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1996 (11) TMI 479
Issues:
1. Interpretation of the Companies (Profits) Surtax Act regarding the levy of additional tax on chargeable profits.
2. Rectification of assessment orders under the Surtax Act and Income Tax Act.
3. Application of limitation period for rectification under Sections 13 and 14 of the Surtax Act.
Detailed Analysis:
1. The judgment dealt with the interpretation of the Companies (Profits) Surtax Act, which imposes an additional tax on the chargeable profits of a company. The chargeable profits are defined as the total income of an assessee computed under the Income Tax Act, adjusted as per the First Schedule. The Surtax Act provides for levying additional tax on the total income after certain adjustments, including deductions like Income Tax payable under the Income Tax Act.
2. The case involved rectification of assessment orders under the Surtax Act and Income Tax Act. The Income Tax Officer rectified the Surtax assessment order to allow the additional Income Tax determined under a rectified Income Tax assessment order as a deduction from chargeable profits. Subsequently, the Appellate Assistant Commissioner canceled the Income Tax assessment rectification order, leading to another rectification under the Surtax Act to withdraw the previously allowed deduction. Both the Appellate Assistant Commissioner and the Tribunal upheld the Income Tax Officer's actions as logical and justified.
3. The judgment addressed the application of the limitation period for rectification under Sections 13 and 14 of the Surtax Act. The Income Tax Officer rectified the Surtax assessment order within four years of the original order, citing the need to correct the error caused by the cancellation of the Income Tax assessment rectification order. The court held that the rectification was valid as it aimed to rectify the error in the amended order and not the original assessment order. The contention regarding the amendment of Section 14 of the Surtax Act was not deemed necessary for consideration.
In conclusion, the appeal was dismissed, and no costs were awarded, based on the court's findings regarding the interpretation of the Surtax Act, rectification of assessment orders, and the application of the limitation period for rectification under the relevant sections of the Act.
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1996 (11) TMI 477
The Karnataka High Court directed the Electricity Board to supply electric energy to a Commercial Complex in Bangalore, despite the lack of an occupancy certificate, as the completion certificate application had been filed and not refused within 30 days as required by law. The writ petition was allowed with no costs.
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1996 (11) TMI 476
Issues:
- Determination of the period for making an application for re-determination of compensation under Section 28-A of the Land Acquisition Act, 1894.
Analysis:
1. The case involved a question regarding the starting point of the three-month period for making an application for re-determination of compensation under Section 28-A of the Land Acquisition Act, 1894. The issue was whether the period begins from the date of the original award under Section 11 or from the decision of any appeal preferred against the award. The Supreme Court examined the language of Section 28-A and concluded that the limitation period should be reckoned from the date of the award by the Court disposing of the reference under Section 18, not the appellate Court dealing with the appeal against the award of the reference court.
2. The Court referred to previous case law to support its interpretation. It cited judgments such as Babua Ram v. State of U.P., Union of India v. Karnail Singh, and Union of India v. Pradeep Kumari. These cases established that the limitation period for seeking re-determination of compensation must be computed from the date of the earliest award made by a Civil Court under Section 18, not from judgments rendered by appellate Courts. The Court noted that the applications in the present case were filed after the expiry of three months from the date of the award by the Court, making them time-barred.
3. The appellants raised questions regarding the interpretation of the term "award of the Court" in Section 28-A, specifically in relation to judgments and decrees of appellate courts. However, the Court clarified that the period of limitation starts from the date of the reference court's order, and applications filed beyond the prescribed period are time-barred. The Court found no need to refer the matter to a five-judge Bench and dismissed the appeals, emphasizing that the limitation period must be strictly adhered to as per the statutory provisions.
4. In conclusion, the Supreme Court upheld the view that applications for re-determination of compensation under Section 28-A must be made within three months from the date of the award by the Court disposing of the reference under Section 18. The Court dismissed the appeals as the applications in question were filed after the expiration of the prescribed limitation period, reiterating the importance of adhering to statutory timelines in such matters.
