|
Advanced Search Options
Case Laws
Showing 101 to 120 of 467 Records
-
1997 (2) TMI 501
Issues:
1. Jurisdiction of the taxing authority under section 19(1) of the M.P. General Sales Tax Act, 1958 for reassessment.
2. Challenge to the order passed by the taxing authority for reassessment based on the existence of sales or purchases within the State of Madhya Pradesh.
3. Prematurity of the petition and the availability of statutory remedies for challenging the reassessment.
Detailed Analysis:
1. The petitioner, a registered firm engaged in the business of "supari and pan masala," challenged the order passed by respondent No. 1 under section 19(1) of the Act for reassessment. The petitioner contended that the material relied upon by the taxing authority did not establish any sale/purchase within Madhya Pradesh, thus questioning the jurisdiction of the authority to initiate assessment proceedings. However, the taxing authority, after considering the objections raised by the petitioner, held that there was material indicating sales and purchases within the state that had escaped assessment, justifying the reassessment under section 19(1).
2. The Court acknowledged that for jurisdiction under section 19(1) to be invoked, two conditions must be met: the existence of sales or purchases within Madhya Pradesh in the preceding five years, and the under-assessment or escape of such transactions. While the petitioner disputed the findings of the taxing authority, the Court emphasized that it could not delve into the merits of the material at this stage. The statutory provision allows for a hearing and inquiry by the taxing authority, providing the petitioner with an opportunity to contest the assessment and penalty. The Court highlighted the appellate remedies available to the petitioner under the Act, emphasizing the need to follow the statutory procedure for challenging the assessment order.
3. In dismissing the petition, the Court cited precedents emphasizing the importance of adhering to statutory procedures and discouraging the use of Article 226 petitions to circumvent the established remedies. The Court noted that the petition appeared to be an attempt to avoid the assessment process and reiterated the need to follow the statutory framework for addressing grievances related to tax assessments. Consequently, the petition was dismissed with costs, and the remaining security amount was to be refunded to the petitioner, emphasizing the availability of adequate redressal mechanisms within the statutory framework.
-
1997 (2) TMI 500
Issues:
1. Dispute over tax evasion and penalty under section 16(1)(e) of the Rajasthan Sales Tax Act, 1954.
2. Whether the petitioner is liable for penalty under section 16(1)(e) of the Act.
Analysis:
The judgment by the Appellate Tribunal of the Rajasthan Taxation Tribunal involved a dispute regarding tax evasion and penalty under section 16(1)(e) of the Rajasthan Sales Tax Act, 1954. The petitioner, a chemical manufacturer, was under scrutiny for not recovering and depositing tax amounting to Rs. 8,63,301 on certain transactions involving methanol. The respondent alleged tax evasion and imposed tax, interest, and penalty under section 16(1)(e). The petitioner contended that the methanol was given on loan to its sister concern, but the authorities found that it was a sale, leading to the imposition of tax and penalty. The Tribunal upheld the decision, prompting the petitioner to file for revision. The petitioner argued that after receiving the show cause notice, they consulted a lawyer, revised the return, and deposited the tax amount, denying any evasion. The petitioner cited various legal precedents to support their case.
The department countered by asserting that the methanol transactions were sales, not loans, as evidenced by the lack of supporting documents and the nature of the vouchers. They highlighted that tax exemption is only applicable to sales, not loans, and pointed out discrepancies in the petitioner's explanation. The authorities at all levels concurred that the petitioner had indeed sold the methanol, leading to the imposition of tax and interest, which were paid by the petitioner. The remaining issue revolved around whether the petitioner was liable for the penalty under section 16(1)(e) of the Act.
Regarding the penalty, the Tribunal initially levied a substantial amount, which was later reduced after rectification. The Tribunal analyzed section 16(1)(e) of the Act, emphasizing the requirement of concealing particulars or furnishing inaccurate information to impose a penalty. Legal precedents were cited to illustrate the burden of proof on the revenue to establish deliberate concealment or inaccuracies by the assessee. The Tribunal considered various facts, such as the petitioner's conduct post-notice, the nature of transactions, and the absence of tax collection on disputed transactions, to determine the petitioner's intent.
