TMI Tax Updates - e-Newsletter
February 26, 2025

Case Laws in this Newsletter:

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

TMI Short Notes

1. Capital assets or stock in trade: Analysis of Section 9B of Income-tax Act, 1961 and Clause 8 of Income Tax Bill, 2025

  Bill:

2. Analysis of Deemed Accrual of Income in India: A Comprehensive Review of Clause 9 of Income Tax Bill, 2025

  Bill:

3. Income Deemed to Accrue or Arise in India: A Comparative Analysis of Current and Proposed Provisions

  Bill:

4. Evolution of Deemed Income Provisions: A Comparative Analysis of Income Tax Bill 2025 and Income-tax Act 1961

  Bill:

5. A Comparative Analysis of Residential Status Provisions: Income Tax Bill 2025 vs Income-tax Act 1961

  Bill:

6. Apportionment of Income Between Spouses Under Portuguese Civil Code: A Comparative Analysis of Income Tax Provisions

  Bill:

Articles

1. No GST provision renders assessee ineligible from applying for GST registration afresh after cancellation

   By: Bimal jain

2. TIME OF SIGNATURE ON ASSESSMENT ORDER, COMPUTATION, DEMAND NOTICE AND PENALTY NOTICES IS IMPORTANT – without an order other documents cannot be issued. Officers must take care. And harassed assesses can get protection from invalid demands.

   By: DEVKUMAR KOTHARI and CA UMA KOTHARI

3. Transactional net margin method-bridging theory and practice in transfer pricing

   By: Disha Deopura

4. ECONOMY AND RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

5. Swiss GSP Scheme for India

   By: YAGAY andSUN

6. The Querist Case of Countervailing Measures (CVM), Antidumping Measures, and Safeguard Duties.

   By: YAGAY andSUN

7. GST on RENT Immovable Properties Part II

   By: K Balasubramanian

8. IMPACT ASSESSMENT OF ‘CSR’ ACTIVITIES

   By: DR.MARIAPPAN GOVINDARAJAN

9. Global Chemical Regulatory Awareness and Management (AIAG)

   By: YAGAY andSUN

10. Alternative and Specific Technologies which are used for PFAS Pollution Management

   By: YAGAY andSUN

11. FOREVER CHEMICALS (Whether PFOS, PFAS and PTFE are “Safe Chemicals” to use)?

   By: YAGAY andSUN

News

1. MCD budget estimates likely to be adopted on March 19

2. House Speaker Mike Johnson tries to push Trump's 'big' agenda forward, but GOP votes in jeopardy

3. No new tax in Navi Mumbai civic body budget, Rs 5,685 cr allocated for expenditure

4. Government committed to fostering business climate, enhance Ease of Doing Business: Union Commerce and Industry Minister Piyush Goyal

5. Government building sustainable, resilient and future-ready infra: Union Commerce and Industry Minister Piyush Goyal

6. MoSPI Announces ‘Innovate with GoIStats’ Hackathon: Empowering the Youth to come out with ‘Data-Driven Insights for Viksit Bharat’

7. SWAYATT initiative on GeM celebrates 6 years of transformative impact

8. Startek® Wins Gold for Excellence in Hybrid Work Management at the Economic Times Human Capital Awards 2025

9. Economic fraud: Akhilesh slams Centre over decline in stock markets

10. Auction for Sale (re-issue) of (i) ‘6.79% GS 2031’ (ii) ‘6.92% GS 2039’ and (iii) ‘7.09% GS 2054’

11. Shri Piyush Goyal calls for bolstering supply chains and providing high-quality electronic products globally at competitive prices

12. Trump says Canada, Mexico tariffs 'going forward' with more import taxes to come

13. Bank embezzlement case: EOW gets video of Mehta's RBI questioning, wants lie detector test on him

Notifications

Income Tax

1. 17/2025 - dated 24-2-2025 - IT

Income-tax (Fifth Amendment) Rules, 2025

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MRD/PoD1/CIR/P/2025/24 - dated 25-2-2025

Opening of Demat Account in the name of Association of Persons

2. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/25 - dated 25-2-2025

Industry Standards on Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

Highlights / Catch Notes

GST

• Penalty Payment Under Protest in GST Cannot Be Deemed Voluntary, Preserving Right to Appeal Section 129(3)

  Case-Laws - HC : HC quashed rectification order concerning GST penalty u/s 129(3). Initial penalty of Rs. 22,37,220/- was imposed and paid by petitioner through DRC-03 under explicit protest. Authority subsequently attempted to rectify order making demand 'NIL' u/s 161. Court held that payment under protest cannot be deemed voluntary, and rectification cannot deprive appellant's statutory right to challenge original penalty order. Period between rectification order (08.10.2024) and present judgment excluded from limitation period for filing appeal against original order dated 06.10.2024. Rectification nullified, preserving petitioner's appellate rights against original penalty assessment.
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• GST Department Must Issue Detailed Show Cause Notice Under Section 73(1), Summary Notice Alone Invalid

  Case-Laws - HC : HC held that issuance of only a Summary Show Cause Notice (SCN) in Form GST DRC-01 violates natural justice principles and fails to comply with Section 73(1) of AGST Act, 2017. The court emphasized that a Summary SCN cannot substitute a proper SCN as mandated under Section 73(1). The proper officer must issue a detailed SCN, statement under Section 73(3), and order under Section 73(9). Compliance with subsections (1) to (8) and (10) to (11) of Section 73 and Rule 142(1) are prerequisite conditions for a valid order under Section 73(9). Consequently, the impugned order dated 21.08.2024 was quashed due to non-issuance of proper SCN.
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• Summary Show Cause Notice in Form GST DRC-01 Cannot Replace Proper Notice Under Section 73(1) GST Act

  Case-Laws - HC : HC held that summary show cause notice (SCN) in Form GST DRC-01 cannot substitute proper SCN under Section 73(1) of AGST Act, 2017. The impugned order was quashed as it violated principles of natural justice by failing to issue proper prior SCN as mandated. Court emphasized that compliance with Section 73(1-8, 10-11) and Rule 142(1) are prerequisites for valid orders under Section 73(9). The proper officer must issue SCN, statement under Section 73(3), and final order under Section 73(9). Mere issuance of SCN summary and tax determination attachment without proper notice violates procedural requirements. Order dated 21.08.2024 set aside as legally unsustainable.
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• Contractor Wins 6% GST Reimbursement Claim as Contract Mandates Full Tax Recovery from Principal Party

  Case-Laws - HC : HC determined that the contractor was liable to pay GST at 18% on taxable turnover from works contract, while respondent had only reimbursed 12%. Based on contractual obligations requiring full GST reimbursement, which remained uncontested, respondent must pay the differential 6% GST amount. Court directed respondent to reimburse contractor for the difference between GST paid (18%) and amount already reimbursed (12%). Additionally, any interest charges levied by GST authorities for late payment must also be reimbursed by respondent. Writ petition disposed with directions for differential GST reimbursement.
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• Late Fee Valid But General Penalty Struck Down For Delayed GST Annual Returns Under Section 47 And 125

  Case-Laws - HC : HC partially allowed the petition challenging GST late fee and penalty impositions. Court upheld late fee under Section 47(2) of GST Act for delayed annual return filing, which mandates Rs.100 per day subject to maximum 0.25% of state turnover. However, HC struck down additional general penalty of Rs.50,000 each under Section 125 for CGST and SGST, ruling that when specific penalty provision exists as late fee under Section 47, imposing general penalty is improper. Court confirmed respondent authority's jurisdiction to initiate proceedings for non-filing but emphasized that penalty cannot be duplicated through both late fee and general penalty provisions.
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• Taxpayer's GST Deregistration Valid Despite Supplier's Later Registration Cancellation if Taxes Were Paid During Transaction

  Case-Laws - HC : HC determined that subsequent or retrospective cancellation of supplier registrations does not invalidate a taxpayer's request for voluntary GST deregistration, provided the supplies were obtained from validly registered vendors who had paid applicable taxes at the time of transaction. The petitioner was granted three weeks to submit documentation proving the legitimacy of input supplies and corresponding tax payments. The revenue authorities must evaluate the voluntary cancellation application based on verification of these submissions, focusing on the registration status of suppliers at the time of actual transactions rather than their current status. The matter was disposed with directions for administrative review of the deregistration request.
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• Taxpayer Allowed to Transfer GST Demand Payment from DRC-03 to PMT-01 Through New DRC-03A Form Under Rule 142(2B)

  Case-Laws - HC : HC addressed payment procedures for GST demands under rule 142. Petitioner paid demand through Form GST DRC-03 instead of required electronic liability register Form GST PMT-01. Following recent amendment via notification 12/24 introducing rule 142(2B), petitioner permitted to file Form GST DRC-03A electronically to transfer payment credit to electronic liability register. Court directed that if petitioner files refund application under Section 54, authorities must process and refund amount to electronic cash/credit ledger within two weeks. Petition disposed with directive to follow amended procedure for payment adjustment through proper forms.
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• Delay in GST Appeal Filing Condoned After Taxpayer Shows Good Faith Through Partial Payment and Compliance

  Case-Laws - HC : HC condoned a 35-day delay in filing GST appeal, emphasizing that procedural delays should not override substantive justice. The petitioner had demonstrated compliance by depositing 10% of tax liability and making additional payments toward disputed amount. Court found strict application of GST Act's limitation provisions unwarranted given circumstances. Matter remanded to second respondent for fresh consideration on merits, directing full examination of facts and circumstances. Decision underscores judicial preference for substantive resolution over procedural dismissal in tax matters where appellant shows good faith compliance efforts.
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• Vehicle and Goods Detained Under Section 129 Released After No Evidence of Tax Evasion Found in Invoice Verification

  Case-Laws - HC : HC found detention of vehicle and goods under Section 129 was improper. Physical verification confirmed correct quantity and weight of goods against three invoices, with no discrepancy in broad product classifications. Inspecting authority exceeded scope by scrutinizing detailed specifications (pipe size, shutter, TMT Bar dimensions) not required in invoices. While product classification issues could be addressed in separate adjudication proceedings, current detention was unwarranted as there was no evidence of tax evasion or fact suppression. Court ordered release of vehicle and goods within four days of order service. Matter disposed with directive to authorities to comply with release order.
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• Government Directed to Process GST Refund Claim for Public Contract Work Following Similar Precedents in Infrastructure Projects

  Case-Laws - HC : HC directed respondent authorities to immediately process petitioner's GST refund claim following contract execution. The authorities must verify facts and assess petitioner's entitlement, considering precedents where government departments including PWD, PMGSY, NHAI, Railways, and CPWD had refunded GST in similar cases. The court's directive emphasizes administrative responsibility to address tax refund claims promptly and consistently with established practices across government departments. The decision underscores the principle of equitable treatment in tax administration, particularly regarding GST refunds in public contract execution cases.
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• Section 107: Three-Day Appeal Delay Condoned After Managing Director's Travel Justification Deemed Reasonable Cause

  Case-Laws - HC : HC allowed petition challenging appellate order under Section 107 of 2017 Act, finding that Appellate Authority failed to judiciously exercise discretionary power regarding delay condonation. Petitioner demonstrated sufficient cause for 3-day delay in filing appeal, citing Managing Director's travel. The delay fell within condonable period under Section 107(4). Authority erred by not examining whether delay was condonable and if sufficient cause existed. HC condoned delay, noting it was within prescribed statutory period and backed by reasonable justification. Matter remanded to Appellate Authority for consideration on merits.
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Income Tax

• Assessment Order Against Merged Company Cairn India Void Under Income Tax Act Sections 154, 292B As Entity No Longer Existed

  Notes : Del HC held assessment order issued in name of Cairn India Limited after its amalgamation with Vedanta Limited was fundamentally void and not rectifiable under s.154 or s.292B of Income Tax Act. Court distinguished from Sky Light Hospitality precedent, noting assessee had properly disclosed merger information. Fundamental jurisdictional defect arose as TPO made order against non-existent entity despite prior notification of corporate amalgamation. Error transcended mere clerical mistake, constituting jurisdictional flaw that invalidated entire proceedings. Court rejected Revenue's argument that error was technical irregularity, emphasizing distinction between curable procedural defects and fatal jurisdictional errors in tax assessment proceedings.
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• Income Tax Reassessment Notice Quashed: Time-Barred Under Section 149(1), TOLA Extension Deadline Not Met

  Notes : HC quashed reassessment notice dated 30.07.2022 for AY 2013-14 as time-barred under s.149(1) of IT Act. Court held that 29-day extension under TOLA required completion of both s.148A(d) order and s.148 notice by 12.07.2022. Despite procedural timeline of one month under s.148A(d), AO was bound by overarching limitation period. Court applied SC decisions in Ashish Agarwal and Rajeev Bansal to calculate available time, excluding periods between 01.06.2021-04.05.2022 and 04.05.2022-30.05.2022. Since notice was issued on 30.07.2022, beyond calculated deadline, proceedings were invalid. HC rejected Revenue's argument that s.148A(d) timeline operated independently of s.149 limitation.
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• Income Tax Exemption for Scheduled Tribes Under Section 10(26) Only Valid When Income Accrues in Sixth Schedule Areas

  Case-Laws - HC : HC held that income tax exemption under Section 10(26) for Scheduled Tribes is only applicable when income accrues in specified areas under Sixth Schedule. The interest on compensation was deemed to have accrued in North Lakhimpur, Assam, which does not fall within Sixth Schedule areas. Railway Tribunal's orders directing NF Railway to refund tax deducted at source were set aside, as mere tribal status from Arunachal Pradesh was insufficient grounds for exemption. The geographical location of income accrual, not tribal status alone, determines eligibility for tax exemption under Section 10(26).
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• Provision for Doubtful Debts Cannot Be Deducted Under Section 115-JB Without Actual Write-off in Books

  Case-Laws - HC : HC upheld revision under s.263 regarding treatment of provision for doubtful debts in computing book profits under s.115-JB. AO's acceptance of assessee's claim was mechanical, without examining why provision for doubtful assets was claimed as deduction despite not being debited to provision account. Amount was merely shown as reduction from trade receivables for disclosure, not as written-off debts. Assessee maintained recovery hopes. PCIT's jurisdiction exercise directing re-examination was justified. Tribunal correctly analyzed legal position, finding no illegality in CIT's order. HC found no jurisdictional infirmity, ruling against assessee's appeal.
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• Public Relations Expenses, TDS Under Section 195, and Product Registration Costs Ruled Deductible for Tax Assessment

  Case-Laws - AT : ITAT dismissed Revenue's appeal regarding three key issues: public relations expenses, TDS under s.195, and product registration costs. The Tribunal criticized the Assessing Officer's disregard of precedential principles by maintaining previous approaches despite contrary higher judicial rulings. On public relations expenses, ITAT found no justification to deviate from prior favorable rulings. Regarding TDS under s.40(a)(i), payments to Malaysian entity BASC for finance and HR services were held permissible. Product registration expenditure was deemed revenue rather than capital in nature, despite being one-time costs. In cross-objection concerning Dividend Distribution Tax, ITAT followed Special Bench precedent favoring Revenue's position, upholding DDT liability on declared dividends.
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• Nokia Subsidiary Not Permanent Establishment of Parent Company Under Article 5(8) Despite Management Control

  Case-Laws - HC : HC ruled against treating NIPL (subsidiary) as a Permanent Establishment (PE) of Nokia OY (parent company). The court emphasized that Article 5(8) of DTAA requires more than mere parent-subsidiary control to establish PE status. The existence of PE must be evaluated based on empirical standards and objective evidence rather than perceptions or virtual projection theories. The court rejected arguments for both Fixed Place PE and Dependent Agent PE (DAPE), noting that parent company oversight and supervision of a subsidiary does not negate the latter's independent economic existence. The appellants failed to prove NIPL was operating Nokia OY's business as its adjunct. Software taxation issue was decided against appellants following Engineering Analysis Centre precedent.
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• Income Tax Department's Inquiry Into Alleged Cash Transactions Upheld as Matrimonial Dispute Falls Outside Tax Framework

  Case-Laws - HC : HC dismissed petition challenging Income Tax Department's inquiry into alleged illegal cash transactions. Petitioner failed to establish violation of fundamental or statutory rights, with dispute primarily rooted in matrimonial conflict between petitioner and respondent. Court determined case involved complex factual disputes beyond Income Tax Department's jurisdiction and unsuitable for adjudication under Article 226. Complaint lacked statutory basis under Income Tax Act, 1961, with no formal regulatory mechanism invoked. Absence of legal framework for complaint submission rendered claims of rights violation non-existent. Court found no merit in arguments regarding department's non-response to complaint given its non-statutory nature.
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• Property Sale Gains Retain Long-Term Capital Gains Status Under Section 143(3) Due To Consistent Tax Treatment

  Case-Laws - AT : Taxpayer sold shops during AY 2017-18 and reported gains as Long Term Capital Gains (LTCG) in tax returns. While AO initially accepted this classification under section 143(3), the characterization was later disputed. ITAT ruled in favor of taxpayer, upholding LTCG treatment based on principle of consistency. Since revenue authorities had previously accepted property as investment and gains as LTCG, and there was no change in nature of property holding during assessment year, gains could not be reclassified as business income. Tribunal emphasized that consistent tax treatment must be maintained when underlying facts remain unchanged. Revenue's appeal dismissed.
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• Charitable Trust Registration Under 12A and 12AB Restored After PCIT's Invalid Cancellation Order

  Case-Laws - AT : ITAT reversed PCIT's cancellation of charitable trust registration under sections 12A and 12AB. The tribunal held that PCIT lacked express statutory authority to cancel section 12A registration through 12AB(4) proceedings. Show cause notices dated 21.07.2023 and 20.03.2024 were declared void ab initio. ITAT found that alleged 'specified violations' from FY 2019-20 to 2021-22 could not be basis for cancellation as this provision was effective only from 01.04.2022. While seized documents suggested irregularities in salary payments and capitation fees, ITAT ruled that trust's genuine charitable activities in operating medical college and hospital warranted continuation of registration. Any specific financial discrepancies could be addressed during assessment rather than through registration cancellation. Registration under sections 12A and 12AB restored.
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• Property Payment Through Bank Channels Cannot Be Deemed Undisclosed Income; DRP Post-Proceeding Verification Under Section 144C Invalid

  Case-Laws - AT : ITAT ruled in favor of assessee on two key issues. First, the allegation of "on-money" payment for residential property was rejected as the difference between actual payment and registered value cannot be deemed undisclosed income when payments were made through verified banking channels and loan disbursements. Second, DRP's direction to AO for further verification post-DRP proceedings was held ultra vires as per Sec 144C. DRP must conduct verifications during proceedings under 144C(7), not after issuing directions. AO must complete assessment within one month of receiving DRP directions without additional inquiry. Consequently, the addition made in Final Assessment Order was held without jurisdiction and deleted.
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• Penalties Under Section 271(1)(c) and 271AAB Deleted Where Additions Were Made on Estimate Basis

