Income Tax – Disallowance Under Section 40A(3) – Whether Justified – The Tribunal held that no separate addition was made under Section 40A(3) and deleted the disallowance of ₹1,08,34,15,088—Revenue challenged this deletion—Held: Assessing Officer had explicitly mentioned the disallowance and initiated penalty proceedings under Section 271(1)(c)—Tribunal’s reasoning was erroneous—Remanded for reconsideration [Paras 4-7].

Search and Seizure – Validity of Proceedings Under Section 153C – The respondent-assessee challenged the invocation of Section 153C, arguing that no incriminating material was found in search proceedings—Held: Tribunal rightly upheld the validity of proceedings under Section 153C—Assessee’s objections dismissed [Paras 8-10].

Maintainability of Cross-Objections Under Section 260A – Whether Permissible – The respondent filed cross-objections challenging findings on Section 153C—Revenue argued that Section 260A does not provide for cross-objections—Held: Section 260A does not explicitly allow cross-objections, and Order XLI Rule 22 CPC cannot be imported—Cross-objections dismissed as not maintainable [Paras 11-15].

Judicial Precedents – Interpretation of Section 260A – The Court relied on various High Court and Supreme Court decisions in interpreting the scope of appeals under Section 260A—Held: A cross-objection is akin to an appeal and must be statutorily permitted—Income-tax appeals under Section 260A cannot entertain cross-objections [Paras 16-20].

Final Decision – Appeals partly allowed – Disallowance under Section 40A(3) remanded for reconsideration—Cross-objections dismissed as not maintainable [Paras 21-23].
 

Taxation Law - Tax Evasion – Undervaluation of Goods – Section 129 of the IGST/CGST Act – Goods in transit can be seized if transported in contravention of the Act or Rules – The petitioners contended that their goods were lawfully transported with valid tax invoices and without an e-way bill, as the value was below ₹50,000 – The Court held that undervaluation of goods with intent to evade tax amounts to a violation of the GST Act – Authorities are empowered to detain and seize goods under Section 129 – Held: The seizure was justified as the documents were found to be manipulated and the petitioners failed to prove the genuine movement of goods from Assam/West Bengal to Delhi [Paras 14-17, 26-28].

Burden of Proof – Requirement to Prove Genuine Movement of Goods – The petitioners failed to provide toll receipts, vehicle details, or other supporting evidence establishing that the goods originated from Assam/West Bengal – The Court emphasized that under GST law, the burden of proof lies on the dealer to demonstrate the legitimacy of the transaction – Held: Failure to establish actual movement of goods rendered the accompanying tax invoices unreliable, justifying detention and penalty [Paras 22-26].

E-Way Bill Exemption – Misuse to Evade Tax – Rule 138 of CGST Rules – The petitioners claimed that since the value of goods was below ₹50,000, an e-way bill was not required – The Court found that the deliberate undervaluation of goods to avoid generating an e-way bill was a fraudulent practice – Held: The exemption under Rule 138 cannot be misused to suppress the true value of goods and evade tax obligations [Paras 37-39].

Reliability of Driver’s Statement – Importance of Initial Interrogation – The truck driver’s statement indicated that the goods were loaded from Kanpur instead of Assam/West Bengal, contradicting the accompanying documents – The Court held that initial statements given at the time of detention carry greater evidentiary value – Held: The driver’s statement reinforced the finding that the goods were falsely documented as originating from Assam/West Bengal, supporting the tax authority’s action [Paras 29-31].

Judicial Precedents – Seizure Valid for Undervaluation – The Court relied on previous rulings that upheld seizure of goods for undervaluation when done with an intent to evade tax – It noted that misdeclaring value to avoid tax obligations constitutes a violation of GST laws – Held: The present case aligned with past judgments where tax authorities were justified in detaining goods on suspicion of tax evasion through undervaluation [Paras 42-45].

Decision: Writ petitions dismissed – The Court found no merit in the petitions challenging the seizure orders. Seizure and penalty upheld – The Court confirmed that the authorities were justified in seizing the goods and imposing penalties under Section 129 of the GST Act. Deliberate undervaluation amounts to tax evasion – The Court ruled that misrepresenting the value of goods to circumvent e-way bill requirements constitutes an attempt to evade tax. Failure to establish genuine movement – The petitioners failed to provide sufficient evidence to prove the actual transportation of goods from Assam/West Bengal, rendering their claims untenable.

