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2003 (8) TMI 553
The High Court of Karnataka upheld Annexure-J challenged by the petitioner regarding refund of excise duty. The court directed the petitioner to submit a representation for installment payment within four weeks. If submitted, the respondents are to consider and grant installments as per the law.
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2003 (8) TMI 552
Issues:
Complaint of deficiency of service by the respondent-Bank, National Consumer Disputes Redressal Commission's opinion, Appeal under Section 23 of the Consumer Protection Act, 1986, Approach adopted by NCDRC, Powers of the fora under the Act, Nature of averments in the complaint, Guidelines for determining appropriate forum, Complicated nature of questions, Premature decision by NCDRC.
Comprehensive Analysis:
The appellant, maintaining a Savings Bank Account with the respondent-Bank, alleged deficiency of service due to the wrongful debiting of a substantial amount by honoring cheques with forged signatures and altered figures. The complaint included photocopies of the cheques, revealing discrepancies and suspicion towards an official of the bank. The National Consumer Disputes Redressal Commission (NCDRC) declined to proceed, citing the complexity of the case and the time required for decision, suggesting the complainant approach a civil court. The appellant appealed under Section 23 of the Consumer Protection Act, seeking a fresh hearing by NCDRC.
During the appeal hearing, arguments were presented by both parties' counsels, referring to past judgments to support their positions. The appellant's counsel highlighted the need for the matter to be heard by NCDRC, while the respondent-Bank's counsel supported the NCDRC's decision. The Supreme Court emphasized the establishment of fora under the Act to provide speedy remedies, relieving conventional courts of increasing burdens and delays. The Court clarified that the complexity of evidence or legal issues should not bar access to consumer fora, as they are empowered to follow streamlined procedures.
Referring to previous cases, the Court reiterated that fora under the Act have the authority to handle disputes effectively without necessitating lengthy trials, as they are led by experienced individuals. The Court emphasized that the key factor in determining a forum's suitability is whether the matter can be resolved through a summary inquiry, without the need for extensive evidence. The Court criticized the NCDRC's premature decision and directed a fresh hearing, emphasizing the importance of considering both parties' pleadings before deciding on the nature and scope of the inquiry.
In conclusion, the Court allowed the appeal, set aside the NCDRC's decision, and remanded the case for a fresh hearing in line with the Court's observations. No costs were awarded in the matter, highlighting the focus on ensuring justice and a fair process in consumer dispute resolution under the Consumer Protection Act, 1986.
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2003 (8) TMI 551
Issues involved:
- Appeal against the High Court's decision setting aside the Registrar's order adding respondents to claim cases.
- High Court's decision based on the ground of limitation.
- Appellant's contention of limitation not being raised earlier.
- Justification of the Division Bench for not adding respondents based on limitation.
- High Court's exercise of power under Art.226 in determining limitation.
- Decision of the Supreme Court allowing the appeals on the ground of limitation.
Analysis:
1. The appeals before the Supreme Court challenged the High Court's decision setting aside the Registrar's order adding respondents to the claim cases. The High Court based its decision on the ground of limitation, relying on O.1 R.10 of the Civil Procedure Code, 1908, and S.21 of the Limitation Act, 1963. The appellant, a bank, claimed that the respondents were members who had failed to repay a borrowed sum, leading to the claim cases. The applications for impleading the respondents were allowed by the Registrar but challenged under Art.226 of the Constitution before the Single Judge, who dismissed the writ petition. The High Court then disposed of the appeals, primarily focusing on the limitation issue.
2. The appellant contended that the issue of limitation was not raised earlier in the proceedings before the Registrar or the Single Judge. They argued that they could have provided evidence to show that the claim was within the limitation period if the issue had been raised. Additionally, the appellant highlighted that the Registrar's order was appealable under S.76 of the Act, suggesting that the High Court should not have entertained the writ petition due to the alternative remedy available.
3. On the other hand, the respondents' counsel justified the Division Bench's decision, stating that the respondents should not have been added as parties due to the claim being time-barred. They argued that the appellant's cause of action arose before the limitation period, as per the available pleadings. The respondents emphasized that the Division Bench correctly considered the limitation plea, even though it was not raised earlier in the proceedings.
4. The Supreme Court found the limitation issue to be a mixed question of law and fact. The Court criticized the High Court for not determining the factual basis before exercising its power under Art.226 and engaging in a judicial review. Consequently, the Supreme Court allowed the appeals solely on the ground of limitation, without delving into other raised questions. The Court clarified that the added respondents could still raise the limitation contention before the Registrar without reopening the order to add them as parties, emphasizing that no decision was made on the merits of the cases.
5. In conclusion, the Supreme Court allowed the appeals, highlighting the importance of properly addressing the issue of limitation in legal proceedings. The Court's decision focused on procedural aspects and the High Court's jurisdiction under Art.226, underscoring the significance of raising relevant legal issues at the appropriate stages of litigation.
