TaxTMI Updates e-Newsletter
Dec 24,2022

Levy of late fee for delayed GST returns under Section 47 - Effect of cancellation and subsequent restoration of GST registration on liability for late fee - Obligation of department to facilitate electronic filing and restraint on fresh cancellation for non-filing

Levy of late fee for delayed GST returns under Section 47 - Effect of cancellation and subsequent restoration of GST registration on liability for late fee - Demand of late fee under Section 47 could not be levied on the appellant for returns which could not be filed owing to an earlier cancellation of registration that was subsequently set aside on appeal. - HELD THAT: - Section 47 prescribes a late fee for a registered person who fails to furnish specified returns by the due date. In the present case the department did not contend that the appellant wilfully failed to furnish returns; the non-filing arose because the appellant's registration had been cancelled on the ground that it was a non-existing dealer. The appellate authority set aside the cancellation, holding the cancellation was founded on an incorrect premise, and the registration was restored. Given that the inability to file was consequent upon a cancellation later held to be erroneous, the late fee under Section 47 does not stand attracted and the demand for the maximum cap under subsection (1) could not be sustained. The Court therefore held the impugned demand to be without jurisdiction and not tenable in law. [Paras 5, 6, 7]

Demand of late fee under Section 47 in respect of the returns which the appellant could not file due to an earlier cancellation (later set aside) is without jurisdiction and unsustainable.

Obligation of department to facilitate electronic filing and restraint on fresh cancellation for non-filing - Appropriate directions were issued to prevent enforcement of the late fee demand, to facilitate electronic filing of returns without payment of late fee, and to restrain initiation of fresh cancellation proceedings for non-filing. - HELD THAT: - The court recognised that, unless directions were given, the appellant might be unable to effect electronic filing even after restoration of registration. To give practical effect to the conclusion that no late fee was due, the court restrained the respondents from demanding any late fee in respect of the returns the appellant intends to file and directed the nodal officer at the GST Help Desk, Kolkata to provide necessary assistance so the appellant can file returns without payment of late fee. The court also directed that the respondents should not initiate fresh proceedings for cancellation of registration on the ground of non-filing of those returns. Compliance was directed within three weeks. [Paras 7, 8, 9]

Respondents restrained from demanding late fee for the relevant returns; directed to facilitate electronic filing without payment of late fee; and enjoined from initiating new cancellation proceedings for non-filing.

Final Conclusion: The court held that late fee under Section 47 could not be demanded where returns were not filed due to an earlier cancellation of registration subsequently set aside on appeal; respondents were restrained from demanding the late fee, directed to assist in electronic filing without payment of late fee, and prohibited from initiating fresh cancellation proceedings for non-filing.

Maintainability of writ against show cause notice - preliminary interference with a show cause notice where it is in substance an order or pre decided - quashing of show cause notice and remand for fresh adjudication - directions to issue fresh show cause notice with open mind and opportunity to reply - preclusion of raising limitation on remand - action under Section 74(1) of the WBGST/CGST Act as predicated in a show cause notice

Maintainability of writ against show cause notice - preliminary interference with a show cause notice where it is in substance an order or pre decided - Writ against the impugned show cause notice was entertainable because the notice, on its face, amounted to a pre decided order and was not a genuine show cause notice. - HELD THAT: - The Court reiterated the settled principle that ordinarily writ petitions challenging show cause notices are not maintainable, subject to exceptions where the notice is issued without jurisdiction or is in substance an order pre deciding the matter. On perusal of the proceedings dated 26th September, 2022 the show cause notice was elaborate and recorded rejection of the appellants' replies under the heading "Rebuttal on the factual points", culminating in a statement that the authority had no option but to proceed under statutory provisions. The manner in which the authority rejected contentions and proceeded indicated the notice had been issued with preconception. The Court also noted that the appellants had expanded their reply beyond the scope of the initial query, but held that the authority had erred in issuing a notice that, prima facie, amounted to an order rather than a genuine show cause notice. For these reasons interference was warranted and the impugned proceedings did not satisfy legal requirements for a valid show cause notice. [Paras 3, 4, 5]

Impugned proceedings dated 26th September, 2022, characterized as a show cause notice, were quashed insofar as they amounted to a pre decided order.

Quashing of show cause notice and remand for fresh adjudication - directions to issue fresh show cause notice with open mind and opportunity to reply - The matter was remanded for fresh proceedings: the authority was directed to issue a fresh show cause notice, hear the appellants with an open mind and adjudicate in accordance with law. - HELD THAT: - Having set aside the impugned notice, the Court directed that the authority shall re issue a fresh show cause notice and afford the appellants adequate opportunity to reply and be heard. The Court acknowledged that the same officer may conduct the proceedings but expressed confidence that the officer would proceed afresh and not be guided by the earlier flawed notice. The fresh notice was ordered to be issued within three weeks from receipt of the certified copy of the order, and the adjudication was to follow in accordance with law. [Paras 6, 7]

Proceedings remitted; a fresh show cause notice to be issued within three weeks, to be adjudicated after affording adequate opportunity and with no reliance on the set aside notice.

Preclusion of raising limitation on remand - On remand the appellants are precluded from raising the defence of limitation in relation to the fresh show cause notice. - HELD THAT: - The Court expressly barred the appellants from pleading limitation when the fresh show cause notice is issued, thereby narrowing the scope of defence available on remand. This limitation was directed as part of the remand order. [Paras 8]

Appellants precluded from raising the issue of limitation in relation to the fresh show cause notice.

Final Conclusion: The appeal is allowed; the order in the writ petition is set aside, the impugned show cause notice dated 26th September, 2022 is quashed as amounting to a pre decided order, and the matter is remitted for issuance of a fresh show cause notice to be adjudicated in accordance with law (fresh notice to be issued within three weeks), subject to the appellants being precluded from raising limitation; no order as to costs.

Definition of supply - Sale of land and sale of building - Schedule III - Construction of building intended for sale - Schedule II clause (b) - Classification of prefabricated building as goods - Refund to recipient for excess tax paid - Appellate Authority's jurisdiction and procedural fairness

Definition of supply - Sale of land and sale of building - Schedule III - Construction of building intended for sale - Schedule II clause (b) - Classification of prefabricated building as goods - The Appellate Authority's conclusion that the purchase from M/s. Eveready Industries Limited was taxable as supply of goods (prefabricated building) and not excluded under Schedule III or treated as construction service under Schedule II was upheld. - HELD THAT: - The Appellate Authority found from the invoice that the transaction concerned a prefabricated building classifiable under HSN 9406, indicating supply of goods rather than construction services. The authority observed absence of documentary proof - such as sale agreement, completion certificate or a certificate from the seller - to establish that the sale fell within the Schedule III exclusion or the exception in clause (b) of paragraph 5 of Schedule II (construction of a building intended for sale where entire consideration is received after issuance of completion certificate/first occupation). On that factual and classificatory basis the Appellate Authority held the transaction to be a supply of goods and not covered by the said exclusions or treated as construction service. The High Court, after considering those reasons (including the impugned order's paragraph relied upon), declined to interfere with that conclusion.

The High Court refused to interfere with the Appellate Authority's finding that the transaction was taxable as supply of goods.

Refund to recipient for excess tax paid - Appellate Authority's jurisdiction and procedural fairness - The order of the lower forum insofar as the recipients' entitlement to claim refund for excess tax was concerned had been decided in favour of the petitioners by the Tribunal, and the High Court found no jurisdictional or procedural infirmity in the impugned order warranting interference. - HELD THAT: - The High Court noted that two issues had been before the Appellate Authority and that the Tribunal had already decided in favour of the petitioners on the question of whether recipients could claim refund for excess tax paid. The court examined the impugned order and found no lack of jurisdiction, no breach of principles of natural justice, no procedural irregularity, and no constitutional question requiring its intervention. In the absence of any such legal defect or absence of alternative remedy, the High Court declined to interfere with the Appellate Authority's order.

Writ petition dismissed; no interference with the impugned order and no relief granted on the asserted grounds.

Final Conclusion: The High Court dismissed the writ petition, upholding the Appellate Authority's conclusion that the purchase was taxable as supply of goods and finding no jurisdictional, procedural or natural justice defect in the impugned order; the Tribunal's favourable view on the refund claim was noted but did not lead to interference with the impugned order.

Voluntary payment - self-ascertainment under Section 73/Section 74 - procedure under Rule 142 including acknowledgement in Form GST DRC-04 - deposit of tax during search/inspection and safeguards against coercion - alignment of administrative instruction with judicial directions (Bhumi Associate)

Voluntary payment - self-ascertainment under Section 73/Section 74 - procedure under Rule 142 including acknowledgement in Form GST DRC-04 - deposit of tax during search/inspection and safeguards against coercion - Whether the cumulative deposit of Rs.1,80,10,000/- made during the search proceedings was a voluntary payment made by way of self-ascertainment in terms of the CGST Act and Rules, or whether it was made under coercion and therefore not voluntary. - HELD THAT: - The Court held that voluntariness cannot be presumed where the statutory and procedural safeguards for self-ascertainment and payment prior to notice were not followed. Under the scheme of Sections 73 and 74 read with Rule 142, a person making payment by self-ascertainment must inform the proper officer by filing GST DRC-03 and the proper officer must acknowledge receipt in GST DRC-04. Although the payments were made via GST DRC-03 in four tranches during the early hours of 17.02.2022 while the search was still in progress, no acknowledgement in GST DRC-04 has been placed on record. Payments made during the pendency of the search proceedings and before completion of the search, without the mandated acknowledgement and in circumstances where statutory safeguards and judicial directions (as in Bhumi Associate) were not respected, indicate absence of voluntariness. The Court further observed that administrative guidance (Instruction No. 01/2022-23) fails to fully implement the protective direction in Bhumi Associate that even voluntary DRC-03 filings should ordinarily be made after the search concludes to avoid coercion. Failure to follow the prescribed procedure and judicially mandated safeguards leads to the conclusion that the deposits lacked an element of voluntariness and bore the colour of coercion. [Paras 40, 41, 42, 43, 44]

The deposits made on behalf of the petitioner during the search proceedings lacked voluntariness; the cumulative sum of Rs.1,80,10,000/- is to be returned to the petitioner along with simple interest at 6% per annum from 17.02.2022 until payment.

Alignment of administrative instruction with judicial directions (Bhumi Associate) - Whether the CBIC Instruction No. 01/2022-2023 requires modification to conform with the directions issued in Bhumi Associate. - HELD THAT: - The Court noted that Instruction No. 01/2022-2023, while prohibiting recovery during search and recognizing voluntary payment by DRC-03, does not fully replicate the Gujarat High Court's direction in Bhumi Associate which advises that even voluntary payments by way of DRC-03 should be filed after the search concludes and officers have left the premises. The Instruction therefore falls short of the protective procedural safeguard mandated by Bhumi Associate. Given the binding force of the High Court's directions on the administration and the need to prevent coercive recoveries during searches, the Court directed CBIC to align its Instruction with Bhumi Associate. [Paras 38, 39, 46]

CBIC is directed to align Instruction No. 01/2022-2023 dated 25.05.2022 with the directions issued in Bhumi Associate.

Final Conclusion: The writ petition is allowed: the sum of Rs.1,80,10,000/- deposited on behalf of the petitioner during the search proceedings is held not to have been voluntarily paid and is ordered to be returned to the petitioner with simple interest at 6% per annum from 17.02.2022 until payment; the amount shall be remitted within ten days of receipt of the judgment; CBIC is directed to align Instruction No. 01/2022-2023 with the directions in Bhumi Associate.

Option between refund and carry forward of Input Tax Credit - provisional refund order and FORM-P - transitional credit from TNVAT to GST - compulsion to alter elected remedy

Option between refund and carry forward of Input Tax Credit - compulsion to alter elected remedy - provisional refund order and FORM-P - Validity of the impugned notice requesting the petitioner to opt for carry forward of ITC when the petitioner had already opted for refund and a provisional refund order (with FORM-P) had been issued - HELD THAT: - The court noted that dealers had a statutory/administrative option to either seek refund of transitional Input Tax Credit or carry it forward to the GST regime, and that the petitioner had chosen refund. The Department had processed the petitioner's refund application and issued a provisional refund order dated 06.10.2022 together with FORM-P quantifying the refund entitlement for assessment year 2017-18. Given that the common portal remains available for making an election but an election in this case had already been exercised and acted upon by issuance of a provisional refund order, the respondent could not validly compel the petitioner to adopt the alternate remedy. The impugned notice, issued after the provisional refund order, was therefore held to be erroneously issued and contrary to the position already taken and processed by the Revenue. [Paras 7, 8, 9]

Impugned notice set aside as erroneously issued; petitioner's choice of refund (as processed and provisionally quantified) must be respected.

Provisional refund order and FORM-P - transitional credit from TNVAT to GST - Relief and direction to the respondent regarding disbursal of the refund quantified in the provisional refund order and FORM-P - HELD THAT: - Having accepted that the petitioner's refund option had been validly exercised and processed, the court directed the respondent to ensure that the refund amount as quantified in the provisional refund order dated 06.10.2022 and the annexed FORM-P is made available to the petitioner. The direction was time-bound and administrative in nature, requireing the respondent to effect the refund expeditiously and, in any event, within three weeks from the date of the order. [Paras 9]

Respondent directed to disburse the refund quantified in the provisional refund order and FORM-P to the petitioner expeditiously and within three weeks.

Final Conclusion: Impugned notice set aside; respondent directed to pay the refund as quantified in the provisional refund order and FORM-P (assessment year 2017-18) within three weeks; writ petition disposed of and connected WMP closed without costs.

Refund of tax - Section 54 of the Central Goods and Services Tax Act, 2017 - refund and relevant date - relevant date for limitation under Section 54 - exclusion of period 15 March 2020 to 28 February 2022 for limitation - restoration and exclusion of limitation by Suo Motu Writ Petition (C) No.3/2020

Refund of tax - Section 54 of the Central Goods and Services Tax Act, 2017 - refund and relevant date - relevant date for limitation under Section 54 - exclusion of period 15 March 2020 to 28 February 2022 for limitation - Whether the impugned orders rejecting the Petitioner's refund claims for April 2018 to March 2019 and April 2019 to December 2019 as time-barred were sustainable. - HELD THAT: - The Assistant Commissioner rejected the two refund claims solely on the ground of being time barred without identifying which category of the Explanation to Section 54 applied and without fixing the "relevant date" from which limitation would run. The question whether the limitation period stood extended by the Supreme Court's orders (including exclusion of the period 15 March 2020 to 28 February 2022) could not be applied in a straightaway manner because the basic factual determinations - i.e., the appropriate category under the Explanation to Section 54 and the resulting start and end dates of the limitation period for each claim - were not made in the impugned orders. For these reasons the Court quashed and set aside the portions of the impugned orders rejecting the claims and remanded the applications to the Assistant Commissioner for fresh examination on limitation and on merits in the light of the observations made, with a direction to decide within six weeks. [Paras 8, 10, 11, 12, 13]

The rejection of the refund claims for April 2018 to March 2019 and April 2019 to December 2019 as time-barred is quashed; the applications are restored for fresh consideration of the relevant date, limitation (including applicability of the exclusion directed by the Supreme Court) and merits, to be decided within six weeks.

Refund of tax - Validity of the order granting refund for January 2020 to March 2020. - HELD THAT: - The petitioner's refund claim for January 2020 to March 2020 had already been granted by the authority and the petitioner raised no grievance in respect of that grant. The High Court expressly maintained the order granting refund for that period. [Paras 5, 14]

The order granting refund for January 2020 to March 2020 is maintained.

Final Conclusion: The writ petition is allowed insofar as the orders rejecting refund claims for April 2018 to March 2019 and April 2019 to December 2019 are quashed and those applications are remitted to the Assistant Commissioner for fresh adjudication on limitation and merits within six weeks; the refund already granted for January 2020 to March 2020 is maintained and the petition is disposed of.

Doctrine of unjust enrichment - Refund of tax collected without authority of law - Limitation for refund claims under the CGST regime - Manual filing under Rule 97A of the CGST Rules - Restriction to electronic filing by administrative Circular - Restitution under Section 72 of the Indian Contract Act - Writ of Mandamus to compel refund or rectification - Article 265 - tax only by authority of law - Impossibility to comply with administrative procedure

Manual filing under Rule 97A of the CGST Rules - Restriction to electronic filing by administrative Circular - Impossibility to comply with administrative procedure - Writ of Mandamus to compel refund or rectification - Whether the petitioner can be permitted to rectify the erroneous recipient details or seek refund notwithstanding that the GST common portal did not permit rectification and the impugned Circular restricted refund applications to electronic filing - HELD THAT: - The court observed that Rule 97A expressly permits manual filing and processing of refund-related applications despite references to electronic filing. The Circular of 18.11.2019 restricted certain refund applications to the common portal, but that restriction cannot negate or render Rule 97A ineffective. In the absence of an effective electronic mechanism that would permit rectification, it would be impracticable and unconscionable to compel the petitioner to comply with the electronic-only procedure. Applying these principles and the precedents treating inadvertent mis-entries and absence of enabling mechanism, the court held that the petitioner should not be prejudiced by the portal's inability to allow rectification and that the petitioner is entitled to pursue a manual application for refund or rectification. The court therefore set aside the communication directing the petitioner to follow the Circular and directed the petitioner to make a manual application, with respondents to decide the same in accordance with law within the prescribed period. [Paras 16, 23, 24, 26, 27]

Impugned communication set aside; petitioner permitted to file a manual application for refund/rectification and respondents directed to decide the application in accordance with law within four weeks.

Doctrine of unjust enrichment - Refund of tax collected without authority of law - Limitation for refund claims under the CGST regime - Restitution under Section 72 of the Indian Contract Act - Article 265 - tax only by authority of law - Whether the petitioner's claim is barred by limitation under the refund provisions or whether amounts paid by mistake are refundable irrespective of the statutory refund time-bar - HELD THAT: - The court held that amounts paid on account of an inadvertent error, which cannot be said to be tax legally due to the revenue, fall within the principle that the revenue cannot retain money collected without authority of law. Relying on the doctrine of unjust enrichment and restitution principles, the court concluded that Section 54 (and its limitation) governing refunds of tax paid under the statute does not operate to deny a remedy where the amount was paid by mistake and is not legally due as tax. Given the factual finding that the wrong GSTIN was entered and the real recipient was entitled to input credit, the court found the respondents could not rely on the statutory limitation to retain the disputed amount and therefore the limitation contention was not tenable in the circumstances. [Paras 20, 22, 24, 25, 26]

Claim not barred by the statutory limitation in the circumstances; respondent cannot retain the amount paid by mistake and must deal with the petitioner's manual application in accordance with law.

Final Conclusion: The writ petition is allowed: the communication dated 26.02.2021 is set aside; the petitioner is permitted to make a manual application for refund/rectification in respect of the quarter ending 30.06.2018 and the respondents are directed to decide the application in accordance with law within four weeks.

Remedy in absence of GST Appellate Tribunal - condonation of delay in filing appeal - jurisdiction under Article 226 - remand for fresh consideration and personal hearing

Condonation of delay in filing appeal - remedy in absence of GST Appellate Tribunal - Whether the appellate authority's rejection of the appeal as beyond the condonable period, in circumstances where the GST Tribunal is not constituted, justifies judicial intervention and remand to the primary authority for reconsideration. - HELD THAT: - The Court noted that the appeal before the 3rd respondent was rejected solely on the ground that it was filed beyond the 30-day condonable period and therefore could not be admitted. Observing that the GST Tribunal under Section 109 has not been constituted and consequently the petitioner would be left without an effective remedy, the Court applied the reasoning in W.P. No.27071 of 2022 and held that it is just and proper to remit the matter. The petitioner's remedy being otherwise illusory, the Court directed that the matter be remitted to the primary authority for fresh consideration and ordered that the petitioner be afforded a personal hearing and that an appropriate order be passed in accordance with law within a specified short timeframe. [Paras 5, 6, 7]

Writ petition allowed; matter remitted to the primary authority to re-consider the petitioner's case and, after affording personal hearing, pass appropriate orders in accordance with law within two weeks.

Final Conclusion: The writ petition is allowed; the appellate rejection for delay is not permitted to leave the petitioner without remedy while the GST Tribunal remains unconstituted - the matter is remitted to the primary authority for fresh consideration with a direction to afford personal hearing and decide expeditiously.

