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1985 (11) TMI 242
Issues Involved:
1. Whether a joint complaint is envisaged under the Code.
2. Whether the dispute between the parties is of a civil nature.
3. Whether the procedure followed by the Magistrate is not in accordance with law.
Issue-Wise Detailed Analysis:
POINT NO. 1: Whether a joint complaint is envisaged under the Code.
The accused's counsel argued that the Code of Criminal Procedure does not envisage a joint complaint, making the complaint and subsequent proceedings legally erroneous. The complainants' counsel countered that there is no prohibition under the Code for filing a joint complaint, and even if it is not contemplated, it would only amount to an irregularity, not an illegality, thus not vitiating the proceedings. The court noted that no provision in the Code supports the filing of joint complaints, referencing the Madras High Court's decision in Narayanaswamy v. Egappa, which highlighted the absence of provisions authorizing two or more complainants to file a single complaint. The court agreed with this view, upholding the objection that a joint complaint is not envisaged under the Code.
POINT NO. 2: Whether the dispute between the parties is of a civil nature.
The court examined the averments in the complaint and the sworn statements of the complainants. The complainants alleged that the accused misappropriated gold and silver articles worth Rs. 8 to Rs. 10 lakhs, which were originally the assets of His Holiness Anandashrama Swamiji and later transferred to the Pandurangashrama Trust. The 1st accused, after becoming the Chairman of the Trust, allegedly misappropriated these assets. The complainants filed a complaint with the police, who, after investigation, treated the matter as a civil dispute and submitted a final 'B' report. The complainants then filed a complaint under Section 200 read with Section 190 of the Code, which the Magistrate acted upon. The court found that the dispute, involving a demand for the return of trust assets and the accused's refutation of the complainants' rights, essentially constituted a civil dispute. The complainants, as beneficiaries, should seek recourse in civil courts rather than initiating criminal proceedings.
POINT NO. 3: Whether the procedure followed by the Magistrate is not in accordance with law.
Given the findings on Points 1 and 2, the court deemed it unnecessary to express an opinion on this point for the disposal of the petition.
Conclusion:
The court allowed the petition, quashed the impugned order, and dismissed the complaint, concluding that the proceedings initiated on the joint complaint were not in accordance with the Code and that the dispute was of a civil nature.
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1985 (11) TMI 241
Issues:
1. Abatement of appeal due to the death of the appellant.
2. Legal representative's right to continue the appeal in case of the appellant's death.
3. Survival of the right to sue for defamation upon the death of the plaintiff.
4. Interpretation of Order XXII of the Code of Civil Procedure, 1908, and Section 306 of the Indian Succession Act, 1925.
Detailed Analysis:
1. The judgment deals with the abatement of an appeal following the death of the appellant. The appellant passed away during the pendency of the appeal, leaving behind two grandsons and two granddaughters as his legal representatives. The key issue was whether the appeal abated automatically upon the appellant's death, which would impact the consideration of condoning the delay in filing applications for substitution and setting aside the abatement.
2. The legal provisions under Order XXII of the Code of Civil Procedure, 1908, were examined to determine the rights of legal representatives in continuing the appeal. Rule 1 of Order XXII states that the death of a plaintiff or defendant shall not cause the suit to abate if the right to sue survives. In the case of an appeal, Rule 11 clarifies that the death of an appellant shall not cause the appeal to abate if the right to sue survives. Therefore, if the right to sue for defamation does not survive the appellant's death, the appeal would abate.
3. The judgment delves into the survival of the right to sue for defamation upon the death of the plaintiff. It references the Law Reform (Miscellaneous Provisions) Act, 1934, and the Indian Succession Act, 1925, which specify that causes of action for defamation do not survive the death of the person suing. The legal analysis concludes that in a defamation action, the right to sue does not survive the plaintiff's death, leading to the abatement of the appeal.
4. The interpretation of Section 306 of the Indian Succession Act, 1925, in conjunction with the relevant rules of the Code of Civil Procedure, was crucial in determining the outcome of the appeal. Section 306 outlines that causes of action for defamation do not survive the death of the plaintiff. This statutory provision, combined with the rules governing appeals, led to the dismissal of the appeal due to abatement following the appellant's demise.
In conclusion, the judgment dismissed the appeal as having abated due to the death of the appellant, highlighting the legal principles surrounding the survival of causes of action, specifically in defamation cases, and the rights of legal representatives in continuing legal proceedings post the appellant's death.
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1985 (11) TMI 240
Issues Involved:
1. Legality of Shri Bhim Singh's arrest and detention.
2. Violation of constitutional rights u/Articles 21 and 22(2).
3. Entitlement to monetary compensation for wrongful detention.
Summary:
1. Legality of Shri Bhim Singh's Arrest and Detention:
Shri Bhim Singh, a Member of the Legislative Assembly of Jammu & Kashmir, was arrested on the night of 9th-10th September 1985 at Qazi Kund while traveling from Jammu to Srinagar. This arrest was purportedly based on an FIR u/s 153-A of the Ranbir Penal Code for delivering an inflammatory speech. However, the affidavits and circumstances suggest that the arrest was premeditated to prevent him from attending the Legislative Assembly session on 11th September 1985. The police officers involved, including the Superintendent of Police, Anantnag, and others, acted on instructions received prior to the official requisition for arrest, indicating a deliberate and mala fide intent.
2. Violation of Constitutional Rights u/Articles 21 and 22(2):
Shri Bhim Singh was not produced before a Magistrate within 24 hours of his arrest as mandated by Article 22(2) of the Constitution. The remand orders obtained on 11th and 13th September 1985 from the Executive Magistrate First Class and the Sub Judge, respectively, were done without producing Shri Bhim Singh before them. The affidavits filed by the police officers, including the Inspector General of Police, used careful language to avoid stating that Shri Bhim Singh was produced before the Magistrate. This deliberate omission and the surreptitious manner of obtaining remand orders indicate a gross violation of Shri Bhim Singh's constitutional rights.