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2003 (8) TMI 550
Issues Involved:
1. Attachment before judgment and injunction for obtaining security for a potential decree.
2. Allegations of fraudulent misrepresentation and non-disclosure by the defendants.
3. Validity and implications of agreements and Private Placement Memoranda (PPM).
4. Prima facie case and balance of convenience for interim relief.
5. Jurisdiction and enforcement of foreign judgments.
6. Suppression of material facts by the plaintiff.
Issue-wise Detailed Analysis:
1. Attachment Before Judgment and Injunction:
The plaintiff sought orders for attachment before judgment and injunction to secure a potential decree. The court examined whether the defendants intended to obstruct or delay the execution of any decree. It was noted that the plaintiff failed to show that the defendants were dealing with their property to obstruct or delay execution. The court emphasized that such orders require clear evidence of intent to obstruct or delay, which was not provided.
2. Allegations of Fraudulent Misrepresentation and Non-Disclosure:
The plaintiff alleged that the defendants induced them to invest in the Iridium system through fraudulent misrepresentation and non-disclosure. The court scrutinized the representations made in the PPMs and other documents. It was found that the PPMs contained several disclaimers and risk factors, indicating that the plaintiff was aware of the potential issues with the Iridium system. The court concluded that the plaintiff had not made out a strong prima facie case of fraudulent misrepresentation.
3. Validity and Implications of Agreements and PPMs:
The court examined the agreements and PPMs in detail. It was noted that the agreements contained clauses indicating that the plaintiff had full access to information and understood the risks involved. The court found that the transactions were entered into by mature investors who were capable of evaluating the risks. The court also noted that the 1995 PPM, which highlighted the limitations of the Iridium system, was available to the plaintiff through their representative on the Board of Directors.
4. Prima Facie Case and Balance of Convenience for Interim Relief:
The court considered whether the plaintiff had established a prima facie case and whether the balance of convenience favored granting interim relief. The court found that the plaintiff had not established a strong prima facie case of fraudulent misrepresentation. It was also noted that the defendants had invested significant amounts in the Iridium system and had not acted to obstruct or delay execution of any decree. The court concluded that the balance of convenience did not favor granting interim relief.
5. Jurisdiction and Enforcement of Foreign Judgments:
The court addressed the issue of enforcing a potential decree in foreign jurisdictions. It was noted that the U.S.A. is not a reciprocating territory under the Foreign Judgment (Reciprocal Enforcement) Act, 1923, but the decree could be enforced under the Uniform Foreign Money-Judgments Recognition Act, 1962. The court found that the judgment of this court would be conclusive and enforceable in the U.S.A. and the U.K., where the defendant had significant assets.
6. Suppression of Material Facts by the Plaintiff:
The court found that the plaintiff had suppressed material facts, including the fact that a winding-up petition had been admitted against them. This suppression was considered significant as it affected the plaintiff's capacity to provide an undertaking in damages. The court concluded that this suppression disentitled the plaintiff to any equitable relief.
Conclusion:
The court dismissed the plaintiff's motions for attachment before judgment and injunction. It was held that the plaintiff had not made out a strong prima facie case of fraudulent misrepresentation, and the balance of convenience did not favor granting interim relief. The suppression of material facts by the plaintiff further disentitled them to any relief. The court directed the defendants to give notice if they intended to cease business activities in India and continued the ad interim order for four weeks.
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2003 (8) TMI 549
The case involved M/s. Dabur India Ltd. and the computation of quantity discount for certain food items. The dispute was about how the quantity discount should be calculated. The appellate tribunal ruled that the method of computation is not relevant for assessing the value of goods. The duty demand of about Rs. 47,000 was set aside, and the appeal was allowed.
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2003 (8) TMI 548
Issues Involved:
1. Validity of the assessment orders under section 143(3) for AY 1988-89 and 1989-90.
2. Legitimacy of the Commissioner's revision under section 263.
3. Determination of whether the increased ground rent liability was contingent or ascertained.
4. The effect of the assessee's dispute or acceptance of the increased ground rent liability.
Detailed Analysis:
1. Validity of the Assessment Orders under Section 143(3) for AY 1988-89 and 1989-90:
The assessee filed appeals against the assessment orders under section 143(3) for AY 1988-89 and 1989-90. The Assessing Officer had included the increased ground rent demanded by Bombay Port Trust in the annual letting value of the property and allowed the deduction for the same. The Commissioner of Income-tax (CIT) later revised these orders under section 263, claiming the increased ground rent liability was not ascertained but contingent, thus should not have been allowed as a deduction. The assessee contested this revision, arguing that the liability was definite and enforceable, as evidenced by the bills raised by Bombay Port Trust and the lack of any dispute from the assessee.
2. Legitimacy of the Commissioner's Revision under Section 263:
The CIT initiated proceedings under section 263, asserting that the Assessing Officer's orders were erroneous and prejudicial to the interests of the revenue because the increased ground rent liability was disputed and contingent. The CIT held that the liability had not crystallized and thus could not be allowed as a deduction. The assessee argued that the assessment orders had merged with the appellate orders of the CIT(A), and as per Explanation (c) to section 263(1), the CIT could not revise matters already decided in appeal. However, the CIT maintained that the specific issue of whether the increased liability had crystallized was not adjudicated by the CIT(A), thus falling within his revisional jurisdiction.
