TMI Tax Updates - e-Newsletter
March 28, 2025

Case Laws in this Newsletter:

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

TMI Short Notes

1. Extension of Time for Reinvesting Capital Gain, original asset is compulsorily acquired, and compensation is delay Clause 89 of the Income Tax Bill, 2025 vs. Section 54H of the Income-tax Act, 1961

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2. Capital gain Tax Relief in relocation of industrial undertakings from urban areas to SEZ area in Clause 88 of Income Tax Bill, 2025 vs. Section 54GA of Income Tax Act, 1961

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3. Capital gain Tax Relief in relocation of industrial undertakings from urban areas to non-urban in Clause 87 of Income Tax Bill, 2025 vs. Section 54G of Income Tax Act, 1961

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4. Encourage investment in residential property by offering tax exemption on capital gains in Clause 86 of the Income Tax Bill, 2025 vs. Section 54F of Income Tax Act, 1961

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5. Capital gain Exemption through Investment in the Certain Bonds in Clause 85 of Income Tax Bill, 2025 Vs. Section 54EC of Income Tax Act, 1961

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6. Treatment of capital gains arising on compulsory acquisition of lands and buildings in Clause 84 of the Income Tax Bill, 2025 vs. Section 54D of the Income Tax Act, 1961

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Articles

1. RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

2. SCN cannot be issued without considering the reply to pre-consultation notice

   By: Bimal jain

3. SEIZURE OF BANK LOCKERS AND GOLD

   By: DR.MARIAPPAN GOVINDARAJAN

4. Understanding Income Tax and the Role of Tax Consultancy

   By: leo girl

5. How to File ROC Returns Online for a Pvt. Ltd Company

   By: Ishita Ramani

6. Export Promotion Schemes [Part 2]

   By: YAGAY andSUN

7. Export incentives and export promotion schemes in India[Part - 1]

   By: YAGAY andSUN

8. AEO (Authorized Economic Operator) and the Manufacturing and Other Operations in Warehouse Scheme - Booster for Indian Manufacturing and Export Sectors.

   By: YAGAY andSUN

9. KEY Management Personnel - Complete Information under Company Law Act, 2013 as amended from time to time.

   By: YAGAY andSUN

10. Export of Winter Wears from India

   By: YAGAY andSUN

11. Export of Inner Garments from India

   By: YAGAY andSUN

12. Export of Hosiery Items from India

   By: YAGAY andSUN

13. Agroforestry: A Divine Auspicious Boon for Healing Climate Change.

   By: YAGAY andSUN

News

1. Opposition in RS targets govt on US tariffs, seeks higher PM-KISAN amount

2. Cash recovery at judge's house example of failed policy of demonetisation, says TMC MP

3. Bengal Guv gives assent to three bills passed by assembly in budget session

4. Goa budget earmarks Rs 2,100 cr for education; internship must for graduation students

5. Goa budget planned without considering people's aspirations: Oppn

6. 'Plethora of lies', 'disappointing': Opposition slams Punjab budget

7. Paradigm shift to 'Rangla Punjab': CM Mann on Punjab budget

8. Policies in India made for 'Bombay club', says RJD MP

9. Europe lashes out over Trump auto tariffs and economic threat to both continents

10. I-T deptt offices to remain open on March 29-31: CBDT

11. Sourcex India 2025 inaugurated at the Yashobhoomi Convention Centre, New Delhi

12. Innovation is key to India’s future: Shri Piyush Goyal at National Intellectual Property Awards 2024

13. Trump places 25 pc tariff on imported autos, expecting to raise USD 100 bn in tax revenues

Notifications

GST - States

1. 01/2025-State Tax (Rate) - dated 15-2-2025 - Himachal Pradesh SGST

Amendment in Notification No. 1/2017-State Tax (Rate), dated the 30th June, 2017

2. G.O. Ms. No. 38 - dated 17-3-2025 - Puducherry SGST

Seeks to bring in force provisions of various Section of Puducherry Goods and Services Tax (Amendment) Act, 2025

3. G.O. Ms. No. 37 - dated 17-3-2025 - Puducherry SGST

Seeks to bring in force provisions of various rule of Puducherry Goods and Services Tax (Amendment) Rules, 2024

4. G.O. Ms. No. 36 - dated 17-3-2025 - Puducherry SGST

Notification for waive late fees for those RTPs who had failed to furnish FORM GSTR-9C along with FORM GSTR-9 but subsequently filed FORM GSTR-9C on or before 31.03.2025.

5. G.O. Ms. No. 35 - dated 17-3-2025 - Puducherry SGST

Puducherry Goods and Services Tax (Amendment) Rules, 2025

Income Tax

6. 22/2025 - dated 27-3-2025 - IT

Income-tax (Seventh Amendment) Rules, 2025 - Regarding TDS Return (Statement)

Circulars / Instructions / Orders

DGFT

1. 52/2024-2025 - dated 27-3-2025

Amendment in Appendix-4J of Handbook of Procedures (HBP-2023) - Export Obligation Period for Specified Inputs with Pre-import Condition under Advance Authorizations

Highlights / Catch Notes

GST

• Tax Assessment Order Invalidated for Missing Officer Signature and Document Identification Number Under CGST Act

  Case-Laws - HC : The HC set aside the impugned assessment order due to two fatal defects: absence of the assessing officer's signature and omission of the Document Identification Number (DIN). Relying on A.V. Bhanoji Row (2023), the court affirmed that an officer's signature on assessment orders is mandatory and cannot be rectified under Sections 160 & 169 of CGST Act, 2017. Additionally, following M/s. Cluster Enterprises (2024) and CBIC Circular No.128/47/2019-GST, the court held that omission of DIN number invalidates such proceedings. These procedural deficiencies rendered the assessment order legally untenable, resulting in its invalidation.
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• GST Registration Cancellation Quashed Due to Non-Speaking Order and Failure to Follow FORM GST REG-19 Requirements

  Case-Laws - HC : The HC quashed the GST registration cancellation order, finding it procedurally deficient as a non-speaking order that failed to conform with FORM GST REG-19 requirements. Despite the petitioner's delayed approach (filing after approximately one year), the Court determined that the order's statutory non-compliance outweighed concerns about delay. The Court remanded the matter to the show cause notice stage, providing the petitioner two options: either submit a reply demonstrating why registration should not be cancelled under Rule 22(2) of CGST Rules read with Section 29(2)(c) of CGST Act, or furnish all pending returns with full payment of tax dues, applicable interest, late fees and penalties.
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• Petitioner Wins Refund Claim for Unutilized Input Tax Credit Under Section 54(3) of CGST Act Due to Inverted Tax Structure

  Case-Laws - HC : The HC allowed the petition, quashing the impugned order and directing respondents to process the petitioner's refund claims for unutilized Input Tax Credit under Section 54(3) of CGST Act due to inverted tax structure. The court relied on its previous ruling in the petitioner's identical case, where it had held that refund claims deserved to be allowed. Finding this precedent directly applicable to the present facts, the HC ordered respondents to make payment of the refund together with applicable interest within six weeks from receipt of the order.
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• GST Registration Cancellation Quashed: Retrospective Effect Invalid and Revocation Rejection Without Hearing Violates Section 30

  Case-Laws - HC : The HC quashed the cancellation of GST registration and rejection of revocation application, finding that respondents failed to provide valid justification for the cancellation. The court noted that the original cancellation order improperly imposed retrospective effect from August 3, 2017, despite no such indication in the original Show Cause Notice. Furthermore, the rejection of the revocation application without granting the petitioner a hearing violated Section 30 of the CGST Act and principles of natural justice. The court set aside the impugned SCN, order-in-appeal, original cancellation order, and the order rejecting the revocation application.
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• GST Appeal Dismissed: Time-Barred Filing Under Section 100(2) for Rent from Government SWCBH

  Case-Laws - AAAR : The AAAR rejected the appellant's appeal against a ruling concerning GST on rent received from Govt SWCBH as time-barred. Though the appellant claimed they never received communication of the original order, evidence showed the ruling was emailed on 12.02.2024 to the appellant's email address (provided in their Form GST ARA-01). Per Section 100(2) of CGST Act, appeals must be filed within 30 days, with provision for extension up to another 30 days for sufficient cause. Since the order was communicated on 12.02.2024, the appeal should have been filed by 13.03.2024. Without valid justification for the 22-day delay, the appeal was dismissed.
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• Setting Aside Partial AAR Ruling on GST for Land Development: AAAR Remands Case for Complete Adjudication Under Section 101

  Case-Laws - AAAR : The AAAR determined that the appeal was not maintainable as the AAR had failed to address three questions in its original ruling. Since the questions regarding GST on developed plot sales, development services to landowners, transfer of development rights, valuation of services, and timing of tax payments were interlinked, the AAAR could not effectively decide on the partial ruling. Despite Section 101 of CGST Act, 2017 lacking explicit remand provisions, the AAAR set aside the lower authority's order and remanded the matter to the AAR for fresh consideration to ensure complete adjudication of all interrelated questions.
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• ITC Must Be Reversed on Inputs Used for Goods Later Destroyed in Fire Under Section 17(5) of SGST Act

  Case-Laws - AAAR : The AAAR held that a registered person must reverse Input Tax Credit (ITC) availed on inputs used to manufacture steel nails that were subsequently destroyed in a fire accident. While Section 16 of SGST Act, 2017 generally allows ITC on inputs used in furtherance of business, Section 17(5) specifically prohibits ITC on goods that are "lost, stolen, destroyed or written off." The AAAR emphasized that Section 17(5) contains a non-obstante clause giving it overriding effect over Section 16(1) and Section 18(1). Therefore, despite the appellant's arguments regarding Section 16(1), the AAAR upheld the original Advance Ruling, requiring the appellant to reverse ITC on inputs used in manufacturing the destroyed finished goods.
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• Electricity and Water Charges by Lessor to Lessee Form Part of Renting Services Under Section 8(a), Attracting GST

  Case-Laws - AAAR : The AAAR determined that electricity and water charges collected by a lessor from a lessee constitute part of the principal supply of "renting of immovable property" under Section 8(a) of the CGST Act, not a separate supply. The lessor cannot be considered a pure agent as there is no sub-meter in the lessee's name and no authorization for payment. The exemption for electricity transmission/distribution services under Notification No. 12/2017-CT(R) does not apply as the lessor is neither a Distribution nor Transmission Licensee under the Electricity Act, 2003. Consequently, GST is applicable on the entire consideration including electricity and water charges at the rate applicable to renting services.
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• GST Registration Cancellation Overturned as Authorities Failed to Establish Rule 21 Violations or Improper Registration

  Case-Laws - HC : The HC set aside the cancellation of petitioner's GST registration, finding that authorities failed to follow proper procedural requirements. The appellate authority had rejected the appeal solely because the HSN/SAC code disclosure in registration applications suggested two registrations covered the same business. However, the court determined that authorities did not establish any violations under Rule 21 of the GST Act, which prescribes specific conditions for registration cancellation. The revenue department also failed to demonstrate that petitioner obtained registration by breaching conditions under Section 29(2) read with Rule 21. The court directed immediate restoration of the petitioner's GST registration upon presentation of the order.
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• Input Tax Credit Cannot Be Denied When Seller's GST Registration Was Valid During Transaction Despite Later Cancellation

  Case-Laws - HC : The HC held that the petitioner was entitled to Input Tax Credit (ITC) despite the seller's GST registration being canceled retrospectively. Since the transaction occurred on 06.12.2018 when the seller was validly registered, and the cancellation took effect from 29.01.2020, no adverse inference could be drawn against the petitioner. The Court emphasized that under Sections 16 and 74 of the GST Act and Rule 36 of GST Rules, ITC eligibility depends on conditions fulfilled at the time of transaction. The authorities failed to verify GSTR-1A, GSTR-3B, and tax deposits by the seller. The petition was allowed, and the matter remanded for fresh consideration with a reasoned order after hearing all stakeholders.
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• GST Ex-Parte Order Set Aside: Taxpayers Must Receive Proper Notice Under Section 73 Before Assessment

  Case-Laws - HC : The HC set aside an ex-parte order issued without proper service of show cause notice, finding it violated principles of natural justice. Following precedents established in Ola Fleet Technologies and Akriti Food Industry cases, the Court determined that taxpayers facing liability must receive opportunity to present their defense. Rather than prolonging litigation, the HC directed that the impugned order dated 30.12.2023 should be treated as notice under Section 73 of the GST Act, 2017, allowing the petitioner to file objections and submit relevant documentation to the assessing officer for fresh consideration. The petition was accordingly disposed of with directions for the assessing authority to pass a fresh order after considering the petitioner's submissions.
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• Refund of Unutilized ITC Cannot Be Denied Merely Because Payments Were Remitted to Different Branch's Bank Account

  Case-Laws - HC : The HC quashed an order denying refund of unutilized Input Tax Credit for FY 2022-23 and Q1 of FY 2023-24. The respondent had rejected the refund claim because payments for exported services by petitioner's Delhi branch office were remitted to a bank account in Bangalore. Relying on Cable and Wireless Global India Private Limited, the Court held that mapping a Bangalore bank account after receiving remittances validates that services were exported by the Delhi branch office. The Court found the respondent's objection overly technical and unsustainable, ruling that remittance to a Bangalore bank account does not preclude refund eligibility. The petitioner's claim was remanded for reconsideration.
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• GST Summons Under Section 70 Doesn't Create Tax Liability or Initiate Proceedings Against Taxpayer

  Case-Laws - HC : The HC addressed a challenge to a summons issued under s.70 of the GST Act seeking information from the petitioner. The court clarified that s.74 of the CGST Act applies to tax evasion cases involving willful misstatement or fraud, permitting penalties up to 100% of unpaid tax, with reduced penalties available at various stages of admission and payment. The court determined that the 2nd respondent's communication aligned with s.74 provisions and did not create liability or initiate proceedings against the petitioner. The petition was closed, preserving the petitioner's right to oppose any future proceedings for tax short payment, evasion, or wrongful ITC availment.
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• Writ Application Dismissed Due to Defective Affidavit Where Deponent Failed to Establish Proper Authorization

  Case-Laws - HC : The HC dismissed a writ application challenging seizure of goods and vehicle due to fatal procedural defects in the supporting affidavit. The deponent, Gopal Yadav, failed to establish proper authorization to represent all petitioners, claiming only to be the manager-cum-authorized representative of petitioner no.3. The affidavit lacked mandatory declarations that the deponent had reviewed the statements in the application or had them explained to him. These deficiencies rendered the affidavit legally insufficient under Patna HC rules. Finding the writ application incompetent due to improper representation, the court dismissed it as withdrawn.
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• Blocking of Electronic Credit Ledger under Rule 86A quashed due to lack of reasoning and natural justice violation

  Case-Laws - HC : The HC quashed the order blocking petitioner's Electronic Credit Ledger under Rule 86A of CGST/SGST Rules. The court found that the impugned order lacked independent reasoning, instead relying on enforcement authority reports which constituted "borrowed satisfaction." Additionally, no pre-decisional hearing was granted to the petitioner before blocking the ECL, violating principles of natural justice. The order merely stated the registered person was "found to be a bill trader and involved in issuance/availment in fake invoices" without providing substantive reasoning. The court determined these procedural and substantive defects rendered the blocking order legally untenable and allowed the petition.
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• Refund of Unutilized Input Tax Credit on SEZ Supplies Cannot Be Denied for Procedural Non-Compliance

  Case-Laws - HC : The HC quashed orders rejecting the petitioner's claim for refund of unutilized Input Tax Credit on supplies made to SEZ units without payment of tax. The Court held that once the respondents admitted the petitioner's entitlement to refund, the Court had jurisdiction to direct its grant despite procedural non-compliance with Circular No. 125/44/2019. The Court emphasized that while procedural requirements are important, they cannot extinguish substantive rights of the assessee under tax laws. Allowing the Department to retain excess tax would constitute unjust enrichment contrary to Article 265 of the Constitution. The Court ruled that procedure must remain subservient to substantive justice, particularly in genuine refund cases where the assessee's rights are established.
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• Input Tax Credit Cannot Be Denied for GSTR-3B Returns Filed Late When Section 16(5) Amendment Provides New Cut-off Date

  Case-Laws - HC : The HC quashed an order disallowing Input Tax Credit (ITC) claimed by the petitioner in GSTR-3B returns filed beyond the due date under WBSGST/CGST Act, 2017. The Court held that the subsequent amendment to Section 16(5) had regularized the petitioner's returns for tax period April 2018 to March 2019 by providing a new cut-off date, and therefore the petitioner could not be denied the benefit of this amendment. The petitioner was permitted to apply before the appropriate authority by making a rectification application. The petition was accordingly disposed of.
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• Government Services to Telangana State Not Exempt Under Entry 6 of Notification 12/2017-CT Rate

  Case-Laws - AAAR : The AAAR upheld the AAR's ruling that services provided by the appellant to the Telangana State Government are not exempt under GST. Entry 6 of Notification 12/2017 exempts services provided by the Government, not to the Government. Additionally, services provided by the appellant on behalf of the Government to business entities fall under the exception to this entry and are therefore taxable. The appeal was filed within the prescribed time limit (filed on 1.11.2021, within 30 days of AAR communication on 4.10.2021). The appellant's representatives confirmed during the hearing that GST has been paid on these services since inception, indicating no practical dispute exists.
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• ITC Denied on Employee Transportation Services Under Section 17(5) as No Statutory Obligation Exists

  Case-Laws - AAAR : The AAAR dismissed the appeal regarding eligibility to claim ITC on GST paid for employee transportation services. The authority ruled that under Section 17(5) of CGST Act, ITC is available only when provision of such services is statutorily obligatory for employers. Since the appellant provided transportation merely as a convenience measure for employees at a remote factory location without any statutory obligation, ITC was disallowed. Additionally, per CBIC Circular No. 172/04/2022-GST, transportation services provided as contractual perquisites fall under Schedule III and are non-taxable. Consequently, ITC on inward services used for providing such non-taxable services cannot be availed.
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• Aluminium Composite Panels Classified Under HSN 7606 with 18% GST Rate, Not Under HSN 3920 or 7610

  Case-Laws - AAAR : The AAAR determined that Aluminium Composite Panels/Sheets are properly classified under HSN 7606, not under HSN 3920 or HSN 7610. Applying Rule 3(b) of the General Rules for Interpretation of Tariff, the Central Member concluded that the goods fall under Chapter 76 since aluminum gives the essential character to the ACPs. The contending Heading 7610 was ruled out as the subject goods are not aluminum structures or parts of structures. Following CESTAT precedent in Commissioner of Customs (Imports) Chennai Vs ICP India Pvt. Ltd., the panels were determined to be classifiable under Heading 7606 with an applicable GST rate of 18%.
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Income Tax

• CBDT Expands Safe Harbour Rules: Lithium Ion Batteries Now Included as Core Auto Components and extended the threshold limit for certain cases.

  Notifications : The CBDT's Income-tax (Sixth Amendment) Rules, 2025 expands safe harbour provisions for international transactions. The definition of "core auto components" under Rule 10TA now includes lithium ion batteries for electric/hybrid vehicles. Rule 10TD increases the monetary threshold for eligible international transactions from two crore to three crore rupees across multiple categories. The applicability period for safe harbour provisions has been extended to include assessment years 2025-26 and 2026-27. Rule 10TE now specifies that applications under Rule 10TD are valid for one assessment year. These amendments aim to modernize transfer pricing regulations to accommodate emerging technologies and provide greater taxpayer certainty.
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• Income Tax Return Filed After Delay Caused by Department Cannot Be Treated as "Non-Est" Under Section 139(1)

  Case-Laws - HC : The HC held that the Tribunal erred in treating the ITR filed under Section 139(1) for AY 2002-2003 as "non-est." The Court found that the delay in filing the return was attributable to the department, which only supplied photocopies of seized materials on 05.07.2004, nearly two years after the search conducted on 04.09.2002. The Tribunal failed to examine the entire circumstances and improperly relied on the "non-est" finding, resulting in double taxation of the appellant through both regular and block assessment proceedings. The HC ruled that the financial consequences of the search, delayed release of materials, and subsequent return filing should be considered on their merits rather than based on the previous "non-est" observation. Appeal allowed.
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• Court Upholds Faceless Assessment Order, Rules Section 144A Redundant When Section 144B Procedural Safeguards Apply

  Case-Laws - HC : The HC dismissed a writ petition challenging an assessment order under s.143(3) read with s.144B of the Income Tax Act, 1961. The petitioner claimed violation of natural justice due to non-consideration of their application under s.144A. The Court held that with the incorporation of s.144B, which provides adequate procedural safeguards for faceless assessment, the role of the Jurisdictional Joint Commissioner under s.144A has become redundant for s.144B assessments. Section 144A applies only where assessment continues with the Jurisdictional Assessing Officer. The Court granted liberty to file a statutory appeal before the Appellate Commissioner within 30 days.
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• TPO Must Redo ALP Adjustment Using Resale Price Method, Recognizing Both Manufacturing and Trading Segments

  Case-Laws - AT : The ITAT remanded three issues to the AO/TPO for reconsideration. Regarding transfer pricing, the Tribunal held that the TPO misunderstood the assessee's business structure and incorrectly rejected the Resale Price Method (RPM) despite its prior acceptance by Revenue for the trading segment. The AO/TPO must redo the ALP adjustment using RPM, recognizing the assessee's dual manufacturing and trading segments. On the Section 37 disallowance of 10% of total expenditure, the AO must verify additional evidence submitted by the assessee. Concerning the Section 69C addition based solely on CBEC export-import data, the ITAT directed the AO to collect comprehensive information from the assessee regarding imports and reconcile with customs duty paid, rather than relying exclusively on CBEC data.
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• Approved Resolution Plan Under IBC Section 31(1) Assigns NIL Value to Tax Dues, Binding on Income Tax Department

  Case-Laws - AT : The ITAT ruled that once a resolution plan is approved by the Adjudicating Authority under IBC Section 31(1), it binds all stakeholders including government authorities. In this case, the resolution plan assigned NIL value to income tax dues, which was approved by NCLT and thus binding on the Income Tax Department. The Tribunal held that the National Faceless Appeal Centre should have quashed the impugned assessments rather than dismissing appeals as non-maintainable. The ITAT emphasized that post-resolution, the corporate debtor begins with a "clean slate" under new management. Accordingly, the Tribunal sustained the grounds of appeal and allowed the appeals.
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• Income Tax Reassessment Quashed: AO Failed to Apply Amended Provisions and Issue Mandatory Section 143(2) Notice

  Case-Laws - AT : The ITAT quashed the reassessment proceedings under s.147 as legally untenable. The AO erroneously applied old provisions despite issuing notice on 01.04.2021 when amended provisions became effective. The assessment was completed hastily without proper investigation, relying merely on STR information from the investigation wing without sharing it with the assessee or considering submitted information. Additionally, the AO failed to issue mandatory notice under s.143(2) for both assessment years, rendering the proceedings void ab initio. The Tribunal clarified that s.292BB cannot cure complete absence of notice (as distinguished from service defects), following Laxman Das Khandelwal. Both procedural failures resulted in the assessment being set aside as jurisdictionally defective.
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• Surrender of Tenancy Rights Qualifies as Capital Asset Transfer Under Section 2(47), Cost of Acquisition Determined (47)

  Case-Laws - AT : The ITAT held that the appellant's surrender of tenancy rights constituted a transfer of capital asset under section 2(47). The Tribunal determined that the tenancy right was acquired in 1954 through payment of a non-refundable security deposit of Rs. 1,080, which represented the cost of acquisition under section 55(2)(a)(i). Since the asset was acquired before April 1, 2001, the appellant was entitled to adopt either the fair market value as on that date or the actual cost as the acquisition cost, with indexation benefits under section 48. Based on the valuation certified by a registered government valuer, the transaction resulted in a net capital loss. The ITAT deleted the addition made by the AO, allowing the appellant's grounds of appeal.
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• Gratuity Fund Contributions to LIC Qualify for Deduction Under Section 40A(7)(b) Despite Section 43B Overlap

  Case-Laws - HC : The HC ruled in favor of the assessee regarding deductions under Section 40A(7)(b) for contributions made to an approved gratuity fund with LIC. The Court determined that Section 40A(7) overrides Section 43B when stipulations under clauses (a) and (b) are satisfied. Documentation established that the assessee's payments were made to a properly approved LIC gratuity fund, as evidenced by the original trust deed effective from 1.1.1978 and approved by the CIT on 23.05.1979. A significant variation approved on 15.3.1988 extended coverage to subsidiaries/associates of Chemicals and Plastics Limited, effectively bringing the assessee under the approved fund's protection. The Department had previously accepted identical documentation and granted similar claims for both previous and subsequent assessment years.
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• Agricultural Lands Beyond 8km From Municipal Limits Not Capital Assets Under Section 2(14); NABARD Bonds Investment Timing Crucial for 54EC Exemption

  Case-Laws - HC : The HC partially allowed the appeal, ruling on two key issues. First, it confirmed that lands in Egathur and Navalur Villages qualified as agricultural lands under s.2(14) of the Act, being situated beyond 8km from municipal limits, thus exempt from being considered capital assets. The HC held that "Municipality" encompasses all local bodies regardless of specific nomenclature. Second, regarding NABARD bonds investment for s.54EC deduction, the HC reversed the Tribunal's finding, determining that the assessee could claim exemption only to the extent of Rs. 8,55,54,167/- out of Rs. 10 Crores, as funds from a property sold on 13.02.2006 were not available for investment made on 26.11.2005.
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• Refund Adjustment Against Outstanding Demands Quashed for Failure to Issue Mandatory Notice Under Section 245

