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1987 (10) TMI 368
Issues Involved:
1. Eligibility for exemption under Section 4-A of the U.P. Sales Tax Act.
2. Definition and interpretation of "new unit" and "date of starting production."
3. Impact of reconstitution of a partnership firm into a private limited company on eligibility.
4. Validity of power connection and machinery purchase dates in determining eligibility.
5. Legal interpretation of Section 4-A and its explanations.
Detailed Analysis:
1. Eligibility for Exemption under Section 4-A of the U.P. Sales Tax Act:
The petitioner, a private limited company, sought exemption from sales tax under Section 4-A of the U.P. Sales Tax Act. The application was initially rejected by the District Level Committee and subsequently by the Divisional Level Committee. The company's repeated petitions were based on the argument that they met the criteria for exemption as a new unit.
2. Definition and Interpretation of "New Unit" and "Date of Starting Production":
Section 4-A and its explanations define a "new unit" and the "date of starting production." According to the statute, a "new unit" should not use machinery previously used in any other factory, and the "date of starting production" is determined by the later of the first purchase of raw material or the installation of a power connection. The court emphasized that these statutory definitions must be strictly adhered to, irrespective of the factual circumstances.
3. Impact of Reconstitution of a Partnership Firm into a Private Limited Company on Eligibility:
The court addressed whether the reconstitution of the partnership firm into a private limited company affected the eligibility for exemption. It was held that the ownership change did not alter the nature of the unit as a "new unit." The emphasis was on the unit's production capability and not on the ownership structure. The court cited previous judgments affirming that the reconstitution of a firm does not disqualify it from being considered a new unit eligible for tax exemption.
4. Validity of Power Connection and Machinery Purchase Dates in Determining Eligibility:
The Divisional Level Committee had rejected the application partly because the power connection and machinery purchases were in the name of the old partnership firm. The court clarified that the relevant date for determining the "date of starting production" should be based on the statutory explanation, which considers the later of the first raw material purchase or power connection installation. The court found that the committee had erred by not adhering to this statutory requirement.
5. Legal Interpretation of Section 4-A and its Explanations:
The court reiterated that the statutory definitions provided in Section 4-A and its explanations must be strictly followed. The explanations are considered substantive legislation, and any determination must be based on the factors mentioned therein. The court referenced Supreme Court judgments to support this interpretation, emphasizing that the legislative intent must be respected.
Conclusion:
The court quashed the Divisional Level Committee's order dated June 2, 1987, and directed it to reconsider the petitioner's application within one month. The court also awarded costs of Rs. 500 to the petitioner, acknowledging the repeated legal errors by the respondents that compelled the petitioner to approach the court multiple times. The petition was allowed on these terms.
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1987 (10) TMI 367
The High Court of Orissa quashed the assessment order denying exemption under Industrial Policy Resolution, 1979, for purchase tax on raw materials. The petitioner's liability is to be reassessed based on the principle of promissory estoppel. No costs were awarded. (Case citation: 1987 (10) TMI 367 - Orissa High Court)
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1987 (10) TMI 366
The High Court of Andhra Pradesh allowed the writ petitions seeking a declaration that "tilakam" and "kajal" are taxable as general goods at 4 per cent, not under a specific entry in the Sales Tax Act. The court quashed the revised assessment orders, stating that the original assessment was correct. No costs were awarded.
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1987 (10) TMI 365
Issues:
Interpretation of implied sale of bardana without evidence
Assessment of sales tax on bardana without factual basis
Applicability of decision on implied contract of sale for the entire year
Analysis:
The case involved the Board of Revenue, Madhya Pradesh, Gwalior, referring three questions to the High Court under the M.P. General Sales Tax Act, 1958. The questions pertained to the justification of inferring sales of bardana on a conjectural basis, overlooking previous findings, and applying a decision to the entire year despite the main issue being sub judice. The applicant, a sole selling agent of bidi manufacturers, was assessed for sales tax on bardana used in inter-State sales of bidis without concrete evidence of bardana sales. The Court considered whether the assessing authority could presume an implied sale of bardana and impose sales tax without factual findings of separate bardana sales.
