TMI Tax Updates - e-Newsletter
February 24, 2025

Case Laws in this Newsletter:

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

Articles

1. AGREEMENT TO SALE – A CONVEYANCE AND SUBJECTED TO STAMP DUTY?

   By: DR.MARIAPPAN GOVINDARAJAN

2. Importance of LLP Annual Return Filing for Compliance

   By: Ishita Ramani

3. CBIC CLARIFICATIONS ON LEVY OF GST ON GOODS

   By: Dr. Sanjiv Agarwal

4. Common Reasons for Striking Off a Pvt. Ltd. Company

   By: Ishita Ramani

5. On the Road with GST: What Happens When Authorities Stop Your Truck?

   By: Pradeep Reddy

6. MERE DIRECTORSHIP DOES NOT CREATE AUTOMATIC LIABILITY UNDER THE NEGOTIABLE INSTRUMENTS ACT, 1881MERE DIRECTORSHIP DOES NOT CREATE AUTOMATIC LIABILITY UNDER THE NEGOTIABLE INSTRUMENTS ACT, 1881

   By: DR.MARIAPPAN GOVINDARAJAN

7. Challenges which are being faced by Indian Chemical Sector from China & RoW (i.e. Rest of the World)

   By: YAGAY andSUN

8. 𝗚𝗦𝗧 𝗖𝗼𝘂𝗻𝗰𝗶𝗹'𝘀 𝗟𝗮𝘁𝗲𝘀𝘁: Whether someone Exports, Drive Used Cars or Snack on Popcorn – Here's What's Changing!

   By: Pradeep Reddy

9. What is Net Export?

   By: YAGAY andSUN

10. Introduction to Tariffs

   By: YAGAY andSUN

News

1. Jharkhand Speaker holds all-party meeting ahead of Budget session

2. Tripura starts using AI to identify tax evaders: CM

3. NSO India releases the "Compendium of Datasets and Registries in India, 2024"

4. Inaugural address delivered by Shri M. Rajeshwar Rao, Deputy Governor, Reserve Bank of India at the Indian Institute of Management Kozhikode (IIMK)- National Stock Exchange (NSE) joint Second Annual Conference on Macroeconomics, Banking and Finance at Mumbai on February 21, 2025

5. RBI invites comments on the draft circular on ‘Responsible Lending Conduct – Levy of Foreclosure Charges/ Pre-payment Penalties on Loans’

6. Maha Kumbh also important from economic, environmental viewpoint: Union culture minister

7. Special PMLA court rejects ED's plea to bar IAS officer Pooja Singhal from govt posting

Circulars / Instructions / Orders

SEZ

1. Instruction No. 118 - dated 19-2-2025

'Jan-Sunwai' for redressal of grievances of SEZ stakeholders

SEBI

2. SEBI/HO/IMD/PoD1/P/CIR/2025/21 - dated 20-2-2025

Clarification regarding Investor Education and Awareness Initiatives

Highlights / Catch Notes

GST

• Commission Agents Need GST Registration Only When Serving Taxable Principals and Making Taxable Supplies Under Section 24(vii)

  Circulars : CBIC clarified mandatory GST registration requirements for commission agents under Section 24(vii) of CGST Act. Commission agents must register only when serving taxable principals and making taxable supplies. Agents representing agriculturists are exempt from mandatory registration since agriculturists supplying cultivation produce are not taxable persons under Section 23(1)(b). However, commission agents liable under reverse charge mechanism must mandatorily register per Section 24(iii). This corrigendum modifies Circular 57/31/2018-GST to clarify the dual conditions for mandatory registration and specific exemption for agents of agriculturists.
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• Mentioning SAP Number Instead of Tax Invoice in E-way Bill Deemed Human Error, No Penalty Under Section 129

  Case-Laws - HC : HC held that mentioning SAP document number instead of tax invoice number in e-way bill during transport from Mathura to Mirzapur was a genuine human error. Physical verification revealed no discrepancies in quality, quantity, or goods description between tax invoice and actual shipment. Authorities failed to establish any intention of tax evasion, which is essential for penalty imposition under Section 129 of GST Act. The technical mismatch alone cannot justify penalty proceedings when substantive compliance is evident. The court found impugned orders unsustainable, emphasizing that mere clerical errors, absent fraudulent intent, do not warrant punitive action. Petition allowed, setting aside tax and penalty orders.
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• Holographic Excise Stickers Classified as Goods Under GST Section 2(52), Not Services; Refund Approved for RCM Payments

  Case-Laws - HC : HC determined that holographic stickers supplied by the Prohibition and Excise Department constitute "goods" under Section 2(52) of GST laws, not services. The supply cannot be classified as a "composite supply" with excise licensing. The petitioner's previous RCM tax payments were made erroneously, as the stickers are not taxable supplies under Section 2(108). The court rejected the respondents' estoppel argument, affirming that tax principles are not bound by past practices. The second respondent must process refund claims under Section 54 of GST Acts and Rule 89 of GST rules within 3 months. The petition was allowed, granting refund of GST paid under reverse charge mechanism for holographic sticker procurement.
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• Tax Assessment Order Quashed: Officer Failed to Follow Section 74 Guidelines and Determine Liability Under GST Act

  Case-Laws - HC : HC quashed assessment order due to procedural non-compliance under Section 74 of TN GST Act, 2017. AO failed to determine tax liability and disregarded Commissioner's circular guidelines, rendering order arbitrary. Court found fundamental procedural lapses in assessment methodology, violating statutory requirements for tax determination. Matter remanded to assessing authority for de novo consideration in accordance with prescribed procedures and guidelines. AO directed to provide reasonable opportunity of hearing to assessee and pass fresh order following statutory framework.
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• Unsigned GST Assessment Order Invalid: Signature Requirement Mandatory Under CGST Act Sections 160 & 169

  Case-Laws - HC : HC set aside GST assessment order due to absence of assessing officer's signature, holding it as a fatal procedural defect. The court determined that signature requirement cannot be dispensed with and such defect cannot be rectified under Sections 160 & 169 of CGST Act, 2017. While invalidating the assessment order in Form GST DRC-07, HC granted liberty to tax authority to conduct fresh assessment after proper notice and ensuring signed order. The ruling emphasizes mandatory procedural compliance in tax assessment proceedings, specifically the necessity of authorized signature on assessment orders.
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• Tax Officials Cannot Penalize Missing State E-way Bill During Feb-Mar 2018 Under Section 129(3) UPGST Act

  Case-Laws - HC : HC quashed proceedings initiated under Section 129(3) of UPGST Act 2017 regarding goods intercepted without state E-way bill. While tax invoice, Central E-way bill and builty accompanied the goods, state E-way bill was absent. Following precedents in similar cases, HC held that during 01.02.2018 to 31.03.2018, E-way bill requirement under UPGST Act was not enforceable. Therefore, seizure proceedings against petitioner were without jurisdiction. The impugned orders were unsustainable in law as the requirement for state E-way bill documentation had not come into force during the relevant period. Petition allowed with proceedings quashed.
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• Absence of E-Tax Invoice Due to GST Portal Glitch Cannot Justify Detention or Penalties When Physical Documents Exist

  Case-Laws - HC : HC determined that detention of goods and penalties imposed for missing e-tax invoice were unjustified. While physical tax invoice, e-way bill, and bilty accompanied the goods with accurate descriptions and quantities, the e-tax invoice was absent due to technical issues with GST portal. The authorities failed to establish any intent to evade tax payments. The petitioner's explanation regarding technical glitch remained undisputed. Following precedents where deficiencies noted in show cause notices were rectified before detention orders, the court held that penalties were unwarranted when no tax evasion was proven. The impugned order was set aside and the petition was allowed, establishing that technical non-compliance without fraudulent intent does not merit punitive action.
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Income Tax

• Tax Deduction Guidelines Update: Section 192 Adds Agniveer Fund and Revises Salary Benefits Computation for 2024-25

  Circulars : CBDT circular 3/2025 outlines income tax deduction from salaries for FY 2024-25 under Section 192 of IT Act. Key modifications include revised definition of "salary" incorporating Agniveer Corpus Fund contributions by Central Government under Section 80CCH and updated perquisite valuations for accommodation benefits. Notable changes in surcharge structure under old tax regime affect individuals with income exceeding specified thresholds. Circular builds upon previous guidance (Circular 24/2022) while incorporating amendments from Finance Acts of 2023 and 2024 (No. 1 & 2). For unchanged provisions, Circular 24/2022 remains applicable. Specific emphasis placed on revised computation methods for rent-free and concessional accommodation benefits provided by employers.
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• Income Tax Reassessment Under Section 147 Quashed As Issues Were Already Examined In Prior Section 263 Proceedings

  Case-Laws - HC : HC quashed reassessment proceedings initiated beyond 4 years under s.147 on multiple grounds. Issues raised were identical to prior s.263 revision proceedings where PCIT had directed fresh assessment. Reopening on same grounds was unjustified, particularly after 4-year limitation. AO failed to specify undisclosed material facts while admitting review was based on existing records. Officer's claim of predecessor's inadvertent relief contradicted allegation of non-disclosure by assessee. Re-examination of issues already addressed in assessment order following s.263 proceedings amounts to impermissible change of opinion and review. Third proviso to s.147 bars such proceedings when matters were previously examined under s.263. Petition allowed in assessee's favor.
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• Reassessment Under Section 147 Invalid When Based on Search Materials - Must Proceed Under Section 153A/153C

  Case-Laws - HC : HC determined reassessment proceedings initiated under s.147/148 were invalid when based on materials discovered during search operation under s.132. Where incriminating evidence emerges from search, Revenue must proceed under s.153A/153C framework. The case originated from search of Shilpi Jewellers Pvt Ltd revealing accommodation entries through shell company Green Valley Gems Pvt Ltd. Court held that since foundation was search action yielding new materials, Revenue cannot bypass s.153A/153C by invoking s.147/148. Legislature intended these provisions to operate in distinct spheres, with s.153A containing non-obstante clause creating exception to regular reassessment under s.147. Notice under s.147 and subsequent actions declared without jurisdiction and void.
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• Income Tax Proceedings Under Section 153C Invalid As Seized Documents Had No Direct Link To Undisclosed Income

  Case-Laws - HC : HC held proceedings under Section 153C invalid as no incriminating material pertaining to assessed years was discovered during search. The provisional balance sheet found did not reflect affairs of AYs 2004-05 and 2005-06 or display carried forward entries. The requirement that seized material must relate to undisclosed income predated the 2015 amendments adding "have a bearing on" language. The AO of non-searched person must form opinion that material impacts assessment before initiating proceedings. Mere mechanical transmission of documents without substantive connection to undisclosed income insufficient. ITAT correctly annulled assessment. Appeal dismissed in favor of assessee.
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• Telecom Company Wins Relief on Section 14A, MAT, TDS, 3G Spectrum Depreciation and Transfer Pricing Issues

  Case-Laws - AT : ITAT ruled favorably on multiple issues. Section 14A disallowance under Rule 8D(2)(ii) was deleted, while Rule 8D(2)(iii) computation was directed for recalculation considering only exempt income-yielding investments. MAT computation under s.115JB to be recalculated on reasonable basis. TDS under s.194H not required on prepaid distributor discounts, nullifying s.40(a)(ia) disallowance. Depreciation on 3G spectrum allowed under s.32(1)(ii). IBM payment issue remanded for verification of service agreement nature. Transfer pricing adjustments for brand royalty and expense reimbursements remanded to TPO/AO for fresh consideration with directions to examine additional documentation and grant reasonable hearing opportunity.
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• Insurance Companies Can Claim Section 10 Exemptions on Share Sales, Securities Interest and Dividend Income Despite Section 44

  Case-Laws - AT : ITAT affirmed that insurance companies are eligible for exemptions under sections 10(38), 10(15), and 10(34) for profits from sale of shares/securities, interest on securities, and dividend income respectively, despite the special computation provisions under section 44 read with First Schedule. Following precedent from prior assessment years and CBDT circular dated 21.02.2006, the Tribunal upheld CIT(A)'s order granting these exemptions to the assessee insurance company. The revenue's appeal challenging these exemptions was dismissed, establishing that general exemption provisions remain applicable to insurance companies alongside their specific computation framework.
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• Change in Accounting Method from Mercantile to Cash System Approved for Interest Income Recognition in Financial Distress Cases

  Case-Laws - AT : ITAT permitted non-corporate assessee's change from mercantile to cash accounting system for interest income recognition. The change was deemed legitimate due to borrowers' financial distress and assessee's consistent application in subsequent years. ITAT rejected Revenue's contention to tax unpaid interest income from SPCPL and Roxanna on accrual basis. While SPCPL had not accrued the waived interest in its books, Roxanna, despite accruing the expense, had not paid the interest. CIT(A)'s deletion of AO's addition towards interest income was upheld, acknowledging assessee's right to adopt either accounting method and commitment to declare income upon actual receipt. Revenue's grounds were dismissed.
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• Local Authority's Layout Approval Fees Qualify as Charitable Activity Under Sections 11, 12; Exemption Granted Despite Commercial Nature

