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2003 (12) TMI 648
Validity of the incorporation of the name of respondent No. 7 in the municipal register - auction and subsequent actions taken by the respondent-Corporation - HELD THAT:- It is not in dispute that the property in question had vested with the respondent-Corporation. The respondent-Corporation, therefore, could grant a lease in respect of the premise in question in terms of Section 79 of the Bombay Provincial Municipal Corporation Act, 1949 which stands extended to Gujarat.
As order in writing could have been issued cancelling the allotment and forfeiting the amount of ₹ 270 but once it is held that the said letter dated 19.2.1952 was a conditional one, a fortiorari upon Shri Vajubha's failure to deposit the amount, the allotment stood cancelled.
Furthermore, it is not in dispute that for the purpose of demise of a premise for a period exceeding one year, a registered document was required to be executed. In absence of execution of such a registered deed, no title could have passed in favour of the auction purchaser. The statutory requirements for grant of lease must be fulfilled so as to confer a legal right on the property upon the auction purchaser. As the statutory conditions, as contained in Section 79 of the Act as also Section 17 of the Indian Registration Act, were not complied with, there cannot be any doubt whatsoever that Shri Vajubha did not derive any title by reason of said auction or otherwise.
In any event, the statutory authorities are bound to pass orders in writing. If possession of the plot had been delivered, the respondent - Corporation was bound to prepare document in respect thereof wherefor at least a receipt was required to be obtained from the auction purchaser showing that such possession had been delivered. If the possession had been delivered, the date on which the same was done could have been found out from the records of the municipal Corporation. As noticed by the High Court, no document exists. Even no noting in the file to that effect has been made. Only because an Officer in one of the correspondence had mentioned that possession had been delivered, the same, in our opinion, as has rightly been held by the High Court, could not have been accepted as a sacrosanct.
Furthermore, there was absolutely no reason as to why only a few weeks before the purported transfer made in favour of the appellants herein the respondent No. 7 would file two applications praying for entering his name in the lease register and showing his readiness and willingness to deposit a sum of ₹ 90. If the contention of the said respondent was to be accepted, he would have pleaded acquisition of title by adverse possession as also waiver of this aforementioned sum of ₹ 90.
It is also well-settled that if any decision is taken by a statutory authority at the behest or on the suggestion of a person who has no statutory role to play, the same would be ultra vires. It is, therefore, not a case where the High Court can be said to have committed an error in entertaining the public interest litigation. In our opinion, it has rightly been held that by reason of the impugned order, public interest has been given a complete go-by and a valuable public property was doled out at the behest of those who are duty bound to protect the same.
We, therefore, are of the opinion that as substantial justice has been done, it is not a fit case where this Court should exercise its discretionary jurisdiction under Article 136 of the Constitution of India.
This appeal is, therefore, dismissed without any order as to costs.
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2003 (12) TMI 647
Issues Involved:
1. Misdeclaration of fabric dyeing machine.
2. Reliance on expert opinions.
3. Interpretation of the term "dye kitchen" in the context of the notification.
Detailed Analysis:
Misdeclaration of Fabric Dyeing Machine:
The appellants were accused of misdeclaring a fabric dyeing machine as a dyeing machine complete with a dye kitchen and accessories. The allegation was based on the Bill of Entry No. 320892, dated 6-3-2003, filed by M/s. Gowtham Processors, Tirupur. The Commissioner of Customs, Tuticorin, in Orders-in-Original No. 9 and 10/2003, dated 6-6-2003, denied the exemption claimed under Notification No. 21/02-Cus., dated 1-3-2002, which pertains to "Fabric dyeing machine complete with dye kitchen and accessories."
Reliance on Expert Opinions:
The Revenue obtained opinions from the Textile Commissioner, Mumbai, SGS India Pvt. Ltd., and South India Textile Research Association (SITRA). The appellants also presented an opinion from Dr. N. Selva Kumar, Assistant Professor of Textile Technology, Anna University. The Commissioner relied solely on the Textile Commissioner's opinion, dismissing the opinions from SITRA and SGS India Pvt. Ltd. as ambiguous and lacking specific details such as model numbers and supplier names. The appellants argued that the Textile Commissioner's opinion was outdated and based on a different concept of dye kitchens as separate plants, not integrated parts of dyeing machines.
Interpretation of "Dye Kitchen":
The crux of the dispute revolved around whether the imported machine met the description of "Fabric dyeing machine complete with dye kitchen and accessories" as per the notification. The appellants contended that their machine, a 'DMS 11 Jumbo Jet Flow RDS Dyeing Machine,' included integrated facilities for dye preparation and supply, thus qualifying for the exemption. They argued that the primary machine is a dyeing machine, and the dye kitchen is an integral part of it, not a separate plant. The Commissioner's reliance on the Textile Commissioner's report, which did not examine the specific machine in question, was deemed erroneous.
Examination of Other Opinions:
The Deputy Director of Textiles Committee clarified that a dye kitchen is a special preparatory provision for preparing dyes and chemicals and injecting them into the dyeing machine under controlled conditions. SITRA confirmed that dye mixing tanks are part of the machine and may not always be listed in invoices but are detailed in catalogues. SGS India Pvt. Ltd. conducted a detailed inspection and confirmed that the machine in question included a dye kitchen and accessories, capable of performing all required functions.
Conclusion:
The Tribunal found that the Commissioner's reliance on the Textile Commissioner's opinion, which did not examine the specific machine, was misplaced. The detailed opinions from SITRA, SGS India Pvt. Ltd., and the Deputy Director of Textiles Committee provided a comprehensive understanding that the imported machine met the notification's requirements. The Tribunal concluded that the appellants had made a strong case, and the impugned order was set aside, allowing the appeals with consequential relief as per law.
