Taxation – Business expenditure – Non-resident – Lull in business vs cessation – Assessee, a French drilling company with ONGC contract till 1993, maintained continuous correspondences and bid activity with ONGC during 1993–1998, ultimately securing a fresh contract in October 1998 (formalised January 1999) – Held: Such sustained efforts show intention to carry on business – Mere failure to procure a contract or maintain a permanent establishment in India does not imply cessation – Business expenditure (admin/legal etc.) undertaken wholly and exclusively for business is deductible and eligible for set-off under Section 71 [Paras 2, 4, 9, 11-17, 19-20].

Unabsorbed Depreciation – Section 32(2) – For the pre-2002 law, continuation of the business is relevant – On facts, business had not ceased; therefore, unabsorbed depreciation could be carried forward and set off in terms of Section 32(2) – Note: first proviso to Section 32(2) stood omitted w.e.f. 01/04/2002 by Finance Act, 2001 [Paras 10-12, 17].

Permanent Establishment (PE) – Not a statutory precondition under the Act for being “in business” in India – PE is relevant to DTAA benefits, not to charging or computation provisions under Sections 4, 5(2), 9(1)(i), and 28 – High Court erred in equating lack of PE/office or foreign-based correspondence with absence of business in India [Paras 11-12, 18-19].

Income Characterisation – Interest on income-tax refunds taxable under “Income from Other Sources” – Yet, business expenditure incurred for carrying on business can be set off against such income under Section 71, given the finding that business continued [Paras 5, 9, 11, 15-17].

Principles – The term “business” has a wide import, denoting real, substantial, systematic activity with a set purpose – “For the purpose of business” is broader than “for earning profits” and includes acts incidental to carrying on business, measures for preservation/protection, and statutory payments – “Lull in business” is distinct from “going out of business” [Paras 4, 14-16].

Decision: Appeals allowed – High Court judgment set aside – ITAT orders revived – Assessing Officer to pass fresh assessment orders for AYs 1996-97, 1997-98, and 1999-2000 in terms of ITAT orders [Paras 21].

Service Law – Medical Practitioners – Retirement Age – Parity Between Allopathy and AYUSH Doctors – Issue arose whether doctors practicing indigenous systems of medicine (AYUSH) are entitled to the same retirement age as allopathic doctors – Division Bench decisions in NDMC v. Dr. Ram Naresh Sharma (2021) 17 SCC 642, State of Gujarat v. Dr. P.A. Bhatt, 2023 SCC OnLine SC 503, and Dr. Solamon A. v. State of Kerala distinguished – Court observed that Dr. Ram Naresh Sharma turned on a policy decision of Union Cabinet extending parity in retirement age, while Dr. P.A. Bhatt upheld classification based on educational qualifications – Ambiguity persists in judicial approach [Paras 2–6].

Equality Before Law – Articles 14 and 16 – Classification Between Allopathy and AYUSH Practitioners – Court held that difference in qualifications, nature of work, duties, and responsibilities justifies separate treatment – Allopathic doctors perform critical care, trauma management, surgeries, and emergency procedures, unlike AYUSH practitioners – Distinction has rational nexus with public interest and sufficiency of qualified allopathy doctors – Classification constitutionally valid [Paras 7–9].

Judicial Discipline – Reference to Larger Bench – Divergent Judicial Views – Considering conflicting precedents and continuing ambiguity regarding parity of service conditions between allopathic and AYUSH doctors, matter referred to a Larger Bench for authoritative pronouncement [Para 9].

Interim Directions – Continuance of AYUSH Doctors – Pending reference, States permitted to continue AYUSH doctors beyond their prescribed retirement age up to the age applicable to MBBS doctors, on half pay and allowances – Such continuance optional; benefits subject to final outcome before Larger Bench [Paras 10–11].

Decision: Matter referred to Larger Bench – Interim arrangement for continuation of AYUSH doctors till Larger Bench decides issue – Directions regarding pay, allowances, and pension adjustments issued [Paras 9–12].

