TMI Tax Updates - e-Newsletter
January 6, 2025

Case Laws in this Newsletter:

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

Articles

1. CONDONATION OF DELAY IN FILING SECOND APPEAL BY THE GOVERNMENT

   By: DR.MARIAPPAN GOVINDARAJAN

2. Analysis of 55th GST Council’s decision To Clarification regarding requirement of reversal of Input Tax Credit by electronic commerce operators in respect of supplies made under section 9(5) of CGST Act, 2017

   By: Vivek Jalan

3. LEGAL TERMINOLOGY IN GST LAW (PART -4)

   By: Dr. Sanjiv Agarwal

4. State Authorities cannot issue SCN and pass order thereof when Central Authorities has already initiated the proceedings under GST

   By: Bimal jain

5. Analysis of GST Council’s Decision on Issues pertaining to taxability of Vouchers

   By: Vivek Jalan

News

1. Govt permits export of 2 lakh tonne wheat to Nepal

2. DPIIT Partners With Stride Ventures To Accelerate Growth And Global Expansion of Indian Startups

3. ED, Patna has provisionally attached movable and immovable properties worth Rs.1.66 Crore (approx.) under the PMLA, 2002 in connection with Kotak Mahindra Bank fraud case.

4. Shri Piyush Goyal unveils ‘Logistics Ease Across Different States (LEADS) 2024’ Report

5. Shri Piyush Goyal calls for coexistence of charging and battery swapping infra for faster EV adoption in India

6. India pledges support to Maldives to help it navigate economic issues

Notifications

DGFT

1. 48/2024-25 - dated 4-1-2025 - FTP

Export of Wheat to Nepal through National Cooperative Exports Limited (NCEL)

GST - States

2. F. 14 (93)/LA/2024/jtsecylaw/1445-1454 - dated 31-12-2024 - Delhi SGST

Delhi Goods and Services (Amendment) Act, 2024.

Income Tax

3. 05/2025 - dated 3-1-2025 - IT

Exemption from specified income U/s 10(46) of IT Act 1961 – ‘Karnataka State Horticulture Development Agency’

4. 04/2025 - dated 3-1-2025 - IT

Exemption from specified income U/s 10(46) of IT Act 1961 – ‘The Commissioners for the Rabindra Setu, Kolkata’

SEZ

5. S.O. 05 (E) - dated 24-12-2024 - SEZ

Central Government de-notifies an area of 3.167 hectares, thereby making the resultant area as 2.614 hectares at Nanakramguda Village, Serilingampally Mandal, Ranga Reddy District in the State of Telangana

Highlights / Catch Notes

GST

• Arbitrary GST Registration Cancellation Without Proper Notice Violates Natural Justice, HC Rules.

  Case-Laws - HC : The HC held that the final order cancelling GST registration failed to record reasons supporting allegations in the show cause notice, violating natural justice principles. The authorities arbitrarily cancelled registration retrospectively without indicating such intent in the notice. Consequently, the impugned cancellation order could not be sustained, and the petition was allowed.
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• Unreasoned refusal of adjournment for contentious hearings quashed by HC; procedural fairness upheld.

  Case-Laws - HC : HC quashed impugned order dated 16 August 2024 passed by Assistant Commissioner u/s 73(9) of Central Goods and Services Tax Act, 2017. HC held Assistant Commissioner took narrow, pedantic view in refusing adjournment without assigning reasons, despite contestation regarding petitioner's participation in hearings. Petition allowed.
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• Petition challenging adjudication order dismissed; statutory appeal remedy available to examine natural justice claim.

  Case-Laws - HC : The HC dismissed the petition challenging the adjudication order passed u/s 73(9) of the MGST/CGST/IGST Acts, holding that an efficacious statutory appeal remedy was available. The appellate authority could examine the petitioner's claim of violation of natural justice principles in passing the adjudication order.
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• Unfair Order Blocking Electronic Credit Ledger Quashed for Lack of Valid Reasons and Procedural Lapses.

  Case-Laws - HC : The HC quashed the order blocking the petitioner's Electronic Credit Ledger u/r 86A of CGST Rules, 2017 due to the absence of a pre-decisional hearing and lack of independent or cogent reasons to believe. The order impermissibly relied on borrowed satisfaction from another officer's report, contrary to the HC's decision in K-9-Enterprises's case. The absence of valid material constituting 'reasons to believe' failed to satisfy Rule 86A's mandatory requirements. Consequently, the impugned order blocking the ECL was quashed for being illegal and arbitrary.
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• Interim relief granted against final order by tax authorities over alleged invoice suppression.

  Case-Laws - HC : Petitioner challenged jurisdiction u/s 74(5) of CGST Act for alleged suppression regarding invoices raised on NHAI. HC held petitioner made prima facie case for interim relief. Respondents can proceed with show-cause notice hearing but no final order without HC permission during petition pendency. Matter listed on 04.09.2024.
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• Cancellation of GST registration upheld for non-compliance on change of principal place of business, but opportunity granted for fresh application.

  Case-Laws - HC : Appellant's GST registration cancellation upheld for non-compliance with Section 28(1) of WBGST Act, 2017 and Rule 19(1) of WBGST Rules, 2017 regarding procedure for change of principal place of business. However, HC granted opportunity to file appropriate application with supportive documents before Assistant Commissioner, who shall decide on merits uninfluenced by earlier observations. Appeal disposed of.
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Income Tax

• Buyer exempted from TDS on purchase of goods from IFSC Unit seller availing tax holiday.

  Notifications : No deduction of tax shall be made u/s 194Q of the IT Act 1961 by a buyer on purchase of goods from an International Financial Services Centre Unit seller, subject to conditions: seller furnishing statement-cum-declaration in prescribed form for 10 consecutive assessment years opted for section 80LA deduction; buyer not deducting tax after receiving form and furnishing payment details in tax statement. Relaxation available only for declared years. Definitions of seller, buyer, IFSC, Unit provided. DGIT(Systems) to prescribe procedures and formats.
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• Payments to National Credit Guarantee Fund Exempt from Income Tax Deduction u/s 197A.

  Notifications : Central Government notified u/s 197A(1F) of Income Tax Act, 1961 that no tax deduction under Chapter XVII shall be made on payments received by credit guarantee fund established, financed and managed by National Credit Guarantee Trustee Company Limited as per Section 10(46B)(ii), exempt from income tax. Notification effective from date of publication in Official Gazette.
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• Petitioner's Challan Typo Corrected by Tax Officer, Refund Released Despite Higher Authority's Silence.

  Case-Laws - HC : Petitioner mentioned TAN instead of PAN on challans for excise duty refund. HC directed Deputy Commissioner Income Tax, Circle-1, Jammu to correct challan error within two weeks, with or without Chief Commissioner's approval, and release payable amount to petitioner. If no approval received, deemed granted for Deputy Commissioner to make correction and release payment.
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• Taxpayer's Refund Claim Delayed Due to Jurisdictional Issues and COVID-19, High Court Allows Consideration on Merits.

  Case-Laws - HC : Petitioner diligently pursued refund claim. Payments delayed due to arbitration dispute. Refund claim filed timely with jurisdictional authority. Delay occurred due to lack of jurisdiction and COVID-19 pandemic. HC held compelling circumstances existed for condoning delay in filing application u/s 119(2)(b) before CBDT. Petition allowed, directing consideration of claim on merits.
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• Authorities Failed to Provide Reasoned Orders on Stay and Review Applications, Matter Remanded.

  Case-Laws - HC : Petitioner's stay and review applications rejected without reasoned and speaking orders by respondents. HC held AO did not follow correct procedure in deciding applications as per precedents. Matter remitted to respondent No. 2 to consider stay/review applications afresh.
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• Reasonable cause for delay in tax audit compliance exempts penalty: ITAT allows assessee's appeal.

  Case-Laws - AT : The ITAT held that the assessee was prevented by reasonable and genuine cause for not getting the books audited in time u/s 44AB for the relevant previous years due to peculiar circumstances. Relying on the precedent of APL (India) Pvt. Ltd., the ITAT directed the AO to delete the penalty levied u/s 271B, allowing the assessee's appeal on the ground of reasonable cause for delay in audit compliance.
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• Unexplained investments taxed u/ss 56 and 69; ITAT directs PCIT for further inquiry.

  Case-Laws - AT : The ITAT held that the assessee failed to explain the nature and source of investment with necessary supporting evidence. The PCIT's action invoking section 263 was in accordance with statutory provisions. While the AO should have taxed Rs. 14,93,393/- u/s 56(2)(x) and Rs. 33,18,000/- u/s 69 instead of the entire stamp duty value, the matter was set aside to the PCIT for further inquiry regarding year of purchase, purchase cost, and date-wise payments to determine the amount of investment u/s 69. The assessee's appeal was partly allowed for statistical purposes.
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• Income concealed can be reassessed under 147 despite search assessment under 153C.

  Case-Laws - AT : The ITAT upheld the validity of reopening of assessment u/s 147 despite the existence of Section 153C pertaining to assessments following search and seizure operations. It relied on the precedent PCIT vs Naveen Gupta, which held that the non-obstante clause in Section 153C does not bar reassessment u/s 147. The ITAT found merit in the revenue's arguments that the AO had tangible material and recorded reasons for initiating reassessment proceedings, and its jurisdiction could not be challenged at this stage as per Abhishek Jain. The ITAT dismissed the assessee's contentions regarding lack of notice and overseas detention. Regarding penalty u/s 271(1)(c), the ITAT upheld the levy, citing the Supreme Court's decision in MAK Data (P) Limited, as the assessee failed to provide a reasonable explanation for concealment of income.
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• Consolidated satisfaction note for multiple years invalidates assessment u/s 153C; separate notes required.

  Case-Laws - AT : A consolidated satisfaction note was prepared for multiple assessment years instead of separate notes, rendering the assessment proceedings u/s 153C invalid. The ITAT held that without a separate satisfaction note establishing the seized materials' relevance to the assessee, no addition could be made without resorting to Sections 147/148 or 153C. As the twin conditions for invoking Section 263 were not met, the ITAT quashed the assessment framed u/s 153C read with Section 143(3), deciding in favor of the assessee.
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• Trusts/partnerships receiving money sans consideration from settlors, treated as taxable income under Sec 56(2)(x).

  Case-Laws - AT : The ITAT dismissed the assessee's appeal, holding that the amount received by the trust without consideration for the benefit of non-relatives, and the assessee being made a partner in firms where the settlor had substantial interest, attracts the provisions of Section 56(2)(x). The term "shares" in Explanation (d) to Section 56(2)(vii) is interpreted to include "interest in partnership firm". The AO's lack of enquiry and non-application of mind to legal issues justified revisionary action u/s 263 as the order was prejudicial to revenue interests.
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• Agriculturist's bona fide belief exempted cash sale of ancestral farm land from 269SS restrictions despite disclosure.

