TMI Tax Updates - e-Newsletter
April 15, 2025

Case Laws in this Newsletter:

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

TMI Short Notes

1. Statutory provision offering tax deductions through savings and investments in specified financial products : Clause 123 of the Income Tax Bill, 2025 Vs. Section 80C of the Income Tax Act, 1961

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2. Comprehensive Guide to Understanding Deductions from Gross total income in Clause 122 of Income Tax Bill, 2025 Vs. Section 80A of Income Tax Act, 1961

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3. Conditions for submission of returns for losses and such losses can be carried forward and set off against future income : Clause 121 of Income Tax Bill, 2025 Vs. Section 80 of Income Tax Act, 1961

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4. Disallowing the set-off of losses against undisclosed income detected through searches, requisitions, or surveys : Clause 120 of Income Tax Bill, 2025 Vs. Section 79A of Income Tax Act, 1961

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5. Legal Insights into carry forward and set off of losses under the head "Capital gains" : Clause 111 of the Income Tax Bill, 2025 Vs. Section 74 of the Income Tax Act, 1961

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Articles

1. Common Mistakes to Avoid During the Online 12A Registration Process

   By: Ishita Ramani

2. REFERRING OF SECTION 47A OF THE INDIAN STAMP ACT, 1899 FOR UNDERVALUATION

   By: DR.MARIAPPAN GOVINDARAJAN

3. Impact of Refrigerants on Climate Change.{Environmental Law – ODS & GWP}

   By: YAGAY andSUN

4. The Bureau of Indian Standards - Fees, Compliances under BIS

   By: YAGAY andSUN

5. BIS Quality Control Orders - How it is shaping the India's Manufacturing Sector in context with its Import?

   By: YAGAY andSUN

6. Consequences of Non-Compliance with BIS Standards and Quality Control Orders for Manufacturers, Importers, and Traders.

   By: YAGAY andSUN

7. Chapter XVII: The Companies (Registered Valuers and Valuation) Rules, 2017

   By: YAGAY andSUN

8. BIS Quality Control Orders - How it is shaping the India's Manufacturing Sector in context with its Import?

   By: YAGAY andSUN

9. Export of Mustard Seeds & Mustard Oil from India

   By: YAGAY andSUN

10. Export of Walnuts from India.

   By: YAGAY andSUN

News

1. SBI passes on RBI rate cut benefit to borrowers, reduces interest rate by 25 bps

2. ED's plea to declare Mehul Choksi fugitive economic offender stuck in Mumbai court for 7 years

3. Modi govt ended whatever sanctity tax administration system in enjoyed: Cong

4. Ministry of Corporate Affairs hosts 5th ‘Candidate Open house’ for interns of PM Internship scheme

5. Industry Stakeholders Should Embrace Sustainability and Set Global Benchmarks:Shri Goyal

6. DRI thwarts major methamphetamine smuggling operation on outskirts of Mizoram with seizure of 52.67 kg methamphetamine tablets worth Rs. 52.67 crore

7. India and Nepal hold 21st Director - General level talks on Customs cooperation in Kathmandu, Nepal, on 10th-11th April, 2025

8. UK cuts import tariffs on ‘everyday essentials’ in effort to boost growth

9. Tariff war opens door for India to emerge as global toy export hub

10. Former bureaucrat Pardeshi appointed as economic advisor to CM Fadnavis

Notifications

GST - States

1. 08/2025-State Tax (Rate) - dated 31-1-2025 - Tripura SGST

Amendment in Notification No. 17/2017-State Tax (Rate), dated the 29th June, 2017

2. 07/2025-State Tax (Rate) - dated 31-1-2025 - Tripura SGST

Amendment in Notification No. 13/2017-State Tax (Rate), dated the 29th June, 2017

3. 06/2025-State Tax (Rate) - dated 31-1-2025 - Tripura SGST

Amendment in Notification No. 12/2017-State Tax (Rate), dated the 29th June, 2017

4. 05/2025-State Tax (Rate) - dated 31-1-2025 - Tripura SGST

Amendment in Notification No. 11/2017- State Tax (Rate), dated the 29th June, 2017

5. 04/2025-State Tax (Rate) - dated 31-1-2025 - Tripura SGST

Amendment in Notification No. 8/2018-State Tax (Rate), dated the 21st February, 2018

6. 03/2025-State Tax (Rate) - dated 31-1-2025 - Tripura SGST

Amendment in Notification No. 39/2017-State Tax (Rate), dated the 13th November, 2017

7. 02/2025-State Tax (Rate) - dated 31-1-2025 - Tripura SGST

Amendment in Notification No. 2/2017- State Tax (Rate), dated the 29" June, 2017

8. 01/2025-State Tax (Rate) - dated 31-1-2025 - Tripura SGST

Amendment in Notification No. 1/2017- State Tax (State), dated the 29th June, 2017

Circulars / Instructions / Orders

Customs

1. PUBLIC NOTICE No. 07/2025 - dated 20-3-2025

Mandatory additional qualifiers in import/export declarations in respect of Synthetic or Reconstructed Diamonds — reg.

2. PUBLIC NOTICE No. 06/2025 - dated 20-2-2025

Changes in the system to request for Provisional assessment of bills of entry by Importers - Reg.

Highlights / Catch Notes

GST

• High Court Validates Retrospective ITC Extension, Allowing Tax Credit Claims Beyond Original Statutory Deadlines Under Section 16(4)

  Case-Laws - HC : HC allowed the petition concerning irregularly availed Input Tax Credit (ITC), finding that Circular dated 15.10.2024 retrospectively extended the time limit for ITC under Section 16(4) of CGST Act, 2017. The Deputy Solicitor General conceded that petitioner is now entitled to the previously denied ITC based on the new notification and circular provisions. The court's ruling effectively reinstates the petitioner's right to claim input tax credit beyond the original statutory cut-off dates, providing retrospective relief for tax credit claims.
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• GST Rate Dispute Resolved: Contractual Interpretation Favors Full Reimbursement Under Unexpected Tax Changes

  Case-Laws - HC : The HC adjudicated a dispute concerning GST rate changes and contractual variation clauses. The court found that the Arbitral Tribunal misinterpreted contractual provisions regarding Input Tax Credit (ITC) and statutory variation clauses. The arbitral award was set aside due to misapplication of contract terms, disregard of GST regime principles, and failure to provide reasoned justification. The HC held that the employer was contractually obligated to reimburse the full GST amount, particularly given the unexpected GST rate increase from 5% to 12%. The court emphasized that state instrumentalities cannot adopt arbitrary approaches in contract interpretation. Consequently, the petition was allowed, and the impugned arbitral award was set aside.
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• Legal Heir Seeks GST Refund Recovery After Department's Prolonged Delay in Implementing Prior Judicial Directive

  Case-Laws - HC : HC found that despite prior judicial directive to re-credit the electronic cash ledger refund within two weeks, the GST Department failed to process the legal heir's claim for excess balance. The court expressed concern over the persistent administrative inaction, highlighting the petitioner's repeated attempts to secure the refund. The matter was scheduled for further hearing, emphasizing the need for administrative compliance with previous judicial instructions regarding the refund of the deceased proprietor's electronic cash ledger balance.
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• Protective Sealing of Godown Preserves Stakeholder Interests During GST Registration Cancellation Review Process

  Case-Laws - HC : HC held that in the matter of GST registration cancellation, the sealing of the godown was a protective measure to safeguard stakeholders' interests, not based on inter-party disputes. The directive was implemented to prevent goods removal pending the Commissioner's decision on registration revocation application. The court emphasized a time-bound resolution process to ensure fair treatment and protect the rights of all parties, including financial institutions. The interim protective order was deemed appropriate to maintain status quo until a definitive determination could be made regarding the registration cancellation.
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• Tax Credit Rectification Requires Fair Hearing: Administrative Order Invalidated Due to Lack of Personal Opportunity to Present Case

  Case-Laws - HC : HC ruled on input tax credit rectification under Section 161 of Delhi GST Act, finding procedural irregularities in the administrative order. The court held that when rectification potentially adversely impacts the applicant's rights, principles of natural justice mandate providing personal hearing. Since the petitioner was not afforded an opportunity to be heard, the rectification order dated 28th February 2025 was set aside, thereby ensuring due process and fundamental fairness in administrative proceedings.
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• Tax Dispute Resolution: ITC Misstatement Requires 10% Deposit, Appeal Rights Preserved Under Conditional Order

  Case-Laws - HC : HC adjudicated a tax dispute involving Input Tax Credit (ITC) misstatement. The court determined that the petitioner must follow prescribed guidelines by depositing 10% of the disputed amount within eight weeks. The demand confirmed by the Appellate Authority shall remain stayed until GST Appellate Tribunal's constitution. Upon tribunal notification, petitioner may file appeal through standard procedural mechanisms. The ex-parte order was conditionally modified, providing a structured pathway for potential further legal recourse while mandating partial financial compliance.
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• Procedural Fairness Prevails: Petitioner Granted Opportunity to Respond to Show Cause Notice, Ensuring Right to Be Heard

  Case-Laws - HC : HC found a violation of natural justice principles as the petitioner was not afforded an opportunity to respond to the Show Cause Notice (SCN). The court remanded the matter back to the concerned department, directing it to provide the petitioner a fair hearing. The petitioner was granted 30 days to file a response to the SCN, ensuring procedural fairness and the right to be heard. The petition was disposed of through remand, allowing for a fresh consideration of the case with proper adherence to principles of natural justice.
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Income Tax

• Taxpayer Wins Appeal as Tribunal Orders Comprehensive Review of Tax Assessment and CIT(A)'s Non-Speaking Order

  Case-Laws - AT : The ITAT allowed the assessee's appeal for statistical purposes, remanding the case for re-examination. The tribunal found merit in the assessee's arguments that the CIT(A) passed a non-speaking order without thoroughly examining the case merits. Referencing the Supreme Court's guidance in AUDA's case, the tribunal emphasized the tax authorities' obligation to carefully scrutinize receipts, expenditure patterns, and contentions on a case-by-case basis. The order specifically noted the CIT(A)'s failure to consider the assessee's detailed submissions regarding the TV subsidy received from BCCI and the impact of registration cancellation under section 12A.
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• Government Entity Wins Tax Dispute: Penalty Canceled for Honest Income Disclosure and Unintentional Data Transmission Error

  Case-Laws - HC : HC ruled on penalty u/s 271(1)(c) regarding book profit discrepancies. The court found that the assessee, a government entity, voluntarily disclosed income mismatches before scrutiny assessment. The Tax Audit Report was correctly filed and uploaded on the Income Tax Portal. The revenue authority did not allege income concealment. The mismatch was attributed to a data transmission error without malafide intent. The Commissioner of Income Tax (Appeals) deleted the penalty, determining the discrepancy was an inadvertent mistake. The HC upheld the appellate order, deciding in favor of the assessee and dismissing the penalty proceedings.
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• Loan Disbursement Through Co-Applicants Not a Deemed Dividend Under Section 2(22)(e) of Income Tax Act

  Case-Laws - AT : ITAT adjudicated a tax dispute involving loan disbursement and potential deemed dividend under Section 2(22)(e). The tribunal found that the loan was sanctioned jointly with co-applicants and disbursed to a company, which subsequently transferred funds to the assessee. Critically, the tribunal determined the transaction did not constitute a deemed dividend because the funds originated from a bank loan, not accumulated profits. The addition made based on Internal Audit Party observations was deemed unsustainable, as no incriminating material was discovered during search proceedings. Consequently, the tribunal allowed the assessee's appeal, effectively quashing the tax assessment and rejecting the proposed addition under the specified provision.
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• Tax Assessment Invalidated: Procedural Flaws and Improper Approval Render Order Void, Protecting Legitimate Business Stock Transactions

  Case-Laws - AT : The ITAT examined the validity of an assessment order under sections 153A and 153D. The Tribunal found critical procedural irregularities in the approval process, specifically noting that the approval was granted on the same day as the draft and final assessment orders, without clear evidence of substantive examination. The approval was deemed invalid due to lack of proper application of mind, rendering the entire assessment order void ab initio. Regarding shares held as stock-in-trade, the Tribunal ruled that shares purchased in the regular course of business are not subject to taxation under section 56(2)(viia), emphasizing that the provision was intended to prevent tax evasion, not to tax legitimate business transactions. Consequently, the Assessee's appeal was allowed.
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• Transfer Pricing Dispute: AO Must Implement DRP Directive on Arm's Length Price Adjustment Under Section 92C(1)

  Case-Laws - AT : ITAT remanded the case to the AO for compliance with DRP's directive regarding transfer pricing adjustment. The tribunal acknowledged the DR's concession that the AO had not implemented the prescribed +/- 3% arm's length price adjustment under section 92C(1). The matter was restored to the AO's file to ensure proper application of the DRP's direction, specifically to grant the mandated transfer pricing adjustment within the statutorily defined percentage range.
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• Computational Errors in Tax Assessment Do Not Constitute Underreported Income, Tribunal Clarifies Section 270A Penalty Provisions

  Case-Laws - AT : ITAT adjudicated a taxation dispute concerning penalty levy under section 270A. The tribunal examined whether disallowed expenses constituted underreported income. Key findings indicate that adjustments made under section 143(1)(a) involving apparent computational mistakes do not qualify as underreported income warranting penalty. The tribunal distinguished between inadvertent computational errors and deliberate income misreporting. Specifically, additions made during assessment that stem from apparent mistakes are exempt from penalty provisions. The tribunal interpreted section 270A(2)(a) narrowly, holding that only income determined through scrutiny assessment can be classified as underreported. Consequently, the tribunal ruled in favor of the assessee, negating penalty imposition and emphasizing legislative intent to exclude inadvertent computational errors from punitive taxation measures.
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• Tax Exemption Upheld: Assessee Wins on Long-Term Capital Gains, Share Sale Proceeds, and Family Loan Documentation

  Case-Laws - AT : ITAT affirmed CIT(A)'s order, rejecting revenue's appeal. The tribunal upheld the lower authority's findings on multiple legal issues: (1) assessee qualified for long-term capital gains tax exemption under Section 54F by owning only one residential house at share transfer date, (2) sale proceeds of gifted shares from son were not unexplained cash credit under Section 68, and (3) unsecured loans from family members with proper documentation were not assessable as unexplained income. The tribunal found no merit in revenue's contentions and dismissed the appeal, maintaining the original order that deleted additions made by the Assessing Officer.
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Customs

