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1967 (11) TMI 118
Issues Involved:
1. Admissibility of statements recorded by Customs officers under Section 108 of the Customs Act, 1962.
2. Applicability of Section 25 of the Indian Evidence Act to statements recorded by Customs officers.
3. Whether Customs officers can be considered as "police officers" under Section 25 of the Indian Evidence Act.
4. Impact of Article 20(3) of the Constitution of India on statements recorded by Customs officers.
5. Applicability of Section 162 of the Criminal Procedure Code to statements recorded by Customs officers.
Issue-wise Detailed Analysis:
1. Admissibility of Statements Recorded by Customs Officers Under Section 108 of the Customs Act, 1962:
The primary issue in these revision applications was whether statements recorded by Customs officers under Section 108 of the Customs Act, 1962, are admissible in evidence. The accused in all three cases contended that their statements were inadmissible as they were hit by Section 25 of the Indian Evidence Act.
2. Applicability of Section 25 of the Indian Evidence Act to Statements Recorded by Customs Officers:
The Court examined whether Section 25 of the Indian Evidence Act, which excludes confessions made to police officers from being admissible in evidence, applies to statements made to Customs officers. The Court noted that historically, confessional statements made before Customs officers have not been considered inadmissible under Section 25. The Supreme Court's ruling in State of Punjab v. Barkat Ram was referenced, which held that Customs officers are not police officers and thus, Section 25 does not apply to statements recorded by them.
3. Whether Customs Officers Can Be Considered as "Police Officers" Under Section 25 of the Indian Evidence Act:
The Court evaluated the argument that the Customs Act of 1962 conferred broader powers on Customs officers, making them akin to police officers. However, it reaffirmed the Supreme Court's stance in Barkat Ram's case and Badaku Joti v. State of Mysore, which distinguished the primary functions of Customs officers from those of police officers. The Court concluded that the primary purpose of Customs officers is to safeguard revenue and prevent smuggling, not to maintain law and order, and thus they do not fall under the definition of "police officers" for the purposes of Section 25.
4. Impact of Article 20(3) of the Constitution of India on Statements Recorded by Customs Officers:
The argument that statements recorded under compulsion by Customs officers are hit by Article 20(3) of the Constitution, which protects against self-incrimination, was also considered. The Court cited precedents, including State v. Devsi Dosa, and Narayanlal Bansilal v. M. P. Mistry, which held that Article 20(3) applies only when a formal accusation exists at the time of recording the statement. Since the statements in question were recorded before any formal accusation, Article 20(3) was deemed inapplicable.
5. Applicability of Section 162 of the Criminal Procedure Code to Statements Recorded by Customs Officers:
The contention that Section 162 of the Criminal Procedure Code (Cr. P. C.), which bars the use of statements made to police officers during an investigation, applies to statements made to Customs officers was rejected. The Court clarified that Customs officers are not police officers, and the Customs Act, 1962, provides its own procedure for investigation, making Section 162 Cr. P. C. inapplicable. Additionally, the offences under the Customs Act are non-cognizable, further negating the applicability of Section 162 Cr. P. C.
Conclusion:
The Court ultimately held that statements recorded by Customs officers under Section 108 of the Customs Act, 1962, are admissible in evidence and are not hit by Section 25 of the Indian Evidence Act, Article 20(3) of the Constitution, or Section 162 of the Criminal Procedure Code. The rule was discharged in all the applications, and the interim stay was vacated.
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1967 (11) TMI 117
The lower appellate court found that the signature on Exhibit P-1 did not exist when handed over to the plaintiff by the defendant. As a result, the plaintiff could not rely on the presumption under Section 118 of the Negotiable Instruments Act. The lower appellate court held that the execution of the promissory note was not proved, and this finding cannot be challenged in a second appeal. The court also noted a missing segment in the signature on Exhibit P-1, indicating tampering. The appeal was dismissed with costs.
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1967 (11) TMI 116
Issues Involved:
1. Legality of the application under Section 19(2) of the Foreign Exchange Regulation Act, 1947.
2. Authority of the Assistant Director to pass the order under Section 19(2).
3. Legality of the seizure of currency notes by the police.
4. Entitlement of the Enforcement Directorate to the custody of the seized currency notes.
5. Applicability of Section 523 of the Criminal Procedure Code.
Detailed Analysis:
1. Legality of the Application under Section 19(2) of the Foreign Exchange Regulation Act, 1947:
The application made by the respondent for handing over the currency notes was purportedly under Section 19(2) of the Act. The court found that Section 19(2) has no application to this case, and at any rate, currency notes do not come within its ambit. Section 19(2) allows the Central Government or the Reserve Bank to obtain and examine any information, book, or other document in the possession of any person. However, the Sub-Inspector of Police was not in possession of the currency notes or documents when the order was passed, as they had already been produced in court. Therefore, the application under Section 19(2) was invalid.
2. Authority of the Assistant Director to Pass the Order under Section 19(2):
The court noted that only the Reserve Bank of India or the Central Government is entitled to pass any order under Section 19(2) of the Act. In this case, the order was passed by an Assistant Director of the Enforcement Directorate, which is not authorized under the Act. The order did not state it was passed by virtue of any delegation of power, nor did it purport to be one passed on behalf of the Reserve Bank or the Central Government. Consequently, the order was invalid on its face.
