Money laundering offence: bail refused where admissible witness statements and accused failed to discharge burden showing non involvement. Bail was refused where admissible witness statements provided a prima facie basis to implicate the appellant in money laundering and the accused failed to show non involvement or low risk of reoffending. Money laundering was treated as an independent offence tied to dealings in proceeds, admissible statements supported inferences from financial transactions and concealment, parity was held non automatic, and discretionary release for trial delay does not guarantee bail in serious economic offences.
GST rectification: inadvertent filing errors may be amended when no revenue loss, encouraging taxpayer-friendly compliance. Rectification of GST return entries is permissible where errors are inadvertent and do not cause revenue loss. The court interprets CGST/MGST filing and correction provisions purposively, recognising practical difficulties faced by taxpayers and the central importance of accurate returns for downstream GST processes. Authorities are urged to permit amendments by online or manual means in cases of genuine mistake without fiscal prejudice, promoting a taxpayer friendly and pragmatic approach consistent with other high court decisions.
CoC autonomy in insolvency: CoC may decide liquidation prior to plan confirmation and section 65 targets malicious filings. Committee of Creditors autonomy over liquidation is recognized: the CoC may lawfully decide liquidation under Section 33(2) before confirmation of a resolution plan, and Section 65 requires clear evidence of filings made for purposes other than insolvency resolution before imposing penal consequences.
Bail considerations: Serious economic offence allegations constrain pretrial liberty when evidence tampering and investigative integrity risks exist. Bail considerations focus on the seriousness of alleged tax evasion, forgery and conspiracy under the IPC, the risk of evidence tampering or witness influence, and the accused's antecedents; ongoing investigation complexity and public interest in protecting the exchequer weigh against interim release. Arguments relying on GST compounding or procedural non-compliance are distinguished from IPC offences, and precedents concerning customs or GST matters are treated as contextually different when assessing pretrial liberty.
Input Tax Credit refund: prior IGST refunds do not bar unutilized ITC claims; supporting evidence required for reconsideration. The court analysed entitlement to refund of unutilized Input Tax Credit under an inverted duty structure and held that prior IGST refunds for zero-rated supplies do not automatically bar a Section 54 refund claim; absence of debit entries alone cannot justify rejection. The decision emphasises the requirement to submit comprehensive supporting documents distinguishing inputs affected by the inverted duty structure and directs reconsideration allowing additional evidence and a reasoned order consistent with statutory conditions and principles of natural justice.
Reasonable Time for Adjudication: undue delay undermines natural justice and precludes indefinite postponement of proceedings. Adjudication of an excise Show Cause Notice must occur within a reasonable time so as to preserve evidentiary integrity and witness availability; prolonged inaction between issuance of an SCN and hearing prejudices the respondent, infringes the principles of natural justice, and requires statutory time-limit language to be interpreted to prevent indefinite delay.
Second-hand goods import classification clarified: multifunction capital equipment falls under unrestricted category, subject to compliance and duty measures. The court determined that imported second-hand multifunction print and copying machines fall within the Foreign Trade Policy 2023 unrestricted category I(d) for second-hand capital goods and were incorrectly classified as prohibited by customs; it contrasted the 2023 and 2019 policies, relied on precedent, and directed the customs department to pass appropriate orders within a reasonable time while permitting provisional measures subject to enhanced duty payment.
Condonation of delay: focus on admissibility of the request, not the substantive merits of the tax claim. The legal principle requires that the authorized officer considering a condonation application under Section 119(2)(b) confine inquiry to the admissibility of the request and the justification for delay; assessment of the substantive merits of the taxpayer's income or loss claim is not part of the condonation exercise, and evidentiary review is limited to matters relevant to excusing the delay.
Penalty under CGST law prompts appeal remedy and partial refund direction, preserving pre-deposit and taxpayer rights. The adjudicating officer withdrew the demand for inadmissible input tax credit and related interest and penalty, while separately imposing a penalty under Section 122(1)(vii) of the CGST Act adjusted against amounts paid by the petitioner. The court recognized the petitioner's appellate remedy and directed a partial refund subject to retention as pre-deposit, reflecting the procedural interplay between administrative adjudication and judicial review and safeguarding taxpayer rights during appeal.
Interplay of sales and bogus purchases: sales consistency limits rejection of purchases and favors gross profit alignment for taxation. For traders, rejection of purchases cannot proceed in isolation where declared sales exhibit regularity; cost of goods sold must be coherent with recorded sales. Tax adjustments should compare differential gross profit margins and align challenged purchases with genuine GP rates, allowing proportional taxation reconciliations rather than adding the entire value of disputed purchases as income.
Proportionality in tax assessments preserved: additions limited to profit element where sales are accepted, not entire purchase. Alleged accommodation entries may be restricted to taxation of the profit element where sales from those purchases are accepted; the tribunal limited an addition accordingly and the court upheld that proportionality. Separately, an enhanced gross profit addition was deleted because there was no concrete evidence to displace the assessee's declared book results; the court agreed that revenue must meet the evidentiary burden before altering declared figures.