  Case-Laws - HC : The HC set aside the Revenue's adjustment of refunds due to the petitioner for AY 2020-21 against outstanding demands for AYs 2016-17, 2017-18, and 2018-19. The Court held that the adjustment was unsustainable as the Revenue failed to issue prior notice under Section 245 of the Act, which is mandatory. While acknowledging that refund adjustments against outstanding demands may constitute coercive measures in certain cases, the Court emphasized that appellate authorities could specify limitations to stay orders. The HC directed the Revenue to pay the determined refund amount to the petitioner with applicable interest within eight weeks.
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• Late Filing of Form 10-ID Is Procedural Lapse, Cannot Deny Section 115BAB Benefits Already Claimed in Tax Return

  Case-Laws - HC : The HC quashed the denial of benefits under Section 115BAB, ruling that filing Form 10-ID after the due date was a procedural lapse that should not invalidate the substantive benefit already claimed in the tax return. The court held that once a benefit is claimed in the income tax return, filing a separate form is merely procedural and should not be denied if sufficient cause for delay exists. The issuance of multiple CBDT Circulars (6/2022, 19/2023, and 17/2024) demonstrated widespread difficulties with timely filing of Forms 10-IC and 10-ID. The court directed authorities to accept the petitioner's Form 10-ID filed on 12.09.2022 as legal and valid despite the delay.
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• Delay in Filing Tax Return Due to COVID-19 and Late TDS Deposit Condoned Under Section 119(2)(b), Allowing Refund Claim

  Case-Laws - HC : The HC quashed the order under s.119(2)(b) and condoned the delay in filing income tax return for AY 2020-21, allowing the petitioner to claim refund belatedly. The court recognized genuine hardship faced by the non-resident petitioner who was prevented from filing returns due to COVID-19 travel restrictions and late deposit of TDS by the property purchaser (M/s. Ashutosh Builders) on 11.06.2022. The petitioner had already furnished income computation with long-term capital gain details in response to the tax authority's notice. The HC determined these circumstances constituted sufficient grounds for condonation of delay under the Income Tax Act provisions.
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• Income Tax Assessment Order Quashed: AO Failed to Consider Reply to Show Cause Notice Under Section 144

  Case-Laws - HC : The HC quashed the Best Judgment Assessment order under section 144, finding it legally untenable as the Assessing Officer failed to properly consider the petitioner's voluminous reply to the show cause notice. While the AO claimed to have found the reply unsatisfactory, no reasons were provided for this conclusion. Following Supreme Court precedent in M/S SHUKLA & BROTHERS, the matter was remanded for a fresh de novo assessment. The AO must provide the petitioner with a hearing opportunity if requested, consider their submissions, and issue a reasoned order within 12 weeks of receiving the court's decision.
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• GST Collected Separately on Invoices Should Not Be Included in Gross Receipts Under Section 44BB Presumptive Income Calculation

  Case-Laws - AT : The ITAT ruled that GST collected as a separate line item in invoices, being a statutory levy, should not be included in gross receipts when computing presumptive income under Section 44BB of the Act. Following precedents in Orient Overseas Container Line Limited and Seadrill International Ltd, the Tribunal held that GST stands outside the computation of gross receipts for Section 44BB purposes. The Assessing Officer was directed to exclude GST amounts while determining the assessee's gross receipts for presumptive income calculation. The assessee's ground of appeal on this issue was allowed, establishing that statutory levies separately identified in invoices are not part of the computational base for presumptive taxation.
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Customs

• Customs Case Remanded: Misdeclared Imports Under EPCG License Require Fresh Review After Appellant Obtained Subsequent License

  Case-Laws - AT : CESTAT set aside and remanded a case involving misdeclaration of imported goods where excess items (one headstock and 12 drums) were discovered that weren't covered by the appellant's original EPCG license. The Tribunal noted that the appellant subsequently obtained a license covering the excess goods and produced an EODC dated 09.01.2024 evidencing fulfillment of export obligations. While acknowledging the contravention of Customs Act 1962 through incorrect declarations, CESTAT emphasized that the Original Authority failed to verify and consider the subsequent license. Following Atul Commodities precedent, the Tribunal directed de novo adjudication to properly verify the validity of the subsequent EPCG license and EODC certificate.
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• Value Re-determination for Imported Goods Meant for Re-export Unjustified Under Section 68 of Customs Act

  Case-Laws - AT : CESTAT held that the re-determination of value for imported goods intended for re-export was unjustified. The tribunal found that both original and appellate authorities failed to properly apply the statutory framework governing customs clearance procedures. The adjudicating authorities erroneously applied Section 47 of Customs Act to warehoused goods, disregarding that once goods are warehoused, Section 68 becomes the operative provision for clearance. The tribunal identified a systemic failure in customs assessment procedures, noting that the Customs Valuation Rules, 2007 and Section 14 of Customs Act were improperly applied to goods not intended for home consumption. The impugned order was set aside and the appeal allowed.
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• Export of Pan Masala and Gutkha Cannot Be Classified as "Prohibited Goods" for Non-Declaration of Input Characteristics

  Case-Laws - AT : CESTAT ruled that pan masala and gutkha exports could not be classified as "prohibited goods" merely for non-declaration of technical characteristics of inputs on shipping bills as required under DFIA scheme. The Tribunal found that Revenue failed to establish any export prohibition for these products or prove that exported goods were "resultant products" of duty-free imported inputs. Since conditions allegedly violated pertained to imports rather than exports, and appellants claimed no duty exemption on exports, confiscation was unjustified. The Tribunal emphasized that non-compliance with DFIA conditions might affect duty-free import eligibility but cannot render freely exportable goods as prohibited. Consequently, both the confiscation order and penalties under Sec. 113(1) were set aside, and the appeal was allowed.
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• Confiscation of Gold Bangles Upheld for Export Diversion Under Section 113(k), Redemption Fine Reduced to Rs.15 Lakh

  Case-Laws - AT : CESTAT upheld confiscation of 1194 gold bangles (54096 gms valued at Rs.16,10,43,792/-) under Section 113(k) of Customs Act for diversion of export consignment. The Tribunal reduced redemption fine to Rs.15,00,000/- under Section 125, maintaining penalties under Section 114(iii) against the exporters. Penalties under Section 114AA were set aside as documents were not false or fabricated. The Tribunal noted investigative lapses including missing CCTV footage and retracted statements that weren't properly examined per Section 138B(b). The seized gold jewelry was ordered to be released to one appellant upon payment of redemption fine and penalties. Proceedings against other noticees were deemed unsustainable.
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Corporate Law

• Section 252(3) Appeal Dismissed: Court Rejects Company's Name Restoration Due to Excessive Procedural Delays

  Case-Laws - SC : The SC dismissed an appeal concerning restoration of a company's name to the Register under Section 252(3) of the Companies Act, 2013. Despite the appellant's valid argument that time spent pursuing a review petition should be excluded, the Court noted significant delays at every procedural stage: four months in filing the restoration application, five months in filing the review petition after NCLT dismissal, and over one year in appealing to NCLAT after the review petition was rejected. The SC upheld NCLAT's refusal to condone the delay, noting Section 421 of the Companies Act only permits condonation for delays up to forty-five days, and the appellant provided no justification for the extensive delays.
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State GST

• Virtual Hearings Mandatory for All RGST/CGST Act 2017 Proceedings; In-Person Appearances Require Additional Commissioner's Approval Under Section 168

  Circulars : The Rajasthan Commercial Tax Department has mandated virtual hearings for all proceedings under RGST/CGST Act 2017 and other taxation laws, effective immediately. Under Section 168 of RGST Act, in-person appearances require prior approval from the Additional Commissioner upon written request. Taxpayers will receive hearing links via registered email, and representatives must submit authorization documents in advance. Documents must be submitted digitally, with physical submissions only through designated district-level facilitation desks with proper attestation. The order establishes protocols for technical issues, decorum requirements, and document handling procedures. All virtual proceedings and electronically submitted documents are deemed valid under Section 145 of RGST/CGST Act read with Section 4 of the IT Act, 2000.
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PMLA

• Mahadev Online Book Promoter's Challenge to Non-Bailable Warrant Under PMLA Section 50 Dismissed

  Case-Laws - HC : The HC dismissed a petition challenging a non-bailable warrant issued against a Dubai resident involved in the Mahadev Online Book operation. The Court rejected preliminary objections regarding petition maintainability through a power of attorney holder. The Court upheld the Special Court's jurisdiction to issue the warrant under Section 70 of CrPC after the petitioner failed to respond to summons issued under Section 50 of PMLA. Evidence indicated the petitioner was a main promoter of the illegal operation and had obtained citizenship in Vanuatu, which lacks an extradition treaty with India, demonstrating intent to evade investigation. The Court affirmed that PMLA provisions apply to any person involved with proceeds of crime, not just those named in scheduled offenses.
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• 86-year-old granted bail in PMLA case due to infirmity under Section 45(1) despite medical board finding him not "sick"

  Case-Laws - HC : The HC granted regular bail to an 86-year-old petitioner in a PMLA case, finding him "infirm" under the proviso to Section 45(1). While not deemed "sick" as per the AIIMS medical board's opinion that his ailments could be treated in jail, the Court determined his cognitive impairment, pseudodementia, recurrent dizziness, history of falls, and need for constant monitoring qualified him as "infirm." This exempted him from meeting the twin test requirements of Section 45(1). The Court also noted he satisfied the triple test for bail (no flight risk, witness influence, or evidence tampering) and considered the inevitable trial delay given the case's complexity (17 accused, 66 companies, 121 witnesses, and over 77,000 pages of documents). Bail was granted subject to conditions.
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• Money Laundering Case Collapses After Predicate Offense Under Section 447 of Companies Act Quashed for Retrospective Application

  Case-Laws - HC : The HC held that PMLA proceedings against the applicant were not maintainable following the quashment of the predicate offense under Section 447 of the Companies Act, 2013. The court analyzed that "proceeds of crime" under PMLA must have a direct nexus with a scheduled offense, as established in Vijay Madanlal Choudhary. Since the coordinate bench had previously determined that the prosecution under Section 447 was an impermissible retrospective application of law and deemed it malicious, the foundation for PMLA proceedings was removed. Without a valid predicate offense establishing criminal activity related to a scheduled offense, the PMLA case could not stand. Petition allowed.
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SEBI

• Research Analyst Penalized for Unsigned Reports, Poor Record-Keeping, and Mixing Business Ventures with Research Activities

  Case-Laws - AT : The AT upheld penalties against a Research Analyst for multiple regulatory violations. The appellant failed to sign and date research reports, maintain proper records of recommendations made on WhatsApp/Telegram channels, and establish independence between research activities and other business ventures. The tribunal rejected arguments that WhatsApp/Telegram publications did not constitute "public appearances" requiring disclosure. The AT found the appellant violated arm's length requirements by operating multiple business divisions (Chartered Accountancy, Spiritual Teaching, and News Broadcasting) while functioning as a Research Analyst. Penalties under Sections 15A(c), 15EB, and 15HA totaling 15 lakhs were confirmed for misleading information and multiple regulatory breaches.
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VAT

• Dealers discontinuing business before GST implementation cannot carry forward unutilized Input Tax Credit for unsold inventory

  Case-Laws - HC : The HC held that registered dealers who discontinued business on June 30, 2017, with closing stock of unsold goods, were not entitled to carry forward unutilized Input Tax Credit (ITC) accrued under the UP VAT Act into the GST regime. Per s.13(6) of the VAT Act and r.21(1)(y) of the UP VAT Rules, dealers with closing stock must debit unutilized ITC upon business discontinuation. The Court determined that ITC could only be claimed upon fulfilling statutory conditions, including the actual sale of goods. Since the dealers possessed unsold inventory and had effectively discontinued business by operation of law, they were required to debit their ITC rather than carry it forward. The Tribunal's judgment allowing the ITC benefit was set aside and all revisions were allowed.
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Service Tax

• Service Tax Refund on Mobilization Advances for Unrendered Services Not Subject to Section 11B Limitation Period

  Case-Laws - AT : The CESTAT ruled that refund claims for service tax paid on mobilization advances for services never rendered are not subject to the limitation period under section 11B of the Central Excise Act, 1944. Unlike excise duty, which becomes payable upon goods clearance, service tax liability arises only when a taxable service is actually rendered and consideration transferred. Since no taxable service existed in this case, the payment constituted a deposit made under mistaken belief rather than tax collected. The Tribunal distinguished this from tax payments requiring section 11B scrutiny, restoring the original refund sanction granted by the lower authority. Appeal allowed.
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• Inordinate Delay in Tax Adjudication Proceedings Violates Natural Justice, Warrants Quashing of SCNs Under Section 73

  Case-Laws - HC : The HC quashed multiple Show Cause Notices (SCNs) and an order issued by tax authorities due to inordinate delay in concluding adjudication proceedings. Citing Vos Technologies India, the court held that while SS73 of the Finance Act empowers authorities to issue SCNs for unpaid or short-paid service tax, SS73(4B) imposes a duty to determine tax liability within six months to one year where possible. The court rejected the notion that "where it is possible to do so" grants unlimited time, emphasizing that matters with financial liabilities cannot remain unresolved for years without justification. The absence of any explanation for the protracted delay violated principles of natural justice, warranting the quashing of proceedings.
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• Customized Software with Source Code Modifications Constitutes Sale of Goods, Not Taxable Service

  Case-Laws - AT : CESTAT ruled that the appellant's software solution, customized to meet clients' specific business requirements with modifications to source code, constituted a sale of goods rather than a service. The transaction involved transferring full control and possession of the customized software to clients with exclusive usage rights, while intellectual property remained with the appellant. The license fee collected was correctly subjected to VAT by the appellant and cannot simultaneously be liable for service tax, as these taxes are mutually exclusive. Following Quick Heal Technologies v. CST, Delhi [2020], the Tribunal held that the transaction constituted a sale of goods rather than provision of services. The appeal was allowed, setting aside the service tax demand, interest, and penalties.
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Central Excise

• Call Center Services Qualify as Input Services Under Rule 2(l) of Cenvat Credit Rules for Brand Building and Sales Enhancement

  Case-Laws - AT : CESTAT held that call center services qualify as input services under Rule 2(l) of Cenvat Credit Rules, 2004, as they contribute to brand building and ultimately lead to sale of manufactured products. The Tribunal determined these services have sufficient nexus with manufacturing activity since sales represent the logical conclusion of manufacturing, and efforts to boost sales influence manufacturing. The case involved interpretational issues of complex legal provisions rather than willful misstatement or suppression of facts. Accordingly, the Tribunal set aside the demand for Cenvat credit, associated penalties, and interest charges. The appeal was allowed, with CESTAT concluding that services enhancing brand image and product value maintain sufficient connection to output goods to qualify for Cenvat credit.
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Case Laws:

• GST

• 2025 (3) TMI 1336
  Challenge to assessment order - the proceeding does not contain the signature of the assessing officer and also DIN number, on the impugned assessment order - HELD THAT:- The effect of the absence of the signature, on an assessment order was earlier considered by this Court, in the case of A.V. Bhanoji Row Vs. The Assistant Commissioner (ST), [ 2023 (2) TMI 1224 - ANDHRA PRADESH HIGH COURT] . A Division Bench of this Court, had held that the signature, on the assessment order, cannot be dispensed with and that the provisions of Sections-160 169 of the Central Goods and Service Tax Act, 2017, would not rectify such a defect. 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. In view of the aforesaid judgments and the circular issued by the C.B.I.C., the non-mention of a DIN number and absence of the signature of the assessing officer, in the impugned assessment order would have to be set aside. Petition disposed off.

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• 2025 (3) TMI 1335
  Cancellation of GST Registration under the Central Goods and Services Tax - it is contended that manner in which the GST Registration has been cancelled is arbitrary and the impugned Order of cancellation has been passed without due application of mind - violation of principles of natural justice - HELD THAT:- On perusal of the impugned Order, it is evidently clear that the impugned Order is not in conformity with the procedure prescribed in FORM GST REG-19. A speaking order is one which expressly states the reasons for the decision. In other words, a speaking order speaks for itself by assigning the reasons behind the conclusion. If an order is passed without giving a reason by the concerned authority, then the order is a non-speaking one. Non-speaking order is one which does not provide a clear reason for its decision. The fact that the petitioner-assessee did not submit any Reply to the Show Cause Notice dated 15.01.2023 or did not appear before the Proper Officer, when he was called upon to do so, does not absolve the Proper Officer from the obligation of passing a speaking order as any order which brings adverse consequence to a person cannot be a mere paper formality. A submission has been made that the writ petition has been preferred with delay as the petitioner has filed the writ petition in February, 2025, that is, after about one year from the order of cancellation of registration. Although the petitioner has not approached the Court immediately after the order of cancellation of registration, this Court is of the considered view that when the extent of vulnerability of the order of cancellation of registration is due to not meeting the statutory prescription of recording reasons is pitted against the delayed approach, the vulnerability of the order of cancellation of registration would far outweigh the delayed approach because of its likely adverse affect on a registered person like the petitioner. It is open for the petitioner-assessee to submit a Reply to the Show Cause Notice dated 15.01.2023 showing reason[s] as to why the GST Registration should not be cancelled in terms of sub-rule [2] of Rule 22 of the CGST Rules read with Section 29 [2] [c] of the CGST Act. In the alternative, the petitioner-assessee, at the time of and/or instead of replying to the Show Cause Notice served under sub-rule [1] of Rule 22 of the CGST Rules, can furnish all the pending returns and make full payment of the tax dues along with the applicable interest, late fee and penalty, if any. It is, therefore, observed that it would be open for the petitioner-assessee to avail either of the two options. Conclusion - The impugned cancellation order quashed due to its procedural deficiencies and lack of reasoning. The matterias reverted to the stage of issuance of the show cause notice, allowing the petitioner to respond or comply with the requirements for revocation of cancellation. Petition allowed by way of remand.

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• 2025 (3) TMI 1334
  Cancellation of GST registration of petiiton without due application of mind - violation of princuples of natural justice - HELD THAT:- On perusal of the impugned Order, it is evidently clear that the impugned Order is not in conformity with the procedure prescribed in FORM GST REG-19. A speaking order is one which expressly states the reasons for the decision. In other words, a speaking order speaks for itself by assigning the reasons behind the conclusion. If an order is passed without giving a reason by the concerned authority, then the order is a non-speaking one. Non-speaking order is one which does not provide a clear reason for its decision. The fact that the petitioner-assessee did not submit any Reply to the Show Cause Notice dated 14.11.2023 or did not appear before the Proper Officer, when he was called upon to do so, does not absolve the Proper Officer from the obligation of passing a speaking order as any order which brings adverse consequence to a person cannot be a mere paper formality. A submission has been made that the writ petition has been preferred with delay as the petitioner has filed the writ petition in February, 2025, that is, after about one year from the order of cancellation of registration dated 05.02.2024. Although the petitioner has not approached the Court immediately after the order of cancellation of registration, this Court is of the considered view that when the extent of vulnerability of the order of cancellation of registration is due to not meeting the statutory prescription of recording reasons is pitted against the delayed approach, the vulnerability of the order of cancellation of registration would far outweigh the delayed approach because of its likely adverse affect on a registered person like the petitioner. It is open for the petitioner-assessee to submit a Reply to the Show Cause Notice dated 14.11.2023 showing reason[s] as to why the GST Registration should not be cancelled in terms of sub-rule [2] of Rule 22 of the CGST Rules read with Section 29 [2] [c] of the CGST Act. In the alternative, the petitioner-assessee, at the time of and/or instead of replying to the Show Cause Notice served under sub-rule [1] of Rule 22 of the CGST Rules, can furnish all the pending returns and make full payment of the tax dues along with the applicable interest, late fee and penalty, if any. It is, therefore, observed that it would be open for the petitioner-assessee to avail either of the two options. This Court, for ends of justice, deems it just and proper to grant a period of one month from today to the petitioner to avail either of the two permissible options. Conclusion - The impugned cancellation order quashed due to its procedural deficiencies and lack of reasoning. The matterias reverted to the stage of issuance of the show cause notice, allowing the petitioner to respond or comply with the requirements for revocation of cancellation. Petition allowed by way of remand.

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• 2025 (3) TMI 1333
  Cancellation of GST Registration under the Central Goods and Services Tax - it is contended that manner in which the GST Registration has been cancelled is arbitrary and the impugned Order of cancellation has been passed without due application of mind - violation of principles of natural justice - HELD THAT:- On perusal of the impugned Order, it is evidently clear that the impugned Order is not in conformity with the procedure prescribed in FORM GST REG-19. A speaking order is one which expressly states the reasons for the decision. In other words, a speaking order speaks for itself by assigning the reasons behind the conclusion. If an order is passed without giving a reason by the concerned authority, then the order is a non-speaking one. Non-speaking order is one which does not provide a clear reason for its decision. The fact that the petitioner-assessee did not submit any Reply to the Show Cause Notice dated 11.10.2023 or did not appear before the Proper Officer, when he was called upon to do so, does not absolve the Proper Officer from the obligation of passing a speaking order as any order which brings adverse consequence to a person cannot be a mere paper formality. A submission has been made that the writ petition has been preferred with delay as the petitioner has filed the writ petition in February, 2025, that is, after about one year from the order of cancellation of registration. Although the petitioner has not approached the Court immediately after the order of cancellation of registration, this Court is of the considered view that when the extent of vulnerability of the order of cancellation of registration is due to not meeting the statutory prescription of recording reasons is pitted against the delayed approach, the vulnerability of the order of cancellation of registration would far outweigh the delayed approach because of its likely adverse affect on a registered person like the petitioner. It is open for the petitioner-assessee to submit a Reply to the Show Cause Notice dated 11.10.2023 showing reason[s] as to why the GST Registration should not be cancelled in terms of sub-rule [2] of Rule 22 of the CGST Rules read with Section 29 [2] [c] of the CGST Act. In the alternative, the petitioner-assessee, at the time of and/or instead of replying to the Show Cause Notice served under sub-rule [1] of Rule 22 of the CGST Rules, can furnish all the pending returns and make full payment of the tax dues along with the applicable interest, late fee and penalty, if any. It is, therefore, observed that it would be open for the petitioner-assessee to avail either of the two options. Conclusion - The impugned cancellation order quashed due to its procedural deficiencies and lack of reasoning. The matterias reverted to the stage of issuance of the show cause notice, allowing the petitioner to respond or comply with the requirements for revocation of cancellation. Petition allowed by way of remand.

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• 2025 (3) TMI 1332
  Refund of unutilized Input Tax Credit (ITC) under Section 54(3) of the Central Goods and Services Tax (CGST) Act, 2017, due to an inverted tax structure - Works contract or supply of services - HELD THAT:- A perusal of the material on record will indicate that in relation to the very same petitioner, under identical circumstances in M/S. ITD CEMINDIA JV VERSUS THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS) 5 BANGALORE, THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (LGSTO), BANGALORE [ 2024 (8) TMI 1538 - KARNATAKA HIGH COURT] held that the impugned orders passed by the respondents deserve to be set aside and the refund claim of the petitioner deserves to be allowed with a direction to the respondents to make the refund together with applicable interest within a stipulated timeframe. The aforesaid order passed by this Court in relation to the very same petitioner is directly and squarely applicable to the facts of the present case also and consequently the present writ petition deserves to be allowed and disposed of in terms of the aforesaid order. Conclusion - The respondents are directed to consider the subject refund claims / applications of the petitioner and make payment together with applicable interest to the petitioner within a period of six weeks from the date of receipt of a copy of this order. The impugne dorder is quashed - petition allowed.

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• 2025 (3) TMI 1331
  Cancellation of GST registration - respondents have failed to assign any valid reason justifying the action of cancellation - violation of principles of natural justice - HELD THAT:- As is manifest from the original order of cancellation of registration as well as the order in terms of which the application for revocation has come to be rejected, the respondents have failed to assign any valid reason justifying the action of cancellation. The orders are thus liable to be quashed and set aside on this short score alone. Additionally, it is noted that the original order of cancelling the registration of writ petitioner was ordained to come into effect from a retrospective date of 03 August 2017. The original SCN did not bear any intent to cancel the registration of the petitioner with retrospective effect. Conclusion - The rejection of the revocation application without a hearing violated Section 30 of the CGST Act and principles of natural justice, leading to the quashing of the order. The writ petition is allowed and the impugned SCN dated 02 February 2023, the order-in-appeal dated 04 October 2024, the original order for cancellation of registration dated 02 February 2023 as well as the order dated 14 May 2024 in terms of which the application for revocation has come to be rejected, are hereby quashed and set aside.

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• 2025 (3) TMI 1330
  Levy of GST - rent received by the appellant from the Government Social Welfare College Boys Hostel (Govt SWCBH) - time limitation for filing appeal - HELD THAT:- This appeal has been filed with a delay of 22 days. It is contended by the appellant that the order impugned herein was not received by them by mail, message or any type of communication. However, it is observed that the said order was communicated to the appellant by email on 12.02.2024, inter-alia, at the email id [email protected]. It is further observed that in the Application Form for Advance Ruling (Form GST ARA-01), the same email id has been mentioned. Hence, it is incorrect of the appellant to submit that they had not received the Order of AAR, in time, leading to delay. In terms of proviso to sub-section (2) of Section 100 of the CGST Act, 2017, the Appellate Authority may, if it is satisfied that the appellant was prevented by a sufficient cause from presenting the appeal within the normal limitation period of 30 days, allow it to be presented within a further period not exceeding 30 days. In the present case, only cause for delay is stated to be that the appellant came to know about the order after 30 days time limit had expired. However, the Order dated 09.02.2024 was communicated to the appellant herein on 12.02.2024 and as such the appeal should have been filed by 13.03.2024. No valid reasons for delay beyond 13.03.2024 are forthcoming. Hence, the present appeal is liable to be rejected as time barred. The appeal is rejected as barred by limitation.

