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1984 (1) TMI 351
Issues:
Interpretation of the term "industrial unit" in a notification u/s Rule 8 of the Central Excise Rules, 1944.
Summary:
The petition sought clarification on the meaning of "industrial unit" in a notification exempting certain goods from excise duty. The petitioners, who manufactured varnishes in a separate building within their factory, claimed the exemption. The Assistant Collector rejected their claim, stating that the entire factory complex was one industrial unit. The High Court referred to dictionary definitions of "unit" and "industrial" to determine that the building exclusively used for varnish production qualified as an industrial unit. Consequently, the court set aside the Assistant Collector's order and directed refunds for excess duty paid.
The court emphasized the distinction between "factory" and "industrial unit" in the notification, indicating that they were intended to have different meanings. The term "unit" was defined as a separate part of a complex whole, while "industrial" referred to industry-related activities. Applying these definitions, the building dedicated to varnish manufacturing was deemed an industrial unit.
The Assistant Collector's decision was challenged based on the interpretation of "industrial unit." The court relied on dictionary definitions to establish that the building where varnishes were produced constituted a distinct industrial unit within the factory complex. Consequently, the petitioners were deemed eligible for the exemption under the notification.
The court directed the authorities to refund the excess duty paid by the petitioners and set aside the Assistant Collector's order, recognizing the building used exclusively for varnish production as a separate industrial unit. The judgment highlighted the importance of interpreting legal terms in accordance with their defined meanings to uphold the petitioners' entitlement to the exemption.
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1984 (1) TMI 349
Issues Involved:
1. Validity of the permission granted under Section 21 of the Delhi Rent Control Act, 1958.
2. Misrepresentation and false statements by the respondent.
3. Applicability of the rule of oppression and collusion in the context of Section 21 of the Act.
4. The right of the respondent to recover possession of the premises under Section 21 of the Act.
Issue-wise Detailed Analysis:
1. Validity of the Permission Granted under Section 21 of the Delhi Rent Control Act, 1958:
The appeal challenges the judgment dismissing the appellants' objections to the respondent's application for possession of the premises after the expiry of the lease period. The initial permission to lease the premises was granted under Section 21 of the Delhi Rent Control Act, 1958, which allows landlords to lease out premises for a limited period with the Controller's permission. The Supreme Court scrutinized whether the permission was obtained through genuine necessity or misrepresentation.
2. Misrepresentation and False Statements by the Respondent:
The appellants argued that the respondent obtained the permission by making false statements. The respondent misrepresented that the premises had not been leased out earlier, whereas it was later admitted that a tenant named Kataria had vacated the premises only a few months before the application. Additionally, the respondent falsely described her foster mother as her real mother and misrepresented the age and class of her son to create an impression of temporary necessity. The Supreme Court found these statements to be half-truths aimed at securing permission under Section 21, which would not have been granted otherwise.
3. Applicability of the Rule of Oppression and Collusion in the Context of Section 21 of the Act:
The respondent contended that the appellants, having colluded with her initially, should not be allowed to challenge the permission. The Supreme Court rejected this argument, emphasizing that collusion between unequal parties does not validate the transaction. The Court highlighted the principle that where one party dominates and the other submits under compulsion, it is not a case of collusion but oppression. This view aligns with the rule of oppression, which allows relief to the weaker party in transactions involving unequal bargaining power.
4. The Right of the Respondent to Recover Possession of the Premises under Section 21 of the Act:
The Tribunal and the High Court had dismissed the appellants' objections mechanically without applying the correct legal principles from the precedent set in S.B. Noronah v. Prem Kumari Khanna. The Supreme Court held that the respondent, having obtained permission through misrepresentation, was not entitled to recover possession under Section 21. The Court emphasized that Section 21 aims to protect tenants from unscrupulous landlords and prevent misuse of the provision for temporary leasing.
Conclusion:
The Supreme Court set aside the judgments of the High Court and the Tribunal, dismissing the respondent's application for possession under Section 21 of the Act. The appeal was allowed with costs, reaffirming the need for genuine necessity and truthful representation in applications under Section 21 of the Delhi Rent Control Act, 1958.
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1984 (1) TMI 348
Issues Involved:
1. Applicability of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (New Rent Act)
2. Date of completion of the building
3. Payment of arrears of rent
4. Application of Section 39 of the New Rent Act during pending litigation
Issue-Wise Detailed Analysis:
1. Applicability of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (New Rent Act):
The primary issue was whether the building in question was exempt from the New Rent Act. The respondent claimed the building was constructed in 1971 and thus exempt for ten years under Sub-section (2) of Section 2 of the New Rent Act. The appellant contended that the building was constructed in 1968, making it subject to the New Rent Act. The Third Additional District Judge and the High Court both held that the building was exempt from the New Rent Act as it was less than ten years old at the time of the suit.
2. Date of Completion of the Building:
The date of completion was crucial to determining the applicability of the New Rent Act. The building was assessed to house and water tax on 1st October 1971, which was considered the completion date. The High Court accepted this finding, making the building less than ten years old at the time of the suit, thus exempt from the New Rent Act.
3. Payment of Arrears of Rent:
The appellant argued that he had paid Rs. 1000 through a cheque dated 16th August 1976, which the landlord received on 15th September 1976. The High Court found that the payment by cheque was not specifically put to the landlord in the witness box, and there was no clear evidence for which period this payment was made. Consequently, the High Court set aside the trial court's decree relating to the recovery of Rs. 3158.30 as arrears of rent and remanded the case for redetermination of the amount of rent in arrears.
4. Application of Section 39 of the New Rent Act During Pending Litigation:
The appellant argued that even if the building was initially exempt, it became subject to the New Rent Act during the pendency of the litigation as it completed ten years. The Supreme Court referred to Section 2 of the New Rent Act, which exempts buildings for ten years from the date of completion. It was noted that the building completed ten years during the litigation. The Court cited the principle from Pasupati Venkateswarlu v. Motor and General Traders that courts must consider facts arising after the initiation of litigation if they fundamentally impact the right to relief. The Court decided that the appellant should be given the benefit of the New Rent Act, including the protections under Section 39, which allows tenants to avoid eviction by paying arrears and other dues.
