TMI Tax Updates - e-Newsletter
February 21, 2025

Case Laws in this Newsletter:

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

Articles

1. GST Applicability on Cloud Kitchen Services

   By: Tushar Malik

2. All about GST on RENTING of Immovable Property

   By: K Balasubramanian

3. Strike Off LLP vs. Dissolution of LLP: Understanding the Difference

   By: Ishita Ramani

4. AUTHENTICATION OF DOCUMENT – RESULT MUST BE COMPLETE IN ALL RESPECT MERELY GIVING DIN AND DATE IS NOT ENOUGH.WITH DIN RESULT GIVEN ARE TOTALLY VAGUE IS NOT SATISFACTORY BECAUSE ANY SPECIFIC INFORMATION LIKE AUTHORITY, DATE, NATURE OF DOCUMENT, PAN OR NAME OF ASSESSEE , DATE AND ASSESSMENT YEAR IS NOT SHOWN IN THE RESULT.

   By: DEVKUMAR KOTHARI and CA UMA KOTHARI

5. Single-Use Plastic (SUP) Pollution in India and the Responsibility of Citizens to stop using SUP.

   By: YAGAY andSUN

6. CROSS EXAMINATION – NOT ABSOLUTE RIGHT IN CUSTOMS CASES?

   By: DR.MARIAPPAN GOVINDARAJAN

7. Statutory remedy of appeal should be availed before invoking writ jurisdiction

   By: Bimal jain

8. What India Exports to the World?

   By: YAGAY andSUN

9. The assessment of Common Effluent Treatment Plants (CETPs) in industrial clusters comprising medium and small-scale industries in India.

   By: YAGAY andSUN

10. Mandatory Requirement to have Ambulance and Fire Tender for quick response to any occurrence of Accident in Chemical Industries. Guidelines as issued by State & Central Governmental Agencies and Applicable Legal & Statutory Provisions.

   By: YAGAY andSUN

News

1. Uttarakhand govt presents Rs 1 lakh cr budget with focus on infra, innovation

2. Gujarat govt presents Rs 3.7 lakh crore budget; cuts stamp duty on mortgage deeds, tax on EVs

3. UP Governor hails budget as inclusive, development-oriented

4. UP budget lacks emphasis on public welfare, basic needs of common man: Mayawati

5. Gujarat govt presents Rs 3.70 lakh crore budget, no new tax proposed

6. Gujarat govt presents Rs 3.70 lakh crore budget for FY26; no new tax proposed

7. UP has overcome 'BIMARU' tag, now a leader in medical services: FM while presenting Budget

8. Akhilesh calls UP budget 'second last' of Yogi govt, says no link with BJP manifesto

9. UP Budget allocates over Rs 400 cr for tourism: Rs 150 cr for Ayodhya, Rs 125 cr for Mathura

10. Budget 2025 in alignment with Sanatan culture: Yogi Adityanath

11. Budget would be in public interest: UP Finance minister

12. Senate GOP budget bill back on track hours after Trump threw it into turmoil

13. South Africa abruptly cancels budget speech over dispute in governing coalition

14. Why people from Bengal working as migrant labourers in other states, asks BJP MLA Ashok Lahiri

15. Skoda Volkswagen can't play victim, will have to fall in line on tax demand: Customs to HC

16. Skoda Volkswagen can't play victim, will have to fall in line on tax demand: Customs to HC

17. Prime Minister Internship scheme (PMIS) once again open for applications with the launch of Round 2 of Pilot Phase

18. 6th Edition of the Delhi International Leather Expo begins at IICC,Yashobhoomi

19. A conclave on Restructuring of Real Estate Projects organised at IICA

20. Manmohan Singh was successful PM and father of economic reforms, says Gujarat CM

21. High frequency indicators point at sequential pickup in economic activity: RBI bulletin

Highlights / Catch Notes

GST

• Technical Error in Auto-Populated Shipping Address on E-Way Bill Cannot Justify GST Seizure or Penalty

  Case-Laws - HC : HC held that a technical error in shipping address on an auto-populated e-way bill cannot justify seizure or penalty under GST law. The e-way bill, valid from 14.12.2022 to 16.12.2022, was not cancelled within its validity period, indicating the transaction's legitimacy. The primary purpose of e-way bills is to track goods movement and ensure proper tax assessment. Since the petitioner's e-way bill remained active throughout its validity period, the authenticity of the transaction cannot be questioned. The court emphasized that mere technical discrepancies in shipping details do not warrant punitive action when the fundamental purpose of goods movement tracking is fulfilled. Petition allowed, proceedings against petitioner invalidated.
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• Appellate Authority Under GST Can Condone Delay Beyond One Month Under Section 5 Of Limitation Act 1963

  Case-Laws - HC : HC held that Appellate Authority under West Bengal GST Act 2017 has power to condone delay beyond one month of prescribed appeal period. While appeal was dismissed for being time-barred, petitioner could invoke Section 5 of Limitation Act 1963 for delay condonation. Following precedent in S.K. Chakraborty matter, Court found Appellate Authority should have considered explanation provided in delay condonation application. Given sufficient cause shown by petitioner and to avoid futile remand proceedings, HC accepted the delay explanation and disposed of petition, allowing appeal to proceed on merits.
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• Assessment Order on Security Wages Treatment Set Aside Due to Lack of Specific Notice and Natural Justice Violation

  Case-Laws - HC : HC partially set aside assessment order concerning disputed "Security Wages" treatment, finding procedural deficiency as this issue was not specifically mentioned in show cause notice which only referenced "Administration Expenses." Court determined petitioner was denied natural justice by not receiving opportunity for personal hearing on security wages matter. Order remanded to respondent for fresh consideration specifically regarding security wages component. While granting liberty to file appeal on remaining assessment issues, HC cautioned against piecemeal appeals. Original assessment dated 30.08.2024 remains valid on all other aspects pending potential comprehensive appeal by petitioner.
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• Government Entity Must Pay Differential GST Amount After Rate Increase from 12% to 18% Following Apex Structure Precedent

  Case-Laws - HC : The HC addressed the dispute regarding differential GST liability payment. Following precedent established in M/s Apex Structure case, the court affirmed that GST rate enhancement from 12% to 18% was lawfully applicable and payable by the government entity (respondent). The ruling upheld the state GST department's position on increased tax rate applicability. The decision reinforces the binding nature of revised GST rates on government entities and their obligation to remit the differential amount. The court's determination aligns with established GST jurisprudence regarding rate revisions and statutory compliance requirements for public sector undertakings. Petition disposed of with clear directive on GST differential payment obligation.
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Income Tax

• CBDT Extends Form 56F Filing Deadline Under Section 10AA(8) For SEZ Profit Deductions To March 31, 2025

  Circulars : CBDT extended the deadline for filing Form 56F (report of accountant) under section 10AA(8) read with section 10A(5) of Income Tax Act for AY 2024-25 to March 31, 2025. The extension was granted under section 119(2)(b) to address difficulties faced by taxpayers in meeting the original deadline specified under section 44AB. This administrative relief applies specifically to reports required from taxpayers claiming deductions for profits and gains from Special Economic Zone (SEZ) units, providing additional time for compliance with statutory requirements while maintaining regulatory oversight.
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• Tax Officer's Reassessment Under Section 148A Invalid Due To Non-Disclosure Of Physical Verification Findings To Assessee

  Case-Laws - HC : HC invalidated reassessment proceedings initiated under s148A(b) based on alleged bogus capital expenses identified through CRIU/VRU information. Revenue's physical verification and subsequent order under s148A(d) violated natural justice principles as assessee was not given opportunity to respond to allegations regarding non-existent entity. Court emphasized that post original assessment closure, AO becomes functus officio and jurisdiction for reassessment requires proper disclosure of incriminating material to assessee. Physical verification findings about entity's non-existence at Jasola address were not communicated via show cause notice, making the reassessment proceedings procedurally defective. Order set aside in assessee's favor.
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• Director's Family Health Issues and Company Challenges Lead to Acceptance of Delayed Tax Return Under Section 139(5)

  Case-Laws - HC : HC granted relief to petitioner seeking condonation of delay in filing revised income tax return under s.139(5). Court considered multiple factors including director's personal circumstances (family issues, mother's illness requiring spine surgeries), company's operational challenges (ERP implementation, high staff attrition), and management's inability to detect incorrect figures until s.142(1) notice. Finding these human factors and fortuitous circumstances compelling, HC quashed original order dated 21/09/2023. Respondents directed to accept returns with applicable penalties, fees and interest within two weeks of order copy availability. Court emphasized necessity of considering human elements when evaluating statutory time limit compliance under IT Act.
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• TDS Credit Denied Under Section 198 When NIL Return Filed Despite TDS Certificates Showing Income Received

  Case-Laws - HC : HC upheld denial of TDS credit to appellant who filed NIL return while claiming TDS benefits. The income corresponding to claimed TDS was reported by ISPL, not the appellant. Court determined that TDS credits must align with reported income under Section 198, which treats tax deducted as income received. Filing NIL return while seeking TDS benefit creates incongruence, violating Sections 198 and 199 of Income Tax Act. Since appellant failed to report income related to TDS certificates and provided no evidence regarding ISPL's tax treatment of relevant amounts, TDS credit was rightfully denied. Revenue's position sustained.
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• Sellers Not Required to Verify Form 27C Declarations Under Section 206C for Tax Collection at Source

  Case-Laws - HC : HC dismissed Revenue's appeal regarding TCS collection responsibility under s.206C. Court held that verification requirements in Form 27C apply solely to purchasers as declarants, not sellers. Revenue's contention that sellers must verify declarations was found contrary to s.206C(1A) read with Rule 37C. The Court emphasized that neither the Act nor Rules impose verification duties on sellers. Following precedent from A.A. Estate, HC determined no substantial question of law existed warranting admission under s.260-A, as Revenue's interpretation contradicted clear statutory provisions regarding TCS collection and declaration procedures.
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• Tax Appeal Delay Due to COVID-19 Condoned Under Section 5, CIT(A) Must Decide Case on Merits

  Case-Laws - HC : HC held that CIT(A)'s power under Sec 251(2) requires deciding appeals on merits after providing reasonable opportunity. Delay in filing appeal was partially attributed to COVID-19 pandemic, warranting condonation under Limitation Act Sec 5. Court found no mala fide intent in delayed filing, noting that litigants generally don't benefit from belated appeals. Given the significance of tax liability and CIT(A)'s coterminous powers with assessing officer, appeal was restored for merit-based determination, conditional upon appellant's cooperation and no adjournment requests. Tribunal's order and CIT(A)'s order dated 16.10.2019 were set aside.
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• Software Sales to End-Users Not Royalty Under Section 9(1)(vi): Payments for Copyrighted Articles Distinct from Copyright Transfer

  Case-Laws - HC : HC upheld ITAT's determination that payments to three non-resident companies did not constitute 'royalty' under applicable DTAA. Court rejected Revenue's reliance on overruled Samsung Electronics precedent and aligned with Engineering Analysis SC ruling. HC clarified that sale of copyrighted software to end-users does not amount to transfer of copyright owner's exclusive rights, distinguishing between sale of copyrighted articles and transfer of copyright itself. Interpretation of Section 9(1)(vi) of Income Tax Act must be harmonized with DTAA provisions. The matter was resolved in favor of assessee, confirming no TDS liability under Section 195 for the disputed payments.
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• Taxpayer's Cost-Sharing Agreement with Insurance Company for Commission Income Valid Under Section 37

  Case-Laws - AT : ITAT ruled in favor of taxpayer regarding expenses claimed under contractual arrangement with Max Life Insurance. The disputed amount, though related to service tax, was determined to be a legitimate business expense under Section 37. The payment was made to secure commission income from insurance auxiliary services, not as service tax liability which belonged to Max Life under reverse charge mechanism. The tribunal rejected AO's contention, noting that Service Tax Rules 1994 Section 2(1)(d) placed liability on Max Life. The contractual arrangement to share costs was deemed legal, not prohibited by Section 37's Explanation, and qualified as allowable business expenditure. Appeal allowed.
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• Metro Tunnel Contractor Denied Section 80IA Benefits but Wins Deduction for Technical Service Fees Under Section 37

  Case-Laws - AT : ITAT dismissed appellant's claim for deduction under section 80IA regarding metro tunnel construction contract. The tribunal determined appellant was merely a contractor and LMRCL, being a special purpose vehicle, did not qualify as government/statutory authority required under section 80IA(4). However, ITAT upheld CIT(A)'s decision allowing deduction of legal and professional fees paid to Gulemark TPL JV under section 37. The technical service fees were validated through bank payment records, visa documentation of visiting employees, accommodation agreements, and travel expenses. The expenditure was deemed legitimate business expense since AO had accepted it as revenue expenditure rather than capital expenditure.
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• Taxpayer's LTCG Exemption Under Section 10(38) Upheld After Providing Documentary Evidence of Genuine Share Transactions

  Case-Laws - AT : ITAT reversed AO's addition under section 68 regarding alleged bogus long-term capital gains (LTCG). The tribunal found insufficient evidence to reject taxpayer's claim for exemption under section 10(38), as documentary evidence supported genuine share transactions. AO's rejection was based solely on unsubstantiated statements from individuals who were not produced for cross-examination. The related addition of estimated 2% commission was also deleted, as the underlying LTCG transactions were held genuine. CIT(A)'s deletion of additions was upheld, and Revenue's appeal was dismissed due to lack of merit in challenging the authenticity of share transactions.
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Customs

• Gold Smuggling Case: Preventive Detention Under COFEPOSA Act Upheld Despite Ongoing Criminal Proceedings Against Accused

  Case-Laws - HC : HC upheld preventive detention order under COFEPOSA Act against petitioner involved in smuggling foreign gold through Gaya International Airport. Despite petitioner's custody in related criminal case, court found detention justified per established precedents. Court rejected argument that existing criminal proceedings precluded preventive detention, citing Haradhan Saha and Ameena Begum decisions. Procedural challenge regarding delay in order communication dismissed as records showed proper execution and compliance with statutory timelines. HC confirmed detaining authority followed constitutional, statutory, and procedural requirements, with valid subjective satisfaction based on relevant materials. Detention order maintained as necessary preventive measure distinct from punitive criminal proceedings. Writ petition dismissed.
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• Natural Beta Carotene Powder Classified as Food Flavoring Material Under CTH 2106 90 60 Despite Industrial Color Claims

