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1989 (3) TMI 405
Issues Involved:
1. Compliance with Section 12A(5) of the Income-tax Act, 1961.
2. Investment compliance u/s 13(1)(d) of the Income-tax Act, 1961.
Issue 1: Compliance with Section 12A(5) of the Income-tax Act, 1961
In this appeal for the assessment year 1984-85, the primary issue was whether the requirements of Section 12A(5) were satisfied. The assessee, a charitable institution, was denied tax exemption u/s 11 on the grounds that the requirements of Section 12A were not met. The controversy centered around the interpretation of the term "such accountant" in Section 12A(b). The accounts were audited by Lovelock & Lewis, but the certificate was provided by Khare Associates. The Inspecting Asstt. Commissioner held that the same auditor must provide the certificate, a view upheld by the Commissioner (A).
The Tribunal, however, disagreed, stating that the statutory auditor does not necessarily have to furnish the certificate. Any Chartered Accountant, as defined in the Explanation below Sub-section (2) of Section 288, can audit the accounts and provide the certificate. The Tribunal concluded that the certificate by Khare Associates was valid, as long as it was not proven false. Thus, the department's view was rejected.
Issue 2: Investment compliance u/s 13(1)(d) of the Income-tax Act, 1961
The second issue involved the assessee-trust's investment in shares, which were not in the prescribed form u/s 11(5) and continued to be held after 30-11-1983. The Inspecting Asstt. Commissioner and the Commissioner (A) both held that this violated Section 13(1)(d), thereby denying the exemption u/s 11.
The assessee argued that the shares formed part of the corpus of the trust as on 1-6-1973, invoking the proviso to Section 13(1)(d). The Tribunal admitted additional evidence to verify this claim, emphasizing that substantial justice should not be denied on technical grounds. The case was remitted back to the Commissioner (A) for examination of the additional evidence regarding the corpus of the trust.
Conclusion:
The appeal was allowed for statistical purposes, with the Tribunal setting aside the order of the Commissioner (A) on the second issue and remitting the case for further examination.
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1989 (3) TMI 404
Issues Involved:
1. Criminal conspiracy
2. Extortion
3. Wrongful confinement and restraint
4. Fabrication of false evidence
5. Disappearance of evidence
6. Forgery and false entries
7. Cheating
8. Test identification parade
9. Acquittal by the High Court
10. Supreme Court's power under Article 136
Issue-wise Detailed Analysis:
1. Criminal Conspiracy:
The accused were charged with entering into a criminal conspiracy on or about 1.3.67 in Mainpuri city to hush up the theft or criminal breach of trust involving Rs. 9600/- in Government cash. The High Court found no substantial evidence to support the prosecution's claim that all the accused entered into a criminal conspiracy to commit the alleged offences. The Supreme Court upheld this finding, concluding that there was no evidence, either oral, documentary, or circumstantial, to prove a criminal conspiracy.
2. Extortion:
The accused were alleged to have extorted money from Bhargava by putting him in fear of injury. The High Court concluded that the prosecution failed to decisively prove that Bhargava was subjected to fear of injury to extort money. The Supreme Court agreed, noting that if Bhargava voluntarily handed over the fixed deposit certificates to avoid criminal proceedings, the prosecution's case of extortion was not established.
3. Wrongful Confinement and Restraint:
The prosecution claimed that Bhargava was wrongfully confined and restrained by the accused. The High Court found no credible evidence to support this claim, particularly noting the absence of any documentary evidence from the Agra Police Club where Bhargava was allegedly confined. The Supreme Court concurred, emphasizing the lack of evidence to prove Bhargava's illegal confinement or restraint.
4. Fabrication of False Evidence:
The accused were charged with fabricating false evidence, including false entries in the logbook and other documents. The High Court dismissed these charges due to insufficient evidence. The Supreme Court upheld this decision, noting that even if some documents were falsely prepared, it did not conclusively implicate the accused in the alleged offences.
5. Disappearance of Evidence:
The prosecution alleged that the accused caused evidence of the commission of the offence to disappear. The High Court found no substantial proof to support this allegation. The Supreme Court agreed, highlighting the lack of credible evidence to prove that the accused intentionally caused the disappearance of evidence.
6. Forgery and False Entries:
The accused were charged with forgery and making false entries in official documents. The High Court found the evidence insufficient to prove these charges. The Supreme Court upheld this finding, noting that the evidence presented did not conclusively establish the accused's involvement in forgery or false entries.
7. Cheating:
The accused were alleged to have cheated the Government by fraudulently claiming TA bills. The High Court found no conclusive evidence to prove that the TA claims were fraudulent. The Supreme Court upheld this decision, noting that the evidence did not sufficiently establish that the TA claims were false or fraudulent.
8. Test Identification Parade:
The High Court criticized the prosecution for not conducting a test identification parade for the accused to be identified by key witnesses. The Supreme Court agreed, noting that the failure to conduct a test identification parade weakened the prosecution's case, especially since the accused had requested it.
9. Acquittal by the High Court:
The High Court acquitted the accused, concluding that the prosecution failed to decisively prove the charges and that the evidence was inconsistent with the presumption of innocence. The Supreme Court upheld the acquittal, finding no reason to interfere with the High Court's decision, which was neither erroneous, perverse, nor improper.
