TMI Tax Updates - e-Newsletter
March 5, 2025

Case Laws in this Newsletter:

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

Articles

1. SUPREME COURT ON ARREST PROVISIONS IN INDIRECT TAXES

   By: Dr. Sanjiv Agarwal

2. Reverse Charge Mechanism (RCM) on Legal Services under GST (GST on Advocate or Firm of Advocates)

   By: Tushar Malik

3. Brainstorm ideas on De-bonding of EOU

   By: YAGAY andSUN

4. Persistent Bio-Accumulative & Toxic (PBT) Chemicals - An Introduction.

   By: YAGAY andSUN

5. Disposing of Empty Contaminated Chemical Drums & Containers.

   By: YAGAY andSUN

6. Common Mistakes to Avoid in Annual Return Filing for Pvt Ltd

   By: Ishita Ramani

7. ‘Perquisites’ as per section 17 as it is and as it will be after amendments proposed.- Complications, litigation are discussed to highlight need to simplify provisions for the head ‘salaries’ which should be simple and easy to understand and implement.

   By: DEVKUMAR KOTHARI and CA UMA KOTHARI

8. Single Use Plastic – The Eternal Curse!Question:  Why the Curse still exist, despite of banning it in India? [Environmental Laws – Single Use Plastic (SUP)].

   By: YAGAY andSUN

9. Sewage Treatment Plants (STPs) in the Indian Context: A Detailed Analysis [ENVIRONMENTAL LAWS - WATER TREATE & MANAGEMENT]

   By: YAGAY andSUN

10. Israel’s Water Technology and Management: What India and Indians Can Learn from Israel About Water Management.[ENVIRONMENTAL LAWS - WATER TREATEMENT AND MANAGEMENT]

   By: YAGAY andSUN

11. How Zero Liquid Discharge (ZLD) Works: An Introduction​​​​​​​[ENVIRONMENTAL LAWS]

   By: YAGAY andSUN

12. Zero Liquid Discharge (ZLD) - An Introduction[Environmental Laws]

   By: YAGAY andSUN

News

1. GST collection rises by 20pc to Rs 9,925 cr in Feb

2. Mizoram govt presents Rs15,198 cr budget, allocates 75pc more in flagship scheme

3. PM Modi to participate in post-Budget webinar on employment on March 5

4. 2025-25 UP Budget's theme is 'priority to deprived': Yogi Adityanath

5. Rs 161 cr in Budget for developing temples under Devsthan dept: Rajasthan minister

6. China hints at hiking defence budget; says peace can only be secured with strength

7. Budget inflated, written with ink dipped in lies: Tejashwi

8. J-K Budget Session after 7 years, MLAs evoke satisfaction

9. PM Modi to participate in three post-budget webinars on March 4

10. Himachal govt approves tabling CAG report in assembly's budget session

11. BJP accuses AAP of trying to hide its failures by avoiding budget discussion in MCD

12. Nayab Saini chairs pre-budget consultation meeting in Panchkula

13. Petrol to be cheaper by Re 1 in Chhattisgarh; pro-people plans focus of Rs 1.65 lakh cr budget

14. Eye on polls, Bihar's Rs 3.17 lakh-crore budget focuses on women empowerment, farmers, infra

15. PM Shri Narendra Modi addresses Post Budget Webinar on Manufacturing, Exports and Nuclear Energy

16. Govt steadfast in easing regulatory burdens, taking steps to make India export-friendly: Sitharaman

17. IIFT Signs MoU with APEC – Antwerp/Flanders Port Training Center, Belgium to Strengthen Trade and Logistics Education

18. Government Scales Up PLI Budget to Accelerate Manufacturing

Notifications

GST - States

1. 308-F.T. - dated 25-2-2025 - West Bengal SGST

Seeks to notify date under sub-section (1) of Section 128A of WBGST Act.

2. 281-F.T. - dated 20-2-2025 - West Bengal SGST

Seeks to appoint Sri Jaydip Kumar Chakrabarti, Senior Joint Commissioner of State Tax as a member of the West Bengal Authority for Advance Ruling.

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/AFD/AFD-POD-1/P/CIR/2025/29 - dated 3-3-2025

Relaxation in timeline for reporting of differential rights issued by AIFs

Customs

2. PUBLIC NOTICE No. 19/2025 - dated 19-2-2025

Single Unified Multi-Purpose Electronic Bond in Customs- Ekal Anubandh - reg.

Highlights / Catch Notes

GST

• GST Department Barred from Coercive Recovery After Time Limit Extension Under Section 168A CGST Act Challenged

  Case-Laws - HC : HC granted interim relief against coercive action following show cause notices issued under extended time limits per Section 168A CGST Act notifications. Petitioner challenged validity of notifications dated December 28, 2023 and January 16, 2024 that extended statutory time limits under Sections 73/74. Following precedent from Aspect Integrated IT case, court found strong prima facie case meriting stay, particularly regarding notification validity and consequent order legitimacy. Parties retain liberty to reapply based on Supreme Court's eventual determination of the matter. Order digitally authenticated by court registry.
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• Input Tax Credit Appeal Delay Condoned After Appellant Deposits 10% Pre-requisite Amount Under Section 107(6b) CGST Act

  Case-Laws - HC : HC determined the appeal delay was justifiable in a GST input tax credit dispute. The appellant had deposited pre-requisite amounts before formal appeal dismissal. Manual filing was permissible in December 2022 with no prohibition notifications. Electronic filing was impossible until the order's upload on GST portal on 17.01.2023. The appellant complied with Section 107(6b) of CGST Act by depositing Rs.82,000 in GST Electronic Cash Ledger and submitting via speed post. The Court condoned the delay, noting substantial compliance with statutory requirements including 10% pre-deposit of tax liability. The procedural delay was deemed insufficient grounds for dismissal given the appellant's efforts to meet statutory obligations. Petition allowed.
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• Milling Services to Government for PDS Atta Production Qualify as Exempt Composite Supply Under Entry 3A

  Case-Laws - AAR : AAR determined that milling services provided to State Government qualify as composite supply with milling as principal supply. The services involve crushing wheat into fortified wholemeal atta and packaging. The supply relates to Public Distribution System, a function entrusted to Panchayat under Article 243G. Total supply value was Rs. 260.48, with goods component (fortification and packing) at Rs. 60.00, constituting 23.03% of total value. Since goods value is below 25% threshold and service relates to Panchayat^OC"Os constitutional function, the composite supply qualifies for exemption under Sl. No. 3A of Notification 12/2017-Central Tax (Rate), as amended.
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• Central GST Show Cause Notice Quashed as State GST Audit Already Initiated Under Section 70 for Same Tax Issues

  Case-Laws - HC : State GST authorities initiated audit proceedings where petitioner acknowledged tax shortfall based on audit findings. Subsequently, Central GST issued show cause notice on same matter. HC quashed the impugned order, holding that audit constitutes "proceedings" as per G.K. Trading Company precedent. The court determined that Central authorities' summons under section 70 was issued after state audit commenced, constituting parallel proceedings on identical subject matter. Following Liberty Oil Mills interpretation of "investigation" as evidence collection process, HC found dual proceedings impermissible. Since both state and central actions concerned same tax issues, and state proceedings began first through audit, the petition was allowed and central proceedings were invalidated.
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• Input Tax Credit Claims Under Section 16(5) CGST Act Valid Despite Time Limits When Filed Before November 2021

  Case-Laws - HC : HC quashed order denying Input Tax Credit (ITC) claim under CGST Act. Following precedent in Sri Ganapathi Pandi Industries case, Court held that despite limitation under Section 16(4), petitioner entitled to claim ITC for FYs 2017-18 to 2020-21 due to retrospective amendment introducing Section 16(5) effective from 01.07.2017. Department restrained from initiating proceedings against petitioner based on limitation grounds where claims filed before 30.11.2021. Amendment's retrospective application overrides original time limitation restrictions, enabling taxpayers to avail previously time-barred ITC claims within new prescribed timeframe. Petition allowed with costs.
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• Registration Cancellation Invalid: GST Officials Failed to Verify Business Closure Before Canceling Active Taxpayer's Registration Under Section 29

  Case-Laws - HC : HC overturned GST registration cancellation where authorities had cancelled registration upon finding business premises closed during inspection. Petitioner demonstrated regular tax payments and returns filing, explaining temporary 10-day closure due to proprietor's overseas travel during Diwali holidays. Court found this explanation genuine and directed GST Network to restore registration within one week. Petitioner ordered to file pending returns with applicable taxes, interest, and late fees within 4 weeks of restoration. Court emphasized that registration cancellation was premature without proper verification of business cessation, particularly given petitioner's consistent compliance history and valid explanation for temporary closure.
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• Government Must Reimburse 6% GST Rate Difference After Rate Hike From 12% to 18% Within Three Months

  Case-Laws - HC : HC ruled on GST reimbursement dispute between petitioner and government entity. Acknowledging State GST Department's confirmation of rate increase from 12% to 18%, court directed respondent to reimburse petitioner for differential GST amount of 6% for period January 1-24, 2022. Payment must be made within three months of certified order copy receipt. Non-compliance will attract 6% per annum interest from entitlement date. Court disposed petition despite alternative remedy availability under Arbitration Act, considering direct involvement of GST authorities and rate enhancement confirmation.
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• Industrial Policy Benefits Must Be Extended Within 3 Months As Per Modified Clauses 9(a) and 9(b)

  Case-Laws - HC : HC directed respondents to extend industrial promotion policy benefits to petitioner within 3 months. While respondents acknowledged petitioner's construction investment per appellate authority's order dated 05/01/2022, they denied benefits under Clauses 9(a) and 9(b) of 22/06/2018 policy, citing ineligibility under 2014 policy. Court noted that post-GST implementation, State issued circular dated 22/06/2018 modifying previous policy. Finding respondents' denial unjustified, HC mandated compliance with appellate authority's order, requiring extension of benefits as per modified policy provisions.
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• Works Contract Services for Railway Infrastructure Development Qualifies for 12% GST Rate Under Concessional Notification

  Case-Laws - HC : HC held that works contract services for railway infrastructure development executed between petitioner and RVNL qualifies for concessional GST rate of 12% under relevant notifications. The term "railway" in notification extends beyond Indian Railways to include works pertaining to railway infrastructure broadly. The contract involving track doubling, construction of bridges, platforms, maintenance facilities and associated infrastructure constitutes "original work pertaining to railway." Court rejected narrow interpretation based on Indian Railways Act definition, noting exemption provisions should not be restricted by importing external conditions. Impugned orders demanding 18% GST were set aside as they contradicted existing advance rulings and would create legal inconsistency. Petition allowed confirming 12% tax rate applicability.
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• Statutory Body's GST Assessment Upheld: Previous Tax Exemptions Don't Create Estoppel Against Current GST Provisions Under Section 107

  Case-Laws - HC : HC dismissed writ petition challenging GST assessment of statutory body under Kerala Khadi & Village Industries Board Act. Court held that despite previous VAT and service tax exemptions, GST Act provides no explicit exemption or zero-rated status for petitioner's products. Prior statutory exemptions cannot create estoppel against current GST provisions. Petitioner directed to pursue statutory remedy through appeal before Appellate Authority under Section 107 of CGST Act. Court preserved petitioner's right to pursue available statutory remedies against the assessment order while dismissing the writ petition.
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• Municipal Property Tax Reimbursements from Lessees Must Include GST on Total Value Under Section 15 of GST Act

  Case-Laws - AAR : Municipal property tax reimbursements by lessee/occupier are subject to GST as part of the taxable value of supply under Sec 15 of GST Act. AAR ruled that municipal taxes levied under Kolkata Municipal Corporation Act 1980, being distinct from CGST/WBGST/UTGST/GST Compensation Acts, must be included in the supply value for GST calculation. The authority determined that the total taxable value comprises both the municipal property tax component and the base supply value, with GST applicable on the aggregate amount. This interpretation aligns with the valuation principles established under GST legislation for comprehensive tax assessment on reimbursement transactions.
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• Pure Agent Status Confirmed: No GST on Electricity Cost Recovery When Landlords Pass Through Actual Charges Under Rule 33(a)

  Case-Laws - AAR : AAR ruled that reimbursement of electricity charges collected on actual basis from sub-lessees is not subject to GST. The applicant, acting as a pure agent under Rule 33(a), merely recovers the exact electricity costs charged by electricity boards/DISCOMs from sub-lessees. Evidence showed the applicant's invoices matched the original electricity bills, demonstrating a pass-through arrangement. Following recent GST clarifications, property owners and managers collecting actual electricity costs are deemed pure agents for this supply. The reimbursement amount is excluded from the value of supply, and consequently, no GST liability arises on such electricity charge recoveries.
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• Supply of Veterinary Unit Staff on Contract Basis Not Exempt from GST as Healthcare Service Under 12/2017-CT

  Case-Laws - AAR : AAR ruled that supply of Mobile Veterinary Unit (MVU) personnel on contractual basis for implementing veterinary healthcare schemes does not qualify for GST exemption under N/N. 12/2017-Central Tax (Rate). The authority distinguished between direct veterinary services and manpower supply, noting that the applicant merely provides contractual staff to the implementing agency rather than operating as a veterinary clinic. The ruling established that two separate supplies occur: first between applicant and implementing agency, then between agency and government department. Since the applicant's service constitutes manpower supply rather than direct veterinary healthcare, it falls outside the scope of exemptions under notification entries 3, 3A, 5, 6, and 46.
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Income Tax

• Investment Allowance Assessment Reopening Quashed: Tribunal Erred on Depreciation Disclosure Requirements for Trial Production Machinery

  Case-Laws - HC : HC quashed Tribunal's order regarding reopening of assessment based on alleged non-disclosure of unabsorbed investment allowance. The Tribunal erroneously concluded that depreciation claims for trial production machinery weren't shown in computation statements, despite no such requirement existing. Examining orders under s.143(3) and reassessment order dated 29.10.1999, AO had thoroughly considered depreciation based on complete disclosure by assessee. Finding no failure in true and full disclosure of material facts, HC deemed Tribunal's rejection of Misc. Application perverse. Matter remanded to Tribunal for fresh de-novo order, with assessee's Misc. Application allowed.
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• Income Tax Assessment Order Invalid: Fundamental Flaws in Faceless Assessment and Section 144C Compliance Render Order Void

  Case-Laws - HC : HC held assessment order invalid due to fundamental procedural defects in implementing Faceless Assessment Scheme. Original order failed to qualify as Draft Assessment Order (DAO) under s.144C(1), lacking statutory requirements for assessee response. Department's subsequent corrigendum attempting to retroactively designate order as DAO was ineffective, as 30-day objection period under s.144C(2) had already lapsed. Court rejected Revenue's argument that errors were minor, finding them fundamental to jurisdictional validity. Demand notice under s.156 cannot be nullified through mere corrigendum. Non-compliance with s.144C statutory requirements not protected by s.292BB savings clause. Questions 1-3 answered in assessee's favor, invalidating assessment order.
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• Tax Demands Based on Quashed FIR Invalidated Due to Lack of Independent Investigation and Concrete Evidence

  Case-Laws - HC : HC invalidated ex-parte assessment order and demand notices that were solely based on a previously quashed FIR. The department failed to conduct independent investigation or provide concrete evidence of petitioner's alleged earnings during the relevant assessment year. The court emphasized that tax demands cannot be created merely on assumptions and presumptions, particularly when the foundational evidence (FIR) had been nullified through a compromise between parties. Assessment orders were set aside as the department failed to establish actual income through independent investigation or substantiating evidence, making the tax demand legally untenable.
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• Interest Under Section 234A Recalculated for 80-Month Delay in Filing Returns After Missing September 2011 Deadline

  Case-Laws - AT : ITAT upheld the Assessing Officer's rectification order regarding interest calculation under Section 234A(1)(a). The assessee failed to file returns by the due date of September 30, 2011, and only submitted returns on May 10, 2018, following a Section 148 notice. The period of default was correctly revised from one month to eighty months. Interest was chargeable for every month or part thereof from the day after the due date until the actual filing date. The Tribunal confirmed the AO's computation was in accordance with statutory provisions, finding no grounds for interference with the rectification order. The appeal was dismissed with costs against the assessee.
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• Tax Addition Under Section 153A Quashed: Pre-Search Statements Without Supporting Evidence Cannot Establish Bogus Purchases

  Case-Laws - AT : ITAT ruled against Revenue's addition under s153A for alleged bogus purchases. Assessment was based solely on pre-search statements from ML and DK without supporting incriminating materials discovered during search operations. Assessee provided complete quantitative details backed by tax audit reports, with no discrepancies except statements and STRs from Investigation Wing. Tribunal emphasized that circumstantial evidence and statements alone cannot constitute incriminating material without corroborative proof. Mere reliance on statements recorded prior to search, without additional evidence gathered during search proceedings, failed to establish bogus purchases. Assessment order quashed due to lack of incriminating material found during search.
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• Mining Department Must Collect Tax at Source on Compounding Fees from Unauthorized Mineral Operators Under Section 206C

  Case-Laws - AT : ITAT upheld CIT(A)'s decision confirming assessee's liability to collect TCS on compounding fees received from illegal miners and transporters of minerals. The tribunal determined that since the assessee received payments equivalent to 10 times the normal royalty amount from unauthorized operators, they were obligated to collect TCS under Section 206C. The assessee's argument against TCS applicability was rejected as lacking substance. Having failed to collect required TCS, the assessee was correctly designated as 'assessee-in-default' under Section 206C(6). The tribunal affirmed the lower authorities' interpretation, noting consistency with previous rulings on identical issues regarding mineral royalty collection and TCS obligations.
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• Capital Gains Calculation for Inherited Property Must Consider Original Owner's Acquisition Date, Not Gift Transfer Date

