TMI Tax Updates - e-Newsletter
January 4, 2025

Case Laws in this Newsletter:

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

Articles

1. RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

2. Analyses of CBIC circular 241/35/2024 dated 31-12-2024- GST impications - Ex works contract - ITC availment - impact on place of supply

   By: Ketaan Mehta

3. Passing order without hearing is violation of principles of natural justice

   By: Bimal jain

4. Analysis of 55th GST Council’s decision to clarify that RBI regulated Payment Aggregators are eligible for the exemption, not payment gateway (PG)

   By: Vivek Jalan

News

1. Congress alleges slowdown in GST collections, asks govt to focus on complexities of economy

2. DPIIT Inks MoU with Startup Policy Forum to Boost Startup Ecosystem

3. Govt amends Foreign Trade Policy, 2023 for Stakeholder Consultation; encourages inclusive decision-making

4. Manipur: Economic blockade in Kuki-Zo areas underway, shutdown observed in Kangpokpi

5. DFS Secretary launches revamped ‘BAANKNET’ e-auction portal for e-auction of properties as one-stop destination

Notifications

FEMA

1. G.S.R. 790 (E) - dated 31-12-2024 - FCRA

Foreign Contribution (Regulation) Amendment Rules, 2024.

Income Tax

2. 03/2025 - dated 2-1-2025 - IT

Central Government notifies that no deduction of tax shall be made on the payment under section 194Q of the IT Act 1961

3. 02/2025 - dated 2-1-2025 - IT

Central Government notifies that no deduction of income-tax under Chapter XVII of the Income-tax Act, 1961

4. 01/2025 - dated 2-1-2025 - IT

Central Government notifies that no deduction of income-tax under Chapter XVII of the Income-tax Act, 1961

Circulars / Instructions / Orders

FEMA

1. II/21022/23(12)/2020-FCRA-III - dated 31-12-2024

Clarification regarding refund of TDS pertaining to Foreign Contribution (FC)

2. II/21022/23(22)/2020-FCRA-II - dated 27-12-2024

Extension of the validity of FCRA registration certificates

3. II/21022/23(04)/2024/FCRA-II - dated 13-12-2024

Prompt response of clarifications sought in respect of Registration/ Renewal/ Prior permission applications under the Foreign Contribution (Regulation) Act, 2010

DGFT

4. 38/2024-25 - dated 3-1-2025

Amendment in Para 6.06 of HBP, 2023

5. 37/2024-25 - dated 2-1-2025

Amendment by incorporation of Para 1.04 (k) in Chapter 1 of the Handbook of Procedures 2023 to specify the procedure for furnishing views, suggestions, comments, or feedback from relevant stakeholders including importers/exporters/industry experts concerning the formulation, amendment or incorporation of specific provision(s) in the Foreign Trade Policy.

Highlights / Catch Notes

GST

• Timelines for Impounding Vehicles Violated, Proceedings Set Aside and Vehicle Release Ordered.

  Case-Laws - HC : Petitioner challenged proceedings u/s 129(3) for failure to comply with mandatory timelines. Relying on TVL. UDHAYAN STEELS PRIVATE LIMITED, HC held impugned proceedings contravened Section 129 timelines, set aside proceedings, and directed vehicle bearing Registration No. TN-29-AB-7887 be released forthwith. Petition disposed.
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• Petitioner allowed personal hearing on penalty for unloading goods without proper documentation chain.

  Case-Laws - HC : The HC allowed the petitioner's request for a personal hearing on 18.12.2024 at 11:00 am regarding the levy of penalty u/s 129(1)A of the CGST Act for unloading goods at an unauthorized location without proper documentation. The HC directed fresh orders to be passed after considering the petitioner's submissions. The petitioner can request provisional release of goods before the appropriate authority as per law. The petition was closed.
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• Improper service of show cause notices & order violates natural justice; 25% tax deposit required within 2 weeks.

  Case-Laws - HC : Principles of natural justice violated as show cause notices and impugned order not served properly. Petitioner to deposit 25% disputed tax within two weeks. Impugned order treated as show cause notice, petitioner to submit objections with supporting documents within four weeks. HC disposed petition.
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• High Court remands GST case for fresh order on merits due to absence of statutory appellate tribunal.

  Case-Laws - HC : HC allowed petition by remanding case to pass fresh order on merits within 3 months. Appeal against order u/s 107 of CGST Act lies before GST Tribunal u/s 112, but Tribunal not yet constituted. HC struck down Circular 135/05-2020-GST dated 31.03.2020 on which impugned order based, following decisions of Guwahati, Calcutta, Rajasthan and Delhi HCs.
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• Bombay HC sets aside tax order, grants petitioner time to pay Rs. 1 crore and file reply; orders tax authority to reassess after fair hearing.

  Case-Laws - HC : Impugned order set aside by HC. Petitioner to remit Rs.1 crore within two weeks, submit reply within two weeks thereafter treating impugned order as show cause notice. Respondent authority to complete assessment in accordance with law after providing reasonable opportunity of hearing to petitioner.
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• Petitioner's reply to be considered before initiating tax recovery proceedings under GST Act.

  Case-Laws - HC : Petitioner challenged order u/s 73 of Odisha Goods and Services Tax Act, 2017. HC held Section 61(2) requires consideration of explanation furnished. Section 61(3) states if no satisfactory explanation is given, proper officer may initiate action u/s 73. Initiation of proceeding u/s 73 was without jurisdiction. Impugned order quashed. Petitioner's reply dated 29.07.2021 to be dealt with u/s 61, thereafter revenue can proceed.
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• Chewing tobacco products classified under higher GST slab, manufacturers' plea rejected.

  Case-Laws - HC : The HC held that the petitioners' chewing tobacco products are to be classified under Heading 2403 99 10 of the Customs Tariff Act, 1975, attracting a higher compensation cess of 160% under the GST (Compensation to States) Act, 2017. The petitioners cannot change the classification merely for rate benefit. The Advance Rulings classifying the products under 2403 99 10 are binding. The food safety regulations do not impact the GST classification. The petition was dismissed.
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• High Court rules forex gains on export sales are taxable turnover under state sales tax law.

  Case-Laws - HC : HC dismisses revision. Differential amount received by petitioner due to foreign exchange fluctuation constitutes "turnover" under KGST Act. Amount represents consideration for sale of goods despite exchange rate benefit. Statutory definition of turnover encompasses such foreign currency amounts when converted to Indian rupees. Permissible deductions already granted, differential amount represents untaxed turnover. Exchange rate fluctuations affecting foreign currency sale price do not alter nature of amount as turnover.
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• Leasing electric vehicles without operator classified under 'Financial & related services' by AAAR.

  Case-Laws - AAAR : The AAAR held that leasing of electric vehicles (E-Bikes/EVs) without operator is classifiable under heading 9971 for Financial and related services under Sl. No. 15(ii) of Notification No. 11/2017-CT(R) dated 28.06.2017 as amended. The rate of tax will be the same as applicable on supply of like goods involving transfer of title. The AAAR examined the Vehicle Lease Agreement and found transfer of effective control, physical possession, and right to use the EVs to the lessee. The lessee was responsible for repair, maintenance, running expenses, timely renewal of documents, and insurance. The AAAR relied on the Supreme Court's judgment in The Great Eastern Shipping Co. Ltd. case regarding interpretation of 'transfer of right to use goods'.
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• Bakery selling cakes, ice creams on premises qualifies as restaurant service, taxed 5% GST; goods like stickers, balloons taxed separately.

  Case-Laws - AAAR : The AAAR held that the petitioner's supply of cakes, bakery items, ice creams, chocolates, and other edible products prepared on the premises and supplied from the counter with facility to consume on air-conditioned premises constitutes a composite supply of restaurant services, taxable at 5% GST without input tax credit. However, the supply of bought-out items like birthday stickers, candles, caps, balloons, etc. is taxable as supply of goods under Notification No. 1/2017-Central Tax (Rate). The petitioner is eligible for input tax credit on such goods. The petitioner does not qualify for the Composition Scheme due to ice cream manufacturing activity.
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Income Tax

• Payments to National Credit Guarantee Trustee Company Limited Exempted from Income Tax Deduction.

  Notifications : Central Government notified that no deduction of income-tax under Chapter XVII of Income-tax Act, 1961 shall be made on payments received by National Credit Guarantee Trustee Company Limited, being a company established and wholly financed by Central Government for operating credit guarantee funds referred to in section 10(46B)(i). Notification effective from date of publication in Official Gazette.
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• Nonprofit organization's activities deemed charitable for public good, not commercial.

  Case-Laws - HC : Assessee Society's activities charitable for public at large. CIT(E)'s finding that activities in nature of trade, commerce or business covered by proviso to Section 2(15) incorrect. HC upheld ITAT's direction to CIT(E) to grant registration u/s 12AA. Decided in favour of assessee.
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• Taxman's 'Belief' to Reopen Case Rejected for Vagueness, Lack of Specific Details on Alleged Tax Evasion.

  Case-Laws - AT : AO solely relied on unspecified information categorized as 'high risk transactions' of unsecured loans without giving specific details of lenders, amounting to bald allegations. No definitive link or adverse document was present at the time of forming belief. Mere identification of transactions as 'high risk' cannot provide cause for reopening assessment. The reasons recorded give an impression of 'reason to suspect' rather than 'reason to believe' escapement of income as required u/s 147. The purported 'belief' is premised on vague grounds, failing the test of 'reason to believe'. ITAT allowed assessee's appeal.
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• Cash deposits during demonetization cannot be treated as unexplained income based on mere assumption of inflated sales.

  Case-Laws - AT : AO made addition u/s 69A treating assessee's cash deposits during demonetization period as unexplained income on assumption of inflated/bogus sales without any cogent evidence. ITAT allowed assessee's appeal holding that AO cannot calculate sales hypothetically ignoring VAT returns, purchase bills, quantitative details etc. once sales were accepted and no deficiency pointed out in books of account. Mere substantial increase in turnover during demonetization without evidence of bogus sales is insufficient for addition.
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• Electricity Transfer Pricing: ITAT Upholds Rs. 4 Per Unit as Arm's Length for Thermal Unit to Washeries Division.

  Case-Laws - AT : The ITAT held that the transfer price of Rs. 4 per unit for supply of electricity from thermal unit to washeries division was at arm's length, being within the market rate of Rs. 4.05 per unit charged by CSEB to industrial consumers. No transfer pricing adjustment was warranted. The issues of employees' PF contribution and disallowance of depreciation were restored to the AO for de novo adjudication after considering facts pertaining to the assessee.
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• Tax deduction liability on infrastructure charges paid to HUDA cannot be reopened when issue pending at CIT(A) level.

  Case-Laws - AT : The ITAT allowed the assessee's appeal and set aside the order passed u/s 263. The issue pertained to the liability u/s 201/201(1A) for non-deduction of tax at source on payments made to HUDA for external/infrastructure development charges. The ITAT observed that the issue was pending before the CIT(A), and the PCIT should not have initiated proceedings u/s 263 when the matter was sub-judice. The ITAT held that the AO's order was not erroneous when passed, and there was no prejudice to the Revenue's interest. The ITAT concluded that the PCIT's invoking of Section 263 was unjustified, and the assessee's appeal was allowed.
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• Share capital/premium can't be taxed u/s 68 if assessee proves genuineness, investor identity & creditworthiness via documents.

  Case-Laws - AT : The ITAT allowed the assessee's appeal. The assessee furnished all evidence proving identity, creditworthiness of investors, and genuineness of transactions regarding share capital/premium u/s 68. Despite investors not appearing before AO or complying with summons u/s 131, AO did not comment on evidence filed by assessee. Relying on Orchid Industries and Crystal Networks, ITAT held that Section 68 cannot be invoked where assessee produced documents establishing genuineness, identity and creditworthiness, despite non-compliance with summons.
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• Excess provisions rightly excluded from income; CPC adjustments erroneous.

  Case-Laws - AT : The ITAT held that the assessee correctly computed the disallowable amounts for excess provision for bad debts written back and excess warranty provision. Despite the assessee providing relevant details to the AO, the CPC erroneously made adjustments. Considering the actual warranty expenses incurred and customer-wise breakup of bad debts written back, primarily from reputed companies like Tata Motors Ltd. and Ashok Leyland Ltd., the ITAT found the assessee's claim justified. Consequently, the ITAT set aside the CIT(A)'s findings, deleted the disallowances u/s 37, and allowed the assessee's grounds.
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• Cash deposits during demonetization can't be treated as unexplained credits when books were accepted and cash balance was consistent.

  Case-Laws - AT : AO accepted assessee company's books of accounts and net profit disclosed therein. However, AO treated cash deposits in bank accounts during demonetization period as unexplained cash credits u/s 68, rejecting assessee's explanation that deposits were from business receipts recorded in books. ITAT held AO cannot accept book results but reject transactions explaining cash availability on 08.11.2016. Cash book showed cash-in-hand of Rs. 12,00,442.54 on 08.11.2016 was consistent with pre and post-demonetization period. No justification to treat deposits as unexplained credits u/s 68. Assessee's appeal allowed.
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• Severance Fee Received Under Voluntary Retirement Scheme Taxable as "Profit in Lieu of Salary.

  Case-Laws - AT : ITAT held that severance fee received by assessee under Compulsory Retirement Scheme on voluntary retirement was taxable as "profit in lieu of salary" u/s 17(3)(i), being compensation received at termination of employment. CIT(A) order concluding receipt as income under head "Salaries" was upheld, no infirmity found.
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Customs

• Shipping Lines Can Now Apply Online for Advance Port Clearance, Manual Process Continues Till Year-End.

  Circulars : The JNCH issued Public Notice No. 104/2024 detailing the procedure for issuing EDI Port Clearance/Advance Port Clearance. Key points are: Shipping Lines/Agents can submit a continuity bond for obtaining Advance Port Clearance, subject to submitting specified documents within 7 days of vessel sailing. The extant manual process will continue alongside the new online system till 31.12.2024, after which only the online mode will operate. The online system involves application submission, document verification at two levels, issuance of QR coded PCC, and provisions for extension, amendment and closure. Detailed guidelines are provided for stakeholders to transition to the new online platform.
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• LED Chips Import: Proper Self-Classification Key to Avoid Queries, Delays - Provide Complete Technical Documents.

  Circulars : LED chips imported were initially self-classified by importer under CTH 85414100. However, LED items are classifiable under CTHs 8539, 8541 and 9404 based on functions. Lack of relevant documents from importer led to queries proposing reclassification under different tariff headings by assessing officers. Upon importer's clarification, self-assessment under CTH 85414100 was accepted after delay. Trade advised to upload complete technical documents for expeditious hassle-free assessment as per Public Notice 13/2024 to avoid queries and delays. Principal Commissioner of Customs, ACC Chennai, reiterated instructions.
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• Eligible AEO Clients Get Automated Duty Release from 2025, Cutting Customs Delays for Compliant Trade.

  Circulars : AEO T2 and T3 clients meeting criteria of no examination, scanning or PGA NoC requirement, completed assessment, and OTP authentication for duty deferment will be eligible for Automated Out of Charge on web-based goods registration from 1st January 2025, subject to override by customs officers based on intelligence. This measure aims to facilitate genuine trade and reduce dwell time.
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• Customs Officers from DRI Competent to Initiate Duty Recovery Proceedings: High Court Upholds Based on Supreme Court Precedent.

  Case-Laws - HC : The HC held that the officers of the Directorate of Revenue Intelligence are 'proper officers' u/s 28(4) of the Customs Act, 1962 and competent to initiate proceedings and issue show cause notices for recovery of duty. Relying on the SC's observation in Commissioner of Customs, the HC concluded that the DRI officers were duly appointed as customs officers through notifications issued by the Ministry of Finance. Consequently, the seizure proceedings initiated by the appellants were justified. The appeal was allowed.
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• Customs Agent Exonerated from Penalty Due to Lack of Involvement in Importer's Misdeclaration.

  Case-Laws - AT : Appellant, a Customs House Agent (CHA), was exonerated from penalty u/s 112(a) of Customs Act. CESTAT held no evidence of appellant's abetment in misdeclaration of imported goods by importer. Responsibility solely attributed to importer based on investigations. Importer already penalized. Absence of appellant's connivance or advice to facilitate misdeclaration. Appeal allowed.
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• Imported Health Supplements Attract 18% IGST, Not 28%, Says CESTAT; Demand for Differential Duty Time-Barred.

  Case-Laws - AT : The CESTAT held that the imported health supplements are classifiable under CTH 2106 9099 and attract 18% IGST under Sr. No. 453 of Schedule III of Notification No. 1/2017-IGST rate, not 28% under Sr. No. 9 of Schedule IV. The goods were not protein concentrates or food flavouring materials. The demand for differential IGST was time-barred as there was no suppression of facts by the appellant. The appeal was allowed, and the impugned order was set aside.
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DGFT

• Stakeholder Consultation Added to India's Foreign Trade Policy for Policy Changes.

