TMI Tax Updates - e-Newsletter
April 26, 2025

Case Laws in this Newsletter:

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

TMI Short Notes

1. Designed provisions to counteract tax avoidance schemes involving cross-border transactions : Clause 174 of the Income Tax Bill, 2025 Vs. Section 93 of the Income-tax Act, 1961

  Bills:

2. Important Definition within the framework of transfer pricing and anti-avoidance measures : Clause 173 of Income Tax Bill, 2025 Vs. Section 92F of Income-tax Act, 1961

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3. Statutory Reporting & Penalties for persons entering into international and specified domestic transactions : Clause 172 of the Income Tax Bill, 2025 Vs. Section 92E of the Income-tax Act, 1961

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4. Revamped framework of the Transfer Pricing documentation & Penalties : Clause 171 of the Income Tax Bill, 2025 Vs. Section 92D of the Income-tax Act, 1961

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5. Harmonizing India's Secondary Adjustment Regime in Transfer Pricing : Clause 170 of the Income Tax Bill, 2025 Vs. Section 92CE of the Income-tax Act, 1961

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6. Streamlining APA Implementation and Transfer Pricing Compliance : Clause 169 of Income Tax Bill, 2025 and Section 92CD of Income-tax Act, 1961

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Articles

1. ULTERIOR MOTIVE

   By: K Balasubramanian

2. How to File OPC Annual Return Online through MCA Portal?

   By: Ishita Ramani

3. DENIAL OF EXEMPTION TO A TRUST UNDER SECTION 11 AND 12 OF THE INCOME TAX ACT, 1961 FOR NON-SUBMISSION OF CERTIFICATE ISSUED UNDER SECTION 12AB

   By: DR.MARIAPPAN GOVINDARAJAN

4. Understanding the Coal Import Monitoring System (CIMS) by DGFT

   By: YAGAY andSUN

5. 🔒 Beware of Fake Gold Hallmarking: A Consumer Protection Guide Based on the Rajasthan Scam.

   By: YAGAY andSUN

6. Rooftop Water Harvesting in Indian Cities – A Game-changer for Increasing the Underground Water Level.(Tackling India’s water crisis)

   By: YAGAY andSUN

7. Environmental Impact Analysis: Ship-Breaking Industry on Sea Shore and Marine Ecosystem.

   By: YAGAY andSUN

8. 🌊 Plastic Pollution in Our OceansAn Environmental Crisis Affecting the Blue Planet

   By: YAGAY andSUN

9. 🛑 Ban on Asbestos – Comprehensive Analysis

   By: YAGAY andSUN

10. ✅ ISO 45001: Occupational Health and Safety Management Systems

   By: YAGAY andSUN

11. ⚓ Hong Kong Convention, Ship-Breaking Industries & Green Shipyards

   By: YAGAY andSUN

12. A🇳 Introduction to India’s Ship-Breaking Industry (Alang, Gujarat) In Context of the Hong Kong Convention & the Role of MOEFCC.

   By: YAGAY andSUN

News

1. FAQs on Notification No. 38/2025 [F. No 370142/11/2025-TPL] / SO 1838(E)

2. CBIC introduces several trade facilitative measures relating to transhipment and air cargo

3. Union Minister of State for Finance Shri Pankaj Chaudhary presides over Passing Out Parade of 75th batch of 42 Indian Revenue Service (Customs & Indirect Taxes) officer trainees at NACIN, Palasamudram

4. 'Shift from old vehicles to EVs in 44 cities with 10L people may cut oil import bill by USD 106bn'

5. Indian Delegation visits Pretoria, South Africa for the second session of the India-South Africa JWGTI

Notifications

Customs

1. 30/2025 - dated 24-4-2025 - Cus (NT)

Goods Imported (Conditions of Transshipment) Regulations, 2025

GST

2. G.S.R. 256(E) - dated 24-4-2025 - CGST

Goods and Services Tax Appellate Tribunal (Procedure) Rules, 2025

Income Tax

3. 39/2025 - dated 24-4-2025 - IT

Exemption from specified income U/s 10(46) of IT Act 1961 - 'Mysore Palace Board'

Circulars / Instructions / Orders

Customs

1. 15/2025 - dated 25-4-2025

Simplification of procedures related to Air Cargo Movement & Transhipment

Highlights / Catch Notes

GST

• Corporate Debt Resolution Shields Restructured Company from Post-Approval Tax Demands Under Insolvency and Bankruptcy Code

  Case-Laws - HC : HC ruled that additional tax demands against the corporate debtor (CD) after NCLT's Resolution Plan approval are invalid. The court held that post-resolution plan claims by creditors would impede the implementation of the approved restructuring process. Specifically, assessment orders and demand notices for tax years 2012-13, 2013-14, and 2017-2018 were quashed. The fundamental legal principle affirmed is that once an NCLT-approved Resolution Plan is in place, subsequent creditor claims are precluded to ensure a clean slate for corporate revival. The petition was consequently allowed, protecting the integrity of the insolvency resolution mechanism under the IBC.
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• Legal Service via Common Portal Under GST Act Section 169(1)(d) Deemed Valid, Ex Parte Orders Set Aside with Partial Tax Deposit Requirement

  Case-Laws - HC : HC held that service of notices via common portal under Section 169(1)(d) of GST Act constitutes sufficient legal service, despite potential ineffectiveness. While respondents adopted an alternative service mode, they failed to ensure effective communication. The ex parte assessment orders were set aside, with fault attributed to both parties. The matter was remanded to the Assessing Officer, with petitioner directed to deposit 10% of disputed tax within four weeks, effectively providing an opportunity for reassessment while ensuring partial tax compliance.
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• Leasehold Rights Transfer for Lump-Sum Payment Exempted from GST Under Section 7(1)(a) of CGST Act

  Case-Laws - HC : HC held that assignment of leasehold rights of an industrial plot by a lessee to a third party for a lump-sum consideration does not constitute a supply under GST regulations. The court determined that such a transaction involving transfer of immovable property benefits falls outside the scope of Section 7(1)(a) of CGST Act and is not subject to CGST levy under Section 9. The court consequently invalidated the Show Cause Notice issued to the petitioner, effectively ruling in favor of the petitioner and exempting the transaction from GST implications.
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• GST Rate Dispute: Works Contract Services Remain at 18% Based on Tender Submission Date and Prevailing Tax Conditions

  Case-Laws - HC : HC dismissed the petition regarding GST rate applicability. The court held that the GST rate for works contract services remained 18% at the time of tender submission, as per SRO-GST-11 dated 8th July, 2017. The subsequent notification reducing the rate to 12% on 21st September 2017 would apply prospectively. Special Condition 49 stipulates that tender rates are inclusive of taxes prevailing on the last date of tender receipt. The court found no grounds to apply the reduced GST rate retrospectively, emphasizing that the original 18% rate was applicable when the tender was submitted. The petition lacks merit and was consequently dismissed.
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• Tax Credit Saved: Technical Error Can't Block Legitimate Claim When Substantive Rights Are Clear and Verifiable

  Case-Laws - AT : CESTAT allowed appellant's appeal, holding that transitional service tax credit of Rs. 6,15,409/- is admissible despite procedural error in form TRAN-1. The tribunal determined that technical glitch in entering data at incorrect serial number does not vitiate substantive rights. Revenue directed to treat data entered at Sr. No. 5 as equivalent to entry at Sr. No. 11, recognizing that procedural infirmities cannot defeat legitimate tax credit entitlement under Section 142(11)(c) and Rule 118 of CGST Rules, 2017. The core principle affirmed is that substantial rights supersede minor procedural non-compliance in tax credit transition.
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• Syndicate Operator Denied Bail in Rs.56.78 Crore GST Evasion Case Involving Online Gaming Platforms

  Case-Laws - DSC : DSC denied bail in GST evasion case involving online money gaming platforms. The accused, identified as a key operator in a syndicate, allegedly evaded approximately Rs.56.78 Crore in GST through clandestine online services. Court emphasized economic offences are gravest societal crimes, noting critical investigation stage and potential risk of accused misusing liberty if released. Substantial incriminating evidence, including third-party payment app usage and unissued invoices, substantiated Department's allegations. Given offense's significant economic impact and ongoing investigation, bail application was conclusively rejected.
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• Tax Credit Fraud Syndicate Exposed: Systematic Fake ITC Scheme Unravels with Overwhelming Forensic Evidence of Rs. 15 Crore Fraud

  Case-Laws - DSC : DSC dismisses anticipatory bail application involving systematic tax credit fraud. Investigation revealed a complex nexus of fictitious firms (M/s Khwaish Enterprise, M/s Sunrise Enterprises, M/s AC Goel Tradelinks) systematically generating fake Input Tax Credit (ITC) without actual goods supply. Forensic analysis of GSTR-2A records demonstrated over 90% fraudulent transactions, with cumulative fake ITC estimated at approximately Rs. 15 crores. Key accused, who failed to cooperate with investigation despite multiple summons, was determined to be a critical syndicate member. Court found substantial evidence of deliberate tax evasion and economic fraud, consequently rejecting anticipatory bail application.
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Income Tax

• Govt Blocks Tax Deductions for Regulatory Settlement Expenses Under Multiple Financial and Competition Law Frameworks

  Notifications : The GoI notification precludes tax deductions for expenditures related to settling proceedings involving contraventions under specified financial regulatory statutes, including SEBI Act, Securities Contracts (Regulation) Act, Depositories Act, and Competition Act. The Central Government, exercising powers under Income Tax Act section 37(1), explicitly disallows tax deductions for settlement expenses arising from legal proceedings initiated due to defaults or violations in these regulatory frameworks. The notification becomes effective upon official gazette publication, mandating strict compliance and eliminating potential tax benefits for legal settlement costs in financial and competitive regulatory domains.
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• High Court Validates Belated Tax Appeal Under Circular No.20/2016, Restores Procedural Fairness for Taxpayer's Right to Hearing

  Case-Laws - HC : HC quashed the order of CIT(Appeals) regarding a belated appeal filing, determining that the appeal submitted manually in Form No.35 on 15.06.2016 was valid under Circular No.20/2016. The court found the appeal's dismissal on grounds of delay was improper. The matter was remanded to CIT(Appeals) for a fresh hearing on merits, directing procedural fairness by providing the petitioner an opportunity to present their case in accordance with established legal principles.
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• Legal Challenge Dismissed: Petitioner Must Submit Supplementary Affidavit to CBDT Within 15 Days for Form-10B Review

  Case-Laws - HC : HC rejected the application for condonation of delay in Form-10B, directing the Petitioner to file a supplementary affidavit within 15 days to CBDT. CBDT must review the additional affidavit on its merits, provide a hearing to both parties, and issue a reasoned order within four months. The court left all parties' contentions open, did not examine the sufficiency of cause, and made the rule absolute without cost orders. The restoration proceedings were deemed non-operative as the petition was already restored.
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• Tax Notices Invalidated: Income Aggregation Across Multiple Years Deemed Improper and Violating Procedural Limitations of Section 148

  Case-Laws - HC : HC held that the Assessing Officer (AO) erroneously issued notices under Section 148 by aggregating alleged escaped income across multiple financial years 2016-17, 2017-18, and 2018-19. The court determined that the threshold limit of Rs. 50 lakhs cannot be calculated by cumulating income from different assessment years. The notices were time-barred under Section 149(1) as there was no singular event spanning multiple years. Consequently, the HC set aside the impugned notices and subsequent proceedings, finding that the AO's approach of combining escaped income from different years was impermissible under tax law.
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• Non-resident entity's tax dispute resolved through careful treaty interpretation of India-UAE DTAA, balancing income classification and PE considerations

  Case-Laws - AT : ITAT adjudicated a tax dispute involving consultancy income from a non-resident entity without permanent establishment (PE) in India. The tribunal examined treaty benefits under India-UAE Double Taxation Avoidance Agreement (DTAA), specifically Articles 7 and 22. Despite presenting a valid Tax Residency Certificate (TRC) for 2018 and earning marketing commission, the tribunal determined that Article 7 was inapplicable due to absence of PE. Consequently, the tribunal ruled the assessee eligible for benefits under Article 22 and directed the Assessing Officer (AO) to recompute the tax liability, effectively providing partial relief to the non-resident taxpayer by recognizing treaty protection mechanisms.
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• Wholly Owned Subsidiary of Listed Company Exempted from Section 56(2)(viib) Tax Provision on Share Premium Issuance

  Case-Laws - AT : ITAT held that for a 100% subsidiary of a listed parent company, Section 56(2)(viib) does not apply when shares are issued at premium. The tribunal determined that since the assessee is a wholly owned subsidiary of a listed entity, it qualifies as a company with substantial public interest. Following precedent in a similar case, the tribunal upheld the lower appellate authority's order, finding no infirmity in the interpretation. Consequently, the revenue's appeal was dismissed, and the additions made by the Assessing Officer were deleted, affirming the subsidiary's exemption from the specified tax provision.
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• Discretionary Trust Wins: Surcharge Calculated Using Slab Rates, Not Maximum Flat Rate for Tax Years

  Case-Laws - AT : The ITAT adjudicated a dispute regarding surcharge computation for a private discretionary trust. The tribunal referenced a Special Bench precedent establishing that surcharge calculation must follow slab-wise rates in the Finance Act's First Schedule, rather than applying a flat maximum rate. Consequently, the tribunal ruled in favor of the assessee, allowing surcharge at 10% for AY 2021-22 and 25% for AY 2022-23, thereby rejecting the proposed 37% surcharge. The decision affirms a nuanced interpretation of tax computation methodology for discretionary trusts, ensuring proportional and legally compliant surcharge assessment.
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• Private Discretionary Trust Wins Tax Battle: Surcharge Waived When Income Below Rs. 50 Lakhs Under Finance Act Provisions

  Case-Laws - AT : ITAT adjudicated a tax dispute regarding surcharge levying on a private discretionary trust. The tribunal held that despite maximum marginal tax rate application, surcharge cannot be imposed when total income falls below Rs. 50,00,000/- threshold prescribed under the Finance Act. The Special Bench clarified surcharge computation must reference specific slab rates, and in this instance, since assessee's income was substantially lower than prescribed limit, no surcharge could be legally levied. Consequently, the assessee's appeals were allowed, effectively nullifying the disputed surcharge assessment.
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• Tax Penalty Quashed: Complex Income Disclosure Case Invalidated by Procedural Limitations and Residential Status Disputes

  Case-Laws - AT : The ITAT examined multiple aspects of a tax penalty case involving undisclosed income. The tribunal found no justification for penalty u/s 271(1)(c) across various income categories including house property, buffer income, and salary. Key determinations included: (1) the complexity of tax law precluded deliberate concealment, (2) residential status dispute undermined penalty proceedings, and (3) penalty orders were time-barred under section 275(1)(c). Critically, the immunity period granted by the Settlement Commission and subsequent legal challenges rendered the penalty unsustainable. The tribunal ultimately upheld the CIT(A)'s order quashing the penalty, dismissing revenue's grounds and finding the penalty proceedings statutorily invalid due to limitation constraints.
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• Joint Property Investment Triggers Tax Deduction Under Section 54, Proportional Ownership Determines Claim Validity

  Case-Laws - AT : ITAT ruled on joint property ownership and tax deduction claims. The tribunal allowed the assessee's claim under Section 54, finding no legal impediment to claiming deduction for jointly purchased property. The key determination focused on proportional investment and preventing double taxation. The tribunal directed the Assessing Officer to verify no duplicate deduction was claimed and allow Section 54 deduction corresponding to the assessee's actual investment in the new residential property. Regarding deemed rental income, the tribunal remanded the matter to the AO to determine the Annual Letting Value based on municipal rentable value, proportionate to the assessee's property share, due to insufficient documentary evidence of business usage.
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• Franchise Sales Transactions Deemed Direct Principal-to-Principal Exchanges, Not Commission Payments Under Tax Rules

  Case-Laws - AT : ITAT held that transactions between the assessee and franchisees/LFS constitute principal-to-principal sales, not commission payments. The tribunal rejected revenue's contentions under Sections 194H and 194I, finding no evidence of commission or rental arrangement. Employees' temporary presence in LFS stores does not establish possession or control. The brand's market positioning through discounted pricing does not constitute commission. The tribunal found no merit in revenue's arguments and dismissed the appeal, upholding the lower appellate authority's order and maintaining the principal-to-principal sales characterization.
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• Charitable Trust Wins Tax Exemption: Devotional Sales Do Not Negate Nonprofit Status Under Section 11

  Case-Laws - AT : ITAT addressed exemption under Section 11 for a public charitable trust. The tribunal examined whether sale of devotional articles constitutes a business activity disqualifying tax exemption. Despite revenue's argument that surplus income from sales negates exemption, ITAT found the trust's primary activities remained charitable, including feeding poor, providing education, and medical relief. The tribunal noted majority of income derived from donations and interest. Referencing SC precedent, ITAT determined sales at nominal cost do not automatically transform charitable activities into business. Administrative expenses and overall charitable objectives were considered. CIT(A)'s original exemption was upheld, and revenue's appeal was dismissed.
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• Voluntary LLP Account Audit Under Rule 24(8) Does Not Impact Loss Carry-Forward Rights When Return Filed Timely

  Case-Laws - AT : ITAT determined that an LLP partner voluntarily opting for account audit under second proviso to Rule 24(8) triggers mandatory audit requirement. The tribunal held that since return was filed on 17.09.2019, which is within the prescribed due date of 30.09.2019 under Section 139(1), the assessee satisfies statutory conditions. Consequently, the LLP is eligible to carry forward business losses as per Section 139(3), and the assessee's appeal was allowed, establishing that voluntary audit election does not prejudice loss carry-forward rights when timely return filing occurs.
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Customs

• Customs Notification Updates Tariff Values for Edible Oils, Metals, and Areca Nuts Under Section 14 of Customs Act

  Notifications : The notification amends tariff values for various commodities under the Customs Act, 1962. The Central Board of Indirect Taxes & Customs issued Notification No. 28/2025-Customs (N.T.) on 23rd April, 2025, establishing fixed tariff values for edible oils (palm oil, palmolein, soya bean oil), brass scrap, precious metals (gold and silver), and areca nuts. The tariff values remain unchanged from previous rates, with specific values designated for different categories and grades of goods. The notification becomes effective from 24th April, 2025, providing updated customs valuation guidelines for import and trade purposes.
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• Customs Notification Expands Maritime Trade Infrastructure by Adding Rohini Yard Jetty to Authorized Coastal Ports List

  Notifications : The CBIC issued Notification No. 27/2025-Customs (N.T.) amending Notification No. 64/1994-Customs (N.T.), specifically modifying the coastal ports table for the State of Maharashtra. The amendment adds "Rohini Yard Jetty, Rohini Village, Raigad" as entry (52) under column (3) for serial number 9, expanding the list of authorized coastal ports for trade purposes. The modification was implemented under section 7(1)(d) of the Customs Act, 1962, enabling additional maritime trade infrastructure in the specified region. The notification was issued by the Under Secretary and reflects ongoing administrative updates to coastal trade regulations.
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• Corruption Intermediary Denied Pre-Arrest Bail After Evidence Reveals Potential Complicity in Bribery Scheme

  Case-Laws - HC : HC denied anticipatory bail in corruption facilitation case involving alleged bribery intermediary. The court found prima facie evidence of complicity based on audio transcripts and determined custodial investigation was necessary to identify co-conspirators and obtain voice samples. The applicant's explanation for withholding mobile phone was deemed unconvincing. Given the nature of offence and ongoing investigation stage, the court rejected anticipatory bail application, mandating the accused's cooperation with investigative proceedings under anti-corruption statutes.
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• CESTAT Upholds Refund Application, Validates Limitation Period Extension Under Supreme Court's COVID-19 Pandemic Order

