|
Advanced Search Options
Case Laws
Showing 221 to 240 of 2911 Records
-
1992 (11) TMI 264
Issues Involved:
1. Legality of the inclusion of lorry freight charges in the turnover for sales tax purposes.
2. Applicability of the Supreme Court judgment in Hindustan Sugar Mills Ltd. case to the present case.
3. Distinction between freight charges for rail and lorry transport under the Cement Control Order.
Detailed Analysis:
1. Legality of the inclusion of lorry freight charges in the turnover for sales tax purposes:
The petitioner, a manufacturer and dealer in cement, challenged the inclusion of lorry freight charges in the turnover for sales tax purposes for the assessment years 1980-81 and 1981-82. The freight charges collected from stockists and dealers amounted to Rs. 43,01,169 and Rs. 89,64,519, respectively. The petitioner argued that the cement was dispatched by lorries at the request and risk of the buyers, and thus, the lorry freight charges should not be included in the turnover. The Sales Tax Appellate Tribunal dismissed the appeals, leading to the present tax revision cases.
The Court noted that the petitioner deducted notional railway freight charges from the gross amount in the sale bills and collected the higher lorry freight charges through separate debit notes. The differential amount under dispute was Rs. 29,72,918 for 1980-81 and Rs. 64,11,569 for 1981-82. The petitioner contended that the sales were completed at the factory, and the lorry freight charges were a "post-sale service."
2. Applicability of the Supreme Court judgment in Hindustan Sugar Mills Ltd. case to the present case:
The Sales Tax Appellate Tribunal relied on the Supreme Court judgment in Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13, which analyzed the Cement Control Order and held that the freight charges form part of the sale price. However, the petitioner argued that this judgment was inapplicable to despatches by lorry, as it specifically dealt with rail transport.
The Supreme Court in Hindustan Sugar Mills Ltd. case held that the freight charges are part of the sale price under the Cement Control Order, as the producer is obliged to bear the freight and recover it from the buyer. The Court emphasized that the Control Order has overriding effect and the freight charges must be included in the turnover.
3. Distinction between freight charges for rail and lorry transport under the Cement Control Order:
The Court examined the Cement Control Order, 1967, which governs the sale of cement. Clause 8 specifies the ex-factory prices and defines "free on rail destination railway station" to include the cost of transport by the cheapest mode, usually rail. The producer is reimbursed for the freight by the cheapest mode from the Cement Regulation Account. The Court noted that the Control Order does not mandate the inclusion of lorry freight charges in the sale price, as it only covers the cheapest mode of transport.
The Court distinguished the present case from the Hindustan Sugar Mills Ltd. case, stating that the latter dealt with rail transport, whereas the current case involved lorry transport. The Control Order does not obligate the producer to bear lorry freight charges, and the reimbursement is only for the cheapest mode of transport. The Court held that the inclusion of lorry freight charges in the turnover depends on the contractual terms and mutual understanding between the parties.
The Court directed the Sales Tax Appellate Tribunal to reconsider whether the differential freight charges for lorry transport are exigible to tax, allowing the petitioner to adduce additional evidence. The Tribunal was instructed to dispose of the appeals expeditiously.
Conclusion:
The High Court set aside the orders of the Sales Tax Appellate Tribunal and allowed the tax revision cases, directing the Tribunal to reconsider the inclusion of lorry freight charges in the turnover for sales tax purposes. The Tribunal must assess the facts and contractual terms to determine the tax liability, considering the distinction between rail and lorry transport under the Cement Control Order.
-
1992 (11) TMI 263
Issues Involved:
1. Legitimacy of tax adjustment without prior permission.
2. Entitlement to restitution of the sum paid.
3. Liability of the respondents to pay interest on the refunded amount.
Issue-wise Detailed Analysis:
1. Legitimacy of Tax Adjustment Without Prior Permission:
The State Government issued a notification in June 1969, granting concessions to new industries, including a refund of sales tax on raw materials for five years. In 1975, another order permitted the adjustment of refundable tax towards other taxes payable under the Karnataka Sales Tax Act, 1957, upon obtaining permission. The petitioner obtained the new unit certificate and applied for permission to adjust the refundable tax. Despite recommendations for granting permission, the authorities did not attend to subsequent applications. The petitioner faced tax demands for various periods, which were challenged through writ petitions. The Supreme Court ultimately held that the petitioner was entitled to adjust the taxes payable against the refundable amounts, negating the State's contention that prior permission was mandatory. The Supreme Court observed that withholding permission without valid reasons was unjustifiable and quashed the demand notices, directing the authorities to accord permission for adjustments.
2. Entitlement to Restitution of the Sum Paid:
Following the Supreme Court's decision, it was undisputed that the impugned demand was liable to be set aside, entitling the petitioner to restitution of the Rs. 45 lakhs paid under the High Court's interim order. The petitioner filed an application for the refund and sought interest on the refunded amount. The State Government repaid the Rs. 45 lakhs after a court direction but left the question of interest open for final hearing.
