|
Advanced Search Options
Case Laws
Showing 21 to 40 of 1090 Records
-
1971 (12) TMI 107
words 'considers it necessary' - meaning of the word 'consider' is 'to view attentively, to survey, examine, inspect (arch), to look attentively, to contemplate mentally, to think over, meditate on, give heed to, take note of, to think deliberately, be think oneself. to reflect'
-
1971 (12) TMI 106
Issues Involved:
1. Delay in filing appeals under Section 5 of the Limitation Act, 1963.
2. Binding nature of the decree in Title Suit No. 34 of 1961.
3. Executability of the Land Acquisition Award.
4. Sufficient cause for excusing the delay in filing appeals.
Detailed Analysis:
1. Delay in Filing Appeals under Section 5 of the Limitation Act, 1963:
The appellant filed applications under Section 5 of the Limitation Act, 1963, to excuse the delay in filing three appeals against the decision of the Additional District Judge, Howrah, dated June 27, 1963. The High Court dismissed these applications on August 18, 1966, citing unexplained delay between August 27, 1964, and July 3, 1965. The appellant argued that the delay was due to unawareness of the judgment and subsequent wrong legal advice.
2. Binding Nature of the Decree in Title Suit No. 34 of 1961:
The appellant contended that the decree in Title Suit No. 34 of 1961, which held that the State was entitled to recover possession of the entire area, rendered the Land Acquisition Award illegal and without jurisdiction. The respondents argued that the decree was not binding on them as they were not parties to the suit.
3. Executability of the Land Acquisition Award:
The appellant objected to the execution of the Land Acquisition Award on the grounds that it was not executable in view of the decree in Title Suit No. 34 of 1961. The High Court initially granted a stay of execution but later dismissed the appellant's applications for excusing the delay in filing appeals.
4. Sufficient Cause for Excusing the Delay:
The Supreme Court emphasized that the legal position under Section 5 of the Limitation Act is well-settled, and "sufficient cause" should receive a liberal construction to advance substantial justice. The High Court failed to properly scrutinize the reasons provided by the appellant for the delay. The Supreme Court noted that the appellant acted on wrong legal advice and took diligent steps after becoming aware of the need to file appeals.
Conclusion:
The Supreme Court set aside the High Court's judgment and allowed the appeals, condoning the delay in filing them. The High Court was directed to take up the three appeals and dispose of them according to law. The appellant was ordered to pay the costs of the respondents in all proceedings. The Supreme Court also emphasized the need for an early disposal of the appeals by the High Court.
-
1971 (12) TMI 105
Issues Involved:
1. Repugnancy of the M.P. General Sales Tax Act, 1958 with Section 15 of the Central Sales Tax Act.
2. Jurisdiction of the assessing authority to decide the validity of the Act.
3. Specificity of the stage at which sales tax on oil-seeds is to be levied under the M.P. General Sales Tax Act.
4. Interpretation of Section 2(r) of the M.P. General Sales Tax Act in relation to the stage of tax imposition.
5. Comparison with similar cases and judgments from other jurisdictions and the Supreme Court.
Issue-wise Detailed Analysis:
1. Repugnancy of the M.P. General Sales Tax Act, 1958 with Section 15 of the Central Sales Tax Act:
The petitioner contended that the provisions of the M.P. General Sales Tax Act regarding the levy of sales tax on oil-seeds were repugnant to Section 15 of the Central Sales Tax Act and, thus, void and illegal. Section 15(a) of the Central Sales Tax Act stipulates that the tax on declared goods like oil-seeds should not exceed 2% and should not be levied at more than one stage. The court examined the amendments made to Section 6 and Schedule II of the M.P. General Sales Tax Act in 1962, which omitted the specification of the stage at which the tax was to be levied.
2. Jurisdiction of the assessing authority to decide the validity of the Act:
The assessing authority overruled the petitioner's objection on the grounds that it did not have the jurisdiction to decide the validity of the Act under which it was constituted. The court did not delve deeply into this issue but focused on the substantive legal question concerning the compatibility of the state law with the central legislation.
3. Specificity of the stage at which sales tax on oil-seeds is to be levied under the M.P. General Sales Tax Act:
The petitioner argued that the M.P. General Sales Tax Act failed to specify the stage at which the tax on oil-seeds was to be levied, thereby violating Section 15(a) of the Central Sales Tax Act. The court noted that the original Section 6 and Schedule II of the Act had specified the stage, but the amendments in 1962 had removed this specification. The respondents relied on Section 2(r) of the Act, which defines "taxable turnover," to argue that the stage was implicitly prescribed.
4. Interpretation of Section 2(r) of the M.P. General Sales Tax Act in relation to the stage of tax imposition:
Section 2(r)(iv) of the M.P. General Sales Tax Act was interpreted to mean that the tax becomes exigible when a registered dealer sells the goods to a consumer or an unregistered dealer. The court reasoned that the chain of registered dealers selling to other registered dealers could continue, but the tax would be levied at the point where the goods were sold to a consumer or unregistered dealer. This interpretation was deemed sufficient to meet the requirements of Section 15(a) of the Central Sales Tax Act.
5. Comparison with similar cases and judgments from other jurisdictions and the Supreme Court:
The petitioner cited the Supreme Court's decision in Bhawani Cotton Mills v. State of Punjab, where it was held that the tax on declared goods could not be levied at more than one stage unless the Act or Rules specified the stage. The court distinguished this case by noting that the Punjab Act lacked clear provisions to ascertain the single point of tax imposition, whereas the M.P. Act, through Section 2(r)(iv), provided sufficient clarity. The court also referred to decisions from the Rajasthan High Court and the Supreme Court in Venkateswara Rice Mill v. State of A.P., which supported the view that the stage of tax imposition need not be explicitly stated if it could be discerned from the Act's provisions.