Conclusion:
The Supreme Court allowed the appeal in part, setting aside the High Court's judgment regarding eviction but maintaining the remand for redetermination of rent arrears. The case was sent back to the III Additional District Judge to apply the New Rent Act, giving the appellant an opportunity to deposit dues as per Section 39, after determining any amount due towards rent. The costs were to abide by the result.
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1984 (1) TMI 347
Issues:
1. Eligibility for exemption under section 11 of the IT Act.
2. Compliance with the provisions of section 12A(b) regarding audit report submission.
3. Admissibility of additional ground raised during the appeal.
4. Interpretation of the term "along with" in relation to filing audit reports.
5. Consideration of audit report in assessment proceedings.
6. Reassessment and application of provisions of section 13(1)(bb).
Analysis:
1. The case involved the trustees of a trust seeking exemption under section 11 of the IT Act. The dispute arose when the assessing authorities held that the trust was not eligible for exemption under section 11 in respect of a part of its income. The primary ground for denial of exemption was the applicability of section 13(1)(bb) to the business income derived by the trust.
2. The trust was required to have its accounts audited under section 12A(b) of the IT Act. The assessing authorities contended that the audit report should have been filed along with the return of income, and the delay in submitting the report led to the denial of exemption under section 11. The trust argued that the requirement of section 12A(b) was procedural and enabling, citing various Tribunal decisions supporting the submission of audit reports before the final assessment.
3. An additional ground was raised during the appeal regarding the interpretation of section 12A(b) requirements. The trust contended that the term "along with" should not be construed strictly, and the audit report submission before the final assessment should suffice. The Tribunal admitted this additional ground, considering it as part of the overall argument on exemption under section 11.
4. The Tribunal examined the meaning of the term "along with" in relation to filing audit reports. While the Revenue argued for strict compliance, the Tribunal referred to a Patna High Court decision and various Tribunal decisions supporting a flexible interpretation. It held that the audit report should be filed before the final assessment, not necessarily with the return of income.
5. The Tribunal noted that the assessing authorities did not have the benefit of scrutinizing the audit report before making their decisions. As a result, it directed the Income Tax Officer (ITO) to consider the audit report afresh and reassess the trust's eligibility for exemption under section 11. The previous assessment order was set aside for a fresh assessment in accordance with the law.
6. The Tribunal decided that reassessment proceedings would address the trust's objections regarding the application of section 13(1)(bb) to the trust's income. The appeal was partly allowed, indicating a need for reassessment based on proper consideration of the audit report and relevant provisions of the IT Act.
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1984 (1) TMI 346
Issues Involved:
1. Temporary Injunction for Trademark Infringement
2. Consolidation of Application for Cancellation of Design Registration
3. Perpetual Injunction for Trademark and Design Infringement
4. Passing Off
5. Copyright Infringement of Cartons
6. Design Infringement of Stoves
Issue-wise Detailed Analysis:
1. Temporary Injunction for Trademark Infringement:
The plaintiff sought a temporary injunction to restrain the defendant from manufacturing, selling, or offering stoves under the identical or similar design, shape, or configuration as the plaintiff's stoves, which are trademarked as 'Perfect' and 'Swastik Perfect'. The court noted that the plaintiff had been using the trademark 'Perfect' since 1964, and the defendant, who had been an agent for the plaintiff until 1981, started manufacturing stoves under the trademarks 'Trishul Perfect' and 'Vijay Perfect'. The court found that the plaintiff's use of the trademark 'Perfect' was earlier than the defendant's, and there was a risk of the defendant passing off their goods as those of the plaintiff. Therefore, the court issued a temporary injunction restraining the defendant from using the word 'Perfect' as a trademark.
2. Consolidation of Application for Cancellation of Design Registration:
The defendant filed an application (C.O. 14/83) for the cancellation of the plaintiff's stove design registration. The plaintiff sought to consolidate this application with the present suit. The court found that consolidating the application would cause unnecessary confusion, as it only pertained to the validity of the design registration and not to the trademarks and copyrights of the cartons, which were more significant for the suit. Hence, the court dismissed the consolidation application but ordered that it be listed on the same day and before the same bench as the present suit.
3. Perpetual Injunction for Trademark and Design Infringement:
The plaintiff sought four types of perpetual injunctions: to restrain the defendant from using the trademarks 'Perfect' and 'Swastik Perfect', from using cartons with these trademarks, from using stoves with a similar design, and from passing off their stoves as those of the plaintiff. The court found that the plaintiff did not have an exclusive right to the word 'Perfect' due to a disclaimer during the trademark registration. However, the court acknowledged that the plaintiff could still claim rights against passing off, as these rights do not arise from trademark registration but from common law.
4. Passing Off:
The court analyzed whether the plaintiff could restrain the defendant from using the word 'Perfect' on the grounds of passing off. It concluded that despite the disclaimer, the plaintiff could still acquire the right to exclusive use of the word 'Perfect' through long usage. The court found that the defendant, having been the plaintiff's agent, could easily pass off their products as those of the plaintiff. Therefore, the court issued an injunction to stop the defendant from using the word 'Perfect' to prevent passing off and deceit.
5. Copyright Infringement of Cartons:
The plaintiff claimed that the defendant's cartons had a similar design to theirs, which had a distinctive and artistic color scheme, get-up, layout, and writing style. The court examined the cartons and found sufficient differences between the plaintiff's light yellow background cartons and the defendant's bluish or violet background cartons. The court concluded that there was no prima facie infringement of the copyright of the cartons' shape, color scheme, etc.
6. Design Infringement of Stoves:
The plaintiff claimed that the defendant's stoves had a similar design to theirs, which was registered. The court found that all stoves generally have the same design and did not find anything extraordinary in the plaintiff's stoves. The court opined that as long as the defendant did not use the word 'Perfect' on their products, the stoves would be distinguishable, and there was no need for an injunction regarding the design.