  Case-Laws - AT : CESTAT allowed the refund application, holding that the limitation period was validly extended by Supreme Court's COVID-19 order. The appellant's refund application filed on 12.04.2022 was deemed timely, as the period from 15.03.2020 to 28.02.2022 was explicitly excluded from limitation calculations. The tribunal criticized the Commissioner (Appeals) for being unaware of the Supreme Court's directive, ultimately dismissing the lower court's orders and granting the appellant's appeals.
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• Traveller's Cheques Dispute: Customs Dept Ordered to Return Funds with Interest Under Proper Procedural Guidelines

  Case-Laws - AT : CESTAT adjudicated a dispute regarding seized traveller's cheques, finding the customs department's encashment and retention of funds arbitrary. The tribunal determined that the cheques, being non-perishable dollar-denominated instruments, should have been handled with greater procedural care. Critically, the court ruled that the appellant was entitled to interest on the deposited amount from the date of deposit, less redemption fines and penalties, with payment mandated within two months. The decision emphasized preventing unjust enrichment and protecting property rights by recognizing the potential financial loss to the appellant due to unauthorized fund retention. Appeal was allowed, directing monetary compensation to the appellant.
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• Digital Camera Imports Granted Full Customs Duty Exemption Under Notification 01.03.2005 as Amended

  Case-Laws - AT : CESTAT adjudicated customs duty exemption for digital still image video cameras, overturning the Commissioner (Appeals) order. The Tribunal held that the imported cameras qualify for basic customs duty exemption under notification dated 01.03.2005, as amended on 17.03.2012. The appellants were granted full exemption from basic customs duty, setting aside the previous restrictive interpretation. The Tribunal's ruling affirmed the broader applicability of the customs duty exemption notification, thereby allowing the customs appeals and providing relief to the importer.
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DGFT

• Pharmaceutical Trade Norms Updated: DGFT Establishes New SION A-3685 for Doxycycline 100 mg Dispersible Tablets Export

  Circulars : The DGFT issued a public notice establishing a new Standard Input Output Norm (SION) A-3685 for Doxycycline 100 mg Dispersible Tablets under the Chemical and Allied Product category. The notice specifies that for each tablet export, 106.13 mg of Doxycycline Monohydrate U.S.P/B.P is permitted as an import input. This regulatory directive, exercised under paragraph 1.03 of the Foreign Trade Policy-2023, provides standardized guidelines for the pharmaceutical product's import-export parameters, facilitating streamlined trade documentation and compliance for manufacturers and exporters.
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• Trade Policy Update: Expanded Authorization for Temporary SCOMET Item Exports with Strict Compliance and Evaluation Protocols

  Circulars : The DGFT issued a trade notice proposing amendments to the Foreign Trade Policy and Handbook of Procedures for export of SCOMET items for testing and evaluation. Key modifications include expanding authorization conditions for temporary export of controlled items, introducing a new paragraph 10.13(C) specifically addressing demonstration, testing, and evaluation exports. The amendments establish clear guidelines requiring: no commercial transactions, no technology transfer, limited export duration (120 days), mandatory return documentation, and strict compliance with export control regulations. Stakeholders were invited to provide feedback within 10 days, with proposed changes to take immediate effect upon finalization.
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FEMA

• RBI Introduces Capped Penalty Framework for FEMA Violations, Enabling Flexible Enforcement with Discretionary Compounding Provisions

  Circulars : RBI issued amendments to FEMA compounding directions, introducing a new provision capping the maximum compounding amount at INR 200,000 per contravention for specific regulatory violations. The amendment allows compounding authorities discretionary power to impose reduced penalties based on exceptional circumstances, nature of contravention, and broader public interest considerations. The modification applies to existing Master Directions on compounding contraventions, enabling more flexible enforcement mechanisms while maintaining regulatory oversight under FEMA, 1999. The circular provides guidance to Authorized Dealer Category-I banks and authorized banks for implementing these revised compounding guidelines.
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• RBI Unveils Comprehensive Guidelines for FEMA Contravention Compounding, Offering Structured Resolution Pathway for Financial Entities

  Circulars : The RBI issued Master Directions on Compounding of Contraventions under FEMA, 1999, effective April 24, 2025. Key highlights include: Compounding Process: Entities can apply to compound FEMA contraventions within 180 days, with a fixed application fee of INR 10,000. The RBI will assess contraventions based on factors like undue gains, economic benefits, and compliance history. Compounding is not allowed for serious contraventions involving money laundering, terror financing, or sovereignty concerns. The compounding amount is calculated using a structured matrix considering the type of contravention, amount involved, and duration of non-compliance, with a maximum cap of 300% of the contravention amount. Applicants must complete administrative actions and provide necessary documentation. The compounding order will specify the contravened provisions, and payment must be made within 15 days of the order.
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Indian Laws

• Cheque Dishonour Case: Burden of Proof Requires Substantial Evidence Beyond Mere Allegations of Debt Transaction

  Case-Laws - SC : SC analyzed a cheque dishonour case under Negotiable Instruments Act Sections 118(a) and 139. The Court held that while presumptions under these sections are rebuttable, the complainant failed to substantiate the claim of an enforceable debt. Despite alleging cheque issuance in presence of well-wishers, no corroborative evidence was produced, such as income tax documents or accounting records. The accused successfully discharged the burden of proof by raising a probable defense. Consequently, the SC upheld the Trial Court's original acquittal order and reversed the High Court's judgment, thereby allowing the appeal in favor of the accused.
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• Purchaser Without Registered Sale Deed Lacks Legal Standing to Challenge Ownership or Possession Under Order VII Rule 11

  Case-Laws - SC : SC held that the plaint must be rejected under Order VII Rule 11(a) and (d) CPC due to absence of cause of action. An agreement to sell does not confer substantive rights against third-party possessors, and the proposed purchaser cannot institute a suit against parties in possession. The court emphasized that without a registered sale deed, the purchaser lacks legal standing to challenge ownership or possession. The appeal was allowed, setting aside lower court orders, with implications for preventing speculative litigation and protecting institutional interests from resource-draining legal proceedings.
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• Criminal Prosecution Against Appellant Quashed Due to Res Judicata and Procedural Irregularities Under Section 420 IPC

  Case-Laws - SC : SC held that the criminal prosecution against the appellant is unsustainable on multiple legal grounds. The proceedings were barred by res judicata as the underlying issues were conclusively determined in prior Negotiable Instruments Act proceedings. The court emphasized that Tyagi cannot maintain a prosecution based on allegations previously used as his own defense. Furthermore, the prosecution without arraigning the company was deemed impermissible, violating established principles of vicarious liability. The court reaffirmed that managerial position alone cannot justify criminal prosecution without specific allegations of direct involvement. Consequently, the SC allowed the appeal and quashed the criminal proceedings under Section 420 IPC, setting aside the summoning order for lack of judicial application of mind.
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• Legal Battle Resolved: Contractual Breach Leads to Refund, No Extra Interest Due to Appellant's Questionable Conduct

  Case-Laws - SC : SC held that Respondent No. 1 breached multiple contractual obligations in the allotment agreement, including failure to secure statutory approvals and execute sub-lease documents. The court ordered Respondent No. 1 to refund Rs. 28,11,31,939 to the Appellant. However, due to the Appellant's questionable conduct and violation of the "clean hands" doctrine, the court denied any additional interest on the refunded amount. The impugned High Court judgment was set aside, and the appeal was disposed of, with Respondent No. 1 directed to refund the first installment without interest.
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SEBI

• SEBI Introduces Comprehensive ESG Rating Regulations Emphasizing Transparency, Accountability, and Standardized Disclosure Protocols

  Notifications : SEBI amended Credit Rating Agencies Regulations in 2025, introducing key modifications for ESG rating providers. The amendment establishes a subscriber-pays business model with specific compliance requirements, including transparency in rating processes, fee structures, and disclosure protocols. ESG rating providers must now share rating reports simultaneously with subscribers and rated entities, allow two-day comment periods, and disclose rating methodologies. The regulations mandate that ratings be based on publicly available information, ensure minimal fee conflicts, and require providers to state the financial regulator overseeing their ratings. These changes aim to enhance accountability, reduce potential conflicts of interest, and standardize ESG rating practices across financial sectors.
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Service Tax

• Legal Breakthrough: Service Tax Refund Claims Can Exceed Limitation Periods Under Restitution Principles of Contract Act

  Case-Laws - HC : HC ruled that Section 11B of Central Excise Act, 1944 does not strictly apply to service tax refund claims made under mistaken legal interpretation. The court held that principles of restitution under Section 72 of Contract Act, 1872 are applicable, mandating refund even beyond prescribed limitation periods. Relying on precedential jurisprudence, the court determined that a writ petition under Article 226 is maintainable for wrongly paid service tax. The impugned order was set aside, and the petition was allowed, compelling the respondent to refund the erroneously paid tax.
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• CESTAT Upholds CENVAT Credit Claim, Ruling Technical Non-Compliance Does Not Justify Credit Denial Under Rule 9

  Case-Laws - AT : CESTAT allowed the appellant's appeal, finding that denial of CENVAT credit was improper. The tribunal determined that non-filing of ST-3 returns was not intentional but resulted from technical issues beyond the appellant's control, specifically delayed provision of login credentials by the department. The adjudicating authority and appellate commissioner erroneously disallowed CENVAT credit without properly considering the appellant's circumstances. The tribunal emphasized that statutory CENVAT credit benefits cannot be withdrawn merely due to procedural non-compliance when the failure was not willful. The show cause notice was deemed deficient as it failed to quantify the service tax amount, further supporting the appellant's position.
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• Vessel Chartering Dispute: Pre-Delivery Fuel and Water Charges Excluded from Service Tax Calculation Under Rule

  Case-Laws - AT : CESTAT adjudicated a service tax dispute involving vessel chartering services. The tribunal determined that fuel, bunker, and water charges incurred prior to vessel delivery cannot be included in the taxable service value. The appellants' reimbursement for these pre-delivery goods, which were subject to VAT, were deemed separate from the core charter service. The tribunal distinguished between goods supply and service provision, specifically noting that the fuel and water supplied during vessel delivery preparation do not constitute part of the taxable service contract. Consequently, these charges cannot be incorporated into the assessable value for service tax calculation. The appeal was allowed, excluding these preliminary supply costs from tax computation.
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Central Excise

• Cess Credits Pre-GST Cannot Be Refunded or Carried Forward Under GST Transition, Section 140(1) Amendment Bars Claim

  Case-Laws - AT : CESTAT held that Education Cess, Secondary Higher Education Cess, and Krishi Kalyan Cess credits carried forward under pre-GST regime are not refundable. The amendment to Section 140(1) of CGST Act, 2017 retrospectively excluded cesses from "eligible duties and taxes" definition, rendering such credits inadmissible for GST utilization. The transitional provisions specifically preclude transmission of these cess credits through Tran-1 form. Consequently, the appellant's claim for refund was rejected, and the Commissioner (Appeals) order was upheld without any legal or factual infirmities.
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• Palm Stearin Product Classification Upheld: Excise Duty Challenge Resolved with Clear Manufacturing Evidence and No Fraudulent Intent

  Case-Laws - AT : CESTAT adjudicated a dispute concerning classification and excise duty for palm stearin products. The tribunal determined that the appellant's classification was bona fide, based on prior circular and supported by documented manufacturing processes. The department failed to establish fraudulent intent in duty non-payment. The extended limitation period under Section 11A could not be invoked absent evidence of deliberate evasion. Critically, the show cause notice issued beyond the standard one-year limitation was deemed invalid. Precedential cases from Mumbai and Ahmedabad benches supported the appellant's position. The tribunal ultimately allowed the appeal, negating the duty demands and rejecting the extended limitation period application.
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Case Laws:

• GST

• 2025 (4) TMI 1383
  Direction to transfer the amount to the account of the Petitioner or the 1st Respondent and the Petitioner/1st Respondent who receive the amount to deposit the said amount in GST account through form GST DRC-03 - HELD THAT:- The Applicant (Org. Respondent No. 2) has addressed letters to the concerned Pay Accounts Officer (PAOs) and E-PAOs seeking bank account details. In response thereto, the PAOs and E-PAOs communicated their inability to get the GST amount transferred to any designated Bank Account because collection of GST amount is only through generation of challan in the common portal and cannot be deposited in any account maintained by the Government Departments other than GST Authorities. Prima facie, the prayer of the Applicant to direct the Registry to transfer the amount of Rs. 38,94,868/- to the account of the Petitioner- Wellwisher Properties is satisfied, and in turn, the said Petitioner shall deposit the said amount in GST account through form GST DRC-03. The Registry is hereby directed to transfer the amount of Rs. 38,94,868/- to the account of the Petitioner- Wellwisher Properties, and after receipt of the said amount, the Petitioner- Wellwisher Properties is directed to deposit the said amount with GST Authorities.

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• 2025 (4) TMI 1382
  Legality of an assessment initiated under Section 74 of the Central Goods and Services Tax Act, 2017 - reversal of ITC - HELD THAT:- Since jurisdictional aspect leading to framing assessment under Section 74 of the CGST Act has been questioned, the matter requires consideration. Adequate number of copies of writ petition be served on the Senior Standing Counsel to enable him to file counter-affidavit. List this matter on 17th June, 2025.

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• 2025 (4) TMI 1381
  Violation of principles of natural justice - ex parte impugned assessment orders - no opportunity of personal hearing was provided by the respondent prior to the passing of assessment orders - HELD THAT:- It is clear that any decision, order, summons, notices and other communications under the GST Act or Rules made thereunder, shall be served by any one of the modes as prescribed therein. The word or has been used immediately after each sub-clause, which means each clause is alternative to each other. Thus, if any one of the modes is adopted by the respondent to send notices, the same would be considered as a sufficient service. Accordingly, the respondents had adopted one of the modes provided in the above provisions, i.e., to make it available in common portal in terms of Section 169(1)(d) of the GST Act and hence, the same has to be considered as sufficient service . Whether making it available in the common portal shall be deemed to be served in terms of Section 169(2) of the GST Act, i.e., either by tendering or publishing or affixing? - HELD THAT:- As per the provisions of sub-section (1), in terms of Section 169(1)(a), the notice has to be served by way of tendering ; in terms of Section 169(1)(b), the notice has to be served by way of RPAD ; in terms of Section 169(1)(e), the notice has to be served by way of publication ; in terms of Section 169(1)(f), the notice has to be served by way of affixing it at the last known place of business or residence of the Assessee. However, the applicability of provisions of Section 169(2) for the provisions of Section 169(1)(c) (d), i.e., uploading the notices in portal or sending to e-mail id of an Assessee. A reading of the provisions of Section 13(2)(a)(i) of the IT Act makes it clear that if the Assessee has designated any computer resource for the purpose of receiving the electronic records, the receipt of the said electronic records will occur when it enters into the designated computer resource. On the other hand, Section 13(2)(a)(ii) of the IT Act deals with the aspect that if the notices were uploaded in any computer resource, which was not designated by the addressee, the receipt will occur only at the time when the electronic records is retrieved by the said addressee - There is no dispute on the aspect that the common portal or the e-mail id of the concerned Assessee is the computer resource. Both the parties have no dispute on the said aspect. Now, the only dispute that has to be decided by this Court is as to whether the common portal is the designated computer resource or not. In terms of provisions of Section 169(1)(d) of the GST Act read with Section 13(2)(a)(i) 13(2)(b) of the IT Act, it is crystal clear that once if the notices, orders and other communications are uploaded in the common portal, the receipt would occur immediately when the electronic records enter the said common portal, despite the fact that it is designated as computer resource by the Assessee or not - by reading the provisions of Section 13(2)(a) (b) of the IT Act, it is clear that from the date of issuance of GST Registration number to the Assessee s until its cancellation, whenever the summons, notices and other communications were uploaded in the common portal, the receipt occurs once when the said electronic records enter into the said common portal, which is the computer resource of the Assessee. In such view of the matter, this Court is inclined to hold that the uploading of notices, orders and other communications, in terms of Section 169(1)(d) of the GST Act, is a sufficient service. The respondents, being well aware of the fact the mode of service adopted by them is not effective but only sufficient in terms of Section 169(1)(d) of the GST Act, had proceeded to pass ex parte assessment order. Normally, when a mode adopted by the respondents is not effective, they should have explored the possibilities by sending notices through other modes of services as prescribed therein. There is no bar for the respondent to do so. When such being the case, this Court is unable to understand as to why these Assessing officers had repeatedly sent all the notices, reminders, etc., through ineffective mode of service - this Court is inclined to set aside the ex parte assessment orders. However, since the mode adopted by the respondent is sufficient mode, the petitioner had chances to view the portal and participate in the proceedings, but they had failed to do so. Therefore, this Court is of the view that the fault is on both the petitioner as well as the respondent and thus, this Court is inclined to set aside the impugned orders on terms. Conclusion - The fault for non-response lies both with the petitioners for not accessing the portal or responding and with the respondents for not adopting effective modes of service and not affording personal hearing. The matter is remanded to the concerned Assessing Officer for fresh consideration on condition that the petitioner shall pay 10% of disputed tax amount to the respondent within a period of four weeks from the date of receipt of copy of this order - Petition disposed off by way of remand.

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• 2025 (4) TMI 1380
  Issuance of SCN and subsequent demand for tax u/s 73 of the Goods and Services Tax Act, 2017 (the Act) made against a deceased person - HELD THAT:- A perusal Section 93 would reveal that the same only deals with the liability to pay tax, interest or penalty in a case where the business is continued after the death, by the legal representative or where the business is discontinued, however, the provision does not deal with the fact as to whether the determination at all can take place against a deceased person and the said provision cannot and does not authorise the determination to be made against a dead person and recovery thereof from the legal representative. Once the provision deals with the liability of a legal representative on account of death of the proprietor of the firm, it is sine qua non that the legal representative is issued a show cause notice and after seeking response from the legal representative, the determination should take place. Conclusion - The determination made in the present case wherein the show cause notice was issued and the determination was made against the dead person without issuing notice to the legal representative, cannot be sustained. Petition allowed.

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• 2025 (4) TMI 1379
  Initiation or continuation of proceedings to create new tax demands against a corporate debtor after the approval of a Resolution Plan by the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC) - HELD THAT:- The additional demands made by the first respondent in respect of the assessment years 2012-13 and 2013-14 will operate as roadblocks in implementing the approved Resolution Plan, and appellants will not be able to restart the operations of the CD on a clean slate - the demands raised by the first respondent against the CD in respect of assessment years 2012-13 and 2013-14 are invalid and cannot be enforced. The principle is crystal clear that once Resolution Plan has been approved by the NCLT, all other creditors are barred from raising their claims subsequently, as the same would disrupt the entire resolution process - there are no reason to keep this matter pending and accordingly the impugned Assessment Order passed under Section 74(9) of CGST/UPGST Act, 2017 by the Deputy Commissioner [Respondent No. 5] as well as the Impugned Demand Notice issued in pursuance to the Impugned Order dated 04.02.2025 passed under Section 74 of the CGST/UPGST Act, 2017 against the Petitioner relating to financial year 2017-2018, are quashed. Conclusion - Once the Resolution Plan has been approved by the NCLT, all other creditors are barred from raising their claims subsequently, as the same would disrupt the entire resolution process. Petition allowed.

