TMI Tax Updates - e-Newsletter
January 16, 2025

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax

Articles

1. No GST leviable on free bus transportation facility provided to its Employees by the Employer

   By: Bimal jain

2. Export of Honey from India

   By: YAGAY andSUN

3. Export of SCOMET Items from India

   By: YAGAY andSUN

4. Importance of Nil TDS Return Filing for Businesses

   By: Ishita Ramani

5. UPI – A WAY FORWARD FOR CASHLESS BANKING

   By: DR.MARIAPPAN GOVINDARAJAN

6. Unlocking Trade Potential & Understanding Cumulation in Rules of Origin for India

   By: DrJoshua Ebenezer

News

1. The cumulative exports (merchandise & services) during April-December 2024 is estimated at USD 602.64 Billion, as compared to USD 568.36 Billion in April-December 2023, an estimated growth of 6.03%.

2. DPIIT enters into strategic partnership with ITC to bolster India’s startup ecosystem and innovation

3. Encubay Amplifies the Dialogue on Women and Wealth at Davos, During World Economic Forum, 2025

4. PMLA court grants bail to former WB minister Jyoti Priya Mallick in ration distribution case

5. 10 foundational principles of governance have been the pillar of this decade of unprecedented transformation: Union Minister Shri Piyush Goyal, in Chennai

6. CCI approves the proposed acquisition of 34% equity shareholding of Ashoka Concessions (ACL) by Ashoka Buildcon (ABL) and certain convertible instruments of ACL by ABL and Viva Highways (Viva); and 26% shareholding of Jaora Nayagaon Toll Road Company (JN) by Viva

7. Free Trade Agreement talks with India have been relaunched: UK

Notifications

FEMA

1. FEMA 10(R)(5)/2025-RB - dated 14-1-2025 - FEMA

Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) (Fifth Amendment) Regulations, 2025

Income Tax

2. 07/2025 - dated 14-1-2025 - IT

Central Government approves Central Power Research Institute (CPRI) Bengaluru under the category of ‘Research Association’ for ‘Scientific Research’ for the purposes of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961

Circulars / Instructions / Orders

DGFT

1. 41/2024-25 - dated 15-1-2025

Addition of new laboratory in Para 4.73 of the Handbook of Procedures, 2023

2. 40/2024-25 - dated 15-1-2025

Standard Operating Procedure/ Guidelines for Voluntary Disclosure of Non Compliance/ Violations related to Export of SCOMET Items and SCOMET Regulations.

Highlights / Catch Notes

GST

• Petition dismissed, appeal remedy available under CGST Act Section 107.

  Case-Laws - HC : The HC held that the petition was not maintainable as the petitioner had an alternative efficacious remedy of appeal u/s 107 of the CGST Act, 2017. The absence of a corresponding state notification did not render the central N/N. 56/2023-Central Tax dated 28.12.2023, issued u/s 168-A of the CGST Act, ultra vires. The petitioner failed to raise any ground worth consideration, and the HC dismissed the petition, being devoid of merit, directing the petitioner to avail the appellate remedy.
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• Proper Show Cause Notice mandatory for tax determination under GST Section 73.

  Case-Laws - HC : The HC held that the Summary of Show Cause Notice (SCN) along with the attachment containing tax determination cannot be considered a valid initiation of proceedings u/s 73 without issuance of a proper SCN. The issuance of SCN and Statement of tax determination by the Proper Officer are mandatory requirements in addition to the Summary in GST DRC-01 and DRC-02. The impugned orders were contrary to Section 73 and Rule 142(1)(a) as they were passed without issuing a proper SCN. Rule 26(3) cannot be applied to Chapter XVIII as it refers only to Chapter III. The HC opined that when the statute mandates an opportunity of hearing u/s 75(4), it must be provided, and the impugned orders violated this provision. The Summary in DRC-01 cannot substitute the SCN u/s 73(1). The petition was disposed of accordingly.
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• Validity of summary SCN: Impugned GST order quashed for lack of proper show cause notice.

  Case-Laws - HC : The HC quashed the impugned order dated 14.12.2023 for violation of principles of natural justice. The respondent failed to issue a proper and prior show cause notice prescribed u/s 73(1) of the Assam Goods and Services Tax Act, 2017 before passing the order. Mere issuance of a summary of show cause notice in Form GST DRC-01 was held to be non-compliance with Section 73(1) read with Rule 142(1)(a). Compliance with Section 73(1) to (8) and (10) to (11), and Rule 142(1) are prerequisites for a valid order u/s 73(9).
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• Notified Area Authority, Vapi not 'local authority' for GST exemption.

  Case-Laws - HC : The HC held that the review application was partly allowed. There was no mistake apparent on record regarding the application of the Supreme Court decision and the definition of "local authority" under the GST Act. The Notified Area Authority, Vapi does not qualify as a "local authority" or "governmental authority" for GST exemption on pure services or supply of goods. Review jurisdiction cannot be exercised as an appellate jurisdiction to correct errors of law, as it would amount to the Court sitting in appeal over its own judgment.
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• Cancelled GST registration restored if statutory dues paid till cancellation.

  Case-Laws - HC : HC allowed petition for restoration of cancelled GST registration. Petitioner required to comply with statutory obligation of paying GST. Respondent directed to intimate petitioner about outstanding statutory dues till date of cancellation for reconsideration of revocation of cancelled registration.
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• Refund: Amended Rule 89(5) formula applies retrospectively, CBIC circular quashed.

  Case-Laws - HC : Petitioners entitled to refunds under amended Rule 89(5) formula retrospectively; CBIC circular restricting retrospective application quashed. HC relied on Ascent Meditech Ltd. case, holding amendment curative and clarificatory. Rule made absolute, petitions allowed.
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• Madras HC quashes order for violating natural justice principles, remands matter.

  Case-Laws - HC : The HC quashed the order for violating principles of natural justice as the Adjudicating Authority failed to consider the reply filed by the petitioner along with supporting documents. The matter was remanded to pass a fresh order after considering petitioner's reply.
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• Deceased person's assessment order quashed as nullity due to lack of jurisdiction.

  Case-Laws - HC : HC quashed assessment order issued against deceased person as nullity. Order made in name of dead person without jurisdiction despite availability of alternate remedy. Exception to alternate remedy rule applies where order is without jurisdiction. Petition disposed off.
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• Writ petition allowed; order set aside for violating natural justice, exceeding notice.

  Case-Laws - HC : Writ petition maintainable despite alternative remedy due to violation of principles of natural justice and lack of jurisdiction. Impugned order set aside by HC for non-application of mind to petitioner's objection and traversing beyond show cause notice in contravention of Section 75(7) of the Act. Failure to consider reply vitiates proceedings under settled law. Petition disposed of.
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Income Tax

• Bad debts written off deductible for computing MAT u/s 115JA: SC.

  Case-Laws - SC : Assessee entitled to deduct bad debts written off u/s 36(1)(7) of Income Tax Act. SC dismissed revenue's SLP against High Court order allowing deduction, following its earlier decisions in Vijaya Bank and HCL Comnet Systems & Services Ltd. cases on treatment of bad debts in computation of book profits for Minimum Alternate Tax u/s 115JA.
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• Reopening Assessment Requires Credible Information Contradicting Taxpayer's Claims.

  Case-Laws - HC : HC allowed the petition and set aside the impugned order and notice u/s 148A(b). AO failed to establish that petitioner had received any amount exceeding Rs. 50,00,000/- which escaped assessment. AO is required to form an opinion based on credible information contradicting petitioner's assertion that aggregate transaction value was less than Rs. 50,00,000/-. Merely stating transactions existed without substantiating higher value is insufficient for reopening assessment u/s 147.
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• Undisclosed Shipgram income: HC upholds 30% addition based on concurrent allocation findings.

  Case-Laws - HC : HC restricted addition of undisclosed income from Shipgram Scheme to 30% based on concurrent factual findings by CIT(A) and ITAT regarding allocation between assessee and M/s. Shivganga Builders. Appeals dismissed, upholding Tribunal's order.
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• Alleged capital gains tax evasion by underreporting sale consideration, HC declines to quash complaint.

  Case-Laws - HC : Petitioners accused of offences u/ss 276C(1) r.w.s. 277 of the Income Tax Act, 1961 for evading capital gains tax by showing only part sale consideration in sale deed while remaining amount paid in cash. HC declined to exercise inherent powers u/s 482 CrPC to quash complaint, holding allegations disclose cognizable offences. Power to quash FIR/complaint an exception, not ordinary rule, to be exercised in rarest of rare cases when allegations do not constitute cognizable offence.
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• NCLT-approved Resolution Plan extinguishes past dues, bars reassessment.

  Case-Laws - HC : Company insolvent. NCLT approved Resolution Plan vide order 20.06.2022, upheld by NCLAT dismissing respondent-Authority's appeal on 21.05.2024. Per Ghanashyam Mishra [2021 (4) TMI 613 - SC], once NCLT approves Resolution Plan, all past dues extinguished, respondent-Authority cannot reopen assessment. NCLAT's dismissal order merged with NCLT's approval order, achieving finality u/s 62, IBC. Impugned notice u/s 148 quashed, untenable.
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• JAO vs FAO: Jurisdictional Assessing Officer Can Continue Reassessment Under New Faceless Regime.

  Case-Laws - HC : The HC held that the jurisdictional assessing officer (JAO) who issued the original notices under the old regime can continue reassessment proceedings and pass assessment orders under the new faceless regime (FAO). Treating the old notices as issued u/s 148A, the JAO is entitled to examine replies, take decisions, and pass reassessment orders following the new procedures. The HC disagreed with contrary views of Telangana HC and distinguished other cases. Petitions were dismissed, allowing JAO to decide on merits with condonation of delay due to pending writ petitions.
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• Assessee allowed reduced 22% tax rate u/s 115BAA for AY 2022-23 despite delay in Form 10IC filing.

  Case-Laws - AT : The ITAT held that the assessee is entitled to opt for the reduced tax rate u/s 115BAA for the AY 2022-23, despite the delay in filing Form 10IC for the AY 2021-22. The Form 10IC, once filed, is applicable for subsequent years, and the CIT(A) erred in denying the benefit. The ITAT set aside the orders of the AO and CIT(A) and directed the AO to allow the reduced tax rate of 22% u/s 115BAA for the AY 2022-23.
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• Assessee's negligence bars condonation of 2655-day delay in filing appeal.

  Case-Laws - AT : The ITAT dismissed the condonation petition filed by the assessee for a delay of 2655 days in filing an appeal. The assessee's contention of handing over appeal papers to an advocate and chartered accountant for filing was held insufficient to establish due diligence. The assessee's failure to appear before the AO and CIT(Appeals) despite twelve notices further demonstrated lack of diligence. The inordinate delay of 2655 days was attributable solely to the assessee's negligence, rendering it an unfit case for condonation of delay.
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• Cash deposits treated as genuine sales proceeds, commission income by ITAT.

  Case-Laws - AT : Assessee engaged in commission agency business for procuring fruits/vegetables. Cash deposits in bank explained as sale proceeds and commission income. ITAT held source of cash deposits fully explained, deleting addition made by CIT(A) u/s 68. Decided in favour of assessee.
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• ITAT quashes IT assessments u/s 153C for 5 years due to invalid 'satisfaction note'.

  Case-Laws - AT : ITAT held that assessment framed u/s 153C for AY 2011-12 is barred by limitation and vitiated due to lack of valid 'satisfaction note', rendering entire proceedings under s. 153C a non-starter. For AYs 2012-13 to 2015-16, ITAT found legal infirmities in 'satisfaction note' lacking objectivity, vitiating assumption of jurisdiction u/s 153C. Resultant assessment orders passed u/s 153C for these AYs were quashed being non-est.
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Customs

• HC quashes DGFT's mid-term revision of Bullion TRQ allocations under India-UAE CEPA.

  Case-Laws - HC : The HC quashed the mid-term revision of Bullion TRQ allocations under the India-UAE CEPA for FY 2024-25 by the DGFT due to violation of natural justice principles. The petitioner was not granted a hearing opportunity or sufficient prior notice. Relying on its previous decision in KAKA GOLD LLP v. DGFT, the HC directed the DGFT to re-examine the issues raised by the petitioners after providing them an opportunity to be heard, maintain current allocations during the review process, and clearly communicate the criteria for TRQ revisions. Fresh orders were to be issued within three weeks after the petitioners filed a review application within one week.
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• Demand of Customs Duty: Hon'ble SC's Edelweiss ruling applied: Approved resolution plan extinguishes claims not included.

  Case-Laws - HC : Hon'ble SC in Edelweiss case held that once resolution plan approved u/s 31(1) IBC, no claim except those approved in plan shall survive. Applying this to present case, HC held that after approval of resolution plan, no new customs duty, interest or penalty proposed by respondent can be levied as IBC overrides other laws like Customs Act regarding extinguishment of claims not included in approved plan. Appeal allowed.
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• Dry dates import from UAE, not Pakistan, penalties set aside due to lack of intent.

  Case-Laws - AT : The CESTAT held that the dry dates imported by the appellant originated from UAE and not Pakistan, based on the certificate of origin issued by UAE authorities which the Principal Commissioner failed to prove as forged. It set aside the penalties imposed u/ss 114A and 114AA of the Customs Act, as there was no willful mis-statement or suppression of facts by the appellant, who had made the declaration based on available documents. The appellant was unaware that the goods originated from Pakistan. The appeal was allowed.
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• Customs broker's license revocation set aside for violating time limits.

  Case-Laws - AT : Customs broker's license revoked by Commissioner for breach of regulations. CESTAT allowed appeal, holding that failure to issue show cause notice within 90 days of receiving offence report and delay in passing final order beyond 90 days after enquiry report violated time limits under Customs Brokers Licensing Regulations 2018. Revocation of license set aside due to non-compliance with mandatory time limits.
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IBC

• Lenders' appeal allowed against rejection of insolvency plea; NCLAT directs reconsideration of default.

  Case-Laws - AT : The NCLAT set aside the impugned order and allowed the appeal, holding: i) No fault in the assignment by lenders to Omkara Assets Reconstruction Pvt. Ltd. ii) Proceedings not barred by res judicata. iii) Corporate debtors running profitable hotels, making payments to lenders. iv) Adjudicating authority erred in not considering Cash Management Agreement for finding default. v) Lenders obligated to maintain DSRA amount from loan agreement towards repayment. vi) Corporate debtor disputed default before adjudicating authority. vii) End use certificate not sufficient to reject corporate debtor's claims on use of ECLGS funds by lenders. viii) Adjudicating authority to reconsider default afresh under ECLGS-1, loan agreement after examining relevant materials like CMA, DSRA. ix) No finding of default under ECLGS-2 by adjudicating authority.
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• Corporate debtor's insolvency petition upheld after defaulting on financial debt.

  Case-Laws - AT : Corporate debtor defaulted in repaying financial debt owed to financial creditor. NCLAT dismissed appeal, upholding orders of adjudicating authority. Transaction qualified as financial debt under IBC. Corporate debtor's audited financial statements from 2012-2017 acknowledged debt. Default established as per Supreme Court's interpretation of acknowledgment of debt under Limitation Act for IBC proceedings. No infirmity found in adjudicating authority's orders allowing insolvency petition against corporate debtor for default.
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VAT

• Tax Scheme Benefit Denial Contemptuous, Rajasthan HC Orders Fresh Order Compliance.

