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1997 (2) TMI 561
Issues Involved:
1. Whether the amount of Rs. 11,00,000 paid to the assessee by M/s. Hindustan Ciba Geigy Ltd. (HCGL) against a restrictive covenant is exigible to tax.
Summary:
Issue 1: Taxability of Compensation Paid Against Restrictive Covenant
The solitary issue in this appeal is whether the amount of Rs. 11,00,000 paid to the assessee by HCGL against a restrictive covenant is exigible to tax. The assessee, who had a distinguished career in the pharmaceutical industry, entered into an agreement with HCGL on 11th April 1983, agreeing not to engage in any competitive business for five years in exchange for Rs. 11,00,000.
The Assessing Officer added this amount to the assessee's income, treating it as "profits in lieu of salary" u/s 17 of the Income-tax Act, 1961. The CIT(A) confirmed this addition. The assessee argued that the compensation was a capital receipt, not exigible to tax, and relied on the Supreme Court's decision in Superintendence Co. of India v. Shri Krishan Murgai [1981] 2 SCC 246, which held that agreements of service containing restrictive covenants are not void u/s 27 of the Indian Contract Act, 1872, during the term of employment.
The Department contended that the compensation was for past services and thus taxable. The Department also argued that the restrictive covenant was a ploy to evade tax, citing the sequence of events leading to the agreement.
The Tribunal held that the restrictive covenant was entered into consequent upon the termination of employment and was not a subterfuge. The Tribunal noted that u/s 27 of the Contract Act, restrictive covenants extending beyond the term of service are void. The Tribunal also emphasized that the burden of proving tax evasion lies with the Department, which failed to provide substantial evidence.
The Tribunal concluded that the compensation was a capital receipt, not a revenue receipt, as it was not remuneration for services but a payment for agreeing to refrain from competitive business. The Tribunal relied on precedents like CIT v. Ajit Kumar Bose [1987] 165 ITR 90 and Gillanders Arbuthnot & Co. Ltd. v. CIT [1964] 53 ITR 283, which held that such payments are capital receipts.
Conclusion:
The Tribunal allowed the appeal, holding that the amount of Rs. 11,00,000 paid to the assessee by HCGL against a restrictive covenant is not exigible to tax, as it is a capital receipt.
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1997 (2) TMI 560
Issues Involved:
1. Disallowance u/s 43B on sales tax.
2. Disallowance of bad debts/business loss.
3. Tax treatment of Rs. 3,00,000 received on surrender of the trademark 'Rasna'.
4. Claim of technical know-how fees as revenue expenditure.
5. Deduction of provision for trade guarantee.
6. Additional depreciation on certain equipment.
7. Depreciation on assets used in the office of a factory not set up.
8. Non-allowance of bad debts written off.
Summary:
1. Disallowance u/s 43B on Sales Tax:
The assessee did not press this issue during the hearing, and it was treated as rejected.
2. Disallowance of Bad Debts/Business Loss:
This issue was also not pressed during the hearing and was treated as rejected.
3. Tax Treatment of Rs. 3,00,000 Received on Surrender of the Trademark 'Rasna':
The assessee claimed the amount as a capital receipt, relying on the Supreme Court decision in CIT v. B.C. Srinivasa Setty [1981] 128 ITR 294. The CIT(Appeals) treated it as revenue. The Tribunal upheld the assessee's claim, stating that the trademark 'Rasna' was a joint property and the amount received was in the nature of capital.
4. Claim of Technical Know-How Fees as Revenue Expenditure:
The assessee claimed technical know-how fees of Rs. 35,13,678 as revenue expenditure. The Assessing Officer treated it as capital expenditure, noting that the technical know-how provided an enduring advantage. The CIT(Appeals) upheld this view. The Tribunal remanded the issue to the Assessing Officer for verification, noting that if the technical know-how was for modernizing existing processes, it could be considered revenue expenditure.
5. Deduction of Provision for Trade Guarantee:
The assessee made a provision of Rs. 137.28 lakhs for trade guarantees, which the Assessing Officer disallowed as contingent expenditure. The CIT(Appeals) upheld this disallowance. The Tribunal allowed the provision, noting that it was based on a scientific analysis and consistent with the commercial practice of accounting for expected losses.