The Court referred to the Supreme Court's ruling in Hyderabad Deccan Cigarette Factory v. State of Andhra Pradesh, emphasizing that the existence of an agreement for the sale of packing materials is a factual question that cannot be based on assumptions. The Court highlighted the elements required for a sale, including an agreement for transferring title, money consideration, and actual transfer of property. It was noted that the burden of proof lies on the taxing authorities to establish an implied sale, and the absence of findings on crucial points renders presumptions unjustified. The Court also cited a Division Bench decision in Commissioner of Sales Tax v. Bhopal Sugar Industries Ltd., emphasizing the necessity to exclude the possibility of containers being used for transportation without a sale agreement.
Based on the legal precedents, the Court concluded that the Tribunal was not justified in inferring bardana sales without concrete data, answering the first question in the negative. Consequently, the Court found it unnecessary to address the second and third questions, deeming them of academic importance. Questions two and three were left unanswered, and no costs were awarded. The judgment clarified the importance of factual findings in determining implied sales and highlighted the burden of proof on taxing authorities to establish such sales conclusively.
The judgment provides a comprehensive analysis of the issues raised by the Tribunal, emphasizing the need for concrete evidence to support the imposition of sales tax on bardana and the limitations on presuming implied sales without factual findings. The legal principles outlined in the judgment serve as a guide for future cases involving the assessment of sales tax based on implied contracts, highlighting the importance of factual determinations in tax assessments.
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1987 (10) TMI 364
The High Court of Andhra Pradesh dismissed the tax revision case regarding the classification of Johnson prickly heat powder under the Andhra Pradesh General Sales Tax Act, based on a letter of approval from the Government of India regulating drug prices. The Tribunal's decision was upheld. (Citation: 1987 (10) TMI 364 - ANDHRA PRADESH HIGH COURT)
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1987 (10) TMI 363
The High Court of Madhya Pradesh dismissed a writ petition challenging notices issued by the Sales Tax Officer regarding entry tax. The petitioner claimed it was not liable for entry tax as it did not bring goods into a local area for consumption, but the Sales Tax Officer contended otherwise. The court held that the issue of whether the petitioner caused entry of goods in another local area is a question of fact to be decided by the fact-finding authority. The court found the writ petition not maintainable at that stage and advised the petitioner to file a reply to the show cause notices and present evidence before the Sales Tax Officer. The writ petition was dismissed, and no costs were awarded, with the security amount to be refunded to the petitioner.
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1987 (10) TMI 362
Issues Involved:
1. Validity of the Kerala Finance Act 18 of 1987 regarding the imposition of sales tax on certain items.
2. Challenge based on Article 14 of the Constitution.
3. Retrospective effect of the Act from 1st July 1987.
Summary:
1. Validity of the Kerala Finance Act 18 of 1987:
The petitioners, owners of hotels and restaurants, challenged the Kerala Finance Act 18 of 1987, which imposed sales tax on item 57 of the First Schedule and item 4 of the Fifth Schedule of the Kerala General Sales Tax Act. The amendments introduced by the Finance Act subjected cooked food and beverages sold in bar-attached hotels and hotels above the grade of two stars to a 10% sales tax at the point of first sale. Additionally, "liquor other than foreign liquor, arrack, and toddy" was taxed at two points: 45% at the first sale and 15% at the last sale.
2. Challenge Based on Article 14 of the Constitution:
The petitioners argued that the classification of hotels and restaurants into bar-attached or above two stars for tax purposes was discriminatory and violated Article 14. The court noted that Article 14 forbids class legislation but allows reasonable classification. The classification must be based on an intelligible differentia with a rational nexus to the legislative objective. The court upheld the classification, stating that the State has wide discretion in selecting persons or objects to tax and that the classification was reasonable and related to the legislative objective of raising revenue and partially implementing the directive principle in Article 47 of the Constitution.
3. Retrospective Effect of the Act:
The petitioners also challenged the retrospective effect of the Act from 1st July 1987. The Act received the Governor's assent on 20th August 1987 and was published in the Gazette on the same day. The Advocate-General assured that the tax would only be collected from 20th August 1987 onwards, and no recovery would be made for the period between 1st July 1987 and 19th August 1987. The court recorded this submission and directed that no tax recovery be made for the period prior to the publication date.
