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1999 (12) TMI 869
Issues:
1. Whether Central and State subsidies should be reduced from the cost of assets for depreciation calculation.
2. Whether commission and brokerage paid to indentors should be disallowed under section 37(3A) of the Income-tax Act.
Analysis:
*Issue 1:*
The case involved a limited company receiving Central and State subsidies. The Assessing Officer deducted a balance amount from the cost of assets for depreciation, which was challenged by the assessee. The Commissioner of Income-tax (Appeals) ruled in favor of the assessee, and the Tribunal upheld this decision based on precedent. The Tribunal cited a previous decision of the court to support its ruling. The Supreme Court judgment in the case of CIT v. P. J. Chemicals Ltd. clarified that government subsidies are not to be deducted from the 'actual cost' for depreciation calculation. Consequently, the Tribunal's decision favoring the assessee was upheld.
*Issue 2:*
Regarding the disallowance of commission and brokerage paid to indentors under section 37(3A) of the Income-tax Act, the Assessing Officer viewed it as sales promotion expenses. However, the Commissioner of Income-tax (Appeals) disagreed and deleted the addition. The Tribunal, relying on the Calcutta High Court decision, supported the Commissioner's decision. Various High Courts' judgments were referenced to establish that commission and brokerage payments do not fall under sales promotion expenses and should not be disallowed under section 37(3A). The Tribunal's decision was challenged, arguing that the payments were not related to sales promotion activities. The court concluded that the Tribunal erred in upholding the deletion of commission and brokerage payments from disallowance under section 37(3A).
In conclusion, the Tribunal's decision on the first issue was upheld in favor of the assessee based on the Supreme Court precedent. However, the Tribunal's decision on the second issue was overturned, stating that commission and brokerage payments should not have been excluded from disallowance under section 37(3A).
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1999 (12) TMI 868
Issues Involved:
1. Whether a Sub-Inspector in the BSF, upon being transferred and permanently absorbed in the Delhi Police, is entitled to count his substantive service in the BSF for seniority in the Delhi Police.
2. The constitutional validity of Office Memorandum No. 200020/7/80-Estt. (D) dated 29.5.1986.
3. Judicial propriety and the rule of precedent in decisions by coordinate benches of the tribunal.
Summary:
Issue 1: Seniority of Sub-Inspectors Transferred from BSF to Delhi Police
The main question was whether a Sub-Inspector in the BSF, when transferred on deputation and permanently absorbed in the Delhi Police, could count his substantive service in the BSF for seniority in the Delhi Police. The Court noted that the Delhi Police urgently needed additional personnel, leading to the deputation and subsequent absorption of BSF Sub-Inspectors. The Delhi Police (Appointment and Recruitment) Rules, 1980, particularly Rule 5(h), facilitated such deputations. The Court held that the appellants were entitled to count their service in the BSF for seniority in the Delhi Police, emphasizing that equivalency of posts should not be judged solely by pay scales but also by duties, responsibilities, and qualifications. The Court cited previous judgments, including Madhavan's case, to support this view.
Issue 2: Constitutional Validity of the Office Memorandum
The constitutional validity of Office Memorandum No. 200020/7/80-Estt. (D) dated 29.5.1986 was challenged. The Court found that the Memorandum had not been made public or known to the concerned parties. The Memorandum's clause "whichever is later" was deemed unreasonable and violative of Articles 14 and 16 of the Constitution. The Court struck down these words, thereby allowing the appellants to count their service from the date of their regular appointment in the BSF for seniority in the Delhi Police.
Issue 3: Judicial Propriety and Rule of Precedent
The Court expressed serious dissatisfaction with the manner in which a coordinate bench of the tribunal overruled an earlier judgment of another coordinate bench, violating principles of judicial discipline. The latter bench should have referred the matter to a larger bench instead of taking a contrary view. The Court emphasized that consistency in the interpretation of law is crucial for public confidence in the judicial system.
Conclusion:
The civil appeals and W.P. (C) No. 191/99 were allowed, restoring the appellants' right to count their service in the BSF for seniority in the Delhi Police. The Court also dismissed T.C. (C) No. 56/99 and ordered the Delhi Administration to pay costs in all matters. The Court criticized the respondents' excessive involvement in litigation, suggesting that the State should act impartially and not take sides in inter-se disputes among its employees.
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1999 (12) TMI 867
Issues Involved:
1. Addition of Rs. 62,500 to professional receipts.
2. Estimated disallowance of Rs. 20,000 from salary and bonus expenses.
3. Disallowance of Rs. 1,19,952 out of interest claimed.
4. Taxation of "Peak" credits in 110 bank accounts.
5. Additional grounds on "Peak" deduction from previous assessment year.
6. Charging of interest u/s 234A and 234B.
7. Department's appeal on reliefs allowed by CIT(A).
Summary:
1. Addition of Rs. 62,500 to Professional Receipts:
The CIT(A) sustained the addition of Rs. 62,500 made by the AC by estimating the professional receipts at Rs. 5,00,000 against the admitted receipts of Rs. 4,37,500. The assessee contended that the monthwise details of professional income were furnished, and no understatement was noticed by the AC. The Tribunal set aside the assessment on this issue for fresh consideration.
