TaxTMI Updates e-Newsletter
Dec 24,2020

Admissibility under first proviso to Section 98(2) of the CGST Act, 2017 - Classification of services: licensing for broadcast and show of films - Pending proceedings preclude advance ruling - FORM GST DRC-01A as communication indicating initiation of adjudicatory proceedings - Rule 142(1A) of the CGST Rules, 2017 - pre-notice communication of quantification

Admissibility under first proviso to Section 98(2) of the CGST Act, 2017 - Classification of services: licensing for broadcast and show of films - FORM GST DRC-01A as communication indicating initiation of adjudicatory proceedings - Rule 142(1A) of the CGST Rules, 2017 - pre-notice communication of quantification - Whether the application for advance ruling on classification of licensing services is admissible when the same question is the subject of pending proceedings communicated by FORM GST DRC-01A. - HELD THAT: - The Authority examined whether the question raised in the application was "pending or decided in any proceedings in the case of the applicant" as required by the first proviso to Section 98(2) of the CGST Act, 2017. The record shows a search, recording of statement and issuance of FORM GST DRC-01A which explicitly quantified differential tax and identified "wrong classification" under self-assessment as one of the grounds. A summon seeking clarification on classification was also issued and the applicant sought departmental notice on classification. Under Rule 142(1A) of the CGST Rules, 2017 the proper officer may communicate details of tax, interest and penalty in Part A of FORM GST DRC-01A before service of a notice under Sections 73/74, and the prescribed form references the case proceedings. Consequently, the communication in FORM GST DRC-01A and the surrounding investigatory steps demonstrate that adjudicatory proceedings addressing classification had been initiated and were pending. The applicant's contention that the DRC-01A is a mere intimation and not the commencement of proceedings was not accepted because the form and the investigation record indicate proceedings in progress and that the question of classification was being examined as part of those proceedings. As all conditions of the proviso are satisfied (the question is the same, in the applicant's case, and under the Act), the Authority concluded the application is barred from admission. [Paras 11, 12]

Application rejected as inadmissible under the first proviso to Section 98(2) of the CGST Act, 2017 because the question on classification is already pending in proceedings evidenced by FORM GST DRC-01A.

Final Conclusion: The Authority refused to admit the applicant's request for an advance ruling on classification of licensing/broadcast services because the identical question was already the subject of pending adjudicatory proceedings (as communicated by FORM GST DRC-01A), and therefore the application is inadmissible under the first proviso to Section 98(2) of the CGST Act, 2017.

Eligibility for input tax credit under section 16 - distinction between inputs and capital goods - non-availability of ITC for goods disposed by way of gift or free samples under section 17(5)(h) - activities treated as supply even if made without consideration under Schedule I - deeming of related persons where one is sole distributor/sole agent - reversal of ITC on written off/lost/destroyed capital goods under Rule 43

Activities treated as supply even if made without consideration under Schedule I - non-availability of ITC for goods disposed by way of gift or free samples under section 17(5)(h) - deeming of related persons where one is sole distributor/sole agent - eligibility for input tax credit under section 16 - Admissibility of ITC on promotional/marketing items distributed free of cost to franchisees, distributors and retailers ("distributable goods"). - HELD THAT: - The Authority treated distributable goods given free of cost in two distinct factual categories. Where such distribution is to franchisees/sole distributors who are associated/related persons, the transfer falls within Schedule I and amounts to a supply even though made without consideration; consequently GST is exigible on that distribution and the supplier may avail ITC on procurement of such items in accordance with section 16. Conversely, where promotional items are supplied free of cost to independent retailers (distinct persons) and do not fall within Schedule I, such transfers are not treated as supply under GST; in that event the distribution constitutes gift/free samples and ITC on inputs used for such distribution is blocked by section 17(5)(h) and Circular guidance, and hence cannot be claimed. [Paras 13]

ITC allowed for distributable products given to related franchisees (treated as supply under Schedule I); ITC not allowed for promotional items given free to unrelated retailers as they amount to gifts/free samples and are blocked under section 17(5)(h).

Distinction between inputs and capital goods - eligibility for input tax credit under section 16 - reversal of ITC on written off/lost/destroyed capital goods under Rule 43 - Treatment of promotional/marketing items which remain the applicant's property and are used at point of sale ("non-distributable goods"). - HELD THAT: - Materials retained on the applicant's books and used at distributors' or franchisees' premises (display stands, boards, hoardings etc.) are held to be capital goods where their value is capitalized in the supplier's accounts. Such items therefore do not qualify as "inputs" (which expressly excludes capital goods) though the tax charged on their supply is input tax for the registered person. The applicant is eligible to claim ITC subject to the general conditions of section 16. However, if such capital goods are subsequently written off, destroyed, lost or disposed, the ITC previously availed to that extent must be reversed in accordance with the statutory reversal mechanism (Rule 43). The Authority noted absence of evidence regarding actual return or ultimate disposal and observed reversal obligations where applicable. [Paras 12]

Promotional items retained as assets are capital goods (not "inputs"); ITC on their procurement is available subject to section 16, but must be reversed if they are written off, destroyed, lost or otherwise disposed as per Rule 43.

Final Conclusion: The Authority ruled that ITC is allowable on promotional items distributed to related franchisees (treated as supply) but is disallowed on items freely given to unrelated retailers as gifts/free samples; items retained as the supplier's assets qualify as capital goods-ITC is available but must be reversed if those assets are written off or otherwise disposed.

Summary order. The application for advance ruling is disposed of as withdrawn.

Location of the supplier of services - fixed establishment - import of service - reverse charge mechanism - place of supply determination - liability to register under GST

Location of the supplier of services - fixed establishment - import of service - reverse charge mechanism - Supply of consultancy services by the foreign applicant to OPTCL is an import of service and whether the recipient is liable under reverse charge - HELD THAT: - The Authority examined the contractual arrangement, the duration of the project, the deputation of experts to the project site, OPTCL's provision of an office and operational support, and the nature of activities carried out on site. It held that the experts maintained a sufficient degree of permanence of human and technical resources at the project site such that services were supplied from fixed establishments in India. Consequently, the experts constitute suppliers located in India under the statutory definition of location of supplier of services. On that basis the supply cannot be characterised as an import of service under the IGST definition and therefore does not attract reverse charge on the recipient under the cited notification. The Authority rejected the applicant's contention that the supplier's location is outside India and that reverse charge would apply. [Paras 4, 5]

The supply is not import of service and the recipient is not liable to pay GST under reverse charge; the supplier is located in India by virtue of fixed establishments at the project site.

Liability to register under GST - place of supply determination - Whether the applicant is required to obtain GST registration under the Central and Odisha GST enactments for the consultancy services provided to OPTCL - HELD THAT: - Having concluded that the supplier (through its deputed experts) is located in India and supplies services from fixed establishments at the project site, the Authority determined that the place of supply is to be determined under the provisions applicable to services supplied from India. Since the applicant is the supplier liable to pay GST for those supplies, it is subject to the registration requirements under the Central Goods and Services Act, 2017 and the Odisha Goods and Services Act, 2017 for the consultancy services rendered to OPTCL. [Paras 4, 5]

The applicant is liable to pay GST and is required to obtain registration under the CGST Act and the OGST Act for the consultancy services provided to OPTCL.

Final Conclusion: The Authority ruled that the consultancy services rendered by the foreign applicant to OPTCL are supplied from fixed establishments in India and are not import of service; reverse charge on the recipient does not apply, and the applicant, being the supplier liable to pay GST, must obtain registration under the Central and Odisha GST Acts.

Works contract service - composite supply - Government Entity - concessional rate under Notification No. 11/2017-C.T. (Rate) - construction services for educational establishments - sewerage and water works classification - residential construction excluded from concessional entry - treat supplies separately for tax determination

Works contract service - composite supply - Whether the contract between the applicant and IIT, Bhubaneswar is a composite supply of works contract services entitled to the concessional entry as a single bundled supply. - HELD THAT: - The Authority found that the agreement dated 02.05.2016 comprises a number of distinctly identifiable works and services, each with specific remuneration and capable of being supplied independently. The applicant acted as a Project Management Consultant and engaged multiple contractors through competitive tenders to perform separate works. The tasks are disjoint in character and are not 'naturally bundled' within the meaning of Section 2(30) of the CGST Act. Consequently, the contract cannot be treated as a single composite supply for the purpose of applying the concessional entry; each supply must be examined on its own merits for classification and rate determination. [Paras 4]

The entire contract is not a composite supply; the supplies under the contract must be treated separately for determining the applicable rate of GST.

Government Entity - concessional rate under Notification No. 11/2017-C.T. (Rate) - Whether IIT, Bhubaneswar qualifies as a Governmental Authority or a Government Entity for purposes of Notification No. 11/2017-C.T. (Rate). - HELD THAT: - The Authority noted that IITs are established under the control of the Government of India (Ministry of Human Resource Development) and meet the criteria of the definition of 'Government Entity' in the relevant notification, including government establishment and control. On that basis IIT, Bhubaneswar was held to be a Government Entity for GST purposes and hence eligible to be considered under the concessional framework where other conditions of the notification are satisfied. [Paras 4]

IIT, Bhubaneswar is a 'Government Entity' for the purposes of Notification No. 11/2017-C.T. (Rate).

Construction services for educational establishments - concessional rate under Notification No. 11/2017-C.T. (Rate) - Whether specific construction works (lecture halls, hostels, student activity centre, auditorium, research facilities, workshops, play grounds) fall under clause (vi)(b) of entry 3 (heading 9954) and qualify for the 12% concessional rate. - HELD THAT: - The Authority examined the nature of the works entrusted and concluded that construction of educational and related institutional structures as listed in the scope of work squarely fall within sub-clause (b) of clause (vi) of entry 3 to Notification No. 11/2017-C.T. (Rate). Those works, when procured by the Government Entity in relation to a work entrusted to it by the Government, are amenable to the concessional rate subject to the conditions of the notification. [Paras 4]

The construction works for educational and institutional structures qualify under clause (vi)(b) and are entitled to the concessional GST rate of 12% (6% CGST + 6% SGST) where other conditions of the notification are met.

Sewerage and water works classification - concessional rate under Notification No. 11/2017-C.T. (Rate) - Whether sewerage, STP and construction of water works included in the project fall under clause (iii) of entry 3 (heading 9954) and qualify for the concessional rate. - HELD THAT: - The Authority observed that sewerage disposal (Sewerage & STP) and water works are covered by sub-item (iii)(c) to the notification and therefore fall within the concessional entry. Such works, being construction works of specified infrastructure, merit the concessional rate subject to compliance with the notification's conditions. [Paras 4]

Sewerage, STP and water works are covered under clause (iii) of entry 3 and qualify for the concessional GST rate of 12% (6% CGST + 6% SGST).

Residential construction excluded from concessional entry - Whether construction of Directors' bungalow and staff/faculty quarters within the IIT campus qualify for the concessional entry under Notification No. 11/2017-C.T. (Rate). - HELD THAT: - The Authority found that residential constructions such as the Director's bungalow and staff/faculty quarters are not the primary public-interest works entrusted to the Government Entity and extending the concessional benefit to such residential construction would go beyond the legislative intent. Therefore these works do not fall within the ambit of the concessional entries and must be classified separately. [Paras 4]

Construction of the Director's bungalow and staff/faculty quarters does not qualify for the concessional rate and attracts the standard GST rate of 18% (9% CGST + 9% SGST).

Treat supplies separately for tax determination - concessional rate under Notification No. 11/2017-C.T. (Rate) - Whether the entire contract should be given a uniform concessional rate or whether individual supplies under the contract must be classified and taxed separately. - HELD THAT: - Applying the earlier conclusions, the Authority held that because the contract comprises separate supplies-some qualifying under specific concessional sub-entries and others not-the correct approach is to treat each supply independently for classification and rate determination. Pure consulting services (agency charges) and other supplies that do not fall within the works contract entries are not eligible for the concessional rate. [Paras 4]

Each supply under the contract must be treated separately to determine the applicable GST rate; only those supplies falling within the concessional entries benefit from the reduced rate.

Final Conclusion: The Authority ruled that IIT, Bhubaneswar is a Government Entity; the contract is not a single composite supply and supplies must be classified individually. Construction of educational and institutional structures and sewerage/water works qualify for the concessional 12% rate under the stated entries of Notification No. 11/2017-C.T. (Rate), whereas residential constructions (Director's bungalow, staff/faculty quarters) do not qualify and attract the standard 18% rate; consulting or pure services outside the works contract entries are not eligible for the concession.

Attachment proceedings under Section 83 of the Central Goods and Services Tax Act, 2017 - order restraining release of amounts due - non-remittance and misappropriation of Goods and Services Tax - exercise of writ jurisdiction where statutory attachment proceedings are pending

Attachment proceedings under Section 83 of the Central Goods and Services Tax Act, 2017 - order restraining release of amounts due - exercise of writ jurisdiction where statutory attachment proceedings are pending - Challenge to Ext.P7 letter directing the 1st respondent not to release amounts due to the petitioner was rejected and the writ petition dismissed. - HELD THAT: - The Court noted that the additional second respondent (Director General of GST Intelligence) had initiated attachment proceedings under Section 83 of the CGST Act, 2017 against the petitioner on investigation for alleged non-remittance and misappropriation of GST amounts and had communicated instructions not to release funds due to the petitioner. The petitioner had separately challenged those attachment proceedings by filing a different writ petition. The Court also recorded that the 1st respondent had already made payments for the period July 2020 to October 2020 in accordance with directions of the District Labour Officer. In these circumstances, and having regard to the existence of ongoing statutory attachment proceedings and the representation by the GST authority regarding substantial dues, the Court declined to grant relief in the present writ petition attacking the restraint communicated in Ext.P7.

Writ petition dismissed; no relief granted against the instruction not to release amounts in view of pending attachment proceedings and the statements by the GST authority.

Final Conclusion: The petition challenging the communication restraining release of amounts was dismissed by the High Court in view of pending attachment proceedings under the CGST Act and the assertions of dues by the GST authority; no relief was granted.

Opportunity of hearing - Natural justice / audi alteram partem - Remand for fresh consideration - Assessment order set aside - Provisional release of detained goods upon security

Opportunity of hearing - Natural justice / audi alteram partem - Remand for fresh consideration - Impugned order dated 09.12.2020 set aside and matter remanded for fresh consideration with opportunity to the petitioner to file objections and be heard. - HELD THAT: - The Court found that the petitioner had not been given a full opportunity to represent its case before the assessing officer. Without expressing any opinion on the merits of the tax and penalty levied, the Court held that procedural fairness requires that the petitioner be granted an opportunity to appear before the authority and file objections. Consequently the challenged order was set aside and the matter remanded to the assessing officer to pass a fresh order after considering the petitioner's representation and hearing the petitioner within the time directed by the Court. This direction was given irrespective of competing factual versions regarding service of notice on the driver or correctness of the assessment, the determinative point being the lack of a full opportunity to the petitioner to be heard.

Order dated 09.12.2020 set aside; petitioner to file objections within two weeks and assessing officer to pass fresh order after hearing.

Provisional release of detained goods upon security - Assessment order set aside - Directed provisional release of the detained vehicle and goods on furnishing specified security despite setting aside the assessment order. - HELD THAT: - The Court held that continued detention of the vehicle and goods would serve no useful purpose pending fresh adjudication. However, to protect the revenue, the Court directed conditional release upon the petitioner furnishing security. The petitioner was ordered to give a Bank guarantee of 25% of the total tax and penalty stated in the impugned order and to furnish further Bank guarantee or immovable security for the remaining amount to the satisfaction of the assessing officer. Once these conditions are fulfilled, the vehicle and goods are to be released. The Court did not adjudicate the substantive correctness of the tax and penalty but imposed protective conditions for provisional release.

Vehicle and goods to be released on petitioner furnishing 25% Bank guarantee and further security for the balance to the assessing officer's satisfaction.

Final Conclusion: The petition is disposed of by setting aside the order dated 09.12.2020 and remanding the matter for fresh adjudication after giving the petitioner an opportunity of hearing; the detained vehicle and goods are to be provisionally released upon the petitioner furnishing the directed security.

Summary order. Notice issued to respondents returnable on 12.02.2021; respondents to be served by email in addition to ordinary service. Connected civil application disposed of.

Summary order. Petitions dismissed as withdrawn; interlocutory applications, if any, disposed of.

Detention of goods and vehicle under Section 129(1) of the GST Act - release of detained goods upon inquiry finding no contravention - "bill to ship to" instruction and e-way bill consistency

Detention of goods and vehicle under Section 129(1) of the GST Act - release of detained goods upon inquiry finding no contravention - "bill to ship to" instruction and e-way bill consistency - Whether the detained vehicle and goods should be released in view of the authority's inquiry finding no contravention of the Act or Rules despite an apparent mismatch between invoice and e-way bill - HELD THAT: - The Court recorded that the consignor, consignee and transporter had produced e-way bill and invoice documentation showing a "bill to ship to" arrangement, and that the detaining authority initially exercised powers under Section 129(1) on account of an apparent mismatch between the invoice and the e-way bill. After the matter was placed before the Court, the State informed the Court that, on inquiry, the authority concluded there was no contravention of the Act or Rules and that detention was no longer necessary. Given the respondent's concession that the inquiry disclosed no violation and that the goods and vehicle need not be detained, the Court declined to adjudicate the substantive merits and directed release. [Paras 9, 10]

Writ petition allowed; respondent directed to release the vehicle and goods forthwith in light of the authority's finding that no contravention had occurred.