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1996 (11) TMI 475
The Supreme Court allowed the appeals filed by the State of Manipur, set aside the High Court's order dismissing the Letters Patent appeals as belated, and requested the High Court to ignore any delay and decide the appeals on their merits expeditiously.
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1996 (11) TMI 474
Issues Involved:
1. Whether overtime wages paid to an employee are "wages" within the meaning of Section 2(22) of the Employees State Insurance Act, 1948.
2. Interpretation of the term "wages" under Section 2(22) of the Act.
3. Applicability of previous High Court judgments on the definition of "wages."
Detailed Analysis:
1. Whether overtime wages paid to an employee are "wages" within the meaning of Section 2(22) of the Employees State Insurance Act, 1948:
The primary issue in these appeals is whether overtime wages constitute "wages" under Section 2(22) of the Employees State Insurance Act, 1948. The appellants argued that since there was no stipulation for payment of overtime wages in the original contract of employment, such remuneration should not be considered as "wages." They contended that overtime wages are paid for services rendered outside the contract of employment and thus should not be included within the definition of "wages."
2. Interpretation of the term "wages" under Section 2(22) of the Act:
Section 2(22) defines "wages" as all remuneration paid or payable in cash to an employee if the terms of the contract of employment, express or implied, were fulfilled. The definition includes any payment to an employee in respect of any period of authorized leave, lock-out, strike which is not illegal or lay-off, and other additional remuneration if paid at intervals not exceeding two months. However, it excludes contributions to pension or provident funds, traveling allowances, special expenses, and gratuity payable on discharge.
The Court emphasized that the term "wages" should be interpreted broadly to include all remuneration paid under the terms of the contract of employment, whether express or implied. The Court noted that the Legislature's exclusion of specific items from the definition of "wages" indicates that all other categories of remuneration, including overtime wages, fall within the inclusive definition of "wages."
3. Applicability of previous High Court judgments on the definition of "wages":
The appellants relied on judgments from the Calcutta High Court and Karnataka High Court, which had held that overtime wages do not constitute "wages" under the Act. However, the Supreme Court found these judgments to be unsustainable and illegal. The Court preferred the view expressed by the Bombay High Court, Delhi High Court, and Andhra Pradesh High Court, which had held that overtime wages are included within the definition of "wages."
The Supreme Court referred to its previous decision in Harihar Polyfibres vs. The Regional Director, ESI Corporation, where it was held that the definition of "wages" under the Act is designedly wide and includes any remuneration paid or payable to an employee under the terms of the contract of employment, express or implied. The Court reiterated that any remuneration paid for overtime work, which is an implied term of the contract, forms part of the "wages" under Section 2(22).
Conclusion:
The Supreme Court upheld the judgment of the Andhra Pradesh High Court, holding that overtime wages paid to an employee are "wages" within the meaning of Section 2(22) of the Employees State Insurance Act, 1948. The Court dismissed the appeals, stating that the view taken by the Andhra Pradesh High Court is in accordance with the law laid down by the Supreme Court. The writ petition was dismissed as withdrawn.
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1996 (11) TMI 473
Issues:
1. Valuation method for cost of shares for calculating taxable capital gains under the IT Act, 1961.
Detailed Analysis:
Issue 1: Valuation method for cost of shares
The High Court of Madras was directed by the Tribunal to provide an opinion on the correct method for valuing the cost of shares in the hands of the assessees for determining taxable capital gains under the IT Act, 1961. The case involved multiple Tax Case References for the assessment year 1973-74, with a common issue arising in all cases. The facts of one particular case were considered to elucidate the matter for all cases. The assessee held shares in a company, including bonus shares acquired through a combination of actual payment and bonus issuances. The dispute arose over the deduction claimed by the assessee under section 48(ii) of the IT Act, based on the method used to calculate the cost of acquisition for the shares. The assessee's approach involved averaging the cost between original and bonus shares, while the Income Tax Officer (ITO) contended that the bonus shares should not be valued again through averaging, as it would result in double inclusion of their value. The ITO relied on Supreme Court decisions to support his position and computed the capital gains accordingly.