  Case-Laws - AT : ITAT ruled in favor of local authority operating in Magadi town, Karnataka, reversing lower authorities' denial of exemptions under Sections 11 and 12. The authority's activities, including layout approvals and fee collection, were deemed charitable rather than commercial. Operating under government regulation with supervised fund management and audited accounts, the authority's non-profit character was established. ITAT rejected AO's Section 13(8) application, finding fees were collected for public welfare, not profit. The tribunal followed precedent from BDA case, confirming the authority's status as a state instrumentality serving public welfare. Assessment proceedings' pending status allowed Section 12AA registration benefits, following favorable interpretation principle from Shree Shayam Mandir Committee case.
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• IPO Expenditure Allowed Under Section 37 Despite Form 3CD and ITR Discrepancy - Tax Audit Report Cannot Trigger Disallowance

  Case-Laws - AT : ITAT reversed CPC's disallowance of IPO expenditure under s.37 where variation existed between Form 3CD and ITR values. Following Kalpesh Synthetics precedent, ITAT held that disallowance cannot be made solely based on tax audit report observations. The tribunal directed deletion of IPO cost disallowance under s.37(1). On DDT credit under s.115-O, matter remanded to AO for verification and appropriate credit determination after providing opportunity of hearing to assessee. AO directed to follow due process and decide based on facts and applicable law.
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• Late TDS Interest Not Deductible Under Section 201(1A); Search-Based Additions Invalid Without Incriminating Evidence

  Case-Laws - AT : ITAT ruled on multiple issues in a tax appeal. Interest paid on late TDS deposits under s.201(1A) was held non-deductible as it neither qualifies as business expenditure nor compensatory payment. Regarding additions in unabated assessment years during search proceedings, following SC precedent in Abhisar Buildwell, additions were deleted due to lack of incriminating material. Notice under s.153C was upheld valid as search warrant and panchnama were not issued in assessee's name. Addition under s.69C was deleted as CIT(A) found sufficient opening cash balance as of 01.04.2017 to justify transactions, and AO failed to prove actual cash payments versus mere projections.
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• Land Development Expenses and Institutional Aid Allowed as Business Deductions Under Section 143(3) for Government Entity

  Case-Laws - AT : ITAT upheld CIT(A)'s decision favoring the assessee on multiple disputed deductions. The City Environment Expenses were allowed as sunk costs incurred for development of notified area, not generating future revenue. Contribution & Aid Expenses to other institutions were permitted as business expenditure following precedent that such expenditure indirectly benefits business operations. IMC Transfer Expenses were allowed considering assessee's status as state government wing, established audit procedures, and consistency with prior years' treatment. Land acquisition and diversion expenses were validated as revenue-neutral since they formed part of Work-in-Progress/stock, effectively resulting in no deduction claim. ITAT emphasized the principle of consistency in tax authorities' approach absent changes in facts or law, maintaining prior assessment treatments under Section 143(3).
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Customs

• Customs Must Release Seized Wheat Flour Imports Against Bond and Partial Bank Guarantee Without Show Cause Notice

  Case-Laws - HC : HC directed provisional release of seized wheat flour sheet dough imports covered under six Bills of Entry. Absent a Show Cause Notice, requiring bank guarantee for anticipated redemption fine and penalties was deemed excessive. Court ordered release conditional upon petitioner furnishing Provisional Duty Bond for full assessable value and bank guarantee of Rs.85 Lakhs (approximately 50% of differential duty) within one week. Customs Department instructed to release goods within one week of receiving documentation. This balanced approach protects revenue interests while avoiding undue financial burden on importer pending final classification determination. Petition disposed of with structured release mechanism.
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• Customs Broker License Revocation Reversed as No Prescribed Record-Keeping Method Existed Under Regulation 10(k)

  Case-Laws - AT : CESTAT overturned the revocation of a Customs Broker License and associated penalties. The licensing authority's allegation of breach under regulation 10(k) of Customs Brokers Licensing Regulations, 2018 was found unsustainable. The Tribunal noted no prescribed method for maintaining records had been specified by designated officials, making it impossible to establish a violation. The authority's assertion that double filing of bill of entry was deliberate rather than pandemic-related remained unproven. Without clear standards for record-keeping or concrete evidence of willful misconduct, the alleged breach of regulation 10(k) could not be established. The Tribunal set aside the original order, reinstating the license and reversing the security deposit forfeiture.
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• Service Tax Show Cause Notice and Original Order Invalidated After 12-Year Delay in Adjudication Process

  Case-Laws - HC : HC quashed Show Cause Notice dated June 20, 2012 and Order-in-Original dated March 26, 2024 due to inordinate delay in adjudication. The court rejected Customs Department's justification that delays resulted from repeated requests for documents and placement in Call Book. Following precedents in Swatch Group India and Vos Technologies cases, HC held that statutory timelines for adjudication are mandatory and cannot be circumvented by administrative delays. The 12-year gap between SCN issuance and adjudication, despite multiple hearings between 2012-2015, was deemed unjustified. Court emphasized that such administrative indifference harms both taxpayer interests and exchequer.
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• Foreign Supplier's Royalty & Technical Fees Not Includible in Import Transaction Value Under Rule 10(1)(c)

  Case-Laws - AT : CESTAT ruled that royalty and technical fees paid by appellant to foreign supplier were not includible in transaction value of imported goods under Rule 10(1)(c) of CVR 2007. While analyzing the technical assistance agreement, tribunal found only 9% of final product value came from imports. The agreement primarily covered technical personnel deployment for obtaining product approvals from Company H, with no direct connection to imported raw materials. Following precedents in Company B and Company BB cases, CESTAT held that absent clear nexus between royalty payments and imported goods as condition of sale, such payments cannot be added to transaction value. Differential customs duty demand set aside and appeal allowed.
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Corporate Law

• Bail Denied in Section 447 Companies Act Case: Bank Fraud Through Shell Companies and Stock Write-offs

  Case-Laws - HC : HC dismissed bail petition of accused charged with serious economic offenses involving bank fraud and misappropriation under Section 447 of Companies Act. Accused allegedly played active managerial role in siphoning public funds through puppet companies, writing off stocks and inventories via misrepresentations to banks. Despite completed investigation, court determined accused's presence necessary for charge framing. Court rejected long incarceration argument, distinguishing from V. Senthil Balaji precedent as present case solely involved Companies Act violations. Parity grounds also dismissed as co-accused's bail order pending Supreme Court review. Court emphasized risk of evidence tampering and witness influence, noting non-compliance with twin conditions under Section 212(6) of Companies Act, 2013.
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IBC

• Acquisition Agreement During Liquidation Extinguishes Pre-CIRP Claims and Contract Termination Rights Under IBC Section 31

  Case-Laws - HC : HC determined that the petitioner's challenge to contract termination by Union of India was untenable. The Corporate Debtor's business and assets were acquired by Mr. Swapnil Waghchoure through an Acquisition Agreement during liquidation proceedings. Following IBC principles and precedent from Ghanshyam Mishra case, all prior claims not included in resolution plans stand extinguished. Evidence showed that government departments had terminated contracts before CIRP initiation, with pending recovery notices exceeding INR 100 Crore. While NCLT had temporarily stayed government actions on terminated contracts, the petitioner ceased to exist post-acquisition. The HC concluded that since the original contracting entity no longer existed and contracts were validly terminated pre-CIRP, the petition lacked merit and was accordingly dismissed.
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VAT

• Set Top Boxes Confirmed as Taxable Goods Under Section 2(15), Subject to Both VAT and Service Tax

  Case-Laws - HC : HC ruled on VAT applicability to Set Top Boxes (STBs) under Karnataka VAT Act 2003. STBs were determined to be goods under section 2(15), capable of exclusive subscriber use with transfer rights for Rs. 2,000 consideration. Court upheld concurrent findings that STBs constitute taxable goods despite service component, rejecting argument of mutual exclusivity between service tax and VAT. Assessees' contention that government notification dated 15.03.2021 couldn't have retrospective effect was dismissed. HC affirmed that tax regime during transition between 2003 Act's repeal and 2017 Act's enactment wasn't intended as tax haven. Revision petition challenging VAT assessment on STBs dismissed, confirming dual applicability of service tax and VAT based on distinct taxing incidents.
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Service Tax

• Service Tax on Works Contracts Valid Under Section 65: Parliament Can Tax Services While States Tax Sales

  Case-Laws - HC : HC upheld constitutional validity of service tax provisions under Finance Act 1994 sub-clauses (zzzzv) & (zzzzw) of clause 105, Sec. 65. Parliament's authority to levy service tax derives from Entry 97 List I (residuary powers) of Constitution. Court confirmed distinct taxable events can exist within single transaction - service tax under federal jurisdiction and sales tax under state powers (Entry 54 List II) are mutually exclusive with different tax incidences. Multiple taxes permissible when imposed under different statutes with distinct aspects. State's power to levy sales tax does not conflict with federal authority to impose service tax as they target separate components of transaction. Appeal challenging constitutional validity dismissed.
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• Refund of Unutilized CENVAT Credit Cannot Be Denied Without Invoking Rule 14 - Rules 2(l) and 5

  Case-Laws - AT : CESTAT allowed the appeal regarding refund of unutilized accumulated CENVAT credit. Department's rejection of refund claim citing ineligible input services under Rule 2(l) of CENVAT Credit Rules, 2004 was overturned. The Tribunal held that without invoking Rule 14, refund under Rule 5 cannot be denied. Following precedents, CESTAT emphasized that different criteria cannot be applied for credit allowance versus refund processing. When credit availed remains unchallenged, assessee is entitled to refund under Rule 5 read with Notification No.27/2012-CE(NT). The eligibility of input services cannot be questioned during refund sanction if not challenged at time of availing credit. Impugned order set aside.
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Case Laws:

• GST

• 2025 (2) TMI 890
  Levy of tax and penalty for petitioner s technical mistake in mentioning the wrong document number in the e-way bill - HELD THAT:- It is admitted that the goods in question were onward journey from Mathura to Mirzapur when it was intercepted at Etawah and on physical verification, it was found that there was mis-match in tax invoice and e-way bill. In the e-way bill, instead of tax invoice number, SAP document number was mentioned, which was also present in the tax invoice itself. The petitioner has brought on record copies of the tax invoice and e-way bill as Annexure No. 2 to this writ petition. Further, except the aforesaid discrepancy, no other discrepancy has been pointed out by the authorities below. Once the authorities below have not pointed out any other mismatch relating to quality, quantity, items of goods, etc. as disclosed in the tax invoice, the error can be a genuine human error while generating the e-way bill. Further, the record shows that no finding has been recorded with regard to intention to evade payment of tax, which is essential for levying penalty. The human error, which has been committed while generating the e-way bill, cannot be the only ground for justifying initiation of proceedings under section 129 of the GST Act. Conclusion - The technical error in the e-way bill, coupled with the absence of any intention to evade tax and the lack of other discrepancies, rendered the impugned orders unsustainable in the eyes of the law. Petition allowed.