3. Liability of the Respondents to Pay Interest on the Refunded Amount:
The core issue was whether the respondents were liable to pay interest on the Rs. 45 lakhs and at what rate. The petitioner argued that the payment was effectively an illegal levy collected under an interim court order, warranting equitable compensation through interest. The Government contended that no interest condition was imposed in the interim order and that the collection was authorized until the Supreme Court's decision rendered it illegal. The court noted that the statutory authorities acted in good faith but ultimately failed to grant the legislative exemption, resulting in unauthorized tax demands.
The court considered precedents where interest was awarded on unauthorized collections, emphasizing that interest serves as compensation for the deprivation of funds. The court held that writ jurisdiction is inherently equitable, allowing for interest awards in appropriate cases. Given that the petitioner was deprived of the beneficial use of its funds while the State benefited from the interim order, justice and equity required compensation through interest.
Conclusion:
The court directed the respondents to pay interest at the rate of 10% per annum from the respective dates of payment until the refund date, thereby allowing the writ petition and making the rule absolute. No costs were awarded.
-
1992 (11) TMI 262
Issues Involved: Constitutionality of clause (29-A)(f) of Article 366, validity of explanation (3-A) to section 2(1)(t) of the Karnataka Sales Tax Act, 1957, and whether the dominant object of transactions in a hotel is the sale of food or rendering of services.
Issue-wise Detailed Analysis:
1. Constitutionality of Clause (29-A)(f) of Article 366:
The petitioner sought to strike down clause (29-A)(f) of Article 366 of the Constitution. The court noted that it was too late to contest the validity of the constitutional amendment. The amendment, which includes the supply of goods as part of any service under the concept of "tax on the sale or purchase of goods," was upheld. The petitioner's challenge to explanation (3-A) to section 2(1)(t) of the Karnataka Sales Tax Act, 1957, was also dismissed as it was intrinsically linked to the constitutional amendment.
2. Validity of Explanation (3-A) to Section 2(1)(t) of the Karnataka Sales Tax Act, 1957:
Explanation (3-A) deems every transaction of supply of goods, including food and drinks, as a sale if it involves cash, deferred payment, or other valuable consideration. The court held that the explanation broadens the concept of sale to include such transactions, aligning with the constitutional amendment. The explanation was thus upheld, and the petitioner's request to quash it was denied.
3. Dominant Object of Transactions in a Hotel:
The petitioner contended that the assessing authority should have considered the service element inherent in the sale of articles in a hotel and excluded it from the turnover. The court referred to the Supreme Court's decision in Northern India Caterers (India) Ltd. case, which held that the supply of food and drinks in a hotel is incidental to the rendering of services and not a sale. However, the court noted that the petitioner failed to establish that the dominant object of the transactions was rendering services rather than the sale of food.
4. Application of Supreme Court Decisions:
The court discussed the Supreme Court's decisions in Builders Association of India v. Union of India and Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi. It emphasized that the amendment to Article 366(29-A) was intended to enable states to levy taxes on the supply of goods as part of services. The court clarified that the dominant object test still applies, and the petitioner must prove that the primary purpose of the transactions was rendering services to benefit from the Supreme Court's rulings.
5. Petitioner's Plea and Court's Conclusion:
The petitioner did not plead that the dominant object of the transactions was rendering services. The court stated that merely employing several suppliers, cleaners, and helpers does not prove that the dominant object was rendering services. Therefore, the court did not find it necessary to apply the ratio of the Builders Association of India case to interpret sub-clause (f) of Article 366(29-A).
Final Judgment:
The writ petition was dismissed. The court concluded that the petitioner failed to establish the dominant object of the transactions as rendering services. The petitioner was advised to seek any other legal provisions for tax adjustment if applicable.
Writ Petition Dismissed.
-
1992 (11) TMI 261
Issues:
Challenge to notice for tax exemption and direction restraining dispute on exemption claim.
Analysis:
The petitioner sought to quash a notice challenging tax exemption and sought direction to prevent any dispute on the exemption claim. The petitioner sold tin-plates to tin container manufacturers who issued form III-B for tax exemption under the U.P. Sales Tax Act. The Sales Tax Officer granted exemption in the assessment order for the petitioner's sales to tin container manufacturers. However, subsequent proceedings led to a notice questioning the exemption granted. The petitioner argued that the notice was improper as it pertained to a refund application under section 22 and should not involve an enquiry into the exemption granted earlier. The respondents contended that the exemption was wrongly claimed, citing defects in the recognition certificates submitted by the petitioner.
The Court analyzed the impugned notice and noted that it was limited to the disposal of the refund application. The Court clarified that once an assessment order is passed, the amount mentioned therein forms the basis for recovery or refund, unless modified through specific proceedings under the Sales Tax Act. The Court emphasized that the assessing authority should not re-examine the exemption granted in refund proceedings. The respondents' reliance on another notice initiating proceedings under section 22 was deemed irrelevant to the present petition, which focused solely on the impugned notice.
The Court directed the respondent authority to halt any further enquiry into the petitioner's exemption status until the final resolution of proceedings under section 22. The Court emphasized the need to maintain the status quo on the exemption issue pending the outcome of the refund application proceedings. The petition was disposed of with this directive, emphasizing the importance of adhering to legal procedures in tax exemption matters.