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• 2025 (4) TMI 1378
  Violation of principles of natural justice - date of filing reply and the date of personal hearing - demand raised by the tax authority in excess of the amount specified in the SCN - violation of provisions of Section 75(7) of the Goods and Services Tax Act, 2017 - HELD THAT:- A perusal of Section 75 deals with general provisions relating to determination of tax and sub-section (7) specifically stipulates that the amount of tax, interest and penalty demanded in the order shall not be in excess of the amount specified in the notice and no demand shall be confirmed on the grounds other than the grounds specified in the notice. Admittedly, in the present case, the show-cause notice merely indicates the amount of Rs. 13,36,793/- as representing the tax, interest and penalty and the demand qua the three components has been raised at Rs. 63,51,001/-, which is ex facie contrary to the provisions of Section 75(7) of the Act. So far as the plea pertaining to not providing any opportunity of hearing is concerned, once it is the case of the petitioner that he was unaware of the issuance of the show-cause notice and the reminder, the fact that in the notices issued to the petitioner, the date of filing of reply and date of personal hearing were the same looses its significance and it cannot be said that on account of such indications, the notice, on its own, would stand vitiated. On account of violation of provisions of Section 75(7) of the Act, the order impugned cannot be sustained Conclusion - The impugned order raising a demand far exceeding the amount specified in the show-cause notice was in direct violation of Section 75(7) of the Act and therefore unsustainable. The matter is remanded back to the respondent no. 2 to provide an opportunity to the petitioner to file response to the show-cause notice and after providing opportunity of hearing, pass a fresh order in accordance with law - Petition allowed by way of remand.

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• 2025 (4) TMI 1377
  Levy of GST - assignment of leasehold rights of a plot of land allotted on lease by the Maharashtra Industrial Development Corporation (MIDC), and the buildings constructed thereon by the lessee, to a third party, on the payment of a lump-sum consideration - HELD THAT:- The Division Bench of the Gujarat High Court in GUJARAT CHAMBER OF COMMERCE AND INDUSTRY ORS. [ 2025 (1) TMI 516 - GUJARAT HIGH COURT] has taken a view that the assignment by sale or transfer of leasehold rights of the plot of land allotted by the Gujarat Industrial Development Corporation (GIDC) to the lessee or its successor (assignor) in favour of the third party (assignee) for consideration shall be an assignment/sale/transfer of benefits arising out of immovable property by the lessee-assignor in favour of a third party (assignee) who would then become a lessee of GIDC in place of the original allottee-lessee. In such circumstances, the Gujarat High Court held that the provisions of Section 7 (1) (a) of the CGST Act providing for scope of supply read with Clause 5 (b) of Schedule II and Clause 5 of Schedule III would not be applicable to such a transaction and the same would not be subject to levy of CGST as provided under Section 9 of the CGST Act. In the facts of the present case, what is challenged by the Petitioner is the Impugned Order dated 30th January 2025 passed by Respondent No. 2. Petition disposed off.

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• 2025 (4) TMI 1376
  Levy of GST - assignment of leasehold rights of a plot of land allotted on lease by the Maharashtra Industrial Development Corporation (MIDC), and the buildings constructed thereon by the lessee, to a third party, on the payment of a lump-sum consideration - HELD THAT:- The Division Bench of the Gujarat High Court in GUJARAT CHAMBER OF COMMERCE AND INDUSTRY ORS. [ 2025 (1) TMI 516 - GUJARAT HIGH COURT] has taken a view that the assignment by sale or transfer of leasehold rights of the plot of land allotted by the Gujarat Industrial Development Corporation (GIDC) to the lessee or its successor (assignor) in favour of the third party (assignee) for consideration shall be an assignment/sale/transfer of benefits arising out of immovable property by the lessee-assignor in favour of a third party (assignee) who would then become a lessee of GIDC in place of the original allottee-lessee. In such circumstances, the Gujarat High Court held that the provisions of Section 7 (1) (a) of the CGST Act providing for scope of supply read with Clause 5 (b) of Schedule II and Clause 5 of Schedule III would not be applicable to such a transaction and the same would not be subject to levy of CGST as provided under Section 9 of the CGST Act. In the facts of the present case, what is challenged by the Petitioner is the Show Cause Notice issued to the Petitioner dated 7th January 2025. Petition disposed off.

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• 2025 (4) TMI 1375
  Violation of principles of natural justice - denial of adequate hearing to the Petitioner - ineligible Input Tax Credit (ITC) was availed of by the Petitioner - HELD THAT:- The Court has perused the repeated personal hearing notices which have been issued. Clearly, there has been a laxity by the Petitioner. However, the Respondent No. 1 also could have put the Petitioner to terms and not have passed a detailed order raising a substantial demand running into more than Rs.12 crores including the recovery of ineligible ITC and penalty of Rs. 6,34,61,579/-. Considering the fact that the Petitioner has not been afforded a hearing though some attempts were made by the Petitioner to thereafter approach the Respondent No. 1 s office, there would be breach of natural justice. Subject to the payment of said costs within a period of one week, the impugned order dated 3rd February, 2025 is set aside - Petition disposed off.

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• 2025 (4) TMI 1374
  Maintainability of a writ petition challenging an order passed under Section 74 of the WBGST/CGST Act, 2017 - invocation of extended period of limitation - HELD THAT:- Admittedly, in this case, prima facie, though, it would transpire that only after an investigation was launched, the payments were made. It is not the case of the petitioner that the petitioner had made payment even prior to launching of such investigation, for the respondents to not issue any demand cum show cause. However, the distinction that has been drawn by the petitioner with regard to the authority of the respondents to issue the show cause subsequent to payment, is best left to the authorities to decided in the appeal, especially having regard to the fact that there had been no contemporaneous challenge by the petitioner to the show cause notice which had been issued on 30th September 2022 and all factual material is not available before this Court. In the case of Uniworth Textiles Ltd. [ 2013 (1) TMI 616 - SUPREME COURT ], the Hon ble Supreme Court has proceeded to observe that mere non-payment of duties is not equivalent to collusion or willful mis-statement but such may not be the case here, though no positive findings in this regard are being rendered by this Court as the same would prejudice the parties. Conclusion - The period between the date of filing of the writ petition and the date of passing of this order shall stand excluded for computing the period of limitation for filing of the appeal. Petition disposed off.

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• 2025 (4) TMI 1373
  Effective date of application - Reduction in GST rate on works contract services from 18% to 12%, recommended by the GST Council on 5th August 2017 but notified only on 21st September 2017 - whether reduction of rate could be applied retrospectively to tenders submitted before the notification date? - recall of order - HELD THAT:- The judgment passed by this Court does not suffer from any error apparent on the face of record nor there is discovery of any new fact, which was not in the knowledge of the review petitioner when the judgment sought to be reviewed was passed. The review petitioner has also not been able to point out any other sufficient reason, which would persuade to recall our well considered judgment. Special Condition 49, as reproduced in paragraph No.12 of the judgment passed in M/s Pardeep Electricals and Builder Pvt. Ltd, [ 2023 (11) TMI 1369 - JAMMU AND KASHMIR HIGH COURT] makes it abundantly clear that the rate quoted by the contractor shall be deemed to be inclusive of all taxes, duties, royalties, octroi and other levies payable under the respective statutes. The tendered rates shall be deemed to be inclusive of all taxes directly related to contract value with existing percentage rates prevailing on the last due date for receipt of tenders - From a plain reading of Clause 49, in its entirety, it becomes abundantly clear that the rates quoted by the contractor in his tender shall be inclusive of all taxes related to contract value, which would obviously include GST. The rate quoted by the contractor shall be taken to be inclusive of GST with existing percentage rate as prevailing on the last date for receipt of tenders. Suffice it to say that in terms of SRO-GST-11 dated 8th July, 2017, the construction services falling under Section 5 Heading 9954 were taxable @ 18%. The composite supply of works contract as defined in clause 119 of Section 2 of the CGST Act, 2017 was included in the aforesaid heading. The subsequent notification SROGST- 2(Rate) dated 22nd August, 2017 did not bring any change with regard to the construction services rendered in the shape of composite supply of works contract. SRO-GST-2(Rate) dated 22nd August, 2017 brought about changes in the rates of GST only with respect to specific composite supply of works contract, which, as indicated above, were the works contracts supplied to Government, a local authority or a Governmental authority by way of construction, erection, commissioning, installation etc of specified items like a historical monument, canal, pipeline conduit etc. This is evident from Clause (iii) of Notification dated 22nd August, 2017. Similarly, Clause (v) of the said notification deals with composite supply of works contract supplied by way of construction, erection, commissioning or installation of original works pertaining to railways, a single residential units other than as a part of a residential complex, low-cost housing etc etc. GST Notification dated 22nd August, 2017 brought about changes in respect of item No.(iii) of Serial No.3 of SRO-GST 11 dated 8th July, 2017. The composite supply of works contract as defined in Clause 119 of Section 2 of Central Goods and Services Tax Act, 2017 figures at item No. 3(ii) of Notification dated 8th July, 2017 prescribing 18% GST was not altered by SRO-GST-2(Rate) dated 22nd August, 2017. What was sought to be amended and elaborated by notification dated 22nd August, 2017 was only item No.3 (i) at serial No.3 dealing with construction services other than composite supply of works contract mentioned in item No.3(ii) and the construction services mentioned in Clause 3(iii). The rate of GST prescribed vide notification dated 8th July, 2017, which was in-vogue at the time of submission of bids by the petitioner as also on the last due date for submission of bids, on composite supply of works was 18%. Vide notification dated 21st September, 2017, the rate of GST came to be reduced from 18% to 12%. Conclusion - The applicable GST rate on the petitioner s contract at the time of tender submission was 18%, and the reduction to 12% notified later applied prospectively. There are no merit in the petition - petition dismissed.

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• 2025 (4) TMI 1372
  Seeking to quash tax proceedings initiated under Section 74(5) of the KGST Act, 2017 - HELD THAT:- It is deemed just and appropriate to dispose of this petition by treating the impugned proceedings comprising of Annexure-E, E1 and G as proceedings under Section 73 of the KGST Act instead of Section 74 of the KGST Act and by issuing further directions in this regard. Petition disposed off.

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• 2025 (4) TMI 1371
  Entitilement to transitional credit of service tax paid on advances received for future services under clause (c) of sub-section (11) of Section 142 of the CGST Act, 2017 and Rule 118 of the CGST Rules, 2017 - procedural error in entering the amount of service tax paid - HELD THAT:- In accordance with the provisions of Rule 118 of CGST Rules and clause (c) of sub-section (11) of Section 142 of CGST Act, 2017, appellant was entitled to transitional credit of Rs. 6,15,409/- by entering the same at Sr.No.11 of Form TRAN-1. Due to technical glitch, appellant had to enter the same at Sr. No. 5 of the said form TRAN-1. The said violation of not entering the required data at Sr.No.11 but entering the same at Sr. No. 5 is only procedural and for procedural infirmity, substantial right of the appellant cannot be denied. Revenue is directed to treat the data entered at Sr. No. 5 of form TRAN-1 of Rs. 6,15,409/- to be treated as the one that is entered at Sr. No. 11 of the said proforma. Conclusion - Entitlement to transitional credit under Section 142(11)(c) and Rule 118 of CGST Rules is substantive and cannot be defeated by procedural glitches in the GSTN portal. Appeal allowed.

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• 2025 (4) TMI 1370
  Seeking grant of regular bail - evasion of GST - clandestine supply of online money gaming services - HELD THAT:- Present case was registered against the applicant/ accused for evasion of GST of Rs.56.78 Crore approximately. As per the report of the Department, applicant/ accused had made taxable supplies without issue of invoice. It is averred by the Department that applicant/ accused alongwith his other associates made clandestine supply of online money gaming to recipients in India through various online money gaming platforms without issue of invoices and without payment of GST. It is a settled position of law that the gravity of the offence has nothing to do with the punishment provided for the same. The gravity is to be judged by the impact, the offence has on the society, economy and financial stability of the country. It is settled law that economic offences in itself are considered to be gravest offences against the society at large and hence, are required to be treated differently in a matter of bail. As per report of Department, to make payment to Indian customers of online money gaming against their winning amounts, applicant/ accused used third party applications namely Portal and from the data extracted from the mobile phone of the applicant/ accused, login credentials for such third party app and OTP for logging in such third party app were received on the mobile phone of applicant/ accused - There are serious allegations of evasion of GST of Rs.56.78 Crore against applicant/ accused. Investigation in the present case is at very crucial stage. Key members of the syndicate indulged in the present case are yet to be apprehended. Applicant/ accused is one of the key operators in this offence. The apprehension of the Department that accused might misuse his liberty once released on bail, seems to hold merit. Conclusion - The applicant/accused is a key operator in a large-scale GST evasion syndicate involving online money gaming platforms, with substantial incriminating evidence against him. Considering the seriousness of allegations and gravity of offence, this Court is not inclined to release the applicant/ accused on bail. Therefore, present bail application stands dismissed.

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• 2025 (4) TMI 1369
  Seeking grant of anticipatory bail - fraudulent availment and passing of Input Tax Credit (ITC) without actual supply of goods - HELD THAT:- The analysis of GSTR-2A of M/s. Khwaish Enterprise revealed that more than 90 percent of the supply made by them were to M/s. AC Goel Tradelinks Pvt. Ltd. and it was also found that all supply made to M/s. Khwaish Enterprise was from M/s Sunrise Enterprises which is also a fictitious firm. Further, analysis of GSTR-2A of M/s. Sunrise Enterprises revealed that top supplier of the said firm happen to be M/s. JMV Papers Private Limited. M/s. Sunrise Enterprises is the only supplier of M/s. Khwaish Enterprise, who in turn has passed on fake ITC to M/s. AC Goel Tradelinks Private Ltd., whose de-facto controller is Ashwin Goel and M/s. Sunrise Enterprises has availed and utilised ITC to the tune of Rs. 8 Crore (approximately) and it is also a fictitious firm. As per investigation conducted so far M/s. JMV Papers Private Ltd. passes bills without delivery of goods to M/s. Sunrise Enterprises (which is a non-existent firm) and M/s. Sunrise Enterprises passes bills without delivery of goods to M/s. Khwaish Enterprises (which is also a non-existent firm). M/s. Khwaish Enterprises passes bills without delivery of goods to M/s AC Goel Tradelinks Private Ltd. Statement of Sh. Vikram was recorded u/s 70 of the CGST Act, 2017 who is accountant of both the firms i.e. M/s. Khwaish Enterprises and M/s. Sunrise Enterprises and he has admitted in his statement that these firms only raise tax invoices/ passes bills without delivery of goods. It is a nexus/ syndicate in which all these fictitious firms/ companies are involved. Further, investigation qua other firms and persons still pending. It is established from the report that cumulatively these firms have availed and utilized and passed on seemingly fake ITC to the tune of Rs. 15 crores (approximately). Despite issuance of four summons to applicant/ accused, he has not joined the investigation. Conclusion - The applicant/accused is a key member of a syndicate involved in fraudulent availment and passing of fake ITC through fictitious firms, causing massive loss to the exchequer. This Court is not inclined to grant anticipatory bail to applicant/ accused. Therefore, present bail application stands dismissed.

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• Income Tax

• 2025 (4) TMI 1384
  Belated filling of appeal before CIT(Appeals) - petitioner had filed an appeal in Form No.35 manually - HELD THAT:- As petitioner had filed the appeal within the extended time on 15.06.2016 as per Circular No. 20/2016 dated 26.05.2016, the appeal could not have been dismissed on the ground of delay. The impugned order passed by CIT(Appeals) is hereby quashed and set aside. The matter is remanded to CIT(Appeals) to decide the same on merits in accordance with law after giving an opportunity of hearing to the petitioner.

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• 2025 (4) TMI 1368
  Loss on derivative on the issue of loss in shares and securities and the issue of Coordination charge - As petitioner submitted that the controversy between the petitioner and the Department no longer survives in view of the settlement of dues under the Direct Tax Vivad Se Vishwas Scheme, 2024. Hence, appropriate orders may be made in this petition. HELD THAT:- The submission of learned counsel for the petitioner is placed on record. Owing to the aforesaid reason, the Special Leave Petition has been rendered infructuous.

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• 2025 (4) TMI 1367
  Reopening of assessment u/s 147 - notice issued to the Petitioner-Assessees u/s 148-A(1)(b) - scope of extended time limit by TOLA, 2021 - Revenue relied upon Rajeev Bansal [ 2024 (10) TMI 264 - SUPREME COURT (LB) ] wherein Revenue concedes that for the assessment year 2015-2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 - HELD THAT:- As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021. In such circumstances referred to above the original writ petition [ 2023 (2) TMI 1400 - ORISSA HIGH COURT ] respectively filed before the High Court of Orissa at Cuttack stands allowed. The impugned notice therein stands quashed and set aside. The relief in terms of prayer (a) is granted. The appeals stand disposed of in the above terms.

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• 2025 (4) TMI 1366
  Accrual of income - Duty drawback had not accrued and become payable to the assessee and cannot be included in the taxable income of the Assessee - HELD THAT:- Whether the said claim is accepted or not is something which is in the knowledge of the respondent. Therefore, while passing an order of remand, the ITAT directed the respondent to place all the relevant material before the Assessing Officer. Thus, the scope of remand is very narrow for the limited purposes of ascertaining whether the claim made by assessee was accepted in the year under consideration. While passing order of remand as noted above, the ITAT observed that if the claim of assessee was not accepted in the year under consideration, then no addition shall be made. However, if it is found that the claim of assessee was accepted in the year under consideration to that extent, addition would be retained. There was no reason for the High Court to interfere with the order of remand as it was passed only for the purposes of limited factual verification by the AO. Accordingly, the appeal is partly allowed. The impugned judgment and order of the High Court is interfered with only as regards the finding recorded by the High Court [ 2017 (12) TMI 536 - DELHI HIGH COURT] on question no.(iv) in paragraph nos.7 and 8. Consequently, the order of remand passed by ITAT under order [ 2004 (10) TMI 278 - ITAT DELHI-A] stands restored. The appeal is accordingly partly allowed.

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• 2025 (4) TMI 1365
  Rejection of application for condonation of delay in filing Form-10B - HELD THAT:- Suppose the Petitioner wishes to file a supplementary affidavit in support of the application for condonation of delay. In that case, the same should be filed within 15 days from today and forwarded to the CBDT. CBDT must consider this additional affidavit if filed within 15 days from today and dispose of the Petitioner s application for condonation of delay on its own merits and in accordance with law. We clarify that we have not examined whether the Petitioner has made out any sufficient cause. CBDT will have to examine these matters in the first instance. Accordingly, all parties contentions are left open. We are sure that the CBDT will afford an opportunity of hearing to the Petitioner and the Department before disposing of the Petitioner s application for condonation of delay. A reasoned order must be communicated to the Petitioner within four months of producing an authenticated copy of this order. Rule is made absolute in the above terms without any cost order. The proceedings for the restoration of this petition do not survive, as it is pointed out that this petition was already restored.

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• 2025 (4) TMI 1364
  Reopening of assessment u/s 147 - second re-assessment notice issued after a period of four years - Petitioner has received cash for sales - HELD THAT:- In this case, the return of income was filed on 16 September 2008. The said return of income was reopened by issuing notice u/s 148 on 29 December 2011 and an assessment order u/s 143(3) r.w.s. 147 was passed on 18 December 2012. The second re-assessment notice u/s 148 which is impugned in the present Petition, was issued on 27 March 2015, which is after a period of four years from the end of the relevant assessment year. In the reasons recorded, it is alleged that the Petitioner has received cash for sales relevant to assessment year 2008- 09 as per the assessment order 2011-12, which have not been shown by the assessee in return of income for assessment year 2008-09 and therefore, the case is reopened. On a perusal of the assessment order for AY 2011-12, an addition is made on the ground of alleged cash received on sale of flat. The breakup of said amount can be found in the assessment order at internal page 9 to 12 and Writ Petition. On a comparison of the breakup it is noticed that the amount proposed to be reassessed in the reasons recorded for assessment year 2008-09 has already been added in the assessment order for assessment year 2011-12. The reasons for reopening the case for assessment year 2008-09 are recorded on or before 27 March 2015 whereas, the assessment order for assessment year 2011-12 is dated 27 March 2014. On the date of recording the reasons, the assessing officer had already added on substantive basis in assessment year 2011-12 and further the reasons recorded for assessment year 2008-09 does not say that the said amount is supposed to added on protective basis. In our view, if sum was already added in the assessment order for assessment year 2011-12 on substantive basis much prior to the issue of the impugned notice dated 27 March 2015, then we failed to understand how there could be reasons to believe that income for assessment year 2008-09 has escaped assessment, since the same figure has already been added on substantive basis in assessment year 2011-12 and the present impugned proceedings are not on protective basis. On this short point itself since there could not have been any reasons to believe that the income has escaped assessment for assessment year 2008-09 after having the said amount added in assessment year 2011-12 prior to the impugned proceedings, the present impugned notice under Section 148 dated 27 March 2015 is hereby quashed and set aside.