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• 2025 (3) TMI 1329
  Levy of GST - sale of developed plots by applicant to various customers after development - development of plots service provided to the land owners - transfer of development rights by the land owner in consideration of land development services received - determination of value of supply of such services for payment of GST - GST on Transfer of development rights - If tax is payable on TDRs on RCM basis and on development service, what is the time of payment and what is the applicable Notification. HELD THAT:- In the instant case, no ruling has been passed by the AAR in respect of three questions. As such advance ruling against which the appeal is filed is incomplete. Further, the questions raised for advance ruling are interlinked. Therefore, appeal in respect of rulings on answered questions cannot also be effectively decided unless the rulings in respect of remaining questions are available. In view of this, this appeal is not maintainable. Though Section 101 of CGST Act, 2017 does not contain any provision to remand the matter, considering the fact that the lower authority has not passed a ruling on some of the questions raised by the appellant, it is constrained to remand the matter back to the lower authority to pronounce a ruling to meet the ends of the justice. The order of the lower authority is set aside and the matter is remanded to the Advance Ruling Authority for consideration afresh.

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• 2025 (3) TMI 1328
  Requirement to reverse Input Tax Credit availed on inputs consumed in the manufacture of finished goods viz. Steel Nails that were got destroyed in fire accident - HELD THAT:- On a combined reading of Section 2 and Section 16 of SGST Act, 2017, it can be construed that the definition of input tax is very wide and a registered person is entitled to take input tax credit on inputs, input services and capital goods if the same are used by him in course or furtherance of his business or the registered person has an intention to use such inputs, input services or capital goods in the course or furtherance of his business at the time of procurement of such goods/ services. On a plain reading of sub-section (5) of Section 17 of the Act, it is clear that ITC shall not be available in respect of goods lost, stolen, destroyed or written off. Further, the use of non- obstante clause makes it evident that the provisions of Section 17 (5) have an overriding effect over the provisions of Section 16 (1) Section 18 (1). As such, the averments made by the appellant with reference to Section 16 (1) of the CGST Act, 2017 do not merit consideration. Conclusion - The appellant to reverse the ITC availed on inputs used in the manufacture of the destroyed finished goods. The impugned Order of Advance Ruling Authority is upheld.

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• 2025 (3) TMI 1317
  Dismissal of appeal on the basis that the Appeal has not been signed by the authorized signatory and the Appellant (the Petitioner herein) has not submitted a Board Resolution appointing the said person as the authorized signatory to sign the Appeals, documents or any other proof of her being the authorized signatory of the Appellant - HELD THAT:- If the Appellate Authority wanted to verify the authority of Ms. Gracie Fernandes, it was his duty to call upon the Appellant, if he had any doubts with regard to the authority. In fact from the record we find that there is a Board Resolution authorizing Ms. Gracie Fernandes, inter alia to institute, depose, defend, compromise, appear, verify, sign, affirm and/or present papers, applications, petitions, affidavits and other documents under the applicable laws before the High Court, Supreme Court, Goods and Services Tax Authorities and Appellate Tribunal, Advance Ruling Authorities of the Goods and Services Tax etc. This Board Resolution can be found at Exhibit-H to the Petition. When all this was brought to the notice of the learned advocate appearing on behalf of the Respondent, he fairly stated that the impugned order could be quashed and set aside and the matter remanded for a denovo consideration. Conclusion - The Appellate Authority must issue a reasoned order addressing all submissions and provide a list of any relied-upon judgments or orders, including unreported ones, to the petitioner. The impugned order dated 30th July 2024 is set aside - petition allowed by way of remand.

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• 2025 (3) TMI 1316
  Challenge to SCN concerning the same tax period and subject matter u/s 73 of the KGST Act - HELD THAT:- As rightly contended by learned counsel for the petitioner in relation to very same tax period 2019-2020 and the same subject matter in respect of the very same petitioner, both 4th respondent - The Commercial Tax Officer, Ramanagara as well as the 5th respondent - the Commercial Tax Officer(Audit), Channapatna have passed similar orders, under identical circumstances against the very same petitioner under Section 73(9) of the KGST Act, which is impermissible in law. It is also relevant to state that in view of the specific submission made on behalf of the petitioner that he intends to avail the benefits of Amnesty Scheme as contemplated under Section 128 (A) of the KGST Act, it is deemed appropriate to set aside both the impugned orders at Annexure - A dated 27.06.2024 and Annexure -B dated 31.08.2024 and remit the matter back to the 4th respondent - The Commercial Tax Officer, Ramanagara for re-consideration afresh, in accordance with law and by issuing certain directions. Conclusion - The petitioner is granted the liberty to pursue the Amnesty Scheme under Section 128(A) of the KGST Act, with the 3rd respondent directed to facilitate this upon the passing of appropriate orders by the 4th respondent. Matter is remitted back to the 4th respondent - The Commercial Tax Officer, Ramanagara for reconsideration afresh in accordance with law - petition allowed by way of remand.

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• 2025 (3) TMI 1315
  Suspension of petitioner s registration under the UPGST Act, 2017 on January 3, 2024 w.e.f. January 3, 2024 - HELD THAT:- It does merit acceptance that the petitioner was not obligated to visit the GST portal to receive the show cause notices that may have been issued to the petitioner for 2017-18 through e-mode, preceding the adjudication order dated August 20, 2024 passed in pursuance thereto. No useful purpose may be served in keeping the petition pending or calling counter affidavit at this stage or to relegate the present petitioner to the forum of alternative remedy. Since essential requirement of rules of natural justice has remained to be fulfilled, the order dated August 20, 2024 set aside - petition disposed off.

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• 2025 (3) TMI 1314
  Cancellation of the petitioner s GST registration - Violation of Sections 25 and 29 of the GST Act - HELD THAT:- In the present case, the appellate authority has rejected the appeal on the ground that while applying for registration, HSN / SAC code has been disclosed, therefore, business undertaken by the petitioner under two different registrations are one and same cannot be bifurcated into two business verticals. Further, the record shows that the conditions have been prescribed under Rule 21 for cancellation of registration, which have not been followed in the impugned order but only on the basis of reflection of HSN / SAC code in the registration application of the petitioner under the GST, the registration has been cancelled. In other words, the grounds mentioned under Rule 21 of the Act have not been tested by the respondent authorities, which empowers the cancellation of registration. Further, it is not the case of the revenue that the petitioner has obtained the registration by committing any breach of the conditions mentioned under Section 29 (2) read with Rule 21 of the GST Act as well as the Rules. Conclusion - The cancellation of registration cannot be upheld, due to the failure to meet the procedural and substantive requirements of the GST Act. The respondent authorities is directed to restore the petitioner s GST registration immediately upon presentation of the order. Petition allowed.

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• 2025 (3) TMI 1313
  Entitlement to Input tax credit (ITC) under the UPGST/CGST Act for transactions conducted with a seller whose registration was subsequently canceled - cancellation of the seller s registration with retrospective effect impacts the petitioner s entitlement to ITC for transactions conducted prior to the cancellation or not - HELD THAT:- The perusal of the contents of Section 16 of the GST Act, 2017 shows that the input tax credit can be claimed only on the fulfilment of conditions mentioned therein. It also clarifies that no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both - The contents of Section 74 of the GST Act, 2017 provides for determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any wilful misstatement or suppression of fact - Perusal of the contents of Rule 36 of the GST Rules, 2017 provides that the required documents for claiming input tax credit should be made available and the same may be reflected in GSTR-3B. From Sections 16 74 of the GST Act, 2017 as well as Rule 36 of the GST Rules, 2017, it is clear that the provisions as provided, certain benefit of input tax credit to the registered person should be provided on the fulfilment of conditions as well as documents required to be provided therein. In the case in hand, the proceedings were initiated against the petitioner under Section 74 of the GST Act, 2017 as the registration of the seller dealer has been cancelled on subsequent date i.e. with effect from 29.01.2020, thus, the date of transaction was admittedly took place prior to it i.e. on 06.12.2018 - Further, the record shows that the GST authorities are empowered to cancel the registration from the date of inception of proceedings, but the authorities in their wisdom cancelled the registration of the seller on a subsequent date i.e. with effect from 29.01.2020. Once the seller was registered at the time of the transaction in question, no adverse inference can be drawn against the petitioner. Further, the record shows that the registration of the selling dealer was cancelled retrospectively i.e. w.e.f. 29.01.2020 and not from its inception which goes to show that the transaction between petitioner and seller was registered and having valid registration in his favour - That under the GST regime, all details are available in the GST Portal and therefore, authorities ought to have been verified the same as to whether the filing of GSTR-1A and GSTR-3B, how much tax has been deposited by the seller, but the authorities have failed to do so. Conclusion - Once the seller was registered at the time of the transaction in question, no adverse inference can be drawn against the petitioner. The denial of credit to petitioner cannot be sustained. The matter is remanded to the authority concerned for deciding afresh by passing a reasoned and speaking order, after hearing all the stakeholder - petition allowed by way of remand.

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• 2025 (3) TMI 1312
  Seeking grant of Regular bail - offence punishable under section 132(1) of the Central Goods and Service Tax Act (CGST), 2017 under Clause(a) or Clause (b) or Clause(c) or Clause (d) of the said section 132(5) - iron scrap and miscellaneous scrap have been transported by way of vehicle using fake Invoices - HELD THAT:- After reading of Section 69 of CGST Act, 2017 there must be reason to believe that a person has committed an offence and from perusal of Section 132 of the Act, it is clear that there must be reason to believe of tax evasion or condition as specified in section 132 for arresting of such person under the Act - On perusal of Section 132 of CGST Act, it is clear that the punishment for the alleged offence is up to five years. Considering the facts and circumstances of the case, this Court is inclined to enlarge the petitioner on bail. The above named petitioner is directed to be released on bail subject to fulfilment of conditions imposed. Bail application allowed.

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• 2025 (3) TMI 1311
  Suspension of GST registration of the Petitioner - SCN alleged that the Petitioner does not conduct its business from the declared place of business - HELD THAT:- The Petitioner s difficulty is that the Petitioner is unable to access the GST portal so as to enable the Petitioner to file a reply. Let the GST portal access be given to the Petitioner for at least a period of 30 days to enable the Petitioner to file a reply to the impugned Show Cause Notice.

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• 2025 (3) TMI 1310
  Challenge to order passed u/s 73 of UP/CGST Act, 2017 for the Tax Period July 2017 to march 2018 - HELD THAT:- In the present case it is clear from the record that though show cause notice was issued when the petitioner was having registration under GST Act, by the time the order was passed under Section 73, the petitioner was not having U.P. GST registration. Further, it is noted that the petitioner did not receive notice of hearing, therefore, he did not appear before the order impugned was passed. In light of the same, the order should have been served upon the petitioner either by way of email or by way of registered post. The impugned order is quashed and set aside - Petition disposed off.

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• 2025 (3) TMI 1309
  Validity of simultaneous/dual/parallel proceedings in relation to the same year 2018-19 - HELD THAT:- As rightly contended by learned counsel for the petitioner, respondent No. 1-Assistant Commissioner and respondent No. 2-Deputy Commissioner have ventured to initiate simultaneous/dual/parallel proceedings in relation to the same year 2018-19 by putting forth the very same contentions against the petitioner, which is clearly impermissible in law and consequently, the impugned orders passed by respondent Nos. 1 and 2 deserves to be quashed by reserving liberty in favour of the respondent No. 2 Deputy Commissioner to proceed further in accordance with law. Matter is remitted back to respondent No. 2 for reconsideration afresh in accordance with law to the stage of replying to Show Cause Notice dated 19.12.2023 issued by respondent No. 2 to the petitioner - Petition allowed by way of remand.

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• 2025 (3) TMI 1308
  Principles of natural justice - Service of SCN and Demand Orders - case of the Petitioner is that although the SCNs were uploaded on the portal, they were placed under the category of Additional Notices and Orders, rendering them not directly visible - HELD THAT:- The Department concedes that the portal works differently from the Department s side and the tax payer s side. Insofar as the Petitioner is concerned, the Department was not being able to view them on the Notices tab. The Petitioner, in support of its case, has placed on record the print out from the portal which shows that the same was viewable only on Additional notice and orders Tab and hence, may have been missed by the Petitioner. The impugned demand orders dated 23rd April, 2024 and 5th December, 2023 are accordingly set aside. In response to show cause notices dated 04th December, 2023 and 23th September, 2023, the Petitioner shall file its replies within thirty days. The hearing notices shall now not be merely uploaded on the portal but shall also be e-mailed to the Petitioner and upon the hearing notice being received, the Petitioner would appear before the Department and make its submissions. The show cause notices shall be adjudicated in accordance with law. Petition disposed off.

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• 2025 (3) TMI 1307
  Service of SCN for the assessment year 2019-2020 - stand of the Petitioner is that the Petitioner came to know of the impugned order dated 24th August, 2024 only in January, 2025 - HELD THAT:- Instead of permitting the matter to proceed in default, since the Petitioner has categorically stated that it did not receive the notice, the Petitioner is permitted to file an appeal within two weeks challenging the impugned order dated 24th August, 2024 in the unique facts and circumstances of this Court. It is made clear that if the appeal is not filed within two weeks and there is any delay, then the condonation of delay shall be considered by the appropriate appellate authority in accordance with law. Petition disposed off.

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• 2025 (3) TMI 1306
  Invocation of extra ordinary jurisdiction of this Court under Article 226 of the Constitution - ex-parte order - neither alleged show cause notice was ever brought to the knowledge of the petitioner, nor service of the same was physically ever effected upon petitioner - principles of natural justice - HELD THAT:- The division bench in the Ola Fleet Technologies Pvt. Ltd. v. State of U.P. and Others [ 2024 (7) TMI 1543 - ALLAHABAD HIGH COURT ] was of the view that party under liability of tax in an ex parte order needs at-least an opportunity to put up his defense by submitting papers which may have led assessing officer to uphold the claim for exemption from tax liability. The division bench accordingly, instead of keeping the matter pending disposed off the same with a direction that impugned order may be taken as notice to enable the petitioner to submit his reply and thereafter assessing officer may have to pass a fresh order. Recently, in the matter of M/s Akriti Food Industry LLP v. State of U.p. and 3 Others, [ 2025 (1) TMI 772 - ALLAHABAD HIGH COURT ], the Court has set aside the identical order. It is directed that the order passed by the assessing officer dated 30.12.2023 shall be taken to be notice within the meaning of Section 73 of the GST Act, 2017 to enable the petitioner to file his objections and place its documents before assessing officer/ competent authority for its consideration - petition disposed off.

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• 2025 (3) TMI 1305
  Challenge to penalty order passed u/s 129(3) of the Central Goods and Services Tax Act, 2017 - intent to evade (mens rea) present or not - original invoice was not present with the goods, but a photocopy of the same was present - weight of the truck that was weighed two days after detention was 25410 kilograms which was 270 kilograms more than the weight shown in the invoice - HELD THAT:- It is to be noted that in catena of judgements of this Court and the other High Courts have categorically held that the penalty to be levied under Section 129 (3) of the Act has to be based on intention to evade tax. It is to be further noted that in the order passed under Section 129 (3) of the Act, the authorities have accepted the explanation of the petitioner with regard to the difference in weight and the only reason for which the penalty has been imposed is with regard to absence of original copy of the invoice. Since the photocopy of the invoice alongwth e-way bill was present, therefore, we do not find any intention to evade tax as the invoice that was present alongwith the goods was matching with the e-way bill and there was no discrepancy between the two. Since no mens rea to evade tax was there, we are of the view that the detention proceedings alongwith order under Section 129(3) of the Act are arbitrary and invalid in law. Accordingly, the impugned orders dated March 2, 2025 and March 6, 2025 are quashed and set aside - Petition disposed off.

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• 2025 (3) TMI 1304
  Challenge to impugned orders issued u/s 74 of the Central Goods and Services Tax Act, 2017 - suppression of facts or not - HELD THAT:- The SCN were issued under Section 74 of the Act. A perusal of the notice, it appears that no aspect of suppression of facts, wilful misstatement or fraud has been stated in the show cause notices to fulfil the ingredient of Section 74 of the Act and therefore, the same is not sustainable under the Provision of Section 74 of the Act. However, the 1st respondent proceeded to pass the impugned orders. The main grievance of the petitioner is that since the impugned orders were passed under Section 74 of the Act, it deprives the petitioner s right in availing the benefit under the Amnesty Scheme. Therefore, as suggested by the learned Special Government Pleader, it would be proper to say that the notice issued under Section 74 of the Act shall be deemed as notice under Section 73 of the Act so as to enable the petitioner to avail the benefits under the Amnesty Scheme. Accordingly, the notices and the impugned orders passed under Section 74 of the Act shall be deemed as the notices and orders passed under Section 73 of the Act. Petition disposed off.

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• 2025 (3) TMI 1303
  Refund of unutilized Input Tax Credit for the Financial Year [FY] 2022-23 and first quarter of FY 2023- 24 - remittance of funds to a bank account located in Bangalore, despite the services being exported by the Delhi branch office (BO) of the petitioner - HELD THAT:- An identical issue decided in CABLE AND WIRELESS GLOBAL INDIA PRIVATE LIMITED VERSUS ASSISTANT COMMISSIONER, CGST ORS. [ 2024 (10) TMI 442 - DELHI HIGH COURT] where it was held that While it is true that the aforesaid mapping of the Bangalore bank account has occurred after the remittances were received, they are clearly in validation of the fact that services had been exported by the Delhi BO and which has now clearly disclosed an additional bank account maintained at Bangalore. That these remittances are connected with the services rendered by the Delhi BO to VGSL was neither questioned nor doubted by the respondents before us. The objection as taken thus clearly appears to be overly technical and unsustainable. Conclusion - The petitioner is entitled to a reconsideration of the refund claim for unutilized ITC, and the remittance to the Bangalore bank account does not preclude the refund. The impugned order dated 31 December 2024 is quashed - petition allowed.

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• 2025 (3) TMI 1302
  Challenge to communication sent by the 2nd respondent - Issuance of summons u/s 70 of the GST Act, seeking information and details from the petitioner - HELD THAT:- Section 74 of the CGST Act becomes applicable when there is evasion or payment of tax by way of willful proposition, misstatement or fraud in the payment of tax. In such circumstances, the authorities are permitted to levy penalty amounting 100% of the tax which has not been paid. However, the very same provision also provides for graded response. That is, personal liability to pay tax, can reduce his liability of penalty from 100% to various percentages of penalty, depending on the stage at which the person liable to pay tax admits his liability, and pays the short paid tax along with penalty. In this process, if the person admits short payment and pays the tax along with 15% of the tax penalty, no further steps would be taken under Section 74 of the CGST Act. In the present case, the communication sent by the 2nd respondent is in line with the provisions of Section 74 of the CGST Act - The aforesaid communication does not in any manner create any liability on the petitioner nor would amount to initiation of any proceedings against the petitioner. In such circumstances, the competence of the 2nd respondent, who issued such communication, would not arise as it is a general communication setting out the law. This writ petition is closed leaving it open to the petitioner to set out its grounds of opposition to any proceedings initiated against the petitioner for short payment of tax or willful evasion of tax or wrongful availment of ITC.

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• 2025 (3) TMI 1301
  Categorisation of impugned order u/s 73 or 74 of the KGST/CGST Act, 2017 - HELD THAT:- A perusal of the material on record will indicate that though the proceedings is styled as one under Section 74 of the Act, in reality/substance, the proceedings are actually under Section 73 of the Act especially having regard to the contents of the impugned order which does not contain necessary material particular/details so as to satisfy the ingredients of Section 74 of the Act but are under Section 73 of the Act. It is also relevant to state that the impugned order is an exparte order which deserves to be set aside by providing one more opportunity to the petitioner to put forth their claim and seek benefit of GST Amnesty Scheme by treating the proceedings one under Section 73 of the Act. Under these circumstances, it is deemed just and appropriate to set aside the impugned order and remit the matter back to respondent No.1 for reconsideration afresh in accordance with law. Petition allowed by way of remand.

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• 2025 (3) TMI 1300
  Seizure of goods with vehicle - Validity of affidavit supporting the writ application - lack of authorization for the deponent to represent all petitioners - HELD THAT:- In the writ application, there is no averment that Gopal Yadav who is the deponent has been duly authorised by the petitioners to present this writ application in this Court. No document showing authoristion in favour of the deponent has been enclosed. The deponent has claimed in the affidavit that he is Manager-cum-authorised representative of petitioner no.3. He has not stated that he has been authorised by all the petitioners to swear affidavit. This Court further finds that in the affidavit, the deponent has not declared that he has gone through the statements made in the writ application or that those statements have been read over and explained to him. The affidavit, therefore, suffers from several infirmities. It is not in accordance with law and the rules of the Patna High Court. Conclusion - There being no averment either in the writ application or in the affidavit that the deponent Gopal Yadav has been appointed/authorised as legal representative of the writ petitioners to file the present writ application and to swear affidavit on their behalf, the writ application as framed would be rendered incompetent. This writ application stands dismissed as withdrawn.

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• 2025 (3) TMI 1299
  Blocking the petitioner s Electronic Credit Ledger (ECL) under Rule 86A of the CGST/SGST Rules without a pre-decisional hearing and without independent reasons to believe - Principles of natural justice - HELD THAT:- In the instant case since no pre-decisional hearing are provided/granted by the respondents before passing the impugned order, coupled with the fact that the impugned order invoking Section 86A blocking of the Electronic credit ledger of the petition does not contain independent or cogent reasons to believe/accept by placing reliance upon reports of enforcement authority which is impermissible in law, since the same is on borrowed satisfaction as held by Division Bench, the impugned order deserves to be quashed. It is also pertinent to note that the impugned order except stating that the registered person/ supplier found to be a bill trader and involved in issuance/availment in fake invoices , no other reasons are forthcoming in the impugned order. The impugned order is quashed - petition allowed.

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• 2025 (3) TMI 1298
  Refund of unutilized ITC on account of supplies made to SEZ units without payment of tax - violation of paragraph No. 8 of Circular No. 125/44/2019 dated 18.11.2019 - HELD THAT:- This Court is of the view that once the respondents admit the entitlement of the petitioner to the quantum of refund, then this Court has ample powers and the jurisdiction to direct the respondents to grant the petitioner, the said refund. In the opinion of this Court, the failure so to do would tantamount to a stamp of approval by this Court to the unjust enrichment on the part of the Department to the excess tax collected by it from the petitioner, which it did not have authority to collect under Article 265 of the Constitution of India. Circulars of the Board are undoubtedly important to follow for both the Assessee and the Department. Today, the operation of Tax Laws in India is largely procedural and based on interaction of the Assessee with the respective Departments, through the respective portals. In the context of GST, Excise, Customs etc., Acts, the supply, movement, claim of drawback, refund, Input Tax Credit etc., and the filing of the returns are to be uploaded on the portal strictly as per the prescribed Forms with strict adherence to the respective tax calendars. In all the cases, the Department is right in contending that when the procedure has been laid down, the same has to be followed in the manner prescribed, or not at all. However, in certain cases, owing to situations beyond the control of the parties including the Department at times, the performance of the duties of the Assessee often become impossible. This is the point of inflection where insistence on the procedure or the rigorous implementation of a certain Circular would defeat the substantive rights of the Assessee, thereby causing miscarriage of justice. The adherence to the same cannot be extended to the point that the procedure followed in the Circular completely overpowers and extinguishes the substantive rights of the Assessee under the Act. It is precisely in this domain that the writ of this Court will issue. Thus, in genuine cases of refund, once the conscience of the Court is satisfied that the petitioner has the substantive right to refund, in appropriate cases, it becomes necessary in the interest of justice to exercise the jurisdiction under Articles 226 and 227 of the Constitution of India to hold that the procedure, being a hand-maiden of substantive justice, does not edge out the substantive rights of the petitioner. Otherwise, it would tantamount to throwing the baby out with the bath-water. The impugned order issued by the respondent no. 4 and order issued by the respondent No. 5 rejecting the petitioner s appeal are hereby quashed and set aside - petition allowed.

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• 2025 (3) TMI 1297
  Violation of principles of natural justice - SCN and the order impugned has been passed without application of mind and without any legal basis - HELD THAT:- Admittedly, notice under Section 61 of the Act was issued to the petitioner pointing out the discrepancies, when the same was not responded, show cause notice incorporating the said deficiencies was issued to which a reply (Annexure No. 6) dated 18.12.2023 was filed. A perusal of the reply indicates that for the various issues indicated in the show cause notice, apparently, cursory indications were made and the copies of balance-sheet, trading account and profit and loss account were annexed wherein no details/particulars of any nature relevant to the discrepancy pointed out were available/had any support to the contention raised in reply to the show cause notice. The Authority, taking into consideration the plea raised in the reply to the show cause notice, passed the order dated 22.04.2024. The nature of order which has been passed, it cannot be said that the same is non-speaking as the contentions raised, have been considered and not accepted by the Authority - The plea, regarding violation of principles of natural justice, looses significance once petitioner was issued notice for date of hearing dated 09.04.2024 (Annexure No. 8) and petitioner chose not to appear. Once by passing of the order, the petitioner was aggrieved, it was required of the petitioner to question its validity by filing the appeal. Apparently, no appeal has been filed and no reason is forthcoming. Filing of the writ petition, wherein apparently, petitioner is seeking to question the merit of the order dated 22.04.2024 and none of the grounds for invoking jurisdiction under Article 226 of the Constitution are available in the present case, cannot be countenanced. Conclusion - There is no violation of the principles of natural justice, the petitioner is provided with an opportunity to be heard, and the writ petition is not maintainable due to the availability of an alternative remedy that was not pursued. Petition dismissed.