This judgment clarifies the scope of enquiries in refund proceedings and underscores the finality of assessment orders in determining refund eligibility. It highlights the need for authorities to follow due process and refrain from revisiting exemption decisions in refund proceedings.
-
1992 (11) TMI 260
Issues:
1. Entitlement to benefit under section 17(4) of the Karnataka Sales Tax Act, 1957.
2. Interpretation of "total turnover" for the purpose of section 17.
3. Applicability of section 17(4) to a dealer with multiple businesses.
Analysis:
The petitioner, a dealer in a hotel business also dealing in coffee powder and leco, sought the benefit of composition under section 17(4) of the Karnataka Sales Tax Act, 1957. The key issue was whether the benefit could be limited to the turnover related to the hotel business alone. Section 17 allows for composition of tax for certain dealers, including hoteliers and restaurateurs, subject to conditions. The petitioner contended that the turnover for the hotel business should be considered separately for invoking section 17(4) and claimed entitlement to the benefit based on this interpretation.
The Court examined the definition of "total turnover" under section 17, which includes the aggregate turnover of all goods at all places of business, regardless of tax liability. The Court noted that if a hotelier is engaged in multiple businesses, the turnover from all businesses would contribute to the total turnover for the purpose of section 17. As the Act does not provide for separate registration for each business type, a dealer with multiple businesses cannot selectively apply section 17(4) to only one aspect of their operations. Therefore, the Court rejected the petitioner's contention and dismissed the writ petition.
The judgment highlighted that the Act allows for a single registration for dealers with multiple businesses and does not support the isolation of specific business turnovers for composition benefits under section 17(4). The Court granted the petitioner the option to appeal the decision within four weeks, with a directive for the appellate authority to condone any filing delay. Ultimately, the writ petition was dismissed, emphasizing the holistic approach to turnover calculation and benefit application under the Sales Tax Act.
-
1992 (11) TMI 259
Issues Involved:
1. Taxability of components of chemical fertilizer mixtures.
2. Deductibility of the value of packing materials.
3. Mode of levying tax on liquor contained in bottles.
Issue-wise Detailed Analysis:
1. Taxability of Components of Chemical Fertilizer Mixtures:
The petitioner is engaged in the manufacture and sale of chemical fertilizer mixtures under entry 48-A(ii) of the Second Schedule to the Karnataka Sales Tax Act, 1957. The Revenue argued that the sale or purchase of several components of the chemical fertilizer mixture should be taxed under section 5(1) of the Act, relying on a notification issued under section 8-A prior to the introduction of entry 48-A(ii). However, this question was concluded against the Revenue by a Full Bench decision in Shaw Wallace & Co. Ltd. v. State of Karnataka [1993] 91 STC 37. Following this decision, the Court directed the assessing authority to redo the assessment by applying the Full Bench's decision regarding the chemical fertilizer mixture and its components. The Court rejected the Revenue's plea to apply section 6 of the Act, as it was raised too late.
2. Deductibility of the Value of Packing Materials:
The petitioner, a dealer in liquor, claimed the benefit of rule 6(4)(ff) of the Rules under the Act, which provides for the deduction of packing charges from the total turnover. The Court analyzed section 2(1)(v) and section 2(1)(u-1) of the Act, which define "turnover" and "taxable turnover," respectively. It was held that pre-sale and pre-delivery packing charges are part of the "turnover" and cannot be deducted from the "total turnover." Rule 6(4)(ff) was interpreted to apply only to post-sale or post-delivery packing charges. The Court referred to the decision in State of Tamil Nadu v. V.V. Vanniaperumal & Co. [1990] 76 STC 203 and Premier Breweries Ltd. v. State of Karnataka [1984] 56 STC 14, which supported this interpretation. Consequently, the petitioner's contention for deduction of packing charges was rejected.
3. Mode of Levying Tax on Liquor Contained in Bottles:
The petitioner argued that liquor and bottles were sold under separate contracts, and thus, should be taxed separately under entry 109 (bottles) and entry 38 (liquor) of the Second Schedule. Entry 38 was amended to include "all liquor including bottled liquor," differentiating the tax rates based on whether excise duties were included in the sale consideration. The Court referred to the decision in State of Karnataka v. Shaw Wallace and Co. Ltd. [1981] 48 STC 169, which held that separate agreements for bottles and liquor should be taxed distinctly. The Court also considered the Supreme Court's decision in Raj Sheel v. State of Andhra Pradesh [1989] 74 STC 379, which emphasized examining the true nature of the transaction to determine whether the sale of packing material is an independent transaction. The Court concluded that if there are two independent sales, entry 38 cannot be attracted to levy tax on the sale price of the bottle. The Tribunal and statutory authorities were directed to examine the facts in light of the Raj Sheel decision.
Conclusion:
The petitions were partly allowed. The assessment orders were set aside with directions to make fresh orders regarding "chemical fertilizer mixtures" and "liquor including bottled liquor" in light of the judgment. No costs were awarded.
