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1960 (5) TMI 27
Issues Involved:
1. Constitutionality of Section 27 of the Indian Evidence Act.
2. Constitutionality of Section 162(2) of the Code of Criminal Procedure as it relates to Section 27 of the Indian Evidence Act.
3. Admissibility of statements made by persons in custody leading to the discovery of facts.
4. Evaluation of circumstantial evidence against the accused.
5. Appropriateness of the death sentence.
Detailed Analysis:
1. Constitutionality of Section 27 of the Indian Evidence Act:
The primary issue was whether Section 27 of the Indian Evidence Act violates Article 14 of the Constitution, which guarantees equality before the law. The High Court had ruled that Section 27 was unconstitutional because it discriminated between persons in custody and those not in custody, thus violating Article 14.
The Supreme Court, however, found that the distinction made by Section 27 between persons in custody and those not in custody was reasonable and based on practical considerations. The Court noted that persons in custody are more likely to be subjected to coercive methods, and thus, their statements leading to the discovery of facts are given limited admissibility to ensure justice. The Court concluded that this distinction does not violate Article 14.
2. Constitutionality of Section 162(2) of the Code of Criminal Procedure:
The High Court had also ruled that Section 162(2) of the Code of Criminal Procedure, in so far as it relates to Section 27 of the Indian Evidence Act, was unconstitutional. The Supreme Court disagreed, holding that Section 162(2) is intra vires and does not offend Article 14. The Court reasoned that the provision serves the purpose of ensuring that only reliable evidence, corroborated by the discovery of facts, is admissible.
3. Admissibility of Statements Leading to Discovery of Facts:
The Supreme Court emphasized that Section 27 of the Indian Evidence Act allows for the admissibility of statements made by persons in custody if those statements lead to the discovery of a fact. The Court noted that this provision is based on the principle that the discovery of a fact pursuant to a statement ensures the truth of that statement. Therefore, such statements are admissible to the extent that they distinctly relate to the discovered fact.
4. Evaluation of Circumstantial Evidence:
The trial court had convicted the accused based on several circumstantial evidences, including an altercation between the accused and the deceased, the accused borrowing a gandasa, his presence near the tank, his absconding, and his subsequent recovery of the gandasa stained with human blood. The High Court had acquitted the accused, finding the evidence insufficient.
The Supreme Court, however, reviewed the evidence and found that the circumstantial evidence formed a strong chain leading to the irresistible conclusion that the accused had committed the murder. The Court reinstated the trial court's findings, emphasizing that the recovery of the gandasa stained with human blood, based on the accused's statement, was a significant piece of evidence.
5. Appropriateness of the Death Sentence:
The Supreme Court upheld the death sentence, noting that the murder was brutal and premeditated. The Court observed that the accused had killed a defenseless old woman, who was the benefactress of his wife, in a calculated manner. Given the nature of the crime, the Court found that the death sentence was appropriate and restored the trial court's order.
Conclusion:
The Supreme Court allowed the appeal, holding that Section 27 of the Indian Evidence Act and Section 162(2) of the Code of Criminal Procedure are constitutional and do not violate Article 14. The Court set aside the High Court's order of acquittal and restored the trial court's conviction and death sentence for the accused.
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1960 (5) TMI 26
Constitutional validity of the Madras Marumakkathayam (Removal of Doubts) Act, 1955, (Madras Act 32 of 1955) questioned
Held that:- We declare that Madras Act 32 of 1955 is void and ultra vires the Constitution and issue a writ of mandamus restraining the State of Kerala from enforcing the provisions of the said Act against the petitioner and his sthanams. In the result, Petition No. 443 of 1955 is allowed with costs; Petition No. 40 of 1956 is allowed, but in the circumstances, without costs ; and Petition No. 41 of 1956 is dismissed, but in the circumstances, without costs.
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1960 (5) TMI 25
Whether an insurer will also include a person who was an insurer but has closed his business?