  Case-Laws - AT : ITAT reversed penalties imposed under s271(1)(c) and s271AAB against assessee regarding disputed cash expenses and labor payments. AO's additions were initially made at 50%, reduced to 35% by CIT(A), and further reduced to 20% by Coordinate Bench. Despite CIT(A)'s observation of assessee's alleged malafide intent and mens rea, ITAT held that penalties cannot be imposed on additions made purely on estimate basis, following established precedent. The Tribunal noted AO's irresponsible approach and lack of judicial discipline in penalty proceedings, particularly given the Coordinate Bench's prior findings on quantum additions. Appeal allowed in assessee's favor with complete deletion of penalties.
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• Sale Price at Booking Time Valid for Section 43CA Assessment Despite Later Market Value Appreciation

  Case-Laws - AT : ITAT ruled in favor of assessee regarding additions under s.43CA concerning sale of 12 flats below market value. While market value exceeded agreement value at registration, documentation proved agreement values were compliant with market rates at booking time. ITAT emphasized that mere auditor observations about lower sale values cannot justify additions without considering Act provisions. Since assessee received partial consideration as advance per original agreements and executed sales based on those values despite subsequent market appreciation, no additions were warranted under s.43CA(3) and (4). The significant time gap between booking and registration dates explained the apparent value discrepancy.
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• Commissioner Revises Assessment Under Section 263 After Officer Failed to Investigate Suspicious Machinery Payment Through Employee

  Case-Laws - AT : CIT(E) exercised revisionary powers under s.263 due to AO's failure to investigate payments for machinery supplied through an employee. Despite receiving specific information, AO made no inquiries regarding a notarized tripartite MoU involving M/s. Aarti Enterprises and Dr. M.S. Hiremath, making the assessment order erroneous and prejudicial to revenue interests. ITAT rejected assessee's contention that tax exemptions under ss.12AA and 10(23C)(via) nullified revenue prejudice, holding that potential impact could only be determined after proper examination. The tribunal upheld CIT(E)'s jurisdiction under s.263, finding sufficient grounds for revision, and dismissed assessee's appeal.
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Customs

• Delay in Second Appeal Not Condoned Due to Importer's Negligence in Verifying Order Status and Address Update

  Case-Laws - HC : HC dismissed the appeal concerning condonation of delay in filing second appeal regarding misdeclaration of imported Brass Ceramic Cartridges. The appellant failed to demonstrate due diligence in verifying the Commissioner (Appeals) order status. Despite proper service of hearing notice to both appellant and counsel, and counsel's attendance at hearing, appellant neglected to provide alternative address for order service. The Department fulfilled procedural obligations by sending order to available address. Court held appellant's inaction and counsel's failure to communicate constituted negligence. The CESTAT's order upholding dismissal was affirmed, as delay in filing was attributable to appellant's lack of vigilance rather than departmental oversight.
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• Importer Denied Concessional CVD Under Notification 4/2006-CE Due to High-Sea Purchase and Misuse of Imported Cement

  Case-Laws - HC : HC held that concessional CVD rate under Notification No.4/2006-CE was incorrectly granted. The importer violated key conditions by: (1) purchasing through high-sea sale from third party instead of directly from manufacturer, (2) failing to meet manufacturing mode and capacity requirements, and (3) misusing imported cement for manufacturing ash bricks and local market sales instead of declared institutional/industrial purposes. Mere inclusion of manufacturer details in Bill of Entry and customs clearance were insufficient to justify concessional rate. The court emphasized that high-sea sales through intermediaries negate direct manufacturer purchase requirement. Original order upheld, denying concessional CVD benefit to importer due to multiple notification violations.
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• Customs Cannot Deny Duty Exemption After DGFT Issues Export Obligation Discharge Certificate Under Notification 18/2015-Cus

  Case-Laws - AT : CESTAT allowed appeal concerning classification dispute of imported Aluminium Foil under Advance Authorization Scheme. Appellant imported raw material (Aluminium Foil 50 MIC +/-10%) under multiple authorizations, completed export obligations, and obtained Export Obligation Discharge Certificates (EODCs) from DGFT for all but one authorization. Following SC precedent in Titan Medical Systems, CESTAT held that Customs authorities cannot deny duty exemption under notifications post-EODC issuance. If violations were suspected, matter should have been referred to licensing authority rather than demanding duty. Tribunal confirmed appellant's entitlement to benefits under Notification 18/2015-Cus, rejecting customs authorities' reclassification-based duty demand.
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Corporate Law

• Companies Act Section 197(15) Amendment Replacing Fine with Penalty Cannot Apply to Pre-2019 Corporate Offenses

  Case-Laws - HC : HC determined that amendment to Section 197(15) of Companies Act 2013, replacing "punishable with fine" with "penalty" through Companies (Amendment) Act 2019, does not apply retrospectively to offenses committed in 2016. The substitution provision in absence of contrary indication relates back to original 2013 Act. Consequently, proceedings against petitioner under amended Section 197(15) were deemed non-maintainable. Court quashed complaint and cognizance order filed with Special Court for Economic Offences regarding alleged violations of Section 197(3), 197(9) and Rule 7(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
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Bill

• Income Tax Bill Updates Section 5: Restructures Residency Rules and Foreign Income Treatment While Maintaining Core Framework

  Notes : The Income Tax Bill 2025 revises the scope of total income under existing Sec. 5 of ITA 1961, maintaining core taxation principles while introducing structural refinements. Key modifications include replacing "previous year" with "tax year", repositioning "not ordinarily resident" provisions from proviso to main clause 5(1)(c), and elevating explanatory notes to primary subsections. The Bill retains fundamental frameworks for resident and non-resident taxation but enhances clarity through improved language and organization. Notable changes include clearer articulation of double taxation prevention [Sec 5(4)] and foreign income treatment [Sec 5(3)]. These amendments aim to streamline tax administration, reduce litigation potential, and align with international taxation standards while preserving the established scope of taxable income in India.
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• Non-Profit Organizations Face New Commercial Activity Rules Under Clause 346 With 20% Revenue Cap and Strict Accounting

  Notes : The Income Tax Bill, 2025 introduces enhanced regulatory framework for commercial activities by non-profit organizations through Clause 346, building upon Section 2(15) of Income-tax Act, 1961. The provision maintains the 20% revenue threshold for commercial activities while introducing stricter compliance requirements. Key modifications include mandatory separate accounting for commercial ventures, explicit definition of activities directly related to charitable objectives, and enhanced monitoring mechanisms. The framework applies specifically to registered non-profits, compared to the broader application under the 1961 Act. The provision aims to balance legitimate revenue generation with charitable purposes while preventing misuse through commercial operations. This structured approach provides clearer operational guidelines for organizations and regulators, though implementation challenges remain regarding activity classification and compliance monitoring.
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IBC

• IBC Appeal Time Limits: 30-Day Period Extendable on Holiday, 15-Day Condonation Period Cannot Be Extended Under Section 61

  Case-Laws - AT : NCLAT addressed the computation of limitation periods for filing appeals under IBC. The tribunal held that while the 30-day limitation period under Section 61 can be extended when the last day falls on a tribunal holiday (per Rule 3 of NCLAT Rules), the 15-day condonable period under Section 61(2) cannot be similarly extended. In this case, the appeal filed on 17.09.2024 was beyond both the 30-day limitation period (ending 30.08.2024) and the 15-day condonable period. Despite the appellant's organizational approval requirements constituting reasonable cause for delay, the appeal was dismissed as it exceeded the maximum condonable period. The ruling clarifies that Rule 3 of NCLAT Rules and Section 4 of Limitation Act cannot extend the statutory 15-day condonation limit.
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• Interest Claims Based Only on Invoice Terms Not Enforceable Under IBC Without Formal Agreement, Says NCLAT

  Case-Laws - AT : NCLAT determined that interest claims of Rs. 1,16,25,700.82 based solely on invoice provisions were not enforceable under IBC without formal agreement. The principal amount of Rs. 4,97,22,461.16 had already been settled by the Corporate Debtor. The Tribunal erred in applying Asset Reconstruction and BHEL precedents regarding interest adjustment. The invoice clause stating "interest will be charged @ 12% or as per agreed terms" was deemed vague without specified payment terms or underlying agreement. Following Comet Performance and Rishabh Infra precedents, NCLAT held that invoice interest clauses not part of formal agreements are unenforceable under IBC. The appeal was allowed and impugned order set aside, reinforcing that IBC's purpose is debt resolution, not recovery of unsupported interest claims.
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Indian Laws

• Prevention of Corruption Act Section 7 Conviction Overturned Due To Lack of Proof in Illegal Gratification Case

  Case-Laws - HC : HC reversed trial court's conviction under Section 7 of Prevention of Corruption Act due to insufficient evidence of illegal gratification demand and acceptance. Key prosecution witnesses PW1, PW2, and PW8's testimony failed to establish conclusive proof against accused. Electronic evidence, including recorded conversations on memory card and CDs, was deemed inadmissible without mandatory Section 65-B certificate under Indian Evidence Act. Shadow witness PW8's testimony contradicted alleged demand. Trial court erred in evidence appreciation and failed to establish guilt beyond reasonable doubt. Accused's conviction and sentence set aside, appeal allowed.
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PMLA

• Money Laundering: Regular Bail Denied Under BNSS 483 After Failure to Explain Rs. 10 Crore Unexplained Assets

  Case-Laws - HC : HC rejected regular bail application under Section 483 of Bhartiya Nagrik Suraksha Sanhita, 2023 in a money laundering case. Applicant failed to explain source of seized assets including Rs. 6.44 crore cash, gold jewelry worth Rs. 3.24 crore, and Rs. 52.35 lakh from lockers. Evidence indicated property purchases through family members without disclosed sources. Prima facie involvement in offenses under Sections 7, 7A & 12 of PC Act established. Court emphasized economic offenses require stringent consideration due to their deliberate nature and national impact, citing precedent that bail in such cases could impede effective investigation. Given the gravity of offense and unexplained assets, court found applicant unsuitable for regular bail.
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VAT

• Service Tax Cannot Be Included When Calculating Entertainment Tax Under Karnataka Entertainment Tax Act

  Case-Laws - HC : HC ruled on service tax inclusion in entertainment tax calculation under Karnataka Entertainment Tax Act. The court determined that 'amount received or receivable' for entertainment tax purposes cannot include service tax component. Entertainment and service elements are distinctly taxable - entertainment under state law and service under Finance Act, 1994. The court found that itemized billing statements qualify as invoices despite lack of statutory definition. Supporting this interpretation, the court cited precedent regarding separate treatment of statutory fees from transaction consideration. The matter was remanded to the Tribunal for fresh consideration in accordance with these principles, particularly regarding the segregation of service tax from entertainment tax base amounts.
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Service Tax

• Equipment Rental in Film Industry Qualifies as Deemed Sale with Right to Use, Not Service Under Section 66

  Case-Laws - HC : HC ruled that renting cinematographic equipment constituted a deemed sale with transfer of right to use, not a taxable service under Section 66 of Finance Act, 1994. The agreement demonstrated transfer of both possession and effective control to the hirer, evidenced by inspection rights, damage reporting obligations, and equipment condition acknowledgments. The transaction qualified as deemed sale under Article 366(29A) of Constitution, involving transfer of right to use goods for valuable consideration. HC quashed the original order that had incorrectly interpreted the agreement terms regarding possession and control transfer. The case established that where right of possession and effective control transfers, service tax cannot be levied as it falls outside the scope of taxable services.
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• Service Tax Recovery and Penalties Upheld as Petitioner Must First Exhaust Available Appellate Remedies Before Seeking Review

  Case-Laws - HC : HC dismissed the writ petition challenging service tax recovery and penalties, directing petitioner to pursue appellate remedies. The court distinguished the Amadeus India case involving mandatory pre-show cause notice consultation requirements. Unlike Cosmic Dye Chemical where Tribunal's ruling on limitation period was challenged before SC, present case involved factual determinations better suited for appellate authority review. HC declined to exercise extraordinary writ jurisdiction since alternative remedy was available through statutory appeal mechanism. The court emphasized that issues raised required detailed factual appreciation more appropriate for consideration by appellate forums rather than writ proceedings.
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• JCB UK Advisory Services Qualify as Tax-Exempt Exports Under Rule 6A as Recipient Located Outside India's Territory

  Case-Laws - AT : The CESTAT allowed the appeal concerning advisory services provided by appellant to JCB UK, determining these constituted export of services under Rule 6A of Service Tax Rules, 1994. The Tribunal found that JCB UK's business establishment, where company decisions were made, was located in United Kingdom. Under Rule 2(i)(b)(i) of POPS Rules, services were deemed received at JCB UK's business establishment, placing the location of service recipient outside India's taxable territory. Following precedent from the Larger Bench ruling in Arcelor Mittal case, the Tribunal held that JCB UK was the service recipient as they commissioned and paid for the services. Consequently, the services qualified as exports exempt from service tax, and the original order was set aside.
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• Oil Companies' Retained Freight Commission Under Finance Act Sections 66, 66B Examined for Service Tax Liability

  Case-Laws - AT : CESTAT examined taxation of retained freight portions from oil companies under business auxiliary services. The dispute centered on whether appellant's retention of "address commission" from vessel charter charges constituted taxable service. While service provider's location in India established territorial jurisdiction, the adjudicating authority failed to properly analyze whether retained amounts represented commission from overseas vessel owners rather than service charges to oil companies. The tribunal found inadequate consideration of Place of Provision Rules 2012 and legal basis for tax liability under Finance Act sections 66 and 66B. Matter remanded to original authority for fresh examination of tax applicability, contractual relationships, and proper characterization of retained amounts as either service consideration or overseas commission payments.
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Central Excise

• Printed ATM Thermal Paper Rolls Classified Under Chapter 49 as Products of Printing Industry Due to Information Purpose

  Case-Laws - AT : CESTAT ruled printed thermal paper ATM rolls are classifiable under Chapter 49 (CETH 49019900) as products of printing industry rather than Chapter 48 (CETH 48119099). The tribunal determined that printing on thermal rolls creates a distinct ATM roll product where the printed content (transaction details, instructions, logos) serves a primary rather than incidental purpose. The printed matter and blank portions constitute integrated elements serving informational purposes. Following precedents from similar cases involving thermal papers and printed materials, CESTAT held that when articles are printed, their primary purpose of conveying information makes them appropriately classifiable under heading 49.01. Appeal allowed in favor of the appellant.
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• Affixing MRP on Imported Electrical Appliances Qualifies as Manufacture Under Section 2(f)(iii), CENVAT Credit Allowed

  Case-Laws - AT : CESTAT held that affixing MRP on imported electrical home appliances constituted 'manufacture' under Section 2(f)(iii), making it liable for excise duty. The appellant was entitled to CENVAT credit on previously paid import duty. The tribunal rejected the extended period of limitation due to lack of willful suppression, restricting duty demand to normal period (03/2015-10/2016). While mandatory interest was upheld, penalties under Rule 25 and Rule 26 were set aside. Seizure and confiscation of goods were deemed unjustified. Matter remanded to adjudicating authority for computing duty liability, interest, and CENVAT credit entitlement. The appeal was partially allowed through remand.
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Case Laws:

• GST

• 2025 (2) TMI 1013
  Seeking to quash the SCN issued by the State Tax Officer and the Office of the Commissioner of Commercial Taxes, Goa - demand for alleged short-payment of goods and service tax for the financial year 2017-2018 with interest and penalty - HELD THAT:- Let all these matters be notified for final disposal on 18-3-2025 along with SLP (C) Nos.19366-19369/2023 and other connected matters. Appeal disposed off.

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• 2025 (2) TMI 1012
  Violation of principle of natural justice - personal hearing was denied - difference in the amount of Input Tax Credit (ITC) for the tax period April, 2018 to March, 2019 - HELD THAT:- A bare look at the show cause notice issued under Section 73 of the Act (Annexure - 5) would reveal that date of filing of reply and date of personal hearing are the same i.e. 20.01.2024. This Court has repeatedly frowned on the action of the respondents in fixing identical date of reply and date of hearing, as the same apparently is an empty formality and essentially results in violation of principle of natural justice. It would be seen that show cause notice was issued on 10 points and while on 7 points, the same was accepted, that also without indicating any reason, on 3 points only a cursory observation has been made that no evidence has been produced pertaining to deposit of tax through RCM and the accounts books have not been verified. Such a cursory disposal of the objection raised in reply to the show cause notice cannot be countenanced when plea raised is very specific. In view of above fact situation, wherein besides non granting of opportunity of hearing, the order impugned i.e. 30.04.2024 passed, is wholly cursory, the same cannot be sustained. So far as the challenge laid to order passed under Section 161 of the Act rejecting the rectification application is concerned, in view of the fact that the order dated 30.04.2024 itself has been found to be vitiated, rejection of the said application under Section 161 of the Act loses its significance. The order impugned dated 30.04.2024 passed under Section 79(3) of the Act is quashed and set aside - Petition allowed.

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• 2025 (2) TMI 1011
  Challenge to an order rectifying a penalty imposed u/s 129(3) of the Goods and Services Tax Act, 2017 - HELD THAT:- It is not in dispute that an order of detention u/s 129(1) of the Act qua the goods being transported by the petitioner was passed and show cause notice under Section 129(1)(a) of the Act proposing a penalty of Rs. 22,37,220/- was issued. Reply to the show cause notice was filed by the petitioner whereafter though challan under PMT-06 for deposit of GST was generated, the amount was deposited through DRC-03 in cash. The reason at the footnote clearly indicated that the amount of penalty is paid under protest and without prejudice to our legal right of appeal . Whereafter the order u/s 129(3) was passed on 06.10.2024 indicating a demand of Rs. 22,37,220/- and form GST DRC-07 qua the demand was also generated. However, apparently, by way of an afterthought, exercising power u/s 161 of the Act, the order dated 06.10.2024 was passed purportedly rectifying the order and the demand was indicated as NIL . Though in terms of the requirement on part of the respondent to pay the amount penalty, it is true that the demand was NIL, but the deposit was under protest. The passing of the order rectifying the order passed u/s 129(3) of the Act has the implication that on account of the demand being NIL , the petitioner cannot file appeal against the demand raised and deposited under protest by him. The mere fact that the amount was deposited through DRC-03 of the Act with specific endorsement regarding the payment being under protest, the same cannot be termed as a voluntary payment so as to permit the respondents to rectify the order and deprive the petitioner from questioning the validity of the said order by filing statutory appeal. Conclusion - The rectification order is quashed, reinstating the petitioner s right to appeal the original penalty order. In view of the fact that on passing of the order dated 08.10.2024, the petitioner has been deprived of the right to file appeal, the period starting from 08.10.2024 till passing of this order, shall be excluded for computing the period of limitation for filing the appeal against the order dated 06.10.2024 passed under Section 129(3) of the Act - petition allowed.

