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2005 (1) TMI 734
Issues:
1. Validity of the amendment to the Karnataka Excise Rules regarding minimum quantity of liquor to be lifted per month by CL-2 and CL-9 licensees.
2. Compliance with procedural requirements in issuing the impugned notification.
3. Constitutionality of the amendment in relation to Article 19(g) and Article 14 of the Constitution.
Analysis:
Issue 1: Validity of the amendment
The Government of Karnataka amended the Karnataka Excise Rules by inserting Sub-rule (2) of Rule 14, 14A, and 14B, requiring CL-2 and CL-9 licensees to lift a minimum quantity of liquor per month. The amendment aimed to address clandestine transactions and evasion of excise duty. The State considered objections and issued the final notification on 1.4.2003. The High Court found that the State had duly considered objections and followed the procedure under Section 71 of the Act. The amendment was deemed necessary to safeguard State revenue and public interest, thus justifying the differentiation made in including only CL-2 and CL-9 licensees in the notification.
Issue 2: Compliance with procedural requirements
The respondents argued that the State did not consult the Department of Law as required by the Karnataka Government (Transaction of Business) Rules, 1977. However, the Court held that the consultation requirement was not mandatory in this case, and the State had followed the prescribed procedure by inviting objections, considering them, and issuing the final notification. The Court found that the objections were duly considered, even though reasons for rejection were not explicitly recorded, and concluded that the procedure was followed.
Issue 3: Constitutionality of the amendment
The respondents contended that the amendment, requiring CL-2 and CL-9 licensees to lift a minimum quantity of liquor per month, violated Article 19(g) and Article 14 of the Constitution. However, the Court referenced previous Supreme Court judgments which established that citizens have no fundamental right to trade in intoxicating liquors. The differentiation made in the impugned notification was found to be rational and not discriminatory, as it aimed to address specific issues related to certain categories of licensees. Therefore, the Court rejected the contention that the amendment was unconstitutional.
In conclusion, the High Court allowed the appeals by the Government of Karnataka, set aside the previous judgment, and dismissed the writ petitions challenging the amendment to the Karnataka Excise Rules.
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2005 (1) TMI 733
The Bombay High Court dismissed the appeal as there was no substantial question of law involved in the case. The judgment was based on the Income Tax Appellate Tribunal's decision dated 28.1.2002.
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2005 (1) TMI 732
Issues involved: Interpretation of eligibility for SSI exemption based on the clearance of corrugated cartons used for packing exported shoes.
Summary:
Issue 1: Eligibility for SSI exemption
The Revenue appealed against the Commissioner (Appeals) decision regarding the treatment of corrugated cartons supplied for packing exported shoes in relation to SSI exemption eligibility. The Revenue argued that these cartons should be included in total clearance for claiming the exemption. However, referencing the case of CCE Kanpur Vs M/s. International Corrugators, the Tribunal rejected the Revenue's contention. The Tribunal emphasized that there was no evidence presented by the Revenue to prove that the cartons were not actually exported along with the shoes. The Tribunal ruled that the exported goods should not be considered for determining eligibility for the small scale exemption. Consequently, the appeals were dismissed based on the precedent set by the Tribunal.
This judgment clarifies the criteria for SSI exemption eligibility in cases involving the clearance of goods used for export purposes, emphasizing the need for concrete evidence to support claims made by the Revenue.
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2005 (1) TMI 731
Issues Involved:
1. Deletion of additions made under Section 68 on account of cash credits.
2. Deletion of additions made under Section 69C on account of commission payments for alleged hawala transactions.
Issue-wise Detailed Analysis:
1. Deletion of Additions under Section 68 on Account of Cash Credits:
The core issue in these appeals is the deletion of additions made by the Assessing Officer (AO) under Section 68 due to cash credits introduced in the capital accounts of the assessee, allegedly from the sale proceeds of jewelry/diamonds received from specific jewelers. The Department's grievance is against the deletion by the Commissioner of Income Tax (Appeals) [CIT(A)] of these additions.
The assessee had declared undisclosed assets in the form of investments in jewelry/diamonds under the Voluntary Disclosure of Income Scheme (VDIS) 1997. The return was accepted, and a certificate was issued. However, based on information that certain jewelers were indulging in hawala transactions, proceedings under Section 147/148 were initiated against the assessee. Statements from the jewelers indicated that they issued cheques after accepting cash through middlemen, leading the AO to treat the sales as fictitious and the amount received as income from undisclosed sources.
The CIT(A) concluded that the AO was not justified in drawing adverse inferences against the assessee. The CIT(A) considered that neither the middlemen were summoned nor any action taken against them. The CIT(A) also noted discrepancies in the statements of the jewelers and the lack of direct evidence. The CIT(A) relied on various case laws, including the Supreme Court decision in Kishinchand Chellaram v. CIT, and held that the adverse inference drawn by the AO was not justified without full material and direct evidence. Consequently, the CIT(A) deleted the additions made under Section 68.
