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2003 (3) TMI 744
Issues:
Challenge to order of assessment under Bihar Tax on Entry of Goods into Local Areas Act, 1993 - Contravention of Article 286(1)(a) of the Constitution of India - Availability of alternative remedy - Interpretation of entry tax on inter-State sale - Determination of entry tax on sale for consumption, use, or sale within local areas.
Analysis:
The petitioner contested an assessment order levying entry tax for the assessment years 1999-2000 and 2000-2001 under the Bihar Tax on Entry of Goods into Local Areas Act, 1993. The petitioner argued that the order contravened Article 286(1)(a) of the Constitution of India, asserting that entry tax on inter-State sale is not permissible. However, the Court noted that entry tax is a fee for the entry of goods into local areas for consumption, use, or sale therein, and is within the State Legislature's power under Entry 52 of List II of the Seventh Schedule of the Constitution. Therefore, the contention of violating Article 286(1)(a) in relation to entry tax was deemed unfounded, and the challenge on this ground was rejected.
The Court emphasized that not every sale in a local area is subject to entry tax under the Act. Sales must be intended for consumption, use, or sale within the local area or for consumption in other local areas to attract entry tax. Referring to a previous ruling, the Court highlighted that the authorities must determine whether the sale is connected to the specified purposes, and it is the dealer's responsibility to prove this to the assessing authority. This factual determination does not amount to a pure question of law warranting interference in writ jurisdiction, underscoring the importance of the authorities' competence to evaluate such matters based on established legal principles.
In conclusion, the Court directed the petitioner to pursue the remedy of appeal against the assessment order. If the authorities find that the sale does not align with the specified purposes, entry tax will not apply. The petitioner was granted a two-week window to file an appeal, with an assurance of condoning any delay due to the initial filing of the writ application. The Court instructed prompt disposal of any stay petition, emphasizing adherence to legal procedures. The writ application was disposed of with these directives, underscoring the significance of following the statutory appeal process in matters concerning entry tax assessments.
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2003 (3) TMI 743
Issues involved: The judgment revolves around the computation of interest charged u/s 234A of the Income-tax Act, 1961.
Comprehensive Details:
1. Consolidation of Appeals: All appeals by the assessees, revolving around identical issues, were consolidated and disposed of by a common order.
2. Grounds Not Pressed: Ground Nos. 1 to 7 were not pressed as per the decision in a previous case, resulting in their dismissal.
3. Key Issue: The only issue pressed pertains to the computation of interest charged u/s 234A of the Income-tax Act, 1961.
4. Assessee's Argument: Assessee's counsel conceded to the levy of interest but argued that it should be charged only for a period of two years, citing relevant precedents.
5. Department's Submission: The Departmental Representative argued that interest under section 234A is mandatory and that the assessee could have filed the return even beyond two years with a request for regularization.
6. Legal Precedents: Reference was made to legal principles such as "Lex non cogit ad impossibilia" in relation to the chargeability of interest under section 234C of the Act.
7. Interpretation of Filing Returns: The Tribunal's decision emphasized that filing a valid return is crucial, and laches on the part of the assessee cannot convert an invalid return into a valid one.
8. Section 234A Provisions: The section prescribes the computation of interest for defaults in filing returns after the due date, with specific guidelines on the period and amount for which interest is charged.
9. Amending Act, 1987: The amendment simplified the interest payment procedure for defaults in filing returns, emphasizing the importance of "regular assessment" in the computation of interest.
10. Assessees' Case: Since the assessees did not furnish the returns, they did not fall within the ambit of section 234A(1)(a) of the Act.
11. Application of Section 234A(1)(b): As the assessments under section 144 were not completed, section 234A(1)(b) could not be applied in the present case.
12. Computation of Interest: The section provides guidelines for the computation of interest based on the total income as determined under section 143 or regular assessment, reduced by advance tax paid or tax deducted at source.
13. Concession of Liability: The assessees' counsel conceded to the liability of paying interest u/s 234A, eliminating the need to further examine the levy of interest.
14. Judgment: The Assessing Officer was directed to recompute the interest considering the arguments presented, and the matter was restored for fresh computation after providing the assessees with an opportunity to be heard.