Conclusion:
The court dismissed the petitions, holding that the levy on cooked food and liquor as per the amended provisions was valid and not violative of Article 14. The retrospective effect challenge was addressed by the State's assurance not to collect taxes for the period before the publication date. The petitions were dismissed with no order as to costs, and leave to appeal to the Supreme Court was refused.
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1987 (10) TMI 361
Issues Involved:
1. Legality of the recovery of the difference of tax under Section 6B of the Karnataka Entertainments Tax Act, 1958.
2. Validity of the computation of Gross Collection Capacity (GCC) for determining the composition tax under Section 4A of the Act.
3. Interpretation of amendments to Section 4A and the omission of the explanation for determining GCC.
4. Application of the rule of harmonious construction and schematic interpretation in statutory construction.
Issue-wise Detailed Analysis:
1. Legality of the recovery of the difference of tax under Section 6B of the Karnataka Entertainments Tax Act, 1958:
The petitioners, exhibitors of cinematograph films, challenged the recovery of the difference of tax under Section 6B of the Karnataka Entertainments Tax Act, 1958. The recovery notices were issued by the Assistant Commercial Tax Officer to recover sums of Rs. 16,216.20 and Rs. 42,539.90 from the petitioners for the periods specified. The petitioners argued that the recovery was illegal and without authority of law. The Court, however, upheld the notices demanding the difference of tax, rejecting the petitioners' contentions.
2. Validity of the computation of Gross Collection Capacity (GCC) for determining the composition tax under Section 4A of the Act:
The petitioners opted for the composition tax under Section 4A, which is payable in lieu of the tax under Sections 3 and 3A of the Act. The computation of GCC was central to determining the tax liability. The Assistant Commercial Tax Officer made an error in calculating the GCC, leading to the short recovery of tax. The Court found that the mistake in the calculation of GCC was validly corrected by the respondents, justifying the recovery of the difference in tax.
3. Interpretation of amendments to Section 4A and the omission of the explanation for determining GCC:
Section 4A was amended multiple times, extending the benefit of composition tax to places with larger populations. The petitioners contended that the GCC should be calculated based on the rates in force immediately prior to 1st July 1982, as per the previous explanation, arguing that the amending Act 3 of 1985 did not provide a new basis for determining GCC. The Court rejected this contention, holding that the rates of admission in force immediately prior to 15th February 1986 should be used for calculating GCC, even though the explanation was omitted in the amendment.
4. Application of the rule of harmonious construction and schematic interpretation in statutory construction:
The Court applied the rule of harmonious construction and schematic interpretation to resolve the apparent inconsistency created by the omission of the explanation in the amendment. It emphasized that the legislative intent and purpose must be considered to avoid absurdity or inconsistency. The Court concluded that the explanation should be read into the amended Section 4A to effectuate the legislative intent, thus ensuring the composition levy scheme remained meaningful and effective.
Conclusion:
The Court dismissed the writ petitions, upholding the recovery notices for the difference of tax. It interpreted the statutory provisions to align with the legislative intent, ensuring the proper application of the composition tax scheme under Section 4A as amended by Act 3 of 1985. The judgment emphasized the importance of harmonious and schematic interpretation in statutory construction to avoid anomalies and fulfill the legislative purpose.
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1987 (10) TMI 360
Issues:
1. Dismissal of license application based on turnover exceeding Rs. 1,50,000.
2. Lack of opportunity given to petitioners before rejection of license applications.
3. Legal infirmity in passing orders without following due procedure.
Issue 1: Dismissal of license application based on turnover exceeding Rs. 1,50,000:
The petitioners, a registered partnership firm, applied for a license under the M.P. General Sales Tax Act for the assessment years 1981-82 and 1982-83. The Sales Tax Officer dismissed the applications as the turnover exceeded Rs. 1,50,000. On revision, it was found that the turnover indeed exceeded the limit, leading to the dismissal of the applications. The court noted the turnover amounts for both years and upheld the decision based on the statutory provision.