Maintainability of writ petition under Article 226 - availability of alternative statutory remedy of appeal under Section 107 - exceptions to bypassing statutory remedy: breach of fundamental rights, violation of principles of natural justice, excess of jurisdiction, challenge to vires - violation of principles of natural justice - requirement of summary of grounds in Form DRC-01 - adjournments under Section 75(5) - fiscal revenue matters and limited scope for writ interference - substantial compliance with procedural requirements

Maintainability of writ petition under Article 226 - availability of alternative statutory remedy of appeal under Section 107 - exceptions to bypassing statutory remedy: breach of fundamental rights, violation of principles of natural justice, excess of jurisdiction, challenge to vires - fiscal revenue matters and limited scope for writ interference - Whether writ petitions challenging assessment orders are maintainable when an efficacious statutory appeal under Section 107 is available. - HELD THAT: - The Court applied the settled principle that writ jurisdiction under Article 226 ordinarily should not be exercised to bypass an available statutory appeal in fiscal matters. The judgment surveyed binding authorities which permit writ intervention only in exceptional circumstances - breach of fundamental rights, violation of principles of natural justice, excess of jurisdiction, or challenge to the vires of the statute or delegated legislation. On the material before it, the Court found no such exception established: the grievances raised did not amount to a breach of fundamental rights, excess of jurisdiction, or a vires challenge. The factual disputes underlying the assessment and the availability of a specific appellate remedy dictated relegation to the statutory forum rather than exercise of constitutional writ jurisdiction. Consequently the petitions were not maintainable and should be dismissed, leaving the petitioner free to avail the statutory appeal mechanism.

Writ petitions are not maintainable; petitioner should pursue remedy by filing appeal under Section 107.

Violation of principles of natural justice - requirement of summary of grounds in Form DRC-01 - substantial compliance with procedural requirements - Whether the impugned assessment orders suffer from violation of principles of natural justice by reason of non-supply of summary of grounds in Form DRC-01 and non-consideration of the petitioner's reply. - HELD THAT: - The Court examined the show cause notices and the sequence of proceedings. It found the show cause notice dated 06.07.2022 contained detailed grounds and the legal basis for proposed tax, and that the omission to attach Form DRC-01 was attributable to technical issues; the substantive summary of grounds was contained in the notice, amounting to substantial compliance. The record showed multiple summons and opportunities for the petitioner to furnish information, and the petitioner repeatedly sought adjournments and furnished only partial information. The petitioner claimed to have filed a reply on the date the order was passed, but the Court observed that he had been granted opportunities and had not availed them; therefore the contention that the reply was not considered did not establish a breach of natural justice. On these facts, no violation of principles of natural justice was made out.

No violation of principles of natural justice; the show cause notice evidenced substantive disclosure of grounds and the petitioner's procedural complaints do not vitiate the assessment.

Adjournments under Section 75(5) - violation of principles of natural justice - Whether the petitioner was entitled to further adjournments as of right under Section 75(5) so as to render the assessment void for non-grant of hearing opportunities. - HELD THAT: - Section 75(5) permits grant of adjournments if sufficient cause is shown, but limits such adjournments to no more than three. The Court found on the material that the petitioner had been granted multiple adjournments (specifically three) and that he nonetheless failed to submit a substantive reply, repeatedly sought postponements, and did not request disclosure of particular records. Given that the petitioner was afforded the statutory number of adjournments and still did not furnish the required replies, the contention that he was denied the right to be heard was unsustainable. The claimed filing of a reply on the date the order was passed did not establish that the reply was available for consideration prior to the assessment order.

No breach of the adjournment entitlement under Section 75(5); the assessment is not vitiated for denial of hearing opportunities.

Final Conclusion: The writ petitions challenging the assessment orders for assessment years 2017-18, 2018-19 and 2019-2020 are dismissed as not maintainable because an efficacious statutory appeal under Section 107 is available and no exceptional circumstances justifying writ relief were shown; the petitioner is left free to file the statutory appeal and the time during which these petitions were pending shall not be counted for limitation in filing the appeal.

Cancellation of GST registration - suspension of GST registration - principles of natural justice - show-cause notice - consideration of explanation to show cause notice - revocation of suspension for non-decision

Suspension of GST registration - principles of natural justice - consideration of explanation to show cause notice - revocation of suspension for non-decision - Whether the respondent authority must consider the explanations filed by the petitioner to the show cause notice and the consequences if no final order is passed within a specified time. - HELD THAT: - The Court recorded that the petitioner had filed replies to the impugned show cause notice on specified dates but the taxing authority did not communicate any decision and had kept the petitioner's registration suspended. Observing that the suspension was in issue and that the petitioner's explanations remained unadjudicated, the Court directed the Superintendent of State Tax to consider the explanations to the show cause notice within two weeks of receipt of the order. The Court further provided a prospective consequence: if the explanation is not considered and no final order is passed within that period, the suspension order shall stand revoked. The direction requires fresh consideration by the authority and imposes a temporal limit for adjudication, rather than deciding the merits of cancellation on the merits. [Paras 6]

The Superintendent of State Tax is directed to consider the petitioner's explanations within two weeks; failing which the suspension of the petitioner's GST registration shall be revoked.

Final Conclusion: Writ petition disposed directing the taxing authority to consider the petitioner's explanations to the show cause notice within two weeks; if no final order is passed within that period the suspension of registration shall stand revoked.

Imposition of monetary condition for bail based on accused's offer - Withdrawal of prayer after grant of bail - Seriousness of offence and denial of bail - Alleged fraudulent availment of Input Tax Credit - Authorization of arrest under Section 132(1)(C) of the C.G.S.T. Act, 2017

Imposition of monetary condition for bail based on accused's offer - Withdrawal of prayer after grant of bail - Whether the condition imposed by the Sessions Court directing deposit of 10% of the stated amount as a prerequisite for bail should be set aside. - HELD THAT: - The Sessions Judge granted bail after considering the applicant's own undertaking and prayer before that court that he was ready to deposit 10% of the alleged liability; the condition therefore originated from the applicant's submission during the bail hearing. The High Court found on the material that the trial court imposed the monetary condition in consequence of that offer and that the applicant cannot repudiate a prayer made on his behalf before the trial court after obtaining bail. In these circumstances the High Court declined to interfere with the condition imposed by the trial court at this interlocutory stage.

The application to set aside or delete the deposit condition imposed by the Sessions Court is rejected; the High Court will not interfere with the condition imposed on the basis of the applicant's own prayer.

Seriousness of offence and denial of bail - Alleged fraudulent availment of Input Tax Credit - Authorization of arrest under Section 132(1)(C) of the C.G.S.T. Act, 2017 - Whether the applicant is entitled to bail having regard to the nature and gravity of the allegations and material on record. - HELD THAT: - The FIR alleges large-scale fraudulent availment of Input Tax Credit through invoices from non existent firms for the period indicated in the record. Cognizance was taken and arrest was authorized under the relevant provision of the C.G.S.T. Act; the Sessions Court, while granting bail, imposed conditions including the monetary deposit founded on the applicant's own offer. Having considered the seriousness and gravity of the offence, the evidence and complicity alleged, the High Court concluded that this is not an appropriate case for granting bail unconditionally and that interference with the trial court's exercise of discretion is not warranted at this stage.

Bail is refused; the applicant's first bail application is rejected at this stage.

Final Conclusion: The High Court refused to interfere with the Sessions Court's condition requiring deposit (which originated from the applicant's own undertaking) and, having regard to the seriousness of the alleged Input Tax Credit fraud, rejected the applicant's bail application at this stage.

Reference to arbitration - appointment of sole arbitrator by consent - interim administrative authority to file statutory returns pending arbitration - preservation of rights during interim measures - party cooperation for compliance with tax formalities

Reference to arbitration - appointment of sole arbitrator by consent - Dispute between the partners was referred to arbitration and an Arbitral Tribunal comprising the sole arbitrator Sri V.V.Angadi was appointed to conduct the arbitration at the Arbitration and Conciliation Centre, Bengaluru. - HELD THAT: - The Trial Court had earlier allowed an application under the Arbitration and Conciliation Act, 1996 referring the inter se dispute of the partners to arbitration. That order has attained finality and, by joint submission of the parties before this Court, the parties could not agree on the name of the arbitrator. Having regard to the finality of the trial court's direction to refer the dispute to arbitration and the parties' joint suggestion, the Court directed the Arbitration and Conciliation Centre to constitute an Arbitral Tribunal comprising the sole arbitrator Sri V.V.Angadi, retired District Judge, to proceed with the arbitration at the designated Centre. The Registry was directed to communicate the order to the Arbitration and Conciliation Centre and to the sole Arbitrator. [Paras 4, 5, 6, 8]

Reference to arbitration confirmed and the Arbitral Tribunal constituted with Sri V.V.Angadi as sole arbitrator to conduct proceedings at the Arbitration and Conciliation Centre, Bengaluru.

Interim administrative authority to file statutory returns pending arbitration - preservation of rights during interim measures - party cooperation for compliance with tax formalities - Respondent No.3 was permitted, for a limited purpose, to file GST returns and perform related acts (including generating E-way bills) on behalf of the firm pending arbitration, subject to preservation of all parties' rights. - HELD THAT: - The Court observed that respondent No.3 had been filing GST returns for the firm till July 2022 and that the GSTIN and user ID stood in his name. While the substantive dispute about authorization and alleged irregular payments must be decided by the Arbitral Tribunal during arbitration, the Court, without prejudice to the parties' contentions, granted a limited interim direction enabling respondent No.3 to file GST returns and carry out necessary acts such as generating E-way bills to allow continuity of statutory compliance. The necessary papers for this purpose were directed to be provided by the other partners, and the parties were directed to cooperate. It was expressly clarified that such interim compliance shall not be construed as creating any right or interest in favour of respondent No.3 affecting the rights of the other partners, and all claims and rival contentions were kept open. [Paras 7, 8]

Respondent No.3 permitted to file GST returns and perform related acts for limited interim purposes, with preservation of all parties' rights and a direction to cooperate in providing necessary papers.

Final Conclusion: The writ petition is disposed of by (i) referring the inter se partnership dispute to arbitration before the sole arbitrator Sri V.V.Angadi to be conducted at the Arbitration and Conciliation Centre, Bengaluru, and (ii) granting a limited interim direction permitting respondent No.3 to file GST returns and undertake related compliance on behalf of the firm while expressly preserving all parties' rights and leaving all substantive claims open for adjudication.

Admission of application for advance ruling - proviso to Section 98(2) of the CGST/APGST Act - investigation as part of 'any proceedings' - void ab initio - authority's power to admit or reject application after hearing

Proviso to Section 98(2) of the CGST/APGST Act - investigation as part of 'any proceedings' - admission of application for advance ruling - void ab initio - Whether the Authority for Advance Ruling should have admitted the applicant's advance ruling application when investigation proceedings by DGGSTI had commenced prior to filing, and whether the ARA and AAAR orders are vitiated. - HELD THAT: - The Court examined the proviso to sub section (2) of Section 98 which forbids admission of an application where the question raised is already pending in any proceedings in the case of the applicant. The Court held that the term 'any proceedings' encompasses investigation proceedings under the CGST/APGST Act. On the facts, summons and panchanama by DGGSTI dated prior to the filing of the ARA application showed that investigation on the same subject matter had commenced before the application was filed. In view of the statutory embargo, the ARA ought not to have admitted the application or pronounced a ruling; hence the ARA order was vitiated. The appellate authority, though the ground asserting prior investigation was raised, failed to address that contention and merely confirmed the ARA ruling; that failure rendered the appellate order also vitiated. The Court relied on consistent decisions of other Appellate Authorities for Advance Ruling which held that where investigation has been initiated before filing, the advance ruling process is unavailable and earlier ARA orders are void ab initio. Consequentially, both impugned orders were set aside and the petitioner was granted liberty to present explanations and legal/factual pleas afresh before the appropriate authority, which must proceed in accordance with law without being influenced by the vacated ARA and AAAR orders.

The ARA erred in admitting and deciding the application after investigation had commenced; the ARA order dated 05.03.2020 and the AAAR order dated 28.09.2020 are set aside and the petitioner is permitted to agitate its case afresh before the appropriate authority.

Final Conclusion: Writ petition allowed; the ARA and AAAR orders are quashed for having been made despite pre existing investigation, and the petitioner is afforded liberty to place its case before the appropriate authority for fresh consideration uninfluenced by the vacated orders.

Entertaining writ petitions beyond statutory period of limitation under Article 226 - judicially condoning delay in filing statutory appeal by exercise of writ jurisdiction - extension of limitation by Supreme Court in In Re: Cognizance for COVID-19 - service by making order available on common portal as valid service - requirement of acceptable grounds for condonation: personal/human/medical reasons

Entertaining writ petitions beyond statutory period of limitation under Article 226 - judicially condoning delay in filing statutory appeal by exercise of writ jurisdiction - High Court may, in exercise of its writ jurisdiction under Article 226, entertain challenges beyond statutory limitation and permit restoration of belated appeals, but such discretion must be exercised sparingly and only upon acceptable justification. - HELD THAT: - The Court reaffirmed that ordinarily statutory limitation prescribed for filing appellate/revisional remedies cannot be traversed by the statutory authority, and the power under Article 226 is not to be exercised as a matter of course to override rigid statutory limitation. Nevertheless, Article 226 is wide enough to permit condonation of delay and restoration of appeals where the reasons for delay are well founded; such discretion must be exercised very sparingly after close scrutiny of the circumstances causing delay. The Court followed the approach adopted in prior decisions including the Supreme Court's treatment of similar issues and applied those principles to decide individual writ petitions, permitting restoration in some cases and dismissing others where the explanations for delay were not acceptable. [Paras 18, 20, 21, 22, 146]

Discretion to entertain writs beyond statutory limitation affirmed but to be exercised sparingly; appeals may be restored without reference to limitation where acceptable justification is shown; otherwise writ petitions dismissed.

Extension of limitation by Supreme Court in In Re: Cognizance for COVID-19 - requirement of acceptable grounds for condonation: personal/human/medical reasons - The benefit of the Supreme Court's extensions in In Re: Cognizance (COVID-19) may be available to petitioners, but only within the temporal confines of that extension and where the petitioner's pleaded reasons (for any remaining delay) are acceptable - typically personal, human or medical grounds. - HELD THAT: - The Court noted the sequence of extensions granted by the Supreme Court (last extension expiring 29.05.2022) and held that the leniency previously afforded cannot be indefinitely available. Where limitation expired prior to or during the extension period, petitioners may in appropriate cases be held entitled to the benefit of that extension; nevertheless, if petitioners filed much later or the explanation is generic (e.g., general financial hardship or mere absence of consultant), such reasons may not suffice. The Court applied this standard across the batch, accepting COVID-19-related or bona fide medical/personal explanations in some matters (and restoring appeals), and rejecting vague or implausible explanations in others (and dismissing petitions). [Paras 23, 31, 123, 124, 125]

Benefit of In Re: Cognizance extension recognised but limited; condonation granted where acceptable personal/human/medical reasons identified, otherwise refused.

Service by making order available on common portal as valid service - Uploading an order on the common portal constitutes a valid mode of service under the GST enactments and is to be treated as 'tendering' of the order to the recipient; absence of a statutory alert requirement does not render portal upload ineffective. - HELD THAT: - Responding to a contention that Section 169(2)'s use of words such as 'tendered', 'published' or 'affixed' excludes 'uploaded', the Court rejected that narrow construction. Making an order available on the common portal was held equivalent to tendering the order to the recipient. The Court found no legislative intent to exclude uploading as a mode of service. It also accepted the revenue's practical explanation that registered persons are under statutory obligation to file returns monthly and therefore are expected to check the portal; whereas the Income Tax regime has explicit alert requirements, the GST scheme does not, and their absence does not invalidate portal-based service. [Paras 37, 38, 39, 40, 41]

Upload on the common portal is a valid mode of service under the GST Acts; challenges based solely on non-receipt where order was uploaded are not meritorious absent other acceptable reasons.

Final Conclusion: The High Court applied settled principles governing exercise of Article 226 to a batch of challenges to cancellation of GST registrations: confirming that writ jurisdiction may, in rare and justified cases, relieve petitioners of statutory limitation and permit restoration of belated appeals (subject to strict scrutiny and acceptable reasons, including certain COVID-19 or medical grounds), and holding that uploading orders on the common portal constitutes valid service; individual writ petitions were disposed of on these principles, with some appeals restored for fresh adjudication and others dismissed where explanations were inadequate.

Transitional input tax credit - TRAN-1 and TRAN-2 filing window - Apex Court directions in Filco Trade Centre - questions of law kept open

Apex Court directions in Filco Trade Centre - TRAN-1 and TRAN-2 filing window - transitional input tax credit - questions of law kept open - Disposition of the writ petition in terms of the Apex Court's directions in Filco Trade Centre concerning filing and verification of transitional credit claims. - HELD THAT: - Petitioner sought declaratory and other reliefs challenging clause (iv) of Section 140(3) of the CGST Act and related FAQs and sought a reading down to protect vested credit. While multiple contentions were urged, the High Court noted that the Apex Court in Filco Trade Centre directed opening of the GST portal for filing/transmission of TRAN-1 and TRAN-2 for prescribed periods, permitted aggrieved assessees to file or revise forms during that window, and left open all questions of law decided by the High Courts concerning Section 140 read with corresponding rules/notifications/directions. The High Court observed that subsequent orders extended the portal period and that other High Courts have followed Filco. Given those developments and that the Apex Court kept substantive questions of law open, the High Court found it appropriate to dispose of the present petition by applying the directions given in Filco Trade Centre rather than deciding the constitutional and substantive challenges on merits. [Paras 5, 7]

Writ petition disposed of in terms of the Apex Court's directions in Filco Trade Centre (directions regarding opening of the GST common portal for TRAN-1/TRAN-2, filing/revision by assessees, verification by authorities and extension of time); substantive questions of law under Section 140 remain open.

Final Conclusion: Petition disposed of by directing compliance with the Apex Court's Filco Trade Centre directions concerning filing/revision of TRAN-1/TRAN-2 and related verification; the High Court did not decide the constitutional or substantive challenges to Section 140(3)(iv), those questions remaining open.

Violation of principles of natural justice - Undue haste in passing assessment order - Right to adequate opportunity to respond to show cause notice - Remand for fresh consideration with directions - Availability of alternative appellate remedy not an absolute bar to writ relief

Violation of principles of natural justice - Undue haste in passing assessment order - Right to adequate opportunity to respond to show cause notice - Assessment order set aside for failure to afford adequate opportunity and for being passed with undue haste. - HELD THAT: - The Court found that the show cause notice was issued on 14th September, 2022 with an ostensible five day reply period but, in effect, the assessee had only 48 hours to respond because the date of service and intervening weekend and a public observance reduced the available time. The assessee furnished an interim reply on 19th September, 2022 requesting more time and seeking specific GSTR 1 data, but the assessing officer proceeded to pass the assessment dated 28th September, 2022 without granting the requested opportunity. The assessment record shows the interim reply was verbatim reproduced and rejected; there was no material to show the assessee had been put on notice that portal verification was available. These circumstances amounted to a total breach of the principles of natural justice and undue haste, warranting interference despite the existence of an appellate remedy under the Act. [Paras 3, 4, 6, 7]

Assessment order dated 28th September, 2022 is set aside on grounds of violation of natural justice and undue haste.

Remand for fresh consideration with directions - Right to adequate opportunity to respond to show cause notice - Requirement to pass a speaking order - Matter remanded to assessing officer with directions to furnish documents, afford sufficient time for reconciliation and to decide afresh by a speaking order. - HELD THAT: - The Court directed that the assessing officer provide the documents sought by the assessee in the interim reply dated 19th September, 2022 and grant sufficient time to enable reconciliation of alleged differences. The assessing officer must adjudicate the case afresh on merits and in accordance with law and pass a speaking order after affording a reasonable opportunity to the assessee to submit a final reply to the show cause notice. [Paras 8, 9]

Matter remanded for fresh consideration with specific directions to furnish requested documents, grant adequate time for reply and pass a speaking order.

Final Conclusion: The intra Court appeal is allowed: the assessment order dated 28th September, 2022 is set aside for breach of natural justice and undue haste; the matter is remanded to the assessing officer with directions to furnish the requested documents, afford adequate time for reconciliation and reply, and to decide the case afresh by a speaking order.