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2003 (12) TMI 646
Issues:
1. Confirmation of deletion of additions on account of overtime, overheads, and perquisites by the Assessing Officer.
2. Treatment of taxes paid by the employer as perquisite under section 17(2)(iv).
3. Deletion of interest charged under section 234B of the Income-tax Act.
4. Allegation of passing a non-speaking order by the ITAT.
Analysis:
1. The High Court addressed the first issue concerning the addition of amounts on account of overtime, overheads, and perquisites. The Revenue challenged the Tribunal's order confirming the deletion of these additions made by the Assessing Officer. The Court noted that the Tribunal relied on its earlier orders for identically placed assessees in a different assessment year. The Revenue failed to provide evidence of challenging these orders for the previous year. The Court held that since the Revenue accepted the Tribunal's view on a similar issue for a previous year, no substantial question of law remained for consideration. Consequently, the appeal was dismissed.
2. The second issue revolved around the treatment of taxes paid by the employer as a perquisite under section 17(2)(iv). The Revenue contested the deletion of tax perquisite by the CIT(A) and upheld by the ITAT. The Court observed that the Revenue did not raise any specific plea regarding the distinction in facts between the present case and previous cases before the Tribunal. As no such plea was raised even in the current appeal, the Court found no grounds to entertain the appeal and dismissed it.
3. The third issue involved the deletion of interest charged under section 234B of the Income-tax Act. The Revenue challenged the deletion by the CIT(A) and affirmed by the ITAT. The Court emphasized that the Revenue failed to demonstrate any misdirection by the Tribunal in relying on its earlier orders for a different assessment year. As the Revenue had accepted the Tribunal's view on a similar issue in the past, the Court concluded that no substantial question of law existed for consideration. Consequently, the appeal was declined and dismissed.
4. The final issue pertained to the allegation of the ITAT passing a non-speaking order. The Revenue raised concerns about the ITAT's decision-making process. However, the Court highlighted that the Revenue did not raise this plea before the Tribunal or in the current appeal. Given the lack of specific arguments or evidence presented by the Revenue regarding the alleged non-speaking order, the Court found no basis to entertain the appeal on this ground and dismissed it accordingly.
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2003 (12) TMI 645
Legal Judgment: Supreme Court dismissed Civil Appeal in 2003 (12) TMI 645 - SC. Justices S.N. Variava and H.K. Sema found no reason to interfere.
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2003 (12) TMI 644
Issues: Classification of land as agricultural or non-agricultural based on land lying fallow and development in the locality.
Analysis:
1. The judgment revolves around the classification of land as agricultural or non-agricultural for wealth-tax assessment based on whether the land was lying fallow despite being used for growing crops previously. The Tribunal's order did not raise any legal questions requiring the High Court's attention, as the land had been consistently treated as agricultural for several years.
2. The argument presented was that the land should be considered non-agricultural due to it lying fallow and being situated in a developed locality. Reference was made to a Supreme Court case where land initially classified as agricultural was later deemed non-agricultural due to its sale for urban development and immediate construction. The Supreme Court emphasized that the classification of land as agricultural or non-agricultural is primarily a factual determination.
3. The Tribunal, in line with the Commissioner's findings, affirmed that the land in question should be classified as agricultural based on the factual evidence presented. The Tribunal's order comprehensively detailed the relevant facts supporting the agricultural classification of the land, leading to the dismissal of the appeal challenging the classification.
This judgment underscores the importance of factual evidence in determining the classification of land as agricultural or non-agricultural for tax assessment purposes, highlighting that the actual use and circumstances surrounding the land play a crucial role in such determinations.
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2003 (12) TMI 643
Issues Involved:
1. Validity of the acceptance of the gift deed by a minor.
2. Whether the gift deed was irrevocable.
3. Impact of the donor retaining management and income rights.
4. Validity of the cancellation deed and subsequent Will.
Detailed Analysis:
1. Validity of the Acceptance of the Gift Deed by a Minor:
The primary legal question was whether the minor donee could legally accept the property gifted to him on 24.9.1945. The trial court initially dismissed the suit, stating that the gift was invalid due to the minor's inability to accept it. However, the first appellate court reversed this decision, holding that a minor is not disqualified from receiving property under a gift deed and that acceptance could be express or implied. The High Court later contradicted this, stating that the terms of the gift deed did not indicate any property transfer. The Supreme Court clarified that under Section 122 of the Transfer of Property Act, a minor can accept a gift, and such acceptance can be implied. The Court noted that the minor donee, aged 16, was capable of understanding the gift and that his parents' knowledge and non-repudiation of the gift indicated acceptance. The Court emphasized that "where a gift is made by a parent to a child, there is a presumption of acceptance of the gift by the donee."
2. Whether the Gift Deed was Irrevocable:
The Court examined whether the gift deed could be revoked. Under Section 126 of the Transfer of Property Act, a gift, once accepted, becomes irrevocable except under specific conditions. The Supreme Court concluded that the gift deed was duly accepted and thus irrevocable. The donor's subsequent cancellation deed and Will were deemed ineffective. The Court stated, "the gift having been duly accepted in law and thus being complete, it was irrevocable under Section 126 of the Transfer of Property Act."
3. Impact of the Donor Retaining Management and Income Rights:
The High Court had held that since the donor retained the right to sign papers and receive income from the property, no ownership was transferred. The Supreme Court disagreed, stating that ownership and title were transferred to the donees, while possession and enjoyment were retained by the donor during her lifetime. The Court cited Section 6 of the Transfer of Property Act, which allows ownership to be transferred without possession. The judgment noted, "There is no prohibition in law that ownership in property cannot be gifted without its possession and right of enjoyment."
4. Validity of the Cancellation Deed and Subsequent Will:
The donor executed a cancellation deed on 28.3.1970 and a Will on 30.3.1970, bequeathing the same property to her daughter. The Supreme Court found these documents ineffective because the gift deed was irrevocable once accepted. The Court highlighted that the donor did not mention non-acceptance of the gift in the cancellation deed, reinforcing the presumption of acceptance. The judgment stated, "It was, therefore, not competent for the donor to have cancelled the gift and executed a Will in relation to the property."
Conclusion:
The Supreme Court allowed the donee's appeal, setting aside the High Court and trial court judgments, and restored the first appellate court's judgment. The connected appeal by the respondent was dismissed. The Court held that the gift deed was validly accepted, irrevocable, and the subsequent cancellation and Will were void.
