TMI Tax Updates - e-Newsletter
January 17, 2025

Case Laws in this Newsletter:

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

Articles

1. Corporate Social Responsobilities - Decoded

   By: Ketaan Mehta

2. CONTRAVENTION OF SECTION 5 OF THE FOREIGN EXCHANGE MANAGEMENT ACT, 1999

   By: DR.MARIAPPAN GOVINDARAJAN

3. RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

4. Export of Chemicals from India

   By: YAGAY andSUN

5. Export of Refrigerants from India

   By: YAGAY andSUN

News

1. Arunachal Pradesh cabinet nod to SGST relief for two hydropower projects

2. Will incorporate suggestions from all sections to prepare a good budget: J’khand Finance minister

3. Global economic conditions to weaken in 2025, India's strong growth continues: WEF

4. SC criticises ED over bail conditions for women in money laundering cases

5. Nine Years of Startup India

6. India is the first responder for Global South in times of need: Shri Piyush Goyal

7. Secretary, DFS Shri M. Nagaraju Chairs review meeting on progress of Schemes of Financial Inclusion with Public Sector Banks (PSBs) and Private Banks

8. Sule wants ED probe in Karad's bank accounts; his flat near Pune city gets property tax notice

Notifications

Customs

1. 03/2025 - dated 15-1-2025 - Cus (NT)

Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver

2. 02/2025 - dated 15-1-2025 - Cus (NT)

Sea Cargo Manifest and Transshipment (First Amendment) Regulations, 2025

3. 01/2025 - dated 14-1-2025 - Cus (NT)

Amendment in Notification No. 12/97-Customs (N.T.) dated the 2nd April, 1997

FEMA

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

Foreign Exchange Management (Deposit) (Fifth Amendment) Regulations, 2025

5. FEMA 395(3)/2025-RB - dated 14-1-2025 - FEMA

Foreign Exchange Management (Mode of Payment and Reporting of Non- Debt Instruments) (Third Amendment) Regulations, 2025

GST - States

6. 09/2024-State Tax (Rate) - dated 10-1-2025 - Maharashtra SGST

Seeks to amend Notification No. 13/2017- State Tax (Rate) dated 29th June, 2017

7. 08/2024-State Tax (Rate) - dated 10-1-2025 - Maharashtra SGST

Seeks to amend Notification No. 12/2017-State Tax (Rate) dated 29th June, 2017

8. 07/2024-State Tax (Rate) - dated 10-1-2025 - Maharashtra SGST

Seeks to amend Notification No. 11/2017- State Tax (Rate) dated 29th June, 201

9. 06/2024-State Tax (Rate) - dated 10-1-2025 - Maharashtra SGST

Seeks to amend Notification No. 4/2017- State Tax (Rate) dated 29th June, 2017

10. 05/2024-State Tax (Rate) - dated 10-1-2025 - Maharashtra SGST

Seeks to amend Notification No. 1/2017- State Tax (Rate) dated 29th June, 2017

Highlights / Catch Notes

GST

• Hon'ble Delhi HC: Grounds of Arrest Must Be Communicated in Writing.

  Circulars : The Hon'ble Delhi High Court held that grounds of arrest must be communicated in writing to the arrested person, relying on Supreme Court judgments. It distinguished between 'reasons for arrest' and 'grounds of arrest'. 'Grounds of arrest' require details necessitating the accused's arrest to provide opportunity for defending against custodial remand and seeking bail. Instruction amended to mandate furnishing grounds of arrest in writing as annexure to arrest memo and taking acknowledgment.
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• Delayed generation of Draft GSTR-2B for December 2024 on 16th January 2025.

  News : Draft GSTR 2B for December 2024 will be generated on 16th January 2025 due to extended due dates for filing GSTR-1 and GSTR-3B returns for December 2024 quarter as per Notifications No. 01/2025 and 02/2025 dated 10th January 2025 in accordance with rule 60 of CGST Rules, 2017. Taxpayers can recompute Draft GSTR-2B if any action is taken in IMS after generation.
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• Here is a clear, tweet-style title within 15-20 words, with relevant GST Waiver Scheme: File Forms GST SPL 01/02, Withdraw Appeals to Be Eligible.

  News : Taxpayers can file applications under the waiver scheme using Forms GST SPL 01 and GST SPL 02 on the GST portal. To be eligible, appeals against the demand order/notice/statement must be withdrawn. For appeals filed before 21.03.2023, taxpayers must request withdrawal from the Appellate Authority, which will forward it to GSTN. Difficulties can be reported by raising a ticket under "Issues related to Waiver Scheme" on https://selfservice.gstsystem.in.
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• HC quashes anti-profiteering orders, mandates equal GST benefit for real estate buyers.

  Case-Laws - HC : The Hon'ble HC quashed the orders passed by the National Anti-Profiteering Authority, holding that to determine profiteering in real estate, the total GST savings for each project must be calculated and divided by the total area to arrive at the per square feet benefit to be passed on equally to flat buyers with equal area. The HC directed the Competition Commission to pass appropriate orders accordingly.
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• Assessing officer's order quashed for violating natural justice principles.

  Case-Laws - HC : HC allowed petition - Assessing officer's order violated principles of natural justice by denying opportunity to petitioner to present defense - Failure to serve show cause notice rendered proceedings flawed - Appeal remedy denied due to delay caused by lack of knowledge of order - Procedural requirements mandatory, non-compliance invalidates actions - Fair opportunity must be given to all parties - Appeal timelines to consider actual knowledge of orders - Assessing officer's order treated as show cause notice to enable petitioner to file objections.
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• Impugned order reversing ITC on double taxation premise set aside; re-examination allowed.

  Case-Laws - HC : The HC set aside the impugned order reversing input tax credit (ITC) on the premise of double taxation of same supplies. The respondent was granted liberty to examine if the supplies covered in the impugned order and the order dropping the proposal were identical. If found to be the same, the respondent can proceed in accordance with law after issuing fresh notice. The petition was disposed of.
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• Petitioner's statutory IGST refund entitlement for zero-rated exports upheld despite technical glitch.

  Case-Laws - HC : HC directs amendment of system to reflect corrected shipping bill details, process IGST refund claim within 8 weeks despite technical glitch preventing refund under Sec 16(3)(b) IGST Act read with Sec 54 GST Act for zero-rated exports. Petitioner's statutory entitlement to be honored. Petition disposed of.
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• High Court remands input tax credit case for fresh order u/s 16(5.

  Case-Laws - HC : HC allowed the petition by remanding the matter to the Adjudicating Authority. The alleged violation of Section 16(4) of the CGST Act by the petitioners for not complying with input tax credit provisions would no longer exist due to the insertion of Section 16(5). The Adjudicating Authority is directed to pass a fresh de novo order considering Section 16(5), which came into operation on 01.07.2017, after verifying the facts.
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• HC allows transitional credit carry forward but interest payable, quashes penalty.

  Case-Laws - HC : The HC held that transitional Cenvat Credit carried forward qualifies as "input tax credit" under the CGST Act. Interest u/s 50(3) is payable for wrongly availing and utilizing such credit. However, imposing penalty u/s 122(2)(b) read with 74(1) requires evidence of fraud or willful misstatement, which was absent as the petitioner acted under a bona fide belief. While upholding interest liability, the HC quashed the penalty recognizing lack of fraudulent intent by the petitioner, a government company. The petition was allowed in part.
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Income Tax

• Central Power Research Institute approved for Scientific Research tax deduction.

  Notifications : CBDT notifies Central Power Research Institute (CPRI) Bengaluru as approved 'Research Association' for 'Scientific Research' u/s 35(1)(ii) of Income Tax Act 1961 for AYs 2025-26 to 2029-30 with effect from PY 2024-25. No person adversely affected by granting retrospective effect.
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• Lower tax rate allowed despite procedural error due to Covid-19 hardship.

  Case-Laws - HC : The HC allowed the assessee to file Form 10IC before the AO to claim benefit u/s 115BAA. Despite not filing Form 10IC along with the return, the assessee's conduct showed intention to opt for taxation u/s 115BAA. The HC considered the inadvertent procedural error due to Covid-19 pandemic and difficulties in uploading the form. The AO was directed to permit filing Form 10IC and consider granting relief if other conditions are met.
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• Interest earned by co-op society from district co-op bank deductible u/s 80P(2)(d.

  Case-Laws - HC : The HC held that the provisions of Section 80P(2)(d) would apply to the interest earned by the assessee cooperative society from the Surat District Cooperative Bank Ltd. The PCIT was not justified in invoking revisionary powers u/s 263, as the Tribunal rightly allowed deduction u/s 80P(2)(d) following binding precedents. The twin conditions for invoking Section 263 of erroneous assessment prejudicial to revenue were not fulfilled. The HC decided in favor of the assessee.
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• Reassessment notice quashed: AO can't reopen mechanically based on third-party info.

  Case-Laws - HC : The HC quashed the reopening notice for AY 2015-16. The AO mechanically reopened assessment without independent application of mind, merely relying on information from DGIT about alleged non-genuine derivative trades. The assessee had disclosed profits from futures/options trading which were accepted in regular assessment. Reopening based on change of opinion that such profits were from derivatives is impermissible. The AO failed to form an independent reasonable belief of income escaping assessment after examining assessee's records. Mere borrowed satisfaction from third-party information cannot justify reassessment without verifying assessee's specific facts.
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• Penalty under 270A set aside for substantial compliance despite no Form 68.

  Case-Laws - AT : ITAT set aside CIT(A)'s order confirming penalty u/s 270A for misreporting income. Assessee substantially complied with s.270AA by paying tax, not contesting assessment, applying for waiver on plain paper despite not filing Form 68. AO didn't specify misreporting clause. Remanded to CIT(A) to decide if Form 68 dispensable when substantive conditions met, pass reasoned order on misreporting applicability, allow assessee to produce evidence. Appeal allowed for statistical purposes.
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• Amalgamated company entitled to TDS, advance tax credits of amalgamating firm.

  Case-Laws - AT : The ITAT held that since the income of the amalgamating company was included in the amalgamated company's income u/s 199(1) read with Section 198, the credit for TDS and advance tax paid by the amalgamating company should have been allowed to the amalgamated company. As the amalgamating company ceased to exist after amalgamation, with all assets and liabilities transferred to the amalgamated company by NCLT order, the TDS and advance tax credits were to be granted to the amalgamated company. The grounds of appeal regarding denial of such credits were allowed. The ITAT also held that since no income addition was made and only tax credits were disallowed, the appeal against the assessment order u/s 143(3) was valid.
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• UK company found to have permanent establishment in India; 15% booking fees taxable.

  Case-Laws - AT : Appellant, a UK company, had a business connection and PE in India u/s 9(1). 15% of booking fees were attributable to the PE in India, following earlier decisions for AY 2018-19 and 2019-20. Observations regarding appellant's status as a conduit entity were unnecessary and irrelevant. ITAT allowed appellant's appeal.
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• Reassessment quashed due to discrepancy between reasons in 148A notices.

  Case-Laws - AT : ITAT quashed reassessment proceedings initiated u/s 148 against assessee. There was a difference between reasons communicated in notice u/s 148A(b) alleging bogus transactions of Rs. 50 lakh and subsequent order u/s 148A(d) making addition of Rs. 9.68 crore for purchases from non-filers. ITAT held initiation of proceedings itself was flawed as issues in 148A(b) notice were not carried into 148A(d) order. Following Banyan Real Estate Fund Mauritius, ITAT allowed assessee's appeal quashing reassessment notices and order.
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• Interest expenditure allowed as cost for computing LTCG on sale of building.

  Case-Laws - AT : The ITAT upheld the CIT(A)'s decision allowing the deduction of interest expenditure while computing LTCG on sale of a building, treating it as part of the cost of acquisition. This was based on the Delhi HC judgment in Mithlesh Kumari's case. The ITAT noted the proposed amendment in Sec 48 from AY 2024-25 disallowing such interest deduction, clarifying the existing legal position permitting it. Hence, no interference was warranted in the CIT(A)'s order.
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• Rights relinquished under compromise treated as transfer of capital asset, capital gains calculated.

  Case-Laws - AT : The ITAT upheld the AO's treatment of relinquishment of rights under a compromise as transfer of a capital asset. The AO calculated capital gains based on the value of land received in lieu of relinquishing rights in litigation. The assessee failed to rebut the AO's findings that properties acquired by other entities were effectively received by the assessee pursuant to the compromise deed to quash criminal proceedings against a third party without the assessee paying anything. The ITAT rejected the assessee's argument of being a purchaser of the immovable property and decided against the assessee.
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• ITAT upholds deletion of cash addition; assessee merely a commission agent.