Ultimately, the Tribunal found that the penalty imposed under section 16(1)(e) could not be sustained. It noted that the petitioner had shown the transactions as tax exempted in their returns and accounts, indicating a bona fide intention. The Tribunal highlighted the quasi-criminal nature of penalty proceedings and the necessity of proving deliberate concealment or inaccuracies. Rulings from previous cases were referenced to support the decision to set aside the penalty. Consequently, the application for revision was partly allowed, and the penalty of Rs. 24,000 imposed on the petitioner was revoked.
-
1997 (2) TMI 499
Issues:
1. Interpretation of the term 'goods purchased by him' in section 10 of the Haryana General Sales Tax Act, 1973.
2. Justification of quashing the levy of tax on unsold bricks.
Analysis:
The case involved questions referred by the Haryana Sales Tax Tribunal under section 42 of the Haryana General Sales Tax Act, 1973. The first issue was whether the term 'goods purchased by him' in section 10 of the Act includes products manufactured from such goods. The second issue was whether the Tribunal was justified in quashing the levy of tax on unsold bricks valued at Rs. 8,000. The brick-kiln owner had closed down the business and applied for cancellation of registration certificate. The Assessing Authority added the value of unsold bricks to the turnover for tax assessment. The Joint Excise and Taxation Commissioner reduced the amount to Rs. 8,000 but upheld the tax levy. The Sales Tax Tribunal later allowed the appeal, leading to the State of Haryana seeking reference to the High Court for adjudication.
The High Court analyzed section 10 of the Haryana General Sales Tax Act, 1973, which states that tax is payable on goods purchased by a dealer in the State after registration and remaining unsold at the time of cancellation of registration. The State argued that since the assessee purchased coal used in manufacturing bricks, the products should be included in the tax liability. However, the Court disagreed, stating that the tax is specifically on goods purchased by the assessee, not on products manufactured from those goods. As the bricks were not purchased but manufactured using coal, they were not subject to tax under section 10. The Court emphasized that stretching the interpretation to include manufactured products would go against the statute's language.
Consequently, the Court ruled in favor of the assessee on both issues. The first question regarding the interpretation of 'goods purchased by him' was answered in favor of the assessee, leading to the second question being resolved in the same manner. The reference was disposed of accordingly, with the judgment favoring the assessee and rejecting the Revenue's claims.
-
1997 (2) TMI 498
Issues:
1. Interpretation of exemption certificate under section 13 of the Haryana General Sales Tax Act, 1973.
2. Retroactive effect of exemption certificate based on the date of genuineness certificate issued by the Khadi and Village Industries Board.
Analysis:
Issue 1: Interpretation of Exemption Certificate
The case involved M/s. Baroda Gur and Khandsari Co-operative Industrial Society Limited, which was engaged in the manufacture and sale of gur and khandsari. The firm had not obtained the registration certificate under section 19 of the Haryana General Sales Tax Act, 1973. During the assessment proceedings, the firm produced a certificate of genuineness from the Haryana Khadi and Village Industries Board for the period from November 1, 1973, to March 31, 1976. However, the firm had not obtained an exemption certificate under section 13 of the Act. The Assessing Authority rejected the plea of the firm due to the absence of the exemption certificate and imposed tax liability and a penalty. The firm appealed the decision, leading to a series of appeals and ultimately a reference to the High Court.
Issue 2: Retroactive Effect of Exemption Certificate
The State of Haryana sought clarification on whether the exemption certificate issued under section 13 of the Act would have a retrospective effect from the date of the genuineness certificate issued by the Khadi and Village Industries Board. The notification issued by the Government of Haryana under section 13 provided exemptions to co-operative societies with genuineness certificates from the Board. The State argued that since no application for exemption was submitted before the assessment, the exemption certificate could not operate retrospectively. However, the Court disagreed, stating that the exemption certificate would be retrospective from the date of the genuineness certificate. The Court emphasized that the exemption certificate operates for the period mentioned in the certificate and covers the assessment period. The Board certifies genuineness for the mentioned period and cannot do so for the future. Therefore, the firm was not liable to pay sales tax and penalty, and the question was answered in the affirmative.
In conclusion, the High Court held that the exemption certificate issued under section 13 of the Act would have a retrospective effect from the date of the genuineness certificate issued by the Board. This decision clarified the interpretation and application of exemption certificates in sales tax matters, providing relief to the assessee-firm in this case.
