TMI Tax Updates - e-Newsletter
April 23, 2025

Case Laws in this Newsletter:

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

TMI Short Notes

1. Comprehensive Reform in International Taxation and Treaty Implementation : Clause 159 of Income Tax Bill, 2025 Vs. Section 90 of Income-tax Act, 1961

  Bills:

2. Addressing Cross-Border Taxation of Foreign Retirement Benefits : Clause 158 of Income Tax Bill, 2025 Vs. Section 89A of Income Tax Act, 1961

  Bills:

3. Continuity and Reform in Tax Relief for Irregular Income : Clause 157 of the Income Tax Bill, 2025 Vs. Section 89 of the Income Tax Act, 1961

  Bills:

4. Relief to resident individual taxpayers with lower and middle incomes by reducing their effective tax liability : Clause 156 of the Income Tax Bill, 2025 Vs Section 87A of the Income Tax Act, 1961

  Bills:

5. The Structure and Implications of Income Tax Rebates : Clause 155 of the Income Tax Bill, 2025 Vs. Section 87 of the Income-tax Act, 1961.

  Bills:

6. Constitutional Limits on GST: Principle of mutuality insulates transactions between clubs/associations and their members

  GST:

Articles

1. How to Check the Status of Your 80G(5) Registration Application Online

   By: Ishita Ramani

2. CONSEQUENCES OF NON-RECOVERY AND NON-REMITTANCE OF ‘ESIC’ DUES RECOVERED FROM THE EMPLOYEES BYTHE PRINCIPAL EMPLOYER.

   By: DR.MARIAPPAN GOVINDARAJAN

3. An Introduction to Customs classification under Indian Customs Laws

   By: YAGAY andSUN

4. Enforcement Powers of Customs Officers

   By: YAGAY andSUN

5. Understanding the Compounding of Contraventions under FEMA, 1999

   By: YAGAY andSUN

6. Environmental audits in India

   By: YAGAY andSUN

7. Guidelines for Compounding of Contraventions under FEMA, 1999”, based on the latest updates (Compounding Rules, 2024)

   By: YAGAY andSUN

8. Orange Category Industries in India: Contribution to Industrial Pollution and Climate Change, and Potential Solutions.

   By: YAGAY andSUN

9. Living Animal Species (Reporting andRegistration) Rules, 2024.

   By: YAGAY andSUN

10. The Wild Life (Transactions and Taxidermy) Rules, 2024: A Detailed Overview.

   By: YAGAY andSUN

11. Bicycle - Use it for Burning "FAT" Not "FUEL".

   By: YAGAY andSUN

12. Bicycle: A Simple, Sustainable Solution for Urban Mobility !

   By: YAGAY andSUN

13. Why India Needs State-of-the-Art Infrastructure for Bicycle Riders: A Step Toward Green Mobility and Reducing Carbon Footprints

   By: YAGAY andSUN

News

1. IMF asks Pak govt to remove development projects worth Rs 1.1 trillion from its federal budget

2. US, global economic outlook worsens in face of Trump's tariffs, IMF says

3. Relief to Tobacco Farmers: Government Notifies 3-Year Validity for Grower Registrations and Barn Licenses

4. DPIIT and Stride Ventures announce the winner of the Bharat Startup Grand Challenge 2025, with funding of up to INR 10 crore

5. India poised to benefit from supply chain realignments: RBI bulletin

6. Keynote address by Shri Sanjay Malhotra, Governor, Reserve Bank of India at the 24th FIMMDA-PDAI Annual conference, Bali, April 18, 2025

7. CCI Approves Google’s Settlement Proposal in Android TV Case

8. Data Users Conference: Strengthening the Bridge Between Data Producers and Users

9. RBI permits minors above 10 years to operate bank accounts independently

Notifications

Customs

1. 01/2025 - dated 21-4-2025 - Safeguard

Seeks to impose safeguard duty on “Non-Alloy and Alloy Steel Flat Products”

GST - States

2. S.R.O. No. 463/2025 - dated 21-4-2025 - Kerala SGST

Kerala Goods and Services Tax (Second Amendment) Rules, 2025

3. G.O.Ms. No.76 - dated 28-3-2025 - Tamil Nadu SGST

Tamil Nadu Goods and Services Tax (Second Amendment) Rules, 2025

4. G.O.Ms.No.72 - dated 18-3-2025 - Tamil Nadu SGST

Amendment to the Tamil Nadu Goods and Services Tax Act, 2017.--Erratum to Notification

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/IMD/PoD2/P/CIR/2025/56 - dated 22-4-2025

Change in cut-off timings to determine applicable NAV with respect to repurchase/ redemption of units in overnight schemes of Mutual Funds

2. SEBI/HO/ISD/ISD-PoD-2/P/CIR/2025/55 - dated 21-4-2025

Trading Window closure period under Clause 4 of Schedule B read with Regulation 9 of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) – Extension of automated implementation of trading window closure to Immediate Relatives of Designated Persons, on account of declaration of financial results.

FEMA

3. 02/2025-26 - dated 22-4-2025

Amendments to Directions - Compounding of Contraventions under FEMA, 1999

DGFT

4. Trade Notice No. 02/2025-26 - dated 21-4-2025

Introduction of ‘Mode of Export of Services’ Field in eBRC Format for Services Exports with effect from May 01, 2025.

Customs

5. Instruction No. 04/2025 - dated 21-4-2025

Recognition of National Food & Feed Reference Laboratory (NFFRL), Kathmandu, Nepal

Highlights / Catch Notes

GST

• No GST on UPI Transactions: Government Confirms Zero Taxation for Digital Payments Under Rs. 2,000

  News : The GOI officially refutes claims of proposed GST on UPI transactions over Rs.2,000, confirming no such taxation measure exists. CBDT has eliminated Merchant Discount Rate (MDR) on Person-to-Merchant UPI transactions, rendering GST inapplicable. An active Incentive Scheme from FY 2021-22 supports low-value UPI transactions, with escalating allocations (FY2021-22: Rs.1,389 crore; FY2022-23: Rs.2,210 crore; FY2023-24: Rs.3,631 crore). The policy aims to promote digital payments, evidenced by India's leadership in real-time transactions, accounting for 49% globally in 2023 and witnessing UPI transaction values surge from Rs.21.3 lakh crore in FY 2019-20 to Rs.260.56 lakh crore by March 2025.
  Visit to Get Source

  ---

• High Court Invalidates GST Rule 86A Blocking of Electronic Credit Ledger Due to Procedural Defects and Lack of Fair Hearing

  Case-Laws - HC : HC ruled that blocking of Electronic Credit Ledger (ECL) under Rule 86A of CGST Rules, 2017 was procedurally invalid. The order was quashed due to absence of pre-decisional hearing, lack of independent reasons to believe, and reliance on borrowed satisfaction from enforcement authorities. The court directed immediate unblocking of petitioner's ECL, emphasizing principles of natural justice. The impugned order was deemed illegal and arbitrary, thus rendering the ECL blockage null and void. Respondents were mandated to restore the petitioner's ECL forthwith, enabling normal tax compliance proceedings.
  Visit to Get Source

  ---

• Natural Justice Prevails: GST Authorities Penalized for Denying Hearing Rights Under Section 75(4)

  Case-Laws - HC : HC found a clear violation of natural justice principles under Section 75(4) of GST Act, 2017, where administrative authorities failed to provide personal hearing to the petitioner. The ex-parte assessment and show cause notice were procedurally defective, with 'NA' marked against hearing date despite specific hearing request. The Court imposed Rs. 20,000 cost on the Joint Commissioner SGST and remanded the matter for fresh proceedings with mandatory personal hearing, emphasizing fundamental principles of administrative fairness and due process.
  Visit to Get Source

  ---

• Government Contractor Wins Tax Dispute: Mega Exemption Notification 25/2012 Shields Services from Extended Limitation Period

  Case-Laws - HC : HC determined that the service tax demand against the government contractor was invalid. The court found the services were exempted under Mega Exemption Notification No. 25/2012, and the respondent could not invoke the extended limitation period under Section 73 of the Finance Act, 1994. The show cause notice was time-barred, and there was no evidence of fraud or intentional tax evasion. The court quashed the show cause notice and the consequent demand order, effectively ruling in favor of the petitioner and dismissing the tax liability.
  Visit to Get Source

  ---

• Legal Challenge Succeeds: Partial Bank Account Release Granted with 10% Security in GST Evasion Case

  Case-Laws - HC : HC partially allowed the petition challenging provisional attachment of bank accounts for alleged GST evasion. The court found that complete bank account attachment would prejudice the petitioner's business operations. The ruling mandates maintaining a 10% minimum balance as security while the GST evasion matter is adjudicated. The alleged tax evasion amount of Rs. 15.09 crores does not warrant immediate full attachment, considering the petitioner's ongoing business and tax compliance history. The provisional attachment order was modified to permit limited operational banking access pending final determination of the tax dispute.
  Visit to Get Source

  ---

• Tax Assessment Overturned: Section 73 Limits Challenged, Demand Invalidated Due to Procedural Discrepancies in Notice Scope

  Case-Laws - HC : HC upheld the challenge to tax assessment under Section 73 of GST Act, finding the tax demand exceeded the scope of the show cause notice (SCN). The court set aside tax liabilities for multiple entities totaling approximately Rs. 15,63,100, determining that the tax officer's assessment went beyond the original SCN's parameters. The court also provided a limitation period exclusion, stipulating that the timeframe between the order date and petition disposal shall not count towards potential future proceedings against the petitioners. Petition disposed of with favorable ruling for the taxpayers.
  Visit to Get Source

  ---

• Tax Credit Order Nullified: Insufficient Evidence Review Exposes Procedural Flaws in Supplier Invoice Verification Process

  Case-Laws - HC : HC invalidated the tax order under BGST Act, 2017 and IGST Act, 2017 regarding input tax credit claims. The court found the assessing authority failed to properly evaluate evidence concerning invoices from non-existent suppliers. Specifically, the impugned order was deemed unsustainable due to lack of comprehensive material review, indicating procedural irregularities in the tax credit assessment process. The court concluded that the order could not be maintained as it was passed without thorough examination of available documentary evidence, effectively setting aside the original administrative determination.
  Visit to Get Source

  ---

• GST Registration Cancelled for Persistent Non-Compliance: Statutory Obligation Upheld with Potential Reinstatement Pathway

  Case-Laws - HC : HC upheld GST registration cancellation under Section 29(2)(c) of CGST Act, 2017 for non-filing of returns for over six months. The court recognized the statutory obligation to electronically file returns and confirmed the administrative authority's power to cancel registration. However, the HC provided a remedial pathway, allowing the petitioner to potentially reinstate registration by submitting pending returns, paying tax dues, applicable interest, and late fees. The cancellation order was deemed valid, with discretionary reinstatement subject to compliance with prescribed procedural requirements.
  Visit to Get Source

  ---

• GST Proceedings Upheld: Cross-Examination Denial Does Not Invalidate Administrative Process, Statutory Appeal Pathway Confirmed

  Case-Laws - HC : HC dismissed the writ petition challenging GST proceedings, holding that mere rejection of cross-examination request does not automatically vitiate administrative proceedings. The Court emphasized that parties cannot convert show cause notice proceedings into mini-trials and must provide specific reasons for cross-examination. The petitioner was directed to exhaust statutory appellate remedies under Section 107 of CGST Act by filing an appeal before the Appellate Authority within thirty days, thereby preserving the administrative order and maintaining procedural integrity.
  Visit to Get Source

  ---

• Tax Assessments Require Separate Proceedings: Distinct Notices and Time Limits Mandated for Each Financial Year Under Sections 74(1), (2), and (10)

  Case-Laws - HC : HC held that under Sections 74(1), (2), and (10), each assessment year must be proceeded separately by the proper officer. The statutory time limit for issuing orders is distinct for each financial year. The court mandates independent show cause notices for different assessment years, recognizing that taxpayers can raise separate defenses for each year. The composite notice challenging jurisdictional propriety was partially set aside, with the notice for 2017-2018 sustained and notices for 2018-2019, 2019-2020, 2020-2021, and 2021-2022 quashed. The appellate court found the single judge's interpretation erroneous and allowed the appeal, emphasizing the need for precise, year-specific tax assessment procedures.
  Visit to Get Source

  ---

• High Court Invalidates Rs. 50,330 Tax Recovery, Orders Verification and Re-crediting of Electronic Cash and Credit Ledgers Under GST Act

  Case-Laws - HC : HC ruled that the recovery of Rs. 50,330/- from petitioners' electronic cash and credit ledgers was unlawful. The court directed respondents to verify the recovery and re-credit the amounts to petitioners' respective cash/credit ledgers, considering the mandatory pre-deposit under Section 112(8) of the GST Act and the circular dated 11th September, 2024. The writ petition was disposed of without examining the substantive merits, with instructions for immediate rectification of the electronic liability ledger entries for the specified tax periods.
  Visit to Get Source

  ---

• Petitioner Wins Challenge Against GST Assessment Orders Due to Procedural Flaws and Lack of Fair Hearing

  Case-Laws - HC : HC allowed the petition challenging GST assessment orders for 2018-19, finding procedural irregularities in ex-parte orders issued without proper hearing. The court recognized the petitioner's bona fide reasons for non-response to show cause notice and remitted the matter back to the respondent for fresh consideration in accordance with law, directing a comprehensive review of the case while adhering to established GST guidelines and principles of natural justice.
  Visit to Get Source

  ---

• Judicial Intervention Nullifies Ex-Parte Order, Reinstates Petitioner's Right to Fair Hearing and Natural Justice Principles

  Case-Laws - HC : HC set aside ex-parte order due to violation of natural justice principles, specifically lack of proper service of pre-intimation notice and show-cause notice. Despite previous dismissal of petitioner's appeal as time-barred, the court adopted a justice-oriented approach. Recognizing petitioner's claim of bona fide reasons for non-participation, the court remitted the matter to the first respondent. The order directs a fresh consideration of the case, providing the petitioner an opportunity to submit a reply and contest the proceedings in accordance with legal principles.
  Visit to Get Source

  ---

• Taxpayer Wins Challenge Against Improper GST Refund Rejection, Court Orders Reconsideration Under Rules 89, 90, and 92

  Case-Laws - HC : HC allowed the petition challenging the refund claim rejection. The court found that the respondent improperly rejected the refund application in GST RFD-03 by stating refund was not permissible due to voluntary payment. The court quashed the deficiency memo and remanded the matter back to the respondent to reconsider the refund application in GST RFD-01 in accordance with procedural rules, specifically Rules 89, 90, and 92 of GST Rules, and take appropriate action on the application's deficiencies.
  Visit to Get Source

  ---

• High Court Rejects Bail Modification in GST Fraud Case, Upholds Original Order Based on Investigation Completion and Cooperation

  Case-Laws - HC : HC set aside CJM's order regarding bail in a fraudulent GST invoicing case, finding no material change in circumstances warranting release. Despite seeking cancellation of regular bail, the court determined no re-arrest was necessary as the investigation is complete and the respondent has fully cooperated. The respondent demonstrated availability for further statements, and the petitioner department is preparing to file a prosecution complaint. Consequently, the court disposed of the petition, acknowledging significant time had elapsed since the original bail order.
  Visit to Get Source

  ---

• GST Registration Canceled for Persistent Non-Compliance: Piecemeal Returns Insufficient to Prevent Statutory Penalty Under Rule 22(4)

  Case-Laws - HC : HC upheld the cancellation of taxpayer's registration due to non-filing of returns for six consecutive months. Despite filing returns after the show cause notice, the taxpayer failed to submit returns for all six months with requisite tax interest and late fees. The court emphasized that piecemeal return filing does not satisfy the statutory requirement under Rule 22(4) of CGST Rules. The cause of action for registration cancellation remained valid since the taxpayer did not comprehensively rectify the default by submitting all pending returns and associated financial obligations. Consequently, the registration cancellation order was deemed legally justified and the petition was dismissed.
  Visit to Get Source

  ---

• Apartment Allotment Triggers GST Liability Based on Payments Made During Construction Phase Under Section 7

  Case-Laws - HC : HC ruled that the petitioners' apartment/duplex allotment involved GST liability based on payments made during construction period prior to completion certificate. The court determined that contractual agreements and partial consideration paid before project completion on 31.12.2018 triggered service tax obligations under Section 7 and Schedule II of CGST Act, 2017. The transaction's essence, involving payments during construction phase, constituted supply of services requiring GST. Consequently, the respondent-BDA's GST demand was deemed legally valid and the writ petition was dismissed.
  Visit to Get Source

  ---

Income Tax

• Judicial Review Ordered: Expedited Hearing on Tax Assessment Exemption Petition with Four-Week Resolution Timeline

