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1990 (11) TMI 422
Issues:
1. Validity of transfer orders issued by the District Education Establishment Committee to lady teachers in Primary Schools in Bihar.
2. Jurisdiction of the District Education Establishment Committee to transfer teachers on their request.
3. Challenge to transfer orders on the grounds of public interest and administrative reasons.
4. Authority of the competent authority to issue transfer orders in public interest.
Detailed Analysis:
The Supreme Court addressed the issue of the validity of transfer orders issued by the District Education Establishment Committee to lady teachers in Primary Schools in Bihar. The High Court had set aside the transfer orders and directed the reposting of the displaced teachers to their original places. The Supreme Court found that the High Court erred in interfering with the transfer orders, emphasizing that the District Education Establishment Committee had the jurisdiction to transfer teachers, even if the transfers were made on the teachers' requests. The Court highlighted that the Director of Primary Education had issued reasonable directions to accommodate lady teachers at requested places to avoid hardship, which the Committee followed in transferring the appellants.
The Court further analyzed the challenge to the transfer orders based on public interest and administrative reasons. It emphasized that government servants holding transferable posts have no vested right to remain at one place and are liable to be transferred. The Court stated that transfer orders made in public interest and for administrative reasons should not be interfered with by the Courts unless there is a violation of mandatory statutory rules or malafide intent. The Court cautioned against judicial interference in day-to-day transfer orders, highlighting that such interference could lead to chaos in the administration and not be conducive to public interest.
Ultimately, the Supreme Court allowed the appeal, set aside the High Court's order, and dismissed the petition filed by the displaced teachers. The Court directed the appellants to be posted to the places to which they had been transferred under the challenged orders, emphasizing that there would be no costs awarded in the matter. The judgment reinforced the principle that transfer orders made by competent authorities in public interest should not be lightly interfered with by the Courts, unless there are clear violations of legal rights or malafide intentions.
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1990 (11) TMI 421
Issues:
1. Whether the assessee was entitled to adjust expenditure in the books of account after the close of the accounting year related to managerial remuneration.
2. Whether the Tribunal was correct in allowing the deduction of a specific amount in the assessment year.
3. Whether the Tribunal was justified in deleting a certain amount from the assessment for a particular year.
Analysis:
Issue 1:
The case involved the adjustment of managerial remuneration expenditure in the books of account after the close of the accounting year. The Tribunal allowed the adjustment based on the consistent method of accounting followed by the assessee. The Government's approval for the remuneration came after the relevant accounting year, but the assessee made the adjustment in line with its past practice. The Tribunal relied on the judgment in CIT v. Birla Gwalior (P.) Ltd. to support the deduction. The High Court agreed, emphasizing the genuine business nature of the expenditure and the assessee's accounting practices.
Issue 2:
Regarding the specific deduction allowed by the Tribunal, the amount in question was related to the difference between the approved managerial remuneration and the amount debited by the assessee in previous years. The Tribunal permitted the deduction based on the consistent accounting method and the fact that the excess amount had been duly offered for taxation in a prior year. The High Court upheld this decision, highlighting the factual basis and the absence of tax implications.
Issue 3:
The third issue pertained to the deletion of a specific amount from the assessment for a particular year. The Tribunal justified this deletion by considering the assessee's accounting practices and the timing of the Government's approval for the remuneration. The High Court concurred, noting that the deletion was in line with the overall accounting treatment and did not result in any loss to revenue. The Court referenced relevant case law and emphasized equitable interpretation in tax matters.
In conclusion, the High Court answered all three questions in favor of the assessee, highlighting the consistency in accounting practices, the genuine nature of the expenditures, and the absence of adverse revenue implications. The judgment underscored the importance of equitable interpretation in tax law and upheld the Tribunal's decisions based on the factual and legal analysis presented.
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1990 (11) TMI 420
Issues:
1. Regularization of service and seniority disputes among direct recruits in the Central Information Service.
2. Interpretation of service rules and notifications regarding seniority and promotion.
3. Judicial review of government actions in accordance with service rules.
Analysis:
1. The case involved Civil Appeals and a Writ Petition regarding the regularization of service in the Central Information Service (C.I.S) and the subsequent seniority disputes among direct recruits. The petitioners were initially not regularly recruited but were later regularized in service in 1977 through amendments to the Rules.
2. The Central Information Service Rules, 1959, established the C.I.S, with provisions for direct recruitment and promotion within the service. The dispute in this case focused on the inter se seniority among direct recruits to Grade IV, with specific reference to the regularized employees and their placement in the service hierarchy.
3. The notification issued on 27th January, 1977, regularized the services of certain ad hoc employees in Grade IV of the C.I.S. The petitioners challenged the direction in the notification that placed regularized employees below the regular recruits up to 1970 based on that year's examination results.
4. The High Court and Division Bench decisions favored the regularized employees, considering their officiating service from 1964 to 1977 for determining seniority. However, the Supreme Court emphasized that seniority in service is governed by service rules, and in the absence of specific provisions, the length of service is a key factor.
5. The Court rejected arguments equating regular recruitment examinations with the screening process for regularized employees. It upheld the government's decision to place regularized officers below regular recruits based on the 1970 examination results, as per the service rules.
6. The Court clarified that disputes over seniority between direct recruits and promotees should be resolved according to the rules governing each category. It highlighted the importance of adhering to service rules and refraining from judicial interference when government actions align with the established regulations.