-
1997 (2) TMI 497
The High Court of Allahabad dismissed the revision against the Sales Tax Tribunal's order, which had reduced the eligibility period for tax exemption. The Tribunal found that the land was H.U.F. property and the total investment exceeded Rs. 3 lakhs, including building and machinery. The Court held that the Commissioner's order was incorrect, as even considering the land value, the total investment surpassed Rs. 3 lakhs. The revision was dismissed, and the petition was also dismissed.
-
1997 (2) TMI 496
Issues Involved:
1. Constitutionality of the proviso to clause (1) of sub-section (1) of section 7 of the Bengal Agricultural Income-tax Act, 1944.
2. Alleged discrimination and arbitrariness under Article 14 of the Constitution of India.
3. Computation of agricultural income and allowable deductions.
4. Legislative competence and authority under Article 265 of the Constitution.
Detailed Analysis:
1. Constitutionality of the Proviso to Clause (1) of Sub-section (1) of Section 7:
The core issue in this application is whether the proviso to clause (1) of sub-section (1) of section 7 of the Bengal Agricultural Income-tax Act, 1944 (hereafter "Act of 1944"), is violative of Article 14 of the Constitution. The proviso restricts the Agricultural Income-tax Officer to consider not more than fifty percent of the market value of the produce as the cost of cultivation for individuals and Hindu undivided families. The applicant contends this is discriminatory and lacks a rational nexus with the object of the enactment.
2. Alleged Discrimination and Arbitrariness Under Article 14:
The applicant argues that the proviso is discriminatory, arbitrary, and unconstitutional as it treats equals unequally by imposing a presumptive cost deduction of fifty percent of the market value of the produce, which may not reflect the actual cost incurred. This is claimed to be violative of Article 14 of the Constitution, which ensures equality before the law. The applicant further contends that there is no rational basis for presuming that every individual or Hindu undivided family earns an income equal to fifty percent of the sale proceeds, making the provision arbitrary and unreasonable.
3. Computation of Agricultural Income and Allowable Deductions:
The applicant, a proprietor of a tea garden, argues that the actual cost of cultivation should be deductible from the agricultural income rather than a presumptive fifty percent of the market value. The applicant's audited accounts showed a net profit of Rs. 19,324.48, but the Agricultural Income-tax Officer assessed the income at Rs. 1,19,815, leading to a tax demand of Rs. 58,389 and interest of Rs. 21,020. The applicant contends that the proviso to section 7(1)(1) leads to an inflated computation of income by not allowing actual costs to be deducted.
4. Legislative Competence and Authority Under Article 265:
The applicant also raised the issue of legislative competence, arguing that the State Legislature's provision treats a part of the expenditure as "income," which is not permissible under entry 46 of List II of the Seventh Schedule to the Constitution of India and Article 265. However, this point was not pressed during the arguments.
Judgment Summary:
The Tribunal found that the proviso to section 7(1)(1) is not unconstitutional but agreed that it could lead to arbitrary results. The Tribunal noted that the State Legislature has the competence to classify assessees differently, but such classification must have a rational nexus with the object of the legislation, which is to impose tax on agricultural income. The Tribunal observed that there was no intelligible nexus between the presumptive fifty percent deduction and the object of the Act of 1944.
The Tribunal, following the precedent set in Union of India v. A. Sanyasi Rao [1996] 219 ITR 330 (SC), held that the proviso could be read down to allow individuals and Hindu undivided families the option to either use the presumptive fifty percent deduction or to prove actual costs incurred. This ensures that the provision does not lead to arbitrary taxation and aligns with the principles of equality under Article 14.
Final Order:
The application was allowed, and the proviso to clause (1) of sub-section (1) of section 7 of the Act of 1944 was declared valid and constitutional. However, the Tribunal directed that assessees (individuals and Hindu undivided families) be given the option to choose between the presumptive deduction or proving actual costs at the time of filing their returns. The impugned assessment order and notices of demand were quashed, and the respondents were directed to make fresh assessments in accordance with this judgment. The interim order dated February 9, 1996, was vacated, and the main application was disposed of without any order as to costs.