  Case-Laws - AT : The ITAT dismissed the Revenue's appeal against the CIT(A)'s order deleting the cash addition in the assessee company's hands. The ITAT held that the assessee acted merely as a commission agent, and the payments related to Murlidhar Infracon Pvt. Ltd. The conveyance deeds showed that Murlidhar Infracon Pvt. Ltd. accepted making payments to farmers before its incorporation, indicating its directors/shareholders arranged the payments. No evidence suggested the payments were routed through the assessee's bank accounts. Hence, in the absence of cogent material, the ITAT upheld the CIT(A)'s findings and dismissed the Revenue's appeal.
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• Minor's interest income disallowance restored to AO for fresh adjudication.

  Case-Laws - AT : ITAT allowed assessee's appeal for statistical purposes and restored issue of disallowance of interest expenditure against minor son's interest income to AO for fresh adjudication after proper inquiry regarding alleged loans taken by minor, observing AO's findings were cryptic and CIT(A) passed impugned order based on shallow assessment order.
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Customs

• Customs facilitates ex-bond exports from bonded warehouses via ICES 1.5.

  Circulars : The public notice allows implementation of ex-bond shipping bills in ICES 1.5 for export of warehoused goods from bonded warehouses. It provides details on the design, workflow, and functionality of filing ex-bond shipping bills, including capturing warehouse code, item-wise details of import bill of entry, and linking with the import ledger for debiting/crediting quantities. No incentives like drawback or advance authorizations are available for such exports. The trade is advised to refer to the relevant circular and advisory for further details.
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• Duty drawback entitlement: Submit representation with documents within 2 weeks.

  Case-Laws - HC : Petitioner directed to submit representation with supporting documents for entitlement to duty drawbacks within two weeks, affording reasonable opportunity of hearing. Impugned order set aside by HC. Petition disposed.
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• Reduced 10% duty allowed on populated PCBs for GPON ONT/OLT manufacturing.

  Case-Laws - AAR : The AAR held that the applicant is eligible to claim the benefit of reduced duty of 10% under Sl. No. 22 of Notification No. 57/2017-Customs for importing populated printed circuit boards (PCBs) for manufacturing telecommunication equipment, specifically GPON ONTs/OLTs. The PCBs are not finished products but parts, and the configuration, testing, and addition of software play a crucial role in giving character to the GPON ONT/OLT device. The decision is based on the CESTAT Mumbai ruling in Commissioner of Customs, Mumbai v. Reliance Jio Infocomm Ltd., upheld by the SC, which dealt with classification of similar populated PCBs incorporated in photonic service switches.
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• Imported aluminium formwork materials classified under CTH 76109090, not CTH 84806000.

  Case-Laws - AT : Imported 'Aluminium Formwork Materials' classified under CTH 76109090, not CTH 84806000. Not a mould under Chapter 84 exclusion for structures. Entitled to exemption under Notification No. 152/2009-Cus S.No. 610 as import from Republic of Korea. Denial of notification benefit set aside for lack of reasons. Appeal allowed by CESTAT.
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• Procedural lapse without revenue loss or malafide warrants lower penalty.

  Case-Laws - AT : Appellant failed to submit required documents within stipulated time for provisional duty assessment, contravening Customs (Provisional Duty Assessment) Regulations, 2011. Adjudicating authority imposed Rs.15,000 penalty. Commissioner (Appeals) enhanced penalty to Rs.10,00,000 for each of 20 Bills of Entry. CESTAT held appellant could not submit documents due to pending appeals on same issue before Tribunals and High Courts. Procedural lapses without revenue loss or mala fide intent should not attract severe penalties. Rs.15,000 penalty sufficient for procedural violation. Enhanced penalty of Rs.10,00,000 set aside, original Rs.15,000 penalty restored as adequate. Appeal allowed.
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DGFT

• Voluntary Disclosure Process for Export Violations of SCOMET Items Notified by DGFT.

  Circulars : DGFT notified guidelines for voluntary disclosure of non-compliance/violations related to export of SCOMET items and regulations. It covers violations like unauthorized export of SCOMET items, exports to UNSC sanctioned entities, unauthorized access to technical data/assistance. Inter-Ministerial Working Group (IMWG) will consider mitigating factors like intention, cooperation, compliance measures. Voluntary disclosure procedure, required documents, and potential actions by DGFT like show cause notice, adjudication order are outlined. Violations under SCOMET Category 0, CWC Schedules are excluded.
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• GIA Dubai lab authorized for diamond certification/grading 0.25 carat+ under Foreign Trade Policy.

  Circulars : GIA Laboratory, DMCC, Dubai, UAE has been included in the list of authorized laboratories under Para 4.73 of the Handbook of Procedures 2023 for certification/grading of diamonds of 0.25 carat and above by the DGFT in exercise of powers conferred under Paras 1.03 and 2.04 of the Foreign Trade Policy 2023.
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FEMA

• Resident exporters can now open foreign currency accounts abroad.

  Notifications : RBI amended Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015 to allow resident exporters to open, hold and maintain foreign currency accounts outside India for realization of full export value and advance remittances. Funds can be utilized for import payments or repatriated to India within next month after adjusting forward commitments, subject to export realization and repatriation norms under FEMA Export Regulations, 2015.
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• Foreign currency dealings penalized under FERA sections 8(1), 8(2).

  Case-Laws - AT : Appellants penalized u/ss 8(1) and 8(2) of FERA for unauthorized dealing in foreign currency. Foreign currency recovered from appellants' premises. AT upheld contravention but reduced penalty from Rs. 80 lakhs to Rs. 8 lakhs each, considering excessive amount despite involvement in unauthorized forex transactions.
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IBC

• Corporate debtor's counter claim held non-maintainable, claims not in resolution plan extinguished.

  Case-Laws - AT : Appellant's counter claim against the Corporate Debtor was held not maintainable within CIRP proceedings. Claims not included in the approved Resolution Plan stand extinguished. Section 60(5) of the IBC cannot be invoked to challenge extinguishment of claims post Resolution Plan approval, as it would delay proceedings and distort the Code's object. The time-bound CIRP process precludes entertaining claims outside the Resolution Plan's purview to avoid delays. The NCLAT dismissed the appeal, upholding the Adjudicating Authority's reliance on the Supreme Court's judgment in Adani Power Ltd. v. Shapoorji Pallonji & Co. Pvt. Ltd.
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Indian Laws

• India's exports up 6% to $602.64 bn in Apr-Dec 2024, trade deficit widens.

  News : India's cumulative exports (merchandise & services) during April-December 2024 grew by 6.03% to USD 602.64 Billion compared to USD 568.36 Billion in April-December 2023. Merchandise exports increased by 1.6% to USD 321.71 Billion, while non-petroleum exports rose by 7.05% to USD 272.70 Billion. Major drivers included electronic goods, engineering goods, rice, ready-made garments, and cotton yarn/fabrics. Services exports grew by an estimated 11.61% to USD 280.94 Billion. Overall trade deficit widened to USD 79.50 Billion from USD 69.67 Billion in the corresponding period of the previous year.
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• HC exercises inherent powers to compound offence under NI Act Section 138 based on parties' compromise.

  Case-Laws - HC : The HC held that it can exercise inherent powers to compound the offence u/s 138 of the Negotiable Instruments Act at the revisional stage based on a compromise between parties. Despite dismissal of appeal upholding conviction, the HC can intervene to prevent miscarriage of justice. Section 147 of NI Act allows settlement irrespective of CrPC provisions. The conviction and sentence were annulled by invoking inherent powers to secure ends of justice based on the compromise.
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PMLA

• Trial for money laundering offence can continue independently of predicate offence trial.

  Case-Laws - HC : The HC held that the trial for offences under PMLA can continue independently even during the pendency of trial for the predicate offence. Since the nature of money laundering offence is distinct from predicate offences under IPC, they are unconnected. PMLA trial procedures are separate, so simultaneous trials are not mandatory. The accused cannot stall PMLA trial pending predicate offence trial. The petition for directing simultaneous trial was dismissed.
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VAT

• Lubricant traders' input tax credit claim rejected after open remand.

  Case-Laws - HC : The HC held that the assessing authority and Tribunal were justified in passing a fresh order after remand, as it was an open remand without specific restrictions. Once lubricant became a non-VATable good for traders, the revisionist's claim for input tax credit was rightly rejected, despite judgments cited regarding circulars. The revisionist did not challenge the circular's validity before a competent court. Under revisional jurisdiction, the circular's validity cannot be tested. The classification of goods as VATable or non-VATable determines the input tax credit eligibility. Revision was dismissed.
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Service Tax

• Assessee eligible for VCES despite tax payment before scheme launch.

  Case-Laws - HC : Assessee entitled to benefit under VCES despite payment of principal tax dues after cut-off date of 1st March 2013 but before scheme's introduction on 10th May 2013. HC held payments in this period covered for declaration under scheme. Rejection of assessee's VCES declaration not appealable order as per CBEC circular. Appeal allowed.
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• Services for electricity transmission infrastructure exempt, hire charges rightly excluded, parking construction demand sustained.

  Case-Laws - AT : Respondent provided services to PGCIL for electricity transmission infrastructure, exempt under Notification 11/2010-ST. Hire charges rightly excluded as department failed to prove retention of effective control. Demand reinstated for parking construction for MCD, being commercial activity despite MCD's governmental status. Department precluded from raising new ground of 'site preparation services' at appeal stage. CESTAT allowed appeal partially.
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Central Excise

• Cenvat credit allowed for duty payment on EOU debonded goods.

  Case-Laws - HC : Petitioners permitted to utilize Cenvat credit for payment of excise duty on goods lying at manufacturing plant proposed for debonding from Export Oriented Unit (EOU) scheme instead of cash payment. Relying on SC judgment in Eicher Motors Ltd. allowing utilization of accumulated Cenvat credit and HC judgment in Shilpa Copper Wire Industries equating EOUs with DTA units for Cenvat scheme. Section 142(6)(a) of GST Act also allows refund of outstanding credit in cash. Respondents' demand for cash payment rejected as legitimately availed Cenvat credit can be used for duty payment. Petition allowed as similarly situated assessees permitted to pay duty from Cenvat credit account.
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Case Laws:

• GST

• 2025 (1) TMI 781
  Refund of IGST paid in regard to the goods exported with interest - Zero Rated Supplies - HELD THAT:- It appears that the petitioner is the victim of computer software. It appears that there is no system to give effect of amendment of the shipping bill in the ICEGATE so as to remove the mismatch between the PAN of GST and ID and Shipping Bills GST ID. The order passed by the respondent no.1 on 21.04.2023 under Section 149 of the Customs Act, 1962 by approving the amendment of shipping bill no.8106393 by modifying the IEC Code and GSTIN ought to have been amended in the ICEGATE. However, there is no mechanism to give effect to the order dated 21.04.2023 by the computer software and as such, the order dated 21.04.2023 has remained on paper only without being reflected in the ICEGATE system and because of such technical glitch, the petitioner is not granted the refund of the IGST paid by the petitioner under Section 16 (3) (b) of the IGST Act read with Section 54 of the GST Act. Conclusion - The technical and procedural issues should not obstruct the rightful claims of taxpayers under statutory provisions. The respondents to amend the system to reflect the corrected shipping bill details and process the refund within eight weeks, ensuring the petitioner's entitlement is honored. Petition disposed off.

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• 2025 (1) TMI 780
  Challenge to SCN - cancellation of client s registration under Central Goods and Services Tax Act, 2017 - client is ready and willing to pay the tax, interest, late fee, penalty and any other sum required to be paid - HELD THAT:- Reliance placed in M/S. MOHANTY ENTERPRISES VERSUS THE COMMISSIONER, CT GST, ODISHA, CUTTACK AND OTHERS [ 2022 (11) TMI 1521 - ORISSA HIGH COURT] where it was held that ' the delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc., due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law.' The writ petition is disposed of.

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• 2025 (1) TMI 779
  Challenge to demand notice issued by the Sales Tax Officer pertaining to financial year 2018-19 issued u/s 74 of Odisha Goods and Services Tax Act, 2017 - Date for personal hearing was not given - violation of principles of natural justice - HELD THAT:- Petitioner is relying on directions given in the show cause notice. It was in respect of a demand. Any defect in the show cause notice would cause violation of principles of natural justice. The impugned demand is set aside and quashed - petition disposed off.