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• 2025 (3) TMI 1296
  Challenge to order passed u/s 73 of the WSBGST /CGST 2017 - disallowance of ITC claimed by the petitioner on the basis of the returns filed under Section 39 of the said Act in Form GSTR 3B beyond the due date - HELD THAT:- Having heard the learned advocates appearing for the respective parties and noting that in this case, the ITC had been disallowed by reasons of the petitioner filing the return in Form GSTR 3B beyond the due date, and on the basis of insertion of sub3 section (5) to Section 16, the returns filed by the petitioner which is in respect of the tax period from April 2018 to March 2019 have now been regularized having regard to the new cut of date provided for in Section 16(5) of the said Act, the petitioner cannot be denied the benefit of the aforesaid amendment. The petitioner is permitted to apply before the appropriate authority by making appropriate rectification application - petition disposed off.

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• 2025 (3) TMI 1295
  Discrepancy between his client s account and goods and services tax (GST) annual return - HELD THAT:- It appears from impugned show-cause notice that in respect of a sum of Rs. 8,02,84,232/- there is an issue between petitioner-assessee and revenue. Petitioner says it is a discrepancy while revenue says petitioner wrongly availed input tax credit (ITC). Impugned show- cause notice bears record of explanation sought for by the jurisdictional officer, furnished and satisfaction recorded. All the above in respect of said sum of Rs. 8,02,84,232/-. In view of last preceding paragraph petitioner will reply to impugned show-cause notice. In it, petitioner will be at liberty to take all points, including the point of limitation. The authority says and will pass order by 5th February, 2025. On communication of the order to petitioner, it will obtain advise on next course of action. Petition disposed off.

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• 2025 (3) TMI 1294
  Levy of GST on electricity and water charges, which are being collected at actual by the Lessor from the Lessee - nature of supply - applicable rate of GST - HELD THAT:- Duet India provides renting services along with other amenities like electricity, water etc. Without these amenities/ facilities, the building does not fetch any rental value. The intention of the Lessee is to avail the renting services provided by Duet India. A Lessee does not avail of amenities of electricity and water, without availing the renting service. Thus, no option is available to the Lessee. Further there must be an authorisation by Lessee on Lessor when he makes payment to Electricity Department. In the present case, there is no sub-meter in the name of Lessee. Hence, the question of Lessee authorising the Lessor to pay the charges does not arise. As such, the prescribed conditions are not fulfilled for Duet India to be treated as a pure agent. The services of transmission of electricity and distribution of electricity are exempted under Notification No: 12/2017-CT(R). The exemption entry covers consideration received for services supplied by way of transmission or distribution and not services in relation to transmission or distribution. Further, the exemption at entry at SI No: 25 of N/N. 12/2017-CT(R) is only available if the person is a Transmission or Distribution Licensee under the Electricity Act, 2003. The Lessor in this case, is neither a Distribution Licensee nor a Transmission Licensee. In any case, even if the view of the Member-State was to be treated as correct, it would not impact the rate at which tax is chargeable in the present case. Conclusion - As per Section 8(a) of the CGST Act, the supply in the present case has to be treated as a supply of service of renting of immovable property , i.e., the principal supply and shall be leviable to tax accordingly.

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• 2025 (3) TMI 1293
  Applicability of Goods and Services Tax (GST) on the services provided by M/s Telangana State Technology Services Limited (TSTSL) to the State Government of Telangana - Supply of goods and services ot not - e-Procurement transaction fee collected on behalf of the Information Technology, Electronics Communications (IT E C) Department of Telangana State Government - time limitation - HELD THAT:- A careful reading of Entry 6 of N/N. 12/2017 dated: 28.06.2017 reveals that this entry pertains to services provided by the Government and not services provided to the Government. The appellant is providing services to the Government. Therefore the services provided by the appellant to the Government are not exempt under this Notification. Further the services provided by the appellant on behalf of the Government to business entities is covered by the exception to the above entry, therefore such services also are not exempt. Time limitation - HELD THAT:- The date of communication of the AAR is 4.10.2021 and appeal filed on 1.11.2021 and hence, filed within time. At the time of personal hearing on 17.2.2025, the authorised representatives, upon being asked, clarified that GST is being paid since inception on the subject service and there is no dispute. The order of the Authority for Advance Ruling is upheld.

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• 2025 (3) TMI 1292
  Eligibility to claim ITC in respect of the GST paid on inward supplies used for providing transportation facilities to employees - HELD THAT:- As per Section 16 (1) of CGST Act, 2017, every registered person shall, subject to such conditions and restrictions as may be prescribed and, in the manner, specified in Section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business. Section 17 of the CGST Act, 2017 provides for apportionment of credit and blocked credit. Section 17 (5) of the Act restricts the input tax credit subject to the conditions prescribed therein. Section 17 (5) has been amended by CGST (Amendment) Act, 2018 (No: 31 of 2018) dt: 29.08.2018 made effective from 01.02.2019, vide N/N. 02/2019-CT dt: 29.01.2019. The proviso to the Section 17 (5) clearly stipulates that input tax credit shall be available only if it is obligatory on the part of the employer to provide the impugned services to its employees under any law. This is a substantial condition to be complied for getting the benefit of input tax credit. The appellants are under no statutory obligation to provide transportation facility to their employees. This facility has been provided to the employees as a measure of personal convenience since the factory is stated to be located in the remote area. In terms of Section 17 (5) (g) of CGST ACT, 2017, input tax credit is not available in respect of goods or services or both used for personal consumption. CBIC vide Circular No: 172/04/2022-GST dt: 06.07.2022 has clarified that various perquisites provided by the employer to its employees in terms of contractual agreement entered into, are in lieu of the services provided by employee to the employer in relation to his/her employment and fall under the category of Schedule III to the CGST act and hence will not be subjected to GST - In the instant case, transportation services are provided as a perquisite by the employer in terms of contractual agreement and hence the amounts recovered from the employees held as not taxable by the Advance Ruling Authority. On this count alone, when transport services provided by the appellant to their employees are not taxable, the ITC on such inward services availed by them towards providing such non-taxable services is not allowed. Conclusion - The transportation services provided as a measure of personal convenience are not taxable, and thus, ITC on such services is not available. Appeal dismissed.

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• 2025 (3) TMI 1291
  Classification of goods - Rate of SGST and CGST applicable - Aluminium Composite Panel/Sheet - covered under HSN 3920 or HSN 7610 or HSN 7606? - HELD THAT:- It has been brought out that the rates of GST are specified as per tariff item , sub-heading , heading , and chapter mentioned in the schedules to the relevant notifications, which are as specified in the First Schedule to the Customs Tariff Act, 1975. It is also specified that the rules of interpretation of the First Schedule to the Customs Tariff Act shall also apply to the interpretation of these notifications. In this light, the Central Member has applied Rule 3(b) of the General Rules for Interpretation of Tariff to hold that the subject goods would fall under Chapter 76, since essential character in respect of the ACPs is given by Aluminum. The Central Member has thereafter ruled out the contending Heading 7610 as the subject goods are not Aluminum structures and parts of structures. Thereafter, following the decision of CESTAT in the case of Commissioner of Customs (Imports) Chennai Vs ICP India Pvt. Ltd. [ 2018 (7) TMI 546 - CESTAT CHENNAI] , the Central Member has held the goods to be classifiable under Heading 7606. Conclusion - The Aluminium Composite Panel/Sheet is classified under HSN 7606, and the applicable tax rate is determined to be 18%.

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• 2025 (2) TMI 1164
  Cancellation of bail granted to respondent - fraudulent availing of Input Tax Credit (ITC) - interpretation and application of the provisions under Sections 122 and 132 of the CGST Act - HELD THAT:- Sections 122 (viii) and 122 (x) explicitly address the unlawful acquisition of refunds and falsifying final records or creating fake accounts. Under Section 132 (c), it is mandated that invoices or bills cannot be utilised without the corresponding supply of goods or services. In this case, the respondent wrongfully availed of input tax credit without receiving any goods, relying on forged bills from non-existent companies. The evidence unmistakably establishes that the respondent was the proprietor of M/s Gurbax Rai Sons and M/s Gurbax Rai Cotton Industries. Investigative materials have further revealed that the respondent fraudulently availed input tax credit amounting to Rs. 8.59 crores. Upon reviewing the entire record, it is evident that the learned trial court erred egregiously and displayed a lack of accuracy by granting bail to the accused respondent, Lovkesh Kumar. The argument that a similar matter received an interim order of no coercive action from the Hon ble Apex Court does not justify dismissing the plea for cancellation of bail. Conclusion - The trial court s decision to grant bail is based on a misinterpretation of the CGST Act s provisions, particularly Section 132. This Court firmly decides to cancel the bail granted to respondent Lovkesh Kumar S/o Shri Guruvax Rai. The application for the cancellation of bail is allowed, and the order permitting bail from 05.04.2024 issued by the learned Additional Sessions Judge No.1, Jaipur Metropolitan-II, is hereby nullified.

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• Income Tax

• 2025 (3) TMI 1290
  Proceedings u/s 153C - issuance of the notice was preceded by the drawl of a Satisfaction Note by the jurisdictional AO - importance of material recovered in the course of a search or a requisition made and a right to reassess u/s 153A and 153C - As decided by HC [ 2024 (4) TMI 461 - DELHI HIGH COURT] except for a few exceptions which were noticed in the introductory parts of this judgment, the writ petitions forming part of this batch, impugn the invocation of Section 153C in respect of AYs for which no incriminating material had been gathered or obtained. The Satisfaction Notes also fail to record any reasons as to how the material discovered and pertaining to a particular AY is likely to have a bearing on the determination of the total income for the year which is sought to be abated or reopened in terms of the impugned notices. The respondents have erroneously proceeded on the assumption that the moment any material is recovered in the course of a search or on the basis of a requisition made, they become empowered in law to assess or reassess all the six AYs years immediately preceding the assessment correlatable to the search year or the relevant assessment year as defined in terms of Explanation 1 of Section 153A. The said approach is clearly unsustainable and contrary to the consistent line struck by the precedents noticed above. HELD THAT:- Having heard the learned counsel appearing for the petitioners and having gone through the materials on record, we see no reason to interfere with the common impugned order passed by the High Court. Special Leave Petitions are, accordingly, dismissed.

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• 2025 (3) TMI 1289
  Allowability of broken period interest - HC [ 2018 (4) TMI 523 - BOMBAY HIGH COURT] concluded issue against the Revenue - petitioner(s) submitted that the issues raised in these petitions are covered by the order of this Court in Bank of Rajasthan Ltd. vs. Commissioner of Income Tax [ 2024 (10) TMI 875 - SUPREME COURT] HELD THAT:- Following the aforesaid order, these Special Leave Petitions also stand dismissed.

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• 2025 (3) TMI 1288
  Addition of cash deposit u/s 68 - Ownership of bank accounts and cash deposits - substantial question of law or fact - as decided by HC [ 2024 (5) TMI 1474 - DELHI HIGH COURT] principal argument which was sought to be addressed on this appeal was that various transactions which fell for scrutiny were not undertaken in the accounts of the assessee requires us to delve into facts and which do not even appear to have been either raised or urged before the ITAT. In any case, such a course would not be merited bearing in mind the limited scope of this appeal and which stands confined to the consideration of a substantial question of law. As decided by SC [ 2024 (10) TMI 432 - SC ORDER] we are not inclined to interfere with the impugned judgment passed by the High Court. Hence, the Special Leave Petition is dismissed HELD THAT:- Application for discharge of previous Advocate-on-record is allowed. Having perused the review petition, we find that there is no error apparent on the face of the record. No case for review under Order XLVII Rule 1 of the Supreme Court Rules 2013 has been established. Review Petition is, therefore, dismissed.

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• 2025 (3) TMI 1287
  Return treated as non-est - delay in filing the return was not attributable to the appellant rather to the department as having supplied photocopies of the seized materials and books of accounts on 05.07.2004, seized on the date of search dated 04.09.2002 under Section 132 - HELD THAT:- We are of the view that the Tribunal was not justified in treating the observation as nonest as a finding against the assessee and, therefore, when we peruse paragraph 8.3 of the impugned judgement, we find force in the submission of Shri Goyal that the Tribunal has failed to examine the entire facts and circumstances of the case but has treated the finding of non-est as final and the consequence thereof appears to be that the assessee has been taxed twice i.e. in regular proceedings as well as those relating to block assessment for the relevant period. The Tribunal has itself held that delay in filing non-est return was not solely attributable to the assessee. The said observation has material bearing on the entire controversy involved as the financial implications of the result of proceedings of regular assessment vis-a-vis block assessment have to be examined in the entirety of the fact situation. Consequently, we answer both the questions in the manner that the Tribunal s finding treating the ITR under Section 139(1) for the Assessment Year 2002-2003 filed on 01.09.2004 as non-est is erroneous and the effect of search conducted on 04.09.2002 before the due date i.e. 31.10.2002, release of material in favour of the assessee on 05.07.2004, filing of return thereafter on 01.09.2004 and its financial consequences were liable to be considered on their own merits and not based upon the observation of non-est made by this Court in the order dated 16.05.2014. Appeal allowed.

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• 2025 (3) TMI 1286
  Reopening of assessment u/s 147 - notice issued beyond period of four years - reasons to believe - Claim of deductions u/s 10AA - HELD THAT:- In this case, complete disclosures were made, and it is only upon consideration of complete disclosures that the original assessment order dated 20 December 2017 was made. The legal position also favoured the assessee s case. The decisions of the ITAT in the case of the petitioner for the assessment year 2011-12 and the decision of Yokogawa India Limited. [ 2016 (12) TMI 881 - SUPREME COURT ] were very much available on the date of issue of the impugned reopening notice. In its reply, the revenue admitted that reassessment proceedings were initiated due to audit objection. Significantly, no such reason was given to the petitioner, along with the impugned notice seeking to reopen the assessment. There was no question of seeking to reopen the assessment on the grounds or the reasons furnished to the petitioner. Thus, Jurisdictional parameters for reopening the assessment beyond 4 years cannot be said to have been satisfied in this case. This was nothing but the case of mere change of opinion. It is well settled that proceedings to reopen an assessment are not akin to review proceedings. This is also not a case where there was any failure on the petitioner s part to disclose fully and truly all material facts necessary for the assessment. Decided in favour of assessee.

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• 2025 (3) TMI 1285
  Allowable deduction u/s 40A(7)(b) for provision made towards the approved gratuity fund with LIC - HELD THAT:- The analogy drawn by the assessee is qua the observation of the Supreme Court in the context of Section 40A(9) by that assessee, pointing out that that provision, Section 40A(9), has been held to override the provisions of Section 43B by operation of the non-obstante clause in Section 40A(1). So too in the present case, we agree that the provisions of Section 40A(7) would override Section 43B if the assessee in question satisfies the stipulations under clauses (a) and (b) thereof. Whether the contributions made by the assessee are to an approved gratuity fund or otherwise, as that would be critical to determine eligibility in terms of Section 40A(7)(b)? - For the present year, which falls in between the previous and subsequent years where the stand of the assessee on this issue has been accepted, the assessee places on record the following particulars to establish that the payments have been made to the LIC gratuity fund duly approved by the Commissioner of Income-Tax, Tamil Nadu, I, Chennai. A copy of original trust deed has been produced. That deed is between the Chemicals Plastics India Limited and the Trustees of the aforesaid Company, and provides for setting up of a group gratuity fund for various benefits to the employees. The fund is deemed to have taken effect from 1.1.1978. Vide proceedings of CIT Tamilnadu 2, Madras 34, dated 23.05.1979, recognition and approval have been accorded to the employees gratuity fund. Variations were made to the aforesaid deed of trust with the previous approval of the CIT to such variations obtained under C.No.1252-II(4)/78/dated 15.3.1988. One of the variations is to sub-clause(a) of the preamble to trust deed dated 1.3.1978 extending the scope of applicability of trust deed to the employees of any of its subsidiaries/associates also. With the above variation having been approved to take effect on 15.04.1988, the contributions of the assessee company also stand covered under the ambit of the approved gratuity fund. The aforesaid variation has been carried forward throughout deed of trust dated 01.03.1978, thus bringing the subsidiaries/associates of Chemicals and Plastics Limited also within the cover of approved gratuity fund dated 1.03.1978 with effect from 15.04.1988. Documents have been supplied to the learned Senior Standing Counsel and sufficient time and opportunity afforded to him to obtain instructions from the AO. Learned Counsel, fairly, does not dispute the position that the Assessee has been granted the benefit of the claim under examination now, for the previous and subsequent years. The documentation produced now is identical to the documentation on the basis of which the claim had been accepted by the Department for the other years. - Decided in favour of assessee.

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• 2025 (3) TMI 1284
  Validity of reassessment proceedings as barred by limitation u/s 153(2) - whether the proviso to Section 153 (2) is applicable or whether the time for completing the assessment is a period of 12 months by virtue of Section 153 (2) of the Act, as contended on behalf of the Revenue? - HELD THAT:- In terms of the proviso to Explanation I to Section 153 of the Act, the time-period available for completion of the assessment is less than sixty days after excluding the periods as referred to under Explanation I, a period of sixty days would be available to complete the assessment. AO would have sixty days to complete the proceedings. In the present case, the interim order, which interdicted the AO from proceeding with the reassessment proceedings in respect of AY 2013-14 was passed on 20.12.2019. The said proceedings were otherwise required to be concluded on 31.12.2019. Thus, the time-period available to the AO was less than sixty days. Accordingly, the proviso to Explanation 1 to Section 153 of the Act is applicable. Thus, in terms of the said proviso, the AO is required to complete the proceedings within sixty days of the interim order being vacated. The same was vacated on 13.12.2023. Therefore, the said period of sixty days expired on 11.02.2024. Notwithstanding that the time for passing an assessment order had expired, the faceless assessment unit continued to issue notices u/s 142 (1) of the Act. The petitioner objected to the said notices on the ground that further proceedings were barred by limitation but the same was rejected by a communication dated 21.06.2024. We find merit in the contention that the time-period for concluding the assessment pursuant to the notice dated 20.03.2019 issued under Section 148 in respect of AY 2013-14 has since expired. Accordingly, the reassessment proceedings are required to be terminated.

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• 2025 (3) TMI 1283
  Reopening of assessment u/s 147 - ACL and its related parties had entered into the non-genuine transactions and misused the funds/accounts of the company - According to the AO, the said communication indicated that ACL had resorted to misrepresentation of accounts and had failed to present a true and fair view of the state of affairs of the said company - HELD THAT:- The transaction of immovable properties, as explained by the assessee had resulted in a profit of Rs. 60,00,000/- during the previous year relevant to the AY 2016-17. Thus, the transaction of sale of 1600 square feet space to ACL cannot be stated to have resulted in any income of the assessee escaping assessment. In any view the impugned order does not indicate as to how any income of the assessee had escaped assessment on account of the said transaction. The observation that no TDS was deducted on the said transaction, may not be material to reopen the assessment of the assessee. Apart from the fact that the petitioner disputes that any TDS was required to be deducted, the obligation to deduct the TDS was on the purchaser and, therefore, assessee cannot be faulted for non-deduction of TDS assuming that any such obligation existed. Petitioner also purchased 1200 square feet of space in another tower of the same project at the same rate at which it sold the space to ACL. The petitioner had discharged its obligation of deducting TDS at source and also made the part payment by the banking channel. The AO has also not controverted that the balance amount of Rs. 60,00,000/- was paid in subsequent financial year (on 15.07.2017) along with interest at the rate of 9.5 per cent per annum). We are unable to ascertain as to how these transactions have resulted in assessee s income escaping assessment. There is no explanation in the impugned order as to how such transactions would lead to this conclusion. Even assuming that the transactions were found to be non-genuine or non- existent, the same would not result in petitioner s income escape assessment as the petitioner has in fact declared a profit of Rs. 60,00,000/- on sale of 1600 square feet to ACL and surrendered the same to tax. Thus, even these transactions are held to be paper transactions, as is contended by the learned counsel for the Revenue, the same would not result in petitioner s income escaping assessment. Revenue was also unable to explain as to how the facts as narrated in the notice under Section 148A (b) could lead to the conclusion that the petitioner s income for AY 2016-17 had escaped assessment. Availing of loan from HVPL is concerned, the impugned order does not indicate as to why such loan transaction is required to be considered as bogus considering that the petitioner has disclosed that HVPL was a NBFC having a paid up capital and reserves of Rs. 20.74 Crores and the turnover of Rs. 10.20 Crores. The impugned order passed under Section 148A (d) of the Act cannot be sustained. Accordingly, the impugned notice and impugned order are set aside. Decided in favour of assessee.

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• 2025 (3) TMI 1282
  Nature of land sold - LTCG or agricultural land - Capital Asset u/s 2(14) - HELD THAT:- Section 2[14] defines what is capital asset . Any agricultural land, which is not located with 8Km from the local limits of any Municipality or Cantonment Board is exempted from being considered as capital asset. From the reading of Section 2[14] of the Act, it is seen that the term Municipality should be understood in the context to mean a Local Body whether known as Municipality, Municipal Corporation, Notified Area Committee, Town Area Committee, Town Committee or by any other name. Therefore, the conclusion of the Commissioner of Income Tax is contrary to the plain language of Section 2[14] of the Act. In the present case, the fact that the land is situated beyond 8Kms from the Municipality is not in dispute. Therefore, the order of the Appellate Tribunal holding that the lands in Egathur and Navalur Villages are agricultural lands, cannot be faulted. Investment in NABARD bonds to claim deduction u/s 54EC - It is admitted that another property was sold only on 13.02.2006 for a consideration. Therefore, consideration received on 13.02.2006 was not available with the assessee to make the investment in NABARD bonds on 26.11.2005. Therefore, the order of Commissioner of Income Tax is perfectly valid. Assessee is entitled to claim deduction u/s 54EC only for a sum by way of long term capital gain of sale of shares and a further sum by way of sale of property. As rightly held by the Commissioner, out of a sum of Rs. 10 Crores, the assessee can claim exemption or deduction u/s 54EC only to an extent of Rs. 8,55,54,167/-. The claim for deduction under Section 54EC cannot be permitted to the extent of Rs. 1,44,45,833/-. Therefore, the order of the Tribunal impugned in this appeal cannot be sustained as regards the exemption claimed by the assessee to the tune of Rs. 10 Crores under Section 54EC of the Act. As a result, this Tax Case Appeal is partly allowed. While confirming the order of the Tribunal as regards the finding that the sale of land in Egathur and Navalur Villages are agricultural lands to permit deduction under Section 10[37] r.w.s. 2[14] of the Act, the order of Tribunal is modified by reversing the finding in relation to the deduction under Section 54EC of the Act.

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• 2025 (3) TMI 1281
  Adjustment of refund payable to the petitioner against the outstanding demands - Petitioner claims that the amounts adjusted be refunded along with interest as applicable - HELD THAT:- We are inclined to accept that adjustment of refund against outstanding demand may in some cases amount to a coercive measure as held in Kulbhushan Goyal v. Union of India and Ors [ 2018 (2) TMI 1271 - PUNJAB AND HARYANA HIGH COURT] However, as held by this court, it is open for the appellate authority to further specify that the stay order is limited to interdicting other coercive measures for recovery and would not extend to adjustment of refunds. Clearly, in case of ambiguity in this regard, the apposite course for the parties would be to apply to the appellate authority for a clarification. In the present case, none of the parties have chosen to take the said action. It is also material to note that the application filed by the petitioner before the learned ITAT seeking stay of recovery in respect of AY 2016-17 is pending and has not been decided as yet. This also lends this Court to understand that the interim orders passed by the learned ITAT are, essentially, to interdict the Revenue from taking any steps in the meanwhile. Apart from the above, there is yet another reason why the Revenue s action for adjustment of refund against the outstanding demand for AY 2016-17 is unsustainable. Concededly, the Revenue has not issued any prior notice or intimation u/s 245 for making any such adjustment. Thus, the mandatory provisions for effecting an adjustment u/s 245 of the Act have not been followed. In Vijay Singh Kadan [ 2016 (6) TMI 217 - DELHI HIGH COURT] this Court had not accepted that the Revenue could issue an ex post facto notice to cure the said defect. In Kshipra Jatana [ 2022 (5) TMI 1162 - DELHI HIGH COURT] this Court had, inter alia, considered the non-issue of notice under Section 245 of the Act and had directed the Revenue to refund the amount adjusted against outstanding demands to another assessment year. We allow the present petition and set aside the action of the Revenue and adjust the refunds due to the petitioner for assessment year 2020-21 against the outstanding demands for the AYs 2016-17, 2017-18 and 2018-19 and direct that the amount of refund determined, be paid to the petitioner along with the applicable interest as expeditiously as possible, and preferably within a period of eight weeks from date.