  Notifications : The notification amends India's Foreign Trade Policy 2023 by inserting paras 1.07A and 1.07B to allow the Central Government to seek views, suggestions, comments or feedback from relevant stakeholders like importers/exporters/industry experts on formulating or amending the policy. It provides a 30-day timeframe for stakeholders' submissions, though the government reserves the right to make changes without consultation. If views are not incorporated, the government may provide reasons, except in cases impacting trade relations, security, policy conflicts or confidentiality concerns. No legal rights arise for stakeholders to demand reasons.
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Corporate Law

• Company must obtain shareholder approval via special resolution before issuing equity shares against debt.

  Case-Laws - SC : The SC dismissed the appeal holding that when a company proposes to increase its subscribed capital by converting debt into equity shares, shareholder approval through a special resolution is mandatory u/s 62(1)(c) of the Companies Act, 2013. The appellant company had not obtained such approval before seeking listing of additional shares allotted to the Asset Reconstruction Private Limited, which was a prerequisite under Regulation 28 of the SEBI (LODR) Regulations, 2015 as well. The BSE and SAT rightly refused listing approval for want of shareholder approval.
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• Minority Shareholders' Right to Petition Against Company Upheld by NCLAT, Overruling NCLT's Strict Interpretation.

  Case-Laws - AT : Four members filed a petition u/s 241 of the Companies Act, 2013 against a company with 30 members. The NCLT dismissed the petition on the ground that it did not meet the criteria u/s 244, which requires petitioners to be at least 1/10th of the total members. The NCLAT allowed the appeal, holding that since the petitioners constituted 1/10th of the total members, the petition was maintainable.
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Indian Laws

• Company Representative with Power of Attorney Can Initiate Criminal Proceedings Under Negotiable Instruments Act.

  Case-Laws - SC : The SC held that the complaint filed by the appellant u/s 138 of the NI Act through its manager and power of attorney holder was valid as per Section 142, since the averments made in the documents demonstrated the power of attorney holder's personal knowledge of the facts and due authorization to initiate criminal proceedings. The SC allowed the appeal, setting aside the High Court's quashing of the summoning order, observing that a peremptory quashing was unwarranted on an incorrect factual basis regarding the power of attorney holder's knowledge and authorization.
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• Cheque Bounce Case: Valid Demand Notice Despite Separate Mention of Amounts, Burden on Accused.

  Case-Laws - HC : The HC held that in the demand notice, if the cheque amount and other claimed amounts are mentioned separately, it is a valid notice u/s 138(b) of the NI Act. Non-production of bank statements or IT returns by the complainant does not vitiate the complaint itself. The accused did not deny his signature on the dishonored cheque, fulfilling ingredients u/ss 118 and 139 of the NI Act. The presumption that the cheque was issued for consideration shifts the burden on the accused to rebut it, which he failed. The appeal was allowed.
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• Dishonour of Cheque: HUF can be an 'association of individuals' attracting vicarious liability under tax laws.

  Case-Laws - HC : The HC held that a Hindu Undivided Family (HUF) can be considered an 'association of individuals' u/s 141 of the NI Act for dishonour of Cheque. The applicant's participation in the affairs of the accused HUF attracts vicarious liability. The term 'association of individuals' includes an HUF whose business is a joint concern. The criminal application was dismissed.
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PMLA

• High Court Rejects Bail for Alleged Members of Extortion Syndicate Due to Economic Crime Severity and Risk to Investigation.

  Case-Laws - HC : The HC held that the prosecution collected material showing applicants' active involvement in the syndicate led by the main accused who extorted money utilized for purchasing properties. Considering the gravity of economic offences and prima facie evidence against applicants, they are not entitled to regular bail as it may hamper effective investigation. The bail applications u/s 439 CrPC are rejected.
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• Upholding Property Attachment Despite Pre-Crime Acquisition, Layering Linked Assets to Proceeds.

  Case-Laws - AT : The AT upheld the attachment of properties acquired prior to the commission of the alleged crime. The proceeds of crime were siphoned off by diverting and layering, thus the property of equivalent value was attached under the second limb of the definition of "proceeds of crime." The provisional attachment order did not lapse due to the intervening Covid-19 period eliminated by the Apex Court. The properties were linked to the proceeds of crime through financial transactions and layering. The scheduled offence was valid as the relevant date was when the tainted property was projected as untainted in 2012, leading to the recording of the money laundering offence. The appeals were dismissed.
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VAT

• Priority Charge of Secured Bank Over State Tax Dues When CERSAI Registration Precedes Tax Attachment.

  Case-Laws - HC : The HC held that the petitioner bank, being a secured creditor whose security interest was registered with CERSAI prior to the State Tax Department's attachment order, will have priority charge over the secured assets sold under SARFAESI Act. Despite the Tax Department's earlier attachment order, without further steps like proclamation of sale, it cannot claim priority over the secured creditor's dues when the bank's security interest was registered earlier with CERSAI. The petition was disposed of in favor of the bank.
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Service Tax

• Service Notice Validity Hinges on Proof of Delivery, Opportunity to Be Heard.

  Case-Laws - AT : The CESTAT allowed the appeal by way of remand. Service by speed post is valid provided there is proof of delivery. In the absence of any proof of delivery, it cannot be said that there is effective service of notice, as contemplated u/s 37C of the Act. The Commissioner (Appeals) dismissed the appeal on the grounds of limitation without providing an opportunity of personal hearing or reasonable time to file a miscellaneous application, violating the principles of natural justice. The matter was remanded back to the Commissioner (Appeals) to decide the appeal on merits after providing a proper opportunity of being heard to the appellant.
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Central Excise

• Manufacturer's evidence on raw material procurement and manufacturing upheld over authorities' report.

  Case-Laws - HC : The HC held that the Tribunal rightly did not approve the manner in which proceedings were conducted by the Adjudicating Authority. The respondent had demonstrated procurement of raw material and manufacturing activity through evidence like installation of DG sets, transportation records, and inspections by authorities. The Adjudicating Authority erred in solely relying on the Commissionerate's investigation report doubting respondent's suppliers, without examining respondent's evidence or conducting focused inquiry on respondent's procurement and manufacturing aspects. The appellant failed to disprove respondent's case of procuring raw material and undertaking manufacturing. The appeal was dismissed.
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• Excise duty deposits paid under protest during dispute not considered voluntary; refundable with interest.

  Case-Laws - AT : The CESTAT held that the amounts deposited by the appellant on the direction of departmental officers for detected shortages cannot be considered voluntary deposits. As the appellant contested the demand and succeeded in getting it set aside, the amounts paid were under protest and not voluntary. The deposits did not acquire the character of duty until clearance from the premises. Section 11B of the Central Excise Act, 1944 concerning limitation for refund of duty is not applicable to refund of such deposits paid under protest during an ongoing dispute. The doctrine of unjust enrichment is also inapplicable. The refund claim was allowed as there were no reasonable grounds for rejection.
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Case Laws:

• GST

• 2025 (1) TMI 215
  Failure to adhere to the time lines - Whether the proceedings under Section 129(3) can be sustained in the absence of complying with the time line mandated under Section 129(3)? - HELD THAT:- Petitioner has relied upon the judgment of this Court in TVL. UDHAYAN STEELS PRIVATE LIMITED, REP. BY ITS DIRECTOR SELVAN VERSUS DEPUTY STATE TAX OFFICER (INT.) ROVING SQUAD, COIMBATORE, THE ASSISTANT COMMISSIONER (ST) , ADJUDICATION, COIMBATORE [ 2023 (1) TMI 378 - MADRAS HIGH COURT] wherein this Court held that The impugned proceedings are set aside and the vehicles/goods in question shall be released forthwith. This Court is of the view that the impugned proceedings are liable to be set aside inasmuch as it is in contravention of the time lines stipulated in Section 129 of the Act. Consequently, vehicle bearing Registration No. TN-29-AB-7887 shall be released forthwith. Petition disposed off.

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• 2025 (1) TMI 214
  Levy of penalty under Section 129(1)A of the CGST Act - penalty based on the interception of goods, which were found to be unloaded at an unauthorized location without proper documentation - It is the case of the petitioner that on 04.11.2024 while filing the reply they had sought for a personal hearing, however, no personal hearing was granted - violation of principles of natural justice - HELD THAT:- The petitioner would appear for personal hearing at 18.12.2024 at 11.00 a.m. Orders would be passed afresh after considering the submission of the petitioner. It is submitted by the learned counsel for the petitioner that the goods may be provisionally released. It is open to the petitioner to make such request before the appropriate authority in accordance with law. If any such request is made the same would also be considered and orders would be passed in accordance with law. Petition closed.

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• 2025 (1) TMI 213
  Vioaltion of principles of natural justice - neither the show cause notices nor the impugned order of assessment has been served on the petitioner by tender or sending it by RPAD - petitioner is ready and willing to pay 25% of the disputed tax - HELD THAT:- The petitioner shall deposit 25% of the disputed tax within a period of two weeks from the date of receipt of a copy of this order. The impugned order of assessment shall be treated as show cause notice and the petitioner shall submit its objections within a period of four weeks from the date of receipt of a copy of this order along with supporting documents/material. Petition disposed off.

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• 2025 (1) TMI 212
  Constitutional validity of provisions of Rule 96 (10) of the CGST Rules, 2017 - Submissions also made that the Central Government itself though prospectively by notification dated 08.10.2024 has amended Rule 86 (4B) (b) wherein the provision in contravention of sub-rule (10) of Rule 96 has been omitted. HELD THAT:- Issue notice.

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• 2025 (1) TMI 211
  Challenge to order u/s 107 of the Central Goods and Services Tax Act, 2017 - appeal to GST Tribunal under Section 112 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Since, the order has been passed by the 1st respondent as an Appellate Authority under Section 107 of the Central Goods and Services Tax Act, 2017, an appeal lies before the GST Tribunal under Section 112 of the Central Goods and Services Tax Act, 2017. However, the Tribunal is yet to be constituted, although it has been notified. The reading of the impugned order indicates that it is based on the Circular No.135/05-2020-GST dated 31.03.2020. While dealing with an identical situation, this Court had taken note of the decisions of the Guwahati High Court, Calcutta High Court, Rajasthan High Court and Delhi High Court, wherein these Courts have struck down the above circular and passed order in M/S. EVEREADY SPINNING MILLS PRIVATE LIMITED, REPRESENTED BY ITS JOINT MANAGING DIRECTOR S. CHANDRAKUMAR. VERSUS THE ASSISTANT COMMISSIONER, O/O. THE ASSISTANT COMMISSIONER OF CENTRAL GST CENTRAL EXCISE, DINDIGUL [ 2024 (7) TMI 1160 - MADRAS HIGH COURT] by remitting the case back to the respondent to pass a fresh order de-novo , in the light of the striking down of the above circular. The case remanded back to the 2nd respondent to pass a fresh order on merits in accordance with law, within a period of three (3) months from the date of receipt of copy of this order - petition allowed by way of remand.

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• 2025 (1) TMI 210
  Territorial jurisdiction - impugned order challenged on the premise that the impugned order levies tax on supplies outside the State of Tamil Nadu, thereby suffers from want of jurisdiction - demand in excess of the amount of taxes proposed in the SCN - Violation of mandate contained in Section 75 (7) of the Act - violation of principles of natural justice - HELD THAT:- In view of the submissions/ consent of the counsel appearing on behalf of the petitioner and the Respondents, the impugned order is set aside and the petitioner shall remit a sum of Rs.1 crore within a period of two weeks from the date of receipt of a copy of this order. Subject to complying with the above condition, it is open to the petitioner to submit its reply within a period of two weeks thereafter treating the impugned order as show cause notice. If any reply/ documents are filed, the Respondent authority shall proceed to complete the assessment in accordance with law after affording the petitioner a reasonable opportunity of hearing. Petition disposed off.

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• 2025 (1) TMI 209
  Challenge to order u/s 73 in Odisha Goods and Services Tax Act, 2017 - HELD THAT:- Section 61, by sub-section (2) requires consideration of explanation furnished. Sub-section (3) says, in case no satisfactory explanation is furnished, the proper officer may initiate appropriate action under, inter alia, section 73. Initiation of the proceeding under section 73 was clearly without jurisdiction. Impugned order is set aside and quashed. Petitioner s said reply dated 29th July, 2021 is to be dealt with under section 61 and thereafter revenue can proceed. Petition disposed off.

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• 2025 (1) TMI 208
  Entitlement to Input Tax Credit (ITC) - extension of time for filing return till 30th November, 2021 - HELD THAT:- Petitioner has moved Court invoking writ jurisdiction on not having filed appeal. In the circumstances, circular dated 15th October, 2024 issued by Central Board of Indirect Taxes and Customs, GST policy wing requiring petitioner to apply for rectification is to be complied with. This observation is on noticing that the circular was issued after the writ petition was presented. Considering departmental procedure is now in place for petitioner to comply with in having impugned order rectified and time for making the application is still available to petitioner, the writ petition is disposed off accordingly.

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• 2025 (1) TMI 207
  Challenge to proceedings under Section 129 of GST Act - Seizure of goods - E-Way Bill not filled - intent to evade tax or not - HELD THAT:- The facts which are admitted and disclosed from the records are these. There was no discrepancy in the goods which were physically found at the time of inspection and details of goods recorded in the E-Way Bill available with the driver of the vehicle. The authorities below have not found any intent to evade tax. This Court has set its face against initiation of proceedings under Section 129 of GST Act in the wake of mere technical breaches. When substantial compliance of the provisions is disclosed and when the physical inspection of goods tallies with the goods declared in the E-Way Bill and no intent of tax evasion is made out, proceedings under Section 129 of GST Act become vitiated. In VSL ALLOYS (INDIA) PVT. LTD. VERSUS STATE OF U.P. AND ANOTHER [ 2018 (5) TMI 455 - ALLAHABAD HIGH COURT] this Court has held In the present case, all the documents were accompanied the goods, details are duly mentioned which reflects from the perusal of the documents. Merely of none mentioning of the vehicle no. in Part-B cannot be a ground for seizure of the goods. We hold that the order of seizure is totally illegal and once the petitioner has placed the material and evidence with regard to its claim, it was obligatory on the part of the respondent no.2 to consider and pass an appropriate reasoned order. In this case, no reasons are assigned nor any discussion is mentioned in the impugned order of seizure and notice of penalty. Conclusion - When substantial compliance of the provisions is disclosed and when the physical inspection of goods tallies with the goods declared in the E-Way Bill and no intent of tax evasion is made out, proceedings under Section 129 of GST Act become vitiated. The impugned order dated 22.12.2023 passed by the respondent no. 2, Additional Commissioner, Commercial Tax Grade-2 (Appeal)-I, State Tax, Noida is unsustainable and is quashed - petition allowed.

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• 2025 (1) TMI 206
  Invocation of extraordinary jurisdiction of this Court under Article 226 of the Constitution challenging the impugned notice, primarily, on the ground that any decision taken pursuant to the impugned notice would be violative of principles of natural justice - HELD THAT:- It is found that the expected response from the Petitioner is already reflected at S. No. 9 of Part-B of the impugned notice. That apart, the Petitioner also claims to have filed a detailed representation explaining its position. The ends of justice would be served by disposing of this Petition by directing the concerned tax authority to take a final decision in the matter, after considering the representation stated to have been filed by the Petitioner and the response reflected against S. No. 9 of Part-B of the impugned notice. Petition disposed off.

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• 2025 (1) TMI 205
  Challenge to order issued u/s 130 of the CGST/SGST Act - petitioner s registration had been canceled prior to the proceedings - transportation of goods without proper documentation - HELD THAT:- The petitioner has not made out any case for interference with Ext.P4. Admittedly certain goods were being transported without the cover of any documents. The case of the petitioner that he is a dealer whose registration had already been canceled and the goods that were being transported are items, the expiry date of which was already over and the goods have been taken over/purchased by a person named Lohi cannot be accepted for more reasons than one. Even assuming that the case of the petitioner now put forth before this Court is correct, the registered person ought to have transported the goods under cover of proper documents. The fact that the registration of the petitioner was canceled does not absolve him of the liability to comply with the provisions of the GST laws and even on the petitioner s own showing there was a sale of goods by the petitioner to the registered person for a consideration of Rs. 1,90,000/-. Therefore it cannot be said that the proceedings under Section 130 were wrongly initiated and concluded against the petitioner. Conclusion - Cancellation of registration does not exempt a person from compliance with GST provisions. Proper documentation is mandatory for the transportation of goods. Petition dismissed.