Issue 2: Lack of opportunity given to petitioners before rejection of license applications:
The petitioners contended that they were not given an opportunity as required by rule 4(6) of the Rules before the rejection of their license applications. The court examined the notices and orders issued to the petitioners and found that proper opportunities were not provided. In one instance, a notice was issued incorrectly, and in another, no opportunity was given for the subsequent period. The court held that the petitioners were indeed not afforded the necessary opportunity as mandated by the Rules.
Issue 3: Legal infirmity in passing orders without following due procedure:
In a separate case, the petitioners sought to quash orders rejecting their license application for the assessment year 1979-80. The court found that the Sales Tax Officer had not followed the due procedure as outlined in the Rules. The Sales Tax Officer rejected the application without affording the petitioners an opportunity to prove the correctness of the information provided. The court held that the rejection was illegal and lacked compliance with the procedural requirements.
In conclusion, the court allowed the writ petitions, quashed the impugned orders, and directed the Sales Tax Officer to reconsider the license applications after providing the petitioners with the opportunity as per the Rules. The court emphasized the importance of following due process and providing parties with opportunities to be heard before making decisions.
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1987 (10) TMI 359
Issues:
1. Validity of ex parte assessment under the M.P. General Sales Tax Act, 1958.
2. Challenge against orders of assessment for the periods in question.
3. Allegation of error in determining business activities.
4. Failure to challenge assessment orders through appeal or revision.
5. Admissibility of additional material in a writ of certiorari.
6. Merits of additional material in challenging assessment orders.
Analysis:
1. The judgment concerns an ex parte assessment order passed under the M.P. General Sales Tax Act, 1958 for the period between 1st April, 1973, and 31st March, 1978. The petitioner contested the assessment, claiming not to be engaged in the kirana and foodgrains business, asserting that it was conducted by his father. Despite the plea, the Deputy Commissioner of Sales Tax upheld the original finding but remanded the matter for fresh tax and penalty determination.
2. Subsequently, fresh assessment orders were passed for the mentioned period and another period from 1st April, 1978, to 31st March, 1979. The petitioner did not appeal against these orders. Seeking to challenge the assessments, the petitioner filed a writ petition to quash the orders dated 16th November, 1981, and 28th February, 1981.
3. The petitioner argued that the authorities erred in finding that he was involved in the kirana and grain business. However, the court noted that such determination is a question of fact. Despite several opportunities provided to substantiate his claim, the petitioner failed to do so, leading to the finding being upheld as a fact-based decision.
4. The court highlighted that the finding of fact cannot be interfered with under Article 226 of the Constitution unless it is perverse or lacks evidence. In this case, the court found the finding to be based on material mentioned in the impugned orders, indicating no perversity.
5. Regarding the order dated 16th November, 1981, the court noted that the petitioner did not challenge it through appeal or revision as provided by the Act. Thus, the court opined that the writ petition could not be entertained against that order due to the failure to follow statutory remedies.
6. The petitioner sought to introduce additional material to support the claim of not conducting the kirana and grain business. However, the court held that a writ of certiorari is limited to the existing record and does not allow for the introduction of new material not presented before the lower authorities.
7. Even upon considering the additional material presented by the petitioner, the court found that it did not impact the question of whether the petitioner was engaged in the kirana and grain business during the relevant assessment periods. The court dismissed the writ petition, finding no merit in challenging the assessment orders based on the additional material.
8. In conclusion, the court dismissed the writ petition, ruling in favor of upholding the assessment orders. The petitioner was not granted any costs, and the security amount was ordered to be refunded.
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1987 (10) TMI 358
Issues: Interpretation of sales tax exemption notification for rice bran under the M.P. General Sales Tax Act, 1958 and the Central Sales Tax Act, 1956.
The judgment of the High Court of Madhya Pradesh dealt with the interpretation of a sales tax exemption notification regarding rice bran under the M.P. General Sales Tax Act, 1958, and the Central Sales Tax Act, 1956. The petitioner, a registered dealer, contended that rice bran should be considered as "husk" and thus exempt from sales tax under the notification dated 1st April, 1982. The Regional Assistant Commissioner of Sales Tax disagreed with this interpretation, leading to the filing of a writ petition seeking to quash the order disallowing the exemption for rice bran.
