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Case Laws
Showing 361 to 380 of 493 Records
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1998 (2) TMI 134
The High Court of Delhi directed the petitioner to pay excise duty treating Uninterrupted Power Supply System (UPS) under Heading 85.04 until further orders. The petitioner must comply with the final decision of the Supreme Court or CEGAT on the classification of UPS. If the decision is adverse, the petitioner must pay the duty within four weeks.
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1998 (2) TMI 133
The High Court of Judicature at Allahabad dismissed the writ petition filed by M/s. Century Laminating Co. Ltd., Ghaziabad, seeking to quash an order for detaining goods valued at Rs. 32,35,200. The petitioner had alternative remedies available, including filing an appeal by March 25, 1998, and seeking ad interim relief. The court refrained from making any comments that could prejudice the case and dismissed the writ petition.
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1998 (2) TMI 132
Issues:
1. Delay in filing application for determination of drawback of customs duties.
2. Power of Central Government to condone delay under Rule 15 of the Customs and Central Excise Duties Drawback Rules, 1971.
3. Statutory obligation of Central Government to consider applications under Rule 15.
4. Impact of practice and policy on exercising statutory powers.
The petitioner sought a writ to quash a communication rejecting their application for condonation of delay in filing for drawback of customs duties. The petitioner, engaged in computer system manufacturing, applied for drawback rate determination after exporting goods, citing a clerical error in the export date. The respondent rejected the delay condonation request, citing lack of power beyond 60 days from export. The petitioner argued the Central Government could condone delays under Rule 15 beyond 60 days. The respondent contended the order was justified, as the application exceeded the 60-day limit. The court analyzed Rules 6(1)(a) and 15, noting Rule 15 allowed exemptions for delays due to reasons beyond control. The court emphasized the Central Government's obligation to consider applications under Rule 15, irrespective of Rule 6 limitations. The court criticized the respondent's practice of not considering requests for delay condonation under Rule 15. Emphasizing the quasi-judicial nature of the power, the court held the Central Government must assess merits and not solely rely on policy. Consequently, the court quashed the communication and directed the Central Government to consider the petitioner's application under Rule 15 promptly, within four months. No costs were awarded.
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1998 (2) TMI 131
What is the date for determination of the rate of duty in respect of the goods imported by the appellant?
Held that:- In the present case the date of entry inwards of the vessel as well as the date of presentation of the Bills of Entry were prior to March 1, 1987 when the duty payable on the goods was reduced. The Tribunal has, therefore, rightly held that duty was payable at 80%, the rate that was prevalent prior to the Notification dated March 1, 1987 and the benefit of the notification dated March 1, 1987, could not be extended to the appellant. In the circumstances, we do not find any merit in these appeals and the same are accordingly dismissed.
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1998 (2) TMI 130
Issues:
Challenge to notification withdrawing exemption under Central Excise Act, jurisdiction of the High Court, maintainability of the writ petition, violation of Article 14 of the Constitution, discretion of the Central Government in granting exemptions.
Analysis:
The petitioner challenged a notification under the Central Excise Act that withdrew an exemption, making the petitioner liable to pay duty that was previously exempt. The petitioner had imported a ship for breaking up before a certain date, and the exemption was later withdrawn, leading to a demand for duty payment. The petitioner had paid customs duty but not the specific duty rate per light displacement tonnage.
The High Court considered the jurisdiction issue raised by the Central Government, arguing that the cause of action did not arise within the state where the High Court is located. The Court emphasized that a reasonable link between the impugned notification and an act within the state is necessary to establish jurisdiction, which the petitioner failed to demonstrate in this case.
Regarding the maintainability of the writ petition, the Court noted that the liability to pay excise duty arose in a different state, and the petitioner's residence in the current state was irrelevant to determine the jurisdiction. The Court also highlighted that the Collector's order, which was not challenged, did not provide a cause of action to question the notifications in the current Court.