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• 2025 (1) TMI 204
  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 203
  Seeking withdrawal of the writ petition to avail the appellate remedy - HELD THAT:- Liberty granted, but with just exceptions as to limitation which will have to be considered by the Appellate Authority as per the statute and in accordance with law. The writ petition stands dismissed as withdrawn.

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• 2025 (1) TMI 202
  Challenge to order issued under Section 73 of the Gujarat Goods and Services Tax Act, 2017 - jurisdiction to initiate the proceedings when the respondent No.3 has already initiated the same by issuing the notice in Form GST DRC-01A dated 05.12.2023 - HELD THAT:- Issue Notice, returnable on 05.12.2024. By way of ad-interim relief no coercive action shall be taken by the respondent Nos.1 and 2 against the petitioner qua the impugned order only.

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• 2025 (1) TMI 201
  Rejection of refund application filed by the petitioner on the ground that it is filed belatedly and beyond the time permitted by Section 54 of the Central Goods and Services Tax/State Goods and Services Tax Acts, 2017 - HELD THAT:- Rule 90 of the CGST Rules deals with acknowledgement of an application for refund. Sub-rule (3) of Rule 90 of the CGST Rules no doubt requires the filing of a fresh refund application after rectification of deficiencies pointed out in respect of the first application. However, the said sub-rule does not contemplate that the date of the fresh application has to be considered for the purposes of determining the period of limitation for filing an application for refund under sub-section (1) of Section 54 of the CGST/SGST Acts - The rejection of the application for refund filed by the petitioner by Ext.P4 communication on the ground that the second application filed by the petitioner was beyond the time specified in subsection (1) of Section 54 of the CGST/SGST Acts cannot be sustained in law. Conclusion - The date of the original refund application should be considered for time limit purposes under Section 54, provided deficiencies are rectified. Rule 90(3) should not reset the statutory time limit. Petition allowed.

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• 2025 (1) TMI 200
  Classification of chewing tobacco - to be classified under the heading 2403 99 10 of Customs Tariff Act, 1975 or under Heading 2401 20 90 of the Customs Tariff Act, 1975? - demanding higher compensation cess leviable under the Goods and Service Tax (Compensation to States) Act, 2017 at 160% at Serial No.26 to Notification No.1/2017 - Compensation Cess (Rate), dated 28.06.2017 - HELD THAT:- The Hon ble Supreme Court in State of Madras Vs. Bell Mark Tobacco Co.[ 1966 (10) TMI 106 - SUPREME COURT ], while dealing with the levy of sales tax under the provisions of Madras General Sales Tax Act, 1939 concluded that the chewing tobacco was the manufactured product following the decision in State of Madras Vs. Swasthik Tobacco Factory [ 1965 (12) TMI 90 - SUPREME COURT ]. There, the Court has held that the expression in respect of the goods in rule 5 (1) (i) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, means on the goods , and therefore only the excise duty paid on the goods sold by the dealer is deductible. The petitioner continued to file returns and did not surrender the GST registration. It appears that on 12.11.2018, the petitioner has stated that, the petitioner has also supplied chewing tobacco by classifying the product under heading 2403 99 10 by paying GST compensation cess at 160 % in terms of Serial No.26 of Notification No. 1/2017 Compensation Cess (Rate), dated 28.06.2017 even during the period of Jan 2018 to May 2018 and that from 1st June 2018 to September 2018, paid cess at 72 % by classifying the same product under Tariff Heading 24 03 99 20 - It is the elementary principle that insofar as the classification of products are concerned an assessee cannot change the classification merely to take advantage or benefit of any rate/concession. Classification can also not be altered because the product will attract higher rate of duty/tax. In this case, admittedly, the respective petitioners have classified their products under Heading 2403 99 10 of the Central Excise Tariff Act, 1985 which is similar to Customs Tariff Act, 1975 which are based on HSN Classification. Tariff Heading 2403 99 20 pertains to Preparations Containing Chewing Tobacco . Such preparations are clearly banned in terms of the Government orders issued by Government of Tamil Nadu under regulation 2.3.4 of the Food Safety and Standards (Prohibition and Restrictions on Sales) Regulations, 2011. The classification adopted by the said petitioner under 2403 99 20 would not have permitted the petitioner to manufacture and sell the products - There is no difference between the Tariff classification under the Central Excise Tariff Act, 1985 under Tariff Heading 2403 99 10 and under Customs Tarrif Act, 1975. Under the respective Customs Tarrif Act, 1975, goods falling under the main Tariff Heading 2403 is Other Manufactured Tobacco And Manufactured Tobacco Substitutes; Homogenised or Reconstituted Tobacco, Tobacco Extracts Essences . Conclusion - The petitioners products are to be classified under Heading 2403 99 10, and the Advance Ruling decisions are binding. The food safety regulations do not affect GST classification. Petiton dismissed.

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• 2025 (1) TMI 199
  Challenge to order passed under Section 107 of the CGST/WBGST Act, 2017 - delay in filing the appeal - HELD THAT:- Taking note of the fact that the determination on merits would not only involve detailed scrutiny of records but also determination on factual issues and taking note of the fact that the Appellate Tribunal is yet to be constituted, it would be prudent at this stage to remand the matter to the appellate authority under 107 of the said Act subject to the petitioner s making payment of 20 per cent of the remaining amount of tax in dispute with the respondents towards additional pre-deposit and upon payment of cost of Rs. 25,000/- to the Calcutta High Court Legal Services Committee. Petition disposed off.

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• 2025 (1) TMI 198
  Maintainability of petition - availability of alternative remedy - All that client wants is an opportunity of hearing pursuant to he being permitted to file reply - violation of principles of natural justice - HELD THAT:- Revenue is directed to accept petitioner s reply to the show-cause notice, if submitted on or before 11th September, 2024 along with website copy of this order. Revenue will consider the reply and pass order afresh. For the purpose, impugned order is set aside. Petition disposed off.

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• 2025 (1) TMI 197
  Challenge to assessment order issued u/s 73 of the CGST Act, 2017 - non-application of mind on the part of the first respondent - violation of principles of natural justice - HELD THAT:- It is evident that the petitioner duly filed a reply to the show cause notice on 08.02.2024. However, without considering this reply, the first respondent proceeded to pass the impugned order as if no reply had been submitted, clearly demonstrating a total non-application of mind on the part of the first respondent. Therefore, the impugned order is liable to be set aside and is accordingly set aside. The matter is remanded to the first respondent, who shall consider the reply filed by the petitioner on 08.02.2024 and, after issuing a clear 14-days notice specifying a date of personal hearing, pass appropriate orders on merits and in accordance with law, as expeditiously as possible - Petition disposed off by way of remand.

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• 2025 (1) TMI 196
  Levy of GST - differential amount received by the petitioner due to foreign exchange rate fluctuation constitutes turnover or not - entitlement for deductions from turnover - HELD THAT:- While it may be a fact that the differential amount that is sought to be taxed by the Revenue in fact represents the benefit of an upward exchange rate fluctuation that accrued to the petitioner, it does not detract from the fact that what was received by the petitioner was nothing but the consideration for the sale of equipment s that it had contracted to supply. Under the KGST Act, the word turnover means the aggregate amount for which goods are either bought or sold, supplied or distributed by a dealer, either directly or through another, on his own account or on account of others, whether for cash or for deferred payment or other valuable consideration, provided that the proceeds of the sale by a person of agricultural or horticultural produce, grown by himself or grown on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant, or otherwise, shall be excluded from his turnover. Explanation (1A) to the definition makes it clear that the turnover in respect of a works contract shall be the aggregate amount received or receivable by the dealer for the transfer of goods (whether as goods or in some other form) involved in the execution of such contract. Whether, on account of the exchange rate fluctuation, the benefit of which accrued to the petitioner, the receipt in the hands of the petitioner partook of a nature different from turnover for the purposes of taxation? - HELD THAT:- What accrued to the petitioner was nothing but a realisation in Indian Rupees of the turnover attributable to the works contract performed by it, which was expressed in US Dollars. Further, insofar as the permissible deductions under the KGST Act and Rules have already been granted to the petitioner, the differential amount in the hands of the petitioner represents differential turnover that has not been subjected to tax. Conclusion - Exchange rate fluctuations affecting the sale price in foreign currency do not alter the nature of the amount as turnover under the KGST Act. The statutory definition of turnover encompasses such amounts when converted to Indian Rupees. Revision dismissed.

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• 2025 (1) TMI 195
  Jurisdiction and power to issue SCN u/s 61 of the JGST Act - HELD THAT:- This writ petition is disposed of by giving liberty to the petitioner to explain the reason which has been sought in the second show-cause, within two weeks and the authority concerned will consider the same in accordance with law and depending upon the conclusion, follow-up action be taken in view of the mandate of Section 61 of the JGST Act.

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• 2025 (1) TMI 194
  Rejection of appeal on the ground of delay - HELD THAT:- The impugned order dated 9th May, 2024 rejecting the appeal is set aside. It is restored to file and number, for being expeditiously dealt with on merits by the appellate authority. Mr. Roy submits, his client will diligently prosecute the appeal to avail opportunity of hearing. Petition allowed.

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• 2025 (1) TMI 193
  Challenge to summary of order - absence of a detailed order under Sections 73 and 74 of the GST Act - lifting of attachment of bank accounts of petitioner - HELD THAT:- The impugned summary of order dated 13th August, 2019 is based upon NO ORDER passed under Section 73 of 74 of the GST Act and therefore, such summary of the order is void and ab initio and is accordingly hereby to be quashed and set aside. Petition allowed.

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• 2025 (1) TMI 192
  Seeking a Writ of Mandamus directing respondents to pay to the petitioner amount towards the applicable GST payable by respondents - HELD THAT:- Petition disposed off in view of [ 2023 (6) TMI 93 - KARNATAKA HIGH COURT]

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• 2025 (1) TMI 191
  Cancellation of registration of petitioner - SCN is not a reasoned one - violation of principles of natural justice - HELD THAT:- Issue decided in the case of M/S. NICE ENTERPRISES VERSUS THE DEPUTY COMMISSIONER ST STUI [ 2024 (9) TMI 98 - TELANGANA HIGH COURT] where it was held that There are substance in the argument of learned counsel for the petitioner that such a notice runs contrary to principles of natural justice and deprives the assessee to file an effective reply to the show cause notice. The impugned order set aside - petition disposed off.

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• 2025 (1) TMI 190
  Non-refelction of remitted GST in return GSTR due to some technical reasons - failure to remit GST on the supply made but there are valid tax invoices, proof of payment of the value of goods along with the GST component to the respective suppliers - no clear proof of payment of consideration and tax towards the inward supply and non-receipt of goods in possession - HELD THAT:- Similar questions of facts and law involved in these writ petitions in M/S. M. TRADE LINKS [ 2024 (6) TMI 288 - KERALA HIGH COURT] where it was held that The time limit for furnishing the return for the month of September is to be treated as 30th November in each financial year with effect from 01.07.2017, in respect of the petitioners who had filed their returns for the month of September on or before 30th November, and their claim for ITC should be processed, if they are otherwise eligible for ITC. Conclusion - Procedural amendments to tax laws can be applied retrospectively to ensure fairness, and that remedial measures should be available to address bona fide compliance issues. Petition disposed off.

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• 2025 (1) TMI 189
  Violation of principles of natural justice - failure to consider the petitioner s reply - singular contention is that the exercise of issuance of show-cause notice should not be an empty formality - HELD THAT:- In furtherance of show-cause notice, the petitioner filed reply which has not been considered. This exercise of issuance of notice and obtaining a reply, in our opinion, is not an empty public relation exercise. Instead, it is the codification of principles of natural justice in the statute and the said principle mandates that said reply be obtained before passing any adverse order and there must be an application of mind by considering the reply of the petitioner. In the instant case, in a hasty manner, without application of mind, the impugned order has been passed. Conclusion - The issuance of a show-cause notice and the consideration of any reply thereto are integral to the principles of natural justice. Failure to consider a reply before passing an adverse order constitutes a breach of natural justice. The impugned order dated 09.05.2024 is set aside by reserving liberty to the respondents to consider the reply of petitioner and pass a fresh order - Petition disposed off.

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• 2025 (1) TMI 188
  Classification of goods - leasing of electric vehicles (E-Bikes/ EVs) without operator - to be classified under the heading 9973 or not - applicability of Sl. No. 17 (viia) or (iii) of the Notification No. 11/2017-CT (R) dated, 28 th June, 2017 as amended vide Notification No. 20/2019 30th September, 2019? - rate of tax - HELD THAT:- On examination of the terms and conditions of the Vehicle Lease Agreement, it is seen that the lessor agrees to give and deliver over to the lessee Electric Vehicles (EVs) on lease for forty-eight months unless termination of the contract/agreement. The lessee shall be responsible for regular repair and maintenance of the EVS at his own cost and shall bear and pay running expenses of the EVs. The lessee shall be solely responsible for timely renewal of all legal documents i.e. Registration Certificate, Road Permit, Fitness Certificate and Insurance Policies etc. mandatory for running of the EVs as per applicable laws during the tenure of agreement. The lessee shall keep the EVs insured at all times during the subsistence of this agreement against all risks and bear all the premiums payable to insurance company. In the event of rejection of insurance claim the onus of bearing the repair cost shall be on the lessee. It is also apparent that all the attributes laid down by the Hon ble Supreme Court are evident in this transaction as per the Vehicle Lease Agreement. The said agreement is very clear that the goods available for delivery are e-bikes which are goods. The said agreement provides legal rights to use e-bikes to the lessee. The lessor, during the continuance of the agreement cannot assign, pledge, mortgage, lend or part with the possession of the EVs and cannot allow the said EVs to be used by anybody else except as per the terms of this agreement. So, in the present transaction, it can be said that effective control and physical possession of the goods have been transferred by the supplier Applicant (lessor) to the recipient of the goods (lessee). While using such e-bikes or during the tenure of agreement, the vehicles continue to be in possession of the lessee and the transaction involves transfer of right to use such goods. In other words, the lessee has the possession effective control of the goods in all respect. Reliance is also placed on the judgment of Hon ble Apex Court in THE GREAT EASTERN SHIPPING CO. LTD. VERSUS STATE OF KARNATAKA OTHERS [ 2019 (12) TMI 225 - SUPREME COURT] , wherein the Hon ble Court while interpreting the expression transfer of right to use the goods i.e. in respect of use of a vessel, in a VAT matter (which is the extended definition of deemed sale as per Article 366 (29A) (d) of the Constitution of India) had observed that the vessel was available for delivery and in fact, had been delivered; that there was no dispute as to the vessel and charter had a legal right to use the goods, and the contractor had no right to give the vessel for use to anyone else. This decision is fully applicable to be given fact of the present matter. Conclusion - Leasing of electric vehicles (E-Bikes) without operator is classifiable under the heading 9971 i.e. Financial and related services under entry Sl No. 15 (ii) of Notification No. 11/2017-CT (R) dated, 28th June, 2017 as amended vide Notification No. 20/2019-CT (R) dated, 30th September, 2019 and the rate of tax will be the same rate as applicable on supply of like goods involving transfer of title in goods.

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• 2025 (1) TMI 187
  Classification of services - restaurant services or not - supply of Cakes, bakery items, ice creams, chocolates, drinks and other eatable products prepared at the premises of the Petitioner and supplied to the customers from the counter with the facility to consume the same in the air-conditioned premises itself - composite supply or not - supply of items such as birthday stickers, candles, birthday caps, snow sprays etc. related items which are essentially used in birthday celebration - sale of handmade chocolates which are manufactured in the workshop of the Petitioner and are utilised for the purpose of providing other services such as shakes, brownies - nature and rate of tax. Classification of services - restaurant services or not - supply of Cakes, bakery items, ice creams, chocolates, drinks and other eatable products prepared at the premises of the Petitioner and supplied to the customers from the counter with the facility to consume the same in the air-conditioned premises itself - HELD THAT:- On examining the records of the instant case, it was found that the Petitioner is supplying Cake, Ice Cream and other items of food which are made to order along with certain services. Hence the Petitioner is supplying both goods and services. In order to examine as to whether the said supply satisfies the conditions of a composite supply , it is pertinent to us to discuss the provisions of Section 2 (30) of the CGST Act - Since the supplies made by the Petitioner in its outlets involve both supplies of goods and services, with one of them as principal supply i.e. supply of goods which are naturally bundled and supplied in conjunction with each other, therefore, the same has to be considered as a composite supply. Further, Restaurant Services have been defined under the purview of composite supply (in clause (b) of para 6 of Schedule-II), the relevant extract is as under. It is seen that the Petitioner is supplying items of food as a part of service and since the provision of eating in the premises is provided or the customers may take the same away from the place, the transactions under question are covered under the amended provision of Entry 7 (i) of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 as amended by Notification No. 46/2017-Central Tax (Rate), dated 14-11-2017 and attracts a tax of 2.5% without any input tax credit. Supply of items such as birthday stickers, candles, birthday caps, Balloon, Carry Bags, snow sprays etc - HELD THAT:- The said related items are being purchased and sold as such without any further processing in the restaurant. Sale of such bought out goods as such, is not a service but sale of goods. Entry No. 7(i) of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 relating to the supply of services reads as under: Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or drink, where such supply or service is for cash, deferred payment or other valuable consideration, provided by a restaurant, eating Joint including mess, canteen. - Since this notification is applicable only to supply of services and not supply of goods, only Notification No. 1/2017-Central Tax (Rate) is applicable and hence all the supply of bought out goods as such which are enlisted by the Petitioner is taxable as supply of goods and at rates applicable as per Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017 as amended from time to time. Input tax credit - HELD THAT:- Since the goods as specified above are supplied and output tax is payable on the same, the Petitioner is eligible to take applicable input tax credit which is admissible as per the GST laws. Conclusions - i) The petitioner s operations qualify as Restaurant Services , taxed at 5% GST. ii) Items like birthday caps and decorative items are taxed as goods per Notification No. 1/2017-Central Tax (Rate). iii) The petitioner is ineligible for the Composition Scheme due to ice cream manufacturing.