3. Legality of the Seizure of Currency Notes by the Police:
The petitioner argued that the police had no power to seize the currency notes for any offence under the Act, making the seizure illegal. The court, however, found that the seizure was lawful. Offences under the Act are to be investigated by the officers of Enforcement, but the police are empowered to assist in the enforcement of the Act under Section 25A. Section 550 of the Criminal Procedure Code also allows a police officer to seize any property suspected to be involved in the commission of any offence. Therefore, the seizure of the currency notes by the Sub-Inspector was lawful.
4. Entitlement of the Enforcement Directorate to the Custody of the Seized Currency Notes:
The court considered whether the respondent (Enforcement Directorate) was entitled to the custody of the currency notes. Although the respondent's application was clumsily drawn and did not specify the legal provision under which it was made, the court found that under Section 523 of the Criminal Procedure Code, the Magistrate has the authority to make orders respecting the disposal of property seized by the police. The court held that the Enforcement Directorate was entitled to the currency notes for investigation purposes, as the notes were not required for any purpose in the court.
5. Applicability of Section 523 of the Criminal Procedure Code:
The court rejected the petitioner's contention that Section 523 of the Criminal Procedure Code does not apply to this case. The section applies to property seized by a police officer under circumstances creating suspicion of the commission of any offence. The court cited previous judgments to support this interpretation and concluded that the Magistrate's order to hand over the currency notes to the respondent was valid under Section 523.
Conclusion:
The court dismissed the revision petition, upholding the Magistrate's order to hand over the currency notes to the Enforcement Directorate. The court found that the application under Section 19(2) of the Act was invalid, the Assistant Director lacked authority to pass the order, the seizure by the police was lawful, and the Enforcement Directorate was entitled to the custody of the currency notes under Section 523 of the Criminal Procedure Code.
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1967 (11) TMI 115
Issues Involved:
1. Joint opening of the current and overdraft account.
2. Contract of interest at the rate of one percent per month.
3. Admission of debt by Defendant No. 3.
4. Alleged forgery regarding the confirmation of the balance.
5. Suit barred by limitation.
6. Suit maintainability against Defendant No. 1 as a Military servant.
7. Relief entitlement for the plaintiff.
Detailed Analysis:
1. Joint Opening of the Current and Overdraft Account:
The primary issue was whether the 1st defendant and his brother jointly opened a current and overdraft account with the plaintiff-Bank. The plaintiff produced account books and the Bank Manager as evidence. The court found the evidence of P.W.1 unimpeachable and concluded that the account was jointly opened by the two brothers. The joint execution of Exhibits P-2, P-4, and P-5 by both brothers further supported this conclusion, leading the court to hold both brothers jointly and severally liable for the account.
2. Contract of Interest at One Percent Per Month:
The court found that the parties agreed to pay interest at the rate of one percent per month. This finding was based on the evidence presented and was not contested further by the defendants.
3. Admission of Debt by Defendant No. 3:
The court found that Defendant No. 3 did not personally admit the debt in writing dated January 4, 1949 (Exhibit No. 1). Therefore, Issue 3 was decided against the plaintiff.
4. Alleged Forgery Regarding the Confirmation of the Balance:
The court examined Exhibit P-2 and concluded that it was not forged. The 1st defendant failed to prove that the words confirming the balance were added after his signature. Thus, Issue 4 was found against the defendants.
5. Suit Barred by Limitation:
The court held that the suit was not barred by limitation due to Exhibit P-2, an acknowledgment executed by the 1st defendant and his brother on 9-9-1947. The suit was filed on 9-9-1950, within the limitation period. Additionally, the court applied Article 85 of the Indian Limitation Act, considering the account as mutual, open, and current, which extended the limitation period.
6. Suit Maintainability Against Defendant No. 1 as a Military Servant:
This issue was not elaborated upon in the judgment, indicating that it was either not contested or not considered significant by the court.
7. Relief Entitlement for the Plaintiff:
The court decreed the plaintiff's suit for Rs. 54,956-15-8 O.S., including costs and interest at 6 percent per annum from 9-9-1947 until final payment. The suit was decreed against the property of Iftikhar Ali Khan in the hands of defendants 2 to 4. The plaintiff did not appeal the dismissal of a part of his claim, and the 1st defendant's appeal was dismissed.
Conclusion:
The court upheld the lower court's decision, finding the 1st defendant and his brother jointly liable for the overdraft account. The suit was within the limitation period, and the promissory notes executed as collateral securities were valid and supported by consideration. The appeal was dismissed with costs.
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1967 (11) TMI 114
Issues Involved:
1. Entitlement to recover possession under Section 326, Qanoon Mal, read with Section 163, Qanoon Ryotwari.
2. Obligatory legal process for dispossession of a tenant.
3. Interpretation of statutory provisions under Qanoon Ryotwari and Qanoon Mal.
4. Relevance of title in suits under Section 326, Qanoon Mal, and Section 9 of the Specific Relief Act.
5. Legal principles regarding forcible possession by landlords.
Issue-wise Detailed Analysis:
1. Entitlement to Recover Possession under Section 326, Qanoon Mal, read with Section 163, Qanoon Ryotwari:
The appellant contended that under Section 326, Qanoon Mal, read with Section 163, Qanoon Ryotwari, a plaintiff is entitled to recover possession if dispossessed from prior juridical possession within six months of the suit, and the question of title is irrelevant in such a suit. The Supreme Court agreed, stating that Section 326 is similar to Section 9 of the Specific Relief Act, 1877, where the question of title does not arise, and the focus is on unlawful disturbance of possession.
