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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter March 18, 2025 Case Laws in this Newsletter: GST Income Tax Customs Service Tax Central Excise CST, VAT & Sales Tax Indian Laws TMI Short Notes 1. Capital Gains: Exemption against Residential Property Sales and Reinvestment Incentives in Clause 82 of the Income Tax Bill, 2025 vs. Section 54 of the Income Tax Act, 1961 Bill: Summary: Clause 82 of the Income Tax Bill, 2025, outlines provisions for deferring or exempting capital gains tax from the sale of residential properties when proceeds are reinvested in new residential properties. It aims to stimulate the real estate sector and provide tax relief to individuals and Hindu Undivided Families (HUFs). Key features include a structured approach for managing unutilized gains, flexibility in reinvestment options, and caps on tax benefits to target middle-income taxpayers. Compared to Section 54 of the Income Tax Act, 1961, Clause 82 offers enhanced clarity and modernized provisions, reflecting evolving economic policies. 2. Capital Gains Taxation: The Role of Advance Payments in Clause 81 of the Income Tax Bill, 2025 vs. Section 51 of the Income-tax Act, 1961 Bill: Summary: The Income Tax Bill, 2025, introduces Clause 81, refining the treatment of advance payments in capital gains taxation. It mandates that advance money retained during asset transfer negotiations must be deducted from the acquisition cost unless already included in total income, thus preventing double deductions. This aligns with Section 51 of the Income-tax Act, 1961, which also addresses advance money deductions. Differences include Clause 81's reference to section 92(2)(h) and streamlined language. Both provisions aim to prevent tax avoidance and ensure fair capital gains computation, necessitating careful interpretation to avoid disputes. 3. Valuation - transfer of capital assets when the actual consideration is not ascertainable: Clause 80 of the Income Tax Bill, 2025 vs. Section 50D of the Income-tax Act, 1961 Bill: Summary: Clause 80 of the Income Tax Bill, 2025, and Section 50D of the Income-tax Act, 1961, address the valuation of capital assets when actual consideration is unascertainable. Both provisions mandate using the fair market value (FMV) as the full value of consideration for tax purposes, ensuring capital gains reflect true economic value and preventing tax evasion. While both aim for consistency in tax assessments, practical challenges in determining FMV, especially for unique assets, may lead to disputes. Clause 80 updates the framework to reflect current economic conditions, aligning with international best practices. 4. Full value of consideration for transfer of share other than quoted share for computation of Capital Gain - Clause 79 of the Income Tax Bill, 2025 vs Section 50CA of the Income-tax Act, 1961 Bill: Summary: Clause 79 of the Income Tax Bill, 2025, and Section 50CA of the Income-tax Act, 1961, both focus on ensuring that capital gains from the transfer of unquoted shares are calculated based on their fair market value, preventing tax evasion through undervaluation. Clause 79 mandates that if the transaction value is less than the fair market value, the latter is deemed the consideration for tax purposes, with exemptions for certain entities. Section 50CA mirrors these provisions, providing consistency and flexibility in tax legislation. Both aim to align taxable amounts with economic realities while accommodating genuine cases through exemptions. Articles 1. GST on Resident Welfare Associations By: K Balasubramanian Summary: The applicability of GST on Resident Welfare Associations (RWA) is contentious, particularly regarding maintenance charges exceeding INR 7,500 per month per member. The exemption notification specifies GST is applicable only on amounts exceeding this threshold. However, authorities and a CBIC Circular suggest GST applies to the entire amount once it exceeds INR 7,500. The Madras High Court ruled that only the excess amount attracts GST, but this decision is under appeal. Consequently, RWAs are divided in their GST payment approach, with some paying on the entire amount and others only on the excess. The issue remains unresolved, with potential for retrospective amendments. 2. Got paid in INR for your Exports? By: Pradeep Reddy Summary: An export business owner faced a challenge when a payment for a shipment arrived in Indian Rupees (INR) instead of US dollars, risking eligibility for export incentives. However, certain conditions allow export proceeds to be realized in INR while still qualifying for incentives. These include routing payments through specific non-resident bank accounts, using special banking arrangements, or exporting to countries like Iran, Nepal, and Bhutan under specific guidelines. To maintain compliance, it is crucial to ensure realization in foreign currency and utilize the outlined options to protect export benefits. 3. GST Update- Karnataka High Court Quashes Single SCN Issued for Multiple Years By: Pradeep Reddy Summary: The Karnataka High Court quashed a show cause notice issued under Section 73 of the CGST Act, 2017, which improperly consolidated multiple tax periods from 2017-18 to 2020-21 into a single notice. The petitioner argued that each tax year should be assessed individually according to the CGST Act's three-year limitation. The court agreed, citing legal precedents that require separate assessments for each tax year. Consequently, the consolidated notice was invalidated, but the respondent is permitted to issue individual notices for each tax period in compliance with the law. 4. Our bank account is attached by the GST officer. How do I manage my operations now By: Pradeep Reddy Summary: A bank account attachment by a GST officer can disrupt business operations. Provisional attachments are meant to protect revenue during audits or investigations and expire after one year unless renewed. Taxpayers can file objections and request releases using Form GST DRC-22. Issues arise due to procedural delays, lack of timely updates, and absence of prior hearings. Taxpayers often require court intervention to address these inefficiencies. To manage such situations, file objections, engage constructively, and monitor deadlines to ensure compliance with the one-year limit for attachments. Sharing experiences can help others navigate similar challenges. 5. Importance of ROC Filing for Private Limited Companies By: Ishita Ramani Summary: ROC Filing is crucial for private limited companies in India to ensure legal compliance, avoid penalties, and maintain a positive standing with regulatory authorities. Timely filing of annual returns and financial statements helps avoid fines and potential legal actions, thus preserving the company's credibility and reputation. Compliance facilitates smooth business operations, enhances the likelihood of securing loans and investments, and supports mergers and acquisitions. Key filings include Annual Returns (MGT-7), Financial Statements (AOC-4), and DIR-3 KYC for directors. Prioritizing ROC compliance is essential for legal stability, economic health, and fostering business growth. 6. HIGH COURTS DO NOT SUBSTITUTE THEMSELVES AS DECISION MAKING AUTHORITY WHILE EXERCISING JUDICAL REVIEW By: DR.MARIAPPAN GOVINDARAJAN Summary: The article discusses the Supreme Court's decision in a case involving the insolvency resolution process under the Insolvency and Bankruptcy Code, 2016. A financial creditor initiated a corporate insolvency resolution process against a corporate debtor and its guarantor. The High Court intervened, halting proceedings based on the claim that the guarantor's liability was waived. The Supreme Court ruled that High Courts should not interfere in insolvency proceedings before the Adjudicating Authority's decision, as the Resolution Professional's report is only recommendatory. The Supreme Court set aside the High Court's order, allowing the proceedings to continue. 7. Transfer Pricing and Special Valuation Branch – Two Separate Laws for a Common Goal By: YAGAY andSUN Summary: The article discusses the distinct yet interconnected roles of Transfer Pricing (TP) and the Special Valuation Branch (SVB) in regulating intercompany transactions involving related parties. TP ensures that transactions are priced at arm's length to prevent profit shifting and tax evasion, while SVB focuses on the accurate valuation of imported goods for customs duties. Both systems scrutinize related-party transactions to avoid manipulation of prices for tax or duty benefits. Companies must navigate compliance with both income tax and customs regulations, often facing challenges like documentation demands, potential double scrutiny, and the risk of double taxation. Understanding these complexities is crucial for multinational enterprises engaged in cross-border trade. 8. FSSAI and Reporting on Expired Food - FSSAI Advisory dtd. 16 Dec, 2024 By: YAGAY andSUN Summary: The Food Safety and Standards Authority of India (FSSAI) has mandated that food businesses, including manufacturers, importers, and retailers, submit quarterly reports on expired food products to enhance accountability and transparency. These reports must detail the quantity, nature, and traceability of expired items, ensuring they are not reintroduced into the market. The rule aims to prevent malpractices such as re-labelling and repackaging of expired goods, thereby protecting consumer health. Non-compliance could lead to penalties, including fines and revocation of food licenses. Businesses must maintain accurate records and submit data through the FoSCoS system once activated. 9. Do Industrial Climate Investments Pay Off? By: YAGAY andSUN Summary: Investing in industrial climate solutions can yield significant benefits, contingent on factors like investment type, industry, and economic conditions. Key advantages include cost savings through energy efficiency and waste reduction, regulatory compliance, enhanced brand value, access to green financing, innovation, and government incentives. Companies like Siemens and Unilever have successfully leveraged these investments for market leadership and brand loyalty. However, challenges include high initial costs, technological uncertainty, and market volatility. Success requires strategic planning that balances immediate costs with long-term gains, aligning with regulatory and market trends for sustainable practices. 10. Forest Produce in India: A Game Changer for Locals By: YAGAY andSUN Summary: India's rich forest produce, including timber and non-timber forest products (NTFPs) like honey, tendu leaves, and bamboo, significantly impacts local communities' livelihoods. These resources provide economic empowerment, especially for indigenous people, through sustainable harvesting, which ensures long-term resource availability. Forest produce promotes livelihood diversification, reduces agricultural dependency, and generates employment in value-added products like handicrafts and herbal goods. Women play a crucial role in this sector, gaining economic independence. Government and NGO initiatives support these communities, enhancing market access and sustainability. Challenges include resource over-exploitation, market access, policy implementation, and climate change impacts. 11. SWOT Analysis on the concept of making India a Green Superpower. By: YAGAY andSUN Summary: The SWOT analysis on making India a Green Superpower identifies significant strengths, including its vast renewable energy resources, strong government commitment, and a burgeoning green tech industry. However, challenges such as reliance on fossil fuels, implementation hurdles, and financial constraints persist. Opportunities exist in creating green jobs, leveraging international green finance, and technological innovation. Threats include climate change impacts, resistance to change, and inadequate policy coordination. To succeed, India must enhance sustainable infrastructure, ensure cohesive policies, and drive innovation. Successfully navigating these factors could position India as a leader in sustainable development, offering economic, environmental, and social benefits. 12. How Indian can make India a GREEN Super Power? By: YAGAY andSUN Summary: To transform into a Green Superpower, India must leverage its population and economic growth by adopting renewable energy, enhancing energy efficiency, and promoting sustainable transportation and agriculture. Key actions include expanding solar and wind energy, encouraging electric vehicle use, and implementing water conservation techniques. Reforestation, biodiversity conservation, and waste management are crucial, alongside enforcing environmental regulations and fostering green innovation. Public awareness and corporate responsibility are essential for cultural shifts toward sustainability. Green finance and private sector involvement can drive investment in eco-friendly projects. A comprehensive strategy involving all societal sectors is vital for reducing India's carbon footprint and leading global sustainability efforts. 13. Junk Food: Is It Really Food?[Ironically it is not Food] By: YAGAY andSUN Summary: Junk food, prevalent in today's fast-paced society, is often marketed as convenient and delicious, but it lacks the nutritional value of real food. These processed items, laden with artificial flavors, colors, preservatives, and unhealthy fats, fail to nourish the body and can lead to health issues like obesity and diabetes. The addictive nature of junk food, especially among children, fosters unhealthy eating habits and long-term health risks. Emphasizing home-cooked meals can provide essential nutrients and foster healthier eating habits. True food should nourish and sustain, serving as medicine for the body, mind, and soul. 14. Multi Coloured Fryums/Papad Containing Prohibited Dyes/Synthetic Food Colors being sold throughout Indian Markets. By: YAGAY andSUN Summary: Multi-colored fryums in Indian markets contain prohibited synthetic dyes, posing significant health risks, especially to children. These dyes, such as Sudan I-IV, are banned in many countries due to their carcinogenic and toxic effects. Despite regulations by the Food Safety and Standards Authority of India (FSSAI), these harmful dyes persist due to inadequate enforcement and awareness. Suggested actions include FSSAI conducting surprise inspections, raising awareness, imposing stringent penalties, enhancing product testing, and encouraging consumer vigilance. Ensuring food safety and regulatory compliance is crucial to protect public health, particularly for vulnerable populations like children. News 1. Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Uttar Pradesh Summary: The GST registration process in Uttar Pradesh now includes biometric-based Aadhaar authentication and document verification. Rule 8 of the CGST Rules, 2017, has been amended to facilitate this. Applicants will receive an email with a link for either OTP-based authentication or to book an appointment at a GST Suvidha Kendra (GSK) for biometric verification. From March 18, 2025, applicants can book appointments. They must carry specific documents, including Aadhaar and PAN cards, to the GSK. The process ensures that authentication and verification are completed within the permissible period, after which ARNs will be generated. 2. Delhi govt's revenue collections below projections, except for GST and VAT Summary: The Delhi government's revenue collections for the fiscal year are falling short of budget projections, with the exception of GST and VAT. As of February 2025, GST and VAT collections reached Rs 40,009 crore. However, motor vehicle taxes and excise revenue, at Rs 2,810 crore and Rs 5,516 crore respectively, are below expectations. The budget for 2024-25 projected total tax revenue of Rs 58,750 crore, including Rs 41,000 crore from GST and VAT. Motor vehicle taxes and excise revenue are 22% and 14% below projections, respectively, indicating sluggish performance in these areas. 3. Expenditure on salaries, pensions of employees to be highest in Himachal budget 2025-26 Summary: Expenditure on salaries and pensions will dominate the Himachal Pradesh budget for 2025-26, with Rs 25 out of every Rs 100 allocated to salaries and Rs 20 to pensions. Developmental works will receive Rs 24, while interest and debt repayments are set at Rs 12 and Rs 10, respectively. Grants to autonomous institutions will account for Rs 9. The total revenue expenditure is estimated at Rs 48,733.04 crore, with a fiscal deficit projected at Rs 10,337.97 crore. The state's own tax revenue is anticipated to be Rs 16,101.1 crore, including significant contributions from state GST and excise duty. 4. Visionless budget of directionless govt: Former Himachal CM Thakur Summary: Leader of Opposition criticized Himachal Pradesh's 2025-26 budget as lacking vision and direction, stating it offered little for the state. The budget, focused on tourism, rural development, and green energy, was Rs 58,514 crore, with a minimal increase from the previous year. Capital expenditure was notably low, and key health schemes were omitted. The opposition accused the government of financial mismanagement and neglecting issues like unemployment, women's and farmers' welfare, and law and order. They claimed the budget repackaged old schemes and failed to address the state's developmental needs. 5. MEA constituted 'gender budget cell': Govt to parliamentary panel Summary: The government informed a parliamentary panel about the establishment of a "gender budget cell" within the Ministry of External Affairs (MEA) to evaluate gender-related contributions of its projects. The Committee on External Affairs recommended creating a comprehensive monitoring framework for development projects. The report also noted the need for faster analysis of gender-related data and a concrete action plan for gender budgeting. The panel commended the MEA for increasing female representation in the Indian Foreign Service and other initiatives promoting gender equality. It also highlighted the need for improved budget forecasting and robust monitoring mechanisms for development projects. 6. Haryana budget proposes Rs 5,000 cr for Lado Lakshmi Yojana, authority to check drug abuse Summary: Haryana's 2025-26 budget, presented by the Chief Minister, allocates Rs 5,000 crore for the 'Lado Lakshmi Yojana' and establishes an authority to combat drug abuse. The budget, totaling Rs 2.05 lakh crore, introduces no new taxes and includes the creation of a "Department of Future" to enhance state capabilities. It proposes Rs 2,100 monthly assistance for women, a Rs 2,000 crore startup fund, and Rs 474 crore for an AI mission. Additional initiatives include support for farmers, new horticulture policies, and sports development programs, with a focus on international employment and addressing illegal migration routes. 7. Par panel for hike in MEA budget, says current allocation not reflective of India's growing stature Summary: A parliamentary panel has criticized the reduction in the Ministry of External Affairs' (MEA) budget for 2025-26, highlighting that the current allocation of Rs 20,516.61 crores is insufficient given India's expanding global role. The budget represents a 7.39% decrease from the previous year and an 18.83% decrease from revised estimates. The panel recommends a 20% increase to support India's foreign policy priorities and international stature. Key areas needing urgent attention include strengthening diplomatic cadre, enhancing embassy operations, and acquiring diplomatic real estate. The panel urges the government to prioritize these areas to bolster India's diplomatic infrastructure and influence. 