  Case-Laws - AT : Assessee sold ancestral agricultural property for cash consideration to relatives, agriculturists. Though agricultural land sale proceeds exempt u/s 2(14), assessee bona fide believed Section 269SS cash receipt restrictions inapplicable. No intention to generate unaccounted money as sale deed recorded full cash receipt disclosed in return. Assessing Officer accepted returned income in 143(3) order. ITAT deleted 271D penalty, deciding in assessee's favor, violation of 269SS not established given bona fide belief and full disclosure.
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Customs

• Customs agent cleared of wrongdoing in mis-declaration case due to lack of evidence.

  Case-Laws - HC : Appellant customs house agent not found party to mis-declaration of imported goods by other co-noticees. HC set aside orders of Tribunal and Adjudicating Authority confirming demand against appellant due to lack of evidence of connivance and perverse findings. Appeal allowed.
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• Customs can't deny EPCG license benefits based on export obligation if DGFT doesn't revoke discharge certificate first.

  Case-Laws - AT : The CESTAT held that customs authorities cannot question the discharge certificate issued by DGFT regarding fulfilment of export obligation under the EPCG License, unless DGFT itself takes a prior decision that the appellant had not discharged the obligation. As long as the appellant fulfilled the export obligation within the extended time granted by DGFT, it cannot be alleged by customs that the obligation was not met, even if the appellant made further exports after excluding those made by a disputed entity. Customs cannot go behind the benefits availed in the absence of adjudication by DGFT. An action for recovery of benefits must be preceded by an order from the competent FDTR authority that the certificate was illegally obtained.
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• Arms import exemption misused? CESTAT allows sale to affiliated bodies after import duty-free.

  Case-Laws - AT : National Rifle Association of India (appellant) imported arms and ammunition under exemption Notification No. 146/94-Cus for national/international competitions. Goods were sold to State Rifle Associations and District Clubs instead of direct use. CESTAT held no 'Actual User' condition existed in notification; use by constituent bodies permissible. Confiscation, demand of duty/interest, and penalty u/s 114A set aside as no violation occurred. Goods used for intended purpose. Impugned order set aside; appeal allowed.
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• Goods confiscated for non-compliance with labelling rules; CESTAT reduces penalties.

  Case-Laws - AT : Appellant failed to comply with labelling requirements under Legal Metrology (Packaged Commodities) Rules, 2011 and Foreign Trade Policy 2009-2014 by not producing Registration Certificate upon goods' arrival, rendering goods liable for confiscation u/s 111(d) and penalty u/s 112(a) of Customs Act, 1962. CESTAT partly allowed appeal, reducing redemption fine to Rs.30,000/- and penalty to Rs.5,000/- considering procedural delay in obtaining Registration Certificate after goods' arrival.
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DGFT

• Export obligation periods extended for imports of coconut oil, spices for value addition.

  Circulars : Para 6.06(c)(ii) of HBP 2023 amended export obligation period against import of items covered by Chapter 9 of ITC(HS) and coconut oil from 90 days to 6 months from date first import consignment cleared by Customs. Para 6.06(c)(iii) amended export obligation period for import of spices for value addition like crushing/grinding/sterilization or manufacture of oils and oleoresins of pepper, cardamom and chillies from 120 days to 6 months from date of first import consignment.
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• An official procedure exists for stakeholders to provide feedback on India's Foreign Trade Policy.

  Circulars : Para 1.04(k) incorporated in Chapter 1 of Handbook of Procedures 2023 specifies procedure for furnishing views, suggestions, comments, or feedback from stakeholders including importers/exporters/industry experts concerning formulation, amendment or incorporation of specific provisions in Foreign Trade Policy. Central Government has option to consult stakeholders to seek their views, suggestions, comments or feedback as trade facilitation measure under Para 1.07A of Foreign Trade Policy 2023.
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FEMA

• Government Warns Non-Profit Associations: Promptly Respond to Queries, Provide Complete Info for FCRA Applications.

  Circulars : MHA issued a public notice advising applicant associations to regularly log onto their FCRA portal account and email account, and promptly respond to queries/clarifications raised by the Ministry while processing registration, renewal, and prior permission applications under FCRA, 2010. Failure to respond or provide incomplete information/documents may lead to denial of applications. The notice emphasizes that application processing is done completely online on the FCRA portal, and no paper mode communication is entertained.
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• Validity of FCRA registration certificates extended for certain entities.

  Circulars : FCRA registration certificates validity extended: (i) Entities whose validity extended till 31.12.2024 and renewal pending, validity further extended till 31.03.2025 or disposal, whichever earlier. (ii) Entities whose 5 years validity expiring 01.01.2025 to 31.03.2025 and applied for renewal, validity extended till 31.03.2025 or disposal, whichever earlier. On renewal refusal, validity deemed expired from refusal date. Associations ineligible to receive or utilize foreign contributions post expiry.
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• NGO can transfer tax refund from non-FCRA to FCRA account without violating foreign contribution law.

  Circulars : Associations can transfer proportionate income tax refund pertaining to FCRA account received in non-FCRA bank account back to FCRA bank account without violating Section 17 of Foreign Contribution (Regulation) Act, 2010. TDS deducted may be accounted as utilization of FC, and refund received in FCRA account treated as "other income" reportable in FC-4 form.
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• Unspent Admin Expenses Can Be Carried Forward Under Amended Foreign Contribution Rules for NGOs.

  Notifications : The Central Government has amended the Foreign Contribution (Regulation) Rules, 2011 to allow associations to carry forward unspent allowable administrative expenses to the succeeding financial year with reasons mentioned in Form FC-4. Form FC-4 has been amended to include details for carrying forward unspent administrative expenses and certificate from Chartered Accountant regarding violations of FCRA, 2010. The amendments aim to provide flexibility in utilization of administrative expenses by associations and enhance compliance monitoring.
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Corporate Law

• Corporate Insolvency: Apex Court Denies Transfer to NCLT After Irreversible Winding-Up Proceedings.

  Case-Laws - HC : HC has jurisdiction to transfer company petition to NCLT for CIRP under IBC 2016. However, winding-up proceedings reached irreversible stage with partial asset sales and third-party rights created. Transferring case to NCLT not feasible after substantial asset monetization. Application by SBI dismissed as irreversible situation created, not in interests of justice to transfer matter to NCLT.
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IBC

• Belated claim inadmissible in insolvency proceedings; RP bound by statutory timelines.

  Case-Laws - AT : RP rightly rejected belated claim filed by Appellant much beyond extended 90-day period from public announcement as per IBC and CIRP Regulations. RP lacks adjudicatory powers over contingent claims arising from damages and breach of contract. Surprise claims inadmissible to ensure potential resolution applicants aware of liabilities from information memorandum. NCLAT upheld NCLT order dismissing Appellant's plea for claim admission, finding no irregularity by RP in adhering to statutory timelines for timely resolution process.
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• Corporate Debtor's Revised Resolution Plan Rejected After Intangible Asset Valuation; NCLAT Upholds CoC's Discretion.

  Case-Laws - AT : The NCLAT upheld the order of the Adjudicating Authority directing valuation of intangible assets and rejecting the appellant's revised resolution plan. The appellant's initial resolution plan was approved, but upon an application by an unsecured creditor, the Adjudicating Authority ordered revaluation of intangible assets and reconsideration by the CoC. The appellant's revised plan was rejected by the CoC, and the Adjudicating Authority rightly dismissed the appellant's application as infructuous, directing issuance of fresh Form G. The NCLAT held that the intangible assets must be valued separately, and the CoC's commercial wisdom in rejecting the revised offer was a legitimate exercise of discretion. The appeal was dismissed.
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• Defaulting Principal Borrower Triggers Personal Guarantor's Liability; Bank Authorized to Invoke Guarantee.

  Case-Laws - AT : The NCLAT held that the Respondent Bank was entitled to invoke the personal guarantee against the Appellant as the principal borrower had failed to discharge the debt. Once the principal borrower defaults, the liability of the personal guarantor gets triggered. The Bank's officer who filed the Section 95 application was duly authorized under the State Bank of India General Regulations, 1955. The appeal was dismissed.
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Indian Laws

• Failure to rebut presumptions under NI Act leads to setting aside acquittal in cheque bounce case.

  Case-Laws - HC : The HC set aside the acquittal order u/s 138 of the NI Act. It held that the respondent failed to rebut the presumptions raised against him u/ss 139 and 118 of the NI Act regarding the cheque being issued for discharge of a legally enforceable debt or liability. The mere averment of the respondent being financially sound than the appellant, without any supporting material, was insufficient to shift the burden on the appellant to prove means to advance the loan. The matter was listed for further directions.
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Service Tax

• Pre-deposit under Sabka Vishwas Scheme adjustable against liability, excess can be adjusted against future dues.

  Case-Laws - HC : Respondent had made excess pre-deposit of Rs. 15,80,561 against demand confirmed vide Order-in-Original. As per Section 124(2) of Sabka Vishwas Legacy Disputes Resolution Scheme, 2019, excess pre-deposit is adjustable against liability under the Scheme. HC held that out of Rs. 15,80,561 excess pre-deposit, Rs. 8,75,075 ought to be adjusted towards respondent's liability under the Scheme. Balance of Rs. 7,05,546, though not refundable, can be adjusted against future liabilities. Appeal dismissed.
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• Developers entitled to refund of service tax paid for authorized SEZ operations, overruling technical objections.

  Case-Laws - AT : The appellant, being the developer/co-developer in a Special Economic Zone (SEZ), is entitled to a refund of service tax paid in relation to their authorized operations. The CESTAT Ahmedabad Bench, relying on previous decisions, held that the substantive benefit of service tax exemption u/s 26 of the SEZ Act cannot be negated by notifications issued under other enactments. The procedural and technical objections raised by the revenue were rejected. Once the tax was charged, collected, and paid, the recipient cannot be burdened to explain the levy. The appellant successfully established eligibility for a refund of service tax paid for transportation of passengers' services within the SEZ. Consequently, the appellant is entitled to the refund of service tax paid for services used in authorized SEZ operations, and the appeals were allowed.
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• Service Tax: Reimbursement Not Consideration, Debit Note CENVAT Credit Allowed, No Deliberate Tax Evasion.

  Case-Laws - AT : Reimbursement received not consideration for taxable service. CENVAT credit on debit notes containing requisite particulars admissible. CENVAT credit on invoices for out-of-pocket expenses allowed. Extended period of limitation unsustainable as no allegation of deliberate tax evasion. No interest payable on CENVAT credit availed but not utilized as credit reversed before utilization tantamount to non-availment. Appeal allowed by CESTAT.
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Central Excise

• Railway Locomotive Parts Misclassification Not Equal to Misdeclaration, Penalties Set Aside.