• Supreme Court Upholds Customs Act Section 124 Notice, Orders DGFT Review of Pharmaceutical Raw Materials Export Case

  Case-Laws - SC : SC rejected the petition challenging the show cause notice under Section 124 of the Customs Act, 1962 regarding pharmaceutical raw materials export. The Court directed the DGFT to review the petitioner's representations and make an appropriate determination. The authority was instructed to proceed with adjudication after DGFT's decision. The court found the show cause notice process appeared procedurally valid, with no substantive response provided by the petitioner. The petition was disposed of, effectively allowing administrative reconsideration of the classification and export documentation.
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• Provisional Customs Attachment Limited to One Year, Automatic Termination Confirmed After Statutory Period Expires

  Case-Laws - HC : HC ruled that provisional attachment under Section 110(5) of Customs Act, 1962 cannot exceed one year. Section 110A is inapplicable when attachment period expires, precluding extension beyond statutory timeframe. The court determined that once the one-year period lapses, the provisional attachment automatically ceases, and parties cannot invoke Section 110A to maintain the attachment. Consequently, the court granted relief by raising the attachment of petitioners' bank accounts, effectively terminating the provisional seizure.
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• Customs Penalty Upheld: Mandatory Pre-Deposit Rule Stands Firm Under Section 129E with No Exemption for Financial Constraints

  Case-Laws - HC : HC dismissed the writ petition challenging a customs penalty, holding that the statutory pre-deposit under Section 129E of the Customs Act, 1962 is mandatory. The court found no merit in the petitioner's claim of financial incapacity, noting the petitioner's status as a regular importer who should be aware of statutory provisions. The petition was rejected as the petitioner was re-agitating previously adjudicated contentions and failed to comply with the mandatory pre-deposit requirement for filing a statutory appeal.
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• Importer Found Guilty of Customs Duty Evasion by Lending IEC and Collaborating in Fraudulent Import Transactions

  Case-Laws - HC : HC dismissed the appeal, upholding penalties against the appellant for customs duty evasion. The court found the appellant's claims of merely lending his Importer Exporter Code (IEC) to be unsubstantiated. Despite alleging lack of cross-examination opportunity, the court determined the appellant deliberately attempted to evade facts and was complicit with Mr. Rajat Arora in fraudulent import transactions. The appellant was deemed responsible for misuse of his IEC registration and acting in concert with the co-conspirator. Consequently, the original penalties and amounts imposed were confirmed, and the appeal was rejected.
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• Export Document Case: Intermediary Cleared of Fraud Charges Due to Lack of Direct Evidence in Customs Proceedings

  Case-Laws - AT : CESTAT adjudicated a case involving alleged submission of false export documents. The tribunal found insufficient evidence to substantiate charges of abetment or fraudulent activity against the appellant, who merely acted as an intermediary transmitting documents received from a shipping agency to a Customs House Agent. Without credible proof of deliberate misconduct or material misrepresentation, the tribunal ruled that imposing penalties under Sections 114(iii) and 114AA of the Customs Act, 1962 was unjustified. Relying on precedent from a similar case, the tribunal emphasized that penalties can only be imposed when positive involvement in fraudulent import/export is conclusively established. The appeal was consequently allowed, and the penalties were set aside.
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• Customs Proceeding Overturned: Section 155 Violation Exposes Critical Procedural Safeguards in Administrative Review

  Case-Laws - AT : CESTAT adjudicated a complex customs proceedings case involving procedural safeguards under Section 155 of Customs Act, 1962. The tribunal found that the original authority improperly evaluated 'good faith' and statutory limitations, thereby violating procedural protections for customs officers. The appellate tribunal critically examined the adjudication process, highlighting the importance of adhering to statutory limitations and procedural safeguards. Consequently, the appeals were allowed, with the case remanded to the original adjudicating authority for reconsideration, emphasizing that procedural integrity is paramount in administrative and quasi-judicial proceedings against government officers.
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• Windshield Glass Import Classification: Toughened Glass Defined as Independent Product, Not Exclusive Motor Vehicle Component

  Case-Laws - AT : CESTAT determined windshield glass set classification, holding the imported goods fall under CTI 70071100 rather than CTH 87089900. The tribunal found the goods did not exclusively constitute motor vehicle parts, possessing multiple functional uses beyond automotive applications. The windshield glasses, characterized as "toughened (tempered) glass", were specifically covered under CTH 7007. The tribunal noted pre-2001 finance bill amendments did not classify such items as vehicle parts. Consequently, the revenue's appeal was dismissed, affirming the original classification under CTI 70071100 as legally appropriate for the imported windshield glass set during the disputed period.
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• Customs Exemption Claim Upheld: Section 149 Enables Retroactive Amendment of Import Entry Benefits Under Notification 30/2004-CE

  Case-Laws - AT : CESTAT allowed appellant's appeal, affirming entitlement to Notification No.30/2004-CE benefits for imports prior to 17.07.2015. Despite not challenging original Bills of Entry, the tribunal recognized the appellant's right to amendment under Section 149 of the Customs Act, 1962. The decision aligned with precedential rulings, particularly referencing ITC Ltd. case, which established that assessment modifications are permissible. The tribunal specifically noted that non-challenge to original assessments does not preclude subsequent notification benefits, especially where exemption conditions are substantively met.
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DGFT

• Comprehensive Trade Support Platform Launched to Streamline Global Import-Export Processes and Resolve Cross-Border Business Challenges

  Circulars : The DGFT has established a 'Global Tariff and Trade Helpdesk' to support exporters and importers navigating complex international trade challenges. The helpdesk will address issues including import/export challenges, trade barriers, logistics, regulatory compliance, and supply chain disruptions. Stakeholders can submit requests through the DGFT website, select relevant issue categories, and track resolution status. Alternative communication channels include a dedicated email ([email protected]) and toll-free number (1800-111-550). The helpdesk aims to provide comprehensive support by coordinating with various government agencies and collecting structured feedback to facilitate smoother international trade operations.
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Corporate Law

• NCLAT Rejects Appeal Against Procedural Order, Upholds Submission Recording Without Diluting Party Rights Under Rule

  Case-Laws - AT : NCLAT dismissed the appeal challenging a procedural order related to a company petition. The tribunal held that the impugned order did not dilute any party's rights and was merely a procedural order recording submission of notes. The appellant failed to challenge the main order dated 18.12.2024 and had already complied with previous directions by filing submissions. Consequently, the appeal challenging the procedural order was deemed non-maintainable, consistent with established judicial precedent that procedural orders are not independently appealable. The appeal was dismissed without addressing the substantive merits of the underlying company petition.
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State GST

• Landmark GST Voucher Ruling: Clarifies Tax Treatment, Distribution Models, and Unredeemed Instrument Taxation Principles

  Circulars : Legal Summary: The AP State Tax Authority issued a comprehensive clarification on GST treatment of vouchers, addressing four key issues. The ruling determines that voucher transactions are neither a supply of goods nor services, whether the vouchers are RBI-recognized pre-paid instruments or actionable claims. Transactions involving voucher distribution through principal-to-principal models do not attract GST, while agency-based distributions may incur GST on commissions. Additional services related to voucher distribution remain taxable. Critically, unredeemed vouchers (breakage) are not considered taxable, as they do not constitute a supply of goods or services when no redemption occurs. The guidance aims to provide uniformity in GST implementation across field formations.
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• GST Council Clarifies Tax Rates for Agricultural Goods, Construction Materials, and Motor Vehicle Compensation Cess

  Circulars : The CCST issued a comprehensive circular clarifying multiple GST-related matters based on the 55th GST Council meeting recommendations. Key clarifications include: (1) pepper of genus Piper attracts 5% GST, with agriculturists supplying dried pepper exempt from registration; (2) agriculturists supplying raisins are GST-exempt; (3) ready-to-eat popcorn has differentiated GST rates (5-18%) based on ingredients and packaging; (4) autoclaved aerated concrete blocks with over 50% fly ash content attract 12% GST; and (5) amendments to motor vehicle compensation cess apply from 26.07.2023. The circular aims to provide uniformity and clarity in GST implementation across jurisdictions.
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IBC

• Creditor's Failure to File Claim During Insolvency Resolution Leads to Debt Extinguishment Under IBC Sections 13, 30, and 31

  Case-Laws - HC : HC held that under IBC Sections 13, 30, and 31, where a creditor fails to lodge a claim with the Resolution Professional during corporate insolvency resolution process, their claim stands extinguished upon Resolution Plan approval. In this case, Respondent No.1's claim was not part of the Resolution Plan due to non-submission, consequently rendering the debt unenforceable. The court mandated release of bank guarantees to Appellant, placing an embargo on initiating or continuing any proceedings related to the extinguished claim. The Interim Application was allowed, definitively resolving the matter in favor of the Appellant.
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Indian Laws

• Sale Certificate from Public E-Auction Triggers Lower 5% Stamp Duty Under Article 23, HC Quashes Enhanced Duty Demand

  Case-Laws - HC : HC adjudicated a dispute regarding stamp duty on a sale certificate following a public e-auction by an Official Liquidator. The court held that stamp duty should be 5% under Article 23 of the Stamp Act, relying on precedents in Bell Tower Enterprises LLP and N.C. Suresh Kumar cases. The HC determined that the Sub-Registrar's enhanced duty demand was unjustified. Furthermore, the court ruled that a reference under Section 47-A is unauthorized for court-supervised public auctions, citing Supreme Court precedents. Consequently, the HC set aside the Sub-Registrar's demand, quashed Section 47-A proceedings, and allowed the appeal, directing a refund of excess duty with interest.
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• Cheque Bounce Case: Signature Admission Triggers Statutory Presumptions, Accused Fails to Rebut Evidence Under NI Act

  Case-Laws - HC : HC allowed the appeal, reversing the acquittal of Respondent No. 2 under Section 138 of Negotiable Instruments Act. The court held that the accused failed to rebut statutory presumptions under Sections 118 and 139 of the NI Act. Mere denial of liability without cogent documentary evidence is insufficient to shift the burden of proof. The signature admission on the cheque activates presumptions in favor of the complainant. The impugned judgment was set aside, and the matter was remanded for further proceedings.
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• Cheque Dishonor Case: Statutory Presumptions Upheld, Accused Fails to Rebut Evidence Under Sections 118 and 139

  Case-Laws - HC : HC held that under Sections 118 and 139 of the Negotiable Instruments Act, rebuttable presumptions favor the complainant when cheque execution is admitted or proven. The accused failed to effectively rebut statutory presumptions regarding legally enforceable debt. Revisional jurisdiction permits interference only where lower court orders demonstrate illegality or impropriety. The court found sufficient evidence supporting the complainant's claim, thus partially allowing the revision petition by modifying the sentence while maintaining conviction and compensation order.
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PMLA

• Supreme Court Clarifies Property Attachment Rules Under PMLA Section 8(3), Upholding Broader Investigative Powers in Money Laundering Cases

  Case-Laws - SC : SC analyzed the duration of property attachment under PMLA Section 8(3), focusing on the applicability of legal provisions before and after amendment. The Court held that the original provision governs the attachment order, and the pendency of a complaint alleging money laundering offense is sufficient to maintain the attachment, irrespective of specific accused designation. The complaint's existence alone justifies continuing the property retention order. The SC set aside both the High Court and Appellate Tribunal orders, determining that the pre-amendment clause (a) applies, thereby allowing the attachment to remain in effect during ongoing legal proceedings related to the money laundering investigation.
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• Arrest Procedures: Judicial Proximity Defined as Jurisdictional Magistrate Access Within 24-Hour Constitutional Window

  Case-Laws - HC : HC analyzed the interpretation of "nearest Magistrate" in money laundering arrest procedures. The court held that production before the jurisdictional Magistrate within 24 hours satisfies constitutional requirements under Article 22(2), and is not mandatorily restricted to geographically closest Magistrate. The arrest by ED under PMLA Section 19(1) was deemed valid, with procedural technicalities considered inadvertent omissions. The court emphasized that constitutional rights are violated only if an accused is detained beyond 24 hours without judicial production. The petitioner's challenge to detention was dismissed, affirming the legal validity of the arrest and subsequent remand proceedings.
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• Company Officials Orchestrate Massive Financial Fraud, Manipulate Stock Exchange Through Deliberate Conspiracy Scheme Under Section 420 IPC

  Case-Laws - AT : The AT found the appellant Company culpable of cheating under Section 420 IPC through a deliberate conspiracy with NSE officials, resulting in wrongful gain of 4.54 crore. The tribunal determined the actions constituted money laundering under PMLA Section 3, involving intentional projection of illegitimate proceeds as legitimate income. Despite arguments challenging the allegations, the tribunal rejected the appellant's contentions, emphasizing the systematic nature of the fraudulent scheme involving high-ranking officials. The appeal was consequently dismissed, affirming the criminal liability of the appellant for fraudulent financial transactions and breach of statutory obligations.
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• Bankruptcy Moratorium Does Not Block Property Attachment Under Prevention of Money Laundering Act Enforcement

  Case-Laws - AT : AT analyzed the interplay between IBC, PMLA, and SARFAESI Act, holding that Section 14 moratorium does not preclude property attachment under PMLA. The tribunal rejected appellant's challenge, finding no merit in arguments regarding statutory precedence. Section 32A immunity was inapplicable as resolution plan conditions were not satisfied. The attachment of properties remains valid, with the court emphasizing that different statutes serve distinct legislative purposes. Consequently, the appellate tribunal dismissed the appeal, affirming the original attachment order and maintaining the enforcement mechanism under PMLA.
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Case Laws:

• GST

• 2025 (4) TMI 738
  Seeking for a direction for release of the goods and the vehicle covered by Ext.P9, after payment of tax and penalty in respect of 4000 kgs. of goods found in excess - HELD THAT:- On a perusal of the records produced, as well as on an appreciation of the contentions raised, it is evident that the respondent had initiated proceedings under Section 129 of the CGST Act. The statutory scheme provides for release of the goods on compliance with the stipulations therein. Specific orders from this Court is not necessary. Petitioner has expressed its willingness to pay the amount of penalty or other sum that may be imposed. In such circumstances, there seems to be no serious dispute except that the respondent wants to have a physical verification of the entire goods to identify whether any other proceedings are required to be initiated as contemplated by the statute or otherwise. Thus, no orders are required to be issued except to observe that as and when petitioner appears before the respondent, the physical verification of the goods shall be carried out without any delay and if any penalty or other demands are made in accordance with Section 129 of the CGST Act and if the petitioner pays the same, appropriate orders shall be issued - petition disposed off.