  Case-Laws - AT : CESTAT determined Natural Beta Carotene Powder's classification under Customs Tariff Act, 1975. While appellant sought classification under TI 3203 00 20 (industrial coloring products), the tribunal upheld classification under CTH 2106 90 60 (food flavoring material). Key reasoning: Chapter 3203 covers industrial, non-edible coloring products, while the subject product was specifically marketed as a food coloring agent for beverages and edible items. Product documentation confirmed its primary use as a yellow-orange food colorant, aligning with CTH 2106 90 60's scope for food flavoring materials. Appeal dismissed, original classification maintained.
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• Power Weeder Misclassified as Brush Cutter Under CH 8467 8990, Attracts Duty with Reduced Redemption Fine

  Case-Laws - AT : CESTAT ruled on classification dispute for imported Power Weeders, initially declared as Rotary Power Weeder but found to be Brush Cutters. The tribunal upheld classification under CH 8467 8990, confirming duty demand of Rs.3,91,930 for current imports and differential duty for past clearances within normal limitation period. Previous declarations correctly identified items as Brush Cutters, negating suppression allegations. Confiscation of goods valued at Rs.18,65,268 was sustained with reduced redemption fine of Rs.2,00,000 under Customs Act Section 125. Penalties under Sections 114A, 114AA were set aside due to absence of suppression. Director's penalties under Sections 112 and 114AA were also dropped. Appeal succeeded partially with modified penalties.
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• Malaysian Origin of PVC Flex Banners Upheld After Customs Evidence Found Inadmissible Under Section 138B

  Case-Laws - AT : CESTAT ruled in favor of the appellant regarding disputed origin of PVC Flex Banner imports and Anti-Dumping Duty (ADD) applicability. The tribunal found that evidence suggesting Chinese origin was inadmissible as cross-examination was denied for key witnesses under Section 138B of Customs Act. The AIFTA Certificate of Origin from Malaysia's Ministry of International Trade & Industry was deemed valid, with no substantial evidence disproving its authenticity. Swift transfer messages confirmed payments to Malaysian supplier. The tribunal set aside demands for ADD, Customs Duty, and associated penalties on all ten consignments, confirming Malaysian origin and eligibility for concessional duty rates under relevant customs notifications.
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Indian Laws

• Charitable Trust's Educational Institution Wins Property Tax Exemption Battle Under Section 136(c) After Procedural Violations

  Case-Laws - HC : HC ruled on property tax exemption for an educational institution operated by a charitable trust registered under Section 12A. Despite decade-long objections, authorities failed to follow mandated procedures under Section 148 of Municipal Corporation Act for investigating tax-related objections. Court directed Commissioner to decide objection following statutory procedure, allowing 8 weeks for document submission from tax authorities. A fresh speaking order must be passed within 6 months. Previous notices stayed and coercive actions prohibited pending final adjudication. Court emphasized Section 136(c)'s clear provision exempting educational institutions run by registered charitable trusts from property tax, while other institutions may receive up to 50% rebate.
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• Agreement to Sell with Possession Transfer Clause Attracts Full Stamp Duty Under Article 25 Schedule I

  Case-Laws - SC : SC held that the agreement to sell constituted a conveyance under Explanation I to Article 25 of Schedule I of Bombay Stamp Act, requiring full stamp duty payment. Despite the property being occupied on rental basis, the agreement's clause regarding possession transfer satisfied requirements for treating it as a conveyance. The appellant's possession, evidenced by pending litigation for specific performance and eviction, established liability for stamp duty. The Court upheld lower courts' orders to recover deficit duty and penalty, with the provision that any previously paid stamp duty would be deducted from future sale deed duty calculations. The appeal was dismissed, affirming that possession, whether current or promised, triggers stamp duty obligation.
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PMLA

• Resolution Professional Deemed Public Servant Under Prevention of Corruption Act; Money Laundering Trial to Proceed Under PMLA Section 3

  Case-Laws - HC : HC rejected discharge application in money laundering case involving Resolution Professional (RP). Court affirmed RPs qualify as public servants under Prevention of Corruption Act due to public nature of duties. Regarding money laundering charges under PMLA, court emphasized Section 3's broad scope covering all processes dealing with proceeds of crime. At discharge stage, court found sufficient prima facie evidence warranting trial, noting that detailed evidence evaluation occurs during trial, not discharge stage. Court held that given gravity of allegations and presence of material evidence, case merited full trial proceedings. Discharge application was consequently dismissed, requiring accused to face trial on both corruption and money laundering charges.
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• Bank's Prior Mortgage Rights Cannot Override Property Attachment Under PMLA Section 5, Rights Protected Under Section 8(8)

  Case-Laws - AT : AT ruled against Bank's challenge to property attachment under Prevention of Money Laundering Act (PMLA). Despite Bank's prior mortgage rights and claim as fraud victim, AT upheld attachment order by Enforcement Directorate under Section 5 of PMLA. Following precedent in JM Financial Asset Reconstruction case, AT determined that mortgage status alone insufficient to override PMLA attachment. Bank's rights remain protected under Section 8(8) of PMLA, allowing pursuit of claims within statutory framework. Property attachment stands valid without affecting underlying title until formal confiscation. Bank retains right to pursue remedies under PMLA provisions. Appeal dismissed with no interference in attachment order.
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• Money Laundering: Properties Attached as Proceeds of Crime Under PMLA Sections 5 and 8 Despite Pre-offense Purchase

  Case-Laws - AT : AT upheld the provisional attachment order under PMLA, dismissing appellants' challenge. The tribunal found authorities had properly recorded satisfaction under sections 5 and 8, rejecting claims of procedural violations. Properties purchased before the predicate offense were validly attached as representing proceeds of crime value. Despite appellants' claim of utilizing funds for legitimate business purposes in April 2008, AT maintained attachment was justified while criminal proceedings remained pending. Properties could be attached regardless of whether appellants were charged with scheduled offenses, as long as evidence showed proceeds of crime connection. The retrospective application of PMLA was deemed constitutionally valid as attachment constitutes civil action. Canara Bank's interests were noted as resolved following loan closure.
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SEBI

• Stockbroker Penalized Rs. 15 Lakhs for Client Fund Misuse and Excess Trading Exposure Beyond T+2+5 Days

  Case-Laws - AT : AT partially upheld SEBI's order against a registered stockbroker for misuse of client funds and providing excess exposure beyond T+2+5 days. The broker misutilized funds ranging from Rs. 88,000 to Rs. 2.48 crores across 31 instances, using credit balance clients' funds for debit balance clients' obligations. The charge of non-issuance of contract notes was dismissed as untenable. Applying the doctrine of proportionality and considering precedent of Angel Broking Ltd., while noting the appellant's status as a repeat offender, AT reduced the penalty from original amount to Rs. 15 lakhs.
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VAT

• Tax Settlement Scheme: 60% Waiver Applies to Full Disputed Amount Without Pre-deposit Deduction Under Amnesty Rules

  Case-Laws - HC : HC ruled on tax settlement scheme interpretation regarding admitted versus disputed tax amounts. Settlement Officer erroneously deducted pre-deposit from disputed amount before applying 60% waiver under scheme. On Rs. 5,94,03,043 disputed amount (difference between determined tax Rs. 6,27,82,418 and admitted tax Rs. 33,79,374), petitioner was entitled to 60% waiver on full disputed sum without pre-deposit adjustment. Court set aside appellate authority's order, directed recalculation of settlement amount without deducting Rs. 49,00,000 pre-deposit from disputed amount before applying waiver. Ordered refund of excess amount with 6% interest per annum from deposit date until refund. Court emphasized liberal interpretation of beneficial tax legislation per precedent.
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• Tax Amnesty Scheme Calculation Must Apply Waiver Percentages Before Deducting Pre-deposits for Settlement Amount

  Case-Laws - HC : HC determined the computation methodology under the Jharkhand Amnesty Scheme 2022, clarifying the distinction between 'admitted tax' and 'disputed amount.' The Settlement Officer's approach of deducting pre-deposit before applying waiver percentages was deemed incorrect. While the petitioner demonstrated a potential loss of Rs. 1,32,03,446 due to incorrect scheme application, they were bound by their revised computation submitted during appellate proceedings. Following the principle of liberal interpretation for beneficial legislation, as established in Mother Superior Adoration Convent case, the court granted relief. The petitioner was awarded a refund of Rs. 1,18,02,056 with 6% annual interest from deposit date until refund disbursement.
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Central Excise

• Excise Duty Exemption Restored as Department Failed to Prove Suppression Under Section 11A(4) of Central Excise Act

  Case-Laws - AT : CESTAT allowed the appeal against denial of excise duty exemption under N/N. 01/2011-CE, setting aside Commissioner's order. The Tribunal held that extended period of limitation under Section 11A(4) of Central Excise Act was wrongly invoked. Mere wrong availment of exemption notification without substantiated deliberate suppression cannot justify extended limitation period. Department failed to prove intentional evasion of duty, particularly since three prior audits found no irregularities and appellant regularly filed returns. The bona fide belief of eligibility for exemption was accepted. Show cause notice issued on 26.06.2020 was time-barred as it could only be issued within normal limitation period under Section 11A(1).
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Case Laws:

• GST

• 2025 (2) TMI 793
  Cancellation of GST registration without giving any opportunity of hearing or without any SCN - Violation of principles of natural justice - HELD THAT:- The bare reading of this order would indicate that according to the Department, the petitioner herein had given some reply dated 14-4-2022 in response to the show cause notice dated 4-4-2022. Immediately, in the second line, the order reads that no reply to show cause notice was submitted by the petitioner. The effective date of cancellation of the registration is shown to be 31-3-2022. The case of the petitioner is that no show cause notice was at all served upon him and, therefore, there is no question of giving any reply - Issue Notice, returnable in four weeks.

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• 2025 (2) TMI 792
  Rejection of appeal of the petitioner without entering into the merits for non-compliance of section 107(6)(b) of the GST Act, which provides for a pre-deposit of 10% of the amount of tax in dispute in order to maintain the appeal - petitioner submits that once the mandatory condition of pre-deposit is made good, the impugned order cannot be sustained in the eyes of law and therefore, a direction may be issued to decide the petitioner s Defective Appeal No. GST-0010/2023/D expeditiously. HELD THAT:- The impugned order dated 10.04.2023 passed by the respondent no. 2 in Defective Appeal No. GST-0010/2023/D cannot be sustained in the eyes of law. The same is quashed.

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• 2025 (2) TMI 791
  Levy of tax and penalty - technical error in the e-way bill regarding the shipping address - auto-populated e-way bill - HELD THAT:- The Court is of the opinion that e-way bill is the document which is generated and accompanying the goods in transit, so that department may come to know about the movement of goods from one place to another place. So that at the time of passing final assessment, the particular transaction may not escape from levy of tax as per the prevalent provisions, under the GST Act - Further, the e-way bill can be cancelled within its validity as provided under the Act. The case in hand, the e-way bill was automatically generated on 14.12.2022, which was valid up to 16.12.2022. In the present case, the e-way bill has not been cancelled within its validity, therefore, no adverse view can be taken against the petitioner that if the goods were not intercepted, transaction in question could have escape to assessment. This Court in the case of M/s Sun Flag Iron and Steel Company Limited Vs. State of UP and others [ 2023 (11) TMI 456 - ALLAHABAD HIGH COURT] has held that the purpose of e-way bill is that the department should know the actual movement of the goods and once the e-way bill is not cancelled within the prescribed period, the genuineness of the transaction cannot be questioned. Conclusion - Merely on technical ground that in the e-way bill accompanying with the goods in question, the place of shipment has wrongly been mentioned, the seizure or levy of penalty cannot be made. The proceedings initiated against the petitioner is not justified in the eyes of law. Petition allowed.

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• 2025 (2) TMI 790
  Power of Appellate Authority to condone the delay in filing an appeal beyond one month of the prescribed period under Section 107 of the West Bengal Goods and Service Tax Act, 2017 - HELD THAT:- Admittedly in this case, it would appear that the appeal had been dismissed solely on the ground that the same had been filed beyond one month of the time prescribed for filing the appeal. The appeal therefore, was obviously barred by limitation. However, at the same time, the aforesaid could not prevent the petitioner from maintaining an application for condonation of delay by invoking the provisions of Section 5 of the Limitation Act, 1963. The issue whether the Appellate Authority is competent to condone the delay beyond one month from the prescribed period for filing of an appeal has already been conclusively decided by the Hon ble Division Bench of this Court in the case of S. K. Chakraborty Sons Vs. Union of India [ 2023 (12) TMI 290 - CALCUTTA HIGH COURT] . The Appellate Authority ought to have taken note of the explanation given in the application for condonation of delay under Section 5 of the Limitation Act, 1963. Taking note of the fact that no fruitful purpose will be served by remanding the aforesaid matter on the issue of condonation of delay to the Appellate Authority and also considering the explanation given by the petitioner, the petitioner has been able to sufficiently explain the delay in filing the appeal belatedly. The writ petition is disposed of.

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• 2025 (2) TMI 789
  Challenge to order passed u/s 73 of the GST Act - appeal has been dismissed as being beyond limitation - passed without giving a mandatory hearing - principles of natural justice - HELD THAT:- Considering the fact that the mandatory provisions of Section 75(4) are essentially to be followed and the same has not been followed as is clear from the perusal of the orders impugned. On the said limited ground, the impugned orders 13.12.2023 and the order dated 30.01.2025, are quashed. The writ petition is allowed. The matter is remanded to pass orders afresh after giving opportunity of hearing to the petitioner.

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• 2025 (2) TMI 788
  Condonation of delay of 94 days in filing the appeal - penalty for wrong utilization of input tax credit - HELD THAT:- The issue decided in M/S. GREENSTAR FERTILIZERS LIMITED, REP. BY ITS CHIEF OPERATING OFFICER, E. BALU VERSUS THE JOINT COMMISSIONER (APPEALS) , THE ASSISTANT COMMISSIONER OF GST AND CENTRAL EXCISE, TUTICORIN [ 2024 (6) TMI 667 - MADRAS HIGH COURT] where it was held that considering the fact that the petitioner has availed input tax credit, which was not eligible to be availed, but could have resulted in wrong utilization of input tax credit, a token penalty of Rs.10,000/- is imposed on the petitioner. The observation of the first respondent by placing reliance on the decisions of the Hon ble Supreme Court, referred to supra, is also not relevant as Section 74 of the CGST Act deals with a situation where the credit is availed or utilized by reason of fraud or any wilful misstatement or suppression of facts. The impugned order dated is set aside and the matter is remitted back to the second respondent to consider the matter afresh, and pass appropriate orders on merits and in accordance with law - Petition disposed off by way of remand.