8. Haryana CM Saini presents Rs 2.05 lakh cr budget with aim to make state 'future capable' Summary: Haryana's Chief Minister presented a Rs 2.05 lakh crore budget for 2025-26, aiming to make the state "future capable." The budget includes a 13.70% increase from the previous year and plans for a new "Department of Future." Initiatives include the Haryana AI Mission, supported by the World Bank, with hubs in Gurugram and Panchkula, and a Rs 2,000 crore 'fund of funds' for startups. A Rs 10 crore Substance Abuse Authority and Rs 5,000 crore for the 'Lado Lakshmi Yojana' are proposed. Additionally, a Horticulture Research Centre in Palwal and a flower market in Gurugram are planned. 9. CM Sukhu presents Rs 58,514-cr Budget with focus on tourism, rural development, green energy Summary: Chief Minister Sukhu presented a Rs 58,514 crore budget for 2025-26, emphasizing tourism, rural development, and green energy. Despite financial challenges due to reduced revenue deficit grants and halted GST compensation, the budget aims to promote eco-tourism, develop tea estates, and allocate 78 new eco-tourism sites. The debt liability has reached Rs 1,04,729 crore, with most loans used for previous debt repayments. Initiatives include increased pensions, higher milk support prices, and natural farming targets. A Special Task Force will address drug abuse, and 500 electric buses will be purchased. Various schemes for farmers, women, and children were also announced. 10. Himachal Budget: Milk prices increased by Rs 6/litre, eco-tourism in focus Summary: Himachal Pradesh's Chief Minister presented the 2025-26 budget, focusing on promoting religious and eco-tourism and exploring lesser-known destinations. The budget addresses financial challenges due to reduced revenue grants and halted GST compensation. A Rs 6 per litre increase in milk prices was announced, along with a target to involve one lakh farmers in natural farming. A Spice Park is planned in Hamirpur, and daily wages under the Mahatma Gandhi National Rural Employment Guarantee Act will rise by Rs 20. A Special Task Force will combat drug abuse, and 500 electric buses will be purchased. Separate directorates for schools and colleges will be established. 11. Rail budget no record breaking but failed budget; oppn slams Rail ministry in LS Summary: The opposition criticized the Railways ministry in the Lok Sabha, arguing that the budget for 2025-26 was not "record breaking" but rather a failure due to poor management. They highlighted the declining financial health of the Railways and accused the government of creating misleading narratives about development. Concerns were raised about the safety measures and the imposition of cancellation charges on tickets. Additionally, disparities in passenger services between high-end and ordinary trains were noted. Criticism also targeted the lack of budget increases for train facilities and the need for improved station amenities and train punctuality. 12. Delhi's budget to focus on raising living standards, improving basic infra: CM Gupta Summary: Delhi Chief Minister Rekha Gupta announced that the upcoming budget will prioritize raising living standards, enhancing basic infrastructure, and promoting development across all societal sections. Following discussions with BJP MLAs, the budget aims to address critical areas such as water supply, sewerage, and road improvements. Special attention will be given to underdeveloped areas, particularly slum clusters. The BJP, having recently regained power in Delhi, emphasizes a "Viksit Delhi" (developed Delhi) approach, incorporating public feedback gathered through various channels. Gupta assured that the budget would reflect the city's needs and aspirations, aiming for holistic development and prosperity. 13. 'Ru' symbol in TN budget to show our determination for language policy: Stalin Summary: The Tamil Nadu government replaced the Indian rupee symbol with the Tamil letter 'Ru' in the 2025-26 budget to emphasize its commitment to language policy, according to the Chief Minister. This move sparked controversy, particularly with the BJP, which objected to the change. The Chief Minister criticized the Union Finance Minister for focusing on this issue while ignoring Tamil Nadu's requests for funds. The ruling party accuses the central government of imposing Hindi through the National Education Policy, while the state remains committed to its two-language policy. The government aims to make Tamil Nadu a USD 1 trillion economy by 2030. 14. Delhi CM receives feedback from farmers ahead of budget session, assures them of all help Summary: Delhi's Chief Minister met with farmers to gather feedback before the upcoming budget session, promising to address their concerns. Farmers requested the implementation of a land pooling policy, subsidies on fertilizers and seeds, and measures to prevent crop inundation. They also sought permission to use diesel tractors for up to 20 years. The Chief Minister criticized previous administrations for neglecting farmers and pledged that the current government would resolve their issues. The meeting also covered topics like village pond beautification, rural electricity, and access to government schemes. The budget session is set to begin on March 25. 15. Delhi CM receives feedback from farmers ahead of budget session, assures assistance Summary: Delhi's Chief Minister engaged with farmers to gather feedback ahead of the upcoming budget session. Farmers highlighted issues such as the need for a land pooling policy, subsidies on fertilizers and seeds, and solutions for crop inundation from overflowing drains. They also requested an extension on the use of diesel tractors from 10 to 20 years. The Chief Minister assured that the BJP government would address these concerns, contrasting with previous administrations. The budget session is set to begin on March 25, where the government will present the Viksit Delhi budget for 2025-26. 16. T'gana CM acknowledges debt burden, says state borrowed Rs 4,000 cr RBI loan to pay salaries Summary: Telangana's Chief Minister has acknowledged the state's financial struggles, citing a debt burden that necessitated a Rs 4,000 crore loan from the Reserve Bank of India to pay government employee salaries. He appealed for employee cooperation regarding Dearness Allowance payments amidst the cash crunch. The CM criticized the previous administration for the state's financial woes, likening it to a severe ailment. With monthly revenues between Rs 18,000 crore and Rs 18,500 crore, the government allocates Rs 6,500 crore each for salaries and debt servicing, leaving limited funds for welfare schemes and development projects. The government manages these demands through staggered payments. 17. Net direct tax kitty rises 13 pc to Rs 21.26 lakh crore till Mar 16 Summary: Net direct tax collection in India increased by 13.13% to over Rs 21.26 lakh crore for the fiscal year up to March 16, 2025, driven by a significant rise in advance tax payments. Advance tax collections totaled Rs 10.44 lakh crore, a 14.62% increase from the previous year. Corporate advance tax rose by 12.54% to Rs 7.57 lakh crore, while non-corporate collections grew by 20.47% to Rs 2.87 lakh crore. Net non-corporate taxes increased by 17% to approximately Rs 11.01 lakh crore, and securities transaction tax collections surged by 56% to Rs 53,095 crore. Refunds issued amounted to over Rs 4.60 lakh crore. 18. Efforts to make ‘Viksit Bharat’ by 2047 Summary: The Ministry of Statistics and Programme Implementation (MoSPI) in India is implementing various initiatives to achieve 'Viksit Bharat' by 2047. These efforts focus on enhancing the National Statistical System to provide timely and quality economic data for informed decision-making. Key measures include conducting nationwide socio-economic surveys, utilizing digital platforms for data collection to reduce time lags, and releasing macroeconomic indicators like GDP and CPI promptly. The eSankhyiki portal was launched for efficient data management, and financial aid is provided to States/UTs to strengthen their statistical systems. This information was shared by a government official in the Rajya Sabha. 19. Government e Marketplace Surpasses ₹5 Lakh Crore GMV Before FY 2024-25 Year-End Summary: The Government e Marketplace (GeM) has surpassed 5 lakh crore in Gross Merchandise Value (GMV) ahead of the fiscal year 2024-25 end, marking rapid expansion in public procurement. Recent policy reforms have enhanced market accessibility, benefiting Micro and Small Enterprises (MSEs), startups, and women-led businesses. GeM has onboarded over 22 lakh sellers, including 29,000 startups and 1.8 lakh women-led enterprises. Technological advancements like cloud migration and AI-powered search have improved procurement efficiency. GeM's efforts have resulted in public savings of over 1,15,000 crore, reinforcing its role in India's economic progress and digital procurement. 20. Govt says 28,818 insolvency applications involving Rs 10 lakh cr resolved under IBC Summary: The government reported that out of 40,943 applications filed under the Insolvency and Bankruptcy Code (IBC), 28,818 involving Rs 10 lakh crore were resolved before admission. The IBC, introduced in 2016, improved India's global insolvency resolution rank significantly. As of December 31, 2024, 12,351 cases were pending under the IBC. The government is implementing measures like e-courts to expedite case resolution. The World Bank's new B-Ready project, replacing the Doing Business rankings, will assess India's business environment, with a report expected in September 2026. The IBC has been crucial in enhancing India's business climate. 21. CCI Organises 10th Edition of National Conference on Economics of Competition Law Summary: The Competition Commission of India (CCI) held its 10th National Conference on Economics of Competition Law in New Delhi, featuring a keynote address by a Minister of State who praised CCI's efforts in curbing the abusive conduct of dominant enterprises. The Minister emphasized the importance of fair competition, particularly for MSMEs, and advocated for a collaborative regulatory approach. CCI Chairperson highlighted the need for dynamic regulation in response to technological advancements like AI. The conference included discussions on digital markets and mergers, and concluded with a session on trust-based market correction. The event underscored competition law's role in fostering a fair economic environment. 22. India - New Zealand announce launch of FTA negotiations Summary: India and New Zealand have announced the commencement of negotiations for a comprehensive Free Trade Agreement (FTA) to strengthen their economic and trade ties. The decision was made during a bilateral meeting involving the Prime Ministers of both countries, alongside their respective Ministers for Commerce and Trade. This initiative aims to enhance supply chain integration and improve market access, reflecting a shared commitment to deepening economic cooperation and fostering mutual prosperity. The negotiations are expected to build on the longstanding partnership between the two nations, which is based on shared democratic values and strong economic complementarities. 23. Ram Temple Trust pays Rs 400 crore in taxes over past five years Summary: The Shri Ram Janmabhoomi Teerth Kshetra Trust has paid approximately Rs 400 crore in taxes over five years, driven by a rise in religious tourism, according to the Trust Secretary. From February 2020 to February 2025, Rs 270 crore was paid as GST, with the rest under other tax categories. Ayodhya has seen a tenfold increase in visitors, becoming a significant religious tourism hub and creating local employment. Last year, 16 crore people visited Ayodhya, with 5 crore visiting the Ram temple. The trust's finances are audited by the Comptroller and Auditor General. 24. PM hails RBI for being selected for Digital Transformation Award Summary: The Prime Minister praised the Reserve Bank of India (RBI) for receiving the Digital Transformation Award 2025 from Central Banking, London. The award acknowledges RBI's innovative initiatives, including the Pravaah and Sarthi systems, developed by its in-house team. These initiatives have significantly reduced paper-based submissions, transforming both internal and external processes. The Prime Minister emphasized that such digital innovations enhance India's financial ecosystem and empower many lives, highlighting the importance of innovation and efficiency in governance. Circulars / Instructions / Orders Income Tax 1. 04/2025 - dated 17-3-2025 Frequently Asked Questions (FAQs) on Guidelines for Compounding of Offences under the Income-Tax Act, 1961 dated 17.10.2024 Summary: The Central Board of Direct Taxes (CBDT) issued revised guidelines for the compounding of offences under the Income-Tax Act, 1961, effective from October 17, 2024. These guidelines simplify previous rules by eliminating offence categorization, removing application limits, and allowing fresh applications upon defect correction. All offences are now compoundable without time limits for application filing. Applications can be filed with jurisdictional authorities, and fees are adjustable against compounding charges. Compounding is possible even post-prosecution initiation, with charges based on application sequence. Co-accused can apply separately or jointly, and guidelines accommodate cases involving insolvency proceedings. GST - States 2. TRADE CIRCULAR No. 05/2025 - dated 13-3-2025 Clarifying the issues regarding implementation of provisions of sub-section (5) and sub-section (6) in section 16 of WBGST Act, 2017 Summary: The circular addresses the implementation of sub-sections (5) and (6) of section 16 of the West Bengal Goods and Services Tax (WBGST) Act, 2017, which retrospectively extend the time limit for availing input tax credit in specific cases. It clarifies procedures for taxpayers and authorities when dealing with demands related to incorrect input tax credit claims under sub-section (4). The circular outlines actions for various scenarios, including cases without demand notices, those with issued orders, and those under appeal. It also specifies procedures for rectifying orders and highlights that no refunds will be granted for tax paid or credit reversed due to contravention of sub-section (4), except in specific appeal situations. 3. TRADE CIRCULAR No. 06/2025 - dated 13-3-2025 Clarification of various doubts related to Section 128A of the WBGST Act, 2017 Summary: The West Bengal Directorate of Commercial Taxes issued a circular clarifying Section 128A of the WBGST Act, 2017, which allows for the waiver of interest or penalties related to demands under Section 73 for the fiscal years 2017-18, 2018-19, and 2019-20. The circular outlines the procedures and conditions for taxpayers to avail themselves of this waiver, including the filing of applications in specific forms, payment requirements, and the processing of applications by tax officers. It also addresses various issues related to the waiver, such as eligibility criteria, payment methods, and the applicability of the waiver to different tax components. 4. Trade Circular No. 12T of 2025 - dated 4-3-2025 Clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 55th meeting held on 21st December, 2024, at Jaisalmer Summary: The circular clarifies GST rates and classifications based on the GST Council's 55th meeting recommendations. It specifies that pepper of the genus Piper attracts a 5% GST, while dried pepper supplied by agriculturists is exempt from GST. Raisins supplied by agriculturists are also GST-exempt. Ready-to-eat popcorn mixed with salt and spices attracts 5% GST if unpackaged and 12% if packaged, with caramel popcorn attracting 18% GST. Autoclaved aerated concrete blocks with over 50% fly ash content fall under HS 6815 with a 12% GST. Amendments to the compensation cess for utility vehicles apply from July 26, 2023. 5. Trade Circular No. 11T of 2025 - dated 3-3-2025 Clarification on applicability of late fee for delay in furnishing of FORM GSTR-9C Summary: The circular clarifies the applicability of late fees for delays in submitting FORM GSTR-9C under the Maharashtra SGST Act, 2017, aligning with a similar circular from the Central Board of Indirect Taxes and Customs. It states that late fees apply if both FORM GSTR-9 and FORM GSTR-9C are not submitted together by the due date, as required for registered persons with turnovers exceeding specified limits. The late fee is calculated from the due date until the complete annual return is furnished. A waiver on excess late fees for financial years up to 2022-23 is granted if FORM GSTR-9C is submitted by March 31, 2025. 6. Trade Circular No. 10T of 2025 - dated 28-2-2025 Clarification regarding applicability of GST on certain services Summary: The circular clarifies the applicability of GST on various services, aligning with recommendations from the 55th GST Council meeting. Penal charges by Regulated Entities for non-compliance with loan terms are not subject to GST. Payment Aggregators are exempt from GST for transactions up to two thousand rupees. GST on research and development services by government entities and skilling services by National Skill Development Corporation-approved partners is regularized. Facility management services to the Municipal Corporation of Delhi are taxable. Delhi Development Authority is not a local authority under GST law. GST on renting commercial property by unregistered persons to registered persons is regularized. Ancillary services by electricity utilities and services by Goethe Institute/Max Mueller Bhawans are also regularized. Customs 7. PUBLIC NOTICE NO. / 2025 - dated 14-3-2025 Intimation of suspension of Custodianship of M/s. Sudharsan Logistics Pvt. Ltd., CFS, Chennai under the provisions of Regulation 11(2) of HCCAR, 2009 – Reg. Summary: The custodianship of a logistics company in Chennai has been suspended under Regulation 11(2) of HCCAR, 2009, effective March 14, 2025. This suspension follows the initial appointment of the company as a custodian for import and export goods in 2015. To minimize disruption, existing goods with the custodian can still be cleared for export and import during office hours, but no new goods will be accepted unless related documentation was filed before the suspension order. The suspension will remain in effect until further notice. 8. Public Notice. 