TMI Tax Updates - e-Newsletter
May 1, 2025

Case Laws in this Newsletter:

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

Articles

1. FILING OF APPEAL BEFORE GOODS AND SERVICES TAX APPELLATE TRIBUNAL – PART I

   By: DR.MARIAPPAN GOVINDARAJAN

2. Common Mistakes to Avoid During 80G(5) Registration

   By: Ishita Ramani

3. Demurrage if goods not cleared from Customs

   By: YAGAY andSUN

4. Need for Warehousing in Import Export under Customs Laws.

   By: YAGAY andSUN

5. Brand Rate Fixation of Duty Drawback of Customs Duty

   By: YAGAY andSUN

6. Bureau of Indian Standards (BIS) and its Role in Imports and Exports.

   By: YAGAY andSUN

7. Risky Exporter under the Provisions of Indian Customs Laws

   By: YAGAY andSUN

8. Physical verification of Export & Import containers under Indian Customs laws.

   By: YAGAY andSUN

9. A mismatch between GSTR-1 and GSTR-3B sales can occur even without amendments, due to several common reasons.

   By: YAGAY andSUN

10. Legal and Regulatory Framework for the Aviation Sector in India.

   By: YAGAY andSUN

11. Sustainable Construction: Building Green Homes and Offices for a Better Planet.(Sustainability, Environment Protection and Healing Climate Change)

   By: YAGAY andSUN

12. India’s Shrimp Export Crisis: Finding Resilience Through Diversification and Policy Support.

   By: YAGAY andSUN

News

1. SC push for inclusivity: Centre, RBI ordered to make digital KYC process accessible to disabled

2. Pilot Study on Annual Survey of Services Sector Enterprises (ASSSE) to capture insights into the Incorporated Service Sector

3. Cabinet approves Fair and Remunerative Price of sugarcane payable by Sugar Mills to sugarcane farmers for sugar season 2025-26

4. Cabinet approves development of Greenfield High-Speed Corridor of 166.80 km (NH-6) from Mawlyngkhung (near Shillong) in Meghalaya to Panchgram (near Silchar) in Assam on Hybrid Annuity Mode (HAM)

5. Union Bank of India Launches MSME & CASA Outreach Programs to pass on benefits of back-to-back RBI-MPC rate cuts and Deepen Customer Engagement

6. Govt notifies ITR forms; individuals with LTCG up to Rs 1.25 lakh can file ITR 1, 4

7. I-T deptt notifies ITR forms 1, 4 for AY 2025-26

8. China's export orders dip in April as Trump's tariffs begin to bite

9. Findings of the Forward-Looking Survey on Private Sector CAPEX Investment Intentions (Survey period: November 2024 to January 2025)

10. 92nd Meeting of Network Planning Group under PM GatiShakti evaluates key Infrastructure projects

Notifications

GST - States

1. (4A/2025)-No.FD 05 CSL 2025 - dated 28-3-2025 - Karnataka SGST

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

2. CT/8/0006/2025-Sec-1-05(CT)(20) - dated 21-4-2025 - Madhya Pradesh SGST

Amendment in Madhya Pradesh Goods and Services Tax Rules, 2017

Income Tax

3. 40/2025 - dated 29-4-2025 - IT

Income-tax (twelfth Amendment) Rules, 2025

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/ ITD-1/ITD_CSC_EXT/P/CIR/2025/60 - dated 30-4-2025

Clarifications to Cybersecurity and Cyber Resilience Framework (CSCRF) for SEBI Regulated Entities (REs)

DGFT

2. Trade Notice No. 04/2025-26 - dated 29-4-2025

Request for Comments on Alignment of Schedule-II (Export Policy), ITC(HS) 2022 with amendments introduced by Finance Act 2025

Customs

3. PUBLIC NOTICE No. 04/2025 - dated 7-4-2025

Implementation of new All India Air Transhipment bond for Air-to-Air and Air-to-ICD Transhipment imports and All India Air Transhipment Message filingsfor Air-to-Air and Air-to-ICD Transhipment at ICEGATE - reg.

Highlights / Catch Notes

GST

• Procedural Flaws Invalidate GST Tax Order, Restore Petitioner's Right to Fair Hearing Under DRC-07 Guidelines

  Case-Laws - HC : HC quashed the summary order in GST DRC-07 for procedural irregularities, specifically violation of natural justice principles. The court found the tax authority passed an order on 30.12.2023 without considering petitioner's objections, which were due on 28.12.2023. The impugned order was set aside conditionally, mandating petitioner to deposit 25% of disputed tax amount within four weeks. This judicial intervention restored procedural fairness by providing an opportunity for the petitioner to present their case on merits, ensuring compliance with principles of natural justice and due process in tax assessment proceedings.
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• GST Registration Cancellation Upheld: Failure to File Returns and Respond to Notices Leads to Dismissal of Petition

  Case-Laws - HC : HC dismissed the petition challenging registration cancellation under CGST Act. The petitioner failed to furnish final returns as mandated by Section 29(2)(c), did not respond to show cause notice, and did not avail hearing opportunity. Despite statutory provisions for revocation under Section 30 and appellate remedy under Section 107, petitioner remained inactive for over 13 months. The court held that procedural requirements were followed, and the petitioner is estopped from challenging the cancellation order due to acquiescence. The petition was consequently dismissed.
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• Tax Liability After Death: Section 93 Requires Legal Representatives' Notification Before Proceeding Against Deceased Taxpayer

  Case-Laws - HC : HC held that Section 93 addresses tax liability post-death but does not authorize determination against a deceased person. Issuance of show cause notice (SCN) and demand against a deceased individual without notifying legal representatives is procedurally invalid. The statutory requirement mandates serving SCN on legal representatives and obtaining their response before initiating any determination proceedings. The impugned order was consequently deemed unsustainable, with the court allowing the petition and invalidating the tax determination against the deceased taxpayer.
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• Procedural Fairness Prevails: GST Department Ordered to Rectify Notice Deficiencies and Ensure Proper Hearing Mechanisms

  Case-Laws - HC : HC remanded the matter to the Department for fresh consideration due to violation of natural justice principles. The Petitioner was not afforded an opportunity to file a reply or receive a personal hearing. The Court directed the Department to ensure service of notices through GST portal, personal email, mobile number, and speed post as per Section 169 of Central Goods and Services Act, 2017, to prevent similar procedural lapses in future. Petition was disposed of with instructions for the Department to place final standard operating procedure on record.
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• Late GST Appeal Dismissed: Statutory Limitation Bars Challenge to Registration Cancellation Under Section 107

  Case-Laws - HC : HC dismissed petitioner's appeal as time-barred under Section 107 of CGST Act, 2017. The appeal was filed on 29.09.2023, approximately one year and three months beyond the prescribed limitation period. The court held that the appellate authority lacks power to entertain appeals beyond the statutory 30-day extension period. The petitioner's failure to file regular returns and late appeal submission precluded any relief. The court found no perversity in the original registration cancellation order and upheld the appellate authority's decision, thereby conclusively rejecting the petitioner's challenge to the GST registration cancellation.
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• Tax Assessment Against Resolved Corporate Debtor Blocked, Protecting Insolvency Resolution Integrity and Preventing Post-Approval Claims

  Case-Laws - HC : HC ruled that ex-parte tax assessment against a corporate debtor post-CIRP resolution plan approval is impermissible. The court held that once the NCLT approves a resolution plan, subsequent claims by creditors are barred to preserve the integrity of the insolvency resolution process. The tax department's argument of lack of awareness was rejected, as the corporate debtor had previously communicated the resolution plan approval. The court emphasized that initiating fresh tax demands after NCLT's resolution plan approval would fundamentally undermine the Corporate Insolvency Resolution Process, thereby protecting the sanctity of the resolution mechanism and ensuring finality in corporate restructuring.
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• Procedural Fairness Prevails: Notice Defect Invalidates Demand Order, Grants Petitioner 30-Day Response Window Under Natural Justice Principles

  Case-Laws - HC : HC ruled that the Petitioner was denied natural justice due to improper service of Show Cause Notice (SCN), which was uploaded on an 'additional notices tab' without actual knowledge. The court directed the Petitioner be granted a 30-day period to file a reply to the SCN. The Adjudicating Authority must provide a fair hearing before proceeding, and the previous demand order was consequently set aside. The petition was disposed of, ensuring procedural fairness and the Petitioner's right to respond to allegations.
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Income Tax

• Tax Reassessment Order Upheld: Procedural Defects Cured, Jurisdictional Challenge Rejected, Appellate Remedies Available

  Case-Laws - HC : HC dismissed writ petitions challenging tax reassessment order. The AO had initially issued an order with procedural defects, which were subsequently cured through a digitally signed letter with computer-generated DIN. The court found no jurisdictional error in the assessment proceedings, noting that relevant documents were provided to the petitioner and sufficient opportunity was given to substantiate undisclosed sales. The court granted liberty to pursue statutory appellate remedies, effectively upholding the revenue department's assessment order without interfering with the underlying tax proceedings.
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• Tax Reassessment Invalidated: Four-Year Limitation Bars Revenue Department from Reopening Assessments Without Substantial Evidence

  Case-Laws - HC : HC held that reassessment proceedings for AY 2002-03 and 2003-04 were invalid as they were initiated beyond the four-year limitation period. The revenue failed to establish that the assessee intentionally suppressed material information. The error in the commencement date was considered inadvertent, not deliberate. For AY 2004-05, the reassessment was within the four-year period, but no material justification was found to reopen the original assessment. The court emphasized that reassessment is not a review process and must be based on tangible evidence of non-disclosure. Consequently, the writ appeal was dismissed, protecting the assessee's original tax assessments.
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• Tax Deduction Dispute Resolved: HC Clarifies "Payable" Meaning, Overturns ITAT Order Based on Supreme Court Precedent Under Section 40(a)(ia)

  Case-Laws - HC : HC analyzed TDS provisions regarding "payable" vs. "paid" interpretations. The court found the lower tribunal's order erroneous based on a previously overruled HC judgment. Applying SC precedent in Palam Gas Service and Directorate of Revenue Intelligence cases, the court determined the term "payable" has a specific legal meaning distinct from actual payment. Consequently, the HC set aside the ITAT Ranchi order and remitted the matter for fresh adjudication, directing the tribunal to reconsider the issue in light of the SC's interpretation of Section 40(a)(ia) and subsequent legal principles governing tax deduction at source.
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• Digital Magazine Subscriptions Not Technical Services: Ruling Clarifies Scope of Service Fee Taxation Under Section 9(1)(vii)

  Case-Laws - HC : HC determined that subscription fees for standardized e-magazines do not constitute fees for technical services (FTS) under Section 9(1)(vii). The court held that mere access to technical database or literature does not qualify as technical services, which require specialized human intervention. The subscription content was generic and not specifically generated for any particular entity, thus falling outside the FTS definition. The assessment order was consequently set aside, with no substantial legal question warranting further examination of double taxation avoidance agreement (DTAA) provisions.
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• Tax Assessment Notices Invalidated: Limitation Period Expired, Tribunal Order Beyond Statutory Timeframe Renders Notices Null and Void

  Case-Laws - HC : HC upheld the petition, declaring assessment notices for AY 2010-11 time-barred under Section 153(3). The Tribunal's order passed after 01 April 2019 extended the limitation period from 9 to 12 months. Calculating 12 months from the Tribunal's 21 October 2020 order revealed the jurisdictional authority expired on 21 October 2021. Consequently, the HC quashed the assessment notices dated 06 March 2023 and 19 March 2023 as legally impermissible, effectively invalidating any proposed transfer pricing adjustments beyond the prescribed statutory limitation.
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• Bogus Purchases Case: Tax Tribunal Rejects Automatic Penalties, Requires Specific Evidence of Intentional Misrepresentation

  Case-Laws - AT : The ITAT addressed penalty proceedings u/s 271(1)(c) involving alleged bogus purchases. Despite initial additions for estimated profits, the Tribunal found inconsistencies in penalty levy across assessment years. Applying the doctrine of binding precedent and referencing SC precedent in Reliance Petroproducts, the Tribunal held that a mere unsustainable claim does not automatically constitute furnishing inaccurate particulars. The Tribunal emphasized that without specific findings of incorrect or false return details, penalty imposition was unwarranted. Consequently, the appeals challenging penalty orders for AYs 2008-09 and 2009-10 were allowed, setting aside the CIT(A)'s earlier confirmations and maintaining consistency with the 2007-08 assessment year's order.
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• Tax Reassessment Invalidated Due to Procedural Defect in Notice Service Under Section 148 Proceedings

  Case-Laws - AT : ITAT adjudicated a tax reassessment case involving procedural irregularities in notice service. The tribunal found that the Revenue department failed to substantiate proper service of Section 148 notice to the assessee. The Assessing Officer explicitly acknowledged that the issued notice was returned unserved. Consequently, the tribunal determined that no valid notice was effectively served to the taxpayer. Based on this critical procedural defect, the reassessment proceedings under Section 144 read with Section 148 were summarily quashed, rendering the entire reassessment process invalid. The final ruling was decisively in favor of the assessee, invalidating the tax department's attempt to reopen the assessment.
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• Tax Dispute Resolved: GST Food Packets and Promotional Expenses Exempt from TDS Liability Under Section 194C

  Case-Laws - AT : ITAT adjudicated a tax dispute involving TDS liability under Section 194C. The tribunal examined two key issues: (1) food supply bills and (2) business promotion expenses. For food supply transactions, the tribunal determined that GST-subjected food packet supplies do not constitute a service contract, thus Section 194C does not apply. Regarding business promotion expenses, the tribunal referenced a precedent from Ratnagiri Impex Private Limited, which clarified that certain customer facilities do not constitute 'work' under Section 194C. Consequently, the tribunal allowed the assessee's grounds, quashing disallowance of expenses and holding that TDS provisions were not applicable to the specific transactions in question.
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• Software Development Company Wins Partial Tax Relief with Key Depreciation and Investment Allowance Interpretations Under Sections 32 and 32AC

  Case-Laws - AT : ITAT ruled on multiple taxation issues for the assessee engaged in software development. The tribunal partially allowed the assessee's appeals, addressing key points: (1) computers used for software production qualify as plant and machinery eligible for additional depreciation under Section 32(1)(iia), (2) investment allowances under Section 32AC are permissible for computers used in software development, not administrative purposes, (3) suo-moto disallowance under Section 14A was accepted, (4) foreign tax deduction was allowed following precedent, and (5) MAT credit issue was remanded to Assessing Officer for fresh adjudication. The appeals were predominantly decided in favor of the assessee, with directions for detailed verification by the AO.
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• Tax Deduction at Source Clarified: No Interest on Unpaid Excess Provisions, TDS Liability Determined by Actual Payments Made

  Case-Laws - AT : The ITAT addressed TDS liability on year-end provisions, finding no short deduction under section 201 for excess provisions not paid to vendors. The tribunal held that interest under section 201(1A) cannot be levied on unpaid excess provisions. For actual payments made in the subsequent year, TDS liability is determined on the actual amount paid (Rs. 24,76,17,968/-), with interest calculated from the year-end provision date (31.03.2015) to the date of actual payment. Following precedent in a similar case, the tribunal deleted the interest on unpaid excess provisions and restricted TDS liability to the actual amount disbursed.
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• Tax Exemption Prevails: ITAT Allows Appeal Under Section 249(4), Remands Case for Comprehensive Reassessment of Income

  Case-Laws - AT : The ITAT addressed the maintainability of an appeal under section 249(4), finding that the assessee's income was exempt from tax, rendering advance tax payment inapplicable. The tribunal held that dismissing the appeal on procedural grounds was unsustainable, given the assessee's exemption status. Regarding unexplained cash credit and denial of exemption under section 80P, the matter was remitted to the CIT(A) for fresh consideration. The appeal was partly allowed for statistical purposes, with the tribunal directing a comprehensive re-examination of the substantive issues by the lower appellate authority.
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Customs

• Gold and Silver Import Regulations Updated: 13 Banks Authorized for Nil Duty Rate Transactions Under Notification 50/2017-Customs

  Notifications : The GoI amended Notification No. 50/2017-Customs by modifying Lists 34A and 34B, specifying authorized banks for importing gold or silver at nil duty rate. List 34A now includes 13 banks such as Axis Bank, HDFC Bank, and SBI, while List 34B comprises Indian Overseas Bank and Union Bank of India. The amendment is effective from 1st April 2025 and valid until 31st March 2026, issued under powers conferred by sections 25(1) of Customs Act, 1962 and 3(12) of Customs Tariff Act, 1975, with the objective of facilitating regulated gold and silver imports through designated financial institutions.
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• Petitioners Win Partial Relief: 19-Minute Technical Delay Conditionally Accepted in Anti-Dumping Investigation Response

  Case-Laws - HC : HC ruled in favor of the petitioners, conditionally accepting a 19-minute technical delay in submitting an anti-dumping investigation response related to plastic processing machine imports from China and Taiwan. The court emphasized the importance of comprehensive investigation and held that a minor procedural delay should not preclude the petitioners' participation in proceedings. The court directed the response to be taken on record, condoned the delay, and ordered the enquiry to proceed in accordance with established legal protocols.
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• Customs Broker Cleared, Associate Penalized for Diesel Import Diversion Under Section 46 with Active Facilitation of Unauthorized Transaction

  Case-Laws - AT : CESTAT adjudicated a customs penalty case involving a customs broker and a business development associate. The tribunal held that no penalty could be imposed on the customs broker under Section 46 of the Customs Act, as the duty obligation lies solely with the importer. Conversely, the business development associate was found culpable for actively facilitating the diversion of high-speed diesel imported under a Project Authority Certificate, thereby aiding an unauthorized transaction involving 460 KL of diesel valued at Rs. 89,13,340 with a duty liability of Rs. 23,08,357. The tribunal confirmed the Rs. 2,00,000 penalty against the business development associate while setting aside the penalty against the customs broker. The appeal was ultimately dismissed.
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• Customs Broker Cleared: Verified IEC and GSTIN Documents, Not Liable for Ongoing Client Monitoring or Potential Fraud