Service Law – Class IV Appointment – Validity of Appointments Beyond Advertised Vacancies – Rule 12, U.P. Rules – “Reasonable Dimension” of Waiting List – Appellants appointed against Class IV posts were terminated in 2008 on the ground that appointments exceeded notified vacancies – Advertisement of 2000 mentioned 12 vacancies “subject to increase or decrease” – Court held that Rule 12 permits maintenance of a waiting list of reasonable dimension to fill vacancies arising within the same or succeeding recruitment year – Reliance placed on Naseem Ahmad v. State of U.P., (2011) 2 SCC 734 – Held, appointments made from such waiting list were valid when vacancies arose subsequently – Termination unjustified [Paras 6–10].

Service Jurisprudence – Delay and Relief – Equitable Directions – Appellants were out of employment for 17 years – Two appellants had crossed superannuation age – Court directed reappointment of those still within age limit to existing or supernumerary posts in Ambedkar Nagar Judgeship – Those who crossed superannuation to be granted minimum pension – Intervening period not to count for seniority or pension computation – Directions confined to peculiar facts and not to be treated as precedent [Paras 11–12].

Interpretation of Rules – Rule 12, U.P. Rules – “Reasonable Dimension” – Expression construed to mean a waiting list adequate to cover vacancies likely to arise within the year of recruitment or the next year, in reasonable proportion to advertised vacancies – Ensures fairness and prevents arbitrariness in recruitment [Para 7].

Decision: Appeal allowed – Termination orders set aside – Reappointment or pension benefits granted as per directions – Relief restricted to appellants – Not to be treated as precedent [Paras 11–12].

Criminal Law - Religious Conversion – U.P. Conversion Act – Quashing – Article 32 Maintainability – Multiple FIRs – FIR No. 224/2022 lodged by a person not competent under unamended Section 4 held void ab initio – Subsequent FIRs (47/2023, 54/2023, 55/2023, 60/2023) found cyclostyled, delayed and hit by T.T. Antony test of sameness – Forensic/Aadhaar material non-probative – Held: FIRs 224/2022, 47/2023, 54/2023, 55/2023, 60/2023 quashed; FIR 538/2023 quashed insofar as U.P. Conversion Act offences, IPC (Ss. 307, 386, 504) to continue separately; SLP (Crl.) No. 8615/2024 de-tagged; interim protection continued [Paras 133–161].

Religious Conversion – U.P. Conversion Act, 2021 – Competency of Informant – Jurisdictional Defect – FIR No. 224/2022 lodged by person not falling within categories specified under unamended Section 4 of the U.P. Conversion Act – Restriction on locus is mandatory and not directory – FIR registered contrary to special statute cannot be cured under general powers of police under Sections 154 & 156 CrPC – Held: Investigation and charge-sheet rendered void ab initio – FIR and all consequential proceedings quashed [Paras 103-119, 133-134].

Statutory Interpretation – Section 4 of U.P. Conversion Act – Special Law vs. General Law – Restriction on who may initiate complaint analogous to Section 195 CrPC and Section 32 of Drugs and Cosmetics Act – Specific statutory bar overrides general police powers – Investigation cannot commence without valid informant – Held: Defect incurable and goes to root of jurisdiction [Paras 112-116].

Constitutional Law – Freedom of Religion – Articles 25 & 21 – Mere propagation of faith or charitable work in the name of religion not criminalised under the U.P. Conversion Act or IPC – Doing charity, quoting scripture, or holding gatherings not offence unless accompanied by coercion or fraud – Criminalisation of voluntary religious activity violates fundamental rights – Held: Prosecution founded on such premise unsustainable [Paras 57-63, 132-133].

Evidence – Credibility of Witnesses – Victim-witness affidavits dated 24.05.2022 identical in wording and timestamp – One affidavit containing another’s name indicates copying from common draft – Section 161 CrPC statements of victims recorded a year apart verbatim identical – Court termed investigation “mechanical and pre-meditated” – Held: Statements unreliable; investigation tainted by mala fides [Paras 122-128].

Multiple FIRs – Impermissibility – FIR Nos. 54/2023, 55/2023 & 60/2023 are verbatim reproductions of FIR No. 224/2022 relating to same incident dated 14.04.2022 – Lodged at same police station within 24 hours with only change in complainant’s name – Held: Subsequent FIRs hit by rule of sameness under T.T. Antony v. State of Kerala, (2001) 6 SCC 181 – Quashed [Paras 141-147].