15. Outcome: The appeals of the assessees were partly allowed based on the reevaluation of the interest computation.
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2003 (3) TMI 742
The Supreme Court allowed the appeal, stating that the intermediate product is not excisable to duty as it is not marketable and lacks separation facility. The judgment is in line with the case of Collector of Central Excise, Baroda v. United Phosphorus Ltd. reported in 2000.
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2003 (3) TMI 741
The assessee imported a texturizing machine and took mod vat credit of the C.V.D. paid. The credit was denied on the ground that it was taken on a zerox copy of the duplicate bill of entry. The Appellate Tribunal ruled in favor of the assessee, stating that the denial of credit on technicalities was wrong. The appeal was allowed with consequential benefits.
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2003 (3) TMI 740
The Supreme Court of India ruled that free medical samples supplied to doctors are liable to excise duty. The valuation of physician samples should be based on a pro-rata basis according to the Central Excise Act and Valuation Rules. The matter was remitted back to the Tribunal for a decision on this valuation aspect. The appeals were disposed of with no order as to costs.
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2003 (3) TMI 739
Issues for Consideration
1. Whether a Matrimonial Court has the power to direct a party to undergo medical examination?
2. Whether passing of such an order would be in violation of Article 21 of the Constitution of India?
A. Power of the Court to Direct a Party to Undergo Medical Examination
The Supreme Court examined whether a Matrimonial Court can compel a party to undergo a medical examination. It was noted that for granting a decree of divorce u/s 13(1)(iii) of the Hindu Marriage Act, 1955, the petitioner must establish that the respondent's unsoundness of mind is incurable or that their mental disorder is such that the petitioner cannot reasonably be expected to live with them. Medical testimony, while not imperative, is of considerable assistance to the court. The court emphasized that the Hindu Marriage Act does not explicitly empower courts to compel medical examinations, but it does not preclude them from doing so either. The court can exercise its inherent powers u/s 151 of the Code of Civil Procedure to pass such orders for doing complete justice. The court also referenced various legal precedents and statutes from other jurisdictions, such as the Family Law Reform Act, 1987 in England, which explicitly provide for such powers.
B. Violation of Article 21 of the Constitution of India
The court addressed whether compelling a medical examination violates the right to personal liberty under Article 21 of the Constitution of India. It was observed that the right to privacy, while recognized under Article 21, is not absolute and must be balanced against compelling public interest. The court cited several cases, including M.P. Sharma v. Satish Chandra and Kharak Singh v. State of UP, to illustrate that the right to privacy can be subject to restrictions. The court also noted that in certain circumstances, such as determining the mental health of a party in matrimonial disputes, the court's directive for a medical examination does not violate Article 21. The court emphasized that such orders should not be issued for roving inquiries and must be based on a strong prima facie case with sufficient material.
Conclusion
1. A matrimonial court has the power to order a person to undergo a medical test.
2. Passing of such an order by the court would not be in violation of the right to personal liberty under Article 21 of the Indian Constitution.
3. The court should exercise such power if the applicant has a strong prima facie case and there is sufficient material before the court. If the respondent refuses to submit to the medical examination despite the court's order, the court is entitled to draw an adverse inference against them.
The appeal was dismissed, and the High Court's judgment was upheld. No order as to costs was made.
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2003 (3) TMI 738
Issues:
Assessment of capital gain on sale of immovable property based on disputed valuation report.
Analysis:
The assessed sold a property and declared a capital gain, but the assessing officer referred the case to the valuation officer under section 55A, who estimated the fair market value higher than the declared amount. The assessing officer recomputed the capital gain based on this valuation, which was contested by the assessed before the Commissioner (Appeals).
The Commissioner (Appeals) upheld the assessing officer's decision, leading the assessed to appeal before the Tribunal. The assessed argued that the full consideration received, not fair market value, should determine capital gain, citing the K.P. Varghese case. The departmental representative contended that a reference to determine fair market value is valid when sale consideration is doubted.
The Tribunal found that the assessing officer did not provide sufficient evidence to challenge the assessed's declared sale consideration. The Tribunal emphasized that section 48 of the Income Tax Act requires considering the full value of consideration, not fair market value, for capital gain computation. Referring to the K.P. Varghese and Shivakami Co. cases, the Tribunal highlighted that capital gain should only be taxed on actual gains received, not hypothetical gains.