On the merits, the Court rejected the petitioner's claim of a violation of Article 14 of the Constitution. It explained that even if the later notification was struck down, the earlier repealed notification could not be revived. The Court also clarified that it could not direct the Central Government to extend exemptions to a class not covered by the notification.
The Court cited a Supreme Court decision emphasizing the wide discretion of the Government in granting, modifying, or repealing exemptions. Ultimately, the Court dismissed the writ petition, stating that the petitioner failed to establish a cause of action within the state and that the discretion to grant exemptions lies with the Central Government.
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1998 (2) TMI 129
Issues:
1. Interpretation of excise duty liability in cases of discounts not availed by customers.
2. Challenge to the Department's stand on excise duty calculation.
3. Applicability of previous judgments by the Appellate Authority, Bombay High Court, and Supreme Court on excise duty liability.
4. Persistence of the Department in issuing show cause notices despite previous judgments.
5. Submission of replies to show cause notices by the petitioner.
6. Intent of the Department to challenge previous orders.
Analysis:
1. The petitioner challenged the Department's stance on excise duty calculation regarding discounts not availed by customers. The Appellate Authority, through Annexure-A order, upheld the petitioner's claim that duty should be payable on the discounted value of goods regardless of customers availing the discount benefit. This decision was based on the understanding that the discount was available to interested customers and known at the time of sales, as indicated in the invoice itself.
2. Subsequent assessments by the authorities, following the principles laid down by the Bombay High Court in a specific case, affirmed the petitioner's liability to pay excise duty on the discounted price of goods. The orders, including Annexure B, were in line with the Bombay High Court's decision, which was later confirmed by the Supreme Court. Despite these legal precedents, the Department persisted in issuing show cause notices, as evidenced by Annexures E and F, demanding excise duty payment on goods where discounts were not availed by customers.
3. The petitioner contended that the Department's actions were unjustified in light of the previous judgments by the Appellate Authority, Bombay High Court, and Supreme Court. The petitioner's counsel highlighted that the Department should not make fresh demands for excise duty considering the legal precedents and the illegality of the levy as declared in Annexures A and B orders.
4. The Central Government Standing Counsel for the respondents indicated an intention to challenge the previous orders, but the Court emphasized that the Department was currently bound by the findings of the Appellate Authority and the higher court judgments. The Court directed the Department to adhere to the previous decisions while dealing with the objections raised by the petitioner in response to show cause notices. The final decision on Annexures E and F was to be made in line with the findings of the Appellate Authority and the decisions of the Bombay High Court and the Supreme Court, thereby disposing of the writ petitions.
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1998 (2) TMI 128
Issues:
- Claim for rebate of excise duty on exported goods under Rule 12 of Central Excise Rules.
- Dispute regarding missing AR-4A applications and issuance of certificates by Customs Department.
- Rejection of rebate claim by Excise Authorities and subsequent appeals.
- Jurisdiction of High Court under Article 226 of the Constitution of India.
Analysis:
The petitioner, a company manufacturing Centrifugal pumps, exported excisable goods and filed applications for rebate under Rule 12 of Central Excise Rules. However, the Customs Department misplaced the AR-4A applications, leading to the issuance of certificates by the Exports Department to enable the petitioner to claim rebates. The Excise Authorities rejected the rebate claim citing non-compliance with the presentation of applications with Customs endorsement, as required by Notification No. 187/62 and Chapter IX of Central Excise Rules. The petitioner's appeals were dismissed by the second respondent and the Customs, Excise and Gold (Control), Appellate Tribunal, Madras Bench, stating that the matter falls under the jurisdiction of the Government of India.
The petitioner filed a writ petition seeking a writ of certiorarified mandamus to quash the orders of the Maritime Collector of Central Excise and grant the rebate claim. During the hearing, the respondents argued that the petitioner could prefer a revision to the Central Government under Section 35EE of the Central Excise Act, rendering the writ petitions not maintainable under Article 226 of the Constitution of India. The petitioner's counsel requested liberty to prefer a revision, which was deemed unnecessary as the Act already provided for it. The Court acknowledged the petitioner's belief in invoking Article 226 jurisdiction but directed them to prefer the revision within six weeks, considering the time spent on the writ petition, and dismissed the writ petitions.