Maintainability of writ petition in presence of alternative statutory remedy - appeal to Commissioner (Appeals) as efficacious remedy - intimation of demand under Section 200A treated as notice of demand - recovery under Section 226(3) dependent on sustainability of demand - declaration as "Assessee in default" under Section 201 not attracted - doctrine of exhaustion of statutory remedies

Maintainability of writ petition in presence of alternative statutory remedy - appeal to Commissioner (Appeals) as efficacious remedy - doctrine of exhaustion of statutory remedies - Challenge to notices issued under Section 226(3) cannot be entertained in writ jurisdiction when the underlying intimation of demand under Section 200A has not been contested by filing the statutory appeal. - HELD THAT: - The Court held that the petition assails notices under Section 226(3) issued to the petitioner's banker but does not challenge the intimation of demand issued under Sub Section (1) of Section 200A. The impugned recovery notices are consequential upon and dependent on the demand intimated under Section 200A, and there is an inseparable causal connection between the intimation and the recovery. Since the Act furnishes a complete machinery for redress (including appeal to the Commissioner (Appeals)), the petitioner must avail the statutory remedy; extraordinary writ jurisdiction under Article 226 is not to be invoked in substitution for the statutory appellate remedy unless exceptional circumstances exist. Reliance is placed on established authority that a writ petition should not be entertained where an effective alternative remedy is available and the statutory remedy must be exhausted before approaching the High Court. The Court therefore declined to adjudicate the merits of the demand and directed the petitioner to pursue the statutory appeal if aggrieved by the intimation under Section 200A. [Paras 4, 6, 7, 8]

Writ petition challenging notices under Section 226(3) is not maintainable in absence of challenge to the intimation under Section 200A; petitioner must avail appellate remedy under the Income Tax Act.

Declaration as "Assessee in default" under Section 201 not attracted - recovery under Section 226(3) dependent on sustainability of demand - The requirement of declaration as an "Assessee in default" under Section 201 was not attracted on the facts, and recovery under Section 226(3) was properly invoked on account of non compliance with the intimation under Section 200A. - HELD THAT: - The Court examined the contention that recovery under Section 226 cannot be initiated without a prior declaration under Section 201. It found that Section 201 did not prima facie apply in the present case because the department had issued an intimation under Section 200A based on discrepancies in the TDS statements; the petitioner failed to respond to the intimation and did not meet the demand. Consequently the Assessing Officer treated the intimation as a formal notice of demand and proceeded under Section 226(3) to direct the bank to pay the outstanding liability. The Court therefore rejected the submission that recovery under Section 226(3) was impermissible for want of a declaration under Section 201, observing that the recovery action is contingent on the subsistence of the demand under Section 200A. [Paras 5, 6, 8]

On the material before the Court, Section 201 was not attracted and the Assessing Officer was entitled to initiate recovery under Section 226(3) after the petitioner failed to respond to the Section 200A intimation.

Final Conclusion: Petition dismissed for want of merit; petitioner left free to challenge the intimation of demand under Sub Section (1) of Section 200A by filing the statutory appeal before the Commissioner (Appeals).

Provisional attachment - formation of opinion - doctrine of proportionality - tangible material - prior approval - non-application of mind - borrowed satisfaction - no supplementation of reasons - injunctive direction restraining overseas payments - liberty to obtain overdraft against fixed deposits - expeditious completion of assessment proceedings

Provisional attachment - formation of opinion - doctrine of proportionality - tangible material - borrowed satisfaction - Validity of the provisional attachment order under Section 281B of the Income tax Act in respect of the petitioner's fixed deposits. - HELD THAT: - The provisional attachment order dated 11.08.2022 was quashed because the assessing authority failed to record a valid formation of opinion that attachment was necessary to protect the revenue. The order merely stated that large additions were likely and attached the deposits without articulating why, on tangible material, the petitioner was likely to defeat recovery or that attachment was necessary rather than merely expedient. The court applied the principles in Radha Krishan Industries (as followed in Indian Minerals) that the power to provisionally attach is draconian and must be exercised only after a reasoned opinion bearing a proximate and live nexus to protecting revenue; proportionality requires a proportion between the nature/extent of attachment and the purpose sought. The impugned order was held to be bald, cryptic, non speaking and based on borrowed satisfaction from investigative findings rather than an independent application of mind, and therefore invalid. [Paras 13, 14, 15, 16, 21]

Impugned provisional attachment order set aside as illegal, arbitrary and contrary to law.

Prior approval - non-application of mind - mechanical approval - Validity of the Principal Commissioner's approval preceding the provisional attachment. - HELD THAT: - The approval dated 11.08.2022 by the Principal Commissioner was held to be non speaking and silent on the necessity for attachment and thus did not satisfy the statutory precondition. The court emphasised that grant of approval is not a mere formality and must reflect independent application of mind; a mechanical or unreasoned approval cannot validate an otherwise improper attachment order. [Paras 17, 21]

Approval set aside insofar as it purported to validate the impugned provisional attachment.

No supplementation of reasons - Whether respondents may supply fresh reasons after the impugned order to justify the provisional attachment. - HELD THAT: - Relying on the Constitution Bench precedent in Mohinder Singh Gill, the court held that validity of a statutory order must be judged by the reasons stated in the order itself and cannot be cured by subsequently advanced grounds or affidavits. Consequently, material asserted by respondents in support of the attachment could not be used to validate the defective order. [Paras 18]

Post hoc supplementation of reasons rejected; impugned order cannot be validated by fresh grounds.

Injunctive direction restraining overseas payments - liberty to obtain overdraft against fixed deposits - expeditious completion of assessment proceedings - Appropriate interim directions after quashing the provisional attachment. - HELD THAT: - Having quashed the attachment, the court nevertheless accepted the revenue's contention of alleged diversion of funds by the petitioner and, in the interest of justice, directed that the petitioner shall not make payments in the form of royalty or otherwise to entities outside India until conclusion of the assessment proceedings, while permitting the petitioner to obtain overdrafts against the subject fixed deposits and to make payments from such overdrafts in accordance with law. The court also directed the respondents to complete draft assessment proceedings for Assessment Years 2019 20, 2020 21 and 2021 22 by 31.03.2023. [Paras 26, 27, 28]

Quash subject to conditions: restraint on overseas payments, liberty to take overdrafts against deposits, and timeline for completion of specified assessments.

Final Conclusion: Writ petition partly allowed: the provisional attachment order and the antecedent approval dated 11.08.2022 were quashed as arbitrary, non speaking and lacking formation of opinion; post hoc reasons cannot validate the order. The quashment is subject to conditions restraining the petitioner from making overseas payments by way of royalty or otherwise (while permitting overdrafts against the fixed deposits) and directing completion of draft assessment proceedings for AYs 2019 20, 2020 21 and 2021 22 by 31.03.2023.

Prior approval of Joint Commissioner under Section 153D for assessments arising from search - approval requiring application of independent mind and not being a mechanical exercise - separate approval for each assessment year under the scheme of Sections 153A-153D - quashing of assessment where approval is vitiated

Prior approval of Joint Commissioner under Section 153D for assessments arising from search - separate approval for each assessment year under the scheme of Sections 153A-153D - Validity and necessity of prior approval by the Joint Commissioner under Section 153D before passing assessment orders in search cases for the specified assessment years. - HELD THAT: - The Court held that Section 153D imposes a pre requisite that no assessment order in cases arising from search under Section 153A can be passed by an Assessing Officer below the rank of Joint Commissioner except with the prior approval of the Joint Commissioner. Read conjointly with Section 153A(1), the statutory scheme contemplates separate notices, separate returns and separate assessments for "each assessment year", and therefore approval must be obtained in respect of each assessment year. The approval is not a mere administrative formality; it must be granted on the basis of material on record and must reflect application of independent mind to the draft assessment order and the material placed before the Approving Authority.

The requirement of prior approval under Section 153D is mandatory and must be given with independent application of mind in respect of each assessment year; mere existence of an approval on the date of assessment does not cure a defective or mechanical process.

Approval requiring application of independent mind and not being a mechanical exercise - quashing of assessment where approval is vitiated - Whether approval granted in a mechanical manner to a large batch of draft assessment orders vitiates the assessments and justifies quashing. - HELD THAT: - On the admitted facts that draft assessment orders in 123 cases were placed before the Approving Authority and approvals for those drafts were recorded on the same day, the Court accepted the Tribunal's conclusion that it was humanly impossible for the Approving Authority to peruse and apply independent mind to the material in respect of each case. Reliance was placed on the principle that the statutory approval operates as an in built safeguard against arbitrary exercise by the Assessing Officer and therefore, where approval is shown to be mechanical without application of mind, the approval is vitiated and the assessments founded on such approval can be quashed. The Court found the Tribunal's finding on this factual matrix to be neither perverse nor contrary to record.

Approvals granted in a demonstrably mechanical manner vitiate the assessment proceedings and justify quashing of the assessment orders.

Quashing of assessment where approval is vitiated - Whether any substantial question of law arises in the appeals to permit interference with the Tribunal's quashing of the assessments. - HELD THAT: - Given the admitted factual position about the manner and timing of approvals (batch approval of 123 draft assessment orders on the same day), the Court held that questions of law attacking the Assessing Officer's factual findings could not be entertained in this second appeal. On the limited point of law concerning the validity of approval, the Tribunal's conclusion that the approval was mechanical was upheld as not giving rise to a substantial question of law warranting interference.

No substantial question of law arises for interference with the Tribunal's order; the appeals are dismissed.

Final Conclusion: The High Court dismissed the Revenue appeals, upholding the Tribunal's quashing of the assessments for AYs 2013-14, 2015-16 and 2016-17 on the ground that the prior approvals under Section 153D were granted mechanically without independent application of mind and were therefore vitiated.

Jurisdiction to reopen assessment under Section 147/148 of the Income Tax Act - deemed escapement of income by reason of non-filing of return - tax residency certificate (TRC) not conclusive for grant of DTAA benefits - benefit under Article 13 of the DTAA (capital gains) - remittal to the Assessing Officer for determination and speaking order - personal hearing and liberty to file written submissions

Jurisdiction to reopen assessment under Section 147/148 of the Income Tax Act - deemed escapement of income by reason of non-filing of return - Scope of the Assessing Officer's jurisdiction to initiate reassessment where the assessee has not filed a return - HELD THAT: - The Court noted that there was no dispute that the petitioner had not filed its return for AY 2016-2017 and observed that objections raised by the petitioner in respect of the proposed reassessment can be considered by the Assessing Officer. While the revenue relied on the unamended Explanation 2 to Section 147 and contended that deemed escapement arises on non-filing, the Court did not finally adjudicate the correctness of reopening but remitted the matter to the Assessing Officer to determine whether this is a fit case for exercising jurisdiction under Section 147/148, having regard to the objections articulated in the petition. The Court directed the Assessing Officer to decide the jurisdictional question and record reasons in a speaking order. [Paras 8, 9, 11]

Matter remitted to the Assessing Officer to determine, by a speaking order, whether reassessment proceedings should be initiated in view of non-filing of return and the objections raised by the petitioner; the Assessing Officer to afford opportunity of personal hearing and consider written submissions.

Tax residency certificate (TRC) not conclusive for grant of DTAA benefits - benefit under Article 13 of the DTAA (capital gains) - personal hearing and liberty to file written submissions - Entitlement to DTAA relief under Article 13 and the evidentiary value of a Tax Residency Certificate (TRC) - HELD THAT: - The petitioner asserted entitlement to benefit under Article 13 of the India-Mauritius DTAA and relied upon a TRC. The Court observed that the question whether the petitioner is entitled to DTAA benefits and whether the TRC suffices is a facet that requires consideration by the Assessing Officer. The Court further recorded that the AO's earlier observations treating the TRC as not conclusive were tentative. Accordingly, the Court remitted the issue to the Assessing Officer to examine the claim to DTAA relief, to evaluate the TRC and related contentions, and to decide the matter on merits after hearing the petitioner and allowing written submissions. The AO was directed to pass a speaking order dealing with these aspects. [Paras 6, 10, 11, 12]

Claim to DTAA relief and the sufficiency of the TRC remitted to the Assessing Officer for fresh consideration on merits, with personal hearing, opportunity to file written submissions, and a speaking order.

Final Conclusion: Writ petition disposed by remitting the matter to the Assessing Officer to determine (i) whether reassessment under Section 147/148 should be initiated in view of non-filing and the objections raised, and (ii) the petitioner's entitlement to DTAA relief in light of the TRC; the AO must grant personal hearing, allow written submissions, pass speaking orders on jurisdiction and merits, and, if adverse, the order will not be given effect to for four weeks from service.

Section 119(2)(b) of the Income Tax Act - condonation of delay - genuine hardship - Section 80 IB(10) deduction - substantial justice versus technicality

Section 119(2)(b) of the Income Tax Act - condonation of delay - genuine hardship - Section 80 IB(10) deduction - substantial justice versus technicality - Whether the delay of 365 days in filing the return for AY 2011-12 should be condoned under Section 119(2)(b) so as to enable consideration of the petitioner's claim under Section 80 IB(10). - HELD THAT: - The Court examined the affidavit of the petitioner's income tax consultant, which explained the consultant's prolonged family medical exigency and which was neither disputed nor controverted by the respondent. Applying the established principle that powers under Section 119(2)(b) are to be exercised liberally to prevent genuine hardship and to secure substantial justice, the Court held that technical time-bars should not defeat a meritorious claim where delay is neither deliberate nor shown to be due to mala fides. The Court considered precedents emphasising a pragmatic, justice-oriented approach and noted that similar deductions for the same project were allowed for other years. On the facts, the consultant's affidavit and the surrounding circumstances furnished sufficient cause and constituted genuine hardship; the omission was not shown to be an act of culpable negligence or deliberate default. The Court therefore concluded that refusal to condone the delay would cause substantial injustice to the petitioner. The Court expressly did not decide the merits of the Section 80 IB(10) claim but directed that the tax authorities and the DTVSV authorities proceed as if the return had been filed in time and consider the claim on merits. [Paras 21, 22, 23]

Impugned order dated 7th May 2021 rejecting the condonation application is set aside; authorities directed to consider the petitioner's claim for deduction under Section 80 IB(10) for AY 2011-12 as if the return had been filed in time and to amend DTVSV Form 3 accordingly.

Final Conclusion: Writ petition allowed: CBDT's order refusing condonation under Section 119(2)(b) is set aside; tax authorities to consider the Section 80 IB(10) claim for AY 2011-12 on merits as if the return had been filed in time, and the DTVSV authorities to amend Form 3 in accordance with this direction.

Error apparent on the face of the record - review of judicial order - revival and recall of order - restoration of appeal - tax effect threshold under CBDT Circular No.3/2018 - consideration of review application in absence of respondent

Tax effect threshold under CBDT Circular No.3/2018 - error apparent on the face of the record - review of judicial order - Whether the order dismissing the Tax Appeal as not pressed on the ground of low tax effect in light of the CBDT circular could be reviewed on the ground that the tax effect was in fact higher than recorded, constituting an error apparent on the face of the record. - HELD THAT: - The court noted that the Tax Appeal had been dismissed as not pressed because the tax effect was recorded as below the threshold in the CBDT Circular No.3/2018. Subsequent examination showed the actual tax effect to be materially higher than the figure on which the dismissal was based. This factual discrepancy meant that disposal of the appeal did not fall within the ambit of the CBDT circular. The court held that such a misrecording of the tax effect resulting in disposal under the circular amounted to an error apparent on the face of the record, which justified review of the earlier order. The court further observed that, given the nature of the order under review, the review application could be taken up even in the absence of the respondent. [Paras 2, 5, 6]

Order dated 17.7.2018 revived and recalled; review allowed on the ground of error apparent arising from incorrect tax-effect figure.

Revival and recall of order - restoration of appeal - consideration of review application in absence of respondent - Whether the Tax Appeal should be restored for fresh adjudication following revival of the earlier order. - HELD THAT: - Having found that the dismissal under the CBDT circular was vitiated by an erroneous tax-effect figure, the court exercised its power to revive and recall the earlier order. The court directed that the Misc. Civil Application stand disposed of accordingly and restored Tax Appeal No. 879 of 2018 to the file, to be listed before the appropriate Bench in accordance with the prevailing roster for further hearing on its merits. [Paras 6, 7]

Tax Appeal No. 879 of 2018 restored to file for listing and further adjudication.

Final Conclusion: The review application was allowed: the earlier order dismissing the appeal as not pressed under the CBDT circular was recalled on the ground of error apparent in the recorded tax effect, and the Tax Appeal was restored for fresh hearing.

Opportunity of being heard under Section 148A(b) - order under Section 148A(d) - notice under Section 148 - remand for fresh consideration

Opportunity of being heard under Section 148A(b) - order under Section 148A(d) - Whether the impugned order under Section 148A(d) could be sustained where there is no material on record showing that the assessee was granted the opportunity of being heard as required by Section 148A(b). - HELD THAT: - The impugned order records that an opportunity of being heard under Section 148A(b) was provided, but the respondents' counsel could not confirm that such an opportunity was actually granted and no material was placed on record to demonstrate compliance with the mandatory requirement of Section 148A(b). Given that grant of an opportunity to the assessee under Section 148A(b) is mandatory before passing an order under Section 148A(d), the absence of evidence of such hearing vitiates the impugned order. For that reason the High Court set aside the order under Section 148A(d) and remanded the matter for fresh consideration after affording the assessee the statutory opportunity to be heard.

Impugned order under Section 148A(d) set aside and matter remanded for fresh consideration after affording the opportunity of hearing mandated by Section 148A(b).

Notice under Section 148 - remand for fresh consideration - Whether the notice issued under Section 148 consequential to the impugned order should be sustained in the absence of lawful exercise of Section 148A(d). - HELD THAT: - The notice under Section 148 was issued pursuant to the order under Section 148A(d). Since that order has been set aside for failure to show compliance with the mandatory hearing requirement, the consequential notice under Section 148 must also be set aside. The Court directed that the respondent reconsider the matter afresh after giving the assessee the hearing required by law and then decide on issuance of any notice under Section 148.

Notice under Section 148 set aside as consequential to the quashed order; respondent directed to reconsider after providing the statutory hearing.

Final Conclusion: Order under Section 148A(d) dated 07.04.2022 and the consequential notice under Section 148 are set aside; the matter is remitted to the assessing authority to decide afresh after affording the petitioner the opportunity of hearing in accordance with law, and the petitioner was directed to appear on the fixed date for that purpose.

Reopening of assessment under Section 147 of the Income Tax Act - estimation of income on bank transactions as commission income - addition of undisclosed income by applying a percentage to bank credit entries - validity of assessment proceedings reopened on independent information

Reopening of assessment under Section 147 of the Income Tax Act - validity of assessment proceedings reopened on independent information - Legality of reopening assessment proceedings which led to reassessment proceedings. - HELD THAT: - The Tribunal examined whether the reassessment initiated by issuance of notice under Section 148/147 was valid. The reopening was effected after the assessing officer received information from independent sources regarding unexplained receipts in the assessee's bank account. The Tribunal found no infirmity in the reopening, holding that the reassessment was based on credible information and therefore in accordance with law. The contention challenging the reopening was dismissed on these factual and legal grounds. [Paras 6]

Reopening of assessment proceedings held valid and in accordance with law; Grounds 1 and 2 dismissed.

Estimation of income on bank transactions as commission income - addition of undisclosed income by applying a percentage to bank credit entries - Sustenance of addition of Rs.3,00,000 as commission income computed @0.5% of bank credit entries of Rs.6,00,00,000. - HELD THAT: - The assessing officer treated the inflows and outflows in the assessee's bank account as not arising from genuine trading activity but as transactions undertaken to earn commission. On that factual basis the AO estimated commission income at 0.5% of total bank credits and made the addition, which was confirmed by the CIT(A). The Tribunal, after considering the facts and the reasoning of the lower authorities, found no infirmity in confirming the addition. The Tribunal emphasised that this conclusion rests on the particular facts of the case and should not be treated as a general precedent for other cases. [Paras 6]

Addition of commission income confirmed; Grounds 3 and 4 dismissed.

Final Conclusion: The appeal is dismissed: reassessment was validly reopened on independent information and the addition of commission income computed @0.5% of bank credits is sustained on the facts of the case.