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• 2025 (2) TMI 787
  Scope of SCN - Non-mentioning about the Security Wages in the SCN - to fall under Administration Expenses or not - Seeking opportunity of personal hearing to present the case - violation of principles of natural justice - HELD THAT:- In the case on hand, though the entire impugned order has been challenged, the learned counsel for the petitioner has restricted his relief only with regard to the security wages and requested this Court to grant liberty to the petitioner to file an appeal against all the other issues pertaining to the impugned assessment order dated 30.08.2024. As rightly contended by the petitioner, the respondent found Security Wages and disputed the same, only upon production of documents by the petitioner. Prior to the furnishing of documents, no such issue was raised either vide show cause notice or in any other manner. In the show cause notice also, the respondent had stated only with regard to the Administration Expenses . Conclusion - This Court is of the considered view that it is a fit case to interfere on the aspect of non-providing of any opportunity of personal hearing to the petitioner. Therefore, this Court is inclined to set aside the impugned order only to the extent of Security Wages . As far as the remaining issues are concerned, as requested by the petitioner, this Court grants liberty to them to file an appeal against the impugned order. However, it is not proper for the petitioner to file their appeal in a piecemeal manner. The impugned order dated 30.08.2024 is set aside and the matter is remanded to the 1st respondent for fresh consideration only on the aspect of Security Wages - Petition disposed off by way of remand.

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• 2025 (2) TMI 786
  Challenge to assessment order in Form GST DRC-07 - said proceedings did not contain a DIN number - HELD THAT:- The question of the effect of non-inclusion of DIN number on proceedings, under the G.S.T. Act, came to be considered by the Hon ble Supreme Court in the case of Pradeep Goyal Vs. Union of India Ors [ 2022 (8) TMI 216 - SUPREME COURT] . The Hon ble Supreme Court, after noticing the provisions of the Act and the circular issued by the Central Board of Indirect Taxes and Customs, had held that an order, which does not contain a DIN number would be non-est and invalid. A Division Bench of this Court in the case of M/s. Cluster Enterprises Vs. The Deputy Assistant Commissioner (ST)-2, Kadapa [ 2024 (7) TMI 1512 - ANDHRA PRADESH HIGH COURT] , on the basis of the circular, dated 23.12.2019, bearing No.128/47/2019-GST, issued by the C.B.I.C., had held that non-mention of a DIN number would mitigate against the validity of such proceedings. Another Division Bench of this Court in the case of Sai Manikanta Electrical Contractors Vs. The Deputy Commissioner, Special Circle, Visakhapatnam [ 2024 (6) TMI 1158 - ANDHRA PRADESH HIGH COURT] , had also held that non-mention of a DIN number would require the order to be set aside. Conclusion - The Writ Petition challenging the assessment order was disposed of, allowing the respondent to conduct a fresh assessment with the requirement of assigning a DIN number and excluding the period from the original assessment order to the current decision for limitation purposes. Petition disposed off.

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• 2025 (2) TMI 785
  Discrepancies in the petitioner s tax filings under the Goods and Services Tax Act, 2017 - neither the show cause notices nor the impugned order of assessment has been served on the petitioner by tender or sending it by RPAD - petitioner is ready and willing to pay 25% of the disputed tax and that they may be granted one final opportunity before the adjudicating authority - HELD THAT:- The petitioner shall deposit 25% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondent, within a period of four weeks from the date of receipt of a copy of this order - The impugned order dated 16.03.2024 is set aside. Petition disposed off.

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• 2025 (2) TMI 784
  Challenge to assessment order - the proceeding does not contain the signature of the assessing officer - HELD THAT:- The effect of the absence of the signature, on an assessment order was earlier considered by this Court, in the case of A.V. Bhanoji Row Vs. The Assistant Commissioner (ST), in W.P.No.2830 of 2023, decided on 14.02.2023 [ 2023 (2) TMI 1224 - ANDHRA PRADESH HIGH COURT] . A Division Bench of this Court, had held that the signature, on the assessment order, cannot be dispensed with and that the provisions of Sections 160 169 of the Central Goods and Service Tax Act, 2017, would not rectify such a defect - Following this Judgment, another Division Bench of this Court, in the case of M/s. SRK Enterprises Vs. Assistant Commissioner [ 2023 (12) TMI 156 - ANDHRA PRADESH HIGH COURT] , had set aside the impugned assessment order. Another Division Bench of this Court by its Judgment in the case of M/s. SRS Traders Vs The. Assistant Commissioner ST ors [ 2024 (4) TMI 894 - ANDHRA PRADESH HIGH COURT] , following the aforesaid two Judgments, had held that the absence of the signature of the assessing officer, on the assessment order, would render the assessment order invalid and set aside the said order. Conclusion - The impugned assessment order would have to be set aside on account of the absence of the signature of the assessing officer, on the impugned assessment order. Petition disposed off.

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• 2025 (2) TMI 783
  Seeking release of admitted liability towards the difference of GST - HELD THAT:- Reliance placed on an order Division Bench of this Court in M/S APEX STRUCTURE PVT. LTD. [ 2024 (12) TMI 928 - MADHYA PRADESH HIGH COURT] wherein it is observed that Respondent No.4 which is a State GST Department, according to which also the rate of GST has been enhanced from 12% to 18% and same is liable to be paid by respondent No.2 which is a Government Entity. Petition disposed off.

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• 2025 (2) TMI 782
  Continued suspension GST registration pursuant to the issuance of a SCN - HELD THAT:- The record would bear out that despite a detailed reply having been filed soon thereafter, and more particularly on 08 October 2024, the SCN proceedings have not been finalized till date. This writ petition is disposed off by directing the competent authority to ensure that the pending SCN proceedings are disposed of in accordance with law with due expedition and preferably within a period of two weeks from the date of presentation of a certified copy of our order.

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• 2025 (2) TMI 781
  Voluntary cancellation of Goods and Services Tax (GST) registration - seeking disposal of its application in terms of which it had sought voluntary cancellation of its Goods and Services Tax registration - HELD THAT:- It appears that while the writ petition was disposed of on 02 December 2024, the operative directions were framed against the State GST authorities. It is informed that the application is pending consideration of the Central GST authorities and which fact was not disclosed at the time of disposal of the writ petition. The first respondent is requested to duly examine and dispose of the pending application in accordance with law and with due notice to the writ petitioner - petition disposed off.

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• 2025 (2) TMI 780
  Challenge to impugned order on the premise that there is violation of principles of natural justice - petitioner is ready and willing to pay 25% of the disputed tax and seeks grant of one final opportunity before the adjudicating authority - HELD THAT:- The impugned order dated 18.07.2024 is set aside. The petitioner shall deposit 25% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondent, within a period of four weeks from the date of receipt of a copy of this order.

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• 2025 (2) TMI 779
  Withdrawal of Advance Ruling application - GST Search can be conducted other than the place specified in the Search warrant or not - cash or valuables can be seized by the department from the place other than specified and authenticated in the search warrant or not - cash and goods pertaining to the person other than the assessee can be seized by the Department or not - confiscation of cash seized - HELD THAT:- The applicant has not raised any questions which are found to be covered under any of the clauses of sub-section (2) of section 97 of the GST Act. It is satisfied that the applicant has been provided reasonable opportunity to counter the observations. Therefore, there are no reason to accept the instant application made by the applicant for pronouncement of ruling. The application is, therefore, rejected on this ground alone. In terms of first proviso of sub section (2) of section 98 of the GST Act the authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act . Here, found that as the matter has already been decided by Assistant Commissioner, CGST division-J, Ajmer vide Order in Original No. 14/GCM/GST/DIV-I/2024-25/AC dated 11.06.2024. Therefore, the application filled by the applicant is not fit to accept for pronouncement of ruling. The application is liable to be rejected, hence, rejected. Since the ruling authority has not found any reason to accept the application for pronouncement of ruling as above and the applicant has also requested for withdrawal of the application, therefore, their request to withdraw the application is considered.

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• Income Tax

• 2025 (2) TMI 778
  Offence punishable u/s 276B - TDS (Tax Deducted at Source) was collected by the company but not deposited into the Central Government account in time - delay of payment on 39 occasions as per the online data available - as decided by HC [ 2024 (1) TMI 1440 - TELANGANA HIGH COURT] when the entire amount of TDS along with interest was paid even prior to the first communication from the Department and the balance interest amount was paid after the notice, this Court deems it appropriate to quash the proceedings against the petitioners - HELD THAT:- There is a gross delay of 239 days in filing the special leave petition. The reasons assigned for seeking condonation of delay are neither sufficient in law so as to condone the same nor satisfactory. Hence, the application seeking condonation of delay is dismissed. Consequently, the special leave petition also stands dismissed.

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• 2025 (2) TMI 777
  Reopening of assessmnet u/s 147 - reason to believe OR reason to suspect - delay filling SLP As decided by HC [ 2023 (2) TMI 426 - BOMBAY HIGH COURT] Reasons recorded do not suggest at all whether pursuant to receipt of information, the assessing Officer had independently applied its mind to the information received or conducted its own inquiry into the matter for the purpose of coming to a conclusion that indeed income assessable to tax had escaped assessment or that the transaction in question with the alleged shell entity was only a paper transaction HELD THAT:- There is a delay of 354 days in filing the present special leave petition, which has not been adequately and satisfactorily explained. Even on merits, we do not see any good ground and reason to interfere with the impugned judgment. Recording the aforesaid, the application for condonation of delay and, consequently, the special leave petition are dismissed.

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• 2025 (2) TMI 776
  Denial of exemption u/s 11 - delay in electronically uploading Form 10B but filed it manually within the prescribed period - HELD THAT:- We are satisfied that the Petitioner filed Form 10B manually or physically within the prescribed period. True, Form 10B was not uploaded electronically. Petitioner was not intimated for a long time that this was the requirement for which the exemption was being denied. Belatedly, the Petitioner was informed that this was one of the reasons. Therefore, the Petitioner took expedient steps. Petitioner also explained that she had nothing to gain from non-compliance. The non-compliance, if any, was due to the advice of a professional Chartered Accountant. Even the Chartered Accountant filed an affidavit explaining her bona fides and the factum of the advice. After the Petitioner became aware of the reasons, she took several steps and ultimately uploaded Form 10B electronically. Still, the application for condonation of delay has been rejected without adequate compliance with the principles of natural justice and fair play. The delay should be condoned as long as such lapse is not mala fide and the assessee has not derived any undue advantage out of his own lapse. Besides, in this case, though the delay appears considerable, there is some merit contentions that the delay should be construed from the day Petitioner was informed of the real reason for the denial of exemption. After it was informed of the real reason, the Petitioner s conduct cannot be said to be either informed with lethargy or indolence. The Petitioner took several steps and time and again pointed out that Form 10B was already filed manually within the prescribed time. That even before the CIT (Exemption), the Petitioner categorically pleaded and made good their submissions about Form 10B being filed manually within the prescribed time limit. This was a crucial circumstance when considering the Petitioner s conduct and its application for condonation of delay. The possession of the certification is a mandatory requirement. The mode of proof may not always be. In any event, no dispute is raised about the Petitioner submitting the prescribed form within the prescribed period manually or physically. The impugned order, however, takes no cognisance of this crucial circumstances. We are satisfied that discretion should have been exercised, and the delay should be condoned. We condone the delay in electronically uploading Form 10B after noting that his form was already filed in the physical form within the prescribed period, i.e. on 30 September 2014, about which there is no dispute whatsoever.

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• 2025 (2) TMI 775
  Validity of reassessment proceedings - notice as issued u/s 148A(b) to the petitioner on the basis of High Risk CRIU/VRU information available on Insight Portal - receipt of accommodation entries in the form of bogus capital expenses from fictitious entity - HELD THAT:- Revenue appears to have conducted a physical verification which was confirmed vide the Clarificatory Letter dated 22.08.2024. However, without issuing a further notice in respect of the alleged non-existence of the said entity at the Jasola address and calling for an explanation in that regard, the respondent/Revenue passed the impugned order u/s 148A (d) of the Act dated 31.08.2024. This procedure, to our mind, is abject violation and infraction of the principles of natural justice, inasmuch as, the conclusion regarding the said entity being a non-existent bogus entity was never put to the petitioner in the show cause notice dated 09.08.2024 issued u/s 148A (b) of the Act. In other words, the petitioner was never afforded an opportunity to respond to the said allegation. The aforesaid infraction gathers great significance having regard to the fact that the original assessment proceedings for the AY 2018-19 stood closed. It was only by the impugned notice u/s 148A (b) of the Act dated 09.08.2024, the initiation of re-assessment proceedings were to commence. Ordinarily, after the closure of the assessment proceedings, AO would be functus officio and to re-confer jurisdiction upon the AO to initiate re-assessment proceedings, relevant incriminating material ought to be put to the assessee before any such re-commencement can be sought. Reassessment proceedings set aside - Decided in favour of assessee.

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• 2025 (2) TMI 774
  Condonation of delay in filing form 10 CCB u/s 119 - Petitioner prayed for condonation of delay for revised Income Tax Return to be accepted, as a return filed u/s 139 (5) - HELD THAT:- The management of the company did not know about his personal problems until socially unacceptable conduct came to light when his wife barged into the Registered Office of the company along with her children. Petitioner further stated that, it was only after the receipt of notice u/s 142 (1) calling for information and details pursuant to notice issued u/s 143 (2) the company realised that the original tax filings on 7th November 2017, were based on incorrect figures. Petitioner has also submitted that, in the midst of all this, the director of the company, was also irregular in attending the office due to his mother s deteriorating ill health during the period from June 2017 to March 2018. The Petitioner has submitted that, during this period, his mother was operated for 3 major spine problems at Hinduja Hospital. His mother was completely bedridden after the surgeries and, hence, the director could not attend the office on a regular basis. Petitioner also submitted that since the business of the company had expanded, and there was need for an ERP system for the company to manage its operations, the company, during F.Y. 2016-17, implemented a new ERP accounting programme system in its office. During this phase, the company experienced a high attrition rate impacting accounting work on day to day basis, leading to delayed preparation of financial information. In these circumstances, the Petitioner has sought for condonation of delay. Such factors which are purely fortuitous and purely human attributes necessarily required due consideration, when it comes to compliances of time limits prescribed under the IT Act. As observed by this Court in Jyotsna M. Mehta [ 2024 (9) TMI 585 - BOMBAY HIGH COURT] the situation in hand would be akin to how a Court would consider in the legal proceedings before it, in condoning delay in filing of proceedings. Resultantly, the impugned Order dated 21st September 2023 is quashed and set aside. The Respondents are directed to permit the Petitioner to file returns with penalty, fees and interest, if any, within a period of two weeks from the date a copy of this Order is available.

