TMI Tax Updates - e-Newsletter
January 3, 2025

Case Laws in this Newsletter:

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

Articles

1. GST Relief to Hotels and Restaurants: Analysis of 55th GST Council’s decision

   By: Vivek Jalan

2. COMPLAINT AGAINST GOVERNMENT OFFICIALS UNDER PREVENTION OF MONEY LAUNDERING ACT, 2002

   By: DR.MARIAPPAN GOVINDARAJAN

3. Marketing support services by Indian Company to its Foreign Head Quarters qualify as ‘Export’

   By: Bimal jain

4. Analysis of 55th GST Council’s decision for Amendments in CGST Act, 2017 and CGST Rules, 2017 in respect of functionality of Invoice Management System (IMS)

   By: Vivek Jalan

News

1. Punjab's revenue collection from VAT, CST, GST crosses Rs 30,000 crore in Apr-Dec: Cheema

2. GST kitty rises 7.3 pc to Rs 1.77 lakh cr in Dec

3. China-Maldives Free Trade Agreement takes effect from Jan 1

4. Commencement of Surveys from the month of January 2025

5. Constitution of Working Group for the revision of the current series of Wholesale Price Index (Base 2011-12)

6. Empowering India's Economy

7. CBI Court sentences two accused including then Assistant Commissioner of Central Excise & Customs (retired IRS officer) and his wife to 03 years’ Imprisonment with total fine of Rs 2 lakh in a Disproportionate Assets case.

Notifications

DGFT

1. 47/2024-2025 - dated 2-1-2025 - FTP

Amendment in Foreign Trade Policy 2023 to include Para 1.07A and 1.07B for consultation with stakeholders to seek views, suggestions, comments or feedback from relevant stakeholders, including importers/exporters/industry experts concerning the formulation or amendment of the Foreign Trade Policy

GST - States

2. G.O.Ms.No. 139 - dated 30-12-2024 - Telangana SGST

Notifies the special procedure for rectification of for Input Tax Credit Orders issued under Section 73, 74, 107, 108 which confirming demand for wrong availment of input tax credit.

3. G.O.Ms.No. 138 - dated 30-12-2024 - Telangana SGST

Supersede notification G.O. Ms No.55, Revenue (CT.II) Department, Dt.16.07.2021

4. G.O.Ms.No. 137 - dated 30-12-2024 - Telangana SGST

Amendment in Notification G.O.Ms No. 210, Revenue (CT-II) Department, Dt. 29.09.2018

5. G.O.Ms.No. 136 - dated 30-12-2024 - Telangana SGST

To waive the requirement of mandatory registration under section 24(ix) of Telangana Goods and Services Tax Act for person supplying goods through Electronic Commerce Operators, subject to certain conditions

Circulars / Instructions / Orders

Customs

1. 01/2025 - dated 1-1-2025

Roll out of Automated Out of Charge for AEO T2 and T3 Clients

2. PUBLIC NOTICE No. 20/2024 - dated 21-12-2024

Streamlining the process and expediting assessment in FAG – Classification of LED Chips-Reg

3. Public Notice. 104 / 2024 - dated 3-12-2024

Procedure to issue EDI Port Clearance/Advance Port Clearance – reg.

Highlights / Catch Notes

GST

• Voucher trading not taxable under GST, but commission for agents & ancillary services like marketing are taxable; Unredeemed vouchers exempt.

  Circulars : CBIC clarified that transactions in vouchers, whether recognized as pre-paid instruments by RBI or not, are neither supply of goods nor services. Trading of vouchers on principal-to-principal basis is not leviable to GST. However, commission/fee earned by agents for distribution is taxable service. Additional services like advertising, marketing etc. provided to voucher issuer are taxable supplies. Unredeemed vouchers (breakage) are not taxable as there is no underlying supply.
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• Online suppliers & e-commerce operators must collect state details from unregistered buyers for tax invoice.

  Circulars : The CBIC clarified that for online services supplied by suppliers or through e-commerce operators to unregistered recipients, irrespective of the supply value, the tax invoice must mandatorily mention the recipient's state name. This state name shall be deemed the recipient's address on record for determining the place of supply u/s 12(2)(b)(i) of IGST Act as the recipient's location. Suppliers must devise mechanisms to collect state details from unregistered recipients before supply. Non-compliance may attract penal action u/s 122(3)(e) of CGST Act.
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• Registered recipient gets ITC when supplier delivers goods to transporter under ex-works contract, not actual receipt.

  Circulars : As per clause (b) of sub-section (2) of section 16 of CGST Act, 2017, a registered person is deemed to have "received" goods when the supplier delivers them to a transporter at supplier's premises under Ex-Works contract, even though physical receipt may occur later at recipient's premises. ITC is available to recipient at time of such delivery by supplier to transporter, subject to conditions u/ss 16 and 17.
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• Clarification on Tax Liability and Input Tax Credit for E-Commerce Operators under GST.

  Circulars : Electronic commerce operators (ECOs) required to pay tax u/s 9(5) of CGST Act for specified services supplied through their platform are not required to reverse proportionate input tax credit on inputs and input services utilized for such supplies u/s 9(5). However, ECOs cannot utilize the input tax credit for discharging tax liability u/s 9(5) which must be paid in cash through electronic cash ledger. The input tax credit can only be utilized for discharging tax liability on ECO's own services.
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• Petitioner's Bank Account Freeze by Authorities Quashed Due to Procedural Irregularities, Time Limit Extended.

  Case-Laws - HC : The HC allowed the writ petition, quashed the appellate order, finding merit in the petitioner's case due to procedural irregularities and arbitrary actions by respondent authorities regarding freezing of bank account and subsequent adjudication proceedings. The HC held that statutory limitation provisions should be interpreted liberally where undue hardship is demonstrated, as per precedents, allowing extension of appeal filing period beyond the prescribed 60 days.
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• High Court Quashes Order for Lack of Proper Show Cause Notice and Opportunity of Hearing in GST Case.

  Case-Laws - HC : HC held that issuance of Summary of Show Cause Notice in Form GST DRC-01 without a proper Show Cause Notice u/s 73 of CGST/SGST Act is invalid. Proper Show Cause Notice and Statement of tax determination u/s 73(1) and 73(3) are mandatory requirements, in addition to Summary u/r 142. Impugned order passed without issuing proper Show Cause Notice is contrary to Section 73 and Rule 142(1)(a). HC further held that not granting opportunity of hearing despite request violates Section 75(4) safeguarding assessee's right. Show Cause Notice, Statement and Order require authentication u/r 26(3). Impugned order quashed for violating statutory provisions.
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• Opportunity for Defense Mandated Before Ex Parte Tax Liability Order Under GST Act.

  Case-Laws - HC : The HC held that the petitioner should be given an opportunity to defend itself by filing objections and submitting documents before the assessing officer/competent authority, as the order imposing tax liability was passed ex parte without proper service of show cause notice under GST Act. The principle of audi alteram partem mandates that no one should be condemned unheard, and procedural lapses shouldn't deprive parties of their right to appeal. The impugned order was treated as a show cause notice to enable petitioner to file reply.
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• Impugned GST Order Quashed for Lack of Proper Show Cause Notice, Violating Natural Justice Principles.

  Case-Laws - HC : The HC quashed the impugned order for violating principles of natural justice by not providing proper show cause notice and opportunity of hearing u/ss 73 and 75(4) of CGST/AGST Act. It held that summary of show cause notice without mentioning reasons cannot initiate proceedings u/s 73. The attachment containing tax determination u/s 73(3) cannot substitute show cause notice under 73(1). Proper show cause notice with reasons, statement under 73(3), and final order must be issued and digitally signed as per Rule 26(3). The HC granted liberty to initiate fresh proceedings.
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• Opportunity to respond to tax discrepancies, no indulgence: High Court clarifies procedural stance.

  Case-Laws - HC : The HC held that the petitioner's request for indulgence need not be granted as the communication dated 12.11.2024 merely afforded an opportunity of hearing after the respondents notified discrepancies. The petitioner can respond to the discrepancies, including contentions u/s 67(1) of the KGST Act raised in the writ petition.
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• Businesses Face GST Registration Cancellation as Investigations into Alleged Bogus Firms Continue.

  Case-Laws - HC : The HC held that although its previous order did not prescribe a specific timeline, the respondent submitted that inquiries into alleged bogus firms were ongoing, and an appropriate decision on cancellation of GST registration would be taken within a month. The petition was disposed of.
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Income Tax

• WhatsApp Chat Deemed Insufficient Evidence for Income Addition, TDS Credit Upheld.

  Case-Laws - AT : The ITAT accepted the assessee's explanation regarding the WhatsApp chat and held that the provisions of section 69A cannot be invoked for the addition of Rs. 30 lakhs, as the assessee had not received this amount from Omaxe Limited or any other party. The credit of TDS of Rs. 30 lakhs was duly given to the assessee by the income tax department after Omaxe Limited deposited the same. Consequently, the addition of Rs. 30 lakhs made by the AO was deleted.
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• Income Below Rs. 50 Lakhs Not Subject to 37% Surcharge: ITAT Clarifies Correct Tax Computation where MMR is applicable

  Case-Laws - AT : The ITAT held that the levy of surcharge at 37% on income including interest u/s 234F was incorrect. The maximum marginal rate refers to the income tax rate, including surcharge if applicable, for the highest income slab specified in the Finance Act. Surcharge is leviable only when the total income exceeds Rs. 50 lakhs. Since the assessee's income was Rs. 1,27,095/-, surcharge could not be levied. The AO was directed not to levy surcharge as the assessee's income was below Rs. 50 lakhs. The ITAT allowed the grounds raised by the assessee.
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• Tax appeal succeeds on share premium from reputed investors; AO failed to substantiate doubts.

  Case-Laws - AT : The ITAT held that the assessee had sufficiently established the identity, creditworthiness, and genuineness of the investors for share premium received. The initial onus was on the AO to allege suspicion through independent inquiry, not merely point out lacunae. Investors included reputed entities like Hero Group, Samvardhana Motherson, and Makesense Technologies. Valuation by a SEBI-registered merchant banker cannot be disturbed merely on suspicion. As the assessee qualified as a 'venture capital undertaking' u/s 10(23FB), provisions of Section 56(2)(viib) were inapplicable for share premium received from SEBI-registered venture capital funds. The assessee's appeal was allowed.
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• Disallowance of Payments to Related Parties Overturned: CBDT Circular & Court Rulings Uphold Equal Tax Treatment.

  Case-Laws - AT : Disallowance u/s 40A(2)(b) for excessive payments to related concerns was deleted based on CBDT Circular 6-P and case laws of Delhi HC in Sigma Research and Bombay HC in Indo Saudi Services, holding that disallowance is unsustainable when payer and payee are taxed at same rate. ITAT ruled in favour of the assessee.
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• Defective Notice Negates Penalty u/s 271AAB: Assessee Prevails.

  Case-Laws - AT : The ITAT held that the penalty u/s 271AAB could not be levied due to a defective notice. The AO failed to specify the specific limb for initiating penalty proceedings, denying the assessee a reasonable opportunity for an effective reply. As the notice was vague without indicating relevant portions, the Tribunal rightly observed that the penalty could not be levied based on such a defective notice, especially when the assessee had consistently raised the jurisdictional issue. The decision was in favor of the assessee.
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• Fertilizer subsidy under government scheme held as non-taxable capital receipt by ITAT, following earlier precedent.

  Case-Laws - AT : The ITAT dismissed the revenue's appeal, holding that the fertilizer subsidy received by the assessee under the NBS policy is a capital receipt not chargeable to tax. The ITAT followed its earlier decision in the assessee's case for AY 2015-16, where it was held that the scheme's purpose was to attract investment in the industry and make fertilizers available to farmers at appropriate prices, which could only be achieved by bringing new investments. The ITAT reiterated that this is a recurring issue already adjudicated in favor of the assessee.
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Customs

• Edible Oils, Metals, Nuts Get New Import Tariff Values from 1st Jan 2025 as per CBIC Notification.

  Notifications : CBIC fixed tariff values for import of edible oils like crude palm oil, RBD palm oil, crude palmolein, RBD palmolein, crude soya bean oil, brass scrap, gold, silver, and areca nuts effective 1st January 2025 through Notification No. 88/2024-Customs (N.T.) amending earlier Notification No. 36/2001-Customs (N.T.).
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• Customs Broker License Revoked, Security Deposit Forfeited & Rs. 50,000 Penalty for Submitting Forged Degree During Application.

  Case-Laws - AT : Appellant's customs broker license revoked, security deposit forfeited, and penalty of Rs. 50,000 imposed by Commissioner due to submission of forged graduation degree during license application. CESTAT upheld Commissioner's order, observing fraud and forgery disqualify appellant from continuing as customs broker under 2018 Regulations. Submission of forged documents vitiates license's validity, and fraud cannot be condoned. Appeal dismissed.
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• Delayed Anti-Dumping Duty Refund: Interest Payable from Application Date, Not Deposit Date - CESTAT Ruling.

  Case-Laws - AT : The CESTAT held that interest on delayed refund of Anti-Dumping Duty deposited during investigation is payable from the date of filing refund application, not from deposit date as per Sections 27 and 27A of Customs Act, 1962. Appellant's reliance on decisions allowing interest from deposit date was misplaced as those pertained to pre-2008 deposits when no statutory provision existed. The Tribunal, being a statutory creature, cannot award interest contrary to the Act. Appeal by Appellant was dismissed.
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• Imported Goods Value Reassessment: Engineer Certificate Rejected, NIDB Data Directed.

  Case-Laws - AT : The CESTAT rejected the Chartered Engineer's certificate and value determination for the imported goods, holding that the Engineer failed to justify the quality differences and provide details on suppliers/manufacturers for comparison. The Tribunal directed reassessment of value based on contemporaneous import/NIDB data or sequential Valuation Rules after providing relevant documents to the Appellant. The penalties imposed on the three Appellants u/ss 112, 114A, and 114AA were set aside. The issue of penalty and redemption fine was remanded for fresh consideration.
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• Customs Tribunal Allows Conversion of EOU Shipping Bills, Cites Lack of Natural Justice in Rejection.

  Case-Laws - AT : The CESTAT allowed the appeal and set aside the Commissioner's decision rejecting conversion of EOU shipping bills to DBK/DEPB shipping bills. It held the Commissioner's rejection violated principles of natural justice as no show cause notice or personal hearing was granted. The appellant had paid duty on clearances after de-bonding and closing stock, making them eligible for conversion u/s 149 of the Customs Act, 1962 as exports were from duty-paid inputs despite filing EOU shipping bills due to lack of final NOC. The CESTAT ruled the appellant was legally entitled to conversion.
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DGFT

• New Import Restrictions on Soda Ash - Minimum Import Price Set at Rs. 20,108/MT Until June 2025.

  Notifications : DGFT imposed Minimum Import Price (MIP) of Rs. 20,108 per MT on import of Disodium Carbonate (Soda Ash) covered under ITC(HS) Codes 28362010, 28362020 and 28362090 under Chapter 28 of ITC (HS) 2022 Schedule-I by making its import 'Restricted' up to 30th June 2025, unless CIF value is Rs. 20,108 or above per MT in which case import remains 'Free'. Existing 'Free' import policy shall be reinstated from 1st July 2025.
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Corporate Law

• New Rules Extend CSR Report Filing Deadline for Companies from Dec 31 to Mar 31.

  Notifications : The Companies (Accounts) Second Amendment Rules, 2024 extend the deadline for filing Corporate Social Responsibility report in Form CSR-2 from 31st December 2024 to 31st March 2025 under Companies Act, 2013 and Companies (Accounts) Rules, 2014.
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State GST

• Exporters can claim refund of additional IGST paid due to export goods' price hike post-shipment: CBIC guidelines.

  Circulars : The CBIC issued guidelines allowing exporters to claim refund of additional IGST paid due to upward revision in export goods' prices after shipment. Exporters can file refund claim electronically on common portal using Form GST RFD-01 under "Any other" category until dedicated category is enabled. The claim requires documents proving price revision, additional IGST payment, forex remittance and CA/CMA certificate. The jurisdictional GST officer will process the claim after verifying GSTR-1/3B details. Refund requires minimum Rs. 1000 eligibility with 2-year time limit from relevant date.
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• Corporate Guarantee by Related Parties: CBIC Clarifies Taxability, Valuation Methodology.

  Circulars : The CBIC has clarified the following key points regarding taxability and valuation of supply of services of providing corporate guarantee between related persons: Sub-rule (2) of Rule 28 of CGST Rules prescribing 1% valuation applies to corporate guarantees issued/renewed on or after 26.10.2023. For prior periods, valuation to be done as per then existing Rule 28. Value is based on amount guaranteed, not loan disbursed. ITC can be availed irrespective of loan disbursal. For co-guarantors, GST payable proportionately at 1% of respective amounts guaranteed. For intra-group guarantees, GST payable under forward charge by issuer. For guarantees by overseas entities, reverse charge applies. Valuation at 1% per annum or actual consideration, whichever higher. Second proviso to Rule 28(1) benefit available. The 1% valuation not applicable for export of this service.
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• No Recovery of GST Dues for Now if Appeal Authority Not Constituted, Pay Pre-Deposit and File Undertaking.

