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1991 (11) TMI 63
Writ Jurisdiction - Exemption - Claim thereof - Existence of Alternate Remedy ... ... ... ... ..... petitioners, the concerned authority shall consider the same objectively and in the light of the judgments relied on by the petitioners, and thereafter adjudicate and decide the issue. If still the petitioners, after-such adjudication, are aggrieved, they shall be at liberty to work out their remedies in accordance with law. The writ petitioners during pendency of the writ petitions appear to have obtained an interim order and given bank guarantee subject to the result of the writ petitions. Further course of action in respect of such bank guarantees will abide by the result of the adjudication by the respondents, provided the petitioners move the authorities with appropriate applications within six weeks from this date. 7. With the above observation and liberty granted, in my view nothing survives for adjudication in these cases in the light of what has been held supra. The writ petitions, therefore, shall stand dismissed, but in the circumstances of the case without costs.
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1991 (11) TMI 62
Valuation (Central Excise) ... ... ... ... ..... ave noticed above, we set aside the order of the learned Single Judge and consequently the writ petition would stand dismissed. It would however, be open to the writ petitioner to raise objections to the show cause notice and lead such evidence as is necessary to arrive at a finding of fact and the authorities shall consider those objections and evidence, if any, and decide the matter in accordance with law. Since, the time during which objections had to be filed to the show cause notice expired during the pendency of the proceedings in this Court, in the interests of justice, we grant six weeks time from to-day to the writ petitioner to submit objections to the show cause notice. The authorities shall, after objections are submitted, decide the matter in accordance with law after granting opportunity to the parties, if so requested, of personal hearing, expeditiously. The writ appeal is thus allowed to the extent indicated above. However, there will be no order as to costs.
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1991 (11) TMI 61
Adjudication - Natural justice - Cross-examination ... ... ... ... ..... bay is not allowed. It is this letter which is sought to be impugned in this writ petition. 3. In our opinion, the Collector ought to have resorted to Section 108 of the Customs Act, 1962. It is within the powers of the Collector to summon any person whose attendance he considers necessary either to give evidence or to produce documents and prove the same during the enquiry. In the circumstance we direct the Collector of Customs, Bombay, to invoke Section 108 of the Customs Act, 1962, and call upon (summon) the Professor of I.I.T., Bombay, who has given C.C. report which is being relied upon by the respondent during enquiry. 4. In the result, writ petition succeeds. The communication dated 4th April 1991 (Ex. H) is quashed and set aside and Collector of Customs, Bombay, is directed to exercise powers under Section 108 of the Customs Act. 5. Rule is accordingly made absolute. No order as to costs. 6. Certified copy of the order if applied for, to be furnished within one week.
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1991 (11) TMI 60
... ... ... ... ..... issued by the Department on 20-1-1989 as well as the notification issued by the Collector of Customs dated 19-7-1991. There is a Standing Order issued by the Collector of Customs in Ref. 31/90 to the same effect. Consequently, what remains to be done in these writ petitions is to direct the Assistant Collector, Central Excise, 8th Division, Madras, now impleaded as a party and ranked as second respondent, to pass orders on the refund applications by computing the amount payable to each of the petitioners and to make payment accordingly. The petitioners will file formal applications for refund and the respondents will pass orders within eight weeks from the date of the receipt of the applications for refund. I make it clear that the respondents cannot raise any question of limitation because the writ petitions had been filed on 31-3-1989 and the pendency of these writ petitions will enure to the benefit of the petitioners. The writ petitions are ordered accordingly. No costs.
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1991 (11) TMI 59
Issues involved: Challenge to order for waiver of pre-deposit of duty and penalty by Collector of Central Excise.
Summary: The petitioners challenged an order requiring a pre-deposit of Rs. 14,58,530.46 duty and Rs. 1 lakh penalty by the Collector of Central Excise. The Tribunal initially directed a pre-deposit of Rs. 7 lakhs, considering the outstanding amount due to the petitioners. However, the High Court found the Tribunal's approach incorrect as it should have assessed the legality, financial position, and prima facie case of the petitioners before ordering a pre-deposit.
