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2004 (3) TMI 794
Seeking a relief for release of stowing allowance by compelling the Central Government to discharge its such statutory obligation - royalty on sand extracted for stowing operations - Determination of the rightful authority to recover the royalty Central Government or State of Bihar - Parties changed their identities by succession, amalgamation or supersession - HELD THAT:- In the present case, what the Coal Company has sought to enforce is a statutory obligation of the appellant-Union of India. The Coal Mines (Conservation and Development) Act, 1974 has a public purpose and a beneficial object to achieve. The stowing assistance is released to the Coal Company in the interest of securing safety at the coal mines and the development thereof. In the absence of stowing, there may be accidents, casualties and difficulties of operation. Non- payment of stowing allowance may discourage the coal mines from carrying out the stowing operations which would be detrimental to the interest of the workers. It would not be sound exercise of discretion on the part of the Court to permit set-off or recognize an adjustment made out-of-Court which would have the effect of withholding the release of stowing assistance and appropriating the amount thereof for the recovery of dues not arising out of the same transaction.
In our opinion, it would not make any difference whether the amount withheld by the Central Government is on account of assistance or reimbursement; in either case the Could would not hold in favour of adjustment being made by the Central Government by setting off the outstanding credit referable to stowing assistance as against the outstanding demand of arrears of royalty.
The High Court has not erred in allowing the writ petition filed by the respondent-Coal Company.
So far as the finding recorded in its appellate judgment by the Division Bench that the Central Government is not entitled to recover the royalty and it is the State of Bihar which only is entitled to demand and recover the royalty from the respondent-Coal Company is concerned, we set-aside that finding but without recording any opinion of ours on that aspect for the short reason that such issue is not required to be adjudicated upon in the present case in view of the finding arrived at hereinabove. We hasten to add that requisite pleadings and necessary material are also not available on record to arrive at a definite finding in that regard.
Conclusion: The Supreme Court dismissed the appeal, affirming that the Central Government cannot withhold stowing assistance to recover royalty arrears and left the question of the rightful authority to recover the royalty unresolved due to lack of sufficient evidence. The appellant or the State of Bihar is free to recover the arrears through other legal means. No order as to costs was made.
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2004 (3) TMI 793
Issues:
1. Application to adduce evidence for registration of partnership business.
2. Rejection of the application based on the amended Code of Civil Procedure.
3. Interpretation of Rule 17-A of Order 18 before and after amendments.
4. Comparison of provisions of Order 7, Rule 14 before and after amendments.
5. Effect of the omission of Rule 17-A of Order 18 and insertion of Sub-rule (3) to Rule 14 of Order 7.
6. Jurisdiction to allow production of documentary evidence not presented with the plaint.
Analysis:
1. The plaintiff, a registered partnership firm, filed a suit seeking a decree against the defendant for a sum of money. The plaintiff did not file the Firm Registration Certificate with the plaint. An application was made during the trial to adduce evidence regarding the registration, which was rejected by the trial court.
2. The trial court based its decision on the amended Code of Civil Procedure, stating that the new provisions do not allow for the production of evidence not disclosed at the time of presenting the plaint. The court referred to the omission of Order 18, Rule 17-A by Amendment Act 46 of 1999, which came into effect from 1-7-2002.
3. Rule 17-A of Order 18, inserted in 1976, allowed parties to produce evidence not within their knowledge at a later stage with the court's permission. However, this rule was omitted by Amendment Act 46 of 1999. The court discussed the implications of this omission on the production of evidence during the trial.
4. The provisions of Order 7, Rule 14 required the plaintiff to produce documents relied upon when presenting the plaint. Amendments made in 2002, specifically Sub-rule (3) to Rule 14 of Order 7, introduced new requirements for the production of documents during the trial.
5. The court highlighted the changes brought about by the amendments, emphasizing that even though Rule 17-A of Order 18 was omitted, the plaintiff could still tender documents in evidence with the court's permission under the new provisions of Order 7, Rule 14, Sub-rule (3).
6. The court concluded that the rejection of the plaintiff's application solely based on the omission of Rule 17-A was incorrect. It held that documents not presented with the plaint could still be tendered in evidence with the court's leave under the amended provisions. The impugned order was set aside, and the plaintiff's application was allowed, emphasizing the jurisdiction to grant such permissions.
This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the court's interpretation of the relevant legal provisions before and after the amendments to the Code of Civil Procedure.
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2004 (3) TMI 792
Issues:
Conviction under Section 376 IPC, Accusation of rape, Applicability of Section 511 IPC
Conviction under Section 376 IPC:
The case involved the legality of the conviction of the accused under Section 376 of the Indian Penal Code. The accused was initially sentenced to 10 years rigorous imprisonment by the Trial Court, which was later reduced to 5 years by the High Court. The accusation revolved around an incident where the accused, after giving a lift to the victim and her friends on a bicycle, allegedly committed rape on the victim in a cattle shed. The Trial Court and the High Court both upheld the conviction, emphasizing that ejaculation by the accused constituted rape, regardless of actual penetration. The defense argued that only actual intercourse, not ejaculation, should determine the offense. The Supreme Court held that while the evidence did not establish actual rape, it proved an attempt to commit rape. Consequently, the conviction was altered to Section 376/511 IPC, and the accused was sentenced to 3 and 1/2 years of custodial sentence.
Accusation of Rape:
The prosecution's case was based on the victim's testimony, supported by medical evidence and witness statements. The victim, along with her friends, was given a lift by the accused on a bicycle after watching a movie. Subsequently, the accused allegedly took the victim to a cattle shed, forcibly removed her clothing, and ejaculated without penetration. The courts below concluded that ejaculation alone was sufficient to establish rape. However, the Supreme Court clarified that penetration, not ejaculation, was essential for the offense of rape. While acknowledging the attempt to commit rape, the Court emphasized the lack of evidence for actual rape. The importance of surrounding circumstances in determining intent and the distinction between preparation, attempt, and actual commission of an offense were highlighted.