  Case-Laws - AT : CESTAT held that the customs broker fulfilled verification obligations under Regulation 10(n) by validating IEC and GSTIN through online portals and official documents. The broker is not required to continuously monitor client operations or investigate potential fraud beyond initial document verification. The presumption of authenticity applies to government-issued certificates per Section 79 of Evidence Act. The broker's responsibility is limited to initial address verification, and subsequent client relocation or misrepresentation cannot be attributed to the broker. The appellate tribunal set aside the impugned order, allowing the appeal and finding no violation of regulatory requirements by the customs broker.
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• Independent Directors Shielded from Liability in Export Obligation Case Without Direct Operational Involvement or Specific Misconduct Allegations

  Case-Laws - HC : HC dismissed the petition, holding that an independent non-executive director cannot be personally liable for export obligation non-compliance without specific allegations demonstrating direct involvement in the company's operational affairs. The court emphasized that export licenses were issued during 1989-1991, and subsequent notices issued between 2002-2009 lacked substantive explanation for delayed action. Moreover, since the company entered liquidation in 1998 with documents transferred to the Official Liquidator, procedural requirements for initiating proceedings against the company were not followed. The absence of specific allegations regarding the director's role precluded personal liability, rendering the respondent's contentions unsustainable.
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FEMA

• Notebook Evidence Reveals Hawala Transactions, Penalties Adjusted Based on Individual Roles and Involvement Levels

  Case-Laws - AT : The AT found evidence of hawala transactions through a recovered notebook containing daily business accounts, despite the appellant's retraction. The tribunal corroborated the evidence through multiple sources, including witness statements. Cross-examination was deemed unnecessary in quasi-judicial proceedings. The penalties were partially modified: for the primary appellant, penalties were reduced to Rs. 40,00,000 for Section 3(c), Rs. 60,00,000 for Section 3(a), and Rs. 40,00,000 for Section 3(b). For the employee, penalties were substantially reduced to Rs. 90,000 for Section 3(c), Rs. 1,00,000 for Section 3(a), and Rs. 90,000 for Section 3(b), recognizing his limited role in the transactions.
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State GST

• GST Council Clarifies Multiple Tax Rules, Exempts Penal Charges and Payment Aggregators, Regularizes Service Sector Transactions

  Circulars : The APGST circular addresses multiple GST-related clarifications following the 55th GST Council meeting. Key outcomes include: (1) No GST on penal charges levied by Regulated Entities per RBI instructions, (2) GST exemption confirmed for Payment Aggregators settling transactions up to 2,000, (3) Regularization of GST payment for research and development services from 2017-2024, (4) Restoration of GST exemption for NSDC-approved Training Partners, (5) Regularization of GST on commercial property rental under Reverse Charge Mechanism for composition levy taxpayers, and (6) Regularization of GST on incidental electricity transmission and distribution utility services from October 2024 to January 2025, all implemented on an 'as is where is' basis.
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• Late Fees for Incomplete Annual GST Returns Clarified, Section 47 Applies to FORM GSTR-9C Filing Requirements

  Circulars : The CCST clarifies the applicability of late fees for delayed filing of FORM GSTR-9C under the APGST Act, 2017. Late fees under section 47 are leviable for incomplete annual returns where FORM GSTR-9C is required but not furnished. The late fee calculation covers the period from the due date until complete filing, encompassing both FORM GSTR-9 and FORM GSTR-9C. For financial years up to 2022-23, late fees are waived if the reconciliation statement is filed by 31st March 2025, with no additional charges beyond the standard late fee under section 47. No refunds will be provided for previously paid late fees related to FORM GSTR-9C filing.
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• Government Clarifies Tax Treatment for Co-Insurance and Reinsurance Transactions Under GST Regulations, Providing Retroactive Compliance Relief

  Circulars : Circular regularizing GST payment for co-insurance and reinsurance transactions retroactively from 01.07.2017 to 31.10.2024. The circular clarifies that apportionment of co-insurance premiums and ceding/reinsurance commissions will be treated neither as goods nor service supplies under Schedule III of CGST Act, subject to specific tax payment conditions. The GST Council recommended normalizing past tax treatments on an 'as is where is' basis, effectively providing tax compliance relief for insurers and reinsurers during the specified period.
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Indian Laws

• Contractual Delay Penalties Upheld: Liquidated Damages Valid Under Sections 55, 73, and 74 of Contract Act

  Case-Laws - SC : SC upheld the arbitral tribunal's decision allowing liquidated damages deduction from the appellant's contractual dues. The court determined that the respondent validly imposed damages at 0.5% per week for a delay exceeding ten months, primarily attributable to the appellant. Interpreting Sections 55, 73, and 74 of the Contract Act, the court affirmed that the liquidated damages were legally and contractually valid. The Single Judge's order setting aside the arbitral award was deemed to have exceeded jurisdictional limits under Section 34 of the Arbitration Act. The Division Bench's restoration of the original arbitral award was consequently upheld, and the appeal was dismissed.
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• Supreme Court Reinstates Criminal Investigation, Emphasizing Judicial Restraint in Quashing FIRs Involving Complex Business Transactions under Section 482 CrPC

  Case-Laws - SC : SC held that the High Court erroneously quashed the FIR involving alleged fraudulent business transactions. The Court emphasized that inherent powers under Section 482 CrPC must be exercised sparingly and only in exceptional circumstances. Despite long-standing business relationships between parties, the presence of potential shell companies and significant monetary transactions warranted a thorough investigation. The HC's presumption that criminal proceedings were merely an arm-twisting tactic was deemed inappropriate. The SC found the HC's exercise of jurisdiction unjustified, allowing the appeals and permitting the criminal investigation to proceed, highlighting the importance of examining case-specific facts before quashing criminal proceedings.
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• Legal Proceedings Under Section 174-A IPC Require Mandatory Written Complaint by Public Servant as Procedural Prerequisite

  Case-Laws - HC : HC determined that cognizance of offences under Section 174-A IPC requires a mandatory written complaint by the concerned public servant, as per Section 195(1)(a)(i) Cr.P.C. The court held that judicial interpretation cannot assume legislative intent or fill legislative gaps. Following precedential reasoning from prior Supreme Court judgments, the court affirmed that taking cognizance without a written complaint would be procedurally invalid. The petition challenging charges was consequently allowed, setting aside the previous order and reaffirming the strict procedural requirement of a written complaint for initiating proceedings under Section 174-A IPC.
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PMLA

• Money Laundering Case: Evidence Supports ED's Grounds for Arrest, Bail Denied Under PMLA Section 45 Provisions

  Case-Laws - HC : HC dismissed the bail application in a money laundering case, finding that the arrest of the petitioner complied with mandatory PMLA provisions. The court held that the Enforcement Directorate had reasonable grounds to believe the petitioner's involvement in proceeds of crime, with evidence supporting potential money laundering activities. The 22-month custody was deemed justified, emphasizing that personal liberty must be balanced against the serious nature of allegations. The court underscored that under Section 45 of PMLA, stringent bail conditions must be met, and the burden of proving non-involvement in proceeds of crime lies with the petitioner. The application was rejected, maintaining the principle that societal interests and potential criminal implications take precedence over extended detention concerns.
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• Judicial Review Limited in PMLA Search Proceedings: Enforcement Directorate's Authority Upheld to Investigate Economic Offenses

  Case-Laws - HC : HC dismissed the writ petition challenging search proceedings under PMLA, affirming the Directorate of Enforcement's investigative authority. The court held that judicial review is strictly limited to verifying whether "reasons to believe" were recorded in writing prior to search, without examining the investigating officer's subjective satisfaction. The court emphasized that search procedures aimed at uncovering potential economic offenses serve national interest and constitutional mandates of economic justice. The petition challenging the search was deemed an abuse of legal process, with the court noting the serious allegations of malpractice against the state corporation. The Directorate of Enforcement was granted liberty to continue its investigation under the Prevention of Money Laundering Act.
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SEBI

• SEBI Amends InvIT Regulations to Expand Governance Rules with Enhanced Compliance Provisions for Infrastructure Investment Trusts

  Notifications : SEBI issued the Infrastructure Investment Trusts (Second Amendment) Regulations, 2025, amending the existing 2014 regulations. The amendment specifically modifies regulation 18, sub-regulation (4), expanding the proviso to include additional clauses (vi), (vii), and (viii) alongside existing provisions. The regulatory update, effective April 2, 2025, aims to enhance the regulatory framework governing infrastructure investment trusts, providing more comprehensive guidelines for trust management and operational compliance within the securities market.
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• Comprehensive Guidelines Unveiled for ESG Rating Providers, Enhancing Transparency and Operational Flexibility for Investor Protection

  Circulars : SEBI issued clarificatory circular on ESG Rating Providers (ERPs) with key procedural modifications, focusing on rating withdrawal, disclosure norms, and governance requirements. The circular introduces differentiated guidelines for subscriber-pays and issuer-pays business models, including specific conditions for rating withdrawal, website disclosure protocols, and relaxed compliance timelines for Category II ERPs. Key changes include allowing rating withdrawal under defined circumstances, modified disclosure requirements for subscriber-pays ERPs, mandatory ESG rating display on stock exchange websites, and extended timelines for internal audit and governance committee establishment for smaller rating providers. The regulatory amendments aim to strengthen transparency, accountability, and operational flexibility for ESG rating entities while maintaining investor protection standards.
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• SEBI Provides Additional Time for Qualified Stock Brokers to Implement Optional T+0 Settlement Cycle by November 2025

  Circulars : SEBI extended the implementation timeline for optional T+0 settlement cycle for Qualified Stock Brokers (QSBs) from May 01, 2025 to November 01, 2025. The extension was granted after receiving feedback from market participants and conducting discussions with stock exchanges, clearing corporations, depositories, and QSBs. The decision aims to ensure smooth implementation of the optional settlement cycle, allowing QSBs additional time to develop necessary systems and processes for seamless investor participation. All other provisions of the original December 10, 2024 circular remain unchanged, maintaining regulatory continuity in equity cash market settlement mechanisms.
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VAT

• Bank's Secured Mortgage Prevails Over Tax Arrears: Section 26E and Section 34 Establish Priority of Creditor Claims

  Case-Laws - HC : HC determined priority of claims between secured creditor bank and Commercial Taxes Department. The court held that Section 26E of SARFAESI Act and Section 34 of RDB Act prevail over Section 24 of TNGST Act. The bank's equitable mortgage created in 1991 takes precedence over sales tax arrears. The court quashed the impugned notices, finding the bank's security interest legitimate and prioritized over government revenue claims, thereby allowing the writ petitions in the interest of public policy and legal consistency.
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Service Tax

• Gas and Oxygen Plant Installations Deemed Movable Equipment, Exempt from Service Tax Under Renting of Immovable Property Rules

  Case-Laws - AT : CESTAT ruled that gas/oxygen plants erected by appellants do not constitute immovable property for service tax purposes. The tribunal determined that the plant equipment was not permanently affixed to the earth and could be dismantled without substantial damage. The statutory definition of 'immovable property' under the service tax law is strictly limited to buildings, land, and related facilities. Consequently, lease rentals received for such plant installations do not attract service tax under the 'Renting of Immovable Property' service category. The tribunal set aside previous orders and allowed the appellants' appeals, finding that the plant structures were movable and did not meet the legal threshold for immovable property classification.
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Central Excise

• Supreme Court Strikes Down Duty Demand on Chemical Reclassification Due to Procedural Flaws in Sampling and Assessment

  Case-Laws - SC : The SC adjudicated a dispute regarding duty demand based on re-classification of Benzene and Toluene from chapter 29 to chapter 27. The court found the re-classification invalid due to procedural irregularities, including belated sampling, non-disclosure of complete test reports, and absence of a proper provisional assessment order under Rule 9B. The court emphasized that Rule 56 requires proper communication of test results and opportunity for re-testing. Without an explicit order under Rule 9B and proper bond execution, the assessments could not be deemed provisional. Consequently, the SC allowed the appeal, invalidating the department's duty demand and re-classification, thereby protecting the appellant's original classification and assessment.
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• Manufacturer Wins Right to Claim Single Input and Output Tax Benefits Without Double Taxation Penalty

  Case-Laws - HC : HC allowed the petition, holding that a manufacturer/exporter can claim one input-side benefit and one output-side benefit without constituting double benefit. The court clarified that relief claimed once on the output side and once on the input side does not amount to double benefit. Specifically, the petitioner was entitled to claim drawback at the All Industry Rate on inputs and output rebate under Rule 18 of Central Excise Rules, 2002, based on the Supreme Court's interpretation in Spentex Industries Ltd. The impugned order's rejection of the rebate claim was deemed incorrect, establishing that simultaneous input and output benefits are legally permissible.
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Case Laws:

• GST

• 2025 (4) TMI 1642
  Issuance of SCN and demand against a deceased person - HELD THAT:- A perusal of the Section 93 would reveal that the same only deals with the liability to pay tax, interest or penalty in a case where the business is continued after the death, by the legal representative or where the business is discontinued, however, the provision does not deal with the fact as to whether the determination at all can take place against a deceased person and the said provision cannot and does not authorise the determination to be made against a dead person and recovery thereof from the legal representative. Once the provision deals with the liability of a legal representative on account of death of the proprietor of the firm, it is sine qua non that the legal representative is issued a show cause notice and after seeking response from the legal representative, the determination should take place. The determination made in the present case wherein the show cause notice was issued and the determination was made against the dead person without issuing notice to the legal representative, cannot be sustained - Petition allowed.

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• 2025 (4) TMI 1641
  Challenge to repeated issuance of SCN by the Delhi Goods and Service Tax Department and impugned order - challenge on the ground that despite a specific reply having been placed on record that the Petitioner was suffering from a stroke, the Department proceeded and passed the impugned order - HELD THAT:- Considering the overall facts, there is no doubt that the Petitioner has been continuously following up with the Department and filing replies diligently. The medical ground which was stated on 23nd December, 2024 ought to have been considered emphathetically as the same was accompanied with all the documents from Indraprastha Apollo Hospital. The impugned order dated 8th January, 2025 is set aside - Petition disposed off.

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• 2025 (4) TMI 1640
  Challenge to validity of N/Ns. 09/2023-Central Tax dated 31th March 2023 and 56/2023-Central Tax dated 28th December 2023 - SCN was not in the knowledge of the Petitioner, hence no reply was filed - violation of principles of natural justice - HELD THAT:- This Court is of the opinion that the delay in filing the appeal deserves to be condoned and the appeal deserves to be heard on merits. The Appeal is restored to its original number before the Appellate Authority - Petition disposed off.

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• 2025 (4) TMI 1639
  Challenge to order in original - the written submissions filed by the Petitioner have not been considered by the Respondent No. 1 and no personal hearing notice has been issued either - violation of principles of natural justice - HELD THAT:- The Petitioner having had no the opportunity to file its reply to the Department and no personal hearing having been effectively afforded to the Petitioner, this Court is of the opinion that the matter deserves to be remanded to the Department for fresh consideration, only insofar as the Petitioner is concerned. The Department shall make an endeavour to ensure that in terms of Section 169 of the Central Goods and Services Act, 2017, assessees are served through the common GST portal as also through their personal email and mobile number. In addition, the notice may also be sent through speed post so that situations as have arisen in this case, can be avoided in the future. Let the final SOP be placed on record by the next date of hearing - Petition disposed off.

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• 2025 (4) TMI 1638
  Cancellation of GST registration of the petitioner - non-filing of GST returns for a continuous period of six months - HELD THAT:- Having regard to the fact that the GST registration of the petitioner has been cancelled under Section 29 (2) (c) of the CGST Act, 2017 for the reason that the petitioner did not submit returns for a period of 6 (six) months and more; and the provisions contained in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017 and cancellation of registration entails serious civil consequences, this Court is of the considered view that in the event the petitioner approaches the officer, duly empowered, by furnishing all the pending returns and make full payment of the tax dues, along with applicable interest and late fee, the officer duly empowered, has the authority and jurisdiction to drop the proceedings and pass an order in the prescribed Form. This writ petition is disposed of by providing that the petitioner shall approach the concerned authority within a period of 2 (two) months from today seeking restoration of his GST registration.

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• 2025 (4) TMI 1637
  Dismissal of appeal filed by the petitioner has been dismissed on ground of it being time barred - failure to furnish returns for six months - HELD THAT:- The impugned order for cancellation of registration with effect from 28.02.2022 under Section 29 (2) (c) of the CGST Act, 2017 was issued on 08.07.2022 and the Petitioner had filed an appeal under Section 107 of the CGST Act, which is the appellate provision on 29.09.2023 through online and hard copy of the same was submitted in the office of the appellate authority on 06.10.2023; as such, after calculating the entire period, it appears that the appeal has been filed after one year and three months beyond the normal period of filing of appeal as prescribed under Section 107 (1) of the CGST Act, 2017. On plain reading of Section 107 makes the position crystal clear that the appellate authority has no power to allow an appeal to be presented beyond the period of one month for filing of appeal. The language used makes the position clear that the legislature intended the appellate authority to entertain the appeal by condoning delay only up to one month after the expiry of three months which is the normal period for preferring appeal. The proviso to sub-section (1) of Section 35 makes the position crystal clear that the appellate authority has no power to allow the appeal to be presented beyond the period of 30 days. The language used makes the position clear that the legislature intended the appellate authority to entertain the appeal by condoning delay only up to 30 days after the expiry of 60 days which is the normal period for preferring appeal. Therefore, there is complete exclusion of Section 5 of the Limitation Act. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days period. The Petitioner-Firm is not entitled for any relief on the ground of delay and latches coupled with the fact of being lethargic in approach; inasmuch as, on the one hand, the petitioner did not file return regularly and thus has not complied with GST REG-17/31 issued to him in any manner; and on the other hand, the appellant filed appeal after delay of more than one year and three months which is admittedly beyond the period of limitation as per the Act. Conclusion - Neither there is any perversity in the order of cancellation of GST registration; nor there is any necessity for interference with the appellate order, inasmuch as, the same has been filed beyond the statutory period of limitation. Application dismissed.