Conclusion:
The court concluded that the M.P. General Sales Tax Act did not violate Section 15(a) of the Central Sales Tax Act. The petitioner's contention that the tax could not be recovered due to the lack of a specified stage in the Act was rejected. The court found no lacuna in the provisions of the State Act and upheld the validity of the tax imposition. Consequently, the petition was dismissed with costs.
Order:
The petition fails and is dismissed with costs. Hearing fee Rs. 100. The balance, if any, of the security deposit, after deducting costs, shall be refunded to the petitioner. Petition dismissed.
-
1971 (12) TMI 104
Issues:
1. Assessment completion timeline under Andhra Pradesh Sales Tax Act.
2. Interpretation of limitation period under section 14(1) of the Act.
3. Validity of assessment made on the firm instead of the dealer.
Analysis:
1. The judgment pertains to a petition challenging an assessment order under the Andhra Pradesh Sales Tax Act for the year 1956-57. The petitioner, a dealer, submitted a return which was rejected by the assessing authority, leading to a series of assessments and appeals spanning several years. The main contention raised was the timeliness of the assessment process, as it took nearly 12 years from the initial assessment to the final decision by the Assistant Commissioner. The petitioner argued that the assessment was beyond the four-year limit prescribed under section 14(1) of the Act.
2. The court delved into the interpretation of the limitation period under section 14(1) in light of relevant case law. Reference was made to the Supreme Court decision in The State of Orissa v. Debaki Debi, which highlighted the applicability of limitation periods to all orders of assessment, including appellate and revisional orders. The court analyzed the provisions of the Act related to limitation, emphasizing that the four-year period under section 14(1) was intended for the initial assessment by the assessing officer and did not include time taken in revisions or appeals.
3. Another issue raised was the validity of the assessment made on the firm instead of the dealer. The petitioner argued that this fundamental error rendered the assessment invalid. However, the court noted that the proprietor of the firm was the dealer under the Act, and he had actively participated in the assessment proceedings without contesting the assessment in the firm's name until late in the process. The court cited section 38A of the Act, which stated that assessments should not be set aside for procedural defects unless they caused material hardship or failure of justice. Ultimately, the court dismissed the petition, finding that the irregularity in issuing the assessment in the firm's name did not result in any material hardship or failure of justice to the petitioner.
-
1971 (12) TMI 103
Issues Involved:
1. Levy of Purchase Tax on Cotton
2. Definition and Taxability of Cotton Seeds
3. Discrimination in Section 2(d) of the Punjab General Sales Tax Act
4. Method of Assessment and Deduction Eligibility
Comprehensive, Issue-wise Detailed Analysis:
1. Levy of Purchase Tax on Cotton:
The primary issue revolves around the levy of purchase tax on cotton under the Punjab General Sales Tax Act. The petitioner, a private company, contested the tax imposed on the purchase of unginned cotton. The Supreme Court in *Bhawani Cotton Mills Ltd. v. The State of Punjab and Another* held that the provisions of the Punjab General Sales Tax Act, 1948, levying purchase tax on declared goods contravened the Central Sales Tax Act, 1956, as the stage of tax was not definite. Consequently, the Punjab Government amended the Act to levy tax at the last purchase stage. The petitioner argued that it was not the last purchaser, as it sold ginned cotton to registered dealers. The court concluded that the petitioner was not liable for purchase tax on cotton sold to registered dealers, as it was not the last purchaser.
2. Definition and Taxability of Cotton Seeds:
The court examined whether cotton seeds, a by-product of ginning, were subject to purchase tax. The Supreme Court in *State of Punjab and Others v. Chandu Lal Kishori Lal* held that cotton seeds are distinct from cotton and not subject to the same tax provisions. The court reaffirmed this, stating that cotton seeds are a different commodity and cannot be taxed as cotton. The recent Supreme Court decision in *State of Punjab v. Shakti Cotton Company* further clarified that cotton seeds are not declared goods and should not be taxed as part of the cotton turnover.
3. Discrimination in Section 2(d) of the Punjab General Sales Tax Act:
The petitioner argued that Section 2(d) of the Act was discriminatory, as it imposed tax on goods delivered for consumption in Punjab but exempted those not delivered for consumption in the state. The court rejected this argument, stating that the two classes of dealers are distinct, and the differentiation has a reasonable nexus to the business of the dealers. The court found no constitutional infirmity in Section 2(d).
4. Method of Assessment and Deduction Eligibility:
The court scrutinized the method of assessment adopted by the assessing authority. The petitioner had claimed deductions for the sale of ginned cotton under Section 5(2)(a)(vi) of the Act. The Supreme Court in *State of Punjab and Others v. Chandu Lal Kishori Lal* held that ginned and unginned cotton are a single commodity and should not be taxed more than once. The court found that the assessing authority erred in including the purchase of cotton in the turnover when the petitioner was not the last purchaser. The court quashed the assessment orders and directed fresh assessments in accordance with the amended Act and Supreme Court rulings.
Conclusion:
The court dismissed the appeals by the State of Punjab and allowed the petition, quashing the impugned assessment orders. The assessing authorities were directed to make fresh assessments in line with the Act's provisions and the court's observations. The court left the parties to bear their own costs.
-
1971 (12) TMI 102
Issues:
Tax assessment on motor vehicle transactions for the period 1st April, 1966, to 31st March, 1967. Application for rectification under rule 83 of the Orissa Sales Tax Rules. Quashing of assessment and direction for recomputation.