3. Entitlement to Monetary Compensation for Wrongful Detention:
The Supreme Court held that Shri Bhim Singh's constitutional rights were violated with impunity, and he must be suitably and adequately compensated. Citing precedents from Rudul Sah v. State of Bihar and Sebestian M. Hongray v. Union of India, the Court affirmed its jurisdiction to award monetary compensation for such violations. Consequently, the Court directed the State of Jammu and Kashmir to pay Shri Bhim Singh a sum of Rs. 50,000/- as compensation within two months, to be deposited with the Registrar of the Court and paid to Shri Bhim Singh.
Conclusion:
The Supreme Court condemned the high-handed and authoritarian actions of the police officers and highlighted the responsibility of higher echelons of the Government of Jammu and Kashmir in this matter. The judgment underscores the importance of protecting personal liberty and the Court's role in providing redress through monetary compensation for wrongful detention and violation of constitutional rights.
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1985 (11) TMI 239
Issues Involved:
1. Competency of Shri Rahul H. Rai to institute the suit.
2. Misjoinder of parties.
3. Ownership of the trade mark/house mark 'Superflame'.
4. Likelihood of passing off by the defendants.
5. Nature of the suit (false, vexatious, frivolous) and entitlement to special costs.
6. Relief.
Issue-wise Detailed Analysis:
Issue No. 1: Competency of Shri Rahul H. Rai to institute the suit
The court examined whether Shri Rahul H. Rai was competent to institute the suit on behalf of Super Parts Pvt. Ltd. The plaintiff was described as "Globe Super Parts (Sole proprietor Super Parts Pvt. Ltd.), 17/1, Mathura Road, Faridabad (Haryana)." The court found that Super Parts Pvt. Ltd. was the actual plaintiff and that Rahul H. Rai had the authority to institute the suit, sign, and verify the plaint on behalf of the company. The court held that the use of brackets indicated that Globe Super Parts was equal to Super Parts Pvt. Ltd., and the authorization given by the Board of Directors to Rahul H. Rai was valid. Therefore, the issue was decided in favor of the plaintiff.
Issue No. 2: Misjoinder of parties
The court considered whether there was a misjoinder of parties. Defendant No. 1 was "Blue Superflame Industries," and Defendant No. 2 was Ganga Ram Verma, who was alleged to be a partner or sole proprietor. The court found a connection between Defendant 1 and Defendant 2, as Defendant 2 had worked as a contractor for the plaintiff and had knowledge of the plaintiff's business. The court concluded that there was no misjoinder of parties, and the issue was decided accordingly.
Issue No. 3: Ownership of the trade mark/house mark 'Superflame'
The court examined whether the plaintiff was the owner of the trade mark 'Superflame' in respect of gas appliances. The court noted that 'Superflame' was not a registered trade mark and that the suit was a passing off action. The court found that 'Superflame' was a coined or fancy word, not a common language word, and had been exclusively appropriated by the plaintiff. The court held that the plaintiff had established prior use of the mark and that it had acquired a secondary significance in the market, indicating the plaintiff's goods. Therefore, the issue was decided in favor of the plaintiff.
Issue No. 4: Likelihood of passing off by the defendants
The court considered whether the defendants' use of the trading style "Blue Superflame Industries" was likely to pass off their goods as those of the plaintiff. The court found that the word 'Superflame' was prominently associated with the plaintiff and that the defendants' use of the word in their trading style was likely to create confusion. The court held that the defendants had adopted the word 'Superflame' to trade upon the plaintiff's reputation and goodwill. Therefore, the issue was decided in favor of the plaintiff.
Issue No. 5: Nature of the suit (false, vexatious, frivolous) and entitlement to special costs
The court did not find the suit to be false, vexatious, or frivolous. The defendants' claim for special costs was not upheld.
Issue No. 6: Relief
The court granted a permanent injunction restraining the defendants from using the word 'Superflame' in their trading style. The court denied the plaintiff's prayer for accounting but ordered the defendants to deliver up all infringing labels and related materials. The defendants were directed to file an affidavit disclosing the number of labels and other materials within two weeks and to deliver them up within four weeks. The plaintiffs were awarded the costs of the suit.
Additional Observations:
The court also directed that a copy of the judgment be sent to the Indian Standards Institute and the Consumer Protection Cell of the Delhi Administration to ensure consumer safety regarding gas burner designs.
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1985 (11) TMI 238
Issues Involved:
1. Subjective satisfaction of the detaining authority based on a single incident.
2. Delay in considering the representation by the detaining authority.
3. Delay in passing the detention order.
4. Delay in executing the detention order.
5. Exercise of power by the Central Government under Section 11 of the COFEPOSA Act.
Detailed Analysis:
1. Subjective Satisfaction of the Detaining Authority Based on a Single Incident:
The petitioner challenged the detention order on the grounds that the subjective satisfaction of the detaining authority could not have been properly arrived at due to the fact that the incident of smuggling was a solitary incident. The court referenced the Division Bench judgment in Yahya Ali Ahmed Fahem v. State of Maharashtra, which established that a single incident could form the basis of subjective satisfaction for future prevention under the COFEPOSA Act. The court reiterated that a single incident, if it demonstrates potentiality for continuing criminality and indicates previous practice and expertise, can lead to a legitimate conclusion that similar activities could be repeated. The court found that the petitioner's actions, as recorded under Section 108 of the Customs Act, showed full awareness and active participation in smuggling, thus justifying the detention order.
2. Delay in Considering the Representation by the Detaining Authority:
The petitioner argued that the continued detention was illegal due to the delay in considering his representation. The representation, received on 18th February 1985, was rejected by the State Government on 6th March 1985. The court, referencing Harish Pahwa v. State of U.P., emphasized that representations must be considered expeditiously. The court found that the State Government acted with due diligence, forwarding the representation to the sponsoring authority and receiving comments promptly, thus rejecting the argument of undue delay.
3. Delay in Passing the Detention Order:
The petitioner contended that the delay between the incident (28th July 1984) and the detention order (2nd November 1984) indicated a lack of proper appreciation of the factors involved. The court found that the delay was satisfactorily explained by the need for translation of documents into Gujarati and the procedural steps involving the Screening Committee and the Home Department. The court held that the delay did not vitiate the detention order.