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• 2025 (1) TMI 778
  Exemption from E-way bills - all the invoices are less than Rs. 1 Lakh - HELD THAT:- The impugned order dated 09.07.2024 is set aside with a direction to the petitioner to produce the invoices and also raise the issues with regard to the inward invoices before the second respondent on or before 24.01.2025 and thereafter, on receipt of the same, the second respondent shall provide an opportunity of hearing to the petitioner and pass orders within a period of two weeks thereafter. Petition allowed.

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• 2025 (1) TMI 777
  Violation of principles of natural justice - petitioner was adequately notified of the proceedings and given a fair opportunity to respond or not - petitioner is ready and willing to pay 10% of the disputed tax and that he may be granted one final opportunity before the adjudicating authority to put forth their objections to the proposal, to which the learned Government Advocate appearing for the respondent does not have any serious objection. HELD THAT:- The petitioner shall deposit 10% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondent, within a period of four weeks from the date of receipt of a copy of this order - The impugned order dated 28.08.2024 is set aside - petition disposed off.

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• 2025 (1) TMI 776
  Methodology adopted by the National Anti-Profiteering Authority (NAA) and the Director General of Anti Profiteering (DGAP) to determine profiteering in the real estate industry - HELD THAT:- The Hon ble Delhi High Court in the case of Reckitt Benckiser India Pvt. Ltd. [ 2024 (1) TMI 1248 - DELHI HIGH COURT ] has held ' As it is an admitted position that neither the advances received nor the construction activity is uniform throughout the life cycle of the project, the accrual of Input Tax Credit is not related to the amount collected from the buyers. This Court is in agreement with learned counsel of the petitioners that one needs to calculate the total savings on account of introduction of Goods and Services and Tax for each project and then divide the same by total area to arrive at the per square feet benefit to be passed on to each flat buyer. This would ensure that flat-buyers with equal square feet area received equal benefit.' The impugned orders passed by the National Anti-profiteering Authority are quashed and set aside, so as to enable the Competition Commission of India to pass appropriate order in accordance with law. Petitions are accordingly disposed off.

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• 2025 (1) TMI 775
  Challenge to impugned order on the ground of violation of principles of natural justice - petitioner is ready and willing to pay 10% of the disputed tax and that he may be granted one final opportunity before the adjudicating authority to put forth their objections to the proposal, to which the learned Special Government Pleader appearing for the respondent does not have any serious objection. HELD THAT:- The impugned order dated 19.08.2024 is set aside and the petitioner shall deposit 10% of the disputed tax within a period of four weeks from the date of receipt of a copy of this order. On complying with the above condition, the impugned order of assessment shall be treated as show cause notice and the petitioner shall submit its objections within a period of four weeks from the date of receipt of a copy of this order along with supporting documents/material. Petition disposed off.

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• 2025 (1) TMI 774
  Input tax credit - order is ex-facie illegal and without jurisdiction under the provisions of the CGST Act - violation of Section 16 (4) of CGST Act - HELD THAT:- Considering the amendment in CGST Act by insertion of Section 16 (5) of the Act, the alleged default committed by the petitioners of not complying with Section 16 (4) of the Act would now no longer exists subject to verification of the facts by the Adjudicating Authority. In view of such subsequent development which has taken place after passing the impugned order by the respondent authority, the matter is required to be remanded back to the Adjudicating Authority to pass a fresh denovo order considering the provisions of Section 16 (5) which has come into operation w.e.f. 01.07.2017. Petition allowed by way of remand.

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• 2025 (1) TMI 773
  Interest under Section 50(3) of the CGST Act for wrongly availing and utilizing Cenvat Credit - imposition of penalty under Section 122(2)(b) read with Section 74(1) of the CGST Act - transitional Cenvat Credit qualifies as input tax credit under the CGST Act or not. Levy of interest under Section 50(3) of the CGST Act for wrongly availing and utilizing Cenvat Credit - HELD THAT:- On perusal of the impugned orders passed by the respondent authorities, it appears that the petitioner has made a claim to carry forward excess Cenvat Credit in Form GST TRAN-I under a bona fide belief. The interest can be levied under section 50 (3) of the CGST Act which has been substituted by the Finance Act, 2022 with effect from 01.07.2017 where the input tax credit has been wrongly availed and utilized. The definition of input tax credit as per section 2 (63) means the credit of input tax whereas input tax has been defined in section 2 (62) of the Act in relation to a registered person means the Central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the CGST Act and SGST Act and sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act. Thus, on a first blush, it appears it is not an input tax and therefore, not an input tax credit. However, the provisions of section 140 of the CGST Act, stipulates transitional arrangement for input tax credit - the credit available as per the existing law in form of Cenvat credit or any other input tax credit, would fall within the scope of input tax credit under the CGST Act also. Therefore, we are of the opinion that the petitioner was liable to pay interest as computed under the provisions of section 50 (3) for wrongly availing Cenvat credit and the petitioner has rightly deposited such amount after the impugned order was passed. Imposition of penalty under Section 122(2)(b) read with Section 74(1) of the CGST Act - absence of fraud, willful misstatement, or suppression of facts - HELD THAT:- The petitioner was under bona fide belief that amount of Cenvat credit to the extent of Rs. 99,46,810/- was available to be carried forward. Out of the said amount when verification was made by the respondent authority, the petitioner accepted that Cenvat credit to the extent of Rs. 27,78,825/- could not have been carried forwarded and therefore, the provisions of section 122 (1) (b) read with section 74 (1) could not have been invoked by the adjudicating authority, more particularly, when the petitioner has not challenged the confirmation of demand of the excess ITC claimed in Form TRAN-I. Reliance placed by the appellate authority on the decision in case of Union of India v. Rajasthan Spinning Weaving Mills [ 2009 (5) TMI 15 - SUPREME COURT ] discussing the imposition of penalty under section 11AC of the Central Excise Act, 1944 which is stated to be pari-materia provision for levy of imposition of penalty under the GST Act is not applicable in the facts of the case as there was no conscious or deliberate wrong doing on part of the petitioner and as such, the order passed by the adjudicating authority confirming the disallowance of claim of the petitioner of transitional Cenvat Credit of Rs. 27,78,825/- out of transitional Cenvat credit of Rs. 99,46,810/- cannot be said to be claim made for a reason on account of fraud or any suppression of fact to evade tax. The findings arrived at by both the authorities that the petitioner deliberately misstated the facts in TRAN-I so as to utilise Cenvat credit in its payment of output GST liability which was found during the verification of TRAN-I cannot be the basis for imposition of penalty as it cannot be said that there was any intention on part of the petitioner which is a Government company to evade tax. Conclusion - Transitional Cenvat Credit, once carried forward, is treated as input tax credit under the CGST Act, attracting interest if wrongly availed and utilized, but penalties require evidence of fraudulent intent. The levy of interest upheld but the penalty imposed on the petitioner is quashed, recognizing the absence of fraudulent intent. Petition allowed in part.

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• 2025 (1) TMI 772
  Violation of principles of natural justice - petitioner was denied opportunity to put up its defence - absence of service of notice/ the show cause notice - Remedy of appeal having been denied on the ground of delay that was for want of knowledge - HELD THAT:- The court is of the considered view that statutes provide procedure either in their substantive provisions, or under the rules framed thereunder, to ensure that orders are not passed by the authorities whimsically, more especially where the authorities exercise power which is quasi judicial in nature or akin to that. The legal position is well settled on the point that when a thing is required to be done in a particular manner then the same shall have to be done in that manner alone. In the case of SHARIF-UD-DIN VERSUS ABDUL GANI LONE [ 1979 (11) TMI 225 - SUPREME COURT] , it was held that whenever a statute prescribes that a particular act is to be done in particular manner and also lays down that failure to comply with the said requirement leads to a specific consequence, it would be difficult to hold that the requirement is not mandatory and the specified consequence should not follow. As and when mandatory requirement of law is not taken care of in the matter of compliance of procedure before taking decision by assessing authority or any competent authority for that matter, then it becomes inherent defect in the decision making process which cannot be cured at a later stage. If in a decision making procedure adopted by the authority is de hors the provisions of the act or rules framed thereunder, it is liable to be rendered as flawed one. A division bench in the case of M/S SKYLINE AUTOMATION INDUSTRIES VERSUS STATE OF U.P. AND ANOTHER [ 2023 (1) TMI 379 - ALLAHABAD HIGH COURT] has dealt with this principle of law to hold that any subsequent reminder will not cure inherent defect in proceedings initiated against the petitioner. The procedural requirements are mandatory, and failure to comply invalidates subsequent actions. It also established that a fair opportunity must be provided to all parties, and appeal timelines should consider actual knowledge of orders. The order passed by the assessing officer dated 11.12.2023 shall be taken to be notice within the meaning of Section 73 of the GST Act, 2017 to enable the petitioner to file his objections and place his documents before assessing officer/competent authority for its consideration. Petition disposed off.

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• 2025 (1) TMI 771
  Challnege to impugned order on the premise that the same supplies are subject to assessment more than once - reversal of ITC - HELD THAT:- The respondent would submit that though there seem to be some element of overlap, it needs to be verified whether the supplies covered by the impugned order dated 18.07.2024 and the order dropping the proposal dated 21.08.2024 are in respect of the very same / identical taxable supplies on which Input Tax Credit has been claimed. In view thereof, the impugned order is set-aside with liberty to the respondent authority to issue a fresh notice to examine whether the subject supplies in the order dated 21.08.2023 and the impugned order dated 18.07.2024 are one and the same and then proceed if warranted in accordance with law. Petition disposed off.

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• Income Tax

• 2025 (1) TMI 770
  Validity of assessment order - non granting a personal hearing, even though such a hearing was specifically requested - HELD THAT:- It is clear that where a request for personal hearing has been received, the income tax authority of the relevant unit shall allow such a hearing through the National Faceless Assessment Centre, which shall be conducted exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board. Since, in this case, we are satisfied that the Petitioner requested a personal hearing and admittedly, no such personal hearing was granted to the Petitioner, we set aside the impugned assessment order on the grounds of violation of the principles of natural justice and fair play on the ground of breach of Section 144B(6) (vii) and (viii) of the Act, which provisions incorporate the principles of natural justice and fair play. The consequential demand notice/penalty notice issued based on the impugned assessment order will also not survive and are set aside. We remand the matter for fresh consideration and disposal of the show cause notice issued to the Petitioner after granting the Petitioner an opportunity for a personal hearing in terms of the above-referenced statutory provisions.

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• 2025 (1) TMI 769
  Denial of benefit u/s 115BAA - assessee did not file the Form 10IC along with the return within the extended period, as extended by the Circular issued by the Central Board of Direct Tax dated 17th March, 2022 - whether filing of such form would be mandatory or directory? - whether the assessee should be given an opportunity to file Form 10IC before the AO in order to claim the benefit? - HELD THAT:- It is not in dispute that the assessee company has opted for taxation u/s 115BAA and the option was available to the assessee by opting the option given in filing status in Part AGE of the form by return of income in ITR-6. This conduct of the assessee will undoubtedly go to show that the assessee intended to opt to pay tax under the simplified tax regime as also accepted in the Circular issued by the Central Board. During the relevant period there was Covid pandemic which also led to certain other difficulties for the assessee to upload the form along with the return within the extended time thereof. That apart, the assessee has specifically stated that they had certain difficulties in uploading the form in the Income tax portal. Also assessee pointed in case of a HUF opting under the new taxation scheme under Section 115BAC, the portal requires management number of 10IE while filing the income tax return as this being a mandatory column and the assessee continue process of filing ITR without filling the same and if there was non-compliance in filing Form 10IE, the assessee would be aware of that and will submit the same but such facilities is not provided when returns are filed by companies. The peculiar facts and circumstances would show that the error was an inadvertent procedural error and the conduct of the assessee will clearly show that they had opted for taxation u/s 115BAA of the Act. Appeal is disposed of and the matter stands restored back to the file of the Assessing Officer to permit the assessee to file the report in Form 10IC and the Assessing Officer shall consider as to what relief the assessee would be entitled to subject to the conditions that the assessee fulfils all other requisite conditions as per law.

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• 2025 (1) TMI 768
  Estimation of income - bogus purchases - Tribunal justification estimating the addition in respect of bogus purchases @ 6 % - HELD THAT:- When the Tribunal has thought it fit to reduce the disallowance at 6% from 12.5%, the Tribunal had before it the facts which were duly analysed by it. No interference is called for in the said conclusion and findings of the Tribunal in the present appeal by this court. See Pankaj K. Choudhary case [ 2023 (3) TMI 1402 - GUJARAT HIGH COURT] No substantial questions of law.

