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Showing 101 to 120 of 364 Records
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1995 (11) TMI 391
Issues:
1. Interpretation of exemption notification under Karnataka Sales Tax Act for handmade washing soap.
2. Validity of assessment order based on total turnover exceeding the exemption limit.
3. Challenge to the correctness of the order dated July 7, 1993, by the Deputy Commissioner of Commercial Taxes.
4. Comparison with the decision of Madhya Pradesh High Court regarding the interpretation of exemption conditions.
Interpretation of Exemption Notification:
The appellant, a registered dealer manufacturing handmade washing soap, filed a return for the assessment year 1984-85 and was assessed at 4% based on a notification reducing tax for turnover not exceeding rupees ten lakhs. The total turnover of the appellant exceeded the limit, leading to a notice for revision of assessment. The appellant challenged the notice, citing a previous decision by a Division Bench. The appellant argued that the word "total" in the notification should be struck down to benefit poor users of handmade washing soaps. However, the Court held that it cannot alter or add conditions to the notification as it would amount to legislating, emphasizing that exemption conditions are determined by the authority issuing the notification.
Validity of Assessment Order:
During the appeal process, the Deputy Commissioner overruled the assessment order, stating the appellant was not entitled to the exemption. The appellant challenged this order, arguing that the Division Bench had not considered the specific aspect of quashing the word "total" in the notification. The Court rejected this argument, stating that the authority issuing the exemption notification has the discretion to impose conditions for availing the benefit, and the court cannot interfere with this statutory power.
Challenge to Deputy Commissioner's Order:
The appellant sought to challenge the correctness of the Deputy Commissioner's order dated July 7, 1993. The Court allowed the challenge, leading to the focus of the appeal on the validity of this order. The appellant's argument to strike down the word "total" in the notification was rejected, emphasizing that such decisions are within the authority's discretion and not for the court to determine.
Comparison with Madhya Pradesh High Court Decision:
The appellant relied on a decision by the Madhya Pradesh High Court regarding the interpretation of an exemption notification. In that case, the court struck down a condition in the notification, but the Karnataka High Court disagreed with this approach. The Court emphasized that it is not the court's function to alter conditions in exemption notifications, as this falls under the authority of the issuing body. The Court upheld the Deputy Commissioner's order, stating it did not have any infirmity and aligned with the Division Bench's decision.
In conclusion, the appeal was dismissed with costs, affirming the validity of the assessment order and the discretion of the authority in determining exemption conditions under the Karnataka Sales Tax Act.
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1995 (11) TMI 390
Issues:
Interpretation of the powers of the Deputy Excise and Taxation Commissioner under section 40 of the Haryana General Sales Tax Act to direct the Assessing Authority to initiate penal proceedings against the assessee under section 10(7) of the Punjab General Sales Tax Act.
Analysis:
The High Court of Punjab and Haryana considered the question of law referred by the Sales Tax Tribunal regarding the jurisdiction of the Deputy Excise and Taxation Commissioner to direct the initiation of penal proceedings against the assessee under section 10(7) of the Punjab General Sales Tax Act. The case involved the discrepancy in the turnover figures provided by the assessee in his returns under the Punjab Act, which led to the assessment order imposing a demand notice and penalty for late filing. However, no penalty proceedings under section 10(7) of the Punjab Act were initiated by the Assessing Authority.
The revisional authority under the Haryana Act, exercising powers under section 40, called for the record of the assessment proceedings to examine the legality of not imposing penalty under section 10(7) of the Punjab Act. The assessee contended that penalty and assessment proceedings are distinct, and since the Assessing Authority did not initiate penalty proceedings, the revisional authority had no jurisdiction to intervene. The revisional authority disagreed and remanded the case to the Assessing Authority to initiate penalty proceedings.
The Tribunal, on appeal by the assessee, held that the revisional authority exceeded its jurisdiction by delving into penalty proceedings not initiated by the Assessing Authority. The Tribunal's decision was challenged by the Revenue, arguing that penalty proceedings are linked to assessment proceedings. The High Court analyzed the relevant provisions of the Haryana Act, particularly section 40(1), which empowers the revisional authority to review proceedings for legality and propriety.
The Court emphasized that the revisional authority's intervention is warranted only if penalty proceedings have been initiated by the Assessing Authority. Citing precedents from the Madras High Court and the Gujarat High Court, the Court highlighted that the revisional authority cannot independently invoke penalty powers if the Assessing Authority did not exercise its penalty jurisdiction. Therefore, the Court held that the revisional authority lacked jurisdiction to impose penalty suo motu when the Assessing Authority had not initiated penalty proceedings despite the incorrect return filed by the assessee.