10. Supreme Court's Power under Article 136:
The Supreme Court reiterated its limited scope of interference under Article 136, emphasizing that it does not interfere with concurrent findings of fact except in exceptional circumstances. The Court found no such exceptional circumstances in this case and thus upheld the High Court's acquittal.
Conclusion:
The Supreme Court, after a thorough examination of the evidence and the High Court's reasoning, upheld the acquittal of the accused. The Court found no compelling reason to interfere with the High Court's judgment, concluding that the prosecution failed to prove the charges beyond a reasonable doubt. The appeals were dismissed.
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1989 (3) TMI 403
Issues Involved:
1. Legality of recasting the Revised/Final seniority list dated 20.12.1982.
2. Validity of considering seniority in the Superintendent's cadre for further promotions.
3. Impact of non-holding of departmental examinations in 1968, 1969, and 1970.
4. Government's power to relax rules and extend the period for passing examinations.
Detailed Analysis:
1. Legality of recasting the Revised/Final seniority list dated 20.12.1982:
The High Court directed the State Government to recast the Revised/Final seniority list dated 20.12.1982, assigning seniority strictly in accordance with Rule 2 and other Government orders. The core issue was whether the Government was justified in re-arranging the seniority by giving benefit to persons in the category of "Late Passing." The Supreme Court observed that the Government had the power to relax the conditions for passing the examination. The 1955 Rules preserved the power of the Government to dispense with or relax the operation of any rule regulating the conditions of service of Government servants if it caused undue hardship. The High Court's interpretation that the 1962 circular restricted this power was incorrect, as the circular was an executive instruction, whereas the 1955 Rules were statutory.
2. Validity of considering seniority in the Superintendent's cadre for further promotions:
The High Court's directive that the seniority fixed in the Superintendent's cadre should be considered for further promotions was challenged. The Supreme Court held that the Government's action to restore the legitimate seniority of those who passed the examination late due to the Government's failure to hold the examination was justified. The Court emphasized that it would be unjust, unreasonable, and arbitrary to penalize a person for the Government's default in holding the examination.
3. Impact of non-holding of departmental examinations in 1968, 1969, and 1970:
The non-holding of examinations in 1968, 1969, and 1970 resulted in hardship for candidates who lost their chances to appear for the examination. The Supreme Court noted that the 1962 Rules required the Government to hold the examination every year. The candidates who did not exhaust all permissible chances could not be denied their seniority due to the Government's failure to conduct the examinations. The Court found that the Government's decision to promote such candidates and restore their seniority was in harmony with the object of the 1962 Rules.
4. Government's power to relax rules and extend the period for passing examinations:
The Supreme Court upheld the Government's power to relax the period for passing the examination in individual cases. It was stated that the Government made orders extending the period for individuals to pass the examination on administrative grounds or genuine hardships. These orders were made upon recommendations by the respective departments, and the individuals passed the examination within the extended period. The Court found no reason to doubt the correctness of these statements and concluded that the power to relax the conditions of the rules to avoid undue hardship could not be gainsaid.
Conclusion:
The Supreme Court allowed the appeals, reversing the judgment of the High Court, and dismissed the writ petitions filed by the contesting respondents. The Court found that the Government's actions in recasting the seniority list and considering seniority for further promotions were justified and in accordance with the rules. The Government's power to relax the conditions for passing the examination was upheld, and the actions taken to address the hardships caused by the non-holding of examinations were deemed appropriate.
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1989 (3) TMI 402
Issues:
1. Ex parte decree dissolving marriage under Section 13 of the Hindu Marriage Act, 1955.
2. Delay in filing appeal and its condonation.
3. Validity of second marriage under Section 15 of the Act.
4. Applicability of Section 12 of the Limitation Act for an appeal under Section 28 of the Hindu Marriage Act.
5. Effect of remarriage on the appeal against the decree dissolving the marriage.
6. Validity of the decree based on evidence and procedural irregularities.
Analysis:
1. The judgment involves an appeal against an ex parte decree dissolving a marriage under Section 13 of the Hindu Marriage Act, 1955. The lower court dissolved the marriage based on the finding of adultery by the first respondent after solemnization. The evidence presented was solely the oral testimony of the power of attorney holder of the petitioner. The appeal was filed by the respondents challenging this decree.
2. The appeal was filed after the expiration of the 30-day appeal period, but the delay was condoned by the court. The petitioner had remarried during this period, leading to a preliminary objection raised by the respondent's counsel regarding the appeal becoming infructuous due to the second marriage. The counsel relied on the provisions of Section 15 of the Act and cited relevant case law to support the argument.
3. The court analyzed the applicability of Section 15 of the Act concerning remarriage after the dissolution of marriage. The court referred to previous judgments and observed that the right to remarry does not automatically ensue after the expiry of the appeal period, especially if the delay in filing the appeal is condoned. The court deemed the appeal as filed within the allowed time after condonation of the delay.
4. The judgment delves into the effect of remarriage on the appeal against the decree dissolving the marriage. Citing the Supreme Court's decision in a similar case, the court emphasized that the winning party in the divorce decree should ensure no impediments to the losing party's right to appeal. The court dismissed the argument that the appeal became infructuous due to the petitioner's remarriage.
5. The court also addressed the validity of the decree based on the evidence presented and procedural irregularities. It noted that the respondents were not given an opportunity to cross-examine the witness or present their evidence due to the advancement of the trial date. Consequently, the court set aside the decree and remanded the case to the lower court for fresh disposal in accordance with the law.
