Taxation Law - Income Tax – Reassessment – Issuance of Notice to a Non-Existent Company – Violation of Legal Principles – Petitioner challenged notices under Section 148 issued by the Income Tax Department to Amanora Future Towers Pvt. Ltd. (AFTPL), which had ceased to exist post-merger with City Corporation Limited (CCL) under an NCLT order—Held: The issuance of reassessment notices to a non-existent entity is a jurisdictional defect, rendering the notices void ab initio—Reliance placed on PCIT v. Maruti Suzuki India Ltd., (2019) 416 ITR 613 (SC)—Respondents' argument that the issuance was a "technical glitch" is untenable—Notices quashed [Paras 8-17].

Jurisdictional Defect – Effect of Prior Knowledge by Tax Department – Estoppel Not Applicable – Revenue was informed on 27/08/2020 of the merger, effective from 01/04/2018, and endorsed this communication—Despite this, notices were issued in 2023 to AFTPL, a non-existent company—Held: Revenue cannot claim ignorance of the merger—The defect cannot be cured under Section 292B as it is a substantive illegality, not a procedural lapse—Participation of the merged entity in proceedings does not validate an illegal notice—Reliance placed on Uber India Systems (P.) Ltd. v. ACIT, (2023) 150 taxmann.com 195 (Bom HC) and Alok Knit Exports Ltd. v. DCIT, (2023) 149 taxmann.com 387 (Bom HC) [Paras 13-19].

Failure of Tax Department’s Utility System – Cannot Justify a Non-Est Notice – Revenue attributed the error to a system-generated technical glitch, leading to notices being issued in the name of AFTPL instead of CCL—Held: This does not absolve the department of its responsibility—Revenue’s request to "treat the notice as issued to the correct entity" is rejected—Court refuses to validate fundamental errors on the ground of system inefficiencies [Paras 20-24].

Distinction Between Skylight Hospitality LLP and Present Case – Revenue relied on Skylight Hospitality LLP v. ACIT, (2018) 405 ITR 296 (Del HC) where the court upheld a notice issued to a merged entity due to a clerical mistake—Held: Maruti Suzuki (SC) distinguished Skylight as a case based on peculiar facts—In the present case, notice was issued despite full knowledge of the merger, unlike in Skylight, where the mistake was rectifiable—Anokhi Realty (P) Ltd. v. ITO, (2023) 153 taxmann.com 275 (Guj HC), Adani Wilmar Ltd. v. ACIT, (2023) 150 taxmann.com 178 (Guj HC), and PCIT v. Vedanta Ltd., (2023) 150 taxmann.com 449 (Del HC) reaffirmed this distinction [Paras 25-28].

Reassessment Proceedings – Revenue Not Precluded from Issuing Fresh Notice – While quashing the impugned notices, Court clarified that Revenue is not barred from initiating reassessment proceedings against CCL, provided they comply with statutory requirements and limitations—All contentions regarding reassessment left open [Para 30].

Decision: Impugned notices under Section 148, Income Tax Act, 1961, quashed and set aside as issued to a non-existent entity—Revenue directed to act in accordance with law—Rule made absolute.
 

Civil Law - Order VI Rule 17 CPC - Amendment of Pleadings – Post-Trial Amendment – Due Diligence Requirement – Plaintiffs sought amendment after trial commenced, contending that they discovered fraud in a prior decree only when documents were marked in another suit—Held: Plaintiffs failed to establish due diligence as the defendants had disclosed all relevant documents in their written statement filed in 2017—Amendment impermissible under proviso to Order VI Rule 17 CPC [Paras 15-16].

Fraud Allegation in Pending Suit – Change of Cause of Action – Amendment sought to challenge the binding nature of a decree in O.S. No. 44 of 1984 on grounds of fraud—Held: The proposed amendment introduced a new dimension and changed the nature of the suit—Allowing such an amendment would prejudice the defendants and cannot be permitted under law [Paras 17, 19].

Applicability of Supreme Court Precedents on Amendments – Court referred to Life Insurance Corporation of India v. Sanjeev Builders Pvt. Ltd. (2022) regarding conditions under which amendments can be allowed—Held: The amendment failed to satisfy the conditions as it raised a time-barred claim, changed the nature of the suit, and was sought belatedly without due diligence [Para 18].

Exercise of Supervisory Jurisdiction – Article 227 – Trial court’s rejection of amendment found to be proper—Held: No illegality or irregularity warranting interference under Article 227 of the Constitution—Civil Revision Petition dismissed [Para 20].

Decision: Civil Revision Petition dismissed – Trial Court’s rejection of amendment upheld – Amendment held impermissible due to lack of due diligence and introduction of a new cause of action [Paras 20-21].
 