The High Court acknowledged that the issue of duty levy needs to be decided in the main case and noted that previous judgments favored the petitioners on similar issues under the Tamil Nadu General Sales Tax Act. Therefore, the petitioners were found to have a prima facie case. Due to the Tribunal's error in not properly considering these aspects, the High Court ordered the petitioners to deposit Rs. 3 lakhs before the Tribunal for their appeal, to be decided in accordance with the law and with a fair opportunity for the petitioners to present their case.
In conclusion, the writ petition was granted on the condition of the specified deposit, and the Tribunal was instructed to handle the appeal appropriately.
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1991 (11) TMI 58
Order - Appealable order - Appeal - Limitation - Adjudication proceedings ... ... ... ... ..... ground of alternative remedy it is not necessary to refer to the ratio of the said judgment. The decision in Toshiba Anand Lamis Ltd., Cochin v. The Superintendent of Central Excise and Others 1979 (4) E.L.T. (J 602) does not in any way support the case of the petitioners but on the other hand it says that Section 35 of the Central Excises and Salt Act, 1944, does not confer any power on the appellate authority to condone the delay in filing an appeal. 6A. I have already pointed out that the counter-affidavit explains as to why the Superintendent of Central Excise restricted the claim to Rs. 4,31,618.75. Though the petitioner did not challenge the reasons given in the counter-affidavit, I am satisfied that the reasons given in the counter-affidavit in support of the order of the Superintendent of Central Excise are valid and correct. Consequently no relief can be granted to the petitioner in this writ petition and it is dismissed. There will however be no order as to costs.
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1991 (11) TMI 57
Issues: Assessment of excise duty on photo-copying machines under Tariff Item 33D of the Central Excise Tariff based on the inclusion of the value of timer and lens components.
The High Court of Judicature at Bombay heard a case involving a Public Limited Company manufacturing photo-copying machines. The company claimed that the timer and lens components purchased from the market should not be considered in the assessment of excise duty for the photo-copying machines under Tariff Item 33D. The Assistant Collector of Central Excise, Bombay, the Appellate Collector of Customs and Central Excise, and the Government of India, Ministry of Finance, upheld the inclusion of these components in the assessment. The company challenged these decisions under Article 227 of the Constitution of India.
The Court noted that the timer and lens components are integral to the camera, which is a main component of the photo-copying machine. The assembly process of the document copier machine clearly showed that the camera, including the timer and lens, is essential for the functioning of the machine. The Court held that even though the timer and lens were purchased from the market, their value must be included in the assessable value of the machine as they are assembled during manufacturing, constituting a part of the manufacturing process.
The petitioner's counsel referred to a decision by CEGAT regarding the inclusion of essential parts in the assessable value, but the Court found that the decision did not set a precedent against including the value of essential parts. The Court disagreed with the petitioner's argument that the value of the timer and lens should not be included in the assessable value, affirming the decisions of the lower authorities.
In conclusion, the Court dismissed the petition, ruling that the value of the timer and lens components purchased from the market must be included in the assessable value of the photo-copying machines under Tariff Item 33D. The petitioner's claim was rejected, and costs were awarded against them.
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1991 (11) TMI 56
Job Work - Meaning ... ... ... ... ..... he present case because what is supplied by the customers to the petitioners is not raw material and the raw material comes into existence only because of process undertaken by the petitioners. Once, it is found that what is received by the petitioners is not raw material, then it is futile to suggest that the value of the materials manufactured by the petitioners should be determined only with reference to the value of the work undertaken by the petitioners. The three authorities below were perfectly justified in determining the value of the wires by taking into consideration the value of the raw materials. It is also required to be stated that this contention was not raised before any of the three authorities below and is raised for the first time in the petition. In our judgment, the contention has no merit and is required to be repelled. 7. Accordingly, petition fails and rule is discharged with costs. Shri Cama requests for continuation of interim order. Prayer refused.