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• 2025 (3) TMI 1280
  Denial of benefits of provisions of Section 115BAB - no filing Form 10-ID before the due date - procedural lapse in filing the form - petitioner s application u/s 119 (2) (b) came to be dismissed - HELD THAT:- Once a benefit is claimed in the return of income, the filing of a separate Form pursuant to the claim of the said benefit is merely procedural in nature and should not be denied particularly if the Assessee has been able to show sufficient cause for the lapse. In the present case, the very fact that a series of Circulars namely Circular Nos. 6/2022, 19/2023 and recently 17/2024 have been issued by the CBDT goes to show that there has been a problem in large number of cases which the Assessee has faced in respect of filing Form 10-IC and 10-ID in time. Given the acknowledgment of the problem by the Department, it must be said that the Assessee has shown sufficient cause. Further, had the application of the Assessee u/s 119 (2) (b) not been dismissed and per chance, had remained pending as on 18.11.2024, the case of the Assessee for condonation of delay u/s 119 (2) (b) would have been squarely covered by Circular No. 17 of 2024 and the Respondent-authorities, following the said Circular would have automatically condoned the delay in the Petitioner s case. This Court deems it appropriate to exercise its jurisdiction under Article 226 of the Constitution of India to quash and set aside the impugned order dated 26.06.2024 passed by the Respondent No. 1 u/s 119 (2) (b) and further direct the Respondent-authorities to accept Form 10-ID filed u/s 115BAB read with Rule 21AF of the Rules, filed on 12.09.2022 to be legal and valid. The petition therefore succeeds.

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• 2025 (3) TMI 1279
  Condonation of delay in filing the return of income u/s 119 (2) (b) - Petitioner submitted genuine hardship for not filing the return of income for reason, firstly, on account of non-deposit of TDS deposited by the purchaser of the property till 11.06.2022 and inability of the petitioner to travel to India due to Covid-19 pandemic situation at the relevant point of time - HELD THAT:- As in view of the fact that the petitioner is a non-resident staying at USA was genuinely prevented from filing the return in view of Covid-19 pandemic situation, the respondent ought to have condoned the delay in filing the return for Assessment Year 2020-2021. It is also not in dispute that the petitioner has furnished computation of income along with computation of long-term capital gain along with reply dated 17.01.2023 filed in response to the notice dated 10.01.2021 issued by the respondent which is placed on record. On perusal of the Form 26AS for AY 2020-2021, it is also found that the purchaser of the property namely M/s. Ashutosh Builders deposited the amount of TDS which was deducted at the time of purchase in the year 2019 only on 11.06.2022. Therefore, the petitioner was not able to file the return for Assessment Year 2020-2021 claiming the refund in view of late deposit of TDS by the purchaser of the property. The impugned order passed u/s 119 (2) (b) is not tenable and is accordingly quashed and set aside and delay in filing the return of income for A.Y. 2020-21 is required to be condoned to permit the petitioner to file return of income for belatedly claiming the refund as per the computation of income placed on record.

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• 2025 (3) TMI 1278
  Best Judgment Assessment u/s 144 - AO has failed to consider the reply and passed the impugned order - HELD THAT:- In view of undisputed fact that the petitioner has filed voluminous reply on 24.02.2024 to the show cause notice for proposed addition which was duly considered by the AO but found unsatisfactory without assigning any reason for coming to such a conclusion and therefore, the Best Judgment Assessment order passed u/s 144 of the Act is not tenable in the eye of law. As relying on M/S SHUKLA BROTHERS [ 2010 (4) TMI 139 - SUPREME COURT] the assessment order cannot be sustained and is accordingly quashed and set aside and the matter is remanded back to the AO to pass a fresh de novo order after providing a fresh opportunity of hearing to the petitioner, if prayed for and after considering the reply of the petitioner, pass assessment order giving reasons qua the submissions of the petitioner within a period of 12 weeks from the date of receipt of a copy of this order.

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• 2025 (3) TMI 1277
  Validity of assessment order passed u/s 143(3) r.w.s. 144B - violation of principles of natural justice due to non-consideration of the petitioner s application u/s 144A - HELD THAT:- The procedure u/s 144B of the Income Tax Act, 1961 makes it clear that there are adequate safeguards during assessment. Clause (iii) Sub- Section (1) Section 144B of the Income Tax Act, 1961 mandates that the assessment will be completed in accordance with the procedure laid down under section 144B of the Income Tax Act, 1961. Clause (iv) to Sub-Section 144B of the Income Tax Act, 1961 also makes it clear that the National Faceless Assessment Centre shall assign the case selected for the purpose of Faceless Assessment to a Specific Assessment Unit (SAU) in any one of the Regional Assessment Centre (RAC) through an automated allocation system. The Assessing Unit under Section 144B consist of Senior Officials of the Income Tax Act, 1961. The case of the petitioner that the impugned Assessment Order dated 28.9.2021 has been passed without awaiting for order under Section 144A of the Income Tax Act, 1961 of the Joint Commissioner in response to be application dated 13.09.2021 filed by the petitioner under the aforesaid provision cannot be countenanced. That apart, the Joint Commissioner of Income tax is a functionary of the Assessment unit. Therefore, the jurisdictional Joint Commissioner cannot issue any directions to the Assessment Unit contemplated for completing the assessment u/s 144B of the Income Tax Act, 1961. With the incorporation of Section 144B of the Income Tax Act, 1961, the role of the Jurisdictional Joint Commissioner of Income Tax under Section 144A of the Income Tax Act, 1961 has become redundant to the extent where the assessment under section 144B of the Income Tax Act, 1961 is contemplated. Section 144A of the Income Tax Act, 1961 will apply under limited circumstances, where the assessment continues with the Jurisdictional Assessing Officer. The National Faceless Assessment Centre has to assign case, to a specific Assessment Unit (SAU) in any Regional Faceless Assessment Centre (RFAC) through an Automated Allocation System. The specific Assessment Unit can request the National Faceless Assessment Centre for obtaining such information, documents or evidence from the assessee or any other person or for conducting an enquiry or Verification Unit or seek technical assistance from the Technical Units. After receipt of concurrence from the Review Unit on the draft assessment order, the National Faceless Centre has to once again follow the procedure in clause 16 sub-Clause A or B or Clause 16 of Section 144B(1). It is therefore, the National Faceless Assessment Centre assigned the case to an Assessment Unit or other than an Assessment Unit which has made a draft assessment order through an Automated Allocation System. Assessment Unit too, thereafter considers the variation suggested by the Review Unit, final draft assessment order from the National Faceless Assessment Centre. Where again the procedure under Clause (A) or (B) of Clause XVI to Section 144B of the Income Tax Act, 1961 has to be followed. Thus there is no scope for interplay between Section 144A of the Income Tax Act, 1961 and where assessment is made under Section 144B of the Income Tax Act, 1961. Accordingly, this Writ Petition is dismissed. However, liberty is given to the petitioner to file a Statutory Appeal before the Appellate Commissioner, within a period of 30 days from the date of receipt of a copy of this order.

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• 2025 (3) TMI 1276
  Addition being deposits in bank account by appellant an NRI treating the same as Unexplained credit - assessee is a NRI and a citizen of UK having no independent source of income in India - HELD THAT:- It is an undisputed fact that the cash was withdrawn by the assessee and merely if there is a time gap between withdrawal of cash and re-deposit of the same by the assessee in his bank account, the same cannot be the subject matter of the addition and cannot be treated as undisclosed income of the assessee, unless the Department gives some conclisive evidence that the cash which was earlier withdrawn by the assessee was not available for re-deposit by such assessee (and that the amount had been spent / utilized by the assessee for some other purpose). We observe that once it has not been disputed by the Department that assessee had withdrawn a sum from his NRO bank account, and there is no allegation or specific finding with regards to how this sum was spent / utilized by the assessee and why the same was not available with the assessee for re-depositing, in our considered view, it has to be presumed that the subsequent re-deposit made by the assessee was sourced out of earlier withdrawals by the assessee from his NRE bank account. Appeal of the assessee is allowed.

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• 2025 (3) TMI 1275
  Validity of Reopening of assessment u/s 147 - barred by the limitation as notice u/s 148 was not issued within the prescribed time - HELD THAT:- Though the notice was issued u/s 148 of the Act on 31.03.2021 but the same was dispatched on 01.04.2021 as is apparent from print out of the Email received by the assessee from the department. A perusal of the said email showed that the DCIT, Kolkata sent the said notice on 1st April, 2021 at 3.28 AM, which should have been issued on or before 31st March, 2021. Therefore, the notice is barred by limitation. The case of the assessee find support from the decision of Marudhar Vintrade Private Limited [ 2022 (7) TMI 64 - CALCUTTA HIGH COURT] wherein held that notice issued u/s 148 of the Act which signed on 31.3.2021 but communicated on 1.4.2021 at 3.00 a.m.is and all subsequent proceedings are not sustainable and are quashed. However, there was no bar in issuing fresh notice in accordance with law. Scope of extended period as per TOLA - So far as the second peal is concerned for A.Y. 2015-16, is barred by limitation, in our opinion the extended period for issuing notice u/s 148 of the Act is not available and therefore, the proceedings are barred by limitation even on this count the proceedings as well as consequential assessment has to be quashed. The case of the assessee find force from the decision of the Hon ble Apex Court in the case of Union of India Ors. Vs. Rajeev Bansal [ 2024 (10) TMI 264 - SUPREME COURT (LB)] wherein it has been held that the reopening for A.Y. 2015-16 is not permissible in the extended period as per TOLA on and form 01.04.2021 and therefore the assessment order for A.Y. 2015-16 is barred by limitation. Notice issued beyond period of four years - Thirdly, in this case the assessment has been made u/s 143(3) of the Act vide order dated 26.12.2017 and apparently, the case was reopened after a period of four years from the end of the relevant assessment year which can only be made subject to the satisfaction of the conditions as provided in proviso to Section 147 of the Act, which shows that the reopening of assessment, where the assessment is framed u/s 143(3) of the Act, can only be made if the escapement of income is attributed to the failure of the assessee to truly and materially disclose any information during the assessment proceedings. However, in this case, there is no such failure is reported by AO in the reasons recorded and accordingly, the reopening has been made in violation of first proviso to Section 147 of the Act. The case of the assessee find support from the decision of CEAT Ltd. [ 2023 (1) TMI 73 - SC ORDER] wherein held that the reopening u/s 147 of the Act beyond four years from end of the relevant assessment year could be made subject to the satisfaction of the conditions as provided in first proviso to Section 147 of the Act and not otherwise. Therefore, we are inclined to quash the reopening of assessment. Hence, the appeal of the assessee is allowed.

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• 2025 (3) TMI 1274
  Unexplained cash credit u/s 68 - onus to prove - HELD THAT:- As examined all the evidences as placed before us and observe that the assessee has discharged the burden by furnishing all the documents before the authorities below and therefore provisions of section 68 can not be invoked. The case of the assessee is squarely covered by the decisions of Orient News Prints Ltd[ 2018 (11) TMI 396 - SC ORDER] , M/S ADAMINE CONSTRUCTION PVT. LTD. [ 2018 (9) TMI 1861 - SC ORDER] and M/S. HIMACHAL FIBERS LTD. [ 2018 (8) TMI 873 - SC ORDER] Thus where the assessee has discharged the onus by furnishing all the evidences and AO has not conducted any enquiry, then no addition can be made u/s 68 - Decided in favour of assessee.

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• 2025 (3) TMI 1273
  Revision u/s 263 - lack of enquiry or inadequate enquiry - as per CIT AO allowed the long term capital loss claimed on sale of Zero Coupon Bonds to be carried forward for set-off in subsequent years, even though such loss was computed after indexing the cost of acquisition, which was not allowable as per the provisions of Section 48 - HELD THAT:- Long-term capital loss has already been mentioned in the computation of total income submitted by the assessee before the AO income under the head capital gain. As found that the long-term capital loss on sale of ZCB issued by NABARD has also been disclosed in the computation of income. In the statement showing profit of loss on sale of investment. The assessee has also filed notice being the confirming part of the taxable income. We further find that in the present case the assessment proceedings was initiated vide notice u/s 142(1) and in response to the said notice a detailed reply has been filed by the assessee before the DIT. Computation chart has clearly revealed that the short term capital gain includes short term capital loss on sale of utilization income fund. A detailed submission has already filed by the assessee before the AO and AO accepted the contention and did not make adjustment. We have gone through the citation made by the assessee and find that in a case of D. G Housing Projects Ltd. [ 2012 (3) TMI 227 - DELHI HIGH COURT] wherein has held that one has to keep in mind the distinction between lack of enquiry and inadequate enquiry and even if there is any enquiry by the AO, even if inadequate enquiry the PCIT cannot invoke the provision of Section 263 of the Act to give direction to the AO to undertake further enquiries. We are in this view that the impugned order of PCIT is not sustainable under the law. We do not find that assessment order was erroneous and prejudicial to the interest of justice to the revenue. Accordingly, we quashed the impugned order. Appeal filed by the assessee is allowed.

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• 2025 (3) TMI 1272
  Revision u/s 263 - deduction/exemption u/s 54F - verification of the claim of indexation as per the provisions of Section 2(47) - date of transfer of the original asset, i.e., 13/03/2020, the assessee did not own any residential property, as the earlier residential unit had been gifted to her daughter-in-law on 27/02/2020 - HELD THAT:- The entire matter was duly examined by the AO in a speaking order, and every aspect was thoroughly scrutinized during the assessment proceedings. The decision in PCIT vs. Cartier Leaflin (P.) Ltd. [ 2023 (5) TMI 1013 - SC ORDER] is also relevant, wherein the Hon ble Supreme Court held that if the AO has adopted a plausible view, there is no justification for invoking Section 263 to revise the assessment order. This ruling applies even if it is alleged that the AO did not examine certain aspects, such as the books of accounts or the share trading transactions conducted by the assessee through demat accounts, during the assessment proceedings. Given these facts, it is evident that the order passed by the Ld. AO is neither erroneous nor prejudicial to the interests of the revenue. Since one of the two mandatory conditions for invoking Section 263 is not satisfied, the revisionary jurisdiction u/s 263 cannot be exercised. Assessee s grounds of appeal succeed.

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• 2025 (3) TMI 1271
  Unexplained cash credit u/s 68 - HELD THAT:- Facts on record reveal that no fresh loan was taken during the year under consideration. In fact, neither at the time of assessment proceeding nor during the remand proceeding, the AO has been able to identify any entry in the books of accounts reflecting any fresh loan availed by the assessee during the year under consideration. Even, the AO is absolutely silent on the aspect whether any amount either in cash or through cheque/draft has been received by the assessee from any person towards unsecured loan in the year under consideration. AO has not brought on record any material to controvert the claim of the assessee that the increase in unsecured loan is on account of book entries made both on the asset and the liability side of the balance sheet on account of purchase of immovable properties. Since, the department has failed to bring any material on record to controvert the aforesaid factual position, we do not find any infirmity in the decision of first appellate authority in deleting the addition. Hence, these grounds are dismissed. Addition made u/s. 69 - unexplained investment in properties - AO has failed to bring on record any evidence to demonstrate that in addition to the initial payment made by the assessee in the assessment year 2014-15, any further payment was made towards the purchase of the properties. The payments to be made is based on various stages of the construction and the construction itself did not proceeded and ultimately the builder/developers closed down its business. There is no reason why the assessee would have made the payment. Thus, there being no material on record to establish that the assessee had made the payment we do not find any reason to interfere with the decision of first appellate authority. However, as observed by the first appellate authority, the assessee did pay the stamp duty and registration charges while entering into the agreement to sale with HDIL. In fact, while deciding the issue, the first appellate authority has sustained addition to the extent of payment made by the assessee towards stamp duty and registration charges. However, while doing so, he has omitted to add an amount of Rs. 30,000/- paid by the assessee towards registration charges of Flat No. B-307. Thus, the addition sustained by the first appellate authority has to be enhanced by an amount of Rs. 30,000/-. Appeal is partly allowed.

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• 2025 (3) TMI 1270
  Addition made u/s. 69A - Addition was made by the AO primarily relying upon certain information received as a result of search and seizure operation conducted in case of third parties - FAA deleted addition - HELD THAT:- There is nothing on record to suggest that any independent enquiry was taken up with M/s. MEC Tech or its proprietor, to ascertain whether in reality it has paid the amount to the assessee. From the stage of assessment proceeding itself, the assessee has consistently taken the stand that it has received the amount from M/s. UVI Films Productions Pvt. Ltd. and the stand taken by the assessee was backed by corroborative evidence. The A.O. has not brought any cogent material/evidence to dislodge assessee s claim or to discredit the evidences brought on record by the assessee. Merely on suspicion, conjuncture and surmises the A.O. has made the addition. On going through the observations of the first appellate authority, we are convinced that he has deleted the addition after carefully analyzing and appreciating the facts and evidences available on record. That being the case, we do not find any infirmity in the decision of first appellate authority. Decided in favour of assessee.

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• 2025 (3) TMI 1269
  TP Adjustment - selection of MAM - assessee has adopted RPM method, however TPO has noticed that it has adopted other method - HELD THAT:- TPO has misunderstood the clear directions of the DRP on the aspect of FAR profile of the assessee and applicability of RPM in the case of the assessee which was accepted by the Revenue in the earlier assessment years. There is no clear finding on the aspect of non-applicability of RPM and TPO merely and grossly rejected the RPM with the observation that assessee is not a pure distributor and it also does manufacturing activity. In our considered view, the TPO has grossly misunderstood the business of the assessee and proceeded to complete the ALP on the basis of TNMM method. In our considered view, the TPO has to redo the ALP adjustment on the basis of various details available on record which shows that assessee has two segments (a) manufacturing and (b) trading activities and the ALP of the trading activities was accepted by the Revenue in the earlier assessment years on the basis of RPM. Therefore, we are inclined to remit this issue back to the file of AO/TPO to redo the ALP adjustment on the basis of RPM. Disallowance of expenditure claimed in ITR - assessee was not able to verify the genuineness of the expenses, thus proceeded to disallow 10% of the total expenditure u/s 37 - HELD THAT:- We are inclined to remit this issue to the file of Assessing Officer to verify the additional evidences submitted by the assessee. Accordingly, we direct the Assessing Officer to verify the additional evidences and allow the claim of the assessee as per law, after giving proper opportunity of being heard to the assessee. Accordingly, ground no.8 raised by the assessee is allowed for statistical purposes. Addition u/s 69C - Addition made merely relying on the information available from CBEC export and import data - HELD THAT:- From the assessment order, we observed that even Assessing Officer does not have details of customs duty paid by the assessee. For the sake of justice, we are inclined to remit back this issue to the file of Assessing Officer to collect the information from assessee. Assessing Officer cannot make the addition merely on the basis of CBEC export import data and Assessing Officer has to collect the total imports made by the assessee during the year and reconcile the same with customs duty paid by the assessee. Needless to say that assessee may be given an opportunity of being heard and we direct the assessee also to submit the relevant information before the Assessing Officer. Accordingly, ground no.9 raised by the assessee is allowed for statistical purposes.

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• 2025 (3) TMI 1268
  Validity of assessments subsequent to IBC proceedings - Income tax proceedings against company dissolved/insolvent - HELD THAT:- It is now settled that as per Section 31(1) of the IBC, once the resolution plan is approved by the Adjudicating Authority, it shall be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan. When the relevant clauses of resolution plan as reproduced above are taken into consideration there is no dispute left that the resolution plan provided NIL value to the income tax dues and same stands approved by NCLT. Thus the same shall be binding on the Income Tax Department. Consequently, after going through the above process, the Management of the Company is expected to begin with a clean slate which essentially means that the business of the Corporate Debtor, is revived again and is expected to start afresh by the new management. Thus we are of considered view that as there was no claim of department adjudicated during resolution proceedings and infact the dues or demands of the department were quantified at NIL, the NFAC should have quashed the impugned assessments instead of dismissing the appeals as non-maintainable, and then giving ld.AO liberty to just follow the NCLT order. We accordingly sustain the grounds and allow the appeals.

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• 2025 (3) TMI 1267
  Validity of Reopening of assessment u/s 147 - as argued notice was issued on the borrowed satisfaction and assessment was completed without satisfying the requirement of section 147 - HELD THAT:- AO has proceeded to complete the assessment without resorting to the new provisions. It is fact on record that the notice u/s 148 was issued only on 01.04.2021 and he cannot proceed to apply the old provisions to complete the assessment. From the record, we observed that the AO has proceeded to complete the assessment in hurry without even waiting for information from the assessee considering the limitation period based on the old provisions. The fact brought on record shows that the AO merely satisfied the information received from the investigation wing on receipt of STR without proper investigation on his part and after collecting partial information from the assessee and proceeded to complete the assessment with the incomplete information and without giving any opportunity, also not shared the information to the assessee and also not considered the information filed by the assessee. AO should have followed the amended and new provisions with effect from 01.04.2021 based on the fact that the notice was actually issued only on 01.04.2021 and even AO was aware of the fact that the notice was only issued on 01.04.2021 and also, he was aware of the fact that new provisions are applicable with effect from 01.04.2021. Therefore, the assessment passed u/s 147 is without adhering to the new procedure applicable from 01.04.2021 and it is beyond jurisdiction and bad in law. Hence, we are inclined to set aside the order passed u/s 147 of the Act. In the result, ground no.2 raised by the assessee is allowed. Non-issue of notice u/s 143(2) - On careful consideration, it is fact on record that the AO has failed to issue any notice u/s 143(2) for both the assessment years under consideration i.e., AY 2016-17 and AY 2017-18. Therefore, the completion of assessment without issuing notice u/s 143(2) is bad in law and also invalid in the eyes of settled position of law. Even the provisions of section 292BB of the Act will not come to rescue for non-issue of notice u/s 143(2) of the Act, the provision u/s 292BB is only to cure infirmities in the manner of service of notice and it is not intended to cure the complete absence of the notice itself, as held in the case of Laxman Das Khandelwal [ 2017 (12) TMI 517 - ITAT AGRA] Hence, we are inclined to treat the assessment completed without issue of statutory notice u/s 143(2) is bad in law and deserves to be quashed as void ab initio.

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• 2025 (3) TMI 1266
  Computation of presumptive income u/s 44BB - Goods and Services Tax (GST) inclusion in the computation of presumptive income u/s 44BB - HELD THAT:- As relying on Orient Overseas Container Line Limited [ 2024 (11) TMI 954 - ITAT MUMBAI] the Coordinate Bench in Seadrill International Ltd [ 2025 (1) TMI 1531 - ITAT MUMBAI] has held that the GST which is collected as a separate line item in the invoices as a statutory levy cannot be included as part of gross receipts for the purposes of section 44BB of the Act. Thus, GST would not form part of gross receipts for the purposes of computing income under Section 44BB of the Act and the AO is hereby directed to exclude the amount towards GST while computing gross receipts in hands of the assessee. In the result, ground no. 2 of the assessee s appeal is allowed.

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• 2025 (3) TMI 1265
  Assessment u/s 153A - AO made the addition treating the long term capital gain as undisclosed income merely on the basis of information received from Investigation Wing, Kolkata - HELD THAT:- The impugned order passed by the ld. CIT (A) is bad in law as no addition can be made in the absence of incriminating material so far as the assessment under section 153A in respect of the assessment years already completed before the date of search and not abated by virtue of search. We, therefore, set aside the order of ld. CIT (A). The ground no. 1 is allowed.

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• 2025 (3) TMI 1264
  Rejection of Application u/s. 80G - since the assessee is not registered u/s 12AB benefit cannot be given to the assessee - HELD THAT:- Since the assessee has already applied for registration under RPT Act and thereby the reasons advance for rejecting the registration of the applicant-assessee trust are curable in nature. Bench feels that the issue of registration u/s 12AB of the be decided a fresh, based on the registration under RPT Act to be produced by the assessee. Therefore, we restore the matter of the registration u/s 12AB to the file of the CIT(E) be decided afresh. The Bench also noted that recognition u/s 80G was denied because the applicant-assessee trust was not registered u/s 12AB of the Act. Since we have restored the matter of registration u/s 12AB of the Act to the file of the CIT(E) and therefore, we also deem it a fit case to restore the matter of recognition u/s 80G of the Act to the file of the ld. CIT(E). Appeals of the assessee Allowed for statistical purposes.

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• 2025 (3) TMI 1263
  Deduction u/s.37 - allowability of royalty payment for the use of intellectual property right and use of trademark IP - as argued assessee was not given a reasonable opportunity to present its case - scope of additional evidence - HELD THAT:- The assessee in its submissions made before the First Appellate Authority (submissions dated 23.05.2024) had specifically requested that it may be granted an opportunity to represent its case through video conferencing or physical hearing before the order is passed. In spite of specific request made by the assessee, the assessee was not given an opportunity to represent its case through video conferencing or physical hearing. Many of the documents / evidences filed in support of claim of deduction u/s.37 of the Act has not been properly appreciated / taken note of by the CIT(A). Given the nature of business involving toxic chemicals and having the confidentiality norms in the agreement, these Standard Operating Procedures are critical and confidential in nature. Therefore, approval from the executive management was required and obtained at the time of appellate proceedings before the Tribunal. These documents were not expressly requested during the course of assessment proceedings or before first appellate proceedings. The documents that are now submitted before the Tribunal goes to the root of the dispute. For substantial justice and for a proper adjudication of issues raised in this appeal, we take the same on record. Since the additional evidences / documents are taken on record, we deem it appropriate to restore the matter to the files of AO for him to examine these aspects and come to a conclusion whether the payments claimed as deduction u/s.37 were for the purpose of the business of the assessee and is an allowable deduction - Appeal filed by the assessee is allowed for statistical purposes.