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2003 (12) TMI 642
Issues:
Interpretation of Pension Regulations and Staff Regulations
Retrospective application of Regulations
Distinction between resignation and voluntary retirement
Interpretation of Pension Regulations and Staff Regulations:
The case involved a dispute regarding the entitlement of employees to pension benefits under the Reserve Bank of India Pension Regulations, 1990. The employer contested the High Court's decision that the employees were eligible for pension as per the Regulations. The Court analyzed the relevant provisions of the Pension Regulations and Staff Regulations to determine the employees' rights. It was noted that Regulation 18 of the Pension Regulations specified forfeiture of service on resignation, dismissal, or termination, leading to ineligibility for pension payment. The Court highlighted the distinction between resignation and voluntary retirement, emphasizing that resignation does not qualify for pension benefits as per the Regulations. The employees had not met the age requirement for voluntary retirement as per the Staff Regulations, further supporting the denial of pension benefits based on resignation.
Retrospective application of Regulations:
The High Court had ruled that the Pension Regulations did not have retrospective operation, leading to the employer's obligation to grant pension benefits to the employees who had resigned before the Regulations came into effect. However, the Supreme Court disagreed with this interpretation, emphasizing that the Regulations clearly excluded pension payment for employees resigning from service. The Court found that the employees were attempting to leverage the Pension Regulations for their benefit while denying the retrospective application of the Regulations. The Court held that the High Court's approach was flawed and set aside the judgment, dismissing the writ petitions filed by the employees.
Distinction between resignation and voluntary retirement:
The judgment delved into the nuanced differences between resignation and voluntary retirement in the context of service jurisprudence. It highlighted that while both involve voluntary acts by the employee to leave service, they have distinct consequences and conditions. Voluntary retirement requires a prescribed period of qualifying service and permission from the employer, unlike resignation, which can be tendered at any time without such requirements. The Court cited previous cases to illustrate the legal implications of resignation and voluntary retirement, emphasizing that resignation does not align with the categories of retirement outlined in the Staff Regulations. Ultimately, the Court ruled in favor of the employer, overturning the High Court's decision and dismissing the employees' claims for pension benefits.
In conclusion, the Supreme Court's judgment clarified the application of Pension Regulations and Staff Regulations in determining pension entitlements, addressed the issue of retrospective operation of Regulations, and elucidated the distinctions between resignation and voluntary retirement in the realm of service jurisprudence.
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2003 (12) TMI 641
Title: Supreme Court dismisses review petitions
Court: Supreme Court
Judges: B.N. Agrawal and Arun Kumar, JJ.
Decision: Delay condoned. Review petitions dismissed as no case made out for review of the order dated 30th April, 2003.
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2003 (12) TMI 640
Issues:
Appeal against rejection of declaration under Rule 57-T for specific items under Central Excise Rules, 1944.
Analysis:
The appeals were filed by M/s. Nava Bharat Ferro Alloys Ltd. challenging the rejection of their declaration under Rule 57-T for various items. The rejection was based on the argument that the items were not covered under Rule 57Q of the Central Excise Rules, 1944, as they were considered to be for general purposes with multifarious uses. The appellant's representative argued that the rejection was not justified, citing previous tribunal decisions where similar steel structures were deemed eligible for credit as supporting structures for heavy machinery, distinguishing the Commissioner's reliance on other cases. The appellant relied on various legal precedents and circulars to support their claim for credit under Rule 57Q. The appellant also argued that if the items were not considered capital goods, credit could be allowed under Rule 57A. The appellant further referenced decisions by the Larger Bench in support of their case.
The Revenue's representative contended that Modvat credit on certain items was not eligible, referring to tribunal decisions that supported this view. The Revenue also highlighted the impact of an amendment in the CENVAT Rule on the case at hand. The Tribunal carefully considered the arguments from both sides and noted the conflicting decisions cited by each party. The Tribunal observed that while some cases indicated that steel structures may not be considered component parts of machinery, other cases emphasized the importance of supporting materials for machinery to be considered as components of the plant eligible for credit. The Tribunal found a lack of clear findings by the lower authorities regarding whether the items in question were used as supporting structures for machinery or as construction materials. Due to this ambiguity, the Tribunal set aside the orders of the Commissioner (Appeals) and remanded the matter to the Original Authority for a fresh decision after factual verification to determine whether the items were essential supporting materials for the plant or merely construction materials. The parties were to be given an opportunity to present their case in this fresh decision-making process.
In conclusion, the Tribunal disposed of the appeals by remanding the matter for further investigation and decision, emphasizing the need for a clear determination on whether the items in question were indeed supporting structures for capital goods. The decision was pronounced on 5.12.2003.
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2003 (12) TMI 639
Constitutional validity of various provisions of the Prevention of Terrorism Act, 2002 (POTA) - Doctrine of pith and substance - Misuse of TADA and Necessity of POTA - definition of ’abets’ -protection of witness - confessions made to police officers - seeking bail for an accused under POTA - Validity of Section 49 - HELD THAT:- In our view, the impugned legislation does not fall under Entry 1 of List II, namely, Public Order. No other Entry in List II has been invoked. The impugned Act, therefore, falls within the legislative competence of Parliament in view of Article 248 read with Entry 97 of List I and it is not necessary to consider whether it falls under any of the entries in List I or List III. We are, however, of the opinion that the impugned Act could fall within the ambit of Entry 1 of List I, namely, ’Defence of India’.
Thus, the challenge advanced by Petitioners of want of legislative competence of Parliament to enact POTA is not tenable.
The definition of ’abets’ as appears in the IPC will apply in a case under POTA. In order to bring a person abetting the commission of an offence, under the provisions of IPC it is necessary to prove that such person has been connected with those steps of the transactions that are criminal. ’Mens rea’ element is sine qua non for offences under IPC. Learned Attorney General does not dispute this position. Therefore, the argument advanced pertaining to the validity of Section 3(3) citing the reason of the absence of mens rea element stands rejected.