7. The Court acknowledged concerns regarding potential reversion of the petitioner due to the seniority dispute. It suggested allowing the petitioner to hold a supernumerary post without further promotion until entitled based on seniority as per the regularization notification.
8. The Court dismissed claims for considering past service of regularized employees not covered by the regularization notification, emphasizing adherence to the rules for determining seniority. Ultimately, the Civil Appeals were allowed, setting aside the lower court judgments and dismissing the claims filed before the Central Administrative Tribunal.
9. The Court reiterated the importance of following service rules to avoid disruptions and urged governments to adhere to the rules framed under Article 309 of the Constitution. It emphasized the binding nature of such rules and the need for compliance to prevent issues arising from deviations.
10. The Court concluded by stating that there would be no order as to costs in the case, emphasizing the significance of adherence to service rules and the rule of law in matters related to service regularization and seniority disputes.
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1990 (11) TMI 419
Issues:
1. Validity of public notice issued by Delhi Development Authority proposing modifications to the Master Plan for Delhi.
2. Consideration of belated objections filed by the appellants.
3. Compliance with the requirements of Section 44 of the Delhi Development Act, 1957 regarding public notice.
Analysis:
Issue 1: Validity of Public Notice
The Delhi Development Authority issued a public notice proposing modifications to the Master Plan for Delhi, changing the land use from 'Residential' to 'Recreational (District Park and Open Spaces)' for a specific area. The appellants, a religious denomination, challenged the notice alleging lack of proper publicity as required under Section 44 of the Act. The High Court rejected the writ petition, stating that even if the provisions were not fully complied with, the appellants were not prejudiced. However, the Supreme Court found that the objections were not properly considered, leading to a lack of prejudice to the appellants. The Court emphasized that objections filed within the prescribed period must be considered by the authorities to avoid prejudice.
Issue 2: Consideration of Belated Objections
The Court examined whether the belated objections filed by the appellants were duly considered by the authorities. The Secretary of the Delhi Development Authority stated that the objections were transmitted to the Central Government for consideration. However, there was no clear record indicating that the objections were considered and rejected. The Court highlighted that the absence of a record of objection disposal raised doubts about the proper consideration of objections. It was emphasized that objections filed within the specified period should be considered to prevent prejudice.
Issue 3: Compliance with Section 44 of the Act
The critical question revolved around the requirements of Section 44 of the Act regarding public notice. The section mandates wide dissemination of the notice in the affected locality through various means like affixing copies in public places, publishing by beat of drum, or in local newspapers. The Court interpreted the section's language and emphasized that the publication methods must be strictly followed to ensure affected parties have a clear notice and opportunity to file objections. In this case, the notice was only published in local newspapers, failing to meet the mandatory requirements of Section 44. Consequently, the Court held the notice invalid and quashed it along with the actions taken based on it.
In conclusion, the Supreme Court allowed the appeal, set aside the High Court's order, and invalidated the public notice, emphasizing the mandatory nature of compliance with statutory provisions for public notices to protect the rights of affected parties.
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1990 (11) TMI 418
The Supreme Court upheld the penalty imposed under the Foreign Exchange Regulation Act but reduced the amount to Rs. 25,000 due to extenuating circumstances. The High Court has the power to modify penalties on appeal, and the appeal was ultimately dismissed with no costs.
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1990 (11) TMI 417
Issues Involved:
1. Whether the material in question, which is being manufactured at the intermediate stage, is 'sodium rosinate'.
2. If not, whether it is a derivative of rosin.
3. Whether it is marketable.
4. Whether there was justification for invoking a longer period of limitation.
Detailed Analysis:
1. Whether the material in question is 'sodium rosinate':
The appellants contended that they were not manufacturing 'sodium rosinate' but rather an aqueous solution used for sizing paper. The process involves mixing soda ash and rosin, heating, and then using the resultant emulsion for paper sizing. The adjudicating authorities alleged that the appellants were manufacturing sodium rosinate, but the evidence provided, including chemical test reports, indicated that the product was an aqueous solution or emulsion rather than pure sodium rosinate. The dictionary definition of sodium rosinate (sodium abietate) describes it as a white powder soluble in water, derived by leaching rosin with sodium hydroxide solution. The test reports and the adjudicating authorities' findings did not conclusively prove the manufacture of sodium rosinate as defined.
2. Whether it is a derivative of rosin:
The adjudicating authorities suggested that the material might be a derivative of rosin. However, technical literature and definitions provided by the appellants indicated that a derivative should be a solid, easily prepared, and purified substance. The material in question did not meet these criteria, as it was an aqueous solution or emulsion used in a continuous process. The adjudicating authorities did not provide sufficient evidence to classify the material as a derivative of rosin.
3. Whether it is marketable:
The appellants argued that the material was not marketable as it was produced in a continuous process and had a short shelf life. The adjudicating authorities did not provide evidence of marketability. The Supreme Court rulings in Bhor Industries Ltd. v. CCE and CCE, Baroda v. A.S. Enterprise established that for a product to be excisable, it must be marketable. The department failed to prove that the material was marketable, and thus, it could not be considered excisable.
4. Whether there was justification for invoking a longer period of limitation:
The longer period of limitation was invoked on the grounds of alleged suppression of facts by the appellants. However, the appellants had been availing of benefits under Notification No. 201/79, which required them to disclose the use of rosin in their manufacturing process. The adjudicating authorities acknowledged that the demand arose due to changes in the Central Excise Tariff and not due to suppression of facts. Therefore, the invocation of the longer period of limitation was not justified.
