TMI Tax Updates - e-Newsletter
January 23, 2025

Case Laws in this Newsletter:

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

Articles

1. The Legal Importance of Partnership Deed for Tax Compliance

   By: Ishita Ramani

2. Benefits of containerized movement of Goods in international trade

   By: YAGAY andSUN

3. Financial Frauds and GST Audit in India

   By: SUBRAMANYA RAYAPROL

4. A case of un-necessary litigation (can also be regarded as frivolous case and abuse of process of law) in case before honorable Supreme Court in case of Pr. CIT vs. RAWMIN MINING AND INDUSTRIES P. LTD.

   By: DEVKUMAR KOTHARI and CA UMA KOTHARI

5. ICEGATE: Indian Customs EDI Gateway

   By: YAGAY andSUN

6. Accused/Taxpayer cannot be kept in custody beyond the period of sixty days if complaint has not been filed pursuant to investigation for offences specified under GST Laws

   By: Bimal jain

7. European Union Deforestation Regulation (EUDR) - Implications for Indian Exporters

   By: YAGAY andSUN

8. ECGC - Country Rating/Category

   By: YAGAY andSUN

News

1. BTL EPC Ltd Secures Back-to-Back Orders Worth ?1200 Crore (including GST) from Adani Power and NTPC

2. Budget 2025: Industry pins hope for mega wagon orders, focus on freight infra development

3. Odisha budget session from Feb 13

4. Minimum Support Prices (MSP) for Raw Jute for 2025-26 Season

5. DPIIT partners with Apna to boost startup talent and create job opportunities for youth

6. Kejriwal unveils 7-point 'manifesto' for middle class, says they are victim of 'tax terrorism'

7. SC refers to another bench pleas of RBI, others related to writing off AT-1 bonds of Yes Bank

8. JGU Vice Chancellor Speaks at the World Economic Forum 2025 in Davos

9. Provisions about updated return under section 139(8A)

10. Enhancing Tax Transparency on foreign assets & Income: Understanding CRS & FATCA

11. Justice (Rtd) Shri U.U. Lalit calls for law education that equips lawyers to resolve complex issues of social and economic justice

12. CCI approves the proposed acquisition of (i) AI Lenarco Midco Ltd. by Majesty II Pte. Ltd and (ii) certain compulsory convertible debentures in Manjushree Technopack Limited from AI Lenarco by Ashoka India Equity Investment Trust plc, Nuvama Private Investment Trust and InCred Growth Partners Fund – I.

13. CCI approves the proposed amalgamation of SRL, Viyash, Symed, Appcure, Vindhya Pharma, Vandana, Vindhya Organics, Geninn and SV Labs with Sequent Scientific Limited

14. CCI approves the proposed combination involving, inter alia, Agro Tech Foods Limited (ATFL), Bharti Enterprises Limited (BEL), DMPL India Limited (DMPL India) and Del Monte Foods Private Limited (DMFPL)

15. US desires to advance economic ties with India, address irregular migration: Rubio to Jaishankar

Notifications

Income Tax

1. 09/2025 - dated 21-1-2025 - IT

Income-tax (First Amendment) Rules, 2025

Circulars / Instructions / Orders

DGFT

1. Policy Circular No. 11/2024-25 - dated 21-1-2025

EPCG Scheme - Relief in Average EO in terms of the para 5.17(a) of Hand Book of Procedures (HBP) of FTP, 2023.

Highlights / Catch Notes

GST

• Minutes: GST Council Forms Group to Review State Revenue Impact and Compensation Cess Structure Beyond 2026.

  Circulars : The GST Council approved formation of a GoM on restructuring Compensation Cess to examine revenue impacts on states post-GST implementation. Key points: Karnataka raised concerns about revenue loss of approximately 0.7% of GSDP despite higher GST collections and growth rates compared to national average. The state clarified this was due to being a producer state under destination-based taxation. The Council agreed to form a GoM chaired by Minister of State (Finance) to: - Analyze state-wise revenue data considering COVID-19 impacts - Review compensation cess structure beyond March 2026 - Examine challenges faced by manufacturing states - Consider solutions within GST's destination-based framework Pre vs Post-GST comparison shows: - Pre-GST (2012-16): 8.3% growth rate, 11.5% GDP growth, 0.72 tax buoyancy - Post-GST (2018-23): 12.3% growth rate, 9.8% GDP growth, 1.25 tax buoyancy The GoM will submit detailed analysis and recommendations for Council's consideration before compensation cess expires in March 2026.
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• Detained goods can be provisionally released under GST Act 2017 Section 129(1)(c) and Rule 140 on bond, bank guarantee.

  Case-Laws - HC : The HC held that u/s 129(1)(c) of the GST Act, 2017 read with Rule 140, detained goods can be provisionally released upon executing a bond in Form GST MOV-08 and furnishing a bank guarantee equivalent to the applicable tax, interest and penalty. The petitioner was directed to take steps accordingly and approach the Appellate Authority u/s 107.
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• Jurisdictional Issues Raised on Extended Limitation Period, GST Rate for Product.

  Case-Laws - HC : The HC held that invoking the extended period of limitation u/s 74 of the CGST Act is a jurisdictional aspect in the present case. The petitioner has been paying GST at 5% under Entry No. 181-A for the product in question since 2017, while paying higher GST at 12% for different products. As Entry No. 181-A is not different from the similarly worded sub-heading 3003.31 of the Central Excise Tariff Act, 1985, which has been repeatedly interpreted contrary to the allegations in the show cause notice, the aspect of invoking the extended period requires consideration along with the binding nature of the GST Council's deliberations. The HC found the issues raised to be jurisdictional and issued notice for further consideration.
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• Director Granted Bail in GST Fraud Case After Undertaking to Pay Rs. 2 Crore Tax.

  Case-Laws - HC : HC granted regular bail to the applicant Director of M/s Nandeshwari Steel Co. in a case involving fraudulent availment of ITC and issuance of fraudulent invoices by non-existent suppliers. The applicant undertook to pay Rs. 2 crores GST amount in two installments. Considering the offence punishable up to 5 years, completed investigation, principle of bail being the rule and jail an exception under Article 21, and the time required for trial commencement, HC allowed regular bail.
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• HC grants interim bail in alleged GST evasion case; questions arrest without tax liability determination.

  Case-Laws - HC : HC granted interim bail to petitioner arrested u/s 132(1)(c) CGST Act for alleged GST evasion by falsely claiming ITC. HC found no determination of tax liability by authorities to justify "reasons to believe" for arrest at investigation stage. Despite powers u/s 69, continued detention wasn't warranted as petitioner cooperated and no risk of absconding. Bail granted with conditions.
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• State can't skip primary service of notice modes, must follow Section 169 for valid GST notices.

  Case-Laws - HC : The HC held that Section 169 of the Tamil Nadu GST Act mandates service of notices on assessees either in person, by registered post, or to the registered email ID as alternative modes. Only upon failure or impracticability of these modes can the State make publication of notices/orders on the web portal or newspaper as an additional step. Mere uploading on the portal without attempting the primary modes violates principles of natural justice. The impugned assessment orders were set aside and remanded to comply with Section 169 requirements.
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• GST Registration Cancellation: Prospective Effect Upheld, Retrospective Cancellation Quashed.

  Case-Laws - HC : The HC quashed the retrospective cancellation of the petitioner-assessee's GST registration, relying on Riddhi Siddhi Enterprises v. Commissioner of Goods and Services Tax (CGST), South Delhi & Anr. It held that in the absence of the show cause notice embodying an intent for retrospective cancellation, the cancellation shall be effective from the date of issuance of the show cause notice, not retrospectively.
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• ITC indefeasible if not utilized, interest u/s 50(3) requires actual utilization (3).

  Case-Laws - HC : The HC held that validly availed input tax credit (ITC) is indefeasible unless utilized improperly. The imposition of interest u/s 50(3) requires actual utilization of the credit. Since the petitioner had not utilized the accumulated ITC after the cut-off date, the imposition of interest as per the impugned circular could not be justified. The petition was allowed.
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Income Tax

• Non-Resident Cruise Operators Must Meet New Size, Route, and Tourism Guidelines Under Income Tax Rule 6GB.

  Notifications : CBDT amended Income Tax Rules 1962 by introducing Rule 6GB u/s 44BBC, establishing conditions for non-resident cruise ship operators. The amendment specifies four key requirements: vessels must have 200+ passenger capacity or 75+ meter length with dining/cabin facilities; scheduled voyages must touch minimum two Indian seaports or same port twice; operations must primarily transport passengers not cargo; compliance with Tourism/Shipping Ministry guidelines required. The Income-tax (First Amendment) Rules 2025 took effect upon Official Gazette publication, aimed at regulating taxation of non-resident cruise operators' profits and gains from Indian operations under specialized computational provisions.
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• Order u/s 98(1) clarifies appeals filed after 22.07.2024 without delay condonation are pending for Direct Tax Vivad Se Vishwas Scheme.

  Notifications : The Central Government issued an Order u/s 98(1) of the Finance (No.2) Act, 2024 to remove difficulties in implementing the Direct Tax Vivad Se Vishwas Scheme, 2024. The Order clarifies that where an order was passed against a person before 22.07.2024, the time for filing an appeal was available on that date, the appeal was filed after 22.07.2024 within the stipulated time without seeking condonation of delay, such appeal shall be considered pending as on 22.07.2024 for the Scheme's purposes. The person shall be treated as an appellant, disputed tax calculated based on the appeal, and the Scheme's provisions shall apply accordingly.
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• Depreciation on pipeline disallowed, no contractual liability for installation cost.

  Case-Laws - HC : Tribunal disallowed depreciation on pipeline as liability provided in books was mere contingent liability not representing installation cost. HC upheld, finding no contractual payment made to KPT or GMB under MOU. Proposal by appellant rejected. Tribunal's fact-finding upheld, no substantial question of law arises.
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• Reopening of assessment quashed due to lack of independent application of mind by AO.

  Case-Laws - HC : The HC quashed the reopening of assessment u/s 147, holding that the AO did not apply independent mind and relied solely on borrowed satisfaction from information on the insight portal without verifying material facts. The petitioner had disclosed share transactions through contract notes, ledger, and bank statements. The AO failed to form reasonable belief of income escapement as the disclosed profits were already offered to tax and accepted in regular assessment. Mere information from the insight portal, without examining assessee's records, cannot be a valid reason to believe income has escaped assessment.
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• Assessee's books rejected, income estimated on gross receipts basis.

  Case-Laws - AT : The ITAT upheld the CIT(A)'s rejection of the assessee's books of account u/s 145(3) as inaccurate, unreliable, and incapable of reflecting true financial affairs. It concurred with CIT(A)'s estimation of profit based on average net profit earned on regular receipts, deeming the methodology logical. Separate additions u/ss 37(1) and 40A(3) were rightly deleted once books were rejected and income estimated on gross receipts, relying on Madras HC's decision in CIT v. Amman Steel. For AY 2021-22, granting telescoping benefit against cash seized was justified as the assessee offered substantial additional income for prior years exceeding seized cash.
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• New residential house purchase allows deduction on long-term capital gains.

  Case-Laws - AT : The ITAT held that an assessee is eligible for deduction u/s 54F of the Income Tax Act from long-term capital gains, even if the claim was not made while filing the return but was raised before the CIT(A). The Appellate Authorities are not barred from entertaining a fresh claim. The ITAT set aside the orders of the lower authorities and directed the Assessing Officer to verify the facts regarding acquiring the new asset and allow deduction u/s 54F in respect of long-term capital gains.
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• Overdue receivables from AEs treated as separate lending transaction.

  Case-Laws - AT : Outstanding receivables from AEs exceeding agreed credit period constitutes separate international transaction of providing capital financing/lending receivables, not subsumed under sales/services transaction. Such overdue receivables amount to providing funds to AE without charge, requiring separate benchmarking. TPO rightly benchmarked this transaction, but erred in applying SBI PLR of 13.27% instead of LIBOR rate for foreign currency receivables. ITAT directed TPO to apply LIBOR rate and determine appropriate mark-up over LIBOR based on risk factors involved in overdue receivables from AEs. Assessee's appeal allowed for statistical purposes.
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• M/s Automotive Stamping Assemblies Ltd. & Majestic Ltd. accepted as comparables under TNMM.

