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1969 (4) TMI 109
Issues Involved:
1. Res judicata
2. Estoppel
3. Admissibility of evidence under Section 92 of the Evidence Act
4. Jurisdiction of the High Court under Section 115 of the Code of Civil Procedure
Detailed Analysis:
1. Res Judicata:
The primary issue was whether the consent decree in suit No. 149 of 1960 barred defendants Nos. 5 and 6 from contesting the nature of the document dated November 27, 1954, as a lease. The Court of Small Causes initially held that the consent decree did not decide that the transaction was a lease and allowed questions regarding the nature of the agreement to be asked during cross-examination. The High Court, however, concluded that the consent decree created a bar of res judicata, preventing the reopening of the issue. The Supreme Court disagreed, stating that a consent decree does not operate as res judicata because it is merely a record of a contract between the parties, not an adjudication by the Court.
2. Estoppel:
The second issue was whether defendants Nos. 5 and 6 were estopped from leading evidence or questioning the nature of the agreement due to the consent decree. The trial court allowed the defendants to question the nature of the agreement, but the High Court ruled that the consent decree estopped the defendants from contesting the issue. The Supreme Court held that the High Court had no jurisdiction to make such a finding in a revision application, as the trial court had not yet decided on the issue of estoppel.
3. Admissibility of Evidence under Section 92 of the Evidence Act:
The third issue concerned whether evidence regarding the nature of the agreement could be excluded under Section 92 of the Evidence Act. The trial court allowed the evidence, stating that the agreement was not clear enough to exclude oral evidence of surrounding circumstances. The Supreme Court did not directly address this issue but implied that the trial court's decision to allow the evidence was within its jurisdiction.
4. Jurisdiction of the High Court under Section 115 of the Code of Civil Procedure:
The final issue was whether the High Court had jurisdiction under Section 115 of the Code of Civil Procedure to revise the trial court's order. The Supreme Court clarified that the High Court's jurisdiction under Section 115 is limited to cases where the subordinate court has exercised jurisdiction not vested in it by law, failed to exercise jurisdiction so vested, or acted illegally or with material irregularity. The Supreme Court found that the trial court had not decided any issues at the stage of recording evidence and that the High Court had overstepped its jurisdiction by making findings on issues not yet decided by the trial court.
Conclusion:
The Supreme Court set aside the High Court's order and directed the trial court to proceed with the suit, emphasizing that the trial court should rectify the form of issues Nos. 11, 12, and 13. The Court also recommended that the trial court expedite the hearing and disposal of the suit. Filmistan was ordered to pay the costs of the appeal in both the Supreme Court and the High Court.
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1969 (4) TMI 108
Issues Involved:
1. Jurisdiction of the Industrial Tribunal under the Industrial Disputes Act.
2. Interpretation of Section 61 of the Andhra Pradesh Co-operative Societies Act.
3. Competence of the Registrar to decide disputes related to conditions of service.
4. Validity of the reference to the Industrial Tribunal for issues related to transfers of employees.
Detailed Analysis:
1. Jurisdiction of the Industrial Tribunal under the Industrial Disputes Act:
The primary issue in these appeals is whether the jurisdiction of the Industrial Tribunal to adjudicate on the industrial dispute referred to it under Section 10(1)(d) of the Industrial Disputes Act was barred by the provisions of Section 61 of the Andhra Pradesh Co-operative Societies Act. The Tribunal and the High Court both rejected the plea taken by the Banks, expressing the view that the disputes referred to the Tribunal were not capable of being decided by the Registrar of the Co-operative Societies under Section 61 of the Act. Consequently, the reference to the Industrial Tribunal under the Industrial Disputes Act was deemed competent.
2. Interpretation of Section 61 of the Andhra Pradesh Co-operative Societies Act:
Section 61 of the Act stipulates that any dispute touching the constitution, management, or business of a society, other than a dispute regarding disciplinary action taken by the society against a paid employee, must be referred to the Registrar for decision. The Banks argued that the language of Section 61 was wide enough to cover the disputes referred to the Tribunal, as they touched the business of the co-operative societies. However, the Court, referencing a recent decision in *The Deccan Merchants Cooperative Bank Ltd. v. Messrs Dalichand Jugraj & Others*, held that the term "business" in this context refers to the actual trading or commercial activities of the society, not the conditions of service of its employees. Therefore, the disputes related to alteration of conditions of service could not be referred to the Registrar under Section 61.
3. Competence of the Registrar to decide disputes related to conditions of service:
The Court noted that the Registrar, under Section 62(4) of the Act, is mandated to decide disputes in accordance with the provisions of the Act, the Rules, and the bye-laws. The Registrar could not alter conditions of service laid down in the bye-laws, as any alteration would require a change in the bye-laws themselves. Since the Registrar's powers are limited by the Act, he is not competent to grant the reliefs claimed by the workmen, which pertain to altering conditions of service.
4. Validity of the reference to the Industrial Tribunal for issues related to transfers of employees:
The Court did not find it necessary to address the competence of the reference to the Industrial Tribunal for issues related to the transfers of employees, as this point was not raised in the petitions filed under Article 226 of the Constitution before the High Court. The competence of the reference to the Industrial Tribunal as a whole was challenged, and thus, the Court did not need to decide whether specific issues within the reference were competently referred.