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• 2025 (4) TMI 1636
  Challenge to SCN and N/N. 9/2023-Central Tax dated 31st March, 2023 and 56/2023-Central Tax dated 28th December, 2023 issued by the Central Board of Indirect Taxes and Customs - extension of time limits for adjudication under the GST regime - Petitioner has not been afforded an opportunity to be heard - Violation of principles of natural justice - HELD THAT:- This Court is of the opinion that since the Petitioner has not been afforded an opportunity to be heard and the said SCNs and concurrent impugned orders have been passed without hearing the Petitioner, an opportunity ought to be afforded to the Petitioner to contest the matter on merits. Conclusion - The Petitioner is granted 30 days time to file the reply to SCNs. Upon filing of the reply, the Adjudicating Authority shall issue to the Petitioner, a notice for personal hearing. The impugned order set aside - petition allowed.

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• 2025 (4) TMI 1635
  Issuance of ex-parte assessment order and demand notice under Section 73 of the CGST/UPGST Act, 2017 against a corporate debtor undergoing Corporate Insolvency Resolution Process (CIRP), after the approval of the Resolution Plan by the National Company Law Tribunal (NCLT) - HELD THAT:- This Court in M/S NS Papers Limited and another Vs. Union of India through Secretary and others] [ 2024 (12) TMI 989 - ALLAHABAD HIGH COURT ], after dealing with a catena of judgments rendered by the Supreme Court and also other High Courts held as the arguments raised by the learned counsel appearing on behalf of the respondents is without any merit on two counts. Firstly, it is clear by the letter dated March 8, 2021 that the petitioner had informed the Income Tax Authorities with regard to approval of resolution plan. Secondly, the department itself had filed a claim before the Resolution Professional, and accordingly, the argument that the department was not aware of the IBC proceedings holds no water. Conclusion - The principle is crystal clear that once Resolution Plan has been approved by the NCLT, all other creditors are barred from raising their claims subsequently, as the same would disrupt the entire resolution process. Petition allowed.

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• 2025 (4) TMI 1634
  Seeking directions to the Respondents to supply the Relied Upon Documents (RUD) in the Show Cause Notice - principles of natural justice - HELD THAT:- Considering the nature of request, the Department should have supplied a complete set of RUDs to the Petitioners to enable them to file proper reply to the SCN dated 18th March 2025 - Accordingly, it is directed that all the above RUDs in full be provided to the Petitioners within one week. Petition disposed off.

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• 2025 (4) TMI 1633
  Service of SCN - SCN did not come to the knowledge of the Petitioner as the same was uploaded by the Respondent No. 1-Department on the additional notices tab - violation of principles of natural justice - HELD THAT:- In view of the fact that the Petitioner did not get an opportunity to file a reply to the SCN, this Court is of the opinion that the Petitioner ought to be afforded an opportunity to file a reply. Let the reply to the SCN be now filed within a period of 30 days. The Adjudicating Authority shall proceed and pass order with respect to the SCN after affording a hearing to the Petitioner. The demand order is set aside - petition disposed off.

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• 2025 (4) TMI 1589
  Maintainability of petition - availability of alternative remedy of appeal - Challenge to assessment order - impugned assessment order has been passed based on mismatches in ITR 26(AS), Input Tax Credit (ITC) in GSTR-2A, and ITC reversal on account of credit notes received - HELD THAT:- Recording the submissions made by the learned Government Advocate that the petitioner is having an appeal remedy before the Appellate Deputy Commissioner (ST) GST Appeal, Tiruchirappalli, under Section 107 of the TNGST Act, 2017, this writ petition is disposed of with liberty to the petitioner to approach the appellate authority and raise all the grounds raised in this writ petition in the appeal. Petition disposed off.

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• 2025 (4) TMI 1588
  Maintainability of petition - bypassing the statutory appellate remedy and invoking the writ jurisdiction under Article 226 of the Constitution of India - HELD THAT:- In the present case, the petitioner has failed to point out any extraordinary and exceptional circumstance for bypassing the statutory alternative remedy. Neither there has been a failure of principles of natural justice nor it is the case of the petitioner that proceedings were without jurisdiction, which are the grounds under which the bar of statutory remedy does not come in the way of entertaining the petitions under Article 226 of the Constitution of India. There are no reason to invoke our extraordinary jurisdiction in the present case. The petition is, therefore, dismissed.

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• 2025 (4) TMI 1587
  Challenging an order of the Kerala Administrative Tribunal concerning the general transfer process in the State GST Department - HELD THAT:- The Tribunal proceeded to dispose of the matter in the light of the earlier interim order as well as taking note of the Government Policy (Annexure-A1) for implementing online general transfer. No doubt, the object behind Annexure-A1 is laudable but it s implementation may take time. The Tribunal or the Court cannot force the Government to implement such guidelines within a particular time frame. Petition disposed off.

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• 2025 (4) TMI 1586
  Challenge to ex-parte order - no reasonable opportunity of hearing was provided - order was not communicated to the Petitioner and therefore the challenge to the same before this Court could not be made within the reasonable time - violation of principles of natural justice - HELD THAT:- Section 146 of OGST Act, 2017 postulates that the Government on the recommendations of the Council may notify the Common Goods and Services Tax Electronic Portal to facilitate the registration, payment of tax, furnishing of returns, computation and the settlement of the integrated tax and to carry out such other functions as may be prescribed. Thus, the creation of common portal as envisaged under Section 146 of the said Act, is to facilitate not only uploading of the returns or registration, but also the payment of tax including the adjudication made by the competent authority and uploading of the order which would be passed. The aforesaid notion can further be corroborated by Section 169 of said Act providing the mode of communication of any decision, order, summons, notice or other communication under said Act. The language used in the section leaves no ambiguity in our mind that the modes contemplated therein for communication of the decision/order or the notice can be resorted to by the authorities. The Apex Court as well as several High Courts have imposed self-restraint upon themselves in exercising the discretion under Article 226 of the Constitution, if the approach is made belatedly and bereft of any reasonable explanation. The delay and laches attributable to the conduct of the litigant may disentitle him to get the relief and the Court may at times refuse to exercise such discretion vested upon them - The moment the order is uploaded in the common portal and the returns are statutorily required to be uploaded on such portal on periodical intervals, it is inconceivable that there was lack of knowledge of said order to the Petitioner. The order was passed as far back as in the year 2023 and the challenges made to the same in the instant writ petition, filed in the year 2025, is without any explanation except that said order was not within the knowledge of the Petitioner. There is apparent delay in approaching this Court and therefore, it is refused to exercise the discretion vested upon us under Article 226 of the Constitution. The writ application is rejected.

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• 2025 (4) TMI 1585
  Violation of principles of natural justice - impugned orders passed by the first respondent, without affording an opportunity of hearing to the petitioner - HELD THAT:- In the case on hand, it is seen that all the communications/notice, which culminated in the impugned orders were uploaded in the GST Portal, that too, not under the usual column, Notices and Orders , but under the different column, i.e. Additional Notices and Orders column, which not only the petitioner but also the petitioner s Accountant was aware - it is crystal clear that the first respondent passed the impugned orders without even affording any opportunity of hearing to the petitioner, which are nothing but ex parte orders, as the same suffers from violation of principles of natural justice. If at all, the petitioner is aggrieved by the impugned orders, the petitioner has an effective and efficacious remedy of filing Appeals before the Appellate Authority, however, before the petitioner could do so, since recovery notice was issued and entire disputed tax has been recovered from the petitioner s bank account, the petitioner is constrained to approach this Court seeking for setting aside the impugned orders. Once the orders passed in violation of principles of natural justice, this Court cannot impose any condition requiring the petitioner to make any deposit - the matters are remanded to the first respondent for fresh consideration. Petition allowed by way of remand.

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• 2025 (4) TMI 1584
  Validity of summary order in Form GST DRC-07 - Seeking for issuance of Writ of Certiorarified Mandamus, calling for the records on the file of the respondent and quash the same as illegal, error of law and error on the face of record - denial of opportunity of being heard - violation of principles of natural justice - HELD THAT:- The impugned summary order dated 20.12.2023 was passed calling upon the petitioner to file objections on or before 28.12.2023 while the impugned order was passed under Section 73 of the Act on 30.12.2023, which is not a consequential order or speaking order to the summary of the order in Form GST DRC 07 dated 07.12.2023. When such being the case, this Court is of the view that the impugned order came to be passed without considering the objections which have to be made by the petitioner and that it is just and necessary to provide an opportunity to the petitioner to establish their case on merits and in accordance with law. The order impugned herein is set aside on condition that the petitioner deposits 25% of the disputed tax amount in respect of the impugned assessment period, as agreed by the petitioner, within a period of four weeks from the date of receipt of a copy of this order - Petition disposed off.

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• 2025 (4) TMI 1583
  Principles of natural justice - assessment order passed by the respondent without providing an opportunity of personal hearing to the petitioner - HELD THAT:- Considering the submissions made by the learned counsel for the petitioner as well as the learned Additional Government Pleader appearing for the respondent, it is evident that though the reply has been filed by the petitioner, without taking into consideration of the reply filed by the petitioner and without providing an opportunity of personal hearing, the assessment order has been passed, which is totally against the provision under Section 75(4) of the Central Goods and Services Tax Act, 2017. This Court is of the view that the assessment order came to be passed without affording opportunity of personal hearing to the petitioner to establish their case, thereby violating the principles of natural justice and that it is just and necessary to provide an opportunity to the petitioner to establish their case on merits and in accordance with law - Petition allowed.

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• 2025 (4) TMI 1582
  Seeking grant of privilege of anticipatory bail - criminal breach of trust and forgery related to misappropriation of funds - HELD THAT:- Considering the serious nature of allegation against the petitioners and the requirement of their custodial interrogation during the investigation of the case, this Court is not inclined to give the privilege of anticipatory bail to the petitioners. Accordingly, the prayer for grant of privilege of anticipatory bail to the above named petitioners is rejected.

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• 2025 (4) TMI 1581
  Maintainability of petition - availability of alternative remedy - Cancellation of petitioner s registration for failing to furnish the returns - complaince with due procedure contemplated under Section 29 of the CGST Act or not - HELD THAT:- Though petitioner alleges that Exhibit-P2 order of cancellation is ambiguous, on a perusal of the same, it is noticed that the respondent has complied with due procedure contemplated under Section 29 of the CGST Act. A reading of the order of cancellation as well as the show cause notice reveals that petitioner had not furnished the final return for the period prescribed under Section 29(2)(c) of the CGST Act. Despite the show cause notice issued to the petitioner as Exhibit-P1, he failed to respond at all. Even the opportunity for hearing granted to him was not availed. Therefore, petitioner cannot now turn around and allege that there was any procedural violation. The statute provides for revocation of cancellation of registration under Section 30 of the CGST Act. The said provision was also not invoked by the petitioner. The appellate remedy under Section 107 of the CGST Act has also not been invoked by the petitioner. For more than 13 months, petitioner failed to initiate any steps to challenge the order of cancellation of registration. Petitioner can thus be deemed to have acquiesced into the order cancelling his registration. Thereafter, he cannot turnaround and challenge the order of cancellation of registration. Petitioner is thus estopped from challenging the impugned order. Petition dismissed.

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• 2025 (4) TMI 1579
  Voluntary cancellation of GST registration - principles of natural justice - HELD THAT:- Since none of the material which is placed on record and which is alluded to, was ever placed before the respondents, the ends of justice would merit the petitioner being accorded an opportunity to place the same before the competent authority and for the same being examined afresh. Petition allowed by way of remand.

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• Income Tax

• 2025 (4) TMI 1632
  Validity of reopening of assessment - allegation of violation of the provisions of section 50C of the Income Tax Act, 1961 and due to noncompliance, assessee also failed to explain the transaction - as decided by HC [ 2024 (1) TMI 1009 - BOMBAY HIGH COURT] As petitioner states, and rightly so, that provisions of Section 50C of the Act would apply only to a seller and not the assessee in this case, who is the buyer of the property. There is nothing in the notice to explain as to how, if the transaction amount is less than the stamp duty value, there can be escapement of any income particularly in the hands of a buyer. Sanction should have also applied his mind and satisfied himself that the order passed u/s148A(d) of the Act was being issued correctly by applying mind and cannot be a mechanical sanction. HELD THAT:- There is a gross delay of 331 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioners. Special Leave Petition is, accordingly, dismissed on the ground of delay. Pending applications, if any, shall also stand disposed of.

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• 2025 (4) TMI 1631
  Enforceability of treaty - Necessary notification not issued by the Government for brining the treaty into force - Most Favoured Nation (MFN) - Indian treaties with countries that are members of the Organisation for Economic Cooperation and Development ( OECD ) - as decided by HC [ 2023 (11) TMI 1373 - DELHI HIGH COURT] notification u/s 90(1) is necessary and a mandatory condition for a court, authority, or tribunal to give effect to a DTAA, or any protocol changing its terms or conditions, which has the effect of altering the existing provisions of law. The fact that a stipulation in a DTAA or a Protocol with one nation, requires same treatment in respect to a matter covered by its terms, subsequent to its being entered into when another nation (which is member of a multilateral organization such as OECD), is given better treatment, does not automatically lead to integration of such term extending the same benefit in regard to a matter covered in the DTAA of the first nation, which entered into DTAA with India. In such event, the terms of the earlier DTAA require to be amended through a separate notification u/s 90. And benefit of a same treatment clause, based on entry of DTAA between India and another state which is member of OECD, the relevant date is entering into treaty with India, and not a later date, when, after entering into DTAA with India, such country becomes an OECD member, in terms of India s practice. HELD THAT:- We are not inclined to interfere with the impugned judgment and order passed by the High Court. Hence, the Special Leave Petitions are dismissed. Pending application(s), if any, shall stand disposed of.

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• 2025 (4) TMI 1630
  Validity of reopening of assessment u/s 147 - extracts of reasons for reopening are furnished and not the complete reasons recorded - petitioner s failure to file return of income within the stipulated time u/s 148 - Whether petitioner having not filed its return of income as per the notice u/s 148 today cannot raise a plea that based on the extracts of the reasons, the proceedings are bad-in-law? HELD THAT:- Admittedly, the petitioner has not complied with the directions issued in case of GKN Driveshafts (India) Ltd. [ 2002 (11) TMI 7 - SUPREME COURT] . The petitioners did not file its return of income pursuant to the Section 148 of the Act within 30 days. The petitioner filed its return of income much after the receipt of notice under Section 142 (1) of the Act i.e. the petitioner filed its return of income on 4 December 2021. In our view, the petitioner today cannot be heard to submit that based on the extracts of reasons, the proceedings are bad-in-law. The petitioner ought to have complied with the directions issued by the Supreme Court in the case of GKN Driveshafts (India) Ltd. (supra). Now that the return is filed which entitles the petitioner to reasons for reopening of the case. Therefore in view of the above and in the interest of justice, we propose to pass the following order :- (i) Respondent no.1 to furnish complete reasons recorded for reopening the assessment within one week from the date of uploading the present order. (ii) The petitioner to file its objections to the aforesaid reasons furnished within a period of 2 weeks from the date of receipt of reasons recorded within a period of 2 weeks from the date of receipt of objections. (iii) Respondent no.1 to decide the objections and pass a speaking order dealing with the objections of the petitioner raised above.

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• 2025 (4) TMI 1629
  Reassessment order issued without generating a DIN, without documents attached to the assessment order and the notice were also issued in the hand-writing signature of the AO - HELD THAT:- Subsequently, the AO has cured the defect and the AO issued a digitally signed letter with computer generated DIN and letter number. There is no contention of the petitioner that the online service of orders-letter present has not been served upon the petitioner. It is, therefore, evident that on the same date, the defect was cured, therefore, all issues raised in this regard by the petitioner would liable to fail. Whether revenue proceeding justified in relying upon the complaint and the statement of the complainant without giving an opportunity to the petitioner to cross-examine the complainant? - Not only the copy of complaint but even the documents showing transactions of the firm were made available to the petitioner. The impugned order is not based on any examination of the complainant. In fact, there is no recording of the statement of the complainant or any other witness. The impugned order of assessment is based upon the materials which came to the notice of the AO. After analysing the same, when the AO was of the view that despite supply of reason of proceedings and other relevant documents to the assessee as well as sufficient opportunity, the assessee has failed to prove and substantiate that how undisclosed sales amount have been accounted in the books of accounts for the assessment year 2017-18, he has passed the impugned order. It is not for this Court sitting in its writ jurisdiction to analyse the kind of information and the documents which were in possession of the AO while passing the impugned order of assessment. In result, we find no jurisdictional error in the impugned order. These writ applications are dismissed but with liberty to the petitioner to seek its statutory remedy in appeal, if so advised, before the competent/authority appropriate forum.