  Case-Laws - AT : Parts of railway diesel locomotive classified under CETH 86079100. Allegation of wilful misclassification and intent to evade duty untenable. Misclassification not equated with misdeclaration. Bona fide adoption of classification by importer permissible as manufacturers not expected to be fully conversant with tariff schedules. Extended period of limitation and penalties set aside. Appeal allowed.
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Case Laws:

• GST

• 2025 (1) TMI 257
  Revocation of cancellation of their GST registration - final order of cancellation fails to record or assign any reason in support of the allegations which stood leveled in the SCN and which preceded the passing of that order - Violation of principles of natural justice - HELD THAT:- As is manifest from a reading of the SCN of 26 December 2023, the respondents had failed to indicate any intent to cancel the registration from a retrospective date. The final order of cancellation fails to record or assign any reason in support of the allegations which stood leveled in the SCN and which preceded the passing of that order. In view of the aforesaid, the order of 08 January 2024 is rendered wholly unsustainable. As is manifest from a reading of the SCN of 26 December 2023, the respondents had failed to indicate any intent to cancel the registration from a retrospective date. Conclusion - The entire procedure as adopted by the respondents appears to be wholly arbitrary. The impugned order of 08 January 2024 cannot possibly be sustained - Petition allowed.

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• 2025 (1) TMI 256
  Suspension of GST registration of petiitoner - non-consideration of reply - Violation of principles of natural jusice - HELD THAT:- Admittedly, the petitioner is a registered dealer under the provisions of GST. The respondent has initiated an enquiry into certain alleged irregularities committed by the petitioner. The petitioner has replied to the said show cause notice. Under the said circumstances, it would be appropriate for the respondent to consider the reply of the petitioner and thereafter pass suitable orders in accordance with law and the act of respondent in suspending the GST registration of the petitioner pending enquiry would be too harsh on the petitioner as he would not be in the position to conduct his business and the enquiry may take some time. The respondent is hereby directed to revoke the suspension of the GST registration of the petitioner which has been done as per show cause notice dated 14.10.2024. Petition disposed off.

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• 2025 (1) TMI 255
  Challenge to order which has come to be passed and in terms of which a SCN dated 30 May 2024 pertaining to the tax period April 2019 to March 2020 has come to be finalized - HELD THAT:- While dealing with an identically worded order passed by the said officer, in XEROX INDIA LIMITED VERSUS ASSISTANT COMMISSIONER, WARD 208 (ZONE -11) DGST AND ANR [ 2024 (12) TMI 1283 - DELHI HIGH COURT] it was held that ' The Assistant Commissioner has clearly adopted a template where the only reason assigned is that the reply filed was not comprehensible, conceivable, not perspicuous and is ambiguous . This clearly exhibits an abject non-application of mind and the officer repeatedly employing identical phraseology to deal with such matters.' - the final order cannot be sustained. The order dated 25 August 2024 is quashed - petition allowed.

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• 2025 (1) TMI 254
  Cancellation of registration of the petitioner - non filing of the GST return for a continuous period of six months - petitioner is ready to make the payment towards GST returns for a period of six months - HELD THAT:- In view of the consensus between the parties, the matter is covered by the order passed in Kiran Enterprises GSTIN Versus Commissioner, State Goods Another [ 2024 (10) TMI 1306 - UTTARAKHAND HIGH COURT] ], the present writ petition is also decided in terms of the said order. Petition disposed off.

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• 2025 (1) TMI 253
  Challenge to order passed in exercise of powers conferred by Section 73 (9) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- While there is some contestation with respect to the participation of the petitioner in the hearings that ensued and on the different dates which were fixed by the Assistant Commissioner, for the purposes of the present writ petition, we find it unnecessary to delve into those aspects since, and in our considered opinion, the Assistant Commissioner has clearly taken an extremely narrow and pedantic view while refusing to accede to the prayer for adjournment. The authority has failed to assign any reason in support of its conclusion that the request for adjournment was unmerited. The impugned order dated 16 August 2024 is quashed - petition allowed.

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• 2025 (1) TMI 252
  Maintainability of petition - availability of alternative remedy - challenge to adjudication order passed under Section 73 (9) of the M.G.S.T. Act, 2017, the C.G.S.T. Act, 2017 read with Section 20 of the I.G.S.T. Act, 2017 and the allied enactments - HELD THAT:- It is afraiding, in the wake of the fact that an efficacious remedy of statutory appeal is available to the petitioner, accepting for the sake of arguments that his request seeking time to respond to the show cause notice was not considered favourably, there are no reason to make exception and exercise the power under Article 226 of the Constitution. The appellate authority would be able even to go into the stand of the petitioner of breach of principles of natural justice while passing the adjudication order - petition dismissed.

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• 2025 (1) TMI 251
  Blocking the Electronic Credit Ledger (ECL) of the petitioner under Rule 86A of the Central Goods and Services Tax Rules, 2017 (CGST Rules) - absence of a pre-decisional hearing - HELD THAT:- The issue answered in favour of the petitioner- assessee in K-9-Enterprises s case [ 2024 (10) TMI 491 - KARNATAKA HIGH COURT ] where it was held that ' in the absence of valid nor sufficient material which constituted reasons to believe which was available with respondents, the mandatory requirements/pre- requisites/ingredients/parameters contained in Rule 86A had not been fulfilled/satisfied by the respondents- revenue who were clearly not entitled to place reliance upon borrowed satisfaction of another officer and pass the impugned orders illegally and arbitrarily blocking the ECL of the appellant by invoking Rule 86A which is not only contrary to law but also the material on record and consequently, the impugned orders deserve to be quashed.' Since no pre-decisional hearing was provided/granted by the respondents before passing the impugned order, coupled with the fact that the impugned order invoking Section 86A of the CGST Rules by blocking of the Electronic credit ledger of the petitioner does not contain independent or cogent reasons to believe except by placing reliance upon the reports of Enforcement authority which is impermissible in law, since the same is on borrowed satisfaction as held by the Hon ble Division Bench of this Court, the impugned order deserves to be quashed. It is also pertinent to note that in the impugned order except stating that a registered supplier who has been found to be non-existent or not to be conducting business from his place of registration , no other reasons are forthcoming in the impugned order. On this ground also, the impugned order dated 06.06.2024 deserves to the quashed. Conclusion - The impugned order is quashed, since no pre-decisional hearing was provided/granted by the respondents before passing the impugned order, coupled with the fact that the impugned order invoking Section 86A of the CGST Rules by blocking of the Electronic credit ledger of the petitioner does not contain independent or cogent reasons to believe. Petition allowed.

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• 2025 (1) TMI 250
  Short payment of Goods and Services Tax - adjudication of challenge to appellate order - HELD THAT:- The first Division Bench in M/S. MAA TARINI TRADERS, M/S. SURA CONSTRUCTION, M/S. SMT. AMULU PATRO, M/S. THE NATIONAL SMALL INDUSTRIES CORPORATION LIMITED, ASHISH MOHANTY, M/S. V.S.T. TILLERS TRACTORS LIMITED, NIRANJAN PRADHAN VERSUS STATE OF ODISHA OTHERS, JOINT COMMISSIONER OF STATE TAX, ANOTHER, CHIEF COMMISSIONER OF C.T. G.S.T., ODISHA, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS (CBIC) , DEPARTMENT OF REVENUE, MINISTRY OF FINANCE OTHERS, C.T. G.S.T. OFFICER, CUTTACK-I [ 2024 (2) TMI 1421 - ORISSA HIGH COURT] directed a quantum of deposit with liberty to parties in as much as, petitioner could avail of its remedy upon constitution of the Tribunal and in event it does not do so within time provided upon reconstitution, the department would be free to proceed. Petition disposed off.

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• 2025 (1) TMI 249
  Jurisdiction to invoke section 74(5) of the Central Goods and Service Tax Act, 2017 - suppression on the part of the petitioner with regard to invoices raised upon National Highway Authority of India or not - HELD THAT:- It was pointed out from the impugned show-cause notice by the learned advocate for the petitioner that no details are given with regard to alleged suppression of the facts by the petitioner. The petitioner has made out a very good prima facie case for granting interim relief during the pendency of this petition. Therefore, the respondents may proceed with the hearing of the show-cause notice but no final order shall be passed without permission of this Court during the pendency of this petition. Stand over to 4th September, 2024. To be listed on top of the Board.

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• 2025 (1) TMI 248
  Declination to grant any interim order and direction has been issued to file the affidavits - cancellation of appellant s registration under the GST Act on the ground that the appellant was not carrying on business in the place mentioned in the registration certificate - HELD THAT:- Admittedly, the appellant did not comply with the procedure as stated in section 28(1) of the WBGST Act, 2017 as well as Rule 19(1) of the WBGST Rules 2017. Considering the fact that the registration of the appellant was granted several years back, this Court is of the view that one more opportunity can be granted to the appellant to go before the original authority viz., the Assistant Commissioner, State Tax, Government of West Bengal, Serampore Charge and file the appropriate application in the appropriate form along with all supportive documents. If the same is filed, the original authority viz., the Assistant Commissioner shall consider the said application and decide the same on merits uninfluenced by any observation made by the appellate authority in the earlier order. Appeal disposed off.

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• Income Tax

• 2025 (1) TMI 247
  Reopening of assessment - Period of limitation to issue notice issued u/s 148A(b) - scope of notices issued u/s 148 of the new regime between July and September 2022 - Application of TOLA to the Income Tax Act after 1 April 2021 - As decided by HC [ 2023 (2) TMI 1378 - GUJARAT HIGH COURT] allowed assessee appeal quashing and setting aside the notice issued u/s 148 alongwith the order u/s 148A(d) of the self-same date. HELD THAT:- The issue involved in these Special Leave Petitions are squarely covered by the Judgment of this Court rendered in Union of India Ors. vs. Rajeev Bansal [ 2024 (10) TMI 264 - SUPREME COURT (LB)] The petitions filed by the Revenue are disposed of. The assessee will be governed by reasons discussed in the said Judgment. AO will dispose of the objections in terms of the law laid down by this Court. Thereafter, the assessee who is aggrieved will be at liberty to pursue all the rights and remedies in accordance with law, save and except for the issues which have been concluded in the Judgment. Pending applications, if any, also stand disposed of. Cases, which fall less than the value of Rs.50,00,000/- would have to be dropped - All that the assessee has to do now is to point out to the assessing officer that he is covered by para 7 of the High Court s judgment [ 2024 (10) TMI 1623 - PUNJAB AND HARYANA HIGH COURT] and the proceedings be dropped as the tax liability is less than Rs.50 lakh subject to verification of this particular fact. Special Leave Petition stands disposed of.

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• 2025 (1) TMI 246
  Excise duty refund and interest subsidy - full credit of challans deposited by the petitioner had not been given by the assessing officer due to wrong PAN number mentioned in the challans by the petitioner - petitioner has mentioned on the challans TAN number instead of PAN number - HELD THAT:- We are inclined to dispose of this petition by directing the Deputy Commissioner Income Tax, Circle-1, Jammu to ensure that the necessary correction in the challan as stated above is carried out with or without the approval of the Chief Commissioner Income Tax, Amritsar within a period of two weeks and the amount payable to the petitioner is released. We also make it clear that in case no approval is received by the Deputy Commissioner Income Tax Appeals for correction of an inadvertent and clerical error in the challans from the office of the Chief Commissioner Income Tax, Amritsar, the approval, as may be required, shall be deemed to have been granted and the Deputy Commissioner Income Tax, Circle-1, Jammu shall be competent to carry out the necessary correction and release the amount payable to the petitioner.