05/2025 - dated 28-1-2025 Realisation of Sale proceeds on Exports - Submission of proof by Exporters -(BRC Compliance Drive from 29.01.2025 to 28.02.2025 for the submission of proof towards realisation of export sale proceeds) Summary: The Customs Department in Chennai has announced a compliance drive from January 29 to February 28, 2025, requiring exporters to submit proof of realization of export sale proceeds. Exporters must provide electronic Bank Realisation Certificates (e-BRCs) for shipping bills listed on the Chennai Customs website. Failure to realize export proceeds may result in the recovery of drawback amounts with interest. Exporters can verify and update realization details through the ICEGATE Portal. The BRC Section will prioritize case closures for valid submissions, and any implementation issues should be reported to the Deputy Commissioner, BRC Cell, Chennai. Highlights / Catch Notes GST GST Jurisdictional Boundaries Redefined for Seven Key Locations Under Section 3 of CGST Act Notifications : The Central Government amended Notification No. 02/2017-Central Tax regarding jurisdictional boundaries of CGST officers. The amendments, exercised under section 3 read with section 5 of CGST Act and section 3 of IGST Act, redefine territorial jurisdictions for seven key locations: Alwar, Chennai Outer, Jaipur, Jodhpur, Madurai, Tiruchirapalli, and Udaipur. The notification specifically restructures district allocations within these jurisdictions, particularly affecting administrative boundaries in Rajasthan and Tamil Nadu. For Madurai, the amendment also clarifies jurisdiction over territorial waters and underlying seabed. The changes represent a significant administrative reorganization of GST enforcement territories. Visit to Get Source Assessment Order Set Aside Due to Missing Document Identification Number (DIN) Requirement Under CBIC Circular No.128/47/2019-GST Case-Laws - HC : The HC set aside the assessment order due to the absence of a Document Identification Number (DIN), ruling it non-est and invalid. Following precedents established in Pradeep Goyal v. Union of India and M/s. Cluster Enterprises v. The Deputy Assistant Commissioner, along with CBIC Circular No.128/47/2019-GST, the court determined that proceedings lacking a DIN number cannot be sustained. The petition was disposed of with the impugned proceedings dated 18.07.2023 set aside, granting liberty to the respondent to conduct fresh assessment after proper notice and assigning a DIN number to the order. Visit to Get Source Bus Services Paid Directly by Students Not Exempt from 5% GST Under SAC 9964 Transport Classification Case-Laws - AAR : The AAR determined that transportation services provided to students and staff could not be considered as services to the educational institution since the applicant received payment directly from students rather than the school, as evidenced by the Profit and Loss Account showing only "Bus Fees Receipt" from students with no financial transactions with the school. Consequently, these services are classified as "Transport of passenger by any motor vehicle" under SAC 9964, attracting 5% GST without ITC per Notification No. 11/2017 as amended. The exemption under Serial No. 66 of Notification No. 12/2017-Central Tax (Rate) is inapplicable as it requires services be provided to an educational institution, not directly to students. Visit to Get Source Minor Clerical Error in GSTN Documentation Cannot Be Grounds for Denying Input Tax Credit Under Section 16(2)(aa) Case-Laws - HC : HC held that a minor clerical error in GST documentation - specifically, the mention of petitioner's Bombay office GSTN instead of Delhi office GSTN on invoices - cannot be grounds for denying Input Tax Credit under Section 16(2)(aa) of CGST Act, 2017. The court noted that petitioner's name was correctly mentioned on invoices and no other entity had claimed the ITC on these purchases. The impugned Order dated June 28, 2024 was set aside, allowing petitioner to avail the ITC, as denying credit for such a minor error would cause substantial financial loss. Petition partly allowed. Visit to Get Source GST Appeal Dismissed: 95-Day Delay Beyond Statutory Limit of One Month Cannot Be Condoned Under Section 107(4) Case-Laws - HC : The HC dismissed a petition challenging the Appellate Authority's refusal to condone a 95-day delay in filing a GST appeal. Under Section 107(1) of GST law, appeals must be filed within three months from communication of the order, with Section 107(4) allowing the Authority to condone delays only up to an additional one month. The Court affirmed that the Limitation Act does not apply to GST appeals, citing Chintels India Limited v. Bhayana Builders Private Limited where the SC held delays beyond 120 days cannot be condoned. Since the petitioner failed to disclose when the order was communicated, limitation was counted from the order date (21.07.2023), and neither the Appellate Authority nor the HC had statutory power to condone delays exceeding one month. Visit to Get Source Tax Intimation Under Section 73(5) of GST Act Not Challengeable Before Show Cause Notice or Final Order Case-Laws - HC : The HC rejected the writ petition challenging an intimation of tax issued under Section 73(5) of the KGST/CGST Act, 2017 as premature. The Court noted that the intimation merely ascertained tax with options for the petitioner to either pay with interest or file submissions. The document itself provided an opportunity for the petitioner to respond, and no show cause notice under Section 73(1) or final order under Section 73(9) had yet been issued. The Court concluded that judicial intervention was unwarranted at this preliminary stage of the tax assessment process. Visit to Get Source GST Registration Cancellation Cannot Be Applied Retrospectively Without Prior Notice and Proper Reasoning Case-Laws - HC : The HC modified the GST registration cancellation order, ruling that it would take effect from the date of the Show Cause Notice (12 February 2024) rather than retrospectively from 7 February 2019. The Court found the retrospective cancellation invalid due to absence of supporting reasons in the original SCN and failure to provide prior notice to the petitioner, which violated principles of natural justice. The Court determined these procedural defects alone were sufficient grounds to grant relief, consequently quashing the retrospective aspect of the impugned order while allowing the cancellation to stand from the SCN date. Visit to Get Source Income Tax Burden of Proof on Taxpayer: Seized Cash Properly Assessed as Unaccounted Money Under Section 69A and 115BBE Case-Laws - HC : The HC held that the seized cash was properly assessed as unaccounted money under section 69A read with section 115BBE. Despite the appellant's declaration during search operations that the money represented commission income, the court found this mere assertion insufficient without satisfactory explanation supported by material evidence. The appellants' failure to respond to show cause notices demonstrated indifference. The court emphasized that even when an explanation is provided, it must satisfy the Assessing Officer as required by section 69A. Following Shashi Garg, the court affirmed that the burden to explain cash sources rests with the assessee, and this burden was not discharged. The appeal was dismissed. Visit to Get Source Tax Authorities Cannot Reject DTVSV Application When Matter Is Under Appeal, Must Process Discharge Certificate Case-Laws - HC : The HC set aside the rejection of the petitioner's application under the Direct Tax Vivad Se Vishwas Scheme, 2024. The Court held that since the tax liability was under dispute before the Appellate Authority, the petitioner qualified for the scheme regardless of potential jurisdictional issues. The Court found it improper for respondents to reject the application on jurisdictional grounds that should be determined by the Appellate Authority. The HC directed the first respondent to accept the petitioner's application filed on October 4, 2024, and issue a discharge certificate in accordance with DTVSV Scheme provisions. Visit to Get Source ITAT Rejects Revenue's Claims of Sales Suppression and Excessive Commission Without Proper Evidence or Investigation Case-Laws - AT : The ITAT dismissed revenue appeals concerning alleged suppression of sales and inflated commission expenditure. Regarding sales suppression, the Tribunal found the addition unjustified as the AO failed to establish how electronic sales could be deposited into separate bank accounts, never provided IATA data to the assessee for verification, and misunderstood Agency Debit Memo as income rather than expense. The AO relied solely on an appraisal report without independent investigation or providing computation methods. Concerning commission expenditure, the ITAT upheld CIT(A)'s deletion of additions, noting the AO arbitrarily set 10% as reasonable without justification, failed to challenge payment genuineness, and disregarded business prudence from the assessee's perspective as established in Dhanrajgiri Raja Narasingirji. Visit to Get Source Diamond Trade Promotion Body Qualifies for Tax Exemption Under Sections 11 and 12 as Activities Not Commercial Case-Laws - AT : The ITAT ruled that the appellant organization qualifies for exemption under sections 11 and 12 of the Income Tax Act, finding that the proviso to section 2(15) does not apply. The Tribunal determined that the appellant's activities do not constitute trade, commerce, or business, nor does it render services related to such activities. The organization merely provides a platform facilitating import/export of diamonds and precious stones, functioning as a trade promotion body. The ITAT noted that the appellant's receipts represent cost reimbursements without excessive markup. Since no material evidence demonstrated the appellant was engaged in commercial activities or charging fees exceeding costs incurred, the Tribunal allowed the appeal, confirming the organization's charitable status and eligibility for tax exemption. Visit to Get Source Customs CBIC Revises Tariff Values for Imported Oils, Precious Metals, and Areca Nuts Under Section 14(2) of Customs Act Notifications : The CBIC, exercising powers under Section 14(2) of the Customs Act, 1962, has revised tariff values for specified imported goods through Notification No. 13/2025-Customs (N.T.) dated March 13, 2025. The notification amends the earlier Notification No. 36/2001-Customs (N.T.) by substituting new tariff values in three tables covering: edible oils (including Crude Palm Oil at $1169/MT and Crude Soya bean Oil at $1098/MT); precious metals (gold at $941 per 10 grams and silver at $1067 per kilogram); and areca nuts at $8140/MT (unchanged). The revised tariff values, which determine the customs duty calculation basis for these commodities, take effect from March 14, 2025. Visit to Get Source Amendment of Shipping Bill for Drawback Claims on Re-exported Goods Permissible Under Section 149 of Customs Act Case-Laws - HC : The HC held that amendment of a shipping bill from "Free Shipping Bill" to "Shipping Bill for Claim for Drawback" regarding re-export of goods under Section 149 of the Customs Act was permissible. Since the imported Black Pepper was never allowed outside customs area and had already been tested per Food Safety and Standards Act requirements, re-examination before re-export would have been merely procedural. Procedural irregularities under the Re-export of Imported Goods Rules cannot prejudice the petitioner's rights, as procedures are "handmaids of justice." The court directed respondents to refund the amount within two months, ruling that the petitioner could not be denied substantial benefits where goods were exported without being cleared. Visit to Get Source Export Obligation Discharge Under Amnesty Scheme Prevents Additional Penalties Under Customs Act Section 112(a) Case-Laws - HC : The HC ruled that once the petitioner regularized their export obligation under the Amnesty Scheme by paying the entire duty forgone (Rs. 50,23,802/-) plus interest (Rs. 13,35,689/-) under the EPCG Scheme, and obtained an export obligation discharge certificate, no additional penalties could be imposed. The Court reasoned that payment of the full duty amount with interest effectively meant the petitioner had not availed of the EPCG Scheme benefits, thereby discharging the export obligation. Consequently, the fine imposed under Section 112(a) of the Customs Act in lieu of confiscation under Section 111(o) was held unrecoverable, as the same default could not be subject to multiple penalties once regularized through the Amnesty Scheme. Petition allowed. Visit to Get Source Gold Chain of UAE Resident Wrongfully Seized While Traveling to India for Wedding Under Baggage Rules, 2016 Case-Laws - HC : The HC quashed the confiscation order of a gold chain valued at Rs. 1,76,488/- from the petitioner, a UAE resident who was traveling to India for a wedding. The Court determined the petitioner was an "eligible passenger" under the Baggage Rules, 2016, and the gold chain constituted personal effects that should not have been seized. The Court noted that personal jewelry is not liable for confiscation under established precedents. Additionally, procedural violations occurred as no show cause notice was issued and no personal hearing was afforded to the petitioner. The HC ordered that no penalty, redemption fine, or warehousing charges be collected, and any amounts already paid be refunded. Visit to Get Source Customs' Seizure of Wedding Guest's Gold Chain Overturned Under Baggage Rules 2016 for Non-Resident Travelers Case-Laws - HC : The HC ruled that seizure of the petitioner's gold chain by Customs authorities was unjustified. The petitioner, a UAE resident traveling to India for a wedding, was entitled to benefits under the Baggage Rules, 2016 as an eligible non-resident passenger. Photographic evidence confirmed the chain was personal jewelry, which according to established precedent is not subject to confiscation. The court found procedural violations as no show cause notice was issued nor personal hearing afforded, violating principles of natural justice. The adjudication order was quashed, with directions that no penalty, redemption fine, or warehousing charges be collected from the petitioner, and any amounts already paid be refunded. Visit to Get Source Customs Must Release Detained Gold Ornaments Due to Procedural Violations Including Failure to Issue Timely Show Cause Notice Case-Laws - HC : The HC quashed the detention of Petitioner's gold ornaments after finding multiple procedural violations by Customs authorities. The department failed to issue a Show Cause Notice within the mandatory six-month period, did not grant the Petitioner a personal hearing, and neglected to serve the order-in-original despite previous court directives. The court determined these procedural failures constituted sufficient grounds to order unconditional release of the detained goods without requiring the Petitioner to repeatedly seek judicial intervention. The court directed that the gold ornaments be released to the Petitioner with warehouse charges waived. The petition was accordingly disposed of. Visit to Get Source Customs Broker's License Revocation Overturned: Verification Limited to Document Authenticity, Not Content Accuracy Under Regulation 10(n) Case-Laws - AT : The CESTAT ruled in favor of the appellant Customs Broker, setting aside the revocation of license and penalties. The Tribunal clarified that Regulation 10(n) of the Customs Broker Licensing Regulations, 2018 only requires brokers to verify that documents were genuinely issued by government officers, not to investigate their correctness. The Customs Broker fulfilled obligations by verifying the client's IEC and GSTIN through online verification. The Tribunal held that brokers cannot be expected to judge the validity of government-issued certificates or maintain continuous surveillance of clients' addresses. As no evidence showed that any documents were fake or forged, the appellant had not violated Regulation 10(n), and the impugned order was set aside. Visit to Get Source Indian Laws Director's Resignation After Cheque Issuance Cannot Escape Liability Under Sections 138 and 141 of NI Act Case-Laws - HC : The HC affirmed the vicarious liability of the petitioner under Section 138 read with Section 141 of the NI Act for dishonored cheques. As a whole-time director and signatory of the company at the time of issuance, the petitioner's subsequent resignation (one day after issuance) did not absolve liability. Unlike in Kamal Goyal, where resignation preceded cheque issuance, here the petitioner resigned after the cheques were issued. The court found sufficient basis for prosecution given the petitioner's role as director when the cheques were issued and specific averments in the complaint regarding his position. The petition challenging the summoning order was accordingly dismissed. Visit to Get Source SARFAESI Act: Financial Institution Requires Rs.100 Crore Asset Threshold to Qualify as Secured Creditor Case-Laws - HC : The HC determined that the third respondent, with an asset size of Rs.16.30 crores as of March 31, 2024, failed to meet the Rs.100 crores threshold established in the February 24, 2020 Notification. Consequently, the respondent does not qualify as a "financial institution" under Section 2(1)(m)(iv) of the SARFAESI Act, 2002, and therefore cannot be considered a "secured creditor" entitled to invoke Section 14 provisions. Since the respondent lacked standing to file an application with the Chief Metropolitan Magistrate for possession of secured assets, the Court issued a writ of Prohibition, finding that the jurisdictional prerequisite was not satisfied. The application was accordingly disposed of. Visit to Get Source SEBI Third-Party Information Now Exempt from Trading Window Closure Under Insider Trading Regulations Amendment Notifications : SEBI has amended the Prohibition of Insider Trading Regulations, effective ninety days after official publication. The amendments significantly expand the definition of "unpublished price sensitive information" to include sixteen specific corporate events, such as termination of business contracts, auditor resignations, rating changes, fund-raising proposals, forensic audits, regulatory actions, and key license changes. The notification introduces flexibility for information not originating within organizations by allowing entry into structured digital databases within two calendar days of receipt and exempting such external information from trading window closure requirements. These modifications aim to enhance regulatory clarity and provide nuanced compliance guidance for market participants. Visit to Get Source VAT Charitable Hospital's Medicine Supplies and Canteen Services Exempt from Tax Under MP Commercial Tax Act, 1994 Case-Laws - HC : The HC ruled that the petitioner, a charitable hospital, is exempt from tax under the Madhya Pradesh Commercial Tax Act, 1994 for medicine supplies and canteen services. The Court distinguished this case from Cochin Port Trust, noting that unlike Kerala's law which includes persons selling goods "whether in the course of business or not," the MP Act only applies to persons "carrying on business." Following precedents from Gujarat and Kerala High Courts, the Court determined that supplying medicines and operating a canteen for patients' attendants were activities incidental to the charitable hospital's non-business operations, not independent business activities. The Court rejected the respondents' argument that profit generation automatically constituted business activity. Petition allowed. Visit to Get Source Service Tax Amounts Deposited During Investigation Must Be Treated as Service Tax Payment, Not Pre-deposit, Under Section 11B Case-Laws - AT : The CESTAT set aside the impugned order and remanded the matter to the Assistant Commissioner, ruling that amounts deposited by the appellant during investigation, which were appropriated toward service tax demand, should be treated as service tax payment rather than pre-deposit. Following the Tribunal's earlier decision setting aside the demand, these amounts became refundable under Section 11B of the Central Excise Act (as applicable to service tax via Section 83 of the Finance Act, 1994). The Tribunal directed that interest should be calculated under Section 11BB rather than Section 35FF, with the relevant date for interest calculation being the date of the