2. Estimated Disallowance of Rs. 20,000 from Salary and Bonus Expenses:
The CIT(A) confirmed the estimated disallowance of Rs. 20,000 made by the AC out of expenses incurred on salary and bonus. The assessee argued that higher expenditure was incurred due to increased reliance on assistants. The Tribunal set aside the assessment on this issue for fresh consideration.
3. Disallowance of Rs. 1,19,952 out of Interest Claimed:
The CIT(A) sustained the disallowance of Rs. 1,19,952 out of interest claimed by the assessee on the ground that the relevant borrowals were from concerns whose names appeared in Annexure A-3. The Tribunal set aside the assessment on this issue for fresh consideration, subject to the AO's findings on the genuineness of the concerns.
4. Taxation of "Peak" Credits in 110 Bank Accounts:
The CIT(A) upheld the AO's decision to bring to tax the "Peak" of the credits appearing in 110 bank accounts, reducing the addition from Rs. 12,86,70,053 to Rs. 3,05,40,285. The Tribunal held that the statement recorded from the assessee on 20th Dec., 1991, was valid under s. 132(4) and had evidentiary value. The Tribunal directed that the peak be worked out by arranging the transactions datewise and reducing the peak of the earlier year from the peak of the current year. The assessment was set aside for verification of the genuineness of the assessee's retraction and fresh consideration.
5. Additional Grounds on "Peak" Deduction from Previous Assessment Year:
The assessee raised additional grounds that the "Peak" included in the IT assessment for the asst. yr. 1990-91 should be deducted from the "Peak" arrived at for the asst. yr. 1991-92. The Tribunal accepted this contention and directed the AO to consider it while working out the peak.
6. Charging of Interest u/s 234A and 234B:
The assessee contended that interest u/s 234A should not be charged as the return was voluntarily filed, and no notice under s. 142(1) was served. The Tribunal rejected this contention, holding that interest is compensatory and applicable for delayed filing of returns. The Tribunal also rejected the contention that interest u/s 234B should be charged only on the returned income, not the assessed income.
7. Department's Appeal on Reliefs Allowed by CIT(A):
The Department appealed against the relief of Rs. 1,70,000 and Rs. 4,00,000 allowed by the CIT(A) without verifying facts, deletion of Rs. 20 lakhs addition, and setting aside the addition of Rs. 12,86,70,053. The Tribunal restored the addition of Rs. 5,70,000 for unproved credits, set aside the deletion of Rs. 20 lakhs being the alleged advance to Shri Bhupen Chedda, and directed fresh consideration of the addition of Rs. 3,05,40,285 based on the Tribunal's directions in the assessee's appeal.
Conclusion:
The Tribunal set aside the assessment on the main issues for fresh consideration by the AO, directed verification of the genuineness of the concerns, and upheld the validity of the statement recorded under s. 132(4). The appeals by both the assessee and the Department were partly allowed.
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1999 (12) TMI 866
Issues Involved:
1. Whether the hire charges paid by the assessee for storage tanks are subject to tax deduction at source (TDS) under Section 194-I or Section 194C of the Income-tax Act.
2. Whether the storage tanks can be classified as "buildings" under Section 194-I.
3. Applicability of interest under Section 201(1A) and the assessee being considered as an assessee in default under Section 201(1).
Issue-wise Detailed Analysis:
1. Applicability of TDS under Section 194-I or Section 194C:
The primary issue is whether the hire charges paid by the assessee for storage tanks should be subjected to TDS under Section 194-I at 20% or under Section 194C at 2%. The assessee argued that the payments were for storage services and thus fell under Section 194C, while the Assessing Officer contended that these payments were for rent, falling under Section 194-I.
2. Classification of Storage Tanks as "Buildings":
The assessee contended that the storage tanks, being metallic cylindrical vertical structures, could not be classified as "buildings" within the meaning of Section 194-I. The CIT(A) had upheld the Assessing Officer's view that these tanks should be treated as buildings, relying on the Supreme Court's decision in Municipal Corporation of Greater Bombay v. Indian Oil Corporation Ltd. The CIT(A) concluded that the storage tanks were "structures" or "things attached to the land" and thus fell within the ambit of Section 194-I.
The Tribunal, however, found merit in the assessee's argument, citing the Bombay High Court's decision in Bharat Petroleum Corporation v. Municipal Corporation of Greater Bombay, which held that storage tanks could not be equated with buildings as they did not involve occupancy in the manner understood for buildings. The Tribunal also noted that the provisions of Section 194-I are not pari materia with Sections 3(r) and 3(s) of the Bombay Municipal Corporation Act, which were considered by the Supreme Court.
3. Applicability of Interest and Default Status under Sections 201(1A) and 201(1):
The assessee argued that even if there was a short deduction of tax, the provisions of Sections 201 and 201(1A) would not apply, as there was no failure to deduct tax at source. They cited the Andhra Pradesh High Court's decision in P.V. Rajagopal v. Union of India, which held that short deduction does not attract the provisions of Section 201 or 201(1A).