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• 2025 (1) TMI 245
  Delay in filing the application u/a 119 (2) (b) - respondent no. 1 rejected the application seeking condonation of delay filed u/s 119 (2) (b) as it was beyond the period of six years from the end of the Assessment Year as stipulated in the CBDT Circular No. 09/2015 thereby holding that the same is not maintainable - HELD THAT:- We find the petitioner has been diligent enough in pursuing the claim for a refund. In fact, it is material to note that the payments made to the petitioner by the Government of UP were delayed on account of the dispute which had to be referred to arbitration. Pursuant to the arbitral award payments were made to the petitioner in different tranches. The petitioner had filed a claim for refund with respondent No. 3 within the stipulated period. However, respondent No. 3 did not have jurisdiction to process the claim as the same was for more than Rs. 10,00,000/-. The claim of the petitioner for the Assessment Year 2015-16 in respect of the very same contract was processed and refund was granted. In the meantime, there was outbreak of COVID pandemic. We are satisfied that a case making out compelling circumstances for filing the return belatedly is made out in the application filed by the petitioner. In the present facts, the petitioner has made out a case for condoning the delay in filing the application u/s 119 (2) (b) before the CBDT. There are adequate circumstances on record justifying the delay in filing application and hence, looking at the compelling reasons for the delay in filing the application the claim of the applicant ought to have been considered by the respondents on merits. Petition is accordingly allowed.

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• 2025 (1) TMI 244
  Stay and review application rejected - not providing a reasoned and speaking order while rejecting the applications - HELD THAT:- The respondent authorities has passed the assessment order dated 31.03.2024 passed u/s 143 (3) of the Income Tax Act 1961 along with copy of demand notice issued u/s 156 of the Income Tax Act 1961 against the petitioner. Thereafter the petitioner has filed an application under Section 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. 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 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 M/s Aarti Sponge Power Ltd. [ 2018 (4) TMI 1284 - CHHATTISGARH HIGH COURT ] Thus matter is remitted to the respondent No. 2 to consider the stay application afresh/review application.

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• 2025 (1) TMI 243
  Penalty u/s 271B - failure of the assessee to get accounts audited in respect of the previous year as required u/s 44AB but before specified due date i.e. due date for filing the return of income - HELD THAT:- Admittedly, the audit of Financial Year 2016-17 was completed in March 2019 obviously the audit of Financial Year 2017-18 cannot be done prior to that. We find force in the arguments of the assessee that under the above peculiar circumstances of the case the assessee was prevented by reasonable genuine cause for not getting the books of accounts completed audited in time. Therefore, we are of the considered opinion that the assessee was prevented by sufficient reasonable cause for not getting the books of accounts audited in time. As relying on APL (INDIA) PRIVATE LIMITED VERSUS JCIT (OSD) -8(1), MUMBAI [ 2014 (4) TMI 206 - ITAT MUMBAI] we hold that the assessee in the instant case was prevented by reasonable cause in not getting the accounts audited in time and accordingly, we direct the Assessing Officer to delete the penalty levied u/s 271B of the IT Act. Thus, the ground of appeal filed by the assessee is allowed.

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• 2025 (1) TMI 242
  Revision u/s 263 - AO had added the Fair Market Value (FMV) of the property to the total income of the assessee u/s 56(2)(x) - PCIT observed that the AO should have added u/s 56(2)(x) and actual purchase consideration as unexplained investment u/s 69A - HELD THAT:- Assessee failed to explain the nature and source of investment with necessary supporting evidences. Action of the PCIT is in accordance with clear statutory provisions of the Act. Clause (x) of Section 56(2) expands the scope of income from other sources w.e.f. AY.2017-18 and subsequent year to provide that receipt of the sum of money or property by any person without consideration or for inadequate consideration in excess of Rs. 50,000/- shall be chargeable to tax in the hands of recipient under the head Income from other sources . AO should have taxed Rs. 14,93,393/- and not the entire Stamp Duty Value (SVA) u/s 56(2)(x) of the Act. Moreover, AO should have added Rs. 33,18,000/- u/s 69 because assessee did not offer explanation about the nature and source of the investment which was not recorded in his books of account. As held in case of Malabar Industries Co [ 2000 (2) TMI 10 - SUPREME COURT] an incorrect application of law will satisfy the requirement of the order being erroneous. Hence, the PCIT has rightly involved provisions of section 263 of the Act. Whether directions of PCIT in the order u/s 263 of the Act are in order? - We find that there is confirmation and ledger account from the builder, M/s N. Rose Developers Pvt. Ltd., who has accepted payments from the appellant and also signed the documents. The said documents are the basis for the re-opening the assessment u/s 147 of the Act as well as revision proceedings u/s 263 of the Act. It is also a fact that in the payment receipts, different flats numbers are mentioned. It is also submitted that payments for purchase of flat were made from 09.11.2011 to 15.02.2020. Hence, all investments were not made in the current assessment year. Therefore, the addition of the total amount cannot be made in the subject assessment year. We also find that the facts as stated in different stages are contrary to each other, which require further clarification and verification to come to a correct conclusion. Therefore, in the interest of justice and fair play, the matter is set aside to the file of PCIT to make further inquiry with respect to the year of purchase, purchase cost and date-wise payments etc. to determine the amount of investment u/s 69. For statistical purpose, the appeal of the assessee is partly allowed.

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• 2025 (1) TMI 241
  Validity of reopening of assessment u/s 147 - Whether the appellant was rightly assessed u/s 148/147 despite the existence of Section 153C, which pertains to assessments following search and seizure operations? HELD THAT:- As foremost substantive ground seeking to quash section 148/147 proceedings and find no merit therein. This is for the precise reasons that case law PCIT Vs Naveen Gupta [ 2024 (11) TMI 1071 - DELHI HIGH COURT] holds that even if section 153C contains a non-obstate clause, the same does not bar a learned assessing authority to invoke re-opening u/s 148/147 of the Act. This is also coupled with the fact that the assessee has not filed the corresponding search records and panchanama so as to satisfy the rigor of Section 153C. Suffice to say, a perusal of the case file suggests that the learned Assessing Authority herein had recorded the corresponding reasons based on tangible material comprising of the evidence collected in post such enquiries and statements recorded from various persons. We further emphasize here that the department s allegation against the assessee right from the beginning is that he had indulged in various accommodation entries outside India in collusion with the searched person Shri Manish Jain. CIT-DR vehemently submits that the appellant herein has not even filed his bank statement right from scrutiny till date resulting this factual position. She also quotes Section 124(3) of the Act that even the assessee is precluded from challenging the Assessing Officer s jurisdiction as per Abishek Jain [ 2018 (6) TMI 211 - DELHI HIGH COURT] . We find merit in the Revenue s instant arguments that the learned assessing authority not only went by the relevant tangible materials initiating section 148/147 proceedings but also it s jurisdiction could not be questioned at this stage in the foregoing terms. Departmental authorities herein had not served any notice during the course of assessment, and therefore, the same deserves to be quashed - No substance therein as he has neither challenged the AO s action taking recourse to Section 144 proceedings by filing all the relevant notice, nor his passport details form part of records before us. We further wish to clarify there is no clarity in the case file that the US based authority had ever detained him during his alleged overseas trip. Imposition of penalty u/s 271(1)(C) for concealment of income - The assessee has admittedly not filed any reasonable explanation; much less a convincing u/s 271(1)(c) Explanation 1(A) (B) so as to get out of the rigor of concealment and furnishing of inaccurate particulars of income therein. We thus quote MAK Data (P) Limited [ 2013 (11) TMI 14 - SUPREME COURT] to conclude that the learned lower authorities have rightly levied the impugned penalty in his case this lead penalty appeal which also stands upheld.

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• 2025 (1) TMI 240
  Revision u/s 263 - Validity of assessment framed u/sec.153C - consolidated satisfaction note has been prepared for many assessment years - HELD THAT:- Since in the instant case a consolidated satisfaction note has been prepared for assessment years 2012-2013 to 2018-2019, therefore, the consolidation satisfaction note being not in accordance with law, therefore, the entire assessment proceedings is liable to be quashed. We hold accordingly and quash the assessment. There is also no dispute to the fact that two searches have taken place and there is only one satisfaction note i.e., a combined satisfaction note in the case of Yuvraj Dhamale Group of cases has been recorded, on the basis of which, notice u/sec.153C was issued to the assessee. However, no separate satisfaction note was recorded in the case of Shri Sachin Nahar that any books of account or documents seized or requisitioned pertains or pertain to or any information contained therein relates to the assessee. Therefore, no addition could have been made in the hands of the assessee without resorting to the provisions of either sec.147/148 or sec.153C of the Act. Once the assessment framed u/sec.153C r.w.s.143(3) is held to be void being not in accordance with law on account of a combined satisfaction note for assessment years 2012-2013 to 2018-2019 instead of separate satisfaction note, no addition could have been made in the hands of the assessee on the basis of the email dated 19.03.2021 without issuing a separate notice u/sec.153C or resorting to provisions of sec.148. Therefore, we do not find any error in the order of the Assessing Officer. For invoking the provisions of sec.263 of the Act, the twin conditions i.e., the assessment order must be erroneous and the order is prejudicial to the interest of Revenue must be satisfied as held in the case of Malabar Industrial Co. Ltd [ 2000 (2) TMI 10 - SUPREME COURT] - In the instant case, the order is certainly not erroneous, even though it may be prejudice to the interest of the Revenue. Therefore, the twin conditions are not satisfied and the PCIT, in our opinion, cannot invoke the provisions of sec.263 - Decided in favour of assessee.

