TMI Tax Updates - e-Newsletter
April 22, 2025

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax

TMI Short Notes

1. Bunching of Salary Income and Tax Rebates : Clause 157 of Income Tax, Bill 2025 Vs. Section 87A of Income-tax Act, 1961

  Bills:

2. Revamped framework for granting rebates on income tax to certain individuals Under Clause 156 of Income Tax Bill, 2025 Vs. Section 87 of the Income-tax Act, 1961

  Bills:

3. Analyzing the Tax Treatment of Collective Entities under Clause 310 of Income Tax Bill, 2025 Vs. Section 86 of Income-tax Act, 1961

  Bills:

4. Tax Deductions for Persons with Disabilities : Clause 154 of the Income Tax Bill, 2025 vs. Section 80U of the Income Tax Act, 1961

  Bills:

5. Statutory deduction for interest income derived from deposits : Clause 153 of the Income Tax Bill, 2025 Vs. Section 80TTA of the Income-tax Act, 1961

  Bills:

Articles

1. Tax Audit under the Income Tax Bill, 2025: A Paradigm Shift in Complianceand Governance

   By: Aratrik Banerjee

2. Common Mistakes to Avoid While Applying for 80G5 Registration

   By: Ishita Ramani

3. Celebrities' Environmental Responsibility: Endorsements of Prepackaged Goods and the Eco-Friendly Disposal of Packaging Materials

   By: YAGAY andSUN

4. EVs or Bicycles - for commuting within City - The Greener Mobility options!

   By: YAGAY andSUN

5. Balancing City Growth, Nature and Quality of Life.

   By: YAGAY andSUN

6. Trash - A problem to be avoided? {My Trash - My Responsibility}

   By: YAGAY andSUN

7. Glacier Grafting - Innovative and Unique Idea to cope with Melting Glaciers in Upper Himalayas!

   By: YAGAY andSUN

8. Circular Economy and Circular Thinking - Both are Boon for Blue Planet!

   By: YAGAY andSUN

9. Is our mindset blocking climate action?

   By: YAGAY andSUN

10. Tariff War between America and China - Whether a point of no return?

   By: YAGAY andSUN

News

1. India’s DBT: Boosting Welfare Efficiency - Report Reveals ₹3.48 Lakh Crore in Savings and 16-Fold Increase in Beneficiaries.

2. INDEX OF EIGHT CORE INDUSTRIES (BASE: 2011-12=100) FOR MARCH, 2025

3. Conservative Poilievre seemed poised to be Canada's next leader. Then Trump declared economic war

4. India to generate 8 mln jobs per year for next 10-12 years: Chief Economic Advisor Nageswaran

5. Vance set to visit India for bilateral talks on economic, trade and geopolitical ties

6. Talks for proposed India-US trade agreement gaining pace: An explainer

Circulars / Instructions / Orders

Customs

1. 14/2025 - dated 21-4-2025

Amendment to guidelines issued vide Circular No. 38/2020 dated 21.08.2020.

Highlights / Catch Notes

GST

• Employers Must Pay GST on Nominal Salary Deductions for Canteen and Transport Services Under Specific Conditions

  Case-Laws - AAR : The AAR ruled that nominal deductions from employee salaries for canteen and transportation services constitute a "supply of service" under GST. The authority determined that the recovered amounts are taxable, while the employer's perquisite portion remains non-taxable. For canteen services, input tax credit (ITC) is not available, and GST applies to the employee-recovered amount. In the case of non-air-conditioned bus transportation, GST is applicable on the nominal deduction, and ITC can be claimed from the transport service provider. The decision hinges on distinguishing between employer-provided benefits and taxable service recoveries, ultimately establishing a nuanced approach to GST treatment of employee welfare services.
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Income Tax

• Insurance Company Taxation: Multiple Legal Challenges Resolved, Section 44 Interpretation Upholds Actuary's Scientific Provisions and Computational Methodology

  Case-Laws - HC : HC ruled in favor of the assessee on multiple taxation issues related to insurance business. The court held that Section 14A does not apply to insurance company assessments, which are governed by Section 44 and First Schedule rules. The court affirmed the scientific basis for IBNR and IBNER provisions made by a registered actuary. Regarding motor vehicle dealer payments, the matter was remanded to the Assessing Officer to verify services based on CESTAT's order. Substantially, the decision favored the assessee on computational methodology and provision claims, with a limited remand on one specific issue against the assessee.
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• Coal Mining Company's Expense Deductions Partially Allowed: Key Ruling on Business Expenditures and Capital Investment Classification

  Case-Laws - HC : HC ruled on multiple expenditure deduction claims by a coal mining entity. The court largely upheld the Tribunal's decision, allowing deductions for education, community development, sports and recreation, and social welfare expenses as legitimate business expenditures mandated by National Coal Wage Agreement. For environmental and transit camp expenses, the matter was remitted to the Assessing Officer for re-examination. Significantly, the court ruled against the assessee on overburden removal expenses, categorizing them as capital expenditure rather than revenue expenditure, irrespective of the mining stage. The court also confirmed additional depreciation entitlement for the Nigahi Project due to increased production. Overall, the decision balanced business operational expenses with strict interpretations of capital versus revenue expenditures.
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• Delayed Registration Rejected: Inconsistent Explanations Fail to Justify Late Application Under Section 12A

  Case-Laws - HC : HC denied registration u/s 12A due to inconsistent and contradictory explanations for delayed application. The appellant's arguments regarding work rush and exemption threshold were deemed unconvincing and mutually contradictory. The court found the justifications insufficient to substantiate the delay in seeking registration. Despite attempts to explain the late filing, the appellant failed to provide cogent reasons that would warrant retrospective registration or condonation of delay. Consequently, the HC upheld the lower tribunal's decision and dismissed the appeal, maintaining the rejection of registration under Section 12A.
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• Trust's Registration Certificate Lost, But Legal Rights Intact: Authorities Must Reconstruct and Reissue Documentation Within 12 Weeks

  Case-Laws - HC : HC held that the trust's registration under SS12A is undisputed, and despite loss of original SS12AA certificate in 2012, respondent authorities must reconstruct their file and reissue the registration certificate. The court directed respondent to complete certificate reconstruction within 12 weeks, enabling the petitioner to claim tax exemptions under SS11 and SS12 without procedural impediments. The petition was disposed of, mandating administrative compliance to restore the trust's legal documentation and tax benefits.
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• Taxpayer Wins Appeal: Section 148A(d) Reassessment Order Quashed Due to Procedural Irregularities and Lack of Proper Reasoning

  Case-Laws - HC : HC allowed the petitioner's appeal, quashing the AO's reassessment order under Section 148A(d). The court found the order was passed without application of mind, highlighting internal contradictions where the AO first acknowledged the income tax return's filing, then subsequently claimed no return was submitted. The decision emphasized the petitioner's submission of bank statements documenting funds borrowed from his father for cryptocurrency purchase, which were undisputed. The reassessment order was deemed legally unsustainable and was set aside, providing relief to the taxpayer by invalidating the reopening of the assessment.
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• Tax Assessment Challenged: Procedural Fairness Demands Personal Hearing and Proper Guideline Value Evaluation Under Section 50-C

  Case-Laws - HC : HC remanded tax assessment proceedings involving long-term capital gains on property sale. The ITAT directed de novo assessment requiring personal hearing, which the assessing officer failed to provide. The court found the officer improperly considered previous materials and did not grant the assessee an opportunity to be heard through video conference. Regarding Section 50-C, the court clarified that guideline value supersedes sale deed value for tax calculation, and the petitioner is entitled to be heard on tax liability proportionate to property ownership. The matter was consequently returned to the assessing officer for proper procedural compliance, with the writ appeal being allowed.
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• Reassessment Notices Invalidated Due to Time Limitation Breach, Tribunal Quashes Proceedings Under Section 148

  Case-Laws - AT : The ITAT held that the reassessment notice u/s 148 for AY 2014-15 and AY 2015-16 was time-barred. For AY 2014-15, the assessee failed to respond within the two-week period specified in the show cause notice, rendering the 28.07.2022 notice invalid. For AY 2015-16, the notice was issued beyond the six-year limitation period, expiring on 31.03.2022. Consequently, the tribunal quashed both reassessment notices and subsequent proceedings as bad in law, dismissing the revenue's grounds of appeal and upholding the limitation bar established by judicial precedents.
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• Sales Tax Subsidy Deemed Capital Asset: Depreciation Recalculation Ordered Under Section 43(1) Explanation 10

  Case-Laws - AT : Sales Tax Subsidy Classification and Tax Implications The ITAT upheld the capital nature of a sales tax subsidy received from state governments. The tribunal directed the Assessing Officer (AO) to recalculate depreciation by reducing the subsidy amount from fixed asset costs under Explanation 10 to Section 43(1). The SC previously affirmed the subsidy's capital classification. The tribunal rejected revenue's contentions regarding book profit computation under Section 115JB, emphasizing that the AO lacks authority to modify book profits absent fraud or non-compliance with Companies Act provisions. The subsidy, directly credited to capital reserve and not impacting profit and loss account, cannot be adjusted in book profit calculations. Appeals filed by revenue were dismissed, and the Co-ordinate Bench's directions for depreciation re-computation were upheld.
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Customs

• Government Increases Duty Drawback Rates for Jewellery by Up to 17.6% Under Notification No. 77/2023 Customs

  Notifications : The GoI MoF amended Notification No. 77/2023 - Customs (N.T.) regarding All Industry Rates of Duty Drawback for Articles of Jewellery. Specifically, the amendment modifies three tariff items in Chapter-71: tariff item 711301 duty drawback rate increased from 335.50 to 405.40, tariff item 711302 rate increased from 4468.10 to 4950.03, and tariff item 711401 rate increased from 4468.10 to 4950.03. The amendment was issued under powers conferred by Customs Act, 1962 and Central Excise Act, 1944, read with Customs and Central Excise Duties Drawback Rules, 2017, effective from the date of notification.
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• Foreign Cigarette Smuggling Case: Prosecution Sanction Upheld, Jurisdictional Challenge Rejected Under Section 468 Cr.P.C.

  Case-Laws - HC : HC dismissed petition challenging prosecution for smuggling foreign-made cigarettes disguised as electronic goods. The court held that the Additional Director General was a competent authority to grant prosecution sanction, and the case was not barred by limitation under Section 468 Cr.P.C. since the potential sentence exceeded three years. The petitioners' arguments regarding circular interpretation and jurisdictional challenge were rejected. While the petition was dismissed, the court preserved the petitioners' right to pursue alternative legal remedies under criminal procedure.
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• Imported Goods IGST Interest Calculation Clarified: Section 50 Governs Computation, Distinguishing from Customs Additional Duty

  Case-Laws - AT : CESTAT adjudicated a dispute regarding IGST interest calculation on imported goods. The tribunal distinguished between Additional Duty of Customs and IGST, clarifying their distinct constitutional and statutory foundations. The key legal finding was that interest for delayed IGST payment should be calculated under Section 50 of CGST Act, not Section 28AB of Customs Act. The tribunal held that IGST on imported goods must be treated identically to inter-state supply IGST. Consequently, the matter was remanded to the Commissioner for recalculating interest at the applicable CGST Act rates, effectively allowing the appellant's appeal and directing a fresh interest computation consistent with statutory provisions.
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• Shipping Bills Conversion: Restrictive Circular Invalidated, Mandating Comprehensive Review of Advance Authorisation Scheme

  Case-Laws - HC : HC adjudicated a dispute regarding conversion of shipping bills under Advance Authorisation Scheme to Draw Back Scheme. The court invalidated the rejection based on a prior Gujarat HC ruling that deemed the restrictive circular ultra vires constitutional provisions and Customs Act. The court directed reconsideration of 104 shipping bills by the original authority, mandating a merit-based order within 12 weeks and providing IOCL a personal hearing. While technically dismissing the appeal, the ruling effectively mandated a comprehensive review of the original administrative decision, ensuring procedural fairness and statutory compliance.
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• Exporters Get Conditional 5% FOB Credit Under MEIS, Must Refund Excess if Lower Classification Confirmed

  Case-Laws - HC : HC adjudicated a dispute regarding Merchandise Exports from India Scheme (MEIS) scrips for export goods, conditionally permitting 5% FOB value credit. The court mandated that if goods classification ultimately determines a lower benefit percentage, exporters must refund excess amounts utilized under sanctioned scrips. The ruling noted 38 applications at 2% duty credit were unprocessable due to portal visibility issues, with one specific application from 13.06.2020 also unresolvable. The matter was scheduled for compliance review on 29.04.2025, with a provisional authorization subject to potential retrospective adjustment based on final goods classification determination.
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• Silver Seizure Overturned: Insufficient Evidence and Procedural Flaws Invalidate Confiscation of Small Quantity Below Threshold

  Case-Laws - AT : CESTAT allowed the appeal, finding the silver granules seizure unwarranted. The 10 kg silver, below the 100 kg threshold, was improperly seized by a Superintendent lacking competent authority. The department failed to establish smuggling evidence, while the appellant demonstrated legitimate purchase through invoice. The adjudicating authority violated principles of natural justice by denying cross-examination, relying solely on one-sided testimony. Consequently, the tribunal nullified both the confiscation order and imposed penalty, emphasizing procedural irregularities and lack of substantive proof of illicit intent.
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• Customs Bill of Entry Amendment Permitted Under Section 149 When Supporting Documentary Evidence Exists at Clearance Time

