafide, debatable question; impugned penalty orders for FY 2005-06 and FY 2008-09 are quashed.

Rebate under Notification dated 21.05.1994 - declaration in Form 3-B - declared goods liable to tax under sub-section 2 of Section 4-B - burden of proof to demonstrate fulfillment of statutory conditions - remand for verification and production of documents - power to set aside and remit for fresh consideration

Rebate under Notification dated 21.05.1994 - declaration in Form 3-B - burden of proof to demonstrate fulfillment of statutory conditions - remand for verification and production of documents - Whether the revisionist was entitled to the 2% rebate under the Notification dated 21.05.1994 and whether the Tribunal's rejection for lack of production of documents warranted remand - HELD THAT: - The Court found that the assessing authority and the Tribunal rejected the revisionist's claim because the revisionist had not produced documents before the assessing authority to demonstrate that goods supplied to the roller flour mills had already been subjected to tax at the first-purchase rate and that Form 3-B had been obtained. The Court observed that the facts asserted by the revisionist indicated the possibility that the conditions of the Notification dated 21.05.1994 might be satisfied, but relevant documents were not produced below. In view of this, the Court held that the appropriate course was to set aside the Tribunal's order and remit the matter so that the revisionist could be given an opportunity to produce the necessary documents and demonstrate fulfillment of the statutory conditions. The Tribunal was directed, in remand proceedings, to either remit the matter for limited purpose to the assessing authority or call for a report from the assessing authority to verify whether the conditions in the Notification are satisfied; if the revisionist demonstrates compliance, the Tribunal shall pass orders accordingly. The Court further directed expeditious disposal and fixed a six-month period for final orders from the date a certified copy of the order is produced to the Tribunal. [Paras 13, 14, 15, 16]

The Tribunal's order dated 26.08.2010 is set aside and the matter is remitted to the Trade Tax Tribunal with directions to afford the revisionist an opportunity to produce documents and to verify compliance with the conditions of the Notification dated 21.05.1994, with expeditious disposal within six months.

Final Conclusion: Revision allowed in part; Tribunal order set aside and matter remitted for verification and fresh consideration as to entitlement to the 2% rebate under the Notification dated 21.05.1994, with directions for expeditious disposal.

Audi alteram partem - delay between hearing and pronouncement - decision by an officer who did not hear the party - setting aside of administrative order for procedural infirmity - remand for fresh consideration - requirement of a speaking order - direction for expeditious disposal

Audi alteram partem - decision by an officer who did not hear the party - delay between hearing and pronouncement - setting aside of administrative order for procedural infirmity - Validity of the impugned order dated 11.10.2019 in view of the long gap between hearing and pronouncement and the fact that the officer who passed the order had not heard the petitioner. - HELD THAT: - The Court found that a substantial lapse of time occurred between the petitioner's hearings (conducted by Shri R.K. Mishra) and the eventual passing of the impugned order almost four years later by a different officer (Ms. Shilpa Shinde) who had not heard the petitioner. The court held that such a combination of an inordinate delay and the fact that the adjudicating officer did not personally hear the petitioner rendered the impugned order vulnerable to being set aside on procedural grounds. The respondents did not contest this position. The Court therefore concluded that the impugned order was liable to be quashed for these procedural infirmities. [Paras 5, 6, 7]

Impugned order set aside on account of procedural infirmity arising from delay and the order being passed by an officer who had not heard the petitioner.

Remand for fresh consideration - requirement of a speaking order - direction for expeditious disposal - Relief following invalidation of the impugned order: remand to the Objection Hearing Authority for fresh decision and directions regarding the manner and timeline of reconsideration. - HELD THAT: - Having set aside the impugned order, the Court remanded the matter to the Objection Hearing Authority (OHA) for fresh adjudication. The OHA was directed to decide the matter afresh by passing a speaking order uninfluenced by the impugned order, after affording the petitioner a sufficient opportunity of hearing. The OHA was further directed to conclude the proceedings as expeditiously as possible, and in any event within four months from the date of the order. The Court expressly reserved all rights and contentions on the merits for determination by the OHA. [Paras 9, 10]

Matter remanded to the OHA for fresh consideration; OHA to pass a speaking order after hearing the petitioner and to conclude proceedings within four months; merits reserved.

Final Conclusion: The petition is allowed: the impugned order of 11.10.2019 is set aside for procedural infirmity (delay and decision by an officer who had not heard the petitioner), and the matter is remanded to the Objection Hearing Authority to decide afresh by a speaking order after affording hearing, to be completed within four months; rights on merits are reserved.