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• 2025 (2) TMI 889
  Refund of the GST paid on a Reverse Charge Mechanism (RCM) basis for the procurement of holographic stickers from the Prohibition and Excise Department of the Government of Tamil Nadu - case of the petitioner is that the petitioner was under a bona fide belief that the petitioner was liable to pay tax on the holographic stickers purchased from the Prohibition and Excise Department of the State on Reverse Charge Basis (RCB) in terms of Section 9 (3) of the respective GST enactments of 2017 read with Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017. HELD THAT:- As far as the sale and purchase of holographic stickers (excise labels) are concerned, they are supplied by the Prohibition and Excise Department of the Government of Tamil Nadu. The holographic stickers are to be affixed on the manufactured and bottled alcoholic liquor - If the sale of holographic sticker is to be treated as a supply of service, the petitioner would be liable to pay tax on Reverse Charge Basis (RCB) in terms of Sl.No.5 to Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017. Holographic Sticker (Excise Label) is a label . Holographic Sticker (Excise Label) is therefore goods within the meaning of Section 2 (52) of the respective GST enactments. In paragraph 4.3 of Order in RFD-06 in C.No. IV/09/51/2020-GST (R) dated 20.08.2020 itself it has been clarified by the 2nd respondent that excise labels i.e., holographic stickers were supplied by the Prohibition and Excise Department - there is no dispute that label is thing viz., noun. It is a thing and therefore goods within the meaning of Section 2 (52) of the respective GST enactments as goods means every kind of movable property. The only contention of the respondents is that there was a composite supply as the label was supplied by the Prohibition and Excise Department is for affixing on the liquor bottles manufactured by the petitioner as per the relevant instructions / procedures together with grant of excise license - The question of treating the activity of the Prohibition and Excise Department of the Government of Tamil Nadu in granting excise license to manufacturers for manufacturing of alcoholic products and supply of holographic stickers (excise labels) is not a composite supply within the meaning of Section 2 (30) of CGST Act, 2017. Supply of holographic sticker is not a taxable supply within the meaning of the definition in Section 2 (108) of the respective GST enactments, as grant of excise license is exempted under Notification No. 25/2019-Central Tax (Rate) dated 30.09.2019. The activity of grant of excise license for consideration in the form of license fee / application fee is neither a supply of goods nor the supply of services within the meaning of Section 7 (2) of the respective GST enactments in view of Notification No. 25/2019-Central Tax (Rate) dated 30.09.2019, there is no merits in the Impugned Orders - The supply of holographic stickers (excise labels) cannot be construed as supply of service under Section 2 (52) of the respective GST enactments. The holographic stickers (excise labels) are not services within the meaning of Section 2(102) of the respective GST enactments. The principles of estoppel equity are alien to tax jurisprudence. Merely because the petitioner had unwittingly paid tax on Reverse Charge Basis (RCB) in terms of Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017 in the past ipso facto would not mean that the petitioner was bound by its past practices. There is no contract with the respondents for invoking promissory estoppel against the petitioner - If the petitioner has paid tax on Reverse Charge Basis (RCB) by mistake, it is entitled to claim refund under Section 54 of the respective GST enactments. The 2nd respondent is therefore directed to process the refund claims of the petitioner and refund the amounts paid by the petitioner, strictly in accordance with Section 54 of the respective GST Acts read with Rule 89 of the respective GST rules in the light of the above observations, within a period of 3 months from the date of receipt of a copy of this order. Conclusion - The petitioner is entitled to a refund of the GST paid on a reverse charge basis for the supply of holographic stickers, as the supply is classified as goods and not services. Petition allowed.

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• 2025 (2) TMI 882
  Seeking quashing of order passed u/s 129(3) of the U.P.G.S.T. Act, 2017 - E-way bill did not accompany the goods in transit - HELD THAT:- Admittedly, in the case in hand, at the time of interception of the goods in transit, tax invoice, Central E-way bill and builty was accompanied therewith and only the State E-way bill under UPGST Act was not available along with it, due to which, the proceedings were initiated against the petitioner. The issue in hand is no longer res-integra as the Division Bench of this Court in the cases of M/s Godrej and Boyce Manufacturing Co. Ltd. [ 2018 (9) TMI 1261 - ALLAHABAD HIGH COURT ] and M/s Manas Enterprises [ 2024 (12) TMI 62 - ALLAHABAD HIGH COURT ] has not justified the seizure proceedings and quashed the proceedings of the same therein. In view of the aforesaid undisputed facts that during period from 01.02.2018 to 31.03.2018, the requirement of E-way Bill under UPGST Act read with Rules framed thereunder was not enforceable, the proceedings pressed against the petitioner are without jurisdiction and as such, the impugned orders cannot be sustained in the eyes of law and the same is hereby quashed. Conclusion - The writ petition is allowed, in favor of the petitioner based on the lack of enforceability of the E-way Bill requirement during the relevant period. Petiiton allowed.

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• 2025 (2) TMI 881
  Detention of goods - levy of penalty - failure to accompany e-tax invoice with the goods - intent to evade - HELD THAT:- It is not in dispute that the goods in question were accompanying with tax invoice, e-way bill, bilty, etc., in which no adverse inference regarding the description of goods and the quantity of goods was ever drawn at any stage. The only ground for seizure of the goods and penalty was that the e-tax invoice was not accompanying the goods in question. The petitioner submitted its reply specifically mentioning that due to technical glitch in the GST portal, the same could not be generated. The said fact has not been disputed by any of the authorities. Even before this Court, the said ground has been taken, but the same has not been specifically denied. Further, the record shows that none of the authorities below have recorded any finding that the petitioner has intention to evade payment of tax. This Court in Shyam Sel Power Limited [ 2023 (10) TMI 218 - ALLAHABAD HIGH COURT ] and Galaxy Enterprises [ 2023 (11) TMI 359 - ALLAHABAD HIGH COURT ] has specifically held that in case any deficiency is pointed out in the show cause notice and the same is cured before passing of the detention order, no penalty can be justified. Conclusion - The detention and penalties imposed on the petitioner for not accompanying the e-tax invoice were not justified under the law. The impugned order is set aside - petition allowed.

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• 2025 (2) TMI 880
  Seeking a direction to pass separate orders for the various financial years - seeking to grant sufficient time for furnishing a reply for financial years 2018- 2019 to 2023-2024 and provide an opportunity for cross examination - HELD THAT:- Considering the fact that 05.02.2025 is the last date for passing orders under Section 74 of the Act in respect of 2017-2018, it is not deemed proper for this Court to interfere in respect of the determination now sought to be done through Ext.P1 especially in relation to the aforesaid year. However, if an opportunity for cross examination is required by law and is not granted, the same is a matter to be considered at the appropriate stage by the appropriate authority. This Court cannot at this juncture assume that the apprehension of the petitioner is legally justified, especially in the absence of any material. However taking note of the apprehension of the petitioner that a composite order will be issued by the second respondent, insofar as years 2018-2019 onwards are concerned, the petitioner ought to be granted a reasonable opportunity of hearing since the limitation does not expire in the immediate future. Hence, liberty is granted to the competent amongst the respondents to pass appropriate orders for 2017-18, pursuant to Ext.P1 show cause notice within the period of limitation, in accordance with law, after granting an opportunity of hearing - Petition disposed off.

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• 2025 (2) TMI 879
  Challenge to assessment order - AO did not follow the required procedures u/s 74 of the Tamil Nadu Goods and Services Tax Act, 2017, or the guidelines provided in a circular issued by the Commissioner of State Tax - HELD THAT:- A perusal of the order impugned would also show that the Assessing Officer had not made any determination of the tax payable by the petitioner as envisaged under Section 74 of the Act, nor has followed the guidelines issued in Circular dated 29.08.2024 of the Commissioner of State Tax. In such view of the matter, the order impugned suffers from vice of arbitrariness. For the said reason, the order impugned is liable to be interfered with. The matter is remitted back to the first respondent for fresh consideration - Petition allowed by way of remand.

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• 2025 (2) TMI 878
  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 [ 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. 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. This Writ Petition is disposed of, setting aside the impugned assessment order in Form GST DRC-07, dated 26.10.2023, issued by the 1st respondent, with liberty to the 1st respondent to conduct fresh assessment, after giving notice and by assigning a signature to the said order.

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• 2025 (2) TMI 877
  Cancellation of petitioner s registration on the ground of non-filing of return - HELD THAT:- This writ petition is disposed of by setting aside the impugned orders by both the concerned authorities by directing and the respondent CGST/WBGST authority to restore the petitioner s registration and open the portal for a period of 45 days from date of communication of this order by the counsel of the respondent authority to enable the petitioner to make the payment of revenue due as well as any other due including penalty to be indicated by the respondent authority concerned within a period of 15 working days. Petition disposed off.

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• 2025 (2) TMI 876
  Reversal of credit availed on the strength of invoices - Fraudulent passing on input tax credit without actual supply of goods - petitioner is ready and willing to pay 25% of the disputed tax - 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. If any amount has been recovered or paid out of the disputed taxes, including by way of pre-deposit in appeal, the same would be reduced/adjusted, from/towards the 25% of disputed taxes directed to be paid. The assessing authority shall then intimate the balance amount out of 25 % of disputed taxes to be paid, if any, within a period of one week from the date of receipt of a copy of this order. The petitioner shall deposit such remaining sum within a period of three weeks from such intimation. The impugned order dated 30.04.2024 is set aside - Petition disposed off.

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• Income Tax

• 2025 (2) TMI 891
  Reopening of assessment - Period of limitation - Bogus purchases - HELD THAT:- Admittedly, as per facts of the case, dates of the notices issued and the decision in the case of Kachrulal Jitendra Kuma [ 2025 (2) TMI 865 - ITAT RAIPUR] we find that the issue in the present case is squarely covered in favour of the assessee. Evidently, under the facts and circumstances of the present case, the notice u/s 148 (under new regime) was issued on 29.06.2022, whereas the same was required to be issued on or before 23.06.2022, therefore, it can be safely held that the notice u/s 148 (new regime) was issued belatedly beyond the limitation provided in the Act, which was further extended in terms of judgment of Ashish Agrawal [ 2022 (5) TMI 240 - SUPREME COURT ] In view of such facts, the assessment framed on the basis of a notice u/s 148 (new regime) dated 29.06.2022, which is barred by limitation, thus, is rendered as bad in law, therefore, stands quashed. As the impugned assessment for AY 2014-15 in the instant case has been rendered as quashed for the want of valid assumption of jurisdiction by the Ld. AO, therefore, we refrain to deliberate upon and to deal with the other contentions raised by the assessee qua the impugned addition made by the Ld. AO and to the extent sustained by the Ld. CIT(A), thus, the same is left open. Assessment for the want of valid assumption of jurisdiction by the Ld. AO quashed, therefore, the issues raised by the revenue become infructuous, accordingly, the appeal of the revenue stands dismissed.

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• 2025 (2) TMI 875
  Revision u/s 263 - additions on account of notional rent under the head income from house property - reopening is sought to be done beyond the period of 4 years from the end of the relevant assessment year. HELD THAT:- The issues raised in the reasons recorded for reopening are identical to the reasons for which revisional proceedings u/s 263 were initiated by the PCIT. The said revisional order under Section 263 of the Act was passed directing the assessing officer to examine the issues raised in the revisional proceedings and pass a fresh order. Therefore, on the same ground the assessing officer is not justified to reopen the case, moreso, after a period of 4 years. In our view, even the approving authority should not have given his approval after he himself having passed the order under Section 263. Therefore, even on this ground since the issues were subject matter of 263 proceedings, the impugned proceedings are barred by 3rd proviso of Section 147 of the Act. The reasons recorded initially states that there has been no disclosure of material facts necessary in the assessment but, what were the material facts which were not disclosed has not been stated. On perusal of the reasons recorded it is observed that the officer himself has recorded that it is based on the perusal of records and verification of records that reopening proceedings are initiated. In our view, on this ground also the pre-condition required of failure to disclose truly and material facts necessary for the assessment is not satisfied and therefore, the proceedings are bad in law as per the proviso of Section 147 of the Act. In the order rejecting the objections, the officer states that the reopening is permissible if in the original assessment the Assessing Officer has through inadvertence oversight given relief. If that be the case, then, certainly no proceedings could have been initiated by the respondent by virtue of first proviso to Section 147 of the Act because according to the respondent, it is the mistake of the predecessor Officer and, therefore, the issue of any failure to disclose fully and truly all necessary facts for the assessment by the petitioner would not arise. In any case, pursuant to the direction under Section 263 of the Act, the Assessing Officer examined all the issues which are also subject matter of the present proceedings and passed the assessment order on 14 December 2018. Therefore, any attempt now to re-agitate the issues which were already examined while passing the assessment order pursuant to directions in 263 proceedings would be based on change of opinion and review of the earlier order which is not permissible. Decided in favour of assessee.

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• 2025 (2) TMI 874
  Validity of reopening of assessment proceedings - denial of principle of natural justice - despite the reply having being filed within the statutory period of seven (7) days, AO proceeded to pass an order u/s 148A (d) without considering the reply so filed by the petitioner - HELD THAT:- Revenue fairly states that the petitioner may be given one more opportunity to respond to the notice dated 21.08.2024. The impugned order passed u/s 148A (d) as well as the notice issued u/s 148 are set aside. AO shall consider the reply already filed by the petitioner and pass an appropriate order within a period of four weeks.

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• 2025 (2) TMI 873
  Claim of Unconditional stay on the proclamation and sale of the immovable property of which the Petitioner is the joint owner - HELD THAT:- The conduct of the Petitioner is important. The fact that the Petitioner or the Company are unwilling to pay any taxes, though the tax demands have attained finality, is also relevant. The fact that none of the foundational orders are challenged is important. The fact that no severe financial hardships are pleaded or urged is also important. In the case of Dunlop India Ltd and Others [ 1984 (11) TMI 63 - SUPREME COURT (LB)] has held that in fiscal matters, there is no justification for granting unconditional interim reliefs merely upon the Petitioner making out a prima facie case. The aspects of balance of convenience must also be considered. Here, assuming that a prima facie arguable case is made out, still, the balance of convenience does not favour grant of an unconditional stay. We are satisfied that the ad interim orders granted earlier can be confirmed if the Petitioner deposits 50% of the demanded amount with the Respondents within eight weeks of today. If no such deposit is made within eight weeks of today, this interim order will stand vacated without further reference to this Court. We order accordingly. We clarify that this interim order only restrains the Respondents from selling the attached property. Based on this interim relief, the Petitioner must not deal with the attached property or otherwise sell, transfer, convey, or create any third-party rights in it.