In conclusion, the High Court dismissed the writ petitions, emphasizing the availability of the revision remedy under the Central Excise Act and directing the petitioner to pursue the revision with the Central Government within the specified timeframe.
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1998 (2) TMI 127
The writ petition was filed against a show cause notice regarding the withdrawal of customs duty exemption for importing a CT scanner. The High Court refused to interfere, stating that the petitioner must first show cause and address the factual allegations in the notice. The court also mentioned that the petitioner can raise concerns about lack of information and the limitation period during the personal hearing. The petition was rejected.
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1998 (2) TMI 126
Issues:
1. Violation of Article 20(3) of the Constitution of India by the issuance of summons under Section 108 of the Customs Act, 1962.
2. Whether the petitioner is entitled to have his lawyer present during the recording of his statement pursuant to the impugned summons.
Analysis:
1. The judgment dealt with the challenge to the summons issued under Section 108 of the Customs Act, 1962, alleging a violation of Article 20(3) of the Constitution of India. The petitioner contended that the summons were violative of Article 20(3) as he was being falsely implicated in a case related to smuggling of goods by certain exporters. The respondents argued that the petitioner was not accused of any offence and that the summons were issued in the course of an enquiry under the Customs Act, not related to the FIR. The court analyzed previous judgments on Article 20(3) and held that the petitioner was accused of an offence within the meaning of Article 20(3) but clarified that the scope of the offence under the FIR and the Customs Act enquiry were different. The court concluded that the petitioner must appear before the concerned officer under Section 108 of the Customs Act and answer questions that do not tend to incriminate him, thereby partly allowing the petition.
2. The petitioner also sought directions for permitting the presence of his lawyer at the time of recording his statement pursuant to the impugned summons. The court referred to a Supreme Court judgment and rejected the contention that the petitioner was entitled to have his lawyer present during the recording of his statement under Article 21 of the Constitution. The court held that the petitioner was not entitled to the assistance of a lawyer at the time of recording his statement under Section 108 of the Customs Act, emphasizing that he must answer questions that do not tend to incriminate him. The court partly allowed the petition, declaring the petitioner as a person accused of an offence under Article 20(3) but directing him to appear before the concerned officer and answer questions accordingly.
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1998 (2) TMI 125
Issues:
1. Legality of search and seizure operations under Section 105 of the Customs Act.
Analysis:
The judgment pertains to a case where Customs officers conducted search and seizure operations at the residential premises of the petitioners based on a search warrant issued under Section 105 of the Customs Act. The petitioners sought relief from the court, claiming the search and seizure were illegal and violated Section 105 of the Customs Act. The main contention raised was that the officer responsible for ordering the search did not record any reasons for believing that goods liable for confiscation or relevant documents were secreted at the premises. The petitioners argued that the search was conducted without lawful authority as the prescribed officer failed to document the reasons for his belief as required by Section 105 of the Act.
The court considered the affidavit filed by an Assistant Director from the Directorate of Revenue Intelligence, which detailed the reasons for ordering the search under Section 105 of the Customs Act. The affidavit highlighted suspicious activities related to exports by certain companies, indicating potential fraud and money laundering. The court noted that the information provided in the affidavit and accompanying documents justified the need for the search to locate relevant documents that could be useful for Customs Act proceedings. However, the court refrained from making any judgment on the sufficiency or relevance of the reasons presented, as ongoing Customs proceedings could be affected by premature comments.
Ultimately, the court concluded that the requirements of Section 105 of the Customs Act were met, and there was no basis to declare the search and seizure as illegal or contrary to the Act. The petition was dismissed, with no order as to costs. No additional relief was sought or argued during the proceedings, focusing solely on the legality of the search and seizure concerning Section 105 of the Customs Act.