Funding and financing play a vital role in fostering and promoting terrorism and it is only with such funds terrorists are able to recruit persons for their activities and make payments to them and their family to obtain arms and ammunition for furthering terrorist activities and to sustain the campaign of terrorism. Therefore, seizure, forfeiture and attachment of properties are essential in order to contain terrorism and is not unrelated to the same. Indeed, it is relevant to notice a resolution passed by the United Nations Security Council [Resolution No.1373 dated 28.9.2001] which emphasized the need to curb terrorist activities by freezing and forfeiture of funds and financial assets employed to further terrorist activities. It will also be interesting to notice the United Nations International Convention for the Suppression of the Financing of Terrorism but at the same time it is not necessary to go into those details in the present context. The scheme of the provisions indicate that the principles of natural justice are duly observed and they do not confer any arbitrary power and forfeiture can only be made by an order of the court against which an appeal is also provided to the High Court and the rights of bona fide transferee are not affected.
Therefore, for the present, it is not necessary to pronounce the constitutional validity of these provisions and we proceed on the basis that they are valid.
Appropriate methods to ensure the safety of individual witness - Keeping secret the identity of witness, though in the larger interest of public, is a deviation from the usual mode of trial. In extraordinary circumstances we are bound to take this path, which is less travelled. Here the Special Courts will have to exercise utmost care and caution to ensure fair trial. The reason for keeping identity of the witness has to be well substantiated. It is not feasible for us to suggest the procedure that has to be adopted by the Special Courts for keeping the identity of witness secret. It shall be appropriate for the concerned Courts to take into account all the factual circumstances of individual cases and to forge appropriate methods to ensure the safety of individual witness. With these observations we uphold the validity of Section 30.
Confessions made to police officers - In our considered opinion the provision that requires producing such a person before the Magistrate is an additional safeguard. It gives that person an opportunity to rethink over his confession. Moreover, the Magistrate’s responsibility to record the statement and the enquiry about the torture and provision for subsequent medical treatment makes the provision safer. It will deter the police officers from obtaining a confession from an accused by subjecting him to torture. It is also worthwhile to note that an officer who is below the rank of a Superintendent of Police cannot record the confession statement. It is a settled position that if a confession was forcibly extracted, it is a nullity in law. Non-inclusion of this obvious and settled principle does not make the Section invalid. Ultimately, it is for the concerned Court to decide the admissibility of the confession statement. Judicial wisdom will surely prevail over irregularity, if any in the process of recording confessional statement.
Therefore we are satisfied that the safeguards provided by the Act and under the law is adequate in the given circumstances and we don’t think it is necessary to look more into this matter.
Consequently we uphold the validity of Section 32.
Validity of Section 49 - bail under POTA - Petitioners’ main grievance about this Section is that under Section 49(7) a Court could grant bail only if it is satisfied that there are grounds for believing that an accused ’is not guilty of committing such offence’, since such a satisfaction could be attained only after recording of evidence there is every chance that the accused will be granted bail only after minimum one year of detention; that the proviso to Section 49(7), which is not there under TADA, makes it clear that for one year from the date of detention no bail could be granted; that this Section has not incorporated the principles laid down by this Court in Sanjay Dutt’s case [1994 (9) TMI 351 - SUPREME COURT] wherein it is held that if a challan is not filed after expiry of 180 days or extended period, the indefeasible right of an accused to be released on bail is ensured, provided that the same is exercised before filing of challan; that the prosecution is curtailing even this right under POTA. Therefore, the petitioners want us to make the Section less stringent according to the settled principles of law.
Learned Attorney General submitted that the provisions regarding bail are not onerous nor do they impose any excessive burden or restriction on the right of the accused; that similar provisions are found in Section 37 of the NDPS Act 1985 and in Section 10 of the UP Dacoity Affected Areas Act; that on a true construction of Section 49(6) and (7) it is not correct to conclude that the accused cannot apply for bail at all for a period of one year; that the right of the accused to apply for bail during the period of one year is not completely taken away; that the stringent provision of bail under Section 49(7) would apply only for the first one year of detention and after its expiry the normal bail provisions under Cr.P.C. would apply; that there is no dispute that the principle laid down by this Court in D.K Basu V. State of West Bengal, [1996 (12) TMI 350 - SUPREME COURT], will apply; that in the light of effective safeguards provided in the Act and effective remedies against adverse orders there is no frailty in Section 49.
In spite of this, bail could be obtained for an accused booked under POTA if the ’court is satisfied that there are grounds for believing that he is not guilty of committing such offence’ after hearing the Public Prosecutor. It is the general law that before granting the bail the conduct of accused seeking bail has to be taken into account and evaluated in the background of nature of crime said to have committed by him. That evaluation shall be based on the possibility of his likelihood of either tampering with the evidence or committing the offence again or creating threat to the society.
Since the satisfaction of the Court u/s 49(7) has to be arrived based on the particular facts and after considering the abovementioned aspects, we don not think the unreasonableness attributed to Section 49(7) is fair.
Sections 49(6) and 49(7) of POTA have to be read together and the combined reading of these two sections is to the effect that Public Prosecutor has to be given an opportunity of being heard before releasing the accused on bail and if he opposes the application, the court will have to be satisfied that there are grounds for believing that he is not guilty of having committed such offence. It is by way of exception to Section 49(7) that proviso is added which means that after the expiry of one year after the detention of the accused for offences under POTA, the accused can be released on bail after hearing the Public Prosecutor under ordinary law without applying the rigour of Section 49(7) of POTA. It also means that the accused can approach the court for bail subject to conditions of Section 49(7) of POTA within a period of one year after the detention for offences under POTA.
Taking into account of the complexities of the terrorism related offences and intention of Parliament in enacting a special law for its prevention, we do not think that the additional conditions regarding bail under POTA are unreasonable. We uphold the validity of Section 49.
There is no challenge to any other provisions of the Act.
In the result, these petitions stand dismissed subject, however, to the clarifications that we have set out above on the interpretation of the provisions of the enactment while dealing with the constitutionality thereof.