4. Delay in Executing the Detention Order:
The petitioner argued that the nearly two-month delay in executing the detention order affected the quality of the subjective satisfaction. The court examined the steps taken to execute the order, including efforts to locate the petitioner and attempts to serve the order during court remand dates. The court concluded that the detaining authority was neither negligent nor inactive, and the delay was due to procedural requirements and difficulties in locating the petitioner. The court found no basis to claim that the subjective satisfaction was not genuine.
5. Exercise of Power by the Central Government under Section 11 of the COFEPOSA Act:
The petitioner raised the issue of whether the Central Government exercised its power under Section 11 of the COFEPOSA Act to review the detention order. The court reviewed an affidavit from the Under Secretary to the Government of India, which confirmed that the report from the State Government was scrutinized, and no reason for interfering with the detention order was found. The court was satisfied that the Central Government acted within a reasonable time and with due diligence.
Conclusion:
The court found that neither the order of detention nor the continued detention of the petitioner was illegal. The rule was discharged, and the petition was dismissed.
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1985 (11) TMI 237
Issues Involved:
1. Entitlement of the plaintiff to charge compound interest.
2. Entitlement of the defendants to repay the loan in five equal annual instalments.
Detailed Analysis:
Issue 1: Entitlement of the Plaintiff to Charge Compound Interest
The primary issue in this case was whether the Bank was entitled to charge compound interest on the agricultural loan provided to the defendants. The trial court held that "for agricultural loans in India, the conception of quarterly rest basis i.e., charging of compound interest does not apply." Consequently, the Bank was directed to submit a revised statement of accounts charging simple interest. The revised sum due was determined to be Rs. 19,851.66, and the court decreed this amount with future interest at 6% payable in two annual instalments.
The appellate court examined whether the Bank was justified in charging interest with half-yearly rests. The Reserve Bank of India (RBI) report stated that compounding of interest on current dues on agricultural advances is prohibited, but interest could be compounded when the crop loan becomes overdue. The court referred to several circulars issued by the RBI, which emphasized that interest on current dues should not be compounded and that repayment periods should coincide with the period when the farmer is fluid, i.e., after harvesting and marketing of crops.
The court also reviewed previous decisions, including Bank of India v. Raosaheb Krishnarao and D.S. Gowda v. Corporation Bank, which established that the custom of charging compound interest is not applicable to agricultural loans. The court concluded that "Banks cannot charge compound interest with quarterly rests on agricultural advances."
Issue 2: Entitlement of the Defendants to Repay the Loan in Five Equal Annual Instalments
The defendants requested to repay the loan in five equal annual instalments. The trial court did not explicitly address this request in its final decree but allowed the repayment in two annual instalments. The appellate court did not find any substantial reason to modify this aspect of the trial court's judgment.
Conclusion
The appeal was dismissed, and the trial court's judgment was upheld. The court reiterated that banks are prohibited from charging compound interest on agricultural loans with quarterly or half-yearly rests, as per the directives of the Reserve Bank of India. The court emphasized that agricultural loans should be treated differently from commercial loans due to the unique economic conditions of farmers, who generally have income only once a year from the sale of their crops. The court also refused to grant a certificate for appeal to the Supreme Court, stating that the case did not involve any substantial question of law of general importance.
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1985 (11) TMI 236
Issues Involved:
1. Statutory qualification under Section 399 of the Companies Act.
2. Barred by limitation.
3. Maintainability of the petition under Sections 397 and 398 of the Companies Act.
Issue-wise Detailed Analysis:
1. Statutory Qualification under Section 399 of the Companies Act:
The first issue is whether the appellant satisfies the statutory requirements under Section 399 of the Companies Act for filing a petition under Sections 397 or 398. The learned Judge dismissed the petition on the ground that the appellant did not possess the statutory qualification under Section 399 of the Act. The appellant argued that he, along with other consenting shareholders, collectively owned not less than one-tenth of the issued share capital of the company. The court found that the appellant, along with the members shown in the annexure, collectively owned not less than one-tenth of the issued share capital of the company. The court concluded that the provisions of Section 399 of the Act were satisfied, and the petition was accordingly maintainable.
2. Barred by Limitation:
The second issue is whether the petition is barred by limitation. The learned Judge held that the petition was barred by limitation under Article 137 of the Limitation Act, 1963, as it was filed beyond three years from the date of the resolution or from the date of knowledge. However, the court emphasized that Sections 397 and 398 refer to a continuing wrong and the need for bringing an end to the matter. The Supreme Court in Santhi Prasad Jain v. Kalinga Tubes Ltd. held that the conduct of the majority shareholders must be continuous and persist up to the date of the petition. The court concluded that no question of limitation could arise as the oppression or conduct of the affairs of the company is a continuing wrong. Additionally, the court found that the appellant was not aware of the resolution until August 1982, and there was no way for him to know about it earlier. Therefore, the petition was not barred by limitation.
3. Maintainability of the Petition under Sections 397 and 398 of the Companies Act:
The third issue is whether the petition is maintainable under Sections 397 and 398 of the Companies Act. The learned Judge held that the petition was not maintainable as there was no material change in the management or control of the company. However, the court noted that the petitioner had specifically alleged attempts by the respondents to gain control in the Board of Directors and ownership of the shares in a clandestine and illegal manner. These allegations were not fully considered by the learned Judge. The court concluded that these allegations deserved to be examined on merits with reference to evidence, and the petitions could not be disposed of summarily. Therefore, the petition was maintainable under Sections 397 and 398 of the Act.
Conclusion:
For the foregoing reasons, the appeal was allowed, the order of the learned Judge was set aside, and the matter was remanded for fresh disposal on merits. No costs were awarded.
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1985 (11) TMI 235
Issues Involved:
1. Validity of notices convening Annual General Meetings (AGMs).
2. Legality of the current Board of Directors.
3. Authority to call AGMs after the statutory period.
4. Appointment of Special Officers and their powers.
5. Interlocutory orders and their implications on the suit.
Detailed Analysis:
1. Validity of Notices Convening AGMs:
The plaintiffs challenged the notices dated April 23, 1984, convening the 74th, 75th, and 76th AGMs of the defendant company, claiming they were "illegal, void, and inoperative." The notices were issued by defendants who were alleged to have ceased to be directors due to the failure to hold AGMs since September 30, 1980. The court found that the notices were indeed invalid as the directors' terms had expired, and only the Central Government could convene such meetings after the statutory period.
