Case Details: Sree Mugambikai Company vs. Assistant Commissioner (ST) - [2026] 182 taxmann.com 342 (Madras)

Judiciary and Counsel Details

• C.Saravanan, J.
• K. Senguttuvan for the Petitioner.
• Mrs.P.Selvi, Govt. Adv. for the Respondent.

Facts of the Case

The petitioner was a taxpayer who received a show cause notice in DRC-01 for excess claim of input tax credit (ITC) and filed a reply contesting the demand. After considering the reply, the jurisdictional officer passed an order confirming the demand. The order was challenged by filing a writ petition instead of a statutory appeal under Section 107 of the CGST Act/Tamil Nadu GST Act. It was submitted that the writ was filed due to delay in statutory filing and sought relief against the confirmed demand. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the petitioner ought to have filed a statutory appeal against the impugned order in a timely manner. The Court observed that in similar circumstances, belated appeals were permitted subject to pre-deposit of a portion of the disputed tax. To balance the interests of both parties, the Court granted liberty to the petitioner to file an appeal before the Appellate Authority within 30 days, subject to depositing 50% of the disputed tax. The Court directed that, upon compliance with these stipulations, the Appellate Authority shall adjudicate the appeal on merits without reference to limitation.

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Case Details: Ratnank Mishra vs. High Court of Judicature at Allahabad [2025] 181 taxmann.com 751 (SC)

Judiciary and Counsel Details

• J.K. Maheshwari & Vijay Bishnoi, JJ.
• Paramjit Singh Patwalia, Sr. Adv., Anil Kumar, Gunjesh Ranjan, Ms. Deveshi Chand, Advs., Nischal Kumar Neeraj & Shantanu Sagar, AORs for the Appellant.
• Ms. Preetika Dwivedi, AOR, Abhisek Mohanty, Ansh Rajauria & Anupam Mishra, Advs. for the Respondent.

Facts of the Case

In the instant case, the appellants were appointed by the Chief Justice of the High Court to the posts of Operator-cum-Data Entry Assistants / Routine Grade Clerks on an ad hoc basis, in exercise of the powers conferred under Rules 8(a)(i), 41 and 45 of the 1976 Rules.

The appellants were denied regularisation despite several similarly situated employees having been regularised from time to time. The appellants contended that they were singled out without any reasonable justification and were unfairly denied regularisation.

The High Court, by the impugned order, held that since the post of “Routine Grade Clerk” had been declared a “dead cadre”, the appellants were not entitled to regularisation. It was, however, noted that numerous employees identically appointed as Operator-cum-Data Entry Assistants / Routine Grade Clerks under orders of the Chief Justice of the High Court, in exercise of powers under Rules 8(a)(i), 41 and 45 of the 1976 Rules, had been regularised.

Supreme Court Held

The Supreme Court observed that merely because appointment orders of employees contained different stipulations regarding the nature of appointment, such as whether it was labelled ad hoc or otherwise, or whether it contained a condition regarding an examination, could not be a rational basis for differential treatment for the purpose of regularisation when the channel of appointment was identical.

It was further held that such a distinction, based solely on stipulations contained in the appointment letters, when the nature of work performed was identical, violated the fundamental principle that equals must be treated equally, and that persons similarly circumstanced should not be treated differently without a rational and intelligible differentia.

The Court also observed that the High Court, being a constitutional court, was expected to uphold the principles of equality and fairness in its own administrative functioning and to exemplify the standards of a model employer. The denial of regularisation to the appellants, when similarly placed persons appointed through the same channel had been regularised, constituted a violation of Articles 14, 16 and 21 of the Constitution.

Accordingly, the Supreme Court held that the impugned order of the High Court was liable to be set aside and, in exercise of its inherent powers under Article 142, directed that the appellants be regularised.

List of Cases Reviewed

• High Court of Judicature at Allahabad, Lucknow Bench in SA-411-2015, dated 14-10-2015 (para 34) set aside.

List of Cases Referred to

• Secretary, State of Karnataka v. Umadevi 2006 taxmann.com 2495 (SC) (para 6)
• Regularization of Class IV Employees of the High Court of Judicature at Allahabad, In re [Neutral Citation No. – 2013:AHC:179951-FB] (para 21).

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New Labour Codes and Gratuity Accounting: Actuarial Re-measurement or Past Service Cost?