Applicability of Section 511 IPC:
The judgment delved into the nuances of Section 511 IPC concerning attempts to commit offenses not specifically punishable by other sections. It outlined the stages of intention, preparation, and attempt in the commission of a crime. The Court emphasized that an attempt begins when preparations are complete, and the accused takes a step towards the offense's commission. The intent to gratify passions at all events, despite resistance, was crucial in determining an attempt. The judgment clarified that ejaculation without penetration constitutes an attempt, not actual rape. The Court modified the conviction to Section 376/511 IPC, considering the evidence established an attempt to commit rape, warranting a custodial sentence of 3 and 1/2 years.
In conclusion, the Supreme Court's judgment altered the conviction from Section 376 IPC to Section 376/511 IPC, emphasizing the distinction between attempt and actual commission of rape based on the requirement of penetration. The decision highlighted the importance of evidence, intent, and legal principles in determining criminal liability in cases of sexual offenses.
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2004 (3) TMI 791
Extent of judicial review permissible u/Article 226 of the Constitution regarding the terms of tender prescribing eligibility criteria - Whether the High Court could change the terms incorporated in the tender notice on the ground of its being inappropriate - HELD THAT:- A company having a turnover of ₹ 2 crores may not have the financial viability to implement such a project. As a matter of policy government took a conscious decision to deal with one firm having financial capacity to take up such a big project instead of dealing with multiple small companies which is a relevant consideration while awarding such a big project. Moreover, it was for the authority to set the terms of the tender. The courts would not interfere with the terms of the tender notice unless it was shown to be either arbitrary or discriminatory or actuated by malice. While exercising the power of judicial review of the terms of the tender notice the court cannot say that the terms of the earlier tender notice would serve the purpose sought to be achieved better than the terms of tender notice under consideration and order change in them, unless it is of the opinion that the terms were either arbitrary or discriminatory or actuated by malice. The provision of the terms inviting tenders from firms having a turnover of more than ₹ 20 crores has not been shown to be either arbitrary or discriminatory or actuated by malice.
This apart SSI having a turnover of more than ₹ 20 crores was the lowest bidder. Faced with the situation that the bids given by the respondents were not competitive with the bid given by SSI Limited, learned counsel for the respondents contended that because of the fall in price in the computer hardware and lowering of duty on the imports of the computers or its components the government should invite fresh bids. It is not for us to comment as to what course is to be adopted by the appellants, in the changed circumstances attributable to lapse of time. It is for them to decide whether to continue with the tenders already floated, if necessary be making negotiations so as to bring down the rates quoted or to invite fresh tenders.
Conclusion: The Supreme Court set aside the judgment of the High Court and dismissed the writ petitions filed by the respondents. The appeals were accepted, and no order as to costs was made. The court left it to the appellants to decide whether to continue with the tenders already floated or to invite fresh tenders in light of the changed circumstances.
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2004 (3) TMI 790
Issues Involved:
1. Whether the interest of the tenant of non-residential premises under the Maharashtra Rent Control Act, 1999 is attachable and saleable in execution of a decree against the tenant.
Detailed Analysis:
1. Definition of Property and Lease (Paragraphs 5-8):
- The term "property" is not defined under the Transfer of Property Act or the Civil Procedure Code but includes all legal rights of a person.
- A lease is a transfer of a right to enjoy property for a certain period in consideration of a price, creating an interest in the property for the lessee.
2. Legal Precedents and Interpretation (Paragraphs 9-10):
- In Ramesh Himmatlal Shah v. Harsukh Jadhavji Joshi, the Supreme Court held that the right to occupy a flat in a tenant co-partnership housing society is a species of property and is attachable and saleable in execution of a decree.
- Tenants' right to remain in non-residential premises is considered property and is saleable, similar to residential premises under the Rent Control Act.
3. Transfer of Property and Section 26 of the Maharashtra Rent Control Act, 1999 (Paragraphs 11-15):
- Section 6 of the Transfer of Property Act allows the transfer of any property unless restricted by law.
- Section 26 of the Maharashtra Rent Control Act prohibits tenants from subletting or transferring their interest without the landlord's consent, but this prohibition is not absolute and can be overridden by a contract with the landlord.
4. Judicial Interpretations and Distinctions (Paragraphs 16-23):
- In Mittersain Rupchand, the Division Bench held that leasehold interests in non-residential premises are attachable and saleable despite restrictions under the Bombay Rent Act.
- The prohibition in Section 26 is not absolute; the landlord can permit or ratify the transfer, making the tenancy interest saleable.
5. Execution and Sale of Tenancy Rights (Paragraphs 24-28):
- Section 26 forbids voluntary transfer by the tenant but does not prevent transfer by the Court.
- Historical judgments like Golak Nath Roy Chowdhary and Keshab Chandra Pramanik affirmed that general restrictions on assignment do not apply to assignments by operation of law, such as court-ordered sales.
6. Section 56 of the Maharashtra Rent Control Act, 1999 (Paragraphs 29-35):
- Section 56 legitimizes the acceptance of consideration for relinquishment, transfer, or assignment of tenancy, indicating that the tenant has a disposing power over the tenancy interest for his benefit.
- The non obstante clause in Sections 26 and 56 should be read harmoniously, with Section 56 indicating the saleability of the tenant's interest.
7. Veetrag Investments Case Analysis (Paragraphs 36-38):
- The learned single Judge's observations in Veetrag Investments I, which suggested that tenancy rights in non-residential premises are not saleable, were found inconsistent with the broader legal interpretations and precedents discussed.