2. Deletion of Additions under Section 69C on Account of Commission Payments:
The Department also objected to the deletion of additions made under Section 69C for commission payments at the rate of 3% for arranging the alleged hawala transactions. The AO had made these additions based on the statements of the jewelers, which indicated that cheques were issued after accepting cash through middlemen.
The CIT(A) found no material evidence to establish that the assessee paid 3% commission over and above the cheque amount received from the sale of jewelry and diamonds. The CIT(A) noted that the statements of the jewelers were not provided to the assessee for filing explanations or objections, thus denying natural justice. The CIT(A) relied on case laws and concluded that the AO's adverse inference was not justified. Therefore, the CIT(A) deleted the additions made under Section 69C.
Conclusion:
The Tribunal, after considering the rival submissions and perusing the orders of the authorities below, found no infirmity in the orders of the CIT(A). The Tribunal noted that the CIT(A) had taken into consideration various discrepancies and contradictions in the facts and statements recorded. The Tribunal confirmed the findings of the CIT(A) that the adverse inference drawn by the AO was not justified without full material and direct evidence. The Tribunal also noted that the CIT(A) had relied on various case laws, and no contrary decisions were brought to the notice of the Bench.
Outcome:
The Tribunal dismissed all five appeals of the Revenue, confirming the orders of the CIT(A) and rejecting the grounds of the Revenue in these appeals.
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2005 (1) TMI 730
Issues Involved:
1. Reduction of sentence by the High Court.
2. Adequacy and special reasons for reducing the sentence below the statutory minimum.
Issue-wise Detailed Analysis:
1. Reduction of Sentence by the High Court:
The primary issue in this appeal was whether the learned Single Judge of the High Court was right in reducing the sentences of the respondents to the period already undergone. The respondents were convicted under Sections 450 and 376(1)/109(1) of the Indian Penal Code (IPC). The respondent Munna was sentenced to seven years of rigorous imprisonment and a fine for the offence under Section 376(1) IPC, and five years for the offence under Section 450 IPC, with both sentences running concurrently. Respondent Ghanshyam received similar sentences. The High Court reduced their sentences to the period already served, noting that Munna had served about three years and six months, while Ghanshyam had served about two months. The High Court's rationale was that the accused came from rural areas, which it considered a just and proper ground for sentence reduction.
2. Adequacy and Special Reasons for Reducing the Sentence Below the Statutory Minimum:
The Supreme Court emphasized that the reduction of sentence by the High Court was contrary to established legal principles. The Court noted that the offences under Section 376 IPC, which include rape, carry a minimum sentence of imprisonment for life or up to ten years. The legislative intent behind the stringent punishment for rape was to curb the offence with an iron hand, reflecting the severity and impact on the dignity of a woman. The Supreme Court highlighted that the physical and mental scars of such an offence are profound and enduring.
The Court underscored that the law must balance social interests, protect society, and impose appropriate sentences to deter criminal behavior. Sentencing should reflect the gravity of the crime, the manner of its commission, and the impact on the victim and society. The Court cited several precedents emphasizing that undue sympathy leading to inadequate sentences undermines public confidence in the justice system. It reiterated that the principle of proportionality should guide sentencing, ensuring that punishment fits the crime.
The Supreme Court pointed out that both sub-sections (1) and (2) of Section 376 IPC prescribe minimum sentences, and any deviation requires "adequate and special reasons" recorded in the judgment. The High Court's reasoning that the accused belonged to rural areas did not meet this statutory requirement. The reasons must be both adequate and special, and the High Court's rationale was neither.
Conclusion:
The Supreme Court concluded that the High Court's order reducing the sentences was unsustainable. It set aside the High Court's judgment and directed the respondents to surrender to custody to serve the remainder of their sentences. The appeal was allowed to the extent indicated, reaffirming the importance of appropriate sentencing in maintaining the efficacy and credibility of the justice system.
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2005 (1) TMI 729
The Supreme Court dismissed the appeal in the case with citation 2005 (1) TMI 729 - SC. Judgement was given by Mrs. Ruma Pal and Mr. C.K. Thakker, JJ.
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2005 (1) TMI 728
Issues:
- Dismissal of application to implead in a partition suit
- Claim of being bona fide purchasers for value
- Application of Section 52 of the Transfer of Property Act
- Impact of lis pendens on property transactions during legal proceedings
- Interpretation of relevant case laws in similar contexts
Issue 1: Dismissal of Application to Implead in a Partition Suit
The petitioners sought to implead themselves in a partition suit as bonafide purchasers for value. They argued that since there was no dispute regarding the shares, they should be allowed to participate in the proceedings. The trial court, however, dismissed their application citing the doctrine of lis pendens as the sales in their favor were during the pendency of the suit. The petitioners contended that they had purchased the properties before being informed of the suit, and had made genuine inquiries before the transactions.
