Case Details: Shaik Abdulla vs. State of AP [2026] 186 taxmann.com 479 (Andhra Pradesh)

Judiciary and Counsel Details

• R. Raghunandan Rao & T.C.D. Sekhar, JJ.
• S. Appadhara Reddy for the Petitioner.

Facts of the Case

The petitioner challenged the GST assessment order passed by the jurisdictional authority on the ground that the said order did not contain the signature of the Assessing Officer, thereby rendering it invalid. It was contended that absence of signature on an assessment order constitutes a fundamental defect which cannot be cured. The petitioner further submitted that the order had not been served in the conventional manner and that the Department claimed service had been effected by uploading it on the portal, thereby causing procedural irregularity and prejudice. The Department contended that the writ petition suffered from inordinate delay and that such delay had not been properly explained. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that an assessment order which does not bear the signature of the Assessing Officer suffers from an inherent defect affecting its very validity, particularly in light of Sections 160 and 169 of the CGST Act, and is therefore unsustainable in law. The Court observed that such a defect cannot be treated as a mere procedural irregularity, as it goes to the root of the validity of the adjudication order itself. At the same time, balancing the interests of tax administration with the rights of the assessee, the Court held that the writ petition could be entertained subject to the petitioner depositing 20% of the disputed tax amount. Accordingly, the impugned assessment order was set aside and the matter was remanded to the Assessing Officer for fresh adjudication after granting due opportunity of hearing, subject to the petitioner depositing 20% of the disputed tax within six weeks.

List of Cases Reviewed

• Sathiah Ramesh v. Deputy Commissioner (State Tax) [2026] 183 taxmann.com 149 (Madras) (para 12) followed

List of Cases Referred to

• A V Bhanoji Row v. Asstt. Commissioner (ST) [2025] 170 taxmann.com 799/94 GSTL 430 (Andhra Pradesh) (para 3)
• SRK Enterprises v. Asstt. Commissioner [2023] 157 taxmann.com 93/82 GSTL 142/102 GST 450 (Andhra Pradesh) (para 3)
• SRS Traders v. Asstt. Commissioner ST [2024] 162 taxmann.com 430 (Andhra Pradesh) (para 4)
• Bambino Agro Industries Ltd v. State of Uttar Pradesh [2025] 181 taxmann.com 888/[2026] 105 GSTL 280 (Allahabad) (para 8)
• Sri Sai Ramachandra Agro Enterprises v. Dy. Asstt. Commissioner, (ST)-II [WP No. 5397 of 2026, dated 27-4-2026] (para 8)
• Sathiah Ramesh v. Deputy Commissioner (State Tax) [2026] 183 taxmann.com 149 (Madras) (para 12).

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Press Release no. 2026-2027/298; Dated: 20.05.2026

The Reserve Bank of India (RBI) has issued revised draft amendment directions on the ‘Conduct of Regulated Entities (REs) in Recovery of Loans and Engagement of Recovery Agents’.

The draft directions seek to strengthen borrower protection, improve accountability in recovery practices and prescribe clearer norms governing engagement of recovery agencies and agents by regulated entities.

1. Norms for Engagement of Recovery Agencies

The revised draft directions prescribe requirements relating to engagement of recovery agencies for recovery of loan dues.

Regulated Entities (REs) will be required to establish appropriate policies and due diligence mechanisms while appointing recovery agencies and agents to undertake recovery-related activities.

The framework seeks to ensure greater oversight and accountability in outsourced recovery operations.

2. Code of Conduct for Recovery Agents and Employees

The draft directions lay down a code of conduct applicable to:

• Recovery agents engaged by Regulated Entities; and
• Employees of banks and other regulated entities involved in recovery activities

The proposed framework aims to ensure professional, lawful and ethical conduct during recovery proceedings.

3. Disclosure of Recovery Agency Information

RBI has proposed disclosure requirements relating to recovery agencies engaged by regulated entities.

Borrowers may be provided with relevant information concerning authorised recovery agencies or recovery personnel to improve transparency and reduce risks of unauthorised or coercive recovery practices.

4. Fair Treatment of Borrowers During Recovery Process

The draft directions emphasise fair treatment of borrowers during the recovery process.

The framework seeks to ensure that recovery measures are undertaken in a manner that is:

• Fair and transparent
• Non-coercive
• Respectful of borrower dignity and privacy
• Consistent with prescribed conduct standards

The proposals are intended to strengthen customer protection in recovery-related interactions.

