Case Details: Sical Logistics Ltd. vs. State Tax Officer - [2025] 181 taxmann.com 210 (Gujarat)

Judiciary and Counsel Details

• Bhargav D. Karia & Pranav Trivedi, JJ.
• Nitin K Mehta for the Petitioner.
• Ms Shrunjal Shah, AGP for the Respondent.

Facts of the Case

The petitioner was in the business of warehousing services and providing logistics services, challenged the issuance of demand orders relating to indirect tax dues. It underwent a corporate insolvency resolution process (CIRP), approved by the National Company Law Tribunal (NCLT). The approval order expressly recorded the extinction of all indirect tax dues for periods prior to the effective date and prohibited further proceedings for such claims. Despite this, the jurisdictional officer issued notices and passed demand orders, which were unsuccessfully appealed. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that in view of the NCLT approval and the binding effect under Section 31 of the Insolvency and Bankruptcy Code, 2016, no demands could be raised or continued for periods prior to the effective date. The court observed that claims not forming part of the approved resolution plan stood extinguished, and any proceedings in respect of such claims were impermissible. It interpreted Section 73 of the CGST Act to conclude that the impugned demand orders were unsustainable. Consequently, the writ petition was allowed and the demand orders were quashed.

List of Cases Reviewed

• Ghanashyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132/227 COMP CASE 251/166 SCL 237 (SC)
• Vaibhav Goel v. Dy. CIT [2025] 172 taxmann.com 601/255 COMP CASE 266/188 SCL 262 (SC)
• SREI Equipment Finance Ltd. v. Office of the Principal Commissioner, Central GST and Central Excise Commissionerate [2025] 179 taxmann.com 108/112 GST 142 (Gujarat) (para 8)followed

List of Cases Referred to

• Ghanashyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132/227 COMP CASE 251/166 SCL 237 (SC) (para 6)
• Vaibhav Goel v. Dy. CIT [2025] 172 taxmann.com 601/255 COMP CASE 266/188 SCL 262 (SC) (para 6.1)
• SREI Equipment Finance Ltd. v. Office of the Principal Commissioner, Central GST and Central Excise Commissionerate [2025] 179 taxmann.com 108/112 GST 142 (Gujarat) (para 6.2)

The post Indirect Tax Demands for Pre-Resolution Period Unsustainable Once Claims Extinguished by NCLT | HC appeared first on Taxmann Blog.

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Case Details: State of Gujarat vs. Chaganbhai Bhemabhai Damor - [2025] 181 taxmann.com 69 (HC-Gujarat)

Judiciary and Counsel Details

• A.S. Supehia & Ms Nisha M. Thakore, JJ.
• Ms Shruti Dhruve, AGP for the Appellant.
• Paresh J. Brahmbhatt for the Respondent.

Facts of the Case

In the instant case, the Respondent-workman was engaged on a monthly salary of Rs 1,750 and his services were terminated, which gave rise to reference proceedings. The Labour Court directed the appellant-State to reinstate the respondent-workman in service without back wages by setting aside his termination.

The Single Judge, by the impugned order, confirmed the award of the Labour Court. Thereafter, an appeal was made before the High Court.

The appellant contended that the Labour Court, as well as the Single Judge, had fallen into error in directing the reinstatement of the respondent by holding termination as illegal and in violation of the provisions of section 25F of the Industrial Disputes Act, 1947.

It was noted that the workman had not produced any documentary evidence or oral evidence in the form of his colleagues engaged at that time or any contemporaneous record to prove that he was actually engaged for more than 240 days in a year. Further, the workman had also not taken any plea of suppression of the muster roll.

On the other hand, the appellant department had categorically contended that, except for the period of 179 days, the workman was never engaged by them.

High Court Held

The High Court held that since the workman had miserably failed to establish that he was engaged for more than 240 days in a year, the Labour Court had fallen in gross error in directing the reinstatement of the respondent workman. Thus, the impugned order passed by the Single Judge was to be quashed and set aside.