  Case-Laws - AT : ITAT held that when computing capital gains for inherited/gifted property acquired pre-1981, the "first year asset held" refers to original ownership by previous owner, not date of gift transfer. Assessee correctly computed indexed cost of acquisition from April 2001 base date. Regarding property valuation, comparative sale instances must consider full ownership rights - 25% undivided share properties require upward adjustment. AO's determination of indexed acquisition cost was reasonable after examining documentation and explanations. The assessment order represented a plausible interpretation that was neither erroneous nor prejudicial to Revenue's interests. PCIT's revision under s.263 was unsustainable. Assessee's appeal allowed.
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• Penalty Waived: Multiple Cash Receipts From Farmers Treated As Separate Transactions Under Section 269ST

  Case-Laws - AT : ITAT set aside penalty under s271DA for cash receipts exceeding Rs. 2 lakhs, finding reasonable cause in taxpayer's interpretation of s269ST's "single transaction" language. Taxpayer maintained proper documentation of agricultural sellers including Aadhar, land records and Form 60, with no evidence of tax evasion. Distinguished from s40A(3), s269SS and s269T which use "aggregate" terminology. Being first year of new provision, taxpayer's bona fide belief that limit applied per individual receipt rather than cumulative total was plausible. Following Supreme Court precedent that penalties are quasi-criminal requiring more than technical breach, ITAT deleted penalty noting proper accounting and absence of black money allegations.
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• Educational Institution's Conversion to Section 8 Company Upheld for Tax Exemption Under Section 10(23C)(vi)

  Case-Laws - AT : ITAT allowed appeal concerning approval under s.10(23C)(vi) for educational institution converted from society to Section 8 Company. CIT(E) rejected approval citing new objects including medical facilities in memorandum. ITAT held medical centers and clinics are integral to medical education, providing practical training. No evidence showed assessee conducted activities beyond education. Original educational operations continued as going concern post-conversion. Matter remanded to CIT(E) to verify revised objects and grant approval after confirming removal of contested clauses. Conversion from society to company did not alter educational nature of institution's activities.
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Customs

• New Portal Launched for Container Scanning Status Verification - Mandatory for All Containerized Cargo from February 2025

  Circulars : Customs Commissioner at JNCH issued procedural guidelines for checking container scanning status through newly launched Container Scanning Division (CSD) portal. Stakeholders including customs brokers, importers/exporters, shipping lines, CFS operators, and port terminals can verify container scanning selection and examination status via csd.jnpa.in. The process requires entering container number, IGM number, and IGM date in the designated portal section. The directive streamlines container tracking procedures and enhances transparency in customs examination processes. Implementation effective from February 7, 2025, making scanning status verification mandatory through official CSD portal for all containerized cargo at JNCH.
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• Company's Post-CIRP Customs Duty Drawback Claims Extinguished Under IBC Section 31A Due to Non-Inclusion in Resolution Plan

  Case-Laws - HC : HC quashed customs duty drawback demand raised against a company post-CIRP acquisition. During CIRP moratorium, respondents failed to lodge drawback claims under Customs Act 1962 and Drawback Rules 2017. Since claims were not included in approved resolution plan, they stand extinguished per Sec 31A of IBC. Following Supreme Court precedent in Ghanashyam case, court held that claims brought during moratorium after adjudicating authority recorded claims are waived. Alternative remedy of appeal not required as legal position is well-settled that post-resolution plan approval, unincluded claims cannot be entertained. Petition allowed.
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• Gold Seizure Case Dismissed Under Section 128A(4A): Two-Year Delay and Lack of Evidence Invalidates Customs Penalties

  Case-Laws - AT : CESTAT ruled in favor of appellant, invalidating customs seizure and penalties due to procedural delays and insufficient evidence of smuggling. Commissioner (Appeals) took two years to conduct hearing and issue Order-in-Appeal, violating six-month timeframe under Section 128A(4A) of Customs Act 1962, without justification. Revenue failed to prove foreign origin of seized gold bars and ornaments (86.230 grams), while appellant consistently claimed legitimate purchase with supporting documentation from local residents. Tribunal emphasized Revenue's failure to discharge burden of proof regarding smuggled nature of goods and noted absence of chemical examination. Appeal allowed, impugned order set aside due to unexplained procedural delays and substantive deficiencies in Revenue's case.
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• Mixed Hydrocarbon Oil Classification Upheld Under CTI 27011990 After Lab Tests Confirm Product Not Automotive Diesel Fuel

  Case-Laws - AT : CESTAT held that imported Mixed Hydrocarbon Oil was correctly classified under CTI 27011990, not as Automotive Diesel Fuel under CTI 27101944. CRCL laboratory testing confirmed the product did not meet IS:1460:2005 standards for automotive diesel. The tribunal emphasized that classification burden lies with Revenue per SC precedent in H.P.L. Chemicals. Appellant's admission under investigation cannot alone determine classification without corroborating evidence. Department failed to substantiate misclassification allegations with legally admissible evidence. The appeal was allowed, setting aside the original classification order, confirming goods as Mixed Hydrocarbon Oil under CTI 27011990.
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DGFT

• DGFT Sets New Input-Output Norms for Metronidazole Gel Production Under SION A-3684 with Specified Import Ratios

  Circulars : DGFT exercised powers under paragraph 1.03 of FTP 2023 to establish new Standard Input Output Norms (SION A-3684) for Chemical and Allied Products. The notification specifies import-export ratios for Metronidazole Gel USP 1% in two packaging variants: 55gm pack requiring 0.561gm Metronidazole Micronized USP per pack, and 60gm tube requiring 0.612gm per pack. This administrative measure standardizes input-output quantities for manufacturing and export purposes, enabling manufacturers to accurately calculate import requirements against export obligations under various export promotion schemes.
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Corporate Law

• SFIO Investigation Reports Admissible as Evidence Under Section 212(14A), Not Limited by Section 212(15) Legal Fiction

  Case-Laws - AT : NCLAT determined SFIO investigation reports are admissible as evidence in proceedings under Section 212(14A) of Companies Act, 2013, despite being deemed equivalent to police reports under Section 173 CrPC. The Tribunal clarified that Section 212(15)'s legal fiction is limited to treating SFIO reports as police reports solely for charge framing purposes, not to make them inadmissible as evidence. Section 223(5) does not affect SFIO report admissibility in Section 212(14A) proceedings. The deeming provision's scope is restricted to its specific context and cannot be extended beyond statutory language. The compilation of documents and SFIO reports submitted remain admissible, with their evidentiary value to be determined during merit-based proceedings.
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IBC

• Supreme Court: Once Delay in Filing Rejoinder is Condoned Under IBC, Document Must Be Considered Fully for Section 7 Application

  Case-Laws - SC : SC overturned NCLAT and NCLT's rejection of Section 7 application, finding their approach excessively technical and formalistic. The initial tribunal had conditionally allowed filing of rejoinder affidavit after delay condonation but prohibited reliance on its contents - a contradictory stance that fundamentally undermined procedural fairness. The appellate body's affirmation of this position compounded the error. The Court emphasized that once delay is condoned, artificial restrictions cannot be imposed on utilizing the permitted document. This ruling reinforces the principle that procedural requirements should facilitate rather than obstruct substantive justice. Appeal sustained with directions to consider the application afresh including rejoinder submissions.
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• IFMS Security Deposits for Common Area Maintenance Not Considered Financial Debt Under IBC Section 5(8)

  Case-Laws - AT : NCLAT dismissed an appeal challenging the rejection of a Section 7 application regarding Interest Free Maintenance Security (IFMS). Following the SC's precedent in Global Credit Capital Limited, the tribunal examined whether IFMS constitutes a financial debt under IBC Section 5(8). The IFMS, paid by allottees for common area maintenance services, was determined not to be a financial debt as it lacked the essential element of "time value of money." The payment was merely a security deposit for future services to be provided by vendors/maintenance agencies. The tribunal upheld the Adjudicating Authority's finding that IFMS does not qualify as financial debt under IBC, as it fails to meet the fundamental requirement of disbursement against time value consideration.
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• Section 9 IBC Application Dismissed as Operational Debt Disputed Over Freight and Demurrage Charges Between Parties

  Case-Laws - AT : NCLAT reversed the admission of Section 9 application under IBC, finding the existence of a genuine dispute regarding operational debt. The tribunal determined that freight charges were not unequivocally admitted, as payment was conditional upon receipt of compliant debit notes. Regarding demurrage charges, correspondence evidenced ongoing disputes between parties, with Corporate Debtor consistently challenging the claimed amount. The tribunal emphasized that Section 9 proceedings cannot be initiated for disputed operational debts, and Adjudicating Authority's role is limited to examining dispute plausibility rather than final adjudication. Since conditions under Section 9 were not fulfilled due to pre-existing disputes on both freight and demurrage claims, the appeal was allowed and impugned order set aside.
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Indian Laws

• Consumer Complaint Limitation Period Starts from Last Correspondence, Not Initial Undertaking Date for Property Title Security

  Case-Laws - SC : SC determined the limitation period for filing a consumer complaint did not start from January 2015 when the indemnity undertaking was executed. While initial cause of action arose in July 2015 after six months expired, parties continued engagement through correspondence and meetings with respondent and escrow agent. The complaint's focus was securing title of already-possessed flats rather than seeking escrow release. NCDRC erred in its limitation calculation since appellants sought registration and prevention of third-party alienation, not flat possession. The limitation period applies differently when relief sought relates to title security of obtained property versus property acquisition. Appeal allowed, complaint deemed within time limitations.
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• General Power of Attorney with Agreement to Sell Cannot Create Property Interest Without Registration Under Section 17(1)(b)

  Case-Laws - SC : SC ruled that a General Power of Attorney (GPA) holder's concurrent possession of an Agreement to Sell does not automatically confer interest in the immovable property. The court emphasized that even contemporaneous execution of GPA and Agreement to Sell cannot establish the holder's interest without proper registration under Section 17(1)(b) of the Registration Act. The relationship between GPA executant and holder remains strictly principal-agent as per Contract Act principles. The mere labeling of GPA as 'irrevocable' does not make it so unless coupled with interest. The court dismissed the appeal, affirming that unregistered documents cannot create valid right, title, or interest in immovable property, thereby discouraging property transfers through GPA and Agreement to Sell route.
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Law of Competition

• Competition Commission's New Rules Set Payment Terms and Recovery Methods for Monetary Penalties Under Competition Act

  Notifications : The CCI regulations outline procedures for recovering monetary penalties imposed under the Competition Act 2002. Key provisions include: issuance of demand notices requiring payment within specified periods; authority to grant payment extensions or installments; imposition of 1% monthly interest on late payments; multiple recovery modes including attachment of property; and ability to refer cases to income tax authorities for recovery as tax dues. The regulations establish a systematic framework through prescribed forms and registers while empowering recovery officers to execute certificates. Notable features include provisions for refunds if penalties are reduced on appeal, maintenance of recovery registers, and mechanisms for dealing with defaulters. These 2024 regulations repeal and replace the 2011 regulations while preserving prior actions taken under the old framework.
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SEBI

• Companies Must Follow New Standardized KPI Disclosure Guidelines When Filing Draft Offers Under SEBI Act Section 11

  Circulars : SEBI mandates standardized KPI disclosure practices for companies filing draft offer documents and offer documents. Industry Standards Forum, comprising ASSOCHAM, CII, and FICCI representatives, under stock exchange oversight, has developed uniform guidelines for KPI reporting in compliance with ICDR Regulations. The circular requires issuers and merchant bankers to adhere to these industry standards for KPI disclosures. Effective April 1, 2025, these requirements apply to all draft offer documents and offer documents filed with SEBI or stock exchanges. The directive is issued under Section 11(1) and 11A of SEBI Act, 1992, read with regulation 299 of ICDR Regulations, aiming to enhance transparency and consistency in KPI reporting across industries.
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VAT

• Central Government Trust Selling Stressed Assets Must Pay VAT as Deemed Dealer Under Section 2(8) Going Forward

  Case-Laws - HC : Trust constituted by Central Government challenged its status as deemed dealer under MVAT Act for sale of stressed assets. HC held Trust qualifies as deemed dealer under Section 2(8) Explanation clause (x) as body constituted by Central Government. Despite ownership of loans and stressed assets through Transfer Deed, Trust's status as financial institution under RDDB Act 1993 and SARFAESI Act 2002 does not exempt it from MVAT obligations when selling movable property. However, considering Article 285 and Trust's bona fide belief of tax immunity due to its constitutional status, HC granted prospective effect to DDQ Order under Section 56(2), relieving Trust from past tax liabilities while maintaining future compliance requirements for movable property sales.
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Service Tax

• Service Tax Exemption for Waste Management Services Under Review Following Show Cause Notices Under Finance Act 1994

  Case-Laws - HC : HC declined to interfere with show cause notices regarding service tax exemption claims for Solid Waste Management services under Finance Act, 1994. Following precedent in Sapthagiri Cleaning Services case, court held that interpretation of work orders/contracts was necessary to determine applicability of exemption notification and non-chargeability of service tax. Citing VICCO Laboratories, HC emphasized writ interference at show cause stage only warranted in exceptional circumstances. Court set aside adjudication orders and remanded matters to post-show cause notice stage, allowing petitioners to file additional replies and raise exemption-related contentions. Question of whether service recipient (local authority) qualifies as registered business entity left open for authority's consideration upon remand.
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Case Laws:

• GST

• 2025 (3) TMI 178
  Maintainability of petition - availability of alternative remedy - transitional credit - whether in the teeth of Section 140 of the GST Act, was there any bar or prohibition for filing return in the GST portal of Telangana where the petitioner s branch admittedly exists? - it was held by High Court that The very foundation of show cause notice itself is bad in law and the assumption of respondent No. 2 that return could not have been filed in the GST portal of Telangana is not flowing from Section 140 of the Act. Therefore, the impugned action founded upon such notion is bad in law and deserves interference. HELD THAT:- There are no reason to interfere with the impugned judgment and order passed by the High Court. SLP dismissed.

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• 2025 (3) TMI 177
  Seeking to withdraw the writ petition - Challenge to demand raised in order passed u/s 73 of the WBGST/CGST Act, 2017 issued in Form GST DRC-07 - HELD THAT:- Without going into the issue as the whether the entire tax has been paid by the petitioner, the writ petition stands dismissed as withdrawn for the petitioner to take the benefit of waiver of interest and penalty in terms of Section 128(A) of the said Act. The interim order passed by this Court on 15th July, 2024, accordingly stands vacated.

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• 2025 (3) TMI 176
  Vires of extension of time limits specified under the CGST Act - Chellenge to N/N. 9/2023-Central Tax dated 31st March, 2023, N/N. 56/2023 Central Tax dated 28th December, 2023, N/N. 9/2023-State Tax dated 24th May, 2023 and N/N. 56/2023 dated 16th January, 2024 - HELD THAT:- In a similar matter, in the case of [ 2024 (7) TMI 1601 - BOMBAY HIGH COURT] , the Nagpur Bench of this Court has directed the Respondents in the said matter not to take any coercive action against the Petitioner. Here also, since the issue is whether the Notifications are valid and whether the impugned order could have been passed (especially, if Notifications dated 28th December, 2023 and 16th January, 2024 are set aside), a strong prima facie case is made out for granting interim relief to the Petitioner. Liberty granted to the parties to apply in the event the matter before the Hon ble Supreme Court is disposed of one way or the other.

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• 2025 (3) TMI 175
  Vires of extension of time limits specified under the CGST Act - Chellenge to N/N. 9/2023-Central Tax dated 31st March, 2023, N/N. 56/2023 Central Tax dated 28th December, 2023, N/N. 9/2023-State Tax dated 24th May, 2023 and N/N. 56/2023 dated 16th January, 2024 - HELD THAT:- In a similar matter, in the case of [ 2024 (7) TMI 1601 - BOMBAY HIGH COURT] , the Nagpur Bench of this Court has directed the Respondents in the said matter not to take any coercive action against the Petitioner. Here also, since the issue is whether the Notifications are valid and whether the impugned order could have been passed (especially, if Notifications dated 28th December, 2023 and 16th January, 2024 are set aside), a strong prima facie case is made out for granting interim relief to the Petitioner. Liberty granted to the parties to apply in the event the matter before the Hon ble Supreme Court is disposed of one way or the other.

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• 2025 (3) TMI 174
  Vires of extension of time limits specified under the CGST Act - Chellenge to N/N. 9/2023-Central Tax dated 31st March, 2023, N/N. 56/2023 Central Tax dated 28th December, 2023, N/N. 9/2023-State Tax dated 24th May, 2023 and N/N. 56/2023 dated 16th January, 2024 - HELD THAT:- In a similar matter, in the case of [ 2024 (7) TMI 1601 - BOMBAY HIGH COURT] , the Nagpur Bench of this Court has directed the Respondents in the said matter not to take any coercive action against the Petitioner. Here also, since the issue is whether the Notifications are valid and whether the impugned order could have been passed (especially, if Notifications dated 28th December, 2023 and 16th January, 2024 are set aside), a strong prima facie case is made out for granting interim relief to the Petitioner. Liberty granted to the parties to apply in the event the matter before the Hon ble Supreme Court is disposed of one way or the other.

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• 2025 (3) TMI 173
  Challenge to Notifications extending time limits for issuing show cause notice u/s 73/74- Extension of time limits specified under the CGST Act by Notification issued under Section 168A of CGST Act - HELD THAT:- It is found that in a similar matter in the case of Aspect Integrated IT Pvt. Ltd Vs. Union of India [ 2024 (7) TMI 1601 - BOMBAY HIGH COURT] , the Nagpur Bench of this Court has directed the Respondents in the said matter not to take any coercive action against the Petitioner. Here also, since the issue is whether the Notifications are valid and whether the impugned order could have been passed (especially, if Notifications dated 28th December, 2023 and 16th January, 2024 are set aside),we find that a strong prima facie case is made out for granting interim relief to the Petitioner. Liberty granted to the parties to apply in the event the matter before the Hon ble Supreme Court is disposed of one way or the other - This order will be digitally signed by the Private Secretary/ Personal Assistant of this Court.