6. In conclusion, the court overruled the preliminary objection regarding the appeal becoming infructuous due to the petitioner's second marriage. The judgment highlighted the importance of procedural fairness and the right to appeal in matrimonial matters, ensuring that parties have a fair opportunity to present their case and cross-examine witnesses.
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1989 (3) TMI 401
The Supreme Court allowed the appeal against the High Court's decision to dismiss a criminal writ petition. The appellant was detained under the Conservation of Foreign Exchange & Prevention of Smuggling Activities Act, 1974. The Court found that the copies of documents provided to the appellant were illegible, violating procedural safeguards. The High Court's decision was set aside, and the appellant's detention order was quashed. The appellant was ordered to be set at liberty unless needed for other proceedings.
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1989 (3) TMI 400
Issues Involved:
1. Jurisdiction of the High Court under Article 226 to interfere in contractual matters.
2. Nature of the contract between the appellant and the West Bengal Housing Board.
3. Applicability of the doctrine of promissory estoppel.
4. Compliance with the terms and conditions of the Brochure.
5. Arbitrary and discriminatory actions of the West Bengal Housing Board.
6. Validity of the cancellation of allotment of flats.
Issue-wise Detailed Analysis:
1. Jurisdiction of the High Court under Article 226 to interfere in contractual matters:
The High Court analyzed whether it had jurisdiction under Article 226 to interfere in matters arising out of contractual obligations. It referred to several precedents, including Hindusthan Petroleum Corporation v. Shyam Ganeriwala and Radha Krishna Agarwal v. The State of Bihar, which established that a breach of contract by the State or its instrumentalities does not automatically invoke constitutional remedies unless there is an element of arbitrariness or violation of statutory provisions. The Court concluded that while it generally does not interfere in pure contractual disputes, it can do so if the contract is statutory in nature or if there is a breach of statutory duty.
2. Nature of the contract between the appellant and the West Bengal Housing Board:
The Court examined whether the contract between the appellant and the West Bengal Housing Board was a statutory contract or a simple contract. It concluded that the Brochure issued by the Board had a statutory character as it was framed under the West Bengal Housing Board Act, 1972. Therefore, the contract was not a simple contract but had statutory elements, which required the Board to act fairly and not arbitrarily.
3. Applicability of the doctrine of promissory estoppel:
The appellant argued that the doctrine of promissory estoppel should apply as they had acted to their detriment based on the promises made by the Board. The Court referred to Gujarat State Financial Corporation v. M/s. Lotus Hotels Pvt. Ltd. and Delhi Cloth & General Mills Ltd. v. Union of India, which discussed the principles of promissory estoppel. The Court noted that the appellant had changed their position based on the Board's promises and that the Board could not go back on its promises if it would be inequitable to do so.
4. Compliance with the terms and conditions of the Brochure:
The appellant was required to comply with specific terms and conditions outlined in the Brochure, including submitting income tax clearance certificates. The Court found that the appellant had not fully complied with these terms, despite being given opportunities to do so. The appellant's failure to provide the necessary documents justified the Board's refusal to allot the flat.
5. Arbitrary and discriminatory actions of the West Bengal Housing Board:
The appellant claimed that the Board's actions were arbitrary and discriminatory. The Court referred to Kasturi Lal Lakshmi Reddy v. The State of Jammu & Kashmir, which emphasized that the State must act reasonably and in public interest. The Court found that the Board's actions were not arbitrary or discriminatory as the appellant had failed to comply with the required terms and conditions.
6. Validity of the cancellation of allotment of flats:
The Court examined whether the cancellation of the allotment was valid. It noted that the appellant had not complied with the necessary terms and conditions, and the Board had acted within its rights to cancel the allotment. The Court upheld the validity of the cancellation but allowed the appellant an opportunity to comply with the terms within a specified period, after which the Board should reconsider the allotment.
Conclusion:
The High Court dismissed the appeal and upheld the judgment of the learned Single Judge, which dismissed the writ proceedings. The Court noted that the appellant had not complied with the necessary terms and conditions of the Brochure, justifying the Board's refusal to allot the flat. The Court, however, allowed the appellant an opportunity to comply with the terms within four weeks, and directed the Board to reconsider the allotment if compliance was made. The Court maintained the status quo for eight weeks to facilitate this process.
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1989 (3) TMI 399
Issues Involved:
1. Whether the Assistant Collector of Customs erred in concluding that there was under-invoicing.
2. Whether the bid rate could be treated as the contract rate.
3. Applicability of Section 18 of the Foreign Exchange Regulation Act (FERA) 1973 in case of misdeclaration.
4. Scope of writ jurisdiction in reviewing the decision of the Assistant Collector of Customs.
Issue-wise Detailed Analysis:
1. Whether the Assistant Collector of Customs erred in concluding that there was under-invoicing:
The Assistant Collector of Customs concluded that the exporter had under-invoiced the tea consignment. The adjudicating officer relied on the prices quoted in the telegram from the foreign buyer, considering them as the full export value. The petitioner contended that these prices were merely bid prices and not contract prices. However, the Assistant Collector rejected this argument, stating that the telegram did not indicate the prices as bid prices. The adjudicating officer held that the prices quoted in the telegram covered the tea cost price plus the exporter's profit and other charges, thus constituting the full export value. Consequently, any attempt to export at a lower price was seen as under-invoicing, violating Section 18(1)(a) of FERA 1973.