Whether the insurer admits them or not and whether a decree has been finally passed in respect of them or not?
Whether the Company is entitled to take into account the security deposit under s. 7 in order to show that the liabilities have been otherwise provided for?
Held that:- Appeal dismissed. When s. 2D speaks of satisfaction or " provision otherwise " for the liabilities of insurance business which is closed it contemplates such satisfaction or " provision otherwise" over and above the deposit made under s. 7. It is not in dispute in this case that there are some liabilities still pending; it is also not in dispute that they are not satisfied and no provision has been made otherwise for them irrespective of the security deposit. This also appears to have been the position when the order was made in July, 1957. In the circumstances the order is good and cannot be called in question by the Company.
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1960 (5) TMI 24
Issues: Interpretation of the term "jewellery" under sales tax law for taxation purposes when gold ornaments are set with imitation stones of negligible value.
Analysis:
1. The case involved a query on whether gold ornaments set with imitation stones of negligible value can be taxed under the head 'jewellery' under the sales tax law, specifically in the absence of a clear definition of "jewellery" in the relevant notifications issued by the government.
2. The dealer, a goldsmith and jeweler, claimed exemption for gold ornaments set with imitation stones of small value. The Sales Tax Authorities denied the exemption, considering such ornaments as "jewellery" under the notification. The Sales Tax Tribunal relied on a dictionary meaning that distinguished "jewellery" from "gold ornaments" based on the presence of precious stones, excluding imitation stones from the definition of precious stones.
3. The High Court analyzed the dictionary meaning of "jewellery" from the standard Oxford Dictionary, which includes ornaments with imitation stones within its definition. The court emphasized that the presence of precious stones is not a mandatory requirement to classify an ornament as jewellery, as per the dictionary definition.
4. Further, the court examined a subsequent notification by the government that explicitly taxed imitation stones and imitation jewellery, clarifying that even ornaments made of pure gold but set with imitation stones fall under the category of jewellery for taxation purposes. The court concluded that the notification aimed to provide clarification rather than expand the scope of the terms "ornaments" and "jewellery" in previous notifications.
5. The court answered the query in the affirmative, asserting that the value of the imitation stones in the jewellery is irrelevant for taxation purposes. The judgment was delivered unanimously, with both judges concurring on the interpretation of the term "jewellery" under the sales tax law.
This detailed analysis provides a comprehensive overview of the judgment, focusing on the interpretation of the term "jewellery" in the context of taxation concerning gold ornaments set with imitation stones of negligible value.
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1960 (5) TMI 23
Issues:
1. Application under section 24(2) of the Orissa Sales Tax Act to direct the Sales Tax Tribunal to refer questions of law to the High Court.
2. Preliminary objection raised on the ground of limitation regarding the filing of the application.
3. Changes brought about by the Orissa Sales Tax (Amendment) Act, 1957, including the constitution of the Sales Tax Tribunal and its powers.
4. Interpretation of rules 70 and 73 of the Orissa Sales Tax Rules regarding the delivery of orders by the Tribunal.
5. Discrepancy in the terminology used by the Tribunal in passing orders.
6. Failure of the petitioner to appear before the Tribunal and its impact on the limitation period.
7. Reference to previous court decisions and their applicability to the present case.
8. Argument regarding the date from which the limitation period should be calculated.
9. Decision on the application's timeliness and the inability to condone the delay.
Analysis:
The judgment pertains to two applications made under section 24(2) of the Orissa Sales Tax Act seeking the High Court to direct the Sales Tax Tribunal to refer questions of law for consideration. The Tribunal had previously rejected a similar application under section 24(1) and accepted only some questions for reference. The main issue raised was the timeliness of the current applications, as they were filed two days after the prescribed period of thirty days from the Tribunal's order, leading to a preliminary objection on grounds of limitation. The judgment delves into the changes introduced by the Orissa Sales Tax (Amendment) Act, 1957, which established the Sales Tax Tribunal as a judicial authority with specific powers, including the duty to refer points of law to the High Court under section 24(1).