6. Additional Depreciation on Certain Equipment:
The Tribunal rejected the claim for additional depreciation on items like Nashua paper copier, water cooler, and air-conditioning machinery, noting that similar claims were disallowed in the previous assessment year.
7. Depreciation on Assets Used in the Office of a Factory Not Set Up:
The Tribunal directed the Assessing Officer to allow depreciation on assets used in the office, even though the factory was not set up, as the office was in use.
8. Non-Allowance of Bad Debts Written Off:
The Tribunal allowed the claim for bad debts written off, noting that the write-offs were based on commercial considerations and reasonable in the circumstances.
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1997 (2) TMI 559
... ...
... ... ..... JJ. ORDER Appeal dismissed.
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1997 (2) TMI 558
Issues Involved:
1. Reduction of the addition from Rs. 14,16,912 to Rs. 1,00,000.
2. Estimation of net business income at 0.50% on the turnover of Rs. 2 crores.
3. Validity of the loss of books of account claim.
4. Estimation of sales and gross profit.
5. Allowability of expenses.
Detailed Analysis:
1. Reduction of the Addition:
The primary issue raised by the Revenue was the reduction of the addition from Rs. 14,16,912 to Rs. 1,00,000 by the Commissioner of Income-tax (Appeals) (CIT(A)). The CIT(A) based this reduction on an estimated net profit rate of 0.50% on a turnover of Rs. 2 crores. The Revenue contended that this reduction was erroneous and arbitrary.
2. Estimation of Net Business Income:
The CIT(A) estimated the net business income at 0.50% on the turnover of Rs. 2 crores, resulting in an income of Rs. 1,00,000. This estimation was based on the past records of the assessee, which showed a net profit rate of 0.35% for the assessment year 1985-86. The CIT(A) considered it reasonable to apply a higher net profit rate of 0.50% given the circumstances.
3. Validity of the Loss of Books of Account Claim:
The assessee claimed that the books of account were lost in transit, which was reported to the police and advertised in a local newspaper. The Assessing Officer (AO) found this claim to be concocted, citing discrepancies in the timing and manner of reporting the loss. The AO believed that the books were deliberately withheld to reduce tax liabilities. However, the CIT(A) accepted the loss of books as a fact and proceeded with the assessment based on available records.
4. Estimation of Sales and Gross Profit:
The AO estimated the total sales at Rs. 2,90,92,953 based on the sales register for April and May 1985, which showed sales of Rs. 90,92,953. The AO then estimated the sales for the remaining period (4 months and 22 days) at Rs. 2 crores. The AO applied a gross profit rate of 6.5%, resulting in a gross profit of Rs. 18,91,041. The CIT(A) found this estimation excessive and reduced the estimated turnover to Rs. 2 crores, considering the past turnover records and the shorter accounting period (6 months and 22 days).
5. Allowability of Expenses:
The AO disallowed 40% of the expenses, citing unverifiable and unsigned debit notes. The CIT(A), however, did not explicitly address the disallowance of expenses but focused on the net profit estimation. The Judicial Member (JM) agreed with the AO on the sales estimation and gross profit rate but directed that expenses should be allowed without any deduction. The Third Member (TM) concurred with the CIT(A) and Accountant Member (AM), emphasizing that a net profit rate of 0.50% on the estimated sales of Rs. 2 crores was fair and reasonable.
Conclusion:
The appeal by the Revenue was dismissed, with the majority view supporting the CIT(A)'s decision to estimate the net business income at 0.50% on the turnover of Rs. 2 crores, resulting in an income of Rs. 1,00,000. The assessment was based on a fair and reasonable estimation considering the past records and the circumstances of the case. The claim of loss of books was accepted, and the estimation method adopted by the CIT(A) was upheld.
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1997 (2) TMI 557
Issues Involved:
1. Confirmation of addition as deemed income u/s 2(24)(x) r.w.s. 36(va).
2. Confirmation of disallowance u/s 43B.
Summary:
Issue 1: Confirmation of addition as deemed income u/s 2(24)(x) r.w.s. 36(va)
The learned CIT (A) confirmed the addition of Rs. 4,23,567 as deemed income u/s 2(24)(x) r.w.s. 36(va) (being Employees' Contribution towards Provident Fund). The assessee argued that the payments were made within 15 days from the date of payment of salary, which was on the 7th of every month, and thus were under a bona fide belief that the amounts were to be deposited by the 15th of the next month. The assessee contended that the delay was not intentional and was due to the availability of funds. The ITAT acknowledged the ambiguity in the definition of "month" and the bona fide belief of the assessee. It was held that the payments made within 9 to 22 days from the date of salary disbursement should be deemed as made within the due date, thus no disallowance u/s 43B and addition as deemed income u/s 2(24)(x) should be made.