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• 2025 (4) TMI 1363
  Reopening of assessment u/s 147 as barred by time - Time limit for notice u/s 149 - escaped income from multiple assessment years to meet the threshold limit of Rs. 50 lakhs - HELD THAT:- In the present case, it is apparent that there is no singular occasion or event which has resulted in the income of more than one previous year exceeding the sum of Rs. 50 lakhs. The allegations against the Assessee are that it has undercharged its AE for the R D Services rendered by it, and therefore, the income is required to be adjusted to the extent of Rs. 27 lakhs. Additionally, it is alleged that the Assessee has overpaid for certain managerial and group related services to the extent of Rs. 21 lakhs. None of these two adjustments can be stated to have been a part of a singular event or occasion spanning more than one previous year. AO has erred in proceeding on the basis that it was open for the AO to issue a notice u/s 148 of the Act bearing in mind the cumulative income that has escaped assessment in respect of FYs 2016-17, 2017-18 and 2018-19. It is impermissible for the AO to add income which is alleged to have escaped assessment for different previous years for determining the threshold figure of Rs. 50 lakhs as specified under Section 149 (1) (b) of the Act. We find merit in the contention that the impugned notices have been issued beyond the period of limitation as prescribed u/s 149 (1). Accordingly, the impugned notices and all proceedings commenced pursuant thereto, are set aside.

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• 2025 (4) TMI 1362
  Disallowance of benefit u/s 54 - Assessee could not establish the value of the cost of construction by production of any bills or other documents. It is the Assessee s case that he had inherited the property from his mother and did not have any bills or documents to substantiate the cost of construction. Accordingly, the Assessee had furnished an independent valuer s report estimating the value of construction at the material time. Assessee is aggrieved as the said valuation report had been disregarded. HELD THAT:- AO has not undertaken any exercise to estimate the costs of construction and has proceeded to assume them to be NIL. Prima facie, the cost of building cannot be disregarded in entirety. We also note that the Assessee has a remedy of statutory appeal before the CIT(Appeals). We, accordingly, refrain from entertaining the present petition leaving it open for the Assessee to avail his statutory remedy. However, in the peculiar facts and circumstances of the case, we direct that in the event the Assessee prefers an appeal within a period of four weeks from date, the same would be considered by the Appellate Authority on merits

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• 2025 (4) TMI 1361
  Validity of the impugned section 143(3) assessment - initiate section 153C proceedings OR reopening u/s 148/147 - instant case involves the PCIT, Kanpur s requisition which amounts to initiation of search attracting either section 153A proceeding in case of the searched person or under section 153C, involving any third person - Unexplained money/cash - assessee s could not explain the source thereof during the course of hearing of assessment framed as upheld in the lower appellate discussion. HELD THAT:- We are of the considered view that the Revenue s arguments carry no merit once it is a case of a requisition and the learned Assessing Authority has framed its assessment under the regular provisions i.e. under section 143(3) of the Act than either taking recourse of section 148/147, as the case may be. We thus see no reason to sustain the impugned assessment framed on 31st March, 2022, which is hereby quashed in very terms. Assessee s appeal is allowed.

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• 2025 (4) TMI 1360
  Addition u/s 56(2)(viib) - rejecting the valuation report submitted by the assessee - Valuation of unquoted equity shares where in terms of rule 11UA(1)(c)(b) of the Income Tax Rules, 1962 whether the book value of the immovable property is to be taken or the circle rate of immovable property is to be considered for the purpose of valuation - HELD THAT:- In the instant case, the assessee has valued its shares in terms of Net Asset Value method as prescribed u/Rule 11UA(1)(c)(b) of the Act. AO has taken the book value of the assets for the purpose of valuation of the shares however, the fair market value of the shares has to be computed by taking the market value of the assets of the company as on the date of issue of shares. As the AO was not agreed with the market value claimed by the assessee, therefore, the matter must be referred to the DVO for the purpose of determining the value of the assets of the assessee as on the date of issue of shares. Accordingly, the matter of determining the fair market value of shares as per method provided under clause (ii) of explanation (a) of section 56(2)(viib) is set aside to the file of AO for fresh adjudication after obtaining the report of the DVO with regard to the fair market value of immovable property as on the date of issue of shares. Ground of appeal taken by the assessee is allowed for statistical purposes.

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• 2025 (4) TMI 1359
  Taxing consultancy income of the Appellant, who is not having permanent establishment in India - treaty benefits as claimed under provisions of Article 7 of the India-UAE treaty - HELD THAT:- The assessee has filed Tax Residency Certificate (TRC) valid from January 2018 to December 2018. It is not in dispute that the assessee earned marking commission during the year. Since the assessee do not have any PE, the Article 7 is not applicable. The assessee is eligible for benefits under Article 22. The AO is hereby directed to recompute the tax liability. The assessee is eligible for benefits under Article 22of DTAA. AO is hereby directed to recompute the tax liability.

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• 2025 (4) TMI 1358
  Addition u/s 69 - deposit of cash in the bank during demonetization period - HELD THAT:- When assessee proves that she had on relevant date a large sum of money sufficient to cover the deposit of cash in the bank during demonetization period, this Tribunal/Hon ble Courts, in the absence of something which showed that the explanation was inherently improbable has accepted the explanation that the assessee had such amount in SBNS which was deposited in the bank account. Assessee was held to have prima facie discharged the initial burden upon him/her which was upon him in such cases. Moreover, once the AO has accepted the genuineness of the source as source from the withdrawals AO can t be expected to reject part of the explanation [i.e. Rs. 12.10 lakhs as source from the very same source viz., withdrawal of Rs. 40 lakhs] without cogent reason or adducing any material to show that the withdrawn amount of Rs. 40 lakhs had been spent by assessee or invested in immovable/movable assets of which is not the case of the AO. Therefore, the action of the AO rejecting in part, the explanation given by the assessee can t be accepted. Explanation which was held to be reasonable [by the AO] as to a part, must be good for the whole, because there is no material on which it could be held that the balance constituted income from some undisclosed source to distinguish case about the part rejected from the part accepted. We are of the view that the assessee has prima facie discharged her burden about the source which has not been rebutted by the Ao/Ld.CIT(A) which is merely based on no evidence rather it is based on conjectures, surmises and suspicion; and furthermore is vitiated by failure of lower authorities in not taking into consideration relevant materials bearing on the fact in issue. Thus, the assessee s appeal is allowed and the addition made u/s.69 is directed to be deleted.

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• 2025 (4) TMI 1357
  Applicability of section 56(2)(viib) - issue of shares at premium to parent company - AO observed that assessee declared losses and its future prospects are not promising however, it has charged huge premium on the shares issued - HELD THAT:- As assessee M/s EPEL is wholly owned subsidiary of M/s ESL. Since EPEL is a 100% subsidiary of ESL (a listed company), EPEL is also a company in which public are substantially interested within the meaning of Section 2(18)(b)(B)(c) of the Act. Accordingly, the provisions of Section 56(2)(viib) of the Act which are applicable to the unquoted equity shares of a company in which public is not substantially interested are not applicable to the case of EPEL where the shares are issued at premium. By respectfully following the decision of case of Appollo Sugar Clinic [ 2019 (6) TMI 340 - ITAT HYDERABAD] we find no infirmity in the order of ld. CIT(A) in holding that the assessee is 100% subsidiary of M/s ESL and, therefore, is a company in which public is substantially interested and thus the provisions of section 56(2)(viib) of the Act are not applicable. Accordingly, we uphold the order of ld. CIT(A) deleting the additions made by AO. Appeal of the revenue is dismissed.

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• 2025 (4) TMI 1356
  Levy of surcharge @37% instead of 10% applicable to the assessee as per the Relevance Finance Act - HELD THAT:- Admittedly, this issue now stands covered by the decision of the Hon ble Special Bench in the case of Aaradhya Jain Trust vs. Income Tax Officer [ 2025 (4) TMI 648 - ITAT MUMBAI] wherein held that in the case of private discretionary trusts taxed at the maximum marginal rate, the computation of surcharge must be based on the slab-wise surcharge structure prescribed in the Finance Act under Paragraph A of Part I of the First Schedule, and not at a flat highest rate. Thus, we hold that the assessee has rightly computed the surcharge @10% for A.Y.2021-22 and @25% for the A.Y.2022-23. Accordingly, the grounds raised by the assessee are allowed. Accordingly, the reference was answered in favour of the assessee.

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• 2025 (4) TMI 1355
  Levying surcharge on the tax in the hands of the assessee as a result of maximum marginal rate despite the income was much below limit of Rs. 50,00,000/- prescribed under the relevant Finance Act - HELD THAT:- Hon ble Special Bench in the case of Araadhya Jain Trust [ 2025 (4) TMI 648 - ITAT MUMBAI] clarified that in case of Private Discretionary Trust whose income is chargeable to tax at marginal rate, surcharge has to be computed on the income tax having reference to the slab rates prescribed in the Finance Act under the surcharge of Income Tax , accordingly, we hold that even if rate tax is applicable at maximum marginal rate however, if the slab rates are below Rs. 50,00,000/- for levy of surcharge, no surcharge can be levied. Here in this case, it is not in dispute that slab rate of income of the assessee trust is much below of Rs. 50,00,000/- and therefore, surcharge cannot be levied. Appeals of the assessee are allowed.

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• 2025 (4) TMI 1354
  Penalty levied u/s 271(1)(c) - additional income declared before the Settlement Commission, including income from salary from foreign entities, buffer income, and income from house property - order of the Ld. CIT(A) in cancelling the penalty on account of limitation Addition on account of rental income - HELD THAT:- We find the major portion of the same is relating to the notional income from house property which was lying vacant. In our opinion, although the addition can be made on account of notional income from the house property which is lying vacant, however penalty u/s 271(1)(c) of the Act is not warranted. The income tax law is so complex and complicated that it is possible that some omission or error may occur on account of interpretation of the statute in a bonafide manner. Since there is no evidence that the assessee has received any rental income from the house property which was vacant and the addition has been made on account of such notional rent, therefore, penalty on the amount in our opinion, is not justified. We therefore hold that no penalty is leviable on the addition on account of notional house rent. Income from house property - It is the submission of the assessee that due to some arithmetical error, there was shortfall in disclosing that rental income but rental income from the above two properties was disclosed. We find some force in the above argument of the Ld. Counsel for the assessee that the same was only an arithmetical inaccuracy and not a deliberate attempt to evade tax for which penalty should not be levied. We accordingly hold that no penalty is leviable on account of this difference in rental income. Buffer income - We do not accept this proposition of the Assessing Officer. This amount, in our opinion, is an income voluntarily disclosed by the assessee to overcome omission, if any. However, no such omission or error was found by the AO. Since assessee has not paid tax on the amount disclosed before the Settlement Commission, the immunity was withdrawn and the penalty was levied. This being the case, we are of the considered opinion that the penalty on this amount of Rs. 50 lakhs disclosed by the assessee as buffer income does not call for levy of penalty u/s 271(1)(c) of the Act. Salary which was not added by the assessee in its return of income being a non-resident, we find the Settlement Commission vide order passed u/s 245D(2C) has held that the assessee is a non-resident - We find that two different combinations of the Settlement Commission which consists of very very senior officers of the department are not in agreement with each other regarding the status of the assessee. Under these circumstances, alleging the assessee that the assessee has concealed the particulars of his income with respect to salary income by treating himself as non-resident, in our opinion, is not justified. Although the Settlement Commission in the said order has held the assessee to be a resident Indian, however, there is a finding of fact by the Settlement Commission that the assessee has not concealed any material facts from the Settlement Commission. This shows the bonafideness of the assessee in disclosing the material facts before the Settlement Commission. It is no doubt an admitted fact that the immunity was withdrawn on account of non-payment of due taxes by the assessee on the basis of the addition made by the Settlement Commission treating the assessee as resident. However, we find the assessee subsequently challenged the order of the Settlement Commission treating the assessee as resident and the Hon ble High Court has admitted the substantial question of law. We find in an identical issue had come up before in the case of CIT vs. Nayan Builders and Developers [ 2010 (9) TMI 1004 - BOMBAY HIGH COURT] has to be deleted. We find in that case the Tribunal deleted the penalty on the ground that when the substantial question of law is admitted by the Hon ble High Court, penalty is not leviable. We also find merit in the argument of assessee that treating the issue of residential status as a part and parcel of issue of concealment of income is not justified. In our opinion, scope of concealment of income ought to be construed / interpreted from the specific clear words which do not include issue of residential status. We, therefore, hold that the penalty levied by the Assessing Officer is not sustainable on account of substantial question of law being admitted on the issue of salary income and the residential status of the assessee. Period of limitation - We are of the considered opinion that the penalty proceedings initiated by the Assessing Officer are barred by limitation. We find the Settlement Commission vide order dated 27.08.2015 passed u/s 245D(4) had granted immunity to the assessee which was withdrawn by the Settlement Commission on 03.05.2017 vide order passed u/s 245(H)(1A). Therefore, the assessee was granted immunity from penalty and prosecution for a period of 20 months and 7 days i.e. between the period from 27.08.2015 till 03.05.2017. This, in our opinion, has to be added to the two time periods specified in section 275(1)(c). If the first limitation i.e. the expiry of the financial year in which the action for imposition of penalty has been initiated are completed is considered, then in view of the order passed u/s 245D(4) dated 27.08.2015, the limitation period after considering the period of 20 months and 7 days is 07.12.2017. However, the concealment penalty has been levied on 26.09.2018. Therefore, such penalty order is beyond the first date of limitation. Similarly, if the period of 6 months from the end of the month in which the action for imposition of penalty has been initiated is considered, then such date to be inferred is 29.02.2016 i.e. 6 months from 31.08.2015 i.e. the end date of the month in which 245D(4) order was passed. After adding the immunity period of 20 months and 7 days to 29.02.2016, the second limitation period happens to be 07.11.2017. However, the concealment penalty order has been passed on 26.09.2018. Therefore, the penalty order has been passed beyond the second date of limitation. If the date of withdrawal of immunity passed by the Settlement Commission u/s 245H(1A) on 03.05.2017 is considered as the date of initiation of penalty proceedings, then also the first limitation date ends on 31.03.2018 whereas the penalty has been levied on 26.09.2018 and therefore, such penalty order happens to be beyond the date of first date of limitation. So far as the second limitation date is concerned, if we consider the end of 6 months from the end of the month in which the penalty proceedings are initiated, then the second limitation period ends on 30.11.2017 i.e. 6 months from 31.05.2017 (since the order u/s 245H(1A) was passed on 03.05.2017). Since the penalty order has been passed on 26.09.2018, therefore, the said penalty order happens to be beyond the second date of limitation. Since the penalty order has been passed beyond the stipulated period, therefore, in view of the above discussion and in view of the detailed reasoning given by the Ld. CIT(A) on this issue, we hold that such penalty levied by the Assessing Officer being barred by limitation, is not sustainable. We, therefore, uphold the order of the Ld. CIT(A) quashing the penalty being barred by limitation and the grounds raised by the Revenue are accordingly dismissed.

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• 2025 (4) TMI 1353
  Disallowance of deduction u/s. 54 - property purchases jointly - assessee has purchased the old property along with her husband where she has failed to establish that the sale consideration was paid by her and not her husband - HELD THAT:- We do not find any embargo for the assessee to claim deduction under this provision either as a co-owner, or on sale of one or two residential properties or on purchase of a residential property as a co-owner. Any express bar for the assessee to claim the said deduction on a property which has been jointly purchased by the assessee. AO s contention that the old property was purchased jointly by the assessee s husband and the assessee is to be taken into view only to find out if the assessee s husband has also claimed deduction u/s. 54 pertaining to the sale of this property and purchase of the new residential house. If as per the contention, the old property belongs to the assessee and the sale consideration received out of the transfer was invested by the assessee in the new property, the assessee is entitled to claim deduction u/s. 54 to the extent of her investment in the new residential property. AO has also not brought on record any fact to show that the assessee has sold more than one property and merely because the assessee s husband has transferred his other property, which detail is not before us, it cannot be said that the assessee has transferred two properties. Even otherwise, assuming that the old property which was sold belonged to the assessee s husband then the assessee s husband was entitled to claim the entire benefit u/s. 54, though the property was purchased jointly. In the present case in hand, it is not the case of the revenue that both the assessee and her husband has claimed benefit u/s. 54 twice for the entire sale consideration but it is a case where they have claimed proportionately to the extent of investment made by either of them in the purchase of the new property. Pertinently, courts have taken a liberal view with regard to the claim of Section 54 and Section 54F which are beneficial provisions that are to be interpreted liberally in favour of the assessee and deduction should not be merely denied on hyper-technical ground. Benefit u/s. 54 cannot be denied merely because the property was purchased jointly in the name of the assessee and her husband, where in case of property held jointly the capital gain shall be calculated for each owner in accordance with the funding and allocation of shares of the house properties for claiming tax benefits. We find justification in allowing ground no. A with the direction that the ld. AO shall verify that there has been no double deduction claimed by the assessee and her husband on the capital gain arising out of the sale of property claimed by the assessee and to allow deduction u/s. 54 to the extent of the investment made by the assessee on the purchase of the new property. Ground no. A(1) is hereby allowed. Addition u/s. 23 - deemed rental income of the office premises which the assessee alleged to be owned by the assessee and her husband jointly at 90.90% and 9.10% share respectively and the same was used as office premises for business purpose by the assessee - HELD THAT:- The assessee has failed to furnish documentary evidences to demonstrate the fact that the said property was used by the assessee and her husband for their business purposes. We are also conscious of the fact that there are various judicial precedents which has held that the ALV of a property has to be determined based upon the municipal rentable value which in the present case has not been considered by the ld. AO. We therefore deem it fit to remand this issued to the ld. AO to the limited extent of determining the ALV of the said property as per the municipal rentable value to the extent of the holding of the assessee in the said property.

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• 2025 (4) TMI 1352
  TDS u/s 194H - commission payments to franchisees/LFS - AR submitted that Section 194H has no applicability in the present facts, as the assessee is not a person responsible for making any payment to the franchisees or LFS HELD THAT:- The agreement entered into between the assessee and the franchisees/LFS establishes a principal-to-principal relationship. The franchisees/LFS are not agents of the assessee. Relevant terms of the agreement are annexed as Annexure A to the Synopsis of Arguments. The transaction between the assessee and the franchisees/LFS is a sale on a principal-to-principal basis. Section 194I treating the discounts offered to LFS as rent for occupation of a demarcated space within the LFS premises - On Applicability of Section 194-I the assessee contended that the discount allowed to LFS cannot be considered as rent. The allegation of the AO that the assessee acquires possession or control over a specified demarcated area within the premises of the LFS stores, and that its employees use the space exclusively for its business purposes, is factually incorrect and unsustainable. As per the agreement between the assessee and the LFS entities, the assessee merely sells goods to the LFS, who in turn display and sell the goods to end customers. For the purpose of facilitating sales, the assessee may, at times, depute its employees to be present on the store floor to assist customers. However, the employees do not possess or control the premises. LFS retains full possession and operational control. The fact that a brand-dedicated area is used for display of goods does not lead to the inference that the assessee has possession or control over that space. The employees of the assessee are neither entitled to exclusive use of such space nor do they have independent access or rights thereto. No fixed or identifiable area is earmarked in the agreement, and the LFS has complete discretion regarding whether to display the goods or not. Therefore, the invocation of Section 194-I of the Act is without merit. Assessee raised invoices in the name of the LFS/franchisees, and the LFS/franchisees in turn raised invoices to the end customers. The brand name was merely used to sustain the market position. The transactions are clearly on a principal-to-principal basis, and the discounted pricing mechanism adopted by the assessee cannot be considered as payment of commission. No evidence has been placed by the revenue to establish that the assessee has paid any commission to the LFS/franchisees. Further, the transactions have been accepted by both the Assessing Officer and the GST Authorities as sales on a principal-to-principal basis. The only objections raised pertain to alleged applicability of TDS under Sections 194H and 194-I, which, in our considered view and as elaborated hereinabove, are not sustainable. No infirmity in the impugned order passed by the Ld. CIT(A). We therefore see no reason to interfere with the same. In the result, the appeal filed by the revenue is dismissed.