3. Determination of Whether the Increased Ground Rent Liability was Contingent or Ascertained:
The main contention was whether the increased ground rent liability was ascertained or contingent. The CIT argued it was contingent as the assessee had not made any payments and had disputed the enhancement. The assessee countered, stating it had accepted the increased liability as per the sub-lease agreement and had not disputed it in any court. The CIT(A) found that the bills raised by Bombay Port Trust were enforceable and there was no record of the assessee disputing the liability, thus deeming the liability definite and ascertained.
4. The Effect of the Assessee's Dispute or Acceptance of the Increased Ground Rent Liability:
The Assessing Officer, following the CIT's revision under section 263, disallowed the deduction for the increased ground rent, considering it contingent due to the alleged dispute. The assessee provided evidence that neither it nor the original lessee had disputed the liability. The CIT(A) agreed with the assessee, noting that the liability was definite, ascertained, and enforceable, and the Assessing Officer's disallowance was based on incorrect presumptions. The Tribunal upheld this view, finding no material evidence to support the revenue's claim of a dispute, thus cancelling the orders under section 263 and allowing the assessee's appeals.
Conclusion:
The Tribunal concluded that the orders under section 263 and the subsequent assessment orders were based on incorrect assumptions about the nature of the liability. The increased ground rent liability was definite and enforceable, not contingent. Therefore, the appeals filed by the assessee were allowed, and the revenue's appeals were dismissed.
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2003 (8) TMI 547
Modvat credit facility - whether there is a time limit for availing credit under the Modvat Scheme on capital goods and if prior permission is required for taking credit as provided under the rule - HELD THAT:- The availability of modvat credit has to be determined at the time when the goods are received in the factory and if no modvat credit was available at that time, the question of subsequently making available any modvat credit would not arise. In the present case, we are concerned with a composite mill and the final product at the third phase is dutiable. According to us, decision of a learned Single Member in Kailash Auto Builders Ltd. vs. CCE (A), Bangalore 2001 (47) RLT 950 (CEGAT-Ban.) relied on by the respondent-assessee is more akin to the facts of the present case. It was held therein that there is no time limit for utilising the credit and merely because there was no dutiable items, which were required to be cleared, on payment of duty on the date when the capital goods credit was taken, that credit could not be denied. We, therefore, agree with the learned Commissioner (Appeals) that the assessee is entitled to avail the credit on the capital goods installed during implementation of second phase of the project when the composite mill had reached its third phase and where the processed grey fabrics are dutiable items.
In the result, the appeal fails and it stands dismissed.
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2003 (8) TMI 546
Forfeiture of bid security - Tender notice calling for tenders for collection of toll on a portion of the highway running through Rajasthan - Jurisdiction of a Writ Court in contractual disputes - HELD THAT:- It is settled law that a contract of guarantee is a complete and separate contract by itself. The law regarding enforcement of an "on demand bank guarantee" is very clear. If the enforcement is in terms of the guarantee, then Courts must not interfere with the enforcement of bank guarantee. The Court can only interfere if the invocation is against terms of the guarantee or if there is any fraud. Courts cannot restrain invocation of an "on demand guarantee" in accordance with its terms by looking at terms of the underlying contract. The existence or non-existence of an underlying contract become irrelevant when the invocation is in terms of the bank guarantee. The bank guarantee stipulated that if the bid was withdrawn within 120 days or if the performance security was not given or if an Agreement was not signed, the guarantee could be enforced. The bank guarantee was enforced because the bid was withdrawn within 120 days. Therefore, it could not be said that the invocation of the bank guarantee was against the terms of the bank guarantee. If it was in terms of the bank guarantee, one fails to understand as to how the High Court could say that the guarantee could not have been invoked. If the guarantee was rightly invoked, there was no question of directing refund as has been done by the High Court.
The Bid security was given to meet a specific contingency viz. non-withdrawal of the offer within 120 days. The contingency having arisen, Appellants were entitled to forfeit. It may only be mentioned that in the proposed Agreement there is a clause which provides that if there is a delay on the part of the Appellants, which results in delay in the work of collection of toll, the amount payable by the Respondent would be reduced pro-rata. Thus by reason of the delay Respondent would not have suffered. Also Respondent was well aware that 120 days would end on 28th November, 1997. Thus the Respondent was aware when he gave his offer, that acceptance could be delayed till 28th November, 1997. Thus non-acceptance till 20th November, 1997 was not a ground would justify action of Respondent in withdrawing his offer.
Thus, the impugned Judgment is set aside. The Appeal is accordingly allowed. The Writ Petition of the Respondents shall stand dismissed. There will be no order as to costs.