  Circulars : The CBIC issued guidelines regarding recovery of outstanding dues in cases where the first appellate authority has confirmed the demand, partially or fully, but appeals against such orders could not be filed due to non-constitution of the Appellate Tribunal. Taxpayers can pay the pre-deposit amount through the Electronic Liability Register and file an undertaking to appeal before the Tribunal when constituted. This will stay recovery of the remaining demand as per Section 112(9) of the CGST Act. Amounts inadvertently paid through FORM GST DRC-03, intended towards demand, can be adjusted against the pre-deposit through FORM GST DRC-03A once functionality is available on the common portal.
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IBC

• Corporate Debtor Loses Plea Against ED's Attachment Orders Under PMLA for Failure to Timely Appeal.

  Case-Laws - HC : NCLT Mumbai's order vacating attachment orders issued by ED under PMLA upheld. Petitioner, aware of CIRP proceedings, failed to avail statutory remedy of appeal before NCLAT within prescribed period. Plea of violation of natural justice rejected as petitioner deliberately did not intervene despite knowledge. HC vacated interim stay, directed petitioner to address jurisdictional issue, consider converting writ petition under Article 226.
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• Dissenting Creditor's Challenge to CoC's Resolution Plan Rejected; CoC's Commercial Wisdom Prevails.

  Case-Laws - AT : The NCLAT upheld the Adjudicating Authority's order approving the Resolution Plan, which was approved by the CoC with 70.07% voting share. The Appellant, a dissenting financial creditor with 6.64% voting share, challenged the CoC's decision to deduct Rs. 34 crores from its payout. The NCLAT held that the CoC's commercial wisdom in approving the Resolution Plan, including the manner of distribution, binds all stakeholders, including dissenting financial creditors, as per Supreme Court precedents. The appeal was dismissed, validating the CoC's decision based on its commercial wisdom and the binding nature of the approved Resolution Plan on dissenting creditors.
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Indian Laws

• Dishonored Cheque Case Dismissed Due to Failure to Prosecute Company; Only Company Can Be Primary Accused.

  Case-Laws - HC : The HC held that the non-prosecution of the company from whose account the dishonored cheque was issued is a fatal, non-curable illegality, leading to dismissal of the complaint u/s 138 of the NI Act. The prosecution requires the company to be named as an accused, and directors/officers can only be held vicariously liable if the company is prosecuted. Consequently, the petition was allowed.
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• Complainant's averment in affidavit suffices for private complaint under NI Act despite absence in complaint.

  Case-Laws - HC : The HC held that a power of attorney holder, aware of the case facts and making an averment in the affidavit, is competent to lodge a private complaint u/s 138 of the Negotiable Instruments Act, even if such averment is absent in the complaint itself. The petition to quash the complaint was dismissed, leaving open the maintainability of a second petition u/s 482 CrPC.
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• Accused's Defense Cannot Be Considered for Quashing Complaint u/s 138 of NI Act: Prove Before Trial Court.

  Case-Laws - HC : The HC held that it cannot assume the role of trial court and consider the accused's defense while exercising powers u/s 482 CrPC to quash complaint u/s 138 NI Act. The accused is required to prove defense by leading evidence before trial court. The petition being silent on lack of ingredients for Section 138 complaint was dismissed.
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SEBI

• Listed Companies' Compliance Simplified: SEBI Streamlines Periodic Filings Under LODR Regulations.

  Circulars : SEBI introduced Integrated Filing for listed entities combining governance and financial periodic filings under LODR Regulations. Timelines revised for quarterly integrated governance filing within 30 days, financial filing within 45/60 days from quarter-end. Specified eligibility criteria, disqualifications for secretarial auditors. Provided guidelines for disclosure of employee benefit scheme documents. Enabled system-driven disclosure for shareholding pattern, credit ratings. Amended Master Circular incorporating aforesaid changes.
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VAT

• Corporate Insolvency Resolution Plan Extinguishes All Prior Dues, Binding on Government Authorities.

  Case-Laws - HC : The HC held that as per Sections 31 and 238 of the IBC, the approved Resolution Plan is binding on the Corporate Debtor, its creditors, guarantors, and stakeholders, including government authorities. With the approval of the Resolution Plan by the NCLT, all dues of creditors, corporate, statutory, and others stand extinguished, and no demand can be raised for the period prior to the specified date. Consequently, the impugned communication/notice demanding outstanding entry tax was invalid, and the petition was allowed.
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• Limitation Period u/s 64 Karnataka VAT Act Applies to Initiation, Not Final Revisional Order by Additional Commissioner.

  Case-Laws - HC : The HC held that the four-year limitation period u/s 64 of the Karnataka Value Added Tax Act, 2003, pertains to the initiation of revisional proceedings by the Additional Commissioner and not the passing of the final order. In the instant case, the revisional proceedings were initiated within the four-year period from the original order's date, and thus, the Additional Commissioner had jurisdiction to pass the revisional order, even after the expiry of four years from the original order.
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Service Tax

• Outsourced Publishing Services are Not 'Online Data Access & Retrieval,' Qualify for Tax Refund.

  Case-Laws - AT : The CESTAT held that the services provided by the appellant did not qualify as Online Information Data and Access Retrieval (OIDAR) services. The appellant performed activities like copyediting, typesetting, formatting, proofreading, graphic designing, indexing, and coding on data provided by a foreign entity, without owning or transferring the data. As the appellant did not provide access or retrieval of owned data, the services did not fall under OIDAR. The appellant's services qualified as exports, entitling them to a refund u/r 5 of the CENVAT Credit Rules. The appeal was allowed.
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• Appellant Not Liable for Service Tax on Activities Not Qualifying as "Business Auxiliary Services.

  Case-Laws - AT : The CESTAT held that the Appellant did not provide any "Business Auxiliary Services" to Coca Cola India Pvt. Ltd. as per Section 65(19) of the Finance Act, 1994. The demand was set aside as the Adjudicating Authority cannot travel beyond the scope of the show cause notice. The extended period of limitation was also set aside due to lack of evidence of suppression or willful misstatement by the Appellant. The appeal was allowed.
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• ITC Can't Be Denied Without Due Process: Notice Must Be Issued To Question CENVAT Eligibility At Refund Stage.

  Case-Laws - AT : The CESTAT held that eligibility of CENVAT credit cannot be questioned at the refund stage without issuing a Show Cause Notice u/r 14 of the CENVAT Credit Rules, 2004 and initiating proceedings u/s 73. The department cannot deny CENVAT credit on input services by merely making observations while adjudicating refund claims without following due process. The appeal of the revenue was dismissed.
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• Appellant's Belief on Non-Taxability of Foreign Services Not Evasive, CESTAT Allows Appeal.

  Case-Laws - AT : The appellant had a bona fide belief that services provided by foreign service providers outside India were not taxable. CESTAT held that since there was revenue neutrality due to availability of CENVAT credit, the extended period for demand could not be invoked as there was no intention to evade service tax. Relying on previous decisions, CESTAT concluded that the demand raised for the extended period was unsustainable. The impugned order was set aside and the appeal allowed.
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Central Excise

• Bombay HC quashes 12-year-old tax adjudication proceedings, citing inordinate delay by authorities.

  Case-Laws - HC : The HC quashed the final order dated 31 January 2023 and the show cause notice (SCN) proceedings emanating from the impugned SCN dated 21 April 2011, after holding that the adjudication proceedings pending for almost 12 years were vitiated in law. The HC observed that although the petitioner was blamed for seeking repeated adjournments, the principal reason for the failure to conclude the proceedings expeditiously was the matter remaining in the call book for many years, as admitted by the respondents themselves.
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Case Laws:

• GST

• 2025 (1) TMI 127
  Challenge to actions and orders passed by the respondent authorities concerning the freezing of their bank account and subsequent adjudication proceedings - undue hardship and a violation of procedural fairness - HELD THAT:- Upon a thorough examination of the documents presented to the Court and taking into account the arguments put forth by the parties, this Court allows the writ petition as statutory provisions on limitation should be interpreted liberally in cases where genuine hardships are demonstrated, particularly in light of judicial precedents supporting such relief. In S.K. CHAKRABORTY SONS VERSUS UNION OF INDIA ORS. [ 2023 (12) TMI 290 - CALCUTTA HIGH COURT] the Hon ble Division Bench held that ' since provisions of Section 5 of the Act of 1963 have not been expressly or impliedly excluded by Section 107 of the Act of 2017 by virtue of Section 29 (2) of the Act of 1963, Section 5 of the Act of 1963 stands attracted. The prescribed period of 30 days from the date of communication of the adjudication order and the discretionary period of 30 days thereafter, aggregating to 60 days is not final and that, in given facts and circumstances of a case, the period for filling the appeal can be extended by the Appellate Authority'. In light of the procedural irregularities and the arbitrary nature of the actions, this court finds the petitioner s case to be meritorious - Accordingly, the writ petition is allowed, and the appellate order is quashed.

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• 2025 (1) TMI 126
  Issuance of a Summary of Show Cause Notice in Form GST DRC-01 without a proper Show Cause Notice - requirements under Section 73 of the CGST/AGST Act, 2017 satisfied or not - infraction to the various provisions of the Central Act, the State Act as well as the Rules framed thereunder - principles of natural justice have been violated as is not only a statutory mandate but also violative of Article 21 of the Constitution - lack of signatures on the attachments - whether the said attachment can be said to be a Show Cause Notice as per the mandate of both the Central Act as well as the State Act and the Rules made therein under? HELD THAT:- From a perusal of the Rule 142 of the Rules of 2017, it would show that in addition to the Show Cause Notice to be issued under Section 73 (1) and the Statement of determination of tax under Section 73 (3), there is an additional requirement of issuance of a Summary of the Show Cause Notice in GST DRC-01 and the Summary of the Statement in GST DRC-02. The natural corollary from the above analysis is that the issuance of the Show Cause Notice and the Statement of determination of tax by the Proper Officer are mandatory requirement in addition to the Summary of Show Cause Notice in GST DRC-01 and Summary of the Statement in GST DRC-02. This Court is of the view that the Summary of the Show Cause Notice along with the attachment containing the determination of tax cannot be said to be a valid initiation of proceedings under Section 73 without issuance of a proper Show Cause Notice. The Summary of the Show Cause Notice is in addition to the issuance of a proper Show Cause Notice. Under such circumstances, this Court is of the opinion that the impugned order challenged in the instant writ petition is contrary to the provisions of Section 73 as well as Rule 142 (1) (a) of the Rules as the said impugned Orders were passed with issuance of a proper Show Cause Notice. Whether Rule 26 (3) can be applicable to Chapter-XVIII when the said Sub-Rule on refers to Chapter-III? - HELD THAT:- This Court has duly perused the Summary of the Show Cause Notices wherein the petitioner was only asked to file his reply on a date specified. There was no mention as to the date of hearing and the Column was kept blank. However, the petitioner had sought for an opportunity of hearing which was however not given. In this regard, if this Court takes note of Section 75 (4) of both the Central Act as well as State Act, it would be seen that it is the mandate of the said provision that an opportunity of hearing should be granted when a request is received in writing from the person chargeable with tax or penalty or when any adverse decision is contemplated against such person. The mandate of Section 75 (4) of both the Central and State Act are safeguards provided to the assessees so that they can have a say in the hearing process. This Court is of the view that the Summary of the Show Cause Notice in GST DRC-01 is not a substitute to the Show Cause Notice to be issued in terms with Section 73 (1) of the Central Act as well as the State Act. Irrespective of issuance of the Summary of the Show Cause Notice, the Proper Officer has to issue a Show Cause Notice to put the provision of Section 73 into motion. The Show Cause Notice to be issued in terms with Section 73 (1) of the Central Act or State Act cannot be confused with the Statement of the determination of tax to be issued in terms with Section 73 (3) of the Central Act or the State Act. In the instant writ petitions, the attachment to the Summary of Show Cause Notice in GST DRC-01 is only the Statement of the determination of tax in terms with Section 73 (3). The issuance of the Summary of the Show Cause Notice, Summary of the Statement and Summary of the Order do not dispense with the requirement of issuance of a proper Show Cause Notice and Statement as well as passing of the Order as per the mandate of Section 73 by the Proper Officer. As initiation of a proceedings under Section 73 and passing of an order under the same provision have consequences. The Show Cause Notice, Statement as well as the Order are all required to be authenticated in the manner stipulated in Rule 26 (3) of the Rules of 2017. Accordingly, this Court is of the opinion that the Impugned Order challenged in the writ petition are in violation of Section 75 (4) as no opportunity of hearing was given. Conclusion - A proper Show Cause Notice is mandatory under Section 73, and digital signatures are required for authentication under Rule 26(3). The impugned order dated 30.04.2024 issued by the respondent no.3 is hereby set aside and quashed - Petition disposed off.

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• 2025 (1) TMI 125
  Denial of opportunity to defend itself due to the alleged failure of service of a show cause notice under the Goods and Services Tax Act, 2017 - Remedy of appeal having been denied on the ground of delay that was for want of knowledge - HELD THAT:- Division bench of this Court in the Ola Fleet Technologies Pvt. Ltd. v. State of U.P. and Others [ 2024 (7) TMI 1543 - ALLAHABAD HIGH COURT] has dealt with this aspect of the matter and it has been held that no material existed to reject the contention advanced on behalf of the petitioner that order impugned imposing liability of tax was not reflecting under tab 'view notices and orders' and so there remained a valid dispute as to non consideration/consideration of the various documents of returns available which could have been shown in reply to the show cause notice. The division bench was of the view that party under liability of tax in an ex parte order needs at-least an opportunity to put up his defense by submitting papers which may have led assessing officer to uphold the claim for exemption from tax liability. The division bench accordingly, instead of keeping the matter pending disposed off the same with a direction that impugned order may be taken as notice to enable the petitioner to submit his reply and thereafter assessing officer may have to pass a fresh order. The view taken by the division benches as cited before the Court are absolutely correct on the principle that nobody should be condemned unheard and legislature while incorporating the provision of notice/ show cause notice, intended so. Conclusion - Nobody should be condemned unheard and legislature while incorporating the provision of notice/ show cause notice, intended so. Effective communication of notices is essential for ensuring a fair hearing and that procedural lapses should not deprive parties of their right to appeal. It is directed that the order passed by the assessing officer dated 07.02.2024 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 its documents before assessing officer/competent authority for its consideration - petition disposed off.

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• 2025 (1) TMI 124
  Challenge to final order referable to Section 73 of the Central Goods and Services Tax Act, 2017 CGST Act - non-compliance with personal hearing - violation of principles of natural justice - HELD THAT:- Fact noted is that pursuant to the original Show Cause Notice which had come to be issued, the petitioner had furnished a detailed response. However, the same has been perfunctorily brushed aside and the observations produced. An identical challenge formed the subject matter of XEROX INDIA LIMITED VERSUS ASSISTANT COMMISSIONER, WARD 208 (ZONE -11) DGST AND ANR [ 2024 (12) TMI 1283 - DELHI HIGH COURT] . Dealing with an identically worded order framed by the said GST Officer, it is obserfed that ' The Assistant Commissioner has clearly adopted a template where the only reason assigned is that the reply filed was not comprehensible, conceivable, not perspicuous and is ambiguous . This clearly exhibits an abject non-application of mind and the officer repeatedly employing identical phraseology to deal with such matters.' The impugned order dated 31 August 2024 cannot be sustained - petition allowed.