Delayed FIR – FIR No. 54/2023 lodged nine months after incident – Complainant earlier appeared as VHP member and not as victim in FIR No. 224/2022 – Subsequent change of stand unexplained – Held: Complaint mala fide and aimed at curing defect in earlier FIR – Quashed [Paras 148-156].

Investigation – Forensic and Case Diary Material – Seizure of Aadhaar cards, printers, and peripherals unsupported by UIDAI confirmation of forgery – Differing photographs on cards; possibility of lawful updating – Forensic report only showing charitable activities of ‘World Vision’ organisation – No link with alleged mass conversion – Held: Material lacks probative value; investigation devoid of credibility [Paras 130-133].

Religious Gatherings and Charity – Organisation of religious meetings or aid programmes not an offence – U.P. Conversion Act and IPC contain no bar on religious charity unless tied to coercion – Receiving foreign aid or conducting welfare activities through mission institutions per se not illegal – Held: Continuation of prosecution would amount to criminalising constitutionally protected conduct [Paras 132-133].

Criminal Law – Abuse of Process – Duty of Courts – Where FIR is jurisdictionally defective and investigation patently mala fide, courts must intervene even post-charge-sheet to prevent miscarriage of justice – Power under Articles 32 & 226 rightly invoked – Bhajan Lal, Neeharika Infrastructure and Arnab Ranjan Goswami principles applied [Paras 67-79, 90-93, 133-134, 155].

Article 32 – Maintainability of Writ Petition for Quashing FIR – Though ordinarily remedy lies under Article 226 or Section 482 CrPC, Supreme Court may exercise jurisdiction in exceptional cases of blatant illegality and violation of fundamental rights – Present petitions maintainable and entertained to secure justice [Paras 89-94, 161(c)].

FIR No. 47/2023 – Distinct Date (25.12.2021) but identical allegations – Witness statements replicated; video recording contains biblical verse “Psalm 2:8” with theological references, not inducement – Held: No offence made out; FIR quashed [Paras 135-140].

FIR No. 538/2023 – Allegations of firing and extortion besides conversion – Complainant not competent under Section 4 (pre-2024) regarding conversion charges – Offences under U.P. Conversion Act quashed – IPC charges (Ss. 307, 386, 504) to be examined separately – SLP (Crl.) No. 8615/2024 de-tagged; interim protection continued [Paras 157-160].

Post-Charge-Sheet Quashing – Permissibility – Filing of charge-sheet does not bar exercise of writ or inherent jurisdiction – Courts can look into entire record to prevent abuse of process – Anand Kumar Mohatta v. State (NCT of Delhi), Abhishek v. State of M.P. applied [Paras 85-88].

Decision – FIR No. 224/2022 quashed for incurable statutory defect – FIR Nos. 47/2023, 54/2023, 55/2023 & 60/2023 quashed for duplication, delay and mala fides – FIR No. 538/2023 partly quashed (U.P. Conversion Act counts only) – IPC counts kept open – All consequential proceedings set aside – Appeals/Petitions allowed – No order as to costs [Paras 161-166].

Transfer of Suits – Patent Infringement vs. Groundless Threats – Section 25 CPC – Earlier suit under Section 106 Patents Act has independent cause of action – Delhi jurisdiction invoked via online purchase and delivery – Substantial overlap of parties, facts and issues – To avoid duplication and conflicting findings, infringement suit in Delhi transferred to Bombay – Cross transfer petition dismissed [Paras 9-14]

Transfer – Competing Petitions – Chronology and Overlap – Petitioner first filed Bombay suit (01.07.2025) for groundless threats; Respondent later filed Delhi infringement suit (07.07.2025) – Court notes substantial overlap in facts, law, and issues – Held appropriate to have both tried by the same forum to conserve judicial time and ensure consistency [Paras 10 & 12]

Patents – Groundless Threats (S.106) – Independence from Infringement Action – 1911 Act proviso negating groundless-threat action upon diligent prosecution of infringement suit was deleted in the 1970 Act – Hence, S.106 suit is an independent cause of action and can proceed irrespective of an infringement action [Para 9]