Conclusion:
The appeals were dismissed, and the decision of the High Court, which upheld the jurisdiction of the Industrial Tribunal to deal with the industrial dispute referred to it, was affirmed. The Court held that the disputes related to alteration of conditions of service could not be referred to the Registrar under Section 61 of the Andhra Pradesh Co-operative Societies Act, and the Industrial Tribunal was competent to grant the reliefs sought in the reference.
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1969 (4) TMI 107
Whether the Gold (Control) Act, 1968 (Act No. 45 of 1968) is constitutionally valid?
Held that:- the provisions held to be invalid are not inextricably bound up with the remaining provisions of the Act. It is difficult to hold that Parliament would not have enacted the impugned Act at all without including that part which is found to be ultra vires. The Act still remains substantially the Act as it was passed, that is, an Act to provide for the control, production, manufacture, supply, distribution, use and possession of gold and gold ornaments and articles of gold. In the result we hold that the following provisions of the impugned Act are invalid.
Sections 5(2)(b), 27(2)(d), 27(6), 32, 46, 88 and 1 00.
The petitioners are, therefore, entitled to a writ in the nature of mandamus under Art. 32 of -the Constitution commanding the respondents not to take any steps to implement any of the invalid provisions of the Act. Writ Petitions 282, 407 and 408 of 1968 are allowed to this extent.
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1969 (4) TMI 106
Whether the High Court could interfere under Articles 226 & 227 of the Constitution with the order of the appellate court in proceedings under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, when a petition for revision under Section 115, Civil Procedure Code, against the same order had been previously dismissed by a single Judge of that court?
Held that:- On the assumption that the order of the appellate court had not merged in the order of the single Judge who had disposed of the revision petition we are of the view that a writ petition ought not to have been entertained by the High Court when the respondent had already chosen the remedy under Section 115 of the CPC. If there are two modes of invoking the jurisdiction of the High Court and one of those modes has been chosen and exhausted it would not be a proper and sound exercise of discretion to grant relief in the other set of proceedings in respect of the same order of the subordinate court. The refusal to grant relief in such circumstances would be in consonance with the anxiety of the court to prevent abuse of process as also to respect and accord finality to its own decisions. Appeal is allowed and the judgment of the division bench of the High Court is hereby set aside
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1969 (4) TMI 105
Interest exceeding the principal of the loan - Held that:- Section 9 of Madhya Pradesh Money Lenders Act 13 of 1934 prohibits the Courts from awarding interest exceeding the principal of the loan. Counsel for the appellants contends that if all the amounts deposited from time to time by the debtors be aggregated, it will appear that an amount exceeding the loan was paid. But the prohibition of the statute is against the making of a decree for arrears of interest exceeding the amount of loan. In the present case the decree awards interest amounting to ₹ 746-30, whereas the principal is ₹ 33,866-51.
The Court is concerned at this stage to pass a decree absolute for sale in a mortgage suit. It is not concerned to determine the respective rights of the mortgagees inter se. The mortgagees' interest is fully represented before the Court. Whether or not the Custodian of Evacuee Property is entitled to the money or that the evacuees have a subsisting interest is a matter which cannot be decided in this appeal. That was made clear by the judgment of the High Court in the application filed by the Custodian of Evacuee Property by order dated November 12, 1962, when the High Court observed. Appeal dismissed.
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1969 (4) TMI 104
Whether the application made by the appellant under s. 34 of the Act before the Calcutta High Court was an application in a reference within the meaning of s. 31(4) of the same Act?
Held that:- The application for stay under s. 34 of the Act cannot be treated as an application in a reference under s. 31(4) of the Act. Therefore, the Subordinate Judge, First Class, Delhi was right in holding that the application under s. 20 of the Act was maintainable in his Court and for making a reference of the dispute to the arbitrator mentioned in the agreement. Accordingly we set aside the order of the Punjab High Court and restore the order of the Subordinate Judge, First Class, Delhi dated January 29, 1963 allowing the application filed by the appellant under s. 20 of the Arbitration Act, 1940. The appeal is allowed
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1969 (4) TMI 103
Whether there is reasonable ground for believing that selection board was likely to have been biased?
Whether the principles of natural justice apply to administrative proceedings?
Whether mere fact that one of the members of the Board was biased against some of the petitioners cannot vitiate the entire proceedings?
Held that:- Unable to accept the contention that in adjudging the suitability of the candidates the members of the board did not have any mutual discussion. It is not as if the records spoke of themselves. We are unable to believe that the members of selection board functioned like computers. At this stage it may also be noted that at the time the selections were made, the members of the selection board other than Naqishbund were not likely to have known that Basu had appealed against his supersession and that his appeal was pending before the State Government. Therefore there was no occasion for them to distrust the opinion expressed by Naqishbund. Hence the board in making the selections must necessarily have given weight to the opinion expressed by Naqishbund.
What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case, the framework of the law under which the enquiry is held and the constitution of the Tribunal or body of persons appointed for that purpose. Whenever a complaint is made before a court that some principle of natural justice had been contravened the court has to decide whether the observance of that was necessary for a just decision on the facts of that case.