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• 2025 (4) TMI 737
  Demand for irregularly availed ITC - petitioner filed their GSTR-3B return for the corresponding months and accordingly availed ITC after the cut-off dates - HELD THAT:- Circular dated 15.10.2024 clarifies that sub-section (5) and sub-section (6) of Section 16 of the CGST Act, 2017 inserted under Section 16 of the CGST Act, 2017, with effect from the 1st day of July, 2017, vide Section 118 of the Finance (No. 2) Act, 2024 the time limit to avail input tax credit under provisions of sub-section (4) of Section 16 of the CGST Act, 2017 has been retrospectively extended in certain specified cases. The learned Deputy Solicitor General of India representing respondent nos. 1 to 6 submits that in view of the notification and the circular above, the petitioner is now entitled to the Input Tax Credit that was denied to them by the impugned order. Petition allowed.

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• 2025 (4) TMI 736
  Time limitation for filing appeal - appeals preferred by the petitioner under the provisions of the GST Act dismissed as being beyond limitation as prescribed under Section 107 of GST Act - HELD THAT:- Prima-facie, the petitioner was bonafidely pursuing his remedy before this Court as well as before the Supreme Court as is evident from the two orders passed, and immediately after passing of the order by the Supreme Court on 04.11.2024, the petitioner preferred the appeals on 06.11.2024. The period of the petitioner having spent before the High Court and the Supreme Court could be pleaded by him to be excused in view of the mandate of Section 14 of the Limitation Act. This aspect has not been considered in the impugned orders. Thus, finding the impugned orders dated 11.11.2024 23.11.2024 to be improper insofar as it fails to consider the mandatory prescriptions contained in Section 14 of the Limitation Act, the orders impugned cannot be sustained and are quashed. Matter is remanded to the appellate authority to pass orders afresh - Petition allowed by way of remand.

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• 2025 (4) TMI 735
  Interpretation of contractual clauses concerning GST rate changes and the statutory variation clause - benefit of additional Input Tax Credit (ITC) accrued to the contractors due to the GST rate increase, when there was no corresponding change in input tax regime, has not been passed on to ICF, the employer - respective contractors were obligated to reduce prices under Clauses 2.8 and 2.9 of the General Conditions of the Contract (GCC) and Clause 3.0 of the respective Purchase Orders (POs) or not - ICF (employer) was contractually bound to reimburse full GST amount in the light of statutory variation clause available under the respective POs or not. HELD THAT:- In the case on hand, due to revision in the rate of GST subsequent to the date of the contract, the respective contractors have been compelled to enforce the statutory variation clause. They cannot be left high and dry for no fault of theirs, as it seen from the evidence available on record, they would not have factored unexpected revision in the rate of GST from 5% to 12% while they had quoted their price through their respective bids. The respective Arbitral Tribunals has rightly considered and passed the impugned arbitral awards in favour of the respective contractors. None of the grounds raised in these petitions fall within the parameters required for setting aside the arbitral awards insofar as the arbitral awards passed in favour of the respective contractors are concerned - Unless and until the impugned arbitral awards passed in favour of the respective contractors suffer from perversity and are patently illegal and have been passed without any evidence and contrary to well settled law, the question of interference by this Court under Section 34 of the Act does not arise. Rejection of claim through its arbitral award - HELD THAT:- The Arbitral Tribunal had also completely misunderstood the scope of Clause 2.9 of the GCC. The expressions additional input tax credit as may become available in the future reveals that if there was any additional input tax credit available, it is that credit which the contract mandates to pass on, provided it is again unabsorbed credit which cannot be utilized elsewhere. Further, if the ITC does not form part of the cost, it would make no difference to the cost of final product and there would be no price reduction on the final product - The variation in tax was only with respect to the final products (contract goods) from 5% to 12% and it was nobody s case that there was corresponding variation on the input tax which resulted in any additional tax benefit. Therefore, neither Clause 2.8, which contemplates input tax credit that may become available nor clause 2.9 which refers to additional input tax credit has happened in the facts of the present case. The variation was not in respect of inputs, but, in respect of final products. Therefore, neither of the said clauses are applicable to the case on hand. The Arbitral Tribunal which had rejected the claim of one of the contractors, had also completely disregarded and failed to take into consideration the fact that a similarly placed contractor was reimbursed, namely, M/s.Kineco Limited, by applying the statutory variation clause due to increase in GST rate from 5% to 12%. No reasoning has been given by the Arbitral Tribunal for non-consideration of the fact that M/s.Kineco Limited was reimbursed with full GST amount by applying the statutory variation clause. On the one hand, ICF has sought price revision upto the period when the GST rates were increased from 5% to 12%, i.e., from 01.01.2019 to 30.09.2021, however, on the other hand, ICF has not made any claim for price revision when the GST rates were increased from 12% to 18%. The only submission made by ICF in support of this arbitrary and whimsical approach is that when the rate of GST increased from 12% to 18%, the quantum of ITC was negligible. It is settled law that instrumentality of the State cannot adopt arbitrary, whimsical and unreasonable approach even in the realm of private contracts. Conclusion - i) The impugned arbitral award suffers from infirmity on account of misapplication and misreading of the clear terms of the bid document. ii) The impugned arbitral award disregards the settled position of law regarding ITC under the GST regime. iii) The impugned arbitral award is an unreasoned award and therefore, is violative of Section 31(3) of the Act. iv) The impugned arbitral award is passed in ignorance of the vital evidence and therefore, is absolutely perverse in law. v) The impugned arbitral award is in conflict with the public policy of India, since the arbitrator has failed to take note of the fact that the contractor involved in the said arbitral award has established beyond reasonable doubt based on the contractual provision that the said contractor is also entitled for an arbitral award in their favour in respect of increase in the rate of GST from 5% to 12% subsequent to the date of the contract. vi) The only possible view that could have been taken by the Arbitral Tribunal is that ICF was contractually bound to reimburse the GST amount to the contractor on account of the statutory variation clause. The impugned arbitral award dated 06.11.2023 passed against the petitioner in Arb.O.P.No.128 of 2024, through which the claim of the contractor was rejected, has to be set aside and accordingly, the same is set aside by this Court - Petition allowed.

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• 2025 (4) TMI 734
  Claim of refund of the excess balance in the electronic cash ledger of the firm by the legal heir of the deceased proprietor of M/s Hunny Enterprises - petitioner is not a registered person with the GST Department - rejection of refund claim on the ground that Petitioner did not appear for personal hearing - HELD THAT:- The present writ petition marks the second instance wherein the Petitioner has approached this Court seeking refund. It is a matter of concern that almost a year ago, the same Petitioner had appeared before a Coordinate Bench of this Court, which, after considering the matter, directed that the refund amount be re-credited within a period of two weeks. It is unfortunate to see that despite the said amount being in the Electronic cash ledger, the refund has not been given to the Petitioner till date. List on 5th May, 2025.

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• 2025 (4) TMI 733
  Challenge to order of adjudication - petition dismissed on the ground that there are appellate remedy available and the writ petitioner has to avail such remedy - HELD THAT:- In the case on hand the matters listed in serial nos.6, 7, 8 and 9 of the tabulated statement alone are in dispute. So far as the 6 and 7 are concerned, according to the department, IGST was taken and utilized in GSTR-9 and the reason given by the appellant is that they have utilized this amount in the GSTR-9. Similar is the allegation in respect of serial no.7. According to the appellant/assessee, the same stands reflected in the GSTR-9 and only the GSTR-3B it was not reflected - This aspect can be verified departmentally by various means and the matter need not linger further before this court as any further delay will not be in the interest of revenue. So far as the serial nos.8 and 9 are concerned, the allegation is difference of taxable value of invoice. The reason given is the taxable value of invoice certified by recipient to be less than what was raised by the instant recipient - this issue also can be verified by the department in the portal and, therefore, the matter requires to be remanded back to the adjudicating authority for a fresh decision in the matter only concerning the above four items as mentioned in the tabulated statement in page 9 of the adjudication order, namely, serial nos.6, 7, 8 and 9. Appeal allowed in part.

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• 2025 (4) TMI 732
  Revocation of cancellation of registration - Time limitation - Application for revocation of the cancellation of GST registration of MRT Metal Mart should be disposed of in a time-bound manner or not - HELD THAT:- Though arguments were addressed by either counsel on the correctness of the order directing sealing of the godowns, especially since the application for appointment of a receiver was declined by the court, the direction to seal the godown of the erstwhile MRT Metal Mart was not on the basis of the dispute between the parties, but solely because of the cancellation of registration and when the registration of a business entity has been cancelled, to protect the rights of all the parties including that of the bank, till a decision is taken by the Commissioner regarding the application for revocation of cancellation, it is only appropriate that the goods in the godown are not permitted to be removed. Petition disposed off.

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• 2025 (4) TMI 731
  Time limitation - dismissal of appeal on the ground that the same was instituted beyond three months from the date of communication of the order as required under Section 107 (1) of the CGST Act, 2017 - HELD THAT:- Respondent No. 1 disregarded the evidence of the date of communication of the order produced before him by the Petitioner in the form of speed-post tracking slip, postal stamp on the envelope and a specific affidavit filed. At the same time, Respondent No. 1 did not have any contrary evidence to doubt correctness of the evidence produced by the Petitioner. The Application seeking rectification of his order was also dismissed by the Respondent No. 1 by his order dated 24th October 2024. No contrary evidence is produced by Respondent No. 1 to doubt the correctness of the claim of the Petitioner about the date of communication of the Order-in-Original dated 24th April 2023 being 29th April 2023. The difference in the date of the Order-in- Original and the date of receipt as claimed by the Petitioner is reasonable. Even otherwise, under Section 107 (4) of the CGST Act, 2017, Appeal can be filed within the extended period of one month and in the present case, the alleged delay, if any, is only of 4 days. The Impugned Order dated 18th April 2024 along with Rectification Order dated 24th October 2024 set aside - the Petitioner s appeal restored to the file of Respondent No. 1 for consideration on merits. Appeal disposed off.

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• 2025 (4) TMI 730
  Wrongful availment of Input Tax Credit - seeking rectification of the order dated 30th August 2024 - Section 161 of the Delhi Goods and Service Tax Act, 2017 - Opportunity of personal hearing - principles of natural justice - HELD THAT:- As per proviso 3 to Section 161, the rectification order, if allowed in favour of the Petitioner seeking rectification, hearing can be dispensed with. However, if the rectification is to be decided adversely affecting the right of the applicant, the principles of natural justice have to be followed and a hearing ought to be given, if sought. The personal hearing ought to have been afforded to the Petitioner, which has not been done. Accordingly, the order in rectification application dated 28th February, 2025 is set aside. Petition disposed off.

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• 2025 (4) TMI 729
  Availement of excess Input Tax Credit (ITC) - case of the Petitioner is that it had not availed any ITC and it was only due to a typographical error that the said credit was shown as having been availed of in the year 2018-19 - Ex-parte nature of order in original - HELD THAT:- This Court is of the opinion that the Petitioner ought to be relegated to follow the procedure prescribed in paragraphs 4 5 of the Guidelines by Circular No 26/26/2017 dated 29th December, 2017 by making a deposit of 10% of the demanded amount. Accordingly, the Petitioner is given time of eight weeks to make the said pre-deposit in terms of paragraph 4 of the Guidelines. Upon the said pre- deposit being made, as per the Guidelines, the demand which has been confirmed by the Appellate Authority, shall remain stayed until the constitution of the GST Appellate Tribunal. Upon the Appellate Tribunal being notified, the Petitioner is free to file its appeal by following the prescribed procedure. Petition disposed off.

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• 2025 (4) TMI 728
  Vioaltion of principles of natural justice - Petitioner submits that Petitioner never received the SCN and accordingly could not respond to the same - HELD THAT:- This Court is of the view that following the earlier decisions passed by this Court, the Petitioner herein also deserves to be given an opportunity to reply to the Show Cause Notice. The matter is remanded back to the concerned Department for fresh consideration after providing an opportunity of hearing to the Petitioner. The Petitioner is at liberty to file a response to the impugned Show Cause Notice within a period of 30 days - Petition dispsoed off by way of remand.

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• 2025 (4) TMI 727
  Valid service of notice or not - service of the Show Cause Notice (SCN) under the heading Additional Notices on the GST portal constitutes sufficient compliance with the requirements of service under Section 169 of the Central Goods and Services Tax Act, 2017 - principles of natural justice - HELD THAT:- This Court is of the view that following the earlier decisions passed by this Court, the Petitioner herein also deserves to be given an opportunity to reply to the Show Cause Notice. The matter is remanded back to the concerned Department for fresh consideration after providing an opportunity of hearing to the Petitioner. The Petitioner is at liberty to file a response to the impugned Show Cause Notice within a period of 30 days - petition allowed by way of remand.

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• Income Tax

• 2025 (4) TMI 740
  Denial of exemption u/s 11 - assessee s registration u/s 12A of the Act has been cancelled w.e.f. 1st April, 2009 - taxing the receipts of the assessee trust - Addition of T.V. subsidy received from Board of Control for Cricket in India (BCCI) - HELD THAT:- We have perused the decision of the Hon ble Supreme Court in AUDA s case [ 2022 (11) TMI 255 - SUPREME COURT] wherein as observed that In each case and for every year, the tax authorities are under an obligation to carefully examine and see the pattern of receipts and expenditure and the party s contention in this regard are to be considered on their merits. This judgment of the Hon ble Apex Court was available with the Ld. CIT(A) at the time of passing of his appellate order, however, it remained to be considered by him vis- -vis the facts and merits of the assessee s case for the relevant AY 2011-12 under consideration. Thus, in our considered view, the issue(s) raised in various grounds of appeal by the assessee before us needs to be examined in light of the observations of the Hon ble Supreme Court in AUDA s case (supra). We also find some force in the arguments of the Ld. AR that the Ld. CIT(A) has passed a non-speaking order by simply upholding the observations and findings of the Ld. AO without himself going into the merits of the case and has also failed to consider the detailed submissions made by the assessee before him in support of its claim. Appeal of the assessee is allowed for statistical purposes.