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• 2025 (3) TMI 172
  Condonation of delay in filing appeal - Wrongful availment of Input tax credit - HELD THAT:- It appears that the pre-deposit amount was already deposited by the petitioner before formal dismissal of the appeal. It is informed to the Court that in the month of December 2022, filing of appeal through electronic mode was not mandatory and the appeal could be filed manually also. There is nothing on record to show that any notification has been issued by which the manual filing of appeal was prohibited in the month of December, 2022. An appeal through electronic mode could not be filed until and unless the impugned order is uploaded on the GST portal. In the present matter, the impugned order was uploaded on 17.01.2023 and therefore, the petitioner could not file the appeal through electronic mode earlier, therefore, petitioner has not committed any error in depositing Rs.82,000/- in his GST Electronic Cash Ledger and submitting the appeal through speed post. There was no failure on the part of petitioner in filing the appeal, within the prescribed period of limitation as well as depositing the mandatory amount in accordance with Section 107 (6b) of CGST Act, 2017. Merely, because the petitioner could not pay the mandatory amount through GST APL - 01 in the absence of uploading the Order in Original, petitioner cannot be held liable for transferring the amount in his GST Electronic Cash Ledger as no other option was available with the petitioner. In the facts and circumstances of the present case, the petitioner has sufficiently complied with the provisions of Section 107 and filed the appeal within condonable period and pre-deposited the amount through challan on 22.12.2022. Conclusion - This Court is of the view that the appeal should not be dismissed merely due to a procedural delay, especially when the petitioner has made an effort to comply with the statutory requirements, including the predeposit of 10% of the tax liability and additional payments towards the disputed tax amount. The delay in preferring the appeal is hereby condoned. Petition allowed.

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• 2025 (3) TMI 171
  Challenge to issuance of the SCN dated 29th November, 2024 under Section 73 of the WBGST/CGST Act, 2017 - HELD THAT:- Having considered the materials on record and noting that the challenge in the present writ petition is directed against the assumption of jurisdiction of the proper officer to issue a show-cause on 29th November, 2024, which the petitioner says to be barred by limitation, the writ petition which raises a jurisdictional issue in relation to exercise of authority to issue the aforesaid show-cause on 29th December, 2021 for the tax period April 2020 to March 2021, should be heard. At the same time, noting that the time to pass the order under Section 73(9) of the said Act would lapse on 28th February, 2025, the petitioners are directed to participate in the proceedings so that the proceeding can reach a logical conclusion. Considering the pendency of the writ petition and the nature of challenge, if any final order is passed, the same shall not be enforced by the proper officer without obtaining leave of this Court - List this matter in the Monthly List of April, 2025 under the heading Motion .

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• 2025 (3) TMI 170
  Challenge to impugned order - proceedings Versus inquiry - Separate proceedings by the state and central authorities - On the audit concluded (by the state GST), petitioner accepted relevant paragraphs in the report, to meet the short payment of tax. - HELD THAT:- State revenue had probed by initiating audit. In G.K. Trading Company [ 2021 (1) TMI 130 - ALLAHABAD HIGH COURT] view taken includes audit to be a proceeding. Undisputed fact is, the show cause notice issued by Central revenue was after commencement of audit. A summons issued under section 70 means the process of collection of evidence or gathering of material, as by interpretation of word investigation given by the Supreme Court in Liberty Oil Mills v. Union of India [ 1984 (5) TMI 236 - SUPREME COURT] with reference to investigation mentioned in provisions of Import and Export Control Act and Imports (Control) Order, 1955. There is also no dispute that subject matter of both proceeding are same. Impugned order is quashed - petition allowed.

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• 2025 (3) TMI 169
  Reversal of ITC claim - time limitation - HELD THAT:- The issue involved in the present Writ Petition, has been squarely covered by the common order of this Court in SRI GANAPATHI PANDI INDUSTRIES, REP. BY ITS PROPRIETOR VERSUS THE ASSISTANT COMMISSIONER (STATE TAX) (FAC) TONDIARPET ASSESSMENT CIRCLE, CHENNAI [ 2024 (10) TMI 1631 - MADRAS HIGH COURT] wherein, this Court has categorically held this Court considering the fact that the issue involved in all these Writ Petitions is only with regard to the availment of ITC, which is barred by limitation in terms of Section 16 (4) of the CGST Act, and in the light of the subsequent developments took place, whereby, Section 16 of the CGST Act was amended and sub-section (5) was inserted to Section 16, which came into force with retrospective effect from 01.07.2017, the petitioners are entitled to avail ITC in respect of GSTR-3B filed in respect of FYs 2017-18, 2018-19, 2019-20 and 2020-21 as the case may be, on or before 30.11.2021, is inclined to quash the impugned orders. The impugned order dated 28.04.2024 is quashed insofar as it relates to the claim made by the petitioner for ITC which is barred by limitation in terms of Section 16 (4) of the CGST Act, 2017 but, within the period prescribed in terms of Section 16 (5) of the said Act - the respondent-Department is restrained from initiating any proceedings against the petitioners by virtue of the impugned order based on the issue of limitation. Petition allowed.

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• 2025 (3) TMI 168
  Cancellation of GST registration of the petitioner, on the ground that the petitioner has not conducted any business in the declared place of business - HELD THAT:- In the case on hand, admittedly the petitioner has been paying the tax and filing the returns regularly. Since the petitioner s premises was closed at the time of inspection, the GST registration of the petitioner was cancelled, without ascertaining the fact whether the petitioner is carrying on the business or not. The reason given by the petitioner is that since the proprietor had gone to abroad during deepavali holidays, the business was closed for 10 days. The respondent without ascertaining the same has erred in coming to the conclusion that the petitioner was not carrying any business in the declared place. Therefore, this Court is of the view that the reason provided by the petitioner appears to be genuine. The respondents shall take suitable steps by instructing GST Network, New Delhi to make suitable changes in the architecture of the GST Web portal to allow the petitioner to file the returns and to pay the tax/penalty/fine, within a period of one week from the date of receipt of a copy of this order - The petitioner is directed to file returns for the period till date, if not filed, together with tax dues along with interest thereon and the fee fixed for belated filing of returns within a period of 4 weeks from the date of restoration of GST Registration of the petitioner. Conclusion - The Court s decision to set aside the cancellation order was based on the genuine reasons provided by the petitioner for the temporary closure of business. Petition disposed off.

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• 2025 (3) TMI 167
  Maintainability of the present petition - petitioner has an alternative remedy under the Arbitration Act - Seeking reimbursement of extra GST amount paid @ 6% - HELD THAT:- Respondent No.4 which is a State GST Department, according to which also the rate of GST has been enhanced from 12% to 18% and same is liable to be paid by respondent No.2 which is a Government Entity. The respondent No.2 is directed to pay the difference of GST amount to the petitioner @ 6% from 01.01.2022 to 24.01.2022 within a period of three months from the date of receipt of certified copy of this order, failing which the petitioner shall be entitled for interest @ 6% per annum from the date of entitlement. Petition disposed off.

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• 2025 (3) TMI 166
  Benefit related to industrial promotion policies of the State Government - petitioner has submitted that although the reply has been filed by the respondents but there is no reference of the order passed by the appellate authority which is binding on the respondents also as they have also not challenged the aforesaid order - HELD THAT:- On perusal of the reply, it is found that the respondents have already complied with the order passed by the appellate authority vide their order dated 05/01/2022 accepting the petitioner s investment towards the construction, however, its benefit has not been given to the petitioner as per Clause 9(a) and 9(b) of their policy dated 22/06/2018 citing that the benefit of 2014 policy cannot be availed by the petitioner. However, it is also found that subsequent to the policy of 2014 after introduction of GST regime on 01/07/2017, the respondents/State has already come out with a fresh circular dated 22/06/2018 modifying the aforesaid policy on which, the petitioner is relying upon. Thus, apparently, the respondents have not extended the aforesaid benefit to the petitioner. In such circumstances, this Court is inclined to allow the present petition and it is directed to the respondents to extend the benefit of the order passed by the respondents on 05/01/2022 (Annx.R/3) to the petitioner within a period of 3 months from today. Petition allowed.

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• 2025 (3) TMI 165
  Rejection of petitioner s claim for concessional rate of 12% on works contract services of original works executed pursuant to a contract entered with Tvl. Rail Vikas Nigam Limited - tax at 18% levied - whether the petitioner s contract with M/s. RVNL is entitled to the concession granted in terms of Sl. No. 3 (v) (a) of the notification, in other words liable to tax at 12%? Relevance of definition under Indian Railway Act, 1989 - HELD THAT:- It may be relevant to note that Railways , has not been defined under the GST Act. Thus, the expression railway employed in the above notification, ought to be understood applying the common parlance test. It is also relevant to keep in view that a definition contained in a particular enactment cannot be incorporated into another enactment unless the enactments are pari materia. The definition in one statute may not afford a guide to construction of the same words or expressions in another statute unless the same are pari materia legislations or specifically provided or incorporated in the other statute - The impugned order insofar as it looks to the definition of Railways as defined under the Indian Railways Act, to construe the scope and width of the notification is wholly misdirected. Applying the definition of Railways under Indian Railways Act, 1989 - HELD THAT:- On applying the definition of Railway as defined under IRA it appears that the contract between the petitioner and RVNL for doubling of track between Vanchi Maniyachchi to Nagercoil, construction of roadbed, minor bridges, platforms, buildings, water and effluent treatment facilities, wagon / coaching maintenance infrastructure, supply of ballast, installation of tracks and other electrical, signalling and telecommunication infrastructure in Madurai and Thiruvananthapuram Divisions of Southern Railway, would constitute Railway even under the definition of Indian Railways Act, more particularly covered under clauses (b), (c) and (d) to Section 2(31) of the Indian Railways Act. Expression Railway under the Notification Not confined to Indian Railway - HELD THAT:- If the expression railway employed in the notification were to be construed to be confined to Indian Railway in its operation it may produce results which are incongruous inasmuch as the relevant entry under the notification covers original works pertaining not only to railways but also Mono Rail and Metro Rail which is undisputedly not part of the Indian Railway. The reference to Mono Rail and Metro Rail is only to show that the object does not appear to be to grant concession under the relevant entry to the subject notification of the qua an entity instead the object / intent appears to be to extend the benefit / concession to industry / utility mentioned therein viz., Railway, Metro Rail and Mono Rail. Relevance of the expression pertaining to - HELD THAT:- The use of the expression pertaining to would show that the legislation intented to give an expansive meaning to the expression Railway . If we bear this in mind the contract in question for doubling of track between Vanchi Maniyachchi to Nagercoil, construction of roadbed, minor bridges, platforms, buildings, water and effluent treatment facilities, wagon / coaching maintenance infrastructure, supply of ballast, installation of tracks and other electrical, signalling and telecommunication infrastructure in Madurai and Thiruvananthapuram Divisions of Southern Railway, between the petitioner and RVNL, would constitute original work pertaining to railway for the purpose of the subject notification. Exemption not to be curtailed by importing conditions - HELD THAT:- The definition of Railway under the Indian Railway Act, 1989, may not be relevant in construing the subject notification. In any view, even applying the definition of Railway as defined under the Indian Railway Act, 1989, to the contract between the petitioner and M/s. RVNL which is for doubling of track between Vanchi Maniyachchi to Nagercoil, construction of roadbed, minor bridges, platforms, buildings, water and effluent treatment facilities, wagon / coaching maintenance infrastructure, supply of ballast, installation of tracks and other electrical, signalling and telecommunication infrastructure in Madurai and Thiruvananthapuram Divisions of Southern Railway, it appears to me from the discussion supra that it would still constitute original work pertaining to Railway for the purpose of the subject notification and thus covered under Sl.No. 3 (v) (a) of the said notification. Construction that leads to Consistency - HELD THAT:- It is trite law that consistency in law is as important as correctness, if not greater as held in Paper Products LTO vs. Commissioner of Central Excise [ 1999 (8) TMI 70 - SUPREME COURT ] - Thus the impugned order being contrary to Appellate Advance Ruling and Advance Ruling Authorities referred above would lead to uncertainity and inconsistency which ought to be avoided. Conclusion - The contract for doubling of track between Vanchi Maniyachchi to Nagercoil, construction of roadbed, minor bridges, platforms, buildings, water and effluent treatment facilities, wagon / coaching maintenance infrastructure, supply of ballast, installation of tracks and other electrical, signalling and telecommunication infrastructure in Madurai and Thiruvananthapuram Divisions of Southern Railway, between the petitioner and RVNL would be covered by Notification 11 of 2017 CGST (RATE) dated 28.06.2017 as amended vide Notification No. 20/2017 dated 22.08.2017, Notification No. 8 of 2017 Integrated Tax (Rate) dated 28.06.2017 and G.O. Ms. No. 94 dated 22.8.2017 CT RE and liable to tax at 12%. The impugned orders are set aside - Petition allowed.

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• 2025 (3) TMI 164
  Challenge to assessment issued u/s 73 of the Goods and Services Tax Act, 2017 - petitioner, a statutory body under the Kerala Khadi Village Industries Board Act, claimed exemption from GST based on previous exemptions from VAT and service tax - HELD THAT:- It is opined that notwithstanding the nature of services being carried out by the petitioner, the GST Act does not provide any exemption nor a zero rated tax for the products of the petitioner. In such circumstances, the claim for exemption based on the earlier statutes cannot have any legal basis. Further, there cannot be any estoppel against a statute. Since concededly, the taxing provisions of the GST Act is applicable to the petitioner, the contentions based on the earlier statutes have no bearing. Since Ext.P5 assessment order can be appealed before the Appellate Authority as provided under Section 107 of the Central Goods and Services Tax Act, 2017, this Court is of the view that the petitioner ought to be relegated to pursue such remedies. Conclusion - Reserving the liberty of the petitioner to pursue the statutory remedies against Ext.P5, this writ petition is dismissed.

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• 2025 (3) TMI 163
  TaxmannViolation of principles of natural justice - petitioners could not file reply to the notice, issued by the respondent-Authority as the same was not reflected on the GST Portal in the Notice section but it was uploaded under the Additional Notices/Orders tab on the Portal - attachment of bank account of the petitioners - HELD THAT:- Issue Notice for final disposal, returnable on 16th January, 2025.

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• 2025 (3) TMI 162
  Rectification of mistake apparent on the face of record - whether the services provided to Government entities are exempted services under the GST Act? - HELD THAT:- In terms of section 102 of the GST Act, the Authority or the Appellate Authority or the National Appellate Authority may amend any order passed by it under section 98 or section 101 or section 101C respectively, so as to rectify any error apparent on the face of the record, if such error is noticed by the Authority or the Appellate Authority or the National Appellate Authority on its own accord, or is brought to its notice by the concerned officer, the jurisdictional officer, the applicant appellant, the Authority or the Appellate Authority within a period of six months from the date of the order. Any mistake which is manifest, plain, or obvious may be regarded as a mistake apparent on the face of the record and thereby may be rectified invoking the provision of section 102. A rectification is done when there is an error which is apparent on the face of record in such decision or order or notice or certificate or any other document. Thus, errors which involves question of law cannot be rectified. The application for rectification of the order filed by the applicant cannot be accepted - application rejected.

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• 2025 (3) TMI 161
  Levy of GST on reimbursement of municipal property tax by the lessee/occupier - HELD THAT:- In terms of sub-section (1) of section 9 of the GST Act, tax in levied inter alia on the value determined under section 15 of the said Act. It has already been submitted by the applicant himself that section 15 of the GST Act deals with value of taxable supply - In this case, the municipal property tax levied under the Kolkata Municipal Corporation Act, 1980, being a tax other than the CGST Act/ WBGST Act/ UTGST Act/ GST (Compensation to States) Act shall therefore form a part of the value of supply on which GST will be levied. In the instant case, value of supply would be inclusive of municipal property tax and tax under the GST Act is payable on such value.

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• 2025 (3) TMI 160
  Levy of GST - reimbursement of electricity charges on actual basis - HELD THAT:- As per para (a) of explanation of rule 33, pure agent is a person who enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply of goods or services or both - In Circular No. 206/18/2023-GST dated 31st October, 2023 , it has been clarified that where the Real Estate Owners, Resident Welfare Associations (RWAs), Real Estate Developers etc., charge for electricity on actual basis that is, they charge the same amount for electricity from their lessees or occupants as charged by the State Electricity Boards or DISCOMs from them, they will be deemed to be acting as pure agent for this supply. In the instant case, the applicant has enclosed copy of electricity bill along with invoice issued by the applicant to its sub-lessee towards Reimbursement of power charges wherefrom it appears that applicant collects the actual cost of electricity consumed by the sub-lessee - The fact of the case involved in the instant case is identical to the clarification given in the Circular No. 206/18/2023-GST dated 31st October, 2023. The applicant here will be deemed to be acting as pure agent in regard to supply of electricity to its sub-lessee and the reimbursement amount shall not be a part of his value of supply. Conclusion - The applicant is not liable to pay GST on reimbursement of electricity charges on actual basis.

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• 2025 (3) TMI 159
  Scope of Advance Ruling application - whether the supply of processed sea food (frozen) like prawn and fish to industrial or institutional customers in industrial pack-not for retail sale is taxable or exempted? - HELD THAT:- The question on which advance ruling is sought by the applicant is found to be covered under clause (e) of sub-section (2) of section 97 of the GST Act. The applicant has been provided sufficient opportunities of being heard. The officer concerned from the revenue, relying on the FAQ issued vide F. No. 190354/172/2022 TRU dated 17.07.2022, has opined that the goods in question is exempted subject to fulfilment of certain conditions. Otherwise it would attract tax @ 5%. However, in absence of any submission supported by documentary evidences on behalf of the applicant, it is unable to decide whether the applicant supplies the goods in such manner as to attract exclusion provided under the said rule 3(c) of the Legal Metrological (Package Commodities) Rules, 2011.