As seen earlier Naqishbund was a party to the preparation of the select list in order of preference and that he is shown as No. 1 in the list. To that extent he was undoubtedly a judge in his own case, a circumstance which is abhorrent to our concept of justice. Now coming to the selection of the officers in the. junior scale service, the selections to both senior scale service as well as junior scale service were made from the same pool. Every officer who had put in a service of 8 years or more, even if he was holding the post of an Assistant Conservator of Forests was eligible for being selected for the senior scale service. In fact some Assistant Conservators have been selected for the senior scale service. At the same time some of the officers who had put in more than eight years of service had been selected for the junior scale service. Hence it is not possible to separate the two sets of officers. For the reasons mentioned above these petitions are allowed and the impugned selections set aside.
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1969 (4) TMI 101
whether the power of legislating on relationship between landlord and tenant in respect of house accommodation or buildings would -appropriately fall in Entry 21 of List II of the Seventh Schedule to the Government of India 3SupCI69- 15 Act, 1935, or in the corresponding Entry 18 of List II of the Seventh Schedule to the Constitution?
Held that:- The power of the State Legislature to legislate in respect of landlord and tenant of buildings is to be found in Entries 6, 7 and 13 of List III of the Seventh Schedule to the Constitution and not in Entry 18 of List 11, and that that power was circumscribed by the exclusive power of Parliament to legislate on the same subject under Entry 3 of List I. Appeal dismissed
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1969 (4) TMI 100
Issues:
1. Interpretation of the definition of "dealer" under section 2(f) of the Rajasthan Sales Tax Act, 1954.
2. Determination of whether an auctioneer conducting sales on behalf of a principal is liable to pay sales tax.
3. Analysis of the functions and responsibilities of an auctioneer in the sale process.
4. Comparison with relevant case laws to ascertain the status of an auctioneer as a dealer.
Analysis:
The judgment pertains to two applications filed by the Commercial Taxes Officer under section 15(3A) of the Rajasthan Sales Tax Act, 1954, seeking direction to the Board of Revenue to refer the case to the court. The respondent, a firm appointed as a railway auctioneer, was reassessed for sales tax for the years 1962-63 and 1963-64. The Board of Revenue determined that the respondent did not fall within the definition of a dealer under section 2 of the Act and set aside the reassessment orders. The key issue revolved around whether the respondent, as an auctioneer, qualified as a dealer under the Act.
The court scrutinized the agreement between the respondent and the railway administration, highlighting that the auctioneer's role was limited to conducting sales as appointed by the administration. The auctioneer was bound by specific conditions set by the Chief Engineer, including the arrangement of sales, collection of earnest money, and delivery orders. However, crucial functions such as determining sale conditions, accepting bids, and passing property to the purchaser remained under the administration's purview. The court referenced a Madras High Court case to emphasize that an auctioneer acting as an agent for securing bids did not constitute a dealer under the sales tax law.
Drawing from legal precedents, the court concluded that the auctioneer in question did not meet the criteria to be classified as a dealer under section 2(f) of the Act. The court rejected the applications, asserting that the auctioneer's role was akin to that of a servant carrying out functions on behalf of the principal, the railway administration. The judgment underscored that the auctioneer's responsibilities did not align with those of a dealer engaged in the business of selling goods. Consequently, the court dismissed the applications, emphasizing that no grounds existed to direct the Board of Revenue to state the case, and awarded costs to the respondent.
In essence, the judgment delves into the nuanced interpretation of the term "dealer" within the context of an auctioneer's role, emphasizing the delineation between conducting sales on behalf of a principal and engaging in the business of selling goods independently. By analyzing the specific functions and obligations of the auctioneer vis-`a-vis the railway administration, the court elucidated that the auctioneer's activities did not amount to dealer status under the statutory provisions, thereby leading to the dismissal of the applications.
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1969 (4) TMI 99
Issues:
1. Liability of a partner for tax assessed on a firm without a notice of demand.
2. Interpretation of partnership entity in taxation statutes.
3. Recovery proceedings against individual partners for firm's tax debt.
4. Comparison of recovery provisions under different tax laws.
5. Authority to recover sales tax through arrest and detention of partners.
Detailed Analysis:
1. The petitioner, a partner in a firm assessed for sales tax, sought relief from a warrant of arrest issued for non-payment of tax without receiving a notice of demand. The petitioner argued that without a notice addressed to him, he cannot be considered in default. The court acknowledged that under the U.P. Sales Tax Act, a firm is distinct from its partners for assessment purposes. However, upon assessment, the firm and its partners are treated as one entity, making partners liable for the firm's tax debts. The court held that a notice of demand to the firm extends to partners, making them individually liable for tax payment.
2. The court emphasized that while a partnership is recognized as a separate entity during assessment, once an assessment order is made, the distinction between the firm and its partners dissolves. The court referred to legal precedents to support the view that partners are jointly and severally liable for the firm's debts, allowing creditors to recover debts from individual partners. The court clarified that a notice of demand creates a debt for which partners are liable, similar to any other firm debt, under general partnership law.
3. The judgment highlighted the authority of tax authorities to recover tax debts from individual partners through coercive measures, including arrest and detention. The court cited provisions in the U.P. Sales Tax Act that empower authorities to recover tax arrears as land revenue and compared these provisions to those in the Indian Income-tax Act. The court noted that recovery proceedings, including arrest and detention, are permissible against partners for the firm's tax liabilities, aligning with the principles established in previous legal decisions.