2. Legality of the Current Board of Directors:
The plaintiffs argued that the defendants had vacated their offices by September 1983 due to the failure to hold AGMs. The court examined various provisions of the Companies Act, 1956, and previous case laws. It concluded that the directors would continue in office until valid AGMs were held, supporting the view that the scheme of Section 256 favors the continuance of management rather than disruption. However, since no AGMs were held, the directors could not lawfully act as such.
3. Authority to Call AGMs After the Statutory Period:
The court noted that under Sections 166 and 167 of the Companies Act, 1956, only the Central Government could call AGMs after the statutory period had expired. The defendants' attempt to convene AGMs beyond the statutory period was deemed unlawful. The court restrained the defendants from calling the AGMs under the impugned notices.
4. Appointment of Special Officers and Their Powers:
The first court appointed Joint Special Officers to manage the company, operate bank accounts, and handle other administrative tasks. The appellate court found this to be an overreach, as it effectively decreed the suit at an interlocutory stage. The court emphasized that such extensive management by the court is not envisaged under the Code of Civil Procedure or the Specific Relief Act, and should be reserved for proceedings under Sections 397 and 398 of the Companies Act.
5. Interlocutory Orders and Their Implications on the Suit:
The appellate court highlighted that interlocutory orders should not effectively decide the main issues of the suit. The first court's order, which included the appointment of Special Officers and injunctions against the directors, was seen as improperly exercising discretion. The appellate court set aside the order except for restraining the defendants from calling the AGMs under the impugned notices. It allowed the directors to take steps to call AGMs in accordance with the law and permitted members to apply to the Central Government for directions.
Conclusion:
The appellate court set aside the first court's order, except for restraining the defendants from calling the AGMs under the impugned notices. The court emphasized the need for proper management and adherence to statutory provisions while allowing the possibility for lawful AGMs to be called either by the directors or through directions from the Central Government. The decision aimed to prevent a deadlock in the company's management and ensure compliance with the Companies Act.
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1985 (11) TMI 234
Issues:
1. Penalty imposition under Section 15-A (1) of the Sales Tax Act for failure to deposit tax within the prescribed time.
Analysis:
The judgment pertains to three revisions filed by the Commissioner, Sales Tax, U. P. against a Sales Tax Tribunal's judgment related to assessment years 1981-82 U. P. and 1981-82 Central. The respondent-assessee had filed monthly returns for October and December 1981, admitting tax liabilities but failed to deposit the tax amounts within the specified time. Consequently, penalty proceedings were initiated under Section 15-A (1) of the Sales Tax Act, resulting in the imposition of penalties. The first appellate authority reduced the penalties, and both the revenue and the assessee appealed to the Sales Tax Tribunal.
The key contention raised was that the respondent-assessee, by issuing cheques without sufficient funds, should not escape the penalty liability as per Section 15-A (1) (a) of the Act. The provision specifies penalties for failure to furnish returns or deposit tax without reasonable cause. The Tribunal found that the assessee had issued cheques in anticipation of receiving payments from the Electricity Board, which were delayed. Subsequently, the assessee deposited the tax with interest upon receiving partial payments from the Electricity Board. The Tribunal concluded that there was a reasonable cause for the delay in tax deposit and overturned the penalties imposed by the lower authorities.
The judgment emphasized that the determination of reasonable cause is a factual inquiry. The Tribunal's decision to accept the assessee's explanation was based on the evidence on record, indicating no error in law. Consequently, the Tribunal's order was upheld, and the revisions filed by the Commissioner were rejected. The judgment concluded with no order as to costs, maintaining the Tribunal's decision in favor of the assessee.
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1985 (11) TMI 233
Issues Involved:
1. Maintainability of winding-up petition by a secured creditor.
2. Proof of debt by the Bank.
3. Bona fide dispute of the debt by the Company.
4. Company's inability to pay its debt.
5. Statute-barred debts.
6. Validity of balance-sheets and revival letters.
7. Effect of subsequent suits filed by the Bank.
8. Applicability of Order II Rule 2 CrPC.
9. Alleged forgery by the Bank.
10. Administration of the Company's assets in winding-up.
11. Just and equitable grounds for winding-up.
Summary:
1. Maintainability of Winding-Up Petition by a Secured Creditor:
The contention that a secured creditor must relinquish or value their security u/s 9(2) of the Provincial Insolvency Act, 1920, to maintain a winding-up petition was rejected. The court held that this rule does not apply to winding-up petitions, as supported by various legal authorities, including Palmer's Company Law and Pennington's Company Law.
2. Proof of Debt by the Bank:
The Company disputed the existence and extent of the debt. However, the court found that the Bank had established a substantial part of the debt through various documents, including promissory notes, deeds of hypothecation, and balance-sheets. The court noted that the Company had acknowledged its liability in several balance-sheets and revival letters, which were not disputed at the time of marking.
3. Bona Fide Dispute of the Debt by the Company:
The Company's defense was not considered bona fide or substantial. The court noted that the Company had not produced its own books of account or the minutes book of the Board of Directors. The court also found that the Company's claims of counter-claims and disputes regarding interest rates were not substantial.
4. Company's Inability to Pay its Debt:
The court held that the Company was unable to pay its debts within the meaning of Section 433(e) of the Act, as evidenced by the statutory demand (Ext. P. 47) and the Company's failure to traverse or comply with it. The court also noted that the Company did not have liquid cash to repay the principal amount and interest due.
5. Statute-Barred Debts:
The court held that acknowledgments of liability in the balance-sheets of a company furnish a fresh starting point of limitation. The court rejected the contention that the debts should be shown to be in time as on the date of passing the winding-up order, holding that it is sufficient if the debt is alive as on the date of filing the petition.
6. Validity of Balance-Sheets and Revival Letters:
The court rejected the contention that the balance-sheets and revival letters were void because the directors who authenticated them were themselves creditors of the Company. The court held that the directors were not creditors in the substance of the transaction and that the acknowledgments and revivals were valid.