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• 2025 (2) TMI 872
  Penalty u/s 270A - HELD THAT:- This is not a case where the Assessing Officer, after being conscious of the institution of the Appeal, has nevertheless deemed it appropriate to exercise the powers u/s 275(1)(a). AO has only observed that since the ITBA data did not reflect the institution of the quantum Appeal, the Assessing Officer felt that he had no alternative but to impose a penalty. Thus, this is not a case where the penalty was imposed after independent application of mind. The main grounds for imposing the penalty were because the AO felt that he had no alternative but to impose the penalty in the absence of the ITBA portal, reflecting the institution of the quantum Appeal by the Petitioner. Petitioner had pointed out that the quantum Appeal was indeed instituted. The Petitioner also produced the acknowledgment receipt evidencing the institution of the quantum Appeal. Because of a technical glitch, if this institution was not being reflected on the ITBA portal, no penalty should have been imposed by holding that the AO had no alternative but to impose a penalty. We quash and set aside the impugned penalty order. However, we clarify that the quashing of this order will not preclude the Respondents from initiating fresh proceedings for the imposition of penalty should they so desire upon the disposal of the Petitioner s quantum Appeal before the Commissioner (Appeals). Based upon this statement, the Petitioner s Appeal against the penalty order before the Commissioner (A) is disposed of as withdrawn. Mr Jain states that this order will be placed before the Commissioner (Appeals) within 15 days from today so that the Appeals can be shown as disposed of for statistical purposes.

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• 2025 (2) TMI 871
  Reopening of assessment u/s 147 - failure to disclose all material facts necessary for assessment - HELD THAT:- No fresh tangible material could be said to have come to the knowledge of the assessing officer for reopening of the assessment. Admittedly, the Petitioner s case was selected for scrutiny, and several queries were raised. In particular, the queries were raised regarding the claims u/s 35AC and deductions u/s 80G of the IT Act. Upon considering the Petitioner s response, these claims were allowed in the assessment order u/s 143 (3) of the IT Act. Though, this was a case of reopening within 4 years, still, in the absence of any fresh tangible material coming to the knowledge of the assessing officer, reopening of the assessment only on re-examination of the very same material based on which the original assessment order was passed cannot be permitted. In this case, the Petitioner has not claimed any benefits under Section 37. Petitioner has, however, claimed deductions under Section 35AC. No provision was shown to us based on which we could infer that such a deduction could not, at least prima facie, be claimed. On the contrary, Mr Kamdar referred us to the statement of objects and reasons accompanying the Finance (No. 2) Bill, 2014 by which these amendments were introduced. In any event, we do not propose to go into the merits of the matter. This Petition must be allowed because there was no tangible fresh material based upon which the AO could have reason to believe that any income had escaped assessment. This is, as noted earlier, a scrutiny case where several queries, including queries particular to this issue, had been raised. The queries were answered by the Petitioners, and upon consideration of all these materials, an assessment order was made u/s 143 (3) of the IT Act. On the ground that some other view was possible, the AO could not have changed his earlier opinion and, based upon such change of opinion, issued the impugned notice seeking to reopen the assessment. For all these reasons, the impugned notice and the consequential orders will have to be set aside.

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• 2025 (2) TMI 870
  Validity of reassessment proceedings on the basis of a search action u/s 132 - HELD THAT:- As in the event any incriminating material is found during the search, the Revenue necessarily would be required to take recourse to the provisions of Section 153A and in the event no incriminating material found during the search, then the power of the Revenue to have the reassessment u/s 147/148 stands saved, failing which, the Revenue would be left without remedy. Rajasthan High Court in Shyam Sunder Khandelwal s/o. Late Damodar Lal Khandelwal [ 2024 (4) TMI 196 - RAJASTHAN HIGH COURT ] also had taken a similar view when the issue which had arisen before the Court was in regard to the notice issued u/s 148 the basis of issuance of such notice was the material seized during search. The contention of the assessee was to the effect that in the said circumstances, the proceedings ought to have been initiated u/s 153C. The Division Bench referring to the decision of Supreme Court in Abhisar Buildwell P. Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT ] as also the decision of Sri Dinakara Suvarna [ 2022 (7) TMI 800 - KARNATAKA HIGH COURT ] allowed the petitions observing that the department had not set up a case, that for initiating proceedings under Section 148, it had material other than the material seized during the search of a related party. We are of the clear opinion that the foundation of the present case was certainly a search action which was undertaken by the Revenue against one Shilpi Jewellers Pvt. Ltd. and in such search and seizure action, materials were seized and such materials were further explored and enquired. Such enquiry revealed significant information in regard to M/s. Green Valley Gems Pvt. Ltd., which according to the Revenue had provided accommodation entries to the petitioner, in which it was also revealed that Green Valley Gems Pvt. Ltd. was a shell company. We do not find that the record would indicate something which is not on the basis of such new materials gathered under the search and seizure action under Section 132. There cannot be any doubt on the position in law when the Revenue intends to proceed purely on materials relevant for an action under Section 148 r.w.s. 147. The provisions of Sections 147, 148 vis-a-vis Section 153A and Section 153 are quite compartmentalized. To avoid any overlapping of these provisions, the legislature in its wisdom has thought it appropriate to provide for an independent effect, to be given u/s 153A r.w.s. 153C by incorporating the non-obstante clause, in these provisions, which carves out an exception to any normal/regular action being resorted u/s 147. We are of the clear opinion that the impugned notice u/s 147 and all actions consequent thereto are required to be held to be without jurisdiction and bad in law. The petition is accordingly allowed in terms of prayer clauses (a) and (b).

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• 2025 (2) TMI 869
  Validity of proceedings initiated u/s 153C - no incriminating material was found during the search pertaining to the AYs in which the additions have been made - HELD THAT:- While and undoubtedly Section 153C as it stood at the relevant time did not contemplate a two tier recordal of satisfaction and the AO of the searched person was merely obliged to transmit the material belonging or pertaining to a third person gathered in the course of a search, proceedings under the said provision could not have been triggered mechanically absent the formation of opinion by the AO of the non-searched person that the material was likely to impact an assessment made. We are of the considered view that the subsequent introduction of the words have a bearing on in the provision was not an introduction of a new obligation upon the AO. The primordial requirement of the material relating to undisclosed income had existed even prior to the amendments introduced in 2015 and which position has been consistently recognized by our Court including in RRJ Securities and the host of precedents which followed. This would also appeal to reason since the family of provisions concerned with search were intended to enable the AO to utilise the material that may have been uncovered in a search to test the validity of assessments completed or the veracity of the disclosures made by assessees. The provisional Balance Sheet could not be said to be reflective of affairs pertaining to AYs 2004-05 and 2005-06. It was clearly not a document which displayed carried forward or past entries of income or expenditure. The Tribunal was thus justified in annulling the assessment undertaken. Decided against revenue.

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• 2025 (2) TMI 868
  Reopening of assessment u/s 147 in the name of deceased - HELD THAT:- A decision in the case of Meet Lalwani [ 2023 (11) TMI 1196 - MADHYA PRADESH HIGH COURT] wherein it is held that issuance of notice u/s 148 of the Act in the name of deceased cannot be sustained. The issue of notice under Section 148 of the Act is a foundation for reopening of assessment. The sine qua non for acquiring jurisdiction to reopen an assessment is that such notice should be issued in the name of correct person meaning thereby the same should not have been issued in the name of dead person. Admittedly, the provisions of Section 159A of the Act of 1961 has not been taken into consideration in the case of Meet Lalwani [Supra] This Court has no hesitation in quashing the impugned orders passed by respondent no.2. Effect of Section 159 has not been considered in the case of Meet Lalwani (supra), the respondents/Department would be at liberty to proceed against the petitioner in accordance with law.

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• 2025 (2) TMI 867
  Disallowance u/s 14A r.w.r. 8D - HELD THAT:- We accept the contention of the Appellant that no disallowance under Section 14A read with Rule 8D(2)(ii) of the IT Rules was warranted in the present case and therefore, addition made by the Assessing Officer by disallowing proportionate interest cost is deleted under the normal provisions. Disallowance u/Rule 8D(2)(iii) - As in the case of ACIT Vs. Vireet Investments Pvt. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] has held that for computing the disallowance under Rule 8D(2)(iii) of the IT Rules only the investments yielding exempt income are to be taken into consideration. Accordingly, we direct the AO to recompute the disallowance under Rule 8D(2)(iii) of the IT Rules read with Section 14A. MAT computation u/s 115JB - Amount for the purpose of Clause (f) of Explanation 1 to Section 115JB(2) of the Act can be computed on other reasonable basis. However, given the facts and circumstances of the present case, in order to put quietus to this issue, we deem it appropriate to direct the Assessing Officer to re-compute the said amount keeping in view the provisions of Clause (f) of Explanation 1 to Section 115JB(2) of the Act on a reasonable basis with the directions to restrict the same to the amount computed in terms of paragraph 4.6 above. The Assessing Officer is directed to grant to the Appellant a reasonable opportunity of being heard. TDS u/s 194H - Disallowance of discount extended to pre-paid distributors under section 40(a)(ia) - discount extended represented the difference between the Maximum Retail Price (MRP) of the talktime pre-paid connections and the price at which these were transferred to the Pre-paid Distributors - DRP were of the view that the upfront discount given by the Appellant to the Pre-paid Distributor was in the nature of commission liable to withholding of tax at source u/s 194H - HELD THAT:- Mumbai Bench of the Tribunal in case of the Assessee for the Assessment Year 2009-10 [ 2024 (1) TMI 991 - ITAT MUMBAI] wherein Tribunal had concluded that tax was not required to be withheld u/s 194H from the upfront discount offered to Pre-paid Distributors, and consequently, no disallowance could be made u/s 40(a)(ia) of the Act for failure to deduct tax at source. Decided in favour of assessee. Disallowance of depreciation on 3G Spectrum - AO disallowed the depreciatio claimed by the Appellant and allowed the Appellant to amortized the same u/s 35ABB - DRP declined to grant any directions and concluded that the AO had rightly amortized the expense of 3G spectrum over the period for which the spectrum was allocated to the Appellant - HELD THAT:- Mumbai Bench of the Tribunal for the Assessment Year 2011-12 [ 2020 (8) TMI 954 - ITAT MUMBAI] concluded that depreciation in respect of 3G spectrum charges was correctly allowed by the AO. Thus, we direct the AO to allow depreciation in respect of the 3G spectrum charges capitalize by the Appellant under Section 32(1)(ii) Disallowance of payments made to IBM - Appellant had entered into a service agreement with IBM whereby IBM was under obligation to provide end-to-end information technology services and solutions to the Appellant for a period of five years which included providing IT support as well as provision of IT hardware on an operating lease basis - HELD THAT:- We find merit in the contention advanced on behalf of the Appellant that the claim of deduction made by the Appellant cannot be rejected merely on the ground that the expenditure under consideration was capitalized in the books of accounts of the Appellant. We find that the underlying agreement between the Appellant and IBM is not on record. Accordingly, we deem it appropriate to remand this issue back to the file of the Assessing Officer. The Appellant is directed to file the relevant agreement, invoices and other supporting documents before the Assessing Officer. AO directed to allow a deduction for service charges paid/payable to IBM in case on verification of the aforesaid agreement and supporting documents the Assessing Officer is satisfied that the aforesaid payment is in the nature of annual maintenance charge or annual operating lease rental paid/payable by the Appellant to IBM for the relevant previous year. TP Adjustments - payment of brand royalty for obtaining the right to use of Vodafone trademark and trade name - HELD THAT:- As was the case in the preceding three assessment years, the benchmarking done by the Appellant using the CUP Method has been rejected by the TPO. The TPO rejected the comparables selected by the Appellant on account of significant differences in the functions, geography and level of operations. It has been submitted on behalf of the Appellant that the corroborative benchmarking using Transaction Net Margin Method (TNMM) had also not been considered by the Assessing Officer and the DRP. Given the aforesaid factual matrix and keeping in view the fact that for the three preceding Assessment Years 2011-12 to 2013- 14 the issue of benchmarking of the royalty transaction has been remanded back to the file of the TPO/Assessing Officer, we deem it appropriate to remand this issue back to the file of TPO/Assessing Officer with the directions to decide the issue of transfer pricing adjustment in relation to international transaction of royalty payment afresh. TP adjustment pertaining to reimbursement of expenses - HELD THAT:- We deem it appropriate to grant to the Appellant another opportunity to substantiate its claim that the INR.2,45,23,347/- were incurred in relation to the employees deputed with the Appellant and that the same, having being recovered on cost to cost basis from the Appellant, was at arm s length. Appellant is directed to furnish relevant documents/details to substantiate its claim. TPO/AO shall grant reasonable opportunity of hearing to the Appellant and shall decide the issue in accordance with law after taking into consideration the details/documents furnished by the Appellant.