Introduction

The implementation of the “New Labour Codes” in India, have compelled several organisations to revisit their salary structures, particularly due to the change in the definition and proportion of “wages”. These changes have a direct impact on employee benefit obligations such as gratuity, leave encashment, and other defined benefit plans governed by Ind AS 19, Employee Benefits. A key accounting question that arises due to the change in the definition of wages is whether the resulting increase in wages should be treated as a change in actuarial assumptions, or a plan amendment resulting in past service cost?

1. Minimum 50% of total remuneration to be treated as wages under the New Labour Codes

The new Labour Codes have mandated that minimum 50% of total remuneration should include three components, “Basic Pay”, “Dearness Allowance” and “Retaining allowance”, which are collectively referred to as ‘Wages’. If wages are lower than 50% of total remuneration, then it is presumed that wages constitute 50% of total remuneration.

2. Key terminology and definition under Ind AS 19

To understand how wages are to be accounted for under the New Labour Codes, it is important to first get familiar with the key terms and definitions prescribed under Ind AS 19.

2.1. Actuarial gain or loss under defined benefit plan

Actuarial gains and losses are changes in the present value of the defined benefit obligation resulting from:

(a) experience adjustments (the effects of differences between the previous actuarial assumptions and what has actually occurred) and

(b) the effects of changes in actuarial assumptions.

2.2. Past service cost under defined benefit plan

Past service cost is the change in the present value of the defined benefit obligation for employee service in prior periods, resulting from a plan amendment (the introduction or withdrawal of, or changes to, a defined benefit plan) or a curtailment (a significant reduction by the entity in the number of employees covered by a plan).

3. Whether increase in wages due to New Labour Code is to be treated as change in actuarial assumptions, or a plan amendment resulting in past service cost?

A change in wages can arise from two different aspects. One aspect relates to a revision in the expected rate of future salary increases compared to earlier assumptions, which constitutes a change in actuarial assumptions. The other aspect relates to a modification in the salary structure, where the manner in which salary increases are allocated among different components is altered, which constitutes a plan amendment.

The impact of these two aspects should be identified separately and accounted for according to the applicable accounting requirements for changes in actuarial assumptions and plan amendments.

Let us understand the recognition of increased wages among actuarial gain/loss and plan amendment with help of a case study.

Click Here To Read The Full Story 

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Notification G.S.R. 42(E); Dated: 13.01.2026

1. Introduction

Ministry of Corporate Affairs (MCA) has notified amendments to the rules governing the appointment of part-time members of the National Financial Reporting Authority (NFRA).

2. Amendment To NFRA Appointment Rules

The MCA has issued the NFRA Appointment of Part-time Members (Amendment) Rules, 2025, amending the rules notified in 2022. The amendment substitutes the entries specified in Rule 2 of the principal rules.

3. Updated List Of Part-Time Members

As per the amendment, the revised list of NFRA part-time members includes:

• Shri Balamurugan D, Joint Secretary, MCA
• Shri Anand Mohan Bajaj, Deputy Comptroller and Auditor General of India
• Ms. Sudha Balakrishnan, Chief Financial Officer, Reserve Bank of India
• Shri Jeevan Sonparote, Executive Director, Securities and Exchange Board of India

4. Institutional Representation

The revised composition ensures representation from key regulatory and oversight institutions, including the MCA, CAG, RBI, and SEBI, supporting coordinated supervision over audit and financial reporting standards.

5. Conclusion

The revision of NFRA’s part-time membership reflects MCA’s efforts to keep the Authority’s composition current and representative. The updated appointments are expected to strengthen NFRA’s role in audit quality oversight and financial reporting regulation in India.

Click Here To Read The Full Notification 

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Circular No. IFSCA/AIF/218/2025-Capital Markets, Dated 16.01.2026

1. Introduction

International Financial Services Centres Authority (IFSCA) has prescribed additional disclosures and procedural requirements for scheme filings by Registered Fund Management Entities (FMEs) authorised for Third-Party Fund Management.

2. Applicability To Registered FMEs

IFSCA has clarified that FMEs undertaking Third-Party Fund Management must file scheme applications in the format and with the documents prescribed under the IFSCA circular on “Ease of Doing Business, Filing of Schemes or Funds” dated April 5, 2024.

3. Additional Third-Party Manager Disclosures

In addition to the standard filing requirements, FMEs are required to submit specific details of the third-party fund manager, including its legal name, registered office address, and proof of regulatory registration or licence in its home jurisdiction.

4. UBO And Key Personnel Information

The circular also mandates submission of a Ultimate Beneficial Owner (UBO) “look-through” chart. Further, profiles of board members or designated partners, along with key managerial personnel (KMPs) of the third-party fund manager, must be disclosed.