  Case-Laws - AT : The ITAT held that M/s Automotive Stamping Assemblies Ltd. and M/s Majestic Ltd. should be accepted as comparable entities for TP analysis under TNMM as they were initially selected and not persistent loss-making companies. M/s Spicer India Pvt. Ltd. was rightly included despite related party transactions as TNMM requires broad comparability. For M/s JBM Auto Ltd., the issue was restored to the AO/TPO to re-adjudicate after examining segmental information. Forex losses/gains were held operating in nature being linked to import transactions. Economic adjustments were denied as not granted earlier by the Tribunal. The forex loss disallowance u/s 43A was restored to the AO for fresh adjudication based on bifurcation of capital and revenue components. The additional depreciation claim was dismissed as not claimed originally and being revenue neutral.
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• High Court Upholds 1% ALP for SBLC, Allows Excess R&D Expenditure Deduction.

  Case-Laws - AT : The ITAT held that the TPO shall consider 1% rate as the arm's length price (ALP) for the international transaction involving issuance of Stand-by Letter of Credit (SBLC) to the associated enterprise (AE). The revenue expenditure claimed by the assessee, which exceeded the amount quantified by the DSIR, should be allowed as deduction u/s 37(1) after allowing the eligible portion u/s 35(2AB), as the AO erred in not examining whether the differential amount was for business purposes.
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Customs

• High Court upholds auction of uncleared goods, importer liable for charges.

  Case-Laws - HC : The HC dismissed the writ petition filed by the petitioner seeking to recall the permission granted to respondent No. 3 to auction the cargo under the bills of lading and direct handover of the entire sale proceeds unconditionally. The HC held that the petitioner, as the beneficial owner and importer, had the obligation to get the goods cleared by following the prescribed customs procedures within 30 days of their arrival at ICD Wardha. The actions of respondents 1-3 in auctioning the goods due to non-clearance by the petitioner were valid, and the petitioner was liable for rent/demurrage charges u/s 150(2) of the Customs Act. The plea of fraud invoked by the petitioner required leading evidence, which is not permitted under Article 226.
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• Customs Tribunal Quashes Confiscation of Gold, Penalties Due to Lack of Evidence.

  Case-Laws - AT : CESTAT allowed the appeal against confiscation of 449.300 gms of fine gold and penalties imposed on the appellants. It held that the department failed to produce any evidence to prove the gold was smuggled or of foreign origin. No reasonable belief was formed regarding the smuggled nature of the gold as mandated u/s 123 of the Customs Act. The principles of natural justice were violated as no panchnama was drawn during seizure and relied upon documents were not supplied despite requests. Consequently, the confiscation of gold and penalties were set aside due to lack of evidence and violation of principles of natural justice.
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• Imported broom sticks classifiable under CTH 96031000, exempt from duty under Notification.

  Case-Laws - AT : Imported broom sticks (140-160 cm) classifiable under CTH 96031000 not 14049090. Entitled to exemption benefits under Notification No. 46/2011-Cus and 2/2017-ITR. Demand of Rs. 4,59,025/- duty and interest set aside. Order of confiscation, fine set aside. Penalties set aside. Appeal allowed by CESTAT.
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• Tribunal Allows Partial Appeal on Customs Duty Exemption for Titanium Dioxide Imports.

  Case-Laws - AT : The appellant imported goods declared as Rutile Sand/Rutile and claimed classification under Heading 26.14 of Customs Tariff, availing exemption from CVD under N/N. 4/2006-CE. The goods contained 90-96% Titanium Dioxide as per test reports. Customs authorities examined documents like invoices, packing lists, test certificates and allowed exemption after assessment from 2007-2012. Invoking extended period of limitation for differential duty demands along with interest was held unsustainable as the appellant made correct declarations at import. The Tribunal allowed the appeal in part.
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• Customs exemption for inputs/parts used in making phone display assemblies, even if scrapped.

  Case-Laws - AAR : AAR held that the benefit of exemption under Sl. No. 5D(b) of Notification No. 57/2017-Customs shall be available for import of inputs or parts intended for use in manufacturing display assemblies for cellular mobile phones, even if some inputs/parts get scrapped during the manufacturing process. The exemption applies to inputs/parts imported for the intended use of manufacturing display assemblies, irrespective of whether they ultimately form part of the finished product or get damaged/scrapped. The AAR rejected the contention that the advance ruling application was ineligible u/s 28E(b) of the Customs Act.
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DGFT

• New Diamond Import-Export Scheme Requires 10% Value Addition, Restricts Trade Through Mumbai Airport Under DGFT Chapter 4.

  Circulars : DGFT introduced new provisions in Chapter 4 of Handbook of Procedures 2023 establishing the Diamond Imprest Authorization (DIA) scheme. The scheme permits import and export of diamonds exclusively through Mumbai Airport, with mandatory pre-import conditions. DIA holders must achieve 10% value addition in freely convertible currency. Authorization validity is 12 months for imports with 18-month export obligation period. Only natural cut and polished diamonds weighing <=0.25 carats are eligible for export. Holders must execute a bond equal to export obligation with performance bank guarantee covering duty foregone. One IEC can obtain single authorization per financial year. The scheme prohibits deemed exports, revalidation, and export obligation extensions. Implementation commences from April 1, 2025.
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• DGFT Increases Export Quotas for Agarwood Products: Chips Limit Raised to 151,080kg, Oil to 7,050kg for 2024-27.

  Notifications : DGFT amended export policy for artificially propagated Agarwood products for FY2024-27. Annual export limits increased significantly: Agarwood chips/powder from 25,000kg to 151,080kg and Agar oil from 1,500kg to 7,050kg. Export permitted from specified states with Assam allocated highest quota (119,400kg chips, 5,560kg oil). Mandatory requirements include Certificate of Origin from authorized Forest Department officers, physical verification, colored photographs, and CITES compliance undertaking. Export authorization contingent on valid CITES permit at time of export. Policy maintains "Restricted" category status while streamlining documentation requirements and establishing state-wise quotas for regulated trade of artificially propagated sources.
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• Diamond Imprest Authorisation allows duty-free import of small diamonds against export of cut-polished diamonds.

  Notifications : The DGFT has introduced a new 'Diamond Imprest Authorisation' (DIA) scheme under Chapter 4 of the Foreign Trade Policy 2023. The DIA allows import of natural cut and polished diamonds weighing up to 4 carats against physical export of cut and polished diamonds with 10% minimum value addition. Eligible exporters with two-star status and $15 million annual diamond export for last 3 years can import up to 5% of average annual exports, maximum $15 million. Imports are exempted from customs duties and IGST/Compensation Cess. Export obligation must be fulfilled within 6 months through Mumbai airport. The scheme aims to boost India's diamond exports.
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• Tur/Pigeon Peas Import Policy Extended Till March 2026 Under FTDR Act.

  Notifications : The DGFT extended the "Free" import policy for Tur/Pigeon Peas [ITC(HS) 0713 60 00] under ITC (HS) 2022, Schedule I (Import Policy) till 31.03.2026 in exercise of powers conferred by Sections 3 and 5 of the Foreign Trade (Development and Regulation) Act, 1992 read with paragraphs 1.02 and 2.01 of FTP 2023.
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Corporate Law

• Court rejects PIL seeking policy framework to prevent illegal building registrations.

  Case-Laws - HC : The HC dismissed the PIL seeking intervention to direct respondents to adopt a policy framework to prevent registration of illegal buildings and verify documentation for project registration. The Court held that under Article 226, it cannot engage in speculative or roving inquiries absent an independently established prima facie case, as per precedents in A. Hamsaveni, N.K. Singh, and Ratan Chandra Sammanta. However, the HC directed integration of local authority websites with MahaRERA's portal within three months for enhanced document verification, and uploading of commencement and occupation certificates within 48 hours until full integration, disposing of the PIL.
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IBC

• Corporate debtor gets chance to settle dues under IBC Section 12A.

  Case-Laws - AT : The NCLAT held that the appropriate recourse for the appellant is to permit the financial creditors to file an application u/s 12A through the IRP as per Regulation 30A of CIRP Regulations, 2016. The acceptance of a one-time settlement (OTS) can justify withdrawal of insolvency proceedings u/s 12A, provided CIRP costs are addressed and other financial creditors' rights are considered. The appeal was disposed of, allowing the financial creditor, Indian Bank, to file a Section 12A application through the IRP within two weeks.
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Indian Laws

• Cheque dishonor case - Cognizance upheld for IPC 420, 467, 468, 471, 120B.

  Case-Laws - HC : HC dismissed the application challenging cognizance for offences u/ss 420, 467, 468, 471 and 120-B of IPC in a cheque dishonor case. It held the presumption u/s 139 of Negotiable Instruments Act was rightly applied. Malafides of complainant are immaterial if allegations make out a cognizable offence. Mere delay in filing complaint cannot quash proceedings unless barred u/s 468 CrPC. The contentions regarding Section 139 NI Act, malafides, and delay were rejected.
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PMLA

• Attachment order upheld despite 180-day lapse due to Covid-19 exclusion period.

  Case-Laws - AT : The AT upheld the provisional attachment order over the proceeds of crime. Despite the lapse of 180 days u/s 5(3) of PMLA, the period from 15.03.2020 to 28.02.2022 was excluded due to Covid-19 as per the SC's order. The property, though purchased by a non-accused entity, could be attached as it constituted proceeds of crime transferred by the accused. The appeal was dismissed, upholding the attachment orders.
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• Karnataka HC upholds appellants' ownership rights over Schedule B properties in PMLA case.

  Case-Laws - AT : AT allowed appeals by appellants challenging attachment of properties under PMLA. Based on sale deeds, Schedule B properties were part of floors purchased by appellants, inseparable from their ownership rights. Common areas and parking spaces were integral to enjoyment of main properties. Allottees who obtained conditional orders from Karnataka HC in related proceedings were granted liberty to file claim applications before HC as AT could not entertain their claims since company was under liquidation.
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Central Excise

• SC upholds MOU between OMCs, rejects revenue's stance on limitation period and penalty.

  Case-Laws - SC : The SC held that the price was not the sole consideration for sale under the MOU between OMCs for ensuring uninterrupted supply of petroleum products across India. The revenue failed to record detailed reasons for invoking extended period of limitation under proviso to Section 11A(1) of CEA 1944. No allegation of fraud, collusion or wilful mis-statement was made to levy penalty u/s 11AC. The appeal by the assessee was allowed.
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Case Laws:

• GST

• 2025 (1) TMI 1027
  Classification of services - offline/online games such as Rummy - to be classified under SAC 998439 or not - games of chance or skill? - Concept of res extra commercium - Concept of GST and Definition of Business under GST - concept of supply - It was held by High Court that online/offline Rummy, whether played with or without stakes, is a game of skill and not gambling. Consequently, it does not fall under betting and gambling for the purposes of GST . HELD THAT:- The main matter is now ripe for final hearing. However, according to the revenue, some of the show cause notices are likely to get time barred by the first week of February, 2025.

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• 2025 (1) TMI 1026
  Jurisdiction to pass an order u/s 129(3) of GST Act, 2017 - alleged undervaluation of goods - providing bank guarantee for the release of detained goods - HELD THAT:- The provisions of Section 129(1)(c) of the Act read with Rule 140 of the Rules, provide for an eventuality, wherein the seized goods can be released on provisional basis upon execution of a bond for the value of the goods in Form GST MOV-08 and furnishing of a security in the form of a bank guarantee equivalent to the amount of applicable tax, interest and penalty payable. It is deemed appropriate to dispose of the present writ petition and it is directed that the seized goods of the petitioner would be released on his taking steps in terms of Section 129(1)(c) read with Rule 140 of the Rules and Form GST MOV - 08, i.e. furnishing of the bond and the requisite bank guarantee. The petitioner may approach the Appellate Authority in accordance with provisions of Section 107 of the Act.