Analysis:
The petitioners, sub-dealers in motor vehicles, purchased jeeps and pick-ups from the main dealer without paying tax, based on declarations. The petitioners claimed ignorance of rule 93-A of the Orissa Sales Tax Rules, which led to incorrect taxation. The department, too, was unaware of the rule and taxed the petitioners incorrectly. Subsequently, a notice was issued to the main dealer for reassessment, and an order was passed against them. The petitioners sought rectification under rule 83 for the assessment year in question. The writ application aimed to quash the assessment for the period and request recomputation excluding transactions between the main dealer and the petitioners.
Rule 93-A dictates that all motor vehicles in a series of sales by successive dealers should be taxed at the first point of sale by a liable dealer. Even if the vehicles are specified in the purchasing dealer's registration, tax is applicable at the first point of sale. Dealers not involved in the initial sale can deduct the turnover from their gross turnover for tax purposes.
The court found that tax was erroneously collected from the petitioners due to a legal misunderstanding regarding the transactions between them and the main dealer. The assessment order encompassed transactions beyond those between the petitioners and the main dealer, necessitating its quashing. The court directed the Sales Tax Officer to reassess and recompute the tax, excluding the transactions in question, and ordered a refund if tax had been paid for those transactions.
In conclusion, the writ application was allowed, leading to the quashing of the assessment order and a directive for reassessment and recomputation by excluding specific transactions. The court issued a writ of certiorari to annul the order and a writ of mandamus to compel the Sales Tax Officer to conduct the reassessment. No costs were awarded in this matter.
The judgment was delivered by Misra G.K., C.J., and Acharya S., J., with the agreement of Acharya, J.
-
1971 (12) TMI 101
Issues Involved:
1. Whether a written notice to the assessee is necessary for showing cause why penalty should not be imposed.
2. Whether the dealer was afforded a reasonable opportunity of being heard as envisaged by rule 54 of the Rajasthan Sales Tax Rules before penalty was imposed under section 16(1)(c) of the Rajasthan Sales Tax Act.
Issue-wise Detailed Analysis:
1. Necessity of Written Notice:
The court examined whether a written notice is mandatory under rule 54 of the Rajasthan Sales Tax Rules, 1955, before imposing a penalty under section 16(1)(c) of the Rajasthan Sales Tax Act. Rule 54 mandates that no order imposing a penalty shall be passed unless the dealer has been given a reasonable opportunity of being heard. However, the rule does not explicitly require a written notice. The court opined that while a written notice is not compulsory, it is conducive to clarity and certainty, ensuring that the dealer understands the nature of the default and the consequent penalty. The court held that in this case, the notice given to the accountant and the authorized representative was inadequate and did not constitute proper notice to the dealer.
2. Reasonable Opportunity of Being Heard:
The court analyzed whether the dealer was afforded a reasonable opportunity of being heard as required by rule 54. The assessing authority claimed that the accountant of the assessee-company could not offer a satisfactory explanation for the delay in submitting returns. The Board of Revenue also noted that the accountant and the authorized representative of the assessee were asked to explain the delay but failed to provide any reason. The court found discrepancies in the statements of the assessing authority and the Board of Revenue. It emphasized that merely asking the representatives during the assessment did not meet the requirement of a reasonable opportunity. The court highlighted that the representatives were not given enough time to consult with their principal or to understand the exact charge, which could include details such as which returns were late and by how much. The court concluded that the opportunity given was not reasonable and thus, the imposition of the penalty was invalid.
Conclusion:
The court answered the first part of the question by stating that a written notice is not mandatory but recommended for clarity and fairness. For the second part, the court concluded that the dealer was not given a reasonable opportunity of being heard, thus invalidating the penalty imposed under section 16(1)(c). The reference was answered accordingly, with costs awarded to the assessee.
-
1971 (12) TMI 100
Issues Involved:
1. Legislative Trespass on Judicial Power
2. Efficacy of Section 3-AB
3. Applicability of Section 3-AB to Pending Proceedings
4. Violation of Article 14
5. Violation of Article 19(1)(f) and (g)
6. Repugnancy of Section 3-AB to Old Section 3-A
Issue-wise Detailed Analysis:
1. Legislative Trespass on Judicial Power:
The petitioners argued that Section 3-AB of the U.P. Sales Tax (Amendment and Validation) Act, 1971, constituted a legislative trespass on judicial power by attempting to validate notifications that had already been declared invalid by the court. The court, however, found that Section 3-AB was modeled on the precedent set by Jaora Sugar Mills v. State of M.P., where the Supreme Court upheld similar legislative actions. The court held that the Legislature had not merely validated the notifications but had incorporated them into the statute, thereby exercising its legislative power rather than encroaching on judicial functions.
2. Efficacy of Section 3-AB:
The petitioners contended that Section 3-AB made no sense and was inefficacious because it incorporated notifications that had been declared invalid. The court rejected this argument, noting that only the substantive parts of the notifications imposing tax were incorporated into Section 3-AB, excluding any redundant or irrelevant language. The court cited precedents such as Jaora Sugar Mills and Sadasib Prakash v. State of Orissa to support its interpretation.
3. Applicability of Section 3-AB to Pending Proceedings:
The petitioners argued that Section 3-AB should not apply to assessment proceedings for years prior to the commencement of the Amending Act, 1971, which were still pending. The court disagreed, stating that Section 3-AB was retrospective and intended to save all steps taken or proceedings initiated for assessing tax on the turnover of the sale of bricks before the commencement of the Amending Act. The court emphasized the significance of the term "levy" in Section 3-AB, which includes any step taken or proceeding initiated for determining tax liability.
4. Violation of Article 14:
The petitioners claimed that Section 3-AB violated Article 14 of the Constitution by creating two different methods of taxation and thereby causing discrimination. The court found no merit in this argument, explaining that the old Section 3-A and Section 3-AB did not overlap concerning bricks. The court also noted that higher rates of tax on building materials, including bricks, were justified due to administrative convenience, cost of collection, and the ability of consumers in higher income groups to bear the tax burden. The court cited multiple Supreme Court decisions to support the Legislature's discretion in tax matters.