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• 2025 (4) TMI 739
  Addition u/s 68 - unexplained loan transactions - A.O. held that it is an arranged financial transaction that there is a pattern of equal and cash/bank deposits immediately prior to the issue of cheques for the alleged unsecured loan transactions - HELD THAT:- All transactions either done through cheques or RTGS payments only and the assessee seems to have maintained good balance in his accounts. Thus the assessee discharged his primary onus of establishing identity, genuineness and creditworthiness of the loan transactions. Whereas the AO mainly on the ground of Investigation Report, the unsecured creditors are shell companies and not responded to the notices issued u/s.133(6) of the Act treated his entire unsecured loans as not genuine and not explained to the satisfaction. The Assessing Officer also held that the lender companies showed meagre income in the ITR cannot be the reasons for making addition in the hands of the assessee. The fact that these creditors shown low income does not imply that they could not advance money to anyone. The financial affairs are not in the control of the assessee and the assessee has nothing to do with the balance sheet or financials or directors of these companies. When the assessee has repaid the loans within a period of 30 to 32 days that too through banking channels, there is no question of making addition u/s. 68 of the Act. See MERRYGOLD GEMS PVT. LTD. [ 2024 (6) TMI 1371 - GUJARAT HIGH COURT] and M/S. OJAS TARMAKE PVT. LTD. [ 2023 (9) TMI 845 - GUJARAT HIGH COURT] - Decided in favour of assessee.

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• 2025 (4) TMI 726
  Penalty u/s 271(1)(c) - mismatch in the figures of book profit - voluntary disclosure of income discrepancies - HELD THAT:- Correct book profit was not only shown in the Tax Audit Report, but it was duly uploaded in the Income Tax Portal and filed before the AO much prior to the case was undertaken for scrutiny assessment and also reported the same on 22-11-2019 while making submission and reiterated on 6-12-2019 as well, therefore, in our considered opinion, it is a case where the assessee came up fairly before the AO correcting the error crept in while submitting the return and revised return that too before initiation of the scrutiny assessment proceedings. Even it is not the case of the Revenue that the appellant/assessee has concealed the income. Once the Tax Audit Report conducted under Section 44AB of the IT Act was filed and it was uploaded in the Income Tax Portal along with the return of income, there is no question of submission of any inaccurate particulars and no question of concealment of income by the appellant herein/assessee. While accepting the appeal of the appellant, the Commissioner of Income Tax (Appeals) has rightly deleted the penalty levied holding that the mismatch in the figures of book profit was a case of feeding mistake and data transmission error and there was no mala fide intention on the part of the appellant being a Government entity. Decided in favour of assessee.

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• 2025 (4) TMI 725
  Addition u/s 68 - unexplained cash credits - various incriminating material and documents were seized during the course of the search and it was found that the said persons were engaged in providing accommodation entries by issuing cheques (pay orders in lieu of cash) to a large number of beneficiary companies - HELD THAT:- Revenue has handed over a tabular statement to indicate that apart from three companies, which had extended credit to the assessee in FY 2005-06 relevant to AY 2006-07, all other companies in respect of which the transactions in FY 2006-07, were found to be non-genuine by the AO are different. A finding as to the genuineness of the companies from whom the assessee had availed credit in the FY 2005-06 relevant to AY 2006-07 cannot be a foundation for a finding that the companies from whom the assessee had availed the credit in FY 2006-07 relevant to AY 2007-08 are genuine. The learned ITAT has not examined the capacity or the creditworthiness of eight companies which were not subject matter of examination in the proceedings relating to the earlier assessment years [AY 2006-07]. Accordingly, the present appeal is allowed and the impugned order to the extent that it relates to AY 2007-08 is set aside. The matter is remanded to the learned ITAT to consider afresh.

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• 2025 (4) TMI 724
  Reassessment proceedings - Internal Audit Party observation relied upon - addition u/s 2(22)(e) - disbursement of the money was in the account of that company though the loan was in the name of the assessee but the company was co-applicant - HELD THAT:- Loan was sanctioned by the bank in the name of the applicant and co applicant of the loan. The loan was disbursed to the company and in turn was transferred to the assessee and therefore, the source needs to be considered. It is not the loan out of the accumulated profit of that company it was the loan wherein the assessee is applicant and the other three were co-applicant. This aspect as argued were not considered even though all the material to that effect was placed on record. The assessment in this case was completed thereafter based on the Internal Audit Party observation the case was re-opened by issue of notice u/s. 148 of the Act and thereby the same was abated on account of the search. The addition so made in the case was on the transaction already on record and not based on any incriminating material found in the search and therefore, considering that aspect of the material also no addition is maintainable considering the decision of case of search assessment addition can only be made based on the incriminating material found. Addition u/s. 2(22)(e) - assessee argued that even the sustained addition to the extent of the profit of the company is required to be deleted because the assessee has received that money on account of the bank loan applied - As is evident from the above bank statement that money so credited in the account of the company on 17.11.2011 is the credit represented by cheque which is reflected in the sanction letter in the name of assessee. Thus, when the money so given to the assessee from the account of the company Millenium Technocraft Colonisers Private Limited is not out of the accumulated profit and thereby it does not attract the provision of section 2(22)(e) of the Act. Therefore, we see no reason to sustain the addition even to the extent of accumulated profit as observed by ld. CIT(A). Based on that observation ground raised by the assessee is allowed. Assessee appeal allowed.

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• 2025 (4) TMI 723
  Denial of Exemption u/s 10(10AA) on account of leave encashment on retirement - CIT(A) upheld the disallowance, holding that the assessee, being a retired employee of a public sector undertaking (SBI), could not be treated as a government employee for the purpose of claiming full exemption - HELD THAT:- Considering the subsequent development and submissions made by the AR, the appeal is dismissed as withdrawn. However, the assessee is granted liberty to restore the appeal in accordance with law, in case any difficulty arises in the matter of refund or any other connected issue.

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• 2025 (4) TMI 722
  Addition u/s 69A r.w.s. 115BBE - cash deposit in the bank account during the demonetization period - assessee made huge cash deposits during the demonetization period and could not explain the source of the same - HELD THAT:- It is common knowledge that people keep certain amount of cash in house for meeting unexpected emergencies. Therefore, in our opinion, neither the entire addition made by the Assessing Officer is justified nor the submissions of the assessee that he had sufficient cash available with him can be accepted outright. Considering the fact that the assessee was declaring reasonable income in the last three years and the bank account also reflects certain withdrawals in the preceding months and as mentioned earlier people do keep certain amount of money for meeting emergencies, etc., therefore, considering the totality of the facts of the case and in the interest of justice, we are of the considered opinion that an amount of Rs. 15 lakhs can reasonably be estimated as available to the assessee as on 21.11.2016 for making the cash deposit during the demonetization period. We, therefore, modify the order of the CIT(A) / NFAC and restrict the addition to Rs. 6,40,780/- by deleting Rs. 15,00,000/-. The grounds raised by the assessee on this issue are partly allowed. Applicability of the provisions of section 115BBE - We find in the case of Nilesh Popatlal Gada [ 2024 (12) TMI 1556 - ITAT PUNE] has held that the provisions of section 115BBE of the Act are applicable to assessment year 2017-18.

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• 2025 (4) TMI 721
  Disallowance u/s 14A r.w.r. 8D - AO had rejected the calculation of the assessee for disallowance u/s 14A of the Act and calculated the said disallowance - AR argued that during the rejection of assessee s calculation related to disallowance u/s 14A, AO had not recorded any satisfaction, while passing the order - HELD THAT:- The assessee earned exempt income during the relevant assessment year and also incurred interest expenditure that is not directly attributable to any specific income. In such circumstances, disallowance under Rule 8D(2)(ii) could be applicable. AO may invoke Rule 8D only upon recording dissatisfaction with the assessee s claim or explanation, as mandated by Section 14A(2). DR has comprehensively discussed the issue, the specific aspect of non-recording of satisfaction by the Ld. AO has not been addressed effectively. This issue is directly covered in the assessee s own case [ 2024 (6) TMI 1451 - ITAT MUMBAI] which in turn is supported by the binding precedent laid down in PCIT-2 vs. Bombay Stock Exchange Ltd. [ 2019 (11) TMI 105 - BOMBAY HIGH COURT] The impugned assessment order is set aside, and the disallowance made under Section 14A is hereby deleted. Assessee appeal allowed.

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• 2025 (4) TMI 720
  Validity of the approval granted u/s 153D - Post search assessment u/s 153A - Additions u/s 56(2)(vii) - HELD THAT:- As on the very same day i.e. 27-12-2019, the draft assessment order was placed/submitted before the Ld. Addl. Commissioner and on the very same day i.e. 27-12-2019, the approval u/s 153D of the Act was granted and eventually on the very same day of granting the approval on 27.12.2019, the AO passed the assessment order under consideration. It is also a fact that the Addl. Commissioner/Approving Authority, has also granted the same approval u/s 153D of the Act, on the very same day, in other 12 cases. Admittedly, from the approval, it is nowhere appearing that what evidence/document/statement/material/ proposed addition(s) etc. were examined by the Approving Authority before granting the approval. It is also not clear, whether the approving authority has applied its mind and on what basis or material the approval was accorded. The aforesaid facts create the suspicion about the validity of the approval. It is the bounden duty of the AO to submit the draft assessment order, well in advance/time, so that approving authority will not face any immense pressure, due to paucity of time. Though the statute has not provided any format for granting an approval but the approval must reflect the basis of the material and reasons, on which the approval is granted. In the instant case, the approval under consideration in not based on examining of any relevant documents and provisions of the Act in the context of the proposed addition and has been accorded in haste and time constrained pressure and therefore lacks application of mind and hence in cumulative effects, the same suffers from perversity and impropriety and consequently un-sustainable. Thus the approval, is declared as invalid in the eyes of law, which would entail the assessment order as invalid being void ab-initio. Addition u/s 56(2)(viia) - shares kept as stock in trade in regular/ normal course of business for trading purposes - purchase of such shares of and the differential amount {of the fair market value and purchase value} - Assessee contented that Assessee company is in the business of trading of shares and the alleged shares have been purchased for the trading purposes only - HELD THAT:- From the definition of capital asset as defined u/s 2(14) of the Act, it is clear that any stock in trade other than any securities referred to in clause b above, consumable stores or raw materials held for the purposes of his business or profession, is not included in the definition of capital asset and the CBDT vide Finance (No.2) Act, 2009, has introduced the provisions of sections 56(2)(vii) as a counter tax evasion mechanism to prevent laundering of unaccounted income but not to transaction made in regular course of business and made applicable only, if an individual or HUF is the recipient but not to a firm or a company and therefore introducing new provision i.e. sub clause (viia) in section 56(2) of the Act, vide Finance Act 2010, firm or a company (not being a company in which the public are substantially interested) were also brought into within its ambit, for making the transactions undertaken, in shares of a company (not being a company in which the public are substantially interested) either for inadequate consideration or without consideration. We are in agreement with Mr. Shah that the stock in trade would not be subjected to rigour provisions of section 56(2)(viia) of the Act and/or the shares held as stock in trade in regular course of business for trading purposes, cannot be subjected to addition with the aid of the provisions of section 56(2)(viia) of the Act. As the Assessee has treated and disclosed the aforesaid shares of the companies as, stock in trade in its financial and it is also a fact that the authorities below neither doubted the financials nor rejected the books of accounts of the Assessee, in any of the provisions of the Act. The Assessee out of three stocks has sold shares of one scrip namely M/s Mecons Commotrade Ltd. Pvt. and therefore this fact also supports the claim of the Assessee qua share trading etc .It is also a fact that the Assessee has treated some of the shares as investment and some of the shares as stock in trade which also goes to show that the Assessee has given reasonable treatment to the respective shares. Further, the provisions of section 56(2)(vii) and 56(2)(viia) of the Act were introduced as tax evasion mechanism to prevent the laundering of unaccounted money but not to tax the transactions entered into, in the normal course of business or treat the profits of which are taxable under specific head of income and it is not the case here, of the Department that the Assessee has made the transactions, as a tax evasion mechanism and laundered unaccounted income. Assessee appeal allowed.

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• 2025 (4) TMI 719
  TP Adjustment - adjustment of 3% as per section 92C and relevant rules - only plea in the present appeal was to restore the matter back to the AO to apply the direction of the DRP to grant adjustment to the arm s length price of the transaction by 3% in terms of section 92C(1) - HELD THAT:- Today, on 26.12.2024, when the matter came up for hearing, the ld.DR fairly conceded that the AO had failed to comply with the direction of the DRP to grant 3% adjustment to the ALP of the international transaction. Accordingly, in view of the above, the matter is restored back to the file of the AO to comply with the direction of the DRP noted at para 6.3.4 of his order as reproduced above in our order.

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• 2025 (4) TMI 718
  Unexplained income - taking sales proceeds as unaccounted and unexplained income - Addition by taking 8% of total turnover as income - HELD THAT:- On this aspect, the assessee has declared the total turnover therefore, merely because of not filing the details of purchase and sales vouchers is not the criteria to say that the assessee s first cash deposit as unexplained is not correct. As per the assessee, she has submitted the cash book and sales vouchers before the ld. CIT(A), on my verification which clearly establish that her turnover is more than the deposits. Therefore, the AO is not correct to declare unexplained cash credit during demonetization period. Hence, direct the ld. AO to delete the addition made by the AO on this account. So far as 8% of the estimation of business of the assessee has no basis and it is AO s mere assumption. Considering the nature of the business of the assessee, its of the considered view that 5% is appropriate to estimate the income of the assessee. Therefore, 5% is to be calculated on the total turnover of the assessee instead of 8%. Grounds raised by the assesese are partly allowed.

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• 2025 (4) TMI 717
  Levy of penalty u/s 270A - Adjustment u/s 143(1)(a) - under reporting of income - disallowances of expenses on which the assessee had failed to deduct TDS,in terms of provisions of section 40(a)(ia) - whether, the disallowance of such expenses now made in assessment framed under section 143(3) of the Act would tantamount to under reporting of the income as per the provisions of section 270A(2)? - HELD THAT:- U/s 143(1)(a) of the Act adjustments to income are to be made only of apparent mistakes, emanating from data furnished in the return itself. Like arithmetical errors, additions/disallowances reported in tax audit report but not considered for computing income and likewise. Such additions on the face of it are due to apparent mistakes while computing taxable incomes. That while otherwise complete disclosure of incomes, additions/disallowances are made but inadvertently they are missed to be considered while computing taxable incomes. Such incorrect reporting by mistake, the law has deliberately and consciously kept out of the scope of levy of penalty treating only incomes assessed over and above that determined u/s 143(1)(a) of the Act as underreported income liable to levy of penalty u/s 270A of the Act. The purport, objective and intention of law, derived from section 270A(2)(a), by treating only income assessed which is greater than income determined u/s 143(1)(a) of the Act as underreported income, is very clear that apparent mistakes in the computation of income are not to be subject to imposition of any penalty. Section 270A(2)(a) of the Act, has to be read likewise that additions which are subject matter of adjustments u/s 143(1)(a) of the Act are outside the purview of being subject to penalty on account of underreporting of income. It is only income determined after scrutiny assessment which qualifies as underreported income . In the facts circumstances of the case, since the addition made to the income of the assessee was an apparent mistake, which was liable to be adjusted in the intimation made u/s 143(1)(a) of the Act, the addition of the same made in the regular assessment would not qualify as under reported income. Having said so, since we have held the impugned income not to qualify as under reported income there is no question of the same qualifying as misreported income, since it is only when the under reported income is in consequence of misreporting that it qualifies as misreported of income - Decided in favour of assessee.