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• 2025 (2) TMI 773
  Validity of Order passed u/s 92CD(3) - Whether an Appeal under Section 246A(bb) is the appropriate remedy for the Petitioner? - HELD THAT:- What the Petitioner refers to as a letter dated 31st March, 2024 (Exh. Q to the Petition) is not a letter but an Order passed under Section 92CD(3). Against the said Order, an Appeal is provided under Section 246A(bb) of the Act. Section 246A(bb) of the Act clearly provides for an Appeal to the Commissioner (Appeals) against the Order made under sub-section (3) of Section 92CD of the Act. 21. In these circumstances, since the efficacious alternate remedy of an Appeal is available to the Petitioner under Section 246A (bb) of the Act, we are not inclined to entertain this Petition and we are inclined to relegate the Petition to the alternate remedy of an Appeal. It has been pointed out to us that, subsequent to the filing of this Petition, an Order has been passed under Section 154 r/w Section 92CD of the Act. The said Order shows that, even as per the Revenue, a sum of Rs. 23,77,74,400/- is refundable to the Petitioner. Even though we are dismissing this Petition on the ground of an alternate remedy available to the Petitioner, we are of the view that this admitted amount of Rs. 23,77,74,400/- should be paid to the Petitioner along with interest. The Petitioner is at liberty to file an Appeal under Section 246A (bb).) Respondents are directed to refund to the Petitioner an amount as per the Order passed under Section 154 r/w Section 92CD of the Act along with applicable interest until the date of payment.

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• 2025 (2) TMI 772
  Denying credit for Tax Deduction at Source (TDS) - Whether ITAT erred in confirming the action of the Respondent in denying the credit for the TDS amount although TDS Certificates stood in the name of the Appellant and credit could be given only to the Appellant as the deductee and not to any one else? - HELD THAT:- It is not in dispute that the income corresponding to the TDS was not offered to tax by the appellant. It is stated to have been offered to tax by ISPL alongwith the TDS. The Appellant has not placed on record as to what was the exact position in respect of the returns of the ISPL qua the said amount and whether the ISPL, in offering the relevant income, has claimed TDS or otherwise. Admittedly, in the present case, the assessee has filed a NIL return. It would not require any elaboration that the TDS is on the income/receipt of the assessee and forms part of the income of the assessee. Thus, when there is no income being offered qua the corresponding TDS and as TDS is part of the assessee s income, the position being taken by the appellant is a position contrary to its returns. There cannot be a situation that the principal income corresponding to the TDS as claimed, is not offered for assessment as a NIL return is filed, however, merely the benefit of TDS income is claimed. This would be contrary to the provisions of Section 198 which provides that the tax deducted at source would be the income received. Admittedly in the present case, for the Assessment Year in question, independent tax returns have been filed by the assessee as also by the ISPL. Thus, such incongruence and a position contrary to the return of the appellant goes contrary to the provisions of Section 198 read with Section 199 of the Income Tax Act. Decided in favour of the Revenue.

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• 2025 (2) TMI 771
  TCS u/s 206C - As per the Revenue verification of the declaration to be furnished by the purchaser is to be done by the seller (i.e. the assessee in the instant matter) - Whether it is duty and the responsibility of the assessee company to collect TCS @ 1% u/s 206C (1A) of the Act from all buyers on the sale of coal if it is not used for self-consumption or for the purpose for which it was intended to be used ? - whether assessee company is not responsible for verification of Form 27C if it is duly filed in and signed by the declarant? HELD THAT:- The declarant in Form-27C is the purchaser and not the seller Quite clearly, the phrase verified in the prescribed manner in the scheme of the Act and the Rules, mean that the verification/ declaration is to be made by the purchaser who is providing the signed/ verified form to the seller, and neither the Act, nor the Rules, in any manner lay down that any verification whatsoever is to be done by the seller, as is being sought to be contended by the Revenue. There is no question of law, much less any substantial question of law involved in the instant appeal, as, what is being contended by the Revenue is clearly de hors what is laid down in section 206C (1A) of the Act read with Rule 37C of the Rules and Form 27C. Hon ble Supreme Court in the case of CIT v. A.A. Estate (P) Ltd. [ 2019 (4) TMI 957 - SUPREME COURT] has held that if the High Court is of the view that if an appeal does not involve any substantial question of law so as to attract the rigor of section 260-A of the Act for its admission, the appeal ought to be dismissed in limine.

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• 2025 (2) TMI 770
  Maintainability of appeal on low tax effect - assessees submit that the tax effect in these appeals is less than Rs. 50,00,000/- - HELD THAT:- The letter dated 20 August 2018 categorically states that the modification introduced thereby to the CBDT circular dated 11 July 2018 shall come into effect on the date of issue of this letter. Thus, no retrospective effect is given to the two added exceptions by letter dated 20 August 2018. Paragraph 13 of the CBDT circular dated 11 July 2018 remains unamended. This means that, insofar as the increased monetary limits are concerned, they would apply even to the pending appeals. However, when it comes to applying the exceptions, the same would apply from 20 August 2018 and not earlier. A similar issue arose before the co-ordinate bench in the case of V. M. Salgaonkar and Brothers (P.) Ltd. [ 2024 (12) TMI 717 - BOMBAY HIGH COURT ] On analysing circulars 5 of 2024 and 9 of 2024, the coordinate bench held that the monetary limits would apply to the pending appeals, but when it comes to the exceptions subsequently introduced, such exceptions could not be construed retrospectively. The above decision was followed by us in M/s IPL Loan Trust) [ 2025 (2) TMI 453 - BOMBAY HIGH COURT ] Applying the same principles to the circulars and amending letters involved in the present appeals, we are satisfied that these four appeals which were instituted before 20 August 2018 would have to be disposed of as the tax effect involved in these appeals is below the monetary limits of Rs.50,00,000/-.

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• 2025 (2) TMI 769
  MAT applicability to a company engaged in the business of providing electricity and governed by the Electricity Supply Act - HELD THAT:- The issue raised in various appeals insofar as applicability of Section 115JB is covered by the decision of Ajmer Vidyut Vitran Nigam Ltd. [ 2021 (11) TMI 1103 - RAJASTHAN HIGH COURT] and Tata Power Delhi Distribution Ltd. [ 2025 (1) TMI 879 - DELHI HIGH COURT] We may further observe that both the parties have agreed that the ratio laid down in the case of Union Bank of India [ 2019 (5) TMI 355 - BOMBAY HIGH COURT] , M/s. Dresdner Bank AG [ 2025 (2) TMI 707 - BOMBAY HIGH COURT] and Dena Bank [ 2019 (8) TMI 1924 - BOMBAY HIGH COURT] squarely applies to the facts of the present case since even the banking companies are not required to make their financials according to the Companies Act, but since they are required to make their financials as per the Banking Regulation Act, the provision of Section 115JB would not be applicable. Decided in favour of the Assessee. Addition of interest charged u/s. 234D - The issue is covered against the Assessee and in favour of the Revenue by the decision of this Court in the case of Indian Oil Corporation Ltd. [ 2012 (9) TMI 517 - BOMBAY HIGH COURT] . Therefore, following the decision of the Coordinate Bench Question (ii) is answered in favour of the Revenue against the Assessee.

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• 2025 (2) TMI 768
  Power of CIT(A) to dismiss the appeal for non-prosecution - delay in filing the appeal to be condoned due to sufficient cause, including the impact of the COVID-19 pandemic - HELD THAT:- Sub-section 2 of Section 251 states that the Joint Commissioner (Appeals) or the Commissioner (Appeals), as the case may be, shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Explanation contained in Section 251 states that in disposing of an appeal, the Commissioner (Appeals) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the Commissioner (Appeals) by the appellant. Thus, on a plain reading of the above provision indicates that the Commissioner (Appeals) should decide the appeal petition on merits. The Hon ble Supreme Court in Aditya Khaitan Ors. [ 2023 (10) TMI 155 - SUPREME COURT ] had taken note of the impact of the covid pandemic and observed that when the whole world is in grip of devastating pandemic, it could never have been said that the parties were slipping over their rights. In the instant case it is no doubt that the entire period was not covered during the pandemic but the part of the period was undoubtedly covered during the pandemic. Even thereafter there has been some delay in the matter. However, what is to be borne in mind is the settled legal principle that the facts of each case have to be considered before applying the legal principle as to how an application under Section 5 of the Limitation Act has to be decided. Ordinarily, a litigant does not stand to gain by either preferring an appeal belatedly or not appearing before the appellate forum. There may be cases where for certain mala fide reasons the appellant will avoid proceedings. However, in the instant case there is no such record to show that the appellant had deliberately lodged appeal belatedly before the Tribunal or that deliberately they did not appear before the CIT(A) for certain other collateral purposes. Therefore, apart from that, since the matter involves the tax liability, and the appellant s remedy before the CIT(A) is a very valuable remedy since the Commissioner s powers are coterminus with that powers of the assessing officer, we deem it appropriate to restore the appeal to the CIT(A) for being decided on merits subject to the condition that the appellant should not seek for any adjournment and should cooperate in the disposal of the appeal by the Commissioner. Appeal is allowed and the order passed by Tribunal is set aside as well as the order passed by the CIT dated 16.10.2019 and the appeal stands restored to the file to be decided on merits in accordance with law.

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• 2025 (2) TMI 767
  TDS u/s 195 - liability to deduct TDS on payments made to non-residents - ITAT come to conclusion that the payments made to three non-resident Companies do not fall within the meaning of royalty as defined in DTAA - HELD THAT:- We agree with the aforesaid conclusion drawn by the ITAT. The conclusion drawn by the CIT(A) in favour of the Revenue was primarily by relying upon the judgment in the case of Samsung Electronics Co. Ltd. [ 2011 (10) TMI 195 - KARNATAKA HIGH COURT] and also by holding that the payments received by assessee from two affiliates by granting user right to software is royalty and has been brought to tax in India. The said judgment has been over-ruled. In this regard, we may also refer to the judgment of the Supreme Court in the case of Engineering Analysis [ 2021 (3) TMI 138 - SUPREME COURT] Similarly, a reference is also made to the judgments of Infrasoft Ltd. [ 2013 (11) TMI 1382 - DELHI HIGH COURT] and ZTE Corporation [ 2017 (1) TMI 1338 - DELHI HIGH COURT] to hold High Court is not correct in referring to Section 9 (1) (vi) of the Income Tax Act after considering it in the manner that it has and then applying it to interpret the provisions under the Convention between the Government of the Republic of India and the Government of Ireland for the Avoidance of Double Taxation and for the Prevention of Fiscal Evasion with respect to Taxes on Income And Capital Gains - when a copyrighted article is sold, the end-user gets the right to use the intellectual property rights embodied in the copyright which would therefore amount to transfer of an exclusive right of the copyright owner in the work, is also wholly incorrect. Decided against revenue.

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• 2025 (2) TMI 766
  Computation of deduction u/s 80-IA - quantum of deduction which the assessee would be entitled to claim u/s 80IA - AO did not accept the case of the assessee that the market value of the electricity should be computed based on the rates fixed by the State Electricity Board for the electricity which is purchased by the assessee and held that there was excessive claim of deduction on captive consumption and restricted the deduction claimed by the appellant u/s 80IA of the Act. HELD THAT:- For the purpose of taking a decision on merits, we need not labour much as we are guided by the decision of the Hon ble Supreme Court in Jindal Steel and Power Limited. [ 2023 (12) TMI 417 - SUPREME COURT] as held that market value of the power supplied by the State Electricity Board to the industrial consumers should be construed to be the market value of electricity. It should not be compared with the rate of power sold to or supplied to the State Electricity Board since the rate of power to a supplier cannot be the market rate of power sold to a consumer in the open market. The State Electricity Board s rate when it supplies power to the consumers have to be taken as the market value for computing the deduction u/s 80-IA of the Act. We hold that the Tribunal had rightly computed the market value of electricity supplied by the captive power plants of the assessee to its industrial units after comparing it with the rate of power available in the open market, i.e., the price charged by the State Electricity Board while supplying electricity to the industrial consumers. Decided against revenue.

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• 2025 (2) TMI 765
  Reopening of assessment u/s 147 - as argued procedure contemplated by Section 148A as not been followed before issuing the impugned notices - case of the appellant was not such as permitted the department to avoid following the procedure contemplated u/s 148A more so because it could not be said that proceedings u/s 132A had been initiated against the appellant in the instant case.- HELD THAT:- Appellant s submission appears to confuse between the existence of a power u/s 132A of the I.T. Act and the manner of exercise of that power. Merely because the Department had resorted to a different procedure under the Cr.P.C. for the purposes of effectuating the action initiated under Section 132A it could not be said that the power under Section 132A had not been invoked, and the proceedings thereunder initiated, for the purposes of the I.T. Act. Inasmuch as the provisions of Section 132A have been invoked, we are in agreement with the finding of Single Judge that there was no requirement for compliance with the procedure contemplated u/s 148A of the I.T. Act prior to issuing the impugned notices under Section 148. Thus, Writ Appeal fails, and is accordingly dismissed.