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• 2025 (1) TMI 123
  Challenge to Summary of the Show Cause Notice - attachment to the determination of tax - attachments to both the GST DRC-01 as well as the GST DRC-07 did not contain any signature of the Proper Officer - opportunity of hearing as provided under Section 75 (4) of the CGST/AGST Act, 2017 not provided before passing of the order - violation of principles of natural justice - whether the said attachment can be said to be a Show Cause Notice as per the mandate of both the Central Act as well as the State Act and the Rules made therein under? HELD THAT:- It would be apposite to take note of that in all these cases, the Summary of the Show Cause Notices have been issued in terms with Section 73 - Taking into account that it is only in the circumstances referred to above, the Proper Officer is required to issue a Show Cause Notice, therefore, the Show Cause Notice is required to specifically mention the reason(s) and the circumstances why the provision of Section 73 had been set into motion. The person against whom the said Show Cause Notice is issued would only have an adequate opportunity to submit a representation justifying that the prerequisites for issuance of Show Cause Notice is not there if and only if the reason(s) for issuance of the Show Cause is specifically mentioned in the Show Cause Notice. This Court is of the view that the Summary of the Show Cause Notice along with the attachment containing the determination of tax cannot be said to be a valid initiation of proceedings under Section 73 without issuance of a proper Show Cause Notice. The Summary of the Show Cause Notice is in addition to the issuance of a proper Show Cause Notice. Under such circumstances, this Court is of the opinion that the impugned order challenged in the instant writ petition is contrary to the provisions of Section 73 as well as Rule 142 (1) (a) of the Rules as the said impugned Orders were passed with issuance of a proper Show Cause Notice. Whether the determination of tax as well as the order attached to the Summary to the Show Cause Notice in GST DRC-01 and the Summary of the Order in GST DRC-07 can be said to be the Show Cause Notice and order respectively, this Court duly dealt with what would constitute a Show Cause Notice, the Statement as per Section 73 (3) as well as the Summary to the Show Cause Notice in GST DRC-01 and Summary of the Statement in GST DRC-02. This Court had also opined above that the statement to be provided by the Proper Officer in terms with Section 73 (3) cannot be said to be a Show Cause Notice which is required to be issued in terms with Section 73 (1). Therefore, the submission of the respondents that the statement attached to the Summary of the Show Cause Notice is the Show Cause Notice is completely misconceived and contrary to Section 73 (1) and 73 (3). Whether Rule 26 (3) can be applicable to Chapter-XVIII when the said Sub-Rule on refers to Chapter-III? - HELD THAT:- In the case of M/S. SILVER OAK VILLAS LLP VERSUS THE ASSISTANT COMMISSIONER (ST) , THE ADDITIONAL COMMISSIONER OF CENTRAL TAX, STATE OF TELANGANA, UNION OF INDIA, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS [ 2024 (4) TMI 367 - TELANGANA HIGH COURT] , the learned Division Bench of the Telangana High Court had applied Rule 26 (3) of the Rules of 2017 even to Chapter-XVIII of the Rules of 2017. In the case of AV BHANOJI ROW VERSUS ASSISTANT COMMISSIONER ST VISAKHAPATNAM [ 2023 (2) TMI 1224 - ANDHRA PRADESH HIGH COURT] , the learned Division Bench of the Andhra Pradesh High Court held that the signatures cannot be dispensed with and Sections 160 and 169 cannot save an order, notice, communication which did not contain a signature. In another judgment of the learned Division Bench of Delhi High Court in the case of RAILSYS ENGINEERS PRIVATE LIMITED ANR. VERSUS THE ADDITIONAL COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX (APPEALS-II) ANR. [ 2022 (7) TMI 1230 - DELHI HIGH COURT] , the Delhi High Court held that there was a requirement of at least putting the digital signatures on the Show Cause Notice and Order in Original. This Court has duly perused the Summary of the Show Cause Notices wherein the petitioner was only asked to file his reply on a date specified. There was no mention as to the date of hearing and the Column was kept blank. However, the petitioner had sought for an opportunity of hearing which was however not given. In this regard, if this Court takes note of Section 75 (4) of both the Central Act as well as State Act, it would be seen that it is the mandate of the said provision that an opportunity of hearing should be granted when a request is received in writing from the person chargeable with tax or penalty or when any adverse decision is contemplated against such person. The mandate of Section 75 (4) of both the Central and State Act are safeguards provided to the assessees so that they can have a say in the hearing process. This Court is of the opinion that when the statute is clear to provide an opportunity of hearing, there is a requirement of providing such opportunity. In fact a perusal of the Form GST DRC-01 enclosed to the writ petition shows that details have been given as regards the date by which the reply has to be submitted; date of personal hearing; time of personal hearing and venue of personal hearing. It is seen that in the Summary of the Show Cause Notice only the date for submission of reply has been mentioned - in a case where no reply is filed, a question arises whether the Proper Officer can pass an adverse order without providing an opportunity for hearing. The answer has to be in the negative else it would render the second part of Section 75 (4) redundant. Conclusion - This Court is of the view that the Summary of the Show Cause Notice in GST DRC-01 is not a substitute to the Show Cause Notice to be issued in terms with Section 73 (1) of the Central Act as well as the State Act. Irrespective of issuance of the Summary of the Show Cause Notice, the Proper Officer has to issue a Show Cause Notice to put the provision of Section 73 into motion. The Show Cause Notice to be issued in terms with Section 73 (1) of the Central Act or State Act cannot be confused with the Statement of the determination of tax to be issued in terms with Section 73 (3) of the Central Act or the State Act. In the instant writ petitions, the attachment to the Summary of Show Cause Notice in GST DRC-01 is only the Statement of the determination of tax in terms with Section 73 (3). The said Statement of determination of tax cannot substitute the requirement for issuance of the Show Cause Notice by the Proper Officer in terms with Section 73 (1) of the Central or the State Act. Under such circumstances, initiation of the proceedings under Section 73 against the petitioners in the instant batch of writ petitions without the Show Cause Notice is bad in law and interfered with - The issuance of the Summary of the Show Cause Notice, Summary of the Statement and Summary of the Order do not dispense with the requirement of issuance of a proper Show Cause Notice and Statement as well as passing of the Order as per the mandate of Section 73 by the Proper Officer. As initiation of a proceedings under Section 73 and passing of an order under the same provision have consequences. The Show Cause Notice, Statement as well as the Order are all required to be authenticated in the manner stipulated in Rule 26 (3) of the Rules of 2017. Accordingly, this Court is of the opinion that the Impugned Order challenged in the writ petition are in violation of Section 75 (4) as no opportunity of hearing was given. The impugned order dated 27.04.2024 issued by the respondent no.3 is hereby set aside and quashed. This Court also cannot be unmindful of the fact that it is on account of certain technicalities and the manner in which the impugned order was passed, this Court interfered with the impugned order and hence set aside and quashed the same - this Court while setting aside the impugned Order-in-Original dated 27.04.2024, grants liberty to the respondent authorities to initiate de novo proceedings under Section 73, if deemed fit for the relevant financial year in question - Petition disposed off.

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• 2025 (1) TMI 122
  Challenge to action initiated by the official respondents - procedure under Section 64(2) of the KGST Act has been undertaken without section 67 (1) of the KGST Act having been complied - HELD THAT:- This Court is of the considered opinion that the indulgence as requested by the petitioner is not required to be granted since vide communication dated 12.11.2024 the petitioner has merely been afforded an opportunity of hearing after the official respondents have set out the discrepancies as noticed by them. Hence, it is open to the petitioner to respond to the discrepancies as notified in the communication dated 12.11.2024. While responding to the same, it is open to the petitioner to take all contentions permissible under law including the contentions with regard to Section 67 (1) of the KGST Act that has been urged in the present writ petition. Petition disposed off.

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• 2025 (1) TMI 121
  Denial of benefit of input tax credit on account of the provisions contained in Sub Section (4) of Section 16 of the CGST/SGST Acts, for the financial year 2018-19 - HELD THAT:- Having regard to the assertion of the learned counsel appearing for the petitioner that on account of notification of Sub-Section (5) of Section 16 of the CGST/SGST Acts, the petitioner will be entitled to input tax credit, which has been denied to the petitioner by Ext.P1 order, the writ petition will stand disposed of, setting aside Ext.P1 to the extent that it denied input tax credit to the petitioner on account of the provisions of Sub Section (4) of Section 16 of the CGST/SGST Acts and directing the competent authority to pass fresh orders, after taking note of the provisions contained in Section 16(5) of the CGST/SGST Acts and after affording an opportunity of hearing to the petitioner, within a period of three months from the date of receipt of a certified copy of this judgment.

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• 2025 (1) TMI 120
  Amendment made to Section112 of the Central Goods and Services Tax Act, 2017 substituting twenty per cent pre deposit to ten per cent for maintaining an appeal before the Goods and Services Tax Tribunal - HELD THAT:- As of now pre-deposit has been reduced to ten per cent but however, the same is made effective only from 01.11.2024. It is an admitted position that the GST Tribunals have not been constituted as yet and there is no possibility of an appeal being filed prior to 01.11.2024. In such circumstance we direct that the assessee on payment of ten per cent of the tax amounts in dispute shall be entitled to stay of recovery till the Tribunal is constituted and an appeal is filed within such term as provided therein. Petition disposed off.

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• 2025 (1) TMI 119
  Cancellation of registration granted to the petitioners under the provisions of the CGST / SGST Acts - rejection on the ground that it was belatedly filed - HELD THAT:- The show cause notice issued to the petitioner in this case is produced as Ext.P1. A perusal of Ext.P1 shows that the same has been issued in Form GST Reg 31, which is the form for issuing a notice regarding suspension of registration. A perusal of the judgment of this Court in W.P(C)No.29807 of 2022 [ 2022 (12) TMI 1370 - KERALA HIGH COURT ] will indicate that it was a case where a show cause notice has been issued alleging that there was failure to furnish returns for a continuous period of six months. Conclusion - The cancellation orders quashed, allowing the petitioners to restore their registrations subject to conditions imposed. Petition disposed off.

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• 2025 (1) TMI 118
  Challenge to SCN for not paying GST under the Central Goods and Services Tax (CGST)/Telangana State Goods and Services Tax (TSGST) Act, 2017, despite having paid GST under the Integrated Goods and Services Tax (IGST) Act, 2017 - HELD THAT:- In the peculiar facts and circumstances of the case, where the petitioner has already deposited the tax under the IGST Act, it is deemed proper to direct the petitioner to prefer appeal(s) within three weeks from today before the competent appellate authority. If such appeal(s) is/are filed within aforesaid time, despite not depositing 10% of the tax demanded, as per the statutory requirement, the competent appellate authority shall consider and decide such appeal(s) on merits expeditiously. Petition disposed off.

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• 2025 (1) TMI 117
  Negative blocking of the Electronic Credit Ledger - interpretation of Rule 86A of the CGST Rules, 2017 - HELD THAT:- Though the counsel for the respondents has placed reliance on the letter dated 19.08.2024 issued to the respondents by the Directorate General of GST Intelligence, Regional Unit, Jamshedpur, to justify their action, when such action is not permitted by the Rules framed under the Act, it would be prima facie wholly without jurisdiction. Therefore, the order at Annexure 5 is kept in abeyance until further orders. Also having regard to Rule 6(2)(b) of the Jharkhand Goods and Services Tax (SGST) Rules, 2017, further proceedings before the respondents shall stand stayed. List this case on 11.12.2024.

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• 2025 (1) TMI 116
  Cancellation of registration of petitioner - non-filing of returns - order would seem to indicate that no tax liability stands foisted upon the petitioner nor are there any outstanding payments due - HELD THAT:- The writ petition is disposed off by according liberty to the writ petitioner to apply for revocation of the order of cancellation and furnish all Returns for the periods in respect of which there was non-compliance. In case such an application is moved within a period of three weeks from today, the competent authority may examine the prayer for revocation and dispose of the same in accordance with law.

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• 2025 (1) TMI 115
  Challenge to order passed by the appellate authority dismissing the appeal filed by the appellants as it was time-barred - HELD THAT:- Taking note of the fact that the appellants are in possession of certain customs documents and that their contention is that no tax is payable since it was an import transaction on which customs duty has been remitted and also taking into consideration that the appellants have pre-deposited a sum of Rs.1,48,895/- at the time of preferring the appeal, being 10% of the disputed tax and also taking note of the fact that the tax period is from July 1, 2017 to March 31, 2018 i.e. when the GST regime was introduced, this Court is of the view that one more opportunity can be granted to the appellants. It is made clear that this order has been passed without going into the merits of the matter and taking into consideration the peculiar facts and circumstances of the case and also the relevant tax period. The order passed in the writ petition is set aside and the writ petition is allowed and the order passed by the appellate authority and adjudication order passed under Section 73 of the Act dated 17th April, 2023 are set aside and the matter is remanded back to the adjudicating authority for fresh consideration - Appeal allowed.

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• 2025 (1) TMI 114
  Maintainability of petition - availability of alternative remedy - HELD THAT:- The order directing the appellant to approach the appellate authority does not call for interference. However, we are of the view that instead of directing payment of cost to the respondent of Rs. 5,00,000/-, the appellant shall deposit the said amount before the adjudicating authority and the said deposit shall be treated as the requisite pre-deposit for entertaining the appeal by the appellate authority. Appeal disposed off.

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• 2025 (1) TMI 113
  Cancellation of GST registration - impugned order came to be passed without providing any opportunity of personal hearing to the petitioner - HELD THAT:- In the present case, it appears that now the petitioner is willing to file an appeal against the impugned assessment order dated 22.12.2023 passed by the respondent and today, the learned counsel for the petitioner has restricted his relief and requested this Court to grant liberty to the petitioner to file an appeal against the impugned assessment order since it will be sufficient to meet out the case of the petitioner. Though this petition has been filed challenging the impugned order dated 22.12.2023, considering the submissions made by the petitioner, this Court is inclined to dismiss the present petition by granting liberty to the petitioner to file an appeal against the impugned assessment order. Petition dismissed.

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• 2025 (1) TMI 112
  Constitutional validity of provisions of section 16(4) of CGST Act/ SGST Act, 2017 - violative of Article 14, 19 and 300A of the Constitutional of India or not - time limit for taking input tax credit - HELD THAT:- The issue in controversy involved in the present petition is directly and squarely covered by the judgment of this Court in the case of M/S. SADHANA ENVIRO ENGINEERING SERVICES VERSUS THE JOINT COMMISSIONER OF CENTRAL TAX; THE PRINCIPAL COMMISSIONER OF CENTRAL TAX BENGALURU; UNION OF INDIA; STATE OF KARNATAKA REPRESENTED BY ITS SECRETARY, BANGALORE [ 2024 (9) TMI 1648 - KARNATAKA HIGH COURT] where it was held that ' The parties are relegated to the stage of show cause notice at Annexure-C dated 13.02.2020 issued by the respondent(s) and the respondents are directed to give effect to and implement the amended provisions contained in Section 118 of The Finance (No.2) Act, 2024 relating to insertion of Section 16(5) to the CGST Act / KGST Act by providing sufficient and reasonable opportunity and hear the petitioner and proceed further in accordance with law within a period of one month from the date of receipt of a copy of this order.' Conclusion - The introduction of Section 16(5) extends the timeline for availing input tax credit, providing relief to assessees and impacting pending legal challenges to previous provisions. The impugned Order at Annexure-D dated 28.02.2023 and Summary at Annexure-E dated 28.02.2023 are hereby quashed - petition allowed.

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• 2025 (1) TMI 111
  Denial of input tax credit has been denied to the petitioner on account of the provisions contained in Section 16(2)(c) and Section 16(4) of the CGST/SGST Acts - HELD THAT:- The writ petition will stand disposed of, directing the 1st respondent to consider the directions issued by this Court in the judgment in M. Trade Links [ 2024 (6) TMI 288 - KERALA HIGH COURT] and to extend the benefit of the directions issued in that case to the petitioner, if the factual situation of the petitioner is similar. In so far as the claim of the petitioner for input tax credit, which has been denied to the petitioner in terms of the provisions contained in Section 16(2)(c) of the CGST/SGST Acts is concerned, it is directed that the claim of the petitioner shall be considered in terms of the Circulars referred to in Paragraph No.101 of M. Trade Links. To enable the consideration of the matter, Ext.P1 order will stand set aside to the extent it denies credit on account of the provisions contained in Section 16(2)(c) and Section 16(4) of the CGST/SGST Acts. The writ petition ordered.

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• 2025 (1) TMI 110
  Seeking initiation of the contempt proceedings against the respondent for the wilful disobedience of the order 2024 (9) TMI 756 - DELHI HIGH COURT - respondent was directed to consider the cancellation of the GST registration at the earliest - HELD THAT:- It appears that as such no specific timeline was prescribed in the aforesaid order. However, the respondent submits that some inquiries are going on into the alleged bogus firms and the appropriate decision would be taken within a month from today. Petition disposed off.

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• 2025 (1) TMI 109
  Applicability of principle of mutuality - challenge to SCN issued u/s 73(1) and 74(1) of the CGST / SGST Acts - HELD THAT:- Since only a show cause notice has been issued to the petitioner, it is premature for the petitioner to challenge the same by approaching this Court by filing a writ petition. If the petitioner has a case that services to its members are not liable to GST, it is for the petitioner to establish the same before the authorities. Any contention of the petitioner on the basis of the findings of this Court in INDIAN MEDICAL ASSOCIATION, KERALA STATE BRANCH, VERSUS UNION OF INDIA, STATE OF KERALA, GST COUNCIL, ADDITIONAL DIRECTOR GENERAL DIRECTORATE GENERAL OF GST INTELLIGENCE, KOCHI, DEPUTY DIRECTOR, DIRECTORATE GENERAL OF GST INTELLIGENCE, KOZHIKODE. [ 2024 (7) TMI 1448 - KERALA HIGH COURT] can also be considered by the competent authority, in accordance with the law. This writ petition will stand disposed of directing the respondent to consider the claim, if any, of the petitioner after adverting to any reply that may be filed by the petitioner and affording to them an opportunity of hearing and in accordance with the law, as expeditiously as possible and at any rate, within a period of two months from the date of receipt of a certified copy of this judgment.

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• 2025 (1) TMI 108
  Violation of principles of natural justice - Non-service of SCN - petitioner was unaware of the impugned order - delay in filing appeal - HELD THAT:- In the present case, it appears that the petitioner was unaware of the impugned order, due to which, there was a delay in filing the appeal and the reason provided for non-filing of appeal within the prescribed time appears to be genuine. Therefore, being satisfied with the reasons assigned by the petitioner and also considering the submission made by the petitioner, this Court is inclined to condone the delay. The impugned order dated 25.07.2024 is set aside and the delay of 37 days in filing the appeal before the 1st respondent is hereby condoned. Petition disposed off.

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• 2025 (1) TMI 107
  Disallowance of Input Tax Credit only on the ground that the claims have been lodged beyond the period prescribed under Section 16(4) of the GST Acts - HELD THAT:- The impugned order passed by the respondent dated 28.12.2023 is set aside. The learned assessing/adjudicating authority/ respondent shall re-do the assessment by taking into account the amendment referred supra. The petitioner may submit their objection by way of reply, within a period of three (3) weeks from the date of receipt of a copy of this order along with the amendment and other details. If any such reply is filed, the same shall be considered and orders shall be passed in accordance with law, after affording reasonable opportunity of personal hearing to the petitioner. Petition disposed off.