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• 2025 (1) TMI 1025
  Challenge to SCN issued by Joint Director D.G.G.I., Surat - facts necessary for invoking the provisions of Section 74 of CGST Act do not exist - violation of principles of natural justice - HELD THAT:- The aspect pertaining to invoking extended period of limitation under Section 74 of the Act is essentially a jurisdictional aspect in the present matter as admittedly the petitioner has been paying GST under Entry No. 181-A since 2017 @ 5% for the product in question whereas for the products which are different from the product in question, it is paying higher GST @ 12%. Further as apparently the Entry No. 181-A in Schedule-I is not different from sub heading 3003.31 of the Central Excise Tariff Act, 1985 which was worded exactly in similar manner and has been repeatedly interpreted contrary to the allegations made in the show cause notice, the aspect invoking the extended period of limitation in the circumstances requires consideration along with the binding nature of the deliberations of GST Council in its minutes dated 06.10.2017 - The issue as raised are jurisdictional in nature and, therefore, the aspect of availability of opportunity to respond to the show cause notice apparently would not come in way of the petitioner in maintaining the petition. The matter requires consideration - Issue notice.

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• 2025 (1) TMI 1024
  Seeking grant of regular bail - fraudulent availment of ITC - fraudulent invoices issued by non-existent suppliers - cancellation of GST registration - HELD THAT:- Investigation is completed by the department and commencement of trial will take its own time. The offence is punishable upto 5 years only and based on the documentary evidence. An undertaking has been filed on behalf of Director of M/s Nandeshwari Steel Co., wherein stating that he will pay GST amount of Rs.2.00 crores and the same shall be paid in two monthly installments of 1.00 crore each. The first installment would be paid at the end of January, 2025 and second installment would be paid in the month of February i.e. on or before 28.02.2025, failing which, non-bailable warrant can be issued against the present applicant to show his bona fide. This Court has also taken into consideration the law laid down by the Hon ble Apex Court in the case of SANJAY CHANDRA VERSUS CBI [ 2011 (11) TMI 537 - SUPREME COURT] as well as in the case of GUDIKANTI NARASIMHULU AND ORS. VERSUS PUBLIC PROSECUTOR, HIGH COURT OF ANDHRA PRADESH [ 1977 (12) TMI 143 - SUPREME COURT] . Obviously, the conclusion of trial will take time and keeping the accused behind the bars is nothing but amounts to pre-trial conviction and therefore, considering the celebrated principle of bail jurisprudence is that bail is a rule and jail is exception as well as the concept of personal liberty guaranteed under Article 21 of the Constitution of India, present application deserves consideration. Considering the nature of the allegations made against the applicant/s in the FIR, without discussing the evidence in detail, prima facie, this Court is of the opinion that this is a fit case to exercise the discretion and enlarge the applicant/s on successive regular bail. Hence, the present application is allowed.

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• 2025 (1) TMI 1023
  Initiation of proceedings against the petitioner u/s 132(1) (c) of the Central Goods and Services Tax, (CGST) Act, 2017 - evasion of GST by falsely claiming ITC - reasons to believe - power to arrest - HELD THAT:- Perusal of the records reveals that the authorization required under the statue has been given by the Commissioner on the ground that he has reasons to believe on the materials placed before the authority. However, what is not seen from the materials placed before the court at this stage is the determination of the liability as is required for recovery of taxes from any assessee. No material has been shown that such determination of the liability had been arrived at by the respondent authorities on whom the Commissioner had concluded that he had reasons to believe that the person has committed any offence specified under the various Clauses under Section 132. From the statements recorded before the investigating authority it is seen that there are other partners in the partnership besides the petitioner and at this stage of investigation there are no materials to suggest that the petitioner will tamper with the evidence or have evaded the summons or did not respond to summons when served. The question of whether the directions of the Apex Court in ARNESH KUMAR VERSUS STATE OF BIHAR ANR [ 2014 (7) TMI 1143 - SUPREME COURT ] were followed by the respondent is also an issue which would required determination by this court. While there is no quarrel with the proposition that Section 69 does confer power on the Commissioner to order arrest in case any of the specified offences under Section 132 of the CGST Act, the question remains is whether arrest or detention is called for merely because is power is available on the authority to do so. The petitioner has cooperated with the investigating authority and his statement has been recorded there is no material to suggest that he will abscond or not respond to summons issued. There is also no material which prima facie suggests that the determination of the liability has been arrived that by the Commissioner or the investigating officer. Under such circumstances this court of the view that continued detention of the petitioner at the stage of investigation is not required. This therefore court considers that the petitioner can be released on interim bail until further orders. Conclusion - There is no material which prima facie suggests that the determination of the liability has been arrived that by the Commissioner or the investigating officer. Under such circumstances this court of the view that continued detention of the petitioner at the stage of investigation is not required. The petitioner is directed to be released on interim bail subject to fulfilment of conditions imposed - bail application allowed.

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• 2025 (1) TMI 1022
  Cancellation of client s registration under Odisha Goods and Services Tax Act, 2017 - petitioner is ready and willing to pay the tax, interest, late fee, penalty and any other sum required to be paid for the return form - HELD THAT:- Reliance placed in M/S. MOHANTY ENTERPRISES VERSUS THE COMMISSIONER, CT GST, ODISHA, CUTTACK AND OTHERS [ 2022 (11) TMI 1521 - ORISSA HIGH COURT] where it was held that In that view of the matter, the delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc., due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. The writ petition is disposed of.

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• 2025 (1) TMI 1021
  Service of notices - Compliance of Section 169 of the Tamil Nadu Goods and Services Tax Act 2017 - upload of only the notices/ orders in the web portal and not by any other modes as prescribed under Section 169 of the Act - HELD THAT:- It is to be noted that Rule 52 of the TNGST Rule 1959 had provided for service of notices on the assesses. The same had been considered by the two Division Bench of this Court. Firstly, in the judgment reported in 1972 SCC Online Mad 347 [ 1972 (9) TMI 133 - MADRAS HIGH COURT] , a Division Bench of this Court had rejected the contentions that Section 52(a), (b) (c) all have to be complied with independently before compliance of Section 52 (d). The Division Bench had held that the authority would have to comply with any of the three modes under (a), (b) (c) of Rule 52 and if found such service was not effective, then the Clause (d) of Rule 52 would have to be complied. A similar view had been taken by a subsequent Division Bench in a judgment in the case of Singaravelar Spinning Mills (P) Ltd., Vs State of Tamil Nadu and Another [ 2010 (12) TMI 1102 - MADRAS HIGH COURT] . The Division Bench in the said judgment had also taken note of the earlier Division Bench indicated supra, wherein, the Division Bench had held that the mode of service referred to under Clause (a) to (c) are only alternative and not cumulative and that any one of the modes have to be exhausted before proceeding under Rule 52 (d). A conjoined reading of Sub-Section (1)(2) (3) of Section 169 would amply make it clear that the State is obliged to comply with the Clauses (a) to (c) alternatively and thereafter, comply with Clauses (d) to (f). Further, even though Clause (f) has also been proceeded with the word or indicating it to be disjunctive / an alternative mode of services, a reading of the Clause (f) would indicate that Clause (f) could be resorted to by the State, if any of the Clauses preceding it, was not practicable. Here also, Clause (f) makes it imperative that such affixure shall be in a conspicuous place and the last known business or residence of the asseesse. Therefore, the object of Section 169 is for strict observance of the principles of natural justice. Conclusion - Section 169 mandates a notice in person or by registered post or to the registered e-mail ID alternatively and on a failure or impracticability of adopting any of the aforesaid modes, then the State can, in addition, make a publication of such notices/ summons/ orders in the portal/ newspaper through the concerned officials. The orders of assessment impugned in these Writ Petitions set aside remitting the same back to the respective respondents to comply with the directions indicated - petition allowed by way of remand.

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• 2025 (1) TMI 1020
  Challenge to assessment orders - proceedings does not contain the signature of the assessing officer and also DIN number on the impugned assessment orders - no DIN numbers on the impugned assessment orders. Absence of signatures - HELD THAT:- The effect of the absence of the signature, on an assessment order was earlier considered by this Court, in the case of A.V. Bhanoji Row Vs. The Assistant Commissioner (ST) [ 2023 (2) TMI 1224 - ANDHRA PRADESH HIGH COURT] . A Division Bench of this Court, had held that the signature, on the assessment order, cannot be dispensed with and that the provisions of Sections-160 169 of the Central Goods and Service Tax Act, 2017, would not rectify such a defect. Following this Judgment, another Division Bench of this Court, in the case of M/s. SRK Enterprises Vs. Assistant Commissioner [ 2023 (12) TMI 156 - ANDHRA PRADESH HIGH COURT] had set aside the impugned assessment order. Non-inclusion of DIN number on proceedings - HELD THAT:- The question of the effect of non-inclusion of DIN number on proceedings, under the G.S.T. Act, came to be considered by the Hon ble Supreme Court in the case of Pradeep Goyal Vs. Union of India Ors [ 2022 (8) TMI 216 - SUPREME COURT] . The Hon ble Supreme Court, after noticing the provisions of the Act and the circular issued by the Central Board of Indirect Taxes and Customs (C.B.I.C.), had held that an order, which does not contain a DIN number would be non-est and invalid. In view of the aforesaid judgments and the circular issued by the C.B.I.C., the non-mention of a DIN number and absence of the signature of the assessing officer, in the impugned assessment order would have to be set aside. Petition allowed.

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• 2025 (1) TMI 1019
  Maintainability of appeal - requirement to deposit 10% of the disputed amount of tax on filing the appeal and further 20% of remaining disputed tax, for the impugned order to be stayed - HELD THAT:- There was notification dated 16th August, 2024 made by Central revenue reducing latter deposit to 10%. Now, State revenue has correspondingly notified on 29th October, 2024. In the circumstances, the writ petition be disposed of as covered by order dated 16th February, 2024 with modification for deposit of 10% of remaining disputed tax for impugned order to remain stayed. Petition disposed off.

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• 2025 (1) TMI 1018
  Retrospective cancellation of the Goods and Services Tax [GST] registration of the petitioner-assessee - it is contended that in the absence of the SCN having embodied any intent of the respondents to cancel the registration with retrospective effect, the action would not sustain - HELD THAT:- Reliance in this respect is placed on the decision rendered in Riddhi Siddhi Enterprises v. Commissioner of Goods and Services Tax (CGST), South Delhi Anr [ 2024 (10) TMI 278 - DELHI HIGH COURT] where it was held that In view of the fact that Petitioner does not seek to carry on business or continue the registration, the impugned order dated 15.12.2021 is modified to the limited extent that registration shall now be treated as cancelled with effect from 04.09.2021 i.e., the date when the Show Cause Notice was issued. The stipulation contained in the impugned order dated 29 April 2024 and which ordains that the cancellation of registration would take effect from 02 July 2017 quashed - petition allowed.

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• 2025 (1) TMI 1017
  Violation of principles of natural justice - cancellation of registration of the petitioner by a non-speaking and vague order - now the petitioner is ready to make the payment towards GST return as well as the penalty and interest - HELD THAT:- In view of the consensus between the parties, the matter is covered by the order in KIRAN ENTERPRISES GSTIN VERSUS COMMISSIONER, STATE GOODS ANOTHER [ 2024 (10) TMI 1306 - UTTARAKHAND HIGH COURT] , the present writ petition is also decided in terms of the said order. The petitioner shall be at liberty to move an application for revocation or cancellation of the order under Section 30(2) of the CGST Act, 2017, within two weeks. Petition disposed off.

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• 2025 (1) TMI 1016
  Constitutional validity of Circular No.94/13/2019-GST dated 28.03.2019 - denial of refund of the accumulated input tax credit on account of inverted rate of duty structure - HELD THAT:- The necessity for quashing the circular at the behest of the petitioner in the given facts and circumstances, may not be necessary, as the petitioner claims that the petitioner had excess Input Tax Credit all along and there was no occasion to wrongly utilize the Input Tax Credit, which was to lapse on 31.03.2017. The law on the Input Tax Credit has long settled by the Hon ble Supreme Court in The Collector of Central Excise, Pune Others Vs. Daichi Karkaria Ltd. Ors. [ 1999 (8) TMI 920 - SUPREME COURT ] wherein it has been held that There is no provision in the Rules which provides for a reversal of the credit by the excise authorities except where it has been illegally or irregularly taken, in which event it stands cancelled or, if utilised, has to be paid for. We are here really concerned with credit that has been validly taken, and its benefit is available to the manufacturer without any limitation in time or otherwise unless the manufacturer itself chooses not to use the raw material in its excisable product. The credit is, therefore, indefeasible. Perforce, the petitioner as was required to reverse Input Tax Credit lying unutilized Input Tax Credit for payment of tax for the period after the Month of July 2018. As such, credit was to lapse with effect from 01.08.2018. The petitioner reversed Input Tax Credit on 19.03.2019 for a sum of Rs. 6,68,66,289/- on 19.03.2019 which is not in dispute. There is also no dispute the aforesaid credit amount was also not utilized by the petitioner after 01.08.2018. Since, the petitioner had no occasion to utilize the accumulated credit after the cut off date towards the tax liability incurred, the question of imposing interest under Section 50 (3) in terms of above said circular cannot be justified. Conclusion - Validly availed ITC is indefeasible unless utilized improperly. The imposition of interest requires actual utilization of the credit. Petition allowed.