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2003 (12) TMI 638
Provisions of the Uttar Pradesh Imposition of Ceiling On Land Holdings Act, 1960 - challenged the impugned order passed by the Prescribed Authority and the High Court - exclusion of certain lands transferred bona fide - Joint family property and appellant had only 1/10th share in the same - HELD THAT:- In our considered opinion, there Is a glaring mistake in the impugned order dated 29.3.1996 of the Prescribed Authority passed after remand in treating the earlier order dated 05.8.1977 passed in appeal by the District Judge to have been totally set aside by the earlier order of the High Court dated 19.01.1979 passed in writ petition against the order of the District Judge dated 05.8.1977. From the order of the High Court extracted, it is clear that the whole order of the District Judge was not set aside. It was set aside only with respect to categorisation of lands in the two villages and the remand was restricted to fresh determination of the same. The observations that 'no other controversy shall be allowed to be raised hereafter' before the Prescribed Authority or before the appellate authority' only meant that the remand would be restricted to re-determination of the nature of the land and all other issues decided which have not been disturbed of the order of the District Judge in appeal shall not be allowed to be re-agitated.
From the contents of the order of the High Court, we have no manner of doubt that the writ petition of the holder of the land against the judgment of the District Judge had only succeeded with an order of the remand limited to re-examination of the nature of the lands. In all other respect, the order of the District Judge was confirmed prohibiting reopening of the same. We have already mentioned above that the order of the District Judge passed in appeal dated 05.8.1977 was not challenged by the State of U.P. and therefore, that order to the extent it was in favour of the appellant, had attained finality and could not have been disturbed. The Prescribed Authority and the Appellate Court in their orders passed on 29.3.1996 and 13.3.1997 respectively, overlooked this aspect of the case of the finality of the order of the District Judge dated 05.8.1977. They misdirected themselves by assuming that the whole case was open before them for reconsideration and re-determination of the ceiling area. In the second writ petition filed by the appellant to the High Court against the orders passed by the Authorities under the Act after remand, the learned Single Judge took no care to re-examine the contents of the orders previously passed and which had attained finality to the extent indicated in those orders. The High Court by the impugned order dated 09.5.1997 cursorily examined the case and wrongly dismissed it as being without merit.
In the result the appeal succeeds, by remanding the case to the prescribed Authority, with the directions made above. In the circumstances, we make no order as to costs.
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2003 (12) TMI 637
Possession of assets disproportionate to the known sources of income - illegal detention and harassment by CBI officials - Jurisdiction and powers of NHRC under the Protection of Human Rights Act, 1993 - Validity of NHRC's review and reopening of the case - Validity of NHRC's review and reopening of the case - HELD THAT:- It is to be noted that the Commission did not afford personal hearing to the officials who were put on notice nor any opportunity of adducing evidence was afforded. The complaint was decided on the basis of averments in the review petition and the replies submitted by the officials concerned. The plea of the officials was tested broadly on the basis of probabilities and a conclusion was reached that the officials concerned were guilty of human rights violation.
The three legal objections raised by the CBI officials were over-ruled by the Commission. Firstly, it was held that by virtue of Section 13 of the Protection of Human Rights Act, 1993, the power of review conferred on the civil court was available to the Commission. As the earlier order was not a decision on merits but merely an order abstaining from further enquiry the Commission felt that there was no bar to reconsider the entire issue in the interest of justice.
We cannot endorse the view of the Commission. The Commission which is an ’unique expert body’ is, no doubt, entrusted with a very important function of protecting the human rights, but, it is needless to point out that the Commission has no unlimited jurisdiction nor does it exercise plenary powers in derogation of the statutory limitations. The Commission, which is the creature of statute, is bound by its provisions. Its duties and functions are defined and circumscribed by the Act. Of course, as any other statutory functionary, it undoubtedly has incidental or ancillary powers to effectively exercise its jurisdiction in respect of the powers confided to it but the Commission should necessarily act within the parameters prescribed by the Act creating it and the confines of jurisdiction vested in it by the Act.
It is not in dispute that the complainant was produced before the Special Judge on 3.4.1994 and remand was obtained in accordance with the procedure prescribed by law. The alleged act of unauthorized detention which gives rise to violation of human rights ceased on 3.4.1994 and it does not perpetuate thereafter. It is not the effect of illegal detention which is contemplated by Section 36(2) but it is the illegal act itself. It would be a contradiction in terms to say that the arrest or detention beyond 3.4.1994 was in accordance with law and at the same time the arrest/detention continued to be wrongful. It cannot, therefore, be brought under the category of continuing wrong which is analogous to the expression ’continuing offence’ in the field of criminal law. It cannot be said that the alleged wrongful act of detention repeats itself everyday even after the complainant was produced before the Magistrate and remand was obtained in accordance with law. Beyond 3.4.1994, there was no breach of obligation imposed by law either by means of positive or passive conduct of the alleged wrong-doers. To characterize it as a continuing wrong is, therefore, inappropriate. One year period for taking up the enquiry into the complaint, therefore, comes to an end by 3.4.1995. Just as in the case of Section 473 Cr.P.C., there is no provision in the Act to extend the period of limitation of one year. However, in the procedural Regulations framed by the Commission certain amount of discretion is reserved to the Commission. Regulation 8(1)(a) inter alia lays down that ’ordinarily’ a complaint in regard to events which happened more than one year before the making of the complaint is not entertainable.
As already noticed, the petition filed by the complainant was received by the Commission a day after the charge sheet was filed though it bears an earlier date. For nearly 4 years the complainant kept quiet. The explanation given in the complaint for this long silence was that he was under the impression that by reporting the matter to NHRC he might be antagonizing the CBI officials, but, after realizing that they were not acting fairly and objectively and they continued to harass him, he thought of filing the petition before NHRC. The Commission, on its part, did not advert to this explanation which is really no explanation at all, nor did it advert to any extraordinary circumstances justifying interference after a long lapse of time prescribed by Section 36(2). The Commission thus tried to clutch at the jurisdiction by invoking the theory of continuing wrong which, as we held earlier, cannot be invoked at all. In this view of the matter, the direction given by the Commission to the Director of CBI, which has an undoubted effect on the service career of the writ petitioner, is violative of Article 14 of the Constitution.