Final Conclusion: The writ petition was allowed and the respondents were directed to release the detained vehicle and goods forthwith, in view of the authority's inquiry concluding there was no contravention of the Act or Rules; the Court did not decide the substantive merits.

Interest liability on Net Cash Liability - charging interest on gross amount versus net cash liability - decision of GST Council to apply interest on net cash liability retrospectively - liberty to file representation and requirement of reasoned order - stay of coercive action pending adjudication of representation

Liberty to file representation and requirement of reasoned order - decision of GST Council to apply interest on net cash liability retrospectively - Petitioner granted liberty to file a detailed representation and authority directed to dispose it by a reasoned order in accordance with law and the GST Council decision. - HELD THAT: - The writ petition challenging the communication regarding interest liability was disposed of by permitting the petitioner to submit a detailed representation to the Superintendent, Central Excise & GST, Bhawanipatna Range within three weeks. The Court directed that if such representation is filed, the authority shall decide it by passing a reasoned order in accordance with law and having regard to the 39th GST Council decision quoted by the petitioner which records that interest is to be charged on Net Cash Liability (i.e., gross liability less input tax credit). The Court therefore refrained from adjudicating the substantive claim itself and required the statutory authority to reconsider and decide the claim afresh in light of the Council's decision and applicable law. [Paras 4]

Liberty granted to file representation; authority to decide representation by a reasoned order in accordance with law and the GST Council decision.

Stay of coercive action pending adjudication of representation - No coercive action shall be taken against the petitioner until the representation is decided. - HELD THAT: - As an interim measure, the Court restrained the department from taking any coercive action against the petitioner until a decision is rendered on the representation to be filed. The protection is conditional on the filing of the representation within the timeline directed by the Court and remains operative only till the statutory authority passes the reasoned order required by the earlier issue. [Paras 4]

Interim prohibition on coercive action until disposal of the representation.

Final Conclusion: Writ petition disposed of by granting liberty to the petitioner to file a detailed representation within three weeks and directing the Superintendent, Central Excise & GST, Bhawanipatna Range to dispose of it by a reasoned order in accordance with law and the GST Council decision that interest is to be charged on net cash liability; no coercive action permitted until such disposal.

Detention and provisional release under GST - confiscation proceedings under Section 130 of the GST Act - provisional release under Section 67(6) of the GST Act - deposit for release of detained goods and vehicle - judicial non-interference with pending adjudication

Confiscation proceedings under Section 130 of the GST Act - judicial non-interference with pending adjudication - Validity of interfering at interlocutory stage with adjudication pursuant to notice in Form GST MOV-10 - HELD THAT: - The Court declined to interfere with the adjudicatory process initiated by issuance of notice in Form GST MOV-10 under Section 130. While the petitioner assailed the issuance of the confiscation notice on multiple grounds, the Court refrained from adjudicating those contentions at this stage and observed that if a final order of confiscation is ultimately passed, the petitioner would remain at liberty to pursue appropriate legal remedies. The Court therefore preserved the authority's jurisdiction to proceed with adjudication and did not quash or stay the confiscation proceedings. [Paras 7]

Petition to quash or stay the confiscation proceedings under Form GST MOV-10 refused; no interference with the adjudication at this interlocutory stage.

Detention and provisional release under GST - provisional release under Section 67(6) of the GST Act - deposit for release of detained goods and vehicle - Whether the detained vehicle and goods should be released pending adjudication and on what terms - HELD THAT: - The Court addressed the continuing detention of the vehicle and goods and the petitioner's application for provisional release under Section 67(6). Noting that no order had been passed on the provisional release application and that indefinite detention was undesirable, the Court accepted the petitioner's (and the State's) proposition that release could be effected upon deposit. In exercise of its supervisory jurisdiction, the Court directed the petitioner to deposit the specified amount with respondent No.2 and ordered that upon such deposit the respondent shall promptly release the vehicle and goods, while expressly stating that the Court has not gone into the merits of the underlying dispute. [Paras 9]

Directed deposit of the stated amount with respondent No.2 and ordered release of the vehicle and goods upon such deposit; merits of confiscation proceedings not adjudicated.

Final Conclusion: Writ petition does not obtain relief to quash or stay the confiscation notice; however, to avoid indefinite detention the Court ordered release of the detained vehicle and goods upon deposit of the amount specified with respondent No.2, without deciding the merits of the confiscation proceedings.

Non passing of benefit of additional input tax credit - profiteering under Section 171(1) of the CGST Act, 2017 - penalty under sub section 171(3A) and prohibition of retrospective imposition - commencement of amendment by Notification No. 01/2020 Central Tax dated 01.01.2020

Non passing of benefit of additional input tax credit - profiteering under Section 171(1) of the CGST Act, 2017 - Respondent had violated the obligation to pass on the benefit of additional input tax credit and had profiteered during the specified period. - HELD THAT: - The Authority considered the DGAP's investigation report and the submissions and material placed before it, including verification of payments made to affected buyers. On review, it was revealed that the Respondent did not pass on the benefit of additional ITC to the purchaser and other homebuyers in the project 'Navkar Darshan' for the period 01.07.2017 to 31.12.2018. The Authority therefore affirmed that the Respondent had contravened Section 171(1) of the CGST Act, 2017 and had profiteered in respect of that period, consistent with the findings recorded in the earlier order determining the profiteered amount. [Paras 2, 7]

The Respondent is held to have violated Section 171(1) of the CGST Act, 2017 by not passing on the benefit of additional ITC for the period 01.07.2017 to 31.12.2018.

Penalty under sub section 171(3A) and prohibition of retrospective imposition - commencement of amendment by Notification No. 01/2020 Central Tax dated 01.01.2020 - Whether penalty under newly inserted sub section 171(3A) could be imposed for violations occurring prior to its commencement. - HELD THAT: - The Authority noted that sub section 171(3A) was added by the Finance (No. 2) Act, 2019 and brought into effect from 01.01.2020 by Notification No. 01/2020 Central Tax. Because no penalty provision under Section 171 existed for the period 01.07.2017 to 31.12.2018 when the contravention occurred, the Authority held that the penalty under Section 171(3A) could not be applied retrospectively. Consequently, the notice issued for imposition of penalty under Section 171(3A) was withdrawn and the penalty proceedings were dropped. [Paras 8, 9]

Penalty under Section 171(3A) cannot be imposed retrospectively for violations committed between 01.07.2017 and 31.12.2018; the show cause notice for penalty is withdrawn and penalty proceedings are dropped.

Final Conclusion: The Authority confirmed that the Respondent had not passed on the benefit of additional ITC and had profiteered for the period 01.07.2017 to 31.12.2018, but held that penalty under newly inserted Section 171(3A) could not be imposed retrospectively and accordingly withdrew the penalty notice and dropped the penalty proceedings.

Non-passing of benefit of additional Input Tax Credit - Profiteering under Section 171(1) of the CGST Act - Penalty for violation of Section 171(1) under Section 171(3A) - Non-retrospectivity of penal provision - Temporal operation of tax penal provisions

Non-passing of benefit of additional Input Tax Credit - Profiteering under Section 171(1) of the CGST Act - Respondent failed to pass on the benefit of additional Input Tax Credit to buyers in the project "Fusion Homes" for the period 01.07.2017 to 30.09.2018, and thereby indulged in profiteering. - HELD THAT: - The Authority considered the DGAP's investigation report and the parties' submissions, and recorded that the Respondent had not passed on the benefit of additional ITC to the complainant and other homebuyers in the specified period. This finding is in continuation of the Authority's earlier determination accepting the DGAP's report and fixing the profiteered amount for the period from 01.07.2017 to 30.09.2018. The material on record therefore supports the conclusion that the Respondent violated the mandate of Section 171(1) of the CGST Act by appropriating the benefit instead of passing it to recipients. [Paras 2, 6]

Finding of violation of Section 171(1) affirmed for the period 01.07.2017 to 30.09.2018; profiteering established.

Penalty for violation of Section 171(1) under Section 171(3A) - Non-retrospectivity of penal provision - Temporal operation of tax penal provisions - Penalty under the provision inserted as Section 171(3A) could not be imposed for conduct occurring between 01.07.2017 and 30.09.2018 because the provision was introduced with effect from 01.01.2020. - HELD THAT: - The Authority examined the statutory scheme and the Notification implementing the Finance (No. 2) Act, 2019 which inserted sub-section 171(3A) effective 01.01.2020. As no penalty provision existed at the time the Respondent committed the violation (01.07.2017 to 30.09.2018), imposing the newly introduced penal provision retrospectively would be impermissible. Consequently, the notice seeking imposition of penalty under the newly inserted provision was withdrawn and the penalty proceedings were dropped. [Paras 7, 8]

Penalty proceedings under Section 171(3A) withdrawn and dropped on the ground of non-retrospectivity; no penalty imposed for the period 01.07.2017 to 30.09.2018.

Final Conclusion: The Authority upheld that the Respondent profiteered by not passing on additional ITC to homebuyers for 01.07.2017 to 30.09.2018; however, penalty under the provision inserted as Section 171(3A) (effective 01.01.2020) cannot be imposed retrospectively, and the penalty proceedings are withdrawn and dropped.

Commensurate reduction in prices - passing on the benefit of input tax credit - anti-profiteering under Section 171 of the CGST Act, 2017 - denial of input tax credit impact ratio - no netting off / zeroing of benefits - deposit in Consumer Welfare Fund - interest at 18% on profiteered amount

Commensurate reduction in prices - passing on the benefit of input tax credit - The Respondent did not pass on the commensurate benefit of the reduction in GST rate to his customers in respect of certain items supplied. - HELD THAT: - The Authority accepted the DGAP's comparison of average pre-rate-reduction base prices with post-rate-reduction actual base prices (pre-period averages taken from 01.07.2017-31.10.2017 / 01.11.2017-14.11.2017 as applicable). It held that the statutory obligation under Section 171(1) required any reduction in rate or benefit of ITC to be passed by way of a commensurate monetary reduction in price. The DGAP computed the ratio of ITC to net taxable turnover (8.85%) to determine the permissible increase in base prices to offset denial of ITC; for 168 items the post-reduction base prices exceeded that permissible impact and thus the cum-tax price paid by consumers was not reduced commensurately. The Authority found the DGAP's methodology of item wise invoice comparison and use of representative pre reduction averages to be correct, rejecting the respondent's contentions on discounts, timing of price revisions, and MRP-based exclusions. [Paras 23, 24, 26, 27, 28]

Profiteering established: the Respondent failed to pass on the commensurate benefit on specified items for the investigation period.

Anti-profiteering under Section 171 of the CGST Act, 2017 - denial of input tax credit impact ratio - no netting off / zeroing of benefits - deposit in Consumer Welfare Fund - interest at 18% on profiteered amount - Quantification of profiteering and remedial directions under Section 171 and the Rules. - HELD THAT: - Relying on the DGAP's computations (Annexure-12), the Authority accepted the net higher sale realization due to increased base prices (after accounting for the impact of denial of ITC) as Rs. 6,66,700 (inclusive of GST) for the period 15.11.2017 to 31.03.2019. The Authority rejected the respondent's arguments for netting off negative entries, treating them as inapplicable because Section 171 requires benefit to be passed on each supply to each recipient and does not permit cross-subsidisation or netting across supplies. It also rejected contentions on time-bar and MRP exclusions, and held that the GST element on excess base price is part of the benefit denied and cannot be recovered from the Government but must be deposited per Rule 133. Consequential directions were issued for reduction of prices, deposit of the profiteered amount in equal parts into the Central and State Consumer Welfare Funds, and payment of interest at 18% from dates of realization until deposit, with monitoring by the concerned Commissioners. [Paras 33, 34, 36, 38, 39]

Profiteered amount fixed at Rs. 6,66,700 (inclusive of GST); Respondent directed to reduce prices commensurately, deposit Rs. 6,66,700 in equal parts into Central and Maharashtra State Consumer Welfare Funds with 18% interest, and compliance to be monitored by CGST/SGST Commissioners.

Final Conclusion: The Authority upholds the DGAP report: the Respondent contravened Section 171 by not passing the commensurate benefit of GST rate reduction, profiteering quantified at Rs. 6,66,700 (inclusive of GST) for 15.11.2017-31.03.2019, with directions to reduce prices, deposit the amount (with interest) into the Consumer Welfare Funds, and for statutory monitoring and recovery if necessary.

Deduction under section 80IA - Application of precedent and consistency of allowance across assessment years - Section 14A and Rule 8D disallowance - Limitation of section 14A disallowance to the extent of exempt income

Deduction under section 80IA - Application of precedent and consistency of allowance across assessment years - Assessee entitled to deduction under section 80IA for the assessment years in question. - HELD THAT: - The Tribunal examined the claim of deduction under section 80IA in the light of earlier decisions in the assessee's own appeals and the binding decision of the Gujarat High Court. The Tribunal accepted the assessee's contention that the claim had been allowed in the initial assessment year (A.Y. 2005-06) after thorough examination and held that the same claim could not be denied in subsequent assessment years. Relying on the Co ordinate Bench's earlier orders and the High Court's reasoning regarding the explanatory amendment and retrospective effect, the Tribunal directed allowance of the claim of deduction. The Tribunal therefore allowed the ground of appeal concerning disallowance under section 80IA. [Paras 7, 8]

Deduction under section 80IA is allowed and the addition/disallowance on this ground is set aside.

Section 14A and Rule 8D disallowance - Limitation of section 14A disallowance to the extent of exempt income - Disallowance under section 14A computed under Rule 8D is restricted to the amount of exempt income earned. - HELD THAT: - The Tribunal considered the assessee's challenge to the disallowance under section 14A and the application of Rule 8D. Noting that the assessee's exempt dividend income for the year was nominal, the Tribunal followed the binding view of the Jurisdictional High Court that a disallowance under section 14A (as computed under Rule 8D) cannot exceed the exempt income itself. Applying that principle to the facts, the Tribunal held that the disallowance could not be made in excess of the exempt dividend income and accordingly allowed the assessee's ground on this point. [Paras 13, 14]

Disallowance under section 14A/Rule 8D is limited to the exempt income; the addition as made is thus restricted accordingly.

Final Conclusion: The appeal is allowed: the claim of deduction under section 80IA is sustained for the relevant assessment years, and the disallowance under section 14A/Rule 8D is restricted to the extent of exempt income; overall the assessee's appeal succeeds.

Allowability of trading loss as stock-in-trade - valuation of stock-in-trade - annual value of house property - treatment of leave and license agreement versus lease - applicability of Rent Control Act to assessment of annual value - notional interest as basis for determination of annual value - recomputation of interest under sections 234A, 234B and 234C - maintainability of appeal under low tax effect circular

Allowability of trading loss as stock-in-trade - valuation of stock-in-trade - Whether the trading loss of Rs. 17.01 lacs (and similar losses in other years) on account of fall in value of shares treated as stock-in-trade is allowable. - HELD THAT: - The Tribunal examined the factual matrix and the earlier coordinate-bench decision in the assessee's own case for AYs 1996-97 & 1997-98 which had upheld the CIT(A)'s allowance of similar trading losses. That bench applied authorities recognising that intermittent inactivity does not conclusively dislodge a claim that trading in shares was being carried on and that valuation methodology consistently followed for stock-in-trade is material. The facts of the lead year show the scrips were converted to stock-in-trade in earlier years and valuation of closing stock at year-end produced the loss. There was no record of any material change in facts or any adverse decision contrary to the earlier Tribunal view. Applying the same reasoning, the Tribunal held the fall in value of the scrips constituted an allowable trading loss. [Paras 6]

Trading loss allowed; Ground No. 3 allowed.

Annual value of house property - treatment of leave and license agreement versus lease - applicability of Rent Control Act to assessment of annual value - notional interest as basis for determination of annual value - Whether the Assessing Officer's determination of annual value by adopting notional interest (12% of interest-free deposit) is sustainable, and whether the property was exempt from Rent Control Act consequences because it was given on leave and license. - HELD THAT: - The Tribunal reviewed earlier findings in the assessee's own appeals (AYs 1996-97 & 1997-98) where the CIT(A) had held (and the Tribunal had upheld) that the leave and license did not amount to transfer of ownership and that notional interest could not be adopted as the ALV; the AO could not disregard rent control legislation and municipal valuation evidence. In the present lead year the CIT(A) directed AO to re-fix ALV considering factors such as area, location, and the existence of a large interest-free deposit, treating the AO's adoption of 12% of the deposit as unjustified. The Tribunal found no change in material facts and no contrary authority; hence, applying the consistent earlier Tribunal view, it quashed the CIT(A)'s direction to refix on the basis that the property was outside Rent Control Act and deleted the additions made by the AO. [Paras 10]

Directions to re-fix ALV on the basis of notional interest quashed; additions deleted; Ground Nos. 1 & 2 allowed.

Recomputation of interest under sections 234A, 234B and 234C - Adjudication of grievance regarding levy of interest under sections 234A, 234B and 234C. - HELD THAT: - The Tribunal noted the assessee's contention that the return was filed within time (affecting 234A) and that there were errors in computation under sections 234B and 234C. The Tribunal did not decide the correctness of any particular interest computation on the merits but directed the Assessing Officer to recompute the income in accordance with the Tribunal's deletions and to levy interest only in accordance with law. [Paras 11]

Interest to be recomputed by the Assessing Officer in accordance with law; ground allowed for statistical purposes (remanded for computation).