8. Conclusion (Paragraphs 39-40):
- The tenants' right to remain in occupation of non-residential premises governed by the Maharashtra Rent Control Act, 1999 is a property.
- Such property is saleable, and the tenant has disposing power over the interest of tenancy for his benefit, making it attachable and saleable in execution of a decree against the tenant.
The judgment concludes that the interest of the tenant in non-residential premises under the Maharashtra Rent Control Act, 1999 is indeed attachable and saleable in execution of a decree against the tenant.
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2004 (3) TMI 789
Long delay of 19 years in criminal proceedings - Consideration of material on record by the Magistrate before taking cognizance - HELD THAT:- It is to be borne in mind that the appellant has been successively approaching the High Court every time when an order taking cognizance was passed by the Magistrate. It is because of the appellant that the criminal proceedings before the Magistrate did not cross the stage of taking cognizance. As earlier noticed, since earlier judgments of the High Court have attained finality, we are not going into correctness of these judgments. When third time the appellant was not successful before the High Court, he has approached this Court and at his instance the proceedings before the trial court were stayed. In fact, from 1986 till date the criminal case has not proceeded further because of the appellant. It would be an abuse of the process of the court if the appellant is now allowed to urge delay as a ground for quashing the criminal proceedings.
In considering the question whether criminal proceedings deserve to be quashed on the ground of delay, the first question to be looked into is the reason for delay as also the seriousness of the offence. Regarding the reasons for delay, the appellant has to thank himself. He is responsible for delay. Regarding the seriousness of the offence, we may notice that the ill of untouchability was abolished under the Constitution and the Act under which the complaint in question has been filed was enacted nearly half a century ago.
The plea that the complaint was filed as a result of vindictiveness of the complainant is not relevant at this stage. The appellant would have adequate opportunity to raise all pleas available to him in law before the trial court at an appropriate stage. No case has been made out to quash the criminal proceedings on the ground of delay.
Having regard to the enormous delay, we direct the trial court to expedite the trial and dispose of the case within a period of six months. For the reasons aforestated, the appeal is dismissed.
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2004 (3) TMI 788
Issues Involved:
1. Limitation for recovering dues as arrears of land revenue under the U.P. Public Moneys (Recovery of Dues) Act, 1972.
2. Validity of recovery proceedings after a significant lapse of time.
3. Impact of waiver/write-off by the creditor on the recovery process.
4. Legality of arrest in recovery proceedings.
Detailed Analysis:
1. Limitation for Recovering Dues as Arrears of Land Revenue:
The primary issue was whether there is any limitation for recovering sums due as arrears of land revenue under the U.P. Public Moneys (Recovery of Dues) Act, 1972. The court observed that the Act does not explicitly provide any limitation period for recovery. However, it emphasized that the objective of the Act is "speedy recovery of dues." The court referred to the Apex Court's interpretation in *Director of Industries, U.P. v. Deep Chand Agarwal* and *V.R. Kalliyanikutty*, which highlighted that the Act was enacted to provide a speedier remedy for the State Government to realize loans. The court concluded that the absence of a specific limitation period does not imply indefinite recovery rights, especially when the recovery is not pursued promptly.
2. Validity of Recovery Proceedings After a Significant Lapse of Time:
The court examined whether the recovery certificate issued in August 2000 was barred by time. It noted that although the Act does not specify a limitation period, the reasonable period for recovery should align with the time during which a suit could be filed. The court emphasized that the law of limitation is in public interest, ensuring actions are taken within a reasonable time. The court found that the recovery proceedings initiated in 1979 and concluded in 1982, with the subsequent eighteen-year delay, barred the recovery in 2000 by time. The court cited *Sharda Devi v. State of Bihar*, asserting that even in the absence of a statutory limitation, actions must be taken within a reasonable period.
3. Impact of Waiver/Write-off by the Creditor on the Recovery Process:
The court considered the impact of the Corporation's Board of Directors waiving off/writing off the loan in 1986. It concluded that this action constituted a "conscious giving up of the right" to recover the amount. The court referred to definitions in Black's Law Dictionary, which describe waiver as "the intentional or voluntary relinquishment of a known right" and write-off as removing an asset deemed uncollectible from the books. The court held that the waiver/write-off, coupled with the time-barred status of the recovery, rendered the recovery proceedings initiated in 2000 invalid.
4. Legality of Arrest in Recovery Proceedings:
The court examined the legality of the petitioner's arrest in the recovery proceedings initiated in 2000. It concluded that arrest and detention must comply with the procedure established by law. Given that the recovery proceedings were time-barred and the loan had been waived off, the court found that nothing survived to justify the recovery or the arrest. The court held that the arrest was arbitrary, illegal, and violative of Article 21 of the Constitution, which guarantees the right to liberty.
Conclusion:
The court quashed the recovery proceedings initiated against the petitioners and awarded costs of Rs. 10,000/- to the petitioners. The judgment underscored the importance of timely action in recovery proceedings and affirmed that the waiver/write-off by the creditor and the lapse of time barred the recovery.
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2004 (3) TMI 787
Issues Involved:
1. Legitimacy of the transaction involving the sale of shares of Maharana Mills Ltd. (MML) during liquidation.
2. Validity of setting off long-term capital loss against long-term capital gains.
3. Determination of whether the transaction was a colorable device to avoid tax.
Issue-wise Detailed Analysis:
1. Legitimacy of the Transaction Involving the Sale of Shares of Maharana Mills Ltd. (MML) During Liquidation:
The primary question was whether the sale of MML shares to Sameta Exports (P) Ltd. during liquidation was valid. The Assessing Officer (AO) argued that the transaction was null and void because MML was under liquidation, and the shares could not be legally transferred. However, the Commissioner (Appeals) and the Tribunal found that while the transfer of legal ownership might be restricted during liquidation, there was no prohibition on the transfer of beneficial ownership. The assessee provided an indemnity bond ensuring that any benefits from the shares would be handed over to the transferee, thus transferring beneficial ownership. The Tribunal cited the Delhi High Court's ruling in H.L. Seth v. Wearwell Cycles Co. (India) Ltd., which supported the validity of such transfers between transferor and transferee even during liquidation. Therefore, the Tribunal upheld the Commissioner (Appeals)'s decision that the sale transaction was not null and void.