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• 2025 (4) TMI 716
  CPC has not allowed the concessional rate of tax even though the assessee has opted for concessional rate u/s. 115BAA and filed the required form within time - HELD THAT:- The assessee has filed Form-10IC on 15.12.2020 opting for concessional tax rate u/s. 115BAA of the Act. The intimation notice u/s 143(1) for A.Y 2021-22 also clearly mentions at Sr. No.1 that the assessee has opted for concessional tax rate u/s 115BAA of the Act. Therefore, the Ld. CIT(A) was not justified to hold that the assessee has not opted for concessional tax rate u/s 115BAA. We accordingly set aside the order of Ld. CIT(A) and direct A.O to compute the tax at concessional rate as opted by the assessee. Appeal of the assessee is allowed.

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• 2025 (4) TMI 715
  LTCG - Rejection of claim for deduction u/s. 54F - assessee owns more than one residential house on the date of transfer of shares - CIT(A) allowed claim - HELD THAT:- CIT(A) has examined the details of each of the properties referred to by the AO and has given clear cut finding that the has owned only one residential house on the date of sale of shares, meaning thereby, the AO has misled himself in this matter. Before us, the revenue could not contradict the findings so given by the CIT(A). Accordingly, we affirm the order passed by CIT(A) on this issue. Addition made u/s. 68 in respect of sale of shares - assessed the sale consideration of shares received as gift from her son as un-explained cash credit u/s. 68 - CIT(A) deleted addition - HELD THAT:- The assessee has received one lakh shares of the said company from her son by way of gift and the same is supported by the gift deed executed by the son of the assessee. It was received on 27-10-2020. The assessee sold the above shares along with shares held by the assessee subsequently on 09-11-2020. The proportionate sale value pertaining to one lakh shares, which has been assessed by the AO un-explained cash credit. When the above said amount has been received by way of sale of shares and the said shares have been gifted by her son, we are of the view that the Ld.CIT(A) was justified in holding that the sale consideration of Rs. 6.90 crores cannot be considered as un- explained cash credit. Ld.CIT(A) was justified in deleting the addition of Rs. 6.90 crores made by the AO u/s. 68 of the Act. Addition made u/s. 68 in respect of unsecured loans - assessed certain un-secured loans received from the family members as un-explained cash credit u/s. 68 - CIT(A) deleted addition - HELD THAT:- We notice that the assessee has furnished the details of loan account of the above two years and the current year. The above said account statements also been confirmed by M/s. TokershiBhavanji Co. Hence, the repayment of Rs. 19,49,320/- of the amount advanced earlier cannot be considered as a fresh cash credit, assessable u/s. 68 of the Act. With regard to remaining amounts, it was submitted that the same represented school fee pertaining to the school run by the assessee. Those school fee have already been taxed by the AO either in the current year or in the preceding year/succeeding year. Hence, they cannot be added u/s. 68 of the Act. Accordingly we are of the view that the Ld.CIT(A) was justified in deleting the entire addition made by the AO u/s. 68 of the Act. Appeal filed by the Revenue is dismissed.

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• Customs

• 2025 (4) TMI 714
  Smuggling - two kilograms of gold, with Swiss markings - Contraband item - number of material facts as well as the judgments cited were overlooked while arriving at conclusions - reliability of statements - burden to prove - it was held by High Court that the orders of the Appellate Authorities are set aside - HELD THAT:- This Special Leave Petition is disposed off reserving liberty to the petitioner herein to take steps/seek remedies in accordance with law. Application disposed off.

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• 2025 (4) TMI 713
  Rejection of petition - declination to interfere with the challenge to the legality and validity of the show cause notice issued under Section 124 of the Customs Act, 1962 - classification of the exported goods - Pharmaceutical Raw Materials: Sucrose BP - HELD THAT:- Prima facie, it appears that the authority who issued the show cause notice relied on the reply of the DGFT in this regard. According to Mr. Joshi, the issue seems to have been concluded by the authority concerned relying on the reply of the DGFT and issue of show cause notice is just an empty formality - Indisputably, no reply was given to the show case notice. This is exactly what the High Court has observed in its impugned order. In the peculiar facts and circumstances of the case, let the Director General of Foreign Trade look into the representations filed by the petitioner herein and take an appropriate decision in that regard. We order accordingly. The authority concerned shall proceed further with the adjudication once the Director General of Foreign Trade takes an appropriate decision. Petition disposed off.

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• 2025 (4) TMI 712
  Seeking release of the goods seized - Smuggling of Gold - case of the Petitioner is that no Show Cause Notice (SCN) was served upon the Petitioner and no personal hearing was granted - violation of principles of natural justice - HELD THAT:- In view of the declared law by this Court in Amit Kumar v. The Commissioner of Customs [ 2025 (2) TMI 385 - DELHI HIGH COURT] and the judgments which followed the same, such standard form waivers of SCN or personal hearings have no validity in the eyes of law. The impugned Order-in-Original dated 15th January, 2025 is set aside - Petition disposed off.

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• 2025 (4) TMI 711
  Provisional attachment of the Petitioners bank accounts under Section 110(5) of the Customs Act, 1962 - HELD THAT:- The provisional attachment under Section 110 (5) cannot continue beyond the period of one year. Section 110A would come into effect only when a party seeks to raise the provisional attachment of the bank account while the attachments still subsists. Section 110A would have no application where the attachment has ceased to exist because of the provisions of the Section 110 (5) read with its proviso. To put it in other words, once the period of one year has expired as stipulated under Section 110 (5), then one cannot resort to Section 110A to extend the provisional attachment. Once we are of this opinion, we find that the reliefs sought for raising the attachment of the bank accounts of the Petitioners ought to be granted. Conclusion - The provisional attachment of the bank accounts of the Petitioners hereby stands raised. Petition allowed.

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• 2025 (4) TMI 710
  Waiver of the statutory pre-deposit amount required under Section 129E of the Customs Act, 1962 - petitioner s financial incapacity to pay the pre-deposit amount - Penalty u/s 114 and 114AA of the Customs Act, 1962 - HELD THAT:- Section 129E of the Customs Act, 1962, makes it clear that any statutory appeal filed under Section 128 of the Customs Act, 1962, shall not be entertained unless the pre-deposit amount stipulated under Section 129- E of the Customs Act, 1962 is made by the party preferring the statutory appeal. The section says shall , which means the payment of pre-deposit amount is mandatory. The petitioner being a regular importer, it can be inferred that he would have certainly known about the statutory provisions of the Customs Act, 1962, which makes it mandatory for the petitioner to pay the pre-deposit amount as provided under Section 129-E of the Customs Act, 1962. Having not sought for waiver, when the earlier writ petition filed by the petitioner before this Court was disposed of and based on the same, the petitioner had also preferred the statutory appeal, the question of entertaining this writ petition, wherein the petitioner is re-agitating the very same contentions that were raised by the petitioner in the earlier writ petition while he had challenged the very same impugned order in original dated 25.03.2023 does not deserve any merit. Conclusion - Therefore, not only on the ground that the payment of pre-deposit amount for preferring the statutory appeal under Section 128 of the Customs Act, 1962 is mandatory, this Court has also given due consideration to the fact that the petitioner is re-agitating the issue once again as the very same contentions that have been raised in this writ petition, were also raised in the earlier writ petition filed by the very same petitioner wherein this Court had disposed of the said writ petition by granting liberty to the petitioner by directing the petitioner to exercise the statutory appellate remedy available under the Customs Act, 1962. This Court does not find any merit in this writ petition - Petition dismissed.

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• 2025 (4) TMI 709
  Jurisdiction to issue SCN - DRI officials were proper officers or not - Section 28 of the Customs Act, 1962 - HELD THAT:- Reliance was primarily placed upon the Supreme Court decision in Canon India Pvt. Ltd. v. Commissioner of Customs, [ 2021 (3) TMI 384 - SUPREME COURT] , which had held that DRI Officials are not proper officers . In view thereof, the proceedings in the SCN have to continue. Ld. Counsel for the Petitioner submits that he had already filed the reply to the SCN. If any further submissions are to be filed, let them be filed within four weeks before the Adjudicating Authority. Petition disposed off.

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• 2025 (4) TMI 708
  Jurisdiction of officers from the Directorate of Revenue Intelligence (DRI) to issue show cause notices under Section 28 of the Customs Act, 1962 - HELD THAT:- The Orders-in-Original are all appealable orders in terms of Section 128 of the Customs Act, 1962. Accordingly, the Petitioners are relegated to avail appellate remedies before the Commissioner (Appeals). If the appeals are filed by 30th June, 2025, the same shall not be dismissed on the ground of being barred by limitation and shall be considered on merits - petition disposed off.

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• 2025 (4) TMI 707
  Jurisdiction - proper officer to issue SCN - HELD THAT:- Reliance was placed on the Supreme Court decision in Canon India Pvt. Ltd. v. Commissioner of Customs, [ 2021 (3) TMI 384 - SUPREME COURT] which had held that DRI Officials were not proper officers for the purpose of Customs Act, 1962. Thus, DRI officials have now been recognised as proper officers for initiating/conducting proceedings under the Customs Act, 1962. Hence, the present petitions have become infructuous. Petition disposed off.

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• 2025 (4) TMI 706
  Jurisdiction of Directorate of Revenue Intelligence (DRI) officials as proper officers under Section 28 of the Customs Act, 1962, to issue SCN - HELD THAT:- Reliance was placed on the Supreme Court decision in Canon India Pvt. Ltd. v. Commissioner of Customs, [ 2021 (3) TMI 384 - SUPREME COURT] , which had held that DRI Officials were not proper officers for the purpose of initiating/conducting proceedings under Section 28 of the Customs Act, 1962. In view of the above decision vide which DRI officials have now been recognised as proper officers for initiating/conducting proceedings under Section 28 of the Customs Act, 1962, this petition would no longer survive. The show cause proceedings shall proceed in accordance with law. Petition disposed off.

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• 2025 (4) TMI 705
  Levy of penalty - Liability of appellant for evasion of customs duty - appellant s claim is that he merely lent his Importer Exporter Code (IEC) to Mr. Rajat Arora, and was not involved in the import activities - opportunity for crossexamination of two witnesses was not granted - violation of principles of natural justice - HELD THAT:- The Court does not find any question of law that would arise in the present appeal. Moreover, the Appellant has, at various stages, tried to evade the true facts and has taken incorrect pleas before various authorities. Such acts on part of the Appellant also shows that the conduct of the Appellant does not deserve any indulgence - the amounts and penalties, which have been imposed upon the Appellant in the Impugned Order are liable to be upheld. The Appellant, who enjoyed the IEC registration, ought to have acted responsibly and ensured that the same was not misused by any third party. Apart from not being careful about the IEC codes etc., in the present case, this Court is clearly of the opinion that the Appellant and Mr. Rajat Arora were conniving with each other and were fully aware of the transactions and imports that were being undertaken. Their role cannot be delineated and differentiated in the manner that the Appellant seeks to delineate himself. Both were acting in concert with each other, as is clear from the findings of CESTAT. Appeal dismissed.

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• 2025 (4) TMI 704
  Levy of penalties under Section 114(iii) and 114AA of the Customs Act, 1962 - allegedly abetting the submission of false documents leading to the overvaluation and attempted illegal export of goods - HELD THAT:- The department sent a simple letter to the appellant to inquire about receipt of export documents to which he replied as having been received from M/s Mass Shipping Agencies, New Delhi through E-mail. No further investigation seem to have been done at his end to bring out is role in alleged export of goods. The appellant has acted as intermediary in the case who only transmitted the export documents received from M/s Mass Shipping Agency to the CHA for filing the shipping bills with the Customs Authorities. The department has not substantiated charges of abetment or submission of false documents or material to justify penalty upon him under Section 114(iii) and 114AA of the Customs Act respectively. A similar issue was decided by this Tribunal in the case of Bansal Fine Foods Pvt. Ltd. Vs. Commissioner of Customs, Mundra [ 2022 (7) TMI 372 - CESTAT AHMEDABAD] wherein it was held that CHA who filed shipping bills as per documents provided by Indian exporter is not liable to penalty under section 114 and 114AA of Customs Act, 1962 when export consignment was rerouted to another country but ultimately delivered to original consignee. Penalty under Customs Act can be imposed on a person only if some positive Act of his involvement in fraudulent import/export is found with credible evidence. If a CHA fails to fulfill the obligation cast upon him under CBLR, 2018, appropriate action needs to be taken under those regulations. In this case, the appellant is not even a CHA. He just acted as an intermediary to forward the export documents/ KYC etc. received from M/s Mass Shipping Agency to the CHA. As discussed, the department has not adduced any evidence against the appellant establishing abetment in alleged fraudulent activity of the exporter. Also, no evidence has been brought forward to show that the appellant used false and incorrect material in the case which led to confiscation of export goods. What has come out, is that the appellant received KYC documents, export invoices, packing lists, etc. of the exporter from some other Agency on his mail which he forwarded to CHA for filing papers with Customs. Therefore, the appelant cannot be penalised under Section 114(iii) and 114AA of the Customs Act, 1962. Conclusion - The department has not brought out any evidence in this case to sustain allegation against the appellant. Therefore penalty has been imposed on him without credible evidence which is held unsustainable. Appeal allowed.