Conclusion:
The court issued a temporary injunction restraining the defendant from using the word 'Perfect' as a trademark or in any words denoting their trademark for stoves to prevent passing off. The application for consolidation was dismissed. The court found no prima facie infringement of the cartons' copyright or the stoves' design. The temporary injunction will continue until the disposal of the suit.
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1984 (1) TMI 345
Issues:
1. Interpretation of Hindu Succession Act, 1956 regarding succession of property.
2. Application of Section 15(1) and Section 15(2) of the Act.
3. Effect of gift on succession of property.
4. Merger of limited estate into full ownership under Section 14(1) of the Act.
Analysis:
The case involves the succession of property following the death of Ram Chand, the original male-holder. His widow, Smt. Dhanti, gifted the estate to their two daughters, Shankari and Amar Kaur. After Shankari's death, her estate was mutated in favor of Amar Kaur. The key issue was whether the inheritance of Shankari's estate should be governed by Section 15(1) or Section 15(2) of the Hindu Succession Act, 1956. Smt. Amar Kaur argued that Shankari succeeded to the estate of her parents, making Section 15(2) applicable as an acceleration of succession. However, the lower courts decreed in favor of the plaintiffs, ruling that the gift did not accelerate succession, and thus, Section 15(2) was not applicable.
The High Court analyzed the legal position, stating that under customary law or Hindu Law, the widow and daughters could succeed to the estate with certain limitations. The court held that the gift by Smt. Dhanti to her daughters did not accelerate succession, and Shankari inherited a life estate that was later enlarged into full ownership under Section 14(1) of the Act. The court emphasized that Shankari's ownership was not derived from her parents but by operation of law under the Act. Therefore, it was determined that Section 15(1) of the Act applied in this case, tracing the heirs of Shankari's husband for succession.
The court rejected the argument that Shankari inherited the property from her parents, emphasizing that the legal fiction under Section 14(1) converted her limited estate into full ownership. The court cited precedent to support its interpretation, highlighting that the words in Section 15(2) did not advance the appellant's case. Consequently, the appeal was dismissed, ruling in favor of the plaintiffs. The judgment clarified the application of Sections 14(1), 15(1), and 15(2) of the Hindu Succession Act, providing a detailed analysis of the succession of property in the case based on the facts and legal provisions.
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1984 (1) TMI 344
Issues:
1. Setting aside an ex parte decree based on service of notice.
2. Validity of filing a regular appeal after failing to set aside an ex parte decree.
Analysis:
1. The plaintiff filed a suit for possession of agricultural land against the legal representatives of the previous owners, claiming that the land was sold to them fraudulently. An ex parte decree was passed in favor of the plaintiff as the second set of vendees did not appear in the suit. The second set of vendees later filed an application to set aside the ex parte decree, which was dismissed in default. However, on appeal, the Additional District Judge found that the second set of vendees were not properly served, leading to the ex parte proceedings being declared illegal. The matter was remitted back to the trial court for fresh decision.
2. In the subsequent appeal, the plaintiff argued that the second set of vendees could not file a regular appeal after failing to set aside the ex parte decree through an application under Order 9, Rule 13 of the Civil Procedure Code. Citing legal precedents, the plaintiff contended that once an application under Order 9, Rule 13 failed, a regular appeal could not be filed. However, the counsel for the second set of vendees relied on a different legal precedent to support the appeal, arguing that if no determination under Order 9, Rule 13 takes place, the Appellate Court can review the service of notice and the validity of the ex parte proceedings.
3. The judge analyzed the legal arguments and distinguished the precedents cited by both parties. It was held that in this case, as the application under Order 9, Rule 13 was dismissed in default, there was no determination regarding proper service and the validity of the ex parte proceedings. Therefore, the judge concluded that the matter was rightly dealt with by the lower Appellate Court, which had the authority to review the service of notice and the legality of the ex parte proceedings.
4. No further arguments were raised on the merits of the lower Appellate Court's decision, and the judge found the appeal devoid of merit. Consequently, the appeal was dismissed with costs, and the parties were directed to appear before the trial court on a specified date.
5. The judgment concluded by dismissing the appeal and upholding the decision of the lower Appellate Court, emphasizing that the matter was rightly dealt with, given the circumstances of the case.
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1984 (1) TMI 343
Issues Involved:
1. Applicability of Section 13 A-1 of the Bombay Rent Act.
2. Interpretation of legislative intent behind Section 13 A-1.
3. Scope of protection provided to tenants under the Bombay Rent Act.
4. Conditions for eviction under Section 13 A-1.
5. Conclusiveness of the certificate from the Head of Service or Commanding Officer.
Issue-wise Detailed Analysis:
1. Applicability of Section 13 A-1 of the Bombay Rent Act:
The appellant, a retired member of the Armed Forces, sought eviction of the respondent tenant under Section 13 A-1 of the Bombay Rent Act. This section, introduced in 1975, allows members or retired members of the Armed Forces to recover possession of premises bona fide required for their occupation or for their family members. The appellant produced the necessary certificate from his Commanding Officer, as mandated by the section, which was deemed conclusive evidence of the facts stated therein.
2. Interpretation of Legislative Intent Behind Section 13 A-1:
The judgment emphasized that the Bombay Rent Act is a welfare legislation aimed at protecting tenants from unreasonable eviction. However, Section 13 A-1 was a deliberate legislative departure favoring Armed Forces personnel due to the unique nature of their service, which often prevents them from occupying their premises. The court highlighted the principle that where the language of a statute is clear and explicit, it must be given effect as it plainly conveys the legislature's intention.
3. Scope of Protection Provided to Tenants Under the Bombay Rent Act:
Section 13 (1) (g) of the Act generally protects tenants by allowing eviction only if the premises are reasonably and bona fide required by the landlord. Further, Section 13 (2) stipulates that no eviction decree shall be passed if greater hardship would be caused to the tenant than to the landlord. However, Section 13 A-1 overrides these protections for Armed Forces personnel, provided they produce the requisite certificate and prove bona fide requirement.