In the result, the order of NHRC dated 12.6.2000 is quashed and the writ petition (civil) No. 42 of 2001 stands allowed. The S.L.P. Nos. 8220 of 2001, 11182 of 2001, 11186 and 14392 of 2001 filed against the interim orders granted by the High Court are dismissed. All the Transfer Petitions are also dismissed with an observation that the High Court of Jharkhand may dispose of the related Writ Petitions/LPA pending on its file with expedition in the light of this judgment. No costs.
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2003 (12) TMI 636
Determination of the annual letting value of the let out portion of the building - Addition of notional interest on security deposit for calculating "Income from House Property" - HELD THAT:- It is an admitted position that the company purchased 'Jindal Mansion' which was previously owned by Kamla Metals and the said property was under the tenancy of two companies, viz., Jindal Strips Ltd. and Jindal Iron & Steel Co. Ltd. right from 1983 onwards at the same rent of ₹ 1 per sq. ft., at the time when the assessee has purchased this property.
In the present case, the municipal rateable value of the building as per the copy of receipt placed on paper book for a period of 6 months from 1-10-1998 to 31-3-1999 is ₹ 10,61,190. Thus, the yearly municipal rateable value of the entire property 'Jindal Mansion' can only be ₹ 21,22,380. Therefore, if this value was to be adopted as a guide for the determination of the standard rent, then appropriate proportion of this amount shall have to be taken for computing the standard rent of the portion let out by the assessee. Therefore, even if we apply provisions of section 23(1)(a) of the Act, the annual letting value of the entire property cannot be more than ₹ 21,22,380.
Since we are of the opinion that the provisions of sub-clause (b) to sub-section (1) of section 23 is applicable to the present case, this issue stands directly covered by the decision of the Hon'ble Bombay High Court in the case of CIT v. J.K. Investors (Bom.) Ltd. [2000 (6) TMI 9 - BOMBAY HIGH COURT] and Calcutta High Court in the case of CIT v. Satya Co. Ltd.[1993 (8) TMI 293 - CALCUTTA HIGH COURT].
We are of the opinion that notional interest on the interest-free deposit cannot be taken into consideration while determining the annual letting value of the building u/s 23 of the Income-tax Act, 1961. Therefore, we adopt the same reasoning as has been in the order of the ITAT in Ruchi Properties Ltd.'s case for arriving at the above conclusion.
In the case of Tivoli Investment & Trading Co. (P.) Ltd.[2003 (6) TMI 463 - ITAT MUMBAI], the Bench itself has observed that the assessee received only deposit and no rent was stipulated. Similarly, the case of Apart Ltd. was also a case where no actual rent was received by the assessee and the Bench was concerned with the application of sub-clause (a) of sub-section (1) of section 23 of the Act. Therefore, both these cases are distinguishable. In the case of R. Dalmia [1981 (12) TMI 3 - DELHI HIGH COURT], the question was whether municipal valuation can be considered as annual letting value of the property, which is not the case in the instant case.
Thus, we are of the opinion that the revenue authorities cannot take into consideration the notional interest on the interest-free advances received by the assessee while determining the annual letting value of the rented property. We accordingly set aside the orders of the authorities below on this issue. Grounds 1 to 3 of the assessee are allowed.
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2003 (12) TMI 635
Issues:
1. Construction of gift deed dated September 9, 1947.
2. Validity of creation of interest in the property in question in favor of respondent in view of Section 13 of the Transfer of Property Act, 1882.
Construction of Gift Deed:
The case involved a dispute between two brothers over the partition of properties based on a gift deed executed in 1947. The donor retained property survey No.306 for her livelihood till her demise, after which the appellant was to become the absolute owner. The appellant contended that the respondent had no right over the property. However, the courts held that the intention of the donor was for all male children of her brother to be joint holders of the properties, including survey No.306. The document as a whole indicated this intention, and the gift deed was properly construed by the lower courts.
Validity of Interest Creation:
The second issue revolved around the interpretation of Sections 13 and 20 of the Transfer of Property Act. Section 13 deals with the transfer for the benefit of unborn persons, while Section 20 addresses when an unborn person acquires a vested interest. The appellant argued that the interest created under the gift deed was invalid as it did not extend to the whole property for the benefit of the unborn male child, the respondent. However, the court held that Section 20 allows for the creation of an interest for an unborn person, and in this case, the respondent became entitled to the property upon his birth. The court found no merit in the appellant's contention and dismissed the appeal, leaving the parties to bear their own costs.
In conclusion, the judgment upheld the lower court's decision, emphasizing the importance of interpreting the gift deed in its entirety and applying the relevant provisions of the Transfer of Property Act to determine the validity of the interest created in the disputed property.
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2003 (12) TMI 634
Seeking grant of sanction for construction of three additional floors to the multi-storeyed complex which is already constructed up to four floors belonging to respondent - 'vested right' or 'settled expectation' - HELD THAT:- We do not find that there was any deliberate delay on the part of the Corporation. We have found that the stand of the Corporation, on the basis of Building Rules, cannot be held to be erroneous that for seeking three additional floors, the company was required to file fresh application for sanction with necessary particulars, documents, plans and enclosures. The company complied with the necessary requirements but thereafter, the Building Rules were amended and restrictions have been imposed on height of buildings on the GT Road. It cannot, therefore, be held that the action of the Corporation is malicious. The Building Rules were amended by the State and the Corporation can have no bona fide or mala fide hand in it.
After the amended Building Rules were notified, the Corporation on relevant ground of limited resources for civic amenities in a congested city like Howrah, with the approval of Mayor-in-Council, could legally impose legitimate restrictions on the height of buildings, on specified wards, roads and localities. It is to be noted from the relevant resolution of the Corporation that restrictions with regard to the height of buildings are not imposed only on GT Road but there are several specified wards and areas in which such restrictions are applied. This Court cannot accept that such a legislative change and consequent resolution came to be passed and got approved only to frustrate the pending application of the company.