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• 2025 (4) TMI 1628
  Validity of reassessment proceedings - period of limitation - excess deduction claimed by the assessee u/s 80IB - whether the date of claim of deduction u/s 80IA/IB would be proper or whether the assessments for the periods 2002-03, 2003-04 and 2004-05 required to be re-visited u/s 148? HELD THAT:- As far as the first two assessment years are concerned, reassessment proceedings have been initiated beyond the period of four years from the end of the relevant assessment year, thus attracting the application of proviso to Section 147 of the Act which we will presently advert to. For assessment year 2004-05, the re-opening is within the period of 4 years from the end of the relevant assessment year. Hence, as far as assessment years 2002-03 and 2003-04 are concerned, an additional condition that is cast upon the revenue is as set out under the proviso to Section 147 requiring that the Department should establish that the assessee has not made a full and true disclosure of all material aspects in its returns of income at the initial stage. It is only upon this burden being discharged that the Department would be in a position to avail the extended period of limitation from 4 to 6 years. The income tax returns are full and complete, in that there is no omission of the material particulars in regard to deduction under Section 80IA/IB. In fact, the very trigger for these proceedings is a Certificate issued by the Chartered Accountant in respect of the years in question where the Chartered Accountant has, in column 8 in Form 10 CCB stated that the commencement of production of business was on 18.03.1998. In column 9 of Form10 CCB annexed to the return, the initial year of claim is shown to be 2000-01. The assessee has explained that the date of commencement of production ought not to have been 18.03.1998, as that was the date on which the Licence to Work had been granted to operate the Rakholi factory. We find merit in the contention that it is only when the Licence to Work had been granted, would the assessee proceed to install machinery and thereafter commence manufacture. Hence the date of grant of Licence can never normally be the date of commencement of business. Hence, there is a clear error in the date set out in column 8 of Form 10 CCB where the date of commencement of production has been is shown to be the date on which the Licence to Work had been granted. It is nobody s case that the date stipulated in error was motivated. In fact, had it been the intention of the assessee to suppress information or to obtain a benefit that it was not eligible for, it would have ensured that there was no mismatch between the particulars in columns 8 and 9 of Form 10 CCB as the very next column, i.e., column 9 reveals the initial year of claim as 2000-01. Hence it is evident that the date 18.03.1998 in column 8 was only an error and nothing more. The same error repeats itself as far as the Chinchpada unit is concerned, except that in column 8 in Form 10 CCB relating to Chinchpada unit, the date of commencement of production is shown as 07.06.1996 which is the date on which the Licence to Work had been granted. Column 9 for that unit reveals the initial year of claim as 1999- 2000. The same explanation as set out for the Rakholi unit has been furnished for the Chinchpada unit as well and the conclusions of the Court supra would apply equally as far as this unit too is concerned. As pointed out by learned Senior Counsel, the use of the word true in the proviso to Section 147 is a charge upon the assessee to have intended to provide false information at the first instance. Hence the use of the word true , as understood in common parlance would carry with it the requirement that the department must establish animus or the intention to suppress material, to the assessee s advantage. The Court agrees that there is no intention to suppress information to obtain a benefit to which it was disentitled. On the other hand, the information supplied has been erroneous, to its disadvantage. At best, it may be said that the assessee has been remiss. However, this, by itself, would not establish falsity of the material particulars provided at the initial stage. A perusal of the orders indicates detailed reference to the discussions that were had qua the officer and the assessee. In conclusion, the officer has carefully and consciously recorded that as far as deduction under Chapter VI A is concerned, in the order of assessment for assessment year 2000-01, the year of claim for Rakholi unit was the first year and for the Chinchpada unit was the second year. The law requires the assessing officer to specifically record in each assessment year, the year for which the claim of the assessee u/s 80IA/IB was being considered. It is in compliance of this, that the assessing officer has been careful and conscious enough to set out the year of claim in the assessment order itself. It is also relevant that those assessment orders, for the previous years, i.e., 2000-01 and 2001-02, remain undisturbed even at this point of time. We, hence, find that the action of the Assessing Officer to have cherry-picked the assessments for assessment years 2002-03, 2003-04 and 2004-05 alone to disturb the sequence of claim as being wholly misconceived and without any basis whatsoever. Thus, as far as the first two years are concerned, the assessing officer has availed the benefit of larger limitation of 6 years which he is not entitled to, since there has been no untrue or incomplete disclosure by the assessee at the first instance. As far as assessment year 2004-05 is concerned, we find that the grant of deduction is based on the records. There is absolutely no material available to indicate that the original order of assessment is liable to be re-opened. In Kelvinator India Ltd [ 2010 (1) TMI 11 - SUPREME COURT] which is a matter relating to reassessment within 4 years, the Supreme Court has categorically emphasised the difference between proceedings for re-assessment and proceeding for review holding that the department officer has the power only to re-assess and not review on the same facts. Writ appeal dismissed.

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• 2025 (4) TMI 1627
  Addition u/s 40(a)(ia) - payments made without deduction of TDS - when the amount is payable - HELD THAT:- The Hon ble Apex Court in Palam Gas Service [ 2017 (5) TMI 242 - SUPREME COURT] has interpreted the issue namely the word payable in Section 40 (a) (i-a) which would mean only when the amount is payable and not when it is actually paid. Grammatically, it may be accepted that the two words i.e. payable and paid , denote different meanings The sole consideration taken by the forum is the judgment passed by in CIT Vs. Vector Shipping Services (P) Ltd [ 2013 (7) TMI 622 - ALLAHABAD HIGH COURT] which has been over-ruled by the Hon ble Apex Court in the case of Palam Gas Service (supra), holding therein that the Allahabad High Court has not laid down good law; meaning thereby the error has been rectified by the Hon ble Apex Court, said to be committed by the Allahabad High Court, by laying down the correct law. Therefore, applying the law laid down by the Hon ble Apex Court in the case of Directorate of Revenue Intelligence vs. Raj Kumar Arora Ors. [ 2025 (4) TMI 1179 - SUPREME COURT] will have retrospective application. This Court, taking into consideration the fact the forum has passed the impugned order solely taking into consideration the judgment passed in the case of CIT Vs. Vector Shipping Services (P) Ltd. (supra) which has been over-ruled holding the same to be not good in law by the Hon ble Apex Court, as such it is not rendered to be in existence, as such the impugned order requires interference. Oder passed by the Income Tax Appellate Tribunal, Circuit Bench, Ranchi [ 2016 (3) TMI 1489 - ITAT RANCHI] requires interference. The matter is remitted before the forum, i.e. Income Tax Appellate Tribunal, Circuit Bench, Ranchi for fresh adjudication of the issue, taking into consideration the observation made by this Court.

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• 2025 (4) TMI 1626
  Income deemed to accrue or arise in India - treatment of commission income and the amounts received by the Assessee as subscription fee - AO held that the commission income and the subscription fee received by the Assessee from entities in India were required to be construed as fees for technical services [FTS] and were chargeable to tax under the Act and passed the draft assessment orders - HELD THAT:- For any receipt to fall within the expression fees for technical services , it is necessary that the same be received as consideration for rendering services which are of technical nature. The expression rendering of managerial, technical or consultancy services must necessarily be construed in a narrow sense where such specialized services are rendered by the service provider as may be required by the service recipient. Ordinarily, the same would require human intervention. Mere access to technical database or technical literature would not constitute provision of technical services. The sale of technical texts, information or research material collated by extensive research would not constitute rendering technical services within the scope of Section 9 (1) (vii) of the Act. In the facts of the present case, the subscription fee collected by the Assessee from various third parties is for subscription to e-magazines and content which is standardized and not specifically collected or generated for any particular entity. Thus, clearly, the subscription fee would not partake the character of a fee for technical service within the meaning of Explanation 2 to Section 9 (1) (vii) of the Act. It is not necessary to examine the provisions of DTAA. The same would be necessary only if the subscription fee was chargeable to tax under the normal provisions of the Act. No substantial question of law arises for consideration.

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• 2025 (4) TMI 1625
  Validity of notices issued in light of the limitation period prescribed u/s 153(3) - Transfer pricing adjustments - HELD THAT:- As the order of the Tribunal had come to be passed after 01 April 2019, and consequently the prescription of 09 months as appearing in the principal part of sub-section (3) would have to be read as 12. When 12 months are computed from the order of 21 October 2020, it is ex facie evident that the jurisdiction and authority inhering the respondents to frame an order of assessment pursuant to a direction framed by the Tribunal would have undoubtedly come to an end on 21 October 2021 and no longer exists today. We, consequently, allow the instant writ petition and render a declaration that any assessment that may be now proposed for AY 2010-11 would be clearly time barred and contrary to the mandate of Section 153(3) of the Act. As a consequence to the above, the notices of 06 March 2023 and 19 March 2023 are hereby quashed and set aside.

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• 2025 (4) TMI 1624
  Estimation of income - bogus purchases - addition in respect of alleged bogus purchases based on material and statements which were admittedly not provided to the appellant for rebuttal and cross examination - HELD THAT:- After considering the decision in case of Pankaj K. Chaudhary [ 2023 (3) TMI 1402 - GUJARAT HIGH COURT ] Tax Appeals filed by the revenue were dismissed as the question of addition of purchases made by the AO was restricted by the Tribunal to 6% was already confirmed by this Court. Tax Appeal are also stand answered as the assessee being aggrieved by the very same order has preferred this appeal raising the questions of law.

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• 2025 (4) TMI 1623
  Levy of penalty u/s 271(1)(c) - Disallowance of 25% of the purchase alleged of bogus and made addition after rejecting books of account u/s 145(3) - CIT(A) confirmed penalty levy . As decided by AM - It is clear from the order of the CIT(A) that he has allowed the penalty appeal of the assessee for the assessment year 2007- 08 on the same set of facts whereas for assessment years 2008-09 and 2009-10 though the facts being same should have been allowed. The doctrine of binding precedent has the merit of promoting a certainty and consistency in judicial decisions, and enables an organic development of the law, besides providing assurance to the individual as to the consequence of transactions forming part of his daily affairs. And, therefore, the need for a clear and consistent enunciation of legal principles should be followed we find out that the ld. CIT(A) has not given any reasons as to why he has not followed his own order in the case of same assessee in spite of the fact that the issues and analogy in both the appeals are the same. Hence, we do not concur with the findings of the CIT(A) as both the issues are fully covered by the decision of ITAT Jaipur Bench (supra) as narrated in the order of the CIT(A) and the same has been followed by him while determining the appeal of the assessee for assessment year 2007-08. The records reveal that the purchase made by the assessee alleged to have been considered as bogus and thereby the profit was estimated and confirmed in the hands of the assessee. That claim itself is not considered fully not correct and thereby the profit was added. Thus, we get support of the decision of the apex court in the case of Reliance Petroproducts Private Limited. [ 2010 (3) TMI 80 - SUPREME COURT] wherein already seen the meaning of the word particulars in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the Return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under section 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to the inaccurate particulars. Thus, appeals of the assessee relating to levy of penalty u/s 271(1)(c) of the Act are allowed. As decided by JM - The undisputed fact was that the additions were made on account of bogus purchases and ultimately, the Tribunal restricted the quantum addition at 12.5% of the bogus purchases. Therefore, it was held that there was no merit in the contention of the ld. Counsel that the profit had been estimated and the penalty had been levied on estimated profit. Therein, facts on record showed that there were bogus purchases and only the profit element had been added which meant that the assessee had concealed the income to this extent in the garb of purchases which turned out to be bogus. Therefore, considering the facts of the case in totality, it was held that there was no hesitation in confirming the penalty so levied u/s 271(1)(c) of the Act. The appeal filed by the assessee was accordingly dismissed. Returning to present appeals, once, the abovesaid penalty order as regards previous assessment year 2007-2008, based on similar facts was set aside, while dealing with the appeals challenging 2 penalty orders pertaining to the subsequent assessment years i.e. 2008-09 and 2009-10, Learned CIT(A) should have maintained consistency and set aside the penalty, especially when it was also not a case of 100% bogus purchases. The impugned orders passed by Learned CIT(A) deserve to be set aside.

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• 2025 (4) TMI 1622
  Penalty levied u/s.270A - Foreign Tax credit denied for non filing Form 67 within the due date of filing of return - HELD THAT:- Cojoint reading of sub-section (2) (9) of section 270A leads to the inference that if the income is assessed greater than the income reported in the return of income or determined in the return processed u/s 143(1)(a) and the addition in the total income of the assessee is due to the reason of misrepresenting or suppressing of facts, failure to record the investment in the books of account, unsubstantiated claim of expenditure disallowed, recording false entries in the books of account, failure to record any receipt in the books of account having bearing on the total income and failure to report any international transaction or specified domestic transactions. In the case in hand, though the AO has not enhanced the total income of the assessee while passing the assessment order, but the tax liability of the assessee was increased due to the reason that the claim of credit of foreign tax was denied by the AO due to the reason of delay in filing Form-67. Thus, it is clear from the facts that the case of the assessee does not fall in the category of misreporting of income as envisaged in sub-section (2) and (9) of section 270A - Decided against revenue.

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• 2025 (4) TMI 1621
  Levying penalty u/s 271(1)(c) - Estimation of income - bogus purchases - As alleged invalid penalty order in which the limb of levy of penalty u/s 271(1)(c) not mentioned - addition made on estimation basis - HELD THAT:- As decided in Subhash Trading Co. [ 1995 (11) TMI 37 - GUJARAT HIGH COURT ] and Whitelene Chemicals [ 2013 (8) TMI 144 - GUJARAT HIGH COURT ] and Krishi Tyre Retreading Rubber Industries [ 2014 (2) TMI 21 - RAJASTHAN HIGH COURT ] have held that penalty u/s 271(1)(c) of the Act could not be levied where addition was on estimated basis. The Co-ordinate Bench in cases of Yogendra Raj U Sanghvi [ 2023 (10) TMI 1395 - ITAT SURAT ] Deepak Banwarilal Agarwal [ 2024 (2) TMI 1386 - ITAT SURAT ] have also held that no penalty is leviable on estimated addition. As decided in Mun Gems [ 2024 (1) TMI 209 - ITAT MUMBAI ] where AO treated entire purchase as bogus based on findings of Investigation Wing and levied penalty u/s 271(1)(c), since payment of purchase had been made through account payee cheques and there was corresponding sales, ad hoc GP rate applied on alleged bogus purchases to factor in suppression of alleged gross profit could not be basis of levying penalty for furnishing of inaccurate particulars of income or concealing particulars of income. Since the facts are similar, following the above decisions, the AO is directed to delete the penalty levied u/s 271(1)(c) of the Act. Assessee appeal allowed.

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• 2025 (4) TMI 1620
  Charging the tax on the trust at the rate ordinarily applicable to total income of association of persons or maximum original rate - Liability to exemption u/s 164 - assessee has submitted there are only three beneficiaries of the said trust created by late Sakuntalla Balvantrai HELD THAT:- The brief facts of the case are that the assessee trust is a trust at will , which was created by late Smt. Sakuntalla Balvantrai, for the benefit of her daughter and children of her daughter. The only income of the trust is the interest income which is distributed to the beneficiaries. AO is directed to charge the tax on the trust at the rate ordinarily applicable to total income of association of persons and not at the maximum original rate. Appeal of the assessee is treated as allowed.

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• 2025 (4) TMI 1619
  Disallowance of deduction u/s. 80P - disallowance of provision on account of prize money distributed to the members and disallowance of bad debts - CIT(A) in appeal held that the assessee was entitled to deduction u/s. 80P, however, upheld the action of the AO in making disallowance for provision for prize money and bad debts - HELD THAT:- A perusal of the impugned order of the CIT(A) would reveal that the CIT(A) has already decided the issue of deduction u/s. 80P of the Income Tax Act in favour of the assessee. Once the assessee is held to be entitled to deduction u/s. 80P of the Income Tax Act, the income of the assessee will be exempt from taxation @ 100%. Even if, the ld. CIT(A) has upheld the order of the A.O. relating to the disallowance of provision of prize money and bad debts, the result would be that it will increase the income of the assessee, which otherwise, is eligible for deduction u/s. 80P of the Act. Under the circumstances, the assessee is not left with any grievance/cause of action to file the present appeal. The said appeal is therefore dismissed. However, subject to the observation that any increase in income of assessee on account of aforesaid disallowance will not affect the claim of the assessee to claim deduction u/s. 80P of the Income Tax Act. Appeal of the assessee stands dismissed.

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• 2025 (4) TMI 1618
  Validity of reopening of assessment without serving any notice - HELD THAT:- The Revenue could not prove that there was service of notice u/s 148 of the Act before completion of the reassessment u/s 144 r.w.s. 148 of the Act. As a matter of fact the Assessing Officer in the remand proceedings admitted that notice issued u/s 148/142(1) of the Act had returned by the authorities and therefore it can be safely concluded that there was never been any service of notice to the Assessee. Thus, the reassessment made u/s 144 r.w.s. 148 of the Act is hereby quashed. Decided in favour of assessee.

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• 2025 (4) TMI 1617
  TDS u/s 194C - Disallowance u/s 40(a)(ia) - non-deduction of TDS on the foods supply bills - HELD THAT:- When the matter carried before DRP, DRP hold that the impugned transaction with the catering service provider was covered u/s 194C of the Act and hence, assessee was liable to deduct the TDS. But at the same time on the alternative plea of the assessee that the other party has paid the tax the assessee should not be treated as an assessee in default and therefore, the matter was set aside to the file of the AO. AO has not discussed that issue and directly taken a view that since the assessee has not recorded purchase and debited the said as expenses and therefore, he ordered for disallowance. Before us on this issue ld. AR invited our attention to the invoice which are of the nature supply of foods packets and not of the catering service. Had been a case of catering service the provision of section 194C shall apply but in this case this being the case of supply of foods and the same being subjected to GST the same shall not be considered as contract and therefore, the provision of section 194C shall not apply on those transaction entered into by the assessee in the case of M/s. Ganesh Lal Yadav-HUF. Considering that aspect of the matter ground no. 1 raised by the assessee is allowed. Addition u/s 40(a) (ia) - non-deduction of TDS on business promotion expense to promote business and rewards to employees to achieve work targets - HELD THAT:- Ratnagiri Impex Private Limited [ 2015 (1) TMI 354 - ITAT BANGALORE ] held the facilities/amenities made available by the petitioner No. 1 hotel to its customers do not constitute work within the meaning of section 194C of the Act. Consequently, the Circular No. 681, dated 8-3-1994 to the extent it holds that the services made available by a hotel to its customers are covered u/s 194C of the Act must be held to be bad in law. Thus petition is allowed by quashing the Circular No. 681, dated 8-3-1994 to the extent it holds that section 194C of the Income-tax Act applies to payments by the customers to the petitioner No. 1 hotel for availing the facilities/amenities made available by the petitioners. Decided in favour of assesee.

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• 2025 (4) TMI 1616
  Nature of receipt - Compensation in lieu of the right to sue awarded by way of damage suit by order of the Hon ble High Court - revenue of capital receipt - HELD THAT:- As relying on Shri Virendra Bhavanji Gala [ 2023 (9) TMI 746 - ITAT MUMBAI] ] and Vijay Flexi Containers [ 1989 (9) TMI 16 - BOMBAY HIGH COURT ] amount of compensation received is capital receipt is upheld and consequently, the grounds raised by the Revenue are dismissed.