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• 2025 (2) TMI 866
  Assessment of insurance companies - Claim of exemption relating to profit on sale of shares and securities u/s. 10(38), interest on securities is allowable u/s. 10(15) and dividend on shares is allowable u/s. 10(34) - observed that the computation of income from business of insurance had to be made in accordance with section 44 r/w 1st Schedule of the Act and the other provisions of the Act in respect of relevant heads of income were not applicable in the case of an insurance company HELD THAT:- Tribunal, while deciding the issue in assessee s own case in preceding assessment years has categorically held that assessee s claim of exemption relating to profit on sale of shares and securities is allowable u/s. 10(38), interest on securities is allowable u/s. 10(15) and dividend on shares is allowable u/s. 10(34) of the Act. We find that all the issue in dispute under present appeal are covered by the order for A.Y. 2010-11. Also in view of the co-ordinate bench is also in consonance with the clarification issued by CBDT vide circular letter dated 21.02.2006, which has indeed been referred by learned CIT(A). In absence of any contrary decision, the impugned order passed by learned CIT(A) does not warrant any interference and is accordingly affirmed and the grounds raised by the revenue under appeal stand determined against the revenue.

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• 2025 (2) TMI 865
  Reopening of assessment u/s 147 - Period of limitation - addition u/s. 69C - HELD THAT:- As the A.O in the present case had issued notice u/s. 148 of the Act, dated 25.07.2022 i.e. much subsequent to lapse of the period of limitation as was available with him upto 13.06.2022, therefore, as stated by the Ld. AR (subject to correction of the date by the Ld. AR as 16.06.2022), and rightly so, the same is found to be barred by limitation. Accordingly, the assessment order passed by the A.O u/s. 147 r.w.s. 144B in absence of a valid notice issued u/s. 148 of the Act cannot be sustained and, is quashed. Decided in favour of assessee.

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• 2025 (2) TMI 864
  Taxation of interest income - change in the method of accounting from mercantile to cash basis - income of the assessee has to be computed on the basis of cash or mercantile system of accounting - HELD THAT:- Assessee has changed the method of accounting from mercantile system to cash system in the year under consideration. In this respect justifiable reasons and corroborative actions taken have been explained by the assessee. Assessee is a non- corporate assessee who is permitted to follow either of the cash or mercantile system of accounting for recognizing his income. In the case of companies, they are mandatorily required to follow accrual basis of accounting. Change in method of accounting is not prohibited when warranted by situations which has been justifiably explained by the assessee. Assessee had demonstrated that once changed, he has regularly followed the method in the subsequent years. Assessee has affirmed to offer the income as and when he receives it. In our considered view, change of method of accounting from mercantile to cash by the assessee in the year under consideration is a legitimate exercise. Assessee has explained that it is a genuine and bonafide exercise arising out of compelling reasons of financial distress at the end of borrowers. Subjecting assessee to tax on interest income which he has not received, we have held the change in method of accounting from mercantile to cash system justifiable and legitimate. Having held so, non-receipt of interest income during the year from both the parties, namely, in the case of SPCPL where assessee has waived the interest which has not even been accrued by it in its books of account to claim it as an expense and Roxanna having accrued the interest expense in its books of account has not paid the same to the assessee, cannot be added in the hands of the assessee on accrual basis as done by the ld. AO No infirmity in the findings arrived at by ld. CIT(A) in deleting the addition made by AO towards interest income on loans given to the two companies. In the result, grounds raised by the Revenue are dismissed.

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• 2025 (2) TMI 863
  Denial of benefit of Sections 11 and 12 - charitable purposes under Section 2(15) - assessee claims to be a local authority responsible for the administration, development, and monitoring of affairs in rural Magadi town, located in the Ramanagar district of Karnataka - HELD THAT:- Assessee operates under stringent Government regulation. All its receipts and expenditures are deposited into the Magadi Planning Authority Fund, and the budget is subject to approval by the State Government. The assessee s accounts are audited annually by Government agencies, and any surplus or assets, upon dissolution, revert to the State Government. These factors unequivocally demonstrate the non-commercial character of the assessee s activities. We, accordingly, concur with the assessee s argument that the imposition of income tax on its operations would contradict statutory mandate and undermine its role as a state instrumentality serving public welfare. AO s invocation of Section 13(8) of the Act, citing that the assessee s fee-earning activities constitute trade or business, lacks sufficient merit. The activities cited by the AO - such as layout plan approvals, betterment fees, and lake conservation fees are intrinsic to the assessee s statutory responsibilities and do not exhibit the characteristics of a profit-driven enterprise. These fees are charged to ensure accountability and fund public welfare initiatives, not to generate profit. As such, the AO s interpretation of the assessee s activities as trade or commerce is inconsistent with the intent and purpose of Sections 11 and 12 of the Act. CIT(A) further erred in concurring with the AO without adequately addressing the assessee s submissions, including its reliance on the BDA case. The appellate authority failed to provide a reasoned explanation for dismissing the precedent, despite the AO s admission of factual similarity. Given the admitted identical nature of the facts and the binding judicial precedent set by the Bangalore ITAT in the BDA case [ 2019 (6) TMI 429 - ITAT BANGALORE ] we hold that the denial of exemptions under Sections 11 and 12 of the Act is unjustified. The assessee s activities are undeniably charitable, and the provisions of the Act support its exemption claim. The addition made by the AO and upheld by the learned CIT(A) is, therefore, quashed. The findings of the lower authorities are reversed, and the assessee is entitled to exemptions under Sections 11 and 12 - Decided in favour of assessee. Whether assessment proceedings can be considered pending as on the date of approval of registration under Section 12AA of the Act, for the purpose of extending the benefit of exemption under Sections 11 or 12 of the Act? - It is a settled position of law that when there are conflicting views on the same issue by different non-jurisdictional High Courts, the view favoring the assessee shall prevail. Therefore, we are inclined to follow the view taken in the case of M/s Shree Shayam Mandir Committee [ 2017 (10) TMI 1450 - RAJASTHAN HIGH COURT ] Appellant assessee is entitled to the benefit of the provisions of section 11 of the Act for the year under consideration. Accordingly, the ground of appeal of the assessee is allowed.

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• 2025 (2) TMI 862
  Disallowance in relation to the IPO expenditure for abandoned / aborted project u/s 37 - CPC made disallowance due to variation between the value reported by the tax auditor in Form No.3CD to that of entry in ITR - HELD THAT:- As per observations of the Ld. Addl./JCIT(A) that when there is mismatch of corresponding item as per column 21(a)(2) of Form No.3CD and Schedule BP of e-filed ITR, the corresponding difference has to be necessarily added to the total income as adjustment u/s 143(1) of the Act is concerned, we find in the case of Kalpesh Synthetics (P.) Ltd. [ 2022 (5) TMI 461 - ITAT MUMBAI ] has held that the Assessing Officer could not make disallowance based on observations made in tax audit report that payments were made after due date specified under respective Acts. Thus direct the AO to delete the disallowance on account of IPO cost u/s 37(1). Grant of credit of DDT u/s 115-O - assessee at the outset submitted that since no credit was given, a direction may be given to the Assessing Officer to follow the due procedure - HELD THAT:- DR has no objection. Accordingly, we restore this issue to the file of the Assessing Officer with a direction to verify the record and give appropriate credit of the DDT as per fact and law. Needless to say, the Assessing Officer shall give due opportunity of being heard to the assessee and decide the issue as per fact and law.

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• 2025 (2) TMI 861
  Additions u/s 68 - unexplained cash credit - CIT(A) deleted addition - HELD THAT:- On perusal of the order of CIT(A), we found that there are justifiable reasons for which the additional evidence could not be furnished before the AO, whereas the same were submitted before the First Appellate Authority. Additional evidence so furnished by the assessee are under due compliance of the prescribed procedure of the law, such submission along with evidence are duly forwarded to the AO also, but there was no response by the AO, even after a reminder issued by the Ld. CIT(A). We, therefore, are of the considered opinion that Ld. CIT(A) had rightly taken into consideration the additional evidence furnished by the assessee to adjudicate the issues. Decided against revenue.

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• 2025 (2) TMI 860
  Disallowance of interest u/s 201(1A) - addition on account of interest paid on late deposit - HELD THAT:- Similar issue has been dealt in the case of CIT Vs. Chennai Properties Investment Ltd. [ 1998 (4) TMI 89 - MADRAS HIGH COURT ] wherein as held that, interest u/s 201(1A) paid by the assessee does not assume the character of business expenditure and also cannot be regarded as compensatory in nature. Respectfully in the case of CIT Vs. Chennai Properties Investment Ltd. [ 1998 (4) TMI 89 - MADRAS HIGH COURT ] we hold that, the interest paid on late payment of TDS is not an expenditure wholly and exclusively incurred for the purpose of business and further it is a payment, which is in the form of tax, so it is not an allowable expenditure. Therefore, the contention of the assessee is not acceptable on this count. Alternate argument of the assessee is that, the assessment year under consideration is an unabated year and there was no incriminating material before the AO for the year under consideration - Assessment year under consideration is an unabated year and there was no incriminating material before the AO for the year under consideration. Therefore, no addition can be made in the hands of the assessee in absence of any incriminating material. The similar issue had been dealt with by CIT Vs. Abhisar Buildwell (P) Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT ] has held that, in case of unabated year, in search proceedings, no addition can be made in the hands of the assessee in absence of any incriminating material. Therefore as there was no incriminating material with the AO for the year under consideration, no addition can be made in the hands of the assessee by the Ld. AO. Accordingly, we delete the addition made by the Ld. AO. Validity of issue of notice u/s. 153C - We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have also gone through the copy of warrant and Panchanama submitted by the Ld. AR and found that, the same has not been issued / made on the name of the assessee. Therefore, we are of the concerned opinion that, the case of the assessee is not covered u/s.153A of the Act and is covered u/s.153C of the Act. Accordingly, we dismiss this ground of the assessee. Addition u/s.69C - On account of balance addition, CIT(A) found that, the assessee had cash balance as on 31.03.2015; which was available with the assessee as on 01.04.20217 also. Therefore, the Ld. CIT(A) held that, the assessee had enough cash in hand to justify the source of the said balance of Rs. 68,30,000/- also. Accordingly, the Ld. CIT(A) deleted the addition of Rs. 3,51,30,000/-. Further, with regard to addition CIT(A) found that, those amounts were reflecting mere projection only and were not related to any actual payment. CIT(A) further stated that, the Ld. AO did not brought any material on record to prove that, the same were actual payments and made in cash. CIT(A) hold that, the addition is liable to be deleted. Accordingly, he deleted the same. In alternate plea, the Ld. CIT(A) stated that, even if assuming that the payments were actual, the assessee was having enough cash balance as on 01.04.2017 as stated above, to justify the source of cash payment. Accordingly, the Ld. CIT(A) deleted the addition also.