Revisional jurisdiction under section 263 - Twin conditions for exercise of revisional powers (order erroneous and prejudicial to revenue) - Deduction under section 80G for donations including CSR contributions - Explanation 2 to section 37-treatment of CSR expenditure for business deduction - Requirement of enquiry/verification before invoking section 263 - Plausable view of the Assessing Officer

Deduction under section 80G for donations including CSR contributions - Explanation 2 to section 37-treatment of CSR expenditure for business deduction - Plausable view of the Assessing Officer - Allowability of deduction claimed under section 80G in respect of CSR contributions and correctness of PCIT's view that such claim must be disallowed by importing Explanation 2 to section 37. - HELD THAT: - The Tribunal found that Explanation 2 to section 37(1), which clarifies that CSR-related expenditure is not an allowable business expenditure under section 37, applies only for computing business income and does not extinguish or override express deductions available under Chapter VI (section 80G). The assessee had placed on record the donee's registration and approvals and had itself added back the CSR expenditure in the computation of business income while separately claiming the permissible section 80G deduction (50% of qualifying donation). Where the Assessing Officer examined the claim, raised specific queries in the questionnaire and adopted a view accepting the deduction, that constituted a plausible view. Since no provision in section 80G (other than two expressly specified funds) bars CSR donations generally, and given the documentary support, the PCIT's reliance on Explanation 2 to import a bar on section 80G was legally unsustainable. The Tribunal therefore held that the PCIT failed to show that the AO's order was erroneous and prejudicial to revenue on this point. [Paras 4, 9]

Deduction claimed under section 80G in respect of CSR contributions is allowable; the PCIT's disallowance based on Explanation 2 to section 37 is not tenable and the AO's acceptance amounted to a plausible view.

Deduction under section 80G for donations including CSR contributions - Requirement of enquiry/verification before invoking section 263 - Revisional jurisdiction under section 263 - Validity of invocation of section 263 in relation to a claimed donation of Rs. 40,000 (50% claimed under section 80G) to Ramakrishna Mission where PCIT observed lack of supporting evidence. - HELD THAT: - The Tribunal observed that the assessee had furnished payment vouchers, acknowledgement receipts from the donee, the donee's registration/exemption certificates and related correspondence in the Paper Book. The PCIT's assertion that veracity could not be established was not borne out on the record. Given that the AO had before him the documents and had completed assessment accepting the claim, the PCIT did not demonstrate that the AO's order was passed without application of mind or was unsustainable in law. In absence of inquiry/verification establishing error, the exercise of revisional jurisdiction was unjustified. [Paras 4, 9]

PCIT's invocation of revisional jurisdiction in respect of the donation to Ramakrishna Mission was unwarranted; the AO's acceptance was a sustainable view and not erroneous or prejudicial to revenue.

Final Conclusion: The revisionary order passed by the Pr. CIT under section 263 for A.Y. 2017-18 is quashed; the appeal is allowed and the PCIT has not shown that the AO's order was erroneous or prejudicial to the revenue.

Unexplained credit under section 68 - unexplained money under section 69A - power of the Commissioner (Appeals) under section 250 and section 251(1)(a) - onus of proof in respect of bank credits and requirement to verify bank records under section 133(6)

Unexplained credit under section 68 - unexplained money under section 69A - power of the Commissioner (Appeals) under section 250 and section 251(1)(a) - Whether the Commissioner (Appeals) was competent to treat and confirm an addition framed as "unexplained credit" by the Assessing Officer under a different statutory head (section 69A) without giving specific notice or exercising a power conferred by law to change the provision. - HELD THAT: - The Tribunal found that the Assessing Officer's order referred to the bank entries as "unexplained credit", a concept attributable to section 68, whereas the CIT(A) treated the same addition as "unexplained money" under section 69A. The law does not confer on the CIT(A) an independent power to alter the statutory provision under which an item was assessed without giving specific notice and without following the inquiry or reporting processes envisaged by the statute. Under section 250 the CIT(A) may make further inquiry or direct the Assessing Officer to inquire, and under section 251(1)(a) he may confirm, reduce, enhance or annul the assessment; these powers do not include re-casting the statutory basis of an addition made by the Assessing Officer. Consequently, the CIT(A)'s confirmation of the addition under section 69A in place of the provision effectively invoked by the Assessing Officer was beyond permissible exercise of appellate powers and unsustainable. [Paras 7]

The confirmation of the addition under section 69A by the CIT(A), changing the provision from that invoked by the Assessing Officer, was impermissible and liable to be set aside.

Onus of proof in respect of bank credits and requirement to verify bank records under section 133(6) - unexplained credit under section 68 - Whether the addition of Rs.6,00,000 as unexplained credit in the bank account was justified where the assessee produced a notarised confirmation from her husband and the authorities did not obtain bank details under section 133(6). - HELD THAT: - The Tribunal noted that the Assessing Officer made the addition after observing credited amounts in the bank statement but did not obtain corroborative details from the bank under section 133(6). The assessee produced a duly notarised affidavit from her husband confirming the entries. Given the confirmation and the failure of the revenue authorities to seek bank particulars or further verify the nature of the credits, the assessee discharged the onus regarding the disputed credits. In these circumstances the addition could not be sustained. [Paras 8]

The addition of Rs.6,00,000 as unexplained credit is deleted as the assessee discharged the onus and the revenue failed to verify bank records.

Final Conclusion: The appeal is allowed: the CIT(A)'s confirmation of the addition under section 69A by recharacterising an "unexplained credit" without jurisdictional basis is unsustainable, and on facts the addition of Rs.6,00,000 is deleted as the assessee discharged the onus and the revenue did not verify bank records.

Deductibility of interest income under section 80P(2)(a)(i) of the Income-tax Act - Netting of administrative and proportionate expenses against interest income under sections 56 and 57 - Remand to Assessing Officer for quantification of proportionate expenditure - Computation of limitation period during COVID-19 (exclusion of period 15.03.2020 to 02.10.2021)

Computation of limitation period during COVID-19 (exclusion of period 15.03.2020 to 02.10.2021) - Delay in filing the appeal by the assessee - HELD THAT: - The Tribunal applied the directions of the Hon'ble Supreme Court in M.A. No. 665 of 2021 in SMW(C) No. 3 of 2020, which excluded the period from 15.03.2020 to 02.10.2021 for computing limitation and provided uniform 90 days thereafter where limitation expired in that interval. Applying that exclusion, the Registry's notation of a 513-day delay did not render the appeal time-barred and the appeal was treated as filed within time. [Paras 2]

There is no delay in filing the appeal; the appeal is maintainable.

Deductibility of interest income under section 80P(2)(a)(i) of the Income-tax Act - Whether interest income received from deposits in nationalised banks is deductible under section 80P(2)(a)(i) - HELD THAT: - Following a coordinate-bench decision of the Tribunal in the assessee's own case and the view of the Gujarat High Court in State Bank of India v. CIT, the Tribunal held that interest earned by depositing surplus funds with nationalised banks is not attributable to the business carried on by the society and therefore is not eligible for deduction under section 80P(2)(a)(i). The assessee's claim for deduction of such interest under section 80P was therefore rejected. [Paras 3, 4]

Interest income from nationalised banks is not deductible under section 80P(2)(a)(i); ground no. 1 is dismissed.

Netting of administrative and proportionate expenses against interest income under sections 56 and 57 - Remand to Assessing Officer for quantification of proportionate expenditure - Entitlement to deduction of proportionate expenses relating to interest income and the course of action - HELD THAT: - Relying on the Karnataka High Court decision in Totgars Co-operative Sale Society Ltd. v. ITO, the Tribunal accepted that where interest is taxed under 'Income from other sources', the net interest income (interest income reduced by administrative or proportionate expenses incurred in mobilising the funds) is the proper taxable amount. The Tribunal did not quantify such expenses but held that the Assessing Officer must examine the expenditure incurred in mobilising the funds placed on deposit and compute the permissible deduction. Accordingly the matter was remitted to the Assessing Officer for determination after giving the assessee an opportunity. [Paras 3, 4]

Assessee is entitled to deduction of proportionate expenditure against interest income; issue remitted to the Assessing Officer for quantification and appropriate order.

Final Conclusion: The appeal is partly allowed: the plea for deduction under section 80P in respect of interest from nationalised banks is rejected, while the claim for deduction of proportionate expenses against interest income is accepted in principle and remitted to the Assessing Officer for quantification; the appeal was held to be filed within time after applying the COVID-19 exclusion of limitation.

Revisional jurisdiction under Section 263 - erroneous and prejudicial to the interest of revenue - deduction under Section 54B - land used for agricultural purposes in the two years preceding transfer - burden of proof on assessee to establish eligibility for exemption - remand for fresh inquiry and de-novo assessment

Revisional jurisdiction under Section 263 - erroneous and prejudicial to the interest of revenue - Validity of the Principal Commissioner's exercise of revisional jurisdiction under Section 263 in setting aside the assessment order. - HELD THAT: - The Tribunal upheld the PCIT's conclusion that the assessment order under section 143(3) was rendered without making necessary inquiries or verifications regarding the substantial claim of deduction under Section 54B. The assessing officer's order was cryptic, contained no examination of whether the land was used for agricultural purposes in the two years preceding the transfer, and accepted the deduction without supporting evidence. Reliance was placed on authoritative decisions that sanction revision where an assessment is made without enquiry or verification. In these circumstances the PCIT was justified in holding the assessment to be erroneous and prejudicial to revenue and in setting it aside under Section 263. [Paras 6, 7, 10]

PCIT rightly invoked Section 263; the assessment order was erroneous and prejudicial to revenue and its revision by PCIT is sustained.

Deduction under Section 54B - land used for agricultural purposes in the two years preceding transfer - burden of proof on assessee to establish eligibility for exemption - remand for fresh inquiry and de-novo assessment - Whether the claim of deduction under Section 54B was properly allowed and whether the matter requires fresh consideration. - HELD THAT: - The Tribunal found that the assessee failed to produce adequate evidence showing the land was used for agricultural purposes in the two years prior to transfer; submitted documents were insufficient (form showing land as fallow, self-serving affidavit, no agreement or evidence of agricultural expenditure or income). Section 54B is inapplicable where the land was not used for agricultural purposes in the prescribed period and the assessee bears the burden to prove eligibility. Given the lack of enquiry by the AO, the matter was remitted: the Tribunal endorsed the PCIT's direction that the AO must conduct requisite inquiries, verify documents, afford opportunity of hearing and pass a fresh assessment in accordance with law. [Paras 6]

Allowance of deduction under Section 54B was not sustained on record; matter remitted to the Assessing Officer for fresh inquiry and de-novo assessment with opportunity to the assessee.

Final Conclusion: The appeal is dismissed; the PCIT's revision under Section 263 is upheld and the assessment order is set aside with a direction to the Assessing Officer to make requisite inquiries, verify eligibility for deduction under Section 54B and to pass a fresh assessment after affording the assessee adequate opportunity.

Deductibility of interest income under section 80P(2)(a)(i) - Deductibility of interest income under section 80P(2)(d) for cooperative societies - Scope of revision under section 263: assessment order erroneous and prejudicial to the interests of revenue - Effect of insertion of section 80P(4) on eligibility of cooperative societies for deduction - Recognition of cooperative society as per section 2(19) for eligibility under section 80P

Deductibility of interest income under section 80P(2)(a)(i) - Scope of revision under section 263: assessment order erroneous and prejudicial to the interests of revenue - Assessees entitled to deduction under section 80P(2)(a)(i) in respect of interest income and corresponding invocation of section 263 cannot be sustained. - HELD THAT: - The Tribunal examined earlier precedents of its Pune Benches which had allowed deduction under section 80P(2)(a)(i) on interest income, noting reliance on the view of the Hon'ble Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. The Tribunal found no contrary binding decision of the jurisdictional High Court that would displace that view. In that factual and legal backdrop the Tribunal concluded that the Principal Commissioner's exercise of powers under section 263 to treat the AO's allowance of deduction as resulting in an erroneous and prejudicial assessment was not sustainable. The Tribunal therefore followed its consistent earlier decisions and allowed the claims of deduction, setting aside the revision orders. [Paras 4, 8]

Invocation of section 263 held unsustainable insofar as denial of deduction under section 80P(2)(a)(i); appeals allowed on this ground.

Deductibility of interest income under section 80P(2)(d) for cooperative societies - Effect of insertion of section 80P(4) on eligibility of cooperative societies for deduction - Recognition of cooperative society as per section 2(19) for eligibility under section 80P - Co-operative credit societies providing credit facilities to members are eligible for deduction under section 80P(2)(d) in respect of interest on investments/deposits with co operative banks; the section 80P(4) exclusion of co-operative banks does not negate a co operative society's entitlement under section 80P(2)(d). - HELD THAT: - The Tribunal observed that the assessees before it are cooperative credit societies engaged in providing credit facilities to members and are registered as co operative societies as defined. While section 80P(4) excludes certain cooperative banks from claiming deduction, that proviso does not strip a registered cooperative society of its entitlement under section 80P(2)(d) to claim deduction on interest income arising from investments/deposits with a cooperative bank. The Tribunal relied on consistent Pune Bench precedents which reached the same conclusion and held that the Principal Commissioner's revision under section 263, founded solely on disallowance of such deduction, could not be sustained. [Paras 5, 6, 7, 8]

Assessees entitled to deduction under section 80P(2)(d) for interest on investments/deposits with cooperative banks; revision under section 263 set aside on this ground.

Final Conclusion: The Tribunal allowed all appeals for A.Y.2017-18, holding that the impugned section 263 orders disallowing deduction under sections 80P(2)(a)(i) and 80P(2)(d) were not sustainable and therefore overturning the revision orders.

Application of section 68 regarding share capital and share premium (identity, creditworthiness and genuineness) - onus of proof on assessee to establish identity, creditworthiness and genuineness of share subscribers - remand report under Rule 46A and its evidentiary value - distinguishing precedent reliance and factual comparators in additions under section 68 - share premium as a commercial decision of board of directors not determinative under section 68

Application of section 68 regarding share capital and share premium (identity, creditworthiness and genuineness) - onus of proof on assessee to establish identity, creditworthiness and genuineness of share subscribers - remand report under Rule 46A and its evidentiary value - Deletion of addition of Rs.1,05,00,000/- made under section 68 in respect of share capital and share premium received during the year - HELD THAT: - The Assessing Officer had added the sum treating the receipts as unexplained credits under section 68, relying on a coordinate Bench decision and noting that investor companies were in initial years and mainly investment entities. The assessee, however, furnished detailed documents for each investor - ITR acknowledgements, audited accounts, bank statements, share application forms, allotment advices, board resolutions and explanations as to source of funds - and the Assessing Officer, on remand under Rule 46A, verified these particulars. The remand report records that investor companies were PAN holders, filed returns, maintained audited books, made payments through banking channels (no cash deposits found), were registered with ROC, had authorised shares and adequate funds, and that the transactions and credits including premium were found in order with no deficiency in supporting evidence. The Tribunal held that these verified facts establish that the assessee discharged the primary onus cast on it to prove identity, creditworthiness and genuineness of the subscribers; consequently the CIT(A)'s confirmation of the addition - which rested on a general theory of shell companies and on reliance on Bisakha Sales (distinguished on facts and procedure) - was erroneous. The Tribunal further noted authorities affirming that section 68 requires proof of identity, genuineness and creditworthiness and that share premium is a commercial decision of the board; in the absence of any material showing fabrication or contradiction in the proofs produced, the addition could not be sustained. Having regard to the remand findings and the documentary evidence, the addition of Rs.1,05,00,000/- was reversed. [Paras 9, 10, 11, 12, 13]

The addition of Rs.1,05,00,000/- made under section 68 in respect of share capital and share premium is deleted and the appeal is allowed.

Final Conclusion: On the facts and verified documentary evidence (including the AO's remand report), the Tribunal finds that the assessee discharged the primary onus to prove identity, creditworthiness and genuineness of the shareholders; therefore the addition under section 68 of Rs.1,05,00,000/- for AY 2012-13 is deleted and the appeal is allowed.

Joint Hindu family property - ancestral nucleus - burden of proof as to joint family property - coparcenary share - will and testament - self-acquired property bequeathed remains self-acquired - benami transaction - Prohibition of Benami Property Transactions Act, 1988 - lis pendens - partial partition / non-joinder of parties

Joint Hindu family property - ancestral nucleus - burden of proof as to joint family property - Character of the suit properties - whether they are joint Hindu family properties or self-acquired properties of late P.L. Ramanathan @ P.L. Meenatchi Sundaram - HELD THAT: - The court examined documentary and oral evidence submitted by the parties and applied the settled legal tests: there is no presumption that property is joint; the claimant must prove existence of an ancestral nucleus or that the property was acquired from joint family funds. The evidence (including partnership accounts, income tax entries, memorandum of confirmation and admissions) establishes that item Nos.1 and 2 were purchased from income derived from partnership business by L.P.L. Palaniappa Chettiar and P.L. Palaniappa Chettiar and not out of an ancestral nucleus. The Wills executed by L.P.L. Palaniappa Chettiar and by P.L. Ramanathan describe bequests of his property but do not disclose ancestral nucleus; where self acquired property is bequeathed the recipient takes it as self acquired. Applying these principles, the court concluded that the suit properties are self acquired and absolute properties of late P.L. Ramanathan @ P.L. Meenatchi Sundaram (and to the extent bequeathed, became self acquired property in the hands of the legatee). [Paras 44, 45, 48, 50, 51]

Item Nos.1 and 2 (and the claimed suit properties) are self acquired properties of late P.L. Ramanathan @ P.L. Meenatchi Sundaram (and not joint family properties); the plaintiff is not entitled to partition as a coparcener.

Benami transaction - Prohibition of Benami Property Transactions Act, 1988 - Validity of the claim by defendants 5-7 to a 3/8 share in Item No.1 on the basis that the property was held benami in the name of P.L. Ramanathan - HELD THAT: - The court considered the applicability of Sections 3 and 4 of the Prohibition of Benami Property Transactions Act, 1988 to transactions predating the Act. Following authority, the court held that while Section 3 (prohibiting benami transactions) is not retrospective, Section 4 (which bars suits or claims in respect of property held benami) reaches past transactions and disables real owners from enforcing rights. Though there was evidence that Item No.1 was purchased by L.P.L. Palaniappa Chettiar and P.L. Palaniappa Chettiar and held in the name of P.L. Ramanathan, the defendants 5-7's claim to 3/8 is barred by the statutory prohibition on enforcing rights in benami property. Consequently their partition claim/counterclaim in respect of that share fails. [Paras 33, 34, 35, 36]

Defendants 5-7's claim to a 3/8 share in Item No.1 is barred by the Prohibition of Benami Property Transactions Act, 1988 and is not maintainable.

Partial partition / non-joinder of parties - lis pendens - Effect of non joinder and partial inclusion of properties (including inclusion of Item No.5 in amended plaint) and whether suit is bad for partial partition or non joinder - HELD THAT: - The court found that Item No.5 was improperly restored in the amended plaint without permission and hence the plaintiff cannot claim relief in respect of Item No.5. As to partial partition and non joinder, the court observed absence of evidence that several other properties belonged to the joint family and found no material to sustain partition claims for Item Nos.3-5; those claims are dismissed. Regarding non joinder of certain legal heirs of L.P. Palaniappa Chettiar, the court held that because defendants 5-7's claim is in any event barred by the Benami statute and because the sale to the 8th and subsequent dealings arose pendente lite (lis pendens), the non joinder does not render the suit hopelessly defective. [Paras 25, 26, 55, 56]

Claims in respect of Item Nos.3-5 are dismissed for lack of proof; Item No.5 cannot be relied on as it was included in the amended plaint without permission; non joinder is not fatal in the circumstances described.

Will and testament - self-acquired property bequeathed remains self-acquired - Effect of the testator's wills (Ex.D11 and Ex.P4/Ex.D16) on the rights of the plaintiff and others - HELD THAT: - The court noted that Ex.D11 (will of L.P.L. Palaniappa Chettiar) and Ex.P4/Ex.D16 (will of P.L. Ramanathan) were probated and are not disputed. Ex.D11 bequeathed the testator's self acquired properties to his sons and heirs; where self acquired property is bequeathed the donee takes it as self acquired. Ex.P4 bequeathed the father's properties to his son absolutely subject to specified payments to daughters and other conditions. Given that the properties were self acquired in the hands of the testators, the plaintiff's claim to coparcenary rights under a theory of ancestral property fails; the plaintiff's remedy, if any, lies in enforcing obligations under the will, but not in partition as a coparcener. [Paras 46, 47, 48, 50, 60]

The wills operate to make the properties self acquired in the hands of legatees; plaintiff has no coparcenary right to partition but may rely on executory obligations under the will which do not convert the property into ancestral property.