Issue 2: Confirmation of disallowance u/s 43B
The learned CIT (A) confirmed the disallowance of Rs. 5,98,578 u/s 43B. The assessee argued that the provisions of sections 43B and 2(24)(x) read with section 36(1)(va) should be interpreted to avoid injustice and absurdity. The ITAT noted that the intention behind these provisions was to penalize those who did not pay the deducted amounts or disputed the liability. Since the assessee had made the payments within the relevant assessment year, a strict interpretation would lead to injustice and absurd results. The ITAT, referencing the CBDT Circular No. 372 and the legislative intent, held that the provisions should be interpreted liberally to avoid such outcomes. Consequently, the disallowance u/s 43B was deleted.
Conclusion:
The ITAT concluded that the additions made by invoking sections 43B and 2(24)(x) read with section 36(1)(va) were not justified. The payments made by the assessee within 9 to 22 days from the date of salary disbursement were deemed to have been made within the due date, and thus, no disallowance or addition as deemed income should be made. The ITAT deleted the additions, emphasizing a liberal interpretation of the provisions to avoid injustice and absurdity.
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1997 (2) TMI 556
Issues:
1. Revision petition against judgment and order dated February 9, 1996.
2. Dismissal of complaint under sections 323/452 of the Indian Penal Code.
3. Legality of the order passed by the Additional Sessions Judge.
4. Barred revision petition by time.
5. Opportunity of being heard before passing an order.
Analysis:
1. The revision petition challenged the judgment and order dated February 9, 1996, passed by the Additional Sessions Judge, which set aside the order of the Metropolitan Magistrate dismissing the complaint under sections 323/452 of the Indian Penal Code.
2. The complaint filed by the respondent was initially dismissed by the Magistrate, who concluded that the alleged incident did not occur and the complaint was fabricated to pressure the respondents. The Additional Sessions Judge, in the impugned judgment, directed the Magistrate to summon the petitioners under the relevant sections of the IPC.
3. The petitioners contended that the Additional Sessions Judge passed the impugned order without hearing them, which they argued was illegal and violated the principles of natural justice. The respondent's counsel, however, argued that the revision petition was time-barred and since the complaint was dismissed without summoning the petitioners, there was no obligation for the Additional Sessions Judge to hear them.
4. The Court examined the powers of revision of a Sessions Judge under Section 399 of the Code of Criminal Procedure, which equates the powers of a Sessions Judge to that of a High Court under Section 401 of the Cr.P.C. It emphasized that no order to the detriment of an accused or person can be made without giving them an opportunity to be heard, as mandated by Section 401(2).
5. The Court found that the order passed by the Sessions Judge directing the summoning of the petitioners in their absence was illegal and invalid. Citing precedent, the Court reiterated the necessity of providing an opportunity to be heard before passing any order prejudicing the accused or other persons.
6. Addressing the preliminary objection raised regarding the maintainability of the revision petition, the Court determined that the petition was filed within the prescribed 90-day period from the date of summonses issued by the Magistrate. Consequently, the Court allowed the petition, set aside the impugned order, and remanded the case back to the Additional Sessions Judge for a fresh order after hearing both parties.
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1997 (2) TMI 555
The Supreme Court dismissed the Special Leave Petition arising from a complaint against a bank for failure to disburse the full loan amount, leading to business losses. The court found that the petitioners' inability to repay was due to market slump, not deficiency in service. The petition was dismissed.
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1997 (2) TMI 554
Issues Involved:
1. Incorporation and Authorization
2. Supply of Goods
3. Entitlement to Interest
4. Counterclaims by Defendants
5. Amount Recoverable by Plaintiff
6. Relief
Summary:
1. Incorporation and Authorization:
The court found that the plaintiff is duly incorporated under the Indian Companies Act and the suit has been instituted by a person authorized by the company.