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• 2025 (4) TMI 1351
  Validity of Reopening of assessment u/s 147 as beyond the limitation period specified u/s 149(1) - Scope of new regime - HELD THAT:- From the plain reading of the provisions of Section 149 of the Act, it is evident that no notice under section 148 of the Act shall be issued after the expiry of 3 years from the end of the relevant assessment year, unless the case falls under clause (b) to section 149(1) of the Act. Having considered the provisions of the Act, pre as well as post the amendment by the Finance Act, 2021, and the TOLA, in the light of the decision of Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT ] and Rajeev Bansal [ 2024 (10) TMI 264 - SUPREME COURT (LB) ] we are of the considered view that the notice issued under section 148 of the Act on 28/07/2022 is barred by limitation period specified under section 149 of the Act. Accordingly, we are of the considered view that notice issued under section 148 of the Act on 28/07/2022 is void ab initio and bad in law. Therefore, the same is quashed. Consequently, the entire re-assessment proceedings and assessment order passed under section 147 r.w. section 144B of the Act are also quashed. Appeal by the assessee are allowed.

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• 2025 (4) TMI 1350
  Cancelling the application u/s 12AB(1)(b)(ii)(B) for permanent registration and also cancelling the provisional approval u/s 12A(1)(ac)(vi) - application for recognition u/s. 80G was rejected on the ground that the assessee was not granted registration u/s 12AB and therefore, recognition u/s 80G was also rejected - only reason in rejection of the registration of the applicant-assessee trust was that the assessee was not registered under RPT Act and therefore, the application for registration u/s 12AB of the Act was rejected HELD THAT:- Bench noted that since the assessee has already applied for registration under RPT Act and thereby the reasons advance for rejecting the registration of the applicant-assessee trust are curable in nature. Bench feels that the issue of registration u/s 12AB of the be decided a fresh, based on the registration under RPT Act to be produced by the assessee. Therefore, we restore the matter of the registration u/s 12AB of the Act to the file of the ld. CIT(E) be decided afresh. Bench also noted that recognition u/s 80G of the Act was denied because the applicant-assessee trust was not registered u/s 12AB of the Act. Since we have restored the matter of registration u/s 12AB to the file of the ld. CIT(E) and therefore, we also deem it a fit case to restore the matter of recognition u/s 80G of the Act to the file of the ld. CIT(E). Both the matters are restored back to the file of the ld. CIT(E). We may make it clear that our decision to restore the matter back to the file of the ld. CIT(E) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the CIT(E) independently in accordance with law.

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• 2025 (4) TMI 1349
  Exemption u/s 11 - scope of provisions of section 2(15) - as per revenue since the income of the trust was applied for religious purposes, the surplus so earned by the assessee would not be eligible for exemption u/s 11 - whether activities of the assessee are not religious whereas the assessee has applied the money for religious purpose? - activity of sale of devotional articles was utilized for carrying out the objects or not? - assessee stated that the main charitable activities of the trust were feeding the poor, providing education and medical relief - CIT(A) allowed exemption HELD THAT:- The assessee is a public charitable trust and it is registered trust u/s 12AA of the act. It is also holding valid approval u/s 80G(5). The perusal of Income and Expenditure (Page No.30 of the paper-book) would show that majority of its income constitute general donations and interest income. Apparently, there is no change in the activities of the trust since its inception and the assessee-trust continue to engage in similar kind of activities. The Hon ble Supreme Court in the case of ACIT vs. Ahmedabad Urban Development Authority[ 2022 (10) TMI 948 - SUPREME COURT] held that such activities if carried out for nominal cost, would not be ipso fact become business. In the present case, the observation of Ld. AO that the assessee sold the books at a high mark-up is fallacious one since AO has not considered the administrative expenditure incurred on carrying out sale of books and articles. The major income of the assessee, as observed earlier, constitutes general donations and interest income. Therefore, the adjudication of CIT(A) could not be faulted with. Revenue Appeal dismissed.

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• 2025 (4) TMI 1348
  LTCG - addition without referring to the valuation to DVO - HELD THAT:- AO made reference to DVO for estimate of Fair Market Value of asset as on 01.04.1981. Admittedly report of DVO was not received by AO before completion of assessment. AO on his wisdom adopted the value of land/asset as on 01.04.1981 @ Rs. 5/- per meter (wrongly mentioned at Rs. 5.00/- per square feet). AO after adopting the value of asset as on 01.04.1981 Rs. 5.00/- per re-computed the capital gains and made addition of capital gains at Rs. 87,86,472/-. Admittedly the appeal of assessee was dismissed ex parte order by Ld.CIT(A). Additional ground of appeal by making fair request that by admitting additional claim of section 54B , the matter may be restored back to the file of AO for further verification of claim u/s 54B and further to consider the report of DVO and report of Government Registered Valuer. We find in case of Mitesh Impex [ 2014 (4) TMI 484 - GUJARAT HIGH COURT] held that Appellate Authorities have discretion to permit additional claim which was available when return was filed. Legal position that AO is not empowered to accept additional claim in absence of revised return though such discretion is vested with the Appellate Authority. Therefore, keeping in view of the fact that assessee has sold ancestral agricultural land and have claimed to have purchase another agricultural land and claiming exemption u/s 54B. Therefore, additional claim of assessee is admitted subject to verification of fact by AO. Considering the fact that report of DVO was not available at the time passing assessment order and CIT(A) has confirmed the action of AO. Therefore, matter is restored back to the file of AO to consider the report of DVO and the report of Government Registered Valuer and to pass fresh order in accordance with law. The assessee is at liberty to file objection, if any, against the report of DVO, if so desire. Needless to direct AO before passing the order afresh, the AO shall give reasonable opportunity of being heard to assessee and to file requisite as required and explanation and evidence as and when called for. As we have already admitted additional claim raised by assessee u/s 54B therefore, AO is also directed to consider the claim of assessee and after verification of fact pass order in accordance with law. Appeal of the assessee is allowed.

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• 2025 (4) TMI 1347
  Carry forward of business loss - whether the return of income was filed within the due date as prescribed u/s. 139(1), or it was filed beyond the due date prescribed u/s. 139(1) of the Act? - HELD THAT:- By clause (a)(ii) of Explanation 2 to Section 139(1), that when a person (other than a company) whose accounts are required to be audited under this Act i.e. Income-tax Act, 1961 or under any other law for the time being in force, the due date is 30th September of the assessment year. The word used is required to be audited under the 1961 Act or under any other law for the time being in force, the due date for filing of return of income is 30th September of the assessment year. Thus, once the Partner of such LLP which otherwise is not required to get its accounts audited vide first proviso to Rule 24(8), would be required to get its accounts audited vide second proviso to Rule 24(8) as the partners have decided to get its accounts audited even if it was not required to get its accounts audited vide first proviso, then in such case the same shall be audited in accordance with LLP Rules, 2009. Section 34(4) of The LLP Act, 2008 is also become relevant as it stipulates that the accounts of LLP shall be audited in accordance with such Rules as may be prescribed. Thus, once the partners of LLP invokes second proviso to Rule 24(8) then the accounts of such LLP shall be required to be audited in accordance with LLP Rules, 2009, and then the same shall satisfy the condition as is stipulated in Explanation-2 to Section 139(1) and the due date u/s 139(1) for filing return of income in the instant case shall be 30.09.2019. The assessee having filed the return of income on 17.09.2019, has filed the return of income within due date as prescribed u/s. 139(1), and keeping in view the provisions of section 139(3), the assessee is eligible to carry forward loss. Thus, the appeal of the assessee stands allowed.

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• 2025 (3) TMI 1473
  Assessment framed u/s. 153A/143(3) - documents found from the possession of third party held to be incriminating documents found from the premises of the assessee or not? - HELD THAT:- In the instant case no incriminating material was found from the assessee during the search and seizure proceedings and the material in form of statement of third person was relied based on some other search operation. Hence if at all such statement is sought to be relied upon against the assessee, then logically the AOshould have proceeded on the assessee under section 153 C of the Act and not under section 153A of the Act. Hence the addition made in assessee hands under section 153 A of the Act is deleted. Decided in favour of assessee.

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• Customs

• 2025 (4) TMI 1346
  Grant of anticipatory bail in a case for offence under Section 61 (2) of BNS and Sections 7, 7A, 8 and 12 of the Prevention of Corruption Act - prosecution alleged that the accused, a non-public servant, acted as a tout facilitating bribes to public servants for clearance of import-export consignments at the Inland Container Depot, Tughlakabad - HELD THAT:- The RC registered by CBI specifically names the accused/applicant. I have gone through the transcripts of audio recordings of conversation between the accused/applicant and some unknown person, which prima facie show his complicity in the crime. As further submitted by learned SPP, custodial investigation is necessary in this case in order to ascertain the identity of the person with whom the accused/applicant was talking, as depicted in the audio recordings and further, even voice sample of the accused/applicant is required to be taken. Besides, the explanation advanced on behalf of the accused/applicant for his not handing over his mobile phone to the Investigating Officer prima facie fails to inspire confidence. Keeping in mind the nature of offence and stage of investigation, this is not a fit case to grant anticipatory bail. Therefore, the application is dismissed.

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• 2025 (4) TMI 1345
  Refund of IGST - barred by time limitation or not - date of IGST payment and the date of refund application filing - exclusion of limitation period as directed by the Hon ble Supreme Court in Suo Moto Writ Petition [ 2020 (5) TMI 418 - SC ORDER] , due to the COVID-19 pandemic - HELD THAT:- As the normal period of limitation was till 30.03.2022 for filing of refund, whereas the appellant filed their refund application on 12.04.2022 with a delay of 13 days. The Hon ble Supreme Court directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purpose of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi judicial proceedings. It is also directed by the Hon ble Supreme Court that the balance period remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022. Therefore, refund application filed by the appellant was within time as the period is covered within second surge of COVID-19 cases, which was directed to be excluded by Hon ble Supreme Court, as above. Moreover, the direction issued by Hon ble Supreme Court was within the knowledge of public domain and it is surprising how the Commissioner (Appeals) was unaware of this direction. Conclusion - i) The refund application filed by the appellant was not barred by limitation due to the exclusion of the limitation period by the Supreme Court s order. ii) The Supreme Court s order excluding the period from 15.03.2020 to 28.02.2022 from limitation calculations applies to the refund application under Customs law. The impugned orders passed by Commissioner (Appeals) are liable to be dismissed. Accordingly, the impugned orders are dismissed and the appeals filed by the appellant are allowed.

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• 2025 (4) TMI 1344
  Denial of interest on seized traveller s cheques that were seized, encashed, and deposited by the Customs Department - HELD THAT:- The reason for encashing the travellers cheque and depositing the same in the Customs Department s account is not available in the case record, so as to justify disposal of the seized documents in the manner prescribed by the Central Government as contemplated in Section 110(1-A) of the Customs Act since those were not perishable or hazardous in nature and depreciation of their value with the passage of time would not even be a rare probability, as those were Dollars equivalent whose value has been consistently increasing over the years. It is also not understood as to why provisional release of those goods under Section 110-A was not made after obtaining adequate security and bond for the same. Therefore, encashment of those travellers cheque, converting them into Rupees and taking the encashed amount to the Respondent-Department s account can t be said to be free from arbitrariness, apart from the fact that those being not confiscated goods by that time, could have been kept in interest bearing account. In carrying-forward the judicial precedent set on the issue for decades and while going with the observation made in the above referred paragraph in Matta Paints and Hardware Store [ 2022 (12) TMI 93 - CESTAT NEW DELHI] judgment alongwith observation of the Tribunal that had the amount in question being kept in fixed deposit by the Appellant himself for all these years, it would have earned a handsome amount of interest and therefore, retention of the said interest could be considered as on unjust enrichment on the part of the Respondent-Department as well as deprivation of Appellant s right to his property, the following order is passed. Conclusion - The appellant is entitled to interest on the deposited amount from the date of deposit, less redemption fines and penalties, and including interest on the pre-deposited amount, payable within two months. Appeal allowed.

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• 2025 (4) TMI 1343
  Exemption form Basic Customs Duty under the notification dated 01.03.2005, as amended by the notification dated 17.03.2012 - imported digital still image video cameras - HELD THAT:- All the four Customs Appeals came up for hearing before a Division Bench of the Tribunal in M/S SONY INDIA PRIVATE LTD. [ 2025 (4) TMI 1247 - CESTAT NEW DELHI] . The impugned order dated 28.10.2016 that was impugned in all the four Customs Appeals was set aside and all the four Customs Appeals were allowed. It was held in the said case that The digital still image video cameras involved in the present Customs Appeals would, therefore, be entitled to exemption from basic customs duty in terms of the Notification dated 01.03.2005, as amended on 17.03.2012. The order dated 20.03.2018 passed by the Commissioner (Appeals) holding that the digital still image video cameras imported by the appellant would not be entitled to basic customs duty exemption under the notification dated 01.03.2005, as amended by the notification dated 17.03.2012 on the basis of the decision rendered by the Tribunal on 19.12.2017 would, therefore, have to be set aside and is set aside. Conclusion - The appellants are eligible to exemption from BCD under the said Notification 25/2005 CE dated 1.3.2005 as amended. The appeal is, accordingly, allowed.

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• PMLA

• 2025 (4) TMI 1342
  Money Laundering - seeking an extension of the interim Bail for a period of 60 days on the humanitarian grounds - it is held by High Court that two-week extension of interim bail was justified on humanitarian grounds, subject to existing bail conditions. HELD THAT:- It is not inclined to interfere with the impugned judgment and order. The Special Leave Petition is, accordingly, dismissed.

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• Service Tax

• 2025 (4) TMI 1341
  Refund of the wrongly paid service tax - rejection of claim for refund by applying Section 11B (1) of the Central Excise Act, 1944 - HELD THAT:- A perusal of the above provision shows that it deals with the claims for refund of service tax paid based on the exemptions provided under the Act of 1944. It does not deal with a situation where an assessee has paid the service tax under a mistaken impression of law or without realizing that a particular activity is exempted from service tax. In this regard, it is apposite to refer to the judgment of the Hon ble Supreme Court in the case of Mafatlal Industries Limited vs. Union of India [ 1996 (12) TMI 50 - SUPREME COURT] , which laid down the parameters for entertaining an application under Section 11B of the Act of 1944. Conclusion - The limitation prescribed under Section 11B of the Act of 1944 would not strictly apply to a claim for refund of service tax wrongly paid and a writ petition under Article 226 of the Constitution of India is maintainable. In such an event, the principles of restitution as provided under Section 72 of the Contract Act, 1872, is applicable and the respondent No. 3 is bound to refund it notwithstanding the delay in filing the application for refund. The impugned order is set aside - petition allowed.

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• 2025 (4) TMI 1340
  Classification of services - Tour Operators Service - Short-term accommodation service - activities undertaken by the appellant, a statutory authority managing the Anamalai Tiger Reserve - HELD THAT:- The fact remains that the activities of the appellant are clearly in terms of the provisions of WPA which is the governing Statute insofar as the Appellant-forest department is concerned. There is also a categorical finding that the appellant is charging fees as prescribed by the Government, which is also apparently accepted without there being any specific denial, by the First Appellate Authority or the Revenue in its grounds of appeal before the First Appellate Authority. Hence, the charging of the fees is clearly in terms of the statutory provisions only. There is also a categorical finding as to usage of the fees so collected which is also not disputed by the Revenue or in the impugned order. Thus, we find that the Board s clarification No.96-supra comes to the rescue of the Appellant. Conclusion - The appellant being a statutory body is not carrying out any activity of business, to be taxable under Tour operator service or under Short term Accommodation Service . There is also a clear observation in the impugned order insofar as the penalty is concerned that there is a prima facie doubt about the Taxability and that the appellant is a State Government Executive, the same logic would equally apply when it comes to invoking the extended period of limitation is concerned. Appeal allowed.

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• 2025 (4) TMI 1339
  Invocation of extended period of limitation under the proviso to section 73(1) of the Finance Act, 1994 - only reason for invoking extended period of limitation is that the audit had discovered that the appellant had availed CENVAT credit without first paying its sub-contractor - violation of Rule 4(7) of the CENVAT Credit Rules, 2004 (CCR) by availing CENVAT credit without first making payment for the input services received from its sub-agent. Extended period of limitation - HELD THAT:- The service tax Returns need to be scrutinized by the Range Officer. Had the Range Officer done so the alleged irregularity in filing CENVAT credit would have been noticed. The fact that the Range Officer had not done his job and the audit had pointed out the discrepancies would only show that the Range officer was negligent in his duty. It does not show that the appellant had suppressed any facts. The Range Officer had the duty to scrutinize the Returns and the power to call for any documents or records for the purpose. What is evident from the records is that the audit had done what the Range Officer should have done. If at all there is any irregular availment of CENVAT credit and the demand was not issued within the normal period of limitation, it is purely on account of the negligence by the Range Officer - the entire demand needs to be set aside on the ground of limitation itself. Violation of Rule 4(7) of the CENVAT Credit Rules, 2004 (CCR) by availing CENVAT credit without first making payment for the input services received from its sub-agent - HELD THAT:- Rule 4 (7) of CCR only requires the payment to be made before availing the CENVAT credit and it does not indicate that the payment should be made in any particular manner by cheque or through cash or through account adjustments. It is a normal practice when two business have a continuing relationship to maintain a running account with each other and make adjustments instead of paying cash or drawing a cheque every time. Since the show cause notice alleged that the appellant had availed CENVAT credit without actually paying the sub-agent, it was for the show cause notice to have examined the records and establish this fact with evidence. The show cause notice did not establish with any evidence that the appellant had not paid its sub-agent before availing CENVAT Credit. The appeal needs to be allowed and the impugned order is not sustainable either on merits or on limitation - the impugned order is set aside - appeal allowed.

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• 2025 (4) TMI 1338
  Extended period of limitation - liability to pay service tax under the reverse charge mechanism on the supply of manpower services received from sub-contractors, as per N/N. 30/2012-ST - revenue neutrality - HELD THAT:- Merely because the appellant could have availed CENVAT credit the liability to pay service tax under the reverse charge mechanism does not get extinguished. However, as far as the remedy available to the Revenue to recover service tax not paid or short paid under section 73 of the Finance Act is concerned, it has a limitation of time. The normal period of limitation under section 73 was one year from 1994 up to 28.05.2012. From 28.05.2012 up to 14.05.2016, the limitation was 18 months. From 14.05.2016, the limitation was increased to 30 months. The show cause notice was issued on 28.01.2016 and the limitation was 18 months. The period for which the show cause notice was issued is July, 2012 to December, 2013. The show cause notice was clearly issued beyond 18 months on 28.01.2016. What is evident from this proviso is that the intent to evade must be established in order to invoke extended period of limitation. This is a revenue neutral case where the appellant had to pay service tax with one hand (if the Revenue s contention is accepted) but it could have immediately availed CENVAT credit so paid under reverse charge mechanism. Therefore, there can be no intention to evade payment of service tax in this case. Therefore, extended period of limitation could not have been invoked and it was wrongly invoked in the present case. The entire demand, therefore, is clearly barred by limitation and hence the impugned order cannot be sustained. Conclusion - The intent to evade must be established in order to invoke extended period of limitation. This is a revenue neutral case where the appellant had to pay service tax with one hand but it could have immediately availed CENVAT credit so paid under reverse charge mechanism. Therefore, there can be no intention to evade payment of service tax in this case. The impugned order is set aside and the appeal is allowed.