Possession - Court Fees Act - Section 37(2) - Whether the plaintiff was in joint possession of the suit properties and whether court fee under Section 37(2) is maintainable - HELD THAT: - Evidence showed the plaintiff resides in the U.S.A. and is not in physical possession of the suit properties; Item No.2 has been developed into multiple residential units. The plaintiff prosecuted the suit through a power of attorney. There is no proof of joint possession; accordingly the claim of payment of Court fee under Section 37(2) as based on joint possession is incorrect. [Paras 53]

Plaintiff is not in possession of the suit properties; court fee claimed under Section 37(2) is not maintainable.

Lis pendens - Effect of sale to the 8th and 9th defendants and whether the 9th defendant is protected as a pendente lite purchaser - HELD THAT: - Item No.2 was sold by persons claiming title under Ex.D11 during pendency of the suit; the purchase and subsequent transactions therefore attract the doctrine of lis pendens. Although the 9th defendant is a purchaser for value and has caused development and sale of residential units, the right of a pendente lite purchaser is subject to the rights of the owner and the sale during pendency is hit by lis pendens. The 9th defendant's rights, accordingly, are subject to the outcome of the suit; the court noted the 9th defendant's plea that if partition were decreed an equitable allotment could be worked out, but the sale is affected by lis pendens. [Paras 11, 54]

Sale to the 8th and subsequent dealings and the 9th defendant's purchase are subject to lis pendens; the pendente lite purchaser's rights are subordinate to the rights of the owner under the pending suit.

Business and account of profits - Whether there was a family business at Kumbakonam (Palaniappan Bankers / Palaniappa Jewellers) and whether first defendant must account for profits - HELD THAT: - Though pleaded, there was no admissible evidence to establish existence or operation of the alleged family businesses at Kumbakonam or any accounting of profits by the first defendant. The court therefore declines to make any finding in favour of the plaintiff on this claim. [Paras 52]

No evidence of the alleged family business or of profits has been proved; claim for account is negatived.

Final Conclusion: Having examined the pleadings, oral and documentary evidence and applicable law, the Court held that the suit properties (notably Item Nos.1 and 2) are self acquired in the hands of late P.L. Ramanathan @ P.L. Meenatchi Sundaram (and as bequeathed, remained self acquired), the plaintiff is not entitled to partition as a coparcener, defendants 5-7's claim to a 3/8 share in Item No.1 is barred by the Prohibition of Benami Property Transactions Act, 1988, claims in respect of Items Nos.3-5 fail for want of proof (Item No.5 was improperly included in the amended plaint), the plaintiff was not in joint possession for court fee purposes, the sale of Item No.2 is affected by lis pendens, and the pleaded family business claim fails for lack of evidence; the suit and the counterclaim of defendants 5-7 are dismissed with parties to bear their own costs.

Provisional assessment under Section 18(1) of the Customs Act - Special Valuation Branch (SVB) investigation - scope of Circular No.5/2016 - streamlining of SVB procedure limited to investigation period - security in the form of bank guarantee for differential duty - Circular No.38/2016 - guidelines on security for provisional assessment (including 100% bank guarantee after estimation) - distinction between investigation by SVB and adjudication/final assessment - power of the proper officer to secure revenue by demanding security

Special Valuation Branch (SVB) investigation - scope of Circular No.5/2016 - streamlining of SVB procedure limited to investigation period - distinction between investigation by SVB and adjudication/final assessment - Whether Circular No.5/2016 prohibits the demand of security in the form of bank guarantees after SVB has submitted its investigative findings and a show-cause notice has been issued - HELD THAT: - The Court held that Circular No.5/2016 is primarily directed to streamline the procedure of investigation by the SVB and to reduce transaction costs during the period of inquiry. Its provisions (personal bond, discontinuance of EDD, limited 5% security for specified defaults and continuation of provisional assessment without security) are intended to govern the stage pending completion of SVB inquiries and receipt of investigative findings. The Circular must be read in its entirety and in light of its heading; it does not purport to govern the post-investigation stage when the SVB's findings have been furnished and the assessing officer must proceed to adjudication. Consequently the protections and limits in Circular No.5/2016 do not extend to the period after the SVB report is submitted and a show-cause notice is issued, because investigation and assessment are distinct stages and the Circular's regime is tied to the investigative stage (paras 22-26). [Paras 22, 23, 24, 25, 26]

Circular No.5/2016 does not bar the authorities from demanding bank guarantees after SVB has submitted its investigative findings and a show cause notice has been issued; its restrictions apply only during the investigative stage.

Provisional assessment under Section 18(1) of the Customs Act - security in the form of bank guarantee for differential duty - Circular No.38/2016 - guidelines on security for provisional assessment (including 100% bank guarantee after estimation) - power of the proper officer to secure revenue by demanding security - Whether the proper officer could lawfully insist on bank guarantees for 100% of the estimated differential duty after the SVB report estimated differential duty - HELD THAT: - The Court recognised that Section 18(1) of the Customs Act vests discretion in the proper officer to require such security as deemed fit for provisional assessment. Circular No.38/2016 provides uniform guidelines for security in provisional assessments and expressly directs that cases referred to SVB be governed by Circular No.5/2016 during investigation; however, sub-clause 6(b)(1) of Circular No.38/2016 contemplates that where the proper officer has estimated differential duty for purposes of provisional assessment, a bank guarantee up to 100% may be obtained (subject to delegated power to reduce). Once the SVB has furnished findings estimating differential duty and the show cause notice is issued, the contingency falls within Section 18(1) read with Circular No.38/2016 and the proper officer may insist upon bank guarantees to secure revenue. The petitioner's past practice or previous non demand of security did not estop the authority from exercising its statutory discretion (paras 21, 28, 31-33, 36). [Paras 28, 31, 32, 33, 36]

After SVB has estimated differential duty and the assessing authority has issued a show cause notice, the proper officer lawfully may insist on bank guarantees (including up to 100% of estimated differential duty) under Section 18(1) read with Circular No.38/2016.

Final Conclusion: Writ petition dismissed. The Court held that Circular No.5/2016 governs the SVB investigative stage and does not preclude authorities from demanding bank guarantees after SVB findings and issuance of show cause notices; accordingly, the respondents were within jurisdiction to insist on bank guarantees (including up to 100% of estimated differential duty) under Section 18(1) of the Customs Act read with Circular No.38/2016, and no direction was issued for return of the bank guarantees.

Direction to decide representation - representation to be decided on merits - judicial supervision of administrative delay - disposal of writ petition

Direction to decide representation - representation to be decided on merits - Direction given to the Directorate General of Foreign Trade to decide the petitioner's representation dated 9 August 2021 within a stipulated period and communicate the decision. - HELD THAT: - The petitioner, while seeking various reliefs, confined its immediate request to obtaining a direction for adjudication of its representation dated 9 August 2021 which had not been decided. The respondents informed the Court that the representation would be decided on its merits in accordance with law within four weeks and the decision would be communicated to the petitioner. The Court recorded this undertaking and disposed of the writ petition, while preserving the petitioner's right to pursue available legal remedies in the event of an adverse decision. [Paras 3, 4]

Respondent No.2 (Directorate General of Foreign Trade) directed to decide the representation dated 9 August 2021 on merits within four weeks and communicate the decision; writ petition disposed.

Final Conclusion: The High Court disposed of the writ petition after recording the respondent's undertaking to decide the petitioner's representation dated 9 August 2021 on merits within four weeks and communicated the decision; the petitioner remains free to pursue statutory or legal remedies if the decision is adverse.

Limitation for filing appeal - computation of statutory limitation - service of order on predecessor entity after amalgamation - restoration of appeal - order-in-original not set aside; grounds to be agitated in appeal

Correction of cause-title - The cause-title is to be amended to reflect the correct name of the petitioner as N.R.Colours Limited. - HELD THAT: - A memo filed by the petitioner pointed out that the petition had incorrectly named the petitioner as N.R.Colours Private Limited whereas the impugned order had been passed against N.R.Colours Limited (the transferee company). Both parties agreed correction was required. The Court accordingly took the memo on file and amended the cause-title to reflect the correct corporate name.

Cause-title amended to show petitioner as N.R.Colours Limited.

Service of order on predecessor entity after amalgamation - computation of statutory limitation - limitation for filing appeal - The period between the date of the original order (served on the erstwhile entity) and the date the petitioner came to notice of that order is to be excluded in computing limitation; the appeal filed on 20.06.2019 was not time-barred. - HELD THAT: - The order-in-original dated 19.07.2012 had been served in the name of the erstwhile entity (N.R.Chemicals Private Limited). The petitioner, the transferee following amalgamation, ceased to exist as the transferor on 06.05.2011 and alleged it became aware of the earlier order only when a detention notice was issued on 12.03.2019. Upon request, a copy of the order-in-original was supplied on 19.06.2019 and the appeal was filed on 20.06.2019. The Court accepted that the intervening period (during which the notice was addressed to the predecessor entity and not the petitioner) should be excluded for computation of limitation and held there was no delay in filing the appeal.

Impugned order rejecting the appeal as barred by limitation is set aside and the appeal is restored to be heard on merits.

Order-in-original not set aside; grounds to be agitated in appeal - The order-in-original is not to be set aside; all grounds remain open for consideration in the first appellate proceedings. - HELD THAT: - Although the impugned appellate order was set aside for being erroneously treated as time-barred, the Court observed that notices had been issued to the assessee in 2010, even prior to amalgamation. On that basis, the Court declined to set aside the order-in-original and left it for the appellant to raise all grounds in the restored appeal before the Commissioner of Customs (Appeals).

Order-in-original retained; petitioner may agitate all grounds in the appeal restored to the first appellate authority.

Restoration of appeal - The appeal is restored to the file of the Commissioner of Customs (Appeals) and directed to be heard on a specified date and disposed within a limited period. - HELD THAT: - To ensure compliance and facilitate disposal on merits, the Court fixed a hearing date before the Commissioner of Customs (Appeals) and directed that the appeal be heard and disposed of within four weeks after the hearing date. The Court also noted and recorded a discrepancy in the petitioner's address in the cause-title vis-a -vis the registered office shown in the scheme of amalgamation and fixed the hearing to ensure procedural compliance.

Petitioner to appear before the Commissioner of Customs (Appeals) on the fixed date; appeal to be disposed within four weeks thereafter.

Final Conclusion: The petition is disposed by amending the cause-title, holding that the intervening period following service of the order on the predecessor entity is excluded for computation of limitation, setting aside the appellate rejection for delay, restoring the appeal for fresh adjudication on merits while leaving the order-in-original intact, and directing a prompt hearing and disposal of the restored appeal.

Penalty under Section 114 of the Customs Act, 1962 - liability of Customs Broker under the Customs Brokers Licensing Regulations, 2013 - Regulations 11(n) and 11(d) of the Customs Brokers Licensing Regulations, 2013 - rejection of declared value under Rule 8(1) of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 - application of Rule 6 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 - confiscation under Section 113 of the Customs Act, 1962

Penalty under Section 114 of the Customs Act, 1962 - Regulations 11(n) and 11(d) of the Customs Brokers Licensing Regulations, 2013 - rejection of declared value under Rule 8(1) of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 - application of Rule 6 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 - Imposition of penalty under Section 114 of the Customs Act, 1962 on the Customs Broker for alleged contravention of Regulations 11(n) and 11(d) of the Customs Brokers Licensing Regulations, 2013 - HELD THAT: - The Tribunal found that the adjudication proceeded on a shaky foundation because the authorities recomputed the export value by adopting Rule 6 after rejecting the FOB under Rule 8(1) without recording justifiable reasons or demonstrating any specific doubts as to the truth or accuracy of the declared value. Section 114 penalises persons who do or omit acts that render goods liable for confiscation under Section 113; however, the order does not disclose any role played by the Customs Broker in fixing or declaring the contract value between exporter and importer. Valuation of goods is dependent on the contract between exporter and importer and is not the domain of a Customs Broker unless the authority shows the broker's active participation in the misdeclaration. Because the adjudication failed to identify or explain the broker's role in the alleged undervaluation and failed to record reasons for rejecting the declared FOB, the imposition of penalty on the broker under Section 114 cannot be sustained. [Paras 6, 7, 9]

Penalty imposed on the appellant Customs Broker under Section 114 is bad in law and is set aside; appeal allowed.

Final Conclusion: The Tribunal allowed the appeal, held that the penalty under Section 114 could not be sustained in the absence of reasons for rejecting the declared FOB and absence of any shown role of the Customs Broker in the undervaluation, and set aside the impugned order.

Presumption of decision not to impose anti-dumping duty by prolonged silence of the Central Government - obligation to record reasons when Central Government decides not to impose anti-dumping duty despite recommendation of the designated authority - remand to the Central Government for decision on the designated authority's recommendation - maintainability of appeal under section 9C against determination relating to existence, degree and effect of dumping - Central Government's power to impose anti-dumping duty within three months of publication of final findings

Presumption of decision not to impose anti-dumping duty by prolonged silence of the Central Government - Central Government's power to impose anti-dumping duty within three months of publication of final findings - Silence of the Central Government beyond the three-month period provided under rule 18 is to be treated as a decision not to impose anti-dumping duty and the matter must be remitted for decision. - HELD THAT: - The Tribunal examined rule 18 of the 1995 Anti Dumping Rules read with section 9A of the Tariff Act and observed that where the designated authority publishes final findings recommending imposition of anti dumping duty, the Central Government may, within three months, impose duty by notification. In the present case final findings were published on 11.01.2021 and no notification or office memorandum was produced. The Tribunal held that prolonged silence by the Central Government may be presumed to amount to a decision not to impose duty and that such silent inaction is equivalent, for practical purposes, to an express office memorandum conveying non imposition. The Tribunal relied on its earlier decisions in Apcotex Industries and Chemical and Petrochemicals Manufacturers Association to support this view and concluded that the recommendation must be returned to the Central Government for taking a decision on the recommendation of the designated authority. [Paras 26, 27, 28]

It is presumed that the Central Government has decided not to impose anti dumping duty by its prolonged silence; the matter is remitted to the Central Government to take a decision on the designated authority's recommendation.

Obligation to record reasons when Central Government decides not to impose anti-dumping duty despite recommendation of the designated authority - When the Central Government forms an opinion not to impose anti dumping duty despite a positive recommendation by the designated authority, it must record reasons for such decision. - HELD THAT: - The Tribunal noted its earlier rulings in Apcotex Industries and Chemical and Petrochemicals in which it had held that the Central Government must record reasons when it declines to impose anti dumping duty notwithstanding a positive recommendation by the designated authority. Applying those precedents, the Tribunal held that the Central Government must record reasons in the present case when taking a decision on the recommendation remitted to it. [Paras 31]

Central Government must record reasons if it decides not to impose anti dumping duty despite a recommendation to the contrary by the designated authority.

Maintainability of appeal under section 9C - An appeal under section 9C is maintainable in the circumstances where the final findings of the designated authority form the basis of challenge and the Central Government's failure to act is perceived as a decision not to impose duty. - HELD THAT: - The respondents contended that appeals under section 9C lie only against an order of determination or review and that the Central Government's notification alone would give cause of action. The Tribunal referred to the statutory scheme under section 9A and the 1995 Rules, and the practice of challenging the designated authority's final findings in appeals. Relying on the Tribunal's earlier decision in Apcotex Industries and related reasoning, the Bench accepted that the present appeal is maintainable where the designated authority's final findings are challenged and the Central Government has not issued a notification in response to those findings. [Paras 29, 30]

The appeal is maintainable and may be entertained in the circumstances of non action by the Central Government following the designated authority's final findings.

Final Conclusion: The appeal is disposed by remitting the matter to the Central Government to take a decision on the designated authority's recommendation in light of the Tribunal's precedents; the Central Government must record reasons if it decides not to impose anti dumping duty. The appeal is otherwise held maintainable and is disposed accordingly.

Presumption of decision by executive from prolonged silence - remand for executive decision on recommendation of designated authority - maintainability of appeal under section 9C of the Customs Tariff Act, 1975 - obligation to record reasons where executive declines to follow designated authority's recommendation - role of designated authority's final findings and Central Government's notification under rule 18 of the 1995 Anti-Dumping Rules

Presumption of decision by executive from prolonged silence - role of designated authority's final findings and Central Government's notification under rule 18 of the 1995 Anti-Dumping Rules - Whether the Central Government's failure to issue a notification within three months of the designated authority's final findings amounts to a decision not to impose anti-dumping duty. - HELD THAT: - The Tribunal held that where the Central Government remains silent for a prolonged period after publication of final findings by the designated authority, a presumption can be drawn that the Central Government has decided not to impose anti-dumping duty. This consequence is rooted in the scheme of section 9A of the Tariff Act read with rule 17 and rule 18 of the 1995 Anti-Dumping Rules, which contemplates submission of final findings by the designated authority and permits the Central Government to impose duty within three months of publication. The Tribunal followed its earlier view in Apcotex Industries and its own decision in Chemical and Petrochemicals Manufacturers Association to conclude that prolonged inaction equates to an effective decision not to impose duty and therefore requires remedial action. [Paras 28, 29]

Presumption arises that the Central Government has decided not to impose anti-dumping duty where no notification is issued within the statutory three-month period; the matter is to be remitted to the Central Government for decision on the designated authority's recommendation.

Maintainability of appeal under section 9C of the Customs Tariff Act, 1975 - Whether the present appeal is maintainable under section 9C in the circumstances of non-issuance of notification by the Central Government. - HELD THAT: - The Tribunal considered the scope of section 9C, which provides an appeal to the Appellate Tribunal against an order of determination or review in respect of existence, degree and effect of dumping. While recognizing that the designated authority makes final findings and the Central Government issues the consequential notification, the Tribunal accepted the view in Apcotex Industries that an appeal is maintainable where the Central Government, by not issuing a notification within the stipulated period, is to be treated as having decided not to impose duty. The Tribunal therefore concluded that the appeal before it is maintainable. [Paras 30, 31]

The appeal is maintainable under section 9C in the circumstances where the Central Government has not issued a notification within the three-month period following the designated authority's final findings.

Obligation to record reasons where executive declines to follow designated authority's recommendation - Whether the Central Government is required to record reasons when it forms an opinion not to impose anti-dumping duty despite a positive recommendation by the designated authority. - HELD THAT: - Relying on the Tribunal's prior decisions in Apcotex Industries and Chemical and Petrochemicals, the Bench held that where the Central Government proceeds to form an opinion not to impose anti-dumping duty despite a recommendation to the contrary by the designated authority, reasons for that decision must be recorded. The obligation to record reasons ensures transparency and enables effective judicial review of the decision to decline the recommendation. [Paras 32]

The Central Government must record reasons when it decides not to impose anti-dumping duty despite the designated authority's recommendation.

Remand for executive decision on recommendation of designated authority - Whether the matter should be remitted to the Central Government for taking a decision on the designated authority's recommendation. - HELD THAT: - Given the presumption that the Central Government has decided not to impose duty by remaining silent, and the requirement that reasons be recorded if the Government declines the recommendation, the Tribunal concluded that the appropriate course is to remit the matter to the Central Government. The remand is for the Central Government to take a decision on the recommendation in light of the Tribunal's precedents and to record reasons if it chooses not to accept the designated authority's recommendation. [Paras 29, 33]

The matter is remitted to the Central Government for decision on the designated authority's recommendation; the appeal is disposed of accordingly.

Final Conclusion: The Tribunal presumed that the Central Government, by prolonged silence beyond the three month period, had decided not to impose anti dumping duty; the appeal is maintainable under section 9C; the Central Government must record reasons if it declines the designated authority's recommendation; and the matter is remitted to the Central Government for taking a decision on the recommendation in accordance with these principles.