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• 2025 (3) TMI 1262
  Addition under the head capital gain - Gain earned by the appellant on surrender of tendency right - Whether the amount received by the appellant constituted a transfer of a capital asset under section 2(47)? - HELD THAT:- As we are of the view that the assets in the form of tenancy right was acquired by the assessee way back on 29/01/1954 by paying non-refundable deposit and consequently, right of the assessee was created in the said property and, therefore, the assessee remained in possession of the said property till the date of this agreement. Since the assessee continue enjoying the right over the property, hence question of refund of security deposit does not arises. Therefore, the said deposit can very well be taken as cost of acquisition to the assessee as the same remain unpaid. A perusal of the provisions of sections 49 and 55 reveals that if the capital asset as mentioned u/s 55(2)(a) which includes tenancy rights is acquired by purchase from previous owner, then in that eventuality, the purchase price will be the cost of acquisition. In any other case, if it does not fall under the sub-clauses (i) to (iv) of sub-clause(1) of section 49, then the cost of acquisition will be treated as nil. In this case, it is an undisputed fact that the assessee had acquired tenancy right by paying a security deposit of Rs. 1080/- in 1954, which is still outstanding in its books, therefore this represents cost attached to the said tenancy right. Though cost is not defined in Section 2 or Section 55 the Income Tax Act, however it is being defined in section 43 for the purpose of Section 28 to 41 of the Act, which says the expression actual cost means the actual cost of the assets to the assessee reduced by that portion of the cost thereof, if any, as has been met directly or indirectly by Government or by any public or local authority. In ascertaining the actual cost, what has to be considered is the actual cost of the assets of the assessee. In this case the deposit paid by the assessee to acquire the tenancy right in 1954 is actual outflow from the pockets of the assessee hence this can very well be taken as cost in its hand. Therefore, in these set of facts, the provisions of section 55(2)(a)(i) is applicable and not 55(2)(a)(ii) as invoked by AO and Ld CIT(A). There is substance in the contention of the appellant that since the asset was acquired before 1stApril, 2001, hence the assessee has been allowed with an option of either to take the fair market value of the asset as on 1 April, 2001 or the actual cost of the asset as cost of acquisition and the said cost will further indexed as per the provisions of section 48 of the Act, to calculate capital gain. As per working submitted by the assessee in AY 2021-22, wherein after considering valuation of the tenancy right as on 1.4.2001 as certified by M/s. Kishore Karamsey Co., Government Registered Valuer, there is net capital loss. It is important to mentioned here that the said return of income has already been accepted by the revenue. Since the income has already been offered in later years on sale of the tenancy right and in this year also once valuation as on 01/04/2001 is considered as cost of acquisition then, the transaction resulted in to net loss, hence the addition made by AO deserve to be deleted. Therefore, these grounds raised by the assessee are allowed.

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• 2025 (3) TMI 1261
  Recomputation of income - applying a net profit rate of 8% on the entire gross business receipts - HELD THAT:- We have gone through the finding of the lower authority whereby we note that the assessee has already filed the additional evidence in the appellant proceeding thereby the AO after verifying the cash book so submitted accepted the cash deposit as part of the turnover offered by the assessee while filling the ITR. From the same set of cash book so filed the assessee contended that the cash contains the re-deposit of cash into the bank account out of cash balance available in that cash book and that re-deposit amount cannot be considered as turnover and thereby cannot be considered to estimate the income of 8 % on that amount. While doing so we also directed the assessee on 17.12.2024 to file a cash book making the total available with the assessee on each day and the assessee has finally filed it on 19.12.2024 which shows that the assessee was having the sufficient cash on hand to the extent of Rs. 33,68,166/- which was deposited out of the cash balance [ available from withdrawal or cash sales already considered for turnover ] from the copy of the cash book so filed and therefore, the ld. CIT(A) was not justified in directing to considered the income to the extent of 8 %. In the light of the discussion so recorded herein above ground no 1 2 raised by the assessee are allowed.

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• Customs

• 2025 (3) TMI 1327
  Seeking issuance of an appropriate writ directing the Respondents to pass an order for unconditional and provisional release of the goods entered for export - grievance of the Petitioner is that despite repeated letters to the Commissioner of Customs, requesting for release of the goods and seeking reasons for detention, no response has been received by the Petitioner - HELD THAT:- The Customs Department is taking steps only after filing of the present writ petition. The delay in this manner would not be permissible as consignments of the Petitioner and other similarly placed persons are held up, when expedited steps are not taken for clearing of goods. A perusal of the letters on record also show that on 20th January 2025 and 12th March 2025, repeated communications have been written by the Petitioner to the Commissioner of Customs inter alia requesting for release of the goods, but no response was elicited. Under these circumstances, it is directed that within a period of seven days, the Customs Department shall take a decision in this matter and provisionally release the goods, subject to any reasonable conditions that it deems appropriate on facts. Petition disposed off.

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• 2025 (3) TMI 1326
  Failure to adjudicate SCN - whether a SCN issued by the Customs Department, which has remained unadjudicated for a long period of time, in excess of ten years, in the present case, should be quashed only on such ground? - HELD THAT:- This Court finds that the notice issued by the Joint Director General Foreign Trade, Ahmedabad is substantially similar to the impugned show cause notices issued by the Customs Authority. This Court finds that even if the merits of the impugned show cause notice are not gone into to compare the similarity with the show cause notice dated 13.04.2010 issued by the Joint Director General Foreign Trade, Ahmedabad, the fact remains that the impugned show cause notices dated 08.03.2010 and 03.11.2011, in spite of personal hearings in the same having been granted in 2012, are yet to be adjudicated. This Court, in Dhultawala Exim [ 2025 (1) TMI 1532 - GUJARAT HIGH COURT] , relied upon several decisions of various High Courts including this Court and it was held that In the case of Siddhi Vinayak Syntex Pvt. Ltd. v. Union of India [ 2017 (3) TMI 1534 - GUJARAT HIGH COURT] , held that a matter cannot be revived after 17 years when there is no appropriate reason for the delay and hence, the Show Cause Notice was quashed. Conclusion - The impugned SCNs have remained pending for more than 15 years and 13 years respectively. Considering the aforesaid decisions, this Court has no hesitation in holding that due to an inordinately long lapse of time, the impugned show cause notices dated 08.03.2010 and 03.11.2011 can no longer remain pending for adjudication and must be quashed and set aside on that score alone. Petition allowed.

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• 2025 (3) TMI 1325
  Time limitation for demanding SAD - Suppression of facts or not - main pleading of the appellant is on the ground that there was no suppression on their part and accordingly, the SAD amount could not have been demanded after more than 4 years from the date of clearance of the goods after the appellant has clearly indicated in the Bill of Entry that they are claiming the exemption under N/N. 20/2006 - HELD THAT:- The Commissioner (Appeals) has dismissed the appeal only on the ground that the appellant has not appeared before him whenever the hearings were granted to him. When the appeal has been filed alongwith the Statement of Facts and Grounds of Appeal taken by the appellant, it is incumbent on the Commissioner (Appeals) to go through these details and pass a detailed order on an ex-parte basis even if the appellant does not come for the Hearing. The appellant has demonstrated before us that in the CA-1 filed on 22.04.2016, in the Grounds of Appeal and in the Statement of Facts, they have clearly taken stand about the Show cause being barred by limitation. The Commissioner (Appeals) was bound to consider this and give a finding as to why it is not acceptable to him in case the OIA is decided against the appellant. This has not been done - the imports have taken place on 13.04.2011 and 28.04.2011 that is immediately after a few days after this amendment was carried out. While the party can be pardoned for not going through this amendment and still claiming the SAD, it was also for the officers of the customs to check the Bills of Entry and immediately point out as to why this SAD exemption was being claimed when this amendment has already taken place with effect from 8.04.2011. This was not done. The mistake of the party can be taken as a normal mistake committed by any importer when an amendment is carried out just a few days before the actual import. On the other hand, even after coming to know that this amendment has taken place on 8.04.2011, the Department has not come out with any explanation as to what made them wait for more than four years to issue the Show cause notice on 25.05.2015 by invoking the extended provisions of the Appellant to demand the differential Customs Duty - the Department has made out any case of suppression on the part of the Appellant. The impugned order is set aside - appeal allowed.

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• 2025 (3) TMI 1324
  Misdeclaration of the quantity and value of the imported goods - violation of provisions of the Customs Act 1962 and also a violation of the EPCG licence and the Foreign Trade Policy - on examination of the imported container one headstock and 12 drums were found in excess - excess quantity was not included in the EPCG License available with the appellant at the relevant time of import - HELD THAT:- In this case the importer has subsequently obtained an EPCG licence covering the excess goods discovered. Although this was brought to the notice of the Original Authority, no decision has been recorded on the same. Once the importer produces a licence it is for the Customs authorities to verify its validity and extends all benefits to the goods if covered by the same. Further now the appellant has also produced a copy of EODC dated 09.01.2024, purportedly evidencing the fulfillment of their export obligation, which requires verification. It has been held by the Hon ble Supreme Court in Atul Commodities Pvt. Limited v. CC, Cochin [ 2009 (2) TMI 18 - SUPREME COURT] that if any doubt or question arises in respect of interpretation of Foreign Trade Policy or in the matter of classification of any item of the ITC (HS) or in the Handbook, the said question or doubt shall be referred to DGFT, whose decision thereon shall be final and binding. We find that a similar position obtains with regard to extending the benefit of an EPCG licence for which EODC is stated to have been issued. There has been a contravention of the provisions of the Customs Act 1962, in as much as there has been imports of goods in excess of the declaration made in the Bill of Entry and which was not covered by the EPCG license available with the appellant at the time of import. Tendering of an incorrect invoice was also alleged - The Customs Act 1962 and the Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act) operate in their own spheres. Hence this division of authority between the DGFT and Customs has to be adhered to, in line with the jurisdiction granted by the respective statutes under which the authorities operate. However, whether a penalty should be imposed for failure to perform a statutory obligation, under the Customs statute, is normally a matter of discretion of the authority to be exercised judicially, based on the current facts and circumstances of the case, unless stated otherwise in this statute. Conclusion - Verification of the subsequent EPCG licence and EODC certificate is essential to determine the applicability of benefits for the excess goods. The impugned order is set aside and the matter is remanded to the Original Authority, for de novo adjudication - Appeal disposed off by way of remand.

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• 2025 (3) TMI 1323
  Valuation of imported goods intended for re-export - re-determination of value assessed to duty at rate corresponding to tariff item 8479 8999 of First Schedule to Customs Tariff Act, 1975 - HELD THAT:- The first appellate authority failed to take cognizance that the original authority should have read section 46 of Customs Act, 1962 as only the first of two stepping stones by which the goods could legally be cleared for home consumption in terms of section 47 of Customs Act, 1962 and that assessment, either under section 17 of Customs Act, 1962 or under section 18 of Customs Act, 1962, must necessarily precede clearance for home consumption for the proper officer to permit extinguishment of customs jurisdiction as envisaged in section 47 of Customs Act, 1962 Mere filing of bill of entry, under section 46 of Customs Act, 1962 and of essence to build in contingencies of relevant date for rate of duty and tariff valuation, does not trigger empowerment of levy and assessment to duty in section 17 of Customs Act, 1962 which is the only stage for recourse to section 12 and section 14 of Customs Act, 1962 by proper officer therein. These the charging and valuation provisions are stipulative and, like the definitional provision, to be referred to when embarking upon the machinery provisions in Customs Act, 1962. Otherwise, in terms of section 46 of Customs Act, 1962 and chapter IX of Customs Act, 1962, the imported goods are to be deposited, in a public warehouse or private warehouse, as the case may be, until clearance is to be effected either for home consumption under section 68 or for export under section 69 of Customs Act, 1962. A comparison of section 47 of Customs Act, 1962 and section 68 of Customs Act, 1962 makes it abundantly clear that these are mutually exclusive and that, once goods are warehoused, section 47 of Customs Act, 1962 ceases to be of relevance. The trigger happy adjudication was, thus, upheld in appellate proceedings without application of mind. The original authority and the first appellate authority are in need of refreshing their approach to assessment procedure; the fault may, probably, not be limited to this lack of appreciation but also in oversight supervisory and statutory. Empowerment to review, as prescribed in chapter XV of Customs Act, 1962, appears to have been observed in its breach. The malaise is, thus, systemic. The hazard, in consequence, may be oblivion. A copy of this order may be placed before the Chairman, Central Board of Indirect Taxes Customs (CBIC) for appropriate remediation if ease of doing business is to have a chance. Conclusion - The re-determination of value for the goods in question is unjustified, as the goods were intended for re-export and not for home consumption. The Customs Valuation Rules, 2007, and Section 14 of the Customs Act, 1962, are inapplicable in this context. The impugned order set aside - appeal allowed.

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• 2025 (3) TMI 1260
  Maintainability of appeal on the ground of low tax effect - Refund of the deposited SAD - rejection on the ground that the same were filed beyond limitation and the original documents had not been furnished - HELD THAT:- A perusal of the table in paragraph 3 of this order, would show that firstly, the appeals would not be liable to be entertained on the ground of Low Tax Effect. In addition, there have been consistent decisions by the Coordinate Benches of this Court in Commissioner of Customs v. Nanak Electronics [ 2023 (1) TMI 1315 - DELHI HIGH COURT ] and Commissioner of Customs v. Bhimeshwari Overseas [ 2023 (1) TMI 1316 - DELHI HIGH COURT ]. In the opinion of this Court, the most important feature would be that there have been consistent decisions of Coordinate Benches and the ld. Single Judges, that in such cases, SAD would be liable to be refunded. The Bombay High Court decision in CMS Info Systems Ltd. [ 2017 (1) TMI 786 - BOMBAY HIGH COURT ] has not been followed by this Court. In view of the fact that the issues raised in these appeals are fully covered by the above decisions as also on the issue of Low Tax Effect, this Court is not inclined to entertain the present appeals. Appeal dismissed.

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• 2025 (3) TMI 1259
  Confiscation of export goods - prohibited goods or not - Whether export goods become prohibited for export on account of non-declaration of technical characteristics of inputs on shipping Bills as was required in terms of DFIA Scheme? - HELD THAT:- In the present case, the show cause notices have been issued with respect to the exports made by appellants. Apparently and admittedly no exemption from duty has been claimed on such exports. Further these notifications require that the product manufactured out of these imported inputs i.e. the Resultant Product should have same quality, technical specifications and characteristics as that of the imported materials used in the said resultant product. The Revenue/department has failed to produce any evidence to prove that the exported goods were the resultant goods and were not of same quality, technical characteristics and specifications as those of the inputs used in the said resultant product. It becomes clear that there is no evidence to support the violation of Condition No. (i) of both the notifications. Hon ble Supreme Court in the case of Titan Medical System Pvt. Ltd. Vs. Collector [ 2002 (11) TMI 108 - SUPREME COURT ] has held that in the absence of any action taken by the licensing authority, revenue cannot take any action that too on the allegations of misrepresentation/suppression on part of assessee. Thus we are of the opinion that non-compliance of condition of DFIA/Notifications in the shipping bills could affect the duty free import of inputs but shall have no effect on export of products for which there is no evidence that the export goods were resultant products as mentioned in 4.55 of HBP. Revenue has failed to produce any such law, rule, notification policy or any such thing, according to which there is restriction in export of pan masala and gutkha. In such circumstance, any condition on imports and non-compliance thereof cannot affect the exportability; Not specifically in the present case when DFIA was obtained post impugned export and was transferred also to third party and also when no exemption is availed by appellants while exporting pan masala and gutkha. More so for the reason the exported products were got manufactured from synthetic oils procured domestically. The synthetic oils are not mentioned in para 4.55 of HBP. Revenue also has failed to produce any evidence that the exempted pan masala and gutkha were the Resultant Products of the duty free inputs i.e. the natural essential oils imported under DFIA. Whether non compliance of condition of DFIA i.e. non-declaration of technical characteristics of inputs on the shipping bills as required under para 4.55/4.32 of HBP and under Notification No. 40/2006 dated 01.05.2006 and Notification No. 98/2009 dated 11.09.2009 for the purpose of duty free import of inputs can render the export goods as Prohibited Goods ? - HELD THAT:- On looking into the definition of Prohibited goods means goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with. Apparently there was no condition on the export of pan masala and gutkha. The condition which is alleged to have been violated is the condition of import. Thus, it is clear that based on impugned allegations freely exportable pan masala and gutkha cannot be called as prohibited goods. Above all, appellant has availed no benefit out of alleged non-declaration. Levy of penalty under Section 113(1) of the Customs Act, 1962 - HELD THAT:- The alleged non-compliance cannot render the export goods prohibited, the order of confiscation passed by adjudicating authority below is not sustainable. Once goods are not found to be liable for confiscation, penalty under Section 113(1) of the Customs Act, 1962 cannot be sustained. The penalty imposed is also required to be set aside. Conclusion - The goods exported i.e. pan masala and gutkha were freely exportable goods in terms of Foreign Trade Policy. Those have wrongly been called as prohibited for alleged violation of the conditions meant for duty free imports. Also there is no evidence proving connection between imported inputs and the export goods. The order confiscating those export goods and imposing penalty on the appellants is, therefore, not sustainable. Appeal allowed.

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• 2025 (3) TMI 1258
  Confiscation of gold bangles - diversion of export consignment of gold jewellery, after completion of all export formalities - levy of penalties u/s 114(iii) and 114AA of the Customs Act, 1962 - quantum of redemption fine. Version of the exporters, Shri Preet Kumar Agarwal and Shri Sanjay Agarwal, is that as Shri Preet Kumar Agarwal was not having the boarding pass and immigration clearance, therefore, he was unable to board the plane, whereas, version of the DRI is that on an intelligence that the export consignment would be diverted, the DRI caught Shri Preet Kumar Agarwal while he was proceeding to Gate No. 11 of the NSCBI Airport while boarding the flight while having no jewellery in his hand. HELD THAT:- As there were twisted facts from both the sides, to know the truth of the facts, the CCTV footage was very much relevant in order to ascertain as to whether the exporters were correct or the DRI was correct. However, admittedly, the CCTV footage was not placed in the present case and are not part of the relied upon documents. However, other CCTV footages have been relied upon by the DRI to establish their case. This indicates that there were some lapses in the investigation. It is the case of the DRI that after taking Shri Preet Kumar Agarwal into custody while he was boarding the flight without jewellery, on his intimation that the said jewellery had been handed over to Shri Sanjay Agarwal who had booked the said jewellery in air cargo for Hyderabad, the flight was stopped by the DRI and Shri Sanjay Agarwal, who had boarded the plane, was apprehended by taking him out of the said flight. Here, the question arises that: if the DRI was having prior information on 03.04.2018 that diversion of export consignment would take place, then, when Shri Preet Kumar Agarwal handed over the consignment to Shri Sanjay Agarwal outside the Airport, why did the DRI not apprehend Shri Sanjay Agarwal who was carrying the export consignment at the time when diversion of the goods was taking place? This raises a question mark on the version that the DRI was having prior knowledge of diversion of export consignment of gold jewellery. The investigating team has heavily relied on the statements recorded during the course of investigation. However, all those statements were retracted before the Additional Chief Judicial Magistrate. However, the procedure prescribed under Section 138B(b) of the Customs Act, 1962 that a statement relied during the course of proceedings is required to be examined in chief and thereafter be allowed for cross-examination, has not been followed in the present case. Therefore, in such circumstances, the statements recorded by the investigating team, which have been retracted before the Additional Chief Judicial Magistrate, have no relevance to implicate the exporters in this case. Although COFEPOSA proceedings were initiated, the proceedings against Shri Preet Kumar Agarwal were dropped vide Order of the Central Economic Intelligence Bureau, COFEPOSA Wing dated 16.08.2015, who, as per the allegations, was the main person involved in diversion of the gold jewellery in question. When the COFEPOSA proceedings against the person who was involved in diversion of the gold jewellery in question as per the investigation have been dropped, the case against the co-exporters are also not sustainable. Any goods cleared for exportation which are not loaded for exportation on account of any wilful act, negligence or default of the exporter, his agent or employee or which having been loaded for exportation, are unloaded without the permission of the proper officer, are liable for confiscation. Admittedly, it is a case of negligence on the part of the exporters, being the circumstances at that time, the exporter was required to take more precaution but failed to do so and the goods cleared for exportation were not loaded for exportation - the goods in question are liable for confiscation under Section 113(k) of the Act. Imposition of penalties under Section 114(iii) of the Act - HELD THAT:- Since the goods have been held liable for confiscation under Section 113(k) of the Act, penalties under Section 114(iii) are imposable on the appellants/exporters. Imposition of penalty under Section 114AA of the Customs Act - HELD THAT:- The said provisions are not attracted in this case as penalty under Section 114AA can be imposed on a person who knowingly or intentionally makes, signs or uses, or causes to be made, signed or used any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of the Act. Admittedly, in this case, documents were not found to be false or fabricated. Therefore, the provisions of Section 114AA are not attracted in the present case to impose penalty. Quantum of redemption fine to be imposed - HELD THAT:- The appellants-exporters have submitted that the value addition is only to the extent of Rs. 43,400.43 if making charges of the said jewellery after importation are taken into consideration. Thus, the redemption fine imposed on the appellant is on the higher side. Accordingly, the redemption fine imposed reduced to Rs.15,00,000/-. Conclusion - i) The order of confiscation of the consignment of 1194 pcs of gold bangles weighing 54096 gms. upheld, having an ascertained value of Rs.16,10,43,792/- cleared by diversion of the consignment in the domestic area, under Section 113(k) of the Customs Act, 1962. ii) Redemption fine of Rs.15,00,000/- imposed u/s 125 of the Act for redemption of the goods confiscated on account of diversion of the export consignment. iii) Since the goods have been held liable for confiscation under Section 113(k) of the Act, penalties under Section 114(iii) are imposable on the appellants/exporters. iv) The provisions of Section 114AA are not attracted in the present case to impose penalty. v) The gold jewellery, which has been seized from the possession of Shri Sanjay Agarwal, is to be released to Shri Sanjay Agarwal on payment of redemption fine and penalties. vi) No proceedings are sustainable against the other noticees to the SCN issued in this case. Appeal disposed off.

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• Corporate Laws

• 2025 (3) TMI 1257
  Seeking restoration of the name of the appellant in the Register of the Companies - Section 252(3) of the Companies Act, 2013 - HELD THAT:- The appellant is right in the sense that in view of the findings recorded by the NCLT on the review petition, the time consumed in prosecuting the review petition ought to have been excluded. However, there is a delay on the part of the appellant at every stage. The application for restoration of the appellant s name in the Register of the Companies was filed after a lapse of four months from the date on which it was struck out. The review petition was filed five months after the NCLT dismissed the application. After the review petition was dismissed, it took more than one year for the appellant to prefer an appeal before the NCLAT. There is no justification for this delay of five months and one year respectively. Looking to the nature of the proceedings, the NCLAT was justified in holding that no case was made out to condone the delay, especially when under Section 421 of the Companies Act, the delay could have been condoned provided it was upto forty-five days. Conclusion - The application for restoration was delayed by four months, the review petition by five months, and the appeal by over a year, with no adequate justification provided. Given these delays, the NCLAT was deemed justified in denying condonation, as Section 421 of the Companies Act limits condonation to delays of up to forty-five days. Appeal dismissed.