Tribunal's order setting aside the demand. No new refund application was required as the appellant's letter already constituted a valid application. Visit to Get Source Service Tax on One-Time Property Rental Premium Valid: Premium and Recurring Rent Combined for Exemption Threshold Calculation Case-Laws - AT : The CESTAT dismissed the appellant's challenge to service tax levied on one-time premium collected for renting immovable property. Following the Allahabad HC decision in Greater Noida Industrial Development Authority case, the Tribunal held that letting immovable property for consideration determined through public offers constitutes a taxable service, not a statutory function or public service. The Tribunal rejected the appellant's argument regarding threshold exemption limits under Notification No. 4/2007-ST, finding that both one-time premium ("salami") and recurring rent are subject to service tax under the renting of immovable property service category, with the exemption limit applying to their combined total. Visit to Get Source Central Excise Exemption Notification No. 23/2003-CE Must Be Strictly Interpreted; Duty Demand Upheld While Penalties Set Aside Case-Laws - AT : The CESTAT upheld the demand for short payment of duty under Section 11A(1) of Central Excise Act, 1944 with interest under Section 11AB, confirming that exemption Notification No. 23/2003-CE must be interpreted strictly per established jurisprudence. The Tribunal determined that the appellant's immediate substantial DTA clearances after establishing an EOU indicated improper intent. However, the Tribunal set aside penalties imposed under Section 11AC read with Rule 25 of Central Excise Rules, 2002 and FTP. Penalties against individual appellants were also set aside, as they were improperly based solely on knowledge rather than specific acts of omission or commission. The appeal was partially allowed, with duty and interest demands sustained but penalties vacated. Visit to Get Source Case Laws: GST 2025 (3) TMI 774 Wrongful availment of excess Input Tax Credit - vires of Section 16 (2) (aa) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The fact of the matter is that the Petitioner s name is correctly mentioned in the invoices, however, the wrong GST number, i.e., of the Bombay office has been mentioned. On this issue, there is no stand taken by the Department in the counter affidavit. On a direct query being put to the ld. Standing Counsel for the Respondent/Department, he fairly admits that no other entity has also claimed at the ITC on these purchases. The only basis for rejecting the ITC is the mention of the Bombay office GSTN instead of the Delhi office GSTN. Substantial loss would be caused to the Petitioner if the credit is not granted for such a small error on behalf of the supplier. The impugned Order in Original dated 28th June, 2024 rejecting the ITC is set aside - The Petitioner is permitted to avail of the Input Tax Credit. Conclusion - Minor clerical errors in documentation, which do not result in any substantive claim by another entity, should not lead to the denial of ITC when the recipient s entitlement is otherwise clear. The petition is partly allowed and is disposed of. 2025 (3) TMI 773 Dismissal of appeal as time barred in respect of Assessment Year from 01.04.2021 to 31.03.2022 - power of Appellate Authority to condone a delay of more than one month in filing an appeal - HELD THAT:- As per sub-section (1) of Section 107 any person aggrieved by any decision or order passed under the Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may prefer to Appellate Authority within three months from the date on which the decision or order is communicated to such person . As per sub-section (4) of Section 107 The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month. Therefore, the Appellate Authority has power to condone the delay for the period of one month only but the provisions of the Limitation Act has not been made applicable . The Apex Court has taken a similar view in the matter of Chintels India Limited Vs. Bhayana Builders Private Limited reported in [ 2021 (2) TMI 510 - SUPREME COURT ] has held that What follows from this is that the application itself must be within time, and if not within a period of three months, must be accompanied with an application for condonation of delay, provided it is within a further period of 30 days, this Court having made it clear that section 5 of the Limitation Act, 1963 does not apply and that any delay beyond 120 days cannot be condoned. In application for condonation of delay, the petitioner has pleaded that he downloaded the order for further proceedings i.e. for filing of an appeal and in this process, there has been a delay of 95 days in filing the appeal. The petitioner has calculated the limitation from the date of order i.e. 21.07.2023. The petitioner has not disclosed the date on which the order was communicated to him, therefore, the limitation is liable to be counted from the date of order. Therefore, the Appellate Authority has no power to condone the delay. In absence of any statutory provisions, even the High Court cannot condone the delay beyond the period of one month. Conclusion - The Appellate Authority correctly dismissed the appeal as time-barred, given the statutory constraints. Petition dismissed. 2025 (3) TMI 772 Challenge to assessment order - said proceedings did not contain a DIN number - HELD THAT:- The question of the effect of non-inclusion of DIN number on proceedings, under the G.S.T. Act, came to be considered by the Hon ble Supreme Court in the case of Pradeep Goyal Vs. Union of India Ors [ 2022 (8) TMI 216 - SUPREME COURT] . The Hon ble Supreme Court, after noticing the provisions of the Act and the circular issued by the Central Board of Indirect Taxes and Customs (herein referred to as C.B.I.C. ), had held that an order, which does not contain a DIN number would be non-est and invalid. A Division Bench of this Court in the case of M/s. Cluster Enterprises Vs. The Deputy Assistant Commissioner (ST)-2, Kadapa [ 2024 (7) TMI 1512 - ANDHRA PRADESH HIGH COURT] , on the basis of the circular, dated 23.12.2019, bearing No.128/47/2019-GST, issued by the C.B.I.C., had held that non-mention of a DIN number would mitigate against the validity of such proceedings. Conclusion - In view of the aforesaid judgments and the circular issued by the C.B.I.C., the non-mention of a DIN number in the order, which was uploaded in the portal, requires the impugned order to be set aside. This Writ Petition is disposed of setting aside the impugned proceedings, dated 18.07.2023, issued by the 1st respondent, with liberty to the 1st respondent to conduct fresh assessment, after giving notice and by assigning a DIN number to the said order. 2025 (3) TMI 771 Challenge to assessment order passed by the first respondent, along with the consequential attachment order - seeking a direction to the fourth respondent to de-freeze the petitioner s account - violation of principles of natural justice - HELD THAT:- Recording the submission made by the learned Government Advocate that the petitioner is having an appeal remedy before the Deputy Commissioner (GST), Madurai, under Section 107 of the TNGST Act, 2017, this writ petition is disposed of with liberty to the petitioner to approach the appellate authority and raise all the grounds raised in this writ petition in the appeal. In the event, if any appeal is filed within a period of one month from the date of receipt of a copy of this order, the same shall be entertained by the appellate authority without insisting on the limitation and disposed of in accordance with law, within a period of two months thereafter. Petition disposed off. 2025 (3) TMI 770 Permission to withdraw with leave to file fresh petition carrying better particulars - HELD THAT:- The writ petition has not been moved as yet. In the circumstances, prayer of petitioner is allowed. The writ petition is dismissed with liberty to file afresh with better particulars. 2025 (3) TMI 769 Dismissal of appeal as time barred - HELD THAT:- In the considered opinion of this Court, the appellate authority in rejecting the application for condonation of delay and as a consequence rejecting the appeal vide impugned order dated 30/05/2024 on the ground of delay, does not seem to be proper, legal and justified. The appellate authority ought to have given a fair consideration to the contentions of the petitioner and ought to have got it verified whether the order was duly served either physically or electronically to the petitioner and only then should have taken a decision. In the absence of any such exercise and deciding the application for condonation of delay only on the basis of pleadings, the impugned order, in the considered opinion of this Court, is not sustainable and deserves to be and is accordingly set aside. In consequence thereof, delay, if any in filing the appeal by the petitioner before the appellate Court is hereby condoned. The matter stands remitted back to the appellate authority i.e. respondent No. 1 to consider and decide the appeal filed by the petitioner on its own merits after due verification of the facts and also on due consideration of the contentions that the petitioner has raised in this petition - Petition disposed off by way of remand. 2025 (3) TMI 768 Challenge to intimation of tax issued under Section 73(5) of the KGST/CGST Act, 2017, since the petitioner is not liable to pay tax on royalty - HELD THAT:- A perusal of Annexure-D, intimation of tax ascertained under Section 73(5) of KGST Act, 2017 would reveal that it is only an intimation of ascertained tax with liberty to the petitioner to pay along with interest or to file his submission. Failing to pay the ascertained tax, petitioner would be issued further notice under Section 73(1) and thereafter the Competent Authority shall have to pass order under Section 73(9) of KGST Act. Further, intimation of tax ascertained at Annexure-D also provides an opportunity to file any submission of the petitioner against the said intimation itself. Since no show cause notice under Section 73(1) of KGST Act is issued and no order in terms of Section 73(9) of KGST Act is passed, the present writ petition would be premature. Hence, writ petition stands rejected. 2025 (3) TMI 767 Cancellation of Goods and Services Tax (GST) registration with retrospective effect from 07 February 2019 - absence of reasons in the original SCN - violation of principles of natural justice - HELD THAT:- It becomes apparent that absence of reasons in the original SCN in support of a proposed retrospective cancellation as well as a failure to place the petitioner on prior notice of such an intent clearly invalidates the impugned action. It is opined that the writ petition is entitled to succeed on this short ground alone. The writ petition is allowed by modifying the impugned order and providing that the cancellation of the petitioner s GST registration shall come into effect from the date of the SCN i.e. 12 February 2024 - The stipulation in the impugned order of cancellation to come into effect from 07 February 2019 is consequently quashed. 2025 (3) TMI 766 Challenge to section 174(2) of the GST Act, 2017 - HELD THAT:- The issue involved in the present petition stands finally adjudicated by this Court in Tecnimont Spa India Project Office vs. State of Punjab and another [ 2024 (12) TMI 1223 - PUNJAB AND HARYANA HIGH COURT ] wherein it was held that we propose to dispose of all these writ petitions and direct that the challenge to section 174(2) of the GST Act, 2017 would be subject to the final outcome of the decision in the case of T.S. Belaraman [ 2024 (5) TMI 1498 - SC ORDER ]. This Writ Petition also disposed off in the aforesaid terms. 2025 (3) TMI 765 Exemption from service tax - services provided by the applicant to the school students by way of transportation of students and staff, shall be considered as the services provided to the school (Educational Institute) - applicability of Serial No.66 of N/N. 12/2017-Central Tax (Rate) dated 28th June 2017. Whether the services provided by the applicant to the school students by way of transportation of students and staff should be considered as services provided to the school (Educational Institute)? - HELD THAT:- Though the lease agreement in the instant case is executed with the school administration, we observe that the same has been carried out only to comply with the statutory requirements. On perusal of the Profit and Loss Account furnished for the year 2023-24, it is seen that only one entry, viz., Bus Fees Receipt is mentioned on the Income side under the head Direct Incomes , which relates to Student Transport Fees received from the students. And no entry is seen to have been made either on the Income side or on the Expenditure side of the Profit and Loss Account, as far as it relates to school, which goes to show that the applicant is neither receiving any amount from the school, nor paying any amount to the school. Under these circumstances, as the consideration towards the transportation activity are received in full by the applicant from the students concerned, and as no consideration is received by school administration, it becomes clear that no services are rendered by the school to the students in relation to transportation of students. Once it is clear that in effect, the school has outsourced the transport service to the applicant, and that the applicant is in direct receipt of the consideration from the students, the service rendered by the applicant to the students is to be considered as Transport of passenger by any motor vehicle , which merits classification under service SAC 9964, attracting GST at 5% without ITC as per Sl.No.8(vi) of Notification No. 11/2017, dated 28.06.2017, as amended vide Notification No.31/2017-Central Tax (Rate) dated 13.10.2017. Whether the services provided by the applicant are exempted from GST as per Serial No.66 of Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017 or any other applicable provision of the Act? - HELD THAT:- The entry as per Serial No.66 of N/N.12/2017 Central Tax (Rate) dated 28th June 2017 states clearly that services provided by way of transportation of students, faculty and staff are exempted, if the said services are provided to an educational institution. It is quite clear that the applicant receives the transportation cost directly from the students, and that no consideration is being paid by the school towards the transportation charges of either the students or its faculty and staff. Further, having held already that no service is provided to the school by the applicant, it is opined that the exemption as provided under Sl. No.66 of Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017, as amended, is not available to the applicant, under the facts and circumstances of the instant case. Apart from the same, on further examination of the other legal provisions, the activities carried out by the applicant in the instant case do not get exempted under any other provisions of the Act, as well. Conclusion - i) The service provided by the applicant to the school students by way of transportation of students and staff cannot be considered as the services provided to the school (Educational Institute). ii) The service provided by the applicant as mentioned above is not exempted from GST, either under Serial No.66 of Notification No. 12/2017 Central Tax (Rate) dated 28th June 2017, or under any other provisions of the Act. Income Tax 2025 (3) TMI 764 Assessing the seized cash as unaccounted cash u/s 69A - appellant stated under oath that it had earned commission income and duly complied with it and offered it as income from other sources - HELD THAT:- The very fact that the assessee s did not even respond to the show cause notices issued to them would show that they were indifferent to the situation. However, the questions of law raised before this court remain as if the assessee s have disclosed their source of income and that the declaration made during the search operation is sufficient to bring the case outside the purview of Section 69A r/w Section 115BBE. This court is unable to appreciate the issue as a pure question of law or arguments of the appellants. Even if an explanation is given, such explanation has to be satisfactory in the opinion of the Assessing Officer in terms of Section 69A of the Income Tax Act. In this case, there is no explanation. The money seized was not disclosed and hence it is an unexplained money. Mere declaration that it was received as commission without an explanation about the source with supporting material attracts Section 69A and the tax liability under Section 115BBE follows. See Shashi Garg [ 2018 (12) TMI 583 - DELHI HIGH COURT] wherein held burden to explain the source of cash deposit was on the appellant-assessee, who as per the finding has not been able to discharge this burden. The evidence on record is undisputed, and the inference and factual findings recorded we could observe are supported by cogent and weighty reasoning. Explanation of the appellant-assessee has been duly considered and not ignored. Decided against assessee. 2025 (3) TMI 763 Rejecting the application filed by the petitioner under Direct Tax Vivad Se Vishwas Scheme, 2024 - HELD THAT:- Government has introduced the DTVSV scheme with an intention to resolve the issues relating to the tax liability. The pre-condition for availing the benefit under DTVSV scheme is that the tax liability has to be disputed by way of appeal or writ petition or Special Leave Petition. This Court is of the view that the maintainability of the appeal has to be decided by the Appellate Authority. Since the Revisional Authority has dismissed the revision petition filed by the petitioner citing the reason that the petitioner is entitled to avail appeal remedy, the petitioner has filed appeal before the Appellate Authority. The appeal has been numbered and taken on file. It is for them to decide whether the appeal has to be entertained or rejected. Even the appeal got rejected on the ground of maintainability, still the petitioner is entitle to challenge the same by way of writ petition since no other alternate remedy is available. Therefore, in the present case, the tax liability assessed by the Taxing Authority has been disputed and the same is pending before the Appellate Authority. Therefore, the respondents rather than giving quietus to the issue, rejecting the application citing the jurisdictional issue which needs to be decided by the Appellate Authority is not proper. Hence, this Court is inclined to set aside the order dated 12.02.2024, rejecting the Form-1 filed by the petitioner under DTVSV Scheme. The order impugned herein is set aside and the 1st respondent is directed to accept the petitioner s application filed under DTVSV Scheme on 04.10.2024 and to issue discharge certificate to the petitioner in accordance with the provision of the DTVSC scheme. 2025 (3) TMI 762 Addition u/s 69A - cash deposits in the assessee s bank accounts constituted unexplained income - HELD THAT:- As rightly pointed out by the CIT(A) in the impugned order that there is no benefit given to the withdrawals and no verification has been done in that regard whether the said withdrawals were utilized for personal benefit of the assessee. AO failed to conduct an examination in this regard to arrive at correct income of the assessee. AO however, proceeded to add entire cash deposit as income of the assessee, without there being any benefit to the withdrawals, in our opinion, is not justified. We find the assessee filed original return of income declaring a total income of . 