  Case-Laws - SC : SC remanded the matter to HC, directing expedited review of an ex-parte assessment reopening order. The court mandated HC to adjudicate the pending review petition within four weeks, preserving the petitioner's right to seek alternative legal remedies if the outcome is unfavorable. The decision emphasizes procedural fairness by allowing the petitioner an opportunity to challenge the original ex-parte order regarding tax assessment exemption under Sections 11 and 12, while maintaining judicial economy through time-bound resolution.
  Visit to Get Source

  ---

• Income Tax Assessment Order Quashed: Mechanical Approval Invalidates Proceedings Under Sections 153A/153C

  Case-Laws - AT : ITAT quashed the assessment order under sections 153A/153C, finding the Joint Commissioner of Income Tax's approval mechanically granted without substantive application of mind. The tribunal determined that the approval process cannot be a mere formality and must involve judicious quasi-judicial consideration of incriminating materials. The approval's lack of meaningful merit evaluation rendered it legally invalid, consequently invalidating the entire assessment proceedings. The assessee's appeal was allowed, effectively nullifying the assessment order due to procedural impropriety in the approval mechanism.
  Visit to Get Source

  ---

• Jurisdictional Satisfaction Under Section 153C Requires Substantive Reasoning, Not Mere Perfunctory Recording of Search Details

  Case-Laws - AT : ITAT held that jurisdictional assumption under Section 153C requires a substantive and descriptive satisfaction note. Mere perfunctory recording without tangible information and proper application of mind cannot confer assessment jurisdiction. The cryptic satisfaction note lacking specificity of searched documents/assets against respective assessment years renders the entire proceeding legally unsustainable. Consequently, the notice and consequent assessment order issued under Section 153C stand quashed, with the assessee's appeal being allowed.
  Visit to Get Source

  ---

• Legal Challenge Overturned: Trust Registration Reinstated After Procedural Errors in Tax Authority's Assessment

  Case-Laws - AT : ITAT allowed the assessee's appeal, invalidating the trust registration cancellation. The tribunal found critical legal defects in the Assessing Officer's (AO) reference, including: (1) retrospective application of Finance Act, 2022 provisions to AY 2021-22, (2) reliance on seized search materials without independent verification, and (3) drawing presumptions without providing the assessee an opportunity to rebut. The ITAT held that the AO's satisfaction was procedurally flawed and based on "borrowed satisfaction," rendering the registration cancellation order legally unsustainable. The tribunal emphasized that mere possession of incriminating documents does not automatically establish wrongdoing without substantive corroborative evidence.
  Visit to Get Source

  ---

• Land Purchase Cash Payments Validated as Genuine Business Transactions Under Rule 6DD Exceptions

  Case-Laws - AT : ITAT allowed taxpayer's appeal, finding cash payments for land purchase were genuine business transactions. The tribunal determined payments were made out of commercial necessity and complied with Rule 6DD exceptions. Cash deposits during demonetization were substantiated through assessee's cash book, which demonstrated advances against land/plot purchases. The appellate tribunal set aside the lower authority's order, directing the AO to delete the tax addition, effectively vindicating the taxpayer's accounting practices and validating the cash transactions as legitimate business expenditures.
  Visit to Get Source

  ---

• Creditor Loans Validated: Section 68 Challenge Dismissed as Insufficient Evidence Fails to Prove Fund Irregularities

  Case-Laws - AT : ITAT held that the addition under Section 68 for unsecured loans was inappropriate. The tribunal found the assessee established creditor identity through PAN, creditworthiness via bank statements and ITRs, and confirmed loan origin from creditors' own bank accounts. The Assessing Officer's addition was based on mere suspicion without clinching evidence proving the funds did not genuinely belong to the stated creditors. The tribunal deleted the contested addition, ruling in favor of the assessee based on comprehensive documentary evidence demonstrating loan authenticity and creditor legitimacy.
  Visit to Get Source

  ---

Customs

• Customs Rules Updated: Origin Documentation Simplified with New Terminology and Verification Procedures

  Circulars : The CBIC issued an amendment to Circular No. 38/2020, modifying terminology in the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR, 2020). The amendment replaces "Certificate of Origin" with "Proof of Origin", aligning with amended Section 28DA of the Customs Act, 1962. This change encompasses both officially issued certificates and self-declarations by exporters under trade agreements. The modification aims to simplify origin verification procedures, facilitate trade, and reduce administrative requirements. The Directorate of International Customs (DIC) will manage verification requests and maintain specimen signatures and seals of authorized issuing authorities. The amendment takes immediate effect, streamlining origin documentation processes for international trade.
  Visit to Get Source

  ---

• IGST Refund Denied for Manual TR6 Challans: Exporters Blocked from Claiming Duty Refunds Under Section 142(3)

  Case-Laws - AT : CESTAT dismissed the appeal regarding IGST refund claims for manually paid TR6 challans. The tribunal consistently held that exporters cannot claim refund under Section 142(3) of CGST Act, 2017, for duties paid due to non-fulfillment of export obligations. Despite Supreme Court's acknowledgment of procedural gaps and CBIC's subsequent circular prescribing corrective measures, the existing statutory framework precludes refund entitlement. The decision reaffirms prior judicial precedents, specifically referencing similar rulings in comparable cases, thereby maintaining a strict interpretation of statutory provisions governing import duty and tax credit mechanisms.
  Visit to Get Source

  ---

• Exporters Face Scrutiny: Duty Drawback Challenge Rejected Due to Massive Invoice Value Manipulation and Fraud Evidence

  Case-Laws - HC : HC dismissed the petition challenging Show Cause Notice (SCN) related to duty drawback scheme. The Court found no limitation bar for issuing SCNs due to fraudulent export documentation, where significant invoice value discrepancies were discovered (inflated from 2,176 USD to 56,032 USD). While declining direct writ intervention, the Court permitted the petitioner to pursue statutory appellate remedy under Section 128 of Customs Act, 1962, emphasizing that alternative legal recourse exists to contest the SCN's substantive allegations. The petition was disposed of, directing the petitioner to follow prescribed statutory appellate mechanism.
  Visit to Get Source

  ---

DGFT

• Exporters Must Now Specify Service Trade Mode in New Electronic Bank Realization Certificate Format

  Circulars : The DGFT introduces a new 'Mode of Export of Services' field in the eBRC format for services exports, effective May 01, 2025. The modification aligns with WTO GATS guidelines, requiring exporters to specify one of four service trade modes during electronic bank realization certificate certification: Cross-Border Supply, Consumption Abroad, Commercial Presence, or Presence of Natural Persons. This reform enhances data granularity and accuracy in services export reporting, enabling more precise tracking of international service transactions and supporting India's commitment to standardized international trade documentation.
  Visit to Get Source

  ---

Corporate Law

• Corporate Property Dispute: Summons Under Section 452 Upheld, Challenging Party's Revision Application Dismissed for Lack of Substantive Legal Merit

  Case-Laws - HC : HC dismissed criminal revision application challenging summons in corporate property dispute. Court held that the trial magistrate's summons under Section 452 of Companies Act, 2013 was prima facie valid and did not warrant interference. The court emphasized that final determination of wrongful possession must occur during trial through evidence presentation. Precedential analysis from prior Supreme Court jurisprudence supported maintaining interlocutory proceedings without exceptional circumstances justifying judicial intervention. Revisional application was consequently found devoid of merit and summarily rejected, leaving original summons and potential prosecution intact.
  Visit to Get Source

  ---

IBC

• UCO Bank Consortium Secures Priority Charge Over Corporate Debtor's Movable Assets Under Section 48 of TP Act

  Case-Laws - AT : NCLAT applied the doctrine of priority under Section 48 of TP Act, affirming UCO Bank Consortium's first pari-passu charge over the Corporate Debtor's movable assets. The Tribunal rejected the Respondent's claim based on ROC registration, determining that the 8th Supplemental Deed of Working Capital Consortium Agreement established UCO Bank Consortium's priority. Referencing precedents including J.M. Financial Asset Reconstruction Company Ltd case, the Tribunal held that only one secured creditor can enforce realization rights, and the Respondent failed to sufficiently identify charged assets under Section 52 of the Code. Consequently, the appeal was allowed in favor of the Appellant.
  Visit to Get Source

  ---

Indian Laws

• Joint Account Holder Cleared: No Vicarious Liability for Cheque Dishonor Under Criminal Complaint Without Direct Involvement

  Case-Laws - HC : HC quashed the criminal complaint against petitioner no. 2 for lack of personal liability, finding no direct involvement in the transaction or cheque issuance. The court held that mere joint account holding does not establish vicarious liability. While maintaining proceedings against petitioner no. 1, the HC determined the complaint constituted an abuse of legal process due to multiplicity of proceedings and non-disclosure of prior cheque transactions. The court exercised its inherent powers under Section 482 Cr.P.C. to prevent procedural abuse and ensure justice, leaving the question of legally enforceable debt to be determined during trial. Petition partially allowed.
  Visit to Get Source

  ---

• Government Can Compulsorily Retire Civil Servants When Public Interest and Service Integrity Are Compromised Under Rule 16(3)

  Case-Laws - HC : HC upheld compulsory retirement under Rule 16(3) of All India Services (Death-cum-Retirement Benefits) Rules, 1958. The court affirmed government's absolute right to retire an officer in public interest, particularly when integrity is questionable. A second review is permissible under exceptional circumstances involving new material evidence. The order was justified based on allegations of financial misappropriation, disproportionate assets, and potential service misconduct. The court emphasized that such administrative actions are preventive measures to maintain service efficiency and integrity, not punitive in nature. Judicial review is limited to examining mala fides, arbitrariness, or lack of material consideration. Petition allowed, reinstating the compulsory retirement order.
  Visit to Get Source

  ---

• Legal Challenge to Cheque Dishonour Case Dismissed: Section 138 Order Quashed Due to Unaddressed Limitation Period Violation

  Case-Laws - HC : HC determined that the summoning order in a cheque dishonour case under Section 138 of NI Act was unsustainable due to limitation period violation. Despite legal provisions allowing condonation of delay, the Metropolitan Magistrate failed to apply judicial mind to the delay or provide formal condonation. The Court set aside the summoning order, effectively halting proceedings, and provided an opportunity for the complainant to justify delay through appropriate legal mechanisms. The petition was partially allowed, with the impugned order being quashed and the matter potentially remanded for reconsideration of limitation issues.
  Visit to Get Source

  ---

• Forensic Document Analysis Request Denied Under Section 528 Due to Procedural Defects and Lack of Substantive Evidence

  Case-Laws - HC : HC rejected the Petitioner's application for forensic document analysis under Section 528 of Bharatiya Nagarik Suraksha Sanhita, 2023. The Court found the request untimely and procedurally defective, noting the Petitioners' failure to provide substantive explanations for the delayed forensic examination request. Despite opportunities for cross-examination and defense presentation, the Petitioners did not lead credible evidence to support their claim. The Court emphasized that the Complaint already highlighted signature discrepancies, and the application was filed at the final arguments stage without compelling justification. Consequently, the petition was dismissed, with the Court underscoring the inadmissibility of conjecture and presumption in legal proceedings.
  Visit to Get Source

  ---

Service Tax

• Service Tax Challenge Dismissed: Subcontractor Fails to Produce Documents Within Statutory Limitation Period

  Case-Laws - HC : HC dismissed the writ petition challenging service tax liability. The petitioner, a subcontractor, failed to produce requisite documents and challenge the tax order within the prescribed three-month statutory period under Section 35(b) of the Central Excise Act and Section 86 of the Finance Act. The court found the petitioner liable for service tax despite claims of potential double taxation, as the adjudicating authority had already considered tax deposits by principal contractors. The writ application was filed significantly beyond the limitation period, rendering the judicial review inappropriate and procedurally unsustainable.
  Visit to Get Source

  ---

• Service Tax Dispute Resolved: Voluntary Payment Nullifies Show Cause Notice Under Finance Act Section 73(3)

  Case-Laws - AT : CESTAT adjudicated a service tax dispute, holding that the show cause notice (SCN) was not maintainable because the appellant had voluntarily paid the entire service tax with interest prior to SCN issuance. The tribunal found that sub-section 3 of section 73 of the Finance Act applies, as there was no deliberate suppression of facts or intent to evade tax. The provisions prohibiting self-assessment under sub-section 4 were deemed inapplicable. Consequently, the SCN was invalidated, the demand was set aside, and the appellant's appeal was allowed, affirming the taxpayer's right to self-correction without punitive proceedings.
  Visit to Get Source

  ---

• Catering Service Provider Wins Appeal, Secures Tax Benefits Under Notification N/N.12/2003-ST Despite Previous Denials

  Case-Laws - AT : CESTAT allowed the appeal, holding that the appellant was eligible for benefits under N/N.12/2003-ST for outdoor catering services. The tribunal found no legal prohibition against availing multiple notifications and rejected the adjudicating authority's denial based on VAT assessment methods. The extended period of limitation was deemed improper due to absence of willful suppression or intent to evade tax. The demand for differential service tax, interest, and penalty was set aside, with the tribunal emphasizing that documentary proof provided by the appellant was sufficient and no evidence suggested deliberate tax evasion.
  Visit to Get Source

  ---

Case Laws:

• GST

• 2025 (4) TMI 1170
  Blocking of Electronic Credit Ledger (ECL) of the petitioner under Rule 86A of the Central Goods and Services Tax (CGST) Rules, 2017 - before passing the impugned letter, pre-decisional hearing was not provided to the petitioner nor does the impugned order contain any reason to believe as to why it was necessary to block the Electronic credit ledger - Violation of principles of natural justice - HELD THAT:- The issue decided in the case of K-9-Enterprises [ 2024 (10) TMI 491 - KARNATAKA HIGH COURT ], where it was held that i n the absence of valid nor sufficient material which constituted reasons to believe which was available with respondents, the mandatory requirements/pre-requisites /ingredients/parameters contained in Rule 86A had not been fulfilled/satisfied by the respondents- revenue who were clearly not entitled to place reliance upon borrowed satisfaction of another officer and pass the impugned orders illegally and arbitrarily blocking the ECL of the appellant by invoking Rule 86A which is not only contrary to law but also the material on record and consequently, the impugned orders deserve to be quashed. In the instant case since no pre-decisional hearing are provided/granted by the respondents before passing the impugned order, coupled with the fact that the impugned order invoking Section 86A blocking of the Electronic credit ledger of the petition does not contain independent or cogent reasons to believe/accept by placing reliance upon reports of enforcement authority which is impermissible in law, since the same is on borrowed satisfaction as held by Division Bench, the impugned order deserves to be quashed. Conclusion - The impugned order blocking the petitioner s Electronic Credit Ledger under Rule 86A is illegal, having been passed without pre-decisional hearing, without independent reasons to believe, and based on borrowed satisfaction. The concerned respondents are directed to unblock the Electronic credit ledger of the petitioner immediately upon the receipt of copy of this order, so as to enable the petitioner to file returns forthwith - petition allowed.

  ---

• 2025 (4) TMI 1169
  Jurisdiction of respondent no. 2 to invoke the extended period of limitation under Section 73 of the Finance Act, 1994 - liability to pay service tax on the royalty amount deducted by the Government under the Reverse Charge Mechanism (RCM) as per the Finance Act, 1994 - HELD THAT:- It is evident from a reading of Sub-Section (1) of Section 73 that the prescribed period of limitation for serving a notice on the person chargeable with service tax is thirty months from the relevant date. The words thirty months have been substituted for eighteen months by Finance Act, 2016 (28 of 2016), dt.14-5-2016. Proviso to Sub-Section (1) of Section 73, however, permits invocation of extended period of limitation of five years in the cases where service tax has not been paid by reason of fraud or collusion or wilful misstatement or suppression of facts or contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the service tax. The petitioner is a Government Contractor and the services availed by him has been found exempted under the Mega Exemption Notification No. 25 of 2012. In fact, Annexure P/2 clearly admits that the activity of the petitioner is exempted under Mega Exemption Notification No. 25/2012 dated 20.06.2012 and as such no service tax is leviable on the said activity. This Court finds much force in the submission of the petitioner that had the Government Department issued invoice as required under Rule 4A of the Service Tax Rules, 1994, he would have come to know the requirement of payment of service tax and the rate at which it was required to be paid - The Challan has to contain the name, address of the registration number of such person and name and address of the person receiving taxable service. It will also contain the description and value of taxable service provided or agreed to be provided and the service tax payable thereon. In this case, admittedly, the respondent no. 4 did not issue any invoice, bill or challan. Conclusion - It is not one of those cases in which the petitioner may be said to have committed a fraud or acted with an intention to evade the service tax. The show cause (Annexure P/2 ) is barred by limitation. The benefit of extended period of limitation would not be available to the respondent no. 2. Hence, the SCN as contained in Annexure P/2 and the consequent order confirming the demand vide Annexure P/4 to the writ application are quashed. Application allowed.