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• 2025 (4) TMI 703
  Personal Penalty u/s 112 and 114AA - Proper officer - Judicial discipline - Protection of action taken u/s 155 - Proceedings against the appellants are barred by the statutory limitations outlined in Section 155 of the Customs Act, 1962 - actions of the appellants, as officers of customs, could be considered as being done in good faith and in pursuance of the Customs Act, 1962, thus warranting protection under Section 155 or not - HELD THAT:- From the sparseness of judicial precedent as far as application of section 155 of Customs Act, 1962 in quasi-judicial action is concerned, it would appear that such adjudication proceedings, encompassing customs officers, is a recent phenomenon and the rarity of resort in the several decades past is a telling measure of either increasing complicity of officials or unrestrained resort by investigation and, with both from the same stock, is not a good reflection of either. It is of concern that increasing resort may not always be in public interest and, negation at appellate stage notwithstanding, is as good as continuation of damage commenced against officers, as individuals, and, as common weal, to public interest. Customs Act, 1962 offers deployment of section 136 and well as section 132 corresponding to the charges here for prosecuting officers of customs but, as is evident, that would be subject to judicial sieve from the very beginning and neither to be entered into lightly nor retreated from hastily. The law is not an instrument of convenience; flexibility, appropriated for invoking jurisdiction from one provision to the exclusion of other, is nothing but encroachment unless legitimized by good grace in accepting restrictions implicit in the other. The absence of judicial rulings, except the few and of recent vintage, is not an indication that the present appellants, finding themselves in this predicament, are clutching at mere straws unless it can be shown that such proceedings through adjudication are, statistically, a norm and not deviation. Indeed, Learned Special Counsel, in response to a direct query, was unable to substantiate so - as legislative sanction accorded for instituting appellate remedy, through newly minted Tribunal and through the constitutional courts, in 1980 did not consider it necessary to exclude the safeguard enacted in 1962. Section 155 of Customs Act, 1962 are intended as safeguards and are of no less significance to adjudication proceedings. The original authority, with determination of absence of good faith in acts of omission and commission on the part of the appellants, has skirted the template of section 155(2) of Customs Act, 1962 which lacks that motif. The finding is perverse for not only having invoked a test which is in the preserve of judiciary for acceptance of jurisdiction by evaluation of acts for good faith at the threshold in suits, prosecution or other legal proceedings against Central Government, officers of the Government or local authorities but also by implicit acceptance of safeguards as extending to adjudications, by having ventured upon the test of good faith even while avoiding the facts of the dispute necessary to decide the ingress of limitation - Adjudicating authority and appellate authority may choose not be persuaded by judgements that are distinguishable on facts and law but no lower authority may sit in judgement upon any decision of higher authority for chastising or discrediting. That Revenue chose not to challenge the said decisions rendered those to be final and binding on all lower authorities. As the trigger for limitation is from accrual of such cause which is not only a finding on facts but also would need sifting of the investigation process for location of the trigger. While the former of the stipulations in the second of the safeguard is only a question of fact, the argument of Learned Counsel on the manner of reading the conjunction, concatenating the two deadlines, as not necessary and sufficient has effect of adjudging the latter stipulation. Conclusion - i) The procedural safeguards in Section 155 of the Customs Act, 1962, are crucial and must be adhered to before initiating proceedings against customs officers. ii) The absence of compliance with procedural requirements can invalidate proceedings, regardless of the merits of the case. iii) The principles of natural justice must be observed throughout adjudication processes. The appeals are allowed by way of remand to the adjudicating authority.

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• 2025 (4) TMI 702
  Classification of imported goods - wind shield glass set - to be classified under the Customs Tariff Item 70071100 or under the CTH 87089900 - HELD THAT:- As per the reading of descriptions as provided under Import Tariff, Section Notes to Chapter XVII and Explanatory Notes to HSN/CTH 8708, it is found that the goods imported will have the essential characteristic of parts accessories of motor vehicles only when the same are solely or principally used in the said vehicle. The goods as imported by the respondent did not fulfil the description as provided in explanatory notes to CTH 8708 . Moreover, the assessing officer in his findings has not adduced any evidence that the goods imported by the respondent are the parts and accessories of motor vehicles. Thus, as per the Chapter Notes cited, the goods imported by the respondent are excluded from the CTH 8708. It is observed that as per the Explanatory Notes to Chapter Heading 7007, Toughened (tempered) Glass are specifically covered under the CTH 7007. In vehicles, such windshield glasses are fixed for protection of the passengers. These glasses are used in heat chambers as well as in cubicles set up in snowy areas. It has multiple uses. The Department sought to classify the goods under CTH 8708 as parts of vehicles by alleging that these are usable in vehicles as well. However, it is not necessary that all cars would have windshields. It is further observed that wind screens were included in the CTH 87082200 after the amendment brought in finance Bill 2001. The respondent referred the decision of the Tribunal in the case of Indian National Shipowners Association versus Union of India [ 2009 (3) TMI 29 - BOMBAY HIGH COURT] , wherein it has been held that introduction of new entry under the provisions of statute denotes that such tariff was not previously applicable. Thus, prior to amendment brought in by the Finance bill 2001, the impugned goods wind shield glass set were not classifiable under the CTH 8708 as motor vehicle parts. As the CTH 70071100 specifically covered the impugned goods imported by the respondent during the period under dispute, there are no infirmity in the impugned orders passed by the Ld. Commissioner (Appeals). Conclusion - The goods were appropriately classified under CTI 70071100 during the relevant period. The impugned orders upheld - appeal of Revenue dismissed.

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• 2025 (4) TMI 701
  Denial of benefit of Notification No.30/2004-CE dated 09.07.2004 - amendment of Bills of Entry under Section 149 of the Customs Act, 1962 - the self-assessment of the Bills of Entry at the time of clearance, not challenged - HELD THAT:- Admittedly, in this case, the appellant has not challenged the Bills of Entry, but they sought amendment under Section 149 of the Customs Act, 1962, which is very much impressed upon the observations made by the Hon ble Apex Court in the case of ITC Ltd. [ 2019 (9) TMI 802 - SUPREME COURT (LB)] , wherein the Hon ble Apex Court held that the assessment order has to be modified under Section 128 of the Customs Act, 1962 or any other relied upon provisions of the Act i.e. Section 149 of the Customs Act, 1962. Admittedly, the appellant has claimed for modification of assessment under Section 149 of the Act, the same is available to the appellant. Therefore, the appellant is entitled for amendment in the Bills of Entry. The benefit of Notification was admitted by the adjudicating authority, but held that the same cannot be given to the appellant only because of the reason that they have not challenged the assessments of Bills of Entry. The issue has been examined by this Tribunal in the case of Artex Textile Private Limited [ 2023 (9) TMI 1268 - CESTAT AHMEDABAD] , wherein this Tribunal observed that the appellant in principle entitle for exemption Notification as the condition of non availment of Cenvat Credit need not to be satisfied by the importer in respect of imported goods. The same has been clarified by the Central Board of Excise and Customs vide Circular No. 1005/12/2015-CX dated 21.07.2015. Conclusion - The appellants are entitled for the benefit of Notification No.30/2004-CE dated 09.07.2004 for the imports made prior to 17.07.2015. Appeal allowed.

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• Corporate Laws

• 2025 (4) TMI 700
  Violation of principles of natural justice - opportunity of hearing of impleadment application - impleadment application was never heard before it being reserved alongwith the main Company Petition for the purposes of it to be disposed of in a single combined order - HELD THAT:- The argument of the learned senior counsel for the appellant is not convincing that as the appellant claims a right to receive shares in Respondent No.1 company hence he should be impleaded in main Company Petition filed by Respondent No.1 against Respondent No.2. Admittedly the Company Petition is not a lis between two brothers viz. Mr. Suresh Kumar Khosla and Mr. Ashok Kumar Khosla. The argument which the appellant is trying to develop is in case he succeeds to get shares in Respondent No.1 company and then if not impleaded in this Company Petition 137/2019 then it could be decided without giving him an opportunity of being heard. This Company Petition is not a lis between the two brothers. Further without adverting to the merits of the impleadment application, suffice is to say the impugned order dated 08.01.2025 does not in any manner dilute any right of the appellant and is only a procedural order. Admittedly the main Company Petition was filed in the year 2015 by Respondent No.1 against Respondent No.2 on the ground Respondent No.1 company had invested Rs.144 crore in Respondent No.2 s business and it holds 47% shares in Respondent No.2 and that Respondent No.2 has engaged in oppression and mismanagement. The impugned order none of the rights of any of the parties were decided and it was merely a procedural order recording filing of notes of submission. The procedural order are not appealable orders per Central Bank of India Vs Gokal Chand [ 1966 (9) TMI 142 - SUPREME COURT ]. The appellant had failed to challenge the main order dated 18.12.2024 which records conclusion of hearing of arguments and fixing the matter for 08.01.2025 for procedural compliances viz. filing of notes of submission. Rather the appellant had complied with order dated 18.12.2024 by filing her notes of submission. Hence after compliance the appellant has no right to challenge the impugned order. Conclusion - The impugned order is nothing but a consequential order and in the absence of challenge to the main order dated 18.12.2024, the challenge to procedural order is not maintainable. Appeal dismissed.

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• Insolvency & Bankruptcy

• 2025 (4) TMI 699
  Seeking permission to withdraw the additional affidavit sworn - HELD THAT:- The power to suspend is bestowed by Regulation 23A of the Insolvency and Bankruptcy Board of India ( Model Bye-Laws And Governing Board of Insolvency Professional Agencies ) Regulations, 2016, read with Section 140 of the Insolvency and Bankruptcy Code, 2016. SLP disposed off.

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• 2025 (4) TMI 698
  Effect of approval of Resolution Plan upon the decree in favour of Respondent No.1 in a case where admittedly the Respondent No.1 s claim is not part of Resolution Plan due to failure of Respondent No.1 to lodge its claim with the Resolution Professional - HELD THAT:- Under Section 13 of IBC, upon admission of the application, the Adjudicating Authority is required to cause a public announcement of the initiation of corporate insolvency resolution process and call for submission of claims under Section 15 of IBC. The public announcement to specify the last date for submission of claims. Section 30 of IBC governs the contents of Resolution Plan and specifies that the Resolution Plan shall provide for payment of debts and Section 31 of IBC provides for approval of the Resolution Plan by the Adjudicating Authority. The issue is no longer res integra and all claims which are not part of the Resolution Plan shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect of any such claim. As admittedly the Respondent s claim was not part of Resolution Plan, the claim stood extinguished upon approval of the Resolution Plan on 1st January, 2021 and an embargo is placed on initiation or continuation of any proceedings for executing the decree. As the Respondent No.1 s claim did not form part of the Resolution Plan due to failure of the Respondent No.1 to lodge its claim with the Resolution Professional, upon approval of the Resolution Plan by NCLT vide order dated 1st January, 2021, the debt stood extinguished. Upon extinguishment of debt, no right vests in the Respondent No.1 in respect of the bank guarantees or to oppose the release of bank guarantees. Conclusion - Respondent No.1 s claim was extinguished upon the approval of the Resolution Plan, and the bank guarantees should be released to the Appellant. The Interim Application stands allowed.

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• 2025 (4) TMI 697
  Time limitation for filing application under Section 9 of the IBC, 2016 - application under Section 9 of the IBC, 2016 was filed by the Operational Creditor on 22.02.2024 which is beyond the limitation period of 3 years, which is to be counted from the date of default - HELD THAT:- The issue of limitation was not taken as defence before the Ld. NCLT and has been taken as a defence in this appeal proceedings for the first time. Since the objection regarding limitation goes to the root of the matter and touches upon the jurisdiction of the Adjudicating Authority, we have considered it during the present proceedings. Since this issue was raised for the first time, the Operational Creditor is fully justified in placing on record the letters dated 16.04.2018, 03.01.2019 and 22.12.2021 issued by the Corporate Debtor to the Operational Creditor acknowledging the debt and requesting for more time to make the payment. The issuance of these letters are not disputed before us rather the argument is only such letters were not placed before Ld. NCLT. The last of the written acknowledgment in the form of letter is dated 22.12.2021. The application under Section 9 has been filed by the Operational Creditor on 22.02.2024, which is within three years of the last acknowledgment of debt. It is trite law that acknowledgment of debt in writing extends the limitation period per Section 18 of the Limitation Act. We hold that the application under Section 9 was filed by the Operational Creditor before the Ld. NCLT within the limitation period - there are no reason to interfere in the reasoned order of the Ld. NCLT in admitting the Corporate Debtor into CIRP, consequently, the Company Appeal (AT) (Ins.) 1285 of 2024 is dismissed. There are no evidence regarding any connivance between the Operational Creditor and Corporate Debtor has been furnished by the Appellants. In fact, the Ex-Director of Corporate Debtor has filed Company Appeal challenging the order of admission under Section 9 of the IBC, 2016 passed by the Ld. NCLT. Conclusion - i) The application under Section 9 is filed within the limitation period. ii) The NCLT s decision to admit the Corporate Debtor into CIRP upheld, finding no pre-existing dispute regarding the quality of work. Appeal dismissed.

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• PMLA

• 2025 (4) TMI 696
  Seeking grant of bail - Money Laundering - predicate offence - proceeds of crime - offence under Sections 420, 467, 471, and 120B of the Indian Penal Code, 1860, and Sections 7 and 12 of the Prevention of Corruption Act, 1988 - HELD THAT:- As far as the prosecution under the Prevention of Money Laundering Act, 2002 (PMLA), the appellant has undergone incarceration for a period of 9 months. The case of the prosecution appears to be that the proceeds of crime were transferred in the accounts of private limited company with which the appellant is associated and thereafter, there were further transfers at his instance. There are 44 witnesses cited in the complaint and supplementary complaints. Charge is not yet framed. As of today, there are 17 accused and even hearing on charge has not taken place. Therefore, there is no possibility of even commencement of the trial in near future. Considering the peculiar facts of the case and the observations made in the earlier order in the predicate offence, it is inclined to enlarge the appellant on bail. Appeal allowed.