4. The court drew parallels between the recovery mechanisms under the U.P. Sales Tax Act and the Indian Income-tax Act, emphasizing the authority of tax authorities to invoke civil procedure rules for recovery. The court highlighted the recent amendment to the U.P. Sales Tax Act, which granted powers to collectors for recovery similar to those available under the Code of Civil Procedure. This alignment of recovery provisions allowed for consistent treatment of tax recovery across different tax laws.
5. Regarding the specific issue of recovery through arrest and detention, the court referenced Section 51 of the Code of Civil Procedure, which permits execution of a decree by arresting and detaining the judgment-debtor. The court clarified that authorities must adhere to the legal restrictions when executing detention orders. The judgment concluded that the tax authorities were competent to recover the sales tax from the petitioner, including through arrest and detention, provided that the restrictions under the relevant legal provisions were followed. The court dismissed the petition without costs, affirming the authority of tax authorities to pursue recovery proceedings against individual partners for the firm's tax liabilities.
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1969 (4) TMI 98
Issues Involved: Validity of notice under Rule 33 for reassessment under Section 19(1) of the Madhya Pradesh General Sales Tax Act, 1958; Compliance with statutory provisions; Requirement of specifying the amount of escaped turnover in the notice; Reason for reassessment based on irregular accounts.
Issue-wise Detailed Analysis:
1. Validity of Notice under Rule 33 for Reassessment under Section 19(1):
The petitioner contended that the notice issued under Rule 33 was the foundation of jurisdiction for reassessment under Section 19, and thus, it must strictly comply with Rule 33 and Form No. XVI. The notices in question did not contain the particulars of escapement, i.e., the amount of turnover that escaped assessment. The court, however, held that Section 19 does not explicitly require a notice. The section mandates that the dealer be given a reasonable opportunity of being heard and that the inquiry be conducted as necessary. Rule 33 and Form XVI, which provide for a notice, are steps in the process of reassessment to ensure the dealer's reasonable opportunity of being heard. The court emphasized that any irregularity or defect in the notice does not invalidate the reassessment proceedings unless it is shown that the dealer was prejudiced and was not afforded a reasonable opportunity of being heard.
2. Compliance with Statutory Provisions:
The court referred to Section 19(1) of the Act, which allows reassessment if any sale or purchase of goods chargeable to tax has been under-assessed or has escaped assessment. The court noted that the rule-making power under Section 51 of the Act enabled the State Government to make rules for carrying out the purpose of the Act, including reassessment procedures under Rule 33. The court concluded that the requirement of notice under Rule 33 is a procedural step to ensure compliance with the statutory mandate of providing a reasonable opportunity to the dealer, rather than a foundational jurisdictional requirement.
3. Requirement of Specifying the Amount of Escaped Turnover in the Notice:
The petitioner argued that the notice was invalid as it did not specify the amount of escaped turnover. The court held that while the notice did not mention the exact amount of turnover that had escaped assessment, it did indicate that reassessment proceedings were to be taken for sales that had escaped assessment. The court found this sufficient, stating that the exact amount of escaped turnover could only be determined after hearing the dealer. The court further noted that the petitioner was informed of the reasons for reassessment and had the opportunity to inspect the relevant records.
4. Reason for Reassessment Based on Irregular Accounts:
The petitioner contended that the reason given in the notices-that turnover had escaped assessment due to irregular accounts-was not valid, as the initial assessments were also best judgment assessments based on the same ground. The court disagreed, stating that non-maintenance of accounts could lead to escapement of turnover from assessment, even if the initial assessments were best judgment assessments. The court emphasized that the petitioner had been informed of the reasons for reassessment and had been given the opportunity to inspect the records, including the report by the flying squad, which formed the basis for the reassessment notices.
Conclusion:
The court dismissed the petition, holding that the irregularities pointed out in the notices were not such as to vitiate the reassessment proceedings. The court emphasized that the petitioner had been afforded a reasonable opportunity of being heard and that any defects in the notices had not prejudiced the petitioner. The petition was dismissed with costs, and the outstanding amount of security deposit was ordered to be refunded to the petitioner.
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1969 (4) TMI 97
Issues Involved:
1. Jurisdiction of Civil Courts
2. Legality of Tax Levy and Collection
3. Claim for Refund
4. Award of Interest
Detailed Analysis:
Jurisdiction of Civil Courts:
The main question debated was whether civil courts have the jurisdiction to entertain suits for refund of taxes collected under the Andhra Pradesh General Sales Tax Act. The State Government argued that the suits are barred by Section 36 of the Act, which precludes courts from setting aside, modifying, or questioning the validity of assessment orders. The court held that the jurisdiction of civil courts is not barred because the claim for refund does not pertain to the merits or propriety of the assessment itself but challenges the legality of the tax collection due to retrospective legislative amendments. The court also referenced the Supreme Court's decision in Dhulabhai v. State of Madhya Pradesh, which allows civil suits in cases where the levy is made under an unconstitutional provision or where no adequate remedy exists under the special enactment.