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• 2025 (3) TMI 158
  Value of supply of services provided by the applicant company to the State Government - rate of tax applicable on the value of supply - inclusion of components in calculation of the % of value of goods in the total value of composite supply for the purpose of Notification No. 2/2018-Central Tax (Rate). HELD THAT:- The applicant has been selected for empanelment for crushing of wheat into wholemeal atta and fortify it by premixing of micro-nutrients containing Iron, Folic acid, Citrate, EDTA and Vitamins to a specific percentage. The agreement further requires the applicant to pack the crushed stock of wholemeal atta after fortification into properly labelled poly-packs having thickness of 50 microns or above. It, therefore, appears that the activities undertaken by them for milling of wheat into wheat flour, along with fortification and supplied upon packing of the same qualify the definition of composite supply under clause (30) of section 2 of the GST Act where the supply of services by way of milling is the principal supply. Whether this composite supply is made in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution? - HELD THAT:- Reference made to Para 3.1 of the Circular No. 153/09/2021-GST dated 17.06.2021 where it is stated that Public Distribution specifically figures at entry 28 of the 11th Schedule to the constitution, which lists the activities that may be entrusted to a Panchayat under Article 243G of the Constitution. Hence, the instant composite supply made by the applicant is found to be in relation to any function entrusted to a Panchayat under article 243G of the Constitution. Whether the value of supply of goods in this case exceeds 25 percent of the total value of the supply or not? - HELD THAT:- The contention of the applicant that the provisions of Rule 27(b) will be applicable for the instant case for the purpose of determination of value of supply has duly been considered. Rule 27 of the Central Goods and Services Tax Rules, 2017 and West Bengal Goods and Services Tax Rules, 2017 (collectively referred to as, the GST Rules) prescribes the manner of determination of value of supply where the consideration is not wholly in money. In terms of clause (b) of the said rule, the value of supply shall be the sum total of consideration in money and any such further amount in money as is equivalent to the consideration not in money, if such amount is known at the time of supply - the total value of supply to be Rs.260.48 out of which Rs.136.48 is the cash consideration and Rs.124.00 is the non-cash consideration, as it has been explained in the aforesaid memo. The value of goods involved in the instant supply stands at = Fortification Cost: Rs. 10.00 + Packing Charges: Rs. 50.00 = Rs.60.00 against total value of supply of Rs. 260.48, thereby the value of goods involved in the instant composite supply stands at = 60/260.48 x 100 = 23.03% of the total value of supply i.e., it does not exceed 25% of the value of the composite supply. The supply of services provided by the applicant company to the State Government is by nature a composite supply of services by way of milling of food grains into flour (atta) to the Government i.e. Food Supplies Department, Govt. of West Bengal for distribution of such flour under Public Distribution System (PDS) which is by way of an activity in relation to a function entrusted to a Panchayat under article 243G covered by entry in sl. no. 28 of the Eleventh Schedule appended to article 243G of the Constitution of India and where, as already discussed, the value of goods involved in the instant composite supply does not exceed 25% of the value of the composite supply. The instant supply of services by way of milling of food grains into flour (atta) to Food Supplies Department, Govt. of West Bengal for distribution of such flour under Public Distribution System is eligible for exemption under serial no. 3A of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, since the supply satisfies all the conditions specified in the said entry. Conclusion - i) The value of supply involved in this case relating to supply of services provided by the applicant company to the State Government is Rs. 260.48 which comprises of the consideration in money as well as non-cash consideration. ii) The supply of services provided by the applicant company to the State Government is by nature a composite supply of services by way of milling of food grains into flour (atta) to Food Supplies Department, Govt. of West Bengal for distribution of such flour under Public Distribution System and such is eligible for exemption under entry serial no. 3A of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, since the value of goods involved in such composite supply does not exceed 25% of the value of supply.

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• 2025 (3) TMI 157
  Eligibility for exemption benefit under N/N. 12/2017-Central Tax (Rate) dated 18.06.2017 (Sl. No. 3 or 5/6 or 46, as the case may be), as amended - applicant s supply of MVU personnel on contractual basis for implementation of Establishment and Strengthening of Veterinary Hospitals Dispensaries (ESVHD) - Mobile Veterinary Unit (MVU) under Livestock Health Disease Control (LH DC) Scheme - HELD THAT:- The Livestock Healthcare Disease Control Scheme is a flagship program of the Government of India, where the concerned State Government has been entrusted with the responsibility of developing further guidelines, including delineating roles and responsibilities of all functionaries at different levels. The West Bengal Livestock Development Corporation Limited, under the administrative control of the Department of Animal Resources Development, Govt. of West Bengal, is the project implementing agency for such Livestock Healthcare Disease Control Scheme and is one of the designated Service Providers for operating MVUs in the allotted districts of West Bengal. West Bengal Livestock Development Corporation Limited directed the applicant to supply MVU personnel purely on contractual basis, maintaining the guidelines of the tender applicable in this case as well as MVU guidelines issued by the competent authority from time to time. The applicant is required to, inter alia, supply labour/manpower for running the production at different units of the West Bengal Livestock Development Corporation Limited. The applicant has, accordingly, been supplying MVU personnel and raising tax invoices from time to time - Admittedly the applicant makes supply of labour/manpower for running the production at different units of the West Bengal Livestock Development Corporation Limited. In the instant case, the West Bengal Livestock Development Corporation Limited has entered into an agreement with the applicant for supply of MUV personnel on contractual basis for which the applicant issues invoices to the aforesaid implementing agency. Admittedly, the West Bengal Livestock Development Corporation Limited is liable to pay the consideration to the applicant for the supply. The applicant has furnished a copy of tax invoice which has been raised to the Managing Director, West Bengal Livestock Development Corporation Limited holding GSTIN 19AABCT0907D1ZP. Thus, West Bengal Livestock Development Corporation Limited undisputedly is the recipient of supply provided by the applicant meaning thereby the applicant doesn t make any supply to the Department concerned. Whether the applicant who is merely supplying MVU personnel on contractual basis for implementation of Establishment and Strengthening of Veterinary Hospitals Dispensaries (ESVHD) - Mobile Veterinary Unit (MVU) can be regarded as a veterinary clinic? - HELD THAT:- In the instant case, two separate supplies take place. The first one is made by the applicant to West Bengal Livestock Development Corporation Limited and thereafter another supply is made by West Bengal Livestock Development Corporation Limited to the Department concerned, i.e. the Department of Animal Resources Development, Govt. of West Bengal. The expression veterinary clinic has not been defined in the GST Act. However, in common parlance, a veterinary clinic means a building or part of a building where animals are provided with treatment or medication including diagnosis, surgery, general health care and observation. Here the applicant is merely a supplier of manpower services on contractual basis for running a Mobile Veterinary Unit. Thus, such supply of manpower made by the applicant cannot be held as a supply of services by a veterinary clinic in relation to health care of animals or birds and hence such supply fails to qualify for exemption benefit under Sl. No. 46 of the Notification No. 12/2017-Central Tax (Rate) dated 18.06.2017 as amended. Conclusion - The applicant s supply of MVU personnel on contractual basis for implementation of Establishment and Strengthening of Veterinary Hospitals Dispensaries (ESVHD) - Mobile Veterinary Unit (MVU) under Livestock Health Disease Control (LH DC) Scheme is not eligible for exemption benefit under Sl. No. 3 or 3A or 5 or 6 or 46 of the Notification No. 12/2017-Central Tax (Rate) dated 18.06.2017, as amended till date.

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• Income Tax

• 2025 (3) TMI 156
  Expenses incurred are excessive u/s 40A(2)(b) - Applicability of provisions of section 44BBB - HC [ 2024 (2) TMI 1531 - DELHI HIGH COURT] held that material particulars had been duly placed before the DRP and the AO failed to justify the invocation of the said provision. ITAT has further found that the Department had failed to produce any material or establish from the record that the expenses claimed were inflated or unjustified. Also assessee was not executing a turnkey power project to attract applicability of provisions of section 44BBB HELD THAT:- We do not find any good ground and reason to interfere with the impugned judgment and, hence, the present special leave petition is dismissed.

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• 2025 (3) TMI 155
  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 - scope of Incriminating material. As decided by HC [ 2024 (4) TMI 461 - DELHI HIGH COURT] abatement of the six AYs or the relevant assessment year would follow the formation of that opinion and satisfaction in that respect being reached - Jurisdictional AO would have to firstly be satisfied that the material received is likely to have a bearing on or impact the total income of years or years which may form part of the block of six or ten AYs and thereafter proceed to place the assessee on notice u/s 153C. The power to undertake such an assessment would stand confined to those years to which the material may relate or is likely to influence. Absent any material that may either cast a doubt on the estimation of total income for a particular year or years, the AO would not be justified in invoking its powers conferred by Section 153C. HELD THAT:- There is a delay of 185, 155, 97, 190, 186 and 171 days in filing the Special Leave Petitions respectively which have not been satisfactorily explained. Even otherwise, we have gone through the Special Leave Petition and do not find any merit in the same. Special Leave Petitions are therefore, dismissed on the ground of delay as well as on merits.

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• 2025 (3) TMI 154
  Benefit of exemption u/s 11 12 - Section 13(1)(b) applicability - delay of 306 days in preferring this petition before SC - HELD THAT:- The High Court seems to have taken the view that the assessee is a religious society working for the benefit of a particular community and therefore is entitled to the benefit of exemption under Sections 11 12 of the Act, 1961 respectively. However, prima facie it appears that the High Court overlooked the fact that the society has been registered under Section 12A of the Act, 1961 as a charitable institution/organisation. Issue notice on the application for delay as well as on the main matter.

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• 2025 (3) TMI 153
  Bogus Long Term Capital Gain - sale of shares of Global Capital Markets Ltd., a penny stock - period of holding of shares - AO that the price movement of the company were not supporting by financial fundamentals of the company - ITAT deleted addition - HC [ 2023 (12) TMI 1422 - GUJARAT HIGH COURT] held Assessee has sold shares after seven years and therefore, the proximity of time between the buy and sale of shares cannot be considered as an accommodation entry in penny stock company within a short period of about one year to book bogus of Long Terms Capital Gain or loss to defraud the Revenue. AO and CIT(A) have ignored such facts which were considered by the Tribunal to arrive at a finding of fact that the assessee has to be treated as an investor and cannot be treated to have engaged in fraudulent activity or manipulation activity. HELD THAT:- No reason to interfere with the impugned order passed by the High Court. The Special Leave Petition is, accordingly, dismissed.

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• 2025 (3) TMI 152
  Entitlement to interest for delayed payment of refund under the Direct Tax Vivad Se Vishwas Act, 2020 - HELD THAT:- It is true that the petitioner is not entitled to interest under Section 244A of the Income Tax Act, 1961, however, when the petitioner has opted for direct tax for Vivad se Visvas Scheme 2020 and filed the application which was approved by the designated authority and refund order is also passed as per the said scheme on 12/05/2022 by the Jurisdictional Assessing Officer, the petitioner was entitled to the interest on the amount of refund till the same was paid to the petitioner. The respondents are therefore liable to pay the interest on the amount of refund. Without considering whether it is a fault on part of the petitioner to validate the bank account or whether any negligence on part of the respondents for not releasing the amount of refund, we direct the respondents to pay the amount of interest at the rate of 6% per annum as per the calculation provided to us amounting to Rs.22,04,104/- for twenty months from 01/06/2022 to 31/01/2024 considering the entire month on amount of Rs. 2,20,41,042/- within a period of three months from the date of receipt of copy of this order.

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• 2025 (3) TMI 151
  Tribunal disposing of the Appeal by observing the fact that the petitioner did not disclose truly and fully all the particulars necessary for the assessment - reopening of the assessment on the ground that no unabsorbed investment allowance was available for Assessment Year HELD THAT:- Tribunal has erroneously observed the fact as to whether the depreciation has been claimed on the machinery installed for trial production has not been shown in the computation statement . It appears that the Tribunal has lost sight of the fact that in the computation statement, there is no requirement of showing that the depreciation has been claimed on machinery installed for trial production. On perusal of the Assessment Orders passed u/s 143 (3) of the Act dated 30th March, 1994 as well as the Reassessment Order dated 29.10.1999, it appears that the Assessing Officer has considered the issue of depreciation in detail on the basis of the information provided by the petitioner as well as considering the fact that the petitioner has disclosed truly and fully all the facts necessary for the assessment. The findings of the Tribunal while rejecting the Misc. Application of the petitioner appear to be perverse. Tribunal has failed to consider that there is no failure on the part of the assessee about disclosing truly and fully all material facts necessary for the assessment and therefore, the view taken by the Tribunal is erroneous on face of the record. Tribunal order is hereby quashed and set aside and the Misc. Application filed by the petitioner is allowed and the matter is remanded back to the Tribunal to pass a fresh de-novo order.

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• 2025 (3) TMI 150
  Validity of order u/s 144C(1) - errors in the implementation of the Faceless Assessment Scheme - notices sent prior to framing assessment - Order did not meet the requirements of a DAO as it lacked the necessary stipulations for the assessee to respond - HELD THAT:- The officer has made reference to the statutory requirement under Section 144C(2) of the Act, which requires an assessee on receipt of a DAO, to either indicate acceptance or file objections to the DAO proposals with the DRP within 30 days. The officer then blames the assessee for neither filing its acceptance nor objections with the DRP within the time provided. The fact of the matter was that such statutory option was never extended to the assessee. Hence, the assessee could not have complied with the statutory requirement as order of assessment dated 27.12.2010 does not extend such option as it ought to have. The corrigendum stating that order dated 27.12.2010 may be taken to be a DAO has itself been issued only on 21.02.2011, two months after order dated 27.12.2010. Hence, the period of 30 days provided in terms of Section 144C(2) has expired by then and the attempt of the Department to circumvent the issue and pin the blame for its error on the assessee is nothing short of a travesty of its statutory responsibilities under that provision. Importantly, a demand accompanying an assessment order is a statutory demand in terms of Section 156 of the Act, which states that when any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under this Act, the assessing officer shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable . The recovery of the demand under that notice is as per the modes of recovery under Section 226 of the Act. There is hence, a sanctity attached to a demand under a notice under Section 156 of the Act that cannot be wished away merely by issuing a letter styled as a corrigendum . If at all such demand is to be extinguished, the order under which such demand was raised ought to be reversed in a manner known to law. Notices sent prior to framing assessment dated 27.12.2010, do not adhere to the statutory stipulations of Section 144C of the Act and such aberrations in law are not saved by virtue of Section 292BB. Court has held that all irregular, erroneous or illegal orders cannot be held to be non est as there is a distinction between orders that are null and void on the one hand, and those that are irregular, wrong or illegal, on the other. We are of the view that the above judgement, rather than advancing the case of the Revenue, would support the case of the assessee. We disagree with the Tribunal in its conclusion that the errors committed by the Department in this matter are insignificant and have assigned reasons in the paragraphs supra in support of our conclusion that the errors committed are fundamental to the assumption of jurisdiction and go to the root of the matter. In light of the fact that we have upheld the validity of order as a regular assessment, we answer substantial questions 1 to 3 in favour of the assessee and adverse to the revenue.

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• 2025 (3) TMI 149
  Validity of ex-parte assessment order and subsequent demand notices issued - assessment order was passed on the basis of aforesaid FIR lodged by daughter of petitioner No.1 - HELD THAT:- The foundation of impugned assessment orders is FIR No.3 dated 01.01.2001 which stands quashed by this Court on the basis of compromise arrived at between the parties. The respondent-department concededly has neither conducted independent investigation nor brought on record evidence to the effect that petitioner actually earned aforesaid amount during the relevant assessment year. In the absence of any concrete evidence, demand cannot be created on assumptions and presumptions. Thus, we are of the considered opinion that present petition deserves to be allowed and accordingly allowed.

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• 2025 (3) TMI 148
  Unexplained investments u/s 69 - Estimation of income at the rate of 8% on total deposit in bank account and cash deposit in the bank accounts of the assessee - HELD THAT:- We find that the assessee is running a cold storage and receiving rentals for renting out the space. During the year, the assessee s total receipt was Rs. 1,80,64,642/- and total expenses was Rs. 1,80,52,273/- and thus, the net profit was only Rs. 12,368/-. We note that the assessee has incurred huge expenses on the electricity and various other expenses which aggregated to Rs. 1,80,52,273/-. We have also observed from the perusal of the bank statements of the two banks that assessee at no point of time has any substantial money accumulating in these bank accounts. Therefore, the theory invoked by the ld. AO that assessee has unexplained investments u/s 69 of the Act is wrong and against the facts on record. It is only for this reason the addition made by the ld. AO u/s 69 of the Act is ordered to be deleted by setting aside the order of ld. Commissioner of Income-tax (Appeals). Second addition on estimation - We note that the ld. AO has applied 8% on other deposits in the bank accounts/ aggregate to Rs. 71,62,220/-. We observe from the profit and loss account, that the assessee has a very meagre profit of Rs. 12,368/- and therefore, such estimation which is devoid of any basis cannot be sustained. Accordingly, the addition made by the ld. AO is ordered to be deleted by setting aside the order of ld. CIT (A) and the appeal of the assessee is allowed.

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• 2025 (3) TMI 147
  Correct amount of the interest u/s 234A - HELD THAT:- As per clause (a) of sub-section 1 to section 234A, interest is to be charged for every month or part of a month comprised in the period commencing on the date immediately following the due date till the ending on the date of furnishing of the return. Due date for filing of return of income in the case of assessee was 30th September 2011. Undisputedly assessee had filed the return of income for the first time in response to notice u/s 148 on 10.5.2018 and no return was filed u/s 139 thus assessee is liable for interest u/s 234A as provided in section 234A(1)(a) of the Act. Since the AO vide rectification order has corrected the period of default in filing the return by the assessee from one month to eighty months which is in accordance with the provisions of section 234(1)(a) thus, there is no error in such order. Decided against assessee.