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• 2025 (2) TMI 859
  Denial of registration u/s 12A/12AA - assessee claimed deduction of City Environment Expenses which the AO disallowed - HELD THAT:- We find that the same is already decided in assessee s favour [ 2019 (11) TMI 271 - ITAT INDORE] for earlier AY 2011-12 held AO himself in the body of the assessment order, has given a finding that the facilities on which such City Environmental Development and Preservation Expenses have been incurred are not an item of sale or revenue generating item. Thus, by giving this finding, the AO has impliedly accepted the claim of the appellant that these expenditure are in the nature of sunk cost in the hands of the Appellant. I find force in the contention of the appellant that these expenditure have been incurred by the appellant in pursuance of its main objective of development of notified area. Further, by incurring these expenditure, the appellant authority would not be deriving any revenue in future as is the finding of the AO himself. Further, these expenditure cannot be said to be income generating apparatus of the appellant authority and in my view, by incurring these expenditure, the appellant would not be deriving any benefit of enduring nature. Also find that these expenditure have consistently been claimed by the appellant for the last many years and even in the subsequent ears these expenditure have been claimed by the appellant. It has been claimed that the assessments of the appellant since A.Y. 2003-04 are consistently being framed u/s 143(3) and in none of the assessments, any adverse view on this issue has been taken by any of the AOs. It has further been contended that all these assessment orders were also subject matter of appeals before the appellate authorities. From the copies of the assessment orders of various other assessment years filed by the appellant before me, I found that in none of the other assessment years, any part of these expenditure have been disallowed for the reasons has brought down by the AO in the instant case. AO cannot be permitted to take a different view from that consistently taken by his predecessors. Thus we uphold the deletion of disallowance made by CIT(A). The revenue s grounds qua this issue are dismissed. Deduction of Contribution Aid Expenses given to other bodies/institutions disallowed - HELD THAT:- As respectfully following the judgment of M/s. Indian Farm Forestry Development [ 2018 (12) TMI 762 - DELHI HIGH COURT] are of the considered view that the alleged amount should be allowed as business expenditure as it indirectly help to increase business of the assessee authority. Thus, disallowance stands deleted. Deduction of IMC Transfer Expenses - assessee debited to its P L A/c certain expenses incurred by it for the Schemes transferred to Indore Municipal Corporation (IMC) and claimed deduction under the heading IMC Transfer Expenses - HELD THAT:- The expenses incurred by assessee are prima facie for its own purpose although they have been incurred after transfer of schemes to IMC. Ld. AR s submission is also meritorious that the assessee is a wing of State Govt.; the assessee maintains every voucher/document of expenses incurred; the assessee s accounts are duly audited by various auditors; there is a system of approval of every penny spent at all levels by authorities; every expenditure is incurred as per pre-set procedure which includes inviting bids/tenders. Therefore, there cannot be any doubt qua the necessity and genuineness of expenses incurred by assessee. Even in assessment-order, the AO has not doubted the genuineness of expenses claimed by assessee. That apart, it is also noteworthy that the assessee has claimed such expenses consistently in earlier years and the assessing authority has allowed the same in scrutiny assessments u/s 143(3). The disallowance has been made for the first time in AY 2014-15 without any change in facts. It is an accepted principle that the tax authorities have to be consistent in approach unless there is any change in facts or law. We find that the Ld. CIT(A) has deleted AO s disallowance by taking a judicious approach having regard to these facts. Therefore, we do not find any reason to interfere in the order of CIT(A), the same is hereby upheld. Deduction of Land acquisition and diversion Expenses - CIT(A) deleted addition - HELD THAT:- AO has himself noted in assessment-order that the expenses claimed by assessee are forming part of WIP/stock, therefore when it is so the claim of assessee is revenue-neutral because on one hand the assessee has debited expenditure to P L A/c and on other hand there is a credit in P L A/c in the form of WIP/stock. Ld. AR submitted that no disallowance is warranted in such a situation when there is effectively no claim by assessee. We find sufficient merit in the submission of Ld. AR. We agree that once the impugned expenses are included in closing inventory, effectively there is no deduction claimed by assessee and no disallowance is warranted. Therefore, the deletion made by CIT(A) is valid.

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• Customs

• 2025 (2) TMI 888
  Classification of imported goods - whether, the same merits classification under Customs Tariff Item (CTI) 2309 9090 as claimed by the appellants; or, is it classifiable under Customs Tariff Heading (CTH) 29.36 as determined by the learned Commissioner of Customs, for deciding on the appropriate levy of customs duty? - it was held by CESTAT that The impugned goods are classifiable under 2309 9090 of the First Schedule to the Customs Tariff Act, 1975. - HELD THAT:- There are no good ground and reason to interfere with the impugned judgment, especially in the light of Circular No. 188/22/96-CX dated 26.03.1996. Hence, the present appeals are dismissed.

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• 2025 (2) TMI 887
  Correctness of order of release of gold when the respondent has failed to establish their ownership of the said gold and has failed to substantiate that the gold bars are not smuggled one - proper appreciation of provisions of Section 110A of the Customs Act, 1962 at the time of passing the order for release of gold - burden of proof in terms of Section 123 of the Customs Act - HELD THAT:- It is found from the impugned order that the learned Tribunal has endeavoured to verify the genuineness of the challans submitted by the respondent and the respondent was directed to produce copies of the preceding and succeeding challans issued and accordingly, the respondent produced challans in respect of serial numbers 220, 221, 222 and 223 at the time of personal hearing before the Tribunal. The learned Tribunal on facts found that the challans were serial in number and the signatures of the authorized signatory available in challan nos. 220, 221 and 222 were tallying. Therefore, the learned Tribunal came to the conclusion that the respondent had prima facie established that they have issued the challans bearing Gate Pass No. RM/2023-24/KOL/222 dated 11.10.2023 for the purpose of job work of the 4 gold bars of 1 kg. each through M/s. Kalyan Jewellers. Further, the learned Tribunal verified the challans and found that the gold bars having mark/numbers as 4400493-96 were issued for job work by the respondent. Further, the same marks and numbers were also found to be available in the packing list issued by M/s. Brinks India Pvt. Ltd. at the time of release of the 14 kgs. of gold bars to the respondent. Therefore, the learned Tribunal came to the prima facie conclusion of correlation between the 4 kgs. of gold bars purchased by them from HDFC Bank Ltd. and the gold seized by the officers on 11.10.2023. Taking note of the prayer made by the respondent being one for provisional release of the seized goods and noting that the respondent has prima facie established correlation between the 4 kgs. of gold bars purchased by them from M/s. HDFC Bank Ltd. and the 4 gold bars seized by the officers, the Tribunal came to the conclusion that the goods can be provisionally released subject to certain conditions to safeguard the interest of revenue. Conclusion - The Tribunal had appropriately considered the evidence and made a reasoned decision based on the facts presented. Appeal dismissed.

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• 2025 (2) TMI 886
  Classification of Wheat Flour Sheet Dough imported by the Petitioner - seeking withdrawal of impugned Seizure Memo - HELD THAT:- When no Show Cause Notice is issued, to ask the importer to furnish a Bank Guarantee even to secure the anticipated redemption fine and anticipated penalties, would be rather harsh. We are, therefore, of the view that interest of justice would be served if the said goods imported by the Petitioner under all six Bills of Entry [listed at items (a) to (f) of paragraph 2 of this order] are allowed to be provisionally released on the Petitioner executing a Provisional Duty Bond as per the assessable value of all six Bills of Entry and a Bank Guarantee equivalent to a sum of Rs.85 Lakhs. This Bank Guarantee would secure the Revenue for approximately 50% of the differential duty, if payable by the Petitioner. It is accordingly so ordered. The Provisional Duty Bond as well as the Bank Guarantee shall be furnished by the Petitioner to Respondent No. 3 within a period of one week from today. On the aforesaid Bond and Bank Guarantee being furnished, the Customs Department shall provisionally release the said goods of the Petitioner covered under the aforesaid six Bills of Entry within a period of one week thereafter. Conclusion - The provisional release of the goods imported under all six Bills of Entry allowed, upon the Petitioner s execution of a Provisional Duty Bond and a Bank Guarantee equivalent to Rs. 85 Lakhs. Petition disposed off.

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• 2025 (2) TMI 885
  Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - certificate had been incorporated in an earlier bill of entry - violation of regulation 10(k) of Customs Brokers Licensing Regulations, 2018 - HELD THAT:- The grounds on which the licensing authority has held that the customs broker to have breached regulation 10(k) of Customs Brokers Licensing Regulations, 2018 does not appear to fit in with the framework of the said regulation which mandate that the enumerated details be maintained in an orderly and itemized manner as specified by the designated officials. There is nothing on record to establish that a method of maintaining upto date records had been prescribed by any of the said authorities. In the absence of such specifics, there is no standard against which a breach could be noticed and taken cognizance of. The finding that it was not strain of pandemic which caused this double filing of bill of entry and that the absence of any records in the systems of the customs broker was the consequence of deliberate erasure has not been proved and is only surmise. In either situation, there is no finding as to the manner in which regulation 10(k) Customs Brokers Licensing Regulations, 2018 has been breached. The revocation of licence and other detriments do not survive - the impugned order is set aside - appeal allowed.

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• 2025 (2) TMI 858
  Evasion of duty by undervaluation - competency of DRI officials causing show cause under the Customs Act, 1962 - HELD THAT:- When the matter is taken up for hearing for consideration by this Court today, it is brought to the notice of this Court by the learned standing counsel representing the Customs Department that the Hon ble Supreme Court has disposed of Mangli Impex [ 2016 (8) TMI 1181 - SC ORDER ] case holding the officials of DRI are competent to issue show cause notice under the Customs Act, 1962, and also permitted the Department to adjudicate the issue on merits. Therefore, the learned standing counsel appearing for the Customs Department informs this Court that he has been instructed by the Department to withdraw the appeal with liberty to proceed with adjudication on merits as directed by the Hon ble Supreme Court in Review Application petition No.400/21 filed by the Commissioner of Customs vs. Canon India Private Limited [ 2024 (11) TMI 391 - SUPREME COURT (LB) ] (Mangli Impex Case). The communication from the Department dated 29.01.2025 is also placed before this Court for consideration. The Customs Department is permitted to withdraw the appeal and proceed with the adjudication as per the Orders of the Hon ble Supreme Court in Review Application petition No.400/21 filed by the Commissioner of Customs vs. Canon India Private Limited - appeal dismissed as withdrawn.

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• 2025 (2) TMI 857
  Delay in adjudication of SCN - After almost 12 years since issuing the impugned SCN and about 10 years after filing of the detailed reply to the same, the respective proceedings against the Petitioners were concluded - whether the delay in adjudication was justified? - HELD THAT:- The issue raised in the petition is no longer res-integra. Section 28(9) of the Act, unamended and amended, have been considered in detail by the Coordinate Benches of this Court in Swatch Group India Pvt. Ltd. [ 2023 (8) TMI 864 - DELHI HIGH COURT ] as also M/s Vos Technologies India Pvt. Ltd. v. The Principle Additional Director General Anr., [ 2024 (12) TMI 624 - DELHI HIGH COURT ] where it was held that The legislature in its wisdom has provided a specific period for the authority to discharge its functions. The indifference of the concerned officer to complete the adjudication within the time period as mandated, cannot be condoned to the detriment of the assessee. Such indifference is not only detrimental to the interest of the taxpayer but also to the exchequer. Coming to the facts of this case, the impugned SCN dates back to 20th June, 2012. The Petitioners had made several requests for providing all the RUDs with the concerned assessing authority. The personal hearing was scheduled on several dates between July, 2012 and March, 2015. Thereafter, the Petitioners are stated to have filed their respective detailed replies to the impugned SCN. Personal hearing was conducted on 17th July, 2014 and 30th March, 2015. Despite the repeated personal hearings scheduled and conducted by the concerned adjudicating officer, the impugned SCN was not adjudicated between 2012 and 2015. It is noted that the Mangli Impex [ 2016 (5) TMI 225 - DELHI HIGH COURT ] decision came only on 3rd May, 2016 and the matter has been placed in the Call Book only thereafter. The impugned SCN was then taken out of the Call Book sometime in 2019 pursuant to the letter dated 15th April, 2019 issued by the Chief Commissioner, Delhi Zone. The Customs Department has argued that the Petitioners were granted repeated opportunities for personal hearing, however, the Petitioners delayed the adjudication of the present matter by requesting for additional documents. As per the Customs Department, the delay in adjudication of the present matter is not due to any inaction on part of the assessing authority. The continued insistence of the Petitioners for additional documents coupled with the fact that the matters was put in the Call Book for long period has resulted in the delay which is beyond the control of the assessing authority - The impugned SCN, which was issued way back in 2012, due to repeated placing in the call book has not been adjudicated for so long. Repeated placing and removing from the call book is not a valid justification for non-adjudication of the impugned SCN for about 15 years. Moreover, the gaps between the said periods is also inexplicable. Hearing notices have been given to the Petitioners but there is no reason for non-adjudication of the impugned SCN for long period. Further, the Co-ordinate Bench of this Court in Vos Technologies has rejected the argument of the Customs Department that the delay in adjudication occurred solely due to the repeated request from the assessee for additional documents. Conclusion - i) The statutory timelines for adjudication are mandatory and cannot be bypassed by administrative delays or procedural lapses. ii) The impugned SCN dated 20th June 2012 and the Order-in-Original dated 26th March 2024 were quashed due to the delay in adjudication. Petition allowed.