  Case-Laws - HC : Rajasthan HC held respondent-contemnor in contempt for disobeying its earlier judgment by denying petitioner benefit of amended tax scheme effective 23.02.1995. Respondent directed to recall contemptuous order of 08.09.2016 and pass fresh order complying with HC's judgment granting petitioner benefit of amended scheme. Matter listed on 10.02.2025.
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• Property Sold Under SARFAESI Prevails Over Later Sales Tax Charge.

  Case-Laws - HC : Charge created by Sales Tax Department over property subsequent to charge created by bank under SARFAESI Act held unsustainable. HC quashed charge created by Sales Tax Department in 2018 over property already sold by bank to petitioners under SARFAESI Act, directing removal of charge and deletion of mutation entries in revenue records, as bank's prior charge took precedence as per legal position. Petition disposed of.
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Service Tax

• Appellant eligible for service tax refund; time limit extended to 6 months retrospectively.

  Case-Laws - AT : The CESTAT allowed the appeal and held that the appellant is eligible for refund of input services as claimed under Notification No. 41/2007-S.T. dated 06.10.2007. The time limit for filing refund claims was extended from 60 days to six months by Notification No. 32/2008-S.T. dated 18.11.2008, which has retrospective application. The substantial benefit of refund cannot be denied merely on procedural grounds of filing claims beyond 60 days for invoices relating to the relevant quarter. The CESTAT relied on its earlier decision in Commissioner of CGST & Central Excise, Jamshedpur v. M/s Rungta Mines Ltd.
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• Limitation period for tax demand; intent to evade required for extension.

  Case-Laws - AT : Demand for FY 2013-14 barred by limitation; extended limitation requires evidence of intent to evade tax. Mere non-disclosure insufficient to invoke extended period. Corporate guarantees without consideration not taxable. Demand of Rs. 3,105 for legal services upheld; other demands set aside. CESTAT allowed appeal in part.
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• Dumpers, tippers used for mining services qualify as 'inputs' for CENVAT credit.

  Case-Laws - AT : The CESTAT held that dumpers and tippers used by the respondent for providing mining services qualify as 'inputs' u/r 2(k) of the CENVAT Credit Rules, 2004, allowing eligibility for CENVAT credit. Despite being classifiable under Chapter 87, they do not fall under the exclusion for 'motor vehicles' based on the Supreme Court's interpretation in Belani Ores Ltd. vs. State of Orissa. Following the binding precedent in Boving Fouress Ltd. vs. Commissioner of Central Excise, Chennai, the Revenue's appeal was dismissed.
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Central Excise

• Earthmoving machines not "automobiles" - amendment taxing parts prospective.

  Case-Laws - AT : Appellants undertook packing/repacking, labeling/re-labeling of machine parts. Issue was classification of earthmoving machines - as automobiles or not. CESTAT held amendment making parts/components/assemblies of earthmoving equipment taxable under "Automobiles" effective prospectively from 29.04.2010, not retrospectively. Earthmoving machines not "automobiles" in common parlance. Amendment to include them under "Automobiles" prospective from 29.04.2010. Impugned orders set aside. Appeal allowed.
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Case Laws:

• GST

• 2025 (1) TMI 728
  Maintainability of petition - alternative efficacious remedy of appeal under Section 107 of the CGST Act of 2017 - N/N. 56/2023-Central Tax dated 28.12.2023, issued under Section 168-A of the Central Goods and Services Tax Act, 2017 - HELD THAT:- It is an admitted position that there since the petitioner has alternative efficacious remedy of appeal under Section 107 of the CGST Act of 2017. The petitioner is seeking declaration of N/N. 56/2023 dated 28.12.2023 to be ultra vires on the ground that the corresponding notification has not been issued by the respondent No. 2/State Government. That cannot be a ground for seeking declaration of the notification impugned herein to be ultra vires. Even otherwise, no ground worth consideration has been raised by the petitioner in this petition and the petitioner is always at liberty to take recourse to the remedy of appeal as has been provided under Section 107 of the CGST Act, 2917. It is not a case where the petitioner is remediless. The central notification was valid, the absence of a state notification did not affect its enforceability, and the petitioner should seek the alternative appellate remedy. This is not a fit case where this Court should exercise its powers under Article 226 of the Constitution of India and as such, this petition, being devoid of merit, is accordingly dismissed.

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• 2025 (1) TMI 727
  Challenge to notice dated 4.8.2024 issued by respondent no.2 - availment of ITC for effecting taxable as well as exempted supply wherein no separate record was allegedly maintained by the petitioner - mis-classification of product as an exempted goods - HELD THAT:- A bare perusal of the show cause notices issued to the petitioner reveals that the subject matter of both the notices is totally different from each other and, therefore, apparently there is no bar in law in issuing two show cause notices for the same period with a different/distinct subject matter and, therefore, to that extent, no interference to the show cause notice is made out. So far as the plea pertaining to two show cause notices being adjudicated by two different authorities is concerned, the petitioner would be free to approach the said authorities and, in case, petitioner approaches the said authorities, the authority would take a view on the subject and examine viability of both the show cause notices being adjudicated by the same authority. Petition disposed off.

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• 2025 (1) TMI 726
  Grant of anticipatory bail - offences under Sections 420, 467, 468, 471, 474 and 477-A IPC and Section 132 (1) (b) of Central Goods and Sevices Tax Act, (CGST), 2017 - HELD THAT:- In the present case, the FIR was registered by the police on 18.06.2019 and now, the petitioner is sought to be arrested after more than 05 years and 06 months. Still further, the documentary evidence has already been taken into possession by the police, during the course of investigation and the petitioner has reversed the ITC availed by the firm of the petitioner. The present petition is allowed and the petitioner is granted concession of anticipatory bail, subject to the conditions as provided under Sections 482 (2) of B.N.S.S.

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• 2025 (1) TMI 725
  Valid service of SCN - attachment to the Summary of the Show Cause Notice (SCN) in GST DRC-01 can be considered a valid Show Cause Notice under Section 73 of the CGST/AGST Act, 2017 or not - HELD THAT:- The Proper Officer is required to issue a Show Cause Notice, therefore, the Show Cause Notice is required to specifically mention the reason(s) and the circumstances why the provision of Section 73 had been set into motion. The person against whom the said Show Cause Notice is issued would only have an adequate opportunity to submit a representation justifying that the prerequisites for issuance of Show Cause Notice is not there if and only if the reason(s) for issuance of the Show Cause is specifically mentioned in the Show Cause Notice. The issuance of the Show Cause Notice and the Statement of determination of tax by the Proper Officer are mandatory requirement in addition to the Summary of Show Cause Notice in GST DRC-01 and Summary of the Statement in GST DRC-02. This Court is of the view that the Summary of the Show Cause Notice along with the attachment containing the determination of tax cannot be said to be a valid initiation of proceedings under Section 73 without issuance of a proper Show Cause Notice. The Summary of the Show Cause Notice is in addition to the issuance of a proper Show Cause Notice. Under such circumstances, this Court is of the opinion that the impugned order challenged in the instant writ petition is contrary to the provisions of Section 73 as well as Rule 142 (1) (a) of the Rules as the said impugned Orders were passed with issuance of a proper Show Cause Notice. Whether Rule 26 (3) can be applicable to Chapter-XVIII when the said Sub-Rule on refers to Chapter-III? - HELD THAT:- This Court has duly perused the Summary of the Show Cause Notices wherein the petitioner was only asked to file his reply on a date specified. There was no mention as to the date of hearing and the Column was kept blank. However, the petitioner had sought for an opportunity of hearing which was however not given. In this regard, if this Court takes note of Section 75 (4) of both the Central Act as well as State Act, it would be seen that it is the mandate of the said provision that an opportunity of hearing should be granted when a request is received in writing from the person chargeable with tax or penalty or when any adverse decision is contemplated against such person. The mandate of Section 75 (4) of both the Central and State Act are safeguards provided to the assessees so that they can have a say in the hearing process. This Court is of the opinion that when the statute is clear to provide an opportunity of hearing, there is a requirement of providing such opportunity. In fact a perusal of the Form GST DRC-01 enclosed to the writ petition shows that details have been given as regards the date by which the reply has to be submitted; date of personal hearing; time of personal hearing and venue of personal hearing. It is seen that in the Summary of the Show Cause Notice only the date for submission of reply has been mentioned. This Court is of the view that the Summary of the Show Cause Notice in GST DRC-01 is not a substitute to the Show Cause Notice to be issued in terms with Section 73 (1) of the Central Act as well as the State Act. Irrespective of issuance of the Summary of the Show Cause Notice, the Proper Officer has to issue a Show Cause Notice to put the provision of Section 73 into motion. The Show Cause Notice to be issued in terms with Section 73 (1) of the Central Act or State Act cannot be confused with the Statement of the determination of tax to be issued in terms with Section 73 (3) of the Central Act or the State Act - As initiation of a proceedings under Section 73 and passing of an order under the same provision have consequences. The Show Cause Notice, Statement as well as the Order are all required to be authenticated in the manner stipulated in Rule 26 (3) of the Rules of 2017. Accordingly, this Court is of the opinion that the Impugned Order challenged in the writ petition are in violation of Section 75 (4) as no opportunity of hearing was given. Conclusion - The Summary of the Show Cause Notice along with the attachment containing the determination of tax cannot be said to be a valid initiation of proceedings under Section 73 without issuance of a proper Show Cause Notice. Petition disposed off.

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• 2025 (1) TMI 724
  Violation of principles of natural justice - no proper and prior Show Cause Notice prescribed under sub-section [1] of Section 73 of the Assam Goods and Services Tax Act, 2017 - petitioner was only served with a Summary of Show Cause Notice in Form GST DRC-01, which is also not in conformity with Section 73 read with Rule 142[1][a] of the Assam Goods and Services Tax Act, 2017. HELD THAT:- Non-issuance of a proper and prior Show Cause Notice, as contemplated under sub-section [1] of Section 73 of AGST Act, 2017 and issuance of only Summary of Show Cause Notice and Attachment to Determination of Tax cannot be said to be in compliance with sub-section [1] of Section 73 and sub-rule [1] and Rule 142 of the AGST Rules, 2017, a Summary of Show Cause Notice is held to be not a substitute of a Show Cause Notice, contemplated by the provisions of sub-section [1] of Section 73 to set the proceeding in motion. From the provisions of Section 73, it emerges that the Show Cause Notice is required to be issued by the proper officer, the statement under Section 73[3] is to be issued by the proper officer as well as the Order under Section 73[9] is required to be issued by the proper officer. Compliance of the provisions contained in sub-section [1] to sub-section [8] and sub-section [10] to subsection [11] of Section 73 and sub-rule [1] of Rule 142 are conditions precedent to term an Order passed under sub-section [9] of Section 73 as a valid one. Having regard to the fact that a proper and prior Show Cause Notice under sub-section [1] of Section 73 of the AGST Act, 2017 was not issued along with the Summary of Show Cause Notice in Form GST DRC-01 [Annexure-I to the writ petition] and the Attachment to Determination of Tax [Annexure-II to the writ petition], the impugned Order dated 14.12.2023 [Annexure-IV to the writ petition] is found not sustainable in law and the same deserves to be set aside and quashed. Petition disposed off.

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• 2025 (1) TMI 723
  Rectification of mistake - mistakes apparent on record - Exemption from GST - pure services or supply of goods to the Notified Area Authority, Vapi - Notified Area Authority, Vapi is a local authority or governmental authority ? - HELD THAT:- It is a settled law with regard to the review of the Judgment. Review means reexamination or reconsideration. Basic philosophy inherent in it is the universal acceptance of the human fallibility as held by the Apex Court in case of S. NAGARAJ AND ORS. VERSUS STATE OF KARNATAKA AND ANR. [ 1993 (8) TMI 292 - SUPREME COURT] . A Judgment may be open to review if there is a mistake or error apparent on face of the record as the review jurisdiction is not an appellate jurisdiction where error of law can be corrected. An erroneous decision can be corrected by the higher forum. Review therefore, is by no means an appeal in disguise as held by the Calcutta High Court in case of Joginder Pal Kapoor Versus R L Plantation Pvt. Ltd. [ 2006 (3) TMI 814 - CALCUTTA HIGH COURT ] wherein it is held that We do not consider that this furnishes a suitable occasion for dealing with this difference exhaustively or in any great detail, but it would suffice for us to say that where without any elaborate argument one could point to the error and say here is a substantial point of law which stares one in the face, and there could reasonably be no two opinions entertained about it, a clear case of error apparent on the face of the record would be made out. In view of above settled legal position of law, when the issue as to whether the applicant original petitioner would fall within the local authority or not is decided by this Court, the same cannot be reviewed again as it would amount to sitting in appeal by this Court itself on its own judgment and order. Conclusion - i) Review literally and even judicially means re-examination or reconsideration. Basic philosophy inherent in it is the universal acceptance of human fallibility. Yet in the realm of law the courts and even the statutes lean strongly in favour of finality of decision legally and properly made. ii) There was no mistake apparent on the record regarding the application of the Supreme Court decision and the GST Act s definition of local authority. This application is partly allowed.

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• 2025 (1) TMI 722
  Challenge to assessment order, in Form GST DRC-07 - the proceeding does not contain the signature of the assessing officer - HELD THAT:- The effect of the absence of the signature, on an assessment order was earlier considered by this Court, in the case of AV BHANOJI ROW VERSUS ASSISTANT COMMISSIONER ST VISAKHAPATNAM [ 2023 (2) TMI 1224 - ANDHRA PRADESH HIGH COURT] . A Division Bench of this Court, had held that the signature, on the assessment order, cannot be dispensed with and that the provisions of Sections-160 169 of the Central Goods and Service Tax Act, 2017, would not rectify such a defect. Following this Judgment, another Division Bench of this Court, in the case of M/S. SRK ENTERPRISES, VERSUS ASSISTANT COMMISSIONER (ST) , BHEEMILI CIRCLE, VISAKHAPATNAM [ 2023 (12) TMI 156 - ANDHRA PRADESH HIGH COURT] , had set aside the impugned assessment order. Conclusion - The impugned assessment order would have to be set aside on account of the absence of the signature of the assessing officer, on the impugned assessment order. Petition allowed.

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• 2025 (1) TMI 721
  Cancellation of GST registration - Registration cancelled for not filing the returns for a continuous period of 6 months - right to seek restoration of GST registration through the High Court after the lapse of the appeal period prescribed under Section 107 of the CGST Act, 2017 - HELD THAT:- The petitioner is engaged in execution of works contract. Under the GST regime, the petitioner was required to pay the necessary dues under the CGST or SGST as the case may be or both. These statutory dues are required to be paid by all entities who are registered under the GST regime. Such payments of statutory due(s) contribute towards the revenue collection by the Union. If the petitioner is not included within the GST regime, then any statutory dues that may be required to be deposited by the petitioner will not be deposited and which will not be in the interest of the revenue. Therefore, in order that the petitioner is required to comply with his statutory obligations of payment of taxes under the GST regime, it would be necessary for the departmental authorities to re-consider the prayer of the petitioner for revocation of his cancellation of GST registration. It is directed that the Respondent No. 3, namely Superintendent of Central Goods Services Tax, Guwahati will intimate the petitioner the total outstanding statutory dues, if any, standing in the name of the petitioner till the date of cancellation of his GST registration. Petition disposed off.