  Case-Laws - AT : CESTAT allowed the appeal, holding that the proviso to Section 149 permits amendment of a Bill of Entry after goods clearance when supported by documentary evidence existing at the time of clearance. The tribunal referenced Bombay HC's interpretation of Supreme Court's ITC decision, clarifying that order modification can occur under various provisions of the Customs Act, including Sections 128, 149, and 154. The commissioner's rejection of re-assessment was deemed unjustified, as clerical errors in invoice particulars can be rectified through proper legal mechanisms without prohibiting refund claims.
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IBC

• Corporate Debt Resolution: Operational Creditors Cannot Unilaterally Claim Interest Without Explicit Contractual Agreement Under Section 9

  Case-Laws - AT : NCLAT held that operational debt interest claims require explicit contractual agreement. The tribunal rejected the operational creditor's interest component in the Section 9 Application due to absence of specific contractual provisions. The Code's deliberate exclusion of interest from operational debt definition mandates that interest cannot be unilaterally imposed without mutual consent. The principal amount was ordered to be released to the respondent, effectively allowing the appeal while dismissing the interest claim. The tribunal emphasized that initiating corporate insolvency resolution process would not serve the Code's objective of maximizing debtor's asset value. Appeal was consequently allowed with the principal amount being released.
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• Debenture Trustee's Section 7 Application Rejected Due to Malafide Intent and Prior Restructuring Agreement

  Case-Laws - AT : NCLAT dismissed the Section 7 application filed by the Appellant-Debenture Trustee against the Corporate Debtor. The Tribunal found no valid debt due or payable during the moratorium period until September 2023. The court determined that the Appellant's intent was not genuine insolvency resolution but a malafide attempt to coerce the Corporate Debtor into insolvency proceedings. The Appellant's conduct, including releasing property charges and funds under a restructuring proposal, demonstrated prior agreement to a moratorium. Consequently, the Tribunal upheld the Adjudicating Authority's decision, concluding that the Section 7 application was improperly motivated and therefore not admissible, effectively protecting the Corporate Debtor from unwarranted insolvency proceedings.
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VAT

• Tribunal Wrongly Remanded Case Despite Favorable Findings, High Court Orders Comprehensive Review Under Proper Appellate Procedure

  Case-Laws - HC : HC held that the Tribunal erroneously remanded the matter for fresh assessment despite having recorded findings favorable to the revisionist and dismissing the revenue's appeal. The court found no justification for remand when all material relating to the transaction was available. The impugned order was set aside, and the matter was remanded to the Tribunal to decide the case by passing a reasoned order after hearing all stakeholders, effectively allowing the revision petition with directions for a comprehensive appellate review.
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Service Tax

• Pre-Deposit Tax Payment Under Incorrect Registration Number Deemed Valid Despite Administrative Error in Service Tax Compliance

  Case-Laws - AT : CESTAT held that pre-deposit made under incorrect service tax registration number does not invalidate tax payment. The tribunal recognized administrative errors in tax registration can be rectified through appropriate accounting adjustments. Based on precedential cases and departmental circulars, the court determined that payments by the same entity under different registration numbers constitute valid tax compliance. The technical discrepancy in registration number does not negate the substantive tax payment. Consequently, the appellant was deemed entitled to refund of pre-deposit, with the revenue department directed to make necessary accounting corrections. Appeal was allowed, affirming procedural flexibility in tax administration.
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• Construction Services for Public Infrastructure Exempt from Service Tax Under Specific Contractual Conditions

  Case-Laws - AT : CESTAT adjudicated a service tax dispute involving works contract services for construction projects. The tribunal ruled that construction services for educational institutions and government buildings do not constitute taxable works contract services primarily for commercial purposes. Construction of center-medians on highways was deemed a works contract "in respect of roads" and thus exempt from service tax. The tribunal found the service tax demand time-barred, determining no willful suppression of facts by the appellant. The extended limitation period was incorrectly invoked, and the entire service tax demand was set aside. Appeal was allowed in favor of the appellant, effectively nullifying the tax assessment.
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Central Excise

• Tobacco Product Misclassification Leads to Duty Evasion Penalty, Mandatory Interest Charges Confirmed Under Excise Rules

  Case-Laws - AT : CESTAT appellate tribunal adjudicated a dispute concerning tobacco product classification, determining that the appellant intentionally misclassified goods as Chewing Tobacco instead of Jarda Scented Tobacco to evade higher duty rates. The SC's precedential ruling in Urmin Products conclusively established the appellant's deliberate misclassification. Consequently, the tribunal upheld levy of interest and penalty, finding the appellant liable for duty evasion. The court mandated payment of interest as compensatory measure and imposed penalty equivalent to the duty amount under applicable excise rules. The appeal was ultimately dismissed, affirming the revenue's position and confirming the goods' correct classification as Jarda Scented Tobacco under Tariff Entry 2403 9930.
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Case Laws:

• GST

• 2025 (4) TMI 1096
  Supply of service - deduction of a nominal amount by the Applicant from the salary of the employees who are availing the facility of food provided in the factory premises - deduction of nominal amount by the Applicant from the salary of the employees who will be availing the non-air-conditioned bus transportation facility proposed to be provided by the prospective Transport Service Provider - applicability of GST on the nominal amount to be deducted from the salaries of employees - availability of ITC on GST charged by the Canteen Service Provider for providing the catering services - availability of ITC on GST that would be charged by the Transport Service Provider for providing the non-air-conditioned bus transportation services. Taxation of nominal recovery of Canteen Services - HELD THAT:- As per Income Tax Act, perquisite is defined to be the value of free benefit or facility given by the employer to the employees. The collection from the employees of whatever value, is not covered under perquisite . It could be inferred from the above, that any service rendered free of charge, or, concession given for any service rendered on a concessional basis shall qualify as a perquisite. But, it is to be noted that only the value/portion to the extent of concession offered by the employer is to be treated as a perquisite and not the remaining portion/value that has been charged by the employer. Applying the said analogy to the instant case, in respect of the canteen services provided by the applicant to its employees, it becomes clear that the exemption provided in Entry 1 of Schedule III to the CGST Act, 2017 applies only to the concession part extended to the employees and not on the value charged to the employees. Thus, the recoveries made from the employees are liable to levy of tax as it is consideration against canteen services provided by the Applicant to the employees. Whether ITC of tax paid to caterer for Canteen Services is available? - HELD THAT:- In the instant case, the flow of the transaction is that the Canteen Contractor is providing service to the Applicant, which is classifiable as Restaurant Service and the Applicant himself is also providing same service to its workers as mandated in the Factories Act, 1948 i.e., he is also providing Restaurant Service to its workers. As already mentioned in para 5.2.6, the Restaurant Service compulsorily attracts rate of 5% without ITC in a non-specified premise and the Applicants premises is not specified premises in terms of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. Therefore, though the Section 17 (5) of the CGST Act, 2017 does not block availment of ITC, however, in the present case, availment of ITC is barred in terms of provisions of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended vide Notification No. 20/2019-C.T. (Rate) dated 30.09.2019. There is another way of looking at the transactions, that, had the Applicant not engaged any Canteen Contractor but decided to run the canteen himself, as mandated in the Factories Act, 1948, then also he would be required to pay 5% of GST on taxable supply without availment of any ITC in terms of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 supra. Therefore, just by engaging, a Canteen Contractor, he can t be allowed to adopt an interpretation for availing ITC which is not available to him in a case of direct supply of Service. Whether the services by the way of non-air-conditioned bus transportation facility provided by the Applicant to its employees would be construed as supply of service under GST? - HELD THAT:- Applicant has proposed to receive services from third party in respect of hire or lease or renting of transportation buses. Applicant is using these buses for transportation of its employees from their home to work place and vice versa. There is no privity of contract between the third-party transport service provider and the employees of the applicant. Hence, the applicant received the service from the transport buses provider and provides transportation services to the employees. However, when these services are provided by charging some consideration of whatever value, it would not be perquisite or a service in lieu of employee services, this would be very much supply of transportation services to the employees and liable to tax. Value in respect of which canteen and transportation services are taxable - HELD THAT:- The value of the outward supply of canteen and transportation service can be considered as having two parts. First part is the amount of recovery that is made from the employees, and second part is balance value of the services provided by the employer as perquisite which is in the lieu of the services provided by employees to the employer. The entire balance value of the services for which no amount is charged is the perquisite provided by the employer to the employees. As this part is in lieu of services of the employees to the employer which fall under schedule 3, the perquisite part is not taxable, as a corollary, deeming it to be falling in the said entry of schedule 3. Hence, though the employer and employee are related parties, the value on which tax is a liable to be paid is only the recovered amount from the employee as the remaining part of the value is the perquisite provided by the employer which is not liable to tax. Whether ITC is available to the Applicant on GST charged by the Transport Service Providers for providing the non-air-conditioned bus transportation services? - HELD THAT:- Section 17 (5) (g) of CGST/MGST Act 2017 states that input tax credit shall not be available in respect of goods or services or both used for personal consumption. Provision of service of transportation of employees from residence to factory or office premises has been used for personal consumption or comfort of employees. The applicant is not under any statutory obligation to provide these services to his employees and the services provided comes under category of personal consumption which makes the applicant ineligible to avail input tax credit on the invoices issued to him by the transporter for transportation of employees as per Section 17 (5) (g) of CGST/MGST Act 2017. Conclusion - ia) The deduction of a nominal amount by the Applicant from the salary of the employees who are availing the facility of food provided in the factory premises would be considered as a Supply of Service by the Applicant under the provisions of Section 7 of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017. ib) GST is applicable on the nominal amount to be deducted from the salaries of employees. ic) ITC is not available to the Applicant on GST charged by the Canteen Service Provider for providing the catering services. ii) The deduction of nominal amount by the Applicant from the salary of the employees who will be availing the non-air-conditioned bus transportation facility proposed to be provided by the prospective Transport Service Provider will be construed as supply of service by the Applicant under the provisions of Section 7 of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017. iib) GST is applicable on the nominal amount to be deducted from the salaries of employees. iic) ITC will be available to the Applicant on GST that would be charged by the Transport Service Provider for providing the non-air-conditioned bus transportation services.

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• Income Tax

• 2025 (4) TMI 1095
  Reopening of assessment under old regime - scope of new regime - scope of TOLA - as argued notice has been issued on the basis of the provisions which have ceased to exist and are no longer in the statute - As decided by HC as informed by counsel for Petitioner/s that these Petitions will be covered by the judgment in Hexaware Technologies Limited. [ 2024 (5) TMI 302 - BOMBAY HIGH COURT] Counsel for Respondent/s concur. Therefore, the notices and orders impugned in these petitions are quashed and set aside. In case any re-assessment order is passed, the same also will stand quashed. HELD THAT:- Special Leave Petition is dismissed as it does not survive for further consideration. In this regard, reference could also be made to paragraph 19(e) and (f) in the case of Union of India vs. Rajeev Bansal [ 2024 (10) TMI 264 - SUPREME COURT (LB) ] under which the learned Additional Solicitor General for India has made a concession insofar as the assessment year 2015-16 is concerned. Pending application(s), if any, shall stand disposed of.

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• 2025 (4) TMI 1094
  Accrual of incom e - income from the interim dividend - year of assessment - HELD THAT:- There is no dispute that when the income from interim dividend was declared on 14.03.2002 by the Company during Financial Year 2001-2002 relevant to the Assessment Year 2002-2003, the interim dividend referred to in Section 115(o) was exempt from tax in the hands of the Appellant/Assessee. The fact also remains that dividend tax was also paid by the aforesaid Company on 22.03.2002. The facts on record indicate that the income accrued from the interim dividend was unconditionally made available by the Company to its shareholders during the Financial Year 2001-2002 relevant to the Assessment Year 2002-2003 itself, though the amount accruing as income from the interim dividend was actually paid to the Appellant/Assessee by way of cheque only on 23.04.2002 during the Financial Year 2001-2002 relevant to the Assessment Year 2002-2003. This is evident from a reading of Section 8(b) of the Act as it stood during the period in dispute. When Section 10(33) and 115(o) of the Act are read in conjunction with Section 8(b) of the Income Tax Act, 1961, it is clear that for the purpose of total income of an assessee, any interim dividend shall be deemed to be the income of the previous year in which, the amount of such dividend was unconditionally made available by that company to the member who is entitled to it. Merely because the Appellant/Assessee has received the aforesaid interim dividend on 23.04.2002 during the Financial Year 2002-2003, assessable during the Assessment Year 2003-04, by which time the exemption under Section 10(33) of the Act was deleted would not mean that the aforesaid interim dividend income has to be taxed in the hands of the Appellant/Assessee as such dividend had already suffered tax on 22.03.2002 in the hands of the Company. The exemption for income occurring from interim dividend under Section 10(33) of the Act was available to the Appellant/Assessee during the Financial Year 2001-2002 relevant to the Assessment Year 2002-03 as the right to receive the interim dividend had accrued in the hands of the Appellant/Assessee, even though the amount was actually received only on 23.04.2002 during the Financial Year 2002- 03 relevant to the Assessment Year 2003-04. Validity of reopening of assessment - The subsequent Assessment Order dated 28.06.2007 passed under Section 143(3) r/w Section 147 of the Act was contrary to the decision of Kelvinator of India [ 2010 (1) TMI 11 - SUPREME COURT] wherein as held Assessing Officer has power to reopen the assessment of income of the Assessee only if there is tangible material to come to a conclusion that income has escaped from assessment. Assessee appeal allowed.