2. Supply of Goods:
The court confirmed that the plaintiff supplied goods relating to Bill No. 283560 dated 24.3.76 to the defendants.
3. Entitlement to Interest:
The plaintiff is entitled to charge interest because the defendants unjustifiably denied the plaintiff's claim. The court fixed the rate of interest at 12% per annum from the date of the plaint until realization.
4. Counterclaims by Defendants:
The court addressed various counterclaims made by the defendants:
- No amount is due from the plaintiff to the defendants as alleged in Clauses (a) to (h) of para 27 of the written statement.
- A sum of Rs. 20,000.00 as alleged in para 28 of the written statement is not due from the plaintiff to the defendants.
- The defendants have not proved their claim to a commission of Rs. 60,000.00 as stated in para 29 of the written statement.
- The defendants are not entitled to a sum of Rs. 7,988.00 as stated in para 30 of the written statement.
- The defendants are not entitled to a sum of Rs. 1,652.25 as stated in para 32 of the written statement.
- The defendants have not proved their claim as stated in para 33 of the written statement.
5. Amount Recoverable by Plaintiff:
The court found that the plaintiff is entitled to recover a sum of Rs. 1,18,492.66 from the defendants.
6. Relief:
The court decreed:
- Directing the defendants to pay the plaintiff a sum of Rs. 1,18,492.66.
- Directing the defendants to pay the plaintiff interest at 12% per annum on the sum of Rs. 1,18,492.66 from the date of the suit until realization.
- Directing the defendants to pay the plaintiff the costs of the suit.
- Dismissing the counterclaim filed by the defendants with no costs.
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1997 (2) TMI 553
Issues involved: Proper sanction under Prevention of Corruption Act for criminal proceedings.
Summary:
The appeal was against the judgment of the Madras High Court in a criminal case involving the respondent, a Sub-Inspector of Police convicted for offenses under Sections 7, 13(2) read with Section 13(1)(d)(i)(ii) of the Prevention of Corruption Act. The appellant alleged lack of proper sanction for proceeding under the Act. The High Court found that relevant materials, including statements recorded by the Investigating Officer, were not placed before the City Commissioner of Police for sanction. Despite a detailed report from the Vigilance Department, it was deemed insufficient for proper sanction as it did not include all necessary materials. The High Court concluded that there was no proper sanction, rendering the criminal case not maintainable. The High Court's decision was upheld, and it was determined that the courts should not have considered the prosecution case on merits without proper sanction. The High Court was advised to drop the proceedings, with the option for the State to proceed afresh with necessary sanction if desired.
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1997 (2) TMI 552
Issues Involved:
1. Judicial inquiry into the alleged fake encounter.
2. Appropriate action against erring police officials.
3. Compensation to the families of the deceased.
Summary:
1. Judicial Inquiry into the Alleged Fake Encounter:
The People's Union for Civil Liberties filed a writ petition u/s 32 of the Constitution of India, seeking a judicial inquiry into an alleged fake encounter by Imphal Police on 3-4-1991, resulting in the deaths of two villagers. The petitioner claimed that the encounter was staged, and the victims were taken into custody and killed. The Supreme Court directed the District and Sessions Judge, Churachandpur, to investigate the incident. The Judge concluded that there was no encounter and the two deceased were shot dead by the police while in custody.
2. Appropriate Action Against Erring Police Officials:
The State of Manipur denied the allegations, claiming the deaths occurred during a genuine cross-firing with terrorists. However, the Court accepted the findings of the District and Sessions Judge, rejecting the State's version of events. The Court emphasized that even in disturbed areas, "administrative liquidation" is not permissible, and the police should have dealt with the suspects according to the law.
3. Compensation to the Families of the Deceased:
The Court referenced previous judgments, including Challa Ramkonda Reddy v. State of A.P. and Nilabati Behera v. State of Orissa, to underline the State's liability for violating the right to life guaranteed by Article 21. The Court held that the defence of sovereign immunity does not apply in cases of fundamental rights violations. Consequently, the Court awarded compensation of Rs. 1,00,000 to the families of each deceased, to be paid by the Government of Manipur. Additionally, the People's Union for Civil Liberties was awarded costs of Rs. 10,000.