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• 2025 (1) TMI 767
  Revision u/s 263 - deduction claimed by the assessee u/s 80P (2) (d) which was earned by the assessee in the form of interest from the Surat District Cooperative bank Ltd and hence was not allowable as the activities were not associated with the members of the society - HELD THAT:- Issue involved in this appeal is already decided by this Court in favourof the assesee in case of Ashwinkumar Arban Cooperative Society Limited. [ 2024 (11) TMI 971 - GUJARAT HIGH COURT] held that the provisions of section 80P (2) (d) would be applicable in the facts of the case and the PCIT was not justified in invoking revisional powers under section 263 of the Act which is rightly reversed by the Tribunal holding that the cooperative bank is a cooperative society registered under the Gujarat State Cooperative Societies Act and in view of the various decisions of the Court, the Tribunal after following the same has come to the conclusion that the assessment was not erroneous allowing deduction of section 80P (2) (d) of the Act which is in consonance with the various decisions of the Court as a twin condition invoking section 263 as to the assessment being erroneous and prejudicial to the interest of the revenue are not being fulfilled. - Decided in favour of assessee.

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• 2025 (1) TMI 766
  Validity of reopening of assessment - reason to believe that any income chargeable to tax has escaped assessment - Independent application of mind or borrowed satisfaction - profits under the head of future and options to be treated as derivatives - reopening has been resorted to on the basis of information received under Project Falcon from DGIT(Investigation), Mumbai in March, 2021 through Insight Portal regarding coordinated and premeditated trading by brokers on behalf of their clients on the Bombay Stock Exchange by engaging in reversal trades in illiquid stock options resulting in non-genuine business loss/gains to the beneficiary HELD THAT:- It cannot be held that the department was justified in reopening the assessment for Assessment Year 2015-16, which, we may add, has been done mechanically without application of mind, in the absence of any tangible material. As appears from the reasons recorded that no verification of the material on record is made by the respondent and there is no independent opinion that any income has escaped assessment due to any failure on the part of the assessee in not disclosing fully and truly all material facts necessary for assessment. From the reasons recorded it appears that the initiation of reopening proceedings are on borrowed satisfaction as no independent opinion is formed and on bare perusal of the reasons recorded, it emerges that the AO considering the information received from the insight portal, has issued the impugned notice forming his reason to believe that the income has escaped the assessment on the presumption that the petitioner has been involved in creating the non-genuine profit which is already reflected in the return of income which is accepted in the regular course of assessment by passing the order u/s 143 (3) of the Act. There is no basis to form reasonable belief for escapement of income except the information made available on the insight portal. AO has not considered the material on record to come to the conclusion that there is failure on the part of the petitioner to disclose truly and fully all material facts to have reason to believe for escapement of income. Therefore, on the basis of the information received from another agency on insight portal or from the SEBI report, there cannot be any reassessment proceedings unless the respondent, after considering such information/material received from other sources, consider the same with the material on record in the case of the petitioner assessee and thereafter, is required to form independent opinion, that income has escaped assessment. Without forming such opinion, solely and mechanically relying upon the information received from the other sources, AO could not have assumed the jurisdiction to reopen the assessment based on such information. See Harikishan Sunderlal Virmani [ 2016 (12) TMI 1558 - GUJARAT HIGH COURT] Thus AO could not have assumed the jurisdiction merely and solely relying upon the information made available on the insight portal without forming any independent opinion on the basis of the material on record vis-a-vis the petitioner is concerned. petitioner had disclosed in its return for the Assessment Year 2015-16 the particulars of the profits under the head of future and options which was subsequently accepted by the Department. Therefore, the notice for re-opening the assessment under the head of derivatives is based on change of opinion. The assessee cannot be said to have failed to have fully and truly disclosed all materials facts which would warrant the re-opening after a period of four years, anyways - Decided in favour of assessee.

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• 2025 (1) TMI 765
  Reopening of assessment u/s 147 - reasons to believe - HELD THAT:- As the impugned Notice u/s. 148 of the Act has been issued on the same set of facts, which was the basis of the Notice for re-opening issued in the year 2018, the impugned Notice is without jurisdiction and deserves to be quashed and set aside. Decided in favour of assessee.

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• 2025 (1) TMI 764
  Penalty levied u/sec. 271(1)(b) - assessee could not respond to the statutory notice issued by the CIT(A) - Whether there was a reasonable cause for the assessee's non-compliance with the statutory notices, thereby warranting relief under Section 273B? - AO in the order passed u/sec.144 r.w.s.264 determined the income HELD THAT:- As admitted fact that the two statutory notices u/sec.142(1) were issued by the AO which were during the Covid period, for which, the assessee has a reasonable cause for not appearing before the AO. We find due to non submission to the statutory notice issued by the CIT(A), he passed an ex-parte order sustaining the addition made by the AO. It is the submission of Assessee that adequate opportunity of hearing was not granted by the CIT(A) and since the e- portal was not functioning, therefore, the assessee could not respond to the statutory notice issued by the CIT(A). It is also the submission of Assessee that the assessee, who worked as a Major General in Indian Army, is no more and is being represented by his wife Mrs. Balbir Kaur Birdie and the penalty so levied by the AO and confirmed by the Ld. CIT(A) should be deleted. We find some force in the above arguments of the Learned Counsel for the Assessee. It is an admitted fact that Mr. Sandeep Singh Birdie was a Major General in the Indian Army serving for 34 years. As admitted fact that the assessee has participated in the original assessment proceedings and the AO has passed the order u/sec.143(3). It is also an admitted fact the order u/sec.144 r.w.s.264 of the Act was passed assessing the same income which was determined by the Assessing Officer in the order passed u/sec.143(3) of the Act. Since the two statutory notices u/sec.142(1) were issued during the Covid period and since the assessee was posted in a far-off place and such area was not having proper telephone and internet facility, therefore, under these circumstances, we are of the considered opinion that there was a reasonable cause on the part of the assessee for such non-compliance to the statutory notices issued by the AO. Levy of penalty u/sec.271(1)(b) of the Act is not justified. Appeal of the Assessee is allowed.

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• 2025 (1) TMI 763
  Penalty u/s 270A - misreporting of income - assessee evidently did not file Form No. 68 but had requested for immunity from imposition of penalty on plain paper - HELD THAT:- Since the required Form No. 68 was not filed before the Ld. AO, the Ld. CIT(A) confirmed the penalty imposed by the Ld. AO - CIT(A) has not appreciated the fact that the assessee had substantively complied with the conditions specified u/s 270AA, not contested the assessment order further and had paid the tax. CIT(A) has not considered the fact whether for mere non-filing of Form No. 68 but otherwise making the application on a plain paper for waiver of penalty and fulfilling the substantive conditions, the immunity provided u/s 270AA could be denied to the assessee or not when filing of a Form is only a procedural requirement. higher amount of penalty for mis-reporting of income is specified as per the provisions of sub-section (9) of section 270A and the Ld. AO has not specified under which clause from (a) to (f) the assessee s case fell so as to impose the penalty for misreporting of income. At the most, the case was a case of under reporting of income in the first place. Sub-section (6) of section 270A also excludes cases of under-reported income where the assessee s explanation is found to be bona fide. Since the Ld. CIT(A) has gone by the procedural requirement while the assessee had duly complied with the substantive requirement, and neither in the order of the Ld. AO nor in the order of the Ld. CIT(A) a case of mis-reporting of income has been made out and higher amount of penalty has been imposed, hence, in the interest of justice if the order of the Ld. CIT(A) is set aside and the issue is remitted back to the file of Ld. CIT(A) to decide whether filing of Form 68 could be dispensed with and immunity could be granted when the assessee had paid the taxes, not further contested the order of the Ld. AO and had applied for immunity from imposing of penalty on plain paper. Order to pass a speaking order as to whether it is a case of mis-reporting of income and which of the clauses of section 270A(9) of the Act, if any is attracted for arriving at his decision. The assessee shall file all necessary evidence before the Ld. CIT(A) for the relief claimed and shall not seek unnecessary adjournments. Appeal filed by the assessee is allowed for statistical purposes.

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• 2025 (1) TMI 762
  Non granting the TDS credit and Advance Tax pertaining to the amalgamating company as per the order passed by the Faceless Assessment Centre u/s 143(3) r/w Section 143(3A) and 143(3B) - maintainability of appeal against the assessment order u/s 143(3) - HELD THAT:- Since the income of the amalgamating company had been included in the income of the amalgamated company as per the provisions of Section 199(1) r.w.s.198 the credit for the TDS made in respect of the income of the amalgamating company which was shown in the hands of the amalgamated company ought to have been allowed to the amalgamated company. Since the amalgamating company is no longer in existence and all the assets and liabilities by virtue of the order of the NCLT were taken over by the amalgamated company, even the credit for TDS and advance tax had to be allowed to the amalgamated company. The assessee was claiming only a credit for the tax paid and neither in the intimation u/s 143(1) of the Act nor in the assessment order u/s 143(3) of the Act any addition was made and only the credit for TDS and advance tax was being made, therefore, the same ought to have been allowed in the hands of the person in whose case the income of the earlier entity was finally assessed. Hence, the grounds of appeal in respect of credit for TDS and Advance Tax are allowed pertaining to the amalgamating company while assessing/computing the income u/s 143(3) read with Section 143(3A) and 143(3B) of the Act in the case of the amalgamated company. Hence, Ground nos. 1, 7, 8 9 are allowed. Validity of order u/s 143(3) being infructuous as the cause of action had arisen in the intimation u/s 143(1) - As a finding has been given that the credit of taxes paid has to be allowed in the case of the amalgamated company, hence these grounds of appeal are also allowed and since no variation to the income computation was made in the order u/s 143(3) and the demand arisen on account of intimation u/s 143(1) had been subsumed in the demand raised vide order u/s 143(3), the Ld. CIT(A) ought to have decided the appeal relating to the claim of credit for taxes paid. Hence, all these grounds of appeal are also allowed.

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• 2025 (1) TMI 761
  Bogus purchases - additions of gross profit over and above the gross profit declared by the assessee without detecting even a single defect in the books of accounts - HELD THAT:- AO without pointing out any specific defect therein rejected the books of account u/s 145(3) and made the impugned addition by applying the GP rate of 0.24% on the total turnover accounted by the assessee in its books of accounts. We fail to understand the reasoning of AO as at one hand he stated sale/purchase claimed to have been made as bogus then he proceeds to make addition on the basis of GP disclosed by the assessee without any justification and explanation. Such order, on merit as well, fails to meet the test of law and deserves to be quashed. The grounds raised by the assessee are allowed. Appeal of the assessee is allowed.

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• 2025 (1) TMI 760
  Rectification u/s 154 denied - applying a higher tax rate of 30% instead of 25% on the assessee's income, considering the turnover or gross receipts did not exceed Rs. 50 crores in the relevant previous year - HELD THAT:- We are of considered view that there appears to have been an error on the part of assessee to go for rectification proceedings instead of filing a regular first appeal before CIT(A) against the initiation processed u/s. 143(1) of the Act. The technicalities of the law can never become a handicap of assessee and the Revenue is entitle to only raise a demand in regard to income legally assessable under the provisions of Act. The submissions raised before us on merits quiet substantially make out a case of assessee, however, as the assessee has reached us at appellate stage through proceedings initiated by way of erroneous remedy of filing a rectification application and not a regular appeal before the CIT(A), it will be not appropriate to enter in to the merits and give a relief to the assessee, and perpetuate the illegality further. As in Shivganga Drillers Private Ltd. [ 2022 (5) TMI 1427 - ITAT INDORE] has taken into consideration decision in Akbar Mohammad, Nagaur [ 2022 (2) TMI 479 - ITAT JODHPUR] it is a case in point that the assessee did not file any appeal against the intimations passed us 143(1) of the Act and the Ld. Sr. DR is right to the extent that the assessee cannot be given relief for that reason. However, it is also a settled law that the assessee cannot be taxed on an amount on which tax is not legally imposable. Although, the assessee might have chosen a wrong channel for redressal of his grievance, all the same, it is incumbent upon the Tax. Appeal of assessee allowed for statistical purpose only and setting aside the assessment we are restoring the issue on merits for examination and verification of the claim of assessee by the ld. AO

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• 2025 (1) TMI 759
  Income deemed to accrue or arise in India - Appellant has a business connection or a Permanent Establishment (PE) in India u/s 9(1) - whether the assessee a conduit entity? - Appellant is a company incorporated in the United Kingdom - HELD THAT:- We observe that the issue raised by the assessee in this appeal are exactly similar to the facts in the AY 2018-19 and AY 2019-20 [ 2023 (1) TMI 1464 - ITAT DELHI] decided grounds against the assessee by holding that the assessee has business connection and PE in India and 15% of the booking fees should be attributed to the PE in India. Conduit entity determination - As decided in own case [ 2023 (10) TMI 1482 - ITAT DELHI] the status of the assessee as a conduit entity was ever an issue. Therefore, in our considered opinion, the observations of the AO regarding the status of the assessee as a conduit company are not based on any cogent material brought on record, and rather unnecessary and irrelevant for deciding the issue, as to whether, assessee s income is taxable in India or not. Appeal filed by the assessee is allowed.