Issue 2: Claim of Being Bona Fide Purchasers for Value
The respondents opposed the petitioners' claim of being bona fide purchasers, highlighting a previous court auction where a relative of one petitioner had acquired the same property. This auction sale was later set aside due to fraud, casting doubt on the petitioners' claim. The respondents argued that the petitioners' purchases were affected by lis pendens, making Section 52 of the Transfer of Property Act applicable to their case.
Issue 3: Application of Section 52 of the Transfer of Property Act
Section 52 prohibits the transfer of property involved in legal proceedings without court authorization, to safeguard the rights of all parties. The court emphasized that the property purchases by the petitioners during the suit's pendency fell under lis pendens, restricting their rights. Previous case laws, including Raghavan v. M. Krishnammal, underscored the importance of adhering to Section 52's provisions to prevent prejudicing other parties' rights.
Issue 4: Impact of Lis Pendens on Property Transactions During Legal Proceedings
The court examined the implications of lis pendens on property transactions during legal proceedings. It reiterated that any transfer during this period must comply with Section 52 to ensure fairness and prevent undermining the litigation process. The judgments cited by the respondents emphasized the binding nature of decrees on transferees affected by lis pendens, reinforcing the need for court approval before such transactions.
Issue 5: Interpretation of Relevant Case Laws in Similar Contexts
The court analyzed various case laws, such as G. Krishnamoorthy v. Sukumar and others, to interpret the application of Section 52 and lis pendens in partition suits. These precedents highlighted the statutory bar on property alienation during legal proceedings and the necessity of court permission for any transfers affecting the rights of other parties. The court stressed that each case's outcome depended on its unique circumstances, emphasizing the need for careful consideration in impleading parties during pending suits.
In conclusion, the court dismissed the revision, upholding the trial court's decision to deny the petitioners' application for impleadment. The court found that the petitioners' purchases were tainted by lis pendens and could not claim superior rights over their vendors. The judgment underscored the importance of adhering to Section 52 of the Transfer of Property Act and respecting the legal principles governing property transactions during ongoing legal proceedings.
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2005 (1) TMI 727
Issues Involved:
1. Maintainability of the petition under Section 482, Cr.P.C.
2. Liability of accused 11 and 12 under Section 138 of the Negotiable Instruments Act.
3. The propriety of splitting the case against accused 1 to 9.
4. The requirement of prosecuting the company along with its officers.
5. The application of legal precedents and statutory provisions.
Issue-Wise Detailed Analysis:
1. Maintainability of the petition under Section 482, Cr.P.C.:
The petitioners sought relief under Section 482, Cr.P.C. to call for records and set aside the orders of the lower courts. The High Court examined whether the application filed by the petitioners under Section 255, Cr.P.C. seeking acquittal was maintainable. It was argued that the Magistrate can only acquit the accused after evaluating the evidence, not through an application under Section 255, Cr.P.C. The court held that the application under Section 255, Cr.P.C. seeking discharge was not maintainable.
2. Liability of accused 11 and 12 under Section 138 of the Negotiable Instruments Act:
The petitioners, accused 11 and 12, argued that they were merely signatories and employees of the company and should not be held liable. They contended that without a finding of guilt against the company and other directors (accused 1 to 9), they could not be held responsible. The court referred to Section 141 of the Negotiable Instruments Act, which deems every person in charge of and responsible for the conduct of the business of the company guilty of the offence. The court emphasized that it is for the accused to prove that the offence was committed without their knowledge or that they exercised due diligence to prevent it.
3. The propriety of splitting the case against accused 1 to 9:
The trial court had split the case against accused 1 to 9 due to the non-execution of non-bailable warrants. The High Court criticized this approach, stating that the trial court should have directed the complainant to pursue substituted service methods like paper publication to ensure the presence of all accused. The court held that the order of splitting the case was improper and needed to be quashed.
4. The requirement of prosecuting the company along with its officers:
The petitioners argued that the guilt of the company is a condition precedent for holding them liable. The court referred to the ruling in Anil Hada v. Indian Acrylic Ltd., which established that even if the company is not prosecuted due to legal constraints, proceedings against the responsible officers can continue. The court clarified that while the prosecution of the company is not a sine qua non, a finding that the company committed the offence is essential for convicting the officers.
5. The application of legal precedents and statutory provisions:
The court referred to several precedents, including STATE OF KARNATAKA v. NARASA REDDY and SHEORATON AGARWAL AND ANR. v. STATE OF MADHYA PRADESH, to reinforce the principles regarding the prosecution of company officers. The court reiterated that the burden lies on the accused to prove their non-involvement in the offence under the proviso to Section 141 of the Negotiable Instruments Act.