Furthermore, the judgment discusses the interpretation of rules 70 and 73 of the Orissa Sales Tax Rules concerning the delivery of orders by the Tribunal. It highlights a discrepancy in the terminology used by the Tribunal, where the terms "order" and "judgment" were considered synonymous, impacting the understanding of the proceedings. The petitioner's failure to appear before the Tribunal on a crucial date and subsequent attempts to challenge the limitation period were also addressed, emphasizing the importance of diligence in legal proceedings.
The judgment references past court decisions such as Bharat Sabaigrass Ltd. v. Collector of Commercial Taxes, Orissa and Satrughan Mall v. Revenue Commissioner, Orissa to distinguish the applicability of rules pre and post the establishment of the Sales Tax Tribunal. Additionally, it dismisses arguments based on a Bombay decision and clarifies the starting point for calculating the limitation period as per the Orissa Sales Tax Act. Ultimately, the Court ruled the application as time-barred, upholding the preliminary objection raised on grounds of limitation and dismissing the petition without costs.
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1960 (5) TMI 22
Issues:
Interpretation of section 2(h) of the Orissa Sales Tax Act regarding deductions from the sale price of goods.
Analysis:
The case involved an application under sub-section (2) of section 24 of the Orissa Sales Tax Act concerning the entitlement to deduct specific items from the sale price of goods as per section 2(h) of the Act. The petitioner, a registered dealer dealing in motor cars and spare parts, claimed exemptions for various charges incurred. The Sales Tax Authorities initially disallowed these exemptions, leading to appeals and revisions. The central question was whether the dealer could exclude charges incurred while purchasing goods, not while selling them. The Tribunal ruled against the petitioner's contention, prompting the application to refer the legal question to the High Court.
The High Court examined the definition of "sale price" under section 2(h) of the Orissa Sales Tax Act, focusing on clause (a) which outlines the components of the sale price. The petitioner argued that charges like railway freight on vehicles, separately charged to customers, should be deductible. The Tribunal's view was that charges incurred for delivery to customers, not included in the sale price but borne by the purchaser, could be deducted under section 2(h)(a) if incurred under the agreement. However, these charges could not be excluded from the price received by the dealer, even if separately shown in bills. The assessment considered the petitioner as a stockist importing goods from Bombay, with the authorities concluding that certain charges were not incurred while selling goods to customers.
The Court emphasized the legislative intent behind section 2(h), highlighting that costs of freight or delivery, when separately charged, should be excluded from the sale price. The Court found no authority supporting the inclusion of such charges in the sale price despite being separately charged. Notably, the petitioner had separately charged railway freight and other incidental charges. The Court, concurring with the petitioner's position, allowed the application, directing the return of a deposit with the Sales Tax Authorities without costs. The judgment clarified that the sale price does not encompass the cost of freight or delivery when separately charged, affirming the petitioner's entitlement to deductions.
The Chief Justice and the Judge both concurred with the decision, allowing the petition and resolving the issue in favor of the petitioner.
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1960 (5) TMI 21
Issues:
1. Whether receipts from prescriptions are taxable under the Bombay Sales Tax Act, 1953.
Analysis:
The case involved an application against an order made by the Additional Collector of Sales Tax, Bombay City Division, regarding the taxation of receipts from prescriptions. The applicants, a partnership firm called Messrs Pearl & Co., included receipts from prescriptions in their turnover for assessment. The main issue raised was whether these receipts, amounting to Rs. 6,998-8-0, are taxable in the hands of the applicants under the Bombay Sales Tax Act, 1953. The key contention was whether the receipts constituted the sale of goods, as required for taxation under the Act.