2. Validity of Setting Off Long-Term Capital Loss Against Long-Term Capital Gains:
The assessee claimed a long-term capital loss on the sale of MML shares and sought to set it off against long-term capital gains from the sale of shares in Saurashtra Cement & Chemical Industries Ltd. The AO rejected this claim, alleging that the transaction was designed solely to reduce tax liability. However, the Commissioner (Appeals) reversed the AO's decision, stating that the AO did not contest the valuation of MML shares and that the transaction was not manipulative merely because it resulted in a loss. The Tribunal agreed with this view, noting that the shares were sold for a nominal value of Rs. 1 each, which was justified given the financial state of MML. The Tribunal concluded that the assessee was entitled to decide when to sell the loss-incurring asset and directed the AO to allow the set-off of the capital loss against the capital gain.
3. Determination of Whether the Transaction Was a Colorable Device to Avoid Tax:
The AO argued that the transaction was a colorable device to avoid tax, invoking the principles from McDowell & Co. Ltd. v. CTO. However, the Tribunal referred to subsequent rulings, including Banyan & Berry v. CIT and Azadi Bachao Andolan, which clarified that not all tax-saving transactions are colorable devices. The Tribunal emphasized that a transaction could only be disregarded if it was a make-believe transaction without actual alienation of the asset. In this case, the shares were indeed sold to an independent entity, Sameta Exports (P) Ltd., which was owned by close relatives of the assessee but was a separate juridical person. The Tribunal found no evidence suggesting that the sale was not genuine or that the consideration was inadequate. Therefore, the Tribunal concluded that the transaction could not be disregarded merely because it resulted in tax savings, and the AO's objection on this ground was not justified.
Conclusion:
The Tribunal upheld the Commissioner (Appeals)'s decision, affirming the validity of the sale transaction and allowing the set-off of the capital loss against the capital gain. The appeal filed by the revenue was dismissed.
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2004 (3) TMI 786
Seeking grant for exemption to touring cinema u/r 14 of the Tamil Nadu Cinemas (Regulations) Rules, 1957 - HELD THAT:- A perusal of the order of the High Court shows that the principal reason which has prevailed with the High Court in setting aside the order dated 30-10-1995 is that there is no reference made therein to Section 11 of the Act. In our opinion, the Division Bench of the High Court was not right in forming the opinion which it has done. The power to grant permission has been specifically conferred on the Government by the proviso inserted to Rule 14 by GO No. 1326 dated 6-9-1995. It is noteworthy that in an earlier round of litigation initiated by Respondent 1 the constitutional validity of GO No. 1326 dated 6-9-1995 was upheld. Merely because Section 11 of the Act was not specifically referred to in the order dated 30-10-1995 that could not have been a ground for setting aside the permission dated 30-10-1995.
It is well settled that if an authority has a power under the law merely because while exercising that power the source of power is not specifically referred to or a reference is made to a wrong provision of law, that by itself does not vitiate the exercise of power so long as the power does exist and can be traced to a source available in law.
The appeal is allowed. The impugned Judgement of the Division Bench is set aside and that of the learned Single Judge is restored.
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2004 (3) TMI 785
Issues Involved:
1. Constitutionality of Paragraph 80(2) of the Employees' Provident Fund Scheme, 1952.
2. Alleged Discrimination Against Newspaper Establishments and Employees.
3. Applicability of Article 14 of the Constitution of India.
4. Delay in Challenging the Provision.
5. Impact on Freedom of Speech and Expression under Article 19(1)(a).
Issue-wise Detailed Analysis:
1. Constitutionality of Paragraph 80(2) of the Employees' Provident Fund Scheme, 1952:
The petition challenged the constitutionality of Paragraph 80(2) of the Employees' Provident Fund Scheme, 1952, under Article 32 of the Constitution of India. The impugned paragraph excluded newspaper employees from the category of "excluded employees" regardless of their pay, thereby entitling them to the benefits of the Provident Fund Scheme without an income ceiling. The petitioners argued that this provision was discriminatory and arbitrary, violating Article 14 of the Constitution.
2. Alleged Discrimination Against Newspaper Establishments and Employees:
The petitioners contended that the impugned provision was discriminatory because it singled out newspaper establishments and employees for special treatment by excluding them from the income ceiling applied to other industries. They argued that this created an unjust financial burden on newspaper establishments, especially given the economic challenges faced by the industry, such as declining advertisement revenues due to competition from electronic media.
3. Applicability of Article 14 of the Constitution of India:
The Court examined whether the classification of newspaper employees as a separate class was arbitrary and violated Article 14. The principles of reasonable classification under Article 14 were reiterated, emphasizing that classification must be based on an intelligible differentia and have a rational relation to the object sought to be achieved. The Court referred to the decision in Express Newspapers (Private) Ltd. & Anr. v. The Union of India & Ors., which upheld the classification of working journalists as a distinct class deserving special treatment. The Court concluded that the classification of newspaper employees was rational and had a reasonable relation to the object of providing social welfare benefits, thereby not violating Article 14.
4. Delay in Challenging the Provision:
The Court addressed the issue of delay in challenging the provision, noting that the impugned provision had been in effect since 1956. It was argued that the delay in filing the petition was not a valid ground to dismiss the challenge, especially when constitutional validity was in question. However, the Court also recognized that the constitutional remedy under Article 32 is discretionary and that delay could be a relevant consideration in some cases. In this case, the Court found no satisfactory explanation for the delay of over forty-five years and held that the petition could be rejected on this ground alone.