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• 2025 (2) TMI 1010
  Rate of GST on works contracts - Government entity or not - recovery of differential tax - HELD THAT:- There is no doubt that the petitioner is liable to pay GST @ 18% on the taxable turnover arising out of the contract with the 1st respondent. However, the 1st respondent had only reimbursed @12% instead of 18%. The contention of the petitioner that the contract between the petitioner and the 1st respondent required the 1st respondent to reimburse the entire amount of GST paid by the petitioner, has not been contradicted. In such circumstances, it must be held that the 1st respondent was liable to reimburse the petitioner to the extent of the GST paid out by the petitioner and accordingly, the 1st respondent is liable to reimburse the petitioner the differential amount of GST @ 6%, for the period for which the petitioner ended up paying GST @ 18%. Needless to say, if interest is recovered from the petitioner for late payment, by the GST authorities, the same shall be reimbursed by the 1st respondent. This Writ Petition is disposed of directing the 1st respondent to reimburse the petitioner to the extent of the differential amount of GST paid by the petitioner over and above the GST which has been reimbursed by the 1st respondent on account of the works executed by the petitioner under the contract with the 1st respondent.

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• 2025 (2) TMI 1009
  Violation of principles of natural justice - no proper and prior SCN prescribed under sub-section [1] of Section 73 of the Assam Goods and Services Tax Act, 2017 and the petitioner was only served with a Summary of SCN in Form GST DRC-01 - HELD THAT:- Non-issuance of a proper and prior Show Cause Notice, as contemplated under sub-section [1] of Section 73 of AGST Act, 2017 and issuance of only Summary of Show Cause Notice and Attachment to Determination of Tax cannot be said to be in compliance with sub-section [1] of Section 73 and sub-rule [1] of Rule 142 of the AGST Rules, 2017. A Summary of Show Cause Notice is held to be not a substitute of a Show Cause Notice, contemplated by the provisions of sub-section [1] of Section 73 to set the proceeding in motion. From the provisions of Section 73, it emerges that the Show Cause Notice is required to be issued by the Proper Officer, the statement under Section 73 [3] is to be issued by the Proper Officer as well as the Order under Section 73[9] is required to be issued by the Proper Officer. Compliance of the provisions contained in sub-section [1] to sub-section [8] and sub-section [10] to sub-section [11] of Section 73 and sub-rule [1] of Rule 142 are conditions precedent to term an Order passed under sub-section [9] of Section 73 as a valid one. Having regard to the fact that a proper and prior Show Cause Notice under sub-section [1] of Section 73 of the AGST Act, 2017 was not issued along with the Summary of Show Cause Notice in Form GST DRC-01 [Annexure-B to the writ petition] and the Attachment to Determination of Tax [Annexure-B to the writ petition], and in terms of the observations made in the common Judgment and Order [ 2024 (10) TMI 279 - GAUHATI HIGH COURT] , the impugned Order dated 21.08.2024 [Annexure-C to the writ petition] is found not sustainable in law and the same deserve to be set aside and quashed. Conclusion - i) The Summary of the Show Cause Notice in GST DRC-01 is not a substitute to the Show Cause Notice to be issued in terms with Section 73(1) of the Central Act as well as the State Act. ii) The issuance of proper Show Cause Notices is mandatory for initiating proceedings under Section 73, and that compliance with natural justice principles is essential. Petition disposed off.

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• 2025 (2) TMI 1008
  Violation of principles of natural justice - no proper and prior SCN prescribed under sub-section [1] of Section 73 of the Assam Goods and Services Tax Act, 2017 and the petitioner was only served with a Summary of SCN in Form GST DRC-01 - HELD THAT:- Non-issuance of a proper and prior Show Cause Notice, as contemplated under sub-section [1] of Section 73 of AGST Act, 2017 and issuance of only Summary of Show Cause Notice and Attachment to Determination of Tax cannot be said to be in compliance with sub-section [1] of Section 73 and sub-rule [1] of Rule 142 of the AGST Rules, 2017. A Summary of Show Cause Notice is held to be not a substitute of a Show Cause Notice, contemplated by the provisions of sub-section [1] of Section 73 to set the proceeding in motion. From the provisions of Section 73, it emerges that the Show Cause Notice is required to be issued by the Proper Officer, the statement under Section 73 [3] is to be issued by the Proper Officer as well as the Order under Section 73[9] is required to be issued by the Proper Officer. Compliance of the provisions contained in sub-section [1] to sub-section [8] and sub-section [10] to sub-section [11] of Section 73 and sub-rule [1] of Rule 142 are conditions precedent to term an Order passed under sub-section [9] of Section 73 as a valid one. Having regard to the fact that a proper and prior Show Cause Notice under sub-section [1] of Section 73 of the AGST Act, 2017 was not issued along with the Summary of Show Cause Notice in Form GST DRC-01 [Annexure-B to the writ petition] and the Attachment to Determination of Tax [Annexure-B to the writ petition], and in terms of the observations made in the common Judgment and Order [ 2024 (10) TMI 279 - GAUHATI HIGH COURT] , the impugned Order dated 21.08.2024 [Annexure-C to the writ petition] is found not sustainable in law and the same deserve to be set aside and quashed. Conclusion - i) The Summary of the Show Cause Notice in GST DRC-01 is not a substitute to the Show Cause Notice to be issued in terms with Section 73(1) of the Central Act as well as the State Act. ii) The issuance of proper Show Cause Notices is mandatory for initiating proceedings under Section 73, and that compliance with natural justice principles is essential. Petition disposed off.

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• 2025 (2) TMI 1007
  Violation of principles of natural justice - no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order - petitioner s consultant had simply uploaded the Form GSTR-9 and Form GSTR-9C instead of filing a proper reply - HELD THAT:- As far as the opportunity for filing of reply is concerned, this Court does not find any fault on the part of the respondent. Though sufficient opportunity was provided, the consultant of the petitioner had failed to file any effective reply to decide the matter. Under these circumstances, the impugned order came to be passed by the 1st respondent. As far as the opportunity of personal hearing is concerned, no such opportunity was provided to the petitioner subsequent the filing of reply. As per the provisions of Section 75(4) of the GST Act, if the 1st respondent is intend to pass any adverse order, it is mandatory for them to provide sufficient opportunity to the petitioner subsequent to the filing of reply and prior to the passing of assessment order. However, in this case, the impugned order has been passed against the petitioner without providing any such opportunity of personal hearing, which is not only contrary to the provisions of Section 75(4) of the GST Act, but also in violation of principles of natural justice. The impugned order dated 23.04.2024 is set aside and the matter is remanded to the 1st respondent for fresh consideration, on condition that the petitioner shall pay 10% of disputed tax amount, to the respondent within a period of two weeks from today (18.02.2025) and the setting aside of the impugned orders will take effect from the date of payment of the said amount - Petition disposed off by way of remand.

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• 2025 (2) TMI 1006
  Constitutional validity of Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 - ultra vires of Articles 14, 19(1)(g) and 20 of the Constitution of India - availment of fraudulent Input Tax Credit (ITC) on the invoices issued by respondent No.3 - HELD THAT:- As per the contents of the show-cause notice, a specific intelligence was gathered by the officers of the CGST and Central Excise, Indore Commissionerate that as many as 12 noticees are indulged in issuance of fake invoices to various manufacturers without actual supply of goods. The investigation further revealed that the noticees had shown supply of various commodities to their recipients despite the fact that their supply pertains to FMCG goods. A detailed show-cause notice which runs into 82 pages has been issued to the petitioner and 11 other purchasers as well as respondent No. 3/supplier. Therefore, only on the instance of the petitioner the entire show-cause notice cannot be quashed. Petitioner is required to establish its defence by producing documents before the competent authority, who shall examine the invoices and bills generated by all the noticees during the enquiry. It appears that in order to avoid the participation in the enquiry, petitioner is challenging the constitutional validity by placing reliance on the judgment passed by the Delhi High Court in case of On Quest Merchandising India Pvt. [ 2017 (10) TMI 1020 - DELHI HIGH COURT ] in respect of Delhi Value Added Tax Act, 2004 in which the pari materia provision was read down . Conclusion - The non-obstante clause in the negative sentence in Section 16(2) restricts the eligibility under Section 16(1) for entitlement to claim ITC. There are no good ground for entertaining this petition - petition dismissed.

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• 2025 (2) TMI 1005
  Adjustment of the amount paid based on the demand raised by the respondents in Form GST DRC-07 - HELD THAT:- Having considered the scheme of rule 142 of the said rules which provides that voluntary payments or payments made pursuant to intimation made in FORM GST DRC-01 by the proper officer before a demand is raised shall be made in FORM GST DRC-03, however, once a demand is raised or an order is passed and a demand is raised for recovery in GST DRC-07, the payment thereof could only be made by crediting the demanded amount in the electronic liability registered in FORM GST PMT-01 against the debit entry created for such demand. It is noted that sub-rule (2B) of rule 142 has recently been inserted by notification no.12/24 dated 10th July, 2024 which takes care of payments made in FORM GST DRC -03 against a recovery demand as well. Admittedly, in this case the petitioners had paid the demand, in Form GST DRC-03 instead of crediting the said amount in electronic liability register in Form GST PMT -01 against the debit entry created for the said demand. It appears that rule (2B) taking note of such anomalous situations has provided for an opportunity to such person to apply in Form GST DRC-03A electronically on the common portal for availing the benefit of the amount already paid in Form GST DRC-03, for the same to be credited in the electronic liability register in Form GST PMT 01 against the debit entry already created for the said demand. Since, it is an admitted position that the petitioners had made payment in Form GST DRC-03, the petitioners are permitted to make an appropriate application in Form GST DRC-03A electronically. If the petitioners make an application under Section 54 of the said Act, such application shall duly be processed and the amount as aforesaid already recovered shall be refunded back to the electronic cash/credit ledger of the petitioners within a period of two weeks from the date of making such application. The writ petition is disposed of.

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• 2025 (2) TMI 1004
  Non-service of SCN - notices issued under Section 73 of the Act, were uploaded on Additional Notices and Orders Tab of the G.S.T. Portal - petitioner being unaware of issuance of the notices as well as passing of the order, could neither appear before the authority nor question the validity of the impugned order within the period of limitation - HELD THAT:- In the case of Ola Fleet Technologies Pvt. Ltd [ 2024 (7) TMI 1543 - ALLAHABAD HIGH COURT] a coordinate Bench of this Court inter alia observed and held that At present, it does appear that the petitioner is entitled to a benefit of doubt. No material exist to reject the contention being advanced that the impugned order was not reflecting under the tab view notices and orders . On merits, as noted in the earlier orders an other dispute exists whether all replies and annexures to the replies as filed by the assessee were displayed to the assessing officer and whether those have been considered. We find, no useful purpose may be served for keeping this petition pending or calling for a counter affidavit or even relegating the petitioner to the available statutory remedy. The order impugned dated 05.04.2024 passed by the Assistant Commissioner, State Tax, Sector 8, Varanasi (Annexure-1 to the writ petition) is quashed and set aside - petition allowed.

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• 2025 (2) TMI 1003
  Rejection of petitioner s appeal on the ground of delay - Reversal of the input tax credit availed by the petitioner - HELD THAT:- This Court finds that the second respondent, in rejecting the petitioner s appeal on the ground of delay, applied the provisions of the GST Act strictly. However, it is the opinion of this Court that the delay of 35 days in filing the appeal, while significant, could be condoned in the interests of justice, considering the circumstances surrounding the delay and the actions already taken by the petitioner to discharge a substantial portion of the disputed tax liability. This Court is of the view that the appeal should not be dismissed merely due to a procedural delay, especially when the petitioner has made an effort to comply with the statutory requirements, including the pre- deposit of 10% of the tax liability and additional payments towards the disputed tax amount. Therefore, this Court is inclined to provide the petitioner an opportunity to present the matter on its merits before the second respondent. The matter is remanded back to the second respondent for fresh consideration, directing the second respondent to consider the appeal on its merits and in accordance with law, taking into account the facts and circumstances of the case - Petition disposed off by way of remand.

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• 2025 (2) TMI 1002
  Detention of vehicle - whether detention of goods, which were carried in a vehicle under the cover of three invoices, were different from the goods which were actually found in the vehicle during the course of inspection? - whether there was an intent to evade payment of tax? whether the appellant/writ petitioner was guilty of suppression of facts with a view to evade payment of tax? - HELD THAT:- There is no split up details as regards the nature of the goods, which were carried but the broad classification has been mentioned in the invoices. It is not in dispute that the quantity or the weight of the goods, which were carried in the vehicle, has been found to be correct by the department on physical verification and there is no discrepancy. Apart from that gross description of the product as contained in the invoices also does not show any change of product carried in the vehicle. The inspecting authority appears to have made a roving enquiry and went beyond the description of the goods as described in three invoices and has recorded information regarding the size of the pipe, shutter, TMT Bar which detail was not mentioned in the invoices. Therefore, the question of invoking Section 129 of the Act does not arise in the facts and circumstances of the case. It is not the case where procedures under Section 129 of the Act could have been drawn and the goods could have been detained and penalty could have been imposed. It may be a different matter if during the process of adjudication the authority has taken up the case with regard to classification of the products, which is not the case on facts. The authorities are directed to release the vehicle along with the goods within four days from the date of receipt of the server copy of this order - Application disposed off.

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• 2025 (2) TMI 1001
  Condonation of delay of nearly 20 days in filing appeal - Seeking to call for the records - HELD THAT:- The appeal was dismissed since it was filed with the delay. In the present case, the appeal was filed with the delay of nearly 20 days due to the reason that the petitioner was not able to file the appeal through online mode. The reason of the delay in filing appeal appears to be just and reasonable. Therefore, this Court is inclined to condone the delay and set aside the impugned rejection order passed by the Appellate Authority. The delay is condoned and the rejection order dated 19.11.2024 made by the Appellate Authority is set aside. Accordingly, the matter is remanded back to the Appellate Authority. Petition allowed by way of remand.

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• 2025 (2) TMI 1000
  Violation of principles of natural justice - no notice was issued before issuing the show cause notice - Seeking to call for the records of the respondent in Form GST DRC-07 - HELD THAT:- In the present case, as per Section 44 of the Act, there was delay in filing the annual return by the petitioner. In the event of delay in filing the annual return, late fee would be levied under Section 47(2) of the Act - A reading of the Section 47(2) of the Act, it is clear that any registered person, who fails to furnish the return required under section 44 by the due date shall be liable to pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum of an amount calculated at a quarter per cent of his turnover in the State. In the event of non-filing of the return, the respondent can call upon the petitioner to pay the late fee in terms of Section 47 of the Act, which is independent provision deals with any default or belated filing of return. Therefore, this Court does not find any fault in the show cause notice issued by respondent under Section 47 r/w 73 of the Act. The respondent is entitle to initiate proceedings as per applicable provision for non-filing of return. However, in the present case, the respondent has imposed the late fee under Section 47 of the Act and also penalty under Section 125 of the Act. In the present case, penalty was imposed in the form of late fee in terms of Section 47 of the Act. Therefore, general penalty of Rs. 50,000/- towards CGST and SGST is not correct and the same is set aside. As far as late fee is concerned, the same is confirmed. This writ petition is partly allowed.

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• 2025 (2) TMI 999
  Rejection of application for voluntary cancellation of Goods Services Tax registration - HELD THAT:- As long as the petitioner was able to satisfy that the supplies were, in fact, obtained from suppliers who were registered at the relevant time and had discharged their corresponding tax liability, the mere fact that the registration of those suppliers came to be cancelled subsequently or with retrospective effect, would not be a reason germane for the purposes of examining the request for voluntary cancellation. This would, of course, be subject to due verification by the respondents. The writ petitioner is directed to furnish a response in terms indicated above for the consideration of the competent authority of the respondents within a period of three weeks from today. The application seeking voluntary cancellation may be taken up for consideration thereafter. Petition disposed off.

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• 2025 (2) TMI 998
  Seeking a direction towards the respondent authorities to release the pending amount in lieu of the reimbursement of GST for the works - HELD THAT:- From perusal of the document Annexure P/10, it appears that the Executive Engineer has already proposed for reimbursement of GST to the petitioner, hence the petitioner is entitled to the same. The respondent No.2/ Executive Engineer (PWD), Bridge Constitution Division, Bilaspur is directed to reexamine the claim raised by the petitioner and if the petitioner is found to be entitled for the reimbursement of GST, the same shall be disbursed to the petitioner within a period of 8 weeks from the date of receipt of a copy of this order, in accordance with law. This writ petition is disposed of.

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• 2025 (2) TMI 997
  Inaction on the part of the respondents in not refunding the amount of GST collected from the petitioner in the course of execution of the contract that was awarded to the petitioner - HELD THAT:- The writ petition as of now stands disposed of directing the respondent Authorities to immediately process the claim of the petitioner so far as the refund of GST is concerned, after the due verification of facts and also the entitlement part of the petitioner is concerned. Let an appropriate decision be taken keeping in view the contention of the petitioner that in many of the similar cases of other departments like PWD, PMGSY, NHAI, RAILWAYS, and CPWD the government itself has refunded the GST. The present writ petition stands disposed of.

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• 2025 (2) TMI 996
  Challenge to Appellate Order passed u/s 107 of the 2017 Act - whether the first respondent-Appellate Authority has exercised its discretionary power under sub-Section(4) of Section 107 of 2017 Act judiciously? - HELD THAT:- A perusal of the impugned order reveals that the first respondent-Appellate Authority failed to exercise its discretionary power under sub-Section (4) of Section 107 of 2017 Act judiciously. Learned counsel for the petitioner submitted that the Managing Director of the petitioner was on travel during the said period. Hence, there was delay of 3 days which was within condonable period. The Appellate Authority failed to consider the reason or cause shown for condoning the delay of 3 days. The appellate authority failed to examine as to delay was within condonable period under Section 107(4) of 2017 Act and whether appellant has shown sufficient cause to condone delay of three days. Thus sufficient cause is shown by the petitioner to condone the delay of 3 days in preferring the appeal which is within condonable period prescribed under sub-Section (4) of Section 107 of 2017 Act. Conclusion - Delay of 3 days in preferring the appeal before the first respondent/Appellate Authority under Section 107 of 2017 Act is condoned. Petition allowed.

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• 2025 (2) TMI 995
  Challenge to garnishee order - restoration of the proceeding based on evidence of tax payment provided in a CBEC challan - HELD THAT:- Impugned order is set aside and quashed. The garnishee order dated 27th September, 2024 at annexure-6 is also set aside. The proceeding is restored. Petitioner will communicate certified copy of this order to opposite party no.1 by 27th January, 2025 and obtain date of hearing. Omission to communicate will automatically restore impugned order. Petition disposed off.

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• 2025 (2) TMI 994
  Violation of principles of natural justice - no opportunity of hearing as contemplated by Section 75(4) of the GST Act, 2017 has been granted - HELD THAT:- A perusal of the notices, the screen shot of the portal dated 03.08.2023 as well as the show cause notice all indicate that the matter was never fixed for hearing. The issue has already been considered by this Court in Kloud Data Labs (P.) Ltd. Vs. Deputy Commissioner of State Tax, [ 2024 (8) TMI 770 - BOMBAY HIGH COURT] , in which it has been held, that even if no reply has been filed, however that does not permit the authorities from doing away with the mandate of Section 75(4) of the GST Act, 2017. Though the impugned order indicates, that on 02.12.2021 nobody attended, however as indicated above the notices do not indicate fixing of any date or time for the purpose of hearing. In that view of the matter, the order dated 06.04.2022 is quashed and the matter remanded back to the Respondents to grant an opportunity of hearing to the Petitioner as contemplated by Section 75(4) of the GST Act, 2017. Petition allowed by way of remand.

