TMI Tax Updates - e-Newsletter
April 10, 2025

Case Laws in this Newsletter:

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

TMI Short Notes

1. Analysis of Tax Provisions in Corporate Amalgamations Clause 116 of the Income Tax Bill, 2025 Vs. Section 72A of Income Tax Act, 1961

  Bills:

2. Understanding the Business Loss Carry Forward Provisions in Clause 112 of the Income Tax Bill, 2025 Vs. Section 72 of the Income Tax Act, 1961

  Bills:

3. Understanding the Carry Forward of House Property Losses in Clause 110 of Income Tax bill, 2025 Vs. Section 71B of Income Tax Act, 1961

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4. Addresses the set-off of losses under various heads of income In Clause 109 of Income Tax Bill, 2025 Vs. Section 71 of the Income Tax Act, 1961

  Bills:

Articles

1. Global Minimum Tax and India’s Response: A Double-Edged Sword?

   By: Aratrik Banerjee

2. SERVICE TAX AMENDMENT IN FINANCE ACT, 2025

   By: Dr. Sanjiv Agarwal

3. FOC Import and IDPMS – Credit Notes issued by Supplier to provide proof that Goods were FOC.

   By: YAGAY andSUN

4. Validity, Renewal, and Compliance Under 80G(5) Registration Rules

   By: Ishita Ramani

5. Duty Drawback vs. Advance Authorization: Detailed Information, Pros and Cons, and Comparison Analysis.

   By: YAGAY andSUN

6. Revolutionizing Mobility: The Make in India Auto Story!

   By: YAGAY andSUN

7. Growing Urban Jungles for Greener Cities, Cleaner Air, Biodiversity, and Environmental Protection.{Environment Protection & Healing Climate Change}

   By: YAGAY andSUN

8. Humble Bicycles - Good for our Health and Great for our Environment!{Environment Protection and Healing Climate Change}

   By: YAGAY andSUN

9. Minimalism - Trust me, it is great for our Blue Planet!{Sustainability, Environment Protection and Healing Climate Change}

   By: YAGAY andSUN

10. The 4Rs—Reuse, Reduce, Repair, and Recycle.{Sustainability, Environmental Protection & Healing Climate Change}

   By: YAGAY andSUN

11. FSSAI’s Guidelines on Indian Traditional Sweets.

   By: YAGAY andSUN

12. Excessive Consumerism: Disastrous for Our Environment{Environment Protection and Healing Climate Change}

   By: YAGAY andSUN

News

1. RBI Issues April 2025 Policy Update

2. Bank of India, UCO Bank cut lending rate in line with RBI's policy

3. Home, auto loans to get cheaper as RBI cuts interest rate for 2nd time in a row

4. Monetary Policy Statement, 2025-26 Resolution of the Monetary Policy Committee April 7 to 9, 2025

5. Cabinet approves Construction of 6 lane access controlled Zirakpur Bypass with Length of 19.2 Km worth Rs.1878.31 crore in Punjab and Haryana on Hybrid Annuity Mode

6. Cabinet approves doubling of Tirupati-Pakala-Katpadi single railway line Section (104 km) in Andhra Pradesh and Tamil Nadu with total cost of Rs.1332 crore

7. RBI not to tighten gold loan norms but rationalise it: Governor

8. I am Sanjay but not Sanjay of Mahabharat who can predict rate cuts, says RBI guv

9. RBI does not target any level or band for rupee-dollar rate : Guv Malhotra

10. Tariff war: RBI more worried about its impact on growth than inflation

11. RBI permits NPCI to enhance transaction limits in UPI for P2M payments

12. After two back-to-back rate cuts, RBI Guv hints at more in coming months

13. RBI cuts interest rate for second time as US tariffs kick in

14. Trump tariffs cloud economic outlook across regions, to have impact on exports: RBI Governor

15. RBI lowers GDP growth projection to 6.5 pc for FY26

16. Highlights of RBI's April 2025 monetary policy

17. RBI lowers FY26 inflation projection to 4 pc

18. India terminates trans-shipment facility for Bangladesh to export goods to third countries

19. RBI cuts policy rate by 25 bps to 6 pc, second in a row

20. Trump disrupts global economic order even though US is dominant

21. CCI approves proposed acquisition of shares of Shriram Asset Management Company Limited by Sanlam Emerging Market (Mauritius) Limited and Shriram Credit Company Limited

22. CCI approves the proposed acquisition of shareholding in Vastu Housing Finance Corporation Limited, APAC Financial Services Limited, and Quantiphi, Inc by Multiples Plenty Private Equity GIFT Fund

23. Union Minister of Commerce & Industry Shri PiyushGoyal addresses Dubai-India Business Forum in Mumbai

24. IEPFA and IPPB Sign MoA to Launch Phase 2 of “Niveshak Didi” to Boost Rural Women’s Financial Literacy

Notifications

Central Excise

1. 02/2025 - dated 8-4-2025 - CE (NT)

Constitution of Interim Board for Settlement under Sec 31A of Central Excise Act, 1944

Customs

2. 23/2025 - dated 8-4-2025 - Cus (NT)

Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver

3. 22/2025 - dated 7-4-2025 - Cus (NT)

Appointment of Common Adjudicating Authority

GST - States

4. 17/2024-STATE TAX - dated 7-4-2025 - Chhattisgarh SGST

Seeks to bring in force provisions of various Sections of Chhattisgarh Goods and Services Tax (Amendment) Act, 2024

5. 08/2024-STATE TAX - dated 7-4-2025 - Chhattisgarh SGST

State Tax Notification for waiver of the late fee

6. 07/2024-STATE TAX - dated 7-4-2025 - Chhattisgarh SGST

Chhattisgarh Goods and Services Tax (Amendment) Rules, 2025

7. 25/2024-STATE TAX - dated 28-1-2025 - Chhattisgarh SGST

Amendment in Notification No. 50/2018-State Tax, No. F-10-49/2018/CT/V(87), dated 13-09-2018

Income Tax

8. 32/2025 - dated 8-4-2025 - IT

Central Government notifies the last date of the Direct Tax Vivad se Vishwas Scheme, 2024, in respect of tax arrear shall be filed by the declarant to the designated authority.

9. 31/2025 - dated 7-4-2025 - IT

Central Government notifies redeemable bonds issued by the Housing and Urban Development Corporation Limited (HUDCO), in respect of "Long-Term Specified Assets" under section 54EC.

Circulars / Instructions / Orders

SEZ

1. Instruction No. 119 - dated 8-4-2025

Monthly Report from Development Commissioner of Special Economic Zones

SEBI

2. SEBI/HO/AFD/AFD-POD-3/P/CIR/2025/52 - dated 9-4-2025

Amendment to Circular for mandating additional disclosures by FPIs that fulfil certain objective criteria

3. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2025/54 - dated 9-4-2025

Clarification on Regulatory framework for Specialized Investment Funds (‘SIF’)

FEMA

4. Press Note No. 2 (2025 Series) - dated 7-4-2025

Clarifications on the permissibility of issuance of bonus shares to existing non-resident shareholder(s) by Indian companies engaged in sectors prohibited for FDI.

5. II/21022/36(0025)/2025/FCRA-II - dated 7-4-2025

Proposal regarding processing of prior permission application under FCRA, 2010

6. PRESS NOTE NO. 1 (2025 Series) - dated 1-4-2025

REVISION IN ELIGIBILITY CRITERIA FOR INDUSTRIAL ENTREPRENUERS MEMORANDUM (IEM) ACKNOWLEDGEMENT

7. II/21022/23(22)/2020-FCRA-II - dated 28-3-2025

Extension of the validity of FCRA registration certificates

Customs

8. 13/2025 - dated 8-4-2025

Rescinding of Circular No. 29/2020-Customs dated 29.06.2020 in respect of Transhipment of Export Cargo from Bangladesh to third countries through Land Customs Stations (LCSs) to Port / Airport, in containers or closed bodied trucks

Highlights / Catch Notes

GST

• Exporters Win: Refund Claim Upheld Despite Document Gaps, Payment Proof Not Mandatory Under CGST Rules

  Case-Laws - HC : HC allowed refund claim challenging rejection based on non-submission of documents. The court held that proof of payment is not mandatory for export of goods, and only reconciliation statement of Shipping Bill and Export Invoices is required. The RBI circular stipulates payment realization within 9 months, which was satisfied in this case. The order rejecting refund was deemed unsustainable as it was based on grounds beyond CGST Act & Rules, effectively invalidating the original administrative decision and granting relief to the petitioner.
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• GST Registration Cancellation Order Struck Down for Procedural Flaws, Petitioner Granted Opportunity to Rectify Deficiencies

  Case-Laws - HC : HC quashed the GST registration cancellation order dated 20.12.2023 due to procedural irregularities and lack of reasoned decision. The order was found arbitrary and in violation of natural justice principles. The court granted the petitioner one month to either submit a reply to the Show Cause Notice or furnish pending returns with full tax payment. The Proper Officer was directed to ensure compliance with statutory requirements and pass a speaking order with explicit reasoning when taking adverse actions. The impugned order was set aside, allowing the petitioner an opportunity to rectify procedural deficiencies.
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• Govt Can Relax GST Tribunal Officer Appointment Criteria for State Servants Under Specific Service Conditions

  Case-Laws - HC : HC dismissed the petition challenging GST Tribunal appointment notification. The court held that relaxation of eligibility criteria under Section 110(d) is permissible only for State Government officers who have not completed 25 years of service, and does not extend to All-India Service officers. The petitioner's contention that the notification was premature or ultra vires was rejected, with the court noting that identical relaxations had been granted in ten other States. The notification was found to be legally valid, and the petition was dismissed without merit.
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• Tax Refund Victory: Petitioner Wins Challenge Against Rejected Budgetary Support Claims Under Notification 05.10.2017

  Case-Laws - HC : HC ruled in favor of petitioner, finding the rejection of budgetary support refund claims invalid. The court held that the calculation of 58% central tax and 29% IGST paid through cash ledger was correctly applied. The respondent's rejection of Rs. 31,456/- for July-September 2021 and Rs. 69,684/- for January-March 2022 quarters was deemed contrary to the notification dated 05.10.2017. The court directed respondent to release the inadmissible amounts, effectively granting the petitioner's refund claims in full.
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• Tax Refund Win: CGST Act Supports Partial Claims with 58% Budgetary Support for Central Tax and 29% IGST Credit

  Case-Laws - HC : HC adjudicated a tax refund dispute involving budgetary support claims under CGST Act, 2017. The court found the respondent's rejection of partial refund claims improper, specifically for Rs. 48,640/- and Rs. 64,496/- for different quarters. The HC held that the petitioner was entitled to budgetary support calculated at 58% of central tax paid through cash ledger and 29% of IGST paid after input tax credit utilization. The court ordered respondent No. 3 to release the inadmissible amounts previously withheld, declaring the original rejection orders contrary to the notification dated 05.10.2017. Petition was disposed of with directions for refund release.
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• Judicial Restraint Prevails: Writ Petition Dismissed, Statutory Appeal Under Section 107 CGST Act Recommended

  Case-Laws - HC : HC dismissed writ petition challenging a demand order under CGST Act. While the petition was technically maintainable under Article 226, the Court declined to entertain it due to the availability of an alternative statutory remedy under Section 107 of the CGST Act. The Court emphasized the established principle that when a specific statutory forum exists for grievance redressal, judicial discretionary intervention should be limited. The petitioner was directed to pursue the prescribed appellate mechanism, thereby preserving the statutory dispute resolution framework.
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• Budgetary Support Claim Upheld: Petitioner Wins Refund of Rs. 2,195/- Under Tax Credit Scheme Notification

  Case-Laws - HC : HC allowed the petitioner's refund claim, holding that the rejection of Rs. 2,195/- by the respondent was improper and contrary to the budgetary support scheme notification. The court determined that the petitioner was entitled to budgetary support calculated at 58% of central tax paid through cash ledger and 29% of IGST paid, after input tax credit utilization. The HC directed the respondent to release the inadmissible amount for the quarter January 2022 to March 2022, finding no justification for the partial claim rejection.
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• Refund Claim Upheld: Tax Calculation Validates Petitioner's Entitlement to Rs. 8,848 in Budgetary Support Amounts

  Case-Laws - HC : HC allowed the petitioner's refund claim, holding that the rejection of Rs. 1,678/- for July-September 2021 and Rs. 7,170/- for January-March 2022 quarters was improper. The court determined that the budgetary support calculation under the scheme was correctly applied, with entitlement calculated at 58% of central tax paid through cash ledger and 29% of IGST paid. The respondent was directed to release the inadmissible amounts in accordance with the notification dated 05.10.2017, effectively granting the petitioner's full refund claim.
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• Legal Challenge Succeeds: Ex-Parte Demand Orders Quashed for Violating Time Limitations and Procedural Fairness Under Section 73(9)

  Case-Laws - HC : HC quashed ex-parte demand orders dated 28.12.2023 and 11.07.2023 as time-barred under Section 73(9), referencing precedent in M/s Anita Traders case. The court determined that the impugned orders were issued beyond the jurisdictional time limitation for the financial year 2017-18, violating principles of natural justice. The orders were consequently invalidated, with the petitioner's challenge successfully upheld, thereby rendering the statutory notices null and void.
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• Tax Authorities Must Prioritize Business Sustainability and Compliance Over Punitive Actions Under GST Regulations

  Case-Laws - HC : HC censured departmental actions in GST proceedings, emphasizing that the legislative intent behind the GST regime is not to disrupt businesses or compromise livelihoods. The court critically evaluated the punitive approach, highlighting that tax compliance should foster business growth and national economic development. The interim order mandates that all departmental actions must strictly adhere to GST Act provisions, with a focus on constructive engagement rather than punitive measures. The court's ruling underscores the need for a balanced regulatory approach that supports entrepreneurial sustainability and economic progress.
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• Rule 96(10) Omission Invalidates Administrative Orders, Challenging Procedural Continuity and Regulatory Enforcement Mechanisms

  Case-Laws - HC : HC determined that Rule 96(10) of CGST Rules, 2017 was unconditionally omitted without a saving clause, rendering subsequent administrative orders invalid. Referencing SC precedent in Kolhapur Canesugar Works Ltd., the court held that rule omission differs from statute amendment, and Section 6 of General Clauses Act, 1897 does not apply. Consequently, the administrative order dated 30th January, 2025 was found procedurally improper, and its enforcement was stayed pending writ petition resolution. The ruling emphasizes that without explicit legislative saving provisions, pending proceedings cannot continue under an omitted rule.
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• Tax Recovery Notice Against Deceased Taxpayer's Heirs Quashed Due to Procedural Irregularities in Statutory Communication

  Case-Laws - HC : HC allowed the petition challenging tax recovery proceedings against legal heirs of deceased taxpayer. The court found the statutory notice issued to a deceased person was procedurally invalid, violating principles of natural justice. The STO failed to provide legal heirs an opportunity to be heard before confirming tax demand under Section 74 of the Act of 2017. Consequently, the recovery notice against the petitioners was deemed legally unsustainable, and the entire proceedings were nullified due to non-compliance with statutory requirements for proper notice and hearing.
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• GST Assessment Order Invalidated Due to Procedural Unfairness, Denying Petitioner Proper Opportunity to Present Defense

  Case-Laws - HC : HC found a violation of natural justice principles in the GST assessment order. The respondent issued a show-cause notice and scheduled a hearing, but failed to consider the petitioner's adjournment request and supporting documentation. Consequently, the court set aside the impugned order (Form GST DRC-07) dated 23.08.2024, determining that the administrative action did not provide adequate opportunity for the petitioner to present a comprehensive defense, thereby breaching fundamental procedural fairness.
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• Maida Pappad Extrusion Snack Pellets Classified Under 1905 90 30, Confirmed for 5% GST Rate

  Case-Laws - AAR : AAR ruled that Maida Pappad, classified as un-cooked/un-fried snack pellets produced through extrusion, falls under tariff sub-heading 1905 90 30. The product is subject to 5% GST rate effective 27.07.2023, as per Notification No. 09/2023-Central Tax (Rate). The ruling emphasizes that advance rulings are case-specific and depend on individual factual circumstances, rejecting direct comparison with previous similar cases. The determination focuses on the product's manufacturing process and inherent characteristics to establish its precise tax classification.
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• Tax Credit Case: Bail Granted to V.G. and R.D. Due to Insufficient Evidence and Limited Financial Involvement

  Case-Laws - DSC : DSC grants bail to accused V.G. and R.D. in tax credit case, finding insufficient evidence of direct involvement. Court noted lack of concrete proof beyond recorded statements, considered accused's 25% and 7% alleged benefit shares are below Rs.5 crore threshold. Accused in custody for 25 days, no further interrogation required. Bail granted on Rs.50,000 personal bond with surety, emphasizing proportionality between alleged offense and prolonged detention. Release orders issued immediately, without commenting on case merits. Procedural arrest requirements deemed satisfied.
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Income Tax

• Tax Return Filing Modernized: New Electronic Rule 12AE Mandates Digital Submission for Search and Requisition Cases

  Notifications : The CBDT issued Notification No. 30/2025 amending Income-tax Rules, 1962, introducing new Rule 12AE governing income tax returns for persons subject to search or requisition operations initiated on or after 1 September 2024. The amendment mandates filing ITR-B form electronically, with specific submission requirements based on taxpayer category: entities like companies and auditable accounts must file under digital signature, while other taxpayers can use electronic verification code. The rule establishes procedural frameworks for secure data transmission, verification of tax credit claims, and standardizes return filing processes for cases involving undisclosed income during block assessments, effective retrospectively from 1 September 2024.
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• Tax Exemption Granted to Prayagraj Mela Pradhikaran Under Section 10(46A) for Assessment Year 2024-25

  Notifications : The Central Government notified the Prayagraj Mela Pradhikaran as an exempt entity under Section 10(46A) of the Income-tax Act, 1961. The exemption is effective from the assessment year 2024-25, contingent upon the authority's continued status under the Uttar Pradesh Prayagraj Mela Authority Act, 2017. The notification specifically applies to the designated authority, granting tax exemption subject to maintaining its original statutory constitutional framework and prescribed organizational purposes.
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• Government Exempts Greater Mohali Area Development Authority from Income Tax Under Section 10(46A) for Urban Development

  Notifications : The Central Government notifies the Greater Mohali Area Development Authority as exempt from income tax under section 10(46A) of the Income-tax Act, 1961. The exemption is effective from AY 2024-25, contingent upon the authority's continued status under the Punjab Regional and Town Planning and Development Act, 1995, and maintaining its specified developmental purposes. The notification provides tax relief for the designated authority, recognizing its role in regional planning and urban development, subject to ongoing compliance with statutory requirements.
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• Gold Seizure Upheld: Authorities Validated in Stopping Transport Due to Major Documentation and Weight Discrepancies

  Case-Laws - HC : HC upheld the seizure of gold ornaments by RPF, finding substantial procedural and documentary irregularities. The court determined that the respondent authorities acted within legal powers due to significant discrepancies in weight, lack of supporting documentation, and failure to establish proper accounting of the seized jewelry. The investigation remains ongoing to assess potential non-compliance, with the seizure deemed valid based on reasonable suspicion of unlawful transportation and unaccounted goods. The petitioner's inability to provide satisfactory explanations for the documentation gaps further substantiated the authorities' actions.
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• High Court Validates Revenue's Claim: Entire Purchase Disallowance Upheld Due to Insufficient Evidence and Non-Cooperation

  Case-Laws - HC : HC held that the Assessing Officer's disallowance of entire purchases as bogus was justified. The Tribunal erred by estimating only 3% of purchases as bogus, contradicting established legal precedents. The Assessee's lack of cooperation and failure to produce critical transactional documentation substantiated the revenue's claim. Relying on previous judicial decisions in similar cases, the HC reversed the appellate authorities' orders. The court determined that the non-production of essential documents undermined the Assessee's credibility. Consequently, the HC restored the original assessment order, answering questions of law in favor of the Revenue and against the Assessee.
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• Employers' TDS Non-Remittance Blocks Employee Tax Credit Under Section 199, Leaving Workers Financially Responsible

  Case-Laws - HC : HC held that employees cannot claim TDS credit when their employer fails to remit deducted taxes to the Income Tax Department. Section 199 permits credit only upon actual receipt by tax authorities. The court rejected prior Delhi HC precedent suggesting immediate credit upon deduction. Employees remain liable for tax demands, though the Income Tax Department can pursue recovery proceedings against the defaulting employer under Section 201. If the employer subsequently pays or is compelled to pay the outstanding TDS, corresponding credits will be granted to the employees, and their tax demands will be proportionately reduced.
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• Bank Commission Payments Recognized as Valid Business Expense Under Legitimate Operational Costs and Accounting Principles

  Case-Laws - HC : HC held that client assistant charges paid to ICICI Bank Ltd constitute legitimate business expenditure. The court rejected revenue's disallowance of expenses, finding that: (1) sharing brokerage with ICICI Bank does not invalidate the expenditure, (2) the bank's deposit earnings cannot negate the assessee's legitimate business expense, and (3) the expenses were directly connected to the broking business infrastructure. Regarding notional losses, the court followed SC precedent in Suzlon Energy Ltd, allowing deductions based on conservative accounting principles. No substantial questions of law were identified, and both revenue's and assessee's proposed questions were consequently dismissed.
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• Digital Evidence Validates Tax Notice: WhatsApp Chats Confirm Unaccounted Cash Transactions Under Section 153C

  Case-Laws - HC : HC upheld the validity of a Section 153C notice based on WhatsApp chat evidence. The court determined that the digital communications constituted corroborative documentation of unaccounted cash transactions between connected parties. The WhatsApp chats provided specific details about plot purchases, cash payments, and financial transactions. Digital evidence from mobile devices, laptops, and personal computers, supplemented by employee statements, substantiated the investigative findings. The court found the evidence sufficiently precise and not vague, thereby rejecting the petitioner's challenge to the notice. Consequently, the court declined to grant any relief to the petitioner, affirming the tax authority's actions as legally sound.
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• Advertising and Marketing Promotion Costs Not Considered Separate Transaction Under Transfer Pricing Rules

  Case-Laws - HC : HC determined that AMP expenditure does not constitute a separate international transaction requiring transfer pricing adjustment. The Tribunal consistently applied precedential principles from prior cases, concluding that AMP expenditure cannot be benchmarked as an independent transaction. Consequently, the Transfer Pricing Officer's adjustment was deleted across multiple assessment years. The court affirmed the Tribunal's reasoning, finding no merit in remanding the matter for further investigation. The assessee's appeal was allowed, effectively eliminating the proposed transfer pricing adjustment related to AMP expenditure.
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• Survey Statements Not Conclusive Evidence: Assessee's Right to Disprove Preserved Under Section 133A Proceedings