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• 2025 (4) TMI 1337
  Classifcation of services - to be classified under Management, Maintenance or Repair Service, Manpower Recruitment and Supply Agency Service, or Erection, Commissioning or Installation Service? - Extended period of limitation. Classification of service - HELD THAT:- In view of the findings recorded by the Adjudicating Authority and the grounds of appeal taken by the appellant, the Commissioner (Appeals) was required to examine whether the service in question would be covered under the category of Management, Maintenance or Repair Service or not. On the contrary, the learned Commissioner erroneously formulated the question whether the work done of labour supply for ARC street light, maintenance under Work Orders dated 3.8.2005 and 13.02.2007 are covered under the Management, Maintenance or Repair or Manpower, Recruitment Supply Agency services. The question formulated and the findings recorded by the Appellate Authority are, therefore, erroneous as the scope of the appeal was limited to classification under Management, Maintenance or Repair Service . The order of the Commissioner (Appeals) set aside to the extent it had classified the services rendered in relation to the Work Orders dated 3.8.2005 and 13.02.2007 within the purview of Manpower Recruitment and Supply Agency Service and remand the issue of classification to be reconsidered. The Commissioner (Appeals) may also examine the issue of taxability of the services rendered with reference to the Work Orders dated 20.08.2009 and 06.09.2010 with reference to the provisions of the Circular - The appellant is entitled to the benefit of cum-tax duty and the matter is remanded to the Commissioner (Appeals) for quantification of duty element granting the benefit of cum-tax duty. Extended period of limitation - HELD THAT:- The law on the issue of invocation of extended period of limitation has been settled that something positive other than mere inaction or failure on the part of the assessee is proved. Conscious or deliberate withholding of information by the assessee is necessary to invoke the extended period of limitation. Without multiplying too many decisions, we would refer to the case of Savira Industries versus Commissioner of Central Excise, Chennai II [ 2015 (9) TMI 515 - CESTAT CHENNAI] , where it was held held that the assessee was under bonafide belief that mere cutting, welding of steel pipes and sheets did not amount to manufacture as no new commodity emerges and there was no marketability and therefore would attract excise duty. In the circumstances, the demand was held to be hit by limitation - the invocation of the extended period in the present case is not justified in the absence of any strong allegation or positive act, pointing towards fraud, collusion, or any wilful mis-statement or suppression of facts with intent to evade payment of duty. In view thereof extended period is not invokable and no penalty is imposable on the appellant. Conclusion - Appeal remanded to the Commissioner (Appeals) to re-consider the issues as follows:- 1) Whether the services rendered in respect of Work Orders dated 3.8.2005 and 13.02.2007 are classifiable under Management, Maintenance or Repair Service , as defined under Section 65(64) of the Act. 2) Whether the services with respect to Work Order dated 20.08.2009 and 06.09.2010 are classifiable under Erection, Commissioning or Installation Service as defined under Section 65(39a) of the Act and whether they are entitled to the benefit under the Circular dated 24.05.2010. 3) Re-quantify the duty element after granting the benefit of cum-tax duty. Appeal allowed by way of remand.

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• 2025 (4) TMI 1336
  Recovery of Cenvat Credit along with applicable interest and penalty - Input service - admissibility of Credit availed on service tax paid for the design and construction of an RCC water storage tank by M/s KMV Projects Ltd. - HELD THAT:- The input service on which the impugned credit was availed by M/s GMR Hyderabad International Airport Ltd., for construction and works contract services which are covered in the exclusion clause of the input service definition under Rule 2(l) of the Cenvat Credit Rules, 2004. Since both the contracts are composite supplies they fall under exclusion clause of input service definition Rule 2(l) prohibits availment of Cenvat Credit of service tax paid on works contract services when the same are used to construct a building or civil structure or when such services are used to lay down the foundation or making a structure to support capital goods. Service provided by M/s KMV Projects Ltd., is design and publication of storage tank which is recognised as capital goods under Rule 2(a)A of Cenvat Credit Rules, 2004 and hence they eligible for the credit. Although, storage tank is included in the definition of capital goods, but it is not the case that the appellant party is availing capital goods credit on storage tank - The works contract service itself is an input service and is excluded from the definition of input service vide Rule 2(l) of Cenvat Credit Rules, 2004. The nature of services provided is not construction of works contract and that M/s Enerpark Energy Pvt Ltd., have charged full rate of service tax and deposited the same under erection, Commissioning and Installation Services. As per the description of services mentioned in the said P.O. as Design, engineering, construction, erection, commissioning and the description clearly mentions works of foundation of main control room, foundation of inverter room, foundation of transformer, structure foundation, completion of internal road, completion of rain water drain etc. The above services are in the nature of construction services/services portion in the execution of works contract, used for construction of civil structure or laying foundation for capital goods, which are specifically covered in the exclusion clause of the input service definition. The Department s case is that the Adjudicating Authority had dropped the demand for recovery of irregular Cenvat Credit of Rs. 4,71,885/- on the basis of certificate of Chartered Accountant without proper examination of other documents such as ST-3 returns and Cenvat Credit Ledger. The certificate issued by a Chartered Accountant which only corroborative evidence as held by Hon ble High Court of Karnataka in Aurangabad Vs Toyota Kirloskar Motors [ 2009 (12) TMI 529 - KARNATAKA HIGH COURT] which was upheld by the Apex Court in TOYOTA KIRLOSKAR MOTOR PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2011 (3) TMI 1362 - SUPREME COURT] . In the light of above decision, Commissioner remanded the matter for further examination is just and proper. Conclusion - The works contract service itself is an input service and is excluded from the definition of input service vide Rule 2(l) of Cenvat Credit Rules, 2004. The Commissioner (Appeals) passed an order based on law and fact both. Therefore, no any interference requires in the impugned order and appeal is liable to be dismissed - appeal dismissed.

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• 2025 (4) TMI 1335
  Validity of SCN - SCN issued relying on the third party data - SCN failed to quantify the service tax amount paid by the appellant - denial of CENVAT Credit on the ground of not filing Service Tax-3 returns - HELD THAT:- Adjudicating Authority as well as Commissioner of Central Tax (Appeals-I) dis-allowed the Cenvat Credit to the appellant on the ground of not filing Service Tax-3 returns which happens due to change of auditor of the appellant company and inspite of several requests Department not provided login user name and password in time. Due to this reason, the appellant was unable to file returns for reasons beyond their control. In these circumstances, dis-allowance of credit to the appellant is not just proper and legal. The non-filing of returns is not intentional but due to password problem which is beyond the control of the appellant. Therefore, denial of credit to the appellant is not just and proper. Co-ordinate Bench, Ahmadabad in the case of Sun Outdoos Vs CCE and ST, Vadodara-I [ 2024 (11) TMI 263 - CESTAT AHMEDABAD] wherein on the issue of benefit of Cenvat Credit on the ground of non-filing of ST-3 returns held that, as regards denial of credit on the ground of non-filing of ST-3 returns, we are of the view that merely on non-filing of ST-3 return, the assessee cannot be deprived of their statutory benefit of Cenvat Credit as provided under the Statute. Conclusion - Due to technical fault and inspite of repeated letters to Department, not provided in time, user name and password, appellant could not file the ST-3 returns in time. Appellant cannot deny to take credit of Cenvat. Show cause notice was failed to quantify the service tax amount. Adjudicating Authority as well as Commissioner of Central Tax (Appeals-I) not considered appellant s reply properly. Appeal allowed.

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• 2025 (4) TMI 1334
  Extended period of limitation - whether SCN was hit by limitation? - Wrongful availment of Cenvat credit as per Rule 6 read with Rule 14 of Cenvat Credit Rules, 2004 - HELD THAT:- Extended period of limitation of upto 5 years could be invoked, if the non-payment of service tax was on account of fraud or collusion or willful mis-statement or suppression of facts or violation of the provisions of the Act or Rules with an intent to evade payment of service tax. This limit applies to recovery of Cenvat credit as well. As per Section 70 of the Finance Act, the assessee is required to self-assess service tax due on the services provided by him and to furnish to the Superintendent of Central Excise a Return in ST-3 format. As per Section 72 of the Finance Act, if the assessee fails to furnish the Return under Section 70 or having made the Return or fails to assess the tax in accordance with the provisions of the Finance Act and Rules made thereunder, the Central Excise Officer may require the assessee to produce such accounts, documents or the evidence as he may deem necessary and after taking into all relevant material he shall, by an order in writing carry out the best judgment assessment under Section 72 of the Finance Act - If the officer fails to complete the scrutiny and raise a demand within the period and the demand gets barred by limitation, the responsibility for that rests squarely on the officer who failed in his duty. Neither the fact that the assessee is operating the self-assessment procedure nor that it had failed to assess the tax liability etc. correctly means that the assessee had committed a fraud or colluded or willfully mis-stated or suppressed any fact or violated any provisions of the Act or Rules with an intent to evade. If any of these factors are alleged they should be established in the SCN and in the order. All that is evident from the SCN and from the order is that the assessee furnished it s returns on time as required and it is the officer who failed to scrutinize the returns in time and took too long to scrutinize the returns pertaining to 2004-2005 to 2007-2008 much beyond the period of limitation. Therefore, if there is any loss of revenue on this count, the responsibility for that rests clearly on the officer who failed to scrutinize the returns in time and raise a demand. It does not rest on the appellant/assessee. Conclusion - The entire demand is hit by limitation and on this ground alone, it needs to be set aside. It is not necessary for us to examine the merits of the case. The impugned order is set aside - the appeal is allowed.

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• 2025 (4) TMI 1333
  Scope of exception by virtue of the degree issued by the University of Bradford, U.K. which was also recognized by the Association of Indian Universities and IGNOU - fees collected by the respondent for conducting courses leading to degrees awarded by a foreign university, recognized by the Association of Indian Universities and Indira Gandhi National Open University - Commercial Training or Coaching Services or not - demands for the entire period from 01.09.2009 to 31.03.2016 - HELD THAT:- W.e.f. 01.07.2012 services by way of education as a part of curriculum for obtaining the qualification recognized by any law for the time being in force has been put in the negative list under Section 66D (1) (ii). This is same as the exclusion from the definition of Commercial Training or Coaching Centre prior to 01.07.2012. Therefore, we find there is no effective change in the law. Before 01.07.2012 the services were excluded from the definition of Commercial Training and Coaching Centre . After 01.07.2012, they have been excluded by being part of the negative list. On the facts of the case, it is un-disputed that the degree was being issued by the University of Bradford, U.K. It is also stated in the appeal itself that this degree is also recognized by the Association of India Universities and also by the Indira Gandhi National Open University. The Commissioner has correctly followed decision of this Tribunal dated 01.11.2017 which has also attained finality as Revenue did not file any appeal against it. The Commissioner was correct in dropping the demand and the Committee of Chief Commissioners erred in finding the order not legal and proper. Conclusion - The respondent s services are not liable to service tax for the entire period covered by the show cause notices, both before and after 01.07.2012. Appeal dismissed.

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• 2025 (4) TMI 1332
  Levy of service tax - inclusion of value of banker/fuel and water delivered, while supplying the vessel by the appellants to their charterers, in determining the assessable value for discharging service tax under Supply of Tangible Goods for Use (STGU) service - period covered in the SCN is from October, 2009 to September, 2014 - HELD THAT:- The service tax is liable to be paid in respect of taxable services provided by one person i.e., service provider to the other person i.e., service receiver. It is not in dispute that the appellants-vessel owner is the service provider and their customer-charterers are the service receiver, in respect of the taxable service. Further, it also transpires that for the period relating to the pre-negative list regime i.e., prior to 1-7-2012, the taxability of service tax was determined in terms of coverage of an activity under the service tax net by defining taxable services under section 65(105) ibid, which enumerated each of the specified services. For the period post-negative list regime, the category of services hitherto defined under the erstwhile regime were merged under a common phrase i.e., service as defined under section 65B(44) ibid, which was brought into effect from 1-7-2012. The relevant entry of the specific taxable service in the present case is 65(105)(zzzzj) ibid. Subsequent to introduction of Negative list regime from 01.07.2022, the services that are subject to levy of service tax have been explained in Section 66B ibid. In the agreement entered into by the appellants, it clearly states that the services provided are for hiring of the vessel for carrying petroleum products by the vessel, and such services shall start from the time of delivery of the vessel. It is also brought out clearly in the above agreement that the charterer pays for the fuel, water during the period of hiring of the vessel and the charges paid for the services of hiring of vessel include these. Since the vessel has to be moved to the place of delivery as agreed between the parties, after its last charter period is completed, the cost of fuel/bunker contained therein and water during the period of making the vessel ready for delivery for starting of service is required to be incurred by the appellants, which is separately reimbursed by charterers at actuals. It is clearly brought out that such activity of delivering the vessel is not part of the services, and therefore the fuel/bunker and water charges, incurred by the appellants, prior to the delivery of the vessel, in no case would become part of the services agreed upon between the parties. Therefore, the value of the bunker/fuel and water, which do not form part of the taxable services cannot be added to the taxable value of the services. The issue involved in this appeal was decided in an identical facts of the case by the Co-ordinate Bench of the Tribunal in the case of Express Engineers Spares Private Limited [ 2022 (1) TMI 564 - CESTAT ALLAHABAD] by holding that supply of goods to customers would not amount to STGU for the period prior to 30.06.2012, or a declared service from 01.07.2012 to attract levy of service tax. It is not in dispute that the appellants have paid VAT on the bunker/fuel and there is no VAT on water. As these goods are supplied during the process of delivery of the vessel to the charterers, distinct from the fuel and water supplied during the charter period, such supply of the goods for enabling the delivery of the vessel cannot be brought under the purview of the service contract entered into between the appellants and their customers-charterers. Therefore, on the facts and circumstances of the present case, these cannot be brought under the scope of the supply of STGU services by the appellants. Conclusion - The reimbursement of bunker/fuel and water charges, which constitute supply of goods with payment of VAT, cannot be included in the taxable value of service under STGU service. Appeal allowed.

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• 2025 (4) TMI 1331
  Taxability - reimbursement received by the appellants from the automobile manufacturer towards the cost of spare parts used in free services - sale of goods or service - HELD THAT:- It is an admitted fact on record that on the value of the parts used for replacement by the authorized service station, VAT was paid by the appellants, considering the same as sale of goods and the liability for service tax on the labor component was also discharged by the appellants, treating the same as service. Since, the spare parts used for replacement in the authorized service station was considered as a sale transaction and appropriate VAT amount was paid by the appellants, the said transaction cannot be considered as provision of taxable service, for the purpose of levy of service tax thereon. The appellants in the present case, had availed cenvat credit of service tax paid on the Mandap Keeper service, which were utilized by them for making of temporary shed for providing uninterrupted servicing of vehicles during the rainy season. Since, the said disputed service was used for provision of the output service, it cannot be said that such service is not confirming to the definition of input service, for the purpose of taking of cenvat credit thereon. In an identical situation, the Tribunal in the case Endurance Technologies Pvt. Ltd. V/s. Commr. of C.Ex., Aurangabad [ 2013 (8) TMI 601 - CESTAT MUMBAI] has allowed the cenvat credit taken on the Mandap Keeper service. Conclusion - i) The appellants are not liable to pay service tax on the reimbursement received for spare parts from the manufacturer. ii) The appellants are entitled to cenvat credit on the Mandap Keeper service utilized for their output service. There are no merits in the impugned order, insofar as it has upheld confirmation of the adjudged demands on the appellants - appeal allowed.

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• 2025 (4) TMI 1330
  Non-payment of service tax on multi service activities income and on other income - business auxiliary services - period July, 2003 to September, 2004 - facts and documents not considered properly - violation of principles of natural justice - HELD THAT:- On reading of clause (iv) in the definition of Business Auxiliary Service, it transpires that any incidental or auxiliary support service mentioned therein in relation to clauses (i) to (iii) alone can be considered for the purpose of inclusion in the definition of BAS inasmuch as the said definition uses the expression means and includes , thereby providing comprehensive meaning that only those services which are incidental or auxiliary to the services categorized at (i) to (iii), would only qualify for consideration. The detailed activities undertaken by the appellants are mentioned at paragraph 9 in the impugned order. On careful examination of such activities performed by the appellants, we find that the same cannot considered as incidental or ancillary to the services itemized at clauses (i) to (iii) in the definition provided under Section 65(19) ibid. However, the case of the appellants falls under the amended definition of BAS w.e.f. 10.09.2004. In view of the fact that the activities undertaken by the appellants upto the period 09.09.2004 were not covered under the definition of BAS, the appellants were not liable to pay any service tax under such taxable category. Further, the appellants submission that they had paid the service tax for the period post 10.09.2004 on multi services activities and on the miscellaneous income, were also not considered in their proper perspective inasmuch as the benefit of tax amount already paid to the government has not been considered in the impugned order. Conclusion - The learned adjudicating authority has confirmed the entire demand, proposed for recovery in the SCN dated 21.04.2009, without proper appreciation of the statutory provisions vis-`a-vis the activities undertaken by the appellants. The matter should be remanded to the learned adjudicating authority for passing of de novo adjudication order, in quantifying actual tax liability, which was required to be paid by the appellants - Appeal allowed by way of remand.

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• 2025 (4) TMI 1329
  Invocation of extended period of limitation - non-payment of service tax on Manpower Recruitment Supply Agency Service during the period from 16.06.2005 to 31.01.2007 - HELD THAT:- There is no allegation against the appellant that he had collected service tax from the service recipient and had retained it without payment to the Govt. Exchequer. On the contrary, the appellant who had admitted his ignorance regarding the levy of service tax on his activities has upon being informed by the audit, endeavored to discharge the liability and had also discharged the same along with applicable interest well before issuance of the show cause notice. It is seen that the show cause notice, while making an allegation that the assessee had indulged in the contraventions of failure to assess the tax due, furnish ST-3 returns and pay the tax due with willful intention to evade payment of duty has not provided any evidence of any positive act done by the appellant with deliberate intention to evade payment of duty, thereby rendering the invoking of extended period of limitation untenable. It is settled law that a mere mechanical reproduction of the language of the proviso to Section 73(1) of the Finance Act, 1994 does not per se justify invocation of the extended period of limitation. A mere ipse dixit that the noticee wilfully suppressed the material facts with intent to evade payment of service tax is not sufficient and the burden to let in evidence of malafide rests heavily on the Department when it makes allegations of malafide. Conclusion - i) Extended limitation under Section 73(1) cannot be invoked without concrete evidence of willful suppression or fraud. ii) Payment of service tax and interest before issuance of show cause notice precludes issuance of such notice under Section 73(3). iii) Penalties under Sections 77 and 78 are not justified in cases of bona fide ignorance and voluntary compliance upon detection. Appeal disposed off.