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2003 (8) TMI 545
Acts of oppression and mismanagement in the affairs of the Company - violation of certain terms of the SHA - arbitration proceedings - CLB's power to exercise its jurisdiction - HELD THAT:- The petition in entirety elaborates the terms of the SHA and the Articles of Association of the Company, relationship among the respondents, correspondence between the RPG Group and the Vodafone Group resulting in the proposal for sale of the Vodafone Group shareholding in the second respondent in favour of the sixth respondent, said to be in violation of the SHA etc. Apart from these allegations, which are all directly arising out of the SHA, I do not find any other substantial acts of oppression and mismanagement alleged in the Company Petition save that respondent Nos. 7 and 8 have aided and abetted the Vodafone Group and respondent No. 6 to act against the SHA. At this juncture, it is sufficient to refer to the averments of the petitioner made in paragraph 30 at page 45 of the petition to the effect that "respondents 2 to 5 are acting in breach of the Shareholders Agreement of August 19, 1995, as amended from time to time and/or the Articles of Association of the Company as per particulars".... stated through out the Company Petition thereon. In other words, the petitioner admits that the matters complained of in the Company Petition principally arise out of the SHA. Therefore, there is no need for any bifurcation of the subject matter of the action before the CLB, in which case the decision in Sukanya Holdings (P) Ltd. [2003 (4) TMI 435 - SUPREME COURT] does come to the aid of the petitioner. Thus, there is no doubt that the entire foundation of the petition is on the SHA and there is substance in the arguments of Shri Dwarkdas, learned Senior Counsel for the applicant that the matters agitated in the Company Petition are arising out of and in connection with the SHA. Accordingly, this issue is answered in the affirmative.
It is on record that the petitioner, the second respondent and the ninth respondent are parties to the SHA. It is already found that the Company is bound by the SHA. The respondent Nos. 3 to 5 belonging to the Vodafone Group are parties to the Company Petition, which are in my view not formal parties, more so, when the second respondent, forming part of the Vodafone Group is a party to the Company Petition. Similarly, respondent Nos. 7 & 8, directors of the Company, are made parties to the Company Petition on the ground that they have abetted the Vodafone group and the sixth respondent to act in the manner oppressive to the petitioner, but no prima facie case has been made out against them either in the Company Petition or at the time of arguing the application. I do not find any reason for impleadment of respondents 9 & 10, being shareholders of the Company as parties to the Company Petition, against whom no reliefs have been claimed. The petitioner cannot frustrate the SHA, as rightly pointed out by Shri Dwarkdas, by merely joining third parties, not being formal parties to the present proceedings, as enunciated in H.G. Oomer Sait v. O. Aslam Sait [2001 (6) TMI 821 - MADRAS HIGH COURT]. The reliefs for the alleged acts of oppression and mismanagement, when established can be granted even in the absence of the sixth respondent and therefore, the sixth Respondent, in my view, is not a formal party to the Company Petition. In these circumstances, the main parties to the Company Petition are found to be the parties to the SHA. I, therefore, find commonality of the main parties to the present proceedings and the SHA.
In the present case, there is no doubt that the CLB is seized of a Section 397/398 proceeding initiated by the petitioner in the affairs of the Company, which arises out of the SHA containing arbitration clause to refer the parties to arbitration and that the second respondent, being one of the parties to the SHA, has made this application for referring the parties to arbitration. It is not the case of either of the parties that the SHA is null and void, inoperative or incapable of being performed. I am, therefore, of the view that the requirements of Section 45 of the Act, 1996 are found to be fulfilled.
It is, therefore, free from doubt that the third respondent is holding company of the second respondent. The respondents 2 & 3 are under the control of the respondents 4 & 5. Thus, the question of piercing the corporate veil of respondents 3 to 5 does not arise.
Having found all the three issues in the affirmative and the requirements of Section 45 of the Act, 1996 are duly met, the CLB is obliged to proceed in accordance with the mandatory provisions of Section 45 and refer the parties to arbitration, as held by the CLB in Naveen Kedia v. Chennai Power Generation Ltd. [1998 (6) TMI 575 - COMPANY LAW BOARD, CHENNAI] and Magotteaux International [1999 (12) TMI 876 - COMPANY LAW BOARD NEW DELHI]. Accordingly, I am inclined to refer the parties to arbitration in accordance with the Rules of Arbitration of the International Chamber of Commerce as provided in Clause 23.1 of the SHA. Ordered accordingly. Thus, the interim orders made by this Bench stand vacated. The application is disposed of in these terms.
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2003 (8) TMI 544
Applicability of Section 73 - speculation loss - set off of losses incurred in the business of purchase and sale of shares against the other income - interest on advances - HELD THAT:- From the facts of the assessee's case enumerated earlier, it may be noted that the dividend income earned by the assessee is attributable to the equity shares of Reliance Industries Ltd., held by the assessee as stock-in-trade in its business of purchase and sale of shares. In other words, the dividend received by the assessee is not attributable to investments by the assessee in shares.
It is obvious from the above that when the shares are held as part of trading asset, dividends on such shares would form part of income from business of the assessee. In the case before us also, admittedly, the assessee is carrying on the business of purchase and sale of shares and that the shares are held as stock-in-trade. The decision of the Apex Court in Western States Trading Co. (P.) Ltd. v. CIT [1971 (1) TMI 11 - SUPREME COURT] squarely applies to the facts of the assessee';s case. If the impugned dividend income is brought to tax by applying the decision of the Apex Court, the entire income of the assessee would be income from business and there would be no income at all under the heads, "Interest on securities, Income from house property, Capital gains and Income from other sources". In this view of the matter, the gross total income of the assessee will consist of only business income and the assessee's case will fall within the Explanation to section 73 and not in the excluded category thereof.