The Tribunal concluded that the assessing officer failed to prove that the assessed understated the sale consideration, and the fair market value determined by the DVO cannot be considered as the full value of consideration. Relying on previous judgments, the Tribunal held that the revenue was unjustified in rejecting the assessed's claim, setting aside the Commissioner (Appeals) order and deleting the additional capital gain assessment.
In the final decision, the Tribunal allowed the appeal of the assessed, emphasizing the importance of proving actual sale consideration for accurate capital gain assessment.
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2003 (3) TMI 737
Issues Involved:
1. Legality of the acquisition of the school building by the State.
2. Allegation of "malice in law" in the acquisition process.
3. Public purpose and necessity of the acquisition.
4. Compliance with norms for setting up a school.
5. Impact of shifting the school to an alternative site.
Summary:
1. Legality of the Acquisition:
The State of Andhra Pradesh and its Authorities appealed against the Division Bench judgment of the High Court of Andhra Pradesh, which upheld the Single Judge's order quashing the acquisition of a school building. The High Court concluded that the acquisition was "malicious in law."
2. Allegation of "Malice in Law":
The High Court found that the State's action to acquire the school building was to circumvent eviction orders and was not bona fide. The Single Judge noted, "The exercise of power u/s 4(1) of the Act is not fair and it is only to scuttle a valid decree passed by the Civil Court which amounts to 'malice in law'." The Division Bench agreed, stating, "Acquisition suffers from lack of bona fides and is only an arbitrary act and an attempt to undo the consequences of the judicial decision."
3. Public Purpose and Necessity of the Acquisition:
The State argued that the acquisition was necessary to cater to the educational needs of children in the old city of Hyderabad. The Supreme Court noted that the school had been serving public interest since 1954 and that the State's "right of eminent domain" was not lost despite the eviction proceedings. The Court stated, "The order of eviction as well as the direction to vacate issued by the High Court only provide just, reasonable and proximate cause for resorting to acquisition."
4. Compliance with Norms for Setting Up a School:
The respondent argued that the school building did not conform to the norms fixed by the Urban Development Authorities. The Supreme Court dismissed this argument, stating, "Norms, if any, fixed by the Urban Development Authorities can be insisted upon for proposed new school buildings in the newly developed areas."
5. Impact of Shifting the School to an Alternative Site:
The respondent contended that since the school had already been shifted to an alternative site, the acquisition was unnecessary. The Supreme Court rejected this, noting that the building was in a dangerous condition and shifting was a temporary measure. The Court concluded, "On this ground, however, it cannot be held that the public purpose for acquiring the building no longer exists."
Conclusion:
The Supreme Court allowed the appeal, setting aside the impugned orders of the High Court of Andhra Pradesh. The Court held that the acquisition was justified and not malicious in law, emphasizing the State's right of eminent domain and the public purpose served by the school. The parties were directed to bear their own costs.
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2003 (3) TMI 736
Issues:
Challenge to levy of full costs of supervision and establishments of excise staff by a respondent company holding a D-2 licence for manufacturing Indian Made Foreign Liquor from rectified spirit.
Analysis:
The respondent company, holding a D-2 licence for manufacturing Indian Made Foreign Liquor, challenged the levy of full costs of supervision and establishment of excise staff at its factory premises. The High Court quashed the levy based on the decision in M/s Lilasons Breweries (Pvt.) Ltd.'s case, where Rule 22 was held ultra vires by the Supreme Court. The appellant challenged this decision, contending that D-2 licences were issued under different rules, not Rule 22 of the Brewery Rules. The relevant rules for granting D-2 licences were Rules IV and V of the Distillery & Warehouse Rules, not the Brewery Rules. These rules were framed under the M.P. Excise Act, 1915, empowering the State Government to grant licences for distilleries. Section 18 allowed the State Government to lease the right of manufacturing liquor, and Section 27 permitted accepting a sum for granting leases.
The State Government was entitled to accept a sum for granting leases in addition to any duty leviable under the Act. Condition 8 of the licence required the licensee to pay the full cost of excise supervisory staff. The validity of similar provisions was upheld in Government of Andhra Pradesh v. M/s Anabeshahi Wine and Distilleries Pvt. Ltd., where it was clarified that such payments were not taxes or excise duties but the price for the privilege granted by the government. The Court emphasized that a licensee was not obligated to take the licence if unwilling to pay the required price. The demand for establishment charges was deemed legal and justified.