2. Whether the bid rate could be treated as the contract rate:
The petitioner argued that the bid rate specified in the telegram was not the contract rate but merely a ceiling price. They contended that the contract was completed when the foreign buyer's offer was reciprocated by the exporter's specific sale price quotation. The Assistant Collector, however, did not accept this distinction, treating the telegram prices as the contract prices. The court noted that the adjudicating officer's conclusion was based on the materials presented and that it was not within the court's writ jurisdiction to re-evaluate these factual determinations.
3. Applicability of Section 18 of the Foreign Exchange Regulation Act (FERA) 1973 in case of misdeclaration:
The petitioner argued that any misdeclaration or wrong declaration did not amount to 'no declaration' under Section 18 of FERA 1973. They relied on previous Supreme Court decisions, which held that incorrect declarations did not constitute a violation of the old Section 12(1) of the Foreign Exchange Regulation Act 1947. However, the court noted that the legal landscape had changed with the amendment of Section 12(1) and the introduction of Section 18(1) in FERA 1973. The new provisions required declarations to be true in all material particulars. Therefore, any incorrect declaration would violate Section 18, as it did not meet the statutory requirement of truthfulness in all material respects.
4. Scope of writ jurisdiction in reviewing the decision of the Assistant Collector of Customs:
The court emphasized that in its writ jurisdiction, it was not sitting in appeal over the decisions of subordinate authorities. The court could only interfere if the authority acted without jurisdiction, violated principles of natural justice, or if there was an error of law apparent on the face of the record. In this case, the court found that the adjudicating officer's decision was based on an appraisal of evidence and materials presented by the petitioner. The court held that any error, if present, was an error of fact and not of law. Therefore, the court refused to interfere with the adjudicating officer's decision, reaffirming that the scope of writ jurisdiction did not extend to re-evaluating factual determinations.
Conclusion:
The court dismissed the application and discharged the rule, holding that the Assistant Collector of Customs did not err in his conclusion of under-invoicing. The bid rate was treated as the contract rate, and the provisions of Section 18 of FERA 1973 were applicable in cases of misdeclaration. The court reiterated the limited scope of writ jurisdiction, emphasizing that it was not a forum for re-evaluating factual determinations made by subordinate authorities.
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1989 (3) TMI 398
The High Court of Calcutta in 1989 allowed the claim of the assessee for a deduction of Rs. 1,72,750 in respect of land revenue for the assessment year 1973-74. The Tribunal found that a provision for this liability was rightly made and should be allowed as a deduction. The question posed under section 256(1) of the Income-tax Act was answered in favor of the assessee.
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1989 (3) TMI 397
Issues Involved:
1. Validity of the decree of nullity under Section 12(1)(d) of the Hindu Marriage Act.
2. Applicability of Section 15 of the Hindu Marriage Act to decrees of nullity.
3. Impact of remarriage on the appeal process.
4. Applicability of Limitation Act provisions to appeals under the Hindu Marriage Act.
Detailed Analysis:
1. Validity of the Decree of Nullity under Section 12(1)(d) of the Hindu Marriage Act:
The respondent husband filed a petition on March 7, 1984, for a declaration that the marriage with the appellant wife was a nullity under Section 12(1)(d) of the Act, on the grounds that the wife was pregnant by someone other than the respondent at the time of marriage. The IIIrd Joint Civil Judge, Senior Division Nagpur, granted the decree on May 3, 1985, declaring the marriage null and void. The appellant wife contested this decree by filing a regular civil appeal on July 19, 1985.
2. Applicability of Section 15 of the Hindu Marriage Act to Decrees of Nullity:
The core issue was whether Section 15, which allows remarriage after a decree of divorce, applies to decrees of nullity under Sections 11 and 12. The appellant contended that the term "divorce" in Section 15 should be interpreted broadly to include decrees of nullity. The respondent argued that Section 15 specifically refers to "marriage dissolved by decree for divorce," and thus does not apply to decrees of nullity. The Supreme Court examined the language of Sections 11, 12, and 13, noting that while the phraseology differs, the legal effect is the same: the relationship between spouses is severed. The Court concluded that Section 15 should be interpreted in light of Section 28, which provides for appeals against all decrees under the Act, including those under Sections 11 and 12. Therefore, Section 15 applies to decrees of nullity as well.
3. Impact of Remarriage on the Appeal Process:
The respondent remarried on June 27, 1985, before the appellant filed her appeal. The lower courts held that this remarriage rendered the appeal infructuous. The Supreme Court disagreed, stating that if Section 15 applies to decrees of nullity, then the right of appeal should not be nullified by the remarriage of the other party. The Court emphasized that the right of appeal under Section 28 is unqualified and should not be subject to the actions of the other party. Consequently, the remarriage did not render the appeal infructuous.
4. Applicability of Limitation Act Provisions to Appeals under the Hindu Marriage Act:
The respondent argued that the limitation for filing an appeal under Section 28(4) of the Act should not include the time taken to obtain copies of the judgment and decree, as per Section 29(3) of the Limitation Act. The appellant contended that Section 29(3) applies only to suits or original proceedings, not appeals. The Supreme Court agreed with the appellant, noting that Section 2(1) of the Limitation Act defines "suit" as not including an appeal or application. Therefore, the provisions of Sections 4 to 24 of the Limitation Act, including Section 12(2) which allows exclusion of time taken to obtain copies, apply to appeals under Section 28 of the Hindu Marriage Act. The appeal filed by the appellant was within the time limit when computed with this exclusion.