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• 2025 (1) TMI 239
  Revision u/s 263 - Taxability of the investments in the hands of the trust u/s 56(2)(x) - assessment of trust - relatives inclusions in the beneficiaries - whether transactions involved in this case are out of the purview of section 56(2)(x) as the trust has been established exclusively for the family members covered in the definition of relative? HELD THAT:- Assessee has made only submissions with respect to the non-taxability of interest in partnership firm, the assessee has no where mentioned any thing about the receipt of preference shares and equity shares of M/s Silver Needle hospitality. The AO has also not conducted any query nor raise any further question as regard to the applicability of the provisions of section 56(2)(vii) explanation (d) vis- -vis preference shares and equity shares.AO has also failed to see the applicability of the provisions of section 45(4) of the Income Tax Act as they stood at the relevant times. It was the abundant duty of the AO to examine the valuation of shares of partnership firms, adopted by the settlor for crediting the capital account of assessee in those firms and the taxability of the same in the hands of the firms and vice versa, which the AO has not done in this case. Therefore, it is a complete case of lack of enquiry. It is settled position of law that tax planning is permissible if it is done within the four corners of law but tax evasion is not permissible. Whether amount received is not taxable in terms of section 56(x) as the same has been received for the benefit of relative? - We don t find any infirmity in the view of the PCIT in as much as it is evident from the clauses of the trust deed that the benefits of the trust were not restricted to relatives only. The benefit of the amount received was not restricted to the family members and hence the view of the AO is not plausible view therefore the PCIT is correct in law in holding the order as prejudicial to the interest of revenue. What was received is not covered by the definition of term property as given in explanation(d) of section 56(2)(vii)? - whether interest in partnership firm is covered in the meaning of expression property ? - There are so many differences between expression share and securities therefore one cannot say that they are synonyms. The additional differences highlight the complexities and nuances of shares and securities, and demonstrate the importance of understanding the specific characteristics of each. Expression shares and securities as used in explanation(d) of section 56(2)(vii) denotes two different type of properties these properties are distinct and hence the term and used between them carries a meaning of or . There are so many judicial pronouncements wherein it has been held that and can be read as or when the interpretation requires so. In the present case the context in which the term shares and securities has been used it is abundantly clear that and should be read as or . Further literal interpretation in the present case is also giving an absurd meaning therefor we are of the firm opinion that the expression and used here should be read as or Case laws where it has been held that terms 'or' and 'and' can be interchangeably interpreted to fulfil the legislative intent. We are of the view that term and is to be read as or . And if that be so then whether interest in partnership firm falls in the category of shares as used in explanation (d) of section 56(2)(vii). What is interest in partnership firm has been decided by so many judicial pronouncements wherein this expression has been interpreted of expression. We have already noted somewhere else that term shares as used in explanation-2 of section 56(2)(vii) is not restricted to the shares of companies only, rather it is wide enough to mean a part or portion of something. For instance, sharing refers to dividing or giving out portions of something among several people.. Merely because some expression is missing we cannot restrict the meaning of a word. It is settled position of law that that words should not be overly restricted; their meaning can be shaped by the context in which they are used. Legal texts, contracts, or laws often define words, but if a specific definition is not provided, courts or authorities may interpret the word according to its common usage or the broader context. Therefore we have to take the common meaning of word share . As interest in partnership firm falls in the category of shares and the same is covered by the provisions of explanation (d) of section 56(2)(vii). Therefore, we reject the contentions of assessee that interest in partnership firm is out of the purview of section 56(2)(X). Whether amount was not received without consideration? - No merit in this contention in view of the fact that it is not merely a case of receipt of an amount, rather a case where on the same date the assessee has been given rights in the partnership firms and the erstwhile partner has been retired. In fact, assessee has been made owner of the partnership firms without paying any penny. In fact, it is a finding of fact that no actual money has been transferred to the account of the assessee rather shares of M/s Silver Niddle has been transferred and capital account of the assessee has been credited in the partnership firms by reconstituting the partnership firms. Amount received by the trust is received under fiduciary capacity and hence not taxable and trust via trustee does not have any right to enjoy the receipt as owner - We don t find any merit in these arguments, there are provisions under the Income Tax Act which are meant exclusively for the purpose of taxation of Private Discretionary trusts. For instance, section 165 specify the tax rates applicable to a trust section 164A provides charge of tax in case of oral trust etc. Provisions of section 56(2)(X) are not applicable to genuine transactions - In the facts of the present case, two important facts which are missing in other cases are that the assessee in this case has received the amounts without consideration for the benefits of non-relatives, secondly the assessee has been made partner in those firms where the settlor was having substantial interest. In order to circumvent the provisions of section 45, which deals with the chargeability of capital gains under various circumstances, the assessee has adopted a route of transferring the assets of Partnership firm thorough layers of companies and juristic entities. Therefore, we are not convenience with the arguments of the assessee. Validity of Revision u/s 263 - The position of facts and law as discussed above would prove beyond doubt that the present case the order of the AO is erroneous in so far as prejudicial to the interest of revenue. AO has passed the order without making enquiries which should have been made by him. It is equally true that in final stage of assessment, the assessee has not disclosed the transferee of shares of private limited company along with interest in partnership firm in categorical terms. Here we would like to make a reference to the decision of Every stone [ 1994 (7) TMI 36 - RAJASTHAN HIGH COURT ] wherein it has been held that non application of mind by the AO to the legal issues would justify action of section 263. Assessee appeal dismissed.

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• 2025 (1) TMI 238
  Validity of reassessment proceedings initiated as time-barred under the amended provisions u/s 149(1) - HELD THAT:- The notices issued to the assessee in present case are barred by limitation under the new provision of Section 149(1) of the Act is not covered under TOLA. Accordingly, all the notices are quashed being barred by limitation.Appeal of the assessee is allowed.

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• 2025 (1) TMI 237
  Denial of Credit for Foreign Tax paid - Form No.67 was filed belatedly, i.e., beyond the due date for filing of the return of income - Directory v/s mandatory provision - HELD THAT:- Form No.67 was not filed within the due date for filing of the return of income under the provisions of section 139(1), but Form No.67 was filed on 22.03.2019. The CPC, Bangalore had processed the return of income as on 23.05.2020, which means that Form No.67 was very much available with the CPC, Bangalore. Therefore, the CPC, Bangalore cannot deny the claim for credit for foreign tax paid merely because Form No.67 was not filed within the due date specified for filing the return of income under the provisions of section 139(1) of the Act, as it is merely a directory. Decided in favour of assessee.

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• 2025 (1) TMI 236
  Penalty u/s 271D - violation of Section 269SS - sale of ancestral agricultural property in cash - HELD THAT:- We find that the assessee along with others has sold an ancestral property (agricultural property). During the course of proceedings, the assessee explained his shares were received in cash. The assessee was under the honest and Bonafide belief that the agricultural property sold to his relatives who are agriculturists is not covered u/s 269SS - assessee was also under the honest and Bonafide belief that as the agricultural land is exempt u/s 2(14) of the Act, the sale proceeds received from the agricultural land is exempt and therefore, sale proceeds received from sale of such agricultural lands is also not covered u/s 269SS. There was no intention whatsoever to generate unaccounted money/black money as the assessee had recorded the entire receipt of cash in the registered sale deed and duly disclosed the same not only in the return of income but also during the course of assessment proceedings. AO has also accepted the returned income while passing order u/s 143(3) of the Act. In view of the aforesaid reasoning and judicial pronouncements cited, we hold that the fact of the instant case penalty u/s 271D of the Act is not warranted and accordingly, we delete the same - Decided in favour of assessee.

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• Customs

• 2025 (1) TMI 235
  Mis-declaration of imported goods - whether the appellant CHA was a party to the entire illegal exercise done by the other three co-noticees? - HELD THAT:- In the absence of any evidence brought on record by the Adjudicating Authority, the Tribunal ought not to have confirmed the order passed by the Adjudicating Authority. The Tribunal has not independently assessed the factual position. As pointed out earlier, even in the show cause notice, there was no substantial allegation against the appellant that he connived with the other three persons to mis-declare the goods. Therefore, the finding rendered by the Tribunal to be perverse qua the facts and circumstances of the case. The orders passed by the Tribunal as well as the Adjudicating Authority are set aside - Appeal allowed.

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• 2025 (1) TMI 234
  Error in not considering that, in the entire show cause notice John Miranda and Rakesh Magoo or the importer have never given any statement alleging that the petitioner was aware of the alleged mis-declaration of value - Department proceeded on the basis of assumption, presumption and surmise in the matter without any evidence or not - failure to consider that the petitioner after obtaining the authorization from the importer viz. M/s. Surya Trading Co., Delhi in course of ordinary business filed the bill of entry on the basis of the invoice, packing list, bill of lading, import-export code number etc. provided by the importer - HELD THAT:- As could be seen from the order of adjudication, the allegations against the appellant are very specific and has been noted in paragraph of the Order-in-Original, which is the basis on which show cause notice was issued. Thereafter, liberty was granted to the appellant to file their reply and they were personally heard in the matter and the Order-in-Original was passed. The adjudicating authority in paragraphs in 33.2 and 33.3 has clearly brought out the modus adopted by the appellant and how the appellant was a party to the entire under valuation exercise. This factual finding has been affirmed by the Learned Tribunal. There are no questions of law, much less substantial questions of law, arising for consideration in this appeal. Appeal dismissed.

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• 2025 (1) TMI 233
  Fulfilment of export obligation under the EPCG License within the time extended by the Directorate General of Foreign Trade (DGFT) - jurisdiction to question the discharge certificate issued by the DGFT - confiscation - penalties - extended period of limitation. HELD THAT:- The appellant had initially fulfilled the export obligation after including the exports made through Sundram Export and DGFT by a letter dated 10.05.1999 confirmed that the appellant had fulfilled the export obligation. After the appellant came to know that the export of CD-ROMs made by Sundram Exports was being disputed by the Directorate of Revenue Intelligence, the appellant made further exports after the initial time granted by DGFT was extended upto 31.03.2002, and fulfilled the export obligation after excluding the exports made by Sundram Export. In respect of this License, the Commissioner did not accept the plea of the appellant that it had fulfilled export obligation since the appellant had earlier written to DGFT that it had fulfilled its export obligation and DGFT by a letter dated 10.05.1999 had discharged the appellant from the export obligation. So long as the time period for discharging the obligation under the EPCG License dated 29.12.1994 was extended by DGFT and the appellant fulfilled its obligation under the License before the expiry of the said extended period, it cannot be urged by the custom authorities that the appellant had not fulfilled its export obligation. It does not matter if the appellant had made further exports to fulfill the export obligation after discarding the exports made by Sundram Exports. This step was taken by the appellant as a matter of abundant caution when it came to the knowledge of the appellant that the Directorate of Revenue Intelligence was examining the over-valuation of goods by Sundram Exports. The finding recorded by the Commissioner that this was done in a fraudulent manner by the appellant is without any basis. In fact, DGFT did not question this act of the appellant and in fact issued the discharge certificate. It clearly transpires from the aforesaid judgment of the Delhi High Court in Designco [ 2024 (11) TMI 1150 - DELHI HIGH COURT] that custom authorities cannot go behind the benefits availed, in the absence of any adjudication having been undertaken by DGFT. In other words, an action for recovery of benefits claimed and availed would have to necessarily be preceded by an order of the competent authority under the FDTR Act that the certificate or script had been illegally obtained. Conclusion - The customs authorities cannot question the discharge certificate issued by DGFT in respect of the obligation to be fulfilled by the appellant under EPCG License dated 29.12.1994, unless DGFT itself takes a prior decision that the appellant had not discharged the obligation under the said EPCG License. Appeal allowed.