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• Income Tax

• 2025 (1) TMI 186
  Grant of registration u/s 12AA - charitable activity - as per CIT (E) that the activities of the trust is in the nature of trade, commerce or business and covered by proviso to Section 2 (15) - HELD THAT:- Principal Commissioner or the Commissioner has to satisfy himself about the objects of the trust or institution and the genuineness of its activities as required under sub-clause (i) of clause (a) and compliance of the requirements under sub-clause (ii) of the said clause, and has to pass an order in writing registering the trust or institution and a copy of the order so passed will be sent to the applicant. Reverting to the facts of the present case in light of the order passed by this Court in Chhattisgarh Urology Society s case [ 2018 (2) TMI 1156 - CHHATTISGARH HIGH COURT] and in view of the finding of the learned ITAT, it is quite vivid that the activities of the assessee Society are for charitable purpose for public at large and in that view of the matter, the learned ITAT is absolutely justified in directing the CIT(E) to grant registration under Section 12AA of the IT Act by setting aside the order of the CIT(E), as such, the order impugned passed by the ITAT is in accordance with law. Accordingly, the finding recorded by the CIT(E) that the activities of the respondent assessee Society is in the nature of trade, commerce or business and covered by proviso to Section 2 (15) of the IT Act was not the correct finding. Decided in favour of assessee.

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• 2025 (1) TMI 185
  Stay application rejected - petitioner directed to deposit 20% of the demand - HELD THAT:- The respondent authorities has passed the assessment order dated 31.03.2024 passed u/s 143 (3) along with copy of demand notice issued under Section 156 against the petitioner. Thereafter the petitioner has filed an application u/s 220 (6) of the Income Tax Act, 1961 filed on 29.04.2024 before respondent No. 3. The respondent-No. 3 has not decided the case on the basis of prima facie case, balance of convenience, irreparable loss caused to the petitioner, Genuine hardship, CBDT instruction and hi-pitched assessment. The respondent No. 3 rejected the application without reasoned and speaking order on 14.06.2024. Subsequently, aggrieved of the same, the petitioner has filed review application before the respondent No. 2/PCIT (Central) Bhopal. The respondent No. 2 has also not decided the review application on merits and passed the order to pay 20% of the tax liability by way of installments in 5 months on. 18.10.2024. Thus, the impugned orders dated 14.06.2024 and 18.10.2024 are non-speaking orders. AO has not adopted the correct procedure in deciding the stay application and review application of the petitioner and has not followed the guidelines as stated by Bombay High court in KEC International Ltd. [ 2001 (3) TMI 32 - BOMBAY HIGH COURT] and in UTI Mutual Fund [ 2012 (3) TMI 333 - BOMBAY HIGH COURT] and also the decision rendered by this Court in M/s Aarti Sponge Power Ltd. [ 2018 (4) TMI 1284 - CHHATTISGARH HIGH COURT] .

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• 2025 (1) TMI 184
  Disallowance u/s 36(1)(iii) - interest free advances given by assessee - HELD THAT:- CIT(A) has given finding that the prudent business man will never give such interest free advances, the fact remains that these are for a purchase of material and it was for conducting the business of the assessee and therefore, the same cannot be stated as certain interest free loan / advances was not rightly disallowed by the AO u/s 36(1)(iii). In fact, the opening balance of these advances was submitted by the assessee in the details and therefore, the contention of the A.R. that such funds were not diverted towards interest free advances appears to be justifiable from the records i.e. Tax Audit Report, Financial Statements and the evidence in support of these advances given to the related parties. Thus, the disallowance made by the AO as well as confirmed by the CIT(A) is not justifiable in light of the decision of CARGILL GLOBAL TRADING (P.) LTD. [ 2011 (2) TMI 209 - DELHI HIGH COURT] and SA BUILDERS LTD. VERSUS COMMISSIONER OF INCOME-TAX [ 2006 (12) TMI 82 - SUPREME COURT] . Thus, the appeal of the assessee is allowed.

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• 2025 (1) TMI 183
  Assessment u/s 153C - incriminating material which was seized had to pertain to the Assessment Years in question - mandation of recording of satisfaction - HELD THAT:- Satisfaction note recorded by the AO of the searched person u/s 153C of the Act when read along with the satisfaction note recorded by the AO of the appellant u/s 153C he two are similar in content. The narration of facts of search and seizure operation, details of documents allegedly pertaining to the assessee are mirror images except for the fact that in the satisfaction note recorded by the AO of searched person, the said AO uses the words that the allegedly the seized documents pertain to a person other than the person searched and the AO of the assessee before us record the satisfaction that the documents pertain to an information contained in the said documents related to Shri Rajiv Agarwal, i.e., a person other than the person searched u/s 132 of the Income-tax Act, 1961. It is very apparent from the two satisfaction notes before us that none of the alleged incriminating documents has been examined or the contents of these documents analysed in a manner to show that how these alleged documents have any bearing on the determination of total income of the assessee for a particular year for which the reassessment was initiated by issuance of notice u/s 153C r.w.s. 153A of the Act. In the case of Canyon Financial Services Ltd. Vs. ITO [ 2017 (7) TMI 539 - DELHI HIGH COURT] has held that where satisfaction notes recorded by Assessing Officer of assessee and Assessing Officer of searched person were identically verdict carbon copy proceeding could not be initiated against assessee u/s 153C. When the satisfaction notes are compared with the notice u/s 142(1) of the Act along with the annexure having analysis of the seized material, it appears that at the time of assumption of jurisdiction by way of recording the satisfaction, the AO of the assessee before us had not applied his mind while issuing the notic. CIT(A) has erred in law by not appreciating that the impugned assessment orders in both the years were based on illegal assumption of jurisdiction on the basis of satisfaction note which was recorded without application of mind and quite in a mechanical manner. The reasons do not demonstrate how the nature of seized material has bearing on the total income of the assessee and to which assessment year particularly. The satisfaction note does not reflect any rational connection with or relevant bearing on the alleged seized material and the alleged undisclosed income of the assessee for a particular year sought to be assessed. Decided in favour of assessee.

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• 2025 (1) TMI 182
  Reopening of assessment u/s 147 - reason to believe or reason to suspect - addition u/s 68 - HELD THAT:- AO solely relied on some unspecified and unintelligible information in the category of high risk transactions of unsecured loans. Allegations towards escapement without giving specific particulars of the lenders is apparently in the realm of bald allegations devoid of any specific details. To reiterate, the name of the lendor(s) who are alleged to be susceptible to section 68 of the Act do not feature in the reasons recorded at all. No definitive link is present. At the time of formation of belief, the AO is not shown to be in possession of any document of adverse nature which may led to allegations of escapement. Clearly, the AO has harboured belief on vague and non-descript hypothesis emerging from so-called analysis of any specified information collected. No tangible material has been referred in the reasons recorded which is capable in igniting the belief towards alleged escapement. Mere identification of transactions fueling in high risk transaction category ipso facto would not provide cause of action to invoke the drastic power of reopening of a concluded assessment. Requirement of main provision of section 147 is thus apparently not met. AO must have reason to believe that chargeable income has escaped assessment. The expression reason to believe is the most valuable safeguard available to prevent arbitrary exercise of jurisdiction. It is trite that the reason to suspect cannot be equated with expression reason to believe . The reasons recorded in the instant case, gives an infallible impression that it is a case of reason to suspect on so-called risk transactions categorised by the automated system of the Department. rather than reason to believe . It is well-settled that notice of re-opening can be supported by the Revenue within the confines of the reasons recorded by the AO alone. AO cannot supplement the reasons at a later stage. Other principle which is equally well-settled and which applies in the present case is that re-opening of assessment would not be permitted for a fishing or a roving inquiry as a part of requirement of main provision of section 147 of the Act. The purported belief in the instant case is premised on some vague and undisclosed grounds and thus, a mere pretence. Such action does not pass the test of reason to believe . We thus, see no semblance in the action of the AO on the touchstone of main provision of section 147 of the Act. Assessee appeal allowed.

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• 2025 (1) TMI 181
  Validity of Reopening of assessment u/s 147 - Borrowed satisfaction - AR argued that the AO had mechanically recorded the reason for reopening the case and the AO had not verified the veracity of the information received from the Investigation Wing of the Income Tax Department - AR further contended that the reassessment proceedings were based on change of opinion - HELD THAT:- This case is squarely covered by the decision of ATS Infrastructure Ltd. [ 2024 (7) TMI 1441 - DELHI HIGH COURT] wherein the case of Manjinder Singh Kang [ 2012 (6) TMI 616 - PUNJAB AND HARYANA HIGH COURT] and N. Govind Raju [ 2015 (8) TMI 271 - KARNATAKA HIGH COURT] were discussed and distinguished. The case of Mehak Finvest P. Ltd. [ 2014 (11) TMI 56 - PUNJAB HARYANA HIGH COURT] are also held distinguishable on the facts of the case. The decision of the Hon ble Delhi High Court in the case of ATS Infrastructure Ltd. [ 2024 (7) TMI 1441 - DELHI HIGH COURT] are binding in nature as the AO was situated within the territorial and subjective jurisdiction of the Hon ble Delhi High Court. Thus, hold that there were no infirmities in the impugned orders and we thus, decline to interfere with. We hold that reassessment orders in these cases were bad in the eyes of the law and therefore, these are hereby quashed. Decided in favour of assessee.

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• 2025 (1) TMI 180
  Denial of deduction u/s 10AA - inadvertent mistake in e-filing of return of income - technical error/glitch in the software used by the assessee for preparing.xml file format wherein inadvertently the deduction u/s 10AA could not be captured in appropriate column of the computation of income - fourth year of claiming of deduction. HELD THAT:- The assessee made his elaborate submissions before the Ld. Addl./JCIT(Appeals) with evidences stating that while e-filing the return there corrupt an error due to which the deduction claimed u/s 10AA was denied even though the assessee has duly furnished Form 56F in the prescribed Form by Chartered Accountant. Disallowance of the deduction claimed u/s 10AA of the Act arose due to a technical glitch/inadvertently the deduction could not be filled in the appropriate column of computation of Income. But the total income has been computing by allowing claimed deduction only. Upon reviewing the submissions made by the appellant and examining the data available on the system, the prima facie of the appellant s case is found to be acceptable as per the order of the Ld. Addl./JCIT(Appeals). No valid reason to interfere with the findings given for allowing the claim of deduction u/s 10AA of the Act to the assessee which was otherwise denied due to technical glitch in e-filing the return. Decided against revenue.

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• 2025 (1) TMI 179
  Addition u/s 69A - unexplained money - cash deposited by assessee in his bank account during the year - HELD THAT:- Assessee claims to have deposited Rs. 47,53,965/- from the various amounts kept by his wife as gifts received during the 11 years on account of marriage, marriage anniversary, celebrations on account of birthday of two children, cash received from uncle, sister, mother and brother. It is a fact that the appellant/assessee has failed to furnish the details of business activities carried by him. As per e-filing portal, assessee filed Income-tax Returns for the years 2010-11, 2011-12 2015-16 only. The bank statements show that assessee conducted activities beyond assessment year 2015-16 but had not filed any ITR. The assessee has not offered income arising out of his activities for taxation. Be that as it may, in view of facts and circumstances of the case, to balance equity and to meet the ends of justice, we hold that source of cash deposits to the extent of Rs. 10,00,000/- as unexplained and remaining cash deposits to be out of explained source. Assessee had transferred Rs. 10,00,000/- each vide entries dated 11.05.2013 14.05.2013 to Harbans Lal Gulati who had returned Rs. 20,00,000/- vide bank entry dated 19.01.2017 in South Indian Bank, Janakpuri stand fully explained. The deposits in bank thus represents repayment of earlier payment to Gulati. Appellant/assessee has claimed that his family members vide various bank credit entries had transferred Rs. 2,63,600/- (i.e. Rs. 2,09,600/- from his mother, Rs. 27,000/- from his wife, Rs. 17,000/- from his brother and Rs. 10,000/- from his father). As such, the additions of Rs. 23,26,003/- under section 69A is unsustainable and is deleted. Appeal filed by assessee is partly allowed.

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• 2025 (1) TMI 178
  Unaccounted/unexplained income - Unexplained Cash Credit u/s 69A - assessee was selected for scrutiny under CASS for the reason that there was an abnormal increase in the cash deposits during the demonetization period - HELD THAT:- AO was of the view that the assessee had inflated cash sales even prior to the declaration of the demonetization and had introduced bogus sales and had deposited cash so generated in the books of account to account for his unaccounted money, which was otherwise lying outside the books of account. While arriving at this conclusion, the AO has heavily relied on preponderance of probability and, thus, has worked on the assumption/presumption that the assessee had resorted to this kind of exercise for the purpose of depositing his unaccounted money in the Bank account through the cash book. While doing so, as rightly pointed out by the A.R., the AO has not brought on record any single piece of evidence, which would suggest that the assessee has inflated sales so as to create cash balance in the books of account. Moreover, no deficiency has been pointed out by the AO in the books of account nor has the availability of stock been doubted. Thus, the AO has, on the one hand, accepted the sales and purchases declared by the assessee and, on the other hand, has made addition on account of bogus sales made out of books of account and deposited in the Bank account during the period of demonetization. Undoubtedly, there has been a substantial jump in the turnover during the period of demonetization, but without there being any evidence to justify the claim of the AO that such jump in turnover was due to bogus sales having been created in the books, such claim remains a mere presumption. Although the principle of preponderance of probability is an accepted principle, but such probability has to be backed by some cogent evidence and the onus is squarely on the Department to establish that what is being said to be probable has proper evidence to support such claim. The Ld. First Appellate Authority, while dismissing the appeal of the assessee has also not considered this aspect. AO was legally not entitled to calculate sales on a hypothetical basis completely ignoring various evidences submitted during the course of assessment proceedings in the form of VAT returns, Purchase Bills and quantitative details, etc. Once the amount has been declared in the VAT return as well and the same has also been accepted by the AO, such sales cannot be considered as concealed income. Appeal of assessee allowed.

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• 2025 (1) TMI 177
  TP Adjustment - determination of transfer price for supply of electricity from thermal unit to washeries division of the assessee during the year - reference u/s 92CA(1) - TPO applied an average of the rate published by CSEB (as adjusted by transmission and distribution cost but not adjusted for transmission and distribution losses) and the rate of trade as per IEX (without adjusting for any transmission / distribution loss or charges) and arrived at the rate of Rs 2.868 per unit to be the ALP - fair market value for the transfer rate of power or the selling rate of power in the industry by CSEB is Rs 4.05 per unit - HELD THAT:- Whether the said rate of Rs 4.05 per unit being the prevailing market rate could be used for transfer of electricity between two units of the same Assessee for captive consumption was subject matter of consideration by the Hon ble Supreme Court in the case of CIT vs Jindal Steel Power Ltd [ 2023 (12) TMI 417 - SUPREME COURT] as held market value of the power supplied by the State Electricity Board to the industrial consumers should be construed to be the market value of electricity. It should not be compared with the rate of power sold to or supplied to the State Electricity Board since the rate of power to a supplier cannot be the market rate of power sold to a consumer in the open market. The State Electricity Board s rate when it supplies power to the consumers have to be taken as the market value for computing the deduction under section 80-IA of the Act. Thus, Tribunal had rightly computed the market value of electricity supplied by the captive power plants of the assessee to its industrial units after comparing it with the rate of power available in the open market i.e., the price charged by the State Electricity Board while supplying electricity to the industrial consumers. In the present case before us, the market value is Rs 4.05 per unit being the rate charged by CSEB on the industrial consumers, whereas the transfer price between two units of the assessee was Rs 4 per unit. The same is well within the market rate of Rs 4.05 per unit and hence the price of Rs 4 per unit is to be construed to be at ALP. Accordingly, no transfer pricing adjustment is warranted. Addition towards Employees contribution to PF and towards disallowance of depreciation on the ground that the said figures does not even pertain to the assessee before us - AR was very fair in stating that the said issue may be restored to the file of Learned AO for denovo adjudication for adopting the correct figures in accordance with law after considering the facts and figures pertaining to the assessee and make an addition if warranted.