The Tribunal agreed with the assessee, noting that the storage tanks should be regarded as "plant" rather than "building" and thus not subject to TDS under Section 194-I. Consequently, the interest levied under Section 201(1A) was deleted, and the assessee was not considered in default under Section 201.
Conclusion:
The Tribunal concluded that the payments for storage tanks were not liable for TDS under Section 194-I of the Income-tax Act. The orders of the revenue authorities were set aside, and the interest levied under Section 201(1A) was deleted. The assessee was not considered an assessee in default under Section 201. The appeals were allowed, and the other grounds raised by the assessee, for which no arguments were advanced, were dismissed.
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1999 (12) TMI 865
Issues Involved:
1. Delay and Laches in Filing the Writ Petition
2. Equitable Principles and Legal Malice
3. Acceptance of Award and Execution Proceedings
4. Jurisdiction under Article 226 of the Constitution
Summary:
1. Delay and Laches in Filing the Writ Petition:
The Supreme Court addressed the issue of delay in filing the writ petition. The Municipal Corporation argued that the writ petition was filed 21 years after the notification and 16 years after the award and possession. The High Court had relied on Abhyankar's case, stating that delay does not automatically bar a petition if there is a reasonable explanation. However, the Supreme Court found that the High Court misinterpreted the facts and that the plea of limitation, being a mixed question of law and fact, was validly raised during the hearing.
2. Equitable Principles and Legal Malice:
The High Court had granted relief based on equitable principles, noting that the Municipal Corporation failed to utilize the land for the public purpose for which it was acquired and attempted to change the public purpose. The Supreme Court disagreed, emphasizing that the equitable doctrine "delay defects equity" applies, and discretionary relief under Article 226 should favor vigilant litigants. The High Court's reliance on equitable principles was found to be misplaced.
3. Acceptance of Award and Execution Proceedings:
The Supreme Court noted that the respondents had applied for the execution of the award in 1995, which was not mentioned in the writ petition. This indicated acceptance of the award, contradicting the challenge to the acquisition notice. The Court highlighted that after the award is passed, no writ petition can challenge the acquisition notice, referencing the consistent view in cases like C. Padma & Ors. v. Dy Secretary to the Govt of T.N. & Ors and Municipal Corporation of Greater Bombay v. Industrial Development Investment Co. Pvt. Ltd.
4. Jurisdiction under Article 226 of the Constitution:
The Supreme Court reiterated that while Article 226 provides extraordinary jurisdiction to mitigate sufferings, it is based on equitable principles. The High Court's order to restore possession and cancel the notification was found erroneous. The Court emphasized that the land had been reserved for public purposes since 1952, and the notification for acquisition was justified. The appeal was allowed, the writ petition dismissed, and the direction for compensation withdrawal was upheld.
Conclusion:
The Supreme Court allowed the appeal, dismissed the writ petition, and emphasized the importance of timely action and the acceptance of awards in land acquisition cases. The High Court's reliance on equitable principles and delay was found to be misplaced.
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1999 (12) TMI 864
Issues:
Claim for exemption from sales tax based on missing Form 3-C (2) | Rejection of claim by first appellate authority and Tribunal | Non-submission of account of use of forms | Misuse of Form 3-C (2) by purchasing dealer | Ignoring well-settled legal principles | Need for departmental action against misuse of forms
Analysis:
The judgment revolves around the rejection of a dealer's claim for exemption from sales tax due to missing Form 3-C (2) issued by purchasing dealers. The assessee's claim for exemption on sales worth &8377; 1,05,97,255/- was not accepted, leading to a tax liability of &8377; 12,71,395/-. The dealer later produced the required forms during the first appeal, but the benefit was refused due to the purchasing dealer's canceled registration and lack of details on form usage.
The second appeal before the Tribunal was also dismissed, prompting the revisionist to challenge the decision. The revisionist argued that the forms were issued before the purchasing dealer's registration cancellation and that non-submission of usage account should not invalidate the claim. The Standing Counsel, however, contended that the forms might have been obtained subsequently.
Upon review, the court found that the forms were issued to the revisionist before the cancellation of the purchasing dealer's registration. The court criticized the lower authorities for rejecting the claim based on missing usage accounts, emphasizing that the dealer's lack of control over subsequent misuse should not penalize the revisionist. The court highlighted the need for proper departmental action against form misuse.
The court allowed the revision, setting aside the Tribunal's order and remanding the matter for reconsideration. Costs were imposed, with the Trade Tax Commissioner authorized to recover them from the authorities failing to apply established legal principles. Recommendations were made for amending rules to prevent form misuse, including mandatory completion of form details by assessing authorities and setting expiry dates for form validity unless revalidated.
In conclusion, the judgment underscores the importance of adhering to legal principles in tax assessments, addressing form misuse issues, and ensuring fair treatment for dealers in sales tax matters.
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1999 (12) TMI 863
Issues Involved:
1. Whether Rule 7(A) and the earlier Rule 7 are violative of Section 2(b) of the Act.
2. Whether the aforesaid Rules are harsh and unconscionable.
3. Whether the consequential directions issued by the High Court are justified in law.
Summary:
Issue 1: Whether Rule 7(A) and the earlier Rule 7 are violative of Section 2(b) of the Act.