4. Conditions for Eviction Under Section 13 A-1:
Under Section 13 A-1, the landlord must produce a certificate from the Head of Service or Commanding Officer stating that he is a member or retired member of the Armed Forces and does not possess any other suitable residence in the local area. The certificate is conclusive evidence of these facts. The landlord must also prove that he bona fide requires the premises for his own occupation or for his family members. The court noted that the certificate does not automatically prove bona fide requirement, which must be established separately.
5. Conclusiveness of the Certificate from the Head of Service or Commanding Officer:
The certificate from the Head of Service or Commanding Officer is conclusive evidence of the landlord's status as a member or retired member of the Armed Forces and the absence of any other suitable residence. The court clarified that the certificate does not cover the bona fide requirement, which remains a matter for judicial determination. The judgment also referenced a previous decision, Mrs. Wintfred Ross & Anr. v. Mrs. Ivy Fonseca and others, to support the interpretation that the benefit of Section 13 A-1 applies to those who were landlords while in service, but not necessarily to those who acquired the premises after retirement.
Conclusion:
The court allowed the appeal, setting aside the High Court's judgment and restoring the decisions of the Rent Controller and the appellate authority, which had decreed eviction in favor of the appellant. The respondents were given time until September 30, 1984, to vacate the premises, subject to filing an undertaking within four weeks. The judgment underscores the special consideration given to Armed Forces personnel under Section 13 A-1 while maintaining the necessity of proving bona fide requirement for eviction.
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1984 (1) TMI 342
Issues Involved:
1. Entitlement to relief under section 84 of the Income-tax Act, 1961, for the assessment years 1964-65, 1965-66, and 1966-67 in respect of the Raipur plant.
2. Deduction as revenue expenditure of the payment of Rs. 6,000 made to the Central Electronic Research Institute for the assessment year 1966-67.
Issue-wise Detailed Analysis:
1. Entitlement to Relief under Section 84 for Assessment Years 1964-65, 1965-66, and 1966-67:
Facts:
- The assessee-company manufactures electrodes and welding equipment and had a manufacturing unit at Bhandup. A new plant was set up at Bilaspur, Raipur, which began production on 24-7-1962.
- The total cost of the Raipur plant was Rs. 10,50,997, with Rs. 2,51,556 worth of plant and machinery transferred from the Bhandup factory.
- Additional buildings and machinery were added in the previous year relevant to the assessment year 1964-65, bringing the total value to Rs. 12,58,672.
- The assessee claimed relief under section 84 for the assessment year 1964-65, which was initially omitted by the ITO and later rejected under section 154.
Contentions:
- The assessee argued that the relief should be considered for the assessment year 1964-65 as the construction was completed in that year.
- The revenue contended that the relief under section 84 should be considered with reference to the year the unit began to manufacture, i.e., the assessment year 1963-64, and the four succeeding years.
Tribunal's Decision:
- The Tribunal concluded that the relief under section 84 could not be available for the assessment year 1964-65 and the succeeding years as the unit began production in the previous year relevant to the assessment year 1963-64, where the value of old assets exceeded 20% of the total investment.
High Court's Analysis:
- The High Court noted that the legislative intent behind section 84 was to provide a tax incentive to newly established industrial undertakings.
- The Court emphasized that the provisions should be construed liberally to encourage new industrial undertakings.
- The Court examined whether the Raipur unit complied with the condition in section 84(2)(ii), considering the Explanation and sub-section (7).
- It was held that the condition prescribed in section 84(2)(ii) should be considered for each of the five relevant assessment years, not just the year of commencement.
- The Court found that in the assessment years 1964-65 to 1966-67, the value of previously used plant and machinery did not exceed 20% of the total value, thus complying with the Explanation.
Conclusion:
- The High Court concluded that the assessee was entitled to the relief under section 84 for the assessment years 1964-65, 1965-66, and 1966-67 in respect of the Raipur plant.
- Question No. 1 was answered in the affirmative and in favor of the assessee.
2. Deduction as Revenue Expenditure of Rs. 6,000 for Assessment Year 1966-67:
Facts:
- The assessee claimed a deduction of Rs. 6,000 paid to the Central Electronic Research Institute for acquiring the technical process of flash gun as revenue expenditure.
Tribunal's Decision:
- The claim was rejected by the income-tax authorities and the Tribunal, which held that the payment was in the nature of capital expenditure.
High Court's Analysis:
- The High Court noted that the assessee did not wish to pursue this question.
Conclusion:
- The High Court declined to answer Question No. 2 as the assessee did not desire it to be answered.
Costs:
- The High Court ordered that there would be no order as to costs, considering all the facts and circumstances of the case.
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1984 (1) TMI 341
Issues Involved:
1. Whether the order of discharge was violative of Article 311(2) of the Constitution.
2. Whether the order of discharge was violative of Article 14 of the Constitution.
3. Whether the order of discharge was based on conjectures and surmises.
Summary:
1. Violation of Article 311(2):
The appellant, a probationer in the Indian Police Service, was discharged from service without an enquiry into the alleged misconduct of arriving late for a ceremonial drill practice on June 22, 1981. The Supreme Court held that the order of discharge, though non-committal on its face, was in reality a termination based on misconduct. The Court emphasized that the true character of the order should be determined by reading it along with the recommendation of the Director, which was the basis for the order. The Court concluded that the alleged act of misconduct was the real foundation for the discharge, and since no enquiry was held as required u/r 12 of the Indian Police Service (Probation) Rules, 1954 and Article 311(2) of the Constitution, the order was liable to be struck down.
2. Violation of Article 14:
The appellant contended that the order of discharge was discriminatory and violated Article 14 of the Constitution. The Court noted that similar explanations were called from other probationers, but only the appellant was dealt with severely. The Court found that the Director wished to make an example out of the appellant for others, which indicated a discriminatory approach. Thus, the order was also violative of Article 14.