  ---

• 2025 (4) TMI 1168
  Seeking certain amendments as per the draft amendment tendered to the Court - Challenge to N/N. 56/2023-Central Tax dated 28th December, 2023 issued by Respondent No. 1 (Union of India) and N/N. 56/2023 dated 16th January, 2024 issued by Respondent No. 2 (State of Maharashtra) exercising powers under Section 168A of the Central Goods and Services Tax Act, 2017 (CGST Act) - HELD THAT:- It is found that in similar matters in EVIE REAL ESTATE PRIVATE LTD. VERSUS STATE OF MAHARASHTRA [ 2025 (3) TMI 173 - BOMBAY HIGH COURT] , the petitions have been admitted and interim relief has been granted. We therefore issue Rule. Respondent Nos. 1 to 4 waive service. Liberty granted to the parties to apply in the event the matter before the Hon ble Supreme Court is disposed of one way or the other.

  ---

• 2025 (4) TMI 1167
  Short payment of Goods and Service Tax - classification of products of the Petitioner - GST applicable at 12% or 18%? - reply of petitioner not taken into consideration - violation of principles of natuarl justice - HELD THAT:- Considering the fact that the reply has been completely ignored by the adjudication authority, the impugned order would not be sustainable. The said Order-in-Original clearly records that no reply was filed. The matter is remanded to the adjudicating authority for a fresh hearing - Petition allowed by way of remand.

  ---

• 2025 (4) TMI 1166
  Challenge to Circular No. 235/2024-Goods and Services Tax ( GST ) dated 11th October, 2024 issued by the Joint Secretary, Tax Research Unit, Department of Revenue, Ministry of Finance, Government of India - Classification of Roof Mounted Package Unit (RMPU) air conditioning machines used for railways - to be classified under HSN code 8415 or 8607? - HELD THAT:- Considering that the Show Cause Notice has now been issued to the Petitioner, the Petitioner would file a reply to the Show Cause Notice. The Show Cause Notice shall proceed before the Adjudicating Authority who shall take into consideration all the relevant material including the advance rulings by different state authorities, the reply of the Petitioner as also the impugned circular. The proceedings shall continue before the Adjudicating Authority and the final order shall be passed, which shall be, however, subject to the outcome of this petition. It is made clear that the final order shall not be given effect without further orders of this Court. List on 9th May, 2025.

  ---

• 2025 (4) TMI 1165
  Fraudulent availment of Input Tax Credit - issuance of fake invoices without actual receipt of goods and services - HELD THAT:- This Court is of the opinion that both these orders are appealable orders before the concerned Appellate Authority under Section 107 of the Central Goods and Services Tax Act, 2017. The question of duplication, if any, shall be examined and adjudicated by the Appellate Authority. However, on a prima facie perusal, it appears that the amount pertaining to M/s Nivaran Enterprises has been reflected in both orders, indicating a possible instance of duplication. The Petitioner is permitted to avail of its Appellate remedies in respect of both orders - considering the possibility of duplication, insofar as the second order is concerned i.e., 10th January, 2025, the pre-deposit shall only be in respect of the amount pertaining to M/s Radhey Enterprises i.e. Rs. 14,12,730/- at the initial stage. The Appellate Authority may examine the matter and pass directions in accordance with law. Let the appeal be filed by the Petitioner before the Appellate authority within a period of 30 days.

  ---

• 2025 (4) TMI 1164
  Determination fo transaction value - transaction value - sole value for the consideration of supply as stipulated in Section 15 (1) of the CGST Act - HELD THAT:- If the Petitioners want to file any affidavit in rejoinder, they may do so on or before 17th June 2025 and serve a copy of the same on the advocates for Respondent No. 2 and Respondent No. 4 respectively. The matter placed on Board on 23rd June 2025 - Stand over to 23rd June 2025.

  ---

• 2025 (4) TMI 1163
  Provisional attachment of bank account of petiitoner - evasion of GST - HELD THAT:- A perusal of the Panchnama would show that the same was a surprise investigation which was conducted. On the basis of certain records produced by the Petitioner s officials, a prima facie estimation has been made that there is a mis-match. The amount of stock was higher than what was declared in terms of the records of the Petitioner company - It is to be noted that a period of more than 16 months has lapsed since the issuance of the Panchnama and one year has elapsed since the passing of the impugned order dated 28th March 2024. As per the impugned order, the alleged evasion of GST is to the amount of Rs. 15.09 crores. Even if this amount is taken into consideration, it cannot be said that the entire amount would be payable immediately. The issue relating to evasion has to be adjudicated in accordance with law. Until then, the Petitioner s business cannot be prejudiced by complete attachment of bank accounts. The Petitioner is a running concern and as per the accounts which have been placed on record, it is conducting business and paying substantial amounts of taxes. The details of the assets have also been given in the said certificate. The said Chartered Accountant s certificate along with the additional documents is taken on record - it would be sufficient at this stage, if 10% of the amount can be secured by way of minimum balance in the bank account of the Petitioner. Conclusion - The issue relating to evasion has to be adjudicated in accordance with law. Until then, the Petitioner s business cannot be prejudiced by complete attachment of bank accounts. Petition disposed off.

  ---

• 2025 (4) TMI 1162
  Violation of principles of natural justice - issuance of summary of SCN without issuing any show cause notice u/s 73 (1) of the CGST Act, 2017 and the summary of the order dated 30.04.2024 without passing any order under Section 73 (9) of the CGST Act, 2017 - summary order passed without giving any opportunity of hearing - HELD THAT:- Similar issue has already been dealt by a Co-ordinate Bench in Construction Catalysers Pvt. Ltd. Vs. the State of Assam and 2 others [ 2024 (10) TMI 279 - GAUHATI HIGH COURT] . Accordingly, this writ petition is having similar issue, the determination made in said Construction Catalysers Pvt. Ltd, shall cover the present case - it was held in the above case that The issuance of the Summary of the Show Cause Notice, Summary of the Statement and Summary of the Order do not dispense with the requirement of issuance of a proper Show Cause Notice and Statement as well as Page passing of the Order as per the mandate of Section 73 by the Proper Officer. As initiation of a proceedings under Section 73 and passing of an order under the same provision have consequences. The Show Cause Notice, Statement as well as the Order are all required to be authenticated in the manner stipulated in Rule 26 (3) of the Rules of 2017. The present writ petition stands disposed of by setting aside the summary of show cause notice dated 08.12.2023 and the summary of order dated 30.04.2024 in terms of the determination and conclusion arrived at para 29 of Construction Catalysers Pvt. Ltd.

  ---

• 2025 (4) TMI 1161
  Cancellation of GST registration of petitioner - failure to file returns for a continuous period of six months - rejection of appeal on the ground of time limitation - HELD THAT:- Taking note of the submissions made by the petitioner and the fact that suspension/revocation of the license would be counterproductive and works against the interest of revenue, since in such case, the petitioner would not be able to carry on its business in a sense that no invoice can be raised by the petitioner and the same would ultimately impact the recovery of tax and as such it would be in the best interest of the respondents to take a pragmatic view in the matter so as to permit the petitioner to carry on its business. The order of cancellation of registration dated 26th September, 2023 under the said Act set aside, subject to the condition that the petitioner files its returns for the entire period of default, pays requisite amount of tax, interest, fine and penalty, if not already paid. Conclusion - Cancellation of registration under the WBGST/CGST Act for non-filing of returns is valid if procedural. Petition disposed off.

  ---

• 2025 (4) TMI 1160
  Maintainability of petition - availability of alternate remedy of appeal under Section 107 of the Central Goods and Services Tax Act - failing to consider the relevant documents produced by the petitioner during the adjudication proceedings - Violation of princples of natural justice - HELD THAT:- The entire materials were placed before the authority in the statutory forms, and it was incumbent upon them to verify the genuineness of the statutory forms that are available in the portal. When we read the impugned order, the stand as now reflected in the statement that the 1st respondent could not reconcile the data available in the GST portal and, therefore, he had proceeded to reject the claim of the petitioner, does not appear to be the ground on which the final order was issued. The apparent change in the stand clearly reveals that the 1st respondent did not apply his mind properly to the relevant records before it. Normally, the remedy of the appellant against Ext.P4 order is to prefer an appeal before the appellate authority, we are of the considered view that, in the peculiar facts and circumstances, the appellant need not be relegated to the alternative remedy of preferring the appeal especially since the 1st respondent himself has now admitted before us that he was not in a position to reconcile the data presented before him by the appellant/petitioner and that was available in the portal. Therefore, in such circumstances, the 1st respondent ought to have granted an opportunity to the appellant to explain the discrepancy. Having not chosen to do so is clearly a violation of the principles of natural justice. Conclusion - i) The writ petition was maintainable in the facts of the case despite the availability of an appeal under Section 107 CGST Act. ii) The assessing authority s failure to consider relevant documents and refusal to grant hearing on reconciliation amounted to violation of natural justice. Appeal allowed.

  ---

• 2025 (4) TMI 1159
  Validity of demand confirmed beyond the scope of SCN - Challenge to order passed under Section 73 of the Central/West Bengal Goods and Services Tax Act, 2017 - reversal of ITC - HELD THAT:- Upon hearing the learned advocates appearing for the respective parties since, it would appear from the materials on record that no show cause in relation to fastening of liability on assessable value of the outward supply on inward receipt of taxable goods was made, the aforesaid determination and/or fastening liability to the above extent whereby the proper officer had determined a sum of Rs. 13,27,328.40 i.e. @ 12% on the assessable value of the outward supply on Rs. 2,21,22,140.00 in relation to Narmada Gelatines Ltd. (Kolkata) and Rs.1,66,219.74 for CGST and SGST @12% on Rs.27,70,329.00 being the assessable value of the outward supply on inward receipt of taxable goods in respect of Alivira Animal Health Limited, appears to be beyond the show cause, and Rs.69552.60 on account of CGST and WBGST @5% in respect of other supplies on the basis of the data available with him which also do not find place in the show cause, in my view, cannot be sustained and the same are accordingly set aside. The period between 29th April, 2024 being the date of order under Section 73 of the said Act and 10th April, 2024 being the date of disposal of the writ petition, or the date of receipt of certified copy of this order whichever is later, shall stand excluded while computing the period of limitation for initiation of any proceeding against the petitioners. Petition disposed off.

  ---

• 2025 (4) TMI 1158
  Refund claim - challenge to constitutional validity of Sections 16(2) and 16(4) of the GST Act - H ELD THAT:- It is found from the pleadings in the writ petition and the judgment rendered by the learned Single Judge that the vires of Sections 16 (2) and 16 (4) of the GST Act was not an issue raised in the writ petition and therefore, the dismissal of the writ petition has caused prejudice to the appellant. Inasmuch as there is no adjudication on the merits of the claim of the appellant/writ petitioner, the judgment under appeal is liable to be set aside and the writ petition be restored to file for fresh consideration in accordance with law. The impugned judgement is set aside and petition is restored to its file - appeal allowed.

  ---

• 2025 (4) TMI 1157
  Challenge to order passed u/s 74(9) of the Bihar Goods and Services Tax (BGST) Act, 2017 read with Section 20 of the Integrated Goods and Services Tax (IGST) Act, 2017 - availing input tax credit (ITC) on invoices from non-existent suppliers - HELD THAT:- This Court has iota of doubt that the Assessing authority while passing the impugned order Annexure-P/10 has not considered in right perspective the materials which were brought on the record. In this regard, the petitioner has drawn the attention of this Court towards Annexure-P/6 together with the enclosures which were filed before the State authority to make him appreciate that the invoices which are subject matter of the proceeding before him were earlier the subject matters of the proceeding before the respondent no.5. Be that as it may, this Court is convinced that impugned order contained in Annexure-P/10 cannot sustain as it has been passed without consideration of the materials available on the record. Conclusion - The impugned order contained in Annexure-P/10 cannot sustain as it has been passed without consideration of the materials available on the record. Application disposed off.

  ---

• 2025 (4) TMI 1156
  Cancellation of GST registration under Section 29(2)(c) of the CGST Act, 2017 - non-filing of returns for a continuous period of six months or more was validly executed - HELD THAT:- As per Section 29(2)(c), an officer, duly empowered, may cancel the GST registration of a person from such date, including any retrospective date, as he deems fit, where any registered person, has not furnished returns for a continuous period of 6 (six) months. Rule 22 of the CGST Rules, 2017 has laid down the procedure for cancellation of the registration. Having regard to the fact that the GST registration of the petitioner has been cancelled under Section 29(2)(c) of the CGST Act, 2017 for the reason that the petitioner did not submit returns for a period of 6 (six) months and more; and the provisions contained in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017 and cancellation of registration entails serious civil consequences, this Court is of the considered view that in the event the petitioner approaches the officer, duly empowered, by furnishing all the pending returns and make full payment of the tax dues, along with applicable interest and late fee, the officer duly empowered, has the authority and jurisdiction to drop the proceedings and pass an order in the prescribed Form. Conclusion - The statutory obligation to file returns electronically and monitor the GST portal is mandatory and that failure to do so does not automatically invalidate cancellation orders passed in accordance with law. Petition disposed off.

  ---

• 2025 (4) TMI 1155
  Mainatainability of appeal - time limitation for filing appeal - Cancellation of registration of petitioner - case of the Petitioner is that he had only filed the reply to the said SCNs but no personal hearing notice was received - Violation of principles of natural justice - HELD THAT:- In terms of Section 107 of the Central Goods and Service Tax Act, 2017 (CGST Act) all the three orders i.e. impugned orders would be appealable orders. The time limit for filing the appeal would be three months in terms of Section 107 (1) of the CGST Act. The said period had expired in respect of the first impugned Order-in-Original dated 3rd December, 2024. Since all the three orders are connected, the Petitioner is directed to avail of the appellate remedy and file the appeal/s within 30 days from today. If the appeal is filed within 30 days, the appeal qua order dated 3rd December, 2024 shall not be dismissed as being barred by limitation. Petition disposed off.

  ---

• 2025 (4) TMI 1154
  Consolidation of Show Cause Notice (SCN) proceedings for multiple financial years - denial of Petitioner s right to cross-examine certain third parties - violation of principles of natural justice - HELD THAT:- It can be seen that the impugned order is a very detailed order passed by the Adjudicating Authority running into more than 60 pages, which has discussed all the evidence which clearly as per the Authority demonstrates that undeclared sales were being made by the Petitioner to avoid the payment of GST. Moreover, the question as to whether in a particular year, the proper declaration was given, whether the facts given by a particular witness are right or wrong and whether the Petitioner needs to be permitted to rebut are all factual issues that cannot be considered in writ jurisdiction. The rationale behind setting aside an order/judgment on the grounds of non-provision of the right to cross-examine is to safeguard the affected party from being prejudiced due to non-providing of cross examination. Therefore, such reasoning presumes/implies the existence of prejudice. In other words, if the alleging party fails to prove any substantial prejudice caused to it due to such non-provision, it shall not have the inherent right to set aside such an order/judgment. The Court is of the considered view that parties cannot, by praying for cross-examination, cannot convert Show-cause Notice proceedings into mini-trials. Persons seeking cross-examination ought to give specific reasons why cross-examination is needed in a particular situation and that too of specific witnesses. A blanket request to cross-examine all persons whose statements have been recorded by the Department, many of whom are typically employees, sellers, purchasers, or other persons connected to the entity under investigation, cannot be sustained. If a prayer for cross-examination is made, the Authority has to consider the same fairly and if the need is so felt in respect of a particular person, the same ought to be permitted. If not, the Authority can record the reasons and proceed in the case. Moreover, cross examination need not also be of all persons whose statements are recorded. It could be permitted by the Authority in case of some persons and not all. Conclusion - In the present case, the mere rejection of the Petitioner s request for cross-examination cannot, in and of itself, be treated as a sufficient ground to bypass the statutorily prescribed appellate remedy and invoke the writ jurisdiction of this Court. The Court is of the opinion that the Petitioner ought to avail of its appellate remedy in accordance with law in respect of both orders dated 20th January, 2025 and 29th January, 2025 including the demand raised on 1st February, 2025 - Petitioner is, accordingly, permitted to approach the Appellate Authority by way of an appeal under Section 107 of the CGST Act within thirty days - Petition disposed off.

  ---

• 2025 (4) TMI 1153
  Challenge to orders of the Appellate Authority under the Central Goods and Services Tax Act, 2017 - dismissal of appeal after noticing the non-appearance of the petitioner - whether the Appellate Authority under the CGST Act can dismiss appeals for default? - HELD THAT:- Section 107 (12) of the CGST Act specifically states that the order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination and the reasons for the decision. In the light of sub-clause (12) of Section 107 of the CGST Act, it is evident that the Appellate Authority has to consider the matter on merits and is not entitled to dismiss an appeal merely for non-appearance. Of course, when there is failure of the appellant to appear, the Appellate Authority shall not grant more than three adjournments to a party during the hearing of the appeal. Despite the failure of an appellant to appear, the Appellate Authority has to pass an order after determining the points for consideration, and the decision should be on merits. When the impugned order is appreciated, it is noticed that the points for determination had not been stated and the order was not issued on merits. There is no consideration of any of the issues raised by the appellant, and hence, the impugned order is perverse and is liable to be interfered with, in exercise of the jurisdiction under Article 226 of the Constitution of India. Conclusion - The Appellate Authority under the CGST Act cannot dismiss appeals merely on the ground of non-appearance without deciding on merits and without stating points for determination and reasons. Petition allowed.

