Taxation Law - Service Tax - Finance Act 1994 - Sections 65 66 83 - Business Auxiliary Service - The central issue was whether BPCL and HPCL acted as agents providing Business Auxiliary Service to Mahanagar Gas Limited or if they were buyers of Compressed Natural Gas on a principal to principal basis - The Adjudicating Authority confirmed the service tax demand holding it was a Principal to Agent relationship - CESTAT reversed this holding it to be a Principal to Principal sale - The Supreme Court analyzed the agreements and observed that property in the goods never passed to the respondents - MGL retained ownership controlled the retail price maintained the equipment and bore the risk until the CNG was sold to the ultimate consumer - The respondents merely provided the site manpower and infrastructure as facilitators in exchange for a commission - Held - The relationship is one of Principal and Agent - The transaction is not a sale of goods to the respondents but a provision of promotional and marketing services for MGL squarely covered under Business Auxiliary Service - The respondents are liable to pay service tax - CESTAT order set aside - Appeals allowed - [Paras 1-14].

Contract Law - Agency vs Sale - Sale of Goods Act 1930 - Section 4 - Contract Act 1872 - Sections 182 to 188 and 222 - Distinction between contract of sale and contract of agency - In a sale the property in goods is transferred from seller to buyer for a price divesting the seller of control and risk - In an agency the agent sells on behalf of the principal who retains ownership and risk - The agreements expressly showed MGL retained title to CNG until sold to vehicle owners and the respondents only received commission for their agency services - Held - True nature of the relationship was of Principal and Agent - Respondents were recipients of goods acting as marketing promoters and not buyers - [Paras 5.3-5.5.2 10-11.2].

Decision: Appeals allowed – Impugned common order of the Customs Excise & Service Tax Appellate Tribunal West Zonal Bench Mumbai dated 04.06.2014 is set aside – Orders-in-Original dated 16.08.2012 passed by the Commissioner of Customs (TAR) Mumbai are restored – Appellant is entitled to enforce the demand towards service tax against the respondent Corporations as adjudicated.

Criminal Law – Mistaken Identity – UAPA – Acquittal – Appellant, a Sri Lankan refugee residing in Trichy under the name "Ranjan", was convicted by the trial court and the conviction confirmed by the High Court, on the basis that he was the same person as absconding accused "Sri" (A-5), who allegedly handed over cyanide capsules and poisonous substances to co-accused Krishnakumar (A-1) in furtherance of a conspiracy to revive the banned LTTE — Held: Courts below erred in identifying the appellant with the absconding accused "Sri"; conviction based on flawed identification unsustainable; appellant acquitted [Paras 43, 62–64].

Witness Credibility – Material Improvement in Testimony – Identification in Police Custody – Key prosecution witnesses Balachandran (PW-8) and Kumar @ Dharma Kumar (PW-9) had not mentioned the name "Ranjan" in their earlier statements to police or in depositions in prior trials (S.C. No. 7/2016 and S.C. No. 15/2016); the identification of "Sri" as "Ranjan" was introduced for the first time in the present trial, only after the appellant's arrest, and was made during police custody without any Test Identification Parade — Held: Such belated and improved testimony constitutes a material improvement and not a mere lapse of memory; it has a debilitating effect on the credibility of the witnesses and cannot be brushed aside as inconsequential [Paras 47–49, 54, 56].

Witness Credibility – Unreliable Witnesses – Both PW-8 and PW-9 were Sri Lankan nationals illegally residing in India under fabricated identity documents; they sheltered the main accused Krishnakumar (A-1) and witnessed the alleged handover of poisonous substances yet remained silent and never informed the police; their conduct was unnatural, suspicious and sufficient to make them liable for prosecution — Held: Failure of investigating agency to take action against them casts serious doubt on the bona fides of the investigation [Paras 45–46, 61].

Evidence – Corroborative Witnesses – Misreading of Depositions – Courts below treated evidence of landlady Rasamalar (PW-25) and neighbours Indu (PW-17) and Latha (PW-18) as corroborating the prosecution case on identity — Held: A careful reading of their depositions reveals the contrary; PW-25 categorically stated there was no resident named "Sri" in her apartment and that she knew the appellant only as "Ranjan"; PW-17 and PW-18 confirmed only ordinary neighbourly interaction; their evidence, far from supporting the prosecution, establishes that the appellant was known only as "Ranjan" [Paras 50–53].