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• 2025 (1) TMI 758
  Validity of Reassessment proceedings initiated u/s 148 - Difference between the reasons communicated in the notice u/s 148A(b) and the subsequent order u/s 148A(d) - HELD THAT:- We find that undisputedly the notice u/s 148A(b) of the Act has been issued by the AO on the ground that transactions worth ₹ 50,00,000/- with M/s Savitri Ispat India Pvt. Ltd. were made which were alleged to be bogus, therefore, order u/s 148A(d) paased but addition was made of ₹ 9,68,45,467/- in respect of purchases made from non-filing of IT return. The very initiation of proceedings u/s 148A of the Act are itself flawed and full of infirmities and the issue for which the notice was issued were not carried into the order passed u/s 148A(d) of the Act on 31st.03.2022. We note that in order issued u/s 148A(d) AO noted that the assessee has taken accommodation entry for bogus billing and accordingly, the income has escaped assessment. In our opinion, the casualness in issuance of notice u/s 148A(b) of the Act and then passing the order u/s 148A(d) of the Act is apparent from the above. Therefore, re-assessment proceeding is flawed and cannot be stayed. The case of the assessee find force from the decision of Banyan Real Estate Fund Mauritius [ 2024 (8) TMI 371 - DELHI HIGH COURT] wherein similar issue has been decided in favour of the assessee. Thus, we quash the notices issued re-assessment proceedings as well as the consequent order passed. The appeal of the assessee is allowed.

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• 2025 (1) TMI 757
  Disallowance of expenditure towards employees contribution to ESIC/PF u/s 36(1)(va) - Timing of Salary Disbursement and Due Date Determination - HELD THAT:- The issue towards taxability of belated employees contribution to PF/ESIC is no longer res integra in the light of the judgment in the case of Checkmate Services [ 2022 (10) TMI 617 - SUPREME COURT] thus no merit in the case of the assessee for impermissibility of such adjustment u/s 143(1) of the Act. Determination of due date - Month during which the disbursement of salary is actually made would be relevant for the purposes of determination of due date of deposit under the respective statute. The accrual of liability towards payment of salary without actual disbursement would not fasten obligation for deposits of employees contribution in the labour Acts per se. as observed by the co-ordinate bench in Kanoi Paper and Industries Ltd. [ 2001 (5) TMI 139 - ITAT CALCUTTA-E] This aspect has not been found to be examined by the AO or CIT(A). Hence without expressing any opinion on merits on this aspect, we deem it expedient to restore the matter to the file of designated AO. It shall be open to the assessee to place factual matrix before the AO and take such plea for evaluation of the AO. AO shall examine this aspect and fresh order in accordance with law after giving proper opportunity. AO shall thus recompute the amount of disallowance u/s 36(i)(va) if any, on the above basis, in accordance with law. Assessee shall be entitled to appropriate relevant u/s 36(i)(va) where it is found that deposits have been made towards PF/ESIC within the due date from the close of month of actual disbursement of salary/wages - Appeal of the assessee is allowed ex-parte for statistical purposes. Disallowing the business expenses - Assessee was awarded a contract by Whirlpool of India Limited and on the basis of back to back contracts, it has given the sub-contracts to Meliora Services. Assessee has completed the contract with the assistance of Meliora and paid the relevant job work charges after deducting relevant TDS. Assessee also claimed the relevant explanation only in its Profit Loss Account. AO has wrongly noticed that the assessee has given contract to Meliora Services to the extent - AO with the wrong information observed that the assessee has not deducted TDS on the difference amount accordingly proceeded to disallow the same. After considering the facts on record, we observed that the total amount of the contract was which was already declared by the assessee in their books of account as income and offered to tax. Therefore, the addition proposed by the AO is uncalled for.

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• 2025 (1) TMI 756
  Reopening of assessment u/s 147 - Addition u/s 68 - share capital raised during the year unexplained - information recovered during search and post search operation that the assessee has been beneficiary of bogus share capital from three subscribers - HELD THAT:- In the case of Data ware Private Limited [ 2011 (9) TMI 175 - CALCUTTA HIGH COURT ] as held that where the assessee has given PAN No. and other information along with names of creditors, AO should enquire the creditworthiness, genuineness of the transactions and whether such transaction has been accepted by the AO of the Creditor but instead of adopting such course, the AO himself could not enter into the return of the creditor and brand the same as unworthy of credence. Similarly, in Naina Distributors Pvt. Ltd. [ 2023 (6) TMI 1362 - CALCUTTA HIGH COURT ] decided the issue in favour of the assessee by holding that mere non-production of director cannot be the ground for making any addition in the hands of assessee u/s 68. Also see Orissa Corporation Pvt. Ltd. [ 1986 (3) TMI 3 - SUPREME COURT ] and Orchid Industries Ltd. [ 2017 (7) TMI 613 - BOMBAY HIGH COURT ] Validity of re-assessment proceedings - We find that the ld. AO in the reasons recorded referred to the material found during the course of search and based on the search enquiries that the assessee is a beneficiary of bogus share capital. We note that that the ld. AO has not made any enquiry independently and just made the conclusion as to reopening the assessment based on the search enquiries. Therefore, this is the case of borrowed satisfaction by the AO. The case of the find support from the decision of Meenakshi Overseas (P.) Ltd. [ 2017 (5) TMI 1428 - DELHI HIGH COURT ] Accordingly, the re-assessment proceedings as well as assessment order is hereby quashed. Assessee appeal allowed.

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• 2025 (1) TMI 755
  Computation of LTCG - deduction of interest expenditure disallowed to while computing the long-term capital gain on sale of building - CIT(A) has reversed the disallowance and held that such interest cost will form part of the cost of acquisition placing reliance upon the judgment Mithlesh Kumari [ 1973 (2) TMI 11 - DELHI HIGH COURT] - HELD THAT:- Reasons cited by the CIT(A) are sound and is in consonance with the judgment rendered by the Hon ble High Courts as well as the Co-ordinate Bench of Tribunal. We thus see no reason to interfere. Significantly, the Finance Bill, 2023 has proposed certain amendment in this regard from which it appears that as per the existing position of law, some assessee claims deduction towards interest paid on borrowed capital utilized for acquisition of the property u/s 24(b) - The same amount of interest is also being claimed u/s 48 of the Act as part of cost of acquisition. In order to prevent double deduction, the Finance Bill, 2023 has proposed to insert a proviso after clause (ii) of Section 48 so as to provide that cost of acquisition or the cost of improvement shall not include the amount of interest claimed under Section 24 of the Act. The amendment is proposed to take effect from Assessment Year 2024- 25 prospectively. Thus, the proposed amendment in Section 48 to prevent double taxation makes the existing position of law loud and clear. As a corollary, as per the existing position, the assessee is entitled to claim interest on borrowed capital used for acquisition of property as part of its cost of acquisition for the purposes of determination of capital gains. For this reason also, there appears to be no infirmity in the conclusion drawn by the CIT(A). Hence, we decline to interfere. Tribunal made reference to the Amendment carried out in section 48 vide Finance Bill, 2023, which is applicable from A.Y. 2024-25. In this amendment, it has been provided that from A.Y. 2024-25, the interest expenditure will not be admissible to the assessee. The above discussion in the order of ITAT, Delhi passed in [ 2023 (3) TMI 770 - ITAT DELHI] would reveal that the issue in dispute is squarely covered in favour of the assessee.

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• 2025 (1) TMI 754
  LTCG - treatment to relinquishment of rights under compromise as transfer of capital asset - Capital gains are calculated by the AO on the basis of value of land received in lieu of relinquishment of rights in litigation - HELD THAT:- Properties were received in furtherance of the compromise to get quashed the criminal proceedings against Bhushan Shiv Anand Kadam and without assessee paying anything. The AO had examined the dispute by also lifting the corporate veil and giving a finding that the properties acquired by other entities were also in fact received by the assessee only. The AO has considered the value of different properties received by the assessee as income. The AO has taken into account the sale consideration mentioned in the sale deeds as the value of the property earned in lieu of compromise of the cases and release of accused on bail. The show cause notice shows that AO had show caused the assessee to explain, why the value of different properties you received because of compromise deed should not be taxed in your hand as income as per the provisions of Income Tax Act 1961. It seems there was no response to same to satisfaction of AO, so the AO treated relinquishment of rights under compromise as transfer of capital asset. Capital gains are calculated by the AO on the basis of value of land received in lieu of relinquishment of rights in litigation. Nothing was submitted before us, to allege, that on facts and law same is not sustainable. Single line argument of the ld. AR that capital gains have been calculated in spite of the assessee being a purchaser of the immovable property is not factually correct and nor admitted by Revenue. The orders of tax authority cannot be interfered. Decided against assessee.

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• 2025 (1) TMI 753
  Addition in hands of the assessee company - cash payments were made to the farmers and same was seized during search proceedings - CIT(A) deleted addition - HELD THAT:- As there is no evidence that assessee has purchased any asset during the year nor earlier - assessee has acted merely as a commission agent and all the payments relate to Murlidhar Infracon Pvt. Ltd. only. We observed from the conveyance deeds that Murlidhar Infracon Pvt. Ltd. has accepted that they have made payments by mentioning various payments made to farmers prior to its incorporation. It clearly denotes that the directors/shareholders of Murlidhar Infracon Pvt. Ltd. must have made the arrangement to make those payments. There is no record brought on record by the Revenue that these payments were routed through bank accounts maintained by the assessee. Therefore, in absence of any cogent material, we are inclined to agree with the findings of ld. CIT (A). No reason to disturb the finding of the CIT (A) and CIT (A) merely deleted the addition made in the hands of the assessee, however he remitted the issue back to the file of AO to redo the assessment after making proper verification. Therefore, there is no prejudice caused to the Revenue with the findings of ld. CIT (A). Accordingly, the grounds of appeal filed by the revenue are dismissed.

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• 2025 (1) TMI 752
  Disallowance of interest expenditure in respect of assessee s minor son - assessee in her return of income had also accounted for income of her minor son under the provisions of section 64(1A) - HELD THAT:- The income of minor child of assessee is clubbed with the assessee u/s. 64(1A). The minor child has earned interest income which was offered to tax. Purportedly, there was some payment of interest by the minor child as well on loans taken. Assessee in computation of income claimed interest expenditure against the interest income of the minor child. AO and CIT(A) disallowed the claim of interest expenditure as the assessee failed to substantiate that the interest expenditure was related to the loans allegedly taken by the minor child. We observe, that findings of the AO on this issue are cryptic. AO has failed to conduct proper inquiry regarding alleged loans taken by the minor child. CIT(A) has also passed the impugned order on the basis of shallow assessment order. Therefore, we deem it appropriate to restore this issue back to the file of AO for fresh adjudication. Appeal of the assessee is allowed for statistical purpose.

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• Customs

• 2025 (1) TMI 751
  Challenge to revision of a Tariff Rate Quota (TRQ) under the Comprehensive Economic Partnership Agreement (CEPA) between India and UAE - HELD THAT:- This Court, after careful consideration of the contentions, has issued directions vide order dated 05th December, 2024. Accordingly, it is directed that the order dated 05th December, 2024 passed in W.P.(C) 16809/2024 and other connected matters [ 2024 (12) TMI 544 - DELHI HIGH COURT ], shall apply mutatis mutandis in the present case as well. The petition is disposed off.

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• 2025 (1) TMI 750
  Recovery of drawback which has been availed by the petitioner was ordered on the premise that the petitioner had failed to furnish the proof of realization of export proceeds - HELD THAT:- The petitioner is directed to submit their representation along with relevant documents in support of the petitioner's entitlement to the benefit of duty drawbacks within a period of two weeks from the date of receipt of a copy of this order. If such a representation is filed, the same would be considered and orders would be passed in accordance with law after affording the petitioner a reasonable opportunity of hearing. The impugned order is set aside - Petition disposed off.