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• 2025 (1) TMI 720
  Challenge to assessment order, in Form GST DRC-07, dated 30.04.2024 - the said proceeding does not contain the signature of the assessing officer and also DIN number, on the impugned assessment order - HELD THAT:- A Division Bench of this Court in the case of M/S. CLUSTER ENTERPRISES VERSUS THE DEPUTY ASSISTANT COMMISSIONER (ST) -2 ANDHRA PRADESH, THE ASSISTANT COMMISSIONER (ST) (FAC) , PRODDUTUR-II CIRCLE, THE COMMISSIONER OF STATE TAX, GUNTUR, STATE OF ANDHRA PRADESH. [ 2024 (7) TMI 1512 - ANDHRA PRADESH HIGH COURT] , on the basis of the circular, dated 23.12.2019, bearing No. 128/47/2019-GST, issued by the C.B.I.C., had held that non-mention of a DIN number would mitigate against the validity of such proceedings. Another Division Bench of this Court in the case of SAI MANIKANTA ELECTRICAL CONTRACTORS VERSUS THE DEPUTY COMMISSIONER, SPECIAL CIRCLE, VISAKHAPATNAM-II, THE DEPUTY COMMISSIONER (ST) , STATE OF ANDHRA PRADESH, THE CHAIRMAN, MANAGING DIRECTOR VISAKHAPATNAM, THE EXECUTIVE ENGINEER, OPERATION DIVISION VIZIANAGARAM. [ 2024 (6) TMI 1158 - ANDHRA PRADESH HIGH COURT] had also held that non-mention of a DIN number would require the order to be set aside. Conclusion - The non-mention of a DIN number and absence of the signature of the assessing officer, in the impugned assessment order would have to be set aside. Petition allowed.

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• 2025 (1) TMI 719
  Rejection of refund applications based on Section 54 (3) of the GST Act read with Rule 89 (5) of the GST Rules - rejection of refund on the ground that the refund was not admissible since the refund as per the old formula was already granted to the petitioners - HELD THAT:- Reliance placed in the case of Ascent Meditech Ltd. [ 2024 (12) TMI 511 - GUJARAT HIGH COURT] where it was held that The Circular No. 181/22 dated 10.11.2022 so far as it clarifies that the amendment is not clarificatory in nature is quashed and set aside and it is held that the Notification No. 14/2022 is applicable retrospectively as the amendment brought in Rule 89 (5) of the Rules is curative and clarificatory in nature and the same would be applicable retrospectively to the refund or rectification applications filed within two years as per the time period prescribed under section 54 (1) of the Act. Rule is made absolute to the aforesaid extent. The aforesaid decision of this Court is squarely applicable to the facts of the present group of petitions and nothing could be pointed out by the respondents to persuade this Court from taking a different view. Conclusion - Amendment to Rule 89(5) is applicable retrospectively, the petitioners are entitled to refunds under the amended formula, and the CBIC circular s prospective application is invalid. Petition allowed.

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• 2025 (1) TMI 718
  Violation of principles of natural justice - upholding the difference in Forms GSTR 9 and 9C without considering the reply filed by the petitioner - HELD THAT:- There are no discussion on the reply filed by the petitioner except the reference made thereto in the defence submission in para 6, but, in the discussion and findings, the Adjudicating Authority has not referred to the details submitted by the petitioner and merely because the petitioner did not appear before the respondent authority, it was presumed that the petitioner failed to provide the supporting documents in connection with the reply though the same were annexed with the reply as is evident on perusal of the reply placed on record at page 47 in the Special Civil Application No.4160 of 2024. The matters are remanded back to the Adjudicating Authority to pass de-novo fresh order taking into consideration the reply filed by the petitioner. Petition disposed off by way of remand.

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• 2025 (1) TMI 717
  Seeking withdarwal of petition - Non-payment of GST on royalty payments for the period 2018-19 to 2024-25 - HELD THAT:- The petitioner seeks withdrawal of this petition to approach the concerned authority in response to letter dated 07.11.2024 and raise all the grounds as per law. The same shall be taken care of by the authority concerned and ensure appropriate consequential follow up action as per law. Petition disposed off.

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• 2025 (1) TMI 716
  Cancellation of tender - fresh NIT has been issued prior to the cancellation of the allotment in his favor - HELD THAT:- The NIT was issued by the respondents on 06.06.2023 for allotment of 11 shops, the terms and conditions of the NIT and allotment have been filed by the respondent along with the return. Clause 20.02 specifically mandates that the highest bidder shall deposit 25% of the amount within 21 days from the declaration of the successful bidder, and he is also liable to pay 18% GST on the sanctioned premium amount; therefore, the GST payable on the premium amount was known to the petitioner at the time of submission of the bid; thus, the petitioner has wrongly raised an objection in order to avoid the deposit of 25% of the amount. The petitioner was unnecessarily gaining time to raise this frivolous objection. If the petitioner had an objection about charging 18%, he should not have submitted the bid for the shop; after the allotment, he has unnecessarily caused the financial loss to the respondent by not depositing the entire premium amount and monthly rent. So far as the opportunity is concerned, as stated above, three times the respondents granted the additional time to the petitioner to deposit 25% of the amount, which was to be deposited within 21 days from the date of issuance of the allotment s letter, but the petitioner did not deposit any amount and showed his adamant attitude; therefore, after the issuance of the final notice/opportunity, the respondents had no option but to cancel the allotment and go for a fresh tender. There are no scope of interference in the action of the respondents. Conclusion - i) The petitioner has failed to comply with the terms and conditions of the tender and allotment without any valid reasons. ii) Cancellation of tender upheld. Petition dismissed.

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• 2025 (1) TMI 715
  Seeking release the admitted liability towards the difference of GST amount along with interest - HELD THAT:- The petitioner is entitled to the GST difference and interest, the writ petition was maintainable, and the respondent was liable for the enhanced GST rate. Petition disposed off.

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• 2025 (1) TMI 714
  Refund of the left over TDS in the cash ledger, after his tax liability was discharged by using ITC available in his ledger - violation of Principle of Unjust Enrichment - HELD THAT:- The order of the Appellate Authority, is in a manner of speaking, superseded by the circular, issued by the Central Board of Indirect Taxes and Customs, dated 17.11.2021, bearing Circular No. 166/22/2021-GST, wherein refund of TDS/TCS amounts deposited in the electronic cash ledger is permissible, in accordance with the proviso to sub-section (1) of section 54, read with subsection (6) of section 49 of C.G.S.T. Act. This Court deems it appropriate to dispose of this Writ Petition by setting aside the Order-in-Appeal bearing No. ZH371220OD95299, dated 26.12.2020 and the Order-in-Original bearing No. ZL3710190623900, dated 17.10.2019 and remanding the matter back to the respective respondents for reconsideration in the light of Circular No.166/22/2021-GST. Petition disposed off.

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• 2025 (1) TMI 713
  Maintainability of petition - availability of statutory alternative remedy under section 107 of the (Central Goods and Service Tax) CGST Act, 2017 - HELD THAT:- The Apex court in the case of HINDUSTAN COCA COLA BEVERAGE (P) LTD. VERSUS UNION OF INDIA AND OTHERS [ 2014 (9) TMI 585 - SUPREME COURT] has held that when a statute provides for statutory appeal, the said remedy is to be availed by the litigating parties. The Apex court in the case of ANSAL HOUSING AND CONSTRUCTION LTD. VERSUS STATE OF U.P. AND ORS. [ 2016 (3) TMI 1435 - SUPREME COURT] , has held that when statutory appeal is provided then the said remedy has to be availed. In the case of M/S GODREJ SARA LEE LTD. VERSUS THE EXCISE AND TAXATION OFFICERCUM- ASSESSING AUTHORITY ORS. [ 2023 (2) TMI 64 - SUPREME COURT] , the Apex Court has held that High Court can only interfere in the matters when disputed question of law are involved and not in the question of facts. In the present case, no disputed question of law is involved. Conclusion - The writ petitions cannot be entertained, when a statutory remedy is available unless exceptional circumstances are demonstrated. The principles of natural justice do not automatically require a personal hearing if procedural fairness is otherwise observed. Petition disposed off.

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• 2025 (1) TMI 712
  Challenge to assessment order issued in the name of a deceased person - impugned order has been made in the name of a dead person - HELD THAT:- This Court is conscious of the fact that normally jurisdiction under Article 226 would not be entertained when there is an alternate remedy, however the same is not an absolute bar but is a self imposed restriction and has exceptions carved out to the above rule, one such exception is where the order is without jurisdiction. The assessment made in the name of dead person has been held to be a nullity and would thus fall within the exception to the rule of alternate remedy. The impugned order is set aside - Petition disposed off.

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• 2025 (1) TMI 711
  Maintainability of petition - availability of alternative remedy - Challenge to impugned order on the premise that the impugned order traverses beyond the Show Cause Notice - non-application of mind to the objection which was filed by the petitioner in response to the notice - violation of principles of natural justice - HELD THAT:- This Court is conscious of the fact that writ petition under Article 226 of the Constitution of India would not be entertained normally if statutory remedy is availed. However, existence of alternate remedy is not an embargo or an absolute bar to exercise power under Article 226 of the Constitution of India but a self-imposed restriction and the following circumstances viz., violation of principles of natural justice or lack of jurisdiction or error apparent on the face of the record are some of the exceptions carved out to the rule of alternate remedy for exercise of discretion under Article 226 of the Constitution of India. This Court is of the view that the impugned order warrants interference for more than one reason. The impugned order does not deal with objection submitted by the petitioner dated 16.05.2024 wherein it has been specifically stated that any alleged escapement of turnover was only due to the fact that it related to the value of supplies effected during the previous year. More importantly, the impugned order traverses beyond the Show Cause Notice and is thus hit by Section 75(7) of the Act. Conclusion - The impugned order is set aside inasmuch as there is non-application of mind to the reply which has been filed by the petitioner. It is trite law that when a reply is filed, it is incumbent on the assessing authority to apply its mind to the objections raised and return findings on the issues so raised. Failure to do so, would vitiate the proceedings. Petition disposed off.

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• Income Tax

• 2025 (1) TMI 710
  Reopening of assessment u/s 147 - cash deposits made in the bank account of the petitioner - as decided by HC [ 2024 (11) TMI 1389 - DELHI HIGH COURT] threshold stage of issuing a notice u/s 148 AO is not required to finally conclude whether any income has escaped assessment. The notice merely initiates the reassessment proceedings. Thus, all rights and contentions of the petitioner to contest the quantum as well as the taxability of the amounts as reflected in the impugned notice and the impugned order are reserved - HELD THAT:- According to the learned counsel appearing for the petitioner what has been observed by the High Court in Para 10 of the impugned judgment is factually incorrect. If that be so, it was expected of the petitioner to go back to the High Court pointing out that there is an error. At this stage, the learned counsel sought permission to withdraw this petition as he intends to go back to the High Court. Special Leave Petition is dismissed as not pressed.

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• 2025 (1) TMI 709
  MAT computation - Entitlement to claim interest paid on borrowed capital - As submitted there was an amendment made with retrospective effect to Section 115JA of the Income Tax Act, 1961 the import of which is that the bad debts would ultimately be written off and they cannot be construed as a liability in the hands of the person who is to receive the outstanding dues. HELD THAT:- This Court in the case of VIJAYA BANK [ 2010 (4) TMI 46 - SUPREME COURT] observed that ultimately a bad debt can only be written off in its books of account by way of a debit to profit and loss account and simultaneously reducing corresponding amounts from loans and advances to debtors effected on the assets side in the balance sheet at the close of the year. Consequently, the assessee would be entitled to deduction under Section 36(1)(7) of the Act. The issue which has been raised by the petitioner-Department in this case is covered against the Department in HCL COMNET SYSTEMS SERVICES LTD. s case [ 2008 (9) TMI 18 - SUPREME COURT] . Consequently, the petition is dismissed leaving open any other question which may have arisen in this Special Leave Petition.

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• 2025 (1) TMI 708
  Reopening of assessment u/s 147 - period of limitation as specified u/s 149 (1) (a) - as argued value of the transactions identified by AO as suggestive of the petitioner s income escaping assessment is less than Rs. 50,00,000/- Whether on the basis of material available on record, the AO could have concluded that the income chargeable to tax amounting to Rs. 50,00,000/- or more which had escaped assessment? - HELD THAT:- In terms of Section 148A(c) of the Act, the AO was required to take an informed decision after considering the petitioner s response to the impugned notice issued u/s 148A(b) of the Act. Petitioner had asserted that the amount received from one of the entities (GMZ Commodities Pvt. Ltd.) was on account of profit on sale of shares, which had been surrendered to tax. In the present case, the Revenue has been unable to show any documents that would establish that the petitioner had received any amount in its books of account or otherwise, which was in excess of the amount as claimed by the petitioner in its response dated 31.05.2022. The contention that the AO is not required to form an opinion as to the correctness of the information available with it, is erroneous. AO is required to form an opinion as to whether there is any credible information to substantiate that the petitioner s assertion that the aggregate value of the transactions in question is less than Rs. 50,00,000/-, is incorrect. Clearly, at the stage of passing an order u/s 148A (d) AO was not required to form any conclusive view as to whether the entries in question represented income that had escaped assessment. The question whether the said entities are accommodation entries may be a contentious issue. The fundamental facts that the petitioner had transactions with the named companies of an aggregate value of Rs. 66,44,134/- was required to be determined on the basis of the record. Whilst, the petitioner had produced ledger accounts, the AO did not have any material to substantiate that deposits aggregating Rs. 66,44,134/- were made in the petitioner s bank account to contradict the same. The fundamental basis on which the petitioner s assessment is sought to be reopened is that it had entered into the transactions of a value of Rs. 66,44,134/- during the FY 2014-15. Clearly, the AO is required to be satisfied that such entries exists particularly where the petitioner had produced its accounts to show that the value of transactions is not as stated in the notice under Section 148A(b) of the Act. The present petition is allowed and the impugned order and the impugned notice are set aside.

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• 2025 (1) TMI 707
  Undisclosed income from Shipgram Scheme - ITAT restricted addition - HELD THAT:- On perusal of the above findings of the Tribunal, we are of the opinion that the same are factual being the findings of fact upholding the findings of fact arrived at by the CIT (Appeals) coupled with the fact that the estimate has been made by the CIT (Appeals) for allocating the sum between the Assessee and M/s. Shivganga Builders @ 30% and 70% for sustaining the addition to the extent of 30%. In view of the concurrent findings of fact arrived at by the CIT (A) and Tribunal, we decline to answer the question being a question of fact confirming the order passed by the Tribunal. These appeals are accordingly dismissed.