In conclusion, the High Court answered the question in the negative, ruling in favor of the assessee and against the Revenue. The Court held that the revisional authority's intervention for penalty imposition was not justified when the Assessing Authority had not initiated penalty proceedings, affirming the independence of penalty proceedings from assessment proceedings.
This detailed analysis of the judgment provides a comprehensive overview of the legal issues involved and the Court's reasoning in interpreting the relevant provisions of the law to resolve the dispute between the parties.
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1995 (11) TMI 389
Issues:
Challenge to amended definition of section 2(r) of Andhra Pradesh General Sales Tax Act as ultra vires of Constitution, Legislative competence of State Legislature, Assessment orders legality.
Analysis:
The writ petition challenges the amended definition of section 2(r) of the Andhra Pradesh General Sales Tax Act, alleging it is ultra vires of articles 14 and 19(1)(g) of the Constitution due to lack of legislative competence by the State Legislature. The petitioner, a limited company, contests the imposition of additional tax by the assessing authority based on the amended definition. The amended definition includes total turnover in all goods of a trader in all places of business in the State, irrespective of tax liability. The petitioner argues that this inclusion, especially of turnover from inter-State sales, is unjust, arbitrary, and illegal.
In response, the second respondent clarifies that the amendment was made to remove ambiguity, defining total turnover as the aggregate turnover in all goods of a dealer. The counter-affidavit asserts that tax liability is determined based on the total quantum of business within the State, not specifically on inter-State transactions. The respondents maintain that the amended definition is not unconstitutional and does not enhance a dealer's tax liability concerning inter-State sales.
The petitioner's counsel argues that the State lacks legislative competence to tax inter-State sales and cannot indirectly impose such taxes by broadening the definition of total turnover. Referring to section 38 of the Act and article 286 of the Constitution, the counsel contends that inter-State sales should not be considered for tax purposes. The petitioner asserts that including inter-State sales turnover in total turnover for calculating additional tax is illegal and unconstitutional.
The Court refers to a Supreme Court case where it was held that State Legislatures, under specific entries in the Constitution, can consider total turnover for certain purposes without taxing inter-State sales directly. The Court concludes that the liability for surcharge is only on sales within the State, not on inter-State transactions. Following this precedent, the Court dismisses the writ petition, allowing the petitioner to challenge assessment orders if inter-State sales turnover was subjected to additional tax.
In conclusion, the Court dismisses the writ petition, emphasizing that the State Legislature can consider total turnover for specific purposes without taxing inter-State sales directly. The petitioner is granted the option to challenge assessment orders concerning the treatment of inter-State sales turnover for additional tax.
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1995 (11) TMI 388
Issues:
1. Interpretation of conditions for claiming set-off under section 8 of the M.P. General Sales Tax Act, 1958.
2. Exigibility of empty gunny bags to sales tax under the Act.
Analysis:
Issue 1: Interpretation of conditions for claiming set-off under section 8 of the M.P. General Sales Tax Act, 1958:
The case involved a reference under section 44(1) of the Act regarding the entitlement to set-off under section 8 of the Act. The Tribunal had to decide whether the set-off would be granted only if the conditions under rule 20-C(1)(a)(iii) were fulfilled. The Court analyzed rule 20-C of the Rules, which outlined the conditions for claiming set-off. It was established that the set-off could be claimed by a registered dealer if certain conditions were met, such as being a registered dealer, using tax-paid material for manufacturing goods sold in Madhya Pradesh or in inter-State trade. The Court clarified that the set-off claim should not be dependent on the goods being used or sold in the same quarter but within the assessment year. The Court emphasized that if all conditions were satisfied during the assessment year, the assessee would be entitled to the set-off.
Issue 2: Exigibility of empty gunny bags to sales tax under the Act:
The second question referred to the Tribunal was whether empty gunny bags sold by the company were exigible to sales tax under the Act. The Court ruled against the assessee, citing the amended definition of "business" in section 2(bb) of the Act, which included waste material as being subject to sales tax. Consequently, the Court answered the second question against the assessee.
The judgment provided a detailed analysis of the conditions for claiming set-off under the Act and clarified that set-off entitlement should be based on fulfilling conditions within the assessment year. Additionally, the Court ruled that empty gunny bags were exigible to sales tax based on the expanded definition of "business" under the Act. Both references were disposed of accordingly, with the Court answering the questions in light of the interpretations provided.