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• 2025 (2) TMI 993
  Violation of principles of natural justice - Cancellation of GST registration of the Petitioner as being non-speaking and bad in law - HELD THAT:- A perusal of the impugned SCN at Annexure - P dated 17.01.2023 and the impugned order at Annexure - R dated 31.03.2023 will indicate that the sole ground on which the GST registration of the petitioner has been cancelled by the respondent No.3 is by coming to the conclusion that the petitioner/tax payer was not functioning and existing at the principal place of business. However, the cumulative effect of the various documents produced by the petitioner in the present petition is sufficient to come to the conclusion that the petitioner/tax payer is actually functioning and existing at the principal place of business at Bengaluru and consequently, the sole reason assigned by the respondent No.3 in canceling the GST registration is contrary to the material on record warranting interference by this Court in the present petition. The impugned order is quashed - petition allowed.

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• Income Tax

• 2025 (2) TMI 992
  Prosecution Proceedings initiated u/s 276C - Bogus LTCG - guilty mind i.e., mens rea - willful evasion of tax on claims made under the head LTCG/Short Term Capital Loss - allegation of crime invoking Section 200 of the CrPC for offence punishable under Section 276C - HC held [ 2024 (1) TMI 1007 - KARNATAKA HIGH COURT] stocks vary from JMD Telefilm Industries, Splash Media, Essar India and Alpha. Trading is both by the individuals and by the companies. But, the moment it is brought to the notice of all these petitioners, retracing of steps immediately happen by filing of revised returns. Therefore, it is not a case where ipso facto evasion of tax can be laid against these petitioners - mens rea is an element that is to be present in a proceeding u/s 271 of the Act. The mere fact of not accurate tax, not exact tax or erroneous tax would not lead to the proceedings u/s 276 An offence is made out so as to take Cognisance more so on account of the fact that it is on taking Cognisance that the criminal law is set in motion insofar as accused is concerned and there may be several cases and instances where if the Court taking Cognisance were to apply its mind, the Complaint may not even be considered by the said Court taking Cognisance let alone taking Cognisance and issuance of Summons. Thus the order taking Cognisance is not in compliance with applicable law and therefore is set aside. HELD THAT:- The delay of 271 days in filing the present petition(s) is adequately explained and is condoned. Accordingly, I.A. is allowed. Heard learned counsel for the petitioner. Since the similar special leave petitions have already been dismissed by this Court, we dismiss the present petition(s) as well leaving the question of law open to be decided in some other appropriate case.

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• 2025 (2) TMI 991
  Revision u/s 263 - bogus LTCG - Validity of reopening of assessment u/s 147 - PCIT, Sambalpur exercised the suo motu revisional power u/s 263(1) and an order was passed directing the AO to add an entire amount u/s 68 r.w.s. 115BBE. HC held [ 2023 (3) TMI 268 - ORISSA HIGH COURT] if the original re-assessment order itself was not validly passed, the subsequent revisional order by the PCIT was required to be held invalid. No substantial question of law arises from the impugned order of the ITAT. Court is therefore not inclined to frame the questions of law as urged by the Revenue in the present appeals. HELD THAT:- After having heard learned counsel appearing for petitioner and after perusing the finding of facts recorded by the Tribunal in paragraph 14 and 15 of its judgment which has been confirmed by the High Court, we find no case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special Leave Petitions are, accordingly, dismissed.

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• 2025 (2) TMI 990
  Fixed Place Permanent Establishment (PE) in India - taxability, the existence of a PE and attribution of income - whether NIPL would constitute a PE of Nokia OY? - whether the Liaison Office could be treated as a PE? - HELD THAT:- In Progress Rail [ 2024 (5) TMI 1417 - DELHI HIGH COURT ] on occasion to examine what would constitute preparatory and auxiliary activities, expressions found in Para 4 (f) of Article 5, and which stipulates that as long as the activities undertaken could be said to be preparatory or auxiliary, the establishment would not be liable to be construed as constituting a PE. Clause (f) of Para 4 thus provides that a maintenance of a fixed place of business, even if it be for the undertaking of any of the activities stipulated in the preceding clauses, would still not qualify as a PE if the overall character of such activities were found to be of a preparatory or auxiliary character. Tribunal has committed no error in answering the questions posited in favour of Nokia OY. Undisputedly, the issue of the Liaison Office constituting a PE had come to be settled in the first round of the litigation which ensued before the Tribunal and came to be ultimately affirmed by the 2012 judgment of this Court. The broad questions on which this Court remanded the matter to the Tribunal stood confined to NIPL and its interrelationship with Nokia OY. Whether NIPL constituted a PE appears to have been principally answered in light of it being the wholly owned subsidiary of Nokia OY? - Article 5(8) bids us to bear in mind that the mere control of an entity by a parent or a holding company would not be determinative of whether a PE exists. A subsidiary or an entity which is substantially controlled by another would still have to meet the test prescribed by Paras (1), (2), (3), (5) and (6) of Article 5 before it can be said to constitute a PE. We are also of the firm opinion that the question of PE is not liable to be answered on the basis of a perception of virtual projection. The DTAA does not leave this seminal issue to be decided on the basis of individual estimations or impressions. It lays in place certain empirical standards which must be borne in mind when answering the question whether a PE exists. Issues of virtual projection and functional integration are liable to be answered on an appreciation of facts as may be found to exist. It is here that the precepts propounded by learned scholars such as the use and maintenance of a place of business, the place being at the disposal of an enterprise or being liable to be viewed as an operating asset of the enterprise itself assume significance. What, however, needs to be emphasized is that these are aspects which cannot possibly be left to depend upon the tenuous thread of fluctuating perceptions, impressions and mutable beliefs. Article 5 thus bids us to answer the question of PE based on measurable evidence and the objective benchmarks incorporated therein. The exercise to ascertain whether a PE exists is thus founded on evidence-based standards rather than a theory or mere surmise. We consequently find ourselves unable to countenance the perception test which was propounded by the Tribunal in the earlier round of litigation. When tested on the standards consistently recognized by courts, it becomes apparent that the appellants had woefully failed to establish that NIPL or its premises could be recognised to be a PE when tested on the mandated criterion of either a Fixed Place or a Dependent Agent PE. Having gone through the copious material which was examined and evaluated by the Tribunal, we have no hesitation in affirming its view insofar as Fixed Place PE is concerned. We also find ourselves unconvinced of the arguments advanced by the appellants before us in their attempt to question the correctness of its conclusions insofar as DAPE is concerned. The reasons underlying our conclusion are set out hereinafter. Examining the minority opinion - It becomes pertinent to note that the learned Member has, in our opinion, correctly noted that there is no general presumption in law that a subsidiary can never be acknowledged to be a PE. This since Article 5(8) itself merely states that the said factor alone shall not be determinative of the PE question. The covenant thus clearly obliges us to evaluate the facts based on the other provisions comprised in Article 5 of the DTAA. We also concur with the minority opinion when it held that the appellants had failed to establish the existence of a DAPE. It has, however, in this respect observed that while the view expressed in the previous round, stricto sensu, may not have been wholly accurate or tenable, the question of PE would still be liable to be answered basis the essence of the arrangement between Nokia OY and NIPL as was discerned by the AO and the CIT(A). The second aspect which appears to have weighed upon the minority was the commitment towards technical support as held out by Nokia OY as well as its assurance against dilution of its interest in NIPL. All this, according to the minority, amounted to a virtual performance guarantee and ultimately concerned with furtherance of the business interests of the assessee company in India, as much, if not more, for its own economic and business interests. It is this underlying theme and line of reasoning which then breathes through the entire opinion. The minority then proceeds to notice and apply the principle of alter ego companies as being pertinent to the issue of PE. However, the alter ego test was subjected to the caveat of it being found that the resident company had no significant independent activity of its own. The minority then also culled out a distinction between an associated PE (and which it chose to describe as a direct PE) and an unassociated PE ( indirect PE as per the minority). In our opinion, the reasoning so adopted clearly seeks to blur the distinction which the law seeks to draw between associated enterprises and which may legitimately enter into transactions inter se and which would satisfy the arm s length test. The agency PE which is contemplated in Article 5 (5) is concerned with a person who acts on behalf of an enterprise and undertakes activities specified in clauses (a), (b) and (c) thereof. Such an agent must and in light of the textual construct of Article 5 (5) be one who acts on behalf of , in the name of and for the enterprise itself . The minority thus in its attempt to conflate a Fixed Place PE with DAPE has merely confounded two distinct issues. It has thus chosen to ignore the primordial conditions of virtual projection and premises at the disposal of an enterprise being found to exist so as to constitute a PE. We may only observe that a parent or a holding company would invariably be expected to have an interest and concern in the working of an overseas subsidiary. This essentially represents its right of oversight, supervision and protection of shareholder interest. However, the exercise of those powers does not denude the subsidiary of its independent economic existence. Ultimately, it would have been imperative for the appellants to have established that NIPL was an enterprise through which Nokia OY was operating and carrying on its own business and that the former was no more than an adjunct of Nokia OY itself. The mere fact that Nokia OY held out an assurance in respect of a fledgling venture in its formative years fails to convince us to hold that the former constituted its PE. The assurances were clearly not liable to be viewed as being evidence of Nokia OY using NIPL as a vehicle for its own enterprise. Insofar as the issue of software is concerned, it was fairly conceded that the same would be liable to be answered against the appellants in light of the judgment of the Supreme Court in Engineering Analysis Centre of Intelligence Private Limited [ 2021 (3) TMI 138 - SUPREME COURT ] Answer the questions as posited in the negative and against the appellants.

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• 2025 (2) TMI 989
  Income Tax Department to conduct an inquiry and investigate the alleged illegal cash transactions - HELD THAT:- Petitioner is unable to indicate as to what fundamental or statutory rights of the petitioner have been infracted or violated. From the submissions as also after perusing the pleadings of the petitioner, it appears that the present petition is predicated upon a matrimonial feud between the petitioner and respondent no. 3. That apart, record also reveals that the disputes are hotly contested and involve highly complex and disputed questions of facts which will not be within the purview of the Income Tax department to adjudicate. Similarly, such disputed questions of facts also cannot be adjudicated under Article 226 of the Constitution of India. As also been unable to indicate the provision under which such a complaint has been submitted to the Income Tax department. Clearly, the complaint was not under a statutory scheme or a regulatory mechanism available under the Income Tax Act, 1961, thus the question of non-response to such complaint constituting violation of fundamental right or even a civil or statutory right of the petitioner, is non-existent. The said submission is unmerited.

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• 2025 (2) TMI 988
  Attachment of bank account - disposal of the appeal filed under Section 251 - HELD THAT:- According to the petitioner, since the aforesaid assessment is a high pitched assessment, the petitioner had prayed for stay of the entire demand raised by the respondent authorities u/s 156. Record would reveal that not only the Deputy Commissioner of Income Tax but the PCIT had in the year 2019 itself rejected the petitioner s application for staying the entirety of the demand and the petitioner was called on to make immediate payment of 20% of the demand already raised. It is true that in case where a high pitched assessment is made ordinarily when an appeal is preferred within the stipulated period of limitation, the demand may not to be enforced till disposal of the appeal. The Hon ble Division Bench of this Court in the case of Jankalyan Vinimay [ 2023 (8) TMI 723 - CALCUTTA HIGH COURT] has taken the above view. In the present case, however, taking note of the fact that there is no explanation for the delay, for the petitioner approaching this Court after four and half years from the date of rejection his application for stay of the entirety of the demand and the order attaching his bank account, petitioner is not entitled to the stay of the order of attachment at this stage. Appellate authority should expeditiously hear out and dispose of the appeal not later than six weeks from the date of communication of this order upon giving reasonable opportunity of hearing to the petitioner. It is made clear that in the interregnum, if any amount is credited to the petitioner s bank account which is the subject matter of attachment, the same shall be retained with the bank to the credit of the appeal.

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• 2025 (2) TMI 987
  Benefit u/s 10 (26) - direction to the NF Railway to pay the tax which was deducted at source to the decree holder/Respondent No.1 herein on the ground that in terms with Section 10 (26) there is an exemption of Income Tax on Scheduled Tribes - whether the said decree holder is a recognized Scheduled Tribe within the State of Assam? - HELD THAT:- As in the instant case, the consignment was booked from Jharkhand to North Lakhimpur. The entitlement of the interest on the compensation has to be taken as an income accrued at North Lakhimpur. The said area i.e. North Lakhimpur do not fall within the ambit of the Sixth Schedule insofar as the State of Assam is concerned. Considering the above, as the benefit u/s 10 (26) of the Act of 1961 can only be permissible to a Schedule Tribe when the income had to accrue in the areas as specified in Section 10 (26), this Court is of the opinion that the learned Railway Tribunal erred in law and committed an error in exercising its jurisdiction while passing the orders dated 06.01.2017 as well as 09.06.2017 which have been impugned in the instant proceedings only on the ground that the claimant was a tribal of Arunachal Pradesh. The said being an error in exercise of jurisdiction, this Court interferes with the said orders dated 06.01.2017 as well as 09.06.2017.

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• 2025 (2) TMI 986
  Revision u/s 263 - provision for bad debts was made in the profit and loss account, the same is not seen obliterated - HELD THAT:- AO did not show any application of mind and mechanically accepted the statement of the assessee. When the assessee is found to have claimed deduction towards the provision for doubtful assets for the purpose of computation of book profit under Section 115-JB, AO did not state any reason as to why he decided, if at all, to accept the explanation of the assessee despite the fact that the said amount was not debited for the provision for doubtful account and consequently, the provision of doubtful debts account has not been obliterated. Thus, it is only for disclosure purposes that the amount was shown as a reduction from the trade receivables in the balance sheet. The assessee has not included the said amount as written off debts, but was hopeful of getting it back at some point of time. Viewed in the above perspective, we cannot find fault with the Principal Commissioner of Income Tax for having exercised his jurisdiction under Section 263 of the Income Tax Act, 1961. Consequently, the order passed by him after hearing the appellant and directing the assessing officer to re-examine the said issue is perfectly justifiable and legal. Tribunal, on the other hand, had analysed the position of law as stated by us above and concluded rightly that the order passed by the Commissioner of Income Tax did not suffer from any illegality or perversity. Therefore, we are of the considered view that the order impugned in the appeal does not suffer from any jurisdictional infirmity. Decided against the assessee.

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• 2025 (2) TMI 985
  Validity of reassessment proceedings beyond period of limitation - HELD THAT:- In the present case, the period of six years for the relevant AY 2016-17, thus, expired on 31.03.2022. The impugned notice has been issued thereafter, and the same is, thus, barred by limitation.

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• 2025 (2) TMI 984
  Assessment u/s 153A when no incriminating material was found during the search - AO has only made the addition by invoking the provisions of Section 68 on account of unexplained cash credits, receipts from the sale of house u/s 57 and trading addition on additional sales - HELD THAT:- Revenue is unable to controvert the argument of the assessee that there is no incriminating document referred to in the assessment order by the AO nor any such document was produced either before the ld. CIT(A) or before the Tribunal. Therefore, by respectfully following the judgement of Abhisar Buildwell [ 2023 (4) TMI 1056 - SUPREME COURT] we are of the opinion that no addition could be made in the hands of the assessee in the order passed u/s 153A in absence of any incriminating material. Accordingly, we direct to delete the additions made without referring to any incriminating material. Liberty is granted to the AO to initiate reassessment proceedings u/s.147/148 of the Act as per law in case of completed/unabated assessment, if no incriminating material found during the course of search. Accordingly, the ground of appeal no. 1 of the assessee is allowed.

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• 2025 (2) TMI 983
  Correct head of income - characterization of income - gain on sale of part of property/shops - Capital Gains or Profits from business and Profession - HELD THAT:- Assessee has pointed that the assessee had sold some shops during the period relevant to AY 2017-18 and had offered gain on sale of said shops as Long Term Capital Gain in the return of income. AO while making assessment u/s. 143(3) examined the issue in detail and accepted the gain on sale of shops as Long Term Capital Gain. Once, the Revenue has accepted the property as investment and sale of part of such property as Long Term Capital Gain the principle of consistency demands that when there is no change in the nature of holding of the property in impugned assessment year, the gain on sale of part of such property cannot be re-characterized as Business Income . Decided against revenue.

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• 2025 (2) TMI 982
  Addition u/s 68 - bogus share capital and share premium received from various persons - HELD THAT:- We find that the CIT(A) deleted addition of bogus claim of deprecation, whereas confirmed the addition in respect of bogus entry of share capital and share premium. Once it is established that the increase in assets and liabilities in the balance sheet is on account of bogus entries, the statement with regard to bogus entries on the asset sides having been accepted corresponding effect on the liability side should also have been given. The affidavit sworn by Chartered Accountant of the assessee is either have to be accepted in whole or rejected in toto. Once it is accepted that there were bogus entries on the assets side and corresponding entire on the liability side should also have been accepted. Taking into consideration entire facts of the case, the addition made on account of bogus share capital and share premium is deleted. Addition is deleted under the provisions of Income Tax Act, however, we do not subscribe to the unscrupulous method adopted by the assessee for obtaining higher credit facilities from the bank by window dressing balance sheet. The conduct of the assessee is deplorable.