Conclusion:
The Tribunal concluded that the material in question was not sodium rosinate, nor was it a derivative of rosin. It was not marketable, and the invocation of the longer period of limitation was unjustified. The benefit of Notification No. 225/86 was admissible. Consequently, the appeals filed by the assessees were allowed, and the appeals filed by the Collector of Central Excise were dismissed.
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1990 (11) TMI 416
Issues Involved:
1. Allegations of bias and malafides against the inquiring officer.
2. Irregularities and violations of Army Rules 22 to 25.
3. Validity and legality of the court-martial proceedings.
4. Confirmation and promulgation of the court-martial findings and sentence.
5. Discrimination in the award of punishment.
6. Procedural defects in convening the general court-martial.
7. Adequacy of defense provided to the petitioner.
8. Allegations of fabricated and fictitious charges.
9. Compliance with procedural safeguards under the Army Act and Rules.
Detailed Analysis:
1. Allegations of Bias and Malafides Against the Inquiring Officer:
The petitioner alleged that Lt. Col. S.K. Maini, who ordered the summary of evidence, was biased and acted with malafides. The petitioner claimed that Lt. Col. Maini had a grudge against him due to prior incidents, including a report made by the petitioner against Lt. Col. Maini. However, the counter-affidavit denied these allegations, stating that the petitioner's complaints were investigated, and the cases were closed. The court found no substantial evidence of bias or malafides and noted that Lt. Col. Maini was only involved in the preliminary inquiry, not the court-martial proceedings.
2. Irregularities and Violations of Army Rules 22 to 25:
The petitioner argued that there was a gross violation of Rules 22 and 25, which require that charges be heard in the presence of the accused and that the accused be allowed to cross-examine witnesses. The petitioner contended that his consent to dispense with his presence during the summary of evidence was obtained fraudulently. However, the court found that the petitioner had given his consent in writing and that there was no substantial evidence of irregularities. The court also noted that any minor irregularities in the preliminary proceedings did not affect the general court-martial, which conducted a regular trial.
3. Validity and Legality of the Court-Martial Proceedings:
The petitioner challenged the legality of the general court-martial, arguing that the convening order was defective and that the presiding officer was junior to him. The court found that the convening order was signed by a superior officer and that the presiding officer was a Colonel, thus superior to the petitioner. The court held that there were no serious legal infirmities in the convening of the court-martial or its proceedings.
4. Confirmation and Promulgation of the Court-Martial Findings and Sentence:
The petitioner contended that the findings and sentence of the general court-martial were not properly confirmed. The court noted that the confirmation was done by the General Officer Commanding-in-Chief Command, as authorized by the Central Government. The court found no infirmity in the confirmation process and held that the procedural requirements were substantially complied with.
5. Discrimination in the Award of Punishment:
The petitioner argued that there was discrimination in the award of punishment, citing examples of other officers who received lesser penalties for similar offenses. The court held that it was within the discretion of the general court-martial to decide the appropriate sentence based on the circumstances of each case. The court found no evidence of discrimination or disproportionate punishment.
6. Procedural Defects in Convening the General Court-Martial:
The petitioner claimed that the convening order was signed in a mechanical way and not by the authorized officer. The court found that the convening order was signed by a Staff Officer for the General Officer Commanding, which was in compliance with the rules. The court dismissed the argument that the convening order was defective.
7. Adequacy of Defense Provided to the Petitioner:
The petitioner argued that he was not provided with a defense counsel of his choice and that his request for adjournment to engage a defense counsel was denied. The court noted that the petitioner was represented by a defending officer as per the rules and that there was no evidence of prejudice caused to his defense. The court held that the procedural requirements for providing defense were duly followed.
8. Allegations of Fabricated and Fictitious Charges:
The petitioner contended that the charges against him were fabricated and fictitious, pointing out inconsistencies in the charge-sheet. The court found that the description of the occurrence in different terms did not affect the case and that the investigation was a preliminary step meant for gathering evidence. The court held that the charges were properly framed and that the petitioner was duly informed of the accusations against him.
9. Compliance with Procedural Safeguards Under the Army Act and Rules:
The petitioner argued that the procedural safeguards under the Army Act and Rules were not followed, particularly Rules 22 to 25. The court held that these rules were not mandatory for officers unless they specifically requested compliance. The court found that the petitioner did not exercise his option under Rule 25 and that there was no violation of mandatory rules. The court emphasized that the main objective was to ensure that the accused was aware of the charges and had the opportunity to defend himself, which was achieved in this case.
Conclusion:
The court dismissed both writ petitions, finding no substantial evidence of bias, malafides, or procedural irregularities that would vitiate the court-martial proceedings. The court held that the procedural requirements were substantially complied with and that no prejudice was caused to the petitioner. The court emphasized the importance of maintaining discipline in the armed forces and upheld the findings and sentence of the general court-martial.
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1990 (11) TMI 415
Issues Involved:
1. Validity of the termination of the distributorship.
2. Reliefs to which the plaintiff is entitled if the termination is invalid.
3. Entitlement of the defendant to make a counter-claim.
Summary:
Issue 1: Validity of the Termination of the Distributorship
The Supreme Court examined whether the termination of the plaintiff's distributorship by the Indian Oil Corporation Ltd. (the appellant) was validly effected. The arbitrator found that the termination was not validly made under Clause 27 of the Distributorship Agreement. The appellant had terminated the distributorship citing unauthorized connections and tampering with the waiting list, which were deemed prejudicial to the Corporation's interests. However, the arbitrator concluded that the termination was wrongful and invalid.