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• 2025 (1) TMI 106
  Violation of principles of natural justice - service of SCN - petitioner was never afforded any opportunity of personal hearing - HELD THAT:- Upon service of notice, the petitioner had been called to file its reply only. Consequently, non-compliance of that show cause notice may have only led to closure of opportunity to submit written reply. However by virtue of the express provision of Section 75 of the Act, even in that situation the petitioner did not lose its right to participate at oral hearing and establish at that stage itself that the adverse conclusions proposed to be drawn against the petitioner, may be dropped. The rules of natural justice as are ingrained in the statute prescribe dual requirement. First with respect to submission of written reply and the second with respect to oral hearing. Failure to avail one opportunity may not lead to denial of the other. The two tests have to be satisfied independently. Thus, no useful purpose may be served in keeping this petition pending or calling counter affidavit at this stage or to relegate the present petitioner to the forum of alternative remedy. The order impugned has been passed contrary to the mandatory procedure. The deficiency of procedure is self apparent and critical to the out-come of the proceedings. Matter is remitted to the respondent No. 2 to pass a fresh order - petition allowed by way of remand.

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• 2025 (1) TMI 105
  Seeking to direct the Respondent/Ministry of Heavy Industries to issue a GST Concession Certificate the Certificate for enabling Petitioner to purchase a four-wheeler - HELD THAT:- Respondent shall resolve the issue pertaining to error in the website enabling the Petitioner to submit his application for grant of GST Concession Certificate on time. Petition disposed off.

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• Income Tax

• 2025 (1) TMI 128
  Disallowance of exemption u/s 11 - delay in filing Form No 10 - as argued delay in filing Form No. 10B electronically was due to genuine reason as the appellant came to know at a later stage that even through books are audited and audit report is issued Chartered Accountant has not uploaded Form No 10 - HELD THAT:- Since the audit report were duly obtained by the appellant well within the due of filing return of income for the respective assessment years under consideration, and delay in filing of such report by the appellant was due to its bonafied belief that, the auditor who issued the audit report in Form No 10B had filed the same online in time. Beyond a plea of the sort the appellant there can not necessarily be independent proof or material to establish failure of auditor to acted in due diligence. In these circumstances of the cases, the appellant, in our considered view, was successful in exhibiting bona-fide reasons as to why there was delay in filing the required audit reports for both the year under consideration. As decided in Shree Jain Swetamber Murtipujak Tapagachha Sangh [ 2024 (3) TMI 1327 - BOMBAY HIGH COURT] and Al Jamia Mohammediyah Education Society [ 2024 (4) TMI 939 - BOMBAY HIGH COURT] held that the error on the part of auditor cannot be rejected but should be accepted as a reasonable cause shown by the trust management. In that case alike the present case, assessee did not suo-motto even realize its mistake of non-filing of audit report along-with return until the intimation was served u/s 143(1) of the Act. Revenue was not justified in denying the benefit of exemption u/s 11 of the Act in pleno to the appellant trust. Remand matters back to the files Ld. AO with a direction to (a) take on record both the audit reports filed for the respective assessment years (b) treat them as filed in compliance with the provisions of section 12A(1)(b) of the Act and (c) then assess the total income of the appellant trust after giving effect to the provision of section 11 and section 12 of the Act in the light of applicable provisions of the Act.

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• 2025 (1) TMI 104
  Depreciation whether claimed or not foisted upon the assessee even prior to insertion of Explanation 5 to S. 32 (1) with effect from 1.04.2002 - HELD THAT:- Question No. 1 is no more res integra in view of the decision of the Hon ble Apex Court in case of ACIT vs. G.E. Lighting (I.) (P.) Ltd [ 2023 (6) TMI 1179 - SC ORDER] held that Explanation 5 to section 32 (1) would be applicable prospectively w.e.f. 01.04.2002. Therefore, Assessment year 2001-02 would not be covered by the Explanation 5. We therefore, answer Question No. 1 in affirmative i.e. in favour of the assessee and against the Revenue. Depreciation whether claimed or not on notional basis to be reduced from the profit of eligible industrial undertakings for the purpose of calculating deduction under Chapter VIA - HELD THAT:- Question No. 2 is covered in favour of the Revenue as per the decision of Plastiblends India Ltd [ 2017 (10) TMI 423 - SUPREME COURT] as held any device adopted to reduce or inflate the profits of eligible business has to be rejected. The assessees/appellants want 100% deduction, without taking into consideration depreciation which they want to utilise in the subsequent years. This would be anathema to the scheme u/s 80-IA which is linked to profits and if the contention of the assessees is accepted, it would allow them to inflate the profits linked incentives provided u/s 80-IA of the Act which cannot be permitted. Export profits earned and claimed as deductible u/s. 80 HHC includes profits earned by the New Industrial Units (whose profits are eligible for deduction u/s.80IA and 80IB - Whether Appellate Tribunal was right in law in not allowing deduction u/s.80HHC as well as 80IA of the Act on the same gross total income without reducing each other? - HELD THAT:- Question Nos. 3 and 4 are also covered in favour of the Revenue in view of the decision of this Court in case of CIT vs. Atul Intermediates [ 2014 (4) TMI 676 - GUJARAT HIGH COURT] and the decision of Micro Labs Ltd [ 2015 (12) TMI 708 - SUPREME COURT] Income Tax Appellate Tribunal was not right in law in confirming that the export profits earned and claimed as deductible u/s. 80 HHC includes profits earned by the New Industrial Units (whose profits are eligible for deduction u/s.80IA and 80IB of the Act. Deduction u/s.80IA of the Act on the New Power Plant - HELD THAT:- The Hon ble Apex Court, in case of Textile Machinery Corporation Ltd [ 1977 (1) TMI 3 - SUPREME COURT] while considering the issue regarding entitlement to the exemption claimed under section 15C (2) (i) of the Income Tax Act, 1922, which is peri materia to section 80IA of the Act Tribunal was right in law in not allowing deduction under section 80IA of the Act on the installation of the new turbine by the assessee being a new power plant by not treating the same as new industrial undertaking within the meaning of the proviso of section 80IA of the Act. We therefore, answer the question in favour of the assessee and against the Revenue.

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• 2025 (1) TMI 103
  Deduction u/s 80P(2)(a)(i) - interest earned by a co-operative credit society from other co-operative societies/banks - HELD THAT:- The law is now well settled that any co-operative credit society is not holding banking license is eligible for deduction u/s. 80P(2)(d) in view of Judgment in the case of Citizen Co-operative Society Ltd. [ 2017 (8) TMI 536 - SUPREME COURT] and The Mavilayi Service Cooperative [ 2021 (1) TMI 488 - SUPREME COURT] . Thus, we hold that assessee is eligible for claim of deduction u/s.80P(2)(a)(i) that all its income is from members and the reason given by the ld. AO that income / interest has been earned from deposits made in the co-operative banks, therefore, same is not eligible for deduction u/s.80P. The same is also covered by the decision of ITAT Mumbai Bench in the case of Bharat Sanchar Nigam Employees Co-operative Credit Society Ltd[ 2024 (11) TMI 423 - ITAT MUMBAI] Accordingly, the grounds raised by the assessee are allowed for both the years.

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• 2025 (1) TMI 102
  Disallowance u/s 80(P)(2)(a) (i) and 80P(2)(d) - interest had been received from co-operative banks - HELD THAT:- As in the case of PCIT vs. Annasaheb Patil [ 2023 (5) TMI 372 - SC ORDER] held that assessee being a credit society are entitled for exemption u/s. 80P(2) and they cannot be termed as public co-operative banks and therefore, Section 80P(4) shall not be applicable. Admittedly, here in this case the interest had been received from co-operative banks and law is well settled that credit co-operative society investments in co-operative bank claimed as allowable u/s.80P(2) because co-operative banks are also registered under co-operative society. Accordingly, respectfully following the earlier year precedents for A.Y.2017-18 [ 2024 (4) TMI 1169 - ITAT MUMBAI] the grounds raised by the Revenue in both the appeals are dismissed.

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• 2025 (1) TMI 101
  Ex-part assessment - assessee has made some unexplained investment for purchase of property - addition was made u/s. 69 and tax was charged u/s. 115BBE @ 60% - for addition made in her hand, it has been stated that her son, who was non-resident and was employed in USA had sent the money from US to buy the properties in his father s and mother s name - HELD THAT:- Since the assessment has been decided exparte, therefore, in the interest of justice, the matter is restored for the limited purpose that in so far as investment in one property which has been accepted to be invested by her son Shri Gajanan Sudhir Hotkar, then no addition should be made; and secondly, as regards other property AO is directed to verify whether this property has been purchased from the funds / sources given by her son and if that is the case then, no addition should be made. For this limited purpose, the matter is restored back to the file of the ld. Jurisdictional AO (JAO) and assessee should comply with the notice and substantiate the source from her son for the purchase of second property for Rs. 30,00,000/-. Appeal of the assessee is partly allowed for statistical purposes.

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• 2025 (1) TMI 100
  Bogus purchases - GP Rate estimation - AO had applied GP rate of 12.5% on the purchases - HELD THAT:- Once the assessee had provided the details of corresponding sales on such purchases, delivery challans and the quantity of purchases alongwith payments made through banking channels backed by invoices, then without rejecting the books of accounts or corresponding sales, the trading results and Gross Profit cannot be disturbed. The sole reliance has been placed on the statement of one person who was handling affairs of these two companies and that he was providing bogus bill, addition has been made by applying higher GP rate. Nowhere has it been pointed out that in his statement he has given the name of the assessee or stated that assessee was also provided any kind of accommodation bill. Once the quantitative details of purchase and sales which tallies with the trading results and overall gross profit has been accepted and corresponding one to one sale of the purchases made from these parties alongwith delivery challans has been shown, then, no addition can be made by applying any kind of GP rate. As noted above, CIT (A) in A.Y.2016-17 has deleted the addition and in A.Y.2018-19 he has applied GP rate of 0.88% by taking difference. This difference for making addition on account of GP rate of 0.88% is not justified when there is no such finding that there is some discrepancy in the purchases and sales - The entire addition made by the ld. AO and partly confirmed by the ld. CIT (A) is deleted. Assessee appeal allowed.

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• 2025 (1) TMI 99
  Assumption of jurisdiction u/s 147 - unexplained investment u/s 69 - legitimacy of additions in the re-assessment proceedings dehors the reasons recorded - AO alleged assessee has purchased certain immovable property (particulars not provided) as a co-sharer - HELD THAT:- As alleged that the investment has not been disclosed in the inquiry proceedings. The allegation of escapement was also made u/s 56(2)(vii)(b) of the Act. Another allegation of escapement arose towards under valuation of immovable property sold. AO however, while framing the assessment has made additions towards purchase of agricultural land, the payment of which was made through bank account. The aforesaid transaction is unconnected to the allegation of escapement in the reasons recorded. AO had made another additions u/s 69 towards purchase of agricultural land where the payment was made through banking channel which again is not shown to be connected to the allegations made in the reasons recorded. The stamp duty paid on the purchases made amountingis yet another addition made in the re-assessment order which again is wholly unconnected to the allegations of escapement in the reasons recorded. Thus, where the ground on which the jurisdiction under s. 147 of the Act was exercised have not been reckoned and acted upon in the re-assessment proceedings and no additions were carried out for any of such ground recorded, the AO could not make additions on an altogether different ground which did not form part of the reasons recorded by him. Revenue could not controvert the fact that the additions on the points derives its genesis from the ground taken in the reasons recorded. In the light of the settled position of law, we find strong force in the plea of the assessee for reversal of the additions made. Also potency in the plea of the assessee that reasons recorded are plagued by the vice of being vague, non-descript and unintelligible. The reasons recorded do not identify the immovable property purchased at a certain consideration. Same is the case with reference to other immovable properties referred in the reasons recorded. Mere reference of purchase of immovable property without specifying the particulars do not provide cause of action u/s 147. The issuance of reopening notice based on vague particulars is unsustainable as held in CIT vs Insecticide India Ltd [ 2013 (5) TMI 691 - DELHI HIGH COURT] - Assessee appeal allowed.

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• 2025 (1) TMI 98
  Addition u/s 69A r.w.s.115BBE - Reliance on WhatsApp chat - HELD THAT:- We find the assessee in the statement recorded u/s 131(1) on 17-06-2021 while replying to question no. 9 when the very same WhatsApp chat was confronted to him, had clearly stated that Omaxe Limited was not paying the installments and interest due to it. Accordingly, the assessee had merely stated in that WhatsApp chat that Rs 85.40 lakhs is due towards installment and since the TDS portion of Rs 30 lakhs was not deposited by Omaxe Limited, due credit for the same was not given to the assessee by the income tax department and accordingly the assessee insisted for TDS portion of Rs 30 lakhs to be deposited to the account of the Central Government. After constant follow up, the same was duly done by Omaxe Limited and due credit of TDS was indeed given to the assessee. There is no dispute that credit of TDS of Rs 30 lakhs was given to the assessee by the income tax department and hence the statement of the assessee in Question No. 9 and the reply given by the assessee vide letter dated 25-3- 2022 assumes greater importance and had to be accepted as correct because the deductor (i.e. Omaxe Limited) having paid Rs 30 lakhs to income tax department would not come forward to pay the same Rs 30 lakhs to assessee again. Hence it could be safely concluded that the alleged sum was never paid by Omaxe Limited to the assessee and the said sum was never received by the assessee from Omaxe Limited or from any other party. Accordingly the assessee cannot be held to be the owner of such money of Rs 30 lakhs and hence the provisions of section 69A of the Act per se cannot be pressed into service. Accordingly, we have no hesitation to delete the addition made in the sum of Rs 30 lakhs in the hands of the assessee. The grounds raised by the assessee in this regard are hereby allowed.

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• 2025 (1) TMI 97
  Penalty u/s 271DA as barred by limitation u/s 275(1)(c) - HELD THAT:- There is no dispute of the clinching factual position that the same had been initiated in the assessment order dated 21.12.2020 itself and consequential order herein was passed on 26th July, 2023. That being the case, it admittedly does not satisfy the clinching statutory condition of six months from the end of the month in which action for imposition of penalty is initiated . Although the department has indeed sought to get out of the rigor of the impugned limitation period, the factual position which goes unrebutted is that the impugned penalty order is very well passed beyond limitation. See TURNER GENERAL ENTERTAINMENT NETWORKS INDIA PVT. LTD. [ 2024 (11) TMI 506 - DELHI HIGH COURT] - Decided in favour of assessee.

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• 2025 (1) TMI 96
  Addition u/s 56(2)(vii)(b)(ii) - difference between the Fair Market Value and the consideration paid by the assessee for purchase of the agricultural land - HELD THAT:- As undisputed that the impugned transaction was carried out on 01.08.2012 i.e. in financial year 2012-13. Thus, in such circumstances, the provisions prior to the amendment would squarely apply and, therefore, the AO could not have legally brought this transaction within the ambit of tax. The observation of the First Appellate Authority, that the transaction was without consideration, is also incorrect, inasmuch as, it is undisputed that the assessee had parted with a sum of Rs. 6 lakhs towards consideration. We find merit in the issue raised on behalf of the assessee and, accordingly, set aside the order of the Ld. First Appellate Authority and direct the AO to delete the impugned.

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• 2025 (1) TMI 95
  Levy of surcharge @ 37% - surcharge on income including interest u/s 234F - reason given by the Addl./JCIT(A) is that the tax liability of the assessee has to be computed by maximum marginal rate and, therefore, surcharge is applicable as per section 2(29(c) - HELD THAT:- Maximum marginal rate is rate of income tax, which includes surcharge if any, applicable in relation to the highest slab of income in the case of individual/AOP/Company as specified in the Finance Act. Hence, the tax rate on surcharge is applicable on the basis of slab rate provided under the Finance Act. The tax rate and surcharge are applicable on the basis of slab rate provided under the Finance Act of the relevant year. The first schedule to the Finance Bill, 2022, which is applicable in the present case in hand, which provides for rate of income tax for the year on the persons including the HUF/AOP/Company/individual or association of persons, wherein slab rates for levy of tax of rate have been provided. The surcharge is leviable only when the amount of income tax is computed where the total income exceeds Rs. 50 lakhs. But in the case on hand, the return of income is only Rs. 1,27,095/-, so on this income, income tax shall be charged at maximum marginal rate in terms of section 164 of the Income Tax Act. For levying the surcharge, it is necessary that the slab of income, which is chargeable to tax is exceeding Rs. 50 lakhs and above. Therefore, view taken by the ld. Addl./JCIT(Appeals) is against the law and cannot be sustained. Therefore, direct AO that there could not be any surcharge levied on the income tax since income of the assessee is less than Rs. 50 lakhs. Hence, the grounds raised by the assessee are allowed.

