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2005 (3) TMI 794
Issues Involved:
1. Allegation of oppression and mismanagement regarding the decision to develop the company's property.
2. Whether the development of the property requires a special resolution by the shareholders.
3. Request for division of the company's land among shareholders.
4. Allegation of suppression of material facts by the petitioner.
5. Offer by respondents to purchase the petitioner's shares or give a proportionate share in the developed property.
Detailed Analysis:
1. Allegation of Oppression and Mismanagement:
The petitioner, holding 429 equity shares, alleged that the decision by the Board to develop the company's property with K. Raheja Universal Private Limited was made without proper consideration and was oppressive. The petitioner argued that the company's main business was film production and not real estate development, and such a decision should have been taken by a special resolution in a general meeting. The petitioner also claimed that the decision was made despite objections and without considering other proposals.
2. Requirement of Special Resolution:
The petitioner contended that any decision regarding the sale, disposal, or development of the company's property should require a special resolution passed by 75% of the shareholders. The respondents argued that an ordinary resolution was sufficient and claimed that the proposal was in the company's best interest to raise funds after a fire incident had damaged the studio. The Board initially decided not to proceed with the development without the petitioner's consent and later undertook not to develop the land without shareholder approval.
3. Request for Division of Land:
The petitioner requested the division of the company's land in proportion to her group's shareholding, arguing that the family company should respect the rights of all family members. The petitioner cited various cases to support the division of assets in family companies. The respondents opposed this, stating that division would fragment the valuable asset, reduce its economic value, and be against the company's interest. They also offered to purchase the petitioner's shares or give her a proportionate share in the developed property.
4. Allegation of Suppression of Material Facts:
The respondents alleged that the petitioner had previously entered into MOUs to sell her shares to an outsider, Mr. Karim Maradia, at a significantly higher price than the company's valuation. This was not disclosed in the petition, indicating that the petitioner had come to the court with unclean hands. The respondents argued that the petition was filed for an oblique motive and not in the company's interest.
5. Offer by Respondents:
The respondents expressed willingness to purchase the petitioner's shares at a fair value determined by an independent valuer or to provide her with a proportionate share in the developed property. The petitioner was given a month to choose between these alternatives. If neither option was chosen, any future development of the property would require approval by a special resolution in a general meeting, as initially decided by the company.
Conclusion:
The petition was disposed of with no order as to costs. The petitioner was given the liberty to choose between selling her shares to the respondents or receiving a proportionate share in the developed property. The court directed that any future proposal for the development of the company's property must be approved by a special resolution in a general meeting to ensure shareholder consent.
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2005 (3) TMI 793
Issues Involved:
1. Validity of the cancellation of agreements for sale.
2. Maintainability of the appeal against the original judgment and decree.
3. Scope and effect of the review petition.
4. Execution of the decree.
5. Third-party claims and their impact on the execution proceeding.
Detailed Analysis:
1. Validity of the Cancellation of Agreements for Sale:
The appellant canceled the agreements for sale on the grounds that the respondents failed to send the draft deeds of sale within the stipulated time. This cancellation was contested by the respondents who sought specific performance of the agreements. The court had to determine whether the cancellation was valid and whether the respondents had admitted the cancellation by adopting the appellant's contention in their written objection.
2. Maintainability of the Appeal Against the Original Judgment and Decree:
The High Court entertained the respondents' appeal against the original judgment and decree passed in Title Suit No. 49 of 1990. The Supreme Court found that the High Court committed a serious error in this regard. The original decree ceased to operate once the review petition was allowed in part. The appeal against the original decree was not maintainable during the pendency of the review petition, as per Order XLVII Rule 4 of the CPC. The Supreme Court emphasized that an appeal must conform to the requirements of Order 41 of the CPC and cannot be filed in anticipation.
3. Scope and Effect of the Review Petition:
The review petition was allowed in part to rectify an error regarding the refund or forfeiture of the earnest money. The Supreme Court held that the original decree dated 20.12.2001 did not survive after the review petition was allowed. The court also noted that the respondents did not file any application for withdrawing the review petition, and such an application would have required the High Court to apply its mind to the grounds for withdrawal, especially considering the creation of third-party interests.
4. Execution of the Decree:
The appellant filed an execution petition for the decree passed in Title Suit No. 412 of 1977. The respondents sought a stay of execution on the grounds that their suit for specific performance had been restored. The Supreme Court reiterated that the decree for eviction passed in Title Suit No. 412 of 1977 became enforceable after the decision in Civil Appeal No. 9131 of 2003. The court rejected the submission that the undertaking given by the respondents had revived, stating that an undertaking analogous to an interlocutory injunction cannot be revived once the party giving it has been released therefrom.
5. Third-Party Claims and Their Impact on the Execution Proceeding:
Respondents Nos. 3 and 4 claimed a fresh agreement for sale after the death of the mother of Respondents Nos. 1 and 2. They filed applications under Order XXI Rules 95, 97 to 101 read with Section 47 of the CPC, asserting that they were not bound by the decree against Respondents Nos. 1 and 2. The executing court dismissed these claims, and the Supreme Court upheld the dismissal, noting that the respondents had been taking inconsistent and contradictory stands regarding their possession and title to the suit premises.