Civil Law - Ad Interim Injunction – Denial by Trial Court – Legality – Held: The Trial Court erred in refusing ad interim injunction on the premise that lis pendens provides adequate protection – The court failed to assess whether the sale was vitiated due to fraud and misrepresentation by a single shebait claiming exclusive ownership – Injunction granted to prevent further alienation of the property pending trial [Paras 9, 25-31].

Debuttar Property – Transfer by Sole Shebait – Legality – Held: A single shebait cannot unilaterally transfer debuttar property without the consent of other shebaits – The transfer was unauthorized and void ab initio – Prima facie case established for challenging the sale deed executed in 2015 [Paras 5-7, 47-48].

Section 34 of Indian Trusts Act – Applicability to Religious Endowments – Held: Section 34 does not apply to debuttar properties as per the savings clause in Section 1 – Order obtained under Section 34 permitting transfer of the property was a nullity in law and could not validate the impugned sale deed [Paras 6, 50-53].

Limitation – Suit to Set Aside Transfer of Religious Endowment Property – Article 94 of Limitation Act – Held: The suit, filed in 2023, is within the 12-year limitation period under Article 94 – The period begins from the date of knowledge of transfer, which occurred in 2019 – Fraud vitiates all proceedings, and the limitation bar does not apply in cases involving fraudulent transactions [Paras 32-38].

Lis Pendens – Effect on Injunction – Held: The doctrine of lis pendens does not bar the grant of injunctions – Injunction may still be granted to prevent multiplicity of proceedings and protect the plaintiff’s rights – Refusal to grant injunction solely based on lis pendens is erroneous [Paras 9, 30, 58].

Non-Joinder of Co-Shebaits – Whether Suit Maintainable – Held: The suit is not barred due to non-joinder of co-shebaits, as the relief sought benefits all shebaits and the deity – Worshippers and co-shebaits have standing to challenge fraudulent transactions affecting the debuttar estate [Paras 67-69].

Res Judicata – Whether Prior Litigation Operates as a Bar – Held: A previous suit dismissed for default does not bar a fresh suit on a different cause of action – The present suit, challenging the validity of a sale deed, is maintainable despite prior litigation involving related parties [Paras 59-63].

Decision – Injunction Granted – Held: The Trial Court’s order refusing ad interim injunction is set aside – Defendants are restrained from transferring or alienating the property pending final adjudication of the suit – Balance of convenience and irreparable injury favor the plaintiffs [Paras 74-75].

Taxation Law – Deemed Dealer under MVAT Act – Whether Stressed Assets Stabilization Fund is Liable – The Appellant, a trust set up by the Central Government to recover non-performing assets of IDBI, challenged its classification as a deemed dealer under the MVAT Act – The Tribunal upheld the determination order, ruling that the Appellant falls within the definition of a "dealer" under Section 2(8) – Held: The Explanation to Section 2(8) deems certain entities as dealers, overriding the requirement of carrying on business – As the Appellant was constituted by the Central Government for recovery and sale of stressed assets, it falls within the category of a deemed dealer – Tax liability confirmed [Paras 19-28].

Article 285 – Immunity of Union Property from State Taxation – Whether Applicable – The Appellant argued that it was exempt from taxation under Article 285 as it was acting as an instrumentality of the Central Government – Held: While Article 285 prohibits taxation of Union property, the trust itself, though government-created, engages in commercial transactions, making it subject to state taxation – Exemption not applicable [Paras 11-13].

Prospective Effect of Determination Order – Discretionary Power under Section 56(2) – The Appellant contended that it was under a bona fide impression that it was not liable for tax and had not collected tax from purchasers – Sought relief through prospective effect to avoid hardship – Held: Section 56(2) allows for prospective application of orders, but in this case, the Tribunal found no justification for relief – The Appellant, being a financial institution dealing in sales, was expected to be aware of tax liabilities – Denial of prospective effect upheld [Paras 16-18].

Nature of Transactions – Sale of Movable vs. Immovable Property – The Appellant claimed that it only sold immovable properties and thus should not be liable under MVAT – The Tribunal ruled that whether an asset is movable or immovable is to be determined at the field level – Held: Movable property sold in the course of stressed asset recovery is subject to VAT – The Appellant’s sale transactions included movable goods, making them taxable under MVAT [Paras 14-15].

Final Decision – Appeals dismissed – The Tribunal’s orders upholding the tax liability and denying prospective effect confirmed – The Appellant held liable for VAT on transactions of movable property sales [Paras 29-32].