In Shri Bileshwar Khand Udyog Khedut Sahakari Mandali Ltd. v. State of Gujarat, the validity of a demand for maintenance of excise staff was upheld under Section 58A of the Bombay Prohibition Act, citing the State's regulatory power under Entry 33 of the Concurrent List. The decision in Synthetics and Chemicals Ltd. v. State of U.P. was referenced to support the State's authority to levy fees for supervision. The settled legal position confirmed that recovering the actual cost of supervisory staff was not illegal or ultra vires, as it constituted the price for the privilege granted by the government. Consequently, the appeal was allowed, setting aside the High Court's judgment without costs.
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2003 (3) TMI 735
Issues:
Violation of Section 28-A - Penalty under Section 15-A (1) (o) - Attempt to evade tax - Form 31 endorsement - Assessment Year 1980-81.
Detailed Analysis:
1. Violation of Section 28-A:
The case involves the violation of Section 28-A concerning the import of goods without the necessary documentation. The applicant had imported raw materials and splints valuing a significant amount, but some goods worth &8377; 11,33,901.91 arrived without the required Form 31 endorsement at the Check Post. This violation led to the initiation of proceedings under Section 15-A (1) (o) for penalty imposition.
2. Penalty under Section 15-A (1) (o):
The Assessing Authority levied a penalty of Rs. 5 lakh under Section 15-A (1) (o) for the alleged violation. However, the Deputy Commissioner (Appeal) partially allowed the appeal, reducing the penalty to &8377; 3,26,000. Subsequently, the Tribunal rejected the second appeal, prompting the applicant to file a revision against the Tribunal's decision.
3. Attempt to Evade Tax - Form 31 Endorsement:
The applicant, a manufacturer of safety matches, argued that the goods were directly sent to the factory siding, making it impossible to get Form 31 endorsed before taking delivery. The applicant contended that the goods were duly recorded in the books of account and disclosed during assessment, indicating no intent to evade tax. The court analyzed the facts and determined that there was no attempt to evade tax based on the disclosure of imported goods and lack of evidence supporting tax evasion.
4. Legal Precedents and Interpretation:
The judgment referenced legal precedents to support the argument that penalty imposition requires evidence of an attempt to evade tax. Citing cases like Jain Sudh Vanaspati v. Commissioner of Sales Tax and M/s. Oriental Carbon Ltd. v. Commissioner of Sales Tax, the court highlighted that mere technical violations, such as Form 31 endorsement issues, do not automatically warrant penalty imposition under Section 15-A (1) (o) unless there is clear evidence of tax evasion.
5. Court's Decision:
After a thorough analysis of the facts and legal principles, the court allowed the revision and set aside the Tribunal's order dated 27th August 1991. The court canceled the penalty imposed under Section 15-A (1) (o), emphasizing that in this case, where the imported goods were disclosed in the books of account and shown during assessment, there was no basis to infer an attempt to evade tax.
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2003 (3) TMI 734
Issues:
1. Renewal of license/permission for exporting ornamental granite slabs.
2. Validity of permission granted by the government.
3. Consideration of application for renewal.
4. Adverse order passed against the petitioner.
5. Non-consideration of petitioner's explanation.
6. Respondents' response to the application for renewal.
Analysis:
1. The petitioner, a company engaged in the production and export of ornamental granite slabs, sought a writ of mandamus to renew its license/permission for a further 10 years. The company had complied with the terms and conditions of the permission granted by the government and had been exporting granite slabs to various countries. Despite the permission being granted for a 10-year period, the 1st respondent issued a notice stating non-implementation of the project, leading to a dispute regarding the validity of the license (Annexure-D). The petitioner provided evidence of exports and correspondence with the department to support its claim for renewal.
2. The petitioner also applied for renewal of the license in 2002 (Annexure-N), but no decision was made on the application. The court noted that an adverse order (Annexure-K) was passed against the petitioner without proper consideration of their objections and explanations. The court set aside Annexure-K due to the lack of consideration of the petitioner's response, emphasizing the need for a fair review process.