It would thus appear that the definition of "Investment Company" is similar to Companies which fall into excluded category under Explanation to section 73. In that case, gross total income of the assessee was ₹ 19,66,798 out of which, ₹ 10,67,474 happens to form the income from House property, Other sources and Capital gains. The Assessing Officer held the company to be an investment company within the meaning of section 109(ii) of the Act. On the basis of that, the income from the aforesaid source was more than 50% of its gross total income. On appeal, the CIT(A) and the Tribunal did not agree with the finding of the Assessing Officer.
It is an undisputed fact that the assessee before us is engaged mainly, which word is akin to wholly in the business of purchase and sale of shares. If that be so, in our opinion, the decision (supra) of the Hon'ble Jurisdictional High Court would not render any assistance to the assessee and the assessee's case would not fall within the excluded category of Explanation to section 73. In other words, the case of the assessee, in our considered opinion, falls within the ambit of the Explanation to section 73.
The conclusion which emerges from the discussion above is that the loss from trading in shares has to be treated as speculation loss. In this view of the matter, we reverse the findings of the CIT(A) on the point and allow ground No. 1 of the revenue.
For statistical purposes, the appeal is treated as allowed.
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2003 (8) TMI 543
Issues:
1. Grant of Modvat Credit under Rule 57Q of the CE Rules for capital goods for Chlorine Evaporating plant.
2. Dispute regarding the location of the unit manufacturing liquid chlorine.
3. Proper filing of declaration under Rule 57T disclosing installation details of Chlorine Evaporation Plant.
Issue 1: Grant of Modvat Credit under Rule 57Q:
The Revenue contested the grant of Modvat Credit under Rule 57Q for capital goods for a Chlorine Evaporating plant, arguing that the units involved were separate. The Commissioner (Appeals) examined the agreement between the parties, noting the installation of the evaporator unit at SPIC-HCD by the appellants within the premises of SPIC-HCD. The Commissioner considered the interconnection of the plant by pipelines and its exclusive use by the appellants in manufacturing Epichlorohydrin. Citing relevant case laws, the Commissioner concluded that the plant at SPIC-HCD could be deemed as the factory of the appellants, making the capital goods eligible for Modvat Credit. The penalty was also vacated due to lack of suppression.
Issue 2: Dispute over the location of the unit manufacturing liquid chlorine:
The Revenue argued that the unit manufacturing liquid chlorine was not inside the factory and that the declaration did not disclose installation details properly. However, the Commissioner upheld the order, emphasizing the disclosure of the location of the Chlorine evaporation plant at SPIC-HCD by the assessee. The Commissioner considered the interconnection of the plant and its use in the manufacturing process, concluding that the capital goods were eligible for Modvat Credit based on established legal principles.
Issue 3: Proper filing of declaration under Rule 57T:
The Revenue contended that the declaration under Rule 57T did not mention the installation of the Chlorine evaporation Plant at SPIC-HCD, questioning the validity of the benefit granted. The Commissioner, after reviewing the records and arguments, affirmed the correctness of the order, highlighting the disclosure of the plant's location by the assessee and the applicability of legal precedents supporting the eligibility of capital goods for Modvat Credit. The Commissioner referenced a Supreme Court judgment and a Circular by the Central Board of Excise and Customs to support the decision.
In conclusion, the Tribunal upheld the Commissioner's order, finding it legally sound and dismissing the Revenue's appeal. The judgment reaffirmed the eligibility of capital goods for Modvat Credit based on the location and usage in the manufacturing process, in line with established legal principles and precedents.
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2003 (8) TMI 542
Guides by profession - Fixation of age limit for renewal of identity cards for guides - legal sanction behind the conditions - right guaranteed to all citizens under Article 19(l)(g) of the Constitution of India - HELD THAT:- The right which is guaranteed to all citizens under Article 19(l)(g) of the Constitution of India is to practice any profession or to carry on any calling, trade or business. Clause (6) of the article 19(1) however, places a restriction that nothing would prevent the State from making any law imposing reasonable restrictions in exercise of the right in the interest of general public Sub-clauses (i) and (ii) further provide that professional and technical qualification as may be thought necessary for practicing the profession can always be prescribed and exclusion of carrying on of any calling, trade or business etc. is also envisaged which is also carried on by a State or by a Corporation owned and controlled by the State. Subject to above noted restrictions the valuable right as provided under Article 19(l)(g) is available to all the citizens who are free to choose any trade, business, calling or profession etc. It obviously, also includes the manner and terms in which they will carry on their profession, but again subject to reasonable restrictions which may be thought necessary by the State in the interest of general public. On the other hand, once a citizen voluntarily chooees to join government service or any other service, he would obviously be free to do so but he would be bound by the terms and conditions of the service as may be provided under the law or by contract of service.