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• 2025 (1) TMI 94
  Addition u/s 68 - bogus share transactions - share premium received by the assessee - onus to prove - HELD THAT:- As sufficient evidences were filed by the assessee with regard to establishing the identity of the investors, their credit worthiness and ultimately the genuineness of the transaction. In case of issues like investments through preferential shares, the initial onus is on the AO to allege that the transaction is somehow suspicious and for that, some independent inquiry should have been made rather than to point out shortcomings or lacunae alone in whatever evidences filed by the assessee to establish the genuineness of the transaction. It is pertinent to mention that the fact that certain share capital were received from PI Opportunities Fund-I and PI Opportunities Fund-II being SEBI registered venture capital funds. AO himself had deleted the addition and same go to show that the investors had taken a prudent call. Then Investors included Mrs. Renu Munjal of Hero Group which is the largest two-wheeler manufacturer of India, Samvardhana Motherson International Ltd. is an multinational manufacturer of automotive components with the market capitalization of over Rs. 1 crore. Makesense Technologies Ltd. is a company incorporated in 2010 which has professionals on board who include promoters of prominent recruitment portal, Naukri.com. Thus to doubt their investments in assessee company to be not genuine required, more than suspicion. Valuation of the shares - Valuation has been done by Resurgent India Ltd., a category-1 SEBI registered merchant banker and there was no effort of the Revenue authorities to cite any deficiency or discrepancy except for questioning the same on the basis of the fact that the report was prepared on the information provided by the assessee company. The law is now almost settled that the assessee s choice of method of valuation of shares and the valuation report prepared by merchant banker cannot be disturbed merely on suspicion or by pointing out lack of data. Directions of the ld.CIT(A) for making additions in regard to premium received from PI Opportunities Fund-I and PI Opportunities Fund-II on the basis that the assessee company is not a venture capital undertaking, we are inclined to accept the contentions of the ld. counsel that under the provisions of section 56(2)(viib) of the Act, the term 'venture capital undertaking' has been defined in clause (b) of the Explanation to said section as being defined in section 10(23FB). The assessee, during the relevant assessment year, was a domestic company, not listed on any stock exchange in India and engaged in the business of providing insurance related services. Thus, the assessee qualified to be a 'venture capital undertaking' in terms of the provisions of section 10(23FB), implying thereby that the provisions of section 56(2) (viib) of the Act were not applicable in the present matter qua receipt of share capital/premium from SEBI registered Venture Capital funds. Assessee appeal allowed.

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• 2025 (1) TMI 93
  Assessment u/s 153A - Addition u/s 68 - as argued addition is not based on any incriminating material and rather it is based on 3rd party investigation report - CIT(A) deleted addition - HELD THAT:- We find that CIT(A) has passed a correct order wherein, it is abundantly clear that assessment u/s. 153A of the Act and in case of 153A of the Act assessment addition has to be made on the basis of incriminating material found during search. But in this case, CIT(A) has clearly brought out that addition was not done on the basis of any incriminating material found during search. In this view of the matter, we find that CIT(A) has passed a well reasoned order, as supported by the decision of Abhisar Buildwell Pvt. Ltd [ 2023 (4) TMI 1056 - SUPREME COURT] wherein as expounded that no addition can be made when the assessment framed u/s. 153A dehors incriminating material found during the search. Decided in favour of assessee.

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• 2025 (1) TMI 92
  Disallowance u/s 40A(2)(b) - excessive payments made to related or associate concerns - HELD THAT:- We hereby quote CBDT landmark Circular 6-P dated 6.7.1968 that the purpose of the impugned statutory provision is to check evasion of tax through excessive or unreasonable payments to related or associate concerns. Cas law in Sigma Research Consulting Pvt. Ltd. [ 2019 (4) TMI 290 - DELHI HIGH COURT] as well as Indo Saudi Services (Travel) (P) Ltd. [ 2008 (8) TMI 208 - BOMBAY HIGH COURT] also settle the issue against the department that the impugned disallowance is not sustainable when both the payer and payee are assessed at the same rate in light of the foregoing circular. We accordingly delete the impugned section 40A(2)(b) disallowance in very terms. Assessee in favour of assessee.

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• 2025 (1) TMI 91
  Revision u/s 263 - validity of Reopening of assessment u/s 147 - as per AO has not made necessary enquiries and ought to have taxed the investment made by the assessee in share and securities - HELD THAT:- When the AO having recorded the reasons for reopening the assessment and having formed a belief that income of the assessee had escaped assessment, but not made any addition in the reassessment proceedings, in respect of the issue that is the subject matter of reopening. Thus the very basis of formation of belief by the AO vanishes. AO could not have framed any reassessment per se. Logically the Ld. AO ought to have dropped the reassessment proceedings instead of passing a separate reassessment order. Thus the reassessment order per se framed by the AO is not sustainable in the eyes of law. Therefore any consequential Revision proceedings thereon to revise the assessment is unsustainable in law and deserves to be quashed as held in the case of CIT Vs. Software Consultants [ 2012 (2) TMI 18 - DELHI HIGH COURT] . In the case of CIT Vs. Mohammed Juned Dadani [ 2013 (2) TMI 292 - GUJARAT HIGH COURT] wherein it was held that the ground on which reopening of assessment was based and no addition was made by the AO in the order of reassessment, he could not make additions on some other grounds which did not form part of the reasons recorded by him. Assessee appeal allowed.

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• 2025 (1) TMI 90
  Levy of penalty u/s. 271AAB - allegation of defective notice - non mentioning of clear charge/default - additional income offered pursuant to the search treated as undisclosed income - whether non-mentioning of specific limb in the penalty show cause notice for which penalty proceeding u/s. 271AAB of the Act is initiated on the assessee would become fatal to the penalty proceeding per se? - HELD THAT:- From the notices it is very clear that the Ld. AO had not mentioned the specific limb on which the penalty proceedings u/s. 271AAB is sought to be initiated by him. The ratio laid down in decision of R. Elangovan [ 2021 (4) TMI 1131 - MADRAS HIGH COURT] squarely applies to the case before us wherein held AO should point out to the assessee as to under which of the three clauses, he chooses to proceed against the assessee so as to enable the assessee to give an effective reply. Since the same has not been mentioned, the assessee has been denied reasonable opportunity to put forth their submissions.notice is absolutely vague and none of the irrelevant portions had been struck off nor the relevant portions had been marked or indicated. Hence, the Tribunal is right in observing that the penalty could not have been levied based on such defective notice and more particularly, when the assessee has been strenuously canvassing the jurisdictional issue from the inception. Decided in favour of assessee.

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• 2025 (1) TMI 89
  Rectification of mistake - treatment of fertilizer subsidy as capital receipts - The assessee filed rectification application after relying on the decision of Hon ble Supreme Court regarding allowability of subsidy as capital receipt - AO has rejected the application filed by the assessee u/s 154 - CIT(A) held that the fertilizer subsidy received by the assessee in terms of the NBS policy during the year under consideration is not an income and same was treated as capital receipt not chargeable to tax. HELD THAT:- Identical issue on similar fact in the case of the assessee for A.Y. 2015-16 has been adjudicated by the [ 2021 (8) TMI 982 - ITAT MUMBAI] in favour of the assessee as held that the scheme was mainly to attract the investment in the industry and the purpose test is that the attraction of new players in the industry and also attracts the existing players to bring new investment. How the benefit of scheme is passed on to the industry matters. Sometime, Govt. introduces direct concession in the investments or introduces mechanism in relation to the ultimate achievement of the objects of the scheme. In this scheme, the ultimate object is to make available the required fertilizers and at appropriate price to the farmers, this can be achieved only by bringing new investments in the industry. This is a recurring issue in the case of the assessee which has already been adjudicated by the ITAT in favour of the assessee as discussed supra in this order therefore following the decision of the ITAT and other judicial findings as elaborated in the findings of ld. CIT(A) we do not find any merit in this appeal of the revenue therefore the same stand dismissed.

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• Customs

• 2025 (1) TMI 88
  Revocation of customs broker license - forefeiture of security deposit - levy of penalty - submission of forged graduation degree, at the time of applying for grant of the license, had submitted a forged graduation degree. Raj Kumar was, accordingly, asked to submit attested copy of the graduation degree and Raj Kumar did submit a self-attested copy of the graduation degree. Forged degree or not - HELD THAT:- On a complaint received by the department, a query was made by the department from the Chaudhary Charan Singh University, Meerut regarding the genuineness of the graduate degree which the appellant had submitted to the department at the time of seeking appointment as a Customs Broker. The University, in no uncertain terms, informed the department that the details given in the graduate degree were not as per the University enrollment records or the confidential records. At the instance of the appellant the University again sought confirmation of the earlier report sent by the University and the University again informed the department that the earlier information given by the University was correct. The appellant has not produced any document from the University to substantiate that the graduate degrees submitted by the appellant is a genuine degree and only a bald assertion has been made by the appellant that the graduate degree submitted by the appellant is not forged. The finding recorded by the Commissioner that the graduate degree submitted by the appellant is a forged degree, therefore, does not suffer from any infirmity. Effect of such a forged graduate degree on the Customs Broker License issued to the appellant - HELD THAT:- Once it is found that the graduation degree obtained by the appellant is a forged degree, the appellant clearly did not satisfy the essential requirement contained in clause 5(f) of the 2013 Regulations for appointment as a Customs Broker. The 2018 Regulations came into effect from 14.05.2018. When the complaint was received by the department against the appellant regarding the graduation degree, the 2018 Regulations had come into force. These Regulations supersede the 2013 Regulations, except as respect things done or omitted to be done before such supersession. Under regulation 1(3) of the 2018 Regulations, the 2018 Regulations shall apply to a Customs Broker who had been licensed either under the 2018 Regulations or under the earlier 2013 Regulations. Regulation 14 of the 2018 Regulations deals with revocation of license. It is in accordance with regulation 17 of the 2018 Regulations that a show cause notice was issued to the appellant and action was taken after the appellant was provided adequate opportunity by the enquiry officer and after the appellant was provided an opportunity to submit comments to the report submitted by the enquiry officer. Whether an applicant who had submitted a forged graduation degree, which degree is an essential requirement for appointment as a Customs Broker, can be permitted to continue as a Customs Broker? - HELD THAT:- In M/S INDIAN OIL CORPORATION LTD. VERSUS SHRI RAJENDRA D. HARMALKAR [ 2022 (4) TMI 1423 - SUPREME COURT] the Supreme Court observed that an employee who has produced a fake and forged mark sheet at the initial stage of appointment cannot be trusted by the employer. A person who has a submitted a forged graduation degree to seek appointment as a Customs Broker, therefore, should not be permitted to work as a Customs Broker - Fraud is an act of deliberate deception with a design to secure something, which is otherwise not due. The expression fraud involves two elements, deceit and injury to the person deceived. It is a cheating intended to get an advantage. Dishonesty should not be permitted to bear the fruit and benefit to the persons who played fraud or made misrepresentation and in such circumstances Courts should not perpetuate the fraud. In UNITED INDIA INSURANCE CO. LTD VERSUS RAJENDRA SINGH ORS, [ 2000 (3) TMI 1077 - SUPREME COURT] , the Supreme Court again observed that fraud and justice never dwell together (fraus et jus nunquam cohabitant) and it is a pristine maxim which has never lost its temper over all these centuries. Conclusion - The inevitable conclusion, therefore, that follows from the aforesaid discussion and the decisions is that the appellant who had been granted a Customs Broker License on the basis of a forged graduation degree cannot be permitted to continue to work as a Customs Broker - The submission of the learned counsel for the appellant that action could have been taken only under the 2013 Regulations and not under the 2018 Regulations cannot also be accepted. There is, therefore, no infirmity in the order dated 01.07.2020 passed by the Commissioner revoking the Customs Broker License of the appellant and forfeiture of the security deposit and also imposing penalty of Rs. 50,000/- on the appellant - appeal dismissed.

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• 2025 (1) TMI 87
  Interest on delayed refund of the Anti-Dumping Duty (ADD) deposited during the investigation - determination of interest on delayed refund as per Section 27 and 27A of the Customs Act, 1962 - time limitation - principles of unjust enrichment - HELD THAT:- It is settled position in law that interest on any amount deposited arises on two accounts either as contractual liability or as statutory liability (prescribed by the statute). Appellant has not shown anything by which it can be shown that the interest being claimed by them is in terms of any contract entered between them and the DRI or the Customs Department. The interest being claimed has arisen as a result of the provisions of statute. As per the appellants own submissions in the appeal filed by the appellant, the amount claimed as refund has been deposited by them during the 2011. Even if the claim of the appellant is accepted that the amount deposited by them should be treated as deposit or as revenue deposit , then alos the interest provisions as provided by Section 129EE of the Customs Act, 1962 as it existed on the dated of deposit shall be applicable. It is settled principle in law that when the statute prescribes a manner of performance of an act then that is only method of performance all other methods are necessary barred. When the statute prescribed manner of computation of interest on the said deposits, then that would be only available method and all other methods are necessary barred - Admittedly all the amounts claimed as refunds were deposited in the year 2011 much prior to 06.08.2014 and hence the interest could not have been granted in terms of this section from the date of deposit. It is also settled principle in law that tribunal being creature of statute cannot go beyond the provisions of the statute. Any order which has taken contrary view is beyond the jurisdiction vested in tribunal and hence should be treated as nullity. The case of Parle Agro [ 2021 (5) TMI 870 - CESTAT ALLAHABAD] relied upon by the appellant was in respect of deposit made on 01.12.2005. Section 129EE was inserted in the Customs Act, 1962 by Section 73 of the Finance Act, 208 (Act 18 of 2008). Prior to insertion of this section there was no specific provision in respect of interest o n the deposits made, and sought to be refunded as per the decisions of the appellate authority. Nearly all the decisions referred to by the appellant are in respect of the deposits made prior to this insertion, hence are distinguishable. Reliance placed in the case of JINDAL PIPES LTD VERSUS COMMISSIONER, CGST, NOIDA [ 2024 (12) TMI 1448 - CESTAT ALLAHABAD] where it was held that 'Interest would be paid from the date of deposit made.' Conclusion - The interest on the refund is payable from the date of filing the refund application, not from the date of deposit. There are no merits in the appeal - appeal dismissed.

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• 2025 (1) TMI 86
  Denial of request for amendment of the Bill of Entry under Section 149 of the Customs Act, 1962 - benefit of exemption in terms of Doctrine of Substantial Compliance - HELD THAT:- The respondent have undisputedly made an application for getting the duty exemption certificate to the concern ministry well in advance from the date of importation, it was only for the reason of non-receipt of the duty exemption certificate and to avoid any further demurrage charges, they cleared the goods on the basis of self assessment for payment of duty. The respondent had taken all the necessary steps to obtain the said certificate well in advance which was being delayed in the concern ministry even the submission of that application and receipt thereof can be considered as a valid document for the purpose of allowing the benefit of exemption in terms of Doctrine of Substantial Compliance. Amendment as requested for in terms Section 149 of the Customs Act, 1962 should have been allowed. That is what Commissioner (Appeals) have also observed. Section 149 of the Act is wide enough for taking care of such exigencies, hence, denial of such amendment for the reason as stated in the appeal cannot be upheld and consequently the appeal filed by the revenue lacks merit. Appeal dismissed.

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• 2025 (1) TMI 85
  Mis-declaration of imported goods - enhancement of value - Chartered Engineer without making any inquiry, adopted the domestic market value of the imported goods - HELD THAT:- The present case arises out of examination and seizure of the imported goods pertaining to 18 import consignments. We find that M/s Skyblue International Trading Company have imported total 5 import consignment which were examined by the officers of DRI and during examination of the goods mis-declaration were observed in respect of value, quantity and other material particulars. The Ld. Commissioner in impugned order held that the declared value in respect to the containers is liable to be rejected under Rule 12 of the CVR, 2007 and to be re-determined under Section 14 of the Customs Act, 1962 readwith Rule 9 of the CVR, 2007. The report of the Chartered Engineer merits to be considered as the basis for arriving at assessable value of impugned goods. The Ld. Commissioner relied upon the Chartered Engineer reports and enhanced the value in terms of Rule 9 of the Customs Valuation Rules. The Chartered Engineer completely failed to provide the justification as to what was the difference in the quality imported by the Appellant vis-a-vis the quality of goods which had been examined for arriving at the assessable value. The Chartered Engineer also failed to provide the details with respect to who were the suppliers / manufacturers for the goods which were examined against the imported goods to arrive the conclusion that the disputed goods are undervalued. Also, what were the differences with respect to the specification and characteristics of the goods making it differentiable with respect to the imported goods. It is also not provided what quality parameters were examined so as to differentiate the two products. In the present case, the IEC holder lent the IEC to Mr. Asif Sathi who carried the imported goods to his godown/warehouse located at Mumbai. In such circumstances, merely no business activities were noticed at the time of investigation would not lead to alleged smuggling of goods. In this context we also find that there is no provision under the Customs Act, 1962 which prohibits the use of IEC of third party who is holding valid IEC Number. In view of the above, the Appellant cannot be made liable for the alleged imports made in the name of IEC holders. Penalties u/s 112, 114A and 114AA of the Customs Act, 1962 - HELD THAT:- There is no reason whatsoever to impose penalties on the three Appellants, accordingly penalties imposed on the said appellants are liable to be set aside. Conclusion - i) The Chartered Engineer s certificate and value of the subject imported goods worked out on the basis of said certificate are hereby rejected. ii) The value of subject imported goods shall be assessed on the basis of contemporaneous import/NIDB data after providing the details/ documents to the appellants. Only in cases where contemporaneous value based on NIDB is not available, the value shall be determined as per Valuation Rules sequentially and by deductive method on the price and the details/ documents of such price shall be first provided to the appellant. iii) The issue of penalty and the redemption fine in the matter being remanded is kept open. Appeal disposed off.