5. Technology-Based Mechanisms for Recovery

The revised draft directions also cover deployment of technology-based mechanisms for recovery of loan dues.

The framework contemplates use of digital systems and technology-enabled tools to facilitate efficient recovery processes while maintaining appropriate safeguards and compliance standards.

6. Objective of the Draft Amendment Directions

The revised draft directions aim to strengthen governance, transparency and borrower protection in loan recovery practices while improving accountability of recovery agents and regulated entities.

The proposals also seek to balance efficient recovery of dues with fair treatment of borrowers and responsible deployment of technology in recovery operations.

Click Here To Read The Full Press Release

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Consultation Paper; Dated: 19.05.2026

The Securities and Exchange Board of India (SEBI) has issued a consultation paper proposing changes to ease the framework for Straight Through Processing (STP) of trades.

The consultation seeks stakeholder feedback on measures aimed at improving efficiency, reducing costs and enhancing service delivery under the existing STP ecosystem.

1. Objective of the Consultation Paper

SEBI has stated that the consultation paper seeks comments on proposed enhancements to the existing STP framework with the objective of:

• Reducing transaction latency
• Lowering operational costs
• Improving efficiency in trade processing
• Enhancing service delivery for market participants

The proposal aims to modernise post-trade infrastructure and streamline communication between market intermediaries.

2. Proposal to Transition From STP Hub-Based Architecture

A key proposal under the consultation paper is the transition from the current centralised STP Hub-based architecture to a decentralised Application Programming Interface (API)-based framework.

Under the proposed model, communication and trade processing between market participants and service providers would be enabled through direct API connectivity rather than routing through a central STP Hub.

3. Proposed Benefits of API-Based Framework

The decentralised API-based architecture is expected to:

• Reduce processing delays and latency
• Improve operational efficiency
• Lower transaction and infrastructure costs
• Enhance service quality and system responsiveness
• Improve resilience by reducing dependency on a centralised framework

The proposal also seeks to support faster and more seamless processing of trade-related information.

4. Impact on Market Participants

The proposed framework is intended to improve operational efficiency for participants involved in trade processing while maintaining continuity in market operations.

The changes are expected to strengthen post-trade infrastructure and provide a more scalable and technology-driven processing environment.

5. Public Comments Invited

SEBI has invited comments and feedback from stakeholders on the consultation paper.

Comments may be submitted up to June 9, 2026.

6. Objective of the Proposal

The proposal aims to modernise and ease the STP framework through a more efficient, decentralised and technology-enabled trade processing mechanism while reducing costs and improving service delivery for market participants.

Click Here To Read The Full Update

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Adv. (CA.) Deep Agarwal – [2026] 186 taxmann.com 778 (Article)

The system of tax adjudication in India is built upon the foundational principles of fairness, natural justice, judicial discipline, and effective dispute resolution. Within this framework, the Income Tax Appellate Tribunal (ITAT) occupies a unique and revered position. Popularly referred to as the “Mother Tribunal,” the Tribunal has historically been regarded as the final fact-finding authority under the Income-tax Act, 1961. Its institutional motto “Nishpaksh Sulabh Satvar Nyay” (Impartial, Easy, and Speedy Justice) reflects the expectation that disputes reaching the Tribunal should ordinarily attain meaningful adjudication and closure.

In practical litigation, however, one often encounters a recurring phenomenon – matters are frequently “set aside” or remanded back to the Assessing Officer (“AO”) or the Commissioner of Income Tax (Appeals) [“CIT(A)”]. While remand may, in certain circumstances, serve the cause of justice, the larger jurisprudential question that arises is:

Can a matter truly be said to have been adjudicated when the Tribunal merely sets it aside despite the existence of sufficient material on record?

This issue assumes immense significance in income tax litigation where proceedings already span several years, and repeated remands often prolong uncertainty, increase costs, and dilute the very objective of judicial finality.

The Statutory Position of the Tribunal – Under Section 254 of the Income-tax Act, the Tribunal is empowered to pass “such orders thereon as it thinks fit.” the provision grants extremely wide powers to the Tribunal. Judicial precedents have recognised that the Tribunal possesses powers co-extensive with those of lower authorities in relation to fact-finding and adjudication.

The Tribunal is not merely an appellate body correcting procedural defects. It is expected to adjudicate disputes comprehensively, especially when all relevant materials are already available on record.