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• Securities / SEBI

• 2025 (3) TMI 1256
  Penalty u/s 15A(c) - Failure to sign and date the research reports and to maintain records of research recommendations and rationale for arriving at research recommendations - HELD THAT:- To define as a proper research report or a research recommendation the document ought to have been duly signed and dated. The allegation by the appellant that at the time of inspection, the inspecting team refused to see the rationale is unsubstantiated and vague. On the other hand, the evidence on record being the core finding on inspection clearly shows that the appellant s claim is untenable and the appellant s reliance only on pre-inspection questionnaire is wholly unsustainable. We therefore, don t find merit in the submission of the appellant. Not maintaining records of Public Appearances - No merit in appellant s contention that publishing the research report on Whatsapp/Telegraph channels does not amount to Public appearance . In our considered view, the definition of the term Public appearance under Regulation 2(1)(q) of the RA Regulation includes making recommendations/rendering advice relating to securities, on Whatsapp/Telegram channels, in respect of which the appellant is required to make applicable disclosures. We note that the appellant does not maintain any records, whatsoever, in respect of the publication on Whatsapp/Telegram groups, of the research reports/ recommendations. Thus, we uphold the order of the AO of imposing of penalty under Section 15A(c). Penalty u/s 15EB - Material change in internal policy which was not communicated to SEBI - Appellant is clearly required to have appropriate mechanisms to ensure independence of his research activities. Undisputedly, he is carrying on other business activities in his individual capacity. The same was required to be reported to the respondent at the time of registration and if there was any change, the same affects the independence of his research analyst function qua his other businesses, which may create conflict situations, as seen in the case of the appellant. Therefore, failure to report change in Internal policy has rightly been held as violation of the relevant regulation by the respondent. In view of the same, the appellant s submission is untenable and it is rejected. Failure to ensure independence of its research activities from its other activities - It is undisputed that the appellant is an individual and a registered Research Analyst. He also carries on independent business activities in his proprietary capacity, inter alia, a Chartered Accountancy Division, a Spiritual/Vipassana Teaching Division and Manish Goel News Broadcast Division (MGNBD), in which he claims to be only an employee. Though no fee is received by him for making research recommendations in the self-manned RA division, admittedly, he earns fee in the other 3 divisions, including the MGNBD, in which he earns fee by broadcasting the research recommendations (which are made available free by RA division). Thus, services in all these verticals are singularly provided by the appellant only. By no stretch of imagination, an arm s length relationship can be construed within the same individual . Hence, we uphold the finding of the respondent that the appellant failed to make arm s length between his RA functions and other functions. Secondly, the argument that the SEBI has given the investment advisory certificate and RA certificate both to the appellant is also incorrect on facts, since the investment advisory certificate was issued to an entity titled MSRAPL (a Company) whilst the RA Certificate was granted to the appellant in his proprietary capacity as an individual . Moreover, it was the duty of the appellant to have made due disclosure in this regard while making the applications for registration as RA and for investment advisory functions of MGRAPL. Appellant has carried out his independent business of Chartered Accountancy Division through which he used to solicit the business and admittedly no mechanism was put in place to dealing with a conflict situation between the RA division and that division. In view of this, the appellant s claim is devoid of merit and is rejected. Trading in stocks recommended by the appellant during the restricted period - An independent research analyst to do only business activity of research analysis or preparation and/ or publication of research report , whereas, it is evident that the appellant has been carrying on several business activities in his individual capacity, which shall have a bearing on his independent functioning as an independent research analyst. Undisputedly, the appellant is a Research Analyst, registered with the SEBI. Since the appellant is not employed as a Research Analyst by any research entity, by implication his case falls under the other alternative category of independent research analyst under Regulation 16(2). Therefore, appellant s contention that prescribed period applies to independent research analyst is baseless and rejected. Failure to make necessary disclosure in the research report/ recommendations - As we find that no explanation was given by the appellant as to how the research report of Investment Trust of India prepared by the appellant reached the client and why the same was not duly disclosed by him. The fact remains that the report has reached the client. Under the circumstances, we find his explanation with respect to violation of disclosure requirement under Regulation 19 as unsatisfactory. Regarding the second allegation, we find that in terms of the RA Regulations 21(1), the appellant was required to make disclosure in respect of his registration status and details of financial interest in the Company. The screenshots of Telegram Channels provided by the respondent show that no such disclosure was made by the appellant regarding his RA number or financial interest in securities in respect of which recommendations were made. The appellant questioned the authenticity of such screenshots. This contention is wholly untenable because screenshots are from appellant s phone. Failure to maintain any record of rationales - There is no evidence on record to prove that the appellant was asked through the PIQ to furnish the rationale of the research recommendations. The respondent has not denied that the rationale were provided through the SCN. There is no conclusive evidence to hold that the appellant was asked but did not provide the rationale during the inspection and that the appellant has been providing recommendations without any underlying research, as undisputedly, considering the client base of the appellant, there have not been statistically significant number of complaints against the appellant, which is not possible if his recommendations were random guesses without supported by research. Therefore, in our view, SEBI s findings on this aspect are unsustainable. Non-compliance with the KYC procedure - Relying upon the decision in the case of K. Premchand [ 1953 (10) TMI 5 - SUPREME COURT] we have already held that it is not possible to construe the possibility of having arm s length relationship within the appellant s own various income earning activities in individual proprietary capacity qua his Research Analyst activities. Hence, in our considered view, the fiction of arm s length does not exist between appellant s fee-yielding business activities qua the Research Analyst division, which too was a proprietary in his individual capacity only. Non-disclosure of the term Research Analyst in recommendations / respect of 9 stocks on Whatsapp/ Telegram chats - Evidently, the respondent has downloaded the Whatsapp chats in respect of appellant from his specific authorised telephone number. The respondent at every stage and even at the appellate stage asked the appellant to furnish details of the telephone number and the appellant has not denied the contents of the Whatsapp chat, which admittedly contains specific recommendations made by him with respect to the recommendations for 9 stocks. Further, the appellant failed to submit any proper documentary evidence to show that he had complied with the aforesaid regulatory requirements. In view of this we find no merit in the plea of the appellant, in respect of this violation. Keeping in view the fact that the defaults made by the appellant of the RA Regulations are multiple and repetitive and lack any credible explanation, we hold that the quantum of penalty levied by the AO is justified in view of the provisions of Section 15J of the SEBI Act. Penalty u/s 15HA - We find that the appellant has not denied violation in respect of one scrip i.e. Swasti Vinayak Synthetics Ltd. in respect of which the recommendation through Whatsapp message of assured high returns was made with the offer of one free service. The same undisputedly, falls within the scope of Regulation 4(2)(k) of the PFUTP Regulations, amounting to furnishing of misleading information. Keeping in view the above, we uphold the action of the AO imposing a penalty of Rs. 15 lakhs under Section 15HA.

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• Insolvency & Bankruptcy

• 2025 (3) TMI 1255
  Admission of Section 9 Insolvency and Bankruptcy Code (IBC) petition against the Corporate Debtor - settlement arrived between the parties - HELD THAT:- There has been a settlement between the parties. In view of the aforesaid, nothing remains further to be done - The impugned order passed by the NCLAT is hereby set aside. Appeal disposed off.

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• 2025 (3) TMI 1254
  Exclusion of commercial spaces from the assets of the Corporate Debtor - owners of the units allotted, on the basis of allotment of commercial spaces by the CD - dissenting Financial Creditors - it was held by NCLAT that the approval of Resolution plan upheld. HELD THAT:- There are no good ground and reason to interfere with the impugned judgment which, in our opinion, is in accord with the provisions of the Insolvency and Bankruptcy Code, 2016; hence, the appeals are dismissed.

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• 2025 (3) TMI 1253
  Direction to hand over the possession of the constructed flats/units in Phase-I of the Greenopolis Project to the persons who had paid monies directly to the said concern - HELD THAT:- The homebuyers represented by GWA, who are opposing the present application, had made their investments and payments to TCSPL. Consequently, they cannot insist or compel Orris to allot residential flats/units in their favor. It goes without saying that they must pursue their claims in the CIRP proceedings concerning TCSPL, which remain pending before the NCLT. The order dated 01.07.2021 passed by the Supreme Court and the subsequent order dated 29.03.2022 passed by the NCLT categorically lay down that the TCSPL has no right, title or interest in the Greenopolis Project and they have no right to dispose of the property or sale of any units in the same. In essence, the Greenopolis Project is not an asset of TCSPL and, therefore, does not fall within the scope of CIRP Proceedings concerning TCSPL. Considering the entire gamut of the case and its larger ramifications, where TCPSL and its sister concerns are under investigation by the Serious Fraud Investigation Unit, and Orris and other companies are facing inquiries by the Registrar under Chapter XIV of the Companies Act, 2013, the issue in question are undoubtedly interwoven. Nevertheless, the lengthy and excruciating litigation process involved should not impede the applicant, GWC, from seeking appropriate relief for its members - Unhesitatingly, the sheer audacity of the objector, namely rival GWA, is apparent. Repeated attempts have been made to deflect attention from TCSPL and its sister concerns, which have allegedly defrauded numerous homebuyers. Instead, with ulterior motives, the objector seeks to divert focus to a separate set of homebuyers who are rightfully entitled to possession of constructed residential flats/units from Orris. The learned NCLT has already passed a detailed order dated 17.12.2024 and has not extended the status quo concerning the allotment of any completed residential flats/units to the home buyers whose cause is being espoused by the present applicant/GWC. Conclusion - There is no legal impediment in allowing handing over of possession of 512 completed flats in terms of occupancy certificate issued on 01.10.2024 by Orris to its allottees, who are members of the applicant/GWC. Application allowed.

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• PMLA

• 2025 (3) TMI 1252
  Money Laundering - proceeds of crime - Maintainability of petition - petition has been filed through the power of attorney holder and the affidavit sworn by the power of attorney of the petitioner, which is not maintainable - Money Laundering - Issuance of non-bailable warrant (open-ended) against the petitioner - Section 528 of Bharatiya Nagarik Suraksha Sanhita, 2023 - issuance of summons under Section 50 of the PMLA, 2002. Maintainability of petition - petition has been filed through the power of attorney holder and the affidavit sworn by the power of attorney of the petitioner, which is not maintainable - HELD THAT:- In the present case, the petitioner is at Dubai who executed a power of attorney in favour of Mr. Khemraj Sinha, resident of Adivasi Colony, Kushalpur, Raipur (C.G.), who sworn an affidavit on behalf of the petitioner in the present petition. The respondent/ED has relied upon the judgment of Amrinder Singh @ Raja (supra) and in Para 7 and 8, it would rely upon the judgment of Amit Ahuja [ 2010 (5) TMI 962 - PUNJAB AND HARYANA HIGH COURT ] and T.C. Mathai [ 1999 (3) TMI 635 - SUPREME COURT ]. There is nothing on record to show that the power of attorney of the petitioner is disabled by filing affidavit in support of the petition or the petition filed through power of attorney is not maintainable. The preliminary objection regarding maintainability of the petition through power of attorney holder is not sustainable and hereby rejected. Applicability and procedural compliance of summons issued under Section 50 of PMLA, 2002 to a person residing outside India - HELD THAT:- When the ED found sufficient evidence against the petitioner that he actively involved in the illegal operation of Mahadev Operation Book, he issued the summons under Section 50 of the PMLA-2002 to the address of the petitioner available with the ED and asked to appear on 02.09.2023 and 04.09.2023. Since the petitioner did not join the investigation, the ED apply under Section 70 of CRPC for issuance of non-bailable warrant (open-ended) against the petitioner on 04.09.2023. The petitioner had obtained citizenship of a small island nation Vanuatu, which does not have any extradition treaty or arrangement with India, clearly evident that the petitioner did not intend to join the investigation and therefore, the application for issuance of non-bailable warrant was filed before the learned Special Court. The learned Special Court has ample power to issue non-bailable warrant against the accused when he failed to cooperate and deliberately avoided the process of law. It is apparent from the reading of Section 50 of PMLA-2002 as well as the judgment of Vijay Madanlal Choudhary that the power conferred upon the ED by virtue of Section 50 of PMLA-2002 empowers them to summon any person whose attendance may be crucial either to give some evidence or to produce any record during the course of investigation or proceeding under the PMLA-2002. The persons, so summoned, are also bound to attend in person or through authorized agent and are required to state truth upon any subject concerning which such person is being examined or is expected to make statement and to produce document, as may be required in the case. In the present case, the investigation conducted by the State Police in FIR No. 206 of 2023 registered at Police Station Cyber Crime, Vishakhapatnam Commissionorate under the scheduled offences, which revealed that the money made via the app was transferred to different accounts till it was siphoned off to a person named Sourabh Chandrakar, a native of Chhattisgarh, who presently lives in Dubai - The FIR was one of scheduled offences included in the ECIR recorded in respect of the petitioner. Statements of the close friends and associates of the petitioner were recorded under Section 50 of PMLA-2002 and they disclosed that the petitioner is one of the main promoters of Mahadev Online Book and this was further corroborated by the digital evidence gathered during investigation. Conclusion - Considering all these evidences, learned Special Court, on being application made by the ED, issued non-bailable warrant against the petitioner, and the learned Special Court has rightly exercised its jurisdiction to issue said non-bailable warrant. It is settled law that the provisions of PMLA-2002 are not limited to the accused named in the criminal activity relating to the scheduled offence, but it would apply to any person if he is involved in any process or activities connected with the proceeds of crime and as per the investigation, the petitioner was found involved in possession of proceeds of crime, emanating out of the operation of Mahadev Online Book. There are no ground to disagree with the order dated 04.09.2023, passed by the learned Special Court (PMLA-2002), by which the non-bailable warrant (open-ended) is issued against the petitioner and to interfere with the same - petition dismissed.

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• 2025 (3) TMI 1251
  Seeking grant of Regular bail - petitioner qualifies as sick or infirm under the proviso to Section 45(1) of the Prevention of Money Laundering Act, 2002 or not - petitioner is 86 years old and is suffering from multiple ailments - Applicability of Section 45 of PMLA - requirement to fulfil triple test - delay in trial - HELD THAT:- A purposive interpretation of the proviso to section 45 (1) of PMLA indicates that it was included as a lenient measure to provide relaxation for a sick or infirm individual, as mentioned in the Statement of Objects and Reasons for the PMLA. What is the level of sickness that qualifies an accused as sick under the proviso to section 45 (1) of PMLA? - HELD THAT:- While there is no strict formula to determine the level of illness required for bail under this proviso, the general guideline is that when the sickness is serious enough to pose a threat to life and requires medical assistance and treatment which is specialized and unavailable in jail facilities, the accused should be granted bail under the proviso to section 45 (1) of PMLA. However, this is not an exhaustive criterion and each case should be evaluated based on its unique facts and circumstances. In the present case, the medical board of AIIMS, Delhi constituted vide Order dated 18.09.2023 submitted its report on 04.12.2023. The medical assessment of the petitioner by the board was conducted on 18.10.2023 and 22.10.2023 - A division bench of this Court in Sandeep Aggarwal v. Priyanka Aggarwal, [ 2021 (12) TMI 1431 - DELHI HIGH COURT ] has observed that the courts cannot sit in appeal of the opinion of the medical board as the judges are not experts in medical fields. Thus, an opinion of doctors who are experts cannot be supplanted by a court overstepping its jurisdiction. Thus, the petitioner is not sick to fall within the ambit of proviso to section 45 (1) of PMLA since the petitioner can be treated in jail for the ailment as categorically opined by the medical board. Admittedly, the petitioner, aged 86, suffers from cognitive impairment, pseudodementia and recurrent dizziness, along with a history of falls. A medical board from AIIMS has recommended that he requires constant monitoring due to the risk of falls. Given his diagnosed subjective cognitive decline, it is clear that he needs supervision throughout the day, which cannot be adequately provided by jail authorities. Furthermore, considering his age, the likelihood of improvement in his age-related infirmities is minimal and it is expected that his condition will continue to decline - beneficial legislation in favour of a class of persons, which is reflective of constitutional spirit, should not be considered narrowly and must be given a liberal interpretation. Thus, the aforementioned infirmities in a senile stage combined with the need for constant monitoring coupled with frequent falls and forgetfulness makes the petitioner infirm under the proviso to section 45 (1) of PMLA. The petitioner falls within the ambit of infirm under the proviso to section 45 (1) of PMLA and thus, he is not required to meet the twin test of section 45 (1) of PMLA. Requirement of fulfilment of triple test of Flight risk, Influencing any witness and Tampering with evidence - HELD THAT:- The petitioner has been released on interim bail since 08.08.2022 on medical grounds and there are no allegations of misuse of liberty by him while on bail - As regards the flight risk, adequate restrictions can be imposed upon the petitioner - the petitioner meets the triple test for grant of bail. Delay in trial - HELD THAT:- There are 17 accused persons, 66 companies, 121 witnesses and 77,812 pages of documents plus enormous digital data which needs to be analysed in the present case. Thus, there is no likelihood of the trial to be concluded in the near future - In the case of Pankaj Kumar Tiwari v. Directorate of Enforcement, [ 2024 (10) TMI 1351 - DELHI HIGH COURT ], a co-ordinate bench of this Court observed that the right of the accused to speedy trial is an important aspect which the courts must keep in contemplation while deciding a bail application as the same is higher sacrosanct constitutional right, which ought to take precedence. Conclusion - i) The petitioner falls within the ambit of infirm under the proviso to Section 45(1) of PMLA, exempting him from the stringent bail conditions typically required under this section. ii) The petitioner satisfies the triple test for bail, as there is no substantial evidence of flight risk, witness influence, or evidence tampering. iii) The delay in trial proceedings, coupled with the petitioner s right to a speedy trial, warrants the granting of bail. The petition is allowed and the petitioner is granted bail, subject to fulfilment of conditions imposed.

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• 2025 (3) TMI 1250
  Invocation of extraordinary jurisdiction of this Court under Section 482 of Cr.P.C./Section 528 of the BNSS, 2023 - If the complaint in regard to a scheduled offence has been quashed, the complaint under Section 3 4 of the PMLA, 2002 pertaining to some scheduled offence is maintainable or not? - HELD THAT:- Section 447 of the Companies Act, 2013 stipulates punishment in the case of fraud involving an amount of at least Rs. 10 Lakh. An offence under Section 447 of the Companies Act, is a scheduled offence for the purposes of the PMLA, 2002 and as per Paragraph 29 of the schedule appended to PMLA, 2002, an offence under Section 447, which stipulates punishment for fraud, is a scheduled offence - The expression scheduled offence has been defined in Section 2(1)(y). This provision assumes significance as it has direct link with the definition of proceeds of crime . In that, the property derived or obtained as a result of criminal activity relating to notified offences, termed as scheduled offence, is regarded as tainted property and dealing with such property in any manner is an offence of money-laundering. The Schedule is in three parts, namely, Part A, B and C. Part A of the Schedule consists of 29 paragraphs. These paragraphs deal with respective enactments and the offences specified thereunder which are regarded as scheduled offences. Similarly, Part B deals with offence under the Customs Act specifically and Part C is in relation to offence of cross-border implications. The Apex Court in Vijay Madanlal Choudhary [ 2022 (7) TMI 1316 - SUPREME COURT (LB) ] in Para-107 observed that a property derived directly or indirectly as a result of criminal activity relating to a scheduled offence would be liable for prosecution under the provisions of the PMLA, 2002. The Apex Court further held that the explanation, which is added to Section 2(1)(u) and which provides for definition of proceeds of crime, does not travel beyond the intent of tracking and reaching up to the property derived or obtained directly or indirectly as a result of criminal activity relating to a schedule offence. The conclusion which has been arrived at by the Apex Court makes it abundantly clear that the property which is derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence, can be regarded as proceeds of crime and other property, which has no nexus with any scheduled offence, cannot be brought within the ambit of the proceeds of crime. It is clear that the co-ordinate Bench of this Court concluded that the prosecution launched under Section 447 of the Companies Act as was an attempt to apply statutory provision with retrospective effect, which was not permissible and therefore, concluded that the prosecution was illegal. Even the co-ordinate Bench proceeded ahead to label the prosecution to be malicious. The Court also concluded that upon due consideration of the allegations as set out in the FIR, if the offence registered is not formulated and the prosecution is considered to be malicious, the proceedings can be quashed. Conclusion - The proceedings under the PMLA, 2002, could not be maintained against the applicant due to the quashment of the predicate offence under Section 447 of the Companies Act, 2013. Petition allowed.

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• Service Tax

• 2025 (3) TMI 1322
  Refund of service tax paid on mobilization advance - applicability of limitation period prescribed u/s 11B of the Central Excise Act, 1944 - HELD THAT:- In disputes over refund of duties of central excise, it has been consistently held that any claim of refund would have to pass through the sieve of section 11B of Central Excise Act, 1944 as, even with leviability arising upon manufacture, the tax liability would be discharged only upon clearance of goods which not only offers corporeal ascertainment of taxable event but also as a consequence of assessment whether by self or in terms of section 11A of Central Excise Act, 1944. Per contra, the taxability under section 66 of Finance Act, 1994 would arise only upon taxable service being rendered; service is not discernable except with satisfaction of recipient manifested by transfer of consideration and creating liability only then. Consequently, any tax collected upon rendering of service would necessarily have to comply with the law of limitation set out in section 11B of Central Excise Act, 1944 and not in dispute any more than clearance of the goods under Central Excise Act, 1944 would be. Inasmuch as taxable service did not exist, tax may not be acknowledged as leviable or having been collected as tax and in much the same way as topping up of the erstwhile personal ledger account (PLA) to enable debits upon clearance of the goods under Central Excise Act, 1944. In much the same way as such payments were advance deposit and not liable to be scrutinized within the template of section 11B of Central Excise Act, 1944, the remittance of amount towards an intended service which never happened would not have to go through the restrictions imposed under section 11B of Central Excise Act, 1944 for effecting the sanction. Conclusion - The refund claim is not barred by the limitation period under section 11B of the Central Excise Act, 1944, as the payment was made under a mistaken belief and classified as a deposit. The sanction granted by the original authority is restored - appeal allowed.

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• 2025 (3) TMI 1321
  Recovery of service tax on the premium collected by M/s Deposit Insurance and Credit Guarantee Corporation (DICGC) with interest and penalty - scope of remedy before the Tribunal under section 86 of Finance Act, 1994 - jurisdiction under section 86 of the Finance Act, 1994, to dispose of the appeal concerning the demand for interest and penalties related to the alleged short-payment of tax - HELD THAT:- Without going into the thrust of the submissions made by both sides on the nature of the dispute as set out by them and narrated, it is noted that the lack of legal sanction for recovery Rs. 118,64,34,956, espoused for adopting cum-tax computation, has attained finality. As the liability to tax does not arise and, in any case, ordered to be refunded to the assessee, charging of interest would not arise notwithstanding the date on which those deposits had been made. Relying solely on the facts and the invalidation of short-payment of tax on premium collected between October 2011 and December 2013, the proceedings for recovery of interest set aside. Consequently, the penalty imposed does not survive. Conclusion - Service tax cannot be charged as a component of the premium when the governing statutes do not permit recovery beyond the stipulated premium. Additionally, interest and penalties cannot be imposed in the absence of a legally sanctioned tax liability. Appeal allowed.

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• 2025 (3) TMI 1320
  Exemption under N/N. 25/2012 dated 28th June, 2012 as amended by the subsequent Notification dated 30.01.2014 - NIT Patna and IIT Mandi fall within the definition of Governmental Authority - HELD THAT:- The matter is already settled by Hon ble Patna High Court in the case of M/s Shapoorji Paloonji Company Pvt. Ltd [ 2016 (3) TMI 832 - PATNA HIGH COURT] and further affirmed by Hon ble Supreme Court in [ 2023 (10) TMI 748 - SUPREME COURT] . Hon ble Patna High Court has analysed the provisions of the above Notification in para 11 of their order and held that the construction activities undertaken by the petitioner in respect of Academic blocks of IIT, Patna are exempt from service tax . This Tribunal has also considered this issue in the case of M/s. Dhanraj Jethwani Vs. Commissioner of CGST, Customs, Central Excise and Service Tax [ 2024 (6) TMI 133 - CESTAT NEW DELHI] , where it was held that MANIT is covered under Governmental Authority and it can not be made subject to the condition of 90% or more by way of equity or control to carry out any function entrusted to a Municipality under Article 243W of the Constitution. Both NIT Patna IIT, Mandi are covered as Governmental Authority as defined under clause No. 2(s) of Notification No. 25/2012-ST dated 28thJune, 2012 and as amended vide Notification No. 2/2014-ST dated 30thJanuary, 2014. Accordingly, the services provided to a Governmental Authority by way of construction, erection, commissioning, installation, repair, maintenance, renovation or alteration of any civil structure are exempt. Further, as per Srl. No. 29(h) of the above Notification, when principal contractor M/s. NBCC is exempt from Service Tax, their sub-contractor (the appellant in this case) is also exempted. Exemption from service tax on the works contract services provided, considering the specific contractual and statutory conditions - HELD THAT:- M/s. NBCC was awarded work order by NIT, Patna vide MOU dated 23.07.2013 and by IIT, Mandi vide MOU dated 21.03.2014. These works were further sub-contracted by M/s. NBCC to the appellant vide letter reference No. NBCC/RBG (E)T (3)/2015/607 dated 08.04.2016 (in case of NIT Patna) Letter reference No. NBCC/GM/IIT/MANDI/2015/3000 dated 02.05.2015, (in case of IIT Mandi). Both these contracts have been entered into between the appellant and their principal after 01.03.2015. Both the work orders were awarded to the appellant after 01.03.2015 and therefore the conditions, as mentioned in para 12, need to be verified by the lower authorities - this case is fit for remand to the adjudicating authority to examine whether the conditions imposed by Finance Act, 2016 are satisfied in this case or not and accordingly, decide the liability of service tax upon the appellant or otherwise. Confiscation - NIT Patna and IIT Mandi are Governmental Authorities, exempting related services from service tax. However, the case is remanded for further examination of the appellant s exemption eligibility under the Finance Act, 2016 conditions. Appeal disposed off by way of remand.

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• 2025 (3) TMI 1319
  Classification of services - Works Contract service or Commercial or Industrial Construction Services? - invocation of extended period of limitation - HELD THAT:- In the instant case, there is no dispute that the work undertaken by the appellants was construction activity involving both labour and material. Appellants were registered contractors with Kerala Sales Tax Authorities and also paid Sales Tax/VAT under the Kerala Sales Tax Act and Kerala VAT Act on the activities under dispute. Therefore, the first condition of the definition of works contract service is satisfied. Since the issue is squarely covered by the judgment of the Hon ble Supreme Court in the case of Larsen Toubro Ltd. [ 2015 (8) TMI 749 - SUPREME COURT] , the activities carried out by the appellant is falling under works contract service and they are not liable to pay service tax prior to 01.06.2007. As regarding demand of service tax from 01.06.2007, since the appellant paid due amount under works contract service, the demand confirmed as per the impugned order under Commercial or Industrial Construction Service is unsustainable. Conclusion - The demand for service tax under Commercial or Industrial Construction Service is unsustainable for the period prior to 01.06.2007. The invocation of the extended period of limitation is also found to be unsustainable due to the absence of evidence of suppression of facts by the appellant. Appeal allowed.

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• 2025 (3) TMI 1318
  Classification of service provided by the appellant - Repair and Maintenance Service or Business Auxiliary Service (BAS)? - invocation of extended period of limitation - HELD THAT:- The issue is well settled in appellant s own case, LARSEN TOUBRO LTD. ORS. VERSUS CCE, CHENNAI ORS. [ 2006 (6) TMI 3 - CESTAT NEW DELHI (LB)] where the Larger Bench of the Tribunal after referring to the Agreement dated 01.02.1998 categorically held that the activity carried out by the appellant is falling under the category of Business Auxiliary Service and accepting the above fact, the respondent had accepted the service tax liability as applicable with effect from 10.09.2004. Considering the same, the demand confirmed in the impugned order under the category of Repair and Maintenance Service is unsustainable. Conclusion - The services provided by the appellant fall under BAS and that the demand under Repair and Maintenance Service is unsustainable. Appeal allowed.