  ---

• 2025 (4) TMI 1152
  Jursiction - power of proper officer to issue a composite notice for different assessment years - HELD THAT:- A cumulative reading of Section 74 (1), (2) and (10) leaves no room for any doubt that each assessment year can be proceeded separately by the assessing officer or the proper officer as the case may be for the purpose of determining whether there is any willful misstatement or suppression of facts. The time limit prescribed under sub-section (10) of Section 74 of the Act shows that the order under sub-section (9) has to be issued within a period of five years from the due date of furnishing of the annual return for the financial year to which the tax is paid or short paid or input tax credit wrongly availed or utilised. This means that for each assessment year, the time limit prescribed for the completion of the proceedings is distinct and different. On reading sub-sections (9) and (10) of Section 74, which specifically refer to financial year to which the tax not paid or short paid or input tax wrongly availed or utilised relates while passing the final order of adjudication, it presupposes that independent show cause notice be issued to the assessee for each different years of assessment while proceeding under Section 74. We are constrained to hold so because, as we noted earlier, the assessee can raise a distinct and independent defence to the show cause notice issued in respect of different assessment years. In other words, the entitlement to proceed and assess each year being separate and distinct, and further the time limit being prescribed under the Statute for each assessment year being distinct, there are no no reason as to why it should not be held that separate show cause notices are required before proceeding to assess the assessee for different years of assessment under Section 74. In the present case, since the challenge to the show cause notice goes to the root of the jurisdiction of the proper officer in issuing the same and the writ petition is perfectly maintainable. Conclusion - The learned Single Judge failed to take note of these intricate questions of law involved while interpreting the provisions of Section 73 read with Section 74 of the CGST/SGST Act and thus failed to appreciate the contentions of the appellants in its true perspective and therefore erred egregiously in dismissing the writ petition relegating the petitioner to prefer reply to the notice before the adjudicating authority - the appellant has made out a case for interference and hence entitled to succeed. Ext.P1 show cause notice to the extent it relates to the assessment years 2018-2019, 2019-2020, 2020-2021, 2021-2022 stand set aside and Ext.P1 show cause notice to the extent it relates to 2017-2018 is sustained - appeal allowed.

  ---

• 2025 (4) TMI 1151
  Recovery of amounts from the petitioners electronic cash and credit ledgers after the petitioners had deposited the mandatory pre-deposit under Section 112(8) of the Central/West Bengal Goods and Services Tax Act, 2017 - HELD THAT:- Having regard to the provisions contained in Section 112 (8) of the said Act and the fact that that petitioners right to prefer an appeal before the Appellate Tribunal is subsisting which the petitioners could not exercise by reasons of the Appellate Tribunal not being constituted and also noting that the petitioner had deposited 10 per cent of the additional amount of tax in dispute in addition to the amount already deposited while preferring the appeal under Section 107 (6) of the said Act, and with regard to the circular dated 11th September, 2024, instead of seeking response from the respondents whether any amount has already been recovered from the petitioners in the manner as aforesaid, the matter can be disposed of by directing the respondents themselves to consider whether the aforesaid recovery as disclosed by the petitioners through the copy of the electronic liability ledger for the tax period 1st January, 2025 to 11th January, 2025 has been made, and in the event it is found that the respondents have deducted the aforesaid amount in respect of the tax period April, 2022 to March, 2023 to forthwith recredit the same to the respective cash/credit ledger of the petitioners so that the same is reflected in the electronic liability ledger of the petitioners for the month of May, 2025. Conclusion - The recovery of Rs. 50,330/- from the petitioners electronic cash and credit ledgers is unlawful. The respondents were directed to verify the recovery and re-credit the amounts forthwith. Without going into the merits of the matter, the writ petition stands disposed of.

  ---

• 2025 (4) TMI 1150
  Cancellation of registration of petiitoner - challenge to order of cancellation of registration on the ground of not providing an opportunity of hearing as well as such order was passed without assigning any reason for cancellation of the registration of the petitioner - HELD THAT:- The Coordinate Bench of this Court in case of M/s. Aggrawal Dyeing Printing vs. State of Gujarat [ 2022 (4) TMI 864 - GUJARAT HIGH COURT] has issued the guidelines to the respondent-authorities holding that all the writ applications deserve to be allowed solely on the ground of violation of principles of natural justice and, accordingly, the writ applications are allowed. The aforesaid judgement was rendered in the year 2022. However, in spite of the above direction issued by this Court, the respondent-authorities without following such directions are issuing cryptic notice and order for cancellation of registration number of the petitioner - In the present matter, order of cancellation of registration is passed without giving any reason by the respondent authorities. The impugned order passed by the respondent-Authority for cancellation of registration are required to be quashed and set aside. Accordingly, the matter is remanded back to the Assessing Officer at the show-cause notice stage - this petition is partly allowed by quashing and setting aside order of the respondent-Authority for cancellation of registration and the matter is remanded to the Assessing Officer at show-cause notice stage, however, the registration number of the petitioner shall remain suspended till such show-cause notice is disposed of as per the directions. Conclusion - The cancellation order passed without opportunity of hearing and without assigning reasons is unsustainable and violates natural justice. Petition disposed off by way of remand.

  ---

• 2025 (4) TMI 1149
  Challenge to adjudication orders passed by the respondent under the KGST Act for assessment year 2018-19 - difference/ discrepancy between the GSTR-7 and GSTR 3B - HELD THAT:- A perusal of the material on record including the impugned orders will indicate that it is an undisputed fact that the petitioner did not respond/reply to the show cause notice and the impugned ex-parte orders have been passed without hearing the petitioner. Under these circumstances, in view of the specific assertion on the part of the petitioner that his inability and omission to submit the reply to the show cause notice and participate in the proceedings was due to bona fide reasons, unavoidable circumstances and sufficient cause, by adopting a justice oriented approach and in order to provide one more opportunity to the petitioner, it is deemed just and appropriate to set aside the impugned orders and remit the matter back to the respondent for reconsideration afresh in accordance with law by issuing certain directions. The matter is remitted back to the respondent for reconsideration afresh in accordance with law, bearing in mind the aforesaid Circular bearing No. 183/15/2022-GST dated 27.12.2022 - petition allowed by way of remand.

  ---

• 2025 (4) TMI 1148
  Time limitation for filing SCN - whether the impugned SCN was issued beyond the permissible statutory limitation? - HELD THAT:- There are substance in the argument of learned counsel for the petitioner that a combined reading of Section 73(2) and (10) of the Act permits the Department to issue show cause notice upto three months prior to the passing of the assessment order. The assessment order was passed on 28.02.2025 and therefore, the show cause notice could have been issued upto 28.11.2024. Whereas, in the instant case, it was issued on 30.11.2024. Similar view was taken by the Andhra Pradesh High Court in M/s. The Cotton Corporation of India [ 2025 (2) TMI 362 - ANDHRA PRADESH HIGH COURT] . In view of the statutory provisions and interpretation by the Andhra Pradesh High Court, we find substantial force in the argument of learned counsel for the petitioner that the impugned assessment order cannot sustain judicial scrutiny. The impugned assessment order dated 28.02.2025 is set aside and the Writ Petition is allowed

  ---

• 2025 (4) TMI 1147
  Violation of principles of natural justice - neither the pre-intimation notice under Rule 142 (1A) nor the SCN were communicated or served upon the petitioner - Petitioner claims that petitioner was not aware of the said proceedings - HELD THAT:- Though several contentions have been urged by both sides as regards to the petitioner not having received the pre-intimation notice and show-cause notice and his inability and omission to contest the proceedings, it is a matter of record and an undisputed fact that the petitioner did not submit his reply to the show-cause notice or pre-intimation notice nor contested the proceedings, which culminated in the impugned ex-parte order. So also, the appeal filed by the petitioner before the second respondent has been dismissed as barred by limitation. Insofar as the appeal filed by the petitioner being rejected by the appellate authority vide order dated 01.10.2024 is concerned, since the same was dismissed as barred by limitation, the same would not constitute merger to come in the way of this Court exercising its jurisdiction under Articles 226 and 227 of the Constitution of India. Under these circumstances, having regard to the specific assertion on the part of the petitioner that his inability and omission to submit replies and contest the proceedings was due to bona fide reasons, unavoidable circumstances and sufficient cause, it is deemed just and appropriate to adopt a justice oriented approach and provide one more opportunity to the petitioner by setting aside the impugned order dated 10.07.2023 and remitting the matter back to the first respondent for reconsideration of the matter afresh in accordance with law to the stage of petitioner submitting reply to the impugned show-cause notice. Conclusion - The matter is remitted to the first respondent for fresh consideration after affording the petitioner an opportunity to submit reply and contest proceedings. Petiiton disposed off by way of remand.

  ---

• 2025 (4) TMI 1146
  Recovery of wrongfully availed ITC - rejection of application of rectification of the order on the ground that there was no error apparent on the face of the record in the said order and the said order was a reasoned and speaking in itself and was passed following the due process of natural justice - HELD THAT:- It appears that though in the case of the petitioner, there was a movement of the goods from the factory to the godowns and there was no actual sale of the goods as per the scheme of the GST Act, the tax is now levied on the supply of the goods i.e. movement of the goods from one place to another and accordingly the petitioner was required to obtain the GST number for its factory and different godowns situated at different locations in the country. Accordingly the petitioner obtained the GSTIN numbers in the State of Gujarat and from September, 2018 had obtained the GSTIN number for the warehouse situated at Surat. It appears that by mistake the petitioner referred to the GSTIN number which was obtained for the State of Gujarat was wrongly stated for the supplies received at warehouse/godown situated at Surat by mentioning earlier GSTIN No. 24AAACG4464B5Z0 instead of GSTIN No. 24AAACG4464B7ZY. On the part of the petitioner, there was no excess ITC claimed and only because of the wrong mentioning of the GSTIN number in Form-GSTR-1, there was a mismatch between the Form-GSTR-3-1 and GSTR-3B which was duly rectified by the petitioner later on and the respondent therefore could not have passed the impugned order raising demand on the basis of the mismatch between the form GSTR-1 and GSTR-3B inspite of the rectification/reconciliation made by the petitioner later on. On perusal of compliance report, it is clear that the same is contradictory or it appears that the respondents without careful examination of the submissions of the tax payer, reconciliation statement and audit findings have passed impugned order-in-original and cursorily rejected the rectification applications filed by the petitioner resulting into the raising of the huge demand on the petitioner for no fault on part of the petitioner. Conclusion - The impugned order-in-original is liable to be quashed and set aside because it was passed without proper consideration of the rectifications made by the petitioner and the reconciliation statements, and was contrary to the material on record. The impugned order-in-original is liable to be quashed and set aside - Stand over to 16/04/2025.

  ---

• 2025 (4) TMI 1145
  Refund claim - rejection of refund by deficiency memo on the ground that refund not allowed in case of payment made voluntary by DRC-03 - HELD THAT:- On perusal of the affidavit-in-reply, it appears that the respondent No. 4 has referred to the facts of the case without considering the issue raised in the petition for rejection of the refund claim of the petitioner by issuing deficiency memo in FORM GST RFD-03. Rule 90 of the GST Rules prescribes acknowledgement where the application relates to a claim of refund either from the electronic cash ledger or electronic credit ledger filed by the assessee as per Rule 89 (1) of the Rules. Rule 90 of the Rules prescribes the procedure while accepting or pointing out the deficiency in the application filed by the assessee in FORM GST RFD-01 - Rule 89 and 90 are the procedural rules with regard to filing of refund application and acknowledgement of such refund application so as to cure the deficiency in the refund application filed by the assesee. Therefore, at the stage of acknowledgement of the refund application filed by the assessee in FORM GST RFD-01, the same could not have been rejected by respondent No. 4 by stating Refund not allowed in cases payment made voluntary by DRC-03 . Rule 92 of the Rules provides for orders sanctioning refund and after deficiency in the refund application is cured by the assessee, a separate procedure is prescribed to pass an order either accepting or rejecting the refund application in FORM GST RFD-06 sanctioning the amount of refund or to grant an opportunity of hearing by issuing notice in FROM GST RFD-08. Conclusion - The respondent No. 4 has, inspite of pointing out the deficiency in the application filed by the petitioner in FORM GST RFD-01, rejected the same by issuing deficiency memo in GST RFD-03 stating that declaration is not in accordance with the procedure prescribed by the GST Rules. Respondent No. 4 therefore, ought to have pointed out the deficiency and could not have observed so in the deficiency memo for not allowing the refund as the petitioner has made payment in DRC-03. Such declaration or order is not contemplated in Rule 90(3)of the GST Rules. The impugned deficiency memo dated 30.09.2024 is hereby quashed and set aside and the matter is remanded back to the respondent No. 4 to consider the refund application filed by the petitioner in FORM GST RFD-01 in accordance with the Rules and take appropriate decision as to whether there is deficiency in the application or not - Petition disposed off by way of remand.

  ---

• 2025 (4) TMI 1144
  Seeking cancellation and setting aside of the regular bail granted to the Respondent - fraudulent billing racket, operating through 16 firms/ companies, engaged in the practice of issuing GST invoices without the actual supply of goods or services - HELD THAT:- While it is undisputed that no further investigation was conducted after the issuance of the first bail order, it was not the case before the CJM that the investigation had been completed, which would have warranted the Respondent s release on bail. The Court finds that there was no material change in circumstances, as held by the CJM in the impugned order. Therefore, in the opinion of the Court, the CJM s conclusion regarding a material change in circumstances is unfounded. To this extent, the observations made in the impugned order are deemed incorrect and are hereby set aside. The Court proceeds to examine as to whether the Respondent is now required to be re-arrested and committed to custody. On this issue, Mr. Harpreet Singh has apprised the Court that the investigation is now complete, and the Petitioner department is on the verge of filing a prosecution complaint. As previously mentioned, the Petitioner department, on 28th February 2025, with permission from the CJM, Patiala House Courts, recorded the Respondent s statement while he was in judicial custody. Therefore, as such, there is no requirement to direct the detention of the Respondent. Additionally, the Respondent has fully cooperated in the investigation and, after being released from custody, has informed the authorities that he is available for further statements as and when needed. Conclusion - The CJM s conclusion regarding a material change in circumstances is unfounded and set aside. The Court is of the opinion that significant time has elapsed since the issuance of the impugned order - Petition disposed off.

  ---

• 2025 (4) TMI 1143
  Cancellation of registration as a taxpayer due to non-filing of returns for six months continuously - returns are filed for a few months, subsequent to the issuance of SCN - HELD THAT:- A perusal of Rule 21 (h) and Section 29 (2) (c) of the CGST Act makes it explicit that when there is a failure to file returns for a continuous period of six months it gives a cause of action for the proper officer to cancel the registration after issuing a show cause notice. However, once the show cause notice is issued, the taxpayer is given the liberty to avoid cancellation of registration by filing the returns for all six months along with the tax interest and late fee. A piecemeal filing of returns is not contemplated by the Rules, as is evident from the proviso to Rule 22 (4) of CGST Rules. Unless the returns for all six months; along with tax interest and late fee, are submitted, the cause of action that arose due to non filing of returns for six months will not be wiped-off. In order to avoid the serious repercussion of cancellation of registration, it is an obligation for the taxpayer to file all the returns and pay the tax interest and late fee, after the show cause notice was issued. In the instant case, show cause notice was issued on 12.03.2024, while the petitioner filed Ext.P2 return on 13.03.2024 i.e., after the issuance of show cause notice. Two weeks later, she filed returns for yet another month. Still, the requirement of the proviso to Rule 22 (4) was not satisfied. The taxpayer had the liberty to avoid cancellation, by filing returns for all the six months. Once the cause of action arose by issuance of show cause notice, the end result can be avoided only by filing returns for all six months along with the tax interest and late fee. In the instant case, since petitioner had filed Ext.P2 return on 13.03.2024, after the issuance of the show cause notice, that too, initially for one month and two weeks later, for yet another month, the requirement of the proviso to Rule 22 (4) has not been satisfied - The default of non filing of returns for a continuous period of six months remained as on the date of show cause notice, and petitioner failed to rectify the mistake by filing all the returns along with the tax interest and late fee. Thus, the order cancelling the registration is legally justified and the same warrants no interference. Conclusion - The default of non filing of returns for a continuous period of six months remained as on the date of show cause notice, and petitioner failed to rectify the mistake by filing all the returns along with the tax interest and late fee. Thus, the order cancelling the registration is legally justified and the same warrants no interference. Petition dismissed.

