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1985 (12) TMI 372
Issues Involved:
1. Whether the permission under Section 29(1)(b) of the Foreign Exchange Regulation Act (FERA) could be granted ex post facto.
2. The validity of the press release, circular, and letter issued by the Reserve Bank of India (RBI) regarding the investment scheme.
3. The legality of investments by foreign companies owned by non-residents of Indian origin.
4. Allegations of mala fides against the RBI and the Union of India.
5. The conduct of the Punjab National Bank as an authorized dealer under FERA.
6. Allegations of mala fides against the Life Insurance Corporation (LIC) of India.
7. The validity of LIC's requisition notice for an extraordinary general meeting of Escorts Ltd.
Issue-wise Detailed Analysis:
1. Ex Post Facto Permission under Section 29(1)(b) of FERA:
- The court examined whether the permission contemplated by Section 29(1)(b) of FERA could be granted after the purchase of shares by foreign companies. The judgment highlighted that the expression "general or special permission" in Section 29(1) was not qualified by the word "previous" or "prior." The court noted that Parliament had used the term "previous permission" in other sections of the Act, indicating a deliberate choice not to include it in Section 29(1). The court concluded that the permission could be granted ex post facto, emphasizing that the Reserve Bank of India (RBI) had the discretion to grant permission at any stage, provided it was in the national interest.
2. Validity of the Press Release, Circular, and Letter Issued by RBI:
- The court upheld the validity of the press release dated September 17, 1983, the circular dated September 19, 1983, and the letter dated September 19, 1983, issued by the RBI. These documents clarified the eligibility of overseas companies predominantly owned by non-residents of Indian origin to invest in Indian companies. The court found that these measures were consistent with the objectives of the investment scheme and did not operate retrospectively to validate prior purchases without permission.
3. Legality of Investments by Foreign Companies Owned by Non-residents of Indian Origin:
- The court addressed the issue of whether foreign companies owned by non-residents of Indian origin could invest in Indian companies under the scheme. It was held that any foreign company whose shares were owned to the extent of more than 60% by persons of Indian nationality or origin could avail of the facility provided by the scheme. The court emphasized that the scheme's purpose was to attract foreign exchange while preventing destabilization of Indian companies through large-scale foreign investments.
4. Allegations of Mala Fides Against RBI and Union of India:
- The court rejected the allegations of mala fides against the RBI and the Union of India. It found no evidence to suggest that the RBI acted under pressure from the government or that there was any non-application of mind in granting permission to the Caparo Group of companies. The court noted that the RBI had acted in consultation with the government due to the significant foreign exchange involved and the policy implications.
5. Conduct of Punjab National Bank as Authorized Dealer:
- The judgment criticized the Punjab National Bank for its failure to monitor the purchase of shares by the Caparo Group of companies. The bank was found to have neglected its duties as an authorized dealer under FERA, leading to a lack of proper oversight. The court directed the RBI to conduct a detailed inquiry into the bank's conduct and take necessary action, including the possible cancellation of its authorization under Section 6 of FERA.
6. Allegations of Mala Fides Against LIC:
- The court dismissed the allegations of mala fides against the LIC, finding that the requisition notice for an extraordinary general meeting was a legitimate exercise of shareholder rights. The LIC, as a shareholder, had the right to call a meeting to remove directors and appoint new ones. The court emphasized that such actions were part of corporate democracy and not subject to judicial review unless there was evidence of fraud or improper conduct.
7. Validity of LIC's Requisition Notice:
- The court upheld the validity of the LIC's requisition notice for an extraordinary general meeting of Escorts Ltd. It was held that the LIC, as a shareholder, was entitled to call a meeting to propose resolutions for the removal and appointment of directors. The court found no basis to question the notice on the grounds alleged in the writ petition.
Conclusion:
The appeals filed by the Union of India, the RBI, and the LIC were allowed, and the appeal by Escorts Ltd. was dismissed. The court directed the RBI to conduct a full inquiry into the purchase of shares by the Caparo Group of companies and reconsider the permission granted. The court also directed the RBI to investigate the conduct of the Punjab National Bank and take appropriate action. Costs were imposed on Har Prasad Nanda, Swraj Paul, and the Punjab National Bank for their roles in the litigation.
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1985 (12) TMI 371
Issues Involved:
1. Territorial jurisdiction of the Chief Metropolitan Magistrate, Calcutta.
2. Whether the petition of complaint discloses any offence under Section 406 IPC.
3. Whether the complaint is barred by limitation under Section 468 Cr.P.C.
4. Whether the offence alleged is a continuing offence.
Issue-Wise Detailed Analysis:
1. Territorial Jurisdiction:
The petitioners contended that the Chief Metropolitan Magistrate, Calcutta, lacked territorial jurisdiction as the trust property and banks involved were situated outside the jurisdiction of the court. However, the court found that some fixed deposits were retained in banks within Calcutta's jurisdiction, such as the National and Grindlays Bank, Chowringhee Branch, and United Commercial Bank, New Market Branch. Under Section 181(4) Cr.P.C., the court within whose local jurisdiction any part of the property was received or retained has jurisdiction. Therefore, the Chief Metropolitan Magistrate had territorial jurisdiction to entertain the complaint.
2. Disclosure of Offence under Section 406 IPC:
The court examined whether the complaint disclosed an offence under Section 406 IPC, which involves criminal breach of trust. The complaint must show creation of an obligation and dishonest misappropriation or dealing with the property contrary to the obligation. The court noted that the complaint alleged the petitioners retained funds in their names and in the name of Jain Swetambar Society, but did not allege dishonest misappropriation for personal use. Mere retention without dishonest misappropriation does not constitute criminal breach of trust. The court concluded that the complaint did not disclose all the ingredients of an offence under Section 406 IPC.