-
1997 (2) TMI 495
Issues Involved:
1. Jurisdiction of the Commissioner of Income-tax (CIT) under section 263 of the Income-tax Act, 1961.
2. Granting of relief under section 80HHC for the export of granite stones.
3. Classification of granite as "minerals and ores" under section 80HHC.
4. Consideration of interest income, miscellaneous income, and credit balance write back in the total turnover.
Issue-wise Detailed Analysis:
1. Jurisdiction of the Commissioner of Income-tax (CIT) under section 263 of the Income-tax Act, 1961:
The primary issue was whether the CIT was justified in invoking section 263 to revise the assessment order. The appellant argued that the CIT did not provide a specific finding that the assessment order was erroneous and prejudicial to the interests of the Revenue. The CIT's order was based on the premise that the Assessing Officer (AO) did not apply his mind to the legal implications of section 80HHC, particularly regarding the exclusion of minerals and ores from eligible exports. The appellant's counsel cited several cases, including CIT v. Gabriel India Ltd. [1993] 203 ITR 108 (Bom), to argue that the CIT must clearly state the error and its basis. The CIT's order merely directed the AO to rework the relief under section 80HHC without specifying the error, which was deemed insufficient.
2. Granting of relief under section 80HHC for the export of granite stones:
The appellant contended that the relief under section 80HHC was rightly granted by the AO, who had considered all relevant materials. The CIT, however, held that the AO did not consider the exclusion of minerals and ores under section 80HHC. The CIT pointed out that section 80HHC(2)(b) was amended with effect from April 1, 1991, to include processed minerals and ores in the Twelfth Schedule, which includes cut and polished granite. The CIT inferred that prior to this amendment, granite was considered a mineral and thus ineligible for relief under section 80HHC. The appellant argued that the CIT's interpretation was debatable and that the AO had correctly granted the relief based on the materials provided.
3. Classification of granite as "minerals and ores" under section 80HHC:
The CIT classified the granite stones exported by the appellant as "minerals and ores," making them ineligible for relief under section 80HHC. This classification was based on the amendment to section 80HHC(2)(b) and the inclusion of cut and polished granite in the Twelfth Schedule. The appellant argued that their activity of excavating, cutting, and dressing granite stones amounted to manufacturing or production of an article or thing, thus qualifying for relief under section 80HHC. The CIT's classification was deemed to be a highly debatable issue, and the appellant relied on previous assessments where relief under section 80HHC was granted.
4. Consideration of interest income, miscellaneous income, and credit balance write back in the total turnover:
The CIT also held that the AO did not apply his mind to the inclusion of interest income, miscellaneous income, and credit balance write back in the total turnover for the purpose of section 80HHC. The appellant argued that these items were rightly excluded from the total turnover as they were not directly related to the export business. The CIT's order directed the AO to rework the relief under section 80HHC, considering these items in the total turnover, which the appellant contested.
Judgment:
The Tribunal's Judicial Member quashed the CIT's order, restoring the AO's assessment, stating that the CIT did not provide a specific finding that the assessment order was erroneous and prejudicial to the interests of the Revenue. The Judicial Member relied on the decision of the Bombay High Court in CIT v. Gabriel India Ltd. [1993] 203 ITR 108 (Bom), which requires the CIT to state the error and its basis clearly.
The Accountant Member disagreed, upholding the CIT's order, arguing that the CIT had identified an error in the assessment order, particularly the AO's failure to consider the exclusion of minerals and ores under section 80HHC. The Accountant Member cited the same decision of the Bombay High Court, stating that the CIT was within his jurisdiction to revise the assessment order.
The Third Member agreed with the Accountant Member, concluding that the CIT had correctly identified an error in the assessment order and was justified in invoking section 263. The Third Member emphasized that the CIT's action was supported by the decision of the Bombay High Court in CIT v. Gabriel India Ltd. [1993] 203 ITR 108 (Bom).
The final decision was to uphold the CIT's order, setting aside the AO's assessment and directing a fresh assessment considering the legal implications of section 80HHC and the classification of granite as minerals and ores.