  ---

• 2025 (4) TMI 1142
  Levy of GST - apartments and duplex row houses allotted to the petitioners - whether the petitioners had entered into agreement with respondent-BDA at the time prior to completion of the construction? - HELD THAT:- The completion certificate as produced by the respondent- BDA at Annexure-R2 would indicate that the project has been completed on 31.12.2018 - Reading of the completion certificate with the payment schedule and the completion certificate produced at Annexure-R2 would indicate that the project was completed only in the month of December, 2018, by which time, the petitioner had paid 4 instalments towards the cost of the construction, clearly indicating that the petitioner having paid the part of consideration during the process of construction. In other words, payments were made even before the completion of construction in terms of an agreement that had been entered into between the petitioner and the respondent -BDA. The petitioners in these writ petitions had applied for allotment of apartment/houses, which even as seen in the notification calling upon for application by the respondent-BDA, were still under construction. The said notification also specifically points out that applicable GST to be paid separately by allottees. The payment schedule referred to above would indicate that the part of the sale consideration was paid during the process of construction and much prior to issuance of completion certificate. It may be that there is no separate work contract entered into between the petitioners and the respondent- BDA, but what is the essence of law as found at Section 7 and Schedule II to the Central Goods and Services Tax Act, 2017 extracted above as well as the law laid by the Apex Court in the case of Larsen and Toubro Limited [ 2013 (9) TMI 853 - SUPREME COURT ], is that if the transaction is entered into before the completion of construction and the consideration was paid (partly or fully) before issuance of completion certificate, the same would amount to supply of services requiring payment of the service tax. Conclusion - The petitioners had entered into contracts and made payments during the construction period, prior to issuance of completion certificates. Therefore, the demand for GST by the respondent-BDA is in accordance with the provisions of the CGST Act, 2017. Petition dismissed.

  ---

• 2025 (4) TMI 1141
  Challenge to assessment order - challenge on the ground that the said proceeding does not contain the signature of the assessing officer - HELD THAT:- The effect of the absence of the signature, on an assessment order was earlier considered by this Court, in the case of [ 2023 (2) TMI 1224 - ANDHRA PRADESH HIGH COURT] . A Division Bench of this Court, had held that the signature, on the assessment order, cannot be dispensed with and that the provisions of Sections-160 169 of the Central Goods and Service Tax Act, 2017, would not rectify such a defect. Following this Judgment, another Division Bench of this Court, in the case of M/s. SRK Enterprises Vs. Assistant Commissioner, [ 2023 (12) TMI 156 - ANDHRA PRADESH HIGH COURT] , had set aside the impugned assessment order. Another Division Bench of this Court in the case of M/s. SRS Traders Vs The. Assistant Commissioner ST ors, [ 2024 (4) TMI 894 - ANDHRA PRADESH HIGH COURT] , following the aforesaid two Judgments, had held that the absence of the signature of the assessing officer, on the assessment order, would render the assessment order invalid and set aside the said order. Conclusion - The impugned assessment order would have to be set aside on account of the absence of the signature of the assessing officer, on the impugned assessment order. Petition disposed off.

  ---

• 2025 (4) TMI 1140
  Non-production of the documents by the petitioner during the audit - HELD THAT:- . It was submitted that the main grievance of the petitioner, so far as paragraph No.1 to 5 of the LAR No. 101 is concerned, the same are closed. The same has been accepted by the respondents in their affidavit-in-reply dated 28th January, 2025. Therefore, no purpose would be served by keeping this petition pending. Petition disposed off.

  ---

• Income Tax

• 2025 (4) TMI 1139
  Ex-parte order passed by High court - reopening of assessment - Entitlement to exemption under Sections 11 and 12 - HELD THAT:- We take notice of the fact that after the impugned order came to be passed by the High Court, the petitioner preferred a review petition trying to make good his case that in fact, there was no service effected of the notice issued by the High Court. We are of the view that as the review petition is pending before the High Court, we should not say anything further in the matter. Let the High Court look into the review petition and take an appropriate decision in accordance with law. In the event, if the order is adverse to the petitioner, it shall be open for him to avail appropriate legal remedy before the appropriate forum in accordance with law. Since demand has already been raised and there is some urgency, we request the High Court to take up the review petition and see to it that the same is disposed of on its own merits within a period of four weeks from today.

  ---

• 2025 (4) TMI 1138
  Validity of Revision u/s 263 as set aside by ITAT - estimation of bogus expenditure - As decided by HC [ 2023 (7) TMI 1570 - CALCUTTA HIGH COURT] invoking his power u/s 263 has proceeded based on conjecture and there is no finding recorded that the books of accounts of the assessee were rejected. The specific issue raised by the assessee that the documents and details were furnished before the assessing officer was not found to be incorrect. HELD THAT:- No satisfactory explanation has been offered to condone the delay in filing the Special Leave Petition. Even otherwise on merits also, no case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special Leave Petition is accordingly dismissed on the ground of delay as well as on merits.

  ---

• 2025 (4) TMI 1137
  Validity of revision u/s 263 - as per HC [ 2024 (9) TMI 1725 - PUNJAB HARYANA HIGH COURT] simply by holding that the AO was required to make more enquiries, would not be a valid ground for treating the order of the AO as erroneous and prejudicial to the interests of the revenue. The power u/s 263 of the Act cannot be invoked in such circumstances by the PCIT. The order, therefore, passed by the PCIT is not sustainable in the eyes of law and the same has been quashed by the ITAT. HELD THAT:- Order passed by the High Court, which upheld the decision of the Tribunal, is correct on facts and in law as case does not involve a failure by the assessing officer to conduct an investigation. Instead, according to the Revenue, it is a case where the assessing officer having made inquiries erred by not making additions. The assessee does not have control over the pen of the AO. Once the AO carries out the investigation but does not make any addition, it can be taken that he accepts the plea and stand of the assessee. In such cases, it would be wrong to say that the Revenue is remediless. The power u/s 263 can be exercised by the Commissioner of Income Tax, but by going into the merits and making an addition, and not by way of a remand, recording that there was failure to investigate. There is a distinction between the failure or absence of investigation and a wrong decision/conclusion. A wrong decision/conclusion can be corrected by the Commissioner of Income Tax with a decision on merits and by making an addition or disallowance. There may be cases where the AO undertakes a superficial and random investigation that may justify a remit, albeit the CIT must record the abject failure and lapse on the part of the Assessing Officer to establish both the error and the prejudice caused to the Revenue. Recording the aforesaid, the special leave petition is dismissed.

  ---

• 2025 (4) TMI 1136
  Validity of Revision u/s 263 - ITAT held that order passed by the PCIT in exercise of Section 263 of the Act, 1961 is not in accordance with law as no reasonable opportunity of hearing was granted to the assessee/respondent and also incidentally held that the action of the A.O. is not erroneous. HELD THAT:- Where an A.O. has applied her/his mind (even if briefly) and arrived at a logical conclusion, the revisional authority cannot intervene under Section 263 of the Act, 1961 just because it has a different view or because he expected a more exhaustive reasoning in the order. To hold otherwise would convert the revisional power into an appellate review, which is not its intent. Prejudicial to interests of Revenue as provided in Section 263 of the Act, 1961 typically meaning that the error has caused a loss of tax revenue (short levy of tax) or posed a potential threat to the Revenue s ability to collect the rightful tax. If an error has no bearing on the taxable income (for instance, a procedural irregularity that doesn t affect the tax computation), revision is not justified. Though the PCIT has found the order of the A.O. erroneous in so far as it is prejudicial to the interest of Revenue, but no reasonable opportunity of hearing was aforded to the assessee/respondent herein to defend himself in light of provisions contained in Section 263 and, therefore, the order of the PCIT is liable to be quashed/set aside. We are of the considered opinion, order passed by the PCIT is in teeth of principles of provisions contained in Section 263 of the Act, 1961 as no reasonable opportunity of hearing was afforded to the assessee and also in light of principles of law laid down in the matter of Amitabh Bachchan [ 2016 (5) TMI 493 - SUPREME COURT] Since the ex parte order was passed invoking Section 263 by the PCIT without hearing the assessee/respondent herein, the finding recorded by the PCIT that the order is erroneous in so far as it is prejudicial to the interest of Revenue, is not the correct finding based on the records and, therefore, it has rightly been set aside by the ITAT. As such, we do not find any merit in the present tax appeal. Consequently, the question of law is answered in favour of the assessee and against the Revenue.

  ---

• 2025 (4) TMI 1135
  Reopening of assessment u/s 147 - Reason to believe - whether interest cost claimed by the petitioner u/s 37(1) is capital or revenue expenditure? - HELD THAT:- It is not in dispute that the case of the petitioner was under scrutiny and after calling for information and considering the material available on record, the AO passed the order under section 143(3). It is also apparent from the facts of the record that the impugned notice is issued after four years and therefore, as per the proviso to section 147 when the petitioner has disclosed fully and truly all material facts for the purpose of assessment and assessment order is passed after scrutiny under section 143(3) of the Act, no action could have been taken by AO by assuming jurisdiction to reopen the assessment for the year under consideration. Moreover in facts of the case the consideration of issue as to whether interest cost claimed by the petitioner u/s 37(1) is capital or revenue expenditure is nothing but mere change of opinion by the respondent Assessing Officer while assuming jurisdiction which is not permissible in view of decision of Kelvinator of India Ltd [ 2010 (1) TMI 11 - SUPREME COURT] The impugned notice issued u/s 148 along with consequential proceedings are hereby quashed and set aside - Decided in favour of assessee.

  ---

• 2025 (4) TMI 1134
  Validity of reassessment notice - providing shorter period to respond - HELD THAT:- As rightly contended by the learned counsel for the petitioner, a plain reading u/s 148A(b) will indicate that the minimum statutory period prescribed therein is 7 days as held in the case of Janaki Aenuga[ 2024 (1) TMI 1456 - KARNATAKA HIGH COURT] In the instant case, a perusal of the impugned notice will indicate that it was issued on 20.03.2022 by granting time up to 25.03.2022 to the petitioner to submit his reply which clearly short of the minimum period of 7 days prescribed in the said provision and consequently, on this ground alone, the impugned notice at Annexure B and consequential proceedings including the impugned assessment order notices etc., deserves to be quashed. Decided in favour of assessee.

  ---

• 2025 (4) TMI 1133
  Assessment order passed in the name of non-existing bank/OBC - unexplained investment addition u/s 69 - HELD THAT:- As it is apparent that respondent No.1 as well as NFAC Center who has passed the impugned order is without application of mind and without considering the fact that the OBC in whose name impugned assessment order is passed, does not exist and therefore, no assessment order could have been passed in the name of the OBC. Procedural requirements under the Act, including prior approval - On the basis of the Multi Year MNS data which is an abstract phenomenon unknown to anyone nor disclosed in the assessment order as to what type of Multi Year MNS Data is made available to the AO the AO has proceeded to make addition without making any inquiry ignoring the factual submission made by the petitioner-PNB to the effect that the OBC Bank does not exist after 01.04.2020 and therefore, there could not have been any assessment order being passed in the name of the said Bank having PAN AAACO7436M . The impugned assessment proceedings have been initiated with prior permission of the higher authorities u/s 151. It appears that the Additional CIT, Range-2(1), Vadodra, also without application of mind, has sanctioned the approval for issuance of the notice u/s 148 of the Act. Decided in favour of assessee.

  ---

• 2025 (4) TMI 1132
  Validity of Assessment u/s 153A/153C - As alleged approval u/s.153D by the JCIT is mechanical and without application of mind - HELD THAT:- The approval of JCIT should reflect application of mind, which is missing in the instant case. The requirement of approval cannot be treated as mere formality and the mandate of the Act is that the approving authority has to act in a judicious manner by due application of mind in a manner of a quasi-judicial authority. It is settled law that if the approval has been granted by the approving authority in a mechanical manner, the very purpose of obtaining approval u/s. 153D of the Act and the mandate of the enactment by the legislature will be defeated. However, JCIT without any consideration of merits in proposed additions with reference to the incriminating material collected in search etc. has proceeded to grant a simplicitor approval. This approach of the JCIT has rendered approval to be a mere formality and cannot be countenanced in law. In view of the peculiar facts and circumstances of the case, we are of the considered view that approval by JCIT is not valid, hence, deserves to be quashed. In view of above, it is clear that Jt. Commissioner of Income Tax has given approval which is purely mechanical and without application of mind. Appeal of assessee allowed.

  ---

• 2025 (4) TMI 1131
  Income chargeable to tax in India or not - Service fees received from Indian affiliate constitute Fees for Technical Services (FTS) taxable in India u/s 9(1)(vii) and Article 12 of the India-USA DTAA - meaning of the phrase make available - HELD THAT:- Section 5(2) of the Act provides that the income of a non- resident tax payer can be taxed in India if it is received or is deemed to be received in India or accrues or arises in India. Section 9(1)(vii) of the Act provides that income by way of FTS payable by any resident assessee of India shall be deemed to accrue and arise in India in the hands of non- resident assessee. In view of the above decision in the case of IMG [ 2024 (7) TMI 287 - DELHI HIGH COURT ], we analyze the facts that whether the service rendered by the assessee fall under the head FTS. Counsel did not bring any material on the record to contradict the finding of the AO that the service provider (the assessee) is using the human resource with technical experience and expertise. The nature of service provided by the service provider (the assessee) are not limited to the general and administrative services as contended by the assessee. This suggests that the service provided by the assessee are technical in nature within the meaning of Section 9(1)(vii). By plain reading of the Article-3 of the above mentioned service agreement, the prima-facie inference emerged is that the services rendered by the assessee to the Crocs India are not purely general in nature as evident from this Article that the services had been provided by the competent technical expertise and qualified professionals. Thus, this Article buttresses the AO s inference that the service provided by the assessee are technical in nature within the meaning of Section 9(1)(vii). We are of the considered opinion that the services rendered by the assessee to the Crocs India are in the nature of FTS. Whether the make available condition can be said to have been satisfied? - FTS with make available clause restricts the interpretation of what would fall within the meaning of FTS. It is not just technical knowledge being transferred but also the recipient being able to utilise the same without any assistance from the service provider; i.e. the assessee. Section 90(2) of the Act along with well-settled jurisprudence allows assessee s to take the Act or the DTAA whichever is beneficial to them. In the present case the assessee has preferred DTAA over the Act. Given this background, we now look at Section 9(1)(vii) of the Act and then the DTAA s with the make available clause interpretation of Section 9(1)(vii) of the Act. Here, in the present case, the contract in the matter was only for provision of services and not for supply of technical designs or plans. The assessee has not made available the technical knowledge and its expertise to the Crocs India. Several judicial decisions have clearly outlined the ambit of the make available . The Hon ble Delhi High Court in the case of IMG [ 2024 (7) TMI 287 - DELHI HIGH COURT ] has held that the real test for make available clause is to ascertain that whether the recipient of service has absorbed the skills and expertise of the service provider and have the capability to deploy that knowledge or skill without reference to the original service provider. The transfer of capabilities and not just temporary use of the provider s knowledge, skill or expertise was held to be the decisive factor for satisfaction of make available clause. The impugned assessment order has not mentioned any fact, which may demonstrate that the condition of make available clause gets satisfied. Applying the above tests to the facts of the case at hand, we find that there was no expertise, skill or know-how which could be said to have been made available by the assessee to the Crocs India, inasmuch as various services provided by the assessee were absorbed by the Crocs India to enable or equip it with the special knowledge underlying the service provided. The relatively long tenure of 15 years of the agreement weighed in favour of the assessee that it was not a case of transfer of knowledge or skill to the Crocs India. Thus, we held that the condition of make available is not fulfilled in the present case. Therefore, the service charges received by the assessee from Crocs India, though FTS, is not chargeable to tax as per the India-US DTAA. We therefore, delete the income. Appeal of the assessee is allowed

  ---

• 2025 (4) TMI 1130
  Validity of jurisdiction assumed u/s 153C - scope of satisfaction note recorded by the AO - HELD THAT:- Mere drawing of a perfunctory satisfaction without meeting basic ingredients of providing some tangible descript information and application of mind thereon has no standing in law and would not confer drastic jurisdiction of assessment u/s 153C of the Act on a person other than searched person. The jurisdiction assumed based on such lackadaisical satisfaction note beset with vital infirmities cannot be countenanced in law. The objections raised on behalf of the assessee towards lack of jurisdiction based on a cryptic and non-descript satisfaction thus deserves to be sustained. While recording a consolidated satisfaction note is not a bar in law per se as rightly contended on behalf of the revenue, but however, in the same vain, the documents/assets searched need to be specified against each year covered in the satisfaction note to depict application of mind and initiation of action u/s 153C of the Act qua such assessment years. AO has apparently failed to do so in the present case. As a corollary, the notice issued u/s 153C and consequent assessment order passed u/s 153C is vitiated in law and requires to be quashed. The jurisdiction assumed u/s 153C based on vague and non-descript satisfaction note is vitiated at the threshold. The consequence assessment order passed u/s 153C thus has no force of law. Appeal of the assessee is allowed.