Legality of Tax Levy and Collection:
The plaintiffs contended that the tax levy and collection for the purchase of copra were illegal following the retrospective amendment of the Act by Act 26 of 1961, which included copra within the definition of "coconut" effective from June 15, 1957. The court agreed, noting that the single point tax had already been paid on coconuts from which the copra was extracted, making a separate levy on copra illegal. The court found that the retrospective amendment invalidated the tax collection on copra, rendering the levy without legal basis.
Claim for Refund:
The court upheld the plaintiffs' claim for a refund, stating that the retrospective amendment to the Act rendered the tax collection illegal. The court emphasized that there was no need for a de novo inquiry into the facts, as the evidence showed that the single point tax had already been paid on the coconuts. The court also noted that the special enactment did not provide any machinery for refund, thus justifying the plaintiffs' resort to civil courts for restitution.
Award of Interest:
The State Government contended that the award of interest was unjustified. However, the court found that the claim for interest was valid from the date of refusal by the authorities to render restitution. The court held that restitution implies the payment of interest at a reasonable rate to put the person entitled to restitution in the position they would have occupied but for the illegal retention of money. The court distinguished the present case from the decision in Mothey Gangaraju v. State of Andhra Pradesh, which did not establish a principle justifying the disallowance of interest in cases of illegal tax retention.
Conclusion:
The appeals by the State of Andhra Pradesh were dismissed, with the court upholding the jurisdiction of civil courts to entertain the suits, the illegality of the tax levy and collection, the plaintiffs' entitlement to a refund, and the award of interest. The court emphasized that the special enactment did not provide an adequate remedy for the plaintiffs, thus justifying their recourse to civil courts for restitution.
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1969 (4) TMI 96
The High Court of Allahabad ruled that besan (atta of gram dal) is taxable under section 3-A at the stage of manufacture or import. The court held that besan is considered as "atta" under the notification, and thus not taxable. The Commissioner, Sales Tax, was ordered to pay the dealer Rs. 100 as costs.
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1969 (4) TMI 95
Issues Involved:
1. Constitutionality and validity of the Amendment Act 26 of 1961.
2. Alleged contravention of Articles 13, 14, 19, 286, and Part XIII of the Constitution.
3. Legislative competence of the State to levy tax on mica.
4. Requirement of President's assent under Article 200.
5. Alleged discrimination under the amended provisions.
6. Impact on the freedom of trade and commerce under Article 301.
Issue-wise Detailed Analysis:
1. Constitutionality and Validity of the Amendment Act 26 of 1961:
The petitioners challenged the legality, constitutionality, and validity of the Amendment Act 26 of 1961, asserting that it was invalid for want of the President's assent and contravened various constitutional provisions. They sought a writ of mandamus to direct the State Government and tax authorities to forbear from giving effect to the provisions of the Second Amendment Act and to refund the tax already collected.
2. Alleged Contravention of Articles 13, 14, 19, 286, and Part XIII of the Constitution:
The petitioners argued that the amended provisions contravened Articles 13, 14, 19, and 286 of the Constitution. They claimed that the amendment interfered with the free flow of trade and commerce guaranteed by Article 301 and was not justified under any provisions in Part XIII. They also argued that the amendment suffered from discrimination as mica imported from other States was not subjected to this tax, while mica produced or manufactured in Andhra Pradesh was taxed.
3. Legislative Competence of the State to Levy Tax on Mica:
The petitioners contended that the legislative competence of the State was questionable as the amendment, in pith and substance, related to item No. 41 in the Union List, which is within the exclusive domain of the Parliament. They also argued that it could be considered a law with respect to duties enumerated in item 84 in the Union List.
4. Requirement of President's Assent Under Article 200:
The petitioners argued that the amending Act was void as it was not reserved for the consideration of the President in compliance with the requirement of Article 200 of the Constitution. However, the respondents countered that there was no obligation on the Governor to withhold assent and reserve the Bill for the President's consideration under Article 200.
5. Alleged Discrimination Under the Amended Provisions:
The petitioners claimed that the amendment was discriminatory as it taxed mica produced or manufactured in Andhra Pradesh but not mica imported from other States. The respondents argued that the discrimination alleged was not true, as the last dealer who purchased mica in the State was liable to tax irrespective of whether the goods were imported from other States or produced or manufactured in Andhra Pradesh.
6. Impact on the Freedom of Trade and Commerce Under Article 301:
The petitioners contended that the levy of tax on mica interfered with the free flow of trade and commerce guaranteed by Article 301 of the Constitution. They argued that the taxes imposed were neither regulatory nor compensatory and hence were hit by Article 301. The respondents countered that the tax on purchase by the last dealer in the State did not impede the free flow of trade and commerce and was not prohibited by Article 301. They further argued that Article 304 empowered the State Legislature to impose taxes on goods imported from other States, provided similar goods manufactured or produced in the State were subjected to the same tax.
Judgment:
The court held that the impugned provisions did not contravene Article 286 as no tax was being levied on the purchase or sale that immediately occasioned the export of mica. The court also found no inconsistency between sections 5 and 7 of the principal Act and section 38 of the A.P.G.S.T. Act. The court ruled that the impugned provisions did not directly or immediately impede the free flow of trade and commerce and thus did not fall within the inhibition of Article 301. The plea that the amendment was bad for want of the President's assent under Article 200 was also rejected. The court concluded that the impugned legislation was within the purview of entry 54 in the State List and did not infringe upon the petitioners' rights under Articles 14, 19, etc. Consequently, the writ petitions were dismissed with costs.