The conditions of the identity card/ licence issued by the respondent, on the face of it, does not seem to be a reasonable restriction. It amounts to total prohibition to carry on the profession of one's own choice after attaining a particular age. It is true, even total prohibition upon carrying on one's profession can be imposed by way of regulatory measure but for doing so condition-of public interest must be fulfilled. It is not to be taken lightly; it must pass through a stringent test. There are a number of callings and professions in which people are engaged even after attaining the age of 60 or 65 years and in pursuing such self-employment and private profession they find means of their livelihood, without causing any harm to public interest. Such is the case in hand too. The reason which has been indicated in the case of J.K. Agarwal, (supra) which found favour in the Division Bench decision of V.K. Chadha, (supra) followed in the impugned judgment of the High Court does not contain such reasons which can be said to be reasonable enough to curtail totally the right of carrying on profession of one's choice on attaining a particular age. No element of public interest is involved.
It is better to leave it for those who are in the field namely, carrying on their profession and the consumers of their services. The purpose sought to be achieved as indicated in J.K. Agarwal's case (supra) that it may promote tourism is far fetched and unrealistic. We have already considered this object sought to be achieved by placing the restriction of age. The tourists are attracted by the place, its beauty, importance and historical background etc. and not because of the more energetic guides. No harm is going to be caused to the general public if young and old people both are professing their profession of guides and are available for the service to the tourists.
We find no reasonable ground to have put a condition of age bar, whereafter a guide may not be allowed to continue his profession as it does not fall in any of such categories which may justify placing such restrictions completely debarring him to act as guide. Curtailment of freedom must have some strong reasons and real nexus with the purpose sought to be achieved. It would not be imposed merely because it is permissible for the State to do so.
Thus, we allow the appeals, set aside the judgment and order passed by the High Court and the orders impugned by the appellants refusing to renew their 'identity cards' and we hold the Clause No. 17 of the conditions as ultra vires and the same is quashed.
The respondents shall bear the costs of the appeals, which we assess at ₹ 10,000 for each appeal.
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2003 (8) TMI 541
Issues Involved:
1. Inclusion of bulk drugs in the First Schedule to the Drugs (Price Control) Order, 1995.
2. Interpretation of "turnover" for the purpose of price control.
3. Consideration of export sales in turnover calculation.
4. Criteria for market competition and monopoly situation.
5. Alleged discrimination between drugs.
Summary:
1. Inclusion of Bulk Drugs in DPCO, 1995:
The Union of India appealed against the Bombay High Court's judgment which quashed the inclusion of seven bulk drugs in the First Schedule to the DPCO, 1995. The High Court held that these drugs should not have been included under the DPCO, 1995, and thus, price fixation for these drugs was invalid. The Supreme Court emphasized that the Government must adhere to its own policy guidelines when exercising delegated legislative power, and any deviation without justification could be arbitrary and violative of Art. 14 of the Constitution.
2. Interpretation of "Turnover":
The Supreme Court clarified that "turnover" in the Drug Policy, 1994 represents the sale value of bulk drugs sold as such or in the form of formulations. The Court rejected the Government's interpretation that turnover includes the value of total production and imports, emphasizing that only what is sold and marketed can be considered as turnover.
3. Consideration of Export Sales:
The Court agreed with the High Court that export sales should not be included in the turnover calculation. The term "turnover" should be understood in the context of domestic usage and consumption, as indicated in the Drug Policy, 1994.
4. Criteria for Market Competition and Monopoly Situation:
The Supreme Court upheld the Government's view that only single ingredient formulators should be considered for assessing market competition under Cl. (iii) of para 22.7.2 of the Drug Policy. The Court noted that the High Court failed to critically examine the factual basis of the writ petitioners' claims regarding the number of formulators and their market share.
5. Alleged Discrimination Between Drugs:
The Supreme Court found the High Court's acceptance of the plea of discrimination between drugs to be unfounded. The Court emphasized that the exclusion of some drugs from the DPCO, even if unjustified, cannot be a ground to claim exclusion of other drugs on the principle of parity.
Conclusion:
The Supreme Court set aside the High Court's judgment and remanded the writ petitions for reconsideration. The High Court was directed to re-examine the applicability of the criteria laid down in para 22.7.2 of the Drug Policy, 1994, in light of the Supreme Court's observations. The appeals were allowed, and the recovery of 50% of the 'overcharged' amounts was permitted pending fresh determination by the High Court.
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2003 (8) TMI 540
Assessee engaged in business of hire purchase of vehicles - company were provides an arrangement for the security of loan given - such transaction is a nature of loan/advance and the "hire charges" received on such transactions treated as the nature of interest? -Applicability of CBDT Circulars - HELD THAT:- The fact that it is registered with RBI as a hire purchase company would not make any difference. Further, we also noted from the order of CIT (A) -II, Agra that the assessee-company, had obtained loan from bank and for this purpose, the vehicles were shown as its stock. Even if it is so, the nature of transaction would not change. It is an internal matter between the bank and the assessee-company. Merely because the bank accepted the vehicle as stock of the company, the real nature of the transaction would not change. Despite this, it would be open to scrutiny as to what was the real nature of the transaction. Moreover, the bank is merely interested in security of loan given by it. From the letter dated 9-1-1997 issued by Central Bank of India granting finance limit of cash credit besides stock collateral security of substantial amount in the form of movable or immovable properties were also obtained by the bank. It has also been desired by the bank that before release of enhanced facilities, fresh equitable mortgage of these properties had to be recorded and formalities regarding creation of bank charge with ROC had to be completed. It was also desired that shares/debentures should be transferred in the bank’s name. Beside these, guarantees from three guarantors of more than ₹ 95,00,000 were also obtained. It is also noted that undertaking from the purchaser of vehicle was also obtained by the bank. In view of all these facts, since the bank had already secured its advance against a number of securities, it was a not very much concerned to ascertain as to whether the vehicles were actually the stock of the company or not.