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• 2025 (1) TMI 1015
  Issuance of SCN without following the provisions of sub- section (5) of Section 74 of the Central Goods Service Tax Act, 2017 - HELD THAT:- Issue Notice returnable on 20.11.2024. By way of ad-interim relief, the proceedings pursuant to the impugned show cause dated 10th July, 2024 may continue, however no final order shall be passed without permission of this Court during the pendency of this petition.

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• Income Tax

• 2025 (1) TMI 1014
  Validity of reopening of assessment - Reasons to believe - addition u/s 68 - whether the notice issued u/s 148 and the order passed disposing of the objection can be said to be legal in eye of law? - delay filling SLP - As decided by HC [ 2024 (2) TMI 1506 - GUJARAT HIGH COURT] AO has while issuing notice and recording reasons completely gone into oblivion to the fact that in the present case, the assessment order u/s 143(3) was passed keeping in mind all the details available with regard to transaction done and on NMCE platform - AO has mechanically recorded that the return was processed only u/s 143(1) which itself goes to suggest that recording of reasons at the instance of Assessing officer was nothing but in a mechanical manner and with no application of mind. HELD THAT:- There is a gross delay of 209 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioner. Even otherwise, we see no reason to interfere with the impugned order passed by the High Court. Special Leave Petition is, accordingly, dismissed on the ground of delay as well as merits.

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• 2025 (1) TMI 1013
  Validity of Proceedings u/s 153C - issuance of the notice was preceded by the drawl of a Satisfaction Note by the jurisdictional AO - action u/s 153C for the six AYs - importance of material recovered in the course of a search or a requisition made and a right to reassess u/s 153A and 153C - usage of the expression have a bearing - As decided by HC [ 2024 (4) TMI 461 - DELHI HIGH COURT] abatement of the six AYs or the relevant assessment year would follow the formation of that opinion and satisfaction in that respect being reached. We come to the firm conclusion that the incriminating material which is spoken of would have to be identified with respect to the AY to which it relates or may be likely to impact before the initiation of proceedings under Section 153C - The power to undertake such an assessment would stand confined to those years to which the material may relate or is likely to influence. Absent any material that may either cast a doubt on the estimation of total income for a particular year or years, the AO would not be justified in invoking its powers conferred by Section 153C. It would only be consequent to such satisfaction being reached that a notice would be liable to be issued and thus resulting in the abatement of pending proceedings and reopening of concluded assessments. HELD THAT:- There is a gross delay of 142 and 172 days respectively in filing the Special Leave Petitions which has not been satisfactorily explained by the petitioners. Even otherwise, we see no reason to interfere with the impugned order passed by the High Court. Special Leave Petitions are, accordingly, dismissed on the ground of delay as well as merits.

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• 2025 (1) TMI 1012
  Estimation of income - bogus purchases - ITAT restricting the addition made by the AO being 100% to 6% - HELD THAT:- As in view taken and the conclusion arrived at by the Appellant Tribunal are based on material before it and after analysing the facts and figures available before it, when the Tribunal thought it fit to reduce the disallowance to 6% from 100%, the Tribunal had before it the facts which were duly analysed by it. Therefore, in our well considered view, no interference is called for in the said conclusion and findings of the Tribunal in the present appeal.

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• 2025 (1) TMI 1011
  Disallowance of depreciation - whether pipeline eligible for depreciation? - AO held that the liability provided in the books was of mere contingent liability, which cannot be considered as installation cost of the pipeline and therefore, the depreciation in respect was disallowed also confirmed by ITAT - HELD THAT:-Tribunal arrived at the finding of the fact after taking into consideration the terms of the Memorandum of Understanding (MOU) between the KPT and GMB and came to conclusion that the detailed working of the estimated liability worked out by the appellant company for the year under consideration is without making any contractual payment to KPT or GMB and as such liability was not agreed by the KPT or GMB and the proposal made by the appellant was rejected. No substantial question of law.

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• 2025 (1) TMI 1010
  Reopening of assessment u/s 147 - reasons to believe - independent satisfaction or borrowed satisfaction of AO - HELD THAT:- AO has failed to give the requisite details in the reasons recorded so as to form a requisite prima-facie belief that income has escaped assessment. The reasons recorded only refer to the information received from the credible sources that the search was carried out in case of Kushal Group and during course of search, incriminating documents were found and seized and on going through the information available on Insight Portal, it was found that the petitioners are one of the beneficiaries of the accommodation entries in form of different types of income like Long Terms Gains/Loss/Short Terms Gains/Loss and also beneficiary of unsecured loans etc., without there being any basis for forming such belief. Therefore, it is clear that the AO has recorded the reasons only on the basis of the borrowed satisfaction without there being any live-link between the information available on the Insight Portal and the data available on the record of the petitioners-assesses. AO cannot be said to have formed an independent satisfaction regarding the reasons recorded to re-open the assessment to come to the prima-facie conclusion that there is escapement of income.

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• 2025 (1) TMI 1009
  Reopening of assessment u/s 147 - reason to believe - independent application of mind or borrowed satisfaction - non disclosure of share transactions - HELD THAT:- Details of shares purchased and sold as per Contract note, copy of ledger of broker ASE Capital Markets Ltd and copy of bank statement of assessee for purchase of share and sale of shares were produced by the petitioner and the purchase and sale of share have order number, order time, trade number and trade time mentioned in the contract. The assessee purchased 60,000 shares of Kushal Ltd. The assessee has sold 1,05,465/- shares for Rs. 1,09,98,307/- leaving the balance of 1,94,535 shares as closing investments as on 31.03.2016 which is disclosed in the balance sheet and part of demat statement. It, therefore, cannot be said that the petitioner has not disclosed fully and truly all material facts relevant for assessment. Also appears from the reasons recorded that the no verification of the material on record is made by the respondent and there is no independent opinion that any income has escaped assessment due to any failure on the part of the assessee in not disclosing fully and truly all material facts necessary for assessment. From the reasons recorded it appears that the initiation of reopening proceedings are on the borrowed satisfaction as no independent opinion is formed and on bare perusal of the reasons recorded, it emerges that the AO considering the information received from the insight portal, has issued impugned notice forming reason to believe that the income has escaped the assessment on the presumption that the petitioner has been involved in creating the non-genuine profit which is already offered to tax in the return of income which is accepted in the regular course of assessment by passing the order under section 143 (3) of the Act. There is no basis to form reasonable belief for escapement of income except the information made available on the insight portal. The respondent-Assessing Officer has not considered the material on record to come to the conclusion that there is failure on the part of the petitioner to disclose truly and fully all material facts to have reason to believe for escapement of income. Assessing Officer could not have assumed the jurisdiction merely and solely relying upon the information made available on the insight portal without forming any independent opinion on the basis of the material on record vis-a-vis the petitioner is concerned.

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• 2025 (1) TMI 1008
  Stay for outstanding demand u/s 10(3) and u/s 12 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 - penalty u/s 42 of the BMA for the assessment year 2016-17 and penalty u/s 41 and 43 of the BMA for 2017-18 - HELD THAT:- On perusal of contents of the stay petitions filed by the appellant, we are of the considered view that the assessee has made out a prima facie case and also balance of convenience in its favour. The appellant also partly paid Rs. 2,15,08,248/- out of 20% taxes/penalties demands (Rs. 5,73,10,158/-) which is evident from chart filed for the assessee. We also conciously note that the appellant has offered balance being Rs. 3,58,01,910/- out of the 20% towards disputed demand for two assessment years will be paid in three installments on or before the 31.03.2025. Therefore, appellant has given assurance that the appellant will satisfied the balance payment of 20% disputed demand on or before 31.03.2025, in our considered view, it is a fit case for granting stay for balance outstanding demands. Thus, we stayed the balance outstanding demand for a period of 6 months from the date of this order or till disposal of the appeals filed by the assessee whichever is earlier. Appeals filed by the assessee are posted for hearing on 03.02.2025 for which no separate notice shall be issued to both sides. Stay Applications filed by the assessee are allowed.

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• 2025 (1) TMI 1007
  Addition towards undisclosed income - rejecting the books of account of the assessee and directing to estimate 18.75% of Net profit on total sales (both accounted and unaccounted and other income), HELD THAT:- The profits / income has ultimately been determined at figures which are much more than even the gross sales turnover worked out by Ld. AO. It could never be possible that the assessee has earned income which is much more than its gross receipts. The assessed income for all the AY(s) put together was much more than the accounted and unaccounted turnover as considered by AO. Therefore, the working of Ld. AO is clearly illogical and without any rational basis and accordingly, the same has rightly been rejected by Ld. CIT(A). The inevitable conclusion would be that the books of the assessee were inaccurate unreliable, incomplete and incapable of reflecting the true and correct picture of assessee s financial affairs. The same could, therefore, be not relied upon to determine the income of the assessee. The assessee failed to reconcile the errors in its books of account. In such a situation, the action of Ld. CIT(A) in rejecting the books u/s 145(3) is to be upheld. The same was quite logical on the given facts. Therefore, the action of Ld. CIT(A) in rejecting the books is in accordance with law. We concur with the same. Profit estimation by Ld. CIT(A) - We find that the same is based on average net profit earned by the assessee on regular receipts in all the years. The process of averaging would take care of any abnormal situation and iron out the differences that may be arising in various financial years. Therefore, this methodology of estimating the income of the assessee also found our concurrence. The methodology could not be faulted with. We concur with the working made by Ld. CIT(A). Separate additions as made by AO u/s 37(1) or u/s 40A(3) would have no legs to stand. It is quite logical that once the books have been rejected and the income has been estimated on gross receipts, no separate addition / disallowances would be warranted. This view is duly supported the cited decision of Hon ble High Court of Madras in CIT v. Amman Steel Allied Industries [ 2015 (11) TMI 395 - MADRAS HIGH COURT ] - Thus, the separate disallowance as made by Ld. AO u/s 37(1) and 40A(3) has rightly been deleted by Ld. CIT(A). Cash found and seized for AY 2021-22 - It is a fact that the assessee has filed return of income in response to notices issued u/s 153A and offered additional income of 26.92 Crores from AYs 2018-19 to 2020-21. The same is much more than the cash found for Rs. 919.50 Lacs. In the absence of any other source of income, the benefit of telescoping would be available to the assessee. Therefore, the action of Ld. CIT(A) in granting of benefit thereof to the assessee could not be faulted with.

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• 2025 (1) TMI 1006
  Higher authorities entertain a fresh claim of the assessee, where it was not claimed in the ITR, but was claimed before the CIT(A) - Appellant has not made a claim for deduction u/s 54F during the assessment proceedings, but simply submitted that he may be allowed deduction u/s. 54F HELD THAT:- We observe that similar issue was considered and adjudicated in the case of R. Venkata Dhana Lakshmi [ 2021 (6) TMI 982 - ITAT VISAKHAPATNAM] and decided the issue in favour of the assessee. Assessee is eligible for deduction under section 54F of the Act from the long-term capital gains, though assessee has made a claim while filing the return of income in response to notice under section 148 of the Act, Appellate Authorities are not barred from entertaining the fresh claim. Hence, we set aside the order of the lower authorities and direct the Ld.AO to verify the facts regarding acquiring the new asset and allow deduction u/s.54F in respect of long-term capital gains. Accordingly, the grounds raised by the assessee on this issue are allowed.