3. During the hearing, both parties presented their arguments, with the respondents indicating a willingness to consider the petitioner's application and representations on their merits. The court acknowledged the petitioner's export activities post the issuance of Annexure-D and directed the respondents to evaluate the application (Annexure-N) and other representations objectively, disregarding the adverse order, and make a decision within twelve weeks.
4. The judgment highlighted the importance of considering all relevant information and objections before making decisions that could impact a party's rights. By setting aside the adverse order and directing a reevaluation of the renewal application, the court emphasized the principles of natural justice and fair administrative practices. The writ petition was allowed, with each party bearing their respective costs, bringing clarity to the renewal process for the petitioner.
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2003 (3) TMI 733
Issues:
Violation of principles of natural justice in removal from position of Check Pilot.
Analysis:
The appellant, a former Indian Air Force officer, joined the second respondent as a Co-Pilot and was later appointed as a Check Pilot. An incident occurred during his command of a flight, resulting in damage to an aircraft. The Permanent Investigation Board (PIB) conducted an inquiry without allowing the appellant to cross-examine witnesses. Subsequently, the appellant was removed from his position as a Check Pilot. The appellant challenged this removal through a writ petition, alleging a violation of natural justice principles. The High Court noted deficiencies in the investigation but upheld the removal order, considering the second inquiry not as a de novo inquiry. The Supreme Court found that the removal order was indeed in violation of natural justice principles as the appellant was not given an opportunity to defend himself during both inquiries. While the Court would typically order a fresh inquiry, the appellant had superannuated, making it impractical. Therefore, the Court set aside the removal order and reinstated the appellant as a Check Pilot, awarding compensation of Rs. 25,000.
In conclusion, the Supreme Court held that the removal of the appellant from the position of Check Pilot was done in violation of principles of natural justice. The Court set aside the removal order and reinstated the appellant as a Check Pilot, awarding compensation of Rs. 25,000. The Court emphasized that even though a fresh inquiry would typically be ordered, the appellant's superannuation made it impractical. The Court's decision focused on upholding principles of natural justice and providing appropriate relief to the appellant despite the circumstances.
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2003 (3) TMI 732
Issues:
1. Lack of Section 5A inquiry and personal hearing regarding objections filed by land-owners.
2. Exemption of acquired lands as agricultural lands.
3. Timeliness of objections and possession of land in Civil Appeal No. 67 of 1998.
Issue 1: Lack of Section 5A Inquiry and Personal Hearing:
The appellants contended that a Section 5A inquiry was mandatory, but none was conducted in their case. They relied on legal precedents like Farid Ahmed Abdul Samad & Anr. vs. Municipal Corporation of the City of Ahmedabad & Anr. and Shri Mandir Sita Ramji vs. Lt. Governor of Delhi & Ors. to support their argument that personal hearing under Section 5A is crucial and not dependent on the objector's request. The Supreme Court acknowledged the importance of Section 5A inquiry, emphasizing that the objector must have a fair opportunity to be heard to prevent prejudice to the land-owner's rights. However, the Court noted that the Collector did conduct a Section 5A inquiry in this case, even though there was no evidence of personal hearing for the appellants in Civil Appeal No. 66 of 1998. The Court observed that the Collector partially allowed the objections raised by excluding a significant portion of the land from acquisition. Despite the Section 6 Declaration being made earlier, the appellants delayed challenging the acquisition until after the award was passed, indicating a lack of genuine grievance against the inquiry. Consequently, the Court declined to interfere with the judgment based on the new grounds raised by the appellants.
Issue 2: Exemption of Acquired Lands as Agricultural Lands:
The appellants in Civil Appeal No. 66 of 1998 argued that their lands should be exempted as they were agricultural lands. However, the Court found that the Collector had considered their objections and excluded a substantial portion of the land from acquisition, demonstrating that the objections were indeed taken into account. The Court highlighted that the possession of the land was given to third parties for industrial purposes, and the surrounding plots were also acquired for similar use. Given these circumstances, the Court concluded that there was no valid reason to exempt the appellants' lands from acquisition. The Division Bench's decision denying the reliefs sought in the writ petition was upheld by the Supreme Court.