The Supreme Court examined the relevant statutory provisions and the scheme of the impugned Rules. Section 2(b) defines a "member" and includes the requirement of paying a subscription. Rule 7(A) stipulates that an ordinary member who fails to pay the subscription by the end of March will automatically cease to be a member. The Court found that Rule 7(A) aligns with Section 2(b) because it ensures that a member must pay the subscription to remain on the roll for the year in question. The Court concluded that Rule 7(A) is not violative of Section 2(b) and runs parallel to it.
Issue 2: Whether the aforesaid Rules are harsh and unconscionable.
The Court considered whether Rule 7(A) is harsh and arbitrary. It noted that the Rule provides a clear timeframe for payment and that members are aware of the consequences of non-payment. The Court found that the Rule is not harsh as it operates within the knowledge of the members. However, the Court also recognized that in cases where a member has a valid reason for non-payment or disputes the non-payment, the society must consider such defenses. The Rule was read down to allow members to present their case before the society within the concerned year, thus ensuring it is not unreasonable or arbitrary.
Issue 3: Whether the consequential directions issued by the High Court are justified in law.
Given the findings on the first two issues, the Supreme Court held that the consequential directions issued by the High Court cannot be sustained. The impugned judgment of the High Court was set aside, and the writ petitions filed by the respondents were dismissed subject to the reading down of Rule 7(A). The appellant-society was directed to comply with Rule 7(A) in future transactions, considering the reading down of the Rule.
Conclusion:
The appeals were allowed, the interim order was vacated, and the impugned judgment of the High Court was set aside. The writ petitions stood dismissed with no order as to costs. The appellant-society must comply with Rule 7(A) subject to the reading down as per the Supreme Court's judgment.
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1999 (12) TMI 862
Issues Involved:
1. Eligibility for Deduction u/s 80-O.
2. Application of Mind by the Assessing Officer.
3. Validity of Proceedings u/s 263.
Summary:
1. Eligibility for Deduction u/s 80-O:
The assessee, engaged in integrated air and ground transportation, claimed deductions u/s 80-O for the assessment years 1994-95 and 1995-96. The CIT scrutinized the records and found that the Assessing Officer (AO) had allowed the deduction without verifying whether the services rendered were technical or professional services to a foreign enterprise outside India. The CIT concluded that the services were mutual and not unilateral, thus not qualifying for deduction u/s 80-O. The CIT directed the AO to re-examine the eligibility for deduction u/s 80-O.
2. Application of Mind by the Assessing Officer:
The assessee argued that the AO had applied his mind while allowing the deduction u/s 80-O, as the claim was examined by three different AOs over the years. Detailed submissions, agreements, and notes on eligibility were provided during the assessment proceedings. The AO considered these materials and allowed the deduction after due deliberation. The Tribunal found that the AO had indeed applied his mind and the assessments were made with full consideration of the facts and law.
3. Validity of Proceedings u/s 263:
The CIT invoked section 263, stating non-application of mind by the AO. The Tribunal held that the AO had duly examined the claim, and the CIT's order was based on a different interpretation of the same facts. The Tribunal emphasized that section 263 does not permit substitution of the CIT's opinion for that of the AO unless the order is erroneous and prejudicial to the revenue. The Tribunal quashed the CIT's order, stating that the conditions for invoking section 263 were not met.
Conclusion:
The Tribunal concluded that the AO had applied his mind and the assessments were not erroneous. The CIT's invocation of section 263 was not justified, and the order was quashed. The appeals were allowed.
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1999 (12) TMI 861
Issues:
Assessment of capital gains in respect of the sale of a bungalow at Bangalore for the assessment year 1989-90.
Analysis:
The dispute centered around whether the property was sold in the relevant year and if the possession was handed over within the meaning of section 53A of the Transfer of Property Act. The agreement specified a phased payment schedule for the sale consideration, with a substantial amount received in the previous year. The assessee granted a general power of attorney to the purchasers for obtaining licenses and allowed them to advertise for sale of proposed flats. The absence of a possession clause in the agreement required consideration of circumstantial evidence. The department argued that possession was handed over based on the power of attorney and demolition of the bungalow before the end of the previous year. The assessee relied on letters indicating willingness to hand over possession in the subsequent year. The Tribunal considered the totality of facts and circumstances to conclude that possession was handed over to the vendees before 31st March 1989.
The Tribunal noted that the vendees were authorized to apply for permissions on behalf of the vendor and that the demolition of the bungalow supported the revenue's claim of possession transfer. The exchange of letters was considered an afterthought as possession had been taken over earlier. The completion of formalities and execution of the power of attorney favored the revenue's position. The agreement to execute sale deeds in the builder's name for stamp duty savings did not negate possession transfer. The Tribunal upheld the revenue's assessment of capital gains under the Explanation to section 2(47) of the Income-tax Act, 1961, dismissing the appeal as no other grounds were argued.
In conclusion, the Tribunal's decision affirmed the revenue's assessment of capital gains, emphasizing the significance of possession transfer and considering the totality of facts and circumstances in determining the outcome of the case.
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1999 (12) TMI 860
Issues:
Challenge to detention order based on non-disposal of representation made by detenu's wife to the central government.