Maintainability of appeal under low tax effect circular - Whether the revenue's cross-appeal for AY 1999-2000 is maintainable in view of the low tax effect circular. - HELD THAT: - The Tribunal observed that the tax effect of the revenue's disputed additions for AY 1999-2000 was below the monetary limit prescribed by CBDT Circular No. 17/2019 dated 08/08/2019 and consequently held the revenue's appeal to be not maintainable under that circular. [Paras 13]

Revenue's appeal for AY 1999-2000 dismissed as not maintainable under the low tax effect circular.

Final Conclusion: The Tribunal allowed the assessee's appeals for the lead year and several other Assessment Years by (i) holding the trading losses on diminution in value of scrips to be allowable, (ii) rejecting the Assessing Officer's fixation of annual value on the basis of notional interest and deleting the related additions, (iii) directing recomputation of interest under sections 234A, 234B and 234C in accordance with law, and (iv) dismissing the revenue's cross-appeal for AY 1999-2000 as not maintainable under the low tax effect circular; the orders in other linked years were decided mutatis mutandis in accordance with these conclusions.

Notice issued in the name of a non-existent entity is void ab initio - amalgamation causes the amalgamating company to cease to exist - assessment framed against a non-existent entity is a nullity - section 292BB cannot cure jurisdictional defects arising from notices issued to non-existent entities - participation of successor in proceedings does not create estoppel against law

Notice issued in the name of a non-existent entity is void ab initio - assessment framed against a non-existent entity is a nullity - amalgamation causes the amalgamating company to cease to exist - participation of successor in proceedings does not create estoppel against law - Validity of assessments and proceedings completed under section 143(3)/153A in the name of companies which had been amalgamated into the assessee prior to issuance of jurisdictional notices - HELD THAT: - The Tribunal examined whether notices and consequential assessments issued and completed in the name of M/s. Samudra Vyapaar Pvt. Ltd. and M/s. IQ City Infrastructure Pvt. Ltd. after those entities had been amalgamated into M/s. Mani Square Ltd. were legally valid. Following its earlier decision in the assessee's own case and consistent Supreme Court and High Court precedents, the Tribunal held that upon sanction of a scheme of amalgamation the amalgamating company ceases to exist and therefore cannot be the subject of fresh assessment proceedings. A jurisdictional notice addressed to a non-existent entity is an incurable jurisdictional defect and renders the subsequent assessment a nullity; such a defect cannot be cured by section 292BB. The Tribunal also rejected the contention that the presence of the transferee's name in the cause title or participation by the successor cures the defect, observing that participation cannot operate as an estoppel against law. Applying these principles to the facts on record, the Tribunal found that the AO issued mandatory notices and framed assessments in the name of entities which had ceased to exist, and therefore the assessments were without jurisdiction and void ab initio. [Paras 4, 8, 9]

The assessments and proceedings under section 143(3)/153A made in the name of the amalgamated (non-existent) entities are void ab initio and are cancelled.

Final Conclusion: All five appeals are allowed: the assessments completed by the AO under section 143(3)/153A for AYs 2011-12, 2012-13 and 2013-14 in the name of the amalgamated (non-existent) entities are held void and are cancelled; remaining grounds have become academic.

Rejection of books of account under section 145 - estimation of income by applying gross profit ratio - reliance on average gross profit as benchmark for addition - disallowance under section 40A(2)(b) for related-party remuneration - ad-hoc disallowance and requirement of specific evidence - disallowance for personal/non-business usage of expenses

Estimation of income by applying gross profit ratio - rejection of books of account under section 145 - reliance on average gross profit as benchmark for addition - Validity of addition made by estimating gross profit shortfall by applying an average gross profit ratio and the rejection of books of account for the year under consideration. - HELD THAT: - The Tribunal examined the Assessing Officer's adoption of an average gross profit (G.P.) ratio based on surrounding years and the CIT(A)'s modification to take an alternate average. The Assessing Officer had treated the books as unreliable after noting absence of quantitative details, substantial purchases from unregistered dealers, and unexplained breakage/damages; the CIT(A) accepted that these were specific reasons justifying treatment under section 145 and therefore applied an adjusted G.P. benchmark (average of two relevant years) rather than the AO's broader averaging. The Tribunal found that the CIT(A) had considered practical aspects and reasonably moderated the AO's estimate, providing partial relief to the assessee; those findings were sustained as they involved considered exercise of judgment applying the benchmark G.P. to quantify the addition. [Paras 5]

Addition confirmed in part by upholding the CIT(A)'s adoption of a 1.34% G.P. uplift; ground dismissed.

Disallowance under section 40A(2)(b) for related-party remuneration - ad-hoc disallowance and requirement of specific evidence - Sustainability of the ad-hoc disallowance of salaries paid to the assessee's sons under section 40A(2)(b) where no specific evidence was recorded to show unreasonableness or lack of services. - HELD THAT: - The Assessing Officer disallowed a substantial portion of salaries paid to three sons for lack of documentary proof of work; the CIT(A) sustained a part-disallowance as reasonable. The Tribunal observed that the department did not contend that the sons were not involved in business nor produced specific evidence demonstrating the unreasonableness of the remuneration. In absence of particularised findings and articulation of reasons for the ad-hoc percentage disallowed, the Tribunal held such estimation to be unsustainable and directed deletion of the addition. [Paras 9]

Addition deleted; ground allowed.

Disallowance for personal/non-business usage of expenses - ad-hoc disallowance and requirement of specific evidence - Validity of 10% ad-hoc disallowances on telephone, vehicle expenses and depreciation made for presumed personal usage without specific evidence. - HELD THAT: - Revenue made uniform 10% disallowances on certain expenses because personal use could not be ruled out; neither the AO nor the CIT(A) produced specific evidence of personal usage. The Department did not press the matter substantively and conceded that deletion would have negligible revenue impact. The Tribunal held that ad-hoc disallowances unsupported by specific evidence are not permissible under the taxing statutes and, considering the small amounts and lack of particularised findings, directed deletion of the additions. [Paras 13]

Additions deleted; ground allowed.

Final Conclusion: The appeal is partly allowed: the CIT(A)'s moderated estimate of addition by applying an adjusted gross profit benchmark is upheld; additions relating to salaries paid to the assessee's sons and ad-hoc 10% disallowances on telephone, vehicle expenses and depreciation are deleted for lack of specific evidence and unsustainable ad-hoc estimation.

Notional income from house property - self occupied foreign property and taxation in India - adhoc escalation of valuation - Section 14A disallowance - Rule 8D computation mechanism - objective satisfaction for invoking Rule 8D - limitation of disallowance to quantum of exempt income

Notional income from house property - self occupied foreign property and taxation in India - adhoc escalation of valuation - Whether the addition of notional house property income in respect of the Dubai Palm Signature Villa and the ld. AO's adhoc 10% increase over the earlier year's assessed annual value were justified - HELD THAT: - The Tribunal recorded that notional rental income from the Dubai property had been treated as taxable in earlier years and that those earlier conclusions against the assessee were not now sought to be reopened. The only contested point before the Tribunal was the ld. AO's application of a unilateral 10% ad hoc increase over the prior year's assessed value. The valuation report relied upon by the ld. AO itself showed a year on year declining estimated rental value for the subject property (declining ranges for 2008-2010 and the inspection date's lower range). On this factual matrix the Tribunal held there was no justification for an adhoc 10% escalation and directed the ld. AO to determine the rental income for the year under consideration without making any adhoc 10% increase over the previous year's figure, thereby partly allowing the assessee's grounds. [Paras 3]

Addition confirmed in principle by earlier orders is not disturbed, but the adhoc 10% increase is disallowed and AO to compute rental income without that increase

Section 14A disallowance - Rule 8D computation mechanism - objective satisfaction for invoking Rule 8D - limitation of disallowance to quantum of exempt income - Whether disallowance under Section 14A read with Rule 8D should be made and the manner of computing such disallowance - HELD THAT: - The Tribunal examined the ld. AO's recorded satisfaction that the assessee's expenditure as reflected in the financial statements was of an indivisible nature and that no expenses attributable to investment activity had been debited to the capital account. Given the absence of any detailed working supporting the assessee's voluntary nominal disallowance and the AO's recorded objective satisfaction, the Tribunal upheld the application of the Rule 8D computation mechanism. Consistent with the Special Bench direction cited by the ld. CIT(A), the AO was directed to compute the disallowance under Rule 8D(2)(iii) by considering only those investments which actually yielded exempt income, allow set off for the voluntary disallowance already made by the assessee, and ensure that the disallowance in any case does not exceed the exempt income earned. [Paras 6]

AO to recompute disallowance under Rule 8D(2)(iii) considering only investments yielding exempt income, reduce the assessee's voluntary disallowance accordingly, and ensure disallowance does not exceed exempt income

Final Conclusion: Appeals by the assessee for AY 2013-14 and AY 2014-15 are partly allowed: the adhoc 10% escalation applied to the Dubai property's assessed annual value is disallowed and the AO is directed to compute rental income without that increase; disallowance under Section 14A r.w. Rule 8D is to be recomputed by the AO following the Tribunal's directions (considering only investments yielding exempt income, allowing set off of the voluntary disallowance and ensuring disallowance does not exceed exempt income). The revenue's appeal for AY 2014-15 is dismissed.

Taxation of worldwide income of a resident including profits of foreign branches - Double Taxation Avoidance Agreement - credit versus exemption - Effect of notification under section 90(3) on treaty interpretation - Foreign tax credit under DTAAs - Minimum Alternate Tax (MAT) - applicability of section 115JB to nationalised banks - Computation of book profits under section 115JB - addback for provision for diminution in value of asset - Remand for factual verification of write off versus provision - Disallowance under section 14A remit for fresh adjudication - Taxability of broken period interest - due basis v. accrual basis - Nature of perpetual bonds - borrowing v. quasi equity and requirement of element of repayment

Taxation of worldwide income of a resident including profits of foreign branches - Double Taxation Avoidance Agreement - credit versus exemption - Effect of notification under section 90(3) on treaty interpretation - Inclusion of profits of the assessee's foreign branches (aggregating Rs. 1,408.32 crores) in the assessee's taxable income in India - HELD THAT: - Tribunal rejected the assessee's claim that profits of foreign branches taxable in source countries under applicable DTAAs must be excluded from Indian taxation. The Tribunal held that most relevant Indian tax treaties adopt the credit method; legislation and notification under section 90(3) (and the notification of 28 08 2008) require that income which "may be taxed" in the other country shall nevertheless be included in the resident's total income in India and relief granted by the method specified in the treaty. Prior Supreme Court authority to the contrary was held to have been overtaken by these legislative developments and related notifications; coordinate bench precedents favouring exclusion were treated as per incuriam and not followed. Consequently the Assessing Officer's inclusion of the foreign branch profits in the assessee's total income was upheld.

Claim for exclusion of foreign branch profits from Indian taxable income dismissed; inclusion upheld.

Foreign tax credit under DTAAs - Double Taxation Avoidance Agreement - credit versus exemption - Grant of credit for taxes paid abroad in respect of profits of foreign branches - HELD THAT: - The Tribunal noted absence of detailed particulars of foreign taxes paid in respect of the branch profits. It directed that if the assessee furnishes requisite details proving taxes paid abroad on those branch profits, the Assessing Officer shall grant foreign tax credit to the extent admissible under the respective treaties, examining treaty provisions and computing credit jurisdiction wise. The matter was restored to the Assessing Officer for limited purpose of granting tax credit as per the treaties.

Assessee's claim for foreign tax credit allowed prospectively for adjudication by the Assessing Officer subject to production of details and treaty wise computation; matter restored for that limited purpose.

Minimum Alternate Tax (MAT) - applicability of section 115JB to nationalised banks - Whether section 115JB applies to the assessee bank (a nationalised bank constituted under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970) - HELD THAT: - Tribunal held that section 11 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 deems a corresponding new bank to be an Indian company "for the purposes of the Income tax Act, 1961", and this deeming operates for all purposes of the Income tax Act. The non obstante opening of section 115JB does not render it a standalone code insulated from other statutory deeming provisions; a non obstante clause overrides inconsistent provisions but does not mean total isolation from the Act. Further, accounting provisions applicable to banks under the Banking Regulation Act and the option preserved by Explanation 3/sub section (2) make section 115JB applicable to banks preparing accounts under their regulatory Act. Reliance on coordinate bench precedents excluding banks was rejected as inconsistent with statutory text and higher court authority.

Section 115JB applies to the assessee bank; plea of non applicability rejected.

Computation of book profits under section 115JB - addback for provision for diminution in value of asset - Remand for factual verification of write off versus provision - Whether the provision for bad and doubtful debts (aggregating Rs. 5,359.64 crores) should be added back in computing book profits under section 115JB or excluded as actual write offs - HELD THAT: - Tribunal observed that law (including the Gujarat High Court's decision in Vodafone Essar) distinguishes between mere provisions (to be added back) and actual write offs (which, if reflected by reduction of asset balances, may not be added back). The Assessing Officer had not verified whether the provision was simultaneously written off by reducing the loans and advances on the asset side of the balance sheet. Because a higher judicial authority has expressed the position and the factual matrix was not examined, the Tribunal declined to decide on merits and remitted the limited factual question to the CIT(A) to verify whether corresponding reduction from assets had occurred; if so, the amount should be excluded from book profits.

Remitted to CIT(A) for limited factual verification whether the provision was set off by reduction of assets; if established, direct exclusion from book profits; otherwise addback to be sustained.

Computation of book profits under section 115JB - treatment of foreign branch profits - Double Taxation Avoidance Agreement - credit versus exemption - Whether profits of foreign branches (Rs. 1,145.14 crores as contested for book profits) are to be excluded in computing book profits under section 115JB - HELD THAT: - Tribunal applied its earlier reasoning on inclusion of foreign branch profits in total income: treaty taxation in source jurisdictions does not by itself exclude such income from the resident's book profits in India; relief is by way of foreign tax credit under treaties/domestic law. No rationale exists to exclude incomes taxed abroad from computation of book profits for MAT. Accordingly, the proposal to exclude branch profits from book profits was rejected.

Claim to exclude foreign branch profits from book profits under section 115JB rejected.

Disallowance under section 14A remit for fresh adjudication - Disallowance under section 14A read with Rule 8D of expenditure claimed in relation to exempt income - HELD THAT: - There were no conclusive factual findings by the authorities below on whether the relevant shares were held as stock in trade and other factual aspects material to section 14A computation. A coordinate bench had remitted the near analogous issue for the preceding assessment year; in the interest of consistent treatment and in absence of categorical findings, the Tribunal remitted the matter to the Assessing Officer for fresh adjudication in light of relevant binding precedents.

Matter remitted to the Assessing Officer for de novo adjudication on facts and law.

Amortisation of lease premium - procedural stance where issue not pressed - Whether amortisation of lease premium aggregating to Rs. 4,08,67,975 is revenue expenditure (allowed) or capital expenditure - HELD THAT: - Assessee's representative informed the Tribunal that this issue is not pressed before the Tribunal because coordinate bench decisions are adverse; the Tribunal treated the ground as not pressed and dismissed it as not pressed, reserving the assessee's right to pursue further remedies.

Ground dismissed as not pressed.

Admission of additional ground and remand for examination in light of binding High Court precedent - Admission of additional ground that education cesses are not 'tax' for purpose of section 40(a)(ii) and remand for adjudication - HELD THAT: - Tribunal admitted the additional ground as a pure question of law not taken earlier and, noting that the jurisdictional High Court has decided the issue in favour of the assessee (Sesa Goa), remitted the matter to the Assessing Officer for fresh adjudication consistent with that High Court authority and law.

Additional ground admitted; matter remitted to Assessing Officer for de novo adjudication in accordance with binding High Court precedent.

Taxability of broken period interest - due basis v. accrual basis - Whether broken period interest is taxable on due basis or accrual basis - HELD THAT: - The Tribunal observed the issue is covered by several coordinate bench decisions in the assessee's own case and the CIT(A) followed those precedents. No contrary higher authority was shown; the Tribunal declined to interfere and approved the CIT(A)'s conclusion.

CIT(A)'s conclusion upheld; broken period interest taxable on the basis followed below (due basis as held by authorities below).

Provision for wage revision - allowance by appellate authorities - Allowability of provision for wage revision (Rs. 540,06,00,000) claimed by the assessee - HELD THAT: - The Tribunal noted coordinate bench decisions in the assessee's own case which had allowed the provision and that CIT(A) followed those views; absent contrary higher court authority the Tribunal sustained CIT(A)'s allowance and declined to interfere.

CIT(A)'s allowance of the provision for wage revision upheld.

Amortisation/premium on investments - allowance in view of RBI accounting and judicial precedents - Allowability of amortisation of premium on investments as claimed by the assessee - HELD THAT: - The Tribunal noted that this issue was covered by coordinate bench decisions and by the jurisdictional High Court in related contexts; CIT(A)'s allowance was in conformity with those authorities and was upheld.

CIT(A)'s allowance of amortisation of premium of investments upheld.

Nature of perpetual bonds - borrowing v. quasi equity and requirement of element of repayment - Deductibility of interest on perpetual bonds (whether interest deductible as interest on borrowing under section 36(1)(iii)) - HELD THAT: - The Assessing Officer relied on case law requiring an element of repayment to qualify as borrowing. The CIT(A) allowed the deduction on the facts before it, but the Tribunal found the record did not contain detailed terms of the perpetual bonds to determine presence or absence of an inherent repayment obligation. Given lack of material and the factual nature of the enquiry, the Tribunal remitted the matter to the CIT(A) for fresh adjudication after taking on record all relevant terms and facts about the instruments; parties remain free to advance all contentions on remand.

Matter remitted to CIT(A) for de novo factual consideration of the terms of the perpetual bonds and whether they amount to borrowings.