5. Violation of Article 19(1)(f) and (g):
The petitioners argued that the retrospective operation of Section 3-AB infringed on their rights under Article 19(1)(f) and (g) of the Constitution. The court rejected this argument, noting that the retrospective validation was necessary to address the financial predicament of the State Government, which had already assessed and collected a significant amount of tax. The court referred to Supreme Court decisions in Tata Iron and Steel Co. Ltd. v. State of Bihar and Rai Ramkrishna v. State of Bihar to uphold the validity of retrospective tax laws.
6. Repugnancy of Section 3-AB to Old Section 3-A:
The petitioners argued that Section 3-AB was repugnant to the old Section 3-A. The court found no repugnancy, explaining that Section 3-AB incorporated all notifications issued under the old Section 3-A until the commencement of the Amending Act, 1971. The court emphasized that Section 3-AB was intended to operate retrospectively, thereby validating the previously issued notifications and ensuring continuity in tax imposition.
Conclusion:
The court dismissed all the petitions with costs, upholding the validity of Section 3-AB and its retrospective application. The court found that the Legislature had acted within its powers and had not encroached on judicial functions. The court also held that the higher tax rates on bricks were justified and did not violate constitutional provisions.
-
1971 (12) TMI 99
Whether the delivery by the respondent-Hindustan Aeronautics Ltd.-hereinafter referred to as the assessee-to the Railway Board of railway coaches models 407, 408 and 411 is liable to sales tax under the Central Sales Tax Act?
Held that:- Appeal dismissed. The difference between the price of a coach and the cost of material can only be the cost of services rendered by the assessee. The only difference as far as coach model No. 411 is concerned is that in that case the wheelsets and underframes are not supplied free of cost but otherwise there is no essential difference in the terms. This does not make any difference to the result.
-
1971 (12) TMI 89
Issues Involved:
1. Whether the company is unable to pay its debts.
2. Whether it is just and equitable to wind up the company due to loss of confidence in the management.
3. The impact of delay in hearing the petition.
4. The potential hardship caused by advertising the winding-up petition.
Detailed Analysis:
1. Whether the company is unable to pay its debts:
The petitioners argue that the company should be wound up because it is unable to pay its debts. Under section 433 of the Companies Act, 1956, a company may be wound up by the court if it is unable to pay its debts. The court examined the financial position of the company as disclosed by the balance-sheets for the periods ending June 30, 1970, and June 30, 1971. The balance-sheet for June 30, 1970, showed that the company's entire share capital was substantially eaten away by accumulated losses, and the company was operating primarily on borrowed funds. The trial balance-sheet for June 30, 1971, presented a similar financial picture, indicating that the company's capital and reserves were eroded by carried forward losses. The court concluded that the financial position depicted in the balance-sheets warranted an inquiry into whether the company was unable to pay its debts.
2. Whether it is just and equitable to wind up the company due to loss of confidence in the management:
The petitioners contended that it was just and equitable to wind up the company because they had entirely lost confidence in the management by respondents Nos. 2 to 5, making it impossible to carry on the business. The court noted that serious disputes and differences existed between the two groups of shareholders, which prima facie indicated that the business could not be carried on smoothly. The court referenced principles applied to the dissolution of partnership firms, noting that in small private companies, similar principles could justify winding up. The court found that a prima facie case had been made out for investigating whether it was just and equitable to wind up the company.
3. The impact of delay in hearing the petition:
The company argued that the petition should not be admitted due to the considerable time elapsed between its presentation and the hearing for admission. The court acknowledged the delay but noted that it was partly due to the consent of both parties for adjournments. The court emphasized that the practice of adjourning winding-up petitions indefinitely should not be encouraged, as the order for winding up would relate back to an earlier date. The court concluded that the delay was not sufficient to dismiss the petition in limine.
4. The potential hardship caused by advertising the winding-up petition:
The company expressed concerns that advertising the petition would cause considerable hardship. The court cited the Supreme Court's decision in National Conduits (P.) Ltd. v. S.S. Arora, which established that the court is not bound to advertise a winding-up petition immediately upon admission and could suspend advertisement in appropriate cases. The court considered the financial position disclosed by the balance-sheets, indicating significant accumulated losses and reliance on borrowed funds. The court determined that it was in the interests of the company and its creditors to advertise the petition, allowing creditors to be aware of the company's financial situation and make submissions in the winding-up proceedings.
Conclusion:
The court directed that the petition be admitted and advertised in specified publications, with advertisements to appear by January 20, 1972, and the petition to be placed for hearing on the second Monday in February 1972.
-
1971 (12) TMI 80
Issues Involved:
1. Validity of the sale of shares after the commencement of winding-up proceedings.
2. Necessity of obtaining court leave for execution and sale.
3. Jurisdiction of the High Court to entertain the application.
4. Applicability of limitation period to the application.
Detailed Analysis:
1. Validity of the Sale of Shares After the Commencement of Winding-Up Proceedings:
The official liquidator sought a declaration that the sale of 186 shares of the National Machinery Manufacturing Company Ltd. held by the company in liquidation was void under section 537 of the Companies Act. The court held that the sale of the shares was void as it occurred after the commencement of the winding-up proceedings, which began on November 1, 1966. Section 537 clearly states that any attachment or sale held without leave of the court after the commencement of winding-up shall be void. The court emphasized that the sale of the shares without the court's leave was invalid, and thus, the respondent was obligated to return the amount received from the sale.