Conclusion:
The Supreme Court allowed the appeal, setting aside the judgments of the High Court and the first appellate court. The matter was remanded back to the first appellate court to hear the appeal on its merits. The Court also suggested that the lower appellate court consider additional evidence regarding the paternity of the child if approached by the parties. The appellant was awarded costs of Rs. 2500/-.
This comprehensive analysis ensures that all relevant issues are addressed with in-depth details and preserves the essential legal terminology and significant phrases from the original judgment.
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1989 (3) TMI 396
Issues:
Challenge to rejection of books of account on the ground of non-production during surveys.
Analysis:
The judgment pertains to a revision under Section 11 of the U.P. Sales Tax Act against a decision by the Sales Tax Tribunal regarding the assessment year 1979-80. The assessee, engaged in the business of manufacturing and selling bricks, had their books of account rejected by the Sales Tax Officer, leading to an increase in turnover. The Assistant Commissioner (Judicial) partially allowed the assessee's appeal, which was further challenged by both the revenue and the assessee through second appeals before the Tribunal. The Tribunal dismissed the assessee's appeal but partially allowed the revenue's appeal.
During the revision, the main issue raised was the justification of rejecting the books of account based solely on non-production during surveys. The counsel for the assessee argued that the rejection should not have been solely on this ground and cited relevant court decisions to support the contention. The judge emphasized that while the assessee is required to produce books of account during surveys, if unavailable, authorities should inquire from others present at the premises. Additionally, there should be a finding that non-production was intentional to evade tax. The judge noted that the Tribunal did not address these crucial aspects, failed to establish the assessee's presence during surveys, or any ulterior motive for non-production. Consequently, the judge concluded that the Tribunal's order was unsustainable.
As a result, the revision was partially allowed, setting aside the Tribunal's order. The Tribunal was directed to reconsider the appeal while accepting the books of account as correct. Each party was ordered to bear their own costs, and a copy of the order was to be sent to the concerned Tribunal as per Section 11(8) of the Act.
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1989 (3) TMI 395
Issues Involved:
1. Legality of revoking the 'U-Certificate' issued to the film "Ore Oru Gramathile".
2. Freedom of expression u/s Article 19(1)(a) of the Constitution.
3. Validity of the constitution of the Revising Committees.
4. Allegations of bias and potential law and order issues due to the film's content.
Summary of Judgment:
1. Legality of Revoking the 'U-Certificate':
The Supreme Court addressed the appeals against the Madras High Court's decision to revoke the 'U-Certificate' issued to the Tamil film "Ore Oru Gramathile". The High Court had relied on the minority view of the Second Revising Committee and the Examining Committee, which found the film biased and potentially inflammatory. However, the Supreme Court emphasized that the film's theme on the reservation policy could be expressed in a free country like India and did not violate any guidelines.
2. Freedom of Expression u/s Article 19(1)(a):
The Court reiterated that movies enjoy the guarantee of freedom of expression under Article 19(1)(a) but acknowledged the need for censorship due to the powerful impact of films. The judgment underscored that the right to express opinions includes the right to criticize government policies and advocate for changes, as long as it does not threaten the security of the state or public order.
3. Validity of the Constitution of the Revising Committees:
The High Court had questioned the legality of the First Revising Committee's constitution, claiming it was done hurriedly and without proper authority. The Supreme Court found this conclusion unjustified, stating that the committee was legally constituted under the powers delegated by the Central Government. The prompt review of the film by the committee was deemed appropriate and necessary.
4. Allegations of Bias and Potential Law and Order Issues:
The High Court had found certain scenes and dialogues in the film objectionable, claiming they could incite caste-based violence and disrupt public order. The Supreme Court, however, viewed the film and found that the controversial scenes were not intended to convey a "poisonous message" against the interests of depressed classes. The Court emphasized that freedom of expression cannot be suppressed due to threats of violence or demonstrations, and it is the duty of the State to protect this freedom against such threats.
Conclusion:
The Supreme Court allowed the appeals, reversed the judgment of the High Court, and upheld the 'U-Certificate' for the film. The Court stressed the importance of protecting freedom of expression and criticized the State's inability to handle potential hostile reactions, reaffirming that open criticism of government policies is not a valid ground for restricting expression. The writ petitions were dismissed, and no order as to costs was made.
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1989 (3) TMI 394
The Supreme Court upheld the decision of the Customs, Excise & Gold (Control) Appellate Tribunal under Sec. 35L (b) of the Central Excises and Salt Act, 1944. The appeals were dismissed as the Court found no merit in them.
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1989 (3) TMI 393
Issues:
1. Petition filed under Section 561, Cr. P.C. by Directors of a business concern accused of cheating, seeking quashing of proceedings.
2. Allegations of criminal conspiracy, fraud, and cheating in inducing complainant to part with goods without intention to pay.
3. Dispute over jurisdiction and whether the complaint discloses an offense of cheating justifying the issuance of process.