  ---

• 2025 (4) TMI 1129
  Disallowance of claim u/s. 54 - intimation u/s. 143 (1) disallowing the alleged claim - HELD THAT:- An intimation is issued in respect of a return filed by the assessee. Such intimation is to make adjustment in regard to certain specific issues which are provided in the provisions of section 143 (1) (a). The assessee had admittedly not made a claim u/s. 54 in the return filed by him. Since the assessee has not made the claim u/s. 54, hence it no more lies in the realm of the 143 (1) (a) to enter into any issue which has not been claimed by the assessee and for making any disallowance. As there is no claim u./s. 54 of the Act in the return filed by the assessee, the disallowance made in the intimation u/s. 143 (1) (a) in respect of the valuation itself is inadmissible. This being so, the addition as made in the intimation u/s. 143 (1) (a) and ad decided by the Ld. CIT(A) stands deleted. Appeal of the assessee is allowed.

  ---

• 2025 (4) TMI 1128
  Cancelling the registration of the assessee-trust by passing an order u/s. 12AB(4) - AO s reference as per the provision of second proviso to section 143(3) - AO discovered based on search materials that the trustees owned hotels, bars, and a marriage hall in their personal capacity, however, the expenditures incurred on the renovation and alteration of these establishments were borne by the assessee s funds. Additionally, the AO found that the assessee had accepted loans and made repayments in violation of the provisions of sections 269SS and 269T HELD THAT:- We note that the cancellation of the registration by the Learned PCIT was primarily based on the reference made by the AO under the second proviso to section 143(3) of the Act. The assessee has rightly contended that this provision was inserted by the Finance Act, 2022, with effect from April 1, 2022, making it applicable only from AY 2022-23 onwards. Since, the AO s reference pertains to AY 2021-22, which falls before the enactment of this provision, the invocation of this provision for making a reference to the ld. PCIT is legally untenable. It is the trite law that the provisions of law as applicable to the relevant year has to be applied in that year. Thus, we hold that any action based on such an invalid reference lacks legal sanctity, rendering the subsequent cancellation order unsustainable. See LAKHMI CHAND CHARITABLE SOCIETY [ 2024 (8) TMI 1297 - ITAT DELHI] PCIT has invoked the explanation to section 12AB(4) of the Act to hold the assessee committed specified violations, particularly in terms of fund diversion for the personal benefit of the trustees and non- application of funds in accordance with the objectives of the trust - As rightly pointed out by AR, the Finance Act, 2022, which introduced the concept of specified violations u/s 12AB(4) of the Act, became effective only from April 1, 2022. Since the assessment year in dispute is AY 2021-22, these provisions were not applicable at the relevant point of time. Consequently, the PCIT s reliance on these provisions is erroneous, and the cancellation of the trust s registration based on inapplicable legal provisions cannot be sustained. AO s satisfaction, which formed the basis for the reference to the PCIT - We find merit in the argument of the ld. AR that the AO s satisfaction regarding the assessee s alleged violations was formed without independent inquiry or verification of the materials seized during the search proceedings. AO appears to have solely relied on the seized documents and statements recorded during the search without conducting any further independent inquiry into the genuineness and authenticity of such materials. This fact can be verified form the notices issued u/s 142(1) by the AO during the assessment proceeding. It is a well-settled principle that mere possession of incriminating material does not automatically establish wrongdoing unless corroborated with substantive evidence through an independent inquiry. Provision of section 132(4A) and 292C of the Act provide presumption that in the course of search proceeding any books of account or other document etc found in possession of any person then it may be presumed that such books of account or other document etc belong to such person and content of such books of account or document are true. However, it is settled possession of law that impugned presumption is rebuttable presumption. In the case of hand, it appears that the AO has drawn presumption reading the seized material being true and accordingly made refence to PCIT for alleged violation as specified in the amended provision of section 12AB(4). However, we note that AO has drawn such presumption without affording opportunity to the assessee to rebut the same. Hence it can be safely assumed that the AO merely relied on the seized material forwarded the search authority without applying mind. The AO s satisfaction, therefore, appears to be a case of borrowed satisfaction, which is legally unsustainable. Considering the legal infirmities in the reference made by the AO, the incorrect application of amended provisions retrospectively, the absence of independent verification, we find that the cancellation of the assessee s registration u/s 12AB is legally unsustainable. Appeal of the assessee is allowed.

  ---

• 2025 (4) TMI 1127
  Addition of 2% of the expenditure incurred in cash - cash withdrawals has been treated as unexplained expenditure and added the same u/s 68 - HELD THAT:- We note that the assessee is acting on behalf of the jute mills as Kachcha Arahtiya on commission basis. The assessee has been engaged in this business for the past several years and continuously following the same system of accounting as well i.e. receiving payments from jute mills and passing the same to cultivators/jute growers and the revenue has accepted the income of the assessee in all the assessment years in the summary proceedings u/s 143(1) of the Act. There are no pending proceedings against the assessee in any other assessment year where the case of the assessee has been reopened on the basis of any scrutiny proceedings for current assessment year. CIT(A) has simply confirmed the addition partly @ 2% of total expenditure incurred in cash without any reasoning. CIT(A) has partly confirmed the addition on surmises and presumption without any basis and therefore the appellate order cannot be sustained. Accordingly, we set aside the order of the ld. CIT(A) and accordingly direct the Assessing Officer to delete the impugned addition. Decided against revenue.

  ---

• 2025 (4) TMI 1126
  Disallowance of interest due to some interest free advance given by the assessee - HELD THAT:- The assessee has not paid any interest to partners capital and the balance in average is more than Rs. 200 lakh. The assessee received loans and advances from relatives to the extent of Rs. 1.79 lakh that too without interest to the assessee. Some more loans and advances were received by the assessee against which no material shows that the assessee has paid interest. Assessee s factory is situated at Burhanpur, which constructed on the land which belongs to Shri G.N. Bhattad, who is one of the partners in assessee s firm. In the interest of assessee s business the money has been paid to Shri G.N. Bhattad, failing which Shri G.N. Bhattad, would have forced the assessee to vacate the land. Shri G.N. Bhattad, is said to be father of one of the partners and also the real uncle of the partners of the assessee firm. Therefore, the money being rotated was within the family members of the assessee firm. Since the assessee has not paid any interest on capital of approx. Rs. 200 lakh, the amount of Rs. 44.27 lakh or average balance of Rs. 67.47 lakh is hereby treated as capital advance and treating the same as interest paid on advance is not correct. Accordingly, AO was not justified in making addition on account of upholding the addition made by the AO on account of disallowance of interest due to some interest free advance given by the assessee is not justified. Decided in favour of assessee.

  ---

• 2025 (4) TMI 1125
  Cash Payment exceeding Rs. 20000/- - Addition by invoking the provisions of Section 40A(3) - payments toward purchase of land/plots/expenses made/incurred by assessee - HELD THAT:- It is not the case of the AO that the cash payments were not genuine and intended to evade taxes. Therefore the cash payments made by the assessee were out of business compulsion and commercial consideration and are covered by the exception provided in Rule 6DD. The facts of the instant case are materially similar as decided by the co-ordinate bench above. Therefore, respectfully following the case of M/s A Daga Royal Artis [ 2018 (6) TMI 1240 - ITAT JAIPUR ] we set aisle the order of the ld. CIT (A) and direct the ld. AO to delete the addition. Cash deposits during the demonetization period - HELD THAT:-As we find that the money was received from different persons to whom the payments were made on account of advances for land purchase/plots. We have examined the cash book of the assessee and find that assessee has duly shown these receipts against the advances already given against purchase of land/plots. Therefore, we are not in agreement with the conclusion drawn by the ld. CIT (A) on this issue and accordingly, we set aside the order of the ld. CIT (A) on this issue by directing the ld. AO to delete the addition. The appeal of the assessee is allowed.

  ---

• 2025 (4) TMI 1124
  Addition u/s 68 - Unsecured loans - identity, creditworthiness was not established - HELD THAT:- Based on the overall facts and evidence placed on record we note that the assessee has provided details on the record to prove the identity [PAN number and confirmation], genuineness [ bank statement and ITR ] and capacity [ ITR ] so the made u/s. 68 is not correct and is directed to be deleted. See Jaikumar Bakliwa [ 2014 (8) TMI 685 - RAJASTHAN HIGH COURT ] wherein held it is an admitted position that all the cash creditors have affirmed in their examination that they had advanced money to the assessee from their own respective bank accounts. Therefore, when there is categorical finding even by the AO that the money came from the respective bank accounts of the creditors, which did not flow in the shape of the money, then, in our view, such an addition cannot be sustained and has been rightly deleted by both the two appellate authorities. There is no clinching evidence in the present case nor the AO has been able to prove that the money actually belonged to none but the assessee himself. The action of the AO appears to be based on mere suspicion. Decided in favour of assessee.

  ---

• Customs

• 2025 (4) TMI 1123
  Classification of imported goods - Poly Crystalline Silicon (C-Si), Solar Photovoltaic Modules (Solar Modules) - to be classified under CTH 85414011 or under CTH 8501 of the Customs Tariff Act? - it was held by CESTAT that The Solar Panel imported by the Appellants merit classification under CTH 8541 and as a result the impugned orders in the captioned Appeals are set aside. HELD THAT:- There are no merit in the present appeal. Hence, the appeal is dismissed.

  ---

• 2025 (4) TMI 1122
  Challenge to SCN and order in original on the ground of time limitation - fraudulent claims under the Duty Drawback Scheme - contention of Petitioner is that the exports dated back to 2013-15 and the impugned SCNs have been issued only in 2021 - HELD THAT:- The impugned SCNs have been issued based on documents recovered from the Petitioner as also received from the Delhi Chamber of Commerce. For eg., in the invoice related to the export of soccer balls/ sports goods, the two recovered parallel invoices placed on record prima facie, reveal the manner in which the goods were being over-valued by the Petitioner - the two invoices, the same product, i.e., inflated soccer balls made of Polyurethane, are valued at 0.36 USD in one invoice and 9.70 USD in the other. This, in essence, shows an overvaluation of the product to the tune of approximately 27 times the original value i.e., an increase of 2700%(approx.). The total value of the invoice with the original price is 2176 USD whereas the value of the invoice with the over-valued price is 56,032 USD. There is no doubt that the former set of invoices was submitted to the Delhi Chamber of Commerce, and the latter set was filed to the Department. The difference might have come to the notice of the Department much later after the assessment was conducted. Accordingly, the issuance of the impugned SCN cannot be held to be barred by limitation. Rule 16 of the Drawback Rules does not prescribe any limitation, the Court is of the opinion that in the absence of a prescribed period of limitation being provided by the statute, the general limitation period of three years cannot be presumed to apply by default, especially when there are strong suspicions as to the fraudulent availment of duty drawbacks and knowledge of such availment is acquired much later. It is relevant to note that this Court in YOGENDRA SINGH BALYAN VERSUS UNION OF INDIA ORS. [ 2025 (3) TMI 752 - DELHI HIGH COURT] , in fact, relegated the co-noticee to avail the statutory appellate remedy. Further, the Coordinate Bench of this Court in Commr. of Customs v. Sans Frontiers, [ 2023 (12) TMI 695 - DELHI HIGH COURT] where a similar issue of limitation under Rule 16 of the Duty Drawback Rules was raised, the Court had relegated the case on the ground that there was an alternate remedy that remained un-exhausted. Considering that the co-noticee has been relegated to the appellate remedy, this Court is of the opinion that, though the exercise of writ jurisdiction in favour of the Petitioner may not be warranted, the Petitioner ought not to be denied the opportunity to avail the statutory remedy on grounds of parity - the Petitioner is also permitted to avail of the appellate remedy under Section 128 of the Customs Act, 1962. Conclusion - The availability of an efficacious statutory appellate remedy under Section 128 of the Customs Act militates against the exercise of writ jurisdiction under Article 226 in such matters, particularly where the Petitioner failed to contest the allegations on merits during the SCN proceedings. Petition disposed off.

  ---

• 2025 (4) TMI 1121
  Refund of IGST paid manually through TR6 challans in respect of import duties paid under the Customs Act, 1962 - refund sought on the ground that there is no provision to take credit of IGST paid manually through TR6 challans, as TR6 challan is not a specified document under Rule 36 of CGST Rules - HELD THAT:- This very issue had come up before the Coordinate Bench of this Tribunal at Chennai in the appellant s own case, wherein the Bench, vide Final Order No. A/40158- 40177/2022 dated 06.05.2022 [ 2022 (5) TMI 394 - CESTAT CHENNAI] , inter alia, held that the appellant is not eligible to claim refund under Section 142(3) of the CGST Act, 2017. Similar decision was also given by Chennai Bench in the case of Servo Packaging Ltd. Vs CGST CE, Puducherry [ 2020 (2) TMI 353 - CESTAT CHENNAI ]. In other words, in the above cases, it was held that if any amount in respect of CVD and SAD is paid on account of nonfulfilment of export obligation, the same cannot be claimed as refund under Section 142(3) of the CGST Act, 2017. The Hon ble Supreme Court in the case of UOI Vs COSMO Films Ltd [ 2023 (5) TMI 42 - SUPREME COURT ] has taken note of this lacuna and thereby, issued directions to CBIC to take corrective measures. CBIC in its Circular No.16/2023-Cus dt.07.06.2023, prescribed the procedure for payments to be made under Sec 28(1)(b), which has only prospective impact. Therefore, no any benefit to appellants by this circular. Conclusion - The appellants are not entitled to refund of IGST paid via manual TR6 challans under the existing statutory framework and procedural requirements. Appeal dismissed.

  ---

• Corporate Laws

• 2025 (4) TMI 1120
  Rejection of prayer for discharge of the petitioner - rejection on the ground that prayer for discharge by the petitioner cannot be entertained because Law is apposite that if any officer or employee of a company having validly obtained possession of a property of a company, wrongfully retains the same, as appears to be the case in this proceeding, it would constitute an offence contemplated in Section 452 of the Companies Act, 2013 - HELD THAT:- In the present case, the Learned Magistrate only issued summons upon the petitioner. The Learned Trial Court shall have to decide the case on its own merits on the basis of the evidence led by the parties for final decision. It is beyond the jurisdiction of this Court to embark upon final conclusion at this stage without leading evidences by the parties that the petitioner wrongfully withheld the articles of Company or not. In the case of Hooghly Mills Company Limited Vs. State of West Bengal and Another [ 2019 (12) TMI 397 - SUPREME COURT] , the Hon ble Supreme Court held that In the present case, the order of the Magistrate under Section 630(2) was an interlocutory relief based on a prima facie assessment of facts and did not conclusively decide the ongoing trial under Section 630(1). If the Magistrate finds that the appellant company has been unable to prove that the 2nd Respondent was wrongfully withholding possession of the property, such interlocutory relief shall stand vacated. In light of the above discussion, it is clear that there was no exceptional case of illegality or lack of jurisdiction in the interlocutory order of the lower court calling for the exercise of the inherent powers of the High Court under Section 482, Cr.P.C. In the light of above discussion and judgments passed by the Hon ble Supreme Court in the aforesaid referred case, this Court is of the opinion that the Criminal Revisional application has devoid of merits. Conclusion - Order of rejection of discharge from the case is found correct, legal and well within the jurisdiction as such same is not required to be interfered. Revision dismissed.