The importance of this role was emphasised by the Supreme Court in several judgments where it was held that the Tribunal, being the last fact-finding authority, must decide issues conclusively whenever possible instead of unnecessarily prolonging litigation.

1. When Setting Aside a Matter is Justified?

There can be no dispute that the power to remand is an important and necessary judicial tool. In many situations, setting aside a matter is not only justified but also essential to preserve the principles of natural justice. Income tax litigation frequently witnesses cases where assessments are completed ex parte under Section 144 of the Income-tax Act or appeals are dismissed by the CIT(A) without granting adequate opportunity of hearing to the assesse, specially in the faceless regime of income tax assessments and appeals. In such circumstances, the Tribunal may justifiably restore the matter to the lower authority for fresh adjudication.

Where books of account were never examined, documentary evidences were ignored, verification of facts is needed or relevant submissions were not filled at all, a remand order becomes a mechanism to ensure fairness. Such orders cannot be criticised as avoidance of adjudication because the factual foundation itself remains incomplete. A judicial authority cannot conclusively decide issues where the underlying facts have not been properly brought on record.

Therefore, in cases involving denial of opportunity or absence of factual verification, the Tribunal’s decision to restore the matter serves the larger cause of justice. It ensures that no assessee is condemned unheard and that the assessment process remains consistent with the principles of fair play.

Click Here To Read The Full Article

The post [Opinion] The Courage to Adjudicate | Upholding Nishpaksh Sulabh Satvar Nyay appeared first on Taxmann Blog.

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Case Details: E S I C vs. Minaxi Taxtiles Ltd. [2026] 186 taxmann.com 253 (HC-Gujarat)

Judiciary and Counsel Details

• Hemant M. Prachchhak, J.
• Sachin D. Vasavada for the Appellant.
• KV Gadhia for the Respondent.

Facts of the Case

In the instant case, the Respondent company was covered under ESI Act since 1995. It ran Unit No. 1 and, for expansion, constructed adjacent Unit No. 2. The appellant Corporation noticed that respondent had incurred labour expenses towards construction of new factory building and had spent about Rs. 23.46 lakhs on factory construction without paying contribution.

Notice was issued seeking recovery of contribution with interest. The ESI Court allowed the application filed by respondent and restrained Corporation from recovering contribution.

High Court Held

The High Court held that construction activity was carried out prior to commencement of manufacturing activity in new unit and, therefore, premises where construction activity was undertaken could not be termed as a factory within meaning of section 2(12) of Employees State Insurance Act, 1948.

Therefore recovery of contribution on wages paid to construction workers was not legally sustainable. Consequently, there was no infirmity or illegality in the impugned judgment and order passed by the ESI Court.

List of Cases Referred to

• Regional Director, ESI Corporation v. Patel Printing Press [2003] 2 GLH 425 (para 6.1).

The post No ESI Contribution on Construction Wages Before Manufacturing Begins | HC appeared first on Taxmann Blog.

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Editorial Team – [2026] 186 taxmann.com 804 (Article)

Global Financial Insights is a weekly feature for the Accounts and Audit Module subscribers of Taxmann.com. It provides you with the latest updates on financial reporting and auditing practices from across the globe. Here is this week’s financial update:

1. Financial Accounting Standard Board Issues Accounting Guidance on Environmental Credits

The Financial Accounting Standards Board (FASB) has issued a new Accounting Standards Update (ASU) introducing comprehensive guidance on the accounting and disclosure requirements for environmental credits and related obligations. The update is intended to address the lack of consistent accounting practices in this rapidly evolving area and applies to entities that generate, purchase, receive, or use environmental credits for regulatory compliance purposes.

The new guidance establishes when environmental credits should be recognised as assets and how they should be measured and presented in financial statements. Credits expected to be used for regulatory compliance or transferred through exchange transactions can be recognised as assets, while credits acquired for voluntary sustainability initiatives may need to be expensed as incurred.

The ASU also distinguishes between compliance and non-compliance environmental credits for subsequent measurement purposes. Credits held for compliance obligations will generally continue to be measured at cost, whereas other credits will be subject to impairment testing, with entities also being permitted in certain cases to adopt a fair value approach.

In addition to recognition and measurement requirements, the update introduces enhanced disclosure obligations, including information about how environmental credits are obtained, their intended use, accounting policies applied, and significant judgments involved in measurement.