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• 2025 (1) TMI 1005
  TP adjustment - benchmarking of outstanding receivables from AEs for a period over and above the agreed period of realization of sale consideration - HELD THAT:- We find that outstanding receivables from AEs exceeding the agreed days as per agreement is a separate international transaction as it becomes the transaction of providing capital financing including lending of receivables which is a separate international transaction which cannot be subsumed in the normal transaction of purchase and sales or provision of services. It is an undisputed fact that allowing credit to AEs beyond the agreed days is allowing AE to retain money more than agreed time, which results in AE enjoying those funds without any cost to AE. Thus, it amounts to transaction of providing funds to its AE without any Charge. As the agreed terms of payment is mentioned in the agreement of services, the outstanding beyond an agreed term is never the part of agreement of provision of sales or services, further there is no link between the overdue outstanding receivable and the extended credit period allowed to the AE, therefore it is not linked with those transactions. Hence, it is a separate international transaction and therefore it should be benchmarked separately. To that extent, we do not find any infirmity in the order of the ld. TPO. TPO has computed the interest of trade receivable by applying the SBI PLR of 13.27% - We do not find any invoice raised by the assessee on its AEs in Indian currency. The computation of rate of interest @ 13.27% adopted by the ld. TPO and confirmed by the ld. DRP is devoid of any merit. As per the order of the TPO himself, if the invoices are raised in foreign currency, the interest rate should be charged on the basis of prevailing LIBOR rate + appropriate mark-up. Therefore, as the ld. TPO has not charged interest adopting LIBOR rate, we direct the ld. TPO to apply the LIBOR rate as the basis for computation of interest. Mark-up over and above - Generally, risk involved in this type of overdue receivable is minimal. Thus, it is for the assessee to show nature of risks involved. Thus, Assessee is directed to show that what mark-up should be charged on LIBOR rate for benchmarking the above transaction with various risk factors involved. The ld. TPO may verify the same and then after examination, apply the LIBOR after verification of invoices and determine the mark-up on the basis of various risk factors. Appeal of the assessee is allowed for statistical purposes.

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• 2025 (1) TMI 1004
  TP Adjustment - comparability - rejection of usage of multiple years data - AR seeks inclusion of M/s Automotive Stamping Assemblies Ltd. and M/s Majestic Ltd.- HELD THAT:- These entities were initially selected as comparable entities. However, the same could not pass product filter. TPO rejected the same since both these entities were loss making entities. During proceedings before Ld. DRP, TPO reported that both these entities were not persistent loss making entities but these entities had incurred loss only in the current year. Since, TNMM require broad comparability and these entities were initially selected as comparable entities and in view of the reporting made by TPO, we direct AO / TPO to accept both these entities as comparable entities. The assessee is directed to provide the requisite data of these entities. Exclusion of M/s Spicer India Pvt. Ltd. on the ground that this entity has significant related party transactions and exclusion of M/s JBM Auto Ltd. on the ground that this entity is functionally not comparable - AR has placed on record product information as available in public domain. The same is not supported by any segmental data or financials of these entities. Therefore, merely on the basis of product information as available in public domain, such argument cannot be accepted. We are also of the opinion that TNMM require broad comparability only and therefore, if business model is same, these entities could be accepted. Therefore, M/s Spicer India Pvt. Ltd. has rightly been included. The Ld. AR stated that segmental of M/s JBM Auto Ltd. is available and the assessee is in a position to provide the requisite details thereof. Considering the same, the issue qua this entity is restored back to the file of AO/TPO with a direction to the assessee to provide segmental information. AO / Ld. TPO is directed to re-adjudicate the issue with respect to this entity. AR has stated that forex exchange loss would be nonoperating in nature. This argument could not be accepted since the assessee has carried out import transactions and forex loss has direct linkage with the international transactions as carried out by the assessee. Therefore, forex losses / gains have to be considered as operating in nature. AR has sought various economic adjustments. However, it was admitted position that these adjustments were not granted by Tribunal in earlier years. Therefore, no indulgence is required on the same. Disallowance as per the provisions of Sec.43A - It could be seen that the assessee has failed to provide the requisite details of forex loss before lower authorities. AR has submitted that the impugned loss has two components i.e., ECB Loan which is capital in nature and second component is forex on Buyer s credit which is revenue in nature. Since adequate details thereof were not filed before lower authorities, we restore this issue back to the file of Ld. AO for fresh adjudication with a direction to the assessee to substantiate its case. The corresponding grounds stand allowed for statistical purpose. Additional Depreciation not allowed by AO in the absence of revised return - HELD THAT:- Assessee has claimed depreciation in subsequent years on WDV of the assets. The additional depreciation was neither provided in the books nor claimed in the return of income. In such a case, the allowance of claim would disturb the working of depreciation in all the subsequent years which could not be permitted at this stage. Even otherwise also, this claim would be revenue neutral since the assessee has claimed as well as allowed depreciation on WDV of the assets in subsequent years. This being so, this claim cannot be accepted in this year. The corresponding grounds raised by the assessee stand dismissed.

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• 2025 (1) TMI 1003
  TP Adjustment - TPO/DRP considering bank guarantee rates as suitable comparable under CUP method for determination of ALP of the international transaction i.e. Stand-by Letter of Credit (SBLC) issued to foreign AE - HELD THAT:- We find that the assessee s bank has charged 0.50% per annum for the period after 17.06.2018 till 17.06.2022 and before that assessee was charged @ 1% for the period 17.06.2016 to 17.06.2018. Thus, in the financial year 2016-17 assessee had paid 1% as the cost of extending the SBLC to AE, for which assessed should have been compensated by the AE. Therefore, we are inclined hold that Ld. AO/TPO shall consider rate of 1%, to be ALP for this international transaction and accordingly we allow the grounds No.5-7. Further as per the provisions of Rule 115 of the Income-tax Rules, 1962, the TPO will apply the correct conversion rate for which assessee may also be given opportunity of hearing. Disallowance u/s 35(2AB) - revenue expenditure claimed by the Appellant, which was in excess of the amount quantified by the DSIR - further disallowing the same u/s 37(1) - whether AO has not examined the aspect of differential amount being for the purpose of business only? - HELD THAT:- We are of the considered view that section 37 of the Act is the primary basis for consideration of an expense debited in the books before being considered for a disallowance u/s 35(2AB) of the Act and the fact that a part of the expenditure stands allowed on the basis of Form 3CL as capital expenditure. The remaining should be allowed as revenue expenditure and both the tax authorities have fallen in error in not considering the same. Accordingly, these grounds are also allowed.

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• 2025 (1) TMI 1002
  TP adjustment - corporate guarantee commission addition @ 1.9% on the amount guaranteed as corporate guarantee given to AEs - HELD THAT:- As per assessee s own case for the earlier AYs 2014-15 and 2016-17 as well as following the principle of consistency and respectfully following the decision of this Tribunal [ 2023 (2) TMI 1174 - ITAT VISAKHAPATNAM ], we hereby hold that the corporate guarantee commission is an international transaction and accordingly should be charged @ 0.50% on the corporate guarantee amount given to the AEs. Therefore, we have no hesitation to delete the addition confirmed by the Ld. DRP being 1.9% of the corporate guarantee amount. Thus, the grounds raised by the assessee are allowed.

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• 2024 (12) TMI 1520
  Rejection of Application filed for approval u/s 80G - assessee had selected the wrong code while filing the application - HELD THAT:- Application filed by the assessee was rejected on account of a typographical error of wrong mentioning of particular code and no other adverse findings has been given on merit by CIT, Exemption, Pune. In the light of the circular no 7/2024 issued by CBDT on 25-04-2024, i.e. after the filing of application by the assessee wherein the issue of mentioning wrong section code has been addressed / considered as a common frequent error and also observing the fact that in the instant case Ld. CIT, Exemption, Pune has not given any adverse finding on merits of the case, against the assessee, we deem it fit to set-aside the order passed by Ld. CIT, Exemption and remand the matter back to him with the direction to treat the application of the assessee as filed under code 14 clause (iii) of first proviso to sub-section (5) of section 80G (or under the desired section code) and consider the same for grant of approval u/s 80G(5) of the IT Act in accordance with law after providing reasonable opportunity of hearing to the assessee. Appeal filed by the assessee is allowed for statistical purposes.

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• Customs

• 2025 (1) TMI 1001
  Rectification of mistake - error apparent on the face of the record or not - Imposition of penalty on the Appellant under Section 112 (a) of the Customs Act, 1962 - cryptic and non-speaking order - HELD THAT:- There is no error apparent on the face of the record. No case for review under Order XLVII Rule 1 of the Supreme Court Rules 2013 has been established. The Review Petitions are therefore, dismissed.

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• 2025 (1) TMI 1000
  Admission of appeal on substantial question of law - HELD THAT:- The appellant shall file requisite number of informal paper books prepared out of Court including therein all relevant materials used before the learned Court below within ten weeks from date and serve copies thereof upon the learned advocate for the respondent. Let the matter be listed twelve weeks hence along with CUSTA/65/2024.

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• 2025 (1) TMI 999
  Seeking to recall the permission granted by them to the respondent No. 3 to proceed with the auction of the Cargo under the bills of lading - direction to hand over the entire sale proceeds of the Cargo to the petitioner, unconditionally and free of all lien - Whether the goods were in fact destined for India or there was a mistake in the delivery of goods by the respondent No. 4/Shipper at Nhava Sheva Port, so as to entitle the petitioner to claim a mistake by the respondent Nos. 1 and 2, in having custody of the goods and continuing with it, and thus entitlement to the auction money? HELD THAT:- The definition of the word importer , as defined in Section 2 (26) of the Customs Act, in relation to any goods, at the time between their importation and the time when they are cleared for home consumption, indicates that it includes any owner, beneficial owner or any person holding himself out to be the importer. This would indicate that the definition is an inclusive one and considering the definition of beneficial owner , as defined in Section 2(3-A) of the Customs Act, which defines it to mean any person on whose behalf the goods are being imported or exported, or who exercises effective control over the goods being imported or exported, would further indicate that it would also mean a person, who is capable of exercising legal control and possession over the same. The language of the definition of importer , nowhere indicates that such importer, for the purposes of importing of goods into India, has to be an Indian Party. A perusal of the Public Notice No. 33/2018, indicates that it was issued on account of a number of instances where consignments of hazardous waste, other waste or restricted items were imported in the name of certain importers and remained uncleared, without anyone coming forward to claim the cargo, leading to a suspicion that such consignments were imported for dumping hazardous waste from the exporting country which was posing a serious environmental threat. It is in this background that the requirement of details regarding the (a) Import and Export Code (IEC) of the Importer, (b) GST identification number (GSTIN) of the importer and (c) Official e-mail id of the importer, were directed to be supplied by the importers to their exporters, so that they could be included in the Bills of Lading at the time of booking of such consignments, which was to be applicable w.e.f. 01/04/2018 - What is material to note is that neither Public 15 Notice No. 33/2018; Public Notice No. 154/2018 nor the pursis referred to above, indicate that any penalty has been prescribed for the Bills of Lading and the Import General Manifest, not disclosing the (a) Import Export Code (IEC) of the Importer, (b) GST identification number (GSTIN) of the importer and (c) Official e-mail id of the importer. If a requirement is claimed to be mandatory, then its violation, ought to carry consequences, which is not the position as is reflected from Public Notice No. 33/2018, Public Notice No. 154/2018 or for that matter the stand of the respondents Nos. 1 and 2 as reflected from the pursis dated 10/12/2024. Till 31/11/2024, the requirement to indicate the name of the consignee as well as to furnish the details of the consignee such as IE Code, GSTIN and other requirements as indicated in Public Notice Nos.33/2018 and 154/2018, which now stand culminated in Statutory Regulations, vide Regulation No. 4 of the Regulations of 2018, stood postponed, on account of the transitional provisions, as contained in Regulation 15 (2) of the Regulations of 2018. The provisions of Sections 30, 31 and 32 of the Customs Act, relating to Arrival or Import manifest, therefore have to be construed accordingly - It therefore does not now lie with the petitioner to contend that the goods were never destined for India, and the respondent No. 4, ought not to have discharged them at Nhava Sheva, India, in the custody of the respondent Nos. 1 and 2. The contention is, therefore, rejected. It is equally trite, that since a plea of fraud is being invoked, the same would require evidence to be led, as disputed questions of fact would be involved and would not permit the invocation of the extraordinary jurisdiction of this Court under Article 226 of the Constitution. In the instant case, it is not in dispute that the goods reached ICD Wardha, between 17/01/2023 to 09/03/2023, on account of their transshipment from Nhava Sheva, India. The obligation of the petitioner, who claims title to such goods, to get them cleared, after following the procedure as prescribed in Sections 45 to 47 of the Customs Act, thus accrued on such dates when the goods reached ICD Wardha. The petitioner, thus had to get them cleared within a period of 30 days as and when they were unloaded at ICD, Wardha - the earlier communication dated 15/05/2024 (pg.212) by the petitioner to the Assistant Commissioner of Customs, ICD Wardha, in fact, indicates its knowledge of the entire set of events which had led to the consignment reaching ICD Wardha, and so also its obligation and responsibility to get them cleared as the said communication specifically records the intention of the petitioner to pay the customs duty and clear the consignments. Even if customs duty was not payable on the consignment, as is contended, still, this communication indicates the willingness of the petitioner to clear the consignment, which in turn would mandate it to follow the procedure for clearance as indicate in Sections 45 to 49 of the Customs Act. The action of the respondent Nos. 1 and 2, permitting the goods to be auctioned and that of the respondent No. 3, in auctioning the goods, in view of the above discussion, cannot be faulted with. For the same reasons, we also hold that the claim by the petitioner that the custody of the respondent Nos. 1 to 3, was invalid, is incorrect, as a result of which, the plea by the petitioner, that the deductions as contemplated by Section 150 (2) of the Customs Act, are not attracted or applicable is turned down. Conclusion - The primary responsibility for payment of the rent/demurrage charges is that of the importer, who obviously would be the person claiming title to the goods, which in the present matter is the petitioner. There are no merit in the petition. The writ petition is dismissed.