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• 2025 (1) TMI 706
  Commission of offences u/s 276C (1) r.w.s. 277 - considering total sale consideration of land in question only part was shown to be the actual sale consideration in the sale deed and the remaining amount was found to have been paid by the purchasers to the seller in cash and in the process having evaded capital gain tax - whether the exercise of inherent power of this Court saved under Section 482 Cr. P.C. is warranted to be exercised in the instant case or not? - HELD THAT:-The ambit and scope of exercise of inherent power of this Court is no more res integra and stands settled in M/s Neeharika Infrastructure Pvt. Ltd. vs. State of Maharastra ORs [ 2021 (4) TMI 1244 - SUPREME COURT ] held that the power of quashing should be exercised with circumspection in rarest of the rare cases (not to be confused with the formation in the context of death penalty) and while examining an FIR/complaint, quashing of which is sought, the Court cannot embark upon an enquiry as to reliability or genuineness or otherwise of the allegations made in the FIR/complaint and that the criminal proceedings ought not to be scuttled at the initial stage and that quashing of FIR/complaint should be an exception rather than an ordinary rule and that when the prayer for quashing of FIR/complaint is made by the accused and the Court when it exercise power u/s 482 Cr. P.C. only has to consider whether the allegations in the FIR/complaint disclose commission of a cognizable offence or not. In case in hand, the respondent herein in the impugned complaint has specifically alleged commission of offences by the petitioners herein under Sections 276C (1) and 277 of the Act of 1961. Under Section 279A of the Act of 1961, offence under Section 276C (1) read with Section 277 alongwith other offences provided therein the said section have been deemed to be cognizable offences within the meaning of Code of Criminal Procedure. This Court is not inclined to display indulgence and to exercise inherent power in the instant petition.

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• 2025 (1) TMI 705
  Reassessment proceedings against company insolvent - Affect of approved Resolution Plan by the NCLT - HELD THAT:- NCLT has approved the Resolution Plan vide order dated 20th June, 2022 which has now been upheld and confirmed by dismissal of the Appeal filed by the respondent-Authority by the NCLAT vide order dated 21.05.2024. As the decision of Ghanashyam Mishra [ 2021 (4) TMI 613 - SUPREME COURT ] would be applicable wherein, it is held that once the NCLT has approved the Resolution Plan, all the past dues shall stand extinguished and respondent-Authority could not have assumed the jurisdiction to re-open the assessment as the same would have achieved the finality. In the facts of the present case, the petitioner stands even on better footing as the order passed by the NCLT approving the Resolution Plan already has merged into the order passed by the NCLAT while dismissing the Appeal preferred by the respondent-Authority which has achieved finality in view of the provisions of Section 62 of the IBC The impugned notice issued u/s 148 of the Act is not tenable in the eyes of law and is accordingly, quashed and set aside.

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• 2025 (1) TMI 704
  Non releasing the refund by Respondent-authorities - Whether the assessee-petitioner is entitled to the refund as per the grievance made in the petition or not? - HELD THAT:- Assessing Officer has already made adjustment of the refund for the subsequent years as stated here-in- above at Rs. 5,52,16,000/- as stated above. Therefore, ADMITTEDLY, the petitioner is entitled to refund at least of principal amount of Rs. 6,32,16,000/- (Rs. 80,00,000/- + Rs. 5,52,16,000) with cost rounded of to Rs. 6.30 Crore. This amount of Rs. 6.30 Crore is subject to enhancement of eligible interest and verification of applicable rate of tax. Accordingly to us, the respondent is liable to refund at least Rs. 6.30 Crore subject to final calculation of refund. We direct Assessing Officer to credit the amount of Rs. 6.30 Crore in the bank account of the petitioner. Let this petition be listed for further hearing on 7th January,2025 on top of the Board.

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• 2025 (1) TMI 703
  Validity of reopening proceedings - as argued since the quantum of transaction is less than 50 lacs, no notice could have been issued u/s 149(1) - whether petitioner has an alternative statutory remedy? - HELD THAT:- As in view of the judgment of M/s Amrit Homes Private Limited [ 2023 (8) TMI 683 - MADHYA PRADESH HIGH COURT] which is binding on this Court and also taking into consideration the law laid down in Supreme Court in Celir LLP Vs. Bafna Motors (Mumbai) (P) Limited. [ 2023 (10) TMI 48 - SUPREME COURT] since there exists an alternative statutory remedy, it will not be proper to advert to the merits of the case and scuttle the process of reassessment specially in view of the alternative statutory remedy as is available to the petitioner.

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• 2025 (1) TMI 702
  Reassessment proceedings in old v/s new regime - Notices issued by JAO and the orders of assessment passed under the old regime, instead of the National Faceless Assessment Center - Whether the proceedings could have been initiated and continued by the jurisdictional assessing officer and the assessment order could have been passed by him in cases where the original notices issued by the jurisdictional assessing officer were treated to have been issued in terms of the new regime? - HELD THAT:- The entire scheme of the Act specifically requires the same assessing officer, who issues notices to conduct an enquiry and considered their reply in terms of Section 148A. Thereafter, the same assessing officer is required to pass an order under the new scheme after giving notice under Section 148 of the old Act. In our considered opinion, if we examine the provisions of present situation, which has arisen on account of treating the notices issued under Section 148 of the Act as notice u/s 148A (b) of the Act, the natural corollary would be that such replies which may be received to the notice issued u/s 148A (b) of the Act, would be examined by the same assessing officer, who had originally issued the notices under the old regime. His jurisdiction cannot be said to have been taken away for examining the reply to notice u/s 148A (b) of the Act. Therefore, as a result the same assessing officer i.e. JAO would be also entitled to take a decision on such reply and pass orders of assessment or reassessment in terms of the new provisions of Section 148 of the Act. As we find that the power u/s 144B (7) and (8) has not been exercised by the Principal Chief Commissioner to the Jurisdictional Assessing Officer, however, the circumstances have been considered by the Supreme Court while exercising its power under Article 142 of the Constitution of India in Ashish Aggarwal s case [ 2022 (5) TMI 240 - SUPREME COURT] whereby it has specifically provided the jurisdiction to the Jurisdictional Assessing Officer by deemed fiction of law under the new Faceless Regime. We say so because the initial notice was issued by the Jurisdictional Assessing Officer, which has been treated to be a notice u/s 148A of the Act and Section 148 of the old Act, as notices u/s 148A(a) and (b) of the Act. He would, therefore, be the best person to assess and re-assess the provisions of law are required to be otherwise considered strictly. However, in cases where there is an allegation of escape of income, on account of which notices were issued by the Jurisdictional Assessing Officer, must reach to its logical conclusion by the same officer. We, therefore, hold that the Jurisdictional Assessing Officer would continue to proceed and have jurisdiction to decide the notices which were originally issued by him. In the opinion of this Court, the procedure which has been laid down under the new regime will of course have to be followed by the Jurisdictional Assessing Officer. No prejudice would be caused if such a course is adopted by the Jurisdictional Assessing Officer. The submission of the petitioners is, therefore, found to be without force. We do not agree with the view taken by the Telangana High Court in Kankanala Ravindra Reddy s case [ 2023 (9) TMI 951 - TELANGANA HIGH COURT] The contention of petitioners relating to non-application of the judgment passed in Rajeev Bansal s case [ 2024 (10) TMI 264 - SUPREME COURT (LB)] is also found to be wholly misconceived. Jasjit Singh s case facts [ 2024 (8) TMI 228 - PUNJAB AND HARYANA HIGH COURT] were different. The case deals with the notices which have been issued by the Jurisdictional Assessing Officer after the faceless regime had come into force with effect from 29.03.2022. The view taken in Hexaware Technologies Limited s case [ 2024 (5) TMI 302 - BOMBAY HIGH COURT] also does not apply to the present bunch of cases. It is made clear that the petitioners relating to the orders passed by the Assessing Officer on merits can be raised in appeal before the appellate authority. If appeals are so filed, the same shall be decided on merits and the delay shall be condoned on account of the fact that the writ petitions are pending before this Court. All the writ petitions are dismissed.

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• 2025 (1) TMI 701
  Validity of proceedings u/s 153C - period of limitation - validity of satisfaction note recorded by the AO - HELD THAT:- The only objection of the petitioner is that the satisfaction note is undated and unsigned. The petitioner can raise this objection before the AO. The issue of limitation is also a mixed question of facts and law. As pointed out by the respondents, the proceedings are bound to be completed within 12 months which is going to be ended on 31.03.2025. The petitioner approached this Court at the very fag end of the period in the month of November December 2025, therefore, at this belated stage, the petition cannot be entertained. Objections in respect of the satisfaction note recorded by the AO of the concerned third party as well as the assessment note in respect of the petitioner - All these objections can be raised before the AO who is competent to appreciate the same after examining the documents. After the order is passed by the Assessing Officer, either party, i.e. petitioner or Department will have the remedy of appeal before the Commissioner of Income Tax and further remedy before the Income Tax Appellate Tribunal. Even in the case of Jasjit Singh [ 2023 (10) TMI 572 - SUPREME COURT] the matter was travelled up to the Apex Court after exhausting the remedy before the ITAT, therefore, all these objections and grounds raised by the petitioner are liable to be considered by the authorities under the Income Tax Act, not by this Court. Hence, no case for interference is made out. Writ Petition stands dismissed without expressing any opinion on the merit of the case.

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• 2025 (1) TMI 700
  Denial of benefit of provision of Section 115BAA - delay in filing the Form 10IC - levy of tax and surcharge at 25% and 12% respectively, instead of 22% and 10% respectively, as prescribed under the provisions of section 115BAA - CIT(A) contending that benefit u/s 115BAA cannot be claimed for the AY 2022-23 merely because there was a delay in filing Form 10-IC for the AY 2021-22. HELD THAT:- The Form 10IC can be filed only once and there is no option/provision to file the Form 10IC every year to opt for the new regime to get the benefit of reduced tax rate as per provisions of Section 115BAA - now, we are in Assessment Year 2022-23 and the CIT(A) failed to consider that though there was a delay in filing the Form 10IC to get benefit in the AY 2021-22, the same has been filed belatedly on 31/03/2022 and the Assessee has assigned reasons for condoning the delay and the matter is pending. Thus in our considered opinion, CIT(A) cannot deny the Assessee to opt for new regime at least for the Assessment Year under consideration i.e. 2022-23. Considering the fact that the Assessee filed return of income on 30th November, 2022 and Form No. 10IC which was already filed on 31/03/2022, which are well within the prescribed due date of 30th November, 2022, therefore, we are of the opinion that the CIT(A) ought to have given the benefit of reduced tax rate as prescribed u/s 115BAA of the Act for the year under consideration. Set aside the order of the A.O. as well as Ld. CIT(A) and direct the A.O. to give benefit of reduced tax rate at 22% as prescribed u/s 115BAA under the new tax regime for the year under consideration. Appeal filed by the Assessee is allowed.

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• 2025 (1) TMI 699
  Delay filling appeal before tribunal - Condonation of delay of 2655 days - only contention of the assessee is that she handed over the appeal papers to one Advocate and one Chartered Accountant to file an appeal but appeals were not filed before the ITAT - HELD THAT:- Merely handing over the appeal papers to the ld. counsel is not sufficient to say that she has acted with due diligence. In the present case on hand, there is a huge delay in filing the appeal and delay is due to negligence act of the assessee only. Moreover, before the AO as well as the CIT(Appeals) the assessee has not appeared even inspite of issuance of twelve notices by ld. CIT(Appeals). All these acts are clearly establish that the assessee is not due diligence. Therefore, it is not a fit case to condone the huge delay of 2655 days. The condonation petition filed by the assessee is dismissed.

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• 2025 (1) TMI 698
  Addition u/s 68 - cash deposit in ICICI Bank unexplained - HELD THAT:-Assessee is a commission agent engaged in the business of acting as a middleman for procuring fruit / vegetables and supplying to the shop keepers on commission basis for which the assessee has charged commission. Assessee has also made some purchases and sales of fruits and vegetables on his own account which were also shown in the profit and loss account of the assessee. Thus, the assessee has made purchases and sales on his behalf and also procured goods from producers/suppliers as middleman on commission basis and sold/supplied the same to retailers/shopkeepers. Besides the assessee produced before us the bank statement of ICICI Bank and evidences of cash deposited sale of fruits / receipt and thereafter, on account of Artiaz Services and withdrawal made against cash deposits. We find that there is hardly cash balance left in the bank account after payment to growers. T Thus, no doubt, that the receipt of money by the assessee is from sale of vegetables/ fruits as well as from Artiya Services for which the commission was charged by the assessee. The same cash deposits in the bank cannot be added to the income of the assessee on the ground that the assessee has shown less sales vis- -vis, the cash deposit into the bank, whereas the assessee has shown the commission income from Artiya Services. Thus, source of cash deposits is fully explained. Addition confirmed by the ld. CIT (A) is not correct and has to be deleted - Decided in favour of assessee.

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• 2025 (1) TMI 697
  Addition u/s 68 - share capital and premium treated as unexplained cash credit - HELD THAT:- The amended proviso to Section 68, requiring companies to explain the source of the source of the share applicant s funds, became applicable from 01/04/2013 and is not retrospective. The CIT(A) correctly applied the judgment in Gagandeep Infrastructure P. Ltd. [ 2017 (3) TMI 1263 - BOMBAY HIGH COURT] and concluded that this proviso was inapplicable to A.Y. 2011- 12. We find that the CIT(A) conducted a detailed and reasoned analysis before deleting the addition u/s 68. The assessee provided sufficient evidence to prove the identity, genuineness, and creditworthiness of the investor, while the AO failed to disprove the evidence or bring any material to justify the addition. The addition made by the AO appears to be based on assumptions and lacks substantive basis. Accordingly, the appeal filed by the revenue is dismissed.

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• 2025 (1) TMI 696
  Delay of 232 days in filing of the present appeal - HELD THAT:- The assessee has given no cogent reason for this delay in filing of appeal before us and has simply stated that the delay was due to misleading guidance and lack of awareness, which caused the present delay in filing of appeal. Even when the matter was called out for hearing neither any application for adjournment was filed and none appeared on behalf of the assessee. Accordingly, we observe that even before us the assessee had continued to remain non-compliant and evasive. We are therefore, not inclined to condone the delay in filing of the present appeal, since the assessee has given a vague reasoning for the instant delay of 232 days in fling of the present appeal and has continued to remain non-cooperative even before us. Decided against assessee.

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• 2025 (1) TMI 695
  Reopening of assessment - reasons to believe - Addition u/s 69C r.w.s.115BBE - HELD THAT:- Information received from the Investigation Wing, Mumbai constitutes new and tangible material for initiating the reassessment proceedings in the case of the assessee. In ACIT v/s Rajesh Jhaveri Stock Brokers (P.) Ltd, [ 2007 (5) TMI 197 - SUPREME COURT] held that if there is relevant material on the basis of which a reasonable person can form a requisite belief that income chargeable to tax has escaped assessment, then proceedings u/s 147 can be validly initiated. It is also well settled that the sufficiency or correctness of the material is not a thing to be considered at the stage of recording the reasons. As a result, we find no infirmity in the reassessment proceedings initiated by the AO under section 147 of the Act. Addition u/s 69C - From the material available on record it is evident that the assessee has failed to prove the genuineness of the aforenoted two purchases made from M/s Swastik Corporation. Thus, it appears to be a case of bogus bills arranged from the aforesaid entities and materials purchased from somewhere else at a lower cost. Thus, we are of the considered view that a reasonable disallowance of the purchases would meet the possibility of revenue leakage. Quantification of the profit element embedded in making such bogus/unsubstantiated purchases - As respectfully following the aforesaid decision of M. Haji Adam Co. [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT] we set aside the impugned order passed by the learned CIT(A) and restore the matter to the file of the jurisdictional AO with the direction to restrict the addition as regard the afore-noted two bogus purchases by bringing the gross profit rate on such bogus purchases at the same rate as that of the other genuine purchase. We further direct that if the gross profit rate on bogus purchases is higher than the other genuine purchases and the same has already been offered to tax by the assessee then no further addition be made. Appeal by the assessee is allowed for statistical purposes.