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• 2025 (1) TMI 84
  100% EOU - request for conversion of shipping bills from EOU to DEPB and drawback scheme - rejection of request for conversion on the ground that when the export has taken place under shipping bill mentioning EOU, the final de-bonding was not completed, the final de-bonding was completed only on 21.01.2010 - Applicability of Section 149 of the Customs Act, 1962 - Learned Commissioner while rejecting request for conversion neither issued any show cause notice nor granted any personal hearing - violation of principles of natural justice. Violation of principles of natural justice - HELD THAT:- The decision taken for rejecting the conversion from EOU shipping bill to DBK/DEPB shipping bill is absolutely in gross violation of natural justice. Therefore the said decision is liable to be set aside on this ground alone. However, this Tribunal being a final fact finding authority considered the fact of the present case and it is found that there is no dispute that the appellant have been paying duty on all their clearances after debonding and also paid the duty on the closing stock, therefore all the goods cleared for export suffered the duty on the inputs raw material in process material therefore the appellant were clearly eligible for conversion of shipping bill from EOU to DBK/DEPB scheme. There is no fault on the part of the appellant in filling the EOU shipping bill for the reason that though the appellant had discharged all the duties and started paying duty for the subsequent clearances but since they were not given the final NOC, they could not have filed DBK/DEPB shipping bill. Therefore in these circumstances there are no reason for denying the conversion of EOU shipping bill to DBK/DEPB shipping bill. Applicability of Section 149 of the Customs Act, 1962 - HELD THAT:- From the section 149, it is clear that the only condition to be fulfilled for conversion is that at the time of export the documentary evidence should be existed on the basis of which the conversion can be made. In the present case there is no dispute that the export of the goods have been made out of duty paid inputs and the EOU shipping bill was filed for want of final NOC. Therefore in this case the appellant s case is clearly covered by Section 149 of the Customs Act, 1962. Thus, the appellant is legally entitled for conversion of EOU shipping bill to DBK/DEPB shipping bill. Conclusion - i) The decision taken for rejecting the conversion from EOU shipping bill to DBK/DEPB shipping bill is absolutely in gross violation of natural justice. ii) In the present case there is no dispute that the export of the goods have been made out of duty paid inputs and the EOU shipping bill was filed for want of final NOC. Therefore in this case the appellant s case is clearly covered by Section 149 of the Customs Act, 1962. The decision of the Commissioner rejecting the conversion of EOU shipping bill to DBK/DEPB shipping bill is set aside - Appeal allowed.

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• 2025 (1) TMI 83
  Condonation of delay in filing of appeal - time limitation - HELD THAT:- Undisputedly, the normal period of limitation for filing appeal before Commissioner (Appeals) was till 24.02.2020 and appellant have filed the appeal alongwith the application for condoning of delay beyond the normal period as prescribed in law. Commissioner (Appeals) after examining the grounds stated in the condonation of delay application he could have condoned the delay of only 30 days. As per the decision by Hon ble Supreme Court in IN RE : COGNIZANCE FOR EXTENSION OF LIMITATION [ 2020 (5) TMI 418 - SC ORDER] , after taking note of pandemic condition prevailing in the country during the period starting from 15.03.2020 has provided that the appeals should have been allowed to be filed even if the period of limitation would have expired. After that date the period of limitation available to the appellant alongwith the application of condonation of delay would have expired on 27.03.2020. It is observed by Hon ble Supreme Court, do not makes any distinction between the appeal to be filed within the normal period of limitation or to be filed alongwith the condonation of delay. During the period of pandemic, it was expected that liberal views should have been taken and appeal to be considered on merits as in the light of decision by Hon ble Supreme Court. Conclusion - The period of limitation expired on 24.02.2020, and the delay in filing the appeal was much beyond the period of 30 days. The appeal is time barred. Appeals are allowed by way of remand to Commissioner (Appeals).

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• Insolvency & Bankruptcy

• 2025 (1) TMI 82
  Maintainability of petition - availability of alternative remedy - Money Laundering - territorial jurisdiction of Rajasthan High Court to entertain the writ petition challenging the order of the NCLT, Mumbai - jurisdiction of NCLT, Mumbai to vacate the attachment orders issued by the Enforcement Directorate (ED) under the PMLA, 2002 - vacation of attachment order in exercise of powers under Section 238 of the IB Code read with Rule 11 of the NCLT Rules - petitioner was not made party in the proceedings before the NCLT, Mumbai - violation of principles of natural justice. Violation of principles of natural justice - HELD THAT:- The order dated 27.09.2023 was passed by the High Court of Bombay after hearing and in presence of the counsel for ED but no such argument, which was raised herein as referred in the stay order dated 06.07.2023 was made by the counsel for ED, rather even after dismissal of the writ petition with aforesaid observations, the order dated 27.09.2023 was not put to challenge by the ED in any manner. It is not worthy that the SLPs preferred against the judgment and order dated 27.09.2023 have also been dismissed by the Hon'ble Supreme Court in NARESH SUNDARLAL JAIN VERSUS UDAIPUR ENTERTAINMENT WORLD PRIVATE LIMITED ANR. [ 2023 (10) TMI 1478 - SC ORDER] . Further, a perusal of stay order dated 06.07.2023 also reveals that counsel for petitioner strongly raised another point that the petitioner was not impleaded as party in the CIRP before the NCLT, Mumbai and the order dated 24.02.2022 has been passed by the NCLT, Mumbai behind back of the petitioner, which suffers from blatant violation of the principles of natural justice. In respect of such plea of petitioner, for violation of principles of natural justice, this Court, having considered the rival contentions of counsel for both sides and gone through the undisputed documents on record, prima facie, finds that the petitioner was well aware about the pending proceedings before the NCLT, Mumbai under the IB Code - It is noteworthy that the ED also replied one letter and e-mail dated 22.06.2021, through its reply letter dated 25.06.2021 to the resolution professional. Thus, such material on record explicitly reflects that the petitioner cannot make out a case to the effect that petitioner was not aware about proceedings pending before the NCLT, Mumbai, at the instance of respondents under the IB Code and further, this factual aspect has also not been disputed by the counsel appearing for and on behalf of petitioner. Thus, prima facie, it appears that the petitioner cannot take resort of the violation of principles of natural justice and cannot plead unawareness to the proceedings before the NCLT, Mumbai and the order dated 24.02.2022 passed therein. Therefore, this Court is prima facie of the opinion that in such view of the undisputed factual matrix, the petitioner cannot be allowed to take a pretext of non-imleading him as party before the NCLT, Mumbai, rather it is a case where petitioner, knowingly and deliberately, himself did not opt to intervene in the matter and CIRP pending before the NCLT, Mumbai. Maintainability of petition - availability of alternative remedy - HELD THAT:- The petitioner was well aware of the proceedings and the order dated 24.02.2022 passed by the NCLT, Mumbai, yet he did not avail the statutory remedy of filing of appeal against the order dated 24.02.2022 before the NCLAT, Delhi within prescribed period of 45 days (30+15 days), which was available to the petitioner under Section 32 read with Section 61 of the IB Code, 2016. Hence, after losing the available statutory remedy, petitioner has invoked the writ jurisdiction of the High Court by filing the writ petition on 10.03.2023, which has been filed after a delay of about one year from passing of the impugned order dated 24.02.2022 by NCLT. From this angle also, petitioner has no prima facie case to sustain the stay order dated 06.07.2023 and same deserves to be vacated. Power and jurisdiction of the NCLT, to vacate the attachment orders issued by the ED - HELD THAT:- This Court refraining itself to give any findings on such legal issue, at this stage, which may affect merits of the writ petition. However, such legal issue shall be considered and decided whenever the occasion comes to hear the writ petition on merits. Similar is in respect of all other contentions, made by the respective counsels for parties, which also touch to the maintainability and merits of the writ petition, hence, same shall be considered at the time of final hearing of the writ petition. Conclusion - i) The petitioner cannot take resort of the violation of principles of natural justice and cannot plead unawareness to the proceedings before the NCLT, Mumbai and the order dated 24.02.2022 passed therein - ii) The stay order was vacated, and the court directed the petitioner to address the jurisdictional issue and consider converting the writ petition under Article 226 of the Constitution. In the opinion of this Court, stay order dated 06.07.2023 is liable to be vacated and hence, as a final conclusion, the stay order is hereby vacated. The application filed by the respondents under Article 226(3) of the Constitution of India stands allowed and consequentially the stay application of petitioner is hereby dismissed.

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• 2025 (1) TMI 81
  Non-admission of the claim by the Resolution Professional - direction to IRP to get the Resolution Plan modified so as to comply with Regulation 42 and 44 of the Liquidation Process Regulations, 2016 - deduction of amount from the final payment to be made to Applicant as per the scheme of distribution of amount under Resolution Plan - direction to Respondent Resolution Professional to further include amounts towards LC payments and towards Bank Guarantee (BG) payments in the total admitted claim of Applicant - HELD THAT:- The Resolution Plan came to be approved by the CoC with vote share of 70.07%. The appellant has voting share of 6.64% and Appellant voted against the Resolution Plan and thus, was a dissenting financial creditor. The Resolution Plan which is approved in commercial wisdom of the CoC binds all stakeholders including the dissenting financial creditor. The commercial wisdom of the CoC approving the Resolution Plan is binding on all, which is law laid down by the Hon ble Supreme Court in K. Sashidhar vs. Indian Overseas Bank Ors. [ 2019 (2) TMI 1043 - SUPREME COURT ] and the Hon ble Supreme Court decision in Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta and Ors. [ 2019 (11) TMI 731 - SUPREME COURT ] where it was held that ' The NCLAT judgment which substitutes its wisdom for the commercial wisdom of the Committee of Creditors and which also directs the admission of a number of claims which was done by the resolution applicant, without prejudice to its right to appeal against the aforesaid judgment, must therefore be set aside.' One of the subject on which CoC is to approve a Resolution Plan is the manner of distribution proposed . As noted above, the manner of distribution which was approved by the CoC in 31st CoC meeting contained an approval of deduction of Rs.33.34 Crores from payout of the Appellant. Appellant-Financial Creditor by IA No.222 of 2020 had challenged in effect the decision of the CoC taken in 31st CoC meeting held on 07.02.2020 approving the distribution and opting for second option i.e. deduction of Rs.34 Crores from payout of the Appellant. Appellant- Dissenting Financial Creditor is fully bound by the decision of the CoC and cannot be allowed to challenge the same - It is relevant to notice that by order of the same date 09.07.2020 when IA No.222 of 2020 was decided Resolution Plan was also approved. Conclusion - No grounds have been made out to interfere with the order passed by the Adjudicating Authority - The CoC's decision to deduct Rs.34 Crores from the Appellant's payout was deemed valid, based on its commercial wisdom and the binding nature of the Resolution Plan. The Appellant, as a dissenting financial creditor, was bound by the CoC's decision, and no grounds were found to interfere with the adjudicating authority's order. Appeal dismissed.

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• PMLA

• 2025 (1) TMI 80
  Seeking issuance of ex-parte ad-interim order directing the Respondents not to access and copy the contents of Mobile phone of the Applicant No. 2 - issuance of ex-parte ad-interim order staying the effect and operation of summons under Section 50 of the PMLA issued to the Applicant No.2 and the summons - HELD THAT:- Issue notice on the application seeking interim relief, returnable on 17th February, 2025.

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• Service Tax

• 2025 (1) TMI 79
  Rejection of the application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) - grievance of the respondent before the learned Single Judge was that, it was ready and willing to pay the amount as notified by the appellants in Form No. 2 for availing the benefit of the SVLDR scheme. HELD THAT:- The learned Single Judge has in the impugned order given a finding that the impugned communication dated 30.01.2020 is contrary to the circular dated 12.12.2019 which is issued regarding the applicability and maintainability of the scheme. In fact, the learned counsel for the appellants would concede to the fact that, the circular dated 12.12.2019 do not contemplate a situation wherein the audit having been carried out before 30.06.2019, an action can be taken after that date, more so when the appellants have issued Form No. 2 and the respondent submitted Form 2A - the appellants concede that, the Form No. 2 which was issued to the respondent has not been withdrawn. Conclusion - The timelines granted by the learned Single Judge are extended by 15 days, 4 weeks and 2 weeks respectively from the date of receipt of a certified copy of this order. Appeal dismissed.

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• 2025 (1) TMI 78
  Quantification of education cess and secondary higher education cess - to be calculated on the gross service tax amount or the net service tax amount after deducting the R D cess exemption? - computation on best judgment basis - invocation of extended period of limitation - HELD THAT:- It is found that in the Appellant s own case for the subsequent period pertaining to financial year 2014-15 and 2015-16 involving the identical issue as involved in the present case, the Commissioner vide Order-in-Original No. 08/ST/COMMR/VMJ/RTK/2017-18 dated 29.12.2017 has allowed the benefit in favour of the Appellant and the department has accepted the said order and has not filed any appeal against the same. Since the department has accepted the order of the Commissioner dated 29.12.2017, which has now attained finality and the present proceedings have also arisen on the basis of same audit, therefore, it is held that the issue is squarely covered in favour of the Appellant. Further, the Appellant had rightly paid the education cess and secondary higher education cess on the amount of net service tax i.e. service tax after deducting the amount of R D cess i.e. exempted amount. Conclusion - The appellant had rightly paid the education cess and secondary higher education cess on the amount of net service tax i.e. service tax after deducting the amount of R D cess i.e. exempted amount. The impugned order is not sustainable in law - Appeal allowed.

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• 2025 (1) TMI 77
  Liability of appellant to pay service tax - appellant is a car dealer collecting handling charges in their sale bill of selling of car to individual customer - HELD THAT:- In the facts of the present case there is no dispute that the handling charges is shown in the sale bill of the car and on the total elements that is sale price of the car, handling charges and other charges, the appellant have calculated the VAT at the rate of 12.5%+2.5% and the total bill value was collected from the customer of the car, Therefore the total bill value is a sale value of the car and the handling charges is part of the sale price on which the VAT has been paid. Therefore the handling charges being the part of the sale price the same again cannot be subject to levy of service tax. From the decision in JIVAN JYOT MOTORS PVT LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST, SURAT [ 2023 (7) TMI 1178 - CESTAT AHMEDABAD] it can be seen that the issue in hand is squarely covered by the decision. Therefore the handling charges is not liable to service tax. In the present case there is no dispute from the VAT department that the handling charges whether is liable to VAT or otherwise. Since the appellant has charged the VAT on handling charges and the same attained finality as there is no record whether the charging of VAT is incorrect the handling charges in the fact of the present case cannot be charged to service tax. Conclusion - The handling charges included in the sale invoice of the car, on which VAT was paid, are not liable for service tax. The impugned order is set aside. Appeal is allowed.

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• 2025 (1) TMI 76
  Levy of service tax - Export of Services or not - services provided by the appellant to its group companies situated outside India - whether the foreign establishment who is the service recipient is the establishment of the appellant or it is separate? - HELD THAT:- The adjudicating authority has not properly understood that the appellant and the service recipient are whether separate entity referring to item b of explanation 3 of Clause 44 of Section 65B of the Finance Act, 1994, therefore the entire matter needs a reconsideration in the light of the judgments in the identical facts. The issue involved in the present case is squarely covered by the decision in the case of CELTIC SYSTEMS PRIVATE LIMITED VERSUS C.C.E. S.T. -VADODARA-I [ 2022 (6) TMI 306 - CESTAT AHMEDABAD] where it was held that ' it is clear that in the present case the appellant and the service recipient are two distinct person, hence, the service provided by the appellant to M/s. Celtic Cross Holding Inc. USA clearly falls under export of service.' Conclusion - The adjudicating authority has not properly understood that the appellant and the service recipient are whether separate entity referring to item b of explanation 3 of Clause 44 of Section 65B of the Finance Act, 1994 and the matter needs remand. Matter remanded to the adjudicating authority for passing a fresh order.

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• 2025 (1) TMI 75
  Classification of service - Erection, Commissioning and Installation service or Commercial or Industrial Construction service - abatement claim rejected on the ground that the appellant has not included the value of free supply material in the taxable value - revenue neutrality. HELD THAT:- Iit is an admitted fact that the major portion of the demand is confirmed under the category of 'Commercial or Industrial Construction' Services. Further, lying of long-distance gas pipeline can only be considered as a 'Works Contract service'. Moreover, abatement was denied by the original authority on the ground that some of the goods are supplied by the main contractor. The issue of inclusion of the value of free supply material in the taxable value is covered in the case of COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [ 2018 (2) TMI 1325 - SUPREME COURT] - in this case the period involved is 01.06.2005 to 30.09.2006. As per the judgment of the Hon ble Supreme Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] , the activity of the appellant can be considered only as a works contract since it involved supply of goods and services and prior to 01.06.2007 the activity is not taxable under the category of 'Commercial or Industrial Construction Service'. Conclusion - The activity is not taxable under the category of 'Commercial or Industrial Construction Service' prior to 01.06.2007 as the activity involved supply of goods and services.