-
1992 (11) TMI 258
Issues:
Interpretation of the term "resale" under section 7(ii) of the Gujarat Sales Tax Act, 1969.
Analysis:
The case involved a question referred to the Gujarat High Court by the Gujarat Sales Tax Tribunal regarding the interpretation of the term "resale" under section 7(ii) of the Gujarat Sales Tax Act, 1969. The matter revolved around a motor vehicle sold by the opponent in 1974, which was originally purchased in 1968. The opponent contended that the sale constituted a resale of goods purchased from a registered dealer. The Sales Tax Officer had included the sale price of the vehicle in the taxable turnover and imposed a penalty, leading to appeals and subsequent decisions by the Assistant Commissioner of Sales Tax and the Tribunal.
The Tribunal ultimately concluded that the opponent had indeed sold the chassis of the motor vehicle, constituting a resale, and therefore, the sale price of the vehicle did not attract any tax. The Tribunal also ruled that the penalties imposed were not leviable. The State of Gujarat then made a reference to the High Court, questioning the Tribunal's decision. The High Court analyzed the evidence presented, including an affidavit and correspondence, to determine the nature of the sale. The Court emphasized that the condition of the goods at the time of resale is crucial in defining "resale" under the Act.
The Court rejected the argument that the vehicle could not be in the same form due to the time elapsed between the original purchase and resale. It noted that the definition of "resale" in the Act does not prescribe a time limit for resale. Therefore, the Court agreed with the Tribunal's findings that the chassis was sold in the same form as purchased, constituting a resale under section 7(ii) of the Act. Consequently, the Court answered the reference in favor of the assessee and against the Revenue, disposing of the matter with no order as to costs.
-
1992 (11) TMI 257
Validity of various provisions of the Karnataka Sales Tax Act, 1957, as amended by Amending Act No. 27 of 1985 and the Karnataka Sales Tax Rules, 1957 challenged
Held that:- Appeal dismissed. As in prescribing different rates of tax for particular types of works contract in the Sixth Schedule, the State Legislature has contravened the provisions of article 14 of the Constitution. We may, in this context, mention that the High Court while upholding the validity of the rates fixed in the Sixth Schedule has held that while under the Second Schedule tax on pipes, tubes and fittings of iron, cement and asbestos not falling in the Fourth Schedule is to be levied at 8 per cent, the tax on the corresponding item under item No. 20 of the Sixth Schedule is levied at the rate of 10 per cent. The High Court has held the fixation of rate of tax in respect of item 20 in the Sixth Schedule as being discriminatory and has struck it down. The said part of the judgment of the High Court has not been challenged by the State and we do not wish to say anything on the same.
During the course of arguments before us, the learned counsel for the appellant sought to challenge the validity of section 19A of the Karnataka Sales Tax Act which provides for deduction of tax at source. We find that the said provision was not challenged by the appellant in the writ petition before the High Court and was also not challenged in the additional grounds which were submitted by the appellant in the High Court after the decision of this Court in Builders Association case [1989 (3) TMI 356 - SUPREME COURT OF INDIA]. It has also not been challenged by the appellant in the special leave petition filed before this Court. In these circumstances, we have not permitted the appellant to raise this question.
-
1992 (11) TMI 254
Whether in the absence of an amendment in the Central Sales Tax Act specifically applying its provisions to a transfer of property in goods involved in the execution of a works contract, the provisions of sections 3, 4 and 5 contained in Chapter II can be held applicable to such a transfer?
Held that:- Appeal allowed. The High Court has upheld the validity of sub-section (3) of section 5 by taking into account the provisions of sub-rule (2) of rule 29 but, while considering the said provisions the High Court has failed to notice that under clause (i) of sub-rule (2) of rule 29, transfer of property in goods involved in the execution of a works contract, on which no tax is leviable under section 5, are not required to be deducted from the turnover. The High Court also failed to attach importance to the use of the word "turnover" (instead of word "taxable turnover') in sub-section (3) of section 5 as a result of which the amplitude of the incidence of tax has been widened so as to include transactions which are outside the sphere of taxation available to the State Legislature under entry 54 of the State List. We are, therefore, unable to uphold the decision of the High Court in this regard.
Since the invalidity of section 5(3) goes to the root of the imposition of tax and in the absence of the said provision the tax cannot be levied, the appellants in the appeals are entitled to succeed.
-
1992 (11) TMI 246
Issues:
- Appealability of an order admitting a company petition under section 483 of the Companies Act.
- Interpretation of rule 96 of the Companies (Court) Rules, 1959 regarding admission of the petition and directions for advertisement.
- Consideration of the impact of advertisement on a company's reputation.
- Understanding of the term "any order" in section 483 of the Companies Act.
- Comparison with relevant Supreme Court judgments on procedural orders and appealability.
Analysis:
The judgment deals with the issue of appealability of an order admitting a company petition under section 483 of the Companies Act. The appellant contested the appealability of the order based on the interpretation of rule 96 of the Companies (Court) Rules, 1959, which outlines the procedure for admission of the petition and directions for advertisement. The rule specifies that the judge may direct notice to be given to the company before deciding on the advertisement of the petition. The court highlighted that the admission of a petition does not immediately impact the company; rather, it is the advertisement that can adversely affect the company's reputation by exposing its name to the public.