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• 2025 (1) TMI 176
  Validity of reopening of assessment as barred by limitation - period of six years expired - HELD THAT:- The notice u/s.148 issued on 27/07/2022 is clearly barred by limitation. The reason being the test for checking the time limit and the validity of notices issued u/s.148 under new regime applicable from A.Y. 2021-22 and prior regime is, whether period of six years had expired at the time of issue of such notice or not. In the case of assessee, the period of six years had expired on 31/03/2022 and consequently, the notice dated 27/07/2022 is clearly barred by limitation and on this ground, the assessment proceedings u/s.147 is hereby quashed.

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• 2025 (1) TMI 175
  Assessment u/s 153A - Invalid approval granted u/s 153D - as argued approval granted by the superior authority u/s 153D is non-est approval being a mechanical and a perfunctory approval and suffers from the vice of non-application of mind - HELD THAT:- On a perusal of the approval addressed by the Ld. Addl. CIT to the AO, it emerges that the Ld. Addl.CIT has not uttered a word on the subject matter of additions. The approval is in the nature of Performa approval; the approval granted smacks of mechanical or perfunctory approval in a symbolic exercise of powers vested u/s 153D of the Act. Approval memo is totally silent on the issues involved and has granted omnibus approval without any thoughtful process being discernible. The Order Sheet has not docketed any interaction or directions of the Ld. Addl. CIT in the course of assessment either. There is no other material to show involvement of the superior authority in the course of assessment. In the first para of the approval memo, it is mentioned that draft assessment order has been received for approval and in the second para of the approval memo, it was stated that the draft assessment order has been approved. Nothing else is discernible. Such mechanical approval cannot be countenanced - the assessment order based on ritualistic approval stands vitiated and thus quashed. Assessee appeal allowed.

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• 2025 (1) TMI 174
  Income deemed to accrue or arise in India - taxability of administrative support service charges as fees for technical services (FTS) in terms of Article 13 of Double Taxation Avoidance Agreement (DTAA) between India United Kingdom (UK) - HELD THAT:- As decided in assessee s own case in A.Y. 2012- 13. [ 2023 (3) TMI 1485 - ITAT MUMBAI] the services provided by the group entities or holding company to its subsidiaries as support services to run their business effectively will not be considered as FTS or FIS under the treaty and these services does not amount to make available technical or skill or expertise while providing these services. Thus the services provided by the assessee to its subsidiaries are only to support to function the administration and day to day management of JIPL considering the fact that JIPL does not have any infrastructure to carry out any administration and day to day management. These facts are confirmed by the lower authorities and also facts on record. Therefore, these services are outside the ambit of FIS and FTS. Hence we are incline to allow the grounds raised by the assessee. Taxability of reimbursement of expenses as FTS under Article 13(4) of India-UK treaty - As decided in assessee s own case in A.Y. 2012- 13 [ 2023 (3) TMI 1485 - ITAT MUMBAI] we hold that reimbursement of expenses cannot be treated as FTS. Accordingly, we uphold the decision of learned first appellate authority by dismissing the grounds raised.

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• 2025 (1) TMI 173
  Revision u/s 263 - TDS u/s 194I or 194C - Payment in nature of external/infrastructure development charges to HUDA - liability u/s 201/201(1A) - HELD THAT:- The issue under consideration is already pending before ld. CIT(A) and the issue under consideration is not settled considering the fact that Hon ble Supreme Court has stayed the operation of Hon ble Delhi High Court decision in the case of Puri Construction (P.) Ltd. [ 2024 (2) TMI 756 - DELHI HIGH COURT] The issue under consideration is payment of EDC to HUDA which is pending before first appellate authority where the provisions of section 194I or 194C can also be the point of adjudication. PCIT found that it is against the law and also observed that it is against the interest of Revenue. After careful consideration, we are of the view that the slab at which the AO calculated liability u/s 201/201(1A) is at 10% considering the same as rental payment. However, ld. PCIT has cancelled the relevant assessment order following the provisions of section 194C for which slab of 2% is applicable. It is not against the interest of Revenue. We observed that the order passed by the AO is not erroneous when the same was passed and also this is a debatable issue not settled considering the fact that the issue was pending before CIT (A) and also PCIT should not have proceeded to initiate proceedings u/s 263 when the same was pending before the ld. CIT (A). Let alone the fact that there is no prejudicial to the interest of Revenue in this case. Therefore, we are inclined to set aside the order passed u/s 263. Assessee appeal allowed.

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• 2025 (1) TMI 172
  Validity of reopening of assessment in the absence of proper service of notice u/s 148 - HELD THAT:- No notice u/s. 148 was ever served on the assessee. The AO without service of mandatory notice u/s. 148 of the Act, proceeded to complete the assessment. The proceedings u/s. 147 of the Act without mandatory notice u/s. 148 of the Act are bad and liable to be quashed. As in the case of CIT vs. Laxman Das Khandelwal,[ 2019 (8) TMI 660 - SUPREME COURT] has held that provisions of section 292BB of the Act does not save complete absence of notice u/s. 148 of the Act. In the instance case since there was no service of notice u/s. 148 of the Act nor the assessee was provided the reasons for issuance of notice u/s. 148 of the Act, the assessment order passed in the instant case is held to be without jurisdiction. Appeal of the assessee is allowed.

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• 2025 (1) TMI 171
  Addition u/s 68 - unexplained cash credit being share capital/ share premium - person/investors has not appeared before the AO - assessee company/investors did not comply with summon u/s 131 by producing the director / principal officer/ individual of the share subscribing companies - HELD THAT:- The assessee has furnished all the evidences proving identity and creditworthiness of the investors and genuineness of the transactions but AO has not commented on these evidences filed by the assessee. Besides the investors have also furnished complete details/evidences before the AO which proved the identity, creditworthiness of investors and genuineness of the transactions. Similar ratio has been laid down in the case of CIT Vs Orchid Industries (P) Ltd [ 2017 (7) TMI 613 - BOMBAY HIGH COURT] by holding that provisions of section 68 of the Act cannot be invoked for the reasons that the person has not appeared before the AO where the assessee had produced on records documents to establish genuineness of the party such as PAN, financial and bank statements showing share application money. Crystal Networks Pvt. Ltd. [ 2010 (7) TMI 841 - KOLKATA HIGH COURT] wherein it has held that where all the evidences were filed by the assessee proving the identity and creditworthiness of the loan transactions, the fact that summon issued were returned unserved or no body complied with them is of little significance to prove the genuineness of the transactions and identity and creditworthiness of the creditors. Assessee appeal allowed.

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• 2025 (1) TMI 170
  Unexplained investment - Relying on the seized material the assessment u/s 153C was completed - assessment order passed by the AO for want of Certificate u/s 65B of IE Act by relying electronic evidence for completing assessment u/s 153A - HELD THAT:- In the instant case, admittedly there is no certificate under section 65B of the Indian Evidence Act, 1872. Thus, the evidence in the form of a print out taken from the phone owned by another person, if was to be relied for completion of assessment of assessee, the certificate in terms of section 65B of the Indian Evidence Act, 1872 was necessary. That not being there the alleged incriminating document when taken out of case of the ld. AO, nothing is left to draw any inference of payment of any on money amount. In a case like this, where the alleged seized material extract as reproduced in the assessment order seems to be not quite legible and Department had to prepare a special coloured copy of the same, so that this bench can be appraised of the content, that all the more required the certificate u/s 65B of the Indian Evidence Act. If this piece of document is considered, the same has no signatures of the assessee or even Shri Anil Narang. There is no separate piece of evidence establishing the handwriting to be of Shri Anil Narang or the assessee. As we go through the contents there are no corroborating facts to establish that any on money was paid separately. The ld. AO himself mentions that when Shri Anil Narang was confronted with this document and his statement u/s 131(1A) of the Act was recorded, Shri Anil Narang had deposed that he is unable to understand the document. As with regard to the transaction also he had shown his ignorance. There is no independent inquiry also by the AO of the fact that the value of the property was otherwise thrice at Rs. 1,67,00,000/- than the amount paid by the assessee of Rs. 67,50,000/- by way of banking transactions. Thus being a case of no evidence, the addition is not sustainable under law. Assessee appeal allowed.

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• 2025 (1) TMI 169
  Validity of Revision proceedings against company dissolved/insolvent - HELD THAT:- We find that provisions contained u/s 238 of the Code are having an overriding effect over all other Central and State statutes including Income Tax Act as held by Hon ble Supreme Court in case of PCIT vs. Monnet Ispat and Energy Ltd. [ 2018 (8) TMI 1775 - SC ORDER ] Section 238 of the Code will have overriding effect over all other Central and State statutes including the Income Tax Act and all the claims including claim of the Income Tax Department under the Income Tax Act, 1961 shall be entertained by the Official Liquidator u/s. 53(1) of the Code. Appeal filed by the assessee has become infructuous and dismissed as such. However, the assessee is at liberty to approach the Tribunal for reinstitution of the appeal and the Tribunal shall consider such application appropriately, as per law.

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• 2025 (1) TMI 168
  Addition u/s 69A - Cash deposited into the Bank accounts during the demonetization - HELD THAT:- From the bank statements filed by the assessee, is clear that assessee had withdrawn cash from the banks which was finally deposited when demonetisation was announced. CBDT wide instruction number 3/2017 dated 21/02/2070 announced that, any taxpayers above 70 years of age was allowed to deposit the cash upto Rs. 5 lakh per person and the source of such amount can either be household savings or savings in the past income. Thus to the extent of Rs. 5 lakh the disallowance made is not justified. Women have a tendency of accumulating cash saved from household budgets and from whatever cash they receive from relatives and family members during festivals and occasions. Honourable Prime Minister and also CBDT considering this aspect had announced that a lady assessee is a housewife and do not have any business would not be questioned if the bank deposits during the demonetisation were found to be less than 2.5 lakhs. In the present facts of the case considering the age of the assessee and the tendency to hold onto the cash at that age cannot be overlooked. Assessee has filed bank statements that are self-explanatory regarding the withdrawals which was held by the assessee as on the date of demonetisation being declared. Hence assessee has duly explain the source of balance 5 Lakh cash deposited into the accounts, and therefore no addition can be made u/s 69 unless there is a cogent evidence to prove that the amount deposited in the bank account was undisclosed income that falls outside the bank statements filed by the assessee. Decided in favour of assessee.

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• 2025 (1) TMI 167
  Addition u/s 14A r.w.r. 8D - no exempt income is earned - HELD THAT:- Since admittedly the assessee has not received any exempt income during this year, therefore, respectfully following the above decision passed by the Jurisdictional Tribunal [ 2024 (10) TMI 479 - ITAT PUNE ] in absence of any adverse material brought on record by the revenue, we are of the considered opinion that no addition is called for u/s 14A r.w. Rule 8D of the IT Rules. We therefore do not find any infirmity in the order passed by Ld. CIT(A). Accordingly, the same is upheld. Appeal filed by the Revenue is dismissed.

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• 2025 (1) TMI 166
  Allowability of deduction claimed u/s. 80P(2)(a)(i) - HELD THAT:- The grounds related to allowability of deduction claimed u/s. 80P(2)(a)(i) of the Act is squarely covered in favour of the assessee by the judgment of Mavilayi Service Cooperative Bank Ltd. [ 2021 (1) TMI 488 - SUPREME COURT] Accordingly, we dismiss this ground of the Revenue in all these appeals. Disallowance u/s. 40(a)(ia) with respect to interest paid to the depositor - HELD THAT:- We completely agree with the view taken by the ld. CIT (A) that once it is held that the assessee is primary agricultural society, the provisions of sec. 194A(3)(viia) of the Act are squarely applicable and accordingly, no deduction of tax at source is required to be made on the interest payment to depositors held with primary agricultural society. Decided against revenue.

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• 2025 (1) TMI 165
  Validity of Reassessment proceedings - unexplained deposit in the bank account - HELD THAT:- Reasons for reopening of assessment namely credit entries of assessee s minor child was not clubbed the same in assessee s Return of Income. Ld. CIT(A) after considering the SBI Account which was opened in the name of Shri Vivan Joshi but later assessee s name was added as an joint account holder. The rental income from SBI Life Insurance Co. and Aditya Retail were offered for taxation by the assessee through this Bank account. Thus the assessee disclosed the transaction reflected in the bank account. CIT(A) deleted the addition as unexplained credit deposit in the bank account which was the prime facie basis for reopening of assessment. When the basic reasons recorded for reassessment itself is deleted, there cannot be any further addition in the reopened assessment, and such additions cannot sustainable in law. Since the foundation of reassessment proceedings is a valid notice, if this notice is held to be invalid, the entire edifice sought to be raised on such foundation has to collapse and therefore the entire reassessment proceedings liable to be quashed. As relying on B.P. PODDAR FOUNDATION FOR EDUCATION [ 2022 (9) TMI 660 - CALCUTTA HIGH COURT] and JOGINDER SINGH [ 2015 (6) TMI 1217 - ITAT AMRITSAR] no hesitation in holding that the reassessment itself is bad in law since Ld. CIT(A) deleted the impugned addition being unexplained deposit in the bank account which was clearly disclosed by the assessee in his Return of Income - Decided in favour of assessee.

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• 2025 (1) TMI 164
  Validity of Reopening of assessment u/s 147 - non-disposal of the objection before finalization of the assessment order - HELD THAT:- Since in the instant case, the AO has passed the assessment order without disposing-of the objections filed by the assessee for reopening of the assessment, the impugned assessment will not be valid as per the decision rendered in the case of KSS Petron Private Ltd. [ 2016 (10) TMI 1112 - BOMBAY HIGH COURT ] Assessee appeal allowed.

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• 2025 (1) TMI 163
  Disallowance u/s. 37 - disallowance of provision for Bad debts written back and disallowance of warranty provision - HELD THAT:- Assessee has rightly computed the disallowable item under the excess of provision for bad debts and excess of provision of warranty. However, due to absence of respective columns in the income-tax return to demonstrate the adding back of the provisions made in the profit and loss account and then claiming of actual expenses incurred during the year, the assessee has netted off both the amounts and has only stated the amount as the amount disallowable during the year. Even though these details were filed before the AO it seems that he has overlooked the submissions filed by the assessee. Considering the details of actual break up of warranty supplied during the year and the customer-wise break up of bad and doubtful debts written back during the year which are majorly the limited companies and mainly include Tata Motors Ltd. and Ashok Leyland Ltd. etc., find that the claim of the assessee was justified and CPC erred in making the alleged adjustments. Therefore set-aside the finding of the CIT(A) and delete the disallowances made u/s. 37 and allow the effective Grounds raised by the assessee.

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• 2025 (1) TMI 162
  Addition u/s 68 - unexplained cash credit - deposits in its bank accounts during the demonetization period - HELD THAT:- AO while framing the assessment vide his order u/s 144 had not rejected the books of account of the assessee company. On the contrary, the AO by adopting the Net profit disclosed in the Profit and loss account of the assessee company as the base figure for determining/assessing its income had accepted its books results . As the AO had accepted the books of accounts of the assessee company, therefore, there could be no justification for him to have rejected the explanation of the assessee company that the cash deposits made during the demonetization period in his subject bank accounts were sourced from its business receipts forming part of the said books of accounts for the year under consideration. A view to the contrary would lead to incongruous result, i.e, while for the net profit arising from the duly accounted business transactions is accepted and brought to tax by the AO; but the said business transactions explaining the availability of cash-in-hand with the assessee as on 08.11.2016 is not to be accepted. A.O cannot be allowed to blow hot and cold at the same time, i.e., accept the book results (as disclosed by the assessee company based on its audited books of account), and at the same time, reject the duly accounted business transactions disclosed in the books of accounts which revealed that the cash deposits in the bank accounts of the assessee company were sourced out of the cash-in- hand available with it as on 08.11.2016. The fact as can be gathered from a perusal of the cash book of the assessee company, reveals that the availability of cash-in-hand of Rs. 12,00,442.54 as on 08.11.2016 is found to be in parity with the cash-in-hand available with the assessee both during the pre-demonetization and post-demonetization period, a fact which further dispels all doubts as regards the claim of the assessee company that the cash deposits in its bank accounts during the demonetization period was sourced from the cash-in-hand available with him as on 08.11.2016. No finding no justification on the part of the AO in treating the cash deposits as unexplained cash credit u/s. 68. Assessee appeal allowed.