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• 2025 (1) TMI 694
  Foreign tax credit disallowed - form 67 has not been filed within the due date - AR submitted that even though, the form 67 was filed later on, the assessee made the claim in the return of income filed by him which was filed in time and therefore prayed to allow the appeal - HELD THAT:- We are not in agreement with the view expressed by the authorities since admittedly assessee was remitted the tax in the foreign country and also reported the said income in the return of income filed by him in India and claimed the deduction on the foreign tax paid by him. Therefore the filing of form 67 along with the return could be treated as a directory and not a mandatory one when the facts are not in dispute. Further the allowance of foreign tax credit is based on the DTAA signed between the countries. The Rule 128 also does not bar the claim of FTC when the assessee had not filed the Form 67 along with the return of income. In the facts and circumstances of the case, the disallowance of the foreign tax paid by the assessee is not correct. See MS. BRINDA RAMA KRISHNA [ 2022 (2) TMI 752 - ITAT BANGALORE] and M/S. 42 HERTZ SOFTWARE INDIA PVT. LTD. [ 2022 (3) TMI 834 - ITAT BANGALORE] wherein held that filing of Form No.67 is not mandatory but a directory requirement. Rule 128(9) does not provide for disallowance of FTC in case of delay in filing Form No.67. No hesitation to grant relief as prayed for by the assessee and direct the AO to grant necessary relief in accordance with law, after due verification. Decided in favour of assessee.

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• 2025 (1) TMI 693
  Assumption of jurisdiction u/s 153C - satisfaction note recorded or not? - AY - 2011-12 - HELD THAT:- As pointed out on behalf of the assessee, the identical issue cropped up in the identical satisfaction note in the case of DCIT vs M/s. Manglam Multiplex Private Limited. [ 2024 (10) TMI 253 - ITAT DELHI] . The Co-ordinate Bench of the Tribunal found the AY 2011-12 to be out of purview of the provisions of section 153C of the Act being barred by limitation. The Co-ordinate Bench further found that the consolidated satisfaction note drawn in respect of AYs 2011-12 to 2017-18 suffers from incorrigible legal infirmities and consequently found that the AO acted without valid jurisdiction u/s 153C of the Act. In consonance with view towards lack of jurisdiction u/s 153C of the Act, both on the ground of bar of limitation as well as legal infirmities in the satisfaction note in the identical set of facts, we hold that the assessment framed u/s 153C for the AY 2011-12 in question is both barred by limitation and nonest satisfaction and consequently, the entire proceedings under s. 153C of the Act is a complete non-starter and vitiated in law. Appeal of assessee allowed. Conferment of jurisdiction u/s 153C based on a satisfaction note - AYs 2012-13 to 2015-16 - The satisfaction note must suggest some degree of objectivity and lack of relevant particulars giving rise to purported satisfaction renders such satisfaction to be a nullity. In consonance with the view expressed in DCIT vs M/s. Manglam Multiplex Private Limited [ 2024 (10) TMI 253 - ITAT DELHI] and Renu Singh [ 2024 (12) TMI 184 - ITAT DELHI ] we find potency in the plea of the assessee towards incorrigible legal infirmities rendering the assumption of jurisdiction based on satisfaction note bereft of objectivity, to be vitiated in law. Thus, the assessment proceedings based on nonest jurisdiction is a complete non-starter. The resultant assessment orders passed u/s 153C of the Act for different AYs in question are bad in law and thus stand quashed.

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• 2025 (1) TMI 692
  Revision u/s 263 - receipt of accommodation entries - HELD THAT:- The Quasi-judicial function performed by the AO ought not have been set aside by the Ld. Pr. CIT in a mechanical manner without bringing any relevant fact before the assessee. Assessee has categorically denied having received any credits from the two companies which are alleged to be accommodation entries providers. On being asked by the Bench, the assessee also furnished affidavit dated 17.12.2024 by the Tribunal to the effect that the assessee has not received alleged amount of INR 14,00,000/- either from Shri Himashu Verma or his alleged concerns namely, M/s. Broanze Star Techsoft Pvt.Ltd. and M/s. Royal Merage Financial Consultants Pvt.Ltd. In the light of the circumstances narrated on behalf of the assessee and in the wake of averments of the assessee duly recorded in 263 proceedings that no such entries have been received coupled with the affidavit of the assessee, we see no error in the re-assessment order. The order passed under s. 263 of the Act is thus quashed. Appeal of the assessee is allowed.

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• 2025 (1) TMI 691
  Revision u/s 263 - proviso to sec. 2(15) was applicable to the assessee and thus setting aside the assessment framed - Whether assessee is a charitable institution and is entitled to the exemption u/s 11 on the ground that services rendered by the assessee trust as public utility services is very meager and, therefore, sec. 2(15) is not applicable? - HELD THAT:- We note that in the assessment year 2018-19 the Tribunal has decided the issue of applicability of proviso to section 2(15) to the assessee [ 2024 (7) TMI 135 - ITAT KOLKATA] as held that the assessee is a charitable institution and is entitled to the exemption u/s. 11 on the ground that services rendered by the assessee trust as public utility services is very meager and, therefore, sec. 2(15) is not applicable. We are of the view that sec. 263 order passed by the Ld. CIT(E), which has been under challenge before us by the assessee, becomes infructuous as subsequent to the passing of such order, the ITAT has decided the issue as stated hereinabove in favour of the assessee. Accordingly, we quash the revisionary order passed u/s. 263 of the Act. Appeal of the assessee is allowed.

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• Customs

• 2025 (1) TMI 690
  Mid-term review and revision of the Bullion Tariff Rate Quota (TRQ) allocations under the India-UAE Comprehensive Economic Partnership Agreement (CEPA) for the Financial Year 2024-25 - decision was taken without granting an opportunity of hearing to the petitioner and without a sufficient prior notice - violation of principles of natural justice - HELD THAT:- This Court had issued directions and other connected matters in KAKA GOLD LLP VERSUS DIRECTOR GENERAL OF FOREIGN TRADE ORS. [ 2024 (12) TMI 544 - DELHI HIGH COURT ], which arose in a similar factual matrix and where it was held that since the review decision was made without affording the Petitioners an opportunity to be heard, and Ms. Shiva Lakshmi has also indicated that the Petitioners should have first approached the DGFT with their concerns, the Court is of the opinion that it would be more appropriate at this stage, without delving deep into the merits of the case, to direct the DGFT to examine all the issues raised by the Petitioners in the present petitions and issue a fresh decision on the basis thereof. The petitioners are directed to file an application for review before the DGFT within one week from today whereupon the DGFT shall examine all the issues raised by the petitioners in the present petitions and issue fresh orders/directions, within a period of three weeks thereafter. Conclusion - i) The DGFT is directed to re-examine the issues raised by the petitioners and issue fresh decisions, maintaining current allocations during the review process. ii) The petitioners must be provided with an opportunity to be heard, and the criteria for TRQ revisions must be clearly communicated.

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• 2025 (1) TMI 689
  Contravention of Section 31 of the Insolvency and Bankruptcy Code, 2016 - applicability of order for approval of resolution plan under Section 31 (1) of the IBC - HELD THAT:- Hon ble Apex Court judgment in the case of Edelweiss [ 2021 (4) TMI 613 - SUPREME COURT ] leaves no manner of doubt whatsoever that no claim except which is categorically approved in the resolution plan shall survive after the order under Section 31 (1) of the IBC is passed. The decision of the Hon ble Apex Court in the case of Edelweiss applies fully and squarely to the facts of the present case. Therefore, no new customs duty, interest or penalty which has been proposed by the respondent can be levied, once the resolution plan stands approved. Conclusion - i) Once a resolution plan is approved under Section 31 of the IBC, all claims not included in the plan are extinguished. ii) The IBC s provisions override other laws, including the Customs Act, regarding claims extinguished by a resolution plan. Appeal allowed.

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• 2025 (1) TMI 688
  Classification of imported dry dates - would fall under Customs Tariff Item 9806 00 00 or CTI 08404 10 30? - origin of imported dry dates - Whether the Principal Commissioner was justified in imposing penalties upon the appellant under sections 114 A and 114 AA of the Customs Act? Whether the dry dates imported by the appellant through invoice dated 15.07.2019 and Bill of Entry dated 19.08.2019 originated from UAE or from Pakistan? - HELD THAT:- There is nothing on the record to suggest that such verification as contemplated under the 2020 Rules was carried out with the concerned UAE Authorities to verify the genuineness and correctness of the certificate of origin. This issue was examined by a Division Bench of the Tribunal in M/s. Omega Packwell Pvt. Ltd. vs. Pr. Commissioner of Customs, Noida [ 2024 (6) TMI 455 - CESTAT ALLAHABAD] , where it was held that It shows that the said certificate was issued after proper verification of origin of goods. Authenticity of the said certificate was never challenged by way of any enquiry from the exporting country. We further notice that phyotsanitary certificate which was issued by National Plant Protection Organization of exporting country also indicates country of origin UAE. No evidence was brought out to infer that country of origin shown in the said phytosanitary certificate was incorrect. Bags of dry dates were found, during physical verification, carrying slips on which country of origin was mentioned as UAE. Mere suspicion is not enough to discard aforesaid documents. The facts of the present case are similar to the facts of Omega Packwell decided by the Tribunal. In the present case, the Principal Commissioner has not recorded a finding that the country of origin certificate produced by the appellant was forged and all that has been stated is that it was obtained by the appellant in collusion with the exporter by submitting incorrect documents. This finding is based purely on conjectures and surmises - The Principal Commissioner was not justified in ignoring the certificate of origin issued by the competent authority in UAE. In the absence of a finding by the competent authority that this is a fake certificate, this certificate would conclusively prove that the imported goods originated from UAE - the goods imported by the appellant originated from UAE and not from Pakistan. Whether the Principal Commissioner was justified in imposing penalties upon the appellant under sections 114 A and 114 AA of the Customs Act? - HELD THAT:- Penalty under section 114 A of the Customs Act can be imposed when there is short payment of duty by reason of collusion or any willful mis-statement or suppression of facts - In the instant case, it cannot be said that the appellant had willfully mis-stated facts or suppressed facts. These are necessary ingredients for applicability of the provisions of section 114 A of the Customs Act. The statement was made by the appellant in the Bill of Entry on the basis of documents, and these documents had been examined by the proper officer and, thereafter, the goods were cleared on payment of duty. The imposition of penalty under section 114A of the Customs Act on the appellant is unjustified and is liable to be set aside. - The penalty under section 114 AA of the Customs Act could also not have been imposed upon the appellant. Section 114 AA of the Customs Act provides that if a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, then he shall be liable to a penalty not exceeding five times the value of goods. There is no evidence on the record from which it can be deduced that the appellant had intentionally made a false declaration. The declaration had been made by the appellant on the basis of documents. Nothing has been brought on record to show that the appellant was aware that the goods that were imported by the appellant were of Pakistan origin and not of UAE origin. The imposition of penalty under section 114 AA of the Customs Act is, therefore, also liable to be set aside. Conclusion - i) The goods imported by the appellant originated from UAE and not from Pakistan. ii) There is no evidence on the record from which it can be deduced that the appellant had intentionally made a false declaration. The declaration had been made by the appellant on the basis of documents. Nothing has been brought on record to show that the appellant was aware that the goods that were imported by the appellant were of Pakistan origin and not of UAE origin. The imposition of penalty under section 114 AA of the Customs Act is, therefore, also liable to be set aside. Appeal allowed.

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• 2025 (1) TMI 687
  Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - Breach of time limit while conducting the proceedings the provisions of regulation 17 of the Customs Brokers Licensing Regulation 2018 - HELD THAT:- In the present case, though there is nothing on the record to indicate the date on which the offence report was received by the Commissioner, but what is important to notice is that the Customs Brokers License of the appellant was suspended on 15.05.2018 after taking note of the offence report submitted by the Directorate of Revenue Intelligence. Thus, even if 15.05.2018 is taken as the date on which the offence report was received by the Commissioner, the show cause notice should have been issued to the appellant within 90 days from 15.05.2018. However, the show cause notice was issued to the appellant only on 20.06.2019 which is even after a period of one year from the date of receipt of the offence report. The time limit set out under regulation 17 (1) of the 2018 Regulations for issuance of the show cause notice within 90 days from the date of receipt of the offence report has been violated. It also shows that the time limit set out under regulation 17(7) of the 2018 Regulations requiring the Commissioner to pass an appropriate order within 90 days after receipt of the enquiry report has also been violated. The delay in the issuance of the show cause notice under regulation 17(1) is about nine months and the delay in passing the order under regulation 17(7) is also of about more than four months. It is, therefore, not possible to accept the contention advanced by the Revenue that the breach of the time limits set out in regulation 17 of 2018 Regulations would not result in setting aside of the order revoking the Customs Broker License of the appellant. The time limit has to be complied with and any breach would result in setting aside the final order. Conclusion - The failure to issue the show cause notice and the final order within the prescribed time limits invalidated the revocation of the Customs Broker License. Appeal allowed.

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• Insolvency & Bankruptcy

• 2025 (1) TMI 686
  Condonation of 14 days delay in filing the appeal - sufficient cause for delay or not - whether initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor was fraudulent? - HELD THAT:- The submission of the Appellant that there is default of only two EMIs by the Corporate Debtor, hence, Section 7 proceeding ought not to have been initiated does not commend here. When default was committed by the Corporate Debtor, it was always open for the Financial Creditor to initiate proceeding which is remedy provided under I B Code. On looking into the Total Revenue it is Rs.33,447,942/- it is much less than the revenue of earlier year. The Total Expenses it is Rs.65,936,603/- and profit thus is shown in minus, as noted in the above Balance Sheet, which in no manner support the submission of the Appellant that initiation of CIRP was fraudulent. Further it is relevant to notice that in the CIRP the Appellant has filed its claim which claim has already been admitted and shall be dealt with in the proceeding in accordance with law. An application to recall an admission order needs sufficient grounds, which are not present in the present case - The Adjudicating Authority has rightly noted that allegations of fraud could not be proved by the Appellant. Conclusion - i) Sufficient cause must be shown for condonation of delay. The delay in filing the appeal was condoned. ii) Fraudulent initiation of CIRP requires substantial evidence. iii) Recall of an admission order requires substantial grounds. Appeal dismissed.