Issue 3: Timeliness of Objections and Possession of Land in Civil Appeal No. 67 of 1998:
In Civil Appeal No. 67 of 1998, the appellants failed to raise objections promptly after the Section 6 Declaration was made. Additionally, possession of the land had already been given to third parties for industrial purposes, and the appellants' lands were entirely surrounded by plots earmarked for industrial use. Considering these circumstances, the Court found no valid grounds to exclude the appellants' lands from acquisition. The Division Bench's decision denying the reliefs sought in the writ petition was deemed appropriate by the Supreme Court. Consequently, the appeals were dismissed with no order as to costs.
This detailed analysis of the Supreme Court judgment addresses the issues raised by the land-owners regarding the lack of Section 5A inquiry, exemption of lands as agricultural, and the timeliness of objections and possession of land in the respective appeals.
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2003 (3) TMI 731
The High Court of Kerala ruled that the company in liquidation is not entitled to deduct certain expenses from interest income under section 57(iii) of the Income-tax Act, 1961. The decision was based on a previous judgment of the Supreme Court regarding deduction of expenses by a liquidator. The court favored the Revenue over the assessee in this case.
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2003 (3) TMI 730
The Kerala High Court considered whether an assessee could set off interest payable on loans against interest on fixed deposits. The court referred to a Supreme Court decision stating that interest received on fixed deposits is income and cannot be reduced by interest paid on loans. The court ruled in favor of the revenue, denying the set-off.
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2003 (3) TMI 729
Issues Involved:
1. Denial of Modvat Credit for L.P.G. and L.D.O. used in the manufacture of automotive gears.
2. Applicability of Rule 57C of the Central Excise Rules.
3. Job worker's entitlement to Modvat Credit.
Detailed Analysis:
Issue 1: Denial of Modvat Credit for L.P.G. and L.D.O. used in the manufacture of automotive gears
The appellants, engaged in the manufacture of automotive gears, claimed Modvat credit for inputs such as L.P.G. and L.D.O. used in their manufacturing process. The Commissioner of Central Excise (Appeals) confirmed the adjudicating authority's order denying this credit. The appellants argued that these inputs were essential for the manufacturing process, which included isothermal annealing and heat treatment using L.P.G. and L.D.O., and that they had made necessary declarations under Rule 57G.
Issue 2: Applicability of Rule 57C of the Central Excise Rules
The appellants contended that Rule 57C, which disallows credit if the final product is exempt from duty or charged at a nil rate, was not applicable as it was not invoked in the Show Cause Notice. The Tribunal agreed with this contention, noting that the Show Cause Notice did not allege a violation of Rule 57C. Therefore, the application of Rule 57C was deemed incorrect in this case.
Issue 3: Job worker's entitlement to Modvat Credit
The Tribunal examined whether a job worker is entitled to Modvat credit. Referring to the Tribunal's decisions in the cases of Jindal Polymers and Bajaj Tempo Ltd., it was established that a job worker is entitled to claim Modvat credit. The Tribunal noted that the manufacturing process described by the appellants, including the use of common furnaces and inputs for both their own products and job work, justified the claim for Modvat credit. The Tribunal emphasized that Rule 57C should not be mechanically applied to deny credit, especially when the intermediate products are returned to the principal manufacturer and are not exempt from duty.
Conclusion
The Tribunal allowed the appeal, setting aside the impugned order and granting the appellants the consequential benefits according to law. The judgment clarified that in cases where a job worker manufactures intermediate products and returns them to the principal manufacturer, Rule 57C does not apply, and the job worker is entitled to Modvat credit.
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2003 (3) TMI 728
Issues Involved:
1. Liability of the licensee under Section 57(a) of the Kerala Abkari Act for excess alcohol content in toddy.
2. Reasonableness and enforceability of Rule 9(2) of the Kerala Abkari Shops (Disposal in Auction) Rules, 2002.
3. Applicability of Section 56(b) of the Kerala Abkari Act for breach of license conditions.
4. Power of the High Court to quash criminal proceedings.
Issue-wise Detailed Analysis:
1. Liability of the licensee under Section 57(a) of the Kerala Abkari Act:
The court examined whether the licensee of a toddy shop could be prosecuted under Section 57(a) of the Kerala Abkari Act if the toddy contained alcohol exceeding the permissible limit. The sample of toddy from the licensee's shop contained 9.5% ethyl alcohol, above the permissible 8.1%. However, the court noted that the report of the Chemical Examiner did not indicate any adulteration or presence of noxious ingredients. The court concluded that since there was no evidence of mixing any foreign ingredient to increase the intoxicating quality, the licensee could not be prosecuted under Section 57(a).