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1995 (11) TMI 387
Issues Involved:
1. Taxability of pre-sale charges (handling, dressing, polishing, and transport charges) under the Tamil Nadu General Sales Tax Act.
2. Eligibility for exemption under section 5(3) of the Central Sales Tax Act for penultimate sales.
Issue-wise Detailed Analysis:
1. Taxability of Pre-Sale Charges:
The primary issue revolves around whether the pre-sale charges such as handling, dressing, polishing, and transport charges incurred by the assessee before the delivery of granite stones to exporters should be included in the taxable turnover. The Deputy Commissioner, exercising suo motu powers under section 32 of the Tamil Nadu General Sales Tax Act, included these charges in the sales turnover for the assessment years 1975-76 and 1976-77, amounting to Rs. 7,97,422.80 and Rs. 6,93,303.36 respectively.
The Tribunal upheld this decision, noting that the charges were collected as a composite sum along with the sale consideration, thus falling within the purview of section 2(h) of the Central Sales Tax Act. The Tribunal also pointed out that the freight and handling charges were included in the sale consideration as one lump sum amount, making them taxable.
The assessee argued that these charges were collected separately for independent services and should not be included in the taxable turnover. However, the Tribunal found that the charges were part of the sale price, as they were incurred to make the goods deliverable to the purchaser, thus constituting a part of the sales turnover.
The Supreme Court's decisions in cases like Commissioner of Sales Tax, U.P. v. Rai Bharat Das & Bros. and Hindustan Sugar Mills Ltd. v. State of Rajasthan supported the Tribunal's conclusion that such charges, being integral to the sale, must be included in the sales turnover.
2. Eligibility for Exemption under Section 5(3) of the Central Sales Tax Act:
The second issue concerns the assessee's claim for exemption under section 5(3) of the Central Sales Tax Act for penultimate sales made to exporters. The Tribunal denied this exemption for the assessment year 1975-76, as the provision was introduced only from April 1, 1976. For the assessment year 1976-77, the Tribunal also rejected the exemption claim, as the assessee failed to produce necessary documents such as the sale agreement and bill of lading to establish that the granite stones sold to exporters were indeed exported.
The Tribunal emphasized the need for a pre-existing agreement or order to sell specific goods to a foreign buyer, and the penultimate sales must have taken place to comply with this agreement. The assessee argued that the sales to exporters like Chennai Enterprises and Mass International were in the course of export and thus eligible for exemption. However, the Tribunal found that the assessee did not provide sufficient evidence, such as form "H" or other documents, to substantiate this claim.
The Tribunal's decision was based on the principle that all charges incurred before delivery, which were part of making the goods deliverable, must be included in the sales turnover. Additionally, the Tribunal held that without proper documentation to prove that the goods were exported, the exemption under section 5(3) could not be granted.
Conclusion:
The High Court dismissed the tax cases (revision), upholding the Tribunal's decision to include pre-sale charges in the taxable turnover and denying the exemption under section 5(3) of the Central Sales Tax Act for the assessment year 1976-77 due to lack of sufficient evidence. The Court concluded that the pre-sale charges were part of the sale price and taxable as per section 2(h) of the Central Sales Tax Act, and the assessee failed to meet the requirements for exemption under section 5(3).
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1995 (11) TMI 386
Issues:
1. Entitlement to refund under the Kerala General Sales Tax Act, 1963.
2. Validity of the order adjusting the refund amount for dues of subsequent years.
3. Requirement of notice before issuing an order under section 44(3) of the Act.
4. Entitlement to interest on the refund amount.
Entitlement to Refund:
The petitioner, a jeweler and assessee for sales tax, sought a refund of Rs. 45,634 under section 44(1) of the Kerala General Sales Tax Act, 1963. The appellate authority modified the initial order, leading to the refund claim. However, the department adjusted the refund amount due to arrears for the year 1993-94, issuing an order for a reduced refund of Rs. 17,790. The court held that such adjustment was justified considering the arrears and interim stay orders, concluding that no injustice was done warranting extraordinary jurisdiction under article 226 of the Constitution of India.
Validity of Adjustment Order:
The petitioner challenged the adjustment order, contending that it should have been issued after providing notice and alleging a violation of natural justice. The court ruled that the order under section 44(3) of the Act did not require prior notice to the assessee. It clarified that the adjustment was lawful, as it was based on the power granted to the assessing authority to offset amounts due against the refundable sum. The court upheld the validity of the adjustment order and dismissed the petitioner's plea to quash it.