Issue 2: Reliefs to the Plaintiff
Upon finding the termination invalid, the arbitrator granted several reliefs to the plaintiff:
- Declaration of Wrongful Termination: The termination of the distributorship was declared wrongful and invalid.
- Restoration of Distributorship: The arbitrator directed the restoration of the distributorship, considering it an exceptional case due to the nature of the distributorship and the livelihood of the partners.
- Compensation: The plaintiff was entitled to compensation for the commission that would have been earned from the date of wrongful termination until the distributorship was restored.
- Return of Property: The arbitrator ordered the return of 224 filled cylinders, 384 regulators, and other articles taken by the appellant.
- Refund of Draft Amounts: The appellant was directed to return the amounts of two drafts of Rs. 15,580.83 each, as no supplies were made against these drafts.
Issue 3: Counter-Claim by the Defendant
The arbitrator did not decide on the counter-claim made by the appellant, stating that it did not fall within the scope of the reference made by the Supreme Court. The counter-claim was not present at the time of the reference order dated April 9, 1986.
Supreme Court's Decision:
- Restoration of Distributorship: The Supreme Court held that granting the relief of restoration of the distributorship was contrary to law, as the contract was determinable in nature and could not be specifically enforced u/s 14(1) of the Specific Relief Act.
- Compensation: The Court modified the award, granting compensation for the notice period of thirty days instead of restoration of the distributorship. The compensation was to be calculated based on the earnings during that period.
- Return of Property: The direction to pay the price of 224 cylinders and 384 regulators was found erroneous, as these were the property of the appellant. However, the direction to refund the amounts of the two drafts was upheld.
- Counter-Claim: The Court acknowledged the merit in the appellant's grievance regarding the non-consideration of the counter-claim but did not examine it further as it was not pressed by the appellant's counsel.
Final Order:
The award was modified to grant compensation for the thirty-day notice period and refund of the draft amounts, but not the restoration of the distributorship. Costs of arbitration and the appeal were to be borne by the appellant.
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1990 (11) TMI 414
Issues Involved:
1. Validity of sale deed executed prior to attachment before judgment but registered subsequently.
2. Interpretation of Order 38 Rule 5 and Rule 10 of the Civil Procedure Code (CPC).
3. Application of Section 64 of the CPC.
4. Effect of Section 47 of the Registration Act on the sale deed.
5. Relevance of Section 49 of the Registration Act.
6. Impact of subsequent court sale on the rights of the vendee.
Summary:
1. Validity of Sale Deed Executed Prior to Attachment Before Judgment but Registered Subsequently:
The core issue was whether Hamda Ammal, who purchased the property via a sale deed executed on 9.9.1970 but registered on 26.10.1970, had a superior claim over Avadiappa, who obtained an attachment before judgment on 17.9.1970. The Court held that the sale deed executed before the attachment but registered later would prevail over the attachment before judgment.
2. Interpretation of Order 38 Rule 5 and Rule 10 of the CPC:
Order 38 Rule 5 CPC allows attachment before judgment if the defendant intends to obstruct or delay the execution of any decree. However, this provision does not apply if the sale deed was executed before the suit was filed. Order 38 Rule 10 CPC states that attachment before judgment shall not affect the rights existing prior to the attachment of persons not parties to the suit.
3. Application of Section 64 of the CPC:
Section 64 CPC prohibits private alienation of property after attachment. However, the Court clarified that this does not affect the registration of a sale deed executed before the attachment. The act of registration, which is a statutory requirement, does not constitute a transfer prohibited by Section 64.
4. Effect of Section 47 of the Registration Act on the Sale Deed:
Section 47 of the Registration Act stipulates that a registered document operates from the time it would have commenced if no registration was required. Thus, the rights of the vendee relate back to the date of execution of the sale deed, not the date of registration.
5. Relevance of Section 49 of the Registration Act:
Section 49 of the Registration Act, particularly its proviso, allows an unregistered document to be received as evidence for specific performance or part performance of a contract. This negates the argument that the execution of the sale deed confers no rights until registration.
6. Impact of Subsequent Court Sale on the Rights of the Vendee:
The Court rejected the argument that the subsequent court sale in favor of respondent No. 5, M.S.A. Kadar, could override the rights of Hamda Ammal. Once the sale deed was executed, the subsequent attachment or court sale could not confer any title to the attaching creditor.
Case References:
- The Court distinguished the present case from Ram Saran Lall v. Mst. Domini Kuer, which dealt with pre-emption under Mohammedan Law.
- The Court referred to Hiralal Agrawal v. Rampadarath Singh, noting that the question of re-conveyance was academic in that context.
- The Court endorsed the view in Vannarakkal Kallalathil Sreedharan v. Chandramaath Balakrishnan, which held that a sale deed executed before attachment but registered later prevails over the attachment.
Conclusion:
The appeal was allowed, the High Court's order was set aside, and the Subordinate Judge's decision decreeing the suit in favor of the plaintiff was confirmed. Each party was directed to bear their own costs.
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1990 (11) TMI 413
Issues:
Validity of transfer orders issued to lady teachers in Primary Schools in Bihar on their request challenged by displaced teachers before the High Court under Article 226 of the Constitution.