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1998 (2) TMI 124
Whether there was undervaluation for the purpose of levy of Customs duty under Section 14 of the Customs Act, 1962 in the invoices of the various consignments of ball bearings which were imported by the appellants?
Held that:- The documents seized during the search and seizure that were produced by the appellants before the Customs authorities (genuineness of which was accepted by the Addl. Collector of Customs) show that apart from Mirah Exports a number of other importers, namely, Skefko, Amul Engg., Krishna Engg. Works, Delhi, Jayaveer Forge, Davangere, Ajay Trading Co., Delhi, Ramgopal Lachmi Narayan, Bombay, Sanmukh Engineering Industries, etc. had also imported comparable quantities of similar bearings at the same or lesser prices as that of Mirah Exports and that discount from 50% to 70% on the list prices was the normal invoice price for a number of unconnected importers during the period. The Collector of Customs, while passing the orders dated December 5, 1986 and March 20, 1987 and the Tribunal in the impugned judgment have not taken note of the said documents and the fact that the importers had been given 50% to 70% discount on the prices indicated in the list price.
Thus the appeals are allowed, the impugned judgment of the Tribunal is set aside and it is held that the invoice prices as mentioned in the invoices for the imports of ball bearings by the appellants shall be treated as the value for the purpose of assessment of customs duty under Section 14 of the Act.
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1998 (2) TMI 123
The Supreme Court dismissed the appeal in favor of the Revenue regarding the interpretation of section 40A(7)(b)(ii) of the Income-tax Act, 1961. The appellant was not entitled to claim deduction of Rs. 11,96,413 as it was not provided for in the relevant accounting years. The appeal was dismissed with no order as to costs.
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1998 (2) TMI 122
The Supreme Court held that the High Court's decision in favor of the assessee was based on a previous ruling that was later overturned by the Supreme Court. The case was remanded back to the High Court for a fresh decision. (Case citation: 1998 (2) TMI 122 - SC)
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1998 (2) TMI 121
Issues involved: Determination of whether the amount of Rs. 2,48,348 is a capital receipt or a revenue receipt under section 256(2) of the Income-tax Act, 1961.
Summary:
The case involved an investment company holding equity shares of another company, which issued fully convertible debentures on rights basis. The investment company subscribed to some debentures and transferred the right to subscribe to others, receiving Rs. 2,48,348. The Assessing Officer treated the entire amount as capital gain, but the Tribunal disagreed. The Tribunal held that if the value of the original shares falls below the cost invested, no capital gain remains for tax. The Revenue argued that the decisions relied upon were on rights shares, not debentures. The Court held that when rights shares or debentures are issued, any fall in the value of original shares must be considered in computing capital gain. If the value is not more than the cost invested, the sale amount cannot be taxed as capital gain. Since the original shares were treated as capital assets and there was no finding that the assessee was a dealer in shares, no capital gain remained for tax after considering the fall in value.
The Court discharged the rule based on the above reasoning.
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1998 (2) TMI 120
The writ petition was filed against notices under section 148 of the Income-tax Act for assessment years 1986-87 to 1990-91. A previous petition on the same grounds was dismissed by the court. The petitioner cannot file a second petition on the same grounds and should approach a higher court if aggrieved. The writ petition was dismissed without considering the merits of the case.
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1998 (2) TMI 119
Issues:
Interpretation of section 43B of the Income-tax Act, 1961 regarding unpaid sales tax liability and its impact on income tax assessment for the assessment year 1985-86.
Analysis:
The judgment of the High Court of Gujarat involved a question referred by the Income-tax Appellate Tribunal regarding the application of section 43B of the Income-tax Act, 1961. The case concerned an assessee-company with unpaid sales tax liabilities under the Gujarat Sales Tax Act and the Central Sales Tax Act for the assessment year 1985-86. The Assessing Officer disallowed the unpaid amount under section 43B, a decision upheld by the Commissioner of Income-tax (Appeals). However, the Appellate Tribunal, following a previous decision in Chandulal Venichand's case, held that no addition could be made for the unpaid sales tax liability. The High Court, in CIT v. Chandulal Venichand, had previously interpreted section 43B to prevent disadvantaging taxpayers who discharge their statutory liabilities within the prescribed time. The court emphasized that the legislative intent was not to penalize taxpayers meeting their obligations promptly. The introduction of the first proviso and Explanation 2 to section 43B aimed to mitigate hardships faced by taxpayers, particularly concerning the payment of sales tax for the last quarter. The court clarified that the proviso was retrospective in operation and necessary to prevent undue hardship on taxpayers.