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• 2025 (1) TMI 161
  Deduction u/s. 80P(2)(d) - Interest received by the assessee society from Raipur Central Co-operative Bank - HELD THAT:- AO is directed to allow the assessee s claim for deduction u/s. 80P(2)(d) interest received by the assessee society from Raipur Central Co-operative Bank. Thus, the Ground of appeal No.1 raised by the assessee society is allowed. Deduction of Income Tax Paid - As per the mandate of Section 40(a)(ii) of the Act, any sum paid on account of any rate or tax levied on the profits or gains of any business or profession or assessed at a proportion of or otherwise on the basis of any such profits or gains is not deductible while computing the business income, therefore, we find no infirmity in the view taken by the lower authorities, and thus, approve the same. Thus, the Ground of appeal No.2 raised by the assessee society is dismissed in terms of our aforesaid observations.

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• 2025 (1) TMI 160
  Nature of receipt - severance fee received by way of compensation on voluntary retirement under the Compulsory Retirement Scheme (CRS) - income receipt or capital receipt - HELD THAT:- No infirmity in the order of the ld. ADDL/JCIT(A)-1, Chandigarh in concluding that as severance compensation was made to the assessee at or in connection with the termination of his employment, it will fall within the expression Profit received in lieu of Salary as per the provisions of section 17(3)(i) of the Act and therefore liable to be taxed under the head salary in view of the express provision regarding the chargeability of the same.

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• 2025 (1) TMI 159
  Cash deposits made during the demonetization period - unexplained income u/s 69A - HELD THAT:- Assessee is engaged in wholesale and retail trade of grocery items and allied products which regularly generate cash inflows for the assessee. The only source of income for the assessee is trading activity. In support of its claim, the assessee had furnished bank account statement and cash book for this financial year. The cash receipts as earned out of sale proceeds have duly been accounted for in the books of accounts and the cash balance as available in the cash book has been sourced to make impugned deposits in the banks. Assessee has maintained purchase ledger, sales ledgers, stock ledger etc. The sales proceeds have duly been reflected in the VAT returns as filed by the assessee which is duly supported by the copies of VAT returns as placed on record. The sales turnover has been offered to tax and making impugned addition again would amount to double taxation. The cash sales summary for all the years as placed on record would show that that assessee regularly conduct sales in cash and there is no abnormal cash inflow in this year. No defect has been pointed in the books of accounts. Thus as the deposits were sourced out of business receipts, the impugned addition could not be sustained. See M/s RR Foods Pvt. Ltd [ 2024 (7) TMI 1579 - ITAT CHENNAI] . As in Tamilnadu State Marketing Corporation Ltd. [ 2024 (10) TMI 1614 - ITAT CHENNAI] holding that simplicitor violation of certain notification issued by RBI would not entitle the revenue to make addition u/s 69 or 69A since the requirement of these sections should be fulfilled independently. Decided in favour of assessee.

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• Customs

• 2025 (1) TMI 158
  Challenge to seizure proceedings initiated by the appellants - proper officer for the purpose of Section 28 (4) of the Customs Act, 1962 for initiating proceedings and issuing a show cause notice to recovery duty - whether the proceedings initiated by the authorities of the Appellants was justified or not? - HELD THAT:- The Supreme Court, in Commissioner of Customs [ 2021 (3) TMI 384 - SUPREME COURT ], has observed DRI officers came to be appointed as the officers of customs vide Notification No. 19/90-Cus (N.T.) dated 26.04.1990 issued by the Department of Revenue, Ministry of Finance, Government of India. This notification later came to be superseded by Notification No. 17/2002 dated 07.03.2002 issued by the Department of Revenue, Ministry of Finance, Government of India, to account for administrative changes. Conclusion - The officers of Directorate of Revenue Intelligence are proper officers for the purposes of Section 28 and are competent to issue show cause notice thereunder. Appeal allowed.

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• 2025 (1) TMI 157
  Levy of penalty u/s 112(a) of CA, on appellant, a Customs House Agent (CHA) - whether there was abetment of the appellant in the misdeclaration of the imported goods? - HELD THAT:- It is on record that the statement of Shri Gyan Prakash Nirmal, Vice President of the importer has never implicated the appellant in the act of alleged misdeclaration of the imported goods. The impugned order vide para 81 categorically places the responsibility of the misdeclaration of the impugned goods on the importer, and specifically on Mr Gyan Prakash Nirmal, based on the investigations evidences available with the Department. There is not even a whisper of any advice or action undertaken by the appellant to facilitate or abet the said misdeclaration. There is nothing on record to prove that the appellant had connived/abetted with the importers in filing the Bills of Entry for importing the said products, without the mandatory documents. It is also noted that the impugned order for the said offence has already penalized the importer in terms of redemption fine and penalty. Hence, penalty under Section 112(a) can be imposed only if there is evidence of abetment by the appellant. Conclusion - As there is nothing on record to prove that the appellant had connived/abetted with the importers in filing the documents for importing the restricted products without the mandatory documents, the penalty cannot be sustained. Appeal allowed.

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• 2025 (1) TMI 156
  Classification of imported goods - health supplements - Food supplements - classifiable under CTH 2106 9099 are liable to IGST @28% under Sr. No. 9 of Schedule IV of Notification No. 1/2017- IGST rate or at 18% under serial No. 453 of Schedule III of the said notification? - demand for differential IGST is barred by limitation or otherwise. Classification of health supplements - HELD THAT:- The issue in the present case is no longer res-integra as the same has been considered by this Tribunal in the case of Neuvera Wellness Venture Pvt Ltd [ 2023 (10) TMI 964 - CESTAT AHMEDABAD ] wherein by the detailed finding, this Tribunal has considered that the nutrient/health supplements is not covered under Sr. No. 9 of Schedule IV whereas the same is covered under Serial No. 454 of Schedule iii for the purpose of charging the IGST - In view of the above judgment, the issue being identical is no longer res-integra. Accordingly, the assessee imported good attract 18% IGST and not 28%. Food supplement - HELD THAT:- It is found that the goods are ready to human consumption. Department seeks to classify under CTH 21061000 as Protein Concentrates and Textured protein substances. By description itself it appears that Protein Concentrates cannot be fit for human consumption. At the most Protein Concentrates can be categorized as input for making Protein based food/Health supplement. The department has neither got the goods tested nor adduced any evidence to establish the exact nature of the goods that whether the same is Protein Concentrates or otherwise. Therefore, the burden cast on the revenue in the matter of classification of goods has not been discharged. For this reason, itself as per settled legal position on this point, the case of department clearly fails. Food Flavouring Material - HELD THAT:- On scrutiny of records and the products leaflets available in appeal papers, it is not found any product which bears the name Food Flavouring Materials. There may be Food/Health supplement products containing miniscule percentage of food flavour which does not mean the said goods itself is food flavour material, therefore, the department s contention on this point cannot be agreed upon. Time limitation - HELD THAT:- Firstly the appellants have declared the goods as appearing in all the import documents. Therefore, there is no suppression of fact on that part. Secondly, this is a case of demand of IGST which is available as input tax credit for further sale of the goods. Therefore, under any circumstances, the mala fide intention cannot be attributed to the appellant. Accordingly, the demand under extended period is not sustainable also on the ground of limitation. Conclusion - The health supplements were subject to an 18% IGST rate under Sr. No. 453 of Schedule III, and the demand for differential IGST was time-barred. The impugned order set aside - appeal allowed.

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• Corporate Laws

• 2025 (1) TMI 155
  Rejection of application of the appellant for the listing of shares - appellant had not taken the approval of the shareholders for the allotment of the shares to the Asset Reconstruction Private Limited - HELD THAT:- The conversion of the debt into additional shares had taken place with the agreement of the appellant company and RARE, and it is on the basis of such an agreement between the parties that a resolution was passed on 02.05.2018 by the Board of Directors of the appellant company accepting the proposal to convert the debt into shares and to allot them in favor of RARE, thus, resulting in increase of the equity capital of the appellant company. Even the application for listing of the aforesaid additional shares was made by the appellant company to the BSE meaning thereby that the proposal for increasing the subscribed capital of the company by converting part of the debt into equity shares, as aforesaid, was initiated by the appellant company itself and not actually by RARE. Therefore, the proposal was that of the company only. Accordingly, as contemplated by Section 62(1)(c) of the Companies Act, 2013, the approval of the shareholders would be mandatory before the shares are accepted for listing on the BSE. For want of approval of the BSE, the Securities Appellate Tribunal has returned a clear finding that the approval of the BSE is necessary in view of Regulation 28 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there are no different opinion on it rather the said finding is accepted which is not perverse in any manner. In view of the aforesaid facts and circumstances, it is opined that no error or illegality has been committed either by the BSE or the Securities Appellate Tribunal in refusing to accept the request of the appellant company for the listing of the shares at the Stock Exchange inasmuch as Section 62 of the Companies Act stands duly attracted and in the light of sub-clause (c) of sub-section (1) of Section 62 of the Companies Act, special resolution of the shareholders is necessary which is lacking in the instant case. Conclusion - When a company proposes to increase its subscribed capital, shareholder approval is mandatory under Section 62(1)(c) of the Companies Act, 2013. This statutory appeal under Section 22 F of Securities Contracts (Regulation) Act, 1956 is devoid of merit and is dismissed.

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• 2025 (1) TMI 154
  Dismissal of petition filed by the appellants under Section 241 of the Companies Act, 2013 - dismissal on the ground it does not meet the criteria as is provided for in Section 244 of the Companies Act, 2013 - HELD THAT:- A bare perusal of the impugned order would show the Ld. NCLT had observed Section 244 of the Companies Act, 2013 requires the following conditions for filing an application/petition under Section 241 of the Companies Act viz. a) in case of a company having share capital, not less than 100 members of the company; or b) not less than 1/10 of the total number of its members whichever is less; or c) Any member of members holding not less than 1/10 of the issued share capital of the company. Admittedly there were 30 members of Respondent No.1 at the time of filing of Company Petition. Admittedly four of them filed the petition under Section 241 hence condition (b) above viz. not less than 1/10 of the total number of members could apply was fulfilled, thus Company Petition was maintainable. Appeal allowed.

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• PMLA

• 2025 (1) TMI 153
  Seeking grant of bail - money laundering - proceeds of crime - it is alleged that petitioner was involved in dealing with the proceeds of crime and in transferring of funds of M/s. PACL through various companies and making transactions of purchasing of properties etc. - it was held by High Court that The petitioner herein is admitted on bail on his executing a personal bond of Rs.25.00 lacs with one surety of like amount to the satisfaction of the learned Trial Court and subject to conditions imposed . HELD THAT:- It is not required to interfere with the impugned order. Although it is made clear that the observations made in the impugned judgment will not have any bearing on any further proceedings. SLP dismissed.

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• 2025 (1) TMI 152
  Maintainability of SLP - Time limitation - HELD THAT:- Though on a prima facie view, the submissions made by learned counsel appearing for the petitioner is agreed, in view of the fact that the impugned order has been passed more than two and a half years ago, and much water has flown under the bridge thereafter, it is not required to interfere with the impugned order(s). SLP dismissed.

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• 2025 (1) TMI 151
  Seeking grant of Anticipatory Bail - commission of a serious economic offence of money laundering - offence punishable under Section 3 read with Section 4 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- In view of the statement made and subject to compliance and deposit as directed, the appellant, Rajkumar Daitapati, shall be released on bail in the event of being arrested in connection with ECIR No. JPZ0/1/2015 (Sessions Case No.37 of 2021) (Enforcement Directorate vs. Rajkumar Daitapati) for the offences punishable under Section 3 read with Section 4 of the Prevention of Money Laundering Act, 2002, on the terms and conditions fixed by the trial Court. In addition, the appellant will comply with the provisions mentioned in Section 482(2) of the Bharatiya Nagarik Suraksha Sanhita, 2023. The impugned judgment is set aside and the appeal is allowed.

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• 2025 (1) TMI 150
  Grant of Regular bail - Moeny Laundering - collection of illegal levy amounts from the coal transporters - alleged offences under Sections 420, 120-B, 384 of the IPC and Sections 7, 7-A, 12 of the Prevention of Corruption Act, 1988 - HELD THAT:- The prosecution has collected the material regarding active involvement of the applicants in the syndicate and main accused-Suryakant Tiwari has extorted money, which has been utilized for purchase of properties. Thus, involvement of the applicants in commission of offence under Section 7, 7A 12 of the PC Act, is prima facie reflected. Hon ble the Supreme Court while considering the gravity of economic offence in case of P. CHIDAMBARAM VERSUS DIRECTORATE OF ENFORCEMENT [ 2019 (9) TMI 286 - SUPREME COURT ] has held that Grant of anticipatory bail at the stage of investigation may frustrate the investigating agency in interrogating the accused and in collecting the useful information and also the materials which might have been concealed. Success in such interrogation would elude if the accused knows that he is protected by the order of the court. Grant of anticipatory bail, particularly in economic offences would definitely hamper the effective investigation. The prosecution has collected sufficient material to demonstrate that the applicants have active participation in the syndicate which has collected illegal money as per the directions of the main accused Suryakant Tiwari by extorting money which has also been utilized for purchase of properties by the accused persons and in the bail petition, they have contended that they are falsely implicated in the crime by taking the stand which is required to be ascertained by the trial Court only during the trial and the applicants have not placed any material to demonstrate that they are not prima facie involved in the commission of offence. The accused persons have nowhere stated that they are unknown to the main accused and there is no linkage between them for commission of offence by the main accused-Suryakant Tiwari with the add of government officers - looking to the involvement of the applicants, gravity of the offence which is economic offence, the applicants are not entitled to get bail. As such, this is not a fit case where the applicants should be granted regular bail. Conclusion - The prosecution has collected sufficient material to demonstrate that the applicants have active participation in the syndicate which has collected illegal money as per the directions of the main accused. This is not a fit case where the applicants should be granted regular bail. All the bail applications filed under Section 439 of the Cr.P.C. are liable to be and are hereby rejected.

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• 2025 (1) TMI 149
  Money Laundering - attachment of the properties acquired prior to the commission of the alleged crime - misappropriation of the funds in conspiracy with government officials - lapse of attachment order after expiry of 180 days - No connection between properties and proceeds of crime - Invalidity of scheduled offence. Properties acquired prior to commission of crime could not have been attached - HELD THAT:- There are no force in the first argument when the proceeds out of crime was not available with the appellant rather vanished and siphoned off,the property of equivalent value has been attached. The proceeds were siphoned off by diverting it to various group companies and by layering the proceeds. In the light of the aforesaid, second limb of the definition of proceeds of crime has been applied to attach the property of equivalent value. Thus, the first ground raised by the appellant cannot be accepted. The attachment order would be lapsed after expiry of 180 days - HELD THAT:- There are no substance in the argument to seek lapse of the provisional attachment order when the intervening period was suffered due to Covid-19 and the period from 15.03.2020 till 28.02.2022 has been eliminated by the Apex Court for termination of proceedings - the ground for challenge to the order cannot be accepted. No connection between properties and proceeds of crime - HELD THAT:- The properties were linked to the proceeds of crime through financial transactions and layering - the attachment of properties as connected to the proceeds of crime upheld. Invalidity of scheduled offence - HELD THAT:- The relevant date is a date when the tainted property is projected to be untainted and as a consequence to it, the ECIR is recorded showing offence under Section 3 of the 2002 Act. The relevant date to find out the scheduled offence and the offence of money laundering is when it is projected tobe untainted property to make out an offence under section 3 of the Act of 2002 - the relevant date is of the year 2012 when after registration of FIR other discovery of the offence, an ECIR was recorded in the same year finding an offence of moneylaundering. Conclusion - The attachment of properties was upheld. The provisional attachment order did not lapse. The properties were connected to the proceeds of crime. There are no merit in the appeals and they are accordingly dismissed.

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• Service Tax

• 2025 (1) TMI 148
  CENVAT Credit on tax paid in terms of Deposit Insurance Act - input services or not - HELD THAT:- It is, worth-noting, that Mumbai Bench of this Tribunal had expressed its apprehension on the precedent value of M/S. SOUTH INDIAN BANK VERSUS THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX-CALICUT [ 2020 (6) TMI 278 - CESTAT BANGALORE - LB] Larger Bench decision for the reason that observations of Hon ble Supreme Court in several other cases including that of COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY ORS. [ 2018 (7) TMI 1826 - SUPREME COURT (LB)] concerning strict interpretation of taxation statute was not considered, for which suggestion was made for a reference to a still Larger Bench comprising of Five Members but that was negated by the same Three Members Larger Bench with reasoning noted in the said decision including affirmation of the decision of the Larger Bench made in South Indian Bank Ltd. by Hon ble Kerala High Court and Hon ble Bombay High Court. The decision of the Larger Bench made in South Indian Bank that insurance service provided by the Deposit Insurance Corporation to the banks is an input service and CENVAT Credit on Service Tax paid by this service received by the banks from the Deposit Insurance Corporation can be availed by the banks for rendering output service, still holds the field. Conclusion - The admissibility of CENVAT Credit on the Service Tax paid for insurance premiums under the Deposit Insurance Act upheld. Appeal allowed.