3. Conjectures and Surmises:
The appellant argued that the order was based on conjectures and surmises. The Court observed that the other instances of alleged misconduct mentioned in the counter affidavit were mere allegations and not substantiated. The Court held that the real foundation for the discharge was the incident on June 22, 1981, and the other instances were put forward only to strengthen the otherwise weak defense. Therefore, the order was based on conjectures and surmises.
Conclusion:
The Supreme Court set aside the judgment of the High Court and the impugned order dated November 5, 1981, discharging the appellant from service. The appellant was ordered to be reinstated with the same rank and seniority, along with all consequential benefits, including arrears of salary and allowances. The appeal was allowed, and the parties were directed to bear their own costs.
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1984 (1) TMI 340
Issues Involved:
1. Validity of the State Government's Notification dated June 14, 1974.
2. Power of the State Government under the Defence of India Rules, 1971.
3. Alleged inconsistency between the Central and State notifications.
4. Alleged violation of Article 14 of the Constitution of India.
Issue-Wise Detailed Analysis:
1. Validity of the State Government's Notification dated June 14, 1974:
The appellants challenged the validity of the State Government's notification dated June 14, 1974, which restricted the sale price of fertilizers from old stocks to the pre-revision rates. The notification aimed to prevent dealers from charging higher prices for fertilizers acquired before the price hike on June 1, 1974. The Supreme Court upheld the High Court's decision, which confirmed the validity of the notification, emphasizing that the notification was issued to prevent unjust enrichment of dealers at the expense of cultivators.
2. Power of the State Government under the Defence of India Rules, 1971:
The appellants argued that the State Government lacked the power to issue the impugned notification under the Defence of India Rules, 1971, as the regulation of fertilizer prices should fall exclusively under the Essential Commodities Act, 1955. The Supreme Court rejected this contention, affirming that both the Essential Commodities Act, 1955, and the Defence of India Rules, 1971, are valid legislations enacted by Parliament. The Court held that there is no constitutional or jurisprudential limitation preventing the creation of two sources of power for regulating prices.
3. Alleged inconsistency between the Central and State notifications:
The appellants contended that the State notification was inconsistent with the Central notification issued on June 1, 1974. The Supreme Court examined whether there was any irreconcilable inconsistency between the two notifications. The Court found that the Central notification was silent on the issue of old stocks, while the State notification specifically addressed this aspect. The Court concluded that the two notifications were supplementary rather than inconsistent, as the State notification aimed to prevent exploitation and promote the objectives of both the Central and State regulations.
4. Alleged violation of Article 14 of the Constitution of India:
The appellants argued that the State notification violated Article 14 of the Constitution, claiming discriminatory treatment as governmental agencies were allegedly allowed to sell fertilizers at higher rates. The Supreme Court found no evidence supporting this claim, as the State Government had not granted any such permission. The Court held that the allegation of discrimination was unfounded, and the High Court was justified in rejecting this contention.
Conclusion:
The Supreme Court dismissed the appeals, confirming the validity of the State Government's notification dated June 14, 1974. The Court emphasized that the notification was issued to prevent unjust enrichment and exploitation of cultivators by dealers. The Court also vacated the interim orders and directed the concerned District Magistrates to take appropriate steps to return the differential amounts deposited by the dealers to the cultivators within six months.
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1984 (1) TMI 339
Issues involved: Bail conditions, trial proceedings, duty of advocates
Bail conditions: The Supreme Court dismissed a petition for special leave to appeal against an order of the Delhi High Court refusing bail until a witness examination. The court directed the trial to proceed from day-to-day upon commencement, emphasizing the importance of continuous trial proceedings in Sessions cases to ensure expedition and prevent manipulation.
Trial proceedings: The court highlighted the necessity for Sessions trials to be conducted continuously from start to finish, without being fragmented. It stressed that a Sessions Judge must ensure all essential evidence is available before starting the trial, and once commenced, should proceed daily unless unavoidable circumstances necessitate an adjournment for a compelling reason.
Duty of advocates: The petitioner sought modification of the trial direction, citing difficulty for advocates to attend court daily. The court emphasized the professional duty of advocates in criminal cases to be present at the trial daily once they accept a brief. It stated that failing to attend daily would constitute a breach of professional duty, underscoring the importance of advocate commitment to trial proceedings.
The Criminal Miscellaneous Petition was dismissed, affirming the obligation of advocates to attend trial daily in criminal cases to ensure the expeditious and continuous progress of Sessions trials.
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1984 (1) TMI 338
Issues:
1. Interpretation of Supreme Court decision regarding set off of losses between priority and non-priority industries.
2. Allowance of deduction on profit of priority industry with nil or negative gross total income.
Analysis:
1. The petitioner filed a reference application with the ITAT under s. 256(1) of the IT Act, 1961, questioning the interpretation of the Supreme Court decision in the case of Cambay Electric Supply & Industrial Company Ltd. The Tribunal rejected the reference applications seeking to refer two questions to the High Court under s. 256(2) of the IT Act, 1961. The petitioner contended that deductions under ss. 80-I and 80-J should be calculated separately for each relevant unit, not adjusted against each other. The High Court referred to the Supreme Court's interpretation of a similar provision in s. 80M and concluded that deductions should be calculated based on the full amount of income received from the priority or new undertaking, not after adjusting profits or losses between units.
2. The High Court highlighted the different wording of s. 80E compared to ss. 80-I, 80-J, and 80M, emphasizing that the Supreme Court's decision in Cambay Electric Supply Industrial Co. Ltd. vs. CIT was not applicable to the present case. The Court ruled that the deductions should be calculated based on the entire income received from the priority or new undertaking, without adjusting profits or losses between units. Consequently, the rule was discharged, and the petitioner was ordered to pay the respondent's costs.