7. Effect of Subsequent Suits Filed by the Bank:
The court held that the pendency of suits does not bar the maintainability of a winding-up petition. The court found that the sanctions of limits from time to time were distinct transactions giving rise to distinct causes of action, and the suits did not affect the winding-up petition.
8. Applicability of Order II Rule 2 CrPC:
The court rejected the contention that the Bank had split up the cause of action and relinquished part of its claim under Order II Rule 2 CrPC. The court held that the incidents of Order II Rule 2 CrPC are not attracted in winding-up proceedings.
9. Alleged Forgery by the Bank:
The court found no merit in the Company's allegations of forgery. The court noted that the documents were executed in the regular course of banking business and that the Company had ratified and adopted the accounts of the Bank through its balance-sheets and revival letters.
10. Administration of the Company's Assets in Winding-Up:
The court rejected the contention that a winding-up order would serve no purpose as all the assets were secured to the Bank. The court noted that not all assets were secured to the Bank and that the value of the security had denuded over the years.
11. Just and Equitable Grounds for Winding-Up:
The court upheld the finding of the learned Company Judge that it was just and equitable to wind up the Company, noting the Company's financial instability, the lack of dividends for 15 years, and the substantial debts owed to various creditors.
Conclusion:
The appeal was rejected, and the court refused to grant a certificate of fitness to appeal to the Supreme Court.
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1985 (11) TMI 232
Issues Involved:
1. Reliance on retracted statements of co-accused.
2. Burden of proof and proper evidence.
3. Disproportionate penalty.
4. Plea of alibi and findings of criminal courts.
5. Consideration of exculpatory statements and adverse inference for non-examination of witnesses.
6. Applicability of Section 123(2) and burden of proving smuggled goods.
7. Final conclusions and confirmation of penalties.
Issue-wise Detailed Analysis:
1. Reliance on retracted statements of co-accused:
The appellants contended that the Board erred in relying on the statements of co-accused which were subsequently retracted. The Tribunal noted that the statements of the drivers and other occupants were recorded immediately after the interception of the vehicles. These statements implicated the appellants in instructing the transport of contraband goods. The Tribunal held that the retractions were belated and did not wipe out the initial statements. It was also observed that the proceedings before the adjudicating authority are not criminal trials, and the drivers cannot be considered co-accused but, at best, accomplices whose evidence, if corroborated, can be relied upon.
2. Burden of proof and proper evidence:
The appellants argued that the burden of proof was wrongly placed on them and that the findings were not based on proper and reliable evidence. The Tribunal held that the burden of proving the plea of alibi was on the appellants. The Customs authorities had discharged their initial burden by providing evidence of the drivers' statements and the ownership of the vehicles. The appellants failed to provide convincing evidence to support their alibi.
3. Disproportionate penalty:
The appellants claimed that the penalty imposed was disproportionate to the value of the smuggled goods. The Tribunal did not find merit in this contention, as the penalties were imposed based on the involvement of the appellants in the smuggling activities and their previous involvements, which justified the penalties.
4. Plea of alibi and findings of criminal courts:
The appellants contended that they were not at the location of the seizure and that the findings of the criminal courts, which discharged one of the appellants, should be binding on the quasi-judicial authority. The Tribunal held that prosecution and adjudication are independent proceedings, and the findings of criminal courts are not binding on quasi-judicial authorities. The plea of alibi was considered and rejected by the Additional Collector, and the Tribunal found no error in this finding.
5. Consideration of exculpatory statements and adverse inference for non-examination of witnesses:
The appellants argued that the Board erred in relying on exculpatory statements and should have drawn an adverse inference for the non-examination of Rajendra Kumar Vasantlal. The Tribunal held that the statements of the drivers were not exculpatory and that the non-examination of Rajendra Kumar did not affect the findings, as the ownership of the car was corroborated by other evidence.
6. Applicability of Section 123(2) and burden of proving smuggled goods:
The appellants contended that the goods seized were not those mentioned in Section 123(2), and therefore, the burden was on the department to establish that they were smuggled goods. The Tribunal held that this contention was irrelevant as the appellants neither claimed ownership of the goods nor contended that the goods were licitly imported into India.
7. Final conclusions and confirmation of penalties:
The Tribunal, after considering all aspects and evidence afresh, concluded that there was no reason to interfere with the order passed by the Additional Collector and confirmed by the Board regarding the imposition of penalties on the appellants. The appeals were rejected.
Conclusion:
The Tribunal upheld the penalties imposed on the appellants, rejecting their contentions regarding the reliance on retracted statements, burden of proof, plea of alibi, and the findings of criminal courts. The Tribunal found that the evidence provided by the Customs authorities was sufficient and corroborated, and the appellants failed to discharge their burden of proving the plea of alibi. The appeals were dismissed.
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1985 (11) TMI 231
Issues Involved:
1. Public Interest Litigation and its nature.
2. Validity of the change of user of the plot.
3. Res judicata applicability.
4. Allegations of mala fides and undervaluation.
5. Compliance with Building Regulation No. 3.
Summary:
1. Public Interest Litigation and its nature:
The Supreme Court emphasized the importance of public interest litigation (PIL), noting its role in addressing the violation of constitutional or legal rights of disadvantaged groups. The Court referenced its previous ruling in S.P. Gupta v. Union of India, which established that any member of the public could maintain an application for judicial redress in cases of legal wrongs affecting a determinate class of persons unable to approach the Court due to various disadvantages.
2. Validity of the change of user of the plot:
The case arose from a dispute over the use of a plot reserved for a bus depot by the Bombay Electricity Supply and Transport Undertaking (BEST). The plot was partially used for commercial purposes, which was challenged. The Supreme Court found that the commercial use of a small portion of the plot, which substantially augmented the Corporation's coffers, did not violate the intended use of the land. The primary purpose of the plot remained intact, and the additional use was justified to support public interests.
3. Res judicata applicability:
The High Court's ruling that the present writ petition was not barred by res judicata was upheld. The Supreme Court agreed with the High Court's finding that the previous writ petition filed by Thakkar was not bona fide, as it was influenced by a disgruntled builder. This finding excluded the application of s.11 C.P.C. in the present case, allowing the current petition to proceed.