Conclusion:
The Supreme Court set aside the impugned judgments of the High Court, holding that the appeal against the original decree was not maintainable and that the decree for eviction was enforceable. The appeals were allowed, but no order as to costs was made.
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2005 (3) TMI 792
Issues: Challenge to order passed by Custom Excise and Gold (Control) Appellate Tribunal, Interpretation of the term "importer", Liability for duty and penalty under Section 111(m) of the Customs Act, Evidence of importer status, Imposition of penalty under Section 112(a), Delay in filing appeal, Condonation of delay in re-filing appeal.
In this case, the challenge was against the order issued by the Custom Excise and Gold (Control) Appellate Tribunal. The main contention was regarding the interpretation of the term "importer" and the consequent liability for duty and penalty under Section 111(m) of the Customs Act. The Appellate Authority had ruled that the respondents could not be considered importers as there was no evidence establishing their relationship with the foreign supplier of the goods. The authorities failed to prove that the appellant was the importer, as no orders were placed, no payments made, and no documents filed for clearance of goods by the appellant. Consequently, the duty demand from the appellant was set aside. The imposition of penalty under Section 112(a) was also revoked due to the lack of evidence proving the appellant's importer status.
The judgment highlighted the importance of evidence in determining importer status and the consequent liability for duty and penalty. It emphasized that duty could only be demanded from the actual importer or their agent. The ruling was based on the evidence presented before the authorities and the relevant records. The judgment concluded that no substantial question of law arose for consideration in the appeal, given the factual basis of the findings.
Regarding the delay in filing the appeal, the High Court noted a significant lapse between the date of the Appellate Tribunal's order and the filing of the appeal. Despite the absence of an application for condonation of delay, the appeal was re-filed with a separate application for condonation of delay. The court observed that the appeal would likely be time-barred, which was considered a circumstance against the respondent. Consequently, the appeal was dismissed due to the delay in filing and re-filing, with related applications for stay, delay in re-filing, and exemption being disposed of accordingly.
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2005 (3) TMI 791
Issues Involved:
1. Entitlement to exemption from urban land tax for the period 1965-1976.
2. Applicability of Government Orders (G.O.) for exemption.
3. Retrospective application of Income Tax exemption.
4. Compliance with exemption norms and guidelines.
5. Legal principles governing exemption under Tamil Nadu Urban Land Tax Act, 1966.
Detailed Analysis:
1. Entitlement to Exemption from Urban Land Tax for the Period 1965-1976:
The appellant-Trust sought exemption from paying urban land tax for the period 1965-1976 under the Tamil Nadu Urban Land Tax Act, 1966. The appellant claimed that the land held by it should be exempted as it was recognized as a public charitable trust under Section 12A(a) of the Income Tax Act by an order dated 29.4.1977. However, since the recognition came after the period for which the exemption was sought, the claim for exemption was not valid. The court held that the order recognizing the trust as charitable could not be given retrospective effect.
2. Applicability of Government Orders (G.O.) for Exemption:
The appellant argued that the exemption should be granted based on the norms laid down in G.O.Ms. No. 2625 (Rev) dated 27.12.1976, which provided that institutions recognized as charitable under the Income Tax Act would be exempt from urban land tax. The court noted that while considering the claim for exemption, the authorities were obliged to consider all existing G.Os, including G.O.Ms. No. 1834 dated 29.10.1983, which laid down additional conditions for exemption. The court found that the authorities rightly applied the norms from G.O.Ms. No. 1834 dated 29.10.1983.
3. Retrospective Application of Income Tax Exemption:
The appellant contended that the recognition of the trust as charitable under Section 12A(a) of the Income Tax Act should entitle it to exemption for the period 1965-1976. The court rejected this argument, stating that the recognition by the Income Tax Department on 29.4.1977 could not be applied retrospectively to grant exemption for the earlier period.
4. Compliance with Exemption Norms and Guidelines:
The court examined whether the appellant-Trust complied with the norms and guidelines for exemption. The trust failed to demonstrate that it spent 90% of its income towards its objectives and purposes during the relevant years. Additionally, the lands were used for commercial purposes such as running a cinema theatre, saw mill, and godowns, rather than for charitable purposes. The court emphasized that exemption under Section 27 of the Act required specific application and recommendation by the Empowered Committee, which the appellant did not fulfill.
5. Legal Principles Governing Exemption under Tamil Nadu Urban Land Tax Act, 1966:
The court differentiated between exemptions under Sections 27 and 29 of the Act. Section 27 grants discretionary power to the government to exempt lands or persons from tax if payment causes undue hardship, based on specific application and satisfactory material. Section 29 provides automatic exemption for certain lands owned by specified authorities or institutions. The court held that the appellant did not satisfy the conditions for exemption under either section.