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• 2025 (4) TMI 695
  Money Laundering - duration for which the order of attachment, retention, or freezing of property, passed by the Adjudicating Authority under sub-Section (3) of Section 8 of the Prevention of Money Laundering Act, 2002 (PMLA) - period for which the order of attachment or retention or freezing passed by the Adjudicating Authority under sub-Section (3) of Section 8 will continue to operate - HELD THAT:- There is no dispute that the complaint is based on ECIR dated 17th March, 2017 in which the respondent was shown as one of the accused. Moreover, clause (a) will apply during the continuation of the proceedings relating to an offence under the PMLA in a Court. There is no dispute that when an order under Section 8(3) was passed, the proceedings of a complaint under Section 44 of the PMLA was pending before the Special Court and cognizance of the offence under Section 3 of the PMLA was taken on the basis of the complaint. For attracting clause (a), it is enough if a complaint alleging commission of offence under Section 3 of the PMLA is pending. It is not necessary for the applicability of clause (a) that the person affected by the order under Section 8(3) must be shown as an accused in the complaint. The complaint under Section 44 will always relate to the offence under Section 3 punishable under Section 4 of the PMLA. The order of cognizance is of the offence and not of the accused or the offender. Obviously, the amended clause (a) was not applicable when the order dated 4th April, 2018 was passed under Section 8(3). Even assuming that the amended clause (a) was applicable, even after completion of investigation for 90 days, the order under Section 8(3) would continue to operate as the complaint remained pending. Therefore, the Appellate Tribunal as well as the High Court have committed an error and both orders deserve to be set aside. Conclusion - The original provision of Section 8(3)(a) of the PMLA, as it existed before the amendment on 19th April, 2018, applied to the order in question. The impugned judgment and order dated 16th February, 2022 of the High Court and the impugned order dated 25th April, 2019 passed by the Appellate Tribunal set aside - appeal allowed.

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• 2025 (4) TMI 694
  Money Laundering - Judicial interpretation and consideration - whether it is obligatory for the arresting officer / agency to produce the arrested person before the nearest Magistrate within 24 hours of his arrest or the term nearest Magistrate extends to jurisdictional Magistrate in relation to production of the accused within 24 hours of his arrest? - HELD THAT:- Before search and seizure, the authorised officer shall have the reasons to believe about the existence of clauses (i) to (iv) of Section 17(1) of the PMLA. Subsequent search and recovery of tainted money, records or documents emboldens the authorized officer to arrest the offender in terms of Section 19 (1) of the PMLA. The petitioner has not disputed that the arresting officer recorded reasons for such believe under Section 19 (1) of the PMLA in black and white, prepared and served copy of ground of arrest to the accused and entire fact was elaborately stated in the remand order for consideration of the learned CJM, Patna. The impugned order was passed on the basis of the application filed by the ED and the documents regarding reasons to believe grounds of arrest etc. Therefore, failure on the part of the learned Chief Judicial Magistrate to state the magic word reasons to believe contemplated in Section 19 (1) of the PMLA ought to be considered as an inadvertent omission and not an error which touches the root of the case. It will not be out of place to mention here that the petitioner did not make any prayer for issuance of writ in the nature of habeas corpus. Therefore, this Court does not have any opportunity to deal with such an issue. Only issue which has been raised by the petitioner in course of his elaborate argument is that the detention of the accused is illegal being violative of Articles 21 and 22 (2) of the Constitution of India and Section 187 of the BNSS. Requirement of production of the accused before the nearest Magistrate in the locality where his arrest comes into play when a person who after arrest is required to be produced before the jurisdictional Judicial Magistrate is detained in a place which is far away from that jurisdiction and therefore cannot be produced before the jurisdictional Magistrate within 24 hours as mandated both by Article 22 (2) of the Constitution and by Section 57 of the Code of Criminal Procedure, now Section 58 of the BNSS. In such circumstances, he will be produced before the nearest Judicial Magistrate together with a copy of the entries in the diary. Therefore, even before a Magistrate before whom a transit remand application is filed, the mandatory requirement of Section 167 (1) Cr.P.C., now Section 187 of BNSS, is that a copy of the entries in the case diary should also be produced. It is on the basis of the entries in the case diary, under Section 167 (2), such nearest Judicial Magistrate while passing an order authorizing detention of person arrested for a term not exceeding 15 days in a whole. Where he has no jurisdiction to try the case and he finds further detention unnecessary, he may order the accused to be produced before the Jurisdictional Magistrate. In the instant case, the accused was produced within 24 hours of his arrest. Therefore, the requirement of his production before the nearest Magistrate of the place of arrest was not mandatory. The right of an accused rests on the Constitutional and Statutory requirement of his production before the Magistrate within 24 hours. If the arresting officer finds that he may be produced before the jurisdictional Magistrate within 24 hours, there is no necessity to produce the accused before the nearest Magistrate where he is arrested. The fundamental right of the accused is said to be violated if he is detained for more than 24 hours without being produced before the Magistrate. Conclusion - i) The nearest Magistrate in Article 22(2) does not exclusively mean the geographically closest Magistrate but includes the jurisdictional Magistrate if production within 24 hours is feasible. ii) The writ jurisdiction is not applicable to challenge remand orders unless there is a clear violation of constitutional or statutory rights. iii) The remand order issued by the CJM, Patna, is valid, as it complied with the necessary legal requirements under the PMLA. Petition dismissed.

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• 2025 (4) TMI 693
  Money Laundering - predicate offence - provisional attachment order - conspiracy between the accused and officials of NSE which resulted in undue gain to the appellant Company and undue loss to the NSE - whether an offence under section 420 IPC is made out or not? - HELD THAT:- In the instant case, the work assigned to the appellant was not constitutionally permissible because it effected privacy of the employees guaranteed under Article 21 of the Constitution of India. Huge amount of 4.54 crore was yet paid with dishonest intention to the benefit of the appellant Company and with wrongful loss to the NSE. Despite specific allegation to this effect in the FIR, the argument was made that the offence under section 420 is not made out. If the order of the High Court on the bail application is also taken note of, an opinion in favour of the appellant is found but therein the allegation of wrongful loss to the NSE and wrongful gain to the Company in connivance of each other was not brought to the notice of the court. It is alleged to be a case of cheating in connivance of the top officials of the NSE. If the entire FIR is looked into, the serious allegation of connivance of top official of NSE with the appellant Company has been made. The learned representative appearing for the appellant could not disclose as to how NSE could gain out of the work assigned to the appellant for a sum of Rs. 4.54 crore. The allegation otherwise refers to the position of Sanjay Pandey who remained the IPS Officer and Commissioner of Police and established the Company taking his mother (Smt. Santosh Pandey) as Director where even Directors were changed from time to time. All these facts were not brought to the notice of Delhi High Court. The perusal of the FIR discloses the allegation of wrongful gain to the appellant Company to the tune of Rs. 4.5 crores and wrongful loss to the NSE. The gain and loss has been quantified and made in terms of the money and not on account of the breach of confidentiality and privacy of the employees of NSE, rather, it was a separate part of allegation than the allegation for wrongful loss to the NSE and wrongful gain to the appellant for a sum of Rs. 4.5 cr. which has not been referred to, rather brought to the notice of the Delhi High Court in the bail application where order is in terms of reply given by the respondents before the High Court. Conclusion - i) The appellant s actions constituted cheating under Section 420 IPC, as there was a dishonest intention to cause wrongful loss to NSE and wrongful gain to the appellant. ii) The appellant s conduct fell within the definition of money laundering under Section 3 of the PMLA, as the proceeds from the NSE were projected as legitimate income, constituting proceeds of crime. There is no case in favour of the appellant and the appeal is accordingly dismissed.

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• 2025 (4) TMI 692
  Money Laundering - attachment of properties despite the moratorium imposed under Section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC) - offence under Section 120-B read with Section 420 of IPC and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988 - precedence of provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) over the PMLA - HELD THAT:- Section 14 of IBC 2016 does not bar attachment of the property under the Act of 2002. It is not required to go deep on the issue because it has been settled by the Delhi High Court in the case of Rajiv Chakraborty Resolution Professional of EIEL Vs. Directorate of Enforcement [ 2022 (11) TMI 600 - DELHI HIGH COURT ] where it was held that moratorium under section 14 of IBC 2016 does not bar proceeding of attachment under the Act of 2002. Accordingly, the issue raised by the appellant cannot be accepted. Perusal of Section 32A of the IBC, 2016 reveals non- obstante clause to give overriding effect to the provision. Sub-Section (1) to Section 32A provides that liability of a corporate debtor for an offence committed prior to the commencement of Corporate Insolvency Resolution Process shall cease and the corporate debtor shall not be prosecuted for such an offence from the date of Resolution Plan is approved by the Adjudicating Authority under Section 31 if the resolution plan results in change in the management or control of the corporate debtors to other persons which has been narrated in sub-section(1) of Section 32A. The approval of the resolution plan should result in the change in control of the corporate debtor to a person who was not a promoter in management and control of corporate debtor or related party and a person with whom the relevant investigating authority has on the basis of material in their possession reason to believe that he had abetted or conspired for the commission of offence and has submitted or filed a report or a complaint to the relevant statutory authority or Court. If the change results in control of the corporate debtor to a related party, then even approval of resolution plan under section 31 of IBC would not allow attachment of the property. We find no pleading or material to satisfy conditions given under clause (i) and (ii) to sub-section (2) of 32A of IBC to seek release of the property. Thus, for these reasons, it is found that without making out a case under Section 32A of the IBC, a challenge is made to the attachment. A perusal of Section 26E of SARFAESI Act, 2002, does not provide an overriding effect to all the statutes rather it is limited in operation. The provision does not refer to and bar action under the Act of 2002. The non-obstante clause otherwise apply when there is conflict between two provisions and not otherwise. The amending Act 2016 does not affect the proceedings under the Act of 2002. Thus, we do not find any substance in the argument in reference to it also. In the light of discussions made above, there are no reason to cause interference in the order. Conclusion - i) The moratorium under Section 14 of the IBC does not bar attachment proceedings under the PMLA, as the two statutes serve different purposes. ii) Section 32A of the IBC provides immunity only when a resolution plan is approved, and specific conditions are met, which were not satisfied in this case. iii) Properties acquired before the crime can be attached under the PMLA if they are equivalent in value to the proceeds of crime. iv) The SARFAESI Act does not take precedence over the PMLA, as the latter addresses the confiscation of proceeds of crime, a distinct legislative objective. Appeal dismissed.

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• Service Tax

• 2025 (4) TMI 691
  Availment of CENVAT Credit after laps of six months/one year during the relevant period - HELD THAT:- If the period permissible to issue show-cause-cum-demand notice is taken into consideration vis. a. vis. provision available under Section 73(1) of the Finance Act, 1994, it is service of notice , from which date computation of period of limitation is to be counted backward, and in so doing, there will be no hesitation on the part of this Bench to give a finding that for the period from April, 2013 to September, 2014, the demands are barred by limitation, though Appellant had also contested invocation of extended period on other justifiable grounds. Admittedly, Appellant had not shown in its periodic ST-3 Returns that it had adjusted the available CENVAT Credits towards discharge of Service Tax liability but every payment of balance tax that was made in cash was admittedly the exact differential amount between tax dues and CENVAT Credit utilised. This being the facts on record, there is no point as to why periodic showcause notices with invocation of extended period was to be issued which is not justifiable after issue of the first show-cause notice on the same ground. Be that as it may, this Tribunal is consistent in its finding that in such a scenario, if CENVAT Credit utilisation is properly reflected in the books of account of Assessee-Appellant and in other related documents, mere non-discloser of the same in ST-3 Returns would not permit the Respondent-Department to demand the same again and in carrying forward the judicial precedent set by this Tribunal. Conclusion - i) The demands for Service Tax for the periods 2013-14 and April 2014 to September 2014 are barred by limitation as per Section 73 of the Finance Act, 1994. ii) The Appellant s failure to reflect CENVAT Credit in the ST-3 Returns does not invalidate its utilization if properly documented in the books of account. iii) The Appellant s utilization of CENVAT Credit is permissible under the CENVAT Credit Rules, 2004, despite non-reflection in the ST-3 Returns. The order passed by the Commissioner of CGST CX, Thane is hereby modified to the extent of dropping the demand of Rs.8,51,206/- and Rs.19,01,040/- for the period 2013-14 and 2014 to June, 2017 respectively alongwith its corresponding interest and penalties including penalty of Rs.10,000/- imposed under Section 77 of the Finance Act, 1994 - Appeal allowed.

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• 2025 (4) TMI 690
  Liability of appellant, a sub-contractor, to pay Service Tax for services rendered to the main contractor when the main contractor has already paid Service Tax on the entire value of the service - extended period of limitation - Levy of penalty - Demand of service tax on works contract service rendered by the appellant to M/s. DVC in their construction of store shed with CGI Sheet Roof and to M/s. Paharpur Cooling Towers Limited in their construction of Shuttering, Reinforcement and Concreting work - Demand confirmed @4.12% for the works contract service rendered. Liability of appellant, a sub-contractor, to pay Service Tax for services rendered to the main contractor when the main contractor has already paid Service Tax on the entire value of the service - HELD THAT:- The said issue has already been clarified by the Board vide Circular No. 96/7/2007-S.T. dated 23.08.2007 at Point No. 999.03/23-8-07, where it is clarified that even if the main contractor pays Service Tax on the full amount, the sub-contractor shall remain liable to pay Service Tax for the services rendered by them to the main contractor. Extended period of limitation - penalty - HELD THAT:- The entire issue is revenue neutral as the main contractor will be eligible to avail CENVAT Credit of the service tax paid by the sub-contractor. Thus, there is no intention to evade payment of Service Tax existing in this case. In these circumstances, the demand of Service Tax confirmed by invoking the extended period of limitation is not sustainable. Accordingly, the demand confirmed under this category is set aside by invoking the extended period of limitation and uphold the demand within the normal period. No penalty is imposable on the demand confirmed for the normal period of limitation. Demand of service tax on works contract service rendered by the appellant to M/s. DVC in their construction of store shed with CGI Sheet Roof and to M/s. Paharpur Cooling Towers Limited in their construction of Shuttering, Reinforcement and Concreting work - HELD THAT:- The appellant has agreed their service tax liability and raised the bill with Service Tax @ 4.12%. We agree with the submission of the appellant that they have rendered service with materials and hence service tax is liable to be paid @4.12% only for the works contract service rendered by them to the above clients and therefore, we hold that the appellant is liable to pay service tax @4.12 % claimed by them from their clients. In this regard, it is observed that even when they collected Service Tax in the bills raised, the appellant has filed nil return. Thus, suppression of fact with intention to evade the tax stands established in this case and hence, the extended period has been rightly invoked to demand Service Tax on this issue - penalty also set aside. Demand confirmed @4.12% for the works contract service rendered - HELD THAT:- The appellant has claimed the service tax from the clients and not paid the same in the Government account. It is also found that the appellant has not filed the ST-3 returns and disclosed the taxable value received by them. Even when they filed returns, they have filed nil returns. Even for the period when they collected Service Tax from their customers, they have filed Nil returns. This establishes the intention of the appellant to evade service tax. Since, the appellant has not paid the service tax claimed by them to the exchequer, the suppression of fact with intention to evade the tax is established. Accordingly, the appellant is liable for penalty equal to the Service Tax demand confirmed on this count. Conclusion - i) In respect of the work contract service rendered to M/s. Bridge and Roof Co. (I) Ltd. in West Bengal, the demand confirmed under this category is set aside by invoking the extended period of limitation and the demand within the normal period is confirmed. No penalty is imposable on the demand confirmed in this regard. ii) Regarding the works contract service rendered by the appellant to DVC and to Paharpur Cooling Towers Limited, it is held that the appellant is liable to pay service tax @4.12 %, which they have claimed from their clients. The appellant is liable to pay penalty equal to the tax confirmed in this regard. iii) For the purpose of quantifying the demand of service tax and penalty confirmed in this order, the matter is remanded back to the adjudicating authority. Appeal disposed off by way of remand.