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• 2025 (1) TMI 232
  Violation of conditions of the exemption Notification No. 146/94-Cus by National Rifle Association of India (appellant) - sale of imported arms and ammunition to State Rifle Associations and District Clubs instead of using them directly for national or international competitions - confiscation - interest - penalty. Violation of conditions of the exemption Notification No. 146/94-Cus by National Rifle Association of India (appellant) - HELD THAT:- A plain reading of the notification nowhere shows that there is any 'Actual User' condition. All that is stated is that the goods should be used for national or international championships or competitions. The notification does not say that the importer itself must use them for the purpose. Evidently, when a National Sports Federation imports goods, it does not itself conduct all the championships and competitions directly. It will work through its constituent State and District bodies. There is nothing in the notification which even remotely suggests that such use is not acceptable. There is no finding in the impugned order that they have not been used for the purpose, but there is only a finding that they were not used by the appellant itself. It would have been a different case if the appellant had sold the imported goods in the market or to individuals. The use of the arms and ammunition in such a case could have been doubted. To accept the Commissioner's reasoning one would have to read in the notification after the words 'use', the words 'by the importer' which cannot be permitted. Confiscation - HELD THAT:- There is no violation of the exemption Notification No. 146/94-Cus by the appellant. The finding that the imported goods were liable to confiscation needs to be set aside. Demand of duty and interest - HELD THAT:- The basis of the demand of duty is also that the appellant had violated the conditions of the Notification No. 146/94-Cus which have been found to be not correct. Consequently, the demand of duty and interest need to be set aside. Penalty under section 114A - HELD THAT:- Penalty under section 114A of the Customs Act can imposed if duty is not paid or short paid by reason of fraud, collusion or wilful misstatement. Since it has been found that the demand of duty is not sustainable, penalty under section 114A also needs to be set aside. Conclusion - There is no 'Actual User' condition in the notification, and the goods were used for the intended purpose, thus no violation occurred. The impugned order set aside - appeal allowed.

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• 2025 (1) TMI 231
  Redemption fine and penalty - compliance with the Legal Metrology (Packaged Commodities) Rules, 2011 - Applicability of Sections 111(d) and 112(a) of the Customs Act, 1962 - HELD THAT:- The appellant has not complied with the labelling requirements of the Legal metrology (Packaged Commodities) Rules, 2011. There was a failure on the part of the appellant in not producing the Registration Certificate from the Legal Metrology Department when the imported goods landed. Thus, appellant contravened the provisions of Foreign Trade Policy 2009--2014. This contravention automatically entails the confiscability of the goods under Section 111 (d) of the Customs Act, 1962 as it is an improper , hence the appellant is also liable for penal action under Section 112 (a) of the Act. The Ld. Appellate Authority has also observed that it was only a procedural delay on the part of the appellant as the Registration Certificate was able to be obtained and produced later on i.e., after the arrival of the goods. Having regard to the facts and circumstances of this case as the appellant had applied for registration but could not get the Registration Certificate in time, the ends of justice would meet if redemption fine imposed is further reduced to Rs.30,000/- and also penalty imposed under Section 112 (a) is reduced to Rs.5,000/-. Conclusion - It was only a procedural delay on the part of the appellant as the Registration Certificate was able to be obtained and produced later on i.e., after the arrival of the goods. The appeal is partly allowed.

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• Corporate Laws

• 2025 (1) TMI 230
  Jurisdiction of High Court to transfer the Company Petition to the National Company Law Tribunal (NCLT) for initiating the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC) 2016 - winding-up proceedings makes it appropriate or feasible to transfer the case to the NCLT or not - HELD THAT:- This Court passed the winding up order on 21.09.2015 and the Liquidator was appointed. Since, nothing substantial could be achieved towards liquidation of the available assets of debtor company, this Court on the suggestions of stake holders ordered a meeting of Department of State Excise, official Liquidator and Bank of India (lead bank for consortium of creditors). Eventually, the creditors arrived at consensus and this Court passed an order dated 02.08.2019 authorizing Excise and Taxation Department of the State to conduct sale proceedings on the assets of debtor company. In ACTION ISPAT AND POWER PVT. LTD. VERSUS SHYAM METALICS AND ENERGY LTD. [ 2020 (12) TMI 535 - SUPREME COURT ], the power of Company Court to transfer the matters before it dealing with winding up of the companies to NCLT under Section 434(1) (c) of Companies Act, 2013. This Court is having the jurisdiction to transfer Company Petition No.13 of 2014 to NCLT subject, however, to a condition that the winding up proceedings have not reached a stage where it would be irreversible, making it impossible to set the clock back - thus, partial sales of the assets of debtor company have already been made. Noticeably, the third party rights (auction purchaser) have come into being. There are pending issues with respect to confirmation of sales already effected. Conclusion - An irreversible situation has been created as partial sales of assets have been effected and a substantial amount has already been collected, therefore, it will not be in the interest of justice to exercise discretion in favour of the applicant-SBI. Application dismissed.

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• Insolvency & Bankruptcy

• 2025 (1) TMI 229
  Rejection of claim filed by the Appellant - whether the RP had committed any irregularity in rejecting the claim of the Appellant for being belated and for being claim of such nature that it required adjudication which was beyond the jurisdiction of the RP? - HELD THAT:- In the present case, it is noticed that after the Corporate Debtor was admitted into the rigours of CIRP on 13.12.2021. The Interim Resolution Professional had undisputedly made a Public Announcement on 17.12.2021 in compliance with Sections 13 and 15 of the IBC read with Regulation 6 of CIRP Regulations. The Public Announcement had set 27.12.2021 as the deadline for claim submissions. The Appellant never filed their claim within the time stipulated by the Public Announcement or within the extended timeline of 90 days as provided by the Regulation 12 of CIRP Regulations. The Appellant had filed their claim on 12.09.2023 which was much beyond the extended period of 90 days. From material on record, it is therefore abundantly clear that a lot of time elapsed since the date of issue of public announcement inviting claim and the actual filing of claim by the Appellant. Despite having filed their claim belatedly, the Appellant has put the blame on the RP for having dealt with the claims and rejected the same within 3 days - There is no material to either believe that the RP acted in a manner hurriedly pushing the plans for consideration of the CoC or having deliberately orchestrated to stall the claim of the Appellant. It is a well settled precept that there is a catena of judgements of the Hon ble Apex Court wherein it has been held that no surprise claims should be flung on the resolution applicant. The logic behind this precept is that all necessary details should find place in the Information Memorandum so that the potential resolution applicants are fully aware of the liabilities that they may have to provide for in their resolution plan towards satisfying whole or part of such liabilities and to also revive the corporate debtor. In the present case too, when the claims have been filed belatedly after 548 days and that too the claims arise from damages and breach of contract which according to the Appellant is admittedly contingent, the RP s action to reject the claim by way of a reasoned reply to the Appellant cannot be put to fault - there are no justifiable reason to doubt the bonafide of the RP in not admitting the claim of the Appellant. The Adjudicating Authority had not committed any error in the given facts and circumstances in not acceding to the request of the Appellant for admission of their claims. Conclusion - The RP does not possess adjudicatory powers and must adhere to statutory timelines for claim submission to ensure a timely resolution process. Appeal dismissed.

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• 2025 (1) TMI 228
  Direction for fresh valuation of intangible assets after the approval of a Resolution Plan - seeking direction to permit the revised Resolution Plan to be reconsidered which has been rightly rejected by the Adjudicating Authority noticing the submissions of the Resolution Professional that it is open for the Appellant to submit Resolution Plan in pursuance of fresh Form G - HELD THAT:- There is no dispute between the parties that initially Resolution Plan filed by the Appellant was approved on 30.12.2019 and Resolution Professional has also filed IA No.102 of 2020 for approval of the Resolution Plan. Unsecured financial creditor filed an IA No.1434 of 2020 seeking direction for valuation of intangible assets of the corporate debtor. It was also prayed that the Resolution Plan be sent back to the CoC for reconsideration. IA No.1434 of 2020 was allowed by the Adjudicating Authority on 04.08.2023 copy of which has been filed as Annexure A-6. Adjudicating Authority issued direction for valuation of intangible assets. It is relevant to notice that the order dated 11.03.2024 was not challenged by any stakeholders including the Appellant. The order dated 11.03.2024 dismissing IA No.102 of 2020 for approval of the Resolution Plan as infructuous and the Adjudicating Authority having directed for issuance of Form G and the said order having not been challenged, the order dated 11.03.2024 has become final and it is not open for the Appellant to now claim any right on the basis of its earlier Resolution Plan. The order impugned noticing the statement of Resolution Professional that Appellant can very well participate in the process has rightly observed that the grievance of the Appellant stands addressed and the IA has become meaningless. As noted above, the orders passed by the Adjudicating Authority dated 04.08.2023 directing for revaluation and placing the plan of the Appellant for voting was never challenged. After the order dated 04.08.2023, Appellant has submitted its revised Resolution Plan which was considered and was not approved by the CoC which is clear from 22nd CoC meeting. Direction to issue fresh Form G was in consequence of non-approval of the Resolution Plan of the Appellant - Appellant was free to participate in the fresh process initiated by issuance of Form G on 11.04.2024. Conclusion - i) The Intangible Assets of the Corporate Debtor shall be valued and categorized separately. ii) The CoC's commercial wisdom in rejecting the revised offer was upheld as a legitimate exercise of its discretion. Appeal dismissed.