2. Necessity of Obtaining Court Leave for Execution and Sale:
The respondent argued that no leave of the court was necessary for the execution and sale of the shares. The court rejected this argument, stating that section 537 itself implies that leave of the court is necessary for any attachment, distress, execution, or sale of the company's property after the commencement of the winding-up proceedings. The court clarified that the language of section 537 is unambiguous and mandates that any sale without the court's leave is void.
3. Jurisdiction of the High Court to Entertain the Application:
The respondent contended that the application was not maintainable and that the official liquidator should file a civil suit instead. The court held that the High Court has jurisdiction to entertain such applications under section 446(2) of the Companies Act. Section 446(2) confers special jurisdiction on the High Court to entertain or dispose of any claim made by or against the company, any question of priorities, or any other question relating to the winding-up of the company. The court emphasized that it is in the interest of all concerned that winding-up proceedings be expedited and brought to a close, and requiring the liquidator to file a suit would defeat this purpose.
4. Applicability of Limitation Period to the Application:
The respondent argued that the application was barred by limitation, citing article 137 of the Limitation Act, 1963, which prescribes a three-year limitation period for applications for which no period is provided elsewhere. The court, however, held that section 458A of the Companies Act applies, which excludes the period from the commencement of the winding-up to the date of the winding-up order and an additional one year from the computation of the limitation period. Therefore, the application was filed within the permissible period and was not barred by limitation.
Conclusion:
The court granted the summons, declaring the sale of the shares void and ordering the respondent to refund Rs. 16,740 to the official liquidator. The respondent was allowed to pay the amount in equal monthly installments over 18 months, commencing from March 1, 1972. The satisfaction of the decree obtained by the respondent in the civil suit was to be set aside upon full payment, and the respondent was given liberty to prove his debt before the liquidator. The court also awarded costs in favor of the applicant.
-
1971 (12) TMI 79
Issues:
Interpretation of the phrase "not less than 21 days' notice" under section 171 of the Companies Act, 1956.
Analysis:
The main issue before the Division Bench was whether the day on which the notice of a general meeting of a company is served and the day on which the meeting is held should be excluded when calculating the 21 days' notice period as prescribed under section 171 of the Companies Act, 1956. The defendant's counsel argued that the 21 days start running when the service of the notice of the meeting is effected, emphasizing the exact hour of service. He relied on an English decision to support his argument that each day of notice should be a unit of twenty-four hours. However, the court rejected this argument, stating that the emphasis on the hour in the new Act was not significant and that the 21 days' notice should be counted as full calendar days.
The court referred to various English and Indian decisions to support the interpretation that the phrase "not less than" in relation to a certain number of days implies whole days and not fractions of days. The court highlighted the consistency in interpreting similar phrases in previous cases, emphasizing that each day must be a clear, complete day. The court also noted that the legislature retained the language of "not less than 21 days' notice" in the new Companies Act without incorporating inclusive or exclusive terms, indicating an intention to exclude the day of service and the day of the meeting when calculating the notice period.
In conclusion, the court answered the question in the affirmative, stating that the day of service of the notice and the day of the meeting should be excluded when counting the 21 days' notice period under section 171 of the Companies Act, 1956. The court emphasized the importance of consistency in interpreting the length of notice for general meetings and upheld the settled rules in this regard.
-
1971 (12) TMI 64
Issues:
1. Claim for refund of earnest money deposited in connection with an offer for the sale of a staple yarn factory in liquidation.
2. Interpretation of the terms of the advertisement regarding earnest money and its forfeiture in case of default by the offeror.
3. Jurisdiction of the company court to decide on the claim of the official liquidator to forfeit the deposited amount and the existence of a concluded agreement of sale.
4. Revocation of offer and refundability of the deposited amount after the expiry of the stipulated period.
Analysis:
The petitioner had deposited Rs. 10,000 as earnest money with the official liquidator in response to an advertisement for the sale of a staple yarn factory in liquidation. The petitioner's offer was accepted by the High Court, but he failed to pay the balance amount as agreed, leading to the property being advertised for sale again. The petitioner sought a refund of the earnest money, arguing that his offer was not accepted and the stipulated period for refund had passed. However, the court emphasized that the advertisement clearly labeled the deposited amount as earnest money, indicating that forfeiture would occur in case of default by the offeror. The distinction between earnest money and a deposit by way of advance was crucial, with legal precedents supporting the forfeiture of earnest money in case of default.
The court referred to relevant legal principles and precedents, including the distinction between earnest money and a deposit by way of advance. Citing cases such as Desu Rattamtna v. Krishna Murthi and Maula Bux v. Union of India, the court highlighted that earnest money forms part of the purchase price and is forfeited upon the failure of the transaction due to the fault of the party making the offer. The court also clarified that the forfeiture of earnest money was not considered a penalty in this case, as per the Contract Act.
Regarding the issue of jurisdiction, the court found that the petitioner was seeking the court's assistance in directing the official liquidator to refund the amount, indicating that the question of jurisdiction did not arise directly. The court dismissed the petitioner's claim for a refund of the earnest money, emphasizing that since the petitioner had defaulted in completing the contract by not paying the balance amount, the deposited sum was not refundable. Consequently, the petition was dismissed with costs awarded to the respondent.
-
1971 (12) TMI 62
Issues Involved:
1. Compliance with statutory provisions under sections 391 and 394 of the Companies Act.
2. Representation of the class of shareholders.
3. Reasonableness of the scheme from a business perspective.
4. Application of the Monopolies and Restrictive Trade Practices Act, 1969, particularly section 23(1)(a).
Issue-wise Detailed Analysis:
1. Compliance with Statutory Provisions:
The petition was filed under sections 391 and 394 of the Companies Act for sanctioning an amalgamation arrangement between the petitioner and the respondent. The court examined the scheme to ensure that all statutory provisions had been complied with. The petitioner strictly adhered to the requirements, and the scheme was approved by more than the statutory majority of members. The High Court of Bombay had already sanctioned the scheme, and the Gujarat High Court was also satisfied with the compliance.