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1991 (11) TMI 55
Appeal - Additional/Alternate ground ... ... ... ... ..... e Tribunal that, even if dutiable, it was dutiable under Item 68 and not under 26AA. 5. Learned counsel for Union of India submits that the assessee had not disputed the classification of the goods under Tariff Item No. 73 for the purposes of customs duty. We do not see how this can preclude the appellant from raising the present contention. We, therefore, set aside the order of the Tribunal and remand the matter so far as this aspect is concerned. The appeal is restored to the file of the Tribunal for considering the contention that the goods are dutiable for the purpose of excise duty under Tariff Item 68 and not under Item 26AA. The Tribunal will decide the issue on merits. It will be open to the respondent to urge before the Tribunal, if so advised, that the classification for purposes of customs duty should also be taken into account in deciding the classification for the purposes of excise duty. The appeal is disposed of accordingly. There will be no order as to costs.
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1991 (11) TMI 54
Whether the act of a member of a joint family by which he impresses his individual property with the character of joint family property or "throws" it into the hotchpotch of the joint family or "blends" it with the joint family property is a "disposition" within the meaning of the Estate Duty Act, 1953 ?
Held that:- We endorse this reasoning and think that the High Court was right in holding, in the present cases, that the act of blending did not result in the "gift" of immovable properties within the meaning of the statute and that Rajamani Ammal [1972 (1) TMI 9 - MADRAS High Court] required no reconsideration because of Ranganayaki Ammal / Trikamlal [1976 (7) TMI 61 - SUPREME Court]. Appeal dismissed.
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1991 (11) TMI 53
... ... ... ... ..... of, and also how the same had any relevance to the question of applicability of section 254(2) of the Act. The Tribunal merely quoted the application, prayer and affidavit and abruptly came to the conclusion that it accepted the affidavit as sufficient proof. The power of amendment under section 254(2) of the Act is to be exercised only when there is a mistake apparent from the record. There is no indication in the order regarding any such mistake. No reason has been indicated for exercise of powers under section 254(2) of the Act. The order being non-reasoned is interdicted and unsustainable. Without being influenced by any observations made herein, the Tribunal shall rehear the matter and consider whether a case for exercise of power under section 254(2) of the Act is made out. We quash the impugned order, annexure 1, and remit the matter to the Tribunal with the aforesaid observations. The writ application is, accordingly, disposed of. No costs. S. K. MOHANTY J. -I agree.
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1991 (11) TMI 52
Profit In Lieu, Profits In Lieu ... ... ... ... ..... the father of the appellant stated that he did not remember the details of the gold ornaments but he could say with certainty that he had handed over gold ornaments in return for the National Defence Gold Bonds. He changed his stand already taken stating that the gold ornaments were melted and converted into gold bars of 10 tolas each for being surrendered to the Gold Control Authorities. The extent of affluence of the appellant s father can be assessed from the fact that he raised a loan of Rs. 16,500 from the Department of Fisheries, Government of Maharashtra, in the year 1959 for purchasing a fishing trawler worth Rs. 21,000 and the loan was paid back in quarterly instalments spread over a number of years. The gold bars were tendered for conversion into gold bonds six years after his raising of the aforesaid loan. The acquisition of gold, therefore, cannot be related to any declared or known sources of income. In view of discussion above, the appeal fails and is dismissed.
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1991 (11) TMI 51
Issues Involved: 1. Legality of the authorisation issued u/s 132(1) of the Income-tax Act, 1961. 2. Conduct of search and seizure operations. 3. Allegations of harassment and wrongful confinement. 4. Validity of seizure of documents, cash, and jewellery.
Summary:
1. Legality of the Authorisation Issued u/s 132(1) of the Income-tax Act, 1961: The court examined whether the authorisation for search and seizure issued by the Director (Investigation), Income-tax Department, complied with the provisions of section 132(1) of the Act. The petitioners contended that the authorisation lacked a reasonable basis and did not meet the criteria under clauses (a), (b), or (c) of section 132(1). The court noted that the satisfaction note by the Director of Investigation failed to provide tangible reasons or information to justify the belief that the petitioners had undisclosed income or assets. The court emphasized that the belief must be based on reliable information and not mere suspicion or gossip. The court concluded that the authorisation was not in accordance with the law and quashed it.
2. Conduct of Search and Seizure Operations: The petitioners alleged that the search at their residence and office was conducted in an objectionable manner, with excessive force and without proper justification. The court found that the search was based on false information, particularly the claim that the house at 14, Anand Lok was under demolition, which was proven incorrect by a local commissioner's report. The court held that the search and seizure operations were conducted without proper verification of facts and amounted to an abuse of power.