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• 2025 (1) TMI 998
  Absolute confiscation - penalty - Seizure of Gold of foreign origin - existence of reasonable belief of smuggled nature of goods or not - iota of evidence brought in by the investigation to prove that the seized gold is of foreign origin or not principles of natural justice. Demand based on assumptions and presumptions - HELD THAT:- It is observed that 7 pieces of fine gold weighing in total of 449.300 gms was seized from Appellant-1 viz. Shri Souvik Mondal on the ground that the said gold pieces were smuggled in nature and illegally transported by the Appellants without any valid documents for its licit purchase. However, the department has failed to produce any evidence to corroborate that the gold seized was smuggled in nature. No evidence has been adduced to the effect to prove the mens rea of the appellant in the alleged act of smuggling/illegal importation. The impugned order has been passed by the lower authorities on the basis of presumptions and assumptions. No evidence has been brought on record to substantiate the allegation that the said gold is of foreign origin and illegally imported into India. Existence of reasonable belief or not - HELD THAT:- Section 123 of the Customs Act clearly stipulates that a reasonable belief that the gold is of smuggled in nature is mandatory for invocation of the said provision. However, in the present case no reasonable belief has been formed by the officers that the gold is of smuggled in nature and hence I hold that provisions of Section 123 are not applicable in this case and the burden lies on the department to prove that seized gold is of smuggled in nature - no evidence has been brought on record by the Revenue to substantiate the allegation that the gold is of foreign origin and smuggled in nature. Principles of natural justice - HELD THAT:- It is observed that there was no Panchanama drawn at the time of seizure of the gold. The appellants have written to the Authorities on multiple times for release of the gold seized and supplying of Relied Upon Documents (RUDs), but there was no response from the authorities. Thus, the principles of natural justice have not been followed during the process of adjudication. Confiscation - penalty - HELD THAT:- Accordingly, the confiscation of the gold in the impugned order is not sustainable on account of non-following of the principles of natural justice also - As the confiscation of the gold is not sustained, the penalties imposed on the appellants are also not sustainable. Conclusion - i) No evidence has been brought on record to substantiate the allegation that the said gold is of foreign origin and illegally imported into India. ii) No evidence has been brought on record by the Revenue to substantiate the allegation that the gold is of foreign origin and smuggled in nature. iii) The principles of natural justice have not been followed during the process of adjudication. iv) The confiscation of the gold in the impugned order is not sustainable on account of non-following of the principles of natural justice also. v) As the confiscation of the gold is not sustained, the penalties imposed on the appellants are also not sustainable. Appeal allowed.

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• 2025 (1) TMI 997
  Classification of imported goods - Broom Sticks (between 140 to 160 cm.) - to be classified under the CTH 14049090 or under CTH 96031000? - denial of benefit under Sl. No.1580(I) of Notification No.46/2011-CUS dated 01.06.2011. and Sl. no. 93B of Notification No. 2/2017 dated 01.07.2017 - HELD THAT:- Sub-heading 9603 specifically covers brooms, whereas chapter sub-heading 1404 deals with vegetable products not elsewhere specified . In the Order-in-Original, the Ld. adjudicating authority has observed that CTH 1404 covers raw stalks of broom . It is observed that chapter 1404 is a residuary sub- heading covering vegetable products not elsewhere specified. As per the General Rules of Interpretation for classification of goods, a specific heading is always preferred over a general heading. In the present case it is observed that the goods imported by the appellant are brooms which is specifically covered under the sub-heading 9603 whereas sub-heading 1404 is a general entry covering vegetable material not elsewhere specified. Resorting to such general entry is required only when there is no specific sub-heading covering the goods. In this case there is a specific sub-heading 9603 is available in the Tariff covering the goods brooms and broomsticks used for making brooms. Thus, on comparison of the description of the entries available in CTH 9603 and CTH 1404, the imported goods are more appropriately classifiable under Chapter 96 and not under Chapter 14. Chapter Note 3 of Chapter 96 provides that such expression in heading 9603 applies to materials which are ready for incorporation without division in brooms or which require only such further minor process as trimming to shape at the top, to render them ready for such incorporation. In other words, broom sticks can be of vegetable twigs and are merit classifiable under CTH 96031000 when ready for incorporation without division in broom or when require minor process as trimming to shape at the top to render them ready for such incorporation - the goods imported by the appellant are appropriately classifiable under the CTH 96031000 and the appellant would be eligible for the benefit of Sl. No.1580 (I) of Notification No.46/2011-CUS dated 01.06.2011 with respect to BCD and Sl. No.144 of Notification No.02/2017-CUS towards exemption of IGST. Thus, the demand of customs duty of Rs.4,59,025/- along with interest confirmed in the impugned order, by denying the benefits of the above said notifications, is not sustainable and accordingly, the same is set aside. Conclusion - The demand of customs duty confirmed in the impugned order by denying the benefit of the Notification No. 46/2011-Cus on the ground of mis declaration is legally not tenable. The benefit of Notification No.002/2017- ITR dated 01.07.2017 available for IGST exemption cannot also be denied to the importer/appellant. Assuming but not admitting that the goods are merit classifiable under CTH 14049090, then also benefit of Sl. No. 93B of Notification No. 002/2017-ITR dated 01.07.2017 for IGST and Sl. No. 116(I) of Notification No.46/2011-CUS dated 01.06.2011 for BCD, is available to the importer/appellant. The demand of customs duty of Rs.4,59,025/- along with interest confirmed in the impugned order, by denying the benefits of the above said notifications, is not sustainable. The order of confiscation and imposition of fine in lieu of such confiscation in the impugned order set aside - penalties set aside. Appeal allowed.

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• 2025 (1) TMI 996
  Benefit of exemption from payment of CVD under N/N. 4/2006-CE dated01.03.2006, as amended - declaration of goods as Rutile Sand/Rutile in the Bill of Entry and claimed classification under Heading No.26.14 of the Customs Tariff - Extended period of limitation. HELD THAT:- The appellant-company had been importing the said goods by declaring the same as Rutile Sand/Rutile all along in the Bills of Entry filed by them. At the time of importation, they have submitted all the necessary documents, such as, invoices, packing lists, test certificates, certificates of origin, bills of lading, marine insurance, etc. The said goods were thereafter examined by the Customs authorities and after being satisfied about the correctness of the appellant s claim, the Customs authorities duly assessed the bills of entry. The Customs authorities duly allowed the exemption, as claimed under the said notifications, and no C.V.D. was charged in the assessed bills of entry. The appellant has paid the duty according to the assessed bills of entry and cleared the said goods. The appellant has been importing the said goods and declared the same as Rutile sand/Rutile even on earlier occasions. The Test reports attached to the earlier imports indicate that the same have 90% to 96% of Titanium Dioxide. Upon due examination, the appellant was allowed such exemption in respect of all their imports right from the year 2007 up to September 2012. Along with the bill of entry, the appellant always submitted copy of test certificate of the foreign supplier which mentioned the Titanium Dioxide content in the Rutile Sand as 95% and above. The goods imported by the appellant in the years 2007 to 2010 has enclosed the Certificate of Analysis which shows the Titanium Di Oxide percentage ranging above 95%. The said goods were declared by the appellant-importer as Rutile sand/Rutile and the Customs authorities had duly allowed the exemption as claimed under the said notifications and no C.V.D. was charged in the assessed bills of entry. Extended period of limitation - HELD THAT:- In the instant case in respect of all the four Bills of entry, the appellants have made the correct declaration at the time of importation of the said goods as Rutile Sand/Rutile and correctly claimed classification under the Heading 26.14 of the Customs Tariff and also rightly claimed exemption from payment of C.V. Duty under the said notifications. Thus, the allegations of mis-declaration in all the four Bills of Entry in the instant case are not sustainable - the demands of differential duty along with interest confirmed in the impugned order by invoking the extended period of limitation is not sustainable. Conclusion - i) The goods imported by the appellant in the years 2007 to 2010 has enclosed the Certificate of Analysis which shows the Titanium Di Oxide percentage ranging above 95%. The said goods were declared by the appellant-importer as Rutile sand/Rutile and the Customs authorities had duly allowed the exemption as claimed under the said notifications and no C.V.D. was charged in the assessed bills of entry. ii) The demands of differential duty along with interest confirmed in the impugned order by invoking the extended period of limitation is not sustainable. Appeal allowed in part.

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• 2025 (1) TMI 995
  Applicability of exemption notification issued under the Customs Act or Customs Tariff Act, 1975 on import of inputs and parts and principles to be adopted for the purposes of valuation of goods as detailed out in Annexure II - benefit of Sl. No. 5D (b) of Notification No. 57/2017-Customs dated 30th June 2017 (As amended) - import of inputs or parts for use in manufacturing of display assembly which in turn will be used for manufacturing of cellular mobile phones - inputs or parts imported for use in manufacturing of display assembly which get scrapped during the manufacturing process - whether the availed customs duty exemption to be fully reversed or to be reversed in proportion to the values of scrap, so generated? Whether benefit of Sl. No. 5D (b) of Notification No. 57/2017-Customs dated 30th June 2017 (As amended) shall be available, in case of import of inputs or parts for use in manufacturing of display assembly which in turn will be used for manufacturing of cellular mobile phones? - HELD THAT:- On the question of whether the benefit of Sl. No. 5d(B) of Notification No. 57/2017-Customs, dated 30th June 2017 (as amended) shall be available in Respect of inputs or parts imported for use in manufacturing of Display Assembly which get scrapped during the manufacturing process, the Applicant imports inputs and parts for use in manufacturing of display assemblies which in turn are used in manufacturing of cellular mobile phones - The process of manufacturing display assemblies is subject to a certain amount of process loss on account of modification of parts for the purpose of assembling, process failure, etc. The inputs and parts damaged during the manufacturing process are scrapped by the Applicant. The scrap generated during the manufacturing process are sold to the Government authorised e-waste vendors who are empanelled with the Applicant. The e-waste vendor collects the scrap and disposes off as per the authorised Government norms. Whether the benefit provided in relation to inputs and parts for use in manufacture of display assembly shall be available in respect of inputs or parts which were imported for use in manufacture of display assembly but get damaged in the manufacturing process and thereby do not form part of a finished display assembly? - HELD THAT:- It is imperative to analyse the scope of benefit provided under Entry No. 5D(b) of the exemption notification. The benefit is provided on import of inputs and parts for use in manufacture of display assembly. It is analysed that whether inputs and parts which are imported for the purpose and with the intention to use in manufacture of display assemblies but get damaged during the manufacturing process and do not form part of the finished display assembly can be said to be imported for use in manufacture of display assembly. The meaning of the term its used in the definition of advance ruling under Section 28E(b) of Customs Act also needs to be looked into. This is because the term its does not clarify whether advance ruling can only be sought prior to first importation of a particular goods which has never been imported or it can also be sought before importation of a goods which is being imported by the Applicant. Further, it is trite law that principle of harmonious construction must be kept in mind while construing any statute. This principle enunciates that while interpreting any law. the statute must be read as a whole, and all the legal provisions must be read harmoniously to give effect to each word of the statute. Accordingly, to correctly interpret the intention of the legislation at hand. Section 28E(b) and Section 28-I(2) needs to be read together. The exemption benefit is available to Inputs or parts for use in manufacture of Display Assembly of cellular mobile phones . The term, for use mentioned in Sl. No. 5D(b) has not been defined in the Customs Act and Notification No. 57/2017 - the Applicant is of the opinion that the exemption from BCD under Sr. No. 5D(b) of Notification No. 57/2017 is available to all inputs and parts used in the manufacture of Display Assembly irrespective of whether the same get incorporated in the manufactured Display Assembly or are damaged or scrapped during manufacturing. Further, it is trite law that an exemption notification ought to be construed strictly in order to determine the applicability of the exemption provision. Conclusion - i) The benefit shall be available in case of import of inputs or parts for use in manufacturing of display assembly which in turn will be used for manufacturing of cellular mobile phones. ii) The benefit shall be available in respect of inputs or parts imported for use in manufacturing of display assembly which get scrapped during the manufacturing process. iii) The contention of the Port Commissionerate to state that the present Advance Application Ruling filed by the Applicant is not eligible in terms of Section 28E(b) merits rejection is completely untenable.