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• 2025 (1) TMI 685
  Maintainability of section 7 petition - initiation of CIRP - assignment of debt - in accordance with the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 as well as the Circulars issued by the Reserve Bank of India or not - applicability of principle of res-judicata - Corporate Debtors, who are running five star JW Marriott Hotel and Crown Plaza Hotel are profitable Companies earning substantial profits or not - denial of existence of Cash Management Agreement - requirement to consider amount transferred to Lenders under Cash Management Agreement towards servicing of debt for returning a finding of default by the Corporate Debtor - obligation to maintain DSRA reserve as per Loan Agreement. Whether Assignment dated 27.12.2022 made in favour of Omkara Assets Reconstruction Pvt. Ltd. by the Lenders was not in accordance with the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 as well as the Circulars issued by the Reserve Bank of India, the account of Corporate Debtor having never declared as NPA or SMA? - HELD THAT:- The Assignment dated 27.12.2022 made by the Lenders in favour of Omkara was challenged by GSTAAD before the High Court of Karnataka at Bengaluru in GSTAAD HOTELS PVT. LTD. VERSUS UNION OF INDIA, RESERVE BANK OF INDIA, NATIONAL CREDIT GUARANTEE TRUSTEE COMPANY LTD, PHL FININVEST PVT. LTD, PIRAMAL ENTERPRISES LIMITED, PIRAMAL CAPITAL AND HOUSING FINANCE LTD (PIRAMAL FINANCE) , FORMERLY KNOWN AS DEWAN HOUSING FINANCE LTD., OMKARA ASSETS RECONSTRUCTION PRIVATE LIMITED, IDBI TRUSTEESHIP SERVICES LIMITED [ 2024 (2) TMI 1504 - KARNATAKA HIGH COURT] . The High Court has dismissed the Writ Petition. Copy of which order has been brought on record by the Appellant in its rejoinder affidavit. The challenge before the High Court of Karnataka of the Assignment by the Appellant was basically on the ground that accounts of CD having not been declared as NPA or SMA, the Lenders could not have assigned the debt in favour of Omkara. Violation of Circulars issued by Reserve Bank of India was relied before the High Court. The High Court held that assignment is not violative of Master Circular issued by the Reserve Bank of India. It was held that there is no statutory aberration and dispute between private parties for enforcement of a private agreement would not get the audience of the High Court under Article 226 of the Constitution of India - The prayer of the Appellant before the High court having not been accepted, questioning the assignment dated 27.12.2022, we are of the view that no fault can be found in the assignment at this stage. Whether due to dismissal of Section 7 Application filed on behalf of the Lenders, as withdrawn on 13.12.2022 and 22.12.2022, the Section 7 Application filed by Omkara Assets Reconstruction Pvt. Ltd. Being Company Petition (IB) 291 of 2023 and 290 of 2023 were not maintainable and were hit by principle of res-judicata? - HELD THAT:- The earlier Section 7 Applications being CP(IB)No.1292 of 2021 and CP(IB) No.1287 of 2021 were filed by IDBI Trusteeship Ltd. on behalf of the Lenders alleging default on 15.04.2021 and 15.05.2021. The default in the aforesaid proceedings was default of Loan Agreement dated 27.12.2017. Section 7 Application, which has given rise to present Appeal has been filed alleging default of ECLGS-1 and ECLGS-2. In the earlier Section 7 Application initiated by IDBI Trusteeship Ltd., the ECLGS Facilities were not subject of consideration, nor the Applications were founded on any default under ECLGS Facility. Hence, we are of the view that the Applications CP(IB) No.291/MB/2023 and CP(IB)No.290/MB/2023, cannot be held to be barred by the principle of res-judicata. There are no substance in the submission of the Appellant that proceedings under Section 7 initiated by Omkara is barred by principle of res-judicata. Whether the Corporate Debtors, who are running five star JW Marriott Hotel and Crown Plaza Hotel are profitable Companies earning substantial profits? - HELD THAT:- Both the Hotels were running Hotels and earning revenue and payments were made to the Lenders even during Covid-19 period and thereafter. The Lenders, who have given finances to the Corporate Debtor for a Project, are also obliged to support the Corporate Debtor in running the business and extend their helping hand to the Corporate Debtor. The object of IBC is insolvency resolution. There are substance in the submissions of the Appellant that JW Marriott Hotel and Crown Plaza Hotel, which are run by the Corporate Debtors were profitable Companies, earning substantial profits. Whether the Adjudicating Authority committed error in returning finding in paragraph 11 of the impugned order that due to denial of existence of Cash Management Agreement, the arguments of the Corporate Debtor on the basis of servicing of debt as per Cash Management Agreement, cannot be accepted? - Whether the Adjudicating Authority was obliged to consider the amount transferred to Lenders under Cash Management Agreement towards servicing of debt for returning a finding of default by the Corporate Debtor? - HELD THAT:- It is clear that CMA between the parties was one of the most relevant Agreement to regulate the debt repayment. The CMA also imposed certain obligations on the Lenders and for finding out default on the part of the CD, CMA and consequent repayment under the CMA was required to be examined by the Adjudicating Authority. The Adjudicating Authority simply on mere denial of Omkara to the existence of CMA has rejected the submission of the Appellant. The observation of the Adjudicating Authority that CD could not prove existence of CMA by any correspondence between the parties is also without any basis. The CMA was duly contemplated into a Loan Agreement and was actually executed between the parties - The Adjudicating Authority is required to consider Section 7 Application afresh, after taking into consideration various clauses of the CMA and consequently remittance of the amount towards repayment of the loan in the Retention Account. Whether Lenders were obliged to maintain DSRA reserve as per Loan Agreement dated 26.12.2017, which amount was required to be appropriated towards payment of principal interest due under Loan Agreement ECLGS-I and ECLGS- II? - HELD THAT:- The mere fact that no submission was advanced by the CD before the Adjudicating Authority on DSRA, cannot be a ground to preclude the Appellant to raise the submission in this Appeal. The DSRA was contemplated to be utilized for shortfall in any repayment and maintenance of debt service reserve and it was the obligation of the Lender. Hence, it is not open for the Lender to say that they had no obligation to maintain any DSRA and the submission advanced on behalf of the Appellant on DSRA has to be rejected. It is not persuaded to accept the submission of learned Counsel for the Respondent with regard to DSRA. The submission of the Appellant is that amount of Rs. 8 crores was undisbursed and was kept as reserved amount, which was to be utilized for shortfall in any repayment of interest/ principal. The said aspect of the matter was also needs to be looked into by the Adjudicating Authority before returning any finding of default - The Lenders were obliged to maintain Debt Service Reserve ( DSRA ) amount as per the Loan Agreement dated 26.12.2017, which amount was required to be appropriated towards payment of principal and interest due under the Loan Agreement. Whether the finding of the Adjudicating Authority in paragraph 8 that it is undisputed fact that the defaults in payment of Loan amount exists, are sustainable the Corporate Debtor having disputed the default in the pleadings and arguments before the Adjudicating Authority? - HELD THAT:- Although, it is undisputed that loan amount exists, but the finding that there is default in payment has been challenged by the Counsel for the Appellant. It is useful to notice that in the very next sentence, the Adjudicating Authority has observed The Ld. Counsel for the Corporate Debtor argued that no default has actually taken place . When the Corporate Debtor has submitted before the Adjudicating Authority that no default has actually taken place, the observation of the Adjudicating Authority that it is undisputed that there are defaults in payment thereof, cannot be sustained. In the Appeal, the Appellant has made various submissions challenging the finding of default and it is submitted by the Appellant that no default was committed by the Appellant towards Loan Agreement and ECLGS-1 and ECLGS - The Corporate Debtor had disputed the default before the Adjudicating Authority itself. Thus, it cannot be accepted that default by the CD is undisputed fact. Whether out of amount sanctioned by Lenders under ECLGS- I and ECLGS-II of Rs. 98 crores + Rs. 65 crores = Rs. 163 crores, the Lenders have used the amount of about Rs. 140 crores to service its own debts and dues contrary to Agreement dated 30.12.2020 and 21.03.2022 and Adjudicating Authority rightly rejected the submission of Corporate Debtor on ground of end use Certificate issued by Corporate Debtor? - HELD THAT:- The Adjudicating Authority has relied on the end use Certificate, which was required to be furnished by the Corporate Debtor, as per the Agreement dated 30.12.2020. It is true that end use Certificate was submitted by the CD as per the Agreement. The Appellant has referred to the Bank statements to show that amounts after receipt of the loan under the ECLGS Facility, was directly transferred from Retention Account to the Loan Account on the same day. Even though no end use Certificate was given by the CD, but when categorical submission before the Adjudicating Authority was raised that amount out of Rs. 163 crores, which has been received by the CD under ECLGS-1 and ECLGS-2 and amount of about Rs. 140 crores have been utilized for servicing the debt by the Lenders, the question was required to be considered by the Adjudicating Authority and merely on the point of end use Certificate, the said argument was not required to be rejected - the findings returned by the Adjudicating Authority in paragraph 12 of the order, rejecting the submission of the Appellant that ECLGS credit proceeds were used towards servicing of interest outstanding on the Loan Account not approved. Whether Corporate Debtor has committed default towards ECLGS-1 sanctioned on 30.12.2020 as per date of default 15.11.2022? - HELD THAT:- The finding returned by the Adjudicating Authority regarding default, thus is without considering of the materials on the record and are unsustainable. We have already held that DSRA was also required to be looked into, which has not even adverted to by the Adjudicating Authority. The Adjudicating Authority is required to consider the default of ECLGS and loan account, afresh, after considering the relevant materials on record, including the observations as made in this order. Whether the Financial Creditors have been able to prove default under the Loan Agreement dated 26.12.2017 and the ECLGS-II sanctioned on 21.03.2022? - HELD THAT:- The default under the Loan Agreement dated 26.12.2017 could not have been pronounced without considering the CMA and amounts transferred by the Lenders to the Retention Account. The Adjudicating Authority having not examined and considered the CMA, no default with regard to Loan Agreement dated 26.12.2017 can be pronounced. Paragraph 16, itself indicates that with regard to ECLGS-2, repayment has to take place from 05.04.2024. In paragraph 16, the Adjudicating Authority has not returned any finding that there is a default with regard to ECLGS-2. Thus, the finding of the Adjudicating Authority is only with regard to ECLGS-1, which we have already dealt above. We, thus, are of the view the default with regard to ECLGS Facility could not have been pronounced by the Adjudicating Authority, without considering the CMA and amounts transmitted to Retention Account - Adjudicating Authority is required to consider the default under the loan account afresh. There being no finding of default regarding ECLGS-2 by the Adjudicating Authority, no further consideration is required with regard to ECLGS-2. Conclusion - i) No fault can be found in the assignment at this stage. ii) There are no substance in the submission of the Appellant that proceedings under Section 7 initiated by Omkara is barred by principle of res-judicata. iii) Both the Hotels were running Hotels and earning revenue and payments were made to the Lenders even during Covid-19 period and thereafter. iv) The Adjudicating Authority committed error while holding in paragraph-11 that due to denial of existence of Cash Management Agreement, the submission of the Appellant on the basis of Cash Management Agreement, cannot be accepted. v) The Adjudicating Authority was obliged to consider the amounts transferred to Lenders under the Cash Management Agreement towards servicing of debt for returning the finding of default by the Corporate Debtor. vi) The Lenders were obliged to maintain Debt Service Reserve ( DSRA ) amount as per the Loan Agreement dated 26.12.2017, which amount was required to be appropriated towards payment of principal and interest due under the Loan Agreement. vii) The Corporate Debtor had disputed the default before the Adjudicating Authority itself. Thus, it cannot be accepted that default by the CD is undisputed fact. viii) The amounts sanctioned by Lenders under ECLGS-1 and ECLGS-2 of Rs. 98 crores and Rs. 65 crores, whether the said amount was used by the Lenders for servicing its own debts or dues, contrary to the Agreement dated 30.12.2020 and 21.03.2022, was required to be considered by the Adjudicating Authority and the said argument raised on behalf of the CD, could not have been brushed aside on the ground that end use Certificate was given by the CD. ix) The Adjudicating Authority is required to consider the default of ECLGS and loan account, afresh, after considering the relevant materials on record, including the observations as made in this order. x) Adjudicating Authority is required to consider the default under the loan account afresh. There being no finding of default regarding ECLGS-2 by the Adjudicating Authority, no further consideration is required with regard to ECLGS-2. The impugned order is set aside - appeal allowed.

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• 2025 (1) TMI 684
  Maintainability of petition filed u/s 7 of IBC - default in payment of its financial debts - financial debt or not - HELD THAT:- It is evident that no party raised the issue of the pendency of this Section 7 Appeal in the other case before the coordinate Bench. The petition u/s 7 of IBC, 2016 had been filed by Respondent No.1 against Corporate Debtor for default in payment of its financial debts, which fell due on 16.03.2020, when Corporate Debtor despite demand, failed to repay the loan amount along with interest accrued therein. Audited Financial Statement of the Corporate Debtor, duly signed by all its directors including Appellants for the financial year commencing from 2012-2013 up till 2016-2017 are on record, which clearly reflects the loan amount given by Respondent No.1 into the account of Corporate Debtor. In the present case, Financial Creditor had placed material i.e disbursement details, bank account statement indicating disbursement, ledger statement, audited balance sheet of the Corporate Debtor since the Financial Year 2012-2013 to 2016-2017 and 26AS, which confirms that Financial Creditor had provided Loan to the Corporate Debtor and the Corporate Debtor acknowledged the same financial debt and committed default in repayment of the financial debt. Further Financial Creditor / Respondent No.1 gets support from the case of Asset Reconstruction Company (India) Ltd. v. Bishal Jaiswal Anr [ 2021 (4) TMI 753 - SUPREME COURT ], wherein the Hon ble Apex Court has held that entries in balance sheets will amount to acknowledgement of debt under Section 18 of the Limitation Act, 1963 for the purposes of filing of an Application under Section 7 of the Insolvency and Bankruptcy Code, 2016. Conclusion - The transaction was a financial debt, the Corporate Debtor defaulted on repayment. The debt and default has been established. There are no infirmity in the orders of the Adjudicating Authority - appeal dismissed.

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• PMLA

• 2025 (1) TMI 683
  Seeking grant of bail under section 439 of the Code of Criminal Procedure, 1973 - Whether the applicant/accused, Amar Sadhuram Mulchandani, has made out a prima facie case for release on bail under Section 439 of the Code of Criminal Procedure, 1973, considering his medical condition under the proviso to Section 45(1) of the Prevention of Money Laundering Act, 2002? - HELD THAT:- Considering the medical record before this Court, coupled with the fact that since the time of arrest, till the last medical report received from Sir J.J. Hospital, it appears that the accused is suffering from various ailments, due to passing of time disease became chronic and uncontrolled. Accordingly, accused is sick. The judgment in the matter of Manish Sisodia Vs. Directorate of Enforcement [ 2024 (8) TMI 614 - SUPREME COURT ], the Hon ble Apex Court has dealt with the issue of delay in commencement of the trial and has held that it violates Article 21 of the Indian Constitution and has granted bail to the said accused. In this matter, applicant/accused is in custody since 18 months and no sign of trial to start in near future and not possible of it to conclude in a short span of time. Punishment under PML Act, 2002 is maximum 7 years. Accused has already being in custody since 18 months. Long period of incarceration without chance of trial being commencing in near future itself dilutes the rigorous of twin condition of PML Act, 2002. In view of my aforesaid discussions, as applicant/accused is sick, therefore, his case squarely falls within proviso given beneath section 45(1) of PML Act, 2002. As there is inordinate delay in commencement of the trial, therefore, accused is entitled for release on bail under section 45 of PML Act, 2002. Conclusion - The applicant s medical conditions and the delay in trial commencement both justified granting bail. Bail application allowed.