3. Barred by Limitation:
The petitioners raised the plea of limitation, arguing that the complaint was filed beyond the three-year limitation period prescribed under Section 468(2)(c) Cr.P.C. The court noted that the limitation period started from 15-9-75, when the opposite party first wrote to the petitioners about the funds, or from 30-3-76, when the opposite party inspected the accounts. Since the complaint was filed on 6-9-80, it was clearly barred by limitation. The court rejected the argument that the plea of limitation could not be raised for the first time in the High Court, citing the Supreme Court's decision in State of Punjab v. Sarwan Singh, which emphasized the importance of adhering to the limitation period as a matter of fairness in trial.
4. Continuing Offence:
The opposite party argued that the offence was continuing as the fixed deposits yielded interest over time. The court distinguished between continuing offences and offences committed once and for all, referencing the Supreme Court's decision in State of Bihar v. Deokaran. The court found that the alleged offence of criminal breach of trust was committed once and for all, based on the audit reports for 1975 and 1976, and was not a continuing offence. Therefore, the bar of limitation applied, and the complaint was barred by limitation.
Conclusion:
The court concluded that while the Chief Metropolitan Magistrate, Calcutta, had territorial jurisdiction, the complaint did not disclose all the ingredients of an offence under Section 406 IPC and was barred by limitation. Consequently, the proceeding in Case No. 2396 of 1980 was quashed, and the impugned order dated 7-1-82 was set aside. The fixed deposit receipts were ordered to be returned to the petitioners, and the operation of the order was stayed for two months.
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1985 (12) TMI 370
Issues Involved:
1. Validity of the ex-parte decree.
2. Service of summons.
3. Limitation period for setting aside the ex-parte decree.
4. Jurisdiction of the High Court under Section 115 of the CPC.
5. Impact of the compromise decree on the Appellant.
Detailed Analysis:
1. Validity of the Ex-parte Decree:
The High Court of Calcutta allowed two applications under Section 115 of the CPC, 1908, and set aside the order of the Additional Subordinate Judge, Bankura, which had annulled an ex-parte decree against the Appellant and Respondent No. 10. The Supreme Court found that the High Court treated the revisional applications as first appeals, which was not warranted by law. The High Court re-examined and re-assessed the evidence, substituting its own findings for those of the subordinate court, which is beyond the scope of its revisional jurisdiction.
2. Service of Summons:
The Supreme Court observed that the summons was not duly served upon the Appellant. The order sheet of the Trial Court showed that the plaint filed on October 14, 1974, was defective and no writ of summons could have been issued on that date. The defects were only rectified on December 6, 1974, and the amended plaint was registered on the same date. The evidence of the process server was found to be unreliable, and the return of service lacked credibility. The Appellant was not residing at the address mentioned and was on duty at the hospital during the alleged service time.
3. Limitation Period for Setting Aside the Ex-parte Decree:
Under Article 123 of the Limitation Act, 1963, the period for making an application to set aside an ex-parte decree is thirty days from the date of the decree or when the summons was not duly served, from when the applicant had knowledge of the decree. The High Court did not give a categorical finding on whether the summons was duly served but proceeded to consider the Appellant's knowledge of the decree. The Supreme Court found that the Appellant had no knowledge of the decree until November 4, 1975, and his application was within the limitation period.
4. Jurisdiction of the High Court under Section 115 of the CPC:
The Supreme Court emphasized that the High Court's revisional jurisdiction under Section 115 of the CPC is confined to questions of jurisdiction. The High Court is not entitled to re-examine or re-assess the evidence on record and substitute its own findings unless the findings of the subordinate court are manifestly contrary to evidence or result in grave injustice. The High Court erred in substituting its conjectures for the findings on evidence given by the Additional Subordinate Judge.
5. Impact of the Compromise Decree on the Appellant:
The compromise decree passed on February 6, 1975, divided all the properties among Respondents Nos. 1 to 9, with Bharat Oil Mill going exclusively to Respondent No. 1. The Appellant was not a party to the compromise. The Supreme Court held that if the Appellant succeeds in establishing his right in the firm of Bharat Oil Mill, the allocation of properties would have to be re-evaluated. However, Respondent No. 1 agreed not to claim compensation from other properties if the Appellant succeeds, thus the entire decree need not be disturbed. Respondent No. 10 did not challenge the ex-parte decree and was not considered further.
Conclusion:
The Supreme Court allowed the Appeal, reversed the judgment of the Calcutta High Court, and reinstated the order of the Additional Subordinate Judge, Bankura, setting aside the ex-parte decree against the Appellant. The suit will be tried on the basis that the compromise between Respondents Nos. 1 to 4 and Respondents Nos. 5 to 9 is not binding on the Appellant. Respondents Nos. 1 to 4 were ordered to pay the costs of the Appeal to the Appellant.
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1985 (12) TMI 369
Issues Involved:
1. Whether the offence in question is cognizable or non-cognizable.
2. Whether the kalendra filed by the police can be considered a police report or a complaint.
3. The procedural correctness of the Magistrate's handling of the case.
Detailed Analysis:
1. Cognizability of the Offence:
The primary issue is whether the offence under Section 97 of the Delhi Police Act is cognizable or non-cognizable. Section 93 of the Act criminalizes misbehavior with intent to provoke a breach of peace in public places. Section 97 prescribes penalties for such offences, punishable with a fine of up to Rs. 100 or imprisonment for up to eight days. According to Section 59 of the Act, a police officer can arrest without a warrant if the offence is committed in their presence. However, the High Court determined that since the power to arrest without a warrant is limited to specific circumstances (i.e., the offence being committed in the officer's presence), the offence under Section 97 is non-cognizable. This conclusion aligns with the definitions in Section 2 of the Code of Criminal Procedure, where a non-cognizable offence is one for which a police officer has no authority to arrest without a warrant unless specified by law.