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• Corporate Laws

• 2025 (1) TMI 994
  Seeking Court s intervention to direct respondents to adopt a rational policy framework to prevent registration of illegal buildings and to verify the authenticity of documentation submitted for project registration - HELD THAT:- It is pertinent to note the legislative intent behind the Real Estate (Regulation and Development) Act, 2016. The RERA Act, introduced in 2013 and enacted in 2016, was born out of the need for regulatory measures in a sector that had seen substantial growth but lacked adequate consumer protections. As stated in the Act s Statement of Objects and Reasons of the Act, the primary objective is to safeguard home buyers and promote transparency in real estate transactions. This regulatory framework was envisioned to address consumer grievances by establishing accountability mechanisms for developers, minimizing fraud, and reducing delays. Section 3 of the RERA Act mandates prior registration of real estate projects with RERA, prohibiting any advertisement or sale without proper registration, thus reflecting the legislature s intent to curtail unscrupulous practices in the real estate sector. The legal position is well settled that, under Article 226 of the Constitution, courts should not engage in speculative or roving inquiries. In A. Hamsaveni Ors. v. State of Tamil Nadu, [ 1994 (8) TMI 322 - SUPREME COURT ] the Supreme Court held that a petitioner must independently establish a prima facie case, and that court proceedings should not be used as a means to conduct speculative investigations. Similarly, in N.K. Singh v. Union of India [ 1994 (8) TMI 315 - SUPREME COURT ] the Court emphasized that a speculative inquiry is neither warranted nor justified under judicial review, particularly when private rights are at issue. The principle was reiterated in Ratan Chandra Sammanta v. Union of India, [ 1993 (5) TMI 202 - SUPREME COURT ] where it was held that a writ should only be issued when the petitioner has an established right, and that speculative inquiries unsupported by evidence are impermissible. Conclusion - The integration of local authority websites with MahaRERA s portal is directed within three months to enhance document verification. The commencement and occupation certificates be uploaded within 48 hours of issuance until full integration is achieved. The PIL petition is hereby disposed of.

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• Insolvency & Bankruptcy

• 2025 (1) TMI 993
  Admissibility of section 7 application - Appellant s proposal for a One-Time Settlement (OTS) with Indian Bank affects the proceedings initiated under Section 7 of the Insolvency and Bankruptcy Code (IBC) or not - right of Union Bank of India and Bank of Baroda to intervene in the insolvency proceedings - HELD THAT:- In the facts of the present case and in view of the law laid down with Hon ble Supreme Court in GLAS Trust Company [ 2024 (10) TMI 1185 - SUPREME COURT (LB) ] the appropriate recourse to be taken by the Appellant in the present matter is to permit the Financial Creditors to file 12A Application through the IRP in accordance with Section 12A read with Regulation 30A of CIRP Regulation, 2016. It is open for the Financial Creditor while filing the application under Section 12A to take into consideration the CIRP cost by giving a Form FA to the IRP for filing the Application. The other Financial Creditors including Union Bank of India, Bank of Baroda or any other Financial Creditors are free to file their objections, in the event their dues are not settled or taken care of. Conclusion - The appropriate recourse to be taken by the Appellant in the present matter is to permit the Financial Creditors to file 12A Application through the IRP in accordance with Section 12A read with Regulation 30A of CIRP Regulation, 2016. The acceptance of an OTS can justify the withdrawal of insolvency proceedings under Section 12A, provided that CIRP costs are addressed and other Financial Creditors rights are considered. There are no reason to keep the appeal pending. The Appeal is disposed of with giving liberty to the Financial Creditor - Indian Bank to file an application under 12A through IRP in accordance with 12A Regulation 30A which shall be done within two weeks from today.

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• PMLA

• 2025 (1) TMI 992
  Confirmation of provisional attachment order - proceeds of crime - lapse of 180 days as stipulated under Section 5(3) of the Prevention of Money Laundering Act, 2002 (PMLA) - reasons to believe - HELD THAT:- The period intervening was largely effected by Covid-19 started after issuance of PAO on 16.01.2020. The period of Covid-19 from 15.03.2020 till 28.02.2022 and has been eliminated by the Apex Court in COGNIZANCE FOR EXTENSION OF LIMITATION [ 2022 (1) TMI 385 - SC ORDER ] for termination of the proceedings under any statute. In the light of the exclusion of the period of Covid-19 for termination of the proceedings, the impugned order would not lapse. The issue aforesaid has been dealt with by this Tribunal in many cases where the judgment of the Apex Court not only in the Suo Motto Petition No. 03/20 decided by the order dated 10.01.2022 but also in the judgment in the case of Prakash Corporates vs. Dee Vee Projects Limited [ 2022 (2) TMI 1268 - SUPREME COURT ] has been considered. An elaborate judgment was given by Telangana High Court which has been referred by this Tribunal in its order in Bhuneshwar Prasad Verma vs. The Deputy Director, Directorate of Enforcement, Bhubaneswar [ 2024 (10) TMI 227 - APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI ]. It was held in the case that Since the period of Covid19 from 15.03.2020 till 28.02.2022 has been excluded by the Apex Court for termination of proceedings, the Telangana High Court took notice to it and held that if period of 180 days was falling during the period eliminated by the Apex Court for termination of proceeding, then the provisional attachment would not lapse . It is not necessary that attachment of the property can be only of the person who is accused in the FIR or ECIR. It can be even of a person who is not an accused but holding the property out of proceeds of crime. In that case there cannot be an investigation against the person, who is not made an accused. Prosecution complaint is filed against the accused while property can be attached if someone is in possession of proceeds on its transfer, settlement or adjustment by the accused in favour of such person. In that case though the person occupying or holding the property may not be accused, the property can yet be attached and if such person is not an accused there would be no question of filing prosecution complaint against such a person. The fact on record shows that acquisition of property under attachment was during the check-period from 2007 to 2014 and the respondent have given complete money trail to show purchase of immovable properties out of the proceeds. It was generated after taking loan from the Punjab National Bank apart from other Banks and Financial Institutions by M/s BPSL and thereupon diverted the amount and thereby account of the company was declared to be forged/fraud by the banks after holding it to be Non-Performing Asset. In the light of the aforesaid and looking to the serious allegations against the appellants and others we do not find any reason to cause interference in the impugned order. It is a fact on record that the attachment of the property is pending consideration before the Apex Court in the appeal where an interim orders said to have been passed. Looking the fact, aforesaid, couple with the facts that subsequent attachment order was passed by the respondent to attach the property which was directly or indirectly the proceeds out of criminal activity related to schedule offence. The appellant s Company purchased the property in question on 09.11.2012 for a consideration of Rs.74,35,00,000/-. It was much subsequent to the year 2007 and between the year 2014. The period of commission of crime cannot be taken from the date the account of BPSL were declared NPA or registration of FIR, rather, checkperiod involved in this case is from the year 2007 to 2014 when BPSL had taken the loan and started committing default in making the repayment. The amount was diverted to other entities / companies, therefore, even the case of moneylaundering was found. Conclusion - The period from 15.03.2020 till 28.02.2022 is eliminated for termination of proceedings. The attachment of property can be if any person is in possession of the property as given under Section 5(1)(a) and as per Section 8(3)(a), the continuation of the attachment during the period of investigation for a period of 365 days or pendency of the proceedings relating to any offence under the Act. The attachment orders were upheld - Appeal dismissed.

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• 2025 (1) TMI 991
  Money Laundering - attachment of properties - legitimate claims to the properties that were attached as part of the proceedings under PMLA - HELD THAT:- On the basis of the sale deeds referred by the appellants the schedule B properties are part and parcel of the floors purchased by the appellants in the first two appeals and hence the same can not be segregated for alienation, transfer, attachment or auction in separation of the ownership rights of the floors VI and VII and III to V purchased by the appellants respectively. The owners, tenants, leases, transferees, occupants etc. of the said premises can not effectively enjoy their respective properties in absence of the enjoyment of the common areas as mentioned in the schedule B of the respective sale deeds. The said common area and parking space etc. will go with an ownership right of the main property situated at different floors. Seeing the fact that some of the allotees have already claimed relief and obtained conditional order in their favor from Hon ble High Court of Karnataka in Company Application no. 153/2020, 165/2020 253/2020 in Company Petition no. 162/2013, they may also file their claim applications before the Hon ble High Court, as this Appellate Tribunal can not entertain their claim, as the said company is under liquidation. Hence, these two appeals need to be disposed of with liberty to the appellants. Appeal allowed.

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• Service Tax

• 2025 (1) TMI 990
  Classification of service - Renting of Immovable Property Service or hotel services - building used solely for accommodation including hotels - HELD THAT:- Allegation in the show-cause notice and findings in the Order-in-Original and Order-in-Appeal are based on the premises that Appellant was engaged in hotel business. The conducting agreement annexed to the appeal memo and relied upon by the parties indicates that Appellant was owner of the premises that was leased for the purpose of hotel business. This Section 85(zzzz) was brought into the statute book on 08.05.2010 with retrospective effect from 01.06.2007. Therefore, the demand made under the category of renting of immovable property services, since covered in the exclusion Clause is not in conformity to the Finance Act as well as Article 265 of the Constitution of India. Service that has been provided by the Appellant could have been termed as hotel accommodation service as provided under Section 65(105)(zzzzw) that was brought into the statute book through amendment in the Finance Act, 1994 on 08.04.2011 which provides that service provided or to be provided to any person by a hotel, inn, guest-house, club or composite, by whatever name called, for providing of accommodation for a continues period of less than three months is a taxable service but in the instant case no such demand is made on this classification of service and the conducting agreement has not made any stipulation that hotel services are to be provided for less than three months. Conclusion - The demand made under the category of renting of immovable property services, since covered in the exclusion Clause is not in conformity to the Finance Act as well as Article 265 of the Constitution of India. The demand confirmed against the Appellant on Renting of Immovable Property Service is unsustainable both in law and fact - Appeal allowed.