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• 2025 (3) TMI 146
  Bogus Purchases - AO has primarily doubted the purchases only on basis of transportation of the goods being suspicious - HELD THAT:-Quite apparently the assessee has provided all the relevant and necessary evidences to the ld. AO to establish genuineness of the purchases. However, with out commenting anything on same and unable to point any deficiency in these documentary evidences the AO has relied oral statements. Further these observation of AO are based upon the statements recorded by AO behind the back of assessee and were not confronted to assessee during the course of assessment proceedings and thus, any observations based on such statements could have been relied upon. CIT(A) has highlighted the observation of Ld. AO in his remand report that Sh. Mohan Lal Gupta in his statement has mentioned certain facts which are contradictory. Thus Ld. CIT(A) has casted a doubt over reliability and credibility of the statement of Sh. Mohan Lal Gupta and concluded that appellant has indeed undertaken some manipulation in terms of prices. However, this observation of Ld. CIT(A) is without establishing as to what was transaction under taken with Sh. Mohan Lal Gupta in the impugned year. We find that with very general observations the ld. Tax authorities have proceeded to doubt the purchases. As far doubting the use of transport vehicle is concerned, it is not the case of ld. AO that the assessee was making payments to the transporters. Then the owners of the transport agencies duly appeared before Ld. AO and their statement was record which are on record wherein they have confirmed the fact that goods were transported by them to the assessee company and the payments for the same were made by the suppliers. Thus for any discrepancy if any left in details of vehicles used cannot be basis to doubt the wholesome evidences of bills etc filed by the assessee. Thus, in view of the above we are of the considered view that the addition made by AO and sustained by Ld. CIT(A) is without any basis. Addition on account of alleged suppressed profit embedded in purchases from bogus entity - When the genuineness of the purchases have also been accepted here above by us therefore addition of profit embedded in such purchases cannot be sustained. Addition on the basis of seized tally data alleging the same to be data of sale made by assessee outside the books - The said document which shows that this document does not even bears the name of the appellant. Moreover, perusal of this document would show that the nomenclature of this documents is Sales Register whereas documents is named as Hygienic Purchase A/c . This ambiguity establishes that this document neither pertains to assessee nor shows any out of book sales of assessee. Thus no addition could have been made on the basis of document not found from control and possession of assessee. Addition on the ground that stock found during the survey - We find that the copy of profit and loss a/c of assessee for the period 01.04.2013 to 31.01.2014 which shows that assessee has shown closing stock in the books as on 31.01.2014 at Rs. 4,15,79,778/- and thus the comparison drawn by Ld. AO on 28.02.2014 could not be taken into consideration. Even otherwise without any basis, evidence or material the valuation was arrived and same deserves to be deleted. Unexplained sales - documents found and seized by search party RU-1 and marked as annexure A-39 shows the sales made by assessee of Rs. 24,26,94,374/- however, assessee failed to reconcile the same to the tune of Rs. 19,83,94,520/- - letter filed by Mr. Sanjeev Kumar before Ld. ADIT(inv.) making surrender in his hand and further submitting the working which is enclosed at PB 292-295 and same shows that assessee has surrendered 3% profit i.e. Rs. 78,99,000/- on total un-reconciled turnover of Rs. 26,33,00,000/- (PB 295) which includes un-reconciled turnover of Rs. 10,28,69,230 in the case of assessee in AY 2014-15 based on the said seized document in his personal capacity. PB 288A-290 is the copy of ITR and computation of Mr. Sanjeev Kumar for AY 2014-15 perusal of which would show that he has surrendered total income of Rs. 3,61,00,000/- which includes above mentioned surrender of Rs. 78,99,000/-. Thus no addition could have been made in the hands of assessee on the basis of the said seized documents and same has rightly been deleted by Ld. CIT(A).

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• 2025 (3) TMI 145
  Assessment u/s 153A - addition on account of alleged bogus purchases - as alleged no incriminating material found during the search HELD THAT:- Without there being any incriminating material found during the search and merely relying on the statements recorded alone cannot be the basis of addition. Moreover, in the present case, the statements recorded prior and after the search were heavily relied to make the addition without there being any incriminating material or any mismatch of purchase or closing stock brought on record to be treated as incriminating material found during the search. In our considered view, the assessee has submitted all the relevant quantitative details of raw material supported by tax audit report for the impugned assessment years under consideration and no discrepancies were brought on record except on the basis of statements recorded from Mohan Lal Gupta and Devender Kumar prior to search and also heavily relied on the 3 STRs forwarded by the Investigation Wing. There is no incriminating or corroborative evidence with the Revenue in conformity with the statements given by Mohan Lal Gupta and Devender Kumar. They made the statements prior to search and the Revenue must have gathered supporting evidence in line with the statements recorded. Merely relying on circumstantial evidences without there being any corroborative evidence cannot be treated as incriminating material. Therefore, the assessment order is quashed.

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• 2025 (3) TMI 144
  Liability for making TCS on compounding fees received from illegal miners, illegal transporters and for illegal storage of minerals on which royalty is payable - CIT(A) confirmed AO order - HELD THAT:- Authorized Representatives of both the parties in the backdrop of the order passed by the Tribunal in the case of District Mining Officer, Bemetara [ 2023 (8) TMI 31 - ITAT RAIPUR ] as held that the assessee in the case before us had not only received royalty from the illegal miners/transporters of minerals as it would have in the normal course received in case of a regular lease or license, but in fact was in receipt of 10 times of royalty amount from them, therefore, the contention of the Ld. AR that the assessee was not exigible for collection of tax at source (TCS) on the amounts received from the illegal miners/transporters of minerals being devoid and bereft of any substance is liable to be rejected. We, thus, in terms of our aforesaid observations, finding no infirmity in the view taken by the lower authorities that the assessee who was liable to collect tax at source (TCS) on the amounts received from illegal miners/transporters, having failed to do so, was to be treated as assessee-in-default u/s. 206C(6) of the Act, uphold the same. As the CIT(Appeals) had followed the view taken by the Tribunal qua the identical issues, therefore, finding no infirmity in the same, we uphold his order. Decided against assessee.

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• 2025 (3) TMI 143
  Revision u/s 263 - capital gain on sale of residential house -determination of cost of acquisition in respect of residential property sold by the assessee - valuation of the fair market value (FMV) of the property as on April 1, 2001 - HELD THAT:- In the instant case, where the assessee s father acquired the property prior to the 01/04/1981 and thereafter the property has been gifted to the assessee which has been sold in the year under consideration while computing capital gain the term first year in which the asset was held by the assessee as so interpreted by the Courts to means the year in which asset was first held by the previous owner and not the year in which the assessee became the owner of the asset in terms of the gift deed. We therefore find that even on this account, where the assessee has computed the Index cost of acquisition by taking into consideration cost of inflation index for the year beginning first day of April 2001, the same is in consonance with the stated provision in the statute and where the AO has verified and allowed the same, the order so passed by the AO cannot be held to be erroneous in so far as prejudicial to the interest of the Revenue. Valuation report of a registered valuer so submitted by the assessee during the course of assessment proceedings and the findings of the Ld. PCIT - We find force in the contention so advanced by the Ld AR as what is relevant for determining the fair market value is the comparative sale instance not just in terms of land area, built up structure, proximity of location but also the ownership rights and inherent risks associated with such ownership and therefore, where the assessee has sold a property having 100% ownership rights, the comparative sale instance where the seller holds 25% undivided share has to be suitably grossed up rather than discounted as currently done by the Valuer and where the adjusted value is considered, there is no prejudice which is caused to be Revenue as the same is on a higher side as compared to what has been considered by the assessee. AO, after calling for required information/documentation and after duly considering the explanations and documentation submitted before him, reached a rightful conclusion in terms of determining the indexed cost of acquisition while working out the capital gains in the hands of the assessee. Such a view is clearly a plausible view which a reasonable and prudent officer could have taken and the view so taken and order so passed by the Assessing officer cannot be held to be erroneous in so far as prejudicial to the interest of the Revenue and the exercise of revisional jurisdiction by the Ld. PCIT u/s 263 cannot be sustained in the eyes of law. Appeal of the assessee is allowed.

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• 2025 (3) TMI 142
  Reopening of assessment - returned loss under the head income from other sources on account of interest income earned, having claimed huge interest expenses against the same, and further noting that as per section 57(iii) this interest expenses were allowable only when they were incurred for the purpose of earning interest income - case of the CIT was that the assessee s claim of interest expenses was not examined by the AO in the light of the provisions of section 57(iii) while passing his order u/s 147 allowing the entire claim of interest expenses. HELD THAT:- PCIT, we find has completely misdirected himself in his finding of error in the order of the AO. While he finds the order erroneous for the AO not having examined claim of the assessee to interest expenses against interest income earned, in terms of section 57(iii) of the Act, the scope of which is to allow only those expenses incurred wholly and exclusively to earn income, the error found by him actually relates to genuineness of the said expenses, which is not the concern of section 57(iii) - PCIT records no error in the order with regards to eligibility of claim of interest expenses u/s 57(iii) of the Act. Even from the standpoint of genuineness, considering the facts noted by him, we find there is no error found by the PCIT. He notes the assessee to have deducted TDS on interest expenses and thereafter directs the AO to verify whether the interest expenses have been returned to tax by the recipients of the same. When the only fact noted by him is of TDS having been deducted on the interest expenses, how does it by any way create any doubt on the genuineness of the claim, we fail to understand. In fact there is no doubt about the genuineness of the claim of interest expenses also. He has only directed the AO to verify further, which the Ld. PCIT, we hold, has no power to do u/s 263. Section 263 of the Act requires the Ld. PCIT to record finding of error in the order. Without himself recording any error he cannot exercise any power u/s 263 of the Act. In the present case therefore, we find that there is no error found by the Ld. PCIT in the order passed in the case of the assessee u/s 147 of the Act, vis-a-vis allowability of claim of interest expenses either in terms of section 57(iii) of the Act, for which purpose the case of the assessee was initially reopened, or for that matter with respect to the genuineness of the claim. Appeal of the assessee is allowed.

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• 2025 (3) TMI 141
  Revision u/s 263 - while calculating the net profit from the business and deductions u/s 80IC, the amount of duty draw back was also included by the assessee in contravention of the provisions of the Act as the amount of duty draw back was to be added to the total income separately after excluding it from the profit and loss account and net profit, thus AO has not considered and examined the above mentioned issue HELD THAT:- Invoking the provision u/s 263 of the Act, it is necessary to establish the twin conditions i.e., firstly, order in question must be erroneous and secondly it must be prejudice to the interest of the Revenue and fulfillment of about twin conditions is mandatory prior to invoked power u/s 263 of the Act and it is also relevant here that the PCIT while invoking the power u/s 263 of the Act, supposed to enquire into or examine the matter before reaching any conclusion. Bare perusal of the material available on record, with regard and also in the light of the aforesaid well established principle of law, lead us to draw inference that the issue which was before the AO regarding duty draw back was properly examined by the AO and decided in favour of the assessee and PCT has not taken any enquiry as required by law or site any plausible or cogent reason to reach conclusion that the impugned assessment order was erroneous and prejudice to interest of Revenue and instead of enquiry himself, the PCIT observe that it was incumbent to the officer to investigate the matter stated in the return and only on this basis the Ld. PCIT directed to examine the issue and send back to the Ld. AO. Explanation 2 to Section 263 does not give unfettered power to Ld. PCIT to revise each and every order to examine the issue which is already been properly examined by the Ld. AO. Impugned order passed by the PCIT void ab initio and beyond the jurisdiction and liable to set aside and quashed. Decided in favour of assessee.

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• 2025 (3) TMI 140
  Penalty u/s 271DA - assessee has violated the provisions of Section 269ST - AO is of the view that since the assessee has received sale consideration over and above Rs. 2 lakhs in cash from the purchasers - HELD THAT:- The assessee was also under bona fide belief in view of the language of section 269ST which uses the expression single transaction and thus, at any given point of time the assessee has recorded transaction of Rs. 2 lakhs alone which was entered into provisions of section 269ST were introduced to prevent unaccounted income and black money. Assessee was under bona fide belief that cash could be accepted at any point of time not exceeding Rs. 2 lakhs and that is how cash was accepted at any given point of time within this limit of Rs. 2 lakhs. It was quite plausible to entertain this belief in view of language of section 269ST which refers to single transaction and whereas section 40A(3), 269SS, 269T used the expression aggregate . Even at one place, section 269ST too uses the expression aggregate . Section 269ST was the new provision and this was the first year and therefore to entertain this belief was not something which was impossible. There is no allegation by the Assessing Officer that the unaccounted income and black money was introduced by the assessee in the form of cash sales. Assessee duly accounted for cash receipts, particulars of farmers are kept proving their identity, aadhar, land revenue record and agricultural land holding of all the farmers, Form 60, etc. and all the statements in this regard were duly and regularly filed by the assessee. In such circumstances it cannot be said that there is any intention to evade tax. As held in the case of Hindustan Steel Ltd. Vs. State of Orissa [ 1969 (8) TMI 31 - SUPREME COURT] penalty is quasi criminal in character and therefore it should not be imposed for technical or venial breach. We hold that the assessee had bona fide reasons to receive cash over and above Rs. 2 lakhs and the assessee has reasonable cause in accepting cash over and above Rs. 2 lakhs from the farmers against sale of tractors. Penalty cannot be levied for the technical and venial breach. Therefore, we direct the AO to delete the penalty levied u/s 271DA of the Act. Decided in favour of assessee,

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• 2025 (3) TMI 139
  Rejecting the approval u/sec. 80G(v)(i) - as per DR assessee trust has huge amounts in bank FDs from preceding two assessment years and 82% of it s donations not utilized for the objects of the trust and failed to substantiate it s claim of non-utilization of funds for the objects of the trust - HELD THAT:- Assessee trust has displayed it s utilization of funds from assessment years 2021-2023- 24 to meet out it s objects by complying with the statutory requirements under the Act. CIT(E) observations to the effect that the funds are idle in FDRs in banks and as such, they are not being utilized for the objects of the assessee trust is not justified. In this connection, it is relevant to note here that the Tiger is a National Animal of India. Already the number of Tigers in India is in alarming/depleting level/status. Therefore, if any trust like the assessee-trust in the instant case, come forward to protect, conserve and do research on the Tigers to increase it s number, such activities of the trust shall be encouraged. Thus, we find that the assessee society is utilizing it s funds to meet out it s objects and the CIT(E), Pune in his order is not justified in cancelling the approval granted to the assessee trust. Appeal of the assessee trust is allowed.

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• 2025 (3) TMI 138
  Rejection of application for approval u/s 10(23C)(vi) - status of assessee changed from society to Section 8 Company as filed an application in Form no.56D, on 11/04/2008, seeking grant of fresh approval u/s 10(23C)(vi) - HELD THAT:- It is undisputed fact that the assessee was a Society an approved educational institution under section 10(23C)(vi). The said society is converted into Section 8 Company on 18/02/2024 as going concern under section 366 to 374 of Part 1- Chapter XXI of the Companies Act, 2013. The learned CIT(E) has compared object clauses of both the entities i.e., Society (prior to conversion) and Section 8 Company (after conversion) and noticed that certain objects like Rehabilitation Centre, Medical Centre, Medical Institutions, Clinics, providing free medical services to poor people have been added in the present object clauses which were not there in the previous object clauses of the Society. He held that these objects are related to medical facilities and not related to education hence assessee is not eligible for approval under section 10(23C)(vi). As upon conversion of Society into Section 8 Company there is no change in activities of the assessee. There is no finding in the impugned order passed by learned CIT(E) that the assessee is carrying on any activity other than education and more importantly the conversion has been made on the basis of going concern implying that the entire activities of the erstwhile society has been taken over by the assessee company and the assessee company is carrying on exactly the same operations as were being performed by the erstwhile society. The main objection of the learned CIT(E) that the words used Rehabilitation Centre, Medical Centre, Medical Institutions, Clinics, providing free medical services to poor people and nowhere has the learned CIT(E) either brought on record as to whether these activities are actually being performed by the Assessee or that the Assessee is undertaking any activity other than imparting of education. The learned CIT(E), in our opinion, has lost sight of the fact that the Assessee is solely engaged in the activity of providing education and is running educational institutes as mentioned herein above which is in the field of Engineering apart from also running certain Junior Colleges. CIT(E) has further misinterpreted the said activities mentioned in the object clause as not being related to imparting education losing sight of the fact that in case of imparting medical education it is imperative that the institute also operates medical centres apart from running medical colleges wherein the students undergoing medical education get practical exposure which is essential in providing quality medical education. We find those in the argument of the Ld. Counsel that all medical institutions imparting education also parallelly operate a medical college wherein patients are treated and the medical students are given practical training in the field of education and as such running such medical centres are part and parcel of imparting medical education and as such cannot be read in isolation as has wrongly been interpreted by the learned CIT(E). Thus, firstly wherein the assessee has not undertaken any of the objects which formed the basis for rejection of the approval under section 10(23C), coupled with the fact that the said objects are akin to imparting medical education and further the objects of the Assessee having been suitably modified by removing the words which were held to be objectionable by the learned CIT(E), in our opinion, there remains no reason for the approval under section 10(23)(vi) to be withheld and consequently, relying on the findings given hereinabove, we remit the matter back to the file of learned CIT(E) solely for the reason to verify the revised objects of the Assessee to ensure that the words earlier held objectionable by the learned CIT(E) have been deleted and after taking the revised objects on record grant the approval under section 10(23C)(vi) as claimed by the assessee. Assessee ground allowed for statistical purposes.