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• 2025 (1) TMI 227
  Invocation of personal guarantee - Section 95 application was filed on behalf of Respondent No.1 Bank by a person having valid authority or not. Invocation of personal guarantee - HELD THAT:- It is an admitted fact that the Corporate Debtor had not performed its obligation of debt repayment and its account was declared NPA and was later admitted into CIRP. It is a settled position in law that under Section 128 of the Indian Contract Act, 1872 the liability of the surety is coextensive with that of principal debtor unless it is otherwise provided by the contract. The same coextensive liability applies in the case of the personal guarantors. Once the principal borrower fails to discharge the debt, the liability of the personal guarantor gets triggered on the invocation of guarantee. In the present factual matrix, in terms of the PGA, the Appellant as personal guarantor was mandatorily obliged to honour its guarantee keeping in view that PGA provided for an unconditional, irrevocable and continuing guarantee to the COR Security Trustee/COR Lenders in respect of the COR Secured Obligations and credit facilities secured by the principal borrower - It is clear from the reading of the terms of the PGA at Clause 26 that if the Borrower failed to perform its obligations under the COR Finance Documents, it was incumbent on the Personal Guarantor to forthwith pay on demand to the COR Security Trustee/COR Lenders the whole of such outstanding sum. Hence there is no merit in the plea taken by the Appellant that since no request was made by them as guarantor for release of loan in favour of the borrower, the personal guarantee could not have been invoked. The invocation of the personal guarantee and signing of the invocation in the capacity of COR Lenders Agent by Respondent No. 1 Bank has been questioned by the Appellant. It is dissuaded from agreeing with the Appellant since the Respondent No. 1 Bank had signed the CORLA wherein it had been clearly designated as COR Lenders' Agent. Moreover, though the lenders had appointed SBI Cap as their Security Trustee, in the Security Trustee Agreement dated 21.09.2015, Clause 8.12 stated that any duty or the obligation of the Security Trustee may be performed by the COR Lenders and any such performance shall not be construed as a revocation of the trusts or agency created thereby. Section 95 of IBC clearly provides that a Section 95 application can be filed by a creditor in his individual capacity or jointly with other creditors or through a RP. It nowhere lays down any prescription that if the credit facility has been extended by more than one financial creditor, the Section 95 application is required to be filed collectively. Hence, there are no irregularity in the invocation of the personal guarantee by the Respondent No. 1 Bank on these counts either. Section 95 application had been filed without any authority or not - HELD THAT:- The Appellant has claimed that the signing power given to any particular officer is not the decision-making power given to any particular officer of State Bank of India. Decisions have to be taken at the board level for initiating any legal proceedings and only thereafter authority is given to any particular officer to sign pleadings. No such authority had been delegated by the Executive Committee of the Central Board to initiate legal proceedings in the present case thereby rendering the Section 95 application not maintainable. The Respondent No.1 has repelled this argument by placing reliance upon a Gazette notification dated 27.03.1987 issued pursuant to Regulation 76 of the State Bank of India General Regulations, 1955 read with Section 50 of the State Bank of India Act, 1955 to contend that the signatory of the application, Shri Nitin Chauhan was duly authorised to file the Section 95 application - the contention of the Appellant that the Section 95 petition was not signed by a validly authorised person is rejected. Conclusion - The Respondent No.1 Bank was entitled to invoke the personal guarantee and that the Section 95 application was validly filed by an authorized person. Appeal dismissed.

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• Service Tax

• 2025 (1) TMI 226
  Duplication of a part of the demand already confirmed - respondent had failed to make mandatory pre-deposit - Revenue not heard during the appeal process before the Commissioner of Service Tax (Appeals II) - violation of principles of natural justice - HELD THAT:- As per Section 124 (2) of the Sabkha Vishwas Legacy Disputes Resolution Scheme, 2019, any amount paid under pre-deposit at any stage of Appellate proceedings under the Indirect tax enactment or as deposit during enquiry, investigation or audit, shall be deducted when issuing the statement indicating the amount payable by the declarant. It stands confirmed that a sum of Rs. 19,15,491/- was paid in excess of amount demanded from the respondent vide Order in Original No. 48/2016 -2017 ST-II dated 14.10.2016, in respect of the second mentioned show cause notice covering the period between April 2008 and March 2010 - The amount that was paid prior to passing of the Order-in-Original No. 48/2016 for a sum of Rs. 99,94,773/- was eligible for being set off against the tax liability of the respondent under the Scheme for the period under dispute covered by the 2nd demand in Show Cause Notice as confirmed by the Order in Original No. 48/2016 dated 14.10.2016 as there was an excess amount of Rs. 15,18,561/- (Rs. 99,94,773/- 84,76,212/-) paid by the petitioner against demand comprised in Order-in-Original No. 48/2016 dated 14.10.2016. Though, the aforesaid sum of Rs. 15,18,561/- cannot be refunded back, it can be adjusted towards the amount payable under the scheme for the demand confirmed vide Order-in-Original No. 48/2016 dated 14.10.2016 for the period mentioned in the second mentioned show cause notice which is the subject matter of the present dispute - The balance amount of Rs. 15,80,561/- (Rs. 99,94,773 Rs.84,76,212) is to be allowed for adjustment towards the amount determined in SVLDRS III dated 06.12.2019. The balance amount of Rs. 15,80,561/- (Rs. 99,94,773 Rs.84,76,212) is to be allowed for adjustment towards the amount determined in SVLDRS III dated 06.12.2019. Conclusion - The duplication of tax demands should be corrected and that excess pre-deposits can be adjusted under the SVLDRS. The amount of Rs. 15,80,561/- (Rs. 99,94,773 - Rs.84,76,212) has to be adjusted towards liability of the respondent under SVLDRS Scheme 2019. Thus, out of the aforesaid amount of Rs. 15,80,561/- (Rs. 99,94,773 Rs.84,76,212/-), a sum of Rs. 8,75,075/- ought to have been adjusted. The balance of Rs. 7,05,546/- [Rs. 15,80,561/- (-) Rs. 8,75,015/-] is however, not refundable back to the respondent in terms of proviso to Section 124 (2) of the Act. Appeal dismissed.

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• 2025 (1) TMI 225
  Recovery of service tax with interest and penalty - scope and limits of adjudicating authority's powers during de-novo proceedings - HELD THAT:- The scope of the impugned order therefore cannot go beyond the grievance of the Appellant. Any appeal is filed only against that portion against which the aggrieved party has any grievance and hence, scope of any Appeal cannot go beyond the Grounds of Appeal urged. Hence, by not filing any Appeal, department cannot feel aggrieved and thereby encash the remand order by misinterpreting such order to its benefit. Clearly, the same amounts to abuse and misuse of the process of law and hence, in our view, the Original Authority has grossly erred in taking advantage of the remand order by misinterpreting and thereby travelling beyond the scope of the second Appeal. In that view of the matter, to the extent of the relief granted in the Original Authority order dated 22.12.2008, the impugned order certainly calls for/deserves interference and hence, to that extent, the impugned Order stands set aside forth-with. Conclusion - The scope of the impugned order therefore cannot go beyond the grievance of the Appellant. It is deemed appropriate to set aside the impugned order for non-cooperation from the assessee - appeal disposed off.

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• 2025 (1) TMI 224
  Refund of service tax paid - whether the Appellant being the developer / co-developer in Special Economic Zone entitled to refund of service tax paid by them in relation to their authorised operations? - HELD THAT:- In case of INOX INDIA P LTD VERSUS C.C.E. -KUTCH (GANDHIDHAM) [ 2024 (3) TMI 922 - CESTAT AHMEDABAD ], this Bench has considered the issue and decided ' We find that a substantive benefit of Service Tax exemption has been provided under the above Section 26 of the Special Economic Zone Act. Once the legislature by way of enactment has provided certain exemption we feel that any notification issued under any other enactment will not take away the right of the exemption from payment of the Service Tax to the appellant for the activity while falls under category of the authorized operations within a Special Economic Zone.' Similarly, in case of ANJANI EXCAVATION OPERATION VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX CGST CENTRAL EXCISE VADODARA II [ 2024 (11) TMI 405 - CESTAT AHMEDABAD ], this Bench has held the benefit of exemption available to the service provider by resorting to the provisions of Special Economic Zones Act, 2005. The benefit of refund of service tax paid by the appellant cannot be snatched away on grounds of procedural and hyper technical infarctions pointed out by the revenue in the impugned orders. It is no matter of dispute that the appellant including its erstwhile entity were duly approved and authorised as co-developer of Special Economic Zone in Mundra, Gujarat - there are no merit in the arguments and averments made by the appellate authority in impugned order to deny the benefits granted by the provisions of the Special Economic Zones Act. Once the tax has been charged, collected and paid by the respective service provider, the recipient cannot be burdened to show and explain the reasons for levy carried out by the service provider. Burden of recipient is limited to prove payment of such amount as service tax to the service provider and which has not been challenged in the present appeals. Thus, there are no merit in the justifications given in the impugned orders to deny the refund claim and we find that the appellant succeeds in explaining their eligibility to refund in respect of service tax paid with respect to transportation of passengers services. Conclusion - The appellant is entitled to the refund of service tax paid for services used in authorized operations within the SEZ. The appellant is entitled to refunds involved in all the appeals - Appeal allowed.

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• 2025 (1) TMI 223
  Denial of exemption from payment of Service tax under Sr. No. 19 of Mega Exemption Notification No. 25/2012-ST dated 20.06.2012 and amended from time to time - extended period of limitation - HELD THAT:- The identical issue has been dealt with by this Tribunal in case of MATASHREE HOSPITALITY SERVICES VERSUS COMMISSIONER OF CENTRAL EXCISE ST, VADODARA-II [ 2024 (8) TMI 1507 - CESTAT AHMEDABAD] wherein it is observed that ' the appellant is clearly entitled for the exemption under Notification No. 25/2012-ST. Accordingly, the demand in the present case is not sustainable.' Conclusion - The exemption of Notification No. 25/2012-ST is clearly admissible to the appellant as the canteen services were provided within the factory premises covered by the Factories Act, 1948. The impugned orders set aside - appeal allowed.

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• 2025 (1) TMI 222
  Levy of service tax - reimbursement received by the appellant is a consideration towards provision of taxable service - Admissibility of CENVAT credit availed by the Appellant on the basis of the debit notes - admissibility of CENVAT Credit on the invoices issued for out of pocket expenses - Extended period of limitation - interest on CENVAT credit availed but not utilized. Whether the reimbursement of Rs. 2,79,58,760/- received by the appellant is a consideration towards provision of taxable service? - HELD THAT:- There is no service provided and it is shown only for the accounting purpose between two Divisions of the Appellant. Therefore, service tax cannot be demanded on the ground that they are expenses reimbursed by the other companies. Whether the CENVAT credit of Rs. 63,71,672/-, availed by the Appellant on the basis of the debit notes is admissible? - HELD THAT:- The services were received by the appellant and the payment for the services are also made to the service providers. We find that the debit notes contain the essential particulars as required under Rule 9 (2) of the Cenvat Credit Rules, 2004. Further, these debit notes are accounted in the books of accounts of the appellant. Therefore, the appellant has fulfilled the requirements under Rule 4A of Service Tax Rules, 1994 and Rule 4 (7) and 9 (2) of CCR, 2004. Therefore, the denial of Cenvat credit on the debit notes is unsustainable. Whether CENVAT credit of Rs. 74,160/- availed on the invoices issued for out of pocket expenses is admissible? - HELD THAT:- The invoice produced by the Appellant clearly shows that it is for the purpose of completion of various activities. Facts being so, there is no justification in denying the CENVAT credit against the above invoices once it is paid with applicable service tax. Extended period of Limitation - HELD THAT:- The issue involved in the present appeal is in the nature of interpretation and considering the fact that Appellant has been paying service tax and filing ST-3 returns in time and there is no allegation that the Appellant had made a deliberate attempt to evade payment of tax, following the decisions in RECKITT COLMAN OF INDIA LTD. VERSUS COLLECTOR OF CENTRAL EXCISE [ 1996 (10) TMI 100 - SUPREME COURT] , the extended period for demand of service tax is not sustainable. Whether interest is payable on CENVAT credit availed but not utilized? - HELD THAT:- The demand is made without considering the extant Rule 14 of the Cenvat Credit Rules, 2004. Moreover, the issue is settled by the judgment of the Hon ble Supreme Court in the matter of CCE Vs. Bombay Dyeing and Manufacturing Company Ltd [ 2007 (8) TMI 2 - SUPREME COURT] wherein it is held that where CENVAT credit is reversed before utilization thereof, it would be tantamount to credit not having been availed. The said decision has also been accepted by CBEC as per Circular No. 858/16/2007-CX dated 08.11.2007. However, in the facts and circumstances of the case, since it is found that the appellants are eligible to avail Cenvat credit on the debit notes and the service received from M/s Deloitte, the demand of interest on the CENVAT credit availed but not utilized by the Appellant does not arise. Conclusion - Service tax cannot be demanded on the reimbursement received by the appellant. Denial of Cenvat credit on the debit notes is unsustainable. There is no justification in denying the CENVAT credit against the above invoices once it is paid with applicable service tax. Extended period for demand of service tax is not sustainable. In the facts and circumstances of the case, since it is found that the appellants are eligible to avail Cenvat credit on the debit notes and the service received from M/s Deloitte, the demand of interest on the CENVAT credit availed but not utilized by the Appellant does not arise. Appeal allowed.

