TMI Blog1984 (8) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... g Coal Mines (Emergency Provisions) Ordinance of 1971 with effect from October 17, 1971, along with several other coking coal mines and some coke oven plants. The ordinance was in due course replaced by a statute bearing the same title (hereinafter referred to as the 'Management Act'). Then came the Coking Coal Mines (Nationalisation) Act, 1971 ('Nationalisation Act' for short) which received Presidential assent on August 17, 1982, but Under Section 1, Sub-section (2) there of, the statute was deemed to have come into force with effect from May 1, 1972. Under Section 3; Sub-section (a) of the Nationalisation Act, May, 1, 1972 was the appointed day. Under the provisions of the Ordinance followed by the Management Act, ownersh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to ₹ 7,95,071.94 were raised against the owner. The owner laid claim to a sum of ₹ 1,01,755.37 as its entitlement under the Nationalisation Act on the ground that if credit was given to the stock in trade on the basis of the closing balance, it would be entitled to that amount. 4. Claim having been laid for the recovery of the aforesaid amount from the owner under the Nationalisation Act, that amount was certified to be recoverable. The owner Respondent No. 1 challenged the order of the statutory authority by filing a writ petition before the Patna High Court impleading, inter alia, the Central Coal Fields Ltd. as also M/s. Bharat Coking Coal Ltd. two Government companies as respondents. The High Court after hearing the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of the appointed day vested in the Central Government as a result of nationalisation, the question for examination is whether that stock was liable to be taken into account for the purpose of determining the amount payable to the owner in respect of the period when the mine was under the management of the Custodian. This necessitates reference to some of the provisions of the Nationalisation Act and the relevant provisions are Sections 4, 10, 21 and 22. Under Section 4(1), on the appointed day the right, title and interest of the owner in relation to the coking coal mines specified in the First Schedule stood transferred to, and vested absolutely in the Central Government free from all encumbrances. Section 10 contemplates that the ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Government or the Government company, (the appellants before us are Government companies), as the case may be, shall cause the books in relation to each coking coal mine ... the management of which has vested in it under the Coking Coal Mines (Emergency Provisions) Act, 1971, to be closed and balanced as on the 30th day of April, 1972, and shall cause a statement of accounts, as on that day, to be prepared, within such time, in such from and in such manner as may be prescribed, in relation to each such mine ... in respect of the transactions effected by it during the period for which the management of such coking coal mine ... remained vested in it.... 8. In exercise of the powers conferred by Clause (c) of Sub-section 12) of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shortfall. 10. We find force in the submission of Mr. Shanti Bhushan that the accounting for the period between October 17, 1971 and April 30, 1972, in the absence of any particular prescribed mode in the statute or the Rules made thereunder, had to be done according to the normal commercial practice. Since the statute contemplated the books to be closed and balanced, a balance sheet according to the normal commercial practice had to be drawn up. The observations of this Court in Commissioner of Income tax, Madras v. A. Krishna Swami Mudaliar and Ors.: [1964]53ITR122(SC) , are worth quoting. Shah, J. (as he then was), spoke for the Court thus : But whichever method of book-keeping is adopted in the case of a trading venture, for comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the position. The expenses were to be set off against the sale price of the stock to be received at the time of disposal. Therefore, the stock of coal had to be taken into account for balancing the position. Reliance on the definition of 'mine' and Section 10 of the Nationalisation Act to counteract this conclusion cannot avail the appellants. Indeed, the submission advanced on behalf of the appellants is so much opposed to common sense logic of the matter that in the absence of a legislative mandate we have no hesitation in rejecting it. 13. Much of the controversy could have been avoided if reference had been made to the statutory form. Statement 8 in the prescribed form clearly indicates that the stock as on April 30, 1972 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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