-
1997 (2) TMI 494
Issues Involved:1. Disallowance u/s 37(4) related to guest-house expenses. 2. Allowability of rent, repairs, and taxes for guest-house maintenance. Summary:Disallowance u/s 37(4) - Guest-house expenses:The assessee claimed guest-house expenses of Rs. 8,83,372, which were disallowed by the Assessing Officer u/s 37(4) of the Income-tax Act. The Commissioner of Income-tax (Appeals) deleted Rs. 7,41,305 of this disallowance. The Tribunal had to tread carefully between the decisions in CIT v. Chase Bright Steel Ltd. (No. 1) [1989] 177 ITR 124 and CIT v. Ocean Carriers Pvt. Ltd. [1995] 211 ITR 357. The Tribunal concluded that the occupancy charges and administration charges totaling Rs. 8,83,372 were disallowable as they partook the character of maintenance. Rent of Rs. 2,81,574 was allowable based on Chase Bright Steel Ltd., and depreciation of Rs. 1,02,701 was not allowable as per Ocean Carriers Pvt. Ltd. The additional ground for deduction of rent was allowed, but the first ground raised by the assessee and the ground raised by the Revenue were rejected. Allowability of rent, repairs, and taxes for guest-house maintenance:The Accountant Member (AM) opined that rent, repairs, and taxes should not be disallowed u/s 37(4) as they are allowable under sections 30 and 31 of the Act, supported by the decision in CIT v. Chase Bright Steel Ltd. (No. 1) [1989] 177 ITR 124. The Judicial Member (JM) disagreed, citing CIT v. Ocean Carriers Pvt. Ltd. [1995] 211 ITR 357 and Raja Bahadur Motilal Poona Mills Ltd. v. CIT [1995] 212 ITR 175, which held that guest-house expenses are disallowable under section 37(4). The matter was referred to a Third Member due to differing opinions. Order of Third Member:The Third Member (A. Kalyanasundhram) resolved the disagreement by favoring the view that rent, repairs, and taxes should not be disallowed u/s 37(4) based on the precedent set by the earlier decisions in Chase Bright Steel Ltd. and Century Spinning and Manufacturing Co. Ltd. The Third Member emphasized the ambiguity in the law and chose the interpretation favorable to the taxpayer, aligning with the Supreme Court decision in CIT v. Vegetable Products Ltd. [1973] 88 ITR 192. The matter was returned to the regular Bench for final disposal in accordance with the majority view.
-
1997 (2) TMI 493
Held that: where imports were effected by an agent on behalf of the actual user against an actual user's import licence on the strength of letters of authority, the sales by the agent were sales in the course of import; that where pursuant to the acceptance of tenders by the Director-General of Supplies and Disposals and orders placed by him, goods were imported, there would be two sales: one by the foreign seller to the Indian dealer (importer) and the other by the Indian dealer to the ultimate consignee, and the second of these sales could not be considered a sale in the course of import.
-
1997 (2) TMI 492
Issues Involved:
1. Classification of mild steel (MS) flats.
2. Allegations of evasion of Central Excise Duty.
3. Dispute over the thickness of the MS flats.
4. Applicability of the extended period of limitation for duty evasion.
5. Imposition of penalty and redemption fine.
Issue-Wise Detailed Analysis:
1. Classification of Mild Steel (MS) Flats:
The primary issue in this appeal was the classification of MS flats of 5 mm thickness. The appellants, M/s. Joshi Steel Industries, contended that their products were bars and not flats. However, the Tribunal noted that the goods were consistently described as MS flats in the appellants' accounts, invoices, and other documents. The Tribunal emphasized that the goods were known and marketed as flats in trade and commerce. The Tribunal referred to the Central Excise Tariff and executive instructions, which defined flats as finished products with specific characteristics, including thickness and edge contour. The Tribunal concluded that the appellants failed to provide evidence to support their claim that the goods were bars and not flats.
2. Allegations of Evasion of Central Excise Duty:
The show cause notice dated 2-5-1986 alleged that M/s. Joshi Steel Industries had manufactured and removed MS flats without payment of Central Excise Duty, without a central excise license, without gate passes, and without submitting or obtaining approval for the Classification List. The Tribunal found that the appellants had not declared the production and removal of excisable goods and had removed the goods without paying any central excise duty. The Tribunal noted that the appellants had suppressed the material facts of production and clearance with the intent to evade payment of duty.