2. Reasonableness and enforceability of Rule 9(2) of the Kerala Abkari Shops (Disposal in Auction) Rules, 2002:
The court scrutinized Rule 9(2), which set the maximum ethyl alcohol content in toddy at 8.1%. The court acknowledged that the alcohol content in toddy could vary due to natural fermentation processes and other factors like season and time of tapping. It was noted that the maximum self-generated alcohol content in toddy could reach 12% without external agents. The court found Rule 9(2) to be arbitrary and unreasonable as it did not account for these natural variations, thus declaring it illegal and unenforceable.
3. Applicability of Section 56(b) of the Kerala Abkari Act:
Section 56(b) addresses misconduct by licensees, specifically breaches of license conditions. Given the court's ruling that Rule 9(2) was unreasonable and unenforceable, the licensee could not be held liable for breaching this rule. Consequently, the court held that the petitioners could not be prosecuted under Section 56(b) either.
4. Power of the High Court to quash criminal proceedings:
The court emphasized its authority under Articles 226 and 227 of the Constitution to quash criminal proceedings when the complaint does not make out a case against the accused. Citing the Supreme Court's decision in Pepsi Foods Ltd. v. Special Judicial Magistrate, the court asserted that it could intervene to prevent the accused from undergoing the agony of a criminal trial when no case is made out. Accordingly, the court quashed the proceedings against the petitioners.
Conclusion:
The court quashed the criminal proceedings initiated against the petitioners under Sections 56(b) and 57(a) of the Kerala Abkari Act, holding that Rule 9(2) of the Kerala Abkari Shops (Disposal in Auction) Rules, 2002, fixing the ethyl alcohol content in toddy at 8.1%, was arbitrary, unreasonable, and unenforceable. The Original Petition was allowed in these terms.
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2003 (3) TMI 727
Issues Involved:
1. Whether the State of Maharashtra is empowered to charge liquor licensees for supervision costs under the Bombay Prohibition Act, 1949.
2. Whether the Commissioner can recover supervision charges retrospectively and raise demands for arrears of supervision charges.
Summary:
Issue 1: Empowerment to Charge Supervision Costs
The respondents hold licenses for manufacturing Indian made foreign liquor and country liquor under the Maharashtra Distillation of Spirit and Manufacture of Potable Liquor Rules, 1966, and the Maharashtra Country Liquor Rules, 1973. Under Section 58A of the Prohibition Act, the State Government is empowered to permit the manufacture and other related activities under the supervision of excise staff, with the cost of such staff to be paid by the manufacturer. The pay scales and other allowances of Government employees are fixed by the State Government under the Maharashtra Civil Services (Revised Pay) Rules, 1998, issued under Article 309 of the Constitution. The Commissioner issues circulars for levy and recovery of supervision charges based on these pay scales. The respondents challenged the demand notices for differential amounts of supervision charges due to the retrospective revision of pay scales.
Issue 2: Recovery of Supervision Charges Retrospectively
The High Court of Bombay quashed the demand notices based on the judgment in Polychem Ltd. vs. State of Maharashtra, which held that the State Government is not empowered to collect supervision charges with retrospective effect. The appellants contended that the judgment in J.E. Bilimoria & Sons vs. State of Maharashtra, which was confirmed by the Supreme Court in Polychem's case, was overruled by the Full Bench in Mohan Meakin Ltd. vs. State of Maharashtra. The Full Bench held that the State Government has the power to recover the cost of supervision staff retrospectively under Section 58A of the Prohibition Act and that the licensees are liable to pay the increased cost due to the retrospective revision of pay scales.