The amendments will become effective for public business entities for annual periods beginning after 15th December 2027, while other entities will apply the guidance from periods beginning after 15th December 2028.

Source – Financial Accounting Standard Board

2. Financial Reporting Council Identifies Areas for Improving the Quality of Digital Financial Reporting

The Financial Reporting Council (FRC) has published its latest review of structured digital reporting practices among UK listed companies, highlighting opportunities to improve the quality, consistency, and usability of digitally tagged financial information.

Based on a review of annual reports of 30 listed companies, the report notes that structured digital reporting is now widely established across the UK market, with most entities producing compliant filings. However, the FRC observed recurring issues in the application of digital tags and reporting practices that may reduce the usefulness of financial data for investors, regulators, and other users.

The regulator emphasised that many of these shortcomings can be addressed through stronger internal review processes, clearer accountability over tagging decisions, and more effective use of existing guidance and reporting tools. The findings come at a time when structured financial data is becoming increasingly important for data-driven analysis and the growing use of artificial intelligence in investment and regulatory processes.

Looking ahead, the FRC intends to continue focusing on improving reporting quality by encouraging more accurate tagging aligned with the underlying accounting meaning, while also promoting greater accessibility and usability of structured reports.

Source – Financial Reporting Council

Click Here To Read The Full Article

The post [Global Financial Insights] FASB Environmental Credits and ISSB Updates appeared first on Taxmann Blog.

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Case Details: Principal Commissioner of Income-tax vs. Kross Diamonds (P.) ltd. [2026] 186 taxmann.com 345 (Delhi)

Judiciary and Counsel Details

• Dinesh Mehta & Vinod Kumar, JJ.
• Gaurav Gupta, SSC, Shivendra Singh, Yojit Pareek, JSCs & Surya Jindal, Adv. for the Appellant.
• Ram Naresh, Deepak Malik, Shivam Malik, M P.Rastogi, Advs. & Ms Kaushik for the Respondent.

Facts of the Case

The assessee was engaged in the business of dealing in diamonds. The assessee imported diamonds from various countries in accordance with the provisions of the Customs Act, 1962 and other relevant laws.

During the assessment proceedings, the Assessing Officer (AO) noted that the assessee had issued 6,358 cash sale bills of less than Rs. 2 lakhs each aggregating to Rs. 97 crores. He treated the corresponding purchase expenditure of Rs. 97 crores as unexplained on the ground that it was funded by cash from these retail sales and disallowed it.

The CIT(A) deleted the additions. The Tribunal also quashed the additions. The matter reached the Delhi High Court.

High Court Held

The High Court held that the AO had accepted that the purchases were genuine. All purchases were made through banking channels after payment of customs duties and were supported by purchase and import documents. Thus, the source of purchases cannot be said to be unexplained. The AO’s stand that the money in bank accounts had come through cash deposited from retail sales is misconceived. If an assessee is allowed or permitted to sell goods in cash, and there is no non-compliance with any statutory provision, the purchase cannot be disallowed. In any event, the assessee had an opening stock of Rs. 114.62 crores and had imported diamonds worth Rs. 97 crores.

Meaning thereby, he sold the diamonds he had obviously purchased for business reasons. The best case, which the AO could frame against the assessee, was that the identity of the sellers was not known or the persons to whom sales were made were not verifiable, but that by itself did not fall foul of any of the statutory provisions. Thus, the AO’s additions on account of cash sales were to be deleted.

List of Cases Reviewed

• Order of ITAT, Delhi in IT Appeal dated 18-12-2024 (para 13) affirmed

The post HC Deletes Section 69C Additions on Genuine Diamond Purchases Despite Cash Sales appeared first on Taxmann Blog.

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Case Details: Lupin Ltd. vs. State of Maharashtra [2026] 186 taxmann.com 766 (Bombay)

Judiciary and Counsel Details

• Anil L. Pansare & Raj D. Wakode, JJ.
• P. Shah, Sr. Adv., M. Raval & A. Potnis, Advs. for the Petitioner.
• M.I. Dhatrak & P.V. Navlani, Advs. for the Respondent.