4. Allegations of mala fides and undervaluation:
The Supreme Court rejected the allegations of mala fides and undervaluation. The Court noted that the tender process was transparent, with advertisements published in major newspapers and tenders invited from well-known builders. The acceptance of the highest bid from Forward Construction Co. was found to be in order. The Court also dismissed the claim that the transaction was outside the Bombay Corporation Act, affirming that the Corporation's actions were within its powers to promote public safety, health, and convenience.
5. Compliance with Building Regulation No. 3:
The High Court had allowed the writ petition based on Building Regulation No. 3, which required modification of the development plan for any change of user. The Supreme Court, however, interpreted the term "change" to mean a substantial alteration. Since the primary use of the plot as a bus depot remained, with only a minor commercial addition, the Court held that the proviso to Building Regulation No. 3 did not apply. The Court also noted that this plea was introduced late in the proceedings, without giving the appellants an opportunity to rebut.
Conclusion:
The Supreme Court allowed the appeals, setting aside the High Court's judgment and restoring the order of the learned Single Judge dismissing the writ petition. The special leave petition filed by Prabhat Mandal and others was dismissed, with parties bearing their own costs.
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1985 (11) TMI 230
Issues Involved:
1. Deletion of addition made on account of accrued interest on interest-free loans to directors.
2. Genuineness of cash credit of Rs. 40,000 in the name of Ugamlal Parekh.
3. Unexplained credit in the account of Shri Choggalal Akodia.
4. Classification of expenditure incurred for prospecting of mines as revenue or capital expenditure.
5. Disallowance of car expenses for personal use of directors.
6. Deletion of addition of Rs. 20,495 shown in the profit and loss account.
7. Deletion of addition of Rs. 86,169, Rs. 79,555, and Rs. 38,835 representing unpaid wages.
Detailed Analysis:
1. Deletion of Addition Made on Account of Accrued Interest on Interest-Free Loans to Directors:
The Commissioner (Appeals) deleted the addition made by the ITO amounting to Rs. 85,017 on the grounds that the ITO had not established any nexus between the borrowings and the advances made. The loans were old, dating back to 1950, and a resolution passed in 1961 by the shareholders decided that no interest would be charged from the directors. The department's reliance on section 36(2)(iv) of the Income-tax Act, 1961, was found not applicable. The Tribunal upheld the Commissioner (Appeals)' decision, confirming that there was no nexus between the loans taken and advanced, and the principle of consistency demanded that the department should not make inconsistent additions without basis.
2. Genuineness of Cash Credit of Rs. 40,000 in the Name of Ugamlal Parekh:
The ITO added Rs. 40,000 as unexplained cash credit, relying on a statement from Ugamlal Parekh, who denied giving any loan to the assessee. The Commissioner (Appeals) deleted the addition, emphasizing that the ITO should have summoned Parekh for cross-examination. The Tribunal disagreed, holding that the confirmatory letter and book entries were disproved by Parekh's statement, and the assessee failed to prove the genuineness and creditworthiness of the transaction. The Tribunal restored the ITO's addition of Rs. 40,000 under section 68 but did not uphold the interest addition of Rs. 1,757.
3. Unexplained Credit in the Account of Shri Choggalal Akodia:
The issue was remanded to the Commissioner (Appeals) to be decided afresh as per the directions of the Tribunal for the assessment year 1973-74 in the assessee's own appeal.
4. Classification of Expenditure Incurred for Prospecting of Mines:
The ITO treated the expenditure as capital expenditure. The Commissioner (Appeals) reversed this, holding it as revenue expenditure, reasoning that the lease was for working out the mines and not for prospecting operations. The Tribunal upheld this decision, noting that the assessee was engaged in mining for the last 40 years on one lease, and the nature of the expenditure was revenue.
5. Disallowance of Car Expenses for Personal Use of Directors:
The Commissioner (Appeals) sustained the disallowance at Rs. 9,700 (one-sixth of the total expenses). The Tribunal found this excessive and adjusted it to one-fifth, in line with the past record.
6. Deletion of Addition of Rs. 20,495 Shown in the Profit and Loss Account:
The Commissioner (Appeals) deleted the addition, following the Tribunal's order for the assessment year 1973-74, which held that these items were not originally passed through the profit and loss account, making section 41(1) inapplicable. The Tribunal confirmed this decision.
7. Deletion of Addition of Rs. 86,169, Rs. 79,555, and Rs. 38,835 Representing Unpaid Wages:
The ITO added these amounts under section 41(1), arguing that the liabilities ceased to exist. The Commissioner (Appeals) deleted the additions, noting that the amounts were not transferred to the profit and loss account and payments were still being made. The Tribunal was divided on this issue. The Judicial Member supported the ITO's view, emphasizing the non-payment and lack of details. The Accountant Member disagreed, citing that mere time-barring did not constitute cessation of liability under section 41(1). The Third Member sided with the Accountant Member, concluding that there was no remission or cessation of liability, and the amounts could not be treated as income under section 41(1).
Conclusion:
The appeals for the assessment years 1972-73 and 1978-79 were partly allowed. The appeal for the assessment year 1973-74 was treated as allowed for statistical purposes. The appeal for the assessment year 1979-80 was dismissed.
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1985 (11) TMI 229
Issues Involved:
1. Maintainability of the appeals.
2. Interpretation of Section 128A(3) and Section 129-A(1)(b) of the Customs Act, 1962.
3. Applicability of Section 129E of the Customs Act, 1962.
4. Right of appeal and statutory conditions.
Detailed Analysis:
1. Maintainability of the Appeals:
The core issue was whether the final orders made by the Collector (Appeals) on 21-1-1985, dismissing the appeals, are comprehended by Section 128A(3) of the Customs Act, 1962, thereby making them appealable to the Tribunal under Section 129-A(1)(b).
2. Interpretation of Section 128A(3) and Section 129-A(1)(b):
The Tribunal examined whether the orders dismissing the appeals for non-compliance with the deposit requirement under Section 129E fall within the scope of Section 128A(3). The Tribunal concluded that the orders confirming the original demands, due to the appellants' failure to comply with the deposit requirement, are indeed orders under Section 128A(3). Therefore, such orders are appealable under Section 129-A(1)(b).