Conclusion:
The High Court set aside the order of splitting the case against accused 1 to 9 and directed the complainant to take steps to proceed against all accused, including accused 11 and 12. The court emphasized that the trial should be conducted against all responsible parties to determine their liability comprehensively. The petitioners were granted the liberty to present their defense to establish their innocence in the conduct of the company's business.
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2005 (1) TMI 726
Maintainability of the public interest litigation - delay in filing - lease-cum-sale agreement - Challenged the Validity of building licence issued for construction of multi-storeyed/multi-apartments and direction to demolish the building already constructed on the site - permission granted by the Bangalore Municipal Corporation to the appellant for raising the construction up to third floor - violation of any of the provisions of the Act and the Rules - HELD THAT:- We are of the opinion that delay in this case is equally fatal, the construction already started by the appellant in 1987 and building had come up to three floors. Thereafter it was stopped in 1988 and in March, 1991 it resumed after permission was granted. The Writ Petition was filed in November, 1991 meanwhile almost construction was complete. Therefore, delay was fatal in the present case and learned single judge rightly held it. It was also brought to our notice that 46 multi storey buildings have come up in this area. Learned counsel has produced photographs to show that buildings more than three and four floors have been constructed in and around this area.
However, we are satisfied that there is no prohibition under the provisions of the Act and Rules putting the ceiling on construction of the multi storey building. We are also satisfied that the delay is also fatal in the present case.
The sale purchase agreement has its own terms and conditions and the condition as reproduced above, only says that the building to be constructed shall be used wholly for human habitation and shall not include any apartments to the building whether attached thereto or not used as a shop or a building or warehouse or used for manufactory operations by mechanical power. Therefore, in this final agreement which has come to be executed and which has been registered the condition is that the building has to be used for human habitation and there is no prohibition contained therein that it cannot raise multi-storeyed building.
Once the final agreement is executed then the lessee- purchaser becomes absolute owner of the schedule property and he has to abide by the conditions of the final agreement for sale and other provisions bearing on the subject. The final agreement only contains the condition that the lessee -purchaser should use the schedule property for human dwelling purpose and it will not be used in apartment of that building for purpose of shop or for warehouse or for manufacturing process, therefore, the view taken in Pee Kay Constructions case cannot be said to be a good law.
We regret to say that this interpretation does not bear out in the face of the language used in the Clause 2 of the final agreement which says that the building to be constructed shall be used wholly for human habitation and shall not include any apartments to the building whether attached thereto or not for shop or warehouse or manufacturing purposes but that does not make out a case for prohibition of raising of the multi-storeyed building. Once the Municipal Corporation has permuted to raise construction more than three floor then this condition for construction will hold good and they are not contrary to any of the provisions of the Act. Section 505 of the Karnataka Municipal Corporation Act, 1976 only says that the Corporation shall exercise power in conformity with the provisions of the Karnataka Town and Country Planning Act, 1961. Therefore, the Corporation at the time of granting permission has to keep in mind the provisions of the Karnataka Town and Country Planning Act, 1961. But we have not been able to find any provisions of the Karnataka Municipal Corporation Act or Karnataka Town and Country Planning Act, 1961 where any ceiling has been applied on the construction of the multi-storeyed building. Therefore; we do not find that the Municipal Corporation has committed any illegality in granting permission to the appellant for raising construction up to third floor.
Thus, we are of opinion that permission granted by the Bangalore Municipal Corporation to the appellant for raising the construction up to third floor is not in violation of any of the provisions of the Act and the Rules.
Hence, we set aside the judgment of the Division Bench of the High Court and allow the appeal. The facts of C.A. are identical. Therefore, this appeal is also allowed for the reasons mentioned aforesaid. C.A, has been filed by persons who have already purchased the flats and they are living in the said flats of the multi-storeyed buildings. Therefore, third party interest has already been created. As such this appeal is also allowed for the reasons mentioned above. However, there will be no order as to costs.
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2005 (1) TMI 725
... ...
... ... ..... the connected papers. We do not found any merit in the same. The review petitions are dismissed.
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2005 (1) TMI 724
Issues:
Revenue's appeal against dropping of proceedings by the Commissioner of Central Excise based on modvat credit eligibility for capital goods and generating sets supplied by a third party.