7,72,241/- and in response to the notice under section 148 of the Act, declared income of . 31,51,430/-. The break-up of the said income is reflected in impugned order. On examination of the same, the assessee stated to have been earned income from salary, income from other sources and income from business. CIT(A) was of the opinion that there was no evidence brought on record by the Assessing Officer to bring entire cash deposits as income of the assessee chargeable to tax. In view of the same, we find no infirmity in the order of the CIT(A) and it is justified. Thus, the grounds raised by the Appellant-Revenue are dismissed. 2025 (3) TMI 761 Addition made on account of suppression of sales - differences between the sales of tickets as per books of accounts and various other parameters - differences between the sales of tickets as per books of accounts and various other parameters - CIT(A) deleted addition - HELD THAT:- Since the sales were done electronically online then if the same has been received in some bank account, then how the same was accounted for in the books of accounts. If the sales were received in a separate bank account, then the same has not been brought on record. The receipt of suppressed sales in a different bank account is not possible since the entire payment towards sale will be credited in a single bank account and it is not possible to receive the proceeds of sales in 2 separate bank accounts. The data taken from IATA has been compared with Busy data, but the IATA data was never provided at any stage to the assessee. The addition in respect of ADM (Agency Debit Memo) has been made based upon entirely incorrect understanding of facts. ADM is an expense for the company and is not in the nature of income. Hence if the contention of the ld AO is accepted, then difference between ADMS entries found in IATA and not recorded in Busy software would result in increase of expenditure and not sales. This itself proves the fallacy in understanding of the entire gamut of the case by the ld AO and also proves that the additions have been made without any cogent material and without any basis. There is no dispute that the ld AO during assessment proceedings has not carried out any independent investigation and solely relied upon the appraisal report for making the addition and no details regarding mode and method of computation of suppressed sales are available, the same has been confirmed in the remand report furnished. In the absence of basic details like the method and mode of computation and PNR wise details of suppression of sales and absence of mode of receipt of the alleged suppressed sales, the addition made is not justified. No infirmity in the order of the CIT-A deleting the additions made on account of alleged suppression of sales for all the years under consideration. Disallowance on account of inflated commission expenditure - CIT(A) deleted addition - HELD THAT:- It is not the case of the ld AO that the commission was paid to related persons, or the company received back the commission paid in form of cash or the commission paid was not genuine or bogus. The only allegation is that the commission paid in excess of 10% is not justified. No basis was reflected by the ld AO even to arrive at the Arm s length rate of commission at 10% or 5%, as the case may be. It is pertinent to note that the commission percentage obviously would vary from party to party depending upon the volume of sales sourced by the said agents. The rate at which commission is to be paid is solely the prerogative of the company if the same is not bogus. In this case, the genuineness has not been challenged by the department. Hence the ld AO was not justified in holding that commission expenditure upto 10% would be at Arm s length and any percentage over and above the same, would be excessive or unreasonable. Either way, the business prudence need to be looked into from the point of view of the businessman and not from the point of view of the revenue. The law is very well settled on this aspect by the decision of Hon ble Supreme Court in the case of CIT vs Dhanrajgiri Raja Narasingirji reported in 91 ITR 544 (SC). Further no deduction was claimed towards commission expenditure and hence there is no question of any disallowance thereon. No infirmity in the order of the ld CITA deleting the additions. All the appeals of the revenue are dismissed. 2025 (3) TMI 760 Assessment u/s 153A - Unexplained share capital - CIT(A) deleted addition - HELD THAT:- No material has been brought for our consideration to interfere with the impugned order of the Ld. CIT(A) on merits. CIT(A) has relied on the order in the case of Lovely Exports Pvt Ltd [ 2008 (1) TMI 575 - SC ORDER] and in the case of Divine Leasing [ 2007 (11) TMI 627 - SC ORDER] CIT(A) has also relied on the order of the Hon ble Jurisdictional Allahabad High Court in the case of Jaya Securities Ltd Vs. CIT [ 2007 (5) TMI 552 - HIGH COURT OF ALLAHABAD] Whether any addition can be made in the absence of incriminating material found in the course of search u/s 132 - The matter is covered in favour of the assessee by precedents in the case of PCIT vs Abhisar Buildwell (P.) Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] and Smt Shashi Agarwal [ 2024 (10) TMI 533 - ITAT LUCKNOW] as there is material on record to indicate that addition made by the AO was based on incriminating material found in the course of search u/s 132 of the Act. Appeal of Revenue stands dismissed. 2025 (3) TMI 759 Proviso to Section 2(15) disentitles the assessee from availing exemption u/s. 11 and 12 or not? - determining if the activities of the assessee fall within the ambit of charitable purpose or not? - as per DR since the assessee had generated income from activities, which are in the nature of trade and commerce and such receipts are not within the permissible limit in terms of proviso to Section 2(15) assessee is not entitled to claim exemption u/s. 11 HELD THAT:- It is an undisputed fact on record that the main objects of the assessee based on which registration was granted u/s. 12A of the Act and, which objects have been accepted to be of charitable nature up to the stage of Hon ble Supreme Court in assessee s case, have not undergone any change till date. Therefore, it has to be accepted that the assessee is a charitable organization existing for charitable purpose having the object of general public utility in terms of Section 2(15) of the Act. A careful reading of the proviso clearly indicates that it applies only to advancement of any other activities of general public utility . Pertinently, the proviso introduced to Section 2(15) has undergone further changes subsequently. For the purpose of deciding the present appeal, the proviso as originally introduced by Finance Act, 2008 effective from 01.04.2009 would be relevant, as it applies to the assessment year under dispute. Whether the assessee is either carrying on any trade, commerce or business or is rendering any service in relation to any trade, commerce or business for a cess or fee or any other consideration? - As could be seen from the main objects of the assessee, it is not in any manner involved in any activity of trade, commerce or business. There cannot be any doubt regarding this fact. Therefore, it is necessary to see whether the second condition of any activity of rendering any service in relation to any trade, commerce or business is applicable. Since the assessee itself is not carrying on any trade, commerce or business, it cannot be said that it is involved in any activity of rendering service in relation to any trade, commerce or business. The assessee merely provides a platform to importers/exporters of diamonds and precious stones to facilitate import/export activity seamless and less cumbersome to make the trade more competitive in international market. In sum and substance, the role of the assessee is akin to a trade promotion organization. In the facts of the present appeal, admittedly, the receipts of the assessee are on account of reimbursement of cost. Further, the accounts of the assessee placed before us demonstrate that the cost recovery made by the assessee is as per cost without any excessive mark up. In fact, there is no such allegation even by the Assessing Officer. Therefore, assessee s object of any other activity of general public utility would not fall within the vice of proviso to Section 2(15) of the Act. We must observe, introduction of proviso to section 2(15) of the Act ipso facto would neither negate assessee s existence for charitable purpose nor disqualify the assessee from enjoying exemption u/s. 11 of the Act. Applicability of the proviso to Section 2(15) of the Act has to be examined factually based on material available on record to demonstrate that a particular assessee, though, is engaged in advancement of object of general public utility, however, it is engaged in the activity of trade or commerce or business or is providing service related to activity of trade commerce or business by charging cess or fee or any other consideration. In the facts of the present appeal, no cogent material has been brought on record by the AO to demonstrate that the assessee is either involved in the activity of trade or commerce or business or is providing any service related to trade or commerce or business. Further, there is nothing on record to show that the assessee is charging any cess or fee or any other consideration, which is markedly excessive of the cost incurred. We hold that the assessee is not hit by the proviso to Section 2(15) of the Act. As a natural corollary, assessee would be entitled for exemption u/s. 11 of the Act. Assessee appeal allowed. 2025 (3) TMI 758 Rejection of application for registration in Form No.10AB under clause (iii) of section 12A(1)(ac) and sub-section (5) of section 80G - CIT(E) cancelling provisional Registration granted and rejecting to grant permanent Registration - HELD THAT:- We find that admittedly the assessee made compliance to the initial notice issued by Ld. CIT, Exemption, Pune, but the subsequent notice could not be answered by him. It is the sole contention of Ld. AR that if the assessee has not furnished requisite information/documents on the requisite date, one further opportunity should have been provided to him by Ld. CIT, Exemption, Pune, since only 7 days time was allowed to respond against the notice. We find some force in the arguments of Ld. AR therefore considering all, we deem it appropriate to set-aside the order passed by Ld. CIT, Exemption, Pune and remand the matter back to him with a direction to give one more opportunity to the assessee to file the requisite details. 2025 (3) TMI 757 Rejecting the application for registration u/s 12AA - application was furnished u/s 12A(1)(ac)(vi)(B) of the IT Act instead of u/s 12A(1)(ac)(iii) - HELD THAT:- We find that admittedly, the assessee trust was required to file application under clause (iii) of section 12A(1)(ac) of the IT Act but due to inadvertent error the application was filed under clause (vi) of section 12A(1)(ac) of the IT Act and for this reason alone Ld. CIT, Exemption, Pune rejected its application for registration. We find that under identical situations, a Co-ordinate Bench of this Tribunal in the case of Raj Krishan Jain Charitable Trust [ 2024 (6) TMI 1400 - ITAT DELHI ] held that the typographical error deserves to be corrected. Accordingly, the appeal deserves to be allowed. Thus, we deem it proper to set-aside the order passed by Ld. CIT, Exemption, Pune and remand the matter back to him with a direction to treat the application already filed by the assessee as under clause (iii) of section 12A(1)(ac) of the IT Act instead of under clause (vi) of section 12A(1)(ac) of the IT Act and decide the same as per fact and law after providing reasonable opportunity of hearing to the assessee. Appeal filed by the assessee is allowed for statistical purposes. 2025 (3) TMI 756 Rejecting application for registration u/s 12A and approval u/s 80G(5) - objects and activities of the trust or institution not proved - HELD THAT:- We are of the view that there is some typographical error in the findings of the CIT(E) where she accepted the charitable activities of the assessee. We are of the view that the CIT(E) has not given sufficient time to assessee to present its case. The assessee has furnished several documents and evidences before us to establish the genuineness of the activities of the trust. CIT(E) ought to have given a reasonable and adequate opportunity of being heard to the assessee. Therefore, in the interest of justice and fair play, we deem it fit to restore the appeal to the file of the CIT(E). CIT(E) is directed to rehear and consider all the documents submitted along with the application after affording a reasonable and adequate opportunity of being heard to the assessee. The ground of the appeal is allowed for statistical purpose. Application for registration u/s 80G(5)(iii) of the Act of the assessee was rejected by the ld. CIT(E) as non-maintainable as the same has not been filed with six months of commencement of activities - As relying on Tomorrow s Foundation [ 2024 (3) TMI 941 - ITAT KOLKATA ] we allow the appeal of the assessee for grant of approval u/s 80G(5) if otherwise the assessee is eligible. We are however of the view that as we have already set aside the issue of grant of Registration u/s 12A to the file of the CIT(E) for a fresh determination regarding genuineness of the Trust activity, we deem it fit to set aside this issue of 80G(5) approval also to the file of the CIT(E) with a direction to the ld. CIT(E) not to consider the non-filing of application within 6 months of commencement of activities be an impediment in granting registration u/s 80G of the Act. The ground of appeal is allowed for statistical purpose. Customs 2025 (3) TMI 755 Seeking release of the gold bars, which were detained by the Customs Department - HELD THAT:- It is expected that the Customs Department would adhere to the said directions, in terms of Section 153 of the Customs Act, 1962. Since the Petitioner has received the order only today from the ld. Counsel for the Respondent, the Petitioner is given thirty days time to avail of his remedies in accordance with law. The petition is disposed of. 2025 (3) TMI 754 Seizure of the gold chain from the Petitioner by the Customs authorities was justified under the Customs Act, 1962 and the Baggage Rules, 2016 - denial of free allowance - eligible passenger in terms of the Notification No. 50/2017-Customs dated 30th June, 2017 (as amended) read with Baggage Rules, 2016 (as amended) - confiscation - redemption fine - penalty - violation of principles of natural justice - HELD THAT:- A photograph of the Petitioner wearing the said jewellery has been placed on record. The wedding card of the Petitioner, showing the date of marriage as 21st April, 2024 has also been placed on record. A perusal of the photograph along with the wedding card would itself show that the Petitioner is a bona fide passenger who was travelling to India to attend a wedding ceremony. It is not in dispute as has been recorded by the adjudicating authority that the Petitioner himself is a UAE resident with a proper resident ID. The gold chain has been valued at Rs. 1,76,488/- - The Petitioner being a non-resident is fully entitled to the benefit provided to an eligible passenger under the Baggage Rules, 2016. The goods constitute personal effects of the Petitioner and could not have been seized in the manner the Custom authorities have. This Court has now pronounced several orders/judgments, following various judgments of the Supreme Court and this Court, wherein it has been held clearly that if the gold items seized are personal jewellery, the same would not be liable to be confiscated. Moreover, in the present case, a show cause notice has not been issued to the Petitioner and no personal hearing has been afforded. Conclusion - i) The impugned order dated 7th November, 2024 passed by the adjudicating authority is accordingly quashed. ii) No penalty or redemption fine shall be collected from the Petitioner. No warehousing charges shall also be liable to be collected from the Petitioner. The charges, if any, already deposited shall be refunded to the Petitioner. Petition disposed off. 2025 (3) TMI 753 Seizure of the gold chain from the Petitioner by the Customs authorities was justified under the Customs Act, 1962 and the Baggage Rules, 2016 - denial of free allowance - eligible passenger in terms of the Notification No. 50/2017-Customs dated 30th June, 2017 (as amended) read with Baggage Rules, 2016 (as amended) - confiscation - redemption fine - penalty - violation of principles of natural justice - HELD THAT:- A photograph of the Petitioner wearing the said jewellery has been placed on record. The wedding card of the Petitioner, showing the date of marriage as 21st April, 2024 has also been placed on record. A perusal of the photograph along with the wedding card would itself show that the Petitioner is a bona fide passenger who was travelling to India to attend a wedding ceremony. It is not in dispute as has been recorded by the adjudicating authority that the Petitioner himself is a UAE resident with a proper resident ID. The gold chain has been valued at Rs. 1,76,488/- - The Petitioner being a non-resident is fully entitled to the benefit provided to an eligible passenger under the Baggage Rules, 2016. The goods constitute personal effects of the Petitioner and could not have been seized in the manner the Custom authorities have. This Court has now pronounced several orders/judgments, following various judgments of the Supreme Court and this Court, wherein it has been held clearly that if the gold items seized are personal jewellery, the same would not be liable to be confiscated. Moreover, in the present case, a show cause notice has not been issued to the Petitioner and no personal hearing has been afforded. Conclusion - i) The impugned order dated 7th November, 2024 passed by the adjudicating authority is accordingly quashed. ii) No penalty or redemption fine shall be collected from the Petitioner. No warehousing charges shall also be liable to be collected from the Petitioner. The charges, if any, already deposited shall be refunded to the Petitioner. Petition disposed off. 2025 (3) TMI 752 Time limitation for issuance of SCN - SCN was issued beyond the prescribed period of limitation which is three years - HELD THAT:- The Petitioner is a Chartered Accountant who is stated to have assisted the main accused in producing false and fabricated documents in return for receiving 1% of the invoice value. The allegations being serious and factual in nature, this Court in writ jurisdiction would not be able to examine the said factual aspects. Secondly, insofar as the judgment of the Gujarat High Court is concerned, the challenge therein was to the belated issuance of the Show Cause Notice itself and the Show Cause Notices were quashed by the Gujarat High Court at the instance of the actual exporters. In the present case, Petitioner is not the actual exporter but a Chartered Accountant who is providing services to the actual exporter. Under these circumstances, this Court is of the opinion that the Petitioner deserves to be relegated to avail of the appellate remedy. Under Section 128 of the Customs Act, 1962, the order is appealable before the Commissioner (Appeals) - the Petitioner may file an appeal in accordance with law challenging the Order-in-Original before the appropriate Appellate Authority. Conclusion - i) The Petitioner should avail of the appellate remedy under Section 128 of the Customs Act, 1962, to challenge the Order-in-Original and raise all objections, including those related to limitation. ii) The Court did not examine the merits of the limitation issue or the procedural fairness of the Order-in-Original. Petition disposed off. 2025 (3) TMI 751 Seeking unconditional release of the gold ornaments of the Petitioner detained - issuance of SCN within a prescribed period, usually six months - HELD THAT:- The prescribed period of six months for issuance of a Show Cause Notice has already elapsed. No personal hearing was also granted to the Petitioner and as directed in the above order in the previous writ petition, no order-in-original has been served upon the Petitioner till date. After the passing of an order by the Division Bench in the earlier writ petition, the Customs department had an obligation to ensure that the order-in-original is served or intimated to the Petitioner. There has been no compliance of the direction passed by this Court. Under such circumstances, the Petitioner cannot be forced to repeatedly approach the Court to even obtain a copy of the order - Accordingly, it is a fit case for directing the release of goods. The detention is, accordingly, quashed. The goods shall be released to the Petitioner. Warehouse charges shall be waived. Petition disposed off. 2025 (3) TMI 750 Violation of principles of natural justice - Correctness of setting aside the penalty against the Respondent herein without assigning any reason for the same - HELD THAT:- Since on merits, the Tribunal has given relief to the company of which the respondent is a Director, the question of penalty on the Director would be consequential and in any case, the order is a reasoned order raising no substantial question of law but is based on facts and no perversity has been shown. The appeal does not raise any substantial question of law and the appeal is dismissed. 