List of Cases Referred to

• Samishta Dube v. City Board (1999) 3 SCC 14 (para 5)
• Bhuvnesh Kumar Dwivedi v. Hindalco Industries Ltd. (2014) 11 S.C.C. 85 (para 5.1)
• R.M. Yellatti v. Asst. Executive Engineer [2006] 2005 taxmann.com 2728 (SC) (para 9)
• Surendranagar District Panchayat v. Dahyabhai Amarsinh [2006] 2005 taxmann.com 2725 (SC) (para 10)
• Gauri Shanker v. State of Rajasthan [2015] 4 taxmann.com 1496 (SC) (para 17).

The post Reinstatement Unsustainable as Workman Failed to Prove 240 Days’ Service for Sec. 25F Protection | HC appeared first on Taxmann Blog.

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Bill No. XXXII of 2025, Dated: 08.12.2025

1. Background

The Government of India has introduced the Companies (Amendment) Bill, 2025, proposing significant amendments to Section 135 of the Companies Act, 2013, which governs Corporate Social Responsibility (CSR) obligations. The proposed changes seek to widen the CSR net and strengthen governance and expertise in CSR decision-making.

2. Lowering of CSR Applicability Thresholds

2.1 Proposed Eligibility Criteria

Under the Bill, a company will be required to comply with CSR provisions if, during the immediately preceding financial year, it meets any one of the following thresholds:

• Net Worth – ₹100 crore or more
• Turnover – ₹500 crore or more
• Net Profit – ₹3 crore or more

This represents a substantial expansion of the CSR framework to include smaller and mid-sized companies.

3. Current CSR Thresholds (Existing Law)

At present, Section 135 applies only if a company meets any of the following criteria during the immediately preceding financial year:

• Net Worth – ₹500 crore or more
• Turnover – ₹1,000 crore or more
• Net Profit – ₹5 crore or more

The existing regime does not mandate any specific experience requirement for CSR Committee members.

4. Mandatory CSR Expertise on CSR Committee

4.1 New Governance Requirement

The Bill proposes that the CSR Committee must include at least one director having extensive experience in CSR-related matters.

4.2 Objective

This requirement aims to:

• Improve quality, impact, and accountability of CSR projects
• Ensure informed decision-making in project selection, monitoring, and evaluation
• Move CSR from a compliance-driven exercise to a strategic and outcome-oriented function

This is a new statutory requirement and does not exist under the current framework.

5. Regulatory Intent

The proposed amendments seek to:

• Broaden CSR participation across a larger corporate base
• Enhance professional oversight and governance of CSR initiatives
• Improve effectiveness, credibility, and social impact of CSR spending
• Align corporate responsibility obligations with India’s developmental priorities

6. Implications for Companies

If enacted, companies should prepare to:

• Reassess CSR applicability under the revised financial thresholds
• Constitute or reconstitute CSR Committees to include a CSR-experienced director
• Build internal or external capacity for CSR strategy, implementation, and reporting
• Increase budgetary planning for CSR obligations at an earlier stage of growth

Companies newly brought within the CSR ambit will need to put systems, policies, and governance structures in place well in advance.

7. Next Steps

The Bill will be taken up for Parliamentary consideration and debate. The amendments will take effect once passed by Parliament and notified by the Government.

Click Here To Read The Full Update

The post Govt. Proposes Lower CSR Thresholds and Mandatory CSR-Experienced Director on CSR Committee appeared first on Taxmann Blog.

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Circular No. HO/42/36/12(4)2025-OIAE-IAD3, Dated: 11.12.2025

1. Regulatory Update

SEBI has deferred the implementation of Phase III of the Nomination Circular dated January 10, 2025, which had earlier been rescheduled to December 15, 2025. In view of operational challenges faced by market intermediaries and representations from stakeholders, SEBI has now postponed Phase III to a later date, which will be notified separately.

The circular comes into force immediately, but only for the purpose of deferring Phase III.

2. Key Clarifications

• Phase III implementation is deferred – The revised deadline of December 15, 2025 will no longer apply. A fresh implementation date will be announced separately.
• All other provisions remain unchanged – Phases I and II of the Nomination Circular, along with all other obligations, continue to apply as notified.
• Immediate effect – The deferral takes effect immediately upon issuance of the circular.