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• 2025 (2) TMI 764
  Revision u/s 263 - Whether the assessment order under section 143(3) was erroneous and prejudicial to the interests of the revenue? - HELD THAT:- What is relevant for clause (a) of Explanation 2 to section 263 of the Act is whether the AO has passed the order after carrying our enquiries or verification, which a reasonable and prudent officer would have carried out or not. It does not authorize or give unfettered powers to the Ld Pr. CIT to revise each and every order, if in his opinion, the same has been passed without making enquiries or verification which should have been made. This would inevitably mean that every order of the lower authority would thus become susceptible to section 263 of the Act and, in turn, will cause serious unintended hardship to the tax payer concerned for no fault on his part. Apparently, this is not intended by the Explanation. Howsoever wide the scope of Explanation 2(a) may be, its limits are implicit in it. It is only in a very gross case of inadequacy in inquiry or where inquiry required on the basis of record available before the AO was not conducted, the revisionary power so conferred can be exercised to invalidate the action of AO. AO in the present case has not accepted the submissions of the assessee on various issues summarily but has duly scrutinize the whole issue of excess stock as apparent from various queries made during the assessment proceedings. He passed after making due enquiries after due application of mind. Twin conditions are not satisfied for invoking the jurisdiction under section 263. Here, in our view, it cannot be held that the assessing officer did not carry out enquiry or verification which should have been done. Thus, CIT was not justified and not correct in law in holding that the impugned assessment order was erroneous. Accordingly, we find merit in the contentions of the assessee that the revision order passed by ld. PCIT for the year under consideration is beyond the scope of section 263 of the Act and hence not valid. Accordingly, we set aside the revision order passed by him. Assessee appeal allowed.

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• 2025 (2) TMI 763
  Disallowance u/s 37 in respect of an expense which has not at all been claimed in the Profit Loss a/c - HELD THAT:- Underlying amount paid by the assessee qualifies as an expenses incurred by the assessee in order to secure the business of earning commission income from Max Life and such amount does not partake the character of service tax liability since such service tax liability was, under law never that of the assessee. Such service tax liability was essentially that of Max Life under reverse charge mechanism. We also note that there is no specific provision which prohibits entering into such contractual agreement for sharing service tax liability and hence such agreement cannot be held to be an offence and hence prohibited by Explanation to Section 37. AO s contention that the amount in question was collected by Max Life from assessee but was not deposited to with the Government and was kept for itself, whereas the assessee had booked the same as an expenses, we observe that as per the provision of Section 2(1)(d) of the Service Tax Rules, 1994 such service tax liability was that of Max Life and not that of the assessee. Therefore underlying amount of service tax which was agreed to be borne by the assessee does not partake the character of service tax liability, but is a contractual arrangement entered into between Max Life Insurance with a view to secure the business of Insurance Auxiliary Services from Max Life. Such expenses should be allowed to the assessee u/s 37 - Assessee s appeal is allowed.

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• 2025 (2) TMI 762
  Assessment of trust - Adjustments contemplated u/s 143(1) - Treatment of corpus donation as voluntary donation by the authorities - HELD THAT:- We are of the considered view that treatment of such corpus donation as voluntary donation falls outside the scope of adjustments contemplated u/s 143(1) unless such incorrect claim is apparent from any information in the return of income. In the return of income filed by the assessee, such donation was specifically treated as corpus donation and not as voluntary donation. Accordingly, in our considered view, treatment of corpus donation as voluntary donation falls outside the scope of adjustments contemplated u/s 143(1) of the Act. Denial of exemption u/s 11 12 - late filing of Form No. 10B - As decided in Shree Swaminarayan Charitable Trust [ 2024 (10) TMI 1635 - ITAT AHMEDABAD] delay in submission of Form No. 10B is a procedural defect and once the said Form has been filed during the course of hearing, no disallowance is called for on account of late / delayed filing of Form No. 10B. In the instant case, we observe that the assessee had filed Form No. 10B before Ld. JCIT(A) before conclusion of appellate proceedings. Thus, exemption u/s 11 12 of the Act cannot be denied to the assessee only on account of late filing of Form No. 10B. Accordingly, in light of the above observations, the appeal of the assessee is allowed.

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• 2025 (2) TMI 761
  Denial of deduction claimed u/s 80IA - contract with Lucknow Metro Rail Corporation Ltd. (LMRCL) - HELD THAT:- The assessee was only awarded the contract for design and construction of tunnel as specified in the tender document and the job of the assessee was over when the construction of tunnel was done as per the design approved. Assessee also does not fulfil the condition that the agreement has to be with Central Government/ State Government / Local Authority/Statutory Authority as LMRCL, does not fit in any of them. It can be seen from the record that LMRCL was incorporated on 25/11/2013 under the Companies Act, 1956 as a special purpose vehicle between the Central and State Government with equity share of 50:50, therefore, in our understanding of the law it cannot be regarded as Central Government or State Government, nor does it fall under the definition of local authority statutory authority. It is trite law that for claiming deduction u/s 80IA(4) all conditions have to be fulfilled cumulatively. No merit in the claim of deduction u/s 80IA of the Act and the lower authorities have not faulted anywhere by denying the same. Since we have dismissed the claim of the assessee u/s 80IA at the very threshold treating the assessee as a contractor, we do not find it necessary to address the issues taken by the AO for denying the impugned claim. Accordingly both the appeals by the assessee are dismissed. Disallowance of legal and professional fees (fees for technical services) paid to Gulemark TPL JV - sole reason for the disallowance is that Gulemark TPL JV, has not rendered the services, therefore, the claim was disallowed u/s 37 - HELD THAT:- As details were supported by copies of bank payment advices for payment made to GLM were legal and professional fees before the AO along with copies of visa of the two employees of GLM visited India from time to time during the tenure of the project for rendering services supported with copy of leave and license agreement wherein concerned employees of GLM are accommodated in India along with vouchers of car hire charges for domestic transfer cost and two employees during the year visit to India. We are of the considered view that the fees for technical services as claimed by the assessee has been incurred for the purpose of business and, therefore, eligible for deduction under section 37 of the Act. AO has never treated the said claim as capital expenditure and has accepted the same as revenue expenditure, therefore, we do not find any reason to interfere with the findings of the CIT(A). Accordingly, appeals of the revenue are dismissed.

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• 2025 (2) TMI 760
  Bogus LTCG - Addition u/s 68 - exemption u/s 10(38) denied - HELD THAT:- Addition made by the AO u/s 68 of the Act in both the years under consideration are devoid of any merit. The claim of the assessee u/s 10(38) of the Act has been made based on facts which could not be rebutted by the AO. The documentary evidences could not be rejected without bringing on record any substantial piece of evidence and just on the basis of certain individuals who also were not produced for cross examination of their stated stands - AO is therefore, directed to delete the additions made u/s 68. Addition on account of estimated commission at the rate of 2% - CIT(A) deleted addition - HELD THAT:- Since we have already decided the issue of LTCG in the foregoing paras and deleted the addition made u/s 68 of the Act, thus holding the share transactions as genuine, the above ground of the Revenue has no merit which is accordingly, dismissed.

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• 2025 (2) TMI 759
  Unexplained cash credit u/s 68 r.w.s 115BBE - HELD THAT:- AO made the addition u/s 68 as unexplained cash credit of the same amount which was accounted in the books as sales. The explanation from a business entity should be on the basis of facts supported by some evidences which will establish that in due course of business, such income could have been generated by the assessee. It is not a case of survey or search, but scrutiny. Thus AO, could have only relied the financials or other evidences supporting the financials to see if the onus is duly discharged. In the instant case the assessee had explained the source as sales, produced the sale bills and admitted the same as revenue receipt. Purchases, sales and the Stock are interlinked and inseparable. We find that primarily the AO has not doubted the sales on the basis of suspicious sales through 221 invoices and that no stock register was maintained. The reasons to suspect the sales merely because of some routine observation of suspicious nature such as making sales of 270 bills in the span of 4 hours, non availability of KYC documents for sales, non writing of tag of the jewellery to the sale bills, non-availability of CCTV footage for huge rush of public etc., were not found to be good enough to make addition u/s 68. Also, the contention of the assessee that due to demonetization, the public became panic and the cash available with them in old denomination notes becomes illegal from 09.11.2016 and made the investment in jewellery, thereby thronged the jewellery shops appear to be reasonable, and deserved due consideration, as done by the Ld. CIT(A). Decided in favour of assessee.

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• Customs

• 2025 (2) TMI 758
  Classification of goods - Lamda Cyhalothrin Technical - be classified under the heading CTH 38089199 ? - Merchandise Exports from India (MEIS) Scrips - HELD THAT:- Having regard to the facts of the present case, especially the fact that the controversy with regard to classification was earlier examined and decided by the Directorate General of Foreign Trade to the effect that the goods, Lamda Cyhalothrin Technical, be classified under the heading CTH 38089199 and, thereupon, it had issued Merchandise Exports from India (MEIS) Scrips, there are no good ground and reason to interfere with the impugned judgment. The appeal is dismissed.

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• 2025 (2) TMI 757
  Classification of imported goods - parts of the shock absorbers to be classified under Customs Tariff Item [CTI] 8714 91 00 or under 8714 10 90? - it was held by CESTAT that Classification of the goods in the order impugned in this appeal under 8714 10 90 needs to be sustained. HELD THAT:- There are no good ground and reason to interfere with the findings recorded by the Customs, Excise Service Tax Appellate Tribunal. Hence, the present appeal is dismissed.

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• 2025 (2) TMI 756
  Entitlement to exemption under N/N. 50/2017 dated 30th June, 2017 - Challenge to provisional attachment order of the bank account of the Petitioner - certain parts of CNG kits in 2017 - subsequant withdrawal of the exemption - HELD THAT:- This Court holds the view that the Customs Department ought to take a decision as to whether there is adequate material before it or not and if they wish to issue a show cause notice the same sought to be done at the earliest. Therefore, the Department is directed to complete the investigation and issue a show cause notice within a period of three months from now. In the meantime, since the demand, which is yet to be computed, seems to be only in the range of Rs. 30 crores and considering the amount of business that the Petitioner is doing, it is directed that the Petitioner shall deposit a sum of Rs. 3 crores as an ad hoc deposit with the Department within a week. The HSBC bank accounts shall be defrozen immediately to enable the Petitioner to deposit within a week, a sum of Rs. 3 crores with the Department. Petition disposed off.

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• 2025 (2) TMI 755
  Implementation of the order dated 29th January, 2024 - release of certain goods belonging to the Petitioner, who had arrived from Paris and had goods detained by the Customs Department - liberty sought by the Petitioner to file an appeal - HELD THAT:- On both counts, the Court has perused the copy of the incomplete appeal which has been served by the Department upon the Petitioner. Clearly, there has been an appeal which has been filed by the Department of which formal notice may yet even be not issued to the Petitioner. Moreover, as per the Petitioner, the appeal has also not been listed till date. Considering these circumstances and the fact that the matter would have to be adjudicated comprehensively by the Commissioner (Appeals), the Petitioner is also permitted to file his appeal within a period of thirty days from now before the Commissioner (Appeals) - If the Petitioner intends to seek implementation of the order dated 29th January 2024, to the extent that permits the deposit of redemption fine and partial release of goods for export under specified conditions, he may seek the same from the Commissioner (Appeals). Let both the Appeals be listed before the Commissioner (Appeals) on 15th April, 2025 for hearing and adjudication in accordance with law. The petition is disposed of.

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• 2025 (2) TMI 754
  Challenge to preventive detention order under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA Act) - Smuggling of foreign gold from Yangoon (Myanmar) to Gaya through Gaya International Airport with the active involvement of Marshal deputed in the flight - petition was in custody in connection with the criminal complaint for the same incident - HELD THAT:- The object of detention under the detention law is not to punish, but to prevent the commission of certain offences. Further, in the recent decision rendered by the Hon ble Supreme Court in the case of Ameena Begum [ 2024 (1) TMI 4 - SUPREME COURT ], it has been specifically held by the Hon ble Supreme Court that a constitutional court, when called upon to test the legality of orders of preventive detention, would be entitled to examine certain aspects referred in paragraph 28.1. to 28.10 of the said decision. In the case of Saraswathi Seshagiri [ 1982 (3) TMI 252 - SUPREME COURT] , the Hon ble Supreme Court has observed that the concerned detenue tried to export Indian Currency to the tune of Rupees 2,88,900.00 to a foreign country in a planned and pre-meditated manner by clever concealment of it in several parts of his baggage and, therefore, the Hon ble Supreme Court observed that the detaining authority was justified in coming to the conclusion that he might repeat his illegal act in future also. His past act in the circumstances might be an index of his future conduct. Thereafter, the Hon ble Supreme Court observed that the authority may prosecute the offender for an isolated act or acts of an offence for violation of any criminal law, but if it is satisfied that the offender has a tendency to go on violating such laws, then there will be no bar for the State to detain him under a Preventive Detention Act. In the case of Rekha [ 2011 (4) TMI 1217 - SUPREME COURT] , the Hon ble Supreme Court has observed that if the ordinary law of the land (the Penal Code and other penal statutes) can deal with a situation, recourse to a preventive detention law will be illegal. The main contention of the petitioner is that criminal complaint has been lodged against him and in connection with the same he was already in custody when the impugned order of detention has been passed. Thus, there was no apprehension on the part of the detaining authority that petitioner will indulge into similar type of activity if he is released on bail. Thus, the subjective satisfaction of the detaining authority is vitiated. The aforesaid contention is misconceived in view of the decision rendered by the Hon ble Supreme Court in the case of Haradhan Saha [ 1974 (8) TMI 104 - SUPREME COURT] and observations made in paragraph 26 in the case of Ameena Begum. Delay in service of the order of detention by contending that the detention order has been passed on 06.03.2024, which was communicated to him on 29.05.2024 - HELD THAT:- From the records, it transpires that the order of detention was passed on 06.03.2024, which was duly executed on the petitioner on 11.03.2024. Thereafter, the petitioner made representation on 04.04.2024 to the detaining authority and the Central Government, which was received on 12.04.2024 and 15.04.2024 respectively, which were duly considered by the concerned authorities and, in the meantime, the case of the petitioner was referred to the Advisory Board on 10.04.2024 and after conducting the proceedings on 29.04.2024 and 13.05.2024, the Advisory Board gave the opinion and opined that the detention of the petitioner is justified. The said opinion has been duly considered by the Central Government and thereafter the Central Government also confirmed the impugned detention order, which was communicated by the Deputy Secretary of the Government of India vide order dated 29.05.2024. Therefore, it cannot be said that the order of detention dated 06.03.2024 was communicated to the petitioner on 29.05.2024. Hence, the said contention is misconceived. Conclusion - The respondent detaining authority has followed all the constitutional, statutory and procedural requirements as well as safeguards. The subjective satisfaction of the detaining authority does not vitiate, as has been contended by the petitioner. Therefore, when the detaining authority after satisfying itself subjectively after considering all the relevant material, passed the impugned order of detention, the same cannot be interfered with while exercising power under Article 226 of the Constitution of India. Petition dismissed.