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• 2025 (4) TMI 1615
  Addition u/s 69A - cash receipts as inflated to explain the cash deposits post-demonetization - HELD THAT:- It is not in dispute that the AO has accepted the books of account filed by the assessee. The turnover of the assessee was Rs. 31 crores, and during the demonetization period, cash sales amounting to Rs. 2,53,99,000/- were recorded. AO based on certain calculations, concluded that there was inflation of sales to the extent of Rs. 1.40 crores and proceeded to make an addition on the assumption that cash deposits were made out of demonetized currency. There is no material on record to show that the sales were inflated or that the deposits were made out of unaccounted cash. It is noted that the assessee s cash book, stock register, and VAT records were duly produced and verified, and no discrepancies were pointed out therein. It is also noted that the festive season of Diwali, which generates higher sales, coincided with the demonetization period, unlike the preceding year when the timing differed. Therefore, a mere comparison with previous years figures without considering the seasonal impact is not sufficient to draw an adverse inference. Further, the cash on hand as per the books prior to the demonetization period was verifiable and matched with the records filed, and no adverse findings have been recorded by the lower authorities on this aspect. In such circumstances, when the turnover, stock records, and cash flow are duly explained and supported by evidence, and no purchaser has been disbelieved, the addition made on mere assumptions and conjectures is not sustainable. Decided in favour of assessee.

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• 2025 (4) TMI 1614
  Addition u/s 69A - cash found during search operations - search and seizure operation under Section 132 was carried out at the residential premises of the assessee - Disclosures made before the Hon ble Income Tax Settlement Commission (ITSC) - HELD THAT:- The search operations were conducted simultaneously across group cases, and GTIPL had filed a petition before the Hon ble Settlement Commission admitting undisclosed income, which allegedly included the cash in question. The record shows that the Hon ble Settlement Commission duly considered the cash flow statement, the balance sheet, and other relevant documents before passing the settlement order. It is evident that the amount was duly accounted for by GTIPL in its financial statements placed before the Settlement Commission, and no objection was raised by the Revenue in this regard. Once the Revenue has accepted the ownership of the cash in the hands of GTIPL before the Settlement Commission, it is impermissible for the Revenue to take a contradictory stand in the present proceedings and allege that the said cash belonged to the assessee. It is a well-settled principle that the Revenue must maintain consistency in its approach and cannot adopt contradictory stands in different proceedings. Under the provisions of Section 245D settlement reached before the Hon ble Settlement Commission is final and binding and cannot be reopened or challenged in any other proceedings. Therefore, once the amount of Rs. 7,00,000/- has been considered as part of the undisclosed income of GTIPL in the settlement proceedings, the same cannot be taxed again in the hands of the assessee.Decided in favour of assessee.

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• 2025 (4) TMI 1613
  Additional depreciation u/s 32(1)(iia) on computers used for the production of software - assessee explained that it was in the business of development embedded software, which amounts to the production of an article or thing, and that the computers used for software production qualify as plant and machinery, thus making them eligible for additional depreciation - AO held that computer software is not an article or thing - HELD THAT:- We note that issue on hand is covered in favour of the assessee by the order of coordinate bench of this Tribunal in the own case of the assessee for A.Y. 2012-13 [ 2024 (12) TMI 1561 - ITAT BANGALORE] wherein held that the assessee is engaged in the production of an article or thing (software), the computers used in the production of such software can be treated as plant and machinery under the provisions of Section 32(1)(iia) of the Act. Therefore, the claim for additional depreciation on the computers used in the production of software is in line with the provisions of the Act. Decided in favour of assessee. Disallowance of the claim of investment allowances u/s 32AC - AO denied claim as being the assessee not engaged in the business of manufacture or production of any article or thing AND being the computer or computer software not included in the definition of New Assets as per the provision of section 32AC(4)(iii) of the Act - HELD THAT:- As far as, the view of the revenue authority that the assessee is not engaged in the business of manufacture or production of any article or thing is concerned, we note that issue is settled in favor of the assessee while deciding the dispute regarding the claim of additional depreciation u/s 32(1)(iia) of the Act. The precondition to claim the additional depreciation u/s 32(1)(iia) of the Act and investment allowances u/s 32AC of the Act same i.e. assessee should be engaged in the business of manufacture or production of any article or thing. Hence, following the finding given by us in respect of ground raised in connection to additional deprecation we hold that the assessee is engaged in the business of manufacture or production of any article or thing . Whether computer or computer software not included in the definition of New Assets as per the provision of section 32AC(4)(iii)? - What is excluded from the term new asset is office appliance which may include computer and computer. In other words, computer or computer software installed as office appliances are excluded and not the computer installed for the purpose of the production of article or things. Hence, the computer installed by the assessee for the purpose of development of software activity which is held by us production of article or things shall be available for investment allowances under the provision of section 32AC of the Act whereas no allowance shall be allowed on the computer installed for administrative purposes. We find that there was no detail available on record suggesting that how many computers were installed/ used in the activity of development of computer software. Therefore, we find necessary to set aside the issue to the file of the AO to adjudicate the issue afresh in the light of the above stated discussion. The assessee shall provide the detailed of the computers installed in the activity of software development. AO after verification shall allow the claim of the assessee if the new computers were installed for the purpose business of the development and not for the purpose of administration or as office appliance. Hence, the ground of appeal of the assessee is hereby partly allowed for statistical purposes. Disallowance u/s 14A - assessee earned exempt income and made a suo-moto disallowance of expenses - HELD THAT:- We note that that the issue of disallowance under section 14A of the Act is covered in favour of the assessee by the order of this Tribunal in the own case of the assessee for A.Y. 2010-11 [ 2022 (2) TMI 1503 - ITAT BANGALORE] as held AO has not expressly mentioned any dissatisfaction in the suomoto disallowance computed by assessee we hold that the disallowance computed by the assessee is appropriate. Disallowance of claim of deduction of state tax paid in USA - assessee claimed that the impugned tax is prior charges on the income, and the impugned payment was claimed as an expenditure in the return of income - AO disallowed the same by holding the taxes paid in foreign territory can be claimed under section 90/91 of the Act following the procedure and condition provided therein and not as a deduction - HELD THAT:- If the assessee is not eligible for the benefit of the provisions specified under section 90/91 of the Act, then the assessee is eligible for deduction representing the amount of tax paid in the foreign country. Accordingly, respectfully following the order of Bank of India [ 2021 (3) TMI 343 - ITAT MUMBAI] , we set aside the order of the learned CIT-A and direct the AO to delete the addition made by him. Hence, the ground of appeal of the assessee, is hereby allowed. Not granting the credit of MAT as per section 115JAA - HELD THAT:- As we note that the issue of MAT credit was raised first time before us. The lower authorities did not get the opportunity to apply their mind. Therefore, in the interest of justice and fair play, we set aside the issue to the file of the AO. AO is directed to allow MAT credit, if any, as per law. The assessee is directed to furnish the necessary details. Henc the ground of appeal of the assessee is allowed for statistical purposes.

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• 2025 (4) TMI 1612
  Addition u/s 68 - unexplained cash deposits in his bank account - as alleged the assessee had submitted cash books, which had to be revised and there was a variation in the opening balance declared by the assessee in such cash book, which raised doubt as regards to the genuineness of such cash book, secondly, if the assessee was having substantial cash in hand there was no justification for further/regular cash withdrawals and the burden was on the assessee to substantiate as to why the assessee was regularly withdrawing cash from his bank account when he was having substantial cash in hand and thirdly, the assessee has shown a meagre cash expenditure towards household expenses which further supports that the cash book furnished by the assessee was non-genuine. HELD THAT:- Despite the above points noted by the Department, it has not been disputed that the assessee had made regular withdrawals from his bank account, which as per the assessee was the source of cash deposits in his bank account. As regards the contention of the assessing officer that the assessee had shown a meagre household expenses the Financial Year 2015-16 and 2016-17, the counsel for the assessee pointed out that this is factually incorrect and on this issue, the Tax Authorities have failed to critically analyse the cash book submitted by the assessee which has shown a higher amount of cash expenses towards household expenses. Thirdly, we observe that the Department has not brought anything on record to demonstrate that the cash so withdrawn by the assessee from his bank account, had been utilised by the assessee somewhere else. Unless, the Department gives a specific finding on how the cash withdrawals made by the assessee from his bank account were not available with him for redeposit, then, in our considered view, no addition can be made by the Tax Authorities on the assumption/presumption that the same could have been utilised for household expenditures. The assessee has been able to explain the source of cash deposits in his bank account and accordingly, the appeal of the assessee is allowed.

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• 2025 (4) TMI 1611
  Addition u/s 69 - unexplained investments - HELD THAT:- As before us, AR drew our attention to the evidences to the source of payments were raised from assessee s family members. Assessee stated the sources for payment of sale consideration. We note that from the said statement, the assessee availed loan from HDFC Bank, own fund out of earnings, LIC policy maturity and family support. There is no dispute with regard to own fund out of earning, housing loan from HDFC and LIC policy maturity. Funds availed from family members - On perusal Indian Bank statement, on examination of the same, we find that on 17.05.2014 27.05.2014, Rs..1 lakh and Rs..4 lakhs were received by the assessee from his brother. Assessee received Rs..2 lakhs from his wife on 12.11.2014. Again on 08.12.2014, he received Rs..1,30,000/- though cheque from Mr. Ramanathan. We find, on verification of the same, that the assessee explained entire sale consideration towards investment in immovable property by availing loan from HDFC, own earnings, LIC policy maturity and funds from his family members. But, however, the AO did not give credit to the same, thereby, in our opinion, the addition is not maintainable. Grounds raised by the assessee are allowed.

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• 2025 (4) TMI 1610
  Demand u/s 201 201(1A) - assessee in default for non-deduction of TDS on certain expenses/ - HELD THAT:- We note that the facts remain admitted that no expenditure incurred by the assessee as on 31.03.2015. The provision was made on the basis of estimation relating to supply of services and goods by the vendors. The facts and circumstances of the case clearly show that no invoice is received by the assessee from the vendors and no payment was made to the vendors towards services and supply of goods rendered by the vendors as on 31.03.2015. The provision was created by the assessee is only an estimation basis taking into account the quantum of services and supply of goods by the vendors. On an examination of the tabular form, which, clearly demonstrate the facts of the case in detail, which is not disputed by the Revenue, therefore, in this regard, we find the facts and circumstances, as referred by the ld. AR, in the case of Biocon Ltd. [ 2022 (4) TMI 795 - ITAT BANGALORE ] are similar and identical. The assessee received invoices from the vendors to an extent of Rs..24,76,17,968/- only, meaning thereby the provision created was in excess by Rs..3,11,71,303/- [Rs..27,87,89,271 Rs..24,76,17,968/-]. When the payment is made, the provision for expenses account shall be debited with Rs..24,76,17,968/-, which will leave a credit balance of Rs..3,11,71,303/- in the provisions for expenses account. This remaining credit balance is transferred to profit and loss account. Accordingly, the provision for expenses account is shown NIL balance and there is impact on the profit and loss account of the succeeding year by way of income of Rs..3,11,71,303/-. Short deduction of TDS on the excess provision - We find force in the arguments of the ld. AR that no interest could be imposed on excess provision, which remained unpaid. Further, we note that the said excess provision was transferred to profit and loss account and admittedly, there is an impact on the P L account in the succeeding year. Therefore, we find when the said excess provision is not paid to any vendor and there is no recipient to the said amount, when there is impact on P L account by way of income, in our view, the Assessing Officer, holding short deduction and levying interest on such short deduction is not justified. Therefore, we hold that there is no short deduction under section 201 of the Act and the interest under section 201(1A) calculated at 1% per month on such short deduction of TDS for a period of 85 days on the amounts which remained unpaid is not justified and it is deleted. Thus, the grounds concerning the issue under section 201/201(1A) of the Act is allowed. Interest u/s 201(1A) imposed on the situation i.e., the actual payment made in the succeeding year is less than the provision amount - We note that admittedly, actual payment was made less than the amount of provision made. There is no doubt the TDS was deducted by the assessee at the time of credit or at the time of making actual payment to the vendors of the assessee. We find, since the yearend provision was made as on 31.03.2015, the date on which TDS was deductible shall be on 31.03.2015. Thus, the assessee is liable to pay interest from that date to the date of actual deduction/payment as per the provisions of section 201(1A) of the Act on the amount of actual payment made. In the present case, as already discussed above, the provision of Rs..27,87,89,271/- was made as on 31.03.2015 and actual payment was made to an extent of Rs..24,76,17,968/-. Therefore, the liability to deduct TDS shall be on the amount of actual payment only. In this scenario, following the order of Biocon Ltd. [ 2022 (4) TMI 795 - ITAT BANGALORE ] we hold the tax liability upon the recipient will be on the amount to extent of Rs..24,76,17,968/- and accordingly, the TDS liability also on the said amount actually paid and interest under section 201(1A) of the Act is liable to be paid on Rs..24,76,17,968/-.

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• 2025 (4) TMI 1609
  Maintainability of appeal as per section 249(4) - assessee had not paid the tax on returned income and the particulars of payment was also not mentioned in column 8 of Form 35 - HELD THAT:- It is pertinent to note that the provisions of section 249(4)(b) of the Act is clear that appeal before the ld. CIT(A) should be admitted only when the assessee has paid an amount equal to the amount of advance tax, which was payable by him. Where the return of income has not been filed the proviso to said section also describe that the assessee will get exemption from this clause, if an application is made before the ld. CIT(A) for not paying an amount equal to the amount of advance tax for any good and sufficient reason to be recorded in writing. In the instant case, as observed by the AO that the assessee had stated that they have exempted income for the financial year 2016-17 and therefore, not filed the income tax return for the said period. Before us also, assessee submitted that the assessee s income are exempted and therefore, the question of paying advance tax does not arise in the case of the assessee as no amount is payable by the assessee. Being so, we are of the opinion that dismissing the appeal on the grounds that the same is not maintainable as per section 249(4) of the Act is not sustainable as the income of the assessee are exempt from income tax. The assessee is not liable to pay any advance tax even though they have not filed the return of income. Therefore, this ground of the assessee is allowed. Unexplained cash credit u/s 69A and denial of exemption u/s 80P - In the present case assessee had submitted the reply along with the cash book and income and expenditure account during the course of assessment proceedings. We are of the considered opinion that since the ld. CIT(A)/NFAC has not considered the grounds of appeal raised by the assessee on merits and therefore in the interest of justice and equity, we are remitting the entire issue in dispute to the file of ld. CIT(A)/NFAC for fresh consideration. Appeal filed by the assessee is partly allowed for statistical purposes.

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• Customs

• 2025 (4) TMI 1608
  Interest payable on CVD levied under Section 3 of the CT Act or on SAD levied under Section 3A of the CT Act - Constitutional validity of the Notification No. 18/2015-Cus dated 01.04.2015 - HELD THAT:- It is not inclined to interfere with the impugned judgment; hence, the present special leave petition is dismissed.

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• 2025 (4) TMI 1607
  Personal liability of petitioner for non-fulfilment of export obligations by the Company - Petitioner was appointed as an independent non-executive director of the Company in the year 1985 and was neither a promoter nor was involved in the day-to-day affairs of the Company - time barred SCN - HELD THAT:- This Court has in Pankaj Mehra case while relying on the judgments passed in Krishan Kumar Bangur case [ 2006 (4) TMI 256 - HIGH COURT OF DELHI ] and Ved Kapoor case [ 2013 (9) TMI 706 - DELHI HIGH COURT ], and on the judgment of the Supreme Court in the Santanu Ray vs. Union of India [ 1988 (8) TMI 106 - DELHI HIGH COURT ], has held that unless specific allegations have been made which discuss the role of a director in the export performance, there is no question of finding the director personally liable for the same. The order impugned or even the Four O-I-O s have failed to fulfil this or show any adjudication on this aspect. In the absence thereof, the Respondent cannot now by, taking additional grounds and pleas, attempt to go beyond the Impugned Order or the Four O-I-O s. There is another aspect which has to be taken into consideration. The export licences were issued during the time period of 1989-1991. Between 27.06.2002 and 11.09.2008, the Respondent issued multiple notices, summons, and orders concerning various Advance Licenses held by the Company. The Four O-I-O s were then passed on 08.09.2009 and 17.09.2009. No explanation has been provided by the Respondent in these Four O-I-O s for the delay in taking steps against the Petitioner or the Company. No reason has been urged before this Court either. In any event, the Petitioner has stated that he was appointed as an independent non-executive director and that he had no role to play in the company s day to day affairs or export obligation or licences - The Respondent has also not disputed the fact either in the Impugned Order or in the Four O-I-O s that the Company went into liquidation in 1998, and that all documents and records were taken over by the Official liquidator. Thus, once a company goes into liquidation, all proceedings to be initiated against such company for the failure to submit documents in compliance with export obligations could only be initiated as is mandated in law. There is no evidence of this being done by Respondent either. This Court therefore finds no merit in the contentions of the Respondent - Petition disposed off.

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• 2025 (4) TMI 1606
  Seeking grant of anticipatory bail - smuggling foreign origin gold and cash - applicability and scope of Section 135 of the Customs Act, 1962 - HELD THAT:- Relevant aspects have been dealt with in detail by Co-ordinate Bench of this Court in Ram Krishna Jaldhar Parai versus Union of India and others [ 2024 (10) TMI 847 - ALLAHABAD HIGH COURT ] and has recorded a prima facie satisfaction with regard to Sections 135 of the Customs Act to the effect that a person can be punished for the limited offence if ingredients of the said sections are made out which prescribe a maximum sentence of upto 7 years. The order also indicates the fact that the recovery seems to be of the firm Messrs Ram Laxman and Company which is a proprietorship and duly registered with GST NSMP. The order also adverts the income tax and GST return of the firm. Prima facie satisfaction also has been recorded that quantum of business generated by the firm can gave rise to the turn over as suggested and the said owners of the firm may have sources to justify availability of quantity of gold and jewellery recovered. Considering aforesaid aspects as well as the fact that there is no recovery made from the applicant and the complaint having already been filed against the applicants, and considering judgment rendered by Hon ble Supreme Court in the case of Sanjay Chandra v. Central Bureau of Investigation, [ 2011 (11) TMI 537 - SUPREME COURT ], this court finds that the applicant is entitled to grant of anticipatory bail. It is provided that in the event of arrest, the applicant- Avijit Manna shall be released on anticipatory bail in the aforesaid Case Crime number on his furnishing a personal bond with two sureties each in the like amount to the satisfaction of the arresting officer/investigating officer/S.H.O. concerned with the conditions imposed. Conclusion - The charge under section 135 of the Customs Act is yet to be established in trial and since the maximum punishment which can be made applicable is upto 7 years, the applicant is entitled to grant of anticipatory bail. The bail application allowed.