  Case-Laws - AT : ITAT adjudicated on the validity of statements recorded during survey proceedings under Section 133A. The tribunal held that statements obtained during survey proceedings do not automatically bind the assessee. The burden of proof remains with the assessee to disprove such statements through substantive evidence. Critically, the presumption under Section 292C applies only to documents seized during a search from the assessee's premises, not those obtained during a survey of a third party. The tribunal relied on precedential rulings emphasizing that legal fictions are limited to their specific purpose. Consequently, the tribunal allowed the assessee's grounds, directing the Assessing Officer to delete the contested addition based on the lack of evidentiary value in the survey statements and inapplicability of statutory presumptions.
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• Tax Benefits Preserved: Presence of Permanent Establishment Doesn't Automatically Negate Special Interest Income Tax Treatment Under DTAA

  Case-Laws - AT : ITAT held that mere presence of PE in India does not automatically disqualify special tax treatment under Article 11(2) of India-Japan DTAA for interest income from supplier's credit. No evidence demonstrated direct attribution of interest income to Indian PE, thus preserving taxpayer's entitlement to preferential tax rate. Revenue's contention rejected, with tribunal finding no distinguishing circumstances from prior assessments. Interest income remains taxable at special rates, affirming taxpayer's original tax treatment and interpretation of bilateral tax agreement provisions.
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• Income Tax Transfer Pricing Assessment Invalidated Due to Improper Methodology and Lack of Substantive Comparability Analysis under Rule 10B

  Case-Laws - AT : ITAT ruled that the Transfer Pricing Officer (TPO) improperly determined Arm's Length Price (ALP) without following prescribed methods under Rule 10B. The TPO merely referenced Comparable Uncontrolled Price (CUP) method without identifying actual uncontrolled transaction prices or conducting appropriate comparability analysis. Consistent with precedent, the tribunal found the ALP adjustment procedurally invalid, as no specific transfer pricing method was systematically applied. Consequently, the tribunal deleted the transfer pricing addition, holding that the assessment was not in accordance with legal requirements for determining arm's length pricing.
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• Transfer Pricing Win: Assessee Succeeds in Challenging Tax Adjustments, Methodology, and Capital Gain Computations

  Case-Laws - AT : The ITAT allowed the assessee's appeal, directing the AO to reconsider multiple transfer pricing and tax-related adjustments. Key holdings include: (1) deletion of TP adjustments in SWD and test/measurement equipment segments, (2) accepting the assessee's profit level indicator methodology, (3) setting interest rate at LIBOR + 200 basis points, (4) directing reassessment of CSR expenditure under section 80G, (5) remanding long-term capital gain computation for fresh hearing, and (6) instructing verification of TDS credit from merged entity. The tribunal comprehensively upheld the assessee's contentions, providing procedural relief and mandating detailed reconsideration by lower authorities.
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• Technical Know-How Fees Upheld: Transfer Pricing Adjustments Rejected Based on Essential Services and Profit Margin Evidence

  Case-Laws - AT : ITAT rejected transfer pricing adjustments for technical know-how fees paid to associated enterprise. The tribunal found the technical services were inextricably linked to the assessee's business operations and essential for efficient business performance. The assessee demonstrated a higher net profit margin of 10.92% compared to comparable companies' 4.11%, which negated the need for additional markup. The tribunal directed the AO to grant TDS credit after document verification and compute interest under sections 234A and 234B considering CBDT's extended time limits. The decision follows the tribunal's previous ruling in the assessee's case for the 2018-19 assessment year, ultimately upholding the assessee's position on technical know-how expenses.
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• Income Tax Appeal: Tribunal Ensures Fair Taxation by Applying Cost Inflation Index and Preventing Double Taxation

  Case-Laws - AT : ITAT Decision Summary: The ITAT upheld the CIT(A)'s order with modifications, primarily focusing on equitable taxation principles. The tribunal directed the AO to re-compute long-term capital gains by applying the Cost Inflation Index of the year of transfer. The decision rejected revenue's contentions regarding unaccounted transactions, emphasizing that only real income should be taxed. The tribunal confirmed a 30% profit rate for unaccounted business receipts and allowed set-off of expenses against taxed receipts. Key holdings included preventing double taxation, ensuring computational fairness, and adhering to statutory provisions governing capital gains calculation while maintaining the principle of taxing net real income.
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Customs

• Customs Department Must Prove Goods' Origin and Status in Passenger Interception Cases Under Section 128

  Case-Laws - AT : CESTAT ruled on the jurisdictional scope of baggage-related customs appeals. The tribunal determined that goods recovered from a passenger's person cannot be automatically presumed as "baggage" under the Customs Act, 1962. The onus of proof remains with the customs department to establish the nature of goods intercepted during domestic transit. The tribunal maintained its appellate jurisdiction for such cases, rejecting automatic application of Baggage Rules, 2016 to domestic airport interceptions. Consequently, the appeal was directed to be filed before the appropriate appellate forum, with a nuanced interpretation emphasizing that imported consumer goods found domestically cannot be presumptively classified as smuggled items.
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• Exporters Cleared of Invoicing Irregularities: Tribunal Finds No Deliberate Fraud in Shipping Documentation Dispute

  Case-Laws - AT : CESTAT adjudicated a case involving alleged over-invoicing of exported goods under 35 shipping bills. The tribunal found insufficient evidence to substantiate departmental claims of valuation manipulation. Despite initial allegations of drawback benefit misuse, the tribunal determined that the export documents were fundamentally authentic, with any quantity discrepancies attributable to typographical errors. The department failed to establish proof of monetary flow-back or deliberate fraudulent intent. Critically, the tribunal emphasized that market prices differ from costing calculations and that the burden of proof rests with the investigating agency. Consequently, the tribunal set aside confiscation orders, redemption fines, and penalties against both the exporter and customs broker, effectively allowing the appeal and exonerating the appellants.
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• Raw Silk Fabric Importer Wins Customs Duty Challenge by Proving Impossible Notification Conditions Unenforceable

  Case-Laws - AT : CESTAT adjudicated a customs duty dispute involving raw silk fabric imports. The tribunal ruled in favor of the importer, finding that notification conditions deemed impossible to meet cannot be arbitrarily imposed. Referencing precedential SC judgments in SRF Ltd. and AIDEK Tourism Services, the tribunal determined the importer was eligible for duty exemption under N/N. 30/2004-CE as amended by subsequent notifications. The revenue's appeal was dismissed, effectively upholding the importer's original self-assessment of NIL CVD and confirming exemption from additional customs duty based on established judicial interpretations of manufacturing and duty liability principles.
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IBC

• Corporate Debt Resolution: Interest Default Beyond Moratorium Triggers Insolvency Proceedings Under Section 7 of Insolvency Code

  Case-Laws - AT : NCLAT upheld the Adjudicating Authority's admission of a Section 7 Application based on corporate debtor's interest default subsequent to the 10A period. The Tribunal confirmed that the default in interest payment from 26.03.2021 to 31.05.2021, exceeding Rs.9.38 crores, constituted a valid ground for application admission. The Tribunal explicitly clarified that the precise claim amount would be determined during the CIRP verification process, not at the admission stage. The appeal challenging the Section 7 Application was consequently dismissed, maintaining the original order's validity.
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• Homebuyers' Challenge Fails: Resolution Plan Upheld, Creditors' Commercial Wisdom Prevails Under Insolvency Code

  Case-Laws - AT : NCLAT dismissed homebuyers' appeal challenging resolution plan, finding no merit in their claim. The Appellate Tribunal reaffirmed the Committee of Creditors' commercial wisdom and previously upheld resolution plan approvals. Despite appellants' contentions regarding voting rights and claim considerations, the tribunal determined the resolution plan was validly approved in 2022 and subsequently confirmed. The appeal was deemed infructuous, with the resolution plan remaining unchanged. Appellants' arguments regarding voting share and claim validity were ultimately rejected, maintaining the existing resolution plan's integrity and effectiveness.
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• Time Limitation for Company Petition Upheld: Multiple OTS Letters and COVID Extension Validate Respondent's Filing Timeline

  Case-Laws - AT : NCLAT determined the time limitation for filing a company petition. The Respondent filed the petition on 12.08.2021, which was within the prescribed limitation period, considering multiple one-time settlement (OTS) letters extending the timeline and the Supreme Court's suo moto order extending limitation from 15.03.2020 to 28.02.2022. Despite multiple opportunities, the Appellant failed to contest the Respondent's submissions or provide contrary evidence. The Tribunal noted that limitation is a matter of both fact and law, which can be invoked at any stage. Relying on precedent, the Tribunal found no merit in the Appellant's challenge, consequently dismissing the appeal.
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• Guarantee Invocation Requires Strict Contractual Compliance: Default Must Exist at Demand Notice Issuance

  Case-Laws - AT : NCLAT dismissed the appeal challenging the rejection of a Section 95 application. The Tribunal held that a valid guarantee invocation requires strict compliance with contractual terms. The default on the part of the guarantor must exist at the time of issuing the demand notice. The Tribunal emphasized that the mere issuance of a notice under Rule 7(1) does not automatically constitute guarantee invocation. The application was deemed non-maintainable due to failure to satisfy mandatory pre-requisites for filing the application, specifically the proper invocation of the guarantee as per the deed's terms. Consequently, the lower court's order was upheld, and the appeal was dismissed without merit.
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Indian Laws

• Legal Challenge Resolved: Cheque Bounce Case Sees Fine Upheld but Imprisonment Waived Under Section 138 NI Act

  Case-Laws - HC : HC upheld the conviction under Section 138 of Negotiable Instruments Act for cheque dishonour. The court modified the sentence, eliminating imprisonment while maintaining the fine of Rs. 30,00,000. The decision was based on the petitioner's admission in a compromise deed, established presumptions under Sections 118 and 139 of the NI Act, and the petitioner's initial denial of settlement after benefiting from complaint withdrawal. The court determined that interests of justice were served by imposing a monetary penalty without imprisonment, considering the case's specific mitigating circumstances and the petitioner's conduct.
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• Insurance Voyage Condition Struck Down: Technical Timing Cannot Override Fundamental Marine Insurance Protection Purpose

  Case-Laws - SC : SC invalidated the insurance contract's special condition requiring voyage completion before monsoon onset. The court held that strictly interpreting such a condition would render the insurance contract meaningless and create an absurd scenario preventing legitimate claims. The special condition was deemed non-material and implicitly waived by both parties. The impugned NCDRC order was set aside, and the matter was remanded for determining the extent of insured sum payable. The court emphasized that technical compliance with voyage timing cannot negate the fundamental purpose of marine insurance protection. Appeal was allowed, directing NCDRC to reassess the claim on substantive merits.
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• Commercial Dispute Doesn't Equal Criminal Fraud: Supreme Court Clarifies Distinction Between Civil Breach and Intentional Deception Under Section 415 IPC

  Case-Laws - SC : SC quashed the First Information Report (FIR) against the appellant, holding that a mere breach of commercial agreement does not constitute criminal fraud under Section 415 IPC. The Court found no evidence of deliberate deception, noting the appellant's creditworthiness was demonstrated by bankers' continued financial support, including an additional loan in 2018. The materials collected during investigation did not establish fraudulent intent at the transaction's inception. The Court emphasized that defaulting on a commercial arrangement does not automatically imply criminal intent, distinguishing between civil contractual disputes and criminal offenses. The impugned order was set aside, effectively terminating the criminal proceedings against the appellant.
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PMLA

• Tribunal Validates Provisional Attachment in Money Laundering Case, Confirms Proceeds of Crime Under PMLA Provisions

  Case-Laws - AT : AT affirmed the provisional attachment order in a money laundering case involving alleged bank fraud. The tribunal held that: (1) a predicate offense existed at the time of ECIR recording, validating the proceedings; (2) properties were acquired subsequent to the criminal activity and qualify as "proceeds of crime"; (3) the confirmation order issued within 180 days, with a subsequent corrigendum correcting a typographical error relates back to the original order without invalidating the proceedings. The corrigendum did not alter the substantive order's intent. Consequently, the tribunal dismissed the appeal, upholding the provisional attachment and PMLA proceedings against the appellant.
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SEBI

• SEBI Barred from Issuing Multiple Disgorgement Orders on Same Cause of Action Under Section 11B After Initial Ruling

  Case-Laws - SC : SC held SEBI's subsequent disgorgement order dated 28.09.2018 was legally unsustainable. The regulatory body cannot pass multiple final orders on the same cause of action after its initial order dated 31.07.2014 under Section 11B. The court critically noted SEBI's procedural delays and lack of expeditious action, emphasizing that reopening proceedings without just cause undermines regulatory integrity. The tribunal's directions for investor compensation were deemed improper, as the earlier order had already attained finality. While acknowledging the fraudulent acts by the corporate entities, the court rejected the tribunal's cost awards as unjustified, effectively nullifying SEBI's post-2014 regulatory actions against the involved parties.
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Central Excise

• Excise Duty Case Dismissed: Lack of Evidence Invalidates Rs. 3 Crore Demand on Stock Shortage Allegations

  Case-Laws - AT : CESTAT adjudicated a central excise duty dispute involving alleged clandestine removal of goods without valid invoices. The tribunal invalidated the demand of Rs. 3,04,24,623/- and Rs. 1,76,650/- due to procedural non-compliance under section 9D of the Central Excise Act. Key deficiencies included: unexamined witness statements, unverified loose papers, and absence of corroborative evidence for stock shortage allegations. The tribunal emphasized that mere detection of stock shortages cannot automatically establish clandestine removal, necessitating comprehensive investigation considering multiple evidentiary factors. Consequently, the entire demand with accompanying interest and penalty was set aside, effectively allowing the appellant's appeal.
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Case Laws:

• GST

• 2025 (4) TMI 504
  Cancellation of GST registration of petitioner - manner in which the GST Registration has been cancelled is arbitrary and the impugned Order of cancellation has been passed without due application of mind - violation of principles of natural justice - HELD THAT:- Section 39[1] of the CGST Act inter-alia requires a registered person to furnish a return for every calendar month or part thereof, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars, in such form and manner, and within such time, as may be prescribed. Rule 61[1] of the CGST Rules has prescribed the Form and manner of furnishing of return electronically through the common portal either directly or through a notified Facilitation Centre, as specified under sub-section [1] of Section 39 of the CGST Act. As per Section 29[2][c], an officer, duly empowered, may cancel the GST registration of a person from such date, including any retrospective date, as he deems fit, where any registered person, has not furnished returns for such continuous tax period as may be prescribed. As per Rule 21[h] of the CGST Rules, registration granted to a person is liable to be cancelled, if the said person being a registered person required to file returns under sub-section [1] of Section 39 of the CGST Act for each month or part thereof, has not furnished returns for a continuous period of six months. On perusal of the impugned Order, it is evidently clear that the impugned Order is not in conformity with the procedure prescribed in FORM GST REG-19. A speaking order is one which expressly states the reasons for the decision. In other words, a speaking order speaks for itself by assigning the reasons behind the conclusion. If an order is passed without giving a reason by the concerned authority, then the order is a non-speaking one. Non-speaking order is one which does not provide a clear reason for its decision. The fact that the petitioner-assessee did not submit any Reply to the Show Cause Notice dated 14.11.2023 or did not appear before the Proper Officer, when she was called upon to do so, does not absolve the Proper Officer from the obligation of passing a speaking order as any order which brings adverse consequence to a person cannot be a mere paper formality. An adjudicating authority exercising statutory power of cancelling registration under the CGST Act must record reasons for its decision, if such obligation is not expressly or impliedly dispensed with. It is implicit in the principles of natural justice or fair play that an adjudicating authority should record reasons as it is part of fair procedure, more particularly, when the decision is likely to affect the right of the person concerned. Recording of reason is also prima facie suggestive of conscious application of mind on the part of the authority. The obligation to record reasons is a possible check against arbitrary action on the part of the adjudicating authority invested with the statutory power to take a decision which is likely to affect the right of the person concerned - from every standpoint, the impugned Order dated 20.12.2023 is not a speaking order. As such, the impugned Order dated 20.12.2023 is found to be one which is passed without any application of mind. For the afore-stated reasons, the impugned Order dated 20.12.2023 cannot stand the scrutiny of law and is liable to be set aside and quashed. In the fact situation obtaining in the case in hand, it is open for the petitioner to submit a Reply to the Show Cause Notice dated 14.11.2023 showing reason[s] as to why the GST Registration should not be cancelled in terms of sub-rule [2] of Rule 22 of the CGST Rules read with Section 29[2][c] of the CGST Act. In the alternative, the petitioner-assessee, at the time of and/or instead of replying to the Show Cause Notice served under sub-rule [1] of Rule 22 of the CGST Rules, can furnish all the pending returns and make full payment of the tax dues along with the applicable interest, late fee and penalty, if any. It is, therefore, observed that it would be open for the petitioner-assessee to avail either of the two options. This Court, for ends of justice, deems it just and proper to grant a period of one month from today to the petitioner to avail either of the two permissible options. Conclusion - The cancellation order dated 20.12.2023 is quashed due to its non-compliance with statutory requirements. It directed that the petitioner be allowed to respond to the SCN or fulfill pending obligations within a specified period. The Proper Officer is required to proceed in accordance with the prescribed procedure, ensuring that any subsequent order is reasoned and compliant with legal mandates. Petition allowed.

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• 2025 (4) TMI 503
  Rejection of the refund claims - mode and manner of determination of the amount of budgetary support - rejection of part of the claim by adopting certain calculations, which have not been made known to the petitioner - HELD THAT:- From a careful reading of Para 5 of the Budgetary Support Scheme, it becomes abundantly clear that an eligible unit manufacturing specified goods is entitled to budgetary support to be calculated at the rate of 58% of the central tax paid through debit in the cash ledger maintained under Section 49 (1) of CGST Act, 2017 and 29% of IGST paid, after utilization of the input tax credit of the central tax and integrated tax. This is so provided in Clauses 5.1(i) and %.1(ii). In the instant case, the CGST on value addition would be 75% (Chapter 25 of Table of Excise Notification No. 1/2010-C.E. dated 06.02.2010) of the total amount of CGST paid for the quarter July, 2021 to September, 2021, which, in any case, would be exceeding the refund claimed. In view of the aforesaid, there is no error or mistake committed by the petitioner claiming a refund of Rs. 1,35,632/-. There is no good reason emerging from the impugned order passed by respondent No. 3 to justify the rejection of claim of the petitioner for an amount of Rs. 31,456/-, which the respondent No. 3 has held to be an amount inadmissible on account of budgetary support. Conclusion - The rejection of claim of Rs. 31,456/- in respect of quarter July, 2021 to September, 2021 and Rs.69,684/- for quarter January, 2022 to March, 2022 by respondent No. 3 is held bad and contrary to the notification dated 05.10.2017. Respondent No. 3 shall take steps for release of the amount held inadmissible by it in the sanction/rejection orders impugned in this petition passed in respect of CGST paid by the petitioner for quarters July, 2021 to September, 2021 and January, 2022 to March, 2022 respectively. Petition disposed off.

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• 2025 (4) TMI 502
  Rejection of the refund claims - mode and manner of determination of the amount of budgetary support - rejection of part of the claim by adopting certain calculations, which have not been made known to the petitioner - HELD THAT:- From a careful reading of Para 5 of the Budgetary Support Scheme, it becomes abundantly clear that an eligible unit manufacturing specified goods is entitled to budgetary support to be calculated at the rate of 58% of the central tax paid through debit in the cash ledger maintained under Section 49 (1) of CGST Act, 2017 and 29% of IGST paid, after utilization of the input tax credit of the central tax and integrated tax. This is so provided in Clauses 5.1(i) and %.1(ii). In the instant case, the CGST on value addition is more than the refund claimed. In view of the aforesaid, we see no error or mistake committed by the petitioner claiming a refund of Rs. 1,53,331/-. There are no good reason emerging from the impugned order passed by respondent No. 3 to justify the rejection of claim of the petitioner for an amount of Rs. 48,640/-, which the respondent No. 3 has held to be an amount inadmissible on account of budgetary support. Conclusion - The rejection of claim of Rs. 48640/- in respect of quarter July, 2021 to September, 2021 and Rs. 64496/- for quarter January, 2022 to March, 2022 by respondent No. 3 is held bad and contrary to the notification dated 05.10.2017. Respondent No. 3 shall take steps for release of the amount held inadmissible by it in the sanction/rejection orders impugned in this petition passed in respect of CGST paid by the petitioner for quarters July, 2021 to September, 2021 and January, 2022 to March, 2022 respectively. Petition disposed off.

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• 2025 (4) TMI 501
  Maintainability of writ petition under Article 226 of the Constitution of India - availability of an alternative statutory remedy under Section 107 of the Central Goods and Services Tax Act, 2017 (CGST Act) - challenge to demand order - demand order came to the knowledge of the petitioner pursuant to the issuance of recovery notice - HELD THAT:- Having regard to the distinct concepts of maintainability and entertainability, there is no doubt that the instant writ petition is maintainable under Article 226 of the Constitution of India. The issue herein is, thus, whether this writ petition should be entertained or not in the backdrop of the obtaining fact situation. While it can be said that this Court has recognized some exceptions to the rule of alternative remedy i.e. where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoking the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal and Titaghur Paper Mills case and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution of India if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for the redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. This Court is of the unhesitant view that the petitioner has not been able to make out any exceptional case to interfere with the impugned order in the extra-ordinary and discretionary jurisdiction under Article 226 of the Constitution of India. In such view of the matter, this Court has found that the instant writ petition is not to be entertained. It is accordingly held. Conclusion - The writ petition is maintainable under Article 226 of the Constitution of India but should not be entertained due to the availability of an adequate alternative remedy under Section 107 of the CGST Act. The writ petition dismissed, allowing the petitioner to pursue the statutory appellate remedy.

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• 2025 (4) TMI 500
  Maintainability of petition - availability of alternative remedy - Violation of the principles of natural justice - lack of opportunity for the petitioner to be heard - HELD THAT:- From the perusal of the documents filed with the writ petition and order dated 08.04.2024, it is very much clear that the reply filed by the petitioner on 08.04.2024 has been duly considered by the Assessing Authority and prior to the passing of the impugned order the Assessing Authority has provided the proper opportunity of hearing to the petitioner, therefore the plea taken by the petitioner in the instant writ petition is not correct and judgments relied by the petitioner are no help to him. In the case of THE ASSISTANT COMMISSIONER OF STATE TAX AND OTHERS VERSUS M/S COMMERCIAL STEEL LIMITED [ 2021 (9) TMI 480 - SUPREME COURT] the Hon ble Apex Court has observed that respondents therein had a statutory remedy under Section 107 of CGST Act. The arguments which have been advanced by the learned counsel for the petitioner are very well to him while filing for statutory appellate remedy. Therefore, looking to the facts and circumstances of the case and the arguments advanced herein above, this Court, at this stage, is not inclined to entertain this petition. However, this Court is inclined to grant liberty to the petitioner to file an appeal before the concerned appellate authority according to the provisions of the Act, within 30 days from the date of receipt of a copy of this order and the same shall be decided by the appellate authority in accordance with law within a reasonable period of time without raising objection to limitation. Petition disposed off.