The court noted that the liability to tax arises under section 8(a) of the Bombay Sales Tax Act, 1953, which permits taxation on the turnover of sales of goods specified in the Act. The definition of "goods" under section 2(8) includes movable property but excludes professional services. The court emphasized that what is taxable is the sale of goods, not professional services. The challenge for the applicants was to prove that the receipts from prescriptions were not related to the sale of goods but potentially included consultation charges.
It was established that Dr. Desai, one of the partners in the firm, conducted medical consultations in the same premises where the firm operated. However, since only one set of accounts was maintained, and the receipts from prescriptions were entered in the firm's books, it indicated a connection to the firm's business activities. The court highlighted that without evidence showing that the receipts included consultation charges, it could only be assumed that the prescriptions represented the sale of medicines, which constituted goods under the Act.
The court acknowledged the argument that professional services by Dr. Desai should not be subject to sales tax. Still, without concrete proof that the receipts included consultation fees, it was deemed speculative to assume otherwise. The court concluded that based on the available records and lack of evidence regarding the breakdown of the receipts, the inclusion of prescription receipts in the firm's turnover for taxation was justified. Therefore, the court dismissed the application, upholding the order to tax the receipts from prescriptions in the hands of the applicants under the Bombay Sales Tax Act, 1953.
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1960 (5) TMI 20
Issues:
Interpretation of the retrospective effect of a renewed registration certificate under the Orissa Sales Tax Act for a financial year and its application to specific transactions for exemption under section 5(2)(a)(ii) of the Act.
Analysis:
The case involved a grocer with a registration certificate under the Orissa Sales Tax Act who sold tamarind to another dealer during a specific quarter. The renewal of the purchasing dealer's registration certificate was delayed, leading to a dispute over the retrospective effect of the renewal for the entire financial year. The grocer claimed exemption based on sales to a registered dealer for re-sale in Orissa, invoking section 5(2)(a)(ii) of the Act. The Tribunal referred the question to the High Court for clarification.
The Court examined the definition of "year" under the Act and the process of renewal of registration certificates under the Sales Tax Rules. It emphasized that the renewal application should be submitted before the expiry of the previous year, allowing for some delay in the renewal process. The Court noted that the rules and forms did not specify that the renewal takes effect only from the date of the renewal order, indicating that the renewal should be effective from the start of the financial year.
Regarding the legal provisions, the Court highlighted that the Act and Rules did not support a contrary view on the retrospective effect of renewal. The right to claim exemption for sales to registered dealers was outlined in section 5(2)(a)(ii), emphasizing compliance with the registration and renewal procedures prescribed in the Act and Rules. The Court rejected the argument that the renewal date should determine exemption eligibility, affirming that the renewal's effective date should align with the financial year's commencement.
The Court addressed the relevance of Rule 27(2) of the Sales Tax Rules, clarifying its application to claims for deductions on turnover for sales to registered dealers for re-sale in Orissa. The Court emphasized the requirement of filing declarations before the sales tax authorities during assessment, rather than at the time of the actual transaction. The Court concluded that there was no legal basis to link the renewal date of the registration certificate to the exemption claim under section 5(2)(a)(ii), ultimately answering the reference in the affirmative.
In the final judgment, the Court concurred on the affirmative response to the reference, emphasizing the absence of provisions mandating consideration of the renewal date for exemption claims. The judgment was delivered by the High Court, with no specific mention of individual judges, and no costs were awarded in the case.
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1960 (5) TMI 19
Issues:
1. Validity of the allotment of shares
2. Competency of the petition
3. Relief sought
Analysis:
Validity of the Allotment of Shares:
The case involved a petition under section 155 of the Companies Act, 1956, by a company seeking rectification of its register of shareholders and direction to the Registrar of Companies to register the return of allotment. The company had entered into underwriting agreements with several parties for the subscription of shares, but the underwriters failed to fulfill their obligations within the prescribed time. The company then proceeded to allot shares to the underwriters and requested the Registrar to register the allotment. However, the Registrar refused to register the allotment, citing non-payment of at least 5% of the nominal amount of shares as required by section 69 of the Act. The company sought a declaration that the allotments were valid and binding on the underwriters, and their names should remain on the register of shareholders.