Identification – Absence of Test Identification Parade – Investigating Officer (PW-29) admitted that only the name "Sri" appears in earlier proceedings and that the name "Ranjan" does not find mention anywhere in the investigation records prior to arrest; no TIP was conducted; no contemporaneous documentary linkage connecting the appellant to accused "Sri" existed — Held: Applying principles in Vishwanatha v. State of Karnataka, 2024 INSC 482, the absence of reliable identification material and failure to establish how the appellant came to be implicated renders the case on identity wholly doubtful; unsafe to sustain conviction [Paras 54–56].

Conduct of Accused – Inconsistency with Prosecution Case – Appellant resided openly and continuously at a registered address in Trichy throughout the period he was allegedly absconding; he was simultaneously engaged with the Swiss Embassy for a visa and police clearance certificate to travel to Switzerland to join his wife and son — Held: Conduct of a person actively seeking police clearance is wholly inconsistent with that of an absconding accused in a serious UAPA matter and is entirely consistent with innocent conduct; investigating agency's failure to apprehend him for over five years from his known registered address further undermines the prosecution case [Paras 57–59].

Decision: Appeal allowed — Judgment of conviction dated 18.07.2024 passed by the trial court and impugned judgment dated 03.04.2025 passed by the Madras High Court set aside — Appellant acquitted of all charges — Directed to be released from Special Camp, Trichy forthwith — Liberty granted to pursue relocation to Switzerland in accordance with law [Paras 63–65].

Service Law – Dismissal without Departmental Inquiry – Article 311(2)(b) of the Constitution – Appellant constable dismissed from service without conducting departmental inquiry on the ground that witnesses might be intimidated or influenced – Preliminary inquiry relied upon by disciplinary authority merely recorded a presumption that witnesses could be threatened due to alleged association with criminals – Held: No material on record showing actual threat, intimidation or inducement to witnesses – Mere presumption or belief cannot justify dispensing with a regular departmental inquiry – Invocation of Article 311(2)(b) unsustainable [Paras 27–31].

Article 311(2)(b) – “Not Reasonably Practicable to Hold Inquiry” – Scope – Power to dispense with inquiry is an extraordinary constitutional exception and cannot be invoked lightly or arbitrarily – Disciplinary authority must record cogent reasons in writing based on objective material demonstrating impracticability of inquiry – Satisfaction must be reasonable and subject to judicial review – Absence of material renders dismissal order invalid [Paras 16–20, 41].

Judicial Review – Satisfaction of Disciplinary Authority – Courts can examine whether reasons recorded are relevant, justified and supported by material – If reasons are irrelevant or based on conjectures, the order dispensing with inquiry and consequent penalty is liable to be struck down [Paras 18–19, 41].

Service Discipline – Custody of Employee – Relevance – Appellant was already in judicial custody when dismissal order was passed – No instance recorded showing intimidation or attempt to influence witnesses during custody – Therefore, the belief that inquiry could not be conducted due to witness intimidation was speculative and unsupported by evidence [Paras 34–35].

Relief – Reinstatement with Partial Back Wages – Dismissal order, CAT decision and High Court judgment set aside – Appellant directed to be reinstated with continuity of service and consequential benefits – Back wages restricted to 50% considering pendency of criminal case – Liberty granted to department to initiate departmental inquiry in accordance with law [Paras 42–43].

Decision: Appeal allowed – Orders of CAT and High Court set aside – Dismissal order quashed – Appellant reinstated with continuity of service and 50% back wages – Liberty granted to conduct departmental inquiry in accordance with law.