3. Allegations of Harassment and Wrongful Confinement: The petitioners, especially petitioner No. 1, a senior advocate, claimed that they were harassed and wrongfully confined during the search. The court noted that petitioner No. 1 was not allowed to attend to his professional duties in the High Court, which amounted to wrongful confinement. The court emphasized that the Income-tax Department does not have the authority to arrest or confine individuals during search operations and criticized the over-zealousness of the raiding party.
4. Validity of Seizure of Documents, Cash, and Jewellery: The court examined the seizure of cash and jewellery during the search. It found that the seizure was not justified as the satisfaction note did not provide a valid basis for believing that the petitioners possessed undisclosed income or assets. The court directed the respondents to return all seized documents, cash, and jewellery to the petitioners within two weeks.
Conclusion: The court issued a writ of mandamus quashing the impugned authorisation and the subsequent actions taken by the respondents, including the seizure of documents, cash, and jewellery. The petitioners were entitled to costs, and the respondents were directed to return the seized items within two weeks.
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1991 (11) TMI 50
Business Profits, Cash Compensatory Support, Legislative Powers, Parliament, Taxes On Income ... ... ... ... ..... s not being regarded as a revenue income. This was by virtue of the decision of the Tribunal firstly in Gedore Tools case in 1985 and thereafter by the Full Bench in 1988, It was submitted that the Department ought not to take any proceedings for imposing the penalty or for levying any interest. It is not in dispute that the matter is still alive inasmuch as a petition under section 264 is pending before the Commissioner of Income-tax. While we would not like to interfere with the case at this stage, we do feel that, in such a case, a sympathetic view should be adopted when there is a retrospective piece of legislation and it cannot be said that the view which the assessee was taking in 1987 was without any foundation. We do not expect that any injustice would be done to the petitioner and the Commissioner of Income-tax, will, we are sure, pass a fair and judicious order. For the aforesaid reasons, this writ petition is dismissed. Interim order is vacated. Petition dismissed.
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1991 (11) TMI 49
Issues Involved: The issues involved in this case are: 1. Validity of conducting a search on residential premises u/s 132(5) of the Income-tax Act, 1961. 2. Seizure of assets and issuance of order u/s 132(5) without proper notice and authorization.
Issue 1: Validity of Search on Residential Premises: The petitioner challenged the search conducted on his residential premises based on warrants issued in the names of different firms, of which he was a partner. The petitioner argued that the warrant did not authorize the search of his individual premises and that no seizure was validly made. The High Court analyzed the provisions of the Act and ruled that the warrant of authorization did not enable the Department to conduct a search or seizure of the petitioner's property based on a warrant issued in the name of the firm, as no warrant was issued in the name of the petitioner himself. The Court held that the warrant was insufficient to authorize the search and seizure of the petitioner's assets, leading to the quashing of the impugned order.
Issue 2: Seizure of Assets and Order u/s 132(5) without Proper Notice: The petitioner contended that the seizure of assets was not valid as only cash was taken possession of, while jewellery, silver articles, and documents were not seized. The respondent argued that the cash was voluntarily offered by the petitioner. The Court referred to the concept of seizure as explained by the Supreme Court, emphasizing that seizure implies forcible taking over from the owner or possessor who is unwilling to part with possession. Since the cash was voluntarily offered, no valid seizure was made. Therefore, the Court concluded that without a proper seizure of assets like bullion, jewellery, or valuable articles, an order u/s 132(5) of the Act could not be passed. Consequently, the impugned order was quashed, and the petition was allowed on substantial grounds.
In conclusion, the High Court ruled in favor of the petitioner, quashing the order made under section 132(5) of the Income-tax Act, 1961, due to the invalidity of the search conducted on the petitioner's residential premises and the absence of a valid seizure of assets as required by law.