Analysis:
The case involved two appeals filed by the Revenue challenging the dropping of proceedings by the Commissioner of Central Excise against two assessees regarding the eligibility of modvat credit for capital goods and generating sets supplied by a third party. The Show Cause Notice alleged that certain goods did not conform to the definition of capital goods under Rule 57Q. The Commissioner upheld the assessees' eligibility for modvat credit and found the demands beyond the limitation period with no elements of fraud or suppression. He also noted the procedural irregularity in the issuance of the Show Cause Notice by the Superintendent instead of the Commissioner. The Commissioner accepted all other pleas and dropped the demands against the third-party supplier under relevant sections of the CE Act. The Commissioner also found that the third-party supplier had supplied goods exempt from duty under a specific notification and had already paid the duty. The Commissioner concluded that the assessees were eligible for modvat credit, leading to the Revenue's appeal.
In the hearing, the Senior Departmental Representative (SDR) reiterated the grounds of appeal, while the Counsel for the assessees pointed out a similar case decided by the Chennai Bench, where the Tribunal set aside the Commissioner's order on identical grounds. The Tribunal in the Chennai case found no intention to evade duty as all declarations were filed and allowed modvat credit, setting aside penalties. The Counsel argued that this precedent applied to the present case, citing another judgment supporting the assessees' entitlement to credit for similar goods. After careful consideration, the Tribunal found the Commissioner's order just and proper, noting that previous Tribunal judgments supported modvat credit eligibility for the goods in question. The Tribunal rejected the Revenue's appeals, citing the consistency of previous rulings with the facts of the case.
In conclusion, the Tribunal upheld the Commissioner's decision to drop proceedings against the assessees, finding no merit in the Revenue's appeals. The Tribunal based its decision on the eligibility of modvat credit for the capital goods and generating sets in question, supported by previous Tribunal judgments and the absence of fraudulent intent or suppression. The Tribunal's decision aligned with the principles established in similar cases, leading to the rejection of the Revenue's appeals.
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2005 (1) TMI 723
Issues:
Application of Section 319 Cr.P.C. for summoning additional accused during trial.
Analysis:
The revision was filed against the order of the trial court dismissing the application for summoning additional accused under Section 319 Cr.P.C. The revisionist lodged a report against multiple accused who allegedly reached the scene with firearms and injured individuals. The prosecution moved an application to summon the remaining accused based on evidence from witnesses and injury reports. The trial court, however, dismissed the application, considering the defense raised by one of the accused and lack of direct evidence against the others. The High Court noted that the trial judge misinterpreted the law and facts, giving undue weight to the defense of the accused and failing to properly assess the evidence presented.
The High Court criticized the trial judge for not applying the law correctly and for relying on judgments without understanding and applying the principles laid down in them. The trial judge cited precedents but failed to properly analyze the evidence before the court and instead focused on the defense of the accused who had not yet appeared in court. The High Court emphasized that the trial judge should have considered the evidence adduced before it and not the defense of absent accused. The High Court also highlighted that the trial judge's reliance on a judgment of the single judge of the court was not in line with the pronouncements of the apex court, which had clarified the applicability of Section 319 Cr.P.C. in cases where accused were named in the FIR but not charged during investigation.
Ultimately, the High Court allowed the revision, set aside the trial court's order, and remanded the matter for fresh consideration in light of the correct legal principles established by the apex court. The High Court directed the District & Sessions Judge to ensure proper appreciation of superior court rulings and adherence to legal principles in future cases.
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2005 (1) TMI 722
Issues Involved:
1. Whether court fee is payable on counter claims filed before the Debt Recovery Tribunal prior to the amendment of Rule 7 on 21.1.2003.
Detailed Analysis:
1. Common Questions of Fact and Law:
Both writ petitions raised common questions of fact and law regarding the payment of court fees on counter claims filed before the Debt Recovery Tribunal (DRT) prior to the amendment of Rule 7 on 21.1.2003. The petitions were therefore disposed of by a common judgment.
2. Background of the Cases:
The petitioners, who were respondents in Original Applications (O.A.) filed by banks before the DRT, had filed counter claims in their written statements. The DRT directed the petitioners to pay court fees on these counter claims, which the petitioners contested on the grounds that there was no statutory provision for such fees at the time the counter claims were filed.
3. Issue of Court Fee on Counter Claims:
The core issue was whether any court fee was payable on the counter claims raised in the written statements filed by the defendants in the O.A.s pending before the Tribunal.
4. Relevant Dates and Amendments:
The counter claims were filed before the amendment of Rule 7, which incorporated a provision for payment of court fees on counter claims, effective from 21.1.2003. The petitioners argued that since the counter claims were filed before this date, no court fee was payable.
5. Petitioners' Argument:
The petitioners contended that the provision permitting counter claims was introduced by Act 1/2000, effective from 17.1.2000, but Rule 7 was amended to include court fees on counter claims only from 21.1.2003. They argued that in the absence of any provision for court fees on counter claims during the interregnum period, no court fee was payable on their counter claims filed prior to 21.1.2003.
6. Respondents' Argument:
The respondents argued that since the Bank is obliged to pay court fees on the O.A. filed before the Tribunal, a counter claim should be treated as a counter suit and should be subject to the same court fee provisions as an O.A. filed under Section 19(1) of the Act.