Conclusion:
The court dismissed the appeals, concluding that the appellant-Trust was not entitled to exemption from urban land tax for the period 1965-1976. The authorities correctly applied the norms from G.O.Ms. No. 1834 dated 29.10.1983, and the appellant failed to meet the required conditions for exemption. The recognition of the trust as charitable under the Income Tax Act could not be applied retrospectively, and the trust did not make a specific application for exemption as required under the Act.
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2005 (3) TMI 790
Issues:
1. Maintainability of the applications under section 245Q(1) of the Income-tax Act, 1961.
2. Objection raised by the Commissioner regarding the pending questions before income-tax authorities and the High Court.
Analysis:
Issue 1: Maintainability of the applications under section 245Q(1) of the Income-tax Act, 1961:
The applications were placed before the Authority for passing orders under sub-section (2) of section 245R of the Act. The Commissioner raised objections to the maintainability of the applications, citing that the questions raised were pending before income-tax authorities. The applicants sought advance rulings from the Authority based on a consortium's contract with the Delhi Metro Rail Corporation. The Commissioner argued that the applications were not maintainable due to pending proceedings before income tax authorities and the High Court. The applicants contended that mere filing of returns did not constitute pending questions before the assessing officer. The Authority clarified that without a notice under section 143(2) of the Act, the questions were not considered pending before the assessing officer, making the applications maintainable.
Issue 2: Objection raised by the Commissioner regarding the pending questions before income-tax authorities and the High Court:
The Commissioner objected to the applications based on pending questions before income-tax authorities and the High Court. However, the Authority determined that the questions related to the rate of tax for TDS in other proceedings and were not directly pending before the High Court or income tax authorities. The Authority noted that the applications did not involve the determination of the rate of tax for TDS, which was the focus of the other proceedings. The previous order recalling the applications was based on incorrect verification, which was rectified in the amended applications. Therefore, the Authority found that the bar under clause (i) of sub-section (2) of section 245R was not applicable, allowing the applications for pronouncement of rulings on the questions presented.
In conclusion, the Authority found the applications maintainable under section 245Q(1) of the Income-tax Act, 1961, despite objections raised by the Commissioner regarding pending questions before income-tax authorities and the High Court. The Authority clarified the distinction between the issues raised in the applications and those pending in other proceedings, ultimately allowing the applications for further rulings.
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2005 (3) TMI 789
Issues involved:
Interpretation of notification regarding exemption of paneer and chena from tax under U.P. Trade Tax Act for Assessment Year 1998-99.
Detailed Analysis:
1. Interpretation of Notification Content:
The central issue in the present revision was the interpretation of Entry 40 of the notification no. ST-7038/X(23)/83-U.P. Act XV/48-Order-85, dated 31st January, 1985, regarding the exemption of milk products from tax. The Tribunal had excluded paneer from the exemption based on the Hindi version of the notification, which led to the question of whether paneer and chena are indeed excluded from the tax exemption.
2. Conflict Between Hindi and English Versions:
The applicant argued that in the English version of the notification, the word "cheese" is used instead of "paneer," suggesting a distinction between cheese and paneer as separate items. Relying on the principle that in case of any conflict between Hindi and English versions, the English version prevails, the applicant contended that paneer should not be excluded from the entry of milk products. This argument was supported by a reference to a decision of the Apex Court in a related case.
3. Judicial Precedents and Interpretation:
The Standing Counsel, on the other hand, maintained that chena and paneer are essentially the same item, with paneer being considered a type of soft cheese. Referring to a previous judgment by the Court in the case of Garhwal Paneer Bhandar, Ghaziabad v. Commissioner of Trade Tax, it was established that paneer falls under the category of cheese and is excluded from the scope of exemption under the relevant entry of the notification. The Court in the earlier case had clarified that paneer is a variety of cheese and should not be considered separate from the exemption.
4. Resolution and Upholding of Tribunal's Decision:
After considering the arguments presented by both parties and analyzing the notification content along with the previous judicial interpretations, the Court found no substance in the applicant's argument. It was concluded that there was no conflict between the Hindi and English versions of the notification, and the intent was clear to exclude paneer from the category of milk products exempted from tax. Following the precedent set by the earlier judgment and the interpretation of paneer as a type of soft cheese, the Court upheld the Tribunal's decision, dismissing the revision.
5. Final Decision:
In the final analysis, the Court upheld the order of the Tribunal, finding no error in its decision. Consequently, the revision was dismissed, and the applicant's contention regarding the exemption of paneer and chena from tax under the U.P. Trade Tax Act for the specified Assessment Year was not accepted.
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2005 (3) TMI 788
Issues Involved:
1. Interpretation of the High Court's judgment dated 20.1.2000.
2. Execution of the decree from the Family Court, Bombay.
3. Entitlement to interest on the sum of Rs. 3,25,655/-.
4. Validity of the execution proceedings and subsequent High Court judgment.
Issue-wise Detailed Analysis:
1. Interpretation of the High Court's Judgment Dated 20.1.2000:
The Supreme Court had to interpret the judgment and order dated 20.1.2000 passed by the High Court of Madhya Pradesh, which had set aside the decree of judicial separation and declared the marriage null and void. However, the High Court upheld the decree for maintenance and the return of ornaments or their value, quantified at Rs. 3,25,655/-, with interest at 9% per annum from the date of the Family Court's decree (9.10.1995). The Supreme Court noted that the High Court's direction to pay interest was conditional upon the failure to return the ornaments within a reasonable time.