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1969 (4) TMI 94
Issues Involved:
1. Reassessment of taxable turnover including foreign liquor sales.
2. Constitutionality of sales tax on foreign liquor under Articles 301 and 304.
3. Inclusion of sales tax collected under the Madras Prohibition Act in taxable turnover.
4. Inclusion of gallonage fee in taxable turnover.
5. Levy of sales tax on sprayers used for agricultural purposes.
Detailed Analysis:
1. Reassessment of Taxable Turnover Including Foreign Liquor Sales:
The petitioners, Messrs Spencer and Company, contested the reassessment notices issued by the respondent for the assessment years 1961-62 to 1964-65, arguing that the reassessment to include foreign liquor sales and the collection of 50% tax under the Madras Prohibition Act and gallonage fee in the taxable turnover was illegal and without jurisdiction. The court held that the reassessment was permissible under section 3 of the Madras General Sales Tax Act, 1959, and dismissed the writ petitions (W.Ps. Nos. 2787 to 2790 of 1966).
2. Constitutionality of Sales Tax on Foreign Liquor Under Articles 301 and 304:
The petitioners argued that the proposed tax on foreign liquor violated Articles 301 and 304 of the Constitution of India. The court found that the sales tax on foreign liquor did not infringe upon the freedom of trade as envisaged in Article 301 and was compensatory and regulatory in nature. The court cited the Supreme Court's decision in State of Madhya Pradesh v. Bhailal Bhai to support its conclusion that the levy was constitutional and dismissed the contention.
3. Inclusion of Sales Tax Collected Under the Madras Prohibition Act in Taxable Turnover:
The petitioners contended that including the sales tax collected under section 21-A of the Madras Prohibition Act in the taxable turnover under the Madras General Sales Tax Act was illegal. The court agreed, stating that the sales tax collected under section 21-A retained its distinct individuality as a tax and could not be deemed part of the price of the liquor sold. The court upheld the petitioners' contention and directed that the sales tax collected under the Madras Prohibition Act should not be included in the assessable turnover for the purposes of the Madras General Sales Tax Act.
4. Inclusion of Gallonage Fee in Taxable Turnover:
The petitioners argued that the gallonage fee collected under the Madras Liquor (Licence and Permit) Rules, 1960, should not be included in the taxable turnover. The court disagreed, stating that the gallonage fee was an expense necessary for the trade and formed part of the consideration for the sale of liquor. The court held that the gallonage fee could be included in the taxable turnover and dismissed the petitioners' contention.
5. Levy of Sales Tax on Sprayers Used for Agricultural Purposes:
In T.C. No. 195 of 1967, the petitioners contested the inclusion of the cost of sprayers in the assessable turnover, arguing that sprayers used for agricultural purposes should be exempt under item 23 of the First Schedule to the Madras General Sales Tax Act. The court found that the exclusion of articles used for agricultural purposes was unqualified and intended by the Legislature. The court held that all articles made of any metal used for agricultural purposes were exempt from tax under item 23 and directed the assessing authority to revise the assessment accordingly.
Judgment Summary:
The court dismissed W.Ps. Nos. 2787 to 2790 of 1966 and W.Ps. Nos. 2988 to 2991 of 1966, with specific directions to the assessing authority to exclude the sales tax collected under section 21-A of the Madras Prohibition Act from the assessable turnover. T.Cs. Nos. 102 to 104 of 1967 and T.Cs. Nos. 194 and 195 of 1967 were allowed in part, with directions to reassess the taxable turnover in accordance with the principles laid down in the judgment. No order as to costs was made in any of the cases.
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1969 (4) TMI 93
Issues:
1. Determination of whether burnt cinders are classified as "coal" or "coke" under the Andhra Pradesh General Sales Tax Act.
Analysis:
The case revolved around the classification of burnt cinders as either "coal" or "coke" under the Andhra Pradesh General Sales Tax Act. The central question was whether burnt cinders fall within the definition of "coal" as stated in item 1 of Schedule IV of the Act, which includes coke in all its forms. The assessee, a purchaser of cinders from the refuse of railway engines, faced assessment by the sales tax authorities as "general goods" under section 5(1) of the Act. The Tribunal relied on the decision of the Allahabad High Court in Mahabir Singh Ram Babu v. Assistant Sales Tax Officer, where it was held that cinder is distinct from coal. However, the revision petitioner argued that cinders should be considered as coal based on the Supreme Court's decision in State of Gujarat v. Raipur Manufacturing Co., which classified cinders as a by-product of coal. The petitioner also referenced the Supreme Court decision in Sales Tax Commissioner, Indore v. Jaswant Singh, which determined that "coal" included charcoal. Nevertheless, the Court emphasized that the common parlance understanding of cinders as coal is pivotal, rather than relying solely on dictionary definitions or scientific explanations.