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• Central Excise

• 2025 (1) TMI 989
  Valuation of Central Excise duty - price, the sole consideration of sale - invocation of extended period of limitation under the proviso to Section 11A(1) of CEA 1944 - levy of penalty u/s 11AC. Whether the price was the sole consideration of sale? - HELD THAT:- Taking into consideration the aforementioned parts of the MOU, it is crystal clear that the arrangement reflected from the MOU is essentially for ensuring that every OMC gets smooth and uninterrupted supply all over India, irrespective of whether an OMC has a refinery or otherwise in a particular part of India. Thus, from a plain reading of the MOU, we find that the real consideration for the MOU was to ensure an uninterrupted supply to all the OMCs at various places in India. The MOU incorporates mutual arrangements made by MNCs for an uninterrupted supply of petroleum products so that MNCs can further sell the products to their dealers. By no stretch of the imagination, it can be said that the price fixed under the MOU was the sole consideration for the sale by one OMC to the other. Hence, the conclusion in the impugned judgment concurred with, that the price was not the sole consideration for sale. Turning to the decision of the Tribunal in Hindustan Petroleum Corporation Ltd. [ 2005 (2) TMI 357 - CESTAT, BANGALORE] , an appeal against which has been summarily dismissed by this Court. Apart from mentioning that the MOU was executed according to the direction of the Government of India, the Tribunal has not looked into the contents of the MOU. There is a vague reference to HPCL s agreement with other oil companies. There is no specific finding recorded therein, after considering the terms and conditions of the MOU, that the price was the sole consideration for the sale. Therefore, the decision of the Tribunal ignores a crucial ingredient of Section 4(1)(a) of whether the price was the sole consideration for the sale. Whether the revenue was entitled to invoke an extended period of limitation under the proviso to Section 11A(1) of the 1944 Act? - HELD THAT:- Under the proviso to sub-section (1) of Section 11-A, an extended period of limitation can be invoked when there is a nonlevy or non-payment or short levy or short payment of the excise duty by a reason of fraud or collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of 1944 Act or the rules made thereunder with the intent to evade payment of duty. The show cause notice referred to the statements recorded of BPCL officers and other OMCs. No detailed reasons have been recorded in support of invoking the extended period of limitation by the Commissioner in his order. A careful perusal of the show cause notice shows that it is not alleged that any such misrepresentation was made by BPCL that the pricing as provided in the MOU was adopted by the BPCL as per the directions of the Central Government. The reply to the show cause notice submitted by the BPCL contains no such representation. In the show cause notice, statements recorded of officers of BPCL and other OMCs have been referred to and relied upon. However, it is not alleged that any of the officers stated that the price of the goods sold under the MOU was fixed as per the directives of the Central Government - both the grounds in support of invoking an extended period of limitation cannot be sustained, and only on that ground, the demand cannot be sustained. Whether the revenue was entitled to levy a penalty under Section 11AC of the 1944 Act? - HELD THAT:- In this case, there is no allegation made by the Revenue of fraud, collusion or any wilful mis-statement on the part of the appellant. The stand taken is that the MOU was suppressed, and therefore, Section 11AC will apply. In view of the findings recorded above on the issue of the invocation of the extended period of limitation, the penalty could not have been imposed. Conclusion - i) The price was not the sole consideration for sale. ii) No detailed reasons have been recorded in support of invoking the extended period of limitation by the Commissioner in his order. iii) The stand taken is that the MOU was suppressed, and therefore, Section 11AC will apply. The penalty could not have been imposed. Appeal allowed.

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• 2025 (1) TMI 988
  Condonation of delay of 875 days in filing the Civil Appeals which has not been satisfactorily explained by the appellant - Area based exemption - Ready Mix Concrete - exemption Notification No.12/2012-CE dated 17.03.2012 - it was held by CESTAT that The adjudicating authority had rightly extended the benefit of exemption notification in respect of Ready Mix Concrete (RMC) used by the assessee in their manufacturing premises for construction work hence, the demand for the period April, 2016 to June, 2017 was rightly dropped by the adjudicating authority on the ground of its merit. HELD THAT:- The Civil Appeals are, accordingly, dismissed on the ground of delay.

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• 2025 (1) TMI 987
  Refund against payment of CVD SAD in cash under transitional provisions available in Section 142(3) read with Section 142(6)(a) of the CGST Act - denial on the ground that Appellant had paid duty amount alone and not interest or the penalty that was imposed by the DGFT for which regularisation of import remained incomplete - HELD THAT:- The issue that remained primarily confined to absence of any such provision in Rule, 9(1)(b) of the CENVAT Credit Rules, 2004 that would have made fulfilment of the condition contained in DGFT letter as a condition precedent for such refund and non-payment of interest that would disentitle the benefit of refund of CVD SAD to the manufacture upon sale of goods, manufactured from imported inputs, which Appellant claimed to have not paid due to exercise of discretion of Customs Authority in allowing such non-payment of interest by the Appellant in its favour but subsequently have to pay the same interest upon refusal of its refund application and such payment of interest was duly intimated to the Respondent-Department vide its letter dated 31.03.2022. With these developments that occurred during pendency of this appeal, it is to be seen as to if Appellant is entitled to get refund of CVD SAD in cash and if CESTAT is empowered to pass an order to that effect. On the point of divergent decision on the issue as has been held in M/S. SERVO PACKAGING LIMITED VERSUS COMMISSIONER OF G.S.T. AND CENTRAL EXCISE, PUDUCHERRY [ 2020 (2) TMI 353 - CESTAT CHENNAI] and M/S. AUROBINDO PHARMA LTD. VERSUS COMMISSIONER OF CUSTOMS, CHENNAI II [ 2022 (5) TMI 394 - CESTAT CHENNAI] , this Tribunal at Hyderabad had observed that those were passed before Larger Bench s view had come in the case of M/S. BOSCH ELECTRICAL DRIVE INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL TAX, CHENNAI [ 2023 (12) TMI 1145 - CESTAT CHENNAI-LB] and not applicable to the present case since same Chennai Bench itself had subsequently passed another order holding that Appellant would be eligible for cash refund. Therefore, the issue of cash refund of CVD SAD paid in GST Regime has attained finality in favour of such cash refund. Another point that is required to be brought on record is that post disposal of appeal by the Commissioner (Appeals), interest was paid by the Appellant and in the normal course matter would have gone to the Commissioner (Appeals) for redetermination had he made any observation on the point that payment of interest against CVD SAD dues was mandatory to allow refund of those two taxes upon sale of manufactured goods and had there been any such condition available under Rule, 9(1)(b) of the CENVAT Credit Rules, 2004 but having regard to fact that Respondent-Department was competent to realise any arrear dues from the refund sanction under Section 142 in view of clear provision contain under Section 142(8) of the CGST Act, apart from the fact that such a provision was already existing under Section 11(1) of the Central Excise Act, there is no point in redetermining the issue that was not dealt by the Commissioner (Appeals). Conclusion - Appellant is entitled to get refund of CVD SAD with applicable interest as per law in cash. Appeal allowed.

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• 2025 (1) TMI 986
  Process amounting to manufacture - whether the activities undertaken by the appellant in respect of certain quantity of ROM manganese ore would result into manufacture of concentrate or otherwise? - HELD THAT:- There is a need to establish that the ROM ore has undergone any change or not due to processes undertaken. This would be mainly depending on the manner in which the samples were drawn and the manner in which they were tested as also the nature of activities undertaken, which is not distputed. Therefore, both the issues of drawal of samples as well as test needs to be amply clear before the charges can be further corroborated. From the perusal of the Order, both these aspects have not been dealt with adequately by the Adjudicating Authority. More so, when cross examination of the Chemical Examiner has been denied, it would definitely tantamount to denial of natural justice, in the facts of the case. Said Test Reports are the major evidence based on which the allegation of increasing concentration has been made by the Department and categorically holding that manufacturing process has been undertaken on ROM ore. There is also some fact in appellant s contention that quantification of denial is correct as to the ROM and processes have been clubbed together - the Order is not a speaking order and has not been dealt with certain aspects which the Advocate has pointed out including the entitlement of benefit of N/N. 63/95-CE, in the event it is held to be a manufacturing process. Conclusion - The Order is not a speaking order and has not been dealt with certain aspects which the Advocate has pointed out including the entitlement of benefit of N/N. 63/95-CE, in the event it is held to be a manufacturing process. The matter should be remanded back to the Original Adjudicating Authority, who shall re-hear the matter after allowing the cross examination of the Chemical Examiner, whose test reports have been relied in the show cause notice and Order-in-Original - Appeal allowed by way of remand.

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• CST, VAT & Sales Tax

• 2025 (1) TMI 985
  Refund claim - mere filing of self-assessment returns under Section 20 (1) r/w Section 50 of the MVAT Act, 2002, is sufficient without filing application for refund as per law to claim refund when it is mandatory to file refund application on portal within stipulated limitation - true and proper construction of Section 51 (7) of Maharashtra Value Added Tax, 2002 is it mandatory to submit E-form-501, within stipulated period of limitation to claim refund despite filing of self-assessment returns under Section 20(1) r/w. Section 50 of the MVAT Act, 2002 - true and proper construction of Section 51 (7) of Maharashtra Value Added Tax, 2002 - issue of limitation with respect to claim of refund ought to be considered in view of the provisions of u/s. 23 of the MVAT Act or not. HELD THAT:- The Tribunal (in M/s. Om Shree Developers), after relying upon the decision of this Court in the case of Vichare and Co. Pvt. Ltd., v/s. State of Maharashtra Others [ 2015 (3) TMI 1403 - BOMBAY HIGH COURT ], came to the conclusion that the Department had misconstrued the legal provisions and the right to get a refund under Section 51 (1) to (7) of the Act. The Tribunal held that if the dealer has paid an excess amount than what it is liable to pay, then the excess is not the property of the Department, or of the Government, but it is the property of the dealer, who is entitled to get a refund after scrutiny of the returns. In these circumstances, the Tribunal (in M/s. Om Shree Developers) allowed the Appeal and directed the Assessing Authority to scrutinize/ assess the returns submitted by the Appellant [i.e. Om Shree Developers], in accordance with law, at the earliest. The present Appeal does not give rise to any substantial question of law - Appeal disposed off.

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• Indian Laws

• 2025 (1) TMI 984
  Dishonor of Cheque - Cognizance for offence under Sections 420, 467, 468, 471 and 120-B of IPC - case of applicant is that the complaint filed by the respondent is misconceived and the Magistrate should not have taken up the cognizance - complaint in question was filed by way of counter blast and the complaint suffers from malafide - presumption under Section 139 of Negotiable Instruments Act - Whether the prosecution can be quashed on the ground of delay or not? Presumption u/s 139 of NI Act - HELD THAT:- There is a presumption that whenever a cheque is issued, then it must have been issued in discharge of legal liability. However, that presumption is rebuttable. It is the case of the complainant that a post dated cheque of 25.12.2013 was issued by way of security. However, this date i.e., 25.12.2013 was interpolated by the applicant and 25.12.2013 was made as 25.02.2013 and the cheque was presented. If the postdated cheque dated 25.12.2013 was issued, then even in the light of Section 139 of Negotiable Instruments Act, at the best, it can be said that legal liability to pay the cheque amount was on 25.12.2013 and on 25.02.2013, no legal liability had accrued - even in the light of Section 139 of Negotiable Instruments Act, if the allegations made in the complaint are considered, then it is clear that the presumption as available under Section 139 of Negotiable Instruments Act would not come to the rescue of the applicant - contention of the applicant that the complaint filed by the respondent is bad in the light of Section 139 of Negotiable Instruments Act is misconceived and hereby rejected. Whether the complaint was filed by the way of counter blast, malafide and is belated or not? - HELD THAT:- The Supreme Court in the case of Renu Kumari vs. Sanjay Kumar [ 2008 (3) TMI 768 - SUPREME COURT] ] has held that if the allegations make out a cognizable offence, then malafides of the complainant would become immaterial. Whether the prosecution can be quashed on the ground of delay or not? - HELD THAT:- Mere delay in lodging the complaint or FIR cannot be a ground to quash the proceedings unless and until the proceedings/FIR is barred under Section 468 of Cr.P.C. It is not the case of the applicant that complaint is barred under Section 468 of Cr.P.C. Thus, mere delay, if any, in filing the complaint cannot be a ground to quash the proceedings. Conclusion - i) The contention of the applicant that the complaint filed by the respondent is bad in the light of Section 139 of Negotiable Instruments Act is misconceived and hereby rejected. ii) If the allegations make out a cognizable offence, then malafides of the complainant would become immaterial. iii) Mere delay, if any, in filing the complaint cannot be a ground to quash the proceedings. This Court is of considered opinion that no case is made out warranting interference - Application dismissed.

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