3. Regulatory Context

The Nomination Circular aims to strengthen investor protection by mandating nomination or opting out across securities market accounts, including demat accounts, mutual fund folios, and other investment holdings. Phase III was expected to address residual and legacy cases requiring enhanced system-level enforcement.

4. Regulatory Intent

The deferral reflects SEBI’s intent to:

• Allow intermediaries additional time to address system, process, and operational readiness
• Avoid disruption to investors due to premature enforcement
• Ensure smoother, uniform implementation across market infrastructure institutions and intermediaries

5. Implications for Market Intermediaries

Intermediaries should:

• Continue compliance with Phases I and II of the Nomination framework
• Pause implementation efforts specifically linked to Phase III
• Maintain readiness to implement Phase III once a revised timeline is notified
• Update internal compliance calendars and client communication accordingly

6. Implications for Investors

• No immediate change in nomination requirements beyond what is already applicable
• Existing nomination or opt-out statuses remain valid
• Further actions, if any, will be required only after SEBI notifies the revised Phase III date

Click Here To Read The Full Circular

The post SEBI Defers Phase III of Nomination Circular Beyond Dec 15, 2025 appeared first on Taxmann Blog.

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PR No. 83/2025, Dated: 11.12.2025

1. Overview

SEBI’s Indore Local Office is organising an Investor Service Camp to provide a single-window facility for resolving common investor service and grievance issues, in collaboration with key market infrastructure institutions and service providers.

2. Date, Time and Venue

• Date – December 16, 2025
• Time – 10:00 AM to 5:00 PM
• Venue – Pravasa Hotels, Indore

3. Who Is Participating

The camp is being conducted with support from:

• BSE and NSE
• CDSL and NSDL
• Leading RTAs (Registrar & Transfer Agents)

4. Services Available at the Camp

Investors will be able to access service desks for assistance on:

• RTA service requests (company/RTA-related investor servicing)
• KYC updation
• Nominee updation
• Dematerialisation
• Transmission (including investor/holder change due to death, succession, etc.)
• Name change/correction
• Queries and guidance related to SCORES and SMART ODR (dispute resolution)

5. What This Camp Helps With

• Faster, guided resolution of long-pending service requests
• On-the-spot support for common account hygiene actions like KYC/nomination updates
• Direction on the right process and next steps for SCORES/SMART ODR matters

Click Here To Read The Full Press Release

The post SEBI to Hold Investor Service Camp in Indore on Dec 16, 2025 appeared first on Taxmann Blog.

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PR No. 2025-2026/1684; Dated: 11.12.2025

1. Regulatory Background

The Reserve Bank of India (RBI) has amended its directions governing the maintenance and operation of Cash Credit (CC), Current, and Overdraft (OD) accounts by banks. The amendments aim to simplify account operations for smaller borrowers, strengthen fund discipline, and ensure that banking facilities are used strictly for authorised business purposes.

2. Relaxation for Customers With Exposure Below ₹10 Crore

Under the amended directions:

• Banks may open and maintain a Current Account or an Overdraft (OD) Account without any restriction for customers whose aggregate exposure across the banking system is less than ₹10 crore.

2.3 Significance

• This relaxation reduces compliance friction for MSMEs, small businesses, and individual borrowers.
• It removes earlier operational constraints linked to consortium or multiple banking arrangements for such customers.
• Banks gain greater flexibility in offering transaction banking facilities to low-exposure customers.

3. Time Limit for Transfer From Collection Accounts

The amended framework mandates tighter fund movement controls:

• Funds credited into collection accounts must be transferred within two working days.
• Such funds must be remitted to the customer’s CC account, Current account, or OD account, as applicable.