Analysis:
The writ petition filed under Article 32 challenges the detention order passed under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974. The challenge is primarily based on the non-disposal of a representation made by the detenu's wife to the central government. The detenu's wife claimed to have sent the representation by Speed Post to the Secretary to the central government, Ministry of Finance, New Delhi, on 8/6/1999. The central government initially denied receiving the representation, leading to the court directing the petitioner to file an additional affidavit with supporting documents. The documents included a Consumer Receipt showing the representation sent by Speed Post on 8/6/1999 and a letter from the Speed Post Centre confirming delivery to the addressee on 9/6/1999.
The central government, in its counter affidavit, maintained that the representation was not received in the central Registry of the Ministry of Finance, Department of Revenue. However, the detenu's wife's affidavit, supported by documentary evidence and legal provisions, countered this denial. The detenu's wife's submission and the provisions of Section 27 of the General Clauses Act create a presumption that the representation was received by the addressee, especially since the postal authorities confirmed delivery to the addressee on 9/6/1999. The court emphasized that a mere denial by the Union of India, without substantial evidence to the contrary, cannot be accepted.
The court highlighted the violation of the detenu's right guaranteed under Article 22(5) of the Constitution due to the non-disposal of the representation by the government. Consequently, the continued detention of the petitioner was deemed unlawful. As a result, the writ petition was allowed, and the order of detention dated 29/4/1999 was set aside. The court directed the immediate release of the petitioner unless detention was necessary in connection with another case.
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1999 (12) TMI 859
Issues Involved:
1. Whether the impugned termination order of the respondent-workman dated 29.4.1966 was violative of Rule 5 of the Rules or for that matter Rule 5 of the latter Rules.
2. If the decision on the first point is in negative and in favor of the appellant-Corporation, whether the impugned order of termination can be said to have violated Section 25-F of the I.D. Act and consequently the final decision rendered by the Division Bench can be sustained on that ground.
3. What appropriate final order should be passed.
Issue-Wise Detailed Analysis:
Point No. 1:
The appellant-Corporation argued that the Division Bench erroneously relied on the judgment in Senior Superintendent, R.M.S., Cochin & Anr. v. K.V. Gopinath, Sorter, which was overruled by Union of India and Ors. v. Arun Kumar Roy. The termination on 29.4.1966 was governed by Rule 5 of the Central Civil Services (Temporary Service) Rules, 1965, not the 1949 Rules. The 1965 Rules, amended effective 1.5.1965, did not require simultaneous payment of compensation for termination, unlike the 1949 Rules. Therefore, the Division Bench's reliance on the 1949 Rules was misplaced. The Court concluded that the termination was not violative of the amended Rule 5 of the 1965 Rules, and the first point was held in favor of the appellant-Corporation.
Point No. 2:
Despite the first point being resolved in favor of the appellant-Corporation, the Court considered whether the termination violated Section 25-F of the Industrial Disputes Act (I.D. Act). The respondent-workman had completed more than 240 days of continuous service, making Section 25-F applicable. The termination without compliance with Section 25-F was null and void. The Labour Court's finding that Section 25-F did not apply because the termination was not due to excess staff was incorrect, given the later decisions of the Supreme Court. The Court held that the termination was indeed violative of Section 25-F, and the second point was decided in favor of the respondent-workman.
Appropriate Final Order:
Given the violation of Section 25-F, the respondent-workman was entitled to reinstatement with continuity of service. However, due to the prolonged litigation of over 33 years, the Court found it inappropriate to grant full back-wages. The Court ordered:
1. The impugned order of the Division Bench, insofar as it held the termination violative of Rule 5, was set aside.
2. The final order of reinstatement with continuity of service was upheld, based on the violation of Section 25-F.
3. The respondent-workman was entitled to 50% back-wages from the date of termination until reinstatement, along with all other consequential benefits.
The appellant-Corporation was directed to reinstate the respondent-workman within eight weeks and pay the 50% back-wages within that period. The appeal was allowed with no order as to costs.
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1999 (12) TMI 858
... ...
... ... ..... ellant. We find no merit in the appeals and they are dismissed. No order as to costs.
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1999 (12) TMI 857
Issues Involved:
1. Authority of Sub-Registrar to make a reference u/s 47-A(2) of the Stamp Act.
2. Classification of plant and machinery as immovable property.
3. Whether the plant and machinery were transferred by the conveyance deed dated 9.6.1994.
4. Correctness of the valuation of the plant and machinery for stamp duty purposes.
Summary:
1. Authority of Sub-Registrar to make a reference u/s 47-A(2) of the Stamp Act:
The appellant challenged the authority of the Sub-Registrar to refer the document to the Collector, arguing there was no material to believe that the market value of the property was not truly set forth. The High Court rejected this contention, and no arguments were advanced on this point before the Supreme Court.
2. Classification of plant and machinery as immovable property:
The High Court concluded that the plant and machinery were immovable properties as they were permanently embedded in the earth with the intention of running the fertilizer factory. The Supreme Court agreed, stating that the intention of the parties and the nature of the machinery indicated that they were permanently fixed to the ground and not intended for removal or sale as scrap. The Court referenced the case of Reynolds v. Ashby & Son and Official Liquidator v. Sri Krishna Deo & Ors. to support this conclusion.