2025 (3) TMI 749 Amendment of Shipping bill from a Free Shipping Bill to a Shipping Bill for Claim for Drawback in respect of re-export of goods in terms of Section 149 of the Customs Act, 1962 - confiscation - penalty - HELD THAT:- The imported goods were not allowed to be taken outside the customs area and therefore the question of the imported consignments being re-examined once again before the reexport would have been merely a procedural formality as the Customs Department had already subjected the imported consignments of Black Pepper to test and had sent it for laboratory to comply with the provisions of the Food Safety and Standards Act, 2006. Since the goods have been reexported back, the procedural irregularities in complying with the requirements of the rules under the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995, cannot be pressed against the petitioner as the procedures are handmaids of justice and not mistress of law as held by the Hon ble Supreme Court in State of Uttar Pradesh Vs Aurya Chambers of Commerce [ 1986 (4) TMI 363 - SUPREME COURT ]. Conclusion - Since the goods having been exported without being cleared, the petitioner cannot be denied the substantial benefits that was available to the petitioner. The respondent is directed to refund the amount within a period of two (2) months from the date of receipt of a copy of this order - petition allowed. 2025 (3) TMI 748 Amnesty scheme - Failure to achieve the export obligation - availment of concessional rate of duty utilising the benefit of the Export Promotion Capital Goods Scheme - HELD THAT:- It is clear from Ext.P1 that the sum of Rs. 50,23,802/- represents the entire amount of duty forgone under the EPCG Scheme. Rs. 13,35,689/- represents the interest payable on the said amount. The learned Standing Counsel appearing for the Customs Department does not dispute this. If that be the case, the failure to achieve the export obligation has been regularised in terms of the scheme. The inability to fulfill export obligation in terms of the Scheme, no doubt, exposed the petitioner to proceedings for recovery of the Customs Duty and for confiscation/imposition of penalty. However, once a Scheme for settling the liability had been introduced and the petitioner had paid Customs Duty forgone together with interest thereon and had obtained an export obligation discharge certificate (which is to be issued in terms of Ext.P2), the default in not achieving the export obligation was regularized by the proper authority namely, the Directorate General of Foreign Trade, Department of Commerce. There is yet another way of understanding the issue. The only benefit obtained by the petitioner by utilising the benefit of the EPCG Scheme was that he could import goods without paying the full amount of customs duty. In terms of the Amnesty Scheme, the petitioner has to pay the entire amount of duty foregone along with interest up to the date of payment. On payment of the total amount of duty along with interest, it must be deemed that the petitioner has not availed the benefit of the EPCG Scheme. If that were the situation, the liability to achieve export obligation would be discharged, and no penalty/fine could be imposed on the petitioner. The fine imposed under Section 112 (a) of the Act in lieu of confiscation under Section 111 (o) of the Act cannot be recovered from the petitioner. Conclusion - i) The petitioner, having regularized the export obligation by paying the duty and interest under the Amnesty Scheme, cannot be subjected to penalties for the same default. ii) The imposition of a penalty under Section 112(a) of the Customs Act is not justified once the export obligation is deemed fulfilled through the Amnesty Scheme. Petition allowed. 2025 (3) TMI 747 Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - violation of Regulation 10(n) of the Customs Broker Licensing Regulations, 2018 - Does the Customs Broker have to satisfy himself that these documents or their copies given by the client were indeed, issued by the concerned government officers or does the Customs Broker have to ensure that the officers had correctly issued these documents? - HELD THAT:- Regulation 10(n) does not place an obligation on the Customs Broker to oversee and ensure the correctness of the actions by Government officers. Therefore, the verification of documents part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as the Customs Broker satisfies itself that the IEC and the GSTIN were, indeed issued by the concerned officers. This can be done through online verification, comparing with the original documents, etc. and does not require an investigation into the documents by the Customs Broker. Therefore, the appellant was correct in verifying the GSTIN issued by the department on the GST portal. The presumption is that a certificate or registration issued by an officer or purported to be issued by an officer is correctly issued. Section 79 of the Evidence Act, 1872 requires even Courts to presume that every certificate which is purported to be issued by the Government officer to be genuine. The onus on the Customs Broker cannot, therefore, extend to verifying that the officers had correctly issued the certificate or registration. Of course, if the Customs Broker comes to know that its client has obtained these certificates through fraud or misrepresentation, nothing prevents it from bringing such details to the notice of Customs officers for their consideration and action as they deem fit. However, the Customs Broker cannot sit in judgment over the certificate or registration issued by a Government officer so long as it is valid. In this case, there is no doubt or evidence that the IEC, the GSTIN and other documents were issued by the officers. So, there is no violation as far as the documents are concerned. There is nothing on record to show that either of these documents were fake or forged. Therefore, they are authentic and reliable and there are no reason to believe that the officers who issued them were not independent and neither has the Customs Broker any reason to believe that they were not independent. The responsibility of the Customs Broker under Regulation 10(n) does not include keeping a continuous surveillance on the client to ensure that he continues to operate from that address and has not changed his operations. Therefore, once verification of the address is complete as discussed in the above paragraph, if the client moves to a new premises and does not inform the authorities or does not get his documents amended, such act or omission of the client cannot be held against the Customs Broker. Conclusion - The appellant Customs Broker did not fail in discharging its responsibilities under Regulation 10(n). The impugned order is not correct in concluding that the Customs Broker has violated Regulation 10(n) because the exporter was found to not exist during subsequent verification by the officers. The impugned order, therefore, cannot be sustained and is set aside - appeal allowed. 2025 (3) TMI 746 Levy of penalty u/s 112 of the Customs Act, 1962 and a penalty u/s 114AA of the Customs Act - whether the goods that were imported required Wireless Planning and Coordination (WPC) License and whether in the absence of this license, the goods could be confiscated? - existence of proper evidence or not - principles of natural justice - HELD THAT:- It is not possible to accept the contention that has been raised in the grounds of appeal that the finding recorded by the Commissioner is without any evidence. The Commissioner has meticulously examined the evidence and has recorded a categorical finding of fact that either WPC Licenses were not produced and the WPC Licenses that were produced were forged. This finding has not been effectively contraverted. Fraud vitiates everything, and therefore, no benefit can accrue to the appellant. Appeal dismissed. Service Tax 2025 (3) TMI 745 Liability of appellant to pay tax on the amount paid or remitted to the foreign based service provider under the Banking and Financial services on Reverse Charge Mechanism [RCM] basis - place of provision of services - Mega Exemption Notification No. 25/2012 dated 20th June 2012 - demand of interest and penalties. HELD THAT:- The present show cause notice is 4th in line. It has been brought to our notice that the SCN dated 21.01.2013 has been decided vide order in original No. 17/2013 dated 29.03.2014 wherein the Assistant Commissioner had dropped the demand in respect of Business Exhibition Service received from the foreign service providers located outside the taxable territory holding that Notification No. 5/2011 dated 01.06.2011 exempts the taxable services specified in sub clause (zzo) of clause (105) of Section 65 of the said Finance Act, when provided by an organizer of Business Exhibition for holding a business exhibition outside India, from the whole of the service tax leviable thereon under Section 66 of the said Act. The impugned order has absolutely ignored the said decision. It has been the settled law that once an order has been passed allowing full relief to the assessee then it would not be proper for the department to take a different view on same issue provided there are no factual difference in two situations. The Hon ble Apex Court in Vishnu Traders [ 1993 (11) TMI 230 - SUPREME COURT] has held In the matters of interlocutory orders, principle of binding precedents cannot be said to apply. However, the need for consistency of approach and uniformity in the exercise of judicial discretion respecting similar causes and the desirability to eliminate occasions for grievances of discriminatory treatment requires that all similar matters should receive similar treatment except when factual differences require a different treatment so that there is assurance of consistency, uniformity, predictability and certainty of judicial approach. Coming to the submission vis- -vis invalidity of the show cause notice demanding service tax under the omitted provisions, we observe that the impugned show cause notice has been issued after the amendment in Finance Act with effect from 01.07.2012. The said amendment as per Notification No. 19/2012 dated 05.06.2012 has made the erstwhile section i.e. Section 66 of Finance Act 1994 as inoperative with effect from 01.07.2012 and Section 66B is incorporated as the new charging section of the service tax. The impugned show cause notice has demanded service tax under the erstwhile Section 66 of the Finance Act. The show cause notice is apparently invalid otherwise also as per newly incorporated Section 66B. The service tax with effect from 1.7.2012, is leviable on all services except those specified in the negative list of the services. It is the appellant s case which is not anywhere disputed nor denied, that the services were received for conducting Business Exhibitions that too abroad i.e. the exhibitions were conducted outside the taxable territory. Hence had the right provisions would have been invoked at the time of issuance of show cause notice, there was no necessity for the issuance. The show cause notice issued under inoperative erstwhile provision is not sustainable. Place of Provision of Services - HELD THAT:- The Place of Provisions for holding any exhibition/events shall be the place where the event is held. The department s own Educational Guide dated 20.06.2012 has also clarified that the event held outside taxable territory is not covered under Finance Act, 1994. It is an undisputed fact of the present appeal that the Business Exhibition for which the appellant received services from the foreign agencies, were held outside the taxable territory. Resultantly, the Place of Provision of Services received by the appellant from the foreign service provider shall be outside the territory of India. Accordingly, appellant is not liable to pay service tax even under RCM. Mega Exemption Notification No. 25/2012 dated 20th June 2012 - HELD THAT:- The adjudicating authorities have miserably ignored the exemption notifications. From Section 66B also there is the tax liability for all services being not covered in the negative list. However, section itself clarifies any service shall not be liable to tax if same falls under any of the exemption notification. Hence the demand of service tax has wrongly been confirmed. Imposition of penalty and demand of interest - HELD THAT:- Since the service tax itself is not payable the question of charging any interest under provision of Section 75 of the Act does not at all arises - it is observed that it has been defence of the appellant, since beginning, that the appellant has bona fide belief that it is not liable to pay service tax even under reverse charge on the payment made to the foreign service provider. The said bona fide belief is held to be a reasonable cause for not discharging depositing the service tax. Resultantly, the appellant is held entitled for the benefit of Section 80 of the Finance Act, 1994. Support drawn from the decision of this Tribunal in Mumbai Bench in the case of Commissioner of Service Tax, Mumbai Vs. Gama Consultancy Pvt. Ltd. [ 2006 (8) TMI 32 - CESTAT, MUMBAI] . Accordingly, the penalty is also wrongly imposed upon the appellant. Conclusion - i) The place of provision rules dictate tax liability and that exemptions must be considered. ii) The show cause notice is invalid. iii) The appellant was not liable for service tax under RCM for exhibitions held abroad; exemptions applied. iv) Penalties and interest are unwarranted. Appeal allowed. 2025 (3) TMI 744 Levy of service tax on the one-time premium collected for the renting of immovable property - applicability of renting of shops, specifically considering the threshold exemption limit under the relevant notifications. HELD THAT:- The issue is squarely covered by the decision of Hon ble Allahabad High Court in the case of M/s Greater Noida Industrial Development Authority, Noida [ 2015 (4) TMI 1231 - ALLAHABAD HIGH COURT] wherein it was held that Letting of immovable property for consideration, which is determined on the basis of offers received from public at large by the assessee Greater Noida Industrial Development Authority is a service provided for consideration and not on payment of statutory fees, neither it is a statutory service performed by the assessee. It may be that the statute permits such activities of letting out of immovable property for augmenting its finances but the same cannot be termed as the service in public interest nor it is a mandatory or statutory functions of the Development Authority. Accordingly such activity of leasing do constitute a taxable service, in our opinion. As there are no merits in the submissions made by the appellant in respect of the levy of service tax on the one time premium or salami collected by them, the value of taxable services provided during each financial year for the period in the dispute would be more than the threshold exemption limit as provided by the Notification No 4/2007-ST dated 01.03.2007 as amended from time to time. Conclusion - Both the one-time premium and the rent are subject to service tax under the renting of immovable property, and the exemption limit applies to the combined total of these amounts. There are no merits in the appeal - appeal dismissed. 