The 'vested right' or 'settled expectation' has been nullified not only by the Corporation but also by the State by amending the Building Rules. Besides this, such a 'settled expectation' or so-called 'vested right' cannot be countenanced against public interest and convenience which are sought to be served by amendment of the Building Rules and the resolution of the Corporation issued thereupon.
In the matter of sanction of buildings for construction and restricting their height, the paramount consideration is public interest and convenience and not the interest of a particular person or a party. The sanction now directed to be granted by the High Court for construction of additional floors in favour of respondent is clearly in violation of the amended Building Rules and the Resolution of the Corporation which restrict heights of buildings on GT Road. This Court in its discretionary jurisdiction under Article 136 of the Constitution cannot support the impugned order of the High Court of making an exception in favour of the respondent company by issuing directions for grant of sanction for construction of building with height in violation of the amended Building Rules and the resolution of the Corporation passed consequent thereupon.
Thus, in our opinion, the learned Single Judge was right in rejecting the prayer of the respondent company in public interest and the Division Bench of the High Court committed an error in directing grant of sanction for further construction above four floors to the respondent company in clear violation of the existing building rules and the resolution of the Corporation.
In the result, the appeal preferred by the Corporation succeeds and is allowed. The impugned order of the Division bench of the High Court dated 5.9.1997 is hereby quashed and that of the learned Single judge restored. In the circumstance, however, we shall direct the parties to bear their own costs in this appeal.
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2003 (12) TMI 633
Issues Involved:
1. Use of materials found during investigation and enquiries following a search.
2. Alleged use of third-degree methods by Investigating Officers.
3. Difference in the amount seized and deposited in the Reserve Bank of India.
4. Validity of block assessment period and its conclusion.
5. Application of mind by the Assessing Officer and approval by the Commissioner.
6. Addition of income based on documents found during the search.
7. Ownership and explanation of cash found during the search.
8. Ownership and explanation of investments made by family members.
9. Ownership and explanation of jewellery and silverware found during the search.
10. Donations made to Dr. Dharmambal Namasivayam Trust.
11. Various other investments and expenditures.
12. Deposits in the foreign bank account of a relative.
13. Addition of secret commission.
14. Foreign currency found during the search.
15. Fixed deposits and interest accrued thereon.
Detailed Analysis:
1. Use of Materials Found During Investigation and Enquiries Following a Search:
The Tribunal held that the materials found during the investigation and enquiries following the search could be used, distinguishing the case from P.K. Ganeshwar's case where materials were independent and not a result of the search. In this case, certain papers or materials were found, and enquiries were conducted regarding such seized materials. Thus, this point was held against the assessee.
2. Alleged Use of Third-Degree Methods by Investigating Officers:
The assessee argued that third-degree methods were used by Investigating Officers, which vitiated the assessment proceedings. The Tribunal noted that the Notary Public who attested the affidavit was questioned without the presence of the assessee or his representative. However, since the assessee had an opportunity to cross-examine the Notary Public later, the absence of the assessee or his representative at the time of questioning did not vitiate the entire proceedings. Thus, this preliminary legal objection was overruled.
3. Difference in the Amount Seized and Deposited in the Reserve Bank of India:
The Tribunal observed that there was a discrepancy in the amount seized from the assessee's residence and office and the amount deposited in the Reserve Bank of India. The cash deposited was more than the cash seized by Rs. 4,65,650. The Tribunal noted that the assessee was given an opportunity to be present during the deposit of the cash but did not comply. Thus, the plea of manipulation was rejected, and this legal ground of the assessee was overruled.
4. Validity of Block Assessment Period and Its Conclusion:
The Tribunal held that merely mentioning "search continues" in one paper (panchnama) was not sufficient to hold that the entire block assessment had to go. It was clear from other documents that the search had concluded. Thus, this infirmity alone did not vitiate the entire proceedings.
5. Application of Mind by the Assessing Officer and Approval by the Commissioner:
The Tribunal rejected the assessee's contention that the approval by the Commissioner was not valid due to lack of time for application of mind. It was held that the approval of the Commissioner under section 158BG is an administrative matter, and it is not necessary to give a hearing to the parties. Thus, this plea of the assessee was also rejected.
6. Addition of Income Based on Documents Found During the Search:
The Tribunal examined the addition of Rs. 38,95,74,550 based on documents found during the search. The assessee argued that the Assessing Officer relied on certain paper slips without corroborative evidence. The Tribunal noted that the Assessing Officer failed to provide the assessee with an opportunity to cross-examine the parties from whom statements were recorded. It was held that the addition could not be sustained without proper evidence and cross-examination. Thus, the addition was deleted.
7. Ownership and Explanation of Cash Found During the Search:
The Tribunal examined the cash found at the assessee's residence and office. The assessee claimed that the cash belonged to Tamil Nadu Basketball Association (TNBA). The Tribunal noted that the assessee provided names of persons who allegedly advanced money to TNBA, but the Assessing Officer disbelieved the explanation. However, the Tribunal held that the assessee had discharged the primary onus of explaining the source, and the addition could not be sustained. Thus, the addition was deleted.
8. Ownership and Explanation of Investments Made by Family Members:
The Tribunal examined the investments made in the names of the assessee's mother and sons. It was noted that the assessments were completed on a regular basis under section 143(3) and the declarations under KVSS were accepted. Thus, the additions made in the hands of the assessee were deleted.
9. Ownership and Explanation of Jewellery and Silverware Found During the Search:
The Tribunal examined the addition of Rs. 1,15,41,900 for jewellery and silverware found during the search. It was noted that the assessee provided explanations for the jewellery, including gifts received during marriage. The Tribunal held that the explanations were reasonable and the addition could not be sustained. Thus, the addition was deleted.