3. Whether the plant and machinery were transferred by the conveyance deed dated 9.6.1994:
The Supreme Court examined the intention of the parties and the contents of the agreement dated 11.11.1993, which indicated that the entire fertilizer business, including plant and machinery, was to be transferred. The Court found that the conveyance deed dated 9.6.1994 did indeed transfer the title of the plant and machinery along with the land. The Court noted that the appellant's attempt to separate the transfer of machinery from the land was unconvincing and that the recitals in the conveyance deed and the agreement supported the transfer of the entire fertilizer business.
4. Correctness of the valuation of the plant and machinery for stamp duty purposes:
The High Court noted that the valuation of the plant and machinery was not seriously challenged by the appellant's counsel. The Supreme Court reviewed the valuation process and found it to be based on relevant materials and documents produced by the appellant. The Court held that the method adopted by the authorities for valuation was appropriate and that there was no basis to interfere with the finding of fact regarding the valuation. Consequently, the Supreme Court dismissed the appeal with costs.
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1999 (12) TMI 856
Issues:
1. Compliance with Section 50 of the Narcotic Drugs and Psychotropic Substances Act.
2. Compliance with Section 55 of the Act and the establishment of the identity of seized articles.
3. Preparation of the test memo at the time of recovery of contraband.
4. Voluntariness of the confessional statement made by the appellant.
Issue 1: Compliance with Section 50 of the Narcotic Drugs and Psychotropic Substances Act
The appellant contended that the recovery and seizure of the contraband should be regarded as illegal due to non-compliance with Section 50 of the Act. However, the court rejected this contention, stating that the mandatory requirements of Section 50 apply when a person is to be searched, not when contraband is recovered from personal baggage. The court cited a relevant case law to support this interpretation.
Issue 2: Compliance with Section 55 of the Act and identity of seized articles
The prosecution relied on the evidence of customs officials and witnesses to establish the identity of the seized heroin. The appellant's luggage was searched in her presence, and the contraband was recovered in the presence of witnesses and officials. Representative samples were sealed and deposited in the Customs Godown. The court found that the prosecution had sufficiently established the identity of the seized articles and complied with Section 55 of the Act.
Issue 3: Preparation of the test memo at the time of recovery
The defense argued that the delayed preparation of the test memo raised doubts about possible tampering with the samples. However, the court found that the paper slips attached to the sealed samples were intact, indicating no tampering. The court concluded that the prosecution adequately explained the delay in preparing the test memo and ruled out the possibility of tampering with the samples.
Issue 4: Voluntariness of the confessional statement
The appellant claimed that the confessional statement was obtained by force. However, the court noted that the statement was made voluntarily and in the appellant's handwriting. The appellant admitted in the statement that the contraband was recovered from her possession. The court rejected the appellant's claim of forceful extraction of the statement, emphasizing that no complaints were made against the customs officers until much later. The court relied on the confessional statement and other evidence to confirm the appellant's conviction and sentence.
In conclusion, the court dismissed the appeal and confirmed the appellant's conviction and sentence based on the evidence presented, compliance with legal provisions, and the voluntariness of the confessional statement.
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1999 (12) TMI 855
Issues Involved:
1. Entitlement of Sub-Inspectors transferred from BSF to Delhi Police to count their previous service for seniority.
2. Judicial impropriety by a coordinate Bench of the tribunal.
3. Validity of the Office Memorandum dated 29.5.1986.
Summary:
1. Entitlement of Sub-Inspectors transferred from BSF to Delhi Police to count their previous service for seniority:
The core issue was whether Sub-Inspectors appointed in the BSF, when transferred on deputation to Delhi Police and subsequently absorbed, could count their substantive service in the BSF for seniority in the Delhi Police. The Court held that these transferred officials should be permitted to count their service in the parent department. This decision was grounded on the principles laid down in previous judgments, including *Madhavan's case*, which stated that deputation is akin to a transfer and the period of service in the original post should be respected and counted for seniority in the transferred post.
2. Judicial impropriety by a coordinate Bench of the tribunal:
The Court expressed serious dissatisfaction with the manner in which a coordinate Bench of the tribunal overruled an earlier judgment of another coordinate Bench. This was deemed a violation of judicial discipline and the rule of precedent. The Court emphasized that if a Bench disagrees with an earlier decision, it should refer the matter to a larger Bench instead of taking a contrary view.
3. Validity of the Office Memorandum dated 29.5.1986:
The constitutional validity of the Office Memorandum, which stipulated that seniority should be counted from the date of absorption, was challenged. The Court found the Memorandum to be inconsistent and partially violative of Articles 14 and 16 of the Constitution. Specifically, the words "whichever is later" in the Memorandum were struck down as they arbitrarily took away the right of the deputationists to count their previous service. The Court restored the right of the appellants to count their service from the date of their regular appointment in the BSF for seniority in the Delhi Police.
Conclusion:
The civil appeals and W.P. (C) No. 191/99 were allowed, and the Office Memorandum was partially quashed. The Court criticized the respondent's excessive involvement in litigation, which was seen as unnecessary and wasteful. The Delhi Administration was ordered to pay costs in all the matters.