2025 (3) TMI 743 Rate of Interest on Refund - Rejection of appellant s prayer for higher rate of interest of 12% instead of the notified rate of 6% for deposits under section 35FF - nature of the amount deposited by the appellant during investigation towards service tax, which was appropriated by the adjudicating authority towards confirmed demand of service tax - interest on refund of the above amount as prescribed under section 11 BB under section 35FF of the Central Excise Act, 1944 as made applicable to Service Tax by virtue of section 80 of the Finance Act, 1994. How should an amount which has been deposited as service tax, but which subsequently became refundable, consequent upon an order of the tribunal or courts be treated. Will it be a service tax, pre-deposit or just a revenue deposit? - HELD THAT:- There are no separate provisions for refund of service tax under Chapter V of the Finance act 1994 [Finance Act]. The provisions of sections 11B, 11BB, 35F, 35FF have been made applicable to service tax by section 83 of the Finance act, 1994. Section 11B deals with refund of excise duty and when applied to service tax, it deals with refund of service tax. Section 11BB deals with interest on refund under section 11B - vidently, section 11B covers situations where the duty becomes refundable as a consequence of an order or judgment by the Tribunal or any Court which is precisely the case here. The submission of the appellant is that what it had paid was not duty at all because no duty was payable. To examine this submission, what needs to be examined what is the situation under which a duty becomes refundable. If the amount which is paid as duty is due, it will not be refundable at all. If it is not payable as duty, then it becomes refundable under section 11B. Who and what factors will determine if the amount paid as duty was payable or not? - HELD THAT:- This question was dealt with at length by the larger bench of the Supreme Court in ITC LTD. Vs. Commissioner Of Central Excise, Kolkata-Iv [ 2019 (9) TMI 802 - SUPREME COURT (LB)] . In this judgment, the Supreme Court dealt with a batch of appeals dealing with the question as to whether refund can be sanctioned so as to modify the assessment including self-assessment. The Supreme Court held that refund proceedings are in the nature of execution proceedings and refund cannot be sanctioned so as to modify the assessment including self-assessment. The person seeking modification of the assessment has to assail it in an appeal and refund can be sanctioned only after the assessment is modified. In this case, the SCN issued by the department proposing demand of service tax effectively modifying the assessment. This proposal was confirmed by the lower authorities. The amounts paid by the appellant during investigation were appropriated towards the service tax. Had there been no appeal or further orders by this Tribunal, the amount paid by the appellant would have been Service tax. The distinction between refund of pre-deposit made under section 35F and duty or service tax paid under section 11B is that the pre-deposit under section 35F can be a percentage of duty, fine or penalty. It must be deposited as a pre-condition for filing an appeal. If the pre-deposit is not made, there will be no right of appeal to the person aggrieved by the order. Section 11B, on the other hand, provides for refund of duty or service tax. If an amount is already paid as duty or service tax, it is reckoned while computing if any further amount needs to be paid to meet the mandatory requirement of pre-deposit under section 35F. Merely because such adjustment is made, the amount paid as service tax or fine or penalty does not become pre-deposit under section 35F. Conclusion - What was paid by the appellant was service tax as determined by the lower authorities in the adjudication proceedings. If there was no further order, nothing would have been refundable. However, the order of the adjudicating authority was modified by this Tribunal setting aside the demand. Therefore, the service tax became refundable as per section 11B and the relevant date for the purpose was the date of the order of the Tribunal. If there was any delay in sanctioning of the refund, interest must be paid as per section 11BB. Matter remanded to the Assistant Commissioner to examine and sanction refund under section 11B along with interest under section 11BB. It is made clear that the appellant had already made an application in the form of a letter which was processed and no new application is required. Only the amount of interest may be recalculated as per section 11BB instead of as per section 35FF. The impugned order is set aside and the matter is remanded to the Assistant Commissioner. 2025 (3) TMI 742 Failure to pay the appropriate service tax on Erection, Commissioning and Installation Service and Works Contract Service under Reverse Charge Mechanism as per the applicable provisions while providing transmission services as per Electricity Act, 2003 - demand for interest on Cenvat credit reversed by the appellant - invocation of Extended period of limitation - HELD THAT:- It is found that consistently this Bench has held that the appellant are entitled to benefit sought of tax being exempted. The matter is squarely covered with adverse decision to the revenue of this Tribunal as on date. In this regard, para 7 9 of the decision in GUJARAT ENERGY TRANSMISSION CORPORATION LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST, ANAND [ 2024 (2) TMI 1401 - CESTAT AHMEDABAD] where it was held that the entire period in the present appeal i.e. related to Notification No. 45/2010-ST, 11/2010-ST and also for the period when negative list under Section 66D was in force, it was held that service for transmission of electricity is not leviable to service tax. Therefore, the issue is no longer res-integra. Conclusion - i) The services related to the transmission of electricity are exempt from service tax. ii) The demand for interest for the longer period would not sustain. Appeal allowed. Central Excise 2025 (3) TMI 741 Clandestine removal - Time limitation for issuance of SCN - issuance of show cause notice much belatedly on 28.9.2020 after invoking the extended period despite starting the investigation in the month of May, 2016 itself - suppression of facts or not - discharge of burden of establishing beyond reasonable doubt the clandestine manufacture and removal of alleged assembled T.V. sets from the warehouse/godown at Bhiwandi - it was held by CESTAT that Once the issue has been settled by the Settlement Commission on an application filed by an assessee, the adjudicating authority in different proceedings for different show cause notice concerning same assessee cannot base its adjudication on the findings recorded by the Settlement Commission. Therefore, the Adjudicating Authority is not justified. HELD THAT:- There are no good reason to interfere with the impugned order dated 15-10-2024 passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zone Bench at Mumbai. Appeal dismissed. 2025 (3) TMI 740 Short payment of duty under provisions of Section 11A(1) of the Central Excise Act, 1944 alongwith interest as per provisions of Section 11AB of Central Excise Act 1944 - benefit of Notification No. 23/2003-CE dated 31.03.2003 claimed for the DTA clearances done - HELD THAT:- It is settled preposition in law that the exemption Notification need to be interpreted strictly according to wordings of the notification. Hon ble supreme Court has in case of Dilip Kumar Company [ 2018 (7) TMI 1826 - SUPREME COURT (LB)] observed that Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. The basic of the EOU scheme is for promotion of the exports. From para 6.8 of the Foreign Trade Policy reproduced above it is quite evident that the entire production of the EOU is to be exported and the DTA sales are permitted in certain specific conditions subject to the restrictions and conditions imposed. The Exemption N/N. 23/2003-CE which is in respect of the DTA sales made by an EOU needs to be considered in an strict manner in accordance with the scheme. The appellant soon after starting their EOU started clearance of the scrap/ goods in DTA. The intentions of the appellant by making such huge clearances of scrap and goods within a period of less than a year from the date of setting of EOU and starting export production and clearances is itself indicative of the ill intentions of the appellant. For the reason that the appellant has deposited the entire amount of duty along with the interest during the investigation and prior to issuance of Show Cause notice the proceedings in respect of the amounts so deposited could not have been initiated against the appellant and the same should have been closed as per law. Penalty has been imposed upon these appellants only on the basis of the statement of Appellant 2 without recording any act of omission or commission committed by the appellant 2, 3 and 4 leading to the holding that the goods were liable for confiscation. The penalty has been imposed only for their knowledge about the activities of Appellant 1, which evidently they would have acquired in normal course of business. Penalty under Rule 26 could not have been imposed for the reason of knowledge but could have been imposed only for positive acts of omission or commission, for which the goods were held liable for confiscation. In absence of any positive findings recorded in the impugned order to this effect, there are no merits in the penalties imposed under rule 26 on the employees of the Appellant. Conclusion - i) Demand of duty and interest is upheld and also the appropriation of the same against the amounts already deposited prior to the issuance of show cause notice. ii) Penalties imposed under Section 11AC of The Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002 and FTP is set aside. iii) Penalties imposed upon Appellant 2, Appellant 3 and appellant are set aside. Appeal allowed in part. 2025 (3) TMI 739 Failure to discharge monthly payment of duty under Rule 8(3A) of the Central Excise Rules, 2002 - HELD THAT:- The issue involved in this matter has been decided by the Hon ble Gujarat High Court in the case of Indsur Global Limited Vs. Union of India, 2014 (12) TMI 585 - GUJARAT HIGH COURT] and Sandley Industries Ltd. Vs. Union of India, [ 2015 (10) TMI 2455 - PUNJAB HARYANA HIGH COURT] wherein provision of Rule 8(3A) of Central Excise Rules, 2002 was held ultra virus. Therefore, no demand can be raised against the Appellant and the decision of the Hon ble Gujarat High Court in the case of Indsur Global Limited was taken up by the Revenue before the Hon ble Supreme Court in UNION OF INDIA ORS. VERSUS INDSUR GLOBAL LTD. [ 2024 (7) TMI 1559 - SC ORDER (LB)] , Larger Bench of the Supreme Court disposed of the SLP filed by the Revenue as not pressed. Under these circumstances, the decision of the Hon ble Gujarat High Court in the case of Indsur Global Ltd. is holding the field. Accordingly, relying on the decision of Hon ble Gujarat High Court in the case of the Indsur Global Ltd., the demand against the Appellant is not sustainable. Consequently, no penalty is imposable. Conclusion - The demand and penalties based on Rule 8(3A) were not enforceable, as the rule was declared ultra vires. The appeal filed by the Appellant is allowed. 2025 (3) TMI 738 Delay in adjudicating the Show Cause Notice (SCN) issued to the appellant - Clandestine manufacture and removal - demand based on the electricity consumption - HELD THAT:- The SCN was issued in this case on 3.12.2009 and the appellants filed replies on 1.1.2010 and 7.1.2010. Thereafter, the personal hearing was held nine years later on 29.1.2019 and in connection with the personal hearing, the appellant made some additional submissions dated 23.1.2019. The impugned order was passed on 22.2.2019 after the personal hearing. From these dates, it is evident that the appellants had been prompt and vigilant in replying to the SCN and no reason whatsoever is given in the impugned order for not adjudicating the matter immediately and to have waited for over nine years just to fix the personal hearing. The SCN was issued under section 11A in 2009 before the time limit for deciding the SCNs was introduced in 2011. Even if no limitation is prescribed under the law, then too the adjudicating has to be done within a reasonable period. Whether the limitation would also apply to cases where the SCN had already been issued? - HELD THAT:- The Statute of Limitation, being a procedural law, would apply to pending cases as well with the rider that if something had already expired under the previous law, the new limitation would not revive it. So long as the issue is alive, the new limitation would apply. The date of cause of action is irrelevant to the limitation - Even if the limitation is counted reckoning the date of amendment of section 11A on 8.4.2011, the date of the impugned order 22.2.2019 is clearly time barred and there is no explanation in the order for the inordinate delay. If we consider that there was no limitation at all, even then the delay of almost ten years is passing the order with no reasons whatsoever recorded for the delay cannot be sustained. Conclusion - The impugned order set aside due to the unreasonable delay in adjudication, granting consequential relief to the appellant. The impugned order cannot, therefore, be sustained and needs to be set aside on this ground alone regardless of the merits of the case - appeal allowed. CST, VAT & Sales Tax 2025 (3) TMI 737 Levy of tax under the provisions of Madhya Pradesh Commercial Tax Act, 1994, for declaration that petitioner is immune from levy of tax under the Act on supply of medicine in the course of activity of running its charitable hospital - supply of such medicine only in specified circumstances as a part of their main non business activity of running the charitable hospital can be said to be connected, incidental or ancillary to their main non business activity or not - HELD THAT:- Heavy reliance has been placed by the learned counsel for the respondents on the decision of the Apex Court in Cochin Port Trust [ 2015 (4) TMI 936 - SUPREME COURT] to contend that the definition of a dealer is an inclusive definition, whereby wide range of persons have been placed under the ambit of dealer. It includes persons involved in carrying on any business or trading activity and transactions are effected by them whether in the course of business or not. The definition of dealer is in consonance with legislative intent to place the persons engaged in activities of sale and trade which would not otherwise fall in the restricted definition of business. The said contention, in our opinion, is not acceptable for the reason that the definition of a dealer as given under the Kerala General Sales Tax Act 1963 is not pari materia with the definition of a dealer as given under the Act, 1994. The definition under the Kerala General Sales Tax Act, 1963 has specific clauses whereby those persons have also been included within the definition of a dealer who sell or transfer goods as specified therein whether in the course of business or not The words whether in the course of business or not as under the Kerela Act are wholly absent in the definition of a dealer as given under the M.P. Act. The definition under the M.P. Act defines a dealer to mean any person who carries on the business of buying, selling, supplying or distributing goods, etc. The only condition for attracting the definition of a dealer to a person is that he must be carrying on the business whereas under the Kerala General Sales Tax Act, 1963 that is not a precondition for bringing him within the definition of a dealer - The said judgment relied upon by the learned counsel for the respondents is distinguishable and is not applicable to the facts of the present case. In Bhailal Amin General Hospital [ 2016 (8) TMI 670 - GUJARAT HIGH COURT] the Gujarat High Court has also held that the petitioner therein being a charitable trust running and maintaining a public hospital while purchasing, selling and supplying medicines to patients in order to achieve objects was not engaged in business activity and therefore was not a dealer. Though it has been contended by the learned counsel for the respondents that the petitioner is earning profit from sale of medicines meaning thereby that it is carrying on completely independent business and its motive is to gain profit hence it has to be treated as a dealer under the Act, but in Aswini Hospital Private Limited and others [ 2019 (3) TMI 438 - KERALA HIGH COURT] it has been held that actually deriving profit from the sale of goods is by itself wholly insufficient for bringing a person within the definition of a dealer. The contention in this regard is hence liable to be rejected. Conclusion - The petitioners are exempted from levy of tax under the Act, 1994 on supply of medicine in the course of activity of running its charitable hospital. For the very same reasons as discussed above and applying the same principles, it is further held that the petitioner is exempted from levy of tax under the Act, 1994 in respect of the canteen run by it for the attendants of the patients in the course of activity of running its charitable hospital. Petition allowed. Indian Laws 2025 (3) TMI 736 Dishonour of cheque - vicarious liability of Petitioner, as a signatory to the cheques and a former director of the company - framing of notice under Section 251 CrPC against the Petitioner - HELD THAT:- The incontrovertible facts emerging from this case are that the Petitioner was serving as a whole-time director of Accused No. 1 at the time these cheques were issued, and was also one of the signatories of the cheques. Further, the Petitioner concededly resigned from Accused No. 1 subsequent to the issuance of the cheques. In fact, the Petitioner s resignation is just one day after the issuance of cheques dated 14th May, 2012. The Petitioner s argument that his resignation on 15th May 2012, prior to the presentation of the cheques, is sufficient for quashing the summoning order, is wholly untenable. In this regard, the Petitioner s reliance on Kamal Goyal is misplaced, as in that case, the petitioner had resigned from the accused company prior to the issuance of the cheques, and had also filed Form No. 32 with the Registrar of Companies prior to the issuance. Based on these facts, this Court had concluded that since the petitioner had resigned well in advance of the cheques being issued, he could not be held liable under Section 138 of the NI Act. However, in the present case, it is undisputed that the Petitioner s resignation occurred after the cheques in question were issued, with both his resignation and Form No. 32 bearing the date of 15th May, 2012, which is subsequent to the issuance of the cheques dated 12th May, 2012 and 14th May, 2012. The Petitioner, who is concededly the signatory of the disputed cheques, is liable for the actions of Accused No. 1 under Section 138 read with Section 141 of the NI Act. Conclusion - The Petitioner is admittedly a signatory to the cheques issued to the Respondent for the discharge of Accused No. 1 s liability. He was serving as a full-time director of Accused No. 1 at the time of issuance of the cheques in question; and resigned from the company only subsequent to the date of the cheques. There are specific averments regarding the Petitioner s role as the director of Accused No. 1 in the complaint lodged by the Respondent. Therefore, there is indeed sufficient basis to proceed with the prosecution of the Petitioner under Section 138 of the NI Act. The Court finds no infirmity in the impugned order - petition disposed off. 2025 (3) TMI 735 Initiation of proceedings by invoking the provisions of Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - financial institution as contemplated by Section 2(1)(m)(iv) of the Act of 2002 or not - HELD THAT:- Since the prayer is to grant a writ of Prohibition, the objection raised on behalf of the 3rd respondent of availability of an alternate remedy after the order is passed under Section 14 of the Act of 2002 does not warrant acceptance. If it is shown that the 3rd respondent is not a financial institution nor a secured creditor, as defined under the Act of 2002, it would not be in a position to invoke the jurisdiction under Section 14 of the Act of 2002 for seeking any assistance for taking possession of the secured asset. It would therefore require consideration as to whether the Chief Metropolitan Magistrate is empowered to entertain the application preferred by the 3rd respondent under Section 14 of the Act of 2002 and provide assistance as sought. Thus, a secured creditor means a financial institution , as defined by Section 2(1)(m)(iv) of the Act of 2002, which would thus require such financial institution to satisfy the requirements of the Notification dated 24th February 2020. As per the affidavit-in-reply filed by the Reserve Bank of India, the asset size of the 3rd respondent as on 31st March 2024 was Rs.16.30 crores which is less than the amount of Rs.100 crores as indicated in the Notification dated 24th February 2020 - for the purposes of the Act of 2002, the 3rd respondent is not a financial institution and hence it cannot be a secured creditor so as to invoke the provisions of Section 14 of the Act of 2002. Conclusion - As the 3rd respondent is not shown to be a financial institution for the purposes of invoking the provisions of Section 14 of the Act of 2002, the application filed on its behalf before the Chief Metropolitan Magistrate cannot be adjudicated on merits. A case therefore has been made out for a writ of Prohibition to be issued. Application disposed off.
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Newsletter: Where Service Meets Reader Approval.