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• 2025 (4) TMI 1605
  Levy of penalty under Section 117 of the Customs Act, 1962 on the Customs House Agent (CHA) and Rajiv Sahni, who was working merely as Business Development Associate of M/s. Essar Oil Limited - alleged violations related to clearance of goods under a Project Authority Certificate (PAC) - no direct contravention by the CHA is established. Penalty on Customs broker - HELD THAT:- After going through the provision of Section 46 of the Customs Act, it is clear that under Section 46 of the Customs Act, duty has been imposed upon the importer of the goods and not upon the Custom Broker or Customs House Agent, therefore, no penalty can be imposed upon the appellant Mahendra N. Thacker who worked as Custom Broker for the violation of Section 46 by the importer. From the perusal of the provision of Section 117, it is clear that where there is no express penalty elsewhere in the Act then penalty may be imposed under Section 117 for contravention of any provisions of this Act. In the impugned order, the Adjudicating Authority has not made it clear that the appellant Mahendra N. Thacker violated which provisions of Customs Act which he was duty bound to follow. Therefore, penalty cannot be imposed upon the appellant arbitrarily without clearly defining the violation of any specific provision of the Customs Act. As far as the violation of Customs House Agents Licensing Regulations, 2004 is concerned, no penalty can be imposed upon the Customs Broker or CHA and only his licence may be suspended or may be cancelled under Regulation 20 - the learned Adjudicating Authority has imposed penalty upon the appellant M/s. Mahendra N Thacker arbitrarily without proper justification and the order imposing penalty upon the appellant Mahendra N Thacker is liable to be set aside. Penalty on Shri Rajiv Sahni - HELD THAT:- There is sufficient evidence on the record which prove beyond doubt that Shri Rajiv Sahni, Business Development Associate (BDA) was on the lookout for potential bulk buyers of the HSD imported by M/s. Essar Oil Limited. He was well aware that projects funded by World Bank are eligible to obtain Customs Duty free HSD for use in the project. Contractors doing the project work aided by the World Bank approached him for help and procurement of duty free HSD as they were in possession of Project Authority Certificate. Shri Rajiv Sahni helped them to register themselves with M/s. Essar Oil Limited to procure imported Customs Duty free HSD and to complete all the necessary formalities - from the material available on the record, it is clear that Shri Rajiv Sahni played a key role in the diversion of the imported HSD cleared under PAC in collusion with the importer and the PAC holder M/s. Agrawal (J.V.) and thus aided and abetted in the diversion for 460 KL HSD valued at Rs. 89,13,340/- and having a duty liability of Rs. 23,08,357/-. Therefore, the order of the Principal Commissioner imposing penalty of Rs. 2,00,000/- on Shri Rajiv Sahni Business Development Associate of M/s. Essar Oil Limited is sustainable and is liable to be confirmed. Conclusion - i) Under Section 46 of the Customs Act, duty has been imposed upon the importer of the goods and not upon the Custom Broker or Customs House Agent, therefore, no penalty can be imposed upon the appellant Mahendra N. Thacker who worked as Custom Broker for the violation of Section 46 by the importer. ii) Shri Rajiv Sahni played a key role in the diversion of imported HSD cleared under PAC in collusion with the importer and the PAC holder M/s. Agrawal (J.V.) and thus aided and abetted the diversion for 460 KL HSD valued at Rs. 89,13,340/- and having a duty liability of Rs. 23,08,357/-. Appeal dismissed.

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• 2025 (4) TMI 1604
  Revocation of customs broker licence - forfeiture of entire amount of security deposit - levy of penalty - misuse of the export promotion schemes and other fraudulent activities - HELD THAT:- Regulation 10(n) does not place an obligation on the Customs Broker to oversee and ensure the correctness of the actions by Government officers. Therefore, the verification of documents part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as the Customs Broker satisfies itself that the IEC and the GSTIN were, indeed issued by the concerned officers. This can be done through online verification, comparing with the original documents, etc. and does not require an investigation into the documents by the Customs Broker. Therefore, the appellant was correct in verifying the GSTIN issued by the department on the GST portal. The presumption is that a certificate or registration issued by an officer or purported to be issued by an officer is correctly issued. Section 79 of the Evidence Act, 1872 requires even Courts to presume that every certificate which is purported to be issued by the Government officer to be genuine. The onus on the Customs Broker cannot, therefore, extend to verifying that the officers had correctly issued the certificate or registration. Of course, if the Customs Broker comes to know that its client has obtained these certificates through fraud or misrepresentation, nothing prevents it from bringing such details to the notice of Customs officers for their consideration and action as they deem fit. However, the Customs Broker cannot sit in judgment over the certificate or registration issued by a Government officer so long as it is valid. In this case, there is no doubt or evidence that the IEC, the GSTIN and other documents were issued by the officers. So, there is no violation as far as the documents are concerned. The Regulation, in fact, gives to the Customs Broker the option of verifying using documents, data or information. If there are authentic, independent and reliable documents or data or information to show that the client is functioning at the declared address, this part of the obligation of the Customs Broker is fulfilled - the GSTIN issued by the officers of CBIC itself shows the address of the client and the authenticity of the GSTIN is not in doubt. In fact, the entire verification report is based on the GSTIN. Further, IEC issued by the DGFT also shows the address. There is nothing on record to show that either of these documents were fake or forged. Therefore, they are authentic and reliable and we have no reason to believe that the officers who issued them were not independent and neither has the Customs Broker any reason to believe that they were not independent. The responsibility of the Customs Broker under Regulation 10(n) does not include keeping a continuous surveillance on the client to ensure that he continues to operate from that address and has not changed his operations. Therefore, once verification of the address is complete, if the client moves to a new premises and does not inform the authorities or does not get his documents amended, such act or omission of the client cannot be held against the Customs Broker. Conclusion - The appellant Customs Broker did not fail in discharging its responsibilities under Regulation 10(n) of CBLR 2018. The impugned order is not correct in concluding that the Customs Broker has violated Regulation 10(n) of CBLR 2018 because the exporter was found to not exist during subsequent verification by the officers. The impugned order dated 05.04.2021 cannot be sustained and, therefore, is set aside - Appeal allowed.

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• 2025 (4) TMI 1580
  Anti-dumping investigation - Condonation of Delay in filing of response - technical delay of 19 minutes in submission - Imports of Plastic Processing Machines originating or exported from China and Taiwan - HELD THAT:- The Court has seen the email dated 4th November, 2024. Considering that in such matters, the investigation has to be comprehensive and the Petitioners have already been permitted to participate in the proceedings. A few minutes delay in the exporters questionnaire response cannot oust the Petitioners response from being heard and participating fully in the proceedings. In terms of the facts of the present case, the response to the questionnaire is directed to be taken on record. The delay, if any, in filing the same is condoned. The enquiry shall now proceed in accordance with law. Petition disposed off.

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• FEMA

• 2025 (4) TMI 1603
  Hawala transaction - note book was recovered during the course of search containing the details of the business of hawala on day-to-day basis - scope of retracted statement - HELD THAT:- A note book was recovered during the course of search. It was containing the details of the business of hawala on day-to-day basis. It was then explained for the short figure mentioned therein. That was not the loose sheet but note book which otherwise said to be containing business account of the appellant, therefore the respondent rightly relied on the note-book containing the details of the accounts showing hawala transaction. The details mentioned therein was not pertaining to Automobile business otherwise showcased by the appellant. Apart from the aforesaid, in the statement of Shri Mahendra Jain, he referred to the business of Shri Ramesh B. Doshi which was not only of automobile but even of hawala transactions. The said statement was not retracted, thus, even if the appellant retracted from his statement and sent a telegram, as reproduced above, does not show complete retraction but acceptance of certain material by the appellant. The note-book said to be containing the accounts of the appellant, as stated by the Counsel for the appellant and otherwise the statement of Shri Mahendra Jain has corroborated the note-book recovered from the appellant, Shri Ramesh B. Doshi. Thus, it is not that there was no material other than the retracted statement to find the case of contravention under section 3(a), (b) and (c) of the Act of 1999. Appellant has referred several judgments where it has been held that retracted statement may not be relied and we agree with the proposition therefor. It is not required to refer or cite those judgments but would be referring the judgment in the case of Vinod Solanki [ 2008 (12) TMI 31 - SUPREME COURT ] where it was held that retracted statement can also be relied, if it is supported or corroborated by other evidence. No illegality or error in the impugned order passed by the Special Director to rely on the material to draw his conclusion. Reliance on the loose sheets - In the instant case we have recorded finding that apart from loose-sheets, note-book was recovered said to be an account book of the appellant containing the business transaction but the figures mentioned therein and explained by the appellant was showing hawala transactions and accordingly ignoring the loose-sheet even the note-book was corroborating the evidence to indicate that appellant Shri Ramesh B. Doshi was involved in hawala transactions. We are accordingly not required to cite other judgments in reference to loose-sheets and as to whether reliance on it can be placed because we have not placed reliance on the loose-sheets but on the note-book which is admitted by the appellant though showing it to be accounts book. Therefore, we are not citing the judgments for that reason. Denial of cross-examination - Cross-examination is permitted when the statement of witness arerecorded before the Court or the Authority. It may be in the shape of affidavit but not recorded during the course of the inquiry or investigation. This is as per the provisions of the Evidence Act and in the instant case, no statement was recorded before the Adjudicating Authority so as to permit cross-examination. It is apart from the fact that in the quasi-judicial proceedings, the cross-examination cannot be claimed as a course. It may further be added that in our order, we have not relied on the statement of Shri Abhilash Vasa and Shri AftabAlam, though, if the reliance is placed in reference to their version, a case is further made out against the appellant. Thus, denial of cross-examination in the facts of this case cannot be held to be illegal and accordingly we do not find any error in the impugned order to hold contravention of Section 3(a), (b) and (c) of the Act of 1999. Penalty imposed - appellant Shri Ramesh B. Doshi was getting commission to facilitate transaction and it was not that his own business other than to receive the commission and appellant was receiving commission of 10 to 15 paise per dollar - HELD THAT:- We are of the opinion that the total penalty imposed upon the appellant, Sh. Ramesh B. Doshi needs to be reduced and accordingly we cause interference in the penalty amount which is substituted by the penalty of Rs.40,00,000/- for contravention of section 3(c) and for Section (a) it is imposed for Rs.60,00,000/- and for section 3(b) it is made to Rs.40,00,000/- on the appellant- Shri Ramesh B. Doshi. For Shri Mahendra Jain is concerned, he was the employee of Shri Ramesh B. Doshi and was getting salary of Rs.15000/-. The respondent has not placed on record any document to show it to be his business and directly involved in hawala transactions but was working as an employee of Shri Ramesh B. Doshi and thereby their remain no justification to impose heavy penalty on him and accordingly it is substituted it to Rs. 90,000/- for Section 3(c); Rs.1,00,000/- for Section 3(a); and Rs. 90,000/- for Section 3(b) of the Act of 1999.

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• PMLA

• 2025 (4) TMI 1602
  Money Laundering - proceeds of crime - reasons to believe - arrest of the petitioner complied with the mandatory provisions of Section 19(1) of the Prevention of Money Laundering Act, 2002 (PMLA) or not - twin conditions under Section 45 of the PMLA have been fulfilled to justify bail or not - HELD THAT:- The Hon ble Apex Court in the said judgment has further laid down that the twin conditions as to fulfil the requirement of Section 45 of the Act, 2002 before granting the benefit of bail is to be adhered to which has been dealt with by the Hon ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors.[ 2022 (7) TMI 1316 - SUPREME COURT (LB) ] wherein it has been observed that the accused is not guilty of the offence and is not likely to commit any offence while on bail - In the judgment rendered by the Hon ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. as under paragraph-284, it has been held that the Authority under the 2002 Act, is to prosecute a person for offence of money-laundering only if it has reason to believe, which is required to be recorded in writing that the person is in possession of proceeds of crime . Only if that belief is further supported by tangible and credible evidence indicative of involvement of the person concerned in any process or activity connected with the proceeds of crime, action under the Act can be taken forward for attachment and confiscation of proceeds of crime and until vesting thereof in the Central Government, such process initiated would be a standalone process. Issue of legality of Arrest - HELD THAT:- It is evident from the record that the Petitioner was informed about the ground of arrest immediately by the Enforcement Directorate with his acknowledgement. Further, it is also an admitted position that within 24 hours of the arrest, the arrestee was supplied with the remand application which virtually contains all the grounds of arrest and therefore the legal requirement of informing the grounds of arrested as soon as may be also stood fulfilled both as per the statutory requirement under S. 19 (1) of the PMLA as well as the constitutional mandate under Article 22 (1) of the Constitution of India. The Hon ble Supreme Court in the case of Pankaj Bansal [ 2023 (10) TMI 175 - SUPREME COURT ] had made the requirement of furnishing grounds of arrest in writing, only prospective, by using the word henceforth . The same has also been clarified by the Hon ble Supreme Court in Ram Kishor Arora (supra) at Para 23. Hence, the law as it prevailed on the date of arrest was complied with. On the basis of discussion made hereinabove it is evident that the remand application was provided to the petitioner s counsel and there is no objection raised during the time of remand. Further, the law as it prevailed on the date of arrest was complied with by the Respondent. However, it is also an admitted position that within 24 hours of the arrest, the arrestee was supplied with the remand application which virtually contains all the grounds of arrest. Issue of culpability of the present petitioner - HELD THAT:- It is manifestly apparent from the aforesaid fact that present petitioner has close linkup with the said company i.e. M/s Jagatbandhu Tea Estates Pvt. Ltd. However, the present petitioner is the director of the said company or not, is the matter of trial wherein both the parties are free to lead evidence in this regard - It needs to refer herein that in the case of Rohit Tandon v. Directorate of Enforcement, [ 2017 (11) TMI 779 - SUPREME COURT ], the Hon ble Supreme Court observed that the provisions of Section 24 of the PMLA provide that unless the contrary is proved, the authority or the Court shall presume that proceeds of crime are involved in money laundering and the burden to prove that the proceeds of crime are not involved, lies on the petitioner. The ground of custody of 22 months of the petitioner has been taken. There is no dispute that the question of personal liberty is to be taken care of in order to follow the mandate of Article 21 of the Constitution of India but equally it is not in dispute that in a case of like nature, in which the petitioner has been involved, as per the allegation, balance is to be maintained in order to have the message to the society that the thing which has been done by the petitioner, as has been alleged, cannot be considered merely on the ground of long custody rather the nature of allegation is required to be seen. Conclusion - i) The reason for giving explanation under Section 2(1)(u) is by way of clarification that proceeds of crime include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. ii) The conditions specified under Section 45 of PMLA are mandatory and need to be complied with even in respect of an application for bail made under Section 439 CrPC. The instant application stands dismissed.

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• 2025 (4) TMI 1601
  Money Laundering - scheduled/predicate offence - reasons to believe - legality of search and seizure proceedings conducted under Section 17 of Prevention of Money Laundering Act, 2002 - Whether the preconditions set out in Section 17 has been complied with or not? - HELD THAT:- This Court finds it unfortunate that women officers and employees are used as shields to prevent investigations from proceeding. Courts have time and again stressed on gender equality in public service. Women are far more empowered and are more proactive nowadays especially in public service. We see women progressing across different fields. It is the duty of public officials to aid and assist in investigations and it is also the responsibility of both the investigation agencies and State Government officials in-charge to protect and ensure the safety of women. In spite of that, if the woman as an individual feels that her right has been infringed she is fully within her rights to approach the competent court of law. But let not a government try to discourage a woman from moving towards the path of empowerment - No allegations of violation of fundamental rights or coercion was raised by them in those letters to Directorate of Enforcement. Hence, the Directorate of Enforcement contended that this entire petition filed on behalf of TASMAC company is an abuse of process of law. This Court feels that there is a strong disconnection between the averments and the relief sought for in the writ petition. It is imperative that a broader view of the issue needs to be taken at times, where the rights of people at large will be affected. It is without doubt that the prima facie allegations and complaints against the Tamil Nadu State Marketing Corporation (TASMAC) are grave in nature. It definitely warrants deeper investigation. But these present writ petitions are filed challenging the very initial step of search conducted based on certain information on record - How can a State Government would file a writ petition stating that an Investigating Agency cannot enter and conduct a search in a Government Company, that too when allegations are so serious in nature. In fact, it is the Tamil Nadu Directorate of Vigilance and Anti-Corruption, which has registered multiple First Information Reports (F.I.Rs) regarding malpractices of corruption ongoing in TASMAC. A raid or a search by an investigating agency must be discreetly planned and executed to ensure that the offenders are caught off guard. In the present case, it is argued that the petitioner employees were asked to stay and that their mobile phones were seized and hence they were unable to contact their family. But that is how normally a surprise check is conducted - How can such a petition even be maintainable. If there are charges of harassment, how can one file a petition to state that a search must be declared illegal and that in essence prohibits any future searches as well. This is highly alarming and such petitions ought to be dismissed at threshold. It raises pertinent question as to the intention behind filing such writ petitions, whether is it a strategy to prolong and protract the investigation is a legitimate query that arises. The arguments of officers being detained for hours during search and that the employees being sent home at odd hours when a search is in progress is inadequate and highly disproportional, when compared to the rights of millions of people of our Great Nation. The search conducted is for the interest and benefit of this Nation. Can a few inconveniences which is product of procedure established by law as embedded in Article 21 be equated against the economic rights of the people of this country. It is the mandate of the Constitution to secure to all its citizens Economic Justice. And legislations such as PMLA serve this object by ensuring that offences which jeopardise our National economic growth is dealt with strictly in accordance with law. Conclusion - The judicial review powers of the Courts is limited only to the extent as to whether the reasons to believe is recorded in writing before conducting search. The scope of Judicial review is limited to this alone and cannot go beyond or examine the subjective satisfaction of the investigating officer. Petition dismissed. The Directorate of Enforcement is at liberty to proceed with all further actions under PMLA - petition dismissed.