3. Dispute Over the Thickness of the MS Flats:
The appellants contested the measurements of the flats, arguing that the flats manufactured by them exceeded 5 mm in thickness. They requested an independent measurement by the Indian Standard Institution. However, the Tribunal found that the measurements taken by the Central Excise Officers, which showed a thickness of 4.98 mm, were reliable and had been admitted by the appellants at the time of the seizure. The Tribunal noted that the appellants' own records described the goods as MS flats of 5 mm thickness.
4. Applicability of the Extended Period of Limitation for Duty Evasion:
The Tribunal upheld the applicability of the extended period of limitation for the payment of Central Excise Duty. The Tribunal found that the appellants had not disclosed the relevant facts for assessment, levy, and collection of duty to the Central Excise Department. The Tribunal concluded that the appellants had suppressed the facts with the intent to evade duty, justifying the invocation of the extended period of limitation.
5. Imposition of Penalty and Redemption Fine:
The adjudicating authority had confirmed the demand of Central Excise Duty amounting to Rs. 1,24,110.34 and imposed a penalty of Rs. 2 lakhs. A redemption fine of Rs. 500/- was also imposed on the seized goods. The Tribunal found the penalty amount reasonable and did not interfere with the adjudicating authority's decision. The Tribunal took into account the facts and circumstances of the case, including the value of the goods involved (Rs. 11,86,062.71) and the duty evaded, and concluded that the penalty imposed was appropriate.
Conclusion:
The Tribunal dismissed the appeal, confirming the classification of the goods as MS flats, upholding the allegations of duty evasion, and affirming the imposition of penalty and redemption fine. The appellants failed to provide sufficient evidence to support their claims, and the Tribunal found no merit in the appeal.
-
1997 (2) TMI 491
The appellants exported fabrics with different composition than declared in the advance licence. Confiscation of goods and penalties imposed upheld. Fine reduced to Rs. 4 lakhs and penalty to Rs. 2 lakhs. Commissioner's order modified accordingly.
-
1997 (2) TMI 490
Issues:
Validity of extending the period of a duty-free import license.
Analysis:
The case involved a petitioner who had purchased a duty-free import license from Vishakhapatnam Steel Plant, which was endorsed in their favor. The petitioner claimed they could not fully utilize the license due to disputes between the licensing authority and the steel plant. The petitioner requested an extension of the license validity period, which was denied citing the absence of provisions for revalidation or extension of transferable licenses in the Exim Policy. The main issue was whether the licensing authority had the power to extend the license's validity.
The court referred to Para 21 of the Exim Policy, which allows for relaxation of policy provisions in cases of genuine hardship. The Director General of Foreign Trade has the authority to grant such relaxation or relief as deemed fit. The court also cited a previous case where the power to extend the validity period was recognized to alleviate genuine hardship. Additionally, a Bombay High Court decision was referenced to support the contention that the licensing authority possesses the power to revalidate or extend the license period. The court noted that Para 21 of the Exim Policy appeared broader in scope than the previously mentioned clause. Several other decisions of the court were cited, emphasizing the authority of the licensing authority in similar matters.
The court concluded that the power to extend the validity period of the license does exist, contrary to the sole ground for refusal being lack of power. As a result, the court made the rule absolute, quashed the communication denying the extension, and directed the respondent to consider and decide the petitioner's representation for revalidation or extension of the license period within a specified timeframe, providing the petitioner with an opportunity to be heard. The writ petition was disposed of with no costs incurred.
-
1997 (2) TMI 487
Issues:
1. Disallowance of Modvat credit on certain items claimed as inputs.
2. Classification of items as tools or parts of plant and machinery.
3. Admissibility of Modvat credit on disputed items - Abrasive Grinding Belt and work roll/back up roll.
Analysis:
1. The Appellant, engaged in manufacturing cold rolled strips, availed Modvat credit on various inputs. The Additional Collector of Central Excise issued a demand-cum-show cause notice, challenging the nature of certain claimed inputs, stating they were not usable in or in relation to the manufacturing process of final products. The notice proposed disallowance of Modvat credit and duty demand. The Appellant contended that the disputed inputs were indeed used in the manufacturing process and were not tools or parts of machinery. After a personal hearing, Modvat credit was allowed on one item but disallowed on two items - Abrasive Grinding Belts and work roll/back up roll. The Collector (Appeals) upheld this decision, leading to the present appeal.