Analysis:
The Supreme Court, comprising K Singh and K Ramaswamy, JJ., granted leave in a case where lady teachers in Primary Schools in Bihar were transferred to places where their husbands were posted upon their request. The transfer orders were challenged by displaced teachers before the High Court under Article 226 of the Constitution. The High Court set aside the transfer orders and directed the reposting of the displaced teachers to their previous locations.
Upon considering the facts and circumstances of the case, the Supreme Court found that the High Court erred in interfering with the transfer orders issued by the District Education Establishment Committee. The Court held that the Committee had the jurisdiction to transfer Primary School teachers, even upon their request. The Director of Primary Education had issued directions to accommodate lady teachers to avoid hardship, which the Committee followed in transferring the appellants. The Court emphasized that the High Court's reasoning for declaring the transfer orders invalid was unfounded.
The Supreme Court further stated that Courts should not interfere with transfer orders made in public interest and for administrative reasons unless there is a violation of mandatory statutory rules or malafide intentions. Government servants holding transferable posts do not have a vested right to remain at a specific location and are liable to be transferred. Even if a transfer order violates executive instructions, the Courts should not intervene, and the affected party should seek recourse through higher authorities. The Court warned against excessive judicial interference in day-to-day transfer orders, as it could lead to administrative chaos.
Consequently, the Supreme Court allowed the appeal, overturned the High Court's order, and dismissed the petition filed by the displaced teachers. The appellants were directed to be posted at the places to which they had been transferred under the challenged orders, with no costs imposed on any party.
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1990 (11) TMI 412
Issues:
1. Interpretation of Sale Promotion expenses under section 37(3A) of the Income-tax Act, 1961.
2. Application of section 92 of the Income-tax Act, 1961 to a transaction between a resident and a non-resident company.
Analysis:
1. The first issue pertains to determining whether certain expenses should be classified as Sale Promotion expenses falling under section 37(3A) of the Income-tax Act, 1961. The Court referred to a previous decision in CIT v. Hindusthan Motors Ltd. where a similar issue was addressed. Following the precedent, the Court concluded that the expenses in question should indeed constitute Sale Promotion expenses, ruling in favor of the assessee.
2. The second issue involves the application of section 92 of the Income-tax Act, 1961 to a transaction between a resident company and a non-resident company regarding the sale of machinery. The Income Tax Officer (ITO) had added a certain amount to the assessment as income of the assessee, alleging that the transaction was arranged to produce no profit, resulting in a loss to the resident company. However, the Commissioner (Appeals) and the Tribunal overturned this decision, stating that section 92 did not apply in this case.
3. The Court analyzed the agreement between the resident company and the non-resident company in Indonesia. It was established that the resident company's contribution towards the new company in Indonesia was through the export of plant and machinery as per the agreement and approvals from regulatory authorities. The Court emphasized that the contribution was in kind, not for profit, but to fulfill the capital requirements as per the agreement.
4. The Court highlighted the key elements of section 92, emphasizing that it applies when a business deal between a resident and a non-resident results in no profit or less profit due to their close connection. However, in this case, the Court found that the transaction was a capital contribution in the form of plant and machinery, not a business deal for profit. Therefore, the provisions of section 92 were deemed inapplicable.
5. Based on the facts presented, the Court upheld the Tribunal's decision that section 92 did not apply to the transaction in question. The Court ruled in favor of the assessee, concluding that the provisions of section 92 were not relevant in this scenario, as the transaction was a capital contribution and not a business deal for profit.
6. Ultimately, the Court answered the second question in the reference in the affirmative and in favor of the assessee, stating that there would be no order as to costs.
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1990 (11) TMI 411
The High Court of Calcutta ruled in favor of the assessee regarding the interest on fixed deposits and the sum credited in the P&L account, citing a previous decision. The court held that the provisions of section 41(1) of the IT Act, 1961 could not be applied as the assessee did not claim any deduction.
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1990 (11) TMI 410
Issues Involved:
1. Whether the alteration of Art. 311(2) under the Forty-second Amendment of the Constitution affects the delinquent's right to a copy of the inquiry report in disciplinary proceedings.
2. The impact of non-supply of the inquiry report on the punishment imposed.
3. The application of natural justice principles in disciplinary inquiries post the Forty-second Amendment.
4. The classification of cases where the disciplinary authority is also the Inquiry Officer versus cases where they are separate entities.
Summary:
Issue 1: Alteration of Art. 311(2) and Right to Inquiry Report
The core issue is whether the Forty-second Amendment, which removed the opportunity to show cause against proposed punishment, affects the delinquent's right to a copy of the inquiry report. Originally, Art. 311(2) provided that no person shall be dismissed or removed until given a reasonable opportunity to show cause against the proposed action. The Fifteenth Amendment modified this to include a reasonable opportunity of making representation on the penalty proposed. The Forty-second Amendment further altered this by removing the necessity of giving an opportunity to make representation on the proposed penalty, thus changing the procedural safeguards.
Issue 2: Non-Supply of Inquiry Report and Punishment
The Court examined whether non-supply of the inquiry report violates the guarantee of 'reasonable opportunity.' Previous judgments, such as in Khem Chand v. Union of India and Union of India v. H.C. Goel, established that a delinquent must be given two opportunities: to defend against charges and to make representations on the proposed punishment. The Court held that the Forty-second Amendment's deletion of the second stage does not materially change the requirement to provide the inquiry report, as it remains essential for the delinquent to make an informed representation.