The Supreme Court's decision in Allied Motors (P.) Ltd. v. CIT further clarified the interpretation of section 43B, endorsing the High Court's opinion in Chandulal Venichand's case. The Supreme Court emphasized that the first proviso to section 43B was added to prevent unintended outcomes of the section, ensuring that taxpayers who paid sums in the next accounting year before the due date for filing returns could claim deductions. The retrospective effect of Explanation 2 from April 1, 1984, aimed to remove ambiguities regarding sums payable under section 43B(a). The Supreme Court underscored that section 43B, the first proviso, and Explanation 2 must be read together to ascertain the true legislative intent. The proviso rectified an omission in the law, preventing section 43B from overly restricting permissible deductions. The Supreme Court's decision aligned with the High Court's interpretation, emphasizing the retrospective nature of the first proviso.
Based on the precedents set by the Supreme Court and the High Court, the High Court of Gujarat concluded that if unpaid sales tax liability is settled before the due date for filing returns under section 139(1), no addition could be made under section 43B of the Income-tax Act. The judgment favored the assessee, ruling against the Revenue. The court's decision aligned with the interpretations provided in Chandulal Venichand's case and Allied Motors (P.) Ltd., ensuring that taxpayers meeting their obligations within the prescribed timelines are not unfairly penalized.
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1998 (2) TMI 118
The High Court of Calcutta ruled in favor of the assessee in a case involving interest under section 215 of the Income-tax Act, 1961. The assessee had paid more tax than the tax assessed in the regular assessment, so interest could not be charged on the reassessment made under section 147. The judgment was agreed upon by Judges Bijitendra Mohan Mitra and Y. R. Meena.
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1998 (2) TMI 117
Issues Involved:
1. Accrual of liability to pay the entire amount.
2. Accrual of liability for payment of technical know-how fees.
3. Nature of payment for technical know-how fees as revenue or capital expenditure.
Summary:
Issue 1: Accrual of liability to pay the entire amount
The Tribunal held that the liability to pay the entire amount of DM 1.40 million did not arise on the execution of the agreement but only in the account period. The High Court affirmed this view, noting that the accrual of liability was dependent upon the approval and/or sanction of the RBI. The law, as settled by the Supreme Court in Nonsuch Tea Estate Ltd. vs. CIT, dictates that where accrual of liability is dependent on statutory approval, it accrues only upon such approval. The RBI's approval in this case was received in the relevant previous years, thus the liability accrued in those years.
Issue 2: Accrual of liability for payment of technical know-how fees
The Tribunal held that the liability for the payment of technical know-how fees accrued at the stated intervals as per clause (i) of the agreement and arose only when the permission of RBI was received. The High Court agreed, emphasizing that under s. 9 of the Foreign Exchange Regulation Act, 1973, payments to persons resident outside India required RBI approval. Therefore, the liability to pay the technical know-how fees arose only upon receipt of such approval.
Issue 3: Nature of payment for technical know-how fees as revenue or capital expenditure
The Tribunal concluded that the payment made by the assessee-company to Deutz for the use of the know-how was revenue in nature. The High Court upheld this decision, noting that the expenditure related to the carrying on of the business and was an integral part of the profit-making process. The agreement's conditions of non-partibility, confidentiality, and secrecy indicated that the assessee only obtained the right to use the know-how, not its acquisition. Citing various Supreme Court and High Court decisions, the High Court reaffirmed that the expenditure was revenue in nature and allowable as a deduction u/s 37 of the IT Act, 1961.