Requirement of Notice and Natural Justice:
The court determined that no statutory provision mandated prior notice before issuing an order under section 44(3) of the Act. It held that the nature of the proceedings did not necessitate notice to the assessee before passing such an order. Therefore, the court found no illegality in the adjustment order issued without prior notice, rejecting the petitioner's argument based on the principles of natural justice.
Entitlement to Interest on Refund:
Regarding the interest payable on the refund amount, the court acknowledged the appellant's entitlement to interest at 6 per cent from October 30, 1994, to the date of the adjustment order. The court directed the respondents to refund the entire amount of Rs. 45,635 to the appellant promptly, along with 6 per cent interest from August 1, 1995, until the date of payment. The court allowed the appeal on this ground, granting relief to the appellant in terms of interest on the refund amount.
In conclusion, the court allowed the appeal, directing the refund of the full amount with interest, while upholding the validity of the adjustment order and rejecting the petitioner's claims regarding notice and natural justice.
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1995 (11) TMI 385
Issues Involved:
1. Jurisdiction to Reassess under Section 14(4)(cc) of the Act.
2. Burden of Proof under Section 7A of the Act.
3. Validity of Affidavits and Evidence Provided by Appellants.
4. Role of the Purchasing Dealer's Non-Accountal of Transactions.
5. Requirement for Cross-Examination of the Purchasing Dealer.
6. Verification of Bank Drafts and Financial Transactions.
7. Remanding the Matter for Fresh Assessment.
Detailed Analysis:
1. Jurisdiction to Reassess under Section 14(4)(cc) of the Act:
The court rejected the contention that the assessing authority had no jurisdiction to reassess under Section 14(4)(cc). It was held that reassessment was justified based on new information received from departmental enquiries indicating that the purchasing dealer did not account for the transactions. This constituted sufficient grounds for reopening the assessments, and it was not merely a case of change of opinion.
2. Burden of Proof under Section 7A of the Act:
The burden of proof lies on the dealer to demonstrate that a sale or purchase is not liable to tax. The appellants were required to prove that the sales were made to other dealers in the State. The court noted that once the dealer furnishes relevant material and primary facts, the duty cast on him must be deemed to have been discharged. The burden does not rest on the dealer throughout the process.
3. Validity of Affidavits and Evidence Provided by Appellants:
The affidavits from the proprietor of M/s. Sudhakar Oil Mills and the brokers were scrutinized. The appellate authority found that the signatures on some affidavits matched those on undisputed transactions, suggesting that the affidavits could not be dismissed outright. The Commissioner, however, found the affidavits insufficient to discharge the burden of proof, citing inconsistencies and lack of conclusive evidence.
4. Role of the Purchasing Dealer's Non-Accountal of Transactions:
The non-accountal of transactions by M/s. Sudhakar Oil Mills was a central issue. The court held that the liability to pay tax does not shift to the appellants merely because the purchasing dealer did not disclose the transactions. The non-accountal could raise doubts but does not automatically invalidate the appellants' claims. The appellate authority believed that the non-accountal was likely a tactic by the purchasing dealer to evade tax.
5. Requirement for Cross-Examination of the Purchasing Dealer:
The appellate authority criticized the Commercial Tax Officer for not allowing the appellants to cross-examine the proprietor of M/s. Sudhakar Oil Mills. The Commissioner found no illegality in refusing the cross-examination request. The court highlighted the importance of cross-examination in verifying the genuineness of the transactions.
6. Verification of Bank Drafts and Financial Transactions:
The appellants provided details of bank drafts as evidence of payments received. The Commissioner dismissed this evidence, citing the dates of the drafts and lack of direct correlation to the transactions. The court found this reasoning untenable, noting that credit sales and delayed payments are common in business. The court emphasized the need for the assessing authority to verify the bank drafts and the source of funds.
7. Remanding the Matter for Fresh Assessment:
The court set aside the revisional and appellate orders as well as the reassessment orders. It directed the assessing authority to pass fresh orders after examining the appellants' accounts. The assessing authority was instructed to verify if the disputed transactions were accounted for and if payments were received through the bank drafts. The court allowed the assessing authority to check for commission payments to brokers and draw inferences accordingly.
Conclusion:
The special appeals were allowed to the extent indicated, with no order as to costs. The matter was remanded to the assessing authority for a limited scrutiny of the appellants' accounts and verification of the disputed transactions.
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1995 (11) TMI 384
Issues:
1. Interpretation of whether 'niwar' and handloom 'daris' fall under the definition of cotton fabrics for taxation purposes.