Disallowance under section 14A - Special Bench and conflicting High Court decisions - Validity of CIT(A)'s reliance on Special Bench decision (Vireet Investments) in face of conflicting High Court authority - HELD THAT: - Where non jurisdictional High Courts are split and Special Bench authority favours the assessee, Tribunal followed the Special Bench and, invoking principle that ambiguities in taxing statutes are resolved in favour of assessee, sustained CIT(A)'s reliance on the Special Bench in the facts of the case. The Tribunal declined to adopt an alternative High Court view and observed that the matter is for the jurisdictional High Court to decide ultimately.

CIT(A)'s reliance on the Special Bench decision was upheld; Assessing Officer's ground dismissed.

Final Conclusion: Both appeals were partly allowed. Foreign branch profits were held taxable in India but foreign tax credit may be allowed on production of details and treaty wise computation; section 115JB applies to the assessee bank though limited factual questions (notably treatment of the bad and doubtful debts provision and the true nature of perpetual bonds) were remitted for factual verification; several other issues (section 14A, education cess point, and specified accounting/contention issues) were remitted or decided as indicated above.

Treatment of seized documents in toto - allowance of unaccounted expenses against unaccounted receipts - estimation of undisclosed income - matching principle between receipts and expenses - inapplicability of Section 40A(3) to unaccounted cash transactions - deduction under Section 37(1) - treatment of capital contribution explained by on-money receipts

Allowance of unaccounted expenses against unaccounted receipts - treatment of seized documents in toto - estimation of undisclosed income - matching principle between receipts and expenses - inapplicability of Section 40A(3) to unaccounted cash transactions - deduction under Section 37(1) - Whether deduction in respect of unaccounted expenses shown in seized documents should be allowed against unaccounted on money receipts and, if not fully quantifiable, how the undisclosed income should be estimated - HELD THAT: - The Tribunal held that the seized documents containing both on money receipts and corresponding unaccounted expenses must be read in toto and the Revenue cannot give effect only to that part of the seized material favourable to it. Expenses shown in the seized diaries are therefore entitled to be considered, subject to the usual tests of revenue nature, prohibition by law and relevance to the project in question. Since portions of the unaccounted expenses were either capital, prohibited by law, or attributable to another project (as accepted by the CIT(A) and not contested by Revenue), and because the remaining unaccounted cash expenses could not be precisely quantified or fully substantiated, the undisclosed income had to be estimated. Applying the matching principle and practical considerations (including the assessee's admitted regular profit and the minimal documentation inherent in such unaccounted transactions), the Tribunal directed that 40% of the gross unaccounted receipts be treated as unaccounted income and distributed to the assessment years according to the percentage of completion method. The Tribunal further held that Section 40A(3) could not be invoked to deny deduction of unaccounted cash expenses in the facts of the case because such payments were part of the unaccounted transactions discovered in the search and would otherwise result in taxation of gross receipts without allowing matching expenditure. [Paras 3]

Deduction in respect of unaccounted expenses reflected in the seized documents is to be recognised subject to exclusions recorded by the CIT(A); undisclosed income to be estimated at 40% of the gross on money receipts and allocated to the relevant assessment years as per percentage of completion; Section 40A(3) held inapplicable to these unaccounted cash transactions.

Treatment of capital contribution explained by on-money receipts - Whether addition on account of unexplained capital contribution by a partner (deficit) was justified where partner stated in sworn statement that capital was from on money receipts - HELD THAT: - The Tribunal found that the partner had admitted in the sworn statement recorded under section 132(4) that capital contributions were made out of on money receipts. The seized documents did not specify years of receipt and on the facts the Tribunal accepted that on money pertaining to the project was available in the initial year and could legitimately explain the capital contribution irrespective of the year in which portions were offered to tax. Consequently the shortfall of the capital contribution was explained and the addition was deleted. [Paras 4]

Addition of the deficit in capital contribution was deleted.

Final Conclusion: The appeals are partly allowed: the Tribunal upheld that unaccounted expenses shown in the seized documents must be considered (subject to specific exclusions found by the CIT(A)) and directed estimation of undisclosed income at 40% of gross on money receipts to be apportioned by percentage of completion for the assessment years; the addition relating to unexplained partner capital contribution was deleted.

Validity of reopening under section 147/148 of the Income tax Act - jurisdictional limits of revision under section 263 of the Income tax Act - erroneous and prejudicial test for exercise of section 263 - scope of inquiry limited to the reasons recorded for reopening - requirement of application of mind and verification by the Assessing Officer

Validity of reopening under section 147/148 of the Income tax Act - jurisdictional limits of revision under section 263 of the Income tax Act - erroneous and prejudicial test for exercise of section 263 - scope of inquiry limited to the reasons recorded for reopening - requirement of application of mind and verification by the Assessing Officer - Whether the Principal Commissioner of Income tax was justified in exercising revisionary jurisdiction under section 263 to set aside the assessment where the Assessing Officer had reopened the assessment on specific information, had examined bank records and books of account, and had not made any addition on the basis of the information received. - HELD THAT: - The Tribunal held that exercise of power under section 263 requires satisfaction of both limbs: that the order of the Assessing Officer is erroneous and that it is prejudicial to the interest of the Revenue. Reopening of assessment under section 147/148 had been based on specific information alleging accommodation entries of Rs.20 lakhs from a named company. The assessee disputed receipt of such amounts and produced bank statements and books of account. The Assessing Officer examined the records, found only one credited amount from a different party, made no addition with respect to the alleged accommodation entries and accepted the return. The Principal CIT, relying on the same information that prompted reopening, merely held that the AO ought to have made further inquiries and thereby treated the AO's order as erroneous without pointing out any specific error in the AO's findings or record. The Tribunal explained that the revisional power under section 263 cannot be used to travel beyond the reasons recorded for reopening or to hypothesise errors where the AO has applied his mind and verified the material. In absence of any pointed-out error in the assessment order and given that no addition was made on the basis of the information for which the case was reopened, the twin conditions for exercise of section 263 were not satisfied. Reliance on the jurisprudence that an AO's acceptance after verification cannot be treated as erroneous merely because more inquiries might have been possible was affirmed. Consequently, the order under section 263 setting aside the assessment was quashed. [Paras 11, 12]

Impugned order passed under section 263 quashed; appeal allowed.

Final Conclusion: The Appellate Tribunal set aside the Principal CIT's revisionary order under section 263, holding that the Assessing Officer had verified the material, had not made any addition on the basis of the information which prompted reopening, and that the conditions of being both erroneous and prejudicial to Revenue were not established; the appeal is allowed.

Genuineness of purchase transactions - verifiability of suppliers in search and seizure proceedings - evidentiary value of bills, bank payments and confirmations - burden of proof under section 68 regarding identity, genuineness and creditworthiness of creditors - double addition and principle against duplicative assessment - reliance on co-ordinate bench precedent

Genuineness of purchase transactions - verifiability of suppliers in search and seizure proceedings - evidentiary value of bills, bank payments and confirmations - reliance on co-ordinate bench precedent - Deletion by the CIT(A) of the disallowance of purchases aggregating to Rs. 22,18,88,782/- was sustainable. - HELD THAT: - The Tribunal examined the AO's disallowance of purchases from specified suppliers which the AO treated as non-genuine after field enquiries and search proceedings failed to locate the parties. The Tribunal observed that on identical facts in the assessee's own case for an earlier year a co-ordinate Bench (ITA No. 4907/Del/2014) had considered similar additions and accepted the assessee's supporting evidence - bills, PAN/VAT/TIN details, confirmations and bank records showing payments by account-payee cheques - and deleted the addition. Noting absence of distinguishing facts in the assessment under appeal and that payments were supported by documentary and banking evidence, the Tribunal respectfully followed the co-ordinate Bench's findings and found no reason to sustain the AO's adverse view. The revenue grounds challenging the deletion were therefore dismissed. [Paras 8]

Grounds 1 to 5 dismissed; deletion of the disallowance of Rs. 22,18,88,782/- upheld.

Burden of proof under section 68 regarding identity, genuineness and creditworthiness of creditors - double addition and principle against duplicative assessment - Deletion by the CIT(A) of the addition of Rs. 6.25 crores made by the AO under section 68 was not sustainable and was set aside. - HELD THAT: - The AO added the loan credits to the assessee's income under section 68 after concluding the assessee failed to discharge the initial onus of proving identity, genuineness and creditworthiness of the lenders. The CIT(A) deleted the addition on the ground that the same funds were subsequently shown as share application money in a group concern and additions were made in that concern, treating the matter as double addition. The Tribunal disagreed with that reasoning: the mere fact that the same sums featured in group companies does not relieve the assessee of its statutory burden under section 68 in respect of amounts appearing as credits in its own books. Finding that the assessee had failed to satisfactorily establish the requisite facts, the Tribunal held the provisions of section 68 applied and restored the AO's addition. [Paras 18, 19]

Grounds 6 to 8 allowed; deletion of the Rs. 6.25 crores addition set aside and AO's addition restored.

Final Conclusion: The revenue appeal is partly allowed: the Tribunal upheld the CIT(A)'s deletion of the disallowance relating to unverifiable purchases but set aside the CIT(A)'s deletion of the addition under section 68 of Rs. 6.25 crores and restored the assessment on that count.

Jurisdiction of Assessing Officer - pecuniary jurisdiction under CBDT Instruction No. 1/2011 - reopening under section 147/148 of the Income-tax Act - reason to believe based on survey report - binding nature of CBDT instructions issued under section 119 - jurisdictional defect vitiates proceedings as nullity - section 292BB cannot cure lack of jurisdiction

Jurisdiction of Assessing Officer - pecuniary jurisdiction under CBDT Instruction No. 1/2011 - reopening under section 147/148 of the Income-tax Act - jurisdictional defect vitiates proceedings as nullity - Whether the reassessment proceedings framed by the ITO, Angul Ward for Asst. Year 2012-13 are void for lack of jurisdiction because the returned income exceeded the pecuniary limit for ITOs under CBDT Instruction No. 1/2011. - HELD THAT: - The Tribunal examined the returns filed by the assessee for Asst. Year 2012-13 and noted declared income in excess of the monetary limit prescribed for ITOs in CBDT Instruction No. 1/2011 (non-corporate returns: ITOs up to Rs. 15 lakhs). The reassessment was framed by the ITO, Angul, though the return had been filed with ACIT, Circle-1, Bhubaneswar and the returned income exceeded the ITO pecuniary limit. The Tribunal held that CBDT instructions issued under section 119 are binding on departmental authorities and must be given effect to; ignorance or non-observance by revenue officers cannot confer jurisdiction. Reliance on earlier decisions established that conferment of jurisdiction is a legislative function and cannot be conferred by consent or acquiescence, and that mere participation in proceedings does not cure a jurisdictional defect. The Tribunal also observed that section 292BB could not be invoked to cure a lack of jurisdiction. On these grounds the Tribunal concluded that the ITO did not have jurisdiction to initiate/reopen and complete reassessment proceedings under sections 147/148/144 for the year in question, and that the proceedings were therefore void ab initio. [Paras 11, 12, 18, 19]

Reassessment framed by ITO, Angul Ward for Asst. Year 2012-13 quashed for lack of jurisdiction; appeal allowed on this legal ground.

Final Conclusion: The Tribunal allowed the appeal on the sole legal ground that the reassessment framed by the ITO, Angul Ward for Asst. Year 2012-13 was void for lack of pecuniary jurisdiction in light of CBDT Instruction No. 1/2011, quashed the reassessment proceedings and declined to adjudicate the remaining merits as academic.

Business connection - Permanent establishment - Fixed place permanent establishment - Installation permanent establishment - Service permanent establishment - Dependent agent permanent establishment - Attribution of profits to a permanent establishment - Dominant nature test - Title and risk of goods - Fees for technical services - Liability to interest under section 234B

Limitation - Additional ground that the assessment order is barred by limitation dismissed. - HELD THAT: - The assessee's additional ground asserting limitation was considered and rejected by the Tribunal. The bench followed a coordinate-bench decision in Reliance Capital Markets Ltd. where an identical ground was dismissed; accordingly the additional ground raised in these appeals is dismissed.

The additional ground that the impugned order is barred by limitation is dismissed.

Business connection - Dominant nature test - The assessee had a business connection in India in respect of supply and commissioning of telecom equipment. - HELD THAT: - Having examined contractual terms, survey documents, emails and recorded statements, the Tribunal found a real and intimate relationship between the foreign seller and its Indian affiliate such that the sequence of offshore supply followed by on-site customisation, installation and commissioning in India contributed directly to the foreign enterprise's earnings. The Tribunal applied the dominant-nature analysis for composite contracts and relied on authorities (including decisions addressing acceptance/inspection and post-delivery certification) to hold that because the seller retained risk of rejection and engaged in supervision up to commissioning, the business of the foreign enterprise extended into India and thus a business connection under the domestic law exists.

There is a business connection in India in relation to the appellant's supplies and commissioning activities.

Permanent establishment - Fixed place permanent establishment - Installation permanent establishment - Service permanent establishment - Dependent agent permanent establishment - The appellant had a permanent establishment in India - fixed place PE, installation PE, service PE and dependent agent PE - under the Indo China DTAA. - HELD THAT: - On review of contractual arrangements, documentary evidence seized during survey, and statements of employees, the Tribunal concluded that (i) Indian premises and regular operations (including joint bidding and site activities) amounted to a fixed place at the disposal of the non-resident; (ii) supervisory and installation/assembly activities undertaken in India, often lasting beyond the relevant time threshold, constituted an installation PE; (iii) services rendered in India other than preparatory/auxiliary services, continuing beyond the treaty period threshold, gave rise to a service PE; and (iv) the Indian affiliate habitually negotiated and participated in concluding contracts on behalf of the foreign enterprise and was economically dependent, establishing a dependent agent PE. The Tribunal rejected the assessee's contentions that activities were merely preparatory/auxiliary or that decision making was exclusively abroad, finding the factual matrix showed control, secondment and active participation by foreign personnel in India.

The appellant constituted a permanent establishment in India in the forms asserted by the revenue.

Title and risk of goods - Title and risk did not effectively pass outside India so as to exclude India from taxation of the activities connected with supply and commissioning. - HELD THAT: - The Tribunal examined supply contracts and clauses concerning acceptance tests, rights of rejection and post delivery inspection/certification. It held that where the buyer retains rights (including rejection on acceptance testing) and the seller remains obligated to remedy defects or replace goods in India, the risk of rejection and obligations attendant to delivery continued to operate in India. Relying on comparative authorities addressing when title and risk pass and on the dominant nature of integrated supply and service contracts, the Tribunal concluded that the contractual regime and practical conduct showed extension of the foreign enterprise's business into India and undermined the claim that property and risk had conclusively passed outside India.

The contractual scheme and conduct showed that title/risk did not pass outside India in a manner that excluded Indian taxation of the connected activities.

Attribution of profits to a permanent establishment - Attribution of profits was to be determined following the Tribunal's earlier findings in the assessee's own case for earlier years; the Tribunal directed re computation accordingly. - HELD THAT: - Having held that a PE existed, the Tribunal addressed attribution and adopted the earlier coordinate bench decision in the appellant's own case for A.Ys. 2005 06 to 2008 09. The prior decision treated the integrated supply (hardware with embedded software) as a single contract resulting in business profits assessable as arising from the business connection/PE rather than as royalties. Respectfully following those findings, the Tribunal directed the Assessing Officer to rework the appellant's income in accordance with the co ordinate bench's conclusions.

Attribution to the PE shall be computed in accordance with the Tribunal's earlier findings in the appellant's own case; Assessing Officer directed to rework income accordingly.

Liability to interest under section 234B - Interest under section 234B of the Act shall not be charged up to A.Y. 2012 13; interest may be levied from A.Y. 2013 14 in accordance with law. - HELD THAT: - The Tribunal applied the statutory scheme for advance tax and noted that liability to interest under section 234B arises only where the assessee is liable to pay advance tax under section 208. Payments to non residents were subject to withholding under section 195, and where tax was deductible at source the payers bore the obligation to deduct, reducing or eliminating the non resident's advance tax liability. Relying on the Delhi High Court authority that no interest under section 234B can be levied on the payee for non payment of advance tax where deduction at source was required of the payer, and noting a later statutory amendment effective from A.Y. 2013 14, the Tribunal directed that interest under section 234B not be charged up to A.Y. 2012 13 but may be applied from A.Y. 2013 14 onward as per amended law.

No interest under section 234B to be charged for years up to A.Y. 2012 13; interest permissible from A.Y. 2013 14 as per statutory amendment.

Final Conclusion: The appeals are dismissed on merits: the Tribunal held that the appellant had a business connection and a permanent establishment in India (fixed place, installation, service and dependent agent PEs), that title/risk and the integrated nature of supply and commissioning supported Indian taxation, directed attribution and computation in accordance with the Tribunal's earlier findings in the appellant's own case, dismissed the limitation plea, and ruled that interest under section 234B is not chargeable up to A.Y. 2012 13 but may be levied from A.Y. 2013 14 in accordance with law.