Moreover, the judgment delves into the interpretation of the term "any order" in section 483 of the Companies Act, emphasizing that an order must affect the right of the party invoking appellate jurisdiction for it to be appealable. Citing the Supreme Court's decision in Central Bank of India Ltd. v. Gokul Chand, the court elucidated that procedural orders that do not impact rights or liabilities of parties are not typically appealable to prevent endless expenses and delays in the legal process. The court applied this principle to the context of admitting a company petition, considering it as a procedural matter governing the process post-admission.
Furthermore, the judgment referenced the Supreme Court's ruling in National Conduits (P.) Ltd. v. S. S. Arora to underscore that even after admission, a company can request the court not to advertise the petition, aligning with the principle of preventing abuse of court processes. The court emphasized the importance of allowing the company to present relevant materials to support its stance on advertisement, ensuring a fair opportunity for the company to protect its reputation. Ultimately, the court dismissed the appeal, affirming the order admitting the company petition and highlighting the company's ability to contest the advertisement of the petition before the court.
-
1992 (11) TMI 245
Issues Involved:
1. Execution of decree and attachment of property.
2. Contempt proceedings against individuals.
3. Application for arrest and detention under Order 21, Rule 11A, and Section 51 of the Civil Procedure Code.
4. Compliance with procedural requirements for arrest and detention.
5. Determination of ownership and concealment of property.
6. Personal liability of the managing director.
Detailed Analysis:
1. Execution of Decree and Attachment of Property:
On March 2, 1984, a decree for recovery of Rs. 1,29,562.40 with interest and costs was passed in favor of the decree-holders against the judgment-debtor. Execution was sought through attachment and sale of movable property. However, the attachment could not be effected as per the report dated May 7, 1985.
2. Contempt Proceedings Against Individuals:
Contempt proceedings were initiated against Rabindra S. Grewal and Dhan Raj due to hindrance in the execution of the warrant of attachment. Both individuals submitted affidavits tendering unqualified apologies, and no further action was taken against them.
3. Application for Arrest and Detention Under Order 21, Rule 11A, and Section 51 of the Civil Procedure Code:
The decree-holders filed an application for arrest and detention of the managing director of Pan India Plastic Pvt. Ltd. The application claimed that the judgment-debtor did not permit the execution of the warrant of attachment and resisted the process server and the nominee of the decree-holder.
4. Compliance with Procedural Requirements for Arrest and Detention:
Order 21, Rule 11A, and Section 51 of the Civil Procedure Code require that an application for arrest must state the grounds and be accompanied by an affidavit. The court must provide the judgment-debtor an opportunity to show cause and record reasons in writing before ordering detention. The court referenced several judicial precedents emphasizing the need for strict compliance with these procedural requirements.
5. Determination of Ownership and Concealment of Property:
The court examined whether the judgment-debtor concealed property to obstruct or delay the execution of the decree. The affidavits and the bailiff's report did not prove that Rabindra Grewal locked the outer gate or caused hindrance in the attachment. The court found that the decree-holder failed to prove concealment of property by Rabindra Grewal.
6. Personal Liability of the Managing Director:
The decree was against the company through its managing director, not in his individual capacity. The court cited precedents establishing that the managing director is not personally liable for the company's dues unless explicitly stated. The court concluded that Rabindra Grewal, as managing director, could not be detained personally, and no evidence was provided that he had means to pay the decretal amount.
Conclusion:
The application for arrest and detention of Rabindra Grewal was dismissed due to the failure to prove the grounds required under Section 51 of the Civil Procedure Code. The court emphasized the need for strict compliance with procedural requirements and found no evidence of concealment or personal liability of the managing director. There was no order as to costs.
-
1992 (11) TMI 244
Issues Involved:
1. Whether the company is unable to pay its debts.
2. Whether the petitioner is entitled to interest on the outstanding amount.
3. Validity of the notice of demand served on the company.
Summary:
1. Company's Inability to Pay Debts:
The petitioner sought the winding up of Polar Forging and Tools Ltd. on the grounds of the company's inability to pay its debts. The petitioner supplied furniture to the company and submitted bills totaling Rs. 5,25,707.60, of which Rs. 4,05,000 was paid, leaving Rs. 1,20,707.60 outstanding. Despite demands, the company failed to pay the remaining amount within the stipulated time, indicating its inability to pay its debts.
2. Entitlement to Interest:
The petitioner claimed interest at 18% per annum on the outstanding amount from February 1, 1990. The company acknowledged the debt but contested the interest claim, arguing there was no contract for interest payment. The court held that in the absence of a specific contract, the company court could determine the interest rate based on the Sale of Goods Act, 1930. The court concluded that the creditor is entitled to interest and that the company court can adjudicate this in winding up proceedings to avoid multiplicity of litigation.