2. Nature of the Kalendra:
The second issue is whether the kalendra (report) filed by the police qualifies as a police report under Section 173(2) of the Code or a complaint under Section 2(d). The court noted that for non-cognizable offences, a police officer cannot investigate without the Magistrate's permission as per Section 155 of the Code. The investigation conducted without such permission is illegal, but this does not preclude the Magistrate from taking cognizance of the offence. The Supreme Court in H.N. Rishbud v. State of Delhi held that defects in investigation do not affect the court's jurisdiction to take cognizance. The High Court concluded that the kalendra should be treated as a complaint, not a police report, especially given the Explanation added to the definition of "complaint" in the Code, which clarifies that a police report on a non-cognizable offence is deemed a complaint.
3. Procedural Handling by the Magistrate:
The third issue concerns the procedural handling of the case by the Magistrate. The High Court criticized the Magistrate for not utilizing Sections 260 and 206 of the Code, which allow for summary trials and special summons in petty cases. The Magistrate's repeated adjournments caused undue harassment and hardship to the petitioner. The court emphasized the need for expeditious handling of minor offences to avoid unnecessary delays and expenses. Given the prolonged nature of the proceedings and the minor penalty involved, the High Court decided to quash the further proceedings against the petitioner to serve the interests of justice.
Conclusion:
The judgment concluded that the offence under Section 97 of the Delhi Police Act is non-cognizable, the kalendra filed by the police is to be treated as a complaint, and the Magistrate's handling of the case was procedurally flawed. The High Court quashed the proceedings against the petitioner, emphasizing the need for expeditious disposal of minor cases.
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1985 (12) TMI 368
Issues Involved:
1. Framing of charge under Section 306 read with Section 34 IPC.
2. Application of Section 113A of the Evidence Act.
3. Role of individual petitioners in the alleged abetment to suicide.
Issue-wise Detailed Analysis:
1. Framing of Charge under Section 306 read with Section 34 IPC:
The court addressed whether the charge under Section 306 read with Section 34 IPC should be framed against the petitioners. The petitioners were accused of abetting the suicide of Promila, who died by consuming potassium cyanide. The court referred to State of Bihar v. Ramesh Singh (1977CriLJ1606), which states that a strong suspicion can lead to the presumption of guilt at the initial stage, warranting the framing of charges.
2. Application of Section 113A of the Evidence Act:
Section 113A of the Evidence Act, which presumes abetment of suicide by a married woman if she commits suicide within seven years of marriage and was subjected to cruelty, was pivotal. The court noted that the first condition of the marriage being within seven years was satisfied. The second condition required evidence of cruelty by the husband or his relatives, as defined under Section 498A IPC.
3. Role of Individual Petitioners in the Alleged Abetment to Suicide:
- Ram Kishan and Smt. Rama Devi (Criminal Revision No. 108/85): The court found insufficient evidence against Ram Kishan and his wife, Smt. Rama Devi. The prosecution's case, based on the statement of Ram Pershad Sharma, did not establish cruelty or abetment by these petitioners. Their actions were limited to sending messages and assurances, which did not amount to cruelty or abetment. The supplementary statement by Ram Pershad Sharma was deemed inadmissible as it was merely his opinion. Consequently, Ram Kishan and Smt. Rama Devi were discharged.
- Smt. Dayawati: The court observed that Dayawati's involvement in harassment and maltreatment was only before Promila was taken to her parents' home. There was no evidence of her involvement after Promila returned to her matrimonial home. The court concluded that the cruelties leading to Promila's suicide occurred after her return, thus Dayawati was discharged.
- Naraini Devi, Sukhbir Singh, and Daulat Ram (Criminal Misc. (Main) 994/85): The court found sufficient evidence against Naraini Devi, Sukhbir Singh, and Daulat Ram. Statements from Ram Pershad Sharma and his brother indicated continuous harassment and maltreatment due to unmet dowry demands. A letter from Raghbir Singh to his parents-in-law corroborated these claims. Therefore, the charges against these petitioners were upheld.
Conclusion:
- Criminal Revision Petition No. 108 of 1985: Accepted, resulting in the discharge of Ram Kishan and Smt. Rama Devi.
- Criminal Misc. (Main) 994 of 1985: Partially accepted; Naraini Devi, Sukhbir Singh, and Daulat Ram were rightly charged, while Smt. Dayawati was discharged.
- The trial court was instructed to amend the formal charges accordingly.
Final Disposition:
Criminal Revision No. 108 of 1985 and Criminal Misc. (Main) 994 of 1985 were disposed of as per the above findings.
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1985 (12) TMI 367
Issues Involved:
1. Classification of imported goods under the Indian Tariff Act.
2. Time-barred refund claims under Section 27(1) of the Customs Act.
3. Jurisdiction of the High Court under Article 130 of the Constitution in the context of refund claims.
Detailed Analysis:
1. Classification of Imported Goods:
The core issue was whether the goods imported by the respondents were 'Stainless Steel Plates and Sheets' under Item 63(20-A) or 'Cold rolled hoops and strips of stainless steel of 250 mm. width or more' under Item 63(14) of the Indian Tariff Act. If classified under Item 63(20-A), the duty payable was 100% ad valorem, whereas under Item 63(14), it was 40% ad valorem.
The respondents/importers had actual users' licenses for stainless steel sheets and declared the goods as such before the Customs Authorities. The Revisional Authority found that the goods were commercially known and marketed as stainless steel sheets in both the country of shipment and importation. The Revisional Authority's findings, based on the invoices and declarations, were not contested by the importers in their affidavits.
The High Court concluded that the goods were indeed stainless steel sheets, aligning with the Revisional Authority's findings. Consequently, the duty levied at 100% ad valorem under Item 63(20-A) was deemed appropriate.
2. Time-Barred Refund Claims:
The Assistant Collector rejected 48 out of 54 refund applications as time-barred under Section 27(1) of the Customs Act. The remaining six cases were considered on merits and also rejected.