3. Applicability of Section 129E:
The Tribunal discussed the role of Section 129E, which mandates the deposit of the duty demanded or penalty levied as a condition precedent for the hearing of an appeal. The Tribunal noted that the rejection or dismissal of an appeal for non-compliance with Section 129E results in confirming the order appealed against, thus making it an order under Section 128A(3).
4. Right of Appeal and Statutory Conditions:
The Tribunal reiterated that the right of appeal is statutory and subject to conditions prescribed by the statute. It emphasized that an appeal remains infructuous unless the deposit is made or dispensed with due to undue hardship. The Tribunal cited various precedents to support the view that orders dismissing appeals on preliminary grounds, such as non-compliance with deposit requirements, are still appealable.
Conclusion:
The Tribunal held that the appeals are maintainable, as the orders dismissing the appeals for non-compliance with Section 129E are considered orders under Section 128A(3) and are thus appealable under Section 129-A(1)(b). The applications for dispensing with the deposit in both appeals were to be scheduled for an early hearing.
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1985 (11) TMI 228
Issues involved: Detention under National Security Act, delay in disposal of representation by Central Government.
Detention under National Security Act: The appellant was detained under the National Security Act, 1980, with the order of detention passed by the District Magistrate and subsequently approved by the Government of Uttar Pradesh. The appellant made representations invoking Section 14 of the Act to various authorities, including the President and the Prime Minister. The Central Government rejected the appellant's representation after a significant delay, leading to the challenge of the legality of further detention.
Delay in disposal of representation by Central Government: The main contention was the delay of 75 days in the Central Government's disposal of the appellant's representation, which was not disputed. The representations were received by the President's and Prime Minister's Secretariats in March but reached the Ministry of Home Affairs in May. The Additional Solicitor General argued that the delay was due to the representations not being addressed directly to the Ministry of Home Affairs. However, the Supreme Court found the delay unjustified, emphasizing the need for prompt consideration of such representations. Citing previous judgments, the Court highlighted the importance of timely review of representations against preventive detention, ultimately ruling in favor of the appellant and ordering his immediate release.
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1985 (11) TMI 227
Issues Involved:
1. Entrustment of gold to the defendants.
2. Execution of the tehrir (amanati chithi).
3. Plaintiff's acquisition of the gold.
4. Conduct of the parties post-entrustment.
5. Bar of limitation.
Issue-wise Detailed Analysis:
1. Entrustment of Gold to the Defendants:
The plaintiff alleged that on 25.12.1957, the defendants received from him gold weighing 250 tolas as a trust deposit (amanat) and agreed to carry it to Bombay at their own risk, delivering it against a payment of Rs. 300/- as remuneration. The defendants denied receiving any gold or undertaking such work. The Trial Court and the High Court recorded concurrent findings on the entrustment of gold to the defendants. However, the Supreme Court found serious infirmities in these findings and scrutinized the evidence.
2. Execution of the Tehrir (Amanati Chithi):
The plaintiff produced a tehrir purportedly executed by the defendants, acknowledging the receipt of the gold. The defendants denied executing this document. The plaintiff's witnesses, including the writer and attestors of the tehrir, testified to its authenticity. However, a handwriting expert (D.W. 8) opined that the document did not contain signatures comparable with the admitted signatures of the defendants. The Supreme Court found the tehrir to be unusual and not credible, given the circumstances and the defendants' denial.
3. Plaintiff's Acquisition of the Gold:
The plaintiff claimed he purchased the gold from Motilal Brij Bhusan & Co. of Bombay and another 100 tolas from Maganlal Manakmal of Bombay. He stated that he carried Rs. 40,000/- from Barmer to Bombay for the purchase, which was part of the earnings of his father, uncle, and himself. However, he did not maintain account books or remember the exact amount paid. The Supreme Court found the plaintiff's story implausible, especially since his father's house was mortgaged for a significant loan, contradicting the claim of having such a large sum at home.
4. Conduct of the Parties Post-Entrustment:
The plaintiff alleged that the defendants neither carried the gold to Bombay nor returned it. He did not report the matter to the police, claiming that the defendants assured him of returning the gold. The plaintiff issued a notice of demand nearly two and a half years later, which the defendants promptly denied. The Supreme Court found the plaintiff's delay in taking legal action and the lack of a criminal complaint against the defendants to be unexplained and suspicious.
5. Bar of Limitation:
The defendants pleaded that the suit was barred by time based on Articles 30 and 31 of the Indian Limitation Act, 1908. However, the Supreme Court did not find it necessary to address this issue, given their conclusion on the merits of the case.
Conclusion:
The Supreme Court found the plaintiff's story of entrustment of 250 tolas of gold to the defendants to be baseless and artificial. The evidence regarding the purchase of the gold and the execution of the tehrir was not credible. The Court concluded that neither the Trial Court nor the High Court had given due consideration to the material aspects of the case, leading to vitiated judgments. Consequently, the Supreme Court allowed the appeal, set aside the judgments and decrees of the High Court and the Trial Court, and dismissed the suit, with each party bearing their own costs.
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1985 (11) TMI 226
The assessee purchased goods in Tamil Nadu using C form, brought them to Kerala, and then transported them to Bombay for sale. Penalty imposed under section 10(d) of Central Sales Tax Act was challenged. High Court ruled that penal provision not applicable as no requirement to sell goods in Kerala. State's contentions dismissed. Tax revision case dismissed, no costs.
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1985 (11) TMI 225
Issues:
1. Escaped assessment of turnover by the assessee.
2. Reassessment notice issued based on evidence of goods purchased in another name.
3. Allegations of conducting business under a different name.
4. Added turnover and imposition of tax upheld by Appellate Assistant Commissioner.
5. Tribunal's reversal of findings and subsequent challenge in High Court.
6. Tribunal's reliance on evidence of a living person named Hamza.
7. Lack of evidence supporting Tribunal's conclusion.
8. Close connection between Hamza and the assessee.
9. High Court's decision on the sustainability of Tribunal's findings.
Analysis:
1. The case involved the reassessment of the assessee for the assessment year 1971-72 due to suspected escaped assessment of turnover. The reassessment was based on information about goods purchased in another name, leading to the issuance of a notice to the assessee.