3. Validity of Notice of Demand:
The company challenged the validity of the notice of demand, arguing it did not specify the consequences of non-payment. The court held that u/s 434(1)(a) of the Companies Act, 1956, the notice need not specify the consequences of non-payment. The letters sent by the petitioner constituted a valid demand as they requested payment and indicated overdue interest charges. The court disagreed with the opinions of the Allahabad and Kerala High Courts, which required an indication of winding up proceedings in the notice.
Conclusion:
The court determined that the company is liable to pay interest at 12% per annum on Rs. 1,15,000 from March 1, 1990, until payment. The company must pay the interest by November 20, 1992, failing which the petition for winding up will be admitted, and the petitioner will proceed with publication for the hearing on February 26, 1993.
-
1992 (11) TMI 229
Unfair trade practices - Whether, where it was not a fresh/first issue but was further issue of capital, decision to reserve a larger percentage of shares in favour of a specific group consisting of co-promoters, foreign collaborator, etc., in comparison to reservation of a lesser percentage of shares/debentures in favour of general public, etc., could be said to be unfair or unjust practice - Held, no
-
1992 (11) TMI 221
Issues Involved:
1. Petition for winding up under sections 433 and 434 of the Companies Act, 1956.
2. Confirmed debt and inability to pay.
3. Agreements and modifications between the parties.
4. Dishonour of cheques and subsequent agreements.
5. Alleged oral agreements and understandings.
6. Bona fide disputes and defences.
7. Commercial insolvency and financial difficulties of the company.
8. Legal principles governing winding up petitions.
Issue-wise Detailed Analysis:
1. Petition for winding up under sections 433 and 434 of the Companies Act, 1956:
The petitioners sought the winding up of Messrs. Rajaram Bandekar (Sirigao) Mines Private Limited on the grounds of insolvency and inability to pay debts. The petition was filed under sections 433 and 434 of the Companies Act, 1956.
2. Confirmed debt and inability to pay:
The petitioners claimed a confirmed debt of Rs. 66 lakhs with compound interest at 19.25% per annum. Despite notice under section 434(1)(a), the debt remained unpaid. The debt arose from financial assistance provided to Bandekar Sons, who failed to repay the loan and liquidated damages as agreed.
3. Agreements and modifications between the parties:
Several agreements were executed between the petitioners and Bandekar Sons, including the original agreement on August 4, 1987, and a modified agreement on August 18, 1987. These agreements involved extraction of iron ore and financial assistance. The agreements were further modified, leading to the confirmed debt of Rs. 66 lakhs.
4. Dishonour of cheques and subsequent agreements:
Cheques issued by Bandekar Sons and the company for repayment of the loan were dishonoured. An agreement dated August 14, 1989, was executed, wherein the company and its directors acknowledged joint and several liability for the debt. The cheques issued under this agreement were also dishonoured.
5. Alleged oral agreements and understandings:
The company contended that there were oral agreements and understandings between the parties, including an agreement to withhold the cheque for Rs. 66 lakhs until certain issues were settled. However, these claims were denied by the petitioners and M.S. Prabhu, an alleged intermediary.
6. Bona fide disputes and defences:
The company argued that the claim was bona fide disputed and that the winding up petition could not be maintained. They contended that the cheque was given as security and not for encashment, and that there were inter se transactions and credits to be adjusted. The court found these defences to lack bona fides and substance.
7. Commercial insolvency and financial difficulties of the company:
The petitioners argued that the company was commercially insolvent, with liabilities exceeding its assets. The court noted that there were several winding up petitions filed against the company, indicating financial difficulties. The company had not filed returns for certain periods, and its cash losses were significant.
8. Legal principles governing winding up petitions:
The court referred to the principles laid down in Madhusudan Gordhandas and Co. v. Madhu Woollen Industries Pvt. Ltd., which require that the defence of the company be in good faith, substantive, and likely to succeed in law. The court found that the company's defence did not meet these criteria and that the debt was undisputed and confirmed.
Conclusion:
The court admitted the petition and ordered the winding up of the company under the provisions of the Companies Act, 1956. The official liquidator was appointed to take charge of the company's property and effects, and advertisements were to follow. The court emphasized that the company's inability to pay the debt, without a bona fide defence, warranted the winding up order.
-
1992 (11) TMI 213
The appeal was in respect of reversal of Modvat Credit on oxygen gas used in the electric furnace for manufacturing steel castings. The appeal was allowed on merits as oxygen gas is considered a direct input in the manufacture of steel casting. The stay application was not considered as the appeal itself was disposed of.
-
1992 (11) TMI 212
Issues Involved:
1. Validity of the seizure and mahazar documentation.
2. Voluntariness and admissibility of inculpatory statements.
3. Allegations of coercion and wrongful confinement.
4. Applicability of penalties under Sections 112 and 114 of the Customs Act, 1962.
Issue-Wise Detailed Analysis:
1. Validity of the Seizure and Mahazar Documentation:
The appeals were directed against the orders of the Additional Collector of Customs, Visakhapatnam, which levied penalties under Sections 112 and 114 of the Customs Act, 1962. The proceedings were initiated in connection with the seizure of electronics and other goods from two wing tanks in the ship m.v. Samrat Ashok on or about 2-7-1986. The appellants contended that no separate mahazar was prepared for the recovery of the goods from the said tanks, and the mahazar was vague. However, the Tribunal found that the mahazar and the list of inventory clearly bore out the seizure and the place of seizure, and the testimony of the seizing officers was entitled to weight and acceptance. The mahazar dated 1-7-1986 detailed the search and recovery of 195 and 386 packages from the wing tanks, containing various contraband goods.