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• 2025 (2) TMI 981
  Powers provided u/s. 12AB for cancelling the registration granted to the assessee u/s. 12A - PCIT (Central) jurisdiction to cancel the registrations u/s 12A/12AA/12AB - specified violation HELD THAT:- As going through the above decisions of Maa Jagat Janani Seva Trust [ 2024 (7) TMI 1020 - ITAT CUTTACK] wherein catena of judgments have been referred and also the ratio laid down in the case of Industrial Infrastructure Development Corporation (Gwalior) M.P. Ltd. [ 2018 (2) TMI 1220 - SUPREME COURT ] has been followed, we find that the same is squarely applicable on the facts of the instant case and therefore we are inclined to hold that since there is no express power provided u/s. 12AB(4) of the Act for cancelling the registration granted u/s. 12A, PCIT (Central) grossly erred in issuing show cause notice u/s. 12AB(1) of the Act on 21.07.2023. The said show cause notice is held to be invalid and void ab-initio and therefore finding of ld. PCIT (Central) is reversed and we hold that registration granted u/s. 12A of the Act cannot be cancelled during the proceedings carried out u/s. 12AB(4) of the Act. Assessee challenging the powers available in section 12AB that the show cause notice issued u/s. 12AA on 20.03.2024 is also invalid - Assessee stated that section 12AA(5) of the Act provides that nothing contained in section 12AA of the Act shall apply on or after 01.04.2021 - As in the instant case the proceedings for cancellation of registration have been initiated on 21.07.2023 and therefore even the registration u/s. 12A cannot be cancelled u/s.12AA of the Act in the instant case because the proceedings have been initiated u/s. 12AB which have been brought into Act w.e.f. 01.04.2021. Therefore, the show cause notice u/s. 12AA of the Act issued on 20.03.2024 for cancelling the registration u/s. 12AA(3) and 12AA(4) of the Act for the period 01.04.2019 to 31.03.2021 is invalid and ab-initio as the PCIT (Central) has issued the show cause notice dated 20.03.2024 in a section already stood discontinued from 01.04.2021 onwards. Thus, the assessee succeeds on this second limb of its legal ground. In the show cause notice PCIT has referred to specified violation committed by the assessee by virtue of which the assessee trust has not applied its income wholly and exclusively for the purpose for which it is established but using it directly or indirectly for the benefits of its trustees and other members of the trust - As sub-section (3) and (4) of section 12AA, there is no mention to any specified violation but only refers to the genuineness of the activity carried out by a trust or institution, however, PCIT has only referred to some specified violations during F.Yrs. 2019-20 to 2021-22 which was going on under scrutiny by AO. There were only few statements which were recorded during the course of search which are the basis of the alleged allegation and that too have been retracted and apart from that no other evidence and no accounted assets, unaccounted income were found during search at assessee s premises and therefore they are merely allegations and there is no concrete finding disproving the genuineness of activities of trust. Therefore, even sub-section (3) and sub-section (4) of section 12AA could not have been invoked in absence of any specified violation for the years under consideration. To conclude we allow the legal ground raised by the assessee and hold that since the show cause notices issued to the assessee on 21.07.2023 and 20.03.2024 are invalid and void ab-initio for want of express powers for cancellation of registration u/s.12A of the Act and also proceedings wrongly started u/s. 12AA of the Act in view of the amendment brought in from 01.04.2021 and lastly the specified violation word being inserted from 01.04.2022 cannot be applied for the alleged violation made from F.Yrs. 2019-20 to 2021-22 and therefore hold that ld. PCIT (Central) grossly erred in cancelling the registration granted to assessee u/s. 12A on 16.02.2001 and also erred in cancelling the registration granted u/s. 12A r.w.s.12AB of the Act granted on 28.05.2021. Thus registration u/s. 12A and 12AB of the Act granted to the assessee trust are restored. Observation of PCIT based on the seized document, and other loose sheets found during the course of search along with the Pendrive found at the residential premises of Chief Accountant of the assessee trust and proceeding to cancel the registration - As remains uncontroverted that assessee trust is carrying out genuine activities as per its objects forming part of registration certificate granted u/s. 12A/12AB of the Act and running a Medical College, Hospital and Research Centre. Even ld. PCIT has not referred to any other discrepancy in the regular day to day activity of the assessee trust except to the loose documents found during the course of search and that to only pertaining to F.Yrs. 2019-20 to F.Y. 2021-22. Total focus of the ld. PCIT has been around these documents referred in the impugned order but other than these documents nothing wrong has been found in the regular day to day activity of the assessee trust. We also notice that the alleged documents are only confined to the staff salary, doctor salary and capitation fee but the assessee trust is carrying out many more activities and the expenses are of much more magnitude which involves the amount spent towards building construction, medicine, machines, college building and other expenses which are appearing in the audited books of account. If it is established that the assessee trust/societies is carrying out genuine activities as per the objects for which they have been established, then the issue arising out of any loose paper/documents/ incriminating material alleging that the funds of the society have been misappropriated or there is ambiguity in the claim of expenses, the same can be taken care of at the time of assessing the income and the additions involving such issues can be made but for the remaining income of the society, benefit of exemption u/s. 11 of the Act cannot be denied. We are inclined to follow the decision of Shri Jairam Education Society [ 2021 (10) TMI 911 - ITAT INDORE ] and the same being squarely applicable on the facts of the instant case hold that PCIT erred in cancelling the registration granted to the assessee u/ss. 12A and 12AB of the Act solely on the ground of alleged documents even when the activities of the assessee trust are found to be genuinely carried out are charitable in nature and are in accordance with the objects of the trust and addition if any emanating out of the seized record can be taken care by the Assessing Officer in the assessment proceeding. Conclusion:- PCIT erred in cancelling the registration granted to the assessee u/s. 12A on 16.02.2001 and also erred in cancelling the registration granted u/s. 12A r.w.s.12AB of the Act for period 01.04.2021 onwards. Accordingly registration granted u/s. 12A of the Act and u/s. 12A r.w.s.12AB of the Act stands restored. Allow the Grounds raised by the assessee observing that since the assessee is carrying out genuine charitable activities as per the objects of the trust the ld. PCIT erred in cancelling the registration u/s. 12A/12AB of the Act based on some statements recorded during the course of search but subsequently retracted and other seized material which were the subject matter of assessment proceedings undergoing at that point of time and therefore even if any addition is made by the AO, the benefits of registration u/s. 12A/12AB of the Act shall continue to be enjoyed by the assessee for the remaining amount of income earned by it. Assessee succeeds on Ground further because the specified violation allegedly made by the assessee trust cannot be said to be justified because the word specified violation has been brought into the Act from 01.04.2022 and the alleged violation are based on the documents and details for the F.Yrs. 2019-20 to 2021-22 which are prior to 01.04.2022.

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• 2025 (2) TMI 980
  Reopening of assessment u/s 147 - Notice after the expiry of 4 (four) years - requirements under section 151(ii)(a) - notice was issued under the old provisions of the Act - scope of new provision/scheme introduced by the Finance Act 2021 - HELD THAT:- AO has completed the reassessment proceedings under old provisions of the Act. Since Section 149 of the Act 1961 requires notice to be issued by Income Tax Authority, therefore, in terms of sub Section (1) of Section 282A it has to be signed by that authority and to be issued in paper form or communicated in electronic form by that authority in accordance with procedure prescribed. Thus, considering the provisions of Section 282 and 282A of the Act, 1961 and the provisions of Section 13 of the Act, 2000 and meaning of the word issue NFAC concluded that firstly notice shall be signed by the assessing authority and then it has to be issued either in paper form or be communicated in electronic form by delivering or transmitting the copy thereof to the person therein named by modes provided in section 282 which includes transmitting in the form of electronic record. Section 13(1) of the Act, 2000 provides that unless otherwise agreed, the dispatch of an electronic record occurs when it enters into computer resources outside the control of the originator. Thus, the point of time when a digitally signed notice in the form of electronic record is entered in computer resources outside the control of the originator i.e. the assessing authority that shall be the date and time of issuance of notice under section 148 read with Section 149 of the Act, 1961. In this case, it was observed from the copy of Notice u/s 148 filed by the assessee, that the Notice bears the date 31/03/2021 and the Digital Signature of AO shows the date Thursday April 1, 2021 2.27 PM On the foot note of the said notice, following has been written: If digitally signed, the date of digital signature may be taken as date of document . In view of the above discussion, NFAC concluded that the impugned notice u/s 148 of the Act shall be treated to have been issued on 01.04.2021 as the same has been digitally signed by the AO on 01-04-2021 and in no case, issue of notice can take place before signing of the same either electronically or otherwise. Thus, in this case, the reassessment notice was held to be issued on 01.04.2021 and accordingly, new provisions of making reassessment, Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (hereinafter referred to as TOLA ), ratio of Supreme Court Judgement and consequent CBDT Instruction No. 1/2022 dated 11.05.2022 are made applicable by the NFAC. DR has failed to establish that the order of NFAC is in any way beyond the principles laid down by the Hon ble Supreme Court in the aforesaid referred in Rajeev Bansal [ 2024 (10) TMI 264 - SUPREME COURT (LB) ] and Ashish Aggarwal [ 2022 (5) TMI 240 - SUPREME COURT ] The question to be examined is not just about the competence of sanction giving authority u/s 151 of the Act, but the larger issue has been examined by the NFAC and rightly decided against the AO.

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• 2025 (2) TMI 979
  Addition on account of alleged payment of on-money by assessee for purchase of residential unit - AO while alleging payment of on money by the assessee to the builder has taken the difference of actual payment made by the assessee to the builder and the registered value of the property - HELD THAT:- Holding such difference as on money is bizarre. The assessee has made payment for purchase of property from declared and proved sources. All the payments to the builders have been made either from loan account or through banking channel from foreign remittances. The assessee in order to substantiate source of payment has placed on record bank statement and loan disbursement details. Hence, to make addition of difference between actual payment and registered value as on money is unwarranted and without any basis, when the entire amount is paid from declared sources through banking channels. The Revenue has not substantiated assessee s any undisclosed source of income in India for payment of alleged on money. Decided in favour of assessee. Addition on the basis of directions of the DRP - HELD THAT:- As per Sub-section (13), once the DRP issues directions, the AO shall in conformity with the directions, complete the assessment without providing any further opportunity of being heard to the assessee within one month from the end of the month in which such directions are received. The scheme of section 144C does not provide option to the DRP to issue directions to the AO to make further enquiries or verification after DRP directions. Section 144C(7) empowers the DRP to conduct enquiries and verifications on the documents furnished by the assessee during DRP proceedings. DRP cannot cause the AO to verify documents placed before the DRP before passing the Final Assessment Order. DRP has gone beyond its jurisdiction in giving such directions to the AO, hence, addition made by the AO in Final Assessment Order is without jurisdiction. Ergo, addition is directed to be deleted - Decided in favour of assessee.

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• 2025 (2) TMI 978
  Penalty u/s 271(1)(c) - allegation of defective notice - non specification of clear charge - HELD THAT:- AO initiated the penalty proceedings by issuing the notice u/s 274/271(1)(c) of the Act without specifying whether the assessee has concealed particulars of income or assessee has furnished inaccurate particulars of income , so as to provide adequate opportunity to the assessee to explain the show cause notice. Rather notices in this case have been issued in a stereotyped manner without applying any mind which is bad in law, hence is not a valid notice sufficient to impose penalty u/s 271(1)(c). AO has issued notices under section 274 r.w.s. 271(1)(c) of the Act without striking off the irrelevant words the penalty proceedings shows the non-application of mind by the Assessing Officer and is, thus, unsustainable. Appeal of the assessee is allowed.

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• 2025 (2) TMI 977
  Penalty u/s 271(1)(c) - allegation of defective notice u/s 274 - assessee offered undisclosed income in the statement recorded u/s 132(4) of the Act and paid the due taxes while filing return in response to notice u/s 153A - HELD THAT:- Similar issue has already been dealt with by this Bench in its recent decision in the case of Raj Kumar Agrawal [ 2024 (8) TMI 1531 - ITAT RANCHI] wherein as contested penalty order u/s 271(1) (c) on alleged defective notice issued u/s 274. The Bench after taking note of the facts of the case and proposition of law as emerging from cited decisions above cancelled all the penalty orders. As in the penalty notice issued u/s 274 r.e.s.271(1)(c) of the Act, the inapplicable words were not struck off, the levy of penalty therefore is vitiated and is held bad in law. Decoded in favour of assessee.

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• 2025 (2) TMI 976
  Expenses incurred under the head Public Relation Expenses - expenditure was not allowable as business expense with the meaning of section 37 - HELD THAT:- In the present case, it is not even the plea of the AO that because the order passed by the Tribunal is under challenge before the Higher Courts, therefore till there is finality on the issue, the approach adopted by it in earlier years was followed. Thus, we, deprecate such an act of the AO, who is not only a tax administrator but is also discharging the quasi-judicial functions under the Act while completing the assessment of the assessee, and therefore, is required to follow the principles of precedence and not simply follow the earlier years approach which has already been overruled by a higher judicial forum. DR could not show any reason to deviate from the aforesaid order and no change in facts and law was alleged in the relevant assessment year. The issue arising in the present appeal is recurring in nature and has been decided in favour of the assessee by the decision of the coordinate bench of the Tribunal for the preceding assessment years. Ground no.1 raised in Revenue s appeal is dismissed. TDS u/s 195 - Disallowance made u/s 40(a)(i) - share services expenses paid to BASC, which is situated in Malaysia - HELD THAT:- We find that while considering a similar issue in assessee s own case for the assessment year 2008-09, the coordinate bench of the Tribunal following the decision of the coordinate bench of the Tribunal in the case of the assessee s sister concern in DCIT v/s BASF Catalyst India Private Limited [ 2016 (11) TMI 1765 - ITAT CHENNAI] held that the provisions of section 40(a)(i) of the Act are not applicable to the payment made to BASC for rendering Finance and Accounting and Human Resource services. Ground no.2 raised in Revenue s appeal is dismissed. Nature of expenses - Disallowance of expenditure incurred on Product Registration - AO following the approach adopted in preceding years disallowed the product registration expenditure after granting depreciation at the rate of 25% - HELD THAT:- We find that the coordinate bench of the Tribunal while considering a similar issue in the assessee s own case for the assessment year 2008-09 , dismissed the Revenue s appeal and held that the product registration expenditure though is a one-time expenditure in relation to a new product, however, cannot be categorised to be capital in nature. Ground no.3 raised in Revenue s appeal is dismissed. Dividend Distribution Tax on the dividend declared and paid - HELD THAT:- The issue arising in the assessee s cross objection is covered in favour of the Revenue by the decision of the Special Bench of the Tribunal in Total Oil India Private Ltd. [ 2023 (4) TMI 988 - ITAT MUMBAI (SB) ] Accordingly, respectfully following the aforesaid decision of the Special Bench of the Tribunal, the ground raised in the cross objection is dismissed.

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• 2025 (2) TMI 975
  Penalty u/s. 271(1)(c) and u/s. 271AAB of the Act - order u/s 143(3) r.w.s. 153C passed making addition on account of cash expenses on account of bogus purchases expenditure u/s. 69C and bogus labour payment u/s. 69C - HELD THAT:- Irresponsible noting by ld. Assessing Officer despite having findings of the Coordinate Bench on the quantum additions on record, reflects absence of fundamental understanding of judicial discipline, while taking up penalty proceedings. The table produced in impugned penalty order, for all the additions made by the ld. AO have been either reduced to a lower percentage from the percentage at which the addition was made or have been deleted in toto. As in the case of addition for cash expenses on account of site expenses , AO made the addition by applying 50% of the expenses which was reduced by CIT(A) to 35% and was subsequently reduced to 20% by the Coordinate Bench. Similar is the case for other expenses and payments for which additions have been made. Even the first appellate authority, despite taking record of partial relief to the assessee in terms of the findings as stated above has observed that there appears to be a malafide intention of the assessee and mens rea is present in the case. He concluded to uphold the penalty so imposed on account of furnishing inaccurate particulars of income by the assessee. As noted both by AO and CIT(A), tabulated above that additions sustained are purely on estimate basis. The issue before us is no longer res integra and it is a settled law that in the said factual position, penalty is not imposable on additions sustained on estimate basis. It is an accepted fact that whenever an addition is made on the basis of estimate, penalty u/s. 271(1)(c) is not leviable. There is no scope to levy penalty under the said section. Accordingly, in the given set of facts, the penalty levied u/s. 271(1)(c) is deleted. Penalty as imposed u/s. 271AAB also deleted as same observations above - Appeal decided in favour of assessee.

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• 2025 (2) TMI 974
  Rectification of mistake u/s 154 - Double taxation of the same interest income - same interest income had already been offered to tax earlier on accrual basis - contention of the Revenue is that the intimation u/s 143(1) was processed as per the details/information stated in the return of income for the AY 2012-2013 and the details of TDS available in form 26AS - HELD THAT:- There was no mistake apparent on record. It is settled legal position that same income cannot be taxed twice in the hands of the Assessee, once on accrual basis and then again on receipt. Given the peculiar facts and circumstances of the present case, the technicalities ought not to obscure justice. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. AO must not take advantage of ignorance of the assessee as to his rights [Circular No. 114 XL-35 of 1955 issued by the Central Board of Direct Taxes, dated 11/04/1955]. Accordingly, we direct the AO to verify that the income as reflected in form 26AS for the AY 2010-2011 and 2011-2012 has been offered to tax as income for the Assessment Year 2010-2011 and 2011-2012, respectively. In case the on verification, the aforesaid is found to be correct, the AO is directed to recomputed the taxable income of the Appellant for the Assessment Year 2012-2013 by reducing from the aggregate interest income earned by the Appellant on CCDs for the AY 2010-2011, 2011-2012 and 2012-13 the amount of interest income already offered to tax for the Assessment Years 2010-2011 and 2011-12. The Assessing Officer is also directed to grant credit of TDS corresponding to the aforesaid income.

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• 2025 (2) TMI 973
  Addition u/s 43CA - difference between the market value and the agreement value - assessee has sold 12 flats for a total consideration leass than market price of the same as pointed out by the Auditor in the audit report - HELD THAT:- A perusal of the assessment order shows that the dates of booking of 12 flats in question were much prior to the dates of registration. A perusal of the details filed by the assessee in the paper book shows that in all the 12 cases the market value (Govt. value) is more than the agreed value as on the date of booking. Since there is a long gap between the date of booking and the date of sale, therefore, the market price (Govt. value) has gone up. Merely because the Auditor has mentioned in the audit report that the assessee has sold certain flats which is less than the market value (Govt. value), the same cannot be the basis for addition without looking to the clear provisions of the Act AO himself has reproduced the details filed by the assessee in the body of the assessment order which clearly shows the gap between the date of booking and the date of agreement. The documents clearly show that the market value i.e. Govt. value as on the date of booking was less than the agreement value as on the date of booking. As decided in the case of Kolte Patil Developers Ltd. [ 2024 (8) TMI 748 - ITAT PUNE] where the Tribunal has decided the issue in favour of the assessee by holding that since the assessee has received a part of consideration as advance as per agreement and the sale deeds were made on the basis of agreement value although the market price has gone up by that time, therefore, in view of provisions of sub-sections (3) and (4) of section 43CA, no addition was called for. Since, admittedly in the instant case the assessee has received a part of the consideration as advance as per the agreement and the sale deeds were made on the basis of such agreement value, although the market price has gone up by that time, therefore, in view of the provisions of sub-sections (3) and (4) of section 43CA of the Act, no addition is called for. Decided in favour of assessee.

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• 2025 (2) TMI 972
  Revision u/s 263 - as per CIT AO has not made any enquiry about the payments made towards supply of machinery by one of the employees - HELD THAT:- Although the specific information was received by the AO, however, the AO has not made any enquiry about the information so received. Further, the tripartite MoU is only a notarized one and not a registered document. Since the Assessing Officer has not made any enquiry with respect to the above transaction especially the role of M/s. Aarti Enterprises in sharing money with the owner of machinery Dr. M.S. Hiremath, who is the specialist doctor with the assessee, therefore, the order passed by the Assessing Officer, in our opinion, has become erroneous and prejudicial to the interest of Revenue. The argument of the assessee that it will not make any difference since the assessee is enjoying the benefit of sections 12AA and 10(23C)(via) and therefore the same is not prejudicial to the interest of the Revenue cannot be accepted at this point especially when specific information was received by the Assessing Officer. Whether it will have any impact or not, is a subsequent matter only when the same is examined and there is due application of mind. Detailed reasoning given by the Ld. CIT(Exemption) for invoking the jurisdiction u/s 263 acceptable. Appeal filed by the assessee is dismissed.