The Court examined previous judgments from the Madras and Allahabad High Courts, which concluded that cinders are neither coke nor a form of coke. In Fletcher v. Fields, it was argued that if cinders are not coal, then neither is coke. The Court highlighted that the Supreme Court's decision in State of Gujarat v. Raipur Manufacturing Co. did not support the contention that cinders are coal. The Supreme Court's ruling clarified that cinders are a subsidiary product of coal and, when regularly sold, indicate an intention to engage in the business of selling cinders. The Court also referenced the decision in Aryodaya Spinning and Weaving Co., Ltd. v. State of Bombay, which held that the sale of subsidiary products, like cotton waste, was subject to tax. The Court concluded that cinders cannot be classified as coal in the popular sense, as they are the end-products of coal after significant energy has been expended. Unlike coke, which is a distinct product obtained through intentional distillation of coal, cinders do not undergo the same process and, therefore, do not fall under the definition of "coke" or any form of it. Consequently, the Court upheld the Tribunal's decision, dismissing the revision petition with costs.
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1969 (4) TMI 92
Issues:
1. Interpretation of U.P. Sales Tax Act regarding liability to pay sales tax as a commission agent.
2. Application of Notification No. S.T.1365/X-990-1956 dated 1st April 1960 on turnover of khandsari sugar.
3. Definition of "dealer" and "turnover" under the Act.
4. Analysis of the effect of the notification on the liability of commission agents.
5. Comparison with provisions in other taxing statutes regarding representative assessees.
6. Distinction between tax liability on the first sale and sale by the manufacturer.
Detailed Analysis:
1. The case involved a dispute regarding the liability of an assessee, acting as a commission agent, to pay sales tax on the turnover of khandsari sugar sold on behalf of principals. The assessee contended that being a commission agent, he was not liable to pay sales tax, which was rejected by the Sales Tax Officer and higher authorities.
2. The notification dated 1st April 1960 superseded previous notifications and declared that turnover of khandsari sugar manufactured inside the State would be liable to tax only at the point of sale by the manufacturer. The dispute centered around the interpretation and application of this notification on the turnover of khandsari sugar sold by the commission agent.
3. The Act defined a "dealer" as any person carrying on the business of buying or selling goods in Uttar Pradesh, including commission agents. The turnover was defined as the aggregate amount for which goods are sold directly or through another on account of the dealer. This definition formed the basis for determining tax liability under the Act.
4. The judgment analyzed the effect of the notification on the liability of commission agents, emphasizing that the tax on khandsari sugar manufactured inside the State was to be levied only at the point of sale by the manufacturer. The commission agent's liability was distinct from that of the principal, and the notification did not provide for taxing the commission agent for such sales.
5. A comparison was drawn with provisions in other taxing statutes, such as the Income-tax Act, regarding representative assessees. It was highlighted that the U.P. Sales Tax Act did not have similar provisions for commission agents to be treated as representative assessees, indicating that the commission agent's liability was personal and distinct from the principal's liability.
6. The judgment clarified the distinction between tax liability on the first sale and the sale by the manufacturer, emphasizing that the notification aimed to tax the sale by the manufacturer, even if it was not the first sale in certain cases. A precedent from the Andhra Pradesh High Court was distinguished based on the differing tax points for jaggery and khandsari sugar sales.
In conclusion, the judgment favored the assessee, ruling that the sale of khandsari sugar by the commission agent was not liable to tax under the notification, which specified taxation at the point of sale by the manufacturer. The analysis provided a comprehensive interpretation of the U.P. Sales Tax Act and the implications of the notification on the tax liability of commission agents in such transactions.
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1969 (4) TMI 91
Issues Involved:
1. Validity of serial No. 7(b) in the Second Schedule to the Madras General Sales Tax Act, 1959.
2. Classification and differential treatment of raw hides and skins versus dressed hides and skins.
3. Alleged violation of Articles 14, 286(3), 301, and 304 of the Constitution of India.
4. Discrimination and unequal burden due to differential tax rates.
5. Jurisdiction of the State Legislature under Article 246(3) and List II of the Seventh Schedule of the Constitution.
Issue-wise Detailed Analysis:
1. Validity of Serial No. 7(b) in the Second Schedule to the Madras General Sales Tax Act, 1959:
The primary contention raised by the petitioner was that the classification under item 7(b) of the Second Schedule, which imposes a tax on dressed hides and skins at the point of first sale in the State, is void, ultra vires, and illegal. The petitioner argued that raw and tanned hides and skins should be treated as a single commodity and subjected to a single point levy of tax. The court, however, concluded that raw hides and skins and dressed hides and skins are distinct commodities, which justifies different points of taxation and rates.
2. Classification and Differential Treatment of Raw Hides and Skins versus Dressed Hides and Skins:
The petitioner contended that the differential treatment of raw hides and skins and dressed hides and skins under items 7(a) and 7(b) leads to an unhealthy classification without any basis. The court referred to the Supreme Court's decision in Hajee Abdul Shukoor & Co. v. State of Madras, which held that raw hides and skins and dressed hides and skins are different commodities. The court reaffirmed this distinction, stating that the Legislature is justified in treating them as separate commodities for the purpose of taxation.
3. Alleged Violation of Articles 14, 286(3), 301, and 304 of the Constitution of India:
- Article 14: The petitioner argued that the differential tax rates violate Article 14 by imposing an unequal burden on dealers in raw hides and skins versus dressed hides and skins. The court dismissed this contention, stating that since the commodities are different, the differential treatment does not constitute discrimination.