The High Court noted that the importers had declared the goods as stainless steel sheets and paid the duty accordingly. The importers' subsequent claims for refunds, arguing the goods were steel strips, were not supported by evidence. The Revisional Authority's findings, which were based on the commercial understanding of the goods, were upheld. The High Court found no reason to interfere with these findings.
3. Jurisdiction Under Article 130 of the Constitution:
The respondents/importers argued that the High Court could grant relief under Article 130 of the Constitution, notwithstanding the time-bar under Section 27(1) of the Customs Act. They contended that the excess duty was illegally collected, and the Revenue could not retain it in violation of Article 130.
The High Court, however, did not find it necessary to delve into this argument. The Court held that since the goods were correctly classified as stainless steel sheets, the duty levied was appropriate, and the question of refund did not arise. Thus, the issue of jurisdiction under Article 130 was rendered moot.
Conclusion:
The High Court allowed the writ appeals, set aside the judgments in the writ petitions, and discharged the rules nisi. The Court upheld the classification of the imported goods as stainless steel sheets under Item 63(20-A) of the Indian Tariff Act, thereby affirming the duty levied at 100% ad valorem. The claims for refunds were rejected as time-barred and without merit. The Court did not find it necessary to address the jurisdictional argument under Article 130 of the Constitution.
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1985 (12) TMI 366
Issues involved: Interpretation of the term "medicine and pharmaceutical preparation" under Notification No. ST-1I-5785/X-10 (1) U. P. S. T. Act-i5/Order-81.
Summary:
The Commissioner of Sales Tax, U. P., filed a revision under Section 11 (1) of the U. P. Sales Tax Act against the Sales Tribunal's judgment in favor of the respondent-assessee, who sells 'Odomos' mosquitoes repellent cream. The Commissioner opined that Odomos is an unclassified item taxable at 8%, while the Tribunal held that it falls under the category of "medicine and pharmaceutical preparation" as per a specific notification. The Tribunal considered various meanings of the term "medicine" and noted that Odomos is used as a preventive measure against mosquito bites, akin to a medicine. The Tribunal also highlighted that Odomos is regulated under the Drug and Cosmetics Act, supporting its classification as a medicine.
The department argued that Odomos is not exclusively sold in chemist shops, but also in general merchandise stores. However, the Court emphasized that the common usage and purpose of a product should determine its classification. Referring to established legal principles, the Court upheld the Tribunal's decision, stating that Odomos, being commonly understood and used as a medicine, falls under the notification's purview. Therefore, the revision was dismissed, and no costs were awarded.
Separate Judgment:
No separate judgment was delivered by the judges in this case.
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1985 (12) TMI 365
Issues Involved:
1. Whether the industrial effluent known as 'slurry' flowing from a colliery washery is 'coal' under the Mines and Minerals (Regulation and Development) Act, 1957.
2. Whether 'slurry' is otherwise a mineral within the meaning of the said Act.
3. Whether the collection of slurry from the soil constitutes a mining operation.
Detailed Analysis:
Issue 1: Whether slurry is coal under the Mines and Minerals (Regulation and Development) Act, 1957
The court examined whether slurry, an industrial effluent from coal washeries, can be considered 'coal' under the Mines and Minerals (Regulation and Development) Act, 1957. The petitioners argued that slurry, being a by-product of coal washing, should be classified as coal. However, the court found that slurry is a residual waste product consisting of mud, oily substances, water, and fine particles of coal, which cannot be equated with coal itself. The court emphasized that slurry is an industrial effluent and not coal, stating, "Slurry and sludge, therefore, cannot be raised to the pedestal of being coal itself for the processing of which they are the consequential wastes."
Issue 2: Whether slurry is otherwise a mineral within the meaning of the Act
The court explored if slurry could be classified as a mineral under the Act. It noted that the term 'mineral' is not precisely defined in the Act but generally refers to substances extracted from the earth. The court observed that slurry, being an industrial waste product, does not originate from a natural deposit or a mining process. The court concluded that slurry does not meet the basic criteria of a mineral, stating, "Slurry is consequently a residual or a waste product or at the highest a by-product of this chemical process... intrinsically to label this industrial effluent as coal itself would, indeed, be far-fetched, if not absurd."
Issue 3: Whether the collection of slurry from the soil constitutes a mining operation
The court examined whether collecting slurry from the soil could be considered a mining operation. It noted that mining operations involve extracting minerals from the earth, either through deep mining or surface collection of natural deposits. Since slurry is an artificial deposit resulting from industrial processes, its collection does not constitute a mining operation. The court stated, "The mere collection of sludge or slurry from a place where it may get deposited artificially or is dumped cannot possibly be equated with the winning of a mineral under the Act."
Conclusion:
1. Slurry is not coal: The court concluded that slurry is not coal and thus does not fall within the ambit of the Mines and Minerals (Regulation and Development) Act, 1957. The terms 'coal' and 'slurry' are not identical or interchangeable.
2. Slurry is not a mineral: The court held that slurry is not independently a mineral and is therefore outside the scope of the Act.
3. Collection of slurry is not a mining operation: The court determined that the collection of slurry from the soil does not constitute a mining operation.
Overruled Judgment:
The court overruled the previous Division Bench judgment in Keshri Mal Jain v. State of Bihar, AIR 1985 Pat 114, which had held that slurry is coal and thus a mineral. The court found that the earlier judgment did not correctly interpret the law and was based on an inadequate examination of the issues involved.
Final Decision:
The court dismissed the writ petitions, leaving the parties to seek their ordinary remedies under the law, emphasizing that the issues presented involved disputed questions of fact that could not be resolved within the writ jurisdiction.
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1985 (12) TMI 364
Issues:
Challenge to order passed by Additional District Judge in Civil Appeal, extension of time for depositing costs, jurisdiction of the Court to extend time, condonation of delay, interpretation of Section 148 CPC.