3.1 Objective

• Prevents parking or misuse of funds in collection accounts
• Improves cash flow transparency and monitoring
• Ensures timely credit to operative accounts used for business activities

4. Restriction on Use of Accounts

RBI has reiterated that banks must ensure:

• Each CC, Current, or OD account is used exclusively for transactions related to the customer’s authorised business activities
• No unrelated, personal, or unauthorised transactions are permitted through these accounts

4.1 Compliance Focus

This measure strengthens:

• End-use monitoring
• Risk management and fraud prevention
• Alignment with KYC, AML, and account-usage controls

5. Regulatory Intent

The amendments seek to:

• Ease banking operations for small and mid-sized borrowers
• Improve discipline in fund flows
• Reduce complexity while maintaining strong supervisory safeguards
• Ensure that credit and transaction accounts serve their intended commercial purpose

6. Implications for Banks

Banks should:

• Update account opening and exposure-tracking systems to reflect the ₹10 crore threshold
• Monitor timely remittance of funds from collection accounts
• Strengthen transaction monitoring to ensure authorised-use compliance
• Revise internal SOPs, customer communication, and staff training

Non-compliance may attract supervisory observations or regulatory action.

7. Impact on Customers

• Customers with exposure below ₹10 crore benefit from simpler account operations
• Businesses must ensure proper segregation of transactions and timely fund movement
• Misuse of accounts may result in restrictions or corrective action by banks

Click Here To Read The Full Press Release

The post RBI Allows Unrestricted Current | Cash Credit | Overdarft Accounts for Exposure Below Rs. 10 Crore appeared first on Taxmann Blog.

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Case Details: Rikhab Chand Jain vs. Union of India - [2025] 180 taxmann.com 773 (SC)

Judiciary and Counsel Details

• Dipankar Datta & Aravind Kumar, JJ.
• Ms Chitrangda Rastravara, AOR, Anirudh Singh, Abhijeet Singh, Aishwary Mishra, Dhananjai Shekhawat, Ms Sakshi Aggarwal, Ms Pearl Pundir, Dashrath Singh, Advs. & Yuvraj Singh, Adv, for the Appellant.
• Raghvendra P. Shankar, A.S.G., Amit Sharma II, Raman Yadav, Advs. & Arvind Kumar Sharma, AOR for the Respondent.

Facts of the Case

The appellant, challenged an order of confiscation and penalty passed by the Customs, Excise and Gold Appellate Tribunal (CEGAT) in respect of alleged smuggled silver. The CEGAT confirmed the confiscation but reduced the penalty from Rs. 50,000 to Rs. 30,000. The appellant approached the High Court under writ jurisdiction, contending illegality of the CEGAT order. The writ petition was dismissed on the ground that the appellant had failed to pursue the alternate appellate remedy available. The matter was accordingly placed before the Supreme Court.

Supreme Court Held

The Supreme Court held that where an equally efficacious remedy exists, invocation of writ jurisdiction is not maintainable. The Court observed that the appellant had a remedy by way of a reference before the High Court against the CEGAT order, which was sufficient and legally adequate. The appellant’s attempt to invoke writ jurisdiction constituted a misadventure and did not justify interference. Consequently, the Supreme Court upheld the High Court’s order, confirming that the writ petition was rightly dismissed.

List of Cases Referred to

• State of Uttar Pradesh v. Md. Nooh AIR 1958 SC 86 (para 7)
• Titaghur Paper Mills v. State of Orissa (1983) 2 SCC 433 (para 7)
• Godrej Sara Lee v. Excise and Taxation Officer-cum-Assessing Authority 2023 SCC OnLine SC 95 (para 7)
• Thansingh Nathmal v. A. Mazid, Superintendent of Taxes AIR 1964 SC 1419 (para 10)
• A. V. Venkateswaran v. Ramchand Sobhraj Wadhwani 1961 taxmann.com 4 (SC) (para 12).

The post Writ Against CEGAT Order Not Maintainable When Alternate Remedy Exists | SC appeared first on Taxmann Blog.

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Case Details: Rivera Enterprises vs. Commercial Tax Officer (STO) [2025] 181 taxmann.com 216 (Madras)

Judiciary and Counsel Details

• C. Saravanan, J.
• K. Sureshkumar for the Petitioner.
• Mrs K. Vasanthamala, GA for the Respondent.