7. Relevant Provisions of the Act and Rules:
Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, was examined, particularly subsections (1), (2), (8), and (9). The court noted that while Section 19(1) and (2) provided for the payment of court fees on applications filed by banks, there was no express provision for court fees on counter claims until the amendment of Rule 7 in 2003.
8. Interpretation of Section 19(9):
Section 19(9) treats a counter claim as a cross suit for the limited purpose of enabling the Tribunal to pass a final order on both the original claim and the counter claim. It does not imply that the fee provisions applicable to O.A.s filed by banks also apply to counter claims.
9. Amendment of Rule 7:
The amendment to Rule 7, effective from 21.1.2003, explicitly included counter claims in the provision for court fees. The court held that this amendment was not retrospective and applied only from the date it came into force.
10. Legislative Intent:
The court emphasized that the legislative intent was to give effect to the rule prospectively from 21.1.2003, and not retrospectively. The court rejected the respondents' argument that court fees were payable on counter claims even before the amendment.
11. Precedents and Legal Principles:
The court referred to various precedents, including the Supreme Court's ruling in Union of India v. Deoki Nandan Aggarwal, which held that courts cannot rewrite or add to the legislation. The court also cited decisions emphasizing that court fees are payable according to the law in force at the time of filing the suit or application.
Conclusion:
The court concluded that no court fee was payable on counter claims filed before the amendment of Rule 7 on 21.1.2003. The orders passed by the Tribunal directing the petitioners to pay court fees on their counter claims were set aside, and the writ petitions were allowed.
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2005 (1) TMI 721
Issues Involved:
1. Breach of collateral security given to MSFC.
2. Alleged misappropriation of sale price of DEPB licenses.
3. Diversion of company business to M/s. Vardhman Impex Pvt. Ltd.
4. Allegation of unsecured loan and advances.
Issue-Wise Detailed Analysis:
1. Breach of Collateral Security Given to MSFC:
The petitioner alleged that Respondent Nos. 2 to 4 sold a flat offered as collateral security for term loans without the approval of Maharashtra State Financial Corporation (MSFC) or the Board of Directors, and used the sale proceeds for personal use. This act exposed the petitioner and her husband to serious civil consequences. The respondents admitted selling the flat but justified it by stating that they anticipated its release by MSFC. The judgment concluded that the respondents should not have breached the collateral security without MSFC's clearance, indicating a mismanagement of the company's financial affairs.
2. Alleged Misappropriation of Sale Price of DEPB Licenses:
The petitioner claimed that DEPB licenses worth approximately Rs. 20 lakhs were sold by the respondents without accounting for the proceeds in the company's books. The respondents contended that an ex-employee had committed fraud by unauthorizedly selling DEPB licenses worth Rs. 8 lakhs, for which an FIR was filed, and that they had obtained replacement licenses worth Rs. 12 lakhs from DGFT. The judgment noted that the respondents had taken steps to address the issue, including filing an FIR and obtaining replacement licenses, and suggested that the matter should follow its natural legal course.
3. Diversion of Company Business to M/s. Vardhman Impex Pvt. Ltd.:
The petitioner alleged that the respondent-company's business was diverted to companies owned by the Dharod Group, specifically M/s. Vardhman Impex Pvt. Ltd. and Vardhman Buildcon Pvt. Ltd., without proper disclosure or approval, causing financial loss to the respondent-company. The respondents justified the diversion by stating it was done to avail of sales tax benefits under a deferred scheme. The petitioner was aware of these transactions, and it was on the advice of her husband, Mr. Rajesh Shah, that these actions were taken. The judgment acknowledged the respondents' explanation but did not delve into the legality of the sales tax exemption scheme.
4. Allegation of Unsecured Loan and Advances:
The petitioner accused the respondents of advancing unsecured loans to M/s. Deepak Enterprises and other entities without Board approval, thereby mismanaging the company's funds. The respondents argued that these loans were known to the petitioner and her husband, who had signed the relevant balance sheets. The judgment noted that the petitioner was aware of these transactions and had participated in the company's financial decisions through her husband.
Conclusion:
The judgment concluded that the petitioner had been involved in the company's affairs until disputes arose in 2001 and had engaged in "forum shopping" by writing to various authorities and filing multiple complaints. While some actions of the respondents, such as transferring Rs. 20 lakhs to a director's personal account and selling the collateral flat, were deemed improper, they did not constitute oppression of the petitioner. The judgment directed that the petitioner be given the option to sell her shares at a fair price, to be determined by a valuer appointed by the Board, based on the company's balance sheet as of 31-3-2001. No orders as to costs were made.