Analysis:
The High Court of Madhya Pradesh was tasked with deciding whether 'niwar' and handloom 'daris' should be considered as cotton fabrics under the tax laws. The appellant, a business dealing in various goods, including niwar and daris, contested the tax levied on these items. The appellant argued that niwar and daris were not explicitly mentioned in the definition of cotton fabrics under the Central Excises and Salt Act. However, the court held that the definition of cotton fabrics was broad and included all varieties of fabrics made wholly or partly from cotton. The court emphasized that the list of items provided in the definition was illustrative, not exhaustive. Since niwar and daris were woven from cotton fabrics, they fell within the ambit of cotton fabrics as per the expansive definition. Therefore, the court ruled in favor of the Revenue, upholding the tax liability on niwar and daris at the rate of 1.5 per cent during the relevant period.
In conclusion, the court answered both questions in favor of the Revenue and against the assessee. The reference made by the Board of Revenue regarding the tax treatment of niwar and handloom daris was affirmed by the High Court. The judgment clarified that the expansive definition of cotton fabrics encompassed items like niwar and daris, even though they were not explicitly listed in the statutory provision. This decision highlights the importance of interpreting legal definitions broadly to ensure comprehensive coverage of related items for taxation purposes.
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1995 (11) TMI 383
Issues:
- Validity of service of notice on the petitioner
- Whether the ex parte decision of the Tribunal should be set aside for fresh adjudication
Analysis:
The High Court of Orissa addressed the issue of whether there was valid service of notice on the petitioner, also known as "the assessee," in a writ application concerning appeals filed by the Revenue against the petitioner. The Tribunal had disposed of the matter ex parte after the petitioner failed to appear on the scheduled date. The petitioner claimed that there was no service of notice, leading to the ex parte decision. The Tribunal initially directed an inquiry into the service of notice, considering the petitioner's affidavit and the report from the Sales Tax Officer. However, the Tribunal concluded that there was valid service of notice without waiting for the report from the postal department. The High Court analyzed the relevant provisions of the Orissa Sales Tax Act, Rules, and Tribunal Regulations, emphasizing the necessity of notice to parties before hearing an appeal. The Court highlighted Rule 58, which mandates sending notice of hearing by registered post to the appellant or respondent. The Court noted that the person who received the notice was not authorized, as per the report from the Sales Tax Officer, to accept the notice on behalf of the petitioner. Despite this, the Tribunal concluded that the notice was validly served, which the Court found to be a presumptuous conclusion. The Court criticized the Tribunal for not considering crucial evidence and not awaiting the postal department's report before making a decision.
The Court held that the Tribunal's decision was erroneous and lacked substantial evidence to support the conclusion of valid service of notice. The Court set aside the order rejecting the application for restoration and directed the Tribunal to re-hear the application. The writ application was allowed, emphasizing the importance of proper service of notice and fair adjudication in legal proceedings.
In a separate concurring judgment by Justice P.C. Naik, the writ application was allowed in line with the decision of Justice A. Pasayat. The judgment highlights the significance of ensuring procedural fairness and proper service of notice in legal proceedings, ultimately leading to the direction for the Tribunal to re-hear the application for restoration.
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1995 (11) TMI 382
Whether delay itself would be a ground to set aside the award?
Whether respondent should be compensated considerably by awarding interest thereunder?
Held that:- If compensation was accepted without protest, it binds such party but subject to Section 28A. Possession of the acquired land would be taken only by way of a memorandum, Panchanama, which is a legally accepted norm. It would not be possible to take any physical possession. Therefore, subsequent continuation, if any, had by the erstwhile owner is only illegal or unlawful possession which does not bind the Government nor vested under Section 16 divested in the illegal occupant. Considered from this perspective, we hold that the High Court was not justified in interfering with the award.
Delay in making the first award is compensated by award of additional amount under Section 23(1A) and interest under Section 28 of the Act as amended by Act 68 of 1984 which has taken care to set off the delay in making the award. Under these circumstances, the respondents are adequately compensated for loss, if any, for denial of enjoying the lands from the date of taking possession till date of deposit. The appeals are allowed accordingly.
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1995 (11) TMI 381
Whether extraordinary discretionary jurisdiction vested in the High Court under Article 226 of the Constitution of India was improperly invoked?