Jurisdiction – Patent Infringement – Online purchase and delivery at Delhi – Court records that Delhi jurisdiction was invoked by respondent through online purchase and delivery in Delhi, but transfers the Delhi suit to Bombay in the interests of justice given overlap and earlier Bombay filing [Para 10(ii), Para 12]

Precedents – Transfer to Avoid Conflicting Judgments – Chitivalasa Jute Mills v. Jaypee Rewa Cement, (2004) 3 SCC 85 – Applied – Where two suits between substantially the same parties arise out of the same transactions and evidence, separate trials may risk inconsistent findings; transfer allowed [Para 11]

Decision: Transfer Petition (C) No. 1983 of 2025 allowed – CS (COMM) No. 663 of 2025 (Delhi) transferred to Bombay High Court to be tried with Commercial IP (L) No. 19837 of 2025 – Injunction applications to be taken up and disposed of expeditiously – Transfer Petition (C) No. 2174 of 2025 dismissed [Paras 12-15]

Service Law – Recruitment to Public Posts – Writ Jurisdiction – Maintainability – Dispute relating to recruitment of Graduate Primary Teachers in Karnataka – Challenge raised by married women candidates regarding rejection of caste-cum-income certificates issued in the name of parents instead of husbands – Held: High Court erred in entertaining writ petitions directly when efficacious alternative remedy before the Karnataka State Administrative Tribunal (KSAT) was available – KSAT is the competent forum for adjudication of service and recruitment disputes under the Administrative Tribunals Act, 1985 – Constitution Bench ruling in L. Chandra Kumar v. Union of India applied – T.K. Rangarajan v. State of T.N. distinguished as an exceptional case invoking Article 142 – Division Bench rightly set aside Single Judge’s order and relegated parties to KSAT – Appeals dismissed – Interim orders made absolute [Paras 26-33, 35-39, 40-47, 49-50].

Maintainability – Writ under Articles 226 and 227 – When not maintainable – Availability of effective alternative remedy – Exceptions reiterated, namely (i) violation of fundamental rights, (ii) breach of natural justice, (iii) lack of jurisdiction, and (iv) challenge to vires of statute – None of these exceptions attracted in the present case, as the dispute concerns rejection of documents in a recruitment process – High Court not to act as court of first instance in such service matters [Paras 32-37].

Administrative Tribunals – Powers and Efficacy – KSAT vested with powers akin to High Court under the Administrative Tribunals Act, 1985 – Empowered to grant interim relief including ex parte orders, review its decisions, punish for contempt, and regulate its own procedure – Karnataka Administrative Tribunal Rules prescribe six-month period for disposal – Hence, remedy before KSAT held to be effective, efficacious, and expeditious [Paras 38-46].

Public Employment – Provisional and Final Select Lists – Provisional list confers no vested right – Direction to act upon provisional list dated 18.11.2022 would create administrative uncertainty – Validity of final select list dated 08.03.2023 to be decided by KSAT – State’s refusal to revive provisional list upheld [Para 48].

Interim Protection – Supreme Court’s prior interim orders noticed – (i) 03.01.2024: Stay of High Court’s directions and keeping appointments under 08.03.2023 list in abeyance; (ii) 22.01.2024: Permitting 11,494 appointees to continue subject to outcome; 481 posts reserved for married women candidates; (iii) 04.10.2024: State allowed to fill remaining vacancies while keeping 500 posts reserved – All interim directions made absolute – 500 reserved posts to be filled as per KSAT’s final verdict [Paras 21(A)-(C), 49].

Recruitment – Facts and Background – Notification dated 21.03.2022 for 15,000 Graduate Primary Teacher posts; exams held on 21–22.05.2022; results declared 17.08.2022; provisional list issued 18.11.2022; dispute arose over validity of certificates of married women candidates – Single Judge’s order dated 30.01.2023 directing inclusion of such candidates – Division Bench judgment dated 12.10.2023 setting aside Single Judge’s order and relegating parties to KSAT – Supreme Court upholds Division Bench view and directs expeditious disposal [Paras 3-20, 47, 49-51].