2. Obligatory Legal Process for Dispossession of a Tenant:
The Board of Revenue held that even if a tenant's right is extinguished under Section 82 of Qanoon Ryotwari due to arrears, the tenant must be legally dispossessed. The High Court, however, concluded that it was not obligatory for the defendant to file a suit under Section 137 of Qanoon Ryotwari. The Supreme Court disagreed with the High Court, emphasizing that possession should be obtained through legal means, not by force, supporting the Board's view that dispossession should follow the procedure outlined in Section 137 of Qanoon Ryotwari.
3. Interpretation of Statutory Provisions under Qanoon Ryotwari and Qanoon Mal:
The Supreme Court interpreted the statutory provisions, noting that Section 82 (3) of Qanoon Ryotwari does not automatically extinguish a tenant's right due to arrears, as the Collector can accept arrears under special circumstances. The Court found that Section 326 of Qanoon Mal, which deals with unlawful disturbance of possession, provides a shorter limitation period and summary procedure, indicating its focus on unlawful dispossession rather than title.
4. Relevance of Title in Suits under Section 326, Qanoon Mal, and Section 9 of the Specific Relief Act:
The Supreme Court emphasized that title is irrelevant in suits under Section 326 of Qanoon Mal, similar to Section 9 of the Specific Relief Act. The Court cited previous judgments, including Midnapur Zamindary Company Limited v. Naresh Narayan Roy and K.K. Verma v. Naraindas C. Malkani, which established that possession, even without title, is protected by law, and forcible dispossession is not permitted.
5. Legal Principles Regarding Forcible Possession by Landlords:
The Supreme Court reiterated that in India, landlords cannot take possession forcibly and must seek legal recourse. The Court referenced several cases, including Yar Mohammad v. Lakshmi Das and the Privy Council's observations, affirming that possession must be obtained through the Court, and forcible entry by landlords constitutes trespass.
Conclusion:
The Supreme Court held that the High Court erred in quashing the order of the Board of Revenue. The appeal was allowed with costs, the judgment of the High Court was set aside, and the order of the Board of Revenue was restored. The Court affirmed that legal possession must be obtained through proper legal channels, and forcible dispossession is not permissible.
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1967 (11) TMI 113
Issues:
- Competency of the licence inspector to file a complaint under specific sections of the Bombay Provincial Municipal Corporation Act, 1949.
Analysis:
The appeal before the Supreme Court of India challenged the judgment of the High Court of Gujarat in a criminal revision application. The central issue in this case was whether the licence inspector, Mangulal Chunilal, was competent to file a complaint under sections 376(1)(d)(i) and 392(1)(a) of the Bombay Provincial Municipal Corporation Act, 1949. The complaint was filed against an individual for carrying out certain activities without obtaining the required license. The High Court allowed the application and set aside the conviction and sentence of the accused, Manilal Maganlal. The core contention revolved around the interpretation of the term "take proceedings" in the Act.
The appellant contended that the power to take proceedings includes the authority to authorize others to institute proceedings under the Act. It was argued that there were no restrictions in the delegation order that mandated the Deputy Health Officer to file the complaint personally. The appellant relied on previous judgments to support their argument, emphasizing the binding nature of relevant precedents on the issue at hand. The respondents did not appear before the Supreme Court, leading to a decision based on the arguments presented by the appellant.
The Supreme Court analyzed the relevant provisions of the Act, particularly sections 69 and 481, to determine the scope of delegation of powers to municipal officers. The Court deliberated on the meaning of the term "take proceedings" in the context of the Act. It was observed that while certain actions under section 481(1) required the delegate to personally perform them, the term "take" in sub-clauses (a) and (e) was interpreted to allow delegation of the initiation of proceedings. The Court rejected the argument that "take proceedings" should be construed as "order proceedings to be taken," emphasizing the need to adhere to the plain meaning of the term.
Drawing on past judgments and legal principles, the Supreme Court affirmed that only designated authorities mentioned in the Act could initiate proceedings against individuals charged with offenses under the Act or related regulations. The Court highlighted the necessity for the complainant to demonstrate the legal authority to file a complaint, which cannot be conferred based on a historically accepted but incorrect interpretation. Ultimately, the Supreme Court dismissed the appeal and upheld the decision of the High Court, emphasizing the importance of statutory interpretation and adherence to legal provisions in filing complaints under municipal laws.
In conclusion, the Supreme Court's judgment clarified the interpretation of the term "take proceedings" in the Bombay Provincial Municipal Corporation Act, emphasizing the need for designated authorities to initiate legal actions against offenders. The decision underscored the significance of legal authority in filing complaints under municipal laws and upheld the ruling of the High Court in setting aside the conviction and sentence of the accused based on the competency of the licence inspector to file the complaint.