  ---

• Insolvency & Bankruptcy

• 2025 (4) TMI 1119
  Doctrine of priority - priority of chrages - first/primary charge over the movable assets of the Corporate Debtor - whether the Respondent s registration of a charge under Section 77 of the Companies Act, 2013, or UCO Bank Consortium s non-registration of the charge with the ROC can become the basis for disregarding UCO Bank Consortium first charge based on 8th Supplemental Deed of Working Capital Consortium Agreement? - HELD THAT:- Section 48 of TP Act stipulate Doctrine of Priority which is based on the Principles of Natural Justice, asserting that when rights are granted to two individuals at different times, the one who possesses the earlier right will also have the legal advantage. This principle is applicable only in situations where the competing interests of the parties are otherwise equal. This doctrine is derived from the legal maxim qui prior est tempore potior est jure, which translates to he who is first in time is stronger in law. Section 48 of the TP Act establishes a fundamental principle that no individual can transfer a title greater than what he possess. This means that if a transferor conveys the same property to multiple transferees, each transferee will hold rights equivalent to those of the previous transferee. The doctrine dictates that once a transfer is initiated, the transferor cannot disregard prior grants or engage with the property without acknowledging existing rights. Section 48 of the TP Act, clearly protect the right of first charge holder. Although, Section 48 strictly speaking is w.r.t. immovable properties, in the present case there is common 8th Supplemental Deed of Working Capital Consortium Agreement, where charges were created both on movable and immovable assets of the Corporate Debtor in favour of the UCO Bank Consortium, therefore, interpretation of Section 48 of the TP Act will help the cause of the Appellant for ensuring the charges in favour of UCO Bank Consortium as first charge holder. This Appellate Tribunal in the matter of J.M. Financial Asset Reconstruction Company Ltd v Finquest Financial Solutions Pvt. Ltd. [ 2020 (1) TMI 275 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] held that after enforcement of right under Section 52 of the Code by one of the secured creditors, no other secured creditor can enforce his right subsequently. Thus, only one secured creditor can enforce his right to realise its debt out of secured assets under Section 52 of the Code. The Hon ble Supreme Court of India has in various judgments including in the matter of DBS Bank v. Ruchi Soya [ 2024 (1) TMI 186 - SUPREME COURT] that Sections 52 and 53 of the Code must be read together, and also Section 53(2) expressly states that contractual arrangement inter-se creditors must be disregarded. Only if the asset is charged exclusively to a particular creditor then Section 52 can be given effect. The arguments of the Respondent w.r.t. his holding first charge on movable assets of Corporate Debtor due to charge registered with RoC are not attractive. Conclusion - i) The UCO Bank Consortium holds the first pari-passu charge over the movable assets of the Corporate Debtor as per the Consortium Agreement and its 8th Supplemental Deed. ii) The Respondent failed to identify the charged assets sufficiently to enforce realization under Section 52 of the Code. There are merits in the arguments of the Appellant. The appeal is allowed.

  ---

• Law of Competition

• 2025 (4) TMI 1118
  Dismissal of application filed by the petitioners under Section 42 of the Competition Act, 2002 to initiate investigation against respondent no.2/the Department of Town and Country Planning, Haryana (DTCP) - non-compliance with the interim and final orders passed by the CCI - HELD THAT:- After some hearing, counsel for the petitioners in these matters, confine themselves to seeking that the present petitions be treated as information under Section 19(1)(a) of the Competition Act, and duly considered by Respondent No. 1. It is directed accordingly. The petitioners shall comply with the requisite procedural formalities as prescribed by the respondent no.1, including payment of the prescribed fees. In view of the anomalous conduct of the respondent no. 2, as highlighted by the petitioners, the respondent no.1 is requested to bestow its urgent consideration to the matter. While considering the matter, the respondent no.1 shall also take into account the order/s of the Supreme Court with regard to the levy of EDC, which may have a bearing on the complaint of the petitioners in the present case. The respondent no.1 shall also take into account the previous investigation report already conducted by the Director General as referred to in paragraph 11 of the order dated 13.07.2022 passed by the respondent no.1. Petition disposed off.

  ---

• Service Tax

• 2025 (4) TMI 1117
  Liability of petitioner, as a subcontractor providing works contract services to pay service tax - failure to produce requisite documents and cooperate with the tax authorities affects the determination of service tax liability - HELD THAT:- In the present case, admittedly the petitioner has a remedy available under Section 35 (b) of the Central Excise Act, 1944 read with Section 86 of the Finance Act, 1994. The appeal is required to be filed within a period of three months from the date of impugned order before the Tribunal. The impugned order has been passed on 13.02.2024 and the same has been communicated to the petitioner vide Memo No. 535 dated 13.02.2024. The present writ application seems to have been presented in this Court on 26.07.2024, thus it is evident that much after expiry of the period of limitation for filing appeal before the Tribunal, the present writ application has been preferred. This Court further finds that the petitioner was given personal hearing through its representative. Several dates were fixed one after another giving opportunity to the representative of the petitioner to produce the documents. The adjudicating authority has found that the noticee was providing taxable services to their various clients - It is the submission of the petitioner that there cannot be a double taxation, however, even on this point the adjudicating authority has discussed the matter, for this purpose the challans showing deposit of service tax by respondent no. 4 and respondent no. 5 have been taken into consideration. Conclusion - i) The petitioner, as a subcontractor providing taxable works contract services, is liable to pay service tax notwithstanding submissions that principal contractors have paid tax on the overall contract value. ii) The writ jurisdiction is improperly invoked given the availability and non-exercise of the statutory appellate remedy within the prescribed period. The writ jurisdiction was improperly invoked given the availability and non-exercise of the statutory appellate remedy within the prescribed period - Application dismissed.

  ---

• 2025 (4) TMI 1116
  100% EOU - Levy of service tax on Reverse Charge basis in respect of expenses incurred in foreign currency on business promotion and other activities - HELD THAT:- Reference was invited to the decision of the Tribunal in the Final Order No. 50314-50315/2018 dated 12.01.2018 [ 2018 (2) TMI 1408 - CESTAT NEW DELHI] . For the period 2006-2007 to June 2012 i.e. pre-negative era, wherein the issue was decided by the Tribunal in favour of the appellant, relying on the decision of the Tribunal in the case of Torrent Pharmaceuticals Limited Vs. Commissioner [ 2014 (12) TMI 41 - CESTAT AHMEDABAD] and Milind Kulkarni Vs. Commissioner [ 2016 (9) TMI 191 - CESTAT MUMBAI] . It was accordingly, concluded that the tax liability under BAS cannot be sustained as the actual expenses now sought to be taxed are only with reference to setting up, running and also expenses of that branch incurred by the appellant and not relating to any expenditure in their branches with reference to BAS. The Final Order No. A/50314-50315/2018 of the Tribunal in the case of the appellant in [ 2018 (2) TMI 1408 - CESTAT NEW DELHI] was with reference to the pre-negative era, however, subsequently in the Final Order No. ST/A/52273/2018-CU(DB) dated 13.6.2018, the Tribunal considered the issue regarding tax liability of the appellant on the RCM in respect of amounts paid towards the branch offices which have been established in different country, for the period July 2012 to November 2013, i.e. post negative period in view of the provisions of Section 65B (44) read with Explanation 3(b) and Explanation 4 - For the subsequent period, December 2013 to August 2014, the Tribunal vide Final Order No. 51848/2021 dated 01.10.2021 [ 2021 (10) TMI 229 - CESTAT NEW DELHI] once again held that the conclusion in Milind Kulkarni that was relied upon in Kusum Healthcare Private Limited [ 2021 (10) TMI 229 - CESTAT NEW DELHI] to set aside the demand after introduction of negative list regime is applicable to the dispute before it and, therefore, set aside the demand being contrary to law. Conclusion - No service tax liability arises on payments made by the appellant to its overseas representative offices for branch expenses. The impugned order is set aside - appeal allowed.

  ---

• 2025 (4) TMI 1115
  Correctness in issuing SCN - appellant had made payment of service tax with interest prior to the issuance of the SCN - HELD THAT:- A bare perusal of sub-section (3) of section 73 of the Finance Act shows that where any service tax has not been paid, the person chargeable with the service tax may pay the amount of service tax chargeable on the basis of his own ascertainment before service of notice on him under sub-section (1) in respect of such service tax and inform the central excise officer of such payments in writing, who on receipt of such information, shall not serve any notice under sub-section (1) of section 73 in respect of the amount so paid. Sub-section (4) of the section 73 of the Finance Act, however, provides that nothing in sub-section (3) shall apply to a case where any service tax has not been paid by reason of fraud; or collusion; or wilful mis-statement; or suppression of facts; or contravention of any of the provisions of the Chapter or of the with intent to evade payment of service tax. Applicability of sub-section (4) of section 73 of the Finance Act - HELD THAT:- The reasons for invoking the extended period of limitation under the proviso to section 73(1) of the Finance Act and the reasons for denying the benefit of sub-section (3) of section 73 of the Finance Act as contained in sub-section (4) are same. The appellant, in response to the show cause notice, clearly pointed out that the provisions of sub- section (4) of section 73 of the Finance Act could not have been invoked to deny the benefit of sub-section (3) of section 73 of the Finance Act. The Commissioner (Appeals) has denied the benefit of sub-section (3) of section 73 of the Finance Act to the appellant. The Commissioner (Appeals) placed much emphasis on the fact that investigation was initiated against the appellant after the information was gathered by the Directorate General of Intelligence. The Commissioner (Appeals) also observed that since the appellant was working under a self-assessment scheme it was essential for the appellant to work out the tax liability appropriately and pay the same. It is for this reason that the Commissioner (Appeals) held that the provisions of sub-section (4) of section 73 of the Finance Act would not apply. This view taken by the Commissioner (Appeals) cannot be countenanced. The Supreme Court and the Delhi High Court have held that suppression of facts has to be wilful and there should also be an intent to evade payment of service tax - In Pushpam Pharmaceutical Co. vs. Commissioner of Central Excise, Bombay 1 [ 1995 (3) TMI 100 - SUPREME COURT] , the Supreme Court examined whether the department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Central Excise Act. The proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since suppression of facts has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty. The provisions of sub-section (4) of section 73 of the Finance Act would not apply in the present case - The provisions of sub-section (3) of section 73 of the Finance Act would, therefore, apply. It is not in dispute that the appellant had deposited the entire amount of service tax with interest on 25.07.2014 much before the issuance of the show cause notice on 31.01.2017 and had intimated the department. In such a situation, the show cause notice under sub-section (1) of section 73 of the Finance Act could not have been issued to the appellant in view of the provisions of sub- section (3) of section 73 of the Finance Act. The impugned order that adjudicates the show cause notice and confirms the demand would, therefore have to be set aside - It would, therefore, not be necessary to examine the contention raised by the learned counsel for the appellant that the extended period of limitation could not have been invoked in the facts of the present case. Conclusion - The SCN issued u/s 73(1) after the appellant had paid service tax and interest and informed the department is not maintainable under section 73(3). The impugned order is set aside - appeal allowed.

  ---

• 2025 (4) TMI 1114
  Levy of service tax - declared service - incentives or volume discounts received by the respondent from media houses for achieving certain business targets - case of the Revenue is that the respondent had agreed to do an act for the media channels and print media and the incentive given by them to the respondent is the consideration for this obligation - HELD THAT:- It is found from the facts of this case that the respondent has no agreement with the media houses to meet any target nor is there any obligation on the media house to provide incentives/ discount. In fact, the respondent s clients are the advertisers. They decide and approve the media plans suggested by the respondent. Therefore, the respondent has no discretion to get the advertisements published in a particular newspaper or broadcast through channels of its choice. The Respondent, therefore, cannot have an obligation to the media houses. All that is paid by the media houses is, if the respondent achieves particular target while carrying out its business for its clients, the media house gives some incentives. Section 66E(e) covers as declared services only such cases where there is an obligation under an agreement on the assessee to carry out an act or to tolerate an act. Such is not the case here. Conclusion - i) The demand of service tax on incentives received by the respondent under declared services was rightly rejected. ii) The extended period demand, interest, and penalties proposed by the Revenue were not sustainable. The impugned order passed by the Commissioner is correct and calls for no interference. The impugned order is upheld and the appeal filed by the Revenue is dismissed.

  ---

• 2025 (4) TMI 1113
  Denial of benefit of N/N.12/2003 dated 20.06.2003 claimed in respect of the Outdoor Catering Services rendered by the appellant in respect of some of its customers - invocation of extended period of limitation. Whether for the relevant period, the demand made on the appellant denying the benefit of N/N. 12/2003 dated 20.06.2003 claimed in respect of the Outdoor Catering Services rendered by the appellant in respect of some of its customers, is tenable? - HELD THAT:- The application of the N/N. 1/2006-ST is sought to be excluded in cases and the said N/N. 1/2006-ST does not prohibit the availment of the said notification if the service provider limits such availment to cases other than when N/N. 1/2006 has been availed. There are no provision in law that mandates that if a specific notification is issued, then it would be to the exclusion of the assessee availing the benefit of any other notification that is also available to the assessee. If the notification itself does not stipulate an explicit bar stating that the benefit under the notification is available only if it is availed to the exclusion of availing benefit under any other notification, we would be reluctant to read in any such implied prohibition, so as to deny the appellant herein the benefit of the N/N. 12/2003-ST claimed. It is also seen that this Tribunal has in a catena of decisions taken a view that there is no bar in availing benefit under more than one notification unless it is barred categorically. The denial of the benefit of the N/N.12/2003-ST by the adjudicating authority for the reason that VAT is levied on the turnover and not on the value of the ingredients that go into the preparation of such food articles, cannot be countenanced as it is settled law that the measures employed for assessing a tax should not be confused with the nature of the tax - When the appellant is clearly indicating the value of the goods and materials separately in its bills and which is supported by the records maintained by the appellant, that would be documentary proof enough, particularly when the notification does not stipulate any specific document, the production of which alone, would amount to discharge of adducing documentary proof. The adjudicating authority is determining that the VAT laws do not consider the appellant s manner of accounting the value of the goods/materials sold as sale when there is a studied silence on the above averments of the appellant regarding the documentary proof that the appellant relies on pertaining to its compliance of state VAT laws and when there is no reliance seen placed on any official notice/letter of the VAT authorities denying the appellant s discharge of its obligation under the State VAT Laws, or finding it wanting on any aspect, particularly when they are the authorities competent to determine the sufficiency of the appellant s compliance of the state VAT laws. The appellant is not eligible for the benefit of N/N. 12/2003-St dated 20-06-2003 and the consequent demand and imposition of penalty, cannot sustain and is liable to be set aside. Whether the invoking of extended period of limitation is tenable? - HELD THAT:- The findings of the adjudicating authority are only that the appellant has misstated/suppressed relevant facts and that therefore the invocation of extended period is upheld. Absent any finding that such misstatement/suppression was willful and that such willful misstatement /suppression of facts was with intent to evade payment of duty, the adjudicating authority erred in upholding the invocation of extended period of limitation. It is also pertinent that there is no evidence let in of any positive or deliberate act on the part of the appellant with intention to evade payment of duty. The appellant has stated in its grounds of appeal that its records were also verified during the previous audit dated 26-11-08 for the period April 05 to October 08. There is no allegation that the appellant is not regularly filing its returns or have not reflected the manner of its levy of service tax in its invoices. The present SCN is also issued placing reliance on the records of the appellant alone and not premised on any statements recorded or any other evidence indicating any willful suppression or misstatement of facts. In such circumstances, when the appellant was inspected and audit conducted and the audit queries replied to, there could not be a case of suppression and the Department could not have invoked the extended period of limitation - the finding of the adjudicating authority invoking the extended period of limitation is unsustainable and the demand made on the appellant invoking the extended period of limitation is untenable. Conclusion - i) The denial of benefit under N/N. 12/2003-ST and the consequent demand for differential service tax and penalty are unsustainable and liable to be set aside. ii) The invocation of the extended period of limitation is improper in the absence of allegations or proof of willful misstatement or suppression with intent to evade tax. The demand of duty, appropriate interest and penalty imposed by the original authority are untenable - Appeal allowed.

  ---

• 2025 (4) TMI 1112
  Nature of transaction - sale or service - activity of providing Take Away or Pick Up food services by a restaurant - HELD THAT:- The issue is no more res-integra and has been decided by the Tribunal in the case of M/s Bikanervala Foods Pvt. Ltd. V/s Commissioner of CGST, Customs Central Excise, Delhi-East [ 2024 (6) TMI 504 - CESTAT NEW DELHI ] where it was held that Since the facts of the present case are absolutely identical and give rise to the issue of taxability of sale of food items through Take Away or Home Delivery , the activity is clearly of sale of food and does not involve any service element and, therefore, following the ratio of the judgements referred above, the activity of sale of food items by Take Away or Home Delivery by the appellant is not liable to service tax. Conclusion - The activity of sale of food items by Take Away or Home Delivery by the appellant is not liable to service tax. Appeal allowed.

  ---

• Central Excise

• 2025 (4) TMI 1111
  Failure to discharge central excise duty within the stipulated time disqualifies them from availing CENVAT credit under Rule 8(3A) of the Central Excise Rules, 2002 - Constitutional validity of Rule 8(3A) of the Central Excise Rules, 2002 - HELD THAT:- Hon ble Jurisdictional High Court of Gujarat in its decision in the matter of Indusr Global Ltd Vs. Union of India [ 2014 (12) TMI 585 - GUJARAT HIGH COURT] , has already declared that part of Rule 8(3A) which prescribes payment of duty without utilizing the Cenvat Credit till an assessee pays the outstanding amount including interest as unconstitutional. As far as liability to pay interest for the default period is considered, the Hon ble Court held that this liability continues as per subrule (3) of Rule 8. Also, consignment wise payment of duty during the default period has not been declared unconstitutional. No Contrary decision of the Apex Court has been bought to knowledge. This being the position, demand having been made under the authority of unconstitutional provision declared as such by Hon ble Gujarat High Court, cannot be sustained. Appeals are allowed to the extent of utilising Cenvat Credit for payment of duty. Penalty on Shri Kapil Tiwari the Director of the company and Shri K M Shrivastava General Manager of the company Authorised signatory are also set aside. However, liability of interest due to delayed payment of duty if any and penalty on account of delayed filing of returns sustains. Conclusion - i) Demand having been made under the authority of unconstitutional provision declared as such by Hon ble Gujarat High Court, cannot be sustained. ii) Penalty on the Director of the company and General Manager Authorised signatory are also set aside. iii) Liability of interest due to delayed payment of duty if any and penalty on account of delayed filing of returns sustains. Appeal allowed in part.