Facts of the Case

The petitioner, a SEZ unit, filed applications seeking refund of unutilised Input Tax Credit (ITC), including Input Service Distributor (ISD) credit, under the zero-rated supply mechanism. The jurisdictional authorities rejected the refund claims on the ground that only the supplier making supplies to the SEZ unit was eligible to claim refund, and not the SEZ unit itself. The appellate authority affirmed the rejection, and further declined to follow the decision of the Gujarat High Court in Britannia Industries Ltd. v. Union of India on the ground that a Special Leave Petition against the said judgment was pending before the Supreme Court. The Department also contended that refund eligibility was contingent upon the services being used for authorised operations duly endorsed by the Specified Officer of the SEZ, which, according to the Department, had not been established on record. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that refusal to follow a binding High Court precedent merely on account of pendency of an SLP before the Supreme Court was legally unsustainable, as judicial discipline mandates adherence to binding precedents unless such judgments are stayed or set aside. The Court further held that, in terms of Section 54 of the CGST Act read with Section 16 of the IGST Act and Rule 89 of the CGST Rules, a SEZ unit is entitled to claim refund of unutilised ITC under the zero-rated supply mechanism, and such claims are required to be adjudicated in accordance with law. The Court also observed that the impugned orders failed to record any finding with respect to authorised operations and endorsement by the Specified Officer of the SEZ, as contemplated under the SEZ framework, thereby necessitating reconsideration of the matter. Accordingly, the impugned orders were quashed and the matter was remanded to the adjudicating authority for fresh adjudication in accordance with law.

List of Cases Reviewed

• Britannia Industries Ltd. v. Union of India [2020] 122 taxmann.com 32/42 GSTL 3 (Gujarat)(para 9), followed

List of Cases Referred to

• Britannia Industries Ltd. v. Union of India [2020] 122 taxmann.com 32/42 GSTL 3 (Gujarat) (para 5)
• Union of India v. Messrs Meghmani Organochem Ltd. [2025] 179 taxmann.com 342/112 GST 337 (SC) (para 6)
• CIT Vidarbha v. Smt. Godavaridevi Saraf 1978 (2) ELT (J 624) (Bom) (para 8).

The post SEZ Unit Entitled to Refund of Unutilised ITC Under Zero-Rated Scheme | HC appeared first on Taxmann Blog.

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Notification F. No. IBBI/2026-27/GN/REG141, Dated: 19.05.2026

Click Here To Read The Full Notification

The post IBBI Amends Valuation Framework Under CIRP | Liquidation | Pre-Pack Processes appeared first on Taxmann Blog.

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Case Details: Varaha Land (P.) Ltd., In re [2026] 186 taxmann.com 507 (AAR-KARNATAKA)

Judiciary and Counsel Details

• Kalyanam Rajesh Rama Rao, Member (Central Tax) & Sivakumar S. Itagi, Member (State Tax)

Facts of the Case

The applicant, engaged in the development of residential villa projects under a joint development agreement (JDA), allocated 75% share to itself and 25% to landowners and entered into separate agreements with buyers, one for the sale of an undivided share in land and another for the construction of villas. It further outsourced the actual construction work to a third-party contractor, while retaining contractual responsibility towards buyers for completion and delivery of villas, with consideration being received on a milestone basis before completion. It contended that since construction was outsourced, its activity did not constitute a taxable supply of construction service, and sought a determination on classification and valuation. The matter was accordingly placed before the Authority for Advance Ruling (AAR).

AAR Held

The AAR held that the agreement entered into by the applicant with customers for the construction of villas constituted an independent supply of service under Section 7 of the CGST Act read with the Karnataka GST Act, notwithstanding outsourcing of actual construction work, as outsourcing only represented the mode of performance and did not extinguish the applicant’s contractual obligation towards buyers. The Authority further held that the construction and sale arrangements were naturally bundled supplies with construction as the principal supply and were classifiable under Heading 9954(ia) of the GST rate notification rather than the general Heading 9954(xii), as consideration was received before completion of construction. It was further held that, for valuation under Section 15 of the CGST Act read with Notification No. 11/2017-Central Tax (Rate) dated 28-06-2017, the value of supply must be determined by deeming one-third of the total amount charged as attributable to land and the remaining as taxable value of construction service, irrespective of separate agreements for land and construction.

List of Cases Referred to

• State of Andhra Pradesh v. Larsen and Toubro Ltd. 2008 taxmann.com 1809 (SC) (para 5.1)
• Munjaal Manishbhai Bhatt v. Union of India [2022] 138 taxmann.com 117/92 GST 327/62 GSTL 262 (Gujarat) (para 5.3).

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