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• 2025 (4) TMI 499
  Rejection of the refund claims - mode and manner of determination of the amount of budgetary support - rejection of part of the claim by adopting certain calculations, which have not been made known to the petitioner - HELD THAT:- From a careful reading of Para 5 of the Budgetary Support Scheme, it becomes abundantly clear that an eligible unit manufacturing specified goods is entitled to budgetary support to be calculated at the rate of 58% of the central tax paid through debit in the cash ledger maintained under Section 49 (1) of CGST Act, 2017 and 29% of IGST paid, after utilization of the input tax credit of the central tax and integrated tax. This is so provided in Clauses 5.1(i) and %.1(ii). In the instant case, the CGST on value addition would be 75% (Chapter 25 of Table of Excise Notification No. 1/2010-C.E. dated 06.02.2010) of the total amount of CGST paid for the quarter January, 2022 to March, 2022, which, in any case, would be exceeding the refund claim. In view of the aforesaid, we see no error or mistake committed by the petitioner claiming a refund of Rs. 4,44,114/-. There is no good reason emerging from the impugned order passed by respondent No. 3 to justify the rejection of claim of the petitioner for an amount of Rs. 2195/-, which the respondent No. 3 has held to be an amount inadmissible on account of budgetary support. Conclusion - The rejection of claim of Rs. 2195/- in respect of quarter January, 2022 to March, 2022 by respondent No. 3 is held bad and contrary to the notification dated 05.10.2017. Respondent No. 3 shall take steps for release of the amount held inadmissible by it in the sanction/rejection orders impugned in this petition passed in respect of CGST paid by the petitioner for quarter January, 2022 to March, 2022. Petition disposed off.

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• 2025 (4) TMI 498
  Rejection of the refund claims - mode and manner of determination of the amount of budgetary support - rejection of part of the claim by adopting certain calculations, which have not been made known to the petitioner - HELD THAT:- From a careful reading of Para 5 of the Budgetary Support Scheme, it becomes abundantly clear that an eligible unit manufacturing specified goods is entitled to budgetary support to be calculated at the rate of 58% of the central tax paid through debit in the cash ledger maintained under Section 49 (1) of CGST Act, 2017 and 29% of IGST paid, after utilization of the input tax credit of the central tax and integrated tax. This is so provided in Clauses 5.1(i) and %.1(ii). In the instant case, the CGST on value addition would be 75% (Chapter 25 of Table of Excise Notification No.1/2020-CE dated 06.02.2010) of the total amount of CGSC paid for the quarter July, 2021 to September, 2021, which, in any case, would be exceeding the refund claimed. In view of the aforesaid, we see no error or mistake committed by the petitioner claiming a refund of Rs.6,87,756/-. There is no good reason emerging from the impugned order passed by respondent No.3 to justify the rejection of claim of the petitioner for an amount of Rs.1678/-, which the respondent No.3 has held to be an amount inadmissible on account of budgetary support. Conclusion - The rejection of claim of Rs.1678/- in respect of quarter July, 2021 to September, 2021 and Rs.7170/- for quarter January, 2022 to March, 2022 by respondent No.3 is held bad and contrary to the notification dated 05.10.2017. Respondent No.3 shall take steps for release of the amount held inadmissible by it in the sanction/rejection orders impugned in this petition passed in respect of CGST/IGST paid by the petitioner for quarters July, 2021 to September, 2021 and January, 2022 to March, 2022 respectively. Petition disposed off.

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• 2025 (4) TMI 497
  Time limitation - challege to ex-parte demand order and SCN - Violation of principles of natural justice - HELD THAT:- This subject matter is covered by the judgment in M/s Anita Traders Lko. U.P. Thru Proprietor Aneeta Sharma vs. State of U.P. and another [ 2025 (2) TMI 466 - ALLAHABAD HIGH COURT] - It has been held in the said judgment that an order under sub-Section 9 of Section 73 pertaining to financial year 2017-18 could have been passed by 05.02.2023 but not thereafter. The notification dated 24.04.2023 has been considered and the contention that such an order could have been passed til 31.03.2023 has been repelled for the reasons given therein. Now, in the case at hand the order under sub-Section 9 of Section 73 has been passed on 28.12.2023, therefore, it is clearly time barred. Conclusion - The orders dated 28.12.2023 and 11.07.2023 are quashed due to being issued beyond the jurisdictional time limit prescribed by law. The impugned orders/notices dated 28.12.2023 and 11.07.2023 quashed - petition allowed.

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• 2025 (4) TMI 496
  Levy of GST - assignment of lease hold rights of a plot of land allotted on lease by the Maharashtra Industrial Development Corporation (MIDC), and the buildings constructed thereon, by the lessee to a third party, on the payment of a lump sum consideration - HELD THAT:- The Division Bench of the Gujarat High Court in Gujarat Chambers of Commerce and Industry and Others Vs. Union of India and Others [ 2025 (1) TMI 516 - GUJARAT HIGH COURT] has taken the view that the assignment by sale or transfer of leasehold rights of the plot of land allotted by the Gujarat Industrial Development Corporation (GIDC) to the lessee or its successor (assignor) in favour of a 3rd party (assignee) for consideration, shall be an assignment/sale/ transfer of benefits arising out of immovable property by the lessee-assignor in favour of a 3rd party who would then become a lessee of GIDC in place of the original allottee-lessee. In such circumstances, the Gujarat High Court held that the provisions of Section 7 (1) (a) of the GST Act providing for scope of supply read with clause 5 (b) of Schedule II and clause 5 of Schedule III would not be applicable to such a transaction and the same would not be subject to levy of GST as provided under Section 9 of the GST Act. As far as the present case is concerned a Show Cause Notice dated 2nd August, 2024 was issued to the Petitioner and adjudication order dated 6th January, 2025 is also passed by Respondent No. 3. In these circumstances, in this Petition, the effect and implementation of the order dated 6th January, 2025 shall remain stayed - Place the above Writ Petition alongwith Writ Petition No. 14434 of 2023 and other connected Writ Petitions on 15th April, 2025 at 2.30 p.m.

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• 2025 (4) TMI 495
  Constitution of GST Tribunal - eligibility criteria for the appointment of Technical Members (State) - Seeking quashing of N/N. EXN-F(10)-42/2017-Vol.-II dated 19.10.2024 (Annexure P-8) issued by respondent No. 1 as being premature and ultra vires of the CGST Act, 2017 since Group A officers are available in the State of Himachal Pradesh - petitioner, a retired IAS officer, is eligible for the post of Technical Member (State) based on his qualifications and experience - justification for relaxation of criteria - HELD THAT:- A combine reading of sub-section (d) of Section 110 and the proviso appended thereto clearly draws out a distinction between Officers of the State Government and Officers of the All-India Service . The proviso clearly provides that such relaxation of the requirement of completion of 25 years of service in Group A or equivalent is only available in respect of the officers of such State, who have not completed 25 years of service in Group A or equivalent but have completed 25 years of service in the Government. This proviso is not at all applicable to the officers of the All-India Service . Now adverting to the grounds of the petitioner stating that the impugned notification, corrigendum and circular enabling relaxation under the proviso of Section 110(d) is ultra vires, we simply find no force in such contention, as the contention of the petitioner is based on complete misreading of Section 110(d), when he strongly urges that the recruitment rules could have only been relaxed when officers possessing 25 years of service in Group A or equivalent was not available and since the petitioner was available such relaxation could not have been conferred. This proviso regarding relaxation is only available to the officers of the State Government falling in Group A and not to the officers of All- India Service. Therefore, it is irrelevant and rather inconsequential that since the officer is available from All-India Service, the relaxation cannot be made qua the category of the officers belonging to the State. Adverting to the contention of the petitioner that the notification altering eligibility criteria is without proper reasoning and adherence to statutory provisions and appears to be designed to favour a specific group. This contention too is not tenable because identical relaxation, has already been granted to the officers of the State Governments in ten other States. Conclusion - The relaxation of eligibility criteria under Section 110(d) is permissible when no eligible State officers are available, and such relaxation does not extend to All-India Service officers. There is no merit in this petition and the same is accordingly dismissed.

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• 2025 (4) TMI 494
  Dismissal of appeal of the petitioner has been dismissed on the ground of delay - HELD THAT:- This Court finds it appropriate to direct that as soon as the President or State President enters the office of Goods and Service Tax Appellate Tribunal constituted under the Act of 2017, the petitioner may invoke the aforesaid provision for filing an appeal after statutory deposit. On such appeal being filed, the concerned Authority shall decide the same strictly in accordance with law. The statutory stay as provided under Section 112 (9) of the Act 2017 would remain in operation till the decision of said appeal. Petition disposed off.

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• 2025 (4) TMI 493
  Imposition of punishment and then conducting the trial - taking deter rent and coercive action, even prior to issuance of pre-intimation notice - HELD THAT:- The conduct of the Department is deplorable. The aim and objective of the GST Act, is not to destroy businesses or ensure their closures. The GST regime was brought in with the objective of ensuring tax compliances, and not with the intent or objective of ensuring loss of livelihoods. The growth of businesses and sustenance of businesses is vital for employment generation and growth of the Nation. If the Department can bear this in mind and act in consonance with the stated objectives of the Act, it would be rendering yeomen service to the business community. Such actions reflect a mind set, which is not wished to name here. There shall be an interim order, as prayed for, and any act ion shall be duly in compliance with the provisions of the GST Act - List on 29.04.2025.

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• 2025 (4) TMI 492
  Competence of respondent no. 2 to pass an order subsequent to the omission of the concerned rule - Rule 96(10) of the CGST Rules, 2017 - HELD THAT:- Having regard to the judgment delivered in the case of Kolhapur Canesugar Works Ltd. [ 2000 (2) TMI 823 - SUPREME COURT ], it would transpire that the effect of omission of rule from the statute book is different from the effect of substitution of rule and the effect of amendment of a statute which is saved by a saving clause. It appears that the Hon ble Supreme Court having noted the provisions of Section 6 of the General Clauses Act, 1897, had come to a finding that the exception contained in Section 6 of the General Clauses Act applies where any Central Act or Regulation made after commencement of the General Clauses Act repeals any enactment. It is not applicable to omission of a rule . Thus, the operation of repeal or deletion as to the future and past largely depend upon the savings applicable. In a case where a particular provision is omitted and in its place another provision dealing with the same contingency is introduced without the saving clause in favour of the pending proceedings then it can be reasonably inferred that the intention of the legislature is that the pending proceedings shall not continue but fresh proceedings for the same purpose may be initiated under the new provision. In the instant case, no new rule has been incorporated. On the contrary, rule 96 (10) has itself been omitted from the statute book without any saving clause, at least the parties at this stage have not been able to show anything to the contrary. The said provision of rule 96 (10) being omitted unconditionally, without a saving clause in favour of the pending proceedings, all actions from the date of such omission of the rule must stop. Having regard thereto, it is found that there was no scope for the respondent no. 2 to pass any order by invoking the provisions of rule 96 (10) of the said rules after the same was omitted on 8th October, 2024 without a saving clause in favour of the pending proceeding. Having regard thereto, and the petitioners having made out a prima facie case, the order impugned shall remain stayed till disposal of the writ petition. Conclusion - The order dated 30th January, 2025 is invalid due to the omission of Rule 96(10) and the order s enforcement pending the writ petition s resolution stayed. Liberty to mention for inclusion after expiry of the date for exchange of affidavits.

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• 2025 (4) TMI 491
  Challenge to impugned notice, followed by the reminder aforesaid - challenge primarily on the ground that the same were issued to a dead person and therefore, nullity in the eye of law - HELD THAT:- It is opied that no recoveries could be made in respect of the demand raised with respect to financial year 2017-18 against the petitioners. The petitioners, who were never heard by the STO before confirming the demand, cannot be held liable to discharge the tax liability in terms of Section 93 of the Act of 2017 which their predecessor-in-interest incurred during his lifetime. Indisputably, the return for the relevant year stood accepted by the respondents. It is only on scrutiny it was found that there was some variance between the returns GSTR-1 and GSTR-3B. This necessitated the issuance of statutory notice under Section 74 of the Act of 2017 - the demand came to be confirmed and notice of recovery dated 19.08.2024 came to be issued by the Tehsildar, Assistant Collector 1st Class, Bari Brahmana against the petitioners. The petitioners are rightly aggrieved and are before us to challenge the entire proceedings initiated by STO, after the return of the deceased Wali Mohd was picked up on scrutiny, which was followed by statutory notice in terms of Section 74 of the Act of 2017. Once it is not in dispute that Wali Mohd had died on 22.07.2019, it was incumbent upon the respondents to issue statutory notice in terms of Section 74 of the Act of 2017 to the petitioners, who are admittedly the legal heirs of the deceased Wali Mohd, and provide them an adequate opportunity of being heard before raising or confirming any demand. This, however, did not happen. The entire proceedings after the scrutiny till the issuance of the recovery notice are therefore vitiated for the non compliance of the principles of natural justice. The legal position enumerated in Section 93 is not in dispute, however, the proceedings which were undertaken by the STO upon scrutiny of the return filed by the tax payer Wali Mohd for the financial year 2017-18 and the proceedings that followed thereafter culminating into issuance of impugned notice of recovery against the petitioners are vitiated in law and cannot be sustained. Conclusion - Being the legal heirs of assessee late Wali Mohd, the petitioners were entitled to contest the notice issued by STO under Section 74 of the Act of 2017 more particularly when the assessee was not in this world to contest the proceedings. Petition allowed.

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• 2025 (4) TMI 490
  Seeking rectification of errors in a GST return - HELD THAT:- In view of the statement made by learned counsel for the petitioner, this petition is, disposed of, with a direction to respondent No. 2 i.e., Assistant Commissioner, State Tax Department, Union Territory of Ladakh, to consider and decide the representation(s), contended to have been submitted by the petitioner, under rules, at the earliest, having regard to judgments relied upon by the petitioner. The petitioner is directed to supply a copy of complete set of this petition along with a copy of this order to respondent No. 2, so as to facilitate early decision in the matter. Petition disposed off.

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• 2025 (4) TMI 489
  Violation of principles of natural justice - petitioner was not aware of the proceedings, which resulted in passing of the order, whereby huge demand has been created against the petitioner - HELD THAT:- The manner of passing of order dated 11.04.2024 falls foul of the requirements of Section 75(6) of the Act, which requires that the proper officer, in his order shall set out the relevant facts and the basis of his decision , the statutory requirements for passing an order by setting out relevant facts and basis of the decision are totally missing from the order dated 11.04.2024. Even if no response was filed to the notices under Section 61 and 73 of the Act, it was incumbent on the respondent no. 2 to pass an order in compliance of provisions of Section 75(6) of the Act as a final order should be self contained and merely making reference to the previous notice while passing the said order does not suffice for making it a self contained order. The matter is remanded back to respondent no. 3 to provide an opportunity of filing response to the show cause notice issued under Section 73 of the Act to the petitioner - petition allowed by way of remand.

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• 2025 (4) TMI 488
  Challenge to impugned order on the ground of time limitation - while passing the impugned orders the respondents have not complied with the mandatory requirement of sub-Section (4) of Section 75 of the Central Goods and Service Tax/Bihar Goods and Service Tax Act - HELD THAT:- This Court finds that in the present case the date of personal hearing was fixed on 05.06.2024 that is much before the date fixed for filing of reply i.e. on 14.06.2024. In paragraph 5 of the writ application the petitioner has made statement that without considering the petitioner s reply properly and the documents available on record and without grant of personal hearing the respondent no. 5 passed the order of demand - The three communications dated 03.07.2024, 11.07.2024 and 18.07.2024 which are purported to have been enclosed as Annexure R2/2, R2/3 and R2/4 respectively, have not been brought on record. Conclusion - Taking into consideration the pleadings available on the record, it is declared that in this case the mandate of sub-Section (4) of Section 75 of the CGST/BGST Act has not been duly followed. The matter is remitted to Deputy Commissioner of State Tax, Special Circle, Patna Central, Bihar, Patna (respondent no. 5) for passing a fresh order after giving a personal hearing to the petitioner - petition allowed by way of remand.

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• 2025 (4) TMI 487
  Violation of principles of natural justice - challenge to impugned order in Form GST DRC-07 dated 23.08.2024 along with the consequential rejection order of the rectification application - HELD THAT:- On perusal of records, it is seen that the respondent issued a show-cause notice dated 14.06.2024, calling upon the petitioner s reply and fixing date of personal hearing on 16.08.2024. The said show cause notice was issued on account of certain defects noticed in excess ITC availed by the petitioner and for suppression of turnover. Thereafter, the petitioner filed an adjournment letter seeking time to file a detailed reply along with relevant documents. However, the respondent without considering the same, passed the impugned order. Thus, this Court is of the view that the impugned order suffers from violation of principles of natural justice. Hence, this Court is inclined to set aside the impugned order. Petition disposed off.

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• 2025 (4) TMI 486
  Short payment of Goods and Services Tax - Adjudication of challenge to appellate order - HELD THAT:- The first Division Bench in M/s. Maa Tarini Traders [ 2024 (2) TMI 1421 - ORISSA HIGH COURT] directed a quantum of deposit with liberty to parties inasmuch as, petitioner could avail of its remedy upon constitution of the Tribunal and in event petitioner does not do so within time provided upon reconstitution, the department would be free to proceed. Petition dispsoed off.

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• 2025 (4) TMI 485
  Classification of goods - CGST/ SGST rate applicable for outward supply of Maida Pappad whose manufacturing purpose is sheeting the dough and cutting the sheet with knife - HELD THAT:- The impugned product, referred to as Maida Pappad , by the applicant are nothing but un-cooked/un-fried snack pellets, obtained through the process of extrusion, and as such they merit classification under chapter sub-heading 1905 90 30 of the Tariff. Further, by virtue of insertion of entry S.No.99B to Schedule I to Notification No. 01/2017-CT (Rate) dated 28.06.2017, through the amendment Notification No. 09/2023-Central Tax (Rate) dated 26.07.2023, they become liable to tax at the rate of 5% under GST, with effect from 27.07.2023 onwards. The applicant has stated during the personal hearing that the ruling passed by the AAR, Tamilnadu, on a similar issue in the case of M/s. Subramani Sumathi [ 2019 (3) TMI 926 - AUTHORITY FOR ADVANCE RULING, TAMILNADU ] supports their contention. In this regard, it is brought to the notice of the applicant that depending upon the nature of presentation of the facts of the case, the nature of product, the process involved, etc., which differs from one case to another, the advance rulings are always pronounced keeping in mind, the facts and circumstances of the respective cases. Conclusion - The product, Maida Pappad as referred to by the applicant in the instant case, are nothing but un-cooked/un-fried snack pellets, obtained through the process of extrusion, and that the same is liable to tax at the rate of 5% under GST with effect from 27.07.2023 onwards, in view of entry S.No.99B of Schedule I to N/N. 01/2017-CT (Rate) dated 28.06.2017.

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• 2025 (4) TMI 484
  Seeking grant of bail - proceedural lapse with regard to the arrest - territorial jurisdiction - HELD THAT:- It is not in dispute that M/s Cosmos Enterprises is situated within the jurisdiction of Delhi and Investigation qua siad firm is out of the purview of prosecuting the complainant. The amount of ITC Rs. 7,13,27,948/- is related to M/s Kanvas. Accused Virender Gupta and Rahul Dhingra are not connected with these firms in any document prima facie. As per Section 132 of CGST Act, ITC amount involving upto Rs.5 crore is a bailable offence. Both the accused persons have been stated to be beneficiary of the amount of ITC involved in the present case. Accused Virender Gupta has been alleged to be beneficiary of 25% of the alleged amount and accused Rahul Dhingra has been stated to be beneficiary of receiving 7% commission, which is less than the amount of Rs.5 crore. In order to show that both the accused are beneficiary of aforesaid 25% share and 7% commission, complainant has relied upon the statements of both the accused recorded by the complainant department at the time of arrest of accused. At this stage, the prosecution has not placed on record any concrete evidence in term of any whatsapp chats, bank transactions or anything else. In case titled as Vikrant Singhal and another. Vs. Union of India [ 2025 (3) TMI 57 - ALLAHABAD HIGH COURT ] Hon ble Allahabad High Court has observed that the sole piece of evidence relied upon by the prosecution regarding involvement of accused that applicants with fake firms is the confession of the applicants recorded under Section 70 of CGST Act but the truthfulness of the same would be decided during the trial which is yet to commence. Both the accused are in custody since 25.02.2025 and they have undergone custody of 25 days and they are not required for any further custodial interrogation and any recovery. Long incarceration will not serve any useful purpose when no recovery is to be effected and no further interrogation of the accused is required. In the present case, maximum sentence for the offence is upto 5 years and same is triable by the Court of Magistrate. In case titled as Sanjay Chandra Vs. CBI [ 2011 (11) TMI 537 - SUPREME COURT ], Hon ble Apex Court has held In the present case, the charge is that of cheating and dishonestly inducing delivery of property and and forgery for the purpose of cheating using as genuine a forged document. The punishment for the offence is imprisonment for a term which may extend to seven years. It is, no doubt, true that the nature of the charge may be relevant, but at the same time, the punishment to which the party may be liable, if convicted, also bears upon the issue. Therefore, in determining whether to grant bail, both the seriousness of the charge and the severity of the punishment should be taken into consideration. Having regard to the entire facts and circumstances of this case, the punishment and the material available on record, the fact that accused persons have no previous criminal history and medical ground as prayed in the bail application and without commenting upon the merits of this case, both the bail applications moved on behalf of applicants/accused Rahul Dhingra and Virender Gupta have been allowed and both the accused persons named above are admitted to regular bail on their furnishing bail bond in the sum of Rs. 50,000/- with one surety in the like amount each. The requisite bail bonds and surety bonds furnished, which are accepted and attested. Personal bonds accepted, which are to be attested at jail gate. Release orders of accused Rahul Dhingra and Virender Gupta, be issued immediately. Conclusion - The procedural requirements for arrest arre satisfied, the argument of illegality dismissed. Bail granted to the accused, requiring to furnish bail bonds with sureties. Bail application allowed.

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• 2025 (4) TMI 427
  Refund claim - refund application of the petitioner was rejected on the ground of non-furnishing of documents/certificates - HELD THAT:- It is observed that proof of payment is only required for export of services and not of goods (Refer Rule 89 (2) (b) and 89 (2) (c) of the CGST Rules). As a matter of fact, for export of goods, only a reconciliation statement of the Shipping Bill and Export Invoices is required, which has already been annexed to the refund application (Refer-Annexure-9 to the Writ Application). Further, paragraph-48 of the 2019 Circular (Annexure-10), clearly stipulates that insistence on proof of realization of export proceeds for processing of refund claims related to export of goods has not been envisaged in the law and should not be insisted upon . Even otherwise, the requirement of payment should be within 9 months of export as per clause A2 of RBI Circular being FED Master Direction No. 16/2015-16 dated 1.1.2016 as amended from time to time (Annexure-11); and the record suggests that all payments have been received by petitioner within 9 months as is evident from Annexure-9 to the writ application. Conclusion - The impugned order has no legs to stand in the eye of law as the same is based on extraneous grounds which are beyond the requirements of the CGST Act Rules and the binding Circulars issued thereunder. Petition allowed.