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1999 (12) TMI 854
Issues Involved:
1. Property at 22, Barakhamba Road and the Report of the Justice Bahari Committee on diversion of funds.
2. Property relating to Technology Parks Limited (TPL) at Vaishali, Ghaziabad.
3. Property relating to Technology Parks Limited (TPL) at Greater Noida.
4. Report of the Central Vigilance Committee pursuant to the order passed by the Supreme Court dated 13.11.2002.
Issue-wise Detailed Analysis:
1. Property at 22, Barakhamba Road and the Report of the Justice Bahari Committee on Diversion of Funds:
The Supreme Court reviewed the findings of the Justice Bahri Committee, which investigated the diversion of funds by Skipper Tower Pvt. Ltd. The project at 22, Barakhamba Road was initially launched by Skipper Sales Pvt. Ltd. in collaboration with the property owners. The Commission found that significant funds collected from prospective buyers were diverted to sister companies. The Commission noted that Skipper Sales Pvt. Ltd. and Skipper Tower Pvt. Ltd. were involved in multiple projects, including those at 5, Bhagwan Dass Road and 89, Nehru Place. The Commission found that Rs. 12,85,06,335/- was collected for booking spaces, while the actual construction cost up to the 12th floor was Rs. 5,97,02,963/-. The Commission concluded that the remaining funds were used to give loans to sister concerns. The objections raised by Tejwant Singh regarding the construction costs and receipts were found to be based on hypothetical figures and unreliable data. The Supreme Court accepted the detailed findings of the Justice Bahri Commission over the objections raised.
2. Property Relating to Technology Parks Limited (TPL) at Vaishali, Ghaziabad:
The Commission's report detailed the transactions involving plot Nos. 23 and 26 Vaishali Parks Apartment, Vaishali, Ghaziabad. The plots were initially allotted to M/s Kanchan Properties and M/s Charanjit Kochar, respectively, but were later transferred to TPL. The Commission found that the sanctioned area for construction was not fully utilized, and significant amounts were collected from purchasers. The Commission issued public notices and received claims from 619 claimants, with accepted claims totaling Rs. 5,62,76,875/-. The Supreme Court directed that Shikha Developers Ltd., which had taken over the project from TPL, should refund the deposited amounts with 8% interest. Shikha Developers Ltd. was required to file an undertaking, provide a bank guarantee, and ensure no sale of properties until full payment to claimants was made. The Court also appointed a senior judicial officer to scrutinize and disburse the claims from the surplus available from the sale of 3 Aurangzeb Road property.
3. Property Relating to Technology Parks Limited (TPL) at Greater Noida:
The Commission's report on the TPL project at Greater Noida was mentioned but not detailed in the judgment. The focus was primarily on the Vaishali, Ghaziabad project.
4. Report of the Central Vigilance Committee:
The judgment did not provide specific details regarding the Central Vigilance Committee's report. The primary focus was on the Justice Bahri Committee's findings and the TPL projects.
Conclusion:
The Supreme Court accepted the detailed findings of the Justice Bahri Commission regarding the diversion of funds in the Skipper Tower project. It directed Shikha Developers Ltd. to refund the amounts deposited by claimants in the TPL Vaishali project with interest and appointed a judicial officer to oversee the disbursement of claims. The judgment emphasized the need to prevent the miscarriage of justice and ensure that funds collected from the public were used appropriately.
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1999 (12) TMI 853
The High Court of Andhra Pradesh dismissed the petition regarding the classification of "Polythene bags" as "HDPE woven sacks" for tax purposes under entry 188 of the First Schedule. The Tribunal's decision was upheld, and the Tax Revision Case (T.R.C.) was dismissed.
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1999 (12) TMI 852
Issues:
Challenge of seizures of goods under West Bengal Taxation Tribunal Act, 1987 - Classification of di-calcium phosphate (DCP) as tax-free under Schedule I of West Bengal Sales Tax Act, 1994 - Validity of penalties imposed for non-production of valid way bills for imported goods.
Analysis:
1. The applicant challenged two seizures of goods under the West Bengal Taxation Tribunal Act, 1987, questioning whether di-calcium phosphate (DCP) falls under Serial Nos. 12 and 13 of Schedule I to the West Bengal Sales Tax Act, 1994, and is therefore tax-free. The applicant contended that DCP is a feed supplement for cattle and poultry, not a balanced feed itself, supported by legal precedents establishing that animal feed supplements are covered under the term "animal feed."
2. The respondent issued a circular stating that feed supplements, including DCP, are taxable goods distinct from balanced feed for cattle and poultry. The respondent argued that valid way bills were required for the importation of taxable goods, and the expired way bills indicated the applicant's awareness of the taxable nature of DCP. The respondent maintained that DCP is an input for balanced feed and not a balanced feed itself, necessitating the production of valid way bills.
3. The Tribunal analyzed the historical context of legislation and trade circulars related to balanced feed for cattle and poultry. The distinction between serial numbers in the 1941 Act and the 1994 Act was noted, emphasizing the absence of the term "commonly known as 'Mash'" in the latter. The Tribunal considered the applicant's reliance on legal precedents and distinguished cases to determine the taxability of DCP under the specific provisions of the 1994 Act.