Validity of final assessment order passed without issuing draft assessment order under section 144C(1) - mandatory requirement to issue draft assessment order where Transfer Pricing Officer proposes adjustments - failure to issue draft assessment order renders final assessment order null and void - obligation of Assessing Officer to forward draft assessment order to assessee in the first instance after TPO determination

Validity of final assessment order passed without issuing draft assessment order under section 144C(1) - mandatory requirement to issue draft assessment order where Transfer Pricing Officer proposes adjustments - Final assessment order passed by the Assessing Officer without first passing a draft assessment order under section 144C(1) after a TPO determination and ITAT remand. - HELD THAT: - The Tribunal found that after the ITAT remanded the issue of Arms Length Price to the AO/TPO and the TPO made fresh transfer pricing adjustments, the Assessing Officer passed a final assessment order incorporating the TPO's adjustment without first issuing a draft assessment order under section 144C(1). The Tribunal relied on a consistent line of judicial authority holding that non-compliance with the mandatory requirement to issue a draft assessment order under section 144C(1) vitiates the final assessment order. The decision of the Delhi High Court in Turner International India Pvt. Ltd. v. DCIT and related High Court authorities were held to establish that failure to forward a draft assessment order deprives the assessee of the opportunity to approach the Dispute Resolution Panel and renders the final order and consequential notices invalid. The Tribunal further noted the Supreme Court's ruling in DCIT v. Control Risks India (P.) Ltd. to the same effect, namely that where the TPO proposes additions to ALP the AO is duty bound to pass a draft assessment order and that passing a final order without doing so contravenes section 144C. Applying these authorities to the facts, the Tribunal concluded that the CIT(A) was correct in quashing the final assessment order dated 29.12.2017 for non-compliance with section 144C(1). [Paras 6, 7]

The final assessment order passed without issuing the draft assessment order under section 144C(1) is invalid and is quashed; the Revenue's appeal is dismissed.

Final Conclusion: The Tribunal dismisses the Revenue's appeal and upholds the CIT(A)'s order quashing the final assessment order for failure to issue a draft assessment order under section 144C(1) following TPO/ITAT proceedings.

Reopening of assessment - disposal of objections to reopening - requirement of a separate speaking order - assessing officer's jurisdiction - GKN Driveshafts principle on objections to reopening - quashing reassessment for non-compliance with procedural mandate

Disposal of objections to reopening - requirement of a separate speaking order - assessing officer's jurisdiction - GKN Driveshafts principle on objections to reopening - quashing reassessment for non-compliance with procedural mandate - Validity of the reassessment where the Assessing Officer did not pass a separate speaking order disposing of preliminary objections to reopening. - HELD THAT: - The Tribunal found that the assessee had filed detailed preliminary objections to the reopening and that the Assessing Officer completed the reassessment without first disposing of those objections by a separate speaking order. Applying the principle in GKN Driveshafts that objections to reopening must be dealt with before completion of assessment, and following binding decisions of the Bombay High Court (including Fomento Resorts & Hotels Ltd.) and the coordinate pronouncements of the Tribunal, the failure to pass an independent order disposing of the objections rendered the Assessing Officer's exercise of jurisdiction in reopening the assessment vitiated. The Tribunal noted authority holding that where reopening is effected without such disposal the reassessment must be quashed and should not be remitted to the Assessing Officer for fresh decision, to avoid permitting an initial unlawful exercise of jurisdiction to be cured by subsequent proceedings. Because the preliminary jurisdictional defect was established, the Tribunal declined to adjudicate the merits of the additions as academic.

Reassessment under section 143(3) r.w.s.147 quashed for A.Y. 2011-12 as the Assessing Officer did not pass a separate speaking order disposing of the objections to reopening; merits not decided.

Final Conclusion: Following the binding principle that objections to reopening must be disposed of by a separate speaking order before completing reassessment, the Tribunal quashed the reassessment for A.Y. 2011-12 and allowed the appeal; consequential merits were not decided.

Remand for de novo adjudication - submission of additional evidence at appellate stage - opportunity to obtain remand report - Rule 46A of the Income Tax Rules - input VAT set off - order under Section 263 prejudicial to the revenue

Submission of additional evidence at appellate stage - opportunity to obtain remand report - Rule 46A of the Income Tax Rules - input VAT set off - remand for de novo adjudication - Whether the matter should be remanded to the Assessing Officer for fresh adjudication in view of additional VAT-related evidence produced before the CIT(A) and the non-obtainment of a remand report under Rule 46A. - HELD THAT: - The assessee produced VAT audit details and challans before the CIT(A) for the first time showing input VAT available for set off against output VAT, which the Assessing Officer had not seen during assessment. The CIT(A) accepted those documents and deleted the addition made by the AO without calling for a remand report from the AO under Rule 46A. The Tribunal noted that the factual material on input VAT set off was admittedly not before the AO and that the only grievance of the revenue before the Tribunal was the CIT(A)'s non-compliance with Rule 46A. Both parties agreed to remit the matter to the file of the AO. In the interest of justice and to enable verification of the newly produced material and fresh adjudication on the turnover discrepancy and set off claim, the Tribunal considered it appropriate to set aside the CIT(A)'s order and remand the issue to the AO for de novo adjudication in accordance with law.

Matter remitted to the Assessing Officer for de novo adjudication of the turnover variation and input VAT set off; revenue's grounds allowed for statistical purposes.

Final Conclusion: The Tribunal set aside the CIT(A)'s order insofar as it rested on VAT documentation not previously before the AO and, noting non-compliance with Rule 46A, remanded the issue to the Assessing Officer for fresh adjudication; the revenue appeal is allowed for statistical purposes.

Penalty under section 271(1)(c) for concealment or furnishing inaccurate particulars of income - Penalty under section 271B for failure to furnish tax audit report within prescribed time - Validity of notice under section 274 when multiple limbs of section 271(1)(c) are initiated

Penalty under section 271(1)(c) for concealment or furnishing inaccurate particulars of income - Presumption of concealment and displacement by production of bank accounts and revised balance sheet - Validity of notice under section 274 when both limbs are initiated - Levy of penalty under section 271(1)(c) deleted despite initiation of penalty proceedings under both limbs - HELD THAT: - The Tribunal held that the notice under section 274 was not invalid merely because the assessing officer had initiated proceedings under both limbs of section 271(1)(c); the penalty order itself clearly proceeded on concealment as there was material indicating undisclosed bank credits. However, on merits the assessee produced the bank statements and a revised balance sheet during assessment proceedings which explained the credits and displaced the presumption that the failure to disclose arose from fraud or gross or willful neglect. The assessing officer made an estimated addition of Rs. 7 lakhs, which the assessee did not contest by appeal, and no other discrepancy was shown in respect of the two bank accounts except non-maintenance of separate accounts; having demonstrated bona fides, the assessee was held not liable for concealment deserving penalty. The Tribunal therefore deleted the penalty under section 271(1)(c). [Paras 12, 13, 14, 15, 16]

Penalty under section 271(1)(c) deleted.

Penalty under section 271B for failure to furnish tax audit report within prescribed time - Consideration of medical illness, rural circumstances and absence of mala fide conduct - Relevance of availability of audit report at assessment proceedings - Levy of penalty under section 271B deleted for delay in filing the tax audit report - HELD THAT: - The Tribunal noted that the due date for filing the audit report had been extended and the delay involved was three months. The assessee attributed the delay to ill health and limited means in a village area; there was no material from the revenue contradicting this explanation and the assessee had not been penalised for similar default in preceding years. Importantly, the audit report was available to the assessing officer at the time of assessment. On these facts the Tribunal found the delay was not mala fide or arising from willful neglect and exercised a liberal view in deleting the penalty under section 271B. [Paras 17, 21, 22, 23]

Penalty under section 271B deleted.

Final Conclusion: Both appeals are allowed: the penalty levied under section 271(1)(c) for concealment/furnishing inaccurate particulars is deleted on merits after the assessee displaced the presumption of concealment, and the penalty under section 271B for delay in filing the tax audit report is deleted in view of illness, rural circumstances, absence of mala fide conduct and availability of the audit report at assessment.

Adjudication of show-cause notice under section 124 of the Customs Act, 1962 - speaking order - hearing and independent application of mind - consideration of this Court's decision in M/s. Harihar Collections - expedited adjudication within a prescribed short period

Adjudication of show-cause notice under section 124 of the Customs Act, 1962 - speaking order - hearing and independent application of mind - consideration of this Court's decision in M/s. Harihar Collections - Adjudicating authority directed to decide the show-cause notices issued under section 124 of the Customs Act by passing speaking orders after hearing the petitioners and applying its mind independently, having regard to this Court's decision in M/s. Harihar Collections. - HELD THAT: - The Court noted that show-cause notices under section 124 had been issued and replies filed and that hearings were granted but no adjudication had been taken. Rather than addressing the merits itself, and with parties agreeing to the proposed course, the Court directed the adjudicating authority to conclude the proceedings by passing speaking orders after hearing the petitioners and upon independent application of mind. The authority is required to consider all aspects including the judgment of this Court in M/s. Harihar Collections. The Court expressly withheld any opinion on merits and kept all contentions open.

Adjudicating authority to pass speaking orders of adjudication after hearing the petitioners and upon independent application of mind, considering the decision in M/s. Harihar Collections, within seven days of receipt of this order.

Final Conclusion: Writ petitions disposed of by directing the adjudicating authority to expeditiously decide the show-cause notices under section 124 of the Customs Act by passing speaking orders after hearing the petitioners and considering this Court's decision in M/s. Harihar Collections; all substantive contentions left open; no order as to costs.

Summary order. Writ petition W.P.No.15685 of 2020 dismissed as withdrawn on memo filed by petitioner; connected miscellaneous petition closed; no costs.

Maintainability of writ petition against pending adjudication - Right to be heard before adjudicating authority - Adjudicating authority's duty to decide on merits uninfluenced by prior judicial declination - Liberty to place submissions before adjudicating authority

Maintainability of writ petition against pending adjudication - Discretion to refuse writ relief where alternative remedy exists - High Court declined to entertain the writ petitions challenging show cause and demand notices issued by the Directorate of Revenue Intelligence and refused to grant relief in writ jurisdiction. - HELD THAT: - The Court heard rival submissions but exercised its discretion not to entertain the writ applications which challenge show cause notices and demand notices issued in June 2019 relating to alleged evasion of customs duty and possible confiscation. The Court recorded that it was not inclined to grant writ relief merely because the notices were issued in 2019 and adjudication is still in progress, and therefore declined to entertain the petitions while permitting the applicants to pursue their contentions before the adjudicating authority. [Paras 4, 5]

Writ petitions not entertained; petitioners' request to not press the writ was acceded to and the petitions were disposed of without adjudication on merits.

Right to be heard before adjudicating authority - Liberty to place submissions before adjudicating authority - Adjudicating authority's duty to decide on merits uninfluenced by prior judicial declination - Petitioners were granted liberty to place all submissions before the adjudicating authority, which was directed to consider them and decide in accordance with law, uninfluenced by the High Court's refusal to entertain the writ petitions. - HELD THAT: - The Court disposed of the writ applications by expressly permitting the affected parties to advance their full case before the adjudicating authority. The adjudicating authority was instructed to consider the submissions canvassed and to take an appropriate decision in law, with a clear direction that it shall not be influenced by the High Court's decision to decline entertainment of the writ petitions. The order thus leaves the substantive adjudication of the show cause notices to the statutory forum for fresh consideration and decision on merits. [Paras 5]

Liberty granted to petitioners to present submissions before the adjudicating authority; adjudicating authority to decide merits afresh without being influenced by the High Court's refusal to entertain the writs.

Final Conclusion: Writ petitions dismissed from judicial adjudication without decision on merits; petitioners permitted to place their full case before the adjudicating authority which is directed to consider and decide the show cause notices in accordance with law and unaffected by the High Court's declination to entertain the petitions.

Classification of goods under Heading 8517 - Telephone sets versus other apparatus for transmission or reception of voice, images or other data - General Rules for the Interpretation of the First Schedule (Rule 1; Rule 3(a)-(c)) - HSN Explanatory Notes as interpretative aid - Priority of specific description at single-dash level - Prohibition on supplementing administrative orders with fresh reasons (Mohinder Singh Gill principle)

Classification of goods under Heading 8517 - Priority of specific description at single-dash level - Application of Rule 1 and Rule 3 of the General Rules - Use of HSN Explanatory Notes in classification - Whether the imported Executive IP Phone (Model FON-670i) is classifiable under CTH 8517 18 10 or under CTH 8517 69 90 - HELD THAT: - The Tribunal examined the scheme of Heading 8517 and the General Rules. Heading 8517 contains three single-dash entries: (a) telephone sets (including telephones for cellular or other wireless networks), (b) other apparatus for transmission or reception of voice, images or other data, and (c) parts. Applying Rule 1 and the HSN Explanatory Notes, the Court held that the first single-dash entry takes precedence and only goods not covered by that entry fall under the second single-dash entry. The imported model FON-670i is an IP telephone with push-button operation and without video capability; its characteristics fall within the description of "telephone sets" at the first single-dash level. The Commissioner (Appeals) erred in proceeding directly to Rule 3(c) and in treating the phone as capable of video calling when the product literature and model-specific description show that the 670i lacks video functionality. Further, the Department could not be permitted to rely on a classification rationale not stated in the adjudicating order. Reliance upon HSN Explanatory Notes supports classifying non-video IP phones as telephone sets under the first single-dash entry. On these bases the Tribunal concluded that the correct classification is CTH 8517 18 10 and that the Commissioner (Appeals)'s order classifying the goods under CTH 8517 69 90 cannot be sustained. [Paras 41, 44, 45, 48, 49]

The Executive IP Phone (Model FON-670i) is classifiable under CTH 8517 18 10; the order classifying it under CTH 8517 69 90 is set aside and the appeal is allowed.

Final Conclusion: The appeal is allowed: the imported Executive IP Phone (Model FON-670i) is held to be classifiable under CTH 8517 18 10; the Commissioner (Appeals)'s order classifying the goods under CTH 8517 69 90 is set aside.

Absolute confiscation of imported goods - non-availability of BIS certification and labelling - re-export as alternative to destruction or home-consumption - authority of Commissioner (Appeals) to make further inquiry and pass appropriate orders - reduction of penalty in view of departmental initiation of re-export and appellant's compliance

Re-export as alternative to destruction or home-consumption - non-availability of BIS certification and labelling - authority of Commissioner (Appeals) to make further inquiry and pass appropriate orders - Prayer for permission to re-export imported "Access Control Card Readers" despite order of confiscation. - HELD THAT: - The Tribunal found on the record that the appellant had made a written request to re-export the goods (acknowledged by the department) and that the departmental Order in Original itself recorded that the importer had been asked whether it intended to re-export the goods. The Tribunal held that the Commissioner (Appeals), having power to make such further inquiry and pass such orders as necessary, could have and should have accepted the re-export request in the circumstances. Given that the goods could not be released for home consumption without requisite approvals and that destruction would impose a burden on the department, the appellate authority ought to have allowed re export when the appellant indicated willingness to comply. [Paras 5, 6]

Re-export permitted; appellant's prayer for re-export allowed and the appellate order modified accordingly.

Reduction of penalty in view of departmental initiation of re-export and appellant's compliance - absolute confiscation of imported goods - Whether penalties imposed in consequence of confiscation should be reduced. - HELD THAT: - The Tribunal noted that the re export option was initiated by the respondent department and accepted by the appellant, and that permitting re export would mitigate the loss otherwise occasioned. In these circumstances the Tribunal exercised its discretion to reduce the penalties to the barest minimum as a proportionate response, observing that re export itself would impose financial consequences on the appellant serving as deterrence. [Paras 5, 6]

Penalties reduced and quantified by the Tribunal as a mitigated measure in view of allowed re export.

Final Conclusion: Appeal allowed in part; order of Commissioner (Appeals) modified to permit re export of the imported goods and to reduce the penalties to mitigated amounts as directed by the Tribunal.

Winding up by Tribunal - Special resolution under Section 272 - Appointment of Company Liquidator from Insolvency Professionals - Conflict of interest and independence of Insolvency Professional - Duties and timeline of Company Liquidator in winding up - Prohibition on institution of suits after winding up without leave

Winding up by Tribunal - Special resolution under Section 272 - Winding up of HMT Bearings Limited was ordered by the Tribunal pursuant to the company's special resolution and governmental decisions. - HELD THAT: - The Tribunal examined the petition filed under Sections 271-273 of the Companies Act, 2013, the Special Resolution passed at the Extraordinary General Meeting on 11.02.2020 authorising winding up, and the directions of the Cabinet Committee on Economic Affairs and the Ministry of Heavy Industries. Having regard to the bonafide action taken pursuant to the Central Government decision, the Tribunal concluded that the case is fit for winding up and allowed the company petition, ordering winding up of the company. [Paras 8, 9]

Company Petition CP No. 223/272/HDB/2020 is allowed and HMT Bearings Limited is ordered to be wound up by the Tribunal.

Conflict of interest and independence of Insolvency Professional - Appointment of Company Liquidator from Insolvency Professionals - The person who filed the petition and previously acted as advocate for the company could not be appointed as Company Liquidator due to apprehended conflict of interest; an independent Insolvency Professional was appointed instead. - HELD THAT: - The petitioner nominated Dr. K. Lakshmi Narasimha (an Advocate and Insolvency Professional) to act as provisional/liquidator. The Tribunal held that an individual who has rendered professional services for the company in another capacity cannot be appointed as Company Liquidator because of conflict of interest and lack of independence. The Tribunal relied on the principle reflected in the IBBI discussion paper prohibiting an IP who has rendered professional services in another capacity from acting as liquidator in the same process. Consequently, the Tribunal declined to appoint the petitioner and appointed an independent registered Insolvency Professional as Company Liquidator. [Paras 6, 7, 9]

The petitioner-nominated Advocate/IP is not appointed as Company Liquidator; Shri Sai Ramesh Kanuparthi, a registered Insolvency Professional, is appointed as Company Liquidator.