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2005 (1) TMI 720
Challenged the judgment of the High Court dismissing second appeal u/s 100 of the Code of Civil Procedure (’the CPC’) -section 16 of the Land Acquisition Act, 1894 (’the Act’) - benefit of the appellant was fenced off by barbed wire - award made u/s 11 of the Act and possession of the acquired land taken, the land would vest absolutely in the Government "free from all encumbrances" - HELD THAT:- In the first place, it is difficult for us to read the judgment in Tarsem Singh case [2001 (9) TMI 1156 - SUPREME COURT] as taking a view contrary to and differing from the law laid down by a larger Bench in Collector of Bombay [1955 (2) TMI 20 - SUPREME COURT]). Secondly, we notice that the decision in Tarsem Singh (supra) is not in respect of an easementary right arising out of necessity. There does not seem to be any discussion on the said aspect of the matter in this judgment. The view taken in Collector of Bombay (supra), therefore, appears to hold the field, particularly where the nature of easementary right claimed is not capable of being evaluated in terms of compensation and arises out of sheer necessity.
In the peculiar facts and circumstances of the case, therefore, the distinction drawn by the High Court about non extinguishment of the right of easement arising out of necessity appears to be justified both on principle and precedent. In any event, we do not think that the present is a fit case where it is necessary for us to go deeper into this larger issue of law for we are satisfied that the judgment of the High Court under appeal is not one which is required to be interfered with in exercise of our jurisdiction under Article 136 of the Constitution.
Thus, we are of the view that the appeal has no merit and deserves to be dismissed. The appeal is hereby dismissed. No costs.
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2005 (1) TMI 719
Issues Involved:
1. Applicability of Order XXXVII Rule 2 of the Code of Civil Procedure to invoices.
2. Allegation of defective and sub-standard goods supplied.
3. Authorization of Dr. Cosima Paul to sign and verify pleadings on behalf of the defendant.
4. Claim of interest at 18% per annum on the amount due.
Detailed Analysis:
1. Applicability of Order XXXVII Rule 2 of the Code of Civil Procedure to Invoices:
The defendant argued that an invoice does not fall within the ambit of Order XXXVII Rule 2 of the Code of Civil Procedure. The court noted that invoices/bills are considered "written contracts" within the contemplation of Order XXXVII Rule 2. The court referenced multiple decisions, including M/s Punjab Pen House v. Samrat Bicycles Limited and Corporate Voice Private Limited v. Uniroll Leather India Limited, to support this position. The court concluded that the invoices in question, which contained the description, quantity, price, and payment conditions, constituted a complete contract required by law for the sale of goods. Therefore, the suit was maintainable under Order XXXVII Rule 1 as a summary suit.
2. Allegation of Defective and Sub-standard Goods Supplied:
The defendant claimed that the goods received under the two invoices were defective and sub-standard, asserting that the plaintiff was required to take back the goods, which were still lying with the defendant. The court highlighted the statutory provisions under Sections 41 and 42 of the Sale of Goods Act. Section 41 mandates that the buyer has a reasonable opportunity to examine the goods upon delivery, and Section 42 stipulates that the buyer is deemed to have accepted the goods if they are not rejected within a reasonable time. The court found that the defendant received the goods in May 2000 and September 2000 but did not indicate any defects until December 2001, which was deemed an unreasonable delay. Thus, the defendant was considered to have accepted the goods, and the defense of defective goods was rejected.
3. Authorization of Dr. Cosima Paul to Sign and Verify Pleadings:
The defendant initially raised a plea regarding the authorization of Dr. Cosima Paul to sign and verify the pleadings on behalf of the defendant. However, this plea was not pressed by the defendant's counsel during arguments, and therefore, it was not considered further by the court.
4. Claim of Interest at 18% per Annum on the Amount Due:
The plaintiff claimed interest at 18% per annum on the amount due, although the invoices only stipulated that interest would be charged on late payments without specifying the rate. The court noted that the defendant did not contest the rate of interest claimed by the plaintiff while seeking leave to defend. Consequently, the court upheld the plaintiff's claim for interest at 18% per annum.
Conclusion:
The court dismissed the defendant's application for leave to defend (IA No. 5607/2004), finding no friable issue that warranted a trial. The suit was decreed as prayed for, awarding the plaintiff the sum of EURO 56572 together with interest at 18% per annum and costs.
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2005 (1) TMI 718
Supreme Court case citation: 2005 (1) TMI 718 - SC Order. Justices: Mr. Y.K. Sabharwal and Mr. P.P. Naolekar. Appeal admitted.