5. Conclusion

The additional disclosure and process requirements aim to enhance transparency, regulatory oversight, and governance in Third-Party Fund Management structures. These measures are expected to strengthen compliance standards while supporting IFSCA’s ease-of-doing-business framework.

Click Here To Read The Full Circular 

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Circular No. HO/47/11/11(3)2025-MRD-POD2/I/2765/2026, Dated 16.01.2026

1. Introduction

Securities and Exchange Board of India (SEBI) has introduced a Closing Auction Session (CAS) in the equity cash segment to improve fairness, transparency, and efficiency in the discovery of closing prices in the securities market.

2. Objective Of The Closing Auction Session

The CAS is aimed at ensuring a more robust and manipulation-resistant closing price discovery mechanism. By aggregating buy and sell orders at the close of trading, the session seeks to reflect true market demand and supply.

3. Change In Closing Price Methodology

Under the new framework, the closing price for derivative-linked stocks will be determined through the Closing Auction Session. This marks a shift from the existing Volume Weighted Average Price (VWAP)-based methodology, aligning the closing price more closely with actual market consensus.

4. Modification Of Pre-Open Auction Framework

Alongside the introduction of CAS, SEBI has aligned and modified the framework governing the pre-open auction session. These changes aim to harmonise auction mechanisms at both the opening and closing of the trading day, enhancing overall market efficiency.

5.Conclusion

The introduction of the Closing Auction Session represents a significant reform in India’s equity market structure. To be implemented in a phased manner from August 3, 2026, the new framework is expected to strengthen price discovery, reduce volatility at market close, and enhance investor confidence.

Click Here To Read The Full Circular 

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PR No.08/2026, Dated 16.01.2026

1. Introduction

Securities and Exchange Board of India (SEBI) has introduced the Single Window Automatic and Generalised Access for Trusted Foreign Investors (SWAGAT-FI) framework to simplify registration and compliance for Foreign Portfolio Investors (FPIs) and Foreign Venture Capital Investors (FVCIs).

2. Objective Of The SWAGAT-FI Framework

The SWAGAT-FI framework is designed to streamline access for foreign investors by enabling a unified and automatic registration mechanism across multiple investment routes, thereby reducing procedural complexity.

3. Unified Registration And Simplified Compliance

Under the new framework, eligible FPIs and FVCIs can obtain a single registration for multiple market segments. The framework minimises repetitive documentation and overlapping compliance requirements, improving operational efficiency for investors.

4. Ease Of Doing Business For Foreign Investors

By simplifying onboarding and compliance processes, the SWAGAT-FI framework aims to enhance ease of doing business and improve India’s attractiveness as a global investment destination, particularly for trusted foreign investors.

5. Conclusion

The introduction of the SWAGAT-FI framework reflects SEBI’s continued efforts to modernise regulatory processes and facilitate foreign investment. Effective from June 1, 2026, the framework is expected to significantly reduce compliance burdens while strengthening India’s capital market ecosystem.

Click Here To Read The Full Press Release 

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Circular No. A.P. (DIR Series) Circular No. 20, Dated 16.01.2026

1. Introduction

Reserve Bank of India (RBI) has notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, following a comprehensive review of the existing regulatory framework under the Foreign Exchange Management Act, 1999.

2. Objective Of The New Regulations

The revised regulations aim to promote ease of doing business in cross-border trade by simplifying procedures and reducing compliance burdens, with a particular focus on small exporters and importers.

3. Empowerment Of Authorised Dealers

Under the new framework, authorised dealers have been empowered with greater operational flexibility to facilitate faster processing and more efficient handling of export and import transactions, improving service delivery to trade participants.

4. Supersession Of Existing Directions

The 2026 Regulations will supersede the existing master directions and circulars issued under FEMA relating to export and import of goods and services, ensuring a consolidated and updated regulatory structure.

5. Conclusion

Effective from October 1, 2026, the new FEMA Export and Import Regulations mark a significant step towards modernising India’s foreign exchange regime. The revised framework is expected to enhance compliance clarity, operational efficiency, and support growth in international trade.

Click Here To Read The Full Circular 

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Judiciary and Counsel Details

• Shekhar B. Saraf & Manjive Shukla, JJ.
• Surangama Sharma & Jagriti Vashisht for the Petitioner.