Duties and timeline of Company Liquidator in winding up - Prohibition on institution of suits after winding up without leave - The Tribunal specified duties, timelines and procedural directions for the appointed Company Liquidator, and restrained suits against the company without leave of the Tribunal. - HELD THAT: - The Tribunal directed the appointed Company Liquidator to complete the liquidation process within six months, to perform functions as provided in Chapter XX of the Companies Act, to apply for constitution of a Winding up Committee within three weeks, to obtain books and audited financial statements from directors within 30 days, to submit monthly reports and minutes, and to file the final report for dissolution when affairs are completely wound up. The Tribunal fixed the fee for the provisional liquidator and directed the Registrar of Companies to update records and notify the order in the official gazette. Further, the Tribunal ordered that no suit or other legal proceedings shall be instituted by or against the company except with leave of the Tribunal. [Paras 9]

The Company Liquidator is to carry out prescribed winding up functions within the stipulated timeline, comply with reporting and committee-constitution directions, seek dissolution when appropriate, and suits against the company are barred without leave of the Tribunal.

Registrar of Companies' observations and compliance by Liquidator - Registrar of Companies' observations regarding shareholders' intimation and financial entries are to be addressed through compliance by the Company Liquidator. - HELD THAT: - The RoC Hyderabad reported issues including whether minority and foreign shareholders had been intimated and sought clarification on the statement of affairs and alleged waiver of Government loans. The Tribunal directed that the Company Liquidator file compliance addressing the RoC's observations and noted that the petitioner had filed an auditor's certificate and supporting documents regarding the Government of India loan waiver. The Tribunal therefore required the Liquidator to ensure compliance with the RoC's comments and to update the Registrar as part of the winding up process. [Paras 3, 5, 9]

RoC observations are to be complied with and addressed by the Company Liquidator, and the Registrar of Companies is to be notified and update master data and publish the gazette notification.

Final Conclusion: The Tribunal allowed the company petition and ordered winding up of HMT Bearings Limited, declined appointment of the petitioner-nominated Advocate/IP due to conflict of interest, appointed an independent registered Insolvency Professional as Company Liquidator, and issued directions regarding the liquidator's duties, timeline, reporting, compliance with Registrar of Companies observations and a bar on suits without the Tribunal's leave.

Restoration of company name - striking off by Registrar of Companies - exercise of power under Section 252(3) of the Companies Act, 2013 - duty of Registrar under Section 248(6) to ensure provision for payment of liabilities - leniency in the interest of justice and ease of doing business

Restoration of company name - exercise of power under Section 252(3) of the Companies Act, 2013 - striking off by Registrar of Companies - leniency in the interest of justice and ease of doing business - Application under Section 252(3) for restoration of the Company's name struck off by the Registrar of Companies. - HELD THAT: - The Tribunal held that although the striking off was effected in accordance with the statutory power of the Registrar where a company has not been carrying on business or failed to make required filings, the petition for restoration merits allowance on the facts of the case. The petitioner's non filing of financial statements and annual returns was found to be inadvertent and not mala fide; there were no pending investigations or complaints against the company; and the Registrar did not oppose restoration, subject to terms. The Tribunal applied a purposive and lenient approach in the interest of justice and ease of doing business, while noting the Registrar's statutory duty under Section 248(6) to ensure provision for satisfying liabilities before striking off. Restoration was permitted but made conditional to protect third party interests and to ensure compliance: filing of outstanding statutory documents with prescribed fees/additional fees/fines within the time directed; payment of the specified cost; personal supervision by the company's representative of compliance; publication by the ROC after delivery of certified copy; restoration to operate as if name had not been struck off, including reactivation of DINs; and an express saving that the order does not preclude the ROC from taking action for any other violations or offences. The Tribunal therefore balanced the legality of the strike off with equitable considerations in granting restoration subject to safeguards and compliance directions. [Paras 6, 7, 9]

The petition under Section 252(3) is allowed: the ROC is directed to restore the Company's name as if it had not been struck off, with restoration of consequential actions including DINs, subject to the specified filing, payment, compliance and publication conditions, and without prejudice to ROC taking action for other violations.

Final Conclusion: The Tribunal allowed the application for restoration of M/s. Bofian Softwares Private Limited under Section 252(3) of the Companies Act, 2013, directing the ROC to restore the name and consequential matters, subject to specified compliance, payment and publication conditions, while preserving the ROC's power to take action for any other violations.

Scheme of Arrangement and Amalgamation - Convening of meetings under Sections 230-232 of the Companies Act, 2013 - Publication of notice of hearing in newspapers - Service of notice on Central Government, Registrar of Companies, Official Liquidator, Income Tax Department and Sectoral Regulatory Authorities - Service of notice to objectors under sub-section (4) of Section 230 - Affidavit of service of notices and publication - Objections by notified authorities and consequence of non-filing - Compliance with proviso to sub-section (3) of Section 232 / proviso to sub-section (7) of Section 230 by filing statutory auditor's certificate - Fixing date of hearing for consideration and sanction of the Scheme

Publication of notice of hearing in newspapers - Directions for publication of notice of the hearing of the Petition and the timing for such publication. - HELD THAT: - The Tribunal directed that notice of the hearing shall be advertised in the English daily "The Statesman" (Delhi edition) and the vernacular Hindi daily "Veer Arjun" (Delhi edition) not less than 10 days before the date fixed for hearing. This order prescribes the newspapers to be used and the minimum period for publication to ensure public notice of the proposed Scheme prior to hearing. [Paras 3]

Notice of hearing to be published in the specified newspapers not less than 10 days before the hearing.

Service of notice on Central Government, Registrar of Companies, Official Liquidator, Income Tax Department and Sectoral Regulatory Authorities - Requirement and timeline for service of notices on specified governmental and regulatory authorities including particulars to be provided. - HELD THAT: - The Tribunal ordered that, in addition to the public notice, each Applicant shall serve the petition notice on the Central Government through the Regional Director (Northern Region), Registrar of Companies (NCT of Delhi & Haryana), Official Liquidator, the Income Tax Department (through the specified Income Tax Cell), and such other sectoral regulatory authorities governing the respective companies. Service must be effected at least 30 days before the fixed hearing date and must include full details of assessing officer and PAN numbers of the applicant companies, so that statutory and regulatory authorities have adequate time and information to consider the Scheme. [Paras 3]

Notices to be served on the listed authorities and sectoral regulators at least 30 days before the hearing with requisite details.

Service of notice to objectors under sub-section (4) of Section 230 - Service of notice on objectors who have made representations and desire to be heard, and the timeline for such service. - HELD THAT: - The Tribunal directed that any objector or their representative who has made a representation and wishes to be heard shall be served with a copy of the petition and its annexures at least 15 days before the date fixed for hearing. This ensures that objectors receive the materials in sufficient time to prepare for any hearing on their representations. [Paras 3]

Objectors who have sought to be heard to be served with petition and annexures at least 15 days before hearing.

Affidavit of service of notices and publication - Requirement and timing for filing affidavits evidencing service and publication. - HELD THAT: - The Tribunal mandated that all Petitioners shall file, at least seven days before the hearing, an affidavit of service showing publication in newspapers and service upon the specified authorities and any objectors. This procedural step is required to demonstrate compliance with the notice and service directions prior to consideration of the Scheme. [Paras 3]

Petitioners to file affidavit of service and publication at least 7 days before the hearing.

Objections by notified authorities and consequence of non-filing - Procedure for filing objections by notified authorities and the consequence if no objection is filed by the hearing date. - HELD THAT: - The Tribunal provided that objections to the Scheme by the authorities served may be filed on or before the hearing date. If no objection is filed by that date, it will be deemed that the respective authority has no objection to the approval of the Scheme, subject to other statutory conditions under the Companies Act, 2013 and the relevant rules. This clarifies the procedural consequence of non-filing by notified authorities. [Paras 3]

Authorities may file objections by the hearing date; failure to do so will be treated as no objection, subject to statutory conditions.

Compliance with proviso to sub-section (3) of Section 232 / proviso to sub-section (7) of Section 230 by filing statutory auditor's certificate - Obligation of Petitioners to comply with the proviso to sub-section (3) of Section 232 or proviso to sub-section (7) of Section 230, as applicable, by filing statutory auditors' certificate before the hearing. - HELD THAT: - The Tribunal directed that each Petitioner Company shall comply with the applicable proviso-either to sub-section (3) of Section 232 or to sub-section (7) of Section 230-by filing the certificate of the statutory auditors on or before the hearing date. This requirement ensures that the financial and accounting aspects required by the provisos are certified prior to sanction of the Scheme. [Paras 3]

Petitioners must file the statutory auditors' certificate, complying with the applicable proviso, on or before the hearing date.

Fixing date of hearing for consideration and sanction of the Scheme - Fixing of the next date of hearing for consideration of the approval of the Scheme. - HELD THAT: - Having recorded that the meetings of equity shareholders and unsecured creditors were convened and the Scheme was unanimously approved in those meetings, the Tribunal fixed the next date for hearing to consider approval of the Scheme. The order consolidates the procedural steps required to be completed before that date. [Paras 2, 3]

Hearing for consideration of approval of the Scheme fixed for the date stated in the order.

Final Conclusion: The Tribunal admitted the Company Petition for hearing, directed publication and service of notices upon specified newspapers, governmental and sectoral authorities and objectors with fixed timelines, required filing of affidavits of service and statutory auditors' certificates as applicable, and listed the matter for consideration of approval of the Scheme on the specified date.

Restoration of name in register of companies under Section 252(3) of the Companies Act, 2013 - striking off for default in filing under Section 248(1) of the Companies Act, 2013 - company as a going concern - filing of pending financial statements and annual returns - publication in the Official Gazette upon restoration - costs for restoration and Gazette publication - Form INC-28 compliance

Restoration of name in register of companies under Section 252(3) of the Companies Act, 2013 - striking off for default in filing under Section 248(1) of the Companies Act, 2013 - company as a going concern - The application for restoration of the company's name struck off from the Register of Companies was allowed. - HELD THAT: - The Tribunal examined the pleadings and documentary material filed by the applicant and was satisfied by the reasons and evidence that the company is a going concern. Although the Registrar of Companies initiated strike off proceedings under the statutory scheme for default in filing annual returns and financial statements, the Tribunal found that refusal to restore would be an excessive penalty for the oversight pleaded by the company. On the material placed, the Tribunal concluded that restoration was just and proper and ordered restoration of the company's name in the Register of Companies. [Paras 1]

Restoration of the 2nd Respondent's name in the Register of Companies was ordered.

Filing of pending financial statements and annual returns - Form INC-28 compliance - The applicant was required to file all pending financial statements and annual returns and to file Form INC-28 as procedure for restoration. - HELD THAT: - As a condition of restoration the Tribunal directed the applicant to file all outstanding financial statements and annual returns in accordance with the Companies Act and rules thereunder. The Tribunal additionally directed compliance with the procedural requirement of filing Form INC-28, thereby conditioning restoration on completion of statutory filings and future compliance. [Paras 2]

The applicant must file the pending financial statements, annual returns and Form INC-28 as directed.

Publication in the Official Gazette upon restoration - costs for restoration and Gazette publication - The applicant was directed to pay the costs for publication and related expenses to the Registrar of Companies as a condition of restoration. - HELD THAT: - Recognising administrative expenses attendant on restoration and Gazette publication, the Tribunal imposed a cost to be paid to the Registrar of Companies on submission of the documents. This payment was ordered to meet the expenses of publication in the Official Gazette and other related costs, and the Tribunal required the applicant to place the restoration order before the ROC within a specified time. [Paras 3, 4]

The applicant to pay the costs for publication and related expenses and to place the order with the ROC within the prescribed time.

Final Conclusion: The Tribunal allowed the application for restoration, directed the company to file all pending statutory filings and Form INC-28, required payment of costs for Gazette publication and related expenses to the Registrar of Companies, and directed the ROC to restore the company's name in the Register of Companies subject to these conditions.

Article 227 of the Constitution of India - discretionary powers of the High Court under Article 227 - appealability of order appointing liquidator and directing liquidation - limitation period for filing appeal under Section 61(2) of the Insolvency and Bankruptcy Code, 2016 - non-application of Section 5 of the Limitation Act in the present writ proceedings

Article 227 of the Constitution of India - discretionary powers of the High Court under Article 227 - limitation period for filing appeal under Section 61(2) of the Insolvency and Bankruptcy Code, 2016 - appealability of order appointing liquidator and directing liquidation - Whether the High Court should exercise its jurisdiction under Article 227 to entertain challenge to the order appointing a liquidator where the statutory period for filing an appeal under Section 61(2) IBC has lapsed. - HELD THAT: - The Court noted that the order of 15.10.2020 appointing a liquidator and directing liquidation was an appealable order but the statutory time-limit under Section 61(2) read with its proviso had expired and no appeal was filed within the prescribed or extendable period. It reiterated that the High Court's powers under Article 227 are discretionary and must be sparingly exercised and not used as an appellate remedy in disguise. Given that a specific and strict limitation period applied and the petitioner permitted that period to lapse, the High Court declined to exercise its writ jurisdiction to permit a challenge to the order. [Paras 9, 10, 11, 12]

Writ petition dismissed; High Court will not exercise its discretionary jurisdiction under Article 227 to entertain the challenge where the statutory appeal period under Section 61(2) has lapsed.

Non-application of Section 5 of the Limitation Act in the present writ proceedings - limitation period for filing appeal under Section 61(2) of the Insolvency and Bankruptcy Code, 2016 - Whether Section 5 of the Limitation Act is directly applicable to extend the period for filing the present writ petition in the High Court. - HELD THAT: - The Court observed that Section 238A (by amendment) and arguments regarding Section 5 of the Limitation Act were raised, but held that the question of applicability of Section 5 did not arise for decision in these proceedings. The Court indicated that the issue of whether Section 5 may apply would arise only if the petitioner seeks to file an appeal before the Appellate Tribunal, and it would be for that Tribunal to consider the applicability of Section 5 in the appeal proceedings. [Paras 7, 13]

The question of applicability of Section 5 of the Limitation Act is not decided in this petition and is left open for determination by the Appellate Tribunal if an appeal is filed.

Final Conclusion: The High Court dismissed the petition under Article 227, declining to exercise discretionary writ jurisdiction to challenge the order of liquidation because the statutory appeal period under Section 61(2) IBC had lapsed; the question of the applicability of Section 5 of the Limitation Act was not decided and is left to the Appellate Tribunal if an appeal is filed.

Privity of contract - maintainability of writ petition under Article 226 for contractual monetary claims - direct payment by employer at contractor's request not creating employer's liability for balance dues - remedies under statutory and common law for recovery of contractual dues - insolvency of contractor and moratorium under the Insolvency and Bankruptcy Code

Privity of contract - maintainability of writ petition under Article 226 for contractual monetary claims - Writ petitions claiming payment from DMRC for contractual work and supplies entered into by the petitioners with a joint venture partner are not maintainable in public law where there is no privity of contract between the petitioners and DMRC. - HELD THAT: - The Court found that the contracts for work and supply were between the petitioners and Era Infrastructure Engineering Ltd. (a partner in the Era Ranken JV) and that DMRC did not have contractual obligations to the petitioners. Relying on settled precedent, the Court reiterated that a contractual remedy for alleged breach or non payment is not to be pursued by invoking constitutional writ jurisdiction under Article 226. The absence of privity, in the absence of a cleared bill and an accepted request for direct payment by the contractor, precludes making the employer (DMRC) liable for the contractor's default. The Court therefore declined to entertain the petitioners' monetary claims in writ jurisdiction and directed them to pursue available statutory and common law remedies. [Paras 7, 9]

Petitioners' writ petitions seeking payment from DMRC dismissed for want of privity and for being non maintainable in writ jurisdiction; petitioners to pursue contractual remedies.

Direct payment by employer at contractor's request not creating employer's liability for balance dues - insolvency of contractor and moratorium under the Insolvency and Bankruptcy Code - remedies under statutory and common law for recovery of contractual dues - Previous instances of direct payment by DMRC at the request of the joint venture partner do not establish a continuing liability of DMRC to make remaining payments; insolvency proceedings against the contractor do not convert DMRC into the debtor for those dues in writ proceedings. - HELD THAT: - The Court observed that occasional direct payments by DMRC, made at the request of Era Ranken JV, do not suffice to convert DMRC into the contracting party liable for all outstanding dues. The contractual terms impose payment obligations on the contractor (EIEL), and unless a request for direct payment is made by the contractor and accepted by DMRC in accordance with the contract, DMRC cannot be held liable for defaults of its contractor. Although EIEL was under corporate insolvency proceedings and a moratorium was in place, the Court did not treat insolvency as creating a basis for entertaining the petitioners' writ claims against DMRC; instead, the petitioners must seek recovery through appropriate statutory or common law processes. [Paras 3, 4, 7]

Instances of direct payment do not establish DMRC's liability for unpaid contractual dues; insolvency of the contractor does not make DMRC liable in writ jurisdiction and claimants must pursue other remedies.

Final Conclusion: Writ petitions seeking payment from DMRC dismissed: no privity of contract between petitioners and DMRC, prior direct payments do not impose liability on DMRC for remaining dues, and petitioners are directed to pursue their statutory and common law remedies; no order as to costs.

Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 - limitation - date of default / NPA as date of default - acknowledgement of debt and settlement / OTS proposals as admission of liability - raising limitation first time on appeal

Limitation - date of default / NPA as date of default - application under Section 7 of the Insolvency and Bankruptcy Code, 2016 - Application under Section 7 was not barred by limitation and the admission/order of the Adjudicating Authority admitting the Section 7 application was sustainable. - HELD THAT: - The Tribunal noted that the Section 7 petition filed by the Financial Creditor recorded the date of default/NPA as 30.06.2015 (with NPA noted as 31.03.2015 in the record) and claimed dues up to 28.08.2018. The Appellant did not raise any question of limitation before the Adjudicating Authority and first raised the limitation contention before this Appellate Tribunal. More importantly, the record contains multiple communications from the Corporate Debtor proposing one-time settlements and acknowledging payments and indebtedness (letters dated 01.04.2017, 21.11.2017, 04.01.2018, 09.07.2018 and 14.09.2020 and evidence of payments). The Tribunal treated those communications and conduct as admissions/acknowledgements of debt and settlement offers which negatived the contention that the Section 7 petition was time-barred. The Tribunal further held that the Appellant's conduct was not covered by the Supreme Court decision relied upon by the Appellant and concluded that there was no illegality in the Adjudicating Authority's admission of the Section 7 application. [Paras 19, 20]

Impugned order admitting the Section 7 application is affirmed and the appeal is dismissed.

Final Conclusion: The Appellate Tribunal found no merit in the appeal against the Adjudicating Authority's order admitting the Section 7 application: limitation was not raised below, the Corporate Debtor's repeated OTS proposals and admissions of indebtedness defeated the time bar argument, and the impugned order is affirmed; appeal dismissed.

Principles of Natural Justice - audi alteram partem - ex parte interim order - right to opportunity of hearing - remit for de novo consideration - powers under section 241 of the Companies Act

Principles of Natural Justice - audi alteram partem - ex parte interim order - The impugned ex parte ad interim order dated 05.10.2020 was in negation of the principles of natural justice and was liable to be set aside. - HELD THAT: - The Tribunal examined the quality of the impugned order and found it to be an ex parte ad interim order which restrained respondents from selling properties and changed corporate affairs without having afforded the affected parties a reasonable opportunity of being heard. The judgment reiterates the fundamental requirement that no one ought to be condemned unheard and that an order with adverse civil consequences must be preceded by a just and proper opportunity of hearing; absence of such opportunity renders the order susceptible to challenge. On the facts and in view of the impugned order being passed in the absence of effective participation by the appellants, the Appellate Tribunal concluded that the order negated the principles of natural justice and therefore must be set aside. [Paras 62, 63, 64, 68, 69]

Impugned order dated 05.10.2020 set aside for violation of natural justice.

Remit for de novo consideration - right to opportunity of hearing - powers under section 241 of the Companies Act - The matter was remitted to the National Company Law Tribunal, New Delhi, Court No. II, for fresh, de novo consideration on merits after providing due opportunity of hearing. - HELD THAT: - Recognising that the Tribunal under section 241 has wide and equitable powers to grant interim relief in cases of alleged oppression and mismanagement, the Appellate Tribunal nonetheless declined to express any opinion on the merits. Instead, to prevent miscarriage of justice resulting from the ex parte ad interim order, the Appellate Tribunal directed the NCLT to hear the entire petition afresh in an objective and dispassionate manner, taking into account all replies, responses and affidavits and allowing all parties to raise factual and legal pleas and offers, including any undertakings previously tendered. [Paras 55, 56, 69]

Matter remitted to the NCLT for de novo consideration with liberty to parties to be heard and to raise all contentions.

Registry diligence - right to opportunity of hearing - A latent and patent error was found in the appearance column of the impugned order; the Registry was admonished to exercise diligence and to furnish requisite hearing information in advance. - HELD THAT: - The Appellate Tribunal observed that the names of certain appellants had been wrongly recorded as advocates in the appearance column of the impugned order. While not delving further into the factual contest about attendance, the Tribunal treated the mis entry as an inadvertent error and emphasised that utmost diligence, care and circumspection are required by Tribunal officers when noting appearances. The Registry was directed to ensure parties receive requisite information well in advance to enable preparation for hearings. [Paras 51, 52, 53]

Noted inadvertent error in appearance; Registry admonished to exercise greater diligence and to furnish timely information to parties.

Final Conclusion: The appeal is allowed; the ex parte interim order dated 05.10.2020 is set aside and the matter is remitted to the National Company Law Tribunal, New Delhi, Court No. II for fresh adjudication on merits after affording all parties a fair opportunity of hearing; liberty is granted to parties to raise all factual and legal pleas. No costs.

Liquidation proceedings - directions restraining departure / co-operation of former director - expunction of adverse observations - infructuous appeal

Directions restraining departure / co-operation of former director - liquidation proceedings - Whether any directions against the respondent (former Managing Director) were necessary in the liquidation proceedings - HELD THAT: - The Appellate Tribunal recorded the parties' positions that the respondent had been cooperating with the liquidator and continued to do so, and that the respondent had filed a memo denying intention to leave the country and denying the allegations. In view of the respondent's continued cooperation and the memo placed on record, the Tribunal concluded that no directions against the respondent were required to be issued by the Adjudicating Authority. The appeal was therefore treated as lacking a live controversy in respect of directions sought against the respondent and no interference with the impugned order was called for on this ground. [Paras 7]

No directions against the respondent were necessary; appeal on that relief is dismissed as infructuous.

Expunction of adverse observations - liquidation proceedings - Whether adverse observations made by the Adjudicating Authority about the liquidator's progress should be expunged - HELD THAT: - The Tribunal declined to expunge the Adjudicating Authority's observations that the liquidator had not made substantial progress. It held that those remarks were made in the context of examining the dispute before the Adjudicating Authority and should not be treated as adverse findings warranting expunction. However, the Tribunal granted the liquidator liberty to place a detailed report before the Adjudicating Authority to dispel any impression regarding the progress of liquidation proceedings. [Paras 3, 8]

Observations of the Adjudicating Authority will not be expunged; liquidator may place a detailed report before the Adjudicating Authority to clarify progress.

Final Conclusion: The appeal is disposed of without interference: no directions against the respondent are necessary and the Adjudicating Authority's observations are to stand (not expunged), subject to the liquidator being permitted to file a detailed progress report before the Adjudicating Authority.

Principles of Natural Justice - Authority of agent under a general Power of Attorney - Limitation under Article 137 of the Limitation Act, 1963 - Effect of acknowledgement and payment on limitation (Sections 18 and 19 of the Limitation Act, 1963) - Applicability of the Limitation Act to proceedings under the Insolvency and Bankruptcy Code (section 238 A and its consequences)

Principles of Natural Justice - Whether the Adjudicating Authority violated principles of natural justice by not permitting the appellants' counsel to address the hearing and by recording non appearance - HELD THAT: - The Tribunal examined the order sheet and the record and found no material to show that an application was made before the Adjudicating Authority on the hearing date asserting denial of opportunity to argue. The Adjudicating Authority's order recorded that the petitioner was represented and that none appeared for the respondent despite repeated calls; the Bank also stated that ample opportunities were given and the corporate debtor avoided appearance. The Appellants did not produce contemporaneous steps taken before the Adjudicating Authority to challenge the recorded non appearance. The Tribunal accepted the Adjudicating Authority's contemporaneous recording and observed that signatures or initial markings on the order sheet could be misleading and that the Adjudicating Authority may disregard such marks where it records non appearance at the hearing. Having considered that the Adjudicating Authority addressed the objections raised in the reply and that no prejudice has been shown, the Tribunal held that no breach of principles of natural justice occurred. [Paras 10]

Allegation of violation of principles of natural justice rejected; no prejudice shown.

Authority of agent under a general Power of Attorney - Whether the person who signed and filed the Section 7 application on behalf of the Bank was unauthorized because the Power of Attorney predated the IBC - HELD THAT: - The record showed that the Section 7 application was signed by the Chief Manager of the Bank pursuant to a General Power of Attorney. Clause 12 of that instrument conferred broad powers to commence, prosecute and defend legal proceedings and to compromise, without confinement to a particular statute. The Tribunal found that a general power conferring authority to act in legal proceedings is not rendered ineffective merely because it was executed before the IBC came into force. The Adjudicating Authority considered the objection and found no substance in it; the Tribunal saw no defect in the application on the ground that the Power of Attorney predated the Code. [Paras 11]

Application held validly filed by an authorized signatory; challenge to the Power of Attorney rejected.

Limitation under Article 137 of the Limitation Act, 1963 - Effect of acknowledgement and payment on limitation (Sections 18 and 19 of the Limitation Act, 1963) - Applicability of the Limitation Act to proceedings under the Insolvency and Bankruptcy Code (section 238 A and its consequences) - Whether the Section 7 application was barred by limitation where the account was declared NPA on 30.09.2014 and the petition was filed in 2019 - HELD THAT: - The Tribunal applied the well settled proposition that Article 137 of the Limitation Act governs Section 7 applications and that the right to apply accrues on default (date of NPA). However, Sections 18 and 19 of the Limitation Act operate to compute a fresh period where there is an acknowledgement in writing or payment on account of the debt before expiry of the prescribed period. The Adjudicating Authority had recorded on the basis of the material filed that the corporate debtor had issued a simple debit balance confirmation dated 07.04.2016, account statements showed regular credit entries after that date up to May 2018, and the corporate debtor itself in its reply admitted repayments and set out amounts paid (including deposits under a 'cut back' arrangement and other instalments). The Tribunal held that these documents and admissions in the record were sufficient to attract Sections 18/19 so as to revive or extend the limitation period, and that the Adjudicating Authority did not err in holding the application to be within limitation. The Tribunal also rejected the submission that 'cut back' deductions could not be treated as payments by the corporate debtor where they were made with the debtor's approval and thus constituted payments on account of debt. [Paras 24, 25, 26, 27]

Application under Section 7 held to be within limitation on the basis of acknowledgements and payments; the Adjudicating Authority's finding upheld.

Final Conclusion: The appeal is dismissed. The Tribunal found no breach of natural justice, upheld the authority of the Bank's signatory under the General Power of Attorney, and agreed with the Adjudicating Authority that the Section 7 petition was within limitation in view of acknowledgements and payments attracting Sections 18 and 19 of the Limitation Act.

Power under Section 60(5) of Insolvency and Bankruptcy Code, 2016 to extend time for statutory compliances - condonation of delay in filing SEBI (Listing Obligations and Disclosure Requirements) compliances - compliance with Regulation 24A of SEBI (LODR) Regulations, 2015 - effect of COVID-19 pandemic on statutory timelines and regulatory forbearance

Power under Section 60(5) of Insolvency and Bankruptcy Code, 2016 to extend time for statutory compliances - condonation of delay in filing SEBI (Listing Obligations and Disclosure Requirements) compliances - compliance with Regulation 24A of SEBI (LODR) Regulations, 2015 - effect of COVID-19 pandemic on statutory timelines and regulatory forbearance - Extension of time to file audited financial results and to comply with Regulation 24A and other applicable SEBI (LODR) Regulations was permissible and should be granted to the Resolution Professional/Applicant. - HELD THAT: - The Tribunal examined the application filed by the Resolution Professional seeking condonation of time for filing audited standalone and consolidated financial results for the year ended 31.03.2020 and for compliance with Regulation 24A and other applicable provisions of SEBI (LODR) Regulations on account of disruption caused by the COVID-19 pandemic and the pendency of a liquidation application. The Resolution Professional had made efforts to obtain regulatory relief by sending requests to SEBI and IBBI and explained difficulties caused by lockdown, lack of staff and that the corporate debtor was under CIRP when timelines fell due. The Tribunal noted the subsequent liquidation order and, having considered the submissions, the pandemic-related disruption, and the attempts made to obtain extension from regulators, exercised its jurisdiction under Section 60(5) of the IBC to grant additional time for statutory compliances. The Tribunal therefore allowed the application and extended the filing and compliance deadlines to 31.03.2021. [Paras 7, 8]

Application allowed; time extended till 31.03.2021 for filing audited financial results for year ended 31.03.2020 and for compliance with Regulation 24A and other applicable SEBI (LODR) Regulations.

Final Conclusion: The Tribunal, exercising powers under Section 60(5) IBC, 2016, granted the Resolution Professional an extension until 31.03.2021 to file the audited standalone and consolidated financial results for 31.03.2020 and to comply with Regulation 24A and other applicable SEBI (LODR) Regulations, having regard to COVID-19 related disruption and the efforts made to seek regulatory relief.

Exclusion of lockdown period from CIRP timeline - maximum CIRP period of 330 days - extension of CIRP period - Regulation 40C of the IBBI (Special provision relating to timeline) - effect of COVID-19 lockdown on completion of CIRP

Exclusion of lockdown period from CIRP timeline - Regulation 40C of the IBBI (Special provision relating to timeline) - effect of COVID-19 lockdown on completion of CIRP - Exclusion of the period affected by COVID-19 lockdown from computation of the maximum CIRP period of 330 days and consequential adjustment of the CIRP timeline. - HELD THAT: - The Resolution Professional sought exclusion of the lockdown period from 25.03.2020 to 31.07.2020 from the 330-day CIRP timeline, relying on the special provision in Regulation 40C which directs that the period of lockdown shall not be counted for activities that could not be completed due to such lockdown. The Tribunal examined the chronology of the CIRP, extensions earlier granted, and the requests by prospective resolution applicants for additional time owing to difficulties caused by the pandemic. While the applicant sought exclusion of the entire period up to 31.07.2020, the Tribunal identified that the days actually lost to lockdown for completion of the process until the then-extended date amounted to 62 days (25.03.2020 to 25.05.2020). The Tribunal accordingly treated those lost days as excluded and directed that those days be added after 01.08.2020, resulting in the adjusted timeline for completion of the CIRP (effectively extending the completion date to 01.10.2020 for the remaining 270 days). The application for exclusion was thus disposed of by granting the temporal adjustment consistent with Regulation 40C and the factual inability to complete the process during the lockdown period.

Application allowed in part; lockdown days lost (25.03.2020 to 25.05.2020) excluded from CIRP computation and added after 01.08.2020, adjusting the CIRP completion date to 01.10.2020.

Final Conclusion: The Tribunal allowed the interlocutory application by excluding the days lost due to COVID-19 lockdown from the CIRP timeline under Regulation 40C and adjusted the completion schedule accordingly, resulting in the CIRP being extended to 01.10.2020 for completion of the remaining period.

Voluntary liquidation under Section 59 - Declaration of solvency - Compliance with IBBI (Voluntary Liquidation Process) Regulations, 2017 - Public announcement and claims process - No-objection from tax authority - Dissolution of company

Voluntary liquidation under Section 59 - Declaration of solvency - Compliance with IBBI (Voluntary Liquidation Process) Regulations, 2017 - Public announcement and claims process - No-objection from tax authority - Whether the Liquidator complied with the requirements of Section 59 of the Insolvency and Bankruptcy Code, 2016 read with the IBBI (Voluntary Liquidation Process) Regulations, 2017, enabling the Tribunal to order dissolution. - HELD THAT: - The Tribunal examined the records showing that the board had resolved to initiate voluntary liquidation, the directors furnished declarations of solvency as contemplated under Section 59(3)(a), and members approved the special resolution in the extraordinary general meeting with filing of MGT-14. The Liquidator made the statutory public announcement in Form A and invited claims, opened a liquidation bank account for realisation and distribution, submitted the preliminary and final reports, conducted annual contributories meetings, and filed the final report with RoC and IBBI. The Income Tax Officer conveyed a no-objection. The Liquidator also reported that no creditor claims were received and that assets had been distributed to members as reflected in the final report. On the basis of these findings, the Tribunal concluded that the procedures and statutory conditions for voluntary liquidation under Section 59 and the relevant IBBI regulations were satisfied. [Paras 5, 6, 7, 8, 9]

The Liquidator complied with the statutory requirements, and the petition under Section 59(7) is maintainable and well-founded.

Dissolution of company - Whether the Company should be dissolved and the date and directions for recording the dissolution. - HELD THAT: - Having found that liquidation was carried out in accordance with the Code and Regulations and that the assets were realised and distributed with no outstanding creditor claims reported and with tax no-objection, the Tribunal exercised its power under Section 59(7) to dissolve the company. The Tribunal directed that the order be forwarded to the registrar where the company is registered and that RoC, Hyderabad and IBBI be informed for appropriate marking on the MCA website. [Paras 10]

The Company stands dissolved with effect from 10.09.2020 and the Registry is directed to forward the order to the concerned registrar, RoC, Hyderabad and IBBI for appropriate entries.

Final Conclusion: The Tribunal held that the voluntary liquidation process complied with Section 59 and the IBBI regulations, allowed the petition under Section 59(7), and ordered dissolution of M/s. Alexandria Services (India) Private Limited effective 10.09.2020 with directions to notify the Registrar, RoC, Hyderabad and IBBI.

Summary order. Tax Appeal under Section 130 of the Customs Act, 1962 admitted on specified substantial questions of law; notice issued to the respondent returnable on 19th January 2021; interim direction that no coercive recovery action shall be taken against the appellant till the next date of hearing.

Condonation of delay - principles of natural justice - restoration of appeal - limitation for filing appeal under the Central Excise Act, 1944 - jurisdiction to entertain appeal beyond the proscribed period

Condonation of delay - principles of natural justice - restoration of appeal - jurisdiction to entertain appeal beyond the proscribed period - Validity of the impugned order disposing the appeal as time-barred without hearing the petitioner and the appropriate remedy. - HELD THAT: - The Court found that the appeal was rejected solely on the ground that it was beyond the prescribed and condonable period without affording the petitioner an opportunity to explain the delay. The petitioner explained that a belief in filing a declaration under the Sabka Vishwas Scheme 2019, and failure of employees to file it, caused the delay. The respondents accepted that if the appeal was decided without hearing, restoration and reconsideration with an opportunity to the petitioner would be appropriate. In these circumstances the impugned order was quashed and the appeal restored so that the petitioner may file, or rely on any already filed, an application for condonation of delay and be heard. The first respondent is directed to consider any application for condonation strictly in accordance with the provisions of the Central Excise Act, 1944 and the applicable legal principles concerning jurisdiction to entertain appeals beyond the proscribed period.