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• 2025 (3) TMI 137
  Rejection of approval u/clause (iii) of the first proviso to Section 80G(5) alleging beyond limitation - whether the CIT(E) rejected Form 10AB dated 26.03.2024 in which approval under clause (iii) of first proviso to section 80G was sought by assessee, filed belatedly or not ? - CIT(E) observed that activities of the applicant Trust has commenced prior much before obtaining provisional approval and the present application has not filed within time prescribed HELD THAT:- There is material substance in the submissions advanced on behalf of the assessee/ appellant that the trust was not migrating from old regime to new regime as its approval had lapsed on 31.03.2009, which was not renewed upto 31.03.2021, so it was allowed provisional approval on 02.10.2021 for the period from 02.10.2021 to AY 2024-25 and then the trust filed application for final approval on 21.09.2023 under clause (iii) of the first proviso to Section 80G(5), which was definitely within prescribed time limit as it is covered by the first limb of clause (iii) i.e. at least six months prior to expiry of the period of the provisional approval and not covered by the 2nd limb of clause (iii), as the activities already been commenced on 05.09.1980. We are of the considered opinion that rule of procedure are just to handmade to administration of justice and not to penalise anybody and object of procedure only for interest of justice and same should be dealt with in just manner in order to fulfil the end s of justice. In conclusion, we are inclined to accept the plea of assessee / appellant and remitting the matter back to the file of the CIT(E) to decide the issue afresh on merit, in accordance with law. Thus, the impugned order of the CIT(E) is hereby set aside and quashed on this point and matter be remitted back to file of the Ld. CIT(E) with the direction to decide expeditiously afresh in accordance with law treating the application as filed within statutory time limit.

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• Customs

• 2025 (3) TMI 136
  Smuggling of Gold jewellery - Baggage rules - despite repeated representations, petitioner did not receive any communication regarding show cause notices or orders against him - HELD THAT:- The present petition being a writ petition under Article 226, non-disclosure of relevant facts would go to the root of the matter. The Supreme Court in Shri K Jayaram Ors vs Bangalore Development Authority [ 2021 (12) TMI 1439 - SUPREME COURT] has held that non-disclosure of past present litigations concerning dispute amounts to suppression of material facts which would disentitle a litigant from discretionary remedy under Article 226 of the Constitution. Thus, a Petitioner who approaches the Court with unclean hands by suppressing litigation and his involvement therein is disqualified from seeking discretionary relief under Article 226 of the Constitution. On a query from the Court as to why the copy of the authority letter and the fact that the authorized representative had received the order, was not stated in the petition, it is submitted that the authority letter has been cancelled, however, no copy is being placed on record. Also no convincting answer is forthcoming - The receipt of the Order in Original by the said authorised representative has been placed on record by the Respondent. A perusal of the same would show that the Petitioner had complete knowledge of the said order and that he has failed to avail of his remedies in accordance with law. Since the order has itself permitted the Petitioner to redeem the goods subject to the payment of a fine of Rs. 58,000/- and a penalty of Rs. 47,000/-, let the Petitioner deposit the same with the Customs Department within a period of four weeks from the date of release of this order. Conclusion - Petitioner had complete knowledge of the order and that he has failed to avail of his remedies in accordance with law. The deposit of the fine and penalty for the release of the goods ordered. Petition disposed off.

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• 2025 (3) TMI 135
  Maintainability of petition - availability of alternative remedy - Challenge to an order demanding duty drawback and interest under the Customs Act, 1962, and Customs and Central Excise Drawback Rules, 2017 - petitioner had undergone a corporate insolvency resolution process (CIRP) and was acquired by QVC Exports Ltd - HELD THAT:- In the present case the respondents did not lodge their demand in respect of the duty drawbacks against the petitioner during the CIRP. Admittedly, the claim of the respondents is not a part of the approved resolution plan. It is therefore, abundantly clear that a claim brought to the fore during the pendency of the moratorium period after the claims have been recorded by the adjudicating authority would stand waived off in terms of Section 31A of the code. It is not inclined to relegate the petitioner to the remedy of an appeal as the case of the petitioner is squarely covered by the decisions of the Hon ble Supreme Court in Ghanashyam [ 2021 (4) TMI 613 - SUPREME COURT ] and in the view of the well-settled position of law. Conclusion - Once a resolution plan is approved, all claims not part of the plan are waived. The duty drawback demand was raised after the moratorium period during CIRP, which precluded such actions. The impugned order demanding duty drawbacks is quashed. Petition allowed.

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• 2025 (3) TMI 134
  Seeking issuance of an appropriate writ for quashing of the impugned Order-in-Original - suspected misdeclaration and undervaluation in the import of rubber compound, un-vulcanized rubber compound and nylon chords - HELD THAT:- On the basis of the allegations stated in the impugned SCN, the DRI raised various demands against the Petitioners including interest and penalty. The impugned SCN was however not adjudicated for a substantial period of time by the concerned assessing authority. Petition disposed off.

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• 2025 (3) TMI 133
  Time limitation - Smuggling of gold bars and gold ornaments - burden to proof towards the gold being smuggled on the Revenue - delayed passing of the de novo adjudication order - HELD THAT:- Both under the Section 128A (4A) of the Customs Act 1962 as well as under the Customs Manual, it is specified that within the time-frame given to the Commissioner (Appeals), he shall and would decide the appeal within 6 months. This is subject to the clause wherever possible . It is to be noted that the word may is not used in both the places. This shows that the Commissioner (Appeals) is required to follow the time-frame given to him for passing the OIA. In the present case, it is seen at para 12 above that both Section 128A(4A) and the Customs Manual [Chapter 31], gives the time frame of six months to the Commissioner (Appeals) to pass the Order in Appeal. In the Kopertek Metals Pvt Ltd., decided by the Principal Bench Delhi Tribunal [ 2024 (12) TMI 269 - CESTAT NEW DELHI ], it has been held that non adjudication of the order, with no reason being given to the effect that the order could not be passed within specified time limit due to circumstance beyond control, would be fatal to the legality of the order. In the present case, it has taken nearly Two years for the Commissioner (Appeals) to even take up the Personal Hearing proceedings on 28.08.2020 for the Appeal filed on 06.09.2018. The appellant has attended the same. Hence, there is no delay on their part. After this, the OIA was passed on 24.09.2020. No reason whatsoever has been given as to what necessitated the Commissioner (Appeals) to wait for nearly two years to grant the Personal Hearing and as to why the OIA could not be passed within the time frame of Six Months. The OIA has been passed after 2 years as against the time-frame of Six months given under Section 128A(4A). The ownership of the gold was being claimed by the Appellant right from the beginning when the first statement was recorded. He also named the persons from whom he had procured the gold. The very fact that these persons are residents of the area gets proven from the Election Records and Gram Panchayat Certificates brought in by the appellant - the initial onus to prove its smuggled nature cast upon the Revenue, has not been discharged by the Revenue as also noted by the first Commissioner (Appeals) while he remanded the matter to the Adjudicating Authority. One glaring visible error on the part of the Revenue is seizure of gold ornaments. The quantity seized is to the tune of 86.230 grams. From the Jewelry, it cannot be ascertained that the same is of foreign origin or not. Admittedly no chemical examination was undertaken either for the gold bars or for the ornaments. But still the appellant was made to run from pillar to post for the next more than 13 years, having to approach CESTAT and having to wait for the adjudication of the de novo proceedings for release of the gold ornaments. The very fact that the Dept did not file any appeal on the gold jewelry released to the appellant shows that it is an admitted error on the part of the Revenue - in spite of the foreign markings in the gold bars, without verifying the claim of the appellant about their purchase from three persons and making a sweeping statement that the licit purchase claim by the appellant is an after thought , does not carry the case of the Revenue any further, when the appellant has made these claims on the date of seizure itself. Conclusion - i) The delay in adjudication and appeal proceedings, without plausible explanation, invalidated the orders. ii) The Department failed to discharge its burden of proof regarding the smuggling allegations, as the appellant provided credible evidence of licit possession. The impugned Order is not sustainable even on merits - Appeal allowed.

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• 2025 (3) TMI 132
  Classification of imported Mixed Hydrocarbon Oil - to be classified under Customs Tariff Item (CTI) 27011990 or as Automotive Diesel Fuel under CTI 27101944 - applicability of the relevant import conditions prescribed under ITC-HS policy of FTP - restricted item or not - HELD THAT:- From the specific report of the samples of the impugned goods, it transpires that the imported goods under dispute are mixture of hydrocarbon oil, though containing diesel fraction, does not fulfil the standard requirements as specified under IS:1460:2005 to be considered as Automotive Diesel Fuel. In view of the above specific factual record establishing that the classification of impugned goods cannot be categorised under CTI 2710 1944, inasmuch as these goods do not fulfil the criteria mentioned for Automotive Diesel Fuel as per IS:1460:2005, the conclusion arrived at in the original order and which is confirmed in the impugned order, by the authorities below does not stand the scrutiny of law. There are force in the argument advanced by the learned Advocate for the appellants that statements given by the appellantsimporter alone cannot form the basis to confirm the charge of misclassification and to re-classify the goods from Mixed Hydrocarbon oil to Automotive Diesel Fuel . The law is well settled in these matters as the Hon ble Supreme Court in the case of H.P.L. Chemicals Limited (supra) have held that classification of goods is a matter relating to chargeability and the burden of proof is squarely upon the Revenue. If the Department intends to classify the goods under a particular heading or sub-heading or tariff item different from that claimed by the assessee, the Department has to adduce proper evidence and discharge the burden of proof. From the test report given by the CRCL laboratory and from relevant tariff entries in First Schedule to the Customs Tariff Act, it is quite clear that the goods are classifiable as other residuary goods including Mixed Hydrocarbon oil under CTI 2719 1990 and not as Automotive Diesel Fuel under CTI 2710 1944. Department s own Chemical Examiner of CRCL laboratory after examining the chemical composition of the representative samples of imported goods has said that it is not fulfilling the requirements of Automotive Diesel Fuel. On the other hand, after examining the chemical composition he has opined that the impugned is to be treated as mixture of hydrocarbon oil. It is also a settled position of law that merely because an assessee has, under the stress of investigation, signed a statement admitting tax liability, it cannot lead to self-assessment or self-ascertainment. In the case of Vinod Solanki Vs. Union of India [ 2008 (12) TMI 31 - SUPREME COURT ] , the Hon ble Supreme Court has ruled that the initial burden to prove that the confession was voluntary is upon the department andthat evidence brought by confession if retracted, must be corroborated by other independent and cogent evidence. It is made clear that none of the evidences relied upon by the department, to allege the misclassification and mis-declaration of the description resorted to by the appellants, stand the scrutiny of Law. The department failed to substantiate the allegations by cogent and legally admissible evidences. Hence, under the facts and in the circumstances of the case, there are no hesitation in allowing the appeal in favour of the appellants by setting aside the impugned order. Conclusion - i) The classification of goods must be based on conformity to relevant standards and supported by evidence. ii) The classification of the goods under CTI 27101990 as Mixed Hydrocarbon Oil upheld. The appeal is allowed by setting aside the impugned order.

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• Corporate Laws

• 2025 (3) TMI 131
  Interpretation of Section 212(15) and sub-section (5) of Section 223 - Legality of investigation Report submitted by the Serious Fraud Investigation Office (SFIO) under Section 212(12) of the Companies Act, 2013 - admissible as legal evidence or not, as SFIO Report have been equated as report prepared under Section 173 of the Code of Criminal Procedure (CrPC) 1973 - relevance of 2nd SFIO Report and the Compilation of Documents filed by the Respondent on 07.02.2024 before the NCLT - no sufficient pleadings in the Company Petition/ Miscellaneous Application filed by the Respondent with respect to the SFIO Report and documents and Compilation of the Documents. HELD THAT:- Section 212 provides for investigation into affairs of Company by Serious Fraud Investigation Office and contains detailed provisions pertaining to investigation to be carried out by the SFIO. Section 212(1) provides that where the Central Government is of the opinion, that it is necessary to investigate into the affairs of a company by the Serious Fraud Investigation Office by order, assign the investigation into the affairs of the said company to the Serious Fraud Investigation Office. On looking into the scheme of Section 212, it is clear that after investigation report is received under sub-section (11) or sub-section (12) of Section 212, Central Government may direct the SFIO to initiate prosecution against the company and its officers or its employees. Sub-section (15) is in reference to the SFIO Report which provided that investigation report filed with the Special Court for framing of charges shall be deemed to be a report filed by the police officer under Section 173. Thus, investigation report submitted by the SFIO and filed in the Special Court has to be deemed to be a report filed by the police officer under Section 173 of the CrPC. It is on the basis of the report submitted by police officer under Section 173 of the CrPC charges are framed by Special Court in offences alleged in the charge-sheet. When SFIO Report is deemed to be a report filed by police officer (for framing of charges) sub-section (15) begins with notwithstanding clause and deeming fiction is created to treat the report as report submitted under Section 173 of the CrPC so that charges may be framed in the prosecution which has been directed by the Central Government under sub-section (14) after receipt of the investigation report. There can be no quarrel to the proposition that the police report is not legal evidence. The present is a case it is required to examine the purpose and object of Section 212 and whether the statutory scheme indicate that the SFIO Report which is submitted after the investigation as directed by the Central Government is not to be looked into in any material or evidence for any purpose as contemplated under the Act apart from framing of charges and legal fiction under sub-section (15) of Section 212 was engrafted for the purpose that SFIO Report be not treated as legal evidence. The legislature is well aware about the provisions of law and when sub-section (14A) was added in Companies Act by Act 22 of 2019 legislature was well aware about existing provisions of Section 212(15). When legislature specifically provides SFIO Report to take a proceeding against any director, key managerial personnel and other officers of the company, obviously the said report is to be relied for the said purpose and in event, the submission of the Appellant is accepted that the said report cannot be looked into it not being the legal evidence, the purpose and object of sub-section (14A) becomes meaningless and otiose - The statutory interpretation on legal fiction as noticed above has repeatedly laid down that deeming fiction should not be extended beyond language of the section and must be limited to the context it was introduced. Deeming fiction was introduced to make the SFIO Report as a Report of police officer under Section 173 of the CrPC for framing the charges. Thus, object of legal fiction was to make the SFIO Report as report within the meaning of Section 173. Legal fiction was not for the purpose that SFIO Report be treated as inadmissible for the purposes of Companies Act, 2013. Section 212 also contain a provision where any person concerned by making an application may obtain a report. Thus, sub-sections (1), (2) and (3) are already reflected in provisions of Section 212. Thus, when we come to sub-section (5) which says that nothing in this section shall apply to the report referred to in Section 212, the said sub-section obviously is relating to sub-section (4) where authentication is required for inspector s report to be admissible in a legal proceeding - Section 223 which provision dealt with the inspector s report there was no occasion to include any provision which is contrary to the scheme of Section 212. We, thus, are of the view that sub-section (5) of Section 223 in no manner has effect on the admissibility of the SFIO Report in proceeding under sub-section (14A) and the interpretation which was put by the Appellant under Section 223(5) cannot be accepted. The ground which was raised by the Appellant for rejecting the compilation of documents and SFIO Report submitted by the SFIO cannot be accepted at this stage to throw out the compilation of documents and the SFIO Report. The issue as to what has been pleaded in the application or the petition and what is the material or evidence on the record are issues which are to be examined when applications are decided on merits. Thus, on the submission that there are no pleadings with regard to compilation of documents cannot be a reason to accept the prayers made in CA No.65 of 2024. Conclusion - The SFIO Report is admissible in proceedings under Section 212(14A), and the NCLT did not err in considering the report and associated documents. No grounds have been made out to interfere with the impugned order. All the appeals are dismissed.

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• Insolvency & Bankruptcy

• 2025 (3) TMI 130
  Seeking to challenge the order passed by the National Company Law Appellate Tribunal (NCLAT), Chennai - rejection of Section 7 application due to a delay in filing a rejoinder affidavit - HELD THAT:- Both NCLT and NCLAT committed an egregious error in taking a very technical or rather pedantic view of the matter. Having permitted the Bank to file their rejoinder after condoning the delay, it was too much for the NCLT to say that the Bank shall not be permitted to rely on any assertions made in the rejoinder. It was expected of the NCLAT to correct such an error. Unfortunately, the Appellate Tribunal also fell into the same error. Appeal allowed.

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• 2025 (3) TMI 129
  Rejection of Section 7 Application filed by the appellant - demand of amount of Interest Free Maintenance Security (IFMS) from the corporate debtor, towards maintenance of common area services, installation, common passage, etc. - financial debt or not - HELD THAT:- The Hon ble Supreme Court in Global Credit Capital Limited Anr. Vs. Sach Marketing Pvt. Ltd. Anr. [ 2024 (4) TMI 1067 - SUPREME COURT ], has laid down that for finding out the character of the debt, nature of the transaction entered between the parties has to be captured and find out and it is only after determining the real nature of transaction, issue can be answered as to whether there is a financial debt or not. The amount which is paid by the allottee towards IFMS security is the amount which is paid towards obtaining services and the amount is payable to the vendors/nominated maintenance agencies. The services thus are to be provided by vendor or maintenance agencies. For being a financial debt within meaning of Section 5(8), the amount needs to be disbursed against the consideration of time value of money and includes thus disbursement for time value of money is a condition precedent for falling any transaction within a definition of financial debt. Conclusion - The finding of the Adjudicating Authority holding that amount in question i.e., IFMS does not amount to financial debt, suffers from no infirmity. Appeal dismissed.