2. Representation of the Class of Shareholders:
The court assessed whether the class of shareholders was fairly represented. The figures showed that a significant majority approved the scheme, indicating fair representation. The minority opposing the scheme did not appear at the hearing to present their views, suggesting that the majority did not coerce the minority. The court concluded that the class was well represented, and the scheme was approved by a substantial majority.
3. Reasonableness of the Scheme from a Business Perspective:
The court evaluated whether the scheme was such that a man of business would reasonably approve. The scheme involved the amalgamation of the transferor company with the petitioner, which would bring a substantial sum of Rs. 14.70 crores to the petitioner for expansion and liquidity. The court found that the scheme was commercially sound and beneficial from the transferee company's perspective. The Bombay High Court had already examined the scheme from the transferor company's viewpoint and sanctioned it.
4. Application of the Monopolies and Restrictive Trade Practices Act, 1969:
The Central Government opposed the scheme, arguing that it required approval under section 23(1)(a) of the Monopolies Act, as both companies were undertakings within the Act's meaning. The court examined whether the respondent (transferor company) was an undertaking engaged in the provision of service. The court found that since the Bank Nationalisation Act, the respondent was not engaged in any business or service. The respondent's activities, such as selling compensation bonds and making interim deposits, did not constitute carrying on business or providing service. The court concluded that the respondent was not an undertaking under the Monopolies Act, and section 23(1)(a) did not apply. Therefore, the scheme did not require Central Government approval.
Conclusion:
The court sanctioned the scheme of amalgamation, as it complied with statutory provisions, fairly represented the class of shareholders, and was reasonable from a business perspective. The objections under the Monopolies Act were dismissed, as the respondent was not an undertaking within the Act's meaning. The court issued specific directions for implementing the scheme, including the transfer of properties, continuation of proceedings, allotment of shares and bonds, and registration with the Registrar of Companies. The petitioner's costs were to be borne by themselves, and the Government of India was awarded one set of hearing fees.
-
1971 (12) TMI 47
Issues:
1. Determination of the genuineness of cash credits in the accounts of two parties taken on hundis.
2. Burden of proof regarding the source of cash credits and loans.
3. Allegations of bogus hundi loans and Hawala transactions.
4. Consideration of evidence regarding the identity and financial capacity of creditors.
5. Treatment of bonus payment as per trade practice and accounting practices.
Detailed Analysis:
1. The judgment of the Appellate Tribunal ITAT DELHI-A involved an appeal by the assessee against the order of the AAC concerning the assessment year 1965-66. The primary issue was the determination of the genuineness of cash credits, specifically Rs. 15,000 and Rs. 10,000, in the accounts of two parties taken on hundis by the assessee. The Income Tax Officer (ITO) considered these loans as bogus hundi loans due to the blacklisting of the creditors by the Department and the failure of the assessee to produce the parties for verification. The ITO included the amounts in the total income of the assessee as concealed income, a decision upheld by the AAC.
2. The assessee contended that the loans were genuine, providing evidence of the creditors' identity, income tax file numbers, and substantial bank transactions. The Revenue argued that the loans were bogus and part of Hawala transactions, citing the absence of monetary transactions and admissions by other parties. The Tribunal noted the fine line between genuine hundi loans and Hawala transactions, emphasizing the importance of proving the nexus between loan transactions and subsequent cash payments.
3. Despite the Department's allegations and blacklisting of the creditors, the Tribunal found that the assessee had sufficiently proven the identity and financial capacity of the creditors. The Department failed to establish a connection between the loans and bank transactions of the creditors to prove Hawala transactions. The Tribunal highlighted the duty of both parties to provide and disprove evidence, ultimately concluding that the Department had not sufficiently proven the loans as Hawala transactions, overturning the addition of Rs. 25,000 to the assessee's income.
4. Another issue addressed in the judgment was the bonus payment of Rs. 840, disputed by the Revenue. The assessee argued that the bonus was a standard trade practice, supported by accounting entries and subsequent payment to employees. The Tribunal found the evidence provided by the assessee to be credible, leading to the deletion of the disallowed addition of Rs. 840 by the AAC. Consequently, the appeal was allowed in favor of the assessee, emphasizing the importance of substantiating claims with concrete evidence and meeting the burden of proof in tax assessments.
-
1971 (12) TMI 46
Issues Involved:
1. Violation of Section 12(1) of the Foreign Exchange Regulation Act, 1947.
2. Application of Section 23-A of the Foreign Exchange Regulation Act, 1947.
3. Confiscation and penalty under Sections 113 and 114 of the Customs Act, 1962.
4. Validity of the declaration under Section 12(1) of the Foreign Exchange Regulation Act, 1947.
5. Misdeclaration of the buyer's name under Section 50(2) of the Customs Act, 1962.
Issue-wise Analysis:
1. Violation of Section 12(1) of the Foreign Exchange Regulation Act, 1947:
The petitioner, a dealer in coir yarn, exported goods to a foreign buyer and filed the necessary shipping bills and declarations under the relevant sections of the Customs Act, 1962 and the Foreign Exchange Regulation Act, 1947. The Assistant Collector of Customs alleged that the petitioner attempted to violate Section 12(1) of the Foreign Exchange Regulation Act, 1947, by misdeclaring the buyer's name to facilitate payment in Indian rupees instead of sterling or other currencies. The court examined whether this act constituted a violation of Section 12(1).