Judgment:
The Supreme Court held that the State Government is empowered to recover all costs of supervision, including those incurred due to retrospective pay scale revisions, under Section 58A of the Prohibition Act. The Court emphasized that the licensees had undertaken to abide by all orders under the Prohibition Act while obtaining the licenses and could not avoid their contractual obligations. The judgment in Polychem's case was delivered based on incorrect information and did not consider the Full Bench decision in Mohan Meakin's case. The Supreme Court set aside the High Court's judgment and upheld the demand notices for differential supervision charges. The appeals were allowed with no order as to costs.
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2003 (3) TMI 726
Issues Involved:
1. Applicability of amendments made to the Land Acquisition Act by Central Act No. 68 of 1984 to the acquisition under the MRTP Act.
2. Determination of market value and statutory benefits under Sections 23 and 28 of the Land Acquisition Act.
3. Quantum of market value awarded by the Reference Court and the High Court.
Summary:
1. Applicability of Amendments to the Land Acquisition Act:
The primary issue in this appeal is whether the amendments made to the Land Acquisition Act by Central Act No. 68 of 1984, which confer additional monetary benefits to landholders, are applicable to acquisitions under the MRTP Act. The appellant contends that these amendments should not apply because they were made after the enactment of the MRTP Act, 1966. The respondent-claimant argues that any amendments to the Land Acquisition Act regarding compensation should apply to acquisitions under the MRTP Act, as there is no contrary intention expressed in the MRTP Act.
2. Determination of Market Value and Statutory Benefits:
The High Court affirmed the market value of Rs. 300 per sq. meter as of 7.5.1987 and extended the statutory benefits under the amended Sections 23 and 28 of the Land Acquisition Act. The amendments include sub-section (1-A) to Section 23, which entitles claimants to an additional amount calculated at 12% per annum on the market value, and the enhancement of solatium from 15% to 30% under sub-section (2) of Section 23. Under Section 28, the claimant is entitled to receive interest on the excess compensation awarded at increased rates.
3. Quantum of Market Value:
The appellant attempted to challenge the quantum of market value awarded by the Reference Court and the High Court, arguing that the amount claimed by the landholders was less than what was awarded. However, no such contention was raised before the High Court, and no material was placed before the Supreme Court to substantiate this claim. Additionally, a Review Petition filed in the High Court was dismissed, and no S.L.P. was filed against that order.
Conclusion:
The Supreme Court upheld the view taken by the High Court, affirming that the benefits under Sections 23(1-A), 23(2), and 28 of the Land Acquisition Act, as amended by the 1984 Act, apply to acquisitions under the MRTP Act. The appeal was dismissed without costs.
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2003 (3) TMI 725
Issues:
Challenge to order of detention under COFEPOSA on grounds of delay in execution.
Analysis:
The petitioner filed a petition under Art.32 seeking the quashing of the order of detention dated 23-10-2001 passed by the Government of Tamil Nadu under S.3(1)(i) of the COFEPOSA. The order was modified on 9-4-2002 due to the petitioner's surrender before the Magistrate and subsequent remand to Central Prison, Chennai. The petitioner was apprehended on 22-8-2001 for attempting to smuggle foreign currency and was arrested on 24-8-2001. Despite being released on bail on 30-8-2001, he was arrested again on 3-4-2002 due to the withdrawal of a surety. The petitioner challenged the orders primarily on the ground of delay in execution of the detention order, alleging that the detaining authority was not serious. The detaining authority contended that the delay was due to the petitioner absconding and evading arrest.
The Supreme Court noted that the detention order was executed on 9-4-2002, almost 3 1/2 months after it was passed on 23-10-2001. The State of Tamil Nadu claimed in its affidavit that the petitioner was absconding, leading to the delay. However, the Court found the explanation provided by the State to be general and vague, lacking specific details of efforts made to execute the order between the mentioned dates. The Court highlighted that no application was made to cancel bail or prevent the petitioner's exemption from personal appearance during the period of delay, indicating a lack of serious efforts by the authorities. Consequently, the Court concluded that the respondents failed to offer a satisfactory explanation for the delay, suggesting a lack of seriousness in detaining the petitioner under COFEPOSA.
Based on the inadequate explanation for the delay in executing the detention order and the lack of serious efforts by the authorities, the Supreme Court quashed the order of detention dated 23-10-2001, as amended on 9-4-2002. The petitioner was directed to be released forthwith if not required in any other case. The writ petition was allowed accordingly.
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