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• 2025 (4) TMI 1093
  Assessment of Insurance business - Profit on sale of investment - HELD THAT:- The issues are to be answered in favour of the assessee by virtue of judgement of United India Insurance Co. [ 2020 (5) TMI 755 - SC ORDER (LB)] affirming the decision of this Court in United India Insurance Co. [ 2019 (7) TMI 387 - MADRAS HIGH COURT] as held prior to 1st April, 2011, there was no provision which required the Revenue to disallow the deduction of loss on sale of investments.Decided against revenue. Disallowance u/s 14A - Tribunal has concluded the issue adverse to the assessee holding that Rule 5(a) militates against the grant of expenses, which are not for the purposes of insurance business and, directing that the same are to be added back -Section 14A states that no deduction shall be allowed in respect of the expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. However, in framing of assessments in the case of insurance companies, it is purely Section 44 read with Rule 5 of the First Schedule that would apply. This position is made clear by Section 44 itself which says that the methodology for computation shall be as per Rule 5 of the First Schedule that excludes specifically the application of Sections 28 to 43B and Section 199 of the Act. We are thus of the considered view that in a specialised assessment of this nature, where the methodology for computation is not as stipulated under Section 28 to 43B, there is no role for Section 14A at all. The fact that such an assessment would stand outside the ambit of application of Section 14A is made clear by the non-obstante clause contained in Section 44 which states that notwithstanding anything to the contrary contained in this Act relating to the computation of income chargeable under the heads of interest on securities, house property, Capital gains or other sources, or Section 199 or Sections 28 to 43B dealing with the computation of business income, the assessment of insurance business would be in accordance with the Rules contained in the First Schedule alone. Barring the aforesaid adjustments, there can be no other adjustments contemplated to the scheme of computation of profits and gains of other insurance businesses. Reference to Section 14A thus does not arise in the context of such computation. In the scheme as we have set out above, the legislative intent is clear, to put in place a distinct and different scheme for computation of profits from other insurance businesses. The substantial question of law in relation to this issue is thus answered in favour of the assessee and against the revenue. Disallowance of the provisions made on account of the expenditure incurred but not reported (IBNR) and incurred but not enough reported (IBNER) - The scheme of taxation that governs Insurance Companies has its genesis in Section 44 of the Act, a special provision touching upon the taxation of the Insurance business. Incidentally, the IRDA had issued Insurance Regulatory and Development Authority of India (Assets, Liabilities and Solvency Margin of General Insurance Business) Regulations, 2016 (in short IRDA 2016 Regulations), effective from 01.04.2016 where there are procedural differences in the reporting of claims and creation of claim reserves. However, there is no effective difference, as far as the appellant companies are concerned, in that, the mandate to have a transparent disclosure of the claims and the manner in which such claims are to be crystallized continues to be the same even in the 2016 Regulations. Thus, for all practical purposes, the appellants would be equally entitled to the grant of provision both under the 2002 as well as 2016 Regulations. Ultimately, the assessment and valuation of risk has been made by a Registered Actuary, and in our view this would amount to a sound and scientific basis for the claim of expenditure. Hence, we find that there is a scientific basis for the claim of the provisions based on the stipulations under the applicable statutory and other prescriptions. We answer the substantial questions of law in regard to claim in regard to IBNR and IBNER in favour of the assessee and against the Revenue. Disallowance of payments made to Motor vehicle dealers - Statements had been recorded from the employees of those companies to the effect that no service had been rendered by them, based on which the expenditure claim was disallowed. That very issue, being the claim of input tax, had been the subject matter of adjudication by the service tax authorities that had travelled before the Customs, Excise and Service Tax Appellate Tribunal (in short, CESTAT), which had held that the motor vehicle dealers had, indeed, rendered services. That order of the CESTAT had been produced before the Tribunal relying on the factual findings therein that services had been rendered by the automobile manufacturers. Tribunal has thus remitted the matter to the file of the Assessing Officer, since the order of the CESTAT is dated 24.02.2021, which order was not available before the Assessing Officer when the orders of assessment had been passed. In fact, the Tribunal has, in remanding the matter, stated that the remand was for the limited purpose of enabling the Assessing Authority to verify the issue with reference to the CESTAT order. We find nothing untoward in the order of remand and hence the conclusion of the Tribunal in this regard is affirmed. This substantial question of law is answered against the assessee.

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• 2025 (4) TMI 1092
  Allowability of expenditures claimed as deductions by the assessee engaged in coal mining operations - Education Expenses - HELD THAT:- Tribunal noted that the assessee had been incurring expenditure on running of the institutions by three bodies which are running pan India schools i.e. Kendriya Vidyalaya Sangathan, DAV School Society and DPS Society and also that the liability to discharge the obligation towards education fell on the assessee in terms of National Coal Wage Agreement entered into with the employee union and the assessee which was enforceable under law both under the Indian Contract Act as well as Industrial Disputes Act and also that it was not a voluntary expenditure incurred by the assessee but was incurred to discharge its obligation in terms with National Coal Wage Agreement which bound the assessee statutorily to honour the said agreement arrived at with the union and therefore, the expenses incurred towards Education amounted to revenue expenses in running of the business of the assessee. We find that the aforesaid logic and justification given by the Tribunal does not suffer from any infirmity or illegality in view of the obligations upon the assessee in terms of National Coal Wage Agreements, and therefore, the expenses are in the nature of business expenses. Therefore, this issue is answered in favour of the assessee and against the Revenue and the order of the Tribunal is upheld whereby deduction towards education expenses has been allowed to the assessee. Community Development Expenses - The twin grounds considered by the Tribunal in the present case on the present question, i.e. commercial expediency to carryout welfare activities to reduce resentment and resistance to its coal mining activity and also that the welfare activities could not be carried out in piecemeal manner when some of the staff of the assessee was residing in these villages, in our considered opinion for both these reasons the expenditure incurred on the Committee development would lead to an expenditure incurred solely as business expenditure and is allowable as such. The liberty already granted by the Tribunal in the present case, to examine each item on case to case basis also saves the rights of the revenue because the assessing officer can verify each claim raised by the assessee on item to item and case to case basis subject to general principle that the expenses incurred to reduce resentment and resistance to the project by carrying out welfare activities and also that some of the staff for residing in the said villages, the deduction of expenditure cannot be faulted with. Therefore, this question is also answered in favour of the assessee and against the revenue. Sports and Recreation Expenses - Tribunal correctly held that the expenditure was necessitated by the National Coal Wage Agreement entered into between the management and the Union of employees. And further that so far as the incurring of the expenditure is concerned, that has already been accepted at the time of audit by statutory auditors including Comptroller and Auditor General of India (CAG). The Tribunal held that such expenditure incurred on indoor and outdoor games, sport kits, shoes, prizes, awards to participants, participation charges, hiring charges, tents, lightings, fitments, etc. are in accordance with para 10.8.0 of National Coal Wage Agreement and the assessee was under obligation to spend towards sports and recreation facilities to its employees and thus, the Tribunal held that upon principle such expenses is allowable as deduction from the gross income of the assessee. Expenses are having nexus with assessee s business, because good physical health and mental condition of employees would improve business output and a happy employee would do a better job than another employee and therefore, there was commercial expediency in incurring the said expenses. This question is also answered in favour of the assessee and against the revenue. Environmental Expenses - Tribunal held that such expenditure cannot be treated to be capital expenditure with closed eyes because a tax authority must appreciate the manner and circumstances under which such expenditure is required to be incurred. So long as the expenditure has nexus with assessee s business, then the next step is to test the expenditure on the touch-stone of capital or revenue expenditure. Tribunal held that since the Commissioner has not given any reasoning while disallowing the said expenditure as deduction, therefore, the matter was remitted by the Tribunal to the Assessing Officer to take a decision on merits. We do not find any error or perversity in the said approach adopted by the Tribunal. Social Welfare Expenses of Employees - Tribunal held that the expenditure had been necessitated by National Coal Wage Agreement and the expenditure had been audited by the statutory auditors as well as by CAG. Therefore, the Tribunal allowed the expenditure for which the details and evidence were placed before the Assessing Officer and disallowed that part for which no evidence was placed before the Assessing Officer nor before the Tribunal. The said allowance of expenditure in-principle does not suffer from any illegality or perversity and so far as allowing of part expenditure is concerned, it is purely in the realm of facts and does not amount to any substantial question of law. Therefore, we answer this question in favour of the assessee and against the revenue. Expenditure Towards providing LPG, Medical Camp, Transit Camp, etc. - Tribunal held that the expenditure incurred in providing LPG to the employees in lieu of coal, medical camp, transit camp expenses etc. have been incurred on account of obligations as per National Coal Wage Agreement. Tribunal also held that the expenses towards transit camp being revenue or capital nature and whether these are business expenses or these are the expenses, which can be said to be incurred on acquiring the lease or acquiring the rights on land so as would amount to capital expenditure need to be re-examined by the Assessing Officer to take a decision de-novo on merits after examining all the relevant material. As there is no mandatory order against the revenue or in favour of assessee at this stage and the matter has only been remanded to the Assessing Officer to re-examine the claims whether the amount to capital or revenue expenditure, after hearing learned counsel for the parties. Therefore, we find that no substantial question of law arises in the matter on this issue. Additional Depreciation for Machineries - Tribunal has correctly held that the assessee was entitled to additional depreciation, because the Nigahi Project of assessee was a separate industrial undertaking engaged in production of article or thing, i.e. Coal and such production during the year had increased for more than 20% and therefore, the assessee was entitled for additional depreciation, which was found to be as per the decision of Sesa Goa Ltd [ 2004 (11) TMI 14 - SUPREME COURT] and Textile Machinery Corporation Ltd [ 1977 (1) TMI 3 - SUPREME COURT] Decided against the revenue. Overburden Removal - Though Coal may be available in the Coal mine, but once a seam/layer of Coal has been extracted, then the mine stands exhausted and it has to be revived by removing the overburden, therefore, for the resumption of actual mining work. Therefore, it is a preparatory activity to resume mining, and not mining, per se. Removal of layer of overburden to expose the next coal seam after the mine has closed upon exhausting earlier coal seam amounts to revival and extension of business because otherwise the business has to be closed down. It is not an expenditure in the nature of extraction of coal or working of mine but it is an expenditure in the nature of further development of mine or extension and revival of mine. In our opinion, the distinction accepted by the Tribunal in treating overburden expenses incurred till the stage of mine reaching 25% of its annual rated capacity, has no sanctity in law and is an artificial distinction only based on accounting practice of the respondent assessee and nothing else. Therefore, we answer this substantial question of law in favour of the revenue and against the assessee and hold that expenses for removal of overburden at any stage of mine after it has been allotted to the mining company would amount to an expenditure in the nature of capital expenditure and not an expenditure in the nature of revenue expenditure and therefore, it would be allowed only as a capital expenditure. Decided in favour of the Revenue by holding it to be an expenditure of capital nature irrespective of the stage of mining.

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• 2025 (4) TMI 1091
  Refusing to grant registration u/s 12A - delay in filing the application for registration u/s 12A - as argued registration u/s 12A was not required until its gross receipts exceeded Rs.1 crore (the threshold limit u/s 10(23C)(iii ad)) - whether appellant could not had been granted registration with a retrospective effect from 1989 onwards or even from the previous financial year? HELD THAT:- From perusal of the pleadings there seems to be only two grounds that the appellant have raised seeking for condonation of delay and for grant of registration w.e.f. 15.05.1989. One can easily reach to the conclusion that the assessees therein had made application seeking registration u/s 12A of the Act belatedly giving cogent and justifiable reasons in the delay that took place in applying for registration. However, when we look into the facts of the present case, what can be visualized is that in the present case though the appellant has tried to give certain explanation, but what is required to be considered is whether the grounds raised were cogent and strong enough to justify the delay in seeking for registration. As would be seen from the order passed by the Director of Income Tax (Exemptions) so also the order passed by the ITAT, it clearly reflects that the appellant has taken contradictory stand justifying the delay. The appellant, on the one hand, submits that because of the rush of work on account of frequent expansion of the educational society they were not able to apply for registration under Section 12A of the Act. At the same time, they also try to take a stand that since they had an exemption under Section 10(23C) (iii ad) of the Act, therefore they were not required to seek another registration under Section 12A of the Act and, once when they crossed the limit that was prescribed u/s 10(23C) (iii ad) of the Act, they had immediately moved an application. This again is not-sustainable and acceptable as compared to the first ground giving explanation for the delay; as the two do not match each other and are self-contradictory in itself. Appeal dismissed.