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• Service Tax

• 2025 (1) TMI 682
  Exemption from service tax - Business Auxiliary services or not - Cleaning Grading service - Handling Transportation service - extended period of limitation - HELD THAT:- The cleaning and grading of agricultural produce is held to be covered under production and processing of goods. It is observed that the production and processing of goods for, or on behalf of, the client if provided in relation to agricultural is exempted from whole amount of tax vide Notification No. 19/2005 dated 07.06.2005 which amended the previous Notification No. 14/2004 dated 10.09.2004 with respect to exemption to specified services in relation to Business Auxiliary Service - Circular No. 143/12/2011 dated 26/5.2011 which clarifies that the agricultural produce when subject to processing if retain their essential characteristics at the output stage, the process undertaken on or behalf of client should be considered as covered by the expression in relation to the agriculture . Cleaning and grading service - HELD THAT:- The cleaning and grading activity was for few of the agricultural products which were warehoused by the appellants for their clients and that this activity did not change the essential characteristics of the agricultural product stored /warehoused by the appellant, the activity has to considered as the one in relation to the agriculture which is exempted from payment of tax - The Hon ble Apex Court in the case of COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX VERSUS M.L. AGRO PRODUCTS LTD. ETC. ETC. [ 2018 (7) TMI 1581 - SC ORDER] has held that threshing and redrying of tobacco leaves, being an activity in relation to agriculture is covered under entry production of goods on behalf of client in relation to agriculture which is entitled for exemption under Notification No. 14/2004-S.T. Hence, Service Tax is not payable C.B.E. C. Circular No. 143/12/2011-S.T. dated 26- 5-2011, also clarifies the same. Thus even with the introduction of negative list, said activity remained non-taxable. Handling and transportation charges - HELD THAT:- The cargo handling service under section 65 (21) means loading, unloading, packing, or unpacking of cargo and includes cargo handling service provided for freight in special container service provided by a container freight terminal or any other terminal meant to be transported by any means of transportation namely truck, rail, ship or aircraft buy the authorities likecontainer cooperation India, Airport Authority of India, in Land Container Depot, Container Freight Station etc. The department clarification no. B11/1/2002 -TRU dated 1.08.2002 clarifies that the cargo handling services provided in relation to storage of agricultural produced are covered under storage and warehousing services and have been exempted from the levy of service tax. In view thereof, the handling and transport of agricultural produce was also not taxable even prior 1.07.2012 hence the demand is held to have been wrongly confirmed. Conclusion - The two activities are held to be part of one service i.e. storage and warehousing of agricultural produce. The said composite activity is out of service tax net for pre as well as post negative list period, hence it is held that even partial demand of Rs.3,66,314/- has wrongly been confirmed by the adjudicating authority below. Appeal allowed.

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• 2025 (1) TMI 681
  Refund of service tax paid - services used in connection with the export of goods under Notification No. 41/2007-S.T. dated 06.10.2007 - applicability of time limitation - procedural lapse of filing refund claims beyond the prescribed sixty days - HELD THAT:- The refund has been rejected on the procedural ground that the Appellant has filed the refund claim for a particular quarter wherein some of the bills and invoices were dated subsequent to the quarter ending date which is beyond the time limit of sixty days prescribed under Notification No. 41/2007-S.T. dated 06.10.2007. In some cases, the exports had also been made prior to the date of invoice. Accordingly, the ld. adjudicating authority has rejected the refund claims on the ground that these input services could not be related to the goods exported in that quarter. In this regard, it is observed that the Government has realized the difficulties faced by exporters and issued the Notification No. 32/2008-S.T. dated 18.11.2008, extending the time limit of sixty days for filing the refund claim to six months. This beneficial Notification can be applied retrospectively so as to allow refund applications filed within the period of six months from the quarter ending date. The substantial benefit of refund cannot be denied merely on account of non-fulfilment of procedural conditions prescribed under the said Notification. This view has been taken by this Tribunal in the case of COMMISSIONER OF CGST CENTRAL EXCISE, JAMSHEDPUR VERSUS M/S RUNGTA MINES LTD. [ 2023 (9) TMI 1093 - CESTAT KOLKATA] wherein it has been held that the extension of the time limit for filing the refund claim from 60 days to six months being a piece of beneficial legislation, has to be considered as a retrospective amendment. Conclusion - The Appellant is eligible for the refund of input services as claimed by them, as provided under Notification No. 41/2007-S.T. dated 06.10.2007. Appeal allowed.

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• 2025 (1) TMI 680
  Invocation of extended period of limitation - demand confirmed for the Financial Year 2013-14 is beyond the period of 5 years so as to be time barred or not - extended period of limitation upto five years beyond the normal period of thirty months could have been invoked. Whether the demand confirmed for the Financial Year 2013-14 is beyond the period of 5 years so as to be time barred? - HELD THAT:- It needs to be noted that out of the total confirmed demand of Rs. 2,40,96,546/-, the demand of Rs. 2,24,43,944/- is with respect to the Financial Year 2013-14. For the respective half yearly periods for the Financial Year 2013-14, the period of five years would expire on 25.10.2018 and 25.04.2019. The show cause notice that was issued on 11.10.2019 was clearly beyond the period of five years - The service tax demand of Rs. 2,24,43,944/- is clearly barred by limitation and, therefore, could not have been confirmed - the demand of interest and penalty for the amount of service tax confirmed for the Financial Year 2013-14 is beyond the period of limitation. Whether the extended period of limitation upto five years beyond the normal period of thirty months could have been invoked in the facts and circumstances of the case? - HELD THAT:- It is noticed that after excluding the service tax liability confirmed for the period 2013-14, only the service tax liability for the periods 2016-17 and 2017-18 would be within the normal period of limitation. - There has to be a deliberate attempt to evade payment of excise duty. The show cause notice must specifically deal with this aspect and the adjudicating authority is also obliged to examine this aspect in the light of the facts stated by the assessee in reply to the show cause notice. In Easland Combines, Coimbatore vs. Collector of Central Excise, Coimbatore [ 2003 (1) TMI 107 - SUPREME COURT] the Supreme Court observed that for invoking the extended period of limitation, duty should not have been paid because of fraud, collusion, wilful statement, suppression of fact or contravention of any provision. These ingredients postulate a positive act and, therefore, mere failure to pay duty which is not due to fraud, collusion or wilful misstatement or suppression of facts is not sufficient to attract the extended period of limitation. In the present case, the show cause notice merely alleges that as the appellant did not disclose proper value of taxable services in the ST-3 returns, payment of service tax amounting to Rs. 2,40,96,546/- escaped assessment resulting in contravention of various provision of the Finance Act and the Rules with intention to evade payment of service tax. Mere suppression of facts is not enough to invoke the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act. The suppression has to be with an intent to evade payment of service tax and for this purpose the show cause notice must specifically allege why the assessee has suppressed facts with intent to evade payment of service tax - The extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act, therefore, could not have been invoked in the facts and circumstances of the case. The demand for service tax on legal services of Rs. 3,105/- was upheld, while other demands were set aside. Conclusion - Mere suppression of facts is not enough to invoke the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act - The extended limitation period requires evidence of intent to evade tax; corporate guarantees without consideration are not taxable. Appeal allowed in part.

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• 2025 (1) TMI 679
  Levy of penalties under Sections 76, 77 and 78 of the Finance Act, 1994 - service tax liability for services received from outside India applies for the period prior to the insertion of Section 66A of the Finance Act, 1994, i.e., before 18.04.2006 - HELD THAT:- During the relevant period, the applicability of Section 66A was not clear as to whether service tax is to be paid on the services received from out-side India. The said controversy was set at rest by the Hon ble Bombay High Court in the case of INDIAN NATIONAL SHIPOWNERS ASSOCIATION VERSUS UNION OF INDIA [ 2009 (3) TMI 29 - BOMBAY HIGH COURT] . By relying upon the said decision of Hon ble Bombay High Court, the learned Commissioner has also given the benefit and confirmed the demand only for the period from 18.04.2006 to 31.12.2006 which the appellant has already paid alongwith the interest. It has been held by the Hon ble Punjab Haryana High Court in the case of M/S CITY CABLE, BATHINDA VERSUS COMMISSIONER OF CENTRAL EXCISE, LUDHIANA [ 2016 (2) TMI 961 - PUNJAB AND HARYANA HIGH COURT] that simultaneous penalty under Sections 76 and 78 is not warranted. Conclusion - There was no intention to evade the service tax, therefore, imposition of penalties is not warranted. Appeal allowed.

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• 2025 (1) TMI 678
  Classification of services - Works Contract Service or Erection, Commissioning Installation Service? - suppression of facts or not - invocation of extended period of limitation. HELD THAT:- In the present case, it is admitted fact that the contracts awarded to the appellant are composite in nature because the department has itself extended the benefit of abatement @67% in terms of Notification No. 1/2006-ST dated 01.03.2006. We also find that this issue is no more res integra and the Tribunal in various decisions has consistently held that once the alleged service falls under the category of Works Contract Service , the same cannot be taxed under Erection, Commissioning Installation Service . In this regard, we may refer to the decision of this Tribunal in the case of BAJRANG LAL GUPTA VERSUS CCE- GURGAON [ 2023 (6) TMI 246 - CESTAT CHANDIGARH] , wherein the identical issue was involved and the Tribunal after considering the submissions and ratios of the various decisions, has held even for the period after 01.006.2007, various decisions of the Tribunal have consistently held that the composite contract or works contract service even after 01.06.2007 cannot be taxed under Construction of Complex Service under Section 65 (105) (zzh) read with Section 65 (30a) of the Finance Act, 1994. - thus, rendering of service in respect of roads is also not exigible to service tax being specifically excluded from the definition of Works Contract Service . Invocation of Extended period of limitation - HELD THAT:- The invocation of extended period in the present case is also not warranted because the appellant had a bona fide belief that no service tax was liable on him as he was providing the services to various government departments and the services were not being used for the purpose of business or commerce. Conclusion - i) Composite contracts should be classified under Works Contract Service post-01.06.2007, and services related to roads are excluded from service tax. ii) Extended period of limitation is not invoked. Appeal allowed.

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• 2025 (1) TMI 677
  CENVAT Credit of service tax paid to Deposit Insurance And Credit Guarantee Corporation for insuring deposits - HELD THAT:- The Larger Bench in M/S STATE BANK OF PATIALA VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, CHANDIGARH-II [ 2024 (11) TMI 1410 - CESTAT CHANDIGARH (LB)] has observed The insurance service provided by the Deposit Insurance Corporation to the banks is an input service and CENVAT credit of service tax paid for this service received by the banks from the Deposit Insurance Corporation can be availed by the banks for rendering output services . Appeal allowed.

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• 2025 (1) TMI 676
  CENVAT Credit - inputs - mining services - demand for reversal of Cenvat credit on dumpers and tippers was correct - HELD THAT:- There is no dispute about the fact that the earthmoving equipments such as dumpers and tippers are being used by the respondent to provide the output services of mining. The demand has been dropped considering these dumpers and tippers to be covered under the definition of inputs given under 2(k) of the Cenvat Credit Rules, 2004 to mean there is no dispute about the fact that earth moving equipments such as dumpers are being used by the respondent to provide output service. The dumpers even if classifiable under Chapter 87, can be considered within the definition of inputs, as per Rule 2(k) of the Cenvat Credit Rules, 2004. Exclusion clause of this definition applies to light diesel oil, high speed diesel oil, motor spirit and motor vehicles. It is observed that despite this definition, the dumpers and tippers are held to not to be considered as motor vehicle by Hon ble Apex Court in the case of Belani Ores Ltd. Etc. Vs. State of Orissa Etc. [ 1974 (9) TMI 115 - SUPREME COURT] wherein it has been observed The mere fact that there is no fence or barbed wire around the leasehold premises in not conclusive. There is evidence to show that the public are not allowed to go inside without prior permission, there are gates and a check on ingress andegress is kept by guards who also ensure that no authorised persons have access to the mining area. Hon ble Apex Court in the case of Boving Fouress Ltd. Vs. Commissioner of Central Excise, Chennai [ 2006 (8) TMI 189 - SUPREME COURT] has held that the principle laid down by Tribunal in one case if accepted by the department, the department is not entitled to raise the same point in other cases. It cannot pick and choose the issues. The demand was ordered to be set aside by Hon ble Apex Court in the said case on this sole ground. Conclusion - The dumpers and tippers used exclusively in mining operations qualify as inputs under Rule 2(k) of the Cenvat Credit Rules, 2004, allowing for Cenvat credit eligibility. There are no reason to differ with the findings in the impugned order considering the dumpers and tippers used by the respondent while rendering the Mining Services, as inputs. For which the Cenvat credit is held to have rightly been availed - appeal of Revenue dismissed.

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• Central Excise

• 2025 (1) TMI 675
  Demand of duty short paid under Section 11A(1) of Central Excise Act, 1944 along with interest and penalty under Section 11AA and 11AC of the Act respectively - whether the value of sprouts sold by the appellant is to be included in the assessable value of the Malt and the duty is payable while clearing the same to UBL ? - HELD THAT:- Both the Authorities observed that the sprouts arose during the processing of Barely for manufacture of Barely Malt , which was sold by the appellant and the sole proceeds were retained by them. The profit earned on the sale of sprouts, therefore, has been part of the value of the Barley Malt manufactured and cleared by the appellant on job work to the principal manufacturer. In view of the decision of the Supreme Court in UJAGAR PRINTS ETC. ETC. VERSUS UNION OF INDIA OTHERS [ 1989 (1) TMI 124 - SUPREME COURT] also the clarification issued by the CBEC in Circular No.619/10/2002-CX dated 19.02.2002, where the Tribunal had rejected the appeal of the appellant on the issue of inclusion of the value of the sprouts, the Adjudicating Authority had confirmed the demands. There are no reason to interfere with the impugned order and hence, the same is affirmed - appeal dismissed.