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• Income Tax

• 2025 (4) TMI 483
  Search and seizure of the gold ornaments at Railway Station - valuation was done at the RPF office rather than the Income Tax office - HELD THAT:- Owing to the lack of supporting documentation, discrepancies in weight and statements, and failure to establish that the seized jewellery was accounted for in the company s books, the jewellery remains unexplained. The respondent authorities acted within their legal powers and the investigation is ongoing to determine the appropriate assessment and computation. This Court is of the opinion that the respondent authorities had reasonable grounds to suspect that the gold ornaments being transported by the petitioner s employees were not properly accounted for in the company s records. Credible information was received from the Post Commander of the Railway Protection Force (RPF), Ranchi, which raised justifiable concerns regarding the nature of the jewellery being carried without the requisite documentation. The absence of crucial records, such as a bill book or alternative means for generating cash memos, gave rise to substantial suspicion regarding the legitimacy of the goods in transit. The respondent authorities, therefore, acted within the scope of their legal mandate and had valid grounds to believe that the jewellery might have been unlawfully transported or unaccounted for, justifying the seizure. The initial seizure of the jewellery was conducted by the authority under Sections 131 and 132 of the said Act. The respondents, after a detailed inquiry, discovered several discrepancies in the petitioner s documentation. The detained employees were unable to provide satisfactory explanations for the absence of stock registers and other essential records. Furthermore, the discrepancies in the weight of the seized jewellery, as compared to the petitioner s claimed quantity, further substantiated the belief that the goods were not accurately reflected in the petitioner s books. In exercising their powers in good faith and within the scope of their legal authority, the respondent authorities acted justifiably in seizing the jewellery at that time. The petitioner s failure to satisfactorily reconcile the seized jewellery with its books of accounts, along with the substantial discrepancies in the weight of the gold, justified the ongoing investigation. Consequently, the seizure of the jewellery remains valid as part of an investigation into potential non-compliance under the said Act.

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• 2025 (4) TMI 482
  Estimation of income - bogus purchases - primary onus of proving the purchases - Tribunal justification in estimating only 3% of bogus purchases - HELD THAT:- CIT (A) held that entire purchases cannot be held to be bogus since the sales have been made and thereafter estimated 1% on the bogus purchases and confirmed the same. In our view, the first appellate authority was too casual in his approach in adjudicating this matter without considering or giving findings on the various grounds on which the AO made the addition. In our view, based on the findings above, which the Tribunal confirmed, the Tribunal erred by estimating only 3% of the alleged purchases as bogus to justify disallowance. There was a clear error of law, and the ITAT s approach contradicted several decisions on the subject, as discussed in Kanak Impex [ 2025 (3) TMI 230 - BOMBAY HIGH COURT ] and others. By indulging in speculative reasoning that was never urged by or on behalf of the Assessee, the Tribunal should not have estimated only 3% instead of confirming the disallowance of all the purchases. Revenue is justified in relying upon the ratio of the decision in the case of Kanak Impex (Supra), wherein this Court has examined this issue and confirmed the disallowance of the whole of the purchases. We are conscious that in the case of Kanak Impex (Supra), the assessee did not co-operate with the revenue, which was one reason for confirming the disallowance. However, we have examined the legal position on this issue based on the findings of the Tribunal. Therefore, the ratio of the said decision squarely applies to the facts of the present case before us. The non-cooperation was only one of the grounds and not the sole ground. Besides, it is not as if the present assessee was very cooperative. Practically every vital information was not produced by citing convenient inabilities. The documents and paperwork that would have invariably accompanied genuine transactions were missing or the assessee expressed inability to produce them. This can hardly be called cooperation. Therefore, no case is made out to distinguish Kanak Impex (Supra) or the principles therein. Revenue is also justified in placing reliance on the decisions of La Medica [ 2001 (3) TMI 68 - DELHI HIGH COURT ] and Kaveri Rice Mills [ 2005 (3) TMI 776 - ALLAHABAD HIGH COURT ] wherein, in very similar fact situations, if not identical, the addition of all the bogus purchases has been confirmed. We reverse the orders passed by the CIT (A) and the Tribunal and restore the addition made in the assessment orders by the Assessing Officer. Questions of law are answered in favour of the Revenue and against the Assessee.

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• 2025 (4) TMI 481
  Credit for TDS - Non remittances of TDS by employer to the Income Tax Department - Demand raised on employees, from whose salaries Tax Deducted at Source (TDS) has been deducted - whether employee should not be mulcted with any liability for the amount of TDS deducted from their salaries by their employer even if such amounts have not been remitted to the Income Tax Department? - HELD THAT:- Standing Counsel for the Income Tax Department is right in contending that the Income Tax Department can give credit of TDS only to the extent of receipt. This is clear from a reading of Section 199. Denial of credit may ultimately result in a recovery, if the proceedings against the deductor u/s 201 do not end in recovery. This does not lead me to give any other meaning to Section 205. Thus, find myself in disagreement with the view taken by the Delhi High Court in Sanjay Sudan [ 2023 (2) TMI 1079 - DELHI HIGH COURT ] to the extent it holds that on deduction credit is immediately available to an assessee from whose income such deduction has been made even if such amount has not been paid over to the Central Government/Income Tax Department by the deductor. The instructions contained in the Office Memorandum (F.No.275/29/2014-IT(B) dated 11.3.2015) only deal with the aspect of initiation of recovery proceedings against a person from whose income a tax deduction has been made and does not deal with the question as to whether credit of such unpaid amounts of TDS has to be given to such person. Therefore, these writ petitions will stand disposed of holding that the petitioners are not entitled to the credit of any amount of TDS deducted from their salaries but not paid over to the Income Tax Department by the entity in which they were working. The petitioners are also not entitled to a writ directing the Income Tax Department to cancel the demands pending against them even though the amounts (TDS) have not been remitted to the Central Government/Income Tax Department. It will be open to the Income Tax Department to proceed against the entity (2nd respondent in all these cases) for non-payment of TDS deducted from the salaries of the petitioners by treating the 2nd respondent as an assessee in default u/s 201. If any amount is paid by the 2nd respondent or recovered from it, credit to the extent of such payment/recovery shall be given to the petitioners in these cases and demands to the extent of such recovery will be effaced.

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• 2025 (4) TMI 480
  Disallowance of Client Assistant Charges paid to ICICI Bank Ltd - assessee company has its own infrastructure facilities required for the purpose of the broking business having its own membership card of the stock exchange and its own premises etc. - whether the claim of expenditure made by Assessee is to be allowed as a business expenditure? - HELD THAT:- As not disputed that the Respondent Assessee has incurred these expenses. Merely because the beneficiary of three-in-one account scheme is ICICI Bank Ltd. and ICICI Securities has not charged any amount, that cannot be a ground for disallowing the expenditure incurred by the ICICI Securities. The second reason is with respect to the client assistant charges, being in lieu of the brokerage. Assuming that is so, we have not been shown any provision of any law, whereby Assessee could not have shared such alleged brokerage amount with ICICI Bank Ltd.. This would amount to sharing of brokerage and the business of Assessee, being a brokerage, the same would constitute expenditure incurred for the purposes of business. Therefore, even on this count, the disallowance cannot be sustained. The third reason is that ICICI Bank Ltd. is a gainer of large deposits and earns demat charges. Even in our view, that factor cannot be a consideration for disallowability of expenditure incurred by the Respondent Assessee. No substantial question of law arising out of Question No. 1 and therefore, the same is rejected. Losses are notional losses and therefore, cannot be allowed to be set off against the taxable income - In our view, even if it is a contingent in nature, this is the provision made on account of loss and based on conservative principle, same ought to be allowed as a deduction. Such losses have been held to be allowable by the Hon ble Supreme Court in the case of Principal Commissioner of Income Tax vs. Suzlon Energy Ltd [ 2020 (2) TMI 1559 - SC ORDER] . Assessee submits that this is not a notional loss but an actual loss. However, we are not going into that issue, since there is no clear finding on the same. The question can also be answered/adjudicated taking the revenue s contention has correct, since the same is covered by the decision of the Hon ble Supreme Court 2020 (2) TMI 1559 - SC ORDER] . No substantial question of law arises from Question No. 2 proposed by the Appellant- Revenue.

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• 2025 (4) TMI 479
  Validity of notice u/s 153C issued on the basis of WhatsApp chats - HELD THAT:- The law regarding Section 153C of the Act has a foundation of the search and seizure impact, the other person and the record of the present case clearly indicates that the WhatsApp chat is completely corroborated, and the said Chat which could be considered to be falling in the definition of other documents totally corroborated by the specific transactions which have taken place regarding the assessee who had clearly purchased the plots from the Om Kothari Group such sale and purchase is directly established with specific information in a particular year whereas it has not been shown by the assessee and thus, the power under Section 153C has been rightly exercised by the respondent in the present case. The persons having the WhatsApp chats were connected with both the companies herein and the transactions were regarding specific plots and the details of cash payment were clearly contained in the WhatsApp chat, thus with such specific inputs, the same cannot be said to be vague or hit by the strict parameters of Section 153C of the Act of 1961. The images in the mobiles, laptops and personal computers were specific and statement of one of the employees was also recorded u/s 131 and the statement included deciphering of unrecorded accounts for transactions, in regard to which, code language was used. This Court also observes that the big size plots were purchased by the petitioner; the unaccounted money paid are reflected in the chats; the purchase of the said plots was also found from the extracted digital data; the on-money etc. are reflected in the WhatsApp chats and images; the unaccounted cash transactions were found as reflected in the pictures; the incriminating chats between the parties in question regarding the unaccounted cash component was clearly reflected; the WhatsApp Chats reflected the details of cash on 08.02.2019; the unaccounted cash and further cash transactions are also reflected in the satisfaction note. This Court does not find it a fit case so as to grant any relief to the petitioner in the instant petition.

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• 2025 (4) TMI 478
  TP adjustment towards AMP expenditure - International transaction or not? - Tribunal has observed that since the judgment of our Court in Maruti Suzuki India Ltd. [ 2015 (12) TMI 634 - DELHI HIGH COURT] had not been taken into consideration, the matter would merit being remanded to the Transfer Pricing Officer (TPO) to determine whether AMP would qualify as an international transaction. HELD THAT:- As decided in order passed by the Tribunal for Assessment Year 2010-11 [ 2019 (4) TMI 1774 - ITAT DELHI] AMP expenditure cannot be treated as separate international transaction which needs separate benchmarking and accordingly we delete the entire AMP adjustment made by the Assessing Officer. A similar view came to be expressed by the Tribunal while dealing with the appeal pertaining to AYs 2011-12, 2012-13 and 2013-14, held once found that AMP expenditure is not an international transaction at all, then there is no question of any separate fact or transfer pricing adjustment. Accordingly, the adjustment on account of AMP expenditure in all the years is directed to be deleted. Since the Tribunal appears to have consistently followed and adopted the principle enunciated in Sony Ericson Mobile Communication India P. Ltd. [ 2015 (3) TMI 580 - DELHI HIGH COURT] we find that absent AMP being liable to be treated as an international transaction, the remit was clearly unwarranted. Assessee appeal allowed.

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• 2025 (4) TMI 477
  Revision u/s 263 - DRP has violated the provisions of law by not-complying with the directions of this tribunal on the issue of revision order passed by the PCIT u/s. 263 - HELD THAT:- DRP had observed that tribunal had not quashed the impugned order u/s 263 and actually had ordered deletion of additions, which actually were not made in the impugned order u/s 263. We find force in the said observations of the DRP. The directions of PCIT in his order u/s 263 dated 06.01.2023 extracted herein above, to the AO, were to examine the taxability of certain receipts. No directions qua any additions were given. We have also noted that the impugned order of this tribunal does not quashes the 263 proceedings in so many words. Consequently, we are of the considered that there is no case for assailing the order of Ld DRP on this. Addition as fees for included services u/s 9(1)(vii) of the act r.w. article 12(4) of India USA DTAA - HELD THAT:- Accordingly, in respectful compliance to the decision in assessee s own case for AY-2014-15 to 2017-18 [ 2024 (9) TMI 1506 - ITAT CHENNAI ] as also for the purposes of consistency we hold that amount received cannot be treated as taxable within the meanings of section 9(1)(vii) as they do not constitute technical services. Accordingly, we set aside the order of lower authorities and direct the AO to delete the impugned addition. Addition made by AO for want of requisite evidences provided by the assessee - It is the case of the assessee that the said expenses do not relate to the year under consideration - HELD THAT:- We are of the view that interest of justice would be met if the matter is remitted back to the AO for limited verification of the issue at hand. AO is therefore directed to decide the issue after giving proper opportunity of being heard to the assessee. Accordingly the ground of appeal no.4 raised by the assessee is allowed for statistical purposes.

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• 2025 (4) TMI 476
  Validity of the assessment order passed on a non-existing entity due to a merger - HELD THAT:- The various other decisions relied on by the assessee also supports his case to the proposition that the assessment in the name of a non-existent company is bad in law and has to be quashed. Since admittedly in the instant case, the assessment has been framed by the AO on a non-existing company despite knowing the fact that the assessee company is ceased to exist pursuant to its merger which was duly approved by the NCLT and which fact was also brought to the notice of the AO as well as the DRP, therefore, respectfully following the decisions cited above and in absence of any contrary decision brought to our notice by the DR, we hold that such assessment on a non- existent company is invalid. We accordingly, quash the assessment order passed by the AO and the legal ground raised by the assessee as per ground is allowed.

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• 2025 (4) TMI 475
  Validity of statements recorded u/s.131 during the survey proceedings u/s. 133A - HELD THAT:- Relying on the decision in the case of CIT vs. S. Khader Khan Son [ 2007 (7) TMI 182 - MADRAS HIGH COURT] duly affirmed by the Hon ble Apex Court, Ground No. 2 taken by the assessee is allowed and it is confirmed that section 133A does not empower the authorities to record the statements and statements obtained during the survey proceedings would not automatically bind the assessee. However, burden still lying on the assessee to prove the statement otherwise in the light of substantive evidences. Relying on the documents being seized in the light of section 292C of the Act and no importance is being given to the statements recorded u/s. 131 - It is true that section 133A r.w.s. 292C of the Act, raises a presumption that that the contents of books of account and other documents seized during the course of search is true. But it should be kept in mind that this presumption is only qua the person who is searched and/or from whose possession the books of account and documents are found and none else. Moreover, this presumption is rebuttable. In the given facts of the case, since the documents in question was not found or impounded from the appellant s premises but in the course of survey (not search) conducted against a third party, the presumption set out in Section 292C of the Act does not apply to the appellant. In the case of CIT v. Shrishakti Trading Co [ 1993 (9) TMI 78 - BOMBAY HIGH COURT] it has been held that it is well-settled that legal fictions are for a definite purpose and they are limited for the purpose for which they are created and should not be extended beyond that legitimate field. Other than this calculation sheets found at the premises of M/s. Quick Advertisement Co. no further working carried out by the AO to substantiate the same that it pertains to the assessee and calculations embedded there are true to be considered for the purposes of taxation. Notwithstanding, the above as held (supra) that the statement recorded during the survey operations 133A of the Act has no evidentiary value and presumptions drawn u/s. 292C of the Act are also not in the favour of the Revenue. Resultantly, Ground No. 3 raised by the assessee is allowed and the AO is directed to delete the addition.

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• 2025 (4) TMI 474
  Income deemed to accrue or arise in India - Interest income on loans in the form of suppliers credit given to Indian parties by a Japanese tax resident company - presence of a Permanent Establishment (PE) in India - Whether taxable at special rates as per Article 11(2) of the India-Japan DTAA? - HELD THAT:- We find that merely having a permanent establishment in India is not sufficient to exclude the applicability of Article 11(2) and invoke Article 11(6) r/w Article 7(1) of India-Japan DTAA. There is nothing on record which can remotely demonstrate that the interest income on providing supplier s credit is directly or indirectly attributable to assessee s permanent establishment in India and which can be brought to tax under Article 7(1) of India-Japan DTAA. Nothing has been brought on record which could demonstrate any distinguishing facts and circumstances of the case as compared to earlier year where the matter has been examined by the Coordinate Benches. Similar situation arises in terms of other interest income which has been offered by the assessee in its return of income under Article 11(2) of India-Japan DTAA as there is nothing on record to demonstrate how such interest income is attributable to permanent establishment in India. Decided against revenue.

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• 2025 (4) TMI 473
  Reopening of assessment u/s 147 - denial of exemption u/s 11(1) - HELD THAT:- In this case as no return of income was filed the notice u/s 148 of the Act was issued. Cash deposit in the bank account was out of the fees received, which fact has not been disputed before us. In the case of Genius Education Society [ 2018 (10) TMI 671 - ITAT CHANDIGARH] the provisional approval granted was good enough for claiming the exemption u/s 11 of the Act. Hence, the ground are allowed and the AO is directed to consider the income applied for charitable purposes and recompute the income as per law as the provisional approval was good enough for availing exemption for the impugned assessment year and the provision of section u/s 12A(ba) of the Act was inserted with effect from AY 2018-19 and were not applicable for the impugned assessment year. Hence, the appeal of the assessee is allowed with the direction to recompute the income as per law after considering the provisional approval for the purpose of granting exemption u/s 11 of the Act. Appeal filed by the assessee is allowed

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• 2025 (4) TMI 472
  Denial of deduction claimed u/s. 54F and 54B - assessee filed return belatedly u/s. 139(4) - HELD THAT:- Identical issue has been discussed by the coordinate bench, Mumbai in the case of Dr. Dharmista Mehta [ 2022 (10) TMI 544 - ITAT MUMBAI ] wherein held that the assessee in the case before us is entitled to claim exemption u/s 54 to the extent she had invested towards the purchase of new residential property under consideration upto the date of filing of belated return u/s 139(4).As assessee purchased new property well before the deadline given in section 139(4) which we find is much in excess of LTCG, thus in terms of our aforesaid observations set-aside the order of the CIT(A) and vacate the disallowance of the assessee s claim of exemption under section 54 - Decided in favour of assessee.

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• 2025 (4) TMI 471
  TP Adjustment - Addition of cost sharing charges - HELD THAT:- Although the TPO has made a reference of CUP method which was selected in the earlier year, however, the TPO has not carried out any such exercise for the price charged or paid for the property transferred or the services provided in a comparable uncontrolled transaction. As per Rule 10B of the Income Tax Rules, CUP method is a method, wherein the price charged or paid for property transferred or services provided in a comparable uncontrolled transaction is identified. Thereafter, the said price is adjusted to account for differences, if any and the said price is taken to be the Arm s Length Price. As per the said rule, for applying CUP method, the price charged for property transferred or services provided is required to be identified. However, in the present case, the TPO has not carried out any such exercise. Therefore, simply referring to CUP method without any reference to the actual uncontrolled transaction and the price charged therein clearly indicates that no CUP method is adopted by him. No method has been adopted by the TPO for determining the ALP. The observations of the DRP that the TPO has adopted the Other method as the most appropriate method in our opinion is incorrect since there is no reference to any such method as the TPO has not specifically mentioned the Other method as the most appropriate method. Thus, the question that is to be answered is as to whether any adjustment of ALP is in accordance with law if no method has been adopted by the TPO for determination of the ALP. As in the case of CIT v. Johnson Johnson Ltd. [ 2017 (4) TMI 1281 - BOMBAY HIGH COURT ] has held that the action of the TPO in determination of ALP without following any of the prescribed methods is incorrect and the addition made is to be deleted on the said reason. The various other decisions relied on by assessee also supports his case to the proposition that in absence of any of the prescribed methods for the determination of the ALP, such TP adjustment is not sustainable in law. Since the TPO in the instant case has not adopted any of the prescribed methods for determination of the ALP, therefore, we hold that the addition made by the Assessing Officer/TPO/DRP is not in accordance with law for which the same has to be deleted. The grounds raised by the assessee are accordingly allowed.

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• 2025 (4) TMI 470
  TP adjustment in the SWD segment - HELD THAT:- We find merit in the assessee s claim and direct the AO to consider the rectified giving-effect order and thereby delete the entire adjustment in the SWD segment. Hence, the ground of appeal of the assessee is hereby allowed. Addition on account of TP adjustment in the trading/distribution of the test and measurement equipment segment - HELD THAT:- We find the TPO on wrong assumption of facts proceeded to change the assessee s working of PLI by the changing the value of operating revenue, but the profit earned remained the same. Therefore, in our considered opinion the adjustment made by the TPO on wrong assumption of facts shall not be sustained. We upheld the assessee s computation methodology and held that the TPO s adjustments were not justified. The revenue recognition approach adopted by the assessee was deemed consistent with prior years and aligned with legal precedents. Once the assessee PLI margin is accepted, there no TP adjustment required to be made as the margin of the assessee is better than the margin of the comparables selected by the TPO. Accordingly, the main ground appeal of the assessee is allowed, whereas other grounds relating to the issue for selection of comparable and other adjustment such Risk and working capital in computation of margin become infructuous. Hence the ground of appeal of the assessee is allowed. Benchmarking the interest on outstanding receivables - TPO rejected the assessee contention that the receivables transaction should not be separately benchmarked as it was part of an overall business arrangement with the AE - whether or not the outstanding receivables from AEs are an international transaction? - HELD THAT:-It is pertinent to note TPO has given categorical finding that the assessee was asked to provide invoice details of receivable from AEs, but the assessee failed. Hence the TPO in absence of necessary details proceeded to calculate the interest by taking opening and closing value of receivables. AR before us submitted that the invoice details were furnished before the learned DRP but the same was not considered. Therefore,we are inclined to set aside the issue to file of the TPO for fresh consideration to the extent of calculation of interest for each and every invoice for extended credit period allowed or credit period allowed over and above the agreed credit period. The assessee is directed to provide the necessary evidence regarding the agreed credit period and also invoice wise details in order to calculate correct amount of interest on the delayed receivables. Rate of interest - TPO has taken LIBOR + 450 basis points whereas the assessee on strength of case law argued that the rate of interest should be LIBOR + 200 basis point - HELD THAT:- We hold that the appropriate rate interest shall be LIBOR + 200 Basis point. In view of the above detailed discussion, the ground of appeal raised by the assessee is hereby allowed for statistical purposes. Disallowances of CSR expenditure claimed u/s 80G - HELD THAT:- Authorities below have erred in denying claim of assessee u/s 80G of the Act. We also note that authorities below have not verified nature of payments qualifying exemption under section 80G of the Act and quantum of eligibility as per section 80G(1). Long-term capital gain in computation sheet - HELD THAT:- We note that the impugned adjustment was made in the computation sheet without affording the opportunity of being heard to the assessee. Hence, we set aside the issue to file of the AO with the direction to provide reasonable opportunity to the assessee to rebut the adjustment and if the assessee rebuttal is found as per law, the impugned adjustment shall be deleted. Hence, the ground of appeal of the assessee is hereby allowed for statistical purposes. Short granting of TDS credit - AO has not provided the credit of TDS deducted by an entity which merged with the assessee - HELD THAT:- We set aside the issue to the file of the AO with direction to verify the claim of the assessee and allow the credit of TDS as per the law. Hence the ground of appeal of the assessee is hereby allowed for statistical purposes.