Amendment of documents under section 149 of Customs Act, 1962 - Proviso to section 149 - documentary evidence existing at time of export - Discretion of the proper officer in permitting amendments - Non statutory nature of Handbook of Procedures and DGFT declarations - facilitative, not statutory, requirements - Limitations on customs authority in regulating schemes administered by DGFT - Validity and scope of CBEC circulars as guidance for trade facilitation versus statutory mandate

Amendment of documents under section 149 of Customs Act, 1962 - Proviso to section 149 - documentary evidence existing at time of export - Discretion of the proper officer in permitting amendments - Validity and scope of CBEC circulars as guidance for trade facilitation versus statutory mandate - Interpretation of section 149 of the Customs Act, 1962 (including its proviso) and the legal effect of CBEC/DGFT circulars and Handbook of Procedures on the power to permit post export amendment of shipping bills. - HELD THAT: - The Tribunal held that section 149 confers a broad discretion on the proper officer to authorise amendments of documents presented in the customs house, subject to the proviso that amendments to bills of entry or shipping bills after clearance/export may be permitted only on the basis of documentary evidence which existed at the time of clearance/export. That proviso, however, operates as a specific limitation to the general empowerment and is triggered only where an amendment would alter particulars mandated by statute or otherwise disturb the factual record of clearance/export. The Handbook of Procedures and DGFT circulars prescribing ticked declarations ('Y'/'N') are measures of procedural facilitation under the Foreign Trade Policy and do not, by themselves, have the force of law to enlarge the statutory ambit of shipping bill particulars under section 50 or to create a substantive bar to amendment under section 149. CBEC circulars, being administrative guidance intended for trade facilitation, cannot impose restrictions inconsistent with the statute; in the absence of statutory empowerment to enforce rigid time bars, such circulars must be construed in a liberal, facilitative spirit. Consequently, the proviso to section 149 cannot be invoked to automatically deny amendment where the change merely facilitates transmission of data to the licensing authority and does not alter the factual correctness of export particulars; the applicant must, however, be afforded opportunity to address any specific doubt and the proper officer must record reasons if refusing amendment. [Paras 12, 14, 15]

Section 149 permits post export amendment in shipping bills within the statutory constraints of the proviso, but CBEC/DGFT circulars and Handbook of Procedures cannot, without statutory backing, be used to impose a rigid time bar or to preclude amendments that are procedural/facilitative in nature.

Discretion of the proper officer in permitting amendments - Non statutory nature of Handbook of Procedures and DGFT declarations - facilitative, not statutory, requirements - Limitations on customs authority in regulating schemes administered by DGFT - Whether the request of the appellant to substitute 'N' with 'Y' in specified shipping bills should be permitted in the facts of this case. - HELD THAT: - Applying the legal principles above to the present controversy, the Tribunal found that the disputed alteration sought - converting the electronic tick from 'N' to 'Y' - did not change any statutorily mandated particulars of export nor did it impugn the factual correctness of the shipments; the sole consequence of the requested amendment was to enable transmission of shipment data to the DGFT so that the licensing authority could consider reward eligibility under the MEIS. The adjudicating authority's reliance on circulars to deny amendment and its reference to 'attitude' or lack of documentary evidence were held to be an improper gloss on the statutory scheme. In the absence of any material showing the goods were not as declared, and given that the Handbook of Procedures and public notices were intended to facilitate, not to create a statutory disqualification, the Tribunal concluded that amendment should have been permitted. The Tribunal therefore allowed the appeal insofar as it concerned the shipping bills within the jurisdiction of the respondent Commissioner and directed that the entries be altered to enable DGFT processing. [Paras 16, 18, 19]

Appeal allowed in part; the 'N' entries in the specified shipping bills under the respondent Commissioner are to be amended to 'Y' to permit DGFT to consider the exporters' claims.

Final Conclusion: The Tribunal held that while section 149 authorises amendment of documents subject to the proviso, CBEC/DGFT circulars and Handbook of Procedures are facilitative and cannot, absent statutory backing, be invoked to preclude post export amendments that do not alter the factual correctness of export particulars. Applying this principle, the Tribunal directed that the contested 'N' entries in the shipping bills within the respondent Commissioner's jurisdiction be amended to 'Y' to enable DGFT to process eligibility for MEIS.

Exception for women in stringent bail provision under section 212(6) of the Companies Act - scope of court's power to remand to judicial custody - power of the SFIO to arrest in investigation under section 212(8) of the Companies Act - necessity of specific apprehension (flight, witness intimidation, evidence tampering) for remand - non-arrest during investigation as indicium against existence of reason to believe guilt - pre-trial detention versus right to liberty: bail as the rule and not the exception

Exception for women in stringent bail provision under section 212(6) of the Companies Act - pre-trial detention versus right to liberty: bail as the rule and not the exception - Whether the proviso to section 212(6) of the Companies Act permits release of a woman accused on bail notwithstanding the twin conditions in the parent provision. - HELD THAT: - The court held that the proviso to section 212(6) carves out a legislative exception permitting a woman to be released on bail even where the twin conditions in the main limb of the provision are not satisfied. Treating the proviso as nugatory would run counter to legislative intent. The court observed that severity of the offence and other considerations remain relevant to sentence but do not nullify the statutory relaxation afforded to women at the pre-trial stage. The principle that bail is ordinarily the rule and pre-trial detention must not be imposed without reason underpins this conclusion. [Paras 30, 34, 35]

The petitioner, being a woman, is entitled to the benefit of the proviso to section 212(6) and to be considered for regular bail notwithstanding the twin conditions in the parent provision.

Non-arrest during investigation as indicium against existence of reason to believe guilt - necessity of specific apprehension (flight, witness intimidation, evidence tampering) for remand - scope of court's power to remand to judicial custody - Whether remanding the petitioner to judicial custody was justified where she was not arrested during prolonged investigation and there was no allegation of witness tampering, evidence destruction or flight-risk. - HELD THAT: - The court found that the investigating officer had statutory power to arrest under section 212(8) but did not do so during the long investigation, which reasonably indicates absence of material to form belief in the petitioner's guilt. The remand order recorded no application of mind or specific reasons why judicial custody was necessary after six years of liberty. A court's power to order judicial custody at the pre-trial stage must be founded on specific apprehensions such as witness intimidation, tampering or flight-risk; such apprehensions cannot be conjured by the court in the absence of material from the investigating agency. In these circumstances continued pre-trial detention would amount to impermissible pre-trial punishment and would not serve any discernible purpose. [Paras 27, 30, 31, 32, 33]

Remand to judicial custody was not justified; absence of arrest during investigation and lack of specific apprehensions negated justification for continued pre-trial custody.

Pre-trial detention versus right to liberty: bail as the rule and not the exception - necessity of specific apprehension (flight, witness intimidation, evidence tampering) for remand - What relief should be granted and on what conditions, having found the petitioner entitled to bail. - HELD THAT: - Balancing the statutory exception for women and the absence of grounds for custody, the court exercised its discretion to admit the petitioner to regular bail. Appropriate conditions were imposed to address practical concerns: furnishing a personal bond with sureties, providing contact details to the investigating agency, surrendering passport and restraining contact with prosecution witnesses or tampering with evidence. The court clarified that these orders do not express any view on the merits of the pending prosecution. [Paras 35, 36]

The petitioner is admitted to regular bail subject to specified conditions (personal bond with sureties, contact number to SFIO, surrender of passport/travel restrictions, and prohibition on contacting witnesses or tampering with evidence).

Final Conclusion: The petition is allowed: the woman accused is admitted to regular bail on specified conditions as the proviso to section 212(6) applies and there were no specific grounds to justify judicial custody; no opinion is expressed on merits.

Dispensing with calling of a meeting under Section 230(9) of the Companies Act, 2013 - requirement of notice under Section 230(5) of the Companies Act, 2013 - approval of the scheme by the sole secured creditor - power of the Adjudicating Authority/Tribunal to dispense with second motion

Dispensing with calling of a meeting under Section 230(9) of the Companies Act, 2013 - approval of the scheme by the sole secured creditor - Whether, in a case where the sole secured creditor has by affidavit approved the scheme, the Adjudicating Authority was required to direct filing of a second motion notice or whether the meeting could be dispensed with under Section 230(9). - HELD THAT: - The Tribunal noted that the Financial Creditor (Small Industries Development Bank of India) is the sole secured creditor and filed an affidavit stating that it had given its consent/approval to the scheme. Paragraphs 6-8 of that affidavit expressly record placement before the competent authority and the sole secured creditor's consent, and invoke the power in Section 230(9) to dispense with calling of a meeting where creditors holding at least ninety per cent by value agree by affidavit. The Court held that where the condition in Section 230(9) is satisfied (here, 100% of the financial creditor approved the scheme), there was no occasion to direct issuance of notice for a second motion under Section 230(5), and the Tribunal's direction to file a second motion must be set aside. The matter is remitted to the Adjudicating Authority to consider dispensing with the second motion notice in light of the affidavit and Section 230(9).

Direction for filing a second motion is set aside and the Adjudicating Authority is directed to consider dispensing with the second motion notice under Section 230(9) in view of the sole secured creditor's affidavit approving the scheme.

Final Conclusion: Appeal allowed; the impugned direction to file a second motion is set aside and the Adjudicating Authority shall consider dispensation of the second motion notice under Section 230(9) of the Companies Act, 2013 in light of the sole secured creditor's affidavit approving the scheme.

Power to direct further investigation under Regulation 20(6) of the Competition Commission of India (General) Regulations, 2009 - scope of Section 26 of the Competition Act, 2002 (procedure on receipt of information and direction to Director General) - closure of inquiry under Section 26(6) of the Act - voidness of actions taken pursuant to an unauthorized investigatory direction - remittal for fresh consideration on the basis of the original Director General report

Scope of Section 26 of the Competition Act, 2002 (procedure on receipt of information and direction to Director General) - power to direct further investigation under Regulation 20(6) of the Competition Commission of India (General) Regulations, 2009 - voidness of actions taken pursuant to an unauthorized investigatory direction - Whether the Commission was authorised to direct further investigation under Regulation 20(6) after receipt of a Director General report that had found contravention of the Act. - HELD THAT: - The Tribunal examined the text and scheme of Section 26 of the Act and observed that the power to direct further investigation is envisaged in the statutory scheme in the context of a DG report recommending no contravention (triggering sub sections (5) and (7)). Regulation 20(6) of the General Regulations concerns the procedure for investigation by the DG but cannot be used to expand the Commission's substantive jurisdiction under Section 26. Where the DG's initial report disclosed contravention, the statutory scheme does not permit the Commission to invoke Regulation 20(6) to require further investigation in substitution of the statutory course. The Commission's direction dated 9.11.2016 to the DG for supplementary investigation was therefore issued without jurisdiction and was not justified by the Act. [Paras 19, 20, 21, 22]

Direction for further investigation issued by the Commission on 9.11.2016, relying on Regulation 20(6), was unauthorized and therefore void.

Closure of inquiry under Section 26(6) of the Act - voidness of actions taken pursuant to an unauthorized investigatory direction - remittal for fresh consideration on the basis of the original Director General report - Whether the impugned order dated 31.08.2018 closing the case under Section 26(6) of the Act (which was based on the supplementary DG report) was sustainable. - HELD THAT: - The Tribunal found that the impugned order was premised on a supplementary investigation that was ordered pursuant to an unauthorized direction (see prior finding). Because the supplementary investigation and all consequent proceedings stemming from the void direction were vitiated, the closure order based on that supplementary report could not be sustained. The Tribunal did not decide the merits of the original DG findings on contravention; instead it concluded that subsequent steps taken after the first DG report dated 18.03.2016 were void and required fresh adjudication by the Commission. [Paras 22, 23]

Impugned order dated 31.08.2018 is set aside as it is founded on a void supplementary investigation; subsequent proceedings after the first DG report are declared void and the matter is remitted to the Commission for fresh consideration based on the DG report dated 18.03.2016.

Final Conclusion: The appeal is allowed. The Commission's direction dated 9.11.2016 for further investigation under Regulation 20(6) was unauthorized and void; the order of 31.08.2018 based on the resultant supplementary report is set aside. The matter is remitted to the Commission to decide afresh on the basis of the Director General's original report dated 18.03.2016 after affording hearing to all concerned within three months.

Limitation and acknowledgment under Section 18 of the Limitation Act - fresh cause of action arising from judgment/decree or recovery certificate - acknowledgement of debt and its effect on limitation - definition of "default" under Section 3(12) of the IBC - maintainability of an application under Section 7 of the IBC

Limitation and acknowledgment under Section 18 of the Limitation Act - fresh cause of action arising from judgment/decree or recovery certificate - maintainability of an application under Section 7 of the IBC - Whether the Section 7 application was barred by limitation - HELD THAT: - The Tribunal applied the ratio of the Hon'ble Supreme Court in Dena Bank (now Bank of Baroda) and Laxmi Pat Surana to hold that an application under Section 7 IBC is not necessarily barred because the account was earlier declared NPA. Acknowledgements of liability in writing (including restructuring letters, balance-sheet entries and recovery certificates or decrees) operate to create a fresh cause of action or extend limitation by a further three years under Section 18 of the Limitation Act, provided such acknowledgements are within the prescribed period. The material on record established repeated acknowledgements of liability by the corporate debtor from 31.03.2010 onwards, and inclusion of the liability in balance sheets up to 2018-19, as well as recovery-certificate/decrees being capable of giving rise to a fresh cause of action. On these foundations the Tribunal concluded that the Section 7 application was within time and the Adjudicating Authority erred in dismissing the petition as time-barred. [Paras 5, 6, 7, 8, 9]

The Section 7 application is not barred by limitation and the Adjudicating Authority's dismissal on that ground is set aside.

Definition of "default" under Section 3(12) of the IBC - acknowledgement of debt and its effect on limitation - maintainability of an application under Section 7 of the IBC - Whether there was a "debt" and "default" by the corporate debtor sufficient to invoke Section 7 - HELD THAT: - The Tribunal examined the Adjudicating Authority's finding that there was no default, noting the statutory definition of "default" in Section 3(12) of the IBC. The appellate court found on the record that the corporate debtor had repeatedly acknowledged the liability - through restructuring letters, consent terms signed by a director, communications regarding rescheduling and by showing the liability in balance sheets - and that the second restructuring's cancellation and the corporate debtor's own replies constituted acknowledgement of debt and default. Applying the principles that acknowledgements extend limitation and that a recovery certificate or decree can give a fresh cause of action, the Tribunal held there was debt and default for the purposes of Section 7. [Paras 1, 8, 9]

There existed a debt and default by the corporate debtor and the Section 7 petition was therefore maintainable on merits.

Final Conclusion: The appeal is allowed; the Impugned Order dated 10.08.2021 is set aside. The Adjudicating Authority is directed to proceed in accordance with law on the Section 7 application.

Non-bailable nature and twin conditions for bail under Section 45 of the PMLA, 2002 - Power of arrest under Section 19 of the PMLA, 2002 and safeguards thereunder - Distinction between persons arrested under PMLA and persons produced pursuant to summons - Judicial requirement to record satisfaction on "reasonable grounds for believing" before granting bail under special statutes - Permissibility of further/supplementary complaint and ongoing investigation after filing of final report

Distinction between persons arrested under PMLA and persons produced pursuant to summons - Non-application of Section 45 rigours to persons not arrested - Validity of bail granted to accused nos. 2 to 11 who surrendered pursuant to summons - HELD THAT: - The Court held that there is a material distinction between an accused arrested during investigation under Section 19 of the PMLA and an accused who appears before the Special Court in response to summons. The Special Court's exercise of discretion under Section 88 CrPC in respect of persons who surrendered on summons will not be interfered with unless supervening circumstances are shown. In the present case accused nos. 2 to 11 voluntarily appeared on receipt of summons and the Special Court recorded that position before releasing them on bail; no satisfactory supervening circumstances were demonstrated by the Enforcement Directorate to justify interference. Accordingly the order dated 04.04.2022 granting bail to accused nos. 2 to 11 is affirmed.

The bail granted to accused nos. 2 to 11 is upheld.

Non-bailable nature and twin conditions for bail under Section 45 of the PMLA, 2002 - Judicial requirement to record satisfaction on "reasonable grounds for believing" before granting bail under special statutes - Permissibility of further/supplementary complaint and ongoing investigation after filing of final report - Power of arrest under Section 19 of the PMLA, 2002 and safeguards thereunder - Legality of order granting bail to accused Debabrata Halder (accused no.1) who was arrested under Section 19 PMLA - HELD THAT: - The Court found that the learned Special Court erred in granting bail to the arrested accused without applying the mandatory twin conditions of Section 45 of the PMLA. Where the Public Prosecutor opposed bail, the Special Court was obliged to be satisfied on the basis of the material that there were "reasonable grounds for believing" the accused was not guilty and that he was not likely to commit an offence while on bail. The Special Court's reasoning-that there was no prayer for further investigation and therefore nothing remained to be investigated-was incorrect; the complaint itself recorded leave to file a supplementary complaint and an investigating agency need not file a separate prayer for further investigation. Having regard to the seriousness of the allegations, the mode of arrest under Section 19 and the standards explained in the cited precedents, the learned Special Court failed to demonstrate the requisite application of mind and statutory satisfaction under Section 45 before enlarging the arrested accused on bail. For these reasons the order dated 12.04.2022 granting bail to Debabrata Halder was set aside and his bail cancelled.

The bail granted to Debabrata Halder is set aside and he is directed to surrender within 72 hours.

Final Conclusion: The petition is allowed: the High Court affirms the Special Court's grant of bail to accused nos. 2-11 who surrendered on summons but sets aside the Special Court's grant of bail to the arrested accused Debabrata Halder for failure to apply the statutory twin conditions of Section 45 of the PMLA, 2002; Debabrata Halder is directed to surrender within 72 hours.

Predicate offence - scheduled offence - proceeds of crime - ECIR as an internal departmental document - jurisdiction under the Prevention of Money Laundering Act - prima facie material - misuse or abuse of investigative power

Predicate offence - scheduled offence - proceeds of crime - ECIR as an internal departmental document - jurisdiction under the Prevention of Money Laundering Act - prima facie material - misuse or abuse of investigative power - Validity of the respondent's initiation and continuation of investigation under the PML Act arising from ECIR based on an FIR alleging offences including Section 420 IPC. - HELD THAT: - The Court held that an ECIR is an internal departmental document which enables commencement of an investigation under the PML Act but is not equivalent to an FIR; commencement of a PMLA investigation requires a predicate offence that is a scheduled offence and prima facie material to show generation of proceeds of crime. On the materials before it, including the FIR alleging commission of an offence under Section 420 IPC (a scheduled offence) and the allegations that deliberate misdeclaration induced the authorised dealer to remit foreign exchange which was allegedly siphoned off to wholly owned overseas subsidiaries, the Court was satisfied that both requirements for initiating a PMLA investigation were prima facie met. The Court declined to assess merits of the underlying FEMA issues or substitute its role for the investigation agency, noting that interference is inappropriate unless the investigation is without jurisdiction, constitutes misuse of power, or is an abuse of process. The petitioner was left free to furnish explanations and documents to the respondent, and the respondent was directed to proceed within the statutory scope of the PML Act.

The respondent is within jurisdiction to investigate under the PML Act on the present facts; the Court will not interfere with the ongoing investigation.

Final Conclusion: Writ petition dismissed; the Enforcement Directorate's investigation under the PML Act may continue subject to statutory limits and the petitioner may submit explanations and supporting documents; no costs.

Constitution of Bench under Section 6(5)(b) of PMLA - coram non-judice - scope of natural justice in summary attachment proceedings - discretion to regulate procedure by Adjudicating Authority - permissibility of cross-examination in provisional attachment proceedings - time-bound nature of provisional attachment (180 days)

Constitution of Bench under Section 6(5)(b) of PMLA - coram non-judice - discretion to regulate procedure by Adjudicating Authority - Validity of hearing by a single Member Bench of the Adjudicating Authority and whether proceedings are vitiated for want of a three Member constitution - HELD THAT: - The Adjudicating Authority is constituted by a Chairperson and two other Members under Section 6(2) but Section 6(5)(b) expressly empowers the Chairperson to constitute Benches with one or two Members. Section 6(5)(a) permits jurisdiction to be exercised by Benches. Reading these provisions together, the Bench need not always comprise all three members of the Adjudicating Authority; single Member Benches are permissible unless the Chairperson deems a larger Bench necessary under Section 6(7). Prior High Court decisions on the point (reproduced in the order) support this construction. Consequently, the Adjudicating Authority's decision refusing stay of proceedings on the ground that only a single Member heard the matter was correct and the contention of coram non-judice is without merit.

Single Member Bench was competent to hear the matter; no coram non-judice and the prayer to stay proceedings until three Members were appointed is rejected.

Scope of natural justice in summary attachment proceedings - permissibility of cross-examination in provisional attachment proceedings - time-bound nature of provisional attachment (180 days) - Whether the Adjudicating Authority erred in refusing permission to cross examine specified witnesses in confirmation proceedings of a Provisional Attachment Order - HELD THAT: - Proceedings under Section 5 for confirmation of a provisional attachment are summary and time bound (to 180 days). Although the Adjudicating Authority is to be guided by principles of natural justice and may regulate procedure, those principles are not to be applied rigidly where their application would frustrate the statutory scheme. The appellant sought cross examination largely to challenge documentary material and to assert lack of connection with the scheduled offence, but had not contested the documentary evidence by filing a reply. Many of the proposed witnesses had not made incriminating statements or were accused in the criminal proceedings; permitting cross examination in such circumstances would risk premature disclosure of defence and cause delay that could permit the provisional attachment to lapse. The Adjudicating Authority legitimately exercised its discretion to refuse cross examination where the application appeared to be a tactic to delay confirmation proceedings rather than to address specific prejudice that would be remedied by oral testing of witnesses.