Conclusion:
The writ petition was disposed of with directions for compensation and costs, emphasizing the non-negotiable nature of the right to life and the State's accountability for its violation.
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1997 (2) TMI 551
Issues Involved:
1. Non-consideration of the detenu's representation by the detaining authority and the Central Government.
2. Expeditious consideration of the representation against the declaration under Section 10(1) of the PITNDPS Act.
3. Obligation of the Central Government to consider the detenu's representation independently of the Advisory Board's opinion.
Detailed Analysis:
Issue 1: Non-consideration of the detenu's representation by the detaining authority and the Central Government
The detenu, Sayed Haji Baitullah, was detained under Section 3(1) of the PITNDPS Act. The detenu's wife submitted a representation dated 9.10.1995 to the detaining authority, which was received on 11.10.1995. The detaining authority and the Central Government were obliged to consider this representation. However, it was contended that neither the detaining authority nor the Central Government independently considered this representation. The affidavit of Shri A.K. Srivastava confirmed the receipt of the representation but did not indicate any consideration by the Central Government.
Issue 2: Expeditious consideration of the representation against the declaration under Section 10(1) of the PITNDPS Act
The second contention involved the representation dated 9.10.1995 against the declaration dated 14.9.1995 under Section 10(1) of the PITNDPS Act. This declaration allowed detention for more than three months without the Advisory Board's opinion. The representation was received by the declaring authority on 25.10.1995. The contention was that this representation should have been considered expeditiously by both the declaring authority and the Central Government independently of the Advisory Board's opinion. The affidavit of Shri R.K. Tewari indicated that the representation was forwarded to the Advisory Board but did not confirm any independent consideration by the Central Government.
Issue 3: Obligation of the Central Government to consider the detenu's representation independently of the Advisory Board's opinion
The primary contention was that the Central Government was required to independently consider the detenu's representation dated 9.10.1995 against both the order of detention and the declaration under Section 10(1) of the PITNDPS Act. The Supreme Court's decisions in Nand Lal Bajaj v. The State of Punjab and Smt. Gracy v. State of Kerala established that the Central Government must independently consider the detenu's representation without being influenced by the Advisory Board's opinion. The affidavit of Shri R.K. Tewari confirmed that the Central Government did not independently consider the representations at any stage.
Conclusion:
The judgment concluded that the continued detention of the detenu was not permissible as per the law due to the Central Government's failure to independently consider the detenu's representations. The order of detention dated 11 August 1995 was quashed and set aside, and the detenu was ordered to be released from detention. However, it was clarified that the detenu would remain in custody due to pending cases under the NDPS Act where bail had either been refused or not granted.
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1997 (2) TMI 550
Issues Involved:
The issues involved in the judgment include resignation withdrawal, equality under Article 14, invidious discrimination, and enforcement of wrong orders.
Resignation Withdrawal:
The respondent, a Small Pox Supervisor, tendered his resignation to contest the election but later withdrew it. The High Court observed that the respondent had no enforceable right to claim the benefit of withdrawal of resignation, especially when three similarly situated persons were not granted the same relief. The Court highlighted that allowing a wrong decision to be enforced does not entitle an individual to claim equality under Article 14 for reinstatement.
Equality under Article 14:
The High Court's decision was based on the principle of equality under Article 14 of the Constitution. The Court emphasized that invidious discrimination occurs when equals are treated differently without any rational basis. The judgment highlighted that enforcing a wrong decision does not lead to equality or parity, as two wrongs do not make a right. The respondent's right to equality treatment must be founded on an enforceable right, which was lacking in this case.
Enforcement of Wrong Orders:
The judgment discussed the implications of enforcing wrong orders. It was emphasized that a wrong decision by the Government does not give an individual the right to enforce that decision and claim parity or equality. The Court illustrated this point by comparing the scenario to an employee dismissed for misappropriation of money and later reinstated - the reinstatement cannot be claimed as a right based on equality under Article 14. The High Court was deemed to be incorrect in directing the respondent's reinstatement through a mandamus, as there was no enforceable right for such relief.
Conclusion:
The Supreme Court allowed the appeal, overturning the High Court's decision regarding the respondent's reinstatement. The judgment emphasized that enforcing a wrong decision does not entitle an individual to claim equality or parity under Article 14. The Court highlighted the importance of having an enforceable right to seek relief and concluded that the High Court's direction for reinstatement was erroneous. The appeal was allowed without costs.