This detailed analysis of the judgment provides insights into the interpretation of relevant provisions of the IT Act, 1961, and the application of Supreme Court decisions in determining deductions for priority and non-priority industries.
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1984 (1) TMI 337
Issues Involved:
1. Whether the conditions of a permit can be varied to increase the number of trips and/or vehicles allowed under that permit.
2. Whether the conditions of a permit held by an existing operator on an inter-State route exempted under the Kolar Pocket Scheme can be varied to allow an increase in the number of vehicles operating under that permit.
Detailed Analysis:
Issue 1: Variation of Permit Conditions to Increase Trips and/or Vehicles
The primary question was whether the conditions of a permit could be varied to increase the number of trips or vehicles allowed under that permit. The Supreme Court analyzed the interpretation of sub-section (8) of Section 57 of the Motor Vehicles Act, 1939, which states that an application to vary the conditions of a permit "shall be treated as an application for the grant of a new permit." The Court clarified that this provision does not create a legal fiction that results in the grant of a new permit but rather prescribes that the procedure for considering such an application should be the same as that for a new permit.
The Court emphasized that the language of sub-section (8) does not indicate the creation of a legal fiction. Instead, it aims to ensure that the procedural requirements for varying permit conditions are as stringent as those for granting new permits. The Court cited previous judgments, including the case of "East End Dwellings Co. Ltd. v Finsbury Borough Council," to support its interpretation that the legal fiction, if any, is limited to procedural aspects and does not extend to deeming the varied permit as a new permit.
Issue 2: Variation of Permit Conditions under the Kolar Pocket Scheme
The second issue was whether the conditions of a permit held by an existing operator on an inter-State route exempted under the Kolar Pocket Scheme could be varied to allow an increase in the number of vehicles. The Kolar Pocket Scheme nationalized passenger transport services on certain routes but allowed existing inter-State permit holders to continue operating on inter-State routes, provided their permits were rendered ineffective for overlapping portions of the notified routes.
The Court found that increasing the number of trips or vehicles on inter-State routes was not inconsistent with the provisions of the Kolar Pocket Scheme. The Scheme's primary restriction was that existing permit holders could not pick up or set down passengers on the overlapping portions of the notified routes. Therefore, the Court concluded that the variation in the number of trips or vehicles did not affect the Scheme's objective and was permissible.
Conclusion and Judgment:
The Supreme Court upheld the Karnataka High Court's decision, which allowed the variation of the permit conditions to increase the number of trips or vehicles. The Court dismissed the appeal, stating that the procedural requirements under sub-section (8) of Section 57 were met, and the variations did not amount to the grant of a new permit. The Court also noted that the variations were not inconsistent with the Kolar Pocket Scheme.
The appeal was dismissed, and the costs were awarded to Respondent Nos. 1 to 3, while Respondent No. 4 was directed to bear his own costs.
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1984 (1) TMI 336
Issues Involved:
1. Legality of the ban imposed by the Government of Maharashtra on the sale of lottery tickets of other States within Maharashtra.
2. Legislative competence concerning lotteries organised by the Government of India or a State.
3. Executive power of the State and Union Government in relation to lotteries.
Summary:
1. Legality of the Ban:
The petitioners, agents for the sale of lottery tickets from various States, challenged the ban imposed by the Government of Maharashtra on the sale of these tickets within Maharashtra. They sought a writ of Mandamus directing Maharashtra to refrain from interfering with the sale or distribution of such tickets. The ban was inferred from a press release dated September 24, 1969, and a communication dated August 24, 1981, from the Maharashtra Finance Department, which declared the sale of lottery tickets from other States as unlawful.
2. Legislative Competence:
The petitioners argued that u/s 246(1) and (3) of the Constitution, "Lotteries organised by the Government of India or the Government of a State" falls under the exclusive legislative competence of Parliament. Entry 40 of List I of the VIIth Schedule to the Constitution covers this subject, while Entry 34 of List II pertains to "Betting and gambling," which includes lotteries. The Maharashtra legislature acknowledged this in Sec. 32 of the Bombay Lotteries (Control and Tax) and Prize Competitions (Tax) Act, 1958, which exempts lotteries organised by the Central or State Government from its provisions.
3. Executive Power:
The Government of Maharashtra claimed the ban was justified by the entrustment of executive power by the President u/s 258(1) of the Constitution. However, the Court found that the entrustment was limited to lotteries organised by the Government of Maharashtra itself and did not extend to banning lotteries from other States. The Court noted that Article 298 of the Constitution allows States to carry on any trade or business, including lotteries, subject to Parliamentary legislation. The executive power of the Union, as per Article 73, is subject to the provisions of the Constitution, including Article 298.
The Court concluded that the Government of Maharashtra could not enforce a ban on the sale of lottery tickets from other States based on the entrustment of power u/s 258(1). The Court also dismissed the argument that the condition imposed by the President's permission could be enforced by another State, noting that only Parliament could legislate on this matter.
Conclusion:
The Court allowed the writ petitions and directed the State of Maharashtra to forbear from enforcing the ban on the sale or distribution of lottery tickets organised by other States. The appeal was allowed with no order as to costs.
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1984 (1) TMI 335
Issues:
1. Challenge to rejection of gold dealer's license application by Additional Collector of Central Excise.
2. Interpretation of whether an Additional Collector of Customs/Central Excise is an officer lower in rank than a Collector for the Gold (Control) Act.
3. Discrepancy in views between different regional benches regarding the appeal process against orders of Additional Collectors under the Gold (Control) Act.
4. Examination of the legal status of an Additional Collector of Central Excise under the Gold (Control) Act based on previous judgments.
5. Analysis of the notification under Section 78(b) of the Gold (Control) Act and its impact on the jurisdiction and rank of Additional Collectors.
Analysis:
The judgment concerns the appeal against the rejection of a gold dealer's license application by the Additional Collector of Central Excise, Madurai. The primary issue revolves around determining whether an Additional Collector of Customs/Central Excise is considered an officer lower in rank than a Collector for the purposes of the Gold (Control) Act. The tribunal delves into the interpretation of relevant notifications and legal provisions to resolve this question, taking into account previous decisions by regional benches on the appeal process against Additional Collectors' orders.