The petitioner relied on a previous decision of a Division Bench of the Court where sales of paddy husk were exempt from tax under a different notification. However, the Court distinguished the previous case as it did not involve rice bran specifically. Further, the Court referred to a decision of the Allahabad High Court which held that rice bran cannot be considered as "bhusi" or husk, as it is a product obtained during the polishing process of rice and not from the husk of grains.
Additionally, the petitioner presented an extract from a botanical book indicating that the seed coat of rice is part of the grain itself, suggesting that rice bran should be considered part of rice and not as a separate entity like husk. The Court also analyzed an earlier notification from 1967 which made a clear distinction between husk and bran, indicating that bran was not considered as husk in that notification.
Ultimately, the Court held that the notification dated 1st April, 1982 did not intend to grant exemption for rice bran based on the historical treatment of bran as a separate category from husk in previous notifications. Therefore, the Court dismissed the writ petition, stating that the impugned orders did not contain any manifest error of law or jurisdiction justifying their quashing. The petitioner's claim for exemption for rice bran under the notification was rejected, and the writ petition was dismissed without any costs awarded to either party.
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1987 (10) TMI 357
Issues:
1. Validity of best judgment assessment without submission of returns and day-to-day manufacturing account.
Analysis:
The case involved a dispute regarding the validity of a best judgment assessment made by the Tribunal under the Madhya Pradesh General Sales Tax Act, 1958. The Tribunal had to decide whether the best judgment assessment was justified despite the non-submission of two returns and the absence of a day-to-day manufacturing account. The assessee, engaged in manufacturing and selling dal, was initially assessed for the Diwali year 1974-75 through a best judgment assessment. The Appellate Assistant Commissioner upheld the assessment but reduced the tax amount and penalty, granting relief of Rs. 600 to the assessee.
Upon the assessee's appeal to the Tribunal, it contended that the best judgment assessment was unwarranted. The Tribunal agreed with the assessee, emphasizing that the reasons cited for the best judgment assessment were insufficient, as the accounts were closed and quantitative without any identified defects. The Tribunal, therefore, concluded that the best judgment assessment was not justified in this case.
Subsequently, the Commissioner of Sales Tax requested the Tribunal to refer the matter to the High Court for opinion. After hearing arguments from both parties, the High Court analyzed the relevant provisions of the Act and rules regarding the maintenance of accounts by registered dealers. The Court referred to a previous judgment where it was established that non-maintenance of certain records alone does not justify a best judgment assessment. The Court noted that in the present case, neither the Assistant Sales Tax Officer nor the Appellate Assistant Commissioner had found the accounting method employed by the assessee to be inadequate due to the absence of specific records.
Based on the legal principles and the specific circumstances of the case, the High Court concurred with the Tribunal's decision and ruled in favor of the assessee. The Court held that the best judgment assessment was not warranted, as the assessee's maintained accounts were found to be satisfactory and no deficiencies were identified. Therefore, the Court answered the referred question in the affirmative, supporting the assessee and rejecting the department's stance. The Court also decided that no costs would be awarded in this matter.
In conclusion, the High Court's judgment emphasized the importance of proper assessment procedures and the need for justifying a best judgment assessment based on substantial grounds rather than mere technical deficiencies in record-keeping.
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1987 (10) TMI 356
The High Court of Orissa allowed the writ application filed by the owner of goods against a demand made by the officer-in-charge of a check gate. The Court quashed the order and directed the Commissioner of Sales Tax to hear and decide the revision afresh in accordance with law. The petitioner was asked to appear before the Commissioner on a specified date.
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1987 (10) TMI 355
Issues:
- Whether the plaintiff is entitled to the suit amount or any portion thereof?
- Whether the plaintiff is entitled to the interest claimed and if so, at what rate and for what period?
- Whether the suit is maintainable in law?
- Whether there is a notice under section 80, C.P.C., prior to the suit and if so, it is valid?