Refusal to allow the cross examination sought was justified; no interference with the Adjudicating Authority's order.

Final Conclusion: Both appeals are dismissed: the Adjudicating Authority validly proceeded before a single Member Bench and correctly exercised its discretion to refuse the cross examination applications in the summary, time bound provisional attachment proceedings under the PMLA.

Charging and valuation of taxable service by stock brokers - reimbursements and statutory levies collected on behalf of third parties not forming part of taxable value - burden on Revenue to prove receipts are commission or brokerage - annulment of departmental circular as basis for tax demand - taxability of commission on sale of Government/RBI securities as a sovereign/statutory function - consequential invalidity of penalties founded on set aside demands

Reimbursements and statutory levies collected on behalf of third parties not forming part of taxable value - charging and valuation of taxable service by stock brokers - burden on Revenue to prove receipts are commission or brokerage - CTCL/Depository/Demat charges, exchange fees and similar amounts collected by the broker on behalf of statutory bodies do not form part of the taxable value of stock broking services. - HELD THAT: - The Tribunal held that charges recovered by the broker which are statutory levies or reimbursements payable to exchanges or depositories (e.g., CTCL charges, depository/demat charges and similar items) are collected separately and deposited with the authorities concerned and are not retained as remuneration by the broker. Prior decisions establish that Section 67's valuation scheme confines taxable value to commission or brokerage charged by the broker; there is no implied power to expand the assessable value to include such pass through receipts. The department bears the burden of proving that a receipt has the character of commission or brokerage; that burden was not discharged. Applying these principles, the impugned demand in respect of such charges was set aside.

Demand of service tax on CTCL, depository/demat and similar reimbursed charges set aside; such receipts are not part of taxable value.

Annulment of departmental circular as basis for tax demand - business auxiliary services classification and circular quashed - Service tax demand on income from distribution of mutual funds and commissions for selling bank/company bonds-based on Board Circular dated 05.11.2003-was unsustainable and set aside. - HELD THAT: - The Tribunal noted that the departmental demand rested on Board Circular No. 66/15/2003 which had been set aside by the High Court of Andhra Pradesh and whose correctness was affirmed by the Supreme Court (as recorded in the precedents relied upon). Where the circular forming the basis of the show cause notice is quashed, the Commissioner's dropping of proceedings or setting aside of demand is justified. The impugned demand was therefore held unsustainable and was set aside accordingly.

Demand of service tax on mutual fund distribution income and commissions for selling bonds set aside as unsustainable in view of the quashing of the departmental circular relied upon.

Taxability of commission on sale of Government/RBI securities as a sovereign/statutory function - Commission received for sale of RBI/Government bonds is not liable to service tax. - HELD THAT: - Relying on Tribunal precedent, the sale of RBI bonds (government securities issued as part of public borrowing) was held to be a sovereign/statutory function of the Government and not a taxable activity. The Tribunal applied earlier decisions which treat brokerage/commission on transactions in government securities as outside service tax liability; consequent demands were therefore unsustainable and set aside.

Service tax demand on commission from sale of RBI/Government bonds set aside.

Consequential invalidity of penalties founded on set aside demands - Penalties imposed pursuant to the service tax demands that have been set aside do not survive and are annulled. - HELD THAT: - The Tribunal observed that since the substantive demands in respect of CTCL charges, public issue/RBI bond income and mutual fund distribution were set aside, penalties imposed solely on the basis of those demands (including penalties under the cited provisions) are rendered unsustainable. Accordingly, penalties imposed in relation to the set aside demands were also set aside.

Penalties founded on the demands that have been quashed are set aside.

Final Conclusion: Following earlier Tribunal decisions, the impugned service tax demands in respect of CTCL/depository and similar pass through charges, income from mutual fund distribution and sale of bank/ company bonds (as founded on the quashed circular), and commission on sale of RBI/Government bonds were held unsustainable and set aside; consequentially, penalties based on those demands were also annulled and the appeals allowed.

Interest on delayed refunds - mandatory three-month period for refund sanction - interpretation of Section 11-BB of the Central Excise Act, 1944 (interest on delayed refunds) - effect of defective refund application on commencement of limitation - statutory duty of refund sanctioning authority

Interest on delayed refunds - mandatory three-month period for refund sanction - statutory duty of refund sanctioning authority - interpretation of Section 11-BB of the Central Excise Act, 1944 (interest on delayed refunds) - Claim for interest under Section 11-BB where refund sanction was passed beyond the prescribed three-month period. - HELD THAT: - The court held that the three-month period prescribed for sanction of refunds is mandatory and non-negotiable; failure to pass the refund order within that period constitutes a failure to discharge the statutory duty of the refund-sanctioning authority and gives rise to a claim for interest under Section 11-BB. Reliance was placed on decisions of the Supreme Court and various High Courts and on relevant circulars; intentional or unintentional delay by the revenue does not alter the liability to pay interest once the statutory period has lapsed. Applying these principles to the undisputed facts that the respondent did not sanction refunds within three months of the petitioner's submission, the petitioner is entitled to interest on the refunded amounts. [Paras 8]

Petitioner entitled to interest under Section 11-BB for refunds sanctioned after the mandatory three-month period.

Effect of defective refund application on commencement of limitation - mandatory three-month period for refund sanction - interpretation of Section 11-BB of the Central Excise Act, 1944 (interest on delayed refunds) - Whether the three-month period for sanction of refund begins only from the date of the final submission after rectification of defects rather than from the date of initial submission of the refund claim. - HELD THAT: - The court rejected the respondent's contention that the limitation period begins only from the date of final submission after rectification of deficiencies. Citing precedent, the court explained that returning or seeking rectification of an application does not convert an initial application into a non-application for the purpose of Section 11-BB; at most such returning is an irregularity that does not defeat the statutory right to interest once the three-month period elapses. The respondent was therefore misdirected in treating the period as commencing from the final submission rather than from the date of the refund claim. [Paras 9, 11]

Period of three months runs from date of submission of the refund claim and not from the date of final submission after rectification of defects; respondent's contrary finding set aside.

Final Conclusion: Petition allowed; impugned order rejecting payment of interest set aside and respondent directed to pay interest at 6% per annum from expiry of three months from the date of submission of the refund requests, the payment to be made expeditiously and in any event within three months of receipt of this order.

Cenvat credit on supplementary invoices - exclusion under Rule 57AE for fraud, collusion or willful mis statement or suppression - mens rea requirement to deny credit - jurisdiction of supplier's adjudicating authority to determine supplier's suppression/fraud - absence of invocation of proviso to Section 11A(1) and non invocation of penal provision under Section 11AC - entitlement to cenvat credit in absence of finding of fraud/suppression

Cenvat credit on supplementary invoices - exclusion under Rule 57AE for fraud, collusion or willful mis statement or suppression - mens rea requirement to deny credit - absence of invocation of proviso to Section 11A(1) and non invocation of penal provision under Section 11AC - entitlement to cenvat credit in absence of finding of fraud/suppression - Appellant entitled to avail cenvat credit on supplementary invoices issued by its supplier unit where the supplier's duty shortfall was not established to be due to fraud, collusion or willful suppression. - HELD THAT: - Rule 57AE(1)(i) permits denial of cenvat credit on supplementary invoices only where the additional duty becomes recoverable from the manufacturer on account of non levy or short levy caused by fraud, collusion, willful mis statement or suppression with intent to evade duty. The tribunal reviewed the show cause notices and the adjudication in respect of the supplier (Tuticorin unit) for the period May 1997 to June 2000 and found that neither the proviso to Section 11A(1) nor the penal provision of Section 11AC was invoked in the notices or in the adjudication. The substantive adjudication confirmed differential duty and imposed penalty under Rule 173Q, but did not record a finding that the duty shortfall was attributable to fraud, collusion or willful suppression with intent to evade duty. In the absence of any such finding against the supplier, the statutory bar in Rule 57AE did not apply at the recipient's end and therefore the recipient was entitled to claim cenvat credit on the supplementary invoices. Having decided the matter on merits, the tribunal did not consider ancillary issues such as limitation.

Impugned order denying cenvat credit set aside; appeals allowed and cenvat credit on the supplementary invoices held admissible.

Final Conclusion: The Tribunal allowed the appeals, holding that in the absence of any adjudicated finding that the supplier's duty shortfall arose from fraud, collusion or willful suppression (and given that the proviso to Section 11A(1) and Section 11AC were not invoked), the exclusion in Rule 57AE did not apply and the appellant was entitled to cenvat credit on the supplementary invoices.

Stentering not amounting to manufacture - liability to central excise duty for processing of goods sent by another person - procedure under section 9D of the Act - inadmissibility of unexamined and untested statements - requirement that show cause notice must make the case sought to be proved - penalty consequential on unsustainable duty demand

Stentering not amounting to manufacture - liability to central excise duty for processing of goods sent by another person - requirement that show cause notice must make the case sought to be proved - Whether duty could be sustained against the appellant for alleged stentering and other finishing processes on fabrics sent by M/s. Shrinathji Textiles. - HELD THAT: - The Tribunal accepted that stentering of fabrics falling under chapter 52 does not amount to manufacture. The Commissioner (Appeals) attempted to sustain duty by relying on alternative findings that the appellant carried out other finishing processes specified in chapter note 3 to chapter 52 or processed fabrics falling under chapters 54 and 55. The record, however, shows that the show cause notice did not make any case that the appellant carried out processes other than stentering or that it processed fabrics under chapters 54 or 55. In absence of a case in the SCN and in absence of evidence that the appellant performed the additional processes or processed fabrics under chapters 54/55, the demand of central excise duty against the appellant cannot be sustained. Consequently, the duty demand confirmed by the authorities was set aside. [Paras 5]

Duty demand against M/s. JTL for the finishing alleged in the SCN cannot be sustained and is set aside.

Procedure under section 9D of the Act - inadmissibility of unexamined and untested statements - penalty consequential on unsustainable duty demand - Whether reliance could be placed on statements recorded during investigation when the deponents were not examined and not made available for cross-examination in terms of section 9D of the Act. - HELD THAT: - The Tribunal observed that the revenue's case rested on delivery slips and statements of the director of the appellant, representatives of M/s. Shrinathji Textiles, buyers and a warehouse keeper, none of whom were examined for cross-examination as mandated by section 9D in the adjudication. The authorities below treated the absence of retraction as an exception under section 9D; the Tribunal held that non-retraction does not satisfy the statutory requirement and therefore such untested statements must be excluded. The judgment relied on precedents applying the same principle: Basudev Garg v. C.C. and G-Tech Industries v. Union of India . Excluding those statements, there was no reliable evidence to prove that the quantities alleged were stentered at the appellant's premises and the contradiction in quantities further reinforced the need for cross-examination. As a result, the evidentiary foundation for the duty demand failed and consequential penalties could not be sustained. [Paras 5]

Statements not subjected to section 9D procedure excluded; without such evidence the duty and consequent penalties cannot be sustained.

Final Conclusion: The appeals are allowed: the Order In Appeal confirming duty and imposing penalties on M/s. Jindal Texofab Ltd. and the director is set aside because stentering of chapter 52 fabrics does not amount to manufacture, no case was made in the SCN for other processes or chapters relied upon, and the statements relied on were inadmissible for want of examination/cross examination under section 9D; consequential penalties are also quashed.

Extended period of limitation for recovery - CENVAT credit wrongly availed and recoverable under Rule 14 of the CENVAT Credit Rules, 2004 - penalty consequent upon unsustainable demand - availment versus mere taking of credit

Extended period of limitation for recovery - availment versus mere taking of credit - Validity of the demand invoking the extended period for recovery of allegedly wrongly taken CENVAT credit when the appellant pleaded that the credit was taken belatedly by mistake and was not availed/used by the mill. - HELD THAT: - The appellant's reply to the Show Cause Notice, placed on record, specifically stated that the credit was taken belatedly by mistake but was not availed by the mill. That factual plea was overlooked by the Adjudicating Authority and upheld by the First Appellate Authority. The Tribunal found that Revenue failed to justify invocation of the extended period of limitation for recovery of the credit. Applying the principle that a demand based on the extended period must be justified by the Revenue and in light of the appellant's unrefuted contention that the credit was not availed, the Tribunal concluded that the extended-period demand could not be sustained. The Tribunal also relied on precedent recognizing limits to belated recovery where regular returns had been filed and the nature of availment was not shown to warrant extended period invocation. [Paras 8, 10]

Demand for recovery of the allegedly wrongly taken CENVAT credit under the extended period is unsustainable and is set aside.

Penalty consequent upon unsustainable demand - Sustainability of the penalty imposed consequent to the demand which was challenged. - HELD THAT: - The Tribunal held that when the primary demand for recovery of credit cannot be sustained (for lack of justification for invoking the extended period and in view of the appellant's unrefuted plea that the credit was not availed), the penalty imposed consequent to that demand likewise cannot stand. For that reason the penalty confirmed in the orders under challenge was set aside along with the demand. [Paras 10]

Penalty imposed consequent to the unsustainable demand is set aside.

Final Conclusion: The appeal is allowed; the demand for recovery of CENVAT credit for the period March 2016 to June 2017 (invoking the extended period) and the consequential penalty are set aside, with consequential benefits, if any, as per law.

Cenvat credit on input services - Distribution of credit under Rule 7 of Cenvat Credit Rules, 2004 - Pro rata distribution of input service credit - Input Service Distributor (ISD) registration - Absence of mala fide / revenue neutrality

Cenvat credit on input services - Distribution of credit under Rule 7 of Cenvat Credit Rules, 2004 - Pro rata distribution of input service credit - Entitlement to Cenvat credit where input services were availed at the Head Office and the entire credit was taken in a co-located manufacturing unit. - HELD THAT: - The Tribunal found the facts of the case analogous to earlier decisions where credit attributable to common input services used by more than one unit was treated permissibly when utilized in one unit. Rule 7 of the Cenvat Credit Rules, 2004 gives the assessee the option to distribute credit and prescribes pro rata distribution where credit is used in more than one unit; the rule prior to mandatory substitution used the word "may", enabling an assessee to utilize credit at one unit without illegality. The Tribunal noted that no objection was raised to the admissibility of the Cenvat credit for the services themselves except for receipt of invoices in the name of the Head Office, and therefore the impugned denial was unsustainable. Reliance on the consistent line of tribunal and High Court decisions led to allowing the appeals on this ground.

The denial of Cenvat credit on account of its being availed at the Head Office and utilized at the co-located manufacturing unit is set aside and the credit is allowed.

Input Service Distributor (ISD) registration - Absence of mala fide / revenue neutrality - Whether failure to obtain ISD registration at the material time disentitles the appellant from claiming the Cenvat credit. - HELD THAT: - The Tribunal held that non-registration as an ISD, in the absence of any finding of mala fide, does not disentitle the assessee from legitimately available Cenvat credit. The appellant subsequently obtained ISD registration, and the authorities raised no substantive objection to admissibility of the credit other than the registration/formal receipt being in the Head Office. Applying the principle that mere procedural non-compliance without malafide should not defeat substantive credit entitlement, the Tribunal allowed the appeals.

Failure to have ISD registration at the relevant time, without any finding of mala fide, does not disentitle the appellant from the Cenvat credit; appeals allowed on this point.

Final Conclusion: Appeals allowed. Cenvat credit availed in respect of input services received at the Head Office and utilized by the co-located manufacturing unit is permissible; non-registration as an ISD at the material time, absent mala fide, does not disentitle the appellant from the credit.

Interpretation of exemption notification - strict construction of exemption clauses - benefit of ambiguity to the Revenue in exemption clauses - specific entry prevails over general entry - distinction between books and printed material - charging provisions and exemption schedule interplay under Section 7

Distinction between books and printed material - specific entry prevails over general entry - charging provisions and exemption schedule interplay under Section 7 - interpretation of exemption notification - Whether brochure printed by the revisionist is exempt as a 'book' under Schedule-I Entry 7 or taxable as 'printed material' under Schedule-II Part-A Entry 100. - HELD THAT: - The Court analysed Section 7 and the two Schedules, noting Schedule-I lists exempt goods (Entry 7: books and periodicals etc.) while Schedule-II Part-A lists goods taxable at 4% (Entry 100: printed materials including diary and calendar). Earlier precedents construing 'books' broadly arose under a different statutory/notification regime; the legislature in the 2008 Act has drawn a clear distinction between 'books' and 'printed material'. Brochures, being promotional/advertising printed material, fall within the specific taxable entry and cannot be read into the exemption for books. The Court relied on the settled principle that ambiguity in exemption clauses must be construed in favour of the Revenue and that where a specific entry exists it prevails over any general description. Applying these principles, the Tribunal's conclusion that the brochures are taxable as printed material was upheld. [Paras 25, 26, 27, 28, 29]

Brochures are taxable as 'printed material' under Schedule-II Part-A Entry 100 and are not entitled to exemption under Schedule-I Entry 7; question answered for the Revenue.

Interpretation of exemption notification - strict construction of exemption clauses - charging provisions and exemption schedule interplay under Section 7 - Whether the term 'Porridge' in Schedule-I Entry 36 excludes 'instant porridge' produced by the assessee. - HELD THAT: - The Court observed that Entry 36 of Schedule-I expressly lists 'Porridge' among exempted goods without any distinction between normal and instant varieties. Absent any legislative differentiation, the Tribunal erred in reading into the Schedule a limitation excluding instant porridge. The intention of the legislature was to exempt 'Porridge' generally; therefore instant wheat porridge (as claimed) falls within Entry 36 and is exempt from tax. Accordingly the Tribunal's contrary finding was set aside. [Paras 32, 33, 34, 35, 36]

Instant porridge is covered by 'Porridge' in Schedule-I Entry 36 and is exempt; Tribunal's finding excluding it is set aside.

Final Conclusion: The Court answered the brochure issue in favour of the Revenue (brochures are taxable as printed material under Schedule-II Part-A Entry 100 and not exempt as books under Schedule-I Entry 7). The Court allowed the challenge on the porridge issue, holding that 'Porridge' in Schedule-I Entry 36 includes instant porridge and is exempt. Consequently, the revisions are dismissed insofar as question (ii) and Revision No.281 of 2022 is partly allowed on question (iv).

Rejection of books of accounts - best judgment assessment on unproved documents - burden of proof where fact is within the knowledge of the assessee (Section 16 of U.P. Value Added Tax Act, 2008) - obligation of Revenue to prove material seized by mobile squad - inadmissibility of shifting burden to assessee in absence of proof

Rejection of books of accounts - best judgment assessment on unproved documents - obligation of Revenue to prove material seized by mobile squad - Whether the Tribunal correctly upheld rejection of the assessee's books and sustained an assessment on best judgment basis relying on invoices and material forwarded by mobile squads which the Department failed to prove as belonging to the assessee. - HELD THAT: - The Court held that the material forwarded by various mobile squads was required to be proved by the Department before it could be used to reject the assessee's books and fasten tax liability. There was a denial by the assessee as to the alleged transactions and the Department did not discharge the evidentiary burden to establish that the seized documents related to the revisionist. The Tribunal and the first appellate authority reduced the assessed quantum but neither explained the basis of the reductions nor recorded findings establishing the seized material as attributable to the assessee. Discrepancies in comparison of specific invoices (example noted in the record) further demonstrated that the Department had not proved the seized material. The Court concluded that tax liability could not be imposed on the basis of unproven documents sent by mobile squads and that shifting the burden to the assessee in such circumstances was impermissible; accordingly the Tribunal's order affirming the rejection of books and sustaining assessment was unsustainable and was set aside.

Tribunal's order upholding rejection of books and assessment based on unproven mobile-squad material set aside; assessee entitled to relief and no tax liability can be sustained on that unproven material.

Burden of proof where fact is within the knowledge of the assessee (Section 16 of U.P. Value Added Tax Act, 2008) - inadmissibility of shifting burden to assessee in absence of proof - Whether Section 16 of the U.P. Value Added Tax Act, 2008, which casts burden upon the assessee where a fact is specially within his knowledge, justified shifting the burden to the assessee in the present case. - HELD THAT: - The Court observed that Section 16 applies only where the fact to be proved is specially within the knowledge of the assessee. In the present case the documents and material alleged by the Department were those seized by mobile squads and were denied by the assessee; such material was not shown to be within the exclusive knowledge of the assessee. Therefore Section 16 was not attracted and could not be invoked to relieve the Department of its burden to prove the seized material. The revenue's contention based on Section 16 accordingly failed.