- Article 286(3): The petitioner claimed that the Madras General Sales Tax Act violated the restrictions and conditions imposed by Article 286(3) and Section 15 of the Central Sales Tax Act. The court found that the State Legislature has the power to levy tax on the sale of goods within its territory and that the provisions of the Madras Act do not violate these constitutional provisions.
- Article 301 and 304: The petitioner argued that the tax scheme impedes the freedom of trade and commerce guaranteed by Article 301 and violates Article 304. The court held that there is no restriction on the inter-State movement of goods and that the State Legislature has plenary powers under Article 246(3) to levy sales tax on goods within its territory. Therefore, the provisions do not violate Articles 301 or 304.
4. Discrimination and Unequal Burden Due to Differential Tax Rates:
The petitioner argued that the differential tax rates on raw hides and skins (2% or 3%) and dressed hides and skins (1% or 1.5%) are discriminatory and impose an unequal burden. The court examined the factual basis for the differential rates and found that the rates were justified based on the recommendations of an expert committee and representations from the Chambers of Commerce. The court concluded that the differential rates do not result in discrimination or an unequal burden on the dealers.
5. Jurisdiction of the State Legislature under Article 246(3) and List II of the Seventh Schedule of the Constitution:
The State argued that it has the power to levy sales tax on goods under Article 246(3) read with List II of the Seventh Schedule of the Constitution. The court agreed, stating that the State Legislature has the authority to tax the sale of goods within its territory and that the provisions of the Madras Act are within its legislative competence.
Conclusion:
The court dismissed the writ petitions, holding that the differential treatment and tax rates on raw hides and skins and dressed hides and skins are justified and do not violate any constitutional provisions. The court also directed the assessing authority to bear in mind the principles laid out in the judgment while disposing of the proceedings and to reassess at the instance of the assessee if necessary. There was no order as to costs.
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1969 (4) TMI 90
Issues Involved:
1. Jurisdiction of the Commissioner under Section 211 of the Bombay Land Revenue Code, 1879.
2. Validity of the Commissioner's order as a speaking order.
3. Authority of the Commissioner to address the question of title.
4. Merits of the Commissioner's order in relation to issues not raised before the Collector.
Issue-Wise Detailed Analysis:
1. Jurisdiction of the Commissioner under Section 211 of the Bombay Land Revenue Code, 1879:
The primary issue was whether the Commissioner had the authority under Section 211 of the Bombay Land Revenue Code to revise the order of the Collector, which granted the petitioner permission to use agricultural land for non-agricultural purposes. The High Court held that the Commissioner had no jurisdiction to pass an order that would nullify the sanad, stating that the sanad was binding on both parties until set aside in due course of law. The Supreme Court agreed, emphasizing that the Commissioner's power must be exercised within a reasonable time, which, in this case, was deemed to be a few months. The Commissioner's action more than a year after the Collector's order was found to be too late and therefore invalid.
2. Validity of the Commissioner's Order as a Speaking Order:
The second issue was whether the Commissioner's order was a speaking order, meaning it should contain reasons for the decision. The High Court noted some merit in the argument that the order lacked reasoning but chose not to interfere solely on this ground. The Supreme Court, however, found that the Commissioner's order should indeed be quashed because it did not provide any reasons for the conclusions. The Court emphasized that in such matters, the Commissioner should indicate his reasons, however briefly, to allow the aggrieved party to seek further recourse if desired.
3. Authority of the Commissioner to Address the Question of Title:
The third issue revolved around whether the Commissioner had the jurisdiction to address the question of title, which was not in controversy before the Collector. The High Court found that the issue of title was raised for the first time before the Commissioner and should not have been entertained. The Supreme Court concurred, stating that when the title of an occupant is disputed seriously, the appropriate course for the Collector or Commissioner is to refer the parties to a competent court rather than deciding the question of title themselves.
4. Merits of the Commissioner's Order in Relation to Issues Not Raised Before the Collector:
The fourth issue questioned the merits of the Commissioner's order, arguing that it allowed issues to be agitated before him that were not raised before the Collector. The High Court did not delve into the merits, having already concluded that the Commissioner lacked the authority under Section 211. The Supreme Court upheld this view, noting that the Commissioner should not have entertained arguments that were not presented before the Collector and involved considerations foreign to those initially addressed.
Conclusion:
The Supreme Court dismissed the appeal, affirming the High Court's decision to quash the Commissioner's order. The Court underscored that the Commissioner lacked jurisdiction to revise the Collector's order after a substantial delay and without providing reasons. Furthermore, the Commissioner improperly addressed the question of title and considered issues not initially raised before the Collector. The appeal was dismissed with costs.
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1969 (4) TMI 85
Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the impugned transactions were not purchases within the meaning of section 2(13) of the Bombay Sales Tax Act, 1953?
Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the impugned purchases were effected by the respondents outside the State of Bombay and that they were not inside the State of Bombay as per Explanation to article 286(1)(a) of the Constitution of India?
Held that:- Appeal allowed. Out of the two questions, only one has been answered and the second has not been answered. Even if the judgment of the High Court is communicated as required under section 34(5) of the Act, the Tribunal cannot proceed to dispose of the case consistently with the judgment of the High Court, because there is no judgment of the High Court answering the second question. Set aside the order passed by the High Court and direct that the High Court do hear and dispose of the reference according to law
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