The tribunal notes the divergent views of different regional benches on the appeal process against Additional Collectors' orders under the Gold (Control) Act. Reference is made to specific notifications and legal provisions to analyze the jurisdiction and rank of Additional Collectors in the context of the Act. The judgment also considers the implications of a notification under Section 78(b) of the Gold (Control) Act on the status of Additional Collectors and their authority in adjudication and penalty imposition matters.
Furthermore, the tribunal examines the legal standing of an Additional Collector of Central Excise under the Gold (Control) Act based on previous judgments and interpretations of relevant statutes. The analysis includes a comparison with the Customs Act to determine the consistency in the designation and powers of Additional Collectors across different legislations. The tribunal emphasizes the need for uniformity in interpreting the role and rank of Additional Collectors within the framework of the Gold (Control) Act to ensure clarity and consistency in legal proceedings.
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1984 (1) TMI 334
Issues Involved:
1. Levy of penalty on the Appellant.
2. Confiscation of gold ornaments weighing 870.500 grams.
3. Compliance with procedural requirements under Section 79 of the Gold Control Act.
Issue-wise Detailed Analysis:
1. Levy of Penalty on the Appellant:
The Appellant was penalized under Section 74 of the Gold Control Act for contravening Sections 31, 36, and 55 of the Act. However, it was established that the Appellant was not in station on 7-10-1980, the date of the seizure. The Tribunal noted that the Appellant was not involved in the daily operations of the business during his absence, and there was no evidence of his direct involvement in the alleged contraventions. Consequently, the penalty of Rs. 2500/- imposed on the Appellant was set aside, and any amount already paid was ordered to be refunded.
2. Confiscation of Gold Ornaments Weighing 870.500 Grams:
The gold ornaments were seized from the licensed premises of the partnership firm. The Appellant claimed that these ornaments belonged to his wife, sister, and other relatives, and were given to him in a personal capacity. The Tribunal noted that the Collector of Customs and the Gold Control Administrator had not adequately investigated the ownership claims of the four ladies. The Tribunal emphasized that without proof of the Appellant acting in his capacity as a licensed dealer, the contravention of Section 55(3) could not be established. Additionally, no sufficient evidence was brought to prove that the gold was acquired from an unexplained source, thereby contravening Section 31. Therefore, the Tribunal concluded that the confiscation order could not be sustained as no contravention of the Act was established.
3. Compliance with Procedural Requirements under Section 79:
The Tribunal highlighted the procedural lapse in not issuing show cause notices to the four ladies claiming ownership of the gold ornaments. Section 79 mandates that before confiscation, the owner must be given a reasonable opportunity to make a representation and be heard. The Tribunal found that the lack of such notice vitiated the confiscation order. The Tribunal stated, "The Act, indeed, provides for an opportunity to the owner of gold after the issue of show cause notice (Section 79 of the Act), informing him of the grounds on which it is proposed to confiscate the gold and giving him a reasonable opportunity of making a representation and of being heard."
Separate Judgments Delivered by Judges:
- Judgment by Shri M. Gouri Shankar, Member (J): He concluded that the Appellant did not contravene any provisions of the Act and emphasized the procedural lapse in not issuing notices to the four ladies. He set aside both the penalty and confiscation orders.
- Judgment by K.S. Dilipsinhji, Member (T): He upheld the confiscation of the gold ornaments, stating that the defense put forward by the Appellant was not tenable and that the gold belonged to the shop. However, he agreed that the penalty on the Appellant should be set aside due to his absence from Bombay at the time of the seizure.
- Judgment by K. Gopal Hegde, Member (J): He concurred with the confiscation of the gold ornaments but set aside the penalty imposed on the Appellant. He emphasized that the procedural requirements under Section 79 were not mandatory at the initial stage of the proceedings.
Final Order:
Following the majority decision, the appeal was allowed in part. The penalty imposed on the Appellant was set aside, but the order of confiscation and the fine in lieu of confiscation were confirmed.
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1984 (1) TMI 333
Issues Involved:
1. Non-compliance with the pre-deposit condition under Section 129-E of the Customs Act.
2. Legal consequences of failing to comply with the Tribunal's order regarding pre-deposit.
3. Interpretation of Section 129-E in relation to the dismissal of appeals.
Detailed Analysis:
1. Non-compliance with the pre-deposit condition under Section 129-E of the Customs Act:
The appellant was penalized Rs. 10 lakhs by the Collector of Customs, Ahmedabad, and sought a stay on the pre-deposit of this penalty while filing an appeal. The Tribunal, in its order dated 20-10-1983, directed the appellant to deposit Rs. 1 lakh and execute a personal bond for the remaining Rs. 9 lakhs within 30 days. The appellant failed to comply with this order, citing dire financial conditions and the impossibility of fulfilling the terms. Consequently, a show cause notice was issued to the appellant to explain why the appeal should not be rejected for non-compliance with Section 129-E of the Customs Act.
2. Legal consequences of failing to comply with the Tribunal's order regarding pre-deposit:
The appellant argued that non-compliance with the pre-deposit condition should not result in the dismissal of the appeal but should only affect the stay of recovery. The appellant's counsel, Shri Canteenwala, contended that neither Section 129-E of the Customs Act nor Rule 17(a) of the 1982 Appeal Rules provides for the dismissal of an appeal due to non-compliance with a stay order. He emphasized that the right to appeal, conferred by the Act, cannot be nullified by the non-deposit of the penalty amount.
3. Interpretation of Section 129-E in relation to the dismissal of appeals:
Section 129-E mandates the deposit of the duty or penalty as a precondition for hearing an appeal, with a proviso allowing the Tribunal to dispense with this deposit if it causes undue hardship. The Tribunal had partially waived the deposit requirement by directing the appellant to deposit only Rs. 1 lakh and furnish a bond for the balance. The appellant's failure to comply led to the issuance of a show cause notice.