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• 2025 (3) TMI 128
  Admission of Section 9 application - whether there is any infirmity in the impugned order passed by the Adjudicating Authority in allowing the Section 9 application on the ground that operational debt which was due and payable stood established by the Operational Creditor and that a default had been committed by the Corporate Debtor in respect of the said debt, the liability having been admitted without disputing the debt? - HELD THAT:- It cannot be construed in any manner that there was a categorical admission of debt and default by the Corporate Debtor. The first letter of 09.03.2020 clearly states that freight is payable subject to receipt of debit payment note as per shipping bill compliant with RBI guidelines and C.A. guidelines. Besides not confirming the demurrage, the said letter also states that they would like to arrange meeting to discuss and try to resolve the issue. It cannot be unmindful of the fact that the Operational Creditor had been asked to provide documents and debit note as per RBI and other guidelines for the vessel/freight charges. That the issue of the debt was embroiled in dispute is also evident from the fact the Operational Creditor had themselves issued a Legal Notice 11.10.2022. Moreover, pursuant to the Legal Notice, replies were sent by the Corporate Debtor dated 17.10.2022 and 19.11.2022 wherein it has been asserted that the outstanding claimed by the Operational Creditor is not in their records. Further payment was stated to have been already done by Samruddha as freight negotiation and payment of the vessel were activities handled by Samruddha. This letter dated 19.11.2022 clearly mentioned that the matter of outstanding debt would be resolved with the help of Samruddha. It is pertinent to note that these letters addressed to the Operational Creditor by the Corporate Debtor were also endorsed to Samruddha and BST. Once plausibility of a pre-existing dispute is noticed, what has to be looked into is whether the dispute needs further adjudication by a competent court. The Adjudicating Authority is not to enter into final adjudication with regard to existence of dispute between the parties regarding the operational debt in terms of the statutory construct of the IBC. In the present case too, the freight charges having not been admitted by the Corporate Debtor, it is not a case wherein debt and default has been unequivocally established which is essential for entertaining a Section 9 application. Demurrage charges - HELD THAT:- It is found from the impugned order that the Adjudicating Authority noted that on 25.05.2017, the Corporate Debtor had raised an invoice for USD 22,942.74 towards Address Commission earned and that the Operational Creditor had also raised a Debit Note on 27.12.2017 for USD 242,772.19 towards demurrage dues. It was also noted by the Adjudicating Authority that the laytime calculations in support of their demurrage dues were confirmed by the broker of the Corporate Debtor vide email dated 11.10.2017. The Adjudicating Authority has further concluded after noticing the communication from the Corporate Debtor dated 09.03.2020 that the Corporate Debtor has admitted that there exist demurrage charges to be paid to the Operational Creditor, however, the same only needed to be confirmed after arranging a meeting with the Operational Creditor. The Corporate Debtor had not admitted the liability to pay demurrages. It is therefore, clear that payment on account of demurrage was disputed by the Corporate Debtor. Under such circumstances, we are not inclined to agree that there was any admission of liability on the part of the Corporate Debtor on payment of demurrage and hence this defence taken by the Corporate Debtor cannot be disregarded as vexatious or feeble in nature. In the present factual matrix, the defence raised by the Corporate Debtor therefore cannot be held to be moonshine, spurious, hypothetical or illusory. In a Section 9 petition, the Corporate Debtor enjoys the right to dispute the debt including the quantum of payment. From the correspondence placed on record it is clear that dispute was continuing between the parties regarding outstanding claim both in respect of freight and demurrage. Once the debt has been disputed, the question of default does not arise. For such disputed operational debt, Section 9 proceeding under IBC cannot be initiated at the instance of the Operational Creditor - When Operational Creditor seeks to initiate insolvency process against a Corporate Debtor, it can only be done in clear cases where no real dispute exists between the two which is not so borne out given the facts of the present case. The conditions laid down in Section 9 having not been fulfilled, the application deserved to be rejected. Conclusion - The Corporate Debtor was not liable for the claimed debt due to the existence of a dispute and lack of admission of liability. The Adjudicating Authority has erroneously allowed the application filed under Section 9 of the IBC by the Respondent. The impugned order is set aside. The Appeal is allowed.

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• PMLA

• 2025 (3) TMI 127
  Money Laundering - Seeking grant of bail - Practicing chartered accountant (CA) - assisting the co-accused to convert the tainted money into untainted money and connived in the laundering thereto - petition dismissed primarily on the ground that the petitioner has failed to meet the threshold of Section 45 of PMLA - it was held by High Court that The petitioner is admitted to bail on furnishing personal bond in the sum of Rs. 5 lakhs with a surety of the like amount to the satisfaction of the trial court on the terms and conditions imposed - HELD THAT:- There are no good ground to interfere with the impugned order passed by the High Court in view of the pendency of trial. SLP dismissed.

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• Service Tax

• 2025 (3) TMI 126
  Exemption from service tax - services provided by the petitioners, specifically related to Solid Waste Management, are exempt from Service Tax under the Finance Act, 1994 - Section 66-B of the Finance Act, 1994 - validity of SCN - notice proposing to levy service tax, can be construed as a notice for recovery while affirming a final demand or not? - HELD THAT:- The Section 65-B (44) of the Finance Act 1994, defines the term service . Section 65-B (51) of the Finance Act, defines taxable service as taxable service means any service on which service tax is leviable under section 66B. Section 66B of the Finance Act provides that there shall be levied a tax on the value of all services other than those specified in the Negative List - Section 66D of Finance Act, 1994, provides for the negative list, while Section 93 of the Finance Act provides power to the Central Government to grant exemption for taxable service from service tax. Accordingly, unless the service is one that falls in the negative list or a notification of exemption, the same would fall within the service tax net. This Court in M/s Sapthagiri Cleaning Services Versus The Joint Commissioner of Central Tax Bengaluru, The Deputy Commissioner of Central Tax Bengaluru [ 2024 (9) TMI 1418 - KARNATAKA HIGH COURT ], while considering setting aside of the show cause notice in an identical factual matrix had declined to issue a writ as sought for while observing that the relief sought for required interpretation of work order in the context of the exemption notification and accordingly, relegated the matter to the stage of post show cause notice. There is no reason that the present writ petitions seeking setting aside of show cause notice on the ground of exemption or non-chargability to service tax are to be disposed off on different grounds. The interpretation of the work orders/ contracts would be necessary in order to arrive at a conclusion as regards non chargeability or as regards the application of exemption notification. It is relevant to note the observations made by the Apex Court in Union of India and another v. VICCO Laboratories [ 2007 (11) TMI 21 - SUPREME COURT ], wherein it is held that the Writ Courts could interfere at the stage of show cause notice only under exceptional circumstances and when factual adjudication is warranted, the interference by the Writ Court is ruled out. While the writ petitions challenging validity of the show cause notice are disposed of by relegating the petitioners to the stage post show cause notice reserving liberty to file additional reply and to file reply if not already filed permitting the assessees to raise all other contentions in support of their case of being within the exemption notification or outside the service tax net, the other writ petitions raising identical grounds assailing the adjudicating order (Order-in-Original) are also allowed by setting aside the adjudicating order and relegating the assessees to the same stage of post show cause notice. Such order is passed noticing substantial contentions are raised in matters where show cause notices are assailed. In light of the contention of the revenue that the receiver of service i.e., BBMP/ local authority or Government is not a business entity registered as body corporate, such aspect is also kept open for consideration by the authority upon remand of the matters to the stage of post-show cause notice. Conclusion - The writ jurisdiction is not the appropriate forum for resolving complex factual disputes involving tax assessments. The court set aside adjudicating orders and remanded the matters to the stage of post-show cause notice to ensure uniformity and consistent adjudication by the tax authorities. Petition disposed off.

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• 2025 (3) TMI 125
  Levy of service tax - amounts collected as damages/penalties for breach of contract - Section 66E(e) of the Finance Act, 1994 - HELD THAT:- The amount recovered by the appellant towards penalty is not a consideration for any activity which has been undertaken by the appellant and as a result there is no service in terms of Section 65B(44) of the Act. The facts of the present case do not suggest that there is any other independent agreement to refrain or tolerate, or to do an act between the parties hence the issue is decided in favour of the appellant. The other issues related to invocation of extended period of limitation, penalty and interest are not required to be gone into as the issued on merits stands decided in favour of the appellant. The impugned order deserves to be set aside - The appeal is, accordingly allowed.

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• 2025 (3) TMI 124
  Liability to pay service tax - full consideration received for providing the Manpower Supply Service , including salary, PF and ESIC - HELD THAT:- The issue raised in the present case is whether the appellant is liable to pay service tax on the full consideration received for providing the Manpower Supply Service , including salary, PF and ESIC, which has been considered in the case of appellant themselves by the Hon ble Rajasthan High Court, titled as Bhanwar Lal Gurjar Vs. Commissioner of CGST Service Tax Jaipur [ 2019 (12) TMI 890 - RAJASTHAN HIGH COURT] , where the Division Bench considered the same issue and following the decision of the Hon ble Apex Court in the case of Union of India Vs. Intercontinental Consultants and Technocrats Pvt. Ltd. [ 2018 (3) TMI 357 - SUPREME COURT] . The period involved in the show cause notice is April 2012 to July 2012 and the demand has been made by virtue of Section 67 of the Act read with Rule 5 of the Service Tax (Determination of Value) Rules, 2006. In view of the law laid down by the Hon ble Apex court in Intercontinental Consultants and Technocrats Pvt. Ltd., the demand made under Section 67 is not sustainable as it does not include the reimbursable expenses for providing such service during the period in question. Conclusion - The appellant was not liable to pay service tax on the full consideration received for providing Manpower Supply Service and that the demand made under Section 67 was not sustainable. There are no merits in the impugned order and the same is hereby set aside - appeal allowed.

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• 2025 (3) TMI 123
  Classification of service - Works Contract Service (WCS) - respondent had received payments from their customers but not shown the taxable value in their ST-3 returns - HELD THAT:- This Tribunal taking note of the CBEC Circular No.108/02/2009-ST dated 29.01.2009 in CC,CE ST Vs. Pragati Edifice Pvt. Ltd. [ 2019 (9) TMI 792 - CESTAT HYDERABAD] case has held that it is well settled legal position that whether the service is rendered as service simpliciter or as a works contract, no Service Tax can be levied on construction of residential complex prior to 1-7-2010. Conclusion - i) Construction services completed before the execution of a sale deed, where the property is transferred post-construction, are considered self-service and not subject to service tax prior to 01.07.2010. ii) The CBEC Circular No.108/02/2009-ST applies to cases where construction is completed before sale, exempting such transactions from service tax. There are no merit in the appeal filed by the Revenue - Revenue s appeal is dismissed.

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• 2025 (3) TMI 122
  Short payment of service tax - Exemption from services tax - export of services or not - appellant has received the amount which was not reflected in the ST-3 returns for the relevant period (2015-16) - extended period of limitation - penalties - HELD THAT:- In the present case, it is observed that appellant is engaged in providing Goods Transport Agent services. They issue consignment notes for transportation of goods from India to Nepal for which payments are received by him from overseas clients in India, who undisputedly are corporate entities. Thus, the liability to pay service tax is on the consignee. By referring to provisio to the said rule Commissioner (Appeal) has concluded that the liability to pay service tax falls on the appellant - While coming to the said conclusions impugned order also rejected the arguments advanced by the appellant vis a vis Notification No 30/2012-ST which provides for payment of service tax on reverse charge basis by the person liable to pay freight. From perusal of the documents i.e. consignment note, it is quite evident that both consigner and consignee are corporate entity. The freight in the present case is paid by the consignee located outside India, in Nepal. The liability to pay service tax in such case would be on consignee and not on GTA as per notification no.30/2012 dated 20.06.2012 - From Rule 10 of the Place of Provision of Services Rule, 2012, it is evident that in case of Good Transport Agency Service the place of provision of service is location of the person liable to pay service tax. In the present case the person liable to pay service tax is the consignor or consignee as the case may be and the location of the said person will be the place of provision of service. Extended period of limitation - HELD THAT:- By combined and harmonious reading of the Rule 2(1) (d) of Service Tax Rules, 1994, Rule 10 of Place of Provision of Services Rules, 2012 and Notification No 30/2012-ST, it is found that appellant was having a reason to bonafide belief that no service tax was payable by him in respect of service provided by him. As it is found that appellant entertained a belief which is on the basis of the notification and the documents, there are no merits in invocation of extended period for making this demand. Penalties - HELD THAT:- As the demand cannot stand in the test of limitation, the same is set aside. Penalties imposed upon the appellant are also set aside. Conclusion - i) In the present case the person liable to pay service tax is the consignor or consignee as the case may be and the location of the said person will be the place of provision of service. ii) As it is found that appellant entertained a belief which is on the basis of the notification and the documents, there are no merits in invocation of extended period for making this demand. iii) Penalties imposed upon the appellant are also set aside. Appeal allowed.

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• 2025 (3) TMI 121
  Non/short-payment of service tax - it is alleged that the appellant had received substantial amounts towards the provision of taxable services, but has not discharged due service tax - recovery with interest and penalties - HELD THAT:- Undisputedly the services provided by the appellant qualify to be treated as export of services. Thus, from the impugned order it is evident that Commissioner (Appeal) has himself dropped the demands in respect of all the services provided for which the BRC s were produced. However in respect of the demands where the BRC s were not produced he proceeded to uphold the demand made along with the interest and penalties. The appellant have stated and produced a copy of certificate from Chartered Accountant to the effect that the amount which i.e. Rs.2,49,41,667/- was also received in foreign exchange - By the above certificate, it has been certified that appellant have received the amount also in convertible foreign exchange through banking channels. As this certificate was not produced before the Commissioner (Appeal) at the time of adjudication, it is deemed fit to remand the matter back to Commissioner (Appeals) for re-consideration of differential demand confirmed. Conclusion - i) The services provided by the appellant qualified as export of services, and demands were dropped where supporting documents were produced. However, demands without supporting documents were upheld along with interest and penalties. ii) The appellant presented a certificate from a Chartered Accountant during the appeal, certifying that a specific amount was received in foreign exchange through banking channels, which was not produced before the Commissioner (Appeals). The Tribunal deemed it fit to remand the matter back to the Commissioner (Appeals) for reconsideration in light of the new evidence. Appeal allowed by way of remand.

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• 2025 (3) TMI 120
  Condonation of delay in filing appeal - appeal rejected on the grounds of limitation holding that the appeal filed on 16.08.2022 is beyond permissible condonable time limit of one month - HELD THAT:- The impugned order has been passed on the presumption by the learned Commissioner (Appeals) that the Order-in-Original dated 23.12.2021 was served on the Appellant, on the basis of the evidence of dispatch and the contention of the Department that such dispatch was not returned back by the Post office. The learned Commissioner have erred in making the presumption in the absence of proof of delivery not produced by the Department. During the relevant time as per the provisions of Section 37C(1)(a), any order passed under the Act was to be served through Registered Post or Speed Post to the person for whom it was entitled or his authorized agent with acknowledgement due as proof of delivery. Thus, it was incumbent upon the Revenue to produce evidence of delivery or service which is the mandate as per the Section 37C(1)(a) of the Act. In absence of proof of delivery of order dated 23.12.2021, the same cannot be deemed as served on the Appellant as has been held by the Hon ble Rajasthan High Court in the case of R. P. Casting Pvt. Ltd. [ 2016 (6) TMI 996 - RAJASTHAN HIGH COURT] . Conclusion - In absence of proof of delivery, it is held that the presumption is not sustainable and accordingly the appeal of the Appellant cannot be held as barred by limitation. It is deemed appropriate to remand the matter to the learned Commissioner (Appeals) to decide the appeal on merits after giving proper opportunity to the Appellant without further visiting the aspect of limitation. Appeal allowed by way of remand.

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• Central Excise

• 2025 (3) TMI 119
  Levy of penalty u/r 26 of Central Excise Rules, 2002 - illicit removal of LLDPE and HDPE without payment of duty - appellant abetted M/s. Vraj Packaging, whose case has been settled under SVLDRS-2019 - HELD THAT:- When the demand in the case of main appellant M/s. Vraj packaging Pvt. Limited has been settled under SVLDRS-2019 vide order No. A/11013/2021 dated 10.03.2021, the case of co-noticee for penalty will not sustain. The same view has been taken by this Tribunal in the case of M/s. Siemens Limited [ 2023 (5) TMI 377 - CESTAT MUMBAI ] that penalty on the co-noticee will not sustain when the main party s case of confirmed demand is settled under SVLDRS-2019. Therefore, following the above precedent, the penalty imposed upon the appellant in this case is not sustainable. The impugned order-in-appeal set aside - appeal allowed.

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• 2025 (3) TMI 118
  Time limitation for filing refund claim - whether the refund claim was filed within one year from the last date of the order, from which refund claim pertains? - Section 11B of the Central Excise Act, 1944 - HELD THAT:- As Commissioner (Appeals) has specifically acknowledged that in the entire case refund claim was being filed within one year from the last date of the order, from which refund claim pertains. The issue is squarely covered by the various precedent decisions. In case of Suretex Prophylactics India Pvt. Ltd [ 2020 (5) TMI 225 - KARNATAKA HIGH COURT] , Hon ble Karnataka High Court has observed that time-limit has to be computed from the last date of the last month of the quarter which would be the relevant date for the purposes of examining if the claim is filed within the limitation prescribed under Section 11B or otherwise. In the case of M/s Span Infotech (India) Pvt. Ltd. [ 2018 (2) TMI 946 - CESTAT BANGALORE] Larger Bench of this Tribunal has observed that we conclude that in respect of export of services, the relevant date for purposes of deciding the time limit for consideration of refund claims under Rule 5 of the CCR may be taken as the end of the quarter in which the FIRC is received, in cases where the refund claims are filed on a quarterly basis. Conclusion - The refund claims were filed within the limitation period specified under Section 11B. Appeal of Revenue dismissed.