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• 2025 (3) TMI 1249
  Inordinate delay and failure on the part of the tax authorities to conclude the adjudication proceedings within a reasonable period of time - Violation of principles of natural justice - HELD THAT:- Section 73 of the Act empowers the taxing authorities to issue SCN(s) to the assessee, chargeable with service tax, which has not been levied or paid or short-levied or short-paid or erroneously refunded. After issuance of the SCN, Section 73(4B) of the Act casts a duty upon the authorities to determine the due amount of service tax within six months/ one year, where it is possible to do so, from the date of notice. This court, in Vos Technologies India [ 2024 (12) TMI 624 - DELHI HIGH COURT ], had the opportunity to consider the effect of inordinate delay and failure on the part of the tax authorities to conclude the adjudication proceedings within a reasonable period of time, the Finance Act, 1994 and the Central Goods And Services Act, 2017) and held that such delay/ failure to act within a reasonable period of time, constituted sufficient ground to quash such proceedings. This Court also held that the authorities are bound and obliged in law to make endeavors to conclude adjudication with due expedition. There is no apparent reason given for the inordinate delay in adjudication. In Vos Technologies India this Court categorically held that matters having financial liabilities or penal consequences cannot be kept unresolved for years; and the phrase where it is possible to do so cannot be a license to keep matters pending for years. The flexibility provided by the legislation is not meant to be misused or construed as sanctioning indolence. The statutory leverage cannot be brought into play routinely and in an unfettered manner for years, without any due justification or explanation. Conclusion - The authorities are bound and obliged in law to make endeavors to conclude adjudication with due expedition. There is no apparent reason given for the inordinate delay in adjudication. The impugned SCNs dated 18.10.2013, 21.05.2014, 07.09.2015, 13.10.2016 and 01.03.2018 and the impugned order dated 23.08.2024 issued by the Respondent are hereby quashed - Petition disposed off.

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• 2025 (3) TMI 1248
  Levy of service tax - licence fee collected from the appellants customers, on which the appellant has paid value added tax treating it as sale, can once again be included in the taxable value of service rendered under the category of Information Technology Software Services or not - HELD THAT:- It can be seen from a perusal of the agreement as a whole that the solution which the appellant provides is a software solution. The solution is to meet the specified business requirements of the client. The solution is to be made available in the customer/client s system as per the deliverables indicated in the delivery schedule. Such customisation required to integrate with the existing legacy/ERP system, includes all activities such as installation, training and enhancements to the standard product by change of source code. Thus, it is evident from the agreement that the solution that the appellant provides is in the form of the appellant s product, i.e., the software which it customises as per the client s requirements, including making changes in the source code as required. It is also clear from the agreement that while the intellectual property rights of all the products of the appellant that is implemented/used for developing and providing the solution to the client belongs to the appellant, nevertheless, the client is put in full control and possession of the appellant s product, i.e. the customised software, so delivered with its exclusive right to use. The transaction between the appellant and its customer in terms of this agreement has resulted in sale of the appellants software along with the right to use such software and the licence fee for the same has therefore been rightly made exigible to sales tax by the appellant and cannot therefore be yet again subjected to levy of service tax. Payment of service tax as well as VAT are mutually exclusive. Reliance placed in the decision of this Tribunal in Quick Heal Technologies v. CST, Delhi [ 2020 (1) TMI 430 - CESTAT NEW DELHI ]. In the said case the facts were that the appellant therein had supplied Quick Heal brand Anti- virus Software key/codes to the end users through dealers/distributors without discharging the service tax liability on such transactions. It was further stated that the end user was provided with a temporary/non- exclusive right to use the Anti-virus Software as per the conditions contained in the End User License Agreement (EULA) and would, therefore, not be treated as deemed sale under Article 366(29A) of the Constitution. Thus, on the view that the supply of packed Anti-virus Software to the end user by charging license fee would amount to a provision of service and not sale, the Department had demanded service tax on the appellant. The impugned order in appeal upholding the demand along with applicable interest as well as imposing penalties, cannot sustain and is liable to be set aside. The appellant having displayed its bonafides by not only indicating the levy of sales tax on the invoice but also remitting the same and reflecting it in its sales tax returns, no malafide can be attributed to them. The imposition of penalties is unsustainable on this count too. Conclusion - The appellant s transaction with its customers constituted a sale of goods, and the license fee was rightly subjected to VAT. Appeal allowed.

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• 2025 (3) TMI 1247
  Classification of service - Construction of Complex Service or not - construction of two residential projects - extended period of limitation - penalty - HELD THAT:- It is undisputed that the appellant is engaged in a composite contract involving provision of service as well as transfer of property in goods. The appellants contention that they have discharged applicable VAT on the transactions also remains uncontroverted. It is found that the issue whether, service tax could be levied on Composite Works Contract prior to the introduction of the Finance Act, 2007, by which the Finance Act, 1994 came to be amended to introduce Section 65(105)(zzzza) pertaining to Works Contract, was a subject matter of dispute and litigation and was finally settled by the Hon ble Supreme Court in the case of Commissioner of Central Excise Customs, Kerala vs. Larsen Toubro Ltd. [ 2015 (8) TMI 749 - SUPREME COURT] . The services provided by the appellant in respect of the projects executed by them for the relevant period, being in the nature of composite works contract cannot be brought within the fold of construction of complex service and thus the impugned OIA upholding the impugned OIO confirming the demand along with applicable interest and imposing penalty, cannot sustain and is liable to be set aside on merits. Extended period of limitation - penalty - HELD THAT:- It is undisputed that the appellant has not collected service tax from the clients/customers during the relevant period and further the issue whether, service tax could be levied on Composite Works Contract prior to the introduction of the Finance Act, 2007, by which the Finance Act, 1994 came to be amended to introduce Section 65(105)(zzzza) pertaining to Works Contract, being a subject matter of litigation during the relevant period, evidences that the issue involved interpretational disputes. As such, no malafide can be attributed to the appellants warranting invoking of the extended period of limitation and the appellants contentions against invoking of extended period of limitation is also tenable. Conclusion - i) The composite works contracts cannot be subjected to service tax under the Construction of Complex Service category prior to the Finance Act, 2007 amendment. ii) No malafide can be attributed to the appellants warranting invoking of the extended period of limitation and the appellants contentions against invoking of extended period of limitation is also tenable. Appeal allowed.

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• 2025 (3) TMI 1246
  Relevant date for filing rebate claim - rebate claim made by the appellant is barred by limitation - no correlation regarding inward remittances - HELD THAT:- The issue is no more res integra and considering the decision of the Tribunal in the matter of Volkswagen India Pvt. Ltd. [ 2015 (11) TMI 349 - CESTAT MUMBAI] , it was held that the relevant date for claiming the rebate claim is from the date of payment of service tax only - As regarding the eligibility of the appellant, the claim was made only on 02.02.2009 against the payment of service tax made on 05.01.2008 for the period from April 2007 to June 2007. Fact being so, the said claim is beyond one year over from the date of payment of service tax and it is barred by limitation. As regarding the claim for the period from July 2007 to September 2007, the due date for filing the rebate claim was on 05.02.2009 and considering the submissions of refund claim on 02.02.2009, it is within the time limit and appellant is eligible for the rebate. Conclusion - The relevant date for filing a rebate claim under the Export of Service Rules is the date of payment of service tax, not the date of receipt of inward remittances. Appeal allowed in part.

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• 2025 (3) TMI 1245
  Liability of service tax - club membership fee/entrance fee and other services such as health club and fitness facilities, business auxiliary service etc. Levy of service tax on club membership fee - HELD THAT:- The issue regarding club membership fee is no longer res integra in as much as the issue stands settled in favour of the appellant in their own case by this Tribunal vide Final Order No. 21721/2018 dated 12.11.2018 [ 2018 (11) TMI 979 - CESTAT BANGALORE] . The issue is also stand settled by the Hon ble Supreme Court in the case of STATE OF WEST BENGAL Vs. CALCUTTA CLUB LIMITED [ 2019 (10) TMI 160 - SUPREME COURT ], wherein the apex court has observed that from 2005 onwards, the Finance Act of 1994 does not purport to levy Service Tax on members clubs in the incorporated form. - The demand against the appellant on Club or Association service cannot be sustained for the relevant period. Levy of service tax on Entertainment fee/Cultural program fee - HELD THAT:- The admission fee/entrance fee are also the amounts collected from individuals who are likely to become members, for which service tax has been demanded under the category of Club or Association service . The service tax on residential facilities (chamber service) provided by the appellant, the Commissioner in the impugned order states that it is meant for the members of the club and same is charged under Club or Association Service . The Health and Fitness services which is also meant for the members of the club, the demand is on these services in the Club or Association Services . All the above services are meant only for the members and in view of the apex court decision in the case of STATE OF WEST BENGAL Vs. CALCUTTA CLUB LIMITED [ 2019 (10) TMI 160 - SUPREME COURT ], the demands cannot be sustained. Levy of service tax on Business Support Services with regard to Outlet handling charges - HELD THAT:- It has been observed by the Commissioner that the assessee is providing necessary infrastructure support to the business or commerce being done by various entities to promote / sell their products in their premises of their club and hence this activity is clearly classifiable under the category of Business Support Service . It is further observed that the appellant has received huge amounts from various entities like M/s. Balajee Hotels and Real Estates, M/s. Bangalore Cold Storage, M/s. Life Style Services Pvt. Ltd. for providing infrastructural facilities to these organisations, which is rightly classifiable under Business Support Services . Since these services are in the nature of Business Support Services and they are not meant for the club members but various outside organizations, it is found that the Commissioner has rightly confirmed these demands. Commission received from UTI Bank towards the credit cards swiping charges - HELD THAT:- The commission earned by providing services to the clients of an entity is clearly taxable under the Business Auxiliary Services and hence, the assessee is liable to pay the service tax on the said commission received for providing the service. With regards to the contention of the assessee that every business entity allowing the swiping of the cards should come under the purview of the tax, the same is agreed with. Several entities receiving the said commission are paying service tax after crossing the exemption limit of commission amount of Rs.10 lakhs received during a financial year. In view of this, there are no reason to disagree with the impugned order, hence, the same is being upheld. Conclusion - i) The doctrine of mutuality applies to club membership fees, exempting them from service tax. ii) Charges deemed as penalties or subject to state entertainment tax do not attract service tax. iii) Outlet handling charges are taxable under Business Support Services, and commissions from banks are taxable under Business Auxiliary Services. iv) The extended period of limitation is not applicable, and penalties are not warranted. Appeal disposed off.

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• Central Excise

• 2025 (3) TMI 1244
  Maintainability of petition when efficacious statutory alternative remedy of appeal under section 35F of the Central Excise Act, 1944 (the CEA Act, 1944) is available to the petitioner - HELD THAT:- The Apex court in the case of Hindustan Coca Cola Beverage Private Limited Vs. Union of India and others, [ 2014 (9) TMI 585 - SUPREME COURT ] has held that when a statute provides for statutory appeal, the said remedy is to be availed by the litigating parties. In the case of Hameed Kunju vs. Nazim [ 2017 (7) TMI 1414 - SUPREME COURT ], the Apex Court has held that any petition under Article 227 of the Constitution of India should be dismissed in limine where there is statutory provision of appeal. The Apex court in the case of Ansal Housing and Construction Ltd. Vs. State of Uttar Pradesh and others [ 2016 (3) TMI 1435 - SUPREME COURT ], has held that when statutory appeal is provided then the said remedy has to be availed. In the case of Godrej Sara Lee Ltd. [ 2023 (2) TMI 64 - SUPREME COURT ], the Apex Court has held that High Court can only interfere in the matters when disputed question of law are involved and not in the question of facts. In the present case, no disputed question of law is involved. In the present case, it is evident that sufficient opportunity of hearing through virtual mode was provided to the petitioner on 28.11.2024, 13.12.2024, 20.12.2024 27.12.2024 but neither the petitioner nor his authorised representative attended the personal hearings on the above dates. Thus, the contention of the petitioner with regard to non-grant of opportunity of personal hearing is contrary to the record and is hereby rejected. Conclusion - The petitioner s writ petition is not maintainable and the same is dismissed, granting the petitioner the liberty to pursue the alternative remedy of appeal as provided under the Central Excise Act, 1944. Petition disposed off.

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• 2025 (3) TMI 1243
  Process amounting to manufacture or not - job work activities - liability to pay excise duty despite the principal manufacturers not filing the necessary declarations as per N/N. 214/86 CE - onus to prove - invocation of extended period of limitation - penalties under Rule 25 of the Central Excise Rules, 2002, read with Section 11AC of the Central Excise Act, 1944. HELD THAT:- It is a cardinal principle of adjudication that the adjudicating authority has a bounden duty to address the contentions raised in the reply to show cause notice and pass an order either accepting the contentions or reject them, while stating reasons for the decision so taken. Indisputably the aforesaid contentions of the appellant, raised before both, the adjudicating authority and the appellate authority, has not elicited any rebuttal from both of them. Without specifically rebutting the contentions, merely the fact that the appellant is engaged in manufacturing parts of Motor Vehicle Speedometer, parts of Power-Driven Pumps, parts of Textile Machinery parts of Press Tools cannot lead to any automatic assumption that the job worked goods are also such parts as the onus is on the Revenue to prove that the appellant has indeed manufactured dutiable goods. The Honourable High Court of Bombay in the case of Annapurna Engineering Corpn v ACCE, Div-I Nagpur [ 2010 (9) TMI 369 - BOMBAY HIGH COURT ] has held that failure to pass a reasoned order resulted in miscarriage of justice. While we would have ordinarily remitted the matter back for denovo adjudication, given the efflux of time of nearly a decade and the quantum of revenue involved, we think that this is a fit case where the indolence of the adjudicating and appellate authorities ought not to result in protracting the litigation for the appellant for no fault of the appellant and instead the benefit ought to enure to the appellant. A coordinate bench of this Tribunal in its decision in Southern Plywoods v CCE (Appeals), Cochin [ 2009 (2) TMI 331 - CESTAT, BANGALORE ], have found that non consideration of all the submissions of the appellant and passing the orders without discussion thereon renders the order liable to be set aside. Accordingly, we hold that the impugned OIA is liable to be set aside on this ground alone. It is not the case of the Revenue that the goods cleared by the appellant are further not utilised by the principal manufacturers in their manufacture, rather it has been found that the goods received from the job worker (i.e. the appellant) are further used in the manufacture of parts of motor vehicles, pumps, machineries etc. The denial is solely on the ground that on enquiry with the jurisdictional ranges of the Principals it is found that the Principal manufacturers have not filed declarations under the said notification 214/86 CE ibid. Extended period of limitation - HELD THAT:- The appellate authority has upheld the invoking of extended period of limitation as a natural corollary of non payment of duty and incorrect adoption of valuation which came to the knowledge of the department only through scrutiny by Audit. The said finding, is not in consonance with the requirement of statute. In the absence of any positive evidence let in by the department of wilful suppression of facts or misstatement with intent to evade payment of duty, the invocation of extended period is untenable, more so when the appellant were under the bonafide belief that their activity does not amount to manufacture as they were only clearing semi-finished goods manufactured out of the raw materials supplied to them by the principal manufacturer and clearing the same to the principal manufacturer - even otherwise the demand is substantially also barred by limitation. Conclusion - i) The procedural lapses by principal manufacturers should not negate substantive benefits to job workers. ii) The invocation of the extended period of limitation requires explicit evidence of wilful suppression, which was absent in this case. The demand is barred by limitation. Appeal allowed.

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• 2025 (3) TMI 1242
  Justification in demanding duty by allowing the valuation of the goods manufactured by the appellant job worker, in view of the amendment to Rule 10A of the Central Excise Valuation Rules, 2000 - HELD THAT:- The facts not in dispute are that the Appellants had been engaged by M/s.Marico Ltd. (hereinafter referred to as the Principal Manufacturer) for the purpose of job work and the Appellants had manufactured the impugned goods out of the raw materials supplied by the principal manufacturer. The appellants had cleared the goods to the principal manufacturer who in turn had captively consumed the goods for further manufacture. The appellants had adopted the value comprising the cost of materials used and conversion charges following the principles laid down by the Apex Court in the case of Ujagar Prints Ltd [ 1989 (1) TMI 124 - SUPREME COURT] . Admittedly, the FAA has applied Rule 10(A)(iii) in the case on hand to hold that the valuation as prescribed thereunder would apply for determination of the value of the excisable goods. He thus upholds the demand of duty, but however, penalties imposed by the original authority in respect of both the appeals are set aside. The appellant here-in has challenged the duty demand confirmed against them, while the revenue has accepted the deletion of penalties on these appellants. Conclusion - The valuation of goods manufactured on a job work basis should align with the Supreme Court s ruling in Ujagar Prints, which considers the cost of materials and conversion charges. The impugned orders in appeal cannot sustain insofar as the duty demand which is challenged in these appeals is concerned - Appeal allowed.

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• 2025 (3) TMI 1241
  CENVAT Credit - input services or not - services provided by call centres - services used for sales promotion or not. As per P. K. Choudhary, Member (Judicial) HELD THAT:- From the bare reading of the definition of Input Service , as defined under Rule 2(l) of the Cenvat Credit Rules, 2004, it is clear that, the definition is divided into two parts, i.e. (i) Means- Clause and (ii) Inclusive- Clause. Further, vide Notification No. 3/2011-CE (NT) an Exclusion-Clause was included in the definition. The services excluded were Construction Service, Rent-a-Cab Service, General Insurance Service for motor vehicles and Repair Service. The Cenvat credit in relation to these services is allowable either to certain service providers only or on the satisfaction of certain conditions. Furthermore, the services that are used primarily for personal use or consumption of any employee like outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club etc. are also excluded from the definition of the input services. In the present case, the Appellant is receiving the service of Call Centres which helps in building brand image of the Appellant which ultimately leads to sale of the final products. Such sale being the goal of undertaking the activity of manufacture and the aforementioned services having been received in relation to sale of the final product manufactured by the Appellant, can be said to have been used in relation to manufacture of the final product of the Appellant. Hence, they qualify as an input service. The services in relation to Sales Promotion have nexus with the manufacturing activity as sale is the most logical conclusion of manufacturing activity and any effort made to boost the sale is bound to influence the manufacturing. Therefore, credit in question is admissible to the Appellant. There is no provision in the format of the ER-1 Returns to mention the amount of Cenvat credit availed under each service category or transaction-wise. Only the total availment of Cenvat credit is required to be reflected in the return. Therefore, the finding that the Appellant did not inform the Department of such availment of Cenvat credit on the said services is unsustainable. Suppression of facts or not - demand of interest and penalty - time limitation - HELD THAT:- The present case involves interpretational issues involving complex legal provisions to determine the correct admissibility of Cenvat credit. It is a settled position that a case involving interpretation of the statutory provisions cannot be construed to be a case of wilful misstatement or suppression of facts, with intent to evade payment of tax or avail Cenvat credit in a fraudulent manner. As per Section 11AC of the Act read with Rule 15 of Cenvat Credit Rules, 2004 the penalty can be imposed only in cases of fraud, collusion, wilful misstatement or suppression of facts or contravention of provisions of Excise Act with an intention to evade payment of duty. There are no ingredient to indicate that the Appellant contravened any provisions of law as they did not avail any credit in contravention of any provisions of law. According to Rule 14 read with Section 11AA, interest is chargeable only when any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded or Cenvat credit has been erroneously taken and utilized. The situations contemplated under Rule 14 as well as under Section 11AA are absent in this case. Therefore, where the demand of Cenvat credit is itself liable to be set aside, as a necessary consequence, interest is also not payable. The impugned order is set aside and appeal is allowed. As per Sanjay Srivastava, Member (Judicial) CENVAT Credit of input services - services provided by call centres - sales promotion services or not - HELD THAT:- In respect of input services there is no requirement for admissibility of credit that services should received within the registered manufacturer/premises of the appellant till the time loose nexus can be established between the use of the services directly or indirectly in relation to output goods being manufactured by the appellant. The credit in such cases need not be denied. Issue has been decided by Hon ble Bombay High Court in the case of M/s Coca Cola India Pvt. Ltd. [ 2009 (8) TMI 50 - BOMBAY HIGH COURT] where it was held that It is therefore, clear that the burden of service tax must be borne by the ultimate consumer and not by any intermediary i.e. manufacturer or service provider. In order to avoid the cascading effect, the benefit of cenvat credit on input stage goods and services must be ordinarily allowed as long as a connection between the input stage goods and services is established. Conceptually as well as a matter of policy, any input service that forms a part of the value of the final product should be eligible for the benefit of Cenvat Credit. The services of ASC and DSC availed by the appellant definitely go to enrich the value of the output goods cleared by them by creating a brand image for the appellant. Hence, in terms of the Rule 2(l) of Cenvat Credit Rules, exists between the said services and the goods being cleared by the appellant. There are no merits in the order denying the Cenvat credit in respect of these services. As the demand is being set aside, penalties imposed and demand for interest is also set aside. Conclusion - i) The services provided by call centres qualify as input services under Rule 2(l) of the Cenvat Credit Rules, 2004, as they are related to sales promotion and brand building, which are integral to the manufacturing process. ii) There are no evidence of fraud or suppression by the appellant, and thus, penalties and interest were not justified. The impugned order cannot be sustained - appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (3) TMI 1240
  Entitlement for the benefit of ITC as claimed under the provisions of U.P. Value Added Tax Act read with the corresponding provisions of Section 16 as well as Section 140(1) of the GST Act read with Rule 21(1)(y) of the Value Added Tax Rules - entitlement to the benefit of I.T.C. to the dealer when the business has been discontinued by the dealer on 30.06.2017. Whether after introduction of new GST Act from 01.07.2017, the registered dealers were entitled for the benefit of unutilized ITC accrued under the UP VAT Act though having closing stock? HELD THAT:- Under the VAT Act, the food-grains were exempted on its purchase, subject to certain conditions and the same were liable to be taxed on its sale. The benefit of ITC can only be availed on fulfillment of certain conditions as contemplated under section 13(1)(a) of the VAT Act. The unutilized ITC has to be debited or carried forward as per the sub-sections of section 13 of the VAT Act. Similar view has been expressed under rule 21(1) of the Rules. Perusal of section 13(1)(a) of the VAT Act clearly demonstrates that the earned ITC can be utilized on the sale, subject to the conditions as mentioned in the table. The ITC can only be claimed on fulfillment of certain conditions as contemplated herein-above. Section 13(6) of the VAT Act and rule 21(1)(y) of the UP VAT Rules contemplate that in the event ITC is unutilized and the registered dealer discontinued its business and the closing stock is there, then the dealer has to debit the unutilized ITC. The registered dealer cannot be permitted to utilize earned ITC for the said period. The case in hand, it is admitted between the parties that the opposite party has not sold the purchased goods and there was closing stock. Until unless the last tax period of the assessment year during which business has been discontinued after adjustment of the tax liability by-passing the assessment order for such assessment year, if any excess amount of ITC is left, then only section 15(5) of the VAT Act will come into play and not otherwise - By plain reading of section 15 of the VAT Act, it is clear that the available ITC can only be refunded after passing of the assessment order for that assessment period in which the business was discontinued after adjustment of tax liability. Once the opposite party registered dealers, by operation of law, discontinued its business, it was the duty cast upon the opposite party dealer to debit their ITC as contemplated under section 13(6) of the VAT Act. The Tribunal has failed in its duty while allowing the appeal of the opposite party by overlooking the provision of section 13(6) of the VAT Act. Conclusion - The Tribunal erred in allowing ITC benefits without adhering to the VAT Act s provisions, particularly section 13(6), and that the business was deemed discontinued by law, requiring ITC debiting. The impugned judgements are set aside - All the revisions are allowed.

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• Indian Laws

• 2025 (3) TMI 1239
  Removal of word settlement used in the loan account statement as it may affect future loan facilities being availed by the appellant - apartments purchased by the appellants are ready and some minor work remains which the builder may complete forthwith and hand over possession to the appellants - builder has not issued acknowledgment of the payments made by the appellants - HELD THAT:- Considering the facts and circumstances of the case and the fact that upfront payment has been made by the borrower/appellants under orders of this Court, the loan account should be closed treating it as repaid or fully paid up. The learned counsel appearing for the builder, upon instruction, stated that the possession would be handed over on or before 31.03.2025. This takes care of the second issue raised. Conclusion - i) The Bank will accordingly make the necessary incorporations in their records. ii) As stated by Mr. Kadam, learned counsel for the builder, let possession of the apartments, fully completed in all respects as required under law, be handed over to the appellants on or before 31.03.2025. iii) With respect to the third issue, the amount having been paid by the appellants to the builder by way of Bank transfer, even if no receipt is issued, the proof of payment is certified by the Bank, but still, the builder is directed to issue acknowledgment in writing to have received the entire due amount. iv) One last thing which remains is that the Bank, which had initiated recovery proceedings before the Debt Recovery Tribunal or before any other Forum with respect to the loan in question of the four appellants, shall forthwith withdraw the same, in view of the loan having been satisfied in all the four cases. v) Further, appellant Ravi Agrawal or any other appellant who had initiated proceedings before the Real Estate Regulatory Authority shall withdraw such cases. Appeal disposed off.

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