2. Execution of the Decree from the Family Court, Bombay:
The Family Court had directed the appellant to return the ornaments within one month of the decree, failing which he was to pay their value. The appellant offered to return the ornaments via a letter dated 15.3.2000, which the respondent disputed. The Supreme Court observed that the High Court did not fix a specific time for the return of the ornaments, thus allowing the appellant to return them within a reasonable time.
3. Entitlement to Interest on the Sum of Rs. 3,25,655/-:
The Supreme Court found that the High Court's direction to pay interest was conditional and would only apply if the appellant failed to return the ornaments within a reasonable time. The appellant's offer to return the ornaments in March 2000 was within a reasonable timeframe. Therefore, the appellant was not liable to pay interest on the sum of Rs. 3,25,655/- as the condition for interest had not been met.
4. Validity of the Execution Proceedings and Subsequent High Court Judgment:
The Supreme Court held that the Executing Court and the High Court erred in directing the appellant to pay interest from 9.10.1995, as the High Court's judgment was conditional. The Supreme Court emphasized that judgments must be read as a whole, considering attendant circumstances. The High Court misinterpreted its earlier judgment by not recognizing the conditional nature of the interest payment directive. Consequently, the Supreme Court set aside the High Court's judgment dated 12.3.2004.
Conclusion:
The Supreme Court concluded that the High Court's judgment was not sustainable and set it aside. The appeal was allowed, and the appellant was directed to bear the respondent's costs, quantified at Rs. 10,000/-, to be paid within four weeks.
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2005 (3) TMI 787
Issues Involved:
1. Validity of reassessment proceedings.
2. Denial of deduction under section 80-IA.
3. Eligibility for higher rate of depreciation on Electrically Heated Flameless Furnace.
4. Disallowance for personal utilization of telephone.
5. Disallowance of motor car expenses and depreciation.
Detailed Analysis:
1. Validity of Reassessment Proceedings:
The first ground in all three appeals pertains to the validity or otherwise of the reassessment proceedings. This issue was not pressed by the appellant and thus, was dismissed.
2. Denial of Deduction under Section 80-IA:
The core issue in all three appeals was the denial of deduction under section 80-IA. The assessee, engaged in the annealing and straightening of steel rods, claimed this process as a manufacturing activity eligible for deduction under section 80-IA. The Assessing Officer, after a spot verification survey, concluded that the process did not result in the production of a new article or thing, thus denying the deduction. This decision was upheld by the CIT(A), who compared the activity to retreading of tyres, concluding that no new distinct product was created.
The assessee argued that the annealing process involves significant structural changes, citing various legal precedents and literature to support their claim. The learned counsel referenced the Madras High Court's decision in CIT v. Tamil Nadu Heat Treatment & Fetting Services (P.) Ltd., which recognized heat treatment as a manufacturing activity. The counsel also cited other cases where similar processes were deemed manufacturing activities.
The DR contended that no new article or thing emerged from the annealing process, distinguishing it from the Tamil Nadu Heat Treatment case. However, the tribunal found the assessee's activity similar to the one recognized by the Madras High Court as manufacturing. Thus, the tribunal directed the Assessing Officer to allow the deduction under section 80-IA, recognizing the annealing process as a manufacturing activity.
3. Eligibility for Higher Rate of Depreciation on Electrically Heated Flameless Furnace:
The assessee claimed 100% depreciation on electrically heated flameless furnaces, asserting they were energy-saving devices under Appendix-I, Item No. (3)(iii), Item (b). The Assessing Officer and CIT(A) denied this claim, stating the assessee failed to prove the furnaces met the required criteria.
The assessee provided purchase bills and certificates from suppliers, claiming the furnaces were energy-saving devices. The tribunal noted that some certificates were not presented during the assessment. Consequently, the issue was remanded to the Assessing Officer to verify if the furnaces met the specified criteria and, if so, to allow the higher depreciation rate.
4. Disallowance for Personal Utilization of Telephone:
The respective disallowances for personal utilization of telephone were Rs. 5,000 for assessment years 1995-96 and 1996-97, and Rs. 6,000 for the assessment year 1997-98. These grounds were not pressed by the appellant and thus, were dismissed.
5. Disallowance of Motor Car Expenses and Depreciation:
The assessee contested the disallowance of 1/4th motor car expenses and depreciation for assessment years 1996-97 and 1997-98, arguing it was excessive. After hearing both parties, the tribunal directed the Assessing Officer to restrict the disallowance to 1/5th of the expenses and depreciation.
Conclusion:
In conclusion, the appeals were partly allowed. The tribunal recognized the annealing process as a manufacturing activity eligible for deduction under section 80-IA, remanded the issue of higher depreciation on furnaces for further verification, dismissed the unpressed grounds, and partially allowed the appeal regarding motor car expenses and depreciation.