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• 2025 (4) TMI 1328
  Condonation of delay of 149 days in filing the appeal before the Appellate Tribunal - sufficient cause for delay or not - delay is because the order was not delivered to the appellant - HELD THAT:- The order was delivered to the consultant due to which there was delay in appeal. This submission states that the appeal was filed by Chartered Accountant Shri Akshay Jain, Partner of Shri Subhash Chand Jain, Anurag and Associates before the Commissioner (Appeals). It further states that from the acknowledgement given by the appellant it is clear that for delivery of the order, the consultant was called who, after getting the written acknowledgement from the appellant received the order on 30.06.2023 had not informed the appellant. It is untenable for the appellant to give an acknowledgement on her letterhead under her signature (even if it was delivered through her consultant) and then claiming to be not aware that the order was received especially considering that she had pursued her remedy before the Commissioner (Appeals). According to the impugned order, Shri Subhash Jain (not Shri Akshay Jain) had represented the appellant before the Commissioner (Appeals). The show cause notice was not served on the appellant. It is not found how the show cause notice is relevant and its absence had caused the delay in filing the appeal before this Tribunal when the appellant had filed an appeal before Commissioner (Appeals) and had received and acknowledged the impugned order. The appellant paid the demand of tax with interest now under the new GST law. This submission has no relevance to the delay in filing the appeal - The appellant has a good case on merits. The merits of the case are irrelevant for deciding about the delay in filing the appeal. Conclusion - The appellant had not provided sufficient justification for the delay in filing this appeal. Both the applications for condonation of delay are rejected. Appeal dismissed.

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• 2025 (4) TMI 1327
  Denial of benefit of abatement provided under N/N. 32/2004-S.T. dated 03.12.2004 - 75% abatement of freight paid to GTA under N/N. 32/2004-S.T. dated 03.12.2004 is available only to the GTA or to the appellant which has discharged the Service Tax under reverse charge mechanism under Rule 2(1)(d)(v) of the Service Tax Rules, 1994 - extended period of limitation - HELD THAT:- The said issue has been examined by the Tribunal in the case of Sandoz P. Ltd. v. Commissioner of C.Ex., Raigad [ 2014 (6) TMI 347 - CESTAT MUMBAI] where it was held that We observe that in this case appellant availed goods transport agency service and paid the Service Tax as per the Service Tax Rules, 1994 as service recipient. Although there is no endorsement on the consignment that the transporter has not availed Cenvat credit but it is implied that when the transporter has not paid any Service Tax, question of availment of input/input Service Tax credit does not arise. In view of these observations, we do not find any merit in the impugned order. Therefore, impugned order is set aside and the appeal is allowed with consequential relief, if any. Also, C.B.E.C. vide M.F. (D.R.) 37B Order No. 5/1/2007-S.T. dated 12.03.2007 has clarified that such abatement is available not only to the GT, but any person who is made liable to pay Service Tax on GTA services. The appellant is entitled to 75% of abatement on freight paid to GTA under Notification No. 32/2004-S.T. dated 03.12.2004. Extended period of limitation - HELD THAT:- It is also observed that the appellant had availed the abatement during the period from February 2005 to February 2006 while the Show Cause Notice was issued on 30.03.2010, which is beyond the normal period of limitation. There is also no evidence on record to indicate suppression of facts on the part of the appellant. In these circumstances, whole of the demand is barred by limitation. Thus, on the ground of limitation also, the impugned demand is not sustainable. Conclusion - i) The appellant is entitled to the 75% abatement on freight paid to GTA under Notification No. 32/2004-S.T. dated 03.12.2004, despite paying service tax under reverse charge. ii) There is also no evidence on record to indicate suppression of facts on the part of the appellant. In these circumstances, whole of the demand is barred by limitation. Appeal allowed.

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• 2025 (4) TMI 1326
  Levy of service tax - inter-division unit transfer and Inter Factory Demand (IFD) charges paid by one division of a company to another division within the same legal entity for use of infrastructure facilities - CENVAT credit - liability to pay 5% of the value of exempted goods as per Rule 6(3)(i) of the Cenvat Credit Rules, 2004 - non-maintenance of separate accounts for taxable and exempted services. Levy of service tax - inter-division unit transfer and Inter Factory Demand (IFD) charges paid by one division of a company to another division within the same legal entity for use of infrastructure facilities - HELD THAT:- It is observed that Helicopter division and the other units of the Appellant who paid IFD charges for use of infrastructure are from same legal entity. Thus, we observe that services provided by helicopter division to other units of HAL amounts to self-service and service tax is not applicable on the services provided to self. Therefore, the demand of service tax confirmed in the impugned order on the IFD charges received by one division of HAL from another division of HAL is not sustainable and hence we set aside the same. Demand of payment of 5% of the value of exempted goods - HELD THAT:- The Appellant has availed Cenvat credit on input services exclusively used in providing taxable service (i.e. Management, Maintenance or Repaid Services) and no credit has been availed relating to exempted goods. It is observed that the Appellant has maintained separate records for availing Cenvat credit for provision of taxable services. There is no contrary finding available on record. Thus, the Appellant have satisfied the condition of maintenance of separate records as required under Rule 6 of CCR, 2004. Therefore, the Appellant is not required to pay any amount at rate of 5% on exempted goods under Rule 6(3)(i). Accordingly, the demand confirmed on this count in the impugned order is not sustainable, and hence the same is set aside. Demand of interest and penalties - HELD THAT:- Since, the demands confirmed in the impugned order are not sustained, the question of demanding interest and imposing penalties does not arise - the entire demand is made on the basis of documents shared by the Appellant/ PSU, and therefore, there is no suppression with an intent to evade payment of tax established in this case. Accordingly, no penalty imposable under section 78 of the Finance Act, 1994 and hence the same is set aside. Conclusion - i) Helicopter division and the other units of the Appellant who paid IFD charges for use of infrastructure are part of same legal entity. Thus, services provided by helicopter division to other units of HAL amounts to self-service and Service Tax is not applicable. ii) The Appellant has satisfied the condition of maintenance of separate records as required under Rule 6 of CCR, 2004. Therefore, the Appellant is not required to pay any amount at rate of 5% on exempted goods under Rule 6(3)(i). iii) There is no suppression with an intent to evade payment of tax established in this case. Accordingly, no penalty is imposable under section 78. Appeal allowed.

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• 2025 (4) TMI 1325
  Failure to pay Service Tax - contravention of provisions of Section 88(1) of the Finance Act, 1994 - Commercial Training of Coaching service - levy of penalty u/s 78 of FA - invocation of Extended period of limitation - HELD THAT:- If the assessee can show that the service tax could not be paid due to their bonafide mistake in time by invoking Section 80 of the Finance Act,1994, the penalty can be waived. In this case, the respondent has showed their bonafide that they did not receive the payment from the clients for providing services and that is why, they could not pay the service tax in time. In that circumstances, it is observed from the audited balance sheet as well as in the books of accounts that income figures under sales of M/s Royal for amounting to Rs.1,38,67,081/- has been included while calculating the taxable value of service tax, if investigated properly, it should not have been included. Further, the report from Hyderabad Service Tax Division, confirmed payment of service tax by the Sub-contractor and the respondent discharged the said duty against their bills raised by M/s Tera Software Limited. It was also found that M/s Swathy Smart Cards Hi-Tech (P) Limited also paid service tax of Rs.6,07,939/- on work order received directly from the respondent and the respondent has also discharged the service tax. The adjudicating authority has rightly invoked the provisions of Section 80 of the Finance Act, 1994 and refrained from imposing any penalty under Section 78 of the Act. There are no infirmity in the impugned order by dropping penalty under Section 78 of the Finance Act, 1994. There are no merit in the appeal filed by the Revenue, the same is dismissed.

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• Central Excise

• 2025 (4) TMI 1324
  Exemption /effective rate for goods falling under Chapter Heading Nos.84 to 98 of of the Central Excise Tariff Act, 1985 under N/N. 6/2006-CE dated 01.03.2006 - Clearance of goods without payment of duty to M/s.Nagarjuna Thermal Power Project, Udipi, Karnataka for setting up of a Mega Power Project - Condonation of delay of 309 days in filing the appeal which has not been satisfactorily explained - It was held by CESTAT that Thus, the denial of exemption is without any legal or factual basis. The appellant is eligible for exemption under Notification No.6/2006-CE dated 01.03.2006. HELD THAT:- There are no good reason to interfere with the impugned order dated 01-03-2024 passed by the Customs Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai. The appeal is, therefore, dismissed on the ground of delay as well as on merits.

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• 2025 (4) TMI 1323
  Condonation of gross delay of 246 days in filing the petition which has not been satisfactorily explained - release of fixed deposits seized from the petitioner and the company - it was held by High Court that such goods and assets be released in favour of the petitioner forthwith along with statutory interest - HELD THAT:- There is a gross delay of 246 days in filing the petition which has not been satisfactorily explained. There are no reason to interfere with the impugned order passed by the High Court - SLP dismissed.

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• 2025 (4) TMI 1322
  Prayer for a declaration to the effect Rule 8(4) of the Central Excise Rules, 2002 and 2001 respectively are inconsistent with Rules 3 and 4 of Cenvat Credit Rules, 2001 - HELD THAT:- Since there is no dispute on the position that the above reasoning would apply on all fours to the challenge in the present case as well, Rules 8(4) of 2001 and 2002 Central Excise Rules also, as a consequence, will be liable to be set aside. A portion of the demand thereunder would stand covered by the decision that are taken in the Writs of Declaration that have been allowed. To this extent, the demand under order-in-original dated 16.05.2005 and recovery notice dated 24.06.2004 are set aside. Since the Department is agreeable to a hearing of the above afresh, the petitioner is directed to appear before 1st respondent, who now carries the designation The Commissioner of Central Excise, Office of the Commissioner of CGST and Customs, Central Excise and Service Tax, No.1, Foulk s Compound, Anai Road, Salem 636 001 on 17.04.2025 at 11 a.m. without expecting any further notice in this regard. Petition disposed off.

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• 2025 (4) TMI 1321
  Refund of Education Cess, Secondary Higher Education Cess and Krishi Kalyan Cess - transitional provisions of the CGST Act, 2017 - applicability of amendment to Section 140(1) of the CGST Act, 2017, which excludes cesses from the definition of eligible duties and taxes for transitional credit - HELD THAT:- Definition of eligible duties and taxes as per the explanation 3 under Section 140 of the CGST Act was amended with retrospective effect from 01.07.2017 whereby it is specified that Cesses are excluded from the definition of eligible duties and taxes. Thus, the credit is ab initio not available for utilization for GST. In view of the above, Cesses are not be transmitted through Tran -1 as per the transitional provisions specified under CGST Act. As the amount of Cenvat Credit balance of Education Cess Secondary Higher Education Cess was included in the carried forward amount by the appellant as on the appointed day i.e 01.07.2017 in terms of Section 142(3) of CGST Act, 2017 refund of the same is not admissible to the appellant. The Cesses are excluded by adding explanation 3 in the Section of the 140 of The Central Goods and Services Tax Act, 2017 from definition eligible duties and taxes . The credit is not available as refund. Hon ble Supreme Court, different Hon ble High Courts and CESTAT Benches including this Bench held that Education Cess and Secondary Higher Education cess is not refundable as discussed supra. Therefore, there are no legal or factual infirmity in the Order-in-Appeal. Conclusion - Refund of Education Cess, Secondary Higher Education Cess, and Krishi Kalyan Cess credits carried forward under the pre-GST regime is not admissible under the CGST Act, 2017 transitional provisions or the existing law. There is no error in the order of the Commissioner (Appeals). Therefore, appeal is liable to be dismissed.

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• 2025 (4) TMI 1320
  Refund of Education Cess, Secondary Higher Education Cess and Krishi Kalyan Cess - transitional provisions of the CGST Act, 2017 - applicability of amendment to Section 140(1) of the CGST Act, 2017, which excludes cesses from the definition of eligible duties and taxes for transitional credit - HELD THAT:- Definition of eligible duties and taxes as per the explanation 3 under Section 140 of the CGST Act was amended with retrospective effect from 01.07.2017 whereby it is specified that Cesses are excluded from the definition of eligible duties and taxes. Thus, the credit is ab initio not available for utilization for GST. In view of the above, Cesses are not be transmitted through Tran -1 as per the transitional provisions specified under CGST Act. As the amount of Cenvat Credit balance of Education Cess Secondary Higher Education Cess was included in the carried forward amount by the appellant as on the appointed day i.e 01.07.2017 in terms of Section 142(3) of CGST Act, 2017 refund of the same is not admissible to the appellant. The Cesses are excluded by adding explanation 3 in the Section of the 140 of The Central Goods and Services Tax Act, 2017 from definition eligible duties and taxes . The credit is not available as refund. Hon ble Supreme Court, different Hon ble High Courts and CESTAT Benches including this Bench held that Education Cess and Secondary Higher Education cess is not refundable as discussed supra. Therefore, there are no legal or factual infirmity in the Order-in-Appeal. Conclusion - Refund of Education Cess, Secondary Higher Education Cess, and Krishi Kalyan Cess credits carried forward under the pre-GST regime is not admissible under the CGST Act, 2017 transitional provisions or the existing law. There is no error in the order of the Commissioner (Appeals). Therefore, appeal is liable to be dismissed.

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• 2025 (4) TMI 1319
  Excisability - classification of Refined Bleached Deodorized Palm Stearin (RBD) and Hydrogenated Palm Stearin (HPS) - to be classified under Subheading Nos. 1511 9090 and 1516 2099 respectively or under Sub-heading Nos. 3823 1112 and 3823 1190 respectively? - Extended period of limitation - HELD THAT:- The CBEC in the Circular No. 81/2002-Customs dated 03.12.2002 has classified Palm Stearin under Chapter heading 15.11, when the same is obtained through fractionation process and classified the same under Chapter heading 38.23, when obtained through the Hydrolytic splitting process. Since, the by-products were obtained by the appellants through the fractionation process, they had claimed the classification of the goods under Chapter 15, which is in consonance with the circular dated 03.12.2002. With regard to the dispute in classification of the subject goods, this Tribunal, in the case of Gokul Enterprises [ 2008 (11) TMI 135 - CESTAT AHMEDABAD] and Jocil Ltd. [ 2009 (2) TMI 306 - CESTAT BANGALORE] has taken the view that the product should appropriately be classifiable under Chapter 15. However, the classification dispute in the case of Jocil Ltd. was differed with by the Hon ble Supreme Court in the case of Jocil Ltd., by holding that the Palm Stearin to be classifiable under Chapter 38. Since, the classification issue was finally resolved by the Hon ble Supreme Court in the case of Jocil Ltd., the appellants had started paying the Central Excise duty, suo moto, w.e.f. April 2011. The period in dispute, involved in the present appeal is from November 2009 to March 2011. The Show Cause Notice (SCN) was issued by the department to the appellants on 23.03.2014, seeking for confirmation of the duty demand. The provisions for recovery of non-levied, non-paid, short levied or short paid duties are contained in Section 11A of the Central Excise Act, 1944 - On reading of the above quoted statutory provisions, it transpires that any amount, if lawfully required to be recovered, then the same can be given effect to, by way of issuance of show cause notice within the normal period of one year from the relevant date. In the case in hand, it is an admitted fact on record that the CBEC in the Circular dated 03.12.2002 had classified the disputed goods under heading 15.11, which was subsequently withdrawn vide Circular No. 31/2011-Customs dated 26.07.2011, pursuant to the judgment of Hon ble Supreme Court, delivered in the case of Jocil Ltd. - there was proper documentation in support of generation of such by-products in the manufacturing process and removal of the same from the factory premises. Thus, under such circumstances, the extended period of the limitation cannot be invoked for confirmation of the adjudged demands on the appellants inasmuch as there is no element of suppression, wilful misstatement, fraud etc., on the part of the appellants, with an intent to evade payment of Central Excise duty. The department had not specifically brought out any evidence to show that non-payment of Central Excise duty by the appellants was due to the reason of any fraudulent activities, with intent to defraud the Government Revenue. The issue arising out the present dispute with regard to initiation of the show cause proceedings by invoking the extended period of limitation, was dealt with by the Co-ordinate Bench of the Tribunal in the case of Cargill India Vs. Commissioner of Central Excise. [ 2024 (9) TMI 1729 - CESTAT MUMBAI] , [ 2024 (9) TMI 1728 - CESTAT AHMEDABAD] ,wherein the Tribunal has allowed the appeal in favour of the assessee, by holding that the extended period of limitation cannot be invoked for confirmation of the duty demands. Conclusion - i) Classification disputes, when bona fide and supported by official circulars and Tribunal decisions, negate intent to evade duty. ii) Extended limitation under Section 11A(1) proviso applies only where there is evidence of fraud, collusion, wilful misstatement, or suppression with intent to evade duty. Show cause notices issued beyond one year without such evidence are barred by limitation. There are no merits in the impugned order, insofar as it has upheld confirmation of the adjudged demands by invoking the extended period of limitation - appeal allowed.

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• 2025 (4) TMI 1318
  Denial of CENVAT Credit - duty paying documents were not available with the Appellant - invocation of extended period of limitation - HELD THAT:- There is nothing coming on record that the Appellant has contravened the provisions of Rule 57AE of the Central Excise Rules, 1944 or Rule 7 of Cenvat Credit Rules, 2002. Similar issue has been decided by this Bench in the case of Exide Industries Ltd. vs. Commissioner of C.Ex., Haldia, [ 2008 (1) TMI 190 - CESTAT, KOLKATA] . This Bench has held that There is no doubt that Notification No. 13/03, dated 1-3-2003 has substituted the word procured for the word purchase in sub-rule (4) of Rule 7 of CENVAT Credit Rules, 2002 w.e.f. 1-3-2003. But Notification No. 27/2000, dated 31-3-2000 which sought to amend CENVAT Credit Rules, 2000 does not prohibit to read the said substitution for the period earlier to that, under challenge. Definition inputs under Rule 57A of Central Excise Rules, 1944 read with Rule 57B and conditions laid down by Rule 57AC nowhere warranted purchase is sine qua non. Therefore Notification No. 13/2003, dated 1-3-2003 guides to appreciate legislative intention. Further, decisions cited by learned Counsel also brings its case in all four. When a levy is not expressly designed by law by a statutory provision, respective Rule which grants credit cannot be presumed to be a charging section by any analogy. Conclusion - The appellant is entitled to Cenvat Credit on inputs received from its sister unit. Appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (4) TMI 1317
  Validity of assessment orders - variation of 317.64 Cubic meters of granite - appeal dismissed on the ground that the said appeals are beyond the period of limitation permissible under the provisions of the A.P. Value Added Tax Act, 2005 - HELD THAT:- The orders of assessment passed by the Commercial Tax Officer state that the petitioners had not produced any material before the Commercial Tax Officer to demonstrate that there was no variation in the quantity of granite quarried and the quantity of granite sold by the petitioners. On that basis, the Assessing Officer had passed the orders of assessment. The petitioners do not choose to file any appeals, against the said orders of assessment, within the period of limitation stipulated under the provisions of the VAT Act. The appeals were filed, with an inordinate delay, and beyond the period of time, which could be condoned by the appellate authority. The maximum period within which the appeals could have been filed and the further period, which can be condoned by the Appellate Authority, had expired even before the Covid outbreak in March 2020. As such, the order of the Appellate Authority also cannot be faulted. Conclusion - The writ petitions are clearly barred on account of laches. Apart from that, no cogent reasons are set out for challenging the orders of assessment or the orders of appeal. Petition disposed off.