Sexual Harassment – Armed Forces – ICC Report – Appeal under POSH Act – Appellant, a Naval Commander, was proceeded against for alleged acts of sexual harassment based on an ICC report constituted under POSH Act – Report recommended action – Show Cause Notice for termination issued under Regulation 216 of the Navy Regulations read with Section 15(2) of the Navy Act – Held: Appeal lay under Section 18 of the POSH Act read with Section 14 of the AFT Act and could not be dismissed as premature merely because only a Show Cause Notice had been issued [Paras 4–6, 13–14, 21–26]

Jurisdiction – Armed Forces Tribunal – Scope under POSH Act – Tribunal wrongly refused to consider appeal on merits, treating it as premature – High Court also erred in holding that no statutory appeal lay against ICC findings – Held: Tribunal had jurisdiction under Section 14 of AFT Act and ought to have examined ICC report and recommendations, which formed basis of Show Cause Notice [Paras 22–26]

Interpretation of Statutes – Specific vs. General Law – Section 18 of POSH Act provides a specific right of appeal against ICC recommendations – Such right is enforceable before Armed Forces Tribunal when service matters are involved – Regulation 216 is general in nature and does not exclude operation of POSH Act – Tribunal’s jurisdiction not ousted [Paras 23–24]

Remand – Appeal Restored – Tribunal and High Court orders set aside – Original Appeal (OA No.1024/2025) restored before Tribunal – Tribunal directed to adjudicate appeal afresh on merits – Show Cause Notice not to be acted upon till final disposal [Paras 27–29]

Decision: Appeal allowed – Orders of High Court and Tribunal set aside – Original application restored before Tribunal – Tribunal directed to adjudicate matter afresh – Show Cause Notice dated 05.03.2025 not to be acted upon pending disposal.

Criminal Law – Quashing under Article 32 – Large-scale financial fraud allegations – OTS with banks – Petitioners voluntarily depositing entire settlement amount – State proposing full and final figure of ₹5100 crores – Consensus achieved – Held: In extraordinary and peculiar facts, upon full deposit, all FIRs, ECIRs, PMLA attachments, SFIO prosecutions, Black Money Act cases, and Fugitive Economic Offenders proceedings to be quashed – Directions issued for disbursement to banks – Order not to be treated as precedent [Paras 10–12].

Criminal Law – Article 32 – Quashing of FIRs – Extraordinary Jurisdiction – Held: Court may exercise plenary powers in exceptional cases to secure larger public interest where petitioners have agreed to deposit entire defalcated amount and settlement is reached with banks and agencies – Continuation of criminal proceedings would serve no useful purpose after full restitution of public money [Paras 10–12].

Financial Fraud – OTS and Insolvency Proceedings – Computation of Dues – FIR alleged defalcation of ₹5383 crores – OTS amount across Indian and foreign entities aggregated ₹6761 crores – Petitioners deposited ₹3507.63 crores; banks recovered ₹1192 crores under IBC liquidation – Net unpaid amount computed at ₹2061.37 crores – Investigating Agencies, after consultation with banks, sought ₹5100 crores as full settlement – Petitioners consented to deposit entire amount [Paras 1–9, 10].

Settlement – Effect on Criminal Proceedings – Held: Given petitioners’ offer to deposit ₹5100 crores—exceeding assessed dues—Court satisfied that continuation of prosecution unnecessary; consensual full repayment ensures recovery of public funds – Criminal, civil, regulatory and attachment proceedings to be quashed upon deposit [Paras 10–12].

PMLA, SFIO, Black Money Act, FEPA – Quashing of Multiple Proceedings – FIRs, ECIRs, prosecution complaints, attachments, freezing orders, fugitive offender proceedings, and Company Act prosecutions – All such matters directed to be closed in entirety upon fulfilment of deposit condition [Paras 1, 12(i)].

Directions – Deposit and Disbursement – Petitioners to deposit ₹5100 crores on or before 17.12.2025 with Registry – Amount to be kept in short-term interest-bearing fixed deposit until disbursement – Registrar (Judicial–Administration) to proportionately distribute amounts to lender banks after verification – Registrar permitted to seek assistance or clarification from Bench [Paras 12(ii)–12(iv)].

Precedent – Limitation – Held: Directions passed solely in unique factual circumstances involving massive financial irregularity, OTS, and deposit of entire demanded amount – Order not to be treated as precedent [Para 12(vi)].

Decision: Writ petitions allowed – All FIRs, ECIRs, prosecution complaints, attachment and freezing proceedings under PMLA, proceedings under the Fugitive Economic Offenders Act, SFIO prosecution under the Companies Act, and Black Money Act prosecutions against the petitioners directed to be quashed – Quashing to operate upon deposit of ₹5100 crores with the Supreme Court Registry on or before 17.12.2025, to be disbursed proportionately to lender banks – Directions passed in the peculiar facts of the case and not to be treated as precedent [Paras 10–12].