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2005 (3) TMI 786
The Supreme Court granted leave and remitted the matter back to the Tribunal to consider unjust enrichment. The appellant must inform the respondent about this order. The Appeals stand disposed of accordingly.
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2005 (3) TMI 785
Election petition - Barred by limitation - whether an election petition presented at 4.25 p.m. on 27.8.2003, the last date of limitation, admittedly 10 minutes after the Judge had risen from the open court but was available in chambers within the court premises can be said to be a valid presentation so as to be within the period of limitation? - HELD THAT:- If the court is open, it is desirable that a formal presentation of the election petition is made to the Judge while sitting in open court. As the Judge himself is not expected to scrutinize the defects in the election petition presented to him, Rule 6 expects the election petition to be presented first to the Stamp Reporter of the court and then carried to the Judge for formal presentation. While presentation to the Stamp Reporter of the court is a presentation, the presentation before Judge in open court is a formal presentation. There would be nothing wrong if the election petitioner presents the election petition to the Stamp Reporter whereafter the election petition is carried to the Judge in open court either by the election petitioner or his counsel or by the Stamp Reporter or any official of the Registry under his directions.
The High Court, in its impugned judgment, seems to have thought that the election petition could have been presented only to the Judge and that too in the open court. The Judge would ordinarily sit in open court upto 4.15 p.m. of the day as per the rules or practice of the High Court but that time is not the end of that day. The availability of time falling within the meaning of the word 'day', as provided by Section 81 of the Act, cannot be curtailed by making a provision in the rules contrary to the Act itself.
Ordinarily, no litigant and lawyer would like to delay the presentation till the fag end of the day and then present it at an odd time to the inconvenience of the Judge wherever he may be. However, exceptional situations cannot be completely ruled out. It would be better if the ministerial act of receiving the election petition presented to the High Court is left to the administrative or ministerial staff of the High Court either by clarifying or by making a suitable amendment in the Rules of the Patna High Court.
The learned designated Election Judge of the High Court has erred in holding the presentation to be barred by limitation. The view so taken cannot be countenanced.
The appeal is allowed. The impugned judgment of the High Court dated 10.9.2003 is set aside. The election petition is held to have been filed within prescribed period of limitation. The High Court shall now proceed to deal with the petition in accordance with law.
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2005 (3) TMI 784
Issues:
1. Determination of eviction petition under section 14(1)(e) of the Delhi Rent Control Act.
2. Challenges to the decree for possession and execution proceedings.
3. Allegation of fraud in obtaining the eviction decree.
4. Competency of the revision petition before the High Court.
5. Imposition of exemplary costs on the respondent.
Analysis:
1. The case involved the determination of an eviction petition under section 14(1)(e) of the Delhi Rent Control Act, where the appellant sought possession of the property for personal use due to family expansion. The Additional Rent Controller and the High Court upheld the eviction grounds, dismissing the respondent's objections. The respondent's S.L.P. challenging the High Court's judgment was summarily dismissed by the Supreme Court.
2. Despite multiple court decisions against the respondent, he refused to hand over possession, leading to execution proceedings. The executing court rejected frivolous objections raised by the respondent, including questioning the applicability of the DRC Act and alleging fraud in the ownership document. The Rent Control Tribunal and the High Court upheld the executing court's decision, dismissing the respondent's appeals.
3. Subsequently, the respondent filed a civil suit alleging fraud in obtaining the eviction decree. The Civil Judge and the Senior Civil Judge dismissed the respondent's application for interim relief, finding no prima facie case. The High Court also rejected the respondent's revision application against the appellate court's decision.
4. The respondent's application for review and a second objection petition in the execution proceedings were both dismissed as frivolous. The respondent then filed a revision petition before the High Court, challenging the execution of the eviction decree. The Supreme Court held that the revision petition was incompetent as it pertained to an interlocutory matter, citing precedents to emphasize the importance of preventing abuse of legal processes.
5. Due to the respondent's deliberate delays and lack of bona fides, the Supreme Court quashed the High Court's judgment, emphasizing the need for pleading and proving fraud. Exemplary costs of &8377; 20,000 were imposed on the respondent as a condemnation of his conduct, with directions for the executing court to expedite the execution proceedings. The judgment highlighted the need to deter frivolous litigation and uphold the sanctity of legal processes.
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2005 (3) TMI 783
Issues:
1. Whether the security charged from customers for returnable cylinders, forfeited on non-return, amounts to sale consideration liable to tax.
Analysis:
1. The case involved a Public Limited Company engaged in bottling and distributing domestic cooking gas. The company charged cash security for cylinders and regulators from customers, which was forfeited on non-return. The Assessing Authority considered this forfeited amount as sale of cylinders and brought it to tax. The applicant's appeals were rejected, leading to the present revision under Section II of U. P. Trade Tax Act against the Tribunal's order for the Assessment Year 1999-2000 under the Central Sales Tax Act.
