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Supreme Court Rejects Late Appeal Filed In Insolvency and Bankruptcy Matter.
While hearing an appeal by the Assistant Commissioner of Central Tax CGST, the Supreme Court dismissed a Revenue appeal under Section 62 IBC as time-barred, holding limitation cannot remain suspended until physical receipt of order.The matter is stemmed from out of corporate insolvency resolution proceedings against M/s Samyu Glass Private Limited. The Central Excise and Service Tax Department had initiated recovery proceedings for tax arrears exceeding ₹22.60 crores.Following the initiation of CIRP, the National Company Law Tribunal (NCLT), Hyderabad., approved a resolution plan that allocated a sum of ₹1,34,657 toward the tax dues. The Revenue challenged this plan before the National Company Law Appellate Tribunal (NCLAT), Chennai, which confirmed the NCLT's approval on August 2, 2023.The appellant subsequently filed a Civil Appeal before the Supreme Court under Section 62 of the Insolvency and Bankruptcy Code, 2016 (IBC) and contended that limitation should be computed from the date it physically received the certified copy of the NCLAT order.The Respondent raised a preliminary objection regarding limitation, pointing out that the appeal was presented on the 111th day after pronouncement.The Supreme Court has held that Section 62 provides an initial limitation period of 45 days, extendable by a maximum discretionary period of 15 days upon showing sufficient cause. The Apex Court further held that beyond this absolute outer ceiling of 60 days, the Supreme Court loses jurisdiction to condone any delay.Rejecting the argument that date of "Receipt of Order" permits a party to await physical collection at its leisure, the Apex Court held that allowing limitation to remain suspended until physical collection would render statutory timelines fluctuating and indefinite, while rendering Section 12(2) of the Limitation Act, 1963 redundant.The Court further clarified that, on reading the Section 12(2) alongside Section 238-A of the IBC, only the "Time Requisite" for obtaining a copy —the period between the filing of the application and the date the certified copy is ready—is excluded. Observing that 35 days of inaction before applying for a certified copy, followed by 41 days consumed after receiving the copy, and totaling 76 actionable days. The Apex Court held that any period of inaction prior to applying for a certified copy counts directly against the statutory limitation window.Thus, reaffirming precedents like V. Nagarajan v. SKS Ispat and Power Limited and Others and CA Ramchandra Dallaram Choudhary v. Adani Infrastructure and Developers Private Limited, the Apex Court emphasized that the IBC is an exhaustive self-contained code and strict timelines are essential to preserve asset value, maximize recovery, and prevent endless procedural delayIn conclusion, the Supreme Court dismissed the appeal as barred by limitation, ruling that the 60-day maximum statutory window under Section 62 IBC had expired and could not be extended.BENCH: Justice S.V.N. Bhatti and Justice N.V. Anjaria.
Supreme Court Rules Health Powders and Biscuit Not Taxable as Beverages
A dispute over the tax classification of 'GRD Powder' and 'GRD Mix', manufactured and sold by Cadila Health Care Ltd.The Commercial Tax Department of Madhya Pradesh argued that because product packaging directed consumers to mix the powder with milk or water, the products should be taxed at 10% as "Non-Alcoholic Drinks and Beverages" under Entry 20(ii), Part IV, Schedule II of the M.P. Commercial Tax Act, 1994.Cadila countered that since the goods were sold over the counter in "Powder and Biscuit" form, they did not constitute beverages and fell under the residuary entry, attracting an 8% tax rate.The High Court of Madhya Pradesh ruled in favor of Cadila, upholding the 8% residuary rate, however an appeal by the authorities made before the Supreme Court Division Bench.The Apex Court analyzed the matter and made important observations:The Apex Court emphasized that tax authorities are legally required to evaluate a product as it is supplied, as "Taxable Event is the Point of Supply", not by what it might become after purchase and held that Entry 20(ii) classifies goods by their physical characteristics rather than their end use. A powder mix remains taxable as a powder, regardless of whether a customer later dissolves it in milk or uses it to make solid food.Application of "Ejusdem Generis", the Apex Court while analyzing Entry 20(ii), noted that terms grouped alongside "beverages"—such as syrups, cordials, juices, and essences—all describe liquid substances. Applying the rule of ejusdem generis, the general term "beverages" must take color from its liquid companions and cannot be expanded to cover solid powders.Strict Construction and Residuary