10. Donations Made to Dr. Dharmambal Namasivayam Trust:
The Tribunal examined the addition of Rs. 1,69,19,621 and Rs. 2,91,958 for donations made to Dr. Dharmambal Namasivayam Trust. It was noted that the trust was registered and given exemption under section 80G. The Tribunal held that the addition could not be sustained without proper evidence linking the donations to the assessee. Thus, the addition was deleted.
11. Various Other Investments and Expenditures:
The Tribunal examined various other investments and expenditures, including investments in M/s. Shilpi Grih Constructions, purchase of property, and household expenses. It was noted that the assessments were completed on a regular basis and the declarations under KVSS were accepted. Thus, the additions made in the hands of the assessee were deleted.
12. Deposits in the Foreign Bank Account of a Relative:
The Tribunal examined the addition of Rs. 25,87,343 for deposits in the foreign bank account of a relative. It was noted that the pass-book and fax message were found in the assessee's bedroom. However, the Tribunal held that the addition could not be sustained without proper evidence linking the deposits to the assessee. Thus, the addition was deleted.
13. Addition of Secret Commission:
The Tribunal examined the addition of Rs. 1,34,46,588 for secret commission. It was noted that the documents found during the search did not provide clear evidence of receipt of secret commission by the assessee. Thus, the addition was deleted.
14. Foreign Currency Found During the Search:
The Tribunal examined the addition of Rs. 1,93,040 for foreign currency found during the search. It was noted that the assessee provided a plausible explanation for the foreign currency, and the addition could not be sustained. Thus, the addition was deleted.
15. Fixed Deposits and Interest Accrued Thereon:
The Tribunal examined the addition of fixed deposits and interest accrued thereon. It was noted that the assessments were completed on a regular basis and the declarations under KVSS were accepted. Thus, the additions made in the hands of the assessee were deleted.
Conclusion:
The Tribunal allowed the appeal of the assessee partly, deleting most of the additions made by the Assessing Officer due to lack of proper evidence and procedural infirmities. The Tribunal emphasized the importance of providing the assessee with an opportunity for cross-examination and the need for corroborative evidence to sustain additions under Chapter XIV-B.
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2003 (12) TMI 632
The Appellate Tribunal CESTAT NEW DELHI heard a case where duty demand was raised based on Coca Cola price discrepancy in Varanasi. The appellant argued that the demand cannot be generalized due to sales at different rates. The Tribunal found the case arguable, exempted pre-deposit due to financial hardship, and granted stay of recovery. Appeals scheduled for hearing on 11th February, 2004.
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2003 (12) TMI 631
Issues involved:
Whether penalty is imposable on M/s. Burman Laboratories Pvt. Ltd.
Analysis:
The issue in this appeal is centered around the imposability of a penalty on M/s. Burman Laboratories Pvt. Ltd. The respondents availed Modvat credit on duty paid inputs and capital goods while manufacturing various excisable goods. They also manufactured plastic containers under a specific heading and claimed exemption under a particular notification. The Joint Commissioner confirmed the duty demand on the plastic containers and imposed a penalty, which was later set aside by the Commissioner (Appeals) as the duty was deposited before the show cause notice. The Revenue contended that the penalty should be imposed as the respondents wrongly availed the benefit of the notification. The respondents argued that they were eligible for the notification's benefit as they were not availing Modvat credit on the products mentioned in the notification. They also cited a previous tribunal decision to support their stance.
Upon considering the arguments, it was observed that the respondents were denied the benefit of the notification due to their availing of Modvat credit on inputs, not complying with the notification's conditions. A previous tribunal decision highlighted that the condition was specific to not availing credit on products manufactured in the same factory, not on inputs used for other products. The respondents did not challenge the duty demand initially and had paid the duty even before the show cause notice. Based on the precedent set by the previous tribunal decision, the respondents would not have been liable to pay the duty. Consequently, it was concluded that no penalty should be imposed on the respondents, leading to the rejection of the Revenue's appeal.
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2003 (12) TMI 630
Title: Supreme Court dismisses review petition
Citation: 2003 (12) TMI 630 - SC
Judges: B.N. Agrawal and Arun Kumar, JJ.
Decision: Delay condoned. Review petition dismissed, as no case made out to review earlier order.
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2003 (12) TMI 629
Issues: Appeal against acquittal under Section 20(b)(i) of the NDPS Act 1985 based on custody of seized articles and delay in sending samples.
Analysis:
1. Appeal against Acquittal: The State of Orissa challenged the acquittal of the accused under Section 20(b)(i) of the NDPS Act 1985 by a learned Single Judge of the Orissa High Court. The trial court had found the accused guilty based on the seizure of cannabis (ganja) from the accused, but the High Court acquitted the accused citing lack of established accusation.
2. Custody of Seized Articles: The main contention raised in the appeal was regarding the custody of the seized articles. The State argued that the articles were kept in safe custody and deposited in the Excise Malkhana at Cuttack as per the order of the S.D.J.M. However, the High Court found that there was no specific order for custody and, therefore, held the prosecution version as unacceptable, leading to the acquittal of the accused.
3. Delay in Sending Samples: Another issue raised in the appeal was the delay in sending the samples for chemical examination. The accused argued that the delay of four days in sending the sample to the State Drug Testing Research Laboratory was sufficient to discard the accusation. The State contended that the articles were in safe custody during this period, but the High Court found the prosecution version suspect based on the delay.
4. Judgment Analysis: The Supreme Court analyzed the evidence and found that although there was no specific order for custody when the accused was produced in court, the seized articles were clearly stated to have been produced along with the accused. The Court noted that the articles were kept in the Excise Malkhana and sent for examination, which was missed by the High Court. The Court distinguished the case of Valasla v. State of Kerala and emphasized the importance of proper custody of seized articles. Since there was no evidence to show improper custody in this case, the Court set aside the High Court's judgment and directed the restoration of the conviction and sentence imposed by the trial court.
5. Conclusion: The Supreme Court allowed the appeal, directing the accused to surrender to custody if the full sentence had not been served, and upheld the conviction and sentence imposed by the trial court. The Court's decision highlighted the significance of proper custody of seized articles and clarified the impact of delay in sending samples on the prosecution's case.
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