5. Impact on Freedom of Speech and Expression under Article 19(1)(a):
The petitioners faintly suggested that the additional financial burden imposed by the impugned provision could affect the freedom of speech and expression under Article 19(1)(a) by making it difficult to maintain newspaper prices, thereby reducing accessibility to the public. The Court rejected this argument, stating that the financial burden on employers did not amount to "harsh treatment" and that the benefit extended to employees was in furtherance of the freedom of press. The Court emphasized that the employees of newspaper establishments played a dominant role in disseminating information, and the impugned provision was aimed at promoting their welfare.
Conclusion:
The Supreme Court dismissed the petition, upholding the constitutionality of Paragraph 80(2) of the Employees' Provident Fund Scheme, 1952. The Court found that the classification of newspaper employees as a separate class was rational and had a reasonable relation to the object of providing social welfare benefits. The delay in challenging the provision and the argument regarding the impact on freedom of speech and expression were also rejected. The petition was accordingly dismissed.
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2004 (3) TMI 784
Issues:
Challenging an order passed by the Commissioner of Customs regarding seized goods; Ignoring findings of the Tribunal and directions of the Court; Maintainability of Writ Petition due to statutory remedy; Remarks made against Counsel; Consideration of case on merits by the Tribunal.
Analysis:
The petitioners challenged an order by the Commissioner of Customs regarding the seizure of bearings imported for setting up a steel plant. The goods were seized and later released to the petitioner. Despite multiple appeals and remands, the Commissioner confirmed duty, interest, and penalty. The petitioners then filed a Writ Petition before the High Court, contesting the order of the Commissioner. The Court noted the objections raised by both parties and decided to address the issue through a special order for final disposal.
The senior Counsel for the petitioners argued that the Commissioner disregarded the Tribunal's findings and directions of the Court, making unwarranted remarks against the Counsel. On the other hand, the senior Counsel for the Department raised an objection to the maintainability of the Writ Petition due to the availability of a statutory remedy through an appeal to CEGAT. The Court acknowledged the statutory remedy but emphasized the importance of addressing the remarks made against the Counsel.
After hearing the arguments, the Court decided to expunge certain sentences from the Commissioner's order and directed the petitioners to file an appeal to the Tribunal within four weeks. The Tribunal was instructed to consider the appeal without limitations and review the impugned order in light of specific findings and directions from previous Court orders. The Court also granted an interim order in favor of the petitioner until the Tribunal's decision. The matter was ordered to be resolved within four months from the filing of the appeal, with no costs imposed on either party.
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2004 (3) TMI 783
Issues Involved:
1. Clubbing of clearances of two units (M/s. MMSC and M/s. MPPP).
2. Invocation of the extended period of limitation under Section 11A(1) of the Central Excise Act.
3. Imposition of penalties under Section 11AC and Rule 173Q on M/s. MMSC.
4. Imposition of penalty under Rule 209A on M/s. MPPP.
Detailed Analysis:
1. Clubbing of Clearances:
The primary issue was whether the clearances of M/s. MMSC and M/s. MPPP should be clubbed for the purpose of excise duty. The department argued that M/s. MPPP was created to avail the benefit of the Small Scale Industries (SSI) Exemption Notification No. 1/93, and that there was centralized production with clearances bifurcated among the two units. Statements from supervisors and the proprietor indicated that semi-finished products were moved between the units for further processing and final clearance. However, the appellants contended that both units were separate legal entities with independent registrations, balance sheets, and tax assessments. They argued that the pattern of operations remained consistent before and after the imposition of excise duty.
2. Invocation of Extended Period of Limitation:
The appellants challenged the invocation of the extended period of limitation, arguing that there was no suppression of facts as the existence and activities of both units were known to the department. They cited case laws emphasizing the need for specific allegations of fraud or suppression for invoking the extended period. The department, however, maintained that the appellants had withheld information about the centralized production and the flow of funds between the units, justifying the invocation of the extended period.
3. Imposition of Penalties on M/s. MMSC:
The adjudicating authority imposed penalties under Section 11AC and Rule 173Q on M/s. MMSC. The appellants argued that Section 11AC, introduced with effect from 28-9-96, could not be applied retrospectively to the period in question (1-4-94 to 16-2-96). The Tribunal upheld this argument, setting aside the penalty under Section 11AC while maintaining the penalty under Rule 173Q.
4. Imposition of Penalty on M/s. MPPP:
The penalty of Rs. 1,00,000/- was imposed on M/s. MPPP under Rule 209A. The appellants contended that there was no allegation in the show cause notice of M/s. MPPP acquiring or dealing with excisable goods liable for confiscation. The Tribunal agreed, noting that the main appellant, M/s. MMSC, was not penalized under Rule 209A, and hence, the penalty on M/s. MPPP was set aside.
Separate Judgments:
Order by Member (Technical):
The Member (Technical) concluded that the two units were essentially one for excise purposes due to centralized production and financial interdependence. The longer period of limitation was justified due to suppression of facts. However, the penalty under Section 11AC was set aside as it could not be applied retrospectively.
Order by Member (Judicial):
The Member (Judicial) disagreed, noting that the units were established long before the excise duty was imposed and operated independently. The extended period of limitation was not applicable as the units were registered and filing returns with the department. Both appeals were allowed, setting aside the demand and penalties.
Third Member Decision:
The Third Member agreed with the Member (Judicial), emphasizing the independent functioning of both units and the lack of evidence for financial interdependence or dummy status. The demands and penalties were set aside, and both appeals were allowed.
Final Order:
In light of the majority view, both appeals were allowed with consequential relief.