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• 2025 (1) TMI 749
  Refund of the Special Additional Duty (SAD) paid on imported raw cashew nuts, which were processed into cashew kernels before being sold - denial of refund on the ground that description of the imported goods and sold goods were not tallying - HELD THAT:- On perusal of N/N. 102/2007-Cus, it is observed that there are certain conditions which are required to be satisfied for getting refund. On perusal of these conditions it would indicate that time and again reference has been made to said goods , which in this context would indicate imported goods . The documents required also, interalia, requires them to produce documents evidencing payment of appropriate sales tax or VAT as the case may be by the importer on sale of such imported goods (emphasis supplied). Therefore, notification is exempting all the goods when they are imported for subsequent sale and subject to following various conditions including payment of VAT in respect of said goods. Therefore, if the wordings used in notification are read conjointly, it would be obvious that the notification is applicable only when the imported goods itself is sold and at the time of said sale appropriate sales tax are also paid. Admittedly, the word as such has not been mentioned in the notification, but strict interpretation of this notification having regard to the wordings used would indicate that the exemption is available only when the goods are sold as such and not after certain processing. In AGARWALLA TIMBERS (P) LTD., MITTAL TIMBERS PRODUCTS (P) LTD., VARIETY LUMBERS (P) LTD. AND ASHIRWAD IMPEX (P) LTD. VERSUS CC [ 2013 (11) TMI 1013 - GUJARAT HIGH COURT] , in a given factual matrix, it was held that cutting of log/timber into smaller pieces does not bring into account any new product nor identity of original timber has underwent any fundamental change. They also took into account that as per the Statutory conditions, the importer/transporter cannot carry the logs of length more than 40 feet and therefore having regards to these submissions, a view was taken. These facts are clearly distinguished in the present appeal. A notification has to be interpreted strictly as held in catena of judgments of Hon ble Supreme Court and in fact in the case of COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY ORS. [ 2018 (7) TMI 1826 - SUPREME COURT (LB)] , it was, interalia, observed that in case there is any ambiguity in the notification, the benefit should go to the Revenue. In this case, though the word as such has not been used in Notification No. 102/2007, the reading of the detail notification would collectively indicate that it was only intended for goods sold as such and not after manufacture/process. Conclusion - The appellant is not entitled to a refund of SAD under Notification No. 102/2007-Cus, as the goods sold were not the same as those imported. Appeal dismissed.

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• 2025 (1) TMI 748
  Town seizure - Absolute confiscation of gold seized from the possession of the appellant - levy of penalty - gold of foreign origin and smuggled or not - HELD THAT:- It is found that it is a case of town seizure wherein the purity of gold was found 99.30% to 99.39 % and having no foreign marking thereon and are of irregular shape, size and weight. In that circumstances, can there be a reasonable believe to confiscate that the gold in question or not. The said issue has been dealt by this Tribunal in the case of COMMISSIONER OF CUSTOMS (PREVENTIVE) , KOLKATA VERSUS SHRI BAJRANG INGOLE AND COMMISSIONER OF CUSTOMS (PREVENTIVE) , KOLKATA VERSUS SHRI SACHIN GUPTA (DIRECTOR OF M/S. AKRITI GUPTA JEWELLERS PVT. LTD. [ 2023 (11) TMI 423 - CESTAT KOLKATA] wherein this Tribunal has observed ' It is apparent from the records itself that it is a case of town seizure. The purity of gold is 99.5% and having no embossing of foreign mark, in that circumstances, Revenue has failed to prove reasonable belief that being the gold in question is smuggled one. In the absence of that the impugned gold cannot be seized under section 110 of the Customs Act, 1962 and therefore the gold in question is not liable for confiscation and no penalty is imposable on the appellant.' Admittedly the facts of the case are similar to the case of and Bajrang Ingole. Conclusion - As it is a case of town seizure having no foreign marking on the gold and gold is of different shape, size and weight and purity of 99.30% to 99.39%, in that circumstances, the gold in question cannot be absolutely confiscated. Therefore, the conditions of Section 110 for seizure of gold are not complied with as there is no reasonable believe that the gold in question is of foreign origin. The impugned gold is not liable for confiscation and is to be released to the appellant and no penalty is imposable on the appellant - Appeal allowed.

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• 2025 (1) TMI 747
  Classification of imported product Aluminium Formwork Materials - to be classified under CTH 84806000 or under CTH 76109010? - denial of benefit under S.No.610 of Notification No. 152/2009-CUS dt. 31.12.2009. Classification of imported product Aluminium Formwork Materials (AFM) - HELD THAT:- An AFM which essentially is a shuttering to facilitate efficient and faster casting and therefore cannot ipso facto become mould. At this juncture, it is important to understand the difference between formwork and mould. Basically, a formwork is nothing but a shutter plate/shuttering material, which is temporary structure used to shape and support freshly poured concrete until it hardens and gains sufficient strength to support itself and the formwork can be used in different areas, including building foundations, where it is used to create the shape of foundation walls, footings and piers, walls and partitions, beams and columns, where it is used to shape columns, slabs, where it is used to create flat surface such as floors, roofs and bridge decks - The reliance placed by the Adjudicating Authority that it is customized and cannot be used or moved to other location is also misplaced. It is nobody s case that these formworks remain even after concretes were set in and that they were not removed and kept elsewhere for a similar use at a later date, if required. CTH 7610 covers, inter alia, aluminium structures and by way of example, it includes, inter alia, roofing frameworks. The roofing framework is therefore covered within CTH 7610 and therefore, it is necessary to understand what roofing framework is and how it is different from formwork. Roofing framework refers to structural element that supports a roof and, inter alia, provides structural support and also serves as a base for roofing material. In other words, it would be permanent structure as distinct from aluminium formwork - A complete immovable building structure cannot be called a blank or an article. The illustration also made it clear that mould would create blanks, articles, etc., including cement slabs but not the entire building or structure. In view of the HSN explanatory note, which clearly excludes structures and part of structures, which do not stay in place after construction and specific exclusion (b) which excludes coffering panels intended for pouring concrete having the character of mould from the purview of Chapter 76, came to the conclusion that the product imported by the appellant is rightly classifiable under CTH 8480. Admittedly, apart from this evidence, there is no other evidence like expert opinion or comparable imports, etc., to support the claim of the department that the goods are more in the nature of mould and not otherwise. On the other hand, CTH 7610 covers, inter alia, all kinds of aluminium structure except for the exclusion provided, i.e., mould falling under Chapter 84. Therefore, even if there is a mould made out of 100% aluminium also, it would be not classifiable under CTH 7610 and it will be falling under Chapter 84. However, when the product itself is not a mould then the exclusion will not be applicable. The same heading also includes aluminium plates, rods, profiles, tubes and the like, prepared for use in structures. Therefore, if there is any ambiguity in a taxation provision, it is to be interpreted in favour of the subject/ assessee. However, when a tax exemption has to be interpreted, the benefit of doubt should go in favour of the Revenue. Thus, as the issue is not that of exemption and more of classification leading to demand of duty, this judgment would not help the cause of the department. In fact, going by the ratio, we find that since in this case, there could be grey area regarding coverage under Chapter 76, vis- -vis Chapter 84 due to various interpretations not emanating from the heading itself, the benefit of doubt should be given to the appellant and not to the Revenue. Denial of benefit of Notification - HELD THAT:- This is a notification provided for concessional duty in respect of imports made from Republic of Korea. In the SCN or in the OIO, there is no specific discussion as to why this notification has been denied, whether it was on account of import not being considered as import from Korea or it was on account of the fact that it was not covered under S.No.610 of the notification. Therefore, in the absence of these details, the appellants were not given adequate opportunity to defend the eligibility for said notification and therefore, this denial is also not tenable. Conclusion - The product AFM imported by the appellant is rightly classifiable under CTH 76109090 and not under CTH 84806000, as confirmed by the Adjudicating Authority. Moreover, since there is no dispute as regards origin of the goods, therefore, once the goods are falling under CTH 7610, the same would be entitled for exemption notification 152/2009 dt. 31.12.2009 at S.No.610. Appeal allowed.

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• 2025 (1) TMI 746
  Enhancement of penalty - failure to submit the required documents within the stipulated time period - contravention of the Customs (Provisional Duty Assessment) Regulations, 2011 - HELD THAT:- The appellant could not submit some of the documents required for finalisation of the provisional assessment because of the various appeals pending before the Tribunals and High Courts on the same issue. Thus, the appellant cannot be faulted for the delay in submission of the documents. The ld. adjudicating authority has considered the issue and imposed a penalty of Rs.15,000/- for the violations, if any, committed by the appellant. It is observed that this penalty is sufficient for the procedural violations committed by the appellant. Similar view has been taken by this tribunal and a lesser penalty has been confirmed on such procedural violations - In the case of M/S ESSAR OIL LIMITED VERSUS COMMISSIONER OF CUSTOMS [ 2015 (5) TMI 942 - CESTAT AHMEDABAD] , it was held by the Tribunal that when there is some delay in furnishing the documents and there is no revenue implication, penalty is not called for. The penalty of Rs.15,000/- imposed by the Ld. Assistant Commissioner would be sufficient to meet the ends of justice. The Ld. Commissioner (Appeals) has not given adequate reason for enhancing the penalty from Rs.15,000/- to Rs.10,00,000/- in respect of each of the 20 Bills of Entry, for the delay in submission of the documents. Conclusion - Procedural lapses without revenue loss or mala fide intent should not attract severe penalties. The enhanced penalty of Rs. 10,00,000/- imposed by the Commissioner (Appeals) set aside and the original penalty of Rs. 15,000/- restored concluding that it was adequate for the procedural violation. The enhanced penalty set aside - appeal allowed.

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• 2025 (1) TMI 745
  Seeking rectification of mistake - typographical error - Error apparent on the face of record - identity of the shipper and beneficial owner - recomputation of Anti Dumping Duty (ADD) liability - HELD THAT:- The rectification of typographical errors in the final order correcting the identities of the shipper and beneficial owner is ordered. The request for recomputation of ADD was denied as it was beyond the scope of rectification. Application allowed in part.

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• 2025 (1) TMI 744
  Eligibility to claim the benefit of reduced duty of 10% vide Sl. No. 22 of N/N. 57/2017-Customs, dated 30-6-2017 in respect of populated printed circuit boards (PCBs) imported for the manufacture of telecommunication equipment, specifically GPON ONTs/OLTs - HELD THAT:- The product intended to be imported by the Applicants is not a finished product but a part of the finished product GPON ONT/OLT device. From the assembling process illustrated in the pictures provided in Annexure-2 of the reply letter dated 4-4-2024 it can be seen that this process includes putting the accessories to the PCBA (configuring/Connecting and checking all the cables) adding CMOS battery, adding PON modules and testing thereof and adding the software before it is finally packed. The configuration, testing and addition of software apparently play a crucial role in giving character GPON ONT/OLT device. Hence it appears that the department contention that the subject import goods is not parts but is a complete goods does not appears sound and tenable. It is clear from above that under CTI 85176290 the products sought to be covered are to be finished products and not parts. In the instant case the applicant proposes to import the Populated Printed Circuit Board for the manufacturing of Telecommunication equipment and more specifically for the purpose of manufacturing of GPON ONTs/OLTs which is aptly covered under Combination of one or more of Packet Optical Transport Product or Switch (POTP or POTS) . The decision of the Tribunal in the case of Commissioner of Customs, Mumbai (Air Cargo Import) v. Reliance Jio Infocomm Ltd. [ 2022 (6) TMI 1051 - CESTAT MUMBAI] , deals with classification of cards i.e., Populated Printed Circuit Boards (PCBs) incorporated in photonic service switch. Thus, the imported goods in the present case interface cards being functionally similar, the decision of the Coordinate Bench of the Tribunal, which has been upheld by the Hon ble Supreme Court in Civil Appeal No. 000586-000598/2023 arising out of Diary No. 31965/2022 [ 2023 (1) TMI 1297 - SC ORDER ], by holding that they do not think it is appropriate to interfere in the impugned order, is relevant to the present case. Thus, the subject goods for the manufacturing of Telecommunication equipment and more specifically for the purpose of manufacturing of GPON ONTs/OLTs are covered under Sr. No. 22 of Notification No. 57/2017-Cus., dated 30-6-2017 as amended. Conclusion - The applicant is eligible to claim the benefit of reduced duty of 10% vide Sl. No. 22 of Notification No. 57/2017-Customs, dated 30-6-2017 in respect of Populated Printed Circuit Boards, for the manufacture of telecommunication equipment and more specifically for the purpose of manufacturing of GPON ONTs/OLTs.