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1967 (11) TMI 112
Where there is a bargain for a certain quantity extra greater quantity, and there is h power of selection in the vendor to deliver which he thinks fit, then the right to them does not pass to the vendee until the vendor has made his selection, and trover is not maintain able before that is done
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1967 (11) TMI 111
Issues Involved:
1. Authority to appoint and transfer judicial officers.
2. Validity of the High Court's orders regarding the transfer of judicial officers.
3. Jurisdiction of the High Court over administrative posts within the judiciary.
4. Implementation of the High Court's transfer orders by the government.
Detailed Analysis:
1. Authority to Appoint and Transfer Judicial Officers:
The central issue revolves around the authority to appoint and transfer judicial officers within the Orissa Superior Judicial Service. The cadre includes both judicial and administrative posts. According to Article 229 of the Constitution, the Chief Justice has the exclusive power to appoint the Registrar of the High Court. The Governor holds the power to appoint secretaries to the government. Historically, the Governor exercised the power to transfer district judges in consultation with the High Court, a practice upheld until the Supreme Court's decision in the State of Assam v. Ranga Mahammad ([1967] 1 S.C.R. 454), which vested the power of transfer in the High Court under Article 235.
2. Validity of the High Court's Orders Regarding the Transfer of Judicial Officers:
The High Court's policy decision in February 1965 aimed to recall judicial officers from administrative posts after three years to prevent them from losing touch with judicial work. Despite repeated requests, the government did not comply. Following the Supreme Court's decision in Ranga Mahammad's case, the High Court unilaterally ordered the transfer of several officers on October 10, 1966, which included:
- Shri K.B. Panda as law secretary.
- Shri B.K. Patro as district and sessions judge of Ganjam-Boudh.
- Shri T. Misra as superintendent and legal remembrancer.
- Shri K.K. Bose as district and sessions judge of Mayurbhanj-Keonjhar.
- Shri P.K. Mohanti as deputy law secretary.
- Shri P.C. Dey as district and sessions judge of Bolangir-Kalahandi.
The High Court's orders were notified in the Orissa Gazette, but the government refused to implement them, leading to the filing of petitions for a writ of mandamus and quo warranto.
3. Jurisdiction of the High Court Over Administrative Posts Within the Judiciary:
The High Court argued that it had the authority to fill administrative posts included in the judicial service cadre, citing the decisions in Bagchi's and Ranga Mahammad's cases. However, the Supreme Court clarified that the High Court's control under Article 235 pertains to judicial posts and not administrative posts within the secretariat. The High Court's interpretation was deemed incorrect, as the posts of law secretary, deputy law secretary, and superintendent and legal remembrancer are not district courts or courts subordinate to district courts under Article 235.
4. Implementation of the High Court's Transfer Orders by the Government:
The Supreme Court held that the High Court was within its powers to recall and post judicial officers to district courts, as there was no fixed period for their administrative postings. However, the High Court exceeded its authority by transferring officers to administrative posts within the secretariat. Despite this, the government implemented the High Court's orders after the High Court's decision on March 6, 1967. The Supreme Court upheld the High Court's orders regarding the recall of officers to judicial posts but invalidated the transfers to administrative posts, noting that these should be managed by mutual understanding between the High Court and the government.
Conclusion:
The Supreme Court allowed the appeals in part, setting aside the High Court's ruling that the officers had no authority to hold their posts after October 10, 1966. It upheld the High Court's power to recall officers to judicial posts but invalidated its orders transferring officers to administrative posts within the secretariat. The judgment emphasizes the need for cooperation between the High Court and the government to avoid conflicts and ensure public interest. The parties were directed to bear their own costs.
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1967 (11) TMI 110
Issues:
- Appeal against order of acquittal
- Conviction under Section 409 IPC
- Entrustment and misappropriation of cement
- Fiduciary relationship and breach of trust
Analysis:
The Supreme Court of India heard an appeal filed by the State of Gujarat against the acquittal order by the High Court in a case involving the conviction of the respondent under Section 409 IPC. The case revolved around the alleged misappropriation of forty bags of cement entrusted to the respondent for a construction project. The appellant contended that the respondent breached trust by sending the cement to a godown instead of using it for the designated purpose. The prosecution's case focused on establishing entrustment and misappropriation. However, the High Court acquitted the respondent without detailed reasoning.
The Court highlighted that the absence of a complaint by the contracting party against the respondent raised doubts regarding the entrustment and misappropriation allegations. The Court noted the lack of evidence regarding the terms of the contract between the government and the contractor, emphasizing that the transaction appeared to be a sale rather than an entrustment creating a fiduciary relationship. The Court referenced legal precedents to define "entrustment" under Section 405 IPC, emphasizing the need for a trust relationship and ownership continuity for an act to constitute breach of trust.
Drawing parallels with a similar case, the Court emphasized the importance of intent and control over the property in determining entrustment. The Court rejected the appellant's argument by distinguishing a sale from an entrustment, emphasizing that the government's sale of cement did not establish a fiduciary relationship. The Court dismissed the relevance of a legal precedent cited by the appellant, as the core issue of entrustment was not in dispute in that case.