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• 2025 (4) TMI 469
  TP Adjustment - adjustment in respect of technical know-how fees - HELD THAT:- It is an admitted fact that, the assessee is a part of the MNE, that is providing services worldwide to remain in sync needs identical platform to perform its business activity. Undoubtedly this is the only activity carried on by the assessee and therefore the services availed by the associate is inextricably linked with the business of the assessee. Further for the year under consideration it was also noted that had seen not received this technical know-how from the AE, it would not have been able to efficiently carry out its business. As regards the quantification of the royalty for the use of technical know-how, it is noted that had assess not toward any profit even after the receipt of services from the age, no amount was charged by the AE. The table reproduced of the objections filed before the DRP indicates that associate has been able to retain a consistent high margin. For the year under consideration assessee had earned a net profit margin of 10.92% as compared to 4.11% of the comparable companies which is not being considered by the authorities below. It is not doubted that TDS is deducted by the associate on payments made towards the technical know-how fees as royalty. It is also noted that the DRP has not agreed with the submissions of the assessee and the plethora of evidence filed in support of the need benefit test only because revenue has preferred appeal on this issue before Hon ble High Court and the issue needs to be kept alive. It is an admitted possession of the factual matters being identical and similar to the earlier assessment years where this Tribunal analysed identical issues based on the scene agreement. On analysis of the issue and respectfully following the view taken by coordinate bench of the treble in assessee s own case for assessment in 2018-19, we do not have any reason to uphold the adjustment made by the Ld.AO. Alternative disallowance proposed by the DRP u/s 37, regarding technical know-how fees paid by the assessee to its AE - We have already observed based on the evidences relied by the assessee in the preceding paragraphs that these expenses has to be incurred by the assessee for purposes of its business. The assessee filed sufficient evidence to establish need of the technical know-how in order to carry out its business activity smoothly. It is also recorded hereinabove that these are inextricably linked to the services rendered by the assessee and therefore are in the nature of business expenditure. Addition proposed markup of 4.11% on recovery of expenses from the AE - For the year under consideration it is noted that by adopting net margin method, assessee has earned a margin of 10.92% as compared to 4.11% in case of the compatibles. As assessee has earned better margin, no adjustment is warranted. Respectfully following the view taken by court made bench of the tribunal in assessee s own case for assessment year 2018-19, we do not find any reason to uphold the adjustment made by Ld.AO/TPO. Grant the TDS credit - We direct the Ld.AO/TPO grant the TDS credit after necessary verifications of the documents filed by the assessee in support of the same. Interest u/s 234A and B - AO is directed to verify if the return filed by the assessee falls within the extended time limit by the CBDT in the above circulars and then to compute the interest u/s 234 A if there is any delay after considering the extended period from the date of filing of return. In respect of the interest under section 234B also we direct to AO to verify and to consider the claim in accordance with law.

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• 2025 (4) TMI 468
  Assessment order u/s 153A - Unaccounted Transactions relating to Sale of Immovable Properties - HELD THAT:- AO was directed to tax the capital gains year-wise under the appropriate heads and provide relief for the disallowed expenses that were explained by the unaccounted receipts. While restricting the benefit of indexation to the year of receipt of sale proceeds the CIT(A) observed that the assessee received sale consideration well in advance and incurred major expenditure from such unaccounted sale proceeds thus no undue hardship in terms of cost inflation was faced by the assessee. Departmental Representative (DR) relied on the order of AO and stated that the assessee has failed to establish a direct nexus between the unaccounted receipts and unaccounted expenses and the payments were neither supported by any documentary evidence, nor was there any proof to demonstrate that the expenses were incurred out of unaccounted receipts. AR on the other hand, relied on the order of CIT(A) and stated that the CIT(A) has rightly followed the settled law that only real income can be taxed in the hands of assessee out of the given set of transactions. Taxation on capital gain - benefit of indexation to the year of receipt of sale proceeds - HELD THAT:- We concur with the CIT(A) that once the unaccounted receipts from the sale of properties are subjected to taxation as part of the capital gains computation, the related unaccounted expenditures stand explained and cannot be taxed separately as unexplained expenses. Accordingly, no further addition under Section 69C is warranted. This ensures that only the net real income is taxed, in line with the statutory provisions and the principles of equity and justice. On the specific issue of indexation benefit, we agree with the assessee s contention that once the capital gains arising from the transfer of the asset are accepted, its computational mechanism, including the benefit of indexation, must also be adopted in accordance with Section 48. Clause (iii) of the Explanation to Section 48 clearly defines indexed cost of improvement to include indexation up to the year in which the asset is transferred, irrespective of the timing of the receipt of sale proceeds or the incurrence of expenditure. By restricting the benefit of indexation to the year of receipt of sale proceeds, the CIT(A) failed to adhere to the statutory provisions governing the computation of long-term capital gains. Therefore, we allow this ground in favour of the assessee and directs the AO to re-compute the long-term capital gains for both Shilpgram and Khoraj properties by applying the Cost Inflation Index (CII) of the year of transfer while determining the indexed cost of acquisition and improvement. Revenue s contention that there is no nexus between unaccounted receipts and expenses is rejected. CIT(A) has correctly analysed the seized evidence and noted that the unaccounted receipts adequately explain the unaccounted payments. DR s reliance on the AO s findings is unsupported by evidence, as no contrary material was presented to dispute the CIT(A) s conclusions. Internal Circulation of Funds and Unaccounted Receipts and Payments - AO made substantial additions based on these receipts and payments, rejecting the assessee s claim of internal circulation of funds - HELD THAT:- Application of peak credit to compute the net unaccounted cash transactions - AO rejected this claim, arguing that the peak theory is applicable only when cash transactions form a continuous cycle of inflow and outflow recorded in the books. We observe that the assessee failed to provide a cash flow statement or reconciliation to support the claim of peak credit and in the absence of detailed evidence linking cash inflows and outflows, the peak credit theory could not be applied. We concur with the CIT(A) for the reason observed above and dismiss these grounds of assessee. We also emphasize that the seized material must be interpreted as a whole rather than selectively. AO s approach of taxing receipts while ignoring corresponding payments distorted the factual position. We endorse the CIT(A) s approach of basing conclusions solely on the seized material and existing records without introducing fresh evidence. Internal Circulation of Funds - The seized material, including diary notings, indicated that the transactions involved known individuals and group entities such as Jigar Mandaviya, Hemedrabhai, KRG, and Kailash Goenka. We concur with the CIT(A) that the amounts represented cash transfers within the group, which had already been taxed in the hands of the respective entities. The CIT(A) emphasized that taxing the same amounts again in the assessee s hands would result in double taxation, which contravenes the principle of taxing real income . CIT(A) s deletion upheld for all assessment years, confirming that the amounts categorized as internal circulation should not be taxed in the hands of the assessee. Unaccounted Business Receipts and Payments - We agree with the Revenue that these revenue streams inherently carry larger profit margins due to minimal operating costs compared to hospitality services or real estate projects. In absence of quantified information on Franchise Fee and Royalty, we hold that while the assessee s offer of 25% profit was conservative, the CIT(A) s adoption of a 30% rate was justified based on the nature of the business activities and available profit data. We emphasize that the chosen rate must reflect the average profit embedded in the unaccounted receipts, especially for high- margin streams such as franchise fees and royalties. We also emphasize that judicial discretion in determining profit rates must be exercised within the bounds of factual evidence and judicial precedents. The 30% rate was consistent with past assessments of the group and reflected the diverse income streams of the business, especially Franchise Fees and Royalty. It is also observed that revenues such as Franchise Fees and Royalty were not present in case of other group entities. Accordingly, the addition the relevant assessment years calculated at the rate of 30% of receipts is confirmed. Issue of Transactions with Pawan Jalan - AO did not bring any independent evidence to contradict the assessee s claim or to establish that the Rs. 1 crore was a fresh inflow of income. The addition was primarily based on assumptions and a mechanical reading of Section 69C. We once again emphasize that taxation should be based on real income rather than notional or gross receipts. Judicial precedents consistently advocate that only the profit component in unaccounted transactions should be taxed. We accept the assessee s alternative proposal to tax the transaction at 25% of the receipts. We observe that this approach balanced fairness and legal compliance, ensuring that only the embedded profit was taxed while avoiding double taxation. Additions in respect of personal Expenditure - AO invoked Section 69C and disallowed the expenses u/s 40A(3) due to cash payments. However, once the receipts have been taxed, the source of the expenditure is no longer unexplained. The business nexus becomes immaterial for personal expenses funded from taxed income. While the AO rightly placed the burden of proof on the assessee under the Evidence Act, the assessee sufficiently demonstrated that the expenditures were outflows from already-taxed inflows. The nexus between the taxed receipts and personal expenditures was reasonably established. The CIT(A) correctly applied the set-off principle by ensuring that the net effect of taxing unaccounted receipts and corresponding expenditures did not lead to double taxation.

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• 2025 (4) TMI 467
  Scope of limited scrutiny - addition made on account of cessation of liability u/s 41(1) and disallowance of transmission charges - HELD THAT:- Since the addition made on account of cessation of liability u/s 41(1) of the Act and disallowance of transmission charges were admittedly beyond the scope of limited scrutiny, those additions are liable to be deleted as the same has been made in violation of aforesaid CBDT instructions and the decisions of Hon ble Jurisdictional High Court and Hon ble Supreme Court. Hence, we hold the addition made u/s 41(1) of the Act and disallowance of transmission charges are hereby deleted on this preliminary legal issue without going into the merits of such addition. Accordingly, the Ground raised by the assessee are allowed on the technical issue. Notional interest income addition made on account of investment in 9% compulsorily convertible debentures (CCDs) - HELD THAT:- We hold that this issue would certainly fall within the scope of one of the parameters selected and reflected in the limited scrutiny. Hence there could be no objection for the assessee in this regard. It is not in dispute that the entire investment in CCDs of group concerns were made out of own funds and not out of borrowed funds. The waiver of interest stipulated is always at the discretion of the debenture holders. We find that the waiver of interest by the assessee was a bona fide commercial decision to support the group concerns as mutually agreed, neither the assessee has provided interest income nor has the borrower DJ Windfarm / Jasdan, etc., provided any interest expenditure. Entire investment in CCDs was out of own non-interest bearing funds of the assessee. With regard to taxation of notional interest income, in the case of Shiv Nandan BuildCon Pvt. Ltd. [ 2015 (5) TMI 192 - DELHI HIGH COURT] had observed where assessee-company gave interest-free advance to another company, in absence of any specific provision under Income-tax Act, notional interest income computed by AO on said advance was to be deleted. We have no hesitation to delete the addition made in the sum towards interest income on notional basis. Accordingly, the Ground raised by the assessee is allowed.

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• Customs

• 2025 (4) TMI 466
  Seeking issuance of appropriate directions to the Respondent-Department to either return the gold to the Petitioner or refund the value of the said gold - HELD THAT:- The entire journey of 10 years has still not culminated in either redemption or refund being issued to the Petitioner. Clearly, the Customs Authorities ought to have initially given effect to the order of Commissioner (Appeals) and accordingly should have determined the duty and allowed the Petitioner to avail release of the gold, which did not happen. Gold prices have also increased considerably during this period. Considering this position, the Court is inclined to direct the Adjudicating Authority, Assistant/Deputy Commissioner (Refunds) to pass the refund order within a period of one month from today. List for reporting compliance on 15th July, 2025.

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• 2025 (4) TMI 465
  Seeking release of the gold items being one gold chain weighing 51 grams and two gold pieces weighing 65 grams each seized - HELD THAT:- The Petitioner is willing to pay the customs duty as payable on the said gold pieces. Further, in the opinion of this Court the gold chain could be considered as a personal effect of the Petitioner. Insofar as the gold chain, is concerned the same shall be considered as a personal effect of the Petitioner, and shall be released to the Petitioner without payment of the customs duty. Insofar as the gold pieces are concerned, let the Petitioner appear before the Customs Department and an order be passed bearing in mind the above fact that the Petitioner wanted to declare the said gold pieces and had chosen to go through the red channel. Petition disposed off.

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• 2025 (4) TMI 464
  Seeking issuance of an appropriate writ quashing the Detention Receipt - detention of six gold bangles weighing 149 grams, worn by the appellant while travelling - HELD THAT:- The Petitioner, being a foreign national and the detained goods being her personal effects, she would be an eligible passenger in terms of Rule 3 of Baggage Rules, 2016. This position has been clarified by the Coordinate bench of this Court in Nathan Narayansamy v. Customs Commissioner [ 2023 (9) TMI 1549 - DELHI HIGH COURT] . Since, the Petitioner is an Iranian citizen and is now in Iran, let an Authorised Representative appear before the Customs Department. The goods shall be appraised and shall be released for being re-exported. No storage charges shall be liable to be paid in this matter, as the Petitioner s bangles which the Petitioner was wearing were her personal effects. Petition disposed off.

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• 2025 (4) TMI 463
  Jurisdiction - power of Tribunal to decide any appeal in respect of an order passed by the Commissioner (Appeals) under Section 128 A of the Customs Act, 1962 relating to any goods imported or exported as Baggage - goods recovered from the person of a passenger are a part of her baggage , in terms of proviso (a) to Section 129A (1), of the Customs Act, 1962 or not - HELD THAT:- There is no doubt that what was answered by the Hon ble jurisdictional High court and extracted at para 13 above related to the jurisdiction of the Tribunal to decide any appeal in respect of an order passed by the Commissioner (Appeals) under Section 128 A of the Customs Act, 1962 relating to any goods imported or exported as Baggage and that Baggage under the 2016 Rules includes jewellery worn on the person. In DIRECTORATE OF REVENUE INTELLIGENCE Vs PUSPHA L. TOLANI [ 2024 (8) TMI 332 - SC ORDER ], decided by the Hon ble Supreme Court and cited by the appellant in their favour, the passenger on arrival in India opted to walk through the Green Channel . She was intercepted and on an examination of her baggage, 28 packages containing 44 items of jewellery worth Rs. 1.27 crores were recovered from two hand bags. The Hon ble Supreme Court held that the respondent did not violate the provisions of Section 77 of the Act since the necessary declaration was made by the respondent by passing through the Green Channel. This is itself a declaration that a passenger had no dutiable or prohibited articles and is devised with a view to facilitate expeditious and smooth clearance of the passenger. After a harmonious reading of Rule 7 of the Baggage Rules, 1998 read with Appendix E (2) of the Rules with the facts of the case, the Hon ble Court held that the respondent was not carrying any dutiable goods because the goods were the bona fide jewellery of the respondent for her personal use and was intended to be taken out of India. Hence the issue was decided in terms of the Baggage Rules only. The Customs Act, 1962 is the main legislation granting powers to the Government to levy and collect duties of customs on goods imported into and exported from India. The Baggage Rules, 2016, has been framed under the Customs Act 1962. They are a set of guiding principles, which come into play, for clearing baggage both accompanied and un-accompanied - of individuals who travel to India from abroad - between their importation and the time when it exits the international airport upon clearance and loses its presumtive identity as baggage . Hence once the luggage / bag which accompanies an individual arriving from a domestic airport in India, during the aircrafts domestic run, is intercepted by the officers at the Chennai domestic airport, there cannot be a presumption that it is covered under the Customs Act, 1962 and to which the Baggage Rules, 2016 can automatically apply. Imported consumer goods are freely available within the country and cannot be presumed to be goods improperly imported or to be smuggled goods if found on the person or in the luggage of individuals arriving at domestic airports, while the flight is on a domestic run. A presumption can be drawn only from facts and not from other presumptions by a process of probable and logical reasoning . Hence the articles allegedly found / recovered from an individual s luggage or from his person, in the circumstances, cannot be presumed to be part of baggage as defined under the Customs Act 1962. The onus of proof would be on the department, unless provided for otherwise by the statute, and an appeal against any order passed by a Commissioner (Appeals) in this regard would hence lie before the Tribunal. Conclusion - i) The presumption of goods being part of baggage does not apply, and the Tribunal retains jurisdiction to hear appeals related to such cases. ii) The appeal involving Ms. Noorul Ayin be returned for filing before the appropriate appellate forum, while the other appeals could proceed before the Tribunal if no other defects existed.

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• 2025 (4) TMI 462
  Over invoicing of goods exported under cover of 35 shipping bills from ICD Pantnagar to avail inadmissible drawback benefits under the Customs Act, 1962 - confiscation and impositions of penalty - HELD THAT:- The evidences collected by the Department are only value of goods determined on the basis of costing and non existence of few suppliers. It is interesting to note that market enquiry carried out by the Officers of ICD Pantnagar shows entirely different result from the report of DRI Officers in respect of value of export goods. As per report of ICD Customs Pantnagar, the value of goods exported was at par or at higher side than FOB value of the respective goods. The outcome of the enquiry was very much in the knowledge of the DRI but it was deliberately ignored. DRI Officers got the enquiry conducted, not from the market but by way of costing given by a couple of manufacturers of garments and applied Rule 5 of the CVR to determine value of export goods. It is well established fact that market price of a product does not depend on the value arrived by way of costing. Many times market price is substantially higher than the costing value. The costing certificate on which the department relies does not have any evidentiary value for determining the cost of the exported goods. It is found that the Appellant has produced all bills/invoices of purchases of goods with payment details thereof. The Department did not challenge its authenticity. In the case of M/s Peerless Consultancy Services Private Limited vs. Commissioner of Customs (PORT), Kolkata [ 2013 (8) TMI 508 - CESTAT KOLKATA] , it has been held by the Tribunal that the burden of proof is on the Department regarding overvaluation in absence of flow back of payment made to the merchant-exporters. Moreover, the Appellant had undoubtedly received remittances equal to the FOB value of the exported goods. The department has not proved any flowback of the money from foreign buyers to exporter or vice versa. There is no proof at all that any transaction of money was carried out other than the payment of FOB value of goods - thus, there is no case of over invoicing of export goods in the present case. Declaration of higher quantity of goods and drawback in shipping bill - HELD THAT:- All export documents like invoice, packing list etc were showing correct quantity of export goods. There are sufficient force in the contention of the Appellant that in shipping bill, quantity of goods was shown on higher side due to typographical mistake. Conclusion - There is no role of the CHA (Appellant No.2) in deciding valuation of the subject goods and the Appellant is also not responsible for verification of declared FOB values of the subject goods. The Customs Broker i.e. Appellant No.2 has not done any act of commission or omission which would render the goods liable for confiscation under Section 113(i) or under Section 113(ia) of the Act. The Redemption fine and the penalties imposed under Section 114 and 114AA on both the Appellants are set aside. Appeal allowed.

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• 2025 (4) TMI 461
  Imposition of additional customs duty on import of Raw Silk fabric - Applicability of N/N. 30/2004-CE dated 09/07/2004 as amended by N/N. 34/2015-CE dated 17/07/2015 and N/N. 37/2015-CE dated 21/07/2015 - HELD THAT:- The subject imports were self assessed by the appellant claiming NIL CVD for the imported goods as the said goods were exempt from payment of excise duty vide N/N. 30/04-CE as amended read with N/N 34/2015-CE dated 17.7.2015 and 37/2015-CE dated 21.7.15. The Hon ble Supreme Court in the case of SRF Ltd. [ 2015 (4) TMI 561 - SUPREME COURT] had held that notification conditions that the import goods were incapable of meeting cannot be thrusted upon, thereby implying that the appellant in the present case had deemed to have satisfied the same and eligible for exemption from levy of said Additional Duty of Customs on the import goods. The amendment made vide N/N. 34/2015-CE dated 17/7/15 provides a condition qua payment of duty on inputs and non-availment of Cenvat Credit by the manufacturer. Therefore, the sweep of the judgment of SRF Ltd. is not affected. N/N. 37/2015-CE dated 21.7.15, further relaxes the condition that the nil payment of duty on input would also qualify as payment of duty. Here again too these amendments do not bring about any change to the implication and the meaning as flows out of the apex court s orders. The Honb le Supreme Court in the case of AIDEK Tourism Services Pvt. Ltd. [ 2015 (3) TMI 690 - SUPREME COURT] , has held that for the purpose of levy of duty under Section 3 of the Customs Tariff Act, actual production or manufacture of a like article in India is not necessary. It is to be imagined that article imported has been manufactured or produced in India and it need to be seen what amount of excise duty was leviable thereon. Honb le Supreme Court held that the importer is to be treated as a manufacturer of the goods and thereafter the amount of Excise duty/Additional Duty that is required to be paid is to be determined. Conclusion - The conditions which cannot be complied with by the importer should not be imposed, as established in the SRF Ltd. case. There are no reason to interfere with the impugned orders and accordingly, the same is sustained - appeal filed by Revenue is dismissed.

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• Securities / SEBI

• 2025 (4) TMI 460
  Offence under SEBI - misleading advertisements issued by VCL with regard to buyback of its shares, issue of bonus shares and preferential issue of shares within 30 days - SEBI s actions in reopening the case and issuing fresh orders after a final order had already been passed - HELD THAT:- It is not open to SEBI to claim that it could pass multiple final orders on the same cause of action. Having undertaken the exercise pursuant to its show-cause notices issued in 2012, SEBI passed the order dated 31.07.2014, in exercise of power under Section 11B of the Act of 1992, with certain directions which attained finality and were given full effect to. That being so, SEBI could not have reopened the entire exercise without just cause so as to pass a fresh order u/s 11B, once again, 4 years later. We may also note the unconscionable delay on the part of SEBI. Though the WTM of SEBI passed the order on 01.04.2016, requiring an examination afresh and initiation of disgorgement proceedings, it was only on 19.01.2018 that SEBI got around to issuing a show-cause notice proposing disgorgement and then passed an order seven months later. This laidback and indolent approach on the part of SEBI in dealing with the matter needs mention as it does not augur well for a statutory body enjoined with the duty of protecting investors and regulating the securities market which, by its very nature, is volatile, to drag its feet and indulge in unwarranted and unjustified delays. Viewed thus, we are of the opinion that the entire exercise undertaken by SEBI after the passing of the final order dated 31.07.2014, resulting in the disgorgement order dated 28.09.2018, was unsustainable in law. Tribunal s authority to direct SEBI to compensate investors who suffered losses due to misleading advertisements - As the compensation claim of Ram Kishori Gupta and Harishchandra Gupta against SEBI stood decided by the Tribunal s order dated 30.04.2013, which also attained finality, it was not open to them to reopen the same and seek to pin such liability upon SEBI once again. The directions in that regard by the WTMs of SEBI in the orders dated 16.12.2014 and 01.04.2016, culminating in the direction for restitution by the Tribunal in its judgment dated 02.08.2019 in Appeal No. 44 of 2019, cannot be sustained. It was not for the Tribunal to interpret its earlier order dated 30.04.2013 and give it a different colour, contrary to its plain meaning. Finally, it has been contented before us by SEBI that as only 4 entities, including VCL, out of 22 entities, filed appeals against the disgorgement order dated 28.09.2018, the said order cannot be invalidated against those who had not chosen to file any appeal. We are informed that some of the individuals concerned have expired while most of the corporate entities have become defunct. In any event, as the order suffers from an inherent lack of jurisdiction, being barred by the principle of res judicata/ constructive res judicata, this argument cannot stand. However, given the fact that VCL and the other entities, who were the appellants before the Tribunal, were held to have indulged in fraudulent acts and transactions and were not innocent or guileless, by any stretch of imagination, the direction of the Tribunal practically rewarding them with costs of Rs.2,00,000/- each was entirely unjustified on facts.