Analysis:
The case involves a challenge to an order passed by the Additional District Judge in a Civil Appeal regarding the extension of time for depositing costs. The applicant filed a suit for specific performance of a contract, which was decreed with a condition that if the defendant deposited the required amount by a specified date, he would continue to be the owner of the house. The defendant failed to deposit the costs within the stipulated time but later deposited the amount along with a plea for condonation of delay and extension of time. The lower Court allowed the extension, leading to the appeal and subsequent revision petition.
The main contention raised by the applicant's counsel was that the trial Court extended the time despite opposition and that once a specific date and condition were prescribed for depositing the amount, the Court had no power to extend the time. On the other hand, the respondent's counsel argued that the Court had the power to condone the delay and there was no defect in the exercise of jurisdiction by the lower Court.
The Court referred to Section 148 of the Civil Procedure Code, which allows the Court to enlarge the period for doing any act even after the original period has expired. Citing the Supreme Court's decisions in Mahanth Ram Das and Smt. Periyakkal cases, the Court emphasized that the Courts have the jurisdiction to extend time under Section 148, even after the expiry of the original time fixed, to prevent manifest injustice. The Court also highlighted the importance of substantive justice over procedural justice and the principles of law that do not compel a person to perform the impossible.
The Court concluded that the trial Court, by extending the time for the defendant, acted within the boundaries of the law and did not exceed its jurisdiction. Since there was no jurisdictional error, the revision petition was dismissed, and parties were directed to bear their own costs. The judgment reaffirmed the Court's authority to extend time in appropriate cases to uphold the principles of justice and fairness.
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1985 (12) TMI 363
The assessee filed a revision against the Sales Tax Tribunal's judgment for the assessment year 1978-79. The Tribunal disallowed exemption on sales to M/s. Kishan Lai Padam Kumar due to untraceable forms, but allowed exemption on sales to M/s. National Iron Depot as forms were issued. The revision was partly allowed, granting exemption on sales to National Iron Depot.
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1985 (12) TMI 362
Issues:
1. Validity of the order of detention under the COFEPOSA Act.
2. Grounds for challenging the order of detention.
3. Justification of the detention based on the circumstances of the case.
Analysis:
The judgment by the Supreme Court of India involved a writ petition seeking the revocation of an order of detention under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act 1974. The petitioner was found carrying foreign marked gold, leading to his detention. The key issues raised included the basis of the detention order, the time lapse between the incident and the detention order, and the alleged circumvention of criminal prosecution through preventive detention.
The Court addressed the grounds raised by the petitioner, emphasizing that even a single incident of smuggling could lead to a legitimate inference of habitual smuggling activity. The petitioner's written statement indicated involvement in the business of gold smuggling, supporting the detention order. The Court rejected the argument that the solitary incident was insufficient for detention, highlighting the nature of smuggling activities and the petitioner's association with a smuggling syndicate.
Regarding the time lapse between the incident and the detention order, the Court found the explanation provided satisfactory, negating any inference of malafides. The Court clarified that while a significant delay could invalidate a detention order, the explanation presented in this case justified the timing of the order.
The Court also addressed the contention that the detention order was a means to bypass criminal prosecution. It distinguished between the preventive nature of detention and the punitive aspect of criminal prosecution, asserting that the failure of a criminal prosecution did not invalidate a detention order aimed at preventing future harmful activities. The Court concluded that the detention order was justified to prevent further smuggling activities, dismissing the argument of subverting criminal law.
In conclusion, the Court upheld the validity of the detention order, dismissing the writ petition challenging the detention. The judgment emphasized the preventive nature of detention under the COFEPOSA Act and the need to assess each case based on its specific circumstances to determine the legitimacy of the detention order.
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1985 (12) TMI 361
Issues Involved:
1. Constitutional validity of Chapter II-C read with section 58B (5A) of the Reserve Bank of India Act, 1934.
2. Violation of fundamental rights under Articles 19 and 14 of the Constitution of India.
3. Legislative competence of Parliament to enact the impugned provisions.
4. Reasonableness of restrictions imposed by the impugned legislation.
5. Compulsion to form an association under Article 19(1)(c).
Issue-wise Detailed Analysis:
1. Constitutional Validity of Chapter II-C and Section 58B (5A):
The petitioners challenged the constitutional validity of Chapter II-C read with section 58B (5A) of the Reserve Bank of India Act, 1934, introduced by the Banking Laws (Amendment) Act, 1983. The court held that the impugned legislation was constitutional and did not violate Articles 14 and 19 of the Constitution. The court emphasized that the restrictions imposed were reasonable and in the interest of the general public.
2. Violation of Fundamental Rights under Articles 19 and 14:
The petitioners argued that the provisions of Chapter II-C, particularly section 45S read with section 58B (5A), were violative of their fundamental rights guaranteed under Articles 19 and 14. The court held that the restrictions were not arbitrary or excessive and were necessary in the interests of the public. The court noted that the phrase "reasonable restriction" implies intelligent care and deliberation and that the limitations imposed were not beyond what was required in the public interest.
3. Legislative Competence of Parliament:
The petitioners questioned the legislative competence of Parliament to enact the impugned provisions, arguing that the legislation fell within the domain of state legislation under Entry 30 (money-lending) and Entry 32 (incorporation of unincorporated trading) of List II of the Seventh Schedule. The court rejected this argument, holding that the business of accepting deposits and lending money was akin to banking and fell within Entry 45 (banking) of List I of the Seventh Schedule. The court also held that even if the activities were not strictly banking, they would fall under Entry 97 (residuary powers) of List I, thus affirming Parliament's competence.