Bail under NIA Act – Right to Speedy Trial – Petitioners accused of directing preparation of explosive bombs for political purposes—NIA investigation revealed connections with law enforcement and local administration—Court acknowledges serious allegations but emphasizes the right to a speedy trial—Held: Delay in trial cannot justify indefinite detention—Bail granted with stringent conditions to prevent witness intimidation [Paras 9-12].

Influence over Investigation – Risk of Witness Tampering – NIA submitted that petitioners had significant political influence and attempted to mislead the investigation—Protected witnesses disclosed their alleged role in bomb-making—Held: Though allegations are serious, continued detention is unwarranted given the delay in trial—Strict bail conditions imposed to prevent intimidation of witnesses and interference in trial [Paras 4, 12].

Fundamental Rights – Balancing National Security and Liberty – Supreme Court precedents stress that gravity of allegations cannot override Article 21 rights—Court referred to recent decisions holding that prolonged pre-trial detention must be avoided—Held: Petitioners cannot be kept in custody indefinitely, but their movement must be restricted to ensure fair trial [Paras 10-11].

Quashing of Second FIR – Separate Investigation Justified – Wife of deceased accused filed FIR alleging suppression of facts—NIA contended that FIR was not a second FIR but a continuation of investigation—Held: Multiple FIRs permissible when new facts emerge—Reference made to Pradeep Ram v. State of Jharkhand, (2019) 17 SCC 326 [Paras 4, 7].

Conditions for Bail – Preventing Witness Intimidation – Given petitioners' political influence, court imposes stringent bail conditions—Restricted movement, mandatory attendance, monitored communication, and residence away from case jurisdiction—Held: Bail granted, but breach of conditions will lead to automatic cancellation [Paras 12-13].

Decision: Bail granted with stringent conditions – Petitioners to remain within New Town, Rajarhat jurisdiction – Strict monitoring by NIA – Any violation of conditions will result in bail cancellation [Paras 12-13].
 

Service Law - Promotion to Sub-Inspector (Civil) – Seniority Determination – Feeder Category Principle – Petitioners contended that their seniority should be reckoned from their initial enlistment as Police Constables in 1989, rather than their promotion as Head Constables—Held: The relevant Rules provide that seniority must be determined within the class or category of service—The feeder category for Sub-Inspector is Head Constable/ASI, not Police Constable—Seniority must be reckoned from the date of promotion as Head Constable, not initial enlistment as Police Constable [Paras 14-16].

Preparation of Integrated Seniority List – Adherence to Rules – Petitioners challenged the preparation of the Integrated Seniority List of HCs/ASIs (Civil) dated 01.11.2024 and the subsequent selection of candidates for Pre-Promotional Training—Held: The respondent authority adhered to Rules 2(b)(ii) and 15 of the Andhra Pradesh Police Subordinate Service Rules, 1959—Selection based on Head Constable seniority was valid—No procedural irregularity found [Paras 21-22].

Retrospective Seniority Not Permissible – Feeder Category Rule – Petitioners argued that juniors enlisted as Police Constables in 1992 were promoted to Head Constables before them and considered for Pre-Promotional Training—Held: Retrospective seniority cannot be granted from a date when an employee was not borne on a cadre—Feeder category rule applies, and seniority should be counted from the date of promotion to Head Constable, not initial recruitment as Police Constable—Reliance placed on Ganga Vishan Gujrati v. State of Rajasthan, (2019) 16 SCC 28 and State of Bihar v. Akhouri Sachindra Nath, 1991 Supp (1) SCC 334 [Paras 17-19].

Validity of Selection Process – Lack of Objections from Probable List Candidates – Respondents followed a provisional seniority list based on HC (Civil) ‘B’ List—The most senior among petitioners was ranked at Serial No. 88—None of the top 70 candidates in the probable list objected—Held: Petitioners cannot claim a violation of seniority rules when the duly prepared seniority list was not challenged by those selected for training [Para 21].

Decision: Writ Petitions dismissed – Seniority for Sub-Inspector (Civil) promotion to be determined from the date of promotion as Head Constable, not initial enlistment as Police Constable – No procedural irregularity in the preparation of the Integrated Seniority List – No merit in the petitions [Paras 23-24].

Quashing of Criminal Proceedings – Civil Dispute Given Criminal Color – Petitioner accused of failing to pay outstanding business dues of ₹5,93,760 despite repeated demands—Complainant alleged cheating and criminal breach of trust—Held: Business transaction disputes cannot be converted into criminal proceedings—There must be fraudulent or dishonest intention from inception to constitute cheating—Complaint lacked essential ingredients of criminal breach of trust or cheating—Proceedings quashed [Paras 19-26, 28-29].