Criminal Procedure – Applicability of BNSS to Pending Cases – Section 531(2)(a) of the BNSS – Held: The Code of Criminal Procedure, 1973, governs pending proceedings initiated before the enactment of BNSS – Since the investigation was initiated prior to the enforcement of BNSS, the Cr.P.C. remains applicable, and Section 349 of the BNSS cannot be invoked – Order directing compliance with BNSS quashed [Paras 1, 8].

Collection of Voice Samples – Power of Magistrate – No Explicit Provision in Cr.P.C. – Judicial Interpretation – Held: Section 311-A of the Cr.P.C. provides for collection of specimen signatures and handwriting but does not explicitly authorize the recording of voice samples – In Ritesh Sinha v. State of U.P., the Supreme Court ruled that a Magistrate may be empowered to order a person to provide a voice sample through judicial interpretation until explicit statutory provisions are introduced – However, this power stems from Article 142, which is exclusive to the Supreme Court and does not extend to subordinate courts – Magistrate’s order for voice sample collection under BNSS not tenable in law [Paras 9-10].

Self-Incrimination – Protection Under Article 20(3) – Constitutional Safeguards – Held: Compelling an individual to provide a voice sample may have implications for self-incrimination – The Supreme Court in Kathi Kalu Oghad (1961) clarified that Article 20(3) applies only to testimonial evidence that is self-incriminatory – Issue of whether witnesses can be compelled to provide evidence that may later implicate them remains unresolved and is pending before a larger Bench – Consequently, the petitioner’s voice sample collection should abide by the decision of the larger Bench [Paras 10-13].

Decision – Magistrate’s Order Quashed – Larger Bench’s Decision Awaited – Held: Since the issue of whether a Magistrate can compel a witness to provide a voice sample is pending before a larger Bench, judicial propriety demands that the petitioner’s case abide by that decision – The impugned order directing compliance with Section 349 of the BNSS is quashed – Petition disposed of accordingly [Paras 13-16].

Judicial Review – Scope in Academic Matters – Examination Answer Keys – Limited Interference – The Appellants challenged the final answer key issued by the Haryana Public Service Commission (HPSC) for the PGT (Chemistry) screening test, contending errors in evaluation – The High Court held that judicial intervention in academic matters is permissible only in cases of manifest error or arbitrariness – Reliance placed on the Expert Committee’s report, which found no merit in the objections raised – Held: Courts should not substitute their judgment for that of subject experts unless there is clear malafide, arbitrariness, or irrationality in the evaluation process [Paras 5-11, 25-26].

Expert Committee Report – Finality of Evaluations – The court examined the Expert Committee’s report, which justified the revised answer key and rejected objections raised against certain questions – Petitioners failed to demonstrate that the answer key was patently incorrect or that the Committee’s findings were arbitrary – Held: The court cannot re-evaluate academic decisions made by expert bodies unless gross errors are evident – The examination process should be accorded finality to prevent undue litigation and uncertainty in public recruitment processes [Paras 9-12, 23-24].

Precedents on Answer Key Challenges – Courts must exercise restraint – Appellants relied on past judgments where re-evaluation was permitted due to demonstrable errors – The High Court distinguished these cases, noting that the present challenge lacked clear evidence of error – Cited Supreme Court decisions affirming that courts should not interfere with academic evaluations unless the key answers are demonstrably wrong and beyond reasonable debate – Held: The court reiterated that the burden of proof lies on the petitioner to establish an error, which was not met in this case [Paras 12-15, 18-21].

Relief Denied – No Fundamental Error Found – The court found no compelling reason to interfere with the expert assessment or HPSC’s decision – Appeal dismissed – No costs imposed – Directed that the Expert Committee’s report be returned in a sealed cover to the HPSC [Paras 26-28].
 

Anticipatory Bail - Financial Fraud – Misappropriation of Funds in Co-operative Society – Petitioners, including former and present members of the Perumbavoor Urban Co-operative Society, accused of financial fraud, loan irregularities, and document forgery—Alleged misappropriation of ₹33.33 crores by granting loans without valid documents—Held: Sufficient prima facie evidence against petitioners—Custodial interrogation required—Bail denied except for medically incapacitated accused [Paras 4-9].

Forgery and Loan Fraud – Illegal Loan Disbursement Without Knowledge of Applicants – Petitioners accused of sanctioning loans using forged documents without the applicants’ knowledge—Prosecution alleged that fake loan beneficiaries were created to siphon funds—Held: Serious allegations of fraud affecting depositors—Bail denied as investigation is ongoing [Paras 10-14].