2. Application of Section 23-A of the Foreign Exchange Regulation Act, 1947:
Section 23-A of the Foreign Exchange Regulation Act, 1947, incorporates certain provisions of the Foreign Exchange Regulation Act into Section 11 of the Customs Act, 1962. This section allows the Central Government to prohibit the import or export of goods and imposes penalties for contraventions. The court analyzed the impact of Section 23-A on the case, determining that any violation of Section 12(1) would be treated as a violation under Section 11 of the Customs Act, 1962, leading to confiscation and penalties under Sections 113 and 114.
3. Confiscation and penalty under Sections 113 and 114 of the Customs Act, 1962:
The Collector of Customs found that the consignment was intended for an Italian buyer, despite being declared as sold to a Yugoslavian buyer, to facilitate rupee payment. As a result, the goods were deemed liable for confiscation under Section 113, and a penalty was imposed under Section 114. The petitioner paid the fine and penalty to release the goods. The court evaluated whether the confiscation and penalties were justified based on the alleged contravention of Section 12(1).
4. Validity of the declaration under Section 12(1) of the Foreign Exchange Regulation Act, 1947:
The court examined whether the petitioner's declaration under Section 12(1) was valid. The amended Section 12(1) requires a declaration that is true in all material particulars, including the full export value of the goods. The court noted that the petitioner had filed the required declaration and there was no evidence of underinvoicing or misrepresentation of the goods' value. The court concluded that the declaration was valid and did not constitute a violation of Section 12(1).
5. Misdeclaration of the buyer's name under Section 50(2) of the Customs Act, 1962:
The show cause notice alleged misdeclaration of the buyer's name, which was initially considered a contravention of Section 12(1) of the Foreign Exchange Regulation Act, 1947. However, the court found that the misdeclaration of the buyer's name did not constitute a violation of Section 12(1) and was not pursued further. The court determined that the misdeclaration was irrelevant to the petition.
Conclusion:
The court concluded that there was no contravention of Section 12(1) of the Foreign Exchange Regulation Act, 1947, as the petitioner's declaration was valid and true in all material particulars. Consequently, the confiscation and penalties imposed under Sections 113 and 114 of the Customs Act, 1962, were unjustified. The court quashed the order of the first respondent and disposed of the original petition accordingly.
-
1971 (12) TMI 45
Issues:
1. Interpretation of the definition of "foreign-going vessel" under the Customs Act, 1962.
2. Validity of circulars issued by the Collector of Customs regarding payment of duty on imported stores on board vessels engaged in coastal trade.
3. Application of Imported Stores (Retention on Board) Regulations, 1963 to vessels carrying predominantly coastal cargo.
4. Consideration of alternative remedy provided in the statute for challenging Customs duty demands.
Analysis:
1. The case involved a challenge against circulars issued by the Collector of Customs regarding payment of duty on imported stores on board vessels engaged in coastal trade. The petitioner, a limited company owning sea-going vessels, argued that its vessel, despite carrying coastal cargo, maintained the status of a "foreign-going vessel" under the Customs Act, 1962.
2. The respondent contended that the vessel, due to carrying predominantly coastal cargo on a voyage from Calcutta to Bombay, lost its foreign-going status, making the imported stores on board liable for Customs duty payment as per the circulars issued. The respondent also argued that the Imported Stores (Retention on Board) Regulations, 1963 applied to vessels carrying mostly coastal cargo.
3. The court analyzed the relevant sections of the Customs Act, specifically sections 2(7), 2(21), and 87, defining coastal goods, foreign-going vessels, and provisions for consuming imported stores on board a foreign-going vessel without payment of duty. The court emphasized that the carriage of goods for intermediate Indian ports did not affect the vessel's foreign-going status if cleared for a port outside India.
4. The court rejected the respondent's argument that the circular applied to vessels carrying predominantly coastal cargo, stating that the circulars were not applicable to imported stores on board a foreign-going vessel. The court held in favor of the petitioner, ruling that the demand for duty payment on consumable stores on a foreign-going vessel carrying coastal cargo was not sustainable. The court set aside the impugned order and restrained the respondents from enforcing the circulars against the petitioner.
5. The judgment highlighted that the provisions of Chapter XII, applicable to coastal goods, did not extend to imported stores on board a foreign-going vessel. The court upheld the petitioner's contention, ruling in their favor and granting relief by setting aside the circulars and restraining their enforcement. The court also stayed the operation of the order for three months, with no order as to costs.
-
1971 (12) TMI 44
Issues:
Interpretation of Section 4 and Explanation under Central Excises and Salt Act, 1944 for determining the value of excisable goods.
Validity of notifications exempting excise duty on footwear.
Difference in interpretation between High Court at Calcutta and Patna High Court regarding the determination of value for exemption from duty.
Analysis:
1. Interpretation of Section 4 and Explanation:
The appeal raised concerns regarding the interpretation of Section 4 and the Explanation under the Central Excises and Salt Act, 1944 for determining the value of excisable goods. The appellant contended that the learned Judge erred in not deducting the trade discount allowance and the amount of duty payable from the wholesale cash price before determining the value of the article. The argument focused on the necessity to calculate the value first to ascertain if it falls below a certain threshold for exemption under the notification.
2. Validity of Exemption Notifications:
The case involved three crucial notifications, particularly G.S.R. 360 and G.S.R. 804, which exempted excisable goods, specifically footwear, from excise duty. The third notification dated 24th July, 1967, exempted footwear with a value not exceeding Rs. 500 per pair from excise duty. The central issue revolved around the correct interpretation of the term "value" in this exemption notification and whether the principles of Section 4 should apply to determine the value for exemption purposes.
3. Interpretation Discrepancy between High Courts:
A significant aspect of the judgment was the discrepancy in interpretation between the High Court at Calcutta and the Patna High Court regarding the determination of value for exemption from duty. The Patna High Court emphasized that duty should be deducted from the wholesale price before considering exemption, contrary to the Calcutta High Court's view. The Calcutta High Court held that the determination of value for exemption should occur after the duty has been paid and calculated, not based on the deemed value under Section 4 for duty purposes.