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• Service Tax

• 2025 (4) TMI 1600
  Classification of service - Business Auxiliary Service (BAS) or Business Support Service (BSS)? - export of services under the Export of Service Rules, 2005 - extended period of limitation - HELD THAT:- In the instant case, series of show cause notices has been issued on the basis of audit; it is the contention of the appellant that as held by the Hon ble Apex Court in the case of Nizam Sugar Factory [ 2006 (4) TMI 127 - SUPREME COURT] , extended period cannot be invoked in the subsequent show cause notice. In the instant case, show cause notice dated 20.10.2009 (covering the period April 2004 to March 2009) was issued to the appellant on the basis of audit conducted. Subsequently, four different show cause notices were issued to the appellant covering various periods; the present show cause notice dated 15.10.2013, covering the periods 2008-09 and 2009-10, was issued demanding service tax of Rs.18,89,406/- and denying credit of Rs.2,45,308/-. The appellant cannot be penalized for the reason that this issue was not noticed or raised in the show cause notice which was already issued to the appellant. If the Department did not choose to ask for all the details in the audit and chooses not to cover the same in the first show cause notice, this cannot be the reason for invoking extended period in the subsequent show cause notices, more so, covering part of the period already covered. Moreover, in a number of cases, it was held by the various benches of the Tribunal that extended period cannot be invoked when the show cause notice is issued on the basis of the audit - When extended period cannot be invoked in the first show cause notice dated 20.10.2009, there is no way it can be invoked in the subsequent show cause notice dated 15.10.2013. Conclusion - i) The services rendered by the appellant are Business Support Services and not Business Auxiliary Services. ii) The services do not qualify as export of services under the Export of Service Rules, 2005. iii) The demand under the 6th SCN dated 15.10.2013 is barred by limitation; extended period of limitation cannot be invoked. The appeal survives on limitation and therefore, the impugned order is set aside - Appeal allowed.

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• 2025 (4) TMI 1599
  Short payment of service tax - entire SCN is based on the difference between the 26AS/ITR data and the gross value reflected by the appellant for their ST-3 returns - HELD THAT:- There is no other evidence on record to suggest that any cogent ground was taken by the department to come to the conclusion as regards the nature of the service which was being provided or whether the service tax was liable to be paid on said service. However, despite this, the appellant on their own have come forward and they have already paid the service tax due along with interest thereon - the show cause notice was issued without invoking proviso to Section 73(1) and OIO has also been confirmed under Section 73(1) and proviso to section 73 (1) has not been invoked while confirming the demand. There are no substantive or cogent ground for invoking the provisions under Section 78 and there does not appear to be any willful withholding of information or misstatement by them, therefore, on holistic appreciation of the facts of the case and evidence relied upon by the Department, the penalty under Section 78 is not invokable in this case and therefore upholding of imposition of penalty of Rs. 72,500 is set aside. Conclusion - The entire show cause notice is based on the difference between the 26AS/ITR data and the gross value reflected by the appellant for their ST-3 returns. The appeal is partly allowed.

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• 2025 (4) TMI 1598
  Absolute owner of both the gas/oxygen plants - levy of service tax on lease rentals received under the taxable category of Renting of immovable property service - setting up of gas/oxygen plants by utilizing the equipment supplied by both the appellants as well as ISPAT would be considered as immovable property , in order to fall within the scope and ambit of Renting of Immovable property or not - scope of the phrase immovable property as per the Explanation 1 appended to Section 65 (105) (zzzz) of the Act of 1994 - HELD THAT:- Various individual equipment of the plant are erected, installed and commissioned within the premises of ISPAT by way of fastening to the foundation by the help of nuts/bolts and through installation of the base concrete support, which can be dismantled at any time, without causing much damage to the original equipment. Since, those equipment were not permanently attached to the earth, the same seized to be considered as immovable property and as such, cannot fall under the scope of the definition provided under 65 (105) (zzzz) of the Act of 1994. An identical issue about immovability of the plant came up for consideration before the Hon ble Supreme Court in the case of Solid Correct Engineering Ors. [ 2010 (4) TMI 15 - SUPREME COURT] . The issue arose in that case for consideration was, whether erection of plant at site would be considered as immovable or movable . By referring to the provisions of Section 3(26) and 3(36) of the General Clauses Act, 1897, the Hon ble Supreme Court had prescribed the test, through which it can be ascertained, whether the plant is immovable or movable . The ratio of the above judgement is squarely applicable to the facts of the present case. In the present case, the fact that the gas/oxygen plants in question, were not fixed permanently to the earth and are embedded to the earth only for the purpose of providing stability and to keep their operation vibration free, is evident from the affidavits sworn in by the officers of the appellant s company, certificate of the chartered engineer and shifting of the same plants in case of other buyers to another place(s) upon completion of the contract period. Further, it is also an admitted fact on record that the appellants have been paying VAT on the lease rental charges since 2004-2005, before coming into force of the entry of taxable service of renting of immovable property . Since, payment of VAT was accepted by the concerned statutory authorities as due discharge of the liabilities, it would not be prudent on the part of another authority to claim the tax amount under different head, considering the transaction as service . In Section 65(90a) ibid, the phrase immovable property has not been considered to explain, as to which of the properties would fall within its ambit for consideration as the service, under the taxable entry of renting of immovable property . Similarly, in the sub-clause (zzzz) in clause (105) of Section 65 of the Act of 1994, though the activity of renting of immovable property is finding place, but the constituents of the immovable property have not been spelt out therein. However, the Explanation 1 was appended to such sub-clause (zzzz), providing that various properties cataloged thereunder should be considered as immovable property - Since, the sub-clause (zzzz) has not provided as to which of the properties would be contemplated as immovable , such vacuum was remedied by way of providing the various category of properties for consideration as immovable in nature in the said Explanation 1. In view of the fact that the said Explanation clause has considered only a building , land , facilities relating thereto , in our considered view, no other property can be included therein for consideration as immovable property . The legislative intent is manifest that the scope of the main section for understanding the meaning of immovable property , should only be confined to those prescribed properties, which are itemized in the said explanation clause. In other words, any other property(ies) not conforming to the prescribed properties should fall outside the scope and purview of consideration as immovable for the purpose of the Act of 1994. Therefore, the type of properties mentioned in the Explanation - 1 were intended to be exhaustive and not extendable to any other properties, which are not appearing therein. The phrase excisable goods has been defined in Section 2(d) of the Central Excise Act, 1944 to mean, goods specified in the Fourth Schedule as being subjected to a duty of excise and includes salt . An Explanation was added to the said definition clause, providing that for the purposes of this clause, goods includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable . Conclusion - i) The appellants are not absolute owners of the entire plant facilities, as the equipment supplied by ISPAT and ownership of land and civil structures vests with ISPAT. ii) The plants erected by the appellants are not immovable property, since they are not permanently fixed to the earth but only fastened to provide operational stability and can be dismantled and relocated without substantial damage. iii) The phrase immovable property as per the service tax statute is limited to buildings, land, and common areas/facilities and does not include plant and machinery. iv) The lease rentals received by the appellants do not attract service tax under the category of Renting of immovable property service. The impugned orders are set aside and the appeals are allowed in favour of the appellants.

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• Central Excise

• 2025 (4) TMI 1597
  Validity of duty demand based on re-classification of the products Benzene and Toluene from chapter 29 to chapter 27 - re-classification is based on test reports dated 29.01.1991 on samples drawn in October, 1990 of which only a gist was provided to the appellant by the respondent vide letter dated 29.01.1991 - test reports can legally form the basis for re-classification of the above products manufactured and cleared during 1991 and 1992 - treating the assessments provisional for the two products Benzene and Toluene for the months of January and February, 1993 in the absence of any order passed under Rule 9B of the Central Excise Rules, 1944 and without executing any B-13 bond. Whether a duty demand based on re-classification of the products Benzene and Toluene from chapter 29 to chapter 27 is sustainable when such re-classification is based on test reports dated 29.01.1991 on samples drawn in October, 1990 of which only a gist was provided to the appellant by the respondent vide letter dated 29.01.1991? - HELD THAT:- Sub-rule (1) of Rule 56 says that the manufacturer is under an obligation to permit any officer to take samples of any product manufactured in his factory. Sub-rule (2) says that such an officer shall conduct a test from the samples so taken and communicate the result of such test to the manufacturer. Sub-rule (3) is not relevant for the present discourse. However, sub-rule (4) is relevant. According to sub-rule (4) where the manufacturer is aggrieved by the result of the test, he may within 90 days of the date on which the result of the test is received by him, request the Assistant Commissioner that the samples be re-tested. If at all the department wanted to inquire into the correctness of the classification submitted by the appellant, it could have taken samples of the two products prior to the approval at the stage of Rule 173B itself. Approval of classification list under Rule 173B is not an empty formality. The proper officer has to apply his mind and if he considers it necessary, he may conduct further inquiry to ascertain the correctness of classification. Therefore, such belated sampling and still further belated test reports cast a shadow of doubt about the entire procedure adopted by the respondent. This is further compounded by non-furnishing of the test reports to the appellant - the orders re-classifying the products Benzene and Toluene under chapter sub-heading 2707.10 and 2707.20 respectively and levying consequential differential duty demand cannot be sustained in law. Impugned order of CESTAT justifying such re-classification cannot also be sustained. Whether such test reports can legally form the basis for re-classification of the above products manufactured and cleared during 1991 and 1992? - HELD THAT:- Rule 9B is the relevant provision dealing with provisional assessment. As per sub-rule (1), where the assessee is unable to determine the value of excisable goods or the correct classification of the goods, he may request the proper officer in writing giving reasons for provisional assessment to duty. The proper officer may direct after making such inquiry as may be considered necessary that the duty leviable on such goods shall be assessed provisionally at such rate or value as may be indicated by him. Such provisional assessment is subject to the assessee executing a bond in proper form binding the assessee for payment of the differential amount of duty as provisionally assessed and as may be finally assessed - If the proper officer is satisfied that the self-assessment made by the assessee is not in order, he may direct the assessee to resort to provisional assessment. In any event, for an assessment to be provisional in terms of Rule 9B, an order is required to be passed. This Court in Coastal Gases and Chemicals Pvt. Ltd. [ 1977 (4) TMI 41 - SUPREME COURT ] and in Hindustan National Glass Industries Ltd. [ 2005 (3) TMI 123 - SUPREME COURT ] held that in order to establish that the clearances were of provisional basis, an order under Rule 9B and payment of duty on provisional basis are essential. There is no order of the proper officer under Rule 9B directing that assessments for the months of January and February, 1993 for the two products Benzene and Toluene were provisional. Neither any bond in proper format was directed nor executed by the appellant. Mere endorsement by the concerned Superintendent on two RT-12 returns cannot make an assessment provisional. On the contrary, the department had issued a number of show cause notices covering the period from September, 1990 to December, 1992. Appellant had contested the show cause notices. All the show cause notices were adjudicated upon by the Assistant Commissioner. It is implausible that assessments which were regular till December, 1992 could become provisional from January, 1993. CESTAT has rightly held that assessments for the period from September, 1990 to December, 1992 were regular but inexplicably held that assessments for the months of January and February, 1993 qua the products Benzene and Toluene were provisional. Such findings of CESTAT cannot be sustained. Conclusion - The re-classification of Benzene and Toluene based on undisclosed test reports was invalid and the consequent duty demand was unsustainable. The assessments for January and February 1993 were not provisional due to non-compliance with Rule 9B requirements, thereby invalidating the department s extended duty demand for that period. Appeal allowed.

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• 2025 (4) TMI 1596
  Rejection of rebate claim - entitlement to claim rebate of excise duty paid on exported goods, while simultaneously claiming duty drawback on inputs under the Customs Central Excise Duties and Service Tax Drawback Rules, 1995 - double benefit - HELD THAT:- A double benefit would arise in a case where, for a single incidence, relief is availed more than once i.e. if relief is claimed more than once on the output side or if relief is claimed more than once on the input side. If relief is claimed only once on the output side and once on the input side then the same would not amount to a double benefit to the manufacturer/exporter. The benefits or reliefs available to the manufacturer/exporter on the input side are (i) rebate of input excise duty paid by the manufacturer/exporter to its vendors on the material purchased by it and used in the manufacture of exported goods in terms of Rule 18 of the Central Excise Rules, 2002 read with Notification No.19/2004; or (ii) drawback i.e. rebate of duty or tax chargeable on any imported material or excisable material or input service used in the manufacture of exported goods under the Drawback Rules of 1995. Rule 18 of the Central Excise Rules, 2002. A manufacturer/exporter is eligible to avail benefits on both the input side as well as the output side on exported goods. Doing so is not a double benefit. This is because the manufacturer/exporter is claiming reliefs against two separate tax incidences. On the input side, he is claiming relief of the taxes embedded in the inputs purchased by him for use in manufacture of exported goods. On the output side, he is claiming relief of output duty paid by him on the activity of manufacturing the exported goods. A double benefit would arise when a manufacturer/exporter claims multiple input side benefits or where a manufacturer/exporter claims multiple output side benefits - In the present case, the Petitioner has claimed i) output rebate under Rule 18 of the Central Excise Rules of the Excise Duty paid by it on the activity of manufacturing the exported goods and ii) on the input side, drawback at the All Industry Rate of 16% under the category of Cenvat facility not availed . The Petitioner correctly availed on the input side drawback at the All Industry Rate of 16% under the category of Cenvat facility not available . Hence, the Petitioner has correctly availed one input side benefit and one output side benefit. In the case of Spentex Industries Ltd. [ 2015 (10) TMI 774 - SUPREME COURT] , the assessee- manufacturer used duty paid inputs for manufacture of goods which were finally exported after payment of Central Excise Duty. The rebate claims filed in respect of duty paid on inputs and on finished goods were rejected by the Department. This Court had taken a view that out of the two excise duties, Rule 18 of the Central Excise Rules, 2002 permits rebate only qua one of them and not on both the duties. Overruling the said decision of this Court, the Hon ble Supreme Court was of the view that exporters are entitled to both input side and output side rebate under Rule 18 and not just one kind of rebate - in light of the decision of the Hon ble Supreme Court in Spentex Industries Ltd., there is no double benefit availed by the Petitioner and the Petitioner has correctly availed one benefit on the input side and one benefit on the output side. The impugned order has completely conflated input and output side benefits. Drawback is an input side benefit granting to the Petitioner rebate of the duties/taxes embedded in the inputs purchased by it. Further, the Petitioner has claimed only output rebate under Rule 18 of the Central Excise Rules, 2002 and has not claimed any input side rebate under the said Rule 18. There is absolutely no bar in law nor is there a double benefit for the Petitioner to claim drawback on inputs and output rebate of the excise duty paid on the exported goods. Conclusion - The Petitioner is lawfully entitled to claim rebate on the excise duty paid on exported goods under Rule 18 of the Central Excise Rules, 2002, read with Notification No. 19/2004, while also claiming duty drawback on inputs under the Drawback Rules, 1995, without it constituting double benefit. Petition allowed.

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• 2025 (4) TMI 1595
  Entitlement to CENVAT credit by a manufacturing unit on inputs, capital goods, and input services that were physically received and used by a separate, though related, manufacturing unit - HELD THAT:- There is no denial to the fact that both the entities though are run by same management but both being separately registered under Excise Laws. However, it is also not disputed that the Karwahi Mines got registered after the coal was made excisable w.e.f 01.03.2011. This observation coupled with the admitted fact the Karwahi Mines are engaged in manufacture of coal is sufficient to hold that there was no need for Karwahi Mines to take Central Excise Registration prior 01.03.2011. Coming to the demand for the period 01.3.2011 to 30.9.2011 of Rs. 46,21,582/ -, the said demand has been confirmed by the impunged order on the ground that w.e.f. 01.3.2011, M/s. Sarda Energy and Minerals Ltd. and Karwahi mines, Tamnar, Raigarh became a separately registered manufacturers of respective excisable goods and cenvat credit of capital goods, input and input services utilized at mines was admissible to Karwahi Mines Tamnar only and not to the respondent post the final product of Karwahi Mines/ Coal became excisable from 01.03.2011 - This perusal is sufficient to hold that the present appeal filed by the department has become infructuous and the entire demand as was proposed vide impugned Show Cause Notice including the partial demand as has been confirmed vide the impugned Order-in- Original stands already set aside. Conclusion - The demand relating to the period before 01.03.2011 was rightly dropped as the mines were captive and not separately registered. The appeal filed by the department is dismissed, as infructuous.

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• 2025 (4) TMI 1594
  CENVAT Credit - inputs or capital goods - M.S. Plates, M.S. Channels, HR Coils, Chequered Plates, Linear Slide Rail, HR Sheets, RS Joists, MS Beams and MS Square Mesh which have been used as components and accessories of the capital goods which were used for manufacturing the final products - HELD THAT:- M.S. Plates, M.S. Channels, HR Coils, Chequered Plates, Linear Slide Rail, HR Sheets, RS Joists, MS Beems and MS Square Mesh are classified under Chapter 72/73 of Central Excise Tariff Act 1985 which are not covered under definition of capital goods under clause (i) of Rule 2(a)(A) of the Cenvat Credit Rules 2004. As defined above only goods falling under Chapters 82, 84, 85 and 90 are treated as capital goods. It is also important that these goods are neither components, spares nor accessories to the capital goods as required by Rules 2(a)(A)(iii) of Cenvat Credit Rules, 2004. Hon ble Allahabad High Court, in the case of Upper Ganges Sugar Industries Ltd., Vs CCE [ 2013 (8) TMI 501 - ALLAHABAD HIGH COURT ] held that Cenvat Credit on HR/NS/GC sheers plates/angles/channels/supporting structure etc. cannot be allowed as said goods are used for fabrication and construction, and are not covered by definition of Capital Goods. The High Court also held that component is complete goods in itself and ready to use without any further processing . The Hon ble Supreme Court in the case of Saraswati Sugar Mills Vs CCE, Delhi [ 2011 (8) TMI 4 - SUPREME COURT ] has disallowed Cenvat credit on MS Plates, MS Channels, HR Coils etc., which are used in fabricating support structures for installation of equipment s such as vacuum pan, crystallizers, sugar grader, elevator etc. The said goods viz M.S. Plates, M.S. Channels, HR Coils, Chequered Plates, Linear Slide Rail, HR Sheets, RS Joists, MS Beams and MS Square Mesh are not inputs even before amendment in Explanation 2 of Rule 2(k). Since amendment in explanation is only explanatory/clarificatory. Learned AR alternatively argued that the Appellant has claimed Cenvat Credit only during November 2009 that is after 07.07.2009. The Department may know about the Cenvat Credit availed only after availment and reflection in statutory returns. The Department may taken action only after Cenvat Credit availed and not before - The Appellant have not shown fabricating of any capital goods in statutory ER-1 Returns to be eligible for availing Cenvat Credit. In this regard, Hon ble High Court of Allahabad in the case of Balaji Hindustan Ltd. [ 2013 (9) TMI 24 - ALLAHABAD HIGH COURT ], held that in absence of any evidence in ER-1 Returns and intimation to the Department, Cenvat Credit on goods in subject could not be availed. Conclusion - The appellant is not entitled to Cenvat Credit on the disputed goods as they do not qualify as capital goods or inputs under the CCR. There is no merit in the appeal and therefore liable to be dismissed - appeal dismissed.