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2004 (3) TMI 782
Issues:
Revenue's appeal against deletion of penalty under section 271(1)(c) for the assessment year 1989-90.
Analysis:
The main issue in this case was the deletion of a penalty imposed under section 271(1)(c) of the Income Tax Act, 1961. The assessee's income tax return showed a loss, which was later assessed at a reduced loss after additions were made for unexplained credits. The Assessing Officer imposed a penalty equivalent to 100% of the tax sought to be evaded. The CIT(A) deleted the penalty based on the precedent set by the Hon'ble Punjab & Haryana High Court, stating that when both the returned and assessed income are negative figures (losses), penalty under section 271(1)(c) is not leviable. The revenue appealed this decision.
The Appellate Tribunal carefully considered the legal position and relevant judgments. They highlighted the observation by the Hon'ble Punjab High Court that penalty is not applicable when there is no tax payable, and evasion of tax is essential for penalty imposition. The Tribunal also noted the subsequent confirmation of this view by the Hon'ble Supreme Court. The Tribunal emphasized that the law did not allow for penalties in situations where assessed losses are reduced compared to returned losses before the amendment to Explanation 4 of section 271(1)(c). The Tribunal found that the Hon'ble Supreme Court's approval of the legal proposition established by the Hon'ble High Court's judgment meant that penalties were not applicable when both returned and assessed income were negative figures.
The revenue raised objections to the legal proposition, arguing that the Hon'ble Supreme Court's judgment was not binding and cited a contradictory judgment by the Hon'ble jurisdictional High Court. However, the Tribunal rejected these objections, emphasizing that the Hon'ble Supreme Court's approval of the legal proposition established by the Hon'ble High Court was significant. The Tribunal also highlighted that the contradictory judgment was passed ex parte and did not consider the relevant binding precedents. Therefore, the Tribunal upheld the CIT(A)'s decision to delete the penalty based on the established legal position.
In conclusion, the Appellate Tribunal dismissed the revenue's appeal and approved the CIT(A)'s decision to delete the penalty under section 271(1)(c) for the assessment year in question. The Tribunal's decision was based on the legal precedents set by the Hon'ble High Court and the subsequent approval by the Hon'ble Supreme Court, indicating that penalties were not applicable in cases where both returned and assessed income were negative figures.
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2004 (3) TMI 781
Issues Involved:
1. Legality of the transfer order.
2. High Court's general directions on transfers and promotions.
3. Jurisdiction of the High Court in disputed factual matters.
4. Rights and remedies available to government servants.
Detailed Analysis:
1. Legality of the Transfer Order:
The primary issue in Civil Appeal No.408 of 2004 was the transfer of the respondent, a District Supply Officer, from Meerut to Lucknow. The respondent alleged that the transfer was made under political pressure, specifically from a local MLA. The High Court had issued an interim stay on the transfer order, influenced by letters allegedly written by the MLA. However, the respondents contested these claims, asserting that the MLA's letter was fake and that the transfer was made in public interest due to the respondent's previous misconduct and ongoing departmental proceedings against him.
2. High Court's General Directions on Transfers and Promotions:
The High Court, while addressing the writ petitions, issued broad directions affecting the administrative powers of the government. It suggested that government servants should approach the Chief Secretary for grievances related to transfers, and proposed the constitution of a Civil Service Board for Class-I Officers. The Supreme Court found these directions to be an overreach, stating that such generalizations based on newspaper reports and write-ups were inappropriate. The Court emphasized that transfers are an inherent condition of service and should not be interfered with unless they are shown to be mala fide or in violation of statutory provisions.
3. Jurisdiction of the High Court in Disputed Factual Matters:
In both appeals, the High Court acknowledged that disputed factual issues were involved, making it difficult to adjudicate the matters in writ jurisdiction. Despite this, the High Court proceeded to issue general directives. The Supreme Court criticized this approach, stating that the High Court should have rejected the writ petitions and allowed the parties to seek remedies through other legal avenues. The Court reiterated that it is not the role of the judiciary to generalize administrative issues or to act as an appellate authority over transfer orders.
4. Rights and Remedies Available to Government Servants:
The Supreme Court underscored that government servants do not have a right to remain in a particular position indefinitely. Transfers are a part of service conditions and can only be contested if they are mala fide, violate statutory provisions, or are made by an incompetent authority. The Court noted that administrative guidelines on transfers do not confer legally enforceable rights, although they may provide grounds for internal administrative appeals. The Court also highlighted that the judiciary should avoid encroaching on the executive's domain by issuing sweeping directives that could disrupt administrative control and supervision.
Conclusion:
The Supreme Court set aside the High Court's judgments, emphasizing that the judiciary should not interfere with administrative decisions unless there is clear evidence of mala fide actions or statutory violations. The appeals were allowed, and the general directions issued by the High Court were nullified, reaffirming the established principles governing transfers and the jurisdictional limits of the courts in such matters.
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2004 (3) TMI 780
Issues Involved:
1. Quashing of the order rejecting the application for discharge.
2. Quashing of the criminal complaint pending against the petitioner.
Issue-wise Detailed Analysis:
1. Quashing of the order rejecting the application for discharge:
The petitioner sought to quash the order dated 29/1/1999 by the Chief Metropolitan Magistrate, which rejected his application for discharge in Criminal Case No. 208/CW/91. The petitioner argued that he had been exonerated by the Customs, Excise & Gold (Control) Appellate Tribunal (CEGAT) and the Enforcement Directorate, and thus, the prosecution on the same charges should not proceed. The court examined several precedents, including Supreme Court judgments in *Uttam Chand v. Income-tax Officer* and *G.L. Didwania v. Income-tax Officer*, which supported the principle that if a person is exonerated in adjudication proceedings, prosecution on the same charges should be quashed. The court noted that the CEGAT had quashed the penalty imposed on the petitioner, and the Enforcement Directorate had also exonerated him. The court concluded that since the findings of the adjudicating authorities were not challenged and had attained finality, the prosecution could not proceed.