2. The main question was whether the forfeited security amount constituted a sale consideration liable to tax. The applicant argued that the security was for ensuring cylinder return, not for selling cylinders. They contended that the forfeited amount was in the nature of compensation, not sale consideration. The applicant relied on the decision of the Apex Court in United Breweries Ltd. v. State of Andhra Pradesh, emphasizing that the forfeited security was not part of the sale price.
3. The Court examined the definitions of "sale," "sale price," and "turnover" under the Central Sales Tax Act. Referring to the United Breweries case, the Court highlighted that the intention of the parties was crucial in determining whether a sale had occurred. The Court distinguished another case, Kalyani Breweries Ltd. v. State of West Bengal, where forfeited security was considered liable to tax due to lack of communicated terms for refund and equal deposit cost to bottle price.
4. After analyzing the facts and the two Apex Court decisions, the Court concluded that the forfeited security in the present case was not a sale consideration. The terms communicated to customers indicated the security was for cylinder return, not for sale. The Court held that the transaction was a bailment, not a sale, as the parties did not intend to enter a contract for buying and selling cylinders. Therefore, the Tribunal's decision to levy tax on the forfeited amount was deemed erroneous, and the revision was allowed, setting aside the Tribunal's order.
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2005 (3) TMI 781
Validity Of Sanction - disproportionate of assests to his known source of income - Burden to proof - acquittal of the appellant accused u/s 5(2) read with Section 5(1)(e) of the Prevention of Corruption Act 1947 - HELD THAT:- In the present case, a perusal of the sanction order itself shows that Shri C.S. Krishnamurthy's income from all known sources between the period from May 25, 1964 to June 27, 1986 was ₹ 7,91,534.93 that income was from salary, GPF advances, rental income, interest amount from bank accounts and loan amount received from LIC towards house constructions, the dividend income, interest amount and gain in respect of chits received from Navyodaya Sahakra Bank, Vyyalikaval House Building Co-operative Society, Vishalam Chit Funds and Reliance Industries loan received from friends and family members, gain towards sale of scooter/car, sale proceeds of jewellery and income received by family members and the total expenditure incurred by the accused during these period is ₹ 2,41,382.85 and the total assets acquired by the accused both movable and immovable from May 25, 1964 to June 27, 1986 is ₹ 9,51,606.66 ps. Therefore, the accused has to account for difference between the two.
In the present case the learned additional sessions Judge took a very narrow view that all the papers were not placed before the Court to show that there was proper application of mind by the sanctioning authority. The view taken by learned Special Judge was not correct and the learned Single Judge correctly set aside the order.
In the present case, the sanction order itself discloses the facts that the incumbent is being prosecuted under the provisions of the Prevention of Corruption Act for accumulating moveable and immovable assets which is disproportionate to his known source of income and he has failed to give satisfactory account for the same. In the present case, facts mentioned in sanction order are eloquent for constituting prima facie offence u/s 5(2) read with Section 5(1)(e) of the Act. Therefore, there is due application of mind by sanctioning authority and the sanction is valid.
Learned counsel for appellant submitted that offence was alleged to have been committed in 1986, now after lapse of almost 19 years would it be advisable to proceed with the matter. It is a matter of corruption and we cannot give any latitude in such matters. Therefore, under these circumstances, we are of opinion that the view taken by learned Single Judge of the High Court appears to be justified and there is no ground to interfere in the present appeal. Accordingly, the appeal is dismissed. However, nothing said herein or the High Court excepting on the point of sanction should influence the trial court's decision on merits.
The adverse observations made against the trial Judge are deleted.
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2005 (3) TMI 780
The Supreme Court dismissed the petitions due to an inordinate delay of 255 days with no satisfactory explanation given.
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2005 (3) TMI 779
Issues:
1. Credit eligibility for proof machined forged shafts under Rule 57Q of Central Excise Rules.
Analysis:
The case involved a dispute regarding the credit eligibility of proof machined forged shafts under Rule 57Q of the Central Excise Rules. The appellant argued that the shafts were received for use in Mill Roller as capital goods and thus, credit should be allowed. The department contended that a refining/finishing process was necessary before the shafts could be used in the Mill Roller and denied credit on this basis. The appellant cited precedents where credit was allowed in similar situations. The ld. JDR reiterated the grounds of the Commissioner (Appeals), emphasizing that the shafts needed refining/machining to be considered part of the Mill Roller.
The Tribunal analyzed the issue and referred to a previous decision involving U.P. State Sugar Corporation where credit was allowed on mill roller shafts after specific processing to make them usable in a sugar factory. In the present case, it was established that the proof machined shafts required additional processing to fit them into the Mill Roller. The Tribunal held that such processing did not disqualify the appellants from claiming credit, aligning with the precedent set in the case of CCE, Meerut v. U.P. State Sugar Corporation. Consequently, the appeal was allowed, and the Commissioner (Appeals)'s decision was overturned.