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• 2025 (1) TMI 147
  Classification of services - Business Auxiliary Service or not - procuring the services of providing cargo space by airlines for their clients use for the export of goods - HELD THAT:- Reliance placed in the appellant s own case for an earlier period in COMMISSIONER OF SERVICE TAX, CHENNAI VERSUS M/S. AVR CARGO AGENCY PVT. LTD. [ 2018 (6) TMI 524 - CESTAT CHENNAI] , wherein this Bench had considered the additional amount received as incentives based on the volume of transaction for the activity of forwarding cargo through the airlines and, after following other orders of coordinate Benches, this Bench had ruled in favour of the assessee and held that the additional amount would not be liable to service tax. Conclusion - The demand for service tax under BAS was not justified. There are no merit in the impugned order - appeal allowed.

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• 2025 (1) TMI 146
  Refund claim - time limitation - present refund claim was resubmitted by the appellant on 03-09-2013 for the same amount - Whether the resubmitted refund claim dated 03.09.2013 should be considered time-barred, given its connection to the original refund application dated 30.05.2013? - exemption notification change effective from 01.04.2013 applies retroactively to the refund claim period ending on 30.09.2012 - violation of principles of natural justice. HELD THAT:- The non-issuance of SCN is a serious issue; the same is required to be issued when the Revenue does not propose to entertain the refund claim of the claimant. It s a different matter altogether if the application for refund is accepted and refund is granted, in which event, no such SCN is required. This is more relevant as it assumes importance for a bona fide claimant to know the stand of the revenue as to the grounds for not entertaining its application. Hence, SCN is the foundation without which no proceedings shall commence. Calling for a personal hearing, as indicated by the Adjudicating Authority would not take the place of SCN nor would it cure the blunder of non-issuance of the same and nor would it undo the blunder since personal hearing which follows the SCN, is the second stage of meeting with the principles of natural justice. Hence, the Adjudicating Authority has been very casual in taking very lightly the request of the applicant for non-issuance of SCN and dismissing the same in a very casual manner, thereby seriously prejudicing the principles of Natural Justice. Hence, any order that follows such an incurable irregularity thereafter would only be a castle in the air, lacking seriously the very foundation and hence, the same is to be held as unsustainable, un-enforceable and contrary to the established principles of law and arbitrary. It is unfortunate that such an irregular order has been sustained in the impugned OIA, thereby only perpetuating the irregularity, which also cannot sustain. Appeal allowed.

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• 2025 (1) TMI 145
  Demand for service tax paid under a different registration number - barred by time limitation - short payment of service tax - short payment of Swachh Bharat Cess (SBC) - service tax on liquidated damages/penalties. Time limitation - Payment of service tax of Rs. 5,68,451/- for November, 2015 through challan mentioning Service Tax Registration of Regional Unit belonging to Appellant - Short payment of service tax of Rs. 42,188/- for the period from June 2015 to September 2015 - Short payment of Swacch Bharat Cess (SBC) of Rs. 22,344/- from November 2015 to March 2016 - HELD THAT:- It is also clearly apparent that those demands pertains to the year 2015-2016 and were proposed to be recovered vide show cause notice dated 9.10.2019. The entire period under three of these issues is therefore, beyond the normal period prescribed under Section 73 of Finance Act, 1994 / 11AC of Central Excise Act, 1944. Both these observations and that there is no other evidence except appellant s own document to prove the alleged act of suppression on part of appellant, we hold that the aforesaid provisions have wrongly been invoked while issuing the show cause notice. Therefore, the show cause notice is held to be barred by them. Conscious and deliberate withholding of the information manufacturer is necessary for invoking the extended period. If the department had full knowledge or the manufacturer had reasonable belief that he is not required to give a particular information, only normal period of limitation i.e. one year is applicable. Resultantly, the demand of these issues is held purely barred by period of limitation. The demand on three of the issues are liable to be set aside. Service Tax of Rs. 2,10,11,500/- on Liquidated Damages/Penalty for the period April 2014 to June 2017 - HELD THAT:- Declared service, otherwise, has first to be a service which in terms of Section 65(B)(44) of Finance Act, 1944 is any activity carried by a person for another for consideration. The term consideration is defined in explanation (a) to Section 67 of the Act to mean any amount that is payable for the taxable service. Section 2(b) of Indian Contract Act, 1872 also defines consideration as when at the desire of the promisor the promise or any other person has done or abstained from doing, or does or abstains from doing or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise. In the present case there is no agreement nor any intention to breach the terms of the agreement. The appellant herein has simply agreed to be compensated by deducting charges from the bills for any loss or admitted cause to them from the breach of contract on part of the contractor. Resultantly, the recovery of liquidated damages/penalty from the other parties cannot be called as service and the amount so received cannot be called as the amount of consideration. The activity of receiving such an amount of penalty is wrongly alleged to be an amount towards rendering the declared services. The act of receiving such an amount/liquidated damages is otherwise covered under Section 73 and 74 of the Contract Act - the demand on this ground has been wrongly confirmed. Conclusion - The demand held to be purely barred by period of limitation. The act of receiving such an amount/liquidated damages is otherwise covered under Section 73 and 74 of the Contract Act. Appeal allowed.

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• 2025 (1) TMI 144
  Service of order - sending of an order by speed post complies with the provision of section 37C(1)(a) of the Central Excise Act or not - Dismissal of appeal on the grounds of limitation holding that the appeal filed on 02.11.2017 is beyond permissible condonable time limit of one month hence cannot be condoned. Service of notice - HELD THAT:- In the present case the order was not dispatched by registered post. The order was sent by speed post and under the amended section 37C, there should be proof of delivery also. In the present case, admittedly, there is no proof of delivery since what has been stated by the Assistant Commissioner in his comments is that the speed post which was sent to the appellant containing the order in original did not return to the office. Hon ble High Court Mumbai, also in the case AMIDEV AGRO CARE PVT LTD VERSUS UNION OF INDIA AND OTHERS [ 2012 (6) TMI 304 - BOMBAY HIGH COURT] held that Order Is To Be Served On The Assessee Or His Agent By Registered Post A.D. Or Any Other Mode Specified In Section 37C and mere proof of dispatch of order is not sufficient compliance of the section. Condonation of delay - HELD THAT:- In the present case, no doubt there occurred a delay in filling the appeal before Commissioner (Appeals) but the same was within the condonable powers of the Commissioner (Appeals) but he didn t call for the explanation from the appellant. The appeal has been dismissed simply holding that there is no request on record seeking condonation of delay in filing the appeal. The order is clear to hold that no opportunity of personal hearing was given to the appellant nor any reasonable time to file the miscellaneous application - the very basic principle of Principles of Natural Justice has been violated by Commissioner (Appeals). In view thereof and the above discussed decisions, the impunged order of Commissioner (Appeals) set aside. Since there are no findings with respect to the merits of the Order in original as was appealed before Commissioner (Appeals) the matter remanded back to Commissioner (Appeals) to decide the appeal on its merits after giving the proper opportunity of being heard to the appellant. Conclusion - Service by speed post is valid provided there is proof of delivery. In the absence of any proof of delivery, it cannot be said that there is effective service of notice, as contemplated under Section 37C of the Act. Appeal allowed by way of remand.

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• 2025 (1) TMI 143
  Liability of sub-contractor to pay service tax even if the main contractor has already discharged the service tax liability on the entire value of the contract - extended period of limitation - HELD THAT:- It is an admitted fact on record that the show cause notice dated 29.06.2012 had proposed for recovery of service tax from the appellant for the services provided during the period of 2007-08 to 2010-11 and for proposed effecting recovery, the proviso clause appended sub-section (1) of Section 73 ibid was invoked. Insofar as issuance of the show cause notice is concerned, the statute clearly mandates that the same should be issued within the normal period of one year from the relevant date. However, under exceptional circumstances, where there is involvement of fraud or collusion or willful mis-statement or suppression of facts or contravention of any of the provisions of this Chapter or of the Rules made there under with intent to evade payment of service tax, then in such cases instead of the normal period of 1 year, the show cause notice can be issued by invoking the extended period of limitation of 5 years. In the case in hand, it is an admitted fact that payment of service tax by sub-contractor was not free from doubt and thus, there were different views expressed by Co-ordinate Bench of the Tribunal, which are resulted in referral of matter to Larger Bench in COMMISSIONER OF SERVICE TAX VERSUS MELANGE DEVELOPERS PVT. LTD. [ 2019 (6) TMI 518 - CESTAT NEW DELHI-LB] . Thus, under such circumstances, the service tax demand can only be raised within the normal period and since, the elements itemized in the proviso clause are absent, the extended period cannot be invoked. Conclusion - The sub-contractors are liable for service tax, even if the main contractor has paid it on the total contract value - The extended period of limitation under Section 73 can only be invoked when specific conditions are met, such as fraud or suppression of facts. The impugned order, to the extent it has confirmed the adjudged demands under the extended period of limitation is set aside - Appeal allowed.

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• 2025 (1) TMI 142
  Refund claim for services availed by a Special Economic Zone (SEZ) unit, which were approved post-receipt but pre-filing of the refund claim - admissibility under N/N. 12/2013-ST. - HELD THAT:- The order of the Tribunal in the case of Kolland Developers Pvt. Ltd. [ 2016 (8) TMI 847 - CESTAT MUMBAI ] was challenged before the Hon ble High Court of Bombay [ 2021 (12) TMI 479 - BOMBAY HIGH COURT ]. The Hon ble High Court of Bombay in the case of Kolland Developers Pvt. Ltd. V/s Commissioner of C.EX. CUS. (Appeals), Nagpur have allowed the appeal of the assessee and set aside the order of the Tribunal and remanded the proceedings to the Tribunal to decide the appeal afresh on its own merits and in accordance with law. The Tribunal while deciding the appeal in remand proceeding in M/s Kolland Developers Pvt. Ltd. V/s Commissioner of Central Excise, Nagpur has held that the refund claim made as per Notification No.12/2013 could not have been denied just for the reason that at the time of receipt of services, there was no approval of Approval Committee cannot be upheld. There are no reasons to interfere with the impugned order and the same is sustained - appeal filed by the Department being devoid of any merits, is dismissed.

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• 2025 (1) TMI 141
  Levy of service tax - Valuation - activities of erection, commissioning, and installation of machines, which are part of a composite contract for the sale and supply of machines - HELD THAT:- As per the facts of the present case the respondent have manufactured and supplied the textile machines as per the contract and sale invoice was issued to the customers. The respondent-assessee is supposed to undertake the supply and also the erection, commissioning and installation of the machine at the customer s site. The sale value includes all the elements and there is no separate consideration received by the respondent on account of the service related to erection, commissioning and installation. In such case there is no amount available for charging service tax. The issue has been considered by this Tribunal in the respondent s own case of C.C.E S.T. -SILVASA VERSUS AALIDHRA TEXTOOL ENGINEERS PVT LTD [ 2022 (12) TMI 11 - CESTAT AHMEDABAD] wherein this Tribunal has held that in the present case where the entire value has suffered excise duty and the buyer is under obligation to not only manufacture and supply the machinery but also to carry out activity of erection, commissioning and installation of the said machinery, the service tax cannot be demanded. Conclusion - The entire value of the goods has to be taken as sale value, consequently, no service value is involved separately. Appeal of Revenue dismissed.

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• Central Excise

• 2025 (1) TMI 140
  Clandestine removal - classification of same type of goods under headings 3197 when cleared/removed officially and under 8424 when cleared allegedly unofficially or clandestinely - impact of such classification under different headings - CESTAT did not address the clandestine removal of goods issue, but proceeded on the premise that such clandestine removal was irrelevant - HELD THAT:- The CESTAT s order warrants interference because the CESTAT has not discharged the duties and obligations expected of a first appellate Court in this case. The central and crucial issues were not considered. The findings of fact were not addressed. The CESTAT failed to address, much less come into close quarters with the reasoning of the Commissioner. The impugned order, with respect, is a cryptic single-paragraphed order. None of the principles in Santosh Hazare [ 2001 (2) TMI 131 - SUPREME COURT ] are followed, and the CESTAT s approach is contrary to the law declared by the Hon ble Supreme Court. The CESTAT should have considered the rectification application in the facts of this case. The ROM application tried to bring to the notice of the CESTAT that factual issues were raised, and they were not decided. The CESTAT s attention was drawn to the material on record, which was not even referred to in the single paragraph order and was much less considered. Failing to address vital issues or even look into crucial material is grounds for judicial review. Accordingly, the impugned order dated 22 February 2008 warrants interference. Conclusion - The appellate Court must reflect its conscious application of mind, and record findings supported by reasons, on all the issues arising along with the contentions put forth, and pressed by the parties for the decision of the appellate Court. The three substantial questions of law answered in favour of the revenue and against the assessee.

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• 2025 (1) TMI 139
  Tribunal can ignore inquiry/investigations conducted and statements recorded under Section 14 of the Central Excise Act, 1944 read with Section 193 and Section 228 of the Indian Penal Code or not - supplier of crude Menthol oil were found non-existence/fake during investigation - demand on account of assumption and presumption - fraud, wilful suppression/mis-declaration of the material facts - Benefit of N/N. 56/2002-CE dated 14.11.2002. HELD THAT:- The appellant was required to demonstrate and prove that during the relevant period, when the refund was claimed by the respondent, it had not procured any raw material, nor had it undertaken any manufacturing process. This could have been determined by the appellant by conducting an inquiry/investigation specifically focused on these aspects of the matter. Indisputably, in the inquiry conducted by the Commissionerate, the respondent was not associated. The clear case of the respondent is that it procured raw material for its unit i.e, crude menthe oil, from various suppliers in Lukcnow and, therefore, it was not for the respondent to further find out and inquire as to how and from whom the suppliers had procured the raw material. The Commissionerate has undoubtedly conducted an elaborate inquiry, but could only conclude that the farmers, whose names were appearing on the vouchers seized from the possession of M/s Sachin and Nitin Enterprises were non-existent. The Commissionerate has, thus, seriously doubted the procurement of raw material by the suppliers of the respondent - The Adjudicating Authority has also ignored the fact that the respondent had installed two DG sets of 125 KVA to supplement the power. The case was clearly set up by the respondent before the Adjudicating Authority, but the same was not enquired into or investigated and the Adjudicating Authority rather placed sole reliance upon the investigation conducted by the Commissionerate. The CESTAT has rightly not approved the manner in which the proceedings were conducted by the Adjudicating Authority. In reply to the show cause notice issued by the jurisdictional Authority, the respondent had brought on record some evidences clearly demonstrating that not only the raw material stood procured, but the goods were also manufactured in the unit of the respondent from the procured raw material. The raw material was transported in trucks from outside the State of Jammu and Kashmir into the State. The jurisdictional officers of the Central Excise, the State Industries Department, and other statutory authorities had inspected the premises of the respondent from time to time and had never reported that the respondent s unit was defunct and was not engaged in the permitted manufacturing activity - All these evidences could not have been ignored by the jurisdictional Authority only on the ground that there was investigation report from the Commissionerate belying the claim of suppliers of the respondent that they had procured the crude mentha oil from different farmers in Barabanki District of U.P. Conclusion - The Tribunal has rightly not approved the manner in which the proceedings were conducted by the Adjudicating Authority. Appeal dismissed.

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• 2025 (1) TMI 138
  Recovery of CENVAT Credit with interest and penalties - manufacture of sugar and molasses - manufacture of dutiable and exempted goods - Appellant had availed and utilised Cenvat credit without maintenance of separate accounts - Whether the Appellant is liable to pay an amount equivalent to 5% / 6% on the value of Bagasse clearances in terms of Rule 6(3) of CENVAT Credit Rules, 2004? - HELD THAT:- The identical issues as involved in the present case, was also involved in the case of M/S. PONNI SUGARS (ERODE) LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, SALEM [ 2023 (10) TMI 876 - CESTAT CHENNAI] wherein Chennai Bench of this Tribunal has allowed the appeal by setting aside the demands of Cenvat credit. Conclusion - In absence of Bagasse being a manufactured final product, the obligation of reversal of Cenvat Credit under Rule 6(1) of the Cenvat Credit Rules, 2004 is not attracted. The impugned orders set aside - appeal allowed.