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• 2025 (4) TMI 1090
  Denial of exemption u/s 11 and 12 - non-production of registration certificate issued u/s 12AA - HELD THAT:- The factum of the registration of the petitioner trust u/s 12A of the Act by issuance of the certificate u/s 12AA is an undisputed fact. The respondent authority has also not disputed regarding the loss of certificate of the petitioner in the year 2012. The respondent authorities are therefore required to issue copy of the certificate u/s 12AA of the Act by reconstructing their own file as it is reported that the old records have been lost and the respondent authorities are unable to trace the original file. The only remedy available is to direct the respondent to reconstruct the file of original records on the material available with the respondent with the help of the petitioner and issue a copy of registration certificate u/s 12AA of the Act with Registration Certificate so as to enable the petitioner to claim the exemption u/s 11 and 12 of the Act without any hindrance. Such exercise shall be completed within a period of 12 weeks from the date of receipt of copy of this order. The petition is accordingly disposed of.

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• 2025 (4) TMI 1089
  Validity of reopening of assessment - purchase of crypto currency - As submitted petitioner had filed return of income for the year under consideration as well as provided details of source of funds along with bank statement of the father of the petitioner - as argued AO did not make any addition considering the reply filed by the petitioner - HELD THAT:- It is evident that the impugned order dated 30.03.2022 passed under section 148A (d) of the Act is a classic example of order passed without application of mind by the respondent Assessing Officer ignoring the fact on record. Even on perusal of the order the same is self contradictory as is evident from para nos. 1 and 4 of the order. The respondent Assessing Officer has recorded in para no. 1 that the petitioner has filed return of income however in para no.4 it is recorded that no return of income is filed. It is also not in dispute that the petitioner has filed bank statement of his father from whom he had borrowed funds to purchase crypto currency which is available on record and not disputed by the learned advocate for the respondent. We are therefore, of the opinion that impugned order dated 30.03.2022 passed under section 148A (d) of the Act is liable to be quashed and set aside and is hereby quashed and set aside. Assessee appeal allowed.

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• 2025 (4) TMI 1088
  Order of the Income Tax Settlement Commission granting immunity to the private respondents from prosecution and penalty - HELD THAT:- For the Commission to grant immunity under Section 245H there are three requirements:- (i) full and true disclosure of the income not disclosed to AO; (ii) the manner in which the income was derived and (iii) that the applicant cooperated in the proceedings before the Settlement Commission. The Commission on being satisfied that applicant cooperated during the proceedings coupled with the fulfillment of two conditions as required under Section 245C may grant immunity to the applicant from prosecution and penalty subject to the conditions it may deems fit. The proceedings filed by the private respondents were admitted u/s 245D(1) and by order the application was declared not to be invalid. The application culminated in order dated 31.03.2013 whereby the terms and conditions for settlement were determined. It would be relevant to mention that the portion of the order fixing the terms and conditions of the settlement has attained finality. The acceptance of the application bring us to the obvious conclusion that the first two conditions of section 245H which are common to the pre-requisite of section 245C(1) have been complied with. The contention of counsel for the petitioner that there was failure of the private respondents to make a full and true disclosure under Section 245C, deserves rejection. The revenue accepted the order of the Commission whereby the applications have been allowed and the challenge is limited to grant of immunity. Meaning thereby the satisfaction of Commission that two pre-conditions of Section 245C(1) were complied is not in dispute. Commission has recorded a satisfaction that the applicant cooperated during the settlement proceedings and there is no challenge to this finding. In absence of challenge to fulfillment of three conditions required under Section 245H, the argument that there was no true and full disclosure of income does not arise. WP Dismissed.

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• 2025 (4) TMI 1087
  Income deemed to accrue or arise in India - amounts paid by the Indian hotels for marketing contribution and reservation fees - Royalty or Fees for Included Services - addition u/s 9 (1) (vii) of the Act as well as under Article 12 (4) (a) and Article 12 (4) (b) of the DTAA - HELD THAT:- Admittedly, the said issue is covered in favour of the Assessee and against the Revenue by several decisions of this court including Sheraton International Inc. [ 2009 (1) TMI 27 - DELHI HIGH COURT ], Sheraton International LLC [ 2023 (5) TMI 1435 - DELHI HIGH COURT] , Westin Hotel Management [ 2024 (4) TMI 1250 - DELHI HIGH COURT] and Shangri-La International Hotel Management Pte Ltd.[ 2023 (9) TMI 1683 - DELHI HIGH COURT] In the case of Radisson Hotel International Incorporated [ 2022 (11) TMI 641 - DELHI HIGH COURT ] this court had referred to the earlier decisions and dismissed the case holding that no substantial questions of law arise for consideration by this court. The present appeal must bear the same fate. No substantial questions of law.

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• 2025 (4) TMI 1086
  Disallowance being provision for non-performing assets - HELD THAT:- We have also perused the books of accounts, balance sheet and the Profit and Loss account of the assessee for the Financial Year 1995-96, which is relevant for the assessment year 1996-97, in respect of which respondent had filed a return of income u/s 139 (1) of the Income Tax Act on 11.06.1997. The specific case of the appellant-Income Tax Department is that mere provision in the Books of Accounts viz., Balance Sheet and Profit and Loss Account is not sufficient to claim deduction u/s 36(i) (vii) and 36/29. It is specifically contended that the assessee had not debited the amount to the Profit and Loss account. A reading of the order of the Appellate Commissioner and the impugned order of the Appellate Tribunal, impugned herein does not disclose examination of the books of accounts in the light of the decision of the Supreme Court in Vijaya Bank [ 2010 (4) TMI 46 - SUPREME COURT] . In the impugned order, it is not indicated whether the assessee had debited the amount in the balance sheet as contemplated, apart from debiting the amount from its Profit and Loss Account. This exercise was to be completed in the light of the earlier remand order of the Tribunal. Tribunal has merely relied on the Chartered Accountant s certificate dated 11.07.2005 and arrived at the conclusion based on the treatment given under similar circumstances for the subsequent assessment year. Matter restored back before AO for fresh assessment.

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• 2025 (4) TMI 1085
  De novo assessment proceedings - requirement of affording a personal hearing - Long term capital gains on sale of land - applicability and effect of Section 50-C - tax liability of child selling property as given power of attorney by other siblings after fathers death - HELD THAT:- Appellate Tribunal had remitted the matter to the file of the assessing officer for de novo assessment after affording due opportunity of hearing to the appellant. The expression de novo assessment had been explained in Headstrong Services India (P) Ltd. [ 2020 (12) TMI 1086 - DELHI HIGH COURT ] held that once the ITAT directed the assessing officer to decide the matter de novo, it meant that a new hearing of the matter had to be conducted, as if the original hearing had not taken place, consequently, the assessing officer had to decide the matter in accordance with the procedure mentioned in the statute. A mere look at the impugned order would show that the assessing officer had taken into account the materials gathered on the earlier occasion. Though the assessing officer was expected to proceed on the premise that the slate was wiped clean, such an approach was not adopted. The acknowledgement generated by the department itself indicates that the assessee had requested the authority to grant hearing through video conference before passing any order. Admittedly, the assessing officer had not granted any opportunity of personal hearing to the assessee. As per the statutory provision and as per the order of the Income Tax Appellate Tribunal, due opportunity of hearing should have been given to the assessee. Admittedly, such an opportunity of hearing was not given to the assessee. The learned single Judge had not taken note of these twin aspects. In this view of the matter, the order impugned in this writ appeal is set aside. Applicability and effect of Section 50C - The sale consideration declared in the sale deed dated 26.02.2007 is not relevant and that the value has to be determined u/s 50-C of the Income Tax Act. If the guideline value is more than the value declared in the document, then guideline alone is relevant for payment of tax. What the executant of the sale deed received is of no consequence. Though the petitioner is bound by the valuation made by the department in terms of Section 50-C of the Act, he is entitled to be heard on the question of his share of tax liability. This is because Samuel was not the exclusive owner of the property. The matter is remitted to the file of the assessing officer who has to act as per law . Writ appeal allowed.

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• 2025 (4) TMI 1084
  Deduction u/s 80P(2)(d) - interest received from co-operative bank - HELD THAT:- We find that grounds of appeal raised by the assessee is in fact covered by a series of decision by this Bench as well as other Co-ordinate Benches of Tribunal wherein it has been consistently held that Co-operative Banks are primarily co-operative society and the interest or dividend earned from such Co-operative Bank are eligible for deduction under section 80P(2)(d). Similar view was taken in Sai Ankur Co-operative Housing Society Limited [ 2025 (2) TMI 115 - ITAT MUMBAI] and Totagars Co-operative sales Society [ 2017 (1) TMI 1100 - KARNATAKA HIGH COURT] . No contrary facts or law is brought to our notice to take other view. Thus, the grounds of appeal raised by the assessee are allowed.

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• 2025 (4) TMI 1083
  Disallowing compensation for the inordinate delay in payment of interest on refund - HELD THAT:- CIT(A) has dismissed the appeal holding that Section 244A of the Act entitles assessee to receive simple interest on the refund due, but does not provide for compensation for any delay in payment of such interest. AR has relied on various case laws. However, we find that none of these case laws are relevant to present case. In the case of CIT vs. H.E.G. Ltd [ 2009 (12) TMI 35 - SUPREME COURT] has only answered the meaning of the words refund of any amount becomes due to the assessee in Section 244A of the Act. The case of Sandvik [ 2006 (1) TMI 55 - SUPREME COURT] prior to insertion of section 244A for granting interest on refunds, when there was no provision for granting interest for delayed payment of refund. Appeal filed by the assessee is dismissed.

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• 2025 (4) TMI 1082
  Validity of reopening of assessment - scope of extended time limit by TOLA, 2021 - HELD THAT:- By taking the date of 26.05.2022 from the show cause notice in the present case, period of two weeks ended on 09.06.2022 for the assessee to furnish its reply. On this very date, when time limit of two weeks expires, assessee moved an application before the AO seeking adjournment for 2 to 3 weeks. AO accepted the same and granted adjournment on the same date, asking the assessee to submit the reply by 24.06.2022. Assessee did not comply with the extended time limit and furnished its response on 28.06.2022. On these given set of facts, one has to bear in mind the legal fiction within which one has to operate and the same has to be construed strictly. Since assessee did not file its response to the show cause notice within the permissible two weeks expiring on 09.06.2022, except for moving an application seeking adjournment, the clock started ticking for the Revenue on expiry of permissible two weeks, i.e. on 09.06.2022. Surviving time period calculated by the ld. Counsel for the assessee in the above extracted table is one day whereas according to the ld. CIT DR, it is zero. Ld. Assessing Officer has issued the impugned notice u/s 148 on 28.07.2022 which does not meet the criteria of surviving time limit laid down by the Hon ble Supreme Court, whether one or zero day is considered. Thus, we hold that notice for A.Y. 2014-15 issued on 28.07.2022 u/s 148 of the new regime is barred by limitation and hence bad in law, liable to be quashed, resulting in impugned reassessment proceedings as well as the impugned reassessment order bad in law. Accordingly, ground nos. 1 and 2 raised by the Revenue are dismissed. Notice issued beyond period of six years in A.Y. 2015-16 - Since the notice issued u/s.148 is dated 28.07.2022, period of six years expired on 31.03.2022 and is thus barred by limitation. Accordingly, notice so issued and re-assessment completed thereafter u/s. 147 is liable to be quashed, in view of the decision of Rajeev Bansal [ 2024 (10) TMI 264 - SUPREME COURT (LB) ] which was followed by Hon ble Delhi High Court in the case of IBIBO [ 2024 (12) TMI 1269 - DELHI HIGH COURT ]