Tax Deducted at Source protection: taxpayers not liable for employer's failure to deposit TDS; refunds should not be adjusted. The note explains that TDS credit protection bars holding an assessee liable for tax already deducted by an employer who failed to remit it; employers bear the deposit obligation as tax-collecting agents. Adjusting taxpayer refunds or using coercive measures to recover demands arising from employer non-deposit contravenes the protective principle and indirect recovery limits, and authorities should correct credit mismatches rather than treat deductees as liable.
Proceeds of crime: PMLA targets handling of tainted assets even where the person is not named in the predicate offence, scope narrowed for conspiracies. Existence of proceeds of crime is a prerequisite for an offence under the PMLA and must be derived from a scheduled offence; the PMLA reaches persons who handle, conceal or possess tainted proceeds even if not named in the predicate offence. Conspiracy under Section 120B becomes a scheduled offence only when the conspiracy aims to commit an offence already listed in the PMLA Schedule, narrowing scheduled-offence scope. Property acquired prior to the scheduled offence cannot be treated as proceeds, whereas disputed acquisitions require trial determination of their linkage to tainted funds.
Resolution applicant eligibility under Section 29A clarified; MSME exemption under Section 240A applies at plan submission stage. Whether a resolution applicant is disqualified under Section 29A depends on the ineligibility criteria and the timing of assessment; the operative date for eligibility is the submission of the resolution plan, and Section 240A provides an MSME-targeted exemption from certain disqualifications to protect continuity and livelihoods.
Tax exemption registration: tribunal ordered reconsideration where delay arose from bona fide reliance on provisional registration and circulars. The Tribunal held that rejection of the final registration application under Section 80G for being time barred was improper where the Commissioner did not consider administrative circulars extending filing timelines and the trust's bona fide reliance on provisional registration; the ITAT set aside the order and directed reconsideration with an opportunity to be heard.
Arm's Length Principle enforcement: comparables, functional profiling, and admissibility of additional evidence determine transfer pricing outcomes. Dispute concerns determination of Arm's Length Price (ALP) for international transactions, focusing on comparable selection, adjustments for functional differences, and functional profiling's effect on ALP reliability. The Tribunal also deals with the admissibility of additional evidence on appeal and scrutiny of changes in benchmarking approaches across assessment years, stressing contemporaneous, consistent documentation and justification for methodological changes while balancing procedural finality and factual completeness.
Pre-deposit requirement undermined by tribunal restoration without compliance, raising jurisdictional and laches concerns in excise appeals procedure scrutiny. The Tribunal's restoration and allowance of excise appeals without a prior pre-deposit requirement raises whether a lower tribunal may waive mandatory pre-deposit obligations and whether such action aligns with supervisory limits imposed by higher court directives and doctrines like functus officio and res judicata.
Shareholder access to confidential corporate documents affirmed where confidentiality is overstretched, strengthening minority investor protections. Minority shareholders are entitled to access corporate documents where confidentiality claims are overstated; confidentiality and privilege cannot be used to withhold information necessary for assessing compliance with securities law. SEBI's settlement framework cannot shield material information from shareholder scrutiny; regulatory processes must balance investigatory integrity with transparency and natural justice. Non compliance with Minimum Public Shareholding norms undermines market integrity and minority rights, and settlements of serious violations require sufficient transparency to protect investor interests.
Retrospective jurisdiction of regulator challenged; effect on auditor liability, standards compliance and sanctions under companies law. Allegations of professional misconduct assert auditors failed to comply with statutory audit obligations, disclose material facts, exercise due diligence, obtain necessary information, and identify departures from accepted audit procedures. Appellants challenge the regulator's retrospective jurisdiction, invoke constitutional protection against retrospective penalization, and allege procedural breaches of natural justice; the regulator maintains jurisdiction, contends it afforded hearing opportunities, and asserts substantive non compliance with Standards on Auditing.
Territorial jurisdiction disputes in securities cases shape venue decisions and challenge regulatory settlement revocations and discretion. Disputes over venue in securities enforcement pivot on territorial jurisdiction and forum non-conveniens, using cause of action and convenience factors to determine appropriate forum. SEBI's settlement regime under the SEBI (Settlement Proceedings) Regulation 2018 and the regulator's power to revoke settlements raise questions about regulatory discretion, enforceability of negotiated resolutions, and implications for corporate governance and market integrity, while High Courts' supervisory role under Article 226 intersects with statutory enforcement mechanisms.
Capital gains exemptions for specified restructurings preserve tax neutrality and facilitate cross-border and corporate reorganisations. Clause 70 of the Income Tax Bill, 2025 designates specified classes of transactions as not regarded as transfer for capital gains purposes, exempting ... Summary
Capital gains exemptions for specified restructurings preserve tax neutrality and facilitate cross-border and corporate reorganisations.
Clause 70 of the Income Tax Bill, 2025 designates specified classes of transactions as not regarded as transfer for capital gains purposes, exempting partitions of Hindu undivided families, transfers by will, gift or irrevocable trust, transfers between parent and subsidiary companies, amalgamations and demergers (including foreign company reorganisations), conversions and exchanges of securities, securities lending, reverse mortgage arrangements, mutual fund consolidations, transfers involving art and cultural institutions, and succession of business entities, thereby aligning with and expanding the scope of existing non-transfer provisions in Section 47 of the 1961 Act.
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