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• 2025 (1) TMI 221
  CENVAT Credit - input service was used by multiple coating centers located in different places - Department had alleged that the respondent was not entitled to avail cenvat credit at Pune unit inasmuch as the input service in question, was used by all coating centers located at different places - period of dispute involved in the present appeal is from April 2014 to January 2015 - HELD THAT:- For the earlier period i.e., from October 2009 to March 2014, the demands confirmed by the department against the respondent itself, on identical set of facts, was appealed against by the respondent before this Tribunal [ 2017 (5) TMI 889 - CESTAT MUMBAI ], the Tribunal has set aside the demand and allowed the appeal in favour of the respondent. It is found that appeal filed by Revenue against the said order dated 29.03.2017 of the Tribunal was also dismissed by the Hon ble Bombay High Court [ 2018 (12) TMI 1300 - BOMBAY HIGH COURT ]. Conclusion - On plain reading of Rule 7 as existing both pre and post amendment 2012 covering period involved in these proceedings, the respondent - assessee was entitled to utilize the CENVAT credit available at its Pune unit. There are no merits in the appeal filed by Revenue and accordingly, the same is dismissed.

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• Central Excise

• 2025 (1) TMI 220
  CENVAT credit on capital goods initially brought into Plant No.1 and subsequently moved to Plant No.2 and Plant No.3 - HELD THAT:- It is noted that the contention of Revenue is that capital goods were brought into Plant No.1 which is also referred to as Unit No.1 and after availing cenvat credit, they were utilized into Plant No.2 and 3 which were also referred to as Unit No.2 and 3 and during the relevant time those units were not part of the Central Excise registered premises and, therefore, there was proposal for denying cenvat credit which was confirmed by the original authority. It is noted that through the communication dated 24.06.2016, Principal Commissioner of Central Excise having jurisdiction over all the three plants has allowed them to be treated as part of the existing Central Excise registration No. AABCM9380KXM001. Thus, different units stated in the present proceedings are part of the same manufacturing unit and, therefore, there is no case of capital goods being removed out of the manufacturing unit after availing cenvat credit. Conclusion - Different units stated in the present proceedings are part of the same manufacturing unit and, therefore, there is no case of capital goods being removed out of the manufacturing unit after availing CENVAT credit. Appeal allowed.

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• 2025 (1) TMI 219
  Classification of electrical machinery parts and accessories - to be classified under Chapter 86 or under Chapter 84? - extended period of limitation - penalty. Classification of electrical machinery parts and accessories - HELD THAT:- As these goods were manufactured as per the designs submitted by the Indian Railway, they have to be specifically treated as part of Diesel Locomotive and so more appropriately classifiable under Chapter 86 of Central Excise Tariff Act, 1985. Further, the Tribunal in the case of M/S. FAIVELEY TRANSPORT RAIL TECHNOLOGIES INDIA PVT. LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, SALEM [ 2024 (8) TMI 1143 - CESTAT CHENNAI ] has held on the classification of goods supplied to Indian Railways that the pantographs and its parts are exclusively used in railway or tramway locomotives. Further, in the case of PREMIER POLYFILM LIMITED VERSUS COMMISSIONER, CGST, GHAZIABAD [ 2024 (7) TMI 6 - CESTAT ALLAHABAD ] the Tribunal Allahabad has decided the issue in favour of the Assessee that the goods will be classified under the specific tariff entry of the goods cleared or under Chapter 86 in view of the Hon ble Supreme Court s decision in the case of WESTINGHOUSE SAXBY FARMER LTD. VERSUS COMMR. OF CENTRAL EXCISE CALCUTTA [ 2021 (3) TMI 291 - SUPREME COURT ]. Thus, parts of railway diesel locomotive are more appropriately classifiable under CETH 86079100.Hence the issue regarding classification is decided in favour of the Appellant. Extended period of limitation - Penalties - HELD THAT:- In the absence of any finding as to intent of suppression by the Appellant in the impugned order, the allegation of wilful misclassification and intention to evade duty by the appellant is not at all tenable as misclassification could not be equated with misdeclaration and it is a settled law that once the goods are correctly described, the bona fide adoption of classification by the importer cannot be equated with misdeclaration as the manufacturers are not expected to be fully conversant with the schedule to the Central Excise Tariff Act, 1985. So, the issue of limitation is also decided in favour of the appellant and consequently, penalties imposed are set aside. Conclusion - Parts of railway diesel locomotive are more appropriately classifiable under CETH 86079100. In the absence of any finding as to intent of suppression by the Appellant in the impugned order, the allegation of wilful misclassification and intention to evade duty by the appellant is not at all tenable. Appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (1) TMI 218
  Whether the benefit of exemption under the provisions of the Tamil Nadu Value Added Tax (TNVAT) Act, 2006 would ennure for exemption under Section 8(2) of the Central Sales Tax (CST) Act, 1956? - HELD THAT:- Identical issue arose for consideration in NATESAN VERSUS THE STATE TAX OFFICER, ATTUR [ 2025 (1) TMI 135 - MADRAS HIGH COURT] where it was held that 'the petitioner is entitled to the benefit of exemption under Notification No.II(1)/CTR/30(a-2)/2007 (TNGG Extraordinary/March 23, 2007 [G.O.Ms.No.79, Commercial Taxes and Registration (B2) Department] dated 23.03.2007 with consequential relief.' Conclusion - The petitioner is entitled to the exemption under the TNVAT Act for interstate sales under the CST Act, as no notification to the contrary was issued under Section 8(5) of the CST Act. Petition allowed.

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• 2025 (1) TMI 217
  Demand of central sales tax on movement of goods from the manufacturing unit of the appellant situated in the State of Rajasthan to its depots in the State of Bihar and the State of Jharkhand - inter-state supply of goods or inter-state stock transfers - HELD THAT:- A perusal of the order dated 04.10.2017 passed by the Rajasthan Tax Board shows that it has reproduced the observations of the Rajasthan Tax Board in Appeal No s. 1229-1233 decided on 24.11.2014. It is the order passed in these five appeals that were assailed by M/S CARLSBERG INDIA PVT. LTD., M/S UNITED BREWERIES LTD. AND M/S MOUNT SHIVALIK INDUSTRIES LTD. VERSUS THE STATE OF RAJASTHAN, THE COMMISSIONER COMMERCIAL TAXES, JAIPUR, THE ASSISTANT COMMISSIONER COMMERCIAL TAX DEPARTMENT, JAIPUR, THE STATE OF BIHAR AND THE STATE OF JHARKHAND [ 2024 (10) TMI 1124 - CESTAT NEW DELHI] It was held in the case that ' The movement of goods cannot also be considered incidental to the Master Agreement. Reliance placed by the Rajasthan Tax Board and the learned senior counsel for the State of Rajasthan on clause 2 of the Master Agreement to justify that the movement of goods occurred incidental to the Master Agreement, is not correct.' Conclusion - The transactions were stock transfers, not sales. Appeal allowed.

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• Indian Laws

• 2025 (1) TMI 216
  Dishonour of Cheque - acquittal of offence under Section 138 of the Negotiable Instruments Act, 1881 - rebuttal of presumptions raised u/s 139 and 118 of the NI Act - HELD THAT:- It is trite law that a Court while considering the challenge to an order of acquittal ought to only interfere if the Court finds that the appreciation of evidence is perverse. The present case, however, relates to acquittal of an accused in a complaint under Section 138 of the NI Act. The restriction on the power of Appellate Court in regard to other offence does not apply with same vigor in the offence under NI Act which entails presumption against the accused. The Hon ble Apex Court in the case of ROHITBHAI JIVANLAL PATEL VERSUS STATE OF GUJARAT ANR. [ 2019 (3) TMI 769 - SUPREME COURT] had observed ' However, such restrictions need to be visualised in the context of the particular matter before the appellate court and the nature of inquiry therein. The same rule with same rigour cannot be applied in a matter relating to the offence under Section 138 of the NI Act, particularly where a presumption is drawn that the holder has received the cheque for the discharge, wholly or in part, of any debt or liability. Of course, the accused is entitled to bring on record the relevant material to rebut such presumption and to show that preponderance of probabilities are in favour of his defence but while examining if the accused has brought about a probable defence so as to rebut the presumption, the appellate court is certainly entitled to examine the evidence on record in order to find if preponderance indeed leans in favour of the accused. '. It is also well settled that once the execution of the cheque is admitted, the presumption under Section 118 of the NI Act that the cheque in question was drawn for consideration and the presumption under Section 139 of the NI Act that the holder of the cheque/ respondent received the cheque in discharge of a legally enforceable debt or liability are raised against the accused. On a perusal of the record, it is seen that right from the time of framing of notice, the statement of the respondent under Section 313 of the CrPC, and during the course of the trial, the respondent denied taking any loan from the appellant. The respondent, however, did not dispute the issuance of the cheque in question, or his signatures on the cheque. He consistently maintained that it was in fact the respondent who had advanced the loan to the appellant - It is pertinent to note that the presumptions under Section 118 and 139 of the NI Act are not absolute, and may be controverted by the accused. From a perusal of the record, it is apparent that the respondent was acquitted of the offence under Section 138 of the NI Act chiefly on the premise that on a juxtaposition of the financial status of both the parties, the respondent appeared to be more financially sound that the appellant. In the present case, except for the averments made by the respondent, no material is led to demonstrate that the appellant did not possess the financial wherewithal to advance the said loan in question. Even at the stage of cross-examination, no question is put to the appellant to indicate that she did not possess the financial means to advance the loan in question. For this reason, in the opinion of this Court, the burden never shifted upon the appellant to demonstrate that she possessed the means to advance the said loan. Conclusion - The respondent failed to rebut the presumptions raised against him under Sections 139 and 118 of the NI Act. The impugned judgment dated 24.07.2019, acquitting the respondent of the offence under Section 138 of the NI Act is accordingly set aside - List on 16.01.2025 for further directions.

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