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• Insolvency & Bankruptcy

• 2025 (1) TMI 743
  Maintainability of the counter claim in the proceedings of the CIRP - where the controversy pertains to raising of a counter claim by the Appellant, against the Corporate Debtor, whether the relief would at all be tenable to be pressed in before the Tribunal and that too, by invoking the provisions contained under Section 60(5) of the I B Code, 2016, which being a residuary clause, is to be used for the aspects and fields not covered by I B Code, 2016? - HELD THAT:- Within the time bound process, all such proceedings lying outside the purview of Resolution Plan, may not be permitted to be agitated by invoking Sub Section (5) of Section 60 of the I B Code, 2016, so as to delay the proceedings, and to widen the scope of Section 60(5) to its disproportionate implication and application, so as to distort the application and object of I B Code, 2016. The learned Adjudicating Authority, while considering the claim as it was raised by the Appellant, in the Application preferred being IA No. 545 / 2024, has also considered the Judgment rendered by the Hon ble Apex Court in the matters of Adani Power Limited V. Shapoorji Pallonji Co. Pvt. Ltd. Ors. [ 2023 (3) TMI 1555 - SC ORDER] wherein, the Hon ble Apex Court has observed that in the statute or the precedence of the Hon ble Apex Court or the NCLAT, there is no ambiguity as such, which reflects that once the plan is approved it is binding and it cannot be made a subject matter to be considered, analysed or interpreted before the Arbitration or for that matter before any proceedings and thus, it has opined that the claim even if allowed in favour of Shapoorji Pallonji Co. Pvt. Ltd., will have no bearing on the right and obligations of the Appellant, as against the Corporate Debtor, who would be bound by its own terms of contract with the Corporate Debtor, owing to the fact that the Appellant cannot be saddled with a new liability except which is mentioned in the Resolution Plan. In the absence of there being any challenge given with regards to the effect of non-admission of the claim of the present Appellant by the Resolution Professional, the reliefs was sought for in IA No. 545 / 2024 in the shape of seeking a necessary directions to clarify that the Appellant s claim not be extinguished upon the approval of Resolution Plan, would be barred by the Judgment of Adani Power Limited [ 2023 (3) TMI 1555 - SC ORDER] as relied by the learned Adjudicating Authority, because the same cannot be permitted to be widen the scope of the claim by consideration of the counter claim particularly, when the denial of acceptance of the claim on 11.03.2024, has attained finality, having not been questioned, before any Appropriate Forum. The Application thus preferred does not meet out the objective of the I B Code, 2016, where finalization of the claims against the Corporate Debtor are required to be done in a Time-bound manner in order to take steps, for restructuring of the Corporate Debtor. Since, the same was being infringed by the nature of the relief sought for, the same would not be sustainable and the restrictions which was imposed by the Judgment of Adani Power Ltd. V. Shapoorji Pallonji Co. Pvt. Ltd. Ors, would be attracted, to make the Interlocutory Application preferred by the Appellant as to be not maintainable. Conclusion - i) Claims not included in the Resolution Plan are extinguished. ii) The counterclaim is not maintainable within CIRP. iii) Section 60(5) cannot be used to challenge the extinguishment of claims post-approval of the Resolution Plan. Appeal dismissed.

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• FEMA

• 2025 (1) TMI 742
  Offence u/s 8(1) and 8(2) of FERA - dealing in foreign exchange without the necessary permissions from the Reserve Bank of India (RBI) - recovery of the currency - appellant's penalized by imposing heavy penalty of Rs. 80 lakhs though the worth of the foreign currency as on the date of the recovery was not more than 8 lakhs - as argued foreign currency said to have been recovered from their sister's house HELD THAT:- We find no such argument by the appellant before the Special Director, Enforcement rather in the statements made by the appellants, they literally admitted possession of the foreign currency. It was later on qualified to be at the instance of Sudhakar Verma. The careful reading of their statement would however reveal that the foreign currency was recovered from the house in the name of Mrs. Madhu who is none else but the wife of appellant Ashok Kumar. The appellant Manoj Kumar in his statement admitted that seized foreign currency was purchased by them 6 to 7 days prior to the seizure from a person who deals in it. The other appellant Ashok Kumar also admitted that the foreign currency was seized from his own premises, but refused to make further statement. Special Director found violation of section 8(1)and 8 (2) by the appellants and accordingly imposed penalty of Rs. 80 lakhs on each appellant under section 50 of the FERA, 1973. If we go further deep into the matter, the documents seized from the appellants shows their involvement in the sale and purchase of the foreign currency without special or general permission of the RBI. No error in the impugned order for recording contravention of section 8 (1) and 8 (2) of the Act of 1973 at the instance of the appellants. Whether penalty imposed on each appellant said to be excessive? - As we find penalty of Rs. 80 lakhs to be excessive. It is even after taking into consideration the documents recovered from the appellant showing their involvement in dealing with the foreign currency without prior or special permission of the Reserve Bank of India. We are inclined to reduce the amount of penalty from 80 lacs to 8 lakhs on each appellant to rationalize the quantum of penalty.

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• PMLA

• 2025 (1) TMI 741
  Money Laundering - proceeds of crime - Legality of petitioner's arrest - illegal mining - It was held by High Court that 'The petitioner has not been found involved in any illegal activity, in any manner whatsoever, attracting the offence of money laundering under PMLA. There is no option, except to allow the petition. HELD THAT:- It is not required to interfere with the finding of the High Court that the arrest of the respondent was illegal. The findings which are rendered by the High Court are only for the purposes of deciding the issue whether the arrest of the respondent was illegal. These findings will not effect the merits of the pending complaint under Section 44 of the Prevention of Money Laundering Act (PMLA), 2002. SLP dismissed.

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• 2025 (1) TMI 740
  Jurisdiction to attach properties of a Corporate Debtor undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC) - Section 32A of the IBC - HELD THAT:- The Appellant-E.D. is directed to handover and the Respondent successful Resolution Applicant JSW is directed to take over the control of the properties of Corporate Debtor-Bhushan Power and Steel Ltd., provisionally attached vide the order dated 10.10.2019 passed by the E.D., immediately in view of Section 8(8) of the PMLA read with Rule 3A of the said Rules. Appeal disposed off.

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• 2025 (1) TMI 739
  Money Laundering - respondent-accused is already convicted by the concerned Court and an appeal against the same is pending before the High Court - HELD THAT:- The High Court has committed an error in quashing the ECIR proceedings initiated by the petitioner(s) under the PMLA Act, on the ground that the respondentaccused was acquitted in the predicate cases ignoring the fact that the respondent-accused was already convicted by the concerned Court in Special C.C. No. 188 of 2013 vide the order dated 29.07.2019. The matter deserves consideration. Hence, leave granted.

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• 2025 (1) TMI 738
  Money Laundering - interrogation process - whether after the filing of the complaint, the accused can be called for interrogation or not for the purpose of recording their statement under Section 50 of the Prevention of Money Laundering Act, 2002? - HELD THAT:- The High Court, in the impugned judgment, did not take into consideration the explanation (ii) to Section 44 (1) of the PMLA, wherein it is specifically provided that such a course is well open to the investigating agency. In such view of the clear provision contained in Section 44, as afore-stated, the impugned judgment is set aside. Appeal disposed off.

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• 2025 (1) TMI 737
  Simultaneous trial for offences under the Prevention of Money Laundering Act (PMLA) and the predicate offence - right to fair trial - contention of the petitioner is that the right to fair trial to an accused is a basic right, which needs to be protected - HELD THAT:- Since, the nature of money laundering offence is distinguishable and unconnected with the nature of offences under the IPC (presently BNS), one is not dependant on the other and that being the position, there is no impediment for the Special Court to continue the trial under PMLA even during the pendency of the trial under predicate offence. The present petition has been instituted under Section 482 of Cr.PC for a direction to the Special Court to conduct simultaneous trial. When the procedures contemplated under the PMLA for trial are distinct and different, question of conducting simultaneous or joint trial would not arise at all. That apart, the accused in a PMLA offence cannot be allowed to make any attempt to stall the trial on economic offences, since the procedures contemplated are independent. Thus it is not inclined to consider the present petition. Conclusion - The PMLA is a standalone process, and its trial is independent of the predicate offence. Simultaneous trials are not mandatory and are at the discretion of the prosecuting authority. The criminal original petition is dismissed.

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• Service Tax

• 2025 (1) TMI 736
  Entitlement for benefit of the Service Tax Voluntary Compliance Encouragement Scheme (VCES) - payment of the principal tax dues after the cut-off date of 1st March, 2013 done - Rejection of assessee s declaration filed under the scheme on 23rd July, 2013, by a communication dated 25th July, 2014 on the ground that certain sums of money were deposited by the assessee prior to coming into force of the scheme - HELD THAT:- The communication dated 25th July, 2014 cannot be construed to be an order in the strict sense for an appeal to be preferred. That apart, the CBEC by Circular dated 8th August 2013 issued certain clarifications with regard to the implementation of the scheme and it has been clarified that the scheme does not have a statutory provision for filing of an appeal against the order for rejection of declaration under Section 106 (2) by the designated authority. The cut-off date under the scheme which is sacrosanct and cannot be ignored by the department - the cut-off date fixed under the scheme is the very crucial factor and this aspect was noted in the case of Sadguru Construction [ 2014 (5) TMI 219 - GUJARAT HIGH COURT ] and it was held that if the intention of the legislature was to exclude any tax deposited before framing of the scheme, the same could have been provided in plain language. On the contrary, the legislature excluded from the purview of declaration only those taxes which were already paid by 1st March, 2013 and, therefore, the period between the 1st March, 2013 and 10th May, 2013 would, by necessary implication of the provision of the scheme, be covered for declaration under the scheme itself. Conclusion - Payments made after the cut-off date but before the scheme's introduction are eligible under VCES. The assessee is entitled to the benefit under scheme and the declaration of the assessee should be accordingly processed. The rejection of the VCES declaration is not an appealable order. Appeal allowed.

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• 2025 (1) TMI 735
  Exemption from service tax - dropping of demand on the ground that the construction services provided to M/s PGCIL and to MCD both are the constructions meant for the commercial activity having commerce/profit element - Levy of service tax - hire charges on account of giving DG sets, motor graders, hydraulic, excavator etc. - charges received for constructing parking for MCD - site preparation services - New Grounds of appeal. Exemption from service tax - dropping of demand on the ground that the construction services provided to M/s PGCIL and to MCD both are the constructions meant for the commercial activity having commerce/profit element - HELD THAT:- The demand is alleged to have wrongly been dropped with respect to M/s PGCIL. The activity is not for construction of infrastructure for electricity transmission lines but is actually a site preparation services. It is observed that in none of the show cause notices the respondent assessee is alleged to have rendered site preparation services to either to M/s PGCIL or to MCD or any other of its clients including M/s VSK Infrastructure. Thus, this ground of appeal raised by the department is beyond show cause notice hence cannot be dealt with at this stage of appeal. In the present case, respondent has provided services to M/s PGCIL a public sector undertaking which admittedly is engaged in setting up of transmission lines for transmission of electricity and the respondent has provided the infrastructure for the same. Any service provided in relation to transmission of electricity stands exempted from whole of the service tax liability in terms of Notification No. 11/2010-ST dated 27.02.2010. This notification has been relied upon by the original adjudicating authority while dropping the demand vis- -vis the demand of service tax vis- -vis projects executed for M/s PGCIL. There is no evidence produced by the department to prove that the service provided by appellant is not for electricity transmission infrastructure. Hence, there are no infirmity in the order to that extent. Levy of service tax - hire charges on account of giving DG sets, motor graders, hydraulic, excavator etc. - HELD THAT:- Giving goods on Hire with effective control and possession thereof thus stands ousted from the scope of service tax leviability. Since there is no evidence produced by the department on record showing that right to possession and effective control of the equipments given on hire was retained by the respondent assessee, there are no infirmity in the order under challenge where the demand on hire charges has been dropped. Levy of service tax - charges received for constructing parking for MCD - HELD THAT:- The services provided by the respondent are not the services provided to the governmental authority (MCD) but it was provided to a private company viz. M/s VSK Infrastructure Ltd. Otherwise, also the parking for MCD being a paid parking and as such the construction thereof was meant for making profit/revenue generation for the MCD. These facts are sufficient for us to hold that the mega exemption No. 25/2012-ST dated 20th Jun 2012 Entry No. 12(a) which exempts the activity in relation to construction provided to the Government or governmental authorities from service tax levy is not applicable to the respondent assessee - the MCD parkings are for generating Revenue hence construction thereof is the construction for a building meant for commerce. Resultantly, irrespective the MCD is a governmental authority meant to carry out the functions entrusted in Article 243(w) of Constitution of India but the parking being meant as a commercial project of MCD - the original adjudicating authority has wrongly relied upon the said notification while dropping the demand for the construction services being provided by the respondent to M/s VSK Infrastructure Ltd,/MCD. The impugned order in original is, therefore, set aside to this extent. Levy of service tax - site preparation services - New Grounds of appeal - HELD THAT:- The original show cause notice did not allege site preparation services - the department could not introduce new grounds at the appeal stage. Conclusion - i) The respondent provided services to PGCIL for electricity transmission, which is exempt from service tax. ii) The demand for service tax on hire charges was correctly dropped. iii) The demand for service tax on construction services for MCD was reinstated. iv) The department could not introduce new grounds at the appeal stage. Appeal allowed in part.