  ---

• 2025 (4) TMI 1110
  Classification of services - business auxiliary service or services of selling of space for advertisement? - income received by the appellant from mall management activities - extended period of limitation - HELD THAT:- Firstly, if the services were rendered to the developer the consideration should have been received from the developer for rendering the service. In this case, the appellant had, instead of receiving any amount from the developers, paid the developer Rs. 1,00,000/- per annum and bought the space. Thereafter, it sold the space and earned income. Therefore, the consideration which is received from the buyers of this space for advertisement cannot be called as income received for promoting the business of the developer. The second reason is that once the department accepted the activity as the service of selling of space for advertising with effect from 01.05.2006, it can also not say that the service was some other service prior to this date. If the activity of selling space for advertisement had fallen under business auxillary service before 01.05.2006, they would have been no reason to introduce a separate service of selling of space for advertisement service. Since the activity was not covered before, the new service was introduced from 01.05.2006. The department does not dispute the service tax paid by the appellant from 01.05.2006 under the service selling of space for advertisement . The demand of service tax on the income received by the appellant and recorded under the head of income from mall management cannot be subjected to service tax in the facts of the case under the head of business auxiliary service before 01.05.2006. The impugned order is set aside - Appeal allowed.

  ---

• 2025 (4) TMI 1109
  Clandestine removal - seeking demand of duty on the clearances of the containers without payment of Central Excise duty for the periods from April 2014 to March 2015 and January 2015 to September 2015 - continuation of recovery proceedings or demands against the corporate debtor for dues not included in the approved Resolution Plan, after the approval of the Resolution Plan by the National Company Law Tribunal (NCLT) - HELD THAT:- The Supreme court in the case of Ghanashyam Mishra Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Company Ltd. [ 2021 (4) TMI 613 - SUPREME COURT ] has held that after the approval of the resolution plan by the NCLT, a creditor including the Central Government cannot recover any dues from the corporate debtor which are not a part of the resolution plan approved by the NCLT and the debt shall stand extinguished and no such proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority [NCLT] grants its approval under Section 31 could be continued. It is not ascertainable whether the Department has registered its claim with the Liquidator as above. However, now no further proceedings can survive in this appeal. As the NCLT, Chennai has already accorded its order for Liquidation of approval of the Resolution Plan in respect of the appellant vide its order dated 27.06.2019 and as application as per Rule 22 has been made by the Official Liquidator appointed by the NCLT for continuance of the appeal, the appeal should abate. As such the appeal gets abated in terms of Rule 22 of the CESTAT (Procedure) Rules, 1982 and also gets dismissed being infructuous. Conclusion - i) The excise duty demands confirmed by lower authorities cannot be enforced post-Resolution Plan approval. ii) No further proceedings for recovery of dues not included in the Resolution Plan can be initiated or continued against the corporate debtor. Appeal dismissed.

  ---

• CST, VAT & Sales Tax

• 2025 (4) TMI 1108
  Rejection of second Restoration Application filed by the petitioner seeking restoration of Restoration Application No. 1 of 2023, which in turn sought restoration of Second Appeal No. 1172 of 2018 - non-appearance of the petitioner s advocate before the Tribunal due to being occupied in High Court proceedings and other work commitments - HELD THAT:- It appears that the Tribunal ought not to have rejected the Restoration Application No. 12 of 2023 on the ground that the matter is pending for ten years and the applicant has not paid any amount towards tax demand. The Tribunal should have considered the facts of the case to grant the relief to the petitioners for benefit of production of Form-F in accordance with law so as to grant relief during the course of hearing of Second Appeal No. 1172 of 2018. The matter is pending before the Tribunal prior to 2018 and still pending for adjudication and therefore, the Tribunal should not have dismissed the restoration application on that ground of pendency of the litigation. Conclusion - The Tribunal ought not to have rejected the Restoration Application No. 12 of 2023 on the ground that the matter is pending for ten years and the applicant has not paid any amount towards tax demand. This petition is disposed off by imposing a cost of Rs.25,000/- on the petitioner to be deposited with the Tribunal within a period of two weeks from the date of receipt of a copy of this order and on that condition, the impugned order of the Tribunal dated 21/08/2023 passed in Restoration Application No. 12 of 2023 is quashed and set aside and Restoration Application No. 1 of 2023 in Second Appeal No. 1172 of 2018 is ordered to be restored to file.

  ---

• Indian Laws

• 2025 (4) TMI 1107
  Dishonour of Cheque - existence of legally enforceable debt or liability at the time of issuance and presentation of the cheques - multiplicity of proceedings - vicarous liability of petitioners - HELD THAT:- There is absolutely no disclosure on behalf of the respondent in the complaint filed subsequently with respect to the cheques issued by petitioner no. 1 on behalf of the petitioner firm, i.e., in Complaint Case no. 3298/2019 (subject- matter of CRL. M.C. 8002/2023) with regard to the cheques already issued by petitioner no. 1 from his personal bank account. In view of the averments made in the complaints, there cannot be in any manner, doubt left that the respondent exercised his option to present the cheques issued from the personal bank account of the petitioner towards the personal guarantee for discharge of the liability. In these circumstances, the respondent cannot be permitted to present the other set of cheques issued from the bank account of the petitioner firm again for the same transaction. In these circumstances, in the considered opinion of this Court, continuance of proceedings in Criminal Complaint no. 3298/2019 (subject matter of CRL.M.C. 8002/2023) would be an abuse of process of law and therefore, in the interest of justice, exercise of powers under Section 482 of the Cr.P.C. by this Court is warranted in the present case. It is pertinent to note that petitioner no. 2 was neither a part of the proprietorship firm which entered into the agreement to sell nor a party to any of the proceedings; and was also not a signatory on the document of guarantee executed by petitioner no. 1. In these circumstances, petitioner no. 2 cannot be prosecuted for the offence punishable under Section 138 of the Act. She cannot be held liable for dishonour of the cheques as the same were not issued by her in discharge of any legal liability or debt. Similarly, she cannot be held vicariously liable on the ground of being a joint holder of the account with petitioner no. 1, from which the subject cheques towards personal guarantee were issued. Conclusion - i) The complaint shall continue against petitioner no. 1, but is quashed against petitioner no. 2 for lack of liability and absence of signature. ii) The complaint is quashed as an abuse of process due to multiplicity and non-disclosure. iii) Existence of legally enforceable debt or liability is a disputed question of fact to be decided at trial. iv) Pendency of arbitration proceedings does not bar criminal complaints under Section 138. v) The Court exercised inherent powers under Section 482 Cr.P.C. judiciously to prevent abuse of process and secure ends of justice. Petition allowed in part.

  ---

• 2025 (4) TMI 1106
  Compulsory retirement passed under Rule 16 (3) of the All India Services (Death-cum-Retirement Benefits) Rules, 1958 -permissibility of second review under Rule 16 (3) - financial misappropriation - disproportionate assets - misuse of public office - violation of service conduct rules - HELD THAT:- An order of compulsory retirement made under the Rule takes the form of emergent action against an officer of the services by the Central Government, where it decides that the efficiency and/or integrity of the services require protection. It is a settled position of law, right from Shyam Lal v State of U.P. [ 1954 (3) TMI 68 - SUPREME COURT] and UOI v Col. J.N. Sinha [ 1970 (8) TMI 85 - SUPREME COURT] , to State of U.P. v Chandra Mohan Nigam [ 1977 (9) TMI 129 - SUPREME COURT] and UOI v M.E. Reddy [ 1979 (9) TMI 201 - SUPREME COURT] , that an order under Rule 16 (3) is made in public interest to preserve the efficiency of the services and to safe guard its integrity from the corrosion of corruption. As held in M.E. Reddy [ 1979 (9) TMI 201 - SUPREME COURT] , inter alia, Rule 16 (3) provides an absolute right to the Government to retire an employee and even dispenses with the requirement of conforming with principles of natural justice, since it is neither an order of punishment bringing civil consequences, nor stigmatic in any way. However, this absolute right is definitely within, to a limited extent, the ambit of judicial review and interference - the challenge to the order of compulsory retirement must be sustainable on any one of the three grounds of mala fides, arbitrariness, or a lack of material considered while recommending an officer s compulsory retirement under Rule 16 (3). Whether a Second Review may be Permissible? - HELD THAT:- Normally, a second review of an officer who has been previously reviewed in accordance with Rule 16 (3) (i) or Rule 16 (3) (ii) is not warranted where the Government decides not to take any prejudicial action against an officer despite the recommendations of the review committee. This is not the case here, given that the 2015 committee did not recommend that Babulal be compulsorily retired. However, what is relevant, is the observation of exceptional circumstances and additional material pertaining to the officer that has come to light after the convening of his/her first review. Therefore, in case exceptional circumstances emerge thereafter, a second review may be in order, especially when the integrity of an officer is doubted. The Tribunal has erroneously set aside the order of compulsory retirement passed against Babulal. Conclusion - The order of compulsory retirement passed under Rule 16 (3) is justified on the grounds of grave doubts on the officer s integrity arising from multiple serious allegations and ongoing investigations. The second review is permissible due to exceptional circumstances, and the entire service record, including complaints and investigations, was rightly considered. Petition allowed.

  ---

• 2025 (4) TMI 1105
  Territorial Jurisdiction - why the affidavit could not be filed after getting the same sworn from the Notary public under the Notaries Act, 1952 at the place where the deponent was residing? - HELD THAT:- A brief note has been prepared by Sri Tushar Mittall to state that although, there is no bar of the notaries swearing the affidavits in terms of the specific provisions contained under the Notaries Act, 1952, however, in practice, the Registry accepts only the affidavit, which are sworn before the Oath Commissioner appointed under Chapter IV of the Allahabad High Court Rules and it is incumbent that a photograph be taken at the Photo Centre prior to ascertaining the veracity of the deponent signing the affidavit. Prima facie, the nonacceptance of the affidavit deposed before the Notary under the Notaries Act is not permissible under the Allahabad High Court Rules also. Considering the fact that daily this Court is faced with the inconvenience caused to the litigants who come either at Allahabad or at Lucknow for visiting the photo centre to swear the affidavit and only then the said affidavit can be said to be properly sworn in terms of the provisions of the Rules, is contrary to the provisions of the Notaries Act but also prima facie , beyond the powers conferred by Chapter IV Rule 3 of the Allahabad High Court Rules. List this case on 29.04.2025.

  ---

• 2025 (4) TMI 1104
  Dishonour of Cheque - cheque issued as proprietor in discharge of part of admitted legal liability/debt incurred on account of business transactions - separate identity of a sole proprietor firm - HELD THAT:- It is well settled law that a sole proprietor firm has no separate identity and the sole proprietor will be responsible for the same. The Hon ble S upreme Court in Raghu Lakshminarayanan v. Fine Tubes [ 2007 (4) TMI 367 - SUPREME COURT ], had observed and held A proprietary concern is not a company. Company in terms of the Explanation appended to Section 141 of the Negotiable Instruments Act, means any body corporate and includes a firm or other association of individuals. Director has been defined to mean in relation to a firm, a partner in the firm. Thus, whereas in relation to a company, incorporated and registered under the Companies Act, 1956 or any other statute, a person as a Director must come within the purview of the said description, so far as a firm is concerned, the same would carry the same meaning as contained in the Partnership Act. In the present case, the subject cheque has been issued by the present petitioner for M/s Coal Corporation and the statutory legal demand notice dated 03.06.2016 was also sent to the petitioner, the authorised signatory for M/s Coal Corporation, and the trial before the learned Trial Court is still pending. It is pertinent to note that nothing has been placed on record to show that the account from which the subject cheque was issued belong to a partnership firm. In absence of the same and in view of petitioner himself admitting in the reply to the legal demand notice being Proprietor of M/s Coal Corporation, no grounds for interference are made out at this stage. The petitioner will have ample opportunity to demonstrate that subject cheque was issued by partnership firm as claimed during the course of trial - this Court is of the considered opinion that the complaint case instituted at the behest of the respondent/complainant cannot be quashed at this stage. Conclusion - i) The complaint case under Section 138/142 NI Act against the petitioner in his capacity as proprietor of M/s Coal Corporation is maintainable. ii) The complaint case instituted at the behest of the respondent/complainant cannot be quashed at this stage. Petition dismissed.

  ---

• 2025 (4) TMI 1103
  Dishonour of Cheque - limitation period prescribed under Section 142 of the Negotiable Instruments Act, 1881 (NI Act) for filing a complaint under Section 138 of the NI Act - whether all the proceedings including the complaint filed by the respondent should be quashed on the ground of limitation by this Court or the impugned summoning order can be set aside and the matter be remanded back afresh to the learned Trial Court in order to enable the respondent/complainant herein to show sufficient cause of delay in filing of the complaint in terms of the proviso to Section 142 (1) (b) of the NI Act? - HELD THAT:- No doubt there has been oversight by the learned Metropolitan Magistrate as well as the learned counsel for the respondent at the time when the impugned order of taking cognizance was passed. The Hon ble Supreme Court in Pawan Kumar Ralli [ 2014 (8) TMI 608 - SUPREME COURT] had emphasised that the remedy provided for condonation of delay is available to genuine litigant to pursue his case under Section 138 of the NI Act to overcome the technicalities of period of limitation. In Glazebrooke [ 2024 (11) TMI 918 - DELHI HIGH COURT] , relied upon by the learned counsel for the petitioner, the issue of delay was disputed by the complainant therein, which is not the case in the present proceedings. In the considered opinion of this Court, if there is a remedy provided for in law for condonation of delay and if sufficient reasons are shown to condone the same, then the complainant, in such cases, ought to be given a chance to justify such delay. The Hon ble Supreme Court in Sesh Nath Singh [ 2021 (3) TMI 1183 - SUPREME COURT] has also stated that a formal application may not be necessary for condonation of delay, if the learned Metropolitan Magistrate while taking cognizance applies his mind to the said issue and condones the delay. In the present proceedings, the same was not done by the learned Metropolitan Magistrate despite the fact of delay being disclosed by the petitioner/accused. In these circumstances, the impugned order of summoning cannot be sustained and the proceeding in pursuance of the same cannot be continued. Conclusion - The Court set aside the impugned summoning order dated 13.09.2022, holding that the learned Metropolitan Magistrate erred in taking cognizance without considering the delay or condoning it. The complaint was admitted to be filed beyond limitation without any formal condonation application. The impugned summoning order is hereby set aside - The petition is partly allowed and disposed of alongwith pending application(s), if any.

  ---

• 2025 (4) TMI 1102
  Rejection of prayer of the Petitioner (Accused) to get the documents relied upon by the Respondent/ Complainant sent for Forensic Analysis - Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 - failure to give opportunity to the Petitioners to address the queries raised by the Court during the course of arguments on the Application, which has been dismissed on conjectures, surmises and presumptions which is impermissible in law - HELD THAT:- CW.1, Sh. Mayank Periwal was examined once after which the statement of the accused Petitioners was recorded under Section 313 Cr.P.C but even thereafter, they chose not to lead any evidence in defence. It is subsequent to further cross examination of CW.1, the Complainant that the Petitioners have claimed that new facts have emerged which have prompted them to file this Application for forensic examination of the signatures - This ground is totally fallacious because the Complaint itself mentioned that the signatures differed. The accused/Petitioners were denying their signatures from the date of summoning and there is no explanation which is forthcoming to explain why the Application was filed belatedly, when the case was listed for final arguments. In the first instance, after the statement of the Petitioners was recorded under Section 313 Cr.P.C, final arguments were addressed and the case was reserved for Orders at which stage the Petitioners were permitted to further cross-examine the Complainant. Even thereafter, this Application under Section 311 Cr.P.C. had been filed when the matter was listed for final arguments. This Application was for sending the cheques for forensic examination of the signatures especially when the Memo of dishonour of the cheques, itself stated that the signatures differed. The learned M.M has rightly rejected the Application under Section 311 Cr.P.C vide Order dated 15.05.2024. Conclusion - The accused s failure to lead defence evidence and delay in seeking forensic examination weigh heavily against permitting such applications at the final stage of trial. Petition dismissed.

  ---