4. Conclusion:
The Chief Justice dismissed the appeal, upholding the judgment of the learned Judge in its entirety, including observations on the cross-objection. The conclusion emphasized that the value for exemption from duty should be the actual value after duty payment, as per Rule 8 of the Central Excise Rules. The judgment highlighted the distinction between the value for duty determination under Section 4 and the value for exemption under the notification. The decision clarified that the exemption is granted only after the duty has been levied, and the goods are deemed excisable and leviable with duty.
5. Costs and Stay Order:
The judgment concluded by dismissing the cross-objection and ruling no order as to costs. Additionally, a stay of operation was granted until a specified date. The detailed analysis provided clarity on the interpretation of legal provisions and notifications, resolving the issues raised in the appeal effectively.
-
1971 (12) TMI 43
Whether firm continued to employ the looms in the factories after December, 1956 when direct purchases of the manufactured cloth were suspended?
Held that:- From account books it was seen during the course of personal hearing that yarn was supplied on various dates between July, 1956 to April, 1957 (even after December 1956) of the total value of ₹ 54,776-2-9 to M/s. Chintamani Wvg. Mills. In addition cash advances were made on different occasions between these dates amounting to ₹ 12,875,00. The total payments made by the factory to your firm amount to ₹ 60,211-3-6. There are no accounts to indicate that the individual factory owners were charged for any expenditure on account of baling or for transport. It passes comprehension why a commercial concern engaged with profit taking motive should first advance large sum of monies to the individual factory owners, receive their entire production supply sized beams of yarn, get the cloth processed at Bombay, make sales and charge no forwarding commission, on baling expenses and no transport charges.
Under these circumstances, unable to agree with contention that you ceased to employ looms from the individual factories after December, 1956.
The conclusions of the Assistant Collector and of the Collector which are identical that one out of the 16 units of factories manufacturing cloth on behalf of the appellant was a licensed one are amply supported by evidence on the record and have not been shown to be vitiated by any legal error nor has any grave injustice been shown to have resulted thereby to the appellant. On these conclusions there can be no doubt that appellant is a manufacturer within the contemplation of the Act and the exemption under item (10) of the notification dated March 1, 1956 or under item (7) of the notification dated Januray 5, 1957 is not available to the appellant. Appeal dismissed.
-
1971 (12) TMI 42
Issues Involved:
1. Whether the assessee's income for the assessment years 1960-61 and 1961-62 was exempt from income-tax under section 4(3)(i) of the Indian Income-tax Act, 1922.
2. Whether the assessee's income for the assessment year 1962-63 was exempt from income-tax under section 11 of the Income-tax Act, 1961.
Detailed Analysis:
Issue 1: Exemption under Section 4(3)(i) of the Indian Income-tax Act, 1922 for Assessment Years 1960-61 and 1961-62
The court examined whether the income of the Andhra Pradesh Road Transport Corporation (the assessee) for the assessment years 1960-61 and 1961-62 was exempt under section 4(3)(i) of the Indian Income-tax Act, 1922. This section exempts income derived from property held under trust wholly for religious or charitable purposes. The definition of "charitable purposes" includes the relief of the poor, education, medical relief, and the advancement of any other object of general public utility.
The court determined that the dominant and sole purpose of the assessee was to provide transport facilities to the public, trade, and industry, which qualifies as a public utility service and, therefore, a charitable purpose. The court noted that although the Act allows for raising capital through shares and paying dividends, the assessee had not raised share capital and was funded entirely by the State Government. The surplus income was to be used for road development, further confirming the charitable nature of the enterprise.
The court referenced several precedents, including decisions from the Privy Council and the Supreme Court, which supported the view that the assessee's activities were for the advancement of general public utility. Consequently, the court concluded that the assessee's income was exempt from tax for the years 1960-61 and 1961-62 under section 4(3)(i) of the Indian Income-tax Act, 1922.
Issue 2: Exemption under Section 11 of the Income-tax Act, 1961 for Assessment Year 1962-63
For the assessment year 1962-63, the court had to consider the provisions of section 11 of the Income-tax Act, 1961, which exempts income derived from property held under trust wholly for charitable or religious purposes. The definition of "charitable purposes" under section 2(15) of the 1961 Act includes the advancement of any other object of general public utility, not involving the carrying on of any activity for profit.
The court acknowledged that the definition under the 1961 Act introduced a new element, "not involving the carrying on of any activity for profit," which had led to varied interpretations by different High Courts. The court reviewed the decisions of the Kerala, Calcutta, and Mysore High Courts, which had interpreted this clause differently.
The court took a different view, emphasizing that the inclusive definition of "charitable purpose" should be read in conjunction with the overall objective of the statute. The court held that the purpose of the restriction was to prevent entities with a profit motive from claiming charitable status, not to exclude entities that incidentally earn income while primarily serving a public utility purpose.
The court found that the assessee's activities did not involve a profit motive and that any surplus income was used for road development, a public utility purpose. Therefore, the court concluded that the assessee was an institution meant for the advancement of general public utility, not involving the carrying on of any activity for profit, and its income was exempt from tax under section 11 of the Income-tax Act, 1961, for the assessment year 1962-63.
Conclusion
The court answered the question referred to it in the affirmative, holding that the assessee's income was exempt from income-tax under section 4(3)(i) of the Indian Income-tax Act, 1922, for the assessment years 1960-61 and 1961-62, and under section 11 of the Income-tax Act, 1961, for the assessment year 1962-63. The assessee was awarded costs, including an advocate's fee of Rs. 250.
........
|
9911796707