Decision – Appeals dismissed – Division Bench judgment affirmed – Matters relegated to Karnataka State Administrative Tribunal for final adjudication – Interim orders dated 03.01.2024, 22.01.2024, and 04.10.2024 made absolute – 500 reserved posts to abide KSAT’s final decision – Tribunal requested to decide within six months – Merits of eligibility and certificate issues left open [Paras 47, 49-51].

Property Law – Agreement to Sell – Transfer of Property Act, 1882 – Whether agreement to sell executed during lifetime of deceased transfers ownership – Held: No – Agreement to sell does not create interest or title in immovable property; ownership transfers only upon execution and registration of sale deed – As no conveyance existed during lifetime, the property remained vested in deceased and formed part of matruka property – Reliance placed on Suraj Lamp & Industries (P) Ltd. (2) v. State of Haryana, (2012) 1 SCC 656, and Rambhau Namdeo Gajre v. Narayan Bapuji Dhotra, (2004) 8 SCC 614 [Paras 7–10].

Mohammedan Law – Matruka Property – Definition and Devolution – “Matruka” means property (movable or immovable) left behind by a deceased Muslim – Held: Such property devolves first to satisfy debts and legacies (limited to one-third of estate) and remainder distributed among heirs as per Quranic injunctions and Mulla’s Principles – Wife being a sharer entitled to one-fourth share in absence of child or grandchild; balance devolves on residuaries – Cited Jamil Ahmad v. Vth ADJ, Moradabad, (2001) 8 SCC 599 and Trinity Infraventures Ltd. v. M.S. Murthy, 2023 SCC OnLine SC 738 [Paras 8–15].

Inheritance – Nemo Dat Quod Non Habet – Principle – Held: A person cannot transfer a better title than he possesses – Widow who held only one-fourth share could not convey ownership of entire estate – Sale deed executed beyond her legal share invalid to that extent [Para 15].

Civil Procedure – Second Appeal – Section 100 CPC – When no substantial question of law arises, High Court must dismiss appeal in limine with reasons – Though High Court examined merits after so finding, no prejudice caused as conclusion consistent with law – Referred Surat Singh v. Siri Bhagwan, (2018) 4 SCC 562; Hasmat Ali v. Ameena Bibi, 2021 SCC OnLine SC 1142 [Para 5].

Language of Judgments – Translation Quality – Observed with concern the poor translation of trial court judgment from vernacular to English – Emphasized need for accuracy since words and punctuation bear decisive legal implications – Concern earlier echoed in Chairman, Managing Committee v. Bhaveshkumar Manubhai Parakhia (Order dated 18.03.2025) [Para 17].

Decision: Appeals dismissed – View taken by First Appellate Court and High Court upheld – Property in question forms part of matruka property – Wife entitled to 1/4th share; remaining 3/4th to devolve per Mohammedan inheritance law – No interference warranted – No order as to costs [Paras 15–18].

Constitutional Law – Power of High Court – Direction for CBI Investigation – Limits of Jurisdiction – High Court, while hearing an intra-court appeal against a Single Judge’s order in recruitment matters, converted the appeal into suo motu PIL and directed CBI to conduct a preliminary inquiry – Held: High Court exceeded its jurisdiction – Exercise of power to order CBI inquiry under Article 226 permissible only where sufficient material exists disclosing prima facie commission of offence – Power to be exercised sparingly, cautiously, and in exceptional circumstances where fairness of investigation or public confidence is at stake – No such material existed here – Directions unsustainable [Paras 9–14, 18–24].

Public Employment – Recruitment Irregularities – Challenge to selection process for various posts in Legislative Council and Assembly Secretariat of U.P. – Allegations of favoritism and manipulation by private recruiting agencies – Writ petitions contained no prayer for CBI inquiry – Division Bench acted suo motu without foundation or pleading – Held: Ordering CBI inquiry based on “doubts” or “assumptions” violates settled principles – Directions quashed [Paras 15–21, 23].