The assessee appealed the ITO's decision to the Appellate Assistant Commissioner (AAC) and later to the Tribunal, arguing that the cost of bonus shares should be determined by spreading the cost of original and bonus shares proportionately. The Department, on the other hand, supported the ITO's position and cited a Bombay High Court judgment. The Tribunal, after considering the arguments and relevant decisions, concluded that the cost of acquisition should be determined based on commercial principles and the impact of bonus shares on the value of original shares. It emphasized the need to compute the cost of original shares, first and second issue bonus shares separately, following the principles established by the Supreme Court in various cases.
The Tribunal directed the ITO to recompute the cost of acquisition for all assessees in line with its directions. The matter was then brought before the High Court, where both parties reiterated their arguments presented before the Tribunal. The High Court referred to a previous judgment in a similar case and held that the value of bonus shares did not need separate ascertainment when the entire block of shares, including bonus shares, was sold. The Court found the Tribunal's computation of the cost of acquisition to be in line with the previous judgment and upheld the Tribunal's decision in each assessee's case regarding the valuation of original and bonus shares for determining capital gains.
In conclusion, the High Court answered the references in the affirmative, ruling against the assessees and finding no infirmity in the Tribunal's order regarding the valuation of shares for calculating capital gains under the IT Act, 1961.
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1996 (11) TMI 472
Issues:
Appointment on the post of Deputy Government Advocate in the Central Agency Section in the Ministry of Law of the Government of India.
Analysis:
The case involved a dispute regarding the appointment of a Deputy Government Advocate in the Central Agency Section. The appellant and respondent No. 4 were both employed in the Central Agency Section, with respondent No. 4 being senior to the appellant. The appointment to the post of Deputy Government Advocate was made through a Departmental Promotion Committee (DPC) process. The appellant challenged the selection before the Central Administrative Tribunal, arguing that despite being graded as "outstanding" in two out of three Annual Confidential Reports (ACRs), she was graded as "very good" by the DPC, while respondent No. 4 was consistently graded as "very good." The Tribunal dismissed the appeal, stating it could not act as an appellate authority over the DPC's decision unless there were allegations of malice or arbitrariness.
The appellant's counsel contended that the Tribunal erred in questioning the "outstanding" grading given in the ACRs for two years, as both the Reporting Officer and Reviewing Officer had concurred on this grading. The counsel argued that since the appellant received "outstanding" remarks in two ACRs, she should not have been graded as "very good" by the DPC. However, the Tribunal correctly noted that its role was not to review the merits of the selection process unless there were allegations of malice or arbitrariness, which were not present in this case.
The Tribunal emphasized the limited scope of judicial review in matters of appointment and selection, stating that it could not interfere with the DPC's decision unless it was vitiated by malice or arbitrariness. The Tribunal's decision was based on the principle that it should not act as an appellate authority over the DPC's decision-making process. The court held that the DPC's grading of the appellant as "very good" instead of "outstanding" was not arbitrary, as it followed a confidential procedure. While upholding the selection of respondent No. 4 as Deputy Government Advocate, the court set aside the Tribunal's observations regarding the appellant's grading in the ACRs, stating they could not be upheld.
In conclusion, the appeal was disposed of with no order as to costs, affirming the appointment of respondent No. 4 as Deputy Government Advocate based on the DPC's decision. The court clarified the limited role of judicial review in such matters and upheld the confidentiality of the DPC's grading process.
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1996 (11) TMI 471
Issues involved: Clarification and modification of judgment regarding pendency of criminal cases, interpretation of phrases 'pendency of trials' and 'non-commencement of trial,' addition of offenses exempted from previous directions.
I. Clarification of time limit for pendency of criminal cases:
The Supreme Court clarified that the time limit for pendency of criminal cases does not apply if the delay is due to dilatory tactics of the accused or actions prolonging the trial by the accused. Accused cannot seek discharge or acquittal if the delay is caused by their own actions or seeking stay from higher courts.
II. Interpretation of phrases 'pendency of trials' and 'non-commencement of trial':
- Trials before Sessions Court commence when charges are framed under Section 228 of the CrPC, 1973.