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• 2025 (2) TMI 753
  Classification of Natural Beta Carotene Powder - classifiable under Tariff item 3203 00 20 of the Customs Tariff Act, 1975 or under Customs Tariff Heading 2106 90 60? - HELD THAT:- Chapter 3203 is meant for Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks which clearly establish the fact that these colouring products are industrial products and not edible products as the case of the impugned product. Hence, the question of classifying the product under Chapter Heading 3203 is ruled out. The supplier s brochure clearly mentions that Beta Carotene is used as colouring matter in a variety of food and beverages applications as it gives bright yellow-orange colour to the food products when it is added. Chapter 2106 9060 which is meant for Food flavouring material is nothing but a product which provides colouring for the food items which are edible, the impugned product being a colouring food agent is specifically covered under this category, hence rightly classifiable under Customs Tariff Heading 2106. The products are rightly classifiable under Chapter Heading 2106 9060, consequently, impugned order is upheld. Conclusion - The product fell under Tariff Heading 2106 as a food flavoring material, specifically for providing color to edible items. Appeal dismissed.

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• 2025 (2) TMI 752
  Classification of imported Power Weeders - to be classified under Chapter Heading 8433 or under Chapter Heading 8432 of the Customs Tariff Act, 1985? - concessional rate of duty - benefit of N/N.12/2012-Cus. dated 17.03.2012 - HELD THAT:- The appellant had filed Bill of Entry No.3675794 dated 29.10.2013 for clearance of 150 sets of Rotary Power Weeder and on investigation, it was found to be Brush Cutters and hence, the benefit of Notification was denied demanding a duty of Rs.3,91,930/- which was paid under protest by the appellant. On further investigation for the period 06.12.2010 to 23.07.2013, similar goods were found to be Brush Cutters which were imported under concessional rate of duty, hence, the differential duty of Rs.26,43,951/- on the past clearances was also confirmed. With regard to past clearances, it is found that Bills of Entry No. 4656425 dated 16.09.2011, 6559041 dated 17.04.2012, 6935540 dated 26.05.2012, 7280139 dated 03.07.2012, the appellant has declared the items as Brush Cutters as also the description was correctly mentioned, therefore, the question of suppression does not arise. In view of the above, there are no reason to sustain the demand beyond the normal period of limitation. Accordingly, the demand is confirmed for the normal period. Regarding confiscation of goods valued at Rs.18,65,268/- is sustained, however redemption fine reduced to Rs.2,00,000/- under Section 125 of the Customs Act, 1962. Since, demand is confirmed for normal period, penalties imposed under Section 114A and Section 114AA is set aside. Penalties imposed under Section 112 and 114AA on Director S.V. Aravind is also set aside. Conclusion - i) Classification of Brush Cutters under Chapter Heading 8467 8990 is upheld. ii) Penalties not imposed due to suppression of facts. iii) Confiscation of goods sustained, redemption fine reduced. Appeal allowed.

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• 2025 (2) TMI 751
  Applicability of Anti-Dumping Duty (ADD) - Origin of imported consignments of PVC Flex Banner - Malaysian origin or Chinese origin - admissibility and reliability of statements and documents provided by witnesses - cross-examination of only one witness allowed, while that of otheres were denied - applicability of section 138B of the Customs Act - HELD THAT:- The entire case has been built up by the investigation on the basis of the statements recorded and documents submitted by these persons. The appellants have questioned the veracity of these documents as the originals of these documents were never given to them. The appellants also submitted that the persons who handed over the documents never disclosed the origin of the documents and from where they got them. Thus, if the Department wanted to rely upon the statements recorded from them and the documents submitted by them, then the Department should have allowed cross examination of all those persons. In stead, cross examination only one person by name Shri Arup Bandhu Guha was conducted. Thus, the statements recorded and documents submitted by all persons, other than Shri Arup Bandhu Guha, are not admissible as evidence in the adjudication proceedings as they have not fulfilled the tests prescribed in Section 138B of the Customs Act, 1962. By relying on the decision of the Hon ble Calcutta High Court in Ajay Saraogi Vs. Union of India [ 2023 (9) TMI 733 - CALCUTTA HIGH COURT ] it is held that the statements given and documents recovered from those persons who have not been cross examined, cannot be relied upon in the adjudication proceedings in this case. Regarding the statements recorded and the documents submitted by Shri Arup Bandhu Guha, whose cross examination was conducted, it is observed that during the cross examination Shri Guha has given vague and unclear answers to the questions put by the appellants. Regarding the origin of the goods, we observe that the appellants have produced AIFTA Certificate of Origin, which was issued by the Ministry of International Trade Industry, Malaysia. It is observed that the investigation has not established that the said Certificates are not genuine. The investigation only alleges that the said certificates have been obtained by influence, but it is observed that the said claims were not supported by any evidence. In all the swift transfer messages, name of the overseas supplier of Malaysia was given. We find that there is no allegation that the money was transferred to supplier appearing in the alleged master bill of lading. The entire payments were remitted to said overseas supplier and there is no evidence that said supplier had not received the payments remitted by the appellants. Thus, the evidences available on record indicate that the Malaysian exporter was the actual beneficiary of the money transfer. The demands of Anti-Dumping Duty, Customs Duty and interest confirmed in respect of all the ten consignments imported by the appellants is legally not sustainable and accordingly, the same are set aside. Since, the demands of duty are not sustainable, the question of imposition of penalties does not arise. Conclusion - The evidences available on record indicate that the goods are of Malaysian origin and thus no Anti-Dumping Duty is payable on the 10 consignments imported by the appellant. The appellant is eligible for the benefit of concessional rate of duty provided under Customs N/Ns.46/2011-Cus. dated 01.06.2011 and 053/2011-Cus. dated 01.07.2011. Appeal allowed.

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• Securities / SEBI

• 2025 (2) TMI 750
  Allegations of violations by a SEBI registered stockbroker - violations have been alleged by the SEBI against the noticees for Misuse of clients funds, Funding the clients beyond T+2+5 days and Not issuing the contract notes. HELD THAT:- As recorded in the impugned order that during the inspection, it was noted that funds of credit balance clients were being utilized for settlement obligation of debit balance clients. In all 41 instances were checked and in 31 instances misutilization was observed ranging between Rs. 88,000 to Rs. 2.48 crores. Some of the instances have been tabulated and reproduced in paragraph No.21 of the impugned order. It is also recorded in paragraph No.22 that Noticee No.1 has brought in Rs. 1 crore into the system in October, 2020. Though a sum of Rs. 1 crore was infused in October, 2020 the G value was still negative for March, 2021 ranging between Rs. 66.35 Lakhs to Rs. 88,000. It is not denied by the appellant that the G value was negative as recorded in the tabular column in paragraph No.21 of the impugned order. Second charge is providing exposure beyond T+2+5 days. This charge is also not denied but an explanation is sought to be urged that appellant was unable to detect the over exposure because of a bug in the computer system. It is also not denied that the over exposure was about Rs. 39.13 Lakhs as described in the table in paragraph No.46. Third charge is non-issuance of contract notes. Appellant has furnished an excel sheet containing a column with regard to the status of delivery of the contract notes. As urged by the learned Advocate for the appellant that there is no specific provision to convey the proof of delivery of contract notes to the respondent. To a pointed query as to whether there exists any provision requiring the stock broker to furnish the proof of delivery of contract notes on a regular basis, on instruction it was submitted by Shri Kanade that no such provisions exists. Therefore, in our considered view, the third charge is untenable. We may hasten to record that SEBI as a Regulator must treat all brokers with even hand. It is not disputed that in the case of Angel Broking where the misutilization of funds was to the extent of Rs. 32.97 crores, the penalty imposed is Rs. 10 Lakhs. In the instant case, as noted in paragraph No.25 of the impugned order, misutilization is in the range of Rs. 42.47 Lakhs to Rs. 2.08 crores (Rs.99 Lakhs). Quantum of exposure beyond T+2+5 days(charge No.2) is also Rs. 39.13 Lakhs. Therefore, having regard to the undisputed facts, in our view, appellant s case merits consideration only with regard to the doctrine of proportionality. Considering the quantum of penalty imposed in the case of Angel Broking Ltd., and also keeping in view that noticee No.1 is a repeat offender , ends of justice would be met by reducing the penalty to Rs. 15 Lakhs.

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• Insolvency & Bankruptcy

• 2025 (2) TMI 749
  Approval of the Resolution Plan - Section 30(2) of the IBC - HELD THAT:- The financial creditors having been given the right to proceed against the personal guarantor for the balance liability, it is always open for the financial creditor to proceed against the personal guarantor/ corporate guarantor that being the approved clause of Resolution Plan, Appellant cannot be heard to say anything against that. One more ground which has been taken in the appeal is that after the commencement of the insolvency proceeding against the Appellant against the personal guarantor w.e.f. 01.03.2024, Appellant has not been invited to participate in the meeting of the CoC. In the present case, Appellant has not pleaded that in the CoC meeting which was held subsequent to 01.03.2024 there was no representation of the suspended director of the corporate debtor. The personal insolvency having been commenced on 01.03.2024 not allowing participation of the Appellant cannot be said in any manner affect the meeting of the CoC where it is not even pleaded that suspended management was not invited to participate. It is not the case of the Appellant that the Resolution Plan submitted by the SRA is not compliant of Section 30(2) of the IBC. The jurisdiction of the Adjudicating Authority and this Tribunal to interfere with the commercial wisdom of the CoC is too limited and the Adjudicating Authority and this Tribunal can interfere with approval of the Resolution Plan only when plan is not in compliance of Section 30(2). Conclusion - There are no grounds to interfere with the Adjudicating Authority s approval of the Resolution Plan. Approval of a Resolution Plan does not discharge a personal guarantor s liabilities. There are no ground to interfere with the impugned order. There is no merit in the appeal. The Appeal is dismissed.

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• PMLA

• 2025 (2) TMI 748
  Seeking grant of discharge/bail - Money Laundering - proceeds of crime - Resolution Professional is a public servant under Prevention of Corruption Act, 1988 or not - demand of bribe - all the conditions as stipulated under Section 3 of the PML Act, 2002 read with Section 2 (1) (u) of the PML Act, 2002 are satisfied or not - HELD THAT:- The proceeds of crime means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad - In the explanation it has been referred that for removal of doubts, it is hereby clarified that proceeds of crime include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. The explanation has been inserted in the statute book by way of Act 23 of 2019. The reason for giving explanation under Section 2 (1) (u) is by way of clarification to the effect that whether as per the substantive provision of Section 2 (1) (u), the property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country but by way of explanation the proceeds of crime has been given broader implication by including property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. It is settled connotation of law that at the stage of framing of charge, the probable defence of the accused is not to be considered and the materials, which are relevant for consideration, are the allegations made in the First Information Report/complaint, the statement of the witnesses recorded in course of investigation, the documents on which the prosecution relies and the report of investigation submitted by the prosecuting agency. The probative value of the defence is to be tested at the stage of trial and not at the stage of framing of charge and at the stage of framing of charge minute scrutiny of the evidence is not to be made and even on a very strong suspicion charges can be framed. The Hon ble Apex Court in the case of Palwinder Singh Vs. Balvinder Singh others [ 2008 (10) TMI 742 - SUPREME COURT] has been pleased to hold that charges can also be framed on the basis of strong suspicion. Marshaling and appreciation of the evidence is not in the domain of the court at that point of time. Further it is pertinent to mention here that power to discharge an accused was designed to prevent harassment to an innocent person by the arduous trial or the ordeal of prosecution. How that intention is to be achieved is reasonably clear in the section itself. The power has been entrusted to the Sessions Judge who brings to bear his knowledge and experience in criminal trials. Besides, he has the assistance of counsel for the accused and Public Prosecutor. He is required to hear both sides before framing any charge against the accused or for discharging him. Whether the evidence which has been collected in course of investigation and has been brought on record, as would be available in the impugned order prima facie case against the petitioner is made out or not? - HELD THAT:- Sub-section (v) of Section 2(c) of the Prevention of Corruption Act defines public servant. Further it is the nature of a duty, not an individual s position, that discloses whether or not the person carrying it out is a public servant. Under the Prevention of Corruption Act the concept was to replace the notion of conventionally recognized public officials with those who carry out public duties - Further it is evident from the record that earlier the petitioner had preferred the Criminal Miscellaneous Petition being Cr.M.P. No. 1048 of 2021 for quashing of entire criminal proceeding arising out of the instant case, instituted against the petitioner including the F.I.R. being R.C.1(A)/2020-D, CBI, ACB, Dhanbad for the offence under Section 7 of Prevention of Corruption Act, 1988 by raising the similar ground which has been raised herein that petitioner is not a public servant within the meaning of Section 2(c) of the Prevention of Corruption Act, 1988 or under Section 21 of the IPC therefore charges under Prevention of Corruption Act cannot be alleged against him. The learned Single Judge of this Court has categorically held that Resolution Professional is made during the resolution process before the Company Law Tribunal with its approval, he will be a public servant under Section 2(c)(v) of the P.C. Act - This Court is of the view that since the duties performed by RP are public in nature, they are public servants and Sec 2(c) of Prevention of Corruption Act is pretty clear that an individual who performs public duties are public servants for the purpose of the Act and hence, the legislature would have felt that there are no explicit provisions are required. The Resolution Professional will not come within the meaning of Public Servant under Section 2 (c) of the PC Act is not tenable in the eyes of law. Discharge application - HELD THAT:- The expression money-laundering , ordinarily, means the process or activity of placement, layering and finally integrating the tainted property in the formal economy of the country. However, Section 3 has a wider reach. The offence, as defined, captures every process and activity in dealing with the proceeds of crime, directly or indirectly, and not limited to the happening of the final act of integration of tainted property in the formal economy to constitute an act of money-laundering. This is amply clear from the original provision, which has been further clarified by insertion of Explanation vide Finance (No. 2) Act, 2019, Section 3, as amended. The law regarding the approach to be adopted by the court while considering an application for discharge of the accused persons under Section 227 and approach while framing charges under Section 228 of the Code, is that while considering an application for discharge of the accused under Section 227 of the Code, the Court has to form a definite opinion, upon consideration of the record of the case and the documents submitted therewith, that there is not sufficient ground for proceeding against the accused. However, while framing charges, the Court is not required to form a definite opinion that the accused is guilty of committing an offence. The truth of the matter will come out when evidence is led during the trial. Once the facts and ingredients of the Section exist, the court would presume that there is ground to proceed against the accused and frame the charge accordingly and the Court would not doubt the case of the prosecution. It appears that the complaint contains material evidences for prosecution, thus, the petitioner has to prove her innocence by undergoing the trial therefore, the aforesaid contention of the learned counsel for the petitioner that the alleged money which has been allegedly trapped from this petitioner was under deemed custody of CBI (ACB), and the petitioner was never put in possession of the alleged cash, which is said to have been recovered from the possession of the petitioner, therefore alleged offence is not made out, cannot be adjudicated herein in the light of aforesaid discussion and settled position of law - there is no reason to believe by this Court that the petitioner is not involved in the alleged offence. This Court is of the view, that in such a grave nature of offence, which is available on the face of the material, applying the principle of discharge wherein the principle of having prima facie case is to be followed, the nature of allegation since is grave and as such, it is not a fit case to allow the application for discharge. Conclusion - i) A Resolution Professional, due to the nature of their duties, qualifies as a public servant under the Prevention of Corruption Act, 1988. ii) The petitioner s actions, as alleged, constituted money laundering under Section 3 of the PMLA, given the acquisition and possession of proceeds of crime. iii) At the discharge stage, the court must assume the prosecution s evidence to be true and determine if a prima facie case exists, without delving into the probative value of the evidence. The petitioner s application for discharge dismissed.