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1997 (2) TMI 549
Issues:
- Challenge to order of dismissal based on authority of the Chairman
- Non-availability of original file for verification
- Compensation awarded by Division Bench
- Justification of Division Bench's decision
- Request for reconsideration of other submissions by respondent
Analysis:
The case involved an appeal against a High Court judgment regarding the dismissal of a Development Officer by the Appellant-Board. The respondent challenged the dismissal order, arguing that it was not passed by the Competent Authority, the Chairman. The Single Judge and the Division Bench dealt with this issue differently. The Single Judge upheld the dismissal, stating that all proceedings were approved by the Chairman. However, the Division Bench, unable to verify due to the missing original file, awarded the respondent total benefits as if he had retired at superannuation age. The Division Bench emphasized the doubt due to the missing file and awarded compensation of Rs. 60,000 to the respondent.
The appellant-Board contended that the Division Bench should have accepted the Single Judge's findings and that they were unable to produce the original file as it was not returned by the Court. The Supreme Court agreed with the appellant, stating that the Single Judge's findings should be accepted as correct. The respondent's contrary argument was dismissed, and the dismissal was deemed to be by the Competent Authority, the Chairman. The Court found no reason to doubt the Single Judge's statement.
The respondent's counsel raised concerns about other submissions not considered by the Division Bench due to the decision on the authority issue. In light of this, the Supreme Court allowed the appeal, set aside the High Court judgment, and remitted the matter back to the High Court for a fresh disposal, ensuring all submissions are considered. The Court made no order as to costs, indicating a fair and unbiased approach to the case.
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1997 (2) TMI 548
Issues involved: Delay in compliance with court orders leading to imposition of personal costs against the officer.
Judgment Summary:
The Supreme Court addressed the issue of judicial review of administrative actions and legislation, emphasizing that the State must act within the limits set by the law, i.e., constitutionalism. Judicial review is crucial in a welfare State where administrative actions affect individuals, ensuring compliance with the rule of law. The bureaucracy, though accountable to the political executive, is also subject to judicial review, with the head of the department ultimately responsible for actions taken. The Court highlighted the importance of ensuring compliance with the rule of law in administrative actions.
Regarding the specific case, the Court noted that the petitioner, a member of the permanent executive, failed to comply with a court order within the specified time frame. Despite the expectation of expeditious action, the authorities did not provide any explanation for the delay or seek additional time for compliance. Consequently, the High Court imposed personal costs against the officer for non-compliance with the court order.
The Court acknowledged that delays may occur in implementing decisions, but officers are required to provide valid explanations to the Court. Imposing personal costs against officers should be done cautiously, considering the circumstances of each case to prevent public injustice. In this instance, where the delay was significant and unexplained, the High Court's decision to impose personal costs against the officer was upheld by the Supreme Court.
Ultimately, the Supreme Court dismissed the special leave petition, affirming the imposition of personal costs against the officer for non-compliance with the court order.
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1997 (2) TMI 547
Issues Involved:
1. Validity of Rule 3(5) of the Tripura Transit Rules.
2. Validity of the application fee and licence fee under Rule 3(3) and 3(4).
3. Validity of Rule 3(2) concerning the requirement of a licence for transporting timber/firewood.
4. Validity of Rule 3(8) concerning the prohibition of export of timber/firewood.
5. Constitutionality of Rule 3 in light of Article 301 of the Constitution.
Summary:
1. Validity of Rule 3(5) of the Tripura Transit Rules:
The Supreme Court agreed with the High Court that Rule 3(5), which empowers the State Government to levy export duty up to 100% of the market value of timber/firewood, is beyond the rule-making power conferred by Section 41 of the Indian Forest Act, 1927. The power to levy duty is exclusively conferred upon the Central Government by Section 39 of the Act. Thus, Rule 3(5) was rightly declared invalid.
2. Validity of the Application Fee and Licence Fee under Rule 3(3) and 3(4):
The Supreme Court held that the application fee of Rs. 1,000 and the licence fee of Rs. 2,000 do not amount to a tax but are regulatory fees within the meaning of Section 41(2)(c) of the Indian Forest Act. The Court noted that regulatory fees do not require a quid pro quo, distinguishing them from compensatory fees. Therefore, the fees levied by Rule 3(3) and 3(4) were deemed valid and competent.