- In warrant cases by magistrates instituted upon police reports, trials commence when charges are framed under Section 240 of the CrPC, 1973. For cases instituted otherwise, trials commence when charges are framed under Section 246.
- In summons cases by magistrates, trials commence when accused are asked under Section 251 to plead guilty or present a defense.
III. Addition of offenses exempted from previous directions:
The Court added offenses including matrimonial offenses, offenses under the Negotiable Instruments Act, criminal misappropriation, criminal breach of trust, rash and negligent acts, and offenses affecting public health, safety, convenience, decency, and morals to the list of offenses exempted from previous directions. Accused discharged or acquitted for these offenses must be proceeded against as per the new order.
IV. Dissemination of clarificatory order:
The Court directed the communication of the clarificatory order to all High Courts, Chief Secretaries of States, and administrative Heads of Union Territories. High Courts were instructed to send Compliance Reports within three months to ensure implementation of the clarificatory order.
Separate Judgment:
Legal Applications (LAs) 3-6 of 1996 were disposed of in light of the clarificatory order issued by the Supreme Court.
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1996 (11) TMI 470
Issues Involved:
1. Competence of the complainant to file the complaint.
2. Authorization of the Manager to file the complaint.
3. Validity of subsequent ratification of the complaint.
Issue-wise Detailed Analysis:
1. Competence of the Complainant to File the Complaint:
The primary issue was whether the complaint filed by M/s. Satish and Company, represented by its Manager, was competent as per the date of filing. The Court noted that the complaint was filed without any letter or resolution authorizing the Manager to act on behalf of the company. Section 142(a) of the Negotiable Instruments Act stipulates that a complaint must be made by the payee or holder in due course. Since M/s. Satish and Company was the payee, the complaint should have been filed by an authorized representative of the company. The Court concluded that the complaint was not validly instituted as on the date of filing since no authorization was presented.
2. Authorization of the Manager to File the Complaint:
The Court examined whether the Manager, Mr. Naresh Kumar, was duly authorized to file the complaint. The complaint was filed without any accompanying authorization letter, and Ex. P-1, a letter authorizing the Manager, was filed one year later. The Court emphasized that the Manager must be explicitly authorized to file such complaints, as the designation alone does not confer the authority to bind the company in legal proceedings. The Court referred to relevant sections of the Negotiable Instruments Act and the Civil Procedure Code, concluding that the Manager was not authorized to file the complaint at the time it was filed.
3. Validity of Subsequent Ratification of the Complaint:
The Court considered whether the subsequent filing of Ex. P-1 could ratify the complaint retroactively. The Court held that the complaint must be valid at the time of filing for the Court to take cognizance of the offence. Subsequent ratification cannot cure the defect of an initially incompetent complaint. The Court cited the principle that legal proceedings must be initiated by duly authorized persons to bind the company and prevent repudiation of legal consequences. The Court referenced the case "K. N. Sankaranarayanan v. Shree Consultations," which held that an invalid initiation cannot be validated by later ratification. The Court concluded that Ex. P-1, filed after one year, could not retroactively authorize the complaint, and filing a new complaint within the statutory period was necessary.
Conclusion:
The Court found no illegality or infirmity in the lower court's order and dismissed the appeal, affirming the acquittal of the accused. The Criminal Appeal was dismissed.
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1996 (11) TMI 469
Issues:
1. Bail application of the appellants based on the apprehension of influencing witnesses and tampering with evidence.
2. Interpretation and applicability of Section 437(6) of the Cr.P.C.
3. Consideration of the totality of facts and circumstances for granting bail.
4. Allegations of tampering with evidence and influencing witnesses.
5. Legal provisions for granting bail in non-bailable offences.
6. Examination of the complainant and cross-examination in the trial.
7. Addition of a new accused in the criminal conspiracy.
8. Dismissal of bail applications by lower courts and challenges in the High Court.
9. Conditions for granting bail and imposition of necessary restrictions.
The Supreme Court reviewed a case where the appellants were accused of inducing payment for securing contracts. The High Court had rejected their bail application based on apprehensions of tampering with evidence and influencing witnesses. The Court examined the totality of circumstances, emphasizing the complainant's commitment and lack of evidence tampering. It noted that the case dated back 16 years with slow progress. The Court analyzed Section 437(1) of the Cr.P.C., highlighting the entitlement to bail unless jeopardizing the prosecution. The Court found no basis for current tampering apprehensions and criticized the High Court's reliance on past unrelated activities. Consequently, the Supreme Court granted bail, subject to stringent conditions like not leaving the country, cooperating with authorities, and attending trial hearings promptly.