In conclusion, the Tribunal's decision clarified that the processing required to fit the proof machined forged shafts into the Mill Roller did not negate the appellants' right to claim credit under Rule 57Q of the Central Excise Rules. By following established precedents and considering the specific circumstances of the case, the Tribunal upheld the appellant's eligibility for credit, emphasizing the importance of the processing activities in making the shafts suitable for their intended use.
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2005 (3) TMI 778
Issues:
1. Validity of detention order based on stale instances.
2. Requirement of providing material to detenu for effective representation.
Issue 1: Validity of detention order based on stale instances
The State Government appealed against the High Court's decision to quash a detention order due to reliance on stale instances. The Supreme Court referred to a previous case and held that if the facts presented to the detaining authority are closely related and the last fact is close to the detention order, earlier incidents cannot be considered stale. The Court applied this principle to the current case, emphasizing the importance of proximity between facts to determine the validity of the detention order.
Issue 2: Requirement of providing material to detenu for effective representation
The respondent argued that under the Andhra Pradesh Prevention of Dangerous Activities of Boot Leggers, Dacoits, Drug-offenders, Goondas, Immoral Traffic Offenders and Land Grabbers Act, 1986, only the manufacture, transport, and sale of arrack unfit for human consumption is prejudicial to public order. The detaining authority must provide the detenu with material supporting the claim that the arrack sold is dangerous to public health to enable effective representation. The State contended that since arrack sale is prohibited in Andhra Pradesh, proving it is dangerous is unnecessary. However, the Court disagreed, stating that proving arrack's danger to public health is crucial to invoke the Act's provisions. Therefore, the detaining authority must provide the detenu with relevant material to ensure a fair opportunity for representation.
In conclusion, the Supreme Court dismissed the appeal, upholding the High Court's decision. The Court emphasized the necessity of providing material to the detenu when detaining them under the Act to prevent the sale of goods dangerous for human consumption. The judgment clarified the requirements for valid detention orders and the detenu's right to access supporting material for effective representation.
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2005 (3) TMI 777
Issues Involved:
1. Validity of the High Court's jurisdiction in reappraising evidence and reversing concurrent findings of fact.
2. Legitimacy of the High Court addressing the genuineness and validity of the settlement deed and will without framing a substantial question of law.
Issue-Wise Detailed Analysis:
1. Validity of the High Court's jurisdiction in reappraising evidence and reversing concurrent findings of fact:
The Supreme Court examined whether the High Court exceeded its jurisdiction under Section 100 of the Civil Procedure Code (CPC) by reappraising evidence and reversing the concurrent findings of fact recorded by the Trial Court and the First Appellate Court. The High Court had held that the properties listed as item nos. 22 to 26 and 29 were not self-acquired properties of Mottaya Poosali but were purchased with joint family funds.
The Supreme Court emphasized that Section 100 CPC restricts the High Court to hearing second appeals only on substantial questions of law. The High Court cannot reappraise evidence or set aside findings of fact unless it is demonstrated that such findings were perverse or based on no evidence. The Supreme Court cited several precedents, including Kshitish Chandra Purkait v. Santosh Kumar Purkait and Santosh Hazari v. Purushottam Tiwari, to underline that the existence of a substantial question of law is a prerequisite for the High Court's jurisdiction under Section 100 CPC.
Upon reviewing the facts, the Supreme Court noted that the properties in question were purchased by Mottaya Poosali between 1952 and 1956 and were treated as his self-acquired properties in the 1970 partition deed. The High Court's reappraisal of evidence and subsequent finding that these properties were acquired with joint family funds was deemed incorrect. The Supreme Court concluded that the High Court had overstepped its jurisdiction by reversing the concurrent findings of fact without a substantial question of law.
2. Legitimacy of the High Court addressing the genuineness and validity of the settlement deed and will without framing a substantial question of law:
The Supreme Court addressed whether the High Court was justified in questioning the genuineness and validity of the settlement deed dated 22.03.1977 and the will dated 23.03.1977 executed by Mottaya Poosali, despite no substantial question of law being framed regarding these issues.
The Supreme Court reiterated that under Section 100 CPC, the High Court is confined to the substantial questions of law framed at the time of admission or subsequently. In this case, the substantial question of law framed pertained only to whether certain properties were joint family properties available for partition. The High Court did not frame any substantial question of law regarding the validity and genuineness of the settlement deed and the will.
The Supreme Court found that the respondents did not challenge the genuineness or due execution of the settlement deed and the will in their pleadings, evidence, or memorandum of grounds of the second appeal. Therefore, the High Court lacked the jurisdiction to address these issues without framing an additional substantial question of law. The Supreme Court held that the High Court's findings on the validity and genuineness of the settlement deed and the will were vitiated and could not be sustained.
Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's judgment, and restored the judgment of the First Appellate Court. The Supreme Court concluded that the High Court had exceeded its jurisdiction under Section 100 CPC by reappraising evidence and addressing issues not framed as substantial questions of law. The properties listed as item nos. 22 to 26 and 29 were confirmed as the self-acquired properties of Mottaya Poosali, and the settlement deed and will were deemed valid and genuine. There was no order as to costs.