Similar view has also been expressed by the Constitutional Bench of Hon’ble Supreme Court in the case of Padma Sundra Rao v. State of Tamil Nadu [2002 (3) TMI 44 - SUPREME COURT], wherein it is held that the Court should not place reliance on the decisions without discussing as to how the factual situation fitted in with the fact situation of the decision on which reliance is placed. They concurred with the view that there was always a peril in treating the words of a speech or judgments though they were words in a legislative enactment, and it was to be remembered that judicial utterances are made in the light of the facts of a particular case. In view of the above, no help can be drawn by the assessee-company in its case.
Thus, we are of the view that the assessee-company is engaged in financing business and only, advancing loan on interest and by no stretch of imagination it can be considered as a Hire Purchase Company. Thus, we dismiss all the three grounds of appeal of the assessee-company and uphold the order of CIT (A) -II, Agra for the assessment years 1994-95, 1995-96, 1996-97, 1997-98 and 1999-2000.
Consequently all the appeals preferred by the assessee-company are dismissed
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2003 (8) TMI 539
The High Court of Allahabad requested the Tribunal to reconsider the case regarding extra shift allowance and machinery depreciation based on further evidence, following the judgment in Saraswati Industrial Syndicate Ltd. v. CIT (1999) 237 ITR 11. The Tribunal was instructed to allow both parties to produce additional evidence and then decide on the entitlement to depreciation at a higher rate.
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2003 (8) TMI 538
Issues Involved:
1. Validity of the 'no objection certificate' issued by the AO under s. 195.
2. Whether the payment to MEP falls under 'fees for technical services' as per the India-UK DTAA.
3. Jurisdiction of the CIT under s. 263 to revise the AO's order.
4. Applicability of the Double Taxation Avoidance Agreement (DTAA) provisions over the IT Act, 1961.
Summary:
1. Validity of the 'no objection certificate' issued by the AO under s. 195:
The core grievance of the assessee was that the 'no objection certificate' issued by the AO, which authorized the remittance after deducting tax at source @ 5%, was not prejudicial to the interest of the Revenue. The assessee argued that no tax was required to be deducted at source from the remittance in question.
2. Whether the payment to MEP falls under 'fees for technical services' as per the India-UK DTAA:
The Tribunal examined the scope of 'fees for technical services' under Art. 13(4) of the India-UK DTAA. It was concluded that the services rendered by MEP did not make available technical knowledge, experience, skill, know-how, or processes to the assessee. Therefore, the payment to MEP was not covered under 'fees for technical services' as per the DTAA, and no tax was exigible on the payment.
3. Jurisdiction of the CIT under s. 263 to revise the AO's order:
The CIT initiated revision proceedings under s. 263, arguing that the payment was taxable @ 20% and the AO's order was erroneous and prejudicial to the Revenue. However, the Tribunal found that while the AO's order was erroneous, it was not prejudicial to the interests of the Revenue since no tax was required to be deducted. Thus, the conditions for invoking s. 263 were not satisfied.
4. Applicability of the Double Taxation Avoidance Agreement (DTAA) provisions over the IT Act, 1961:
The Tribunal reiterated that as per s. 90(2) of the IT Act, the provisions of the DTAA override the provisions of the IT Act to the extent they are more beneficial to the assessee. The Tribunal cited the jurisdictional High Court's decision in CIT vs. Davy Ashmore India Ltd. and CBDT Circular No. 333, which clarified that the DTAA provisions prevail over the IT Act in case of conflict.
Conclusion:
The Tribunal, by majority view, held that the payment made to MEP was not exigible to tax in India under the India-UK DTAA. Consequently, the CIT's order under s. 263 was canceled, and the AO's order directing the deduction of tax @ 5% was restored. The appeal was allowed.
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2003 (8) TMI 537
Issues:
Refund claims hit by the bar of Unjust enrichment.
Analysis:
The issue in this case revolved around whether the refund claims of the appellants were affected by the doctrine of Unjust enrichment. The appellants had initially claimed the benefit of exemption under a specific notification, but their claims were not accepted, leading them to discharge duty liability at a higher rate under protest. Subsequent to a series of adjudication and appeals, their claim to the exempted rate was eventually accepted. However, the refund of the excess duty paid was contested on the grounds of Unjust enrichment, as it was alleged that the appellants had passed on the higher duty payments to their buyers. The impugned orders directed the amounts collected in excess to be deposited in the Consumer Welfare Fund, deeming the refund claims as barred due to Unjust enrichment.