2. Quashing of the criminal complaint pending against the petitioner:
The petitioner also sought to quash the criminal complaint (C.C. No. 208/CW/91) pending before the Chief Metropolitan Magistrate. The court noted that the petitioner was initially charged under the Customs Act and the Foreign Exchange Regulation Act (FERA) for allegedly attempting to smuggle currency out of India. However, the Additional Director of the Enforcement Directorate had exonerated the petitioner, and the CEGAT had set aside the penalty imposed by the Customs authorities. The court emphasized that the respondents did not challenge these exonerations, indicating acceptance of the petitioner's innocence. The court referred to the judgment in *Willi Lemback v. Rajan Mathur*, which held that if the department does not challenge the findings of the adjudicating authorities, it cannot proceed with criminal prosecution on the same facts. Consequently, the court quashed the criminal complaint against the petitioner, stating that it was improper to prosecute him when the adjudicating authorities had exonerated him.
Order:
The court quashed the complaint being C.C. No. 208/CW/91 pending before the Chief Metropolitan Magistrate, Esplanade, Mumbai, and the order dated 29/1/1999 passed by the Chief Metropolitan Magistrate, thereby disposing of the petition in favor of the petitioner.
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2004 (3) TMI 779
Legality of the conviction and sentence of Esher Singh u/s 4 of TADA - Acquittal of other accused persons from charges u/s 120B and 302 read with 120B IPC, Section 3(3) of TADA, and Section 27 of the Arms Act - Maintainability of the appeal filed by Balbir Singh, son of the deceased - HELD THAT:-No doubt in the case of conspiracy there cannot be any direct evidence. The ingredients of offence are that there should be an agreement between persons who are alleged to conspire and the said agreement should be for doing an illegal act or for doing illegal means an act which itself may not be illegal. Therefore, the essence of criminal conspiracy is an agreement to do an illegal act and such an agreement can be proved either by direct evidence or by circumstantial evidence or by both, and it is a matter of common experience that direct evidence to prove conspiracy is rarely available. Therefore, the circumstances proved before, during and after the occurrence have to be considered to decide about the complicity of the accused.
There is no difference between the mode of proof of the offence of conspiracy and that of any other offence, it can be established by direct or circumstantial evidence. It was held that the expression "in reference to their common intention" in Section 10 is very comprehensive and it appears to have been designedly used to give it a wider scope than the words "in furtherance of" in the English law; with the result, anything said, done or written by a co-conspirator, after the conspiracy was formed, will be evidence against the other before he entered the field of conspiracy or after he left it. Anything said, done or written is a relevant fact only.
We are aware of the fact that direct independent evidence of criminal conspiracy may not ordinarily and is generally not available and its existence invariably is a matter of inference except as rare exceptions. The inferences are normally deduced from acts of parties in pursuance of a purpose in common between the conspirators. This Court in V.C.Shukla v. State (Delhi Admn.) [1980 (4) TMI 309 - SUPREME COURT] held that to prove criminal conspiracy there must be evidence direct or circumstantial to show that there was an agreement between two or more persons to commit an offence. There must be a meeting of minds resulting in ultimate decision taken by the conspirators regarding the commission of an offence and where the factum of conspiracy is sought to be inferred from circumstances, the prosecution has to show that the circumstances give rise to a conclusive or irresistible inference of an agreement between two or more persons to commit an offence.
As in all other criminal offences, the prosecution has to discharge its onus of proving the case against the accused beyond reasonable doubt.
The circumstances in a case, when taken together on their face value, should indicate the meeting of the minds between the conspirators for the intended object of committing an illegal act or an act which is not illegal, by illegal means. A few bits here and a few bits there on which the prosecution relies cannot be held to be adequate for connecting the accused with the commission of the crime of criminal conspiracy. It has to be shown that all means adopted and illegal acts done were in furtherance of the object of conspiracy hatched. The circumstances relied for the purposes of drawing an inference should be prior in point of time than the actual commission of the offence in furtherance of the alleged conspiracy.
Conclusion: The Supreme Court dismissed all three appeals, upholding the conviction and sentence of Esher Singh u/s 4 of TADA and maintaining the acquittal of the other accused persons due to lack of sufficient evidence. The court also confirmed the maintainability of the appeal filed by Balbir Singh.
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2004 (3) TMI 778
Supreme Court dismissed the special leave petition in the case. Citation: 2004 (3) TMI 778 - SC Order. Judges: Mr. Y.K. Sabharwal and Mr. D.M. Dharmadhikari.
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2004 (3) TMI 777
Legitimacy of Kannan and his entitlement to the property - Entitlement of plaintiffs to the A Schedule property by survivorship and inheritance - Validity of the settlement deed and gift deed - High Court's jurisdiction under Section 100 CPC - HELD THAT:- In our opinion, the High Court has erred in holding that the appellants have failed to establish their title to the suit property evidently without appreciating the evidence on record in its proper perspective by making only reference to portions of evidence having once decided to reappreciate the evidence. The High Court, in our opinion, ought to have examined the entire evidence both oral and documentary instead of only a portion thereof especially while deciding to look into and reappreciate the evidence despite the limited scope under Section 100 CPC. In our view, the learned single Judge of the High Court has exceeded his jurisdiction in reassessing, reappreciating and making a roving enquiry by entering into the factual arena of the case which is not the one contemplated under the limited scope of jurisdiction of a second appeal under Section 100 CPC.
In the present case, the lower appellate Court fairly appreciated the evidence and arrived at a conclusion that the appellants suit was to be decreed and that the appellants are entitled to the relief as prayed for. Even assuming that another view is possible on a reappreciation of the same evidence, that should not have been done by the High Court as it cannot be said that the view taken by the first appellate court was based on no material.