TMI Tax Updates - e-Newsletter March 18, 2025

TMI Short Notes

1. Capital Gains: Exemption against Residential Property Sales and Reinvestment Incentives in Clause 82 of the Income Tax Bill, 2025 vs. Section 54 of the Income Tax Act, 1961

2. Capital Gains Taxation: The Role of Advance Payments in Clause 81 of the Income Tax Bill, 2025 vs. Section 51 of the Income-tax Act, 1961

3. Valuation - transfer of capital assets when the actual consideration is not ascertainable: Clause 80 of the Income Tax Bill, 2025 vs. Section 50D of the Income-tax Act, 1961

4. Full value of consideration for transfer of share other than quoted share for computation of Capital Gain - Clause 79 of the Income Tax Bill, 2025 vs Section 50CA of the Income-tax Act, 1961

Articles

1. GST on Resident Welfare Associations

2. Got paid in INR for your Exports?

3. GST Update- Karnataka High Court Quashes Single SCN Issued for Multiple Years

4. Our bank account is attached by the GST officer. How do I manage my operations now

5. Importance of ROC Filing for Private Limited Companies

6. HIGH COURTS DO NOT SUBSTITUTE THEMSELVES AS DECISION MAKING AUTHORITY WHILE EXERCISING JUDICAL REVIEW

7. Transfer Pricing and Special Valuation Branch – Two Separate Laws for a Common Goal

8. FSSAI and Reporting on Expired Food - FSSAI Advisory dtd. 16 Dec, 2024

9. Do Industrial Climate Investments Pay Off?

10. Forest Produce in India: A Game Changer for Locals

11. SWOT Analysis on the concept of making India a Green Superpower.

12. How Indian can make India a GREEN Super Power?

13. Junk Food: Is It Really Food?[Ironically it is not Food]

14. Multi Coloured Fryums/Papad Containing Prohibited Dyes/Synthetic Food Colors being sold throughout Indian Markets.

News

1. Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Uttar Pradesh

2. Delhi govt's revenue collections below projections, except for GST and VAT

3. Expenditure on salaries, pensions of employees to be highest in Himachal budget 2025-26

4. Visionless budget of directionless govt: Former Himachal CM Thakur

5. MEA constituted 'gender budget cell': Govt to parliamentary panel

6. Haryana budget proposes Rs 5,000 cr for Lado Lakshmi Yojana, authority to check drug abuse

7. Par panel for hike in MEA budget, says current allocation not reflective of India's growing stature

8. Haryana CM Saini presents Rs 2.05 lakh cr budget with aim to make state 'future capable'

9. CM Sukhu presents Rs 58,514-cr Budget with focus on tourism, rural development, green energy

10. Himachal Budget: Milk prices increased by Rs 6/litre, eco-tourism in focus

11. Rail budget no record breaking but failed budget; oppn slams Rail ministry in LS

12. Delhi's budget to focus on raising living standards, improving basic infra: CM Gupta

13. 'Ru' symbol in TN budget to show our determination for language policy: Stalin

14. Delhi CM receives feedback from farmers ahead of budget session, assures them of all help

15. Delhi CM receives feedback from farmers ahead of budget session, assures assistance

16. T'gana CM acknowledges debt burden, says state borrowed Rs 4,000 cr RBI loan to pay salaries

17. Net direct tax kitty rises 13 pc to Rs 21.26 lakh crore till Mar 16

18. Efforts to make ‘Viksit Bharat’ by 2047

19. Government e Marketplace Surpasses ₹5 Lakh Crore GMV Before FY 2024-25 Year-End

20. Govt says 28,818 insolvency applications involving Rs 10 lakh cr resolved under IBC

21. CCI Organises 10th Edition of National Conference on Economics of Competition Law

22. India - New Zealand announce launch of FTA negotiations

23. Ram Temple Trust pays Rs 400 crore in taxes over past five years

24. PM hails RBI for being selected for Digital Transformation Award

Circulars / Instructions / Orders

1. 04/2025 - dated 17-3-2025

2. TRADE CIRCULAR No. 05/2025 - dated 13-3-2025

3. TRADE CIRCULAR No. 06/2025 - dated 13-3-2025

4. Trade Circular No. 12T of 2025 - dated 4-3-2025

5. Trade Circular No. 11T of 2025 - dated 3-3-2025

6. Trade Circular No. 10T of 2025 - dated 28-2-2025

7. PUBLIC NOTICE NO. / 2025 - dated 14-3-2025

8. Public Notice. 05/2025 - dated 28-1-2025

Highlights / Catch Notes

GST

GST Jurisdictional Boundaries Redefined for Seven Key Locations Under Section 3 of CGST Act

Assessment Order Set Aside Due to Missing Document Identification Number (DIN) Requirement Under CBIC Circular No.128/47/2019-GST

Bus Services Paid Directly by Students Not Exempt from 5% GST Under SAC 9964 Transport Classification

Minor Clerical Error in GSTN Documentation Cannot Be Grounds for Denying Input Tax Credit Under Section 16(2)(aa)

GST Appeal Dismissed: 95-Day Delay Beyond Statutory Limit of One Month Cannot Be Condoned Under Section 107(4)

Tax Intimation Under Section 73(5) of GST Act Not Challengeable Before Show Cause Notice or Final Order

GST Registration Cancellation Cannot Be Applied Retrospectively Without Prior Notice and Proper Reasoning

Income Tax

Burden of Proof on Taxpayer: Seized Cash Properly Assessed as Unaccounted Money Under Section 69A and 115BBE

Tax Authorities Cannot Reject DTVSV Application When Matter Is Under Appeal, Must Process Discharge Certificate

ITAT Rejects Revenue's Claims of Sales Suppression and Excessive Commission Without Proper Evidence or Investigation

Diamond Trade Promotion Body Qualifies for Tax Exemption Under Sections 11 and 12 as Activities Not Commercial

Customs

CBIC Revises Tariff Values for Imported Oils, Precious Metals, and Areca Nuts Under Section 14(2) of Customs Act

Amendment of Shipping Bill for Drawback Claims on Re-exported Goods Permissible Under Section 149 of Customs Act

Export Obligation Discharge Under Amnesty Scheme Prevents Additional Penalties Under Customs Act Section 112(a)

Gold Chain of UAE Resident Wrongfully Seized While Traveling to India for Wedding Under Baggage Rules, 2016

Customs' Seizure of Wedding Guest's Gold Chain Overturned Under Baggage Rules 2016 for Non-Resident Travelers

Customs Must Release Detained Gold Ornaments Due to Procedural Violations Including Failure to Issue Timely Show Cause Notice

Customs Broker's License Revocation Overturned: Verification Limited to Document Authenticity, Not Content Accuracy Under Regulation 10(n)

Indian Laws

Director's Resignation After Cheque Issuance Cannot Escape Liability Under Sections 138 and 141 of NI Act

TMI Tax Updates - e-Newsletter
March 18, 2025