Entry: Taxing statutes must be interpreted strictly based on their plain text. Commodities that do not fit the specific description of a named entry automatically move to the residuary entry and cannot be forced into an ill-fitting category merely to collect a higher tax rate.The Supreme Court Division Bench, comprising Justice Manmohan and Justice Arun Palli, dismissed the Revenue's appeals and affirmed the High Court's decision and held that since GRD Powder and Mix exist as solids or powders at the point of sale, they cannot be categorized as beverages. The Apex Court held that the incidence of taxation is strictly determined by the physical form and nature of the product at the precise time of sale—the taxable event—rather than its eventual end use by the consumer. Bench: Justice Manmohan and Justice Arun Palli,
Supreme Court Bars Reassessment After Final Income Tax Settlement Order
The Supreme Court of India dismissed the appeal filed by the revenue through Asst Commissioner of IT ACIT against the Ms Omaxe Ltd.The dispute arose out of assessment proceedings for the Assessment Year (AY) 2006–07. Following a search and seizure operation under Section 132 of the Income Tax Act, 1961 in September 2005, the assessee, a public limited real estate developer, filed its return declaring a taxable income of ₹89.20 crores after claiming a housing project deduction of ₹78.99 crores under Section 80IB(10).While the regular assessment was pending, the company approached the Income Tax Settlement Commission (ITSC) under Section 245C for settlement of its tax liabilities.The ITSC passed a final settlement order under Section 245D(4) on March 17, 2008, determining the net taxable income at ₹89.38 crores after accepting an additional surrendered income of ₹18 lakhs and preserving the Section 80IB(10) deduction.About 2 years later, following a fresh survey under Section 133A, the Assessing Officer (AO) issued a reassessment notice under Section 148 alleging that commercial built-up areas in four projects exceeded statutory limits, making the Section 80IB(10) deduction disallowable.The AO subsequently completed reassessment under Section 147, disallowing the deduction and adding back ₹65.65 crores. Simultaneously, the Revenue moved the ITSC under Section 245D(6) to declare the settlement order void due to alleged misrepresentation, but the ITSC rejected the Revenue's application.The Delhi High Court quashed the reassessment notice and order, leading the Revenue to appeal to the Supreme Court.A Supreme Court Division Bench comprising Justice S.V.N. Bhatti and Justice N.V. Anjaria dismissed the Revenue's appeal and upheld the High Court's judgment.The Apex Court held that once an assessment attains finality through a settlement order under Section 245D(4), the statutory machinery under Chapter XIX-A permanently displaces the regular assessment powers of the Assessing Officer, and that the AO lacks statutory jurisdiction under Section 147/148 to reopen any aspect of an assessment year covered by an ITSC settlement order.The Apex Court held that the under Section 245-I an order passed by the Settlement Commission under Section 245D(4) is conclusive on all matters stated therein. The AO cannot assume parallel or appellate jurisdiction to review or reopen issues that fell within the purview of the settled assessment year.The Supreme Court reaffirmed that Chapter XIX-A constitutes a specialized alternate dispute resolution mechanism. The objective of settlement is the "Settlement of Liability" rather than the routine "Determination of Liability," creating a self-contained statutory framework that overrides regular assessment machinery under Sections 142 to 156.The "Crust and the Crumb" Doctrine: Describing the settlement framework, the Apex Court observed that both the Revenue and the assessee must take "the crust and the crumb together". The Revenue avoids prolonged litigation and collects tax upfront on voluntary disclosures, while the assessee secures immunity from penal interest and prosecution. Once this mutual bargain is concluded, neither party can selectively revive regular assessment channels.The Apex Court reaffirms the Exclusive Remedy under Section 245D(6) ifthe Revenue suspects a settlement was obtained through fraud or misrepresentation of facts, then the Revenue can approach the ITSC under Section 245D(6) to declare the order void.However, the Reassessment under Section 148 is completely unavailable as a backdoor mechanism to bypass the ITSC.Thus, the Supreme Court dismissed the Revenues appeal finding it to me without the merits, since the Revenue availed the remedy under Section 245D(6) of the Act, 1961 before the ITSC, resulting in the findings recorded in the Order dated 16.12.2011, which has become final.BENCH: Justice S.V.N. Bhatti and Justice N.V. Anjaria
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