The impugned order dated 8.7.2020 is quashed; Appeal No.338/2020 is restored for reconsideration with liberty to the petitioner to apply for condonation of delay and to be heard, and the first respondent to decide the application in accordance with law.

Final Conclusion: The petition is allowed: the appellate order rejecting the appeal as time barred without hearing is quashed and the appeal is restored for fresh consideration; the petitioner may file (or rely on any filed) application for condonation of delay and shall be afforded an opportunity to be heard, and the first respondent shall decide the matter in accordance with the Central Excise Act, 1944 and applicable authorities.

Computation of excess CENVAT credit by reverse calculation from ER-1 returns - Admissibility of CENVAT credit in absence of corroborative evidence - Extended period of limitation under Section 11A for fraud, collusion, willful mis-statement or suppression of facts - Requirement of invoice-based verification under CENVAT Credit Rules - Use of audit-objection alone as basis for demand

Computation of excess CENVAT credit by reverse calculation from ER-1 returns - Requirement of invoice-based verification under CENVAT Credit Rules - Admissibility of CENVAT credit in absence of corroborative evidence - Whether the demand for alleged excess CENVAT credit, computed by deriving value of raw material from CENVAT credit shown in ER-1 returns and comparing it with balance-sheet figures, is sustainable. - HELD THAT: - The Tribunal held that the department's method - converting total CENVAT credit declared in ER-1 into an imputed raw material price using a fixed rate of duty and comparing that with balance-sheet purchase figures - is not authorised by statute and cannot be the sole basis for denying CENVAT credit. ER-1 returns record credit taken on receipt of inputs and do not correspond one-to-one with quantity consumed. The adjudicating authority ignored supplier credit notes, debit notes and the existence of differing duty rates on various inputs, which were on record and not rebutted. There was no independent corroborative evidence such as supplier or transporter investigations, cash flow-back, or inculpatory statements establishing paper transactions or short/ non-receipt of inputs. Reliance on audit-objection and balance-sheet comparison alone amounts to presumption and is impermissible; the Tribunal followed the reasoning in Beer Bros. (as cited in the order) that quantification of excess CENVAT credit solely on balance-sheet figures without invoice-level verification is unsustainable. Consequently the demand based on that computation cannot be sustained. [Paras 12, 13, 14]

Demand for excess CENVAT credit computed solely by reverse calculation from ER-1 returns and balance-sheet comparison is unsustainable and set aside for the periods under adjudication.

Extended period of limitation under Section 11A for fraud, collusion, willful mis-statement or suppression of facts - Use of audit-objection alone as basis for invoking extended limitation - Whether the extended period of limitation under Section 11A could be invoked against the appellant on the basis of the audit findings. - HELD THAT: - The Tribunal noted that Section 11A permits extended limitation only where duty was not levied or paid due to fraud, collusion, willful mis-statement, suppression of facts or contravention with intent to evade duty. The appellant was a duly registered unit subject to periodic departmental audits for earlier years and there was no allegation of non-filing of returns. The impugned order relied solely on audit objections without independent findings of fraud, collusion, willful mis-statement or suppression; there was no evidence demonstrating willful suppression to evade duty. In these circumstances and having regard to authorities relied upon in the order, extended period of limitation could not be invoked. [Paras 15, 16, 17]

Invocation of the extended period of limitation under Section 11A is not justified on the facts; the applicability of extended limitation is rejected and related demand/penalty cannot stand.

Final Conclusion: The impugned order demanding alleged excess CENVAT credit for 2012-13 to 2016-17 (including 2013-14) and imposing penalty under extended limitation was set aside; the appeal is allowed with consequential relief.

Treatment of sulphuric acid as a by-product - CENVAT credit reversal under rule 6(3)(i) of the CENVAT Credit Rules, 2004 - applicability of the ratio in Union of India vs. Hindustan Zinc Ltd. - distinction between inputs and input services for purposes of credit reversal - requirement of separate records for goods emerging as technological necessity

Treatment of sulphuric acid as a by-product - CENVAT credit reversal under rule 6(3)(i) of the CENVAT Credit Rules, 2004 - distinction between inputs and input services for purposes of credit reversal - Whether reversal under rule 6(3)(i) was payable in respect of sulphuric acid cleared to fertilizer manufacturers, and whether the Supreme Court's ratio in Union of India v. Hindustan Zinc Ltd. applies equally to input services. - HELD THAT: - The Tribunal upheld the Commissioner (Appeals) who applied the Supreme Court's decision in Union of India v. Hindustan Zinc Ltd. and subsequent Tribunal precedents. The Supreme Court had held that sulphuric acid arising during the manufacture of zinc is a by-product emergent as a technological necessity, and that Rule 57CC/Rule 6 cannot be read so as to equate by-product with final product for the purpose of credit reversal; separate records for the zinc used for by-product manufacture were not necessary. The Tribunal earlier rejected the Revenue's attempt to confine that ratio to inputs alone, holding the reasoning applies equally to common input services; no legal or factual justification exists to distinguish inputs from input services in applying the Apex Court's ratio. Applying those precedents to the facts for December, 2015 to March, 2016, the Tribunal found no error in the Commissioner (Appeals) setting aside the demand under rule 6(3)(i). [Paras 11, 12, 13, 14]

The demand under rule 6(3)(i) in respect of sulphuric acid cleared to fertilizer manufacturers was not sustainable; the Supreme Court's ratio applies to input services as well, and the appeal by the Department is dismissed.

Final Conclusion: The Tribunal dismissed the Department's appeal, upholding the Commissioner (Appeals) which allowed the respondent's appeal by applying the Supreme Court's decision that sulphuric acid is a by-product and that rule 6(3)(i) does not mandate reversal in these circumstances, a principle extended to input services.

Input service - place of removal - Cenvat credit eligibility for services rendered upto port of shipment - services integrally connected with manufacture and clearance of final products - Proviso to Section 11A(1) - extended period of limitation

Input service - place of removal - Cenvat credit eligibility for services rendered upto port of shipment - Whether the services rendered at the port/airport/land customs station up to shipment qualified as "input services" and were eligible for Cenvat credit under Rule 2(l) of the Cenvat Credit Rules - HELD THAT: - The Tribunal held that where export is under FOB contracts and goods are exported, the place of removal extends to the port/airport/land customs station where the export consignment is handed over for shipment. The factual record showed that the contested services were rendered at or prior to the port of shipment and necessarily had to be provided before the goods were loaded on board; they could not be rendered after removal. Ownership and transfer through the Bill of Lading entail that the exporter remains owner until the goods are handed over to the master of the vessel, and services rendered prior to that event constitute activities up to the place of removal. Applying this principle, the Tribunal concluded that the services in question fall within Rule 2(l)(ii) as services used in or in relation to the manufacture and clearance of final products upto the place of removal, and therefore the appellant was entitled to avail Cenvat credit of the service tax paid on those services. The Tribunal also noted that this view follows earlier judicial pronouncements and the Board instruction in CBEC Circular No. 999/6/2015-CX dated 28.02.2015 which treats the port/ICD/CFS as the place of removal for export shipments and instructs eligibility for Cenvat credit accordingly. [Paras 9, 10, 11]

The services rendered at the port/airport/land customs station up to shipment qualified as "input services" under Rule 2(l) and the appellant was entitled to Cenvat credit.

Services integrally connected with manufacture and clearance of final products - inclusive part of Rule 2(l) - Whether the contested services were integrally connected with the business of manufacture and clearance of excisable goods and thus covered by the inclusive part of the definition of "input services" in Rule 2(l) - HELD THAT: - The Tribunal agreed with the appellant that the services were integrally connected with the business of manufacture and export clearance. It observed that services such as CHA, steamer agent and related port services are essential for export and are used in relation to the manufacture and clearance of the final products. Consequently, these services fall within the inclusive limb of Rule 2(l), which lists activities relating to the business of manufacture and clearance upto the place of removal. The Commissioner's contrary finding that the services were not integrally connected and thus ineligible was held unsustainable in view of the factual matrix and the applicable legal interpretation. [Paras 10]

The contested services are integrally connected with the manufacture and clearance of the excisable goods and are covered by the inclusive part of Rule 2(l); they are eligible as "input services".

Final Conclusion: The impugned adjudication disallowing Cenvat credit and imposing recovery, interest and penalty was set aside; the appellant was held entitled to Cenvat credit of the service tax paid on the services rendered upto the port/airport/land customs station during June 2006 to March 2011 and the appeal allowed.

Gas based intermediate products - construction and interpretation of exemption notification schedule - scope of entry covering products arising from exploration and production processes - eligibility for refund under Notification No.33/99-CE

Gas based intermediate products - scope of entry covering products arising from exploration and production processes - interpretation and application of Notification No.33/99-CE - Whether Solvex-GL produced during processing of natural gas is eligible for exemption under Serial No.13 (entry (i)) of the schedule to Notification No.33/99-CE dated 08.07.1999 and entitled the respondent to the refund granted. - HELD THAT: - The Tribunal examined the manufacturing process as recorded: natural gas is compressed and liquefied, then fractionated to yield LPG (lighter fraction) and Solvex-GL (heavier fraction, principally C5-C6). The schedule to the Notification grants exemption in respect of "Gas based intermediate Products" and, under Serial No.13, lists both processes (e.g., gas exploration and production) and various products that arise from gas. The Tribunal held that the heading "gas based intermediate products" must be read to include products that are intermediate or final outputs of the exploration and production of gas, irrespective of whether they exist in gaseous form at standard temperature and pressure. The fact that several items enumerated under the sub-entries (such as plastics, fertilizers, polymer chips, etc.) are not gaseous demonstrates that the Notification was not intended to be confined to products in gaseous state alone. The department's narrow construction, which would limit the exemption only to products that are gaseous at STP/NTP, was therefore rejected as inconsistent with the language and purpose of the schedule. Given that Solvex-GL is produced in the course of processing natural gas and was not shown to be outside the production chain described in the Notification, it falls within the scope of Serial No.13 and is eligible for the exemption and consequent refund. [Paras 7, 8, 9, 10]

Solvex-GL is covered by Serial No.13 (entry (i)) of the schedule to Notification No.33/99-CE and the respondent is entitled to the exemption/refund; the departmental appeal is rejected on merits.

Final Conclusion: The Tribunal affirmed that Solvex-GL, produced during the processing of natural gas, falls within the scope of "gas based intermediate products" in the schedule to Notification No.33/99-CE and upheld the refund; the departmental appeal is dismissed.

Summary order. Petition listed for further hearing on 07.01.2021 along with connected matters; parties directed to exchange affidavits before next date. Interim direction: respondents are expected not to press recovery of amounts arising from the impugned assessment orders until the next date.

Limitation for reassessment - commencement of reassessment proceedings - deemed assessment - bar under Section 27(1) and Section 84(1) of the TNVAT Act - exclusion of time under Section 27(7) of the TNVAT Act

Limitation for reassessment - commencement of reassessment proceedings - deemed assessment - Validity of the notice dated 08.10.2018 for re-assessment issued beyond six years from the deemed assessment dated 30.06.2012. - HELD THAT: - The Court applied settled precedents which hold that for reckoning limitation the crucial question is whether reassessment proceedings were commenced within the statutory period; the date of conclusion of proceedings is immaterial. The assessment for 2009-2010 was deemed to have been made on 30.06.2012. The impugned notice for commencing reassessment was issued on 08.10.2018, which is beyond six years from the deemed assessment date. As the reassessment proceedings were not initiated within the statutory six-year period, the notice is barred by limitation and cannot be sustained. [Paras 3, 4]

Notice dated 08.10.2018 for reassessment quashed as barred by limitation.

Exclusion of time under Section 27(7) of the TNVAT Act - Respondent's contention that time can be excluded under Section 27(7) due to pending proceedings in respect of assessment year 2007-2008. - HELD THAT: - The Court considered the submission that ongoing litigation concerning assessment year 2007-2008 permits exclusion of time under Section 27(7). That provision applies only where the matter pending involves a question of law having a direct bearing on the assessment or reassessment in question. The respondent did not demonstrate that the pending proceedings related to the same question of law as the reassessment sought for 2009-2010. Therefore exclusion under Section 27(7) could not be availed to salvage the belated notice. [Paras 5]

Contention of exclusion under Section 27(7) rejected; it does not validate the belated reassessment notice.

Final Conclusion: Writ petition allowed; impugned reassessment notice dated 08.10.2018 quashed as barred by limitation and the respondent's plea for exclusion of time under Section 27(7) was rejected.

Maintainability of writ petition where statutory appeal is available - alternative remedy by statutory appeal and its limitation - exercise of High Court jurisdiction under Article 226 where alternative statutory remedy exists - condonation of delay in filing statutory appeal

Maintainability of writ petition where statutory appeal is available - alternative remedy by statutory appeal and its limitation - exercise of High Court jurisdiction under Article 226 where alternative statutory remedy exists - Whether the High Court should entertain writ petitions filed under Article 226 challenging assessment orders when a statutory appeal was available but not preferred within the maximum limitation period. - HELD THAT: - The Court applied the principle that where a statutory appeal lies and the appellant has failed to invoke that remedy within the maximum period permitted (including any period for condonation of delay), the High Court should not entertain a writ petition under Article 226 assailing the same order. Relying on the binding exposition in Assistant Commissioner (CT) LTU, Kakinada v. Glaxo Smith Kline Consumer Health Care Limited, the Court observed that the petitioner received the assessment orders for the tax years 2013-2014 and 2014-2015 and was entitled to prefer an appeal within 30 days, with the Appellate Authority empowered to condone delay for a further period. The petitioner did not prefer the statutory appeal and instead filed writ petitions beyond the maximum permissible period. In view of the settled legal position, the High Court declined to examine the merits of the controversy and refused to entertain the writ petitions.

Writ petitions dismissed as not maintainable for being filed after the expiry of the maximum limitation period for the statutory appeal; merits not entertained.

Final Conclusion: Writ petitions challenging the assessment orders for 2013-2014 and 2014-2015 are dismissed as not maintainable because the petitioner failed to avail the statutory appellate remedy within the maximum period; connected petitions closed, no costs.

Rigorous observance of procedural standards in tenders - mandatory compliance with tender conditions relating to financial ability and premises - judicial review limited to process not merits - field verification and production of sanction/permission for construction - suitability of premises under Rule 26(3) of Tripura Excise Rules - remand for fresh administrative decision on material irregularity

Mandatory compliance with tender conditions relating to financial ability and premises - judicial review limited to process not merits - Validity of acceptance of respondent No.5's technical bid in view of Clauses 4(ii) and 4(iii) of the DNIT. - HELD THAT: - The court held that Clauses 4(ii) and 4(iii) of the DNIT embody standards which the tendering authority must observe and are not to be treated as non-essential. However, the court found that the challenge to respondent No.5's technical qualification on the grounds of inadequacy of documents failed on the material on record. The bidder had uploaded a notarized bank certificate evidencing available balance and had produced a no-objection certificate and touji record for the premises; the tendering authority's field verification found the built premises to be an RCC structure with sufficient area, and the authority accepted that typographical errors in touji number did not defeat the presence of the document. Given the limited scope of judicial review - confined to examining the decision-making process and not to substituting the court's satisfaction for that of the authority - the court declined to set aside the acceptance of the technical bid on the Clauses 4(ii) and 4(iii) contentions, notwithstanding that the authority could not depart from the standards it prescribed. [Paras 12, 13, 14, 15, 18]

Clauses 4(ii) and 4(iii) are mandatory standards, but on the material before the court respondent No.5 was found to have conformed to those requirements and the challenge based on non-compliance is dismissed.

Field verification and production of sanction/permission for construction - suitability of premises under Rule 26(3) of Tripura Excise Rules - remand for fresh administrative decision - Whether the tendering authority properly dealt with the field verification observation regarding non-production of sanction/permission for the construction of the proposed premises. - HELD THAT: - The physical verification report expressly recorded that neither the bidder nor the touji-holder could produce any permission order for the alleged two-storied construction and noted the touji entry as KVT while the physical structure was RCC. The court observed that this specific observation by the field verification committee is a serious matter that the authorities were bound to consider before opening financial bids and before granting state patronage in the form of a licence. The court concluded that the authority had not demonstrated how it addressed the non-production of sanction/permission and therefore directed that the designated officer (respondent No.3) take a fresh decision on that observation. Pending that administrative decision, the grant of licence to respondent No.5 was to be kept on hold and the petitioner (the existing licensee) permitted to continue. [Paras 16, 17, 18, 19]

Matter remanded to respondent No.3 to decide afresh on the field verification observation regarding absence of sanction/permission for construction; grant of licence to respondent No.5 stayed until that decision; existing licensee permitted to continue in the interim.

Final Conclusion: The writ petition is disposed of: the court upheld that the DNIT conditions are mandatory but found no ground to set aside the technical acceptance of respondent No.5; however, because the field verification recorded non-production of sanction/permission for construction, the matter is remanded to respondent No.3 for fresh decision and the proposed grant of licence to respondent No.5 is stayed pending that decision while the petitioner may continue as existing licensee.