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• 2025 (4) TMI 1081
  Nature of receipt - tax treatment of sales tax subsidies received from the State Governments of Punjab and Haryana - whether the sales tax subsidy should be treated as a capital or revenue receipt? - subsequent impact on depreciation computation and Minimum Alternate Tax (MAT) liability u/s 115JB - HELD THAT:- Vide [ 2018 (5) TMI 1738 - SC ORDER] the Hon ble Supreme Court dismissed the Revenue s appeal, thereby affirming the classification of the sales tax subsidy as capital in nature.In light of the Apex Court s ruling, the characterisation of the subsidy stands conclusively determined. Treatment of the subsidy in relation to the cost of fixed assets, its impact on depreciation computation u/s 43(1) of the Act, and its implications for the determination of book profits under Section 115JB - The fact that the incentive was structured as a deferment of statutory liability, later converted into a capital reserve, does not alter its fundamental nature. Non-payment of a statutory liability is functionally equivalent to a direct inflow of funds, making the subsidy fall squarely within the ambit of Explanation 10 to Section 43(1) of the Act. Consequently, the subsidy must be deducted from the cost of fixed assets for the purpose of depreciation computation. We also take note of the ruling in Kinfra Export Promotion Industrial Parks Ltd. [ 2022 (4) TMI 809 - KERALA HIGH COURT] where it was held that even financial assistance without reference to a specific asset must be apportioned and deducted from the cost of the assets under Explanation 10 to section 43(1) of the Act. Thus, we hold that the sales tax deferment incentive received by the assessee qualifies for reduction from the actual cost of assets under Explanation 10 to Section 43(1) of the Act. The fact that the subsidy was received after the commencement of production does not alter its fundamental character, as its eligibility was directly tied to the assessee s fixed capital investment. We reject the assessee s contention that the mode of receipt determines the applicability of Explanation 10. The statutory liability retained by the assessee is equivalent to an inflow of funds, and thus, the benefit derived from it must be adjusted against the asset cost. Once the asset is merged into the block of assets, its individual character is lost, making the proportionate reduction of subsidy from the block cost mandatory. Thus, as the capital nature of the subsidy is undisputed, and once classified as such, its reduction from the cost of fixed assets follows as a natural consequence under Explanation 10 to section 43(1) of the Act. We direct the AO to recalculate depreciation in accordance with Explanation 10 to Section 43(1). The AO shall reduce the proportionate amount of subsidy from the actual cost of fixed assets, in line with the findings of the Co-ordinate Bench and re- compute depreciation on the revised cost of assets, following the provisions of Section 32 of the Act. Appeals filed by the Revenue are dismissed, and the directions issued to the AO by the Co-ordinate Bench for re-computation of depreciation are upheld. Computation of book profit u/s 115JB - We find merit in the argument of the AR that the AO has no power to tinker with the book profits unless the accounts are not prepared in accordance with Part II III of Schedule VI of the Companies Act, 1956. The Hon ble Supreme Court in Apollo Tyers Ltd [ 2002 (5) TMI 5 - SUPREME COURT] has categorically held that the AO has no authority to alter the book profit unless there is a violation of accounting standards or provisions of the Companies Act. The assessee s treatment of the subsidy is, therefore, in compliance with AS-12 and the Companies Act, 1956. The contention of the DR that the subsidy should be included in book profit due to its impact on depreciation is not supported by any express provision in Explanation 1 to Section 115JB. Since the sales tax subsidy was directly credited to the capital reserve and was never debited to the Profit Loss Account, the AO was not justified in making an addition to book profit under Section 115JB. The AO s adjustment in this regard is not justified. Accounts of the assessee were not prepared in accordance with Part II III of Schedule VI of the Companies Act, 1956 because the subsidy was not appropriately accounted for in book profits and AO, based on this observation, sought to re-compute book profit under Section 115JB - Hon ble Supreme Court in Apollo Tyers [ 2002 (5) TMI 5 - SUPREME COURT] has held that once the accounts are certified by the auditors and approved by shareholders, the AO cannot make adjustments unless there is fraud, misrepresentation, or non-compliance with Schedule VI of the Companies Act. There is no finding in the CIT(A) s order that the accounts were not in accordance with the Companies Act, apart from the difference in accounting treatment of the subsidy. A mere difference in accounting interpretation cannot be a reason to modify book profits under Section 115JB. Therefore, we hold that the accounts of the assessee were correctly prepared, and the AO s adjustment was beyond his jurisdiction.

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• 2025 (4) TMI 1080
  Estimation of income - bogus purchase - applying GP rate of 12.5% - HELD THAT:- Assessee has given details of purchases and also the source of purchases were from the books and made through account payee cheques. On similar facts in the original quantum proceedings u/s. 143(3) CIT (A) has applied GP rate of 12.5%. Before this Tribunal in the appeal for A.Y.2011-12, similar matter had come up wherein ld. CIT (A) has restricted the disallowance by applying GP rate of 12.5% on alleged bogus purchases, however, ld. AO has added the entire bogus purchases in the proceedings u/s.154 while computing book profit. Tribunal had deleted the said addition on book profit stating that it is beyond the scope of u/s.115JB. In any case, application of GP rate on bogus purchases has now been upheld in the case of Mohammad Haji Adam Co. [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT ] Accordingly, appeal filed by the Revenue is dismissed.

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• 2025 (4) TMI 1079
  Penalty u/s 270A - allegation of defective notice u/s 274 - assessee claimed that the AO in the show cause notice for levying penalty did not specifically pointed out as to whether the penalty was w.r.t. concealment of income or furnishing inaccurate particulars of income - HELD THAT:- Since the issue in hand which basically hinges on the alleged defective show cause notice issued in terms of section 274 of the Act, is exactly similar, following this Bench s decision in the case of Raj Kumar Agrawal [ 2024 (8) TMI 1531 - ITAT RANCHI] we, therefore, set aside the penalty order and direct the AO to delete the penalty imposed on the assessee. Appeals of assessee are allowed.

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• 2025 (4) TMI 1078
  Rejecting the application of appellant for registration u/s 80G(5)(iii) - CIT(E) was of the view that the objects of the trust were composite in nature i.e. were charitable and religious and hence, they clearly contravene the main conditions of section under section 80G(5) which is to the effect that none of the objects of the Trust should be religious in nature - CIT(E) was of the view that section 80G(5) of the Act applies to donations made to any institution or fund, but only if that institution or fund is established in India for charitable purposes. This means that the institution or fund must have only charitable objectives, and religious purposes cannot be included HELD THAT:- CIT(E) had cited only two of the objects out of various objects of the assessee/applicant trust come to conclusion that the applicant trust could not be granted registration since two of its objects were of a religious in nature. We observe that there were several other objects of the trust, which were not taken into consideration by CIT(E) while dismissing the application of for grant of registration u/s 80G(5). The assessee had also specifically submitted that it s expenditure on religious activities was within the threshold limit of 5% as specified under section 80G(5) however CIT(E) did not call for the necessary details with regards to expenditure incurred by the assessee on religious purposes to ascertain whether the expenditure incurred by the assessee was falling within the 5% exemption limit provided under section 80G(5). The matter is restored to the file of Ld. CIT(E) to consider the grant of registration u/s 80G of the Act afresh and to carry out necessary verification whether the assessee/applicant trust has expended/utilized less than 5% of it s total income towards religious purposes . If that be the case, the assessee/applicant trust may be granted registration, in accordance with law. Appeal of the assessee / applicant trust is allowed for statistical purposes.

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• Customs

• 2025 (4) TMI 1101
  Seeking for quashment of the complaint filed under Section 200 of the Code of Criminal Procedure Code, 1973 - smuggling of foreign made cigarettes in the guise of importing of electronic goods and computer parts - competent authority to grant sanction of prosecution - limitation in terms of Section 468 Cr.P.C/corresponding Section 514 of BNSS - maintainability of filing of the complaint case now beyond a period of three years. Value of the alleged smuggled goods being less than Rs. 2 crores in terms of Circular of the Customs Department dated 16.08.2022, the prosecution is liable to be dropped - HELD THAT:- On reading Clause 3.1(ii) it will clearly indicate that the Circular so far as the sanction for prosecution in respect of goods notified under Section 123 of the Act, the threshold value of the products have to be not more than Rs. 50.00 lakhs and it is Clause 3.1 which would be applicable in the case of the petitioners and not Clause 3.2. In the opinion of this Bench, Clause 3.2 is in relation to importation of trade goods which can be brought within the ambit of appraising cases where the importer makes certain willful mis-declaration in respect of the value as also in respect of the description of the goods, which is not attracted in the instant case. The petitioners herein have tried to import foreign made cigarettes worth more than Rs. 74.00 lakhs in the guise of importing electronic and computer parts. Thus, the contention of the petitioners that Clause 3.2 of the said Circular being attracted is not sustainable and the same is rejected. Additional Director General who has granted sanction for prosecution was competent authority or not - HELD THAT:- The learned Senior Standing Counsel for the Department drew the attention of this Court to the Circular dated 23.10.2015, whereby it has been explained in very categorical terms in Clause 4.6 and 7.1, both of which are reproduced hereunder to find that the Additional Director General also is one of the competent authorities who has been permitted to grant sanction except in respect of certain category of cases which stands covered under Clause 4.2.1.2 and 4.2.2 - The present case, therefore, does not fall under Clause 4.2.1.2 and 4.2.2. Hence, the said ground of the petitioners also is not sustainable and is answered in the negative. The filing the complaint case in August, 2023 is barred by limitation in terms of Section 468 Cr.P.C/corresponding Section 514 of BNSS - HELD THAT:- The petitioners have been prosecuted in addition to the offence under Section 132, also for the offences punishable under Section 135(1)(a) and 135(1) (b) of the Act and the same are punishable under Section 135(1)(i) (B) (C) where the punishment may be extended up to seven years with fine. Keeping that in view, on reading Section 468 Cr.P.C.,/corresponding Section 514 of BNSS, it would reflect that the period of limitation prescribed for an offence is only up till three years and that there is no limitation provided for an offence with a sentence of more than three years and as such the said period of limitation as is prescribed under Section 468(a) Cr.P.C.,/corresponding Section 514 of BNSS would not be applicable in the instant case. Conclusion - No strong case is made out by the petitioners calling for interference to the prosecution case initiated by the complainant/the respondent department. Nonetheless, insofar as criminal case having been instituted against the petitioners, the right of the petitioners to avail appropriate legal recourse available to them under the provisions of Cr.P.C.,/BNSS would be still left open. Petition dismissed.

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• 2025 (4) TMI 1100
  Liability to pay interest on the delayed payment of Integrated Goods and Services Tax (IGST) on imported goods - IGST paid after being pointed out by Directorate General of Revenue Intelligence (DRI) - submission of the appellant is that IGST levied on goods which are imported is an additional duty of Customs and therefore, the judgment in Mahindra and Mahindra [ 2023 (8) TMI 135 - SC ORDER] would apply - HELD THAT:- Additional duty of Customs is levied on the act of importation or the act of exportation under the Customs Tariff Act, 1975 in exercise of the powers under Article 246 read with entry 83 of List I (Union List) of the Seventh Schedule to the Constitution. IGST is levied on the supply in the course of imports under section 3 of the Customs Tariff Act, 1975 read with Section 5 of the IGST Act in exercise of the powers under Article 269 of the Constitution. While Additional duty of Customs gets credited to the Consolidated Fund of India and the divisible pool of tax revenues divided between the States and Union as per the recommendations of the Finance Commission, IGST does not get credited to the Consolidated Fund of India and gets divided between the State and Union as decided by the Parliament on the recommendations of the GST Council. Whatever rate of tax and interest apply to IGST in the course of inter-state trade also apply to supplies in the course of imports. Learned counsel for the appellant submits that in this case, the Commissioner did not apply the rate of duty applicable under section 50 of the CGST Act as made applicable to IGST through section 20 of the IGST Act. Instead, he confirmed interest as applicable under section 28AB of the Customs Act. It is his submission that for that reason alone, the demand of interest needs to be set aside. The appellant is correct in his submissions that interest was calculated as per the rates applicable under section 28AB. Conclusion - If there is delay in payment of IGST, interest as per Section 50 of the CGST Act, 2017 is payable. There is no reason to treat IGST paid on goods supplied in the course of international trade differently than the IGST paid on inter-state supply of goods. This matter deserves to be remanded to the Commissioner to re-determine the interest payable as applicable to the IGST. Appeal is allowed by way of remand.

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• 2025 (4) TMI 1099
  Suspension of the Customs Broker Licence No. R-308/CHA of the appellant under Regulation 19(1) of the Customs Broker Licensing Regulations, 2013 (CBLR, 2013) - forgery and failure to supervise employees properly - HELD THAT:- In view of the Orders of the Hon ble High Court of Madras dated 03.01.2020 [ 2020 (2) TMI 175 - MADRAS HIGH COURT] , both the impugned orders i.e., suspension order dated 09.06.2015 and the Order-in-Original (order of continuation of the suspension) dated 02.07.2015 have been quashed, and so the appeals have become infructuous and need to be closed.

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• 2025 (4) TMI 1077
  Maintainability of petition - availability of alternative remedy of appeal - Classification of imported goods - Solar Heat Strengthen Glass for Solar PV Modules - to be classified under CTH 70071900 or not - HELD THAT:- This petition need not be entertained as there is alternative efficacious remedy provided under section 128 of the Act. The petitioner is required to file appeal challenging the impugned final assessment of Bill of Entry before the appellate authority under section 128 of the Act. Whether the goods imported by the petitioner under description Solar Heat Strengthen Glass for Solar PV Modules was textured/tempered glass is a mater of disputed question of fact more particularly when the petitioner has classified the goods under CTH 70071900 depending upon the verification of the goods imported by the petitioner. Merely because similar goods imported by the petitioner have been classified as Solar Heat Strengthen Glass in place of Textured/Tempered Glass or vice versa, it cannot substitute the degree of proof required to hold that the present consignment or for that matter, all the different consignments of the petitioner are Solar Heat Strengthen Glass and not Textured/Tempered Glass be considered in absence of case records which would be available with the appellate authority. It is refrained from exercising extraordinary powers under Article 226 of the Constitution of India as the contention raised by the petitioner that there is no jurisdictional fact before the respondents to assume jurisdiction which requires this Court to exercise powers under Article 226 as the facts on record, as pleaded by the petitioner along with documents are required to be adjudicated under section 128 of the Act. Conclusion - This petition need not be entertained as there is alternative efficacious remedy provided under section 128 of the Act. The petitioner is required to file appeal challenging the impugned final assessment of Bill of Entry before the appellate authority under section 128 of the Act. Petition dismissed.