Held that:- The 1st respondent was unjustified in invoking the extraordinary jurisdiction of the High Court under Article 226 of the Constitution of India, without first showing cause against Annexure Ext. P-4 before the 3rd respondent. The appropriate procedure for the 1st respondent would have been to file his objections and place necessary materials before the 3rd respondent and invite a decision as to whether the proceedings initiated by the 3rd respondent under Section 59 of the Bihar State Housing Board Act, 1982, are justified and appropriate. The adjudication in that behalf necessarily involves disputed questions of fact which require investigation. In such a case, proceedings under Article 226 of the Constitution can hardly be an appropriate remedy. The High Court committed a grave error in entertaining the Writ Petition and in allowing the same by quashing Annexure Ext. P-4 and also the Eviction proceedings No. 6/92, without proper and fair investigation of the basic facts. We are, therefore, constrained to set aside the judgment of the High Court of Patna in CWJC NO. 82/93 dated 10.2.1993. We hereby do so. The appeal is allowed with costs.
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1995 (11) TMI 380
Issues:
- Condonation of delay in filing an appeal challenging the order of forfeiture of properties under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976.
Detailed Analysis:
The judgment pertains to an appeal challenging an order passed by the Competent Authority under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976, for the forfeiture of properties, some of which were held in the name of the appellant. The appellant sought condonation of delay in filing the appeal, citing reasons such as being out of India when the notice was issued, being in judicial custody upon returning to India, and facing delays in obtaining a copy of the impugned order. The appellant claimed that the appeal could not be filed in time due to various circumstances, including the unavailability of the advocate and postal delays in sending the appeal papers to the Tribunal.
The Tribunal, chaired by Mrs. S. Duggal J., analyzed the provisions of the Act regarding the timeline for filing an appeal. The appellant received the copy of the impugned order on March 6, 1995, and had 45 days to file the appeal from that date. The statute allowed the Tribunal to entertain an appeal after 45 days but not beyond 60 days if satisfied that there was a sufficient cause for the delay. However, the appeal was received in the Registry on May 9, 1995, which was beyond the 60-day limit specified by the Act.
The Tribunal emphasized that its power to condone delay was limited to 15 days beyond the normal 45-day period, extending up to the 60th day from the date of service of the order. The appellant's argument regarding postal delays was not considered as it was raised for the first time during the hearing, and the Tribunal lacked the authority to condone delays beyond the statutory limit of 60 days. The Tribunal clarified that it could not override the express statutory provisions or exercise inherent powers beyond the specified timeframe, as the Act clearly outlined the 60-day limit for filing an appeal.
Ultimately, the Tribunal dismissed the application for condonation of delay, refused to admit the appeal, and rejected it as time-barred. The judgment underscores the importance of adhering to statutory timelines for filing appeals and highlights the limitations on the Tribunal's power to condone delays beyond the prescribed period.
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1995 (11) TMI 379
Whether the order dismissing the appellant from service is invalid in law for non-supply of the inquiry report?
Whether the charge of being in possession of assets disproportionate to his known source of income is a misconduct?
Whether the delay in initiating disciplinary proceeding is an unfair procedure depriving the livelihood of a public servant offending Article 14 or 21 of the Constitution?
Whether the inquiry was held by a competent officer?
Held that:- The availability of appeal etc. to public servants does not make a real difference, as the appellate/revisional authority is known to have taken a different view on the question of sentence only rarely. I would, therefore, think that but for the self-imposed limitation while exercising power under Article 226 of the Constitution, there is no inherent reason to disallow application of judicial mind to the question of proportionately of punishment/penalty. But then, while seized with this question as a writ court interference is permissible only when the punishment/penalty is shockingly disproportionate.
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1995 (11) TMI 378
Scrap manufactured and removed clandestinely - product was fully exempt from duty under Notification No. 180/61 - goods exempted from duty are not includible within the definition of `excisable goods' as defined in clause (d) of Section 2 - appellant says, he was under the bona fide impression that he need not mention the value - Held that: - department was aware of import of input by several importers and large quantities over a period of time - it cannot be said that the department was not aware of its use - levy of duty, is barred by limitation - appeals allowed
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1995 (11) TMI 376
Issues:
1. Disallowance of additional trade discount and cost of secondary packing in the price list.
2. Jurisdiction of the Supdt. to issue a notice of demand without a show cause notice.
Issue 1: Disallowance of Additional Trade Discount and Cost of Secondary Packing:
The appellants, engaged in manufacturing paints and varnishes, filed a declaration in 1977 to manufacture products for M/s. Berger Paints India Ltd. The dispute arose regarding the deduction claimed for additional trade discount and cost of secondary packing in the price list. The Assistant Collector had allowed a 5% and 4.5% trade discount but disallowed the additional discount extended by the principal to its dealers based on volume of purchase. The Tribunal held that difficulties in calculating the discount cannot be a ground for disallowing the deduction. The Supreme Court's decision in a similar case supported the deduction of additional trade discount granted by the principal. The deduction for the cost of secondary packing was also allowed as it was not used in wholesale trade at the factory gate, making it eligible for deduction in determining the assessable value.