4. Reasonableness of Restrictions:
The petitioners contended that the restrictions imposed by section 45S(2) were disproportionate and amounted to a prohibition of their business. The court held that the restrictions were reasonable and necessary to protect the interests of small depositors and to prevent the misuse of public deposits. The court noted that the legislation was based on various reports and studies highlighting the need for regulation of non-banking financial intermediaries to ensure the safety of depositors' funds and the stability of the financial system.
5. Compulsion to Form an Association under Article 19(1)(c):
The petitioners argued that the impugned legislation compelled them to form an association, violating their right under Article 19(1)(c) to form associations. The court rejected this argument, stating that there was no compulsion to form a company. The legislation provided for two distinct classifications: individuals or associations with limited depositors and companies with no such limits. The court held that the classification was reasonable and related to the objective of protecting depositors' interests.
Conclusion:
The court concluded that the impugned legislation was constitutional, imposed reasonable restrictions, and was within the legislative competence of Parliament. The petition was dismissed, and all interim stay orders were vacated. The court granted a certificate for appeal to the Supreme Court, recognizing the importance of the issue and its impact on institutions across India.
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1985 (12) TMI 360
The assessee filed a revision under Section 11(1) of the U.P. Sales Tax Act against a judgment relating to the assessment year 1977-78. The Tribunal rejected the claim of the assessee regarding the sale of poppy seeds. The High Court held that the assessee was entitled to exemption on the turnover of poppy seeds as they were not imported or manufactured by the assessee. The High Court allowed the revision in part, setting aside the Tribunal's order and directing a reevaluation of the turnover.
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1985 (12) TMI 359
Issues Involved:
1. Constitutional validity of the Town Planning Scheme No. VIII (Umarwada).
2. Discrimination under Article 14 of the Constitution.
3. Adequacy and method of compensation under Article 31(2) of the Constitution.
4. Absence of appeal provisions against certain decisions of the Town Planning Officer.
Summary:
1. Constitutional Validity of the Town Planning Scheme No. VIII (Umarwada):
The appellant challenged the constitutional validity of the Town Planning Scheme No. VIII (Umarwada) u/s 226 of the Constitution of India, alleging it violated Articles 14, 19(1)(f), and 31. The High Court dismissed the writ petition, referring to the decision in State of Gujarat v. Shri Shantilal Mangaldas, which upheld the validity of the Act. The Supreme Court also upheld the Act, stating that the object of the Act is the orderly development of urban areas, which includes the preparation of development plans and town planning schemes.
2. Discrimination under Article 14 of the Constitution:
The appellant argued that acquiring land under the Town Planning Scheme instead of the Land Acquisition Act, 1894, was discriminatory and violative of Article 14. The Supreme Court referred to The Zandu Pharmaceutical Works Ltd. v. G.J. Desai and Ors., which held that there are two separate provisions for acquisition by the State Government and the local authority, and there is no option to resort to one or the other methods. The provisions of ss. 53 and 67 are not invalid on the ground of denying equal protection of the laws.
3. Adequacy and Method of Compensation under Article 31(2) of the Constitution:
The appellant contended that the Act did not provide for adequate compensation and procedural safeguards as under the Land Acquisition Act, 1894. The Supreme Court, referring to State of Gujarat v. Shri Shantilal Mangaldas, held that the Act specifies principles for determining compensation, which is not open to challenge on the ground of adequacy. The principles for determining compensation are applicable to all cases under the Town Planning Act, and the compensation is determined on the basis of market value at the date of the declaration of intention to make a scheme.
4. Absence of Appeal Provisions against Certain Decisions of the Town Planning Officer:
The appellant argued that the absence of appeal provisions against certain decisions of the Town Planning Officer was discriminatory. The Supreme Court held that the absence of an appeal does not make a provision unreasonable or unconstitutional. The Court emphasized that the Legislature is the best judge in deciding which decisions should be appealable. The remedy under Article 226 of the Constitution is available to a person aggrieved by such orders.
Conclusion:
The Supreme Court dismissed the appeal, upholding the constitutional validity of the Town Planning Scheme No. VIII (Umarwada) and the provisions of the Bombay Town Planning Act, 1954. The Court found no violation of Articles 14 and 31(2) of the Constitution and held that the absence of appeal provisions against certain decisions of the Town Planning Officer did not render the Act unconstitutional.
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1985 (12) TMI 357
Issues:
Challenge to provisional assessment under Kerala General Sales Tax Act, 1963 for tapioca transactions in July and August 1977 based on being not the last purchaser and not liable to tax. Interpretation of sub-rule (14) of rule 32 regarding mandatory or directory nature. Appellant's contention of proving not being the last purchaser with other evidence despite not furnishing form No. 25. Analysis of tax liability under section 5 for dealers. Examination of hardship and inconvenience on dealers in complying with sub-rule (14) of rule 32. Determination of whether sub-rule (14) is mandatory or directory based on statutory object and tax evasion prevention.
Detailed Analysis:
The appellant, a registered dealer under the Kerala General Sales Tax Act, challenged the provisional assessment for tapioca transactions in July and August 1977, asserting not being the last purchaser and therefore not liable to tax. The dispute centered around the requirement of form No. 25 under sub-rule (14) of rule 32, which the appellant failed to furnish. The appellant argued that despite this, he should be allowed to prove he is not the last purchaser with other evidence. The single Judge dismissed the petition deeming sub-rule (14) as mandatory, precluding the appellant from providing alternate evidence. The appeal contested this decision, with the Government Pleader arguing that even if sub-rule (14) is not mandatory, the appellant's failure to present satisfactory evidence renders the petition invalid.
In assessing the nature of sub-rule (14) of rule 32, the court considered the charging section under section 5, which outlines tax liability for dealers based on turnover. Tapioca falls under the First Schedule, with tax levied at the point of last purchase in the State for liable dealers. The court highlighted the obligation of dealers to obtain and submit form No. 25 declarations to the assessing authority by the specified deadline. The appellant's counsel contended that the provision should be construed as directory due to the perceived burden on dealers, emphasizing the need for evidence to prevent tax evasion.