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• 2025 (4) TMI 1076
  Rejection of conversion of 698 shipping bills from Advance Authorisation Scheme to Draw Back Scheme - reason for rejection is that respondent applied for conversion beyond the period of three months from the date of Let Export Order (LEO) - HELD THAT:- Since the Gujarat High Court in MESSRS MAHALAXMI RUBTECH LTD. VERSUS UNION OF INDIA [ 2021 (3) TMI 240 - GUJARAT HIGH COURT] has held that the impugned circular to the extent of paragraph 3(a) is ultra vires Articles 14 and 19(1)(g) of the Constitution of India, as also ultra vires Section 149 of the Customs Act, 1962, the question of the Commissioner or the Original Authority relying on the said provision in the circular does not arise. The remaining 104 shipping bills shall be reconsidered by the Original Authority and an order shall be passed on merits and in accordance with law within 12 weeks from today. Before passing an order, personal hearing be also given to IOCL - appeal dismissed.

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• 2025 (4) TMI 1075
  Grant of scrips under the MEIS during the period June 2017 to August 2020 at the rate of 5% FOB value - HELD THAT:- Although the issue of classification of the Petitioners goods (involved in the present proceedings), has been contested on different levels, the dispute in the present Petition was restricted to the non-process of pending applications and non-granting of the reward/scrips under the MEIS as set out in the order dated 21st January 2025. In the event the classification dispute of the goods of the Petitioner is held against the Petitioner, and as a result thereof they are entitled to a lesser percentage of benefit under the MEIS, the excess amounts utilized under the scrips (granted pursuant to this order), will have to be refunded to the Authorities. 38 applications in respect of which the duty credit scrip was sanctioned @ 2% are not reflecting on the DGFT portal and hence, cannot be processed and 1 application dated 13.06.2020 is also not visible/reflecting to Respondent No. 3 on the DGFT portal and hence, cannot be processed. List the above matter for compliance on 29th April 2025.

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• 2025 (4) TMI 1074
  Absolute Confiscation - seizure of 10 kg silver granules bearing foreign markings - levy of penalty - valid basis to seize the silver which is less than 100 kg or not - opportunity to cross-examine - violation of principles of natural justice - HELD THAT:- Whereas the silver granules involved in the case are 10 kg and thus the seizure is unwarranted. In any case, the seizure, in this case was affected by a Superintendent, who is not competent to seize the silver less than 100 kg and thereby the seizure is vitiated. In this regard, Department relies on Co-ordinate Bench order in the case of Bula Ghosh Vs Commissioner of Customs, Kolkata [[ 2003 (7) TMI 147 - CESTAT, KOLKATA] ], in which it was held that Board Circular No. 394/233/88-Cus-As dated 11.06-1990 that the provision of Section 123 of the Customs Act, 1962 should not be invoked normally against the person who are found in possession of silver bullion of less than 100 kg. The expression used is normal and it does not debar the Revenue Officer to seize the silver in case they have believe and there is evidence to show that the same as of smuggled character. Therefore, Revenue Officers may seize the silver in special circumstances. But, in this matter, no any special circumstances to seize the silver bullion as Board Circular. There is no any evidence of the silver is smuggled otherwise appellant proved that he purchased under invoice which was onus on him. Conclusion - The Adjudicating Authority as well as Commissioner (Appeals) fail to consider appellant documents and also illegally denied the opportunity of cross-examination and believed one person statement and denied other without any judicious reason. Therefore, confiscation of silver granules as well as imposing penalty is not sustainable. Appeal allowed.

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• 2025 (4) TMI 1073
  Refund - Reassessment of Bill of Entry - clerical error/mistake in the B/E as the appellant has mistakenly mentioned particulars of invoice dated 19.11.2019 instead of invoice dated 22.11.2019 in the Bill of Entry No. 5793005 dated 22.11.2019 - HELD THAT:- The law on this issue has already been settled by the Hon ble High Court of Judicature at Bombay in the matter of DIMENSION DATA INDIA PRIVATE LTD. VERSUS COMMISSIONER OF CUSTOMS AND ANR. [ 2021 (1) TMI 1042 - BOMBAY HIGH COURT] in which the Hon ble High Court, while referring the law laid down by the Hon ble Supreme Court in the matter of ITC Ltd. [ 2019 (9) TMI 802 - SUPREME COURT (LB)] , has held that in the ITC decision the Hon ble Supreme Court has clarified that in case any person is aggrieved by an order which would include an order of re-assessment, he has to get the order modified u/s. 128 or under other relevant provisions of the Customs Act before he makes a claim for refund. This is because as long as the order is not modified the order remains on record holding the field and on that basis no refund can be claimed. The Hon ble High Court has also held that in ITC decision (supra) the Hon ble Supreme Court has not confined modification of the order through the mechanism of Section 128 only and it has been clarified therein that such modification can be done under other relevant provisions of the Customs Act also which would include Section 149 and Section 154 of the Customs Act. The reliance placed by the learned commissioner on the decision of the Hon ble Supreme Court in the matter of ITC, for coming to the conclusion that the assessment order has to be challenged by the importer in appellate forum and reassessment be done afterwards in commensurate with the order of the Appellate Authority, is also misplaced as in the light of the decision of the Bombay High Court in which the ITC decision has been explained by observing that even the order of self-assessment can also be modified u/s. 149 ibid. Conclusion - The proviso to Section 149 does not prohibit amendment of a Bill of Entry after clearance of goods if such amendment is based on documentary evidence which was in existence at the time the goods were cleared. The issue involved herein is no longer res integra and learned Commissioner (Appeals) is not justified in setting aside the Order of re-assessment dated 5.2.2020 and the Order-in-Original dated 5.3.2020 passed by the respective lower authorities - appeal allowed.

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• 2025 (4) TMI 1072
  Clearance of imported goods under Release order issued against DEPB Scrips by the DGFT - case of the department is that the DEPB Release Scrips against advice was issued fraudulently therefore, the import made on the basis of Release advice which is issued on the basis of fraudulent DEPB is liable for custom duty - HELD THAT:- The entire argument of the Learned Counsel is that since the DEPB Scrips and/or Release Advice has not been cancelled by the DGFT the same stand valid and import thereunder cannot be questioned. In these circumstances, it is found that the case of the department is that the DEPB Scrips was obtained fraudulently therefore any import made on that basis cannot be extended the benefit of duty free clearance under DEPB Scheme. However, despite the direction from this Tribunal, the Revenue could not produce the status report of the DEPB license/release advice issued there under. Therefore, the matter needs to be remanded to the adjudicating authority for ascertaining status of DEPB License/release advice issued by DGFT and thereafter to pass a fresh order on all the issues. Conclusion - Due to lack of clarity on the status, the Tribunal remanded the matter to the adjudicating authority for a fresh de novo adjudication after ascertaining the status of the DEPB License/Release Advice issued by DGFT. Appeal is allowed by way of remand to the adjudicating authority.

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• Insolvency & Bankruptcy

• 2025 (4) TMI 1071
  Payment of interest for delayed payment - no agreement between the parties for levy of any interest on delayed payment - relevant date for calculation of interest - whether Section 9 Application can be accepted on the basis of invoices having total amount claimed as operational debt with interest component which is arrived based on a condition contained in the invoices for delayed payment? - HELD THAT:- The Code defines the term operational debt under Section 5 (21), wherein interest has not been specifically mentioned as a part of the debt, unlike in the definition of financial debt provided under Section 5 (8) of Code, wherein the legislation has expressly included the term interest to be a part of the debt, that can form a part of the claim against the Corporate Debtor. This deliberate difference in the language used for both terms by the legislation, clearly provides that interest could not have been accepted by the Adjudicating Authority as a part of the default amount as claimed by the Respondent No 1. It is noted that there is an explicit mention of interest in financial debt but such a provision does not exist for operational debt - Accordingly, the interest can be claimed only if there is an explicit agreement or contract between the parties. The Adjudicating Authority has relied on payment of interest paid in February 2021 and June 2021. However, no document has been produced by the Respondent No.1 substantiating the days in which payment was to be made. The Adjudicating Authority has not delved into the issue of the payment of interest with respect to the operational debt as defined in the code and has relied on the invoices which contains an interest clause of 18% on account of delayed payment - the argument of the Appellant that the Code does not provide the AA with the power to interpret a document as in the facts and circumstances of the case is agreed upon. In the absence of any agreement between the parties, the calculation of interest cannot be agreed by us and the claim with respect to interest on pending invoices is not sustainable. In the absence of any agreement between parties, regarding payment of interest on delayed payment, the claim with respect to interest on pending invoices is not sustainable, and on this ground the captioned Application is liable to be dismissed. Conclusion - The claim of the Operational Creditor with respect to the interest is not maintainable and, in that situation, the claim does not meet the threshold for admitting Section 9 Application. Also it is found that the objective of the Code, that is, maximising the value Debtor s assets, is unlikely to be served by initiating CIRP against the Appellant. The amount deposited with the NCLAT, is released to Respondent No.1 to discharge the liability with respect to the Principal amount - Appeal allowed.

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• 2025 (4) TMI 1070
  Maintainability of Section 7 application filed by the Appellant - seeking to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor - existence of debt which was due and payable by the Corporate Debtor qua the Appellant with incidence of default - Section 7 application was filed with the intent of insolvency resolution or otherwise. Whether there existed a debt due and payable by the Corporate Debtor to the Appellant-Debenture Trustee with an incidence of default justifying initiation of CIRP under Section 7 of the IBC? - HELD THAT:- The Appellant was aware of the restructuring proposal is amply borne out from the contents of the above communication of 28.03.2022 wherein there is also a clear advertence to the fact that the Corporate Debtor was seeking a NOC from them and that they had agreed and confirmed that upon receipt of the Rs.152 Cr from the Corporate Debtor in their Escrow Account, they would issue the requisite NOC. Interestingly, the letter is also marked to all debenture holders which reaffirms the fact that the Debenture Holders and the Appellant-Debenture Trustee were keeping each other informed of their intent on the modalities of how to proceed with the restructuring and moratorium proposal - it was always in the notice and knowledge of the Appellant that the Corporate Debtor and the Edelweiss Group were negotiating a restructuring proposal. It is also found that these correspondences and reference to various discussions between the parties mentioned in the letters were part of the record before the Adjudicating Authority. The Appellant and the Debenture Holders by their express conduct had agreed to implement the restructuring and moratorium proposal. No material has been placed on record to show that the Appellant had ever questioned the ECLF on the instructions being issued by them in furtherance of the moratorium. Neither did the Appellant ever question the ECLF that they cannot speak on behalf of the other entities of the other Edelweiss group. With the conclusion of the Sapphire transaction, the moratorium had come into force. Hence, there was no debt due or payable until September 2023. That being so there was no question of any default having been committed by the Corporate Debtor. In the present case, the Adjudicating Authority therefore did not commit any mistake in going through the fact situation of the present case and come to the finding that with the conclusion of the Sapphire transaction, the restructuring and moratorium proposal had commenced. Thus, to answer the first issue, the Adjudicating Authority had correctly held that on account of moratorium being in place, there was no occasion for default and hence the Section 7 application was not fit for admission. Whether the purpose of the Section 7 application in the present case was with the intent of insolvency resolution of the Corporate Debtor or otherwise? - HELD THAT:- It is clear that the Corporate Debtor was suddenly besieged by a fast-paced flurry of coercive steps taken by the Appellant which were geared towards recovery of debt inspite of the Corporate Debtor having already paid Rs 152 Cr. under the Sapphire transaction to the Appellant on the underlying previous understanding that grant of moratorium for 18 months was subject to compliance in concluding the Sapphire transaction. The Corporate Debtor had held their end of the bargain by carrying out the Sapphire transaction within the time-line which was fixed for 25.03.2022. The conclusion of the Sapphire transaction was also communicated to ECLF. The Appellant on the instructions of ECLF also acted upon the terms of the restructuring proposal by releasing the charge on property and Rs 9.33 Cr. This was clearly a sign to the Corporate Debtor that the restructuring and moratorium proposal stood confirmed by the Appellant. The Appellant was aware of the intent of the majority debenture holders of agreeing to the restructuring and moratorium proposal and accordingly also acted on their directions like release of charge on Bandra property, release of Rs 9.33 Cr. etc. towards extending moratorium until September 2023. The pattern of conduct prior to the Section 7 petition shows that both Appellant and the majority debenture holders were working on a common understanding that the restructuring proposal was a done deal. There seems to be substance in the contention of the Corporate Debtor that the Appellant along with the Debenture holders had engineered the default thereby acting in a malafide manner causing grave prejudice to the interests of the Corporate Debtor. The Appellant as Debenture Trustee instead of acting with fairness in protecting the interests of the Corporate Debtor by their conduct seem to have acted in unison with the majority Debenture Holders in catalysing their dubious designs to drag the Corporate Debtor towards insolvency. The intent of the Appellant behind orchestrating the default was to push the Corporate Debtor into insolvency despite having substantial and valuable assets. There was sufficient proof to substantiate that the Appellant was trying to take undue advantage of the situation to bring the Corporate Debtor under the rigours of CIRP which manifest their ulterior and pernicious motive - the Adjudicating Authority having gone through the documents placed before it and after hearing rival contentions of both the parties, has duly applied its mind based on the totality of circumstances demonstrated before it, in returning the findings that the intent behind initiating the CIRP proceedings in the present facts of the case was something other than insolvency resolution. Conclusion - i) The moratorium is validly in place until September 2023, precluding any default and debt becoming due and payable, thus justifying dismissal of the Section 7 application. ii) Section 7 application was not filed with the intent of insolvency resolution but rather with an ulterior motive to coerce the Corporate Debtor. There are no cogent reasons warranting interference in the impugned order - appeal dismissed.