Ultimately, the Court concluded that the prosecution failed to prove the alleged entrustment, rendering the misappropriation claim irrelevant. Consequently, the Court dismissed the appeal, upholding the High Court's decision to acquit the respondent. The judgment elucidated the distinction between a sale and entrustment, emphasizing the need for a fiduciary relationship to establish a breach of trust under Section 409 IPC.
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1967 (11) TMI 109
Issues Involved:
1. Whether the premises of "Crescent Recreation Club" were being used as a common gambling house.
2. Whether the respondents were gambling at the time of the police raid.
3. Whether the game of Rummy constitutes a game of skill or chance.
4. Whether the club was making a profit or gain from the gaming activities.
5. Whether the presumption under Section 7 of the Hyderabad Gambling Act was successfully rebutted.
Detailed Analysis:
1. Common Gambling House:
The main issue was whether "Crescent Recreation Club" was being used as a common gambling house under the Hyderabad Gambling Act. The definition of a "common gambling house" includes any place where instruments of gaming are kept or used for the profit or gain of the person owning, occupying, or using the premises. The court found that there was no sufficient evidence to prove that the club was making a profit or gain from the gaming activities. The charges for playing cards, sitting fees, and late fees were considered usual for club management and did not constitute profit-making.
2. Gambling at the Time of Raid:
During the police raid, respondents were found playing Rummy for stakes, with money and counters on the table. The Circle Inspector, based on credible information, raided the premises and found evidence of gambling. However, the High Court accepted the reference from the Sessions Judge, who recommended quashing the conviction, as there was no conclusive proof that the club was a common gambling house.
3. Game of Skill or Chance:
The Sessions Judge referred to Section 14 of the Act, which exempts games of mere skill from the Act's provisions. The court noted that Rummy involves a significant amount of skill, such as memorizing the fall of cards and strategic holding and discarding. Therefore, Rummy cannot be classified as a game of pure chance but is preponderantly a game of skill.
4. Profit or Gain from Gaming Activities:
The court examined whether the club was making a profit from the gaming activities. The evidence presented, including account books, did not show any extravagant charges that would indicate profit-making. The charges for playing cards, sitting fees, and late fees were deemed reasonable and necessary for the club's management and maintenance. The court concluded that these charges did not transform the club into a common gambling house.
5. Presumption under Section 7:
Section 7 of the Hyderabad Gambling Act allows for a presumption that a place is a common gambling house if instruments of gambling are found during a search. However, the court found that this presumption was successfully rebutted by the evidence, which showed that the charges were usual for club management and not indicative of profit-making from gambling activities.
Conclusion:
The court concluded that the "Crescent Recreation Club" was not a common gambling house as defined under the Hyderabad Gambling Act. The game of Rummy was determined to be a game of skill, and the charges levied by the club were usual and necessary for its management. The presumption under Section 7 was successfully rebutted, and thus, the High Court's decision to quash the conviction was upheld. The appeal was dismissed.
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1967 (11) TMI 108
Whether order passed by the Textile Commissioner and confirmed by the Central Government imposing cut in the import entitlement by the respondents should be set aside and quashed?
Held that:- Under our jurisprudence the Government is not exempt from liability to, carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise, solemnly made by it, nor claim to be the judge of its own obligation to the citizen on an ex parte appraisement of the circumstances. in which the obligation has arisen. We agree with the High Court that the impugned order passed by the Textile Commissioner and confirmed by the Central Government imposing cut in the import entitlement by the respondents should be set aside and quashed and that the Textile Commissioner and the Joint Chief Controller of Imports and Exports be directed to issue to the respondents import certificates for the total amount equal to 100% of the f.o.b. value of the goods exported by them, unless there is some decision which fails within cl. 10 of the Scheme in question.
It is common ground that the report of the Committee was not made available to them and the Textile Commissioner, before he passed the orders, did not call for their explanations. It must therefore be held that enquiry in a manner consonant with the rules of justice was not made in the case of those four exporters also. Appeal dismissed.
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1967 (11) TMI 107
Whether preparation of provisional gradation lists by the State of Madhya Pradesh under the relevant provisions of the States Reorganisation Act, 1956 was unwarranted in law and the final list published on April 6, 1962 prepared by the State Government under instructions from the Central Government with regard to the integration of officers of the Engineering Department was illegal and ultra vires and must be quashed by the grant of a writ?
Held that:- Appeal allowed in part. In view of the special circumstances of the present case we think that the respondents were entitled to an opportunity to make a representation with regard to the two points urged by Mr. Asoke Sen before the final gradation list was published. As no such opportunity was furnished to the respondents with regard to these two matters we hold that the combined final’ gradation list dated April 6, 1962, so far as category 6 is concerned, is ultra vires and illegal and that part of the notification alone must be quashed by grant of a writ in the nature of certiorari. The rest of the notification of the State Government dated April 6, 1962 with regard to other categories will stand unaffected. So far as category No. 6 is concerned, the Central Government is directed to give an opportunity to the respondents to make a representation in regard to the two points mentioned in this paragraph and thereafter take steps to finalise and publish the list in accordance with law.
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1967 (11) TMI 106
Issues:
- Whether certain documents seized by the Department of Commercial Taxes can be produced in court as evidence despite objections based on confidentiality and privilege.