- Whether the court erred in holding the action of the Commercial Tax Officer does not come under section 29 of the Act read with rule 33-A of the A.P. General Sales Tax Rules?
Analysis:
The case involves a dispute where the plaintiff, a rice dealer, filed a suit claiming the value of rice seized by the defendants, along with interest, expenses, and damages. The plaintiff sold rice to a dealer in another district, which was detained by a Commercial Tax Officer for lacking certain permits. The plaintiff obtained a clearance from the District Supply Officer stating no restrictions on the movement of rice. The trial court found in favor of the plaintiff, decreeing the suit against the defendants. The defendants appealed, arguing the legality of the detention under the Sales Tax Act.
The central issue in the appeal was whether the Commercial Tax Officer's actions were justified under Section 29 of the A.P. General Sales Tax Act. The Act empowers officers to detain goods vehicles to verify tax liability. However, in this case, the evidence showed the lack of necessity for permits and certificates for rice movement. The Court held that the officer's refusal to release the stock despite clearance exhibited mala fides, as the goods were perishable. The detention was deemed unjustified and mala fide.
The defendants also argued that a superior officer's order to release the goods precluded the court's jurisdiction. However, the order came eight months later and after the suit notice, indicating an attempt to evade liability. The Court referenced Section 29(3)(b) of the Act, emphasizing that detention orders must be promptly executed by the check post officer, not a superior officer after a significant delay.
The Court dismissed the defendants' reliance on Section 36 of the Act, emphasizing that the case did not concern challenging official orders but focused on the officer's mala fide actions. The Court concluded that no substantial legal question warranted overturning the lower courts' judgments. Consequently, the second appeal was dismissed, affirming the lower courts' decisions and awarding costs to the plaintiff.
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1987 (10) TMI 354
Whether the amount paid by way of freight by the principals of the appellant-commission agent was liable to be included in the taxable turnover of the appellant?
Held that:- Appeal allowed. The legislature intended that where the cost of freight was charged separately, that amount could not be included in the turnover of a dealer. That is what was done in this case. The freight was separately charged and was paid accordingly by the principals. The High Court erred in including the cost of freight in the taxable turnover of the appellant.
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1987 (10) TMI 346
Issues:
Challenge to the validity of notifications issued under the U.P. Excise Act regarding regulation of ayurvedic preparations, interpretation of State Government's power to regulate possession and consumption of medicinal preparations containing alcohol, applicability of previous Supreme Court judgment in State of Bombay v. F.N. Balsara [1951] 2 SCR 682, and the interpretation of Article 47 of the Constitution.
Analysis:
The judgment by K. Jagannatha Shetty, J., addresses the questions raised regarding the State Government's power to regulate the transport, possession, and consumption of ayurvedic preparations under the U.P. Excise Act, 1910. The case involves a manufacturer and a wholesale dealer of ayurvedic preparations challenging notifications issued by the State Government that declared these preparations as "liquor" and introduced rules regulating their sale and possession, particularly in districts where prohibition was in effect. The High Court dismissed the writ petition challenging the validity of these notifications, leading to an appeal before the Supreme Court.
The petitioners argued that the issue at hand was similar to the decision in State of Bombay v. F.N. Balsara [1951] 2 SCR 682, where the Supreme Court held that restrictions on medicinal and toilet preparations containing alcohol under the Bombay Prohibition Act were unreasonable. The Balsara case emphasized the exclusion of medicinal preparations from prohibition laws and highlighted the need for a distinction between misuse and legitimate use. However, the current judgment disagrees with the Balsara case, stating that waiting for misuse before regulation is not prudent. The Court interprets Article 47 of the Constitution, emphasizing the State's duty to improve public health and nutrition and to bring about the prohibition of intoxicating drinks and harmful drugs, without explicitly excluding medicinal preparations containing alcohol.
The Court concludes that Article 47 does not mandate the exclusion of medicinal preparations from prohibition, especially those with high alcohol content. It asserts that the State should have the power to regulate the possession and consumption of such preparations to effectively enforce prohibition and prevent misuse. As a result, the Court refers the case to a Constitution Bench for further consideration and disposal, highlighting the need for a comprehensive examination of the issues raised in the context of constitutional principles and public health objectives.