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• Central Excise

• 2025 (4) TMI 689
  Activity amounting to manufacture - activity of packing and labeling tyre O rings by the appellants - HELD THAT:- The product O rings has been specifically mentioned in Chapter Tariff Item 4016 93 20 as Rubber rings (O-ring) . The O rings are also classified under Chapter 87, in the circumstances, when those were used as parts, components and assemblies of automobiles . The O rings dealt with by the appellants in this case are not exclusively usable only in automobile industries, as the same can also be used for other purposes. The said O rings are not confined as parts, components and assemblies of automobiles industry only. Thus, it is agreed with the order of the original authority, who had classified the product under Chapter 4016. Further, mere packing of the O rings and putting of label thereon shall not amount to manufacture, inasmuch as no distinct and identifiable product emerges as a result of process of such packing or putting the logo thereon. Conclusion - The appellants are not liable to pay central excise duty in respect of the tyre O rings removed from the factory. The impugned order is set aside - appeal allowed.

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• 2025 (4) TMI 688
  Activity amounting to manufacture - exemption under Notification No. 88/1988-C.E., dated 01.03.1988 - products repacked by the appellants qualify as Synthetic Detergents or not - activity of repacking bulk goods into retail packages, with the addition of materials such as fragrances and colors - HELD THAT:- On perusal of the certificate dated 31.05.2012 furnished by the Chemical Examiner Gr.I, it is found that the said laboratory has confirmed the composition of the product as Organic Surface Active Agents, Fragrances and Additives. Since, those materials were used by the appellants in their factory while undertaking the activities of repacking of the purchased goods from bulk to retail packs, it is opined that they are confirming to the HSN explanatory notes, in order to fall within the scope and ambit of Chapter sub-heading 3402 90 as claimed by them. Conclusion - Since, the products in dispute are confirming to Synthetic Detergents as per the HSN explanatory notes, the benefit claimed by the appellants under Notification dated 01.03.1988 should be available to them for non-payment of Central Excise duty in respect of the clearances made by them to the Khadi and Village Industries. The impugned orders, to the extent the adjudged demands are confirmed therein against the appellants are not sustainable and as such, are liable to be set aside - appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (4) TMI 687
  Dismissal of the appeal against the levy of VAT @ 13.75%, as against the claim of 5% - Capital goods or not - failure to appreciate that mechanical bodies and pre-fab shelters, sheets, metals, parts etc. is capital goods and taxable @ 5% - applicability of residual entry when once good falls under any of Harmonized System of Nomenclature (HSN) classification - levy of penalty is totally against the basic principles of interpretation of provision of Act and law - HELD THAT:- It would be noticed that the goods manufactured by the petitioner do not fall within the definition of capital goods, therefore, these goods cannot be charged @5% under Part-II- A of Schedule A and are required to be charged @13.75% of Part-III of the above schedule. Therefore, the authorities below have rightly held the petitioner to be liable to pay an additional demand in respect of the differential amount of VAT @8.75% for the year 2012-13 and 2013-14 upto 30.06.2013. Additionally, it is found that the petitioner while making a declaration in form VAT-XXVI-A had described the goods as sheet metal parts and was thus rightly assessed under the residuary articles as it was the petitioner s case itself that goods supplied by him were highly specialized goods made to order and, therefore, in this manner, while not mentioning the same in the invoice and giving it a different nomenclature, the petitioner obviously has concealed the particulars of sale of these goods and had also furnished false and incorrect information in his returns as well as in the declarations submitted by him in form VAT-XXVI-A. Conclusion - The goods manufactured by the petitioner do not fall under the capital goods so as to attract tax @5% and were rightly taxed under the residuary entry. The authorities below have correctly interpreted the provisions of the Act and law and thereby rightly imposed not only the tax liability, but also the penalty upon the petitioner. Petition dismissed.

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• Indian Laws

• 2025 (4) TMI 686
  Dismissal of application filed by the petitioner under Section 156 (3) of the Code of Criminal Procedure, 1973 - whether the petitioner having already availed the remedy of revision should be allowed to take recourse to Section 482 of the CrPC as a substitute for initiating a second revisional challenge which is clearly barred under Section 397 (3) of the CrPC? - HELD THAT:- While it is settled law that a second revision cannot be filed in terms of the bar under Section 397 of the CrPC, the inherent power of this Court under Section 482 of the CrPC has a wide ambit and can be exercised in the interest of justice. It is the case of the petitioner that the complaint discloses commission of cognizanble offences and it was thus incumbent on the police officers as well as the Courts below to direct registration of FIR. Reliance has been placed on the case of case of Lalita Kumari v. Govt. of U.P. [ 2013 (11) TMI 1520 - SUPREME COURT ]. The Hon ble Apex Court in the said case has categorically held that FIR ought to be registered by the police when the allegations clearly disclose commission of a cognizable offence. The Magistrate, after application of mind, can also decide to take cognizance and proceed under Section 202 of the CrPC instead of issuing directions under Section 156 (3) of the CrPC. In the present case, the learned Trial Court has straightaway taken cognizance under Section 190 (1) (a) of the CrPC instead of ordering an investigation under Section 156 (3) of the CrPC. - It is well settled that for the same set of facts, parallel proceedings, seeking both civil and criminal remedies, can continue simultaneously. Thus, merely because a civil remedy is available to a litigant, the same cannot preclude the continuance of criminal proceedings. For exercising powers under Section 156 (3) of the CrPC and directing the registration of an FIR, the Magistrate needs to ensure that a cognizable offence is disclosed from the allegations mentioned in the application and the essential elements of the alleged offences thereof are prima facie satisfied. Apart from the same, the Magistrate also needs to satisfy himself as to whether intervention of police is required and if the complainant will not be in a position to adduce the relevant evidence without assistance of police. It is apparent that the petitioner is merely seeking the assistance of the police to conduct a fishing and roving inquiry. As has been noted by the learned Trial Court as well as the learned Revisional Court, all pertinent facts and evidence are within the petitioner s knowledge and reach, and it can present such information during the inquiry conducted by the learned Trial Court pursuant to Section 200 of the CrPC. Given these factors, the need for police involvement in evidence collection appears to be minimal, as the complainant is well-equipped to facilitate the presentation of evidence on its own behalf - when the allegations are not particularly severe, and the complainant already possessed sufficient evidence to support their claims, there may be no necessity to pass orders under Section 156 (3) of the CrPC. Conclusion - In the instant case, this court is of the opinion that no exceptional circumstances have been presented to warrant the exercise of its extraordinary jurisdiction under Section 482 of the CrPC. There is no indication of any miscarriage of justice or legal irregularity in the proceedings undertaken by the two lower courts, and the petitioner has not been able to point out any such deficiencies. There are no infirmity in the impugned judgment and the same cannot be faulted with.

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• 2025 (4) TMI 685
  Validity of SCN - correctness of legal notice issued u/s 138(b) of the Negotiable Instruments Act, 1881 (NI Act) - the inclusion of an additional demand beyond the cheque amount, thereby invalidating the proceedings under Section 138 of the NI Act - HELD THAT:- The Hon ble Supreme Court in Suman Sethi Versus Ajay K. Churiwal and another, [ 2000 (2) TMI 822 - SUPREME COURT] has laid down the legal test for determining the validity of a demand notice under Section 138 of the NI Act by holding that If in a notice while giving the break up of the claim the cheque amount, interest, damages etc. are separately specified, other such claims for interest, cost etc. would be superfluous and these additional claims would he severable- and will not invalidate the notice. If, however, in the notice an omnibus demand is made without specifying what was due under the dishonored cheque, notice might well fail to meet the legal requirement and may be regarded as bad. From the above pronouncement, it is evident that a notice is legally valid as long as it specifies the cheque amount separately and any additional claim, such as interest or costs, is severable. Turning to the facts of the present case, a perusal of the legal notice (Annexure P-3) demonstrates that it explicitly demands the cheque amount of Rs.3 lakhs and separately specifies an additional amount of Rs.22,000/- as cost of the notice. Since the additional demand is severable and does not obscure the primary claim for the cheque amount, the notice cannot be said to be omnibus in nature. Conclusion - A legal notice under Section 138(b) of the NI Act is valid if it specifies the cheque amount separately and any additional claims are severable. An additional demand does not invalidate the notice as long as it does not obscure the primary claim. The argument that the notice is invalid, is devoid of merit. The present petition stands dismissed.

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• 2025 (4) TMI 684
  Dishonour of Cheque - acquittal of accused - Rebuttal of presumption u/s 139 of NI Act - HELD THAT:- The present case, however, relates to acquittal of an accused in a complaint under Sections 138 read with 142 of the NI Act. The restriction on the power of the Appellate Court in regard to other offence does not apply with the same vigour in the offence under provisions of the NI Act which entails presumption against the accused. 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 said cheque in discharge of a legally enforceable debt or liability are raised against the accused. Since the appellant failed to provide any cogent documentary evidence in corroboration of his testimony, the learned MM held that the defence raised by the accused is a probable one to rebut the presumption under Section 139 of the NI Act and that the complainant had failed to discharge the onus, which shifted upon him, to show the existence of a legal financial liability. In the present case, the accused/ Respondent No. 2 has sought to prove his case by controverting that the cheques in question were not issued in discharge of any legally enforceable debt. It has been contended that the said signed cheques were stolen from his office drawer by the appellant, and that the same were misused. It was also argued that the appellant, as per his own deposition, stated that his annual turnover was Rs. 13,00,000/- in the year 2016, besides other rental and agricultural income, which makes it apparent that the appellant did not have the financial capacity to advance the said loan - It is seen that no complaint of the signed cheques being stolen from the office drawer of Respondent No. 2 was made by him. The learned MM erred in noting that Respondent No. 2 was successful in rebutting the presumptions insofar as he did not lead any evidence to corroborate that the signed cheques were forcibly taken from his possession or were misused. In the instant case, upon a consideration of the totality of circumstances, it is evident that Respondent No. 2 had failed to rebut the presumptions under Sections 118 and 139 of the NI Act, resultantly, the question of source of the loan advanced by the appellant and his financial capacity does not arise - The onus cannot be said to be shifted on the complainant to prove his financial capacity merely because the accused makes a vague bald assertion. Merely denying liability does not suffice to dislodge the presumptions raised under Section 118 and 139 of the NI Act. In terms of the dictum of the Hon ble Apex Court in Bir Singh v. Mukesh Kumar [ 2019 (2) TMI 547 - SUPREME COURT] , mere admission of the signature of the drawer on the cheque is sufficient to activate the presumption under Section 139 of the NI Act. It is not a pre-requisite that the drawer must also admit the execution of the entire contents of the cheque. Conclusion - The onus was on the accused/ Respondent No. 2 to rebut the presumptions. It was not for the complainant/ appellant to establish that he had the means to advance the loan, or that the signed cheques were issued in discharge of any legally enforceable debt. Having failed to rebut the presumptions, the contention of Respondent No. 2 that the burden was on the appellant to establish his financial means do not bolster the case of the complainant. The impugned judgment dated 30.08.2019, acquitting Respondent No. 2 of the offence under Section 138 of the NI Act is accordingly set aside - List on 01.05.2025 for further directions.

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• 2025 (4) TMI 683
  Dishonour of cheque - legally enforceable debt or liability under Section 138 of the Negotiable Instruments Act - rebuttal of presumption under Sections 118 and 139 of the Negotiable Instruments Act - HELD THAT:- It is trite that a Court exercising revisional jurisdiction will interfere with orders or judgments of the courts below only if those orders or judgments are suffering from incorrectness, illegality or impropriety. Unless the judgment passed by the learned Magistrate or by the Appellate Court is perverse or the view taken by the Court is unreasonable or there is non-consideration of any relevant material, or there is palpable misreading of records, the revisional Court will not be justified in interfering with the judgment. The revisional Court cannot act like an Appellate Court. The Negotiable Instruments Act raises some presumptions in favour of the complainant under Sections 118 and 139 of the said Act. The presumptions under Sections 118 and 139 are rebuttable presumptions. These presumptions are available only if execution of the cheque is admitted by the accused or only if it is proved by the complainant that the cheque is drawn by the accused. Whether the presumptions are rebutted or not would depend upon the facts and circumstances of the case. If the basis for drawing the presumptions exists, the court shall draw the presumptions under the said sections, in which case it is the burden of the accused to rebut those presumptions. There are no sufficient circumstance to reach to a conclusion that the trial court as well as the appellate court failed to appreciate the evidence on record in a proper perspective. The comparison of signature of the accused done by the appellate court is also assuming no importance for the reason that even otherwise the evidence adduced from the side of the complainant proves that the accused issued Ext.P1 cheque in discharge of a legally enforceable debt. Conclusion - The complainant has successfully demonstrated the existence of a legally enforceable debt, and the accused s defenses were insufficient to rebut the statutory presumption. The revision petition is allowed in part, modifying the sentence while upholding the conviction and compensation order.

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• 2025 (4) TMI 682
  Seeking initiation of contempt proceedings against respondents for violating the directions contained in order dated 03.04.2024 passed by learned Coordinate Bench - HELD THAT:- By way of abundant caution only, respondent No.1 undertakes to send communication in writing to the concerned SHO/Investigating Officer apprising him about the above said order in ARB.P. No.396/2024 and O.M.P. (I) (Comm.) 39/2024 within five days. It is clarified that the onus upon respondent No.1 is merely to communicate the concerned SHO/IO about the above said order and specific directions, and nothing beyond. Thus, nothing further survives in the present contempt petition - petition disposed off.

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