The Court addressed the interpretation and applicability of Section 437(6) of the Cr.P.C., choosing to focus on the overall circumstances rather than strict compliance. It delved into the nature of the offence, the existing facts, and the lack of evidence supporting tampering fears. The Court dismissed concerns of witness influence, especially given the complainant's steadfast pursuit of justice. The judgment overturned the High Court's decision, emphasizing the need for bail without expressing any opinion on the case's merits. The Court directed the appellants' release on bail, subject to strict conditions to ensure compliance and cooperation with the ongoing legal processes.
Furthermore, the Court discussed the dismissal of previous bail applications by lower courts and subsequent challenges in the High Court. It highlighted the reasons for rejection, including new evidence and fears of tampering. The Court scrutinized the grounds for denying bail, emphasizing the lack of current evidence supporting tampering allegations. The judgment set aside the High Court's decision, granting bail to the appellants with stringent conditions to prevent any interference with the legal proceedings.
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1996 (11) TMI 468
Issues involved:
Challenge to acquisition of land under Land Acquisition Act, 1894 u/s 4(1) for manufacturing purposes; Claim for restitution of land possession due to cessation of public purpose.
Judgment Details:
Issue 1: Challenge to Land Acquisition:
The appeal arose from the Madras High Court's judgment on the acquisition of 6 acres 41 cents of land for manufacturing Synthetic Rasina. The land was acquired under Chapter VII of the Land Acquisition Act, 1894. Possession was taken in 1964, and subsequent transfers and lease agreements were made with subsidiary companies. The appellants challenged the acquisition on the grounds of ceased public purpose. The courts held that once compensation was received and land vested in the state, the appellants had no right to challenge the acquisition.
Issue 2: Cessation of Public Purpose:
The appellants argued that the acquisition became invalid when the public purpose ceased to exist. However, the court found no merit in this argument. The acquisition process had been finalized, compensation paid, and possession surrendered to the government as per the agreement's conditions. The land was then allotted for a different public purpose to a subsidiary company. The court concluded that the original public purpose was substituted with another, and the matter had been settled 32 years ago. Therefore, the writ petition could not be entertained after such a long period.
In conclusion, the Supreme Court upheld the High Court's decision to dismiss the appeal, stating that the writ petition could not be entertained after such a long period. The appeal was accordingly dismissed with no costs.
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1996 (11) TMI 467
Issues Involved:
The issues involved in this case include insurable interest in a vessel, liability of an insurance company, rights of a mortgagee in an insurance claim, jurisdiction of the National Consumer Dispute Redressal Commission, and interpretation of relevant legal provisions.
Insurable Interest and Liability of Insurance Company:
The case involved a dispute where the insurance company refused to pay the insurance amount to the purchaser of a vessel, claiming he had no insurable interest. The National Consumer Commission found that the purchaser had insurable interest as he was in possession of the vessel and had insured it, directing the insurance company to pay the amount due under the policy with interest.
Rights of Mortgagee in Insurance Claim:
The Gujarat Maritime Board, as the mortgagee of the vessel, objected to the direction of the Commission to pay the entire insurance amount to the purchaser. The Board argued that it had an interest in the vessel and should be considered in the insurance claim. The Commission initially stayed its order but later directed the full payment to the purchaser, prompting the Board to appeal.
Jurisdiction of the National Consumer Commission:
The question arose whether the Commission had the jurisdiction to decide the conflicting claims of the mortgagee and the purchaser under the Consumer Protection Act, 1986. The Supreme Court held that the Commission had the power to adjudicate such disputes as incidental to its substantive jurisdiction under the Act.