4. Comparison with a previous case to determine the applicability of legal principles.
5. Analysis of civil transaction versus criminal liability in breach of contract situations.
Analysis:
1. The petitioners, Directors of the business concern, sought to quash the proceedings against them, arguing that the complaint did not disclose any offense. The complaint alleged a criminal conspiracy where the accused induced the complainant to part with goods worth a substantial amount without the intention to pay, leading to wrongful loss for the complainant.
2. The issue of jurisdiction was raised, contending that the trial court lacked jurisdiction as the alleged occurrence took place in Calcutta, outside its jurisdiction. The complainant argued that the case was similar to a previous judgment and justified the issuance of process. The key question was whether the facts in the complaint constituted an offense of cheating.
3. The court analyzed a previous case to determine its relevance to the present situation. It highlighted that in the current case, there was no complaint from the Bank on whom the alleged fraud was practiced, indicating a different fact situation. The court emphasized the lack of evidence to establish a direct contract between the petitioners and the complainant, leading to the conclusion that the trial court lacked jurisdiction.
4. The court further examined the nature of the transactions between the parties, emphasizing that any breach of contract would not create criminal liability unless there was clear evidence of deceit independent of the civil transactions. It cited legal principles stating that not every immoral act amounts to a crime, and civil wrongs can be addressed by civil courts without criminal prosecution.
5. Ultimately, the court allowed the petition, quashing the proceedings against the accused Directors. It concluded that the facts did not establish an offense of cheating justifying the continuation of the criminal proceedings, emphasizing the distinction between civil transactions and criminal liability in breach of contract scenarios.
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1989 (3) TMI 392
Issues Involved:
1. Validity and legality of the award concerning claims Nos. 1, 8, and 9.
2. Arbitrator's power to award interest from the date of the award.
3. Legitimacy of the compensation awarded under claim No. 1.
4. Validity of the refund awarded under claim No. 8.
Detailed Analysis:
1. Validity and Legality of the Award Concerning Claims Nos. 1, 8, and 9:
Claim No. 1:
- The respondent claimed a total sum of Rs. 3,73,270.93 under claim No. 1, divided into sub-heads including compensation for delay in handing over the site, reimbursement for extra expenditure, and compensation for dismantling buildings.
- The arbitrator awarded Rs. 2,81,800 under this claim without specifying amounts under each sub-head.
- The court held that the arbitrator exceeded his jurisdiction in awarding this amount. The claim for compensation was barred by Clause 59 of the APDSS, which precludes claims for compensation on account of delays or hindrances caused by the department.
- The court noted that the contractor did not terminate the contract due to delays but accepted extensions, thus precluding him from claiming compensation under Section 55 of the Contract Act unless he had given notice of his intention to claim compensation at the time of accepting the delayed performance.
Claim No. 8:
- The respondent claimed Rs. 72,645.42 for the refund of recovery made for excess steel consumed.
- The arbitrator allowed the claim in full.
- The court found that the arbitrator was competent to allow this claim. The agreement did not specifically state that steel used for bolts and frames should be treated as wastage, thus it was within the arbitrator's purview to decide this issue.
Claim No. 9:
- The arbitrator awarded interest at the rate of 15% per annum from the date of the award till the date of payment.
- The court held that the arbitrator had no power to award interest for the period subsequent to the date of the award, as the reference to arbitration was governed by Chapter II of the Arbitration Act, which does not allow such interest.
2. Arbitrator's Power to Award Interest from the Date of the Award:
- The court cited the Supreme Court decision in Executive Engineer (Irrigation) Galimala v. Abnaduta Jena, holding that the arbitrator has no power to award interest for the period subsequent to the date of the award.
- The award of interest was deemed incompetent and an error apparent on the face of the record.
3. Legitimacy of the Compensation Awarded Under Claim No. 1:
- The court extensively discussed Clause 59 of the APDSS, which bars claims for compensation on account of delays or hindrances caused by the department.
- The court also referred to Section 55 of the Contract Act, emphasizing that the contractor did not give notice of his intention to claim compensation at the time of accepting the delayed performance.
- The court concluded that the arbitrator exceeded his jurisdiction in awarding compensation under claim No. 1, as such a claim was barred by the terms of the contract.
4. Validity of the Refund Awarded Under Claim No. 8:
- The court found that the arbitrator was competent to allow the refund claim, as the agreement did not explicitly prohibit treating steel used for bolts and frames as wastage.
- The arbitrator's decision was within the scope of the agreement, and thus, the award under claim No. 8 was upheld.
Conclusion:
- The Civil Miscellaneous Appeal and the Civil Revision Petition were allowed in part.
- The award amount under claim No. 1 was deleted.
- The arbitrator's award of interest from the date of the award till the date of decree was set aside.
- The respondent-contractor was entitled to interest from the date of the decree at the rate of 15% per annum till realization.
- No order as to costs was made.
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1989 (3) TMI 391
Issues:
Contempt petition regarding non-compliance of court order pending appeal and the validity of initiating contempt proceedings in such cases.
Analysis:
1. The case involves a contempt petition where the respondent, a Director of an institution, failed to comply with a court order regarding admission to a medical course, citing the pendency of an appeal before the Supreme Court. The question raised was whether contempt proceedings can be initiated or a rule issued against a party before exhausting the time limit for appeal against the court order in question.
2. The respondent argued that since he had filed a Special Leave Petition (SLP) before the Supreme Court against the order, contempt proceedings should not be entertained until the appeal process is completed. However, the petitioner contended that the remedy of appeal does not absolve a party from complying with a court direction unless a stay order is obtained from the appellate court.