The court examined the statutory objective of sub-rule (14) to prevent tax evasion and ensure accurate information availability for assessing authorities. Emphasizing the importance of declarations to avert fabrication of evidence, the court concluded that sub-rule (14) must be construed as mandatory, aligning with the single Judge's decision. On the merits, the court noted the appellant's failure to provide evidence supporting not being the last purchaser, thereby dismissing the appeal. Ultimately, the court upheld the single Judge's ruling, emphasizing the mandatory nature of sub-rule (14) and the importance of preventing tax evasion.
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1985 (12) TMI 356
Issues:
1. Interpretation of section 38(3) of the M.P. General Sales Tax Act, 1958 regarding payment of tax for admission of appeals.
2. Validity of summary dismissal of appeals for non-compliance with payment requirements.
Analysis:
The judgment by the High Court of Madhya Pradesh involved the interpretation of section 38(3) of the M.P. General Sales Tax Act, 1958, concerning the payment of tax for the admission of appeals. The case revolved around the assessment of sales tax and entry tax against the assessee by the Sales Tax Officer. The assessee filed appeals against these assessments but did not pay the required tax initially, citing a writ petition challenging the tax imposition. The Deputy Commissioner of Sales Tax issued a notice to the assessee for non-compliance with the payment of tax as required by section 38(3) of the Act. Subsequently, the appeals were dismissed by the Deputy Commissioner for not submitting proof of tax payment along with the appeals. The Tribunal upheld the dismissal, leading to the reference of legal questions to the High Court.
The assessee argued that non-compliance with payment requirements should not result in automatic dismissal of appeals. They contended that as they paid the tax before the appeals were heard for admission, the dismissal was unjustified. The Government Advocate, on the other hand, asserted that payment of tax before or at the time of filing the appeal was mandatory. The Court analyzed the language of section 38(3) of the Act, emphasizing the term "admit," which refers to the stage when the appeal is considered. Referring to previous court decisions, the Court highlighted that the appellate authority should assess compliance with tax payment at the time of admission of the appeal, not at the filing stage.
Moreover, the Court examined rule 58, which allows for the summary rejection of appeals for non-compliance but also provides the appellate authority with the power to readmit appeals if proof of payment is later furnished. The Court concluded that the Tribunal was not justified in holding that tax must be paid before or at the time of filing the appeals. Therefore, the Court answered the legal questions in the negative, ruling against the department. The parties were directed to bear their own costs in the matter.
In summary, the judgment clarified the timing of tax payment for the admission of appeals under the M.P. General Sales Tax Act, emphasizing that compliance should be assessed at the stage of appeal consideration, not at the time of filing. The Court's decision provided important insights into the interpretation of tax payment requirements in appellate proceedings, ensuring a fair and just process for all parties involved.
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1985 (12) TMI 355
Issues:
1. Whether the orders passed by the Joint Excise and Taxation Commissioner were without jurisdiction.
2. Whether the orders of the Deputy Excise and Taxation Commissioner stood merged in the order of the Tribunal.
3. The applicability of the principle of merger when an appeal is dismissed as withdrawn.
Detailed Analysis:
1. The judgment addressed the issue of jurisdiction concerning the orders passed by the Joint Excise and Taxation Commissioner. The appellant contended that the orders were without jurisdiction as they were a result of suo motu proceedings. The Court considered this contention but found no merit in it. The Court explained that the jurisdiction of the appellate or revisional authority includes the power to reverse, modify, or confirm the original order. The principle of merger applies when the appellate court takes specific actions on the merits of the case. In this situation, the Court held that the Joint Excise and Taxation Commissioner had the authority to review the orders despite the dismissal of the petitions as withdrawn.
2. Another issue raised was whether the orders of the Deputy Excise and Taxation Commissioner stood merged in the order of the Tribunal. The Court clarified that the concept of merger applies when the appellate court makes a decision on the merits of the case. In this instance, since the Tribunal had dismissed the petitions as withdrawn, the orders of the Deputy Excise and Taxation Commissioner were not automatically merged. Therefore, the Joint Excise and Taxation Commissioner had the jurisdiction to revisit the matter and make a final assessment.
3. The judgment also discussed the applicability of the principle of merger when an appeal is dismissed as withdrawn. The Court referred to a previous decision by the Delhi High Court and emphasized that the effect of a petition being withdrawn depends on the order passed by the court or tribunal. If the order is simply 'dismissed,' it is considered a dismissal on merits. However, if the order specifies 'dismissed as withdrawn,' it does not act as res judicata or a final order. The Court agreed with this interpretation of the law and rejected the contention that the withdrawal of the petitions barred further review.
In conclusion, the Court dismissed the appeals, upholding the jurisdiction of the Joint Excise and Taxation Commissioner to review the orders and rejecting the argument of merger based on the dismissal of the petitions as withdrawn.
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1985 (12) TMI 354
Issues Involved:
1. Refund of sales tax collected for the year 1968-69.
2. Legality of withholding refund pending the disposal of tax revision case.
3. Applicability of Section 33-B and Section 33-C of the A.P. General Sales Tax Act.
4. Claim of unjust enrichment by the petitioner.
Detailed Analysis:
1. Refund of Sales Tax Collected for the Year 1968-69:
The petitioner sought a writ of mandamus for the refund of Rs. 3,80,641, which was collected as sales tax for the year 1968-69 under the A.P. General Sales Tax Act. The Commercial Tax Officer, Mahaboobnagar, assessed the petitioner on 2nd August 1973. The petitioner's appeal to the first appellate authority was rejected, but the Sales Tax Appellate Tribunal allowed the appeal on the grounds that the assessment was barred by time. Consequently, the petitioner claimed a refund of the tax paid. However, the respondents contended that the refund request was premature as the department had filed a tax revision case against the Tribunal's order, which was still pending.