Cheating – Requirement of Dishonest Intention at Inception – Complainant alleged that petitioner fraudulently induced them into supplying plywood on credit—Held: Mere failure to pay outstanding dues does not establish fraudulent or dishonest inducement from inception—Failure to fulfill a business contract does not constitute an offense under Section 420 IPC—Complaint does not disclose any inducement at the time of contract formation [Paras 20-23, 25].

Criminal Breach of Trust – Absence of Entrustment – To establish criminal breach of trust under Section 406 IPC, entrustment of property with an obligation to return must be proved—Held: No evidence of entrustment—Business transactions do not amount to entrustment—Failure to pay contractual dues is a civil matter, not a criminal offense [Paras 24-26].

Misuse of Criminal Law – Abuse of Process – Complaint filed to pressurize the petitioner to settle a civil dispute—Held: Courts must be cautious in allowing criminal complaints for purely civil disputes—Proceedings under Sections 406/420 IPC quashed as an abuse of process of law [Paras 27-29].

Inherent Powers of High Court – Quashing of Proceedings – Court relied on Supreme Court judgments to emphasize that criminal law cannot be used as a tool for settling civil disputes—Held: High Court must exercise its power under Section 482 CrPC to prevent abuse of legal process—Proceedings quashed in the interest of justice [Paras 29-30].

Decision:  Criminal proceedings quashed – Complaint does not disclose ingredients of Sections 406 and 420 IPC – Orders dated 03.12.2021 and 03.05.2023 set aside [Paras 30-31].
 

Advocates Act – Disciplinary Proceedings – Formation of "Reason to Believe" is Mandatory – Proceedings Quashed – Under Section 35(1) of the Advocates Act, 1961, a State Bar Council must form a "reason to believe" that an advocate is guilty of professional misconduct before referring a complaint to its Disciplinary Committee – Mere receipt of a complaint is insufficient – In the present case, no evidence established that the Bar Council applied its mind or formed a reasoned belief before issuing the impugned notice (Annexure P-2) – Non-compliance with this statutory requirement renders the proceedings void ab initio – Held: Disciplinary proceedings initiated against the petitioner, including Complaint No. DCE/101/2024 and consequential notices, quashed [Paras 4-7].

Professional Misconduct – Safeguards Against Frivolous Complaints – Due Process Must Be Followed – The purpose of requiring a "reason to believe" under Section 35(1) is to prevent frivolous or baseless complaints against advocates – The Bar Council acts as a sentinel of professional ethics and must exercise its discretion judiciously – Failure to do so amounts to a jurisdictional error – The disciplinary process must not be misused to harass legal professionals – Held: Since no prior "reason to believe" was recorded by the Bar Council, the reference to the Disciplinary Committee was illegal and unsustainable [Paras 5-6].

Judicial Precedent – Supreme Court Interpretation of Section 35(1) – Binding on Bar Councils – Reliance placed on Nandlal Khodidas Barot v. Bar Council of Gujarat, (1980) Supp SCC 318, which mandates that a State Bar Council must apply its mind before referring complaints to the Disciplinary Committee – Failure to adhere to this statutory requirement results in vitiation of the proceedings – Held: The present case falls within the ratio of Nandlal Khodidas Barot, necessitating quashing of the impugned proceedings [Para 8].
 

Criminal Procedure – Proclamation under Section 82 Cr.P.C. – Non-Compliance with Mandatory Procedure – Held: The trial court declared the petitioner a proclaimed person without adhering to the procedural requirements of Section 82 Cr.P.C. – No prior issuance of summons or bailable warrants before resorting to proclamation – Failure to record satisfaction that the petitioner was absconding or concealing herself from the process of law – Such non-compliance renders the proclamation and all subsequent proceedings under Section 174A IPC illegal [Paras 43-44].

FIR under Section 174A IPC – Bar under Section 195(1)(a)(i) Cr.P.C. – Held: Section 195(1)(a)(i) Cr.P.C. mandates that no court shall take cognizance of offences under Sections 172 to 188 IPC except on a written complaint by a public servant – FIRs under Section 174A IPC cannot be registered based on a police report – Cognizance can only be taken through a written complaint before the competent jurisdictional court – The impugned FIRs are therefore unsustainable in law [Paras 40-42].

Personal Liberty – Violation of Article 21 – Procedural Safeguards Ignored – Held: Criminal prosecution must be in accordance with the procedure established by law to balance individual liberty and law enforcement – Declaring a person a proclaimed offender without due process under Section 82 Cr.P.C. violates personal liberty under Article 21 of the Constitution – Prosecution proceedings initiated against the petitioner without compliance with legal requirements stand vitiated [Paras 42-43].