To say the least the approach of the High Court was not proper. It is the obligation of the Courts of law to further the clear intentment of the legislature and not frustrate it by excluding the same. This Court in a catena of decisions held that where findings of fact by the lower appellate Court are based on evidence, the High Court in second appeal cannot substitute its own findings on reappreciation of evidence merely on the ground that another view was possible.
We, therefore, hold that the High Court has exceeded its jurisdiction in interfering with the findings of the final court of fact.
We, therefore, hold that the judgment of the High Court under the circumstances cannot be sustained and judgment of the lower appellate Court in A.S. No. 21 of 1983 of the Subordinate Judge, Tiruvallur is restored. The appeal stands allowed. There will be no order as to costs.
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2004 (3) TMI 776
Issues:
Maintainability of appeal under s. 260A before the High Court by the IT Department from the Tribunal judgment where tax effect does not exceed Rs. 2 lakhs.
Analysis:
The primary issue in this judgment revolves around the maintainability of an appeal under s. 260A before the High Court by the IT Department when the tax effect does not exceed Rs. 2 lakhs. The counsel for the assessee raised a preliminary objection citing Instruction No. 1979 issued by the CBDT, which restricts filing appeals in such cases. The circular's binding nature on the IT Department is emphasized, drawing parallels with similar cases under the Central Excise Act where circulars from CBEC were deemed binding. The judgment in CIT vs. Camco Colour Co. is relied upon to support the argument that the appeal in question is not maintainable due to the tax effect falling below the prescribed threshold.
Another crucial aspect highlighted in the judgment is the binding nature of circulars issued by the Board on the Revenue. Various Supreme Court decisions are referenced to establish this principle, emphasizing that the Revenue cannot take a stand contrary to the instructions issued. The legal position reiterated in cases like Paper Products Ltd. vs. Commissioner of Central Excise and Simplex Castings Ltd. vs. Commissioner of Customs underscores the Department's inability to challenge the circulars. The judgment in Collector of Central Excise vs. Dhiren Chemical Industries further solidifies the binding nature of CBEC circulars on the Revenue, even if they differ in interpretation from the Supreme Court.
Moreover, the Division Bench's decision in CIT vs. Camco Colour Co. is extensively discussed, emphasizing the policy decision by the Board to reduce litigations by not raising questions of law where the tax effect is below the specified amount. The court dismisses the appeal based on this policy decision, highlighting that the circular is binding on all officers and Commissioners. Despite the circular's clear instructions, the Revenue's decision to file the appeal is deemed contrary to the policy decision, leading to the dismissal of the appeal on the grounds of maintainability.
In conclusion, the judgment delves into the intricacies of circulars issued by the CBDT and CBEC, emphasizing their binding nature on the respective departments. The decision underscores the importance of adhering to policy decisions aimed at reducing litigations and upholding the binding character of circulars, ultimately impacting the maintainability of appeals in tax matters before the High Court.
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2004 (3) TMI 775
Issues Involved:
1. Classification of income from leasing and facilities as 'Business Income' or 'Income from House Property'.
2. Allowability of expenses claimed by the assessee under various heads.
Detailed Analysis:
1. Classification of Income:
The primary issue in this case is whether the income received by the assessee from leasing out a commercial complex and providing additional facilities should be classified as 'Business Income' or 'Income from House Property'. The assessee, a private limited company engaged in real estate and property development, took a vacant land on a 30-year lease and developed it into a commercial complex. The income from leasing this complex and providing additional facilities was claimed as 'Business Income' by the assessee.
The Revenue contended that the income should be classified under 'Income from House Property' and that the expenses claimed by the assessee were not allowable. The Departmental Representative argued that the assessee's activities were not complex enough to be considered a business and that the income should be computed under the head 'Income from House Property'.
However, the assessee argued that the leasing of the property and the provision of additional facilities were part of its business activities, as outlined in its memorandum of association. The assessee provided various facilities such as watch and ward, maintenance of common areas, supply of water, and provision of lift and standby generator, among others. The assessee cited several judicial precedents to support its claim that the income should be considered as 'Business Income'.
The Tribunal found that the assessee had taken the property on lease as a business venture and had developed it into a commercial asset, which was then leased out to various parties. The Tribunal noted that the assessee was not the owner of the land and had to surrender the lease with improvements to the landlord at the end of the lease term. The Tribunal distinguished the facts of the present case from those in the case cited by the Departmental Representative, where the land was held as an investment and no additional facilities were provided.
The Tribunal referred to the decision of the jurisdictional High Court in the case of Sri Balaji Enterprises v. CIT, which held that if a property is taken on lease, developed, and leased out as part of the business activity, the income received should be treated as 'Business Income'. The Tribunal also referred to the decision of the Supreme Court in the case of S.G. Mercantile Corpn. (P.) Ltd. v. CIT, which held that the activity of taking a property on lease, setting up a market, and letting out shops and stalls was part of the business activity and the income should be classified as 'Business Income'.
Based on these precedents and the facts of the case, the Tribunal concluded that the income earned by the assessee from lease rentals and maintenance charges was 'Business Income'.
2. Allowability of Expenses:
Since the income was classified as 'Business Income', the expenses claimed by the assessee under various heads were allowable. The Tribunal noted that the assessee had provided various facilities and services to the tenants and collected charges for the same. These activities were part of the assessee's business operations and the expenses incurred for providing these facilities were allowable as business expenses.
Conclusion:
The Tribunal dismissed the appeals filed by the Revenue and allowed the appeal filed by the assessee. The income from leasing the commercial complex and providing additional facilities was classified as 'Business Income', and the expenses claimed by the assessee were allowable.
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