Interpretation of Legal Provisions:
The Supreme Court interpreted the relevant legal provisions to determine the powers of the National Commission in deciding disputes under the Consumer Protection Act. It emphasized that the Commission had the authority to adjudicate rival claims and decide disputes where multiple parties sought the same relief.
In conclusion, the Supreme Court allowed the appeal, setting aside the Commission's orders and remitting the matter for fresh disposal according to law, without expressing any opinion on the merits of the case. The Court clarified that its observations served as reasons for the order and not as findings on the claims of the parties involved.
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1996 (11) TMI 466
The Supreme Court allowed the appeal, set aside the High Court's order, and remanded the writ petition for fresh disposal on merits. The Court emphasized the necessity of providing reasons for decisions. The High Court was requested to expedite the disposal of the writ petition. The stay order on the termination of services was extended for three months.
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1996 (11) TMI 465
The Supreme Court dismissed the special leave petition challenging the order of the High Court confirming the dismissal of an appeal. The petitioner's counsel had withdrawn the appeal without authorization, but the Court held that it was within the counsel's power to do so under Order III, Rule 4 of the CPC. The Court did not find any illegality in the order passed by the lower court.
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1996 (11) TMI 464
Issues Involved:
1. Challenge to the acquisition proceedings under the Land Acquisition Act, 1894.
2. Delay in completing the acquisition proceedings.
3. Validity of multiple declarations under Section 6 of the Act.
4. Application of Section 55 of the Delhi Development Act, 1957.
5. Withdrawal of acquisition under Section 48 of the Act.
6. Acquisition of land with existing structures and green areas.
Summary:
1. Challenge to the acquisition proceedings under the Land Acquisition Act, 1894:
Various notifications u/s 4 of the Land Acquisition Act, 1894 were issued between 1959 and 1965 for the planned development of Delhi. The appellants challenged these notifications and subsequent declarations u/s 6 on various grounds, including the validity of multiple declarations and the delay in finalizing the acquisition proceedings. The Supreme Court dismissed these challenges, referencing previous decisions, including Aflatoon & Ors. vs. Lt. Governor of Delhi (1974), which upheld the validity of such notifications and declarations.
2. Delay in completing the acquisition proceedings:
The appellants argued that the delay in completing the acquisition proceedings deprived them of fair compensation, as the market value of the land increased significantly over time. The Court acknowledged the delay but noted that it was partly due to the landowners' own actions, such as filing numerous objections and writ petitions. The Court upheld the view from Ram Chand vs. Union of India (1994) that quashing the acquisition proceedings due to delay would not be appropriate, but directed the payment of additional compensation at 12% per annum from two years after the Aflatoon decision until the award date.
3. Validity of multiple declarations under Section 6 of the Act:
The appellants contended that issuing more than one declaration u/s 6 from a single notification u/s 4 was not permissible. The Court referred to the Land Acquisition (Amendment and Validation) Act, 1967, which allows multiple declarations from a single notification. This amendment was upheld in Uday Ram Sharma vs. Union of India (1968) and reaffirmed in Aflatoon's case, thus dismissing the appellants' contention.
4. Application of Section 55 of the Delhi Development Act, 1957:
The appellants argued that the land designated for compulsory acquisition under the master plan should be acquired within six months of notice u/s 55 of the Delhi Development Act, failing which the acquisition should be deemed abandoned. The Court found no merit in this argument, noting that the land acquisition process under the Land Acquisition Act overrides the six-month period specified in the Delhi Act. The Court agreed with the High Court's view that Section 55 does not inhibit the acquisition of land for public purposes under the Land Acquisition Act.
5. Withdrawal of acquisition under Section 48 of the Act:
The appellants claimed that the government had withdrawn certain lands from acquisition, and thus the entire acquisition process should be quashed. The Court examined the original records and found no valid order for withdrawal. It held that withdrawal u/s 48 requires a notification in the official gazette, which was not done. The Court upheld the High Court's view that mere communication of a misconstrued order does not constitute a valid withdrawal.