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• 2025 (2) TMI 971
  Penalty u/s 271(1)(c) - defective notice u/s 274 - assessee offered undisclosed income during search operation - HELD THAT:- The assessee contested penalty order u/s 271(1) (c) on alleged defective notice issued u/s 274 of the Act. The Bench in the case of Raj Kumar Agrawal [ 2024 (8) TMI 1531 - ITAT RANCHI] after taking note of the facts of the case and proposition of law as emerging from cited decisions above cancelled all the penalty orders. Since the issue in hand which basically hinges on the alleged defective show cause notice issued in terms of section 274 of the Act, we direct the AO to delete the penalty imposed on the assessee. Decided in favour of assessee.

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• 2025 (2) TMI 970
  Disallowance of deduction u/s 80P - interest income earned from cooperative banks - HELD THAT:- We observe that the issue is now settled in favour of the assessee in the case of Shree Madhi Vighag Khand Udyog Sahakari Mandli Ltd. [ 2025 (1) TMI 767 - GUJARAT HIGH COURT] held that where assessee, a cooperative society, earned interest on investment made with a cooperative bank and claimed deduction u/s 80P(2)(d), since cooperative bank was a cooperative society registered under Gujarat State Cooperative Societies Act, assessee was to be allowed to claim deduction under Section 80P(2)(d) - Appeal of the assessee is allowed.

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• Customs

• 2025 (2) TMI 969
  Condonation of delay in filing the second appeal - misdeclaration and undervaluation of imported Brass Ceramic Cartridges - HELD THAT:- Admittedly, the Appellant had preferred the appeal before the Commissioner (Appeals) and had engaged the said counsel. The notice for personal hearing was served upon the Appellant as also the Counsel, as is evident from the notice dated 08th January, 2020. The Counsel had also attended the hearing. There was no other alternative address, which the Appellant provided, to the Commissioner (Appeals) for service of the order dated 1st June 2020. Under such circumstances, the Commissioner (Appeals) cannot be blamed for having sent the order to the earlier address of the Appellant. There has been clear lack of alacrity on behalf of the Appellant, who has not bothered to verify as to whether any order was passed by the Commissioner (Appeals) in the appeal preferred at its instance. This Court is of the opinion, that the duty existed, also, upon the Appellant to check if any order was passed in the appeal. In the overall facts and circumstances, the Department did not have any other option and has exercised its due diligence in accordance with the procedure. As the Appellant did not provide an alternate address and the Counsel failed to inform the Appellant, the Department cannot be held responsible. Conclusion - The Department had fulfilled its obligations, and the appellant s lack of diligence contributed to the dismissal of the appeal. The order of CESTAT does not warrant any interference - Appela dismissed.

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• 2025 (2) TMI 968
  Benefit of concessional rate of Counter Veiling Duty (CVD) on the imports - import of cement bags of 50 kgs retail packing instead of in bulk, not declaring the purpose of import - importers have failed to fulfill the conditions stipulated in the Notification No.4/2006-CE as amended - HELD THAT:- In the instant case, it is an admitted fact by the importer that he did not purchase the cement from the manufacturer directly. It was an high sea purchase from third party. No doubt, the Bill of Entry contain details of the manufacturer, but that is not sufficient to claim concession rate of duty. The concessional rule not only mandates that the purchase must be from the manufacturer directly but also specifies the mode of manufacturing and the capacity of the manufacturer. If the reasoning given by the CESTAT to be accepted, then the condition in Clause IB in the notification which imposes condition about the mode of manufacturing and capacity of the manufacturer will become redundant. To avail concession rate of duty, it should be purchased directly from the manufacturer who had satisfied the conditions mentioned in the notification. In case of High Sea Sales (HSS), it is not the manufacturer who sell the goods contrarily, it is the Middleman or a Trader for commission who sell the goods. Likewise, clearance of goods by the Examiner of Customs Department will not be a ground to set aside the order of withdrawal of duty concession on the ground of mis-declaration if evasion is found subsequently. The end use of the cement imported is one of the condition for granting concession rate of duty as per Clause IC. In fact the importer has to file a end use declaration at the time of clearance and any violation of the declaration will come to knowledge of the Revenue obviously only after the misuse of the goods imported for a purpose other than for which it was allowed to be imported at concession rate. In this case, the records reveals that, by way of show cause notice, the department had sought for explanation about the Post- Importation actual user confirmation. The importer has admitted that the cement imported was used for manufacturing Ash brick and sold in the local market. Therefore, it is evident that the cement was not used for institutional/industrial purposes. Conclusion - The CESTAT erred in allowing the benefit of concessional rate of counter veiling Duty (CVD) to the respondent M/s V.V.Minerals despite gross violation of the concession condition. The Order in Original is upheld - appeal allowed.

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• 2025 (2) TMI 967
  Absolute confiscation of the seized gold - Seeking issuance of an appropriate writ to amend or review the impugned Compounding Order - HELD THAT:- In view of the fact that the delay was only due to financial difficulties and also considering the value of the gold seized i.e., about 1688.22 grams and 1664.18 grams, the Petitioner is permitted to deposit the amount in terms of the order dated 08th May, 2023. Petition disposed off.

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• 2025 (2) TMI 966
  Levy of penalty under Section 117 of the Customs Act, 1962 - no evidence of forgery by the appellant - vicarious liability of the appellant - HELD THAT:- The finding of the tribunal sustaining the penalty cannot be sustained. By Annexure-C order, the appeal preferred by the employees against the imposition of penalty on the ground of forgery stands allowed and the order of imposition of penalty has been set aside. It is also brought to notice that by Annexure-D, the report filed by the Investigating Officer before the Judicial First Class Magistrate Court-I, Kochi, in Crime No. 1635/2018 of Harbour Police Station, the appellant has been exonerated from the crime. A perusal of the order impugned reveals that while the tribunal has found that there are no reasons to sustain the allegations in the show cause notice and thereby interfered with the order of cancellation of the license, it has not assigned any reason for nevertheless sustaining the penalty under Section 117 of the Customs Act. Moreover, when the employees against whom the allegations of forgery were made have been exonerated and the penalty imposed against them has been set aside, we find no reason to sustain the findings of the tribunal that penalise the appellant. The order of the tribunal sustaining the penalty under Section 117 of the Customs Act cannot be sustained - Appeal allowed.

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• 2025 (2) TMI 965
  Classification of imported goods - Aluminium Foil 50 MIC +- 10% - to be classified under CTH 7607 19 91 of Customs Tariff or not - whether the goods imported by the appellant under AAs are permitted for duty free import under Advance Authorization Scheme? - HELD THAT:- It is not disputed that the importer was issued Advance Authorizations for import of raw material viz. Aluminium Foil to Mic +/-10% for export of Alu/Alu Foil (PVC 60 MIC/OPA 25), the final goods have been exported by the appellant and the competent authority i.e. DGFT has also issued the EODCs in this regard. It has to be appreciated that the DGFT functioning under the aegis of the Ministry of Commerce and Industry is responsible for formulating and implementing the Foreign Trade Policy for promoting India s exports. The Advance Authorization Scheme is one such scheme under which the appellant has imported the raw material subsequent by exported the final products. The Hon ble Supreme Court in Titan Medical Systems Private Limited vs. Collector of Customs, New Delhi [ 2002 (11) TMI 108 - SUPREME COURT] held that As regards the contention that the appellants were not entitled to the benefit of the exemption notification as they had misrepresented to the licensing authority, it was fairly admitted that there was no requirement for issuance of a licence that an applicant set out the quantity or value of the indigenous components which would be used in the manufacture. Undoubtedly, while applying for a licence, the appellants set out the components they would use and their value. However, the value was only an estimate. In the instant case also, the licensing authority viz. DGFT has accepted the fulfilment of export obligation and issued 7 Export Obligation Discharge Certificates to the appellant. The 8th was pending at the time of hearing. These EODCs discharge the appellants from any further export obligation. That being the position, the Customs authorities cannot deny the benefit of Customs duty exemption under the notifications governing the Advance Licensing Scheme. The customs authorities, if had been of the opinion that the appellant had violated any of the terms and conditions of the licences, the matter should have been referred to the licensing authority for appropriate action rather than demanding duty in the inputs/raw materials. Conclusion - The appellant correctly availed the benefits under Notification No. 18/2015-Cus, and the customs authorities could not demand duty based on a reclassification of the imported goods. Appeal allowed.

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• Corporate Laws

• 2025 (2) TMI 964
  Violation of Section 197 (3), 197 (9) of Companies Act and Rule 7 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 - effect of amendment to Section 197 (15) of the Companies Act, 2013, which substituted the expression punishable with fine with penalty, - retrospective effect to offenses allegedly committed before the amendment came into force or not - HELD THAT:- The provisions contained in Section 197 (15) was amended vide Companies (Amendment) Act, 2019 by Central Act No. 22/2019. A bare perusal of the amendment Act is sufficient to come to the conclusion that Section 197 (15) has been substituted by the amended provisions. In this context, in the absence of anything to the contrary in the amendment the substitution of Section 197 (15) vide amendment w.e.f. 02.11.2018 would relate back to the date of original provision of the year 2013 and in the light of the undisputed fact that the alleged offences are said to have been committed in the year 2016, it is opined that the amended provision of Section 197 (15) would not apply even in relation to the offences said to have been committed in the year 2016. Under these circumstances, having regard to the amendment to Section 197 (15) vide amended Act, 2019, Central Act No. 22/2019 w.e.f 02.11.2018, the impugned proceedings as against the petitioner clearly are not maintainable and same deserves to be quashed. Conclusion - The amendment to Section 197 (15) of the Companies Act, 2013, applies retrospectively, thereby affecting the maintainability of proceedings initiated under the pre-amendment provisions. The complaint and order of cognizance against the petitioner on the file of the Special Court for Economic Offences, Bengaluru are hereby quashed - Petition allowed.

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• Insolvency & Bankruptcy

• 2025 (2) TMI 963
  Approval of Resolution Plan - viability and feasibility of the plan - principle argument of the Promoter is that the plan is not implementable within 9 months and neither it is viable and feasible - HELD THAT:- Plan is not implementable within 9 months is not an issue which can be decided at the time of approval of the plan. The question that the plan cannot be implemented within 9 months is the question which can be raised after expiry of the period as contemplated in the plan. In so far as viability and feasibility, it is the commercial wisdom of the CoC to take a decision on viability and feasibility of the plan. The CoC having approved the plan with 100% voting, the CoC deemed to have adverted to the viability and feasibility of the Resolution Plan. The scope of interference in an order approving Resolution Plan is too limited for the Adjudicating Authority and this Appellate Tribunal which is well settled proposition - there are no good ground to interfere in the order approving the Resolution Plan at the instance of the Promoter. Appellant who is one of the homebuyers has to go with the majority decision of the homebuyers and cannot be allowed to question the approval of the plan which is law settled by the Hon ble Supreme Court in Jaypee Kensington Boulevard Apartments Welfare Association and Ors. Vs. NBCC (India) Limited Ors., [ 2021 (3) TMI 1143 - SUPREME COURT] . The Supreme Court having already held that single homebuyer cannot be allowed to question the approval of the Resolution Plan. He has to sail or sink with the majority decision and in the present case, plan has approved with 100% voting share. Thus on behalf of one lone homebuyer challenge to the Resolution Plan cannot be maintained. Conclusion - The individual homebuyers cannot challenge the approval of a Resolution Plan when the CoC has endorsed it with a majority vote. Appeal dismissed.

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• 2025 (2) TMI 962
  Condonation of 18 days delay in filing of the Appeal - Sufficient cause for delay or not. Whether, when the condonable period of 15 days, as prescribed under Section 61(2) of the proviso, is falling on a day, on which the Appellate Tribunal is closed, whether the condonable period shall stand extended upto the date when Court re-opens? - HELD THAT:- This Tribunal referring to the judgment of the Hon ble Supreme Court in Assam Urban Water Supply and Sewerage Board vs. Subhash Projects and Marketing Ltd. [ 2012 (1) TMI 412 - SUPREME COURT ] clearly held that the period of one month under which the delay in filing the application should be condoned is not the period of limitation. It is held that 15 days condonable period, even if it is coming to an end on a day, when the Tribunal is closed, the benefit of Rule 3 or Section 4 of the Limitation Act cannot be extended. Whether for computing the 30 days period for filing the Appeal under Section 61, the limitation of 30 days period expiring on a day on which Tribunal is closed for, the period shall be excluded upto the period on which Tribunal re-opens, for computation of 30 days period for filing of the Appeal? - HELD THAT:- Rule 3 of the NCLAT Rules specifically provides that in computing the time, the day from which the said period is to be reckoned shall be excluded, and if the last day expires on a day when the office of the Appellate Tribunal is closed, that day and any succeeding day on which the Appellate Tribunal remains closed shall also be excluded. On reading Rule 3 of the NCLAT Rules, it clearly provides that when the last date expires on a day when the office of the Appellate Tribunal is closed, that day and any succeeding day on which the Appellate Tribunal remains closed shall also be excluded. In the facts of the present case, the order was passed on 31.07.2024 and by giving benefit of two days for certified copy, 30th day when limitation was expiring shall be 01.09.2024. 31st August, 2024 and 1st September, 2024 being Saturday and Sunday, the Appeal could have been filed on 02.09.2024, which was the day when the Appellate Tribunal was to re-open. Rule 3 of the NCLAT rules, which provides for exclusion of the period, which falls on day when the office of the Appellate Tribunal is closed. Hence, exclusion of the period is specifically provided in the Rules. The judgment of the Delhi High Court, which had only considered Section 4 of the Limitation Act had no occasion to consider the rule 3 of the NCLAT Rules, 2016. Hence, by virtue of Rule 3 the said judgment of the High Court cannot be held to be applicable in the facts of the present case - by virtue of Rule 3 of the NCLAT Rules, 2015, when last date for period of computation of limitation is falling on a day when office of the Tribunal is closed, the said period shall be excluded. Thus, in the present case, 30.08.2024, which was the 30th day for filing the Appeal and by giving two days for certified copy, 30th day will be 01.09.2024 and 31st August 2024 and 1st September, 2024 being Saturday and Sunday both the days have to be excluded for computing the period of 30 days of limitation. Hence, the last day for filing of the Appeal shall be 01.09.2024. For computing 30 days period for filing the Appeal under Section 61, if the office of the Tribunal is closed on the 30th day, the period shall extend upto the date on which the Tribunal re-opens. Whether the delay is within condonable period and sufficient cause has been made out to condone the delay? - HELD THAT:- The 30 days period when expiring on a day when the Court is closed, the said period also be excluded while computing the period of limitation. Reasons have been given by the Appellant in the application for explaining the delay of 15 days in filing the Appeal. The Appellant is an organization, which require approval at the organization level for filing an Appeal, which grounds have been pleaded in the application - there is sufficient ground given in the application, explaining the delay in filing the Appeal. The delay condonation application filed within condonable period and there being sufficient cause being shown for condonation of the delay, the delay condonation application deserves to be allowed and the Applicant has made out sufficient cause for condonation of the delay. The delay in filing the Appeal is accordingly condoned. Whether the delay in filing is within condonable period and sufficient cause has been made out to condone the delay? - HELD THAT:- Impugned order was passed on 31.07.2024 and the Appeal was e-filed on 17.09.2024. There is no material on record to indicate that certified copy was applied by the Appellant. The Appellant is, thus, not entitled for any exclusion on the ground of certified copy, which exclusion was available for the Applicant in Company Appeal (AT) (Ins.) No.1862 of 2024. The 30 days period shall come to an end on 30.08.2024, the Appeal filed on 17.09.2024 was beyond condonable period. 30th August, 2024 was not a holiday, the Appeal having been filed on 17.09.2024, i.e. beyond 15 days condonable period, IA No.6950 of 2024 deserves to be rejected. In result IA No.6950 of 2024 is dismissed. Conclusion - The 15-day condonable period under Section 61(2) of the IBC cannot be extended by Rule 3 of the NCLAT Rules or Section 4 of the Limitation Act if it ends on a day when the Tribunal is closed. The application for condonation of delay is allowed.

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• 2025 (2) TMI 961
  Maintainability of Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) - no interest had ever been paid by the CD to the OC nor the interest component was ever recorded in the books of accounts - HELD THAT:- There is no dispute to the fact that out of total amount of Rs. 6,13,48,161.98/- Rs. 4,97,22,461.16 was towards the principal amount and Rs. 1,16,25,700.82/- was the interest. It is also not in dispute that Respondent No. 2 has claimed the interest only on the basis of invoice in which it has been mentioned that in case of delay payment, interest will be charged @ 12% or as per the agreed terms whereas no other document has been placed on record, much less, any purchase order or the agreement between the parties which can reflect the terms and conditions of the interest - The ledger account of the CD also reflects that principal amount claimed by the OC has been shown as nil which means that the principal amount has already been paid and has been accepted as such by the OC as the principal amount has been received without any murmur, therefore, the Tribunal is not correct to hold that the amount paid by the CD to the OC of Rs. 4,97,22,461.16 was adjusted towards interest at the first instance by making reference to the decisions in the case of Asset Reconstruction Company India Limited [ 2022 (8) TMI 70 - SUPREME COURT] and BHEL [ 2012 (10) TMI 1016 - SUPREME COURT] . Whether the amount of Rs. 1,16,25,700.82/- can be claimed even as an interest by the OC only on the basis of the boilerplate provision in the invoice in the absence of any agreement between the parties towards for the payment of interest or anything which may reflect it by way of email or purchase order etc.? - HELD THAT:- In the case of Prashat Agarwal (Supra) it was a condition in the invoice that interest will be charged @ 18% plus GST P.A after due date of the bill and the dispute was regarding the maintainability of the application filed under Section 9 in which the amount in question was less than Rs. 1 Cr. which is the minimum threshold prescribed under Section 4. In the present case, condition prescribed in the invoice is that in case of delay in payment, interest will be charged at the rate of 12 @ as per the agreed terms. This clause in the invoice is totally vague because it does not specify the period within which the amount was to be paid unlike the case of Prashat Agarwal [ 2022 (7) TMI 835 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH] in which it was prescribed that interest will be charged after due date of bill. Secondly, it is mentioned in this clause that interest will be charged as per the agreed terms whereas no agreed terms have seen the light of the day to enable the OC to claim interest as a part of debt. In this regard, the observation has been made, in the case of Comet Performance [ 2025 (1) TMI 793 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI - LB] by a three members bench of this Court, relying upon Rishabh Infra Through Hari Mohan Gupta Vs. Sadbhav Engineering Ltd., [ 2024 (11) TMI 1411 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] in which it has been held that invoices with interest clauses which were not part of the formal agreement are unenforceable . Conclusion - i) Interest claims based solely on invoice provisions without a formal agreement or acknowledgment are not enforceable under the IBC. ii) The IBC is intended for the resolution of debts, not for the recovery of interest claims that lack a contractual basis. The impugned order is set aside - the present appeal is allowed.