Facts of the Case

The petitioner, challenged the assessment and DRC-13 recovery for interest on belated IGST input tax credit (ITC). It was submitted that the proceedings had initially commenced through GST ASMT-10, invoking Section 16(4) of the CGST Act, for reversal of ITC, and that the non-reversal of such ITC had resulted in the issuance of DRC-01 and the subsequent impugned order. It was contended that an earlier writ had regularised the belated availment of ITC. Any recovery of interest under DRC-13 predicated on the premise that the ITC had not been regularised was arbitrary and lacked justification. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the belated IGST ITC had already been regularised by the prior writ order and, therefore, the impugned assessment and DRC-13 recovery of interest on such ITC was arbitrary. The Court noted that the amount specified in the impugned order corresponded to the ASMT-10 figure. It was further observed that the authorities were required to reconsider the recovery in the light of the earlier writ order, ensuring that no interest is levied on ITC that has been regularised. The Court quashed the DRC-13 recovery of interest and remanded the matter for fresh consideration, in accordance with Sections 16, 50, and 79 of the CGST Act.

List of Cases Reviewed

• Rivera Enterprises v. Deputy State Tax Officer, Chengalpattu [WP. No.16289 of 2025, dated 2.7.2025] (para 7) followed

List of Cases Referred to

• Rivera Enterprises v. Deputy State Tax Officer, Chengalpattu [WP. No.16289 of 2025, dated 2.7.2025] (para 3)
• Seeniselvam v. Regional Passport Officer [W. P. (MD) No. 25081 of 2024, dated 17-10-2024] (para 4).

The post HC Quashes DRC-13 Recovery for Interest on Regularised IGST ITC appeared first on Taxmann Blog.

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Notification No. G.S.R. 891(E)., Dated 10.12.2025

1. Overview

The Central Government has notified amendments to the Banking Regulation (Co-operative Societies) Rules, 1966, introducing new definitions, procedures, and revised forms to strengthen governance and streamline the removal and cessation process for directors in co-operative banks.

2. Insertion of Definition – “Ineligible Director”

A new definition of “ineligible director” has been inserted into the Rules.

2.1 Purpose of the Definition

• Establishes a clear statutory basis for identifying directors who no longer meet eligibility criteria.
• Prevents individuals who fail to satisfy prescribed fit-and-proper norms from continuing in office.
• Supports enhanced governance, transparency, and accountability within co-operative banking institutions.

The definition will be central to determining which directors are liable for removal or cessation under the revised rules.

3. New Rule 5-A – Procedure for Determination and Drawing of Lots

A new Rule 5-A has been added to lay down detailed procedures for identifying directors who shall cease to hold office or be removed, particularly in situations where:

• The board needs to be reconstituted,
• Excess directors must demit office, or
• Rotation or tenure-based removal is required.

3.1 Key Features of Rule 5-A

1. Grouping of Directors by Tenure

Directors must be grouped based on:

• Length of time in office,
• Eligibility status, and
• Categories specified in the amended rules.

This ensures the removal process is objective and tenure-balanced.

2. Drawing of Lots

If directors need to be removed or rotated out:

• The process shall be conducted by drawing of lots, ensuring fairness and non-discrimination.
• The rules lay out procedural safeguards for conducting the lot-drawing process.

3. Rules for Exclusion

Certain directors may be excluded from the lot, such as:

• Those already identified as ineligible directors,
• Those protected under statutory or regulatory tenure provisions,
• Directors completing defined mandatory terms.

These exclusions maintain compliance integrity and continuity of governance.

4. Amendments to Forms I and IX

The notification also introduces multiple amendments to Form I and Form IX, which relate to:

• Reporting of office-bearer and director details,
• Compliance declarations,
• Eligibility and cessation records.

4.1 Purpose of Amendments

• Align documentation with the new definition of “ineligible director”
• Support proper recording of removal/rotation proceedings
• Enhance auditability and transparency in director appointments and cessation

5. Regulatory Intent

The amendments aim to:

• Improve governance standards in co-operative banks
• Ensure transparent, rule-based removal of directors
• Prevent conflicts of interest or arbitrary selection
• Strengthen prudential oversight and protect depositor interests
• Modernise documentation and procedural compliance

These reforms align co-operative bank governance with contemporary regulatory expectations under the Banking Regulation Act, 1949 (as amended).