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• 2025 (1) TMI 74
  Classification of service - Online Information Data and Access Retrieval (OIDAR) Service or not - refund claims under Rule 5 of the CENVAT Credit Rules, 2004 - export of services or not - HELD THAT:- As per the agreement, foreign entity provides raw data to the Appellant in form of manuscripts, articles, photographs and other content required for carrying out the various activities by the Appellant such as copyediting, typesetting, formatting, proofreading, graphic designing, indexing, coding, etc. by using human skill and labour on such data and sends the same in electronic form through internet for access by foreign entity. In this whole process, the ownership of the data vests solely with the foreign entity and is not transferred to the Appellant. The services provided by the appellant do not qualify as OIDAR services as per the above definition. As per the provisions of the said services, appellants are not owing or providing any data through the network of computers to anybody, their services do not fall under the category of OIDAR Services. A basic requirement for classification under the said category that services should have been in respect of the data owned by the person by way of providing access and retrieval of the same to some other person. Nothing has been brought on record to show that appellants have provided any of such services. Just for the reason that appellants have got themselves registered under this category, cannot be a reason for holding that the services provided by the appellants fall under this category. The services provided by the appellants do not fall under the category of OIDAR Services, there are no merits for denial of the refund claims filed by the appellants under Rule 5 of Cenvat Credit Rules read with Notification No.27/2012-ST dated 18.06.2012. Conclusion - The classification of services must be based on the nature of the services provided, not merely on registration categories. Export of services is determined by the location of the service recipient and the nature of the transaction. The services provided by the appellants are not OIDAR services. The appellants are entitled to a refund under Rule 5 of the Cenvat Credit Rules as the services qualify as exports. Appeal allowed.

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• 2025 (1) TMI 73
  Classification of services - Appellant undertook activities of advertisement and sale promotion of concentrate/flavor belonging to Coca Cola India Pvt. Ltd. and received support price in consideration - Business Auxiliary Service or not - scope of SCN - extended period of limitation. Whether the Respondent was right in extending the scope of the show cause notice by way of confirming the disputed demand under Business Auxiliary Service when evidentially the show cause notice has not demanded the Service Tax under any particular service head? - HELD THAT:- Reliance is placed in the case of SYNIVERSE MOBILE SOLUTIONS PVT LTD., (EARLIER TRANSCIBERNET INDIA PVT LTD.) VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX, HYDERABAD IV [ 2023 (6) TMI 463 - CESTAT HYDERABAD ], wherein it has been held it is essential for the show cause notice issuing authority to clearly indicate the sub-clause under which the service tax in question would fall. It is a settled principle of law that the Adjudicating Authority cannot go beyond the scope of SCN which has been laid down by the Hon'ble Supreme Court, inter alia, in cases of COMMISSIONER OF CUSTOMS, MUMBAI VERSUS TOYO ENGINEERING INDIA LIMITED [ 2006 (8) TMI 184 - SUPREME COURT ], COMMISSIONER OF CENTRAL EXCISE, NAGPUR VERSUS M/S BALLARPUR INDUSTRIES LTD [ 2007 (8) TMI 10 - SUPREME COURT ] it has been held that the SCN is the foundation of the case against the assesse and it is not open for the Adjudicating Authority to confirm the demand by travelling beyond the scope of the SCN. Therefore, in the light of the above, the Impugned Order is liable to be set aside. Whether there is any element of service, particularly in the nature of Business Auxiliary Services as defined under Section 65(19) of the Finance Act, 1994, involved in receipt of reimbursement amount received from M/s. Coca Cola India Pvt Ltd for joint promotional activities conducted by the Appellant on cost sharing basis with CCIPL, with an objective of promotion of sale of beverages manufactured by the Appellant? - HELD THAT:- The Appellant has undertaken promotion, marketing of their final product i.e. beverage and not that of concentrates (i.e. industrial input), therefore, the conditions specified in clause (i) of Section 64 (19) of the Act are not fulfilled. Accordingly, the demand in the present case is liable to be set aside - Appellant has not provided any Business Auxiliary Services to the CCIPL as per the provision of law, therefore, the Adjudicating authority has completely erred in invoking the Section 65(19)(i) in the instant case. Whether the Respondent is right in confirming the demand on the extended period of limitation? - HELD THAT:- The onus to prove that Appellant has deliberately suppressed the facts from the Department and that such suppression was with intent to evade payment of duty is on the Department. However, in the impugned SCN, the Respondent has neither put forth any averment nor has produced any documentary evidence for establishing the suppression and mala fide intent on part of the Appellant. Therefore, the question of invocation of extended period of limitation does not arise at all. In the identical case of Commissioner of Central Excise ST., Lucknow vs. M/s. Brindavan Bottlers Limited [ 2019 (3) TMI 1428 - CESTAT ALLAHABAD] , the Tribunal held that there is no element of service in expenses for achieving the sales target, incentive or advertisement and publicity expenses reimbursed to the Appellant by the Coca-Cola Company Ltd. There is no element of service, and the Appellant therein is not providing any service to Coca Cola Company Ltd and the Appellant therein and Coca Cola are working on a principal-to-principal basis. Reliance placed in SMV Beverages Private Limited vs. Commissioner of Central Excise, Nagpur [ 2017 (3) TMI 942 - CESTAT MUMBAI] wherein in the identical set of facts the Tribunal has held that when the concentrate is sold on payment of excise duty to the main appellant, which would indicate that once the sale takes place, the concentrate does not remain the property of PFL. Conclusion - i) It is a settled principle of law that the Adjudicating Authority cannot go beyond the scope of SCN. ii) Appellant has not provided any Business Auxiliary Services to the CCIPL as per the provision of law. iii) in the impugned SCN, the Respondent has neither put forth any averment nor has produced any documentary evidence for establishing the suppression and mala fide intent on part of the Appellant. Therefore, the question of invocation of extended period of limitation does not arise at all. The impugned order cannot be sustained - appeal allowed.

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• 2025 (1) TMI 72
  Refund of the accumulated CENVAT credit under Rule 5 of the Cenvat Credit Rules 2004 - It was alleged that the credit was not admissible because the services on which credit was taken were not falling under the definition of Input Service - HELD THAT:- Since no SCN has been issued previously disputing the taking of Cenvat credit itself, the same cannot be disputed at the stage when the Appellant has filed refund applications under Rule 5 of Credit Rules. As the credit has not been denied under Rule 14, therefore the same is available to the Appellant and a refund of the same is to be allowed under Rule 5 of the Credit Rules. Even as per Rule 5 and Notification No. 27/2004, the requirement was to ascertain whether services were exported and whether the balance of CENVAT Credit as claimed is available with the assessee or not. It was not the requirement to ascertain the correctness of admissibility of CENVAT Credit at the stage of refund proceedings. The reasons based on which the Department filed the appeal before the Commissioner (Appeals) were not legally tenable and justified. The provisions of Rule 5 or the Notification No. 27/2012 do not require one-to-one correlation of the input services with the output services exported by the Appellant. The foreign service provider was not an Assessee under the Finance Act, 1994 and documents were not issued in terms of Section 4A of the Act. However, the Appellant being an Assessee in India, paid the service tax on reverse charge basis under the appropriate service classification and such payment was accepted by the department. Further, the absence of invoices in terms of Rule 4A of the Service Tax Rules does not disentitle the Appellant to claim refund of the CENVAT Credit as the service providers were not bound to issue such invoices. Conclusion - The admissibility of CENVAT Credit cannot be disputed at the refund stage without prior denial under Rule 14. There is no requirement for one-to-one correlation between input and exported services for refunds under Rule 5. The absence of Rule 4A invoices does not bar refund claims if service tax is paid on a reverse charge basis. Appeal allowed.

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• 2025 (1) TMI 71
  Eligibility of cenvat credit can be questioned at the stage of refund without issuing a Show Cause Notice (SCN) under Rule 14 of the CENVAT Credit Rules, 2004? - CENVAT Credit - input services - jurisdiction to deny CENVAT credit at the refund stage without prior proceedings under Rule 14. HELD THAT:- In the absence of any proceedings under Rule 14 of the CENVAT Credit Rules, 2014 observations recorded by the Assistant Commissioner are only in the nature of observations and cannot be taken as denial of CENVAT Credit. Even the Assistant Commissioner has nowhere said so. The Tribunal in the case of MICROSOFT GLOBAL SERVICES CENTER (INDIA) PRIVATE LIMITED AND MICROSOFT INDIA (R D) PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX HYDERABAD-IV [ 2020 (10) TMI 57 - CESTAT HYDERABAD] held ' In the present case, it is an undisputed fact on record that the department had not proceeded against the appellant for effecting recovery of the allegedly availed irregular Cenvat credit, by taking recourse to Rule 14 ibid read with Section 73 ibid. On the other hand, the department had raised the issue of non-establishment of nexus between the input services and exported output service for the first time, while adjudicating the subject refund claims filed under Rule 5 ibid by the appellant.' Further the Respondent-Assessee filed the appeal before the Commissioner (Appeals) not against the order of the Assistant Commissioner but against the observations made in discussion and findings of the Order. Learned Commissioner (Appeals) multiplied these findings without any change in the order portion which in any case was in accordance with the claim filed by the Respondent-Assessee. Conclusion - The department had not proceeded against the appellant for effecting recovery of the allegedly availed irregular Cenvat credit, by taking recourse to Rule 14 ibid read with Section 73 ibid. Appeal of Revenue dismissed.

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• 2025 (1) TMI 70
  Time limitation - revenue neutrality - levy of service tax under reverese charge mechanism - services provided by foreign service providers to the Appellant, which were performed outside India - royalty payments for technical know-how - Intellectual Property Right services or not - levy of penalty. HELD THAT:- The appellant had a bona fide belief that since the services are provided outside India and received outside India the service being performed in non taxable territories the same is not taxable. There are force in the appellant's bona fide belief. Moreover, if at all, the service tax is payable the appellant would have been eligible to take Cenvat credit of service tax. Therefore, on this ground alone, the extended period cannot be invoked as due to revenue neutrality there cannot be any intention to evade payment of service tax. This view is supported by the Tribunal s decision in the case of EMERSON PROCESS MANAGEMENT I PVT. LTD VERSUS C.C.E. S.T. -DAMAN [ 2024 (2) TMI 911 - CESTAT AHMEDABAD] wherein Tribunal has held that ' The present case is on much batter footing as the appellant has paid service tax on the part of the activity of the service received from abroad. Therefore, there was no suppression of fact on the part of the appellant. Moreover, the present case is clearly of revenue neutral. In the present case, the demand was raised for the period from March, 2006 to March, 2008 whereas the show cause notice was issued on 20.06.2011 i.e. much after the normal period.' From the above decision, which has relied upon various judgments on the issue of Revenue neutrality, it has been held that the demand for the extended period is not sustainable. Conclusion - In the present case since, there is revenue neutrality in the entire exercise of service tax payable and the Cenvat credit available thereof to the appellant, the demand being under extended period will not be sustainable. The impugned order set aside - appeal allowed.

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• 2025 (1) TMI 69
  Non-payment of service tax - artificial bifurcation of one single contract for payment of service tax on value of services and payment of VAT on the value of supply of goods under the said contracts - application filed under Service Tax Voluntary Compliance Encouragement Scheme (VCES) 2013 - HELD THAT:- Similar issue was considered by the division bench of this Tribunal in the matter of LAXMI ENGINEERING P LTD VERSUS C.S.T. -SERVICE TAX AHMEDABAD [ 2023 (4) TMI 348 - CESTAT AHMEDABAD ] wherein it was held that ' Once, the sales tax has been paid on the materials, then on the same, service tax also cannot be charged.' The issue is otherwise covered by the decision of Hon ble Supreme Court in case of SAFETY RETREADING COMPANY (P) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, SALEM, M/S TYRESOLES INDIA PRIVATE LMITED VERSUS THE COMMISSIONER OF CENTRAL EXCISE, GOA AND M/S LAXMI TYRES VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE [ 2017 (1) TMI 1110 - SUPREME COURT ] wherein it is observed ' The invoices which the appellant assessee has also brought on record by way of illustration show the break up of the gross value received. There is again no contest to the same. Leaving aside the question that the case now projected, with regard to lack of proof of incurring of expenses on goods and materials which has been transferred to the recipient of the service provided, appears to be an afterthought, even on examination of the same on merits we have found it to be wholly unsustainable.' It can be seen from the preamble of the Notification that it exempts the services of commercial or industrial construction services and works contract services provided in relation to port or other port. It is well established principle of law that wherever the words used in relation to it expand the scope of the subject. It is undisputed that the Respondent assesee has carried out the installation of high mast lighting tower on Jetty No. 8 of the Kandla Port. Therefore, the same is covered within the scope of the above exemption notification - The Respondent assessee has arrived at the value of service portion in the works awarded to them and declared the liability of service tax of Rs. 91,74,594/- under VCES 2013 which Ld. Commissioner has accepted and not challenged by either party in these appeals. The Respondent Assessee has correctly paid service tax of Rs.91,74,594/- under VCES-2013. Conclusion - The contracts involving both goods and services can be bifurcated for tax purposes if distinct parts are identifiable. Additionally, services related to port construction can qualify for exemptions under specific notifications. The demand of service tax in both these appeals is not sustainable - revenue s appeals are dismissed.

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• 2025 (1) TMI 68
  Cenvat credit - input services or not - refund claim - 'locus standi' to file this appeal - HELD THAT:- The department has filed the appeal without even invoking Rule 14 of the Credit Rules, and without even issuing a SCN, hence the department does not have any 'locus standi' to file this appeal and hence this appeal should be dismissed on this ground only. The respondent has relied upon the decision of the Tribunal in the case of MICROSOFT GLOBAL SERVICES CENTER (INDIA) PRIVATE LIMITED AND MICROSOFT INDIA (R D) PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX HYDERABAD-IV [ 2020 (10) TMI 57 - CESTAT HYDERABAD] wherein it is held that ' In the present case, it is an undisputed fact on record that the department had not proceeded against the appellant for effecting recovery of the allegedly availed irregular Cenvat credit, by taking recourse to Rule 14 ibid read with Section 73 ibid. On the other hand, the department had raised the issue of non-establishment of nexus between the input services and exported output service for the first time, while adjudicating the subject refund claims filed under Rule 5 ibid by the appellant.' Conclusion - The department has filed the appeal without even invoking Rule 14 of the Credit Rules, and without even issuing a SCN, hence the department does not have any 'locus standi' to file this appeal and hence this appeal should be dismissed on this ground only. Appeal of Revenue dismissed.

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• Central Excise

• 2025 (1) TMI 67
  Seeking a declaration that the adjudication proceedings which have remained pending for almost 12 years be held to be vitiated in law - challenge to SCN - challenge to final order of adjudication - HELD THAT:- The respondents allude to the matter having been placed in the call book for many years and thereafter proceedings being delayed on account of repeated adjournments being sought by the petitioner. As was noticed in M/s Vos Technologies [ 2024 (12) TMI 624 - DELHI HIGH COURT ], nothing constrained or detracted from the right of the respondents to proceed ex parte in case the adjudication proceedings were being unjustifiably delayed and frequent requests for adjournments being made. In fact, although the blame is sought to be deflected towards the petitioner, the principal ground for a failure to conclude with due expedition appears to be the matter having remained in the call book for many years and which fact is admitted to by the respondents themselves. The final order dated 31 January 2023 as well as the SCN proceedings emanating from the impugned SCN dated 21 April 2011 is quashed - petition allowed.

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• 2025 (1) TMI 66
  CENVAT Credit - inputs/capital goods - duty paid on tower materials, puff channels, shade parts thereof and pre-fabricated buildings materials - immovable property or not - tower would qualify as part or component or accessory of the capital goods i.e. antenna or not - towers, shelter are capital goods or inputs in terms of Rule 2(a) or 2(k) of the Cenvat Credit Rules, 2004 or not - invocation of extended period of limitation. HELD THAT:- Their Lordships of the Supreme Court, considering the said issue involved in M/S BHARTI AIRTEL LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, PUNE [ 2024 (11) TMI 1042 - SUPREME COURT] have held that ' Having held that the tower and pre-fabricated buildings (PFBs) are goods and not immovable property and since these goods are used for providing mobile telecommunication services, the inescapable conclusion is that they would also qualify as inputs under Rule 2(k) for the purpose of credit benefits under the CENVAT Rules.' Conclusion - Thus, tower materials and PFBs are not immovable property and qualify as inputs under the Cenvat Credit Rules, 2004. Appeal allowed.