4. The Tribunal dismissed the applicant's claim that DCP is tax-free under Schedule I of the 1994 Act, emphasizing the difference between feed supplements like DCP and balanced feed for cattle and poultry. The judgment highlighted that the legislative intent behind using the term "balanced feed" was significant, indicating a specific composition of nutrients and additives. The penalties imposed for non-production of valid way bills were upheld, concluding that DCP was taxable goods distinct from balanced feed as per the provisions of the 1994 Act.
5. The Tribunal dismissed the applications challenging the seizures and penalties, directing the adjustment of furnished securities against the imposed penalties. The judgment concluded the case, affirming the validity of the penalties and the taxable nature of DCP as distinct from balanced feed for cattle and poultry under Schedule I of the 1994 Act.
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1999 (12) TMI 851
Issues Involved:
1. Breach of second proviso of rule 25C of the Rajasthan Sales Tax Rules, 1955.
2. Levy of penalty and interest for technical breaches.
3. Interpretation of rule 25C and its provisos.
4. Applicability of precedent case law.
5. Nature of the provision (directory or mandatory).
Issue-wise Detailed Analysis:
1. Breach of Second Proviso of Rule 25C:
The assessee furnished a joint declaration in form ST 17 for multiple transactions amounting to Rs. 19,95,483.39 for resale within the State, which breached the second proviso of rule 25C. The proviso mandates that no declaration shall cover more than one transaction unless the total amount does not exceed Rs. 2 lacs within six months. The Board found this breach to be technical, as the essential conditions for exemption were fulfilled.
2. Levy of Penalty and Interest for Technical Breaches:
The assessing officer imposed a penalty equal to the tax amount along with interest, citing the delayed and joint declaration as breaches. The Deputy Commissioner (Appeals) and the Rajasthan Tax Board both concluded that the breach was technical and did not warrant a penalty, as there was no intention of tax evasion or avoidance. The penalty and additional tax were thus deleted.
3. Interpretation of Rule 25C and its Provisos:
The substantive provision of rule 25C requires a dealer to furnish a declaration in respect of each sale for claiming exemption or concessional rate. The second proviso allows a single declaration for multiple transactions if the total does not exceed Rs. 2 lacs within six months. The Board interpreted this rule as directory, emphasizing that the essential condition is obtaining and producing a declaration from the purchasing dealer.
4. Applicability of Precedent Case Law:
The Board relied on the division Bench decision in Commercial Taxes Officer, Pali v. Kanhayalal Mohanlal [1987] 64 STC 449, which held that procedural breaches of rule 25C are technical and do not justify penalties in the absence of mens rea. The Revenue argued that amendments to rule 25C rendered this precedent inapplicable, but the court found that the amendments did not alter the substantive requirements, and the precedent remained valid.
5. Nature of the Provision (Directory or Mandatory):
The court concluded that the provision is directory in nature. The substantive provision requires declarations for exemption, but the procedural aspects, such as the timing and manner of filing declarations, allow for flexibility. The existence of provisions allowing for late filing and alternative proof methods further supports the directory interpretation. The court upheld that technical breaches without intent to evade tax do not necessitate penalties.
Conclusion:
The revision petition by the Revenue was dismissed, affirming the Rajasthan Tax Board's decision that the breach of rule 25C was technical and did not warrant penalties. The court emphasized the directory nature of the procedural requirements and upheld the principle that penalties should not be imposed for technical breaches in the absence of tax evasion intent. The precedent case law remains applicable, reinforcing the directory interpretation of rule 25C.
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1999 (12) TMI 850
Issues:
Challenge of seizure of tanker of used lubricating oil and writ of mandamus for transportation permit.
Analysis:
The petitioner, a truck driver, was transporting a consignment of used lubricating oil from Calcutta to Jalandhar passing through Uttar Pradesh. At the entry check-post, a sample was taken and deemed not to be used lubricating oil. The authorities detained the goods and issued a seizure order. The petitioner's application under section 13-A(6) was pending when the writ petition was filed.
The counter-affidavit stated that the sample was examined and found to be refined petroleum products, not used lubricating oil. Documents accompanying the consignment indicated the sale from one party to another. The petitioner had applied for a trip sheet for transportation through Uttar Pradesh, as required by law.
The court noted that the goods were meant to pass through Uttar Pradesh to another state, using it only as a corridor. The relevant sections of the U.P. Trade Tax Act and Rules were cited to support the transportation of goods through the state.
The court found that the seizure was not justified as no tax was being avoided, and the goods were meant for transport through the state. The authorities should have mentioned their opinion on the quality of goods in the trip sheet and taken necessary steps to ensure proper transit.
Although the petitioner had a right to appeal under the Act, the court deemed the detention of the tanker unjustified and without jurisdiction. Therefore, the writ petition was allowed, quashing the seizure order and directing the release of the goods. The respondents were permitted to take samples and ensure the proper surrender of the trip sheet at the exit check-post.
In conclusion, the court found in favor of the petitioner, highlighting the importance of not unjustly detaining transport vehicles and exercising extraordinary jurisdiction under article 226 of the Constitution of India when necessary.
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