6. Implications for Co-operative Banks

Banks must:

• Update internal bylaws and governance policies to reflect the new rules
• Establish systems to determine eligibility and identify “ineligible directors”
• Set up procedures for grouping directors by tenure and conducting lots under Rule 5-A
• Revise internal formats to align with amended Forms I and IX
• Train board secretariat and compliance officers on the updated procedures

Non-compliance could lead to regulatory scrutiny, governance findings, or supervisory directives.

Click Here To Read The Full Notification

The post Govt. Amends Banking Regulation Rules | Introduces Rule 5-A appeared first on Taxmann Blog.

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Case Details: Mannat Steels vs. Union of India [2025] 181 taxmann.com 196 (Punjab & Haryana)

Judiciary and Counsel Details

• Mrs Lisa Gill & Deepak Manchanda, JJ.
• Pankaj Gupta, Adv. for the Petitioner.
• Ajay Kalra, Senior Standing Counsel for the Respondent.

Facts of the Case

The petitioner, challenged the blocking of its electronic credit ledger (ECL). It was submitted that, under Rule 86A of the CGST Rules and the corresponding Punjab GST Rules, a negative blocking entry was created on the ECL despite the available balance being insufficient, without any prior notice. It was contended that Rule 86A does not authorise blocking of ITC beyond the balance actually available and that such action was inconsistent with the statutory scheme, emphasising that eligibility and recovery under GST must be determined through proper adjudication. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that Rule 86A permits the jurisdictional officer under CGST to impose a temporary restriction on the debit of ITC when there are reasons to believe that the credit has been fraudulently or ineligibly availed, and that such restriction may be imposed without prior show-cause notice. The Court observed that creating negative blocking entries exceeding the actual ITC balance is impermissible, and that authorities could resort to statutory recovery procedures instead. It was further held that determination of eligibility for ITC must occur through formal adjudication.

List of Cases Reviewed

• Shyam Sunder Strips v. Union of India [2025] 180 taxmann.com 414 (Punj & Har) (para 12) followed

List of Cases Referred to

• Samay Alloys India (P.) Ltd. v. State of Gujarat [2022] 135 taxmann.com 243/91 GST 338/ 61 GSTL 421 (Guj) (para 5)
• Best Crop Science (P.) Ltd. v. Principal Commissioner, CGST Commissionerate, Meerut [2024] 166 taxmann.com 654/ 106 GST 440/90 GSTL 131 (Delhi) (para 5)
• Kings Security Guard Services (P.) Ltd. v. Deputy Director, Directorate General of GST Intelligence, DZU [2024] 169 taxmann.com 409/[2025] 108 GST 490/95 GSTL 92 (Delhi) (para 5)
• Karuna Rajendra Ringshia v. Commissioner of CGST [2024] 168 taxmann.com 249/[2025] 107 GST 164 (Delhi) (para 5)
• Deputy Director, Directorate General of GST Intelligence, DZU v. Kings Security Guard Services (P.) Ltd [SLP (C) No. 14493 of 2025, dated 17-5-2025] (para 5)
• Commissioner of Central GST v. Karuna Rajendra Ringshia [SLP (C) No. 17723 of 2025, dated 9-7-2025] (para 5)
• Shyam Sunder Strips v. Union of India [2025] 180 taxmann.com 414 (Punj & Har) (para 5)
• Laxmi Fine Chem v. Asstt. Commissioner [2024] 161 taxmann.com 270/104 GST 245/87 GSTL 197 (Telangana) (para 9)
• Rawman Metal & Alloys v. Dy. CST [2025] 179 taxmann.com 387 (Bom) (para 9)
• Basanta Kumar Shaw v. Asstt. Commissioner of Revenue, Commercial Taxes and State Tax [2022] 141 taxmann.com 528/94 GST 259/65 GSTL 436 (Cal) (para 9)
• R.M. Dairy Products LLP v. State of Uttar Pradesh [2021] 129 taxmann.com 37/88 GST 650/55 GSTL 524 (All) (para 9)
• Sugna Sponge & Power (P.) Ltd. v. Superintendent of Central Tax [2025] 170 taxmann.com 521/95 GSTL 421 (AP) (para 9).

The post Negative Blocking of ITC Ledger Beyond Available Balance Not Allowed | HC appeared first on Taxmann Blog.

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