Section 16 not attracted; burden to prove mobile-squad material remained on the Department and could not be shifted to the assessee.

Final Conclusion: Revision allowed; question of law answered in favour of the assessee and against the Department; the Tribunal's order of 17.01.2022 is set aside and no tax liability can be sustained on the unproved material seized by mobile squads.

Reasonable opportunity to show cause under Section 27 of the TNVAT Act - best judgment assessment under Section 27 - demand notice as sequitur of an assessment order - failure to record consideration of dealer's reply vitiating assessment - reasonable opportunity jurisprudence in State Bank of India Officers' case

Reasonable opportunity to show cause under Section 27 of the TNVAT Act - failure to record consideration of dealer's reply vitiating assessment - Impugned assessment order set aside because it does not show that the dealer's reply to the show cause notice was considered, thereby failing the statutory requirement of giving a reasonable opportunity to show cause. - HELD THAT: - The Court found that although a show cause notice was issued, the impugned assessment order contains no articulation that the writ petitioner's reply dated 07.03.2018 was considered. The proviso to sub-section (2) of Section 27 requires that the dealer be given a reasonable opportunity to show cause before an order is made. Absent any record in the assessment order demonstrating consideration of the reply, the statutory imperative remains unsatisfied. The Court therefore interfered with and set aside the assessment order solely on that ground, without expressing any view on the merits of the taxation issues underlying the assessment. [Paras 7, 10]

Assessment order set aside for failure to demonstrate that the dealer's reply was considered; matter remitted for fresh consideration.

Best judgment assessment under Section 27 - failure to record consideration of dealer's reply vitiating assessment - Direction to the assessing authority to consider the dealer's reply and make a fresh best-judgment assessment de novo under Section 27. - HELD THAT: - Having quashed the impugned order for the procedural lapse, the Court directed the respondent to consider the reply dated 07.03.2018 and to proceed afresh with the Section 27 best-judgment assessment exercise. The Court expressly left all substantive questions open for the authority to decide in the fresh assessment. The Court further directed that the outcome of the revised assessment exercise be communicated to the dealer under acknowledgment within five working days from the date the fresh order is made. [Paras 10]

Respondent to consider the reply and make a fresh Section 27 best-judgment assessment de novo, with communication to the dealer.

Demand notice as sequitur of an assessment order - Impugned demand notice set aside because it is consequential on the quashed assessment order. - HELD THAT: - The demand notice dated 04.11.2022 was issued pursuant to the impugned assessment order. Since the assessment order was set aside on the ground that the dealer's reply was not shown to have been considered, the concomitant demand notice was also set aside for the same reason. [Paras 10]

Demand notice set aside for being consequential on the quashed assessment order.

Reasonable opportunity jurisprudence in State Bank of India Officers' case - The Court applied the precedent in the State Bank of India Officers' Association case relating to the contours of 'reasonable opportunity' under Section 27 and directed that that precedent operate in the present matter. - HELD THAT: - The Court noted the prior decision of this Court in the State Bank of India Officers' Association matter, confirmed by the Division Bench, which explained that 'reasonable opportunity' may not necessarily entail a personal hearing and is subject to the assessing officer's discretion. The Court held that this jurisprudence would govern the determination of what constitutes reasonable opportunity in the fresh assessment exercise ordered herein, while refraining from expressing any view on the merits. [Paras 5, 10]

State Bank of India Officers' precedent to operate in defining reasonable opportunity; no merits decision made.

Error apparent on the face of the record - Questions concerning the availability and scope of Section 84 (rectification for error apparent on the face of the record) were left open for determination in another proceeding. - HELD THAT: - While two specific questions formulated earlier regarding the availability of Section 84 to an assessee and whether mismatches/short payments qualify as an 'error apparent on the face of the record' were noted, the Court expressly left these questions open for adjudication in a matter where those issues are directly presented and require authoritative determination. No adjudication on Section 84 was undertaken in these writ petitions. [Paras 8, 10]

Questions on Section 84 left open for decision in another matter.

Final Conclusion: The assessment order for assessment year 2015-16 is quashed for failure to show consideration of the dealer's reply; the assessing authority is directed to consider that reply and make a fresh Section 27 best-judgment assessment de novo (with communication to the dealer), the consequential demand notice is set aside, State Bank of India Officers' precedent on reasonable opportunity will govern the fresh exercise, and separate questions on Section 84 are left open for determination elsewhere.

Assessment under Section 28(2) of the VAT Act - compounding scheme under Government Order dated 18.02.2016 - acceptance of applications filed beyond the prescribed period on payment of interest - effect of pending compounding/composition application on levy of tax - remand for fresh consideration of pending statutory application

Compounding scheme under Government Order dated 18.02.2016 - acceptance of applications filed beyond the prescribed period on payment of interest - Whether an application for benefit under the Government Order dated 18.02.2016 could be filed and entertained notwithstanding that an S.I.B. inquiry had been carried out earlier. - HELD THAT: - The court recorded the statement of the Standing Counsel based on instructions from the competent authority that there was no bar to the revisionist applying for the benefit of the Government Order dated 18.02.2016 even after an S.I.B. inquiry. The Government Order itself provided that applications filed beyond the initial 45-day window could be accepted by the Commissioner on payment of interest. The record showed that the revisionist had filed such an application on 07.04.2016 and that no order was passed on that application before tax proceedings culminated in the impugned orders. The court therefore treated the position as that the application was maintainable and required consideration by the authority in accordance with the Government Order. (Paragraphs 10, 11, 12, 13) [Paras 10, 11, 12, 13]

Application for benefit under the Government Order dated 18.02.2016 was not barred by the prior S.I.B. inquiry and was maintainable; the Government Order permits acceptance beyond 45 days subject to payment of interest.

Assessment under Section 28(2) of the VAT Act - effect of pending compounding/composition application on levy of tax - remand for fresh consideration of pending statutory application - Whether the assessing / appellate authorities could proceed to impose tax under Section 28(2) while the revisionist's application under the Government Order dated 18.02.2016 remained pending. - HELD THAT: - The court found that the revisionist had applied for the Government Order's benefit and that the application remained pending without any order from the competent authority which, under the Government Order, could have accepted the application on payment of interest. Inaction by the authorities in not considering or informing the revisionist about the option to deposit on payment of interest was unacceptable where the application was on file. Consequently the tribunal's order imposing tax (as reduced on appeal) was set aside and the matter was remitted to the respondent authority to reconsider the appeal afresh in light of the Government Order and the revisionist's pending application. The court directed that a fresh order be passed within three months from receipt of the certified copy. The question of law was accordingly decided. (Paragraphs 9, 11, 12, 13, 14, 15) [Paras 11, 12, 13, 14, 15]

Impugned tax order set aside; matter remanded for fresh consideration of the appeal and the pending application under the Government Order dated 18.02.2016, to be disposed within three months.

Final Conclusion: The revision is allowed: the tribunal's order of 18.06.2022 is set aside and the matter is remanded to respondent no.1 to decide the appeal afresh having regard to the Government Order dated 18.02.2016 and the revisionist's application, with a direction to pass a reasoned order within three months.

Textile products - inclusive construction of the word 'including' - ordinary parlance interpretation of taxing statutes - distinction between specific enumeration and general category in a schedule

Textile products - including - ordinary parlance interpretation - inclusive construction - saree, patta, dhoti and gamuchha fall within Entry Serial No.3 of Part-II of the Schedule to the Odisha Entry Tax Act, 1999 - HELD THAT: - The Court examined the language of Entry No.3, Part II, which taxes "textile products including cotton fabrics and ready made garments", and applied the established principle that words used in a taxing statute are to be construed in their ordinary, popular sense; where an expression is capable of wider and narrower meanings, context and background determine the proper scope. The presence of the word "including" does not necessarily restrict the category to the items that follow; it ordinarily operates as an extension to clarify examples rather than exhaustively limit the main term. Having regard to authoritative exposition of the meaning of "textile" as any manufacture from fibres or yarns by interlacing, weaving or other processes (so as to produce woven, knitted, bonded, felted or similar fabrics), the Court held that saree, patta, dhoti and gamuchha are products of textile manufacture and do not lose their essential character as fabrics by reason of size, finish or specific use. The statutory scheme, which places certain silk items separately in Part I at a different rate, further supports a construction where Part II's "textile products" is a general category (at the prescribed rate) that legitimately includes the goods in question. The Tribunal's construction, applying the ordinary meaning of "textile" and treating "including cotton fabrics and ready made garments" as illustrative, was therefore upheld. [Paras 8, 9]

Affirmed that saree, patta, dhoti and gamuchha fall within Entry No.3 of Part II of the Schedule to the OET Act and are liable to entry tax accordingly.

Final Conclusion: The revision petition is dismissed; the Odisha Sales Tax Tribunal's conclusion that saree, patta, dhoti and gamuchha are taxable as 'textile products' under Entry No.3, Part II of the Schedule to the OET Act is affirmed, and the parties shall bear their own costs.

Refund of input tax credit - memorandum of understanding - investment promotion subsidy - eligibility of inputs for VAT refund - set-off or Input Tax Credit exclusion during refund period - time bar under Section 19(11) of the TNVAT Act - administrative direction to give effect to MoU without reference to statutory ITC provisions

Refund of input tax credit - memorandum of understanding - administrative direction to give effect to MoU without reference to statutory ITC provisions - Entitlement of the petitioner to refund of input VAT/ITC under the MoU and the obligation of the Commercial Taxes Department to grant refunds in accordance with the MoU notwithstanding the statutory provisions relating to input tax credit. - HELD THAT: - The MoU between the petitioner and the State provided for refund of input VAT as an investment promotion subsidy for a specified period, excluding set off or Input Tax Credit during that period. The State, by a communication placed on record, directed that refunds under the MoU are to be granted by the Commercial Taxes Department without reference to provisions of law relating to ITC, and the Commercial Taxes Department acceded to that position. In view of the administrative direction and the terms of the MoU, the writ petitions seeking refund were allowed to the extent indicated and the authorities were directed to pay the refunds expeditiously.

Writ petitions allowed to the extent of directing the Commercial Taxes Department to grant and pay refunds in accordance with the MoU without reference to statutory ITC provisions; refunds to be paid expeditiously.

Final Conclusion: The State's administrative position that refunds due under the MoU are payable by the Commercial Taxes Department without reference to the statutory provisions on input tax credit was accepted; the writ petitions were allowed and the respondents directed to expeditiously pay the refunds for the periods shown.

Vicarious liability of directors under Section 141 of the Negotiable Instruments Act - liability of independent/non-executive directors - requirement of specific averments to fasten criminal liability - summoning threshold and application of mind at pre-summoning stage - limited liability under board processes as articulated in Section 149 of the Companies Act, 2013

Vicarious liability of directors under Section 141 of the Negotiable Instruments Act - liability of independent/non-executive directors - requirement of specific averments to fasten criminal liability - summoning threshold and application of mind at pre-summoning stage - Summons issued to the petitioner, an independent/non-executive director, were quashed insofar as they were founded on general and bald averments lacking specific allegations that he was in charge of and responsible for the conduct of the company's business at the time of the offence. - HELD THAT: - The Court applied the settled principles that Section 141 creates vicarious liability only for persons who, at the time the offence was committed, were in charge of and responsible for the conduct of the business of the company, and that such responsibility must be specifically averred in the complaint. Independent and non-executive directors are not ordinarily involved in day-to-day management; liability depends on the role actually played and not on designation alone. The complaint herein contained only broad, identical allegations against all directors asserting they were "in charge of managing the day to day affairs" without specifying the petitioner's role or any act of consent, connivance or negligence attributable to him, nor was he a signatory to the cheques. Reliance on precedents led the Court to hold that summons cannot be issued mechanically and must reflect application of mind to the materials before the magistrate. On the material before the Court (including Form DIR-11 showing the petitioner as an independent director) and absence of specific averments in the complaint, the pre-summoning threshold for proceeding against the petitioner under Section 141/138 was not satisfied, warranting quashing of summons insofar as they related to the petitioner. [Paras 19, 20, 21, 22, 23]

Impugned summons dated 28.11.2018 are quashed insofar as they relate to the petitioner; the petitioner is not to be proceeded with on the complaint under Section 138/141 of the NI Act.

Final Conclusion: The petition is allowed: the trial court order issuing summons to the petitioner, an independent/non-executive director, is quashed because the complaint contained only general averments and failed to plead specific facts showing he was in charge of and responsible for the company's business at the time of the alleged offence.

Service of process on Union of India - acceptance of notices by Central Government Branch Secretariat - designated legal cells for Customs, Central Excise and Service Tax - mandated channels for service in Direct and Indirect Tax matters - failure to appear and imposition of costs

Service of process on Union of India - acceptance of notices by Central Government Branch Secretariat - designated legal cells for Customs, Central Excise and Service Tax - mandated channels for service in Direct and Indirect Tax matters - System and designated channels for receipt of notices and service upon the Union of India in the Bombay High Court are governed by existing orders, circulars and website notices and must be followed so that the Union is properly represented. - HELD THAT: - The Court recorded and relied upon the Department of Legal Affairs order of 30.11.2005 (transferring certain tax briefs to the Income Tax Department and restricting filing by Central Government Advocates), the 14.10.2008 circular specifying delivery points for Customs, Central Excise and Service Tax matters, and the Branch Secretariat notice published on the High Court website detailing timings and departments for receipt of notices. Having placed those instruments on record, the Court observed there is no reason for recurrence of non-appearance where the acceptance points and procedures are already prescribed. The Union's counsel undertook to apprise the concerned officers and departments and to coordinate with the Registry for publication/communication in respect of Direct and Indirect Tax matters. On that basis the Court dispensed with further affidavit filing and recorded expectation of compliance so that service, notice and representation proceed through the mandated channels. [Paras 7, 8, 9, 11, 12]

Existing departmental orders, circulars and the Branch Secretariat notice govern service/receipt of proceedings for the Union; the Union must ensure its officers/departments follow those designated channels and coordinate with the Registry.

Failure to appear and imposition of costs - Whether substantial costs should be imposed for non-appearance of representatives of Respondent Nos. 1 to 4. - HELD THAT: - Although earlier hearings recorded non-appearance by Respondent Nos. 1 to 4 and the Court warned that substantial costs may be imposed, the Court refrained from imposing costs after being shown the departmental orders and on receiving the undertaking from Union's counsel that the concerned officers/departments would be informed and matters would be attended to. The Court therefore exercised its discretion not to impose costs in the circumstances. [Paras 1, 10]

Court not inclined to impose costs having noted the existing orders and the assurance given by Union's counsel.

Final Conclusion: The Court recorded the departmental orders and circulars governing service on the Union of India, directed that the Union inform its officers/departments to ensure representation through the designated channels, dispensed with further affidavit filing, and declined to impose costs in view of the material placed and the undertaking given; matter stood over to 5 January 2023.

Ultra vires - liability to pay electricity duty - definition of "bulk supply" - assessee under the Electricity Duty Rules - initiation/genesis of assessment and jurisdictional vires - construction and effect of Jharkhand Electricity Duty (Amendment) Act, 2011 and Jharkhand Electricity Duty (Amendment) Rules, 2012

Ultra vires - liability to pay electricity duty - construction and effect of Jharkhand Electricity Duty (Amendment) Act, 2011 and Jharkhand Electricity Duty (Amendment) Rules, 2012 - Effect of the Court's earlier declaration that Section 5 of the Jharkhand Electricity Duty (Amendment) Act, 2011 is ultra vires on the liability of consumers to pay electricity duty. - HELD THAT: - The Court recorded that Section 5 of the Jharkhand Electricity Duty (Amendment) Act, 2011 - the provision by which Section 4 of the Bihar Electricity Duty Act, 1948 was amended to cast liability on consumers - has been declared ultra vires by this Court in Anjaney Ferro Alloys Ltd. Consequently, the statutory position prior to that amendment remains operative: the liability to pay electricity duty is of the licensee and not of the consumer. The impugned assessment orders were in substance founded upon the struck-down provision (referred to in the orders as Section 5/Section 4 of the Amendment Act) and therefore cannot validly impose liability on the petitioner as a consumer. [Paras 9]

Since the amendment which purported to impose liability on consumers is ultravires, consumers (including the petitioner) are not liable to pay the electricity duty; the liability remains that of the licensee.

Definition of "bulk supply" - assessee under the Electricity Duty Rules - Whether the petitioner, a hotel and HT consumer, falls within the definition of 'bulk supply' and hence within the definition of 'assessee' under the Amendment Rules, 2012 so as to be liable to pay duty. - HELD THAT: - The Court examined the Amendment Rules, 2012 definitions. 'Bulk supply' under the Rules is restricted to supply of energy to industrial and mining consumers supplied with high-tension voltage for their premises. The statutory definition of 'industrial unit' (Electricity Duty Act, 1948) was considered and it was noted that a hotel does not fall within the definition of an industrial consumer. As the petitioner is not an industrial or mining consumer, supply to it does not qualify as 'bulk supply' under the Rules and therefore the petitioner cannot be treated as an 'assessee' liable under those Rules. The Court further noted that even the Amendment Rules do not, on their proper construction, create liability on the petitioner. [Paras 11]

The petitioner is not a 'bulk supply' consumer nor an 'assessee' under the Amendment Rules, 2012, and therefore cannot be held liable to pay the electricity duty on that basis.

Initiation/genesis of assessment and jurisdictional vires - Validity of the assessment proceedings which were initiated on the basis of information from the local JBVNL unit and whether such genesis vitiates the assessment orders. - HELD THAT: - The Court found that the impugned assessments were initiated and grounded on information from the local unit of JBVNL that HT consumers must pay electricity duty. The assessing authorities mechanically followed that information without proper appreciation of the law. The Court applied the established principle that if the initiating action or foundation of a proceeding is bad in law, all consequential proceedings founded on it must fail. Because the genesis (the information relied upon) was incorrect in law, the subsequent assessment proceedings and the orders passed thereon were arbitrary and void ab initio. [Paras 6, 7]

The assessment proceedings founded on the legally bad genesis are void ab initio and unsustainable.

Final Conclusion: Writ petitions allowed; the impugned assessment orders dated 15.02.2020 and the notices of demand dated 19.02.2020 for the financial years 2011-12, 2012-13, 2013-14 and 2014-15 are quashed and set aside as unsustainable in law for the reasons stated above.

Notional seniority - operation of waiting list - effect of higher court direction on appointment and seniority - placement at the end of the select list - entitlement to pay only from date of assumption of charge

Notional seniority - operation of waiting list - placement at the end of the select list - Applicant appointed pursuant to the Supreme Court direction is entitled to notional seniority and consequential benefits by being placed at the end of the select list of candidates who have joined service. - HELD THAT: - The Supreme Court in W.P.(C) No.202/2013 directed consideration of the petitioner for appointment on the basis of his position in the waiting list against one of the vacancies and ordered that consideration be completed within 30 days. That direction was complied with by appointing the applicant. Given that the appointment resulted from operating the waiting list pursuant to the Apex Court's order, the applicant is entitled to be placed in seniority notionally - specifically, at the end of the list of candidates from the original Select List who have joined service. The CAT correctly held entitlement to seniority placement, and the High Court accepted that the operative effect of the Supreme Court's direction determines the applicant's seniority position irrespective of technical arguments regarding recruitment rules. [Paras 13, 14, 16]

Applicant entitled to notional seniority and consequential benefits and shall be placed at the end of the last person appointed from the Select List.

Effect of higher court direction on appointment and seniority - entitlement to pay only from date of assumption of charge - Applicant is not entitled to back wages for the period prior to assumption of charge; pay and service benefits are payable only from the date of joining, notwithstanding notional seniority. - HELD THAT: - While the applicant's notional seniority and other consequential benefits flow from his appointment pursuant to the Supreme Court order, the court distinguished between notional seniority and actual pay entitlement. The CAT's clarification - adopted by the High Court - granted seniority benefits except salary for the period during which the applicant had not worked. The High Court found detailed arguments based on Rule 10 unnecessary in view of the Apex Court's direction but affirmed that pay shall commence only from the date the applicant assumed charge. [Paras 8, 16]

Applicant entitled to seniority and consequential benefits but pay only from the date of assuming charge.

Final Conclusion: Writ petitions filed by the Government challenging the CAT orders are dismissed; the appointment made pursuant to the Supreme Court direction stands, the applicant is to be granted notional seniority placed at the end of the select list, and pay is limited to the period after assumption of charge.