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• Insolvency & Bankruptcy

• 2025 (4) TMI 459
  Admission of Section 7 Application - default in repayment of the principal loan amount fell within the Section 10A period or not - HELD THAT:- The present case is founded on the basis that even after end of 10A period, the CD defaulted in its obligation to pay monthly interest and liability of interest from 26.03.2021 to 31.05.2021 was more than Rs.9.38 crores. The Adjudicating Authority having returned a finding that Section 7 Application was entertainable on the basis of default of interest, which is subsequent to the end of 10A period, i.e. with effect from 26.03.2021 to 31.05.2021, there are no error in the order admitting Section 7 Application. The question as to what should be the amount of claim of the Financial Creditor is not to be determined at the time of admission of Section 7 Application and that is the subject matter of collation and verification by the RP in the CIRP. It is made clear that while upholding the decision of the Adjudicating Authority admitting Section 7 Application, no opinion expressed on the amount of claim of the Financial Creditor, which need to be determined in the CIRP in accordance with relevant statutory provisions. Appeal dismissed.

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• 2025 (4) TMI 458
  Admission of section 7 application filed by the Bank of Baroda (BoB) - order admitting Section 7 application passed without service of notice on the appellant - HELD THAT:- In Rule 38(1), the expression at the email address as provided in the petition or application or in the reply . It clearly refers to petition which was filed by the financial creditor under Section 7 and email address as provided in Section 7 is the address on which process can be served on the corporate debtor. Thus, it is not persuaded to accept the submission of the appellant that in the present case service under Rule 38(1) was not possible, the corporate debtor having not been filed any petition, application or reply. The authorised representatives of the bank also physically visited the premises who have submitted a report. Thus, the service of the notice was duly made to the appellant and the adjudicating authority proceeded to hear the matter only after service was duly affected on corporate debtor. It is relevant to notice that the appellant during his submissions has not even questioned the debt and default on the part of the corporate debtor. The debt and default was fully proved by the financial creditor. The copy of CIBIL Reports and statements of account were also filed by the financial creditor. The corporate debtor was well aware of the several proceedings initiated by the financial creditor against the corporate debtor. Conclusion - No good ground has been made to interfere with the impugned order admitting Section 7 application. Appeal dismissed.

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• 2025 (4) TMI 457
  Entitlement of Appellants, as homebuyers, to voting rights in the Committee of Creditors (CoC) - Dismissal of application on the grounds that the Appellants held only a minuscule voting share - Appellants contended that their claims were not considered, despite having valid Builder Buyer Agreements, allotment letters, and receipts - HELD THAT:- The CoC had already approved the Resolution Plan of the Successful Resolution Applicant and based on which the Respondent No. 1 moved an IA bearing CA No. 485/ND.2019 under Section 30(6) r/w Section 31(1) of the Code before the Adjudicating Authority for approval of the Resolution Plan which has already been approved by the Adjudicating Authority vide order dated 12.09.2022. It is also pertinent to mention that the Respondent No. 1 submitted the Resolution Plan Order dated 12.09.2022, passed by the Adjudicating Authority, stands reaffirmed by this Appellate Tribunal in Merina Commotrade Pvt. Ltd. v. Anand Sonbhadra, Resolution Professional for Shubhkamna Buildtech Pvt. Ltd. Ors. [ 2024 (10) TMI 1466 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI ] and Shubhkamna City Welfare Association Anr. v. Shubhkamna Buildtech Pvt. Ltd. Through Resolution Professional Anr., [ 2024 (5) TMI 14 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI ]. In these judgments, this Appellate Tribunal had already upheld the commercial wisdom of the CoC, declining to interfere with the approved Resolution Plan. Conclusion - Since the Resolution Plan has already stand approved long time back in the year of 2022 which was further confirmed by this Appellate tribunal again in the year 2022, we do not fine any merit in the present appeal. Since the Resolution Plan already stand approved not only by the Adjudicating Authority but also confirmed by this Appellate Tribunal, the present appeal of the Appellants has become infructuous and therefore, stand rejected.

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• 2025 (4) TMI 456
  Time limitation for filing company petition - whether the company petition was filed by the Respondent No. 1 i.e., Rajasthan Financial Corporate before the Adjudicating Authority in time or was hit by limitation? - HELD THAT:- This Appellate Tribunal gave four specific opportunities to the Appellant to file the rejoinder affidavit, however, the Appellant did not file any rejoinder. On next occasion, the Appellant requested for an adjournment. Thus, despite of several opportunities, the Appellant did not give any contrary facts through his reply affidavit contesting submissions made by the Respondent No. 1 before us. Thus, the fact mentioned by the Respondent No. 1 regarding OTS letters and the issue of extension of limitation from time to time, taken into consideration, including last OTS dated 16.05.2017 extending limitation period upto 15.05.2020 and the Apex Court, suo moto order [ 2022 (1) TMI 385 - SC ORDER ] passed in Writ Petition (c) No. 03 of 2020 which extended limitation period from 15.03.2020 to 28.02.2022. The Respondent No. 1 filed the Company Petition on 12.08.2021 which was within limitation period available in the present case. Thus, Company Petition was covered under limitation period as discussed in preceding discussion. It is also noted that in catena of judgments including by the Hon ble Supreme Court of India, it has been held that limitation is a matter of both facts and law and it can be invoked at any stage by any of the party or any court even at an appeal stage. Reliance placed in Pathapati Subba Reddy v. LAO [ 2024 (5) TMI 1319 - SUPREME COURT ] where it was held that the Special Leave Petition challenging the High Court s refusal to condone a delay of 5659 days in filing an appeal against the dismissal of a land acquisition compensation reference, was dismissed - The present case of the Respondent No. 1 gets benefits from the above judgment. Conclusion - Thus, the Company Petition was filed by the Respondent No. 1 within limitation period before the Adjudicating Authority and was not hit by limitation as alleged by the Appellant. Since, this is the only issue involved in the present appeal, hence there are no merit in the appeal. Appeal dismissed.

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• 2025 (4) TMI 455
  Valid service of notice - Rejection of application u/s 95 filed by the State Bank of India - failure to satisfy the mandatory pre-requisite for issuing a legally valid demand notice under Rule 7(1) for filing such application - Whether the Demand Notice issued under Rule 7(1) of the 2019 Rules can be considered as Notice for invocation of guarantee for the purposes of filing Section 95 Application by a Creditor? HELD THAT:- The requirement of date, when the default occurred, itself contemplate the default by Guarantor, when Application is filed against Guarantor. Obviously, the default has to be of the Guarantor and mentioning of date when the default occurred, itself contemplate default on the part of Guarantor, i.e. invocation of guarantee as per Deed of Guarantee. Thus, non-mention of requirement of whether guarantee has been invoked and proof thereof, is inconsequential, since the date when default occurred is specifically asked for. This Tribunal in Archana Deepak Wani vs. Indian Bank [ 2023 (4) TMI 1081 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI ] has held that liability of the Guarantor must be determined strictly in terms of the Deed of Guarantee. Another judgment, which has been relied by learned Counsel for the Respondent is judgment of this Tribunal in Pooja Ramesh Singh vs. State Bank of India [ 2023 (5) TMI 17 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI ], where it was held that default in the guarantee arises only when after the guarantee has been invoked. Thus, default shall arise on the part of Guarantor only when Demand Notice is issued, as contemplated in the Deed of Guarantee. The submission of the Appellant that Notice under Rule 7 (1) issued in Form-B to the Guarantor, demanding repayment of the default amount, has to be treated as Notice for invoking guarantee, cannot be accepted. Default before issuance of Notice under Rule 7(1), must exist on the part of the Guarantor. Hence, the submission of the Appellant that Notice under Rule 7, sub-rule (1) is a Notice, invoking the guarantee, is rejected. Conclusion - The application under Section 95 is not maintainable due to the failure to invoke the guarantee as required by the contractual terms and the statutory framework. There is no error in the order of the Adjudicating Authority, rejecting Section 95 Application filed by the SBI. There is no merit in the Appeal. The Appeal is dismissed.

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• PMLA

• 2025 (4) TMI 454
  Money Laundering - seeking an extension of the interim Bail for a period of 60 days on the humanitarian grounds - HELD THAT:- In the prevailing circumstances and on humanitarian grounds coupled with the fact that the Petitioner would be required to carry out post-cremation rituals and to support his Mother emotionally and financially, the interim Bail granted to the Petitioner is hereby extended for a further period of 2 weeks from today, as it is stated that the interim Bail granted by this Court vide Order dated 28.03.2025 is set to expire today i.e. 08.04.2025, subject to the same conditions as imposed by this Court vide Order dated 28.03.2025. The interim Bail Application is disposed of.

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• 2025 (4) TMI 453
  Money Laundering - confirmation of provisional attachment order - siphoning off of huge amount from the bank by opening fake staff over draft account in Maliga on branch of ICBL - no predicate offence - property attached by the respondents were acquired before the commission of offence - proceeds of crime or not - Failure to pass confirmation order within a period of 180 days from the date of provisional attachment of the properties - Predicate offence was existing not only at the time of recording of the ECIR - HELD THAT:- The facts on record show that another FIR number 10/22 was registered on 29.06.2022 by the Bureau of Investigation Economic Offence, Guwahati for the offence under section 120 B, 420, 409, 468, 471 IPC against the accused Subhra Jyoti Bharali and other accused. It was towards the loan amounting to Rs. 3.69 crores from Industrial Cooperative Bank Limited in the name of 09 individuals. Even, if we ignore the second FIR, the facts on the record shows that at the time of the provisional attachment and recording of the ECIR, the FIR was for the predicate offence. The subsequent chargesheet for the offence undersection 120 B, 408, 409 IPC would not nullify the proceeding initiated at the time of existence of the predicate offence and otherwise the chargesheet is not taken to be the final word about the commission of offence, rather it is submitted before and the Trial Court alone is competent to consider it and take cognizance of the offence, as is made out which can be other than given in the charge sheet. The charge sheet is filed by the police and thereby it cannot be considered to the final word on commission of offence rather it remains in the hands of Special Court. The subsequent filing of the charge sheet would not nullify the provisional attachment order passed earlier so as the recording of the ECIR. It is more so when the investigation reveal a predicate offence and the offence under section 3 of the Act of 2002 by the appellants - The material on record even shows a prima facie case of offence under section 420 IPC. It is submitted that the property attached by the respondents were acquired before the commission of offence, thus could not have been taken to be the proceeds of crime - HELD THAT:- If the details of the property attached by the respondent is taken note of, properties were acquired subsequent to the commission of crime. Thus, it is not that the properties attached by the respondents were acquired by the appellant prior to the commission of crime rather the appellant had acquired the properties subsequent to period of crime. The period of crime is not to be taken from the date of registration of the FIR but it can be prior to the FIR. In this case, mis- appropriation of fund was much prior to the registration of the FIR. It is also that proceeds fall in the hand of the appellant would fall in the definition of proceeds of crime when the proceeds directly or indirectly acquired or derived out of criminal activity of a schedule offence is not available. The attachment of the property can be even for equivalent value and is permissible under the law. Failure to pass confirmation order within a period of 180 days from the date of provisional attachment of the properties - HELD THAT:- The provisional attachment order was issued on18.08.2022 while the confirmation order was passed by the Adjudicating Authority on 08.02.2023, i.e. within the period of 180 days. The fact however remain that while passing the order on 08.02.2023, a clerical/typographical error remain in the order and therefore a corrigendum was issued on 21.02.2023 which is taken to be an order beyond the period of 180 days. Section 68 of the Act of 2002 provides that no notice, summon, order, document or other proceeding made or issued shall be invalid or deemed to be invalid merely for the reason of any mistake, defect or omission in the notice, summon, order etc., if such summon/order etc. in substance and effect is in conformity with or according to intent and purpose of the Act. The Adjudicating Authority confirmed the provisional attachment order within a period of 180 days. However, reference of the properties given were different than the attached due to typographical and clerical error thus has been corrected by the corrigendum. Whenever a typographical or clerical error is corrected by way of corrigendum, it would relate back to the original order and would not be taken to be a substantive order. The nature of the order has not been changed, rather the details of the property was wrongly mentioned out of typographical error and has been described in the corrigendum. In fact, the Adjudicating Authority was not required to give description of the properties attached when provisional attachment order was sent for confirmation containing description of the properties. The Adjudicating Authority was required to consider rival submission, to confirm or to deny it. The description of the property was not required to be reiterated as it is given in provisional attachment order. Thus, description of the property is not in any manner to cure the defect of the nature which may change the substance of the order, thus in the factual background aforesaid, the corrigendum would relate back to the date of the main order. As per the Judgement in the case of Jubilant Organosys Limited Vs. Assistant Commissioner of Central Excise and Ors. [ 2011 (6) TMI 631 - KARNATAKA HIGH COURT ], the corrigendum be relate back to the date of the original order and having been passed within 180 days, thus we are unable to accept even the third issue raised by the appellant. Conclusion - i) The existence of a predicate offense at the time of the provisional attachment order suffices for PMLA proceedings. ii) The validity of the PMLA proceedings, the attachment of properties, affirmed. Appeal dismissed.

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• Service Tax

• 2025 (4) TMI 452
  Entitlement to specific deductions under Rule 2A of the Service Tax (Determination of Values) Rules, 2006 - applicability of Ext.P4 N/N. 30/2012 regarding the percentage of service tax payable - condonation of delay in filing the appeal against the assessment order - HELD THAT:- The specific contention raised by the petitioner is that the deduction available to the petitioner as per 2A (i) of the Rules, 2006 has not been extended to the petitioner. Though in the counter affidavit the stand of the department is that whatever abatement applicable to the services provided by the assessee has given due credit to as per the provisions of the Act and therefore, the contention of the petitioner is without any basis, the learned counsel for the petitioner pointed out that, even in Ext.R1(b) inspection report of CERA it is specifically found that the VCES request made by the petitioner was rejected on the ground of nonpayment of dues within the stipulated time and on the basis of the same it is contended that the stand in the counter affidavit that whatever benefits of abatement applicable to the service provided by the assessee as per the Act has been extended to the petitioner is without any basis. Yet another aspect to be noted is that the petitioner was detected with cancer and he was undergoing treatment and due to strong dosage and potency of the medicines taken for cancer and consequent dizziness he had a fall from the terrace of his residence which resulted in multiple fractures. The health issues of the petitioner was stated as reasons for the delay in filing the appeal. It is also to be noted that though a specific contention was taken by the petitioner that he is entitled for the benefit of Ext. P4 notification, no answer has been given in the counter affidavit filed by the respondents regarding the same. The matter requires reconsideration by the 1st respondent assessing authority. To facilitate reconsideration, Exts.P3 and P9 are set aside - Petition disposed off by way of remand.

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• 2025 (4) TMI 451
  Violation of the principles of natural justice - alleged failure to consider the petitioner s reply to the show cause notice - HELD THAT:- The impugned order as contained in Annexure P4 suffers from violation of Principles of Natural Justice. The reply submitted by the petitioner seems to have been forgotten and not taken note of and thereby obviously not considered by the competent authority while passing the impugned order as contained in Annexure P4 . The impugned order dated 18.07.2024 passed by the Joint Commissioner, CGST and Central Excise, Patna-I (Annexure P4) set aside on this ground alone and the matter remitted back to the competent authority who shall consider the reply submitted by the petitioner, give an opportunity of personal hearing and shall pass order afresh taking into account all the points which are open to the petitioner in accordance with law. Petition allowed by way of remand.

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• 2025 (4) TMI 450
  Calculation of service tax - inclusion of charges collected by the appellant, apart from the service charges for Custom House Agency Service, in the assessale value - pure agent services or not - Section 67 of the Finance Act, 1994, read with Rule 5(1) of the Service Tax Valuation Rules, 2006 - HELD THAT:- The issue is no more res-integra in view of the decision of the Honourable Supreme Court in the case of UOI v Intercontinental Consultants and Technocrats Pvt Ltd, [ 2018 (3) TMI 357 - SUPREME COURT] which has considered the issue of liability to pay service tax on reimbursable expenses received by the service provider in the course of rendering services for the client, apart from the consideration received for rendering the services on which the client has discharged the liability to pay service tax. The Honourable Supreme Court affirmed the decision of the Delhi High Court in Intercontinental Consultants Technocrats Pvt Ltd v UOI, [ 2012 (12) TMI 150 - DELHI HIGH COURT] , wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was stuck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections. Conclusion - The charges collected by the appellant, which are reimbursable expenses, should not be included in the taxable value for service tax purposes. Appeal allowed.

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• 2025 (4) TMI 449
  Liability to pay service tax on reimbursable expenses collected from clients through debit notes - Rule 5(1) of the Valuation Rules - HELD THAT:- The issue is no more res-integra in view of the decision of the Honourable Supreme Court in the case of UOI v Intercontinental Consultants and Technocrats Pvt Ltd, [ 2018 (3) TMI 357 - SUPREME COURT] which has considered the issue of liability to pay service tax on reimbursable expenses received by the service provider in the course of rendering services for the client, apart from the consideration received for rendering the services on which the client has discharged the liability to pay service tax. The Honourable Supreme Court affirmed the decision of the Delhi High Court in Intercontinental Consultants Technocrats Pvt Ltd v UOI, 2012 (12) TMI 150 - DELHI HIGH COURT] , wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was stuck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections. Conclusion - The appellant is not liable to pay service tax on the reimbursable expenses for the period in question, as the inclusion of such expenses is not supported by the statutory framework at the time. The impugned order in appeal upholding the demand confirmed by the adjudicating authority along with applicable interest and imposition of equivalent penalty cannot sustain - Appeal allowed.

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• 2025 (4) TMI 448
  Levy of service tax - Support Services of Business or Commerce - subvention amount received by the appellant - HELD THAT:- The present Statement of Demand has been issued premised on the allegations mentioned in the previous SCNs which stood adjudicated and the appeals preferred against the impugned Orders therein have been decided by this Tribunal in the appellant s favour in [ 2023 (2) TMI 830 - CESTAT CHENNAI] - Thus, the issue is no more res-integra and stands decided in the appellant s favour not only by virtue of the aforesaid decision in the appellant s own case but also the decisions relied upon by the appellant as aforementioned. Conclusion - BCCI and similar cricket associations are not commercial entities, and their activities do not constitute business or commerce for service tax purposes. Appeal allowed.

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• 2025 (4) TMI 447
  Calculation of service tax - inclusion of amount received by CSC Publications and Ramiah Publications, who are independent entities, for sale of course material kits supplied and payment for which was routed through the appellant, in the value of taxable services provided by the appellant - HELD THAT:- A similar issue had come up for consideration before the Hon ble High Court of Punjab Haryana in the matter of CCE, Chandigarh- I v. Pinnacle, [ 2014 (8) TMI 149 - PUNJAB AND HARYANA HIGH COURT] where it was held that the order of the Tribunal to exclude the cost of such material from the quantification of the service tax provided by the assessee have been rightly allowed. The study material supplied by the Bulls Eye is quantifiable separately. The condition in the circular relates to the services of reading material and text books provided by the assessee-institute and not books purchased from another supplier. Such goods can be quantified by the price paid. Therefore, the amount of such goods have been rightly excluded in terms of Notification No. 12/2003-S.T., dated 20-6-2003. The Honourable Supreme Court has in the case of UOI v Intercontinental Consultants and Technocrats Pvt Ltd, [ 2018 (3) TMI 357 - SUPREME COURT] , affirmed the decision of the Delhi High Court in [ 2012 (12) TMI 150 - DELHI HIGH COURT] wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was stuck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections. Thus, the very proposal in the SCN has been rendered meritless. Conclusion - The value of goods sold separately from services should not be included in the taxable value of services. The demand for service tax on the value of course materials is unsustainable and that the invocation of the extended period is unjustified - appeal allowed.

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• 2025 (4) TMI 446
  Liability of service tax - Intellectual Property Service prior to July 2012 - transfer of technical know-how to the appellant - extended period of limitation - HELD THAT:- In the instant case, it is an admitted fact that the technical know-how was transferred to the appellant in 2009, soon after the signing of agreements. It is also an admitted fact that the appellant shared a portion of the PGCIL business with GANZ ZTR in lieu of transfer of technical know-how. It is noted that no service tax was payable on technical know-how service under the category of intellectual property service prior to this date. IPR service was covered under section 66E (c) with effect from 1.7.2012, and the confirmation of demand on technical know-how service cannot be sustained prior to this date. It is further noted that transfer of technical know-how service cannot be treated as IPR as the same was not registered under any law in India. Accordingly, no service tax can be confirmed under this head. In the case of Chambal Fertilizers Chemicals Ltd. vs. Commissioner of Central Excise, Jaipur-I [ 2016 (8) TMI 150 - CESTAT NEW DELHI] this Tribunal has observed that It has been held that to be categorized for service tax purpose under IPR, such right should have been registered with trade mark/patent authority. In the present case, admittedly, there is no right recognized as IPR under any law for the time being in force in India. As such, there can be no provision of IPR service for tax liability on reverse charge basis. Conclusion - The appellant is not liable for service tax on the transfer of technical know-how prior to July 2012, as it do not qualify as an Intellectual Property Right under Indian law. The impugned order is not sustainable and the same is set aside. The appeal is, accordingly, allowed.

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• 2025 (4) TMI 445
  Levy of service tax - Supply of Tangible Goods service - lease of plant by the Appellant to its customer - transfer of the right to use goods or not - effective control of the plant is not transferred by the Appellant to the customer, given that the Appellant itself undertook the operation and maintenance of the plant - HELD THAT:- The terms of the lease agreement clearly state that the goods are to be delivered by the Appellant to its customer, and on a plain reading of the terms of the agreement, consensus-ad-idem as to the identity of the plant is apparent. It is further noted that clause 6 clearly states that the lessee has the right to use the plant during the lease period and clause 7 states that the plant is in physical possession and control of the lessee, thereby showing that the right of the customer to use the plant was at the exclusion of the Appellant. Further, the Appellant has undertaken not to transfer the plant to another party during the lease period in clause 12. Therefore, the terms of the lease agreement cumulatively satisfy the tests regarding transfer of right to use the goods as laid down by Hon ble Supreme Court in BSNL vs. Union of India [ 2006 (3) TMI 1 - SUPREME COURT] . On examination of the terms of the Agreement, we also find that the Operation and Maintenance agreement contains distinctive scope, rights and liabilities, and the rights and liabilities under the Lease Agreement remain separately and independently enforceable. The transfer of full possession and control of the plant to the customer vide the lease agreement is uninfluenced by the existence of the operation and maintenance agreement. Once the plant is in complete physical possession and control of the customer, the provision of operation and maintenance services by the Appellant would not alter the nature of the transaction to make it a supply of tangible goods service, and such transaction would remain to be a deemed sale . The demand of service tax of Rs.11,12,977/- along with interest could not have been raised by invoking of extended period of limitation. As the demands itself are being set aside, penalty under Section 78 is also liable to be set aside. Conclusion - The lease of the plant is a deemed sale and not a supply of tangible goods service, exempting it from Service Tax. The appeal filed by the Appellant is allowed on merits as well as on limitation.