Issue 3: Natural Justice Principles Post Forty-second Amendment
The Court emphasized that disciplinary inquiries are quasi-judicial and must adhere to natural justice principles. The delinquent must be informed of the charges and given a fair hearing. The Inquiry Officer's report, especially if it includes recommendations on punishment, constitutes adverse material that must be disclosed to the delinquent to ensure a fair procedure. The Court cited Prof. Wade's assertion that natural justice principles are integral to fair administrative procedures unless explicitly excluded by legislation.
Issue 4: Classification of Cases Based on Inquiry Officer's Role
The Court addressed the argument based on Art. 14, stating that there is a reasonable classification between cases where the disciplinary authority is also the Inquiry Officer and those where they are separate. In the former, no separate report exists, while in the latter, the report is an additional material that must be disclosed to the delinquent. This classification does not violate the equality principle under Art. 14.
Conclusion:
The Court concluded that the Forty-second Amendment does not negate the requirement to supply a copy of the inquiry report to the delinquent. Non-supply of the report violates natural justice principles and makes the final order liable to challenge. The judgment has prospective application, and any disciplinary action taken without furnishing the inquiry report is set aside. The disciplinary authority may revise and continue proceedings from the stage of supplying the inquiry report. Appeals allowed.
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1990 (11) TMI 409
Issues involved: Contract for appropriation of Tendu Leaves, Recovery of unpaid instalments, Interpretation of Forest Act provisions, Validity of certificate proceeding.
Summary:
1. The appellant entered into a contract with the State of Bihar for Tendu Leaves appropriation, with payment in three instalments. Dispute arose when two instalments were unpaid, leading to recovery proceedings under Bihar Public Demands Recovery Act, challenged in Article 226 proceeding before Patna High Court, which upheld the action, resulting in this appeal.
2. The appellant argued that the contract was rescinded, making the claim for damages, not the balance of the sale price. Contention was that Forest Act Section 82 did not apply, and recovery should be through civil action under Sale of Goods Act, deeming the summary procedure unauthorized.
3. Support for the appellant's stand was drawn from various High Court decisions, emphasizing the application of Sale of Goods Act provisions over Forest Act Section 83. However, the legislative intent behind Section 83 of the Forest Act was overlooked, which establishes the government's first charge on forest produce sold.
4. Section 83 of the Forest Act clearly outlines the government's priority charge on forest produce, authorizing sale by Forest Officer to satisfy debts. The special legislation under Sections 82 and 83 of the Act supersedes general laws like the Sale of Goods Act for forest produce contracts.
5. The contract in question contradicted the Forest Act's scheme, attempting to deny the contractor the right to claim excess money from subsequent sales, contrary to Section 83(3) provisions. The obligation is on the State to follow the special procedure provided by law in such transactions.
6. The Court held that the different High Courts' considerations regarding recovery of unpaid forest contract money, where Sections 82 and 83 apply, were not valid law. The demand for the third-year instalment, not yet due, could not be included in the recovery certificate, rendering the proceeding legally flawed.
7. As the appeal was under Article 226, the Court declined to interfere in a way that would unjustly benefit the appellant. The liability was confined to the two due instalments after adjusting the security deposit and recovered amounts. The Certificate Officer was directed to amend the certificate accordingly and proceed with recovery without imposing interest or additional charges until the modification.
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1990 (11) TMI 408
Issues involved:
The judgment deals with the issues of succession under the Hindu Succession Act, the right to contest alienation contrary to custom, the retroactive application of statutes, the distinction between the right to appeal and the right to contest, and the transformation of custom into statutory law.
Succession under Hindu Succession Act:
The court clarified that any rule of succession previously applicable to those governed by custom would only apply in matters not covered by the Hindu Succession Act. The Act did not abolish rules or customary laws in Punjab regarding restrictions on alienation by male proprietors beyond Hindu law provisions.
Right to Contest Alienation:
The judgment emphasized that the right to contest an alienation continues until a final decision is reached, and the Amendment Act of 1973 aimed to eliminate the right to contest alienations contrary to custom after January 23, 1973.
Retroactive Application of Statutes:
The court discussed that retroactive statutes create new obligations on past transactions or impair vested rights. The Amendment Act's language and intention indicated a clear power to act retroactively without necessarily making it retrospective.
Distinction between Right to Appeal and Right to Contest:
It was highlighted that the power to contest an alienation constituted the custom the legislature sought to abolish. The provision barred the right to contest at any stage of a suit, including appeals.
Transformation of Custom into Statutory Law:
The judgment differentiated between customs judicially noticed, legally confirmed, and transformed into statutory rights. The court noted that the Punjab Custom (Power to Contest) Amendment Act 1973 abolished the custom, leaving Hindu Law unaffected for contested alienations.
Separate Judgment:
The cases of the appellants under Hindu Law were remanded to the High Court for examination, emphasizing the unaffected nature of rights under Hindu Law in contested alienations.