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• Service Tax

• 2025 (4) TMI 1098
  Applicability of service tax - late payment charges recovered from UPPCL under Section 66E(e) of the Finance Act, 1994 - agreeing to obligation to tolerate the situation of delayed payment - HELD THAT:- In the case of Madhya Pradesh Poorva Kshetra Vidyut Vitran Co. Ltd. Versus Principal Commissioner CGST and Central Excise Bhopal [ 2022 (4) TMI 773 - CESTAT NEW DELHI] Tribunal has held that it is not possible to sustain the levy of service tax on the amount collected by the appellant for late payment surcharge, meter rent and supervision charges. In the case of South Eastern Coalfields Ltd. V/s Commissioner of Central Excise Service Tax, Raipur [ 2020 (12) TMI 912 - CESTAT NEW DELHI] has held that It is, therefore, not possible to sustain the view taken by the Principal Commissioner that penalty amount, forfeiture of earnest money deposit and liquidated damages have been received by the appellant towards consideration for tolerating an act leviable to service tax under Section 66E(e) of the Finance Act. Conclusion - i) The services related to transmission and distribution of electricity are naturally bundled in the ordinary course of business and are required to be treated as provision of the single service of transmission and distribution of electricity which gives the bundle its essential character. ii) Penalties and liquidated damages are safeguards to enforce contractual compliance and cannot be construed as taxable consideration for tolerating an act or situation under Section 66E(e). There are no reason to interfere with the impugned order and the same is sustained - The appeal filed by the Department is dismissed.

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• 2025 (4) TMI 1069
  Refund of pre-deposit made by the appellant under a different registration number - mentioning a wrong Service Tax Code (STC) on the pre-deposit challans - HELD THAT:- The Principal Bench of this Tribunal in the case of Sahara India TV Network vs. Commissioner of Central Excise and Service Tax, Noida [ 2015 (10) TMI 2037 - CESTAT NEW DELHI] held that In this case the wrong registration number happens to be of the appellant itself though belonging to its different unit. It could as well have been that by mistake the registration number of a different assessee was mentioned in which case it could not have been asserted that Service Tax was deposited in the account of that assessee whose registration number was wrongly mentioned in the challan (though its name did not appear therein) and not in the account of the person whose name was mentioned in the challan. Such mistakes can happen and it can scarcely be anybody s case that such mistakes are beyond rectification. In this case, the Assistant Commissioner, Service Tax in-charge of the appellant s Mumbai unit has categorically mentioned that the impugned amount of service tax (Rs. 25 lakhs) deposited has not been utilised towards paying service tax by the Bombay unit. In the instant case as well it is noted that the appellant had submitted the affidavit and a Chartered Accountant Certificate that the disputed amount has not been utilized nor any refund been taken. Hence, we hold that the instant case stands covered by this decision. Similarly, in the case of Welspun Corp Ltd. vs. C.C.E. S. T., Rajkot [ 2023 (2) TMI 780 - CESTAT AHMEDABAD] , the Ahmedabad bench of this Tribunal was dealing with service tax liability which was wrongly paid in service tax registration of Head office instead of Service tax registration of manufacturing unit, the Tribunal relied on Trade Notice No. 03/2014-S.T. dated 10 July 2014 issued by Commissioner of Central Excise, Customs and Service Tax, Cochin Commissionerate read with Circular No.58/7/2003 (F.No.157/2/2003Cx.A) dated 20.05.2003 and held that the service tax paid under different registration but by the same company cannot tantamount to non-payment of service tax and Revenue was given liberty to make necessary adjustment in their account if required. From the above circular it is clear that the discrepancy such as payment of service tax under wrong registration can be adjusted against the correct registration for which the service tax is actually due. Accordingly, in the light of the above circular, the department could have made the necessary adjustment while scrutinizing the said refund claim. The Hon ble Gujarat High Court in Devang Paper Mills Pvt. Ltd., Vs. UOI [ 2016 (1) TMI 389 - GUJARAT HIGH COURT] held that It is not even the case of the respondents that the petitioner had any other code by the number ADDCD7232FEM001 and for which there was separate manufacturing activity inviting separate duty liability. Indisputably, thus, the petitioner had singular duty liability for which the actual payment was also made. Under the circumstances, the impugned communication dated 05.05.2015 and notice dated 21.07.2015 are quashed. The respondents are directed to give credit of the duty paid by the petitioner for a sum of Rs.22.15 lacs by making necessary accounting entries on the basis that the same was paid at the relevant time. If there after any sum remains unpaid, it would be open for the Department to take further action in accordance with law. In view of the same, the Board s Circular and the Trade Notice, the appellant is entitled for the refund of the pre-deposit. Conclusion - The appellant is entitled for the refund of the pre-deposit. Appeal allowed.

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• 2025 (4) TMI 1068
  Levy of service tax - Business Support Services - appraising chares collected - HELD THAT:- The issue involved in this appeal involving identical facts has already been decided in the case of M/S. THE RASIPURAM AGRICULTURAL PRODUCERS CO OP. MARKETING SOCIETY LTD. (S. NO. 318) VERSUS COMMISSIONER OF GST AND CENTRAL EXCISE, SALEM [ 2024 (2) TMI 200 - CESTAT CHENNAI] wherein it has been held the appellant is borrowing the money from the bank on its account and in turn lending it to their farmer members on interest. The services rendered by the appellant are relatable only to its members and not to the bank and the charges collected for appraising jewels before sanctioning of loans are in the nature of cost incurred by the appellant for sanctioning of loans. As such, there is no BSS rendered in the instant case. As such, we hold that the demands raised under the impugned orders demanding service tax under Auctioneer Service and BAS are not maintainable. The impugned Order-in-Appeal cannot be sustained and ordered to be set aside - Appeal allowed.

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• 2025 (4) TMI 1067
  Construction of a new building or civil structure or a part thereof, primarily for the purposes of commerce or industry - Works contract services of construction rendered to education institutions and government office buildings - construction of medians can be considered as works contract in respect of roads or not - time limitation. Whether the works contract services of construction rendered to education institutions and government office buildings can be treated as construction of a new building or civil structure or a part thereof, primarily for the purposes of commerce or industry? - HELD THAT:- The adjudicating authority has misdirected himself in rendering the finding that it is the bounden duty of the assessee to ensure that they satisfy the conditions set out for making any claim regarding exempted services. Admittedly, the Department is seeking to tax the services of the appellant as works contract service under clause ii(b) of the explanation to Section 65(105)(zzzza), as being construction of a new building primarily for the purposes of commerce or industry . Unlike a statutory exemption notification issued in exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, prescribing conditions, the circulars issued by CBEC are under Sec. 37B of the Central Excise Act, 1944, as applicable for the purposes of service tax vide Sec. 83 of Finance Act, 1994 and are instructions and directions issued to the central excise officers for the purpose of uniformity in the classification of excisable goods or with respect to levy of duties. The Hon ble Supreme Court has held in CCE, Bolpur v Ratan Melting Wiring Industries, [ 2008 (10) TMI 5 - SUPREME COURT] , inte-alia, that so far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. The definition of taxable service of works contract under Section 65(105)(zzzza) of the Act excludes works contract in respect of roads. The phrase in respect of indicates in connection with, as regards , or with reference to , in its grammatical sense. There is no dispute that the work entrusted with the appellant is that of construction of center-medians in Coimbatore on Highways No.67 (Trichy Road). The Adjudicating Authority concedes the same. However, the service tax is sought to be levied on the ground that such service is rendered to an Advertising Agency who in turn is engaged in providing advertising which is done in pure commercial considerations. Tribunal in M/s. RGP Construction versus The Commissioner of CGST Central Excise, Salem, [ 2024 (7) TMI 1168 - CESTAT CHENNAI] . Therefore, considering the aforesaid decisions of this Tribunal which are binding, the demand of service tax on the works contract services rendered by the appellant to educational institutions that has been upheld in the impugned OIO cannot sustain and is therefore hereby set aside. Whether the construction of medians can be considered as works contract in respect of roads? - HELD THAT:- The definition of works contract service, while excluding works contract in respect of roads, does not contain any stipulations as to the identity of the service recipient, much less the nature of the service recipient s business considerations, and the said contention of the Adjudicating Authority is extraneous in determining the appellant s entitlement to the exclusion from the ambit of the definition as claimed. When the work carried out by the appellant is indisputably conceded as that of constructing center-medians on Highway No.67 (Trichy Road), and since center-medians essentially demarcate and divide the road, the works contract undertaken by the appellant of constructing center medians is clearly a works contract in respect of roads so as come within the exclusion specified in the definition. The service tax demand on this activity of the appellant is unsustainable and is therefore set aside. Whether the demand is barred by limitation? - HELD THAT:- The appellant s claim that it has not discharged service tax on the works contract services of construction rendered to educational institutions on a Bonafide belief taking note of the clarifications issued by the Board as per the Circular dated 17-09-2004 cannot be discounted. There is no positive act of wilful suppression or misstatement of facts by the appellant that has been established by the Department. In these circumstances, it is found that the adjudicating authority has grossly erred in invoking the extended period of limitation. The demand is therefore time barred and the issue of limitation is answered in favour of the appellant. Conclusion - i) The demand for service tax on construction services rendered to educational institutions and government buildings, holding that such constructions do not fall within the taxable ambit of works contract services primarily for commerce or industry. ii) Since center medians demarcate and divide roads, their construction falls within the exclusion. Therefore, the Tribunal held that the demand of service tax on construction of center medians is unsustainable and set it aside. iii) The extended period of limitation was wrongly invoked, and the demand is time-barred. Appeal allowed.

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• 2025 (4) TMI 1066
  Liability to service tax on CENVAT Credit availed for input services used exclusively for providing exempted services, specifically the commission paid for exempted insurance policies - CENVAT Credit for services rendered in the non-taxable territory of Jammu Kashmir - Extended period of limitation. CENVAT Credit for services rendered in the non-taxable territory of Jammu Kashmir - HELD THAT:- From the License, it is seen that it is a general license to operate as an Insurance Agent. Such agent may procure Insurance business requiring Service Tax payment or which may be exempt from payment of Service Tax. Thus, this License is used as a whole and there are no separate Licenses issued for procuring taxable and exempt insurance business - It is observed that in respect of insurance of the person under Kisan Credit Scheme, the Service Tax is exempted. Liability to service tax on CENVAT Credit availed for input services used exclusively for providing exempted services, specifically the commission paid for exempted insurance policies - HELD THAT:- When the input service is commonly used for providing both the taxable and exempt services, then the CENVAT Credit should either be reversed on proportionate basis in terms of Rule 6 (3A) or the assessee should pay six percent of the value of the exempted services in terms of Rule 6(3)(i) of the said Rules. Thus, there is no bar to take the CENVAT Credit in respect of commonly used input services, so long as one of these two options are followed by the assessee. The only bar is when the service is used exclusively for providing exempted services. In the present case, from the documentary evidence it is clear that the Agent is providing both the services commonly. Therefore, the Invoice raised by him showing the Service Tax component may consist of both the taxable and exempt insurance services. This would fall under the category of common service and not under the category of exclusively exempt service. The Revenue has not brought in any specific evidence to show that the Insurance Agent is rendering services to such exempted product for which they have raised any Invoice showing the Service Tax payment thereon, which has been taken as CENVAT Credit by the appellant. Extended period of limitation - HELD THAT:- There are considerable force in the arguments of the appellant about the non-applicability of suppression clause in their case. First of all, they are a reputed Public Sector Undertaking. They have filed all their statutory Returns under Service Tax and Income Tax and under the Companies Act provisions, before the respective authorities. Knowing fully well they are not in a position to maintain separate accounts, they have taken the CENVAT credit commonly accruing to them in respect of the taxable and exempt insurance services and have been regularly reversing the CENVAT Credit in terms of Rule 6 (3)(i), which is also reflected in the ST-3 Returns. Hence, no case whatsoever, has been made against the appellant for wilful suppression, with an intent to evade payment of Service Tax. Therefore, the confirmed demand to the extent of the extended period is legally not sustainable. Conclusion - i) In respect of common input services, the appellants have been regularly reversing the CENVAT Credit in terms of Rule 6(3)(i) of CCR 2004. ii) The Department has not brought in any evidence to the effect that the appellant has taken CENVAT Credit in respect of any input service which is exclusively used in the provision of exempted services. iii) The documentary evidence brought in by the appellant shows that the Insurance Agent is authorized to take up both the taxable and exempted insurance services. iv) The confirmed demand to the extent of the extended period is legally not sustainable. The appeal is allowed on merits and partly on account of time bar.