Competency of the Petition:
Respondents raised preliminary objections regarding the competency of the petition under section 155 of the Companies Act, 1956. They questioned the validity of the underwriting agreements, citing reasons such as pending criminal cases against the managing agents of the company and non-renewal of a crucial license. The respondents argued that the underwriting agreements had become frustrated, rendering the shares unsellable. The court examined the scope of section 155, emphasizing the need for rectification only when there is an error or defect in the register. The court noted that the names of the underwriters were already on the register as shareholders, and there was no need for rectification initiated by the company.
Relief Sought:
After considering the arguments and evidence presented by both parties, the court dismissed the petition, citing that the register did not require rectification as the names of the underwriters were already included as shareholders. The court refrained from giving findings on the merits of the issues raised, emphasizing that the matter could be resolved based on the competency of the petition. The petition was dismissed without costs.
In conclusion, the court's judgment focused on the procedural aspect of rectification under section 155 of the Companies Act, highlighting the need for a valid basis for seeking rectification of the register. The court found that since the names of the underwriters were already included on the register, there was no need for rectification initiated by the company. The dismissal of the petition was based on the lack of grounds for rectification, rather than the merits of the issues raised.
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1960 (5) TMI 18
Issues Involved:
1. Substratum of the company gone.
2. Just and equitable grounds for winding up.
3. Suspension of business.
4. Alleged misconduct by directors.
5. Availability of other remedies.
Detailed Analysis:
1. Substratum of the Company Gone:
The primary issue is whether the substratum of the company, Goenka Commercial Bank Ltd., has disappeared. The company was originally established to carry on banking business, as evidenced by sub-clauses (1), (2), and (3) of clause 3 of its memorandum of association. Although the company had the power to engage in other activities, the court found that the primary object was banking. The company ceased banking operations in 1952 after the Central Government prohibited it from receiving fresh deposits. Despite attempts to alter the memorandum and change the company's name, the Central Government did not sanction the change. Consequently, the company could not carry on its primary business, leading to the conclusion that its substratum was gone.
2. Just and Equitable Grounds for Winding Up:
The court also considered whether it was just and equitable to wind up the company. Factors such as the majority of shares being held by the Goenka family and their nominees, the company's funds being invested in concerns with significant Goenka interests, and negligible repayments from debtor companies were crucial. The court noted that the minority shareholders, including the petitioner, were not receiving any returns on their investments and were unlikely to do so unless the Goenka group acted favorably towards them. This situation justified winding up the company on just and equitable grounds.
3. Suspension of Business:
The petitioner argued that the company had suspended its business for more than a year before the presentation of the petition. However, the court did not find sufficient grounds to conclude that there had been a suspension of business under section 433(c) of the Indian Companies Act. The focus remained on the disappearance of the company's primary object and the just and equitable grounds for winding up.
4. Alleged Misconduct by Directors:
The petitioner alleged various acts of misconduct by the directors, including advancing loans to themselves or to companies managed by them. While the court acknowledged these allegations, it did not consider them sufficient grounds for winding up. The primary focus remained on the disappearance of the substratum and the just and equitable grounds.
5. Availability of Other Remedies:
The court considered whether other remedies, such as an application under section 398 of the Indian Companies Act, were available to the petitioner. Section 443(2) allows the court to refuse a winding-up order if another remedy is available and the petitioner is acting unreasonably in seeking a winding-up order instead. However, the court concluded that an application under section 398 would not be effective in this case. The continued existence of the company with its current board of directors would only benefit the Goenka group of shareholders, and shareholders qua shareholders would derive no benefit. Thus, it was just and equitable to wind up the company.