6. Acquisition of land with existing structures and green areas:
The appellants argued that land with existing structures and designated green areas should not be acquired. The Court noted that recreational facilities are part of the planned development and cannot be excluded. It also stated that structures built without necessary approvals after the notification u/s 4 cannot be exempted from acquisition. The Court left the decision on existing structures to the discretion of the government.
Conclusion:
The Supreme Court dismissed the appeals and upheld the acquisition proceedings. It directed payment of additional compensation at 12% per annum from two years after the Aflatoon decision until the award date, calculated with reference to the market value on the date of notification u/s 4(1) of the Act. No order as to costs was made.
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1996 (11) TMI 463
The Supreme Court held that the Land Acquisition Amendment Act 68 of 1984 does not apply to acquisitions under the U.P. Avas Evam Vikas Parishad Adhiniyam, 1965. The Court directed the Land Acquisition Officer to pass the award within six weeks, with interest at 18% if delayed, and withdrawal of acquisition if compensation is not deposited within three months. The appeal was allowed with no costs. (Case citation: 1996 (11) TMI 463 - Supreme Court)
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1996 (11) TMI 462
Issues Involved:
1. Computation of deduction u/s 80HHC.
2. Treatment of compensation received as short-term capital gains.
Summary:
Issue 1: Computation of Deduction u/s 80HHC
Ground No. 6 pertains to the computation of deduction claimed u/s 80HHC. The revenue authorities included excise duty (Rs. 5,80,11,331) and sales tax (Rs. 96,79,522) in the 'total turnover' for the purpose of this computation. The assessee contended that these additions were not warranted as per the scheme of section 80HHC, pointing out that 'export turnover' and 'total turnover' are defined differently in the Act. The Tribunal in Chloride India Ltd. v. Dy. CIT [1995] 53 ITD 180 (Cal.) had observed that including excise duty and sales tax in 'total turnover' would result in disharmony as 'export turnover' did not include these items. The revenue, however, argued that the definition of 'total turnover' in the Act is clear and includes these amounts. The Tribunal agreed with the revenue, holding that the amounts of excise duty and sales tax were rightly included in the 'total turnover'.
Issue 2: Treatment of Compensation Received as Short-Term Capital Gains
The last ground relates to the receipt of Rs. 1,70,50,000 treated as short-term capital gains. The assessee had an agreement to purchase property dated 18th April 1981, and another agreement dated 30th March 1991 to relinquish its rights for a consideration of Rs. 1,70,50,000. The Assessing Officer treated this as short-term capital gain, arguing that the agreement dated 30th March 1991 was independent of the earlier agreement and the asset was held for less than 36 months. The CIT(Appeals) upheld this view. The assessee argued that the right to purchase the property was a long-term capital asset held since 1981, and the compensation received should be treated as long-term capital gains. The Tribunal agreed with the assessee, citing decisions such as Tata Services Ltd. [1980] 122 ITR 594 (Bom.) and Vijay Flexible Containers [1990] 186 ITR 693 (Bom.), and held that the compensation received was for relinquishing a long-term capital asset. Consequently, the Tribunal directed the Assessing Officer to examine the assessee's claim for exemption u/s 54E and grant it if the conditions were satisfied.
Conclusion:
The appeal was partly allowed, with the Tribunal upholding the inclusion of excise duty and sales tax in 'total turnover' for deduction u/s 80HHC, and treating the compensation received as long-term capital gains, directing the Assessing Officer to consider the exemption claim u/s 54E.
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1996 (11) TMI 461
Issues Involved:
1. Legality of the exercise of power under Section 17(4) of the Land Acquisition Act, 1894.
2. Compliance with mandatory conditions under Section 4(1) of the Land Acquisition Act, 1894.
3. Validity of the declaration under Section 6(1) of the Land Acquisition Act, 1894.
4. Impact of the judgment of the learned single Judge quashing the declaration under Section 6(1).
5. Necessity for fresh publication of the declaration under Section 6(1) after quashing.
Summary:
1. Legality of the exercise of power under Section 17(4) of the Land Acquisition Act, 1894:
The Supreme Court examined whether the exercise of power under Section 17(4) invoking urgency clause under Section 17(1) is conditioned upon the publication of the notification under Section 4(1). It was established that the Government has the power to invoke Section 17(4) after the publication of the notification under Section 4(1). The Court emphasized that the compliance of the three mandatory conditions under Section 4(1) is necessary before exercising the power under Section 17(4).