Judicial Review – Suo Motu Public Interest Litigation – Scope – High Court, while exercising appellate jurisdiction, could not convert pending special appeal into suo motu PIL – Such action not in consonance with rules or judicial propriety – Matter left to Chief Justice of High Court to examine procedure and registry’s action in this regard [Paras 18–19, 25].

CBI Inquiry – Principles Reiterated – Direction for CBI investigation to be last resort – Permissible only when: (i) prima facie material discloses cognizable offence, (ii) local police incapable of impartial probe, (iii) involvement of high-ranking officials or systemic failure, or (iv) case has national ramifications – Mere allegations or administrative irregularities do not justify CBI inquiry – High Court’s assumption-based approach deprecated [Paras 10–14, 21–23].

Recruitment Process – Role of Specialized Agency – Following Sachin Kumar v. DSSSB (2021) 4 SCC 631, Single Judge directed future Class III recruitments in U.P. Legislative Assembly/Council to be conducted by U.P. Subordinate Services Selection Commission and not private agencies – Division Bench should have confined adjudication to legality of that direction – CBI inquiry beyond pleadings and scope of appeal [Paras 3–5, 17, 24–25].

Decision – Appeals allowed – High Court’s orders dated 18.09.2023 and 03.10.2023 set aside – Direction for CBI preliminary inquiry and registration of suo motu PIL quashed – Division Bench requested to hear Special Appeal Defective No. 485 of 2023 on merits in accordance with law – No opinion on merits expressed – Pending applications disposed of [Paras 24–25].

Environmental Law – Firecrackers in Delhi–NCR – Temporary relaxation on “test case” basis – Supreme Court permits sale and use of only NEERI-approved green crackers at designated locations for a limited window (sale: 18–20 Oct 2025 – use: 6–7 AM & 8–10 PM on the day before and on Diwali) – Ban on barium-containing crackers, series/laris, e-commerce sales and inflow from outside NCR – Strict patrols, QR-code verification, random sampling, licence renewals for the limited period, and AQI/soil/water monitoring directed – Rationale: balance right to life and health with livelihood/festive interests; prior Delhi–NCR ban in 2024 distinguished as both GNCTD and Union now seek calibrated relaxation – Directions modelled on Arjun Gopal (2018) regime – Test-case relaxation only for specified period [Paras 1–4, 12–14, 18–24].

Right to Life vs. Profession – Court reiterates primacy of health and environment over commercial/festive considerations – While acknowledging cultural practice of bursting crackers, uncontrolled use cannot be permitted to cause short/long-term health damage – Balance struck via narrow relaxation with strict compliance and enforcement [Paras 1–3, 16–20].

Green Crackers – NEERI formulations – Court notes NEERI/CSIR work cutting particulate emissions by 30–80% through zeolites, water-releasing molecules, and metallic composites; barium banned in India and replaced by strontium/potassium – NEERI SOP for manufacturer registration, product-wise approvals, QR codes; concern over QR misuse flagged – Enforcement directed via testing and penal action for violations [Paras 12–13, 14(A)(i), 14(C)(iii)-(v), (vi)-(vii)].

Operational Directions – Sale only 18–20 Oct 2025 at locations identified by District Collectors/Commissioners with police/SPCB patrols – Use only two time slots on two days (pre-Diwali and Diwali) – Confiscation of non-approved products; prohibition on e-commerce; no series/laris; no inflow from outside NCR; renewal of expired/cancelled trader licences for stipulated period – CPCB/SPCBs to monitor AQI 14–25 Oct 2025 and collect soil/water samples; report to Court – Relaxation expressly on “test case” basis [Para 24(A)–(M)].

Earlier Ban & Data – 2024 complete ban by GNCTD (14.10.2024 to 01.01.2025) and its expansion to entire NCR (19.12.2024) noted; present relaxation sought by GNCTD and Union distinguishes current context – Court records that AQI differences between 2018 and 2024 were not substantial (except Covid period), supporting calibrated approach with stringent safeguards [Paras 11, 21, 23–24].

Decision: Limited, strictly regulated relaxation granted – Only NEERI-approved green crackers – Detailed enforcement, monitoring, and reporting mandated – Relaxation confined to specified days/hours and expressly on test-case basis; IAs to be listed after three weeks for further directions [Paras 24–25].