3. The court considered the arguments and emphasized that the mere pendency of an appeal does not automatically stay the implementation of a court order. The court clarified that a party must comply with the court order unless a stay has been granted by the appellate court. Non-compliance during the appeal process without a stay order can lead to contempt proceedings.
4. The court referred to previous judgments to support its stance, highlighting that non-compliance based on the pendency of an appeal without a stay order may amount to contempt of court. The court emphasized that parties must adhere to court orders unless a stay has been explicitly granted by the appellate court.
5. Ultimately, the court held that there is no bar to initiating contempt proceedings or issuing a rule during the limitation period provided for appeal, even if an appeal has been filed but no stay has been obtained. The court answered the reference question accordingly, clarifying the stance on initiating contempt proceedings in cases of non-compliance pending appeal.
6. The judgment underscores the importance of complying with court orders and the limitations of using the appeal process as a justification for non-compliance. It establishes that parties must follow court directives unless a stay order has been granted by the appropriate appellate authority, emphasizing the significance of respecting court decisions and orders.
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1989 (3) TMI 390
Issues Involved:
1. Non-application of mind by the detaining authority.
2. Validity of detention order under preventive detention laws.
3. Relevance and proximity of past conduct to the detention order.
4. Justification for detention while the detenu is already in custody.
5. Subjective satisfaction of the detaining authority.
Issue-Wise Detailed Analysis:
1. Non-application of mind by the detaining authority:
The petitioner challenged the detention order dated May 23, 1988, on grounds of absolute non-application of mind by the detaining authority. The detaining authority failed to consider that the detenu was continuously in custody from March 14, 1988, to April 13, 1988, and no prejudicial act was alleged during this period. The detaining authority also did not acknowledge that the Designated Court had denied bail to the detenu on May 13, 1988, making the possibility of his release on bail non-existent.
2. Validity of detention order under preventive detention laws:
The detenu had been subjected to multiple detention orders under various acts, including the Gujarat Prevention of Anti-Social Activities Act, 1985, and the National Security Act. The detenu's detention was often challenged and quashed by higher courts, including the Supreme Court, due to procedural lapses and lack of fresh facts justifying the detention. The Supreme Court emphasized that preventive detention is a serious encroachment on personal freedom and must be based on proximate and relevant facts.
3. Relevance and proximity of past conduct to the detention order:
The detaining authority relied on three criminal cases (Case Nos. 372/85, 456/87, and 2/88) to justify the detention order. However, the Supreme Court found that these cases were not proximate in time to the detention order. Case No. 372/85 was lodged on June 26, 1985, and Case No. 456/87 on October 16, 1987, both of which were considered stale grounds. Case No. 2/88, registered on January 2, 1988, did not name the detenu in the FIR, and no fresh facts were presented to justify the detention.
4. Justification for detention while the detenu is already in custody:
The Supreme Court cited several precedents, including Rameshwar Shaw v. District Magistrate, Burdwan, and Alijan Mian v. District Magistrate, Dhanbad, to highlight that preventive detention while the detenu is already in custody requires the detaining authority to be aware of the custody status and present cogent, fresh facts necessitating detention. The Court found that the detaining authority in this case failed to demonstrate such awareness and fresh facts.
5. Subjective satisfaction of the detaining authority:
The Supreme Court scrutinized the subjective satisfaction of the detaining authority, which is essential for a valid detention order. The Court found that the detaining authority's statement about the possibility of the detenu being released on bail was based on a lack of awareness of the actual custody status and absence of a bail application. This lack of awareness and reliance on stale grounds indicated that the subjective satisfaction was not based on relevant and proximate materials.
Conclusion:
The Supreme Court quashed the detention order dated May 23, 1988, due to the detaining authority's failure to apply its mind, lack of fresh and proximate facts, and inadequate subjective satisfaction. The Court directed the respondents to set the detenu at liberty forthwith.
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1989 (3) TMI 389
Issues Involved:
1. Legality and validity of the detention order under the Gujarat Prevention of Anti-Social Activities Act, 1985.
2. Consideration of previous quashed detention grounds for the current detention order.
3. Requirement of fresh facts for passing a subsequent detention order.
Detailed Analysis:
1. Legality and Validity of the Detention Order:
The petitioner challenged the detention order dated 21.10.1988, issued by the Commissioner of Police, Surat City, under Section 3(2) of the Gujarat Prevention of Anti-Social Activities Act, 1985. The detaining authority justified the order on grounds of preventing the detenu from acting in a manner prejudicial to public order in Nanpura Machhiwad, Surat City. The State of Gujarat approved and confirmed the order on 26.10.1988 and 13.12.1988, respectively. The detenu's representation against the order was rejected on 19.12.1988 and 21.12.1988 by the respective authorities.
2. Consideration of Previous Quashed Detention Grounds:
The detaining authority referenced a prior detention order dated 2.1.1987, which had been quashed by the Gujarat High Court on 3.8.1987. The grounds for the previous detention were included in the current detention order to establish the detenu's long-term involvement in bootlegging activities. The detaining authority admitted in the affidavit that the previous grounds of detention were considered to show the detenu's continued illegal activities.