2. Voluntariness and Admissibility of Inculpatory Statements:
The appellants argued that their inculpatory statements recorded under Section 107 of the Customs Act were not voluntary and were obtained under coercion and threat. They pointed out that their initial statements under Section 108 were exculpatory, and there was no need for subsequent inculpatory statements. The Tribunal, however, found that the inculpatory statements were voluntary and merited acceptance. The cross-examination of the officers who recorded the statements did not substantiate the plea of coercion or undue influence. The Tribunal also noted that the Shipping Corporation of India did not complain about wrongful confinement of their employees, which further weakened the appellants' claims.
3. Allegations of Coercion and Wrongful Confinement:
The appellants alleged that their inculpatory statements were obtained through coercion, threat, and wrongful confinement. They argued that they were kept in the Seafarers Hostel and later taken to the Old Customs House under duress. However, the Tribunal found no evidence of wrongful confinement or coercion. The cross-examination of the officers did not reveal any substantial proof of the appellants being kept under illegal custody or being coerced into giving statements. The Tribunal also noted that the crew members of a ship staying in the Seafarers Hostel was a natural occurrence, and no complaint was made by the Shipping Corporation of India regarding wrongful confinement.
4. Applicability of Penalties Under Sections 112 and 114 of the Customs Act, 1962:
The Tribunal found that the materials available on record were not adequate to fasten the appellants with penal consequences under Section 114 of the Customs Act. There was a lack of evidence that the goods were attempted to be improperly exported, falling within the mischief of Section 113 of the Act. Therefore, the Tribunal exonerated the appellants under Section 114 by giving them the benefit of doubt and set aside the penalty under this section.
In respect of the penalty under Section 112, the Tribunal held that the charge had been brought home against the appellants. The inculpatory statements and the evidence on record were sufficient to confirm the findings of the adjudicating authority. However, taking into consideration the facts and circumstances, including the appellants' loss of jobs, the Tribunal reduced the penalty to 15% of the c.i.f. value in each case, except for appellant M. Satyam, whose penalty was reduced to Rs. 100. Except for these modifications, the appeals were otherwise dismissed.
Conclusion:
The Tribunal upheld the seizure and the validity of the mahazar documentation, found the inculpatory statements to be voluntary and admissible, dismissed the allegations of coercion and wrongful confinement, exonerated the appellants under Section 114, and confirmed the penalties under Section 112 with modifications.
-
1992 (11) TMI 211
The Appellate Tribunal CEGAT, New Delhi ruled that Aldicarb Oxime is eligible for exemption from Additional Duty of Customs under Notification No. 55/75 as amended by 62/78. The Tribunal upheld the order allowing the refund claim for the Respondents based on a previous decision that classified Aldicarb Oxime as insecticides. The appeal was rejected. (Case: M/s Union Carbide India Limited v. Collector of Customs, Bombay Order No. 1456/90-C)
-
1992 (11) TMI 210
The appeal was filed by M/s. Bharat Foam Udyog Pvt. Limited against an adjudication order adding interest amount to the assessable value of imported goods. The Collector of Customs clarified that interest on deferred payment should be excluded if shown separately in the invoice. The appellate authority set aside the order, ruling in favor of the appellants.
-
1992 (11) TMI 209
Issues Involved:
1. Determination of assessable value of imported goods under Section 14 of the Customs Act, 1962.
2. Validity of using quotations from local agents for valuation.
3. Relevance of the invoice price versus quotations in determining assessable value.
4. Applicability of quantity discounts in valuation.
5. Procedural fairness in obtaining and using evidence.
Detailed Analysis:
1. Determination of Assessable Value of Imported Goods:
The primary issue is whether the invoice value represents the assessable value of the goods or if the deemed price under Section 14(1)(a) of the Customs Act, 1962, as determined by the lower authorities based on quotations from the authorized representative of the manufacturers, should be the real value.
The appellants argued that the invoice value should be accepted as it was based on the prices quoted by the suppliers in the normal course of international trade. They contended there was no evidence of any relationship between the suppliers and the appellants or any additional remittance beyond the invoice value.
The Tribunal held that under Section 14(1)(a) of the Customs Act, the value for duty assessment is the deemed value as provided in that section. The invoice price, even if genuine, would not represent the value under Section 14(1)(a) if it significantly varies from the price contemplated under the section.
2. Validity of Using Quotations from Local Agents:
The appellants contended that quotations from M/s. Usha Services and Consultants Pvt. Ltd. could not be relied upon as they were not authorized agents for the imported parts. They also argued that the confirmation from M/s. Usha Services that their quotation was based on the official price book of M/s. Honeywell was obtained without giving them an opportunity to contest it.