3. Validity of Rule 3(2) Concerning the Requirement of a Licence for Transporting Timber/Firewood:
Rule 3(2) was held to be within the four corners of Section 41 of the Indian Forest Act, which empowers the State Government to regulate the transit of timber and other forest produce. The requirement of a licence for removing or transporting timber/firewood from within the State to outside the State and for setting up trading depots was deemed valid.
4. Validity of Rule 3(8) Concerning the Prohibition of Export of Timber/Firewood:
The Supreme Court held that the power to "regulate" under Section 41 of the Act includes the power to "prohibit" under certain circumstances. Rule 3(8), which allows the State Government to prohibit the export of timber/firewood to cater to the needs of local people, was found to be valid. The Court emphasized that the term "regulate" must be interpreted broadly, considering the context and purpose of the legislation.
5. Constitutionality of Rule 3 in Light of Article 301 of the Constitution:
The Supreme Court rejected the High Court's finding that Rule 3 violates Article 301 of the Constitution. The Court reasoned that Rule 3 is made by the State as a delegate of Parliament to carry out the purposes of the Indian Forest Act, a post-constitutional enactment for Tripura. Therefore, it is protected by Article 302, which allows Parliament to impose restrictions on trade and commerce in the public interest. Consequently, Rule 3 does not require compliance with the proviso to clause (b) of Article 304.
Conclusion:
The appeal was allowed in part. Rule 3 of the Tripura Transit Rules, except sub-rule (5), was declared valid and effective. The judgment of the High Court was set aside to the extent that it declared Rule 3 invalid. No costs were awarded.
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1997 (2) TMI 546
Issues:
Appointment validity based on Rules 9, 23, 23-A, and 24-A of the Rajasthan Service of Engineers (Building and the Roads Branch) Rules, 1954.
Analysis:
The case involved a challenge to the appointment of certain individuals, B.S. Bhatnagar and H.L. Meena, by the Departmental Promotion Committee (DPC) for nine vacancies existing and anticipated as of April 1, 1995. The central issue was whether their appointments were made in accordance with the Rules, specifically Rule 9, Rule 23, Rule 23-A, and Rule 24-A of the Rajasthan Service of Engineers Rules. The contention was that the appointments were based on the criteria existing at the time of selection by the DPC, which was prior to the introduction of Rule 24-A through statutory amendment on July 24, 1995.
The State argued that the appointments were made in accordance with the existing Rules and the selection criteria in place at the time of selection by the DPC. However, the contesting respondents contended that the amended Rules should have been applied retroactively to appointments made after the introduction of Rule 24-A. The Court considered the applicability of the amended Rules and the criteria for promotion specified in the relevant columns against vacancies existing as of April 1 of the selection year.
The Court clarified that appointments made to vacancies existing before the amendment of the Rules should be governed by the original Rules, while vacancies arising after the amendment should be filled in accordance with the amended Rules. The judgment emphasized that appointments should be made based on the Rules in force at the time the vacancies arose. The Court highlighted the option for the Government or appointing authority to either make temporary promotions or revise the panel prepared in accordance with Rule 24-A (11-B) for appointments.
The Court held that appointments of individuals like B.S. Bhatnagar and H.L. Meena, made prior to the amended Rules coming into force, should be considered temporary pending a fresh selection process based on the amended Rules. The judgment also addressed the case of another individual, B.L. Kankas, who was appointed after the amended Rules came into force and had already retired, ordering his promotion to remain undisturbed. The Government was directed to constitute a new DPC to consider eligible candidates as per the Rules and make fresh selections within a specified timeframe. The benefits granted under the impugned order were not to be revoked, but seniority and other criteria were subject to the Government's decision.