Analysis:
The petition was filed against the order of the Fifth Presidency Magistrate, Madras, directing the Deputy Commissioner of Commercial Taxes to produce specific documents in a case under section 420 of the Indian Penal Code. The objection raised by the Deputy Commercial Tax Officer was that the documents were privileged under section 57 of the Madras General Sales Tax Act and section 124 of the Indian Evidence Act. The respondent only pressed for the production of documents related to the seizure of accounts from Messrs Chettiar Films. The Magistrate overruled the objection and allowed the documents to be exhibited, leading to the petition challenging this decision.
The petitioners argued that the documents were confidential due to their connection with sales tax recovery proceedings, citing section 57 of the Madras General Sales Tax Act. However, the court clarified that the exemption under section 57(2) applies only to prosecutions under the Indian Penal Code or the Sales Tax Act related to the documents produced in the proceedings. As the current prosecution was under section 420 of the Indian Penal Code, the exemption did not apply. The court further analyzed that the confidentiality protection under section 57(1) applies to voluntarily produced documents, not those compulsorily seized. Section 41 of the Act distinguishes between production and seizure of documents, with the confidentiality provision only covering produced documents, not seized ones.
Additionally, the petitioners claimed privilege under section 124 of the Evidence Act. However, the court ruled that privilege can only be claimed by the public servant concerned, not private parties like the petitioners. Therefore, the court dismissed the revision petition, upholding the Magistrate's decision to allow the seized documents to be exhibited as evidence in the case under section 420 of the Indian Penal Code.
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1967 (11) TMI 105
Issues:
1. Revision of turnover and applicability of tax rates.
2. Validity of order by Appellate Assistant Commissioner beyond the time limit.
3. Validity of rule 17 amendment and publication.
4. Power to reopen assessment based on change of opinion.
Analysis:
1. The judgment dealt with the revision of turnover and the applicability of tax rates to the assessee's transactions. The Tribunal concluded that the turnover constituted sales and not works contracts. The transactions involved the supply of finished articles as per agreed specifications for a consideration, indicating a sale of goods. The property in the materials passed to the customer upon delivery, supporting the sale transaction. The Tribunal's decision was upheld based on the terms of the contract and correspondence, establishing the nature of the transactions as sales of goods rather than works contracts.
2. The judgment addressed the validity of the Appellate Assistant Commissioner's order, which was made beyond the prescribed time limit. The Appellate Assistant Commissioner's order was deemed out of time as it was issued more than five years after the relevant assessment year. The amendment to the Madras General Sales Tax Act in 1963 necessitated the application of Rule 17 of the Madras General Sales Tax Rules, 1939, for reopening assessments and applying higher rates. The order was set aside due to being beyond the statutory time limit, highlighting the importance of adhering to procedural requirements in tax assessments.
3. The validity of Rule 17 amendment and publication was also a crucial aspect of the judgment. The rule's amendment in 1957 extended the period of limitation from three to five years. The challenge to the rule's validity was based on non-compliance with the publication requirement under Section 19(4) of the 1939 Act. The argument contended that the final publication of the rule violated the publication condition. However, the court rejected this argument, emphasizing that the rule-making power was not restricted by the repealed subsection (4) of Section 19. The publication of the rule after the repeal was considered valid, underscoring the legality of Rule 17's amendment and publication process.
4. The judgment also discussed the authority's power to reopen assessments based on a change of opinion regarding the nature of transactions. Rule 17 allowed for the exercise of such power if any part of the turnover had escaped assessment for any reason, encompassing a change of opinion. The court affirmed that the assessing authority could reopen assessments based on a change of opinion, highlighting the broad scope of reasons under which assessments could be revisited. Ultimately, the petitioner succeeded only in challenging the rate enhancement by the Appellate Assistant Commissioner but failed in other aspects of the case.
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1967 (11) TMI 104
Issues:
1. Whether the writ petition under Article 226 read with Article 227 of the Constitution of India deserves to be allowed for quashing the assessment orders of sales tax.
2. Whether the principle of res judicata applies in this case.
3. Whether the petitioners were required to exhaust their remedy by filing appeals under section 20 and revision under section 21 of the Punjab General Sales Tax Act.
Analysis:
The judgment involves a writ petition seeking the quashing of assessment orders of sales tax for various assessment years. The petitioners sought the issuance of a writ of certiorari and mandamus to challenge the orders of assessment dated 9th October, 1958, 11th February, 1960, 4th October, 1962, and 25th June, 1964, for different assessment years. The petitioners contended that no sales tax was payable under the East Punjab General Sales Tax Act and the Central Sales Tax Act for sales of medicinal and toilet preparations. The writ petition was based on arguments previously accepted by the court in a similar case. The State did not contest the merits of the writ petition but raised two preliminary objections. Firstly, the State argued that the principle of res judicata applied as a previous writ petition on the same subject matter had been dismissed. However, the court found that the previous decision did not dispose of the petition on merits, allowing the current petition to proceed.
Regarding the second preliminary objection, the State contended that the petitioners should have exhausted their remedy by filing appeals and revisions under the Punjab General Sales Tax Act. The court noted that appeals were competent but not filed, as departmental instructions indicated no exemption could be granted to the assessee. Referring to relevant instructions, the court found that contrary to specific departmental instructions, pursuing appeals or revisions would have been futile. Citing precedents, the court emphasized that where the stand on a matter is predetermined by departmental instructions, pursuing appeal or revision serves no purpose. The court distinguished a Supreme Court decision where the failure to deposit sales tax was not considered a valid ground to bypass statutory remedies, unlike the circumstances in the present case.