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• 2025 (1) TMI 137
  CENVAT Credit - input service credit of the service tax paid on lease rentals and operation and maintenance charges of windmills - extended period of limitation - HELD THAT:- A perusal of the impugned order reveals that the Commissioner had observed from the above Agreement between the Appellant and M/s.ALWEL, the inputs which were used for operation and maintenance of windmills was used by M/s.ALWEL which is evident from the fact that the contract specified that the cost of operation and maintenance was to be borne by M/s.ALWEL. M/s.ALWEL was also responsible for the generation of electricity and they were in fact getting the windmills maintained and hence the appellant was in no way responsible for maintenance of windmills nor had they given any contract for doing so to M/s.ALWEL for operation and maintenance of windmills in question. A perusal of the above Agreement between the parties clearly indicates that the understanding was for supply of electricity and nowhere in the contract is it mentioned that M/s.ALWEL would be operating and maintaining the windmills on behalf of the Appellant. The fact however remains that the doubt in the minds of the Adjudicating Authority remains unanswered, which, goes into the root of the issue, that is to say, there is no mention about the lease of the windmills in the Agreement between the parties, the agreement is only for supply of electricity and M/s.ALWEL was not at all operating and maintaining the windmills for the Appellant. The Commissioner is justified in invoking the extended period of limitation. Conclusion - The appellant was not entitled to input service credit and the extended period of limitation was justifiably invoked by the Revenue. Appeal dismissed.

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• 2025 (1) TMI 136
  Refund of amounts deposited - amount paid voluntarity or is paid under protest - rejection on the ground of being barred by limitation as provided by Section 11B of the Central Excise Act, 1944 - applicability of principles of unjust enrichment - HELD THAT:- It is evident that the amounts have been deposited as per the direction of the departmental officers in respect of certain shortages detected at the time of visit. The amounts so deposited on the direction of the departmental officer cannot be said to be voluntary deposit. Further appellant have contested the demand and have finally succeeded in getting the same set aside by the tribunal. As the appellant was contesting the demand the amount paid by them were necessarily not paid voluntarily but were paid under compulsion from the officer and were paid under protest. Further it needs to be noted that the amounts paid by the appellant were in respect of the shortages of the raw material detected by the officers at the time of visit. The amounts deposited could not have acquired the character of duty till the time they have been cleared from the premises of the appellant. Tribunal has clearly held that the charge of clandestine clearance of these goods cannot be established. Hence the amounts deposited do not acquire the character of duty . The expressions used in the Section 11B are in respect of refund of Duty and not the refund of deposits made complying with the directions of the officers. It is a settled law that any amount which becomes due to the appellant consequent to an Appellate order the deposits should have been refunded to the appellant - In case of GS. RADIATORS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, LUDHIANA [ 2004 (10) TMI 158 - CESTAT, NEW DELHI] it was held that such payment will be considered as payment under protest. Tribunal under its Final Order had given direction to give consequential relief to the appellants which should have been given by the department. But instead of giving them refund, they rejected it on time-bar which is not correct. In view of the above, I find that payment made by the appellants has to be considered as payment under protest and the refund should be allowed to them if otherwise in order. Conclusion - The amounts so deposited on the direction of the departmental officer cannot be said to be voluntary deposit. Payments made under protest during an ongoing dispute are not subject to the limitation period under Section 11B of the Central Excise Act, 1944. Such payments do not attract the doctrine of unjust enrichment. There is no reasonable ground for rejection of the refund claim - Appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (1) TMI 135
  Entitlement to claim a concessional tax rate under the Central Sales Tax (CST) Act, 1956, without furnishing C forms - It is submitted that in absence of specific notification issued under Section 8(5) of the CST Act, the petitioner cannot claim benefit of exemption under the above notification issued under the Tamil Nadu Value Added Tax (TNVAT) Act, 2006 for local clearance - HELD THAT:- As per Sub-Section (5) to Section 8 of the CST Act, the State Government has to issue a notification which should specify the conditions - In this case, no notification has been issued under Sub-Section (5) to Section 8 of the CST Act which has been brought to the attention of the Court. Unless a specific notification has been issued under Sub-Section (5) to Section 8 of the CST Act, only General Notification issued under the Tamil Nadu Value Added Tax (TNVAT) Act, 2006 will apply to the interstate transactions by applying Sub-Section (2) to Section 8 of the CST Act. Conclusion - Since there is no notification issued under Section 8(5) of the CST Act, the conditions of Section 8(5) of the CST Act will not apply to the facts of the case. The petitioner is entitled to the benefit of exemption under Notification No.II(1)/CTR/30(a-2)/2007 - Petition allowed.

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• 2025 (1) TMI 134
  Recovery of arrears of sales tax - priority charge over the assets - Whether the Respondent No. 5 (The Deputy Commissioner of State Tax) will have priority charge over the secured assets sold by Petitioner bank (secured creditor) under the SARFAESI Act? HELD THAT:- The dicta of the Full Bench in Jalgaon Janta Sahakari Bank Ltd. [ 2022 (9) TMI 163 - BOMBAY HIGH COURT ] is squarely applicable to the present proceedings. In the ratio of the said judgment it has been held that even where there is an attachment order of the State Tax authorities prior to the secured assets attachment, without any further steps being taken towards issuing a proclamation of sale, the State Tax Authorities cannot claim priority over the dues payable to the secured creditor, whose security interest is registered with CERSAI. In the present case, the order of attachment issued by the State Tax Department is dated 11th December, 2018. It is thereafter that steps have been taken to attach the immovable property. As noted above, the registration of the Bank Security Interest with CERSAI is dated 18th December, 2014 which is much prior to the order of attachment issued by the State Tax Department. Conclusion - The claim of secured creditor that is the Petitioner Bank, will have preference over the claim of Respondents (State Tax Department). Petition disposed off.

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• Indian Laws

• 2025 (1) TMI 133
  Acceptance of an illegal gratification from the original complainant - whether CBI had power to register the FIRs and investigate offences qua respondent No.1 in the appeals? - whether the FIR for offences under the PC Act could be registered in Hyderabad in the State of Telangana when the offences alleged to have been committed at places within the State of Andhra Pradesh and for that reason whether the CBI Court in the State of Telangana got jurisdiction to try the offence under the PC Act in respect of offences allegedly committed at places falling within the State of Andhra Pradesh? HELD THAT:- The term law was defined in para 2(f) of the Circular Memo dated 26.05.2014. The said definition, as extracted above, would reveal that it would take in any order, bye-law, scheme, notification, or any other instrument having immediately before the appointed day viz., 02.06.2014, the force of law in the whole or in any part of the existing State of Andhra Pradesh. Thus, the cumulative effect of para 2(f), clauses (i) to (iii) of para 6 of the said Circular dated 26.05.2014 as also other notifications issued prior to 02.06.2014 or in modification of the then existing law(s), as it is to be understood in terms of the definition in para 2 (f), especially, in the absence of repeal or alteration or amendment in the State of Telangana also have to be looked into while considering the question(s) involved in the cases on hand. In the contextual situation it is also relevant to refer to Resolution No.4-31-61-T dated 01.04.1963 of Ministry of Home Affairs establishing the Central Bureau of Investigation. Going by the said resolution dated 01.04.1963, it provides the function of the CBI in cases where public servants under the control of the Central Government are involved either themselves or with the State Government servants and/or other person - it is difficult to accede to the contentions of the first respondent in the captioned appeals made in a bid to support and sustain the impugned judgment. In such circumstances, considering the questions from such different angles, the impugned judgment whereunder subject FIRs and further proceedings in pursuance thereof, were quashed cannot be sustained. Conclusion - The laws which were applicable to the undivided State of Andhra Pradesh would continue to apply to the new States created by the Act and that the laws that operated would continue to operate notwithstanding the bifurcation of the erstwhile State of Andhra Pradesh. CBI retains jurisdiction to investigate offences within the newly formed states without requiring fresh consent. Appeal allowed.

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• 2025 (1) TMI 132
  Dishonour of Cheque - cognizance of offences - whether the complaint filed by the appellant herein under Section 138 of the NI Act is in accordance with the requirement under Section 142 of the NI Act? - Power of attorney holder - HELD THAT:- A perusal of the complaint (Annexure P-18) would reveal that Complaint No. 701 of 2021 has been filed in the name of M/s Naresh Potteries through Neeraj Kumar (Manager and Authority-letter holder). Further, a perusal of the cheque which is the subject-matter of the complaint would reveal that it has been issued in the name of Naresh Potteries. As aforementioned, Section 142 of the NI Act contemplates that the complaint filed under Section 138 of the NI Act should be in writing and should be filed by the payee or the holder of the cheque. Therefore, it is abundantly clear that the complaint in the present matter satisfies the requirements of Section 142 of the NI Act. Since the High Court has quashed the summoning order on a categorical finding that the power of attorney holder did not have personal knowledge of the facts giving rise to the criminal proceedings as there was no specific pleading to that effect in the letter of authority and the affidavit of the power of attorney holder under Section 200 of the Cr.P.C., we find it apposite to reproduce the relevant portions of the aforesaid documents which contain averments regarding authorisation in favour of and knowledge on the part of Sh. Neeraj Kumar. This Court in M/S TRL KROSAKI REFRACTORIES LTD. VERSUS M/S SMS ASIA PRIVATE LIMITED ANR. [ 2022 (2) TMI 1112 - SUPREME COURT] had come to a categorical finding that what can be treated as an explicit averment, cannot be put in a straightjacket but will have to be gathered from the circumstance and manner in which it has been averred and conveyed, based on the facts of each case. The relevant portion of the said decision has already been extracted above. In the instant matter, the averments made in the documents referred to above, make it wholly clear that Sh. Neeraj Kumar possessed personal knowledge of the facts of the matter at hand and was well-equipped and duly authorised to initiate criminal proceedings against Respondent No.1. That beside the fact that it would always be open for the trial court to call upon the complainant for examination and crossexamination, if and when necessary, during the course of the trial. As such, a peremptory quashing of the complaint case by the High Court is completely unwarranted and that too on an incorrect factual basis. Conclusion - The complaint under Section 138 of the NI Act must be filed by the payee or holder in due course, and a power of attorney holder must have personal knowledge and authorization to file the complaint. Appeal allowed.

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• 2025 (1) TMI 131
  Dishonour of Cheque - violation of cardinal ingredient of Section 138 (b) of the NI Act - discharge of burden to prove - presumption under Sections 139 and 118 of the NI Act - non-production of bank statement / IT return by the complainant would vitiate the complaint itself. Whether the complainant violated the cardinal principle laid down under Section 138(b) of the Negotiable Instruments Act? - HELD THAT:- In Suman Sethi case [ 2000 (2) TMI 822 - SUPREME COURT] the Hon ble Supreme Court held If in a notice while giving the break up of the claim the cheque amount, interest, damages etc. are separately specified, other such claims for interest, cost etc. would be superfluous and these additional claims would he severable- and will not invalidate the notice. If, however, in the notice an omnibus demand is made without specifying what was due under the dishonored cheque, notice might well fail to meet the legal requirement and may be regarded as bad. Thus , to make a valid demand notice as per the proviso of Section 138(b) of the Act, 1881, the due amount of bounced cheque, and other additionally claimed amounts should be mentioned in a separate portion. In the demand notice, if other amount is mentioned with the cheque amount in a separate portion in detail, the said notice cannot be faulted. In the case on hand, the complainant demanded the cheque amount of Rs.9.00 lakhs and he additionally demanded Rs.5,000/- towards charges for issuance of the legal notice. Therefore, Ex.P.11 is a valid one. Whether the non-production of bank statements or Income Tax returns by the complainant would vitiate the complaint itself? - HELD THAT:- In the light of the decision of the Madhya Pradesh High Court in Ragini Gupta vs. Piyush Dutt Sharma [ 2019 (4) TMI 114 - MADHYA PRADESH HIGH COURT] , the finding of the learned trial Court that as the complainant failed to disclose Rs.42.00 lakhs alleged to have invested for the production of the film in his income tax returns is not correct because if the complainant did not disclose his income in the Income Tax Return, then the Income Tax Department is well within its rights to reopen the assessment of income of the assessee and to take action as per the provisions of Income Tax Act. Whether the complainant had discharged the onus, and whether the accused failed to discharge the onus on his part? - HELD THAT:- As far as the aspect of existence of basic ingredients for drawing of presumption under Sections 118 and 139 of the N.I. Act is concerned, the accused did not deny his signature on the cheque in question that had been drawn in favour of the complainant on a bank account maintained by the accused. The said cheque was presented to the bank concerned within the period of its validity and was returned unpaid for the reason funds insufficient. So all the basic ingredients of Sections 118 and 139 of the N.I Act are apparent on the face of the record. The trial Court had failed to take note of all these facts and failed to draw the requisite presumption. Therefore, it is required to be presumed that the cheque in question was drawn for consideration and the holder of the cheque i.e. the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the accused to establish a probable defence so as to rebut such a presumption, which he failed to do so. With regard to the preponderance of probabilities, the accused has to bring on record such facts and circumstances which may lead the Court to conclude either that the consideration did not exist or that its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. Mere denial would not fulfil the requirements of rebuttal as envisaged under Sections 118 and 139 of the N.I. Act. Conclusion - i) In the demand notice, if other amount is mentioned with the cheque amount in a separate portion in detail, the said notice cannot be faulted. ii) Complainant correctly disclosed Rs.42.00 lakhs alleged to have invested for the production of the film in his income tax returns. iii) It is required to be presumed that the cheque in question was drawn for consideration and the holder of the cheque i.e. the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the accused to establish a probable defence so as to rebut such a presumption, which he failed to do so. Appeal allowed.

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• 2025 (1) TMI 130
  Dishonour of Cheque - conviction of the petitioner-accused under Section 138 of the Negotiable Instruments Act, 1881 - compounding of offences - compromise arrived between the parties - HELD THAT:- Having taken note of the fact that the petitioneraccused and the complainant-respondent have settled the matter and the complainant has no objection in compounding the offence, therefore, this Court sees no impediment in accepting the prayer made on behalf of the accusedpetitioner for compounding of offence while exercising power under Section 147 of the Act as well as in terms of guidelines issued by the Hon ble Apex Court in Damodar S. Prabhu V. Sayed Babalal H. [ 2010 (5) TMI 380 - SUPREME COURT] , wherein the Hon ble Apex Court has held A bare reading of this provision would lead us to the inference that offences punishable under laws other than the Indian Penal Code also cannot be compounded. However, since Section 147 was inserted by way of an amendment to a special law, the same will override the effect of Section 320(9) of the CrPC, especially keeping in mind that Section 147 carries a non obstante clause. In K. Subramanian Vs. R. Rajathi [ 2009 (11) TMI 1013 - SUPREME COURT] , it has been held by the Hon ble Apex Court that in view of the provisions contained in Section 147 of the Act read with Section 320 of Cr.P.C., compromise arrived at can be accepted even after recording of the judgment of conviction. Conclusion - Since, in the instant case, the petitioner-accused after being convicted under Section 138 of the Act, has compromised the matter with the complainant, prayer for compounding the offence can be accepted. Petition disposed off.

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• 2025 (1) TMI 129
  Dishonour of Cheque - Hindu Undivided Family (HUF) can be considered an association of individuals under Section 141 of the NI Act - Applicant is actively participating into the affairs of the Accused No. 1. or not - vicarious liability of members of HUF - HELD THAT:- The discussion of the Supreme Court in the said Ramanlal Patel [ 2008 (2) TMI 859 - SUPREME COURT ] is with reference to the definition of joint family and person as defined under the Gujarat Ceiling Act. The said discussion will not apply to the explanation of the term Company as given in Section 141 of the NI Act - the Supreme Court was considering the scope of Section 3 of the Income Tax Act, 1922, which classifies the assessee under the heads individuals , Hindu Undivided Families , Companies , Local Authorities , Firms and Other Associations of Persons . The Supreme Court has observed that if Hindu undivided family is to be considered as an association of persons, there was no point in making separate provision for the assessment of Hindu Undivided Family . Thus, the said decision of the Supreme Court interpreting Section 3 of the Income Tax Act, 1922 will have no application to Section 141 of the NI Act. It is well-settled that the decision of a High Court will have the force of binding precedent only in the State or territories on which the court has jurisdiction. In other States or outside the territorial jurisdiction of that High Court it may, at best, have only persuasive effect. By no amount of stretching of the doctrine of stare decisis, can judgment of one High Court be given the status of a binding precedent so far as other High Courts or Courts or Tribunals within their territorial jurisdiction are concerned. Conclusion - The term association of individuals will include Hindu Undivided Family of which the business is said to be a joint concern. The Criminal Application is dismissed.

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