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• 2025 (2) TMI 747
  Money Laundering - proceeds of crime - alleged transfer of public funds, by way of fraudulent transactions - Appellant Bank, as a victim of fraud, has a legitimate claim over the attached properties that were mortgaged to it by Vijay Kumar Kushwaha and others or not - HELD THAT:- The properties which have been attached by the Respondent Directorate in exercise of powers under section 5 of the PMLA, 2002 were, admittedly, already under mortgage with the appellant bank. The Appellant Bank has argued that it is the victim of a fraud and has the first charge over the property. As such, it is entitled to appropriate the properties in view of the charge created on the properties in its favour. The Appellant has inter alia placed reliance on the judgement titled Deputy Director, Directorate of Enforcement. Delhi v. Axis Bank [ 2019 (4) TMI 250 - DELHI HIGH COURT] . The underlying issue is squarely covered by the judgement of this Appellate Tribunal in the case of JM Financial Asset Reconstruction Company Ltd. [ 2024 (4) TMI 1228 - APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI] where it was held that the interference in the order of the attachment order, on a challenge by the financial institution, should not be persuaded by the sentiments and only on the ground that once there is a mortgage of the property, it should go to the financial institution. Conclusion - The attachment under PMLA is lawful and does not transfer title unless the property is confiscated. The rights of financial institutions are protected under Section 8(8), and they may pursue their claims in accordance with the provisions of PMLA. Appeal dismissed.

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• 2025 (2) TMI 746
  Money Laundering - proceeds of crime - challenge to Provisional Attachment Order - mala fide intention to misappropriate the fund - withdrawing and utilizing funds without knowing the actual source and without receiving confirmation from the Council - non-recording of satisfaction by the respective authorities - Properties purchased much before the alleged predicate offence - Amount in question had been utilized fully by the appellant in the month of April 2008 itself for the purposes of their business, more particularly, for payment of vehicle loan, overdraft facility, payment to labourers etc. Non-recording of satisfaction by the respective authorities - violation of sections 5 and 8 of PMLA - HELD THAT:- The authority has merely repeated the language of the statute and has not arrived at any independent satisfaction to the fact that the offence of money laundering has been committed under section 3 and if the property was not attached immediately, the proceedings under the Act will be frustrated. The decisions of the Hon ble Punjab and Haryana High Court in Seema Garg v. Deputy Director, Directorate of Enforcement [ 2020 (3) TMI 460 - PUNJAB HARYANA HIGH COURT ], and the judgment of the Hon ble Delhi High Court in J. Sekar v. Union of India Ors. [ 2018 (1) TMI 535 - DELHI HIGH COURT ] are relied upon. It is also contended that though the judgment in the latter case has been stayed by the Hon ble Supreme Court, as per the settled legal position, its ratio would continue to apply. There are no substance in the contention of the appellants that the condition u/s 5(1) of recording the reasons was not met. It is found that detailed reasons for the action initiated under the provision have been recorded by the respondents before initiating the action. As regards, the reasons under section 8, it is seen that the language of the said provision is different insofar as section 8 does not specifically lay down that the reasons to believe are to be recorded or that there should be any material in possession, other than the original complaint filed by the Directorate under section 5(5). Nor does the provision specifically necessitate recording of the reasons in writing. There are no sufficient grounds to hold that the actions taken under sections 5 and 8 were not valid for want of recording of reasons (which were duly recorded) or on account of non-communication of the reasons by the relevant authorities. Properties purchased much before the alleged predicate offence - HELD THAT:- The Canara Bank was impleaded as respondent in the present case vide an order dated 04.12.2018 based on the finding that the Canara Bank was Defendant No. 7 in the complaint and the subject properties had been mortgaged with the Bank. With its reply on 31.01.2019 the Bank had submitted copies of the title deeds of the properties standing in the name of the appellants herein which had been offered as securities to the Bank. The same were taken on record. In subsequent proceedings, it was submitted on behalf of the Bank that the loan account has since been closed and the Bank has no further interest in the case. Accordingly, there are no issues pending for decision before this Appellate Tribunal in the present case in so for as Respondent No. 2 (Canara Bank) is concerned - thus, the subject properties have been attached by the respondents in the present case as value of proceeds of crime. Amount in question had been utilized fully by the appellant in the month of April 2008 itself for the purposes of their business, more particularly, for payment of vehicle loan, overdraft facility, payment to labourers etc. - HELD THAT:- The present position is that a charge sheet dated 21.01.2011 stands filed against the two appellants herein along with Shri Depolal Hojai and Shri Dabiruz Jaman, in the Court of Special Judge, CBI, Assam, Guwahati. Though the appellants have moved the Hon ble Gauhati High Court for quashing of the Special Case filed against them under Sections 3 and 4 of PMLA, 2002, the said petition of the appellants is still pending before the Hon ble High Court. Further, as clarified by both parties in the hearing held on 08.01.2025, prosecution complaint under the PMLA, 2002, also stands filed against the accused persons in this case. Proceedings in the prosecution case under the PMLA, 2002, have been stayed by the Ld. Special Judge following the stay granted by the Hon ble Guwahati High Court - at this stage, when the criminal trial of the appellants herein is still pending before a court of competent jurisdiction, even the balance of interests lies in favour of continued attachment of the subject properties. The same by itself does not disturb the ownership title of the appellants and does not deprive them of possession and enjoyment of the same. Thus, so long as the source of the money is alleged to be proceeds of crime within the meaning of the Act, it can be attached by the respondents regardless of whether the appellants herein themselves stood charged of any scheduled offences or the prosecution complaint filed under the PMLA, 1999 or not. In the present case, as already noted, the appellants have been named in the prosecution case filed under the PMLA, 2002. However, even if they were not accused in the PMLA case, the properties could have been attached so long as there was evidence to indicate that alleged proceeds of crime traveled from one or more persons who are so accused. Conclusion - i) The procedural requirements under sections 5 and 8 of the PMLA, 2002, were met, and the attachment of properties was valid. ii) The properties acquired before the alleged crime can be attached if they represent the value of the proceeds of crime, following the three-limb definition of proceeds of crime. iii) The retrospective application of the PMLA, 2002, is constitutionally valid, as the attachment is a civil action. Appeal dismissed.

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• Service Tax

• 2025 (2) TMI 745
  Exemption from service tax - services rendered to a Governmental authority - providing services of work contract services - providing services of laying of cable under or along side the road under the National Optical Fibre Undertaking (NOFN) Project - HELD THAT:- The Customs, Excise Service Tax Appellate Tribunal, New Delhi took the view that the appellant is not entitled to seek exemption under the Notification which it sought to rely upon. This is a fit case to remand the matter to the original authority only for the purpose of recalculation of the demand extending the benefit of cum-tax on the gross amount charged by the appellant. Issue notice returnable after four weeks.

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• 2025 (2) TMI 744
  Invocation of Extended period of limitation - no intent to evade payment of service tax - whether there is any error apparent on the face of the record to review the judgment? - it was held by High Court that there is no error apparent on the face of the record, and also there are no grounds to review the judgment, therefore the review petition stands disposed of. HELD THAT:- The penalties imposed by the Department in the peculiar facts and circumstances of these cases deserve to be waived and are waived, accordingly. Appeal allowed.

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• 2025 (2) TMI 743
  Rejection of refund claim of accumulated Cenvat Credit - rejection on the ground that since opening balance in ST-3 return for the period April 2015 to September 2015 was Nil , hence credit was never availed in returns and consequently there is no question of refund - HELD THAT:- Apparently, the refund claim was filed by the Appellant in terms of Rule 5 of the CENVAT Credit Rules, 2004 and sub-rule (1) of Rule 5 provides that refund of CENVAT credit shall be allowed subject to procedure, safeguards, conditions and limitations as may be specified by the Board by notification in the Official Gazette. A perusal of Rule 5 nowhere indicates that the same provides disclosure of balances of CENVAT credit in ST-3 return as the condition precedent for claiming refund of credit. There is nothing in Rule 5 to assume that if credit was validly availed but not disclosed in ST-3 return, the same would prohibit the refund of credit. In exercise of powers conferred under Rule 5(1), Notification No.27/2012-CE(N.T.) dated 18.06.2012 has been issued specifying the safeguards, conditions and limitations and also the procedure for filing the refund claim - clause 2(g) has to be read as it is without any addition or subtraction of words and clause 2(g) cannot be interpreted on any presumption or assumption that balance has to be considered as the amount shown as closing balance in ST-3 return. The interpretation to the contrary placed in the impugned order is therefore clearly erroneous and is not flowing from a plain reading of clause 2(g) of the notification - clearly clause 2(g) of the notification has been incorrectly interpreted in the impugned order and rejection of refund claim on this ground is not sustainable. Both the parties are ad-idem to the fact that no objection has been raised by the Revenue to the revised return for the subsequent period Oct 2015 to March 2106 showing the same opening balance as disclosed by the Appellant in corrigendum for the period April 2015 to Sep 2015 - It is not disputed before me that by the time the Appellant realised the mistake, the time period for revising the return got expired and therefore the Appellant cannot be expected to perform an impossible task. Thus, there are no reasonable reason for not extending the benefit of the corrigendum to the Appellant. As regards finding in the adjudication order regarding taking credit within a period of one year, it is found that the said finding has been recorded only on the ground that the amount of credit was not disclosed by the Appellant in ST-3 return for the period April 2015 to Sep 2015. The adjudicating authority appears to have misguided himself by taking a view that credit is taken by declaring the amount of credit in ST-3 return. On the contrary, credit is always taken in account books and/or other statutory records. The disclosure of opening/closing balance of credit and utilised amount of credit in ST-3 may be a condition required to be complied by a taxpayer, but the same by itself is not a condition to claim credit. There is absolutely no finding in the adjudication or appeal order that the invoices in question were issued prior to period of one year. no adverse finding has been recorded by the two authorities and therefore the submission to the contrary made by the Ld. A.R. deserves to be rejected. Conclusion - i) Substantive benefits cannot be denied on technical grounds, such as non-disclosure in ST-3 returns. ii) Clause 2(g) of Notification No. 27/2012-C.E should be interpreted based on the actual balance, not the disclosed balance in ST-3 returns. iii) The Adjudicating Authority is directed to sanction the refund claim in accordance with the law. Appeal allowed.

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• 2025 (2) TMI 742
  Valuation of service tax - inclusion of charges collected by the appellant, apart from service charges, in the gross taxable value for the purpose of service tax under Section 67 of the Finance Act, 1994 - Pure Agent under Rule 5(2) of the Service Tax (Determination of Value) Rules, 2006 - invocation of extended period of limitation - HELD THAT:- The issue is no more res-integra in view of the decision of the Honourable Supreme Court in the case of UOI v Intercontinental Consultants and Technocrats Pvt Ltd, [ 2018 (3) TMI 357 - SUPREME COURT] which has considered the issue of liability to pay service tax on reimbursable expenses received by the service provider in the course of rendering services for the client, apart from the consideration received for rendering the services on which the client has discharged the liability to pay service tax. The Honourable Supreme Court affirmed the decision of the Delhi High Court in Intercontinental Consultants Technocrats Pvt Ltd v UOI, [ 2012 (12) TMI 150 - DELHI HIGH COURT] , wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was stuck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections. Conclusion - The service tax should be levied only on the actual consideration for the service provided, excluding reimbursable expenses unless legislatively amended. The impugned order is set aside - appeal allowed.