3. Requirement of Fresh Facts for Subsequent Detention Order:
The Supreme Court emphasized that a subsequent detention order must be based on fresh facts, especially when the previous order was quashed by a high prerogative writ like habeas corpus or certiorari. The Court cited several precedents, including Ghulam Nambi Zaki v. State of Jammu and Kashmir, Hadibandhu Das v. District Magistrate, Cuttack, and Ibrahim Bachu Bafan v. State of Gujarat, to support the principle that fresh grounds are necessary for a new detention order. The Court concluded that the detaining authority's reliance on quashed grounds invalidated the current detention order.
Conclusion:
The Supreme Court held that the inclusion of previously quashed grounds in the current detention order vitiated the order. The detaining authority's subjective satisfaction was partly based on nullified grounds, rendering the detention order invalid. The Court quashed the detention order and directed the immediate release of the detenu, provided there were no other grounds for detention.
Judgment:
The petition was allowed, and the detention order was set aside. The detenu was ordered to be released forthwith if not required for any other case.
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1989 (3) TMI 388
The Calcutta High Court ruled that the Commissioner of Income Tax cannot revise an assessment order under section 33B when the issue has already been rectified by the Appellate Authority. The Court held in favor of the assessee for the assessment year 1960-61.
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1989 (3) TMI 387
Issues:
1. Validity of notice issued under section 148 of the Income-tax Act, 1961 for the assessment year 1973-74.
2. Constitutionality, legality, and correctness of the notice issued by respondent No. 3.
3. Disclosure of income by the petitioner regarding the amount of sales tax reflected in the balance-sheets.
4. Compliance with the conditions required for the Income-tax Officer to assume jurisdiction under section 147(a) of the Act.
5. Independence of proceedings initiated under section 154/155 from those under section 147/148.
Analysis:
The petitioner, a company dealing in the wholesale business of Indian made Foreign Liquor (IMFL) and Beer, challenged the notice issued under section 148 of the Income-tax Act, 1961, for the assessment year 1973-74. The dispute primarily revolved around the amount of sales tax reflected in the balance-sheets, which the petitioner alleged was received from its supplier. The petitioner contended that the notice was unconstitutional, illegal, and incorrect, questioning the validity of the reasons recorded for reopening the assessment.
The respondents argued that the petitioner had not availed of other remedies available under the Act and that the amount shown in the balance-sheet did not constitute disclosure of income. They highlighted the independence of proceedings under section 154/155 from those under section 147/148, emphasizing that the notice was based on valid reasons and facts not subject to challenge in a writ petition.
The High Court, after considering the arguments and legal principles, found that the conditions for the Income-tax Officer to assume jurisdiction under section 147(a) were satisfied in this case. The Court cited the Supreme Court's ruling on the necessity of the officer having a reason to believe that income had escaped assessment due to the assessee's failure to disclose material facts. The Court concluded that there was sufficient material on record to support the reopening of the assessment.
Additionally, the Court rejected the petitioner's argument that the proceedings under section 154/155 could invalidate the notice issued under section 147/148, stating that the two proceedings were independent. The Court dismissed the writ petition, stating that the notice was neither illegal nor unconstitutional, and vacated the interim order passed earlier. However, the dismissal did not preclude the petitioner from pursuing other remedies available under the law.
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1989 (3) TMI 386
Issues:
1. Justifiability of exclusion of interest payable on a loan on accrual basis.
2. Assessment of individual based on accounting system followed by the company.
3. Interpretation of Section 5(1)(b) of the IT Act.
4. Taxation of income on accrual basis for an individual.
5. Obligation to maintain books of accounts for taxation.
6. Reframed questions for consideration by the High Court.
Analysis:
1. The case involved a dispute regarding the exclusion of interest payable on a loan by a company to an individual on accrual basis. The Tribunal found that the company maintained its accounts on a mercantile basis, showing the interest payable to the individual on accrual basis. However, the individual maintained regular books of account on a cash basis. The Tribunal concluded that the individual should be assessed on an accrual basis.
2. It was established that if an individual lends money to a company and receives interest, the assessment should align with the individual's accounting system. Merely because the company maintains its accounts on a mercantile basis does not mandate the individual to be taxed on an accrual basis. The Tribunal's decision to tax the interest shown as due in the company's books in the individual's hands was deemed unjustified.
3. The interpretation of Section 5(1)(b) of the IT Act was crucial in determining the taxation of income. The section outlines that an individual's total income includes what accrues or arises to them in India during a specific year. However, this does not imply taxing the individual on accrual basis if they maintain accounts and file returns on a cash basis.
4. The judgment emphasized that unless an individual is engaged in business or profession, there is no obligation under the IT Act to maintain account books. The absence of regularly maintained books of account does not warrant taxing the individual on an accrual basis. Individuals have the option to calculate income on a cash basis and file returns accordingly.
5. The High Court reframed the questions for consideration, focusing on the justification of additions made to the individual's income as interest from undisclosed sources on an accrual basis. The Court ruled in favor of the assessee, negating the Tribunal's decision on taxing the accrued interest. The Court also highlighted that the irrecoverability of a loan amount does not necessitate waiting for the company's liquidation before considering it as such.
6. In conclusion, the High Court answered the reframed questions in favor of the assessee, emphasizing the importance of aligning taxation with the individual's accounting practices and the inapplicability of taxing income on accrual basis without proper justification.
This judgment provides clarity on the taxation principles concerning interest income and the significance of accounting methods in determining tax liabilities for individuals lending to companies.
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