Conclusion:
The court issued a winding-up order for Goenka Commercial Bank Ltd. on the grounds that the substratum of the company was gone and it was just and equitable to wind up the company. The court found that the primary object of banking could no longer be pursued, and the company's continued existence would only benefit the majority shareholders, leaving the minority shareholders without any returns on their investments. The court did not find the suspension of business or alleged misconduct by directors sufficient grounds for winding up but emphasized the disappearance of the substratum and just and equitable grounds. Additionally, the court determined that other remedies were not viable, making winding up the appropriate course of action.
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1960 (5) TMI 5
Whether the Income-tax Officer had jurisdiction to assess the assessee firm under the Business Profits Tax Act by issue of a notice under section 11(1) of the Business Profits Tax Act on January 12,1953, in respect of the chargeable accounting period November 13, 1947, to October 31, 1948, without having recourse to section 14 of the Business Profits Tax Act ?
Whether the business profits tax assessment could be considered to have been validly made ?
Held that:- In view of the construction we have placed on section 14 of the Act on the words "profits escaping assessment" that they apply to assessments where notice has been given and has resulted in no assessment and where due to inadvertence, oversight or other circumstances no notice was given, it is difficult to interpret section 11 in the manner contended for by the appellant.
In our opinion the assessment which was sought to be made was without jurisdiction and the appeal must therefore fail.
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1960 (5) TMI 4
Whether additional income-tax has been legally charged under clause (ii) of the proviso to paragraph B of Part I of the First Schedule to the Indian Finance Act, 1951, as applied to the assessment year 1953-54, by the Indian Finance Act, 1953, read with section 3 of the Indian Income-tax Act ?
Held that:- Even if one considers the dividends as having come out of the profits of preceding years, they do not become the income of the relevant previous year, and unless the Finance Act expressly laid down that it should be taxed as part of the total income, the purpose is not achieved. Indeed, the Finance Act continues to say that the tax shall be on the total income, as defined in the Indian Income-tax Act and as determined under that Act. It is impossible to say that the additional income-tax was properly laid upon the total income, because what was actually taxed was never a part of the total income of the previous year.
The High Court was right in answering the question, which it had framed, in the negative. Appeal dismissed.
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1960 (5) TMI 3
Whether there was any excess dividend declared by the assessee company ?
Whether the assessee company is liable to pay additional income-tax in respect of the excess dividend paid by the assessee company ?
Held that:- The income-tax law seeks to put in the net certain class of income, and can only successfully do so, if it frames a provision appropriate to that end. If the law fails and the taxpayer cannot be brought within its letter, no question of unjustness, as such, arises. The answers given by the High Court to the two questions, i.e. first question in the affirmative and the second in the negative were correct in the circumstances of the case. Appeal dismissed.
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1960 (5) TMI 2
Whether the assessee company was liable to pay additional income-tax ? and
Whether the levy of the additional income-tax is ultra vires ?
Held that:- Agree with the High Court in the answer given to the first question in the negative. As pointed out by the High Court, the second question does not survive after the first question is answered against the Department. Appeal dismissed.
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1960 (5) TMI 1
Whether on the facts and circumstances of the case the managing agency commission @ 3 1/2 on sales made by the New Swadeshi Mills of Ahmedabad Ltd., between April 1, 1944, and December 31, 1944, accrued to Shivnarayan Surajmal Nemani, or to the assessee ?
Held that:- View of the managing agency agreement of March 15, 1925, concludes the appeal. If the remuneration accrued at the end of the financial year, then undoubtedly it accrued in the hands of the assessee company.
On the view which we have taken of the relevant clauses of the managing agency agreement, no income arose or accrued on the sale proceeds at the time of each transaction of sale the income accrued at the end of the financial year at the rate of 3 1/2 per cent. on the gross proceeds of all sales of yam, cloth, waste etc. earned in any one year. In that view of the matter, the High Court correctly answered the question. Appeal dismissed.
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9911796707