The Tribunal found that M/s. Honeywell had confirmed that M/s. Usha Services were permitted to issue quotations for certain controls, and thus, their quotation based on the official price book could be considered valid. The Tribunal cited the Supreme Court's judgment in Sharp Business Machines, which allows the use of quotations for determining assessable value under Section 14.
3. Relevance of Invoice Price versus Quotations:
The appellants argued that the invoice price should be accepted as it was based on the supplier's quotation. They cited various case laws to support that quotations alone do not justify rejecting the invoice price.
The Tribunal held that the invoice price could be rejected if it significantly varied from the international market price. The quotations from M/s. Usha Services were deemed valid as they were based on the official price book of M/s. Honeywell, and no substantial evidence was provided by the appellants to rebut these quotations.
4. Applicability of Quantity Discounts:
The appellants claimed that the 30% discount applied by the lower authorities was arbitrary. The Tribunal noted that quantity discounts typically range between 5% to 10%, and the 30% discount given was reasonable and not arbitrary.
5. Procedural Fairness in Obtaining and Using Evidence:
The appellants argued that the confirmation from M/s. Usha Services was obtained without informing them, violating procedural fairness. The Tribunal found that the appellants had the opportunity to contest the evidence but failed to provide any rebuttal. The Tribunal emphasized that the burden was on the appellants to disprove the quotations used by the department.
Separate Judgments:
- Majority Decision: The appeal was dismissed, upholding the assessable value determined by the lower authorities based on the quotations from M/s. Usha Services.
- Dissenting Opinion: The President disagreed, arguing that the invoice value should be accepted as the assessable value, citing that a mere quotation cannot be equated with an invoice and should not form the basis for valuation.
Final Order:
In view of the majority decision, the appeal was dismissed, and the value assessed at Rs. 4,07,818.00 was upheld.
-
1992 (11) TMI 208
Issues Involved:
1. Legality and competency of the show cause notice issued by the Assistant Collector of Central Excise.
2. Jurisdiction of the adjudicating authority in passing the impugned order.
Issue-wise Detailed Analysis:
1. Legality and Competency of the Show Cause Notice:
The appellants were issued a show cause notice on 2-6-1991 by the Assistant Collector of Central Excise, Preventive, Headquarters, Bombay-1, alleging contravention of Section 6 of the Central Excises and Salt Act (C.E.S.A.), 1944, read with Rule 174 of the Central Excise Rules, 1944, and Rule 9(1). The notice proposed the recovery of duty amounting to Rs. 6,79,864 under Rule 10A and/or provisions (a) and (b) of sub-rule (1) of Rule 10 read with Rule 9(2) of the Central Excise Rules, 1944, and/or Section 11A of the CESA, 1944. It also proposed the confiscation of seized goods under Rule 173Q and other Rules, imposition of penalty under Rule 173Q and Rule 52A, and confiscation of land, building, plant, machinery, materials, etc., used in connection with the manufacture, production, storage, removal, or disposal of such goods.
2. Jurisdiction of the Adjudicating Authority:
The appellants sought permission to raise additional grounds that the Collector of Central Excise was not competent to adjudicate the case as per Section 11A of the Act, which came into effect from 17-11-1980, and that adjudication by the Collector deprived them of a valuable right of appeal to the Collector (Appeals). The learned consultant argued that this was a question of law that could be raised at any stage and that the entire order was vitiated as it was passed without jurisdiction. The consultant relied on Supreme Court judgments in the cases of Hossein Kasam Dado (India) Ltd. and Collector of Customs, Cochin v. A.S. Bawa to support this proposition.
In rebuttal, the learned JDR argued that Rule 6 should be treated as applicable because there was no conflict between Section 11A and Rule 6, and that rules are part of the Act. He cited the Supreme Court judgment in Collector of Central Excise v. Parle Exports, which stated that notifications issued under statutory power have statutory force and validity. The JDR also contended that the right of appeal to the CEGAT was still available, and the appellants could not insist on appealing before a particular forum.
The Tribunal noted conflicting judgments on the issue of jurisdiction. The Meghmani Dyes Intermediates case held that the Collector could not exercise the powers vested in the Assistant Collector under Section 11A(ii), relying on the Supreme Court judgment in S. Kannan's case. However, there were four other Tribunal judgments that supported the view that the Collector was competent to adjudicate under Section 11A.
The Tribunal found the reasons given in the Meghmani Dyes Intermediates case for not referring the matter to a larger Bench unsound, as there was no conflict between Section 11A and Rule 6, and Rule 6 was part of the Act. The Tribunal also noted that the Meghmani Dyes Intermediates case did not properly consider the Supreme Court judgment in S. Kannan's case, which was specific to the Motor Vehicles Act and not applicable to the Central Excises and Salt Act and its rules.
The Tribunal concluded that the conflict on the preliminary issue of jurisdiction persisted and referred the matter to the Hon'ble President for the constitution of a Larger Bench to resolve the conflict. The Tribunal also allowed the miscellaneous application, permitting the appellants to raise the two additional grounds set out in the application.
............
|
9911796707