2. Regarding the Abrasive Grinding Belt, it was established that the belt is used to remove iron oxide layers from cold rolled strips during the hardening and tempering process, making the strips marketable. The belt covers rollers that remove the oxide layers, and similar functions are performed by other materials like felts and wire mesh. Referring to a precedent, it was held that such articles are considered inputs used in or in relation to the manufacturing process, even if not directly consumed. The exclusion clause under Rule 57A of the Central Excise Rules does not apply to these items. The same reasoning was applied to the work rolls or back up rolls, which are crucial in pressing hot rolled strips for strength and quality. These items were also deemed to be used in the manufacturing process.
3. The lower authorities classified the disputed items as tools or parts of machinery, potentially excluding them from the Modvat scheme. However, the definition of "tools" was not clearly established. Various dictionaries were referenced to define a tool as a mechanical implement or working instrument, typically used by hand. Since the disputed articles were integral to certain machines and did not fit the definitions of tools, it was concluded that they did not fall under the exclusion clause. Consequently, the impugned order disallowing Modvat credit on the disputed items was set aside, and the appeal was allowed.
-
1997 (2) TMI 479
Whether stay-wires could not be said to be accessories within the meaning of item 26 of the First Schedule to the Kerala General Sales Tax Act, 1963?
Held that:- Appeal dismissed. The High Court said that, at most, the stay wires could be said to be accessories of the electric poles which they supported, but electric posts were not electrical goods so that the stay wires were not accessories of electrical goods. The view taken by the High Court is, in our opinion, eminently reasonable and requires no interference.
-
1997 (2) TMI 474
Whether agarbathis were liable to sales tax under item No. 36 of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957?
Held that:- Appeal allowed. We are of the view that the High Courts of Kerala, Bombay and Punjab and Haryana were right in not giving an expanded meaning to “perfume” or “perfumery” and the Orissa High Court was in error in including agarbathis within the definition of “perfumery”.
In our judgment neither in common parlance nor by the dictionary meaning nor having regard to the context of item 36 of the First Schedule of the Andhra Pradesh General Sales Tax Act can it be said that “perfumes” would include agarbathis for the purpose of imposition of sales tax. In view of the aforesaid, the judgment under appeal dated September 29, 1989 is set aside.
-
1997 (2) TMI 467
Whether sales tax is payable on the khalli for the period 26th December, 1977 till June, 1985?
Legality of a notification issued by the State Government on 31st December, 1980 in exercise of the powers conferred by section 20-A of the Bihar Sales Tax Third Ordinance, 1980 as amended?
Held that:- Appeal dismissed. It would appear that a point that goes to the root of the matter has been overlooked and that is that it has first to be found as a matter of fact that khalli falls outside the limited description of cattle feed that is to be found in the said explanation and this is something that has not been done. We find it too late in the day to remand the matter for such a finding and, therefore, must reject the appeal in so far as it relates to this point without referring to any of the other contentions that have been raised on behalf of the respondents.
Having regard to the terms in which the notification has been worded, we are inclined to agree. The notification does not permit the dealer only "to adjust the amount of tax paid within Bihar on the purchase of raw materials". It permits him "to adjust the amount of tax paid on the purchase of raw materials. There is no limitation which calls for adjustment only if tax has been paid in Bihar on the purchase of raw materials
-
1997 (2) TMI 460
Whether respondents who sold wheat bran are liable to pay sales tax thereon during the period December 26, 1977 until June, 1985?
Whether, by reason of the Notification No. 3320 dated March 9, 1978, amending the entry relating to the rate of tax in the earlier notification in that behalf by including “bran” therein, has the effect of bringing to an end the exemption from the levy of sales tax that bran enjoyed under Notification No. 14547 dated December 26, 1977?
Held that:- The respondent would be liable to pay sales tax on its sales of bran at the rate of 3 per cent from March 9, 1978 until June, 1985 when the situation was radically altered.
-
1997 (2) TMI 451
Whether it is an inter-State sale taxable in the State of Andhra Pradesh or whether it is an intra-State sale in the other State where the goods are delivered?