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• 2025 (4) TMI 1065
  Condonation of delay in filing the appeal before the Commissioner (Appeal) - power of Commissioner (Appeals) to condone delay beyond the prescribed period - HELD THAT:- It is observed that the appeal was to be filed before the Commissioner (Appeal) within two months of the date of the receipt of the Order-in-Original by the appellant. As per the proviso Commissioner (Appeal) has been granted the power to condone delay of one month in filing the appeal on sufficient cause being shown. In the present case appeal was filed before the Commissioner (Appeal) after more than three months from the date of receipt of Order-in-Original. Hence, Commissioner (Appeal) has rightly held that appeal was filed beyond the prescribed period of limitation and has dismissed the same on this ground alone. This issue is squarely covered by the decision of Hon ble Supreme Court in the case of SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [ 2007 (12) TMI 11 - SUPREME COURT] , wherein it has been held that Commissioner (Appeals) could not condone the delay beyond the 30 days in filing the appeal before him. Conclusion - Admittedly the appeal has been filed beyond the period which could have been condoned by the Commissioner (Appeal). Hence present case is squarely covered by the decision of Hon ble Supreme Court in case of Singh Enterprises. There are no merits in this appeal filed by the appellant - appeal dismissed.

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• 2025 (4) TMI 1064
  Levy of service tax on construction of residential complexes, particularly the period prior to and beyond 01.07.2010 - Demand calculation under the composition scheme as amended retrospectively by the Finance Act, 2017 - invocation of extended period of limitation. Levy of service tax on construction of residential complexes, particularly the period prior to and beyond 01.07.2010 - HELD THAT:- The matter is no longer res-integra and demand will not sustain on this ground itself. Reliance is placed on various judgments cited by the appellant. For the period beyond 01.07.2010, it is on record that in terms of the amendment brought in Rule 2A retrospectively amended for the period beyond 01.07.2010, the amount payable would have to be re-calculated. Admittedly, this provision has not been taken into account while calculating the duty liability for the appellant during the relevant period. Therefore, we consider that this aspect needs to be remanded back to the Adjudicating Authority who shall take into account the amendment provision and recalculate the amount of duty recoverable from the appellant. Further, if any amount has been paid towards duty liabilities for the period for which the demand has been made, this also needs to be adjusted against recalculated demand. Time Limitation - HELD THAT:- The appellant has a case in as much as during that period, apart from the fact that there were certain confusion about the leviability of service tax on construction services as well as on rental service and differing judgments, mode of calculation, allowing for composition scheme etc., were posing interpretational issues. Therefore, there was a genuine confusion prevailing during the relevant period. This gets further manifested when the Government itself brought retrospective amendment for the same period. In view of the same, it is found that in the absence of any other cogent and strong evidence clearly indicating any deliberate intent or attempt to evade the tax, the extended period is not invokable in the facts of the case. Renting of immovable property - HELD THAT:- In respect of demand on renting of immovable property, many changes occurred in taxation of renting of immovable property during the relevant period. In many decisions including the Home Solutions Retail India Ltd., Vs Union of India decision of Hon ble Delhi High Court [ 2009 (4) TMI 14 - DELHI HIGH COURT] , it is held that Section 65(105)(zzzz) does not in terms entail that the renting out of immovable property for use in the course or furtherance of business of commerce would by itself constitute a taxable service and be exigible to service tax under the said Act. The obvious consequence of this finding is that the interpretation placed by the impugned notification and circular on the said provision is not correct. Consequently, the same are ultra vires the said Act and to the extent that they authorize the levy of service tax on renting of immovable property per se, they are set aside. Conclusion - i) Service tax was not leviable on construction of residential complexes prior to 01.07.2010, and retrospective amendments must be considered for the period thereafter. ii) Where retrospective amendments clarify legislative intent amid judicial conflict, extended limitation periods cannot be invoked absent evidence of deliberate evasion. iii) Renting of immovable property was not taxable service per se until retrospective amendments were introduced and upheld, thus demands and penalties for the disputed period are barred by limitation. iv) Recalculation of demand must reflect the amended valuation rules and adjust payments already made. The invocation of extended period cannot be sustained and therefore, the demand has to be restricted within the normal period, along with interest applicable thereon - appeal disposed off by way of remand.

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• Central Excise

• 2025 (4) TMI 1097
  Denial of Cenvat credit on capital goods purchased by the appellants - multiple contracts forming part of an Engineering, Procurement, and Construction (EPC) turnkey project - HELD THAT:- The issue involved in the matter is squarely covered by the decision in the case of Larsen Toubro Limited [ 2024 (8) TMI 395 - CESTAT KOLKATA] , wherein it was held that appellant-Tata has correctly taken CENVAT Credit on the capital goods procured by them which have been ultimately used in the manufacture of final products. In these circumstances, the denial of CENVAT Credit is not sustainable. The appellant has correctly taken the Cenvat credit on capital goods procured by them which were ultimately used in the manufacture of their final product, therefore, Cenvat credit cannot be denied to the appellant and the same is available to the appellant. Appeal allowed.

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• 2025 (4) TMI 1063
  Rate of duty - Cassification of the goods manufactured by the appellant - classifiable as Jarda Scented Tobacco (JST) covered by Tariff Entry 2403 9930 or as Chewing Tobacco (CT) covered by Tariff Entry 2403 9910 - Evasion of payment of higher rate of duty - levy of interest and penalty - HELD THAT:- The issue is no longer res integra and has been decided by the Apex Court by a recent decision in Commissioner of Central Excise, Ahmedabad versus Urmin Products P. Ltd Ors. [ 2023 (10) TMI 1112 - SUPREME COURT] , where the Apex Court considered the issue with reference to seven separate appellants and the appeal filed by the revenue against the appellant was considered at Sl. No.3. In the said decision, the Apex Court concluded that the assessee had mis-classified the goods from JST to CT for evading payment of higher duty. The issue was, therefore, decided against the appellant and in favour of the Revenue. The relevant observations of the Apex Court as rendered in the lead matter of Urmin Products and which has been held to be squarely applicable to the facts of the present appellant. The learned counsel for the appellant submits that the decision of the Apex Court in Urmin Products is not applicable to the present appeal as the appeal before the Apex Court had arisen from the order of the Tribunal dated November 14, 2018, whereby the order passed by the Commissioner (Appeals) was set aside, where the challenge was to the order passed by the Assistant Commissioner dated August 28, 2015 for the period, June 2015 to August 2015, whereas the present appeal arises out of the order dated July 16, 2018 passed by the Adjudicating Authority. There are no merits in the submissions of the learned Counsel, for the simple reason that the issue decided by the Adjudicating Authority in the present case is whether the appellant misclassified and mis-declared their manufactured goods as Chewing Tobacco instead of Zarda Scented Tobacco . Levy of interest - HELD THAT:- The appellant having failed to discharge the duty liability on the goods manufactured by them as JST, they are liable to pay interest on the duty amount, which is automatically leviable. As noted by the Adjudicating Authority, the decision of the Apex Court in Pratibha Processors versus Union of India [ 1996 (10) TMI 88 - SUPREME COURT] , that interest is compensatory in character and is imposed on an assessee who was withheld payment of any tax as and when it is due and payable, and that the levy of interest is in accordance with the actual amount of tax withheld. Levy of penalty - HELD THAT:- The Apex Court in Urmin Products has also noted the conduct of the appellant in suppressing the facts from the Department by mis-declaring and mis-classifying their goods from time to time was with intent to evade payment of central excise duty. In view thereof, the Adjudicating Authority has rightly confirmed the penalty of equivalent amount under the provisions of Rule 18 of Unmanufactured Tobacco Packing Machines (Capacity Determination Collection of Duty) Rules, 2010, read with section 11AC of the Act and rule 25 of Central Excise Rules, 2002. Conclusion - The appellant s goods are correctly classifiable as Jarda Scented Tobacco under Tariff Entry 2403 9930, not as Chewing Tobacco. Appeal dismissed.

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• CST, VAT & Sales Tax

• 2025 (4) TMI 1062
  Recovery of amount on account of the defendant s failure to furnish Form-C for availing concessional Central Sales Tax (CST) rates - non-compliance with the mandatory pre-institution mediation requirement under Section 12A of the Commercial Courts Act, 2015 - HELD THAT:- The plaintiff had, unequivocally, denied receiving copies of Form-C in question. Thus, the onus to prove that copies of Form-C had been provided to the plaintiff was required to be discharged by the defendant. The defendant had not produced any document on record to show that it had forwarded Form-C in question to the plaintiff. Although the defendant has now sought to produce the copies of Form-C in these proceedings by filing an application for producing additional evidence, the defendants have not produced any letter or communication forwarding the said Form-C to the plaintiff. There is no reason for the plaintiff to have suffered an additional liability of tax in the event Form-C was provided by the defendant to the plaintiff as claimed. Producing Form-C, at this stage, is of little assistance to the plaintiff as the plaintiff has already entered into a settlement for payment of the differential tax for seeking waiver of the interest on the said sum as demanded by the concerned tax authorities. The plaintiff is entitled to receive the amount of Rs. 3,88,294/- along with remaining consideration as differential tax along with the balance consideration. Whether the suit is liable to be dismissed for non-compliance with the provision of Section 12A of the CC Act? - HELD THAT:- Undisputedly, the plaintiff had filed an application under Order XXXVIII Rule 5 of the CPC for seeking attachment of the amount claimed. In terms of the Agreement, the defendant was required to deposit the remaining consideration of 5% in a fixed deposit, which would be withdrawn by the plaintiff on expiry of the warranty period of three years. During this period, the plaintiff was required to be secured by a bank guarantee. Admittedly, the bank guarantee had been withdrawn. Thus, it is understandable from the stand point of the plaintiff that it required to be urgently secured in respect of its claim - the suit could not be dismissed as barred by law on account of Section 12A of the CC Act. It is also relevant to note that the Supreme Court in M/s Patil Automation Private Limited and Ors. v. Rakheja Engineers Private Limited [ 2022 (8) TMI 1494 - SUPREME COURT ] had held that the provisions of Section 12A of the CC Act are mandatory. However, it was clarified that the decision would be prospective. Conclusion - i) The plaintiff is entitled to recover Rs. 9,54,094/- along with interest, including Rs. 3,88,294/- as differential tax paid due to non-furnishing of Form-C by the defendant. ii) The suit is not barred or liable to be dismissed for non-compliance with Section 12A of the CC Act. Appeal dismissed.

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• 2025 (4) TMI 1061
  Challenge to revisional show-cause notices - power of Revisional Authority, under Section 32 of the Telangana Value Added Tax Act, 2005, to issue revisional show-cause notices challenging the appellate order passed in favor of the petitioner - HELD THAT:- A plain reading of Section 32 (1) of VAT Act makes it clear that the Revisional Authority is competent to initiate proceedings to revise, modify or set aside the order. Pertinently, the learned counsel for the petitioners has not assailed the show-cause notices on the ground of competence. The provision in no uncertain terms makes it clear that the Revisional Authority is indeed competent to take a different view from the view taken by the Appellate Authority. There are substance in the argument of learned Special Government Pleader for State Tax that scope of interference at the stage of show-cause notice is very limited. The necessary ingredients on which interference can be made at the stage of show-cause notice are absent in the present cases. At the cost of repetition, the question of competence/jurisdiction is not involved in the present matters. Whether the appellate order discloses necessary ingredients to show that it is prejudicial to the interest of Revenue or not can also be raised while filing objection/response to the show-cause notice. This is said, in view of the principles laid down by the Supreme Court in Mohd. Ghulam Ghouse [ 2004 (1) TMI 378 - SUPREME COURT] . The impugned show-cause notices cannot be interfered with. Resultantly, interference is declined. The petitioners may file their reply to the show-cause notices by taking all possible grounds within three weeks from today. The Competent Authority shall consider the reply and decide the matters, in accordance with law, expeditiously. Conclusion - The revisional show-cause notices issued under Section 32 of the VAT Act are valid and maintainable. Petition disposed off.

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• 2025 (4) TMI 1060
  Legality of remanding the matter while recording the finding in favour of the revisionist - HELD THAT:- It is not in dispute that against the assessment order, first appeal was filed by the revisionist, which was partly allowed. Against the first appellate order, both the revisionist and revenue preferred second appeals out of which, the appeal filed by the revisionist was allowed and the appeal filed by the revenue was dismissed by remanding the matter back for fresh innings to the assessing officer to adjudicate the case as fresh while fresh material was available on record before the Tribunal to take the decision. This Court in the case of Sugar General Engineering Corporation has held that all the materials relating to the nature of transaction are available and on the basis of such materials, decision is only required to be taken. Therefore, in my view, remand of the case is not justified. Deputy Commissioner (Appeals) in my opinion should decide the appeal on merits as its own stage. Conclusion - The Tribunal erred in remanding the matter for fresh assessment despite having recorded findings in favor of the revisionist and dismissing the revenue s appeal. The impugned order passed by the tribunal is set aside. The matter is remanded to the Tribunal to decide the matters by passing reasoned and speaking order, after hearing all the stakeholder - revision allowed by way of remand.

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