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• 2025 (4) TMI 1578
  Refund claim - amount paid under protest is in the nature of revenue deposit and hence, it will not be covered by section 11B of CEA or not - principles of unjust enricment - HELD THAT:- The amount of deposit made under protest, except to the extent of amount which has been appropriated towards requirement of making pre-deposit under section 35F, would be in the nature of revenue deposit and therefore, it will not be covered by the provisions of section 11B of the Act, as held by Commissioner (Appeals) in his impugned order while upholding the order of the RSA. The reliance placed by the Revenue on the judgment of Hon ble Supreme Court in the case of Union of India Vs Willowood Chemicals Pvt Ltd [ 2022 (4) TMI 980 - SUPREME COURT] is also misplaced inasmuch as this judgment is in respect of interest on delayed refund under IGST Act, whereas, in the present case, the issue is under section 11B of Central Excise Act. Therefore, the facts are distinguished. The issue of unjust enrichment is not relevant in the factual matrix of the present case, as the same has not been even invoked by the RSA. Payment of interest - HELD THAT:- There is no specific provision for grant of refund of revenue deposit under the statute, however, following various judicial pronouncements, different forums including Tribunals have been awarding interest @ 6%, as well as in some cases @ 12%, following the judgment of Hon ble Supreme Court in the case of Sandvik Asia Ltd Vs CIT-I, Pune [ 2006 (1) TMI 55 - SUPREME COURT ] - Hon ble Supreme Court in the case of Poornima Advani Ors Vs Govt. of NCT Ors [ 2025 (3) TMI 60 - SUPREME COURT ], inter alia, held that interest was payable in relation to refund of certain amount which was retained by the Government. In the facts of the case, the interest is payable on the amount of Rs.1,28,95,173/-, w.e.f. from the dates of deposit made by the appellant. As far as the rate of interest is concerned, since there is no specific rate prescribed, the interest @ 6% is allowed, in view of the fact that similar rate of interest is also admissible for pre-deposit under section 35FF of the Act and the fact that the amount of pre-deposit has been appropriated from the same amount. Therefore, in the facts of the case, the rate of interest would be @ 6%. Moreover, it is seen that in the prayer itself, the total relief sought by the appellant is only Rs.59,98,517/- for refund under section 35FF, as redetermined, the differential amount will be payable. Therefore, the appellants will be entitled for refund, as discussed supra, subject to the cap of Rs.59,98,517/-. Conclusion - i) The amount paid under protest by the appellant during enquiry is a revenue deposit and not duty of excise within the meaning of section 11B of the Act. ii) The RSA erred in calculating pre-deposit amounts under section 35F and interest under section 35FF by using the deposited amount as the base instead of the total disputed duty amount. The correct calculation leads to higher interest entitlement. iii) Interest is payable on the refund of the revenue deposit portion at the rate of 6% per annum from the dates of deposit, based on equitable principles and judicial precedents, despite absence of explicit statutory provision. Appeal allowed.

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• 2025 (4) TMI 1577
  Time limitation - refund of excise duty paid on investment subsidy adjusted against VAT and CST returns - amount was paid under protest - applicability of principles of unjust enrichment - HELD THAT:- From the grounds of appeal taken by the Revenue before the Commissioner (Appeals) and the appeal decided thereon is basically on the point that since the amount shown as expenses is not towards amount as receivable , it cannot be established that the assessee have passed the test of unjust enrichment. The said issue has been considered by the Tribunal in the case of M/s. Chambal Fertilizers and Chemical Vs. Commissioner of Central Excise and CGST [ 2023 (2) TMI 10 - CESTAT NEW DELHI ] , wherein it was noticed that the refund claim was rejected on the ground that the amount deposited was accounted as expenses in the Profit and Loss Account of the appellant meaning thereby that the burden of duty has been passed. In the present case, the issue of excisability of subsidy amount was pending adjudication, and was finally concluded only by the order of the Tribunal dated 21.12.2018, where the period involved was from 2014 2015, however, the appellant had deposited further amount of central excise duty on VAT at their own risk and for the subsequent period which the present refund claim has been made. In this regard, it needs to be appreciated that the issue regarding the liability of duty on the subsidy amount was subjudice and the appellant to avoid any enhanced liability on account of non-payment of duty, had paid the said amount. The observations of the High Court of Delhi in the case of Team HR Services Pvt. Ltd. [ 2020 (6) TMI 342 - DELHI HIGH COURT ], where the Court observed that the undisputed position is that the deposit under protest was made against the anticipated liability and which liability though fructified by the respondent was set aside by the CESTAT and which order attained finality. Conclusion - The submissions of the learned counsel is that the disputed amount was paid under protest much after the clearance of the impugned goods and the said amount, therefore, is not covered by unjust enrichment. It is found from the decision of the Tribunal that once the supplies have already been made, any amount paid thereafter, as tax or deposit, the burden of such amount cannot be passed on to the assessee and, therefore, the test of unjust enrichment is not applicable. The impugned order is set aside - appeal allowed.

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• 2025 (4) TMI 1576
  Taxable service or negative listed services - activity undertaken by the appellant-sale and purchase of postal stamps through a franking machine - suppression of facts or not - invocation of extended period of limitation. Taxability of service - HELD THAT:- The franking machine is a stamp vending machine or stamping machine. These can be used subject to getting license from Postal Authorities. The license gets issued by the head of the Postal Division or the independent gazetted Postmaster of the office of Director Posts, Mumbai, Kolkata or New Delhi GPO or by officer commuting postal/SDS unit/SBPO within whose jurisdiction the machine is located. Resultantly, the certificate produced on record was the certificate produced by postal governmental authorities. Presumption of correctness is attached to the said document. There is nothing on record produced by the department to rebut the said presumption. The said document produced sufficiently proves that the activity of the appellant was trading of postal stamps and the said activity is coverd under negative list, sub clause (e) of Section 66D of Finance Act, 1994 - the service tax liability has wrongly been fasten upon the appellant. Extended period of limitation - HELD THAT:- Vide show cause notice of 25.04.2018, service tax for the period 2012-13 has been proposed. Apparently, the period falls beyond the period of five years, hence had the invocation of extended period would have been justified, the demand for the period beyond five years cannot sustain. Though the department has taken the plea that the period of filing ST-3 returns for Financial Year 2012-13 was extended by 31.10.2013 but this submission does not extend any benefit to the department for want of any apparent reason on record for invoking the period of five years for issuing the show cause notice. As already observed above that the appellant activity was not a taxable service, nonfiling of ST-3 returns and non-deposit of service tax is wrongly held an act of suppression - the show cause notice has wrongly invoked the extended period of limitation and has been vague being solely based on third party information. Conclusion - i) The activity of the appellant is trading of postal stamps and the said activity is covered under negative list, sub clause (e) of Section 66D of Finance Act, 1994. ii) The show cause notice has wrongly invoked the extended period of limitation and has been vague being solely based on third party information. Appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (4) TMI 1593
  Recovery of arrears of sales tax - priority of claims of secured creditor bank s equitable mortgage created in 1991 over the claims of the Commercial Taxes Department arising from sales tax arrears under the Tamil Nadu General Sales Tax Act, 1959 - interpretation and applicability of Section 26E of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) - HELD THAT:- The records make it clear that this arrangement has been on-going since December 1991. The impugned notices/communications have been issued only in December 2002 and hence, the arrangement between the bank and the defaulters was already in place for more than a decade when the impugned notices were received. On a careful perusal of the records of the Commercial tax Department as well as DRT/DRAT, it is concluded that the available documents establish the legitimacy of the factual position of the bank in these writ petitions. As far as the question of priority is concerned, Section 26E of the SARFAESI Act is a specific provision which states that notwithstanding anything contained in any other law for the time being in force and after the registration of security interest, it is the debts due to the secured creditor that shall have priority over all other debts and revenues, including those payable to the Central or State Government or local authority. Hence, as far as SARFAESI Act is concerned and with respect to the question of priority, it is Section 26E, which is a specialized section, that would apply. The provisions of Section 34 of the RDB Act are, by contrast, general in nature - in the juxtaposition of Section 26E of the SARFAESI Act with Section 34 of the RDB Act, it is Section 26E of the SARFAESI Act that will provide the necessary impetus for determining the priority of a charge of security interest in favour of the Financial Institution, as Section 34 of the RDB Act is, by comparison, only a general provision. It is very clear that it is the provisions of Section 26E of the SARFAESI Act and Section 34 of the RDB Act would prevail over the provisions of Section 24 of the TNGST Act. Additionally, this is a case where security interest has been created by the bank as early as in 1991, prior to the charge imposed by the Sales tax Department. Section 24 of the TNGST Act does not provide for priority by creation of a first charge in respect of the demands raised under that Act. Hence, Section 26E of the SARFAESI Act and Section 34 of RDB Act would prevail, in public interest. Conclusion - Section 26E of the SARFAESI Act and Section 34 of the RDB Act would prevail over the provisions of Section 24 of the TNGST Act, in public interest. The impugned notices and communications are quashed and both writ petitions are allowed.

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• Indian Laws

• 2025 (4) TMI 1592
  Nature and scope of administrative actions initiated in pursuance of the Master Directions vis- -vis criminal proceedings initiated, against the respondents - requirement of adherence to the principles of natural justice (audi alteram partem rule) - HELD THAT:- The principles of natural justice are not applicable at the stage of reporting a criminal offence. It has further been clarified that providing an opportunity of being heard prior to the commencement of a criminal action (i.e. registration of an FIR), would frustrate the very purpose of initiating a criminal proceeding, which is to meet the ends of justice. More specifically, para 98.1 of Rajesh Agarwal s case [ 2023 (3) TMI 1205 - SUPREME COURT ] explicitly states that no opportunity of being heard is required before an FIR is lodged or registered. In the cases being dealt with in the instant appeals, where the Appellant-CBI has not been added as a party-Respondent before the High Court despite being a necessary party, it is directed that they be impleaded before the High Court by way of a suo moto order being passed by this Court, since these matters are being remitted for fresh consideration. Conclusion - High Courts exceeded jurisdiction in quashing FIRs without proper challenge or without impleading investigating agencies. Appeal allowed.

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• 2025 (4) TMI 1591
  Quashing of FIR - Seeking investigation against alleged dishonest and fraudulent acts of Respondent No. 1/Company and its concerned Directors/Decision makers including Respondent No. 2 - HELD THAT:- No discussion is complete on the use of inherent powers of the High Court under Section 482 of CrPC without referring to the decision of this court in State of Haryana v. Bhajan Lal [ 1990 (11) TMI 386 - SUPREME COURT ] wherein this Court had enumerated certain circumstances where the powers under Section 482 of the CrPC can be exercised to prevent abuse of the process of the court or to secure the ends of justice. Though the High Court has unfettered powers conferred by the CrPC for exercising its inherent jurisdiction under Section 482., the same is expected to be used very sparingly and only in exceptional circumstances. There cannot be any straight jacket formula as to when the High Court would be justified to exercise jurisdiction under Section 482 of CrPC and each case is required to be dealt with on its own merits. In the present case, the High Court quashed the proceedings on the premise that there were long business transactions between the parties and initiation of criminal proceedings was an armtwisting tactic to extract the pending dues from Respondent Company - the High Court committed a serious error, in quashing the proceedings on a premise, that there were long business transactions between the parties, and initiation of criminal proceedings was an arm-twisting tactic to extract the pending dues from respondent company. It may not be out of place to state the High Court was apprised with a factum aspect that the directors of the company, established certain dummy/shell companies and the monetary transaction were circulated to these shell/dummy companies. It is true that there is a growing tendency of parties to rope in their counterparts to harass and extract monetary transaction, it is the duty of the Court to consider the facts of each case, in its proper perspective and then to arrive at the conclusion as to whether the case warrants investigation or the proceedings are required to be quashed. The peculiar facts and circumstances of the present case warrants thorough investigation as there was a huge amount involved. As we have already stated that when the petitioner approached the High Court for quashing of the FIR, the investigation was at its initial stage and subsequent to filing of the present Special Leave Petition in this Court it seems that the investigation was concluded by filing the chargesheet. Conclusion - The High Court is not justified in exercising its jurisdiction under Section 482 of CrPC. The appeals are accordingly allowed.

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• 2025 (4) TMI 1590
  Cognizance of an offence under Section 174-A of the Indian Penal Code (IPC) can be taken by the Court without a complaint in writing by the concerned public servant, as mandated by Section 195(1)(a)(i) of the Code of Criminal Procedure (Cr.P.C.) - gravamen of the petitioners challenge to the charges framed under section 174-A IPC was that cognizance of offence under the same could only be taken on a complaint in writing by the public servant concerned and the bar under Section 195(1)(a)(i) Cr.P.C. would apply - HELD THAT:- For offences under Section 188 IPC, the Supreme Court in in C. Muniappan [ 2010 (8) TMI 1091 - SUPREME COURT ] reiterated that there must be a complaint by a public servant whose lawful order has not been complied with, which must be in writing, since the provisions of Section 195 C.r.P.C were mandatory. It was stated that Court cannot assume cognizance of the case without such complaint and the trial/conviction was, therefore, void ab initio. Accordingly, it underscored that the law does not permit taking cognizance of an offence under Section 188 IPC, in view of the bar under Section 195 C.r.P.C, in absence of a complaint, as prescribed under the provision. Therefore, logically and fundamentally, Section 188 IPC being cognizable, the same reasoning would also apply to an offence under Section 174-A IPC, which is also cognizable. It is settled law that one cannot assume a careless omission by the legislature and proceed to fill in by judicial interpretation, a casus omissus. In any event the rule of strict and literal interpretation of statutes will prevail. It could be argued that, since now the legislature has sought to exclude the equivalent of Section 174-A IPC, the legislative intent even prior to BNS and BNSS was the same, although not specified in the statute in IPC/Cr.P.C. This, however, will remain in the realm of legislative speculation and it would be encroaching upon the legislative function by providing such interpretation by judicial dicta, which is not permissible. Reference may be made inter alia to Supreme Court s opinion in Sangeeta Singh v. Union of India [ 2005 (8) TMI 660 - SUPREME COURT ]. Conclusion - The petition challenging the framing of charges under Section 174-A IPC without a written complaint under Section 195 Cr.P.C. is allowed. The impugned order dismissing the revision petition is set aside, reaffirming the mandatory requirement of a written complaint for cognizance of Section 174-A IPC offences. Petition allowed.

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• 2025 (4) TMI 1575
  Deduction of liquidated damages by the respondent from the appellant s contractual dues, in view of the extensions of time granted for completion of the contract work - seeking to set aside the arbitral award, upholding such deduction - HELD THAT:- Respondent had established that the loss suffered by it indeed occurred due to delay in handing over the new premises. Clause 26 of the contract agreement permitted the respondent to levy liquidated damages. It also provided as to how the quantum of liquidated damages should be arrived at. According to the arbitral tribunal, the quantum was at the rate of 0.5% per week of delay. Delay in this case was more than ten months. Bulk of the delay was for reasons within the control of the appellant. The figure of Rs. 82,43,499.00 was correctly quantified and deducted as liquidated damages by the respondent. Therefore, the arbitral tribunal held that the liquidated damages were legally and contractually valid. A conjoint reading of Sections 55, 73 and 74 would indicate that in a contract whether time is of the essence or not, if the contractor fails to execute the contract within the specified time, the contract becomes voidable at the option of the promisee and the promisee would be entitled to compensation from the promisor for any loss occasioned to him by such failure. However, in case of a contract where time is of the essence, the contract becomes voidable on account of the contractor s failure to execute the contract within the agreed time. The promisee cannot claim compensation for any loss occasioned by such breach of the contract unless he gives notice to the promisor of his intention to claim compensation. This is made more specific in Section 73. Section 74 contemplates a situation where penalty is provided for and quantified as compensation for breach of contract. In such a case, the party complaining of the breach is entitled to compensation whether or not actual damage or loss is proved to have been caused thereby but such compensation shall not exceed the quantum of penalty stipulated. Scope of Section 34 of the 1996 Act is now well crystallized by a plethora of judgments of this Court. Section 34 is not in the nature of an appellate provision. It provides for setting aside an arbitral award that too only on very limited grounds i.e. as those contained in sub-sections (2) and (2A) of Section 34. It is the only remedy for setting aside an arbitral award. An arbitral award is not liable to be interfered with only on the ground that the award is illegal or is erroneous in law which would require re-appraisal of the evidence adduced before the arbitral tribunal - The award as such cannot be touched unless it is contrary to the substantive provisions of law or Section 34 of the 1996 Act or the terms of the agreement. The learned Single Judge had clearly gone beyond the grounds provided in Section 34 of the 1996 Act to set aside the arbitral award. Learned Single Judge exceeded the jurisdiction under Section 34 of the 1996 Act. There was no justification for setting aside the arbitral award by taking a different view. View taken by the arbitral tribunal is certainly a possible and plausible view. A different interpretation of clause 26 other than the one taken by the arbitral tribunal is possible but that will not bring the challenge to the arbitral award within the four corners of Section 34. In any view of the matter, mere setting aside of the arbitral award did not confer any benefit to the appellant. In the circumstances, the Division Bench was justified in reversing the order of the learned Single Judge under Section 37 of the 1996 Act. Conclusion - The arbitral award upholding the deduction of liquidated damages restored, and the Single Judge s order setting aside the award set aside as beyond jurisdiction. Appeal dismissed.

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