Conclusion:
The High Court answered all three questions in the affirmative and in favor of the assessee, confirming that the payments were revenue expenditures and allowable as deductions in the years the RBI approval was received. The reference was disposed of with no order as to costs.
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1998 (2) TMI 116
Issues:
1. Jurisdictional challenge regarding the quashing of the order dated January 8, 1997, passed by the Central Board of Direct Taxes.
2. Interpretation of the powers of the Central Board of Direct Taxes in compounding offences under section 279 of the Income-tax Act, 1961.
Analysis:
1. The petitioner, a doctor and shareholder in a company, sought to quash the order rejecting his request for compounding offences under section 276CC of the Income-tax Act, 1961. The petitioner's appeal against the conviction was pending in the High Court of Madras. The High Court of Delhi dismissed the petition on grounds of jurisdiction, stating that the cause of action arose in Chennai, where the competent authorities for compounding were located. The petitioner's direct approach to the Central Board of Direct Taxes in Delhi was deemed misconceived, as per the territorial jurisdiction rules.
2. The petitioner argued that the Central Board of Direct Taxes had the power to issue orders for compounding offences under section 279, allowing the petitioner to approach the Board directly. However, the court clarified that the Board's power was limited to issuing general guidelines and policies, not individual case-specific directions for compounding. The court highlighted that the petitioner should have approached the Chief Commissioner or Director-General, as specified in section 279(2), instead of directly petitioning the Central Board of Direct Taxes.
3. The court analyzed the retrospective operation of the Explanation added to section 279 through the Finance (No. 2) Act, 1991. The explanation clarified the Board's power to issue instructions or directions for the proper composition of offences under section 279. The court emphasized that this power was for general guidelines and policy decisions, not for individual case-specific directions. The petitioner's misconception in directly approaching the Central Board of Direct Taxes led to the dismissal of the petition by the High Court of Delhi.
4. The court concluded that the petitioner's petition was not maintainable within the territorial jurisdiction of the Delhi High Court. The petitioner was advised to approach the Chief Commissioner or Director-General for compounding offences, as per the provisions of the Income-tax Act, 1961. The court dismissed the petition, stating that the petitioner was not entitled to any relief within the jurisdiction of the Delhi High Court, emphasizing the importance of following the correct procedure for seeking compounding of offences under the Income-tax Act.
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1998 (2) TMI 115
Issues:
1. Stay of demand under section 220(6) of the Income-tax Act.
2. Jurisdiction of appellate authority to grant stay of tax collection.
3. Validity of assessing authority's order requiring payment before considering stay application.
4. Disposal of writ petition and directions for stay application.
Analysis:
The petitioner, an assessee, appealed against a demand of Rs. 10,41,633 raised under section 143(3) of the Income-tax Act for the assessment year 1995-96. The assessing authority directed the petitioner to pay 50% of the demand pending appeal, failing which recovery measures would be initiated. The petitioner challenged this order through a writ petition, arguing that the assessing authority's order was passed without due consideration. The High Court noted that the appellate authority has inherent power to grant stay of tax collection, as established in various judgments, including those of the Supreme Court and High Courts. The Court emphasized that the appellate authority should be approached for stay before seeking relief through a writ petition under Article 226 of the Constitution of India.
Regarding the assessing authority's order, the Court found it to be arbitrary and not in line with legal principles. The order mandated payment of 50% of the demand before considering the stay application, without evaluating the merits of the case. Consequently, the Court set aside the assessing authority's order and directed the petitioner to file a stay application before the appellate authority within one week. The appellate authority was instructed to decide on the stay application within thirty days, ensuring a stay on tax recovery until a decision is made. The Court clarified that failure to file the application within the specified period would result in the vacating of the stay order.
In conclusion, the writ petition was disposed of with no costs imposed on any party. The Court provided directions for the disposal of the stay application, emphasizing cooperation from the petitioner and adherence to the specified timelines. All parties were instructed to act upon a signed copy of the order, with the usual undertaking.
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9911796707