2. Compliance with mandatory conditions under Section 4(1) of the Land Acquisition Act, 1894:
The Court reiterated that Section 4(1) requires three mandatory conditions: publication in the official Gazette, publication in two daily newspapers, and public notice of the substance of such notification in the locality. The last of the dates of such publication is crucial for the exercise of power under Section 17(4). The Court held that while these steps are mandatory, it is not necessary that all three steps be completed before making the declaration under Section 6(1) and publishing it.
3. Validity of the declaration under Section 6(1) of the Land Acquisition Act, 1894:
The Court discussed the mandatory nature of the publication of the declaration under Section 6(1) to give conclusiveness to the public purpose. The declaration should be published in the Gazette after the notification under Section 4(1) is published, with at least a one-day gap between them. The Court held that the date of publication in the Gazette is crucial, not the actual date of printing.
4. Impact of the judgment of the learned single Judge quashing the declaration under Section 6(1):
The learned single Judge quashed the declaration under Section 6(1) published on December 24, 1986, which was later reversed by the Division Bench. The Supreme Court held that the Division Bench's judgment restored the declaration under Section 6(1) published on December 24, 1986, making any subsequent declaration superfluous.
5. Necessity for fresh publication of the declaration under Section 6(1) after quashing:
The Court concluded that there was no necessity for fresh publication of the declaration under Section 6(1) after the learned single Judge quashed it, as the Division Bench's judgment restored the original declaration. The land vested in the State on January 29, 1987, free from all encumbrances, and the award became final.
Conclusion:
The Supreme Court dismissed the appeals, upholding the Division Bench's judgment, and confirmed that the declaration under Section 6(1) published on December 24, 1986, was valid and restored. The compliance with the three steps under Section 4(1) is mandatory, but the exercise of power under Section 17(4) does not require waiting for the last of the dates of these steps. The appeals were dismissed without costs.
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1996 (11) TMI 460
The Supreme Court dismissed the appeal regarding land acquisition compensation, upholding the High Court's decision to deduct 40% towards development charges. The notice to respondents was deemed served as they did not respond. Land was acquired in Shimla with compensation initially set at Rs. 40,000 per bigha, later increased to Rs. 1,00,000 by the district Judge.
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1996 (11) TMI 459
Issues involved: Appeal filed by Authorised Officer under Tamil Nadu Land Reforms Act to set aside High Court judgment regarding surplus land declaration.
Judgment Summary:
Issue 1: Challenge to High Court's remand order
The appeal was filed by the Authorised Officer under the Tamil Nadu Land Reforms Act to challenge the judgment of the High Court of Madras, which declared about 4.81 standard acres of lands belonging to the respondent as surplus. The High Court had set aside the orders passed by the authorities and remanded the case for fresh consideration in light of a previous judgment. However, the Authorised Officer decided the ceiling proceedings based on a subsequent judgment by the Supreme Court, which reversed the earlier High Court judgment. The High Court accepted the contention that the Authorised Officer was bound by the order of remand and should have considered the dispute based on the High Court's judgment. Consequently, the civil revision filed by the landholder was allowed by the High Court.
Issue 2: Finality of High Court's order
The appellant argued that once the Supreme Court reversed the judgment on which the High Court had based its direction, the Authorised Officer was justified in following the Supreme Court's judgment. However, the High Court's order directing the examination of the dispute based on its judgment had attained finality as it was not challenged before the Supreme Court. The High Court's reasoning was found to be in accordance with legal principles, stating that orders, even if not strictly legal, become final and binding if not challenged before superior courts. Consequently, the appeal was dismissed by the Supreme Court, upholding the High Court's decision.
This summary provides a detailed overview of the issues involved in the legal judgment, highlighting the key arguments and decisions made by the courts involved.
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