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1990 (11) TMI 407
Levy of the property tax - Rateable value of the installations on the demised property consisting of the buldings, structures and tanks - definition of 'land' or 'building' - storage tanks of petroleum products are "land" within the meaning of Section 3(r) or "buildings" as defined Under Section 3(s) of the Act - HELD THAT:- It is seen that the structure must be an entity in itself, although not necessarily a building in itself, adopted to the particular purpose it serves. In its ordinary sense a structure is something which is constructed by way of being built as is a building. But method of construction by itself is not conclusive. Structure by itself may not be a building but it may be analogous to a building, outhouse, shed, hut or a stable. Ship is like a floating building but it is not a structure. A crane gantry or a turnable is a structure but is not a building. Weighing bridge is a structure. Tilting furnaces mains are in the nature of structure. The British Act levies property tax on the tenant and each item by itself is exigible to separate rateability. But under the Act the incidence of taxation is on the building or land. So the building or its accompaniments like house, out-house, garage, stable, shed, hut and such other structures must also be an entity by itself although not necessarily a building, erected on the land. The adverb 'such' must be construed in this perspective. Looking at the tank it would be apparent to be a structure, shorn of the feat of engineering mechanism put up to have the tank rested on the land. Mechanism or feat of engineering is not a conclusive test.
It is undoubted that if the tanks are situated within a Plant they would be integral part of the plant and get exempted from assessment Under Section 154 of the Act but there exist no such plant on the demised site. It is also equally undoubted that harmonious construction must be adopted consistent not only with the principles of taxation to make rateable value but also those relating to income-tax, wealth-tax etc. In New Manek Chowk Spinning and Weaving Mills Co. Ltd. and Ors. v. Municipal Corporation of the City of Ahmedabad and Ors. 1967 (2) TMI 97 - SUPREME COURT], the Constitution Bench was concerned with levy of the property tax on textile factories at flat rate under Bombay Provincial Municipal Corporation Act, 1949 whose constitutional validity was impugned by Article 14 which this Court held to be ultra vires. It is not of much assistance to the respondent.
The tanks, though, are resting on earth on their own weight without being fixed with nuts and bolts, they have permanently been erected without being shifted from place to place. Permanency is the test. The fact that no nuts and bolts were used to imbed the tank to the earth by itself is not conclusive. Though the witness stated that the tank is capable of being shifted, as a fact the tanks were never shifted from the places of erection. By scientific process, the tanks stand on their own weight on the earth at the place of erection as a permanent structure.
The petroleum products are being stored through pipes and are taken out by mechanical process. The operational mechanisation also though relevant, is not conclusive. The rateable is based on the rent, which the building or land is capable to fetch. Due to erection of the tanks whether the value of the demised property had appreciated or not, is also yet another consideration. Undoubtedly, when the tanks are erected and used for commercial purposes, the value of the demised property would get appreciated. The annual letting value is capable of increase. However, the rate of increase is a question of fact but the fact remains that the value of the land gets increased by virtue of erection of the storage tanks.
Considering from this perspective we have no hesitation to hold that the petroleum storage tanks are structures or things attached to the land within the definition of Sections 3(s) and 3(r) of the Act. Thereby they are exigible to property tax. In this view the appeal is allowed and the judgment of the High Court is reversed and that of the Court of Small Causes is affirmed.
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1990 (11) TMI 406
Issues:
Whether the State authorities can collect entertainment tax on charges for lift facility at a cinema theatre.
Analysis:
The petitioner, a partner of a registered partnership firm operating a cinema house, introduced a nominal charge of 10 paise per passenger for using the lift facility provided at their theatre. The State authorities challenged this charge under the Gujarat Entertainment Tax Act, 1977. The petitioner argued that the lift charge was not for admission to entertainment but for lift usage. The court analyzed the relevant provisions of the Act, focusing on Section 3(1), which levies tax on payments for admission to entertainment. The court highlighted that the payment must be for admission to entertainment, as per the Act's provisions, and cannot be levied for any other facility not constituting entertainment.
The court delved into the definitions provided in the Act, emphasizing that entertainment includes exhibitions, performances, amusements, games, or sports for which persons are admitted for payment. It noted that the payment for admission must be connected to the entertainment provided. In this case, the payment for lift usage was not for admission to the auditorium where entertainment was held but for using the lift facility. The court highlighted that the payment was not compulsory for all cinegoers and was not a condition for attending the entertainment. Therefore, the court concluded that the lift charge was not a payment for admission to entertainment, as required by the Act.
The court ruled in favor of the petitioner, stating that the State's insistence on collecting entertainment tax on the lift charge was illegal and without jurisdiction. The court granted a permanent injunction restraining the State authorities from levying and collecting entertainment tax on the lift charge. The court also allowed the petitioner to appropriate the deposits of lift charges kept in a separate bank account for their own use. The alternative submission to declare the Act's provisions as ultra vires was not granted as it became irrelevant in light of the main relief provided to the petitioner.
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1990 (11) TMI 405
Issues Involved:
1. Entitlement to rebate of cess paid on motor vehicles exported under Notification No. 197/62-C.E., dated 17-11-1962 issued under Rule 12 of the Central Excise Rules.
Detailed Analysis:
1. Entitlement to Rebate of Cess Paid on Motor Vehicles Exported
Background:
The respondents, manufacturers of motor vehicles, sought a rebate of automobile cess paid on exported motor vehicles, which was initially rejected by the Assistant Collector (Refunds). The Collector (Appeals) allowed the rebate, leading to the Department's appeal.
Arguments by Appellant (Department):
- The appellant contended that although the provisions of the Central Excises & Salt Act, 1944, and the Rules made thereunder, including refund of duty, apply to the levy and collection of cess, the Collector (Appeals) erred by not considering Rule 12 and the definition of "duty" under Rule 2(v) of the Central Excise Rules.
- Rule 12 requires a specific notification for granting rebate, and the notification issued under Rule 12 did not invoke Rule 3 of the Automobile Cess Rules, 1984.