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• 2025 (2) TMI 856
  Valuation of Customs duty - inclusion of royalty and technical fees paid by the Appellant to their foreign supplier, in the transaction value of imported goods under Rule 10(1)(c) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (CVR) - HELD THAT:- Rule 10(1)(c) of the Valuation Rules provides for addition to the price actually paid or payable for imported goods if royalties and license fees related to the imported goods. However, the Rule 10(1)(c) also requires that such amounts are those that the buyer is required to pay, directly or indirectly as a condition of the sale of the goods. There has to be a nexus between the goods imported with the royalties or license fees. The payment of royalty and licence fees should be a condition of sale with respect to the goods imported. The Tribunal Mumbai in the case of BASF India Pvt. Ltd. Vs. Commissioner of Customs (Imports), Mumbai [ 2013 (4) TMI 712 - CESTAT MUMBAI ], has held that royalty charges for technical-how paid are not to be added to the assessable value of imported goods as there is no restriction for procuring the raw-materials from any source of choice of the importer. In the case of Brembo Brake India Pvt. Ltd. Vs. Commissioner of Customs (Imports), Mumbai [ 2014 (11) TMI 22 - CESTAT MUMBAI ], the Tribunal has held that royalty is not includable in assessable value when royalty or technical know-how was paid only for manufacture of sub-assembly of Disc Brake Systems and payment of royalty and other charges are not related for imported goods and not a condition of sale of goods. Even in this case, the entire Agreement is only for technical assistance and a detailed analysis made by the Ld. Adjudicating Authority indicated that only 9% of the value of the final products are from the import. The entire Agreement is only for sending technical personnel whose main function is to get the approval of the products manufactured by the Appellant from M/s. Hyundai Motor India Limited. There is no relation or connection between the technical assistance taken by the Appellant to the imported goods and how the condition of sale of goods is satisfied, no evidence is forthcoming. Conclusion - The payments for technical assistance is not includible in the transaction value of the imported raw materials to demand any differential customs duty. Appeal allowed.

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• Corporate Laws

• 2025 (2) TMI 855
  Seeking enlargement of bail - Siphoning of public money - active and managerial role in the offences by making misrepresentation to the banks in obtaining loans and siphoning the funds using puppet companies and by writing off the stocks and inventories - offence punishable under Section 447 of the Companies Act - HELD THAT:- This court feels that the present petition being one seeking personal liberty during the trial, it would be suffice to restrict the consideration of such materials to decide the question whether the petitioner is entitled to grant of bail. A perusal of the materials would disclose that the present petition is the fifth one and on rejection of earlier three petitions, the petitioner appears to have approached the Apex Court, however, could not succeed in obtaining bail and the subsequent bail petition moved by him before the Apex Court was withdrawn seeking liberty to move the trial Court. Such application moved by the petitioner before the Trial Court also stood dismissed and thereupon, the present petition has been filed by the petitioner. It is not a simple case where the petitioner was charged only for nonrecovery of certain outstanding amounts from the debtors, but, the petitioner is alleged to have indulged into cheating of Banks and siphoning off the public money using puppet Companies, writing off the stocks, inventories and receivables and thereby, he is facing serious economic offences and fraud of a great magnitude. Though investigation has been completed in the case, the presence of the petitioner is very much required at the stage of framing of charges and the evidence like statements given by witnesses to the SFIO and the communication addressed by the petitioner to the Banks would clinchingly establish the role played by the petitioner and the control he has over the witnesses and thus the petitioner has not complied with the twin conditions stipulated under Section 212(6) of the Companies Act, 2013 and in the event of grant of bail to the petitioner, there is every possibility for the evidence being tampered and the witnesses being influenced by him. On the aspect of long incarceration and application of the decision in V. Senthil Balaji vs. The Deputy Director, Directorate of Enforcement [ 2024 (9) TMI 1497 - SUPREME COURT] , it has been brought to the notice of this court that the Apex Court has granted bail in that case considering the long incarceration of the petitioner therein coupled with the aspect that the trial in that case could be delayed due to the fact that existence of proceeds of crime under Section 3 of PMLA can be proved only if the scheduled offence is established and even if the trial of the case under PMLA proceeds is concluded, it cannot be finally decided, unless the trial of scheduled offences concludes and the dictum laid down in Senthil Balaji s case is not applicable to the present case as the trial in the present case, being one for offences under Companies Act, is not dependent on proving offences under any other Act and thereby the concept of long incarceration alone cannot be a ground for grant of bail. Grounds of parity - HELD THAT:- So far as the question of parity in consideration, the petitioner pleads that a co-accused viz., A30-Devarajan has been granted bail by this court. However, it has been brought to the notice of this court by the respondent that such order has been under challenge before the Apex Court in SLP (Crl.) Diary No.21112 of 2023 and the same is pending. This court has also been apprised by the respondent that other co-accused viz., A4-Dineshchand Surana and A5-Vijayraj Surana, who failed before this court in their consecutive bail applications, had moved the Apex Court and their petitions in SLP (Crl.) No.15535 of 2024 and SLP (Crl.) No.17007 of 2024 respectively are pending as on date and thus, the Apex Court has seized of the matter. Conclusion - The petitioner is alleged to have indulged into cheating of Banks and siphoning off the public money using puppet Companies, writing off the stocks, inventories and receivables and thereby, he is facing serious economic offenses and fraud of a great magnitude. This court finds that the present petition seeking bail cannot be entertained in the circumstances of the case. Petition dismissed.

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• Insolvency & Bankruptcy

• 2025 (2) TMI 854
  Challenge to action of the respondent, Union of India-Directorate General Married Accommodation Project, New Delhi, in cancelling the contract awarded on the ground of delay in its completion - petitioner raise a grievance that the termination of contract by the impugned letter is a unilateral act and is based on false, frivolous and unsubstantiated grounds, and is in complete violation of the contract executed between the parties - HELD THAT:- The Acquisition Agreement is placed on record along with the petition at Exhibit-E, and it record that Mr. Swapnil Waghchoure carrying proprietary business of electric contract in Nashik has agreed to take over the business of the Corporate Debtor under liquidation as a going concern and it extended to all assets of the debtor including but not limited to current assets, deposits, loans and advances, secured to or available with the Corporate Debtor as also all statutory and regulatory approvals, license, agreements, permissions, clearances, registration, plant and machinery, utilities, vehicles, furniture, accessories and related infrastructure as well as all intellectual property and goodwill. In Ghanshyam Mishra [ 2021 (4) TMI 613 - SUPREME COURT ], the dominant object of Insolvency and Bankruptcy Code, 2016 was discerned, to be the revival of the Corporate Debtor, and make it a running concern and this contemplated a preparation of resolution plan based upon the out put of the Company of Creditors (COC) - A clear position of law has emerged from the said decision to the effect that on the date of the approval of the resolution plan by the Adjudicating Authority, all such claims which are not part of the plan shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim which is not part of the resolution plan. The aforesaid decision revolves around the resolution plan and the finality attached to it under the Code and do not deal with the liquidation proceedings. The agreement is signed between the liquidator and Mr. Swapnil Wagchoure as a proprietor of M/s Swapnil Electricals and Contractors, is accompanied with the Schedules as regards the assets and liabilities of the Corporate Debtor and it clearly record that all the contracts in favour of the Corporate Debtor were terminated by the respective Government Department prior to initiation of CIRP, and when the liquidator filed an appeal in the pending IBC proceedings, for revocation of the termination of contract and permission to execute it in favour of the Corporate Debtor, NCLT granted a stay on further action by the respective Government Departments in any of the concerned contract. The Government Departments forwarded recovery notices of more than INR 100 Crore against the terminated contract, which was allowed to be dealt with subsequently - The tribunal directed that the liquidator with respect to the recovery of material on site on the settlement appeal various government departments have issued in favour of Pingle Builders Pvt Ltd, a demand draft of Rs. 15,00,000/-. Conclusion - The Petitioner is no longer in existence, and had been replaced by the acquirer. All the contracts in favour of the Corporate Debtor were terminated by the respective Government Department prior to initiation of CIRP, and when the liquidator filed an appeal in the pending IBC proceedings, for revocation of the termination of contract and permission to execute it in favour of the Corporate Debtor, NCLT granted a stay on further action by the respective Government Departments in any of the concerned contract. Petition dismissed.

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• 2025 (2) TMI 853
  Condonation of 205 days delay in refiling of Company Appeal - sufficient cause of the delay - HELD THAT:- In the present facts of case where delay in refiling is indisputably and unduly prolonged for 205 days, it becomes incumbent on the Bench to be satisfied with the cogency and plausibility of the reasons set forth by the Applicant to explain the delay. It is found that on each of the dates on which scrutiny was undertaken by the NCLAT Registry, the defects noticed by the Registry were intimated on the very same date to the Applicant and seven days time period was allowed each time to correct the defects. Most of the defects pointed out are clerical and routine in nature such as illegible/dim copies, incorrect indexation, non-pagination, non-filing of caveat clearance, non-filing of declaration and verification supporting of memorandum of appeal etc. - The very fact the Registry had to repeatedly intimate the same set of defects each time shows that the Applicant did not take proper interest in pursuing his own application in a timely manner. Neither has any explanation been given to show that the delay was on account of reasons beyond the control of the Applicant. This not only indicates the casual disposition of the Applicant but also their gross indifference towards the need of respecting timeliness in the completion of the insolvency resolution process which is one of the avowed objectives of the IBC. Such a lack-lustre, careless and negligent approach does not meet our countenance. Under IBC, CIRP is envisaged to be a time-bound process which has to be completed in 330 days. Allowing refiling delay of 205 days without convincing reasons would tantamount to encouraging parties to play havoc with timelines and put unwarranted speed-breakers in the resolution process which does not commend. In the given circumstances, it is required to allow the Applicant the luxury of 205 days delay in refiling in IBC proceedings. Conclusion - The Applicant failed to demonstrate sufficient cause for condonation of the 205-day delay in refiling the appeal. There are no merit in the Application filed for seeking condonation of 205 days delay in refiling the appeal. Sufficient grounds have not been made out for condonation of delay in refiling - application dismissed.

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• PMLA

• 2025 (2) TMI 852
  Money Laundering - challenge to order taking cognizance - HELD THAT:- As of today, the position is that though complaint was filed on 5th October 2024, an order taking cognizance is not in existence. The respondent has acted upon order dated 7th February, 2025 by making application dated 7th February, 2025 before the Special Court, requesting the Court to take cognizance. Now, the Special Court will have to examine the case again. As there is a sanction, the issue to be considered will be whether the sanction is valid. All this will have to be examined by the Special Court. Appellant is in custody from 8th August, 2024. Order taking cognizance passed by the Special Court has been set aside by the High Court and by acting upon the order of the High Court, a fresh application has been moved by the respondent for taking cognizance. The said application is yet to be heard by the Special Court. In view of these peculiar facts, custody of the appellant cannot be continued. As there are serious allegations against the appellant, appropriate stringent terms and conditions can be imposed by the Special Court - the respondent are directed to produce the appellant before the Special Court within a period of one week from today. The appeal stands allowed.

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• 2025 (2) TMI 851
  Challenge to order of provisional attachment of the property of the appellant - High Court has declined to entertain the writ petition under Article 226 of the Constitution of India - HELD THAT:- The High Court ought not to have rejected the petition on the ground that the statutory period provided under sub-Section (5) of Section 5 of the Prevention of Money-laundering Act, 2002 had not expired before the writ petition was filed. The High Court ought to have noticed that there was no statutory remedy available to the appellant to challenge the order of provisional attachment. Therefore, the impugned order is set aside and Civil Writ Petition restored to the file of the Punjab and Haryana High Court at Chandigarh. The restored petition shall be listed before the roster Bench of the High Court on 21st February, 2025 in the morning. The appellant and the respondents shall be under an obligation to appear before the roster Bench on that day. No further notice shall be served upon them. The Appeal is partly allowed.

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• Service Tax

• 2025 (2) TMI 850
  Constitutional validity of sub-clauses (zzzzv) (zzzzw) of clause 105 of Sec. 65 of the Finance Act 1994 - authority of Parliament to introduce levy of service tax on certain services - appellants argue that the subject matter of impugned provisions of the Act in pith substance would fall within the precincts of State Legislative power under Entries 54 62 of List II, Schedule VII of the Constitution of India - HELD THAT:- By virtue of the amendment, the services enumerated in the impugned clauses were brought within the Service Tax net, so that on and from the commencement of the Amendment Act, the services enumerated therein came to be subjected to levy of said tax. Entry 97 of List I is a residuary Entry under which Parliament is empowered to make laws in respect of any matter not enumerated in List II or List III, including any tax not mentioned in either of those laws. But Entry 54 of List II specifically deals with taxes on the sale or purchase of goods other than newspapers, subject to the provisions of Entry 92A of List I, is a subject on which the State Legislature can enact laws. Entry 97 of List I derives its powers from Article 248 of the Constitution which gives power to the Parliament to make a law imposing a tax, not mentioned in either of two other lists namely List II and III and therefore Service Tax is leviable by the part. It has been well settled by now that there can be no question of conflict solely on account of two aspects of the same transaction being utilized by two legislatures for two levels, both of which may be taxes, fees or one which may be a tax and the other a fee falling within two fields of legislation, respectively available to them, as observed by the learned Single Judge at para 25 of the impugned order. There may be more than one taxable events in a single transaction, involving different kinds of taxes and different aspects of taxation. The Apex Court in IMAGIC CREATIVE PRIVATE LIMITED vs. COMMISSIONER OF COMMERCIAL TAXES [ 2008 (1) TMI 2 - SUPREME COURT ] has said that the payment of service tax and remittance of VAT are mutually exclusive, the nature of levies being different. Different aspects of a single transaction can be taxed under different statutes. Conclusion - i) There can be levy of more than one tax on a subject matter, if incidence of each of the taxes is different from the other and such taxes may be imposed under different statutes. ii) Sales Tax can be levied by the State Government and the State Legislature is competent to enact law with regard to levy of Sales Tax. When State Government imposes tax on sale of goods, it does not do so on the service aspect of the sale. iii) The constitutional validity of the impugned provisions upheld. Appeal dismissed.