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• 2025 (1) TMI 734
  Levy of service tax - Business Auxiliary Services - activity of distributing and selling SIM Cards and Air Time Scratch Cards by the appellant - HELD THAT:- The issue is no more res integra and has been decided in favour of the assessees in a number of judgments. This Bench in the case of Jalandhar Sales vs. Commissioner of CE ST, Ludhiana [ 2024 (5) TMI 561 - CESTAT CHANDIGARH ] has held that ' the tribunal has held that the activity of purchase and sale of SIM card belonging to BSNL where BSNL discharged the service tax on the full value of the SIM cards, does not amount to providing business auxiliary services and confirmation of demand on the distributor for the second time is not called as per Section 65(19) and 65(105) (zzb) of Finance Act, 1994.' Conclusion - Appellant are not liable for service tax for the sale of SIM cards. Appeal allowed.

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• Central Excise

• 2025 (1) TMI 733
  Debonding from an Export Oriented Unit (EOU) scheme - insistence by the respondent authorities on payment of excise duty in cash, instead of utilizing Cenvat credit - whether the petitioners can be permitted to pay an amount equal to the excise duty leviable on the goods lying with the petitioners at the manufacturing plant proposed to be debonded, from the Cenvat credit account of the company? - HELD THAT:- Partial debonding of an unit from the existing EOU is permissible under EOU Scheme, inasmuch as, there is no bar to such debonding, that has been brought to the notice of this Court. In case of Eicher Motors Ltd. [ 1999 (1) TMI 34 - SUPREME COURT ], it has been held by the Hon ble Supreme Court that ' a right accrued to the assessee on the date when they paid the tax on the raw materials or the inputs and that right would continue until the facility available thereto gets worked out or until those goods existed. Therefore, it becomes clear that Section 37 of the Act does not enable the authorities concerned to make a rule which is impugned herein and, therefore, we may have no hesitation to hold that the Rule cannot be applied to the goods manufactured prior to 16-3-1995 on which duty had been paid and credit facility thereto has been availed of for the purpose of manufacture of further goods.' Rule 3(4) of the Cenvat Credit Rules was an enabling provision for utilization of Cenvat credit. This Court has held in CCE Vs. Shilpa Copper Wire Industries [ 2010 (2) TMI 711 - GUJARAT HIGH COURT ] that there is no difference between 100% export oriented unit and a normal DTA Unit as regards the Cenvat scheme. In view of the provision of Section 142 (6) (a) of GST Act, also the petitioners will not be liable to pay the amount of excise duty in cash and would be entitled for refund of the outstanding credit in cash as per the aforesaid provisions. It will be seen on plain reading of section that any amount of credit found to be admissible to the claimant shall be refunded to him in cash . Therefore, there can be no arguments to the contrary that the legitimately availed Cenvat credit could not be used for the payment of duties and therefore, the demand of the respondents to pay the excise duty on goods that would be manufactured in the concerned manufacturer plant of the petitioner -company after debonding has to be rejected outright. Conclusion - The petitioners have made out a strong prima facie case, inasmuch as, when similarly situated assessees have been permitted to pay the excise duty foregone from the Cenvat credit account, there is no reason as to why the petitioners should be denied such benefit. In view of the interim order dated 30.10.2015, since the No Due Certificate has been issued to the petitioners for debonding out of 100% EOU scheme upon the petitioners having been permitted to pay the excise duty forgone from the legally availed Cenvat credit account, this petition succeeds.

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• 2025 (1) TMI 732
  CENVAT Credit availed by the petitioners under N/N. 29/2004-CE - petitioners simultaneously operated under N/N. 30/2004-CE - lapsing of credit availed under N/N. 29/2004 - rejection of rebate claim - HELD THAT:- A conjoint interpretation of the provisions of law makes it clear that Rule 11 (3) (ii) of the Cenvat Credit Rules, 2004 is attracted only if there is an absolute exemption Notification No. 30/2004 is clearly a conditional exemptional notification and thus, a harmonious reading of the aforesaid provision and Notification No. 30/2004 will make it clear that the said Notification No. 30/2004 does not attract the provisions of Rule 11 (3) (ii) Cenvat Credit Rules, 2004. The respondents authorities have placed unnecessary reliance on Rule 11 (3) (ii) of Cenvat Credit Rule, 2004 which was introduced vide Notification No. 10/2007 dated 1.3.2007 which could be said to be applicable only in cases of absolute exemption granted by a Notification under Section 5A of the Central Excise Act, 1944. The said Rule 11 (3) (ii)) can not be said to be applicable to Notification Nos. 29/2004-CE and 30/2004-CE. This is clear from the plain use of the words exempted absolutely in the said sub-rule. The accumulated credit was due to the fact that the petitioners had cleared their final product by paying central excise duty @ 8% and had simultaneously availed Cenvat credit on the raw materials used as inputs @ 16% under Notification No. 29/2004 . For the first time, as on 8.3.2006, the petitioners had reversed the Cenvat credit involved in the closing stock of inputs, finish product and yarn westage and balance amount of Cenvat credit was carrried forward. Thus, the petitioners had rightly carried forward its Cenvat credit balance. Further, since Rule 11 (3)(ii) of Cenvat Credit Rules, 2004 was introduced vide Notification No. 10/2007 dated 1.3.2007, and Notification No. 30/2004 does not provide that unutilized credit is prohibited from being carried forward, there could be no question of lapse of credit lying as balance in the Cenvat credit account of the petitioners in the month of April, 2007. Conclusion - CENVAT credit, once validly availed, does not lapse unless explicitly provided by law. Appellant are entitled to the rebate claims with interest. The impugned order dated 14.12.2020 passed by the respondent No. 4 is hereby quashed and set aside. Consequently the respondents are directed to sanction and pay the rebate claims @ 12% per annum from 10.7.2013 (date of filing the rebate claims) till the date of actual payment - Petition allowed.

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• 2025 (1) TMI 731
  Valuation of Central Excise Duty - inclusion of notional cost of drawings and designs supplied free of cost by Maruti to the vendors in the assessable value - HELD THAT:- It is pertinent to reproduce the findings of Division Bench of CESTAT Delhi in Denso India Private Limited [ 2024 (3) TMI 686 - CESTAT NEW DELHI ] wherein, the Tribunal after considering the provisions relating to valuation of goods as provided under Section 4 of Central Excise Act and also the Central Excise Valuation Rules, 2002 and few judgments of various courts on this issue has held that ' the notional cost of drawings and designs supplied free of cost by Maruti to the vendors cannot be included in the assessable value of the parts and components manufactured by vendors and cleared to Maruti for the purpose of payment of central excise duty.' The impugned orders are not sustainable in law - Appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (1) TMI 730
  Reversal of Input Tax Credit on lubricant - jurisdiction to travel beyond the specific order of remand by the appellate authority - Rule 21(11) of UP VAT Rules - HELD THAT:- On perusal of the order passed by the appellate authority in first round of litigation as well as the judgement of the Full Bench of this Court in M/s Ram Dayal Harbilas [ 1979 (2) TMI 176 - ALLAHABAD HIGH COURT] , it is clear that the remand order for passing afresh order in accordance with law is an open remand order. The case in hand shows that the matter was not remanded by the first appellate authority with a specific direction as noted above and therefore, the order passed after remand by the assessing authority as well as the Tribunal cannot be said to be unjustified. The record further shows that once the lubricant became taxable item at the hand of the manufacturer and importer and for the trader it become non VATable goods, and once the item is declared as non VAT goods in the hand of the trader as revisionist is also a trader, the judgements cited by the learned Senior Counsel for the revisionist in M/s Mercury Laboratories Pvt. Ltd. [ 1999 (12) TMI 829 - ALLAHABAD HIGH COURT LARGER BENCH] , M/s Goodage Rubber Works [ 2003 (4) TMI 531 - ALLAHABAD HIGH COURT] and Indra Industries [ 2000 (1) TMI 44 - SUPREME COURT] that the circular will influence the same, will be of no help to the revisionist. Further, the record shows that the revisionist, in its wisdom, has not challenged the validity of the circular dated 17.01.2014 before any competent court. Under the revisional jurisdiction, the validity of the circular cannot be tested. Conclusion - The court established that an open remand order allows for a fresh determination of issues without specific restrictions, and the classification of goods impacts their VAT status and ITC claims. Revision dismissed.

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• Indian Laws

• 2025 (1) TMI 729
  Dishonour of Cheque - challenge to conviction and sentence - compromise reached between the parties - invocation of inherent powers of the High Court to compound the offence under Section 138 of the Negotiable Instruments Act at the revisional stage - HELD THAT:- It is well settled that inherent power of the Court can be exercised only when no other remedy is available to the litigants and nor a specific remedy as provided by the statute. It is also well settled that if an effective, alternative remedy is available, the High Court will not exercise its inherent power, especially when the Revision Petitioner may not have availed of that remedy - This Court can always take note of any miscarriage of justice and prevent the same by exercising its power. These powers are neither limited, nor curtailed by any other provision of the Code or Act. However, such inherent powers are to be exercised sparingly and with caution. In the instant case, it is true that the appeal was dismissed and the conviction and sentence was upheld by the appellate court, but it cannot be lost sight of the fact that this Court has power to intervene in exercise of its power only with a view to do the substantial justice or to avoid a miscarriage and the spirit of compromise arrived at between the parties. This is perfectly justified and legal too. In the instant case, the Revision Petitioner is invoking the inherent power of this court after dismissal of the appeal confirming his conviction and sentence - In the case of Krishan Vs. Krishnaveni [ 1997 (1) TMI 529 - SUPREME COURT] , Hon'ble the Apex Court has held that though the inherent power of the High Court is very wide, yet the same must be exercised sparingly and cautiously particularly in a case where the applicant is shown to have already invoked the revisional jurisdiction under section 397 of the Code. Only in cases where the High Court finds that there has been failure of justice or misuse of judicial mechanism or procedure, sentence or order was not correct, the High Court may in its discretion prevent the abuse of process or miscarriage of justice by exercising its power. Section 147 of NI Act begins with a non obstante clause and such clause is being used in a provision to communicate that the provision shall prevail despite anything to the contrary in any other or different legal provisions. So, in light of the compass provided, a dispute in the nature of complaint under section 138 of N.I. Act, can be settled by way of compromise irrespective of any other legislation including Cr.P.C. In general and section 320 (1)(2) or (6) of the Cr.P.C. in particular - Merely because the litigation has reached to a revisional stage or that even beyond that stage, the nature and character of the offence would not change automatically and it would be wrong to hold that at revisional stage, the nature of offence punishable under Section 138 of the N.I. Act should be treated as if the same is falling under table-II of Section 320 IPC. The court is inclined to hold accordingly only because there is no formal embargo in section 147 of the N.I. Act. This principle would not help any convict in any other law where other applicable independent provisions are existing as the offence punishable under section 138 of the N.I. Act is distinctly different from the normal offences made punishable under Chapter XVII of IPC (i.e. the offences qua property). Conclusion - The conviction and sentence under Section 138 of the Negotiable Instruments Act could be annulled based on the compromise reached between the parties. The inherent powers of the court were appropriately invoked to secure the ends of justice. The conviction and sentence under section 138 of the Negotiable Instruments Act in C.C.No.366 of 2013 stands annulled as this Court intends, otherwise to secure the ends of justice - the present Criminal Revision Case is disposed of.

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