2. The assessing authority added a significant sum to the assessee's turnover, which was upheld by the Appellate Assistant Commissioner. The Tribunal, however, reversed these findings, prompting a challenge by the Revenue in the High Court.
3. The Tribunal's decision was based on the existence of a person named Hamza, with the burden on the Revenue to prove that sales attributed to Hamza were actually conducted by the assessee. The Tribunal found the Revenue's evidence insufficient to support the imposition of tax on the assessee.
4. The High Court scrutinized the Tribunal's decision and found it lacking in evidence to justify overturning the earlier findings of the authorities. The Tribunal failed to address the close connection between Hamza and the assessee, including shared addresses and business dealings.
5. Despite a previous remand by the High Court for reconsideration, the Tribunal reaffirmed its earlier findings without substantial evidence. The High Court deemed the Tribunal's decision as "perverse" and "unsustainable," ultimately allowing the tax revision case in favor of the Revenue.
6. In conclusion, the High Court's judgment highlighted the importance of evidence in tax assessments and the need for logical and justifiable conclusions by the authorities. The close association between the assessee and the individual named Hamza played a crucial role in determining the liability for the assessed turnover.
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1985 (11) TMI 224
Issues Involved:
1. Whether the word "trailer" includes tractor-trolleys.
2. Whether tractor-trolleys are exempt under section 4(1) of the Rajasthan Sales Tax Act as agricultural implements.
3. Whether tractor-trolleys fall within the scope of entry No. 7 of the Notification dated September 6, 1977.
4. Whether sales or purchases of tractor-trolleys were taxable at 4 per cent only.
Detailed Analysis:
Issue 1: Whether the word "trailer" includes tractor-trolleys.
The Court analyzed the definitions of "trailer" and "trolley" from Chambers Twentieth Century Dictionary and Webster's Dictionary. The term "trailer" refers to a cart, wagon, or large van designed to be pulled by an automobile, truck, or tractor. The term "trolley" refers to a wheeled carriage or basket that runs suspended from an overhead track. The Court concluded that the word "trailer" as used in entry No. 7 of the Notification dated September 6, 1977, does not include tractor-trolleys. The Board's conclusion that tractors do not fall within entry No. 7 and that the word "trailers" does not include tractor-trolleys was upheld.
Issue 2: Whether tractor-trolleys are exempt under section 4(1) of the Rajasthan Sales Tax Act as agricultural implements.
The Court examined the history of the entry "agricultural machinery and implements" and noted that a tractor-trolley is not specified as an agricultural implement in the notification. Citing various cases, the Court determined that a tractor-trolley is not an agricultural implement because it is neither apparatus nor implement nor equipment for carrying out agricultural operations. The State Government did not specify tractor-trolleys as agricultural implements, and thus, they are not exempt under section 4(1) of the Act.
Issue 3: Whether tractor-trolleys fall within the scope of entry No. 7 of the Notification dated September 6, 1977.
The Court reviewed entry No. 7, which relates to various types of motor vehicles and includes "all varieties of trailers by whatever name known." It was concluded that the entry refers to trailers attached to motor vehicles and not to tractor-trolleys. Therefore, tractor-trolleys do not fall within the scope of entry No. 7 of the Notification dated September 6, 1977.
Issue 4: Whether sales or purchases of tractor-trolleys were taxable at 4 per cent only.
The Court held that since tractor-trolleys are not included in the expression "trailers" as used in entry No. 7, the sales tax at the rate of 10 per cent is not applicable. Tractor-trolleys are also not spare parts of tractors, so entry No. 17, which prescribes a 4 per cent tax rate for tractors and spare parts, is not applicable. As there is no specific entry dealing with tractor-trolleys, they fall under the residuary entry No. 19 of Table 17, which prescribes a tax rate of 7 per cent.
Conclusion:
1. The word "trailer" does not include tractor-trolley.
2. Tractor-trolleys are not "agricultural implements" and are not exempt under section 4(1) of the Act.
3. Tractor-trolleys do not fall within the expression "all varieties of trailers by whatever names known" used in entry No. 7 of the Notification dated September 6, 1977.
4. Tractor-trolleys are not taxable at the rate of 4 per cent; the applicable tax rate is 7 per cent under entry No. 19 of Table 17.
The reference, treated as a revision under section 15 of the Act as substituted by the Amendment Act, is disposed of accordingly, with parties bearing their own costs.
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1985 (11) TMI 223
Issues:
1. Appeal timeline for an assessment order.
2. Effect of rectification under section 22 of the U.P. Sales Tax Act on appeal timeline.
3. Application for condonation of delay in filing an appeal.
Detailed Analysis:
1. The judgment involves a revision application against an order passed by the Sales Tax Tribunal related to the assessment year 1978-79. The applicant, a registered dealer of shoes and general merchandise goods, had their books of account rejected and turnover enhanced by the assessing authority. The applicant failed to file an appeal within the stipulated thirty days from the date of service of the assessment order, leading to subsequent appeals being dismissed as time-barred by the Assistant Commissioner (Judicial) and the Tribunal.
2. The key contention raised was whether the timeline for filing an appeal should be calculated from the original assessment order date or the date of rectification under section 22 of the U.P. Sales Tax Act. The applicant argued that since the original order was rectified on August 31, 1982, and the rectification order was served on September 12, 1982, their appeal filed on October 5, 1982, was within the time limit. However, the court held that the appeal timeline should run from the date of service of the original assessment order, not the rectification order.
3. Additionally, the applicant sought condonation of delay in filing the appeal, which was rejected by the Assistant Commissioner (Judicial) and upheld by the Tribunal. The court noted that granting relief under section 5 of the Indian Limitation Act is discretionary, and in this case, the delay was intentional, leading to the rejection of the condonation application. The court found the exercise of power under section 5 of the Indian Limitation Act not to be arbitrary based on the circumstances of the case.
In conclusion, the court dismissed the revision application, upholding the decisions of the Assistant Commissioner (Judicial) and the Tribunal regarding the time-barred appeal and the rejection of the condonation of delay application. The court emphasized that the appeal timeline starts from the date of service of the original assessment order and not the date of rectification under section 22 of the Act.
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