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• 2025 (1) TMI 674
  Clandestie removal - difference between balance sheet and ER-1 return - demand of clandestine manufacture or clearance confirmed purely on assumption and presumption - Invocation of Extended period of limitation. Whether the difference between the financial statement and ER-1 returns is sufficient proof of alleged clandestine removal? - HELD THAT:- The entire case of Revenue is based upon the audit objection which is based on the comparison of entries made in the statutory records vis- -vis the balance sheet. It is observed that the appellant has explained the differences by referring to the number of their final product as entered in ER-1 returns as also on balance sheet. Apart from that it is found that there is virtually no evidence on record to indicate and establish clandestine manufacture and removal of goods. It is well settled law that the onus to prove clandestine activities is upon the Revenue and the same is required to be discharged by production of positive evidences. Such a demand cannot be confirmed on assumptions and presumptions - This Tribunal in the case of Sharma Chemical Vs. CCE [ 2000 (12) TMI 161 - CEGAT, KOLKATA] has held that noting in the private records may raise suspicion but for confirming the charge of clandestine removal based on those records, there must be corroborative evidence in the form of installed capacity, raw material, utilization, labour employed, power consumed, goods actually manufactured and packed etc. Similar have been the findings of Hon ble High Court of Allahabad in their another decision titled as Commissioner of C.Ex., Meerut-I Vs. R.A. Castings Pvt. Ltd. [ 2010 (9) TMI 669 - ALLAHABAD HIGH COURT] holding that the income shown in balance sheets unless and until is linked to some other clinching evidence, cannot be the proof of clandestine removal of goods, has been upheld by Hon ble Apex Court in the case of Commissioner Vs. R.A. Castings Pvt. Ltd. [ 2011 (1) TMI 1302 - SC ORDER] . In light of this discussion, the department has failed to prove the allegations of clandestine removal of goods and noticed difference in the balance sheet compared with the ER-1 return is the presumptory basis of raising the said allegation - the findings in the impugned order to this aspect are therefore liable to be set aside. Based on said difference whether appellant is liable to pay duty on the differential amount? - HELD THAT:- It is a settled principle of law that service tax can be levied only when there is a clear identification of service provider, service recipient and consideration paid for the same. In the absence of any such evidence of the service recipient and the service provided, service tax cannot be demanded and confirmed. For this reason, it is not open for the Department to raise demands on the basis of other statutory returns like Income Tax Returns or balance sheets without proving that such service has been rendered by the assessee and consideration thereof has been received. Similarly, no service tax demand can be raised and confirmed on the basis of notional income. Section 32(2) of Indian Evidence Act, 1872 also permits acceptance of such document without a formal proof. The recent decisions of the Tribunal, as follows, have also held that the difference between the financial statements of the assessee and the returns cannot be the sole basis of the demand confirmed. Invocation of Extended period of limitation - HELD THAT:- The show cause notice has been issued invoking the provision of sub-section (1) of Section 73 of Finance Act, 1994. It has already been observed that the demand has been confirmed on the basis of assumptions and that the no evidence has been produced by the department to support the allegations to suggest any positive action of the appellant to have any intent to evade the duty - Since, the burden was upon the department to prove the allegations which remains undischarged. The extended period of limitation and the provision of Section 73(1) of Central Excise Act, 1944 has wrongly been invoked. Conclusion - i) The department failed to prove clandestine removal and that the demand based on financial discrepancies was unsustainable. ii) The extended period of limitation and the provision of Section 73(1) of Central Excise Act, 1944 has wrongly been invoked. iii) The show cause notice itself is barred by time. In fact, the imposition of penalty is also liable to be set aside. Appeal allowed.

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• 2025 (1) TMI 673
  Recovery of sanctioned refund that was granted to the Respondent under the CENVAT Credit Rules - HELD THAT:- It is an admitted fact that the Respondent was holding CENVAT credit in their account at the relevant time and as per Section 5 of the CENVAT Credit Rules, if any input is used in manufacture of final product, which is cleared for export under Bond or letter of undertaking, the CENVAT Credit in respect of such input shall be allowed to be utilized by the manufacturer towards payment of duty of excise on any final product cleared for home consumption and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safe guards, conditions and limitations as prescribed in the relevant notification. The Respondent had applied for refund of unutilized CENVAT credit amounting to Rs.1,23,04,382/- and Adjudication authority as per the order dated 16.06.2009 sanctioned only Rs. 88,37,166/- though the Appellant admits that the CENVAT credit available against the goods exported during the same period was Rs. 1,23,04,383/-. Conclusion - The entire proceedings initiated against the Respondent are unsustainable. Refund is allowed. Appeal of Revenue dismissed.

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• 2025 (1) TMI 672
  Process amounting to manufacture or not - activity of packing/ repacking, labeling/ re-labeling of machine parts undertaken by the appellants - classification of earthmoving machines - to be classified as automobiles or not - HELD THAT:- This Bench in the case of Donaldsons India Filter Systems Pvt. Ltd. [ 2024 (7) TMI 544 - CESTAT CHANDIGARH ] held that the amendment carried out w.e.f. 29.04.2010 makes it abundantly clear that a legislature did not intend to tax the parts, components and assemblies of earthmoving equipment etc. under the Head Automobiles ; therefore, to this extent, the demand for the period prior to 29.04.2010 cannot be sustained. It is further found that Commissioner, Pune vide his Order dated 13.07.2012 observed that the activities of packing and repacking of parts, components and assemblies of earth moving machinery falling under Chapter Heading 8429. manufactured by the assessee, have been made liable to Central Excise duty retrospectively, with effect from 29-04-2010, in view of the retrospective amendment made in the Third Schedule to the Central Excise Act, 1944, by inserting Entry 100A in the said Schedule vide Section 73 read with Twelfth Schedule to the Finance Act, 2011. The Finance Act. 2011, got assent of the Hon ble President of India, on 08-04-2011 and hence the said retrospective amendment came into force only on 08-4- 2011. Conclusion - i) The word automobile has not been defined in the Central Excise Act, and thus, common parlance and dictionary definitions should guide its interpretation. ii) The amendment made in the Third Schedule to the Central Excise Act by Finance Act, 2011 w.e.f. 29.04.2010 by adding serial no. 100A to the Third Schedule is prospective in nature. iii) Earthmoving machines involved in the present appeals are not automobiles. The impugned orders cannot be sustained and are liable to be set aside - Appeal allowed.

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• 2025 (1) TMI 671
  Recovery of fraudulently availed Cenvat Credit in terms of Rule 14 of CC Rules read with proviso (1) to Section 11A of CEA - Whether approval of a Resolution Plan by the NCLT extinguishes the claims of all creditors, including statutory authorities, and abates ongoing proceedings related to such claims? - HELD THAT:- The identical matter has been considered by two coordinate benches of the Tribunal; Mumbai Bench in the case of M/s Jet Airways (India) Limited vs. Commissioner of Service Tax-IV [ 2023 (5) TMI 767 - CESTAT MUMBAI ] and Hyderabad Bench in the case of Icomm Tele Ltd. vs. Commissioner of Central Tax, Puducherry [ 2023 (10) TMI 1344 - CESTAT HYDERABAD ]. It is pertinent to refer the findings of Mumbai Bench of the Tribunal in the case of M/s Jet Airways (India) Limited which was disposed of vide its order [ 2023 (5) TMI 767 - CESTAT MUMBAI ] and it was ordered that the appeals stand abated once the Resolution Plan has been approved by NCLT and the CESTAT has become functus officio in the matters relating to this appeal. Conclusion - Once the Resolution Plan has been approved by the NCLT, thereafter, the present appeal stands abated as the CESTAT has become functus officio in the matter relating to the present appeal. The appeal filed by the appellant is disposed of as abated.

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• 2025 (1) TMI 670
  Method of valuation - Section 4 or Section 4A of the Central Excise Act - Valuation of the physician samples manufactured by the Appellant and sold on principal to principal basis to other pharmaceutical manufacturers/brand owners of such products - extended period of limitation - HELD THAT:- The issue is no more res integra. The Hon ble Supreme Court in the matter of CCE, Surat Vs. M/s Sun Pharmaceutical [ 2015 (12) TMI 670 - SUPREME COURT ], wherein it was categorically held that The transaction in question was between the assessee and the distributors. Between them, admittedly, price was charged by the assessee from the distributors. What ultimately distributors did with these goods is extraneous and could not be the relevant consideration to determine the valuation of excisable goods. When we find that price was charged by the assessee from the distributors, the show cause notice is clearly founded on a wrong reason. The case would squarely be covered under the provisions of Section 4(1)(a) of the Act. In view thereof, the Central Excise Rules would not apply in the instant case. Extended period of limitation - HELD THAT:- In the absence of any allegation regarding suppression of facts or fraud, invoking the extended period of limitation is also unsustainable. Conclusion - The valuation of physician samples sold on a principal-to-principal basis should be based on transaction value under Section 4, not Section 4A. The extended period of limitation requires evidence of fraud or suppression, which was absent in this case. Appeal allowed.

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• 2025 (1) TMI 669
  Determination of assessable value for the completed vehicles under Rule 10A(iii) read with Rule 8 of the Central Excise (Determination of Price of Excisable Goods) Rules, 2000, when the vehicles are used captively by the Defense Establishment and not sold - HELD THAT:- In the appellant s own case, on the identical issue, for the previous period, the Principal Bench of the Tribunal in M/S PERFECT MECHANICAL INDUSTRIES VERSUS C.C.E. DELHI IV [ 2015 (5) TMI 525 - CESTAT NEW DELHI] , has considered the issue and has held The Department seeks to demand duty on 110% of the fabrication charges by invoking Rule 8 of the Central Excise Valuation Rules. Rule 8 of the Central Excise Valuation Rules is applicable only when the goods manufactured by a manufacturer are captively consumed by him or by some other manufacturer on his behalf but this is not the case here as the appellant after manufacturing the complete vehicle by constructing the body on the duty paid chassis received by them, returned the complete vehicles to M/s Ashok Leyland / vehicle factory Jabalpur, who in turn supplied those vehicles to the Armed Forces. Conclusion - The appellant was not liable for additional duty based on inflated assessable value calculations under Rule 10A(iii) and Rule 8. Appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (1) TMI 668
  Contempt petition alleging disobedience of the judgment ALOK CHITRA MANDIR VERSUS DY. COMMISSIONER (ADMN.) ORS [ 2014 (4) TMI 1329 - RAJASTHAN HIGH COURT] - application of the petitioner under Rule 32 of the Rajasthan Entertainment Advertisement Tax Rules, 1957 - validity of Section 9A of the Entertainment Tax Act, 1957 upheld - HELD THAT:- A bare perusal of Court vide judgment ALOK CHITRA MANDIR makes it clear that the Court, in specific terms, held that the petitioner could not have been deprived of the benefit of the amended scheme which came into effect from 23.02.1995 and further, the contention of the department that the petitioner would be governed by the old un-amended scheme could not be accepted. Vide the judgment, the Deputy Commissioner was only directed to decide whether the petitioner assessee would be entitled to any refund of the amount of compensation of Entertainment Tax already paid by it in excess. The Deputy Commissioner was directed to examine the application of the petitioner for rectification of the mistake in terms of Rule 32 of the Rules of 1957. The same was to be done keeping into consideration the fact whether the petitioner had realized tax in terms of the old un-amended scheme or not, that is, whether the doctrine of unjust enrichment would come into play because of which the petitioner would not be entitled for refund of the compensation amount as paid in excess. However, a bare perusal of the order impugned dated 08.09.2016 makes it clear that the Deputy Commissioner, in total contravention to the finding as recorded by the Court in judgment ALOK CHITRA MANDIR, again held that the petitioner would not be entitled to the benefit of the amended scheme and therefore, affirmed the order dated 05.04.1995. In the specific opinion of this Court, the said approach of the Deputy Commissioner clearly amounts to the defiance of the judgment ALOK CHITRA MANDIR. However, a perusal of the order dated 08.09.2016 makes it clear that no such consideration has been made by the authority. True it is that in contempt jurisdiction the Court is not required to consider as to what the judgment or order should have contained but then definitely, it has to consider the directions issued in the judgment/order. Evidently, in the judgment dated 04.04.2014, there was a specific finding recorded by the Court that the petitioner shall be entitled to the benefit of the amended scheme and once the said finding had been recorded by the Court, the Authority i.e., the respondent-contemnor could not have again adjudicated the same issue and recorded a finding totally contrary to the finding as recorded by the Court. Conclusion - There appears to be no justifiable reason to deprive the petitioner assessee from benefit of the amended scheme which came into offing w.e.f. 23rd of February 1995. The respondent-contemnor is hereby directed to recall its contemptuous order dated 08.09.2016 and pass a fresh order strictly in compliance of the judgment ALOK CHITRA MANDIR VERSUS DY. COMMISSIONER (ADMN.) ORS [ 2014 (4) TMI 1329 - RAJASTHAN HIGH COURT] . Let the matter be listed on 10.02.2025.

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• 2025 (1) TMI 667
  Challenge to order of attachment passed by the respondent-authority under the provision of the Gujarat Sales Tax Act, 1961 - priority of charges - charge created by the Sales Tax Department over the property has precedence over the charge created by the bank under SARFAESI Act - HELD THAT:- In case of Partners of Siddheshwar Tax Fab Ors vs. State of Gujarat and ors [ 2024 (7) TMI 1547 - GUJARAT HIGH COURT] , this Court held the charge in respect of the property in question created for sales tax dues or VAT dues is of no avail and has no efficacy in law in view of the provisions of SARFAESI Act and the RDB Act. The property in question was sold by respondent no.6-Bank under the provisions of SARFAESI Act and the petitioners were successful purchasers and the sale certificate is issued and sale deed is also executed by which the petitioners have become absolute owners of the property and therefore considering the existing position of law, the charge created by the respondent State over the property in question in the year 2018, cannot be sustained and is accordingly quashed and set aside and as a consequence the mutation entries in revenue records also stands deleted. Conclusion - The respondent-authorities are directed to remove the charge over the property in question as it is not in dispute that the respondent-Bank has created the charge prior in point of time and hence, as per the settled legal position, the charge created by the Sale Tax Department subsequently in the Year 2017-18 would not survive and accordingly, mutation entry in the revenue record stands deleted. Petition disposed off.

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• 2025 (1) TMI 666
  Rejection of petitioner s claim of ITC by invoking Section 19(5)(c) of the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- It was thus submitted that the impugned order insofar as it invokes Section 19(5)(c) of the Act, cannot be sustained. - Following the precedents, the submission of the petitioner accepted. The learned counsel for the petitioner would request that the right of the department to reconsider subsequent to the order of the Hon ble Supreme Court may be preserved. In view thereof, the impugned order is set aside and the right of the Department to revisit/ reconsider the issue invoking Section 19(5)(c) of the Act, subsequent to the order of the Hon ble Supreme Court stands preserved. The writ petition stands disposed of.

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• 2025 (1) TMI 665
  Levy of penalty under Section 12(3)(a) of the Tamil Nadu General Sales Tax Act, 1959 - Taxability of the consideration received on sale of unredeemed articles by the auctioneers in terms of the Tamil Nadu General Sales Tax Act, 1959 - assessee s contention at the stage of assessment was that it is the auctioneer that would be so liable - HELD THAT:- The levy of penalty under Section 12 (3) (a), in the case of non-filing of returns, is, in our view, automatic. Admittedly, in the present case, the petitioner has not filed the returns and hence, the basis of assessment would be irrelevant - in any event, the assessing authority has rightly proceeded to assess the actuals of the sale consideration as obtained from the auctioneers and hence there is no question of best judgment assessment. This argument of the petitioner is hence rejected and levy of penalty under Section 12 (3) (a) is confirmed. Since the petitioner has raised a dispute in respect of the period for which the amounts have remained unpaid (relating to the levy of penal interest alone), let objections be submitted in writing before the assessing authority within a period of two (2) weeks from date of receipt of a copy of this order. Upon receipt of the objections, if any, petitioner will be heard and orders will be passed in respect of the quantification of the penal interest to be demanded, if any. It is made clear that there is no flaw in the demand of penal interest per se and it is only in respect of the period to which the interest relates, that the assessee is extended an opportunity. The reduction in rate of tax dealt with under paragraph 3 will be taken note of at this juncture and a revised demand prepared. Conclusion - i) The petitioner is liable for sales tax on auction turnover. ii) The penalty under Section 12(3)(a) is confirmed due to non-filing of returns. Petition dismissed.

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