2. Legality of Withholding Refund Pending the Disposal of Tax Revision Case:
The respondents argued that the petitioner's request for a refund was under consideration and would be addressed after the disposal of the tax revision case. The department cited Section 33-C of the Sales Tax Act, which empowers the department to withhold the refund if the matter is pending in court. The court noted that the tax revision case filed by the department against the Tribunal's order had been dismissed, thereby necessitating the consideration of the refund request.
3. Applicability of Section 33-B and Section 33-C of the A.P. General Sales Tax Act:
Section 33-B of the Act mandates that any amount due for a refund as a result of an order in appeal or other proceedings must be refunded without the assessee having to make a claim. Section 33-C allows the assessing authority to withhold the refund if it is prejudicial to the revenue and with the prior clearance of the Deputy Commissioner. The court found that Section 33-B entitles the assessee to a refund following the annulment of the assessment, irrespective of whether the annulment was on the grounds of limitation or merits.
4. Claim of Unjust Enrichment by the Petitioner:
The respondents argued that the petitioner had collected the sales tax from consumers and should not be entitled to a refund, as it would result in unjust enrichment. The court found no evidence or material to support the contention that the petitioner would be unjustly enriched. The court also referenced relevant case law, including *Lakshminarayana v. Commercial Tax Officer* and *State of Rajasthan v. Ghasilal*, to support the conclusion that the petitioner is entitled to a refund when the assessment is annulled.
Conclusion:
The court directed the respondents to refund Rs. 1,96,439.11 to the petitioner within one month from the date of receipt of the order. The writ petition was partly allowed, and no costs were imposed. The court emphasized that Section 33-B applies to all situations where the assessment is annulled, and the reason for setting aside the assessment is not relevant to the claim for a refund.
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1985 (12) TMI 353
Issues:
1. Interpretation of second proviso to section 2(s) of the Rajasthan Sales Tax Act regarding turnover of gum not resold within the State.
2. Remedies available to the department for incorrect use of form S.T. 17.
3. Justification of the Board of Revenue's decision that no tax was payable by the dealer under section 5A of the Rajasthan Sales Tax Act.
Analysis:
Issue 1:
The case involved the interpretation of the second proviso to section 2(s) of the Rajasthan Sales Tax Act regarding the turnover of gum not resold within the State. The dealer-assessee had purchased gum with the intention of resale within the State but later sold it in inter-State trade. The Board of Revenue held that the goods were not taxable under sections 5 or 5A of the Act as they were sold in the course of inter-State trade. However, the Court found that the dealer should not have repurchased the gum against the declaration form S.T. 17 if it was intended for inter-State trade, as per rule 15 of the Rules. The Court concluded that the turnover of gum was not resold within the State as declared in form S.T. 17, and therefore, the tax liability applied.
Issue 2:
Regarding the remedies available to the department for incorrect use of form S.T. 17, the Court clarified that while penalty could be imposed under section 16(1)(k) for failing to use goods for the declared purposes, it was not the only remedy available. The department could also add the turnover of the goods in question to the taxable turnover. The Court disagreed with the notion that the only course of action was to proceed under section 16(1)(k) and emphasized that imposing penalty was not the sole remedy.
Issue 3:
The Board of Revenue had held that no tax was payable by the dealer under section 5A of the Rajasthan Sales Tax Act. However, the Court disagreed with this finding while addressing Issue 1. The Court's analysis of the relevant provisions and rules led to the conclusion that tax liability existed due to the incorrect declaration made in form S.T. 17. Therefore, the Court answered Question 3 in the negative, favoring the department and rejecting the Board's justification for no tax liability under section 5A.
In conclusion, the Court's detailed analysis of the provisions, rules, and circumstances of the case led to a decision in favor of the department regarding the tax liability of the dealer-assessee and the available remedies for incorrect declarations. The judgment clarified the application of the law in the context of the specific facts of the case, ensuring compliance with the Rajasthan Sales Tax Act.
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1985 (12) TMI 352
Issues:
- Competency of assessing authority to increase penalty amount
- Whether the applicant furnished false returns in respect of sales turnover to Railways
- Legality and justification of penalty imposed on the applicant
Competency of Assessing Authority to Increase Penalty Amount:
The applicant, a dealer under the M.P. General Sales Tax Act, was assessed for sales tax on turnover for a specific period. The assessing authority rejected the applicant's claim for a concessional tax rate on sales to Railways and P & T Department, levying tax at the full rate and imposing a penalty. The Deputy Commissioner affirmed the tax levy but remanded the penalty decision. Subsequently, the assessing authority increased the penalty amount, leading to further appeals and reductions in the penalty. The applicant sought clarification on the authority's competence to raise the penalty amount, but the Board dismissed the application, stating the issue was not raised during the appeal process.
Furnishing False Returns in Respect of Sales Turnover to Railways:
The applicant contended that the turnover of sales to Railways did not attract a concessional tax rate during the relevant period, questioning the imposition of a penalty for allegedly furnishing false returns. The appellate authorities had varying opinions on the matter, with the Tribunal reducing the penalty amount. The applicant sought a review of this decision, arguing that the issue of false returns was a question of law. The High Court partially allowed the application, directing the Board of Revenue to refer the question of whether the applicant furnished false returns and the legality of the penalty imposed to the Court for consideration.
Legality and Justification of Penalty Imposed:
The case involved disputes over the imposition of penalties on the applicant for sales to Railways and P & T Department. The assessing authority and subsequent appellate bodies differed in their assessments of whether the applicant knowingly furnished false returns, leading to penalties. The Tribunal reduced the penalty amount, prompting the applicant to seek clarity on the legality and justification of the penalties imposed. The High Court's decision to partially allow the application indicates a need for further examination of the penalty imposition and the alleged false returns concerning sales turnover to Railways.
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