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• 2025 (4) TMI 1316
  Interest on delayed refunds - entitlement for enhanced rate of interest - relevant date for calculation of interest - HELD THAT:- As per the provisions of the JVAT Act, 2005, the amount of interest starts accruing automatically after 90 days from the date of submission of application of refund, which was submitted by the petitioner on 16.09.2020 and 90 days therefrom expired on 15.12.2020, hence interest will start accruing w.e.f. 16.12.2020. In the instant case the interest is calculated as per Rule-19 (2) (a) of the Jharkhand Value Added Tax Rules, 2006. However, taking a clue from the order of Alok Shankar Pandey [ 2007 (2) TMI 329 - SUPREME COURT ] that had the Revenue paid the interest to the Petitioner at the right time, the Petitioner could have invested that amount. Thus, the Petitioner is certainly entitled for enhanced rate of interest. Accordingly, the Petitioner is entitled for the interest @ 9% p.a. which comes to Rs. 72,14,351/, for the period from 16.12.2020 to 20.03.2023 i.e. for 826 days delay on the refund of the amount of Rs. 3,54,21,551.00. The ground of the respondents with regard to payment of less interest in the background of Suo Moto Writ Petition (C) No. 3 of 2020) [ 2022 (1) TMI 385 - SC ORDER ] that the period from 15.03.2020 to 28.02.2022 excluded while calculating the interest amount, is untenable and without any legs to stand in the eye of law. The Petitioner is entitled for the interest @ 9% p.a. which comes to Rs. 72,14,351/, for the period from 16.12.2020 to 20.03.2023 i.e. for 826 days delay on the refund of the amount of Rs. 3,54,21,551.00. The Respondent Department is directed to pay the differential amount of interest @ 9% p.a. to the petitioner on account of interest accrued on the principal amount of Rs. 3,54,21,551/- after deducting Rs. 20,43,775/- which was refunded belatedly to the petitioner on 21.03.2023 i.e., after delay of 826 days from the date of refund application filed by the Petitioner. It is made clear that the Respondent department shall make payment of such interest @ 9% after proper calculation within a period of 10 weeks from the date of receipt/production of a copy of this order. Conclusion - i) Application for refund was submitted by the petitioner on 16.09.2020 and 90 days therefrom expired on 15.12.2020, hence interest will start accruing w.e.f. 16.12.2020. ii) The Petitioner is certainly entitled for enhanced rate of interest. The instant writ application stands allowed.

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• Indian Laws

• 2025 (4) TMI 1315
  Dismissal of contempt petition filed by the Appellants - failure to discharge his obligation under the MoU inasmuch as the Respondent has started operating another entity from the premises of the company, is siphoning off plant and machinery which was owned by the company and is defaulting in paying instalments of the term loan - HELD THAT:- The learned Single Judge of the High Court while passing the impugned judgment and final order dated 3rd July 2024 has reviewed the entire order of the learned Single Judge dated 5th December 2023. After the order was passed on 5th December 2023, another learned Single Judge could have only considered whether the Respondent had purged the contempt and if not purged the contempt, as to whether he should be punished or not under the Contempt of Courts Act, 1971. It was not permissible for the learned Single Judge to have revisited the issue as to whether the Respondent has in fact committed contempt or not. If the Respondent was of the view that the order passed by the learned Single Judge dated 5th December 2023 holding him to be guilty of contempt was not correct in law, the only option available to him was to file an appeal under the provisions of Section 19 of the Contempt of Courts Act, 1971. Having accepted the order dated 5th December 2023, the Respondent could not have contended, or for that matter, the learned Single Judge could not have held that the Respondent has not committed contempt of the Court. It is a different matter as to whether the Court while considering the provisions of Sections 12 and 13 of the Contempt of Courts Act, 1971 could have arrived at a finding as to whether the Respondent was liable to be punished or not or whether in the facts of the case he should be discharged or the punishment awarded was liable to be remitted on apology made to the satisfaction of the Court or not. The order of the learned Single Judge of the High Court by holding that the Respondent had not committed contempt amounts to sitting in an appeal over the order passed by the coordinate Bench dated 5th December 2023. It is also contrary to the well settled principles of judicial propriety. When one Judge of the same Court has taken a particular view holding the Respondent to be guilty of contempt, another Judge could not have come to a finding that the Respondent was not guilty of contempt. Conclusion - i) A coordinate Bench of the same Court cannot overturn or revisit the findings of another coordinate Bench on the question of contempt guilt except through proper appellate procedure. ii) After a finding of contempt and grant of time to purge, subsequent proceedings before another Judge should be limited to whether contempt is purged or punishment is warranted. The matter is remitted back to the learned Single Judge of the High Court for considering the issue from the stage of the passing of the order dated 5th December 2023 - appeal allowed by way of remand.

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• 2025 (4) TMI 1314
  Dishonour of Cheque - discharge of burden by accused u/s 118 (a) and 139 of the N.I. Act - rebuttal of presumption - whether the High Court was justified in overturning the order of acquittal passed by the Trial Court? - HELD THAT:- Section 118 (a) assumes that every negotiable instrument is made or drawn for consideration, while Section 139 creates a presumption that the holder of a cheque has received the cheque in discharge of a debt or liability. Presumptions under both are rebuttable, meaning they can be rebutted by the accused by raising a probable defence. This Court through various pronouncements, has consistently clarified the nature and extent of these presumptions and the standard of proof required by the accused to rebut them. A three-Judge Bench of this Court in Rangappa [ 2010 (5) TMI 391 - SUPREME COURT] had the occasion to consider Section 139 elaborately. The Court reiterated that where the signature on the cheque is acknowledged, a presumption has to be raised that the cheque pertained to a legally enforceable debt or liability, however, this presumption is of a rebuttal nature and the onus is then on the accused to raise a probable defence. The cheques issued were against an enforceable debt and held by the complainant as such, even though there was no paperwork to that effect. The onus, as such, was shifted upon the other party, i.e., the accused, to raise a probable defence against such presumption. It has also come on record that the cheque, subject matter of controversy, was given to the complainant in the presence of common well-wishers. However, none of the above statements stands scrutiny. The alleged well-wishers who could have proved the discussion and context in which the cheque was given, remained unexamined. As stated by the complainant himself, there is no official record, such as income tax documents which would show that such an amount was extended by way of a loan to the accused, neither have the books of account, which the complainant allegedly maintained, being produced to evidence the seven or eight transactions inter se the parties totalling the claimed amount. Conclusion - It cannot be said that the complainant was able to discharge the burden once it had shifted back upon him, with the accused having discharged the burden of Sections 118 and 139 of the N.I. Act. The Trial Court was correct in recording a finding of acquittal in favour of the accused and reversal thereof by the High Court in terms of the impugned judgment, with particulars as in Para 1, was unjustified - Appeal allowed.

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• 2025 (4) TMI 1313
  Rejection of application filed under Order VII Rule 11(a) and (d) of the Code of Civil Procedure - plaint filed based on an agreement to sell discloses a cause of action under Order VII Rule 11(a) of the Code of Civil Procedure, 1908 (CPC) or not - interest in the suit schedule property as per Section 54 of the Transfer of Property Act, 1882 - HELD THAT:- Order VII Rule 11 CPC serves as a crucial filter in civil litigation, enabling courts to terminate proceedings at the threshold where the plaintiff s case, even if accepted in its entirety, fails to disclose any cause of action or is barred by law, either express or by implication. The scope of Order VII Rule 11 CPC and the authority of the courts is well settled in law. There is a bounden duty on the Court to discern and identify fictitious suit, which on the face of it would be barred, but for the clever pleadings disclosing a cause of action, that is surreal. Generally, sub-clauses (a) and (d) are stand alone grounds, that can be raised by the defendant in a suit. However, it cannot be ruled out that under certain circumstances, clauses (a) and (d) can be mutually inclusive. For instances, when clever drafting veils the implied bar to disclose the cause of action; it then becomes the duty of the Court to lift the veil and expose the bar to reject the suit at the threshold. The power to reject a plaint under this provision is not merely procedural but substantive, aimed at preventing abuse of the judicial process and ensuring that court time is not wasted on fictitious claims failing to disclose any cause of action to sustain the suit or barred by law. Therefore, the appeal requires careful consideration of the scope of rejection of the plaint under Order VII Rule 11 CPC, particularly, in the context of the suit filed based on an agreement to sell against third parties in possession. Undoubtedly, a sale deed, which amounts to conveyance, has to be a registered document, as mandated under Section 17 of the Registration Act, 1908. On the other hand, an agreement for sale, which also requires to be registered, does not amount to a conveyance as it is merely a contractual document, by which one party, namely the vendor, agrees or assures or promises to convey the property described in the schedule of such agreement to the other party, namely the purchaser, upon the latter performing his part of the obligation under the agreement fully and in time. Section 54 of the Transfer of Property Act, 1882 explicitly lays down that a contract for sale will not confer any right or interest - The protection under Section 53-A is not available against a third party who may have an adversarial claim against the vendor. Therefore, unless and until the sale deed is executed, the purchaser is not vested with any right, title or interest in the property except to the limited extent of seeking specific performance from his vendor. An agreement for sale does not confer any right to the purchaser to file a suit against a third party who is either the owner or in possession, or who claims to be the owner and to be in possession. In such cases, the vendor will have to approach the court and not the proposed transferee. In the instant case, admittedly, no sale was originally effected and only part consideration was made, which was not even to the appellant, but rather to a third party. Upon discovering that the property did not belong to the third party, the respondents instituted a suit. It must be noted that the appellant has been in possession of the suit schedule property for several decades - The public interest implications of this case are significant consideration. Such institutions must be protected from speculative litigation that can drain their resources and impede their charitable work. Moreover, allowing suits like the present one to proceed to trial, would not only waste judicial time and resources, but also encourage similar speculative and extortionate litigations. Hence, this is a fit case for the imposition of costs on the respondents under Section 35A of the Civil Procedure Code, 1908. Conclusion - The plaint ought to have been rejected under Order VII Rule 11(a) and (d) CPC. Hence, the orders passed by the High Court as well as the trial Court rejecting the application filed by the appellant, cannot be sustained in law and deserve to be set aside. The impugned judgment of the High Court dated 02.06.2022 and the order of the trial Court dated 11.06.2021 are set aside - the application filed under Order VII Rule 11(a) and (d) CPC is allowed - appeal allowed.

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• 2025 (4) TMI 1312
  Dishonour of Cheque - maintainability of prosecution of the appellant for offences u/s 420 IPC, without arraigning the company as an accused, given the business dealings were between companies - applicability of principles of res-judictata - vicarious liability. non-application of mind. Maintainability of prosecution of the appellant for offences u/s 420 IPC, without arraigning the company as an accused - HELD THAT:- It is to be noted that in 138 NI Act proceedings against Tyagi, he raised a specific defence that there is no outstanding debt qua 07 cheques as the amount involved therein has already been paid by separate demand drafts. Learned Magistrate in its order dated 25.10.2002 rejected the said defence by recording a finding that no request was made by Tyagi to the complainant company to return the bounded cheques to the accused company when the demand drafts were allegedly sent by the accused persons to the complainant company - It is thus apparent that the finding recorded by the jurisdictional criminal court in 138 NI Act proceedings between the parties would be binding to both the parties in any subsequent proceedings involving the same issue. Applicability of principles of res-judictata - HELD THAT:- In Pritam Singh [ 1955 (11) TMI 35 - SUPREME COURT] , a three Judge Bench of this Court speaking through Natwarlal Harilal Bhagwati, J. placing reliance on Sambasivam vs. Public Prosecutor, Federal of Malaya, decided by a Bench of Five Judges of the Judicial Committee, opined that maxim res judicata is no less appliable to criminal than to civil proceedings. In the said matter, accused Pritam Singh was earlier tried for an offence under the Arms Act basing recovery of a weapon from him. In the said case Pritam Singh was acquitted. In a subsequent trial, the same recovery was again sought to be used by the prosecution as one of the circumstances in an offence of murder. It is absolutely clear that Tyagi cannot maintain a prosecution on the basis of allegations which were precisely his defence in the earlier proceedings wherein he was an accused. Thus, the present criminal proceedings deserve to be quashed on this ground alone. In the matter of Delhi Race Club (1940) Ltd. Ors. vs. State of Uttar Pradesh Anr. [ 2024 (8) TMI 1200 - SUPREME COURT] , this Court has held that a person cannot be vicariously prosecuted, especially for offences under the IPC, merely on account of the fact that he holds a managerial position in a company without there being specific allegations regarding his involvement in the offence. Conclusion - i) The prosecution is barred by the principle of res judicata as the issues were conclusively decided in earlier NI Act proceedings. ii) The prosecution without arraigning the company is impermissible and violates settled legal principles governing vicarious liability. iii) The summoning order is set aside for non-application of mind. The present is a fit case for allowing the appeal to quash the impugned criminal proceedings instituted against the appellant for offences under Section 420 of the IPC - appeal allowed.

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• 2025 (4) TMI 1311
  Breach of reciprocal contractual obligations - Forfeiture of the Appellant s payments by Respondent No. 1, namely the Housing and Urban Development Corporation Limited (HUDCO) - entitlement of interest on refund of the forfeited amount. Whether Respondent No. 1/HUDCO was in breach of its reciprocal contractual obligations qua the Appellant? - HELD THAT:- Respondent No. 1, even after the receipt of the first instalment, did not take any tangible steps to secure the necessary statutory approvals. It is obvious that the said failure led to breach of Clause 5(viii) and (ix) also, as admittedly, no agreement to sublease was executed in favour of the Appellant, owing to the nonexecution of a perpetual lease by Respondent No. 2 in favour of Respondent No. 1. Nonetheless, it is proceeded to examine the contention of the Appellant that Respondent No. 1 also concealed the fact that it did not have the title and authority to execute the agreement to sub-lease in favour of the Appellant. Respondent No. 1 being incapable of fulfilling its reciprocal promises, was not entitled to demand payment for the second instalment until the perpetual lease deed was executed in its favour. Respondent No. 1 s failure to execute the sub-lease in favour of the Appellant, owing to the lack of its authority and title, also amounts to a breach of their contractual obligations - there is some merit in the Appellant s grievance of differential treatment when compared to the Ansals. There are no doubt that Respondent No. 1 was in breach of several obligations as contemplated in the Allotment Letter, viz. failure to execute documents for securing approval under the ULCR Act and the IT Act; failure to execute the sub lease agreement in favour of the Appellant and; failure to secure the approval of the revised layout plan for the construction of the hotel. Whether the Appellant is entitled to a refund of the forfeited amount under Clause 5(vi) of the Allotment Letter? - HELD THAT:- Clause 5 (vi) of the Allotment Letter, which deals with the monies paid by the Appellant, provides that Respondent No. 1 will execute all required documents to obtain approval from the Competent Authority under the ULCR Act and also from the Appropriate Authority as envisaged in Chapter XX C of the IT Act, failing which, Respondent No. 1 will refund the amount paid without any interest - it is imperative to maintain the sanctity of the terms of the agreement between the parties. It is a settled position of law that a commercial document ought not to be interpreted in a manner that arrives at a complete variance with what may originally have been the intention of the parties. As a result, Respondent No. 1 is liable to refund the amount of Rs. 28,11,31,939 (First instalment of Rs. 27.04 Crores along with interest for three months amounting to Rs. 1,04,81,939/- and Rs. 2.5 Lakhs towards maintenance corpus) deposited by the Appellant pursuant to the Allotment Letter. Whether the Appellant is entitled to interest on refund of the forfeited amount? - HELD THAT:- The material on record sufficiently indicates that the Appellant did not approach the Court with clean hands and instead attempted to hoodwink the judicial process by creating a facade to subterfuge their inability to meet their contractual obligations - It needs no emphasis that whosoever comes to the court claiming equity, must come with clean hands. The expression clean hands connotes that the suitor or the defendant have not concealed material facts from the court and there is no attempt by them to secure illegitimate gains. Any contrary conduct must warrant turning down relief to such a party, owing to it not acting in good faith and beguiling the court with a view to secure undue gain. A court of law cannot be the abettor of inequity by siding with the party approaching it with unclean hands. This also brings to mind the oft-quoted legal maxim he who seeks equity must do equity. The instant case is found to be fit to justify a deviation from the established standards. In the facts and circumstances, though we have held Respondent No. 1 to be in breach of several contractual obligations, the conduct of the Appellant is rife with instances where it has also sought to undermine the authority and integrity of the judicial process, by treating the Court with disregard, and attempting to exploit procedural mechanisms for personal gain. The Appellant is not entitled to any discretionary relief of interest under Section 34 of CPC. Conclusion - i) Respondent No. 1/HUDCO, was in breach of its reciprocal contractual obligations, thereby disentitling them from forfeiting the monies already paid by the Appellant towards the first instalment as enshrined in Clause 5 (iii) of the Allotment Letter dated 31.10.1994. ii) Given that the Appellant has blatantly engaged in forum shopping, and considering that their overall conduct does not in any manner reflect an approach aligning with the clean hands doctrine, they are not entitled to grant of any discretionary relief of interest in their favour. The Impugned Judgement dated 03.06.2016 passed by the High Court is set aside - appeal disposed off.

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• 2025 (4) TMI 1310
  Building Tax - Seeking for a direction to quash Ext.P3 - seeking also for a direction to reconsider Ext.P2 and assess building tax on petitioner s building as per the plinth area in the plan approved by the local authority - HELD THAT:- The Kerala Building Tax Act, 1975 provides for assessment of building tax. Once an order of assessment is passed, the assessing authority becomes practically functus officio for the purpose of building tax. The remedy of a person aggrieved by an order of assessment is to prefer statutory appeal and revision as provided under the Act. In the absence of any statutory remedy invoked by the petitioner, the assessment order became final. Therefore recourse to Article 226 of the Constitution of India is not proper. In the instant case, petitioner had even acquiesced into the order by paying the first instalment and thereafter he has turned around and now requests for acceptance of a portion of the amount in satisfaction of the entire tax assessed. Such a procedure is unheard in law. Once tax has been assessed, the entire amount has to be paid, unless there are amnesty schemes. There are no merit in this writ petition and it is dismissed without prejudice to the remedies, if any available under the Act.

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• 2025 (4) TMI 1309
  Smuggling of Ganja of commercial quantity - contraband item - offences punishable under Section 8(c), 20(b)(ii)(c), 22 and 29 of the Narcotic Drugs and Psychotropic Substances Act, 1985 - HELD THAT:- There is no dispute that commercial quantity in relation to NDPS Act for ganja means any quantity greater than 20 kg. The Section 2(iii) (b) and (c) defines Ganja as the flowering or fruiting tops of the cannabis plant (excluding the seeds and leaves when not accompanied by the tops), by whatever, name they may be known or designated, and any mixture, with or without any neutral material, of any of the above forms of cannabis or any drink prepared therefrom. There is nothing on record to prima facie show that before carrying weight of the seized plant of ganja, the investigating officer had segregated the seeds or the other parts of the plant in order to ascertain the exact quantity of ganja. In fact, none of the paper mentions that the said contraband articles which were seized includes the flowering or fruiting tops of cannabis plant. This fact becomes further clear from the panchanama also - on perusal of the material on record shows that what was seized was plant i.e. leaves, seeds, stems and stalks and without separating the same, the ganja was weighed. As the seized material was not weighed and after separating the leaves and the other parts and moreover it is not along with the flowering or fruiting tops. Therefore, it is difficult to ascertain whether quantity can be said to be commercial. After perusal of the investigating papers, prima facie, the material complied with the chargesheet, it is difficult to accept that the alleged prohibited substance is within the definition of ganja under the NDPS Act. Since the only flowering or fruiting tops of cannabis plant are classified as ganja, in absence of the said substance being seized from the applicant, prima facie involvement of the applicant is difficult to hold. Moreover, there is inordinate delay in conducting the trial and, therefore, the right of the accused of speedy trial is affected. Recently, the Hon ble Apex Court in the case of Ankur Chaudhary Vs. State of Madhya Pradesh [ 2024 (5) TMI 1463 - SC ORDER] , by referring the earlier decisions held that inordinate delay in trial is affecting the right of the accused of a speedy trial, which is violation of article 21 of the Constitution of India. Conclusion - There is nothing on record to prima facie show that before carrying weight of the seized plant of ganja, the investigating officer had segregated the seeds or the other parts of the plant in order to ascertain the exact quantity of ganja. In absence of the said substance [flowering or fruiting tops] being seized from the applicant, prima facie involvement of the applicant is difficult to hold. The applicant- Mohammad Jakir Nawab Ali, be released on bail subject to fulfilment of conditions imposed - bail application allowed.

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