The Finance Minister's explanation behind the exemption notification was crucial in understanding the background of the case. The notification aimed to provide relief to new cement units by granting a rebate on excise duty for cement production. The appellants, seeking the benefit of this exemption from March 1987, faced challenges in obtaining approval for lower duty rates initially, resulting in the payment of higher duties under protest. Despite eventually succeeding in having their claims accepted, the issue of Unjust enrichment arose, leading to the refund claims being contested and ultimately ordered to be deposited in the Consumer Welfare Fund.
The appellants argued that the doctrine of Unjust enrichment should not apply to their case since the original duty payments were made under protest. They relied on a Supreme Court decision in the case of Sinkhai Synthetics and Chemicals Private Limited vs. CCE, Aurangabad, to support their contention. The Supreme Court's ruling in that case established that the bar of Unjust enrichment does not apply to refunds when the original duty payments were made under protest. The appellants' counsel emphasized this point during the appeals, leading to a reconsideration of the lower authorities' orders.
Upon reviewing the records and submissions from both parties, the Tribunal acknowledged that the original duty payments in both cases were made under protest. Following the Supreme Court's precedent, the Tribunal concluded that the doctrine of Unjust enrichment did not apply to such cases. Consequently, the lower authorities' orders were deemed unsustainable, and the appeals were allowed in favor of the appellants. The Tribunal directed the lower authorities to expedite the payment of the refund amounts to the appellants, recognizing their rightful claims to the rebate that had been delayed for over a decade.
In conclusion, the judgment highlighted the significance of the Unjust enrichment doctrine in refund claims and clarified that payments made under protest are exempt from this doctrine. The case underscored the importance of legal precedents in interpreting and applying such doctrines, ultimately leading to a favorable outcome for the appellants after a prolonged legal battle.
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2003 (8) TMI 536
Issues Involved:
1. Invocation of the extended period for demand of duty alleging suppression.
2. Imposition of penalties under Section 11AC and Rule 173Q.
3. Demand of interest under Section 11AB.
4. Inclusion of amortized cost of moulds in the assessable value of goods.
Detailed Analysis:
1. Invocation of the Extended Period for Demand of Duty Alleging Suppression:
The appellants contested the finding of the Commissioner (Appeals) that there was suppression of fact due to non-disclosure of free receipt of moulds from customers. They argued that the Central Excise Act/Rules do not mandate communication of such aspects to the department. The appellants also cited various case laws, including Chemphar Drugs and Tamil Nadu Housing Board, to support their plea against invoking the extended period of limitation. The Tribunal noted that the appellants had maintained statutory records and provided terms of contracts and price lists to the department. The Tribunal held that the department should have noticed the free supply of moulds at the time of approving the classification and price lists. The Tribunal concluded that mens rea was not established, and there was no intent to evade duty, thus setting aside the demand for the extended period.
2. Imposition of Penalties under Section 11AC and Rule 173Q:
The Tribunal examined whether mandatory penalties under Section 11AC and Rule 173Q were justified. Given the findings that there was no suppression of facts or intent to evade duty, the Tribunal set aside the penalties. The Tribunal referenced the Larger Bench decision in Mutual Industries Ltd., which clarified the inclusion of the cost of moulds in the assessable value, and noted that the appellants had paid duty for the normal period post-judgment. The Tribunal concluded that the imposition of penalties was unwarranted.
3. Demand of Interest under Section 11AB:
The Tribunal also reviewed the demand for interest under Section 11AB. Consistent with its findings on the lack of suppression and intent to evade duty, the Tribunal set aside the order demanding interest. The Tribunal emphasized that the appellants' actions did not constitute suppression of facts, and therefore, the demand for interest was not justified.
4. Inclusion of Amortized Cost of Moulds in the Assessable Value of Goods:
The Tribunal addressed the issue of whether the cost of moulds should be amortized based on the actual number of moulded components manufactured or the potential number that could be manufactured. The Tribunal upheld the Larger Bench's decision that the cost should be spread over the potential number of components that could be produced. The Tribunal found the Commissioner (Appeals)'s reasoning valid and upheld the inclusion of the amortized cost of moulds in the assessable value.
Conclusion:
The Tribunal modified the impugned order, setting aside the demand for duty for the extended period, the imposition of penalties under Section 11AC and Rule 173Q, and the demand for interest under Section 11AB. The Tribunal upheld the inclusion of the amortized cost of moulds in the assessable value as per the Larger Bench's decision. The appeal by the Revenue was dismissed, and the appeal by the assessee was partially allowed.
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2003 (8) TMI 535
Where a person belonging to a caste or tribe specified for the purposes of the Constitution to be a Scheduled Caste or a Scheduled Tribe in relation to State A migrates to State B where a caste or tribe with the same nomenclature is specified for the purposes of the Constitution to be a Scheduled Caste or a Scheduled Tribe in relation to that State B, will that person be entitled to claim the privileges and benefits admissible to persons belonging to the Scheduled Castes and/or Scheduled Tribes in State B?
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2003 (8) TMI 534
The High Court of Madhya Pradesh dismissed a petition under section 5 of the Limitation Act due to the inapplicability of the Act to proceedings under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam. The petitioner failed to provide sufficient cause for the delay in filing the revision, leading to the dismissal of the application and the Civil Revision as barred by limitation.
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