Ultimately, the court allowed the writ petition, quashing the assessment orders and directing the refund of sales tax collected for the respective years. The court held that the sales tax collected was in contravention of the law and ordered the refund to the petitioners, who were also entitled to costs. The judgment highlights the importance of departmental instructions and the futility of pursuing statutory remedies when the outcome is predetermined by such instructions.
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1967 (11) TMI 103
Issues:
1. Constitutionality of provisions of Andhra Pradesh General Sales Tax (Amendment) Act, 1963 pertaining to millers who are not wholesale or retail dealers.
2. Legislative competence of the State Legislature to introduce provisions affecting millers under the Act.
3. Whether the provisions imposed unreasonable restrictions on the petitioner's business as a miller.
Detailed Analysis:
1. The petitioner, a miller, challenged the provisions of the Andhra Pradesh General Sales Tax (Amendment) Act, 1963, claiming they were null and void and ultra vires the State Legislature's powers. The petitioner argued that the provisions imposed excessive and arbitrary restrictions violating Articles 14, 19, and 31 of the Constitution. The State contended that the amendments aimed to prevent tax evasion by millers, emphasizing the need to maintain registers and submit returns to curb evasion. The State's objective was to protect both the State's revenue and genuine dealers, including millers who do not engage in sale transactions.
2. The provisions in question defined a "miller" and required registration, maintenance of specific registers, and submission of declarations by millers receiving paddy for rice conversion. The petitioner argued that these provisions exceeded the State Legislature's competence under Entry 54 of List II-State List-of the Seventh Schedule of the Constitution, which allows legislation on taxes on the sale or purchase of goods. The State justified the provisions as necessary to prevent tax evasion, asserting that such measures were incidental to the power to impose and levy taxes on goods.
3. The Court held that the power to levy a tax includes incidental powers to prevent tax evasion, citing precedents that supported legislative measures to check evasion. The petitioner relied on Supreme Court decisions related to sales tax on works contracts and hire-purchase transactions, but the Court found them irrelevant to the issue of legislative competence in the present case. The Court determined that the provisions did not unreasonably restrict the petitioner's business, emphasizing that maintaining transaction registers was a regular business practice and not a violation of business rights. The Court concluded that the provisions were reasonable restrictions, akin to provisions for search and seizure in taxation laws, and dismissed the petition, upholding the validity of the challenged provisions.
In conclusion, the High Court of Andhra Pradesh upheld the constitutionality of the provisions affecting millers under the Andhra Pradesh General Sales Tax Act, 1963, as they were deemed necessary to prevent tax evasion and were within the legislative competence of the State Legislature. The Court found the provisions to be reasonable restrictions that did not unduly burden the petitioner's business as a miller, ultimately dismissing the petition.
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1967 (11) TMI 102
Issues Involved:
1. Whether the Madhya Pradesh Electricity Board is a "dealer" under the relevant Sales Tax Acts.
2. Taxability of turnover from the sale of coal-ash.
3. Taxability of turnover from the supply of steam.
4. Taxability of turnover from the sale of specification and tender forms.
5. Liability for purchase tax on goods bought from unregistered dealers.
Issue-Wise Detailed Analysis:
1. Dealer Status of Madhya Pradesh Electricity Board:
The primary issue was whether the Madhya Pradesh Electricity Board (the Board) qualifies as a "dealer" under section 2(c) of the C.P. and Berar Sales Tax Act, 1947, and section 2(d) of the M.P. General Sales Tax Act, 1958, in relation to its activities of generating, distributing, selling, and supplying electrical energy. The Tribunal had concluded that the Board did not engage in these activities with a profit motive but rather to promote coordinated development efficiently and economically. However, the Court disagreed, noting that the Board's operations under the Electricity (Supply) Act, 1948, are indeed carried out with a view to earn profits, as evidenced by sections 59, 67, and 80 of the Act, which emphasize the Board's obligation to avoid losses and distribute profits. Despite this, the Court ultimately held that electrical energy does not fall within the definition of "goods" under the Sales Tax Acts, and therefore, the Board cannot be considered a "dealer" in this context.
2. Taxability of Turnover from Sale of Coal-Ash:
The Court addressed whether the turnover from the sale of coal-ash, a by-product of the Board's thermal power generation, is subject to sales tax. The Tribunal had previously ruled that these sales were not taxable, as the Board did not produce coal-ash for sale. The Court, however, referenced the Supreme Court's decision in The State of Gujarat v. Raipur Manufacturing Co. Ltd., which established that regular and continuous sales of a by-product indicate an intention to carry on business in that product. Given the regularity and continuity of the Board's coal-ash sales, the Court concluded that these transactions are indeed subject to sales tax.