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2005 (3) TMI 776
Issues:
1. Legality of treating the entire purchase of Kana as bogus and adding its value to the income of the assessee.
Analysis:
The case involved a reference under section 256(2) of the Income-tax Act, 1961 regarding the legitimacy of adding the value of Kana purchase to the assessee's income. The applicant, a registered firm engaged in rice manufacturing and sale, was found to have failed to explain the quantity of Kana purchased during assessment. The Assessing Officer considered the purchase of 300 quintals of Kana as bogus, adding its value to the income. Despite the applicant accounting for the entire quantity in the sale account, the addition was upheld by the Commissioner of Income-tax (Appeals) and the Tribunal.
The Tribunal noted the absence of purchase vouchers for the Kana, leading to an inquiry from alleged sellers who denied dealing with the quantity claimed by the assessee. The statements of these sellers indicated discrepancies in the assessee's claims. The Tribunal concluded that the purchases were bogus, justifying the addition to the income. The Tribunal rejected the argument that the reflected purchases in sales proved actual transactions, emphasizing the need to add back fictitious purchases to neutralize inflation effects, regardless of favorable profit comparisons.
Upon review, the High Court upheld the Tribunal's decision, stating that the findings were based on evidence and not flawed. The Court affirmed the addition to the income due to the bogus purchases, ruling against the assessee. The judgment emphasized that since the purchases were deemed unverifiable, no set-off benefits could be granted. The Court answered the question in favor of the revenue, supporting the addition to the income without imposing any costs.
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2005 (3) TMI 775
Issues Involved:
1. Recovery and seizure of narcotic drugs.
2. Voluntary statement under Section 67 of the NDPS Act.
3. Applicability of Section 37 of the NDPS Act for granting bail.
4. Conscious possession of narcotic drugs.
5. Presumption under Sections 35 and 54 of the NDPS Act.
6. Arguments and precedents cited by both parties.
7. Court's satisfaction regarding the petitioner's guilt and likelihood of committing an offense while on bail.
Detailed Analysis:
1. Recovery and Seizure of Narcotic Drugs:
The prosecution's case is based on a secret information received by the Narcotic Control Bureau (NCB) on 05.07.2004, leading to the apprehension of a blue Maruti 800 car carrying narcotic drugs. The petitioner and another individual were apprehended, and a polythene bag containing 875 grams of heroin and 1.25 kilograms of opium was recovered from under the seat where the petitioner was sitting.
2. Voluntary Statement under Section 67 of the NDPS Act:
The petitioner allegedly made a voluntary statement under Section 67 of the NDPS Act, admitting the recovery and seizure of the narcotic drugs. The petitioner stated that he had received the polythene bag from an individual named Ashok, on the instructions of his cousin Balbir, without knowing its contents.
3. Applicability of Section 37 of the NDPS Act for Granting Bail:
Section 37 of the NDPS Act imposes restrictions on granting bail for offenses involving commercial quantities of narcotic drugs. The court must be satisfied that there are reasonable grounds for believing that the petitioner is not guilty of the offense and that he is not likely to commit any offense while on bail.
4. Conscious Possession of Narcotic Drugs:
The petitioner's counsel argued that the petitioner did not have conscious possession of the narcotic drugs, as he was unaware of the contents of the polythene bag. The counsel cited several decisions of the Supreme Court to support this argument, emphasizing that the petitioner's statement was exculpatory.
5. Presumption under Sections 35 and 54 of the NDPS Act:
The State's counsel relied on Sections 35 and 54 of the NDPS Act, which presume the existence of a culpable mental state and the commission of an offense unless proven otherwise. The State argued that the petitioner, being the owner of the vehicle and having admitted the recovery, should not be granted bail.
6. Arguments and Precedents Cited by Both Parties:
The State's counsel cited three decisions: Madan Lal v. State of Himachal Pradesh, Customs v. Ahmadalieva Nodira, and Babua alias Tazmul Hossain v. State of Orissa, to support the argument that the petitioner had conscious possession and should not be granted bail. The petitioner's counsel cited Sanjay Dutt v. State and Abdul Rashid Ibrahim Mansuri v. State of Gujarat, arguing that the petitioner did not have conscious possession and should be granted bail.
7. Court's Satisfaction Regarding the Petitioner's Guilt and Likelihood of Committing an Offense While on Bail:
The court examined the materials available, including the petitioner's statement and the circumstances of the recovery. The court found that the petitioner's statement did not constitute a confession and indicated a lack of knowledge about the contents of the polythene bag. The court was satisfied that there were reasonable grounds for believing that the petitioner was not guilty of the offenses charged and that he was not likely to commit any offense while on bail.
Conclusion:
The petitioner was directed to be released on bail on furnishing a personal bond of Rs. 50,000 with two sureties of the like amount to the satisfaction of the concerned trial court. The application for bail was disposed of accordingly.
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2005 (3) TMI 774
The Supreme Court ruled that the product "Himtaj Tel" is classifiable under Tariff Item 30.03, not under Tariff Item 33.05. The decision was based on previous cases and the Appeals were dismissed.
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