The Tribunal examined whether Section 129-E empowers it to dismiss an appeal for non-compliance with the deposit requirement. The appellant's counsel cited a Bombay High Court decision, arguing that non-compliance should not bar the appeal from being heard on merits. However, the Tribunal found this case inapplicable, noting that the provisions of the Civil Procedure Code differ from those of the Customs Act.
The Tribunal referred to the Supreme Court's decision in Navinchandra v. Central Board of Excise and Customs, where it was held that non-compliance with the deposit requirement under Section 129(1) of the Customs Act (similar to Section 129-E) justifies the dismissal of an appeal. The Supreme Court clarified that while Section 129 provides a right of appeal, it also imposes an obligation to deposit the penalty, and failure to comply with this requirement allows the appellate authority to reject the appeal.
Conclusion:
The Tribunal concluded that the appellant's failure to comply with the order dated 20-10-1983, despite sufficient time being granted, warranted the dismissal of the appeal. Consequently, the Misc. Application was rejected, and the appeal was dismissed for non-compliance with the Tribunal's order and Section 129-E of the Customs Act.
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1984 (1) TMI 332
Issues:
- Second appeal under Section 54 of the Foreign Exchange Regulation Act, W3
- Alleged contravention of provisions of Section 8(1) and Section 4(1) of the Foreign Exchange Regulation Act, 1947
- Applicability of Section 9(2)(b) of the Act
- Interpretation of Exception under Section 9(2)(b) of the Act
- Consideration of mens rea under Section 59 of the Act
Analysis:
1. The judgment pertains to a second appeal under Section 54 of the Foreign Exchange Regulation Act, W3, against the order of the Foreign Exchange Regulation Appellate Board. The appellant was charged with contravening provisions of Section 8(1) and Section 4(1) of the Foreign Exchange Regulation Act, 1947, for transferring foreign exchange without permission. The Adjudicating Officer imposed a penalty of &8377; 1,500, later reduced to &8377; 500 by the Board, which led to the appellant filing a second appeal in the High Court.
2. The appellant contended that his case fell within the Exception under Section 9(2)(b) of the Act, allowing the making of payments with foreign exchange received as salary or for services not arising from any business in India. Despite the appellant's explanation and reliance on this Exception, the authorities did not address this argument. The appellant, a retired Station Master receiving pension in foreign exchange, argued that his case was covered by this Exception. Additionally, the appellant invoked Section 59 of the Act, which provides for the defence of lack of mens rea. The Board acknowledged the bona fide conduct of the appellant but still found him in contravention due to lack of permission from the Reserve Bank of India.
3. The High Court, upon review, found that the appellant's case indeed fell within the Exception under Section 9(2)(b) of the Act, allowing the transfer of foreign exchange without permission in certain circumstances. The Court noted the appellant's bona fide conduct and the absence of mens rea, as required under Section 59 of the Act. Consequently, the Court set aside the Board's order, absolving the appellant of all charges and penalties.
4. In conclusion, the High Court allowed the appeal, overturning the Board's decision. The Court held that the appellant was not guilty of any charges and, therefore, was not liable for any penalties. The judgment emphasized the importance of considering statutory exceptions and the presence or absence of mens rea in cases involving alleged contraventions of foreign exchange regulations.
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1984 (1) TMI 331
Issues Involved:
1. Whether the surface coating composition is a nitrocellulose lacquer within the meaning of Tariff Item 14-III(i).
2. Whether the composition in question is "clear and pigmented" within the meaning of Tariff Item 14-III(i).
3. Whether the surface coating composition qualifies as "goods".
4. Whether the duty levied was barred by time under Rule 10(1) of the Central Excise Rules, 1944.
Detailed Analysis:
1. Whether the surface coating composition is a nitrocellulose lacquer within the meaning of Tariff Item 14-III(i):
The court examined the definitions of "lacquer" from various dictionaries and concluded that nitrocellulose lacquer is a surface coating composition that dries rapidly by evaporation of volatile constituents, forming a film on the substance it coats, and contains a substantial quantity of nitrocellulose. The composition in question met these criteria as it was used for coating cellulose film to make it moisture and heat proof, dried quickly, formed a film by evaporation, and contained 50 Kgs of nitrocellulose out of 103 Kgs of non-volatile material. Therefore, the composition was deemed nitrocellulose lacquer within the meaning of Item 14-III(i).
2. Whether the composition in question is "clear and pigmented" within the meaning of Tariff Item 14-III(i):
The court interpreted the term "clear and pigmented" to mean that the articles should be clear or pigmented, as goods cannot be both simultaneously. The composition in question was not pigmented but was clear, as it gave a clear transparent tack-free film on drying. The court noted that murky appearance due to small amounts of resins did not affect its classification as clear. Thus, the composition was covered by the term "clear and pigmented".
3. Whether the surface coating composition qualifies as "goods":
The court referred to the Supreme Court's definition of "goods" as something that can ordinarily come to the market to be bought and sold. Although the composition required continuous agitation to prevent settling, it could still be used after storage by reheating and stirring. Therefore, the composition was considered "goods" despite not being marketed, as excise duty is on the manufacture of goods, not their sale.
4. Whether the duty levied was barred by time under Rule 10(1) of the Central Excise Rules, 1944:
The court examined the relevant rules and concluded that Rule 9(2) applied, which did not provide a time limit for demand or payment of excise duty at the relevant time. Rule 10(1) covered cases where duty had been short-levied, not cases where duty had not been levied at all. As the duty in question had not been levied, Rule 10(1) did not apply, and the demand was not barred by time.
Conclusion:
The court dismissed the petition, finding no merit in the arguments presented by the petitioner. The surface coating composition was classified as nitrocellulose lacquer, clear under Tariff Item 14-III(i), and considered "goods". The duty levied was not barred by time as per the applicable rules. The parties were left to bear their own costs.
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