Medical Grounds for Bail – Consideration of Health Conditions of Accused – Some petitioners sought bail citing serious medical conditions, including paralysis and hospitalization—Held: Bail granted to K. M. Abdul Salam and Babu John due to medical reasons, with conditions to cooperate with investigation—Other petitioners’ medical claims rejected as not severe enough to preclude custodial interrogation [Paras 15-19].

Custodial Interrogation – Necessity in White-Collar Crime – Prosecution contended that the accused had concealed the true nature of transactions, making custodial interrogation essential—Held: Given the complexity and scale of fraud, custodial interrogation is necessary for unearthing the entire conspiracy—Bail denied to key accused [Paras 20-22].

Final Decision – Bail applications of most petitioners dismissed—Bail granted only to two petitioners on medical grounds, subject to conditions—Court directs accused to surrender before the investigating officer—Emphasized need for stringent investigation into large-scale financial fraud [Paras 23-26].
 

Criminal Law - POCSO Act – Disclosure of Minor Victim’s Identity – Media Responsibility – The petitioner, an editor of a news channel, was accused of revealing the identity of a minor victim and her family in a sexual offence case—Held: Publication of victim’s identity violates Section 23 of the POCSO Act—Media houses have an obligation to protect the identity of child victims—Allegations justified investigation [Paras 4-7].

Jurisdiction of Special Court – Power to Direct FIR Registration – The petitioner argued that the Special Court erred in directing the police to register an FIR instead of taking cognizance itself—Held: The Special Court can either take cognizance or direct investigation if it deems necessary—No illegality in the Special Court’s decision to refer the matter to the police [Paras 8-10].

Criminal Procedure – Whether Direct Complaint Before Special Court was Maintainable – The petitioner contended that the complainant should have approached the police first under Section 154 CrPC—Held: The POCSO Act contains overriding provisions that allow direct complaints to the Special Court—Court’s direction to register FIR upheld [Paras 11-13].

Final Decision – Criminal revision petition dismissed – Investigation to proceed—Police directed to complete the investigation and file a final report within two months—Special Court to expedite trial [Paras 14-16].

Civil - Partition Suit – Challenge to Prior Partition – No Partition by Metes and Bounds Proven – The original plaintiffs sought partition and separate possession, while the defendants opposed the suit, claiming a prior partition in 1974 and exclusive ownership based on tenancy rights – The First Appellate Court held that there was no legally recognized partition and that the suit lands were joint family properties inherited from the common ancestor, Waman – Held: Mutation entries alone do not prove partition by metes and bounds—Defendants failed to prove independent ownership—Plaintiffs entitled to partition and separate possession [Paras 10-16].

Tenancy Rights – Joint Family Property – Purchase Certificate under Tenancy Act – The defendants contended that Gat No. 70A was self-acquired as it was purchased under tenancy laws – The plaintiffs argued that the tenancy continued in the name of the joint family and that the land was ancestral – The First Appellate Court ruled that Waman was the original tenant, and after his death, the tenancy continued on behalf of the joint family – Held: Mere issuance of a certificate under Section 32M of the Tenancy Act in the defendant’s name does not confer exclusive ownership; tenancy continued for the benefit of all legal heirs [Paras 13-15].

Hindu Succession Act – Determination of Legal Heirs – Rights of Step-Sons – The First Appellate Court incorrectly allotted a one-third share to the plaintiffs – The court reconsidered the shares under Section 15 of the Hindu Succession Act – Held: Defendant No. 1, being the stepson of plaintiff No. 2, is not entitled to inherit from her share—Plaintiffs entitled to a greater share than determined by the lower court—Share determination modified [Paras 28-31].

Exclusion of Land – Alleged Consent-Based Transfer – The First Appellate Court excluded 2 anas 4 paise land, reasoning that it was sold by Defendant No. 1 to Defendant No. 2 (maternal sister) – Plaintiffs contended there was no valid transfer – Held: Defendant No. 2 is not a legal heir under Hindu law—No valid sale deed produced—Exclusion of land from partition decree set aside [Paras 25-27].

Final Decision – The Second Appeal filed by the defendants dismissed – The Cross Objection filed by the plaintiffs allowed – Judgment and decree of partition confirmed with modifications regarding share determination and exclusion of land [Paras 32-34].