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1991 (11) TMI 48
... ... ... ... ..... of the Act, even though the return was not filed within the time provided by section 139. This decision of the Calcutta High Court was also followed by the Bombay High Court in Telster Advertising Pvt. Ltd. v. CIT 1979 116 ITR 610. We are in full agreement with the aforesaid decisions of the Calcutta and Bombay High Courts. We hold that subsections (1) and (4) of section 139 are to be read together and, On being so read, an assessee is entitled to carry forward the loss if lie his filed the return after the period prescribed by sub-section (1) but before the time allowed under subsection (4). Applying this proposition of law, we further hold that the assessee was entitled to carry forward the loss as he had filed the return within the time allowed under sub-section (4) of section 139 of the Act though after the period prescribed by subsection (1). Accordingly, we answer the question referred to us in the affirmative and in favour of the assessee. We make no order as to costs.
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1991 (11) TMI 47
Business Expenditure, Disallowance, Entertainment Expenditure ... ... ... ... ..... licence for trading in liquor stood in the names of only some of the partners of a firm and was not transferred to the firm, there was no illegality in the partnership. But where the licence itself is transferred to the partnership, it may result in an assignment of part of the licence, and section 23 may come into force. In the instant case, it is accepted that the licence continued to stand in the name of Ramesh Chotolal Thacker. The point raised by Mr. Kar relating to contravention of the terms of the partnership does not appear to have been raised before the authorities below, and has not been considered by the Tribunal. The Tribunal has not recorded any finding in that regard and, therefore, we are not inclined to take note of the submission. Our answer to the reference is that the Tribunal was justified in directing grant of the assessee s claim for registration for the assessment year 1980-81. The reference is, accordingly, answered. No costs. S. K. MOHANTY J.-I agree.
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1991 (11) TMI 46
Child, Inclusions In Total Income, Total Income ... ... ... ... ..... e are unable to accept the submission of learned counsel for the assessee. In our opinion, the object of this Explanation is to determine in whose income, whether the father s or mother s, the income of the child has to be included. We may also add that this Explanation does not nullify the definition of child in the Act nor is the said definition of child repugnant to the above Explanation 1. We may also add that, as the expression parent has not been defined, Mr. Saraf has drawn our attention to the dictionary meaning of the said word. But, in our opinion, the clear meaning of child has been provided in the Act and we need not refer to the dictionary meaning of the word parent. From what has been stated above, we are of the opinion that a stepchild would come within the purview of section 64(1)(iii) of the Act in view of the clear definition of child , vide section 2(15A) of the Act. In the result, the question is answered in favour of the Revenue and against the assessee.
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1991 (11) TMI 45
Search And Seizure, Writ ... ... ... ... ..... siness on the other. Accordingly, we deem it just and proper to order and do hereby order that the amount of the bank guarantees shall be encashed only to the extent of 50 for being retained by the Department in lieu of the assets and for the balance amount of 50 , the petitioner shall furnish a fresh bank guarantee by November 20, 1991, which shall be kept alive from time to time till the entire liability of the petitioner is determined after completion of regular assessment by renewing the same fifteen days before expiry of the period of guarantee, failing which the Department shall be at liberty to encash the guarantee so furnished. Annexure P-9 is quashed and respondent No. 1 is directed to hear the petitioner and decide the application under section 220(6) of the Act afresh. This petition is disposed of accordingly with no order as to costs. The petitioner shall appear before respondent No. 1 on November 15, 1991, and on such further dates as respondent No. 1 may direct.
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1991 (11) TMI 44
Assessment, Individuals, Wealth Tax ... ... ... ... ..... hat the Tribunal was justified in holding that the assessee cannot be assessed in respect of such properties as individual. Mr. Lahiri relies on a decision in Wealth-tax Reference No. 12 of 1975, dated February 13, 1989, where a similar question came up for consideration and this court held as follows It is settled that this court cannot go behind the Tribunal s findings of fact. Considering the peculiar circumstances of the case as well as the customary usage and practice of the Khasis, we are of the opinion that the Tribunal was justified in holding that no assessment could be validly made against the assessee in the status of individual. The question is answered accordingly against the Revenue. We have perused the facts of this case. We are satisfied that the aforesaid decision squarely applies in the present case. Accordingly, following the same, we answer the question in the affirmative and in favour of the assessee and against the Revenue. We make no order as to costs.
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