3. Taxability of Turnover from Supply of Steam:
The Court examined whether the supply of steam by the Board to Nepa Mills is taxable. The Tribunal had found that steam is not "goods" and that the supply was an isolated transaction conducted on a "no profit, no loss" basis. The Court, however, determined that steam qualifies as "goods" under the Sales Tax Acts, as it is a tangible, movable property. Despite this, the Court upheld the Tribunal's finding that the supply of steam was not taxable due to the lack of a profit motive, as the arrangement was based on the cost of coal consumed and included reimbursement for any losses incurred by the Board.
4. Taxability of Turnover from Sale of Specification and Tender Forms:
The Court considered whether the sale of specification and tender forms by the Board is taxable. The Tribunal had ruled that these forms are not marketable goods and that their sale did not involve a profit motive. The Court agreed, noting that the forms were provided to individuals submitting tenders for Board contracts and that the Board did not engage in the business of selling these forms. Consequently, the turnover from these sales is not subject to sales tax.
5. Liability for Purchase Tax on Goods from Unregistered Dealers:
The final issue was whether the Board is liable for purchase tax on goods bought from unregistered dealers for activities not directly related to its main business of generating, distributing, and supplying electricity. Given the Court's determination that the Board is not a "dealer" concerning its electrical energy activities, it concluded that the Board is not liable for purchase tax under section 4(6) of the C.P. and Berar Sales Tax Act, 1947, or section 7 of the M.P. General Sales Tax Act, 1958, as these provisions apply only to registered dealers purchasing taxable goods free of taxes.
Conclusion:
The Court provided the following answers to the referred questions:
1. The Board is not a "dealer" under the relevant Sales Tax Acts for its electrical energy activities.
2. The turnover from the sale of coal-ash is liable to sales tax.
3. The turnover from the supply of steam is not taxable.
4. The turnover from the sale of specification and tender forms is not taxable.
5. The Board is not liable for purchase tax on goods bought from unregistered dealers.
The Court left the parties to bear their own costs for these references.
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1967 (11) TMI 101
Issues:
Challenge to assessment orders under U.P. Sales Tax Act for various quarters and years based on purchase tax on arhar dal purchases.
Analysis:
The petitioners challenged the assessment orders made by the Sales Tax Officer, arguing that the purchase tax on arhar dal should be a single point tax and not imposed repeatedly. The Sales Tax Officer considered arhar and arhar dal as different commercial commodities due to the manufacturing process involved. The department contended that arhar and arhar dal are distinct commodities, with arhar undergoing various processes before becoming dal. The Sales Tax Officer viewed arhar as a "cereal" transformed into a "pulse" through manufacturing processes. The petitioners cited legal precedents like Tungabhadra Industries case to support their argument that despite processing, the product remains the same for taxation purposes.
The court examined previous judgments where the definition of commodities for sales tax purposes was broadened to include processed forms. Cases like Kayani and Co., Kapildeoram Baijnath Prasad, and others were referenced to illustrate the inclusive interpretation of commodities under sales tax laws. The court also referred to the definition of "cereal" and "pulse" from botanical sources to understand the classification of arhar dal. The court emphasized that the determination of whether the manufacturing processes created a new commercial commodity required further examination by the Sales Tax Officer.
Regarding the liability for purchase tax, the Sales Tax Officer's approach of exempting dal purchases if the cereals were imported without tax payment was deemed incorrect. The court clarified that the tax liability arises from the first purchase of a commodity, regardless of previous tax exemptions. The Sales Tax Officer was directed to ascertain if arhar and arhar dal were the same commercial commodities and determine whether the petitioners' purchases constituted first or second purchases. The court highlighted the need for additional evidence to establish the nature of purchases and the emergence of a new commercial commodity from the manufacturing process.
The validity of section 3-D of the U.P. Sales Tax Act was briefly mentioned, though no arguments were presented on this aspect. Despite the availability of an appeal, the court intervened due to the fundamental right of the petitioners to conduct business without illegal restrictions. The assessment orders were quashed, and the Sales Tax Officer was instructed to reevaluate the evidence and issue fresh assessment orders based on a correct legal perspective. Each party was directed to bear their own costs, and the writ petitions were allowed.
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1967 (11) TMI 100
Best judgment assessments under sub-sections (4), (5) and (6) of section 11 of Punjab General Sales Tax Act, 1948 challenged - Held that:- Appeal allowed. There is considerable force in the second point urged on behalf of the respondent, viz., that the assessment of the respondent was made by the assessing authority without giving him an adequate opportunity of being heard. The first notice of 8th March, 1961, was held by the assessing authority himself not to have been properly served, and the second notice of 23rd March, 1961, was also obviously not properly served. The service which was accepted by the assessing authority was affixation at a shop which used to be visited by the respondent. The shop was not his own and his place of residence was known. No attempt was made to serve the notice on him at his residence. In these circumstances, the proceedings taken ex parte against the respondent were not justified.
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1967 (11) TMI 99
Whether the Sales Tax Authority is not competent to issue a notice under sub- section (2) of section 8 after expiry of three years prescribed by section 10?
Held that:- Appeal allowed. The notice under section 11(2) is only a step in the proceeding for assessment and does not disturb the continuity of the proceeding. Therefore, when the Sales Tax Officer issued a notice against the respondent under section 8(2) of the Madhya Bharat Sales Tax Act, 1950, a fresh proceeding to assess turnover which has escaped assessment was not commenced, and section 10 of the Act was not attracted thereto.
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