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• Central Excise

• 2025 (2) TMI 741
  Area Based Exemption - Denial of benefit of central excise duty exemption under N/N. 01/2011-CE dated 01.03.2011, as amended by Notification dated 17.03.2012 - Invocation of extended period of limitation - suppression of facts or not - whether the provisions of section 11A(4) of the Central Excise Act dealing with the invocation of the extended period of limitation could have been invoked? - HELD THAT:- In the present case, all that has been stated in the show cause notice regarding invocation of the extended period of limitation is that the appellant wrongly availed the benefit of the Exemption Notification deliberately with the sole intent to evade payment of central excise duty. The Commissioner also held that there was an intent to evade payment of central excise duty merely because the benefit of the Exemption Notification was wrongly availed - Mere wrong availment of an Exemption Notification would not lead to a conclusion that it was with an intent to evade payment of central excise duty unless the department is able to not only allege but substantiate that the said suppression was deliberate with an intent to evade payment of central excise duty. The provisions of section 11A of the Central Excise Act, as it then stood, came up for interpretation before the Supreme Court in Pushpam Pharmaceuticals Company vs. Collector of Central Excise, Bombay [ 1995 (3) TMI 100 - SUPREME COURT ]. The Supreme Court observed that the proviso to section 11A empowers the Department to reopen the proceedings if levy has been short levied or not levied within six months from the relevant date but the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of which is suppression of facts. It is in this context that the Supreme Court observed that the act must be deliberate to escape payment of duty. In Easland Combines, Coimbatore vs. Collector of Central Excise, Coimbatore [ 2003 (1) TMI 107 - SUPREME COURT ] the Supreme Court observed that for invoking the extended period of limitation, duty should not have been paid because of fraud, collusion, wilful statement, suppression of fact or contravention of any provision. These ingredients postulate a positive act and, therefore, mere failure to pay duty which is not due to fraud, collusion or wilful misstatement or suppression of facts is not sufficient to attract the extended period of limitation. It is, therefore, clear that the suppression of facts should be deliberate and in taxation laws it can have only one meaning, namely that the correct information was not disclosed deliberately to escape payment of duty. The show cause notice issued to the appellant, however, merely mentions that the appellant wrongly availed the benefit of the Exemption Notification with intent to evade payment of central excise duty. It does not elaborate why the appellant intended to evade payment of duty - in the absence of any intent by the appellant to evade payment of service, the extended period of limitation under section 11A(4) of the Central Excise Act could not have been invoked. The contention of the appellant is also that it bona fide believed that it was entitled to avail the benefit of the Exemption Notification and it cannot be said that the belief of the appellant is mala fide merely because it may ultimately be held that the appellant is not entitled to the benefit of the Exemption Notification. This contention deserves to be accepted. It also needs to be noticed that in the present case three Audits had been conducted. The first Audit was conducted in March 2016 for the period from April 2011 to March 2015. All the relevant facts were disclosed by the appellant and even otherwise the Audit Team could have required the appellant to provide all the information. No infirmity was found by the Audit Team and the Audit Team gave a Fair Audit Report to the appellant - The Department, therefore, cannot allege that the appellant had suppressed any facts. The show cause notice could have been issued within the normal period contemplated under section 11A(1) of the Central Excise Act but it was issued only on 26.06.2020. The appellant had also been regularly filing the excise returns. The Commissioner observed that mere filing of the returns does not mean any kind of approval or validation by the department since in an era of self-assessment, the party has to correctly disclose the facts. Conclusion - The extended period of the limitation could not have been invoked in the facts and circumstances of the case. The entire period covered under the show cause notice is for the extended period of limitation. The impugned order would, therefore, have to be set aside for the sole reason that the extended period of limitation contemplated under section 11A(4) of the Central Excise Act could not have been invoked. The impugned order dated 30.09.2021 passed by the Commissioner is, accordingly, set aside and the appeal is allowed.

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• 2025 (2) TMI 740
  CENVAT Credit - input service or not - service tax paid on payment of penalty on pre- payment of loan - Rules 2(l), 3 of the CENVAT Credit Rules, 2004 - HELD THAT:- On perusal of the impugned order, it transpires that the disputed service of foreclosure charges or pre-payment premium had been considered as not part of banking and other financial service and thus the service tax paid thereon has been considered as not eligible for availing as CENVAT Credit. However, at one another place, the order states that the disputed service could be considered as declared service . Therefore, to the extent of such inconsistency with the other findings of the impugned order and inasmuch as this disputed issue had already been decided by the Larger Bench of the Tribunal, it is not found the impugned order as correct. Therefore, such findings, which do not find a bearing on the final decision ordered by the learned Commissioner (Appeals) in the impugned order are not taken up for examination. On initial reading, it may appear that the pre-payment premium or foreclosure charges forms part of the financial arrangements of availing loan by the appellants from the banks. However, since there is no separate or distinct service being offered by such banks for taking the pre-payment premium, it would be correct to state that these are not related to the service of financing the loans, which the appellants have taken from these consortiums of banks. Rather, it is clear that those banks are compensating themselves for the loss of interest, which otherwise would have been paid by the appellants in the normal course of financing arrangement as per agreed contract, if the prepayment was not effected by the appellants. Hence, the factual matrix of the case clearly reflects that the prepayment premium paid by the appellants do not have any relation to the financing services availed from the banks. This aspect of the financial arrangements have been discussed at length by Larger Bench of the Tribunal in the case of Commissioner of Service Tax, Chennai Vs. Repco Home Finance Ltd. [ 2020 (7) TMI 472 - CESTAT CHENNAI ], wherein it has been held that service tax cannot be levied on the foreclosure charges levied by the banks and non-banking financial companies on premature termination of loans under the taxable category of banking and other financial services as defined under Section 65(12) of the Finance Act, 1994. Conclusion - The disputed CENVAT credit taken on input services of foreclosure charges or pre- payment premium and availed by the appellants, is not admissible as CENVAT benefit to the appellants, inasmuch as there is no service tax payable on such services which could be considered as permissible credit in terms of Rule 3 of the CENVAT Credit Rules, 2004. The appeal filed by the appellants is dismissed.

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• CST, VAT & Sales Tax

• 2025 (2) TMI 739
  Refund of excess amount realized by Respondents in terms of Settlement Scheme of 2022 - Dismissal of Jharkhand Karadhan Adhiniyamon Ki Bakaya Rashi Ka Samadhan Act, 2022 - rejection of exemption from payment of additional tax and surcharge - HELD THAT:- A perusal of Settlement Scheme would reveal that under Settlement Scheme, term admitted tax is defined to mean an amount of tax admitted as being payable as per the return filed by an assessee, and, the term disputed amount means the amount of tax, interest or penalty which determined as payable by an assessee pursuant to an order of assessment/re-assessment/scrutiny or any other order and which is not admitted, and, for such demand, a litigation has been filed by an assessee - under the Scheme, amount of admitted tax clearly represents an amount which is admitted by assessee, whereas disputed amount means amount of tax, interest or penalty which is in dispute pursuant to a litigation filed by an assessee. The Scheme clearly provides that assessee is liable to pay 40% of the amount of tax in dispute provided the same has not been declared/considered in any order/assessment/re-assessment. In the present case, it is not in dispute that the petitioner admitted an amount of Rs. 33,79,374/- being the admitted amount of tax payable by it as per its return. However, pursuant to an adjudication order, an amount of Rs. 6,27,82,418/- was determined against the petitioner - balance between disputed tax and admitted tax was the amount in dispute i.e. in the present case Rs. 5,94,03,043/-. Under the Scheme, Petitioner was only liable to deposit 40% of the disputed amount and there was 60% waiver, but while computing the tax liability, Settlement Officer first deducted the amount of pre-deposit from the amount in dispute and, thereafter, extended the benefit of waiver under the scheme which is clearly travelling beyond the contours of the scheme itself. Admittedly, Settlement Scheme is a beneficial scheme and Hon ble Supreme Court in its judgment rendered in the case of Government of Kerala and Another v. Mother Superior Adoration Convent [ 2021 (3) TMI 93 - SUPREME COURT] , has held that even in tax statutes, exemption provisions should be liberally considered in accordance with the object sought to be achieved. In a beneficial legislation, literal formalistic interpretation should be eschewed to give full effect to the provisions of the beneficial legislation. The impugned order passed by the appellate authority is set aside and, further, order of settlement to the extent, amount of pre-deposit of 49,00,000/- has been directed to be adjusted from the amount in dispute before extending the benefit of settlement is set aside. Conclusion - i) The calculation of tax liability under the Settlement Scheme must not deduct pre-deposits from the disputed amount before applying the waiver. ii) The petitioner is entitled to a refund of the excess amount paid due to the misapplication of the Scheme. iii) The petitioner is entitled to interest on the refunded amount at 6% per annum from the date of deposit until the refund is made. Petition disposed off.

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• 2025 (2) TMI 738
  Jharkhand Karadhan Adhiniyamon Ki Bakaya Rashi Ka Samadhan Act, 2022 (Amnesty Scheme) - Computation method of settlement amount - amount of pre-deposit was first adjusted against the disputed amount and upon remaining balance, waiver of 60% and 50% of tax respectively was extended to petitioner - HELD THAT:- A perusal of Settlement Scheme would reveal that under Settlement Scheme, term admitted tax is defined to mean an amount of tax admitted as being payable as per return filed by an assessee, and, the term disputed amount means the amount of tax, interest or penalty which is determined as payable by an assessee pursuant to an order of assessment/re-assessment/scrutiny or any other order and which is not admitted, and, for such demand, a litigation has been filed by an assessee - Thus, under the Scheme, amount of admitted tax clearly represents an amount which is admitted by assessee, whereas disputed amount means amount of tax, interest or penalty which is in dispute pursuant to a litigation filed by an assessee. The difference between disputed tax and admitted tax was the amount in dispute and under the scheme, petitioner was entitled for waiver of 60% and 50% respectively, but while computing the tax liability, Settlement Officer first deducted the amount of pre- deposit from the amount in dispute and, thereafter, extended the benefit of waiver under the scheme which is clearly travelling beyond the contours of the scheme itself. The petitioner is right in contending that due to incorrect application of Settlement Scheme, petitioner is denied its actual benefit which resulted into a loss of Rs. 1,32,03,446/- (Rs. 1,33,42,802-1,39,356). However, before the appellate authority, petitioner filed its revised computation taking into consideration the component of declaration form and claimed as per revised computation an amount of Rs. 1,18,02,056/- as refund. Hence, we are of the opinion that petitioner cannot take a different stand than what it has taken in the appellate proceedings and it can only be entitled for refund as per the revised computation submitted before the appellate authority of an amount. Settlement Scheme is a beneficial scheme and Hon ble Supreme Court in its judgment rendered in the case of Government of Kerala and Another v. Mother Superior Adoration Convent [ 2021 (3) TMI 93 - SUPREME COURT ], has held that even in tax statutes, exemption provisions should be liberally considered in accordance with the object sought to be achieved. In a beneficial legislation, literal formalistic interpretation should be eschewed to give full effect to the provisions of the beneficial legislation. Conclusion - Under the Amnesty Scheme, the waiver should be applied to the full disputed amount before deducting any pre-deposit. This ensures that taxpayers who have made partial payments are not disadvantaged compared to those who have not paid. The petitioner is entitled to a refund of Rs. 1,18,02,056/- with interest at 6% per annum from the date of deposit until the refund is made. Petition allowed.

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• Indian Laws

• 2025 (2) TMI 737
  Recovery of deficit stamp duty and penalty - whether the appellant is liable to pay stamp duty and penalty on the agreement to sell dated 03.09.2003 allegedly executed between the appellant and the mother of Respondent No.1 in respect of the suit property? - HELD THAT:- In the instant case, the agreement to sell executed between the appellant and mother of the Respondent No.1, specifically states that this property is in your occupation on rental basis and it will not be part of the sale transaction. After completion of sale transaction, the possession of the said property will be given to you on the ownership basis. This makes it very clear that the suit property was occupied by the appellant on a rental basis and it would not be a part of the sale transaction. Further, there was a clause, by which, timeline was given for execution of sale deed. Since the possession was admittedly given to the appellant even before the date of agreement, implying acquisition of possessory rights protected under Section 53A of the Transfer of Property Act, the same requires payment of proper stamp duty. The agreement to sell includes a clause stating that physical possession had already been handed over to the appellant, regardless of the basis of such possession. This satisfies the requirement to treat the instrument as a conveyance within the meaning of Explanation I to Article 25 of Schedule I of Bombay Stamp Act, with only the formality of executing the sale deed remaining. Pertinently, it is to be pointed out that the appellant filed a suit for specific performance of the agreement to sell against the respondents; Respondent No.1 filed a suit seeking eviction of the appellant from the subject property; and both the suits are pending, which clearly establish the possession of the property by the appellant. Therefore, the said document is liable for payment of stamp duty at the hands of the appellant. The Courts below impounded the document and directed the same to be sent to the Registrar of Stamps for recovery of deficit stamp duty and penalty as per law, by the orders impugned herein, which is perfectly correct. However, it is made clear that as per the second proviso to Article 25, if the stamp duty is already paid or recovered on the agreement to sell, then, the same shall be deducted while computing the stamp duty payable, when the sale deed is executed; and the recovery shall be restricted only to the extent of difference in stamp duty and the entire penalty from the date of execution of the agreement to sell till the date of payment of stamp duty. Conclusion - The agreement to sell, which involved possession, is a conveyance for stamp duty purposes under Explanation I to Article 25 of Schedule I of the Bombay Stamp Act. The duty is on the instrument, and possession, whether current or agreed, triggers the duty. There are no reason to interfere with the orders passed by the Courts below - appeal dismissed.

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• 2025 (2) TMI 736
  Exemption from Property Tax to educational institutions operated by registered charitable trusts and registered u/s 12A - Investigation of objections by Commissioner u/s 148 of Municipal Corporation Act, 1956 - as submitted clear statutory provision u/s 136 (c) of Municipal Corporation Act, 1956 has exempted all the educational institutions run and operated by charitable trusts, educational institutions, which are registered u/s 12A of the Income Tax Act, 1961 and the said institution is wholly exempted for the payment of property tax and other educational institutions may be given a rebate of up to fifty per cent of the property tax - as submitted there is a efficacious alternative remedy available to the petitioner in terms of Section 184 of Municipal Corporation Act, 1956 which provides appeal against any notice of demand issued under subsection (1) of section 174, without availing such efficacious alternative remedy, there is no reasonable justification to the petitioner to directly approach the High Court. HELD THAT:- Petitioner No. 3/educational institution continuously raised the objection, the said institution is under the exempted category under Section under Section 136 (c) of Municipal Corporation Act, 1956 and there is a specific procedure if any such objection has been raised about the valuation of the property tax that the Commissioner shall give a notice in writing to the objector of the time and place at which his objection will be investigated and after giving the opportunity of personal hearing to the objector, any such objection has been determined, when a query has been put to the learned Senior Counsel, from the record, it is explicit that no such procedure has been followed, though the legislature in clear terms mandated to fix the time and place to hear the objection. This Court finds appropriate to direct the competent authority/Respondent No. 1/ Commissioner, Municipal Corporation, Bhilai to decide the objection raised by the petitioner No. 3/educational institution in terms of procedure stipulated under Section 148 of Municipal Corporation Act, 1956 (hereinafter referred to as 1956 Act ) and it is further expected from the said authority that if any document is required from the authority of the income tax, reasonable time of at least eight weeks must be given to the petitioner No. 3/educational institution to obtain any such certificate from the competent authority. This Court makes a serious note that though the objection has been raised for more than a decade, but no proper speaking order has been passed and the matter has not been finally determined. So, it is expected from the authority to decide the issue in an expeditious manner and pass a fresh speaking order preferably within an outer limit of 06 months. Till such adjudication, no coercive steps shall be taken for the earlier notices and the same shall be kept in abeyance.

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