Issue 2: Jurisdiction of the Supdt. to Issue a Notice of Demand:
The Supdt. Central Excise quantified the assessable value and excise duty payable at the end of the year, leading to a demand for payment from the appellants. The appellants contended that the Supdt. had no jurisdiction to issue a notice of demand without a show cause notice. However, the respondent argued that it was an assessment under Rule 173(1) which did not require a show cause notice. The Tribunal did not resolve this controversy as they modified the impugned order by allowing deductions for additional trade discount and secondary packing. The Supdt.'s demand was set aside, and the Department was directed to recalculate the amount due and issue a fresh demand in accordance with the law.
In conclusion, the Tribunal allowed the appeals, holding that the appellants were entitled to deductions for additional trade discount and secondary packing. The Supdt.'s demand was set aside, and the Department was instructed to quantify the amount due based on the Tribunal's order. The decision clarified the eligibility criteria for deductions and emphasized the importance of providing relevant materials to support the claimed deductions.
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1995 (11) TMI 375
The Appellate Tribunal CEGAT, New Delhi dismissed three appeals by the department regarding factory sales being lower than depot sales. The tribunal upheld the Collector (Appeals) decision that factory gate sales price is genuine and should be used to determine value under Section 4 of the Central Excises and Salt Act. The department failed to prove that factory gate sales were not genuine, so the appeals were dismissed.
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1995 (11) TMI 374
Issues:
1. Application for reliefs under sections 446(1), 453, and 537 of the Companies Act, 1956.
2. Grant of leave for continuation of Suit No. 2945 of 1990.
3. Appointment and continuation of the receiver of the High Court of Bombay.
4. Recovery of dues by sale of movable and immovable properties of the respondent-company.
5. Transfer of suit to winding up court under section 446(3).
6. Imposition of conditions for granting permission to continue the suit.
7. Entitlement to continuation of the receiver over the properties of the respondent-company.
8. Conflict between the appointment of receiver and official liquidator's role under section 456.
9. Consideration of interests of all creditors and workmen in the liquidation proceedings.
Analysis:
1. The applicant, a bank, sought reliefs under sections 446(1), 453, and 537 of the Companies Act, 1956, related to a suit filed against a respondent-company for non-payment of dues secured by mortgaged and hypothecated properties. The applicant requested leave to continue the suit pending in the Bombay High Court, appointment of a receiver, and recovery of dues through property sale.
2. The court considered the timeline of events, noting that the suit was filed before the winding-up order. The court emphasized the importance of obtaining leave under section 446(1) to proceed with legal actions against a company under liquidation. The court granted permission to continue the suit, subject to a condition of depositing a specified sum with the official liquidator.
3. The applicant also sought the continuation of the receiver over the respondent-company's properties. However, the official liquidator argued that the appointment of a receiver conflicts with the official liquidator's role under section 456, which mandates control over company assets in liquidation. The court, considering the interests of all creditors and workmen, declined to pass orders on this request, suggesting the official liquidator approach the Bombay High Court for appropriate actions.
4. The court highlighted the need to maintain equitable administration of company assets during liquidation, preventing certain creditors from gaining undue advantage. It directed parties to seek further orders from the winding-up court after addressing receiver-related matters with the Bombay High Court. The court partially allowed the application, subject to specified conditions and further court approvals.
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1995 (11) TMI 373
Issues Involved:
1. Petition for winding up under Section 433(e) and (f) of the Companies Act, 1956.
2. Admitted debt and interest rate dispute.
3. Respondent's financial position and solvency.
4. Respondent's defense against winding up.
5. Legal principles regarding winding up petitions.
Detailed Analysis:
1. Petition for Winding Up under Section 433(e) and (f) of the Companies Act, 1956:
The petitioner sought the winding up of the respondent company under Section 433(e) and (f) of the Companies Act, 1956, on the grounds of the respondent's inability to pay an admitted debt of Rs. 5 crores, despite statutory demand. The petitioner claimed an interest rate of 21% per annum, while the respondent contended it was 15% per annum.