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• 2025 (4) TMI 444
  Short payment of service tax - underreporting of value of taxable services in sales ledger compared to the amounts reflected in the 26AS statements - case of appellant is that whole demand is based on 26-AS statement (TDS statement) of their clients which is generated as per income tax provisions and cannot be taken as evidence in service tax law in his favour - HELD THAT:- The first adjudicating authority and the lower appellate authority Commissioner (Appeals) have erred in holding that the argument of the appellant is not acceptable that the 26-AS statement cannot be used for detection of any other tax. It was the duty of the department that after proper inquiry, it should have clearly narrated in the show cause notice that on which taxable service the service tax was not paid or short paid. It was not proper for the department to solely rely upon the 26AS statement of some of the clients of the appellant and raise demand of service tax solely on its basis. The department should have collected independent evidence and material to clearly show that the appellant failed to pay proper service tax but the department failed to collect independent evidence and reliable material for raising the demand of service tax on differential basis. The Commissioner (Appeals) had no idea whether the total service tax liability was discharged by the appellant or not. In these circumstances, it was not proper on the part of Commissioner (Appeals) to have concluded that the lower adjudicating authority has rightly confirmed the demand of service tax along with interest and rightly imposed penalties upon them. The order of the Commissioner (Appeals) is not sustainable and is liable to be set aside. Concluson - In the circumstances of the case it will be proper if the matter is remanded to the first Adjudicating Authority with the direction that it should inquire into the matter and scrutinize the documents pertaining to the services rendered and liability of Service Tax and should give a clear conclusion whether the total service tax liability was discharged by the appellant or not, independent of the 26-AS statement. Appeal allowed by way of remand.

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• 2025 (4) TMI 443
  Levy of service tax - security agency services - it is submiited by appellant that the services rendered by them in course of their regular duties to public sector undertakings and there was no commercial activity - HELD THAT:- This issue is no longer res integra being decided by the Tribunal in the cases of Commandant Home Guard Training Centre vs. CGST, Udaipur 2021 (7) TMI 195 - CESTAT NEW DELHI] and Deputy Commissioner of Police, Jodhpur vs. CCE ST, Jaipur [ 2016 (12) TMI 289 - CESTAT NEW DELHI] , wherein the Tribunal has decided the issue in favour of the appellants holding that the police department which is an agency of state government, cannot be considered to be a person engaged in the business of providing security services; consequently, the activity undertaken by the police is not covered by the definition of security agency under Section 65(94) of the Finance Act, 1994; it is also found that in terms of CBEC Circular on the subject, the fees collected by the police department is in the nature of fee fixed for the statutory function which has been deposited into the government treasury; in the light of CBEC Circular also, there can be no levy of service tax on such activities. Conclusion - The police departments, as state agencies, are not engaged in the business of providing security services and thus do not fall under the definition of security agency per Section 65(94) of the Finance Act, 1994. The impugned order cannot be sustained. The appeal is, accordingly, allowed.

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• Central Excise

• 2025 (4) TMI 442
  CENVAT Credit - Service Tax paid on health/medical insurance of employees, their dependents, retired employees, CISF security - credit taken on the basis of documents which are not proper - Group medical/health insurance policy taken for employees - Security services provided by CISF - extended period of limitation - penalty. Eligibility to avail CENVAT credit on health/medical insurance service which were utilized by the appellants during the course of manufacture of petroleum products in their petroleum refinery at Mahul, Mumbai - input services or not - HELD THAT:- There is no dispute that the appellants are eligible to avail CENVAT credit. It can be seen from the factual matrix of the case that the said services were utilized by the appellants during the course of manufacture of petroleum products as the employees and CISF security personnel are essentially required in their manufacturing operations. On careful reading of the definition of input service under Rule 2 (l) of CCR, 2004, it is found that it provides for three categories of services, out of which the first category viz., (i) means part of the definition, generally cover services which are used directly or indirectly, in or in relation to manufacture of final goods or for providing of output services; the second category viz., (ii) inclusion part of the definition, specifically state certain services used in relation to various activities, which is used in relation to the manufacture of final products or provision of output services, both of which are covered under the scope of input services . Further, the third category, viz., (iii) exclusion part of the definition provided under Clauses (A), (B), (BA) and (C), specifically provide for certain services or portion of such services, which are not included in the above definition of input service . However, there are certain exceptions to this exclusion which are also given in the form of except for provision of certain services , except when used by certain category of persons , when such services are not primarily used for specified use etc. Therefore, in order to come to the conclusion that a particular service is covered as input service , either it could be covered under category (i) or (ii) of the definition of input service as explained above, and such input service should not fall under the exclusion clauses mentioned in the third category (iii) above. Group medical/health insurance policy taken for employees - HELD THAT:- The appellants are mandatorily required to take medical/health insurance for their employees in compliance with the above statutory requirement. However, for those employees who are not covered by the ESI scheme, general medical/health insurance has been taken by the appellants. The insurance coverage under sample copies of the insurance policy produced by the appellants dated 01.04.2011 01.04.2012 given by the insurer M/s New India Assurance Company Limited perused, wherein it is seen that the insured is the appellants company M/s Hindustan Petroleum Company Limited itself. Therefore, it is evident that the beneficiary of such services is the appellants and not the individual employees. Therefore, the embargo put on the input services used primarily for personal use or consumption of any employee for exclusion from the scope of coverage of input service under Clause (C) of Rule 2(l) of CCR of 2004, does not apply to the present case. The dispute in respect of availment of Cenvat credit on medical insurance service is no more open to debate, as in a number of cases the Tribunal has held the same as admissible - relaince can be placed in M/S. HONDA MOTORCYCLE SCOOTER INDIA PVT. LTD. VERSUS CCE, DELHI-III [ 2016 (8) TMI 308 - CESTAT CHANDIGARH] . Security services provided by CISF - HELD THAT:- The CISF has been tasked with providing security to all petroleum oil refineries, recognizing their strategic importance and the need for robust security measures including fire safety, counter terrorist attack etc., As such security services have become mandatory, the health/medical insurance incurred in connection with such security staff shall also be considered as integral part of the security services which are essential input service required to be used in manufacture of petroleum products. Further, security services have also been specifically provided in the inclusive part of the definition of input service under Rule 2(l) ibid. Therefore, Service Tax paid on medical/health insurance services for CISF Security are eligible to be availed of as CENVAT credit. The Service Tax paid on medical/health insurance services for an amount of Rs.2,04,63,415/- are eligible for availing CENVAT credit as per statutory provisions. Therefore, to this extent the impugned order is not legally sustainable. Penalty - HELD THAT:- In view of the specific findings given by the learned Commissioner in the impugned order that the disputed amount in respect of ineligible CENVAT credit with respect to health/medical insurance claim of dependant family members of employees having been paid and appropriated, it is not found that there exists any ground for imposition of penalty on the appellants and for levy of any interest on the above disputed amount, which have been confirmed as part of the adjudged demands in the impugned order. Invocation of extended period of limitation - HELD THAT:- The Hon ble Supreme Court in the case of Bharat Petroleum Corporation Limited Vs. Commissioner of Central Excise, Nashik Commissionerate [ 2025 (1) TMI 989 - SUPREME COURT] have held that extended period is not invokable in the case, where the document/details alleged to have been suppressed were known to the department. Conclusion - i) CENVAT credit on health/medical insurance services for employees and CISF security personnel is admissible, as these services are necessary for statutory compliance and integral to manufacturing operations. ii) The documentation used by the appellants for claiming CENVAT credit is valid, and the provisional nature of some documents do not affect their admissibility. iii) The penalty imposed for alleged irregular availment of CENVAT credit is unwarranted, given the voluntary reversal of credit by the appellants. iv) The invocation of the extended period for demand is unjustified, as the department was previously aware of the relevant facts. Appeal disposed off.

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• 2025 (4) TMI 441
  Clandestine removal of finished goods without payment of central excise duty and without issue of valid invoices - shortage of the finished goods and raw material found during the course of physical verification - reliability of statements without following the procedure contemplated in section 9D of the Central Excise Act relating to relevancy of statements under certain circumstances Whether such statements could have been considered as relevant and relied upon without following the procedure contemplated in section 9D of the Central Excise Act relating to relevancy of statements under certain circumstances? - HELD THAT:- In Additional Director General (Adjudication) vs. Its My Name Pvt. Ltd. [ 2020 (6) TMI 72 - DELHI HIGH COURT ], the Delhi High Court examined the provisions of sections 108 and 138B of the Customs Act. The department placed reliance upon the statements recorded under section 108 of the Customs Act. The Delhi High Court held that the procedure contemplated under section 138B(1)(b) has to be followed before the statements recorded under section 108 of the Customs Act can be considered as relevant. In Drolia Electrosteel [ 2023 (11) TMI 10 - CESTAT NEW DELHI ], a Division Bench of the Tribunal examined the provisions of section 9D of the Central Excise Act and after placing reliance upon the decision of the Punjab and Haryana High Court in Jindal Drugs [ 2016 (6) TMI 956 - PUNJAB HARYANA HIGH COURT ], observed that if the mandatory provisions of section 9D(1)(b) of the Central Excise Act are not followed, the statements cannot be used as evidence in proceedings under Central Excise Act. Thus, both section 9D(1)(b) of the Central Excise Act and section 138B(1)(b) of the Customs Act contemplate that when the provisions of clause (a) of these two sections are not applicable, then the statements made under section 14 of the Central Excise Act or under section 108 of the Customs Act during the course of an inquiry under the Acts shall be relevant for the purpose of proving the truth of the facts contained in them only when such persons are examined as witnesses before the adjudicating authority and the adjudicating authority forms an opinion that the statements should be admitted in evidence. It is thereafter that an opportunity has to be provided for cross-examination of such persons - The provisions of section 9D of the Central Excise Act and section 138B(1)(b) of the Customs Act have been held to be mandatory and failure to comply with the procedure would mean that no reliance can be placed on the statements recorded either under section 14D of the Central Excise Act or under section 108 of the Customs Act. The Courts have also explained the rationale behind the precautions contained in the two sections. It has been observed that the statements recorded during inquiry/investigation by officers has every chance of being recorded under coercion or compulsion and it is in order to neutralize this possibility that statements of the witnesses have to be recorded before the adjudicating authority, after which such statements can be admitted in evidence. The confirmation of demand of central excise duty to the extent of Rs. 3,04,24,623/- is based on the statements of persons who were not examined by the department before the adjudicating authority. This examination was absolutely necessary in terms of the provisions of section 9D of the Central Excise Act. In the absence of examination of such persons before the adjudicating authority and in the absence of admission of such statements in evidence, such statements would not be relevant. For the reasons stated above, the said demand would have to be set aside. Demand based on loose papers recovered from the factory premises of the appellant - HELD THAT:- In the present case, the alleged authors of the loose papers were not examined. The demand of Rs. 1,76,650/- based on loose papers recovered from the factory premises of the appellant, therefore, cannot be sustained and deserves to be set aside. Demand based solely on shortage of stock - absence of corroborative evidence - HELD THAT:- Reference can be made to the judgment of the Punjab and Haryana High Court in Anand Founders Engineers [ 2015 (11) TMI 1166 - PUNJAB HARYANA HIGH COURT ] where it was held that Further, it was held by the Tribunal that mere shortages detected at the time of visit of the officers cannot ipso facto lead to the allegations and findings of clandestine removal. What also needs to be noticed is that an inference regarding clandestine removal can be drawn only after detailed investigation and consideration of relevant incriminating material which could be based on the stock of raw material, finished product, use of consumption of electricity, employment of labour and many other relevant materials as has been noticed by the Chhattisgarh High Court in Hi Tech Abrasives [ 2018 (11) TMI 1514 - CHHATTISGARH HIGH COURT ]. The impugned order dated 09.06.2020 passed by the Principal Commissioner in so far is it confirms the demand with interest and penalty cannot be sustained and would have to be set aside. Conclusion - i) The confirmation of demand of central excise duty to the extent of Rs. 3,04,24,623/- is based on the statements of persons who were not examined by the department before the adjudicating authority. This examination was absolutely necessary in terms of the provisions of section 9D of the Central Excise Act. In the absence of examination of such persons before the adjudicating authority and in the absence of admission of such statements in evidence, such statements would not be relevant. ii) The demand of Rs. 1,76,650/- based on loose papers recovered from the factory premises of the appellant, cannot be sustained and deserves to be set aside, as alleged authors of loose papers were not examined. iii) Mere shortages detected at the time of visit of the officers cannot ipso facto lead to the allegations and findings of clandestine removal. iv) Demand with interest and penalty set aside. Appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (4) TMI 440
  Imposition of Tax above 26% as contemplated under Section 3-A(1)(c) of U.P. Trade Tax Act - HELD THAT:- The liability to tax under the U.P. Trade Tax Act, as then was for the respective financial years arose from Section 3 of the Act. The rate of tax were prescribed under Section 3-A and for the revisionist, the tax prescribed was pegged at a rate not exceeding 26%. That apart from the tax as could be levied and collected, the State Government in its legislative wisdom prescribed for levy of additional tax on certain dealers, however, the limit for levy and collection of the additional tax was pegged at not exceeding 25% on the tax paid. The said two taxes prescribed under the Act are separate and distinct. The vires of Section 3-E is not under challenge and thus, the issue is to be decided only on the basis of the statutory prescriptions as existed at the time of passing of the assessment order. Merely because in the subsequent year, the State Government in its legislative wisdom had decided to omit the provisions of Section 3-E, the same itself cannot be a binding factor to form a view that the State Government even for the relevant years (relevant for the present cases) could not impose the different taxes, which in the present case are trade tax as well as additional tax. The reliance placed upon the judgment in the case of Pappu Sweets and Biscuits [ 1998 (10) TMI 452 - SUPREME COURT] would have no applicability to the facts of the present case as on a plain reading of Sections 3, 3-A and 3-E are separate and distinct - Thus finding that the tax and the additional tax are two separate taxes which are leviable by virtue of the statutory enactments, the contention of the revisionist cannot be accepted. The revisions are dismissed.

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• 2025 (4) TMI 439
  Nature of transaction - sale or not - transfer of telecommunication equipment by the appellant-company to M/s Spice Communications Pvt. Ltd. on a trial basis for 24 months - HELD THAT:- The requirement as per Article 2 is that the trial period is for 24 months and Spice Com may decide to purchase each of the respective equipments by accepting each such equipments, failing which Spice Com shall return each of such Equipments on as is where is basis at the end of the respective trial period of 24 months from the date of each supply - Further Article 8 specifically states that the Spice Mobile shall despatch the equipments within 15 days after receipt of security deposit from Spice Com as specified in Article 6.1 (Payment for Equipment Price) of the agreement. A perusal of the agreement between the appellant-Company and Spice Communications Pvt. Ltd. shows that the goods were transferred/supplied on trial use basis for a period of 24 months. It is specifically mentioned in the agreement that if the Spice Communications does not decide to purchase each of the respective equipments by accepting each, it shall return each of such equipment. Further, if the Spice Communications Pvt. Ltd. does not intend to purchase the equipments at the end of 2 year trial period, it shall return each of such equipment. Undisputedly, in the present case, the goods are not returned till date. In the present case, the goods were supplied by the appellant-company to Spice Communications Pvt. Ltd. on trial basis for a period of 24 months with an option to decide to purchase the goods (equipments) at the end of two years trial period - Further that the Spicecom shall return each of such Equipments on as is where is basis at the end of the respective trial period of 24 months from the date of each supply. Since the admitted fact of the appellant-company is that the equipments are not returned till today, therefore, as per agreement between the appellant-company and M/s Spice Communications Pvt. Ltd, after 24 months from the date of agreement, till date, the equipments were consumed by M/s Spice Communications Pvt. Ltd. and never returned, which as per agreement would amount to sale. Conclusion - bare perusal of the agreement as well as definition of sale shows that since the delivery of goods in the present case is on trial basis and deferred payment as per Article 6 (Terms of Payment), therefore, the learned Tribunal has rightly held that delivery of the goods by the Appellant-Company to M/s Spice Communications Pvt. Ltd. constitute a sale. Appeal dismissed.

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• 2025 (4) TMI 438
  Interest on delayed refund - relevant date for calculation of interest - Section 55 of JVAT Act - HELD THAT:- During pendency of the instant application, the respondents refunded the principal amount of tax on 29.03.2024. However, it is observed that the Counter Affidavit is silent on the aspect of statutory interest that the Petitioner is entitled to receive under Section 55 of the JVAT Act. Further, the mandate of Section 55 of JVAT Act is that Refund Application ought to be decided within 90 days of the date of its filing. Further there is no mention in the Counter Affidavit as to why this delay in processing the Refund Application of the Petitioner is being caused. Further, non-allocation of funds cannot be a reason to delay the legitimate refund of the Petitioner, otherwise the very mandate of Section 55 of the JVAT Act will be rendered otiose. At this stage it is also necessary to indicate that the Petitioner has categorically stated in Paras 17, 21, 43 and 44 of the Writ Petition that the excess demand notice dated 31.08.2020, was received by the Petitioner only on 15.12.2022 and therefore, interest ought to be paid from the date of issuance of excess demand notice itself since the Petitioner was unable to file its Refund Application in absence of the excess demand notice. No reply, whatsoever, has been given by the Respondents to such averments made in the Writ Petition and no proof of service of the Demand Notice has been brought on record by the Respondents and thus the statements made in these paragraphs under reference are deemed to have been admitted by the Respondents. The Respondents are liable to pay interest to the Petitioner, from the expiry of 90 days from the date of submission of the Refund Application pursuant to receiving of the Demand Notice as claimed by the petitioner on 15.12.2022 and also interest from the date of issuance of Demand Notice dated 31.08.2020 since the Petitioner was unable to file its Refund Application in absence of the excess demand notice till the payment of the principal amount during pendency of this application Conclusion - The petitioner is entitled for 6% Simple Interest on the total amount of refund from 31.08.2020 i.e. the date of issuance of Demand Notice as stated hereinabove till the principal amount has been paid, after reducing the period which the petitioner took in filing the Refund application after receiving the same from the Respondents on 15.12.2022. Accordingly, it is directed that the respondents shall pay the interest after calculating the same as indicated. Application allowed.

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• 2025 (4) TMI 437
  Seeking permission for withdrawal of petiiton - Entitlement of interest on a delayed tax refund from September 2017 - relevant date for calculation of interest - HELD THAT:- The documents which have been handed over are taken on record. It is noted that the Petitioner has not placed any correspondence on record from 2017 to 2023 as well. In view of the Explanation to Section 42 (1), since the mistake in the bank details would be attributable to the dealer, in the opinion of the Court, the Petitioner would not be entitled to any further interest. Therefore, the order dated 5th July, 2023 does not warrant any interference. At this stage, ld. Counsel for the Petitioner submits that he wishes to withdraw the present petition. The petition is dismissed as withdrawn.

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• 2025 (4) TMI 436
  Levy of penalty u/s 10 (A) of the CST Act, 1956 - purchase of goods from outside the state by issuing C declaration forms, though the said items were not included in the CST registration certificate - HELD THAT:- On perusal of the impugned order, it is clear that the petitioner filed Nil returns from April 2007 to February 2008, i.e., till the cancellation of registration. However, the petitioner made purchases of a Hydraulic Excavator on 28.06.2007 and 31.08.2007, indicating that the machinery was not used for the specified purposes. Thereby the case of the petitioner falls under Section 10 (d) of the Act, inasmuch as the machinery was used for purposes not specified under clause (b), clause (c), or clause (d) of sub-section (3) or sub-section (6) of Section 8 of the Act. In the present case, it is clear that the petitioner used the goods for a purpose not specified in CST registration certificate. Therefore, the case on hand falls under Section 10 (d) of the Act, inasmuch as the goods were not utilized for the specified purpose incorporated in the registration certificate. Furthermore, the case relied on by the petitioner COMMISSIONER OF SALES TAX, UP. VERSUS SANJIV FABRICS AND HARI OIL GENERAL MILLS [ 2010 (9) TMI 461 - SUPREME COURT] , falls under Section 10 (b) of the Act, whereas the present case falls under Section 10 (d) of the Act. Therefore, the judgment relied on by the petitioner is not applicable to the facts of the case. Conclusion - The petitioner is not entitled to use C forms for purchasing goods not specified in the CST registration certificate. There are no merits in the writ petition, accordingly the same is dismissed.

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• 2025 (4) TMI 435
  Applicable rate of tax - inter-State sale of paints - to be taxable @ 10% or @ 15%? - Section 8 of the Central Sales Tax Act - HELD THAT:- Section 5 of the APGST Act deals with levy of tax on sales or purchase of the goods and Section 5A of the APGST Act deals with levy of tax on turnover. Serial No.8 of Sixth Schedule of the APGST Act deals with paints and other goods and the rate of tax in respect of the sales of the said goods is 15 paise in the Rupee i.e., 15%. So far as the said rate of tax is concerned, admittedly, the Government issued G.O. Ms. No. 252 dated 19.05.1995, directing the tax leviable under the Sixth Schedule, more particularly, in respect of sales of paints manufactured by cottage and small scale industries, @ 7 paise in the Rupee with effect from 01.04.1995. The assessment is in respect of the turnovers for the year 1997 and 1998, i.e., after issuance of the said G.O. Ms. No. 252 dated 19.05.1995. Further, nothing is placed on record in the case on hand by the Department that the Assessee is not a Small Scale Industry unit. In such an event, the contention raised on behalf of the State that the said G.O. has no application to the Assessee merits no acceptance. In the present case, by virtue of G.O. Ms. No. 252 dated 19.05.1995, the disputed rate of tax on turnover insofar as the State is concerned, is 7%. In the light of Section 8 (2) (b), which provides for higher rate of tax than the rate applicable in terms of the rate of tax under Sixth Schedule, the tax @ 10% on the turnover on paints is liable to be paid. The learned Appellate Tribunal, after considering these aspects in the proper perspective, in the considered opinion of this Court, has rightly allowed the appeal by fixing the tax leviable on the disputed turnover @ 10%. In such view of the matter, the question of law is answered in favour of the Assessee and against the State. Conclusion - The applicable tax rate for the Assessee s inter-State sales is 10%, consistent with the CST Act. The Tax Revision Case is dismissed.