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• 2025 (2) TMI 849
  Refund of unutilized accumulated credit - rejection of refund claim as ineligible input service in terms of Rule 2(l) of Cenvat Credit Rules, 2004 being no nexus with the exported output services without taking any recourse to Rule 14 ibid - HELD THAT:- An identical issue came up for consideration before this Tribunal in the matter of BNP Paribas India Solution Pvt. Ltd. vs. Commissioner of CGST, Mumbai East [ 2021 (12) TMI 676 - CESTAT MUMBAI ] in which this Tribunal while allowing appeal of the appellant therein allowed refund claim under Rule 5 ibid by holding that since provision of Rule 14 ibid has not been invoked refund of cenvat credit, as claimed by the appellant under Rule 5, cannot be denied. In the appellant s own case State Street Syntel Services Pvt. Ltd. vs. Commissioner of CGST Service Tax, Navi Mumbai [ 2023 (12) TMI 569 - CESTAT MUMBAI ], while taking note of the decisions of this Tribunal, this Tribunal allowed the appeal of the appellant and held that denial of cenvat credit can be done by issuance of notice under Rule 14 ibid and it cannot be rejected solely under Rule 5 ibid. It is settled principle that there cannot be two different yard sticks i.e. one for allowing the credit and other for deciding the refund and therefore the refund claim cannot be rejected on the ground of admissibility of the input service at the stage of processing of refund claim. Once credit when availed remains unchallenged, the assessee becomes entitled to the refund of the same in terms of Rule 5 ibid r/w Notification No.27/2012-CE (NT) dated 18.06.2012. The eligibility of input services to claim cenvat credit thereon cannot be questioned or examined during sanction of the refund claims, if the same was not challenged when it was availed on such input services. Conclusion - i) Since Rule 14 was not invoked by the department, the refund of Cenvat credit claimed by the appellant under Rule 5 cannot be denied. ii) There cannot be two different yard sticks i.e. one for allowing the credit and other for deciding the refund and therefore the refund claim cannot be rejected on the ground of admissibility of the input service at the stage of processing of refund claim. The impugned order is liable to be set aside - Appeal allowed.

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• Central Excise

• 2025 (2) TMI 848
  Wrongful availment of credit on GTA service - short payment of service tax under RCM on GTA - wrong utilization of higher education cess and secondary education cess of duty for payment of central excise duty - non-reversal of Cenvat Credit under the provisions of Rule 6(3) of the Cenvat Credit Rules, 2004 - penalty imposed under Section 77 of the Finance Act, 1994 - extended period of limitation. Invocation of extended period of limitation - HELD THAT:- In the present case, demand has been confirmed by invoking the extended period of limitation, whereas the Revenue has failed to establish any of the ingredients which is required to invoke the extended period to confirm the demand - it is found that in the show cause notice as well as in impugned order, the only ground stated for invoking the extended period is that had the audit not been conducted by the department, the Cenvat Credit wrongly availed would have gone unnoticed. There is no discussion whatsoever on the allegation of suppression of material facts with intent to evade payment of duty. CENVAT Credit on outward transportation - HELD THAT:- This issue was under litigation and there were contrary judgments of various Courts and the issue was referred to the Larger Bench in the case of M/S. THE RAMCO CEMENTS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUDUCHERRY [ 2023 (12) TMI 1332 - CESTAT CHENNAI-LB] and the Larger Bench of the Tribunal after considering all the judgments of the High Courts and Supreme Court and Circular dated 08.06.2018 issued by the Board, has held that admissibility of Cenvat Credit on GTA service is to be considered by the adjudicating authority on the basis of the facts produced before the said authority. When the issue in dispute is under the consideration of the Court and there are contrary decisions, it is a settled law that extended period cannot be invoked. Conclusion - It has been consistently held by the Courts that in revenue neutral situation, the demand invoking extended period of limitation is not invokable as held in the case of Commr vs. Ultra Tech Cement Ltd [ 2018 (2) TMI 117 - SUPREME COURT] , wherein it was held that when the issue is under litigation, extended period is not invokable and the penalty is not imposable. The entire demand is barred by limitation - appeal allowed only on limitation without going into the merits of the other allegations.

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• CST, VAT & Sales Tax

• 2025 (2) TMI 884
  Challenge to assessment order - authorization given to the Deputy Commissioner, Guntakal was not available in a valid format - HELD THAT:- In the present case, the turnover of Rs. 4.54 crores, being the turnover relating to sale of alcohol and the turnover relating to sale of food has been taxed. The sale of alcohol, in the State of A.P., under the A.P. VAT Act, was to be taxed under Schedule VI at the point of first sale in the State . This sale would be the sale between M/s. Andhra Pradesh Beverages Corporation Limited and the petitioner. The subsequent sale of liquor by the petitioner to his customers would not be exigible to tax. Explanation-II to the definition of taxable turnover stipulates that the sale prices relating to second and subsequent sale of goods, enumerated in Schedule VI, shall not form part of taxable turnover . This would mean that the entire turnover of Rs. 4.54 crores, which is on account of sale of alcohol would have to be excluded from the taxable turnover of the petitioner. This would leave a turnover of Rs. 1,02,20,407/-, which is the turnover relating to sale of food. As the turnover in question, is less than Rs. 1.5 crores per year, the same would be taxable only under Section 4 (9) (d). Conclusion - The sale of alcohol was taxed at the point of first sale and subsequent sales were not taxable. Therefore, the turnover from alcohol sales should be excluded from the taxable turnover, leaving only the turnover from food sales, which was below the threshold for the higher tax rate. The matter remanded back to the assessing authority to pass fresh assessment orders by excluding the turnover of Rs. 4.54 crores arising out of sale of liquor from the turnover on which tax is levied - petition partly allowed by way of remand.

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• 2025 (2) TMI 883
  Scope of Revision Petition - Set Top Boxes (STBs) are goods within the meaning of section 2(15) of the Karnataka Value Added Tax Act, 2003 or not - consideration for transfer of right to use STB - mutual exclusiveness of service tax and VAT - retrospectivity of Government notification dated 15.03.2021. Scope of Revisional Jurisdiction - HELD THAT:- Revision is more a matter of power of the Revising Authority than the right of revisionist. Several Statutes provide for suo moto Revision whereas suo moto Appeals are almost unknown - The scope of Appeal or Revision depends upon the text of the provision of a statute which creates the right of Appeal, or vests revisional power. It has been a long settled position of law that normally scope of Appeal is wider than that of Revision. Ordinarily, first appeal is both on law and facts unless the statute otherwise says. Thumbnail description of Section 65 - HELD THAT:- In terms of order on Revision, Assessment Orders have to be modified and any excess payment has to be refunded to and any deficit is to be made good by the Assessee, says Sub-section (9). Sub-section (10) (a) provides for review of the order made on Revision on the basis of facts that were not there when the Revision was decided. Sub-section (10) (b) empowers the government to make rules prescribing limitation period for Review and the manner in which Review should be preferred. Sub-section is on par with section 152 of Code of Civil Procedure, 1908 and it provides for rectification of mistakes in the order made in Revision. This would include order made in review as well. Rectification can be sought for at any time within five years; before effecting rectification, stakeholders need to be heard. Sub-section (12) provides for discretionary levy of cost while making orders on Revision. Question of law within the meaning of section 65 - HELD THAT:- It is well settled that a question may be treated as of law even if in Salmondian sense, it is not: when a finding of fact is recorded without evidence or contrary to evidence or founded on inadmissible evidence, ordinarily they are treated as questions of law. It may also arise when, on the basis of evidentiary material on record, no reasonable person in the armchair of the authority would have entered a finding, that has a bearing on the outcome of the proceeding. These are only illustrative. It is the specific case of Assessees that a finding in the form of answers in the affirmative has been recorded to the above questions without or contrary to evidentiary material; this has been done in disregard of decisions of Apex Court and High Courts. Therefore, it is opined that the preliminary objection as to maintainability of the Revision Petitions is not sustainable. Whether a set top box is goods u/s 2(15) of the Act - HELD THAT:- A Set Top Box is an appliance between cable outlet and a subscriber s receiver, cannot be disputed. Regulation 2(z) of the Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) Regulations, 2012 defines Set Top Box means a device, which is connected to, or is part of a television and which allows a subscriber to receive in unencrypted and descrambled form subscribed channels through an addressable system - It is not out of place to refer to a Central Government Office Memorandam dated 13.08.2014 which says that STBs fall within the definition of goods for the purpose of Central Sales Tax Act, 1956 and therefore, Form-C facility to be extended to them. STB is capable of exclusive use by the subscribers or not - HELD THAT:- Regulation 17 obligates every Multi Service Operator like the Assessees herein to provide to the subscribers STBs conforming to standard, set by the Bureau of Indian Standards, with a minimum warranty of one year, unless the subscriber himself has bought one on his own. There is a statutory obligation to repair the STBs within 24 hours of the complaint that too, free of cost. It is admitted before us by both the sides that the STBs are installed in the premises of subscriber only, albeit license to visit the same for service/repair is accorded under the subject agreements. In deciding the question, what are the goods involved in a sale transaction of the kind and with what intent the parties have entered into it, would assume importance. The seller and purchaser, the words being used in their widest amplitude have to be ad idem as to the subject matter of the arrangement. To this to be added, the intent of law also. In finding answers to questions of the kind, the approach of the court should be of a reasonable person of average intelligence. There being nothing to substantiate pervasive control of the Assessee over the STBs, merely because they have license to gain entry to the premises of the subscriber for periodic inspection/repair. Consideration for transfer of right to use STB - HELD THAT:- The simple question is whether the transfer of right to use STBs is for consideration or it is free. The Authorities and the Tribunal have held that the consideration for right to use STB is Rs. 2,000/-. That estimate is made inter alia on the basis of a clause in the Inter-connect Agreement that obtained between the Assessees and their local cable operators. A clause in the agreement prescribes Rs. 2,000/- payable by the local operator if STB is damaged or it is not used for the purpose for which it is installed - The authorities having accumulated expertise in the matter have formed a considered opinion that a sum of Rs.2,000/- is the consideration for transferring the right to use the STBs. A Court exercising a limited revisional jurisdiction cannot run a race of opinions with the authorities and Tribunals which have recorded concurrent findings. Service tax and VAT are mutually exclusive or not - HELD THAT:- There can be levy of more than one tax on a subject matter, if incidence of each of the taxes is different from the other and such taxes may be imposed under different statutes. A tax on the sale of goods is envisaged under Entry 54 of List II (Sales Tax) of Schedule 7 of the Constitution and the taxable event is transfer of goods including fictional sale envisaged under Article 366 (29A). In the case at hand, sales tax is levied under the State Enactment. There the State is not levying tax on service aspect of the transaction, since that exclusively belongs to the domain of the Parliament, which has enacted Finance Act, 1994 - In the case at hand, sales tax is levied under the State Enactment. There the State is not levying tax on service aspect of the transaction, since that exclusively belongs to the domain of the Parliament, which has enacted Finance Act, 1994. Retrospectivity of Government notification dated 15.03.2021 - HELD THAT:- Sub-section (2) of Sec. 174 has to be read with sub- section (3) of Sec. 164. Added, sub-section (4) of Sec. 174 in a way enacts Sec. 6 of the Mysore General Clauses Act, 1899. In view of this, it cannot be assumed that the tax regime during the transition period between repeal of 2003 Act and enactment of 2017 Act, was ever intended to be left as a vacuum creating a limited/partial tax heaven, in the mere absence of a notification under sub-section (2) of Sec. 174. If legislature intended to make operation of sub- section (1) of Sec. 174 dependent upon a notification to be issued under sub-section (2), the language of the provision would have been much different. An argument to the contrary would offend the tax jurisprudence evolved over centuries, in civilized jurisdictions. Therefore, the vehement submission made on behalf of the Assessees that the notification of 2021 could not have been issued with retrospective effect, pales into insignificance. Conclusion - i) STBs are goods within the meaning of section 2(15) of the Act, capable of exclusive use by subscribers, and that the right to use them is transferred for valuable consideration. ii) Service tax and VAT are not mutually exclusive. iii) The notification dated 15.03.2021 could have retrospective effect. Petition dismissed.

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