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• 2025 (2) TMI 960
  Condonation of delay of 19 days in filing the present appeal - sufficient cause for delay or not - HELD THAT:- As per Section 61 of the Code the period prescribed for filing the appeal before the Appellate Tribunal is 30 days. However, in terms of the proviso to Section 61(2) the Appellate Authority has the jurisdiction to allow the appeal to be filed even after the expiry of prescribed period of 30 days if it is satisfied that there was sufficient reason for not filing the appeal within prescribed period but such period cannot be extended more than 15 days. As per the decision of the Hon ble Supreme Court in the case of National Spot Exchange Limited Vs. Anil Kohli [ 2021 (9) TMI 1156 - SUPREME COURT ], the Appellate Authority does not have the jurisdiction to condone the delay beyond the period of 15 days in any case. In the present case, the impugned order was passed on 14.06.2024. The Appeal was required to be filed by the appellant within the prescribed period of 30 days which has to be computed from 15.06.2024 in terms of the Section 12(1) of the Limitation Act, 1963. The period of 30 days counted from 15.06.2024 expired on 14.07.2024 - The period of 15 days provided in the proviso to Section 61(2) counted from 14.07.2024 expired on 29.07.2024. The appeal has been e-filed on 02.08.2024 i.e after the period of 4 days of expiry even of the period of 15 days on 29.07.2024. Counsel for the Appellant has submitted that the Court should exclude the period of two days spent by the Appellant in obtaining certified copy of the impugned order which was applied on 01.07.2024 and was received on 02.07.2024 - Even if the aforesaid period of two days are excluded in view of Section 12 of the Act, the appeal would still be barred by two days. Similarly, the holidays on 17.06.2024, 29.06.2024 and 13.07.2024 which fell before 14.07.2024 (during the prescribed period) is no help to the Appellant because it is not the case where the Appellant has filed the appeal just on the reopening of the Court when the prescribed period of limitation was to expire rather the appellant has filed the appeal after the expiry of 45 days i.e. 15 days prescribed as the extended period in proviso to Section 61(2) for which the Appellant has to show sufficient cause for condonation of delay and is not part of the prescribed period of limitation. Conclusion - There is hardly any merit in the present application which calls for any interference as the appeal has been clearly filed after the expiry of period of 45 days and therefore, this Court does not have the jurisdiction to condone the delay. Application dismissed.

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• PMLA

• 2025 (2) TMI 959
  Seeking release of petitioner - illegality in the arrest of the petitioner or not - whether petitioner was not produced before the learned Special Court within 24 hours of his arrest as mandated in law? - HELD THAT:- There are no ground to interfere with the impugned order passed by the High Court. However, it is made clear that the impugned judgment will not stand in the way of the petitioner raising all the contentions while seeking an appropriate remedy in the manner known to law. The regular bail application of the petitioner is pending before the High Court. The petitioner is at liberty to proceed with the bail application, notwithstanding the impugned order passed. The High Court is requested to expedite the hearing in the pending bail application. SLP dismissed.

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• 2025 (2) TMI 958
  Seeking grant of Regular bail - Money Laundering - extortion of a huge amount of cash - Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 - HELD THAT:- It is pertinent to mention here that the applicant has nowhere stated in the bail petition regarding source of amount i.e. Rs. 6,44,38,000/- cash seized by the Income Tax, gold jewellery worth Rs. 3,24,61,655/- as also Rs. 52,35,000/- which was recovered from applicant s and his wife locker which clearly shows that the ACB/EOW has collected certain material against the applicant. The prosecution has collected the material against the applicant that he has purchased properties in the name of his family members and relatives but not disclosed the source from where it has been purchased. Thus, from perusal of FIR and the material available in the case diary, involvement of the applicant in commission of offence under Sections 7, 7A 12 of the PC Act, which is economic offence, is prima facie reflected. Hon ble the Supreme Court while considering the gravity of economic offence in case of P. Chidambaram Vs. Directorate of Enforcement, [ 2019 (9) TMI 286 - SUPREME COURT ] has held that Grant of anticipatory bail at the stage of investigation may frustrate the investigating agency in interrogating the accused and in collecting the useful information and also the materials which might have been concealed. Success in such interrogation would elude if the accused knows that he is protected by the order of the court. Grant of anticipatory bail, particularly in economic offences would definitely hamper the effective investigation. Having regard to the materials said to have been collected by the respondent-Enforcement Directorate and considering the stage of the investigation, we are of the view that it is not a fit case to grant anticipatory bail. Considering the FIR and other material placed on record, it prima facie shows involvement of the applicant in crime in question. As such, this is not a fit case where the applicant should be granted regular bail. Conclusion - i) The economic offences, due to their deliberate nature and impact on national interests, require careful consideration in bail applications. ii) This is not a fit case where the applicant should be granted regular bail. The instant bail application filed under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 is liable to be and is hereby rejected.

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• Service Tax

• 2025 (2) TMI 957
  Denial of claim of exemption by Notification No. 24/04-ST dated 10.9.04 - Voluntary training and coaching services - it was held by High Court that the training provided by the assessee in this case amounted to vocational training within the meaning of the term under Notification No. 9/2003-S.T. - HELD THAT:- There are concurrent findings of fact recorded which do not call for interference as the said findings cannot be said to be either perverse or illegal. The findings are rendered in facts which are peculiar to the respondent. Appeal dismissed.

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• 2025 (2) TMI 956
  Levy of service tax or VAT - deemed sale - activity of renting out cinematographic equipment by the appellant - transfer of right to use the equipment - HELD THAT:- Under Section 66 of the Finance Act, 1994, there shall be levied a tax at the rate of 12% of the value of the taxable services referred to in subclause (zzzzj) of clause (105) of Section 65 of the Finance Act, 1994. The taxable service means any service provided or to be provided to any person, by any other person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right of possession and effective control of such machinery, equipments and appliances. Therefore, where right of possession and effective control is transferred, then it will not be a taxable service. Consequently, if it is not a taxable service, then certainly service tax is not leviable under Section 66 of the Finance Act, 1994. There is not only a transfer of right of possession, but also effective control. The order-in-original has proceeded on an erroneous interpretation of the provisions of this agreement that possession and effective control has not been transferred to the hirer. This conclusion of the adjudicating authority not gareed upon. It is clear from the agreement that the equipments have been supplied for hire and possession and effective control has been transferred to the hirer. The possession and effective control has been transferred. If it is not so, why will the owner reserve a right to inspect the equipments as and when required. If the possession and effective control is still with the owner, he would not need the hirers permission to inspect. If effective possession and control has not been transferred, why the hirer has to make it known to the owner regarding loss or destruction or damage, after such loss or damage occurs - If possession and effective control is still with the owner or has not been transferred to the hirer, why would the hirer make a statement that he has taken inspection of the goods and he is satisfied with the condition thereof and the owner shall not be liable for any defects. Conclusion - There shall be a deemed sale where there is transfer of the right to use any goods for any purpose whether or not for a specified period, for cash, deferred payment or other valuable consideration. From the documents and particularly from the clauses reproduced above, it is quite clear that there has been a transfer of the right to use equipments for valuable consideration. Even in clause 29A of Article 366 of the Constitution of India, the only requirement is there should be transfer of the rights to use the goods for valuable consideration. Factually, there has been. The order-in-original cannot be sustained, as it was without jurisdiction. The same is quashed and set-aside - Appeal disposed off.

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• 2025 (2) TMI 955
  Recovery of service tax with penalties - order issued without examining the relevant charging section of the Finance Act, 1994, particularly Section 66B - violation of principles of natural justice - HELD THAT:- In the present case, the adjudicating authority has held that the petitioner contravened the provisions of the Act and the Rules made thereunder with an intent to evade payment of service tax. So far as the case of Amadeus India Pvt. Ltd. [ 2019 (5) TMI 669 - DELHI HIGH COURT] is concerned, in the said case, the Hon ble Delhi High Court was dealing with a case in which the SCN issued on 4th September, 2018 to the petitioner-company was challenged. The fact of the matter was that on 3rd October, 2018, the petitioner drew attention of respondent to the master circular dated 10th March, 2017 read with an instruction dated 21st December, 2015 issued by the CBEC in terms of which a pre-show-cause notice consultation was mandatory in cases involving demand of duty above Rs. 50 lakhs. A reminder was again sent by the petitioner on 13th November 2018. When no response was received, the writ petition was filed in the High Court of Delhi on 13th December, 2018. It appears that Hon ble Delhi High Court not only entertained the writ application but also rejected the contention of the respondent that since the SCN was preceded by a search that was conducted in the business premises of the petitioner and the petitioner also rendered itself liable for penal action for suppression of facts and contravention of various statutory provisions with intent to evade payment of due service tax and other incidental levies, the SCN partakes of the character of an offence related SCN and therefore falls within the exceptions carved out under para 5.0 of the master circular. In the case of Cosmic Dye Chemical [ 1994 (9) TMI 86 - SUPREME COURT] , the matter reached to the Hon ble Supreme Court only after final adjudication by the Tribunal failed. The Tribunal in the said case had taken a view that regardless of intent, a mere suppression of facts or misstatement in the information statutorily required to be supplied to the Excise authorities attract the larger period of limitation. Conclusion - All the issues which have been raised by learned counsel for the petitioner in the present writ application would essentially involve appreciation of facts emerging from the records which may be duly gone into by the appellate authority. It is not the case of the petitioner that he has no equally efficacious remedy, we would, therefore, refrain from exercising our extra-ordinary writ jurisdiction at this stage. Application disposed off.

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• 2025 (2) TMI 954
  Liability of sub-contrator to pay service tax, when main contractor has paid the service tax - Invocation of extended period of limitation - suppression of facts or not. Whether in case the main contractor has paid the service tax, the appellants are required to pay service tax on the services rendered by the appellants being sub-contractor, or not? - HELD THAT:- Admittedly, the appellant is a service provider and they are required to pay service tax on the services rendered by them as clarified by CBEC Circular No.96/7/2007-ST dated 23.08.2007, wherein it has been clarified that for the services rendered by the sub-contractor, the sub-contractor is required to pay service tax - the appellant is liable to pay service tax as demanded. Whether the extended period of limitation in the facts and circumstances is applicable or not? - HELD THAT:- Admittedly, without investigation, it could have been revealed that whether the appellants are providing man power services to the main contractor or not nor after investigation, it came to the notice to the Department that the appellant is providing man power services and entitled in not to pay service tax. It is a fact on record that the appellants did not take service tax registration also. In that circumstances, unless and until, there is a bonafide act on the part of the appellants, the extended period of limitation has rightly invoked. Conclusion - The appellants are liable to pay service tax as demanded and that the extended period of limitation was rightly invoked. There are no merit in the appeals filed by the appellants - appeal dismissed.

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• 2025 (2) TMI 953
  Exemption from service tax - advisory services provided by the appellant to JCB UK - export of service under Rule 6A of the Service Tax Rules, 1994 or not - place of provision of service - HELD THAT:- In the instant case, it is not disputed that JCB (UK) is a company incorporated under the laws of United Kingdom and is located in United Kingdom. Therefore, the UK office of JCB would qualify as its business establishment where decisions pertaining to the company are taken. Consequently, the services rendered by the Appellant would be considered as received at the business establishment of JCB UK in terms of Rule 2(i)(b)(i) of the POPS Rules. Accordingly, the location of the recipient of service for purposes of Rule 3 would be United Kingdom, which is outside the taxable territory of India. The taxability of such transactions, where rendition of service resulting in business growth in India, stands decided in favour of the appellant by the Larger Bench of the Tribunal in the case of M/S. ARCELOR MITTAL STAINLESS (I) P. LTD (NOW KNOWN AS M/S. ARCELOR MITTAL DISTRIBUTION SOLUTIONS INDIA PRIVATE LIMITED) VERSUS COMMISSIONER SERVICE TAX MUMBAI-II [ 2023 (8) TMI 107 - CESTAT MUMBAI-LB ] wherein the Tribunal held It is, therefore, clear that the recipient of service is the person at whose desire the activity is done in exchange for a consideration, i.e., the person who is obliged to make payment for the service. The recipient of service would, therefore, be a person at whose instance and expense the service is provided, whether or not he is the beneficiary of the service. From the above, in the context of the present case, it is noted that the recipient of the service is JCB, UK who is also the person at whose desire the activity is done in exchange of monetary consideration. Conclusion - The services rendered by the appellant were exports, thus not subject to service tax. The impugned order is set aside - appeal allowed.

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• 2025 (2) TMI 952
  Taxable service - retained portion of the freight collected from the oil companies - It is common ground that the freight charged for such activity was either exempted from tax or excluded for taxability in the respective tax regimes before and after 1st July 2012 - HELD THAT:- The essence of business auxiliary service which is the intended target of tax, is the presence of a provider of service between a service/product belonging to one and required by another. The retained amount has been sought to be taxed by the fitment of carriage of cargo belonging to oil companies by vessel belonging to others as acting on behalf of oil companies, from contract, and causing receipt of service from vessel owners to oil companies. From a perusal of the impugned order, it would appear that the adjudicating authority has examined the contract, at least of a particular customer with the appellant herein and corresponding contract of appellant herein with owner of a vessel under on flag of Liberia. The appellant as well as the oil companies are located in the territory of India with consequential location of the provider of service , which, in this case, is the appellant would render the tax liability to arise within the taxable territory of India; this aspect was never in dispute. However, address commission is amount contractually withheld by the appellant and, while that may arithmetically be the difference between that received as charter charges and paid as charter charges , is also the amount payable by the vessel owner to the appellant as commission for recourse to those vessels. It would, therefore, amount to consideration paid by the overseas entity to the appellant and either recompense for provision of service which was not considered by the adjudicating authority or unaccounted payment. In the haste to fall back on Place of Provision of Service Rules, 2012 for fastening liability, this aspect appear to have been overlooked. Conclusion - In view of the inadequacy in the impugned order and such inadequacy precluding us from determining the tax liability to be legal and proper a fresh finding within the framework of the show cause notice and the contention of the noticee along with appreciation of legal authority for charging of tax under section 66 of Finance Act, 1994 and section 66B of Finance Act, 1994 in the respective periods is warranted. Matter remanded back to the original authority for a fresh decision.

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• 2025 (2) TMI 951
  Imposition of duty on plant and machinery imported from abroad - invocation of exended period of limitation - revenue neutrality - HELD THAT:- In the instant case the duty was paid of its own by the party in 2013 with interest. This conduct itself justifies that there was no intent to evade duty on the part of the appellant as has indicated by the learned advocate. Even on their discharge of the duty there were entitled to credit of the same and were allowed the department therefore they would have not benefitted in avoiding the taxes. He also pointed out that the taxes paid in 2013 were given credit of by the department of its own, as per law indicating that action resulting in S.C.N. was not an enforcement action. Revenue neutrality existed in the present case and delay in payment has been compensated by paying interest. The extended period has been incorrectly invoked in the facts and circumstances of the matter. Therefore, on limitation the matter does not stand. The party become entitled to relief on limitation both for extended period as also for penalty. This court is not committing on merit of the case. Appeal allowed.

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• Central Excise

• 2025 (2) TMI 950
  Maintainability of petition when efficacious statutory alternative remedy of appeal under section 35F of the Central Excise Act, 1944 is available to the petitioner - principles of natural justice - HELD THAT:- The Apex court in the case of Hindustan Coca Cola Beverage Private Limited Vs. Union of India and others, [ 2014 (9) TMI 585 - SUPREME COURT] has held that when a statute provides for statutory appeal, the said remedy is to be availed by the litigating parties. In the case of Hameed Kunju vs. Nazim, [ 2017 (7) TMI 1414 - SUPREME COURT] , the Apex Court has held that any petition under Article 227 of the Constitution of India should be dismissed in limine where there is statutory provision of appeal. The Apex court in the case of Ansal Housing and Construction Ltd. Vs. State of Uttar Pradesh and others, [ 2016 (3) TMI 1435 - SUPREME COURT] , has held that when statutory appeal is provided then the said remedy has to be availed. In the present case, it is evident that sufficient opportunity of hearing through virtual mode was provided to the petitioner on 4.7.2022, 15.7.2022 and 10.8.2022 but neither the petitioner nor his authorised representative attended the personal hearings on the above dates. Thus, the contention of the petitioner with regard to non-grant of opportunity of personal hearing is contrary to the record and is hereby rejected. Petition disposed off.

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• 2025 (2) TMI 949
  Recovery of CENVAT credit under the CENVAT Credit Rules, 2004 - appellant is a recipient of distributed credit from an Input Service Distributor (ISD) - rule 7 of CENVAT Credit Rules, 2004 - HELD THAT:- By a special provision, viz., rule 7 of CENVAT Credit Rules, 2004 distribution of credit of service tax paid on input services by input service distributor , neither a manufacturer of excisable goods nor a provider of output service, is permitted and, therefore, from not being in a position to utilize the credit so taken. From this, it is apparent that the mechanism provided in rule 7 of CENVAT Credit Rules, 2004, governing the distribution of such credit, deems the credit so distributed to be eligible credit for the purpose of utilization. A harmonious reading of rule 3 and rule 4 of CENVAT Credit Rules, 2004 and the conditions prescribed in rule 7 alone would determine the extent of validity of the credit so distributed within the scheme of CENVAT Credit Rules, 2004. The whole of it operates on presumption that the objective of the scheme, viz., restricting the tax liability at each stage in the chain only to the taxable event as set out in section 3 of Central Excise Act, 1944 and section 66/66B of Finance Act, 1994, will be adequately achieved by such distribution. The decision of the Tribunal, in re Clariant Chemicals India Ltd [ 2015 (10) TMI 2754 - CESTAT MUMBAI] , was rendered on the limited issue of applicability of rule 6 in relation to exempted services and owing to which, the Tribunal, finding absence of mechanism for recovery, fell back upon a singularity of the undertakings operated by that particular legal entity. The issue therein was not about the eligibility to take the credit under rule 3 of CENVAT Credit Rules, 2004 but the propriety of retention of the credit in terms of rule 6 of CENVAT Credit Rules, 2004. The impugned order has confirmed the recovery of credit taken, and distributed under rule 7 of CNEVAT Credit Rules, 2004, by the input service distributor (ISD) by subjecting it to scrutiny for eligibility thereof by reference to the activities undertaken by the appellant herein. The appellant herein has merely utilized the credit and, to the extent that rule 3(4) of CENVAT Credit Rules, 2004 has not been shown to have been breached, is not concerned with the source of the credit. The obligation under rule 3(1) of CENVAT Credit Rules, 2004 cannot be transferred to the recipient of credit under rule 7 of CENVAT Credit Rules, 2004. Conclusion - i) The responsibility for verifying the eligibility of CENVAT credit lies with the ISD, not the recipient of the distributed credit. ii) The recovery proceedings against the appellant were without legal authority. Appeal allowed.