- The appellant referenced the Special Bench-D judgment in Nellimarla Jute Mills and the Supreme Court judgment in Modi Rubber Limited, asserting that exemptions under Rule 8(1) do not automatically apply to cess without a specific notification.
Arguments by Respondent:
- The respondent argued that cess is a duty of excise, and the provisions of the Central Excise Act and Rules, including Rule 12, apply to cess.
- Notification No. 197/62 issued under Rule 12 refers to all excisable goods, including motor vehicles, and therefore should cover cess paid on these goods.
- Cited decisions: Andhra Pradesh Paper Mills Ltd., Mahabir Jute Mills Ltd., and Mata Prasad Anantram, to support that cess is considered excise duty and the provisions of the Central Excise Act apply to cess.
Tribunal's Findings:
- The Tribunal noted that the appellant did not contest that automobile cess is collected as a duty of excise and that the provisions of the Central Excise Act and Rules apply to the levy and collection of cess.
- The main contention was whether a specific notification under Rule 12 read with Rule 3 of the Automobile Cess Rules is necessary for granting rebate of cess.
- The Tribunal referred to the Special Bench decision in Nellimarla Jute Mills and the Supreme Court decision in Modi Rubber Ltd., which established that exemptions or rebates under Rule 8(1) or Rule 12 require specific notifications invoking the relevant provisions of the Cess Act or Rules.
- The Tribunal concluded that since no notification under Rule 12 read with Rule 3 of the Automobile Cess Rules was issued, the rebate of cess on exported motor vehicles could not be granted.
Conclusion:
The Tribunal allowed the appeal by the Department, set aside the order of the Collector (Appeals), and restored the order of the Assistant Collector, denying the rebate of cess on exported motor vehicles. The stay application was dismissed as it did not survive for consideration.
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1990 (11) TMI 404
Issues:
1. Allegations of bribery and corruption against forest officials.
2. Appeal regarding the abatement of the first appellant's case due to death.
3. Examination of evidence and presumption of guilt against the second appellant.
Analysis:
Issue 1: Allegations of bribery and corruption against forest officials
The case involved allegations of bribery and corruption against two forest officials, where the first appellant, a Forest Ranger, and the second appellant, a Forester, were accused of demanding bribes from a Forest Guard. The prosecution presented evidence of the appellants instructing the guard to collect bribes from goat owners, threatening adverse consequences if he did not comply, and subsequently accepting the bribes. The appellants denied the allegations during examination under Section 313, Cr.P.C. The Trial Court and High Court accepted the prosecution's evidence, leading to the conviction of both appellants. The Supreme Court, however, scrutinized the evidence and found discrepancies and lack of substantial proof regarding the demand for bribes. Ultimately, the Court acquitted the second appellant due to insufficient evidence to establish the charges of bribery and corruption against him.
Issue 2: Appeal regarding the abatement of the first appellant's case due to death
The first appellant passed away during the pendency of the appeal, leading to the question of abatement of the appeal. The legal provision under Section 394 of the CrPC states that every appeal shall abate upon the death of the appellant unless a relative applies within 30 days for leave to continue the appeal. In this case, the son of the deceased appellant filed a petition seeking permission to continue the appeal, but the Court rejected the application due to a significant delay of 10 years in filing it. The Court cited the lack of sufficient cause for condonation of the delay and emphasized the importance of timely legal proceedings in such matters.
Issue 3: Examination of evidence and presumption of guilt against the second appellant
The Supreme Court analyzed the evidence against the second appellant, who had admitted to receiving a sum of money. As per the Prevention of Corruption Act, there is a presumption that a public servant accepting gratification did so as a motive or reward unless proven otherwise. However, the Court noted the absence of concrete evidence establishing the demand for bribes. The prosecution failed to produce witnesses or substantial proof of the alleged bribery demands. Consequently, the Court found the evidence insufficient to prove the charges against the second appellant and acquitted him based on the lack of credible evidence supporting the allegations.
In conclusion, the Supreme Court acquitted the second appellant due to insufficient evidence of bribery demands, while the appeal of the first appellant abated following his demise. The judgment highlighted the importance of substantial evidence and timely legal actions in cases involving allegations of corruption and bribery against public officials.
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1990 (11) TMI 403
Issues:
Challenge to detention order based on non-supply of important documents relied upon by the detaining authority.
Analysis:
The appellant challenged the order of his detention under the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988, on the grounds that crucial documents relied upon by the detaining authority were not provided to him. The appellant had previously filed a Review Petition against the judgment of the Delhi High Court, which was dismissed. The appellant's arrest and subsequent bail applications were detailed, emphasizing his retraction from his earlier statement. The grounds of detention specifically referenced the rejection of his bail application by the Judicial First Class Magistrate and the subsequent grant of bail by the Sessions Court.
The appellant's counsel argued that the failure to provide the appellant with the documents related to his bail applications deprived him of the opportunity to make an effective representation. Counsel cited a previous case where the denial of such vital documents was deemed a violation of the detenu's right to make an effective representation, leading to the detention being declared illegal. In contrast, the respondents relied on another case where the refusal to provide certain documents was justified as they were deemed irrelevant to the detention. However, the court found that the present case aligned more closely with the former decision, emphasizing the importance of the documents in question.
Based on the arguments presented, the Supreme Court set aside the judgment under appeal, along with the impugned orders of detention and declaration. The court ordered the immediate release of the detenu, ruling in favor of the appellant. The appeal was allowed without any costs being imposed on either party.
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