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2005 (1) TMI 717
Issues Involved:
1. Addition of value of jewellery found during search
2. Legal plea raised for the first time before Tribunal
3. Upholding the addition of value of ornaments in hands of assessee-HUF
Issue 1: Addition of value of jewellery found during search
The case involved a reference under Section 256(2) of the IT Act, 1961 regarding the addition of Rs. 16,100 representing the value of jewellery found during a search conducted on 8th Oct, 1974, in the hands of the assessee-HUF. The Tribunal upheld the addition based on Section 132(4A) which was introduced later. The applicant argued that the seized ornaments were pawned items and did not belong to them, shifting the burden of proof to the Department. However, as the ornaments were seized from the applicant's premises without any proof of ownership, the onus lay on the applicant to prove otherwise. The court emphasized that the provisions of Section 132(4A) merely codified existing evidentiary principles. Referring to relevant case law, the court held that the burden of proof rested on the applicant to establish ownership, which they failed to do. Consequently, the court found no legal infirmity in the Tribunal's decision, ruling in favor of the Revenue.
Issue 2: Legal plea raised for the first time before Tribunal
Another issue raised was whether a legal plea regarding ownership, not presented before lower authorities, could be raised for the first time before the Tribunal. The applicant contended that the addition of Rs. 16,100 should not be confirmed as the seized ornaments were not theirs. The Department argued that the onus was on the applicant to prove ownership, which they failed to do. The court held that the applicant's failure to provide evidence of ownership, combined with the presumption that goods found in one's possession belong to them, supported the Tribunal's decision to uphold the addition. The court found no merit in the applicant's argument and ruled in favor of the Revenue.
Issue 3: Upholding the addition of value of ornaments in hands of assessee-HUF
The final issue pertained to whether there was sufficient material before the Tribunal to uphold the addition of Rs. 16,100 on account of the value of ornaments in the hands of the assessee-HUF. The applicant claimed that the seized ornaments were pawned items and did not belong to them. However, as the ornaments were seized from their premises without any proof of ownership, the burden of proof lay on the applicant. The court reiterated that the general rule is that goods found in one's possession are presumed to belong to them unless proven otherwise. Citing relevant case law, the court emphasized the applicant's failure to establish ownership, leading to the affirmation of the addition. Ultimately, the court found no legal flaw in the Tribunal's decision and ruled in favor of the Revenue.
This detailed analysis of the judgment addresses the issues raised in the case, highlighting the legal arguments, burden of proof, evidentiary principles, and relevant case law considered by the court in reaching its decision.
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2005 (1) TMI 716
The Bombay High Court admitted the appeal to consider whether underwriting commission and selling commission paid to certain managers amounted to fees for technical services under the DTAA with the UK. The Tribunal's decision was challenged based on this question of law.
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2005 (1) TMI 715
Issues:
Appeal against order of Customs, Excise and Service Tax Appellate Tribunal - Delay in filing appeal - Rejection of writ petitions by Single Judge.
Analysis:
1. The case involved appeals against an order passed by the Customs, Excise and Service Tax Appellate Tribunal, Bangalore, rejecting the appellant firm's appeal due to a delay of nearly 7 months and 10 days in filing the appeal. The Tribunal refused to condone the delay, leading to the rejection of the appeal. The appellant then filed writ petitions before the High Court challenging the rejection.
2. The Deputy Commissioner of Central Excise had issued a show cause notice to the appellant firm, directing it to explain why an excess amount should not be added to the sale price of goods manufactured by them. The Deputy Commissioner also highlighted various omissions by the firm. Despite the firm's detailed reply denying the allegations, the Deputy Commissioner confirmed the proposal, leading to an appeal before the Commissioner of Customs, Central Excise (Appeals).
3. The first appellate authority directed the appellant to make a pre-deposit to entertain the appeal. After the appellant failed to comply fully with the pre-deposit order, the appeal was rejected for non-compliance. Subsequently, the appellant approached the Customs, Excise and Service Tax Appellate Tribunal, which also rejected the appeal due to the delay in filing and the insufficient cause shown to condone the delay.
4. The High Court, in its judgment, upheld the decision of the learned Single Judge who rejected the writ petitions. The Single Judge observed that discretionary orders by judicial authorities and Tribunals are not interfered with by a Writ Court unless they are arbitrary or capricious. The Single Judge found the reasons for rejecting the appeal by the Appellate Tribunal to be satisfactory and not arbitrary or capricious, leading to the rejection of the writ petitions by the High Court.
5. The High Court, after careful perusal of the Single Judge's order, concurred with the reasoning and findings, concluding that there was no error warranting interference in the appeals. Therefore, the High Court rejected the appeals filed by the appellant firm, affirming the decision of the Single Judge and upholding the rejection of the writ petitions.
In conclusion, the High Court upheld the rejection of the appeals against the order of the Customs, Excise and Service Tax Appellate Tribunal, emphasizing the importance of showing sufficient cause for condoning delays in filing appeals and the limited scope of interference by Writ Courts in discretionary orders of judicial authorities and Tribunals.
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