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• 2025 (2) TMI 948
  Classification of Printed Thermal Paper ATM rolls - classifiable under CETH 49019900 or under CETH 48119099 of Central Excise Tariff Act, 1985 or not - HELD THAT:- The process of printing on the Thermal rolls brings into the existence of the product ATM Rolls. Where an article is printed with materials, the primary purpose of the printing is to convey the message contained in the article and so would be more appropriately classifiable under the heading 49.01. The CESTAT, Mumbai in the case of Alpha Carbonless Paper Manufacturing Co. Pvt. Ltd. vs. The Commissioner of Central Excise, Belapur [ 2014 (2) TMI 589 - CESTAT MUMBAI] had the occasion to examine a similar issue and classified ATM Rolls, Printed lottery ticket rolls and printed bus ticket rolls as products of the printing industry. The case also took into consideration the Amendment made to the Finance Act, 2012 by the insertion of note 14 under Chapter 48 and held that the same cannot have retrospective operation. In Sai Security Printers Ltd. Vs. Commissioner of C. Ex., Faridabad [ 2006 (2) TMI 23 - APPELLATE TRIBUNAL, NEW DELHI] the Tribunal held that the Thermal papers that were imported printed, cut and slit to size were products of the printing industry. In Kayen Print Process (P) Ltd. Vs Commissioner of C. Ex., Bangalore [ 2006 (7) TMI 87 - CESTAT, BANGALORE] , the Tribunal held that printing on paper sheet and paper board would come within the category of the printing industry. In the present case, in addition to the black bar code, details of transactions, the sheet also contains instructions on keeping the ATM premises clean, instructions on use of ATM cards safely etc. This further strengthens the point that the product is not merely of incidental use but it is of primary use. The thermal paper cut rolls, printing of paper with logos / marks of customers are not merely incidental but essential to primary use, i.e. providing information of bank statements and receipts. The pre-printed matter and the matter to be printed by ATM are inter connected and constituted a single matter. Further, the existence of blank portions in printed forms do not take them out of other printed products and articles . Conclusion - The printed thermal paper rolls were correctly classifiable under Chapter 49. Appeal allowed.

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• 2025 (2) TMI 947
  Interest on the refund deposited during investigation - rate of interest - relevant dates for calculation of interest - HELD THAT:- In view of the various decisions of the High Court and various Benches of the Tribunal, wherein, it has been consistently held that interest on refund of deposit made during investigation is required to be computed @ 12% per annum. It is found that the jurisdictional High Court of this Tribunal has already held that rate of interest applicable in such cases is 12% per annum as held in the cases of CCE, Panchkula Vs. Riba Textiles Limited [ 2022 (5) TMI 1531 - PUNJAB AND HARYANA HIGH COURT] Punjab and Haryana High Court and Sunrise Immigration Consultants Private Limited Vs. Union of India [ 2023 (6) TMI 411 - PUNJAB AND HARYANA HIGH COURT] . Reference also made to the decision of the Tribunal in the case of Indore Treasure Market City Pvt Ltd [ 2024 (5) TMI 367 - MADHYA PRADESH HIGH COURT] wherein the Tribunal after considering the various decisions of the Courts, has held that the assessee is entitled for interest on the amount of refund sanctioned @12% to be calculated from the date of payment till the date of disbursement. Also, in the case of Raghuveer Metal Industries Ltd [ 2023 (12) TMI 371 - CESTAT NEW DELHI] , the Tribunal has held that the appellant is entitled to receive interest at the rate of 12% from the date of deposit of the amount till the date of refund thereof. Conclusion - The appellant is entitled to the rate of interest @ 12 % per annum on the amount deposited during investigation. Appeal allowed.

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• 2025 (2) TMI 946
  Process amounting to manufacture or not - alteration of MRP on the imported goods - entitlement to claim CENVAT Credit on the duty paid at the time of importation of goods - Seizure and Confiscation of the Goods - Extended Period of Limitation - interest - penalty. Manufacture in terms of Section 2(f)(iii) of the Act - HELD THAT:- The process of affixing MRP by the appellant on the goods in question i.e. various electrical home appliances, which are covered under Third Schedule, there is no manner of doubt that the activity carried out by the appellant amounts to manufacture. Apart from that, in the statement recorded under Section 14 of the Act, Shri A.K Jindal, the General Manager of the company had categorically admitted that he understands that their products were covered under the Third Schedule of the Act and that the processes carried out by them in their company amounts to manufacture in terms of Section 2(f)(iii) and they were liable to pay excise duty which they actually paid. In view of their own admission accepting that the activity amounts to manufacture and is leviable to excise duty, the issue stands concluded against them and in favour of the Revenue. Eligibility to CENVAT Credit - HELD THAT:- Reliance placed on the decision of Delhi High Court in Global Ceramics Pvt. Ltd. versus Commissioner Central Excise, Nagpur [ 2019 (5) TMI 1432 - DELHI HIGH COURT] , where it has been held that the amendment to Rule 4(1) of CCR prescribing a time limit for claiming CENVAT Credit will not apply to the consignments, where the import took place prior to the date of the amendment and the deemed manufacture took place when the MRP was altered, which also happened prior to the amendment. The facts of the present case are quite identical with the facts of the case before the Delhi High Court and, therefore, there are merit in the submission of the learned Counsel that the appellant having paid appropriate duty at the time of import has to be considered as an input for the purpose of CENVAT Credit Rules. Here the Bill of Entries considered were for the period 2011 12 to 2015 16 and, therefore, on the analogy drawn by the Delhi High Court, the amendment w. e. f. 01.09.2014 prescribing the time limit for making the CENVAT Credit claim shall not apply to imports covered prior to the said date. Moreover, once the activity has been held to be manufacture, exigible to excise duty, the Credit on CVD paid by the appellant on the goods imported is available. Seizure and Confiscation of the Goods - HELD THAT:- The action of seizure of the goods lying in the premises is unjustified, more so when the daily stock status as on 5.10.2016 was made available by the appellant to the Central Excise Officers and the goods were duly recorded - It is also relevant to refer the decision of the Mumbai Bench in Nakoda Enterprises versus Commissioner Central Excise, Mumbai V [ 2016 (12) TMI 1679 - CESTAT MUMBAI] , where all the goods were covered under the SSI exemption, except few and therefore, they were under bonafide belief that since the unit is eligible for SSI exemption, they were not required to obtain any registration. It was held that just because the exemption notification is not applicable on one of the products, the goods lying within the factory should not be confiscated and it cannot be equated with the case of attempt to clear the goods clandestinely. Therefore, in the present case, the seizure and confiscation is unsustainable. Extended Period of Limitation - HELD THAT:- From the statements recorded under Section 14 during the course of investigation, it is apparent that the appellant was unaware of the fact that the activity of affixing MRP on the imported goods amounts to manufacture and the consequent duty liability. The appellant bonafide believed that they were into the trading activity and were, therefore, registered with the VAT Department and were paying the VAT regularly. Had they known that the activity amounts to manufacture under the excise law, they would have registered themselves with the Excise Department and availed the benefit of CENVAT Credit - There is no reason to doubt the statement made by Shri A. K. Jindal or by Shri Rajesh Mohan and on the other hand, Revenue has not produced any further evidence to show that non-registration and non-payment of excise duty was deliberate and wilful to evade payment of duty. In view of the fact that all the records/books of accounts were properly maintained and duly reflected in the balance sheet, it cannot be said that there was any misstatement or suppression of facts with intent to evade payment of duty. Therefore, the demand of excise duty is justified only qua the normal period i.e., 01.03.2015 to 05.10.2016. Interest and Penalty - HELD THAT:- As the activity has been held to manufacture and, therefore, leviable to excise duty, the appellant is liable to pay interest on the delayed payment of duty. The liability to interest is mandatory and automatic which the appellant cannot escape - The levy of penalty under Rule 25 read with Section 11 AC is not sustainable as we have already held that extended period of limitation is not invokable in the absence of any mis-statement or willful suppression of facts. The penalty under Section 11 AC is mandatory only when duty is confirmed by invoking the extended period of limitation. Personal penalty imposed on Director of the appellant company under Rule 26 of the Rules - HELD THAT:- The personal penalty imposed on Shri Rajesh Mohan under Rule 26 of the Rules is also not sustainable as the penalty under Rule 26 can be imposed for actions related to goods which were rendered liable for confiscation. In this case, the confiscation of goods is set aside. Hence, there is no reason to impose penalty when the goods itself were not to be confiscated. The second situation in which penalty under Rule 26 can be imposed is where invoices are issued without supplying goods so as to enable the recipient to avail ineligible CENVAT Credit, which is also not the case here. Conclusion - i) The activity of affixing MRP on the imported goods, which are covered under Third Schedule amounts to manufacture in terms of Section 2(f)(iii) of the Act and are exigible to excise duty along with interest. ii) Since the activity amounts to manufacture, the appellant is entitled to CENVAT Credit. iii) Seizure and confiscation of the goods is unsustainable. iv) Extended period of limitation is not invocable in the facts of the present case. v) Penalty under Rule 25 cannot be imposed on the appellant. Penalty under Rule 26 cannot be imposed on Director of the appellant company. Matter remanded to the Adjudicating Authority for limited purpose of computation of the duty liability along with interest and entitlement of CENVAT Credit - The appeals are, partly allowed in above terms, by way of remand.

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• 2025 (2) TMI 945
  Refund of utilization Cenvat Credit on account of clearance to 100% EOU without any payment of duty - rejection of refund on the ground that the same were filed after expiry of one year, i.e. time limit prescribed under Section 11B of Central Excise Act, 1944 - HELD THAT:- Reliance placed on the decision of M/s Kumaraswamy Mineral Exports vs CCE ST Belgaum [ 2019 (2) TMI 1378 - CESTAT BANGALORE] in which the decision of Hon ble Madras High Court in GTN Engineering Industries [ 2011 (8) TMI 960 - MADRAS HIGH COURT] was also considered and same was distinguished in view of specific relevant date having been given in the Notification itself which aspect, the Hon ble Bench considered was not taken into consideration by Hon ble Madras High Court. In view of the stated position and the case of GTN Engineering, having been distinguished the party becomes entitled to the refund on the basis of cited decisions of Tribunal. Same is therefore, allowed, as per law. Appeals are allowed.

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• 2025 (2) TMI 944
  Refund of accumulated CENVAT Credit - denial of refund on the ground that Rule 5 ibid deals with the situation of grant of refund in case of non-utilization of CENVAT Credit on the inputs, which were used for manufacture of the final products exported by the assessee - HELD THAT:- The issue arising out of the present dispute is no more res integra, in view of the order of this Bench of the Tribunal passed in the case of M/S. ATV PROJECTS INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, RAIGAD [ 2023 (9) TMI 802 - CESTAT MUMBAI] where it was held that In the case in hand, though the factory of the appellant was nonoperational for quite a long time, but it had continued to file the statutory returns before the authorities and finally surrendered the registration certificate. Immediately thereafter, since the accumulated cenvat balance lying in the books was claimed as refund, in my considered view, it cannot be said that such claim is barred by limitation of time. In other words, availment of cenvat credit is an indefeasible right of an assessee and such right conferred under the statue cannot be taken away on the ground of limitation. By placing the reliance on the order passed in the case of M/s ATV Projects India Ltd., co-ordinate Bench of the Tribunal in the case of M/s Kinol Lubes Pvt. Ltd. Vs. Commissioner of Central GST Central Excise, West Delhi [ 2024 (10) TMI 1254 - CESTAT NEW DELHI] , has allowed the refund benefit in respect of unutilized CENVAT Credit available in the books of account on closure of the manufacturing unit. Conclusion - The denial of the refund application based on the understanding of Rule 5 of the CENVAT Credit Rules was not justified, and the appellants were entitled to the refund of the accumulated CENVAT Credit balance despite the suspension of production activities. There are no merits in the impugned order, insofar as it has upheld confirmation of the adjudged demands on the appellant. Therefore, the impugned order is set aside and the appeal is allowed in favour of the appellants.

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• CST, VAT & Sales Tax

• 2025 (2) TMI 943
  Challenge to search and seizure proceedings conducted in the appellants Firm by the Taxation Authorities, in exercise of powers conferred under Sections 74 (3) and 74(4) of the Assam Value Added Tax Act, 2003 - main contention raised by the appellants before the Writ Court was that the respondent authorities had conducted the aforesaid search and seizure proceedings without following the due process of law - HELD THAT:- The learned Single Judge, while taking into consideration the provisions of the Code of Criminal Procedure, 1973 in Sections 46, 47, 51 and 100, has come to the conclusion that while conducting the search and seizure proceedings, the respondent authorities ought to have followed the procedure laid down under Sections 47 and 100 of the Code of Criminal Procedure, because detail procedure for search and seizure has not been provided in the Assam Value Added Tax Act, 2003. At the same time, the learned Single Judge has not interfered with the search and seizure proceedings effected way back on 03.09.2014, while observing that since much time had already elapsed after conducting the search and seizure proceedings, it may not be necessary to make any further observation except to hold that if any cause of action still survives, the appellants will be at liberty to approach the appropriate forum. It is to be noticed that while passing the impugned order on 05.11.2019, no one appeared on behalf of the appellants before the learned Single Judge. Since in the order dated 05.11.2019 passed in WP(C) No. 6363/2014 and WP(C) No. 6364/2014 and orders dated 25.01.2021 passed in I.A. (Civil) No. 956/2020 and I.A. (Civil) No. 1262/2020 the learned Single Judge has kept it open for the appellants to challenge the validity of the assessment order and the notice of demand issued during the pendency of the writ petitions, or after disposal of the writ petitions, no further order is required to be passed in these writ appeals. Appeal dismissed.

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• 2025 (2) TMI 942
  Valuation - Invocation of revisional jurisdiction of this court u/s. 8F of the Karnataka Entertainment Tax Act, 1958 - inclusion of service tax component in the amount received or receivable while levying entertainment tax, in terms of Sec. 4G of the Act Whether the service tax collected by the Petitioner from the subscribers under the provisions of the Finance Act, 1994 against the DTH broadcasting services shall from part of consideration for the levy of Entertainment Tax under Section 4G of the 1958 Act? - HELD THAT:- The entertainment tax is levied and collected on the amounts received or receivable by a Multi System Operator or Direct To Home service provider [DTH]. These amounts are nothing but the consideration which the customers would pay towards providing television signals under the DTH scheme. The transaction would obviously include both entertainment and service. Since both are discernible independent of each other, they are taxable separately; the entertainment is taxed under the provisions of 1958 Act whereas, the service is taxed under the provisions of Finance Act, 1994. The text, content intent of section 4G leaves no manner of doubt that for the purpose of levy of entertainment tax, the amount received or receivable cannot include service tax component. Had the legislature intended inclusion, the text of this provision would have been a bit different. Therefore, the first question of law is answered in the negative and in favour of the Assessee. The above view gains support from the decision of Apex Court in M/s Anand Swarup Mahesh Kumar vs. Commissioner Of Sales Tax [ 1980 (9) TMI 238 - SUPREME COURT ] wherein, Assessee therein had argued that the market fee payable under the UP Krishi Utpadan Mandi Adhiniyam, 1964 being a sum which could be collected from the purchaser under the provisions of the said statute by the commission agent for being remitted to the market committee, could not be considered as forming part of the consideration payable by the purchaser of the goods to the commission agent and therefore, it could not be included in the turnover of purchases for the purpose of levy of tax under section 3-D of the UP Sales Tax Act, 1948. Whether in the absence of definition of invoice in the 1958 Act, the bills/statement of accounts containing the itemized details/segregation of the basic value of DTH broadcasting services, service tax, license fee etc. will be considered as invoice ? - HELD THAT:- Abundant evidentiary material is produced even in the paper book of the petition. The Assessee had placed before the authorities the Statement of Account showing itemized billing and separate collection of service tax amount which aspect has been discussed by a Coordinate Bench of this Court in Assessee s earlier STRP No. 436/2017 disposed off on 10.12.2021 [ 2022 (1) TMI 443 - KARNATAKA HIGH COURT ]. True it is that the word invoice is not defined in the 1958 Act nor in the Mysore General Clauses Act, 1899. However, Black s law dictionary, 5th edition, gives the meaning of this word. A written account or itemized statement of merchandise shipped or sent to a purchaser, consignee, factor, etc., with the quantity, value or prices and charges annexed. Document showing details of a sale or purchase transaction The new International Webster s comprehensive dictionary, 2004 edition, defines invoice to mean a list sent to a purchaser, etc., containing the items and charges of merchandise. Both the authorities at their level and the Tribunal in its domain would have treated this aspect of the matter in a satisfactory way. This having not happened, it is required to upset the finding in this regard so that even this aspect of the matter would be considered afresh. Conclusion - i) The amount received or receivable for entertainment tax does not include the service tax component. ii) The absence of a statutory provision authorizing the passing on of tax to consumers affects the consideration for tax levy. The impugned order of the Tribunal is set at naught; matter is remitted to the domain of the Tribunal for consideration afresh in the light of the observations hereinabove made and in accordance with law - Petition allowed by way of remand.

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• Indian Laws

• 2025 (2) TMI 941
  Challenge to judgment of conviction and order on sentence passed against accused Nos. 1 and 2 - Acceptance of illegal gratification by the accused - Income Tax Officers - appreciation of acceptance of illegal gratification by the accused. Whether the findings of the Trial Court in respect of the demand and acceptance of illegal gratification by the accused is justified? - HELD THAT:- The evidence of P.W.8 who is the shadow witness to the incident would indicate that there was no demand of illegal gratification by accused No. 3. However, P.W.1 was handing over the amount of Rs. 2,50,000/- to accused No. 3, at that time, the accused No. 3 was apprehended by the respondent-CBI. On conjoint reading of the evidence of P.W.1, 2 and 8, it can be inferred that the prosecution has failed to establish the demand and acceptance of illegal gratification by accused Nos. 1 and 2. The Trial Court ought to have appreciated the evidence in such a manner before arriving at a conclusion that the accused are found guilty of offence punishable under Section 7 of the P.C. Act. Whether the Trial Court is justified in appreciating the electronic evidence? - HELD THAT:- Though P.W.8 supported the case of the prosecution in respect of the said mahazar, the evidence of PWs.1 and 8 would clearly indicate that both these witnesses have not seen the removal of the memory card from the said M.O.6. Further, it would indicate that they have not heard the conversations said to have been transferred to the Compact Discs (CD). In the absence of collecting the certificate as required under Section 65-B of the Indian Evidence Act to prove the electronic evidence in respect of the memory card, it is unsafe to rely on the evidence of the said electronic device. Though the prosecution has tried to impress the Court that the conversations that had taken place between the parties were transferred to CDs, which are identified as M.O.s 1, 7 and 9, as the primary evidence itself proved to be unacceptable, the remaining portions ought not to have been considered by the Trial Court. However, the Trial Court grossly committed an error in considering the said evidence. Therefore, the findings of the Trial Court in respect of the electronic evidence, is opposed to the settled principle of law. Whether the findings of the Trial Court in recording the conviction is justified? - HELD THAT:- The lack of credible evidence of demand and acceptance, coupled with inadmissible electronic evidence, undermined the Trial Court s conviction. The conviction was unjustified and should be set aside. Conclusion - i) The demand and acceptance of illegal gratification were not proven beyond a reasonable doubt, as required under Section 7 of the P.C. Act. ii) The electronic evidence was inadmissible due to the lack of a Section 65-B certificate, and the Trial Court erred in considering it. iii) The conviction based on insufficient evidence and misappreciation of the law was unjustified. The judgment of conviction and order on sentence by the III Additional District and Sessions Judge and Special Judge, Dharwad is set aside - appeal allowed.

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