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• 2025 (1) TMI 65
  Availment of CENVAT credit - revision in rate of service (escalation of price) - violation of Rule 4A (1) of the Service Tax Rules, 1994 read with Rule 9(1)(f) of the CENVAT Credit Rules, 2004 - denial of Cenvat credit on the ground that the additional invoices were issued by the service providers much after the period of 14 days of completion of service - HELD THAT:- The CENVAT Credit availed by the appellant on the basis of supplementary invoices were rejected by the Ld. adjudicating authority on the ground that the said invoices were not issued within 14 days from from the date of completion of service or receipt of payment, whichever is earlier. It is observed that the issue is no more res integra as this Tribunal in M/S. USHA MARTIN LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, JAMSHEDPUR [ 2023 (5) TMI 719 - CESTAT KOLKATA] by relying on Hon ble Madras High Court s ruling in THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. JSW STEELS LTD., THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, [ 2017 (8) TMI 592 - MADRAS HIGH COURT] held that CENVAT credit cannot be denied to the service recipient on the ground that invoice was not issued by the service provider. In Usha Martin Limited by relying on M/S DELPHI AUTOMOTIVE SYSTEMS (P) LIMITED VERSUS CCE, NOIDA [ 2013 (12) TMI 156 - CESTAT NEW DELHI] this tribunal has held that for the period prior to 01.04.2011, as Rule 9(1) did not make any distinction between invoice or supplementary invoice in respect of services, therefore, the term invoice in Rule 9(1)(f) of the CENVAT Credit Rules, 2004 has to be treated including supplementary invoice . Conclusion - There is no dispute regarding the payment duty on the supplementary invoices. Also, there is also no dispute regarding the receipt of input services and using the same towards manufacture of dutiable goods. Thus, CENVAT credit cannot be denied to the Appellant on the basis of procedural irregularities, if any. The impugned order is set aside - appeal allowed.

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• 2025 (1) TMI 64
  Mis-declaration of MRP and/or alteration of MRP post removal of the goods prior to 01.03.2008 - Clandestine removal. Mis-declaration of MRP and/or alteration of MRP post removal of the goods prior to 01.03.2008 - statements of various persons were recorded, cross examination not afforded - demand of differential Central Excise duty under the provisions of Section4A of Central Excise Act, 1944 - HELD THAT:- The issue has been decided by larger Bench of this Tribunal in the case of Ocean Ceramics Ltd. [ 2024 (1) TMI 1280 - CESTAT AHMEDABAD - LB] and subsequently on the answer given by the larger bench the division bench in the case of Ocean Ceramics others [ 2024 (9) TMI 1490 - CESTAT AHMEDABAD] finally decided the issue of MRP in the favour of the assessees. Clandestine removal - manufacture and clearance of 96646 boxes of ceramics tiles of various size and grades - demand based on statements of various persons - admissible evidence or not - HELD THAT:- The said demand is on the basis of the details available in the estimates/debit memos recovered from Appellant s Mumbai and Delhi office and statements recorded by the investigating officers. It is noticed that in the said matter appellant requested for cross-examination of witnesses which was rejected by the Ld. Adjudicating authority. Further the director of Appellant s company has also retracted his statement by filing affidavits. It was on records that Appellant have raised the dispute on statements of witness recorded during the course of investigation by investigating officers. Therefore the said statement cannot be relied upon as admissible evidence in terms of the provisions of Section 9D of the Act. Reliance is placed on the ruling of the Hon ble Punjab Haryana High Court in the case of Jindal Drugs (Infra) [ 2016 (6) TMI 956 - PUNJAB HARYANA HIGH COURT] wherein the Hon ble High Court laid down the detailed procedure, inter alia, providing for cross-examination of the witness of the Revenue by the Adjudicating Authority and thereafter, if the Adjudicating Authority is satisfied that the statement of the witness is admissible in evidence than the Adjudicating Authority is obligated to offer such witnesses for cross-examination by the other side/assessee. Statements recorded during investigation in the present matter, whose makers are not examination-in-chief before the adjudicating authority, would have to be eschewed from evidence, and it will not be permissible for Ld. Adjudicating Authority to rely on the said evidences. Therefore, none of the said statements were admissible evidence in the present case. Also, there is nothing to indicate compliance with the strict stipulations contained in sub-sections (1) and (2) of Section 36B of the Act in the present case. Therefore no demand is sustainable on this ground also. Conclusion - The reliance on statements without cross-examination and demands based on inadmissible computer-generated evidence were rejected. Appeal allowed.

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• 2025 (1) TMI 63
  Recovery of Central Excise duty on the clearances of scrap and waste during the period from April 2008 to March 2013 - demand confirmed solely relying upon the verification report submitted by the range superintendent, against which the Cenvat credit has been taken by the appellant and an observation was made that they are normal entries - HELD THAT:- The report itself does not provide the details of all entries against which Cenvat credit has been taken. The impugned order also in these proceedings presumed that there is a dispute that the scrap which has been cleared would have arisen out of cenvated as well as non-cenvated items of iron and steel. It does not identify and make categorical statement to the effect that the scrap has arisen out of cenvated capital goods. It is based on a presumption which arises in view of the said verification report. Such presumption cannot take place of proof and cannot be basis for confirmation of demand. Appellant has taken a categorical stand before the Adjudicating Authority that these scraps have arisen out of non-cenvated capital goods, some of them even prior to the insertion of Modvat/Cenvat credit scheme in respect of capital goods, this stand of the appellant was to be rebutted by the Adjudicating Authority in the impugned order by relying upon the suitable and concrete evidences. Presumption made against the appellant cannot be the ground for confirming the demand. These scrap would have arisen not on account of any manufacture but on account of uses of capital goods. Over period of time such waste and scrap arising on account of reasons other than the activity of manufacture could not have been subjected to demand of central excise duty but should have been subjected to reversal of credit in the manner specified as per Rule 3 (5) of Cenvat Credit Rules, if the said capital goods were cenvated. In absence of any conclusion in respect of the facts that these capital goods were cenvated, it is found that impugned order proceeds only on the basis of presumption and assumption to confirm this demand. Interest and penalties - HELD THAT:- As the demand itself is being set aside, penalties and interest imposed under Section 11AC and Rule 27 is also set aside. Concusion - The burden of proof lies with the department to establish that the waste and scrap were generated from cenvated capital goods. Presumptions cannot replace concrete evidence in confirming duty demands. Appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (1) TMI 62
  Recovery of Tax dues - Effect of CIRP Proceedings under IBC - Challenge to action of respondents, directing the respondent No. 2 to recover the outstanding amount from its Bank account - non-payment of the entry tax for the goods purchased by the petitioner from outside the State of Rajasthan - HELD THAT:- As per Sections 31 and 238 of the IBC, the approved Resolution Plan has been made binding on the Corporate Debtors - McNally Bharat Engineering Company Ltd., its employees, members, creditors, guarantors including the Central Government, any State Government or any local authority and other stakeholders involved in the Resolution Plan, to whom a debt in respect of payment of dues arising under any law for the time being in force, is owed. Section 238 of the IBC provides that the Code will prevail in case of inconsistency between two laws. This court also examined similar controversy in the case of Ultra Tech Nathdwara Cement Ltd. [ 2020 (4) TMI 269 - RAJASTHAN HIGH COURT ] and held that any demands made by the Statutory Creditor, i.e. Commercial Taxes Department, for the period prior to the effective date stand extinguished with the approval of the Resolution Plan by the NCLT - Law is well-settled that with the finalization of insolvency resolution plan and the approval thereof by the NCLT, all dues of creditors, Corporate, Statutory and others stand extinguished and no demand can be raised for the period prior to the specified date. Conclusion - Law is well-settled that with the finalization of insolvency resolution plan and the approval thereof by the NCLT, all dues of creditors, Corporate, Statutory and others stand extinguished and no demand can be raised for the period prior to the specified date. The impugned communication/notice dated 17.07.2019 is invalid - Petition allowed.

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• 2025 (1) TMI 61
  Jurisdiction of Additional Commissioner to pass an order u/s 64 of the Karnataka Value Added Tax Act, 2003 after the expiry of more than 4 years since the passing of the original order - HELD THAT:- In the instant case, the order sought to be revised was passed on 31.07.2017. The records were called for under letter dated 13.07.2021 which was dispatched on 14.07.2021 and records were received by the Additional Commissioner on 22.07.2021 and notice under Section 64 (1) of KVAT Act was issued to the appellant on 28.07.2021. If the proceedings is initiated within 4 years from the date of order sought to be revised, the date of serving notice on the assessee would have no consequence. Initiation of proceedings and issuance of notice under Section 64 (1) of KVAT Act is relevant for computing limitation of 4 years and not service of notice or passing of order under Section 64 (1) of KVAT Act. The Full Bench of this Court in M/S.KHIMIJIBHAI MILLS [ 2000 (12) TMI 883 - KARNATAKA HIGH COURT ] held that ' Emphasis in the earlier provision was in affirmative terms to exercise the power only within 4 years, whereas now the emphasis is in the negative terms by saying that the authority shall not exercise the power beyond the period of 4 years. There is no material difference either to the exercise of the power to revise or to the period of limitation prescribed.' It is clear from the above that four years limitation prescribed under Section -64 of KVAT Act is to call for records and to initiate proceedings and not to pass final order. Conclusion - The limitation period under Section 64 of the KVAT Act pertains to the initiation of revisional proceedings, not the conclusion of such proceedings. Appeal dismissed.

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• Indian Laws

• 2025 (1) TMI 60
  Condonation of delay of 5 years, 10 months, and 16 days in filing the appeal by the appellant/State - The court dismissed the application for condonation of delay, finding that the appellant failed to provide a satisfactory explanation for the extensive delay. HELD THAT:- This Special Leave Petition is dismissed with costs of Rs.1,00,000/- to be deposited by the State within a period of two weeks from today with the Supreme Court Mediation Centre and file proof thereof, in terms of the signed Reportable Order.

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• 2025 (1) TMI 59
  Suit for Recovery - Direction to deposit 75% of the decretal amount during the pendency of the present Appeals - separate pre-institution mediation was not initiated for the Counter-Claim - HELD THAT:- The Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 [hereinafter referred to as Pre-Institution Mediation Rules ] provides that a party to a commercial dispute is required to initiate mediation prior to the filing of a suit. Sub-rule (8) of Rule 3 of Pre-Institution Mediation Rules provides that the mediation process should be completed within a period of three months - A commercial dispute is defined as a dispute referred to in Section 2 (1) (c) of Commercial Courts Act, 2015. Section 2 (1) (xviii) of the CC Act includes agreements for sale of goods or provision of services . Concededly, the dispute between the parties is commercial in nature and is subject to the Pre-Institution Mediation Rules. The Supreme Court in the judgment of Yamini Manohar vs. T.K.D Keerthi [ 2023 (10) TMI 1375 - SC ORDER ], relying on the M/s. Patil Automation case, has held that pre-litigation mediation is mandatory unless the suit contemplates urgent relief. It was further held that a plaintiff should not be permitted to file an application for interim relief as a subterfuge to wriggle out of the requirement of mandatory pre-institution mediation. The Court held that in order that the provision is not bypassed, the learned Commercial Court has a role, although a limited one, to examine whether the suit contemplates an urgent relief so as to keep a check that legislative intent behind the enactment of Section 12A of the CC Act is not defeated. In the present case, pre-litigation mediation was initiated by Molmek prior to instituting the suit. Molmek has relied upon the copy of the Non-Starter Report of the authority appointed for pre-institution mediation, South-West, DLSA, Dwarka Courts, New Delhi, dated 15.03.2022 to submit NAPL did not attend the Mediation proceedings as these were closed as a non-starter . NAPL filed its combined Written Statement and Counter-Claim on 31.08.2022 raising a Counter-Claim of Rs. 7,62,930/- against Molmek before the learned Commercial Court. The object of the CC Act is to ensure speedy resolution of commercial disputes to accelerate economic growth and improve the international image of the Indian Justice System and to restore the faith of the investors. Once a party has taken steps to exhaust the remedy of pre-institution mediation to then ask the opposite party in a case where the subject matter of dispute is entirely the same, to once again undertake pre-institution mediation, prior to filing its counter-claim would defeat the very purpose of the CC Act and delay adjudication of the commercial dispute between the parties. The Supreme Court in AMBALAL SARABHAI ENTERPRISES LTD. VERSUS K.S. INFRASPACE LLP ANR. [ 2019 (10) TMI 1601 - SUPREME COURT] case has held that the statement of object and reasons for the enactment of the CC Act was the early and speed resolution of the commercial disputes and thus, there was an amendment made and fast track procedure set in place by the CC Act - The Supreme Court analysed the provisions of the CC Act and based on such analysis held that statutory provisions of the CC Act and the language therein should be interpreted purposefully to facilitate the swift resolution of commercial disputes, thereby benefiting litigants involved in trade and commerce and contributing to the country's economic growth. NAPL has placed evidence before the learned Trial Court which remains uncontroverted with respect to the supplies of goods by it to Molmek to show a total number of 46 deliveries between the period 26.10.2018 and 08.01.2021. NAPL has given invoice numbers, e-way bill numbers and all filed requisite evidence. The 5 disputed invoices also form part of its GST returns that were filed. The learned Trial Court has conducted a detailed examination and found that NAPL has proved its delivery. Conclusion - Molmek failed to prove its claim for recovery due to insufficient evidence. The separate pre-institution mediation for the counter-claim was not necessary, as it would undermine the objective of the Commercial Courts Act. Appeal dismissed.

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• 2025 (1) TMI 58
  Dishonour of cheque - Company has not been impleaded, as accused, in this case - whether the proceedings cannot be initiated and allowed to be continued against the company? HELD THAT:- Admittedly, the said Company has neither been impleaded, as, accused in the complaint, under Section 138 of the NI Act, nor in the legal notice issued against the Company, before filing the complaint. Even otherwise, the Company cannot now be impleaded as accused, in this case, as before filing the complaint under Section 138 NI Act, certain legal formalities have to be completed by the complainant, i.e., issuance of legal notice, demanding the money, within the stipulated period. The nonprosecution of the company, from whose account the cheque was issued and dishonored, is fatal, noncurable illegality and shall lead to the dismissal of the complaint, being legally defective and not properly constituted. Conclusion - The prosecution for cheque dishonor under Section 138 of the NI Act requires the company to be named as an accused. Directors and officers can only be held vicariously liable if the company is prosecuted. Petition allowed.

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• 2025 (1) TMI 57
  Dishonour of cheque - competence of power of attorney holder to file a complaint under Section 138 of the Negotiable Instruments Act, 1881, without any averment in the complaint about the power of attorney holder's knowledge of the facts of the case - HELD THAT:- It needs to be borne in mind that a power of attorney holder is a competent person to file a complaint under section 138 of the NI Act. The aforesaid proposition has already been settled by various judgments. A Magistrate is entitled to issue process to the accused on the basis of the contents of the complaint, documents in support thereof and the affidavit submitted in support of the complaint. If an affidavit is filed in support of the complaint, before issuance of the process under Section 200 of the Cr.P.C, the Magistrate has a discretion and is not bound to call upon the complainant to be examined to decide whether or not to issue process on the complaint under Section 138 of the NI Act. The Magistrate can rely upon the affidavit filed in support of the complaint under Section 138 of the NI Act. In the instant case, the petition to quash the complaint was filed immediately after the summons was served on the accused. Neither the complainant nor the power of attorney holder has been examined. Summons have been issued based on the complaint, the documents, and the affidavit filed in support of the same. The circumstances of the instant case has to be appreciated, bearing in mind the above decisions. The stage of giving evidence on oath has not yet been reached. Summons was issued to the accused after verifying the affidavit of the power of attorney holder, which contains a specific averment that the power of attorney holder is conversant with the facts of the case. In view of the decision in MITA INDIA PVT. LTD. VERSUS MAHENDRA JAIN [ 2023 (2) TMI 824 - SUPREME COURT] , the said statement in the affidavit is sufficient. Thus, a power of attorney holder, who is aware of the facts of the case and has made such an averment in the affidavit, is certainly competent to lodge a private complaint, even if such an averment is absent in the complaint. Conclusion - A power of attorney holder, who is aware of the facts of the case and has made such an averment in the affidavit, is certainly competent to lodge a private complaint, even if such an averment is absent in the complaint. This petition to quash the complaint is dismissed, leaving open the question regarding the maintainability of a second petition under section 482 Cr.P.C.

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• 2025 (1) TMI 56
  Maintainability of complaint under Section 138 of the Negotiable Instruments Act, 1881, filed against the petitioner - High Court can exercise its inherent powers under Section 482 of the Criminal Procedure Code to quash the complaint and subsequent proceedings or not - HELD THAT:- It is no longer res integra, that this Court, while exercising the powers under Section 482 of Cr.P.C. cannot assume the role of trial Court and the defence, if any, of the accused cannot be taken into consideration, at this stage, as it is for the accused to prove his defence by leading the cogent evidence before the trial Court. Scope of Section 482 Cr.P.C., has elaborately been discussed by the Hon ble Apex Court, in the year 1992, in the lead case reported as 1992 CrLJ, 527, titled as State of Haryana Vs. Chaudhary Bhajan Lal Others [ 1990 (11) TMI 386 - SUPREME COURT ], in which, the Hon ble Apex Court has formulated the guidelines for exercising the powers under Section 482 Cr.P.C., where it was held that ' In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any Court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.' Now, if the facts and circumstances of this case are seen in the light of the the above decisions of the Hon ble Supreme Court, this Court is of the considered opinion that all the grounds, which have been taken in the petition, are based upon the defence of the accused, which will only to be considered by the learned trial Court - The petition is totally silent as to how the complaint filed by the complainant before the learned trial Court lacks ingredients of Section 138 of the NI Act. Conclusion - This Court, while exercising the powers under Section 482 of Cr.P.C. cannot assume the role of trial Court and the defense, if any, of the accused cannot be taken into consideration, at this stage, as it is for the accused to prove his defense by leading the cogent evidence before the trial Court. Petition dismissed.

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