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1987 (10) TMI 333
Whether State has made profit by the sale of khandsari sugar at public auction?
Held that:- Appeal dismissed. The Government issued instructions to distribute the levy sugar liberally through permits for marriages and religious functions. The consumers, however, could not come forward. The Government then directed the disposal of levy sugar by public auction. It was not with a view to earn profit although incidentally the Government made some profit. The levy sugar was brought to public sale only to prevent deterioration when the consumers refused to accept it. We have no reason to doubt the explanation given by the State Government.
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1987 (10) TMI 328
Whether the levy of octroi by different municipalities within the State of Rajasthan on varying bases-some on weight of the material and others on the ad valorem basis of the price thereof at varying rates is valid in law?
Held that:- Appeal allowed. In the backdrop of a consolidating and uniform municipal legislation now operating in the field, the State Government may rationalise the rate structure prevalent in different municipal areas so that assessment of octroi would be convenient, a common method would be adopted, and the challenge which is raised now and again could be avoided-though we have made it clear that it would be competent for the State Government to allow varying rates in different municipalities keeping the provisions in section 104 of the Act in view.
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1987 (10) TMI 315
The High Court of Madhya Pradesh quashed a criminal complaint under section 630 of the Companies Act, 1956, against petitioners who were relatives of the former executive director. The court ruled that the provision does not allow prosecution of individuals who are not officers or employees, and therefore, the proceedings against the petitioners were dropped. (Case Citation: 1987 (10) TMI 315 - HIGH COURT OF MADHYA PRADESH)
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1987 (10) TMI 306
Issues Involved:
1. Misdeclaration of goods.
2. Under-valuation of imported goods.
3. Unauthorised importation.
4. Imposition of redemption fine and penalty.
5. Determination of assessable value of goods.
Detailed Analysis:
1. Misdeclaration of Goods:
The Customs authorities suspected that the imported goods were misdeclared. The appellants described the goods as "Zip Fastners" and not as "Polyester Zippers," which the Customs authorities alleged was a misdeclaration. The appellants argued that the non-addition of trade nomenclature did not amount to misdeclaration. The Tribunal found no document to show that the imported goods were Nylon Zippers, as alleged by the Customs, and thus did not attach importance to the findings of the Collector regarding misdeclaration.
2. Under-valuation of Imported Goods:
The Customs authorities alleged that the imported goods were undervalued. The appellants claimed that the goods were rejected stock and dead stock, which justified the low price. They provided evidence that the goods had been shipped from Japan to Singapore and back, causing deterioration. The Tribunal noted that the price list and the invoice price in respect of Suhag Traders could not be relied on in toto nor rejected completely. The Tribunal concluded that the value of the goods should be somewhere between what the department found and what the appellants pleaded.
3. Unauthorised Importation:
The Customs authorities held that there was unauthorised importation. The appellants argued that the transaction was genuine and that the goods were purchased at a negotiated price. The Tribunal found that the manner in which the goods were purchased without correspondence, offer, negotiations, and documentation did not inspire complete confidence in the total bona fides of the transaction.
4. Imposition of Redemption Fine and Penalty:
The Collector imposed a redemption fine and a penalty on the appellants. The Tribunal ordered that the redemption fine imposed be reduced to Rs. 75,000 and the penalty be reduced to Rs. 25,000, considering the circumstances of the case.
5. Determination of Assessable Value of Goods:
The Customs authorities valued the goods at Rs. 3,34,735, while the appellants declared the value as Rs. 1,28,035. The Tribunal, after considering the evidence and arguments, decided that the value of the goods for purposes of assessment and ITC should be Rs. 2,23,147. The Tribunal noted that the appellants produced licenses for goods worth Rs. 1,28,033, leaving goods valued at Rs. 95,114 as uncovered by licenses. Customs duty was to be charged on the value ordered by the Tribunal.
Conclusion:
The appeal was partly allowed, with the Tribunal reducing the redemption fine and penalty and revising the assessable value of the imported goods. The Tribunal's decision balanced the evidence and arguments presented by both sides, arriving at a fair conclusion regarding the value and penalties.
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