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1997 (2) TMI 545
The Supreme Court dismissed the appeals as the appellants did not secure permission from the Committee of Secretaries to prosecute the appeals. No order was given as to costs. (1997 (2) TMI 545 - SC)
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1997 (2) TMI 544
Issues Involved:
1. Determination of ceiling area for land holdings under the Kerala Land Reforms Act, 1963.
2. Interpretation of "family" and the application of Explanation I to Section 82 of the Act.
3. Treatment of multiple wives and their children in calculating the ceiling area.
Summary:
1. Determination of Ceiling Area:
The appeal was filed against the judgment of the Kerala High Court in C.R.P. No. 1894 of 1988, which directed the declarant to surrender surplus land beyond the ceiling area as determined by the Taluk Land Board. Initially, the Board ordered the surrender of 190.54 acres, which was later revised to 97.16 acres after a remit by the High Court.
2. Interpretation of "Family" and Explanation I to Section 82:
The declarant, having three wives and ten children, argued that each wife and her children should be considered a separate family under Explanation I to Section 82 of the Act. The High Court rejected this plea, holding that the properties of the husband, the wife named by him, and their unmarried minor children would be considered one family for determining the ceiling area. The properties of the other wives and their children would be treated separately, and the husband's properties would not be included in their ceiling area calculations.
3. Treatment of Multiple Wives and Their Children:
The High Court's interpretation was that the husband could only be a member of one family, chosen by him, and only the lands owned by this statutory family would be considered for the ceiling area. This interpretation was consistent with previous judgments, including Kesava Menon vs. State of Kerala and Mavilammal vs. Taluk Land Board, which held that the husband's lands could only be accounted for in the family he chose, not in the families of his other wives.
Conclusion:
The Supreme Court affirmed the High Court's judgment, agreeing that the lands owned by the husband and the family chosen by him would be considered for the ceiling area. The lands owned by the other wives and their children would not be included. The Court emphasized the importance of maintaining consistency in legal interpretations, especially those that have been long established, and dismissed the appeal without costs.
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1997 (2) TMI 543
The Supreme Court affirmed the decision of the High Court on the classification issue. The question of refund will be decided in accordance with the decision in Mafatlal Industries Ltd. The appeal is disposed of with no costs.
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1997 (2) TMI 542
Issues Involved:
1. Employment of children in the carpet industry.
2. Violation of constitutional mandates.
3. Welfare measures for children.
4. Implementation of international conventions.
Summary:
1. Employment of children in the carpet industry:
This writ petition u/Art. 32 of the Constitution was filed as public interest litigation seeking a writ of mandamus to stop the employment of children in the carpet industry in Uttar Pradesh. The petitioner contended that employing children in any industry, especially hazardous ones, violates Article 24 of the Constitution and is derogatory to the mandates in Articles 39(e) and (f). The Court-appointed committee found that children aged 5 to 12 were kidnapped and forced into carpet weaving, treated as slaves, and subjected to physical torture. The committee's report revealed that 42% of the workforce in 42 villages were children below 14 years, with most belonging to Scheduled Castes and Scheduled Tribes.
2. Violation of constitutional mandates:
The primary contention was that the employment of children below 14 years violates Article 24 and the State's omission to provide welfare facilities deprives them of constitutional mandates in Articles 45, 39(e) and (f), 21, and 14. The judgment emphasized the importance of childhood for the future development of society and the role of the State in securing the health, strength, and opportunities for children as enshrined in the Constitution.
3. Welfare measures for children:
The judgment highlighted the need for the State to provide facilities like education, health, sanitation, nutritious food, and other welfare measures. It referred to various constitutional provisions and international conventions, including the Universal Declaration of Human Rights and the Convention on the Rights of the Child, which mandate the State to ensure the well-being and development of children. The Court reiterated the need for compulsory education and other welfare measures to eradicate child labor and empower children from poor and marginalized sections of society.
4. Implementation of international conventions:
The judgment also discussed the obligations under international conventions, such as the Convention on the Rights of the Child, which India ratified. It emphasized the State's duty to protect children from economic exploitation and ensure their right to education, health, and development. The Court directed the Government of India to convene a meeting with concerned State Ministers and Principal Secretaries to evolve policies for the progressive elimination of child labor and ensure the implementation of welfare measures.
Conclusion:
The writ petition was disposed of with directions to the Central Government to convene a meeting within two months to evolve principles and policies for eliminating child labor and providing welfare measures. The States of Uttar Pradesh and Bihar were directed to ensure the implementation of these directions and submit periodical reports to the Court. The matter was posted for further review after three months.
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