Held that:- Appeal dismissed. If the assessing authorities decide against the appellant, it shall be open to them to file appeal(s) before the Tribunal directly. If and when the Tribunal decides against the appellant, it shall be open to the appellant to approach this Court for appropriate directions. In the circumstances of the case, it is further directed that in case the Tamil Nadu Sales Tax Appellate Tribunal comes to the conclusion that the transactions in question are inter-State sales upon which Central sales tax is leviable in the State of Tamil Nadu, the State of Tamil Nadu shall not enforce their demand for a period of eight weeks from the date of the decision of the Tribunal. Further, till the issue is decided by the Sales Tax Appellate Tribunal, no Central sales tax shall be demanded from the appellant, provided it is established by the appellant that in respect of the same transaction, the appellant has paid tax in another State treating it as an intra-State sale in that other State.
-
1997 (2) TMI 447
Sales tax on exercise books - Held that:- Appeal dismissed. The High Court was right in holding that exempting the exercise books produced in the State and subjecting the exercise books produced outside the State but sold in Uttar Pradesh to sales tax at 5 per cent is discriminatory and, therefore, offends clause (a) of article 304.
-
1997 (2) TMI 434
Issues Involved:
1. Authority of SEBI to impound/confiscate transaction proceeds.
2. Territorial jurisdiction of the High Court of Gujarat.
3. Compliance with principles of natural justice.
4. Validity of SEBI's orders under existing laws.
5. Applicability of the doctrine of unjust enrichment.
Issue-wise Detailed Analysis:
1. Authority of SEBI to Impound/Confiscate Transaction Proceeds:
The primary issue was whether SEBI had the authority under existing laws to impound or confiscate transaction proceeds. The court held that SEBI did not have the authority under the Securities and Exchange Board of India Act, 1992, or the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995, to impound or forfeit monies received by the Stock Exchange as a result of concluded transactions. The court emphasized that deprivation of property could only occur by authority of law, which must be a positive or state-made law, and not by executive instructions or administrative discretion. The court found that SEBI's orders to impound the proceeds were not supported by any specific provision of law and thus were invalid.
2. Territorial Jurisdiction of the High Court of Gujarat:
The court addressed the preliminary objection regarding the lack of territorial jurisdiction. It held that the High Court of Gujarat had jurisdiction to entertain the petition because part of the cause of action arose within its territory. The court noted that the petitioner's registered office was in Ahmedabad, and significant parts of the investigation and subsequent actions by SEBI occurred in Ahmedabad. Therefore, the High Court of Gujarat had the authority to examine and issue directions regarding the impugned orders.
3. Compliance with Principles of Natural Justice:
The court found that SEBI's orders were made in violation of the principles of natural justice. The orders were issued without giving the petitioners a reasonable opportunity to be heard. The court emphasized that pre-decisional hearing is a mandatory requirement under the regulations, and post-decisional hearing cannot cure the defect of not providing a pre-decisional hearing. The court held that the impugned orders were void ab initio due to the breach of natural justice principles.
4. Validity of SEBI's Orders under Existing Laws:
The court examined whether SEBI's orders could be sustained under the existing laws, specifically under sections 11 and 11B of the SEBI Act and the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995. The court concluded that neither section 11 nor section 11B provided SEBI with the authority to impound or forfeit transaction proceeds. The court also noted that the regulations did not authorize SEBI to retain the amounts recovered by the Stock Exchange for its own use. Therefore, the orders were not valid under the existing legal framework.
5. Applicability of the Doctrine of Unjust Enrichment:
The court addressed the argument that the petitioners should not be granted relief on the grounds of unjust enrichment. The court held that the doctrine of unjust enrichment could not be invoked to justify SEBI's actions. The court explained that unjust enrichment requires that a person has been enriched at the expense of another, and the retention of such enrichment is unjust. In this case, the court found that the transactions were lawfully concluded, and the proceeds rightfully belonged to the petitioners. Therefore, the principle of unjust enrichment was not applicable, and the relief could not be denied on this basis.
Conclusion:
The court quashed the impugned orders dated 4-7-1996 and 25-1-1996 issued by SEBI, as well as the appellate order dated 22-5-1996, to the extent they directed the impounding of monies recovered by the respective Stock Exchanges. The court held that SEBI lacked the authority to issue such orders, and the orders were made in violation of the principles of natural justice. The petitions were allowed, and the rule was made absolute.
............
|
9911796707
