LexJAYKISHOR CHATURVEDI & ETC. versus SECURITIES AND EXCHANGE BOARD OF INDIA
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2025] 8 S.C.R. 138 : 2025 INSC 846 Jaykishor Chaturvedi & Etc. v. Securities and Exchange Board of India (Civil Appeal No(s). 1551-1553 of 2023) 15 July 2025 [J.B. Pardiwala and R. Mahadevan,* JJ.] Issue for Consideration Whether interest on penalties imposed by the Adjudicating Officer is payable by the appellants, and if so, from which date- whether from the date of the adjudication orders passed by the Adjudicating Officer or the demand notices issued by the respondent-SEBI. Headnotes† Securities and Exchange Board of India Act, 1992 – s.28A – Income Tax Act, 1961 – s.220(1), (2), (4) – Recovery of amounts – When tax payable and when assessee deemed in default – Interest on unpaid penalties imposed by the Adjudicating Officer, if payable by the appellants – If yes, from which date- whether interest on the unpaid penalty should accrue from the expiry of the 45-day period stipulated in the Adjudicating Officer’s orders dtd.28.08.2014, or from the expiry of 30 days following the respondent’s notices dtd.13.05.2022: Held: Adjudicating Officer’s order itself constituted a clear and enforceable demand for payment of penalties within 45 days – This order attained finality following the appellants’ unsuccessful challenges before the SAT and this Court, thereby crystallizing the liability – Once the adjudication order has attained finality, the obligation to pay the penalty stands revived from the date of adjudication – U/s.220(1), Income Tax Act r/w s.28A, SEBI Act, interest becomes payable upon failure to meet the demand within the prescribed time – Thus, appellants’ failure to comply within the specified time rendered them ‘defaulters’ u/s.220(4), Income Tax Act, justifying the accrual of interest from the expiry of the 45-day compliance period – Further, since s.156, Income Tax Act * Author [2025] 8 S.C.R. 139 Jaykishor Chaturvedi & Etc. v. Securities and Exchange Board of India is not incorporated into the SEBI Act, the original order must be treated as the statutory trigger for the purpose of calculation of interest – Moreover, the demand notice dtd.13.05.2022 merely reiterated the earlier demand and did not create a fresh liability – The enabling provision to recover interest was already in vogue when the adjudication order was passed – Appellants liable to pay interest at 12% p.a on the unpaid penalty amounts for the period of delay – Plea of the appellants that interest cannot be levied retrospectively, misplaced – Interest to accrue from the expiry of the 45-day compliance period following the adjudication orders dtd.28.08.2014 – Order of the Tribunal dismissing the challenge to the notices of attachment issued against the appellants, not interfered with – SEBI Rules, 1995 – SEBI (Prohibition of Insider Trading) Regulations, 1992 – Regulation Nos.13(4) and 13(4A) r/w 13(5). [Paras 10, 11.3, 11.5, 11.6] Securities and Exchange Board of India Act, 1992 – Explanation 4 to s.28A – Appellants contended that the Explanation 4 to s.28A inserted in 2019, cannot be applied retrospectively, as it alters the legal position as it stood earlier by introducing provisions relating to the levy of interest: Held: An “explanation” in any law clarifies, restricts, or expands the scope of the main provision – The nature and effect of an Explanation must be understood in the context of the object of the Act, and in particular, the provision to which the Explanation is inserted – Explanation 4 to s.28A inserted on 21.02.2019, explicitly states that interest u/s.220, Income Tax Act shall accrue from the date the amount became payable – The liability to pay penalty stood triggered from the date of adjudication and that no separate notice of demand is necessary – Further, in the present case, as the adjudication order itself specified the time for payment of the penalty, the liability to pay interest would commence upon the expiry of the period mentioned in the assessment notice – The Explanation introduced in 2019, did not bring about any substantive change but merely clarified the existing legal position – Also, where the original adjudication order under the SEBI Act does not specify any time for payment, the period of 30 days u/s.220, Income Tax Act should be deemed to apply for making the payment, failure of which would trigger the liability to pay interest – Thus, the adjudication officer’s order which specified payment within 45 days, effectively 140 [2025] 8 S.C.R.
Excerpt shown. Read the full judgment & AI analysis in Lexace.