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• Indian Laws

• 2025 (4) TMI 434
  Validity, interpretation and materiality of insurance contract - special condition in the insurance contract, stipulating that the voyage should commence and complete before the monsoon sets in - dismissal of consumer complaint on the ground that doctrine of Uberrima Fidei being compromised - HELD THAT:- There is no doubt that the policy was taken for a period of one month (16.05.2013 to 15.06.2013) to cover the voyage from Mumbai to Kolkata. Further, as per the DGS Circular, foul weather commences on 1st May itself on the East Coast. The Respondent s contention that they had no knowledge of the voyage and that they believed that the Vessel would be laid up at the Kolkata harbour during the foul season is unacceptable and is to be rejected. The Appellant had mentioned in the form that the purpose of insurance is to undertake the voyage from Ghodbunder Jetty in Mumbai to Kolkata harbour. The only logical conclusion of the information provided is that the insurance was availed to cover the foul weather period along the west and east coast. Even if the voyage was undertaken immediately, i.e. on 16.05.2013, the Vessel would have arrived at the Kolkata harbour in the first week of June 2013, i.e. after the commencement of foul weather season on the east coast. There is absolutely no permutation and combination in which the Appellant could have fulfilled this condition under the policy, given its voyage from Mumbai (west coast) to Kolkata (east coast) via several coastal States. Further, the special condition necessitates that the voyage commences and is completed before monsoon sets in. If the condition is to be interpreted strictly, then the assured would be unable to make a claim in case of a marine accident where the vessel is unable to complete its voyage due to a peril, rendering the special condition impossible to comply with. Ultimately, the assured would be without any remedy under the insurance. This amounts to an absurdity, vitiating the very purpose behind an insurance contract. As a result, we hold that the special condition cannot be treated as a condition precedent to waive any liability under the policy. It has been impliedly waived by the parties due to its non-material nature. It is probably a term used in all contracts by the Respondent as a part of its standard form, and it failed to exclude the same from the policy availed of by the Appellant. Conclusion - The Respondent is not entitled to repudiate the claim of the Appellant on the ground of breach of the special condition. The Respondent has raised several other objections, including allegations of forgery and breach of other conditions, which may affect the sum awarded. However, the same would have to be looked into on its own merits and proved before the NCDRC. The impugned order dated 13.04.2021 passed by the NCDRC is set aside. The matter is remanded to the NCDRC with a direction to determine the extent of the insured sum liable to be paid by the Respondent to the Appellant - Appeal allowed by way of remand.

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• 2025 (4) TMI 433
  Seeking quashing of FIR - refusal to quash the proceeding inter alia holding the allegations prima facie divulging ingredients of offence under Section 415 IPC - criminal offence or commercial dispute - HELD THAT:- Materials collected during investigation do not show the present case falls in the category of commercial disputes which would attract penal consequences. Investigating officer had recorded statements of two bankers and a builder. The bankers disclosed the appellant and his relations had substantial landed properties which had been mortgaged to them in 2014. The appellant had repaid the loan regularly till 2016 thereafter defaulted. Notwithstanding default, in 2018 an additional loan was also sanctioned to him. These materials support the appellant s representation that he was a businessman of substance and as late as on 2018, his bankers reposed confidence in his financial liquidity to extend additional loans. Nothing is placed on record to disclose utter insolvency or bankruptcy of the appellant, which he had knowingly suppressed and persuaded the 2nd non-applicant to enter into the commercial arrangement. The High Court erred in not taking into consideration these relevant aspects, which shows the representation of the appellant that he was a creditworthy businessman cannot be labelled as deception merely on the ground that the appellant had failed to honour the terms of the subsequent agreement. The High Court came to the conclusion that the appellant had intention to deceive from the inception of the transaction. This reasoning is wholly fallacious. Mere breach of promise to repay per se does not infer dishonest intention. The proposition of law declared in Mohsinbhai Fateali vs Emperor [ 1931 (11) TMI 7 - BOMBAY HIGH COURT ] does not help the 2nd non applicant. In the said case, the Bench held merely because the accused had subsequently filed for insolvency, it cannot be held that he had no reasonable expectation to pay for the goods on the date of contract. In Khoda Bakhsh vs Bakeya Mundari [ 1905 (6) TMI 1 - CALCUTTA HIGH COURT ], the accused had deceived the complainant to part with money on the assurance to liquidate a mortgage debt and utilized the money to repay another debt which he had suppressed. No such divergence of funds/ goods is made out in the factual matrix to show deception by the appellant. Conclusion - A commercial dispute does not automatically translate into a criminal offense unless there is clear evidence of fraudulent intent at the inception of the transaction. The impugned order is set aside and the proceeding arising out of FIR is quashed - appeal allowed.

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• 2025 (4) TMI 432
  Rights of driver holding an LMV license - driver holding an LMV license (for vehicles with a gross vehicle weight of less than 7,500 kgs) as per Section 10(2)(d), which specifies Light Motor Vehicle , can operate a Transport Vehicle without obtaining specific authorization under Section 10(2)(e) of the MV Act, specifically for the Transport Vehicle class or not - second part of Section 3(1) which emphasizes the necessity of a driving license for a Transport Vehicle overrides the definition of LMV in Section 2(21) of MV Act or not - additional eligibility criteria prescribed in the MV Act and MV Rules for transport vehicles would apply to those who are desirous of driving vehicles weighing below 7,500 kgs and have obtained a license for LMV class under Section 10(2)(d) of the MV Act - effect of the amendment made by virtue of Act 54 of 1994 w.e.f. 14.11.1994 which substituted four classes under clauses (e) to (h) in Section 10 with a single class of Transport Vehicle in Section 10(2)(e) - decision in Mukund Dewangan(2017) is per incuriam for not noticing certain provisions of the MV Act and MV Rules or not? The Purpose of the MV Act, 1988 - HELD THAT:- The MV Act, 1988 is fundamentally a social welfare legislation enacted with the objective of providing a mechanism for victims and their families to seek compensation for loss or injury resulting from road accidents. Additionally, its provisions regarding licensing and penalties for traffic violations serve the broader purpose of promoting road safety. Being a welfare legislation, it must be interpreted in a manner so as not to deprive the claimants of the benefit of the legislation. Any interpretation of its provisions must reflect the dual purpose, of not only as a mechanism for ensuring timely compensation and relief for victims of road accidents but also in promoting overall road safety. The issue in this reference is whether an individual holding an LMV license can legally drive a transport vehicle if it falls within the stipulated weight limit of 7,500 kgs. The genesis of the issue stems from disputes regarding the payment of claims by insurance companies for accidents involving transport vehicles operated by individuals holding licenses to drive light motor vehicles . The question before this Court is not one of statutory interpretation but also involves concerns of road safety and public welfare. In interpreting any statute, it is always prudent to keep an eye on the object and purpose of the statute, as well as the underlying reason and the spirit behind it. However, we are conscious of not overstepping into the policy domain which is essentially the prerogative of the legislature. The legislature is uniquely positioned to examine the broader social, economic and safety considerations that underlie transportation policy and any changes to the law must be rooted in comprehensive public discourse and analysis. Having noted the broader objective of the MV Act, let us now discuss the statutory scheme. Brief Overview of the MV Act and MV Rules - HELD THAT:- The MV Rules contain the procedure concerning driving licenses in Chapter II. It covers, inter alia, general provisions, evidence as to the correctness of address and age, medical certificate, educational qualifications, preliminary test, application for a driving license, driving test, form of driving license, renewal, driving schools and establishments, duration of license, duplicate license as well as the training syllabus - The MV Act and MV Rules work in tandem, like two wheels in the same axle, to form a comprehensive legal framework governing motor vehicles in India. While the Act provides the backbone, the Rules provide specific provisions for implementation. Construing Section 2(21), Section 3 and Section 10 - HELD THAT:- A person holding a LMV license is equally competent to drive a Transport Vehicle, provided of course the vehicle s gross weight does not exceed 7,500 kgs. The reference to transport vehicle in Section 3(1) and other sections of the Act and Rules should therefore be understood as applying to only those vehicles which fall beyond the scope of the sensu stricto definition, under Section 2(21). This interpretation would ensure that no provision or word is rendered otiose and the licensing regime remains coherent with the legislative intent. Discussion on the 8 Conflicting decisions - HELD THAT:- The judgments where the Court has held that a separate endorsement for a transport vehicle may not be necessary i.e. in Ashok Gangadhar Maratha [ 1999 (9) TMI 974 - SUPREME COURT] , Nagashetty [ 2001 (8) TMI 1463 - SUPREME COURT] , S. Iyyapan [ 2013 (7) TMI 1249 - SUPREME COURT] and Kulwant Singh 2014 (10) TMI 1086 - SUPREME COURT] are found to align with our reasoning and interpretation and they are therefore upheld. In consequence, the three judgments which concluded otherwise i.e. Prabhu Lal [ 2007 (11) TMI 715 - SUPREME COURT] , Roshanben Rahemansha Fakir [ 2008 (5) TMI 764 - SUPREME COURT] and Angad Kol [ 2009 (2) TMI 935 - SUPREME COURT] are overruled based on the reasoning provided in this judgment. The decision in Annappa Irappa Nesaria [ 2008 (1) TMI 983 - SUPREME COURT] is partially overruled to the extent that the position even post-amendment would remain the same. Is Mukund Dewangan(2017) per incuriam? - HELD THAT:- The decision in Mukund Dewangan (2017) was doubted for not noticing certain provisions of the MV Act and MV Rules. These include, inter alia, Section 4(1), 7, 14, the second proviso to Section 15 and Section 180 and 181 of the MV Act. It was therefore argued before this Court that the said decision is per incuriam. To begin with, it is useful to refer to some decisions that have expounded on the principle of per incuriam. The judgment in Mukund Dewangan (2017), shows that the 3 Judge Bench considered Section 2(21), 2(47) read with Section 10 of MV Act. The Court also examined the legislative intent behind the 1994 amendment to Section 10, noting that while the amendment introduced the term transport vehicle under Section 10(2)(e), it did not amend the definition of LMVs under Section 2(21). It was further observed that the newly inserted provision of Section 10(2)(e) would only subsume those classes of vehicles that were contained in Sections 10(2)(e) to 10(2)(h) of the un-amended Act i.e. medium goods vehicle, medium passenger vehicle, heavy goods vehicle and heavy passenger vehicle, and which now stand deleted by virtue of the amendment of 1994. Since no amendment was carried out in Section 10(2)(d) of the Act which contains the class for Light Motor Vehicles , the scope of Section10(2)(d) would remain intact as is contained in Section 2(21) of the Act, which is to say that LMV would include Transport Vehicles in cases where the gross weight of such vehicle is less than 7500 Kgs. It further noted that the syllabus does not provide separate training for transport vehicles but includes them under the relevant vehicle class based on the vehicle s weight. It considered Rule 75 which deals with State Register of motor vehicles as provided in Form 41. Form 41 categorizes vehicles on the basis of, inter alia, gross vehicle weight, unladen weight etc. Likewise, the Court observed that Section 41, pertaining to registration, mandates the inclusion of relevant information as specified in Form 20, which outlines details such as the class of vehicle, gross vehicle weight, and unladen weight, among other factors. It is true that Mukund Dewangan (2017) did not analyse the provisions that distinguish transport and non-transport vehicles, as noted in the reference orders. The statutory scheme of MV is more nuanced than the simple weight-based distinction made in the said judgment. Moreover, the Court failed to notice Section 31(2) and 31(3) which specify Transport and Non-Transport vehicles. However, the judgment gave due consideration to the important statutory provisions - A harmonious interpretation, would lead to the same conclusion but fortified with some additional reasoning based on the consideration of all the relevant provisions. The overlooked provisions would not, alter the eventual pronouncement. Importantly, there are no glaring error or omission that would alter the outcome of the case. Therefore, the ratio in Mukund Dewangan (2017) should not be disturbed by applying the principles of per incuriam. Impact on road safety - HELD THAT:- Road safety is a serious public health issue globally. It is crucial to mention that in India, over 1.7 lakh persons were killed in road accidents in 2023. The causes of such accidents are diverse, and assumptions that they stem from drivers operating light transport vehicles with an LMV license are unsubstantiated. Factors contributing to road accidents include careless driving, speeding, poor road design, and failure to adhere to traffic laws. Other significant contributors are mobile phone usage, fatigue, and non-compliance with seat belt or helmet regulations. Driving a motor vehicle is a complex task requiring both practical skills and theoretical knowledge. Safe driving involves not only technical vehicle control but also proficiency in various road conditions, including managing speed, turns, and spatial awareness relative to other vehicles. Additionally, handling road gradients demands skill, particularly with brakes and maneuvering. Effective driving requires awareness of road signs, adherence to traffic rules, and a focus on the road free from distractions. The core skills expected of all drivers apply universally, regardless of whether the vehicle falls into transport or non-transport categories. At this juncture, it is also essential to note the scheme devised in accordance with Section 75 of MV Act whereby the pre- requisites in the form of General Conditions to be maintained by the holder of license ensure safety and compliance. Certain guidelines have also been enacted in so far as aggregators are concerned whereby chapters outlining Conditions for grant of licence for Aggregator , Compliance with regard to Drivers , Compliance with regard to Vehicles as also Compliances to ensure safety further address the speculative concerns raised on behalf of the counsel for insurance companies. Conclusion - i) A driver holding a license for Light Motor Vehicle (LMV) class, under Section 10(2)(d) for vehicles with a gross vehicle weight under 7,500 kg, is permitted to operate a Transport Vehicle without needing additional authorization under Section 10(2)(e) of the MV Act specifically for the Transport Vehicle class. For licensing purposes, LMVs and Transport Vehicles are not entirely separate classes. An overlap exists between the two. The special eligibility requirements will however continue to apply for, inter alia, e-carts, e- rickshaws, and vehicles carrying hazardous goods. ii) The second part of Section 3(1), which emphasizes the necessity of a specific requirement to drive a Transport Vehicle, does not supersede the definition of LMV provided in Section 2(21) of the MV Act. iii) The additional eligibility criteria specified in the MV Act and MV Rules generally for driving transport vehicles would apply only to those intending to operate vehicles with gross vehicle weight exceeding 7,500 kg i.e. medium goods vehicle , medium passenger vehicle , heavy goods vehicle and heavy passenger vehicle . iv) The decision in Mukund Dewangan (2017) is upheld but for reasons as explained by us in this judgment. In the absence of any obtrusive omission, the decision is not per incuriam, even if certain provisions of the MV Act and MV Rules were not considered in the said judgment. The reference is answered in the above terms. The Registry is directed to list the matters before the appropriate Bench after obtaining directions from Hon ble the Chief Justice of India.

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• 2025 (4) TMI 431
  Application for appointment of a learned Arbitrator - Clause 16 of the agreement constituted a valid arbitration clause under the Arbitration and Conciliation Act, 1996 or not - The respondent No. 1 had approached the NCLT, Cuttack for initiation of insolvency proceedings against the petitioner, as the corporate debtor. The petitioner also participated in the said proceeding and after several months has invoked Clause 16, by treating the same to be an arbitration clause. In the reply filed to the notice issued under the IBC as also in the objection filed before the NCLT, the petitioner did not contend that the matter should be resolved by arbitration. HELD THAT:- In the decision of Jagdish Chander [ 2007 (4) TMI 624 - SUPREME COURT ], the Hon ble Apex Court held that intention of the parties to enter into an arbitration agreement will have to be gathered from the terms of the agreement. If the terms of the agreement clearly indicated an intention on the part of the parties to refer the dispute to a private tribunal for adjudication and a willingness to be bound by the decision of such tribunal on such disputes, it would constitute as an arbitration agreement. While there was no specific form of an agreement, the words used should disclose a determination and an obligation to refer to arbitration, but not merely a possibility of going for arbitration. In the present case, the Managing Director of BAL, represented the company and signed the contract. The designated partner of the respondent No. 1 also represented the partnership firm and signed the contract. Thus, these two officials were representing the parties to the contract and were binding themselves to the terms and conditions of the contract. They were also bound to ensure that the parties to the contract performed their rights and liabilities there under. By signing the contract, the Managing Director of BAL and the designated partner committed that the respective parties would be bound by the obligations and responsibilities outlined in the contract. Both parties have alleged breach. Thus, it would be absurd to hold that under such circumstances, the same persons could impartially settle the disputes - In the case in hand, compliance of Clause (4) is not ensured. Conclusion - Clause 16 do not constitute a valid arbitration agreement under the Arbitration and Conciliation Act, 1996. The application for appointment of an arbitrator is dismissed, as the clause failed to meet the statutory requirements for an arbitration agreement. Application dismissed.

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• 2025 (4) TMI 430
  Dishonour of Cheque - challenge to issuance of the impugned notice - lack of prior examination of the complainant and witnesses on oath - non-application of mind - principles of natural justice - HELD THAT:- In light of the decision in A.C. Narayanan v. State of Maharashtra and Another [ 2013 (9) TMI 948 - SUPREME COURT ], it becomes clear that in respect of complaints under Section 138 of the NI Act, once the complainant files an affidavit in support of the complaint, it is within the Magistrate s discretion to decide whether to examine the complainant or witnesses on oath. The Magistrate is not bound to do so and may rely solely on the complaint, supporting documents, and the affidavit to decide whether to issue process. Section 145 of the NI Act expressly permits the complainant to tender evidence by way of affidavit and enables the Court to proceed on such material unless a request is made for summoning the witness for cross-examination. Thus, the NI Act carves out a procedural departure from the general requirement under Section 200 CrPC (and now Section 223 BNSS), recognising the affidavit as a valid substitute for oral examination at the pre-cognizance stage. While Section 223 of the BNSS broadly retains the procedural framework of Section 200 of the CrPC with respect to the examination of the complainant and witnesses, it introduces a significant departure through the insertion of a proviso mandating that the proposed accused be afforded an opportunity of hearing before cognizance is taken. This proviso marks a substantive procedural safeguard that did not exist under the earlier regime. However, with regard to offences under Section 138 of the NI Act, the Supreme Court in A.C. Narayanan v. State of Maharashtra has categorically held that the Magistrate may, in his discretion, proceed on the basis of the complaint, supporting documents, and an affidavit of the complainant, without necessarily examining the complainant or witnesses on oath prior to issuing process. Accordingly, in the Court s view, the procedure for such cases has not undergone any material change with the enactment of Section 223 of the BNSS. The requirement of examining the complainant and the witnesses upon oath, at the pre-cognizance stage remains directory and not mandatory in complaints under Section 138 of the NI Act. Conclusion - The Petitioner s contention, that the Magistrate erred in issuing notice under Section 223 without first examining the complainant and witnesses on oath, does not merit acceptance. The challenge to the Impugned notice is, therefore, misconceived and without legal basis. The Court finds no merit in the present petition - Petition dismissed.

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• 2025 (4) TMI 429
  Dishonour of Cheque - insufficient funds - petitioner submitted that the petitioner has been convicted in a mechanical manner without due application of mind - violation of principles of natural justice - HELD THAT:- It is trite law that this Court is required to exercise restraint and should not interfere with the findings in the impugned orders or reappreciate evidence merely because another view is possible unless the impugned orders are wholly unreasonable or untenable in law - It is also well settled that once the execution of the cheque is admitted, the presumption under Section 118 of the NI Act that the cheque in question was drawn for consideration and the presumption under Section 139 of the NI Act that the holder of the cheque received the cheque in discharge of a legally enforceable debt or liability are raised against the accused. Coming to the facts of the present case, a bare perusal of Ex. CW-1 shows that when the complainant withdrew the first complaint, being, CC 2152/1/08, in terms of the compromise between the parties, he had received the subject cheque as part of the settlement. The cheque details were duly noted in the said order and the statements of the petitioner as well as the respondent was also recorded. The petitioner had assured that the subject cheque shall be encashed and she would abide by the terms of the compromise deed between the parties. The petitioner had affirmed her signature on the compromise deed as well. It is also relevant to note that the compromise deed records the admission of the petitioner to the liability in complaint case bearing no. 2152/1/08. Undue emphasis cannot be laid solely on the factor of adjudication of liability, because even though the same is a factor, the absence of such adjudication does not relegate the complainant to establishing its case afresh, especially when the unchallenged compromise deed records admission on part of the accused. In the present case, after reaping the benefits of the complainant withdrawing the first complaint, the petitioner initially denied the factum of any settlement or compromise - The learned trial Court has rightly noted that the compromise deed has all the essentials of a contract wherein once the respondent withdrew the original complaint, the petitioner could not be allowed to escape her liability under the same. Considering the mitigating circumstances brought forth by the petitioner as well as the quantum of fine imposed, in the opinion of this Court, interests of justice would be met if the sentence imposed on the petitioner is modified to the extent of only payment of the fine amount of Rs. 30,00,000/- with no substantive sentence of imprisonment. In default of payment of fine, the petitioner shall undergo simple imprisonment for a period of six months. Let the fine amount be released to the respondent as compensation. This Court is not interfering in the fine amount considering the nature of the offence as well as the conduct of the petitioner to blatantly deny having entered into any settlement at the first instance. Conclusion - The conviction under Section 138 of the NI Act upheld, but the sentence is modified to exclude imprisonment, focusing on the fine, given the petitioner s circumstances. Petition disposed off.

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• 2025 (4) TMI 428
  Demand for enhanced stamp duty by the Sub-Registrar on the sale certificate - wilful undervaluation of the property under Section 47-A of the Indian Stamp Act - Property was sold by the Official Liquidator in a public auction (E-Auction) - HELD THAT:- The issue relating to payment of stamp duty on sale certificate is no longer res-integra. In Bell Tower Enterprises LLP, Rep. by its Managing Partner Vs. State of Tamil Nadu, Rep. by its Secretary to Government, [ 2022 (9) TMI 1504 - MADRAS HIGH COURT] , after referring all the precedents on the issue of stamping of sale certificate had held that the stamp duty payable on the sale certificate is only 5% and the registration charges payable is 1% and had observed that conveyance would apply to a Sale Certificate also. Under Article 23 of the Stamp Act, the Stamp Duty payable on a sale is 5% as per G.O.Ms.No.46, CT and All Department dated 27.03.2012. The said judgment was also followed by another learned Single Judge of this Court in N.C. Suresh Kumar and another Vs. Inspector General of Registration [ 2023 (8) TMI 1632 - MADRAS HIGH COURT] . Therefore, the demand made by the Sub-Registrar that the petitioner must pay enhanced stamp duty is not justified. As regards the reference made under Section 47-A of the Stamp Act we are constrained to hold that such a reference is not authorized by Section 47-A. The Hon ble Supreme Court in Registrar of Assurances and another Vs. ASL VYAPAR Private Ltd. another [ 2022 (11) TMI 1385 - SUPREME COURT] after referring to the earlier judgment in V.N. Devadass Vs. Chief Revenue Control Office -cum-Inspector and others [ 2009 (5) TMI 967 - SUPREME COURT] held that a reference under Section 47-A cannot be resorted, where a sale is by public auction by the officers appointed by the Court. Conclusion - The demand for enhanced stamp duty is unlawful, the reference under Section 47-A is unauthorized, and the petitioner is entitled to a refund of the excess duty paid with interest. The order of the learned Single Judge dismissing the writ petition is set aside. The demand made by the sub-Registrar is also set aside. The 47-A proceedings are quashed - Appeal allowed.

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