Facts of the Case

The petitioner challenged the action of the respondent authorities relating to the detention of its goods and vehicle, along with the consequential order passed under Section 129(3) of the CGST Act. The petitioner contended that it was the owner of the goods and, therefore, the goods were liable to be released in accordance with Section 129(1)(a) of the CGST Act. However, the authorities proceeded to compute tax and penalty under section 129(1)(b). It was further argued that the issue was squarely covered by earlier decisions of the Allahabad High Court, particularly in Halder Enterprises v. State of U.P., wherein it was held that in cases where the owner of goods comes forward, release must be governed by Section 129(1)(a).

High Court Held

The High Court, upon examining the record and the precedents relied upon, held that there was no justification to take a view different from that already settled in Halder Enterprises. It was observed that since the petitioner was the owner of the goods, the release ought to have been governed by Section 129(1)(a) of the CGST Act. Accordingly, the impugned order passed under Section 129(1)(b) was quashed and set aside, and the respondent authorities were directed to re-compute and release the goods in terms of Section 129(1)(a) on the basis of the valuation declared in the invoice, within the stipulated time.

List of Cases Reviewed

• Halder Enterprises v. State of U.P. [2023] 157 taxmann.com 231 (Allahabad)/[2024] 101 GST 313 (Allahabad)/[2024] 80 GSTL 357 (Allahabad) (Para 7) followed

List of Cases Referred to

• Halder Enterprises v. State of U.P. [2023] 157 taxmann.com 231 (Allahabad)/[2024] 101 GST 313 (Allahabad)/[2024] 80 GSTL 357 (Allahabad) (para 5)
• S.K. Trading Co. v. Additional Commissioner Grade 2 (Appeal) [2023] 150 taxmann.com 102 (Allahabad)/[2023] 97 GST 1110 (Allahabad)/[2023] 74 GSTL 50 (Allahabad) (para 5).

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Notification no. FEMA 23(R)/2026-RB; dated: 13.01.2026

The RBI has notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026. The Regulations lay down norms relating to declaration of exports, the manner of receipt and payment, the time period for realization of exports, & set-off of export receivables against import payables. Further, it prescribes norms relating to the time period for making import payments, the import of gold and silver, & merchanting trade transactions. These regulations shall come into force w.e.f October 1, 2026.

The key provisions of the regulations include the following:

1. Declaration of Exports

An exporter of goods must furnish to the specified authority a declaration in the Export Declaration Form (EDF), specifying the amount representing the full export value of the goods at the time of export.
Where goods are exported through an Electronic Data Interchange (EDI) port, the Export Declaration Form (EDF) shall be deemed to have been submitted as part of the shipping bill.

Further, a traveller carrying personal effects, whether accompanied or unaccompanied, from India shall not be treated as an exporter for the purposes of these Regulations.

1.1 Time Limit for furnishing of Export Declaration Form to the specified authority

An exporter of services must furnish to the specified authority a declaration in the Export Declaration Form (EDF), specifying the amount representing the full export value of services, within 30 days from the end of the month in which the invoice for services is raised, subject to the following conditions:

(a) The exporter of services who has exported services to one or more recipients a month may submit a single EDF for all such exports.
(b) The exporter of services other than software may submit an EDF on or before the date of receipt of payment;
(c) The Authorised Dealer may, on a request from the exporter citing reasons for delay, extend the period for submission of EDF after satisfying itself about the reasonableness of the request.
(d) In the case of a non-EDI port for export of goods, or where the specified authority for export of services is other than an Authorised Dealer, the duly authenticated EDF must be forwarded by the specified authority to the respective Authorised Dealer.

2. Manner of Receipt and Payment

The receipts and payments for export and import of goods and services must be in the manner specified in the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023, as amended from time to time.

2.1 Authorised Dealer must make credit or debit to account of exporter/importer only after verifying genuineness

An authorised dealer must make a credit or debit to the account of an exporter or an importer for receipt of export proceeds or payments for import only after satisfying itself about genuineness of the transaction. Further, the AD must simultaneously close or update the relevant entry in the Export Data Processing and Monitoring System (EDPMS) or the Import Data Processing and Monitoring System (IDPMS).

3. Time Period for realisation of export proceeds

Under the extant norms, it is obligatory on the part of the exporter to realise and repatriate the full value of goods/software/services to India within 15 months from the date of export.
Under these Regulations, the amount representing the full export value (or reduced export value) of goods and services must be realised and repatriated by the exporter within the period as specified below:

(a) 15 months from the date of shipment in case of goods (other than goods exported to a warehouse outside India) and from the date of invoice in case of services;
(b) 15 months from the date of sale of goods from the warehouse in case of goods exported to a warehouse outside India;
(c) As per the payment terms of the contract, in case of project exports

Click Here To Read The Full Notification 

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