2. Admitted Debt and Interest Rate Dispute:
The petitioner, a public sector company, had advanced inter-corporate loans to the respondent starting from 1984, with the first loan being Rs. 5 crores. An agreement dated 22-12-1985 specified repayment terms and interest rates, including a penal interest clause. Despite partial repayments, a balance of Rs. 5 crores remained unpaid as of November 1992. The respondent admitted the debt but disputed the interest rate and claimed to have paid Rs. 78.54 lakhs as excess interest.
3. Respondent's Financial Position and Solvency:
The respondent's financial position was scrutinized, revealing a loss of Rs. 115.54 crores in 1992-93, despite earlier profits. The net worth had significantly declined, raising doubts about the company's solvency. The respondent's failure to provide financial data for 1993-94 and subsequent periods was seen as deliberate, indicating a worsening financial situation.
4. Respondent's Defense Against Winding Up:
The respondent argued that the petition should not be admitted, suggesting that the petitioner should pursue a money suit instead. They contended that winding up should only be considered when the company is permanently unable to meet its obligations. The respondent also highlighted its status as a Government of India undertaking and the potential adverse impact of winding up on its operations and employees.
5. Legal Principles Regarding Winding Up Petitions:
The court referred to Sections 433 and 434 of the Companies Act, which outline the grounds and circumstances for deeming a company unable to pay its debts. The court emphasized that a petition for winding up is not a legitimate means of enforcing payment of a disputed debt and should be dismissed if the debt is bona fide disputed. However, in this case, the debt was not disputed, and the respondent's failure to pay or secure the debt despite statutory notice demonstrated an inability to pay.
Conclusion:
The court found that the petitioner had established its status as a creditor and that the respondent's inability to pay the debt was both deemed and demonstrated. The financial position of the respondent was precarious, and the attitude of refusing to pay an admitted debt was not acceptable. The petition for winding up was admitted, but the advertisement of the petition was deferred until 1-1-1996 to allow the respondent to pay the admitted amount with interest.
Final Judgment:
The petition was admitted, with the advertisement deferred to provide the respondent an opportunity to settle the admitted dues. The court concluded that this was a fit case for admission based on the facts presented.
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1995 (11) TMI 372
Issues:
1. Maintainability of petition under sections 397 and 398 of the Companies Act, 1961.
2. Jurisdiction of the Court to entertain the petition.
3. Compliance with section 399 as a condition precedent.
4. Amendment sought for the petition.
5. Dismissal of the petition under sections 397 and 398.
6. Appeal against the order of the Single Judge.
7. Relief sought under sections 397 and 398.
8. Alternative prayer for winding up of the company.
9. Just and equitable clause for winding up.
10. Availability of alternative remedies.
11. Dismissal of the petition for winding up.
Analysis:
The petitioners filed a petition under sections 397 and 398 of the Companies Act, 1961, seeking relief against oppression and prejudicial activities of the respondents, and alternatively, for winding up the respondent-company under sections 434 and 439 of the Act. The prayers included various orders to address the alleged oppressive and prejudicial activities of the respondent group, transfer of shares, removal of directors, and convening an extraordinary general meeting. The respondent challenged the maintainability of the petition based on the petitioners not fulfilling the qualification requirements under section 399, which was considered a jurisdictional issue by the Court.
The Single Judge, in a detailed order, found that the petitioners did not hold the required share capital, had not obtained written consent from other members, and had not complied with section 399. The Court emphasized that compliance with section 399 is a condition precedent for maintaining a petition under sections 397 and 398. The jurisdiction to entertain such petitions now vested with the Company Law Board (CLB) post an amendment in 1991. The Court held the petition under sections 397 and 398 as not maintainable but allowed the winding-up petition to continue.
An appeal against the Single Judge's order was dismissed by the Division Bench. The Court affirmed the decision that the petition under sections 397 and 398 was not maintainable. The petitioner's argument for winding up based on mismanagement was considered to fall within the ambit of sections 397 and 398. The Court rejected the contention that the company should be wound up due to falling production, especially when the company was financially sound and consistently providing bonuses to shareholders.
The Court highlighted the 'just and equitable' clause for winding up, emphasizing that it should be a last resort when other remedies are not efficacious. The petitioner was expected to disclose any alternative remedies pursued or available. The Court cited precedents where winding up was considered a last resort when other remedies existed. Ultimately, the Court concluded that the petitioner failed to establish grounds for winding up the company and dismissed the petition with no order as to costs.
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1995 (11) TMI 363
The Appellate Tribunal CEGAT, New Delhi allowed the appeal regarding the refund of duty paid on machine tools returned after reconditioning, as reconditioning qualifies under Rule 173L of the Central Excise Rules. The appeal for refund of duty paid the second time was dismissed.
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