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• 2025 (3) TMI 117
  Invocation of Extended period of limitation - suppression of fact of receipt of raw material free of cost from the supplier - fact of non-inclusion of the value of the said raw material in the value of final products manufactured by them suppressed from the knowledge of the department with intent to evade payment of central excise duty - HELD THAT:- The respondent were manufacturing ZDF for the specific needs of Nuclear Fuel Complex, Hyderabad, a unit of Department of Atomic Energy, Government of India, who manufactures Zirconium Alloy Tubes which are further used for making Nuclear Fuel Bundles, containing Uranium Oxide pellets and are used in the Nuclear Reactors by the Nuclear Power Corporation managed by Government of India for generation of power. Further, it is found that as per the purchase order, the respondent were only paying the central excise duty on the job work charge and not including the free supply of sand made by Nuclear Fuel Complex, Hyderabad and as per the department, the said free supply should be included in the transaction value for the purpose of payment of duty. The learned Commissioner, after analyzing all the submissions of the party, vide detailed impugned order, has confirmed the demand only for the normal period and has come to the conclusion that extended period of limitation cannot be invoked as the respondent had a bona fide belief that the levy on free supply is not to be included in the transaction value. Further, it is also found that the invocation of extended period of limitation is totally unwarranted in the present case because the Revenue has not been able to establish any of the ingredients mentioned in Section 11A(1) of the Act for invoking the extended period of limitation. Further, the respondent had acted bona fidely as per the clauses of the purchase orders received by them from the Regional Director, HRPU, Nuclear Fuel Complex, Hyderabad, a unit of the Department of Atomic Energy, Government of India and there was no wilful act or omission of any kind whatsoever on their part leading to mens rea for invoking the penal provisions. Conclusion - The invocation of extended period of limitation is totally unwarranted in the present case because the Revenue has not been able to establish any of the ingredients mentioned in Section 11A(1) of the Act for invoking the extended period of limitation. There is no infirmity in the impugned order - appeal of Revenue dismissed.

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• CST, VAT & Sales Tax

• 2025 (3) TMI 116
  Entitlement to the benefit of prospective effect as contemplated under Section 56 (2) of the MVAT Act - Appellant Trust is a deemed dealer under section 2 (8) of MVAT Act 2002 liable for registration and payment of tax under MVAT Act or not - whether it is not necessary for levy of Sales Tax, that the Appellant must carry on business in the capacity of the dealer? - sale of movable or immovable property, to be ascertained by the field officers at the appropriate stage. Whther the appellant is a deemed dealer as contemplated under the explanation to section 2 (8) of the MVAT Act? - HELD THAT:- The Appellant became the full and absolute owner of the loans and the stressed assets [by virtue of the Transfer Deed dated 30th September 2004] and the only person legally entitled to recover those loans or any part thereof. To ensure that the Appellant could in fact avail of quick remedies of recovery under the provisions of the RDDB Act, 1993, as well as the SARFAESI Act, 2002, the Government, in exercise of powers conferred by sub-clause (ii) of clause (h) of Section 2 of the RDDB Act, 1993 specified/notified the Appellant to be a financial institution for the purposes of the said clause. On perusing the clauses of the Trust Deed as well as the Transfer Deed, it is clear that the objects of the Appellant Trust were for recovering debts of defaulting borrowers by disposing of the stressed assets inter alia under the provisions of the SARFAESI Act, 2002. The deemed dealer provision under the MVAT Act becomes operational when the categories thereunder sell any goods, whether by auction or otherwise. The Explanation which introduces the deeming provision further stipulates that the deemed dealer provision would operate notwithstanding anything contained in Section 2 (4) [the definition of the word business ] or any other provisions of the MVAT Act - The Explanation in clear terms provides that the enumerated entities would be deemed to be a dealer when they sell any goods, by auction or otherwise. Thus, the definition itself specifies that the sale of goods, whether by auction or otherwise would render the person/body/entities enlisted in the clauses to the Explanation to be a dealer. Whether the Appellant would fall within any of the ten clauses as set out in the Explanation to Section 2 (8) of the MVAT Act? - HELD THAT:- Clause (x) of the Explanation clearly stipulates that any corporation, company, body or authority owned or constituted by or subject to the administrative control of the Central Government, any State Government or any local authority, would be deemed to be a dealer for the purposes of the MVAT Act. It can hardly be disputed that the Appellant is a body constituted by the Central Government. This is abundantly clear from the Trust Deed which in fact constitutes and sets up the Appellant as a Trust and the settlor of this Trust is the Central Government. The Appellant therefore is clearly a body constituted by the Central Government. Once this is the case, we find that the Appellant is certainly a deemed dealer for the purposes of the MVAT Act. Denial of benefit of prospective effect to the DDQ order (u/s 56(2) of the MVAT Act) - HELD THAT:- Under Section 56 (1), if any question arises regarding, inter alia, a person being a dealer, or whether such person is required to be registered as a dealer, or any particular thing done to any goods amounts to or results in the manufacture of goods, or any transaction is a sale or purchase etc., and such a question/s is posed to the Commissioner, the Commissioner shall determine such question/s in terms of Section 56 (1) of the MVAT Act. Section 56 (2) gives the power and discretion to the Commissioner to direct that the determination made by him under sub-section (1) shall not affect the liability under the MVAT Act in respect of any sale or purchase effected prior to the determination - the Commissioner has the power and discretion to put a quietus to transactions entered into prior to his DDQ Order. It is, of course, needless to clarify that this discretion has to be exercised on sound judicial principles and cannot be on the ipse dixit of the Commissioner. Whether the Petitioner had made out a case for getting the benefit of prospective effect to the DDQ Order? - HELD THAT:- There is a force in the argument of Ms. Badheka that by virtue of Article 285 of the Constitution of India the Appellant was of the bona fide opinion that it being set up and constituted by the Central Government, and all the proceeds that it recovers from sale of stressed assets are to go to the Central Government, coupled with the fact that if for any reason the stressed assets are not sold during the tenure of the Trust, the same would vest in the Central Government, it was not liable to collect any tax on the sale of securities of the stressed assets - the Appellant ought to have been extended the benefit of prospective effect to the DDQ Order. Conclusion - The Appellant is a deemed dealer under the MVAT Act and liable for sales tax on the sale of movable properties. However, the Appellant is granted prospective effect to the DDQ Order, exempting it from liability for past transactions. Appeal disposed off.

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• Indian Laws

• 2025 (3) TMI 115
  Calculation of limitation in filing a complaint case under the Consumer Protection Act, 2019 - six months are required to be counted from the date of the indemnity cum undertaking, i.e. 10th January 2015 or not - HELD THAT:- The initial cause of action indeed arose in July 2015 after the six-month period expired, however, the Court cannot be amiss to the fact that the parties had been pursuing the matter with the respondent by way of letters, meetings, and even with the escrow agent, who, in turn, did his own back and forth with the owner, before finally releasing the flats in escrow in favour of the appellants. Further, as can be seen from the reliefs extracted supra, what has been claimed is the security of the title they received upon the respondent s default. The complaint case has not been filed seeking the flats in escrow for which the cause of action did arise on 10th July 2015, and hence the same limitation cannot be applied to a subsequent situation, which is that the appellants already have the flats with them. They only seek that the same be registered in their name and not alienated to any third party henceforth. The NCDRC have committed an error on the face of record. Finding the view taken by it to be ex-facie erroneous, the impugned order set aside with particulars mentioned in paragraph 1 of this order. The complaint filed by the appellant is within time. Appeal disposed off.

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• 2025 (3) TMI 114
  Ownership and possession of suit property - right, title, or interest in the subject matter of the agency of holder of the General Power of Attorney (GPA) along with an Agreement to Sell, to execute the registered sale deed - legality of registered sale deed. Relationship between the Executant and Holder of General Power of Attorney - HELD THAT:- A power of attorney derives its basic principles from Chapter X of the Contract Act which provides for Agency along with Sections 1A and 2 respectively of the Powers of Attorney Act, 1882. Agency is a fiduciary relationship between two persons, where one explicitly or implicitly agrees that the other will act on their behalf to influence their legal relations with third parties, and the other similarly agrees to act in this capacity or does so based on an agreement. The relationship between the executant of a general power of attorney and the holder of the power is one of principal and agent. A principal is bound by the acts done by an agent or the contracts made by him on behalf of the principal. Likewise, power of attorney in the nature of contract of agency authorizes the holder to do acts specified by the executant, or represent the executant in dealings with third persons. In the case of Syed Abdul Khader v. Rami Reddy Ors., [ 1978 (11) TMI 158 - SUPREME COURT] , this Court held that the relation between the donor of the power and the donee of the power is one of the principal and agent having its genesis in a contract. It further observed that the term agency refers to the relationship in which one person has the authority or ability to establish legal relations between a principal and third parties. This relationship arises when a person, known as the agent, has the authority to act on behalf of another, called the principal, and agrees to do so. In State of Rajasthan v. Basant Nahata, [ 2005 (9) TMI 620 - SUPREME COURT] , while dealing with the challenge to the constitutional validity of Section 22A of the Registration Act, it was held that a deed of power of attorney is a document of convenience empowering the agent to act for the principal or manage the affairs of the principal. From the above exposition of law, it is settled that power of attorney is a creation of an agency by which the grantor/donor/executant authorizes the grantee/donee/holder/attorney to do the acts specified on his behalf, which will be binding on the executant as if the acts were done by him - In the present case, the original owner, executant of the POA, holds the position of a principal. Whereas, the holder of the POA is an agent. There is no gainsaying in the fact that the original owner by executing the POA dated 04.04.1986 in favour of the holder entered into a principal-agent relationship with each other. Independent Reading of the General Power of Attorney and the Agreement to Sell - Interest in Power of Attorney - HELD THAT:- In the present case, it is evident from para 1 of the GPA executed by the original owner in favor of the holder that the POA was to look after, maintain, manage the Scheduled Property. Para 2 states that the attorney can enter into any agreement with any person with respect to the Scheduled Property for any amount, receive advance amount, to execute deeds in favor of such persons, issue proper discharge - Lastly, para 8 states that the attorney is generally entitled to do all acts required in respect of the Suit Property which are not specifically mentioned and that the GPA is irrevocable. Nature of Power of Attorney - HELD THAT:- The import of the word general in a POA refers to the power granted concerning the subject matter. The test to determine the nature of POA is the subject matter for which it has been executed. The nomenclature of the POA does not determine its nature. Even a POA termed as a general power of attorney may confer powers that are special in relation to the subject matter. Likewise, a special power of attorney may confer powers that are general in nature concerning the subject matter. The essence lies in the power and not in the subject-matter. A three-Judge Bench of this Court settled the rules of interpretation applicable to power of attorney in Timblo Irmaos Ltd., Margo v. Jorge Anibal Matos Sequeira, [ 1976 (12) TMI 193 - SUPREME COURT] . It was held that words used in a POA must be interpreted in the context of the whole; the purpose of the powers conferred must then be examined through the circumstances in which it was executed; and finally, necessary powers must be implied. Further, a mere use of the word irrevocable in a POA does not make the POA irrevocable. If the POA is not coupled with interest, no extraneous expression can make it irrevocable. At the same time, even if there is no expression to the effect that the POA is irrevocable but the reading of the document indicates that it is a POA coupled with interest, it would be irrevocable. Applying the above exposition of law in the facts of the present case, it is evident from the tenor of POA that is not irrevocable as it was not executed to effectuate security or to secure interest of the agent. The holder of POA could not be said to have an interest in the subject-matter of the agency and mere use of the word irrevocable in a POA would not make the POA irrevocable. The High Court was right in holding that the holder did not have any interest in the POA. When the High Court observes that the power of attorney does not explicitly state the reason for its execution, it implies that its nature is general rather than special. From the independent reading of the POA and the agreement to sell, the submissions of the appellants fail on two grounds, first, the POA is general in nature and does not secure agent s right in the subject-matter of the agency, and secondly, an agreement to sell simpliciter does not confer ownership in the immovable property so as to transfer a better title to anyone else. Combined Reading of the General Power of Attorney and the Agreement to Sell - HELD THAT:- Section 17(1)(b) prescribes that any document which purports or intends to create, declare, assign, limit or extinguish any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property is compulsorily registerable. Whereas, Section 49 prescribes that the documents which are required to be registered under Section 17 will not affect any immovable property unless it has been registered - Even from the combined reading of the POA and the agreement to sell, the submission of the appellants fails as combined reading of the two documents would mean that by executing the POA along with agreement to sell, the holder had an interest in the immovable property. If interest had been transferred by way of a written document, it had to be compulsorily registered as per Section 17(1)(b) of the Registration Act. The law recognizes two modes of transfer by sale, first, through a registered instrument, and second, by delivery of property if its value is less than Rs. 100/-. The High Court rightly held that even though the GPA and the agreement to sell were contemporaneous documents executed by the original owner in favour of the holder, this alone cannot be a factor to reach the conclusion that she had an interest in the POA - even though the GPA and the agreement to sell were contemporaneous documents executed by the original owner in favour of the same beneficiary, this cannot be the sole factor to conclude that she had an interest in the subject-matter. Even if such an argument were to persuade this Court, the document must have been registered as per Section 17(1)(b) of the Registration Act. In the absence of such registration, it would not be open for the holder of the POA to content that she had a valid right, title and interest in the immovable property to execute the registered sale deed in favour of appellant no. 2. Effect of Suit for Injunction simpliciter - HELD THAT:- Where the question of title is directly and substantially in issue in a suit for injunction, and where a finding on an issue of title is necessary for granting the injunction, with a specific issue on title raised and framed, a specific prayer for a declaration of title is not necessary. As a result, a second suit would be barred when facts regarding title have been pleaded and decided by the Trial Court. In the present suit, the findings on possession rest solely on the findings on title. The Trial Court framed a categorical issue on the ownership of the appellants herein. To summarize, where a finding on title is necessary for granting an injunction and has been substantially dealt with by the Trial Court in a suit for injunction, a direct and specific prayer for a declaration of title is not a necessity. Conclusion - The GPA and the agreement to sell were contemporaneous documents executed by the original owner in favor of the holder, but this alone cannot be a factor to conclude that she had an interest in the POA. Even if such an argument were to persuade the Court, the document must have been registered as per Section 17(1)(b) of the Registration Act. The practice of transferring an immovable property via a GPA and agreement to sell has been discouraged. It is concluded that no error not to speak of any error of law could be said to have been committed by the High Court in passing the impugned judgment - appeal dismissed.

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• 2025 (3) TMI 113
  Jurisdiction of the Civil Court in entertaining the suit having barred either expressly or by necessary implication - challenge to ex parte ad interim order of injunction passed by the Trial Court at the behest of the defendant/respondent who neither appeared in the said suit at the time of passing impugned order nor filed the pleading raising such issue - HELD THAT:- The question often arises when the regulatory authority is not empowered to execute its order or direction as a decree of a Civil Court whether it can exercise such power vested upon the Appellate Tribunal under the said Act. It is no longer res integra that the authority exercises the powers and assumes jurisdiction on the basis of a statute enacted in this regard and cannot travel beyond the peripheral thereof. The moment the legislatures consciously did not incorporate specific provision conferring the power and the jurisdiction in such manner, the regulatory authority cannot assume such jurisdiction. The exclusion of the jurisdiction of a Civil Court should not be inferred readily except when it is so excluded explicitly or by necessary implication and/or the statute in question provides adequate and satisfactory alternative remedy to a party; in other words, the ouster of Civil Court can only be assumed if the authority under the statute can exercise all powers vested upon the Civil Court. In the event the statute provides that the authority is vested with the power not only to adjudicate the dispute which is capable to be adjudicated by the Civil Court but also to execute the same in the manner as is done by the Civil Court, the exclusion can be inferred by necessary implication in absence of any express provision. Inspiration in this regard can be drawn from a Division Bench judgment of this Court in case of Mandira Mookerjee vs. District Consumer Disputes Redressal Forum Ors., [ 2004 (12) TMI 737 - CALCUTTA HIGH COURT ] where an identical issue arose whether the Consumer Forum is competent to pass an order for specific performance of an agreement for sale of an immovable property. It is held that under the Specific Relief Act which recognises the right of the specific performance of a contract available to a party agreed but it does not contain any express provision that it can only be done by the Civil Court and not otherwise. The reference was made to a hypothetical situation where the parties under an agreement agreed to resolve the dispute through private fora i.e. arbitration and the arbitrator was empowered to pass an order for specific performance. Section 79 of the Act has to be interpreted in such a manner and the moment the jurisdiction of the Civil Court is ousted, it cannot pass any order be it in a form of ex parte, interim or temporary injunction. The Apex Court in Hasham Abbas Sayyad vs. Usman Abbas Sayyad Ors., [ 2006 (12) TMI 491 - SUPREME COURT ] held that any order passed by an authority lacking the inherent jurisdiction would be regarded as nullity. Conclusion - RERA Act being a complete Code providing the exhaustive mechanism not only for the adjudication of the disputes, adherence of an obligation of the respective parties but also to execute the same as if it is a decree passed by the Civil Court. It thus excludes the jurisdiction of the Civil Court. Appeal allowed.

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• 2025 (3) TMI 112
  Entitlement to restoration of the subject property - petitioner has not made a pre-deposit in terms of Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - HELD THAT:- The petitioner does not dispute that the property was mortgaged by the father on 13th April, 2012. The petitioner also does not dispute that the medical document alleging her father s mental illness or incapacity is dated 22nd August, 2015, i.e., post the creation of the mortgage. This submission alongwith the contention that her share in the said property cannot be put to auction by the bank are all disputed questions of facts which can only be adjudicated by DRT or DRAT. It is apparent from the submissions that the petitioner has stepped into the shoes of the borrower as she is claiming her rights upon the mortgaged property. It is also clear that the respondent no.1/bank has the first charge on the said mortgage property. It is apparent that the petitioner has to comply with the statutory requirement of making a pre-deposit in terms of Section 18 of the SARFAESI Act. No application seeking waiver of the pre-deposit was filed before the DRAT. In the present petition, there is no averment as to why pre-deposit has not been made by the petitioner. It is trite that pre deposit is mandatory in the absence whereof, the DRAT may not be able to entertain an appeal filed by a party. Petition dismissed.

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