Supreme Court Precedents – Compliance with Section 195 Cr.P.C. is Mandatory – Held: The Hon’ble Supreme Court in C. Muniappan & Others v. State of Tamil Nadu, (2010) 9 SCC 567, held that provisions of Section 195 Cr.P.C. are mandatory – FIRs registered in contravention of this provision are void ab initio – The High Court quashed the FIRs and all subsequent proceedings against the petitioner [Paras 39-41].

Decision – Writ Petition Allowed – FIRs Quashed – Held: The orders declaring the petitioner a proclaimed person, along with FIRs under Section 174A IPC and all subsequent proceedings, are quashed – Petition allowed [Para 44].
 

Quashing of Cross-Case – Delay of 12 Years – Re-Investigation Held Unjustified – The petitioner sought quashing of a cross-case (DDR) filed in 2012, arguing that he was declared innocent in the original investigation and no fresh material warranted reopening the matter – The Trial Court had ordered re-investigation without assigning any cogent reasons – Held: Re-investigation after 12 years is unwarranted and violates the right to a speedy trial; DDR proceedings quashed [Paras 6-12].

Re-Investigation vs. Further Investigation – Magistrate’s Power Limited – The Court held that while further investigation under Section 193(9) BNSS is permissible, re-investigation wiping out earlier findings is not allowed – The Trial Court erred in ordering re-investigation without any fresh evidence – Held: Magistrates must exercise caution and apply judicial mind before directing further investigation [Paras 13-17].

Right to Speedy Trial – Prolonged Investigation Violates Article 21 – The Court reaffirmed that criminal proceedings must be concluded within a reasonable time – Ordering re-investigation after a decade amounts to harassment and is against the principles laid down in Maneka Gandhi v. Union of India, (1978) 1 SCC 248 – Held: Re-investigation quashed to prevent violation of fundamental rights [Paras 18-21].

Guidelines Issued for Magistrates – Handling of Cancellation Reports and Re-Investigation – The Court issued detailed directives to ensure judicial discipline in dealing with cancellation reports under Section 193 BNSS and applications under Section 175(3) BNSS – Held: Magistrates must justify ordering further investigation and avoid entertaining frivolous objections from complainants [Paras 22-25].

Writ Petition Allowed – DDR and Related Proceedings Quashed – The Court held that the Trial Court’s order directing re-investigation was arbitrary and lacked legal basis – Held: Writ petition allowed, and all proceedings in DDR quashed [Paras 26].
 

FEMA – Omission of Section 6(3)(b) – Impact on Pending Proceedings – The petitioners argued that Section 6(3)(b) of FEMA was omitted by the Finance Act, 2015, and thus, no proceedings could be initiated for alleged violations under this section – Held: Omission of a statutory provision is equivalent to repeal, attracting the application of Section 6 of the General Clauses Act – Proceedings initiated for past violations under Section 6(3)(b) remain valid despite its subsequent omission [Paras 18-23].

Show Cause Notice – Delay in Issuance – Reasonableness of Time – Petitioners contended that the impugned notice was issued after an unreasonable delay of nearly 10 years – Held: Though FEMA does not prescribe a limitation period for initiating adjudication, proceedings must be initiated within a reasonable time – Determination of what constitutes a "reasonable time" depends on the facts and circumstances and is within the adjudicating authority’s jurisdiction – No interference warranted at the show cause notice stage [Paras 31-36].

Natural Justice – Allegation of Bias in Adjudicating Authority – Petitioners argued that the Special Director had already made up his mind as the Enforcement Directorate had filed a counter-affidavit supporting the allegations – Held: The counter-affidavit was filed by a subordinate officer and not the adjudicating authority – Mere filing of a counter does not establish bias – Adjudication remains open for explanation and appeal, ensuring due process [Paras 24-27].

Alternative Remedy – Maintainability of Writ Petition – Petitioners challenged the show cause notice directly before the High Court, bypassing statutory appeal remedies – Held: Writ jurisdiction under Article 226 should not be invoked when an effective alternative remedy is available, except in cases of fundamental rights violation, lack of jurisdiction, or breach of natural justice – Petitioners had the right to appeal under Sections 19 and 35 of FEMA – Writ petition dismissed on grounds of alternative remedy [Paras 12-15, 28-30].

Decision: The writ petitions are dismissed with liberty to the petitioners to file their objections before the adjudicating authority within 30 days from the date of receipt of the order – The adjudicating authority shall consider the objections in accordance with law – No costs – Miscellaneous petitions closed [Para 39].